EXHIBIT 1.1
25,000,000 Shares
DYNEGY INC.
COMMON STOCK
Underwriting Agreement
December 21, 2001
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Dynegy Inc., an Illinois corporation (the "Company"), proposes to sell
to Xxxxxx Brothers Inc. (the "Underwriter") an aggregate of 25,000,000 shares
(the "Firm Stock") of the Company's Class A Common Stock, no par value (the
"Common Stock"). In addition, for the sole purpose of covering over-allotments
in connection with the sale of Firm Stock, the Company proposes to grant to the
Underwriter an option to purchase up to 2,500,000 additional shares (the "Option
Stock") of Common Stock. The Firm Stock and any Option Stock purchased pursuant
to this Underwriting Agreement are herein called the "Stock."
This agreement (this "Agreement") is to confirm the agreement concerning
the purchase of the Stock from the Company by the Underwriter.
1. Representations and Warranties. The Company represents and warrants to,
and agrees with, the Underwriter that:
(a) Registration statements on Form S-3 (File Nos. 333-46634 and 333-
66088) with respect to the Stock has (i) been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, (ii) been filed with the Commission under the Securities Act,
and (iii) become effective under the Securities Act and is not proposed to
be amended by amendment or post-effective amendment. No stop order
suspending the effectiveness of such registration statements or any Rule
462(b) registration statement has been issued under the Securities Act and
no proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission. Copies of
such registration statements as amended to date have been delivered by the
Company to you as the Underwriter. For purposes of this Agreement,
"Effective Time" means the most recent date and the time as of which such
registration statement was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; "Preliminary Prospectus" means
the prospectus included in the registration statement on Form S-3 (File
No. 333-66088), or amendments thereof, before such registration statement
became effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the
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Underwriter pursuant to Rule 424(a) of the Rules and Regulations;
"Registration Statement" means such registration statements, as amended at
the Effective Time, including any documents incorporated by reference
therein and all information contained in the final prospectus filed with
the Commission pursuant to Rule 424(b) of the Rules and Regulations ("Rule
424(b)") in accordance with Section 6(a) hereof and deemed to be a part
thereof as of the Effective Time pursuant to paragraph (b) of Rule 430A of
the Rules and Regulations; "Prospectus" means the form of prospectus
relating to the Stock (including the prospectus supplement), as first used
to confirm sales of the Stock; and "described in the Prospectus" or
"disclosed in the Prospectus" means described or disclosed, as applicable,
in the Prospectus or any document incorporated by reference therein. If it
is contemplated, at the time this Agreement is executed, that a
registration statement will be filed pursuant to Rule 462(b) under the
Securities Act before the offering of the Stock may commence, the term
"Registration Statement" as used in this Agreement includes such
registration statement, as the same may be amended from time to time.
Reference made herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include any documents incorporated by reference
therein as of the date of such Preliminary Prospectus or Prospectus, as the
case may be, and any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), after the date of such Preliminary Prospectus
or Prospectus, as the case may be, and incorporated by reference in such
Preliminary Prospectus or Prospectus. For purposes of this Section l, all
references to the Registration Statement, any post-effective amendments
thereto and the Prospectus shall be deemed to include, without limitation,
any electronically transmitted copies thereof, including, without
limitation, any copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis, and Retrieval system ("XXXXX"). The Commission
has not issued any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will when they become effective or are first used to confirm
sales of the Stock, as the case may be, conform to the requirements of the
Securities Act and the Rules and Regulations, (ii) the Registration
Statement and any amendment thereto does not and will not, as of the
Effective Date, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading and (iii) the Prospectus and any
amendment or supplement thereto will not, as of the first date of its use
to confirm sales of the Stock, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Notwithstanding
the foregoing, the Company makes no representation or warranty as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon, and in conformity with written information
furnished to the Company by the Underwriter for inclusion therein. There is
no contract or document required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement or to a document incorporated by reference into the
Registration Statement which is not described or filed as required.
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(c) Xxxxxx Xxxxxxxx LLP, whose report is included or incorporated by
reference in the Prospectus, are independent certified public accountants
as required by the Securities Act and the Rules and Regulations. The
financial statements (including the related notes and supporting schedules)
included or incorporated by reference in the Registration Statement, any
Preliminary Prospectus and the Prospectus present fairly the financial
condition, results of operations and cash flows of the entities purported
to be shown thereby at the dates and for the periods indicated and have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated and conform
in all material respects with the Rules and Regulations, except as
otherwise noted therein; and the supporting schedules included or
incorporated by reference in the Registration Statement present fairly the
information required to be stated therein.
(d) Each of the Company and its Significant Subsidiaries (as defined in
Exhibit A hereto) has been duly organized or formed and is validly existing
in good standing under the laws of the jurisdiction of its organization or
formation, with full power and authority to own, lease and operate its
properties and conduct its business and to enter into and perform its
obligations under this Agreement; and each of the Company and its
Subsidiaries (as defined in Section 12 hereof), is duly qualified to do
business and is in good standing in each jurisdiction in which the
character of the business conducted by it or the location of the properties
owned, leased or operated by it make such qualification necessary, except
where the failure to so qualify would not, individually or in the
aggregate, have a material adverse effect on the condition (financial or
other), results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole.
(e) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and non-
assessable and conform to the description thereof contained in the
Prospectus. All of the outstanding shares of capital stock of each
Significant Subsidiary of the Company that is a corporation have been duly
authorized and validly issued and are fully paid and nonassessable. Except
as disclosed in the Prospectus, all of the outstanding shares of capital
stock or partnership interests of each Significant Subsidiary of the
Company are owned directly or indirectly by the Company, free and clear of
any claim, lien, encumbrance, security interest, restriction upon voting or
transfer, preemptive rights or any other claim of any third party, except
such as are described in the Prospectus and except that the shares of
capital stock of Dynegy Midwest Generation, Inc. have been pledged in
connection with a structured financing.
(f) The unissued shares of Stock to be issued and sold by the Company
through the Underwriter hereunder have been duly and validly authorized
and, when issued and delivered against payment therefor as provided herein,
will be duly and validly issued, fully paid and non-assessable; and the
Stock will conform to the description thereof contained in the Prospectus.
(g) Except as described in or contemplated by the Registration Statement
and the Prospectus, there has not been any material adverse change in, or
adverse development which, individually or in the aggregate, materially
affects or may materially
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affect, the condition (financial or other), results of operations, business
or prospects of the Company and its Subsidiaries taken as a whole from the
respective dates as of which information is given in the Prospectus.
