<Page>
LETTER OF TRANSMITTAL AND CONSENT
TO ACCOMPANY SHARES OF % SERIES
CUMULATIVE PREFERRED STOCK, PAR VALUE
$50 PER SHARE, CUSIP NUMBER 452092
OF
ILLINOIS POWER COMPANY
TENDERED PURSUANT TO THE OFFER
TO PURCHASE FOR CASH AT A
PURCHASE PRICE OF $ PER SHARE
BY
ILLINOVA CORPORATION
AND/OR VOTED PURSUANT TO THE CONSENT
STATEMENT OF
ILLINOIS POWER COMPANY
RETURN THIS FORM (WITH YOUR STOCK CERTIFICATE(S), IF APPLICABLE) IN THE ENCLOSED
ENVELOPE TO MELLON INVESTOR SERVICES LLC, ATTN: REORGANIZATION DEPARTMENT, AS
INDICATED BELOW:
BY MAIL: Post Office Box 331, South Hackensack, NJ 07606
BY HAND: 120 Broadway, 13th Floor, New York, NY 10271
BY OVERNIGHT DELIVERY: 85 Challenger Road, MD-Reorg, Ridgefield Park, NJ 07660
THE OFFER AND WITHDRAWAL RIGHT WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, UNLESS THE OFFER IS EXTENDED.
YOUR CONSENT IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF ILLINOIS POWER
COMPANY.
DIRECT ANY QUESTIONS TO MELLON INVESTOR SERVICES LLC AT 1-800-982-7650.
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1. DESCRIPTION OF SHARES TENDERED AND/OR WITH RESPECT TO WHICH CONSENTS ARE
GRANTED (ATTACHED ADDITIONAL SIGNED AFFIDAVIT OF LOST, MISSING OR DESTROYED
CERTIFICATE(S) AND AGREEMENT OF INDEMNITY, IF NECESSARY.)
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<Table>
<Caption>
TOTAL NUMBER OF SHARES
TENDERED AND/OR WITH RESPECT
CERTIFICATE TOTAL NUMBER OF SHARES TO WHICH CONSENTS ARE
NUMBER(S)* REPRESENTED BY CERTIFICATE(S)* GRANTED**
----------------- ----------------- -----------------
----------------- ----------------- -----------------
----------------- ----------------- -----------------
----------------- ----------------- -----------------
----------------- ----------------- -----------------
TOTAL
</Table>
/ / CHECK HERE IF TENDERED SHARES ARE ENCLOSED HEREWITH.
IF YOU ARE NOT TENDERING, DO NOT SEND CERTIFICATES OR EFFECT A BOOK-ENTRY
TRANSFER OF YOUR SHARES.
IF YOU ARE TENDERING SHARES PURSUANT TO THIS LETTER OF TRANSMITTAL AND CONSENT,
YOU MUST RETURN A DULY COMPLETED, VALID AND UNREVOKED CONSENT INDICATING A GRANT
OF CONSENT TO THE PROPOSED AMENDMENT.
-------------------
* NEED NOT BE COMPLETED BY SHAREHOLDERS TENDERING BY BOOK-ENTRY TRANSFER.
** UNLESS OTHERWISE INDICATED, IT WILL BE ASSUMED THAT (I) ALL SHARES
REPRESENTED BY ANY CERTIFICATE DELIVERED TO THE DEPOSITARY ARE BEING
TENDERED AND (II) CONSENTS ARE BEING GRANTED WITH RESPECT TO ALL SHARES
REPRESENTED BY ANY CERTIFICATE SPECIFIED ABOVE. CONSENT MUST BE GRANTED WITH
RESPECT TO ALL TENDERED SHARES. SEE INSTRUCTION 3.
If any of your certificate(s) for shares have been lost, stolen or destroyed,
please complete the affidavit of lost or destroyed certificate(s) and agreement
of is indemnity in Section 9. You may be required to pay a indemnity bond
premium fee.
1
<Page>
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2. ELIGIBLE INSTITUTIONS OR BROKERS MUST COMPLETE THE FOLLOWING IF APPLICABLE:
--------------------------------------------------------------------------------
NOTE: THIS LETTER OF TRANSMITTAL AND CONSENT MAY RELATE TO ONLY ONE DELIVERY BY
BOOK ENTRY TRANSFER, AND THUS ONLY ONE VOI NUMBER MAY BE SUPPLIED BELOW.
