$200,000,000
ILLINOVA CORPORATION
Medium-Term Notes, Series A
Due Nine Months or More From Date of Issue
DISTRIBUTION AGREEMENT
January 16, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 10th Floor
New York, New York 10281-1310
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Illinova Corporation, an Illinois corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Salomon Brothers Inc (each, an
"Agent" and collectively, the "Agents") with respect to the issue and
sale by the Company of its Medium-Term Notes, Series A, Due Nine
Months or More From Date of Issue (the "Notes"). The Notes are to be
issued pursuant to an Indenture, dated as of February 1, 1997, as
amended, supplemented or modified from time to time (the "Indenture"),
between the Company and The First National Bank of Chicago, as trustee
(the "Trustee"). As of the date hereof, the Company has authorized
the issuance and sale of up to $200,000,000 aggregate initial offering
price of Notes (or its equivalent based upon the exchange rate on the
applicable trade date in such foreign or composite currencies as the
Company shall designate at the time of issuance) to or through the
Agents pursuant to the terms of this Agreement. It is understood,
however, that the Company may from time to time authorize the issuance
of additional Notes and that such additional Notes may be sold to or
through the Agents pursuant to the terms of this Agreement, all as
though the issuance of such Notes were authorized as of the date
hereof.
This Agreement provides both for the sale of Notes by the Company
to one or more Agents as principal for resale to investors and other
purchasers and for the sale of Notes by the Company directly to
investors (as may from time to time be agreed to by the Company and
the applicable Agent), in which case the applicable Agent will act as
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an agent of the Company in soliciting offers for the purchase of
Notes; provided, however, that the Company reserves the right to sell
Notes directly on its own behalf.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-
17847) for the registration of debt securities, including the Notes,
having an aggregate offering price of $300,000,000 ($200,000,000 of
which debt securities remain unsold) under the Securities Act of 1933,
as amended (the "1933 Act"), and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations"), and the
Company has filed or will file such post-effective amendments thereto
as may be required prior to any acceptance by the Company of an offer
for the purchase of Notes. Such registration statement (as so
amended, if applicable) has been declared effective by the Commission
and the Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended (the "1939 Act"). Such registration statement
(as so amended, if applicable) is referred to herein as the
"Registration Statement"; and the prospectus constituting a part of
the Registration Statement and all applicable amendments or
supplements thereto (including the prospectus supplement (the
"Prospectus Supplement") and any pricing supplement (each, a "Pricing
Supplement") relating to the offering of Notes), in the form first
furnished to the applicable Agent(s), are collectively referred to
herein as the "Prospectus" except that if any revised prospectus shall
be provided to the Agents by the Company for use in connection with
the offering of the Notes, whether or not such revised prospectus is
required to be filed by the Company pursuant to Rule 424(b) of the
1933 Act Regulations, the term "Prospectus" shall refer to such
revised prospectus from and after the time it is first provided to the
Agents for such use; provided, however, that all references to the
"Registration Statement" and the "Prospectus" shall also be deemed to
include all documents incorporated therein by reference pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
Item 12 of Form S-3 under the 1933 Act prior to any acceptance by the
Company of an offer for the purchase of Notes; provided, further, that
if the Company files a registration statement with the Commission
pursuant to Rule 462(b) of the 1933 Act Regulations (the "Rule 462(b)
Registration Statement"), then, after such filing, all references to
the "Registration Statement" shall also be deemed to include the Rule
462(b) Registration Statement. A "preliminary prospectus" shall be
deemed to refer to any prospectus furnished by the Company after the
registration statement became effective and before any acceptance by
the Company of an offer for the purchase of Notes which omitted
information to be included upon pricing in a form of prospectus filed
with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations. For purposes of this Agreement, all references to the
Registration Statement, Prospectus or preliminary prospectus or to any
amendment or supplement thereto shall be deemed to include any copy
filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
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All references in this Agreement to financial statements and
schedules and other information which is "disclosed," "contained,"
"included" or "stated" (or other references of like import) in the
Registration Statement, Prospectus or preliminary prospectus shall be
deemed to include all such financial statements and schedules and
other information that is incorporated by reference in the
Registration Statement, Prospectus or preliminary prospectus, as the
case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, Prospectus or preliminary
prospectus shall be deemed to include the filing of any document under
the 1934 Act that is incorporated by reference in the Registration
Statement, Prospectus or preliminary prospectus, as the case may be.
SECTION 1. APPOINTMENT AS AGENT.
(a) APPOINTMENT. Subject to the terms and conditions stated
herein and subject to the reservation by the Company of the right to
sell Notes directly on its own behalf, the Company hereby agrees that
Notes will be sold exclusively to or through the Agents. The Company
agrees that it will not appoint any other agents to act on its behalf,
or to assist it, in the placement of the Notes during the term of this
Agreement without amending this Agreement to appoint such agent as an
additional Agent hereunder on the same terms and conditions as
provided herein for the Agents and giving the Agents prior notice of
such appointment.
(b) SALE OF NOTES. The Company shall not sell or approve the
solicitation of offers for the purchase of Notes in excess of the
amount that shall be authorized by the Company from time to time or in
excess of the aggregate initial offering price of Notes registered
pursuant to the Registration Statement. The Agents shall have no
responsibility for maintaining records with respect to the aggregate
initial offering price of Notes sold, or of otherwise monitoring the
availability of Notes for sale, under the Registration Statement.
(c) PURCHASES AS PRINCIPAL. The Agents shall not have any
obligation to purchase Notes from the Company as principal. However,
absent an agreement between an Agent and the Company that such Agent
shall be acting solely as an agent for the Company, such Agent shall
be deemed to be acting as principal in connection with any offering of
Notes by the Company through such Agent. Accordingly, the Company and
the Agents, individually or in a syndicate, may agree from time to
time that such Agents may purchase Notes from the Company as principal
for resale to investors and other purchasers determined by such
Agents. Any purchase of Notes from the Company by an Agent as
principal shall be made in accordance with Section 3(a) hereof.
(d) SOLICITATIONS AS AGENT. If agreed upon between an Agent and
the Company, such Agent, acting solely as an agent for the Company and
not as principal, will solicit offers for the purchase of Notes. Such
Agent will communicate to the Company, orally, each offer for the
purchase of Notes solicited by it on an agency basis other than those
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offers rejected by such Agent. Such Agent shall have the right, in
its discretion reasonably exercised, to reject any offer for the
purchase of Notes, in whole or in part, and any such rejection shall
not be deemed a breach of its agreement contained herein. The Company
may accept or reject any offer for the purchase of Notes, in whole or
in part. Such Agent shall make reasonable efforts to assist the
Company in obtaining performance by each purchaser whose offer for the
purchase of Notes has been solicited by it on an agency basis and
accepted by the Company. Such Agent shall not have any liability to
the Company in the event that any such purchase is not consummated for
any reason. If the Company shall default on its obligation to deliver
Notes to a purchaser whose offer has been solicited by such Agent on
an agency basis and accepted by the Company, the Company shall (i)
hold such Agent harmless against any loss, claim or damage arising
from or as a result of such default by the Company and (ii) pay to
such Agent any commission to which it would otherwise be entitled
absent such default.
