Exhibit 10.10
CONFORMED COPY
$1,450,000,000
DYNEGY HOLDINGS INC.
Second Priority Senior Secured Floating Rate Notes due 2008
9.875% Second Priority Senior Secured Notes due 2010
10.125% Second Priority Senior Secured Notes due 2013
PURCHASE AGREEMENT
------------------
August 1, 2003
Credit Suisse First Boston Llc
Banc of America Securities Llc
Citigroup Global Markets Inc.
X.x. Xxxxxx Securities Inc.
Xxxxxx Brothers Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Abn Amro Incorporated
Banc One Capital Markets Inc.
Credit Lyonnais Securities Inc.
Deutsche Bank Securities Inc.
Xx Xxxxx Securities Corporation,
Td Securities (Usa), Inc.
c/o Credit Suisse First Boston LLC
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, X.X. 10010-3629
Ladies and Gentlemen:
1. Introductory. Dynegy Holdings Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several initial purchasers named in Schedule A hereto (the
"Purchasers") an aggregate of U.S. $225,000,000 principal amount of its Second
Priority Senior Secured Floating Rate Notes due 2008 (the "2008 Notes"), U.S.
$525,000,000 principal amount of its 9.875% Second Priority Senior Secured Notes
due 2010 (the "2010 Notes") and an aggregate of U.S. $700,000,000 principal
amount of its 10.125% Second Priority Senior Secured Notes due 2013 (the "2013
Notes" and, together with the 2008 Notes and the 2010 Notes, the "Notes") to be
issued under an indenture to be dated as of August 11, 2003 (the "Indenture"),
among the Issuers (as defined below) and Wilmington Trust Company, as trustee
(the "Trustee"), on a private placement basis pursuant to an exemption under
Section 4(2) of the United States Securities Act of 1933, as amended (the
"Securities Act"). The Notes will be unconditionally guaranteed as to the
payment of principal, premium, if any, and interest (the "Guarantees" and,
together with the Notes, the "Offered Securities") by the Subsidiary Guarantors
and the Affiliate Guarantors listed on the signature pages to this Agreement
(each a "Guarantor" and, collectively, the "Guarantors" and, together with the
Company, the "Issuers"). Terms used but not otherwise defined herein have
meanings given to them in the Offering Document (as defined below).
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The Issuers have agreed to secure, equally and ratably, the Offered
Securities by granting to Xxxxx Fargo Bank Minnesota, N.A., as collateral
trustee (the "Collateral Trustee"), for the benefit of the holders of the
Offered Securities (collectively, the "Secured Parties"), a second priority lien
(subject to Priority Liens, as each term is defined in the Description of the
Notes section of the Offering Document (as defined below)) on the equity
securities of certain subsidiaries of Dynegy Inc., which includes the Company
and certain of its subsidiaries, in each case as described in the Offering
Document under the caption "Description of the Collateral" (the "Pledged
Equity"), and certain of its other assets as described in the Offering Document
under the caption "Description of the Collateral" (together with the Pledged
Equity, the "Collateral"), as evidenced by the shared security agreement to be
dated August 11, 2003 among the Issuers and the Collateral Trustee (the "Shared
Security Agreement") and the non-shared security agreement to be dated August
11, 2003 among the Issuers and the Collateral Trustee (the "Non-Shared Security
Agreement"), the mortgages or deeds of trust as described in the Offering
Document under the caption "Description of the Collateral" (the "Mortgages") and
the Intercreditor Agreement to be dated August 11, 2003 among the Issuers, the
Collateral Trustee, the Priority Lien Debt Agent and the collateral trustee for
the Priority Lien Debt (the "Intercreditor Agreement" and, together with the
Shared Security Agreement, the Non-Shared Security Agreement and the Mortgages,
the "Security Documents").
As used herein, the term "Operative Documents" refers to this Agreement,
the Indenture, the Offered Securities and the Security Documents.
2. Representations and Warranties of the Issuers. Each of the Issuers,
jointly and severally, represents and warrants to, and agrees with, the several
Purchasers that:
(a) A preliminary offering circular dated July 25, 2003 (the
"Preliminary Offering Circular") has been prepared by the Issuers and an
offering circular dated the date hereof (the "Offering Circular") relating
to the Offered Securities has been prepared by the Issuers. Such
Preliminary Offering Circular and Offering Circular, as supplemented as of
the date of this Agreement, and any other document approved by the Company
for use in connection with the contemplated resale of the Offered
Securities, are hereinafter collectively referred to as the "Offering
Document," which term shall include the portions of the documents
specifically incorporated by reference therein (the "Incorporated
Information"). The Preliminary Offering Circular did not, as of the date
thereof, and the Offering Circular (in the form used by the Purchasers to
confirm sales) as of its date does not, include any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. The preceding sentence does not apply to
statements in or omissions from the Preliminary Offering Circular or the
Offering Circular based upon written information furnished to the Company
by any Purchaser through Credit Suisse First Boston LLC ("CSFB")
specifically for use therein, it being understood and agreed that the only
such information is that described as such in Section 7(b) hereof.
(b) No order or decree preventing the use of the Offering Document,
or any order asserting that the transactions contemplated by this Agreement
are subject to the registration requirements of the Securities Act, has
been issued and no proceeding for that purpose has commenced or is pending
or, to the knowledge of the Company or any of the Guarantors, is
contemplated.
(c) Each Issuer has been duly incorporated or formed and is an
existing corporation, limited liability company, limited partnership or
general partnership in good standing under the laws of its state of
organization, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Offering Document;
and each Issuer is duly qualified to do business as a foreign corporation
in good standing in all other jurisdictions in which its ownership or lease
of property or the conduct of its business requires such qualification,
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except to the extent the failure to so qualify or be in good standing could
not reasonably be expected to have a material adverse effect on the
condition (financial or other), business, properties, results of operations
or, to the knowledge of the Issuers, prospects of Dynegy Inc. and its
subsidiaries, taken as a whole (a "Material Adverse Effect"). Each Issuer
has all requisite corporate power and authority to enter into the Operative
Documents and each Issuer has full power and authority to authorize, issue
and sell the Offered Securities as contemplated by this Agreement.
(d) Illinois Power Company has been duly incorporated and is an
existing corporation in good standing under the laws of Illinois, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Offering Document; and is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of
its business requires such qualification, except to the extent the failure
to so qualify or be in good standing could not reasonably be expected to
have a Material Adverse Effect.
(e) None of the Issuers nor any of their respective subsidiaries is
(i) in default in the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage, lease or
other agreement or instrument that is material to the Issuers and their
respective subsidiaries, taken as a whole, to which the Issuers or their
respective subsidiaries is a party or by which the Issuers or any of their
subsidiaries or their respective property is bound, except for alleged
defaults with respect to certain agreements as disclosed in the Offering
Circular under the caption "Business--Legal Proceedings", or (ii) in
violation of its respective charter or by-laws, operating agreement or
other organizational document that governs the existence or administration
of such entity, in each case, except as could not reasonably be expected to
have a Material Adverse Effect.
(f) (i) As of March 31, 2003, each of the Company and Dynegy Inc. has
an authorized capitalization as set forth in the Offering Document, under
the heading "Capitalization of Dynegy Holdings Inc. - Actual," and
"Capitalization of Dynegy Inc. - Actual" respectively, (ii) all of the
issued shares of capital stock of each of the Issuers have been duly and
validly authorized and issued and are fully paid and non-assessable, (iii)
all of the issued shares of capital stock of each subsidiary of Dynegy Inc.
other than the Issuers have been duly and validly authorized and issued and
are fully paid and non-assessable, and (iv) the capital stock of each
subsidiary owned by the Company or a Guarantor, as the case may be,
directly or through subsidiaries, is owned free from liens, encumbrances
and material defects other than liens on Pledged Equity that secure the
Offered Securities and the Priority Lien Debt.
(g) The Notes have been duly and validly authorized by the Company
and, when duly executed by the Company in accordance with the terms of the
Indenture, assuming due authentication of the Notes by the Trustee, upon
delivery to the Purchasers against payment therefor in accordance with the
terms hereof, will be validly issued and delivered, and will constitute
valid and binding obligations of the Company entitled to the benefits of
the Indenture, enforceable against the Company in accordance with their
terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium, or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the
court before which any proceeding therefore may be brought (regardless of
whether such enforcement is considered in a proceeding in equity or at
law). On the Closing Date (as defined below), the Notes will conform to the
descriptions thereof contained in the Offering Circular.
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(h) The Guarantees to be issued by each of the Guarantors have been,
or as of the Closing Date will have been, duly and validly authorized by
each Guarantor and, when duly executed and delivered by each Guarantor in
accordance with the terms of the Indenture and upon the due execution,
authentication and delivery of the Notes in accordance with the Indenture
and the attachment of the Guarantee thereto and the issuance of the Offered
Securities in the sale to the Purchasers contemplated by this Agreement,
will constitute valid and binding obligations of each of the Guarantors,
enforceable against each of the Guarantors in accordance with their terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium, or other similar laws
now or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefore may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law). On the
Closing Date, the Guarantees will conform to the description thereof in the
Offering Circular.
(i) The Indenture has been, or as of the Closing Date will have been,
duly and validly authorized by each of the Issuers, and upon its execution
and delivery and, assuming due authorization, execution and delivery by the
Trustee, will constitute the valid and binding agreement of the Issuers,
enforceable against the Issuers in accordance with its terms, except as
such enforceability may be limited by (i) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium, or other similar laws
now or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefore may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law); and
assuming the accuracy of the Purchasers' representations and warranties and
the Purchasers' compliance with the agreements in Section 4 hereof and
compliance with the limitations and restrictions contained under the
heading "Transfer Restrictions" in the Offering Circular, no qualification
of the Indenture under the Trust Indenture Act of 1939, as amended (the
"TIA") is required in connection with the offer and sale of the Offered
Securities contemplated hereby; and the Indenture conforms in all material
respects to the requirements of the TIA, and the rules and regulations of
the Commission applicable to an indenture which is qualified thereunder. On
the Closing Date, the Indenture will conform to the description thereof in
the Offering Circular.
(j) This Agreement has been, or as of the Closing Date will have
been, duly authorized, executed and delivered by each of the Issuers.