SEPARATE LETTERS OF TRANSMITTAL AND CONSENT MUST BE USED FOR EACH DELIVERY BY
BOOK ENTRY TRANSFER.
/ / TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
Name of tendering institution ______________________________________________
Account No. at DTC _________________________________________________________
VOI No. (only one) _________________________________________________________
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
4. REQUIRED SIGNATURES
--------------------------------------------------------------------------------
All shareholders must sign below. The shareholder whose Social Security Number
or Employer Identification Number appears below must sign the W-9 Certification.
X ______________________________________________________________________________
Signature of Shareholder Date
X ______________________________________________________________________________
Signature of Shareholder Date
(if joint account)
________________________________________________________________________________
Daytime Phone Number, Including Area Code:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
5. SOCIAL SECURITY NUMBER OR EMPLOYER IDENTIFICATION NUMBER:
--------------------------------------------------------------------------------
W-9 CERTIFICATION--I certify under penalties of perjury that the number shown
above is my correct Taxpayer Identification Number (TIN), that I have entered
the correct TIN or that I am waiting for a TIN to be issued to me and I am not
subject to withholding. If I fail to furnish my correct TIN, I may be subject to
a penalty by the IRS. Also, such a failure would result in backup withholding of
a portion of any payment made to me.
X ________________________________________________________________________, 2001
Signature of shareholder whose Date
Social Security Number or Employer
Identification Number is shown in this box
--------------------------------------------------------------------------------
7. SPECIAL DELIVERY INSTRUCTIONS
--------------------------------------------------------------------------------
Any check that you receive in the tender offer will be issued in the name(s)
printed in Section 1 unless you indicate a different name(s) below. If you
indicate a different name(s), your signature and a signature guarantee are
required, and the Substitute Form W-9 in Section 10 must be completed by the new
shareholder.
________________________________________________________________________________
NAME
________________________________________________________________________________
NAME (If Joint)
________________________________________________________________________________
ADDRESS
________________________________________________________________________________
CITY-STATE-ZIP
________________________________________________________________________________
AUTHORIZED SIGNATURE(S)
PLACE MEDALLION
SIGNATURE GUARANTEE HERE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
3. CONSENT FORM
--------------------------------------------------------------------------------
The undersigned, the holder of record as of [ ], 2001 (the "Record
Date") of the shares listed above in the box designated "Description of shares
tendered and/or with respect to which consents are granted" (or having obtained
an irrevocable proxy from the holder of record as of the Record Date) hereby
acknowledges receipt of the Offer to Purchase and Consent Statement, dated
[ ], 2001, and related letter of transmittal and consent and consents
without a meeting, pursuant to Illinois Power Company's ("IPC") Articles of
Incorporation (the "Articles") with respect to all of such shares, to the
adoption of the following proposed amendment.
THE BOARD OF DIRECTORS URGES YOU TO CONSENT TO THE PROPOSED AMENDMENT.
THE PROPOSED AMENDMENT: Consent to amend the Articles as set forth in the Offer
to Purchase and Consent Statement, dated [ ], 2001. Reference is
hereby made to the full text of the provision of the Articles to be deleted as
set forth in Appendix A to the Offer to Purchase and Consent Statement, which is
incorporated herein by reference. The Articles shall be amended to delete
Article V, Section (1)(f)(1), which currently limits IPC's ability to issue or
assume unsecured debt.
<Table>
/ / CONSENT / / WITHHOLD CONSENT / / ABSTAIN
</Table>
Indicate your vote by an (X).
IF YOU EXECUTE AND DATE BUT DO NOT MARK THIS LETTER OF TRANSMITTAL AND CONSENT
WITH RESPECT TO THE PROPOSED AMENDMENT, YOU WILL BE DEEMED TO HAVE CONSENTED TO
THE PROPOSED AMENDMENT.
IF YOU ARE TENDERING SHARES HEREWITH, YOU MUST NOT MARK EITHER THE BOX LABELED
"WITHHOLD CONSENT" OR THE BOX LABELED "ABSTAIN" OR YOUR TENDER WILL BE INVALID,
AND YOUR SHARES WILL NOT BE ACCEPTED FOR PAYMENT BY ILLINOVA CORPORATION.
