EXHIBIT 4.1
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ILLINOIS POWER COMPANY
TO
BNY MIDWEST TRUST COMPANY
---------
Supplemental Indenture
DATED AS OF DECEMBER 15, 2002
TO
General Mortgage Indenture and Deed of Trust
DATED AS OF NOVEMBER 1, 1992
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ILLINOIS POWER COMPANY
SUPPLEMENTAL INDENTURE
DATED AS OF DECEMBER 15, 2002
Table of Contents
PARTIES .......................................................... 1
RECITALS .......................................................... 1
ARTICLE I. DEFINITIONS .............................................. 3
ARTICLE II. DESCRIPTION OF THE INITIAL BONDS ......................... 27
ARTICLE III. DESCRIPTION OF THE EXCHANGE BONDS AND THE PRIVATE
EXCHANGE BONDS ........................................... 34
ARTICLE IV. ISSUE OF THE INITIAL BONDS, THE EXCHANGE BONDS AND
THE PRIVATE EXCHANGE BONDS ............................... 39
ARTICLE V. ADDITIONAL PROVISIONS RELATING TO THE INITIAL
BONDS, THE EXCHANGE BONDS AND THE PRIVATE EXCHANGE
BONDS .................................................... 47
ARTICLE VI. AMENDMENT OF INDENTURE ................................... 82
ARTICLE VII. THE TRUSTEE .............................................. 82
ARTICLE VIII. MISCELLANEOUS PROVISIONS ................................. 82
SIGNATURES .......................................................... 84
EXHIBIT A .......................................................... A-1
EXHIBIT B .......................................................... B-1
EXHIBIT C .......................................................... C-1
EXHIBIT D .......................................................... D-1
EXHIBIT E .......................................................... E-1
Supplemental Indenture dated as of December 15, 2002 ("Supplemental Indenture"),
made by and between ILLINOIS POWER COMPANY, a corporation organized and existing
under the laws of the State of Illinois, party of the first part, and BNY
MIDWEST TRUST COMPANY, an Illinois trust company, as Trustee under the General
Mortgage Indenture and Deed of Trust dated as of November 1, 1992, hereinafter
mentioned, party of the second part.
R E C I T A L S
WHEREAS, the Company has heretofore executed and delivered its General
Mortgage Indenture and Deed of Trust dated as of November 1, 1992, as from time
to time amended (the "Indenture"), to the Trustee for the security of the Bonds
of the Company issued and to be issued thereunder (the "Bonds"); and
WHEREAS, pursuant to the terms and provisions of the Indenture there
were created and authorized by supplemental indentures thereto bearing the
following dates, respectively, the Mortgage Bonds of the series issued
thereunder and respectively identified opposite such dates:
Date of
Supplemental Indenture Identification of Series Called
---------------------- ------------------------ ------
February 15, 1993 8% Series due 2023 Bonds of the 2023 Series
(redeemed)
March 15, 1993 6 1/8% Series due 2000 Bonds of the 2000 Series
(paid at maturity)
March 15, 1993 6 3/4% Series due 2005 Bonds of the 2005 Series
July 15, 1993 7 1/2% Series due 2025 Bonds of the 2025 Series
August 1, 1993 6 1/2% Series due 2003 Bonds of the 2003 Series
October 15, 1993 5 5/8% Series due 2000 Bonds of the Second 2000 Series
(paid at maturity)
November 1, 1993 Pollution Control Series M (redeemed) Bonds of the Pollution Control
Series M
November 1, 1993 Pollution Control Series N (redeemed) Bonds of the Pollution Control
Series N
November 1, 1993 Pollution Control Series O (redeemed) Bonds of the Pollution Control
Series O
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April 1, 1997 Pollution Control Series P Bonds of the Pollution Control
Series P
April 1, 1997 Pollution Control Series Q Bonds of the Pollution Control
Series Q
April 1, 1997 Pollution Control Series R Bonds of the Pollution Control
Series R
March 1, 1998 Pollution Control Series S Bonds of the Pollution Control
Series S
March 1, 1998 Pollution Control Series T Bonds of the Pollution Control
Series T
July 15, 1998 6 1/4% Series due 2002 Bonds of the 2002 Series
(paid at maturity)
September 15, 1998 6% Series due 2003 Bonds of the Second 2003 Series
June 15, 1999 7.50% Series due 2009 Bonds of the 2009 Series
July 15, 1999 Pollution Control Series U Bonds of the Pollution Control
Series U
July 15, 1999 Pollution Control Series V Bonds of the Pollution Control
Series V
May 1, 2001 Pollution Control Series W Bonds of the Pollution Control
Series W
May 1, 2001 Pollution Control Series X Bonds of the Pollution Control
Series X;
July 1, 2002 10 5/8% Series due 2007 (not issued) Bonds of the 2007 Series
July 1, 2002 10 5/8% Series due 2012 (not issued) Bonds of the 2012 Series
and
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WHEREAS a supplemental indenture with respect to the Mortgage Bonds of
the 2007 Series and the Mortgage Bonds of the 2012 Series listed above was
executed and filed but such Mortgage Bonds of the 2007 Series and Mortgage Bonds
of the 2012 Series were never issued and a release with respect to such
supplemental indenture was subsequently executed and filed; and
WHEREAS, the Company desires to create three new series of Bonds to be
issued under the Indenture to be known as (i) the Mortgage Bonds, 11.50% Series
due 2010 (the "Initial Bonds"), (ii) the Exchange Bonds (as defined herein) for
issue only in a Registered Exchange Offer (as defined herein) pursuant to the
Registration Rights Agreement (as defined herein), for a like principal amount
of Initial Bonds and (iii) the Private Exchange Bonds (as defined herein) for
issue only in a Private Exchange (as defined herein) pursuant to a Registration
Rights Agreement for a like principal amount of Initial Bonds, the form and
substance of the Initial Bonds, Exchange Bonds and Private Exchange Bonds and
the terms, provisions and conditions thereof to be as set forth in the Indenture
and this Supplemental Indenture; and
WHEREAS, the Company, in the exercise of the powers and authority
conferred upon and reserved to it under the provisions of the Indenture, and
pursuant to appropriate resolutions of the Board of Directors, has duly resolved
and determined to make, execute and deliver to the Trustee a Supplemental
Indenture in the form hereof for the purposes herein provided; and
WHEREAS, all conditions and requirements necessary to make this
Supplemental Indenture a valid, binding and legal instrument have been done,
performed and fulfilled and the execution and delivery hereof have been in all
respects duly authorized;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
THAT the Company, in consideration of the purchase and ownership from
time to time of the Mortgage Bonds and the service by the Trustee, and its
successors, under the Indenture and of One Dollar to it duly paid by the Trustee
at or before the ensealing and delivery of these presents, the receipt whereof
is hereby acknowledged, hereby covenants and agrees to and with the Trustee and
its successors in the trust under the Indenture, for the benefit of those who
shall hold the Mortgage Bonds as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.
Set forth below are certain defined terms used in this Supplemental
Indenture. Terms used in this Supplemental Indenture and
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not otherwise defined in this Supplemental Indenture shall have the meanings
assigned to them in the Indenture.
"Acquired Debt" means with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified Person,
whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person but excluding Indebtedness which is
extinguished, retired or repaid in connection with such Person merging with or
becoming a Subsidiary of such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a specified Person will be deemed to be control by the other
Person; provided further that any third Person which also beneficially owns 10%
or more of the Voting Stock of the other Person shall not be deemed an Affiliate
of the specified Person merely because of such common ownership in the other
Person. For purposes of this definition, the terms "controlling," "controlled
by" and "under common control with" have correlative meanings. Notwithstanding
the preceding, no Transitional Funding Trust will be deemed to be an Affiliate
of the Company or any of its Restricted Subsidiaries.
"Affiliate Transaction" has the meaning assigned to it in Article V,
Section 4(f)(i) of this Supplemental Indenture.
"Agent Members" has the meaning assigned to it in Article IV, Section
3(b) of this Supplemental Indenture.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights, other than inventory, obsolete equipment or the sales or transportation
of electricity or gas supply in the ordinary course of business consistent with
past practices; provided that the sale, conveyance or other disposition of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole shall be governed by the provisions in Article V,
Section 6(a) under the caption "Repurchase at the Option of Holders---Offer to
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Purchase Upon Change of Control," and Article V, Section 4(e) under the
caption "Triggering Events--Merger, Consolidation or Sale of Assets" and not by
Article V, Section 6(b) under the caption "Repurchase at the Option of
Holders--Asset Sales" of this Supplemental Indenture; and
(2) the issuance of Equity Interests in any of the Company's
Subsidiaries or the sale of Equity Interests in any of its
Restricted Subsidiaries.
Notwithstanding the preceding, the following items will not be deemed
to be Asset Sales:
(1) any single transaction or series of related transactions that
involves assets having a fair market value of less than $1.0 million;
(2) a transfer of assets, rights or Equity Interests in a
Restricted Subsidiary between or among the Company and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to the
Company or to another Restricted Subsidiary;
(4) a Restricted Payment or Permitted Investment that does not result
in a Triggering Event described in Article V, Section 4(a) under the caption
"Triggering Events--Restricted Payments";
(5) sales, transfers or other dispositions of assets, including Capital
Stock of Restricted Subsidiaries, or rights for consideration at least equal to
the fair market value of the assets or rights sold or disposed of, but only if
the consideration received consists of Capital Stock of a Person that becomes a
Restricted Subsidiary engaged in, or property or assets (other than cash, except
to extent used as a bona fide means of equalizing the value of the property or
assets involved in the swap transaction) of a nature or type or that are used
in, a business of the Company and its Restricted Subsidiaries existing on the
date of such sale or other disposition; provided, however, that any cash
received by the Company shall be treated as Net Proceeds and applied as set
forth in the Triggering Event described in Article V, Section 6(b) under the
caption "Repurchase at the Option of Holders--Asset Sales"; provided further
that the fair market value of the assets sold or disposed of is determined as
provided in Article V, Section 4(a)(iii) of the Trigging Event described below
under "Triggering Events--Restricted Payments".
(6) a sale, transfer or disposition of the Xxxxxx Energy Center for
consideration not less than the Company's purchase price;
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(7) any sale, transfer or other disposition of cash or Cash
Equivalents, Hedging Obligations or other financial instruments in the ordinary
course of business;
(8) the creation or perfection of a Lien on any properties or assets
(or any income or profit therefrom) of the Company or any of its Restricted
Subsidiaries that is permitted by the Triggering Event described in Article V,
Section 4(c) the caption "Triggering Events--Liens";
(9) the surrender or waiver of contract rights or the settlement,
release or surrender of contractual, non-contractual or other claims of any
kind, in each case with Persons who are not Affiliates;
(10) the grant in the ordinary course of business of any
non-exclusive license of patents, trademarks, registrations therefor and other
similar intellectual property; and
(11) the sale to a Transitional Funding Trust, either directly or
indirectly, of any intangible transition property established pursuant to a
transitional funding order issued by the ICC.
"Asset Sale Offer" has the meaning assigned to it in Article V, Section
7(a) of this Supplemental Indenture.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such sale and leaseback transaction including any period for which such lease
has been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
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(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership having a corporate general
partner, the board of directors of the general partner of the partnership; and
(3) with respect to any other Person, the board or committee of
such Person serving a similar function.
"Board Resolution" means a copy of a resolution certified by the
Secretary or Assistant Secretary, or the equivalent thereof, to have been duly
adopted by the Board of Directors of a Person and to be in full force and effect
on the date of such certification.
"Bonds" has the meaning assigned to it in the first Recital of this
Supplemental Indenture.
"Capital Lease Obligation" means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured
by the United States government or any agency or instrumentality of the United
States government (provided that the full faith and credit of the United States
is pledged in support of those securities) having maturities of not more than
one year from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits
with maturities of 180 days or less from the date of acquisition, bankers'
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acceptances with maturities not exceeding 180 days and overnight bank deposits
and similar types of investments routinely offered by commercial banks, in each
case, with any lender under a Credit Facility or any commercial bank having
capital and surplus in excess of $500.0 million and a Thomson Bank Watch Rating
of "B" or better;
(4) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications specified
in clause (3) above;
(5) commercial paper having one of the two highest ratings
obtainable from Moody's or S&P and in each case maturing within 270 days after
the date of acquisition; and
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through (5) of
this definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the properties or assets
of the Company and its Restricted Subsidiaries taken as a whole to any "person"
(as that term is used in Section 13(d)(3) of the Exchange Act, including any
"group" with the meaning of the Exchange Act) other than to Dynegy or a
Subsidiary of Dynegy;
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company or Dynegy;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above) becomes the Beneficial Owner, directly or
indirectly, of more than 40% of the Voting Stock of the Company or Illinova or
Dynegy, measured by voting power rather than number of shares; or
(4) the first day on which a majority of the members of the
Board of Directors of the Company or Dynegy are not Continuing Directors.
"Change of Control Offer" has the meaning assigned to it in Article V,
Section 6(a)(i) of this Supplemental Indenture.
"Change of Control Payment" has the meaning assigned to it in Article
V, Section 6(a)(i) of this Supplemental Indenture.
"Change of Control Payment Date" has the meaning assigned to it in
Article V, Section 6(a)(ii) of this Supplemental Indenture.
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"Commission" means the U.S. Securities and Exchange Commission or any
successor agency.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any net loss realized by such Person or any
of its Subsidiaries in connection with an Asset Sale or the disposition of any
securities or extinguishment of Indebtedness, to the extent such losses were
deducted in computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person
and its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income; plus
(3) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and whether or
not capitalized (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net of the effect of all payments made or received pursuant to Hedging
Obligations), to the extent that any such expense was deducted in computing such
Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of goodwill
and other intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period) and other non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or reserve for
cash expenses in any future period) of such Person and its Restricted
Subsidiaries for such period to the extent that such depreciation, amortization
and other non-cash expenses were deducted in computing such Consolidated Net
Income; plus
(5) all extraordinary, unusual or non-recurring items of loss or
expense to the extent not included in clause (1) above;
minus
(6) non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue in the ordinary course of
business;
in each case, on a consolidated basis and determined in accordance with GAAP;
provided that non-cash expenses recorded as a result of deferred energy
accounting will not be added to Consolidated Net Income.
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"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
(1) the aggregate Net Income (but not net loss in excess of such
aggregate Net Income) of any Person that is not a Restricted Subsidiary or that
is accounted for by the equity method of accounting will be included only to the
extent of the amount of dividends or distributions paid in cash to the specified
Person or a Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be excluded
to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, partners or members;
(3) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition will be excluded;
(4) the cumulative effect of a change in accounting principles
will be excluded; and
(5) any equity in earnings or losses of Illinova or Dynegy will be
excluded.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who:
(1) was a member of the Board of Directors on the original issue
date of the Initial Bonds; or
(2) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who were
members of such Board of Directors at the time of such nomination or election.
"Credit Facilities" means one or more debt facilities or commercial
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans or letters of credit, in each
case, as amended, restated, modified, renewed, refunded, replaced or refinanced
in whole or in part from time to time, and includes any securities issued
pursuant to the Indenture in order to secure any amounts outstanding under a
credit
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facility from time to time; provided that the obligation of the Company to make
any payment on any such securities shall be:
(1) no greater than the amount required to be paid under such
credit facility that is secured by such payment obligation;
(2) payable no earlier than such amount is required to be paid
under such credit facility; and
(3) deemed to have been paid or otherwise satisfied and discharged to
the extent that the Company has paid such amount under such credit facility;
provided further, that any amounts the Company is obligated to pay under such
securities will not be included for purposes of determining the aggregate amount
outstanding under Credit Facilities that is permitted under Article V, Section
4(b)(ii)(A) under the caption "Triggering Events--Incurrence of Indebtedness and
Issuance of Preferred Stock" below.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default as defined in the
Indenture.
"Depository" or "DTC" means The Depository Trust Company, its nominees
and their respective successors.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event (other than as a result of an optional
redemption by the issuer thereof), matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the holder of the Capital Stock, in whole or in part, on or prior to the date
that is 91 days after the date on which the Mortgage Bonds mature.
Notwithstanding the preceding sentence, any Capital Stock that would constitute
Disqualified Stock solely because the holders of the Capital Stock have the
right to require the Company to repurchase such Capital Stock upon the
occurrence of a change of control or an asset sale will not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Company
or such Restricted Subsidiary may not repurchase or redeem any such Capital
Stock pursuant to such provisions unless such repurchase or redemption complies
with the Triggering Event described in Article V, Section 4(a) under the caption
"Triggering Events--Restricted Payments".
"DMG Power Purchase Agreement" means the Power Purchase Agreement
between the Company and Dynegy Midwest Generation, Inc. existing on the Issue
Date, as amended, restated, modified, renewed or replaced in whole or in part
from time to time, provided that any such amendment,
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restatement, modification, renewal or replacement shall have been approved by
appropriate regulatory authorities.
"Dynegy" means Dynegy, Inc., an Illinois corporation and the parent
company of Illinova and the indirect parent company of
the Company.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Escrow Agreement" means the Escrow Agreement to be dated as of the
Issue Date by and among Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as
representative of the several Initial Purchasers, the Trustee and the escrow
agent named therein relating to the proceeds of the Tranche Two Initial Bonds.
"Event of Default" means an Event of Default as defined in the
Indenture.
"Excess Proceeds" has the meaning assigned to it in Article V, Section
6(b)(iv) of this Supplemental Indenture. "Exchange Act" means the Securities
Exchange Act of 1934, as amended.
"Exchange Bonds" has the meaning assigned to it in Article III, Section
1 of this Supplemental Indenture.