(k) Each of the Security Documents has been, or as of the Closing
Date will have been, duly authorized by each of the Issuers that is a party
to each such Security Document and, when validly executed and delivered by
such Issuers, will constitute a valid and legally binding obligation of the
Company and each Guarantor party thereto and will be enforceable against
the Company and each Guarantor party thereto in accordance with its terms,
subject to (i) bankruptcy, insolvency, fraudulent transfer conveyance,
reorganization, moratorium and similar laws of general applicability
relating to creditors' rights and to general equity principles, or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the
court before which any proceeding therefore may be brought (regardless of
whether such enforcement is considered in a proceeding in equity or at
law).
(l) When executed and delivered to the Collateral Trustee at the
Closing Date (or such later date pursuant to the last sentence of this
clause), the Security Documents will grant and create, in favor of the
Collateral Trustee for the benefit of the Secured Parties as security for
all of the Secured Obligations, a valid and enforceable security interest
in the Collateral, and when the filings referred to in Section 6(c)(i) are
made, such security interests will be perfected second priority security
interests (subject to Priority Liens) to the extent that a security
interest in such
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Collateral may be perfected by such filings. When delivered at the Closing
Date, each Mortgage will be delivered, duly acknowledged and, if required
for recordation, attested and otherwise will be in recordable form, and
when such Mortgage is filed for record and recorded in the filing office
identified therein, the security interest of the Collateral Trustee in the
real property described therein will be duly perfected. Each of the Company
and Guarantors Issuers is a "registered organization" (as defined in
Article 9 of the Uniform Commercial Code) as defined in, and under the law
of, the state in which it is identified in the Indenture as being organized
and at the Closing Date (or when the necessary filings have been made as
promptly as practicable thereafter) all security interests granted under
the Security Documents in Collateral consisting of personal property or
fixtures will be duly perfected to the extent such security interests may
be perfected by filing upon the filing of the financing statements referred
to in Section 6(c) hereof. As of the Closing Date, the representations and
warranties contained in the Security Documents will be true and correct in
all material respects. Notwithstanding the foregoing, to the extent that
any regulatory notice, action or approval in the state or New York
("Regulatory Act") is required in order to validly encumber an EWG or an
interest in an EWG located in such jurisdiction that constitutes a part of
the Collateral as contemplated by the Security Documents, then creation of
the valid security interest contemplated by this clause shall not occur
with respect to any such EWG or interest therein until such Regulatory Act
has occurred, and the Issuers hereby agree to, and shall, use all
commercially reasonable efforts to pursue and obtain all necessary
Regulatory Acts in order to perfect security interests in the EWGs or
interests therein as promptly as practicable following the date of this
Agreement but which may not occur until after the Closing Date.
(m) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required to mortgage the
Projects that comprise, in part, the Collateral except as are (i) purely
ministerial or (ii) Regulatory Acts as may be required in order to validly
encumber an EWG or an interest in an EWG.
(n) Except as disclosed in the Offering Document, there are no
contracts, agreements or understandings between the Company or any of the
Guarantors and any person that would give rise to a valid claim against the
Company, any Guarantor or any Purchaser for a brokerage commission,
finder's fee or other like payment.
(o) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Operative Documents in
connection with the issuance and sale of the Offered Securities by the
Issuers, except for (i) such filings with respect to the perfection of
security interests on the Collateral and the Mortgages to be made or
otherwise delivered on or within a commercially reasonable time after the
Closing Date, (ii) such as may be required under foreign or state
securities laws, blue sky laws and related regulations, (iii) those that
have been obtained or made on or prior to the Closing Date, (iv) those that
could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect and would not materially adversely affect the
ability of the Issuers to perform their respective obligations under the
Operative Documents and (v) such Regulatory Acts as may be required in
order to validly encumber an EWG or an interest in an EWG.
(p) The execution, delivery and performance of the Operative
Documents and the issuance and sale of the Offered Securities will not
conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under (i) any statute, any rule,
regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Issuers or any of their
respective subsidiaries or any of their properties (other than Regulatory
Acts as may be required in order to validly encumber an EWG or Interest in
an EWG), (ii) any agreement or instrument to which the Issuers or any of
their respective subsidiaries
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is a party or by which the Issuers or any of their respective subsidiaries
is bound or to which any of the properties of the Issuers or any of their
respective subsidiaries is subject, or (iii) the charter or by-laws of the
Issuers or any of their respective subsidiaries, except in the case of (i)
and (ii), for such breaches, violations or defaults as could not reasonably
be expected to have a Material Adverse Effect.
(q) Except as disclosed in the Offering Document or as could not
reasonably be expected to have a Material Adverse Effect, each obligor
under the Operative Documents (the "Obligors" and each an "Obligor") has
(i) good and marketable title to (in the case of fee interests in real
property), (ii) valid leasehold interests in (in the case of leasehold
interests in real or personal property), and (iii) good title to (in the
case of all other personal property), all of its respective properties and
assets reflected in its respective financial statements. All such
properties and assets are free and clear of Liens except for Priority Liens
and Permitted Liens.
(r) Except as disclosed in the Offering Document, each of the Issuers
and their respective subsidiaries possesses adequate certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them and has not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to any of the Issuers or their respective
subsidiaries, could individually or in the aggregate reasonably be expected
to have a Material Adverse Effect.
(s) Except as disclosed in the Offering Document, each of the Issuers
and their respective subsidiaries is in compliance with all applicable
statutes, regulations and orders of, and all applicable restrictions
imposed by all governmental agencies, bodies or courts, except where the
failure to comply could not reasonably be expected to have a Material
Adverse Effect.
(t) No labor dispute with the employees of the Issuers and their
respective subsidiaries, that could reasonably be expected to result in a
Material Adverse Effect, to the knowledge of the Issuers, is imminent.
(u) The Issuers and their respective subsidiaries own or possess on
reasonable terms, adequate trademarks, trade names and other rights to
patents, copyrights and other intellectual property (collectively,
"intellectual property rights") necessary to conduct the business now
operated by them, or presently employed by them, and have not received any
notice of infringement of or conflict with asserted rights of others with
respect to any intellectual property rights that, if determined adversely
to the Issuers or any of their respective subsidiaries, could reasonably be
expected to, individually or in the aggregate, have a Material Adverse
Effect.
(v) Except as disclosed in the Offering Document, none of the Issuers
or any of their respective subsidiaries is in violation of any statute, any
rule, regulation, decision or order of any governmental agency or body or
any court, domestic or foreign having jurisdiction over the Issuers or any
of their respective subsidiaries or any of their respective properties,
relating to the use, disposal or release of hazardous or toxic substances
or relating to the protection or restoration of the environment or human
exposure to hazardous or toxic substances (collectively, "environmental
laws"), owns or operates any real property contaminated with any substance
that is subject to any environmental laws, is liable for any off-site
disposal or contamination pursuant to any environmental laws, or is subject
to any claim relating to any environmental laws, which violation,
contamination, liability or claim could reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect; and
neither the Company nor any Guarantor is aware of any pending investigation
which might lead to such a claim.
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(w) Except as disclosed in the Offering Document, there are no
pending actions, suits or proceedings against or affecting the Issuers, any
of their respective subsidiaries or their respective properties that, if
determined adversely to the Issuers, or their respective subsidiaries,
could reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect, or would materially and adversely affect the
ability of the Company or the Guarantors to perform their respective
obligations under the Operative Documents; and except as disclosed in the
Offering Document no such actions, suits or proceedings are, to the
Company's or any Guarantor's knowledge, threatened or contemplated.
(x) The financial statements included in the Offering Document
present fairly the financial position of Dynegy Inc. and its consolidated
subsidiaries as of the dates shown and their results of operations and cash
flows for the periods shown, and such financial statements have been
prepared in conformity with the generally accepted accounting principles in
the United States applied on a consistent basis.
(y) Except as disclosed in the Offering Document, since the date
as of which the information is given in the Offering Circular, there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties, results of operations or, to the knowledge of the
Issuers, prospects of the Issuers and their respective subsidiaries, taken
as a whole and, except as disclosed in or contemplated by the Offering
Circular, there has been no dividend or distribution of any kind declared,
paid or made by Dynegy Inc. on any class of its capital stock.
(z) The Company is subject to the reporting requirements of either
Section 13 or Section 15(d) of the Exchange Act and files reports with the
Commission on the Electronic Data Gathering, Analysis, and Retrieval
(XXXXX) system.
(aa) The Company is not an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the United States Investment Company
Act of 1940 (the "Investment Company Act"); and the Company is not and,
after giving effect to the offering and sale of the Offered Securities and
the application of the proceeds thereof as described in the Offering
Document, will not be an "investment company" as defined in the Investment
Company Act.
(bb) Dynegy Inc. has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-14 under the Exchange Act),
which (i) are designed to ensure that material information relating to
Dynegy Inc. and its consolidated subsidiaries is made known to the
principal executive officer and its principal financial officer by others
within those entities, particularly during the periods in which the
periodic reports required under the Exchange Act are being prepared; (ii)
have been evaluated for effectiveness as of a date within 90 days prior to
the date of Dynegy Inc.'s most recently filed quarterly report; and (iii)
are effective in all material respects to perform the functions for which
they were established.
(cc) Based on the most recent quarterly evaluation of its disclosure
controls and procedures, Dynegy Inc. is not aware of (i) any significant
deficiency in the design or operation of internal controls which could
adversely affect the ability of Dynegy Inc. to record, process, summarize
and report financial data or any material weaknesses in internal controls,
except as disclosed in the Offering Document; or (ii) any fraud, whether or
not material, that involves management or other employees who have a
significant role in internal controls.
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(dd) Since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in internal
controls or in other factors that could significantly affect internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses, except as disclosed in the Offering
Document.
(ee) PricewaterhouseCoopers LLP who have certified certain financial
statements of the Company and its subsidiaries are independent public
accountants as required by the Securities Act and the rules and regulations
of the Commission thereunder.
(ff) Except as set forth in the Offering Document, none of the Issuers
or any of their respective subsidiaries is (i) a "registered holding
company," or a "subsidiary company" or "affiliate" of a "registered holding
company" within the meaning of the Public Utility Holding Company Act of
1935 ("PUHCA"); (ii) a "public utility company" as defined under Section
2(a) of PUHCA, with the exception of Illinois Power Company; (iii) subject
to regulation under the Federal Power Act, as amended ("FPA"), other than
as a power marketer or an "exempt wholesale generator" ("EWG") with
market-based rate authority, or as a "qualifying facility" ("QF") under the
Public Utility Regulatory Policies Act of 1978, as amended (16 U.S.C.