(h) Neither (i) the execution or delivery hereof by the Company, (ii)
the consummation of the transactions contemplated hereby, (iii) the
issuance, sale and delivery of the Stock by the Company nor (iv) compliance
by the Company with all of the provisions of this Agreement will result in
a breach or violation of, or constitute a default under, the articles of
incorporation, by-laws, partnership agreement or other governing documents
of the Company or any of its Subsidiaries, or any agreement, indenture or
other instrument to which the Company or any of its Subsidiaries is a party
or by which any of them is bound, or to which any of their properties is
subject, nor will any such action or the performance by the Company of its
obligations hereunder violate any law, rule, administrative regulation or
decree of any court, or any governmental agency or body having jurisdiction
over the Company, its Subsidiaries or any of their respective properties,
or result in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company or any of its
Subsidiaries. Except for permits, consents, approvals and similar
authorizations required under the securities or "Blue Sky" laws of certain
jurisdictions, and except for such permits, consents, approvals and
authorizations which have been obtained or the failure of which to obtain
would not have a material adverse effect on the Company and its
Subsidiaries taken as a whole or the transactions contemplated by this
Agreement, no permit, consent, approval, authorization or order of, or
filing or registration with, any court, governmental agency or body or
financial institution is required in connection with the execution,
delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated by this Agreement.
(i) There are no contracts, agreements or understandings between the
Company and any person granting such person the right (other than rights
which have been waived or satisfied) to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Securities Act, except as described in the Prospectus.
(j) This Agreement has been duly authorized, executed and delivered by
the Company.
(k) Neither the Company nor any of its Subsidiaries (i) is in violation
of its certificate of incorporation or by-laws or other governing
documents, (ii) is in default and no event has occurred which, with notice
or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in
any agreement, indenture or other instrument to which it is a party or by
which it is bound or to which any of its properties is subject, except for
any such defaults that would not, individually or in the aggregate, have a
material adverse effect on the condition (financial or other), results of
operations, business or prospects of the Company and its Subsidiaries taken
as a whole, or (iii) is in violation of any law, ordinance, governmental
rule, regulation or court decree to which it or its property may be
subject,
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except for any such violations that would not, individually or in
the aggregate, have a material adverse effect on the condition (financial
or other), results of operations, business or prospects of the Company and
its Subsidiaries taken as a whole.
(l) The Company has all requisite corporate power and authority to
issue, sell and deliver the Stock in accordance with and upon the terms and
conditions set forth in this Agreement and in the Registration Statement
and Prospectus. All corporate action required to be taken by the Company
for the authorization, issuance, sale and delivery of the Stock to be sold
by the Company hereunder has been validly and sufficiently taken.
(m) Each contract, agreement or arrangement to which the Company or any
of its Subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any of its
Subsidiaries is subject, which is material to the condition (financial or
other), results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole, has been duly and validly authorized,
executed and delivered by the Company or its Subsidiary, as applicable;
none of such contracts, agreements or arrangements has been assigned by the
Company or any of its Subsidiaries to any non-affiliated party other than
in the ordinary course of business, and the Company knows of no present
condition or fact which would prevent compliance by the Company or any of
its Subsidiaries or any other party thereto with the terms of any such
contract, agreement or arrangement in accordance with its terms in all
material respects, except for any such failures to comply that would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or other), results of operations, business or
prospects of the Company and its Subsidiaries taken as a whole; neither the
Company nor any of its Subsidiaries has any present intention to exercise
any right that it may have to cancel any such contract, agreement or
arrangement or otherwise to terminate its rights and obligations
thereunder, and none of them has any knowledge that any other party to any
such contract, agreement or arrangement has any intention not to render
full performance in all material respects as contemplated by the terms
thereof, except for any such cancellations, terminations or failures to
perform that would not, individually or in the aggregate, result in a
material adverse effect on the condition (financial or other), results of
operations, business or prospects of the Company and its Subsidiaries taken
as a whole.
(n) Except as disclosed in the Prospectus, there is no litigation or
governmental proceeding to which the Company or any of its Subsidiaries is
a party or to which any property of the Company or any of its Subsidiaries
is subject or which is pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries that could
reasonably be expected to, individually or in the aggregate, result in a
material adverse effect on the condition (financial or other), results of
operations, business or prospects of the Company and its Subsidiaries taken
as a whole or which is required to be disclosed in the Prospectus and is
not disclosed.
(o) Neither the Company nor any Subsidiary is in violation of any law,
ordinance, governmental rule or regulation or court decree to which it may
be subject which violation could reasonably be expected to, individually or
in the aggregate with all such violations, have a material adverse effect
on the condition (financial or other), results of operations, business or
prospects of the Company and its Subsidiaries taken as a whole.
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(p) The documents incorporated by reference into each Preliminary
Prospectus and the Prospectus, at the time they were or are filed with the
Commission, conform or will conform, as the case may be, with the
requirements of the Securities Act and the Rules and Regulations and the
Exchange Act and the rules and regulations adopted by the Commission
thereunder, and did not or will not, as the case may be, include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(q) Each of the Company and its Subsidiaries owns or possesses, and is
operating in compliance with, all approvals, licenses, permits,
certificates, franchises, easements, consents, orders and other
governmental authorizations and rights necessary to own or lease its
properties and conduct its business (collectively, "Approvals"), except
such Approvals as to which the failure to own, possess or operate in
compliance with would not, individually or in the aggregate, result in a
material adverse effect on the condition (financial or other), results of
operations, business or prospects of the Company and its Subsidiaries taken
as a whole ("Material Approvals"); all such Material Approvals are valid
and in full force and effect; and the Company has no knowledge that any
governmental agency or body is considering limiting, suspending or revoking
any such Material Approval.
(r) From the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, neither the Company nor any of its Subsidiaries has (i) issued,
granted, repurchased, reclassified or exchanged any of their respective
securities (other than in respect of intercompany transactions or pursuant
to employee stock options, the Company's stock repurchase program or any of
the Company's employee benefit plans), (ii) incurred any liability or
obligation, direct or contingent, other than liabilities and obligations
which were incurred in the ordinary course of business, (iii) entered into
any material transaction not in the ordinary course of business or (iv)
entered into any material transaction with an affiliate of the Company,
other than a Subsidiary; and the Company has not declared or paid any
dividend on its capital stock other than the regular quarterly dividend on
its Common Stock (it being understood that the Company's Subsidiary,
Illinois Power Company, has continued to pay dividends on its outstanding
preferred stock).