(e) RELIANCE. The Company and the Agents agree that any Notes
purchased from the Company by one or more Agents as principal shall be
purchased, and any Notes the placement of which an Agent arranges as
an agent of the Company shall be placed by such Agent, in reliance on
the representations, warranties, covenants and agreements of the
Company contained herein and on the terms and conditions and in the
manner provided herein.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to each Agent as of the
date hereof, as of the date of each acceptance by the Company of an
offer for the purchase of Notes (whether to such Agent as principal or
through such Agent as agent), as of the date of each delivery of Notes
(whether to such Agent as principal or through such Agent as agent)
(the date of each such delivery to such Agent as principal is referred
to herein as a "Settlement Date"), and as of any time that the
Registration Statement or the Prospectus shall be amended or
supplemented (each of the times referenced above is referred to herein
as a "Representation Date"), as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company
meets the requirements for use of Form S-3 under the 1933 Act. The
Registration Statement (including any Rule 462(b) Registration
Statement) has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement (including
any Rule 462(b) Registration Statement) has been issued under the 1933
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, and any request on the part of the Commission for
additional information has been complied with. The Indenture has been
duly qualified under the 1939 Act.
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At the respective times that the Registration Statement, any
Rule 462(b) Registration Statement and any post-effective amendments
thereto (including the filing of the Company's most recent Annual
Report on Form 10-K with the Commission (the "Annual Report on Form
10-K")) became effective and at each Representation Date, the
Registration Statement (including any Rule 462(b) Registration
Statement) and any amendments and supplements thereto complied and
will comply in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and the 1939 Act and the rules and
regulations of the Commission under the 1939 Act (the "1939 Act
Regulations") and did not and will 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.
At the date hereof, at the date of the Prospectus and at each
Representation Date, the Prospectus and any amendments and supplements
thereto did not and will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. Notwithstanding the foregoing, the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by the Agents expressly for use in
the Registration Statement or the Prospectus.
Each preliminary prospectus and prospectus filed as part of
the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and, if applicable, each preliminary prospectus and the
Prospectus delivered to the applicable Agent(s) for use in connection
with the offering of Notes is identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read
together with the other information in the Prospectus, at the date
hereof, at the date of the Prospectus and at each Representation Date,
did not and will not 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 under which they were made,
not misleading.
(iii) INDEPENDENT ACCOUNTANTS. The accountants who
certified the financial statements and supporting schedules included
in the Registration Statement and the Prospectus are independent
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public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements of the
Company included in the Registration Statement and the Prospectus,
together with the related schedules and notes, as well as those
financial statements, schedules and notes of any other entity included
therein, present fairly the financial position of the Company and its
consolidated subsidiaries, or such other entity, as the case may be,
at the dates indicated and the statement of operations, stockholders'
equity and cash flows of the Company and its consolidated
subsidiaries, or such other entity, as the case may be, for the
periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement
and the Prospectus present fairly in accordance with GAAP the
information required to be stated therein. The selected financial
data and the summary financial information included in the Prospectus
present fairly the information shown therein and have been compiled on
a basis consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus. In
addition, any pro forma financial statements of the Company and its
subsidiaries and the related notes thereto included in the
Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise (a "Material Adverse Effect"), whether or not arising in
the ordinary course of business, (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those arising in the ordinary course of business, that are material
with respect to the Company and its subsidiaries considered as one
enterprise and (C) except for regular quarterly dividends on the
Company's common stock, in amounts per share that are consistent with
past practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(vi) GOOD STANDING OF THE COMPANY. The Company has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of Illinois and has corporate
11
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into
and perform its obligations under, or as contemplated under, this
Agreement. The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction
in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not
result in a Material Adverse Effect.
(vii) GOOD STANDING OF SUBSIDIARIES. Each of Illinois
Power Company, Illinova Generating Company, Illinova Energy Partners,
Inc. and such other subsidiaries of the Company, if any, that are
"significant subsidiaries" as defined in Rule 1-02 of Regulation S-X
promulgated under the 1933 Act (each, a "Subsidiary" and,
collectively, the "Subsidiaries") has been duly organized and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good
standing would not result in a Material Adverse Effect. Except as
otherwise stated in the Registration Statement and the Prospectus, all
of the issued and outstanding capital stock of each Subsidiary has
been duly authorized and is validly issued, fully paid and non-
assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity. None of the outstanding
shares of capital stock of the Subsidiaries was issued in violation of
preemptive or other similar rights arising by operation of law, under
the charter or by-laws of any subsidiary or under any agreement to
which the Company or any subsidiary is a party, or otherwise.
(viii) AUTHORIZATION OF AGREEMENT. This Agreement has
been duly authorized, executed and delivered by the Company.
(ix) AUTHORIZATION OF NOTES. The Notes have been duly
authorized by the Company for issuance and sale pursuant to this
Agreement and, when issued, authenticated and delivered in the manner
provided for in the Indenture and delivered against payment of the
consideration therefor, will constitute valid and legally binding
obligations of the Company enforceable against the Company in
accordance with their terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting creditors' rights generally or by general equitable
principles (whether considered at a proceeding at law or in equity),
and except further as may be limited by (A) requirements that a claim
with respect to any Notes denominated other than in U.S. dollars (or a
foreign or composite currency judgment in respect of such claim) be
12
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or (B) governmental authority to
limit, delay or prohibit the making of payments outside the United
States. The Notes will be in the form contemplated by, and each
registered holder thereof is entitled to the benefits of, the
Indenture.
(x) AUTHORIZATION OF INDENTURE. The Indenture has been
duly authorized, executed and delivered by the Company and constitutes
a valid and legally binding agreement of the Company enforceable
against the Company in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or
by general equitable principles (whether considered at a proceeding at
law or in equity).
(xi) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company
nor any of its Subsidiaries is in violation of its charter or by-laws
or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them may be bound, or to
which any of the property or assets of the Company or any Subsidiary
is subject (collectively, the "Agreements and Instruments"), except
for such defaults that would not result in a Material Adverse Effect.
The execution, delivery and performance of this Agreement and the
Indenture, and any other agreement or instrument entered into or
issued or to be entered into or issued by the Company in connection
with the transactions contemplated hereby or thereby or in the
Registration Statement and the Prospectus and the consummation of the
transactions contemplated herein and in the Registration Statement and
the Prospectus (including the issuance and sale of the Notes and the
use of the proceeds from the sale of the Notes as described in the
Prospectus) and compliance by the Company with its obligations
hereunder and thereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any assets, properties or operations of the
Company or any Subsidiary pursuant to any Agreements and Instruments,
except for such conflicts, breaches, defaults, events or liens,
charges or encumbrances that would not result in a Material Adverse
Effect, nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any Subsidiary or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any
Subsidiary or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition that gives
the holder of any note, debenture or other evidence of indebtedness
13
(or any person acting on such holder's behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xii) ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding, inquiry or investigation before or by any court or
governmental agency or body, domestic or foreign, now pending, or to
the knowledge of the Company threatened, against or affecting the
Company or any Subsidiary thereof that is required to be disclosed in
the Registration Statement and the Prospectus (other than as stated
therein), or that might reasonably be expected to result in a Material
Adverse Effect, or that might reasonably be expected to materially and
adversely affect the consummation of this Agreement, the Indenture or
the transactions contemplated herein or therein.
(xiii) ACCURACY OF EXHIBITS. There are no contracts or
documents that are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and/or filed as required.