Section 796 et seq.) ("PURPA"), as contemplated by 18 C.F.R. Section
292.601(c), with the exception of Illinois Power Company, or (iv) with
respect to each of the power generation projects in which any of the
Issuers or their respective subsidiaries has an interest that is a QF,
subject to any state law or regulation with respect to rates or the
financial or organizational regulation of electric utilities, other than as
contemplated by 18 C.F.R. Section 292.602(c).
(gg) Each of the Company's subsidiaries providing retail electric
service in the states of Illinois, Michigan, New York and Texas has a
validly issued order from the relevant state public utility or commerce
commission to sell electricity on a retail basis, and such orders are not
subject any pending challenge, investigation, or proceeding, authorizing
such subsidiary to engage in sales of electricity at retail under the laws
of that state. None of the Company's subsidiaries providing retail electric
service is subject to any rate cap or mitigation measure other than rate
caps and mititgation measures generally applicable to similarly situated
retail service providers selling in the geographic market where such
subsidiary conducts its business (and with respect to Illinois Power
Company, its geographic market shall be the State of Illinois and Illinois
Power Company does not provide retail electric service outside the State of
Illinois).
(hh) Except as disclosed in the Offering Document, each of the power
generation projects certified as a QF under PURPA in which the Company or
its subsidiaries has an interest meets the requirements for certification
as a QF as set out in PURPA and the regulations of the Federal Energy
Regulatory Commission ("FERC") promulgated thereunder, as amended from time
to time.
(ii) Each of the Guarantors and other subsidiaries of the Company that
is an Eligible Facility within the meaning of Section 32 of PUHCA has
received a determination from the FERC, not subject to any pending
challenge, that it is an Exempt Wholesale Generator as that term is defined
and used in PUHCA and in the FPA.
(jj) Each of the Issuers and their respective subsidiaries that sells
power at market-based rates outside of the Electric Reliability Councuil of
Texas, Inc. ("ERCOT") has a validly-issued order from the FERC authorizing
it to engage in wholesale sales of electricity, ancillary services in
certain markets and, to the extent permitted under its market-based rate
tariff, other products and services at market-based rates. The FERC has not
issued any orders limiting the ability of each such entity to engage in the
wholesale sales of electricity at market-based prices, and had not imposed
any rate caps or mitigation measures other than rate caps and mitigation
measures
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generally applicable to similarly situated marketers or generators selling
electricity, ancillary services or other products at wholesale in the
geographic market where each such entity conducts its business.
(kk) Each of the Company's subsidiaries participating in the ERCOT
wholesale electric market has registered with the Public Utilities
Commission of Texas ("PUCT") as a power generation company, and has
authority to sell power at wholesale at a market-based rate that is not
subject to any rate cap or mitigation measure other than those generally
applicable to similarly situated marketers or generators selling
electricity in the ERCOT wholesale electric market.
(ll) Other than the complaint proceedings challenging (i) the contract
between the California Department of Water Resources and Dynegy Power
Marketing, Inc., Cabrillo Power I LLC, El Segundo Power LLC, and Long Beach
Generation LLC and (ii) the contract between the Kroger Company and Dynegy
Power Marketing, Inc., there are no pending complaints filed with the FERC
seeking abrogation or modification of a contract for the sale of power by
the Company or any of its subsidiaries.
(mm) No securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the Offered Securities are listed
on any national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation system.
(nn) The offer and sale of the Offered Securities by the Issuers to
the several Purchasers in the manner contemplated by this Agreement
(assuming that the representations and warranties in Section 4 of this
Agreement are true and correct and the Purchasers comply with the offer and
sale procedures set forth in this Agreement) will be exempt from the
registration requirements of the Securities Act by reason of Section 4(2)
thereof, and Regulation D and Regulation S thereunder.
(oo) None of the Issuers nor any of their respective affiliates, nor
any person acting on its or their behalf (it being understood that no
representation is made with respect to any Purchaser or any Purchaser's
affiliates or any of their representatives) (i) has, within the six-month
period prior to the date hereof, offered or sold in the United States or to
any U.S. person (as such terms are defined in Regulation S under the
Securities Act) the Offered Securities or any security of the same class or
series as the Offered Securities or (ii) has offered or will offer or sell
the Offered Securities (A) in the United States by means of any form of
general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act or (B) with respect to any such securities
sold in reliance on Rule 903 of Regulation S under the Securities Act, by
means of any directed selling efforts within the meaning of Rule 902(c) of
Regulation S. The Issuers, their respective affiliates and any person
acting on its or their behalf (it being understood that no representation
is made with respect to any Purchaser or any Purchaser's affiliates or any
of their representatives) have complied and will comply with the offering
restrictions requirement of Regulation S and the sale of the Offered
Securities pursuant to Regulation S is not part of a plan or scheme to
evade the registration provisions of the Securities Act. The Company and
each of the Guarantors has not entered and will not enter into any
contractual arrangement with respect to the distribution of the Offered
Securities except for this Agreement.
(pp) Except in connection with (1) the 4.75% convertible subordinated
debentures due 2023 of Dynegy Inc. in a private placement pursuant to Rule
144A and Regulation S under the Securities Act, (2) the junior unsecured
subordinated notes due 2015 of Dynegy Inc. issued or to be issued to
Chevron USA pursuant to one or more valid exemptions from registration
under the Securities Act, (3) the convertible preferred stock due 2033 of
Dynegy Inc. issued or to be issued
9
to Chevron USA pursuant to one or more valid exemptions from registration
under the Securities Act and (4) as disclosed in the Offering Document,
there are no contracts, agreements or understandings between the Company or
any Guarantor and any person granting such person the right to require the
Company or such Guarantor to file a registration statement under the
Securities Act with respect to any securities of the Company or such
Guarantor or to require the Company or such Guarantor to include such
securities with the Offered Securities registered pursuant to any
Registration Statement.
(qq) None of the Company, any Guarantor, any of their respective
subsidiaries nor any agent thereof acting on the behalf of them has taken,
and none of them will take, any action that might cause this Agreement or
the issuance or sale of the Offered Securities to violate Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System.
(rr) The Issuers and each of their respective subsidiaries carry, or
are covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value of
their respective properties and as is customary for companies engaged in
similar businesses in similar industries.
(ss) Except for the "negative watch" outlook for Dynegy Inc. issued by
Standard & Poor's Ratings Group prior to the date of this Agreement, no
"nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act (i) has
imposed (or has informed the Company or any Guarantor that it is
considering imposing) any condition (financial or otherwise) on the
Company's or any Guarantor's retaining any rating assigned to the Company
or any Guarantor, any securities of the Company or any Guarantor or (ii)
has indicated to the Company or any Guarantor that it is considering (a)
the downgrading, suspension, or withdrawal of, or any review for a possible
change that does not indicate the direction of the possible change in, any
rating so assigned or (b) any change in the outlook for any rating of the
Company, any Guarantor or any securities of the Company or any Guarantor.
(tt) Except for such matters as could not reasonably be expected to
have a Material Adverse Effect, the Company is in compliance in all
material respects with all presently applicable provisions of ERISA; no
"reportable event" (as defined in ERISA), has occurred with respect to any
"pension plan" (as defined in ERISA), for which the Company would have any
liability; the Company has not incurred and does not expect to incur
liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan"
for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification.
(uu) Except as disclosed in the Offering Circular, Dynegy Inc. and its
subsidiaries have filed all material federal, state and local income and
franchise tax returns required to be filed through the date hereof and have
paid all taxes due thereon, and no tax deficiency except where the same may
be contested in good faith by appropriate proceedings, and no tax
deficiency has been determined adversely to the Issuers or any of their
respective subsidiaries which has had (nor does the Company or the
Guarantors have any knowledge of any tax deficiency in writing which, if
determined adversely to the Issuers or any of their respective
subsidiaries, could reasonably be expected to have) a Material Adverse
Effect.
10
(vv) Prior to the date hereof, neither the Company nor any of its
affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the Company
in connection with the offering of the Offered Securities.
(ww) The Offering Document contains all the information specified in,
and meeting the requirements of, Rule 144A(d)(4) under the Securities Act.
(xx) The statements set forth in the Offering Circular under the
caption "Description of the Notes," insofar as they purport to constitute a
summary of the terms of the Offered Securities and the Security Documents,
under the captions "Offering Circular Summary--Recent Developments,"
"Certain Relationships and Related Party Transactions," "Description of the
Collateral," "Description of the Amended Credit Facility," "Series B
Preferred Stock Restructuring," "United States Federal Income Tax
Considerations" and "Plan of Distribution," insofar as they purport to
describe the provisions of the laws and documents referred to therein, are
accurate and fair summaries in all material respects.
(yy) The market-related and customer-related data and estimates
included in the Offering Document are based on or derived from sources
which the Company believes to be reliable.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Issuers agree to sell to the
Purchasers, and the Purchasers agree, severally and not jointly, to purchase
from the Issuers (a) the respective principal amounts of Offered Securities
constituting 2008 Notes and the Guarantees thereof set forth in the first column
opposite the names of the several Purchasers in Schedule A hereto, at a purchase
price of 97.5% of the principal amount thereof plus accrued interest from August
11, 2003 to the Closing Date (as hereinafter defined), (b) the respective
principal amounts of Offered Securities constituting 2010 Notes and the
Guarantees thereof set forth in the second column opposite the names of the
several Purchasers in Schedule A hereto, at a purchase price of 96.871% of the
principal amount thereof plus accrued interest from August 11, 2003 to the
Closing Date and (c) the respective principal amounts of Offered Securities
constituting 2013 Notes and the Guarantees thereof set forth in the third column
opposite the names of the several Purchasers in Schedule A hereto, at a purchase
price of 96.717% of the principal amount thereof plus accrued interest from
August 11, 2003 to the Closing Date.