Any holder of shares held of record as of the Record Date in the name of another
holder must establish to the satisfaction of Illinova Corporation and IPC such
holder's entitlement to exercise or transfer this consent. This will require an
irrevocable proxy by such record holder to and from each successive transferee,
including the holder, with each signature guaranteed by an eligible institution
(as described in the Offer to Purchase and Consent Statement). A form of
irrevocable proxy has been provided herewith.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
6. GUARANTEE OF SIGNATURES
--------------------------------------------------------------------------------
X ______________________________________________________________________________
AUTHORIZED SIGNATURE
________________________________________________________________________________
NAME
________________________________________________________________________________
NAME OF FIRM
________________________________________________________________________________
ADDRESS OF FIRM
________________________________________________________________________________
AREA CODE AND TELEPHONE NO.
___________________________________________, 2001.
DATED
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
8. SPECIAL TRANSFER OR PAYMENT INSTRUCTIONS
--------------------------------------------------------------------------------
A check will be mailed to the person and address shown in Section 1 (or the
person and address in Section 7, if completed) unless you indicate a different
address below:
________________________________________________________________________________
NAME
________________________________________________________________________________
ADDRESS
________________________________________________________________________________
CITY-STATE-ZIP
--------------------------------------------------------------------------------
2
<Page>
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9 AFFIDAVIT OF LOST, MISSING OR DESTROYED CERTIFICATE(S) AND AGREEMENT OF
INDEMNITY
THIS AFFIDAVIT IS INVALID IF NOT SIGNED BELOW AND A CHECK IS NOT INCLUDED.
<Table>
---------------------------------------------------------------------------------------------------------------
Complete this Section ONLY if you cannot locate some or all of your stock certificate(s) for your % series
cumulative preferred stock, par value $50 per share. Please print clearly.
---------------------------------------------------------------------------------------------------------------
TOTAL SHARES LOST Taxpayer ID or Social Security Number
----------------------------------------------------------------------
Please Fill In Certificate No(s). Number of Shares of Preferred
If Known Stock
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Attach separate schedule if needed
----------------------------------------------------------------------
</Table>
By signing this form I/we swear, depose and state that I/we am/are the lawful
owner of the certificate(s) hereinafter referred to as the "securities"
described in the enclosed letter of transmittal and consent. The securities have
not been endorsed, pledged, cashed, negotiated, transferred, assigned or
otherwise disposed of. I/we have made a diligent search for the securities and
have been unable to find it or them and make this affidavit for the purpose of
inducing the sale/exchange, redemption or cancellation of the securities, as
outlined in the letter of transmittal and consent without the surrender of the
original securities, and also to request and induce the Federal Insurance
Company to provide suretyship for me/us to cover the missing certificate(s)
under its Blanket Bond # 8302-00-67. I/we agree to surrender the securities for
cancellation should I/we, at any time, find the securities.
I/we hereby agree for myself/ourselves, my/our heirs, successors, assigns and
personal representatives, in consideration of the proceeds of the sale,
exchange, redemption or cancellation of the securities, and the aforementioned
suretyship, to indemnify, protect and hold harmless Federal Insurance Company
(the Surety), Illinois Power Company, Illinova Corporation, Dynegy Inc. and
Mellon Investor Services LLC, and any other party to the transaction from and
against and and all loss, costs, and damages including court cost and attorney's
fees, which they may be subject to or liable for in respect to the sale,
exchange, redemption or cancellation of the securities without requiring
surrender of the original securities. The rights accruing to the parties under
the preceding sentence shall not be limited or abridged by their negligence,
inadvertence, accident, oversight, breach or their failure to inquire into,
contest, or litigate any claim, whenever such negligence, inadvertence,
accident, oversight, breach or failure may occur or may have occurred, I/we
agree that the foregoing is to become part of Blank Bond # 8302-00-67
underwritten by the Federal Insurance Company.
Any person who, knowingly and with intent to defraud any insurance company or
other person, files an application or statement of claim, containing any
materially false information, or conceals for the purpose of misleading,
information concerning any fact material thereto, commits a fraudulent insurance
act, which is a crime, and also shall be subject to civil penalties as
prescribed by law.
X Signed by Affiant (shareholder) _______________ on this (date) _______________
(Deponent) (indemnitor) (Heirs
Individually) Month Day Year
Social Security # ________________ Date ________________ Notary ________________
LOST SECURITIES PREMIUM/SERVICE FEE CALCULATION
1. Enter the number of shares that are lost: ________________ x $____________ =
$______________ Share Value*
*IF THE SHARE VALUE EXCEEDS $500,000, OR IF THE SHAREHOLDER IS FOREIGN OR
DECEASED, DO NOT CONTINUE WITH CALCULATION.