(s) There has been no storage, disposal, generation, transportation,
handling or treatment of hazardous substances or hazardous wastes by the
Company or any of its Subsidiaries (or to the knowledge of the Company, any
of its predecessors in interest) at, upon or from any of the property now
or previously owned or leased by the Company or any of its Subsidiaries in
violation of any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not,
individually or in the aggregate with all such violations and remedial
actions, result in a material adverse effect on the condition (financial or
other), results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole; there has been no material spill, discharge,
leak, emission, injection, escape, dumping or release of any kind onto such
property or into the environment surrounding such property of any hazardous
wastes or hazardous substances due to or caused by the Company or any of
its Subsidiaries, except for any such spill,
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discharge, leak, emission, injection, escape, dumping or release which
would not, individually or in the aggregate with all such spills,
discharges, leaks, emissions, injections, escapes, dumpings and releases
result in a material adverse effect on the condition (financial or other),
results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole; none of the facilities of the Company or any
of its Subsidiaries is a solid waste facility for purposes of any
applicable environmental law; and the terms "hazardous substances" and
"hazardous wastes" shall have the meanings specified in any applicable
local, state and federal laws or regulations with respect to environmental
protection.
(t) The Company has not taken and shall not take, directly or
indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Stock to facilitate the
sale or resale of the Stock.
(u) The conditions for the Company's use of Form S-3 for filing the
Registration Statement, as set out in the general instructions to such
form, have been satisfied.
(v) Neither the Company nor any of its Subsidiaries is an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "1940 Act"), or is subject to regulation as an "investment
company" under the 1940 Act.
(w) The Company is exempt from registration and all other regulations
and requirements of the Public Utility Holding Company Act of 1935, as
amended (the "1935 Act"), and the rules and regulation promulgated
thereunder, other than from Section 9(a)(2) thereof, pursuant to Section
3(a)(1) of the 1935 Act. Illinois Power Company, a wholly-owned Subsidiary
of the Company, is regulated as a public utility in the State of Illinois
and in no other state.
2. Purchase of the Stock by the Underwriter. (a) Subject to the terms and
conditions and upon the basis of the representations and warranties herein set
forth, the Company hereby agrees to sell the Firm Stock to the Underwriter, and
the Underwriter agrees to purchase at a price of $19.75 per share, the Firm
Stock. The Underwriter agrees to offer the Firm Stock to the public as set forth
in the Prospectus.
(b) The Company hereby grants to the Underwriter an option to purchase
from the Company, solely for the purpose of covering over-allotments in the
sale of Firm Stock, all or any portion of the Option Stock for a period of
thirty (30) days from the date hereof at the purchase price per share set
forth above.
3. Delivery of and Payment for Shares. Delivery of the Firm Stock and the
Option Stock, if the option to purchase the same is exercised on or before the
third Business Day (as defined in Section 12 hereof) prior to the First Closing
Date, shall be made in book-entry form through the facilities of The Depository
Trust Company, New York, New York ("DTC") at such place or places as mutually
may be agreed upon by the Company and the Underwriter, in each case at 10:00
A.M., New York City time, on the fourth full Business Day following the date of
this Agreement (December 26, 2001) or on such later date as shall be determined
by you and the Company (the "First Closing Date").
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The option to purchase Option Stock granted in Section 2 hereof may be
exercised during the term thereof by written notice to the Company from the
Underwriter. Such notice shall set forth the aggregate number of shares of
Option Stock as to which the option is being exercised and the time and date,
not earlier than either the First Closing Date or the second Business Day after
the date on which the option shall have been exercised nor later than the fifth
Business Day after the date of such exercise, as determined by the Underwriter,
when the Option Stock is to be delivered (the "Option Closing Date"). Delivery
and payment for such Option Stock shall be made at the offices set forth above
for delivery and payment of the Firm Stock. The First Closing Date and the
Option Closing Date are herein individually referred to as the "Closing Date"
and collectively referred to as the "Closing Dates."
Delivery for the Stock to be sold by the Company shall be made to you
through the facilities of DTC by the Company, for the account of the
Underwriter, against payment of the purchase price therefor by wire transfer in
immediately available funds to the order of the Company. Time shall be of the
essence, and delivery of certificates for the Stock at the time and place
specified pursuant to this Agreement is a further condition to the obligations
of the Underwriter.
4. Covenants of the Company. The Company covenants and agrees with the
Underwriter that:
(a) If the Effective Date is on or before the date of this Agreement,
the Company shall comply with the provisions of and make all requisite
filings with the Commission pursuant to Rule 424(b) not later than the
Commission's close of business on the second Business Day following the
execution and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) of the Rules and Regulations. The
Company shall advise the Underwriter promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed. The Company shall notify the Underwriter
promptly of any request by the Commission for any amendment of or supplement
to the Registration Statement or the Prospectus or for additional
information; the Company shall prepare and file with the Commission,
promptly upon request of the Underwriter, any amendments or supplements to
the Registration Statement or the Prospectus which, in their opinion, may be
necessary or advisable in connection with the distribution of the Stock; and
the Company shall not file any amendment or supplement to the Registration
Statement or the Prospectus or file any document under the Exchange Act
before the termination of the offering of the Stock by the Underwriter if
such document would be deemed to be incorporated by reference into the
Prospectus, which filing is not consented to by the Underwriter after
reasonable notice thereof, such consent not to be unreasonably withheld or
delayed. The Company shall advise the Underwriter promptly of the issuance
by the Commission or any State or other regulatory body of any stop order or
other order suspending the effectiveness of the Registration Statement,
suspending or preventing the use of any Preliminary Prospectus or the
Prospectus or suspending the qualification of the Stock for offering or sale
in any jurisdiction, or of the institution of any proceedings for any such
purpose; and the Company shall use its best efforts to prevent the issuance
of any stop order or other such order and, should a stop order or other such
order be issued, to obtain as soon as possible the lifting thereof.
