EXHIBIT 1.1
8,500,000 SHARES
DYNEGY INC.
COMMON STOCK
UNDERWRITING AGREEMENT
April 17, 2000
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇, Sachs & Co.,
ABN AMRO Rothschild
a division of ABN AMRO Incorporated
Banc of America Securities LLC
CIBC World Markets Corp.
Credit Suisse First Boston
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
PaineWebber Incorporated
As Representatives of the several
Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Dynegy Inc., an Illinois corporation (the "Company"), and certain
stockholders of the Company named in Schedule 2 hereto (the "Selling
Stockholders"), propose to sell an aggregate of 8,500,000 shares (the "Firm
Stock") of the Company's Common Stock, no par value, (the "Common Stock"). Of
the 8,500,000 shares of the Firm Stock, 3,325,000 are being sold by the Company
and 5,175,000 by the Selling Stockholders. In addition, the Company proposes to
grant to the Underwriters named in Schedule 1 hereto (the "Underwriters") an
option to purchase up to an additional 1,100,000 shares of the Common Stock on
the terms and for the purposes set forth in Section 3 (the "Option Stock"). The
number of shares to be sold by each Selling Stockholder is set forth opposite
such Selling Stockholder's name in Schedule 2 hereto. The Firm Stock and the
Option Stock, if any, are hereinafter collectively called the "Stock." This
agreement (this "Agreement") is to confirm the agreement concerning the purchase
of the Stock from the Company and the Selling Stockholders by the Underwriters.
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, each Underwriter that:
(a) A registration statement on Form S-3 (File No. 333-31394) with respect
to the Stock has (i) been prepared by the Company in conformity with the
requirements of the Securities Act of
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1933, as amended (the "Securities Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under the
Securities Act, and (iii) become effective under the Securities Act and is not
proposed to be amended by amendment or post-effective amendment. No stop order
suspending the effectiveness of such registration statement or any Rule 462(b)
registration statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission. Copies of such
registration statement as amended to date have been delivered by the Company to
you as the representatives (the "Representatives") of the Underwriters. For
purposes of this Agreement, "Effective Time" means the most recent date and the
time as of which such registration statement was declared effective by the
Commission; "Effective Date" means the date of the Effective Time; "Preliminary
Prospectus" means the prospectus included in such registration statement, or
amendments thereof, before such registration statement became effective under
the Securities Act and any prospectus filed with the Commission by the Company
with the consent of the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration statement, as
amended at the Effective Time, including any documents incorporated by reference
therein and all information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations ("Rule 424(b)")
in accordance with Section 7(a) hereof and deemed to be a part thereof as of the
Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; "Prospectus" means the form of prospectus relating to the Stock
(including the prospectus supplement), as first used to confirm sales of the
Stock; and "described in the Prospectus" or "disclosed in the Prospectus" means
described or disclosed, as applicable, in the Prospectus or any document
incorporated by reference therein. If it is contemplated, at the time this
Agreement is executed, that a registration statement will be filed pursuant to
Rule 462(b) under the Securities Act before the offering of the Stock may
commence, the term "Registration Statement" as used in this Agreement includes
such registration statement, as the same may be amended from time to time.
Reference made herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents incorporated by reference therein
as of the date of such Preliminary Prospectus or Prospectus, as the case may be,
and any reference to any amendment or supplement to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any documents filed
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
after the date of such Preliminary Prospectus or Prospectus, as the case may be,
and incorporated by reference in such Preliminary Prospectus or Prospectus. For
purposes of this Section l, all references to the Registration Statement, any
post-effective amendments thereto and the Prospectus shall be deemed to include,
without limitation, any electronically transmitted copies thereof, including,
without limitation, any copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis, and Retrieval system ("▇▇▇▇▇"). 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
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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 through the Representatives by
or on behalf of any Underwriter expressly for inclusion therein. There is no
contract or document required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement or to
a document incorporated by reference into the Registration Statement which is
not described or filed as required.
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, whose report is included or incorporated by
reference in the Prospectus, and Pricewaterhouse Coopers LLP, who has certified
certain financial statements of Illinova Corporation, are each independent
certified public accountants as required by the Securities Act and the Rules and
Regulations. The financial statements (including the related notes and
supporting schedules) included or incorporated by reference in the Registration
Statement, any Preliminary Prospectus and the Prospectus present fairly the
financial condition, results of operations and cash flows of the entities
purported to be shown thereby at the dates and for the periods indicated and
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated and conform in
all material respects with the Rules and Regulations, except as otherwise noted
therein; and the supporting schedules included or incorporated by reference in
the Registration Statement present fairly the information required to be stated
therein.
(d) Each of the Company and its Significant Subsidiaries (as defined in
Exhibit A hereto) has been duly organized or formed and is validly existing in
good standing under the laws of the jurisdiction of its organization or
formation, with full power and authority to own, lease and operate its
properties and conduct its business and to enter into and perform its
obligations under this Agreement; and each of the Company and its Subsidiaries
(as defined in Section 16 hereof), is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the business
conducted by it or the location of the properties owned, leased or operated by
it make such qualification necessary, except where the failure to so qualify
would not, individually or in the aggregate, have a material adverse effect on
the condition (financial or other), results of operations, business or prospects
of the Company and its Subsidiaries taken as a whole.
(e) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description thereof contained in the Prospectus. All of the
outstanding shares of capital stock of each Significant Subsidiary of the
Company that is a corporation have been duly authorized and validly issued and
are fully paid and nonassessable. Except as disclosed in the Prospectus, all of
the outstanding shares of capital stock or partnership interests of each
Significant Subsidiary of the Company are owned directly or indirectly by the
Company, free and clear of any claim, lien, encumbrance, security interest,
restriction upon voting or transfer, preemptive rights or any other claim of any
third party, except such as are described in the Prospectus.
(f) The unissued shares of Stock to be issued and sold by the Company to
the Underwriters 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.
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(g) Except as described in or contemplated by the Registration Statement
and the Prospectus, there has not been any material adverse change in, or
adverse development which, individually or in the aggregate, materially affects
or may materially affect, the condition (financial or other), results of
operations, business or prospects of the Company and its Subsidiaries taken as a
whole from the respective dates as of which information is given in the
Prospectus.