Contact Mellon Investor Services at 1-800-982-1650.
2. If the value is under $1,000, there is a $25.00 service fee only
3. If the value is greater than $1,000: $______________________________ x .02 =
$____________________________ Surety Premium
(INSERT SHARE
VALUE FROM ITEM #1)
Add $25.00 for service fee
TOTAL AMOUNT DUE (ADD SURETY PREMIUM PLUS SERVICE FEE) $____________________
Please make all checks payable to: Mellon Investor Services LLC. Any checks over
$250.00 must be in the form of a certified check, cashier's check, or money
order. Please
forward your signed check, along with this letter of transmittal and consent, to
Mellon Investor Services.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
10 You must complete this Substitute Form W-9 only if you complete Section 7 or
if the tax identification number shown in Section 6 is incorrect or missing.
Page references in this Section 10 refer to the IRS instructions for
Form W-9.
<Table>
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PAYOR: MELLON INVESTOR SERVICES LLC
---------------------------------------------------------------------------------------------------------------
SUBSTITUTE FORM W-9
DEPARTMENT OF THE REQUEST FOR TAXPAYER IDENTIFICATION GIVE FORM TO THE
TREASURY NUMBER AND CERTIFICATION REQUESTER. DO NOT
INTERNAL REVENUE SERVICE SEND TO THE IRS
---------------------------------------------------------------------------------------------------------------
</Table>
<Table>
Name (if a joint account or you changed your name, see
Specific Instructions on page 9)
------------------------------------------------------------
PLEASE Business name, if different from above (See Specific
Instructions on page 9)
PRINT
OR ------------------------------------------------------------
TYPE Check appropriate box: / / Individual/Sole
Proprietor / / Corporation / / Partnership / / Other
------------------------------------------------------------
Address (number, street, and apt. or suite no.)
-----------------------------------------------------------------------
City, state, and zip code
-----------------------------------------------------------------------
PART I TAXPAYER IDENTIFICATION NUMBER (TIN)
Name (if a joint account or you changed your name, see
Specific Instructions on page 9)
------------------------------------------------------------ -----------------------------------------------------------
-
PLEASE
PRINT
OR ------------------------------------------------------------ -----------------------------------------------------------
-
TYPE
------------------------------------------------------------ -----------------------------------------------------------
-
REQUESTER'S NAME AND ADDRESS (OPTIONAL)
-----------------------------------------------------------------------
----------------------------------------------------------------------- ----------------------------------------------------------
--
PART I
</Table>
<Table>
----------------------------------------------------------------------------------------------------
Enter your TIN in the appropriate box. For
individuals, this is your Social Security Number
(SSN). However, if you are a resident alien or a -------------------------------------------------
sole proprietor, see the instructions on page 2. Social Security Number
For other entities, it is your Employer
Identification Number (EIN). If you do not have a OR
number, see How to get a TIN on page 2. Note: If
the account is in more than one name, see the
chart on page 2 for guidelines on whose number to -------------------------------------------------
enter. Employer Identification Number
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Enter your TIN in the appropriate box. For List account number(s) here
individuals, this is your Social Security Number (optional)
(SSN). However, if you are a resident alien or a -------------------------------------------------
sole proprietor, see the instructions on page 2. Social Security Number ------------------------------
-------------------
For other entities, it is your Employer
Identification Number (EIN). If you do not have a OR
number, see How to get a TIN on page 2. Note: If
the account is in more than one name, see the
chart on page 2 for guidelines on whose number to ------------------------------------------------- PART II For Payees Exempt
enter. Employer Identification Number from Backup Withholding
(See the instructions
on page 10)
-------------------------------------------------
----------------------------------------------------------------------------------------------------
</Table>
PART III CERTIFICATION
--------------------------------------------------------------------------------
Under penalties of perjury, I certify that
2
<Page>
1. The number shown on this form is my correct Taxpayer Identification Number
(or I am waiting for a number to be issued to me),
2. I am not subject to backup withholding because: (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service
(IRS) that I am subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) the IRS has notified me that I am
no longer subject to backup withholding, and
3. I am a U.S. person (including a U.S. resident alien). CERTIFICATION
INSTRUCTIONS. You must cross out item 2 above if you have been notified by
the IRS that you are currently subject to backup withholding because you
have failed to report all interest and dividends on your tax return.
