<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 20, 1995
REGISTRATION NOS. 33-
33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
ILLINOIS POWER COMPANY
(Exact name of registrant as specified in its charter)
ILLINOIS
(State or other jurisdiction of incorporation or organization)
37-0344645
(I.R.S. Employer Identification No.)
LARRY D. HAAB
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
ILLINOIS POWER COMPANY
500 SOUTH 27TH STREET
DECATUR, ILLINOIS 62525
(217) 424-6600
ILLINOIS POWER FINANCING I
(Exact name of registrant as specified in its Declaration of Trust)
DELAWARE
(State or other jurisdiction of incorporation or organization)
APPLIED FOR
(I.R.S. Employer Identification No.)
C/O LARRY D. HAAB
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
ILLINOIS POWER COMPANY
500 SOUTH 27TH STREET
DECATUR, ILLINOIS 62525
(217) 424-6600
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices and agent for service)
PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:
ROBERT J. REGAN, ESQ.
SCHIFF HARDIN & WAITE
7200 SEARS TOWER
CHICAGO, ILLINOIS 60606
(312) 876-1000
KEVIN STACEY, ESQ.
REID & PRIEST LLP
40 WEST 57TH STREET
NEW YORK, NEW YORK 10019
(212) 603-2144
------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING PRICE AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE TO BE PER OFFERING REGISTRATION
REGISTERED REGISTERED(1) UNIT(1)(2)(3) PRICE(1)(2)(3) FEE(1)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois Power Financing I Preferred Securities
- ------------------------------------------------
Illinois Power Company Subordinated
Debentures(4)
- ------------------------------------------------
Illinois Power Company Guarantee with respect to
Illinois Power Financing I Preferred
Securities(4)
- ------------------------------------------------------------------------------------------------------------------------
Total........................................... $100,000,000.00 100% $100,000,000.00 $34,483.00
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 457(o) under the Securities Act of 1933, which permits the
registration fee to be calculated on the basis of the maximum aggregate
offering price of all the securities listed, the table does not specify by
each class information as to the amount to be registered, proposed maximum
offering price per unit or proposed maximum aggregate offering price.
(2) Estimated solely for the purpose of determining the registration fee.
(3) Exclusive of accrued interest and dividends, if any.
(4) No separate consideration will be received for Illinois Power Company's
Subordinated Debentures or its Guarantee.
------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
Information contained herein is subject to completion or amendment. A
Registration Statement relating to these Securities has been filed with the
Securities and Exchange Commission. These Securities may not be sold nor
may offers to buy be accepted prior to the time the Registration Statement
becomes effective. This Prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
Securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
PRELIMINARY PROSPECTUS DATED OCTOBER 20, 1995
PROSPECTUS
4,000,000 PREFERRED SECURITIES
[LOGO] ILLINOIS POWER FINANCING I
% TRUST ORIGINATED PREFERRED SECURITIES(SM) ("TOPRS(SM)")
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
ILLINOIS POWER COMPANY
------------------------
The % Trust Originated Preferred Securities (the "Preferred Securities")
offered hereby represent preferred undivided beneficial interests in the assets
of Illinois Power Financing I, a statutory business trust formed under the laws
of the State of Delaware ("Illinois Power Financing I" or the "Trust"). Illinois
Power Company, an Illinois corporation ("Illinois Power"), will directly or
indirectly own all the common securities (the "Common Securities" and, together
with the Preferred Securities, the "Trust Securities") representing undivided
beneficial interests in the assets of Illinois Power Financing I. Illinois Power
Financing I exists for the sole purpose of issuing the Preferred Securities and
Common Securities and investing the proceeds thereof in an equivalent amount of
%
(continued on next page)
SEE "RISK FACTORS" COMMENCING ON PAGE 5 OF THIS PROSPECTUS FOR CERTAIN
INFORMATION RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE
PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF DISTRIBUTIONS ON THE
PREFERRED SECURITIES MAY BE DEFERRED AND THE RELATED UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES OF SUCH DEFERRAL.
Application will be made to list the Preferred Securities on the New York
Stock Exchange. If so approved, trading of the Preferred Securities on the New
York Stock Exchange is expected to commence within a 30-day period after the
initial delivery of the Preferred Securities. See "Underwriting."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) COMMISSION(2) TRUST(3)(4)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Preferred Security................ $25.00 (3) $25.00
- -------------------------------------------------------------------------------------------------------
Total................................. $100,000,000 (3) $100,000,000
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued distributions, if any, from , 1995.
(2) Illinois Power Financing I and Illinois Power have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting."
(3) In view of the fact that the proceeds of the sale of the Preferred
Securities will be invested in the Subordinated Debentures, Illinois Power
has agreed to pay to the Underwriters as compensation (the "Underwriters'
Compensation") for their arranging the investment therein of such proceeds
$ per Preferred Security (or $ in the aggregate); provided, that
such compensation for sales of 10,000 or more Preferred Securities to a
single purchaser will be $ per Preferred Security. Therefore, to the
extent of such sales, the actual amount of Underwriters' Compensation will
be less than the aggregate amount specified in the preceding sentence. See
"Underwriting."
(4) Expenses of the offering which are payable by Illinois Power are estimated
to be $400,000.
------------------------
The Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that delivery of the Preferred Securities will be made only in book-entry form
through the facilities of The Depository Trust Company, on or about
, 1995.
------------------------
MERRILL LYNCH & CO.
SMITH BARNEY INC.
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
------------------------
The date of this Prospectus is , 1995.
(SM) "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
<PAGE> 3
(continued from previous page)
Junior Subordinated Deferrable Interest Notes due 2044 (the "Subordinated
Debentures") of Illinois Power. Upon an event of a default under the Declaration
(as defined herein), the holders of Preferred Securities will have a preference
over the holders of the Common Securities with respect to payments in respect of
distributions and payments upon redemption, liquidation and otherwise.
Holders of the Preferred Securities are entitled to receive cumulative cash
distributions at an annual rate of % of the liquidation amount of $25 per
Preferred Security, accruing from the date of original issuance and payable
quarterly in arrears on March 31, June 30, September 30, and December 31 of each
year, commencing December 31, 1995 ("distributions"). The payment of
distributions out of moneys held by Illinois Power Financing I and payments on
liquidation of Illinois Power Financing I or the redemption of Preferred
Securities, as set forth below, are guaranteed by Illinois Power (the
"Guarantee") to the extent Illinois Power Financing I has funds available
therefor as described under "Description of the Preferred Securities Guarantee."
The obligations of Illinois Power under the Guarantee are subordinate and junior
in right of payment to all other liabilities of Illinois Power and pari passu
with the most senior preferred stock issued, from time to time, if any, by
Illinois Power. The obligations of Illinois Power under the Subordinated
Debentures are subordinate and junior in right of payment to all present and
future Senior Indebtedness (as defined herein) of Illinois Power, which
aggregated approximately $2.2 billion at September 30, 1995, and rank pari passu
with Illinois Power's general unsecured creditors other than holders of Senior
Indebtedness.
The distribution rate and the distribution payment date and other payment
dates for the Preferred Securities will correspond to the interest rate and
interest payment date and other payment dates on the Subordinated Debentures,
which will be the sole assets of Illinois Power Financing I. As a result, if
principal or interest is not paid on the Subordinated Debentures, no amounts
will be paid on the Preferred Securities. If Illinois Power does not make
principal or interest payments on the Subordinated Debentures, Illinois Power
Financing I will not have sufficient funds to make distributions on the
Preferred Securities, in which event, the Guarantee will not apply to such
distributions until Illinois Power Financing I has sufficient funds available
therefor.
Illinois Power has the right to defer payments of interest on the
Subordinated Debentures by extending the interest payment period on the
Subordinated Debentures at any time for up to 20 consecutive quarters (each, an
"Extension Period"). If interest payments are so deferred, distributions on the
Preferred Securities will also be deferred. During such Extension Period,
distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at an annual rate of % per annum compounded
quarterly, and during any Extension Period, holders of Preferred Securities will
be required to include deferred interest income in their gross income for United
States federal income tax purposes in advance of receipt of the cash
distributions with respect to such deferred interest payments. There could be
multiple Extension Periods of varying lengths throughout the term of the
Subordinated Debentures. See "Description of the Subordinated Debentures --
Option to Extend Interest Payment Period." See "Risk Factors -- Option to Extend
Interest Payment Period" and "United States Federal Income Taxation -- Original
Issue Discount." In the event of any such deferral, the holders of the Preferred
Securities do not have the right to appoint a special representative or trustee
or otherwise act to protect their interests.
The Subordinated Debentures are redeemable by Illinois Power, in whole or in
part, from time to time, on or after , 2000, or at any time in
certain circumstances upon the occurrence of a Tax Event (as defined herein). If
Illinois Power redeems Subordinated Debentures, Illinois Power Financing I must
redeem Trust Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Subordinated Debentures so redeemed at $25 per
Preferred Security plus accrued and unpaid distributions thereon (the
"Redemption Price") to the date fixed for redemption. See "Description of the
Preferred Securities -- Mandatory Redemption." The Preferred Securities will be
redeemed upon maturity of the Subordinated Debentures. The Subordinated
Debentures mature on , 2044. In addition, upon the occurrence of a
Special Event (as defined herein), unless the Subordinated Debentures are
redeemed in the limited circumstances described herein, Illinois Power Financing
I shall be terminated, with the result that the Subordinated Debentures will be
distributed to the holders of the Preferred Securities, on a pro rata basis, in
lieu of any cash distribution. See "Description of the Preferred Securities --
Special Event Redemption or Distribution." In the case of the occurrence of a
Special Event that is a Tax Event, Illinois Power will have the right in certain
circumstances to redeem the Subordinated Debentures, which would result in the
redemption by Illinois Power Financing I of Trust Securities in the same amount
on a pro rata basis. If the Subordinated Debentures are distributed to the
holders of the Preferred Securities, Illinois Power will use its best efforts to
have the Subordinated Debentures listed on the New York Stock Exchange or on
such other exchange as the Preferred Securities are then listed. See
"Description of the Preferred Securities -- Special Event Redemption or
Distribution" and "Description of the Subordinated Debentures."
In the event of the involuntary or voluntary dissolution, winding up or
termination of Illinois Power Financing I, the holders of the Preferred
Securities will be entitled to receive for each Preferred Security a liquidation
amount of $25 plus accrued and unpaid distributions thereon (including interest
thereon) to the date of payment, unless, in connection with such dissolution,
winding up or termination, the Subordinated Debentures are distributed to the
holders of the Preferred Securities. See "Description of the Preferred
Securities -- Liquidation Distribution Upon Termination."
------------------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING TRANSACTIONS, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE> 4
AVAILABLE INFORMATION
Illinois Power is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, information statements and other information
with the Securities and Exchange Commission (the "Commission"). Reports,
information statements and other information filed by Illinois Power with the
Commission may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices located at Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60661 and
at the 13th Floor, Seven World Trade Center, New York, New York 10048. Copies of
such material may be obtained from the public reference section of the
Commission, 450 Fifth Street, N.W. Washington, D.C. 20549, at prescribed rates.
Such reports, information statements and other information concerning Illinois
Power may also be inspected at the offices of the New York Stock Exchange, 20
Broad Street, New York, New York 10005 and the Chicago Stock Exchange, 440 South
LaSalle Street, Chicago, Illinois 60605, on which exchanges certain of Illinois
Power's securities are listed. In addition, such reports, information statements
and other information concerning Illinois Power can be inspected at the
principal office of Illinois Power, 500 South 27th Street, Decatur, Illinois
62525.
This Prospectus does not contain all the information set forth in the
Registration Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement"), which Illinois Power and Illinois Power
Financing I have filed with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). Statements contained or incorporated by
reference herein concerning the provisions of documents are necessarily
summaries of such documents, and each statement is qualified in its entirety by
reference to the Registration Statement.
No separate financial statements of Illinois Power Financing I have been
included herein. Illinois Power and Illinois Power Financing I do not consider
that such financial statements would be material to holders of Preferred
Securities because Illinois Power Financing I is a newly formed special purpose
entity, has no operating history and no independent operations and is not
engaged in, and does not propose to engage in, any activity other than as set
forth below. See "Illinois Power Financing I."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by Illinois Power with the
Commission pursuant to the Exchange Act are incorporated herein by reference:
1. Illinois Power's Annual Report on Form 10-K for the year ended
December 31, 1994;
2. Illinois Power's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1995 and June 30, 1995; and
3. Illinois Power's Current Report on Form 8-K dated August 11, 1995.
All documents subsequently filed by Illinois Power pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Preferred Securities offered
hereby, shall be deemed to be incorporated by reference in this Prospectus and
to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
ILLINOIS POWER WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF
THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF SUCH
PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN
OR MAY BE INCORPORATED IN THIS PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS TO
SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE INTO THE
INFORMATION THAT THIS PROSPECTUS INCORPORATES. REQUEST FOR SUCH COPIES SHOULD BE
DIRECTED TO MS. CYNTHIA G. STEWARD, CONTROLLER, ILLINOIS POWER COMPANY, 500
SOUTH 27TH STREET, DECATUR, ILLINOIS 62525, TELEPHONE NUMBER (217) 424-6600.
3
<PAGE> 5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus.
Preferred Securities Offered. 4,000,000 % Trust Originated Preferred
Securities evidencing preferred undivided beneficial interests in the assets of
Illinois Power Financing I are offered hereby. Holders of the Preferred
Securities are entitled to receive cumulative cash distributions at an annual
rate of % of the liquidation amount of $25 per Preferred Security, accruing
from the date of original issuance and payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year, commencing on December 31,
1995. The distribution rate and the distribution and other payment dates for the
Preferred Securities will correspond to the interest rate and interest and other
payment dates on the Subordinated Debentures, which will be the sole assets of
Illinois Power Financing I. As a result, if principal or interest is not paid on
the Subordinated Debentures, no amounts will be paid on the Preferred
Securities. See "Description of the Preferred Securities."
Subordinated Debentures. Illinois Power Financing I will invest the
proceeds from the issuance of the Preferred Securities and Common Securities in
an equivalent amount of % Subordinated Debentures due , 2044 of
Illinois Power. The Subordinated Debentures will be subordinate and junior in
right of payment to all Senior Indebtedness of Illinois Power. See "Description
of the Subordinated Debentures -- Subordination."
Preferred Securities Guarantee. Payment of distributions out of moneys held
by Illinois Power Financing I, and payments on liquidation of Illinois Power
Financing I or the redemption of Preferred Securities are guaranteed by Illinois
Power to the extent Illinois Power Financing I has funds available therefor. If
Illinois Power does not make principal or interest payments on the Subordinated
Debentures, Illinois Power Financing I will not have sufficient funds to make
distributions on the Preferred Securities, in which event the Guarantee will not
apply to such distributions until Illinois Power Financing I has sufficient
funds available therefor. See "Description of the Preferred Securities
Guarantee" and "Effect of Obligations Under the Subordinated Debentures and the
Guarantee" herein. The obligations of Illinois Power under the Guarantee are
subordinate and junior in right of payment to all other liabilities of Illinois
Power and will rank pari passu with the most senior preferred stock issued by
Illinois Power. See "Risk Factors -- Ranking of Subordinate Obligations Under
the Guarantee and Subordinated Debentures" and "Description of the Preferred
Securities Guarantee."
Interest Deferral. Illinois Power has the right to defer payments of
interest on the Subordinated Debentures by extending the interest payment period
on the Subordinated Debentures, at any time, for up to 20 consecutive quarters.
If interest payments on the Subordinated Debentures are so deferred,
distributions on the Preferred Securities will also be deferred. During any such
deferral, distributions will continue to accrue with interest thereon (to the
extent permitted by law) as described herein. There could be multiple Extension
Periods of varying lengths throughout the term of the Subordinated Debentures.
During an Extension Period, holders of Preferred Securities will be required to
include deferred interest income in their gross income in advance of receipt of
the cash interest payments attributable thereto. See "Description of the
Preferred Securities -- Voting Rights," "Description of the Subordinated
Debentures -- Option to Extend Interest Payment Period" and "United States
Federal Income Taxation -- Original Issue Discount," and "-- Market Discount and
Bond Premium."
Redemption. The Subordinated Debentures are redeemable by Illinois Power
(in whole or in part) from time to time, on or after , 2000 or
at any time in certain circumstances upon the occurrence of a Tax Event. If the
Subordinated Debentures are redeemed, Illinois Power Financing I must redeem
Trust Securities having an aggregate liquidation amount equal to the aggregate
principal amount of Subordinated Debentures so redeemed. The Preferred
Securities will be redeemed upon maturity of the Subordinated Debentures. See
"Description of the Preferred Securities -- Mandatory Redemption."
4
<PAGE> 6
RISK FACTORS
Prospective purchasers of Preferred Securities should carefully review the
information contained elsewhere in this Prospectus and should particularly
consider the following matters.
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND SUBORDINATED
DEBENTURES
Illinois Power's obligations under the Guarantee are subordinate and junior
in right of payment to all liabilities of Illinois Power and pari passu with the
most senior preferred stock issued, from time to time, if any, by Illinois
Power. The obligations of Illinois Power under the Subordinated Debentures are
subordinate and junior in right of payment to all present and future Senior
Indebtedness of Illinois Power and pari passu with obligations to or rights of
Illinois Power's general unsecured creditors other than holders of Senior
Indebtedness. As of September 30, 1995, Senior Indebtedness aggregated
approximately $2.2 billion. There are no terms in the Preferred Securities, the
Subordinated Debentures or the Guarantee that limit Illinois Power's ability to
incur additional indebtedness, including indebtedness that ranks senior to the
Subordinated Debentures and the Guarantee. See "Description of Preferred
Securities Guarantee -- Status of the Guarantee" and "Description of the
Subordinated Debentures -- Subordination" herein.
RIGHTS UNDER THE GUARANTEE
The Guarantee will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). Wilmington Trust Company
will act as indenture trustee under the Guarantee for the purposes of compliance
with the provisions of the Trust Indenture Act (the "Guarantee Trustee"). The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of the
Preferred Securities.
The Guarantee guarantees to the holders of the Preferred Securities the
payment of (i) any accrued and unpaid distributions that are required to be paid
on the Preferred Securities, to the extent Illinois Power Financing I has funds
available therefor, (ii) the Redemption Price, including all accrued and unpaid
distributions with respect to Preferred Securities called for redemption by
Illinois Power Financing I, to the extent Illinois Power Financing I has funds
available therefor, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of Illinois Power Financing I (other than in
connection with the distribution of Subordinated Debentures to the holders of
Preferred Securities or a redemption of all the Preferred Securities), the
lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid
distributions on the Preferred Securities to the date of the payment to the
extent Illinois Power Financing I has funds available therefor or (b) the amount
of assets of Illinois Power Financing I remaining available for distribution to
holders of the Preferred Securities in liquidation of Illinois Power Financing
I. The holders of a majority in liquidation amount of the Preferred Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee or to direct the exercise of
any trust or power conferred upon the Guarantee Trustee under the Guarantee. If
the Guarantee Trustee fails to enforce the Guarantee, any holder of Preferred
Securities may institute a legal proceeding directly against Illinois Power to
enforce the Guarantee Trustee's rights under the Guarantee without first
instituting a legal proceeding against Illinois Power Financing I, the Guarantee
Trustee or any other person or entity. If Illinois Power were to default on its
obligation to pay amounts payable on the Subordinated Debentures, Illinois Power
Financing I would lack available funds for the payment of distributions or
amounts payable on redemption of the Preferred Securities or otherwise, and, in
such event, holders of the Preferred Securities would not be able to rely upon
the Guarantee for payment of such amounts. Instead, holders of the Preferred
Securities would rely on the enforcement by the Property Trustee of its rights
as registered holder of the Subordinated Debentures against Illinois Power
pursuant to the terms of the Subordinated Debentures. See "Description of the
Preferred Securities Guarantee" and "Description of the Subordinated
Debentures." The Declaration provides that each holder of Preferred Securities,
by acceptance thereof, agrees to the provisions of the Guarantee, including the
subordination provisions thereof, and the Indenture (as defined herein).
5
<PAGE> 7
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If (i) Illinois Power Financing I fails to pay distributions in full on the
Preferred Securities for six consecutive quarterly distribution periods or (ii)
a Declaration Event of Default (as defined herein) occurs and is continuing,
then the holders of Preferred Securities would rely on the enforcement by the
Property Trustee (as defined herein) of its rights as a holder of the
Subordinated Debentures against Illinois Power. In addition, the holders of a
majority in liquidation amount of the Preferred Securities will have the right
to direct the time, method, and place of conducting any proceeding for any
remedy available to the Property Trustee or to direct the exercise of any trust
or power conferred upon the Property Trustee under the Declaration, including
the right to direct the Property Trustee to exercise the remedies available to
it as a holder of the Subordinated Debentures. If the Property Trustee fails to
enforce its rights under the Subordinated Debentures to the fullest extent
permitted by law, a holder of Preferred Securities may institute a legal
proceeding directly against Illinois Power to enforce the Property Trustee's
rights under the Subordinated Debentures without first instituting any legal
proceeding against the Property Trustee or any other person or entity.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Illinois Power has the right under the Indenture to defer payments of
interest on the Subordinated Debentures by extending the interest payment period
at any time, and from time to time, on the Subordinated Debentures. As a
consequence of such an extension, quarterly distributions on the Preferred
Securities would be deferred (but despite such deferral would continue to accrue
with interest thereon compounded quarterly to the extent permitted by applicable
law) by Illinois Power Financing I during any such Extension Period. Such right
to extend the interest payment period for the Subordinated Debentures is limited
to a period not exceeding 20 consecutive quarters. In the event that Illinois
Power exercises this right to defer interest payments, then (a) Illinois Power
shall not declare or pay dividends on, or make a distribution with respect to,
or redeem, purchase or acquire, or make a liquidation payment with respect to,
any of its capital stock, provided, however, Illinois Power may declare and pay
a stock dividend where the dividend stock is the same stock as that on which the
dividend is being paid, (b) Illinois Power shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by Illinois Power which rank pari
passu with or junior to the Subordinated Debentures, and (c) Illinois Power
shall not make any guarantee payments with respect to the foregoing (other than
pursuant to the Guarantee). Prior to the termination of any such Extension
Period, Illinois Power may further extend the interest payment period; provided,
that such Extension Period, together with all such previous and further
extensions thereof, may not exceed 20 consecutive quarters. Upon the termination
of any Extension Period and the payment of all amounts then due, Illinois Power
may commence a new Extension Period, subject to the above requirements. See
"Description of the Preferred Securities -- Distributions" and "Description of
the Subordinated Debentures -- Option to Extend Interest Payment Period."
Because Illinois Power has the right to extend the interest payment period
for the Subordinated Debentures, the Preferred Securities will be treated as
having been issued with original issue discount ("OID") for United States
federal income tax purposes. Should Illinois Power exercise its right to defer
payments of interest by extending the interest payment period, each holder of
Preferred Securities will continue to accrue income (as OID) in respect of the
deferred interest allocable to its Preferred Securities for United States
federal income tax purposes, which will be allocated, but not distributed, to
holders of record of Preferred Securities. As a result, each such holder of
Preferred Securities will recognize income for United States federal income tax
purposes in advance of the receipt of cash, regardless of their method of
accounting, and will not receive the cash from Illinois Power Financing I
related to such income if such holder disposes of its Preferred Securities prior
to the record date for the date on which distributions of such amounts are made.
Illinois Power has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debentures. However, should Illinois Power determine to exercise
such right in the future, the market price of the Preferred Securities is likely
to be affected. A holder that disposes of its Preferred Securities during an
Extension Period, therefore, might not receive the same return on its investment
as a holder that continues to hold its Preferred Securities. In addition, as a
result of
6
<PAGE> 8
the existence of Illinois Power's right to defer interest payments, the market
price of the Preferred Securities (which represent an undivided beneficial
interest in the Subordinated Debentures) may be more volatile than other
securities on which OID accrues that do not have such rights. See "United States
Federal Income Taxation -- Original Issue Discount."
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence of a Special Event, Illinois Power Financing I shall be
terminated, except in the limited circumstance described below, with the result
that, after satisfaction of liabilities to creditors, the Subordinated
Debentures would be distributed to the holders of the Trust Securities in
connection with the liquidation of Illinois Power Financing I. In the case of a
Special Event that is a Tax Event, in certain circumstances Illinois Power shall
have the right to redeem the Subordinated Debentures, in whole or in part, in
lieu of a distribution of the Subordinated Debentures by Illinois Power
Financing I; in which event Illinois Power Financing I will redeem the Trust
Securities on a pro rata basis to the same extent as the Subordinated Debentures
are redeemed by Illinois Power. See "Description of the Preferred Securities --
Special Event Redemption or Distribution."
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for Preferred Securities if a termination of Illinois Power Financing I were to
occur. Accordingly, the Preferred Securities that an investor may purchase,
whether pursuant to the offer made hereby or in the secondary market, or the
Subordinated Debentures that a holder of Preferred Securities may receive on
termination of Illinois Power Financing I, may trade at a discount to the price
that the investor paid to purchase the Preferred Securities offered hereby.
Because holders of Preferred Securities may receive Subordinated Debentures upon
the occurrence of a Special Event, prospective purchasers of Preferred
Securities are also making an investment decision with regard to the
Subordinated Debentures and should carefully review all the information
regarding the Subordinated Debentures contained herein. See "Description of the
Preferred Securities -- Special Event Redemption or Distribution" and
"Description of the Subordinated Debentures -- General."
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and will
not be entitled to vote to appoint, remove or replace, or to increase or
decrease the number of, Illinois Power Trustees (as defined herein), which
voting rights are vested exclusively in the holder of the Common Securities. See
"Description of the Preferred Securities -- Voting Rights."
TRADING PRICE
The Preferred Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying
Subordinated Debentures. A holder who disposes of his Preferred Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Subordinated Debentures through the
date of disposition in income as ordinary income (i.e., OID), and to add such
amount to his adjusted tax basis in his pro rata share of the underlying
Subordinated Debentures deemed disposed of. To the extent the selling price is
less than the holder's adjusted tax basis (which will include, in the form of
OID, all accrued but unpaid interest), a holder will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes. See
"United States Federal Income Taxation -- Original Issue Discount" and "-- Sales
of Preferred Securities."
7
<PAGE> 9
ILLINOIS POWER COMPANY
Illinois Power was incorporated under the laws of Illinois on May 25, 1923.
Effective May 27, 1994, Illinois Power became a subsidiary of Illinova
Corporation ("Illinova"), an exempt holding company under the Public Utility
Holding Company Act of 1935, as amended, pursuant to a merger in which each
outstanding share of Illinois Power's Common Stock was converted into one share
of common stock of Illinova. Illinois Power is engaged in the generation,
transmission, distribution and sale of electric energy and the distribution and
sale of natural gas in the State of Illinois. Its service area is a widely
diversified industrial and agricultural area comprising approximately 15,000
square miles in northern, central and southern Illinois. Electric service is
provided at retail to 310 incorporated municipalities, adjacent suburban and
rural areas and numerous unincorporated municipalities having an estimated
aggregate population of 1,265,000. Gas service is provided to 257 incorporated
municipalities, adjacent suburban areas and numerous unincorporated
municipalities having an estimated aggregate population of 920,000. The larger
cities served include Decatur, East St. Louis (gas only), Champaign, Danville,
Belleville, Granite City, Bloomington (electric only), Galesburg, Urbana and
Normal (electric only). The executive offices of Illinois Power are located at
500 South 27th Street, Decatur, Illinois 62525, and Illinois Power's telephone
number is (217) 424-6600.
ILLINOIS POWER FINANCING I
Illinois Power Financing I is a statutory business trust formed under
Delaware law pursuant to (i) a declaration of trust, dated as of October 17,
1995, executed by Illinois Power, as sponsor (the "Sponsor"), and the trustees
of Illinois Power Financing I (the "Illinois Power Trustees") and (ii) the
filing of a certificate of trust with the Secretary of State of the State of
Delaware on October 17, 1995. Such declaration will be amended and restated in
its entirety (as so amended and restated, the "Declaration") substantially in
the form filed as an exhibit to the Registration Statement of which this
Prospectus forms a part. The Declaration will be qualified as an indenture under
the Trust Indenture Act. Upon issuance of the Preferred Securities, the
purchasers thereof will own all of the Preferred Securities. See "Description of
the Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust
Company." Illinois Power will directly or indirectly acquire Common Securities
in an aggregate liquidation amount equal to 3% of the total capital of Illinois
Power Financing I. Illinois Power Financing I exists for the exclusive purposes
of (i) issuing the Trust Securities representing undivided beneficial interests
in the assets of Illinois Power Financing I, (ii) investing the gross proceeds
of the Trust Securities in the Subordinated Debentures and (iii) engaging in
only those other activities necessary, convenient or incidental thereto.
Illinois Power Financing I has a term of approximately 55 years, but may
terminate earlier as provided in the Declaration.
Pursuant to the Declaration, the number of Illinois Power Trustees will
initially be three. Two of the Illinois Power Trustees (the "Regular Trustees")
will be persons who are employees or officers of or who are affiliated with
Illinois Power. The third trustee will be a financial institution that maintains
its principal place of business in the State of Delaware and is unaffiliated
with Illinois Power, which trustee will serve as property trustee under the
Declaration and as indenture trustee for the purposes of compliance with the
provisions of the Trust Indenture Act (the "Property Trustee"). Initially,
Wilmington Trust Company, a Delaware banking corporation, will be the Property
Trustee until removed or replaced by the holder of the Common Securities.
Wilmington Trust Company will also act as indenture trustee under the Guarantee
for the purposes of compliance with the provisions of the Trust Indenture Act
(the "Guarantee Trustee"). See "Description of the Preferred Securities
Guarantee."
The Property Trustee will hold title to the Subordinated Debentures for the
benefit of the holders of the Trust Securities, and the Property Trustee will
have the power to exercise all rights, powers and privileges under the Indenture
(as defined herein) as the holder of the Subordinated Debentures. In addition,
the Property Trustee will maintain exclusive control of a segregated
non-interest bearing bank account (the "Property Account") to hold all payments
made in respect of the Subordinated Debentures for the benefit of the holders of
the Trust Securities. The Property Trustee will make payments of distributions
and payments on liquidation, redemption and otherwise to the holders of the
Trust Securities out of funds from the Property Account. The Guarantee Trustee
will hold the Guarantee for the benefit of the holders of the Preferred
8
<PAGE> 10
Securities. Illinois Power, as the direct or indirect holder of all the Common
Securities, will have the right to appoint, remove or replace any Illinois Power
Trustee and to increase or decrease the number of Illinois Power Trustees;
provided, that (i) the number of Illinois Power Trustees shall be at least two,
and (ii) at least one shall be a Regular Trustee. Illinois Power will pay all
fees and expenses related to Illinois Power Financing I and the offering of the
Trust Securities. See "Description of the Subordinated Debentures --
Miscellaneous."
The rights of the holders of the Preferred Securities, including rights to
information and voting rights, are set forth in the Declaration, the Delaware
Business Trust Act (the "Trust Act") and the Trust Indenture Act. See
"Description of the Preferred Securities."
9
<PAGE> 11
SUMMARY FINANCIAL INFORMATION OF ILLINOIS POWER
(THOUSANDS EXCEPT PER SHARE AMOUNTS AND RATIOS)
The following information is qualified in its entirety by the information
appearing elsewhere in this Prospectus and by the information and financial
statements incorporated in this Prospectus by reference.
<TABLE>
<CAPTION>
12 MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------------------------------------------------ JUNE 30, 1995
1990 1991 1992 1993(A) 1994(A) (UNAUDITED)(A)(B)
---------- ---------- ---------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Operating Revenues................ $1,469,480 $1,474,905 $1,479,449 $1,581,190 $1,589,465 $ 1,566,806
Net Income (Loss)................. (78,484) 109,244 122,088 (56,038) 180,242 185,474
Preferred Dividend Requirements... 36,839 30,866 28,854 26,123 24,834 25,803
Net Income (Loss) Applicable to
Common Stock.................... (115,323) 78,378 93,234 (82,161) 161,767(f) 166,030(f)
Ratio of Earnings to Fixed
Charges(c)...................... 0.70(d) 1.85 2.02 0.80(d) 2.75 2.79
Ratio of Earnings to Combined
Fixed Charges and Preferred
Stock Dividend
Requirements(c)................. 0.60(e) 1.48 1.61 0.70(e) 2.21 2.26
</TABLE>
<TABLE>
<CAPTION>
AT JUNE 30, 1995
-------------------------
ACTUAL AS ADJUSTED
---------- -----------
(UNAUDITED)
<S> <C> <C>
CAPITALIZATION
Long-Term Debt...................................................................... $1,868,571 $1,868,571
Preferred Stock (not subject to mandatory redemption)............................... 221,512 121,512
Company-obligated Preferred Securities of Illinois Power Capital, L.P. ............. 97,000 97,000
Company-obligated Preferred Securities of Illinois Power Financing I................ -- 100,000
Common Stock Equity................................................................. 1,453,466 1,453,466
---------- ----------
Total Capitalization............................................................ $3,640,549 $3,640,549
========== ==========
</TABLE>
- -------------------------
(a) Subsequent to Illinois Power's merger with Illinova, net assets of Illinova
Generating Company (formerly IP Group, Inc.) were transferred in the form of
a dividend from the Company to Illinova. The income statement data contained
herein has been restated to reflect the financial results of Illinois
Power's current operations.
(b) In the opinion of Illinois Power, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair statement of the results for the
unaudited twelve-month period ended June 30, 1995, have been made.
(c) Earnings used in the calculation of the ratio of earnings to fixed charges
and the ratio of earnings to combined fixed charges and preferred stock
dividend requirements include the allowance for funds used during
construction and the deferred financing costs associated with Illinois
Power's Clinton Power Station and are before deduction of income taxes and
fixed charges. Fixed charges include interest on long-term debt, related
amortization of debt discount, premium, and expense, other interest and that
portion of rent expense which is estimated to be representative of the
interest component. Preferred stock dividend requirements have been
increased to an amount representing the pre-tax earnings required to cover
such dividend requirements.
(d) The ratios of earnings to fixed charges for the years ended December 31,
1993 and 1990 of 0.80 and 0.70, respectively, indicate that earnings were
inadequate to cover fixed charges. The dollar amounts of the coverage
deficiency for the years ended 1993 and 1990 were approximately $37 million
and $68 million, respectively. Excluding the loss on disallowed plant costs
of $200 million, net of income taxes, recorded in the third quarter of 1993,
the ratio of earnings to fixed charges would have been 2.25 for the year
ended 1993. Excluding the loss on disallowed plant costs of $137 million,
net of income taxes, recorded in the fourth quarter of 1990, the ratio of
earnings to fixed charges would have been 1.41 for the year ended 1990.
(e) The ratios of earnings to combined fixed charges and preferred stock
dividend requirements for the years ended December 31, 1993 and 1990 of 0.70
and 0.60, respectively, indicate that earnings were inadequate to cover
combined fixed charges and preferred stock dividend requirements. The dollar
amounts of the coverage deficiency for the years ended 1993 and 1990 were
approximately $63 million and $105 million, respectively. Excluding the loss
on disallowed plant costs of $200 million, net of income taxes, recorded in
the third quarter of 1993, the ratio of earnings to combined fixed charges
and preferred stock dividend requirements would have been 1.83 for the year
ended 1993. Excluding the loss on disallowed plant costs of $137 million,
net of income taxes, recorded in the fourth quarter of 1990, the ratio of
earnings to combined fixed charges and preferred stock dividend requirements
would have been 1.09 for the year ended 1990.
(f) Includes $6 million excess of carrying amount over consideration paid for
redeemed preferred stock.
10
<PAGE> 12
ACCOUNTING TREATMENT
The financial statements of Illinois Power Financing I will be reflected in
Illinois Power's consolidated financial statements with the Preferred Securities
shown as Company-obligated mandatorily redeemable preferred securities of
Illinois Power Financing I holding subordinated debentures of Illinois Power.
USE OF PROCEEDS
All of the proceeds from the sale of the Preferred Securities will be
invested by Illinois Power Financing I in Subordinated Debentures of Illinois
Power issued pursuant to the Indenture therefor described herein and ultimately
will be used by Illinois Power to purchase or redeem outstanding shares of
preferred stock of Illinois Power, and for general corporate purposes.
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Property Trustee, Wilmington Trust Company, will act as
indenture trustee under the Declaration for purposes of compliance with the
provisions of the Trust Indenture Act. The terms of the Preferred Securities
will include those stated in the Declaration and those made part of the
Declaration by the Trust Indenture Act. The following summary of the principal
terms and provisions of the Preferred Securities does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the
Declaration (a copy of which is filed as an exhibit to the Registration
Statement of which this Prospectus is a part) and the Trust Indenture Act.
GENERAL
The Declaration authorizes the Regular Trustees to issue on behalf of
Illinois Power Financing I the Trust Securities, which represent undivided
beneficial interests in the assets of Illinois Power Financing I. All of the
Common Securities will be owned, directly or indirectly, by Illinois Power. The
Common Securities rank pari passu, and payments will be made thereon on a pro
rata basis, with the Preferred Securities, except that upon the occurrence of a
Declaration Event of Default, the rights of the holders of the Common Securities
to receive payment of periodic distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Preferred Securities. The Declaration does not permit the issuance by
Illinois Power Financing I of any securities other than the Trust Securities or
the incurrence of any indebtedness by Illinois Power Financing I. Pursuant to
the Declaration, the Property Trustee will own the Subordinated Debentures
purchased by Illinois Power Financing I for the benefit of the holders of the
Trust Securities. The payment of distributions out of money held by Illinois
Power Financing I, and payments upon redemption of the Trust Securities or
liquidation of Illinois Power Financing I, are guaranteed by Illinois Power to
the extent described under "Description of the Preferred Securities Guarantee."
The Guarantee will be held by Wilmington Trust Company, the Guarantee Trustee,
for the benefit of the holders of the Preferred Securities. The Guarantee does
not cover payment of distributions when Illinois Power Financing I does not have
sufficient available funds to pay such distributions. In such event, the remedy
of a holder of Preferred Securities is to vote to direct the Property Trustee to
enforce the Property Trustees rights under the Subordinated Debentures. See
"Description of the Preferred Securities -- Voting Rights."
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per annum
of % of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears for more than one quarter will bear interest thereon at
the rate per annum of % thereof compounded quarterly. The term "distribution"
as used herein includes any such interest payable unless otherwise stated. The
amount of distributions payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months.
11
<PAGE> 13
Distributions on the Preferred Securities will be cumulative, will accrue
from , 1995, and will be payable quarterly in arrears on March
31, June 30, September 30, and December 31 of each year, commencing December 31,
1995, when, as and if funds are available and determined to be so payable by the
Property Trustee, except as otherwise described below.
Illinois Power has the right under the Indenture to defer payments of
interest on the Subordinated Debentures by extending the interest payment period
from time to time on the Subordinated Debentures, which, if exercised, would
defer quarterly distributions on the Preferred Securities (though such
distributions would continue to accrue with interest since interest would
continue to accrue on the Subordinated Debentures) during any such Extension
Period. Such right to extend the interest payment period for the Subordinated
Debentures is limited to a period not exceeding 20 consecutive quarters. In the
event that Illinois Power exercises this right, then (a) Illinois Power shall
not declare or pay dividends on, make distributions with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to, any of its
capital stock, and (b) Illinois Power shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by Illinois Power that rank pari passu with or junior to such
Subordinated Debentures. Prior to the termination of any such Extension Period,
Illinois Power may further extend the interest payment period; provided, that
such Extension Period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarters. Upon the termination of any
Extension Period and the payment of all amounts then due, Illinois Power may
select a new Extension Period, subject to the above requirements. See
"Description of the Subordinated Debentures -- Interest" and "-- Option to
Extend Interest Payment Period." If distributions are deferred, the deferred
distributions and accrued interest thereon shall be paid to holders of record of
the Preferred Securities as they appear on the books and records of Illinois
Power Financing I on the record date next following the termination of such
deferral period.
Distributions on the Preferred Securities must be paid on the dates payable
to the extent that Illinois Power Financing I has funds available for the
payment of such distributions in the Property Account. Illinois Power Financing
I's funds available for distribution to the holders of the Preferred Securities
will be limited to payments received from Illinois Power on the Subordinated
Debentures. See "Description of the Subordinated Debentures." The payment of
distributions out of moneys held by Illinois Power Financing I is guaranteed by
Illinois Power to the extent set forth under "Description of the Preferred
Securities Guarantee."
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the books and records of Illinois Power Financing I on
the relevant record dates, which, as long as the Preferred Securities remain in
book-entry only form, will be one Business Day (as defined herein) prior to the
relevant payment dates. Such distributions will be paid through the Property
Trustee who will hold amounts received in respect of the Subordinated Debentures
in the Property Account for the benefit of the holders of the Trust Securities.
Subject to any applicable laws and regulations and the provisions of the
Declaration, each such payment will be made as described under "Book-Entry Only
Issuance -- The Depository Trust Company" below. In the event that the Preferred
Securities do not continue to remain in book-entry only form, the relevant
record dates for the Preferred Securities shall conform to the rules of any
securities exchange on which the securities are listed and, if none, shall be
selected by the Regular Trustees, which dates shall be at least one Business Day
but less than 60 Business Days prior to the relevant payment dates. In the event
that any date on which distributions are to be made on the Preferred Securities
is not a Business Day, then payment of the distributions payable on such date
will be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. A "Business Day" shall mean any day other than
Saturday, Sunday or any other day on which banking institutions in New York City
(in the State of New York) are permitted or required by any applicable law to
close.
MANDATORY REDEMPTION
The Subordinated Debentures will mature on , 2044, and may be
redeemed, in whole or in part, at any time on or after , 2000, or at
any time in certain circumstances upon the occurrence of a Tax
12
<PAGE> 14
Event (as defined herein). Upon the repayment of the Subordinated Debentures,
whether at maturity or upon redemption, the proceeds from such repayment or
payment shall simultaneously be applied to redeem Trust Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Debentures so repaid or redeemed at the Redemption Price; provided,
that holders of Trust Securities shall be given not less than 30 nor more than
60 days notice of such redemption, except in the case of payments upon maturity.
See "Description of the Subordinated Debentures -- Optional Redemption." In the
event that fewer than all of the outstanding Preferred Securities are to be
redeemed, the Preferred Securities will be redeemed pro rata as described under
"Book -- Entry Only Issuance -- The Depository Trust Company" below.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
"Tax Event" means that the Regular Trustees shall have received an opinion
of a nationally recognized independent tax counsel experienced in such matters
(a "Dissolution Tax Opinion") to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority, in each
case on or after the date of this Prospectus, there is more than an
insubstantial risk that (i) Illinois Power Financing I is or within 90 days will
be subject to United States federal income tax with respect to income accrued or
received on the Subordinated Debentures, (ii) interest payable to Illinois Power
Financing I on the Subordinated Debentures is or within 90 days will not be
deductible by Illinois Power for United States federal income tax purposes or
(iii) Illinois Power Financing I is or within 90 days will be subject to more
than a de minimis amount of other taxes, duties or other governmental charges,
which change or amendment becomes effective on or after the date of this
Prospectus.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion from independent counsel experienced in practice under the
1940 Act (as defined herein) to the effect that, as a result of the occurrence
of a change in law or regulation or a written change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law"), there is more than
an insubstantial risk that Illinois Power Financing I is or will be considered
an "investment company" which is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), which Change in 1940 Act Law
becomes effective on or after the date of this Prospectus.
If, at any time, a Tax Event or an Investment Company Event (each, as
defined above, a "Special Event"), shall occur and be continuing, Illinois Power
Financing I shall, except in the limited circumstances described below, be
terminated with the result that, after satisfaction of liabilities to creditors,
the Subordinated Debentures with an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
distribution rate of, and accrued and unpaid interest equal to accrued and
unpaid distributions on, the Trust Securities, would be distributed to the
holders of the Trust Securities in liquidation of such holders' interests in
Illinois Power Financing I on a pro rata basis within 90 days following the
occurrence of such Special Event; provided, however, that in the case of the
occurrence of a Tax Event, that such termination and distribution shall be
conditioned on (i) the Regular Trustees' receipt of an opinion of nationally
recognized independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published revenue rulings of
the Internal Revenue Service, to the effect that the holders of the Trust
Securities will not recognize any gain or loss for United States federal income
tax purposes as a result of such termination of Illinois Power Financing I and
such distribution of Subordinated Debentures and (ii) Illinois Power being
unable to avoid such Tax Event within such 90-day period by taking some
ministerial action or pursuing some other reasonable measure that will have no
adverse effect on Illinois Power Financing I, Illinois Power or the holders of
the Trust Securities. Furthermore, if after receipt of a Dissolution Tax Opinion
by the Regular Trustees (i) Illinois Power has received an opinion (a
"Redemption Tax Opinion") of nationally recognized independent tax counsel
experienced in such matters that, as a result of a Tax Event, there is more than
an insubstantial risk that Illinois Power would be precluded from deducting
13
<PAGE> 15
the interest on the Subordinated Debentures for United States federal income tax
purposes, even after the Subordinated Debentures were distributed to the holders
of Trust Securities in liquidation of such holders' interests in Illinois Power
Financing I as described above, or (ii) the Regular Trustees shall have been
informed by such tax counsel that it cannot deliver a No Recognition Opinion to
Illinois Power Financing I, Illinois Power shall have the right, upon not less
than 30 nor more than 60 days notice, to redeem the Subordinated Debentures, in
whole or in part, for cash within 90 days following the occurrence of such Tax
Event, and, following such redemption, Trust Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the Subordinated
Debentures so redeemed shall be redeemed by Illinois Power Financing I at the
Redemption Price on a pro rata basis; provided, however, that if at the time
there is available to Illinois Power or Illinois Power Financing I the
opportunity to eliminate, within such 90-day period, the Tax Event by taking
some ministerial action, such as filing a form or making an election or pursuing
some other similar reasonable measure that has no adverse effect on Illinois
Power Financing I, Illinois Power or the holders of the Trust Securities,
Illinois Power or Illinois Power Financing I will pursue such measure in lieu of
redemption.
If the Subordinated Debentures are distributed to the holders of the
Preferred Securities, Illinois Power will use its best efforts to cause the
Subordinated Debentures to be listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities are then listed.
After the date for any distribution of Subordinated Debentures upon
termination of Illinois Power Financing I, (i) the Preferred Securities will no
longer be deemed to be outstanding, (ii) the Depositary or its nominee, as the
record holder of the Preferred Securities, will receive a registered global
certificate or certificates representing the Subordinated Debentures to be
delivered upon such distribution, and (iii) any certificates representing
Preferred Securities not held by the Depositary or its nominee will be deemed to
represent beneficial interests in the Subordinated Debentures having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the distribution rate of, and accrued and
unpaid interest equal to accrued and unpaid distributions on such Preferred
Securities until such certificates are presented to Illinois Power or its agent
for transfer or reissuance.
There can be no assurance as to the market prices for either the Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for the Preferred Securities if a termination of Illinois Power Financing I were
to occur. Accordingly, the Preferred Securities that an investor may purchase,
whether pursuant to the offer made hereby or in the secondary market, or the
Subordinated Debentures that an investor may receive if a termination of
Illinois Power Financing I were to occur, may trade at a discount to the price
that the investor paid to purchase the Preferred Securities offered hereby.
REDEMPTION PROCEDURES
Illinois Power Financing I may not redeem fewer than all of the outstanding
Preferred Securities unless all accrued and unpaid distributions have been paid
on all Preferred Securities for all quarterly distribution periods terminating
on or prior to the date of redemption.
If Illinois Power Financing I gives a notice of redemption in respect of
Preferred Securities (which notice will be irrevocable), then, by 12:00 noon,
New York City time, on the redemption date, provided that Illinois Power has
paid to the Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Subordinated Debentures, Illinois Power
Financing I will irrevocably deposit with the Depositary (as defined herein)
funds sufficient to pay the applicable Redemption Price and will give the
Depositary irrevocable instructions and authority to pay the Redemption Price to
the holders of the Preferred Securities. See "Book-Entry Only Issuance -- The
Depository Trust Company." If notice of redemption shall have been given and
funds deposited as required, then, immediately prior to the close of business on
the date of such deposit, distributions will cease to accrue and all rights of
holders of such Preferred Securities so called for redemption will cease, except
the right of the holders of such Preferred Securities to receive the Redemption
Price but without interest on such Redemption Price. In the event that any date
fixed for redemption of Preferred Securities is not a Business Day, then payment
of the Redemption Price payable on such date will be made on the next succeeding
day that is a Business Day (without any interest or other
14
<PAGE> 16
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the Redemption Price in
respect of Preferred Securities is improperly withheld or refused and not paid
either by Illinois Power Financing I, or by Illinois Power pursuant to the
Guarantee, distributions on such Preferred Securities will continue to accrue at
the then applicable rate from the original redemption date to the date of
payment, in which case the actual payment date will be considered the date fixed
for redemption for purposes of calculating the Redemption Price.
In the event that fewer than all of the outstanding Preferred Securities
are to be redeemed, the Preferred Securities will be redeemed pro rata as
described below under "Book-Entry Only Issuance -- The Depository Trust
Company."
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), Illinois Power or its affiliates may at
any time, and from time to time, purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON TERMINATION
In the event of any voluntary or involuntary dissolution, winding-up or
termination of Illinois Power Financing I (each, a "Liquidation"), then holders
of the Preferred Securities will be entitled to receive out of the assets of
Illinois Power Financing I, after satisfaction of liabilities to creditors,
distributions in an amount equal to the aggregate of the stated liquidation
amount of $25 per Preferred Security plus accrued and unpaid distributions
thereon to the date of payment (the "Liquidation Distribution"), unless, in
connection with such Liquidation, Subordinated Debentures in an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, the Preferred Securities
have been distributed on a pro rata basis to the holders of the Preferred
Securities in exchange for such Preferred Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because Illinois Power Financing I has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by Illinois Power Financing I on the Preferred
Securities shall be paid on a pro rata basis. The holders of the Common
Securities will be entitled to receive distributions upon any such Liquidation
pro rata with the holders of the Preferred Securities, except that if a
Declaration Event of Default has occurred and is continuing, the Preferred
Securities shall have a preference over the Common Securities with regard to
such distributions.
Pursuant to the Declaration, Illinois Power Financing I shall terminate (i)
on December 31, 2050, the expiration of the term of Illinois Power Financing I,
(ii) upon the bankruptcy of Illinois Power or the holder of the Common
Securities, (iii) upon the filing of a certificate of dissolution or its
equivalent with respect to the holder of the Common Securities or Illinois
Power, or the revocation of the charter of the holder of the Common Securities
or Illinois Power and the expiration of 90 days after the date of revocation
without a reinstatement thereof, (iv) upon the distribution of Subordinated
Debentures upon the occurrence of a Special Event, (v) upon the entry of a
decree of a judicial dissolution of the holder of the Common Securities,
Illinois Power or Illinois Power Financing I, or (vi) upon the redemption of all
the Trust Securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Indenture Event of Default")
constitutes an event of default under the Declaration with respect to the Trust
Securities (a "Declaration Event of Default"); provided, that pursuant to the
Declaration, the holder of the Common Securities will be deemed to have waived
any Declaration Event of Default with respect to the Common Securities until all
Declaration Events of Default with respect to the Preferred Securities have been
cured, waived or otherwise eliminated. Until such Declaration Events of Default
with respect to the Preferred Securities have been so cured, waived, or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the holders of the Preferred Securities and only the holders of the
Preferred Securities will have the right to direct the Property Trustee with
respect to certain matters under the Declaration, and therefore the Indenture.
15
<PAGE> 17
Upon the occurrence of a Declaration Event of Default, the Property
Trustee, as the sole holder of the Subordinated Debentures, will have the right
under the Indenture to declare the principal of and interest on the Subordinated
Debentures to be immediately due and payable. Illinois Power and Illinois Power
Financing I are each required to file annually with the Property Trustee an
officer's certificate as to its compliance with all conditions and covenants
under the Declaration.
VOTING RIGHTS
Except as described herein under "Description of the Preferred Securities
Guarantee -- Amendments and Assignment" and as otherwise required by law and the
Declaration, the holders of the Preferred Securities will have no voting rights.
In the event that Illinois Power elects to defer payments of interest on the
Subordinated Debentures as described above under "-- Distributions," the holders
of the Preferred Securities do not have the right to appoint a special
representative or trustee or otherwise act to protect their interests.