(h) Neither (i) the execution or delivery hereof by the Company, (ii) the
consummation of the transactions contemplated hereby, (iii) the issuance, sale
and delivery of the Stock by the Company nor (iv) compliance by the Company with
all of the provisions of this Agreement will result in a breach or violation of,
or constitute a default under, the certificate of incorporation, by-laws,
partnership agreement or other governing documents of the Company or any of its
Subsidiaries, or any agreement, indenture or other instrument to which the
Company or any of its Subsidiaries is a party or by which any of them is bound,
or to which any of their properties is subject, nor will any such action or the
performance by the Company of its obligations hereunder violate any law, rule,
administrative regulation or decree of any court, or any governmental agency or
body having jurisdiction over the Company, its Subsidiaries or any of their
respective properties, or result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of the Company or any of
its Subsidiaries. Except for permits, consents, approvals and similar
authorizations required under the securities or "Blue Sky" laws of certain
jurisdictions, and except for such permits, consents, approvals and
authorizations which have been obtained, no permit, consent, approval,
authorization or order of, or filing or registration with, any court,
governmental agency or body or financial institution is required in connection
with the execution, delivery and performance of this Agreement by the Company
and the consummation of the transactions contemplated by this Agreement.
(i) There are no contracts, agreements or understandings between the
Company and any person granting such person the right (other than rights which
have been waived or satisfied) to require the Company to file a registration
statement under the Securities Act with respect to any securities of the Company
owned or to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act, except as described in
the Prospectus.
(j) This Agreement has been duly authorized, executed and delivered by the
Company and constitutes the valid and binding agreement of the Company.
(k) Neither the Company nor any of its Subsidiaries (i) is in violation of
its certificate of incorporation or by-laws or other governing documents, (ii)
is in default and no event has occurred which, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any agreement, indenture or other
instrument to which it is a party or by which it is bound or to which any of its
properties is subject, except for any such defaults that would not, individually
or in the aggregate, have a material adverse effect on the condition (financial
or other), results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole, or (iii) is in violation of any law, ordinance,
governmental rule, regulation or court decree to which it or its property may be
subject, except for any such violations that would not, individually or in the
aggregate, have a 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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(l) The Company has all requisite corporate power and authority to issue,
sell and deliver the Stock in accordance with and upon the terms and conditions
set forth in this Agreement and in the Registration Statement and Prospectus.
All corporate action required to be taken by the Company for the authorization,
issuance, sale and delivery of the Stock to be sold by the Company hereunder has
been validly and sufficiently taken.
(m) Each contract, agreement or arrangement to which the Company or any of
its Subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any of its Subsidiaries is
subject, which is material to the condition (financial or other), results of
operations, business or prospects of the Company and its Subsidiaries taken as a
whole, has been duly and validly authorized, executed and delivered by the
Company or its Subsidiary, as applicable; none of such contracts, agreements or
arrangements has been assigned by the Company or any of its Subsidiaries to any
non-affiliated party other than in the ordinary course of business, and the
Company knows of no present condition or fact which would prevent compliance by
the Company or any of its Subsidiaries or any other party thereto with the terms
of any such contract, agreement or arrangement in accordance with its terms in
all material respects, except for any such failures to comply that would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or other), results of operations, business or prospects of
the Company and its Subsidiaries taken as a whole; neither the Company nor any
of its Subsidiaries has any present intention to exercise any right that it may
have to cancel any such contract, agreement or arrangement or otherwise to
terminate its rights and obligations thereunder, and none of them has any
knowledge that any other party to any such contract, agreement or arrangement
has any intention not to render full performance in all material respects as
contemplated by the terms thereof, except for any such cancellations,
terminations or failures to perform that would not, individually or in the
aggregate, result in a material adverse effect on the condition (financial or
other), results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole.
(n) There is no litigation or governmental proceeding to which the Company
or any of its Subsidiaries is a party or to which any property of the Company or
any of its Subsidiaries is subject or which is pending or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries that
could reasonably be expected to, individually or in the aggregate, result in a
material adverse effect on the condition (financial or other), results of
operations, business or prospects of the Company and its Subsidiaries taken as a
whole or which is required to be disclosed in the Prospectus and is not
disclosed.
(o) Neither the Company nor any Subsidiary is in violation of any law,
ordinance, governmental rule or regulation or court decree to which it may be
subject which violation could reasonably be expected to, individually or in the
aggregate with all such violations, have a material adverse effect on the
condition (financial or other), results of operations, business or prospects of
the Company and its Subsidiaries taken as a whole.
(p) The documents incorporated by reference into each Preliminary
Prospectus and the Prospectus, at the time they were or are filed with the
Commission, conform or will conform, as the case may be, with the requirements
of the Securities Act and the Rules and Regulations and the Exchange Act and the
rules and regulations adopted by the Commission thereunder, and did not or will
not, as the case may be, include an untrue statement of a material
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fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(q) Each of the Company and its Subsidiaries owns or possesses, and is
operating in compliance with, all approvals, licenses, permits, certificates,
franchises, easements, consents, orders and other governmental authorizations
and rights necessary to own or lease its properties and conduct its business
(collectively, "Approvals"), except such Approvals as to which the failure to
own, possess or operate in compliance with would not, individually or in the
aggregate, result in a material adverse effect on the condition (financial or
other), results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole ("Material Approvals"); all such Material
Approvals are valid and in full force and effect; and the Company has no reason
to believe that any governmental agency or body is considering limiting,
suspending or revoking any such Material Approval.
(r) From the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, neither the Company nor any of its Subsidiaries has (i) issued,
granted, repurchased, reclassified or exchanged any of their respective
securities (other than in respect of intercompany transactions or pursuant to
employee stock options, the Company's director and key employee stock purchase
plan, the Company's director compensation plan or the Company's savings plan),
(ii) incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any material transaction not in the ordinary course
of business or (iv) entered into any material transaction with an affiliate of
the Company, other than a Subsidiary; and the Company has not declared or paid
any dividend on its capital stock other than the regular quarterly dividend on
its Common Stock (it being understood that the Company's Subsidiary, Illinois
Power Company, has continued to pay dividends on its outstanding preferred
stock).
(s) There has been no storage, disposal, generation, transportation,
handling or treatment of hazardous substances or hazardous wastes by the Company
or any of its Subsidiaries (or to the knowledge of the Company, any of its
predecessors in interest) at, upon or from any of the property now or previously
owned or leased by the Company or any of its Subsidiaries in violation of any
applicable law, ordinance, rule, regulation, order, judgment, decree or permit
or which would require remedial action under any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit, except for any violation or
remedial action which would not, individually or in the aggregate with all such
violations and remedial actions, result in a material adverse effect on the
condition (financial or other), results of operations, business or prospects of
the Company and its Subsidiaries taken as a whole; there has been no material
spill, discharge, leak, emission, injection, escape, dumping or release of any
kind onto such property or into the environment surrounding such property of any
hazardous wastes or hazardous substances due to or caused by the Company or any
of its Subsidiaries, except for any such spill, discharge, leak, emission,
injection, escape, dumping or release which would not, individually or in the
aggregate with all such spills, discharges, leaks, emissions, injections,
escapes, dumpings and releases result in a material adverse effect on the
condition (financial or other), results of operations, business or prospects of
the Company and its Subsidiaries taken as a whole; none of the facilities of the
Company or any of its Subsidiaries is a solid waste facility for purposes of any
applicable environmental law; and the terms "hazardous substances" and
"hazardous wastes" shall have the meanings specified in any applicable local,
state and federal laws or regulations with respect to environmental protection.