The Company will deliver against payment of the purchase price the Offered
Securities in the form of one or more permanent global Notes in definitive form
(the "Global Notes") with the Guarantees affixed thereto (together with the
Global Notes, the "Global Securities") deposited with the Trustee as custodian
for The Depository Trust Company ("DTC") and registered in the name of Cede &
Co., as nominee for DTC. Interests in any permanent Global Securities will be
held only in book-entry form through DTC, except in the limited circumstances
described in the Offering Document. Payment for the Offered Securities shall be
made by the Purchasers in Federal (same day) funds by wire transfer to an
account at a bank acceptable to CSFB, on August 11, 2003, or at such other time
not later than seven full business days thereafter as CSFB and the Company
determine, such time being herein referred to as the "Closing Date", against
delivery to the Trustee as custodian for DTC of the Global Securities
representing all of the Offered Securities. The Global Securities will be made
available for checking at the office of O'Melveny & Xxxxx LLP, 00 Xxxxxxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 at least 24 hours prior to the Closing Date.
4. Representations by Purchasers; Resale by Purchasers.
(a) Each Purchaser severally represents and warrants to the Issuers
that it is an "accredited investor" within the meaning of Regulation D
under the Securities Act.
11
(b) Each Purchaser severally acknowledges that the Offered Securities
have not been registered under the Securities Act and may not be offered or
sold within the United States or to, or for the account or benefit of, U.S.
persons except in accordance with Regulation S or pursuant to an exemption
from the registration requirements of the Securities Act. Each Purchaser
severally represents and agrees that it has offered and sold the Offered
Securities and will offer and sell the Offered Securities (i) as part of
their distribution at any time and (ii) otherwise until 40 days after the
later of the commencement of the offering and the Closing Date, only in
accordance with Rule 144A ("Rule 144A") or Rule 903 under the Securities
Act. Accordingly, neither such Purchaser nor its affiliates, nor any
persons acting on its or their behalf, have engaged or will engage in any
directed selling efforts with respect to the Offered Securities, and such
Purchaser, its affiliates and all persons acting on its or their behalf
have complied and will comply with the offering restrictions requirement of
Regulation S. Each Purchaser severally agrees that, at or prior to
confirmation of sale of the Offered Securities, other than a sale pursuant
to Rule 144A, such Purchaser will have sent to each distributor, dealer or
person receiving a selling concession, fee or other remuneration that
purchases the Offered Securities from it during the restricted period a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered
or sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the date of the
commencement of the offering and the closing date, except in either
case in accordance with Regulation S (or Rule 144A if available) under
the Securities Act. Terms used above have the meanings given to them
by Regulation S."
Terms used in this subsection (b) have the meanings given to them by
Regulation S.
(c) Each Purchaser severally agrees that it and each of its
affiliates has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities
except for any such arrangements with the other Purchasers or affiliates of
the other Purchasers or with the prior written consent of the Company.
(d) Each Purchaser severally agrees that it and each of its
affiliates will not offer or sell the Offered Securities by means of any
form of general solicitation or general advertising, within the meaning of
Rule 502(c) under the Securities Act, including, but not limited to (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio,
or (ii) any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising. Each Purchaser severally
agrees, with respect to resales made in reliance on Rule 144A of any of the
Offered Securities, to deliver either with the confirmation of such resale
or otherwise prior to settlement of such resale a notice to the effect that
the resale of such Offered Securities has been made in reliance upon the
exemption from the registration requirements of the Securities Act provided
by Rule 144A.
(e) Each Purchaser severally represents and agrees that: (i) it has
not offered or sold and prior to the expiry of a period of six months from
the closing date, will not offer or sell any of the Offered Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments
(as principal or agent) for the purposes of their businesses or otherwise
in circumstances which have not resulted and will not result in an offer to
the public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has only communicated or caused to be
communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the
meaning of section 21 of the Financial Services and Markets Act
12
2000) received by it in connection with the issue or sale of any of the
Offered Securities in circumstances in which section 21(1) of the FSMA does
not apply to the Issuers; and (iii) it has complied and will comply with
all applicable provisions of the FSMA with respect to anything done by it
in relation to the of the Offered Securities in, from or otherwise
involving the United Kingdom.
5. Certain Agreements of the Issuers. Each of the Issuers, jointly and
severally, agrees with the several Purchasers that:
(a) The Company will advise CSFB promptly of any proposal to amend or
supplement the Offering Circular and will not effect such amendment or
supplement without CSFB's consent (which consent shall not be unreasonably
withheld or delayed). If, at any time prior to the completion of the resale
of the Offered Securities by the Purchasers any event occurs as a result of
which the Offering Document as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, the Company
promptly will notify CSFB of such event and promptly will prepare, at its
own expense, an amendment or supplement which will correct such statement
or omission. Neither CSFB's consent to, nor the Purchasers' delivery to
offerees or investors of, any such amendment or supplement shall constitute
a waiver of any of the conditions set forth in Section 6.
(b) The Company will furnish to CSFB copies of the Preliminary
Offering Circular, the Offering Document and all amendments and supplements
to such documents, in each case as soon as available and in such quantities
as CSFB reasonably requests. At any time when the Company is not subject to
Section 13 or 15(d) of the Exchange Act, and any Offered Securities remain
"restricted securities" within the meaning of the Securities Act, the
Company will promptly furnish or cause to be furnished to CSFB (and, upon
request, to each of the other Purchasers) and, upon request of holders and
prospective purchasers of the Offered Securities, to such holders and
purchasers, copies of the information required to be delivered to holders
and prospective purchasers of the Offered Securities pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision thereto) in
order to permit compliance with Rule 144A in connection with resales by
such holders of the Offered Securities. The Company will pay the expenses
of printing and distributing to the Purchasers all such documents.
(c) The Issuers will use all commercially reasonable efforts to
obtain the qualification of the Offered Securities for sale and the
determination of their eligibility for investment under the laws of such
jurisdictions in the United States and Canada as CSFB designates and will
continue such qualifications in effect so long as required for the resale
of the Offered Securities by the Purchasers, provided that neither the
Company nor any Guarantor will be required to qualify as a foreign
corporation or to file a general consent to service of process in any such
state.
(d) During the period of two years after the Closing Date, the
Company and Dynegy Inc. will, upon request, furnish to CSFB, each of the
other Purchasers and any holder of Offered Securities a copy of the
restrictions on transfer applicable to the Offered Securities.
(e) During the period of five years hereafter, unless such documents
are available electronically via the XXXXX system maintained by the
Commission, the Company and Dynegy Inc. will furnish to CSFB and, upon
request, to each of the other Purchasers, as soon as practicable after the
end of each fiscal year, a copy of its annual report to stockholders for
such year; and the Company and Dynegy Inc. will furnish to CSFB and, upon
reasonable request, to each of the other Purchasers (i) as soon as
available, a copy of each report and any definitive proxy statement of the
13
Company and Dynegy Inc. mailed to stockholders, and (ii) the information
required to be provided to the Trustee for the Offered Securities pursuant
to the Indenture.
(f) Subject to the Purchasers' compliance with its representations
and warranties and agreements set forth in Section 4 hereof, the Issuers
consent to the use of the Offering Document, and any amendments and
supplements thereto required pursuant to Section 5(a) hereto, by the
Purchasers.
(g) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its affiliates (as defined in
Rule 144 under the Securities Act) to, resell any of the Offered Securities
that have been reacquired by any of them, unless such Offered Securities
are resold in a transaction registered under the Securities Act.
(h) During the period of two years after the Closing Date, the
Company will not be or become, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act.
(i) Each of the Issuers jointly and severally agree to pay all
expenses incidental to the performance of its obligations under the
Operative Documents including (i) the fees and expenses of the Trustee and
the Collateral Agent and their respective professional advisers, (ii) all
expenses in connection with the execution, issue, authentication, packaging
and initial delivery of the Offered Securities, the preparation and
printing of the Preliminary Offering Circular and the Offering Circular and
amendments and supplements thereto, and any other document relating to the
issuance, offer, sale and delivery of the Offered Securities, (iii) the
cost of qualifying the Offered Securities for trading in The Portal/SM/
Market ("PORTAL") of The Nasdaq Stock Market, Inc. and any expenses
incidental thereto, (iv) for any expenses (including fees and disbursements
of counsel) incurred in connection with qualification of the Offered
Securities for sale under the state securities laws as provided in Section
5(c) and the printing of memoranda relating thereto, (v) for any fees
charged by investment rating agencies for the rating of the Offered
Securities, and (vi) for expenses incurred in distributing the Preliminary
Offering Circular and the Offering Circular (including any amendments and
supplements thereto) to the Purchasers. The Company will reimburse the
Purchasers for all travel expenses of the Purchasers and the Company's
officers and employees and any other expenses of the Purchaser and the
Company in connection with attending or hosting meetings with prospective
purchasers of the Offered Securities.
(j) In connection with the offering, until CSFB shall have notified
the Company and the other Purchasers, which notice shall be promptly
provided upon the written request of the Company, of the completion of the
resale of the Offered Securities, neither the Company nor any of its
affiliates has or will, either alone or with one or more other persons, bid
for or purchase for any account in which it or any of its affiliates has a
beneficial interest any Offered Securities or attempt to induce any person
to purchase any Offered Securities; and neither it nor any of its
affiliates will make bids or purchases for the purpose of creating actual,
or apparent, active trading in, or of raising the price of, the Offered
Securities.
(k) For a period from the date of the initial offering of the Offered
Securities by the Purchasers to the Closing Date, the Company and each of
the Guarantors will not offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, any United States dollar-denominated
debt securities issued or guaranteed by the Company or any Guarantor and
having a maturity of more than one year from the date of issue except
issuances of Offered Securities pursuant to the conversion or exchange of
convertible or exchangeable securities or the exercise of warrants or
options, in each case outstanding on the date hereof, grants of employee
stock options pursuant to the terms of a plan in effect on the date hereof,
issuances of Offered Securities
14
pursuant to the exercise of such options or the exercise of any other
employee stock options outstanding on the date hereof; provided that this
sentence shall not prohibit the offering, issuance and sale of the
convertible subordinated debentures due 2023 of Dynegy Inc. and the
guarantee of such debentures by the Company on or before the Closing Date
or after the Closing Date pursuant to an option granted to the initial
purchasers thereof. Neither the Company nor any Guarantor will at any time
offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale,
pledge, contract or disposition would cause the exemption afforded by
Section 4(2) of the Securities Act or the safe harbor of Regulation S
thereunder to cease to be applicable to the offer and sale of the Offered
Securities.