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(b) The Company shall furnish to the Underwriter and to counsel for the
Underwriter such number of conformed copies of the Registration Statement,
as originally filed and each amendment thereto (excluding exhibits other
than this Agreement), the Prospectus and all amendments and supplements to
any of such documents (including any document filed under the Exchange Act
and deemed to be incorporated by reference in the Preliminary Prospectus or
Prospectus), in each case as soon as available and in such quantities as
the Underwriter may from time to time reasonably request.
(c) Within the time during which the Prospectus relating to the Stock is
required to be delivered under the Securities Act, the Company shall comply
with all requirements imposed upon it by the Securities Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to time
in force, so far as is necessary to permit the continuance of sales of or
dealings in the Stock as contemplated by the provisions hereof and by the
Prospectus. If during such period any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend
the Registration Statement or supplement the Prospectus or file any
document to comply with the Securities Act, the Company shall promptly
notify the Underwriter and shall, subject to Section 4(a) above, amend the
Registration Statement or supplement the Prospectus or file any document
(at the expense of the Company) so as to correct such statement or omission
or to effect such compliance.
(d) The Company shall take or cause to be taken all necessary action and
furnish to whomever you may direct such information as may be required in
qualifying the Stock for offering and sale under the laws of such
jurisdictions as the Underwriter shall designate, and to continue such
qualifications in effect for as long as may be necessary for the
distribution of the Stock; except that in no event shall the Company be
obligated in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction where
it is not currently so subject.
(e) As soon as practicable, the Company shall make generally available
to its security holders (and shall deliver or make available to you) an
earnings statement satisfying the requirements of Section 11(a) of the
Securities Act and Rule 158 of the Rules and Regulations.
(f) Whether or not this Agreement becomes effective or is terminated or
the sale of the Stock to customers of the Underwriter is consummated, the
Company shall pay or cause to be paid (A) all fees and expenses (including,
without limitation, all registration and filing fees and fees and expenses
of the Company's accountants but excluding fees and expenses of counsel for
the Underwriter) incurred in connection with the preparation, printing,
filing, delivery and shipping of the Registration Statement (including the
financial statements therein and all amendments and exhibits thereto), each
Preliminary Prospectus, the Prospectus, and any amendments or supplements
of the foregoing and any documents incorporated by reference into any of
the foregoing and the copying, delivery and shipping of this Agreement and
Blue Sky Memoranda, (B) all fees and expenses incurred in connection with
the preparation and delivery to the Underwriter
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of the Stock (including the cost of printing the Stock certificates), (C)
all filing fees and fees and disbursements of counsel to the Underwriter
incurred in connection with the qualification of the Stock under state
securities or Blue Sky laws as provided in Section 4(d) hereof, and (D) all
other costs and expenses incident to the performance of its obligations
hereunder for which provision is not otherwise made in this Section. It is
understood, however, that, except as provided in this Section, Section 6
and Section 7 hereof, the Underwriter shall pay all of its own costs and
expenses, including the fees of its counsel and any advertising expenses
incurred in connection with any offers it may make. If the sale of the
Stock provided for herein is not consummated by reason of acts of the
Company or changes in circumstances of the Company pursuant to Section 7
hereof which prevent this Agreement from becoming effective, or by reason
of any failure, refusal or inability on the part of the Company to perform
any agreement on its part to be performed or because any other condition of
the Underwriter's obligations hereunder is not fulfilled or if the
Underwriter shall decline to purchase the Stock for any reason permitted
under this Agreement, the Company shall reimburse the Underwriter for all
reasonable out-of-pocket disbursements (including fees and disbursements of
counsel) incurred by the Underwriter in connection with any investigation
or preparation made by them in respect of the marketing of the Stock or in
contemplation of the performance by them of their obligations hereunder.
(g) During the period of one year from the First Closing Date, the
Company shall furnish or make available to the Underwriter, copies of all
reports or other communications furnished to stockholders and copies of any
reports or financial statements furnished to or filed with the Commission
or the New York Stock Exchange (the "NYSE") or any other national
securities exchange or association on which any class of securities of the
Company is quoted or listed.
(h) Until termination of the offering of the Stock, the Company shall
timely file all documents and amendments to previously filed documents
required to be filed by it pursuant to Section 12, 13, 14 or 15(d) of the
Exchange Act.
(i) The Company shall apply the net proceeds from the sale of the Stock
as set forth in the Prospectus.
(j) The Company shall use its best efforts to list, subject to notice of
issuance, the Stock on The New York Exchange.
(k) For a period of 60 days from the date of the Prospectus, the Company
agrees not to, directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock, shares of
the Company's Class B Common Stock, par value $.01 per share (the "Class B
Common Stock) or securities convertible into or exchangeable for Common
Stock or Class B Common Stock (other than (A) the Stock, (B) shares issued
pursuant to employee benefit or stock purchase plans, stock option plans or
other employee compensation plans or pursuant to currently outstanding
options, warrants or rights, (C) shares or such securities issued pursuant
to any merger, acquisition or other business combination transaction or (D)
shares of Class B Common Stock issued to ChevronTexaco Corp. pursuant to
existing convertible securities or the existing
10
shareholder agreement), or sell or grant options, rights or warrants with
respect to any shares of Common Stock or Class B Common Stock or securities
convertible into or exchangeable for Common Stock or Class B Common Stock
(other than (A) the grant of options pursuant to option plans approved by
the Company's board of directors and (B) the issuance of options, rights or
warrants pursuant to any merger, acquisition or other business combination
transaction), or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether any
such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or otherwise, in each
case without the prior written consent of Xxxxxx Brothers Inc.; and to
cause Xxxxx Xxxxxx, Xxxxx Xxxxxxxxx and Xxxxxxx Xxxxxxxx to furnish to the
Underwriter, prior to the First Closing Date, a letter or letters,
substantially in the form of Exhibit B.
5. Conditions of Underwriter's Obligations. The obligations of the
Underwriter hereunder are subject to the accuracy, as of the date hereof and
each Closing Date (as if made at the applicable Closing Date), of the
representations and warranties of the Company contained herein, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission in a timely
fashion in accordance with Section 4(a) hereof, the Registration Statement
and all post-effective amendments to the Registration Statement shall have
become effective, all filings required by Rule 424 and Rule 430A of the
Rules and Regulations shall have been made and no such filings shall have
been made without the consent of the Underwriter; no stop order suspending
the effectiveness of the Registration Statement or any amendment or
supplement thereto or suspending the qualification of the Stock for offering
or sale in any jurisdiction shall have been issued; no proceedings for the
issuance of any such order shall have been initiated or threatened; and any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
disclosed to the Underwriter and complied with to their satisfaction.