"Existing Indebtedness" means all Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under a Credit Facility) in existence on
the original issue date of the Initial Bonds and the Transitional Funding Notes
Series 1998-1 issued by a Transitional Funding Trust, and any Indebtedness
consisting of letters of credit for purposes of supporting the Company's
obligations arising out of its sale of its electric transmission assets, not to
exceed $45 million at any time outstanding.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued, including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, the interest component of all distributions made by a
Transitional Funding Trust to holders of its Transitional Funding Notes, imputed
interest with respect to Attributable Debt, commissions, discounts and other
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fees and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received pursuant to
Hedging Obligations described in clause (1) of the definition of Hedging
Obligations; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period;
plus
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries, whether or
not such Guarantee or Lien is called upon; plus
(4) all dividends, whether paid or accrued and whether or not in
cash, on any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividends on Equity Interests payable solely in Equity
Interests of the Company (other than Disqualified Stock) or to the Company or a
Restricted Subsidiary of the Company.
"Fixed Charge Coverage Ratio" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
and its Restricted Subsidiaries for such period to the Fixed Charges of such
Person and its Restricted Subsidiaries for such period. In the event that the
specified Person or any of its Restricted Subsidiaries incurs, assumes,
Guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the end of the period for which the Fixed Charge Coverage Ratio is
being calculated and on or prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect
to such incurrence, assumption, Guarantee, repayment, repurchase or redemption
of Indebtedness, or such issuance, repurchase or redemption of preferred stock,
and the use of the proceeds therefrom as if the same had occurred at the
beginning of the applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the specified Person or
any of its Restricted Subsidiaries, including through mergers, consolidations or
otherwise (including acquisitions of assets used in a Permitted Business) and
including any related financing transactions, during the four-quarter reference
period or subsequent to such reference period and on or prior to the Calculation
Date will be given pro forma effect as if they had occurred on the first day of
the four-quarter reference period, including any pro forma expense and
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cost reductions that have occurred or are reasonably expected to occur, in the
reasonable judgment of the chief financial officer of the Company (regardless of
whether those cost savings or operating improvements could then be reflected in
pro forma financial statements in accordance with Regulation S-X promulgated
under the Securities Act or any other regulation or policy of the Commission
related thereto);
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, will be excluded; and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, will be excluded, but only to the extent that the
obligations giving rise to such Fixed Charges will not be obligations of the
specified Person or any of its Restricted Subsidiaries following the Calculation
Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the original issue date of the Initial Bonds.
"Global Bonds" has the meaning assigned to it in Article IV, Section
3(a) of this Supplemental Indenture.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any specified Person, the
net obligations (not the notional amount) of such Person incurred in the normal
course of business and not for speculative purposes under:
(1) interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements designed to protect the Person entering into
the agreement against fluctuations in interest rates with respect to
Indebtedness incurred and not for purposes of speculation;
(2) foreign exchange contracts and currency protection agreements
entered into with one or more financial institutions designed to protect the
Person entering into the agreement against
14
fluctuations in currency exchange rates with respect to Indebtedness incurred
and not for purposes of speculation;
(3) any commodity futures contract, commodity option or other
similar agreement or arrangement designed to protect against fluctuations in the
price of commodities used by that Person at the time; and
(4) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or currency exchange rates.
"ICC" means the Illinois Commerce Commission.
"Illinova" means Illinova Corporation, an Illinois corporation and
direct parent company of the Company.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect thereof other than
letters of credit taken out by such Person in the ordinary course of business,
to the extent not drawn);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase
price of any property, except any such balance that constitutes an accrued
expense or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount; and
15
(2) the principal amount of the Indebtedness, together with any
interest on the Indebtedness that is more than 30 days past due, in the case of
any other Indebtedness.
"Indenture" has the meaning assigned to it in the first paragraph of
this Supplemental Indenture.
"Initial Bonds" has the meaning assigned to it in Article II Section 1
of this Supplemental Indenture.
"Initial Purchasers" means, with respect to the Initial Bonds, the
entities identified as purchasers in the Purchase Agreement.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Investment Grade Rating" means a rating equal to or higher than Baa3
(or the equivalent) by Moody's or BBB- (or the equivalent) by S&P.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, moving, travel and similar advances to
officers and employees made in the ordinary course of business), purchases or
other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of the Company, the Company will be deemed to have made an Investment
on the date of any such sale or disposition equal to the fair market value of
the Equity Interests of such Subsidiary not sold or disposed of in an amount
determined as provided in Article V, Section 4(a)(iii) under the caption
"Triggering Events--Restricted Payments". The acquisition by the Company or any
Subsidiary of the Company of a Person that holds an Investment in a third Person
will be deemed to be an Investment by the Company or such Subsidiary in such
third Person in an amount equal to the fair market value of the Investment held
by the acquired Person in such third Person in an amount determined as provided
in Article V, Section 4(a)(iii) of the Triggering Event described below under
the caption "Triggering Events--Restricted Payments".
"Issue Date" means the original issue date of the Tranche One Initial
Bonds and is sometimes referred to as the "original issue date" in this
Supplemental Indenture.
16
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction other
than a precautionary financing statement representing a lease not intended as a
security agreement.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor to the
rating agency business thereof.
"Mortgage Bonds" means the Mortgage Bonds, 11.50% Series due 2010 and
includes, if, as and when issued, the Initial Bonds, the Exchange Bonds and the
Private Exchange Bonds, as applicable.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) the aggregate gain (but not loss in excess of such aggregate
gain), together with any related provision for taxes on such gain (but not loss
in excess of such aggregate gain), realized in connection with: (a) any Asset
Sale; or (b) the disposition of any securities by such Person or any of its
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Subsidiaries; and
(2) the aggregate extraordinary, unusual or non-recurring gain
(but not loss in excess of such aggregate extraordinary gain), together with any
related provision for taxes on such extraordinary gain (but not loss).
"Net Proceeds" means the aggregate proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale in cash or Cash
Equivalents (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale), net
of the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale, taxes paid or
estimated to be payable as a result of the Asset Sale, in each case, after
taking into account any available tax credits or deductions and any tax sharing
arrangements, amounts required to be applied to the repayment of Indebtedness,
secured by a Lien on the asset or assets that were the subject of such Asset
Sale and any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP.
17
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), (b) is directly or
indirectly liable as a guarantor or otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any rights that
the holders of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both any
holder of any other Indebtedness (other than the Mortgage Bonds) of the Company
or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment of the Indebtedness to be accelerated or
payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that
they shall not have any recourse to the stock or assets of the Company or any of
its Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offer Amount" has the meaning assigned to it in Article V, Section
7(b) of this Supplemental Indenture.
"Offer Period" has the meaning assigned to it in Article V, Section
7(b) of this Supplemental Indenture.
"Permitted Business" means any business that derives a majority of its
revenues from the business engaged in by the Company and its Restricted
Subsidiaries on the original issue date of the Mortgage Bonds and/or activities
that are reasonably similar, ancillary, incidental, complementary or related to,
or a reasonable extension, development or expansion of, the businesses in which
the Company and its Restricted Subsidiaries are engaged on the original issue
date of the Mortgage Bonds, as determined in good faith by the Board of
Directors.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted
Subsidiary of the Company (excluding redemptions, purchases, acquisitions or
retirements of Equity Interests of the Company);
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary
of the Company in a Person, if as a result of such Investment:
18
(a) such Person becomes a Restricted Subsidiary of the
Company; or
(b) such Person is merged, consolidated or amalgamated
with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the
Company or a Restricted Subsidiary of the Company);
(4) any Investment made as a result of the receipt of
consideration consisting of other than cash or Cash Equivalents from (a) an
Asset Sale that was made pursuant to and in compliance with the provisions in
Article V, Section 6(b) under the caption "Repurchase at the Option of
Holders--Asset Sales" or (b) a disposition of assets not constituting an Asset
Sale pursuant to clause (1) of the items deemed not to be Asset Sales under the
definition of "Asset Sale";
(5) any acquisition of assets to the extent it is in exchange for
the issuance of Equity Interests (other than Disqualified Stock) of the Company;
(6) any Investments received in compromise of obligations of trade
creditors or customers that were incurred in the ordinary course of business,
including pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any trade creditor or customer;
(7) Hedging Obligations;
(8) payroll advances or loans in the ordinary course of business
to officers and employees of the Company or any of its Restricted Subsidiaries,
so long as the aggregate principal amount of such advances or loans that
constitute Investments does not exceed $1.0 million at any one time outstanding;
(9) any Investments made in accordance with clause (5) of the
definition of "Asset Sale" with respect to items not deemed to be Asset Sales;
and
(10) other Investments in any Person that is not also a Restricted
Subsidiary of the Company having an aggregate fair market value (measured on the
date each such Investment was made and without giving effect to subsequent
changes in value), when taken together with all other Investments made pursuant
to this clause (10) since the original issue date of the Mortgage Bonds, not to
exceed $5 million.
"Permitted Liens" means:
(1) Liens securing any Indebtedness under a Credit Facility that
was permitted by the terms of this Supplemental Indenture to be incurred, and
all Obligations and Hedging Obligations relating to such Indebtedness;
19
(2) Liens in favor of the Company or any Subsidiary Guarantors;
(3) Liens on property of a Person existing at the time such Person
is merged with or into or consolidated with the Company or any Restricted
Subsidiary of the Company; provided that such Liens were in existence prior to
the contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Company or the Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition of the
property by the Company or any Restricted Subsidiary of the Company, provided
that such Liens were in existence prior to the contemplation of such
acquisition;
(5) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by Article V, Section 4(b)(ii)(D) under the caption
"Triggering Events--Incurrence of Indebtedness and Issuance of Preferred Stock"
covering only the assets acquired with such Indebtedness;
(7) Liens securing Existing Indebtedness (including the Lien of
the Indenture);
(8) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded, provided
that any reserve or other appropriate provision as is required in conformity
with GAAP has been made therefor;
(9) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary with respect to Indebtedness or
Attributable Debt (including Hedging Obligations) that does not exceed $15.0
million at any one time outstanding;
(10) Liens to secure Indebtedness permitted by Article V, Section
4(b)(ii)(G),(M) or (N) "Triggering Events--Incurrence
of Indebtedness and Issuance of Preferred Stock";
(11) Liens securing the Mortgage Bonds or any other Indebtedness
issued or to be issued under the Indenture that was permitted to be incurred
under the terms of Article V, Section 4(b) under the caption "Triggering
Events--Incurrence of Indebtedness and Issuance of Preferred Stock");
(12) Liens securing Permitted Refinancing Indebtedness incurred to
refinance Indebtedness that was previously so secured, provided that any such
Lien is limited to all or part of the same property or
20
assets (plus improvements, accessions, proceeds or dividends or distributions in
respect thereof) that secured (or, under the written arrangements under which
the original Lien arose, could secure) the Indebtedness being refinanced or is
in respect of property that is the security for a Permitted Lien hereunder;
(13) Liens, including pledges, rights of offset and bankers' liens,
on deposit accounts, instruments, investment accounts and investment property
(including cash, cash equivalents and marketable securities) from time to time
maintained with or held by any financial and/or depository institutions, in each
case solely to secure any and all Indebtedness or Attributable Debt Obligations
now or hereafter existing of the Company or any of its Subsidiaries in
connection with any deposit account, investment account or cash management
service (including ACH, Fedwire, CHIPS, concentration and zero balance accounts,
and controlled disbursement, lockbox or restricted accounts) now or hereafter
provided by any financial and/or depository institutions to or for the benefit
of the Company, any of its Subsidiaries or any special purpose entity directly
or indirectly providing loans to or making receivables purchases from the
Company or any of its Subsidiaries; and
(14) Liens resulting from the creation and establishment of
intangible transition property pursuant to a transitional funding order issued
by the ICC.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
or a Transitional Funding Trust (other than intercompany Indebtedness) or issued
in replacement of any such Indebtedness repaid or otherwise retired within the
preceding three months; provided that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness extended, refinanced,
renewed, replaced, defeased or refunded (plus all accrued and unpaid interest on
the Indebtedness and the amount of all expenses and premiums incurred in
connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; provided, however, that if such Permitted Refinancing Indebtedness is
issued in exchange for or the net proceeds of which are used for the purpose of
extending, refinancing, renewing, replacing, defeasing or refunding Indebtedness
of a Transitional Funding Trust, such Permitted
21
Refinancing Indebtedness has a final maturity date later than the final maturity
date of, and has a Weighted Average Life to Maturity greater than the Weighted
Average Life to Maturity of, the Mortgage Bonds.
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is contractually subordinated in right of payment
to the Mortgage Bonds, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is subordinated in
right of payment to, the Mortgage Bonds on terms at least as favorable to the
holders of Mortgage Bonds as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and
(4) if the Company is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded, then such
Permitted Refinancing Indebtedness is solely the Indebtedness of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Private Exchange" means the offer by the Company pursuant to the
Registration Rights Agreement to the Initial Purchasers to issue and deliver to
the Initial Purchasers in exchange for the Initial Bonds held by the Initial
Purchasers as part of their initial distribution, a like aggregate principal
amount of Private Exchange Bonds.
"Private Exchange Bonds" has the meaning specified in Article III,
Section 2 of this Supplemental Indenture.
"Purchase Agreement" means, with respect to the Initial Bonds, the
Purchase Agreement dated December 17, 2002 among the Company and the Initial
Purchasers, as such agreement may be amended, modified or supplemented from time
to time.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Rating Agencies" means S&P and Moody's, or if S&P or Moody's or both
shall not make a rating on the Mortgage Bonds publicly available, a nationally
recognized statistical rating agency or agencies, as the case may be, selected
by the Company (as certified by a resolution of its Board of Directors) which
shall be substituted for S&P or Moody's or both, as the case may be.
"Registered Exchange Offer" means the offer by the Company, pursuant to
the Registration Rights Agreement, to Holders of Initial Bonds eligible to
participate in the offer, to issue and deliver to
22
such Holders, in exchange for the Initial Bonds, a like aggregate principal
amount of Exchange Bonds registered under the Securities Act.
"Registration Rights Agreement" means with respect to the Initial
Bonds, the Registration Rights Agreement by and between the Company and Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as representative of the several
Initial Purchasers, as such agreement may be amended, modified or supplemented
from time to time.
"Restricted Global Bond" has the meaning assigned to it in Article IV,
Section 3(a) of this Supplemental Indenture.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payments" has the meaning assigned to it in Article V,
Section 4(a) of this Supplemental Indenture.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a Global
Bond (as appointed by the Depository), or any successor Person thereto, and
shall initially be the Trustee.
"Services and Facilities Agreement" means the Services and Facilities
Agreement, dated as of June 27, 2000, among Dynegy, the Company and Illinova, as
amended, restated, modified, renewed or replaced in whole or in part from time
to time, provided that any such amendment, restatement, modification, renewal or
replacement shall have been approved by appropriate regulatory authorities.
"Shelf Registration Statement" means the registration statement filed
by the Company in connection with the offer and sale of Initial Bonds or Private
Exchange Bonds pursuant to the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the original issue date of the Initial Bonds.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor to the rating agency business
thereof.
23
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees of the corporation, association or other
business entity is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are that Person or one or more Subsidiaries
of that Person (or any combination thereof).
A Transitional Funding Trust will not be deemed to be a Subsidiary of
the Company or any of its Subsidiaries notwithstanding that the financial
results of such Transitional Funding Trust are consolidated with those of the
Company in accordance with GAAP, except for purposes of calculating the Fixed
Charge Coverage Ratio and its components (including Consolidated Net Income).
"Subsidiary Guarantee" means any Guarantee of the Mortgage Bonds to be
executed by any Subsidiary of the Company pursuant to Article V, Section 4(h)
under the caption "Triggering Events--Future Subsidiary Guarantees".
"Subsidiary Guarantors" means any Subsidiary of the Company that
executes a Subsidiary Guarantee in accordance with the provisions of the
Indenture, and their respective successors and assigns.
"Supplemental Indenture" has the meaning assigned to it in the first
paragraph of this Supplemental Indenture.
"Tranche One Initial Bonds" has the meaning assigned to it in Article
II, Section 1 of this Supplemental Indenture.
"Tranche Two Initial Bonds" has the meaning assigned to it in Article
II, Section 1 of this Supplemental Indenture.
24
"Transfer Restricted Bonds" means Initial Bonds or Private Exchange
Bonds that bear or are required to bear the legend set forth in Article IV,
Section 4(b).
"Transitional Funding Notes" means any debt securities issued by a
Transitional Funding Trust in accordance with a transitional funding order of
the ICC.
"Transitional Funding Trust" means the Illinois Power Special Purpose
Trust or any future similar entity, the only assets of which are the intangible
transition property which is the right to receive transition charges collected
by the Company.
"Triggering Event" has the meaning assigned to it in Article V, Section
3(a) of this Supplemental Indenture.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company;
(3) is a Person with respect to which neither the Company nor any
of its Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results;
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company
or any of its Restricted Subsidiaries; and
(5) has at least one director on its Board of Directors that is
not a director or executive officer of the Company or any of its Restricted
Subsidiaries and has at least one executive officer that is not a director or
executive officer of the Company or any of its Restricted Subsidiaries.