(l) The Company will apply the net proceeds from the sale of the
Offered Securities to be sold by it hereunder substantially in accordance
with the description set forth in the Offering Document under the caption
"Use of Proceeds."
(m) Except as stated in this Agreement and in the Offering Document,
neither the Issuers nor any of their respective affiliates have taken, nor
will any of them take, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company or any of the
Guarantors to facilitate the sale or resale of the Offered Securities.
(n) The Issuers will use their best efforts to permit the Offered
Securities to be designated PORTAL securities in accordance with the rules
and regulations adopted by the National Association of Securities Dealers,
Inc. relating to trading in PORTAL and to permit the Offered Securities to
be eligible for clearance and settlement through DTC.
(o) The Issuers agree not to sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in the
Securities Act), that would be integrated with the sale of the Offered
Securities in a manner that would require the registration under the
Securities Act of the sale to the Purchasers or the resale of the Offered
Securities.
(p) The Issuers agree to comply with all the terms and conditions of
the Operative Documents and all agreements set forth in the representation
letters of the Issuers to DTC relating to the approval of the Offered
Securities by DTC for "book entry" transfer.
(q) The Issuers will do and perform all things required or necessary
to be done and performed under this Agreement by them prior to the Closing
Date, and to satisfy all conditions precedent to the Purchasers'
obligations hereunder to purchase the Offered Securities.
6. Conditions of the Obligations of the Purchasers. The obligations of the
several Purchasers to purchase and pay for the Offered Securities will be
subject to the accuracy of the representations and warranties on the part of the
Issuers herein as of the date hereof and on the Closing Date, to the accuracy of
the statements of officers of the Issuers made pursuant to the provisions
hereof, to the performance by the Issuers of their respective obligations
hereunder and to the following additional conditions precedent:
(a) The Purchasers shall have received a letter, substantially in the
form attached hereto as Annex B, dated the date of this Agreement, of
PricewaterhouseCoopers LLP confirming that they are independent public
accountants within the meaning of the Securities Act and the applicable
published rules and regulations thereunder ("Rules and Regulations"). Such
letter shall be in form and substance reasonably satisfactory to the
Purchasers as agreed as of the date hereof and shall cover the matters
ordinarily covered by accountants' "comfort letters" to initial purchasers
in connection with offerings similar to the offering of the Offered
Securities.
15
(b) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company or any of the
Guarantors and their respective subsidiaries taken as a whole which, in the
judgment of a majority in interest of the Purchasers, including CSFB, is
material and adverse and makes it impractical or inadvisable to proceed
with completion of the offering or the sale of and payment for the Offered
Securities; (ii) any downgrading in the rating of any debt securities of
the Company by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Securities Act), or any
public announcement that any such organization has under surveillance or
review its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating) or, except for the
"negative watch" outlook for Dynegy Inc. issued by Standard & Poor's
Ratings Group prior to the date of this Agreement, any announcement that
the Company has been placed on negative outlook as of or after the date of
this Agreement; (iii) any change in U.S. or international financial,
political or economic conditions or currency exchange rates or exchange
controls as would, in the judgment of a majority in interest of the
Purchasers, including CSFB, be likely to prejudice materially the success
of the proposed issue, sale or distribution of the Offered Securities,
whether in the primary market or in respect of dealings in the secondary
market; (iv) any material suspension or material limitation of trading in
securities generally on the New York Stock Exchange or any setting of
minimum prices for trading on such exchange, or any suspension of trading
of any securities of the Company on any exchange or in the over-the-counter
market; (v) any general banking moratorium declared by U.S. Federal or New
York authorities; (vi) any major disruption of settlements of securities or
clearance services in the United States; or (vii) any attack on, outbreak
or escalation of hostilities or act of terrorism involving the United
States, any declaration of war by Congress or any other national or
international calamity or emergency if, in the judgment of a majority in
interest of the Purchasers including CSFB, the effect of any such attack,
outbreak, escalation, act, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the offering or
sale of and delivery and payment for the Offered Securities.
(c) The Collateral Trustee shall have received (with a copy for the
Purchasers) at the Closing Date:
(i) appropriately completed copies, which have been duly
authorized for filing by the appropriate Person, of Uniform
Commercial Code Financing Statements naming the Company as a
debtor and the Collateral Trustee as the secured party, or other
similar instruments or documents to be filed under the UCC of all
jurisdictions as may be necessary or, in the reasonable opinion
of the Trustee and its counsel, desirable to perfect the security
interests of the Trustee pursuant to the Security Documents;
(ii) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report
certified by a party acceptable to the Trustee, dated a date
reasonably near to the Closing Date, listing all effective
Financing Statements (as defined below) which name the Company
(under its present name and any previous names) as the debtor,
together with copies of such Financing Statements (as defined
below) (none of which shall cover any collateral described in the
Security Documents, other than such Financing Statements that
evidence Permitted Prior Liens);
(iii) such releases, reconveyances, satisfactions or other
instruments as it may request to confirm the release,
satisfaction and discharge in full of all mortgages and
16
deeds of trust at any time delivered by the Company to secure any
obligations in respect of the Black Thunder credit facility, xxxx
executed, delivered and acknowledged in recordable form by the
grantee named therein or its of record successors or assigns;
(iv) a copy of the Collateral Trust Agreement executed by the
Credit Facility Agent under the existing credit facility; and
(v) such other approvals, opinions or documents as the
Purchasers, the Trustee or the Collateral Trustee may reasonably
request in form and substance satisfactory to each of them.
(d) All Uniform Commercial Code Financing Statements or other similar
Financing Statements and Uniform Commercial Code Form UCC-3 termination
statements required pursuant to clauses (c)(i) and (ii) above
(collectively, the "Financing Statements") shall have been delivered to CT
Corporation System or another similar filing service company acceptable to
the Trustee (the "Filing Agent"). The Filing Agent shall have acknowledged
in a writing reasonably satisfactory to the Trustee and its counsel (i) the
Filing Agent's receipt of all Financing Statements, (ii) that the Financing
Statements have either been submitted for filing in the appropriate filing
offices or will be submitted for filing in the appropriate offices within
ten days following the Closing Date and (iii) that the Filing Agent will
notify the Trustee and its counsel of the results of such submissions
within 30 days following the Closing Date.
(e) The Company shall have received the consent of the requisite
lenders under the Company's existing Credit Agreement dated as of April 1,
2003, to amend the credit facility thereunder substantially on the terms
set forth in the Offering Document, and such amendment shall have become
effective prior to or on the Closing Date on substantially the terms
described in the Offering Circular; upon the effectiveness of such
amendment the consummation of the transactions contemplated under the
Agreement shall not conflict with the Company's Credit Agreement as then in
effect; and the Purchasers shall have received counterparts, conformed as
executed, of such amendment to the Credit Agreement and such other
documentation as they deem necessary to evidence the consummation thereof.
(f) The Purchasers shall have received counterparts, conformed as
executed, of the Exchange Agreement, dated as of July 28, 2003, with
respect to the exchange of Dynegy Inc.'s $1.5 billion Series B mandatorily
convertible redeemable preferred stock currently held by a subsidiary of
ChevronTexaco for cash and other securities of Dynegy Inc., substantially
on the terms described in the Offering Circular.
(g) The Purchasers shall have received an opinion, dated the Closing
Date, of O'Melveny & Xxxxx LLP, special counsel for the Issuers, that:
(i) The Company is validly existing as a corporation in good
standing under the laws of the State of Delaware, has the corporate
power and authority under the Delaware General Corporate Law (the
"DGCL") and its certificate of incorporation and bylaws to own its
properties and conduct its business as described in the Offering
Circular;
(ii) Each Guarantor listed on the signature pages to this
Agreement organized under the laws of the State of New York (the "New
York Guarantors", each of which shall be identified in such opinion)
is validly existing as a corporation or limited liability
17
company, as the case may be, in good standing under the laws of the
State of New York, has the corporate or limited liability company
power and authority under the New York Business Corporation Law or the
New York Limited Liability Company Law, as the case may be, and its
certificate of incorporation and bylaws or limited liability company
agreement, as the case may be, to own its properties and conduct its
business as described in the Offering Circular;
(iii) Each Guarantor listed on the signature pages to this
Agreement organized under the laws of the State of Delaware (the
"Delaware Guarantors", each of which shall be identified in such
opinion) is validly existing as a corporation, limited liability
company, or limited partnership, as the case may be, in good standing
under the laws of the State of Delaware, has the corporate, limited
liability company or partnership power and authority under the DGCL,
the Delaware Limited Liability Company Act or the Delaware Revised
Uniform Limited Partnership Act, as the case may be, and its
certificate of incorporation and bylaws, limited liability company
operating agreement or limited partnership agreement, as the case may
be, to own its properties and conduct its business as described in the
Offering Circular;
(iv) The Company and each of the New York Guarantors and
Delaware Guarantors has all requisite corporate or limited liability
company power and authority, as the case may be, to enter into the
Operative Documents and the Company and each of the New York
Guarantors and Delaware Guarantors has requisite corporate or limited
liability company power and authority, as the case may be, to
authorize, issue and sell the Notes and the New York and Delaware
Guarantees, as the case may be, as contemplated by this Agreement;
(v) The Notes have been duly authorized by all necessary
corporate action on the part of the Company and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Purchasers in accordance with the
terms of this Agreement, will be the legally valid and binding
obligations of the Company, entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms,
except to the extent that such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally (including,
without limitation, fraudulent conveyance laws) and by general
principles of equity including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive relief,
regardless whether considered in a proceeding in equity or at law. The
Notes conform in all material respects to the description thereof in
the Offering Document;
(vi) The Guarantee of each of the New York Guarantors and the
Delaware Guarantors has been duly authorized by all necessary
corporate or limited liability action, as the case may be, on the part
of such New York Guarantor or Delaware Guarantor, as the case may be,
and, assuming due authorization by the Colorado, Connecticut,
Illinois, Michigan, Nevada, Texas, Virginia, Canadian and the United
Kingdom Guarantors (each as identified on the signature pages to this
Agreement, and such Guarantors collectively the "Other Guarantors"),
when executed by each such Guarantor and when the Notes on which
Guarantees have been endorsed have been duly executed by the Company
and authenticated by the Trustee in accordance with the terms of the
Indenture and delivered and paid for by the Purchasers in accordance
with the terms of this Agreement, the Guarantee of each Guarantor will
be legally valid and obligation of such Guarantor, enforceable against
such Guarantor, as the case may be, in accordance with its terms,
18
except to the extent that such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally (including,
without limitation, fraudulent conveyance laws) and by general
principles of equity including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive relief,
regardless whether considered in a proceeding in equity or at law. The
Guarantees conform in all material respects to the description thereof
in the Offering Document;
(vii) The execution and delivery of the Indenture have been