(b) The Underwriter shall not have been advised by the Company or shall
have discovered and disclosed to the Company that the Registration Statement
or the Prospectus or any amendment or supplement thereto contains an untrue
statement of fact which in the opinion of the Underwriter, or in the opinion
of counsel to the Underwriter, is material, or omits to state a fact which,
in the opinion of the Underwriter, or in the opinion of counsel to the
Underwriter, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) On such Closing Date, the Underwriter shall have received from Xxxxx
Xxxxx L.L.P., counsel for the Underwriter, such opinion or opinions with
respect to the issuance and sale of the Stock and other related matters as
the Underwriter may reasonably request and such counsel shall have received
such documents and information as they request to enable them to pass upon
such matters.
(d) On such Closing Date there shall have been furnished to the
Underwriter the opinion (addressed to the Underwriter) of Xxxxxx & Xxxxxx
L.L.P., counsel for the
11
Company, dated such Closing Date and in form and substance satisfactory to
the Underwriter, to the effect that:
(i) The Company has been duly incorporated and is validly existing
and in good standing as a corporation under the laws of the
jurisdiction of its incorporation, with full corporate power and
authority to own, lease and operate its properties and conduct its
business as described in the Prospectus. To the knowledge of such
counsel, the Company is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the business
conducted by it or the location of the properties owned, leased or
operated by it makes such qualification necessary (except where the
failure to so qualify would not, individually or in the aggregate, have
a material adverse effect on the condition (financial or other),
results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole).
(ii) To the best of such counsel's knowledge, neither the filing
of the Registration Statement nor the offering or sale of the Stock as
contemplated by this Agreement gives rise to any rights, other than
those which have been waived or satisfied, for or relating to the
registration of any securities of the Company or any of its
Subsidiaries. The authorized equity capitalization of the Company as of
the date of the most recent balance sheet included or incorporated by
reference in the Prospectus is as set forth in the Prospectus, and the
shares of Stock being delivered on such Closing Date have been duly and
validly authorized and issued, are fully paid and non-assessable
(assuming payment for and delivery of the Stock in accordance with this
Agreement) and conform to the description thereof contained in the
Prospectus. The Company has all requisite corporate power and authority
to issue, sell and deliver the Stock in accordance with and upon the
terms and conditions set forth in this Agreement and in the
Registration Statement and Prospectus.
(iii) Neither the execution or delivery of this Agreement nor
consummation of the transactions contemplated hereby will result in a
breach or violation of, or constitute a default under, the articles of
incorporation or by-laws of the Company, nor will the performance by
the Company of its obligations hereunder violate any law, rule,
administrative regulation or (to the knowledge of such counsel) decree
(except that such counsel need not express an opinion as to federal or
state securities or Blue Sky laws with respect to this subparagraph) of
any court or any governmental agency or body having jurisdiction over
the Company, its Subsidiaries or their respective properties. Except
for permits, consents, approvals and similar authorizations required
under the securities or Blue Sky laws of certain jurisdictions and
except for such permits, consents, approvals and authorizations which
have been obtained, no permit, consent, approval, authorization or
order of any court, governmental agency or body or financial
institution is required of the Company for the valid authorization,
issuance, sale and delivery of the Stock.
(iv) The Company has all necessary corporate power and authority
to execute and deliver this Agreement and perform its obligations
hereunder. This Agreement has been duly authorized, executed and
delivered by the Company.
12
(v) The Registration Statement and all post-effective amendments
thereto have become effective under the Securities Act and, to the
knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending before or threatened
by the Commission. To the knowledge of such counsel, no order of the
Commission directed to any document incorporated by reference in the
Registration Statement has been issued, and no challenge by appropriate
proceedings has been made to the accuracy or adequacy of any document
incorporated by reference in the Registration Statement.
(vi) The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company, as of their
respective effective or issue dates, complied as to form in all
material respects with the applicable requirements of the Securities
Act and the Rules and Regulations (except that no opinion need be
expressed as to the financial statements or notes thereto contained
therein or omitted therefrom and that such opinion may be qualified as
described in clause (iii) of the paragraph immediately preceding
subsection 5(e) hereof).
(vii) There are no legal proceedings pending or threatened against
the Company or any of its Subsidiaries to which such counsel has given
substantive attention or in which such counsel has been engaged to
represent the Company or any of its Subsidiaries that are required to
be disclosed in the Prospectus and are not disclosed (except that and
that such opinion may be qualified as described in clause (iii) of the
paragraph immediately preceding subsection 5(e) hereof).
(viii) Neither the Company nor any of its Subsidiaries is an
"investment company" within the meaning of the 1940 Act, or is subject
to regulation as an "investment company" under the 1940 Act.
(ix) The Company is exempt from registration and all other
regulations and requirements of the 1935 Act and the rules and
regulations promulgated thereunder, other than from Section 9(a)(2)
thereof, pursuant to Section 3(a)(1) of the 1935 Act. Illinois Power
Company, a wholly-owned subsidiary of the Company, is regulated as a
public utility in the State of Illinois and in no other state.
Such opinion shall also contain a statement that such counsel has no
reason to believe that (i) the Registration Statement, as of the Effective
Time, or any amendment thereto (other than the financial statements and
notes thereto contained therein, as to which such counsel need not
comment), at the time it became effective, including in each case any
document filed under the Exchange Act and incorporated by reference
therein, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading, or (ii) the Prospectus or
any supplement or amendment thereto (other than the financial statements
and notes thereto contained therein, as to which such counsel need not
comment), including in each case any document filed under the Exchange Act
and incorporated by reference therein, on such Closing Date and at the time
such Prospectus or supplement or amendment thereto was issued contains or
contained any untrue
13
statement of a material fact or omits or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may (i) state that its opinion
is limited to matters governed by the Federal laws of the United States of
America, the laws of the State of Texas and the General Corporation Law of
the State of Delaware and that such counsel is not admitted in the State of
Illinois, (ii) rely (to the extent such counsel deems proper and specifies
in its opinion), as to matters involving the application of the laws of the
State of Illinois upon the opinion of other counsel of good standing,
provided that such other counsel is satisfactory to counsel for the
Underwriter and furnishes a copy of its opinion to the Underwriter and
(iii) exclude any opinion, statement or responsibility for the disclosures
contained in the Prospectus with respect to any matters pending between the
Company and Enron Corp. and their respective affiliates, including, without
limitation the accuracy and adequacy of any disclosure relating to the
Agreement and Plan of Merger dated as of November 9, 2001 by and among the
Company, Stanford, Inc., Sorin, Inc., Badin, Inc. and Enron Corp., any
litigation between such parties and any matters arising out of or related
thereto.
