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10,000,000 SHARES
DYNEGY INC.
COMMON STOCK
Placement Agreement
October 2, 2000
Goldman, Sachs & Co.
Banc of America Securities LLC
Lehman Brothers Inc.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10007
Dear Sirs:
Dynegy Inc., an Illinois corporation (the "Company"), proposes to sell an
aggregate of 10,000,000 shares (the "Stock") of the Company's Class A Common
Stock, no par value, (the "Common Stock"). This agreement (this "Agreement") is
to confirm the agreement concerning the placement of the Stock from the Company
by the placement agents named in Schedule 1 (the "Agents").
1. Representations and Warranties. The Company represents and warrants to,
and agrees with, each Agent that:
(a) A registration statement on Form S-3 (File No. 333-46634) with
respect to the Stock has (i) been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, (ii) been filed with the Commission under the Securities Act,
and (iii) become effective under the Securities Act and is not proposed to
be amended by amendment or post-effective amendment. No stop order
suspending the effectiveness of such registration statement or any Rule
462(b) registration statement has been issued under the Securities Act and
no proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission. Copies of
such registration statement as amended to date have been delivered by the
Company to you as the Agents. For purposes of this Agreement, "Effective
Time" means the most recent date and the time as of which such registration
statement was declared effective by the Commission; "Effective Date" means
the date of the Effective Time; "Preliminary Prospectus" means the
prospectus included in such registration statement, or amendments thereof,
before such registration statement became effective under the Securities
Act and any prospectus filed with the Commission by the Company with the
consent of the Agents pursuant to Rule 424(a) of the Rules and Regulations;
"Registration Statement" means such registration statement, as amended at
the Effective Time, including any documents incorporated by reference
therein and all
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information contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations ("Rule 424(b)") in
accordance with Section 7(a) hereof and deemed to be a part thereof as of
the Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; "Prospectus" means the form of prospectus relating to the
Stock (including the prospectus supplement), as first used to confirm sales
of the Stock; and "described in the Prospectus" or "disclosed in the
Prospectus" means described or disclosed, as applicable, in the Prospectus
or any document incorporated by reference therein. If it is contemplated,
at the time this Agreement is executed, that a registration statement will
be filed pursuant to Rule 462(b) under the Securities Act before the
offering of the Stock may commence, the term "Registration Statement" as
used in this Agreement includes such registration statement, as the same
may be amended from time to time. Reference made herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents incorporated by reference therein as of the date of such
Preliminary Prospectus or Prospectus, as the case may be, and any reference
to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, and incorporated by reference in such Preliminary Prospectus or
Prospectus. For purposes of this Section l, all references to the
Registration Statement, any post-effective amendments thereto and the
Prospectus shall be deemed to include, without limitation, any
electronically transmitted copies thereof, including, without limitation,
any copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis, and Retrieval system ("EDGAR"). The Commission has not
issued any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will when they become effective or are first used to confirm
sales of the Stock, as the case may be, conform to the requirements of the
Securities Act and the Rules and Regulations, (ii) the Registration
Statement and any amendment thereto does not and will not, as of the
Effective Date, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading and (iii) the Prospectus and any
amendment or supplement thereto will not, as of the first date of its use
to confirm sales of the Stock, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Notwithstanding
the foregoing, the Company makes no representation or warranty as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon, and in conformity with written information
furnished to the Company by the Agents for inclusion therein. There is no
contract or document required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the Registration
Statement or to a document incorporated by reference into the Registration
Statement which is not described or filed as required.
(c) Arthur Andersen LLP, whose report is included or incorporated by
reference in the Prospectus, and Pricewaterhouse Coopers LLP, who has
certified certain
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financial statements of Illinova Corporation, are each independent
certified public accountants as required by the Securities Act and the
Rules and Regulations. The financial statements (including the related
notes and supporting schedules) included or incorporated by reference in
the Registration Statement, any Preliminary Prospectus and the Prospectus
present fairly the financial condition, results of operations and cash
flows of the entities purported to be shown thereby at the dates and for
the periods indicated and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods indicated and conform in all material respects with the Rules and
Regulations, except as otherwise noted therein; and the supporting
schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated therein.
(d) Each of the Company and its Significant Subsidiaries (as defined in
Exhibit A hereto) has been duly organized or formed and is validly existing
in good standing under the laws of the jurisdiction of its organization or
formation, with full power and authority to own, lease and operate its
properties and conduct its business and to enter into and perform its
obligations under this Agreement; and each of the Company and its
Subsidiaries (as defined in Section 14 hereof), is duly qualified to do
business and is in good standing in each jurisdiction in which the
character of the business conducted by it or the location of the properties
owned, leased or operated by it make such qualification necessary, except
where the failure to so qualify would not, individually or in the
aggregate, have a material adverse effect on the condition (financial or
other), results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole.
(e) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and non-
assessable and conform to the description thereof contained in the
Prospectus. All of the outstanding shares of capital stock of each
Significant Subsidiary of the Company that is a corporation have been duly
authorized and validly issued and are fully paid and nonassessable. Except
as disclosed in the Prospectus, all of the outstanding shares of capital
stock or partnership interests of each Significant Subsidiary of the
Company are owned directly or indirectly by the Company, free and clear of
any claim, lien, encumbrance, security interest, restriction upon voting or
transfer, preemptive rights or any other claim of any third party, except
such as are described in the Prospectus.
(f) The unissued shares of Stock to be issued and sold by the Company
through the Agents hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable; and the Stock
will conform to the description thereof contained in the Prospectus.
(g) Except as described in or contemplated by the Registration Statement
and the Prospectus, there has not been any material adverse change in, or
adverse development which, individually or in the aggregate, materially
affects or may materially affect, the condition (financial or other),
results of operations, business or prospects of the
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Company and its Subsidiaries taken as a whole from the respective dates as
of which information is given in the Prospectus.