(xiv) ABSENCE OF FURTHER REQUIREMENTS. No filing with,
or authorization, approval, consent, license, order registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations under this Agreement or in connection with the
transactions contemplated under this Agreement or the Indenture,
except such as have been already obtained or as may be required under
state securities laws.
(xv) POSSESSION OF LICENSES AND PERMITS. The Company and
its subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, the "Governmental Licenses")
issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by
them. Neither the Company nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or modification
of any Governmental Licenses that, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in
a Material Adverse Effect.
(xvi) INVESTMENT COMPANY ACT. The Company is not, and
upon the issuance and sale of the Notes as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act").
(xvii) ENVIRONMENTAL LAWS. Except as otherwise stated in
the Registration Statement and the Prospectus and except such
violations as would not, singly or in the aggregate, result in a
Material Adverse Effect, neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
14
statute, law, rule, regulation, ordinance, code, policy or rule of
common law and any judicial or administrative interpretation thereof
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum
products (collectively, the "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials.
(xviii) COMMODITY EXCHANGE ACT. Foreign Currency Notes
(as defined in the Prospectus), upon issuance, will be excluded or
exempted under, or beyond the purview of, the Commodity Exchange Act,
as amended (the "Commodity Exchange Act"), and the rules and
regulations of the Commodity Futures Trading Commission under the
Commodity Exchange Act (the "Commodity Exchange Act Regulations").
(xix) RATINGS. The Medium-Term Note Program under which
the Notes are issued (the "Program") is rated Baa3 by Moody's
Investors Service, Inc. and BBB- by Standard & Poor's Ratings Service,
or such other rating as to which the Company shall have most recently
notified the Agents of pursuant to Section 4(a) hereof.
(xx) PUBLIC UTILITY HOLDING COMPANY ACT OF 1935. The
Company and Illinois Power Company are holding companies within the
meaning of the Public Utility Holding Company Act of 1935, as amended;
however, by virtue of having filed an appropriate application under
the provisions of Section 3(a) of such Act, the Company and Illinois
Power Company are exempt from all of the provisions of such Act,
except Section 9(a)(2) thereof.
(b) ADDITIONAL CERTIFICATIONS. Any certificate signed by any
officer of the Company and delivered to one or more Agents or to
counsel for the Agents in connection with an offering of Notes to one
or more Agents as principal or through an Agent as agent shall be
deemed a representation and warranty by the Company to such Agent or
Agents as to the matters covered thereby on the date of such
certificate and, unless subsequently amended or supplemented, at each
Representation Date subsequent thereto.
SECTION 3. PURCHASES AS PRINCIPAL; SOLICITATIONS AS AGENT.
(a) PURCHASES AS PRINCIPAL. Unless otherwise agreed to by an
Agent and the Company, Notes purchased from the Company by the Agents,
individually or in a syndicate, as principal shall be made in
accordance with terms agreed upon between such Agent or Agents and the
Company (which terms, unless otherwise agreed, shall, to the extent
applicable, include those terms specified in Exhibit A hereto and
shall be agreed upon orally with written confirmation prepared by such
15
Agent or Agents and mailed or sent by facsimile transmission to the
Company). An Agent's commitment to purchase Notes as principal shall
be deemed to have been made on the basis of the representations and
warranties of the Company herein contained and shall be subject to the
terms and conditions herein set forth. Unless the context otherwise
requires, references herein to "this Agreement" shall include the
applicable agreement of one or more Agents to purchase Notes from the
Company as principal. Each purchase of Notes, unless otherwise
agreed, shall be at a discount from the principal amount of each such
Note equivalent to the applicable commission set forth in Schedule A
hereto. The Agents may engage the services of any broker or dealer in
connection with the resale of the Notes purchased by them as principal
and may allow all or any portion of the discount received from the
Company in connection with such purchases to such brokers or dealers.
At the time of each purchase of Notes from the Company by one or more
Agents as principal, such Agent or Agents shall specify the
requirements for the officers' certificate, opinion of counsel and
comfort letter pursuant to Sections 7(b), 7(c) and 7(d) hereof.
If the Company and two or more Agents enter into an agreement
pursuant to which such Agents agree to purchase Notes from the Company
as principal, severally and not jointly as set forth in such
agreement, and one or more of such Agents shall fail at the Settlement
Date to purchase the Notes that it or they are obligated to purchase
(the "Defaulted Notes"), then the nondefaulting Agents shall have the
right, within 24 hours thereafter, to make arrangements for one of
them or one or more other Agents or underwriters to purchase all, but
not less than all, of the Defaulted Notes in such amounts as may be
agreed upon and upon the terms herein set forth; provided, however,
that if such arrangements shall not have been completed within such
24-hour period, then:
(i) if the aggregate principal amount of Defaulted Notes
does not exceed 10% of the aggregate principal amount of Notes to be
so purchased by all of such Agents on the Settlement Date, the
nondefaulting Agents shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their
respective initial underwriting obligations bear to the underwriting
obligations of all nondefaulting Agents; or
(ii) if the aggregate principal amount of Defaulted Notes
exceeds 10% of the aggregate principal amount of Notes to be so
purchased by all of such Agents on the Settlement Date, such agreement
shall terminate without liability on the part of any nondefaulting
Agent.
No action taken pursuant to this paragraph shall relieve any
defaulting Agent from liability in respect of its default pursuant to
this Section 3(a). In the event of any such default pursuant to this
Section 3(a) that does not result in a termination of such agreement,
either the nondefaulting Agents or the Company shall have the right to
postpone the Settlement Date for a period not exceeding seven days in
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order to effect any required changes in the Registration Statement or
the Prospectus or in any other documents or arrangements.
(b) SOLICITATIONS AS AGENT. On the basis of the representations
and warranties herein contained, but subject to the terms and
conditions herein set forth, when agreed by the Company and an Agent,
such Agent, as an agent of the Company, upon receipt of instructions
from the Company, will use its reasonable efforts to solicit offers
for the purchase of Notes upon the terms set forth in the Prospectus.
The Agents are not authorized to appoint sub-agents with respect to
Notes sold through them as agent. All Notes sold through an Agent as
agent will be sold at 100% of their principal amount unless otherwise
agreed upon between the Company and such Agent.
The Company reserves the right, in its sole discretion, to
suspend solicitation of offers for the purchase of Notes through an
Agent, as an agent of the Company, commencing at any time for any
period of time or permanently. As soon as practicable after receipt
of instructions from the Company, such Agent will suspend solicitation
of offers for the purchase of Notes from the Company until such time
as the Company has advised such Agent that such solicitation may be
resumed.
The Company agrees to pay each Agent a commission, in the form of
a discount, equal to the applicable percentage of the principal amount
of each Note sold by the Company as a result of a solicitation made by
such Agent, as an agent of the Company, as set forth in Schedule A
hereto. The Company will not be required to pay a commission or
discount to any Agent in connection with any sale of Notes made by the
Company directly to one or more investors that did not result,
directly or indirectly, from a solicitation made by such Agent.
(c) ADMINISTRATIVE PROCEDURES. The purchase price, interest
rate or formula, maturity date and other terms of the Notes specified
in Exhibit A hereto (as applicable) shall be agreed upon between the
Company and the applicable Agent(s) and specified in the applicable
Pricing Supplement to be prepared by the Company concurrently with
each acceptance by the Company of an offer for the purchase of Notes.