(e) On such Closing Date there shall have been furnished to you the
opinion (addressed to the Underwriter) of the Executive Vice President and
General Counsel of the Company, dated such Closing Date and in form and
substance satisfactory to the Underwriter, to the effect that:
(i) Each of the Company's Significant Subsidiaries has been duly
incorporated or formed as a corporation or partnership, as applicable,
and is validly existing as a corporation, a general partnership or a
limited partnership under the laws of its jurisdiction of incorporation
or formation (and each of the Significant Subsidiaries that is a
corporation or a limited partnership is in good standing under the laws
of its jurisdiction of incorporation or formation), with full corporate
or partnership (as applicable) power and authority to own, lease and
operate its properties and conduct its business as described in the
Prospectus.
(ii) To the knowledge of such counsel, except as disclosed in the
Prospectus, all of the outstanding shares of capital stock or
partnership interests (or such percentage of the partnership interest as
is set forth in the respective partnership agreements) of each
Significant Subsidiary are owned directly or indirectly by the Company,
free and clear of any perfected security interest, except that the
shares of capital stock of Dynegy Midwest Generation, Inc. have been
pledged in connection with a structured financing.
(iii) Neither the execution or delivery of this Agreement nor
consummation of the transactions contemplated hereby will result in a
breach or violation of, or constitute a default under, the articles of
incorporation, by-laws, partnership agreement or other governing
documents of the Significant Subsidiaries or any agreement, indenture or
other instrument filed as an exhibit to the Registration Statement or
any document incorporated by reference therein.
14
(iv) Each document incorporated by reference in the Registration
Statement as filed under the Exchange Act complied when so filed as to
form in all material respects with the applicable requirements of the
Exchange Act and the rules and regulations of the Commission thereunder
(except that no opinion need be expressed as to the financial statements
or notes thereto contained therein).
(v) The descriptions in the Registration Statement and Prospectus
of statutes, regulations, legal or governmental proceedings, to the
extent they constitute matters of law and summaries of legal matters,
are accurate in all material respects. To the knowledge of such counsel,
there are no contracts or documents required to be described in the
Registration Statement or Prospectus or to be filed as exhibits thereto
which are not described or filed as required.
(f) There shall have been furnished to you a certificate, dated
such Closing Date and addressed to you, signed by the Chairman of the Board
or the President or any Senior Vice President and by the Chief Financial
Officer of the Company to the effect that: (i) the representations and
warranties of the Company contained in this Agreement are true and correct,
as if made at and as of such Closing Date, and the Company has complied with
all the agreements and satisfied all the conditions on its part to be
complied with or satisfied at or prior to such Closing Date; (ii) no stop
order suspending the effectiveness of the Registration Statement has been
issued, and no proceeding for that purpose has been initiated or, to the
best of their knowledge, threatened; (iii) all filings required by Rule
424(b) and Rule 430A of the Rules and Regulations have been made; (iv) the
signers of said certificate have examined the Registration Statement and the
Prospectus, and any amendments or supplements thereto (including any
documents filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus), and such documents contain all statements
and information required to be included therein, and do not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading; (v) since the Effective Date there has occurred no event
required to be set forth in an amendment or supplement to the Registration
Statement or the Prospectus which has not been so set forth and there has
been no document required to be filed under the Exchange Act and the Rules
and Regulations that upon such filing would be deemed to be incorporated by
reference into the Prospectus that has not been so filed and (vi) no event
contemplated by subsection (g) of this Section 5 shall have occurred.
(g) Since the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereto) and in the Prospectus
(exclusive of any supplement thereto), neither the Company nor any of its
Subsidiaries shall have sustained any loss by fire, flood, accident or other
calamity, or shall have become a party to or the subject of any litigation,
which is materially adverse to the Company and its Subsidiaries taken as a
whole, nor shall there have been a material adverse change in the general
affairs, operations, business, prospects, key personnel, capitalization,
financial condition or net worth of the Company and its Subsidiaries taken
as a whole, regardless of whether arising in the ordinary course of
business, which loss, litigation or change, in the judgement of the
Underwriter, shall render it impractical or inadvisable to proceed with the
payment for and delivery of the Stock.
15
(h) On the date hereof and such Closing Date you shall have received
letters from Xxxxxx Xxxxxxxx LLP dated respectively the date hereof and such
Closing Date and addressed to you, confirming that they are independent
certified public accountants within the meaning of the Securities Act and
the applicable published Rules and Regulations, and stating, as of the date
of such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given or incorporated in the Prospectus as of a date not more
than five days prior to the date of such letter, provided that such date
shall be after the date of the Prospectus), the conclusions and findings of
such firm with respect to the financial information and other matters
covered by its letter delivered to you concurrently with the execution of
this Agreement, and, with respect to the letter delivered on such Closing
Date, confirming the conclusions and findings set forth in such prior
letter.
(i) The Stock shall be duly listed, subject to notice of issuance, on
The New York Stock Exchange.
(j) The Underwriter shall have been furnished by the Company such
additional documents and certificates as you or counsel for the Underwriter
may reasonably request.
(k) The Underwriter shall have received executed Lock-Up Letter
Agreements, in the form of Exhibit B hereto from Xxxxx Xxxxxx, Xxxxx
Xxxxxxxxx and Xxxxxxx Xxxxxxxx.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Underwriter and to counsel for the Underwriter. The Company
shall furnish to the Underwriter conformed copies of such opinions,
certificates, letters and other documents in such number as they shall
reasonably request. If any of the conditions specified in this Section 5 shall
not have been fulfilled when and as required by this Agreement, this Agreement
and all obligations of the Underwriter hereunder may be canceled at, or at any
time prior to, each Closing Date, by the Underwriter. Any such cancellation
shall be without liability of the Underwriter to the Company. Notice of such
cancellation shall be given to the Company in writing, or by telegraph or
telephone and confirmed in writing.