(h) Neither (i) the execution or delivery hereof by the Company, (ii)
the consummation of the transactions contemplated hereby, (iii) the
issuance, sale and delivery of the Stock by the Company nor (iv) compliance
by the Company with all of the provisions of this Agreement will result in
a breach or violation of, or constitute a default under, the certificate of
incorporation, by-laws, partnership agreement or other governing documents
of the Company or any of its Subsidiaries, or any agreement, indenture or
other instrument to which the Company or any of its Subsidiaries is a party
or by which any of them is bound, or to which any of their properties is
subject, nor will any such action or the performance by the Company of its
obligations hereunder violate any law, rule, administrative regulation or
decree of any court, or any governmental agency or body having jurisdiction
over the Company, its Subsidiaries or any of their respective properties,
or result in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company or any of its
Subsidiaries. Except for permits, consents, approvals and similar
authorizations required under the securities or "Blue Sky" laws of certain
jurisdictions, and except for such permits, consents, approvals and
authorizations which have been obtained, no permit, consent, approval,
authorization or order of, or filing or registration with, any court,
governmental agency or body or financial institution is required in
connection with the execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated by
this Agreement.
(i) There are no contracts, agreements or understandings between the
Company and any person granting such person the right (other than rights
which have been waived or satisfied) to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Securities Act, except as described in the Prospectus.
(j) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes the valid and binding agreement of the Company.
(k) Neither the Company nor any of its Subsidiaries (i) is in violation
of its certificate of incorporation or by-laws or other governing
documents, (ii) is in default and no event has occurred which, with notice
or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in
any agreement, indenture or other instrument to which it is a party or by
which it is bound or to which any of its properties is subject, except for
any such defaults that would not, individually or in the aggregate, have a
material adverse effect on the condition (financial or other), results of
operations, business or prospects of the Company and its Subsidiaries taken
as a whole, or (iii) is in violation of any law, ordinance, governmental
rule, regulation or court decree to which it or its property may be
subject, except for any such violations that would not, individually or in
the aggregate, have a
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material adverse effect on the condition (financial or other), results of
operations, business or prospects of the Company and its Subsidiaries taken
as a whole.
(l) The Company has all requisite corporate power and authority to
issue, sell and deliver the Stock in accordance with and upon the terms and
conditions set forth in this Agreement and in the Registration Statement
and Prospectus. All corporate action required to be taken by the Company
for the authorization, issuance, sale and delivery of the Stock to be sold
by the Company hereunder has been validly and sufficiently taken.
(m) Each contract, agreement or arrangement to which the Company or any
of its Subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any of its
Subsidiaries is subject, which is material to the condition (financial or
other), results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole, has been duly and validly authorized,
executed and delivered by the Company or its Subsidiary, as applicable;
none of such contracts, agreements or arrangements has been assigned by the
Company or any of its Subsidiaries to any non-affiliated party other than
in the ordinary course of business, and the Company knows of no present
condition or fact which would prevent compliance by the Company or any of
its Subsidiaries or any other party thereto with the terms of any such
contract, agreement or arrangement in accordance with its terms in all
material respects, except for any such failures to comply that would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or other), results of operations, business or
prospects of the Company and its Subsidiaries taken as a whole; neither the
Company nor any of its Subsidiaries has any present intention to exercise
any right that it may have to cancel any such contract, agreement or
arrangement or otherwise to terminate its rights and obligations
thereunder, and none of them has any knowledge that any other party to any
such contract, agreement or arrangement has any intention not to render
full performance in all material respects as contemplated by the terms
thereof, except for any such cancellations, terminations or failures to
perform that would not, individually or in the aggregate, result in a
material adverse effect on the condition (financial or other), results of
operations, business or prospects of the Company and its Subsidiaries taken
as a whole.
(n) There is no litigation or governmental proceeding to which the
Company or any of its Subsidiaries is a party or to which any property of
the Company or any of its Subsidiaries is subject or which is pending or,
to the knowledge of the Company, threatened against the Company or any of
its Subsidiaries that could reasonably be expected to, individually or in
the aggregate, result in a material adverse effect on the condition
(financial or other), results of operations, business or prospects of the
Company and its Subsidiaries taken as a whole or which is required to be
disclosed in the Prospectus and is not disclosed.
(o) Neither the Company nor any Subsidiary is in violation of any law,
ordinance, governmental rule or regulation or court decree to which it may
be subject which violation could reasonably be expected to, individually or
in the aggregate with all such violations, have a material adverse effect
on the condition (financial or other),
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results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole.
(p) The documents incorporated by reference into each Preliminary
Prospectus and the Prospectus, at the time they were or are filed with the
Commission, conform or will conform, as the case may be, with the
requirements of the Securities Act and the Rules and Regulations and the
Exchange Act and the rules and regulations adopted by the Commission
thereunder, and did not or will not, as the case may be, include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(q) Each of the Company and its Subsidiaries owns or possesses, and is
operating in compliance with, all approvals, licenses, permits,
certificates, franchises, easements, consents, orders and other
governmental authorizations and rights necessary to own or lease its
properties and conduct its business (collectively, "Approvals"), except
such Approvals as to which the failure to own, possess or operate in
compliance with would not, individually or in the aggregate, result in a
material adverse effect on the condition (financial or other), results of
operations, business or prospects of the Company and its Subsidiaries taken
as a whole ("Material Approvals"); all such Material Approvals are valid
and in full force and effect; and the Company has no reason to believe that
any governmental agency or body is considering limiting, suspending or
revoking any such Material Approval.
(r) From the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, neither the Company nor any of its Subsidiaries has (i) issued,
granted, repurchased, reclassified or exchanged any of their respective
securities (other than in respect of intercompany transactions or pursuant
to employee stock options, the Company's director and key employee stock
purchase plan, the Company's director compensation plan or the Company's
savings plan), (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in
the ordinary course of business, (iii) entered into any material
transaction not in the ordinary course of business or (iv) entered into any
material transaction with an affiliate of the Company, other than a
Subsidiary; and the Company has not declared or paid any dividend on its
capital stock other than the regular quarterly dividend on its Common Stock
(it being understood that the Company's Subsidiary, Illinois Power Company,
has continued to pay dividends on its outstanding preferred stock).