Except as otherwise specified in the applicable Pricing Supplement,
the Notes will be issued in denominations of $1,000 or any larger
amount that is an integral multiple of $1,000. Administrative
procedures with respect to the sale of the Notes (the "Procedures")
shall be agreed upon from time to time among the Company, the Agents
and the Trustee. The Agents and the Company agree to perform, and the
Company agrees to cause the Trustee to agree to perform, their
respective duties and obligations specifically provided to be
performed by them in the Procedures.
SECTION 4. COVENANTS OF THE COMPANY.
The Company covenants and agrees with each Agent as follows:
17
(a) NOTICE OF CERTAIN EVENTS. The Company will notify the
Agents immediately, and confirm such notice in writing, of (i) the
effectiveness of any post-effective amendment to the Registration
Statement or the filing of any amendment or supplement to the
Prospectus (other than any Pricing Supplement or an amendment or
supplement relating solely to the offering of securities other than
the Notes), (ii) the receipt of any comments from the Commission,
(iii) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus or for additional information, (iv) the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement, or of any order preventing or suspending the
use of any preliminary prospectus, or of the suspension of the
qualification of the Notes for offering or sale in any jurisdiction,
or of the initiation of any proceedings for that purpose or (v) any
change in the rating assigned by any nationally recognized statistical
rating organization to the Program or any debt securities (including
the Notes) of the Company, or the public announcement by any
nationally recognized statistical rating organization that it has
under surveillance or review, with possible negative implications, its
rating of the Program or any such debt securities, or the withdrawal
by any nationally recognized statistical rating organization of its
rating of the Program or any such debt securities. The Company will
make every reasonable effort to prevent the issuance of any stop order
of the Commission and, if any such stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) FILING OR USE OF AMENDMENTS. The Company will give the
Agents advance notice of its intention to file or prepare any
additional registration statement with respect to the registration of
additional Notes, any amendment to the Registration Statement
(including any filing under Rule 462(b) of the 1933 Act Regulations)
or any amendment or supplement to the prospectus included in the
Registration Statement at the time it became effective or to the
Prospectus (other than a Pricing Supplement or an amendment or
supplement relating solely to the offering of securities other than
the Notes), whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish to the Agents copies of any such document a
reasonable amount of time prior to such proposed filing or use, as the
case may be, and will not file any such document to which the Agents
or counsel for the Agents shall reasonably object.
(c) DELIVERY OF THE REGISTRATION STATEMENT. The Company has
delivered or will deliver to each Agent and to counsel for the Agents,
without charge, a copy of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents
incorporated or deemed to be incorporated by reference therein),
certified by an officer of the Company, and copies of all consents and
certificates of experts and will also deliver to each Agent and to
counsel for the Agents, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment
18
thereto (without exhibits) for each of the Agents. The Registration
Statement and each amendment thereto furnished to the Agents was and
will be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) DELIVERY OF THE PROSPECTUS. The Company will deliver to
each Agent, without charge, as many copies of each preliminary
prospectus as such Agent may reasonably request, and the Company
hereby consents to the use of such copies for purposes permitted by
the 1933 Act. The Company will furnish to each Agent, without charge,
such number of copies of the Prospectus (as amended or supplemented)
as such Agent may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Agents was and will
be identical to any electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(e) PREPARATION OF PRICING SUPPLEMENTS. The Company will
prepare, with respect to any Notes to be sold to or through one or
more Agents pursuant to this Agreement, a Pricing Supplement with
respect to such Notes in a form previously approved by the Agents.
The Company will deliver such Pricing Supplement to the applicable
Agent no later than noon, New York City time, on the business day
following the date of the Company's acceptance of the offer for the
purchase of such Notes and will file such Pricing Supplement pursuant
to Rule 424(b)(3) of the 1933 Act Regulations not later than the close
of business of the Commission on the fifth business day after the date
on which such Pricing Supplement is first used.
(f) PROSPECTUS REVISIONS -- MATERIAL CHANGES. Except as
otherwise provided in Section 4(m) hereof, if at any time during the
term of this Agreement any event shall occur or condition shall exist
as a result of which it is necessary, in the opinion of counsel for
the Agents or counsel for the Company, to amend the Registration
Statement in order that the Registration Statement will 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 or to amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time the Prospectus is delivered to a
purchaser, or if it shall be necessary, in the opinion of either such
counsel, to amend the Registration Statement or amend or supplement
the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company shall give immediate
notice, confirmed in writing, to the Agents to cease the solicitation
of offers for the purchase of Notes in their capacity as agents and to
cease sales of any Notes they may then own as principal, and the
Company will promptly prepare and file with the Commission, subject to
Section 4(b) hereof, such amendment or supplement as may be necessary
19
to correct such statement or omission or to make the Registration
Statement and Prospectus comply with such requirements, and the
Company will furnish to the Agents, without charge, such number of
copies of such amendment or supplement as the Agents may reasonably
request. In addition, the Company will comply with the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act Regulations so as
to permit the completion of the distribution of each offering of
Notes.
(g) PROSPECTUS REVISIONS -- PERIODIC FINANCIAL INFORMATION.
Except as otherwise provided in Section 4(m) hereof, on or prior to
the date on which there shall be released to the general public
interim financial statement information related to the Company with
respect to each of the first three quarters of any fiscal year or
preliminary financial statement information with respect to any fiscal
year, the Company shall furnish such information to the Agents,
confirmed in writing, and shall cause the Prospectus to be amended or
supplemented to include financial information with respect thereto and
corresponding information for the comparable period of the preceding
fiscal year, as well as such other information and explanations as
shall be necessary for an understanding thereof or as shall be
required by the 1933 Act or the 1933 Act Regulations.
(h) PROSPECTUS REVISIONS -- AUDITED FINANCIAL INFORMATION.
Except as otherwise provided in Section 4(m) hereof, on or prior to
the date on which there shall be released to the general public
financial information included in or derived from the audited
consolidated financial statements of the Company for the preceding
fiscal year, the Company shall furnish such information to the Agents,
confirmed in writing, and shall cause the Prospectus to be amended or
supplemented to include such audited consolidated financial statements
and the report or reports, and consent or consents to such inclusion,
of the independent accountants with respect thereto, as well as such
other information and explanations as shall be necessary for an
understanding of such consolidated financial statements or as shall be
required by the 1933 Act or the 1933 Act Regulations.
(i) EARNING STATEMENTS. The Company will make generally
available to its securityholders as soon as practicable an earning
statement for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(j) REPORTING REQUIREMENTS. The Company, during the period when
the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods prescribed
by the 1934 Act and the 1934 Act Regulations.
(k) RESTRICTION ON OFFERS AND SALES OF SECURITIES. If agreed to
between one or more Agents acting as principal and the Company,
between the date of the agreement by such Agent(s) to purchase the
related Notes from the Company and the Settlement Date with respect
20
thereto, the Company will not, without the prior written consent of
such Agent(s), issue, sell, offer or contract to sell, grant any
option for the sale of, or otherwise dispose of, any debt securities
of the Company (other than the Notes that are to be sold pursuant to
such agreement or commercial paper in the ordinary course of
business).
(l) USE OF PROCEEDS. The Company will use the net proceeds
received by it from the issuance and sale of the Notes in the manner
specified in the Prospectus.