Subject to the requirement of the Property Trustee obtaining a tax opinion
in certain circumstances set forth in the last sentence of this paragraph, the
holders of a majority in aggregate liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or direct the
exercise of any trust or power conferred upon the Property Trustee under the
Declaration including the right to direct the Property Trustee, as holder of the
Subordinated Debentures, to (i) exercise the remedies available under the
Indenture with respect to the Subordinated Debentures, (ii) waive any past
Indenture Event of Default that is waivable under the Base Indenture (as defined
herein), (iii) exercise any right to rescind or annul a declaration that the
principal of all the Subordinated Debentures shall be due and payable, provided,
however, that, where a consent or action under the Indenture would require the
consent or act of holders of more than a majority in principal amount of the
Subordinated Debentures (a "Super-Majority") affected thereby, only the holders
of at least the proportion in liquidation amount of the Preferred Securities
which the relevant Super-Majority represents of the aggregate principal amount
of the Subordinated Debentures may direct the Property Trustee to give such
consent or take such action. If the Property Trustee fails to enforce its rights
under the Subordinated Debentures or the Declaration to the fullest extent
permitted by law, a record holder of Preferred Securities may, after such
holder's written request to the Property Trustee to enforce such rights,
institute a legal proceeding directly against Illinois Power to enforce the
Property Trustee's rights under the Subordinated Debentures or the Declaration
without first instituting any legal proceeding against the Property Trustee or
any other person or entity. The Property Trustee shall notify all holders of the
Preferred Securities of any notice of default received from the Indenture
Trustee with respect to the Subordinated Debentures. Such notice shall state
that such Indenture Event of Default also constitutes a Declaration Event of
Default. Except with respect to directing the time, method and place of
conducting a proceeding for a remedy, the Property Trustee shall not take any of
the actions described in clauses (i), (ii) or (iii) above unless the Property
Trustee has obtained an opinion of tax counsel to the effect that, as a result
of such action, Illinois Power Financing I will not fail to be classified as a
grantor trust for United States federal income tax purposes and that each holder
of Preferred Securities will not fail to be treated as owning an undivided
beneficial interest in the Subordinated Debentures.
In the event the consent of the Property Trustee, as the holder of the
Subordinated Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture, the Property Trustee
shall request the direction of the holders of the Trust Securities with respect
to such amendment, modification or termination and shall vote with respect to
such amendment, modification or termination as directed by 66 2/3% in
liquidation amount of the Trust Securities voting together as a single class;
provided, however, that where a consent under the Indenture would require the
consent of a Super-Majority, the Property Trustee may only give such consent at
the direction of the holders of at least the proportion in liquidation amount of
the Trust Securities which the relevant Super-Majority represents of the
aggregate principal amount of the Subordinated Debentures outstanding. The
Property Trustee shall be under no obligation to take any such action in
accordance with the directions of the holders of the Trust Securities unless the
Property Trustee has obtained an opinion of tax counsel to the affect that for
the purposes of United States federal income tax Illinois Power Financing I will
not be classified as other than a grantor trust and that
16
<PAGE> 18
each holder of Preferred Securities will not fail to be treated as owning an
undivided beneficial interest in the Subordinated Debentures.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Preferred Securities may
be given at a separate meeting of holders of Preferred Securities convened for
such purpose, at a meeting of all of the holders of Trust Securities or pursuant
to written consent. The Regular Trustees will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be
mailed to each holder of record of Preferred Securities. Each such notice will
include a statement setting forth the following information: (i) the date of
such meeting or the date by which such action is to be taken; (ii) a description
of any resolution proposed for adoption at such meeting on which such holders
are entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the holders of Preferred Securities will be required for Illinois Power
Financing I to redeem and cancel Preferred Securities or distribute Subordinated
Debentures in accordance with the Declaration.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned at such time by Illinois Power or any entity directly
or indirectly controlling or controlled by, or under direct or indirect common
control with, Illinois Power, shall not be entitled to vote or consent and
shall, for purposes of such vote or consent, be treated as if such Preferred
Securities were not outstanding.
The procedures by which holders of Preferred Securities may exercise their
voting rights are described below. See "-- Book-Entry Only Issuance -- The
Depository Trust Company" below.
Holders of the Preferred Securities will have no rights to appoint or
remove the Illinois Power Trustees, who may be appointed, removed or replaced
solely by Illinois Power as the indirect or direct holder of all of the Common
Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by the Regular
Trustees (and in certain circumstances the Property Trustee or the Delaware
Trustee), provided that, if any proposed amendment provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the holders of Trust Securities,
whether by way of amendment to the Declaration or otherwise or (ii) the
dissolution, winding-up or termination of Illinois Power Financing I other than
pursuant to the terms of the Declaration, then the holders of the Trust
Securities voting together as a single class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of at least 66 2/3% in liquidation amount of the Trust
Securities affected thereby; provided, that, if any amendment or proposal
referred to in clause (i) above would adversely affect only the Preferred
Securities or the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of 66 2/3% in liquidation amount
of such class of Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause Illinois Power
Financing I to be classified for purposes of United States federal income
taxation as other than a grantor trust, (ii) reduce or otherwise materially
adversely affect the powers of the Property Trustee or the Delaware Trustee or
(iii) cause Illinois Power Financing I to be deemed an "investment company"
which is required to be registered under the 1940 Act.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
Illinois Power Financing I may not consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other body, except as
described below. Illinois Power Financing I may, with the consent of the Regular
Trustees and
17
<PAGE> 19
without the consent of the holders of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any State; provided, that (i) such successor entity either (x)
expressly assumes all of the obligations of Illinois Power Financing I under the
Trust Securities or (y) substitutes for the Preferred Securities other
securities having substantially the same terms as the Trust Securities (the
"Successor Securities"), so long as the Successor Securities rank the same as
the Trust Securities rank with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) Illinois Power expressly
acknowledges a trustee of such successor entity possessing the same powers and
duties as the Property Trustee as the holder of the Subordinated Debentures,
(iii) the Preferred Securities or any Successor Securities are listed, or any
Successor Securities will be listed upon notification of issuance, on any
national securities exchange or with another organization on which the Preferred
Securities are then listed or quoted, (iv) such merger, consolidation,
amalgamation or replacement does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the holders of the Trust Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the holders'
interest in the new entity), (vi) such successor entity has a purpose identical
to that of Illinois Power Financing I, (vii) prior to such merger,
consolidation, amalgamation or replacement, Illinois Power has received an
opinion of a nationally recognized independent counsel to Illinois Power
Financing I experienced in such matters to the effect that, (A) such merger,
consolidation, amalgamation or replacement does not adversely affect the rights,
preferences and privileges of the holders of the Trust Securities (including any
Successor Securities) in any material respect (other than with respect to any
dilution of the holders' interest in the new entity), (B) following such merger,
consolidation, amalgamation or replacement, neither Illinois Power Financing I
nor such successor entity will be required to register as an investment company
under the 1940 Act and (C) following such merger, consolidation, amalgamation or
replacement, Illinois Power Financing I (or the Successor Entity) will continue
to be classified as a grantor trust for United States federal income tax
purposes, and each holder of the Trust Securities will be treated as owning an
undivided beneficial interest in the Subordinated Debentures, and (viii)
Illinois Power guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee and the
Common Securities Guarantee. Notwithstanding the foregoing, Illinois Power
Financing I shall not, except with the consent of holders of 100% in liquidation
amount of the Trust Securities, consolidate, amalgamate, merge with or into, or
be replaced by any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it, if such consolidation,
amalgamation, merger or replacement would cause Illinois Power Financing I or
the Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depositary for
the Preferred Securities. The Preferred Securities will be issued only as
fully-registered securities registered in the name of Cede & Co. (DTC's
nominee). One or more fully-registered global Preferred Securities certificates,
representing the total aggregate number of Preferred Securities, will be issued
and will be deposited with DTC.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the global Preferred
Securities as represented by a global certificate.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
18
<PAGE> 20
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange,
the American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others, such as
securities brokers and dealers, banks and trust companies that clear
transactions through or maintain a direct or indirect custodial relationship
with a Direct Participant either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
each Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Preferred Securities.
Transfers of ownership interests in the Preferred Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in the Preferred Securities, except in the event that
use of the book-entry system for the Preferred Securities is discontinued.
To facilitate subsequent transfers, all the Preferred Securities deposited
by Participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of Preferred Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Preferred Securities. DTC's records reflect
only the identity of the Direct Participants to whose accounts such Preferred
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements
that may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Preferred Securities are being redeemed, DTC will reduce the amount of the
interest of each Direct Participant in such Preferred Securities in accordance
with its procedures.
Although voting with respect to the Preferred Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to Illinois Power Financing I as
soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.
consenting or voting rights to those Direct Participants to whose accounts the
Preferred Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy). Illinois Power and Illinois Power Financing I
believe that the arrangements among DTC, Direct and Indirect Participants, and
Beneficial Owners will enable the Beneficial Owners to exercise rights
equivalent in substance to the rights that can be directly exercised by a holder
of a beneficial interest in Illinois Power Financing I.
Distribution payments on the Preferred Securities will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payments on such
payment date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the account of customers in bearer form or registered in "street name,"
and such payments will be the responsibility of such Participant and not of DTC,
Illinois Power Financing I or Illinois Power, subject to any statutory or
regulatory requirements to the contrary that may be in effect from time to time.
Payment of distributions to DTC is the responsibility of Illinois Power
Financing I, disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Direct and Indirect Participants.
19
<PAGE> 21
Except as provided herein, a Beneficial Owner will not be entitled to
receive physical delivery of Preferred Securities. Accordingly, each Beneficial
Owner must rely on the procedures of DTC to exercise any rights under the
Preferred Securities.
DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving reasonable notice to
Illinois Power Financing I. Under such circumstances, in the event that a
successor securities depositary is not obtained, Preferred Securities
certificates are required to be printed and delivered. Additionally, the Regular
Trustees (with the consent of Illinois Power) may decide to discontinue use of
the system of book-entry transfers through DTC (or any successor depositary)
with respect to the Preferred Securities. In that event, certificates for the
Preferred Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Illinois Power and Illinois Power Financing
I believe to be reliable, but neither Illinois Power nor Illinois Power
Financing I takes responsibility for the accuracy thereof.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a default with respect to
the Trust Securities, undertakes to perform only such duties as are specifically
set forth in the Declaration and, after default, shall exercise the same degree
of care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provisions, the Property Trustee is under no obligation
to exercise any of the powers vested in it by the Declaration at the request of
any holder of Preferred Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The holders of Preferred Securities will not be required to offer such
indemnity in the event such holders, by exercising their voting rights, direct
the Property Trustee to take any action following a Declaration Event of
Default.
PAYING AGENT
In the event that the Preferred Securities do not remain in book-entry only
form, the following provisions would apply:
The Property Trustee will act as paying agent and may designate an
additional or substitute paying agent at any time.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of Illinois Power Financing I, but upon payment (with the
giving of such indemnity as the Regular Trustees may require) in respect of any
tax or other governmental charges that may be imposed in relation to it.
Illinois Power Financing I will not be required to register or cause to be
registered the transfer of Preferred Securities after such Preferred Securities
have been called for redemption.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate Illinois Power
Financing I in such a way so that Illinois Power Financing I will not be
required to register as an "investment company" under the 1940 Act or
characterized as other than a grantor trust for United States federal income tax
purposes and so that each holder of Preferred Securities will be treated as
owning an undivided beneficial interest in the Subordinated Debentures. Illinois
Power is authorized and directed to conduct its affairs so that the Subordinated
Debentures will be treated as indebtedness of Illinois Power for United States
federal income tax purposes. In this connection, Illinois Power and the Regular
Trustees are authorized to take any action, not inconsistent with applicable
law, the certificate of trust of Illinois Power Financing I or the certificate
of
20
<PAGE> 22
incorporation of Illinois Power, that each of Illinois Power and the Regular
Trustees determine in their discretion to be necessary or desirable to achieve
such end, as long as such action does not materially adversely affect the
interests of the holders of the Preferred Securities or vary the terms thereof.
Holders of the Preferred Securities have no preemptive rights.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Guarantee that
will be executed and delivered by Illinois Power for the benefit of the holders
from time to time of the Preferred Securities. The Guarantee will be qualified
as an indenture under the Trust Indenture Act. Wilmington Trust Company will act
as the Guarantee Trustee. The terms of the Guarantee will be those set forth
therein and those made part thereof by the Trust Indenture Act. The following
summary does not purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by reference to, the Guarantee,
which is filed as an exhibit to the Registration Statement of which this
Prospectus forms a part and the Trust Indenture Act. The Guarantee will be held
by the Guarantee Trustee for the benefit of the holders of the Preferred
Securities.
GENERAL
Pursuant to the Guarantee, Illinois Power will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full to the
holders of the Preferred Securities the Guarantee Payments (as defined herein)
(without duplication of amounts theretofore paid by Illinois Power Financing I),
to the extent not paid by Illinois Power Financing I, regardless of any defense,
right of set-off or counterclaim that Illinois Power Financing I may have or
assert. The following payments or distributions with respect to the Preferred
Securities to the extent not paid or made by Illinois Power Financing I (the
"Guarantee Payments") will be subject to the Guarantee (without duplication):
(i) any accrued and unpaid distributions that are required to be paid on the
Preferred Securities, to the extent Illinois Power Financing I has funds
available therefor, (ii) the Redemption Price, including all accrued and unpaid
distributions to the date of the redemption, to the extent Illinois Power
Financing I has funds available therefore, with respect to any Preferred
Securities called for redemption by Illinois Power Financing I and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of Illinois
Power Financing I (other than in connection with the distribution of
Subordinated Debentures to the holders of Preferred Securities in exchange for
Preferred Securities), the lesser of (a) the aggregate of the liquidation amount
and all accrued and unpaid distributions on the Preferred Securities to the date
of payment, to the extent Illinois Power Financing I has funds available
therefor, and (b) the amount of assets of Illinois Power Financing I remaining
available for distribution to holders of Preferred Securities in liquidation of
Illinois Power Financing I. Illinois Power's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by Illinois
Power to the holders of Preferred Securities or by causing Illinois Power
Financing I to pay such amounts to such holders.
The Guarantee will be a full and unconditional guarantee of the Guarantee
Payments with respect to the Preferred Securities from the time of issuance of
the Preferred Securities, but will not apply to the payment of distributions and
other payments on the Preferred Securities when the Property Trustee does not
have sufficient funds in the Property Account to make such distributions or
other payments. If Illinois Power does not make interest payments on the
Subordinated Debentures held by the Property Trustee, Illinois Power Financing I
will not make distributions on the Preferred Securities issued by Illinois Power
Financing I and will not have funds available therefor. See "Description of the
Subordinated Debentures -- Certain Covenants."
Illinois Power will also agree separately to irrevocably and
unconditionally guarantee the obligations of Illinois Power Financing I with
respect to the Common Securities (the "Common Securities Guarantee") to the same
extent as the Guarantee, except that upon the occurrence and during the
continuation of an Indenture Event of Default, holders of Preferred Securities
shall have priority over holders of Common Securities with respect to
distributions and payments on liquidation, redemption or otherwise.
21
<PAGE> 23
CERTAIN COVENANTS OF ILLINOIS POWER
In the Guarantee, Illinois Power will covenant that, so long as the
Preferred Securities remain outstanding, if there shall have occurred and is
continuing any event that would constitute an event of default under the
Guarantee or the Declaration, then (a) Illinois Power shall not declare or pay
any dividend on, or make any distribution with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock,
provided, however, Illinois Power may declare and pay a stock dividend where the
dividend stock is the same stock as that on which the dividend is being paid,
(b) Illinois Power shall not make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities (including
guarantees) issued by Illinois Power which rank pari passu with or junior to the
Subordinated Debentures, and (c) Illinois Power shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Guarantee).
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of Preferred Securities (in which case no vote will be
required), the Guarantee may be amended only with the prior approval of the
holders of not less than 66 2/3% in liquidation amount of the outstanding
Preferred Securities. The manner of obtaining any such approval of holders of
the Preferred Securities is set forth under "Description of the Preferred
Securities -- Voting Rights." All guarantees and agreements contained in the
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of Illinois Power and shall inure to the benefit of the
Guarantee Trustee and the holders of the Preferred Securities then outstanding.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect as to
the Preferred Securities upon full payment of the Redemption Price of all
Preferred Securities, or upon distribution of the Subordinated Debentures to the
holders of the Preferred Securities, and will terminate completely upon full
payment of the amounts payable upon liquidation of Illinois Power Financing I.
See "Description of the Subordinated Debentures -- Indenture Events of Default"
for a description of the events of default and enforcement rights of the holders
of Subordinated Debentures. The Guarantee will continue to be effective or will
be reinstated, as the case may be, if at any time any holder of Preferred
Securities must repay to Illinois Power Financing I or Illinois Power, or their
successors, any sums paid to them under such Preferred Securities or the
Guarantee.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of
Illinois Power to perform any of its payment or other obligations thereunder.
The holders of a majority in liquidation amount of the Preferred Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee in respect of the Guarantee or
to direct the exercise of any trust or power conferred upon the Guarantee
Trustee under the Guarantee. If the Guarantee Trustee fails to enforce the
Guarantee, any holder of Preferred Securities may institute a legal proceeding
directly against Illinois Power to enforce the Guarantee Trustee's rights under
the Guarantee, without first instituting a legal proceeding against Illinois
Power Financing I, the Guarantee Trustee or any other person or entity.
STATUS OF THE GUARANTEE
Illinois Power's obligations under the Guarantee to make the Guarantee
Payments will constitute an unsecured obligation of Illinois Power and will rank
(i) subordinate and junior in right of payment to all other liabilities of
Illinois Power, including the Subordinated Debentures, except those liabilities
of Illinois Power made pari passu or subordinate by their terms, (ii) pari passu
with the most senior preferred stock now or hereafter issued by Illinois Power
and with any guarantee now or hereafter entered into by Illinois Power in
respect of any preferred stock of any affiliate of Illinois Power, and (iii)
senior to Illinois Power's common
22
<PAGE> 24
stock. The terms of the Preferred Securities provide that each holder of
Preferred Securities by acceptance thereof agrees to the subordination
provisions and other terms of the Guarantee.
The Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly against
the guarantor to enforce its rights under the guarantee without instituting a
legal proceeding against any other person or entity). The Guarantee will be
deposited with the Guarantee Trustee to be held for the benefit of the holders
of the Preferred Securities. Except as otherwise noted herein, the Guarantee
Trustee has the right to enforce the Guarantee on behalf of the holders of the
Preferred Securities. The Guarantee will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by Illinois Power Financing I).
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
the Guarantee and after the curing of all such defaults that may have occurred,
undertakes to perform only such duties as are specifically set forth in the
Guarantee and, after default, shall exercise the same degree of care as a
prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provisions, the Guarantee Trustee is under no obligation to
exercise any of the powers vested in it by the Guarantee at the request of any
holder of Preferred Securities, unless offered reasonable indemnity against the
costs, expenses and liabilities which might be incurred thereby; but the
foregoing shall not relieve the Guarantee Trustee, upon the occurrence of an
event of default under the Guarantee from exercising the rights and powers
vested in it by the Guarantee. The Guarantee Trustee also serves as Property
Trustee and Indenture Trustee.
GOVERNING LAW
The Guarantee will be governed by, and construed in accordance with, the
internal laws of the State of Illinois.
DESCRIPTION OF THE SUBORDINATED DEBENTURES
Set forth below is a description of the terms of the Subordinated
Debentures in which Illinois Power Financing I will invest the proceeds from the
issuance and sale of the Trust Securities. The following description does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, the Indenture, dated as of , 1995, (the "Base
Indenture") between Illinois Power and Wilmington Trust Company, as Trustee (the
"Indenture Trustee"), as supplemented by a First Supplemental Indenture, dated
as of , 1995 (the Base Indenture, as so supplemented, is hereinafter
referred to as the "Indenture"), the forms of which are filed as Exhibits to the
Registration Statement of which this Prospectus forms a part. The terms of the
Subordinated Debentures will include those stated in the Indenture and those
made a part of the Indenture by reference to the Trust Indenture Act. Certain
capitalized terms used herein are defined in the Indenture.
Under certain circumstances involving the termination of Illinois Power
Financing I following the occurrence of a Special Event, Subordinated Debentures
may be distributed to the holders of the Trust Securities. See "Description of
the Preferred Securities -- Special Event Redemption or Distribution."
If the Subordinated Debentures are distributed to the holders of the
Preferred Securities, Illinois Power will use its best efforts to have the
Subordinated Debentures listed on the New York Stock Exchange or on such other
national securities exchange or similar organization on which the Preferred
Securities are then listed or quoted.
GENERAL
The Subordinated Debentures will be issued as unsecured subordinated debt
under the Indenture. The Subordinated Debentures will be limited in aggregate
principal amount to approximately $103,100,000, such amount being the sum of the
aggregate stated liquidation amount of the Preferred Securities and the
contributions made by Illinois Power in exchange for the Common Securities (the
"Illinois Power Payment").
23
<PAGE> 25
The Amended and Restated Articles of Incorporation of Illinois Power limit
the amount of unsecured indebtedness that Illinois Power may issue or assume,
without the consent of the holders of a majority of the total number of shares
of preferred stock then outstanding, to 20% of the aggregate of the total
principal amount of all outstanding bonds or other securities representing
secured indebtedness of Illinois Power and the capital and surplus of Illinois
Power as then stated on Illinois Power's books. At September 30, 1995, Illinois
Power could have issued approximately $308 million of unsecured indebtedness
(such as the Subordinated Debentures) without violating this provision.
The Subordinated Debentures are not subject to a sinking fund provision.
The entire principal amount of the Subordinated Debentures will mature and
become due and payable, together with any accrued and unpaid interest thereon
including Compound Interest (as defined herein) and Additional Interest (as
defined herein), if any, on , 2044.
If Subordinated Debentures are distributed to holders of Preferred
Securities in liquidation of such holders' interests in Illinois Power Financing
I, such Subordinated Debentures will initially be issued as a Global Security
(as defined herein). As described herein, under certain limited circumstances,
Subordinated Debentures may be issued in certificated form in exchange for a
Global Security. See "-- Book-Entry and Settlement" below. In the event that
Subordinated Debentures are issued in certificated form, such Subordinated
Debentures will be in denominations of $25 and integral multiples thereof and
may be transferred or exchanged at the offices described below. Payments on
Subordinated Debentures issued as a Global Security will be made to DTC, a
successor depositary or, in the event that no depositary is used, to a Paying
Agent for the Subordinated Debentures. In the event Subordinated Debentures are
issued in certificated form, principal and interest will be payable, the
transfer of the Subordinated Debentures will be registrable and Subordinated
Debentures will be exchangeable for Subordinated Debentures of other
denominations of a like aggregate principal amount at the corporate trust office
of the Indenture Trustee in Wilmington, Delaware; provided, that payment of
interest may be made at the option of Illinois Power by check mailed to the
address of the persons entitled thereto.
The Indenture does not contain provisions that afford holders of the
Subordinated Debentures protection in the event of a highly leveraged
transaction involving Illinois Power.
SUBORDINATION
The Indenture provides that the Subordinated Debentures are subordinated
and junior in right of payment to all Senior Indebtedness of Illinois Power,
whether now existing or hereafter incurred. No payment of principal (including
redemption payments, if any), premium, if any, or interest on, the Subordinated
Debentures may be made if (i) any Senior Indebtedness of Illinois Power is not
paid when due, and any applicable grace period with respect to such default has
ended and such default has not been cured or waived or ceased to exist, or (ii)
the maturity of any Senior Indebtedness of Illinois Power has been accelerated
because of a default. Upon any distribution of assets of Illinois Power to
creditors upon any dissolution, winding-up, liquidation or reorganization,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or
other proceedings, all principal, premium, if any, and interest due or to become
due on all Senior Indebtedness of Illinois Power must be paid in full before the
holders of Subordinated Debentures are entitled to receive or retain any
payment. Upon satisfaction of all claims of all Senior Indebtedness then
outstanding, the rights of the holders of the Subordinated Debentures will be
subrogated to the rights of the holders of Senior Indebtedness of Illinois Power
to receive payments or distributions applicable to Senior Indebtedness until all
amounts owing on the Subordinated Debentures are paid in full.
The term "Senior Indebtedness" means, with respect to Illinois Power, (i)
the principal, premium, if any, interest on and any other payment in respect of
(A) indebtedness of Illinois Power for money borrowed and (B) indebtedness
evidenced by securities, debentures, bonds or other similar instruments issued
by Illinois Power, including, without limitation, indebtedness evidenced by
securities issued pursuant to its Mortgage and Deed of Trust dated November 1,
1943, as supplemented, and its General Mortgage Indenture and Deed of Trust
dated as of November 1, 1992, (ii) all capital lease obligations of Illinois
Power, (iii) all obligations of Illinois Power issued or assumed as the deferred
purchase price of property, all conditional sale obligations of
24
<PAGE> 26
Illinois Power and all obligations of Illinois Power under any title retention
agreement (but excluding trade accounts payable arising in the ordinary course
of business), (iv) all obligations of Illinois Power for the reimbursement on
any letter of credit, banker's acceptance, security purchase facility or similar
credit transaction, (v) all obligations of the type referred to in clauses (i)
through (iv) above of other persons for the payment of which Illinois Power is
responsible or liable as obligor, guarantor or otherwise and (vi) all
obligations of the type referred to in clauses (i) through (v) above of other
persons secured by any lien on any property or asset of Illinois Power (whether
or not such obligation is assumed by Illinois Power), except for (1) any such
indebtedness that is by its terms subordinated to or pari passu with the
Subordinated Debentures and (2) any indebtedness between or among Illinois Power
or its affiliates, including all other debt securities and guarantees in respect
of those debt securities, issued to any other trust, or a trustee of such trust,
partnership or other entity affiliated with Illinois Power that is a financing
vehicle of Illinois Power (a "financing entity") in connection with the issuance
by such financing entity of Preferred Securities or other securities that rank
pari passu with, or junior to, the Preferred Securities. Such Senior
Indebtedness shall continue to be Senior Indebtedness and be entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness. In October 1994,
Illinois Power issued $100 million of Series A Subordinated Debentures to
Illinois Power Capital, L.P., a financing entity which issued cumulative monthly
income preferred securities that rank pari passu with the Preferred Securities.
The Indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued by Illinois Power. As of September 30, 1995, Senior
Indebtedness of Illinois Power aggregated approximately $2.2 billion.
CERTAIN COVENANTS
If (i) there shall have occurred any event that would constitute an
Indenture Event of Default or (ii) Illinois Power shall be in default with
respect to its payment of any obligations under the Guarantee or the Common
Securities Guarantee, then (a) Illinois Power shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase or make
a liquidation payment with respect to, any of its capital stock, provided,
however, Illinois Power may declare and pay a stock dividend where the dividend
stock is the same stock as that on which the dividend is being paid, (b)
Illinois Power shall not make any payment of interest, principal or premium, if
any on or repay, repurchase or redeem any debt securities issued by Illinois
Power which rank pari passu with or junior to the Subordinated Debentures, and
(c) Illinois Power shall not make any guarantee payments with respect to the
foregoing (other than pursuant to the Guarantee).
If Illinois Power shall have given notice of its election of an Extension
Period as provided in the Indenture and such period, or any extension thereof,
shall be continuing, then (a) Illinois Power shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase or make
a liquidation payment with respect to, any of its capital stock, provided,
however, Illinois Power may declare and pay a stock dividend where the dividend
stock is the same stock as that on which the dividend is being paid, (b)
Illinois Power shall not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities (including
guarantees) issued by Illinois Power which rank pari passu with or junior to the
Subordinated Debentures, and (c) Illinois Power shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Guarantee).
For so long as the Trust Securities remain outstanding, Illinois Power will
covenant (i) to directly or indirectly maintain 100% direct or indirect
ownership of the Common Securities of the Trust; provided, however, that any
permitted successor of Illinois Power under the Indenture may succeed to
Illinois Power's ownership of such Common Securities, (ii) not to cause, as
sponsor of Illinois Power Financing I, or to permit, as holder of the Common
Securities, the dissolution, winding-up or termination of Illinois Power
Financing I, except in connection with a distribution of the Subordinated
Debentures as provided in the Declaration and in connection with certain
mergers, consolidations or amalgamation and (iii) to use its reasonable efforts
to cause Illinois Power Financing I (a) to remain a statutory business trust,
except in connection with the distribution of Subordinated Debentures to the
holders of Trust Securities in termination of Illinois Power Financing I, the
redemption of all of the Trust Securities of Illinois Power Financing I, or
certain mergers,
25
<PAGE> 27
consolidations or amalgamations, each as permitted by the Declaration, and (b)
to otherwise continue to be classified as a grantor trust for United States
federal income purposes with each holder of Preferred Securities being treated
as owning an undivided beneficial interest in the Subordinated Debentures.
OPTIONAL REDEMPTION
Illinois Power shall have the right to redeem the Subordinated Debentures,
in whole or in part, from time to time, on or after , 2000, or at
any time in certain circumstances upon the occurrence of a Special Event as
described under "Description of the Preferred Securities -- Special Event
Redemption or Distribution," upon not less than 30 nor more than 60 days notice,
at a redemption price equal to 100% of the principal amount to be redeemed plus
any accrued and unpaid interest, including Additional Interest, if any, to the
redemption date. If a partial redemption of the Preferred Securities resulting
from a partial redemption of the Subordinated Debentures would result in the
delisting of the Preferred Securities by such exchange on which the Preferred
Securities are then listed, Illinois Power may only redeem the Subordinated
Debentures in whole.
INTEREST
Each Subordinated Debenture shall bear interest at the rate of % per
annum from the original date of issuance, payable quarterly in arrears on March
31, June 30, September 30, and December 31 of each year (each an "Interest
Payment Date"), commencing December 31, 1995, to the person in whose name such
Subordinated Debenture is registered, subject to certain exceptions, at the
close of business on the Business Day next preceding such Interest Payment Date.
In the event the Subordinated Debentures shall not continue to remain in
book-entry only form, Illinois Power shall have the right to select record
dates, which shall be more than one Business Day prior to the Interest Payment
Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full quarterly period for which interest is computed,
will be computed on the basis of the actual number of days elapsed per 30-day
month. In the event that any date on which interest is payable on the
Subordinated Debentures is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, then
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Illinois Power shall have the right at any time, and from time to time,
during the term of the Subordinated Debentures to defer payments of interest by
extending the interest payment period for a period not exceeding 20 consecutive
quarters, at the end of which Extension Period, Illinois Power shall pay all
interest then accrued and unpaid (including any Additional Interest) together
with interest thereon compounded quarterly at the rate specified for the
Subordinated Debentures to the extent permitted by applicable law ("Compound
Interest"); provided, that during any such Extension Period, (a) Illinois Power
shall not declare or pay dividends on, make any distribution with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to any of
its capital stock, provided, however, Illinois Power may declare and pay a stock
dividend where the dividend stock is the same stock as that on which the
dividend is being paid, (b) Illinois Power shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by Illinois Power that rank pari passu with or junior to
the Subordinated Debentures, and (c) Illinois Power shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Guarantee).
Prior to the termination of any such Extension Period, Illinois Power may
further defer payments of interest by extending the interest payment period;
provided, however, that, such Extension Period, including all such previous and
further extensions, may not exceed 20 consecutive quarters or extend beyond the
maturity of the Subordinated Debentures. Upon the termination of any Extension
Period and the payment of all amounts then due, Illinois Power may commence a
new Extension Period, subject to the terms set forth in this section. No
interest during an Extension Period, except
26
<PAGE> 28
at the end thereof, shall be due and payable. Illinois Power has no present
intention of exercising its right to defer payments of interest by extending the
interest payment period on the Subordinated Debentures. If the Property Trustee
shall be the sole holder of the Subordinated Debentures, Illinois Power shall
give the Regular Trustees and the Property Trustee notice of its election of
such Extension Period one Business Day prior to the earlier of (i) the date
distributions on the Preferred Securities are payable or (ii) the date the
Regular Trustees are required to give notice to the New York Stock Exchange (or
other applicable self-regulatory organization) or to holders of the Preferred
Securities of the record date or the date such distribution is payable. The
Regular Trustees shall give notice of Illinois Power's selection of such
Extension Period to the holders of the Preferred Securities. If the Property
Trustee shall not be the sole holder of the Subordinated Debentures, Illinois
Power shall give the holders of the Subordinated Debentures notice of its
election of such Extension Period ten Business Days prior to the earlier of (i)
the Interest Payment Date or (ii) the date upon which Illinois Power is required
to give notice to the New York Stock Exchange (or other applicable self-
regulatory organization) or to holders of the Subordinated Debentures of the
record or payment date of such related interest payment.
ADDITIONAL INTEREST
If at any time Illinois Power Financing I or the Property Trustee shall be
required to pay any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States, or
any other taxing authority, then, in any such case, Illinois Power will pay as
additional interest ("Additional Interest") such additional amounts as shall be
required so that the net amounts received and retained by Illinois Power
Financing I after paying any such taxes, duties, assessments or other
governmental charges will be not less than the amounts Illinois Power Financing
I and the Property Trustee would have received had no such taxes, duties,
assessments or other governmental charges been imposed.
INDENTURE EVENTS OF DEFAULT
In case any Indenture Event of Default shall occur and be continuing, the
Property Trustee, as the holder of the Subordinated Debentures, will have the
right to declare the principal of and the interest on the Subordinated
Debentures (including any Compound Interest and Additional Interest, if any) and
any other amounts payable under the Indenture to be forthwith due and payable
and to enforce its other rights as a creditor with respect to the Subordinated
Debentures.
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Event of Default"
with respect to the Subordinated Debentures:
(a) failure for 30 days to pay interest on the Subordinated
Debentures, including any Additional Interest in respect thereof, when due;
provided, however, that a valid extension of the interest payment period by
Illinois Power shall not constitute a default in the payment of interest
for this purpose; or
(b) failure to pay principal or premium, if any, on the Subordinated
Debentures when due whether at maturity, upon earlier redemption or
otherwise; or
(c) failure to observe or perform any other covenant or agreement
(other than those specifically relating to another series of subordinated
debt securities) contained in the Indenture or established pursuant thereto
for 90 days after written notice to Illinois Power from the Indenture
Trustee or the holders of at least 25% in principal amount of the
outstanding Subordinated Debentures; or
(d) certain events of bankruptcy, insolvency or reorganization of
Illinois Power; or
(e) the voluntary or involuntary dissolution, winding-up or
termination of Illinois Power Financing I, except in connection with the
distribution of Subordinated Debentures to the holders of Preferred
Securities in liquidation of Illinois Power Financing I, the redemption of
all outstanding Trust Securities of Illinois Power Financing I and certain
mergers, consolidations or amalgamations permitted by the Declaration.
27
<PAGE> 29
The holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Indenture Trustee. The
Indenture Trustee or the holders of not less than 25% in aggregate outstanding
principal amount of the Subordinated Debentures may declare the principal due
and payable immediately on default, but the holders of a majority in aggregate
outstanding principal amount may annul such declaration and waive the default if
the default has been cured and a sum sufficient to pay all matured installments
of interest and principal due otherwise than by acceleration and any applicable
premium has been deposited with the Indenture Trustee.
The holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures affected thereby may, on behalf of the holders of all
the Subordinated Debentures, waive any past default, except (i) a default in the
payment of principal, premium, if any, or interest (unless such default has been
cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration and any applicable premium has been
deposited with the Indenture Trustee) or (ii) a default in the covenant of
Illinois Power not to declare or pay dividends on, or make distributions with
respect to, or redeem, purchase or acquire any of its capital stock during an
Extension Period. An Indenture Event of Default also constitutes a Declaration
Event of Default. The holders of Preferred Securities in certain circumstances
have the right to direct the Property Trustee to exercise its rights as the
holder of the Subordinated Debentures. See "Description of the Preferred
Securities -- Declaration Events of Default" and "-- Voting Rights."
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Preferred Securities in connection with the
involuntary or voluntary dissolution, winding-up or liquidation of Illinois
Power Financing I as a result of the occurrence of a Special Event, the
Subordinated Debentures will be issued in the form of one or more global
certificates (each a "Global Security") registered in the name of the Depositary
or its nominee. Except under the limited circumstances described below,
Subordinated Debentures represented by the Global Security will not be
exchangeable for, and will not otherwise be issuable as, Subordinated Debentures
in definitive form. The Global Securities described above may not be transferred
except by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or to a
successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in such a Global
Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Subordinated
Debentures in definitive form and will not be considered the holders (as defined
in the Indenture) thereof for any purpose under the Indenture, and no Global
Security representing Subordinated Debentures shall be exchangeable, except for
another Global Security of like denomination and tenor to be registered in the
name of the Depositary or its nominee or to a successor Depositary or its
nominee. Accordingly, each Beneficial Owner must rely on the procedures of the
Depositary or if such person is not a Participant, on the procedures of the
Participant through which such person owns its interest to exercise any rights
of a holder under the Indenture.
THE DEPOSITARY
If Subordinated Debentures are distributed to holders of Preferred
Securities in liquidation of such holders' interests in Illinois Power Financing
I, DTC will act as securities depositary (the "Depositary") for the Subordinated
Debentures. For a description of DTC and the specific terms of the depositary
arrangements, see "Description of the Preferred Securities -- Book-Entry Only
Issuance -- The Depository Trust Company." As of the date of this Prospectus,
the description therein of DTC's book-entry system and DTC's practices as they
relate to purchases, transfers, notices and payments with respect to the
Preferred Securities apply in all material respects to any debt obligations
represented by one or more Global Securities held by
28
<PAGE> 30
DTC. Illinois Power may appoint a successor to DTC or any successor depositary
in the event DTC or such successor depositary is unable or unwilling to continue
as a depositary for the Global Securities.
None of Illinois Power, Illinois Power Financing I, the Indenture Trustee,
any paying agent and any other agent of Illinois Power or the Indenture Trustee
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in a Global
Security for such Subordinated Debentures or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Subordinated Debentures
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies Illinois Power that it is unwilling or unable to
continue as a depositary for such Global Security and no successor depositary
shall have been appointed, (ii) the Depositary, at any time, ceases to be a
clearing agency registered under the Exchange Act at which time the Depositary
is required to be so registered to act as such depositary and no successor
depositary shall have been appointed or (iii) Illinois Power, in its sole
discretion, determines that such Global Security shall be so exchangeable. Any
Global Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Subordinated Debentures registered in such names as the
Depositary shall direct. It is expected that such instructions will be based
upon directions received by the Depositary from its Participants with respect to
ownership of beneficial interests in such Global Security.
In the event the Subordinated Debentures are not represented by one or more
Global Securities, certificates evidencing Subordinated Debentures may be
presented for registration of transfer (with the form of transfer endorsed
thereon duly executed) or exchange, at the office of the Security Registrar or
at the office of any transfer agent designated by Illinois Power for such
purpose with respect to the Subordinate Debentures without service charge and
upon payment of any taxes and other governmental charges as described in the
Indenture. Such transfer or exchange will be effected upon the Security
Registrar or such transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. Illinois Power
has appointed the Indenture Trustee as Security Registrar with respect to the
Subordinated Debentures. Illinois Power may at any time rescind the designation
of any such transfer agent or approve a change in the location through which any
such transfer agent acts, except that Illinois Power will be required to
maintain a transfer agent at the place of payment. Illinois Power may at any
time designate additional transfer agents with respect to the Subordinated
Debentures.
In the event of any redemption in part, Illinois Power shall not be
required to (i) issue, exchange or register the transfer of Subordinated
Debentures during a period beginning at the opening of business 15 days before
the date of the mailing of a notice of redemption of less than all of the
Subordinated Debentures and ending at the close of business on the date of such
mailing and (ii) register the transfer of or exchange any Subordinated
Debentures so selected for redemption, in whole or in part, except the
unredeemed portion of any Subordinated Debentures being redeemed in part.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting Illinois Power and the
Indenture Trustee, with the consent of the holders of at least 66 2/3% in
principal amount of the Subordinated Debentures, to modify the Indenture or any
supplemental indenture affecting that series or the rights of the holders of the
Subordinated Debentures; provided that no such modification may, without the
consent of the holder of each outstanding Subordinated Debentures affected
thereby, (i) extend the fixed maturity of the Subordinated Debentures, or reduce
the principal amount thereof, or reduce the rate or extend the time of payment
of interest thereon, or reduce any premium payable upon the redemption thereof,
without the consent of the holder of the Subordinated Debentures so affected or
(ii) reduce the percentage of Subordinated Debentures, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of each Subordinated Debenture then outstanding and affected
thereby.
29
<PAGE> 31
In addition, Illinois Power and the Indenture Trustee may execute, without
the consent of holders of the Subordinated Debentures, any supplemental
indenture for certain other usual purposes including the creation of any new
series of subordinated debt securities.
CONSOLIDATION, MERGER AND SALE
The Indenture does not contain any covenant which restricts Illinois
Power's ability to merge or consolidate with or into any other corporation, sell
or convey all or substantially all of its assets to any person, firm or
corporation or otherwise engage in restructuring transactions.
DEFEASANCE AND DISCHARGE
Under the terms of the Indenture, Illinois Power will be discharged from
any and all obligations in respect of the Subordinated Debentures (except in
each case for certain obligations with respect to denominations and provisions
for payment of the Subordinated Debentures and obligations to register the
transfer or exchange of Subordinated Debentures, replace stolen, lost or
mutilated Subordinated Debentures, maintain paying agencies and hold moneys for
payment in trust) if Illinois Power (i) deposits with the Indenture Trustee, in
trust, moneys or governmental obligations, in an amount sufficient to pay all
the principal of, and interest on, the Subordinated Debentures on the dates such
payments are due in accordance with the terms of such Subordinated Debentures
and (ii) delivered to the Indenture Trustee an opinion of counsel to the effect
that, based upon Illinois Power's receipt from, or the publication by, the
Internal Revenue Service of a ruling or a change in law, the holders of the
Subordinated Debentures will not recognize income, gain or loss for United
States federal income tax purposes as a result of the deposit, defeasance and
discharge and will be subject to United States federal income tax on the same
amount and in the same manner and at the same times as would have been the case
if such deposit, defeasance or discharge had not occurred.
GOVERNING LAW
The Indenture and the Subordinated Debentures will be governed by, and
construed in accordance with, the internal laws of the State of New York.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Indenture Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Indenture and, after default, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Indenture
Trustee is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Subordinated Debentures, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby; but the foregoing shall not relieve
the Indenture Trustee, upon the occurrence of an Indenture Event of Default,
from exercising the rights and powers vested in it by the Indenture. The
Indenture Trustee is not required to expand or risk its own funds or otherwise
incur personal financial liability in the performance of its duties if the
Indenture Trustee reasonably believes that repayment or adequate indemnity is
not reasonably assured to it.
MISCELLANEOUS
Illinois Power will have the right at all times to assign any of its rights
or obligations under the Indenture to a direct or indirect wholly-owned
subsidiary of Illinois Power; provided that, in the event of any such
assignment, Illinois Power will remain liable for all of their obligations.
Subject to the foregoing, the Indenture will be binding upon and inure to the
benefit of the parties thereto and their respective successors and assigns. The
Indenture provides that it may not otherwise be assigned by the parties thereto.
The Indenture will provide that Illinois Power will pay all fees and
expenses related to (i) the offering of the Trust Securities and the
Subordinated Debentures, (ii) the organization, maintenance and dissolution of
Illinois Power Financing I, (iii) the taxes of Illinois Power Financing I (other
than United States withholding
30
<PAGE> 32
taxes attributable to Illinois Power Financing I or its assets), (iv) the
retention of the Illinois Power Trustees and (v) the enforcement by the Property
Trustee of the rights of holders of Preferred Securities.
EFFECT OF OBLIGATIONS UNDER THE
SUBORDINATED DEBENTURES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of Illinois Power
Financing I is to issue the Trust Securities evidencing undivided beneficial
interests in the assets of Illinois Power Financing I and to invest the proceeds
from such issuance and sale in the Subordinated Debentures.
As long as payments of interest and other payments are made when due on the
Subordinated Debentures, such payments will be sufficient to cover distributions
and payments due on the Trust Securities because of the following factors: (i)
the aggregate principal amount of Subordinated Debentures will be equal to the
sum of the aggregate liquidation amount of the Trust Securities; (ii) the
interest rate and the interest and other payment dates on the Subordinated
Debentures will match the distribution rate and distribution and other payment
dates for the Preferred Securities; (iii) Illinois Power shall pay all, and
Illinois Power Financing I shall not be obligated to pay, directly or
indirectly, any costs and expenses of Illinois Power Financing I; and (iv) the
Declaration further provides that the Illinois Power Trustees shall not cause or
permit Illinois Power Financing I to, among other things, engage in any activity
that is not consistent with the purposes of Illinois Power Financing I.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Preferred Securities (to the extent funds therefor are
available) are guaranteed by Illinois Power as and to the extent set forth under
"Description of the Preferred Securities Guarantee." If Illinois Power does not
make interest payments on the Subordinated Debentures purchased by Illinois
Power Financing I, Illinois Power Financing I will not have sufficient funds to
pay distributions on the Preferred Securities. The Guarantee is a full and
unconditional guarantee from the time of its issuance but does not apply to any
payment of distributions unless and until Illinois Power Financing I has
sufficient funds for the payment of such distributions.
If Illinois Power fails to make interest or other payments on the
Subordinated Debentures when due (taking into account any Extension Period), the
Declaration provides a mechanism whereby the holders of the Preferred
Securities, using the procedures described in "Description of the Preferred
Securities -- Book-Entry Only Issuance -- The Depository Trust Company" and "--
Voting Rights," may direct the Property Trustee to enforce its rights under the
Subordinated Debentures. If the Property Trustee fails to enforce its rights
under the Subordinated Debentures to the fullest extent permitted by law, a
holder of Preferred Securities may institute a legal proceeding against Illinois
Power to enforce the Property Trustee's rights under the Subordinated Debentures
without first instituting any legal proceeding against the Property Trustee or
any other person or entity.
If Illinois Power fails to make payments under the Guarantee, the Guarantee
provides a mechanism whereby the holders of the Preferred Securities may direct
the Guarantee Trustee to enforce its rights thereunder. If the Guarantee Trustee
fails to enforce the Guarantee, any holder of Preferred Securities may institute
a legal proceeding directly against Illinois Power to enforce the Guarantee
Trustee's rights under the Guarantee without first instituting a legal
proceeding against Illinois Power Financing I, the Guarantee Trustee, or any
other person or entity. Illinois Power, under the Guarantee, acknowledges that
the Guarantee Trustee shall enforce the Guarantee on behalf of the holders of
the Preferred Securities.
The above mechanisms and obligations, taken together, are equivalent to a
full and unconditional guarantee by Illinois Power of payments due on the
Preferred Securities. See "Description of the Preferred Securities Guarantee --
General."
31
<PAGE> 33
UNITED STATES FEDERAL INCOME TAXATION
GENERAL
The following is a summary of certain of the material United States federal
income tax consequences of the purchase, ownership and disposition of Preferred
Securities to a holder that is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized under the laws of
the United States or any state thereof or the District of Columbia, or an estate
or trust the income of which is subject to United States federal income taxation
regardless of its source. Unless otherwise stated, this summary deals only with
Preferred Securities held as capital assets by holders who purchase the
Preferred Securities upon original issuance ("Initial Holders"). It does not
deal with special classes of holders such as banks, thrifts, real estate
investment trusts, regulated investment companies, insurance companies, dealers
in securities or currencies, tax-exempt investors, or persons that will hold the
Preferred Securities as a position in a "straddle," as part of a "synthetic
security" or "hedge," as part of a "conversion transaction" or other integrated
investment, or as other than a capital asset. This summary also does not address
the tax consequences to persons that have a functional currency other than the
U.S. Dollar or the tax consequences to shareholders, partners or beneficiaries
of a holder of Preferred Securities. Further, it does not include any
description of any alternative minimum tax consequences or the tax laws of any
state or local government or of any foreign government that may be applicable to
the Preferred Securities. This summary is based on the Internal Revenue Code of
1986, as amended (the "Code"), Treasury regulations thereunder (the "Treasury
Regulations") and administrative and judicial interpretations thereof, as of the
date hereof, all of which are subject to change, possibly on a retroactive
basis.
CLASSIFICATION OF THE SUBORDINATED DEBENTURES
In connection with the issuance of the Subordinated Debentures, Schiff
Hardin & Waite, counsel to Illinois Power and Illinois Power Financing I, will
render its opinion generally to the effect that, although not entirely free from
doubt, under then current law and assuming full compliance with the terms of the
Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Subordinated Debentures held by
Illinois Power Financing I will be classified for United States federal income
tax purposes as indebtedness of Illinois Power.
CLASSIFICATION OF ILLINOIS POWER FINANCING I
In connection with the issuance of the Preferred Securities, Schiff Hardin
& Waite, counsel to Illinois Power and Illinois Power Financing I, will render
its opinion generally to the effect that, under then current law and assuming
full compliance with the terms of the Declaration and the Indenture (and certain
other documents), and based on certain facts and assumptions contained in such
opinion, Illinois Power Financing I will be classified for United States federal
income tax purposes as a grantor trust and not as an association taxable as a
corporation. Accordingly, for United States federal income tax purposes, each
holder of Preferred Securities generally will be considered the owner of an
undivided interest in the Subordinated Debentures, and each holder will be
required to include in its gross income any OID accrued with respect to its
allocable share of those Subordinated Debentures.
ORIGINAL ISSUE DISCOUNT
Because Illinois Power has the option, under the terms of the Subordinated
Debentures, to defer payments of interest by extending interest payment periods
for up to 20 quarters, all of the stated interest payments on the Subordinated
Debentures will be treated as OID. Holders of debt instruments issued with OID
must include that discount in income on an economic accrual basis before the
receipt of cash attributable to the interest, regardless of their method of tax
accounting. Generally, all of a holder's taxable interest income with respect to
the Subordinated Debentures will be accounted for as OID, and actual
distributions of stated interest will not be separately reported as taxable
income. The amount of OID that accrues in any month will approximately equal the
amount of the interest that accrues on the Subordinated Debentures in that month
at the stated interest rate. In the event that the interest payment period is
extended, holders will continue to
32
<PAGE> 34
accrue OID approximately equal to the amount of the interest payment due at the
end of the Extension Period on an economic accrual basis over the length of the
Extension Period.
In addition, the amount of OID will be increased or decreased if the issue
price of the Subordinated Debentures (offering price of the Preferred Securities
at the time of the issuance) is less than or greater than their stated principal
amount. It is anticipated that the issue price of the Subordinated Debentures
will equal or exceed their stated principal amount. In the event that the issue
price of the Subordinated Debentures is less than their stated principal amount,
however, the Treasury Regulations may be read to require a recalculation of the
amount of OID for each period that Illinois Power does not exercise its right to
extend the interest payment period. This recalculation could result in minor
adjustments to the amount of OID taxable to the Holders for such period.
Because income on the Preferred Securities will constitute OID, corporate
holders of Preferred Securities will not be entitled to a dividends-received
deduction with respect to any income recognized with respect to the Preferred
Securities.
MARKET DISCOUNT AND BOND PREMIUM
Holders of Preferred Securities other than Initial Holders may be
considered to have acquired their undivided interests in the Subordinated
Debentures with market discount or acquisition premium as such phrases are
defined for United States federal income tax purposes. Such holders are advised
to consult their tax advisors as to the income tax consequences of the
acquisition, ownership and disposition of the Preferred Securities.
RECEIPT OF SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF ILLINOIS POWER
FINANCING I
Under certain circumstances, as described under the caption "Description of
the Preferred Securities -- Special Event Redemption or Distribution,"
Subordinated Debentures may be distributed to holders in exchange for the
Preferred Securities and in liquidation of Illinois Power Financing I. Under
current law, such a distribution, for United States federal income tax purposes,
would be treated as a non-taxable event to each holder, and each holder would
receive an aggregate tax basis in the Subordinated Debentures equal to such
holder's aggregate tax basis in its Preferred Securities. A holder's holding
period in the Subordinated Debentures so received in liquidation of Illinois
Power Financing I would include the period during which the Preferred Securities
were held by such holder.
Under certain circumstances described herein (see "Description of the
Preferred Securities -- Special Event Redemption or Distribution"), the
Subordinated Debentures may be redeemed for cash and the proceeds of such
redemption distributed to holders in redemption of their Preferred Securities.
Under current law, such a redemption would, for United States federal income tax
purposes, constitute a taxable disposition of the redeemed Preferred Securities,
and a holder could recognize gain or loss as if it sold such redeemed Preferred
Securities for cash. See "United States Federal Income Taxation -- Sales of
Preferred Securities."
SALES OF PREFERRED SECURITIES
A holder that sells Preferred Securities will recognize gain or loss equal
to the difference between its adjusted tax basis in the Preferred Securities and
the amount realized on the sale of such Preferred Securities. A holder's
adjusted tax basis in the Preferred Securities generally will be its initial
purchase price increased by OID previously includible in such holder's gross
income to the date of disposition and decreased by payments received on the
Preferred Securities. Such gain or loss generally will be a capital gain or loss
and generally will be a long-term capital gain or loss if the Preferred
Securities have been held for more than one year.
The Preferred Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Subordinated Debentures. A holder who disposes of his Preferred Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Subordinated Debentures through the
date of disposition in income as OID, and to add such amount to his adjusted tax
basis in his pro rata share of the underlying Subordinated
33
<PAGE> 35
Debentures deemed disposed of. To the extent the selling price is less than the
holder's adjusted tax basis (which will include, in the form of OID, all accrued
but unpaid interest) a holder will recognize a capital loss. Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for United States federal income tax purposes.