(s) There has been no storage, disposal, generation, transportation,
handling or treatment of hazardous substances or hazardous wastes by the
Company or any of its Subsidiaries (or to the knowledge of the Company, any
of its predecessors in interest) at, upon or from any of the property now
or previously owned or leased by the Company or any of its Subsidiaries in
violation of any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not,
individually or in the aggregate with
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all such violations and remedial actions, result in a material adverse
effect on the condition (financial or other), results of operations,
business or prospects of the Company and its Subsidiaries taken as a whole;
there has been no material spill, discharge, leak, emission, injection,
escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any hazardous wastes or hazardous
substances due to or caused by the Company or any of its Subsidiaries,
except for any such spill, discharge, leak, emission, injection, escape,
dumping or release which would not, individually or in the aggregate with
all such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases result in a material adverse effect on the condition
(financial or other), results of operations, business or prospects of the
Company and its Subsidiaries taken as a whole; none of the facilities of
the Company or any of its Subsidiaries is a solid waste facility for
purposes of any applicable environmental law; and the terms "hazardous
substances" and "hazardous wastes" shall have the meanings specified in any
applicable local, state and federal laws or regulations with respect to
environmental protection.
(t) The Company has not taken and shall not take, directly or
indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Stock to facilitate the
sale or resale of the Stock.
(u) The conditions for the Company's use of Form S-3 for filing the
Registration Statement, as set out in the general instructions to such
form, have been satisfied.
(v) Neither the Company nor any of its Subsidiaries is an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "1940 Act"), or is subject to regulation as an "investment
company" under the 1940 Act.
(w) The Company is exempt from registration and all other regulations
and requirements of the Public Utility Holding Company Act of 1935, as
amended (the "1935 Act"), and the rules and regulation promulgated
thereunder, other than from Section 9(a)(2) thereof, pursuant to Section
3(a)(1) of the 1935 Act. Illinois Power Company, a wholly-owned Subsidiary
of the Company, is regulated as a public utility in the State of Illinois
and in no other state.
2. Placement of the Stock by the Agents. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 10,000,000 shares of
the Stock to the customers solicited by the Agents. The sales price to such
customers per share will be the closing price of the Common Stock on the New
York Stock Exchange on October 2, 2000 less a discount of $0.125 per share. Each
of the Agents, severally and not jointly, agrees that in the event the customers
solicited by the Agents as having agreed to purchase the Stock from the Company
do not purchase at least 10,000,000 shares of Stock, then the Agent will
purchase the percentage of the number of shares of the Stock not taken up by
such customers set opposite that Agent's name in Schedule 1 hereto at a price
per share equal to the price set forth in the next preceding sentence.
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The Company agrees to pay the Agents a placement commission of $0.21 per
share for the placement of the Stock hereunder.
The Company shall not be obligated to deliver any of the Stock to be
delivered on the Delivery Date (as hereinafter defined) except upon payment for
all the Stock to be purchased on the Delivery Date as provided herein.
3. Placement of Stock by the Agents.
The several Agents agree to place the Stock for sale consistent with the
terms and conditions set forth in the Prospectus.
4. Delivery of and Payment for the Stock. Delivery of and payment for the
Stock shall be made at the office of Baker Botts L.L.P., 910 Louisiana, Houston,
Texas, at 10:00 A.M., New York City time, on October 5, 2000 or at such other
date or place as shall be determined by agreement between the Agents and the
Company. This date and time are sometimes referred to as the "Delivery Date" or
the "Closing Date." On the Delivery Date, the Company shall deliver or cause to
be delivered certificates representing the Stock to the Agents for the account
of the customers of each Agent against payment to or upon the order of the
Company of the purchase price by wire transfer in immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Agent hereunder. Upon delivery, the Stock shall be registered in such names and
in such denominations as the Agents shall request in writing not less than two
full business days prior to the Delivery Date. For the purpose of expediting
the checking and packaging of the certificates for the Stock, the Company shall
make the certificates representing the Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the Delivery Date.
5. Covenants of the Company. The Company covenants and agrees with each
Agent that:
(a) If the Effective Date is on or before the date of this Agreement,
the Company shall comply with the provisions of and make all requisite
filings with the Commission pursuant to Rule 424(b) not later than the
Commission's close of business on the second Business Day following the
execution and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) of the Rules and Regulations.
The Company shall advise the Agents promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed. The Company shall notify the Agents
promptly of any request by the Commission for any amendment of or
supplement to the Registration Statement or the Prospectus or for
additional information; the Company shall prepare and file with the
Commission, promptly upon request of the Agents, any amendments or
supplements to the Registration Statement or the Prospectus which, in their
opinion, may be necessary or advisable in connection with the distribution
of the Stock; and the Company shall not file any amendment or supplement to
the Registration Statement or the Prospectus or file any document under the
Exchange Act before the termination of the offering of the Stock by
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the Agents if such document would be deemed to be incorporated by reference
into the Prospectus, which filing is not consented to by the Agents after
reasonable notice thereof, such consent not to be unreasonably withheld or
delayed. The Company shall advise the Agents promptly of the issuance by
the Commission or any State or other regulatory body of any stop order or
other order suspending the effectiveness of the Registration Statement,
suspending or preventing the use of any Preliminary Prospectus or the
Prospectus or suspending the qualification of the Stock for offering or
sale in any jurisdiction, or of the institution of any proceedings for any
such purpose; and the Company shall use its best efforts to prevent the
issuance of any stop order or other such order and, should a stop order or
other such order be issued, to obtain as soon as possible the lifting
thereof.
(b) The Company shall furnish to each of the Agents and to counsel for
the Agents such number of conformed copies of the Registration Statement,
as originally filed and each amendment thereto (excluding exhibits other
than this Agreement), the Prospectus and all amendments and supplements to
any of such documents (including any document filed under the Exchange Act
and deemed to be incorporated by reference in the Preliminary Prospectus or
Prospectus), in each case as soon as available and in such quantities as
the Agents may from time to time reasonably request.