authorized by all necessary corporate or limited liability action, as
the case may be, on the part of the Company and each of the New York
Guarantors and the Delaware Guarantors and, assuming the due
authorization, execution and delivery thereof by the Other Guarantors,
is the legally valid and binding agreement of the Company and each of
the Guarantors, enforceable against the Company and each of the
Guarantors in accordance with its terms, except to the extent that
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally (including, without limitation, fraudulent
conveyance laws) and by general principles of equity including,
without limitation, concepts of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of specific
performance or injunctive relief, regardless whether considered in a
proceeding in equity or at law. The Indenture conforms in all material
respects to the description thereof in the Offering Document;
(viii) The Indenture conforms in all material respects to the
requirements of the Trust Indenture Act, and the rules and regulations
of the Commission applicable to an indenture which is qualified
thereunder;
(ix) The execution and delivery of each Security Document
(other than the Mortgages, as to which we do not express any opinion)
have been authorized by all necessary corporate or limited liability
action, as the case may be, on the part of the Company and each of the
New York Guarantors and the Delaware Guarantors and, assuming due
authorization by the Other Guarantors, is the legally valid and
binding agreement of the Company and each of the Guarantors that is a
party to each such Security Document, enforceable against the Company
and each of the Guarantors (to the extent a party thereto) in
accordance with their terms, except to the extent that such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally (including, without limitation, fraudulent
conveyance laws) and by general principles of equity including,
without limitation, concepts of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of specific
performance or injunctive relief, regardless whether considered in a
proceeding in equity or at law. The Security Documents, to the extent
describe in the Offering Circular, conform in all material respects to
the descriptions thereof in the Offering Circular;
(x) The Security Documents create security interests in favor
of the Collateral Agent in the Collateral (as defined in the Security
Documents), as security for the Offered Securities, in which a
security interest can be created under Article 9 of the Uniform
Commercial Code as in effect in the State of New York, except that to
the extent any part of the Collateral consists of an EWG located in
the state of New York or an interest therein, the Security Documents
will create such security interests only upon the
19
prior satisfaction or waiver of any Regulatory Act that may be
required pursuant to Section 70 of the New York Public Service Code;
(xi) Upon the filing of the UCC-1 Financing Statement with the
Secretary of State of the State of Delaware, the Collateral Agent will
have a perfected security interest in the Issuer's and each Delaware
Guarantor's interest in the Collateral (as defined in the Security
Documents), to the extent a security interest in such Collateral can
be perfected under the Uniform Commercial Code as in effect in the
State of Delaware by the filing of a financing statement in Delaware,
except that to the extent any part of the Collateral consists of an
EWG located in the state of New York or an interest therein, the
Security Documents will create such security interests only upon the
prior satisfaction or waiver of any Regulatory Act that may be
required pursuant to Section 70 of the New York Public Service Code;
(xii) Upon the filing of the UCC-1 Financing Statement with the
Secretary of State of the State of New York, the Collateral Agent will
have a perfected security interest in the New York Guarantor's
interest in the Collateral (as defined in the Security Documents), to
the extent a security interest in such Collateral can be perfected
under the Code by the filing of a financing statement in New York;
(xiii) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Offering Document, will not be an
"investment company" as defined in the Investment Company Act and the
rules and regulations of the Commission thereunder;
(xiv) Neither the Company nor Dynegy Inc. is (i) a registered
holding company or is required, by Section 5 of the Public Utility
Holding Company Act of 1935, as amended ("PUHCA"), to register as a
holding company, or (ii) a "subsidiary company" (as defined in PUHCA)
of a company that is a registered holding company or is required by
Section 5 of PUHCA, to register as a holding company;
(xv) No FPA approval or authorization is required for the
execution and delivery by the Issuers of this Agreement, the Offered
Securities and the Indenture, the performance by the Issuers of the
obligations thereunder and the grant by the Issuers of the security
interests to be granted by them pursuant to the provisions of the
Security Documents;
(xvi) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Operative
Documents in connection with the issuance or sale of the Offered
Securities by the Company and the New York Guarantors and the Delaware
Guarantors, except with respect to the Collateral to be made or
otherwise delivered as of or after the Closing Date to perfect the
security interests created by the Security Documents; except that this
opinion shall be limited to the following (the "Applicable Laws"):
those current statutes, rules or regulations of any governmental,
legislative, judicial, administrative or regulatory body of the State
of New York, the State of Delaware and the United States of America by
which the Company is bound, which such counsel has, in the exercise of
customary professional diligence, recognized as applicable to the
transactions of the type contemplated by the Purchase Agreement other
than (i) the anti-fraud provisions and registration requirements of
the federal securities laws and the rules and regulations of the
Commission thereunder (which, in the case of registration
requirements, is the subject of the opinion set forth in paragraph
(xx) of the opinion), (ii) applicable state or foreign securities or
Blue Sky laws, (iii) the rules and
20
regulations of the NASD in connection with the purchase and
distribution of the Offered Securities by the Purchasers, (iv) energy
regulatory laws (except to the extent set forth in paragraphs (xiv)
and (xv) of the opinion) and (v) Regulatory Acts;
(xvii) The execution and delivery by each of the Company and the
Guarantors of each of the Operative Documents to which it is a party,
the issuance, sale and delivery of the Offered Securities and
performance by each of the Company and the Guarantors will not
conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under (i) to our knowledge,
any Applicable Laws, (ii) any agreement or instrument to which the
Company, any Guarantor or any of their respective subsidiaries is a
party or by which the Company, any Guarantor or any of their
respective subsidiaries is bound or to which any of the properties of
the Company, any Guarantor or any of their respective subsidiaries is
subject that is filed pursuant to paragraph 4 or paragraph 10 of Item
601 of Regulation S-K as an exhibit to the Company's Annual Report on
Form 10-K/A for the year ended December 31, 2002 and to the Company's
other reports filed since January 1, 2003 pursuant to Section 13 of
the Exchange Act or (iii) the charter or by-laws of the Company, any
Guarantor or any of their respective subsidiaries;
(xviii) This Agreement has been duly authorized, executed and
delivered by the Company and each New York Guarantor and Delaware
Guarantor;
(xix) The statements contained in the Offering Document under
the captions (a) "Description of the Notes" and "Description of the
Collateral," insofar as such statements purport to constitute a
summary of the terms of the Indenture, the Notes, the Guarantees and
the Security Documents, (b) "Certain Relationships and Related Party
Transactions," "Description of the Amended Credit Facility," "The
Series B Preferred Stock Restructuring" and "Plan of Distribution",
insofar as such statements purport to constitute a summary of the
documents referred to therein, and (c) "United States Federal Income
Tax Considerations" insofar as such statements purport to constitute a
summary of the United States federal tax laws referred to therein, in
each case, are accurate and fairly summarize in all material respects
the matters referred to therein; and
(xx) Assuming without independent investigation, (a) that the
Offered Securities are sold to the Purchasers, and initially resold by
the Purchasers, in accordance with the terms of and in the manner
contemplated by, the Purchase Agreement and the Offering Circular; (b)
the accuracy of the representations and warranties of the Company and
the Guarantors set forth in the Purchase Agreement and in those
certain certificates delivered at the closing; (c) the accuracy of the
representations and warranties of the Purchasers set forth in the
Purchase Agreement; (d) the due performance and compliance by the
Company, the Guarantor and the Purchasers of their respective
covenants and agreements set forth in the Purchase Agreement; and (e)
the Purchasers' compliance with the Offering Circular and the transfer
procedures and restrictions described therein, it is not necessary to
register the Offered Securities under the Securities Act or to qualify
an indenture in respect thereof under the TIA in connection with the
issuance and sale of the Offered Securities by the Company to the
Purchasers or in connection with the offer, resale and delivery of the
Offered Securities by the Purchasers in the manner contemplated by the
Purchase Agreement and the Offering Circular, it being expressly
understood that we express no opinion as to any subsequent offer or
resale of any of the Offered Securities.
21
Such shall also state that it has no reason to believe that the Offering
Circular, as of its date or the date of any amendment or supplement thereto, as
of the date hereof and as of the Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made not misleading; it being understood that such counsel
need express no opinion as to the financial statements and other financial data
contained in the Offering Circular.
(h) Local counsel to the Company in Colorado, Connecticut, Illinois,
Kentucky, Louisiana, Michigan, Nevada, Ohio, Texas, Virginia and Washington
(and with respect to the Mortgages only, in Florida, Georgia, Mississippi,
New Mexico and North Carolina) shall have furnished to the Purchasers their
written opinions, dated the Closing Date, substantially in the form
attached hereto as Annex A. Such opinions shall be in form and substance
reasonably satisfactory to the Purchasers hereto as agreed as of the date
hereof, as to such matters under the laws of their respective states as the
Purchasers may reasonably request.
(i) The Purchasers shall have received an opinion, dated the Closing
Date, of Xxxxx Xxxxxxxx, Group General Counsel--Corporate Finance &
Securities for Dynegy Inc., that:
(i) As of March 31, 2003, the Company has an authorized
capitalization as set forth in the Offering Document, and all of the
issued shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable;
and except as set forth in the Offering Document, the capital stock of
each subsidiary owned by the Company or the Guarantors, as the case
may be, directly or through subsidiaries, to his knowledge is owned
free from liens, encumbrances and material defects;
(ii) Except as set forth in the Offering Document, there are
no contracts, agreements or understandings between the Company or any
Guarantor and any person granting such person the right to require the
Company or such Guarantor to file a registration statement under the
Securities Act with respect to any securities of the Company or such
Guarantor or to require the Company or such Guarantor to include such
securities with the Offered Securities and Guarantees registered
pursuant to any Registration Statement; and
(iii) To my knowledge, and other than as set forth in the
Offering Document, there are no pending actions, suits or proceedings
against or affecting the Company, any Guarantor or any of their
respective subsidiaries or any of their respective properties that, if
determined adversely to the Company, any Guarantor or any of their
respective subsidiaries, would individually or in the aggregate have a
Material Adverse Effect, or would materially and adversely affect the
ability of the Company or any Guarantor to perform its obligations
under the Operative Documents, or which are otherwise material in the
context of the sale of the Offered Securities; and no such actions,
suits or proceedings are, to such counsel's knowledge, threatened or
contemplated; and
Such shall also state that it has no reason to believe that the Offering
Circular, as of its date or as of the Closing Date, contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made not misleading; it being understood that such counsel
need express no opinion as to the financial statements or other financial data
contained in the Offering Circular. Such counsel also shall confirm, based on
certificates of public officials, that the Company is duly qualified to do
business as a foreign corporation in good standing in the other jurisdictions
where so qualified and nothing has come to
22
the attention of such counsel to cause him to believe that the Company is not so
duly qualified, in each case except to the extent the failure to so qualify or
be in good standing in such other jurisdictions could not reasonably be expected
to have a Material Adverse Effect.