(m) SUSPENSION OF CERTAIN OBLIGATIONS. The Company shall not be
required to comply with the provisions of subsections (f), (g) or (h)
of this Section 4 or the provisions of subsections (b), (c) or (d) of
Section 7 during any period from the time (i) the Agents shall have
been instructed in writing by the Company to suspend solicitation of
offers for the purchase of Notes in their capacity as agents and (ii)
no Agent shall then hold any Notes purchased from the Company as
principal, as the case may be, until the time the Company shall
determine that solicitation of offers for the purchase of Notes should
be resumed or an Agent shall subsequently purchase Notes from the
Company as principal. However, prior to instructing the Agents to
resume the solicitation of offers to purchase Notes or prior to
purchasing Notes from the Company as principal, the Company shall be
required to comply with the provisions of subsections (b), (c) and (d)
of Section 7 by delivering or causing to be delivered the
certificates, opinions and letters that would have otherwise been
required under each such subsection unless the Agents otherwise
determine in their sole discretion that such documents in respect of
prior periods need not be delivered.
(n) BLUE SKY QUALIFICATIONS. The Company will cooperate with
the Agents and with counsel for the Agents in connection with the
registration or qualification of the Notes for offering and sale by
the Notes under the securities or blue sky laws of such jurisdictions
as the Agents may designate and will file such consents to service of
process or other documents necessary or appropriate in order to effect
such registration or qualification; provided that in no event shall
the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified, to subject itself to taxation in
respect of doing business in any jurisdiction where it is not
otherwise so subject or to take any action that would subject it to
service of process in suits, other than those arising out of the
offering or sale of the Notes, in any jurisdiction where it is not now
so subject.
SECTION 5. CONDITIONS OF AGENTS' OBLIGATIONS.
The obligations of one or more Agents to purchase Notes from the
Company as principal and to solicit offers for the purchase of Notes
as an agent of the Company, and the obligations of any purchasers of
Notes sold through an Agent as an agent of the Company, will be
21
subject to the accuracy of the representations and warranties on the
part of the Company herein contained or contained in any certificate
of an officer of the Company delivered pursuant to the provisions
hereof, to the performance and observance by the Company of its
covenants and other obligations hereunder, and to the following
additional conditions precedent:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement (including any Rule 462(b) Registration Statement) has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act and no proceedings for that purpose shall have been
instituted or shall be pending or threatened by the Commission, and
any request on the part of the Commission for additional information
shall have been complied with to the reasonable satisfaction of
counsel to the Agents.
(b) LEGAL OPINIONS. On the date hereof, the Agents shall have
received the following legal opinions, dated as of the date hereof and
in form and substance satisfactory to the Agents:
(1) OPINION OF COUNSEL FOR THE COMPANY. The favorable
opinion of Schiff Hardin & Waite, counsel for the Company,
to the effect set forth in Exhibit B hereto and to such
further effect as the Agents may reasonably request.
(2) OPINION OF COUNSEL FOR THE AGENTS. The favorable
opinion of Winthrop, Stimson, Putnam & Roberts, counsel for
the Agents, with respect to the matters set forth in (5),
(6), (7), (8), (13), (14) and (16) and the penultimate
paragraph of Exhibit B hereto. In giving such opinion, such
counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York
and the federal law of the United States, upon the opinions
of counsel satisfactory to Merrill Lynch (which, in the case
of the law of the State of Illinois, shall include Schiff
Hardin & Waite). Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of
officers of the Company and its subsidiaries and
certificates of public officials.
(c) OFFICERS' CERTIFICATE. On the date hereof, there shall not
have been, since the respective dates as of which information is given
in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of
business, and the Agents shall have received a certificate of the
President of the Company. a Vice President of the Company or an
officer of Illinois Power Company who represents that he or she has
general knowledge of the business affairs of the Company and the chief
22
financial officer or chief accounting officer of the Company, dated as
of the date hereof, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties of
the Company herein contained are true and correct with the same force
and effect as though expressly made at and as of the date of such
certificate, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at
or prior to the date of such certificate, and (iv) 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 or, to the best of such officer's knowledge, are threatened by
the Commission.
(d) ACCOUNTANT'S COMFORT LETTER. On the date hereof, the Agents
shall have received from Price Waterhouse LLP a letter dated such
date, to the effect as the Agents may reasonably request.
(e) ADDITIONAL DOCUMENTS. On the date hereof, counsel to the
Agents shall have been furnished with such documents and opinions as
such counsel may require for the purpose of enabling such counsel to
pass upon the issuance and sale of Notes as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of
the representations and warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of Notes as herein
contemplated shall be satisfactory in form and substance to the Agents
and to counsel to the Agents.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the applicable Agent or Agents by notice to the Company
at any time and any such termination shall be without liability of any
party to any other party except as provided in Section 10 hereof and
except that Sections 8, 9, 11, 14 and 15 hereof shall survive any such
termination and remain in full force and effect.
SECTION 6. DELIVERY OF AND PAYMENT FOR NOTES SOLD THROUGH AN AGENT
AS AGENT.
Delivery of Notes sold through an Agent as an agent of the
Company shall be made by the Company to such Agent for the account of
any purchaser only against payment therefor in immediately available
funds. In the event that a purchaser shall fail either to accept
delivery of or to make payment for a Note on the date fixed for
settlement, such Agent shall promptly notify the Company and deliver
such Note to the Company and, if such Agent has theretofore paid the
Company for such Note, the Company will promptly return such funds to
such Agent. If such failure has occurred for any reason other than
default by such Agent in the performance of its obligations hereunder,
the Company will reimburse such Agent on an equitable basis for its
loss of the use of the funds for the period such funds were credited
to the Company's account.
23
SECTION 7. ADDITIONAL COVENANTS OF THE COMPANY.
The Company further covenants and agrees with each Agent as
follows:
(a) REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each
acceptance by the Company of an offer for the purchase of Notes
(whether to one or more Agents as principal or through an Agent as
agent), and each delivery of Notes (whether to one or more Agents as
principal or through an Agent as agent), shall be deemed to be an
affirmation that the representations and warranties of the Company
herein contained and contained in any certificate theretofore
delivered to the Agents pursuant hereto are true and correct at the
time of such acceptance or sale, as the case may be, and an
undertaking that such representations and warranties will be true and
correct at the time of delivery to such Agent(s) or to the purchaser
or its agent, as the case may be, of the Notes relating to such
acceptance or sale, as the case may be, as though made at and as of
each such time (it being understood that such representations and
warranties shall relate to the Registration Statement and Prospectus
as amended and supplemented to each such time).
(b) SUBSEQUENT DELIVERY OF OFFICER'S CERTIFICATE. Each time
that (i) the Registration Statement or the Prospectus shall be amended
or supplemented (other than by a Pricing Supplement or an amendment or
supplement relating solely to the offering of securities other than
the Notes), (ii) (if required in connection with the purchase of Notes
from the Company by one or more Agents as principal) the Company sells
Notes to one or more Agents as principal or (iii) the Company sells
Notes in a form not previously certified to the Agents by the Company,
the Company shall furnish or cause to be furnished to the Agent(s),
forthwith a certificate dated the date of filing with the Commission
or the date of effectiveness of such amendment or supplement, as
applicable, or the date of such sale, as the case may be, in form
satisfactory to the Agent(s) to the effect that the statements
contained in the certificate referred to in Section 5(c) hereof that
was last furnished to the Agents are true and correct at the time of
the filing or effectiveness of such amendment or supplement, as
applicable, or the time of such sale, as the case may be, as though
made at and as of such time (except that such statements shall be
deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to such time) or, in lieu of such
certificate, a certificate of the same tenor as the certificate
referred to in Section 5(c) hereof, modified as necessary to relate to
the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such certificate (it being
understood that, in the case of clause (ii) above, any such
certificate shall also include a certification that there has been no
material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, since the date of the
24
agreement by such Agent(s) to purchase Notes from the Company as
principal).