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(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. Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder severally represents, warrants and
agrees solely with respect to itself that:
(a) Immediately prior to the First Delivery Date (as defined in Section 5
hereof) such Selling Stockholder will have good and valid title to the shares of
Stock to be sold by such Selling Stockholder hereunder on such date, free and
clear of all liens, encumbrances, equities or claims; and upon deliver of such
shares and payment therefor pursuant hereto, good and valid title to such
shares, free and clear of all liens, encumbrances, equities or claims, will pass
to the several Underwriters.
(b) Such Selling Stockholder has all requisite corporate power and
authority to enter into this Agreement; the execution, delivery and performance
of this Agreement by such Selling Stockholder and the consummation by such
Selling Stockholder of the transactions contemplated hereby will not conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, agreement or instrument to which such
Selling Stockholder is a party or by which such Selling Stockholder is bound or
to which any of the property or assets of such Selling Stockholder is subject,
nor will such actions result in any violation of the provisions of the charter
or by-laws of such Selling Stockholder or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
such Selling Stockholder or the property or assets of such Selling Stockholder;
and, except for the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under applicable state securities laws in connection with the purchase
and distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement by such Selling Stockholder and the consummation
by such Selling Stockholder of the transactions contemplated hereby.
(c) The information with respect to such Selling Stockholder in the
Registration Statement and the Prospectus, including any amendments or
supplements thereto, does not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
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(d) Each of the Chief Executive Officer and the General Counsel of such
Selling Stockholder (without having conducted any independent investigation) has
no actual knowledge that the representations and warranties of the Company
contained in Section 1 hereof are not materially true and correct, is familiar
with drafts of the Registration Statement and the Prospectus (as amended or
supplemented) previously furnished to him (including the preliminary prospectus
supplement but not the final prospectus supplement) and has no actual knowledge
of any material fact, condition or information not disclosed in the Registration
Statement, as of the date thereof, or the Prospectus (or any amendment or
supplement thereto), as of the applicable filing date, which has materially
adversely affected or may materially adversely affect the business of the
Company and is not prompted to sell shares of Common Stock by any materially
adverse information concerning the Company which is not set forth in the
Registration Statement and the Prospectus.
(e) Such Selling Stockholder has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the shares of the Stock.
3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 3,325,000 shares of
the Firm Stock, and each Selling Stockholder, severally and not jointly, hereby
agrees to sell the number of shares of the Firm Stock set opposite its name in
Schedule 2 hereto to the several Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. Each
Underwriter shall be obligated to purchase from the Company, and from each
Selling Stockholder, that number of shares of the Firm Stock which represents
the same proportion of the number of shares of the Firm Stock to be sold by the
Company and by each Selling Shareholder as the number of shares of the Firm
Stock set forth opposite the name of such Underwriter in Schedule 1 represents
of the total number of shares of the Firm Stock to be purchased by all of the
Underwriters pursuant to this Agreement. The respective purchase obligations of
the Underwriters with respect to the Firm Stock shall be rounded among the
Underwriters to avoid fractional shares or lots of less than 100 share amounts,
as the Representatives may determine.
In addition, the Company grants to the Underwriters an option to purchase
up to 1,100,000 shares of Option Stock. Such option is granted for the purpose
of covering overallotments in the sale of Firm Stock and is exercisable as
provided in Section 5 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set opposite the name of such Underwriters in Schedule 1
hereto. The respective purchase obligations of each Underwriter with respect to
the Option Stock shall be adjusted by the Representatives so that no Underwriter
shall be obligated to purchase Option Stock other than in 100 share amounts.
The price of both the Firm Stock and any Option Stock shall be $53.075 per
share.
The Company and the Selling Stockholders shall not be obligated to deliver
any of the Stock to be delivered on any Delivery Date (as hereinafter defined),
as the case may be, except upon payment for all the Stock to be purchased on
such Delivery Date as provided herein.
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4. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of the Firm Stock,
the several Underwriters propose to offer the Firm Stock for sale upon the terms
and conditions set forth in the Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and payment for
the Firm Stock shall be made at the office of ▇▇▇▇▇ ▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇, at 10:00 A.M., New York City time, on April 24, 2000 or at such
other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to
as the "First Delivery Date" and the date of the First Delivery Date is
sometimes referred to as the "Closing Date." On the First Delivery Date, the
Company and the Selling Stockholders shall deliver or cause to be delivered
certificates representing the Firm Stock to the Representatives for the account
of each Underwriter against payment to or upon the order of the Company and the
Selling Stockholders of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Firm Stock shall
be registered in such names and in such denominations as the Representatives
shall request in writing not less than two full business days prior to the First
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Stock, the Company and the Selling Stockholders shall
make the certificates representing the Firm Stock available for inspection by
the Representatives in New York, New York, not later than 2:00 P.M., New York
City time, on the business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of this
Agreement and may be exercised in whole or in part from time to time by written
notice being given to the Company by the Representatives. Such notice shall set
forth the aggregate number of shares of Option Stock as to which the option is
being exercised, the names in which the shares of Option Stock are to be
registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than 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 on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "Second Delivery Date" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "Delivery
Date".
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on such Second Delivery
Date. On such Second Delivery Date, the Company shall deliver or cause to be
delivered the certificates representing the Option Stock to the Representatives
for the account of each Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer in immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Option Stock shall be registered in
such names and in such denominations as the Representatives shall request in the
aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Company shall make the
certificates representing the Option Stock available for inspection by the
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Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to such Second Delivery Date.
6. Covenants of the Company. The Company covenants and agrees with each
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
Representatives 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 Representatives 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 Representatives, 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 Underwriters if such document would be deemed to be incorporated by
reference into the Prospectus, which filing is not consented to by the
Representatives after reasonable notice thereof, such consent not to be
unreasonably withheld or delayed. The Company shall advise the Representatives
promptly of the issuance by the Commission or any State or other regulatory body
of any stop order or other order suspending the effectiveness of the
Registration Statement, suspending or preventing the use of any Preliminary
Prospectus or the Prospectus or suspending the qualification of the Stock for
offering or sale in any jurisdiction, or of the institution of any proceedings
for any such purpose; and the Company shall use its best efforts to prevent the
issuance of any stop order or other such order and, should a stop order or other
such order be issued, to obtain as soon as possible the lifting thereof.