(c) Within the time during which the Prospectus relating to the Stock is
required to be delivered under the Securities Act, the Company shall comply
with all requirements imposed upon it by the Securities Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to time
in force, so far as is necessary to permit the continuance of sales of or
dealings in the Stock as contemplated by the provisions hereof and by the
Prospectus. If during such period any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend
the Registration Statement or supplement the Prospectus or file any
document to comply with the Securities Act, the Company shall promptly
notify the Agents and shall, subject to Section 5(a) above, amend the
Registration Statement or supplement the Prospectus or file any document
(at the expense of the Company) so as to correct such statement or omission
or to effect such compliance.
(d) The Company shall take or cause to be taken all necessary action and
furnish to whomever you may direct such information as may be required in
qualifying the Stock for offering and sale under the laws of such
jurisdictions as the Agents shall designate, and to continue such
qualifications in effect for as long as may be necessary for the
distribution of the Stock; except that in no event shall the Company be
obligated in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction where
it is not currently so subject.
(e) As soon as practicable, the Company shall make generally available
to its security holders (and shall deliver to you) an earnings statement
satisfying the requirements of Section 11(a) of the Securities Act and Rule
158 of the Rules and Regulations.
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(f) Whether or not this Agreement becomes effective or is terminated or
the sale of the Stock to customers of the Agents is consummated, the
Company shall pay or cause to be paid (A) all fees and expenses (including,
without limitation, all registration and filing fees and fees and expenses
of the Company's accountants but excluding fees and expenses of counsel for
the Agents) incurred in connection with the preparation, printing, filing,
delivery and shipping of the Registration Statement (including the
financial statements therein and all amendments and exhibits thereto), each
Preliminary Prospectus, the Prospectus, and any amendments or supplements
of the foregoing and any documents incorporated by reference into any of
the foregoing and the copying, delivery and shipping of this Agreement and
Blue Sky Memoranda, (B) all fees and expenses incurred in connection with
the preparation and delivery to the Agents of the Stock (including the cost
of printing the Stock certificates), (C) all filing fees and fees and
disbursements of counsel to the Agents incurred in connection with the
qualification of the Stock under state securities or Blue Sky laws as
provided in Section 5(d) hereof, and (D) all other costs and expenses
incident to the performance of its obligations hereunder for which
provision is not otherwise made in this Section. It is understood, however,
that, except as provided in this Section, Section 7 and Section 9 hereof,
the Agents shall pay all of their own costs and expenses, including the
fees of their counsel and any advertising expenses incurred in connection
with any offers they may make. If the sale of the Stock provided for herein
is not consummated by reason of acts of the Company or changes in
circumstances of the Company pursuant to Section 9 hereof which prevent
this Agreement from becoming effective, or by reason of any failure,
refusal or inability on the part of the Company to perform any agreement on
its part to be performed or because any other condition of the Agents'
obligations hereunder is not fulfilled or if the Agents shall decline to
purchase the Stock for any reason permitted under this Agreement other than
by reason of a default by any of the Agents pursuant to Section 8, the
Company shall reimburse the several Agents for all reasonable out-of-pocket
disbursements (including fees and disbursements of counsel) incurred by the
Agents in connection with any investigation or preparation made by them in
respect of the marketing of the Stock or in contemplation of the
performance by them of their obligations hereunder.
(g) During the period of one year from the Closing Date, the Company
shall furnish to the Agents, copies of all reports or other communications
furnished to stockholders and copies of any reports or financial statements
furnished to or filed with the Commission or the New York Stock Exchange
(the "NYSE") or any other national securities exchange or association on
which any class of securities of the Company is quoted or listed.
(h) Until termination of the offering of the Stock, the Company shall
timely file all documents and amendments to previously filed documents
required to be filed by it pursuant to Section 12, 13, 14 or 15(d) of the
Exchange Act.
(i) The Company shall apply the net proceeds from the sale of the Stock
as set forth in the Prospectus.
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(j) The Company shall use its best efforts to list, subject to notice of
issuance, the Stock on The New York Exchange.
6. Conditions of Agents' Obligations. The obligations of the Agents
hereunder are subject to the accuracy, as of the date hereof and the Closing
Date (as if made at the Closing Date), of the representations and warranties of
the Company contained herein, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) The Prospectus shall have been filed with the Commission in a timely
fashion in accordance with Section 5(a) hereof, the Registration Statement
and all post-effective amendments to the Registration Statement shall have
become effective, all filings required by Rule 424 and Rule 430A of the
Rules and Regulations shall have been made and no such filings shall have
been made without the consent of the Agents; no stop order suspending the
effectiveness of the Registration Statement or any amendment or supplement
thereto or suspending the qualification of the Stock for offering or sale
in any jurisdiction shall have been issued; no proceedings for the issuance
of any such order shall have been initiated or threatened; and any request
of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
disclosed to the Agents and complied with to their satisfaction.
(b) No Agent shall have been advised by the Company or shall have
discovered and disclosed to the Company that the Registration Statement or
the Prospectus or any amendment or supplement thereto, contains an untrue
statement of fact which in the opinion of the Agents, or in the opinion of
counsel to the Agents, is material, or omits to state a fact which, in the
opinion of the Agents, or in the opinion of counsel to the Agents, is
material and is required to be stated therein or is necessary to make the
statements therein not misleading.
(c) On the Closing Date, the Agents shall have received from Baker Botts
L.L.P., counsel for the Agents, such opinion or opinions with respect to
the issuance and sale of the Stock and other related matters as the Agents
may reasonably request and such counsel shall have received such documents
and information as they request to enable them to pass upon such matters.
(d) On the Closing Date there shall have been furnished to the Agents
the opinion (addressed to the Agents) of Vinson & Elkins L.L.P., counsel
for the Company, dated the Closing Date and in form and substance
satisfactory to the Agents, to the effect that:
(i) The Company has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the
jurisdiction of its incorporation, with full corporate power and
authority to own, lease and operate its properties and conduct its
business as described in the Prospectus. To the knowledge of such
counsel, the Company is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the business
conducted by it or the location of the properties owned, leased or
operated by it
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makes such qualification necessary (except where the failure to so
qualify would not, individually or in the aggregate, have a material
adverse effect on the condition (financial or other), results of
operations, business or prospects of the Company and its Subsidiaries
taken as a whole).