6. Indemnification and Contribution. (a) The Company shall indemnify and
hold harmless the Underwriter from and against any loss, claim, damage or
liability (or any action in respect thereof), joint or several, to which such
Underwriter may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage or liability (or action in respect thereof) arises
out of or is based upon (i) any untrue statement or alleged untrue statement
made by the Company in Section 1 hereof, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or the Registration Statement or
Prospectus as amended or supplemented, or (iii) the omission or alleged omission
to state in the Registration Statement, any Preliminary Prospectus, the
Prospectus or the Registration Statement or Prospectus as amended or
supplemented a material fact required to be stated therein or necessary to make
the statements therein not misleading; and shall reimburse the Underwriter
promptly after receipt of invoices from such Underwriter for any legal or other
expenses as reasonably incurred by such Underwriter in connection with
investigating, preparing to defend or defending against or appearing as a third-
party witness in
16
connection with any such loss, claim, damage, liability or action,
notwithstanding the possibility that payments for such expenses might later be
held to be improper, in which case such payments shall be promptly refunded;
provided, however, that the Company shall not be liable under this paragraph
6(a) in any such case to the extent, but only to the extent, that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter expressly for use in the preparation of the
Registration Statement, any Preliminary Prospectus, the Prospectus or the
Registration Statement or Prospectus as amended or supplemented; provided,
further that with respect to any untrue statement or omission or alleged untrue
statement or omission made in any Preliminary Prospectus, which untrue statement
or omission or alleged untrue statement or omission in such Preliminary
Prospectus was corrected in the Prospectus, the indemnity agreement contained in
this paragraph 6(a) shall not inure to the benefit of the Underwriter (or any
person controlling such Underwriter) to the extent that any such loss, claim,
damage or liability results from the fact that a copy of the Prospectus was not
sent or given to the person asserting any such losses, claims, damages or
liabilities at or prior to the written confirmation of the sale of the Stock
concerned to such person by such Underwriter (provided that the Company shall
have complied with the provisions of Section 4(a) and (c) hereof and such
Underwriter shall have been provided with the number of copies of such
Prospectus requested by such Underwriter in a timely manner) and it is
judicially determined that such delivery was required under the Securities Act
and was not so made.
(b) The Underwriter shall indemnify and hold harmless the Company against
any loss, claim, damage or liability (or any action in respect thereof) to which
the Company may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage or liability (or action in respect thereof) arises
out of or is based upon (i) any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or the Registration Statement or Prospectus as
amended or supplemented, or (ii) the omission or alleged omission to state in
the Registration Statement, any Preliminary Prospectus, the Prospectus or the
Registration Statement or Prospectus as amended or supplemented a material fact
required to be stated therein or necessary to make the statements therein not
misleading and shall reimburse the Company promptly after receipt of invoices
from the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating, preparing to defend or defending
against or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action notwithstanding the possibility that payments
for such expenses might later be held to be improper, in which case such
payments shall be promptly refunded; provided, however, that such
indemnification or reimbursement shall be available in each such case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by the Underwriter
expressly for use therein.
(c) Promptly after receipt by any indemnified party under subsection (a) or
(b) above of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to so notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 6 except to the extent it has
been prejudiced in any material respect by such failure or from any liability
which it may have to an indemnified party otherwise
17
than under this Section 6. If any such claim or action shall be brought against
any indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under subsection
(a) or (b) above for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; except that the Underwriter shall have the right to
employ counsel to represent such Underwriter who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by such
Underwriter against the Company under such subsection if (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Underwriter shall have been advised by counsel that there may be one or more
legal defenses available to the Underwriter which are different from or
additional to those available to the Company and in the reasonable judgment of
such counsel it is advisable for the Underwriter to employ separate counsel or
(iii) the Company has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the Underwriter, in which event the fees and
expenses of such separate counsel shall be paid by the Company. No indemnifying
party shall (i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding,
or (ii) be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with the consent of the indemnifying party or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 6 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriter on the other hand from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Underwriter on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriter on the other hand shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriter, in each case as set forth
on the cover page or the Plan of Distribution Section of the Prospectus.
Relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material
18
fact relates to information supplied by the Company or the Underwriter and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Underwriter agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were to be determined by pro rata allocation or
by any other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this subsection (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities (or actions in respect thereof) referred to in the first sentence
of this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating,
preparing to defend or defending against any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), the Underwriter shall not be required to contribute any amount
in excess of the amount by which the total price at which the Stock underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. Each party
entitled to contribution agrees that upon the service of a summons or other
initial legal process upon it in any action instituted against it in respect to
which contribution may be sought, it shall promptly give written notice of such
service to the party or parties from whom contribution may be sought, but the
omission so to notify such party or parties of any such service shall not
relieve the party from whom contribution may be sought for any obligation it may
have hereunder or otherwise (except as specifically provided in subsection (c)
above).
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability that the Company may otherwise have, and shall extend,
upon the same terms and conditions set forth in this Section 6, to the officers
and directors of the Underwriter and each person, if any, who controls the
Underwriter within the meaning of the Securities Act; and the obligations of the
Underwriter under this Section 6 shall be in addition to any liability that the
Underwriter may otherwise have, and shall extend, upon the same terms and
conditions, to each director of the Company (including any person who, with his
or her consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Securities Act.
7. Effective Date and Termination. (a) This Agreement shall become effective
(i) if the Effective Date is on or before the date of this Agreement, at 11:00
A.M., New York City time, on the next Business Day following the date hereof,
(ii) if the Effective Date is after the date of this Agreement, at 11:00 A.M.,
New York City time, on the first full Business Day following the Effective Date
or (iii) at such earlier time after the Registration Statement becomes effective
as you shall first release the Firm Stock for sale to the public. You shall
notify the Company immediately after you have taken any action which causes this
Agreement to become effective. Until this Agreement is effective, it may be
terminated by the Company by giving notice as hereinafter provided to you, or by
you by giving notice as hereinafter provided to the Company except that the
provisions of Section 4(f) and Section 6 hereof shall at all times be effective.
For purposes of this Agreement, the release of the initial public offering of
the Firm Stock for sale to the public shall be deemed to have been made when the
Underwriter releases,
19
by telegram or otherwise, firm offers of the Firm Stock to securities dealers or
release for publication a newspaper advertisement relating to the Firm Stock,
whichever occurs first.