Any designation of a Subsidiary of the Company of the Company as an
Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the Board Resolution giving effect to such
designation and an Officer's Certificate certifying that such designation
complied with the preceding conditions and was
25
permitted by Article V, Section 4(a) under the caption "Triggering
Events--Restricted Payments". If, at any time, any Unrestricted Subsidiary would
fail to meet the preceding requirements as an Unrestricted Subsidiary, it will
thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture
and any Indebtedness of such Subsidiary will be deemed to be incurred by a
Restricted Subsidiary of the Company as of such date and, if such Indebtedness
is not permitted to be incurred as of such date under Article V, Section 4(b)
under the caption "Triggering Events--Incurrence of Indebtedness and Issuance of
Preferred Stock", such a Triggering Event will occur.
"U.S." means the United States of America.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount
of each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in respect
of the Indebtedness, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment;
by
(2) the then outstanding principal amount of such Indebtedness.
"Wholly-Owned Subsidiary" means, with respect to any specified Person:
(1) any Subsidiary of which 100% of the total voting power of
shares of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees of the
Subsidiary is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof); and
(2) any Subsidiary all the general partnership interest and
limited partnership interests, if any, of which are owned, directly or
indirectly, by that Person or one or more other Subsidiaries of that Person (or
any combination thereof).
26
ARTICLE II.
DESCRIPTION OF THE INITIAL BONDS
SECTION 1. The Company hereby creates a new series of Bonds to be known
as the "Mortgage Bonds, 11.50% Series due 2010" (the "Initial Bonds"). The
Initial Bonds shall be executed, authenticated and delivered in accordance with
the provisions of, and shall in all respects be subject to, all of the terms,
conditions and covenants of the Indenture, as supplemented and modified,
including the provisions of Article V of this Supplemental Indenture. References
in Article V to "Mortgage Bonds" shall be deemed to include the Initial Bonds.
The Initial Bonds shall be issued in two Tranches with identical terms
except as to principal amount and date of issuance. The first Tranche shall be
in the aggregate principal amount of $400,000,000 which shall be issued on the
Issue Date (the "Tranche One Initial Bonds"). The second Tranche shall be in the
aggregate principal amount of $150,000,000, and shall be issued, subject to ICC
approval, on or before January 31, 2003 (the "Tranche Two Initial Bonds").
The commencement of the first interest period for the Initial Bonds
shall be December 20, 2002. All Initial Bonds shall mature on December 15, 2010,
and shall bear interest at the rate of ELEVEN AND ONE-HALF PER CENT (11.50%) per
annum, payable semi-annually on June 15 and December 15, in each year,
commencing June 15, 2003, until the principal sum is paid in full. If such June
15 or December 15 shall be a legal holiday or a day on which banking
institutions in New York, New York, are not open for business, then the interest
shall be payable on the next succeeding day which shall not be (i) a legal
holiday or (ii) a day on which such institutions are not open for business. The
person in whose name any of the Initial Bonds are registered at the close of
business on any record date (as hereinafter defined) with respect to any
interest payment date shall be entitled to receive the interest payable on such
interest payment date notwithstanding the cancellation of such Initial Bonds
upon any transfer or exchange subsequent to the record date and prior to such
interest payment date; provided, however, that if and to the extent the Company
shall default in the payment of the interest due on such interest payment date,
such defaulted interest shall be paid as provided in Section 3.07 of the
Indenture.
The Company shall perform its obligations under the Registration Rights
Agreement and shall comply in all material respects with the terms and
conditions contained therein including, without limitation, the payment of
additional interest (as described in Section 2.5 of the Registration Rights
Agreement).
The term "record date" as used in this Section with respect to any
interest payment date shall mean the June 1 or December 1, as the case may be,
next preceding the semi-annual interest payment date, or,
27
if such June 1 or December 1 shall be a legal holiday or a day on which banking
institutions in New York, New York, are not open for business, then the next
preceding day which shall not be (i) a legal holiday or (ii) a day on which such
institutions are not open for business.
SECTION 2. The Initial Bonds shall be issued only as registered bonds
without coupons of the denomination of $1,000, or any integral multiple of
$1,000, appropriately numbered. The Initial Bonds may be exchanged, upon
surrender thereof, at the agency of the Company in the City of Chicago,
Illinois, for one or more Initial Bonds of other authorized denominations, for
the same aggregate principal amount, subject to the terms and conditions set
forth in the Indenture.
The Initial Bonds may be exchanged or transferred without expense to
the registered owner thereof except that any taxes or other governmental charges
required to be paid with respect to such transfer or exchange shall be paid by
the registered owner requesting such transfer or exchange as a condition
precedent to the exercise of such privilege.
SECTION 3. The Trustee shall be the Bond Registrar and the Paying Agent
for the Initial Bonds; provided, however, that the Company reserves the right to
change the Bond Registrar and the Paying Agent.
SECTION 4. The Initial Bonds and the Trustee's Certificate of
Authentication shall be substantially in the following forms respectively, and
each such Initial Bond shall have annexed thereto an Assignment and an Option of
Holder to Elect Purchase substantially in the forms of Exhibit D and Exhibit E
hereto, respectively:
[Form of Face of Bond]
THIS BOND IS A GLOBAL BOND WITHIN THE MEANING OF THE INDENTURE REFERRED
TO ON THE REVERSE HEREOF. UNLESS THIS GLOBAL BOND IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO ILLINOIS POWER COMPANY OR ITS AGENT OR AGENTS FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL BOND SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL BOND SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
28
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.*
[Restricted Bonds Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
OTHER STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES
ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR
WHICH IT HAS PURCHASED SECURITIES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") THAT IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH ILLINOIS POWER COMPANY (THE "COMPANY") OR ANY AFFILIATE
OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR TO SUCH SECURITY), ONLY (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT THAT PURCHASES SUCH SECURITY FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT ACQUIRING THE SECURITY FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S
AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH SALE OR TRANSFER (i)
PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM AND (ii) IN EACH OF THE FOREGOING
CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS SECURITY IS
----------------------
* To be included in a book-entry bond.
29
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
30
ILLINOIS POWER COMPANY
(Incorporated under the laws of the State of Illinois)
INITIAL MORTGAGE BOND, 11.50% SERIES DUE 2010
No. . . . . . $550,000,000
ILLINOIS POWER COMPANY, a corporation organized and existing under the
laws of the State of Illinois (the "Company," which term shall include any
successor corporation as defined in the Indenture hereinafter referred to), for
value received, hereby promises to pay to Cede & Co. or registered assigns, the
principal sum of Five Hundred and Fifty Million Dollars ($550,000,000) [or such
amount as is indicated on the Schedule of Exchanges of Bonds attached as Exhibit
A]* on December 15, 2010, in any coin or currency of the United States of
America which at the time of payment is legal tender for public and private
debts, and to pay interest thereon in like coin or currency from December 20,
2002, payable semi-annually on June 15 and December 15 in each year, commencing
June 15, 2003, at the rate of ELEVEN AND ONE-HALF PER CENT (11.50%) per annum,
until the Company's obligation with respect to the payment of such principal
shall be discharged as provided in the Indenture hereinafter mentioned. The
interest so payable on any June 15 or December 15, will, subject to certain
exceptions provided in the Supplemental Indenture dated as of December 15, 2002,
be paid to the person in whose name this Mortgage Bond is registered at the
close of business on the immediately preceding June 1 or December 1, as the case
may be. Both principal of, and interest on, this Mortgage Bond are payable at
the agency of the Company in the City of Chicago, Illinois. So long as any
Mortgage Bonds are represented by a Global Bond, interest (other than interest
payable at maturity or upon redemption) shall be paid in immediately available
funds by wire transfer to the Depository for such Mortgage Bonds, on the written
order of the Depository.
Payment of interest (other than interest payable in accordance with the
provisions of the immediately preceding paragraph) will, subject to certain
exceptions provided in the Indenture referred to herein, be made by check,
mailed to the address of the person entitled thereto as such address shall
appear in the security register as of the applicable record date or, at the
option of the Holder, by wire transfer to an account maintained by such person
with a bank located in the United States.
This Mortgage Bond shall not be entitled to any benefit under the
Indenture or any indenture supplemental thereto, or become valid or obligatory
for any purpose, until the form of certificate endorsed hereon shall have been
signed by or on behalf of BNY Midwest Trust
---------------
* To be included in a book-entry bond.
31
Company, the Trustee under the Indenture, or a successor trustee thereto under
the Indenture (the "Trustee").
The provisions of this Mortgage Bond are continued on the reverse
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
Illinois Commerce Commission No. 6224
IN WITNESS WHEREOF, the Company has caused this Mortgage Bond to be
signed (manually or by facsimile signature) in its name by an Authorized
Executive Officer, as defined in the Indenture, and its corporate seal (or a
facsimile thereof) to be hereto affixed and attested (manually or by facsimile
signature) by an Authorized Executive Officer, as defined in the Indenture.
Dated: December 20, 2002 ILLINOIS POWER COMPANY
By:______________________________
Authorized Executive Officer
(Corporate Seal)
ATTEST:
_________________________________
Authorized Executive Officer
[Form of Trustee's Certificate of Authentication]
This Mortgage Bond is one of the bonds of the series designated therein
referred to in the within-mentioned Indenture dated as of November 1, 1992 and
the Supplemental Indenture dated as of December 15, 2002.
BNY MIDWEST TRUST COMPANY,
Trustee,
By: _____________________________
Authorized Signatory
32
[Form of Reverse of Bond]
This Mortgage Bond is one of a duly authorized issue of bonds of the
Company (the "Bonds") in unlimited aggregate principal amount, of the series
hereinafter specified, all issued and to be issued under and equally secured by
a General Mortgage Indenture and Deed of Trust (the "Indenture"), dated as of
November 1, 1992, executed by the Company to BNY Midwest Trust Company (the
"Trustee"), as Trustee, to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the properties mortgaged
and pledged, the nature and extent of the security, the rights of registered
owners of the Bonds and of the Trustee in respect thereof, and the terms and
conditions upon which the Bonds are, and are to be, secured. The Bonds may be
issued in series, for various principal sums, may mature at different times, may
bear interest at different rates and may otherwise vary as provided in the
Indenture. This Mortgage Bond is one of a series designated as the "Mortgage
Bonds, 11.50% Series due 2010" (the "Mortgage Bonds of the 2010 Series") of the
Company, limited in aggregate principal amount to $550,000,000, issued under and
secured by the Indenture and described in the supplemental indenture dated as of
December 15, 2002 (the "Supplemental Indenture dated as of December 15, 2002"),
between the Company and the Trustee, supplemental to the Indenture.
The Mortgage Bonds of the 2010 Series are subject to additional terms
and conditions, including optional redemption, mandatory redemption, redemption
at the option of the Holders, and certain Triggering Events, all as more fully
set forth in Article V of the Supplemental Indenture dated as of December 15,
2002.
In case an Event of Default, as defined in the Indenture, shall occur,
the principal of all the Bonds at any such time outstanding under the Indenture
may be declared or may become due and payable, upon the conditions and in the
manner and with the effect provided in the Indenture. The Indenture provides
that such declaration may be rescinded under certain circumstances.
In addition to the rights provided to Holders of the Mortgage Bonds of
the 2010 Series under the Indenture, Holders of the Mortgage Bonds of the 2010
Series shall have all the rights set forth in the Registration Rights Agreement,
as defined in the Supplemental Indenture dated as of December 15, 2002,
including without limitation the right to receive additional interest as
described in Section 2.5 thereof.
33
ARTICLE III.
DESCRIPTION OF THE EXCHANGE BONDS AND THE
PRIVATE EXCHANGE BONDS.
SECTION 1. The Company hereby creates a new series of Bonds to be known
as the "Exchange Mortgage Bonds, 11.50% Series due 0000" (xxx "Xxxxxxxx Xxxxx").
The terms of the Exchange Bonds shall be identical in all material respects to
the terms of the Initial Bonds. The Exchange Bonds shall be executed,
authenticated and delivered in accordance with the provisions of, and shall in
all respects be subject to, all of the terms, conditions and covenants of the
Indenture, as supplemented and modified, including the provisions of Article V
of this Supplemental Indenture. References in Article V to "Mortgage Bonds"
shall be deemed to include the Exchange Bonds.
SECTION 2. The Company hereby creates a new series of Bonds to be known
as the "Private Exchange Mortgage Bonds, 11.50% Series due 2010" (the "Private
Exchange Bonds"). The terms of the Private Exchange Bonds shall be identical in
all material respects to the terms of the Initial Bonds. The Private Exchange
Bonds shall be executed, authenticated and delivered in accordance with the
provisions of, and shall in all respects be subject to, all of the terms,
conditions and covenants of the Indenture, as supplemented and modified,
including the provisions of Article V of this Supplemental Indenture. References
in Article V to the "Mortgage Bonds" shall be deemed to include the Private
Exchange Bonds.
SECTION 3. The Trustee shall be the Bond Registrar and the Paying Agent
for the Exchange Bonds and the Private Exchange Bonds; provided, however, that
the Company reserves the right to change the Bond Registrar and the Paying
Agent.
SECTION 4. Each series of the Exchange Bonds and Private Exchange Bonds
and the Trustee's Certificate of Authentication shall be substantially in the
following forms (except that the Private Exchange Bonds shall contain the
Restricted Bonds Legend from the Initial Bonds as set forth below, and each such
Mortgage Bond shall have annexed thereto an Assignment and an Option of Holder
to Elect Purchase substantially in the forms of Exhibit D and Exhibit E hereto,
respectively):
[Form of Face of Bond]
THIS BOND IS A GLOBAL BOND WITHIN THE MEANING OF THE INDENTURE REFERRED
TO ON THE REVERSE HEREOF. UNLESS THIS GLOBAL BOND IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO ILLINOIS POWER COMPANY OR ITS AGENT OR AGENTS FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
34
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL BOND SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL BOND SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.*
[Restricted Bonds Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
OTHER STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES
ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR
WHICH IT HAS PURCHASED SECURITIES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") THAT IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH ILLINOIS POWER COMPANY (THE "COMPANY") OR ANY AFFILIATE
OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR TO SUCH SECURITY), ONLY (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT THAT PURCHASES SUCH SECURITY FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT ACQUIRING THE SECURITY FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S
AND THE
-------------------------
* To be included in a book-entry bond.
35
TRUSTEE'S RIGHT PRIOR TO ANY SUCH SALE OR TRANSFER (i)
PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM AND (ii) IN EACH OF THE FOREGOING
CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.
36
ILLINOIS POWER COMPANY
(Incorporated under the laws of the State of Illinois)
[PRIVATE] EXCHANGE MORTGAGE BOND, 11.50% SERIES DUE 2010
No. . . . . . $550,000,000
ILLINOIS POWER COMPANY, a corporation organized and existing under the
laws of the State of Illinois (the "Company," which term shall include any
successor corporation as defined in the Indenture hereinafter referred to), for
value received, hereby promises to pay to Cede & Co. or registered assigns, the
principal sum of Five Hundred and Fifty Million Dollars ($550,000,000) [or such
amount as is indicated on the Schedule of Exchanges of Bonds attached as Exhibit
A]* on December 15, 2010, in any coin or currency of the United States of
America which at the time of payment is legal tender for public and private
debts, and to pay interest thereon in like coin or currency from December 20,
2002, payable semi-annually on June 15 and December 15 in each year, commencing
June 15, 2003, at the rate of ELEVEN AND ONE-HALF PER CENT (11.50%) per annum,
until the Company's obligation with respect to the payment of such principal
shall be discharged as provided in the Indenture hereinafter mentioned. The
interest so payable on any June 15 or December 15, will, subject to certain
exceptions provided in the Supplemental Indenture dated as of December 15, 2002,
be paid to the person in whose name this [Private] Exchange Bond is registered
at the close of business on the immediately preceding June 1 or December 1, as
the case may be. Both principal of, and interest on, this [Private] Exchange
Bond are payable at the agency of the Company in the City of Chicago, Illinois.
So long as any [Private] Exchange Bonds are represented by a Global Bond,
interest (other than interest payable at maturity or upon redemption) shall be
paid in immediately available funds by wire transfer to the Depository for such
[Private] Exchange Bonds, on the written order of the Depository.
Payment of interest (other than interest payable in accordance with the
provisions of the immediately preceding paragraph) will, subject to certain
exceptions provided in the Indenture referred to herein, be made by check mailed
to the address of the person entitled thereto as such address shall appear in
the security register as of the applicable record date or, at the option of the
Holder, by wire transfer to an account maintained by such person with a bank
located in the United States.
This [Private] Exchange Bond shall not be entitled to any benefit under
the Indenture or any indenture supplemental thereto, or become valid or
obligatory for any purpose, until the form of certificate endorsed hereon shall
have been signed by or on behalf of BNY Midwest
------------------
* To be included in a book-entry bond.
37
Trust Company, the Trustee under the Indenture, or a successor trustee thereto
under the Indenture (the "Trustee").
The provisions of this [Private] Exchange Bond are continued on the
reverse hereof and such continued provisions shall for all purposes have the
same effect as though fully set forth at this place.
Illinois Commerce Commission No. [6250][6251]
IN WITNESS WHEREOF, the Company has caused this [Private] Exchange Bond
to be signed (manually or by facsimile signature) in its name by an Authorized
Executive Officer, as defined in the Indenture, and its corporate seal (or a
facsimile thereof) to be hereto affixed and attested (manually or by facsimile
signature) by an Authorized Executive Officer, as defined in the Indenture.
Dated: ____________, 2002 ILLINOIS POWER COMPANY
By: _____________________________
Authorized Executive Officer
(Corporate Seal)
ATTEST:
_______________________________
Authorized Executive Officer
[Form of Trustee's Certificate of Authentication]
This [Private] Exchange Bond is one of the bonds of the series
designated therein referred to in the within-mentioned Indenture dated as of
November 1, 1992 and the Supplemental Indenture dated as of December 15, 2002.