INFORMATION REPORTING TO HOLDERS
Subject to the qualifications discussed below, income on the Preferred
Securities will be reported to holders on Forms 1099, which forms should be
mailed to holders of Preferred Securities by January 31 following each calendar
year.
Illinois Power Financing I will be obligated to report annually to Cede &
Co., as holder of record of the Preferred Securities, the OID related to the
Subordinated Debentures that accrued during the year. Illinois Power Financing I
currently intends to report such information on Form 1099 prior to January 31
following each calendar year even though Illinois Power Financing I is not
legally required to report to record holders until April 15 following each
calendar year. The Underwriters (as defined herein) have indicated to Illinois
Power Financing I that, to the extent that they hold Preferred Securities as
nominees for beneficial holders, they currently expect to report to such
beneficial holders on Forms 1099 by January 31 following each calendar year.
Under current law, holders of Preferred Securities who hold as nominees for
beneficial holders will not have any obligation to report information regarding
the beneficial holders to Illinois Power Financing I. Illinois Power Financing
I, moreover, will not have any obligation to report to beneficial holders who
are not also record holders. Thus, beneficial holders of Preferred Securities
who hold their Preferred Securities through the Underwriters will receive Forms
1099 reflecting the income on their Preferred Securities from such nominee
holders rather than Illinois Power Financing I.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Preferred Securities
may be subject to a "backup" withholding tax of 31% unless the holder complies
with certain identification requirements. Any withheld amounts will be allowed
as a credit against the holder's United States federal income tax, provided the
required information is provided to the Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL
OR OTHER TAX LAWS.
34
<PAGE> 36
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement"), Illinois Power Financing I has agreed to sell to
each of the underwriters named below (the "Underwriters"), and each of the
Underwriters, for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated, Smith
Barney Inc., Dean Witter Reynolds Inc., A.G. Edwards & Sons, Inc. and
PaineWebber Incorporated are acting as representatives (the "Representatives"),
has severally agreed to purchase the number of Preferred Securities set forth
opposite its name below. In the Underwriting Agreement, the several Underwriters
have agreed, subject to the terms and conditions set forth therein, to purchase
all of the Preferred Securities offered hereby if any of the Preferred
Securities are purchased. In the event of default by an Underwriter, the
Underwriting Agreement provides that, in certain circumstances, the purchase
commitments of the nondefaulting Underwriters may be increased or the
Underwriting Agreement may be terminated.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER PREFERRED SECURITIES
----------- --------------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................................
Smith Barney Inc. ..........................................................
Dean Witter Reynolds Inc. ..................................................
A.G. Edwards & Sons, Inc. ..................................................
PaineWebber Incorporated....................................................
--------------
Total.......................................................... 4,000,000
==============
</TABLE>
The Underwriters propose to offer the Preferred Securities in part directly
to the public at the initial public offering price, as set forth on the cover
page of this Prospectus, and in part to certain securities dealers at such price
less a concession of $ per Preferred Security. The Underwriters may allow,
and such dealers may reallow, a concession not in excess of $ per Preferred
Security to certain brokers and dealers. After the Preferred Securities are
released for sale to the public, the offering price and other selling terms may
from time to time be varied by the Representatives.
In view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase the Subordinated Debentures of Illinois
Power, the Underwriting Agreement provides that Illinois Power will agree to pay
as compensation ("Underwriters' Compensation") to the Underwriters for the
Underwriters' arranging the investment therein of such proceeds, an amount in
New York Clearing House (next day) funds of $ per Preferred Security (or
$ in the aggregate) for the accounts of the several Underwriters, provided
that such compensation for sales of 10,000 or more Preferred Securities to any
single purchaser will be $ per Preferred Security. Therefore, to the extent
of such sales, the actual amount of Underwriters' Compensation will be less than
the aggregate amount specified in the preceding sentence.
During a period of 30 days from the date of the pricing of the Preferred
Securities, neither Illinois Power Financing I nor Illinois Power will, without
the prior written consent of the Representatives, directly or indirectly, sell,
offer to sell, contract to sell, grant any option for the sale of, or otherwise
dispose of, any Preferred Securities, any security convertible into or
exchangeable into or exercisable for Preferred Securities or the Subordinated
Debentures or any debt securities substantially similar to the Subordinated
Debentures or any equity securities substantially similar to the Preferred
Securities (except for the Subordinated Debentures and the Preferred Securities
offered hereby).
Application will be made to list the Preferred Securities on the New York
Stock Exchange. If approved, trading of the Preferred Securities on the New York
Stock Exchange is expected to commence within a 30-day period after the initial
delivery of the Preferred Securities. The Representatives have advised Illinois
Power Financing I that the Underwriters intend to make a market in the Preferred
Securities prior to the commencement of trading on the New York Stock Exchange.
The Underwriters will have no obligation to make a market in the Preferred
Securities, however, any may cease market making activities, if commenced, at
any time.
35
<PAGE> 37
Prior to this offering, there has been no public market for the Preferred
Securities. In order to meet one of the requirements for listing the Preferred
Securities on the New York Stock Exchange, the Underwriters will undertake to
sell lots of 100 or more Preferred Securities to a minimum of 400 beneficial
holders.
Illinois Power and Illinois Power Financing I have agreed to indemnify the
Underwriters against, or to contribute to payments that the Underwriters may be
required to make in respect of, certain liabilities, including liabilities under
the Securities Act.
Certain of the Underwriters engage in transactions with, and, from time to
time, have performed services for, Illinois Power in the ordinary course of
business.
LEGAL MATTERS
Certain legal matters will be passed upon for Illinois Power and Illinois
Power Financing I by Schiff Hardin & Waite, Chicago, Illinois, and for the
Underwriters by Reid & Priest LLP, New York, New York. Certain matters of
Delaware law relating to the validity of the Preferred Securities will be passed
upon by Richards, Layton & Finger, P.A., Wilmington, Delaware, special Delaware
counsel to Illinois Power and Illinois Power Financing I. Schiff Hardin & Waite
may rely on the opinion of Reid & Priest LLP as to all matters of New York law,
and Reid & Priest LLP may rely on the opinion of Schiff Hardin & Waite as to all
matters of Illinois law.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
Illinois Power's Annual Report on Form 10-K for the year ended December 31, 1994
have been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
36
<PAGE> 38
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY ILLINOIS POWER COMPANY,
ILLINOIS POWER FINANCING I OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF ILLINOIS POWER
COMPANY OR ILLINOIS POWER FINANCING I, SINCE THE DATE HEREOF. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 3
Incorporation of Certain Documents by
Reference........................... 3
Prospectus Summary.................... 4
Risk Factors.......................... 5
Illinois Power Company................ 8
Illinois Power Financing I............ 8
Summary Financial Information of
Illinois Power...................... 10
Accounting Treatment.................. 11
Use of Proceeds....................... 11
Description of the Preferred
Securities.......................... 11
Description of the Preferred
Securities Guarantee................ 21
Description of the Subordinated
Debentures.......................... 23
Effect of Obligations Under the
Subordinated Debentures and the
Guarantee........................... 31
United States Federal Income
Taxation............................ 32
Underwriting.......................... 35
Legal Matters......................... 36
Experts............................... 36
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
4,000,000
PREFERRED SECURITIES
ILLINOIS POWER
FINANCING I
% TRUST ORIGINATED
PREFERRED SECURITIES(SM) ("TOPRS(SM)")
GUARANTEED TO THE EXTENT SET
FORTH HEREIN BY
ILLINOIS POWER COMPANY
------------------------
PROSPECTUS
------------------------
MERRILL LYNCH & CO.
SMITH BARNEY INC.
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
, 1995
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 39
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................ $ 34,483*
New York Stock Exchange listing fees............................... 45,000
Printing expenses.................................................. 75,000
Legal fees and expenses............................................ 115,000
Independent accountant's fees and expenses......................... 15,000
Blue Sky and legal investment fees and expenses.................... 15,000
Rating agencies fees and expenses.................................. 50,000
Trustee fees and expenses.......................................... 35,000
Miscellaneous...................................................... 15,517
--------
Total......................................................... $400,000
========
</TABLE>
- -------------------------
* Actual. All other expenses are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 8.75 of the Illinois Business Corporation Act of 1983, the
Company is empowered, subject to the procedures and limitations stated therein,
to indemnify any person against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with any threatened, pending or completed action, suit or
proceeding to which such person is made a party or threatened to be made a party
by reason of such person being or having been a director, officer, employee or
agent of the Company, or serving or having served at the request of the Company
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise. Section 8.75 further provides that
indemnification pursuant to its provisions is not exclusive of other rights of
indemnification to which a person may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors, or otherwise, and that such
indemnification shall continue as to a director, officer, employee or agent of
the Company who has ceased to serve in such capacity, and shall inure to the
benefit of the heirs, executors and administrators of such a person.
The Company's By-Laws provide, in substance, that the Company shall
indemnify any person against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, to which
such person is made a party or threatened to be made a party by reason of such
person being or having been a director, officer, employee or agent of the
Company, or serving or having served at the request of the Company in one or
more of the foregoing capacities with another corporation, partnership, joint
venture, trust or other enterprise. The indemnification is not exclusive of
other rights and shall continue as to a person who has ceased to be a director,
officer, employer or agent and shall inure to the benefit of his heirs,
executors and administrators.
The Amended and Restated Declaration of Trust (the "Declaration") provides
that no Trustee, affiliate of any Regular Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee, or any employee or agent of the Trust or its affiliates (each,
an "Indemnified Person") shall be liable, responsible or accountable in damages
or otherwise to the Trust or any employee or agent of the Trust or its
affiliates for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by the
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omission. The Declaration
II-1
<PAGE> 40
also provides that, to the fullest extent permitted by applicable law, the
Company shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by reason
of any act or omission performed or omitted by such Indemnified Person in good
faith on behalf of the Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of authority conferred on such Indemnified
Person by the Declaration, except that no Indemnified Person shall be entitled
to be indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of gross negligence (or, in the case of the
Property Trustee, negligence) or willful misconduct with respect to such acts or
omissions. The Declaration further provides that, to the fullest extent
permitted by applicable law, expenses (including legal fees) incurred by an
Indemnified Person in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by the Company prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt by or
an undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified for the underlying cause of action as authorized by the Declaration.
The foregoing rights of indemnification shall apply to any liability of any
director, officer or other Indemnified Person (or his legal representatives)
arising under any of the provisions of the Securities Act, only to the extent
that such rights of indemnification may be determined to be valid by a court of
competent jurisdiction.
The directors and officers of the Company and the Regular Trustees of the
Trust are covered by insurance policies indemnifying against certain
liabilities, including certain liabilities arising under the Securities Act,
which might be incurred by them in such capacities and against which they cannot
be indemnified by the Company or the Trust.
Any agents, dealers or underwriters who execute any of the agreements filed
as Exhibit 1 to this registration statement will agree to indemnify the
Company's directors and their officers and the Regular Trustees of the Trust
against certain liabilities that may arise under the Securities Act with respect
to information furnished to the Company or the Trust by or on behalf of any such
indemnifying party.
ITEM 16. LIST OF EXHIBITS.
The exhibits to this Registration Statement are listed in the Exhibit Index
elsewhere herein.
ITEM 17. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(1) that for purposes of determining any liability under the
Securities Act, each filing of the Company's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof;
(2) that for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed
as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrants pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective; and
(3) that for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The undersigned Trust registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement certificates
in such denominations and registered in such names as required by the
Underwriters to permit prompt delivery to each purchaser.
II-2
<PAGE> 41
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions referred to in Item 15 above, or
otherwise, the registrants have been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrants of expenses incurred or paid by a director, officer or controlling
person of the registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrants will, unless in
the opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.
II-3
<PAGE> 42
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Illinois Power
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Decatur, and State of Illinois on the 19th day of
October, 1995.
ILLINOIS POWER COMPANY
(Registrant)
By: /s/ LARRY D. HAAB
------------------------------------
Larry D. Haab
Chairman, President and
Chief Executive Officer
<PAGE> 43
Pursuant to the requirements of the Securities Act of 1933, Illinois Power
Financing I certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Decatur, and State of Illinois on the 19th day of
October, 1995.
ILLINOIS POWER FINANCING I
(Registrant)
By: Illinois Power Company, as
Sponsor
By: /s/ LARRY D. HAAB
------------------------------------
Larry D. Haab
Chairman, President and
Chief Executive Officer
<PAGE> 44
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Illinois Power Company, Illinois Power
Financing I and each of the undersigned officers and directors of Illinois Power
Company hereby constitute and appoint each of Larry D. Haab, Larry F.
Altenbaumer and Cynthia G. Steward the true and lawful attorney-in-fact and
agent of the undersigned, with full power of substitution and resubstitution for
and in the name, place and stead of the undersigned, in any and all capacities,
to sign all or any amendments (including post-effective amendments) of and
supplements to this Registration Statement on Form S-3 and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto each such attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, to all intents and
purposes and as fully as said corporation itself and each said officer or
director might or could do in person, hereby ratifying and confirming all that
each such attorney-in-fact and agent, or his substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on behalf of each of Illinois Power
Company and Illinois Power Financing I by the following persons in their
capacities as officers or directors, as indicated below, of Illinois Power
Company and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------- ----------------------------------- -------------------
<C> <S> <C>
/s/ LARRY D. HAAB Chairman, President, Chief
- ------------------------------------- Executive
Larry D. Haab Officer and Director
(Principal Executive Officer)
/s/ LARRY F. ALTENBAUMER Senior Vice President, Chief
- ------------------------------------- Financial Officer and Treasurer
Larry F. Altenbaumer
(Principal Financial Officer)
/s/ CYNTHIA G. STEWARD Controller and Chief October 19, 1995
- ------------------------------------- Accounting Officer
Cynthia G. Steward
(Controller)
/s/ RICHARD R. BERRY Director
- -------------------------------------
Richard R. Berry
/s/ DONALD E. LASATER Director
- -------------------------------------
Donald E. Lasater
Director
- -------------------------------------
Donald S. Perkins
</TABLE>
<PAGE> 45
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------- -------------------------------------- ----------------
<C> <S> <C>
/s/ ROBERT M. POWERS Director
- -------------------------------------
Robert M. Powers
/s/ WALTER D. SCOTT Director
- -------------------------------------
Walter D. Scott
/s/ RONALD L. THOMPSON Director
- -------------------------------------
Ronald L. Thompson
/s/ WALTER M. VANNOY Director October 19, 1995
- -------------------------------------
Walter M. Vannoy
Director
- -------------------------------------
Marilou von Ferstel
/s/ CHARLES W. WELLS Director
- -------------------------------------
Charles W. Wells
/s/ JOHN D. ZEGLIS Director
- -------------------------------------
John D. Zeglis
/s/ VERNON K. ZIMMERMAN Director
- -------------------------------------
Vernon K. Zimmerman
</TABLE>
<PAGE> 46
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION PAGE
- -------- ------------------------------------------------------------------------------ -----
<S> <C>
1 Form of Underwriting Agreement.*
4(a) Certificate of Trust of Illinois Power Financing I.
4(b) Declaration of Trust of Illinois Power Financing I.
4(c) Form of Amended and Restated Declaration of Trust of Illinois Power Financing
I.
4(d) Form of Indenture between Illinois Power Company and Wilmington Trust Company,
as Trustee.
4(e) Form of Supplemental Indenture to Indenture to be used in connection with the
issuance of Subordinated Debentures and Preferred Securities.
4(f) Form of Preferred Security Certificate (contained in the Form of Amended and
Restated Declaration of Trust of Illinois Power Financing I filed as Exhibit
4(c) to this Registration Statement).
4(g) Form of Subordinated Debenture (contained in the Form of Supplemental
Indenture filed as Exhibit 4(e) to this Registration Statement).
4(h) Form of Guarantee Agreement with respect to the Preferred Securities.
5(a) Opinion of Schiff Hardin & Waite.
5(b) Opinion of Richards, Layton & Finger, P.A.
8 Tax opinion of Schiff Hardin & Waite (contained in its opinion filed as
Exhibit 5(a) to this Registration Statement).
12 Statements of Computations of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Stock Dividend Requirements.
23(a) Consent of Schiff Hardin & Waite (contained in its opinion filed as Exhibit
5(a) to this Registration Statement).
23(b) Consent of Richards, Layton & Finger, P.A. (contained in its opinion filed as
Exhibit 5(b) to this Registration Statement).
23(c) Consent of Price Waterhouse LLP.
24 Powers of Attorney (set forth on the signature page of this Registration
Statement).
25(a) Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
Wilmington Trust Company, as Trustee under the Indenture.
25(b) Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
Wilmington Trust Company, as Trustee under the Amended and Restated
Declaration of Trust of Illinois Power Financing I.
25(c) Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
Wilmington Trust Company, as Preferred Securities Guarantee Trustee under the
Guarantee Agreement with respect to the Preferred Securities.
</TABLE>
- -------------------------
* To be filed by amendment.
<PAGE> 1
EXHIBIT 4(A)
CERTIFICATE OF TRUST
THIS CERTIFICATE OF TRUST of Illinois Power Financing I (the "Trust"), dated
as of October 17, 1995, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. Section 3801, et seq.).
1. NAME: The name of the business trust being formed hereby is "Illinois
Power Financing I."
2. DELAWARE TRUSTEE: The name and business address of the trustee of the
Trust which has its principal place of business in the State of Delaware are as
follows:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
3. EFFECTIVE DATE: This Certificate of Trust shall be effective as of the
date of filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust, have
executed this Certificate of Trust as of the date first above written.
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee
/s/ Emmett R. Harmon
-----------------------------
EMMETT R. HARMON,
Vice President
/s/ Larry F. Altenbaumer
-----------------------------
LARRY F. ALTENBAUMER,
not in his individual capacity
but solely as Trustee
/s/ Daniel L. Mortland
------------------------------
DANIEL L. MORTLAND,
not in his individual capacity
but solely as Trustee
<PAGE> 1
EXHIBIT 4(B)
DECLARATION OF TRUST
OF
ILLINOIS POWER FINANCING I
DECLARATION OF TRUST, dated as of October 17, 1995 (this "Declaration
of Trust"), by and among Illinois Power Company, an Illinois corporation, as
Sponsor, and Larry F. Altenbaumer, Daniel L. Mortland and Wilmington Trust
Company, a Delaware banking corporation, not in their individual capacities but
solely as trustees of the Trust, as defined below (collectively, the
"Trustees"). The Sponsor and the Trustees hereby agree as follows:
1. The trust created hereby shall be known as "Illinois Power
Financing I" (the "Trust"), in which name the Trustees, or the Sponsor to the
extent provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over to
the Trustees the sum of $10. The Trustees hereby acknowledge receipt of such
amount in trust from the Sponsor, which amount shall constitute the initial
trust estate. The Trustees hereby declare that they will hold the trust estate
in trust for the benefit of the Sponsor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under Chapter
38 of Title 12 of the Delaware Code, 12 Del. C. Section 3801 et seq., as it
may be amended from time to time, or any successor legislation (the "Business
Trust Act"), and that this document constitute the governing instrument of the
Trust. The Trustees are hereby authorized and directed to execute and file a
certificate of trust with the Delaware Secretary of State in the form attached
hereto.
3. The Sponsor and the Trustees will enter into an amended and
restated Declaration of Trust, satisfactory to each such party and
substantially in the form included as an exhibit to the 1933 Act Registration
Statement (as defined below), to provide for the contemplated operation of the
Trust created hereby and the issuance of the Preferred Securities and Common
Securities referred to therein. Prior to the execution and delivery of such
amended and restated Declaration of Trust, the Trustees shall not have any duty
or obligation hereunder or with respect of the trust estate, except as
otherwise required by applicable law or as may be necessary to obtain prior to
such execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.
4. The Sponsor and the Trustees hereby authorize and direct the
Sponsor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust (a) a Registration Statement on Form S-3 (the "1933 Act Registration
Statement"), including all pre-effective and post-effective amendments thereto,
relating to the registration of the Preferred Securities of the Trust under the
Securities Act of 1933, as amended, and (b) a Registration Statement on Form
8-A (the "1934 Act Registration Statement"), including all pre-effective and
post-effective amendments thereto, relating to the registration of the
Preferred Securities of the Trust under Section 12(b) of the Securities
Exchange Act of 1934, as amended; (ii) to file with the New York Stock Exchange
and execute on behalf of the Trust a listing application and all other
applications, statements, certificates, agreements and other instruments as
shall be necessary or desirable to cause the Preferred Securities to be listed
on the New York Stock Exchange; (iii) to file and execute on behalf of the
Trust such applications, reports, surety bonds, irrevocable consents,
appointments of attorney for service of process and other papers and documents
as shall be necessary or desirable to register the Preferred Securities under
the securities of "Blue Sky" laws of such jurisdictions as the Sponsor, on
behalf of the Trust, may deem necessary or desirable; and (iv) to execute on
behalf of the Trust that certain Underwriting Agreement among the Trust, the
Sponsor and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
representative of the Underwriters named in such Underwriting Agreement,
substantially in the form included
<PAGE> 2
as an exhibit to the 1933 Act Registration Statement. In the event that any
filing referred to in clauses (i)-(iii) above is required by the rules and
regulations of the Commission, the New York Stock Exchange or state securities
or blue sky laws, to be executed on behalf of the Trust by the Trustees, Larry
F. Altenbaumer and Daniel L. Mortland, in their capacities as Trustees of the
Trust, are hereby authorized and directed to join in any such filing and to
execute on behalf of the Trust any and all of the foregoing, it being
understood that Wilmington Trust Company, in its capacity as Trustee of the
Trust, shall not be required to join in any such filing or execute on behalf of
the Trust any such document unless required by the rules and regulations of the
Commission, the New York Stock Exchange or state securities or blue sky laws.
In connection with all of the foregoing, the Sponsor and each Trustee other
than Wilmington Trust Company, solely in his capacity as Trustee of the Trust,
hereby constitutes and appoints Larry F. Altenbaumer, as his true and lawful
attorney-in-fact, and agent, with full power of substitution and
resubstitution, for the Sponsor or such Trustee or in the Sponsor's or such
Trustee's name, place and stead, in any and all capacities, to sign any and all
amendments, including post-effective amendments, to the 1933 Act Registration
Statement and the 1934 Act Registration Statement, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as the Sponsor or such Trustee might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or his
substitute or substitutes, shall do or cause to be done by virtue hereof.
5. This Declaration of Trust may be executed in one or
more counterparts.
6. The number of Trustees initially shall be three (3)
and thereafter the number of Trustees shall be such number as shall be fixed
from time to time by a written instrument signed by the Sponsor which may
increase or decrease the number of Trustees; provided, however, that the number
of Trustees shall in no event be less than three (3); and provided, further
that to the extent required by the Business Trust Act, one Trustee shall either
be a natural person who is a resident of the State of Delaware or, if not a
natural person, an entity which has its principal place of business in the
State of Delaware. Subject to the foregoing, the Sponsor is entitled to
appoint or remove without cause any Trustee at any time. The Trustees may
resign upon thirty (30) days prior notice to the Sponsor.
7. Notwithstanding any other provision of this
Declaration of Trust, Wilmington Trust Company, in its capacity as Trustee of
the Trust, shall not be entitled to exercise any of the powers, nor shall
Wilmington Trust Company, in its capacity as Trustee of the Trust, have any
duties and responsibilities of the other Trustees described in this
Declaration of Trust. Wilmington Trust Company, in its capacity as
Trustee of the Trust, shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.
8. No Trustee, any affiliate of any Trustee or any
officers, directors, shareholders, members, partners, employees,
representatives or agents of any Trustee or any employee or agent of the Trust
or its affiliates (each, an "Indemnified Person" and collectively, the
"Indemnified Persons"), shall be liable, responsible or accountable, in damages
or otherwise, to the Trust or any other Indemnified Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration of Trust or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such acts or omissions.
-2-
<PAGE> 3
9. To the fullest extent permitted by applicable law,
the Sponsor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by reason
of any act or omission performed or omitted by such Indemnified Person in good
faith on behalf of the Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Declaration of Trust, except that no Indemnified Person shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
such Indemnified Person by reason of gross negligence or willful misconduct
with respect to such acts or omissions.
10. To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Sponsor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Sponsor of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 9.
11. Wilmington Trust Company may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust, the
Sponsor and the other Trustees shall have no rights by virtue of this
Declaration of Trust in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. Wilmington Trust Company shall not be obligated to present any
particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken
by the Trust, and Wilmington Trust Company shall have the right to take for
its own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment or other opportunity. Wilmington Trust
Company may engage or be interested in any financial or other transactions with
the Sponsor or any affiliate of the Sponsor, or may act on any committe or
body of holders of securities or other obligations of the Sponsor or its
affiliates.
12. This Declaration of Trust shall be governed by, and construed
in accordance with, the laws of the State of Delaware (without regard to
conflict of laws principles).
-3-
<PAGE> 4
IN WITNESS WHEREOF, the parities hereto have caused this
Declaration of Trust to be duly executed as of the day and year first above
written.
ILLINOIS POWER COMPANY,
as Sponsor
By: /s/ Larry F. Altenbaumer
-----------------------------
LARRY F. ALTENBAUMER,
Vice President
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By: /s/ Emmett R. Harmon
-----------------------------
EMMETT R. HARMON,
Vice President
/s/ Larry F. Altenbaumer
-----------------------------
LARRY F. ALTENBAUMER,
not in his individual capacity
but solely as Trustee
/s/ Daniel L. Mortland
-----------------------------
DANIEL L. MORTLAND,
not in his individual capacity
but solely as Trustee
<PAGE> 1
EXHIBIT 4(C)
====================================
AMENDED AND RESTATED DECLARATION
OF TRUST
ILLINOIS POWER FINANCING I
DATED AS OF ___________, 1995
====================================
<PAGE> 2
TABLE OF CONTENTS*
ARTICLE I
INTERPRETATION AND DEFINITIONS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.3 Reports by the Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.4 Periodic Reports to Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . . . . . 7
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III
ORGANIZATION
SECTION 3.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.3 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.4 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.5 Title to Property of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.6 Powers and Duties of the Regular Trustees . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees . . . . . . . . . . . . . . . . . 12
SECTION 3.8 Powers and Duties of the Property Trustee . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee . . . . . . . . . . . . . 14
SECTION 3.10 Certain Rights of the Property Trustee . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.11 Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.12 Execution of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . 18
SECTION 3.14 Duration of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.15 Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.2 Responsibilities of the Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.2 Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.3 Property Trustee; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
__________________________________
* This Table of Contents does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally . . . . . . . . . . . . . . . . . . 21
SECTION 5.5 Initial Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.6 Appointment, Removal and Resignation of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.7 Vacancies among Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.8 Effect of Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.9 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.10 Delegation of Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 9.2 Transfer of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 9.3 Deemed Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 9.4 Book Entry Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 9.5 Notices to Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 9.6 Appointment of Successor Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 9.7 Definitive Preferred Security Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 10.2 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 10.3 Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 10.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 11.2 Certain Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 11.3 Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 11.4 Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
- ii -
<PAGE> 4
ARTICLE XII
AMENDMENTS AND MEETINGS
<TABLE>
<S> <C> <C>
SECTION 12.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent . . . . . . . . . . . . . . . . . . . 34
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee and Delaware Trustee . . . . . . . . . . . . . . . . 35
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 14.2 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 14.3 Intention of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 14.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 14.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 14.6 Partial Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 14.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
</TABLE>
- iii -
<PAGE> 5
ANNEX AND EXHIBITS
<TABLE>
<S> <C> <C>
ANNEX I TERMS OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-1
EXHIBIT B SPECIMEN OF DEBENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C UNDERWRITING AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
</TABLE>
- iv -
<PAGE> 6
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
310(a) . . . . . . . . . . . . . . . . . . . . . . 5.3(a)
310(c) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(c) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(f) . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . . . . . 3.9(b)
315(c) . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
315(d) . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
316(a) . . . . . . . . . . . . . . . . . . . . . . Annex I
316(c) . . . . . . . . . . . . . . . . . . . . . . 3.6(e)
- ---------------
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
- v -
<PAGE> 7
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
ILLINOIS POWER FINANCING I
THIS AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration")
dated and effective as of ___________, 1995, by and among Illinois Power
Company, an Illinois corporation, as Sponsor, and Larry F. Altenbaumer, Daniel
L. Mortland and Wilmington Trust Company, a Delaware banking corporation, not
in their individual capacities, but solely as trustees of the Trust, as defined
below (collectively, the "Trustees"), and the holders, from time to time, of
undivided beneficial interests in the Trust to be issued pursuant to this
Declaration.
WHEREAS, the Trustees and the Sponsor established Illinois Power
Financing I (the "Trust"), a trust under the Business Trust Act pursuant to a
Declaration of Trust dated as of October ___, 1995 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on October ___, 1995, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original
Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act, and that
this Declaration constitute the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration" are
to this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections
and Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
<PAGE> 8
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" means ______________, 1995.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities Guarantee" means the guarantee agreement to be
dated as of ___________________, 1995 of the Sponsor in respect of the Common
Securities.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Illinois Power Company in its capacity as
issuer of the Debentures under the Indenture.
- 2 -
<PAGE> 9
"Debenture Trustee" means Wilmington Trust Company, not in its
individual capacity but solely as trustee under the Indenture until a successor
is appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Property Trustee, a
specimen certificate for such series of Debentures being Exhibit B.
"Definitive Preferred Security Certificates" has the meaning set
forth in Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Direction" by a Person means a written direction signed: (a) if
the Person is a natural person, by that Person; or (b) in any other case, in
the name of such Person by one or more Authorized Officers of that Person.
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means (a) any Trustee; (b) any Affiliate of
any Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any officer,
employee or agent of the Trust or its Affiliates.
"Indenture" means the Indenture dated as of ____________, 1995,
between the Debenture Issuer and the Debenture Trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I
hereto.
- 3 -
<PAGE> 10
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except
as provided in the terms of the Preferred Securities or by the Trust Indenture
Act, Holder(s) of outstanding Securities voting together as a single class or,
as the context may require, Holders of outstanding Preferred Securities or
Holders of outstanding Common Securities voting separately as a class, who are
the record owners of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the
relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(i).
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement to
be dated as of ________________, 1995, of the Sponsor in respect of the
Preferred Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing
a Preferred Security substantially in the form of Exhibit A-1.
- 4 -
<PAGE> 11
"Pricing Agreement" means the pricing agreement among the Trust,
the Debenture Issuer, and the underwriters designated by the Regular Trustees
with respect to the offer and sale of the Preferred Securities.
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section
3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Regular Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee,
the chairman of the board of directors, the president, any vice-president, any
assistant vice-president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, any trust officer or assistance trust
officer or other officer of the Property Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Securities Guarantee" means each of the Common Securities
Guarantee and the Preferred Securities Guarantee.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means Illinois Power Company, an Illinois corporation,
or any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"Successor Property Trustee" means a successor Trustee possessing
the qualifications to act as Property Trustee under Section 5.3(a).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as
the context may require, Holders of outstanding Preferred Securities or Holders
- 5 -
<PAGE> 12
of outstanding Common Securities voting separately as a class, who are the
record owners of 10% or more of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for
the offering and sale of Preferred Securities in the form of Exhibit C.
SECTION 1.2 Interpretation.
Each definition in this Declaration includes the singular and
the plural, and references to the neuter gender include the masculine and
feminine, where appropriate. Terms which relate to accounting matters shall be
interpreted in accordance with generally accepted accounting principles in
effect from time to time. References to any statute mean such statute, as
amended at the time, and include any successor legislation. The word "or" is
not exclusive, and the words "herein," "hereof," and "hereunder" refer to this
Declaration as a whole. References to Articles, Sections, Annexes, Exhibits
and Schedules mean the Articles, Sections, Annexes, Exhibits and Schedules of
this Declaration.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the
Trust Indenture Act that are required to be part of this Declaration and shall,
to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by Section
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
- 6 -
<PAGE> 13
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees, on behalf
of the Trust, shall provide the Property Trustee (i) within fourteen (14) days
after each record date for payment of Distributions, a list, in such form as
the Property Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders") as of such record date, provided
that neither the Sponsor nor the Regular Trustees, on behalf of the Trust,
shall be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
Property Trustee by the Sponsor and the Regular Trustees on behalf of the
Trust, and (ii) at any other time, within thirty (30) days of receipt by the
Trust of a written request from the Property Trustee for a List of Holders as
of a date no more than fourteen (14) days before such List of Holders is given
to the Property Trustee. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in Lists of
Holders given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity); provided that the Property Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within sixty (60) days after May 15 of each year, the Property
Trustee shall provide to the Holders of the Preferred Securities such reports
as are required by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture Act. The
Property Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees, on behalf of the
Trust, shall provide to the Property Trustee such documents, reports and
information as required by Section 314 (if any) and the compliance certificate
required by Section 314 of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees, on behalf of the
Trust, shall provide to the Property Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Declaration that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of
Preferred Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default in respect of the
Preferred Securities and its consequences, provided that, if the underlying
Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
- 7 -
<PAGE> 14
(ii) requires the consent or vote of greater than a majority
in principal amount of the holders of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default
under the Declaration may only be waived by the vote of the
Holders of at least the proportion in liquidation amount of the
Preferred Securities that the relevant Super Majority represents
of the aggregate principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the
Preferred Securities or impair any right consequent thereon. Any waiver by
the Holders of the Preferred Securities of an Event of Default with respect to
the Preferred Securities shall also be deemed to constitute a waiver by the
Holders of the Common Securities of any such Event of Default with respect to
the Common Securities for all purposes of this Declaration without any further
act, vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration shall
also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are
deemed to have waived such Event of Default under the Declaration
as provided below in this Section 2.6(b), the Event of Default
under the Declaration may only be waived by the vote of the
Holders of at least the proportion in liquidation amount of the
Common Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding;
provided that, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. The foregoing provisions of this Section 2.6(b) shall be in
lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act,
and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act. Subject to the foregoing provisions of
this Section 2.6(b), upon such waiver, any such default shall cease to exist,
and any Event of Default with respect to the Common Securities arising
therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Event of Default under the Indenture by
the Property Trustee at the direction of the Holders of the Preferred
Securities constitutes a waiver of the corresponding
- 8 -
<PAGE> 15
Event of Default under this Declaration. The foregoing provisions of this
Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture
Act, and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby
expressly excluded from this Declaration and the Securities, as permitted by
the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within ninety (90) days after
the occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all defaults with respect
to the Securities known to the Property Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults" for the purposes of
this Section 2.7(a) being hereby defined to be an Event of Default as defined
in the Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided that,
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Debentures or in the payment of any sinking fund
installment established for the Debentures, the Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Sections 6.01(a)(1) and 6.01(a)(2) of the
Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice or of which a Responsible Officer of the
Property Trustee charged with the administration of the
Declaration shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Illinois Power Financing I," as such name
may be modified from time to time by the Regular Trustees following written
notice to the Holders of Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o
Illinois Power Company, 500 South 27th Street, Decatur, IL 62525. On ten (10)
Business Days' prior written notice to the Holders of Securities, the Regular
Trustees may designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, convenient or incidental thereto. The Trust shall
not borrow money, issue debt or reinvest proceeds derived from investments,
pledge any of its assets, or otherwise undertake (or permit to be undertaken)
any activity that would cause the Trust
- 9 -
<PAGE> 16
not to be classified for United States federal income tax purposes as a grantor
trust or cause each Holder of Securities not to be treated as owning an
undivided beneficial interest in the Debentures at any time the Securities are
outstanding.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee, on behalf of the Trust, in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with a Trustee
or the Trustees acting on behalf of the Trust, no Person shall be required to
inquire into the authority of such Trustee or Trustees to bind the Trust.
Persons dealing with the Trust are entitled to rely conclusively on the power
and authority of a Trustee or the Trustees as set forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the
Property Trustee and shall be administered by the Property Trustee for the
benefit of the Holders in accordance with this Declaration. The Holders shall
not have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no more
than one series of Common Securities, and, provided further, that there shall
be no interests in the Trust other than the Securities, and the issuance of the
Securities shall be limited to a one-time, simultaneous issuance of both the
Preferred Securities and the Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to, among other securities, the
Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in
order to qualify or register all or part of the Preferred
Securities in any State in which the Sponsor has determined to
qualify or register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing upon notice of issuance of any Preferred Securities;
- 10 -
<PAGE> 17
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared
by the Sponsor, relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement and
Pricing Agreement providing for the sale of the Preferred
Securities;
(c) to acquire the Debentures with the proceeds of the sale
of the Preferred Securities and the Common Securities; provided, however, that
the Regular Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders of
the Preferred Securities and the Holders of the Common Securities;
(d) to give the Debenture Issuer, the Sponsor and the
Property Trustee prompt written notice of the occurrence of a Special Event;
provided that the Regular Trustees shall consult with the Sponsor and the
Property Trustee before taking or refraining from taking any Ministerial Action
in relation to a Special Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including and
with respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be
required of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(f), the Property Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of
the Trust Indenture Act to the Property Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar
and transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Debenture Issuer of its election to
defer payments of interest on the Debentures by extending the interest payment
period under the Indenture;
- 11 -
<PAGE> 18
(n) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust;
(o) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the laws
of the State of Delaware and of each other jurisdiction in which such existence
is necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust
was created;
(p) to take any action, not inconsistent with this
Declaration or with applicable law, that the Regular Trustees determine in
their discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company
Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust and causing each
Holder of Securities not to be treated as owning an undivided
beneficial interest in the Debentures; and
(iii) cooperating with the Debenture Issuer to ensure that
the Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes, provided
that such action does not materially adversely affect the
interests of Holders; and
(q) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Regular Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust
set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have
none of the powers or the authority of the Property Trustee set forth in
Section 3.8.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the
Property Trustee) shall not, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Property Trustee) shall not cause the Trust to:
(i) invest any proceeds received by the Trust from holding
the Debentures, but shall distribute all such proceeds to Holders
of Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than
loans represented by the Debentures;
- 12 -
<PAGE> 19
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this Declaration or Annex I,
(A) direct the time, method and place of exercising any trust or
power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any
declaration that the principal of all the Debentures shall be due
and payable, or (D) consent to any amendment, modification or
termination of the Indenture or the Debentures where such consent
shall be required unless the Trust shall have received an opinion
of counsel to the effect that such modification will not cause
more than an insubstantial risk that for United States federal
income tax purposes the Trust will not be classified as a grantor
trust and that each Holder of Securities will not be treated as
owning an undivided beneficial interest in the Debentures.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 5.6.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and
under the exclusive control of the Property Trustee on behalf of
the Holders of the Securities and, upon the receipt of payments of
funds made in respect of the Debentures held by the Property
Trustee, deposit such funds into the Property Trustee Account and
make payments to the Holders of the Preferred Securities and
Holders of the Common Securities from the Property Trustee Account
in accordance with Section 6.1. Funds in the Property Trustee
Account shall be held uninvested until disbursed in accordance
with this Declaration. The Property Trustee Account shall be an
account that is maintained with a banking institution the rating
on whose long-term unsecured indebtedness is at least equal to the
rating assigned to the Preferred Securities by a "nationally
recognized statistical rating organization", as that term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the Debentures
are redeemed or mature; and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as shall be necessary or
- 13 -
<PAGE> 20
appropriate to effect the distribution of the Debentures to
Holders of Securities upon the occurrence of Special Events.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant to
the terms of the Securities.
(e) The Property Trustee shall hold the Preferred Securities
Guarantee and the Common Securities Guarantee for the benefit of the Holders of
the Preferred Securities and the Common Securities, respectively.
(f) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default or the Property
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act.
(g) The Property Trustee shall not resign as a Trustee unless
either:
(i) The Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Securities
pursuant to the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(h) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Debentures
under the Indenture and, if an Event of Default occurs and is continuing, the
Property Trustee shall, for the benefit of Holders of the Securities, enforce
its rights as holder of the Debentures subject to the rights of the Holders
pursuant to the terms of such Securities and the Securities Guarantees.
(i) The Property Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions, redemption payments or
liquidation payments, on behalf of the Trust, with respect to all Securities,
and any such Paying Agent shall comply with Section 317(b) of the Trust
Indenture Act. Any Paying Agent may be removed by the Property Trustee at any
time and a successor Paying Agent or additional Paying Agents may be appointed
at any time by the Property Trustee.
(j) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Property Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust
set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration and in the terms of the Securities and no implied
covenants shall be read into this Declaration against the Property Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6), the Property Trustee shall exercise such of the
rights and powers vested in it by this Declaration, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
- 14 -
<PAGE> 21
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions of this
Declaration and in the terms of the Securities, and the
Property Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Declaration, and no implied covenants or
obligations shall be read into this Declaration against the
Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Property Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property Trustee,
the Property Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements
of this Declaration;
(ii) the Property Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the Property
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under
the terms of this Declaration or indemnity reasonably satisfactory
to the Property Trustee against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures
and the Property Trustee Account shall be to deal with such
property in a similar manner as the Property Trustee deals with
similar property for its own account, subject to the protections
and limitations on liability afforded to the Property Trustee
under this Declaration, the Trust Indenture Act and Rule 3a-7;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise
agree with the Sponsor. Money held by the Property Trustee
- 15 -
<PAGE> 22
need not be segregated from other funds held by it except in
relation to the Property Trustee Account maintained by the
Property Trustee pursuant to Section 3.8(c)(i) and except to the
extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor
with their respective duties under this Declaration, nor shall the
Property Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of the Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed
by it to be genuine and to have been signed, sent or presented by
the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be sufficiently
evidenced by a Direction or an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its
part and, if the Trust is excluded from the definition of
Investment Company solely by means of Rule 3a-7, subject to the
requirements of Rule 3a-7, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request, shall
be promptly delivered by the Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration
thereof;
(v) the Property Trustee may consult with counsel or other
experts and the written advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope
of such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion; such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include
any of its employees. The Property Trustee shall have the right
at any time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder, unless such
Holder shall have provided to the Property Trustee security and
indemnity which would satisfy a reasonable person in the position
of the Property Trustee, against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Property Trustee; provided, that, nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Declaration;
- 16 -
<PAGE> 23
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Property Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents, custodians, nominees or attorneys; and
the Property Trustee shall not be responsible for any misconduct
or negligence on the part of any agent, custodian, nominee or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities,
and the signature of the Property Trustee or its agents alone
shall be sufficient and effective to perform any such action and
no third party shall be required to inquire as to the authority of
the Property Trustee to so act or as to its compliance with any of
the terms and provisions of this Declaration, both of which shall
be conclusively evidenced by the Property Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Property Trustee (i) may request
instructions from the Holders of the Securities which instructions
may only be given by the Holders of the same proportion in
liquidation amount of the Securities as would be entitled to
direct the Property Trustee under the terms of the Securities in
respect of such remedy, right or action, (ii) may refrain from
enforcing such remedy or right or taking such other action until
such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such
instructions; and
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any
obligation to take any action that is discretionary under the
provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to
impose any duty or obligation on the Property Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on
it, in any jurisdiction in which it shall be illegal, or in which the Property
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Property Trustee described in
this Declaration. Except as set forth in Section 5.2, the Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, a majority of or, if
there are only two, any Regular Trustee or,
- 17 -
<PAGE> 24
if there is only one, such Regular Trustee is authorized to execute, on behalf
of the Trust, any documents that the Regular Trustees have the power and
authority to execute pursuant to Section 3.6; provided that, notwithstanding
any other provision of this Declaration to the contrary, the documents referred
to in Section 4.2, including any amendments thereto, may be signed by the
Sponsor on behalf of the Trust.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall terminate on December 31, 2050.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, except as described in Section
3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees
or, if there are more than two, a majority of the Regular Trustees; and without
the consent of the Holders of the Securities, the Delaware Trustee or the
Property Trustee, consolidate, amalgamate, merge with or into, or be replaced
by a trust organized as such under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities
having substantially the same terms as the Preferred
Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Preferred Securities
rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of
the Successor Entity that possesses the same powers and duties as
the Property Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities
are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or
with any other organization on which the Preferred Securities are
then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement
does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized
statistical rating organization;
- 18 -
<PAGE> 25
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges
of the Holders of the Securities (including any Successor
Securities) in any material respect (other than with respect to
any dilution of such Holders' interests in the Preferred
Securities as a result of such merger, consolidation, amalgamation
or replacement);
(vi) such Successor Entity has a purpose identical to that of
the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such
matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the new
entity);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will
be required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue
to be classified as a grantor trust for United States federal
income tax purposes and that each Holder of Securities will be
treated as owning an undivided beneficial interest in the
Debentures; and
(viii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at least to the
extent provided by the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes, and each
Holder of Securities not to be treated as owning an undivided beneficial
interest in the Debentures.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all of the
Common Securities issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
- 19 -
<PAGE> 26
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to, among other securities, the
Preferred Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred Securities
and to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for execution
and filing any documents to be executed and filed by the Trust, as the Sponsor
deems necessary or advisable in order to comply with the applicable laws of any
such States;
(c) to prepare for filing by the Trust an application to the
New York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement and
Pricing Agreement providing for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be three (3), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees;
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities;
provided that, in any case, the number of Trustees shall be at least five (5)
unless the Trustee that acts as the Property Trustee also acts as the Delaware
Trustee pursuant to Section 5.2, in which case the number of Trustees shall be
at least three (3); and if there are only three (3) Trustees, the Trustee that
acts as the Property Trustee, shall also act as the Delaware Trustee pursuant
to Section 5.2.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its
principal place of business in the State of Delaware, and otherwise meets the
requirements of applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee, and Section 3.11
shall have no application.
- 20 -
<PAGE> 27
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act
as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or other
Person permitted by the Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws
to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such
corporation or other Person publishes reports of condition at
least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then for the
purposes of this Section 5.3(a)(ii), the combined capital and
surplus of such corporation or other Person shall be deemed to be
its combined capital and surplus as set forth in its most recent
report of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by means of Rule 3a-7 and to the extent
Rule 3a-7 requires a trustee having certain qualifications to hold
title to the "eligible assets" of the Trust, the Property Trustee
shall possess those qualifications.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Common Securities (as
if it were the obligor referred to in Section 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of Section 310(b) of the
Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Initial Trustees.
The initial Regular Trustees shall be:
LARRY F. ALTENBAUMER
500 South 27th Street
Decatur, IL 62525
- 21 -
<PAGE> 28
DANIEL L. MORTLAND
500 South 27th Street
Decatur, IL 62525
The initial Delaware Trustee shall be:
WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
which shall also act as the initial Property Trustee.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in liquidation amount of the Common
Securities; voting as a class at a meeting of the Holders of the
Common Securities.
(b)(i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.6(a) until a Successor
Property Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor
Property Trustee and delivered to the Regular Trustees and the
Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with this Section 5.6(a) until a successor
Trustee possessing the qualifications to act as Delaware Trustee
under Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has
been appointed and has accepted such appointment by written
instrument executed by such Successor Delaware Trustee and
delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed
and has accepted such appointment by instrument executed by
such Successor Property Trustee and delivered to the Trust and
the Sponsor; or
(B) if the Trust is deemed not to be an Investment
Company solely by reason of Rule 3a-7, until the assets of the
Trust have been completely liquidated and the proceeds thereof
distributed to the holders of the Securities; and
- 22 -
<PAGE> 29
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment by
instrument executed by such Successor Delaware Trustee and
delivered to the Trust, the Sponsor and the resigning Delaware
Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor Property
Trustee as the case may be if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within sixty (60) days after delivery to the Sponsor and the Trust
of an instrument of resignation, the resigning Property Trustee or Delaware
Trustee, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Property Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Property Trustee or Successor Delaware Trustee, as
the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees or,
if there are more than two, a majority of the Regular Trustees, shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the
appointment of a Regular Trustee in accordance with Section 5.6, the Regular
Trustees in office, regardless of their number, shall have all the powers
granted to the Regular Trustees and shall discharge all the duties imposed upon
the Regular Trustees by this Declaration.
SECTION 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Notice of any in-person
meetings of the Regular Trustees shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 48 hours before such meeting. Notice of any telephonic meetings of
the Regular Trustees or any committee thereof shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Regular Trustee
at a meeting shall constitute a waiver of notice of such meeting except where a
Regular Trustee attends a meeting for the express purpose of objecting to the
- 23 -
<PAGE> 30
transaction of any activity on the ground that the meeting has not been
lawfully called or convened. Unless provided otherwise in this Declaration,
any action of the Regular Trustees may be taken at a meeting by vote of a
majority of the Regular Trustees present (whether in person or by telephone)
and eligible to vote with respect to such matter, provided that a Quorum is
present, or without a meeting, by the unanimous written consent of the Regular
Trustees. In the event there is only one Regular Trustee, any and all action
of such Regular Trustee shall be evidenced by a written consent of such Regular
Trustee.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21
his or her power for the purpose of executing any documents contemplated in
Section 3.6, including any registration statement or amendment thereto filed
with the Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as the Regular Trustees
may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either
may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any Person succeeding to all or substantially
all the corporate trust business of the Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property Trustee or
the Delaware Trustee, as the case may be, hereunder, provided such Person shall
be otherwise qualified and eligible under this Article, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions in accordance with the
applicable terms of the relevant Holder's Securities. Distributions shall be
made on the Preferred Securities and the Common Securities in accordance with
the preferences set forth in their respective terms. If and to the extent that
the Debenture Issuer makes a payment of interest (including Compounded Interest
(as defined in the Indenture) and Additional Interest (as defined in the
Indenture)), premium and/or principal on the Debentures held by the Property
Trustee (the amount of any such payment being a "Payment Amount"), the Property
Trustee shall and is directed, to the extent funds are available for that
purpose, to make a distribution (a "Distribution") of the Payment Amount to
Holders.
- 24 -
<PAGE> 31
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall, on behalf of the Trust, issue
one class of preferred securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities.") The Trust shall issue no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
(b) The Certificates shall be signed, on behalf of the Trust,
by the Regular Trustees (or if there are more than two Regular Trustees, by any
two of the Regular Trustees). Any such signature shall be the manual signature
of any present or any future Regular Trustee. Typographical and other minor
errors or defects in any such reproduction of any such signature shall not
affect the validity of any Security. In case any Regular Trustee of the Trust
who shall have signed any of the Certificates shall cease to be such a Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed, on behalf of the Trust, by such persons who, at the actual date of
execution of such Certificate shall be the Regular Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any rule or
regulation of any stock exchange on which the Securities may be listed, or to
conform to usage.
(c) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable, subject to Section 10.1(b) with respect to the
Common Securities.
(e) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration, the Preferred Securities Guarantee
and the Indenture.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) Prior to December 31, 2050, the Trust shall terminate
only:
(i) upon the bankruptcy of the Holder of the Common
Securities or the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common Securities or
the Sponsor, the revocation of the Holder of the Common
- 25 -
<PAGE> 32
Securities or the Sponsor's charter and the expiration of ninety
(90) days after the date of revocation without a reinstatement
thereof;
(iii) upon the entry of a decree of judicial dissolution of
the Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall
have been paid to the Holders in accordance with the terms of the
Securities;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been terminated in
accordance with the terms of the Securities and all of the
Debentures endorsed thereon shall have been distributed to the
Holders of Securities in exchange for all of the Securities; or
(vi) before the issuance of any Securities, with the consent
of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an
event referred to in Section 8.1(a) and the completion of the winding up of the
affairs of the Trust, the Trustees shall file a certificate of cancellation
with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall
survive the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration and
in the terms of the Securities. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be
freely transferable.
(c) Subject to this Article IX, the Sponsor and any Related
Party may only transfer Common Securities to the Sponsor or a Related Party of
the Sponsor; provided that, any such transfer is subject to the condition
precedent that the transferor obtain the written opinion of nationally
recognized independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor trust and each Holder of
Securities would not be treated as owning an undivided beneficial
interest in the Debentures; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company, if the transferee
was not an Investment Company before the transfer.