(b) The Company shall furnish to each of the Representatives and to counsel
for the Underwriters 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
Representatives 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
10
to comply with the Securities Act, the Company shall promptly notify the
Representatives and shall, subject to Section 6(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 Representatives shall designate, and to continue such qualifications in
effect for as long as may be necessary for the distribution of the Stock; except
that in no event shall the Company be obligated in connection therewith to
qualify as a foreign corporation or to execute a general consent to service of
process in any jurisdiction where it is not currently so subject.
(e) As soon as practicable, the Company shall make generally available to
its security holders (and shall deliver to you) an earnings statement satisfying
the requirements of Section 11(a) of the Securities Act and Rule 158 of the
Rules and Regulations.
(f) Whether or not this Agreement becomes effective or is terminated or the
sale of the Stock to the Underwriters 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 Underwriters) 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 Underwriters of
the Stock (including the cost of printing the Stock certificates), (C) all
filing fees and fees and disbursements of counsel to the Underwriters incurred
in connection with the qualification of the Stock under state securities or Blue
Sky laws as provided in Section 6(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 9 and Section 11 hereof, the
Underwriters shall pay all of their own costs and expenses, including the fees
of their counsel and any advertising expenses incurred in connection with any
offers they may make. If the sale of the Stock provided for herein is not
consummated by reason of acts of the Company or changes in circumstances of the
Company pursuant to Section 11 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 Underwriters' obligations hereunder is not fulfilled or
if the Underwriters shall decline to purchase the Stock for any reason permitted
under this Agreement other than by reason of a default by any of the
Underwriters pursuant to Section 10, the Company shall reimburse the several
Underwriters for all reasonable out-of-pocket disbursements (including fees and
disbursements of counsel) incurred by the Underwriters in connection with any
investigation or preparation made by them in respect of the marketing of the
Stock or in contemplation of the performance by them of their obligations
hereunder.
(g) During the period of one year from the Closing Date, the Company shall
furnish to the Underwriters, copies of all reports or other communications
furnished to stockholders and copies
11
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) During the period beginning from the date hereof and continuing to and
including the date 90 days after the date of this Agreement, not to offer, sell,
or otherwise dispose of any shares of Common Stock or any securities that are
convertible into or exchangeable or exercisable for any such shares of Common
Stock or enter into any derivative transaction with similar effect as a sale of
such Common Stock (other than the issuance of shares of Common Stock by the
Company upon conversion of the Selling Stockholders' convertible preferred stock
or under employee incentive plans or upon exercise of options issued under
employee incentive plans, the issuance of Class B Common Stock to Chevron U.S.A.
Inc. or the issuance of Common Stock in connection with an acquisition) without
the prior written consent of the Designated Underwriter. The Designated
Underwriter shall be either ▇▇▇▇▇▇ Brothers Inc. or ▇▇▇▇▇▇▇, Sachs & Co., the
identity of such firm to be determined by the Representatives promptly upon such
consent being sought by the Company.
(l) On or prior to the Closing Date, the Company shall provide to the
Representatives on behalf of the Underwriters the FIRPTA Certificate (as defined
in Section 8(m)) based upon Treasury Reg. 1.897-1(c)(2)(iii) .
7. Covenants of the Selling Stockholders. Each Selling Stockholder
severally, and not jointly, agrees:
(a) Except as contemplated by this Agreement, during the period beginning
from the date hereof and continuing to and including the date 90 days after the
date of this Agreement, not to offer, sell, or otherwise dispose of any shares
of Common Stock or any securities that are convertible into or exchangeable or
exercisable for any shares of Common Stock or enter into any derivative
transaction with similar effect as a sale of Common Stock without the prior
written consent of the Designated Underwriter.
(b) That the Stock to be sold by such Selling Stockholder hereunder is
subject to the interest of the Underwriters and that the obligations of such
Selling Stockholder hereunder shall not be terminated by any act of such Selling
Stockholder or by operation of law.
(c) To deliver to the Representatives prior to the First Delivery Date a
properly completed and executed United States Treasury Department Form W-8 (if
the Selling Stockholder is a non-United States person) or Form W-9 (if the
Selling Stockholder is a United States person.)
12
(d) Such Selling Stockholder that is not a U.S. corporation acknowledges
and agrees (i) that the Underwriters are under no U.S. federal income tax
withholding obligation (or any obligation to take any action related to a
withholding obligation) with respect to the purchase of Stock from such Selling
Stockholder, (ii) that the Underwriters may rely on the FIRPTA Certificate as
evidence that they are not required to withhold any U.S. Federal income tax and
(iii) to indemnify and hold the Underwriters harmless from any such withholding
tax liability pursuant to the procedures set forth in Section 9(d).
(e) To pay the fees and expenses of its counsel and any transfer taxes
payable in connection with its sale of Stock to the Underwriters.
8. Conditions of Underwriters' Obligations. The obligations of the
Underwriters hereunder are subject to the accuracy, as of the date hereof and
the Closing Date (as if made at the Closing Date), of the representations and
warranties of the Company and the Selling Stockholders contained herein, to the
performance by the Company and the Selling Stockholders of their respective
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 6(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 Representatives; 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 Representatives and
complied with to their satisfaction.
(b) No Underwriter shall have been advised by the Company or shall have
discovered and disclosed to the Company that the Registration Statement or the
Prospectus or any amendment or supplement thereto, contains an untrue statement
of fact which in the opinion of the Representatives, or in the opinion of
counsel to the Underwriters, is material, or omits to state a fact which, in the
opinion of the Representatives, or in the opinion of counsel to the
Underwriters, is material and is required to be stated therein or is necessary
to make the statements therein not misleading.
(c) On the Closing Date, the Representatives shall have received from ▇▇▇▇▇
▇▇▇▇▇ L.L.P., counsel for the Underwriters, such opinion or opinions with
respect to the issuance and sale of the Stock and other related matters as the
Representatives may reasonably request and such counsel shall have received such
documents and information as they request to enable them to pass upon such
matters.