--------------------------------------------------------------------------------
<Table>
SIGN SIGNATURE DATE
HERE
</Table>
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3
<Page>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
You should carefully read the instructions accompanying this letter of
transmittal and consent before completing it. If you have any questions, have
not received the Offer to Purchase and Consent Statement, dated , or
other documents pertaining to the tender offer or need assistance in completing
this letter of transmittal and consent, please contact Mellon Investor
Services LLC, the depositary and information agent, at (800) 982-7650.
If you wish to tender your shares in the tender offer, you must grant your
consent to the proposed amendment to the articles of incorporation of Illinois
Power Company, or IPC, as described in the Offer to Purchase and Consent
Statement. The tender offer is conditioned upon, among other things, the
proposed amendment being approved by the holders of at least two-thirds of the
outstanding preferred stock. It is not necessary to tender shares to consent to
the proposed amendment. Set forth above is a form for granting such consent.
If you become a holder of record of shares after , 2001, the
record date for the consent solicitation, to grant your consent to the proposed
amendment, and validly tender your shares in the tender offer, you must obtain
and submit with your tender an irrevocable proxy from the holder of record of
such shares as of the record date. Included in the materials you received is a
form that you may use to obtain such an irrevocable proxy. If you acquire shares
after the record date, you will be unable to tender those shares if you cannot
obtain an irrevocable proxy from the holder of record of such shares as of the
record date.
If you do not tender your shares in the tender offer but validly grant a
consent to the proposed amendment with respect to such shares, IPC will make a
special cash payment to you of $ for each such share if IPC's
preferred shareholders approve the proposed amendment. To receive the special
cash payment, you must return your consent by the expiration date. If you
validly tender your shares, you will be entitled only to the purchase price per
share set forth above and will not be entitled to the special cash payment.
Note: Signatures must be provided herein. Please read the accompanying
instructions carefully.
Note: If you are consenting to the proposed amendment but not tendering
shares, do not send any share certificates with this letter of transmittal and
consent. You must use this letter of transmittal and consent if you wish to
grant consent to the proposed amendment without tendering shares.
Note: In addition to broker non-votes, the following actions will have the
same effect as withholding consent to the proposed amendment:
- failing to execute, date and return a letter of transmittal and consent;
or
- executing, dating and returning a letter of transmittal and consent marked
"WITHHOLD CONSENT" or "ABSTAIN" as to the proposed amendment.
If you return a letter of transmittal and consent which is executed and dated
but not marked with respect to the proposed amendment, you will be deemed to
have consented to the proposed amendment.
ATTENTION DEPOSITORY TRUST COMPANY ("DTC") PARTICIPANTS
This letter of transmittal and consent may relate to only one delivery by
book-entry transfer, and thus only one VOI Number may be supplied in the space
provided. Separate letters of transmittal and consent must be used for each
delivery by book-entry transfer.
This letter of transmittal and consent must be completed and delivered to
the depositary prior to the expiration date even if delivery of tendered shares
is to be made by book-entry transfer to the depositary's account at DTC. This
letter of transmittal and consent may be submitted by facsimile transmission.
3
<Page>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Illinova Corporation, and/or consents with
respect to, the shares in the amount set forth in the box above designated
"Description of Shares Tendered and/or with Respect to Which Consents are
Granted" pursuant to Illinova's offer to purchase any and all of the outstanding
shares of the series of cumulative preferred stock of Illinois Power Company, or
IPC, and/or the related consent solicitation by IPC, as applicable, as to which
this letter of transmittal and consent relates, upon the terms and subject to
the conditions set forth in the Offer to Purchase and Consent Statement, dated
, 2001, receipt of which is hereby acknowledged, and in this letter of
transmittal and consent.