(ii) To the best of such counsel's knowledge, neither the filing
of the Registration Statement nor the offering or sale of the Stock as
contemplated by this Agreement gives rise to any rights, other than
those which have been waived or satisfied, for or relating to the
registration of any securities of the Company or any of its
Subsidiaries. The authorized equity capitalization of the Company as of
the date of the most recent balance sheet included or incorporated by
reference in the Prospectus is as set forth in the Prospectus, and the
shares of Stock being delivered on such Delivery Date have been duly and
validly authorized and issued, are fully paid and non-assessable
(assuming payment for and delivery of the Stock in accordance with this
Agreement) and conform to the description thereof contained in the
Prospectus. The Company has all requisite corporate power and authority
to issue, sell and deliver the Stock in accordance with and upon the
terms and conditions set forth in this Agreement and in the Registration
Statement and Prospectus.
(iii) Neither the execution or delivery of this Agreement nor
consummation of the transactions contemplated hereby will result in a
breach or violation of, or constitute a default under, the certificate
of incorporation or by-laws of the Company, nor will the performance by
the Company of its obligations hereunder violate any law, rule,
administrative regulation or (to the knowledge of such counsel) decree
(except that such counsel need not express an opinion as to federal or
state securities or Blue Sky laws with respect to this subparagraph) of
any court or any governmental agency or body having jurisdiction over
the Company, its Subsidiaries or their respective properties. Except for
permits, consents, approvals and similar authorizations required under
the securities or Blue Sky laws of certain jurisdictions and except for
such permits, consents, approvals and authorizations which have been
obtained, no permit, consent, approval, authorization or order of any
court, governmental agency or body or financial institution is required
of the Company for the valid authorization, issuance, sale and delivery
of the Stock.
(iv) The Company has all necessary corporate power and authority
to execute and deliver this Agreement and perform its obligations
hereunder. This Agreement has been duly authorized, executed and
delivered by the Company.
(v) The Registration Statement and all post-effective amendments
thereto have become effective under the Securities Act and, to the
knowledge of such counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending before or threatened by the
Commission. To the knowledge of such counsel, no order of the Commission
directed to any document incorporated by reference in the Registration
Statement has been issued, and no
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challenge by appropriate proceedings has been made to the accuracy or
adequacy of any document incorporated by reference in the Registration
Statement.
(vi) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company, as of
their respective effective or issue dates, complied as to form in all
material respects with the applicable requirements of the Securities Act
and the Rules and Regulations (except that no opinion need be expressed
as to the financial statements or notes thereto contained therein or
omitted therefrom).
(vii) There are no legal proceedings pending or threatened
against the Company or any of its Subsidiaries to which such counsel has
given substantive attention or in which such counsel has been engaged to
represent the Company or any of its Subsidiaries that are required to be
disclosed in the Prospectus and are not disclosed.
(viii) Neither the Company nor any of its Subsidiaries is an
"investment company" within the meaning of the 1940 Act, or is subject to
regulation as an "investment company" under the 1940 Act.
(ix) The Company is exempt from registration and all other
regulations and requirements of the 1935 Act and the rules and regulations
promulgated thereunder, other than from Section 9(a)(2) thereof, pursuant
to Section 3(a)(1) of the 1935 Act. Illinois Power Company, a wholly-owned
subsidiary of the Company, is regulated as a public utility in the State of
Illinois and in no other state.
Such opinion shall also contain a statement that such counsel has no
reason to believe that (i) the Registration Statement, as of the Effective
Time, or any amendment thereto (other than the financial statements and
notes thereto contained therein, as to which such counsel need not
comment), at the time it became effective, including in each case any
document filed under the Exchange Act and incorporated by reference
therein, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading, or (ii) the Prospectus or
any supplement or amendment thereto (other than the financial statements
and notes thereto contained therein, as to which such counsel need not
comment), including in each case any document filed under the Exchange Act
and incorporated by reference therein, on such Closing Date and at the time
such Prospectus or supplement or amendment thereto was issued contains or
contained any untrue statement of a material fact or omits or omitted to
state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
In rendering such opinion, such counsel may (i) state that its opinion
is limited to matters governed by the Federal laws of the United States of
America, the laws of the State of Texas and the General Corporation Law of
the State of Delaware and that such counsel is not admitted in the State of
Illinois and (ii) rely (to the extent such counsel
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deems proper and specifies in its opinion), as to matters involving the
application of the laws of the State of Illinois upon the opinion of other
counsel of good standing, provided that such other counsel is satisfactory
to counsel for the Agents and furnishes a copy of its opinion to the
Agents.
(e) On the Closing Date there shall have been furnished to you the
opinion (addressed to the Agents) of the General Counsel and Secretary of
the Company, dated the Closing Date and in form and substance satisfactory
to the Agents, to the effect that:
(i) Each of the Company's Significant Subsidiaries has been duly
incorporated or formed as a corporation or partnership, as applicable,
and is validly existing as a corporation, a general partnership or a
limited partnership under the laws of its jurisdiction of incorporation
or formation (and each of the Significant Subsidiaries that is a
corporation or a limited partnership is in good standing under the laws
of its jurisdiction of incorporation or formation), with full corporate
or partnership (as applicable) power and authority to own, lease and
operate its properties and conduct its business as described in the
Prospectus.
(ii) To the knowledge of such counsel, except as disclosed in
the Prospectus, all of the outstanding shares of capital stock or
partnership interests (or such percentage of the partnership interest as
is set forth in the respective partnership agreements) of each
Significant Subsidiary are owned directly or indirectly by the Company,
free and clear of any perfected security interest.
(iii) Neither the execution or delivery of this Agreement nor
consummation of the transactions contemplated hereby will result in a
breach or violation of, or constitute a default under, the certificate
of incorporation, by-laws, partnership agreement or other governing
documents of the Significant Subsidiaries or any agreement, indenture or
other instrument filed as an exhibit to the Registration Statement or
any document incorporated by reference therein.