- 26 -
<PAGE> 33
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other governmental charges that may be
imposed in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to
be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees
duly executed by the Holder or such Holder's attorney duly authorized in
writing. Each Certificate surrendered for registration of transfer shall be
canceled by the Regular Trustees. A transferee of a Certificate shall be
entitled to the rights and subject to the obligations of a Holder hereunder
upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by this
Declaration.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole holder
of such Certificate and of the Securities represented by such Certificate for
purposes of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to
or interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall
have actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred
Securities, the Preferred Securities Certificates, on original issuance, will
be issued in the form of one or more, fully registered, global Preferred
Security Certificates (each, a "Global Certificate"), to be delivered to DTC,
the initial Clearing Agency, by, or on behalf of, the Trust. Such Global
Certificate(s) shall initially be registered on the books and records of the
Trust in the name of Cede & Co., the nominee of DTC, and no Preferred Security
Beneficial Owner will receive a definitive Preferred Security Certificate
representing such Preferred Security Beneficial Owner's interests in such
Global Certificate(s), except as provided in Section 9.7. Unless and until
definitive, fully registered Preferred Security Certificates (the "Definitive
Preferred Security Certificates") have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force
and effect;
(b) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration
(including the payment of Distributions on the Global
Certificate(s) and receiving approvals, votes or consents
hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificate(s) and shall have no obligation
to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the
provisions of this Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Clearing Agency
and/or the Clearing Agency Participants. DTC will make book entry
transfers among the Clearing
- 27 -
<PAGE> 34
Agency Participants and receive and transmit payments of Distributions
on the Global Certificate(s) to such Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred
Security Holders is required under this Declaration, unless and until
Definitive Preferred Security Certificates shall have been issued to the
Preferred Security Beneficial Owners pursuant to Section 9.7, the Regular
Trustees shall give all such notices and communications specified herein to be
given to the Preferred Security Holders to the Clearing Agency, and shall have
no notice obligations to the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency
with respect to such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a successor
Clearing Agency is not appointed within ninety (90) days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect, after consultation with the
Sponsor, to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(i) Definitive Preferred Security Certificates shall be
prepared by the Regular Trustees, on behalf of the Trust, with
respect to such Preferred Securities; and
(ii) upon surrender of the Global Certificate(s) by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Preferred Security Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the instructions
of the Clearing Agency. Neither the Trustees nor the Trust shall be liable
for any delay in delivery of such instructions and each of them may
conclusively rely on, and shall be protected in relying on, said
instructions of the Clearing Agency. The Definitive Preferred Security
Certificates shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the Regular Trustees,
as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends
or endorsements as the Regular Trustees may deem appropriate, or as may be
required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which Preferred Securities may be listed, or to conform to usage.
- 28 -
<PAGE> 35
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such
security or indemnity as may be required by them to keep each of them harmless;
then, in the absence of notice that such Certificate shall have been acquired
by a bona fide purchaser, any Regular Trustee, on behalf of the Trust, shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the Regular Trustees may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not
be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of
Securities any deficit upon termination of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for
all of the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act,
the Holders of the Preferred Securities shall 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.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith, on behalf of the Trust, and
in a manner such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such
- 29 -
<PAGE> 36
Indemnified Person's gross negligence (or in the case of the Property Trustee,
negligence) or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be
paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person acting under
this Declaration shall not be liable to the Trust or to any other Covered
Person for its good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Property Trustee under the Trust
Indenture Act), are agreed by the parties hereto to replace such other duties
and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein or required by
applicable law:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person shall
act in a manner that is, or provides terms that are, fair and reasonable
to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Unless required by applicable law, whenever in this
Declaration an Indemnified Person is permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
- 30 -
<PAGE> 37
SECTION 10.4 Indemnification.
(a) To the fullest extent permitted by applicable law, the
Sponsor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage, liability, tax, penalty, expense or claim of any kind
or nature whatsoever incurred by such Indemnified Person by reason of the
creation, operation or termination of the Trust or any act or omission
performed or omitted by such Indemnified Person in good faith, on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of authority conferred on such Indemnified Person by this
Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of gross negligence (or, in the case of the
Property Trustee, negligence) or willful misconduct with respect to such acts
or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Sponsor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Sponsor of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 10.4(a). The indemnification shall survive the
termination of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Delaware Trustee or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee
and the Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Property Trustee may engage or be interested in any financial
or other transaction with the Sponsor or any Affiliate of the Sponsor, or may
act as depositary for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail,
each transaction of the Trust. The books of account shall be maintained on the
- 31 -
<PAGE> 38
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within ninety (90) days after
the end of each Fiscal Year of the Trust, annual financial statements of the
Trust, including a balance sheet of the Trust as of the end of such Fiscal
Year, and the related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States
federal income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the
Code to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within thirty (30) days after the end
of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Regular Trustees, on behalf of the Trust, with any state or local
taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Debentures held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; provided, however, that
the Property Trustee shall designate the signatories for the Property Trustee
Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably
be requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Regular Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a distribution in the amount of the withholding to the
Holder. In the event of any claimed over withholding, Holders shall be limited
to an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
- 32 -
<PAGE> 39
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by
any applicable terms of the Securities, this Declaration may only be amended by
a written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee;
(b) provided, however, that no amendment shall be made, and
any such purported amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received an Officers'
Certificate from each of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of
the Property Trustee or the Delaware Trustee, the Property Trustee
or the Delaware Trustee, as the case may be, shall have first
received:
(A) an Officers' Certificate from each of the Trust and
the Sponsor that such amendment is permitted by, and conforms
to, the terms of this Declaration (including the terms of the
Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified
for purposes of United States federal income taxation as a
grantor trust and each Holder of Securities not to be treated
as owning an undivided beneficial interest in the Debentures,
as evidenced by an opinion of counsel to the effect that such
amendment shall not result in the foregoing;
(B) affect adversely the rights, powers, obligations or
immunities of the Property Trustee or the Delaware Trustee; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act;
- 33 -
<PAGE> 40
(c) at such time after the Trust has issued any Securities
that remain outstanding, any amendment that would materially adversely affect
the rights, privileges or preferences of any Holder of Securities may be
effected only with such additional requirements as may be set forth in the
terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of
the Holders of a Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of
this Declaration;
(iii) add to the covenants, restrictions or obligations of
the Sponsor;
(iv) to conform to any change in Rule 3a-7 or written change
in interpretation or application of Rule 3a-7 by any legislative
body, court, government agency or regulatory authority which
amendment does not have a material adverse effect on the right,
preferences or privileges of the Holders of Securities; and
(v) to modify, eliminate and add to any provision of this
Declaration to such extent as may be necessary.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms
of the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call
a meeting of the Holders of such class if directed to do so by the Holders of
at least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing
the Certificates held by the Holders of Securities exercising the right to call
a meeting and only those Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders of
Securities:
- 34 -
<PAGE> 41
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least
seven (7) days and not more than sixty (60) days before the date
of such meeting. Whenever a vote, consent or approval of the
Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading, such
vote, consent or approval may be given at a meeting of the Holders
of Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting if a consent
in writing setting forth the action so taken is signed by the
Holders of Securities owning not less than the minimum amount of
Securities in liquidation amount that would be necessary to
authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting.
Prompt notice of the taking of action without a meeting shall be
given to the Holders of Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that any
written ballot submitted to the Security Holder for the purpose of
taking any action without a meeting shall be returned to the Trust
within the time specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to
act for it by proxy on all matters in which a Holder of Securities
is entitled to participate, including waiving notice of any
meeting, or voting or participating at a meeting. No proxy shall
be valid after the expiration of eleven (11) months from the date
thereof unless otherwise provided in the proxy. Every proxy shall
be revocable at the pleasure of the Holder of Securities executing
it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the
General Corporation Law of the State of Delaware relating to
proxies, and judicial interpretations thereunder, as if the Trust
were a Delaware corporation and the Holders of the Securities were
stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing
rules of any stock exchange on which the Preferred Securities are
then listed or trading otherwise provides, the Regular Trustees,
in their sole discretion, shall establish all other provisions
relating to meetings of Holders of Securities, including notice of
the time, place or purpose of any meeting at which any matter is
to be voted on by any Holders of Securities, waiver of any such
notice, action by consent without a meeting, the establishment of
a record date, quorum requirements, voting in person or by proxy
or any other matter with respect to the exercise of any such right
to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee and Delaware
Trustee.
[*TO BE CONFORMED TO UNDERWRITING AGREEMENT*]
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
- 35 -
<PAGE> 42
(a) the Property Trustee is a Delaware banking association
with trust powers, duly organized, validly existing and in good standing under
the laws of the State of Delaware, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the terms of,
the Declaration;
(b) the execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been duly
executed and delivered by the Property Trustee, and it constitutes a legal,
valid and binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) the execution, delivery and performance of the
Declaration by the Property Trustee does not conflict with or constitute a
breach of the Articles of Organization or By-laws of the Property Trustee;
(d) no consent, approval or authorization of, or registration
with or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the Declaration;
and
(e) the Delaware Trustee has been authorized to perform its
obligations under the Declaration. The Declaration under Delaware law
constitutes a legal, valid and binding obligation of the Delaware Trustee,
enforceable against it in accordance with the terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency and other similar laws
affecting creditors' rights generally and to general principles of equity and
the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as the Trust
may give notice of to the Holders of the Securities):
ILLINOIS POWER FINANCING I
c/o Illinois Power Company
500 South 27th Street
Decatur, IL 62525
Attention: Treasurer
(b) if given to the Delaware Trustee or the Property Trustee,
at the mailing address set forth below (or such other address as Delaware
Trustee may give notice of to the Holders of the Securities):
- 36 -
<PAGE> 43
WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
Attention: Corporate Trust Administration
(c) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
ILLINOIS POWER COMPANY
500 South 27th Street
Decatur, IL 62525
Attention: Treasurer
(d) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust or
otherwise in a manner that each Holder of Securities be treated as owning an
undivided beneficial interest in the Debentures. The provisions of this
Declaration shall be interpreted to further this intention of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
- 37 -
<PAGE> 44
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to Persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each party hereto to one of such counterpart signature pages. All
of such counterpart signature pages shall be read as though one, and they shall
have the same force and effect as though all of the signers had signed a single
signature page.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE
UNCONDITIONAL ACCEPTANCE BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL
INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS
DECLARATION AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF
THE SECURITIES GUARANTEES AND THE INDENTURE AND SHALL CONSTITUTE THE AGREEMENT
OF THE TRUST, THE DEPOSITORY, THE TRUSTEES, SUCH HOLDER AND SUCH OTHERS THAT
THE TERMS AND PROVISIONS OF THIS DECLARATION SHALL BE BINDING, OPERATIVE AND
EFFECTIVE AS BETWEEN THE TRUST, THE DEPOSITORY, THE TRUSTEES, SUCH HOLDER AND
SUCH OTHERS.
- 38 -
<PAGE> 45
IN WITNESS WHEREOF, the undersigned have caused these presents
to be executed as of the day and year first above written.
ILLINOIS POWER COMPANY,
as Sponsor
By: _________________________________
Name: _______________________________
Title: ______________________________
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By: _________________________________
Name: ______________________________
Title: ______________________________
_____________________________________
_____________________________________,
not in his individual capacity
but solely as Trustee
_____________________________________
_____________________________________,
not in his individual capacity
but solely as Trustee
- 39 -
<PAGE> 46
ANNEX I
TERMS OF
___% TRUST ORIGINATED PREFERRED SECURITIES
___% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of _______, 1995 (as amended from time to time,
the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. 4,000,000 Preferred Securities of
the Trust with an aggregate liquidation amount with respect to the assets of
the Trust of _____________ dollars ($____________) and a liquidation amount
with respect to the assets of the Trust of $25 per preferred security, are
hereby designated, for the purposes of identification, only as "_____% Trust
Originated Preferred Securities(SM) (TOPrS(SM))" (the "Preferred Securities").
The Preferred Security Certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange on
which the Preferred Securities are listed.
(b) Common Securities. __________________ Common Securities
of the Trust with an aggregate liquidation amount with respect to the assets of
the Trust of ________________ dollars ($___________) and a liquidation amount
with respect to the assets of the Trust of $25 per common security, are hereby
designated, for the purposes of identification only, as "______% Trust
Originated Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the
form of Exhibit A-2 to the Declaration, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or
practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a
rate per annum of ______% (the "Coupon Rate") of the stated liquidation amount
of $25 per Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor. The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
I-1
<PAGE> 47
(b) Distributions on the Securities will be cumulative, will
accrue from ________, 1995, and will be payable quarterly in arrears, on March
31, June 30, September 30, and December 31 of each year, commencing December
31, 1995, except as otherwise described below. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding twenty (20) consecutive quarters (each an "Extension Period"), during
which Extension Period no interest shall be due and payable on the Debentures,
provided that no Extension Period shall last beyond the date of maturity of the
Debentures. As a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to
accrue with interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly during any such Extension Period. Prior to
the termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed twenty (20)
consecutive quarters or extend beyond the maturity date of the Debentures.
Payments of accrued Distributions will be payable to Holders as they appear on
the books and records of the Trust on the first record date after the end of
the Extension Period. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. While the Preferred Securities remain in book-entry
only form, the relevant record dates shall be one Business Day prior to the
relevant payment dates which payment dates correspond to the interest payment
dates on the Debentures. Subject to any applicable laws and regulations and
the provisions of the Declaration, each such payment in respect of the
Preferred Securities will be made as described under the heading "Description
of the Preferred Securities -- Book-Entry Only Issuance - The Depository Trust
Company" in the Prospectus dated ______, 1995 (the "Prospectus"), of the Trust
included in the Registration Statement on Form S-3 of the Sponsor and the
Trust. The relevant record dates for the Common Securities shall be the same
record dates as for the Preferred Securities. If the Preferred Securities
shall not continue to remain in book-entry only form, the relevant record dates
for the Preferred Securities shall conform to the rules of any securities
exchange on which the securities are listed and, if none, shall be selected by
the Regular Trustees, which dates shall be at least one Business Day but less
than sixty (60) Business Days before the relevant payment dates, which payment
dates correspond to the interest payment dates on the Debentures.
Distributions payable on any Securities that are not punctually paid on any
Distribution payment date, as a result of the Debenture Issuer having failed to
make a payment under the Debentures, will cease to be payable to the Person in
whose name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then payment
of the Distribution payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
(d) In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder, such property
shall be distributed Pro Rata (as defined herein) among the Holders of the
Securities.
I-2
<PAGE> 48
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Holders of the Securities on the
date of the dissolution, winding-up or termination, as the case may be, will be
entitled to receive out of the assets of the Trust available for distribution
to Holders of Securities, after satisfaction of liabilities to creditors, an
amount equal to the aggregate of the stated liquidation amount of $25 per
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection with
such dissolution, winding-up or termination, Debentures in an aggregate stated
principal amount equal to the aggregate stated liquidation amount of such
Securities, with an interest rate equal to the Coupon Rate, and bearing accrued
and unpaid interest in an amount equal to the accrued and unpaid Distributions
on such Securities, shall be distributed on a Pro Rata basis to the Holders of
the Securities in exchange for such Securities.
If, upon any such dissolution, winding-up or termination, the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the Securities
shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption, the proceeds from such repayment or
payment shall be simultaneously applied to redeem Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed at a redemption price of $25 per Security plus
an amount equal to accrued and unpaid Distributions thereon at the date of the
redemption, payable in cash (the "Redemption Price"). Holders will be given
not less than thirty (30) nor more than sixty (60) days notice of such
redemption except in the case of payments upon maturity.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as described in
Section 4(f)(ii) below.
(c) If, at any time, a Tax Event or an Investment Company
Event (each as defined below, and each a "Special Event") shall occur and be
continuing, the Regular Trustees shall, except in certain limited circumstances
in relation to a Tax Event described in this Section 4(c), terminate the Trust
with the result that, after satisfaction of liabilities to creditors, the
Debentures held by the Property Trustee, having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on, and having the same record date for
payment as the Securities, to be distributed to the Holders of the Securities
in liquidation of such Holders' interests in the Trust on a Pro Rata basis,
within ninety (90) days following the occurrence of such Special Event (the "90
Day Period"); provided, however, that, in the case of the occurrence of a Tax
Event, as a condition of such termination and distribution, the Regular
Trustees shall have received an opinion of a nationally recognized independent
tax counsel experienced in such matters (a "No Recognition Opinion"), which
opinion may rely on published revenue rulings of the Internal Revenue Service,
to the effect that the Holders of the Securities will not recognize any gain or
loss for United States federal income tax purposes as a result of the
termination of the Trust and the distribution of Debentures, and provided,
further, that, if at the time there is available to the Trust the opportunity
to eliminate, within the 90 Day Period, the Special Event by taking some
ministerial action, such as filing a form or making an election, or
I-3
<PAGE> 49
pursuing some other similar reasonable measure that has no adverse effect on
the Trust, the Debenture Issuer, the Sponsor or the Holders of the Securities
("Ministerial Action"), the Trust will pursue such Ministerial Action in lieu
of termination.
If, after receipt of a Dissolution Tax Opinion (as defined
below), (i) the Debenture Issuer has received an opinion (a "Redemption Tax
Opinion") of a nationally recognized independent tax counsel experienced in
such matters that, as a result of a Tax Event, there is more than an
insubstantial risk that the Debenture Issuer would be precluded from deducting
the interest on the Debentures for United States federal income tax purposes
even if the Debentures were distributed to the Holders of Securities in
liquidation of such Holders' interests in the Trust as described in this
Section 4(c), or (ii) the Regular Trustees shall have been informed by such tax
counsel that a No Recognition Opinion cannot be delivered to the Trust, the
Debenture Issuer shall have the right at any time, upon not less than thirty
(30) nor more than sixty (60) days notice, to redeem such Debentures in whole
or in part for cash within ninety (90) days following the occurrence of such
Tax Event, and, following such redemption, Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
redeemed shall be redeemed by the Trust at the Redemption Price on a Pro Rata
basis; provided, however, that, if at the time there is available to the Trust
the opportunity to eliminate, within such ninety (90) day period, the Tax Event
by taking some Ministerial Action, the Trust or the Debenture Issuer will
pursue such Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect that on
or after the date of the Prospectus, as a result of (a) any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority therefor or therein, or (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority, which
amendment or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which action is
taken, in each case on or after the date of the Prospectus, there is more than
an insubstantial risk that (i) the Trust is or will be within ninety (90) days
of the date thereof, subject to United States federal income tax with respect
to interest accrued or received on the Debentures, (ii) the Trust is, or will
be within ninety (90) days of the date thereof, subject to more than a de
minimis amount of taxes, duties or other governmental charges, or (iii)
interest payable by the Debenture Issuer to the Trust on the Debentures is not,
or within ninety (90) days of the date thereof will not be, deductible, in
whole or in part, by the Debenture Issuer for United States federal income tax
purposes.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of a nationally recognized independent counsel
experienced in practice under the Investment Company Act (an "Investment
Company Event Opinion") that, as a result of the occurrence of a change in law
or regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), there is a more than an insubstantial
risk that the Trust is or will be considered an "investment company" which is
required to be registered under the Investment Company Act, which Change in
1940 Act Law becomes effective on or after the date of the Prospectus.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and termination of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) The Depository Trust Company
(the "Depository") or its nominee (or any successor Clearing Agency or its
nominee), as the record Holder of the Preferred Securities, will receive a
I-4
<PAGE> 50
registered global certificate or certificates representing the Debentures to be
delivered upon such distribution and (iii) any certificates representing
Securities, except for certificates representing Preferred Securities held by
the Depository or its nominee (or any successor Clearing Agency or its
nominee), will be deemed to represent beneficial interests in the Debentures
having an aggregate principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the Coupon Rate of, and accrued
and unpaid interest equal to accrued and unpaid Distributions on such
Securities until such certificates are presented to the Debenture Issuer or its
agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(e) If the Debentures are distributed to holders of the
Securities, pursuant to the terms of the Indenture, the Debenture Issuer will
use its best efforts to have the Debentures listed on the New York Stock
Exchange or on such other exchange as the Preferred Securities were listed
immediately prior to the distribution of the Debentures.
(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a
"Redemption/Distribution Notice") will be given by the Trust by
mail to each Holder of Securities to be redeemed or exchanged not
fewer than thirty (30) nor more than sixty (60) days before the
date fixed for redemption or exchange thereof which, in the case
of a redemption, will be the date fixed for redemption of the
Debentures. For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are given
pursuant to this Section 4(f)(i), a Redemption/Distribution Notice
shall be deemed to be given on the day such notice is first mailed
by first-class mail, postage prepaid, to Holders of Securities.
Each Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder appearing
in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof
with respect to any Holder shall affect the validity of the
redemption or exchange proceedings with respect to any other
Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed
shall be redeemed Pro Rata from each Holder of Preferred
Securities, it being understood that, in respect of Preferred
Securities registered in the name of and held of record by the
Depository or its nominee (or any successor Clearing Agency or its
nominee), the distribution of the proceeds of such redemption will
be made to each Clearing Agency Participant (or Person on whose
behalf such nominee holds such Securities) in accordance with the
procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued
if the Debentures are redeemed as set out in this Section 4
(which notice will be irrevocable), then (A) while the Preferred
Securities are in book-entry only form, with respect to the
Preferred Securities, by 12:00 noon, New York City time, on
the redemption date, provided that the Debenture Issuer has paid
the Property Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Debentures, the
Property Trustee will deposit irrevocably with the Depository or
its nominee (or successor Clearing Agency or its
I-5
<PAGE> 51
nominee) funds sufficient to pay the applicable Redemption Price
with respect to the Preferred Securities and will give the
Depository irrevocable instructions and authority to pay the
Redemption Price to the Holders of the Preferred Securities, and
(B) with respect to Preferred Securities issued in definitive form
and Common Securities, provided that the Debenture Issuer has paid
the Property Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Debentures, the
Property Trustee will pay the relevant Redemption Price to the
Holders of such Securities by check mailed to the address of the
relevant Holder appearing on the books and records of the Trust on
the redemption date. If a Redemption/Distribution Notice shall
have been given and funds deposited as required, if applicable,
then immediately prior to the close of business on the date of
such deposit, or on the redemption date, as applicable,
distributions will cease to accrue on the Securities so called for
redemption and all rights of Holders of such Securities so called
for redemption will cease, except the right of the Holders of such
Securities to receive the Redemption Price, but without interest
on such Redemption Price. Neither the Regular Trustees nor the
Trust shall be required to register or cause to be registered the
transfer of any Securities that have been so called for
redemption. If any date fixed for redemption of Securities is not
a Business Day, then payment of the Redemption Price payable on
such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business Day falls in the
next calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment
of the Redemption Price in respect of any Securities is improperly
withheld or refused and not paid either by the Property Trustee or
by the Sponsor as guarantor pursuant to the relevant Securities
Guarantee, Distributions on such Securities will continue to
accrue from the original redemption date to the actual date of
payment, in which case the actual payment date will be considered
the date fixed for redemption for purposes of calculating the
Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in respect of the
Preferred Securities, the Depository or its nominee (or any
successor Clearing Agency or its nominee) if the Global
Certificate(s) have been issued or, if Definitive Preferred
Security Certificates have been issued, to the Holder thereof, and
(B) in respect of the Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), the
Sponsor or any of its subsidiaries may at any time and from time
to time purchase outstanding Preferred Securities by tender, in
the open market or by private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph,
the Holders of a Majority in liquidation amount of the Preferred Securities,
voting separately as a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred upon the Property Trustee under the
Declaration, including (i) directing the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee, or exercising
any trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default and its consequences that is waivable
under the Indenture or (iii) exercise any right to rescind or annul a
declaration
I-6
<PAGE> 52
that the principal of all the Debentures shall be due and payable; provided,
however, that, where a consent under the Indenture would require the consent or
act of the Holders of greater than a majority of the Holders in principal
amount of Debentures affected thereby (a "Super-Majority"), the Property
Trustee may only give such consent or take such action at the written direction
of the Holders of at least the proportion in liquidation amount of the
Preferred Securities which the relevant Super-Majority represents of the
aggregate principal amount of the Debentures outstanding. The Property Trustee
shall not revoke any action previously authorized or approved by a vote of the
Holders of the Preferred Securities. Other than with respect to directing the
time, method and place of conducting any remedy available to the Property
Trustee or the Debenture Trustee as set forth above, the Property Trustee shall
not take any action in accordance with the directions of the Holders of the
Preferred Securities under this paragraph unless the Property Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be classified as other than
a grantor trust on account of such action and that each Holder of the
Securities will be treated as owning an undivided beneficial interest in the
Debentures on account of such action. If the Property Trustee fails to enforce
its rights under the Declaration, to the fullest extent permitted by law, any
Holder of Preferred Securities may institute a legal proceeding directly
against any Person to enforce the Property Trustee's rights under the
Declaration without first instituting a legal proceeding against the Property
Trustee or any other Person.
Any required approval or direction of Holders of Preferred
Securities may be given at a separate meeting of Holders of Preferred
Securities convened for such purpose, at a meeting of all of the Holders of
Securities in the Trust or pursuant to written consent. The Regular Trustees
will cause a notice of any meeting at which Holders of Preferred Securities are
entitled to vote, or of any matter upon which action by written consent of such
Holders is to be taken, to be mailed to each Holder of record of Preferred
Securities. Each such notice will include a statement setting forth (i) the
date of such meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written consent
is sought and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities
will be required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Preferred Securities that are owned by the Sponsor or any Affiliate of
the Sponsor shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c) and 7 and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after
the Event of Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second
to last sentence of this paragraph, the Holders of a
I-7
<PAGE> 53
Majority in liquidation amount of the Common Securities, voting separately as a
class, may direct the time, method, and place of conducting any proceeding for
any remedy available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under the Declaration, including (i)
directing the time, method, place of conducting any proceeding for any remedy
available to the Debenture Trustee, or exercising any trust or power conferred
on the Debenture Trustee with respect to the Debentures, (ii) waive any past
default and its consequences that is waivable under Section ____ of the
Indenture or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable; provided that,
where a consent or action under the Indenture would require the consent or act
of a Super-Majority, the Property Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant
Super-Majority represents of the aggregate principal amount of the Debentures
outstanding. Pursuant to this Section 6(c), the Property Trustee shall not
revoke any action previously authorized or approved by a vote of the Holders of
the Preferred Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Property Trustee or
the Debenture Trustee as set forth above, the Property Trustee shall not take
any action in accordance with the directions of the Holders of the Common
Securities under this paragraph unless the Property Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action and that each Holder of the Securities will be
treated as owning an undivided beneficial interest in the Debentures on account
of such action. If the Property Trustee fails to enforce its rights under the
Declaration, to the fullest extent permitted by law, any Holder of Common
Securities may institute a legal proceeding directly against any Person to
enforce the Property Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Property Trustee or any other
Person.
Any required approval or direction of Holders of Common
Securities may be given at a separate meeting of Holders of Common Securities
convened for such purpose, at a meeting of all of the Holders of Securities in
the Trust or pursuant to written consent. The Regular Trustees will cause a
notice of any meeting at which Holders of Common Securities are entitled to
vote, or of any matter upon which action by written consent of such Holders is
to be taken, to be mailed to each Holder of record of Common Securities. Each
such notice will include a statement setting forth (i) the date of such meeting
or the date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
materially adversely affect the powers, preferences or special rights of the
Securities, whether by way of amendment to the Declaration or otherwise, or
(ii) the dissolution, winding- up or termination of the Trust, other than as
described in Section 8.1 of the Declaration, then the Holders of outstanding
Securities as a class, will be entitled to vote on such amendment or proposal
(but not on any other amendment or proposal) and such amendment or proposal
shall not be effective except with the approval of the Holders of at least 66
2/3% in liquidation amount of the Securities, voting together as a single
class; provided, however, if any
I-8
<PAGE> 54
amendment or proposal referred to in clause (i) above would materially
adversely affect only the Preferred Securities or only the Common Securities,
then only the affected class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of 66 2/3% in liquidation amount of such class of Securities.
(b) In the event the consent of the Property Trustee as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Debentures, the
Property Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or termination as
directed by a Majority in liquidation amount of the Securities voting together
as a single class; provided, however, that where a consent under the Indenture
would require the consent of the holders of a Super-Majority, the Property
Trustee may only give such consent at the direction of the Holders of at least
the proportion in liquidation amount of the Securities which the relevant
Super-Majority represents of the aggregate principal amount of the Debentures
outstanding; provided, further, that the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Securities under
this Section 7(b) unless the Property Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action and that each Holder of the Securities will be treated as owning an
undivided beneficial interest in the Debentures on account of such action.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each
Holder of Securities according to the aggregate liquidation amount of the
Securities held by the relevant Holder in relation to the aggregate liquidation
amount of all Securities outstanding unless, in relation to a payment, an Event
of Default under the Declaration has occurred and is continuing, in which case
any funds available to make such payment shall be paid first to each Holder of
the Preferred Securities pro rata according to the aggregate liquidation amount
of Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate
liquidation amount of Common Securities held by the relevant Holder relative to
the aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu and payment thereon
shall be made Pro Rata with the Common Securities except that, where an Event
of Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Property Trustee, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the New York Stock Exchange.
I-9
<PAGE> 55
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written request
to the Sponsor at its principal place of business.
I-10
<PAGE> 56
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT - This Preferred Security is a Global Certificate within the meaning of
the Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary.
This Preferred Security is exchangeable for Preferred Securities registered in
the name of a person other than the Depositary or its nominee only in the
limited circumstances described in the Declaration and no transfer of this
Preferred Security (other than a transfer of this Preferred Security as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of the Depositary (55 Water Street, New York, New York) to the
Trust or its agent for registration of transfer, exchange or payment, and any
Preferred Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of the Depositary and any
payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
Certificate Number Number of Preferred Securities
CUSIP NO. [ ]
Certificate Evidencing Preferred Securities
of
ILLINOIS POWER FINANCING I
____% Trust Originated Preferred Securities(SM) ("TOPrS"(SM))
(liquidation amount $25 per Preferred Security)
ILLINOIS POWER FINANCING I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of preferred securities
of the Trust representing undivided beneficial interests in the assets of the
Trust designated the _____% Trust Originated Preferred Securities(SM)
(liquidation amount $25 per Preferred Security) (the "Preferred Securities").
The Preferred Securities are transferable on the books and records of the
Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Preferred Securities represented hereby are issued and shall in all
respects be subject to the provisions of the Amended and Restated Declaration
of Trust of the Trust dated as of _______, 1995, as the same may be amended
from time to time (the "Declaration"), including the designation of the terms
of the Preferred Securities as set forth in Annex I to the Declaration.
Capitalized terms used herein but not defined shall have the meaning given them
in the Declaration. The Holder is entitled to the benefits of the Preferred
Securities Guarantee to the extent
A1-1
<PAGE> 57
provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge
upon written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Regular Trustees of the Trust has
executed this certificate this ___ day of ____________, 199__.
_______________________________________
______________________________________,
not in his individual capacity but
solely as Regular Trustee
_______________________________________
______________________________________,
not in his individual capacity
solely as Regular Trustee
A1-2
<PAGE> 58
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________ agent to transfer
this Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
A1-3
<PAGE> 59
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
ILLINOIS POWER FINANCING I
______% Trust Originated Common Securities
(liquidation amount $25 per Common Security)
ILLINOIS POWER FINANCING I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
_________________ (the "Holder") is the registered owner of common securities
of the Trust representing undivided beneficial interests in the assets of the
Trust designated the ______% Trust Originated Common Securities (liquidation
amount $25 per Common Security) (the "Common Securities"). The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects
be subject to the provisions of the Amended and Restated Declaration of Trust
of the Trust dated as of _______, 1995, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the Common
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Common Securities Guarantee to
the extent provided therein. The Sponsor will provide a copy of the
Declaration, the Common Securities Guarantee and the Indenture to a Holder
without charge upon written request to the Sponsor at its principal place of
business. THE COMMON SECURITIES ARE NOT TRANSFERRABLE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE DECLARATION.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.
A2-1
<PAGE> 60
IN WITNESS WHEREOF, the Regular Trustees of the Trust has executed
this certificate this ___ day of ____________, 199__.
________________________________________
________________________________________
not in his individual capacity but
solely as Regular Trustee
________________________________________
________________________________________
not in his individual capacity
solely as Regular Trustee
A2-2
<PAGE> 61
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints _______________________________________________________
________________________________________________________________________________
________________________________________________________________________________
_______________________________ agent to transfer this Common Security
Certificate on the books of the Trust. The agent may substitute another to act
for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-3
<PAGE> 62
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE> 63
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE> 1
EXHIBIT 4(D)
=========================
FORM OF
ILLINOIS POWER COMPANY,
ISSUER
AND
WILMINGTON TRUST COMPANY,
TRUSTEE
INDENTURE
DATED AS OF -----------------, 1995
SUBORDINATED DEBT SECURITIES
=========================
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
<TABLE>
<S> <C> <C>
SECTION 1.01. Definitions of Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF DEBT SECURITIES
SECTION 2.01. Designation and Terms of Debt Securities. . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.02. Form of Debt Securities and Trustee's Certificate. . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.03. Denominations; Provisions for Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.04. Execution and Authentication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.05. Registration of Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.06. Temporary Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.07. Mutilated, Destroyed, Lost or Stolen Debt Securities. . . . . . . . . . . . . . . . . . . . 13
SECTION 2.08. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.09. Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.10. Authenticating Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.11. Global Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE III
REDEMPTION OF DEBT SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.01. Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.02. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.03. Payment Upon Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.04. Sinking Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.05. Satisfaction of Sinking Fund Payments with Debt Securities. . . . . . . . . . . . . . . . . 18
SECTION 3.06. Redemption of Debt Securities for Sinking Fund. . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Principal, Premium and Interest. . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.02. Maintenance of Office or Agency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.03. Paying Agents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.04. Appointment to Fill Vacancy in Office of Trustee. . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.05. Compliance with Consolidation Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.06. Limitation on Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.07. Covenants as to Illinois Power Trusts. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 4.08. Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE V
SECURITYHOLDERS, LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 5.01. Company to Furnish Trustee Names and Addresses of Securityholders. . . . . . . . . . . . . 23
SECTION 5.02. Preservation Of Information; Communications With Securityholders. . . . . . . . . . . . . . 23
SECTION 5.03. Reports By the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.04. Reports by the Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VI
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 6.02. Collection of Indebtedness and Suits for Enforcement by Trustee. . . . . . . . . . . . . . 27
SECTION 6.03. Application of Moneys Collected. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.04. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.05. Rights and Remedies Cumulative; Delay or Omission Not Waiver. . . . . . . . . . . . . . . . 30
SECTION 6.06. Control by Securityholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.07. Undertaking to Pay Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VII
CONCERNING THE TRUSTEE
SECTION 7.01. Certain Duties and Responsibilities of Trustee. . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 7.02. Certain Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 7.03. Trustee Not Responsible for Recitals or Issuance of Debt Securities. . . . . . . . . . . . 34
SECTION 7.04. May Hold Debt Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.05. Moneys Held in Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.06. Compensation and Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.07. Reliance on Officers' Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.08. Qualification; Conflicting Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.09. Corporate Trustee Required; Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.10. Resignation and Removal; Appointment of Successor. . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.11. Acceptance of Appointment By Successor. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 7.12. Merger, Conversion, Consolidation or Succession to Business. . . . . . . . . . . . . . . . 40
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
SECTION 7.13. Preferential Collection of Claims Against the Company. . . . . . . . . . . . . . . . . . . 40
ARTICLE VIII
CONCERNING THE SECURITYHOLDERS
SECTION 8.01. Evidence of Action by Securityholders. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 8.02. Proof of Execution by Securityholders. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 8.03. Who May be Deemed Owners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 8.04. Certain Debt Securities Owned by Company Disregarded. . . . . . . . . . . . . . . . . . . . 41
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without the Consent of Securityholders. . . . . . . . . . . . . . . 42
SECTION 9.02. Supplemental Indentures With Consent of Securityholders. . . . . . . . . . . . . . . . . . 43
SECTION 9.03. Effect of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 9.04. Debt Securities Affected by Supplemental Indentures. . . . . . . . . . . . . . . . . . . . 44
SECTION 9.05. Execution of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE X
SUCCESSOR CORPORATION
SECTION 10.01. Company May Consolidate, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 10.02. Successor Corporation Substituted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 10.03. Evidence of Consolidation, Etc. to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01. Satisfaction and Discharge of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 11.02. Discharge of Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 11.03. Deposited Moneys to be Held in Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 11.04. Payment of Moneys Held by Paying Agents. . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 11.05. Repayment to Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. No Recourse. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
</TABLE>
iii
<PAGE> 5
ARTICLE XIII
MISCELLANEOUS PROVISIONS
<TABLE>
<S> <C> <C>
SECTION 13.01. Effect on Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 13.02. Actions by Successor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 13.03. Surrender of Company Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 13.04. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 13.05. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 13.06. Treatment of the Debt Securities as Debt. . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 13.07. Compliance Certificates and Opinions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 13.08. Payments on Business Days. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 13.09. Conflict with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 13.10. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 13.11. Separability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 13.12. Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 13.13. Acknowledgment of Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE XIV
SUBORDINATION OF DEBT SECURITIES
SECTION 14.01. Subordination Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
</TABLE>
iv
<PAGE> 6
SECTION OF
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED INDENTURE
- ------------------- ----------
310(a) . . . . . . . . . . . . . . . . . . . . . 7.09
310(b) . . . . . . . . . . . . . . . . . . . . . 7.08
. . . . . . . . . . . . . . . . . . . . 7.10
310(c) . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . 7.13(a)
311(b) . . . . . . . . . . . . . . . . . . . . . 7.13(b)
311(c) . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . 5.01
. . . . . . . . . . . . . . . . . . . . 5.02(a)
312(b) . . . . . . . . . . . . . . . . . . . . . 5.02(b)
312(c) . . . . . . . . . . . . . . . . . . . . . 5.02(c)
313(a) . . . . . . . . . . . . . . . . . . . . . 5.04(a)
313(b) . . . . . . . . . . . . . . . . . . . . . 5.04(b)
313(c) . . . . . . . . . . . . . . . . . . . . . 5.04(a)
. . . . . . . . . . . . . . . . . . . . 5.04(b)
313(d) . . . . . . . . . . . . . . . . . . . . . 5.04(c)
314(a) . . . . . . . . . . . . . . . . . . . . . 5.03
314(b) . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . 13.06
314(d) . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . 13.06
314(f) . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . . . . 7.01(a)
. . . . . . . . . . . . . . . . . . . . 7.02
315(b) . . . . . . . . . . . . . . . . . . . . . 6.07
315(c) . . . . . . . . . . . . . . . . . . . . . 7.01
315(d) . . . . . . . . . . . . . . . . . . . . . 7.01(b)
. . . . . . . . . . . . . . . . . . . . 7.01(c)
315(e) . . . . . . . . . . . . . . . . . . . . . 6.07
316(a) . . . . . . . . . . . . . . . . . . . . . 6.06
. . . . . . . . . . . . . . . . . . . . 8.04
316(b) . . . . . . . . . . . . . . . . . . . . . 6.04
316(c) . . . . . . . . . . . . . . . . . . . . . 8.01
317(a) . . . . . . . . . . . . . . . . . . . . . 6.02
317(b) . . . . . . . . . . . . . . . . . . . . . 4.03
318(a) . . . . . . . . . . . . . . . . . . . . . 13.08
- ---------------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Guarantee Agreement and shall not have any bearing on the
interpretation of its terms or provisions.
v
<PAGE> 7
THIS INDENTURE, dated as of _______________, 1995, between
ILLINOIS POWER COMPANY, an Illinois corporation (the "Company"), and WILMINGTON
TRUST COMPANY, a Delaware banking corporation, not in its individual capacity
but solely as trustee (the "Trustee"):
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (the "Securities"), to be
issued in one or more series as in this Indenture provided. This Indenture is
subject to the provisions of the Trust Indenture Act of 1939, as amended, that
are required to be part of this Indenture and shall, to the extent applicable,
be governed by such provisions. All things necessary to make this Indenture a
valid agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Securities or of
any series thereof, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions of Terms.
The terms defined in this Section (except as in this Indenture
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section and shall include the plural
as well as the singular. All other terms used in this Indenture that are
defined in the Trust Indenture Act of 1939, as amended, or that are by
reference in such Trust Indenture Act defined in the Securities Act of 1933, as
amended (except as herein otherwise expressly provided or unless the context
otherwise requires), shall have the meanings assigned to such terms in said
Trust Indenture Act and in said Securities Act as in force at the date of the
execution of this instrument.
"Affiliate" means, with respect to a specified Person, (a) any
Person directly or indirectly owning, controlling or holding with power to vote
10% or more of the outstanding voting securities or other ownership interests
of the specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by or under common control with
the specified Person, (d) a partnership in which the specified Person is a
general partner,
1
<PAGE> 8
(e) any officer or director of the specified Person and (f) if the specified
Person is an individual, any entity of which the specified Person is an
officer, director or general partner.
"Authenticating Agent" means an authenticating agent with
respect to all or any of the series of Debt Securities appointed with respect
to all or such series of the Debt Securities by the Trustee pursuant to Section
2.10.
"Bankruptcy Law" means Title 11, United States Code, or any
similar federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the
Company, or any duly authorized committee of such board or any officer of the
Company duly authorized by the board of directors of the Company or a duly
authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification.
"Business Day" means, with respect to any series of Debt
Securities, any day other than a day on which banking institutions in New York
are authorized or required by law to close.
"Certificate" means a certificate signed by the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company. The Certificate need not comply
with the provisions of Section 13.07.
"Common Securities" means undivided beneficial interests in
the assets of an Illinois Power Trust which rank pari passu with Preferred
Securities issued by such trust; provided, however, that upon the occurrence of
an Event of Default, the rights of holders of Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and maturity
are subordinated to the rights of holders of Preferred Securities.
"Common Securities Guarantee" means any guarantee that the
Company may enter into with an Illinois Power Trust or other Persons that
operate directly or indirectly for the benefit of holders of Common Securities
of such trust.
"Company" means Illinois Power Company, a corporation duly
organized and existing under the laws of the State of Illinois, and, subject to
the provisions of Article X, shall also include its successors and assigns.
"Corporate Trust Office" means the office of the Trustee at
which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Trust Department.
2
<PAGE> 9
"Custodian" means any receiver, trustee, assignee, liquidator,
or similar official under any Bankruptcy Law.
"Declaration" means, in respect of an Illinois Power Trust,
the amended and restated declaration of trust of such Illinois Power Trust or
any other governing instrument of such Trust.
"Debt Securities" means the Debt Securities authenticated and
delivered under this Indenture.
"Default" means any event, act or condition that with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulted Interest" has the meaning specified in Section 2.03.
"Depositary" means, with respect to Debt Securities of any
series for which the Company shall determine that such Debt Securities will be
issued as a Global Security, The Depository Trust Company, New York, New York,
another clearing agency, or any successor registered as a clearing agency under
the Exchange Act or other applicable statute or regulation, which, in each
case, shall be designated by the Company pursuant to either Section 2.01 or
2.11.
"Event of Default" means, with respect to Debt Securities of a
particular series, any event specified in Section 6.01, continued for the
period of time, if any, therein designated.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Global Security" means, with respect to any series of
Securities, a Debt Security executed by the Company and delivered by the
Trustee to the Depositary or pursuant to the Depositary's instruction, all in
accordance with the Indenture, which shall be registered in the name of this
Depositary or its nominee.
"Governmental Obligations" means securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America that, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities) as custodian with respect to any such Governmental Obligation
or a specific payment of principal of or interest on any such Governmental
Obligation held by such custodian for the account of the holder of such
depositary receipt; provided, however, that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable
3
<PAGE> 10
to the holder of such depositary receipt from any amount received by the
custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such
depositary receipt.
"Herein", "hereof" and "hereunder", and other words of similar
import, refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
"Illinois Power Trust" means a Delaware business trust formed
by the Company for the purpose of purchasing Debt Securities of the Company.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into in accordance with the terms hereof.
"Interest Payment Date", when used with respect to any
installment of interest on a Debt Security of a particular series, means the
date specified in such Debt Security or in a Board Resolution, Officers'
Certificate or in an indenture supplemental hereto with respect to such series
as the fixed date on which an installment of interest with respect to Debt
Securities of that series is due and payable.
"Officers' Certificate" means a certificate signed by the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Controller or an Assistant Controller or the Secretary or an Assistant
Secretary of the Company that is delivered to the Trustee in accordance with
the terms hereof. Each such certificate shall include the statements provided
for in Section 13.07, if and to the extent required by the provisions thereof.
"Opinion of Counsel" means an opinion in writing of legal
counsel, who may be an employee of or counsel for the Company, that is
delivered to the Trustee in accordance with the terms hereof. Each such
opinion shall include the statements provided for in Section 13.07, if and to
the extent required by the provisions thereof.
"Outstanding", when used with reference to Debt Securities of
any series, means, subject to the provisions of Section 8.04, as of any
particular time, all Debt Securities of that series theretofore authenticated
and delivered by the Trustee under this Indenture, except (a) Debt Securities
theretofore canceled by the Trustee or any paying agent, or delivered to the
Trustee or any paying agent for cancellation or that have previously been
canceled; (b) Debt Securities or portions thereof for the payment or redemption
of which moneys or Governmental Obligations in the necessary amount shall have
been deposited in trust with the Trustee or with any paying agent (other than
the Company) or shall have been set aside and segregated in trust by the
Company (if the Company shall act as its own paying agent); provided, however,
that if such Debt Securities or portions of such Debt Securities are to be
redeemed prior to the maturity thereof, notice of such redemption shall have
been given as provided in Section 3.02, or provision satisfactory to the
Trustee shall have been
4
<PAGE> 11
made for giving such notice; (c) Debt Securities in lieu of or in substitution
for which other Debt Securities shall have been authenticated and delivered
pursuant to the terms of Section 2.07; and (d) Debt Securities, except to the
extent provided in Sections 11.01 and 11.02, with respect to which the Company
has effected defeasance and/or covenant defeasance as provided in Article XI.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, joint-stock company, unincorporated
organization or government or any agency or political subdivision thereof.
"Predecessor Security" of any particular Debt Security means
every previous Debt Security evidencing all or a portion of the same debt and
guarantee as that evidenced by such particular Debt Security; and, for the
purposes of this definition, any Debt Security authenticated and delivered
under Section 2.07 in lieu of a lost, destroyed or stolen Debt Security shall
be deemed to evidence the same debt as the lost, destroyed or stolen Debt
Security.
"Preferred Securities" means undivided beneficial interests in
the assets of an Illinois Power Trust which rank pari passu with Common
Securities issued by such trust; provided, however, that upon the occurrence of
an Event of Default, the rights of holders of Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights of holders of Preferred Securities.
"Preferred Securities Guarantee" means any guarantee that the
Company may enter into with an Illinois Power Trust or other Persons that
operates directly or indirectly for the benefit of holders of Preferred
Securities of such trust.
"Property Trustee" means the entity performing the functions
of the Property Trustee of an Illinois Power Trust under the applicable
Declaration of such Illinois Power Trust.
"Responsible Officer," when used with respect to the Trustee,
means the Chairman or any Vice Chairman of the Board of Directors, the
President, any Vice President, the Secretary, the Treasurer, any trust officer,
any corporate trust officer or any other officer or assistant officer of the
Trustee customarily performing functions similar to those performed by the
Persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, as amended
from time to time or any successor legislation.
"Securityholder", "holder of Debt Securities", "registered
holder", or other similar term, means the Person or Persons in whose name or
names a particular Debt
5
<PAGE> 12
Security shall be registered on the books of the Company kept for that purpose
in accordance with the terms of this Indenture.
"Security Register" and "Security Registrar" have the
respective meanings set forth in Section 2.05.
"Subsidiary" means, with respect to any Person, (i) any
corporation at least a majority of whose outstanding Voting Stock shall at the
time be owned, directly or indirectly, by such Person or by one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any
general partnership, joint venture or similar entity, at least a majority of
whose outstanding partnership or similar interests shall at the time be owned
by such Person, or by one or more of its Subsidiaries, or by such Person and
one or more of its Subsidiaries and (iii) any limited partnership of which such
Person or any of its Subsidiaries is a general partner.
"Trustee" means Wilmington Trust Company, not in its
individual capacity, and, subject to the provisions of Article VII, shall also
include its successors and assigns, and, if at any time there is more than one
Person acting in such capacity hereunder, "Trustee" shall mean each such
Person. The term "Trustee," as used with respect to a particular series of
Debt Securities, shall mean the trustee with respect to that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
subject to the provisions of Sections 9.01, 9.02 and 10.01, as in effect at the
date of execution of this instrument.
"Trust Securities" means Common Securities and Preferred
Securities.
"Voting Stock", as applied to stock of any Person, means
shares, interests, participations or other equivalents in the equity interest
(however designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the equivalent) of such Person,
other than shares, interests, participations or other equivalents having such
power only by reason of the occurrence of a contingency.
ARTICLE II
ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF DEBT SECURITIES
SECTION 2.01. Designation and Terms of Debt Securities.
The aggregate principal amount of Debt Securities that may be
authenticated and delivered under this Indenture is unlimited. The Debt
Securities may be issued in one or more series up to the aggregate principal
amount of Debt Securities of that series from time to time authorized by or
pursuant to a Board Resolution of the Company, or pursuant to one or more
indentures supplemental hereto. Prior to the initial issuance of Debt
6
<PAGE> 13
Securities of any series, there shall be established in or pursuant to a Board
Resolution of the Company, and set forth in an Officers' Certificate of the
Company, or established in one or more indentures supplemental hereto:
(1) the title of the series of Debt Security (which shall
distinguish the Debt Securities of that series from all other
series of Debt Securities);
(2) any limit upon the aggregate principal amount of the Debt
Securities of that series that may be authenticated and
delivered under this Indenture (except for Debt Securities
authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Debt Securities of
that series);
(3) the date or dates on which the principal of the Debt
Securities of that series is payable;
(4) the rate or rates at which the Debt Securities of that series
shall bear interest or the manner of calculation of such rate
or rates, if any;
(5) the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable
or the manner of determination of such Interest Payment Dates
and the record date for the determination of holders to whom
interest is payable on any such Interest Payment Dates;
(6) the right, if any, to defer the interest payment periods and
the duration of such extension;
(7) the period or periods within which, the price or prices at
which, and the terms and conditions upon which, Debt
Securities of that series may be redeemed, in whole or in
part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Debt Securities of that series pursuant to any sinking fund or
analogous provisions (including payments made in cash in
participation of future sinking fund obligations) or at the
option of a holder thereof and the period or periods within
which, the price or prices at which, and the terms and
conditions upon which, Debt Securities of that series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation;
(9) the security or subordination terms of the Debt Securities of
that series;
(10) the form of the Debt Securities of that series, including the
form of the Certificate of Authentication for such series;
7
<PAGE> 14
(11) if other than denominations of twenty-five U.S. dollars ($25)
or any integral multiple thereof, the denominations in which
the Debt Securities of that series shall be issuable;
(12) whether and under what circumstances the Company will pay
additional amounts on the Debt Securities of the series to any
holder who is not a United States person (including any
modification to the definition of such term) in respect of any
tax, assessment or governmental charge and, if so, whether the
Company will have the option to redeem such Debt Securities
rather than pay such additional amounts (and the terms of any
such option);
(13) whether the Debt Securities are issuable as a Global Security
and, in such case, the identity of the Depositary for such
series.; and
(14) any and all other terms with respect to such series (which
terms shall not be inconsistent with the terms of this
Indenture), including any terms which may be required by or
advisable under United States laws or regulations or advisable
in connection with the marketing of Debt Securities of that
series.
All Debt Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to any such Board Resolution or in any indentures supplemental
hereto.
If any of the terms of a series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of such series.
SECTION 2.02. Form of Debt Securities and Trustee's Certificate.
The Debt Securities of any series and the Trustee's
certificate of authentication to be borne by such Debt Securities shall be
substantially of the tenor and purport as set forth in one or more indentures
supplemental hereto or as provided in a Board Resolution and as set forth in an
Officers' Certificate, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Indenture, or as may be required
to comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which Debt Securities of
that series may be listed, or to conform to usage.
SECTION 2.03. Denominations; Provisions for Payment.
8
<PAGE> 15
The Debt Securities shall be issuable as registered Debt
Securities and in the denominations of twenty-five U.S. dollars ($25) or any
integral multiple thereof, subject to Section 2.01(11). The Debt Securities of
a particular series shall bear interest payable on the dates and at the rate
specified with respect to that series. The principal of and the interest on
the Debt Securities of any series, as well as any premium thereon in case of
redemption thereof prior to maturity, shall be payable in the coin or currency
of the United States of America that at the time of such payment is legal
tender for public and private debt, at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, the City and State of
New York. Each Debt Security shall be dated the date of its authentication.
Interest on the Debt Securities shall be computed on the basis of a 360-day
year composed of twelve 30-day months.
Unless otherwise contemplated by Section 2.01 with respect to
any series of Debt Securities, the interest installment on any Debt Security
that is payable, and is punctually paid or duly provided for, on any Interest
Payment Date for Debt Securities of that series shall be paid to the Person in
whose name said Debt Security (or one or more Predecessor Debt Securities) is
registered at the close of business on the regular record date for such
interest installment.
In the event that any Debt Security of a particular series or
portion thereof is called for redemption and the redemption date is subsequent
to a regular record date with respect to any Interest Payment Date and prior to
such Interest Payment Date, interest on such Debt Security will be paid upon
presentation and surrender of such Debt Security as provided in Section 3.03.
Any interest on any Debt Security that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date for Debt
Securities of that series (herein called "Defaulted Interest") shall forthwith
cease to be payable to the registered holder on the relevant regular record
date by virtue of having been such holder; and such Defaulted Interest shall be
paid by the Company, at its election, as provided in clause (1) or clause (2)
below:
(1) The Company may make payment of any Defaulted Interest on Debt
Securities to the Persons in whose names such Debt Securities
(or their respective Predecessor Debt Securities) are
registered at the close of business on a special record date
for the payment of such Defaulted Interest, which shall be
fixed in the following manner: the Company shall notify the
Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each such Debt Security and the date of
the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such
9
<PAGE> 16
Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a special record date for the payment of
such Defaulted Interest which shall not be more than 15 nor
less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall
promptly notify the Company of such special record date and,
in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and
the special record date therefor to be mailed, first class
postage prepaid, to each Securityholder at his or her address
as it appears in the Security Register (as hereinafter
defined), not less than 10 days prior to such special record
date. Notice of the proposed payment of such Defaulted
Interest and the special record date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to
the Persons in whose names such Debt Securities (or their
respective Predecessor Debt Securities) are registered on such
special record date and shall be no longer payable pursuant to
the following clause (2).