(b) Until each Closing Date, this Agreement may be terminated by the
Underwriter by giving notice as hereinafter provided to the Company if (i) the
Company shall have failed, refused or been unable, at or prior to such Closing
Date, to perform any agreement on its part to be performed hereunder, (ii) any
other condition of the Underwriter's obligation hereunder is not fulfilled,
(iii) trading in the Common Stock of the Company shall have been suspended by
the Commission or the NYSE or trading in securities generally on the NYSE shall
have been suspended or minimum prices shall have been established on such
exchange by the Commission or such exchange or other regulatory body or
governmental authority having jurisdiction which, in the judgment of the
Underwriter, make it inadvisable or impracticable to proceed with the offering
or delivery of the Stock, (iv) a banking moratorium is declared by either
federal or New York state authorities, (v) the United States becomes engaged in
hostilities or there is an escalation of hostilities involving the United States
or there is a declaration of a national emergency or war by the United States
which, in the judgment of the Underwriter, makes it inadvisable or impracticable
to proceed with the offering or delivery of the Stock or (vi) there shall have
been such a material adverse change in general economic, political or financial
conditions, or the effect of international conditions on the financial markets
in the United States shall be such, as to, in the judgment of the Underwriter,
make it inadvisable or impracticable to proceed with the offering or delivery of
the Stock. Any termination of this Agreement pursuant to this Section 7 shall
be without liability on the part of the Company or the Underwriter, except as
otherwise provided in Sections 4(f) and 6 hereof.
Any notice referred to above may be given at the address specified in
Section 9 hereof in writing or by telegraph or telephone, and if by telegraph or
telephone, shall be immediately confirmed in writing.
8. Survival of Certain Provisions. The agreements contained in Section 4
hereof and the representations, warranties and agreements of the Company
contained in Section 1 hereof shall survive the delivery of the Stock to the
Underwriter hereunder and shall remain in full force and effect, regardless of
any termination or cancellation of this Agreement or any investigation made by
or on behalf of any indemnified party.
9. Notices. Except as otherwise provided in the Agreement, (a) whenever
notice is required by the provisions of this Agreement to be given to the
Company, such notice shall be in writing or by facsimile transaction addressed
to the Company at 0000 Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Attention:
General Counsel; (b) whenever notice is required by the provisions of this
Agreement to be given to the Underwriter, such notice shall be in writing or by
facsimile transmission addressed to the Underwriter c/x Xxxxxx Brothers Inc.,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Registration
Department.
10. Information Furnished by Underwriter. The written information furnished
by or on behalf of the Underwriter referred to in paragraph (b) of Section 1
hereof and in paragraphs (a) or (b) of Section 6 hereof shall be confirmed in a
letter from the Underwriter to be provided on the First Closing Date.
11. Parties. This Agreement shall inure to the benefit of and be binding
upon the Underwriter, the Company and their respective successors. This
Agreement and the terms and
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provisions hereof are for the sole benefit of only those persons, except that
(a) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of the
person or persons, if any, who control the Underwriter within the meaning of
Section 15 of the Securities Act and (b) the indemnity agreement of the
Underwriter contained in Section 6 hereof shall be deemed to be for the benefit
of directors of the Company, officers of the Company who signed the Registration
Statement and any person controlling the Company within the meaning of Section
15 of the Securities Act. Nothing in this Agreement shall be construed to give
any person, other than the persons referred to in this paragraph, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
12. Definition of "Business Day" and "Subsidiary." For purposes of this
Agreement, (a) "Business Day" means any day on which the New York Stock
Exchange, Inc. is open for trading, other than any day on which commercial banks
are authorized or required to be closed in New York City or Houston, Texas, and
(b) "Subsidiary" has the meaning set forth in Rule 405 of the Rules and
Regulations and includes both partnerships and corporations.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to the
conflicts of laws provisions thereof.
14. Headings. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
15. Counterparts. This Agreement may be signed in one or more counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same agreement.
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Please confirm, by signing and returning to us two counterparts of this
Agreement, that you are acting on behalf of yourselves and the Underwriter and
that the foregoing correctly sets forth the Agreement among the Company and the
Underwriter.
Very truly yours,
Dynegy Inc.
By: /s/ Xxxxx X. Xxxxxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxxxxx
Title: Senior Vice President
and Deputy General Counsel
Confirmed and accepted as of
the date first above mentioned
Xxxxxx Brothers Inc.
By /s/ Xxxxx Xxxxxx
-------------------------------
Name: Xxxxx Xxxxxx
-------------------------
Authorized Signatory
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EXHIBIT A
Underwriting Agreement dated December 19, 2001
As used in the Underwriting Agreement, the "Significant Subsidiaries" of the
Company are as follows:
Dynegy Holdings Inc.
Dynegy Power Corp.
Dynegy Global Energy, Inc.
Dynegy Upper Holdings, L.L.C.
DMT Holdings, Inc.
DMS LP, Inc.
Dynegy Midstream Services, Limited Partnership
Dynegy Liquids G.P., L.L.C.
Dynegy Liquids Marketing and Trade
Dynegy Marketing and Trade
Dynegy Midwest Generation, Inc.
Illinova Corporation
Illinois Power Company
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EXHIBIT B
LOCK-UP LETTER AGREEMENT
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The undersigned understands that you propose to enter into an Underwriting
Agreement (the "Underwriting Agreement") providing for the purchase by you (the
"Underwriter") of shares (the "Shares") of Class A Common Stock, no par value
(the "Common Stock"), of Dynegy Inc., an Illinois corporation (the "Company"),
and that the Underwriter proposes to reoffer the Shares to the public (the
"Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriter, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc., the undersigned will not, directly or indirectly, (1) offer for
sale, sell, pledge, or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock
(including, without limitation, shares of Common Stock that may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common Stock
that may be issued upon exercise of any option or warrant) or securities
convertible into or exchangeable for Common Stock owned by the undersigned on
the date of execution of this Lock-Up Letter Agreement or on the date of the
completion of the Offering, or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, for a period of 60 days
after the date of the final Prospectus relating to the Offering; provided that
the foregoing restriction shall not apply to intrafamily transfers, transfers to
trusts for estate planning purposes and bona fide gifts.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Company notifies you that it does not intend
to proceed with the Offering, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Shares, I will be released from my obligations under this
Lock-Up Letter Agreement.
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The undersigned understands that the Company and the Underwriter will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned
shall be binding upon the heirs, personal representatives, successors and
assigns of the undersigned.
Very truly yours,
_______________________
Dated:_________________
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