(d) On the Closing Date there shall have been furnished to the
Representatives the opinion (addressed to the Underwriters) of ▇▇▇▇▇▇ & ▇▇▇▇▇▇
L.L.P., counsel for the Company, dated the Closing Date and in form and
substance satisfactory to the Underwriters, 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
13
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 Delivery Date
have been duly and validly authorized and issued, are fully paid and non-
assessable (assuming payment for and delivery of the Stock in accordance with
this Agreement) and conform to the description thereof contained in the
Prospectus. The Company has all requisite corporate power and authority to
issue, sell and deliver the Stock in accordance with and upon the terms and
conditions set forth in this Agreement and in the Registration Statement and
Prospectus.
(iii) Neither the execution or delivery of this Agreement nor consummation
of the transactions contemplated hereby will result in a breach or violation
of, or constitute a default under, the certificate of incorporation or by-
laws of the Company, nor will the performance by the Company of its
obligations hereunder violate any law, rule, administrative regulation or (to
the knowledge of such counsel) decree (except that such counsel need not
express an opinion as to federal or state securities or Blue Sky laws with
respect to this subparagraph) of any court or any governmental agency or body
having jurisdiction over the Company, its Subsidiaries or their respective
properties. Except for permits, consents, approvals and similar
authorizations required under the securities or Blue Sky laws of certain
jurisdictions and except for such permits, consents, approvals and
authorizations which have been obtained, no permit, consent, approval,
authorization or order of any court, governmental agency or body or financial
institution is required of the Company for the valid authorization, issuance,
sale and delivery of the Stock.
(iv) The Company has all necessary corporate power and authority to execute
and deliver this Agreement and perform its obligations hereunder. This
Agreement has been duly authorized, executed and delivered by the Company.
(v) The Registration Statement and all post-effective amendments thereto
have become effective under the Securities Act and, to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending before or threatened by the Commission. To the
knowledge of such counsel, no order of the Commission directed to any
document incorporated by reference in the Registration Statement has been
issued, and no challenge by appropriate proceedings has been made to the
accuracy or adequacy of any document incorporated by reference in the
Registration Statement.
14
(vi) The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company, as of their respective
effective or issue dates, complied as to form in all material respects with
the applicable requirements of the Securities Act and the Rules and
Regulations (except that no opinion need be expressed as to the financial
statements or notes thereto contained therein or omitted therefrom).
(vii) There are no legal proceedings pending or threatened against the
Company or any of its Subsidiaries to which such counsel has given
substantive attention or in which such counsel has been engaged to represent
the Company or any of its Subsidiaries that are required to be disclosed in
the Prospectus and are not disclosed.
(viii) Neither the Company nor any of its Subsidiaries is an "investment
company" within the meaning of the 1940 Act, or is subject to regulation as
an "investment company" under the 1940 Act.
(ix) The Company is exempt from registration and all other regulations and
requirements of the 1935 Act and the rules and regulations promulgated
thereunder, other than from Section 9(a)(2) thereof, pursuant to Section
3(a)(1) of the 1935 Act. Illinois Power Company, a wholly-owned subsidiary
of the Company, is regulated as a public utility in the State of Illinois and
in no other state.
Such opinion shall also contain a statement that such counsel has no reason
to believe that (i) the Registration Statement, as of the Effective Time, or any
amendment thereto (other than the financial statements and notes thereto
contained therein, as to which such counsel need not comment), at the time it
became effective, including in each case any document filed under the Exchange
Act and incorporated by reference therein, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading, or
(ii) the Prospectus or any supplement or amendment thereto (other than the
financial statements and notes thereto contained therein, as to which such
counsel need not comment), including in each case any document filed under the
Exchange Act and incorporated by reference therein, on such Closing Date and at
the time such Prospectus or supplement or amendment thereto was issued contains
or contained any untrue statement of a material fact or omits or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may (i) state that its opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of Texas and the General Corporation Law of the State of
Delaware and that such counsel is not admitted in the State of Illinois and (ii)
rely (to the extent such counsel 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 Underwriters and furnishes a copy of its
opinion to the Representatives.
(e) On the Closing Date there shall have been furnished to you the opinion
(addressed to the Underwriters) of the General Counsel and Secretary of the
Company, dated the Closing Date and in form and substance satisfactory to the
Underwriters, to the effect that:
15
(i) Each of the Company's Significant Subsidiaries has been duly
incorporated or formed as a corporation or partnership, as applicable, and is
validly existing as a corporation, a general partnership or a limited
partnership under the laws of its jurisdiction of incorporation or formation
(and each of the Significant Subsidiaries that is a corporation or a limited
partnership is in good standing under the laws of its jurisdiction of
incorporation or formation), with full corporate or partnership (as
applicable) power and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus.
(ii) To the knowledge of such counsel, except as disclosed in the
Prospectus, all of the outstanding shares of capital stock or partnership
interests (or such percentage of the partnership interest as is set forth in
the respective partnership agreements) of each Significant Subsidiary are
owned directly or indirectly by the Company, free and clear of any perfected
security interest.
(iii) Neither the execution or delivery of this Agreement nor consummation
of the transactions contemplated hereby will result in a breach or violation
of, or constitute a default under, the certificate of incorporation, by-laws,
partnership agreement or other governing documents of the Significant
Subsidiaries or any agreement, indenture or other instrument filed as an
exhibit to the Registration Statement or any document incorporated by
reference therein.
(iv) Each document incorporated by reference in the Registration Statement
as filed under the Exchange Act complied when so filed as to form in all
material respects with the applicable requirements of the Exchange Act and
the rules and regulations of the Commission thereunder (except that no
opinion need be expressed as to the financial statements or notes thereto
contained therein).
(v) The descriptions in the Registration Statement and Prospectus of
statutes, regulations, legal or governmental proceedings, to the extent they
constitute matters of law and summaries of legal matters are accurate in all
material respects. To the knowledge of such counsel, there are no contracts
or documents required to be described in the Registration Statement or
Prospectus or to be filed as exhibits thereto which are not described or
filed as required.
(f) The respective counsel for each of the Selling Stockholders shall each
have furnished to the Representatives its written opinion, as counsel to each of
the Selling Stockholders for whom it is acting as counsel, addressed to the
Underwriters and dated the First Delivery Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) Such Selling Stockholder has all necessary corporate power and
authority to execute, deliver and enter into this Agreement and perform its
obligations hereunder. This Agreement has been duly authorized, executed and
delivered by the Selling Stockholder.
(ii) Neither the execution or delivery of this Agreement nor consummation
of the transactions contemplated hereby will result in a breach or violation
of, or constitute a default under, the certificate of incorporation or by-
laws of the Selling Stockholder, nor will the performance by the Selling
Stockholder 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
16
subparagraph) of any court or any governmental agency or body having
jurisdiction over the Selling Stockholder, 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 Selling Stockholder for the valid
authorization, issuance, sale and delivery of the Stock by the Selling
Stockholder.