(2) The Company may make payment of any Defaulted Interest on any
Debt Securities in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Debt Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the
Company to the Trustees of the proposed payment pursuant to
this clause, such manner of payment shall be deemed
practicable by the Trustee.
Unless otherwise provided in a Board Resolution or one or more
indentures supplemental hereto establishing the terms of any series of Debt
Securities pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Debt Securities with respect
to any Interest Payment Date for such series shall mean either the fifteenth
day of the month immediately preceding the month in which an Interest Payment
Date established for such series pursuant to Section 2.01 hereof shall occur,
if such Interest Payment Date is the first day of a month, or the last day of
the month immediately preceding the month in which an Interest Payment Date
established for such series pursuant to Section 2.01 hereof shall occur, if
such Interest Payment Date is the fifteenth day of a month, whether or not such
date is a Business Day.
Subject to the foregoing provisions of this Section, each Debt
Security of a series delivered under this Indenture upon transfer of or in
exchange for or in lieu of any other Debt Security of such series shall carry
the rights to interest accrued and unpaid, and to accrue, that were carried by
such other Debt Security.
SECTION 2.04. Execution and Authentication.
The Debt Securities shall be signed on behalf of the Company
by its Chairman, President or one of its Vice Presidents, under its corporate
seal attested by its
10
<PAGE> 17
Secretary or one of its Assistant Secretaries. Signatures may be in the form
of a manual or facsimile signature. The Company may use the facsimile
signature of any Person who shall have been a President or Vice President
thereof, or of any Person who shall have been a Secretary or Assistant
Secretary thereof, notwithstanding the fact that at the time the Debt
Securities shall be authenticated and delivered or disposed of such Person
shall have ceased to be the President or a Vice President, or the Secretary or
an Assistant Secretary, of the Company. The seal of the Company may be in the
form of a facsimile of such seal and may be impressed, affixed, imprinted or
otherwise reproduced on the Debt Securities. The Debt Securities may contain
such notations, legends or endorsements required by law, stock exchange rule or
usage. Each Debt Security shall be dated the date of its authentication by the
Trustee.
A Debt Security shall not be valid until authenticated
manually by an authorized signatory of the Trustee, or by an Authenticating
Agent. Such signature shall be conclusive evidence that the Debt Security so
authenticated has been duly authenticated and delivered hereunder and that the
holder is entitled to the benefits of this Indenture.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debt Securities of any
series executed by the Company to the Trustee for authentication, together with
a written order of the Company for the authentication and delivery of such Debt
Securities, signed by its President or any Vice President and its Treasurer or
any Assistant Treasurer, and the Trustee in accordance with such written order
shall authenticate and deliver such Debt Securities.
In authenticating such Debt Securities and accepting the
additional responsibilities under this Indenture in relation to such Debt
Securities, the Trustee shall be entitled to receive, and (subject to Section
7.01) shall be fully protected in relying upon, an Opinion of Counsel stating
that the form and terms thereof have been established in conformity with the
provisions of this Indenture.
The Trustee shall not be required to authenticate such Debt
Securities if the issue of such Debt Securities pursuant to this Indenture will
affect the Trustee's own rights, duties or immunities under the Debt Securities
and this Indenture or otherwise in a manner that is not reasonably acceptable
to the Trustee.
SECTION 2.05. Registration of Transfer and Exchange.
(a) Debt Securities of any series may be exchanged upon
presentation thereof at the Corporate Trust Office or such
other location designated by the Company pursuant to Section
4.02 for other Debt Securities of such series of authorized
denominations, and for a like aggregate principal amount, upon
payment of a sum sufficient to cover any tax or other
governmental charge in relation thereto, all as provided in
this Section. In respect of any Debt Securities so
surrendered for exchange, the Company shall execute, the
Trustee shall
11
<PAGE> 18
authenticate and such office or agency shall deliver in
exchange therefor the Debt Security or Debt Securities of the
same series that the Securityholder making the exchange shall
be entitled to receive, bearing numbers not contemporaneously
outstanding.
(b) The Company shall keep, or cause to be kept, at the Corporate
Trust Office or such other location designated by the Company
pursuant to Section 4.02 a register or registers (herein
referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Company
shall register the Debt Securities and the transfers of Debt
Securities as in this Article provided and which at all
reasonable times shall be open for inspection by the Trustee.
The registrar for the purpose of registering Securities and
transfer of Securities as herein provided shall be appointed
as authorized by Board Resolution (the "Security Registrar").
Upon surrender for transfer of any Debt Security at the
Corporate Trust Office or such other location designated by the Company
pursuant to Section 4.02, the Company shall execute, the Trustee shall
authenticate and such office or agency shall deliver in the name of the
transferee or transferees a new Debt Security or Debt Securities of the same
series as the Debt Security presented for a like aggregate principal amount.
All Debt Securities presented or surrendered for exchange or
registration of transfer, as provided in this Section, shall be accompanied (if
so required by the Company or the Security Registrar) by a written instrument
or instruments of transfer, in form satisfactory to the Company or the Security
Registrar, duly executed by the registered holder or by such holder's duly
authorized attorney in writing.
(c) No service charge shall be made for any exchange or
registration of transfer of Debt Securities, or issue of new
Debt Securities in case of partial redemption of any series,
but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge in relation
thereto, other than exchanges pursuant to Section 2.06,
Section 3.03(b) and Section 9.04 not involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or
register the transfer of any Debt Securities during a period
beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of less than all the
Outstanding Debt Securities of the same series and ending at
the close of business on the day of such mailing, nor (ii) to
register the transfer of or exchange any Debt Securities of
any series or portions thereof called for redemption. The
provisions of this Section 2.05 are, with respect to any
Global Security, subject to Section 2.11 hereof.
12
<PAGE> 19
SECTION 2.06. Temporary Securities.
Pending the preparation of definitive Debt Securities of any
series, the Company may execute, and the Trustee shall authenticate and
deliver, temporary Debt Securities (printed, lithographed or typewritten) of
any authorized denomination. Such temporary Debt Securities shall be
substantially in the form of the definitive Debt Securities in lieu of which
they are issued, but with such omissions, insertions and variations as may be
appropriate for temporary Debt Securities, all as may be determined by the
Company. Every temporary Debt Security of any series shall be executed by the
Company and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive Debt
Securities of such series. Without unnecessary delay the Company will execute
and furnish definitive Debt Securities of such series and thereupon any or all
temporary Debt Securities of such series may be surrendered in exchange
therefor (without charge to the holders), at the Corporate Trust Office or such
location designated by the Company pursuant to Section 4.02 and such Corporate
Trust Office or location shall deliver in exchange for such temporary Debt
Securities an equal aggregate principal amount of definitive Debt Securities of
such series, unless the Company advises the Trustee to the effect that
definitive Debt Securities need not be executed and furnished until further
notice from the Company. Until so exchanged, the temporary Debt Securities of
such series shall be entitled to the same benefits under this Indenture as
definitive Debt Securities of such series authenticated and delivered
hereunder.
SECTION 2.07. Mutilated, Destroyed, Lost or Stolen Debt Securities.
In case any temporary or definitive Debt Security shall become
mutilated or be destroyed, lost or stolen, the Company (subject to the next
succeeding sentence) shall execute, and upon the Company's request, the Trustee
(subject as aforesaid) shall authenticate and deliver, a new Debt Security of
the same series, bearing a number not contemporaneously outstanding, in
exchange and substitution for the mutilated Debt Security, or in lieu of and in
substitution for the Debt Security so destroyed, lost or stolen. In every case
the applicant for a substituted Debt Security shall furnish to the Company and
the Trustee such security or indemnity as may be required by them to save each
of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company and the Trustee evidence to their
satisfaction of the destruction, loss or theft of the applicant's Debt Security
and of the ownership thereof. The Trustee may authenticate any such
substituted Debt Security and deliver the same upon the written request or
authorization of any officer of the Company. Upon the issuance of any
substituted Debt Security, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith. In case any Debt Security that has matured or is
about to mature shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Debt Security, pay or authorize
the payment of the same (without surrender thereof except in the case of a
mutilated Debt Security) if the applicant for such payment shall furnish to the
Company
13
<PAGE> 20
and the Trustee such security or indemnity as they may require to save them
harmless, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft
of such Debt Security and of the ownership thereof.
Every replacement Debt Security issued pursuant to the
provisions of this Section shall constitute an additional contractual
obligation of the Company, whether or not the mutilated, destroyed, lost or
stolen Debt Security shall be found at any time, or be enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Debt Securities of the same series duly
issued hereunder. All Debt Securities shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Debt Securities,
and shall preclude (to the extent lawful) any and all other rights or remedies,
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.
SECTION 2.08. Cancellation.
All Debt Securities surrendered for the purpose of payment,
redemption, exchange or registration of transfer shall, if surrendered to the
Company or any paying agent, be delivered to the Trustee for cancellation, or,
if surrendered to the Trustee, shall be cancelled by it, and no Debt Securities
shall be issued in lieu thereof except as expressly required or permitted by
any of the provisions of this Indenture. On request of the Company at the time
of such surrender, the Trustee shall deliver to the Company canceled Debt
Securities held by the Trustee. In the absence of such request the Trustee may
dispose of canceled Debt Securities in accordance with its standard procedures
and deliver a certificate of disposition to the Company. If the Company shall
otherwise acquire any of the Debt Securities, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Debt Securities unless and until the same are delivered to the Trustee for
cancellation.
SECTION 2.09. Benefits of Indenture.
Nothing in this Indenture or in the Debt Securities, express
or implied, shall give or be construed to give to any Person, other than the
parties hereto and the holders of the Debt Securities (and, with respect to the
provisions of Article XIV, the holders of Senior Indebtedness) any legal or
equitable right, remedy or claim under or in respect of this Indenture, or
under any covenant, condition or provision herein contained; all such
covenants, conditions and provisions being for the sole benefit of the parties
hereto and of the holders of the Debt Securities (and, with respect to the
provisions of Article XIV, the holders of Senior Indebtedness).
14
<PAGE> 21
SECTION 2.10. Authenticating Agent.
So long as any of the Debt Securities of any series remain
Outstanding, there may be an Authenticating Agent for any or all such series of
Debt Securities which the Trustee shall have the right to appoint. Said
Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Debt Securities of such series issued upon exchange, transfer or
partial redemption thereof, and Debt Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder. All references
in this Indenture to the authentication of Debt Securities by the Trustee shall
be deemed to include authentication by an Authenticating Agent for such series.
Each Authenticating Agent shall be acceptable to the Company and shall be a
corporation that has a combined capital and surplus, as most recently reported
or determined by it, sufficient under the laws of any jurisdiction under which
it is organized or in which it is doing business to conduct a trust business,
and that is otherwise authorized under such laws to conduct such business and
is subject to supervision or examination by federal or state authorities. If
at any time any Authenticating Agent shall cease to be eligible in accordance
with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The Trustee
may at any time (and upon request by the Company shall) terminate the agency of
any Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint
an eligible successor Authenticating Agent acceptable to the Company. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. Global Securities.
(a) If the Company shall establish pursuant to Section 2.01 that
the Debt Securities of a particular series are to be issued as
a Global Security or Securities, then the Company shall
execute and the Trustee shall, in accordance with Section
2.04, authenticate and deliver, a Global Security that (i)
shall represent, and shall be denominated in an amount equal
to the aggregate principal amount of, all of the Outstanding
Debt Securities of such series, (ii) shall be registered in
the name of the Depositary or its nominee, (iii) shall be
delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction and (iv) shall bear a legend
substantially to the following effect: "Except as otherwise
provided in Section 2.11 of the Indenture, this Debt Security
may be transferred, in whole but not in part, only to another
nominee of the Depositary or to a successor Depositary or to a
nominee of such successor Depositary."
15
<PAGE> 22
(b) Except as provided in clause (c), notwithstanding the
provisions of Section 2.05, the Global Security or Securities
of a series may be transferred, in whole but not in part and
in the manner provided in Section 2.05, only to another
nominee of the Depositary for such series, or to a successor
Depositary for such series selected or approved by the Company
or to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of the Debt
Securities notifies the Company that it is unwilling or unable
to continue as Depositary for such series or if at any time
the Depositary for such series shall no longer be registered
or in good standing under the Exchange Act, or other
applicable statute or regulation, at a time when the
Depositary is required to be so registered to act as such
Depositary and a successor Depositary for such series is not
appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such condition, as
the case may be, this Section 2.11 shall no longer be
applicable to the Debt Securities of such series and the
Company will execute, and subject to Section 2.05, the Trustee
will authenticate and deliver the Debt Securities of such
series in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Security or
Securities of such series in exchange for such Global Security
or Securities. In addition, the Company may at any time
determine that the Debt Securities of any series shall no
longer be represented by a Global Security or Securities and
that the provisions of this Section 2.11 shall no longer apply
to the Debt Securities of such series. In such event, the
Company will execute and, subject to Section 2.05, the
Trustee, upon receipt of an Officers' Certificate evidencing
such determination by the Company, will authenticate and
deliver the Debt Securities of such series in definitive
registered form without coupons, in authorized denominations,
and in an aggregate principal amount equal to the principal
amount of the Global Security or Securities of such series in
exchange for such Global Security or Securities. Upon the
exchange of the Global Security or Securities for such Debt
Securities in definitive registered form without coupons, in
authorized denominations, the Global Security or Securities
shall be canceled by the Trustee. Such Debt Securities in
definitive registered form issued in exchange for the Global
Security or Securities pursuant to this Section 2.11(c) shall
be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Debt
Securities to the Depositary for delivery to the Persons in
whose names such Debt Securities are so registered.
16
<PAGE> 23
ARTICLE III
REDEMPTION OF DEBT SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.01. Redemption.
The Company may redeem the Debt Securities of any series
issued hereunder on and after the dates and in accordance with the terms
established for such series pursuant to Section 2.01.
SECTION 3.02. Notice of Redemption.
(a) In case the Company shall desire to exercise such right to
redeem all or, as the case may be, a portion of the Debt
Securities of any series in accordance with the right reserved
so to do, the Company shall, or shall cause the Trustee to,
give notice of such redemption to holders of the Debt
Securities of such series to be redeemed by mailing, first
class postage prepaid, a notice of such redemption not less
than 30 days and not more than 90 days before the date fixed
for redemption of that series to such holders at their last
addresses as they shall appear upon the Security Register
unless a shorter period is specified in the Debt Securities to
be redeemed. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly
given, whether or not the registered holder receives the
notice. In any case, failure duly to give such notice to the
holder of any Debt Security of any series designated for
redemption in whole or in part, or any defect in the notice,
shall not affect the validity of the proceedings for the
redemption of any other Debt Securities of such series or any
other series. In the case of any redemption of Debt
Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Debt Securities or
elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance
with any such restriction. Each such notice of redemption
shall specify the date fixed for redemption and the redemption
price at which Debt Securities of that series are to be
redeemed, and shall state that payment of the redemption price
of such Debt Securities to be redeemed will be made at the
Corporate Trust Office, upon presentation and surrender of
such Debt Securities, that interest accrued to the date fixed
for redemption will be paid as specified in said notice, that
from and after said date interest will cease to accrue and
that the redemption is for a sinking fund, if such is the
case. If less than all the Debt Securities of a series are to
be redeemed, the notice to the holders of Debt Securities of
that series to be redeemed in whole or in part shall specify
the particular Debt Securities to be so redeemed. In case any
Debt Security is to be redeemed in part only, the notice that
relates to such Debt Security shall state the portion of the
principal amount thereof to be redeemed, and shall state that
on and after the redemption date, upon surrender of such Debt
Security, a new Debt Security
17
<PAGE> 24
or Debt Securities of such series in principal amount equal to
the unredeemed portion thereof will be issued.
(b) If less than all the Debt Securities of a series are to be
redeemed, the Company shall give the Trustee at least 45 days'
notice in advance of the date fixed for redemption as to the
aggregate principal amount of Debt Securities of the series to
be redeemed, and thereupon the Trustee shall select, by lot or
in such other manner as it shall deem appropriate and fair in
its discretion and that may provide for the selection of a
portion or portions (equal to [twenty-five U.S. dollars ($25)]
or any integral multiple thereof) of the principal amount of
such Debt Securities of a denomination larger than $25, the
Debt Securities to be redeemed and shall thereafter promptly
notify the Company in writing of the numbers of the Debt
Securities to be redeemed, in whole or in part.
The Company may, if and whenever it shall so elect, by
delivery of instructions signed on its behalf by its President
or any Vice President, instruct the Trustee or any paying
agent to call all or any part of the Debt Securities of a
particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such
notice to be in the name of the Company or its own name as the
Trustee or such paying agent may deem advisable. In any case
in which notice of redemption is to be given by the Trustee or
any such paying agent, the Company shall deliver or cause to
be delivered to, or permit to remain with, the Trustee or such
paying agent, as the case may be, such Security Register,
transfer books or other records, or suitable copies or
extracts therefrom, sufficient to enable the Trustee or such
paying agent to give any notice by mail that may be required
under the provisions of this Section.
SECTION 3.03. Payment Upon Redemption.
(a) If the giving of notice of redemption shall have been
completed as above provided, the Debt Securities or portions
of Debt Securities of the series to be redeemed specified in
such notice shall become due and payable on the date and at
the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for
redemption, and interest on such Debt Securities or portions
of Debt Securities shall cease to accrue on and after the date
fixed for redemption, unless the Company shall default in the
payment of such redemption price and accrued interest with
respect to any such Debt Security or portion thereof. On
presentation and surrender of such Debt Securities on or after
the date fixed for redemption at the place of payment
specified in the notice, said Debt Securities shall be paid
and redeemed at the applicable redemption price for such
series, together with interest accrued thereon to the date
fixed for redemption (but if the date fixed
18
<PAGE> 25
for redemption is an Interest Payment Date, the interest
installment payable on such date shall be payable to the
registered holder at the close of business on the applicable
record date pursuant to Section 2.03).
(b) Upon presentation of any Debt Security of such series that is
to be redeemed in part only, the Company shall execute and the
Trustee shall authenticate and the office or agency where the
Debt Security is presented shall deliver to the holder
thereof, at the expense of the Company, a new Debt Security or
Debt Securities of the same series, of authorized
denominations in principal amount equal to the unredeemed
portion of the Debt Security so presented.
SECTION 3.04. Sinking Fund.
The provisions of Sections 3.04, 3.05 and 3.06 shall be
applicable to any sinking fund for the retirement of Debt Securities of a
series, except as otherwise specified as contemplated by Section 2.01 for Debt
Securities of such series.
The minimum amount of any sinking fund payment provided for by
the terms of Debt Securities of any series is herein referred to as a
"mandatory sinking fund payment," and any payment in excess of such minimum
amount provided for by the terms of Debt Securities of any series is herein
referred to as an "optional sinking fund payment." If provided for by the
terms of Debt Securities of any series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 3.05. Each sinking
fund payment shall be applied to the redemption of Debt Securities of any
series as provided for by the terms of Debt Securities of such series.
SECTION 3.05. Satisfaction of Sinking Fund Payments with Debt Securities.
The Company (i) may deliver Outstanding Debt Securities of a
series (other than any Debt Securities previously called for redemption) and
(ii) may apply as a credit Debt Securities of a series that have been redeemed
either at the election of the Company pursuant to the terms of such Debt
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Debt Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Debt Securities of such series required to be made pursuant to the terms of
such Debt Securities as provided for by the terms of such series, provided that
such Debt Securities have not been previously so credited. Such Debt
Securities shall be received and credited for such purpose by the Trustee at
the redemption price specified in such Debt Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
19
<PAGE> 26
SECTION 3.06. Redemption of Debt Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date
for any series of Debt Securities, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of the series, the portion
thereof, if any, that is to be satisfied by delivering and crediting Debt
Securities of that series pursuant to Section 3.05 and the basis for such
credit and will, together with such Officers' Certificate, deliver to the
Trustee any Debt Securities to be so delivered. Not less than 30 days before
each such sinking fund payment date, the Trustee shall select the Debt
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 3.02 and cause notice of the redemption thereof to be
given in the name of and at the expense of the Company in the manner provided
in Section 3.02. Such notice having been duly given, the redemption of such
Debt Securities shall be made upon the terms and in the manner stated in
Section 3.03.
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay or cause to be paid
the principal of (and premium, if any) and interest on the Debt Securities of
that series at the time and place and in the manner provided herein and
established with respect to such Debt Securities.
SECTION 4.02. Maintenance of Office or Agency.
So long as any series of the Debt Securities remain
Outstanding, the Company agrees to maintain an office or agency with respect to
each such series and at such other location or locations as may be designated
as provided in this Section 4.02, where (i) Debt Securities of that series may
be presented for payment, (ii) Debt Securities of that series may be presented
as hereinabove authorized for registration of transfer and exchange, and (iii)
notices and demands to or upon the Company in respect of the Debt Securities of
that series and this Indenture may be given or served, such designation to
continue with respect to such office or agency until the Company shall, by
written notice signed by its President or a Vice President and delivered to the
trustee, designate some other office or agency for such purposes or any of
them. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, notices and demands may be made or served at the Corporate
Trust Office of the Trustee, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, notices and demands.
20
<PAGE> 27
SECTION 4.03. Paying Agents.
(a) If the Company shall appoint one or more paying agents for all
or any series of the Debt Securities, other than the Trustee,
the Company will cause each such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall
agree with the Trustee, subject to the provisions of this
Section:
(1) that it will hold all sums held by it as such agent
for the payment of the principal of (and premium, if
any) or interest on the Debt Securities of that
series (whether such sums have been paid to it by the
Company or by any other obligor of such Debt
Securities) in trust for the benefit of the Persons
entitled thereto;
(2) that it will give the Trustee notice of any failure
by the Company to make any payment of the principal
of (and premium, if any) or interest on the Debt
Securities of that series when the same shall be due
and payable;
(3) that it will, at any time during the continuance of
any failure referred to in the preceding paragraph
(a)(2) above, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so
held in trust by such paying agent; and
(4) that it will perform all other duties of paying agent
as set forth in this Indenture.
(b) If the Company shall act as its own paying agent with respect
to any series of the Debt Securities, it will on or before
each due date of the principal of (and premium, if any) or
interest on Debt Securities of that series, set aside,
segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay such principal (and
premium, if any) or interest so becoming due on Debt
Securities of that series until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of such action, or any
failure by it to take such action. Whenever the Company shall
have one or more paying agents for any series of Debt
Securities, it will, prior to each due date of the principal
of (and premium, if any) or interest on any Debt Securities of
that series, deposit with the paying agent a sum sufficient to
pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of
the Persons entitled to such principal, premium or interest,
and (unless such paying agent is the Trustee) the Company will
promptly notify the Trustee of this action or failure so to
act.
21
<PAGE> 28
Notwithstanding anything in this Section to the contrary, (i)
the agreement to hold sums in trust as provided in this Section is subject to
the provisions of Section 11.05, and (ii) the Company may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or direct any paying agent to pay, to the Trustee all
sums held in trust by the Company or such paying agent, such sums to be held by
the Trustee upon the same terms and conditions as those upon which such sums
were held by the Company or such paying agent; and, upon such payment by any
paying agent to the Trustee, such paying agent shall be released from all
further liability with respect to such money.
SECTION 4.04. Appointment to Fill Vacancy in Office of Trustee.
The Company, whenever necessary to avoid or fill a vacancy in
the office of Trustee, will appoint, in the manner provided in Section 7.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 4.05. Compliance with Consolidation Provisions.
The Company will not, while any of the Debt Securities remain Outstanding,
consolidate with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other company unless the provisions of
Article X are complied with.
SECTION 4.06. Limitation on Dividends.
(a) If Debt Securities are issued to an Illinois Power Trust or a
trustee of such trust in connection with the issuance of Trust
Securities by such Illinois Power Trust and (i) there shall
have occurred any event that would constitute an Event of
Default or (ii) the Company shall be in default with respect
to its payment or any obligations under the Preferred
Securities Guarantee or Common Securities Guarantee relating
to such Trust Securities, then (x) the Company shall not
declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase or make a liquidation payment
with respect to, any of its capital stock, provided, however,
the Company may declare and pay a stock dividend where the
dividend stock is the same stock as that on which the dividend
is being paid, (y) the Company shall not make any payment of
interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including
guarantees) issued by the Company which rank pari passu with
or junior to such Debt Securities and (z) the Company shall
not make guarantee payments with respect to the foregoing
(other than pursuant to the Preferred Securities Guarantee).
(b) If Debt Securities are issued to an Illinois Power Trust or a
trustee of such trust in connection with the issuance of Trust
Securities by such Illinois Power Trust and the Company shall
have given notice of its election to defer
22
<PAGE> 29
payments of interest on such Debt Securities by extending the
interest payment period as provided in any indenture
supplemental hereto and such period, or any extension thereof,
shall be continuing, then (i) the Company shall not declare or
pay any dividend, or make any distributions with respect to,
or redeem, purchase or make a liquidation payment with respect
to, any of its capital stock, provided, however, the Company
may declare and pay a stock dividend where the dividend stock
is the same stock as that on which the dividend is being paid,
(ii) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or
redeem any debt securities (including guarantees) issued by
the Company which rank pari passu with or junior to such Debt
Securities and (iii) the Company shall not make any guarantee
payments with respect to the foregoing (other than pursuant to
the Preferred Securities Guarantee).
SECTION 4.07. Covenants as to Illinois Power Trusts.
In the event Debt Securities are issued to an Illinois Power
Trust in connection with the issuance of Trust Securities by such trust, for so
long as such Trust Securities remain outstanding, the Company will (i) maintain
100% direct or indirect ownership of the Common Securities of such trust;
provided, however, that any permitted successor of the Company under this
Indenture may succeed to the Company's ownership of the Common Securities, (ii)
not cause, as sponsor of such trust, or permit, as holder of Common Securities
of such trust, the dissolution, winding-up or termination of such trust, except
in connection with a distribution of Debt Securities as provided in the
Declaration and in connection with certain mergers, consolidations or
amalgamations permitted by the Declaration and (iii) use its reasonable efforts
to cause such trust (a) to remain a business trust, except in connection with a
distribution of Debt Securities, the redemption of all of the Trust Securities
of such Illinois Power Trust or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of such Illinois Power
Trust, and (b) to otherwise continue to be classified for United States federal
income tax purposes as a grantor trust.
SECTION 4.08. Corporate Existence.
The Company will, subject to the provisions of Article X, at
all times maintain its corporate existence and right to carry on business and
will duly procure all renewals and extensions thereof, and, to the extent
necessary or desirable in the operation of its business, will use its best
efforts to maintain, preserve and renew all of its rights, powers, privileges
and franchises.
23
<PAGE> 30
ARTICLE V
SECURITYHOLDERS, LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 5.01. Company to Furnish Trustee Names and Addresses of
Securityholders.
The Company will furnish or cause to be furnished to the
Trustee (a) on a quarterly basis on each regular record date (as defined in
Section 2.03) a list, in such form as the Trustee may reasonably require, of
the names and addresses of the holders of each series of Debt Securities as of
such regular record date, provided that the Company shall not be obligated to
furnish or cause to furnish such list at any time that the list shall not
differ in any respect from the most recent list furnished to the Trustee by the
Company and (b) at such other times as the Trustee may request in writing
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished; provided, however, that in either case, no such list
need be furnished for any series for which the Trustee shall be the Security
Registrar.
SECTION 5.02. Preservation Of Information; Communications With
Securityholders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and
addresses of the holders of Debt Securities contained in the
most recent list furnished to it as provided in Section 5.01
and as to the names and addresses of holders of Debt
Securities received by the Trustee in its capacity as Security
Registrar (if acting in such capacity).
(b) The Trustee may destroy any list furnished to it as provided
in Section 5.01 upon receipt of a new list so furnished.
(c) Securityholders may communicate as provided in Section 312(b)
of the Trust Indenture Act with other Securityholders with
respect to their rights under this Indenture or under the Debt
Securities.
SECTION 5.03. Reports By the Company.
(a) The Company covenants and agrees to file with the Trustee,
within 15 days after the Company is required to file the same
with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the
Company may be required to file with the Commission pursuant
to Section 13 or Section 15(d) of the Exchange Act; or, if the
Company is not required to file information,
24
<PAGE> 31
documents or reports pursuant to either of such sections, then
to file with the Trustee and the Commission, in accordance
with the rules and regulations prescribed from time to time by
the Commission, such of the supplementary and periodic
information, documents and reports that may be required
pursuant to Section 13 of the Exchange Act, in respect of a
security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules
and regulations.
(b) The Company covenants and agrees to file with the Trustee and
the Commission, in accordance with the rules and regulations
prescribed from to time by the Commission, such additional
information, documents and reports with respect to compliance
by the Company with the conditions and covenants provided for
in this Indenture as may be required from time to time by such
rules and regulations.
(c) The Company covenants and agrees to transmit by mail, first
class postage prepaid, or reputable overnight delivery service
that provides for evidence of receipt, to the Securityholders,
as their names and addresses appear upon the Security
Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to
subsections (a) and (b) of this Section as may be required by
rules and regulations prescribed from time to time by the
Commission.
SECTION 5.04. Reports by the Trustee.
(a) On or before July 15 in each year in which any of the Debt
Securities are Outstanding, the Trustee shall transmit by
mail, first class postage prepaid, to the Securityholders, as
their names and addresses appear upon the Security Register, a
brief report dated as of the preceding May 15, if and to the
extent required under Section 313(a) of the Trust Indenture
Act.
(b) The Trustee shall comply with Sections 313(b) and 313(c) of
the Trust Indenture Act.
(c) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with
the Company, with each stock exchange upon which any Debt
Securities are listed (if so listed) and also with the
Commission. The Company agrees to notify the Trustee when any
Debt Securities become listed on any stock exchange.
25
<PAGE> 32
ARTICLE VI
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.01. Events of Default.
(a) Whenever used herein with respect to Debt Securities of a
particular series, "Event of Default" means any one or more of
the following events that has occurred and is continuing:
(1) the Company defaults in the payment of any
installment of interest upon any of the Debt
Securities of that series, as and when the same shall
become due and payable, and continuance of such
default for a period of 30 days; provided, however ,
that a valid extension of an interest payment period
by the Company in accordance with the terms of any
indenture supplemental hereto, shall not constitute a
default in the payment of interest for this purpose;
(2) the Company defaults in the payment of the principal
of (or premium, if any, on) any of the Debt
Securities of that series as and when the same shall
become due and payable whether at maturity, upon
redemption, by declaration or otherwise, or in any
payment required by any sinking or analogous fund
established with respect to that series;
(3) the Company fails to observe or perform any other of
its covenants or agreements with respect to that
series contained in this Indenture or otherwise
established with respect to that series of Debt
Securities pursuant to Section 2.01 for a period of
90 days after the date on which written notice of
such failure, requiring the same to be remedied and
stating that such notice is a "Notice of Default"
hereunder, shall have been given to the Company by
the Trustee, by registered or certified mail, or to
the Company and the Trustee by the holders of at
least 25% in principal amount of the Debt Securities
of that series at the time Outstanding;
(4) the Company, pursuant to or within the meaning of any
Bankruptcy Law, (i) commences a voluntary case, (ii)
consents to the entry of an order for relief against
it in an involuntary case, (iii) consents to the
appointment of a Custodian of it or for all or
substantially all of its property or (iv) makes a
general assignment for the benefit of its creditors;
26
<PAGE> 33
(5) a court of competent jurisdiction enters an order
under any Bankruptcy Law that (i) is for relief
against the Company in an involuntary case, (ii)
appoints a Custodian of the Company for all or
substantially all of its property, or (iii) orders
the liquidation of the Company, and the order or
decree remains unstayed and in effect for 90 days; or
(6) in the event Debt Securities are issued to an
Illinois Power Trust or other trust of the Company in
connection with the issuance of Trust Securities by
such trust, such trust shall have voluntarily or
involuntarily dissolved, wound-up its business or
otherwise terminated its existence except in
connection with (i) the distribution of Debt
Securities to holders of Trust Securities in
liquidation of their interests in such trust, (ii)
the redemption of all outstanding Trust Securities of
such trust, and (iii) mergers, consolidations or
amalgamations, each as permitted by the Declaration
of such trust.
(b) If an Event of Default described in clauses 1, 2, 3 or 6 of
this Section 6.01 with respect to Debt Securities of any
series at the time outstanding occurs and is continuing,
unless the principal of all the Debt Securities of that series
shall have already become due and payable, either the Trustee
or the holders of not less than 25% in aggregate principal
amount of the Debt Securities of that series then Outstanding
hereunder, by notice in writing to the Company (and to the
Trustee, if given by such Securityholders), may declare the
principal of all the Debt Securities of that series to be due
and payable immediately, and upon any such declaration the
same shall become and be immediately due and payable,
notwithstanding anything contained in this Indenture or in the
Debt Securities of that series or established with respect to
that series pursuant to Section 2.01 to the contrary. If an
Event of Default specified in clause (4) or (5) of this
Section 6.01 occurs or is continuing, then the principal
amount of all the Debt Securities shall ipso facto become and
be immediately due and payable without any declaration or
other act on the part of the Trustee or any Securityholder.
At any time after the principal of the Debt Securities of that
series shall have been so declared due and payable, and before
any judgment or decree for the payment of the moneys due shall
have been obtained or entered as hereinafter provided, the
holders of 66 2/3% in aggregate principal amount of the Debt
Securities of that series then Outstanding hereunder, by
written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if: (i) the
Company has paid or deposited with the Trustee a sum
sufficient to pay all matured installments of interest upon
all the Debt Securities of that series and the principal of
(and premium, if any, on) any and all Debt Securities of that
series that shall have become due otherwise than by
acceleration (with interest upon such principal and
27
<PAGE> 34
premium, if any, and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of
interest, at the rate per annum expressed in the Debt
Securities of that series to the date of such payment or
deposit) and the amount payable to the Trustee under Section
7.06, and (ii) any and all Events of Default with respect to
such series, other than the nonpayment of principal on Debt
Securities of that series that shall not have become due by
their terms, shall have been remedied or waived as provided in
Section 6.06. No such rescission and annulment shall extend
to or shall affect any subsequent default or impair any right
consequent thereon.
(c) In case the Trustee shall have proceeded to enforce any right
with respect to Debt Securities of that series under this
Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company and the
Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and
powers of the Company and the Trustee shall continue as though
no such proceedings had been taken.
SECTION 6.02. Collection of Indebtedness and Suits for Enforcement by
Trustee.
(a) The Company covenants that (1) in case it shall default in the
payment of any installment of interest on any of the Debt
Securities of a series, or any payment required by any sinking
or analogous fund established with respect to that series as
and when the same shall have become due and payable, and such
default shall have continued for a period of 90 days, or (2)
in case it shall default in the payment of the principal of
(or premium, if any, on) any of the Debt Securities of a
series when the same shall have become due and payable,
whether upon maturity of the Debt Securities of a series or
upon redemption or upon declaration or otherwise, then, upon
demand of the Trustee, the Company will pay to the Trustee,
for the benefit of the holders of the Debt Securities of that
series, the whole amount that then shall have become due and
payable on all such Debt Securities for principal (and
premium, if any) or interest, or both, as the case may be,
with interest upon the overdue principal (and premium, if any)
and (to the extent that payment of such interest is
enforceable under applicable law and, if the Debt Securities
are held by an Illinois Power Trust, without duplication of
any other amounts paid by such trust in respect thereof) upon
overdue installments of interest at the rate per annum
expressed in the Debt Securities of that series; and, in
addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection and the amount
payable to the Trustee under Section 7.06.
28
<PAGE> 35
(b) If the Company shall fail to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute
any action or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute
any such action or proceeding to judgment or final decree, and
may enforce any such judgment or final decree against the
Company or other obligor upon the Debt Securities of that
series and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of
the Company or other obligor upon the Debt Securities of that
series, wherever situated.
(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement,
composition or judicial proceedings affecting the Company or
its creditors or property, the Trustee shall have power to
intervene in such proceedings and take any action therein that
may be permitted by the court and shall (except as may be
otherwise provided by law) be entitled to file such proofs of
claim and other papers and documents as may be necessary or
advisable in order to have the claims of the Trustee and of
the holders of Debt Securities of such series allowed for the
entire amount due and payable by the Company under the
Indenture at the date of institution of such proceedings and
for any additional amount that may become due and payable by
the Company after such date, and to collect and receive any
moneys or other property payable or deliverable on any such
claim, and to distribute the same after the deduction of the
amount payable to the Trustee under Section 7.06; and any
receiver, assignee or trustee in bankruptcy or reorganization
is hereby authorized by each of the holders of Debt Securities
of such series to make such payments to the Trustee, and, in
the event that the Trustee shall consent to the making of such
payments directly to such Securityholders, to pay to the
Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect
to Debt Securities of that series, may be enforced by the
Trustee without the possession of any of such Debt Securities,
or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted
by the Trustee shall be brought in its own name as trustee of
an express trust, and any recovery of judgment shall, after
provision for payment to the Trustee of any amounts due under
Section 7.06, be for the ratable benefit of the holders of the
Debt Securities of such series.
In case of an Event of Default, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such
29
<PAGE> 36
rights, either at law or in equity or in bankruptcy or otherwise, whether for
the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this Indenture, or
to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
Nothing contained herein shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Debt Securities of that series or the rights of any
holder thereof or to authorize the Trustee to vote in respect of the claim of
any Securityholder in any such proceeding.
SECTION 6.03. Application of Moneys Collected.
Any moneys collected by the Trustee pursuant to this Article
with respect to a particular series of Debt Securities shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal (or premium, if any) or
interest, upon presentation of the Debt Securities of that series, and notation
thereon of the payment, if only partially paid, and upon surrender thereof if
fully paid:
FIRST: To the payment of costs and expenses of collection and
of all amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of all Senior Indebtedness of the
Company if and to the extent required by Article XIV; and
THIRD: To the payment of the amounts then due and unpaid upon
Debt Debt Securities of such series for principal (and premium, if any) and
interest, in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according to
the amounts due and payable on such Debt Securities for principal (and premium,
if any) and interest, respectively.
SECTION 6.04. Limitation on Suits.
No holder of any Security of any series shall have any right
by virtue or by availing of any provision of this Indenture to institute any
suit, action or proceeding in equity or at law upon or under or with respect to
this Indenture or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless (i) such holder previously shall have given to
the Trustee written notice of an Event of Default and of the continuance
thereof with respect to the Debt Securities of such series specifying such
Event of Default, as hereinbefore provided; (ii) the holders of not less than
25% in aggregate principal amount of the Debt Securities of such series then
Outstanding shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as trustee hereunder; (iii) such
holder or holders shall have offered to the Trustee such
30
<PAGE> 37
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby; (iv) the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
failed to institute any such action, suit or proceeding; and (v) during such 60
day period, the holders of not less than 66 2/3% in principal amount of the
Debt Securities of that series do not give the Trustee a direction inconsistent
with the request.
Notwithstanding anything contained herein to the contrary, any
other provisions of this Indenture, the right of any holder of any Security to
receive payment of the principal of (and premium, if any) and interest on such
Security, as therein provided, on or after the respective due dates expressed
in such Security (or in the case of redemption, on the redemption date), or to
institute suit for the enforcement of any such payment on or after such
respective dates or redemption date, shall not be impaired or affected without
the consent of such holder, and by accepting a Security hereunder it is
expressly understood, intended and covenanted by the taker and holder of every
Security of such series with every other such taker and holder and the Trustee,
that no one or more holders of Debt Securities of such series shall have any
right in any manner whatsoever by virtue or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of the holders of any
other of such Debt Securities, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Debt Securities of such series. For the
protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
SECTION 6.05. Rights and Remedies Cumulative; Delay or Omission Not Waiver.
(a) Except as otherwise provided in Section 2.07, all powers and
remedies given by this Article to the Trustee or to the
Securityholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any other powers and
remedies available to the Trustee or the holders of the Debt
Securities, by judicial proceedings or otherwise, to enforce
the performance or observance of the covenants and agreements
contained in this Indenture or otherwise established with
respect to such Debt Securities.
(b) No delay or omission of the Trustee or of any holder of any of
the Debt Securities to exercise any right or power accruing
upon any Event of Default occurring and continuing as
aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of
Section 6.04, every power and remedy given by this Article or
by law to the Trustee or the Securityholders may be exercised
from time to time, and as often as shall be deemed expedient,
by the Trustee or by the Securityholders.
31
<PAGE> 38
SECTION 6.06. Control by Securityholders.
The holders of not less than 66 2/3% in aggregate principal
amount of the Securities of any series at the time Outstanding, determined in
accordance with Section 8.04, shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee with respect to such
series; provided, however, that such direction shall not be in conflict with
any rule of law or with this Indenture or be unduly prejudicial to the rights
of holders of Debt Securities of any other series at the time Outstanding
determined in accordance with Section 8.04. Subject to the provisions of
Section 7.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceeding so directed would
involve the Trustee in personal liability. The holders of not less than 66
2/3% in aggregate principal amount of the Debt Securities of any series at the
time Outstanding affected thereby, determined in accordance with Section 8.04,
may on behalf of the holders of all of the Debt Securities of such series waive
any past default in the performance of any of the covenants contained herein or
established pursuant to Section 2.01 with respect to such series and its
consequences, except (i) a default in the payment of the principal of, or
premium, if any, or interest on, any of the Debt Securities of that series as
and when the same shall become due by the terms of such Debt Securities
otherwise than by acceleration (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal and any
premium has been deposited with the Trustee (in accordance with Section
6.01(c)) or (ii) a default in the covenants contained in Section 4.06(b). Upon
any such waiver, the default covered thereby shall be deemed to be cured for
all purposes of this Indenture and the Company, the Trustee and the holders of
the Debt Securities of such series shall be restored to their former positions
and rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 6.07. Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any
Debt Securities by such holder's acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder, or
group of Securityholders, holding more than 10% in aggregate principal amount
of the Outstanding Debt Securities of any series, or to any suit instituted by
any Securityholder for the enforcement of the payment of the principal of (or
premium, if any)
32
<PAGE> 39
or interest on any Security of such series, on or after the respective due
dates expressed in such Security or established pursuant to this Indenture.
ARTICLE VII
CONCERNING THE TRUSTEE
SECTION 7.01. Certain Duties and Responsibilities of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default
with respect to the Debt Securities of a series and after the
curing of all Events of Default with respect to the Debt
Securities of that series that may have occurred, shall
undertake to perform with respect to the Debt Securities of
such series such duties and only such duties as are
specifically set forth in this Indenture, and no implied
covenants shall be read into this Indenture against the
Trustee. In case an Event of Default with respect to the Debt
Securities of a series has occurred (that has not been cured
or waived), the Trustee shall exercise with respect to Debt
Securities of that series such of the rights and powers vested
in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
(b) no provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct,
except that:
(1) prior to the occurrence of an Event of Default with
respect to the Debt Securities of a series and after
the curing or waiving of all such Events of Default
with respect to that series that may have occurred:
(A) the duties and obligations of the Trustee
shall, with respect to the Debt Securities of
such series, be determined solely by the
express provisions of this Indenture, and the
Trustee shall not be liable with respect to
the Debt Securities of such series except for
the performance of such duties and
obligations as are specifically set forth in
this Indenture, and no implied covenants or
obligations shall be read into this Indenture
against the Trustee; and
(B) in the absence of bad faith on the part of
the Trustee, the Trustee may with respect to
the Debt Securities of such series
conclusively rely, as to the truth of the
statements and the correctness of the
opinions expressed therein, upon any
certificates or opinions furnished to the
Trustee and conforming to the requirements of
this Indenture; but in the case of any such
33
<PAGE> 40
certificates or opinions that by any
provision hereof are specifically required to
be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to
determine whether or not they conform to the
requirement of this Indenture;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer
or Responsible Officers of the Trustee, unless it
shall be proved that the Trustee, was negligent in
ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good
faith in accordance with the direction of the holders
of not less than a majority in principal amount of
the Debt Securities of any series at the time
Outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power
conferred upon the Trustee under this Indenture with
respect to the Debt Securities of that series; and
(4) None of the provisions contained in this Indenture
shall require the Trustee to expend or risk its own
funds or otherwise incur personal financial liability
in the performance of any of its duties or in the
exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of
such funds or liability is not reasonably assured to
it under the terms of this Indenture or adequate
indemnity against such risk is not reasonably assured
to it.
SECTION 7.02. Certain Rights of Trustee.
Except as otherwise provided in Section 7.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, security or other paper or
document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board
Resolution or Officers'(unless other evidence in respect
thereof is specifically prescribed herein);
(c) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and
complete authorization and
34
<PAGE> 41
protection in respect of any action taken or suffered or
omitted hereunder in good faith and in reliance thereon;
(d) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Securityholders,
pursuant to the provisions of this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby; nothing
contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default with
respect to a series of the Debt Securities (that has not been
cured or waived) to exercise with respect to Debt Securities
of that series such of the rights and powers vested in it by
this Indenture, and to use the same degree of care and skill
in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs;
(e) the Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to
be authorized or within the discretion or rights or powers
conferred upon it by this Indenture;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, security, or other papers or
documents, unless requested in writing so to do by the holders
of not less than a majority in principal amount of the
Outstanding Debt Securities of the particular series affected
thereby (determined as provided in Section 8.04); provided,
however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee
by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such
costs, expenses or liabilities as a condition to so
proceeding. The reasonable expense of every such examination
shall be paid by the Company or, if paid by the Trustee, shall
be repaid by the Company upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder;
(h) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder,
the Trustee (unless other evidence be herein
35
<PAGE> 42
specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate; and
(i) the Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably
assured to it.
SECTION 7.03. Trustee Not Responsible for Recitals or Issuance of Debt
Securities.
(a) The recitals contained herein and in the Debt Securities shall
be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debt Securities.
(c) The Trustee shall not be accountable for the use or
application by the Company of any of the Debt Securities or of
the proceeds of such Debt Securities, or for the use or
application of any moneys paid over by the Trustee in
accordance with any provision of this Indenture or established
pursuant to Section 2.01, or for the use or application of any
moneys received by any paying agent other than the Trustee.
SECTION 7.04. May Hold Debt Securities.
The Trustee or any paying agent or Security Registrar, in its
individual or any other capacity, may become the owner or pledgee of Debt
Securities with the same rights it would have if it were not Trustee, paying
agent or Security Registrar.
SECTION 7.05. Moneys Held in Trust.
Subject to the provisions of Section 11.05, all moneys
received by the Trustee shall, until used or applied as herein provided, be
held in trust for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any moneys received by it hereunder
except such as it may agree with the Company to pay thereon.
SECTION 7.06. Compensation and Reimbursement.
(a) The Company covenants and agrees to pay to the Trustee, and
the Trustee shall be entitled to, such reasonable compensation
(which shall not be limited by any provision of law in regard
to the compensation of a trustee of an
36
<PAGE> 43
express trust), as the Company and the Trustee may from time
to time agree in writing, for all services rendered by it in
the execution of the trusts hereby created and in the exercise
and performance of any of the powers and duties hereunder of
the Trustee, and, except as otherwise expressly provided
herein, the Company will pay or reimburse the Trustee upon its
request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of
its counsel and of all Persons not regularly in its employ)
except any such expense, disbursement or advance as may arise
from its negligence or bad faith. The Company also covenants
to indemnify the Trustee (and its officers, agents, directors
and employees) for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith
on the part of the Trustee and arising out of or in connection
with the acceptance or administration of this trust, including
the costs and expenses of defending itself against any claim
of liability in the premises.
(b) The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse
the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder and shall survive
the satisfaction and discharge of this Indenture. Such
additional indebtedness shall be secured by a lien prior to
that of the Debt Securities upon all property and funds held
or collected by the Trustee as such, except funds held in
trust for the benefit of the holders of particular Debt
Securities.
SECTION 7.07. Reliance on Officers' Certificate.
Except as otherwise provided in Section 7.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking
or suffering or omitting to take any action hereunder, such matter (unless
other evidence in respect thereof be herein specifically prescribed) may, in
the absence of negligence or bad faith on the part of the Trustee, be deemed to
be conclusively proved and established by an Officers' Certificate delivered to
the Trustee and such certificate, in the absence of negligence or bad faith on
the part of the Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted to be taken by it under the provisions of this
Indenture upon the faith thereof.
SECTION 7.08. Qualification; Conflicting Interests.
If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee
and the Company shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
37
<PAGE> 44
SECTION 7.09. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee with respect to the Debt
Securities issued hereunder which shall at all times be a corporation organized
and doing business under the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or a corporation or other
Person permitted to act as trustee by the Commission, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least fifty million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. The Company may not, nor may any Person directly or
indirectly controlling, controlled by, or under common control with the
Company, serve as Trustee. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 7.10.
SECTION 7.10. Resignation and Removal; Appointment of Successor.
(a) The Trustee or any successor hereafter appointed, may at any
time resign with respect to the Debt Securities of one or more
series by giving written notice thereof to the Company and by
transmitting notice of resignation by mail, first class
postage prepaid, to the Securityholders of such series, as
their names and addresses appear upon the Security Register.
Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee with respect to Debt
Securities of such series by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 30
days after the mailing of such notice of resignation, the
resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee with
respect to Debt Securities of such series, or any
Securityholder of that series who has been a bona fide holder
of a Debt Security or Debt Securities for at least six months
may, subject to the provisions of Section 6.08, on behalf of
himself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such court
may thereupon after such notice, if any, as it may deem proper
and prescribe, appoint a successor trustee.
(b) In case at any time any one of the following shall occur:
38
<PAGE> 45
(1) the Trustee shall fail to comply with the provisions
of subsection (a) of Section 7.08 after written
request therefor by the Company or by any
Securityholder who has been a bona fide holder of a
Debt Security or Debt Securities for at least six
months; or
(2) the Trustee shall cease to be eligible in accordance
with the provisions of Section 7.09 and shall fail to
resign after written request therefor by the Company
or by any such Securityholder; or
(3) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or
commence a voluntary bankruptcy proceeding, or a
receiver of the Trustee or of its property shall be
appointed or consented to, or any public officer
shall take charge or control of the Trustee or of its
property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in
any such case, the Company may remove the Trustee
with respect to all Debt Securities and appoint a
successor trustee by written instrument, in
duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to
the successor trustee, or, subject to the provisions
of Section 6.08, unless the Trustee's duty to resign
is stayed as provided herein, any Securityholder who
has been a bona fide holder of a Debt Security or
Debt Securities for at least six months may, on
behalf of that holder and all others similarly
situated, petition any court of competent
jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may
thereupon after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint
a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debt Securities of any series at the time Outstanding may at
any time remove the Trustee with respect to such series by so
notifying the Trustee and the Company and may appoint a
successor Trustee for such series with the consent of the
Company.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Debt Securities of a
series pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the
successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section may
be appointed with respect to the Debt Securities of one or
more series or all of such series, and at any time there shall
be only one Trustee with respect to the Debt Securities of any
particular series.
39
<PAGE> 46
SECTION 7.11. Acceptance of Appointment By Successor.
(a) In case of the appointment hereunder of a successor trustee
with respect to all Debt Securities, every such successor
trustee so appointed shall execute, acknowledge and deliver to
the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and
such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor trustee all the
rights, powers, and trusts of the retiring Trustee and shall
duly assign, transfer and deliver to such successor trustee
all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor trustee
with respect to the Debt Securities of one or more (but not
all) series, the Company, the retiring Trustee and each
successor trustee with respect to the Debt Securities of one
or more series shall execute and deliver an indenture
supplemental hereto wherein each successor trustee shall
accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor trustee all the
rights, powers, trusts and duties of theretiring Trustee with
respect to the Debt Securities of that or those series to
which the appointment of such successor trustee relates, (2)
shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Debt
Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder
by more than one Trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such
Trustees co-trustees of the same trust, that each such Trustee
shall be trustee of a trust or trusts hereunder separate and
apart from any trust or trusts hereunder administered by any
other such Trustee and that no Trustee shall be responsible
for any act or failure to act on the part of any other Trustee
hereunder; and upon the execution and delivery of such
supplemental indenture, the resignation or removal of the
retiring Trustee shall become effective to the extent provided
therein, such retiring Trustee shall with respect to the Debt
Securities of that or those series to which the appointment of
such successor trustee relates have no further responsibility
for the exercise of rights and powers or for the performance
of the duties and obligations vested in the Trustee under this
Indenture, and each such successor trustee,
40
<PAGE> 47
without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Debt Securities of that
or those series to which the appointment of such successor
trustee relates; but, on request of the Company or any
successor trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor trustee, to the extent
contemplated by such supplemental indenture, the property and
money held by such retiring Trustee hereunder with respect to
the Debt Securities of that or those series to which the
appointment of such successor trustee relates.