BNY MIDWEST TRUST COMPANY,
Trustee,
By: _____________________________
Authorized Signatory
38
[Form of Reverse of Bond]
This [Private] Exchange Bond is one of a duly authorized issue of bonds
of the Company (the "Bonds") in unlimited aggregate principal amount, of the
series hereinafter specified, all issued and to be issued under and equally
secured by a General Mortgage Indenture and Deed of Trust (the "Indenture"),
dated as of November 1, 1992, executed by the Company to BNY Midwest Trust
Company (the "Trustee"), as Trustee, to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the
properties mortgaged and pledged, the nature and extent of the security, the
rights of registered owners of the Bonds and of the Trustee in respect thereof,
and the terms and conditions upon which the Bonds are, and are to be, secured.
The Bonds may be issued in series, for various principal sums, may mature at
different times, may bear interest at different rates and may otherwise vary as
provided in the Indenture. This [Private] Exchange Bond is one of a series
designated as the "11.50% [Private] Exchange Bonds, 11.50% due 2010" (the
"[Private] Exchange Bonds") of the Company, limited in aggregate principal
amount to $550,000,000, issued under and secured by the Indenture and described
in the supplemental indenture dated as of December 15, 2002 (the "Supplemental
Indenture dated as of December 15, 2002"), between the Company and the Trustee,
supplemental to the Indenture.
The [Private] Exchange Bonds are subject to additional terms and
conditions, including optional redemption, mandatory redemption, redemption at
the option of the Holders, and certain Triggering Events, all as more fully set
forth in Article V of the Supplemental Indenture dated as of December 15, 2002.
In case an Event of Default, as defined in the Indenture, shall occur,
the principal of all the Bonds at any such time outstanding under the Indenture
may be declared or may become due and payable, upon the conditions and in the
manner and with the effect provided in the Indenture. The Indenture provides
that such declaration may be rescinded under certain circumstances.
[In addition to the rights provided to Holders of the Private Exchange
Bonds under the Indenture, Holders of the Private Exchange Bonds shall have all
the rights set forth in the Registration Rights Agreement, as defined in the
Supplemental Indenture, dated as of December 15, 2002, including without
limitation the right to receive additional interest as described in Section 2.5
thereof.]
ARTICLE IV.
ISSUE OF THE INITIAL BONDS, THE EXCHANGE BONDS AND THE PRIVATE EXCHANGE BONDS
SECTION 1. (a) Authentication of Initial Bonds. The Company hereby
exercises the right to obtain the authentication and delivery
39
by the Trustee on the Issue Date of (i) $375,000,000 of the Tranche One Initial
Bonds on the basis of Property Additions pursuant to Section 4.03 of the
Indenture, and (ii) $25,000,000 of the Tranche One Initial Bonds on the basis of
Retired Bonds pursuant to Section 4.04 of the Indenture. The Company hereby
exercises the right to obtain the authentication and delivery by the Trustee of
the Tranche Two Initial Bonds at such time after the Issue Date and on or before
January 31, 2003, as may be set forth in a Company Order in accordance with the
terms of the Indenture.
(b) Authentication of Exchange Bonds and Private Exchange Bonds. The
Company hereby exercises the right to obtain the authentication and delivery by
the Trustee of the Exchange Bonds for issue only in a Registered Exchange Offer
and the Private Exchange Bonds for issue only in a Private Exchange pursuant to
the Registration Rights Agreement for a like principal amount of Initial Bonds,
in each case at such time after the Issue Date as may be set forth in a Company
Order in accordance with the terms of the Indenture.
(c) Maximum Amount. The aggregate principal amount of Initial Bonds,
Exchange Bonds and Private Exchange Bonds outstanding at any time may not exceed
$550,000,000.
SECTION 2. The Initial Bonds, the Exchange Bonds and the Private
Exchange Bonds may be authenticated and delivered prior to the filing for
recordation of this Supplemental Indenture.
SECTION 3. (a) Form and Dating. Initial Bonds shall be offered and sold
only to QIBs in reliance on Rule 144A, and the Private Exchange Bonds shall be
issued only as provided in the Registration Rights Agreement. Both Initial Bonds
and Private Exchange Bonds shall be issued initially in the form of one or more
permanent global bonds in definitive, fully registered form without interest
coupons with the applicable global securities legend and restricted securities
legend set forth in Articles II and III (each, a "Restricted Global Bond"). Each
Restricted Global Bond representing Initial Bonds shall be deposited on behalf
of the purchasers of the Initial Bonds represented thereby with the Trustee, at
its Corporate Trust Office, as Securities Custodian (or with such other
Securities Custodian as the Depository may direct), and registered in the name
of the Depository or a nominee of the Depository, duly executed by the Company
and authenticated by the Trustee as provided herein. Institutional Accredited
Investors who are offered and sold Initial Bonds by QIBs shall receive physical
delivery of certificated Initial Bonds. Exchange Bonds shall be issued in global
form (with the global securities legend set forth in this Article IV). Exchange
Bonds issued in global form and Restricted Global Bonds are sometimes referred
to in this Supplemental Indenture as "Global Bonds." The aggregate principal
amount of the Global Bonds may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depository or its nominee
as hereinafter provided. Such exchanges of Global Bonds and the decrease
40
or increase in the principal amount of a Global Bond will be reported on a
schedule (in substantially the form of Exhibit A).
The Initial Bonds, the Exchange Bonds and the Private Exchange Bonds
shall be treated for all purposes under the Indenture as a single class.
(b) Book-Entry Provisions. This Section 3(b) shall apply only
to a Global Bond deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 3(b), authenticate and deliver initially one or more Global Bonds
that (a) shall be registered in the name of the Depository or the nominee of the
Depository and (b) shall be delivered by the Trustee to the Depository or
pursuant to the Depository's instructions or held by the Trustee as Securities
Custodian.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Supplemental Indenture with respect to any Global Bond
held on their behalf by the Depository or by the Trustee as the Securities
Custodian or under such Global Bond, and the Company, the Trustee and any agent
of the Company or the Trustee shall be entitled to treat the Depository as the
absolute owner of such Global Bond for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Bond.
(c) Certificated Bonds. Except as provided in Section 3, Section 4
or Section 5 of this Article IV, owners of beneficial interests in Global Bonds
shall not be entitled to receive physical delivery of Initial Bonds, Exchange
Bonds or Private Exchange Bonds in certificated form.
SECTION 4. (a) Transfer and Exchange of Global Bonds. (i) The transfer
and exchange of Global Bonds or beneficial interests therein shall be effected
through the Depository, in accordance with this Supplemental Indenture
(including applicable restrictions on transfer set forth herein, if any) and the
procedures of the Depository therefor. A transferor of a beneficial interest in
a Global Bond shall deliver to the Bond Registrar, who shall be responsible for
maintaining a bond register for the registration of Bonds and registration of
transfers thereof, a written order given in accordance with the Depository's
procedures containing information regarding the participant account of the
Depository to be credited with a beneficial interest in the Global Bond. The
Bond Registrar shall, in accordance with such written order, instruct the
Depository to credit to the
41
account of the Person specified in such written order a beneficial interest in
the Global Bond and to debit from the account of the Person making the transfer
and exchange the beneficial interest in the Global Bond being transferred and
exchanged.
(ii) Notwithstanding any other provision of this Supplemental
Indenture (other than the provisions set forth in Section 5), a Global Bond may
not be transferred or exchanged as a whole except by the Depository to a nominee
of the Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(iii) In the event that a Restricted Global Bond or an Initial Bond in
certificated registered form is transferred and exchanged for an Initial Bond in
certificated registered form pursuant to Section 5 prior to the consummation of
a Registered Exchange Offer or the effectiveness of a Shelf Registration
Statement with respect to such Initial Bonds, such Restricted Global Bond or
Initial Bond in certificated registered form may be exchanged only in accordance
with such procedures as are substantially consistent with the provisions of this
Section 4 and such other procedures as may from time to time be adopted by the
Company including:
(A) if such Transfer Restricted Bonds are being delivered to the
Bond Registrar by a Holder for registration in the name of such Holder, without
transfer, a certification from such Holder to that effect (in substantially the
form of Exhibit B hereto); or
(B) if such Transfer Restricted Bonds are being transferred to an
Institutional Accredited Investor, pursuant to a private placement exemption
from the registration requirements of the Securities Act, a certification to
that effect from such Holder (in substantially the form of Exhibit B hereto) and
a certification from the applicable transferee (in substantially the form of
Exhibit C hereto) and an opinion of counsel to that effect if the Company or the
Trustee so requests; or
(C) if such Transfer Restricted Bonds are being transferred in
reliance on and in compliance with another exemption from the registration
requirements of the Securities Act, a certification to that effect from such
Holder (in substantially the form of Exhibit B hereto) and an opinion of counsel
to that effect if the Company or the Trustee so requests.
(iv) In the event that an Initial Bond in certificated registered form
is transferred and exchanged for a beneficial interest in a Global Bond pursuant
to Section 5 prior to the consummation of a Registered Exchange Offer or the
effectiveness of a Shelf Registration Statement with respect to such Initial
Bonds, such Initial Bond may be exchanged only in accordance with such
procedures as are substantially
42
consistent with the provisions of this Section 4 and such other procedures as
may from time to time be adopted by the Company including:
(A) if such Transfer Restricted Bonds are being delivered to the
Bond Registrar by a Holder for registration in the name of such Holder, without
transfer, a certification from such Holder to that effect (in substantially the
form of Exhibit B hereto); or
(B) if such Transfer Restricted Bonds are being transferred in
reliance on and in compliance with another exemption from the registration
requirements of the Securities Act, a certification to that effect from such
Holder (in substantially the form of Exhibit B hereto) and an opinion of counsel
to that effect if the Company or the Trustee so requests.
(b) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii)
and (iv), each Initial Bond certificate and Private Exchange Bond evidencing a
Transfer Restricted Bond shall bear a legend in substantially the following
form:
[Restricted Bonds Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
OTHER STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES
ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR
WHICH IT HAS PURCHASED SECURITIES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") THAT IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH ILLINOIS POWER COMPANY (THE "COMPANY") OR ANY AFFILIATE
OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR TO SUCH SECURITY), ONLY (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT THAT PURCHASES SUCH SECURITY FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
43
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY
SUCH SALE OR TRANSFER (i) PURSUANT TO CLAUSES (D) OR (E) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (ii)
IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE.
(ii) Upon any sale or transfer of a Transfer Restricted Bond
(including any Transfer Restricted Bond represented by a Restricted Global Bond)
pursuant to Rule 144, the Security Registrar shall permit the transferee thereof
to exchange such Transfer Restricted Bond for a certificated Bond that does not
bear the legend set forth above and rescind any restriction on the transfer of
such Transfer Restricted Bond, if the transferor thereof certifies in writing to
the Security Registrar that such sale or transfer was made in reliance on Rule
144 (such certification to be substantially in the form of Exhibit B hereto) and
an Opinion of Counsel to that effect if the Company or the Trustee so requests.
(iii) After a transfer of any Initial Bonds or Private Exchange Bonds
pursuant to and during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Bonds or Private Exchange Bonds all
requirements pertaining to legends on such Initial Bonds or Private Exchange
Bonds with respect to such Bonds transferred will cease to apply and the Initial
Bonds or Private Exchange Bonds in global form, without restrictive transfer
legends, will be available to the transferee of the Holder of such Initial Bonds
or Private Exchange Bonds upon written directions to transfer such Holder's
interest in the Global Bond.
(iv) Upon the consummation of a Registered Exchange Offer with respect
to the Initial Bonds, Exchange Bonds in global form will be available to Holders
that exchange such Initial Bonds in such Registered Exchange Offer without
restrictive transfer legend; however, any (A) broker-dealer who purchased the
Initial Bonds directly from the Company for resale, (B) Person participating in
the Registered Exchange Offer for purposes of distributing the Exchange
44
Bonds or (C) Person who is an "affiliate" (as defined in Rule 144 under the
Securities Act) of the Company will not be able to tender Initial Bonds in the
Registered Exchange Offer. The Company shall identify to the Trustee such
Holders of the Initial Bonds in a written certification signed by an officer of
the Company and, absent certification from the Company to such effect, the
Trustee shall assume that there are no such Holders.
(v) Upon the consummation of a Private Exchange with respect to the
Initial Bonds, all requirements pertaining to such Initial Bonds issued in
global form will still apply with respect to Holders of such Initial Bonds that
do not exchange their Initial Bonds, and Private Exchange Bonds in global form
with the Restricted Bonds Legend set forth in Articles II and III hereto will be
available to Holders that exchange such Initial Bonds in such Private Exchange.
(c) Cancellation or Adjustment of Global Bond. At such time as all
beneficial interests in a Global Bond have either been exchanged for
certificated Bonds, redeemed, purchased or canceled, such Global Bond shall be
returned to the Depository for cancellation or retained and canceled by the
Trustee. At any time prior to such cancellation, if any beneficial interest in a
Global Bond is exchanged for certificated Bonds, redeemed, purchased or
canceled, the principal amount of Bonds represented by such Global Bond shall be
reduced and an adjustment shall be made on the books and records of the
Securities Custodian with respect to such Global Bond.
(d) Obligations with Respect to Transfers and Exchanges of Bonds.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate certificated Bonds and
Global Bonds at the Bond Registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, except as provided in Section 3.05 of the Indenture.
(iii) The Bond Registrar shall not be required to register the
transfer of or exchange of any Bond during a period of 15 business days
immediately preceding the date notice is given of redemption, all in
accordance with Section 3.05 of the Indenture.
(iv) Prior to the due presentation for registration of transfer of
any Bond, the Company, the Trustee, the Paying Agent or the Bond Registrar
may deem and treat the Person in whose name a Bond is registered as the
absolute owner of such Bond for the purpose of receiving payment of
principal of and interest on such Bond and for all other purposes
whatsoever, whether or not such Bond is overdue, and none of the Company,
the Trustee, the Paying
45
Agent or the Bond Registrar shall be affected by notice to the contrary.
(v) All Bonds issued upon any transfer or exchange pursuant to the
terms of the Indenture shall evidence the same debt and shall be entitled
to the same benefits under the Indenture as the Bonds surrendered upon such
transfer or exchange.
(e) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Bond, Agent Member or other person with
respect to the accuracy of the records of the Depository or its nominee or
of any Agent Member, with respect to any ownership interest in the Bonds or
with respect to the delivery to any Agent Member, beneficial owner or other
person (other than the Depository) of any notice (including any notice of
redemption) or the payment of any amount, under or with respect to such
Bonds. All notices and communications to be given to the Holders and all
payments to be made to Holders under the Bonds shall be given or made only
to or upon the order of the registered Holders (which shall be the
Depository or its nominee in the case of a Global Bond). The rights of
beneficial owners in any Global Bond shall be exercised only through the
Depository subject to the applicable rules and procedures of the
Depository. The Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Agent
Members and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Supplemental Indenture or under applicable law with
respect to any transfer of any interest in any Bond (including any
transfers between or among Agent Members or beneficial owners in any Global
Bond) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and
when expressly required by, the terms of the Indenture.
SECTION 5. Certificated Bonds.
(a) A Global Bond deposited with the Depository or with the Trustee as
Securities Custodian pursuant to Section 3 shall be transferred to the
beneficial owners thereof in the form of certificated Bonds in an aggregate
principal amount equal to the principal amount of such Global Bond, in exchange
for such Global Bond, only if such transfer complies with this Section 5 and the
conditions set forth in Section 3.05 of the Indenture.
46
(b) Any Global Bond that is transferable to the beneficial owners thereof
pursuant to this Section shall be surrendered by the Depository to the Trustee
at its Corporate Trust Office to be so transferred, in whole or from time to
time in part, without charge, and the Trustee shall authenticate and deliver,
upon such transfer of each portion of such Global Bond, an equal aggregate
principal amount of certificated Bonds of authorized denominations. Any portion
of a Global Bond transferred pursuant to this Section shall be executed,
authenticated and delivered only in denominations of $1,000 principal amount and
any integral multiple thereof and registered in such names as the Depository
shall direct. Any certificated Bond representing beneficial interests in an
Initial Bond or Private Exchange Bond shall, except as otherwise provided by
Section 4(b) of Article IV, bear the restricted securities legend that is borne
by such Bond.
(c) The Company shall promptly make available to the Trustee a reasonable
supply of certificated Bonds in definitive, fully registered form without
interest coupons only if: (i) DTC notifies the Company that it is unwilling or
unable to continue as a Depository for the Global Bond or if at any time the
Depository ceases to be a clearing agency registered under the Exchange Act, as
amended, and a successor Depository is not appointed by the Company within 90
days; (ii) the Company, at its option, executes and delivers to the Trustee an
order that such Bonds shall be so exchangeable and the transfer so registrable;
or (iii) there shall have occurred and be continuing an Event of Default (as
defined in the Indenture) or any event which after notice or lapse of time or
both would be an Event of Default with respect to the Bonds.
(d) In all cases, certificated Bonds delivered in exchange for any Global
Bond or beneficial interests in such Global Bond will be registered in the
names, and issued in any approved denominations, requested by or on behalf of
the Depository, in accordance with its customary procedures. Any certificated
Bond issued in exchange for an interest in a Global Bond will bear the
restricted securities legend that is borne by such Global Bond. Any such
exchange will be effected through the DTC's Deposit/Withdrawal at Custodian
system and an appropriate adjustment will be made in the records of the
Securities Custodian to reflect a decrease in the principal amount of the
relevant Global Bond.
ARTICLE V.