(iii) Upon payment for and delivery of the Stock in accordance with this
Agreement, good and valid title to the shares of Stock to be sold by such
Selling Stockholder under this Agreement, free and clear of all liens and
encumbrances, will be transferred to each of the several Underwriters
assuming each of the Underwriters is a "protected purchaser" within the
meaning of Section 8.303 of the Uniform Commercial Code.
(g) There shall have been furnished to you a certificate, dated the Closing
Date and addressed to you, signed by the Chairman of the Board or the President
or any Senior Vice President and by the Chief Financial Officer of the Company
to the effect that: (i) the representations and warranties of the Company
contained in this Agreement are true and correct, as if made at and as of the
Closing Date, and the Company has complied with all the agreements and satisfied
all the conditions on its part to be complied with or satisfied at or prior to
the Closing Date; (ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that purpose has
been initiated or, to the best of their knowledge, threatened; (iii) all filings
required by Rule 424(b) and Rule 430A of the Rules and Regulations have been
made; (iv) the signers of said certificate have carefully examined the
Registration Statement and the Prospectus, and any amendments or supplements
thereto (including any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus), and such documents contain all
statements and information required to be included therein, and do not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading; (v) since the Effective Date there has occurred no event required to
be set forth in an amendment or supplement to the Registration Statement or the
Prospectus which has not been so set forth and there has been no document
required to be filed under the Exchange Act and the Rules and Regulations that
upon such filing would be deemed to be incorporated by reference into the
Prospectus that has not been so filed and (vi) no event contemplated by
subsection (h) of this Section 8 shall have occurred.
(h) 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 Representatives, shall render it
impractical or inadvisable to proceed with the payment for and delivery of the
Stock.
(i) On the date hereof and the Closing Date you shall have received letters
from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP dated respectively the date hereof and the Closing Date
and addressed to you,
17
confirming that they are independent certified public accountants within the
meaning of the Securities Act and the applicable published Rules and
Regulations, and stating, as of the date of such letter (or, with respect to
matters involving changes or developments since the respective dates as of which
specified financial information is given or incorporated in the Prospectus as of
a date not more than five days prior to the date of such letter, provided that
such date shall be after the date of the Prospectus), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by its letter delivered to you concurrently with the execution
of this Agreement, and, with respect to the letter delivered on the Closing
Date, confirming the conclusions and findings set forth in such prior letter.
(j) Each Selling Stockholder shall have furnished to the Representatives on
the First Delivery Date a certificate, dated the First Delivery Date, signed by,
or on behalf of, the Selling Stockholder stating that the representations,
warranties and agreements of the Selling Stockholder contained herein are true
and correct as of the First Delivery Date and that the Selling Stockholder has
complied with all agreements contained herein to be performed by the Selling
Stockholder at or prior to the First Delivery Date.
(k) The Stock shall be duly listed, subject to notice of issuance, on The
New York Stock Exchange.
(l) ▇. ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall have
entered into a written agreement in the form of Exhibit B hereto (each such
agreement, a "Lock-up Agreement"), and executed originals of each Lock-Up
Agreement shall have been delivered to the Representatives.
(m) The Representatives on behalf of the Underwriters shall have been
provided a statement by the Company dated the Closing Date, based upon the
provisions of Treasury Regulations 1.1445-2(c)(2) and 1.897-1(c)(2)(iii), that
certifies that the Stock owned by any Selling Stockholder that is not a U.S.
Corporation is not a United States real property interest under Section
897(c)(3) and not subject to withholding tax under Section 1445(b)(6) of the
U.S. Internal Revenue Code of 1986, as amended (the "FIRPTA Certificate").
(n) The Representatives shall have been furnished by the Company such
additional documents and certificates as you or counsel for the Underwriters may
reasonably request.
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 Representatives and to counsel for the Underwriters. The
Company shall furnish to the Representatives 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 8 shall
not have been fulfilled when and as required by this Agreement, this Agreement
and all obligations of the Underwriters hereunder may be canceled at, or at any
time prior to, the Closing Date, by the Representatives. Any such cancellation
shall be without liability of the Underwriters to the Company. Notice of such
cancellation shall be given to the Company in writing, or by telegraph or
telephone and confirmed in writing.
9. Indemnification and Contribution. (a) The Company shall indemnify
and hold harmless each 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
18
Securities Act or otherwise, insofar as such loss, claim, damage or liability
(or action in respect thereof) arises out of or is based upon (i) any untrue
statement or alleged untrue statement made by the Company in Section 1 hereof,
(ii) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or the Registration Statement or Prospectus as amended or
supplemented, or (iii) the omission or alleged omission to state in the
Registration Statement, any Preliminary Prospectus, the Prospectus or the
Registration Statement or Prospectus as amended or supplemented a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and shall reimburse each 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 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 9(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 Underwriters
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 9(a) shall not
inure to the benefit of any 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 6(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 Selling Stockholders, severally in proportion to the number of
shares of Stock to be sold by each of them hereunder, shall indemnify and hold
harmless each 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
Selling Stockholder in Section 2 hereof, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or the Registration Statement or
Prospectus as amended or supplemented, or (iii) the omission or alleged omission
to state in the Registration Statement, any Preliminary Prospectus, the
Prospectus or the Registration Statement or Prospectus as amended or
supplemented a material fact required to be stated therein or necessary to make
the statements therein not misleading; and shall reimburse each 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 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,
19
in which case such payments shall be promptly refunded; provided, however, that
each Selling Stockholder shall not be liable under this paragraph 9(b) for any
amount in excess of the net proceeds received by it in connection with the sale
of the Stock but shall be liable under this paragraph 9(b) 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 such Selling
Stockholder 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 9(b) shall not
inure to the benefit of any 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 6(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.
(c) Each Underwriter severally, but not jointly, shall indemnify and hold
harmless the Company and each Selling Stockholder against any loss, claim,
damage or liability (or any action in respect thereof) to which the Company or
such Selling Stockholder 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 and each Selling Stockholder promptly after receipt of invoices from the
Company or such Selling Stockholder for any legal or other expenses reasonably
incurred by the Company or such Selling Stockholder 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 through the Representatives by or on behalf of such Underwriter
expressly for use therein.