(iv) Each document incorporated by reference in the Registration
Statement as filed under the Exchange Act complied when so filed as to
form in all material respects with the applicable requirements of the
Exchange Act and the rules and regulations of the Commission thereunder
(except that no opinion need be expressed as to the financial statements
or notes thereto contained therein).
(v) The descriptions in the Registration Statement and
Prospectus of statutes, regulations, legal or governmental proceedings,
to the extent they constitute matters of law and summaries of legal
matters are accurate in all material respects. To the knowledge of such
counsel, there are no contracts or documents required to be described in
the Registration Statement or Prospectus or to be filed as exhibits
thereto which are not described or filed as required.
(f) There shall have been furnished to you a certificate, dated the
Closing Date and addressed to you, signed by the Chairman of the Board or
the President or any Senior Vice President and by the Chief Financial
Officer of the Company to the effect
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that: (i) the representations and warranties of the Company contained in
this Agreement are true and correct, as if made at and as of the Closing
Date, and the Company has complied with all the agreements and satisfied
all the conditions on its part to be complied with or satisfied at or prior
to the Closing Date; (ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that purpose
has been initiated or, to the best of their knowledge, threatened; (iii)
all filings required by Rule 424(b) and Rule 430A of the Rules and
Regulations have been made; (iv) the signers of said certificate have
carefully examined the Registration Statement and the Prospectus, and any
amendments or supplements thereto (including any documents filed under the
Exchange Act and deemed to be incorporated by reference into the
Prospectus), and such documents contain all statements and information
required to be included therein, and do not include any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; (v)
since the Effective Date there has occurred no event required to be set
forth in an amendment or supplement to the Registration Statement or the
Prospectus which has not been so set forth and there has been no document
required to be filed under the Exchange Act and the Rules and Regulations
that upon such filing would be deemed to be incorporated by reference into
the Prospectus that has not been so filed and (vi) no event contemplated by
subsection (g) of this Section 6 shall have occurred.
(g) Since the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereto) and in the Prospectus
(exclusive of any supplement thereto), neither the Company nor any of its
Subsidiaries shall have sustained any loss by fire, flood, accident or
other calamity, or shall have become a party to or the subject of any
litigation, which is materially adverse to the Company and its Subsidiaries
taken as a whole, nor shall there have been a material adverse change in
the general affairs, operations, business, prospects, key personnel,
capitalization, financial condition or net worth of the Company and its
Subsidiaries taken as a whole, regardless of whether arising in the
ordinary course of business, which loss, litigation or change, in the
judgement of the Agents, shall render it impractical or inadvisable to
proceed with the payment for and delivery of the Stock.
(h) On the date hereof and the Closing Date you shall have received
letters from Arthur Andersen LLP dated respectively the date hereof and the
Closing Date and addressed to you, confirming that they are independent
certified public accountants within the meaning of the Securities Act and
the applicable published Rules and Regulations, and stating, as of the date
of such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given or incorporated in the Prospectus as of a date not
more than five days prior to the date of such letter, provided that such
date shall be after the date of the Prospectus), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by its letter delivered to you concurrently with the
execution of this Agreement, and, with respect to the letter delivered on
the Closing Date, confirming the conclusions and findings set forth in such
prior letter.
(i) The Stock shall be duly listed, subject to notice of issuance, on
The New York Stock Exchange.
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(j) The Agents shall have been furnished by the Company such additional
documents and certificates as you or counsel for the Agents may reasonably
request.
(k) The Company shall have been added to the S&P 500 Index by Standard &
Poor's Corporation.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Agents and to counsel for the Agents. The Company shall
furnish to the Agents conformed copies of such opinions, certificates, letters
and other documents in such number as they shall reasonably request. If any of
the conditions specified in this Section 6 shall not have been fulfilled when
and as required by this Agreement, this Agreement and all obligations of the
Agents hereunder may be canceled at, or at any time prior to, the Closing Date,
by the Agents. Any such cancellation shall be without liability of the Agents
to the Company. Notice of such cancellation shall be given to the Company in
writing, or by telegraph or telephone and confirmed in writing.
7. Indemnification and Contribution. (a) The Company shall indemnify and
hold harmless each Agent from and against any loss, claim, damage or liability
(or any action in respect thereof), joint or several, to which such Agent may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage or liability (or action in respect thereof) arises out of or is
based upon (i) any untrue statement or alleged untrue statement made by the
Company in Section 1 hereof, (ii) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or the Registration Statement or
Prospectus as amended or supplemented, or (iii) the omission or alleged omission
to state in the Registration Statement, any Preliminary Prospectus, the
Prospectus or the Registration Statement or Prospectus as amended or
supplemented a material fact required to be stated therein or necessary to make
the statements therein not misleading; and shall reimburse each Agent promptly
after receipt of invoices from such Agent for any legal or other expenses as
reasonably incurred by such Agent in connection with investigating, preparing to
defend or defending against or appearing as a third-party witness in connection
with any such loss, claim, damage, liability or action, notwithstanding the
possibility that payments for such expenses might later be held to be improper,
in which case such payments shall be promptly refunded; provided, however, that
the Company shall not be liable under this paragraph 7(a) in any such case to
the extent, but only to the extent, that any such loss, claim, damage, liability
or action arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the Agents
expressly for use in the preparation of the Registration Statement, any
Preliminary Prospectus, the Prospectus or the Registration Statement or
Prospectus as amended or supplemented; provided, further that with respect to
any untrue statement or omission or alleged untrue statement or omission made in
any Preliminary Prospectus, which untrue statement or omission or alleged untrue
statement or omission in such Preliminary Prospectus was corrected in the
Prospectus, the indemnity agreement contained in this paragraph 7(a) shall not
inure to the benefit of any Agent (or any person controlling such Agent) to the
extent that any such loss, claim, damage or liability results from the fact that
a copy of the Prospectus was not sent or given to the person asserting any such
losses, claims, damages or liabilities at or prior to the written confirmation
of the sale of the Stock concerned to such person by such Agent (provided that
the Company shall have complied with the provisions of Section
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5(a) and (c) hereof and such Agent shall have been provided with the number of
copies of such Prospectus requested by such Agent in a timely manner) and it is
judicially determined that such delivery was required under the Securities Act
and was not so made.