ADDITIONAL PROVISIONS RELATING TO THE INITIAL BONDS, THE EXCHANGE
BONDS AND THE PRIVATE EXCHANGE BONDS
SECTION 1. Optional Redemption.
(a) Optional Redemption. Except as set forth in Section 1(b) below, the
Mortgage Bonds shall not be redeemable at the Company's option prior to December
15, 2006. On and after December 15, 2006,
47
the Company may redeem all or a part of the Mortgage Bonds upon not less than 30
nor more than 60 days' notice, at the Redemption Prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest, if any, on the Mortgage Bonds redeemed, to the applicable Redemption
Date, if redeemed during the twelve-month period beginning on December 15 of the
years indicated below:
Year Percentage
2006 105.750%
2007 102.875%
2008 and thereafter 100.000%
(b) Equity Claw-back. Notwithstanding the foregoing, at any time prior to
December 15, 2005, the Company may on any one or more occasions redeem up to 35%
of the aggregate principal amount of the Mortgage Bonds at a Redemption Price of
111.50% of the principal amount, plus accrued and unpaid interest, if any, to
the redemption date, with the net cash proceeds of any public or private
offering of its Equity Interests (other than Disqualified Stock) or a cash
contribution to the Company's equity capital, provided that (i) at least 65% of
the aggregate principal amount of the Mortgage Bonds remains outstanding
immediately after the occurrence of such redemption (excluding Mortgage Bonds
held by the Company and its Affiliates); and (ii) any such redemption occurs
within 120 days of the date of the closing of such offering or contribution.
(c) Notice of Redemption. Notices of redemption shall be mailed by first
class mail at least 30 but not more than 60 days before the Redemption Date to
each Holder of Mortgage Bonds to be redeemed at its registered address, except
that redemption notices may be mailed more than 60 days prior to a Redemption
Date if the notice is issued in connection with a satisfaction and discharge of
the Mortgage Bonds under the Indenture. Notices of redemption may not be
conditional. Except as set forth herein, notices of redemption shall be made in
accordance with Section 5.04 of the Indenture.
(d) Selection of Mortgage Bonds to be Redeemed. In accordance with Section
5.03 of the Indenture, the following method is provided for the selection of
Mortgage Bonds to be redeemed and these procedures shall be followed by the
Trustee in the event of a redemption of the Mortgage Bonds pursuant to the
provisions of this Supplemental Indenture. If less than all of the Mortgage
Bonds are to be redeemed at any time, the Trustee shall select Mortgage Bonds
for redemption as follows:
(i) if the Mortgage Bonds are listed on any national securities
exchange, in compliance with the
48
requirements of the principal national securities exchange on
which the Mortgage Bonds are listed; or
(ii) if the Mortgage Bonds are not listed on any national securities
exchange, on a pro rata basis, by lot or by such method as the
Trustee deems fair and appropriate.
No Mortgage Bonds of $1,000 principal amount or less can be redeemed in
part.
SECTION 2. Mandatory Redemption.
(a) Except as provided in Article V, Section 2(b) or Article V, Section 3
below, the Company is not required to make mandatory redemption or sinking fund
payments with respect to the Mortgage Bonds.
(b) Upon the occurrence of the events described below in clauses (i) or
(ii) of this Article V, Section 2(b), the Company shall be required to redeem
the Mortgage Bonds as soon as is permissible in accordance with the procedures
of DTC, at a Redemption Price equal to 100% of the aggregate principal amount of
the Mortgage Bonds plus accrued and unpaid interest, if any, on the Mortgage
Bonds to the date of redemption, without further action or notice on the part of
the Trustee or the Holders of the Mortgage Bonds:
(i) the Company or any of its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary pursuant to or within
the meaning of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a custodian of it or for all
or substantially all of its property,
(D) makes general assignment for the benefit of its creditors,
or
(E) admits in writing of its inability to pay its debts
generally as they become due; or
(ii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any of its
Subsidiaries that is a Significant Subsidiary or
49
any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary in an involuntary
case;
(B) appoints a custodian of the Company or any of its
Subsidiaries that is a Significant Subsidiary or any group
of Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary or for all or substantially all of
the property of the Company or any of its Subsidiaries
that is a Significant Subsidiary or any group of
Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary; or
(C) orders the liquidation of the Company or any of its
Subsidiaries that is a Significant Subsidiary or any group
of Restricted Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
SECTION 3. Redemption at the Option of the Holders.
(a) Upon the occurrence of any of the following events (each a "Triggering
Event"):
(i) failure for 30 days to pay when due interest on the
Mortgage Bonds;
(ii) failure to pay when due the principal of, or premium, if
any, on the Mortgage Bonds;
(iii) the events described in Article V, Sections 4(a), 4(b)
4(c), 4(d), 4(e), 4(f), 4(g), 4(h), 4(i) or 4(j) of this
Supplemental Indenture (under the headings "Triggering
Events--Restricted Payments," "Triggering
Events--Incurrence of Indebtedness and Issuance of
Preferred Stock," "Triggering Events--Liens," "Triggering
Events--Dividend and Other Payment Restrictions Affecting
Subsidiaries," "Triggering Events--Merger, Consolidation
or Sale of Assets," "Triggering Events--Transactions with
Affiliates," "Triggering Events--Designation of Restricted
and Unrestricted Subsidiaries," "Triggering Events--Future
Subsidiary Guarantees," "Triggering Events--Sale and
Leaseback Transactions," or "Triggering Events--Business
Activities");
50
(iv) failure by the Company or any of its Restricted
Subsidiaries for 30 days after notice from the Trustee or
the Holders of at least 25% in principal amount of the
Mortgage Bonds then Outstanding to comply with the
provisions described in Article V, Section 4(k) or Section
6(b) of this Supplemental Indenture (under the headings
"Triggering Events--Reports," and "Repurchase at the
Option of Holders--Asset Sales");
(v) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured
or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries or a
Transitional Funding Trust (or the payment of which is
guaranteed by the Company or any of its Restricted
Subsidiaries or a Transitional Funding Trust) whether such
Indebtedness or guarantee now exists, or is created after
the original issue date of the Mortgage Bonds, if that
default:
(A) is caused by a failure to pay principal of, or
interest or premium, if any, on such Indebtedness
prior to the expiration of the grace period provided
in such Indebtedness on the date of such default (a
"Payment Default"); or
(B) results in the acceleration of such Indebtedness prior
to its express maturity,
and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so
accelerated, aggregates $25 million or more; or
(vi) failure by the Company or any of its Subsidiaries to pay
final judgments no longer subject to appeal or for which
execution of the judgment is not stayed aggregating in
excess of $25 million, which judgments are not paid,
discharged or stayed for a period of 60 days;
the Holders of Mortgage Bonds of at least 25% in principal amount of the
Mortgage Bonds then Outstanding may deliver a notice to the Company requiring
the Company to redeem the Mortgage Bonds at a Redemption Price equal to 100% of
the aggregate principal amount of the Mortgage Bonds plus accrued and unpaid
interest, if any, on the Mortgage Bonds to the Redemption Date. Within three
days after the delivery of such notice, the Company will commence mandatory
redemption of the Mortgage Bonds in accordance with the procedures of
51
DTC with a Redemption Date not more than 30 days after notice to the Holders of
the Mortgage Bonds.
(b) The Holders of a majority in aggregate principal amount of the
Mortgage Bonds then Outstanding by notice to the Company and the Trustee may on
behalf of the Holders of all of the Mortgage Bonds waive any existing Triggering
Event and its consequences except a continuing Triggering Event related to the
payment of interest on, or the principal of, the Mortgage Bonds.
(c) In the case of any Triggering Event occurring by reason of any
willful action or inaction taken or not taken by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Mortgage Bonds
pursuant to the provisions of Article V, Section 1(a) of this Supplemental
Indenture relating to redemption at the option of the Company, an equivalent
premium shall also become and be immediately due and payable to the extent
permitted by law upon the redemption of the Mortgage Bonds at the option of the
Holders thereof. If a Triggering Event occurs prior to December 15, 2006, by
reason of any willful action or inaction taken or not taken by or on behalf of
the Company with the intention of avoiding the prohibition on redemption of the
Mortgage Bonds prior to December 15, 2006, then the premium of 11.50% shall also
become immediately due and payable to the extent permitted by law upon the
redemption of the Mortgage Bonds at the option of the Holders thereof
(d) Upon becoming aware of any Triggering Event, the Company shall
deliver to the Trustee a statement specifying such Triggering Event.
SECTION 4. Triggering Events.
(a) Restricted Payments.
(i) A Triggering Event shall occur if the Company or any of its
Restricted Subsidiaries directly or indirectly:
(A) declares or pays any dividend or makes any other payment or
distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including,
without limitation, any payment in connection with any
merger or consolidation involving the Company or any of its
Restricted Subsidiaries) or to the direct or indirect
holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such
(other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or
to the
52
Company or a Restricted Subsidiary of the
Company);
(B) purchases, redeems or otherwise acquires or
retires for value (including, without
limitation, in connection with any merger or
consolidation involving the Company) any Equity
Interests of the Company or any direct or
indirect parent of the Company;
(C) makes any payment on or with respect to, or
purchases, redeems, defeases or otherwise
acquires or retires for value any Indebtedness
of the Company that is contractually
subordinated in right of payment to the
Mortgage Bonds, except (i) a payment of
interest or principal at the Stated Maturity
thereof, or (ii) a purchase, redemption,
acquisition or retirement required to be made
pursuant to the terms of such Indebtedness
(including pursuant to an asset sale or change
in control provision); or
(D) makes any Restricted Investment (all such
payments and other actions set forth in these
clauses (A) through (D) above being
collectively referred to as "Restricted
Payments"),
unless, at the time of and after giving effect to
such Restricted Payment:
(1) no Default or Event of Default has occurred and
is continuing or would occur as a consequence
of such Restricted Payment;
(2) the Company would, at the time of such
Restricted Payment and after giving pro forma
effect thereto as if such Restricted Payment
had been made at the beginning of the
applicable four-quarter period, have been
permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Article V,
Section 4(b)(i) ("Triggering Events --
Incurrence of Indebtedness and Issuance of
Preferred Stock"); and
(3) such Restricted Payment, together with the
aggregate amount of all other Restricted
Payments made by the Company and its Restricted
Subsidiaries after the original issue date of
the Mortgage Bonds (excluding Restricted
Payments permitted by Article V, Sections
4(a)(ii)(B),
53
4(a)(ii)(C), 4(a)(ii)(D) and 4(a)(ii)(H)), is less
than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the
Company for the period (taken as one accounting
period) from the beginning of the first fiscal
quarter commencing after the original issue date of
the Mortgage Bonds to the end of the Company's most
recently ended fiscal quarter for which internal
financial statements are available at the time of
such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of
such deficit), plus
(b) 100% of the aggregate net cash proceeds
received by the Company (including the fair market
value of any Permitted Business or assets used or
useful in a Permitted Business to the extent acquired
in consideration of Equity Interests (other than
Disqualified Stock) of the Company) since the
original issue date of the Mortgage Bonds as a
contribution to its common equity capital or from the
issue or sale of Equity Interests of the Company
(other than Disqualified Stock and other than sales
to a Restricted Subsidiary of the Company) or from
the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable
debt securities of the Company that have been
converted into or exchanged for such Equity Interests
(other than Disqualified Stock or debt securities
sold to a Restricted Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment
that was made after the original issue date of the
Mortgage Bonds is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (i) the
cash return of capital with respect to such
Restricted Investment (less the cost of disposition,
if any) and (ii) the initial amount of such
Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary
of the Company is redesignated as a Restricted
Subsidiary after the original issue date of the
Mortgage Bonds, the lesser of (i) the fair market
value of the Company's Investment in such Subsidiary
as of the date of such redesignation and (ii) the
book value (determined in accordance with GAAP) of
the Company's
54
Investment in such Subsidiary as of the date
of such redesignation.
(ii) Notwithstanding the foregoing, the following shall
not constitute a Triggering Event:
(A) the payment of any dividend within 60 days
after the date of declaration of the
dividend, if at the date of declaration the
dividend payment would have complied with
the provisions of this Supplemental
Indenture;
(B) the redemption, repurchase, retirement,
defeasance or other acquisition of any
Indebtedness of the Company that is
contractually subordinated in right of
payment to the Mortgage Bonds or of any
Equity Interests of the Company or any
direct or indirect parent of the Company in
exchange for, or out of the net cash
proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary
of the Company) of, Equity Interests of the
Company (other than Disqualified Stock);
provided that the amount of any such net
cash proceeds that are utilized for any such
redemption, repurchase, retirement,
defeasance or other acquisition shall be
excluded from Article V, Section
4(a)(i)(3)(b) above;
(C) the defeasance, redemption, repurchase or
other acquisition of any Indebtedness of the
Company that is contractually subordinated
in right of payment to the Mortgage Bonds
with the net cash proceeds from an
incurrence of Permitted Refinancing
Indebtedness;
(D) the payment of any distribution or dividend
by a Restricted Subsidiary of the Company to
the holders of its Equity Interests on a pro
rata basis;
(E) the repurchase, redemption or other
acquisition or retirement for value of any
Equity Interests of the Company held by any
member of the Company's (or any of its
Restricted Subsidiaries') management
pursuant to any management equity
subscription agreement, stock option
agreement or similar agreement; provided
that the aggregate price paid for all such
repurchased, redeemed, acquired or retired
Equity Interests may not exceed $1.5 million
in any calendar year;
55
(F) payments to Illinova to enable Illinova to
pay its reasonable fees and expenses
(including but not limited to, interest on
Illinova's Indebtedness) incurred in the
ordinary course of business, which fees and
expenses shall not be greater than the sum
of (a) amounts necessary to pay interest
that accrues on the principal amount of
Illinova's 7.125% Senior Notes due 2004
Outstanding on the original issue date of
the Mortgage Bonds, provided that at the
time of payment no Triggering Event shall
have occurred and Illinova shall have made
all required payments on its note or notes
payable to the Company, and (b) $1.0 million
for any calendar year; provided that (a) any
such payment complies with any regulatory
restrictions then applicable to the Company
and (b) the Fixed Charge Coverage Ratio for
the Company's most recently ended four full
fiscal quarters for which internal financial
statements are available immediately
preceding the date on which any such payment
is made was at least 2.0 to 1;
(G) payments of dividends on shares of the
Company's preferred stock Outstanding on the
original issue date of the Mortgage Bonds,
in an amount not to exceed $2.5 million in
any calendar year;
(H) payments made pursuant to the Services and
Facilities Agreement; and
(I) other Restricted Payments in an aggregate
amount since the original issue date of the
Mortgage Bonds not to exceed $5 million;
provided that, with respect to clauses (B), (C),
(E), (F), (G), (H) and (I) above, no Default or
Event of Default shall have occurred and be
continuing immediately after such transaction.
(iii) The amount of all Restricted Payments (other than
cash) shall be the fair market value on the date
of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by
the Company or such Restricted Subsidiary, as the
case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities
that are required to be valued by this Triggering
Event shall be determined by the Board of
Directors whose resolution with respect thereto
shall be delivered to the Trustee. The Board of
Directors' determination must be based upon
56
an opinion or appraisal issued by an accounting,
appraisal or investment banking firm of national
standing if the fair market value exceeds $20
million. Not later than the date of making any
Restricted Payment (excluding Restricted Payments
permitted by clauses (E)-(H) above), the Company
shall deliver to the Trustee an Officer's
Certificate stating that such Restricted Payment
is permitted and setting forth the basis upon
which the calculations required by this Article V,
Section 4(a) ("Restricted Payments") were
computed, together with a copy of any fairness
opinion or appraisal required under this
Supplemental Indenture. The Trustee shall have no
duty or responsibility to determine the accuracy
or correctness of this calculation and shall be
fully protected in relying on such Officer's
Certificate. The Trustee shall make such fairness
opinion available for inspection by Holders of
Mortgage Bonds upon reasonably prior written
request during regular business hours.
(iv) The provisions of this Article V, Section 4(a)
("Restricted Payments") are subject to the
provisions of Article V, Section 5 ("Suspension of
Triggering Events").
(b) Incurrence of Indebtedness and Issuance of Preferred
Stock.
(i) A Triggering Event shall occur if:
(A) the Company or any of its Restricted
Subsidiaries, directly or indirectly, creates,
incurs, issues, assumes, guarantees or
otherwise becomes directly or indirectly
liable, contingently or otherwise, with
respect to (collectively, "incur") any
Indebtedness (including Acquired Debt), or the
Company issues any Disqualified Stock or
permits any of its Restricted Subsidiaries to
issue any shares of preferred stock; provided,
however, that the Company may incur
Indebtedness (including Acquired Debt) or
issue Disqualified Stock, and its Subsidiary
Guarantors may incur Indebtedness (including
Acquired Debt) or issue Disqualified Stock,
without the occurrence of a Triggering Event,
if the Fixed Charge Coverage Ratio for the
Company's most recently ended four full fiscal
quarters for which internal financial
statements are available immediately preceding
the date on which such additional Indebtedness
is incurred or such Disqualified Stock is
issued would have been
57
at least 2.0 to 1, determined on a pro forma
basis (including a pro forma application of
the net proceeds therefrom), as if the
additional Indebtedness had been incurred or
Disqualified Stock had been issued, as the
case may be, at the beginning of such
four-quarter period;
(B) the Company incurs any Indebtedness (including
Permitted Debt as defined below) that is
contractually subordinated in right of payment
to any other Indebtedness of the Company
unless such Indebtedness is also contractually
subordinated in right of payment to the
Mortgage Bonds on substantially identical
terms; provided, however, that no Indebtedness
of the Company will be deemed to be
contractually subordinated in right of payment
to any other Indebtedness of the Company
solely by virtue of being secured on a junior
basis or by virtue of being unsecured; or
(C) a Transitional Funding Trust incurs
Indebtedness represented by Transitional
Funding Notes issued after the original issue
date of the Mortgage Bonds (a) with an
aggregate principal amount in excess of $300
million or (b) for any purpose other than,
directly or indirectly, to refund, refinance
or replace any other Indebtedness of the
Transitional Funding Trust, the Company or any
of its Restricted Subsidiaries.