(d) Promptly after receipt by any indemnified party under subsection (a),
(b) or (c) 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
20
have under this Section 9 except to the extent it has been prejudiced in any
material respect by such failure or from any liability which it may have to an
indemnified party otherwise than under this Section 9. 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), (b) or (c) 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 Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Underwriters against the Company under such subsection if (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Representatives shall have been advised by counsel that there may be one or more
legal defenses available to the Underwriters which are different from or
additional to those available to the Company or such Selling Stockholder and in
the reasonable judgment of such counsel it is advisable for the Underwriters to
employ separate counsel or (iii) the Company or such Selling Stockholder has
failed to assume the defense of such action and employ counsel reasonably
satisfactory to the Representatives, in which event the fees and expenses of
such separate counsel shall be paid by the Company or such Selling Stockholder.
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.
(e) If the indemnification provided for in this Section 9 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a), (b) or
(c) 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), (b) or (c) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters 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 and the Selling Stockholders on the one hand and
the Underwriters 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 and the Selling
Stockholders on the one hand and the Underwriters on the other hand shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the
21
Stock (before deducting expenses) received by the Company and the Selling
Stockholders bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. Relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Selling Stockholders or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (e) were to be determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to in the first sentence of this
subsection (e). 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 (e) 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 (e). Notwithstanding
the provisions of this subsection (e), no Selling Stockholder shall be required
to contribute an amount in excess of the amount of net proceeds received by it
in connection with the sale of the Stock and no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Stock underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such 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. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint. Each party entitled to contribution agrees that upon
the service of a summons or other initial legal process upon it in any action
instituted against it in respect to which contribution may be sought, it shall
promptly give written notice of such service to the party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
of any such service shall not relieve the party from whom contribution may be
sought for any obligation it may have hereunder or otherwise (except as
specifically provided in subsection (d) above).
(f) The obligations of the Company and the Selling Stockholders under this
Section 9 shall be in addition to any liability that the Company or the Selling
Stockholders may otherwise have, and shall extend, upon the same terms and
conditions set forth in this Section 9, to the respective officers and directors
of the Underwriters and each person, if any, who controls any Underwriter within
the meaning of the Securities Act; and the obligations of the Underwriters under
this Section 9 shall be in addition to any liability that the respective
Underwriters may otherwise have, and shall extend, upon the same terms and
conditions, to each director of the Company and the Selling Stockholders
(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 or the Selling Stockholders within the meaning of the
Securities Act.
10. Substitution of Underwriters. If, on either Delivery Date, any
Underwriter defaults in its obligation to purchase the Stock which it has agreed
to purchase under this Agreement, the
22
non-defaulting Underwriters shall be obligated to purchase (in the respective
proportions which the number of shares of Firm Stock set forth opposite the name
of each non-defaulting Underwriter in Schedule 1 hereto bears to the total
number of shares of Firm Stock less the number of shares of Firm Stock the
defaulting Underwriter agreed to purchase set forth in Schedule 1 hereto) the
Stock which the defaulting Underwriter agreed but failed to purchase on such
Delivery Date; except that the non-defaulting Underwriters shall not be
obligated to purchase any of the Stock if the total number of shares of Stock
which the defaulting Underwriter or Underwriters agreed but failed to purchase
exceeds 9.09% of the total number of shares of Stock to be purchased on such
Delivery Date, and any non-defaulting Underwriters shall not be obligated to
purchase more than 110% of the number of shares of Stock which it agreed to
purchase on such Delivery Date pursuant to Section 3. If the foregoing maximums
are exceeded, the non-defaulting Underwriters, and any other underwriters
satisfactory to you who so agree, shall have the right, but shall not be
obligated, to purchase (in such proportions as may be agreed upon among them)
all of the Stock. If the non-defaulting Underwriters or the other underwriters
satisfactory to the Underwriters do not elect to purchase the Stock that the
defaulting Underwriter or Underwriters agreed but failed to purchase within 36
hours after such default, this Agreement (or with respect to the Second Delivery
Date, the obligation of the Underwriters to purchase, and of the Company to
sell, the Option Stock) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Shareholders, except
for the indemnity and contribution agreements of the Company, the Selling
Stockholders and the Underwriters contained in Section 9 hereof. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter pursuant to this Section 10.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have for damages caused by its default. If the non-defaulting
Underwriters or the other underwriters satisfactory to you are obligated or
agree to purchase the Stock of a defaulting Underwriter, either you or the
Company may postpone the Closing Date for up to seven full Business Days in
order to effect any changes that may be necessary in the Registration Statement
or the Prospectus or in any other document or agreement, and to file promptly
any amendments or any supplements to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary.
11. Effective Date and Termination. (a) This Agreement shall become
effective (i) at 11:00 A.M., New York City time, on the next Business Day
following the date hereof or (ii) at such earlier time after the Registration
Statement becomes effective as you shall first release the 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 6(f) and Section 9 hereof shall at
all times be effective. For purposes of this Agreement, the release of the
initial public offering of the Stock for sale to the public shall be deemed to
have been made when the Representatives release, by telegram or otherwise, firm
offers of the Stock to securities dealers or release for publication a newspaper
advertisement relating to the Stock, whichever occurs first.
(b) Until the Closing Date, this Agreement may be terminated by the
Representatives by giving notice as hereinafter provided to the Company if (i)
the Company shall have failed, refused or been unable, at or prior to the
Closing Date, to perform any agreement on its part to be performed hereunder,
(ii) any other condition of the Underwriters' obligation hereunder is not
fulfilled,
23
(iii) trading in the Common Stock of the Company shall have been suspended by
the Commission or the NYSE or trading in securities generally on the NYSE shall
have been suspended or minimum prices shall have been established on such
exchange by the Commission or such exchange or other regulatory body or
governmental authority having jurisdiction which, in the judgment of a majority
in interest of the several Underwriters, 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 Representatives, 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 Representatives, make it inadvisable or impracticable to
proceed with the offering or delivery of the Stock. Any termination of this
Agreement pursuant to this Section 11 shall be without liability on the part of
the Company or any Underwriter, except as otherwise provided in Sections 6(f)
and 9 hereof.
Any notice referred to above may be given at the address specified in
Section 13 hereof in writing or by telegraph or telephone, and if by telegraph
or telephone, shall be immediately confirmed in writing.
12. Survival of Certain Provisions. The agreements contained in Section 9
hereof and the representations, warranties and agreements of the Company
contained in Sections 1 and 6 and of the Selling Stockholders contained in
Sections 2 and 7 hereof shall survive the delivery of the Stock to the
Underwriters 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.