(c) SUBSEQUENT DELIVERY OF LEGAL OPINION. Each time that (i)
the Registration Statement or the Prospectus shall be amended or
supplemented (other than by a Pricing Supplement, an amendment or
supplement relating solely to the offering of securities other than
the Notes, an amendment or supplement providing solely for the
inclusion of financial information or, unless the Agents reasonably
request, a Current Report on Form 8-K filed by the Company with the
Commission under the 1934 Act and the 1934 Act Regulations), (ii) (if
required in connection with the purchase of Notes from the Company by
one or more Agents as principal) the Company sells Notes to one or
more Agents as principal or (iii) the Company sells Notes in a form
not previously certified to the Agents by the Company, the Company
shall furnish or cause to be furnished forthwith to the Agent(s) and
to counsel to the Agents the written opinion of Schiff Hardin & Waite,
counsel to the Company, or other counsel satisfactory to the Agent(s),
dated the date of filing with the Commission or the date of
effectiveness of such amendment or supplement, as applicable, or the
date of such sale, as the case may be, in form and substance
satisfactory to the Agent(s), of the same tenor as the opinion
referred to in Section 5(b)(1) hereof, but modified, as necessary, to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion or, in lieu of
such opinion, counsel last furnishing such opinion to the Agents shall
furnish the Agent(s) with a letter substantially to the effect that
the Agent(s) may rely on such last opinion to the same extent as
though it was dated the date of such letter authorizing reliance
(except that statements in such last opinion shall be deemed to relate
to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such letter authorizing
reliance). Such opinion shall be delivered to the Agent(s) not later
than the date of such sale or within ten business days subsequent to
the date of the filing with the Commission or the effectiveness of
such amendment or supplement, as applicable.
(d) SUBSEQUENT DELIVERY OF COMFORT LETTER. Each time that (i)
the Registration Statement or the Prospectus shall be amended or
supplemented to include additional financial information (other than
by a Pricing Supplement or an amendment or supplement relating solely
to the offering of securities other than the Notes) or (ii) (if
required in connection with the purchase of Notes from the Company by
one or more Agents as principal) the Company sells Notes to one or
more Agents as principal, the Company shall cause Price Waterhouse LLP
forthwith to furnish to the Agent(s) a letter, dated the date of
filing with the Commission or the date of effectiveness of such
amendment or supplement, as applicable, or the date of such sale, as
the case may be, in form satisfactory to the Agent(s), of the same
tenor as the letter referred to in Section 5(d) hereof but modified to
relate to the Registration Statement and Prospectus as amended and
supplemented to the date of such letter. Such letter shall be
25
delivered to the Agent(s) not later than the date of such sale or
within ten business days subsequent to the date of the filing with the
Commission or the effectiveness of such amendment or supplement, as
applicable.
SECTION 8. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE AGENTS. The Company agrees to
indemnify and hold harmless each Agent and each person, if any, who
controls such Agent within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of an
untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading,
or arising out of an untrue statement or alleged untrue
statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation,
or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission, provided
that (subject to Section 8(d) hereof) any such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as
incurred (including the fees and disbursements of counsel
chosen by such Agent), reasonably incurred in investigating,
preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any
such expense is not paid under subparagraph (i) or (ii)
above;
PROVIDED, HOWEVER, that this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an
untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with written information
26
furnished to the Company by the Agents expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. Each
Agent severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement
and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in
the indemnity contained in Section 8(a) hereof, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by the
Agents expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus
(or any amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified
party shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of
which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any
liability that it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section
8(a) hereof, counsel to the indemnified parties shall be selected by
the applicable Agent(s) and, in the case of parties indemnified
pursuant to Section 8(b) hereof, counsel to the indemnified parties
shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action;
PROVIDED, HOWEVER, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified
parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under
this Section 8 or 9 hereof (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
27
investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at
any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 8(a)(ii) effected
without its written consent if (i) such settlement is entered into
more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall
not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 hereof is for
any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party
shall contribute to the aggregate amount of such losses, liabilities,
claims, damages and expenses incurred by such indemnified party, as
incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the
applicable Agent(s), on the other hand, from the offering of the Notes
that were the subject of the claim for indemnification or (ii) if the
allocation provided by clause (i) is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault
of the Company, on the one hand, and the applicable Agent(s), on the
other hand, in connection with the statements or omissions that
resulted in such losses, liabilities, claims, damages or expenses, as
well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand,
and the applicable Agent(s), on the other hand, in connection with the
offering of the Notes that were the subject of the claim for
indemnification shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of such Notes
(before deducting expenses) received by the Company and the total
discount or commission received by each applicable Agent, as the case
may be, bears to the aggregate initial offering price of such Notes.
The relative fault of the Company, on the one hand, and the
applicable Agent(s), on the other hand, shall be determined by
reference to, among other things, whether any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state
a material fact relates to information supplied by the Company or by
the applicable Agent(s) and the parties' relative intent, knowledge,
28
access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Agents agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the applicable Agent(s) were treated
as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to
above in this Section 9. The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and
referred to above in this Section 9 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party
in investigating, preparing or defending against any litigation, or
any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any
applicable untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding the provisions of this Section 9, (i) no Agent
shall be required to contribute any amount in excess of the amount by
which the total discount or commission received by such Agent in
connection with the offering of the Notes that were the subject of the
claim for indemnification exceeds the amount of any damages that such
Agent has otherwise been required to pay by reason of any applicable
untrue or alleged untrue statement or omission or alleged omission and
(ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. In addition, in connection with an offering of
Notes purchased from the Company by two or more Agents as principal,
the respective obligations of such Agents to contribute pursuant to
this Section 9 are several, and not joint, in proportion to the
aggregate principal amount of Notes that each such Agent has agreed to
purchase from the Company.
For purposes of this Section 9, each person, if any, who controls
an Agent within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as such
Agent, and each director of the Company, each officer of the Company
and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Company.
SECTION 10. PAYMENT OF EXPENSES.
The Company will pay all expenses incident to the performance of
its obligations under this Agreement, including:
(a) The preparation, filing, printing and delivery of the
Registration Statement as originally filed and all amendments thereto
and any preliminary prospectus, the Prospectus and any amendments or
supplements thereto;
29
(b) The preparation, printing and delivery of this Agreement;
(c) The preparation, issuance and delivery of the Notes,
including any fees and expenses relating to the eligibility and
issuance of Notes in book-entry form and the cost of obtaining CUSIP
or other identification numbers for the Notes;
(d) The fees and disbursements of the Company's accountants,
counsel and other advisors or agents (including any calculation agent
or exchange rate agent) and of the Trustee and its counsel;
(e) The reasonable fees and disbursements of counsel to the
Agents incurred in connection with the establishment of the Program
and incurred from time to time in connection with the transactions
contemplated hereby;
(f) The qualification of the Notes under state securities laws
in accordance with the provisions of Section 4(n) hereof, including
filing fees and the reasonable fees and disbursements of counsel for
the Agents in connection therewith and in connection with the
preparation of any blue sky survey;
(g) The fees charged by nationally recognized statistical rating
organizations for the rating of the Program and the Notes;
(h) The fees and expenses incurred in connection with any
listing of Notes on a securities exchange;
(i) The filing fees incident to, and the reasonable fees and
disbursements of counsel to the Agents in connection with, the review,
if any, by the National Association of Securities Dealers, Inc. (the
"NASD"); and
(j) Any advertising and other out-of-pocket expenses of the
Agents incurred with the approval of the Company.