(ii) Notwithstanding the foregoing, the incurrence of any
of the following items of Indebtedness
(collectively, "Permitted Debt") will not constitute
a Triggering Event:
(A) the incurrence by the Company pursuant to this
clause (A) of additional Indebtedness and
letters of credit under one or more Credit
Facilities (with letters of credit being
deemed to have a principal amount equal to the
maximum potential liability of the Company
thereunder), in an aggregate amount up to $300
million at any time outstanding less any
amounts permanently repaid under any such
Credit Facility with the Net Proceeds of an
Asset Sale;
(B) Existing Indebtedness;
(C) the incurrence by the Company of Indebtedness
represented by the Mortgage Bonds (including
the Exchange Bonds to be issued pursuant to
the
58
Registration Rights Agreement) and the
incurrence by any Subsidiary Guarantor of a
Subsidiary Guarantee of those Mortgage Bonds
(including the Exchange Bonds);
(D) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness
represented by Capital Lease Obligations,
mortgage financings or purchase money
obligations, in each case, incurred for the
purpose of financing all or any part of the
purchase price or cost of construction or
improvement of property, plant or equipment
used in the business of the Company or such
Restricted Subsidiary, in an aggregate
principal amount, including all Permitted
Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness
incurred pursuant to this clause (D), not to
exceed $10.0 million at any time
outstanding;
(E) the incurrence by the Company or any of its
Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to
refund, refinance or replace Indebtedness
(other than intercompany Indebted-ness) that
was incurred under Article V, Section
4(b)(i) or Article V, Section 4(b)(ii)(B),
(C), (E) or (L);
(F) the incurrence by the Company or any of its
Restricted Subsidiaries of intercompany
Indebtedness between or among the Company or
any of its Restricted Subsidiaries;
provided, however, that:
(1) if the Company is the obligor on such
Indebtedness, such Indebtedness must be
expressly subordinated to the prior payment
in full in cash of all Obligations with
respect to the Mortgage Bonds;
(2) if a Subsidiary Guarantor is the obligor
on such Indebtedness, such Indebtedness is
expressly subordinated to the prior payment
in full in cash of such Subsidiary
Guarantor's Subsidiary Guarantee, if any;
and
(3) (a) any subsequent issuance or transfer
of Equity Interests that results in any such
Indebtedness being held by a Person other
than
59
the Company or a Restricted Subsidiary and
(b) any sale or other transfer of any such
Indebtedness to a Person that is not either
the Company or a Restricted Subsidiary shall
be deemed, in each case, to constitute an
incurrence of such Indebtedness by the
Company or such Restricted Subsidiary, as
the case may be, that was not permitted by
this clause (F);
(G) the incurrence by the Company or any of its
Restricted Subsidiaries of Hedging
Obligations;
(H) the guarantee by the Company or any
Restricted Subsidiary of Indebtedness of the
Company or any Restricted Subsidiary that
was permitted to be incurred by another
provision of this Article V, Section 4(b)
("Incurrence of Indebtedness and Issuance of
Preferred Stock");
(I) the accrual of interest, the accretion or
amortization of original issue discount, the
payment of interest on any Indebtedness in
the form of additional Indebtedness with the
same terms, and the payment of dividends on
Disqualified Stock in the form of additional
shares of such Disqualified Stock shall not
be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified
Stock for purposes of this Article V,
Section 4(b) ("Incurrence of Indebtedness
and Issuance of Preferred Stock"); provided,
in each such case, that the amount thereof
is included in the Fixed Charges of the
Company as accrued;
(J) Indebtedness in respect of bid, performance
or surety bonds issued for the account of
the Company or any Restricted Subsidiary
thereof in the ordinary course of business,
including guarantees or obligations of the
Company or any Restricted Subsidiary thereof
with respect to letters of credit supporting
such bid, performance or surety obligations
(in each case other than for an obligation
for money borrowed);
(K) the incurrence by the Company's Unrestricted
Subsidiaries of Non-Recourse Debt; provided,
however, that if any such Indebtedness
ceases to be Non-Recourse Debt of an
Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of
Indebtedness by a
60
Restricted Subsidiary of the Company that
was not permitted by this clause (K);
(L) the incurrence by the Company of additional
Indebtedness consisting of securities issued
pursuant to the Indenture in respect of
claims relating to the Company's obligations
pursuant to agreements with gas, electric
power and other energy suppliers that have
been terminated as of the original issue
date of the Mortgage Bonds;
(M) the incurrence by the Company or any
Restricted Subsidiary of additional
Indebtedness consisting of letters of credit
for purposes of supporting the Company's or
any Restricted Subsidiary's obligations now
or hereafter owing to gas, electric power or
other energy suppliers or transportation or
service providers, not to exceed $25 million
at any time outstanding; and
(N) the incurrence by the Company or any
Restricted Subsidiary of additional
Indebtedness in an aggregate principal
amount (or accreted value, as applicable),
including all Permitted Refinancing
Indebtedness incurred to refund, refinance
or replace any Indebtedness incurred
pursuant to this clause (N), not to exceed
$25 million at any time outstanding.
(iii) For purposes of determining compliance with this
Article V, Section 4(b) ("Incurrence of
Indebtedness and Issuance of Preferred Stock"):
(A) in the event that an item of proposed
Indebtedness, including Acquired Debt, meets
the criteria of more than one of the
categories of Permitted Debt described in
clauses (A) through (N) above, or is
entitled to be incurred pursuant under
Article V, Section 4(b)(i), the Company
shall be permitted to classify (or later
classify or reclassify such Indebtedness, in
whole or in part in its sole discretion)
such item of Indebtedness in any manner that
complies with this Article V, Section 4(b);
and
(B) with respect to any dollar-denominated
restriction on the incurrence of
Indebtedness denominated in a foreign
currency, the dollar-equivalent principal
amount of such Indebtedness incurred
pursuant thereto shall be calculated based
on the relevant currency exchange rate in
61
effect on the date that such Indebtedness was
incurred.
(iv) The provisions of this Article V, Section 4(b)
("Incurrence of Indebtedness and Issuance of
Preferred Stock") are subject to the provisions of
Article V, Section 5 ("Suspension of Triggering
Events").
(c) Liens.
A Triggering Event shall occur if the Company, or any of its Restricted
Subsidiaries, directly or indirectly, creates, incurs, assumes or otherwise
causes or suffers to exist or becomes effective any Lien of any kind securing
Indebtedness or Attributable Debt on any of their property or assets, now owned
or hereafter acquired, except Permitted Liens.
(d) Dividend and Other Payment Restrictions Affecting Subsidiaries.
(i) A Triggering Event will occur if the Company or any of its
Restricted Subsidiaries, directly or indirectly, creates or
permits to exist or becomes effective any consensual
encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(A) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Restricted
Subsidiaries, or pay any Indebtedness owed to the
Company or any of its Restricted Subsidiaries;
(B) make loans or advances to Company or any of its
Restricted Subsidiaries; or
(C) transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries.
(ii) Notwithstanding the foregoing, this Article V, Section 4(d)
Triggering Event shall not apply to encumbrances or
restrictions existing under or by reason of:
(A) agreements governing Existing Indebtedness and Credit
Facilities in effect on the original issue date of
the Mortgage Bonds and any amendments, modifications,
restatements, renewals, increases, supplements,
refundings, replacements or refinancings of those
agreements, provided that the amendments,
modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings
are no more
62
restrictive, taken as a whole, with respect to such
dividend and other payment restrictions than those
contained in those agreements on the original issue
date of the Mortgage Bonds;
(B) the Indenture, this Supplemental Indenture and the
Mortgage Bonds;
(C) applicable law, regulations or regulatory orders;
(D) any instrument governing Indebtedness or Capital
Stock of a Person acquired by the Company or any of
its Restricted Subsidiaries as in effect at the time
of such acquisition (except to the extent such
Indebtedness or Capital Stock was incurred in
connection with or in contemplation of such
acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets
of any Person, other than the Person, or the property
or assets of the Person, so acquired, provided that,
in the case of Indebtedness, such Indebtedness was
permitted by the terms of this Supplemental Indenture
to be incurred;
(E) customary non-assignment provisions in leases and
other agreements entered into in the ordinary course
of business;
(F) purchase money obligations for property acquired in
the ordinary course of business that impose
restrictions on that property of the nature described
in Section 4(d)(i)(C) above;
(G) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions or
dispositions of assets by that Restricted Subsidiary
pending its sale or other disposition;
(H) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing
such Permitted Refinancing Indebtedness are not more
restrictive, taken as a whole, than those contained
in the agreements governing the Indebtedness being
refinanced;
(I) Liens securing Indebtedness or Attributable Debt
otherwise permitted to be incurred under the
provisions of Article V, Section 4(c) ("Liens") that
limit the right of the debtor to dispose of
63
the assets subject to such Liens, and Liens attaching
to intangible transition property established in
accordance with a transitional funding order issued
by the ICC; and
(J) provisions with respect to the disposition or
distribution of assets or property in joint venture
agreements, asset sale agreements, stock sale
agreements and other similar agreements entered into
in the ordinary course of business.
(iii) The provisions of this Article V, Section 4(d) ("Dividends
and Other Payment Restrictions Affecting Restricted
Subsidiaries") are subject to the provisions of Article V,
Section 5 ("Suspension of Certain Triggering Events").
(e) Merger, Consolidation or Sale of Assets.
(i) A Triggering Event will occur if the Company, directly or
indirectly: (1) consolidates or merges with or into another
Person (whether or not the Company is the surviving
corporation); (2) sells, assigns, transfers, conveys or
otherwise disposes of all or substantially all of the
properties or assets of the Company and its Restricted
Subsidiaries taken as a whole, in one or more related
transactions, to another Person or (3) leases all or
substantially all of its properties or assets, in one or
more related transactions, to any other Person, unless:
(A) either: (1) the Company is the surviving corporation;
or (2) the Person formed by or surviving any such
consolidation or merger (if other than the Company)
or to which such sale, assignment, transfer,
conveyance or other disposition has been made is a
Person organized or existing under the laws of the
United States, any state of the United States or the
District of Columbia;
(B) (1) the Person formed by or surviving any such
consolidation or merger (if other than the Company)
or the Person to which such sale, assignment,
transfer, conveyance or other disposition has been
made assumes all the obligations of the Company under
the Mortgage Bonds, the Indenture and the
Registration Rights Agreement pursuant to agreements
in form reasonably satisfactory to the Trustee; and
(2) such Person executes and delivers to the Trustee
64
a supplemental indenture that contains a
grant, conveyance, transfer and mortgage by
such Person confirming the lien of the
Indenture on the property subject to such
lien and subjecting to such lien all property
thereafter acquired by such Person that shall
constitute an improvement, extension or
addition to the property subject to the lien
of the Indenture or renewal, replacement or
substitution of or for any part thereof and,
at the election of such Person, subjecting to
the lien of the Indenture such other property
then owned or thereafter acquired by such
Person as such Person shall specify;
(C) immediately after such transaction no Default
or Event of Default exists;
(D) the Company or the Person formed by or
surviving any such consolidation or merger
(if other than the Company), or to which such
sale, assignment, transfer, conveyance or
other disposition has been made shall, on the
date of such transaction after giving pro
forma effect thereto and any related
financing transactions as if the same had
occurred at the beginning of the applicable
four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio
test set forth in Article V, Section 4(b)(i)
("Incurrence of Indebtedness and Issuance of
Preferred Stock"); provided, however, that
this clause (D) shall be suspended during any
period in which the Company and its
Restricted Subsidiaries are not subject to
the Suspended Triggering Events; and
(E) the Company, or the Person formed by or
surviving any such consolidation or merger
(if other than the Company), or to which such
sale, assignment, transfer, conveyance or
other disposition has been made, shall have
delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each
stating that such transaction and any
supplemental indenture entered into in
connection therewith comply with all of the
terms of this Article V, Section 4(e) and
that all conditions precedent provided for in
this Article V, Section 4(e) relating to such
transaction or series of transactions have
been complied with.
(ii) Clauses (D) and (E) under this Article V, Section
4(e) shall not apply to a sale, assignment,
transfer,
65
conveyance or other disposition of assets between or
among the Company and any of its Restricted
Subsidiaries or as a result of the creation and
establishment of intangible transition property
pursuant to a transition funding order issued by the
ICC.
(f) Transactions with Affiliates.
(i) A Triggering Event will occur if the Company or any
of its Restricted Subsidiaries makes any payment to,
or sells, leases, transfers or otherwise disposes of
any of its properties or assets to, or purchases any
property or assets from, or enters into or makes or
amends any transaction, contract, agreement,
understanding, loan, advance or guarantee with, or
for the benefit of, any Affiliate or any
Transitional Funding Trust (each, an "Affiliate
Transaction"), unless:
(A) the Affiliate Transaction (i) is on terms
that are no less favorable to the Company or
the relevant Restricted Subsidiary than those
that would have been obtained in a comparable
transaction by the Company or such Restricted
Subsidiary with an unrelated Person or (ii)
has been approved by applicable regulatory
authorities; and
(B) the Company delivers to the Trustee:
(1) with respect to any Affiliate Transaction
or series of related Affiliate Transactions
involving aggregate consideration in excess
of $10.0 million, a resolution of the Board
of Directors set forth in an Officer's
Certificate certifying that such Affiliate
Transaction complies with Article V, Section
4(f)(i)(A) above and that such Affiliate
Transaction has been approved by a majority
of the disinterested members of the Board of
Directors; and
(2) with respect to any Affiliate Transaction
or series of related Affiliate Transactions
(i) where there is no disinterested member of
the Board of Directors and the aggregate
consideration is in excess of $10 million, or
(ii) involving aggregate consideration in
excess of $20.0 million, an opinion as to the
fairness to the Holders of Mortgage Bonds of
such Affiliate Transaction from a financial
point of
66
view issued by an accounting, appraisal or investment banking firm
of national standing.
(ii) The following items shall not be deemed to be Affiliate
Transactions and, therefore, shall not be deemed to be a
Triggering Event pursuant to this Article V, Section 4(f):
(A) any employment agreement entered into by the Company or any
of its Restricted Subsidiaries in the ordinary course of
business of the Company or such Restricted Subsidiary;
(B) transactions between or among the Company and/or its
Restricted Subsidiaries;
(C) transactions with a Person that is an Affiliate of the
Company solely because the Company owns an Equity Interest
in such Person;
(D) payment of reasonable directors fees to Persons who are not
otherwise Affiliates of the Company;
(E) sales of Equity Interests (other than Disqualified Stock)
to Affiliates of the Company;
(F) Permitted Investments pursuant to this Supplemental
Indenture and Restricted Payments that are permitted by the
provisions of Article V, Section 4(a) (under the heading
"Restricted Payments");
(G) fees and compensation paid to and indemnity provided on
behalf of directors, officers or employees of the Company
or any Restricted Subsidiary of the Company in the ordinary
course of business, including reimbursement or advancement
of out of pocket expenses and provision of directors' and
officers' liability insurance;
(H) transactions pursuant to any agreement in effect on the
original issue date of the Mortgage Bonds as the same may
be amended from time to time in any manner not materially
less favorable to the Holders of the Mortgage Bonds;
(I) advances to officers, directors and employees of the
Company or any Restricted Subsidiary made in the ordinary
course of business of the Company and/or its Restricted
Subsidiaries and in
67
compliance with applicable law in an aggregate amount not
to exceed $1.0 million outstanding at any one time;
(J) transactions pursuant to the Services and Facilities
Agreement or the DMG Power Purchase Agreement, as the same
may be amended, renewed, extended, replaced or otherwise
modified, provided such amendment, renewal, extension,
replacement or other modification has been approved by the
applicable regulatory agency;
(K) transactions respecting the renewal of the lease of the
Xxxxxx Energy Center on terms no less favorable to Illinois
Power and dispositions of the leased property by Illinois
Power for consideration not less than Illinois Power's
purchase price of such property;
(L) purchases of natural gas supply and transportation by
Illinois Power from an Affiliate, and sales of electric
transmission services, natural gas supply and distribution
services and electric supply and distribution services by
Illinois Power to an Affiliate, in each case in the
ordinary course of business in accordance with past
practices so long as such purchases or sales are subject to
regulatory oversight; and
(M) the sale to a Transitional Funding Trust, either directly
or indirectly, of any intangible transition property
established pursuant to a transitional funding order issued
by the ICC.
(iii) The provisions of this Article V, Section 4(f) ("Transactions with
Affiliates") are subject to the provisions of Article V, Section 5
("Suspension of Certain Triggering Events").
(g) Designation of Restricted and Unrestricted Subsidiaries.