13. 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 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention:
General Counsel; (b) whenever notice is required by the provisions of this
Agreement to be given to the several Underwriters, such notice shall be in
writing or by facsimile transmission addressed to the Representatives c/▇ ▇▇▇▇▇▇
Brothers Inc., Three World Financial Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel; and (c) whenever notice is required by
the provisions of this Agreement to be given to either Selling Stockholder, such
notice shall be in writing or by facsimile transmission addressed to such
Selling Stockholder at the address set forth on Schedule 2, Attention: General
Counsel.
14. Information Furnished by Underwriters. The Underwriters severally
confirm that the information appearing in the list of names of, and number of
shares of Stock to be purchased by, each of the Underwriters, under the caption
"Underwriting" in any Preliminary Prospectus and in the Prospectus, and the
statements in the second, third, eighth and ninth paragraphs next following such
list, constitute the written information furnished by or on behalf of any
Underwriter referred to in paragraph (b) of Section 1 hereof and in paragraphs
(a), (b) and (c) of Section 9 hereof.
24
15. Parties. This Agreement shall inure to the benefit of and be binding
upon the several Underwriters, the Company, the Selling Stockholders and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that (a) the representations,
warranties, indemnities and agreements of the Company and the Selling
Stockholders contained in this Agreement shall also be deemed to be for the
benefit of the person or persons, if any, who control any Underwriter within the
meaning of Section 15 of the Securities Act and (b) the indemnity agreement of
the Underwriters contained in Section 9 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.
16. 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.
17. 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.
18. Consent to Jurisdiction. British Gas Global Holdings BV ("BGGH")
irrevocably agrees that any legal suit, action or proceeding arising out of or
based upon this Agreement or the transactions contemplated hereby ("Related
Proceedings") may be instituted in the federal courts of the United States of
America located in the City of New York or the courts of the State of New York
in each case located in the Borough of Manhattan in the City of New York
(collectively, the "Specified Courts"), and irrevocably submits to the non-
exclusive jurisdiction of such courts in any such suit, action or proceeding.
The parties further agree that service of any process, summons, notice or
document by mail to such party's address set forth in Schedule 2 shall be
effective service of process for any lawsuit, action or other proceeding brought
in any such court. The parties hereby irrevocably and unconditionally waive any
objection to the laying of venue of any lawsuit, action or other proceeding in
the Specified Courts, and hereby further irrevocably and unconditionally waive
and agree not to plead or claim in any such court that any such lawsuit, action
or other proceeding brought in any such court has been brought in an
inconvenient forum. BGGH hereby irrevocably appoints CT Corporation System,
which currently maintain a New York City office at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America, as its agent to receive service of process
or other legal summons for purposes of any such action or proceeding that may be
instituted in any state or federal court in the City and State of New York.
19. 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.
20. 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.
25
Please confirm, by signing and returning to us two counterparts of this
Agreement, that you are acting on behalf of yourselves and the several
Underwriters and that the foregoing correctly sets forth the Agreement among the
Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
Dynegy Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President
Confirmed and accepted as of The Selling Stockholders:
the date first above mentioned
British Gas
▇▇▇▇▇▇ Brothers Inc. Global Holdings BV
▇▇▇▇▇▇▇, Sachs & Co.
ABN AMRO Rothschild
a division of ABN AMRO Incorporated
Banc of America Securities LLC
CIBC World Markets Corp.
Credit Suisse First Boston
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
PaineWebber Incorporated
By: /s/ L.M.O.C. de Preter
--------------------------
For themselves and as Representatives L.M.O.C. de Preter
of the Several Underwriters named in Director
Schedule 1 hereto
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇▇
Director
Nova Gas Services (U.S.) Inc.
By: ▇▇▇▇▇▇ Brothers Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
By: /s/ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------- Director
▇▇▇ ▇▇▇▇▇▇
Vice President
SCHEDULE 1
Underwriting Agreement dated April 17, 2000
Underwriter Number of Shares
----------- ----------------
▇▇▇▇▇▇ Brothers Inc 1,534,000
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. 1,192,000
Banc of America Securities LLC 816,000
CIBC World Markets Corp 816,000
Credit Suisse First Boston 816,000
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated 816,000
ABN AMRO Rothschild
a division of ABN AMRO Incorporated 408,000
PaineWebber Incorporated 408,000
Credit Lyonnais Securities (USA) Inc. 154,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated 154,000
Deutsche Bank Securities Inc. 154,000
Fidelity Capital Markets
a division of National Financial Services Corp 154,000
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. 154,000
▇▇▇▇▇▇▇▇▇ & Company, Inc. 154,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated 154,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Inc. 154,000
Prudential Securities Incorporated 154,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. 154,000
▇▇▇▇▇▇▇ & Company International 154,000
Total ---------
8,500,000
=========
SCHEDULE 2
Underwriting Agreement dated April 17, 2000
Selling Stockholder Address Number of Shares
------------------- ------- ----------------
British Gas Global Holdings BV 2,587,500
Nova Gas Services (U.S.) Inc. 2,587,500
EXHIBIT A
Underwriting Agreement dated April , 2000
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.
Dynegy GP Inc.
Dynegy NGL, Inc.
Dynegy Regulated Holdings, Inc.
Dynegy Administrative Services Company
Illinova Corporation
Illinois Power Company
Ilinova Generating Company
Illinova Energy Partners, Inc.
Illinova Insurance Company
Illinova Business Enterprises, Inc.
A-1
EXHIBIT B
Underwriting Agreement dated April 17, 2000
LOCK-UP LETTER AGREEMENT
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
ABN AMRO Rothschild
a division of ABN AMRO Incorporated
Banc of America Securities LLC
CIBC World Markets Corp.
Credit Suisse First Boston
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
PaineWebber Incorporated
As Representatives of the
several underwriters
c/▇ ▇▇▇▇▇▇ BROTHERS INC.
Three World financial Center
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Common Stock, no par value, (the "Common Stock"), of Dynegy Inc.
(the "Company") from the Company and certain of its stockholders and that the
Underwriters propose to reoffer the Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of the
Designated Underwriter (as defined below), the undersigned will not, directly or
indirectly, (1) offer for sale, sell 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 90 days
after the date of the final Prospectus relating to the Offering. The Designated
Underwriter shall be either ▇▇▇▇▇▇ Brothers Inc. or ▇▇▇▇▇▇▇, Sachs & Co., the
identity
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of such firm to be determined by ▇▇▇▇▇▇ Brothers Inc. and ▇▇▇▇▇▇▇ Sach & Co.
promptly upon such consent being sought by me.
Notwithstanding the next preceding paragraph, this letter shall not
prohibit or restrict sales of an aggregate of 1,000,000 shares of Common Stock
by ▇.▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
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.
The undersigned understands that the Company, the Underwriters and the
stockholders selling shares in the Offering 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. 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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