If tendering shares herewith, subject to, and effective upon, acceptance for
payment of and payment for the shares tendered herewith in accordance with the
terms and subject to the conditions of the tender offer (including, if the
tender offer is extended or amended, the terms and conditions of any such
extension or amendment), the undersigned hereby sells, assigns and transfers to,
or upon the order of, Illinova all right, title and interest in and to all the
shares that are being tendered herewith and all dividends, distributions and
rights declared, paid or distributed in respect of such shares on and after the
commencement date of the tender offer, other than the regular quarterly dividend
paid on November 1, 2001 (all such dividends, distributions and rights, other
than the November 1, 2001 dividend being referred to herein as "distributions")
and hereby constitutes and appoints the depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such shares (and all
distributions), with full power of substitution (such power of attorney being an
irrevocable power coupled with an interest), to:
- deliver certificates for such shares (and all distributions), or transfer
ownership of such shares (and all distributions) on the account books
maintained by the book-entry transfer facility, together, in any such case
with all accompanying evidences of transfer and authenticity, to or upon
the order of Illinova,
- present such shares (and all distributions) for registration and transfer
on the books of IPC; and
- receive all benefits and otherwise exercise all rights of beneficial
ownership of such shares (and all distributions), all in accordance with
the terms of the tender offer.
If tendering shares herewith, the undersigned hereby irrevocably appoints
the designees of Illinova, and each of them, as the attorney-in-fact and proxy
of the undersigned, each with full power of substitution and resubstitution, to
the full extent of the undersigned's rights with respect to all shares tendered
hereby and accepted for payment and paid for by Illinova (and any
distributions), including, without limitation, the right to vote such shares
(and any distributions) in such manner as each such attorney and proxy or his
substitute shall, in his sole discretion, deem proper. All such powers of
attorney and proxies, being deemed to be irrevocable, shall be considered
coupled with an interest in the shares tendered with this letter of transmittal
and consent. Such appointment will be effective if, when, and only to the extent
that, Illinova accepts such shares for payment pursuant to the tender offer.
Upon such acceptance for payment, all prior powers of attorney, proxies and
consents (other than the consent to the proposed amendment given pursuant to
this letter of transmittal and consent) given by the undersigned with respect to
such shares (and any distributions) will be revoked, without further action, and
no subsequent powers of attorneys and proxies may be given with respect thereto
(and, if given, will be deemed ineffective). The designees of Illinova will,
with respect to the shares (and any distributions) for which such appointment is
effective, be empowered to exercise all voting and other rights (other than the
consent to the proposed amendment given pursuant to this letter of transmittal
and consent) of the undersigned with respect to such shares (and any
distributions) as they in their sole discretion may deem proper at any meeting
of IPC's shareholders, or any adjournment or
4
<Page>
postponement thereof, or by consent in lieu of any such meeting or otherwise.
Illinova reserves the absolute right to require that, in order for shares to be
deemed validly tendered, immediately upon the acceptance for payment of such
shares, Illinova or its designees are able to exercise full voting rights (other
than the consent to the proposed amendment given pursuant to this letter of
transmittal) with respect to such shares (and any distributions), including
voting at any meeting of stockholders then scheduled.
The depositary will act as agent for tendering shareholders for the purpose
of receiving payment from Illinova and transmitting payment to tendering
shareholders.
The depositary also will act as agent for shareholders who do not tender
shares but consent to the proposed amendment for the purpose of receiving
special cash payments from IPC and transmitting such payments to such
shareholders.
If tendering shares herewith, the undersigned hereby represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the shares tendered herewith and that, when and to the extent Illinova
accepts for payment, Illinova will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges, encumbrances,
conditional sales agreements or other obligations relating to the sale or
transfer thereof, and they will not be subject to any adverse claims. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the depositary, Illinova or IPC to be desirable to complete the sale,
assignment and transfer of the shares tendered herewith and/or to grant the
consent given hereby.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to consent to the proposed amendment of the articles of
incorporation of IPC, as described in Offer to Purchase and Consent Statement,
with respect to all shares referred to above in the box designated "Description
of Shares Tendered and/or with Respect to Which Consents are Granted."
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death, bankruptcy or incapacity of the
undersigned, and any obligations of the undersigned hereunder shall be binding
upon the heirs, legal representatives, successors, assigns, executors and
administrators of the undersigned. Except as stated in the tender offer, this
tender is irrevocable.
The undersigned understands that tenders of shares pursuant to any one of
the procedures described under the heading "Terms of the Tender Offer--Procedure
for Tendering Shares" in the Offer to Purchase and Consent Statement and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the tender offer. Illinova's acceptance for payment of shares
tendered pursuant to the offer will constitute a binding agreement between the
undersigned and Illinova upon the terms and subject to the conditions of the
tender offer.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase and Consent Statement, Illinova may terminate or amend the
tender offer or may not be required to purchase any of the shares tendered
hereby, if any. In any such event, the undersigned understands that
certificate(s) for any shares not tendered or not purchased will be returned to
the undersigned.