SECTION 11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto or thereto shall remain
operative and in full force and effect, regardless of any
investigation made by or on behalf of the Agents or any controlling
person of an Agent, or by or on behalf of the Company, and shall
survive each delivery of and payment for the Notes.
SECTION 12. TERMINATION.
(a) TERMINATION OF THIS AGREEMENT. This Agreement (excluding
any agreement by one or more Agents to purchase Notes from the Company
as principal) may be terminated for any reason, at any time by either
30
the Company or an Agent, as to itself, upon the giving of 30 days'
prior written notice of such termination to the other party hereto.
(b) TERMINATION OF AGREEMENT TO PURCHASE NOTES AS PRINCIPAL.
The applicable Agent(s) may terminate any agreement by such Agent(s)
to purchase Notes from the Company as principal, immediately upon
notice to the Company, at any time prior to the Settlement Date
relating thereto, if (i) there has been, since the date of such
agreement or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of
business, or (ii) there has occurred any material adverse change in
the financial markets in the United States or, if such Notes are
denominated and/or payable in, or indexed to, one or more foreign or
composite currencies, in the international financial markets, or any
outbreak of hostilities or escalation thereof or other calamity or
crisis or any change or development or event involving a prospective
change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in
the judgment of such Agent(s), impracticable to market such Notes or
enforce contracts for the sale of such Notes, or (iii) trading in any
securities of the Company has been suspended or limited by the
Commission, the New York Stock Exchange or the Chicago Stock Exchange,
or if trading generally on the New York Stock Exchange or the American
Stock Exchange or in the Nasdaq National Market has been suspended or
limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by either of said
exchanges or by such system or by order of the Commission, the NASD or
any other governmental authority, or (iv) a banking moratorium has
been declared by either Federal or New York authorities or by the
relevant authorities in the country or countries of origin of any
foreign or composite currency in which such Notes are denominated
and/or payable, or (v) the rating assigned by any nationally
recognized statistical rating organization to the Program or any debt
securities (including the Notes) of the Company as of the date of such
agreement shall have been lowered or withdrawn since that date or if
any such rating organization shall have publicly announced that it has
under surveillance or review its rating of the Program or any such
debt securities with possible negative implications or without any
indication as to direction, or (vi) there shall have come to the
attention of such Agent(s) any facts that would cause such Agent(s) to
reasonably believe that the Prospectus, at the time it was required to
be delivered to a purchaser of such Notes, included an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time of such delivery, not misleading.
(c) GENERAL. In the event of any termination of this Agreement
pursuant to clause (a) of this Section 12, this Agreement shall remain
in full force and effect with respect to any Agent as to which
31
termination has not occurred and neither the Company nor the
terminated Agent will have any liability to the other, except that (i)
the terminated Agent shall be entitled to any commissions earned in
accordance with the third paragraph of Section 3(b) hereof, (ii) if at
the time of termination (a) the terminated Agent shall own any Notes
purchased by it from the Company as principal or (b) an offer to
purchase any of the Notes has been accepted by the Company but the
time of delivery to the purchaser or his agent of such Notes relating
thereto has not occurred, the covenants set forth in Sections 1(d), 4
and 7 hereof shall remain in effect until such Notes are so resold or
delivered, as the case may be, and (iii) the covenant set forth in
Section 4(i) hereof, the provisions of Section 10 hereof, the
indemnity and contribution agreements set forth in Sections 8 and 9
hereof and the provisions of Sections 11, 14 and 15 hereof shall
remain in effect.
SECTION 13. NOTICES.
Unless otherwise provided herein, all notices required under the
terms and provisions hereof shall be in writing, either delivered by
hand, by mail or by telex, telecopier or telegram, and any such notice
shall be effective when received at the address specified below.
If to the Company:
Illinova Corporation
c/o Illinois Power Company
500 South 27th Street
Decatur, Illinois 62525
Attention: Treasurer
Telecopy No.: (217) 424-6659
If to the Agents:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower-10th Floor
New York, New York 10281-1310
Attention: MTN Product Management
Telecopy No.: (212) 449-2234
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Attention: Medium-Term Note Programs Martha Bailey
Telecopy No.: (212) 783-2274
or at such other address as such party may designate from time to time
by notice duly given in accordance with the terms of this Section 13.
32
SECTION 14. PARTIES.
This Agreement shall inure to the benefit of and be binding upon
the Agents and the Company and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling
persons, officers and directors referred to in Sections 8 and 9 hereof
and their heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive
benefit of the parties hereto and their respective successors, and
said controlling persons, officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Notes shall be deemed to be a successor
by reason merely of such purchase.
SECTION 15. GOVERNING LAW; FORUM.
The rights and duties of the parties hereto under this Agreement
shall be governed by the laws of the State of New York. Any suit,
action or proceeding brought by the Company against any Agent in
connection with or arising under this agreement shall be brought
solely in the state or federal court of appropriate jurisdiction
located in the Borough of Manhattan, the City of New York.
SECTION 16. EFFECT OF HEADINGS.
The Section headings herein are for convenience only and shall
not affect the construction hereof.
SECTION 17. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and,
if executed in more than one counterpart, the executed counterparts
hereof shall constitute a single instrument.
33
If the foregoing is in accordance with the Agents' understanding
of our agreement, please sign and return to the Company a counterpart
hereof, whereupon this Agreement, along with all counterparts, will
become a binding agreement among the Agents and the Company in
accordance with its terms.
Very truly yours,
ILLINOVA CORPORATION
By: /s/ Larry F. Altenbaumer
-------------------------
Name: Larry F. Altenbaumer
Title: Chief Financial Officer,
Treasurer and Controller
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Scott G. Primrose
------------------------------
Scott G. Primrose,
Authorized Signatory
SALOMON BROTHERS INC
By: /s/ Kimberly Blue
------------------------------
Kimberly Blue, Director
34
SCHEDULE A
As compensation for the services of the Agents hereunder, the
Company shall pay the applicable Agent, on a discount basis, a
commission for the sale of each Note equal to the principal amount of
such Note multiplied by the appropriate percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
- --------------- -----------------
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150
From 18 months to less than 2 years .200
From 2 years to less than 3 years .250
From 3 years to less than 4 years .350
From 4 years to less than 5 years .450
From 5 years to less than 6 years .500
From 6 years to less than 7 years .550
From 7 years to less than 10 years .600
From 10 years to less than 15 years .625
From 15 years to less than 20 years .700
From 20 years to 30 years .750
Greater than 30 years. . . . . . . . . . . . . . 1
1/ As agreed to by the Company and the applicable Agent at the
time of sale.