(j) The Purchasers shall have received from Xxxxxx & Xxxxxxx LLP,
counsel for the Purchasers, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company and certain
Guarantors, the validity of the Offered Securities, the Offering Document,
the exemption from registration for the offer and sale of the Notes and the
Guarantees by the Issuers, respectively, to the several Purchasers and the
resales by the several Purchasers as contemplated hereby and other related
matters as CSFB may require, and the Issuers shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(k) The Purchasers shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company and Dynegy Inc. in which
such officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of the
Company and each Guarantor in this Agreement and the Security Documents are
true and correct, that the Company and each Guarantor has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder and under other Operative Documents at or prior to the
Closing Date, and that, subsequent to the date of the most recent financial
statements in the Offering Document there has been no material adverse
change, nor any development or event that reasonably could be expected to
result in a prospective material adverse change, in the condition
(financial or other), business, properties, results of operations or
prospects of the Company, any Guarantor or any of their respective
subsidiaries except as set forth in the Offering Circular (exclusive of any
amendment or supplement thereto on or after the date hereof).
(l) The Purchasers shall have received a letter, dated the Closing
Date, of PricewaterhouseCoopers LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred to
in such subsection will be a date not more than three days prior to the
Closing Date for the purposes of this subsection.
(m) As of the Closing Date, the representations and warranties
contained in the Operative Documents will be true and correct in all
material respects.
(n) The Company shall have furnished or caused to be furnished to the
Trustee on the Closing Date certificates of officers of the Company
reasonably satisfactory to the Trustee as to the accuracy of the
representations and warranties of the Obligors in the Operative Documents
at and as of such Closing Date and as to such other matters as the Trustee
may reasonably request.
(o) The Trustee and the Collateral Agent shall have received evidence
reasonably satisfactory to the Trustee and the Collateral Agent that the
Collateral Agent shall have "control" (within the meaning of Sections 8-106
and 9-106 of the Uniform Commercial Code) over any securities accounts
included in the Collateral and "control" (within the meaning of Section
9-104 of the Uniform Commercial Code) over the Asset Sale Proceeds Account
and Escrow Account included in the Collateral.
(p) On the Closing Date, each Operative Document will conform, as to
legal matters, in all material respects to the description thereof
contained in the Offering Circular.
23
(q) The Company and each Guarantor will furnish the Purchasers with
such conformed copies of such opinions, certificates, letters and documents
as the Purchasers reasonably request. CSFB may in its sole discretion waive
on behalf of the Purchasers compliance with any conditions to the
obligations of the Purchasers hereunder.
7. Indemnification and Contribution.
(a) The Company and each Guarantor will, jointly and severally,
indemnify and hold harmless each Purchaser, its partners, affiliates,
directors and officers and each person, if any, who controls such Purchaser
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such Purchaser
may become subject, under the Securities Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Offering Document, or any amendment or supplement thereto, or any related
preliminary offering circular, or arise out of or are based upon the
omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading, including any losses, claims, damages
or liabilities arising out of or based upon the Company's or any
Guarantor's failure to perform its obligations under Section 5(a) of this
Agreement, and will reimburse each Purchaser for any legal or other
expenses actually and reasonably incurred by such Purchaser in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the neither
the Company nor any Guarantor will be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any
Purchaser through CSFB specifically for use therein, it being understood
and agreed that the only such information consists of the information
described as such in subsection (b) below; provided, further, however, that
the foregoing indemnity agreement with respect to losses, claims, damages
or liabilities shall not inure to the benefit of any Purchaser (or any
person controlling any Purchaser) to the extent that such losses, claims,
damages or liabilities arise out of or based upon (x) any untrue statement
or alleged untrue statement of any material fact in the Preliminary
Offering Circular or (y) the omission or alleged omission to state in the
Preliminary Offering Circular a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, if and only if: (1) the person asserting such losses,
claims, damages or liabilities purchased Offered Securities from such
Purchaser in the initial resale by such Purchaser (such person, an "Initial
Resale Purchaser") and a copy of the Offering Circular was not sent or
given by or on behalf of such Purchaser to such Initial Resale Purchaser,
(2) the Company furnished to the Purchasers sufficient copies of the
Offering Circular on a timely basis to permit delivery of the Offering
Circular by the Purchasers to all Initial Resale Purchasers at or prior to
the delivery of the written confirmation of the sale of the Offered
Securities to such person, and (3) the disclosure contained in the Offering
Circular cured the defect in the Preliminary Offering Circular giving rise
to such losses, claims, damages or liabilities.
(b) Each Purchaser will severally and not jointly indemnify and hold
harmless the Company, each Guarantor and their respective directors and
officers and each person, if any, who controls the Company or any Guarantor
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages or liabilities to which the Company or any Guarantor may
become subject, under the Securities Act or the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Offering
Document, or any amendment or supplement thereto, or any related
preliminary offering circular,
24
or arise out of or are based upon the omission or the alleged omission to
state therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company by such Purchaser through CSFB
specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by the Company and any Guarantor in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred, it being understood and agreed that
the only such information furnished by any Purchaser consists of the
following information in the Offering Document furnished on behalf of each
Purchaser: the third, fifth, seventh and ninth paragraphs under the caption
"Plan of Distribution"; provided, however, that the Purchasers shall not be
liable for any losses, claims, damages or liabilities arising out of or
based upon the Company's or any Guarantor's failure to perform its
obligations under Section 5(a) of this Agreement.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the failure to notify the indemnifying party
shall not relieve it from any liability that it may have under subsection
(a) or (b) above except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by
such failure; and provided further that the failure to notify the
indemnifying party shall not relieve it from any liability that it may have
to an indemnified party otherwise than under subsection (a) or (b) above.
In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party),
and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to
the contrary; (ii) the indemnifying party has failed within a reasonable
time to retain counsel reasonably satisfactory to the indemnified party;
(iii) the indemnified party shall have reasonably concluded that there may
be legal defenses available to it that are different from or in addition to
those available to the indemnifying party; (or (iv) the named parties in
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood and agreed
that the indemnifying party shall not, in connection with any proceeding or
related proceeding in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel)
for all indemnified parties, and that all such fees and expenses shall be
reimbursed as they are incurred. Any such separate firm for any Purchaser,
its affiliates, directors and officers and any control persons of such
Purchaser shall be designated in writing by CSFB and any such separate firm
for the Company, the Guarantors, their directors and officers and any
control persons of the Company and the Guarantors shall be designated in
writing by the Company. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is
or could have been a party and indemnity could have been sought hereunder
by such indemnified party unless such
25
settlement includes (i) an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such action
and (ii) does not include a statement as to or an admission of fault,
culpability or failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Issuers on the one hand and the Purchasers on the
other from the offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Issuers
on the one hand and the Purchasers on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Issuers on the one hand and the
Purchasers on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received
by the Issuers bear to the total discounts and commissions received by the
Purchasers from the Issuers under this Agreement. The relative fault shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Issuers or the Purchasers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result
of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of
this subsection (d). Notwithstanding the provisions of this subsection (d),
no Purchaser shall be required to contribute any amount in excess of the
amount by which the total discounts, fees and commissions received by such
Purchaser exceeds the amount of any damages which such Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The Purchasers' obligations in
this subsection (d) to contribute are several in proportion to their
respective purchase obligations and not joint.
(e) The obligations of the Company and each Guarantor under this
Section shall be in addition to any liability which the Company and each
Guarantor may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Purchaser within the
meaning of the Securities Act or the Exchange Act; and the obligations of
the Purchasers under this Section shall be in addition to any liability
which the respective Purchasers may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls the
Company or any Guarantor within the meaning of the Securities Act or the
Exchange Act.
8. Default of Purchasers. If any Purchaser or Purchasers default in their
obligations to purchase Securities hereunder and the aggregate principal amount
of the Offered Securities that such defaulting Purchaser or Purchasers agreed
but failed to purchase does not exceed 10% of the total principal amount of the
Offered Securities, CSFB may make arrangements satisfactory to the Company for
the purchase of such Offered Securities by other persons, including any of the
Purchasers, but if no such arrangements are made by the Closing Date, the
non-defaulting Purchasers shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Purchasers agreed but failed to purchase. If any Purchaser or
Purchasers so default and the aggregate principal amount of the Offered
Securities with respect to which such default or defaults occur exceeds 10% of
the total principal amount of the Offered Securities and arrangements
satisfactory to CSFB and the Company for the
26
purchase of such Offered Securities by other persons are not made within 36
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Purchaser or the Issuers, except as provided in
Section 9. As used in this Agreement, the term "Purchaser" includes any person
substituted for a Purchaser under this Section. Nothing herein will relieve a
defaulting Purchaser from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Issuers or their respective officers and of the several Purchasers set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any Purchaser, its affiliates, the Issuers or any of their
respective representatives, officers or directors or any controlling person, and
will survive delivery of and payment for the Offered Securities. If this
Agreement is terminated pursuant to Section 8 or if for any reason the purchase
of the Offered Securities by the Purchasers is not consummated, the Issuers
shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 5 and the respective obligations of the Issuers and the
Purchasers pursuant to Section 7 shall remain in effect and if any Offered
Securities have been purchased hereunder the representations and warranties in
Section 2 and all obligations under Section 5 shall remain in effect; provided,
that if this Agreement is terminated pursuant to Section 8 hereof, the Issuers
shall not be obligated to reimburse any defaulting Purchaser on account of any
expenses that otherwise would have been reimbursed hereunder. If the purchase of
the Offered Securities by the Purchasers is not consummated for any reason other
than solely because of the termination of this Agreement pursuant to Section 8
or the occurrence of any event specified in clause (iii), (iv), (v), (vi) or
(vii) of Section 6(b), the Issuers will reimburse the Purchasers for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Purchasers will be mailed, delivered, faxed or sent by courier to the
Purchasers, c/o Credit Suisse First Boston LLC, Xxxxxx Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000, Attention: Transactions Advisory Group (Fax: 000-000-0000),
or, if sent to the Company or any Guarantor, will be mailed, delivered or
telegraphed and confirmed to it at 0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxx 00000 Attention: General Counsel (Fax: 000-000-0000); provided, however,
that any notice to a Purchaser pursuant to Section 7 will be mailed, delivered,
faxed or sent by courier and confirmed to such Purchaser.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the controlling
persons referred to in Section 7, and no other person will have any right or
obligation hereunder, except that holders of Offered Securities shall be
entitled to enforce the agreements for their benefit contained in the second and
third sentences of Section 5(b) hereof against the Issuers as if such holders
were parties hereto.