(b) Each Agent severally, but not jointly, shall indemnify and hold
harmless the Company against any loss, claim, damage or liability (or any action
in respect thereof) to which the Company may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage or liability
(or action in respect thereof) arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or the
Registration Statement or Prospectus as amended or supplemented, or (ii) the
omission or alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Prospectus or the Registration Statement or
Prospectus as amended or supplemented a material fact required to be stated
therein or necessary to make the statements therein not misleading and shall
reimburse the Company promptly after receipt of invoices from the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating, preparing to defend or defending against or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action notwithstanding the possibility that payments for such expenses might
later be held to be improper, in which case such payments shall be promptly
refunded; provided, however, that such indemnification or reimbursement shall be
available in each such case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company by an Agent expressly for use therein.
(c) Promptly after receipt by any indemnified party under subsection (a) or
(b) above of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to so notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent it has
been prejudiced in any material respect by such failure or from any liability
which it may have to an indemnified party otherwise than under this Section 7.
If any such claim or action shall be brought against any indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under subsection (a) or (b) above for any legal or
other expenses subsequently incurred by the indemnified party in connection with
the defense thereof other than reasonable costs of investigation; except that
the Agents shall have the right to employ counsel to represent jointly the
Agents who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Agents against the Company under such
subsection if (i) the employment thereof has been specifically authorized by the
Company in writing, (ii) the Agents shall have been advised by counsel that
there may be one or more legal defenses available to the Agents which are
different from or additional to those available to the Company and in the
reasonable judgment of such counsel it is advisable for the Agents to employ
separate counsel or (iii) the Company has failed to assume the defense of such
action and employ counsel
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reasonably satisfactory to the Agents, in which event the fees and expenses of
such separate counsel shall be paid by the Company. No indemnifying party shall
(i) without the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 7 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the Agents on
the other hand from the offering of the Stock or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the Agents
on the other hand in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, or actions in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Agents on the other hand shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Stock (before deducting expenses) received by the Company bear
to the total placement commissions received by the Agents, in each case as set
forth on the cover page or the Plan of Distribution Section of the Prospectus.
Relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Agents and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company and the Agents agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were to be determined
by pro rata allocation (even if the Agents were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to in the first sentence of this
subsection (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to in the first sentence of this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating, preparing to defend or defending against any
action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), no Agent shall be required to contribute
any amount in excess of the amount by which the total price at which the Stock
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Agent has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of
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fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Agents' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint. Each party entitled to contribution
agrees that upon the service of a summons or other initial legal process upon it
in any action instituted against it in respect to which contribution may be
sought, it shall promptly give written notice of such service to the party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties of any such service shall not relieve the party from whom
contribution may be sought for any obligation it may have hereunder or otherwise
(except as specifically provided in subsection (c) above).
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability that the Company may otherwise have, and shall extend,
upon the same terms and conditions set forth in this Section 7, to the
respective officers and directors of the Agents and each person, if any, who
controls any Agent within the meaning of the Securities Act; and the obligations
of the Agents under this Section 7 shall be in addition to any liability that
the respective Agents may otherwise have, and shall extend, upon the same terms
and conditions, to each director of the Company (including any person who, with
his or her consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Securities Act.
8. Substitution of Agents. If, on the Delivery Date, any Agent defaults in
its obligation to purchase the Stock which it has agreed to purchase under this
Agreement as a result of failure of a customer to take up and pay for such
Stock, the non-defaulting Agents shall be obligated to purchase (in the
respective proportions which the percentage set forth opposite the name of each
non-defaulting Agent in Schedule 1 hereto bears to the total percentages less
the percentage the defaulting Agent agreed to purchase set forth in Schedule 1
hereto) the Stock which the defaulting Agent agreed but failed to purchase on
such Delivery Date; except that the non-defaulting Agents shall not be obligated
to purchase any of the Stock if the total number of shares of Stock which the
defaulting Agent or Agents agreed but failed to purchase exceeds 9.09% of the
total number of shares of Stock to be purchased on such Delivery Date, and any
non-defaulting Agents shall not be obligated to purchase more than 110% of the
number of shares of Stock which it agreed to purchase on such Delivery Date
pursuant to Section 2. If the foregoing maximums are exceeded, the non-
defaulting Agents, and any other agents satisfactory to you who so agree, shall
have the right, but shall not be obligated, to purchase (in such proportions as
may be agreed upon among them) all of the Stock. If the non-defaulting Agents or
the other agents satisfactory to the Agents do not elect to purchase the Stock
that the defaulting Agent or Agents agreed but failed to purchase within 36
hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Agent or the Company except for the indemnity and
contribution agreements of the Company and the Agents contained in Section 7
hereof. As used in this Agreement, the term "Agent" includes any person
substituted for an Agent pursuant to this Section 8.
Nothing contained herein shall relieve a defaulting Agent of any liability
it may have for damages caused by its default. If the non-defaulting Agents or
the other agents satisfactory to you are obligated or agree to purchase the
Stock of a defaulting Agent, either you or the
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Company may postpone the Closing Date for up to seven full Business Days in
order to effect any changes that may be necessary in the Registration Statement
or the Prospectus or in any other document or agreement, and to file promptly
any amendments or any supplements to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary.
9. Effective Date and Termination. (a) This Agreement shall become
effective at 8:15 A.M., New York City time, on the date hereof. You shall notify
the Company immediately after you have taken any action which causes this
Agreement to become effective. Until this Agreement is effective, it may be
terminated by the Company by giving notice as hereinafter provided to you, or by
you by giving notice as hereinafter provided to the Company except that the
provisions of Section 5(f) and Section 7 hereof shall at all times be effective.