(i) The Board of Directors may designate any Restricted Subsidiary to
be an Unrestricted Subsidiary if that designation would not cause
a Triggering Event; provided that in no event shall the business
currently operated by the Company be transferred to or held by an
Unrestricted Subsidiary. If a Restricted Subsidiary is designated
as an Unrestricted Subsidiary, the aggregate fair market value of
all outstanding Investments owned by the Company and its
Restricted
68
Subsidiaries in the Subsidiary properly designated
shall be deemed to be an Investment made as of the
time of the designation and shall reduce the amount
available for Restricted Payments under Article V,
Section 4(a)(i) (under the heading "Restricted
Payments"). That designation shall only be permitted
if the Investment would be permitted at that time
and if the Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
(ii) The Board of Directors may at any time designate any
Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that (1) such designation shall
be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any
outstanding Indebtedness of such Unrestricted
Subsidiary and (2) such Indebtedness is permitted
under Article V, Section 4(b) (under the heading
"Incurrence of Indebt-edness and Issuance of
Preferred Stock"), calculated on a pro forma basis
as if such designation had occurred at the beginning
of the four-quarter reference period; and (3) no
Default or Event of Default would be in existence
following such designation.
(iii) The provisions of this Article V, Section 4(g)
("Designation of Restricted and Unrestricted
Subsidiaries") are subject to the provisions of
Article V, Section 5 ("Suspension of Certain
Triggering Events").
(h) Future Subsidiary Guarantees.
(i) A Triggering Event will occur if any Restricted
Subsidiary of the Company guarantees the payment of
any Indebtedness of the Company unless (1) such
Restricted Subsidiary simultaneously executes and
delivers to the Trustee a Subsidiary Guarantee of
such Restricted Subsidiary except that with respect
to a Guarantee of Indebtedness of the Company if
such Indebtedness is by its express terms
subordinated in right of payment to the Mortgage
Bonds, any such Guarantee of such Restricted
Subsidiary with respect to such Indebtedness shall
be subordinated in right of payment to such
Restricted Subsidiary's Subsidiary Guarantee with
respect to the Mortgage Bonds substantially to the
same extent as such Indebtedness is subordinated to
the Mortgage Bonds; (2) such Restricted Subsidiary
waives and does not in any manner whatsoever claim
or take the benefit or advantage of, any rights or
reimbursement, indemnity
69
or subrogation or any other rights against the
Company or any other Restricted Subsidiary as a
result of any payment by such Restricted Subsidiary
under its Subsidiary Guarantee of the Mortgage
Bonds; and (3) such Restricted Subsidiary delivers
to the Trustee an Opinion of Counsel to the effect
that (a) such Subsidiary Guarantee has been duly
executed and authorized and (b) such Subsidiary
Guarantee constitutes a valid, binding and
enforceable obligation of such Restricted
Subsidiary, except insofar as enforcement thereof
may be limited by bankruptcy, insolvency or similar
laws (including, without limitation, all laws
relating to fraudulent transfers) and except insofar
as enforcement thereof is subject to general
principles of equity; provided that this Article V,
Section 4(h)(i) shall not be applicable to any
Guarantee of any Restricted Subsidiary that (x)
existed at the time such Person became a Restricted
Subsidiary of the Company and (y) was not incurred
in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary of the
Company.
(ii) Notwithstanding the foregoing and the other
provisions of this Supplemental Indenture, in the
event a Subsidiary Guarantor is sold or disposed of
(whether by merger, consolidation, the sale of its
Capital Stock or the sale of all or substantially
all of its assets (other than by lease) and whether
or not the Subsidiary Guarantor is the surviving
corporation in such transaction) to a Person which
is not the Company or a Restricted Subsidiary of the
Company, such Subsidiary Guarantor shall be released
from its obligations under its Subsidiary Guarantee
if:
(A) the sale or other disposition shall not
result in a Triggering Event; and
(B) the Subsidiary Guarantor is also released or
discharged from its obligations under the
Guarantee which resulted in the creation of
such Subsidiary Guarantee, except by or as a
result of payment under such Guarantee.
(iii) A Subsidiary Guarantor shall be released from its
obligations under its Subsidiary Guarantee if it is
released or discharged from its obligations under
the Guarantee which resulted in the creation of such
Subsidiary Guarantee, except by or as a result of
payment under such Guarantee.
70
(i) Sale and Leaseback Transactions. A Triggering Event will occur if the
Company or any of its Restricted Subsidiaries enters into any sale and leaseback
transaction; provided that the Company or any Restricted Subsidiary may enter
into a sale and leaseback transaction if:
(A) the Company or that Restricted Subsidiary, as
applicable, could have incurred Indebtedness
in an amount equal to the Attributable Debt
relating to such sale and leaseback
transaction under the Fixed Charge Coverage
Ratio test in Article V, Section 4(b)(i)
(under the heading "Incurrence of
Indebtedness and Issuance of Preferred
Stock");
(B) the gross cash proceeds of that sale and
leaseback transaction are at least equal to
the fair market value, as determined in good
faith by the Board of Directors and set forth
in an Officer's Certificate delivered to the
Trustee, of the property that is the subject
of that sale and leaseback transaction; and
(C) the transfer of assets in that sale and
leaseback transaction is permitted by, and
the Company applies the proceeds of such
transaction in compliance with, the
Triggering Event described below under
Article V, Section 6(b) of this Supplemental
Indenture (under the heading "Asset Sales");
provided, however, that the foregoing clauses (A) and (C) shall be
suspended during any period in which the Company and its Restricted
Subsidiaries are not subject to the Suspended Triggering Events.
(j) Business Activities.
A Triggering Event will occur if the Company or any Restricted
Subsidiaries engages in any business other than Permitted Businesses, except to
such extent as would not be material to the Company and its Subsidiaries taken
as a whole.
(k) Reports.
(i) Whether or not required by the Commission, so long as any
Mortgage Bonds are Outstanding, the Company shall furnish to the
Holders of Mortgage Bonds (unless publicly available on the
Commission's XXXXX system) within the time periods specified in
the Commission's rules and regulations (as if required):
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(A) all quarterly and annual financial information that
would be required to be contained in a filing with
the Commission on Forms 10-Q and 10-K if the Company
were required to file such Forms, including a
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the
certifications that would be required by Rule 13a-14
under the Exchange Act and, with respect to the
annual information only, a report on the annual
financial statements by the Company's certified
independent accountants; and
(B) all current reports that would be required to be
filed with the Commission on Form 8-K if the Company
were required to file such reports,
failing which a Triggering Event will occur 30 days after
notice as specified in Article V, Section 3(a)(iv).
(ii) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual
financial information required by the preceding paragraph
shall include a reasonably detailed presentation, either on
the face of the financial statements or in the footnotes
thereto, and in Management's Discussion and Analysis of
Financial Condition and Results of Operations, of the
financial condition and results of operations of the
Company and its Restricted Subsidiaries separate from the
financial condition and results of operations of the
Unrestricted Subsidiaries of the Company.
(iii) In addition, a Triggering Event will occur, after notice
and expiration of time as specified in Article V, Section
3(a)(iv), if (1) the Company fails to file a copy of all of
the information and reports referred to in clauses (i) and
(ii) above with the Commission for public availability
within the time periods specified in the Commission's rules
and regulations (unless the Commission shall not accept
such a filing) and fails to make such information available
to securities analysts and prospective investors upon
request or (2) the Company fails to furnish to the Holders
of Mortgage Bonds and to prospective investors, upon their
request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
(iv) The Company shall deliver to the Trustee annually an
Officer's Certificate regarding compliance with the
72
Indenture as required by the Trust Indenture Act of 1939,
and, upon becoming aware of any Triggering Event, the Company
shall deliver to the Trustee a statement specifying such
Triggering Event, failing which a Triggering Event will occur
30 days after notice as specified in Article V, Section
3(a)(iv).
(l) Asset Sales.
(i) A Triggering Event will occur, subject to notice and lapse of
time, if the Company or any of its Restricted Subsidiaries consummates an
Asset Sale as provided, and subject to the exceptions, in Article V,
Section 6(b) ("Repurchase at the Option of Holders -- Asset Sales"), or
does not comply with the provisions respecting an Asset Sale as provided
in Article V, Section 7 ("Offer to Purchase by Application of Excess
Proceeds").
(ii) The provisions of this Article V, Section 4(l) ("Asset
Sales") are subject to the provisions of Article V, Section 5
("Suspension of Certain Triggering Events").
SECTION 5. Suspension of Triggering Events.
(a) During any period of time that the Mortgage Bonds have an
Investment Grade Rating from both of the Rating Agencies and no Default or Event
of Default has occurred and is continuing under the Indenture, the Company and
its Restricted Subsidiaries shall not be subject to the following provisions of
this Supplemental Indenture :
. Article V, Section 4(a) (under the heading "--Restricted
Payments");
. Article V, Section 4(b) (under the heading "--Incurrence of
Indebtedness and Issuance of Preferred Stock");
. Article V, Section 4(d) (under the heading "--Dividend and
Other Payment Restrictions Affecting Restricted
Subsidiaries");
. Article V, Section 4(f) (under the heading "--Transactions
with Affiliates");
. Article V, Section 4(g) (under the heading "--Designation of
Restricted and Unrestricted Subsidiaries"); and
. Article V, Section 6(b) (under the heading "Repurchase at the
Option of Holders--Asset Sales");
73
(collectively, the "Suspended Triggering Events"); provided, however, that the
Triggering Events described under the following provisions of this Supplemental
Indenture shall not be so suspended:
. Article V, Section 4(c) (under the heading "--Liens");
. Article V, Section 4(e) (under the heading "--Merger,
Consolidation or Sale of Assets," except as set forth
therein);
. Article V, Section 4(j) (under the heading "--Business
Activities");
. Article V, Section 4(h) (under the heading "--Future
Subsidiary Guarantees,");
. Article V, Section 4(i) (under the heading "--Sale and
Leaseback Transactions," except as set forth therein); and
. Article V, Section 4(k) (under the heading "--Reports").
(b) If the Company and its Restricted Subsidiaries are not subject to
the Suspended Triggering Events for any period of time as a result of Article V,
Section 5(a) and, subsequently, either of the Rating Agencies withdraws its
ratings or downgrades the ratings assigned to the Mortgage Bonds below the
Investment Grade Ratings so that the Mortgage Bonds do not have an Investment
Grade Rating from both Rating Agencies, or a Default or Event of Default occurs
and is continuing, the Company and its Restricted Subsidiaries shall thereafter
again be subject to the Suspended Triggering Events, subject to the terms,
conditions and obligations set forth in this Supplemental Indenture (each such
date of reinstatement being the "Reinstatement Date"), including Article V,
Section 5(a); provided, however, that no immediate Triggering Event shall occur
as a result of such reinstatement of the Suspended Triggering Events. Compliance
with the Suspended Triggering Events with respect to Restricted Payments made
after the Reinstatement Date shall be calculated in accordance with the terms of
Article V, Section 4(a) ("Triggering Events--Restricted Payments") only for the
period the Triggering Event provision had been in effect, with any Restricted
Payment made during any other period being disregarded for purposes of
calculating the "basket" amount in Article V, Section 4(a)(i)(3) and any credit
to such basket during such period likewise being disregarded.
SECTION 6. Repurchase at the Option of Holders.
(a) Offer to Purchase Upon Change of Control.
74
(i) If a Change of Control occurs, each Holder of Mortgage
Bonds shall have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral
multiple of $1,000) of that Holder's Mortgage Bonds
pursuant to the offer described below (the "Change of
Control Offer") on the terms set forth in this Supplemental
Indenture. In the Change of Control Offer, the Company
shall offer an amount in cash (the "Change of Control
Payment") equal to 101% of the aggregate principal amount
of Mortgage Bonds repurchased plus accrued and unpaid
interest, if any, on the Mortgage Bonds repurchased, to
Change of Control Payment Date (as defined below).
(ii) Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder of Mortgage Bonds
stating:
(A) the description of the transaction or transactions
that constitute the Change of Control, that the
Change of Control Offer is being made pursuant to
this Article V, Section 6(a), and that all Mortgage
Bonds validly tendered and not withdrawn shall be
accepted for payment;
(B) the purchase price and the purchase date, which
shall be no earlier than 30 days and no later than
60 days from the date such notice is mailed (the
"Change of Control Payment Date");
(C) that any Mortgage Bonds not tendered or accepted for
payment shall continue to accrue interest;
(D) that, unless the Company defaults in the payment of
the Change of Control Payment, all Mortgage Bonds
accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after
the Change of Control Payment Date;
(E) that Holders of Mortgage Bonds electing to have any
Mortgage Bonds purchased pursuant to a Change of
Control Offer shall be required to surrender the
Mortgage Bonds properly endorsed, with the form
entitled "Option of Holder to Elect Purchase"
(substantially in the form of Exhibit E) properly
completed, together with other customary documents
as the Company may reasonably request, to the Paying
Agent at the address specified in the notice prior
to the close of
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business on the third Business Day preceding the
Change of Control Payment Date;
(F) that Holders of Mortgage Bonds shall be entitled to
withdraw their election if the Paying Agent
receives, not later than the close of business on
the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the
Holder, the principal amount of Mortgage Bonds
delivered for purchase, and a statement that such
Holder of Mortgage Bonds is withdrawing its election
to have the Mortgage Bonds purchased; and
(G) that Holders of Mortgage Bonds whose Mortgage Bonds
are being purchased only in part shall be issued new
Mortgage Bonds equal in principal amount to the
unpurchased portion of the Mortgage Bonds
surrendered, which unpurchased portion must be equal
to $1,000 in principal amount or an integral
multiple thereof.
(iii) If any of the Mortgage Bonds subject to a Change of Control
Offer are in the form of a Global Bond, then the Company
shall modify such notice to the extent necessary to accord
with the applicable procedures of the Depositary applicable
to offers to purchase.
(iv) On the Change of Control Payment Date, the Company shall,
to the extent lawful:
(A) accept for payment all Mortgage Bonds or portions
thereof properly tendered pursuant to the Change of
Control Offer;
(B) deposit with the Paying Agent in immediately
available funds an amount equal to the Change of
Control Payment in respect of all Mortgage Bonds or
portions thereof so tendered; and
(C) deliver or cause to be delivered to the Trustee the
Mortgage Bonds so accepted together with an
Officer's Certificate stating the aggregate
principal amount of Mortgage Bonds or portions
thereof being purchased by the Company.
The Paying Agent shall promptly mail to each Holder of Mortgage
Bonds so tendered the Change of Control Payment for such Mortgage
Bonds, and the Trustee shall promptly authenticate and make
available for delivery to each Holder
76
of Mortgage Bonds a new Mortgage Bond equal in principal
amount to any unpurchased portion of the Mortgage Bonds
surrendered, if any; provided that each such new Mortgage
Bonds shall be in a principal amount of $1,000 or an
integral multiple thereof. Any Mortgage Bonds not so
accepted shall be promptly mailed or delivered by the
Company to the Holder thereof. The Company shall publicly
announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Payment
Date.
(v) The Change of Control provisions described above
that require the Company to make a Change of Control
Offer following a Change of Control shall be
applicable whether or not any other provisions of
this Supplemental Indenture are applicable.
(vi) The Company shall not be required to make a Change
of Control Offer upon a Change of Control if a third
party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance
with the requirements set forth herein applicable to
a Change of Control Offer made by the Company and
purchases all Mortgage Bonds properly tendered and
not withdrawn under such Change of Control Offer.
(b) Asset Sales.
(i) A Triggering Event will occur, subject to notice and
lapse of time as specified in Article V, Section
3(a)(iv), if the Company or any of its Restricted
Subsidiaries consummates an Asset Sale unless:
(A) The Company (or the Restricted Subsidiary, as
the case may be) receives consideration at
the time of the Asset Sale at least equal to
the fair market value of the assets or Equity
Interests issued or sold or otherwise
disposed of;
(B) the fair market value is determined by the
Company's Board of Directors and evidenced by
a resolution of the Board of Directors set
forth in an Officer's Certificate delivered
to the Trustee; and
(C) at least 75% of the consideration received in
the Asset Sale by the Company or such
Restricted Subsidiary is in the form of cash
or Cash Equivalents. For purposes of this
provision, each of the following shall be
deemed to be cash:
77
(1) any liabilities, as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet, of the
Company or any Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms
subordinated to the Mortgage Bonds in right of payment)
that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases
the Company or such Restricted Subsidiary from further
liability; and
(2) any securities, notes or other obligations received by
the Company or any such Restricted Subsidiary from such
transferee that are converted by the Company or such
Restricted Subsidiary into cash within 60 days of the Asset
Sale, to the extent of the cash received in that
conversion.
(ii) Within 365 days after the receipt of any Net Proceeds from an
Asset Sale, the Company or such Restricted Subsidiary may apply
those Net Proceeds at its option:
(A) to repay senior secured Indebtedness of the Company,
Transitional Funding Notes or to permanently repay
Indebtedness under any of the Credit Facilities;
(B) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted
Business;
(C) to make a capital expenditure; or
(D) to acquire other long-term assets that are used or useful
in a Permitted Business.
(iii) Pending the final application of any Net Proceeds, the Company
or such Restricted Subsidiary may temporarily reduce revolving
credit borrowings or otherwise invest the Net Proceeds in any
manner that is not prohibited by this Supplemental Indenture.
(iv) Any Net Proceeds from Asset Sales that are not applied or
invested as provided in Article V Section 6(b)(ii) ("Offer to
Purchase by Application of Excess Proceeds") above shall
constitute "Excess Proceeds." When the aggregate amount of
Excess Proceeds exceeds $25.0 million, the Company shall make
an Asset Sale Offer pursuant to the provisions of Article V,
Section
78
7 ("Offer to Purchase by Application of Excess Proceeds").