35
EXHIBIT A
PRICING TERMS
Principal Amount: $_______
(or principal amount of foreign or composite currency)
Interest Rate or Formula:
If Fixed Rate Note,
Interest Rate:
Interest Payment Dates:
If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
* LIBOR Reuters Page:
* LIBOR Telerate Page:
Designated LIBOR Currency:
If CMT Rate,
Designated CMT Telerate Page:
If Telerate Page 7052:
* Weekly Average
* Monthly Average
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Day Count Convention:
Calculation Agent:
Redemption Provisions:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
Repayment Provisions:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
Specified Currency:
Exchange Rate Agent:
Authorized Denomination:
Purchase Price: ___%, plus accrued interest,
if any, from ___________
36
Price to Public: ___%, plus accrued interest,
if any, from __________
Settlement Date and Time:
Additional/Other Terms:
Also, in connection with the purchase of Notes from the Company by one
or more Agents as principal, agreement as to whether the following
will be required:
Officers' Certificate pursuant to Section 7(b) of the
Distribution Agreement.
Legal Opinion pursuant to Section 7(c) of the Distribution
Agreement.
Comfort Letter pursuant to Section 7(d) of the Distribution
Agreement.
Stand-off Agreement pursuant to Section 4(k) of the Distribution
Agreement.
37
EXHIBIT B
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)(1)
1. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Illinois.
2. The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Prospectus and to enter into and perform its obligations under, or
as contemplated under, the Distribution Agreement.
3. The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not
result in a Material Adverse Effect.
4. Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority
to own, lease and operate its properties and to conduct its business
as described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good
standing would not result in a Material Adverse Effect.
5. The Distribution Agreement has been duly authorized, executed
and delivered by the Company.
6. The Notes have been duly authorized by the Company for
issuance and sale pursuant to the Distribution Agreement and, when
issued, authenticated and delivered in the manner provided for in the
Indenture and the Officer's Certificate and delivered against payment
of the consideration therefor, will constitute valid and legally
binding obligations of the Company enforceable against the Company in
accordance with their terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting creditors' rights generally or by general equitable
principles (whether considered in a proceeding at law or in equity),
and except further as may be limited by (A) requirements that a claim
with respect to any Notes denominated other than in U.S. dollars (or a
foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or (B) governmental authority to
limit, delay or prohibit the making of payments outside the United
38
States. The Notes are in the form contemplated by, and each
registered holder thereof is entitled to the benefits of, the
Indenture.
7. The Indenture has been duly authorized, executed and
delivered by the Company and (assuming due authorization, execution
and delivery thereof by the Trustee) constitutes a valid and legally
binding agreement of the Company enforceable against the Company in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting creditors' rights generally or by general equitable
principles (whether considered in a proceeding at law or in equity).
8. The Notes and the Indenture conform as to legal matters in
all material respects to the statements relating thereto contained in
the Prospectus and are in substantially the form filed or incorporated
by reference, as the case may be, as an exhibit to the Registration
Statement.
9. The execution, delivery and performance of the Distribution
Agreement and the Indenture and any other agreement or instrument
entered into or issued or to be entered into or issued by the Company
in connection with the transactions contemplated in the Registration
Statement and the Prospectus and the consummation of the transactions
contemplated in the Distribution Agreement and in the Registration
Statement and the Prospectus (including the issuance and sale of the
Notes and the use of the proceeds from the sale of the Notes under the
caption "Use of Proceeds") and compliance by the Company with its
obligations thereunder do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event under, or result
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any Subsidiary pursuant to,
any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument, known to
us, to which the Company or any Subsidiary is a party or by which it
or any of them may be bound, or to which any of the assets, properties
or operations of the Company or any Subsidiary is subject, except for
such conflicts, breaches, defaults, events or liens, charges or
encumbrances that would not result in a Material Adverse Effect, nor
will such action result in any violation of the provisions of the
charter or by-laws of the Company or any Subsidiary or any applicable
law, statute, rule, regulation, judgment, order, writ or decree, known
to us, of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any
Subsidiary or any of their assets, properties or operations.
10. To the best of our knowledge, there is no action, suit,
proceeding, inquiry or investigation before or by any court or
governmental agency or body, domestic or foreign, now pending or
threatened, against or affecting the Company or any Subsidiary thereof
that is required to be disclosed in the Registration Statement and the
39
Prospectus (other than as stated therein), or that might reasonably be
expected to result in a Material Adverse Effect, or that might
reasonably be expected to materially and adversely affect the
consummation of the Distribution Agreement or the Indenture or the
transactions contemplated therein.
11. All descriptions in the Prospectus of contracts and other
documents to which the Company or its Subsidiaries are a party are
accurate in all material respects. To the best of our knowledge,
there are no franchises, contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or to be filed
as exhibits thereto other than those described or referred to therein
or filed or incorporated by reference as exhibits thereto, and the
descriptions thereof or references thereto are correct in all material
respects.
12. To the best of our knowledge and information, there are no
statutes or regulations that are required to be described in the
Prospectus that are not described as required.
13. The Registration Statement has been declared effective under
the 1933 Act. Any required filing of the Prospectus pursuant to Rule
424(b) has been made in the manner and within the time period required
by Rule 424(b). To the best of our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission.
14. The Registration Statement and the Prospectus, excluding the
documents incorporated by reference therein, as of their respective
effective or issue dates (other than the financial statements and
supporting schedules included therein and the Trustee's Statement of
Eligibility on Form T-1 (the "Form T-1"), as to which we express no
opinion) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
15. The documents incorporated by reference in the Prospectus
(other than the financial statements and supporting schedules therein,
as to which we express no opinion), when they were filed with the
Commission complied as to form in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations.
16. No filing with, or authorization, approval, consent,
license, order registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the
performance by the Company of its obligations under the Distribution
Agreement or in connection with the transactions contemplated under
the Distribution Agreement or the Indenture other than under the 1933
Act, the 1933 Act Regulations, the 1939 Act and the 1939 Act
Regulations, which have been obtained, or as may be required under
state securities or blue sky laws.
40
17. The Company is not an "investment company" within the
meaning of the 1940 Act.
18. The statements set forth in the Prospectus under the caption
"Certain United Sates Federal Income Tax Considerations," constitute a
fair and accurate summary of the matters addressed therein, based upon
current law and the assumptions stated or referred to therein.
19. The Company and Illinois Power Company are holding companies
within the meaning of the Public Utility Holding Company Act of 1935,
as amended; however, by virtue of having filed an appropriate
application under the provisions of Section 3(a) of such Act, the
Company and Illinois Power Company are exempt from all of the
provisions of such Act, except Section 9(a)(2) thereof.
Nothing has come to our attention that would lead us to believe that
the Registration Statement (except for financial statements and
schedules and other financial data included therein and for the Form
T-1, as to which we make no statement), at the time the Registration
Statement or any post-effective amendment thereto (including the
filing of the Company's Annual Report on Form 10-K with the
Commission) became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus or any amendment or supplement
thereto (except for financial statements and schedules and other
financial data included therein as to which we make no statement), at
the time the Prospectus was issued, at the time any such amended or
supplemented prospectus was issued or at the date hereof, included or
includes an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
In rendering such opinion, such counsel may rely, as to matters of
fact, to the extent they deem proper, on certificates of officers of
the Company or its Subsidiaries and public officials. Such opinion
shall not state that it is to be governed or qualified by, or that it
is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation,
the Legal Opinion Accord of the ABA Section of Business Law (1991).
Counsel may rely, with the consent of the Agents, as to matters in
such opinion covered by New York law, upon the opinion of even date of
counsel for the Agents.