(c) Upon request of any such successor trustee, the Company shall
execute any and all instruments for more fully and certainly
vesting in and confirming to such successor trustee all such
rights, powers and trusts referred to in paragraph (a) or (b)
of this Section, as the case may be.
(d) No successor trustee shall accept its appointment unless at
the time of such acceptance such successor trustee shall be
qualified and eligible under this Article.
(e) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Company shall transmit notice of
the succession of such trustee hereunder by mail, first class
postage prepaid, to the Securityholders, as their names and
addresses appear upon the Security Register. If the Company
fails to transmit such notice within ten days after acceptance
of appointment by the successor trustee, the successor
trustee shall cause such notice to be transmitted at the
expense of the Company.
SECTION 7.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be qualified under the provisions of Section 7.08 and
eligible under the provisions of Section 7.09, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding. In case any Debt Securities
shall have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Debt
Securities so authenticated with the same effect as if such successor trustee
had itself authenticated such Debt Securities.
41
<PAGE> 48
SECTION 7.13. Preferential Collection of Claims Against the Company.
The Trustee shall comply with Section 311(a) of the Trust
Indenture Act, excluding any creditor relationship described in Section 311(b)
of the Trust Indenture Act. A Trustee who has resigned or been removed shall
be subject to Section 311(a) of the Trust Indenture Act to the extent included
therein.
ARTICLE VIII
CONCERNING THE SECURITYHOLDERS
SECTION 8.01. Evidence of Action by Securityholders.
Whenever in this Indenture it is provided that the holders of
a majority or specified percentage in aggregate principal amount of the Debt
Securities of a particular series may take any action (including the making of
any demand or request, the giving of any notice, consent or waiver or the
taking of any other action), the fact that at the time of taking any such
action the holders of such majority or specified percentage of that series have
joined therein may be evidenced by any instrument or any number of instruments
of similar tenor executed by such holders of Debt Securities of that series in
Person or by agent or proxy appointed in writing.
If the Company shall solicit from the Securityholders of any
series any request, demand, authorization, direction, notice, consent, waiver
or other action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for such series for the determination
of Securityholders (entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action) may be given
before or after the record date, but only the Securityholders of record at the
close of business on the record date shall be deemed to be Securityholders for
the purposes of determining whether Securityholders of the requisite proportion
of Outstanding Debt Securities of that series have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other action, and for that purpose the Outstanding Debt Securities of
that series shall be computed as of the record date; provided, however, that no
such authorization, agreement or consent by such Securityholders on the record
date shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.
SECTION 8.02. Proof of Execution by Securityholders.
Subject to the provisions of Section 7.01, proof of the
execution of any instrument by a Securityholder (such proof will not require
notarization) or his agent or proxy and proof of the holding by any Person of
any of the Debt Securities shall be sufficient if made in the following manner:
42
<PAGE> 49
(a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable
to the Trustee.
(b) The ownership of Debt Securities shall be proved by the Debt
Security Register of such Debt Securities or by a certificate
of the Debt Security Registrar thereof.
(c) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 8.03. Who May be Deemed Owners.
Prior to the due presentment for registration of transfer of
any Debt Security, the Company, the Trustee, any paying agent and any Debt
Security Registrar may deem and treat the Person in whose name such Debt
Security shall be registered upon the books of the Company as the absolute
owner of such Debt Security (whether or not such Debt Security shall be overdue
and notwithstanding any notice of ownership or writing thereon made by anyone
other than the Debt Security Registrar) for the purpose of receiving payment of
or on account of the principal of, premium, if any, and (subject to Section
2.03) interest on such Debt Security and for all other purposes; and neither
the Company nor the Trustee nor any paying agent nor any Debt Security
Registrar shall be affected by any notice to the contrary.
SECTION 8.04. Certain Debt Securities Owned by Company Disregarded.
In determining whether the holders of the requisite aggregate
principal amount of Debt Securities of a particular series have concurred in
any direction, consent waiver under this Indenture, the Debt Securities of that
series that are owned by the Company or any other obligor on the Debt
Securities of that series or by any Person directly or indirectly controlling
or controlled by or under common control with the Company or any other obligor
on the Debt Securities of that series shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only Debt Securities of such series that the
Trustee actually knows are so owned shall be so disregarded. The Debt
Securities so owned that have been pledged in good faith may be regarded as
Outstanding for the purposes of this Section, if the pledgee shall establish to
the satisfaction of the Trustee the pledgee's right so to act with respect to
such Debt Securities and that the pledgee is not a Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In case of a dispute as to
such right, any decision by the Trustee taken upon the advice of counsel shall
be full protection to the Trustee.
43
<PAGE> 50
SECTION 8.05. Actions Binding on Future Securityholders.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 8.01, of the taking of any action by the
holders of a majority or specified percentage in aggregate principal amount of
the Debt Securities of a particular series in connection with such action, any
holder of a Debt Security of that series that is shown by the evidence to be
included in the Debt Securities the holders of which have consented to such
action may, by filing written notice with the Trustee, and upon proof of
holding as provided in Section 8.02, revoke such action so far as concerns such
Debt Security. Except as aforesaid, any such action taken by the holder of any
Debt Security shall be conclusive and binding upon such holder and upon all
future holders and owners of such Debt Security, and of any Debt Security
issued in exchange therefor, on registration of transfer thereof or in place
thereof, irrespective of whether or not any notation in regard thereto is made
upon such Debt Security. Any action taken by the holders of a majority or
specified percentage in aggregate principal amount of the Debt Securities of a
particular series in connection with such action shall be conclusively binding
upon the Company, the Trustee and the holders of all the Debt Securities of
that series.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without the Consent of
Securityholders.
In addition to any supplemental indenture otherwise authorized
by this Indenture, the Company and the Trustee may from time to time and at any
time enter into an indenture or indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act as then in effect),
without the consent of the Securityholders, for one or more of the following
purposes:
(1) to cure any ambiguity, defect or inconsistency herein or in
the Debt Securities of any series;
(2) to comply with Article X;
(3) to provide for uncertificated Debt Securities in addition to
or in place of certificated Debt Securities;
(4) to add to the covenants of the Company for the benefit of the
holders of all or any series of Debt Securities (and if such
covenants are to be for the benefit of less than all series of
Debt Securities, stating that such covenants are expressly
being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the
Company;
44
<PAGE> 51
(5) to add to, delete from, or revise the conditions, limitations
and restrictions on the authorized amount, terms or purposes
of issue, authentication and delivery of Debt Securities, as
herein set forth;
(6) to make any change that does not adversely affect the rights
of any Securityholder in any material respect; or
(7) to provide for the issuance of and establish the form and
terms and conditions of the Debt Securities of any series as
provided in Section 2.01, to establish the form of any
certifications required to be furnished pursuant to the terms
of this Indenture or any series of Debt Securities, or to add
to the rights of the holders of any series of Debt Securities.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
that affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed by the Company and the Trustee without the consent
of the holders of any of the Debt Securities at the time Outstanding
notwithstanding any of the provisions of Section 9.02.
SECTION 9.02. Supplemental Indentures With Consent of Securityholders.
With the consent (evidenced as provided in Section 8.01) of
the holders of not less than 66 2/3% in aggregate principal amount of the Debt
Securities of each series affected by such supplemental indenture or indentures
at the time Outstanding, the Company, when authorized by a Board Resolution,
and the Trustee may from time to time and at any time enter into an indenture
or indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect) for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or of modifying in any manner not
covered by Section 9.01 the rights of the holders of the Debt Securities of
such series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the holders of each Debt Security then
Outstanding and affected thereby, (i) extend the fixed maturity of any Debt
Securities of any series, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any premium
payable upon the redemption thereof, without the consent of the holder of each
Debt Security so affected or (ii) reduce the aforesaid percentage of Debt
Securities, the holders of which are required to consent to any such
supplemental indenture.
45
<PAGE> 52
It shall not be necessary for the consent of the
Securityholders of any series affected thereby under this Section to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
SECTION 9.03. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to
the provisions of this Article or of Section 10.01, this Indenture shall, with
respect to such series, be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Debt Securities of the series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.04. Debt Securities Affected by Supplemental Indentures.
Debt Securities of any series, affected by a supplemental
indenture, authenticated and delivered after the execution of such supplemental
indenture pursuant to the provisions of this Article or of Section 10.01, may
bear a notation in form approved by the Company, provided such form meets the
requirements of any Securities exchange upon which such series may be listed,
as to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Debt Securities of that series so modified as to
conform, in the opinion of the Board of Directors of the Company, to any
modification of this Indenture contained in any, such supplemental indenture
may be prepared by the Company, authenticated by the Trustee and delivered in
exchange for the Debt Securities of that series then Outstanding.
SECTION 9.05. Execution of Supplemental Indentures.
Upon the request of the Company, accompanied by a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Securityholders
required to consent thereto as aforesaid, the Trustee shall join with the
Company in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion but shall not be obligated to enter into such supplemental
indenture. The Trustee, subject to the provisions of Section 7.01, may receive
an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article is authorized or permitted by, and conforms
to, the terms of this Article and that it is proper for the Trustee under the
provisions of this Article to join in the execution thereof.
46
<PAGE> 53
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Trustee shall transmit by mail, first class postage prepaid, a notice, setting
forth in general terms the substance of such supplemental indenture, to the
Securityholders of all series affected thereby as their names and addresses
appear upon the Debt Security Register. Any failure of the Trustee to mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.
ARTICLE X
SUCCESSOR CORPORATION
SECTION 10.01. Company May Consolidate, Etc.
Nothing contained in this Indenture or in any of the Debt
Securities shall prevent any consolidation or merger of the Company with or
into any other corporation or corporations (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance, transfer or other disposition of the property of the Company or its
successor or successors as an entirety, or substantially as an entirety, to any
other corporation (whether or not affiliated with the Company or its successor
or successors) authorized to acquire and operate the same; provided, however,
the Company hereby covenants and agrees that, upon any such consolidation,
merger, sale, conveyance, transfer or other disposition, the due and punctual
payment of the principal of (premium, if any) and interest on all of the Debt
Securities of all series in accordance with the terms of each series, according
to their tenor and the due and punctual performance and observance of all the
covenants and conditions of this Indenture with respect to each series or
established with respect to such series pursuant to Section 2.01 to be kept or
performed by the Company, shall be expressly assumed, by supplemental indenture
(which shall conform to the provisions of the Trust Indenture Act, as then in
effect) satisfactory in form to the Trustee executed and delivered to the
Trustee by the entity formed by such consolidation, or into which the Company
shall have been merged, or by the entity which shall have acquired such
property.
SECTION 10.02. Successor Corporation Substituted.
(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the
successor corporation, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the
Trustee, of the due and punctual payment of the principal of,
premium, if any, and interest on all of the Debt Securities of
all series Outstanding and the due and punctual performance of
all of the covenants and conditions of this Indenture or
established with respect to each series of the Debt
Securities pursuant to Section 2.01 to be performed by the
Company, with respect to each series, such successor
corporation shall succeed
47
<PAGE> 54
to and be substituted for the Company, with the same effect
as if it had been named as the Company herein.
(b) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition, such changes in phraseology and
form (but not in substance) may be made in the Debt Securities
thereafter to be issued as may be appropriate.
(c) Nothing contained in this Indenture or in any of the Debt
Securities shall prevent the Company from merging into itself
or acquiring by purchase or otherwise all or any part of the
property of any other Person (whether or not affiliated with
the Company).
SECTION 10.03. Evidence of Consolidation, Etc. to Trustee.
The Trustee, subject to the provisions of Section 7.01, may
receive an Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, conveyance, transfer or other disposition, and any
such assumption, comply with the provisions of this Article.
ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01. Satisfaction and Discharge of Indenture.
If at any time: (a) the Company shall have delivered to the
Trustee for cancellation all Debt Securities of a series theretofore
authenticated (other than any Debt Securities that shall have been destroyed,
lost or stolen and that shall have been replaced or paid as provided in Section
2.07 and Debt Securities for whose payment money or Governmental Obligations
have theretofore been deposited in trust or segregated and held in trust by the
Company (and thereupon repaid to the Company or discharged from such trust, as
provided in Section 11.05)); or (b) all such Debt Securities of a particular
series not theretofore delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit or cause to be deposited with the Trustee as trust funds
the entire amount in moneys or Governmental Obligations or a combination
thereof, sufficient in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay at maturity or upon redemption all Debt
Securities of that series not theretofore delivered to the Trustee for
cancellation, including principal (and premium, if any) and interest due or to
become due to such date of maturity or date fixed for redemption, as the case
may be, and if the Company shall also pay or cause to be paid all other sums
payable hereunder with respect to such series by the Company; then if the
Company has delivered
48
<PAGE> 55
to the Trustee an Opinion of Counsel based on the fact that (x) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (y) since the date hereof, there has been a change in the applicable
United States federal income tax law, in either case to the effect that, and
such opinion shall confirm that, the holders of the Debt Securities of such
series will not recognize income, gain or loss for United States federal income
tax purposes as a result of such deposit, defeasance and discharge and will be
subject to United States federal income tax on the same amount and in the same
manner and at the same times, as would have been the case if such deposit,
defeasance and discharge had not occurred, this Indenture shall thereupon cease
to be of further effect with respect to such series except for the provisions
of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that shall survive
until the date of maturity or redemption date, as the case may be, and Sections
7.06 and 11.05, that shall survive to such date and thereafter, and the
Trustee, on demand of the Company and at the cost and expense of the Company
shall execute proper instruments acknowledging satisfaction of and discharging
this Indenture with respect to such series.
SECTION 11.02. Discharge of Obligations.
If at any time all Debt Securities of a particular series not
heretofore delivered to the Trustee for cancellation or that have not become
due and payable as described in Section 11.01 shall have been paid by the
Company by depositing irrevocably with the Trustee as trust funds the entire
amount in moneys or Governmental Obligations sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof, delivered to the Trustee to pay at maturity or
upon redemption under arrangements satisfactory to the Trustee for the giving
of notice of redemption all such Debt Securities of that series not theretofore
delivered to the Trustee for cancellation, including principal (and premium, if
any) and interest due or to become due to such date of maturity or date fixed
for redemption, as the case may be, and if the Company shall also pay or cause
to be paid all other sums payable hereunder by the Company with respect to such
series, then after the date such moneys or Governmental Obligations, as the
case may be, are deposited with the Trustee then, if the Company has delivered
to the Trustee an Opinion of Counsel based on the fact that (x) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (y) since the date hereof, there has been a change in the applicable
United States federal income tax law, in either case to the effect that, and
such opinion shall confirm that, the holders of the Debt Securities of such
series will not recognize income, gain or loss for United States federal income
tax purposes as a result of such deposit, defeasance and discharge and will be
subject to United States federal income tax on the same amount and in the same
manner and at the same times, as would have been the case if such deposit,
defeasance and discharge had not occurred, the obligations of the Company,
under this Indenture with respect to such series shall cease to be of further
effect except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02,
4.03, 7.06, 7.10 and 11.05 hereof that shall survive until such Debt Securities
shall mature and be paid. Thereafter, Sections 7.06 and 11.05 shall survive.
49
<PAGE> 56
SECTION 11.03. Deposited Moneys to be Held in Trust.
All moneys or Governmental Obligations deposited with the
Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and shall
be available for payment as due, either directly or through any paying agent
(including the Company acting as its own paying agent), to the holders of the
particular series of Debt Securities for the payment or redemption of which
such moneys or Governmental Obligations have been deposited with the Trustee.
SECTION 11.04. Payment of Moneys Held by Paying Agents.
In connection with the satisfaction and discharge of this
Indenture, all moneys or Governmental Obligations then held by any paying agent
under the provisions of this Indenture shall, upon demand of the Company, be
paid to the Trustee and thereupon such paying agent shall be released from all
further liability with respect to such moneys or Governmental Obligations.
SECTION 11.05. Repayment to Company.
Any moneys or Governmental Obligations deposited with any
paying agent or the Trustee, or then held by the Company, in trust for payment
of principal of or premium or interest on the Debt Securities of a particular
series that are not applied but remain unclaimed by the holders of such Debt
Securities for at least two years after the date upon which the principal of
(and premium, if any) or interest on such Debt Securities shall have
respectively become due and payable, shall be repaid to the Company on May 31
of each year or (if then held by the Company) shall be discharged from such
trust; and thereupon the paying agent and the Trustee shall be released from
all further liability with respect to such moneys or Governmental Obligations,
and the holder of any of the Debt Securities entitled to receive such payment
shall thereafter, as an unsecured general creditor, look only to the Company
for the payment thereof.
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. No Recourse.
No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of any Debt Security, or for any claim based
thereon or otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, past, present or future as such, of the
Company or of any predecessor or successor corporation, either directly or
through the Company or any such predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment
50
<PAGE> 57
or penalty or otherwise; it being expressly understood that this Indenture and
the obligations issued hereunder are solely corporate obligations, and that no
such personal liability whatever shall attach to, or is or shall be incurred
by, the incorporators, stockholders, officers or directors as such, of the
Company or of any predecessor or successor corporation, or any of them, because
of the creation of the indebtedness hereby authorized, or under or by reason of
the obligations, covenants or agreements contained in this Indenture or in any
of the Debt Securities or implied herefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of
the obligations, covenants or agreements contained in this Indenture or in any
of the Debt Securities or implied therefrom, are hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issuance of such Debt Securities.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. Effect on Successors and Assigns.
All the covenants, stipulations, promises and agreements in
this Indenture contained by or on behalf of the Company shall bind successors
and assigns of the Company, whether so expressed or not.
SECTION 13.02. Actions by Successor.
Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
effect by the corresponding board, committee or officer of any corporation that
shall at the time be the lawful successor of the Company.
SECTION 13.03. Surrender of Company Powers.
The Company by instrument in writing executed by authority of
2/3 (two-thirds) of the Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company, and thereupon such power
so surrendered shall terminate both as to the Company and as to any successor
corporation.
SECTION 13.04. Notices.
Except as otherwise expressly provided herein, any notice or
demand that by any provision of this Indenture is required or permitted to be
given or served by the Trustee or by the holders of Debt Securities to or on
the Company may be given or served by being
51
<PAGE> 58
deposited first class postage prepaid in a post-office letterbox addressed
(until another address is filed in writing by the Company with the Trustee), as
follows: Illinois Power Company, 500 South 27th Street, Decatur, Illinois
62525, Attention: Treasurer. Any notice, election, request or demand by the
Company or any Securityholder to or upon the Trustee shall be deemed to have
been sufficiently given or made, for all purposes, if given or made in writing
at the Corporate Trust Office of the Trustee.
SECTION 13.05. Governing Law.
This Indenture and each Debt Security shall be deemed to be a
contract made under the internal laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State.
SECTION 13.06. Treatment of the Debt Securities as Debt.
It is intended that the Debt Securities will be treated as
indebtedness and not as equity for federal income tax purposes. The provisions
of this Indenture shall be interpreted to further this intention.
SECTION 13.07. Compliance Certificates and Opinions.
(a) Upon any application or demand by the Company to the Trustee
to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the proposed action
have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent
have been complied with, except that in the case of any such
application or demand as to which the furnishing of such
documents is specifically required by any provision of this
Indenture relating to such particular application or demand,
no additional certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a
condition or covenant in this Indenture shall include (1) a
statement that the Person making such certificate or opinion
has read such covenant or condition; (2) a brief statement as
to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such
certificate or opinion are based; (3) a statement that, in the
opinion of such Person, he has made such examination or
investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to
whether or not, in the opinion of such Person, such condition
or covenant has been complied with.
52
<PAGE> 59
SECTION 13.08. Payments on Business Days.
Except as provided pursuant to Section 2.01 pursuant to a
Board Resolution, and as set forth in an Officers' Certificate, or established
in one or more indentures supplemental to this Indenture, in any case where the
date of maturity of interest or principal of any Debt Security or the date of
redemption of any Debt Security shall not be a Business Day, then payment of
interest or principal (and premium, if any) may be made on the next succeeding
Business Day with the same force and effect as if made on the nominal date of
maturity or redemption, and no interest shall accrue for the period after such
nominal date.
SECTION 13.09. Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.10. Counterparts.
This Indenture may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together
constitute but one and the same instrument.
SECTION 13.11. Separability.
In case any one or more of the provisions contained in this
Indenture or in the Debt Securities of any series shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Indenture or of such Debt Securities, but this Indenture and such Debt
Securities shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
SECTION 13.12. Assignment.
The Company will have the right at all times to assign any of
its respective rights or obligations under this Indenture to a direct or
indirect wholly-owned Subsidiary of the Company, provided that, in the event of
any such assignment, the Company will remain liable for all such obligations.
Subject to the foregoing, the Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors and assigns.
This Indenture may not otherwise be assigned by the parties thereto.
53
<PAGE> 60
SECTION 13.13. Acknowledgment of Rights.
The Company acknowledges that, with respect to any Debt
Securities held by an Illinois Power Trust or a trustee of such trust, if the
Property Trustee of such Trust fails to enforce its rights under this Indenture
as the holder of the series of Debt Securities held as the assets of such
Illinois Power Trust, any holder of Preferred Securities may, after a period of
30 days has elapsed from such holder's written request to such Property Trustee
to enforce such rights, institute legal proceedings directly against the
Company to enforce such Property Trustee's rights under this Indenture without
first instituting any legal proceedings against such Property Trustee or any
other person or entity.
ARTICLE XIV
SUBORDINATION OF DEBT SECURITIES
SECTION 14.01. Subordination Terms.
The payment by the Company of the principal of, premium, if
any, and interest on any series of Debt Securities issued hereunder shall be
subordinated to the extent set forth in an indenture supplemental hereto
relating to such Debt Securities.
54
<PAGE> 61
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
ILLINOIS POWER COMPANY
By:_____________________________________
Name:
Title:
Attest: __________________________
Secretary
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By:_____________________________________
Name:
Title:
Attest: __________________________
Secretary
55
<PAGE> 62
STATE OF ILLINOIS)
COUNTY OF MACON ) SS
On the _____ day of _______________, 1995, before me personally came
_______________ to be known, who, being by me duly sworn, did depose and say
that he is the _____________ of ILLINOIS POWER COMPANY one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal of
office this _____ day of _______________, 1995.
________________________________________
Notary Public
STATE OF _________)
COUNTY OF _______ ) SS
On the _____ day of _______________, 1995, before me personally came
_______________ to be known, who, being by me duly sworn, did depose and say
that he is the _____________ of WILMINGTON TRUST COMPANY one of the
corporations described in and which executed the above instrument; that he
knows the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal of
office this _____ day of _______________, 1995.
________________________________________
Notary Public
56
<PAGE> 1
EXHIBIT 4(E)
=========================
FORM OF
FIRST SUPPLEMENTAL INDENTURE
BETWEEN
ILLINOIS POWER COMPANY
AND
WILMINGTON TRUST COMPANY
DATED AS OF ________________, 1995
=========================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE SUBORDINATED DEBENTURES
SECTION 2.1. Designation and Principal Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2. Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3. Form and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4. Global Debenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.5. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
REDEMPTION OF THE SUBORDINATED DEBENTURES
SECTION 3.1. Special Event Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.2. Optional Redemption by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.3. No Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4.2. Notice of Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4.3. Limitation of Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 5.2. Payment Upon Resignation or Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VI
SUBORDINATION
SECTION 6.1. Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 6.2. Default on Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.3. Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.4. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 6.5. Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 6.6. Notice by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.7. Rights of the Trustee; holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . 14
SECTION 6.8. Subordination May Not Be Impaired . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. Listing on an Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII
FORM OF DEBENTURE
SECTION 8.1. Form of Debenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE IX
ORIGINAL ISSUE OF SUBORDINATED DEBENTURES
SECTION 9.1. Original Issue of Subordinated Debentures . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Ratification of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 10.2. Trustee Not Responsible for Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 10.3. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 10.4. Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 10.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
ii
<PAGE> 4
FIRST SUPPLEMENTAL INDENTURE, dated as of ____________, 1995
(the "First Supplemental Indenture"), between Illinois Power Company, an
Illinois corporation (the "Company"), and Wilmington Trust Company, not in its
individual capacity but solely as trustee (the "Trustee") under the Indenture
dated as of ________, 1995 between the Company and the Trustee (the
"Indenture").
W I T N E S S E T H:
WHEREAS, the Company executed and delivered the Indenture to
the Trustee to provide for the future issuance of the Company's unsecured
junior subordinated debt securities to be issued from time to time in one or
more series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered
as provided in the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its Debt Securities
to be known as its ___% Junior Subordinated Deferrable Interest Debentures due
2044 (the "Subordinated Debentures"), the form and substance of such
Subordinated Debentures and the terms, provisions and conditions thereof to be
set forth as provided in the Indenture and this First Supplemental Indenture;
WHEREAS, Illinois Power Financing I, a Delaware statutory
business trust (the "Trust"), has offered to the public $100,000,000 aggregate
liquidation amount of its ___% Trust Originated Preferred Securities (the
"Preferred Securities"), representing undivided beneficial interests in the
assets of the Trust and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by the Trust to the Company
of $ million aggregate liquidation amount of its ___% Trust Originated
Common Securities, in $_______ million aggregate principal amount of the
Subordinated Debentures; and
WHEREAS, the Company has requested that the Trustee execute
and deliver this First Supplemental Indenture and all requirements necessary to
make this First Supplemental Indenture a valid instrument in accordance with
its terms, and to make the Subordinated Debentures, when executed by the
Company and authenticated and delivered by the Trustee, the valid obligations
of the Company, have been performed, and the execution and delivery of this
First Supplemental Indenture has been duly authorized in all respects;
NOW THEREFORE, in consideration of the purchase and acceptance
of the Subordinated Debentures by the holders thereof, and for the purpose of
setting forth, as provided in the Indenture, the form and substance of the
Subordinated Debentures and the terms, provisions and conditions thereof, the
Company covenants and agrees with the Trustee as follows:
<PAGE> 5
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning
when used in this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental
Indenture has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section
or Article of this First Supplemental Indenture;
(e) headings are for convenience of reference only and do
not affect interpretation;
(f) the following terms have the meanings given to them
in the Declaration: (i) Business Day; (ii) Clearing Agency; (iii) Delaware
Trustee; (iv) Depositary; (v) Dissolution Tax Opinion; (vi) No Recognition
Opinion; (vii) Preferred Security Certificate; (viii) Pricing Agreement; (ix)
Property Trustee; (x) Regular Trustees; (xi) Special Event; and (xii) Tax
Event; and (xiii) Underwriting Agreement;
(g) the following terms have the meanings given to them
in this Section 1.1(g):
"Additional Interest" shall have the meaning set forth in
Section 2.5.
"Compounded Interest" shall have the meaning set forth in
Section 4.1.
"Coupon Rate" shall have the meaning set forth in Section 2.5.
"Declaration" means the Amended and Restated Declaration of
Trust of Illinois Power Financing I, a Delaware statutory business trust, dated
as of _________, 1995.
"Deferred Interest" shall have the meaning set forth in
Section 4.1.
"Dissolution Event" means that, as a result of the occurrence
and continuation of a Special Event, the Trust is to be dissolved in accordance
with the Declaration, and the
2
<PAGE> 6
Subordinated Debentures held by the Property Trustee are to be distributed to
the holders of the Trust Securities issued by the Trust pro rata in accordance
with the Declaration.
"Extended Interest Payment Period" shall have the meaning set
forth in Section 4.1.
"Global Debenture" shall have the meaning set forth in Section
2.4.
"Maturity Date" means the date on which the Subordinated
Debentures mature and on which the principal shall be due and payable together
with all accrued and unpaid interest thereon including Compounded Interest and
Additional Interest, if any.
"Non Book-Entry Preferred Securities" shall have the meaning
set forth in Section 2.4.
"Optional Redemption Price" shall have the meaning set forth
in Section 3.2.
"Senior Indebtedness" means, with respect to the Company, (i)
the principal, premium, if any, and interest in respect of (A) indebtedness of
such obligor for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by such obligor,
including, without limitation, indebtedness evidenced by securities issued
pursuant to the Company's Mortgage and Deed of Trust dated November 1, 1943, as
supplemented, and its General Mortgage Indenture and Deed of Trust dated
November 1, 1992, as supplemented; (ii) all capital lease obligations of such
obligor, (iii) all obligations of such obligor issued or assumed as the
deferred purchase price of property, all conditional sale obligations of such
obligor and all obligations of such obligor under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of
business); (iv) all obligations of such obligor for the reimbursement on any
letter of credit, banker's acceptance, security purchase facility or similar
credit transaction; (v) all obligations of the type referred to in clauses (i)
through (iv) of other Persons for the payment of which such obligor is
responsible or liable as obligor, guarantor or otherwise; and (vi) all
obligations of the type referred to in clauses (i) through (v) of other Persons
secured by any lien on any property or asset of such obligor (whether or not
such obligation is assumed by such obligor), except for (1) any such
indebtedness that is by its terms subordinated to or pari passu with the
Subordinated Debentures, and (2) any indebtedness between or among such obligor
and its Affiliates, including all other debt securities and guarantees in
respect of those debt securities, issued to any other trust, or a trustee of
such trust, partnership or other entity affiliated with the Company which is a
financing vehicle of the Company (a "Financing Entity") in connection with the
issuance by such Financial Entity of preferred securities or other securities
which rank pari passu with, or junior to, the Preferred Securities.
3
<PAGE> 7
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE SUBORDINATED DEBENTURES
SECTION 2.1. Designation and Principal Amount.
There is hereby authorized a series of Debt Securities
designated the "___% Junior Subordinated Deferrable Interest Debentures due
2044", limited in aggregate principal amount to $___ million, which amount
shall be as set forth in any written order of the Company for the
authentication and delivery of Subordinated Debentures pursuant to Section 2.04
of the Indenture.
SECTION 2.2. Maturity.
The Maturity Date is ____________, 2044.
SECTION 2.3. Form and Payment.
The Subordinated Debentures shall be issued in fully
registered certificated form without interest coupons. Principal and interest
on the Subordinated Debentures will be payable, the transfer of such
Subordinated Debentures will be registrable and such Subordinated Debentures
will be exchangeable for Subordinated Debentures bearing identical terms and
provisions, at the office or agency of the Trustee; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the holder at such address as shall appear in the Security Register.
Notwithstanding the foregoing, so long as the holder of any Subordinated
Debentures is the Property Trustee, the payment of the principal of and
interest (including Compounded Interest and Additional Interest, if any) on
such Subordinated Debentures held by the Property Trustee will be made at such
place and to such account as may be designated by the Property Trustee.
SECTION 2.4. Global Debenture.
(a) In connection with a Dissolution Event:
(i) the Subordinated Debentures may be presented
to the Trustee by the Property Trustee in exchange for a global
Subordinated Debenture in an aggregate principal amount equal to the
aggregate principal amount of all outstanding Subordinated Debentures
(a "Global Debenture"), to be registered in the name of the
Depositary, or its nominee, and delivered by the Trustee to the
Depositary for crediting to the accounts of its participants pursuant
to the instructions of the Regular Trustees. The Company, upon any
such presentation, shall execute a Global Debenture in such aggregate
principal amount and deliver the same to the Trustee for
authentication and delivery in accordance with the Indenture and this
First Supplemental Indenture. Payments on the Subordinated Debentures
issued as a Global Debenture will be made to the Depositary; and
4
<PAGE> 8
(ii) if any Preferred Securities are held in non
book-entry certificated form, the Subordinated Debentures may be
presented to the Trustee by the Property Trustee and any Preferred
Security Certificate which represents Preferred Securities other than
Preferred Securities held by the Clearing Agency or its nominee ("Non
Book-Entry Preferred Securities") will be deemed to represent
beneficial interests in Subordinated Debentures presented to the
Trustee by the Property Trustee having an aggregate principal amount
equal to the aggregate liquidation amount of the Non Book-Entry
Preferred Securities until such Preferred Security Certificates are
presented to the Security Registrar for transfer or reissuance at
which time such Preferred Security Certificates will be cancelled and
a Debenture, registered in the name of the holder of the Preferred
Security Certificate or the transferee of the holder of such Preferred
Security Certificate, as the case may be, with an aggregate principal
amount equal to the aggregate liquidation amount of the Preferred
Security Certificate cancelled, will be executed by the Company and
delivered to the Trustee for authentication and delivery in accordance
with the Indenture and this First Supplemental Indenture. On issue of
such Subordinated Debentures, Subordinated Debentures with an
equivalent aggregate principal amount that were presented by the
Property Trustee to the Trustee will be deemed to have been cancelled.
(b) Except as provided in clause (c) below, a Global
Debenture may be transferred, in whole but not in part, only to another nominee
of the Depositary, or to a successor Depositary selected or approved by the
Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary or if at any time the
Depositary for such series shall no longer be registered or in good standing
under the Exchange Act, or other applicable statute or regulation, and a
successor Depositary for such series is not appointed by the Company within 90
days after the Company receives such notice or becomes aware of such condition,
as the case may be, the Company will execute, and, subject to Article II of the
Indenture, the Trustee, upon written notice from the Company, will authenticate
and deliver the Subordinated Debentures in definitive registered form, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debenture in exchange for such Global Debenture.
In addition, the Company may at any time determine that the Subordinated
Debentures shall no longer be represented by a Global Debenture. In such event
the Company will execute, and subject to Section 2.11(c) of the Indenture, the
Trustee, upon receipt of an Officers' Certificate evidencing such determination
by the Company, will authenticate and deliver the Subordinated Debentures in
definitive registered form, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global Debenture in
exchange for such Global Debenture. Upon the exchange of the Global Debenture
for such Subordinated Debentures in definitive registered form, in authorized
denominations, the Global Debenture shall be cancelled by the Trustee. Such
Subordinated Debentures in definitive registered form issued
5
<PAGE> 9
in exchange for the Global Debenture shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver such Subordinated Debentures to the Depositary for
delivery to the Persons in whose names such Subordinated Debentures are so
registered.
SECTION 2.5. Interest.
(a) Each Subordinated Debenture will bear interest at the
rate of ___% per annum (the "Coupon Rate") from the original date of issuance
until the principal thereof becomes due and payable, and on any overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest, at the Coupon Rate,
compounded quarterly, payable (subject to the provisions of Article Four)
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year (each, an "Interest Payment Date," commencing on December 31, 1995), to
the Person in whose name such Subordinated Debenture or any predecessor
Subordinated Debenture is registered, at the close of business on the regular
record date for such interest installment, which, in respect of any
Subordinated Debentures of which the Property Trustee is the holder of a Global
Debenture, shall be the close of business on the Business Day next preceding
that Interest Payment Date. Notwithstanding the foregoing sentence, if the
Preferred Securities are no longer in book-entry only form or, except if the
Subordinated Debentures are held by the Property Trustee, the Subordinated
Debentures are not represented by a Global Debenture, the Company may select a
regular record date for such interest installment which shall be any date at
least one Business Day before an Interest Payment Date.
(b) The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed,
will be computed on the basis of the actual number of days elapsed in such a
30-day period. In the event that any date on which interest is payable on the
Subordinated Debentures is not a Business Day, then payment of interest payable
on such date will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.
(c) If, at any time while the Property Trustee is the
holder of any Subordinated Debentures, the Trust or the Property Trustee is
required to pay any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States, or
any other taxing authority, then, in any case, the Company will pay as
additional interest ("Additional Interest") on the Subordinated Debentures held
by the Property Trustee, such additional amounts as shall be required so
6
<PAGE> 10
that the net amounts received and retained by the Trust and the Property
Trustee after paying such taxes, duties, assessments or other governmental
charges will be equal to the amounts the Trust and the Property Trustee would
have received had no such taxes, duties, assessments or other government
charges been imposed.
ARTICLE III
REDEMPTION OF THE SUBORDINATED DEBENTURES
SECTION 3.1. Special Event Redemption.
If a Tax Event has occurred and is continuing and:
(a) the Company has received a Redemption Tax Opinion; or
(b) after receiving a Dissolution Tax Opinion, the
Regular Trustees shall have been informed by tax counsel rendering the
Dissolution Tax Opinion that a No Recognition Opinion cannot be
delivered to the Trust,
then, notwithstanding Section 3.2(a) but subject to Section 3.2(b), the Company
shall have the right upon not less than 30 days nor more than 60 days notice to
the holders of the Subordinated Debentures to redeem the Subordinated
Debentures, in whole or in part, for cash within 90 days following the
occurrence of such Tax Event (the "90-Day Period") at a redemption price equal
to 100% of the principal amount to be redeemed plus any accrued and unpaid
interest thereon to the date of such redemption (the "Redemption Price"),
provided that if at the time there is available to the Company the opportunity
to eliminate, within the 90-Day Period, the Tax Event by taking some
ministerial action ("Ministerial Action"), such as filing a form or making an
election, or pursuing some other similar reasonable measure which has no
adverse effect on the Company, the Trust or the holders of the Trust Securities
issued by the Trust, the Company shall pursue such Ministerial Action in lieu
of redemption, and, provided, further, that the Company shall have no right to
redeem the Subordinated Debentures while the Trust is pursuing any Ministerial
Action pursuant to its obligations under the Declaration. The Redemption Price
shall be paid prior to 12:00 noon, New York time, on the date of such
redemption or such earlier time as the Company determines, provided that the
Company shall deposit with the Trustee an amount sufficient to pay the
Redemption Price by 10:00 a.m., New York time, on the date such Redemption
Price is to be paid.
SECTION 3.2. Optional Redemption by Company.
(a) Subject to the provisions of Section 3.02(b) and to
the provisions of Article III of the Indenture, except as otherwise may be
specified in this First Supplemental Indenture, the Company shall have the
right to redeem the Subordinated Debentures, in whole or in part, from time to
time, on or after _________, 2000, at a redemption price
7
<PAGE> 11
equal to 100% of the principal amount to be redeemed plus any accrued and
unpaid interest thereon to the date of such redemption (the "Optional
Redemption Price"). Any redemption pursuant to this paragraph will be made
upon not less than 30 days nor more than 60 days notice to the holder of the
Subordinated Debentures, at the Optional Redemption Price. If the Subordinated
Debentures are only partially redeemed pursuant to this Section 3.2, the
Subordinated Debentures will be redeemed pro rata or by lot or by any other
method utilized by the Trustee; provided, that if at the time of redemption the
Subordinated Debentures are registered as a Global Debenture, the Depositary
shall determine, in accordance with its procedures, the principal amount of
such Subordinated Debentures held by each holder of Subordinated Debentures to
be redeemed. The Optional Redemption Price shall be paid prior to 12:00 noon,
New York time, on the date of such redemption or such earlier time as the
Company determines, provided that the Company shall deposit with the Trustee an
amount sufficient to pay the Redemption Price by 10:00 a.m., New York time, on
the date such Redemption Price is to be paid.
(b) If a partial redemption of the Subordinated
Debentures would result in the delisting of the Preferred Securities from any
national securities exchange or other organization on which the Preferred
Securities are then listed, the Company shall not be permitted to effect such
partial redemption and may only redeem the Subordinated Debentures in whole.
SECTION 3.3. No Sinking Fund.
The Subordinated Debentures are not entitled to the benefit of
any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period.
The Company shall have the right, at any time and from time to
time during the term of the Subordinated Debentures, to defer payments of
interest by extending the interest payment period of such Subordinated
Debentures for a period not exceeding 20 consecutive quarters (the "Extended
Interest Payment Period"), during which Extended Interest Payment Period no
interest shall be due and payable. To the extent permitted by applicable law,
interest, the payment of which has been deferred because of the extension of
the interest payment period pursuant to this Section 4.1, will bear interest
thereon at the Coupon Rate compounded quarterly for each quarter of the
Extended Interest Payment Period ("Compounded Interest"). At the end of the
Extended Interest Payment Period, the Company shall pay all interest accrued
and unpaid on the Subordinated Debentures, including any Additional Interest
and Compounded Interest (together, "Deferred Interest") that shall be payable
to the holders of the Subordinated Debentures in whose names the
8
<PAGE> 12
Subordinated Debentures are registered in the Security Register on the first
record date after the end of the Extended Interest Payment Period. Before the
termination of any Extended Interest Payment Period, the Company may further
extend such period, provided that such period together with all such further
extensions thereof shall not exceed 20 consecutive quarters. Upon the
termination of any Extended Interest Payment Period and upon the payment of all
Deferred Interest then due, the Company may commence a new Extended Interest
Payment Period, subject to the foregoing requirements. No interest shall be
due and payable during an Extended Interest Payment Period, except at the end
thereof, but the Company may prepay at any time all or any portion of the
interest accrued during an Extended Interest Payment Period.
SECTION 4.2. Notice of Extension.
(a) If the Property Trustee is the only registered holder
of the Subordinated Debentures at the time the Company elects an Extended
Interest Payment Period, the Company shall give written notice to the Regular
Trustees, the Property Trustee and the Trustee of its election of such Extended
Interest Payment Period at least one Business Day before the earlier of (i) the
next succeeding date on which Distributions on the Trust Securities issued by
the Trust are payable, or (ii) the date the Trust is required to give notice of
the record date, or the date such Distributions are payable, to the New York
Stock Exchange or other applicable self-regulatory organization or to holders
of the Preferred Securities, but in any event at least one Business Day before
such record date.
(b) If the Property Trustee is not the only holder of the
Subordinated Debentures at the time the Company elects an Extended Interest
Payment Period, the Company shall give the holders of the Subordinated
Debentures and the Trustee written notice of its election of such Extended
Interest Payment Period 10 Business Days before the earlier of (i) the next
succeeding Interest Payment Date, or (ii) the date the Company is required to
give notice of the record or payment date of such interest payment to the New
York Stock Exchange or other applicable self-regulatory organization or to
holders of the Subordinated Debentures.
(c) The quarter in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the 20
quarters permitted in the maximum Extended Interest Payment Period permitted
under Section 4.1.
SECTION 4.3. Limitation of Transactions.
If (i) the Company shall exercise its right to defer payment
of interest as provided in Section 4.1, or (ii) there shall have occurred any
Event of Default, then (a) the Company shall not declare or pay any dividend
on, make any distributions with respect to, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital stock, provided,
however, the Company may declare and pay a stock dividend where the dividend
stock is the same stock as that on which the dividend is being paid, (b) the
9
<PAGE> 13
Company shall not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities issued by the Company
which rank pari passu with or junior to the Subordinated Debentures; and (c)
the Company shall not make guarantee payments with respect to the foregoing
(other than pursuant to the Preferred Securities Guarantee).
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of the
Subordinated Debentures to the Property Trustee and in connection with the sale
of the Trust Securities by the Trust, the Company, in its capacity as borrower
with respect to the Subordinated Debentures, shall:
(a) pay all costs and expenses relating to the offering,
sale and issuance of the Subordinated Debentures, including commissions to the
underwriters payable pursuant to the Underwriting Agreement and compensation of
the Trustee under the Indenture in accordance with the provisions of Section
7.06 of the Indenture;
(b) pay all costs and expenses of the Trust (including,
but not limited to, costs and expenses relating to the organization of the
Trust, the offering, sale and issuance of the Trust Securities (including
commissions to the underwriters in connection therewith), the fees and expenses
of the Property Trustee and the Delaware Trustee, the costs and expenses
relating to the operation of the Trust, including without limitation, costs and
expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses incurred
in connection with the acquisition, financing, and disposition of Trust
assets); and
(c) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
SECTION 5.2. Payment Upon Resignation or Removal.
Upon termination of this First Supplemental Indenture or the
Indenture or the removal or resignation of the Trustee pursuant to this
Section, the Company shall pay to the Trustee all amounts accrued to the date
of such termination, removal or resignation. Upon termination of the
Declaration or the removal or resignation of the Delaware Trustee or the
Property Trustee, as the case may be, pursuant to Section 5.6 of the
Declaration, the
10
<PAGE> 14
Company shall pay to the Property Trustee all amounts accrued to the date of
such termination, removal or resignation.
ARTICLE VI
SUBORDINATION
SECTION 6.1. Agreement to Subordinate.
The Company covenants and agrees, and each holder of
Subordinated Debentures issued hereunder, by such holder's acceptance thereof
likewise covenants and agrees, that all Subordinated Debentures shall be issued
subject to the provisions of this Article; and each holder of a Subordinated
Debenture, whether upon original issue or upon transfer or assignment thereof,
accepts and agrees to be bound by such provisions.
The payment by the Company of the principal of, premium, if
any, and interest on all Subordinated Debentures issued hereunder shall, to the
extent and in the manner hereinafter set forth, be subordinate and junior in
right of payment to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding at the date of this Indenture or thereafter
incurred.
No provision of this Article shall prevent the occurrence of
any default hereunder or Event of Default.
SECTION 6.2. Default on Senior Indebtedness.
In the event and during the continuation of any default by the
Company in the payment of principal, premium, interest or any other payment due
on any Senior Indebtedness of the Company, and any applicable grace period with
respect to such default has expired and such default has not been cured or
waived or ceased to exist, or in the event that the maturity of any Senior
Indebtedness of the Company, as the case may be, has been accelerated because
of a default, then, in either case, no payment shall be made by the Company
with respect to the principal (including redemption and sinking fund payments)
of, or premium, if any, or interest on the Subordinated Debentures.
In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section, such payment shall be held in trust for
the benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and
11
<PAGE> 15
owing on the Senior Indebtedness and only the amounts specified in such notice
to the Trustee shall be paid to the holders of Senior Indebtedness.
SECTION 6.3. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding-up or liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due upon
all Senior Indebtedness of the Company shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any payment
is made by the Company on account of the principal (and premium, if any) or
interest on the Subordinated Debentures; and upon any such dissolution or
winding-up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which the holders of the Subordinated
Debentures or the Trustee would be entitled to receive from the Company, except
for the provisions of this Article, shall be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the holders of the Subordinated
Debentures or by the Trustee if received by them or it, directly to the holders
of Senior Indebtedness of the Company (pro rata to such holders on the basis of
the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness
in full, in money or money's worth, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness,
before any payment or distribution is made to the holders of Subordinated
Debentures or to the Trustee.
In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior Indebtedness of
the Company, as the case may be, remaining unpaid to the extent necessary to
pay such Senior Indebtedness in full in money in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
benefit of the holders of such Senior Indebtedness.
12
<PAGE> 16
For purposes of this Article, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article Six with respect to the Subordinated Debentures to the payment of all
Senior Indebtedness of the Company, as the case may be, that may at the time be
outstanding, provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment,
and (ii) the rights of the holders of such Senior Indebtedness are not, without
the consent of such holders, altered by such reorganization or readjustment.
The consolidation of the Company with, or the merger of the Company into,
another corporation or the liquidation or dissolution of the Company following
the conveyance or transfer of its property as an entirety, or substantially as
an entirety, to another corporation upon the terms and conditions provided for
in Article X of the Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section if such other
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article X of the Indenture.
Nothing in Section or in this Section 6.3 shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 7.06 of the Indenture.
SECTION 6.4. Subrogation.
Subject to the payment in full of all Senior Indebtedness of
the Company, the rights of the holders of the Subordinated Debentures shall be
subrogated to the rights of the holders of such Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company, as
the case may be, applicable to such Senior Indebtedness until the principal of
(and premium, if any) and interest on the Subordinated Debentures shall be paid
in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of such Senior Indebtedness of any cash, property
or securities to which the holders of the Subordinated Debentures or the
Trustee would be entitled except for the provisions of this Article, and no
payment over pursuant to the provisions of this Article to or for the benefit
of the holders of such Senior Indebtedness by holders of the Subordinated
Debentures or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Indebtedness of the Company, and the holders of the
Subordinated Debentures, be deemed to be a payment by the Company to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Article are and are intended solely for the purposes of defining the
relative rights of the holders of the Subordinated Debentures, on the one hand,
and the holders of such Senior Indebtedness on the other hand.
Nothing contained in this Article or elsewhere in the
Indenture, this First Supplemental Indenture or in the Subordinated Debentures
is intended to or shall impair, as among the Company, its creditors other than
the holders of Senior Indebtedness of the Company, and the holders of the
Subordinated Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Subordinated Debentures the
principal of (and premium, if any) and interest on the Subordinated Debentures
as and
13
<PAGE> 17
when the same shall become due and payable in accordance with their terms, or
is intended to or shall affect the relative rights of the holders of the
Subordinated Debentures and creditors of the Company, as the case may be, other
than the holders of Senior Indebtedness of the Company, as the case may be, nor
shall anything herein or therein prevent the Trustee or the holder of any
Subordinated Debenture from exercising all remedies otherwise permitted by
applicable law upon default under the Indenture, subject to the rights, if any,
under this Article of the holders of such Senior Indebtedness in respect of
cash, property or securities of the Company, as the case may be, received upon
the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of Section
7.01 of the Indenture, and the holders of the Subordinated Debentures shall be
entitled to conclusively rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the holders of the
Subordinated Debentures, for the purposes of ascertaining the Persons entitled
to participate in such distribution, the holders of Senior Indebtedness and
other indebtedness of the Company, as the case may be, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article.
SECTION 6.5. Trustee to Effectuate Subordination.
Each holder of Subordinated Debentures, by such holder's
acceptance thereof, authorizes and directs the Trustee on such holder's behalf
to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article and appoints the Trustee such holder's
attorney-in-fact for any and all such purposes.
SECTION 6.6. Notice by the Company.
The Company shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Company that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Subordinated Debentures pursuant to the provisions of this Article.
Notwithstanding the provisions of this Article or any other provision of the
Indenture and this First Supplemental Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Subordinated Debentures pursuant to the provisions of this Article, unless and
until a Responsible Officer of the Trustee shall have received written notice
thereof from the Company or a holder or holders of Senior Indebtedness or from
any trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 7.01 of the Indenture, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section at least two Business Days prior
14
<PAGE> 18
to the date upon which, by the terms hereof, any money may become payable for
any purpose (including, without limitation, the payment of the principal of (or
premium, if any) or interest on any Subordinated Debenture), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such money and to apply the same to the purposes
for which they were received, and shall not be affected by any notice to the
contrary that may be received by it within two Business Days prior to such
date.
The Trustee, subject to the provisions of Section 7.02 of the
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness of the Company, as the case may be (or a trustee on behalf of such
holder), to establish that such notice has been given by a holder of such
Senior Indebtedness or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of such Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent to
the rights of such Person under this Article, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 6.7. Rights of the Trustee; holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article in respect of any Senior Indebtedness
at any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness of the
Company, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article, and no
implied covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into the Indenture or this First Supplemental
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of such Senior Indebtedness and, subject to the
provisions of Section 7.02 of the Indenture, the Trustee shall not be liable to
any holder of such Senior Indebtedness if it shall pay over or deliver to
holders of Subordinated Debentures, the Company or any other Person money or
assets to which any holder of such Senior Indebtedness shall be entitled by
virtue of this Article or otherwise.
15
<PAGE> 19
SECTION 6.8. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein provided shall
at any time in any way be prejudiced or impaired by any act or failure to act
on the part of the Company, as the case may be, or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company,
as the case may be, with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may, at any time
and from time to time, without the consent of or notice to the Trustee or the
holders of the Subordinated Debentures, without incurring responsibility to the
holders of the Subordinated Debentures and without impairing or releasing the
subordination provided in this Article or the obligations hereunder of the
holders of the Subordinated Debentures to the holders of such Senior
Indebtedness, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
such Senior Indebtedness, or otherwise amend or supplement in any manner such
Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any
manner for the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company, as the case may be, and
any other Person.
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. Listing on an Exchange.
If the Subordinated Debentures are to be issued as a Global
Debenture in connection with the distribution of the Subordinated Debentures to
the holders of the Preferred Securities upon a Dissolution Event, the Company
will use its best efforts to list such Subordinated Debentures on the New York
Stock Exchange or on such other exchange as the Preferred Securities are then
listed.
16
<PAGE> 20
ARTICLE VIII
FORM OF DEBENTURE
SECTION 8.1. Form of Debenture.
The Subordinated Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the following
forms:
(FORM OF FACE OF DEBENTURE)
[IF THE Debenture IS TO BE A GLOBAL Debenture, INSERT - This
Debenture is a Global Debenture within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depositary or a nominee of a
Depositary. This Debenture is exchangeable for Subordinated Debentures
registered in the name of a person other than the Depositary or its nominee
only in the limited circumstances described in the Indenture, and no transfer
of this Debenture (other than a transfer of this Debenture as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except
in limited circumstances.
Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any Debenture issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.]