12. Representation of Purchasers. CSFB will act for the several Purchasers
in connection with this purchase, and any action under this Agreement taken by
CSFB will be binding upon all the Purchasers.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws.
27
The Company and each Guarantor hereby submits to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
28
If the foregoing is in accordance with the Purchasers understanding of our
agreement, kindly sign and return to the Company one of the counterparts hereof,
whereupon it will become a binding agreement among the Issuers and the several
Purchasers in accordance with its terms.
Very truly yours,
Dynegy Holdings Inc.
By: /s/ Xxxxxxx Xxxx
------------------------------------
Title: Assistant Treasurer
Dynegy Inc.
BG Holdings, Inc.
Illinova Corporation
Illinova Energy Partners, Inc.
Illinova Generating Company
Igc Xxxxxx County, Inc.
Igc Xxxxxx Frontier, Inc.
Ipg Ferndale, Inc.
Ipg Paris, Inc.
Charter Oak (Paris), Inc.
By: /s/ Xxxxxx X. Xxx
------------------------------------
Title: Sr. Vice President-Treasurer
[continued]
29
Dynegy Power Corp. DPC II Inc.
Dynegy Services, Inc. Dynegy Power Management Services, L.P.,
By: Dynegy Services, Inc., its
general partner
Dynegy Engineering, Inc. Calcasieu Power, Inc.
Dynegy Operating Company Dynegy Parts And Technical
Services, Inc.
Dynegy Power Management Services, Inc. Hep Cogen, Inc.
Xxxxxxxx Xxxxx, Inc. Dynegy Power Investments, Inc.
Dynegy Power Services, Inc. Dynegy Power Nevada, Inc.
Michigan Cogen, Inc. Michigan Power, Inc.
Michigan Power Holdings, Inc. OCG Cogen, Inc.
Oyster Creek Cogen, Inc. RRP Company
DPC Colombia - Opon Power Resources
Company Termo Santander Holding, LLC
Riverside Generation, Inc. Riverside Generating Company, L.L.C.
Rolling Hills Generation, Inc. Dynegy Renaissance Power, Inc.
Dynegy Northeast Generation, Inc. Xxxxxx Power, L.L.C.
Dynegy Midstream GP, Inc. Dynegy Liquids G.P., L.L.C.
By: Dynegy Midstream Service, Limited
Partnership, its sole member
By: Dynegy Midstream G.P., Inc. its
general partner
On behalf of each of the entities On behalf of each of the entities
listed above: listed above:
By: /s/ Xxxxxx X. Xxx By: /s/ Xxxxxx X. Xxx
----------------------------------- ------------------------------------
Title: Sr. Vice President-Treasurer Title: Sr. Vice President-Treasurer
Dynegy Midstream Services, Limited Dynegy Liquids Marketing And Trade
Partnership
By: Dynegy Midstream G.P., Inc., its
general partner
30
Dynegy OPI, LLC Dynegy NGL Pipeline Company, LLC
Dynegy Intrastate Pipeline, LLC Dynegy Energy Pipeline Company LLC
Dynegy Upper Holdings, L.L.C. Dmg Enterprises, Inc.
Havana Dock Enterprises, LLC Dmt Holdings, Inc.
DMT G.P., L.L.C. Dmt Holdings, L.P.
By: DMT G.P., L.L.C., its general
partner
Dynegy Coal Trading & Transportation, Ngc Storage, Inc.
L.L.C.
Black Thunder Member, Inc. Parish Power, Inc.
Calcasieu Power, L.L.C. Delta Cogen, Inc.
Cogen Power, Inc. Cogen Power, L.P.
By: CoGen Power, Inc., its general
partner
Dynegy Power Holdings, Inc. Midstream Barge Company, L.L.C.
Dynegy Regulated Holdings, LLC Black Mountain Cogen, Inc.
Bluegrass Generation, Inc. Bluegrass Generation Company, L.L.C.
Dynegy Cabrillo II LLC Dynegy Holding Company, L.L.C.
On behalf of each of the entities On behalf of each of the entities
listed above: listed above:
By: /s/ Xxxxxx X. Xxx By: /s/ Xxxxxx X. Xxx
------------------------------------ ------------------------------------
Title: Sr. Vice President-Treasurer Title: Sr. Vice President-Treasurer
31
Blue Ridge Generation Inc. Blue Ridge Generation Llc
Chickahominy Generating Company Chickahominy Power, Llc
Florida Mercantile Power, Inc. Palmetto Power, L.L.C.
Gasification Services, Inc. Georgia Mercantile Power, Inc.
Heard County Power, L.L.C. Xxxx County IPP, Inc.
Hartwell Independent Power Hartwell Power
Company Partners, Inc.
Dynegy Xxxxxxx, L.L.C. Dynegy Xxxxxx Power Retail, L.L.C.
Dynegy Global Energy, Inc. Dynegy Broadband Marketing And Trade
Dynegy GP INC. Dynegy Marketing And Trade
By: Dynegy GP, Inc.
its general partner
Dynegy Technology Capital Corp. Dynegy Strategic Investments GP, L.L.C.
Dynegy Strategic Investments, L.P. Renaissance Power, L.L.C.
By: Dynegy Strategic Investments GP,
L.L.C., its general partner
Rolling Hills Generating, L.L.C. Dynegy Power Marketing, Inc.
Dynegy Energy Services, Inc. Illinois Power Energy, Inc.
Des Northeast, Inc.
On behalf of each of the entities On behalf of each of the entities
listed above: listed above:
By: /s/ Xxxxxx X. Xxx By: /s/ Xxxxxx X. Xxx
------------------------------------ ------------------------------------
Title: Sr. Vice President-Treasurer Title: Sr. Vice President-Treasurer
32
Dem GP, LLC Dynegy Energy Marketing, Lp
By: DEM GP, LLC, its general partner
Dynegy Administrative Services Company NIPC, Inc.
Dfs L.P., LLC Dynegy Xxxxxx Member, Inc.
Dfs General Partner, LLC Dynegy Financial Services, Limited
Partnership
By: DFS General Partner, LLC, its
general partner
Dynegy Midwest Generation , Inc. Dynegy I.T., Inc.
Chesapeake Power, Inc. Xxxxx River Energy Corp.
DPC Power Resources Holding Company Dry Creek Power, Inc.
Rockingham Power, L.L.C. Dynegy Power Development Company
On behalf of each of the entities On behalf of each of the entities
listed above: listed above:
By: /s/ Xxxxxx X. Xxx By: /s/ Xxxxxx X. Xxx
----------------------------------- ------------------------------------
Title: Sr. Vice President-Treasurer Title: Sr. Vice President-Treasurer
Dynegy Danskammer, L.L.C.
By: /s/ Xxxxxxx Xxxx
------------------------------------
Title: Assistant Treasurer
Dynegy Management, Inc.
DMS LP, Inc.
DMT L.P., L.L.C.
Dynegy Strategic Investments LP, Inc.
DEM LP, LLC
By: /s/ Xxxxx Xxxxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxxxx
Title: President
33
The foregoing Purchase Agreement is
hereby confirmed and accepted as of
the date first above written.
Credit Suisse First Boston LLC
Banc of America Securities LLC
Citigroup Global Markets Inc.
X.X. Xxxxxx Securities Inc.
Xxxxxx Brothers Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
ABN AMRO Incorporated
Banc One Capital Markets Inc.
Credit Lyonnais Securities Inc.
Deutsche Bank Securities Inc.
XX Xxxxx Securities Corporation,
TD Securities (USA), Inc.
By: Credit Suisse First Boston LLC
By: /s/ Xxxxx Xxxxx
------------------------------
Title: Managing Director
34
SCHEDULE A
Principal Principal Principal
Amount of 2008 Amount of 2010 Amount of 2013
Offered Offered Offered
Purchaser Securities* Securities Securities
----------------------------------- -------------- -------------- --------------
Credit Suisse First Boston LLC .... $ 108,000,000 $ 252,000,000 $ 336,000,000
Banc of America Securities LLC .... 20,812,500 48,562,500 64,750,000
Citigroup Global Markets Inc. ..... 20,812,500 48,562,500 64,750,000
X.X. Xxxxxx Securities Inc. ....... 20,812,500 48,562,500 64,750,000
Xxxxxx Brothers Inc. .............. 20,812,500 48,562,500 64,750,000
ABN AMRO Incorporated ............. 4,821,429 11,250,000 15,000,000
Banc One Capital Markets Inc. ..... 4,821,429 11,250,000 15,000,000
Credit Lyonnais Securities Inc. ... 4,821,429 11,250,000 15,000,000
Deutsche Bank Securities Inc. ..... 4,821,429 11,250,000 15,000,000
Xxxxxx Xxxxxxx & Co. Incorporated . 4,821,429 11,250,000 15,000,000
XX Xxxxx Securities Corporation ... 4,821,429 11,250,000 15,000,000
TD Securities (USA), Inc. ......... 4,821,429 11,250,000 15,000,000
-------------- -------------- --------------
Total .......................... $ 225,000,000 $ 525,000,000 $ 700,000,000
============== ============== ==============
----------
* Amounts are rounded to the nearest whole dollar.
35