For purposes of this Agreement, the release of the initial public offering of
the Stock for sale to the public shall be deemed to have been made when the
Agents release, by telegram or otherwise, firm offers of the Stock to securities
dealers or release for publication a newspaper advertisement relating to the
Stock, whichever occurs first.
(b) Until the Closing Date, this Agreement may be terminated by the Agents
by giving notice as hereinafter provided to the Company if (i) the Company shall
have failed, refused or been unable, at or prior to the Closing Date, to perform
any agreement on its part to be performed hereunder, (ii) any other condition of
the Agents' obligation hereunder is not fulfilled, (iii) trading in the Common
Stock of the Company shall have been suspended by the Commission or the NYSE or
trading in securities generally on the NYSE shall have been suspended or minimum
prices shall have been established on such exchange by the Commission or such
exchange or other regulatory body or governmental authority having jurisdiction
which, in the judgment of a majority in interest of the several Agents, make it
inadvisable or impracticable to proceed with the offering or delivery of the
Stock, (iv) a banking moratorium is declared by either federal or New York state
authorities, (v) the United States becomes engaged in hostilities or there is an
escalation of hostilities involving the United States or there is a declaration
of a national emergency or war by the United States which, in the judgment of
the Agents, makes it inadvisable or impracticable to proceed with the offering
or delivery of the Stock or (vi) there shall have been such a material adverse
change in general economic, political or financial conditions, or the effect of
international conditions on the financial markets in the United States shall be
such, as to, in the judgment of the Agents, make it inadvisable or impracticable
to proceed with the offering or delivery of the Stock. Any termination of this
Agreement pursuant to this Section 9 shall be without liability on the part of
the Company or any Agent, except as otherwise provided in Sections 5(f) and 7
hereof.
Any notice referred to above may be given at the address specified in
Section 11 hereof in writing or by telegraph or telephone, and if by telegraph
or telephone, shall be immediately confirmed in writing.
10. Survival of Certain Provisions. The agreements contained in Section 5
hereof and the representations, warranties and agreements of the Company
contained in Section 1 hereof shall survive the delivery of the Stock to the
Agents hereunder and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or on
behalf of any indemnified party.
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11. Notices. Except as otherwise provided in the Agreement, (a) whenever
notice is required by the provisions of this Agreement to be given to the
Company, such notice shall be in writing or by facsimile transaction addressed
to the Company at 1000 Louisiana, Suite 5800, Houston, Texas 77002, Attention:
General Counsel; (b) whenever notice is required by the provisions of this
Agreement to be given to the several Agents, such notice shall be in writing or
by facsimile transmission addressed to the Agents c/o Goldman, Sachs & CO., 32
Old Slip, 21st Floor, New York, New York, Attention: Registration Department.
12. Information Furnished by Agents. The written information furnished by
or on behalf of any Agent referred to in paragraph (b) of Section 1 hereof and
in paragraphs (a) or (b) of Section 7 hereof shall be confirmed in a letter from
the Agents to be provided on the Closing Date.
13. Parties. This Agreement shall inure to the benefit of and be binding
upon the several Agents, the Company and their respective successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (a) the representations, warranties, indemnities and
agreements of the Company contained in this Agreement shall also be deemed to be
for the benefit of the person or persons, if any, who control any Agent within
the meaning of Section 15 of the Securities Act and (b) the indemnity agreement
of the Agents contained in Section 7 hereof shall be deemed to be for the
benefit of directors of the Company, officers of the Company who signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement shall be
construed to give any person, other than the persons referred to in this
paragraph, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein.
14. Definition of "Business Day" and "Subsidiary." For purposes of this
Agreement, (a) "Business Day" means any day on which the New York Stock
Exchange, Inc. is open for trading, other than any day on which commercial banks
are authorized or required to be closed in New York City or Houston, Texas, and
(b) "Subsidiary" has the meaning set forth in Rule 405 of the Rules and
Regulations and includes both partnerships and corporations.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to the
conflicts of laws provisions thereof.
16. Headings. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
17. Counterparts. This Agreement may be signed in one or more counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same agreement.
Please confirm, by signing and returning to us two counterparts of this
Agreement, that you are acting on behalf of yourselves and the several Agents
and that the foregoing correctly sets forth the Agreement among the Company and
the several Agents.
21
<PAGE>
Very truly yours,
Dynegy Inc.
By: /s/ ROBERT D. DOTY, JR.
-----------------------
Name: Robert D. Doty, Jr.
-------------------------
Title: Senior Vice President and Chief
Financial Officer
-------------------------------
Confirmed and accepted as of
the date first above mentioned
Goldman, Sachs & Co.
By: /s/ GOLDMAN, SACHS CO.
----------------------
Name: Fred Knecht
-----------
Title: Vice President
--------------
Banc of America Securities LLC
By: /s/ DAN SPEARS
--------------
Name: Dan Spears
----------
Title: Vice President
--------------
Lehman Brothers Inc.
By /s/ LEE JACOBE
-------------------
Name: Lee Jacobe
---------------------
Title: Senior Vice President
---------------------
22
<PAGE>
SCHEDULE 1
Placement Agreement dated October 2, 2000
<TABLE>
<CAPTION>
Agent Percentage
----- -------------
<S> <C>
Goldman, Sachs & Co. 60%
---
Banc of America Securities LLC 20%
---
Lehman Brothers Inc. 20%
---
Total 100%
===
</TABLE>
<PAGE>
EXHIBIT A
Placement Agreement dated October 2, 2000
As used in the Placement Agreement, the "Significant Subsidiaries" of the
Company are as follows:
Dynegy Holdings Inc.
Dynegy Power Corp.
Dynegy Global Energy, Inc.
Dynegy Upper Holdings, L.L.C.
DMT Holdings, Inc.
Dynegy GP Inc.
Dynegy NGL, Inc.
Dynegy Regulated Holdings, Inc.
Dynegy Administrative Services Company
Illinova Corporation
Illinois Power Company
Ilinova Generating Company
Illinova Energy Partners, Inc.
Illinova Insurance Company
Illinova Business Enterprises, Inc.