No. ______________________________
ILLINOIS POWER COMPANY
___% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE 2044
Illinois Power Company, an Illinois corporation (the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
______________, or registered assigns, the principal sum of _____________
Dollars ($___________) on _________, ____, and to pay interest on said
principal sum from ____________, 1995, or from the most recent interest payment
date
17
<PAGE> 21
(each such date, an "Interest Payment Date") to which interest has been paid or
duly provided for, quarterly (subject to deferral as set forth herein) in
arrears on March 31, June 30, September 30 and December 31 of each year
commencing December 31, 1995, at the rate of ___% per annum until the principal
hereof shall have become due and payable, and on any overdue principal and
premium, if any, and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment
of interest at the same rate per annum compounded quarterly. The amount of
interest payable on any Interest Payment Date shall be computed on the basis of
a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on this Debenture is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the person
in whose name this Debenture (or one or more Predecessor Securities, as defined
in said Indenture) is registered at the close of business on the regular record
date for such interest installment, which shall be the close of business on the
business day next preceding such Interest Payment Date. [IF PURSUANT TO THE
PROVISIONS OF THE INDENTURE THE SUBORDINATED DEBENTURES ARE NO LONGER
REPRESENTED BY A GLOBAL DEBENTURE -- which shall be the close of business on
the _____ business day next preceding such Interest Payment Date.] Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the registered holders on such regular record date and
may be paid to the Person in whose name this Debenture (or one or more
Predecessor Securities) is registered at the close of business on a special
record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the registered holders of this
series of Subordinated Debentures not less than 10 days prior to such special
record date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Subordinated Debentures may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. The principal
of (and premium, if any) and the interest on this Debenture shall be payable at
the office or agency of the Trustee maintained for that purpose in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
registered holder at such address as shall appear in the Security Register.
Notwithstanding the foregoing, so long as the holder of this Debenture is the
Property Trustee, the payment of the principal of (and premium, if any) and
interest on this Debenture will be made at such place and to such account as
may be designated by the Property Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all
18
<PAGE> 22
Senior Indebtedness, and this Debenture is issued subject to the provisions of
the Indenture with respect thereto. Each holder of this Debenture, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
so provided and (c) appoints the Trustee his or her attorney-in-fact for any
and all such purposes. Each Holder hereof, by his or her acceptance hereof,
hereby waives all notice of the acceptance of the subordination provisions
contained herein and in the Indenture by each holder of Senior Indebtedness,
whether now outstanding or hereafter incurred, and waives reliance by each such
holder upon said provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by or on behalf of the Trustee.
The provisions of this Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed.
Dated ____________________________
ILLINOIS POWER COMPANY
By: _______________________________________
Name:
Title
Attest:
By: _______________________________________
Name:
Title:
19
<PAGE> 23
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Subordinated Debentures of the series of
Subordinated Debentures described in the within-mentioned Indenture.
______________________________
as Trustee
or as Authentication Agent
By____________________________ By___________________________
Authorized Signatory Authorized Signatory
20
<PAGE> 24
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of
Subordinated Debentures of the Company (herein sometimes referred to as the
"Subordinated Debentures"), specified in the Indenture, all issued or to be
issued in one or more series under and pursuant to an Indenture dated as of
_______, 1995, duly executed and delivered between the Company and Wilmington
Trust Company, as Trustee (the "Trustee"), as supplemented by the First
Supplemented Indenture dated as of _______, 1995, between the Company and the
Trustee (the Indenture as so supplemented, the "Indenture"), to which Indenture
and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the
Subordinated Debentures. By the terms of the Indenture, the Subordinated
Debentures are issuable in series that may vary as to amount, date of maturity,
rate of interest and in other respects as provided in the Indenture. This
series of Subordinated Debentures is limited in aggregate principal amount as
specified in said First Supplemental Indenture.
Because of the occurrence and continuation of a Tax Event, in
certain circumstances, this Debenture may become due and payable at the
principal amount together with any interest accrued thereon (the "Redemption
Price"). The Redemption Price shall be paid prior to 12:00 noon, New York
time, on the date of such redemption or at such earlier time as the Company
determines. The Company shall have the right to redeem this Debenture at the
option of the Company, without premium or penalty, in whole or in part at any
time on or after ________, 2000 (an "Optional Redemption"), or at any time in
certain circumstances upon the occurrence of a Tax Event, at a redemption price
equal to 100% of the principal amount plus any accrued but unpaid interest, to
the date of such redemption (the "Optional Redemption Price"). Any redemption
pursuant to this paragraph will be made upon not less than 30 days nor more
than 60 days notice, at the Optional Redemption Price. If the Subordinated
Debentures are only partially redeemed by the Company pursuant to an Optional
Redemption, the Subordinated Debentures will be redeemed pro rata or by lot or
by any other method utilized by the Trustee; provided that if, at the time of
redemption, the Subordinated Debentures are registered as a Global Debenture,
the Depositary shall determine the principal amount of such Subordinated
Debentures held by each Debentureholder to be redeemed in accordance with its
procedures.
In the event of redemption of this Debenture in part only, a
new Debenture or Subordinated Debentures of this series for the unredeemed
portion hereof will be issued in the name of the holder hereof upon the
cancellation hereof.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the Subordinated
Debentures may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture.
21
<PAGE> 25
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than 66 2/3% in
aggregate principal amount of the Subordinated Debentures of each series
affected at the time outstanding, as defined in the Indenture, to execute
supplemental indentures for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights of the holders
of the Subordinated Debentures; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Subordinated Debentures of
any series, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon, or reduce any premium payable
upon the redemption thereof, without the consent of the holder of each
Debenture so affected, or (ii) reduce the aforesaid percentage of Subordinated
Debentures, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of each Debenture
then outstanding and affected thereby. The Indenture also contains provisions
permitting the holders of 66 2/3% in aggregate principal amount of the
Subordinated Debentures of any series at the time outstanding affected thereby,
on behalf of all of the holders of the Subordinated Debentures of such series,
to waive any past default in the performance of any of the covenants contained
in the Indenture, or established pursuant to the Indenture with respect to such
series, and its consequences, except a default in the payment of the principal
of or premium, if any, or interest on any of the Subordinated Debentures of
such series. Any such consent or waiver by the registered holder of this
Debenture (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such holder and upon all future holders and owners of this
Debenture and of any Debenture issued in exchange herefor or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at
the rate and in the money herein prescribed.
The Company shall have the right at any time during the term
of the Subordinated Debentures and from time to time to extend the interest
payment period of such Subordinated Debentures for up to 20 consecutive
quarters (an "Extended Interest Payment Period"), at the end of which period
the Company shall pay all interest then accrued and unpaid (together with
interest thereon at the rate specified for the Subordinated Debentures to the
extent that payment of such interest is enforceable under applicable law).
Before the termination of any such Extended Interest Payment Period, the
Company may further extend such Extended Interest Payment Period, provided that
such Extended Interest Payment Period together with all such further extensions
thereof shall not exceed 20 consecutive quarters. At the termination of any
such Extended Interest Payment Period and upon the payment of all accrued and
unpaid interest and any additional amounts then due, the Company may commence a
new Extended Interest Payment Period.
22
<PAGE> 26
As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable by the registered
holder hereof on the Security Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Trustee
in the City and State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or the Trustee duly
executed by the registered holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Subordinated Debentures of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and the Security
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Security Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Debenture, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
[The Subordinated Debentures of this series are issuable only
in registered form without coupons in denominations of $25 and any integral
multiple thereof.] [This Global Debenture is exchangeable for Subordinated
Debentures in definitive form only under certain limited circumstances set
forth in the Indenture. Subordinated Debentures of this series so issued are
issuable only in registered form without coupons in denominations of $25 and
any integral multiple thereof.] As provided in the Indenture and subject to
certain limitations herein and therein set forth, Subordinated Debentures of
this series so issued are exchangeable for a like aggregate principal amount of
Subordinated Debentures of this series of a different authorized denomination,
as requested by the holder surrendering the same.
All terms used in this Debenture that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
23
<PAGE> 27
ARTICLE IX
ORIGINAL ISSUE OF SUBORDINATED DEBENTURES
SECTION 9.1. Original Issue of Subordinated Debentures.
Subordinated Debentures in the aggregate principal amount of
$_____ may, upon execution of this First Supplemental Indenture, be executed by
the Company and delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and deliver said Subordinated Debentures to or
upon the written order of the Company, signed by its Chairman, its Vice
Chairman, its President, or any Vice President and its Treasurer or an
Assistant Treasurer, without any further action by the Company.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Ratification of Indenture.
The Indenture, as supplemented by this First Supplemental
Indenture, is in all respects ratified and confirmed, and this First
Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.
SECTION 10.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not
by the Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or sufficiency
of this First Supplemental Indenture.
SECTION 10.3. Governing Law.
This First Supplemental Indenture and each Subordinated
Debenture shall be deemed to be a contract made under the internal laws of the
State of New York, and for all purposes shall be construed in accordance with
the laws of said State.
SECTION 10.4. Separability.
In case any one or more of the provisions contained in this
First Supplemental Indenture or in the Subordinated Debentures shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provisions of this First Supplemental Indenture or of the Subordinated
Debentures, but this First Supplemental Indenture and the Subordinated
Debentures shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
24
<PAGE> 28
SECTION 10.5. Counterparts.
This First Supplemental Indenture may be executed in any
number of counterparts each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
25
<PAGE> 29
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, on the date or dates indicated in
the acknowledgements and as of the day and year first above written.
ILLINOIS POWER COMPANY
By ______________________
Name:
Title:
[Seal]
Attest:
By:______________________
THE WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By ______________________
Name:
Title:
Attest:
By:___________________
26
<PAGE> 30
STATE OF )
COUNTY OF MACON) SS
On the _____ day of _______________, 1995, before me personally came
_______________ to be known, who, being by me duly sworn, did depose and say
that he is the _____________ of ILLINOIS POWER COMPANY one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal of
office this _____ day of _______________, 1995.
___________________________________________________
Notary Public
STATE OF ________)
COUNTY OF _______) SS
On the _____ day of _______________, 1995, before me personally came
_______________ to be known, who, being by me duly sworn, did depose and say
that he is the _____________ of WILMINGTON TRUST COMPANY one of the
corporations described in and which executed the above instrument; that he
knows the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal of
office this _____ day of _______________, 1995.
___________________________________________________
Notary Public
27
<PAGE> 1
EXHIBIT 4(H)
=========================
FORM OF
PREFERRED SECURITIES GUARANTEE AGREEMENT
ILLINOIS POWER COMPANY
DATED AS OF _______________, 1995
=========================
<PAGE> 2
CROSS-REFERENCE TABLE
FOR THE PREFERRED SECURITIES GUARANTEE AGREEMENT
<TABLE>
<CAPTION>
SECTION OF SECTION OF
TRUST INDENTURE GUARANTEE
OF 1939, AS AMENDED AGREEMENT
- ------------------- ---------
<S><C>
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(a)
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(c), 2.8
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5, 3.2
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1, 3.2
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4(a), 2.6
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
318(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
319(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
- --------------------------
</TABLE>
Note: This Cross-Reference Table shall not, for any purpose, be deemed to
be a part of the Guarantee Agreement and shall not have any bearing
on the interpretation of its terms or provisions.
2
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.3 Reports by the Preferred Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . . . . . 6
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.8 Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee . . . . . . . . . . . . . . . . . 7
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee . . . . . . . . . . . . . . . . . 10
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.2 Waiver of Notice and Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.3 Obligations Not Affected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.4 Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.2 Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 9.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 9.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 9.4 Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
ii
<PAGE> 5
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of _______, 1995, is executed and delivered by Illinois
Power Company, an Illinois corporation (the "Guarantor"), and Wilmington Trust
Company, not in its individual capacity but solely as trustee (the "Preferred
Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of Illinois Power
Financing I, a Delaware statutory business trust (the "Issuer").
W I T N E S S E T H:
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of ________, 1995, among the trustees of
the Issuer named therein, the Guarantor, as sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof 4,000,000 preferred securities, having an
aggregate liquidation amount of $100,000,000, designated the _____% Trust
Originated Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Preferred Securities Guarantee, to pay
to the Holders of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set
forth herein; and
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee") in substantially
identical terms to this Preferred Securities Guarantee for the benefit of the
holders of the Common Securities (as defined herein), except that if an Event
of Default (as defined in the Indenture), has occurred and is continuing, the
rights of holders of the Common Securities to receive Guarantee Payments under
the Common Securities Guarantee are subordinated to the rights of Holders of
Preferred Securities to receive Guarantee Payments under this Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Preferred Securities, which purchase the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Preferred
Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context
otherwise requires:
<PAGE> 6
(a) Capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have
the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
(c) all references to "the Preferred Securities
Guarantee" or "this Preferred Securities Guarantee"
are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee
to Articles and Sections are to Articles and Sections
of this Preferred Securities Guarantee, unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Preferred Securities
Guarantee, unless otherwise defined in this Preferred
Securities Guarantee or unless the context otherwise
requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred
Guarantee Trustee at which the corporate trust business of the Preferred
Guarantee Trustee shall, at any particular time, be principally administered,
which office at the date of execution of this Agreement is located at Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001.
"Covered Person" means any Holder or beneficial owner of
Preferred Securities.
"Debentures" means the series of junior subordinated debt
securities of the Guarantor designated the ___% Junior Subordinated Deferrable
Interest Debentures due 2044 held by the Property Trustee (as defined in the
Declaration) of the Issuer.
2
<PAGE> 7
"Direction" by a Person means a written direction signed: (a)
if the Person is a natural person, by that Person; or (b) in any other case, in
the name of such person by one or more Authorized Officers of that Person.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Preferred Securities, to the extent the Issuer shall have funds available
therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has funds available therefor, with respect to any Preferred
Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions on
the Preferred Securities to the date of payment, to the extent the Issuer shall
have funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer
(in either case, the "Liquidation Distribution"). If an event of default under
the Indenture has occurred and is continuing, the rights of holders of the
Common Securities to receive payments under the Common Securities Guarantee
Agreement are subordinated to the rights of Holders of Preferred Securities to
receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee,
any Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of _______, 1995,
between the Guarantor (the "Debenture Issuer") and Wilmington Trust Company, as
trustee, and any indenture supplemental thereto pursuant to which certain
subordinated debt securities of the Debenture Issuer are to be issued to the
Property Trustee of the Issuer.
"66 2/3% in liquidation amount of the Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 66 2/3% of the
liquidation amount (including the stated amount that would
3
<PAGE> 8
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Guarantee Trustee" means Wilmington Trust Company,
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred
Guarantee Trustee, any officer within the Corporate Trust Office of the
Preferred Guarantee Trustee, including any vice-president, any assistant
vice-president, any assistant secretary, the treasurer, any assistant treasurer
or other officer of the Corporate Trust Office of the Preferred Guarantee
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Successor Preferred Guarantee Trustee" means a successor
Preferred Guarantee Trustee possessing the qualifications to act as Preferred
Guarantee Trustee under Section 4.1.
4
<PAGE> 9
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions; and
(b) if and to the extent that any provision of this
Preferred Securities Guarantee limits, qualifies or conflicts with the duties
imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee
Trustee with a list, in such form as the Preferred Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the Preferred
Securities ("List of Holders") as of such date, (i) within 14 Business
Days after January 1 and June 30 of each year, and (ii) at any other time
within 30 days of receipt by the Guarantor of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Preferred Guarantee Trustee, provided, that the Guarantor shall not be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Preferred
Guarantee Trustee by the Guarantor. The Preferred Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture
Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Preferred
Guarantee Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Preferred Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee
such documents, reports and information as required by Section 314 of the Trust
Indenture Act (if any)
5
<PAGE> 10
and the compliance certificate required by Section 314 of the Trust Indenture
Act in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this Preferred Securities Guarantee that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) of the Trust
Indenture Act may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of 66 2/3% in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days
after a Responsible Officer has knowledge of the occurrence of an Event of
Default, transmit by mail, first class postage prepaid, to the Holders of the
Preferred Securities, notices of all Events of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided, that, the Preferred
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed
to have knowledge of any Event of Default unless the Preferred Guarantee
Trustee shall have received written notice, or a Responsible Officer of the
Preferred Guarantee Trustee charged with the administration of the Declaration
shall have obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described
in this Preferred Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
6
<PAGE> 11
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by
the Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee
shall automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee has occurred and is
continuing, the Preferred Guarantee Trustee shall enforce this Preferred
Securities Guarantee for the benefit of the Holders of the Preferred
Securities.
(c) The Preferred Guarantee Trustee, before the
occurrence of any Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Preferred Securities Guarantee, and no
implied covenants shall be read into this Preferred Securities Guarantee
against the Preferred Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to a Responsible Officer of the Preferred Guarantee Trustee, the
Preferred Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Preferred Securities Guarantee and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Preferred Securities Guarantee
shall be construed to relieve the Preferred Guarantee Trustee from liability
for its own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express
provisions of this Preferred Securities Guarantee, and the
Preferred Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth
7
<PAGE> 12
in this Preferred Securities Guarantee, and no implied
covenants or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee;
and
(B) in the absence of bad faith on the part of
the Preferred Guarantee Trustee, the Preferred Guarantee
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Preferred Guarantee Trustee and conforming to the requirements
of this Preferred Securities Guarantee; but in the case of any
such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Preferred Securities
Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer
of the Preferred Guarantee Trustee, unless it shall be proved that the
Preferred Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than 66
2/3% in liquidation amount of the Preferred Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Preferred Guarantee Trustee, or exercising any trust
or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee
shall require the Preferred Guarantee Trustee to expend or risk its
own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers, if the Preferred Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Preferred Securities Guarantee or indemnity, reasonably satisfactory
to the Preferred Guarantee Trustee, against such risk or liability is
not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively
rely, and shall be fully protected in acting or refraining from acting
upon, any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order,
8
<PAGE> 13
bond, debenture, note, other evidence of indebtedness or other paper
or document believed by it to be genuine and to have been signed, sent
or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Preferred Securities Guarantee shall be sufficiently evidenced by
a Direction or an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Preferred Guarantee
Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with
counsel, and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Guarantor or any of its Affiliates
and may include any of its employees. The Preferred Guarantee Trustee
shall have the right at any time to seek instructions concerning the
administration of this Preferred Securities Guarantee from any court
of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by
this Preferred Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Preferred
Guarantee Trustee such security and indemnity, reasonably satisfactory
to the Preferred Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Preferred Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be
requested by the Preferred Guarantee Trustee; provided that, nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement,
9
<PAGE> 14
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Preferred Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys,
and the Preferred Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee
or its agents hereunder shall bind the Holders of the Preferred
Securities, and the signature of the Preferred Guarantee Trustee or
its agents alone shall be sufficient and effective to perform any such
action. No third party shall be required to inquire as to the
authority of the Preferred Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this Preferred
Securities Guarantee, both of which shall be conclusively evidenced by
the Preferred Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the Preferred Guarantee
Trustee (i) may request instructions from the Holders of 66 2/3% in
liquidation amount of the Preferred Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such
instructions.
(b) No provision of this Preferred Securities Guarantee
shall be deemed to impose any duty or obligation on the Preferred Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Preferred Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power
or authority available to the Preferred Guarantee Trustee shall be construed to
be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not
assume any responsibility for their correctness. The Preferred Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Preferred Securities Guarantee.
10
<PAGE> 15
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred
to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall
cease to be eligible to so act under Section 4.1(a), the Preferred Guarantee
Trustee shall immediately resign in the manner and with the effect set out in
Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustees
(a) Subject to Section 4.2(b), the Preferred Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed
in accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Preferred Guarantee Trustee and delivered to the
Guarantor.
(c) The Preferred Guarantee Trustee appointed to office
shall hold office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal
11
<PAGE> 16
or resignation. The Preferred Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Preferred Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor Preferred Guarantee
Trustee has been appointed and has accepted such appointment by instrument in
writing executed by such Successor Preferred Guarantee Trustee and delivered to
the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall
have been appointed and accepted appointment as provided in this Section 4.2
within 60 days after delivery to the Guarantor of an instrument of resignation,
the resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for
the acts or omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities
Guarantee or removal or resignation of the Preferred Guarantee Trustee pursuant
to this Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee
all amounts accrued to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this
Preferred Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
12
<PAGE> 17
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Preferred Securities Guarantee shall in no way be affected
or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer
of all or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities (other
than an extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from the extension
of any interest payment period on the Debentures or any extension of the
maturity date of the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on
the part of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
13
<PAGE> 18
SECTION 5.4 Rights of Holders
(a) The Holders of 66 2/3% in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting of any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Preferred Securities Guarantee or
exercising any trust or power conferred upon the Preferred Guarantee Trustee
under this Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce
this Preferred Securities Guarantee, any Holder of Preferred Securities may
institute a legal proceeding directly against the Guarantor to enforce its
rights under this Preferred Securities Guarantee, without first instituting a
legal proceeding against the Issuer, the Preferred Guarantee Trustee or any
other Person.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Preferred Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Preferred Securities
Guarantee; provided, however, that the Guarantor shall not (except to the
extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under
this Preferred Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Preferred Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
14
<PAGE> 19
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if
there shall have occurred an Event of Default or an event of default under the
Declaration, then (a) the Guarantor shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock, (b) the
Guarantor shall not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities (including guarantees)
issued by the Guarantor which rank pari passu with or junior to the Debentures
or (c) the Guarantor shall not make any guarantee payments with respect to the
foregoing (other than pursuant to the Preferred Securities Guarantee
Agreement); provided, however, the Guarantor may declare and pay a stock
dividend where the dividend stock is the same stock as that on which the
dividend is being paid.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other liabilities of the Guarantor, including the
Debentures, except those liabilities of the Guarantor made pari passu or
subordinate by their terms, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Guarantor and with any
guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any Affiliate of the Guarantor, and (iii)
senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate upon (i)
full payment of the Redemption Price of all Preferred Securities, (ii) the
distribution of the Debentures to the Holders of all of the Preferred
Securities or (iii) full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing,
this Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Preferred
Securities must restore payment of any sums paid under the Preferred Securities
or under this Preferred Securities Guarantee.
15
<PAGE> 20
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except
that an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Preferred Securities
might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees
and expenses) of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder. The obligation to indemnify as set forth in this Section
8.2 shall survive the termination of this Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred
Securities Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding.
16
<PAGE> 21
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of at least 66 2/3% in liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Preferred Securities.
The provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by registered or certified mail, as
follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Department
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders of the Preferred Securities):
Illinois Power Company
500 South 27th Street
Decatur, Illinois 62525
Attention: Treasurer
(c) If given to any Holder of Preferred Securities, at
the address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
17
<PAGE> 22
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit
of the Holders of the Preferred Securities and, subject to Section 3.1(a), is
not separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
ILLINOIS.
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day
and year first above written.
ILLINOIS POWER COMPANY,
as Guarantor
By:
-------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Preferred Guarantee Trustee
By:
--------------------------
Name:
Title:
18
<PAGE> 1
[SCHIFF HARDIN & WAITE LETTERHEAD]
EXHIBIT 5(A)
Robert J. Regan
(312) 258-5606
October 20, 1995
Illinois Power Company
500 S. 27th Street
Decatur, IL 62525-1805
Ladies and Gentlemen:
We are acting as counsel for Illinois Power Company, an Illinois
corporation (the "Company"), and Illinois Power Financing I, a Delaware
business trust (the "Trust"), in connection with the proposed (i) issuance and
sale by the Trust of up to $100,000,000 of ___% Trust Originated Preferred
Securities of the Trust representing preferred undivided beneficial interests
in the assets of the Trust (the "Preferred Securities"), (ii) issuance by the
Company of a Guarantee for the benefit of the holders from time to time of the
Preferred Securities and (iii) issuance and sale by the Company of Subordinated
Debentures to the Trust under an Indenture to be entered into between the
Company and Wilmington Trust Company, as trustee (the "Trustee"), all as
contemplated by the Registration Statement on Form S-3 (the "Registration
Statement") proposed to be filed by the Company and the Trust with the
Securities and Exchange Commission on or about the date hereof for the
registration of the Preferred Securities, the Guarantee and the Subordinated
Debentures under the Securities Act of 1933, as amended (the "Act").
As counsel to the Company and the Trust, we have examined (i) the
Registration Statement and exhibits thereto, including the preliminary
prospectus in the Registration Statement (the "Prospectus"), (ii) the Company's
Amended and Restated Articles of Incorporation and By-Laws, as amended, (iii)
documents issued by public officials as to the existence of the Company and the
Trust under the laws of the States of Illinois and Delaware, respectively, and
(iv) such other documents and records of the Company and the Trust and such
matters of law as we deemed necessary to enable us to render this opinion. We
have assumed the continued exemption of the contemplated transactions from the
requirements of the Public Utility Holding Company Act of 1935, as amended, the
genuineness of all signatures, the authenticity of all documents submitted to
us as original counterparts, and the conformity to the originals of all
documents submitted to us as certified or photostatic copies.
<PAGE> 2
Illinois Power Company
October 20, 1995
Page Two
Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation validly organized and existing
under and by virtue of the laws of the State of Illinois.
2. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act.
3. The Company has corporate power and authority to execute and
deliver the Guarantee and the Indenture and to authorize and sell the
Subordinated Debentures.
4. The Subordinated Debentures and the Guarantee will be legal,
valid and binding obligations of the Company enforceable in accordance with
their terms against the Company, except to the extent enforceability thereof
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting generally the enforcement of creditors' rights and by
the application of general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or at
law), when: (a) the Registration Statement, as it may be amended, shall have
become effective under the Act, no stop order shall have been issued by the
Securities and Exchange Commission relating thereto, and any applicable state
securities or Blue Sky laws shall have been complied with; (b) the order of the
Illinois Commerce Commission in Docket No. 95-0344 authorizing the Company to
execute and deliver the Indenture and any supplemental indentures thereto and
to issue the Subordinated Debentures shall remain in effect; (c) the Company's
Board of Directors, or a duly authorized committee thereof, shall have taken
such action as may be necessary to authorize the issuance by the Company of the
Subordinated Debentures and the Guarantee on the terms set forth in or
contemplated by the Registration Statement, as it may be amended, and the
exhibits thereto; (d) the Indenture shall have been qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), the Indenture
and any supplemental indentures thereto shall have been appropriately executed
and delivered by the Company and the Trustee, the terms of the Subordinated
Debentures shall have been duly established, and the Subordinated Debentures
shall have been issued and authenticated in accordance with the applicable
provisions of the Indenture and any supplemental indentures thereto and all
necessary corporate authorizations; (e) the terms of the Guarantee shall have
been duly established in accordance with applicable law, the Guarantee shall
have been appropriately executed and delivered by the Company, and the
Guarantee shall have been qualified under the Trust Indenture Act; (f) the
Preferred Securities to which the Guarantee and the Subordinated Debentures
relate shall have been duly issued and sold and the purchase price therefor
shall have been received by the Trust, and the Amended and Restated Declaration
of Trust shall have been qualified under the Trust Indenture Act; and (g) the
Company shall have received the consideration payable for the Subordinated
Debentures.
<PAGE> 3
Illinois Power Company
October 20, 1995
Page Three
We hereby confirm that, in all material respects, the discussion under
the caption "United States Federal Income Taxation" in the Prospectus is a fair
and accurate summary of the matters addressed therein, based upon current law
and the assumptions stated or referred to therein. There can be no assurance
that contrary positions may not be taken by the Internal Revenue Service.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference of this firm under the captions
"United States Federal Income Taxation" and "Legal Matters" in the Prospectus.
We are members of the Illinois Bar and do not hold ourselves out as
experts on the laws of any other state. Accordingly, in rendering this
opinion, we have relied, as to all matters governed by the laws of the State of
Delaware, upon the opinion of even date herewith of Richards, Layton & Finger,
P.A., special Delaware counsel for the Company and the Trust, which is being
filed as an exhibit to the Registration Statement.
Very truly yours,
SCHIFF HARDIN & WAITE
By: /s/ Robert J. Regan
-----------------------
Robert J. Regan
RJR:ck
<PAGE> 1
Exhibit 5(b)
[Letterhead of Richards, Layton & Finger]
October 20, 1995
Illinois Power Financing I
c/o Illinois Power Company
500 South 27th Street
Decatur, IL 62525
Re: Illinois Power Financing I
Ladies and Gentlemen:
We have acted as special Delaware counsel for Illinois Power Company,
an Illinois corporation ("Illinois Power"), and Illinois Power Financing I, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of October 17,
1995 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on October 17, 1995;
(b) The Declaration of Trust of the Trust, dated as of October 17,
1995, by and among Illinois Power, as Sponsor, and the trustees of the Trust
named therein;
<PAGE> 2
Illinois Power Financing I
October 20, 1995
Page 2
(c) The Registration Statement (the "Registration Statement") on
Form S-3, including a preliminary prospectus (the "Prospectus") relating to the
__% Trust Originated Preferred Securities of the Trust representing preferred
undivided beneficial interests in the assets of the Trust (each, a "Preferred
Security" and collectively, the "Preferred Securities"), as proposed to be
filed by Illinois Power and the Trust with the Securities and Exchange
Commission on or about October 20, 1995;
(d) A form of Amended and Restated Declaration of Trust of the
Trust, to be entered into among Illinois Power, as Sponsor, the trustees of the
Trust named therein, and the holders, from time to time, of undivided
beneficial interests in the assets of the Trust (including Annex I and Exhibits
A-1 and A-2 thereto) (the "Trust Agreement"), attached as an exhibit to the
Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated October
20, 1995, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular,
we have not reviewed any document (other than the documents listed in
paragraphs (a) through (e) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed that there exists
no provision in any document that we have not reviewed that is inconsistent
with the opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the foregoing
documents, the statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed to be true,
complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
<PAGE> 3
Illinois Power Financing I
October 20, 1995
Page 3
For purposes of this opinion, we have assumed (i) that the Trust
Agreement and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
creation or due organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents examined by us under
the laws of the jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of natural persons who are parties to the documents
examined by us, (iv) that each of the parties to the documents examined by us
has the power and authority to execute and deliver, and to perform its
obligations under, such documents, (v) the due authorization, execution and
delivery by all parties thereto of all documents examined by us, (vi) the
receipt by each Person to whom a Preferred Security is to be issued by the
Trust (collectively, the "Preferred Security Holders") of a Preferred Security
Certificate for such Preferred Security and the payment for the Preferred
Security acquired by it, in accordance with the Trust Agreement and the
Registration Statement, and (vii) that the Preferred Securities are issued and
sold to the Preferred Security Holders in accordance with the Trust Agreement
and the Registration Statement. We have not participated in the preparation of
the Registration Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our
opinions are rendered only with respect to Delaware laws and rules, regulations
and orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Business Trust Act.
2. The Preferred Securities will represent valid and, subject to
the qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
<PAGE> 4
Illinois Power Financing I
October 20, 1995
Page 4
3. The Preferred Security Holders, 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. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We also
consent to Schiff Hardin & Waite's relying as to matters of Delaware law upon
this opinion in connection with an opinion to be rendered by it in connection
with the Registration Statement. In addition, we hereby consent to the use of
our name under the heading "Legal Matters" in the Prospectus. In giving the
foregoing consents, we do not thereby admit that we come within the category of
Persons whose consent is required under Section 7 of the Securities Act of
1933, as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder. Except as stated above, without our prior written
consent, this opinion may not be furnished or quoted to, or relied upon by, any
other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
PMA/BJK/jj
<PAGE> 1
EXHIBIT 12
ILLINOIS POWER COMPANY
STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
1990 1990 1991 1992 1993
-------------- -------------- -------- -------- --------
SUPPLEMENTAL**
<S> <C> <C> <C> <C> <C>
Earnings Available for Fixed Charges:
Net Income (Loss) per "Statement of Income"........... $(78,484) $(78,484) $109,244 $122,088 $(56,038)
Add:
Income Taxes:
Current......................................... 21,307 21,307 29,369 22,930 25,260
Deferred -- Net................................. 36,545 36,545 45,990 63,739 82,057
Allocated income taxes............................ 2,608 2,608 (1,348) (6,632) (12,599)
Investment tax credit -- deferred................. (14,121) (14,121) (11) (519) (782)
Income tax effect of disallowed costs............. (24,759) (24,759) -- -- (70,638)
Interest on long-term debt........................ 191,559 191,559 176,179 160,795 154,110
Amortization of debt expense and premium-net, and
other interest charges.......................... 13,162 13,162 9,004 12,195 17,007
One-third of all rentals (Estimated to be
representative of the interest component........ 5,053 5,053 4,996 5,117 5,992
Interest on In-Core Fuel.......................... 6,802 6,802 8,862 8,278 6,174
Disallowed Clinton Plant Costs.................... -- 160,328 -- -- --
-------- -------- -------- -------- --------
Earnings available for fixed charges.................. $159,672 $320,000 $382,285 $387,991 $150,543
======== ======== ======== ======== ========
Fixed charges:
Interest on long-term debt.......................... $191,559 $191,559 $176,179 $160,795 $154,110
Amortization of debt expense and premium-net, and
other interest charges............................ 31,093 31,093 25,553 25,785 27,619
One-third of all rentals (Estimated to be
representative of the interest component)......... 5,053 5,053 4,996 5,117 5,992
-------- -------- -------- -------- --------
Fixed charges......................................... $227,705 $227,705 $206,728 $191,697 $187,721
======== ======== ======== ======== ========
Ratio of earnings to fixed charges.................... 0.70* 1.41 1.85 2.02 0.80*
======== ======== ======== ======== ========
<CAPTION>
12 MONTHS
ENDED
JUNE 30,
1993 1994 1995
-------------- -------- -----------
SUPPLEMENTAL**
<S> <C> <C> <C>
Earnings Available for Fixed Charges:
Net Income (Loss) per "Statement of Income"........... $(56,038) $180,242 $ 185,474
Add:
Income Taxes:
Current......................................... 25,260 58,354 55,089
Deferred -- Net................................. 82,057 71,177 74,036
Allocated income taxes............................ (12,599) (5,736) (3,035)
Investment tax credit -- deferred................. (782) (11,331) (10,730)
Income tax effect of disallowed costs............. (70,638) -- --
Interest on long-term debt........................ 154,110 135,115 132,777
Amortization of debt expense and premium-net, and
other interest charges.......................... 17,007 15,826 19,591
One-third of all rentals (Estimated to be
representative of the interest component........ 5,992 5,847 5,398
Interest on In-Core Fuel.......................... 6,174 7,185 6,167
Disallowed Clinton Plant Costs.................... 270,956 -- --
-------- -------- --------
Earnings available for fixed charges.................. $421,499 $456,679 $ 464,767
======== ======== ========
Fixed charges:
Interest on long-term debt.......................... $154,110 $135,115 $ 132,777
Amortization of debt expense and premium-net, and
other interest charges............................ 27,619 25,381 28,661
One-third of all rentals (Estimated to be
representative of the interest component)......... 5,992 5,847 5,398
-------- -------- --------
Fixed charges......................................... $187,721 $166,343 $ 166,836
======== ======== ========
Ratio of earnings to fixed charges.................... 2.25 2.75 2.79
======== ======== ========
</TABLE>
- -------------------------
* Earnings are inadequate to cover fixed charges. Additional earnings
(thousands) of $68,033 and $37,178 for 1990 and 1993, respectively are
required to attain a one-to-one ratio of Earnings to Fixed Charges.
** Supplemental ratio of earnings to fixed charges presented to exclude
nonrecurring item -- Disallowed Clinton Plant Costs.
<PAGE> 2
ILLINOIS POWER COMPANY
STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1990 1990 1991 1992 1993
------------ -------------- -------- -------- --------
SUPPLEMENTAL**
<S> <C> <C> <C> <C> <C>
Earnings Available for Fixed Charges and Preferred Stock
Dividend Requirements:
Net Income (Loss) per "Statement of Income"................... $(78,484) $(78,484) $109,244 $122,088 $(56,038)
Add:
Income Taxes:
Current................................................. 21,307 21,307 29,369 22,930 25,260
Deferred -- Net......................................... 36,545 36,545 45,990 63,739 82,057
Allocated income taxes.................................... 2,608 2,608 (1,348) (6,632) (12,599)
Investment tax credit -- deferred......................... (14,121) (14,121) (11) (519) (782)
Income tax effect of disallowed costs..................... (24,759) (24,759) -- -- (70,638)
Interest on long-term debt................................ 191,559 191,559 176,179 160,795 154,110
Amortization of debt expense and premium-net, and other
interest charges........................................ 13,162 13,162 9,004 12,195 17,007
One-third of all rentals (Estimated to be representative
of the interest component).............................. 5,053 5,053 4,996 5,117 5,992
Interest on In-Core Fuel.................................. 6,802 6,802 8,862 8,278 6,174
Disallowed Clinton Plant Costs............................ -- 160,328 -- -- --
-------- -------- -------- -------- --------
Earnings available for fixed charges and preferred stock
dividend requirements....................................... $159,672 $320,000 $382,285 $387,991 $150,543
======== ======== ======== ======== ========
Fixed charges:
Interest on long-term debt.................................. $191,559 $191,559 $176,179 $160,795 $154,110
Amortization of debt expense and premium-net, and other
interest charges.......................................... 31,093 31,093 25,553 25,785 27,619
One-third of all rentals (Estimated to be representative of
the interest component)................................... 5,053 5,053 4,996 5,117 5,992
Earnings required (before taxes) for preferred stock
dividends................................................. 36,839*** 66,743 52,023 48,691 26,123***
-------- -------- -------- -------- --------
Fixed charges and preferred stock dividend requirements....... $264,544 $294,448 $258,751 $240,388 $213,844
======== ======== ======== ======== ========
Ratio of earnings to fixed charges............................ 0.60* 1.09 1.48 1.61 0.70*
======== ======== ======== ======== ========
<CAPTION>
12 MONTHS
JUNE 30,
1993 1994 1995
-------------- -------- ---------
SUPPLEMENTAL**
<S> <C> <C> <C>
Earnings Available for Fixed Charges and Preferred Stock
Dividend Requirements:
Net Income (Loss) per "Statement of Income"................... $(56,038) $180,242 $185,474
Add:
Income Taxes:
Current................................................. 25,260 58,354 55,089
Deferred -- Net......................................... 82,057 71,177 74,036
Allocated income taxes.................................... (12,599) (5,736) (3,035)
Investment tax credit -- deferred......................... (782) (11,331) (10,730)
Income tax effect of disallowed costs..................... (70,638) -- --
Interest on long-term debt................................ 154,110 135,115 132,777
Amortization of debt expense and premium-net, and other
interest charges........................................ 17,007 15,826 19,591
One-third of all rentals (Estimated to be representative
of the interest component).............................. 5,992 5,847 5,398
Interest on In-Core Fuel.................................. 6,174 7,185 6,167
Disallowed Clinton Plant Costs............................ 270,956 -- --
-------- -------- --------
Earnings available for fixed charges and preferred stock
dividend requirements....................................... $421,499 $456,679 $464,767
======== ======== ========
Fixed charges:
Interest on long-term debt.................................. $154,110 $135,115 $132,777
Amortization of debt expense and premium-net, and other
interest charges.......................................... 27,619 25,381 28,661
One-third of all rentals (Estimated to be representative of
the interest component)................................... 5,992 5,847 5,398
Earnings required (before taxes) for preferred stock
dividends................................................. 43,100 39,947 38,507
-------- -------- --------
Fixed charges and preferred stock dividend requirements....... $230,821 $206,290 $205,343
======== ======== ========
Ratio of earnings to fixed charges............................ 1.83 2.21 2.26
======== ======== ========
</TABLE>
- -------------------------
* Earnings are inadequate to cover fixed charges. Additional earnings
(thousands) of $68,033 and $37,178 for 1990 and 1993, respectively, are
required to attain a one-to-one ratio of Earnings to Fixed Charges.
** Supplemental ratio of earnings to fixed charges presented to exclude
nonrecurring item -- Disallowed Clinton Plant Costs.
*** Because the Company incurred a pre-tax loss, these amounts are at the net
preferred dividend requirement level.
<PAGE> 1
EXHIBIT 23(C)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
February 1, 1995, which appears on page A-10 of the 1994 Annual Report to
Shareholders of Illinois Power Company in the appendix to the Illinois Power
Company Information Statement, which is incorporated by reference in Illinois
Power Company's Annual Report on Form 10-K for the year ended December 31, 1994.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
PRICE WATERHOUSE LLP
October 18, 1995
<PAGE> 1
EXHIBIT 25(a)
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) ____
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
ILLINOIS POWER COMPANY
(Exact name of obligor as specified in its charter)
Illinois 37-0344645
(State of incorporation) (I.R.S. employer identification no.)
500 South 27th Street
Decatur, Illinois 62525
(Address of principal executive offices) (Zip Code)
Subordinated Debentures of Illinois Power Company
(Title of the indenture securities)
================================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the
obligor is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section
321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Wilmington Trust Company, a corporation organized and existing under
the laws of Delaware, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of Wilmington and State of Delaware on the 16th day of October, 1995.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Donald G. MacKlean By: /s/ Emmett R. Harmon
----------------------- ----------------------
Assistant Secretary Name: Emmett R. Harmon
Title: Vice President
2
<PAGE> 3
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE> 4
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the
name of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment
filed in the Office of the Secretary of State on March 18, A.D. 1903, and the
Charter or Act of Incorporation of which company has been from time to time
amended and changed by merger agreements pursuant to the corporation law for
state banks and trust companies of the State of Delaware, does hereby alter and
amend its Charter or Act of Incorporation so that the same as so altered and
amended shall in its entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is WILMINGTON
TRUST COMPANY whose address is Rodney Square North, in said City.
In addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of Delaware
empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any
<PAGE> 5
Court of law or equity and to make and use a common seal, and alter
the seal at pleasure, to hold, purchase, convey, mortgage or
otherwise deal in real and personal estate and property, and to
appoint such officers and agents as the business of the Corporation
shall require, to make by-laws not inconsistent with the
Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive
deposits of money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of exchange, and
generally to use, exercise and enjoy all the powers, rights,
privileges and franchises incident to a corporation which are proper
or necessary for the transaction of the business of the Corporation
hereby created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of such
property, real or personal, against any claim or claims, adverse to
his interest therein, and to prepare and give certificates of title
for any lands or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management of funds,
and the purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property of every
sort and kind, from executors, administrators, guardians, public
officers, courts, receivers, assignees, trustees, and from all
fiduciaries, and from all other persons and individuals, and from
all corporations whether state, municipal, corporate or private, and
to rent boxes, safes, vaults and other receptacles for such
property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or
underwriting the stock, bonds or other obligations of any
corporation, association, state or municipality, and may receive and
manage any sinking
2
<PAGE> 6
fund therefor on such terms as may be agreed upon between the two
parties, and in like manner may act as Treasurer of any corporation
or municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond
or other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or
persons, for the faithful performance of any trust, office, duty,
contract or agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations, or in like
manner become surety upon any bond, recognizance, obligation,
judgment, suit, order, or decree to be entered in any court of
record within the State of Delaware or elsewhere, or which may now
or hereafter be required by any law, judge, officer or court in the
State of Delaware or elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity in the receiving, holding, managing, and disposing of any
and all estates and property, real, personal or mixed, and to be
appointed as such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator, guardian
or bailee by any persons, corporations, court, officer, or
authority, in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator, guardian,
bailee, or in any other trust capacity, it shall not be required to
give bond with surety, but its capital stock shall be taken and held
as security for the performance of the duties devolving upon it by
such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the performance
of any of the duties which it may undertake or be called upon to
perform, or for the assumption of any responsibility the said
Corporation
3
<PAGE> 7
may be entitled to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without the
State of Delaware, or of the Government of the United States, or of
any state, territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect, receipt for, and
dispose of interest, dividends and income upon and from any of the
bonds, mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in respect of
all such bonds, mortgages, debentures, notes, shares of capital
stock, securities, obligations, contracts, evidences of indebtedness
and other property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote thereon; to
invest and deal in and with any of the moneys of the Corporation
upon such securities and in such manner as it may think fit and
proper, and from time to time to vary or realize such investments;
to issue bonds and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the property held or
owned by the Corporation, and to sell and pledge such bonds, as and
when the Board of Directors shall determine, and in the promotion of
its said corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell, assign, transfer,
pledge, mortgage and convey real and personal property of any name
and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred
by the laws of the State of Delaware, it is hereby expressly provided
that the said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any part of
the world.
(2) To acquire the good will, rights, property and franchises
and to undertake the whole or any part of the assets and
liabilities of any person, firm, association or corporation, and to
pay for the same in cash, stock of this Corporation, bonds or
otherwise; to hold or in any manner to dispose of the whole or any
part of the property so purchased; to conduct in
4
<PAGE> 8
any lawful manner the whole or any part of any business so acquired,
and to exercise all the powers necessary or convenient in and about
the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner whatever
dispose of property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or corporation, and,
without limit as to amount, to draw, make, accept, endorse,
discount, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures, and other negotiable or
transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of,
real and personal property, of every class and description, in any
State, District, Territory or Colony of the United States, and in
any foreign country or place.
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except
where otherwise expressed in said paragraph) be nowise limited or
restricted by reference to or inference from the terms of any other
clause of this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the clauses of
this paragraph shall be regarded as independent objects, purposes
and powers.
FOURTH: - (a) The total number of shares of all classes of stock which
the Corporation shall have authority to issue is forty-one million
(41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter referred to as "Preferred
Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to
5
<PAGE> 9
time in one or more series as may from time to time be determined by
the Board of Directors each of said series to be distinctly
designated. All shares of any one series of Preferred Stock shall
be alike in every particular, except that there may be different
dates from which dividends, if any, thereon shall be cumulative, if
made cumulative. The voting powers and the preferences and
relative, participating, optional and other special rights of each
such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series
at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board of
Directors of the Corporation is hereby expressly granted authority
to fix by resolution or resolutions adopted prior to the issuance of
any shares of a particular series of Preferred Stock, the voting
powers and the designations, preferences and relative, optional and
other special rights, and the qualifications, limitations and
restrictions of such series, including, but without limiting the
generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock of
such series shall be paid, the extent of the preference or
relation, if any, of such dividends to the dividends payable
on any other class or classes, or series of the same or other
class of stock and whether such dividends shall be
cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same
for, shares of any other class or classes or of any series of
the same or any other class or classes of stock of the
Corporation and the terms and conditions of such conversion
or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices and
the time or times at which, and the terms and conditions on
which, Preferred Stock of such series may be redeemed.
6
<PAGE> 10
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the generality
of the foregoing include the right, voting as a series or by
itself or together with other series of Preferred Stock or
all series of Preferred Stock as a class, to elect one or
more directors of the Corporation if there shall have been a
default in the payment of dividends on any one or more series
of Preferred Stock or under such circumstances and on such
conditions as the Board of Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article FOURTH), if any, shall
have been met and after the Corporation shall have complied with all
the requirements, if any, with respect to the setting aside of sums
as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
FOURTH), and subject further to any conditions which may be fixed in
accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to
time by the Board of Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article FOURTH), to be distributed to the holders
of Preferred Stock in the event of voluntary or involuntary
liquidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation, the holders of the Common
Stock shall be entitled to receive all of the remaining
assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to stockholders
ratably in proportion to the number of shares of Common Stock
held by them respectively.
(3) Except as may otherwise be required by law or by
7
<PAGE> 11
the provisions of such resolution or resolutions as may
be adopted by the Board of Directors pursuant to section (b)
of this Article FOURTH, each holder of Common Stock shall have
one vote in respect of each share of Common Stock held on all
matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of Directors in the
resolution or resolutions adopted pursuant to authority granted in
section (b) of this Article FOURTH and the consent, by class or
series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and
rights of such other series shall be fixed by the Board of Directors
as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution
or resolutions as to any series of Preferred Stock adopted pursuant
to section (b) of this Article FOURTH that the consent of the
holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting
thereon shall be required for the issuance of any or all other
series of Preferred Stock.
8
<PAGE> 12
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be increased or
decreased from time to time by the affirmative vote of the holders
of a majority of the stock of the Corporation entitled to vote
thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and directors of
the third class shall be elected to hold office for a term expiring
at the third succeeding annual meeting. Any vacancies in the Board
of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the
Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any directors so chosen
shall hold office until the next annual election of directors. At
such election, the stockholders shall elect a successor to such
director to hold office until the next election of the class for
which such director shall have been chosen and until his successor
shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any
9
<PAGE> 13
incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the By-Laws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations which
are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not made
in accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be
taken without a meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied.
10
<PAGE> 14
SIXTH: - The Directors shall choose such officers, agent and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee, which Committee, to the extent provided in
said resolution, or in the By-Laws of the Company, shall have and
may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and shall
have power to authorize the seal of the Corporation to be affixed to
all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the
world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
FOURTEENTH: - Meetings of the Directors may be held
outside of the State of Delaware at such places as may be from time
to time designated by the Board, and the Directors may keep the
books of the Company outside of the State of Delaware at such places
as may be from time to time designated by them.
11
<PAGE> 15
FIFTEENTH: - (a) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair market
value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the Corporation,
or any merger or consolidation of the Corporation with any of
its Subsidiaries or any similar transaction (whether or not
with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares
of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly
owned by any Interested Stockholder, or any Affiliate of any
Interested Stockholder,
shall require the affirmative vote of the holders of at least
two-thirds of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors,
considered for the purpose of this Article FIFTEENTH as one class
("Voting Shares"). Such affirmative vote shall be required
notwithstanding the
12
<PAGE> 16
fact that no vote may be required, or that some lesser percentage
may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any
one or more of clauses (A) through (E) of paragraph 1 of the
section (a).
(b) The provisions of section (a) of this Article FIFTEENTH shall
not be applicable to any particular business combination and such
business combination shall require only such affirmative vote as is
required by law and any other provisions of the Charter or Act of
Incorporation of By-Laws if such business combination has been
approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm,
corporation or other entity.
(2) "Interested Stockholder" shall mean, in respect of
any business combination, any person (other than the
Corporation or any Subsidiary) who or which as of the record
date for the determination of stockholders entitled to notice
of and to vote on such business combination, or immediately
prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of
more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at
any time within two years prior thereto beneficially owned
by any Interested Stockholder, and such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving a
public offering within the meaning of the Securities Act
of 1933.
(3) A person shall be the "beneficial owner" of any
Voting Shares:
13
<PAGE> 17
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the passage
of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or
(ii) the right to vote pursuant to any agreement,
arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly,
by any other person with which such first mentioned person
or any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital
stock of the Corporation.
(4) The outstanding Voting Shares shall include shares
deemed owned through application of paragraph (3) above but
shall not include any other Voting Shares which may be
issuable pursuant to any agreement, or upon exercise of
conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the
respective meanings given those terms in Rule 12b- 2 of the
General Rules and Regulations under the Securities Exchange
Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a
majority of any class of equity security (as defined in Rule
3a11-1 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect in December 31,
1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of
Investment Stockholder set forth in paragraph (2) of this
section (c), the term "Subsidiary" shall mean only a
corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty
to determine for the purposes of this Article FIFTEENTH on
the basis of information known to them, (1) the number of
Voting Shares beneficially owned by
14
<PAGE> 18
any person (2) whether a person is an Affiliate or
Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters
referred to in paragraph (3) of section (c), or (4) whether
the assets subject to any business combination or the
consideration received for the issuance or transfer of
securities by the Corporation, or any Subsidiary has an
aggregate fair market value of $1,00,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this Charter
or Act of Incorporation by the By-Laws), the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles FIFTH, THIRTEENTH, FIFTEENTH or SIXTEENTH of this Charter
or Act of Incorporation.
SEVENTEENTH: (a) A Director of this Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except to the extent such
exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Laws as the same exists or
may hereafter be amended.
(b) Any repeal or modification of the foregoing
paragraph shall not adversely affect any right or protection
of a Director of the Corporation existing hereunder with
respect to any act or omission occurring prior to the time of
such repeal or modification."
15
<PAGE> 19
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON FEBRUARY 21, 1991
<PAGE> 20
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at
any time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be
given by mailing to each stockholder at least ten (10 days before said meeting,
at his last known address, a written or printed notice fixing the time and
place of such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one
vote, either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors
<PAGE> 21
shall be held on the third Thursday of each month at the principal office of
the Company, or at such other place and time as may be designated by the Board
of Directors, the Chairman of the Board, or the President.
Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect
from its own members a Chairman of the Board of Directors and a President who
may be the same person. The Board of Directors shall also elect at such
meeting a Secretary and a Treasurer, who may be the same person, may appoint at
any time such other committees and elect or appoint such other officers as it
may deem advisable. The Board of Directors may also elect at such meeting one
or more Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be
in charge of such of the departments or division of the Company as it may deem
advisable.
2
<PAGE> 22
ARTICLE III
COMMITTEES
Section I. Executive Committee
(A) The Executive Committee shall be composed of not
more than nine members who shall be selected by the Board of Directors from its
own members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers
of the Board of Directors when it is not in session to transact all business
for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal
office of the Company or elsewhere in its discretion at least once a week in
each week the Board is not regularly scheduled to meet. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Executive Committee may be held at any time
when a quorum is present.
(D) Minutes of each meeting of the Executive Committee
shall be kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company, and
shall direct the disposal of the same, in accordance with such rules and
regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of sufficient
severity to prevent the conduct and management of the affairs and business of
the Company by its directors and officers as contemplated by these By-Laws any
two available members of the Executive Committee as constituted immediately
prior to such disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the provisions of Article III of these By-Laws; and if less than three
members of the Trust Committee is constituted immediately prior to such
disaster shall be available for the transaction of its business, such Executive
Committee shall also be empowered to exercise all of the powers reserved to the
Trust Committee under Article III Section 2 hereof. In the event of the
unavailability, at such time, of a minimum of two members of such Executive
Committee, any three available directors shall constitute the Executive
Committee for the full conduct and management of the affairs and business of
the Company in accordance with the foregoing provisions of this Section.