(v) To the extent that any Asset Sale constitutes the sale,
conveyance or other disposition of all or substantially all of
the assets of the Company and its Restricted Subsidiaries
taken as a whole, such transaction shall be governed by the
provisions of Article V, Sections 6(a) and 4(e) ("Repurchase
at the Option of Holders--Offer to Purchase Upon a Change of
Control" and "Triggering Events--Merger, Consolidation or Sale
of Assets") and not by the provisions of Article V, Section
6(b)(ii) or Article V, Section 7 ("Offer to Purchase by
Application of Excess Proceeds").
SECTION 7. Offer to Purchase by Application of Excess Proceeds.
(a) In the event that, pursuant to Article V, Section 6(b)(iv)
("Repurchase at the Option of Holders--Asset Sales"), the Company shall be
required to commence an Asset Sale Offer, it shall make an offer (an "Asset Sale
Offer") to all Holders of Mortgage Bonds, and all holders of other Indebtedness
that ranks equally in right of payment with the Mortgage Bonds containing
provisions similar to those set forth in this Supplemental Indenture with
respect to offers to purchase or redeem with the proceeds of sales of assets to
purchase the maximum principal amount of the Mortgage Bonds and such other
Indebtedness that may be purchased out of the Excess Proceeds. The offer price
in any Asset Sale Offer shall be equal to 100% of principal amount plus accrued
and unpaid interest, if any, to the date of purchase, and shall be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use those Excess Proceeds for any purpose not otherwise
prohibited by this Supplemental Indenture. If the aggregate principal amount of
Mortgage Bonds tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds allocated to repurchases of the Mortgage Bonds, the Trustee shall
select the Mortgage Bonds to be purchased on a pro rata basis. Upon completion
of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Failure to comply with the provisions respecting an Asset Sale Offer shall
constitute a Triggering Event, subject to notice and lapse of time as specified
in Article V, Section 3(a)(iv).
(b) Any Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law or the rules and regulations of DTC
(the "Offer Period"). No later than five Business Days after the termination of
the Offer Period (the "Purchase Date"), the Company shall purchase the principal
amount of Mortgage Bonds required to be purchased pursuant to paragraph (a)
above (the "Offer Amount") or, if less than the Offer Amount has been tendered,
79
all Mortgage Bonds validly tendered in response to the Asset Sale Offer.
(c) Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to each of the Holders of Mortgage Bonds, with a
copy to the Trustee, stating:
(i) that the Asset Sale Offer is being made pursuant to this
Article V, Section 7 and Article V, Section 6(b) ("Repurchase
at the Option of Holders--Asset Sales") and the length of
time the Asset Sale Offer shall remain open;
(ii) the purchase price and the Purchase Date;
(iii) that any Mortgage Bonds not tendered or accepted for payment
shall continue to accrue interest;
(iv) that, unless the Company defaults in making such payment, any
Mortgage Bonds accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest after the Purchase
Date;
(v) that Holders of Mortgage Bonds electing to have a Mortgage
Bonds purchased pursuant to any Asset Sale Offer shall be
required to surrender the Mortgage Bonds, with the form
entitled "Option of Holder to Elect Purchase" (in
substantially the form of Exhibit E) properly completed,
together with other customary documents as the Company may
reasonably request, to the Paying Agent at the address
specified in the notice prior to the close of business on the
third Business Day preceding the Purchase Date;
(vi) that Holders of Mortgage Bonds shall be entitled to withdraw
their election if the Paying Agent receives, not later than
the close of business on the second Business Day preceding
the Purchase Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal
amount of Mortgage Bonds delivered for purchase, and a
statement that such Holder of Mortgage Bonds is withdrawing
its election to have the Mortgage Bonds purchased;
(vii) that, if the aggregate principal amount of Mortgage Bonds
surrendered by Holders of Mortgage Bonds exceeds the Offer
Amount, the Trustee shall select the Mortgage Bonds to be
purchased on a pro rata basis (with such adjustments as may
be deemed appropriate by the Trustee so that only Mortgage
Bonds in
80
denominations of $1,000, or integral multiples thereof, shall
be purchased); and
(viii) that Holders of Mortgage Bonds whose Mortgage Bonds are being
purchased only in part shall be issued new Mortgage Bonds
equal in principal amount to the unpurchased portion of the
Mortgage Bonds surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple
thereof.
(d) If any of the Mortgage Bonds subject to an Asset Sale Offer is in
the form of a Global Note, then the Company shall modify such notice to the
extent necessary to accord with the Applicable Procedures of the Depository
applicable to offers to purchase.
(e) On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Mortgage Bonds or portions thereof tendered pursuant to the
Asset Sale Offer, or if less than the Offer Amount has been tendered, all
Mortgage Bonds tendered, and shall deliver to the Trustee an Officer's
Certificate stating that such Mortgage Bonds or portions thereof were accepted
for payment by the Company in accordance with the terms of this Article V,
Section 7. The Paying Agent shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder of
Mortgage Bonds an amount equal to the purchase price of the Mortgage Bonds
tendered by such Holder of Mortgage Bonds and accepted by the Company for
purchase, and the Company shall promptly issue a new Mortgage Bonds, and the
Trustee, upon written request from the Company, shall authenticate and make
available for delivery such new Mortgage Bonds to such Holder of Mortgage Bonds,
in a principal amount equal to any unpurchased portion of the Mortgage Bonds
surrendered; provided that each such new Mortgage Bonds shall be in a principal
amount of $1,000 or an integral multiple thereof. Any Mortgage Bonds not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Asset Sale Offer
on the Purchase Date.
(f) The provisions of this Article V, Section 7 ("Offer to Purchase by
Application of Excess Proceeds") are subject to the provisions of Article V,
Section 5 ("Suspension of Certain Triggering Events").
SECTION 8. Offers to Purchase - General.
(a) If the Change of Control Payment Date or Purchase Date is on or
after a Regular Record Date and on or before the related Interest Payment Date,
any accrued and unpaid interest, if any, shall be paid to the Person in whose
name a Mortgage Bond is registered at the close of business on such Regular
Record Date, and no additional interest shall be payable to Holders of Mortgage
Bonds who tender
81
Mortgage Bonds pursuant to the Change of Control Offer or the Asset Sale Offer.
(b) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with a Change of
Control Offer or an Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control Offer or
Asset Sale Offer provisions of this Supplemental Indenture, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under the Change of Control Offer or
Asset Sale Offer provisions of this Supplemental Indenture by virtue of such
conflict.
ARTICLE VI.
AMENDMENT OF INDENTURE
The definition of "Tranche" in Article One, Section 1.01 of the Indenture
is hereby amended by inserting "and/" immediately prior to the word "or" in the
second line.
ARTICLE VII.
THE TRUSTEE.
The Trustee hereby accepts the trusts hereby declared and provided, and
agrees to perform the same upon the terms and conditions in the Indenture set
forth and upon the following terms and conditions:
The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Supplemental Indenture or the due
execution hereof by the Company or for or in respect of the recitals contained
herein, all of which recitals are made by the Company solely. In general, each
and every term and condition contained in Article Eleven of the Indenture shall
apply to this Supplemental Indenture with the same force and effect as if the
same were herein set forth in full, with such omissions, variations and
modifications thereof as may be appropriate to make the same conform to this
Supplemental Indenture.
ARTICLE VIII.
MISCELLANEOUS PROVISIONS.
This Supplemental Indenture may be simultaneously executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original; but such counterparts shall together constitute but one and the same
instrument.
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IN WITNESS WHEREOF, Illinois Power Company has caused this Supplemental
Indenture to be executed on its behalf by an Authorized Executive Officer as
defined in the Indenture, and its corporate seal to be hereto affixed and said
seal and this Supplemental Indenture to be attested by an Authorized Executive
Officer as defined in the Indenture and BNY Midwest Trust Company, in evidence
of its acceptance of the trust hereby created, has caused this Supplemental
Indenture to be executed on its behalf by one of its Vice Presidents and its
corporate seal to be hereto affixed and said seal and this Supplemental
Indenture to be attested by one of its Assistant Secretaries, all as of the date
first written above.
ILLINOIS POWER COMPANY
(CORPORATE SEAL)
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Controller
ATTEST:
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President, General Counsel
and Corporate Secretary
BNY MIDWEST TRUST COMPANY,
Trustee,
By: /s/ X. Xxxxxxxxx
-------------------------------------------
(CORPORATE SEAL) Name: X. Xxxxxxxxx
Title: Vice President
ATTEST:
By: /s/ X.X. Xxxxxxx
----------------------
Name: X.X. Xxxxxxx
Title: Assistant Secretary
STATE OF ILLINOIS )
SS.
COUNTY OF MACON )
BE IT REMEMBERED, that on this 17th day of December, 2002, before me, the
undersigned, a Notary Public within and for the County and State aforesaid,
personally came Xxxxx X. Xxxxxx, Vice President and Controller and Xxxxxxx X.
Xxxxxx, Senior Vice President, General Counsel and Corporate Secretary, of
Illinois Power Company, a corporation duly organized, incorporated and existing
under the laws of the State of Illinois, who are personally known to me to be
such officers, and who are personally known to me to be the same persons who
executed as such officers the within instrument of writing, and such persons
duly acknowledged that they signed, sealed and delivered the said instrument as
their free and voluntary act as such officers and as the free and voluntary act
of said Illinois Power Company for the uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal on the day and year last above written.
/s/ Xxxxxxxx X. Xxxx
--------------------------------------
Notary Public, Macon County, Illinois
My Commission Expires on 3/5/2005 .
--------------
(NOTARIAL SEAL)
STATE OF ILLINOIS )
SS.
COUNTY OF XXXX )
BE IT REMEMBERED, that on this 17th day of December, 2002, before me, the
undersigned, a Notary Public within and for the County and State aforesaid,
personally came X. Xxxxxxxxx, Vice President, and X. X. Xxxxxxx, Assistant
Secretary of BNY Midwest Trust Company, an Illinois trust company, who are
personally known to me to be the same persons who executed as such officers the
within instrument of writing, and such persons duly acknowledged that they
signed, sealed and delivered the said instrument as their free and voluntary act
as such Vice President and Assistant Secretary, and as the free and voluntary
act of said BNY Midwest Trust Company for the uses and purposes therein set
forth.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal on the day and year last above written.
/s/ X. Xxxxxxxxx
------------------------------------
Notary Public, Xxxx County, Illinois
My Commission Expires on 7/8/06
------
(NOTARIAL SEAL)
Return To: This Instrument Was Prepared By:
ILLINOIS POWER COMPANY XXXXXX XXXXXX & XXXXX
Real Estate Dept. F-14500 0000 Xxxxx Xxxxx
X. 00xx Xxxxxx Xxxxxxx, XX 00000
Xxxxxxx, XX 00000
Exhibit A
SCHEDULE OF EXCHANGES OF BONDS*
The following exchanges of a part of this book-entry bond for other Bonds have
been made:
Principal Amount
Amount of Amount of of this Book-Entry Signature of
decrease in increase in Bond following authorized signatory
Principal Amount Principal Amount such decrease of Trustee or
Date of Exchange of this Book-Entry Bond of this Book-Entry Bond (or increase) Securities Custodian
---------------- ----------------------- ----------------------- ------------- --------------------
------------------------------------
* To be included in a book-entry bond.
A-1
Exhibit B
FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF BONDS
Re: Mortgage Bonds, 11.50% Series due 2010 of Illinois Power Company.
This Certificate relates to $_____ principal amount of Bonds held in
*______ book-entry or *______ definitive form by _____________________ (the
"Transferor").
The Transferor has requested the Trustee by written order to exchange
or register the transfer of a Bond or Bonds.
In connection with such request and in respect of each such
Bond, the Transferor does hereby certify that the Transferor is familiar with
the Indenture relating to the above-captioned Bonds and that the transfer of
this Bond does not require registration under the Securities Act (as defined
below) because:*
9 Such Bond is being acquired for the Transferor's own account without
transfer.
9 Such Bond is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act")), in accordance with Rule 144A under the Securities Act.
9 Such Bond is being transferred (i) pursuant to an exemption from
registration in accordance with Rule 144 under the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so requests) or (ii)
pursuant to an effective registration statement under the Securities Act.
9 Such Bond is being transferred to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act pursuant to a private placement exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel if the Company or the Trustee so requests), together with a
certification in substantially the form of Exhibit C to the Indenture, and, to
the knowledge of the Transferor, such institutional accredited investor to whom
such Bond is to be transferred is not an "affiliate" (as defined in Rule 144
under the Securities Act) of the Company.
9 Such Bond is being transferred in reliance on and in compliance with
another exemption from the registration requirements
---------------------------
* Fill in blank or check appropriate box, as applicable.
B-1
of the Securities Act (and based upon an opinion of counsel if the Company or
the Trustee so requests).
[INSERT NAME OF TRANSFEROR]
By:__________________________________
Name:
Title:
Address:
Date: _________________________
B-2
Exhibit C
FORM OF TRANSFEREE LETTER OF REPRESENTATION
TO BE DELIVERED BY INSTITUTIONAL ACCREDITED INVESTORS
Illinois Power Company
c/o President
000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Ladies and Gentlemen:
In connection with our proposed purchase of $[ ] aggregate
principal amount of Mortgage Bonds, 11.50% Series due 2010 (the "Bonds") of
Illinois Power Company (the "Company"):
1. We understand that the Bonds have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or under any other
applicable securities laws, and may not be sold except as permitted in the
following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing the Bonds to offer, sell or otherwise
transfer such Bonds prior to the date which is two years (or such shorter period
of time as permitted by Rule 144(k) under the Securities Act) after the later of
the date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Bonds, or any predecessor thereto
(the "Resale Restriction Termination Date") only (a) to the Company, (b)
pursuant to a registration statement that has been declared effective by the
Securities and Exchange Commission (the "SEC"), (c) for so long as the Bonds are
eligible for resale pursuant to Rule 144A under the Securities Act, to a person
we reasonably believe is a qualified institutional buyer under Rule 144A (a
"QIB") that purchases for its own account or for the account of a QIB to whom
notice is given that the transfer is being made in reliance on Rule 144A, (d) to
an institutional "accredited investor" within the meaning of subparagraph
(a)(1), (2), (3) or (7) of Rule 501 under the Securities Act (an "Institutional
Accredited Investor") that is acquiring the Bonds for its own account or for the
account of another Institutional Accredited Investor for investment purposes and
not with a view to, or for offer or sale in connection with, any distribution
thereof in violation of the regulations of the Securities Act and any other
applicable securities laws, or (e) pursuant to any other available exemption
from the registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
and the property of such investor account or accounts be at all times within our
or their control. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Bonds is proposed to be made pursuant to clause (d) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee
C-1
substantially in the form of this letter to the Trustee, which shall provide,
among other things, that the transferee is an Institutional Accredited Investor
and that it is acquiring such Bonds for investment purposes and not for
distribution in violation of the Securities Act. We acknowledge that the Company
and the Trustee reserve the right prior to any offer, sale or other transfer
pursuant to clause (d) or (e) prior to the Resale Restriction Termination Date
of the Bonds to require the delivery of an opinion of counsel, certifications
and/or other information satisfactory to the Company and the Trustee.
2. We are an Institutional Accredited Investor purchasing for our
own account or for the account of another Institutional Accredited Investor.
3. We are acquiring the Bonds purchased by us for our own account,
or for one or more accounts as to each of which we exercise sole investment
discretion, for investment purposes and not with a view to, or for offer or sale
in connection with any distribution in violation of, the Securities Act. We have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of investment in the Bonds, we invest in
securities similar to the Bonds in the normal course of our business and we, and
all accounts for which we are acting, are able to bear the economic risk of
investment in the Bonds.
4. You are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
Name of Transferee:_____________
________________________________
By:_____________________________
Date:___________________________
Upon transfer the Bonds would be registered in the name of the new
beneficial owner as follows:
Name: ___________________________
Address: ___________________________
___________________________
Taxpayer ID No: ___________________________
C-2
Exhibit D
ASSIGNMENT FORM
To assign this Bond, fill in the form below: (I) or (we) assign and
transfer this Bond to___________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax I.D. number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
as agent to transfer this Bond on the books of the Company. The agent may
substitute another to act for him.
________________________________________________________________________________
Date:____________________ Your Signature:______________________________
(Sign exactly as your name
appears on the face of this
Bond)
Signature Guarantee:____________________________________________________________
(Participant in a Recognized Signature
Guaranty Medallion Program)
D-1
Exhibit E
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Mortgage Bond purchased by the
Company pursuant to Article V Section 6(a) (Offer to Purchase Upon Change of
Control) or Article V, Section 7 (Offer to Purchase by Application of Excess
Proceeds) of the Supplemental Indenture, check the box below:
[_] Article V, Section 6(a) (Offer [_] Article V, Section 7 (Offer to
to Purchase Upon Change of Control) Purchase by Application of
Excess Proceeds)
If you want to elect to have only part of the Mortgage Bond purchased
by the Company pursuant to Section 6(a) (Offer to Purchase Upon Change of
Control) or Article V, Section 7 (Offer to Purchase by Application of Excess
Proceeds) of the Supplemental Indenture, state the amount you elect to have
purchased:
$_________________________
Date: __________________________
Your Signature:_________________________________________________________________
(Sign exactly as your name appears on the face of the Mortgage
Bond)
Tax Identification No.:_________________________________________________________
SIGNATURE GUARANTEE:____________________________________________________________
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Bond Registrar, which requirements
include membership or participation
in the Security Transfer Agent
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the Bond
Registrar in addition to, or in
substitution for, STAMP, all in
accordance with the Securities
Exchange Act of 1934, as amended.
E-1