3
<PAGE> 23
This By-Law shall be subject to implementation by Resolutions of the Board of
Directors presently existing or hereafter passed from time to time for that
purpose, and any provisions of these By-Laws(other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during such
a disaster period until it shall be determined by any interim Executive
Committee acting under this section that it shall be to the advantage of the
Company to resume the conduct and management of its affairs and business under
all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more
than thirteen members who shall be selected by the Board of Directors, a
majority of whom shall be members of the Board of Directors and who shall hold
office during the pleasure of the Board.
(B) The Trust Committee shall have general supervision
over the Trust Department and the investment of trust funds, in all matters,
however, being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal
office of the Company or elsewhere in its discretion at least once a month. A
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Trust Committee may be held
at any time when a quorum is present.
(D) Minutes of each meeting of the Trust Committee
shall be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its own members,
none of whom shall be an officer of the Company, and shall hold office at the
pleasure of the Board.
(B) The Audit Committee shall have general supervision
over the Audit Division in all matters however subject to the approval of the
Board of Directors; it shall consider all matters brought to its attention by
the officer in
4
<PAGE> 24
charge of the Audit Division, review all reports of examination of the Company
made by any governmental agency or such independent auditor employed for that
purpose, and make such recommendations to the Board of Directors with respect
thereto or with respect to any other matters pertaining to auditing the Company
as it shall deem desirable.
(C) The Audit Committee shall meet whenever and
wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall constitute a
quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not
more than five (5) members who shall be selected by the Board of Directors from
its own members who are not officers of the Company and who shall hold office
during the pleasure of the Board.
(B) The Compensation Committee shall in general advise
upon all matters of policy concerning the Company brought to its attention by
the management and from time to time review the management of the Company,
major organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be
called at any time by the Chairman of the Compensation Committee, the Chairman
of the Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be
elected by the Board of Directors as an associate director, to serve during the
pleasure of the Board.
(B) An associate director shall be entitled to attend
all directors meetings and participate in the discussion of all matters brought
to the Board, with the exception that he would have no right to vote. An
associate director will be eligible for appointment to Committees of the
Company, with the exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a
Committee
(A) In the absence or disqualification of any member of
any Committee created under Article III of the By-Laws
5
<PAGE> 25
of this Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absence or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time
confer and direct. He shall also exercise such powers and perform such duties
as may from time to time be agreed upon between himself and the President of
the Company.
Section 2. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed upon him by
statute or assigned to him by the Board of Directors in the absence of the
Chairman of the Board the President shall have the powers and duties of the
Chairman of the Board.
Section 3. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 4. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 5. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
6
<PAGE> 26
Section 6. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and
responsible for all monies, funds and valuables of the Company and for the
keeping of proper records of the evidence of property or indebtedness and of
all the transactions of the Company. He shall have general supervision of the
expenditures of the Company and shall report to the Board of Directors at each
regular meeting of the condition of the Company, and perform such other duties
as may be assigned to him from time to time by the Board of Directors of the
Executive Committee.
Section 7. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller and
such duties as may be prescribed by the Controller.
Section 8. The officer designated by the Board of Directors to be
in charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor
and such duties as may be prescribed by the officer in charge of the Audit
Division.
Section 9. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 10. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman
of the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.
7
<PAGE> 27
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.
Section 2. Certificate of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new
certificate or certificates shall be issued in lieu thereof. Duplicate
certificates of stock shall be issued only upon giving such security as may be
satisfactory to the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the
date for the payment of any dividend, or the date for the allotment of rights,
or the date when any change or conversion or exchange of capital stock shall go
into effect, or a date in connection with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
8
<PAGE> 28
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver
and the Secretary or any Assistant Secretary shall have full power and
authority to attest and affix the corporate seal of the Company to any and all
deeds, conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors
who serve as members of committees, other than salaried employees of the
Company, shall be paid such reasonable honoraria or fees for services as
members of committees as the Board of Directors shall from time to time
determine and directors and associate directors may be employed by the Company
for such special services as the Board of Directors may from time to time
determine and shall be paid for such special services so performed reasonable
compensation as may be determined by the Board of Directors.
9
<PAGE> 29
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless,
to the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or
was a director, officer, employee or agent of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee,
fiduciary or agent of another corporation or of a partnership, joint venture,
trust, enterprise or non-profit entity, including service with respect to
employee benefit plans, against all liability and loss suffered and expenses
reasonably incurred by such person. The Corporation shall indemnify a person
in connection with a proceeding initiated by such person only if the proceeding
was authorized by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided,
however, that the payment of expenses incurred by a Director officer in his
capacity as a Director or officer in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by the Director or
officer to repay all amounts advanced if it should be ultimately determined
that the Director or officer is not entitled to be indemnified under this
Article or otherwise.
(C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety days after a
written claim therefor has been received by the Corporation the claimant may
file suit to recover the unpaid amount of such claim and, if successful in
whole or in part, shall be entitled to be paid the expense of prosecuting such
claim. In any such action the Corporation shall have the burden of proving
that the claimant was not entitled to the requested indemnification of payment
of expenses under applicable law.
(D) The rights conferred on any person by this Article
X shall not be exclusive of any other rights which such person may have or
hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to
the time of such repeal or modification.
10
<PAGE> 30
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.
11
<PAGE> 31
EXHIBIT C
SECTION 321(B) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: October 16, 1995 By: /s/ Emmett R. Harmon
----------------------
Name: Emmett R. Harmon
Title: Vice President
<PAGE> 32
EXHIBIT "D"
NOTICE
This form is intended to assist state nonmember banks
and savings banks with state publication requirements.
It has not been approved by any state banking authorities.
Refer to your appropriate state banking authorities for
your state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ------------------------ --------------------
Name of Bank City
in the State of DELAWARE , at the close of business on June 30, 1995.
------------
<TABLE>
<CAPTION>
ASSETS Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins . . . . 189,183
Interest-bearing balances . . . . . . . . . . . . . . . . . 0
Held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . 960,718
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . 194,658
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
Securities purchased under agreements to resell . . . . . . . . . . . 173,715
Loans and lease financing receivables:
Loans and leases, net of unearned income. . 3,352,597
LESS: Allowance for loan and lease losses. . 45,914
LESS: Allocated transfer risk reserve. . . . 0
Loans and leases, net of unearned income, allowance, and reserve . . 3,306,683
Assets held in trading accounts . . . . . . . . . . . . . . . . . . . 0
Premises and fixed assets (including capitalized leases) . . . . . . 75,242
Other real estate owned . . . . . . . . . . . . . . . . . . . . . . . 14,515
Investments in unconsolidated subsidiaries and associated companies . 2,531
Customers' liability to this bank on acceptances outstanding . . . . 0
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . 4,645
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,399
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,087,289
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE> 33
<TABLE>
<S> <C>
LIABILITIES
Deposits:
In domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . 3,103,895
Noninterest-bearing. . . . 647,766
Interest-bearing . . . . . 2,456,129
Federal funds purchased . . . . . . . . . . . . . . . . . . . . . . . . 205,220
Securities sold under agreements to repurchase . . . . . . . . . . . . 181,985
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . 94,987
Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Other borrowed money: . . . . . . . . . . . . . . . . . . . . . . . . . ///////
With original maturity of one year or less . . . . . . . . . . 996,500
With original maturity of more than one year . . . . . . . . . 0
Mortgage indebtedness and obligations under capitalized leases . . . . 1,887
Bank's liability on acceptances executed and outstanding . . . . . . . 0
Subordinated notes and debentures . . . . . . . . . . . . . . . . . . . 0
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,721
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,685,195
Limited-life preferred stock and related surplus . . . . . . . . . . . 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus . . . . . . . . . . . . . 0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,118
Undivided profits and capital reserves . . . . . . . . . . . . . . . . 339,514
Net unrealized holding gains (losses) on available-for-sale securities. (38)
Total equity capital . . . . . . . . . . . . . . . . . . . . . . . . . 402,094
Total liabilities, limited-life preferred stock, and equity capital . . 5,087,289
</TABLE>
<TABLE>
<S> <C>
We, the undersigned directors, attest to I, David R. Gibson
the correctness of this statement of ----------------------
resources and liabilities. We declare Name
that it has been examined by us, and
to the best of our knowledge and belief Senior Vice President
has been prepared in conformance with ----------------------
the instructions and is true and correct. Title
/s/ Hugh E. Miller ] of the above-named bank
- -------------------- ] do hereby declare that
] this Report of Condition
/s/ R. C. Forney ] Directors is true and correct to
- -------------------- ] the best of my knowledge
] and belief.
/s/ Leonard W. Quill ]
- -------------------- /s/ David R. Gibson
------------------------
Signature
07/28/95
-----------------------
Date
</TABLE>
2
<PAGE> 1
EXHIBIT 25(b)
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) ____
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
ILLINOIS POWER COMPANY
ILLINOIS POWER FINANCING I
(Exact name of obligor as specified in its charter)
Illinois 37-0344645
Delaware Applied for
(State of incorporation) (I.R.S. employer identification no.)
500 South 27th Street
Decatur, Illinois 62525
(Address of principal executive offices) (Zip Code)
Preferred Securities of Illinois Power Financing I
(Title of the indenture securities)
================================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the
obligor is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section
321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Wilmington Trust Company, a corporation organized and existing under
the laws of Delaware, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of Wilmington and State of Delaware on the 16th day of October, 1995.
WILMINGTON TRUST COMPANY
[SEAL]
Attest:/s/ Donald G. MacKelcan By: /s/ Norma P. Closs
----------------------- ---------------------
Assistant Secretary Name: Norma P. Closs
Title: Vice President
2
<PAGE> 3
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE> 4
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the
name of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment
filed in the Office of the Secretary of State on March 18, A.D. 1903, and the
Charter or Act of Incorporation of which company has been from time to time
amended and changed by merger agreements pursuant to the corporation law for
state banks and trust companies of the State of Delaware, does hereby alter and
amend its Charter or Act of Incorporation so that the same as so altered and
amended shall in its entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is WILMINGTON
TRUST COMPANY whose address is Rodney Square North, in said City.
In addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of Delaware
empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any
<PAGE> 5
Court of law or equity and to make and use a common seal, and
alter the seal at pleasure, to hold, purchase, convey,
mortgage or otherwise deal in real and personal estate and
property, and to appoint such officers and agents as the
business of the Corporation shall require, to make by-laws not
inconsistent with the Constitution or laws of the United
States or of this State, to discount bills, notes or other
evidences of debt, to receive deposits of money, or securities
for money, to buy gold and silver bullion and foreign coins,
to buy and sell bills of exchange, and generally to use,
exercise and enjoy all the powers, rights, privileges and
franchises incident to a corporation which are proper or
necessary for the transaction of the business of the
Corporation hereby created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of
such property, real or personal, against any claim or claims,
adverse to his interest therein, and to prepare and give
certificates of title for any lands or premises in the State
of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management of
funds, and the purchase, sale, management and disposal of
property of all descriptions, and to prepare and execute all
papers which may be necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property
of every sort and kind, from executors, administrators,
guardians, public officers, courts, receivers, assignees,
trustees, and from all fiduciaries, and from all other
persons and individuals, and from all corporations whether
state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking
2
<PAGE> 6
fund therefor on such terms as may be agreed upon between
the two parties, and in like manner may act as Treasurer of
any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state, municipality,
body politic, corporation, association or person, either
alone or in conjunction with any other person or persons,
corporation or corporations.
(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding
places of responsibility or trust; to become surety for any
person, or persons, for the faithful performance of any
trust, office, duty, contract or agreement, either by itself
or in conjunction with any other person, or persons,
corporation, or corporations, or in like manner become surety
upon any bond, recognizance, obligation, judgment, suit,
order, or decree to be entered in any court of record within
the State of Delaware or elsewhere, or which may now or
hereafter be required by any law, judge, officer or court in
the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian, bailee, or
in any other trust capacity in the receiving, holding,
managing, and disposing of any and all estates and property,
real, personal or mixed, and to be appointed as such trustee,
trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian or bailee by
any persons, corporations, court, officer, or authority, in
the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other
trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon it
by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake or be
called upon to perform, or for the assumption of any
responsibility the said Corporation
3
<PAGE> 7
may be entitled to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without
the State of Delaware, or of the Government of the United
States, or of any state, territory, colony, or possession
thereof, or of any foreign government or country; to receive,
collect, receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages, debentures,
notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property held
and owned by it, and to exercise in respect of all such
bonds, mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of indebtedness
and other property, any and all the rights, powers and
privileges of individual owners thereof, including the right
to vote thereon; to invest and deal in and with any of the
moneys of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to time
to vary or realize such investments; to issue bonds and
secure the same by pledges or deeds of trust or mortgages of
or upon the whole or any part of the property held or owned
by the Corporation, and to sell and pledge such bonds, as and
when the Board of Directors shall determine, and in the
promotion of its said corporate business of investment and to
the extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate or
interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any
part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association or
corporation, and to pay for the same in cash, stock of this
Corporation, bonds or otherwise; to hold or in any manner to
dispose of the whole or any part of the property so
purchased; to conduct in
4
<PAGE> 8
any lawful manner the whole or any part of any business so
acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such
business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner
whatever dispose of property, real, personal or mixed,
wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or corporation,
and, without limit as to amount, to draw, make, accept,
endorse, discount, execute and issue promissory notes,
drafts, bills of exchange, warrants, bonds, debentures, and
other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of
its operations and businesses, without restriction to the
same extent as natural persons might or could do, to purchase
or otherwise acquire, to hold, own, to mortgage, sell, convey
or otherwise dispose of, real and personal property, of every
class and description, in any State, District, Territory or
Colony of the United States, and in any foreign country or
place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said paragraph) be
nowise limited or restricted by reference to or inference
from the terms of any other clause of this or any other
paragraph in this charter, but that the objects, purposes and
powers specified in each of the clauses of this paragraph
shall be regarded as independent objects, purposes and
powers.
FOURTH: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter referred to as "Preferred
Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common
Stock").
(b) Shares of Preferred Stock may be issued from time to
5
<PAGE> 9
time in one or more series as may from time to time be determined by
the Board of Directors each of said series to be distinctly
designated. All shares of any one series of Preferred Stock shall
be alike in every particular, except that there may be different
dates from which dividends, if any, thereon shall be cumulative, if
made cumulative. The voting powers and the preferences and
relative, participating, optional and other special rights of each
such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series
at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board of
Directors of the Corporation is hereby expressly granted authority
to fix by resolution or resolutions adopted prior to the issuance of
any shares of a particular series of Preferred Stock, the voting
powers and the designations, preferences and relative, optional and
other special rights, and the qualifications, limitations and
restrictions of such series, including, but without limiting the
generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock of
such series shall be paid, the extent of the preference or
relation, if any, of such dividends to the dividends payable
on any other class or classes, or series of the same or other
class of stock and whether such dividends shall be
cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same
for, shares of any other class or classes or of any series of
the same or any other class or classes of stock of the
Corporation and the terms and conditions of such conversion
or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices and
the time or times at which, and the terms and conditions on
which, Preferred Stock of such series may be redeemed.
6
<PAGE> 10
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the generality
of the foregoing include the right, voting as a series or by
itself or together with other series of Preferred Stock or
all series of Preferred Stock as a class, to elect one or
more directors of the Corporation if there shall have been a
default in the payment of dividends on any one or more series
of Preferred Stock or under such circumstances and on such
conditions as the Board of Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article FOURTH), if any, shall
have been met and after the Corporation shall have complied with all
the requirements, if any, with respect to the setting aside of sums
as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
FOURTH), and subject further to any conditions which may be fixed in
accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to
time by the Board of Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article FOURTH), to be distributed to the holders
of Preferred Stock in the event of voluntary or involuntary
liquidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation, the holders of the Common
Stock shall be entitled to receive all of the remaining
assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to stockholders
ratably in proportion to the number of shares of Common Stock
held by them respectively.
(3) Except as may otherwise be required by law or by
7
<PAGE> 11
the provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b) of
this Article FOURTH, each holder of Common Stock shall have
one vote in respect of each share of Common Stock held on all
matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of Directors in the
resolution or resolutions adopted pursuant to authority granted in
section (b) of this Article FOURTH and the consent, by class or
series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and
rights of such other series shall be fixed by the Board of Directors
as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution
or resolutions as to any series of Preferred Stock adopted pursuant
to section (b) of this Article FOURTH that the consent of the
holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting
thereon shall be required for the issuance of any or all other
series of Preferred Stock.
8
<PAGE> 12
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be increased or
decreased from time to time by the affirmative vote of the holders
of a majority of the stock of the Corporation entitled to vote
thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and directors of
the third class shall be elected to hold office for a term expiring
at the third succeeding annual meeting. Any vacancies in the Board
of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the
Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any directors so chosen
shall hold office until the next annual election of directors. At
such election, the stockholders shall elect a successor to such
director to hold office until the next election of the class for
which such director shall have been chosen and until his successor
shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any
9
<PAGE> 13
incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the By-Laws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations which
are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not made
in accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be
taken without a meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied.
10
<PAGE> 14
SIXTH: - The Directors shall choose such officers, agent and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee, which Committee, to the extent provided in
said resolution, or in the By-Laws of the Company, shall have and
may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and shall
have power to authorize the seal of the Corporation to be affixed to
all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the
world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
FOURTEENTH: - Meetings of the Directors may be held
outside of the State of Delaware at such places as may be from time
to time designated by the Board, and the Directors may keep the
books of the Company outside of the State of Delaware at such places
as may be from time to time designated by them.
11
<PAGE> 15
FIFTEENTH: - (a) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair market
value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the Corporation,
or any merger or consolidation of the Corporation with any of
its Subsidiaries or any similar transaction (whether or not
with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares
of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly
owned by any Interested Stockholder, or any Affiliate of any
Interested Stockholder,
shall require the affirmative vote of the holders of at least
two-thirds of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors,
considered for the purpose of this Article FIFTEENTH as one class
("Voting Shares"). Such affirmative vote shall be required
notwithstanding the
12
<PAGE> 16
fact that no vote may be required, or that some lesser percentage
may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any
one or more of clauses (A) through (E) of paragraph 1 of the
section (a).
(b) The provisions of section (a) of this Article FIFTEENTH shall
not be applicable to any particular business combination and such
business combination shall require only such affirmative vote as is
required by law and any other provisions of the Charter or Act of
Incorporation of By-Laws if such business combination has been
approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm,
corporation or other entity.
(2) "Interested Stockholder" shall mean, in respect of
any business combination, any person (other than the
Corporation or any Subsidiary) who or which as of the record
date for the determination of stockholders entitled to notice
of and to vote on such business combination, or immediately
prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of
more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at
any time within two years prior thereto beneficially owned
by any Interested Stockholder, and such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving a
public offering within the meaning of the Securities Act
of 1933.
(3) A person shall be the "beneficial owner" of any
Voting Shares:
13
<PAGE> 17
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the passage
of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or
(ii) the right to vote pursuant to any agreement,
arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly,
by any other person with which such first mentioned person
or any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital
stock of the Corporation.
(4) The outstanding Voting Shares shall include shares
deemed owned through application of paragraph (3) above but
shall not include any other Voting Shares which may be
issuable pursuant to any agreement, or upon exercise of
conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the
respective meanings given those terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange
Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a
majority of any class of equity security (as defined in Rule
3a11-1 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect in December 31,
1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of
Investment Stockholder set forth in paragraph (2) of this
section (c), the term "Subsidiary" shall mean only a
corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty
to determine for the purposes of this Article FIFTEENTH on
the basis of information known to them, (1) the number of
Voting Shares beneficially owned by
14
<PAGE> 18
any person (2) whether a person is an Affiliate or Associate
of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters
referred to in paragraph (3) of section (c), or (4) whether
the assets subject to any business combination or the
consideration received for the issuance or transfer of
securities by the Corporation, or any Subsidiary has an
aggregate fair market value of $1,00,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this Charter
or Act of Incorporation by the By-Laws), the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles FIFTH, THIRTEENTH, FIFTEENTH or SIXTEENTH of this Charter
or Act of Incorporation.
SEVENTEENTH: (a) A Director of this Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except to the extent such
exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Laws as the same exists or
may hereafter be amended.
(b) Any repeal or modification of the foregoing
paragraph shall not adversely affect any right or protection
of a Director of the Corporation existing hereunder with
respect to any act or omission occurring prior to the time of
such repeal or modification."
15
<PAGE> 19
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON FEBRUARY 21, 1991
<PAGE> 20
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at
any time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be
given by mailing to each stockholder at least ten (10 days before said meeting,
at his last known address, a written or printed notice fixing the time and
place of such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one
vote, either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors
<PAGE> 21
shall be held on the third Thursday of each month at the principal office of
the Company, or at such other place and time as may be designated by the Board
of Directors, the Chairman of the Board, or the President.
Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect
from its own members a Chairman of the Board of Directors and a President who
may be the same person. The Board of Directors shall also elect at such
meeting a Secretary and a Treasurer, who may be the same person, may appoint at
any time such other committees and elect or appoint such other officers as it
may deem advisable. The Board of Directors may also elect at such meeting one
or more Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be
in charge of such of the departments or division of the Company as it may deem
advisable.
2
<PAGE> 22
ARTICLE III
COMMITTEES
Section I. Executive Committee
(A) The Executive Committee shall be composed of not
more than nine members who shall be selected by the Board of Directors from its
own members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers
of the Board of Directors when it is not in session to transact all business
for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal
office of the Company or elsewhere in its discretion at least once a week in
each week the Board is not regularly scheduled to meet. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Executive Committee may be held at any time
when a quorum is present.
(D) Minutes of each meeting of the Executive Committee
shall be kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company, and
shall direct the disposal of the same, in accordance with such rules and
regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of sufficient
severity to prevent the conduct and management of the affairs and business of
the Company by its directors and officers as contemplated by these By-Laws any
two available members of the Executive Committee as constituted immediately
prior to such disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the provisions of Article III of these By-Laws; and if less than three
members of the Trust Committee is constituted immediately prior to such
disaster shall be available for the transaction of its business, such Executive
Committee shall also be empowered to exercise all of the powers reserved to the
Trust Committee under Article III Section 2 hereof. In the event of the
unavailability, at such time, of a minimum of two members of such Executive
Committee, any three available directors shall constitute the Executive
Committee for the full conduct and management of the affairs and business of
the Company in accordance with the foregoing provisions of this Section.
3
<PAGE> 23
This By-Law shall be subject to implementation by Resolutions of the Board of
Directors presently existing or hereafter passed from time to time for that
purpose, and any provisions of these By-Laws(other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during such
a disaster period until it shall be determined by any interim Executive
Committee acting under this section that it shall be to the advantage of the
Company to resume the conduct and management of its affairs and business under
all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more
than thirteen members who shall be selected by the Board of Directors, a
majority of whom shall be members of the Board of Directors and who shall hold
office during the pleasure of the Board.
(B) The Trust Committee shall have general supervision
over the Trust Department and the investment of trust funds, in all matters,
however, being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal
office of the Company or elsewhere in its discretion at least once a month. A
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Trust Committee may be held
at any time when a quorum is present.
(D) Minutes of each meeting of the Trust Committee
shall be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its own members,
none of whom shall be an officer of the Company, and shall hold office at the
pleasure of the Board.
(B) The Audit Committee shall have general supervision
over the Audit Division in all matters however subject to the approval of the
Board of Directors; it shall consider all matters brought to its attention by
the officer in
4
<PAGE> 24
charge of the Audit Division, review all reports of examination of the Company
made by any governmental agency or such independent auditor employed for that
purpose, and make such recommendations to the Board of Directors with respect
thereto or with respect to any other matters pertaining to auditing the Company
as it shall deem desirable.
(C) The Audit Committee shall meet whenever and
wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall constitute a
quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not
more than five (5) members who shall be selected by the Board of Directors from
its own members who are not officers of the Company and who shall hold office
during the pleasure of the Board.
(B) The Compensation Committee shall in general advise
upon all matters of policy concerning the Company brought to its attention by
the management and from time to time review the management of the Company,
major organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be
called at any time by the Chairman of the Compensation Committee, the Chairman
of the Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be
elected by the Board of Directors as an associate director, to serve during the
pleasure of the Board.
(B) An associate director shall be entitled to attend
all directors meetings and participate in the discussion of all matters brought
to the Board, with the exception that he would have no right to vote. An
associate director will be eligible for appointment to Committees of the
Company, with the exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a
Committee
(A) In the absence or disqualification of any member of
any Committee created under Article III of the By-Laws
5
<PAGE> 25
of this Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absence or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time
confer and direct. He shall also exercise such powers and perform such duties
as may from time to time be agreed upon between himself and the President of
the Company.
Section 2. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed upon him by
statute or assigned to him by the Board of Directors in the absence of the
Chairman of the Board the President shall have the powers and duties of the
Chairman of the Board.
Section 3. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 4. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 5. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
6
<PAGE> 26
Section 6. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and
responsible for all monies, funds and valuables of the Company and for the
keeping of proper records of the evidence of property or indebtedness and of
all the transactions of the Company. He shall have general supervision of the
expenditures of the Company and shall report to the Board of Directors at each
regular meeting of the condition of the Company, and perform such other duties
as may be assigned to him from time to time by the Board of Directors of the
Executive Committee.
Section 7. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller and
such duties as may be prescribed by the Controller.
Section 8. The officer designated by the Board of Directors to be
in charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor
and such duties as may be prescribed by the officer in charge of the Audit
Division.
Section 9. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 10. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman
of the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.
7
<PAGE> 27
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.
Section 2. Certificate of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new
certificate or certificates shall be issued in lieu thereof. Duplicate
certificates of stock shall be issued only upon giving such security as may be
satisfactory to the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the
date for the payment of any dividend, or the date for the allotment of rights,
or the date when any change or conversion or exchange of capital stock shall go
into effect, or a date in connection with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
8
<PAGE> 28
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver
and the Secretary or any Assistant Secretary shall have full power and
authority to attest and affix the corporate seal of the Company to any and all
deeds, conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors
who serve as members of committees, other than salaried employees of the
Company, shall be paid such reasonable honoraria or fees for services as
members of committees as the Board of Directors shall from time to time
determine and directors and associate directors may be employed by the Company
for such special services as the Board of Directors may from time to time
determine and shall be paid for such special services so performed reasonable
compensation as may be determined by the Board of Directors.
9
<PAGE> 29
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless,
to the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or
was a director, officer, employee or agent of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee,
fiduciary or agent of another corporation or of a partnership, joint venture,
trust, enterprise or non-profit entity, including service with respect to
employee benefit plans, against all liability and loss suffered and expenses
reasonably incurred by such person. The Corporation shall indemnify a person
in connection with a proceeding initiated by such person only if the proceeding
was authorized by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided,
however, that the payment of expenses incurred by a Director officer in his
capacity as a Director or officer in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by the Director or
officer to repay all amounts advanced if it should be ultimately determined
that the Director or officer is not entitled to be indemnified under this
Article or otherwise.
(C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety days after a
written claim therefor has been received by the Corporation the claimant may
file suit to recover the unpaid amount of such claim and, if successful in
whole or in part, shall be entitled to be paid the expense of prosecuting such
claim. In any such action the Corporation shall have the burden of proving
that the claimant was not entitled to the requested indemnification of payment
of expenses under applicable law.
(D) The rights conferred on any person by this Article
X shall not be exclusive of any other rights which such person may have or
hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to
the time of such repeal or modification.
10
<PAGE> 30
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.
11
<PAGE> 31
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: October 16, 1995 By: /s/ Norma P. Closs
-----------------------
Name: Norma P. Closs
Title: Vice President
<PAGE> 32
EXHIBIT "D"
NOTICE
This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It
has not been approved by any state banking authorities.
Refer to your appropriate state banking authorities for your
state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ------------------------------------- ----------------------
Name of Bank City
in the State of DELAWARE , at the close of business on June 30, 1995.
<TABLE>
<CAPTION>
ASSETS
Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins . . . . . . . 189,183
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . 0
Held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . . . . 960,718
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . 194,658
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
Securities purchased under agreements to resell . . . . . . . . . . . . . . 173,715
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 3,352,597
LESS: Allowance for loan and lease losses. . . . . . 45,914
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve . 3,306,683
Assets held in trading accounts . . . . . . . . . . . . . . . . . . . . . . 0
Premises and fixed assets (including capitalized leases) . . . . . . . . . 75,242
Other real estate owned . . . . . . . . . . . . . . . . . . . . . . . . . . 14,515
Investments in unconsolidated subsidiaries and associated companies . . . . 2,531
Customers' liability to this bank on acceptances outstanding . . . . . . . 0
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,645
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,399
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,087,289
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE> 33
<TABLE>
<S> <C>
LIABILITIES
Deposits:
In domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . 3,103,895
Noninterest-bearing . . . . . . . . 647,766
Interest-bearing. . . . . . . . . . 2,456,129
Federal funds purchased . . . . . . . . . . . . . . . . . . . . . . . . 205,220
Securities sold under agreements to repurchase . . . . . . . . . . . . 181,985
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . 94,987
Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Other borrowed money: . . . . . . . . . . . . . . . . . . . . . . . . . ///////
With original maturity of one year or less . . . . . . . . . . 996,500
With original maturity of more than one year . . . . . . . . . 0
Mortgage indebtedness and obligations under capitalized leases . . . . 1,887
Bank's liability on acceptances executed and outstanding . . . . . . . 0
Subordinated notes and debentures . . . . . . . . . . . . . . . . . . . 0
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,721
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,685,195
Limited-life preferred stock and related surplus . . . . . . . . . . . 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus . . . . . . . . . . . . . 0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,118
Undivided profits and capital reserves . . . . . . . . . . . . . . . . 339,514
Net unrealized holding gains (losses) on available-for-sale securities. (38)
Total equity capital . . . . . . . . . . . . . . . . . . . . . . . . . 402,094
Total liabilities, limited-life preferred stock, and equity capital . . 5,087,289
</TABLE>
<TABLE>
<S> <C>
We, the undersigned directors, attest to I, David R. Gibson
the correctness of this statement of ---------------------
resources and liabilities. We declare Name
that it has been examined by us, and
to the best of our knowledge and belief Senior Vice President
has been prepared in conformance with ---------------------
the instructions and is true and correct. Title
/s/ Hugh E. Miller ] of the above-named bank
- -------------------- ] do hereby declare that
] this Report of Condition
/s/ R. C. Forney ] Directors is true and correct to
- -------------------- ] the best of my knowledge
] and belief.
/s/ Leonard W. Quill ]
- -------------------- /s/ David R. Gibson
-------------------------
Signature
07/28/95
-------------------------
Date
</TABLE>
2
<PAGE> 1
EXHIBIT 25(c)
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) ____
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
ILLINOIS POWER COMPANY
(Exact name of obligor as specified in its charter)
Illinois 37-0344645
(State of incorporation) (I.R.S. employer identification no.)
500 South 27th Street
Decatur, Illinois 62525
(Address of principal executive offices) (Zip Code)
Subordinated Debentures of Illinois Power Company
(Title of the indenture securities)
================================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the
obligor is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section
321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Wilmington Trust Company, a corporation organized and existing under
the laws of Delaware, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of Wilmington and State of Delaware on the 16th day of October, 1995.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Donald G. MacKlean By: /s/ Norma P. Closs
---------------------- ----------------------
Assistant Secretary Name: Norma P. Closs
Title: Vice President
2
<PAGE> 3
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE> 4
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the
name of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment
filed in the Office of the Secretary of State on March 18, A.D. 1903, and the
Charter or Act of Incorporation of which company has been from time to time
amended and changed by merger agreements pursuant to the corporation law for
state banks and trust companies of the State of Delaware, does hereby alter and
amend its Charter or Act of Incorporation so that the same as so altered and
amended shall in its entirety read as follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is WILMINGTON
TRUST COMPANY whose address is Rodney Square North, in said City.
In addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of Delaware
empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any
<PAGE> 5
Court of law or equity and to make and use a common seal, and alter
the seal at pleasure, to hold, purchase, convey, mortgage or
otherwise deal in real and personal estate and property, and to
appoint such officers and agents as the business of the Corporation
shall require, to make by-laws not inconsistent with the
Constitution or laws of the United States or of this State, to
discount bills, notes or other evidences of debt, to receive
deposits of money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of exchange, and
generally to use, exercise and enjoy all the powers, rights,
privileges and franchises incident to a corporation which are proper
or necessary for the transaction of the business of the Corporation
hereby created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of such
property, real or personal, against any claim or claims, adverse to
his interest therein, and to prepare and give certificates of title
for any lands or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management of funds,
and the purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property of every
sort and kind, from executors, administrators, guardians, public
officers, courts, receivers, assignees, trustees, and from all
fiduciaries, and from all other persons and individuals, and from
all corporations whether state, municipal, corporate or private, and
to rent boxes, safes, vaults and other receptacles for such
property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or
underwriting the stock, bonds or other obligations of any
corporation, association, state or municipality, and may receive and
manage any sinking
2
<PAGE> 6
fund therefor on such terms as may be agreed upon between the two
parties, and in like manner may act as Treasurer of any corporation
or municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond
or other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or
persons, for the faithful performance of any trust, office, duty,
contract or agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations, or in like
manner become surety upon any bond, recognizance, obligation,
judgment, suit, order, or decree to be entered in any court of
record within the State of Delaware or elsewhere, or which may now
or hereafter be required by any law, judge, officer or court in the
State of Delaware or elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity in the receiving, holding, managing, and disposing of any
and all estates and property, real, personal or mixed, and to be
appointed as such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator, guardian
or bailee by any persons, corporations, court, officer, or
authority, in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator, guardian,
bailee, or in any other trust capacity, it shall not be required to
give bond with surety, but its capital stock shall be taken and held
as security for the performance of the duties devolving upon it by
such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the performance
of any of the duties which it may undertake or be called upon to
perform, or for the assumption of any responsibility the said
Corporation
3
<PAGE> 7
may be entitled to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without the
State of Delaware, or of the Government of the United States, or of
any state, territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect, receipt for, and
dispose of interest, dividends and income upon and from any of the
bonds, mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in respect of
all such bonds, mortgages, debentures, notes, shares of capital
stock, securities, obligations, contracts, evidences of indebtedness
and other property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote thereon; to
invest and deal in and with any of the moneys of the Corporation
upon such securities and in such manner as it may think fit and
proper, and from time to time to vary or realize such investments;
to issue bonds and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the property held or
owned by the Corporation, and to sell and pledge such bonds, as and
when the Board of Directors shall determine, and in the promotion of
its said corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell, assign, transfer,
pledge, mortgage and convey real and personal property of any name
and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred
by the laws of the State of Delaware, it is hereby expressly provided
that the said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any part of
the world.
(2) To acquire the good will, rights, property and franchises
and to undertake the whole or any part of the assets and
liabilities of any person, firm, association or corporation, and to
pay for the same in cash, stock of this Corporation, bonds or
otherwise; to hold or in any manner to dispose of the whole or any
part of the property so purchased; to conduct in
4
<PAGE> 8
any lawful manner the whole or any part of any business so acquired,
and to exercise all the powers necessary or convenient in and about
the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner whatever
dispose of property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or corporation, and,
without limit as to amount, to draw, make, accept, endorse,
discount, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures, and other negotiable or
transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of,
real and personal property, of every class and description, in any
State, District, Territory or Colony of the United States, and in
any foreign country or place.
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except
where otherwise expressed in said paragraph) be nowise limited or
restricted by reference to or inference from the terms of any other
clause of this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the clauses of
this paragraph shall be regarded as independent objects, purposes
and powers.
FOURTH: - (a) The total number of shares of all classes of stock which
the Corporation shall have authority to issue is forty-one million
(41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter referred to as "Preferred
Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to
5
<PAGE> 9
time in one or more series as may from time to time be determined by
the Board of Directors each of said series to be distinctly
designated. All shares of any one series of Preferred Stock shall
be alike in every particular, except that there may be different
dates from which dividends, if any, thereon shall be cumulative, if
made cumulative. The voting powers and the preferences and
relative, participating, optional and other special rights of each
such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series
at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board of
Directors of the Corporation is hereby expressly granted authority
to fix by resolution or resolutions adopted prior to the issuance of
any shares of a particular series of Preferred Stock, the voting
powers and the designations, preferences and relative, optional and
other special rights, and the qualifications, limitations and
restrictions of such series, including, but without limiting the
generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock of
such series shall be paid, the extent of the preference or
relation, if any, of such dividends to the dividends payable
on any other class or classes, or series of the same or other
class of stock and whether such dividends shall be
cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same
for, shares of any other class or classes or of any series of
the same or any other class or classes of stock of the
Corporation and the terms and conditions of such conversion
or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices and
the time or times at which, and the terms and conditions on
which, Preferred Stock of such series may be redeemed.
6
<PAGE> 10
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the generality
of the foregoing include the right, voting as a series or by
itself or together with other series of Preferred Stock or
all series of Preferred Stock as a class, to elect one or
more directors of the Corporation if there shall have been a
default in the payment of dividends on any one or more series
of Preferred Stock or under such circumstances and on such
conditions as the Board of Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article FOURTH), if any, shall
have been met and after the Corporation shall have complied with all
the requirements, if any, with respect to the setting aside of sums
as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
FOURTH), and subject further to any conditions which may be fixed in
accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to
time by the Board of Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article FOURTH), to be distributed to the holders
of Preferred Stock in the event of voluntary or involuntary
liquidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation, the holders of the Common
Stock shall be entitled to receive all of the remaining
assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to stockholders
ratably in proportion to the number of shares of Common Stock
held by them respectively.
(3) Except as may otherwise be required by law or by
7
<PAGE> 11
the provisions of such resolution or resolutions as may
be adopted by the Board of Directors pursuant to section (b)
of this Article FOURTH, each holder of Common Stock shall have
one vote in respect of each share of Common Stock held on all
matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of Directors in the
resolution or resolutions adopted pursuant to authority granted in
section (b) of this Article FOURTH and the consent, by class or
series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and
rights of such other series shall be fixed by the Board of Directors
as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution
or resolutions as to any series of Preferred Stock adopted pursuant
to section (b) of this Article FOURTH that the consent of the
holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting
thereon shall be required for the issuance of any or all other
series of Preferred Stock.
8
<PAGE> 12
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be increased or
decreased from time to time by the affirmative vote of the holders
of a majority of the stock of the Corporation entitled to vote
thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and directors of
the third class shall be elected to hold office for a term expiring
at the third succeeding annual meeting. Any vacancies in the Board
of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the
Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any directors so chosen
shall hold office until the next annual election of directors. At
such election, the stockholders shall elect a successor to such
director to hold office until the next election of the class for
which such director shall have been chosen and until his successor
shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any
9
<PAGE> 13
incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the By-Laws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations which
are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not made
in accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be
taken without a meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied.
10
<PAGE> 14
SIXTH: - The Directors shall choose such officers, agent and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee, which Committee, to the extent provided in
said resolution, or in the By-Laws of the Company, shall have and
may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and shall
have power to authorize the seal of the Corporation to be affixed to
all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of the
world.
THIRTEENTH: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
FOURTEENTH: - Meetings of the Directors may be held
outside of the State of Delaware at such places as may be from time
to time designated by the Board, and the Directors may keep the
books of the Company outside of the State of Delaware at such places
as may be from time to time designated by them.
11
<PAGE> 15
FIFTEENTH: - (a) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair market
value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the Corporation,
or any merger or consolidation of the Corporation with any of
its Subsidiaries or any similar transaction (whether or not
with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares
of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly
owned by any Interested Stockholder, or any Affiliate of any
Interested Stockholder,
shall require the affirmative vote of the holders of at least
two-thirds of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors,
considered for the purpose of this Article FIFTEENTH as one class
("Voting Shares"). Such affirmative vote shall be required
notwithstanding the
12
<PAGE> 16
fact that no vote may be required, or that some lesser percentage
may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
FIFTEENTH shall mean any transaction which is referred to any
one or more of clauses (A) through (E) of paragraph 1 of the
section (a).
(b) The provisions of section (a) of this Article FIFTEENTH shall
not be applicable to any particular business combination and such
business combination shall require only such affirmative vote as is
required by law and any other provisions of the Charter or Act of
Incorporation of By-Laws if such business combination has been
approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual firm,
corporation or other entity.
(2) "Interested Stockholder" shall mean, in respect of
any business combination, any person (other than the
Corporation or any Subsidiary) who or which as of the record
date for the determination of stockholders entitled to notice
of and to vote on such business combination, or immediately
prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of
more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at
any time within two years prior thereto beneficially owned
by any Interested Stockholder, and such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving a
public offering within the meaning of the Securities Act
of 1933.
(3) A person shall be the "beneficial owner" of any
Voting Shares:
13
<PAGE> 17
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the passage
of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or
(ii) the right to vote pursuant to any agreement,
arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly,
by any other person with which such first mentioned person
or any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital
stock of the Corporation.
(4) The outstanding Voting Shares shall include shares
deemed owned through application of paragraph (3) above but
shall not include any other Voting Shares which may be
issuable pursuant to any agreement, or upon exercise of
conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the
respective meanings given those terms in Rule 12b- 2 of the
General Rules and Regulations under the Securities Exchange
Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a
majority of any class of equity security (as defined in Rule
3a11-1 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect in December 31,
1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of
Investment Stockholder set forth in paragraph (2) of this
section (c), the term "Subsidiary" shall mean only a
corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty
to determine for the purposes of this Article FIFTEENTH on
the basis of information known to them, (1) the number of
Voting Shares beneficially owned by
14
<PAGE> 18
any person (2) whether a person is an Affiliate or
Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters
referred to in paragraph (3) of section (c), or (4) whether
the assets subject to any business combination or the
consideration received for the issuance or transfer of
securities by the Corporation, or any Subsidiary has an
aggregate fair market value of $1,00,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this Charter
or Act of Incorporation by the By-Laws), the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles FIFTH, THIRTEENTH, FIFTEENTH or SIXTEENTH of this Charter
or Act of Incorporation.
SEVENTEENTH: (a) A Director of this Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except to the extent such
exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Laws as the same exists or
may hereafter be amended.
(b) Any repeal or modification of the foregoing
paragraph shall not adversely affect any right or protection
of a Director of the Corporation existing hereunder with
respect to any act or omission occurring prior to the time of
such repeal or modification."
15
<PAGE> 19
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON FEBRUARY 21, 1991
<PAGE> 20
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at
any time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be
given by mailing to each stockholder at least ten (10 days before said meeting,
at his last known address, a written or printed notice fixing the time and
place of such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one
vote, either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors
<PAGE> 21
shall be held on the third Thursday of each month at the principal office of
the Company, or at such other place and time as may be designated by the Board
of Directors, the Chairman of the Board, or the President.
Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect
from its own members a Chairman of the Board of Directors and a President who
may be the same person. The Board of Directors shall also elect at such
meeting a Secretary and a Treasurer, who may be the same person, may appoint at
any time such other committees and elect or appoint such other officers as it
may deem advisable. The Board of Directors may also elect at such meeting one
or more Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be
in charge of such of the departments or division of the Company as it may deem
advisable.
2
<PAGE> 22
ARTICLE III
COMMITTEES
Section I. Executive Committee
(A) The Executive Committee shall be composed of not
more than nine members who shall be selected by the Board of Directors from its
own members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers
of the Board of Directors when it is not in session to transact all business
for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal
office of the Company or elsewhere in its discretion at least once a week in
each week the Board is not regularly scheduled to meet. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Executive Committee may be held at any time
when a quorum is present.
(D) Minutes of each meeting of the Executive Committee
shall be kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company, and
shall direct the disposal of the same, in accordance with such rules and
regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of sufficient
severity to prevent the conduct and management of the affairs and business of
the Company by its directors and officers as contemplated by these By-Laws any
two available members of the Executive Committee as constituted immediately
prior to such disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the provisions of Article III of these By-Laws; and if less than three
members of the Trust Committee is constituted immediately prior to such
disaster shall be available for the transaction of its business, such Executive
Committee shall also be empowered to exercise all of the powers reserved to the
Trust Committee under Article III Section 2 hereof. In the event of the
unavailability, at such time, of a minimum of two members of such Executive
Committee, any three available directors shall constitute the Executive
Committee for the full conduct and management of the affairs and business of
the Company in accordance with the foregoing provisions of this Section.
3
<PAGE> 23
This By-Law shall be subject to implementation by Resolutions of the Board of
Directors presently existing or hereafter passed from time to time for that
purpose, and any provisions of these By-Laws(other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during such
a disaster period until it shall be determined by any interim Executive
Committee acting under this section that it shall be to the advantage of the
Company to resume the conduct and management of its affairs and business under
all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more
than thirteen members who shall be selected by the Board of Directors, a
majority of whom shall be members of the Board of Directors and who shall hold
office during the pleasure of the Board.
(B) The Trust Committee shall have general supervision
over the Trust Department and the investment of trust funds, in all matters,
however, being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal
office of the Company or elsewhere in its discretion at least once a month. A
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Trust Committee may be held
at any time when a quorum is present.
(D) Minutes of each meeting of the Trust Committee
shall be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its own members,
none of whom shall be an officer of the Company, and shall hold office at the
pleasure of the Board.
(B) The Audit Committee shall have general supervision
over the Audit Division in all matters however subject to the approval of the
Board of Directors; it shall consider all matters brought to its attention by
the officer in
4
<PAGE> 24
charge of the Audit Division, review all reports of examination of the Company
made by any governmental agency or such independent auditor employed for that
purpose, and make such recommendations to the Board of Directors with respect
thereto or with respect to any other matters pertaining to auditing the Company
as it shall deem desirable.
(C) The Audit Committee shall meet whenever and
wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall constitute a
quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not
more than five (5) members who shall be selected by the Board of Directors from
its own members who are not officers of the Company and who shall hold office
during the pleasure of the Board.
(B) The Compensation Committee shall in general advise
upon all matters of policy concerning the Company brought to its attention by
the management and from time to time review the management of the Company,
major organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be
called at any time by the Chairman of the Compensation Committee, the Chairman
of the Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be
elected by the Board of Directors as an associate director, to serve during the
pleasure of the Board.
(B) An associate director shall be entitled to attend
all directors meetings and participate in the discussion of all matters brought
to the Board, with the exception that he would have no right to vote. An
associate director will be eligible for appointment to Committees of the
Company, with the exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a
Committee
(A) In the absence or disqualification of any member of
any Committee created under Article III of the By-Laws
5
<PAGE> 25
of this Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absence or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time
confer and direct. He shall also exercise such powers and perform such duties
as may from time to time be agreed upon between himself and the President of
the Company.
Section 2. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed upon him by
statute or assigned to him by the Board of Directors in the absence of the
Chairman of the Board the President shall have the powers and duties of the
Chairman of the Board.
Section 3. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 4. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 5. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
6
<PAGE> 26
Section 6. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and
responsible for all monies, funds and valuables of the Company and for the
keeping of proper records of the evidence of property or indebtedness and of
all the transactions of the Company. He shall have general supervision of the
expenditures of the Company and shall report to the Board of Directors at each
regular meeting of the condition of the Company, and perform such other duties
as may be assigned to him from time to time by the Board of Directors of the
Executive Committee.
Section 7. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller and
such duties as may be prescribed by the Controller.
Section 8. The officer designated by the Board of Directors to be
in charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor
and such duties as may be prescribed by the officer in charge of the Audit
Division.
Section 9. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 10. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman
of the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.
7
<PAGE> 27
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.
Section 2. Certificate of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new
certificate or certificates shall be issued in lieu thereof. Duplicate
certificates of stock shall be issued only upon giving such security as may be
satisfactory to the Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the
date for the payment of any dividend, or the date for the allotment of rights,
or the date when any change or conversion or exchange of capital stock shall go
into effect, or a date in connection with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
8
<PAGE> 28
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver
and the Secretary or any Assistant Secretary shall have full power and
authority to attest and affix the corporate seal of the Company to any and all
deeds, conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors
who serve as members of committees, other than salaried employees of the
Company, shall be paid such reasonable honoraria or fees for services as
members of committees as the Board of Directors shall from time to time
determine and directors and associate directors may be employed by the Company
for such special services as the Board of Directors may from time to time
determine and shall be paid for such special services so performed reasonable
compensation as may be determined by the Board of Directors.
9
<PAGE> 29
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless,
to the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or
was a director, officer, employee or agent of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee,
fiduciary or agent of another corporation or of a partnership, joint venture,
trust, enterprise or non-profit entity, including service with respect to
employee benefit plans, against all liability and loss suffered and expenses
reasonably incurred by such person. The Corporation shall indemnify a person
in connection with a proceeding initiated by such person only if the proceeding
was authorized by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided,
however, that the payment of expenses incurred by a Director officer in his
capacity as a Director or officer in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by the Director or
officer to repay all amounts advanced if it should be ultimately determined
that the Director or officer is not entitled to be indemnified under this
Article or otherwise.
(C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety days after a
written claim therefor has been received by the Corporation the claimant may
file suit to recover the unpaid amount of such claim and, if successful in
whole or in part, shall be entitled to be paid the expense of prosecuting such
claim. In any such action the Corporation shall have the burden of proving
that the claimant was not entitled to the requested indemnification of payment
of expenses under applicable law.
(D) The rights conferred on any person by this Article
X shall not be exclusive of any other rights which such person may have or
hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to
the time of such repeal or modification.
10
<PAGE> 30
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.
11
<PAGE> 31
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: October 16, 1995 By: /s/ Norma P. Closs
---------------------
Name: Norma P. Closs
Title: Vice President
<PAGE> 32
EXHIBIT "D"
NOTICE
This form is intended to assist state nonmember banks
and savings banks with state publication requirements.
It has not been approved by any state banking authorities.
Refer to your appropriate state banking authorities for
your state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ------------------------ --------------------
Name of Bank City
in the State of DELAWARE , at the close of business on June 30, 1995.
------------
<TABLE>
<CAPTION>
ASSETS Thousands of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins . . . . 189,183
Interest-bearing balances . . . . . . . . . . . . . . . . . 0
Held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . 960,718
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . 194,658
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
Securities purchased under agreements to resell . . . . . . . . . . . 173,715
Loans and lease financing receivables:
Loans and leases, net of unearned income. . 3,352,597
LESS: Allowance for loan and lease losses. . 45,914
LESS: Allocated transfer risk reserve. . . . 0
Loans and leases, net of unearned income, allowance, and reserve . . 3,306,683
Assets held in trading accounts . . . . . . . . . . . . . . . . . . . 0
Premises and fixed assets (including capitalized leases) . . . . . . 75,242
Other real estate owned . . . . . . . . . . . . . . . . . . . . . . . 14,515
Investments in unconsolidated subsidiaries and associated companies . 2,531
Customers' liability to this bank on acceptances outstanding . . . . 0
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . 4,645
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,399
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,087,289
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE> 33
<TABLE>
<S> <C>
LIABILITIES
Deposits:
In domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . 3,103,895
Noninterest-bearing. . . . 647,766
Interest-bearing . . . . . 2,456,129
Federal funds purchased . . . . . . . . . . . . . . . . . . . . . . . . 205,220
Securities sold under agreements to repurchase . . . . . . . . . . . . 181,985
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . 94,987
Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Other borrowed money: . . . . . . . . . . . . . . . . . . . . . . . . . ///////
With original maturity of one year or less . . . . . . . . . . 996,500
With original maturity of more than one year . . . . . . . . . 0
Mortgage indebtedness and obligations under capitalized leases . . . . 1,887
Bank's liability on acceptances executed and outstanding . . . . . . . 0
Subordinated notes and debentures . . . . . . . . . . . . . . . . . . . 0
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,721
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,685,195
Limited-life preferred stock and related surplus . . . . . . . . . . . 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus . . . . . . . . . . . . . 0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,118
Undivided profits and capital reserves . . . . . . . . . . . . . . . . 339,514
Net unrealized holding gains (losses) on available-for-sale securities. (38)
Total equity capital . . . . . . . . . . . . . . . . . . . . . . . . . 402,094
Total liabilities, limited-life preferred stock, and equity capital . . 5,087,289
</TABLE>
<TABLE>
<S> <C>
We, the undersigned directors, attest to I, David R. Gibson
the correctness of this statement of ----------------------
resources and liabilities. We declare Name
that it has been examined by us, and
to the best of our knowledge and belief Senior Vice President
has been prepared in conformance with ----------------------
the instructions and is true and correct. Title
/s/ Hugh E. Miller ] of the above-named bank
- -------------------- ] do hereby declare that
] this Report of Condition
/s/ R. C. Forney ] Directors is true and correct to
- -------------------- ] the best of my knowledge
] and belief.
/s/ Leonard W. Quill ]
- -------------------- /s/ David R. Gibson
------------------------
Signature
07/28/95
-----------------------
Date
</TABLE>
2