Unless otherwise indicated in the box above under the heading "Special
Transfer or Payment Instructions," please issue the check for the purchase price
of any shares purchased or the special cash payment, as applicable, and/or
return any shares not tendered or not purchased, in the name(s) of the
undersigned (and, in the case of shares tendered by book-entry transfer, by
credit to the account of the undersigned at the book-entry transfer facility).
Similarly, unless otherwise indicated in the box above under the heading
"Special Delivery Instructions," please mail the check for the purchase price of
any shares purchased or the special cash payment, as applicable, and/or any
certificate for shares not tendered or not purchased (and accompanying
documents, as appropriate), to the undersigned at the address shown below the
undersigned's signature(s). If both "Special Transfer or Payment Instructions"
and "Special Delivery Instructions" are completed, please issue the check for
the purchase price of any shares purchased or the special cash payment, as
applicable, and/or return any shares not tendered or
5
<Page>
not purchased in the name(s) of, and mail said check and/or any certificates to,
the person(s) so indicated. The undersigned recognizes that IPC has no
obligation, pursuant to the "Special Transfer or Payment Instructions," to
transfer any shares from the name of the holders of record thereof if Illinova
does not accept for purchase any of the shares so tendered.
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. In general, all signatures on this letter of
transmittal and consent must be guaranteed by a firm that is a member of a
registered national securities exchange or the NASD, or by a commercial bank or
trust company having an office or correspondent in the United States that is a
participant in an approved signature guarantee medallion program (each of the
foregoing being referred to as an "eligible institution"). However, signatures
on this letter of transmittal and consent need not be guaranteed if (a) this
letter of transmittal and consent is signed by the registered owner of the
shares tendered herewith and such owner has not completed the box entitled
"Special Transfer or Payment Instructions" or the box entitled "Special Delivery
Instructions" on this letter of transmittal and consent, (b) such shares are
tendered for the account of an eligible institution, or (c) this letter of
transmittal and consent is being used solely for the purpose of granting a
consent with respect to shares which are not being tendered pursuant to the
tender offer. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CONSENT AND DELIVERY OF
SHARES. This letter of transmittal and consent is to be used if
(a) certificates are to be forwarded herewith, (b) delivery of shares is to be
made by book-entry transfer pursuant to the procedures set forth under the
heading "Terms of the Tender Offer--Procedure for Tendering Shares" in the Offer
to Purchase and Consent Statement and/ or (c) consents are being granted hereby
with respect to the proposed amendment. To validly tender, certificates for all
physically delivered shares, or a confirmation of a book-entry transfer into the
depositary's account at the book-entry transfer facility of all shares delivered
electronically, as well as a properly completed and duly executed letter of
transmittal and consent, and any other documents required by this letter of
transmittal and consent, must be received by the depositary at one of its
addresses set forth on the front page of this letter of transmittal and consent
on or prior to the expiration date. If a broker, dealer, commercial bank, trust
company or nominee holds your shares, you must contact them if you desire to
tender, or to consent to the proposed amendment without tendering, shares.
THE METHOD OF DELIVERY OF SHARES (IF TENDERING), OF THIS LETTER OF
TRANSMITTAL AND CONSENT AND OF ALL OTHER REQUIRED DOCUMENTS IS AT YOUR OPTION
AND RISK. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED. BECAUSE IT IS THE TIME OF RECEIPT, NOT THE
TIME OF MAILING, WHICH DETERMINES WHETHER A TENDER HAS BEEN MADE OR CONSENT HAS
BEEN GRANTED PRIOR TO THE EXPIRATION DATE, YOU SHOULD ALLOW SUFFICIENT TIME TO
ASSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Tender Offer--Number of Shares; Purchase Prices" in the Offer to
Purchase and Consent Statement. By executing this letter of transmittal and
consent, you waive any right to receive any notice of the acceptance for payment
of the shares.
3. CONSENTING. If you wish to tender your shares pursuant to the tender
offer, you must submit a duly completed, valid and unrevoked consent to the
proposed amendment. However, it is not necessary to tender your shares to
consent to the proposed amendment of IPC's articles of incorporation, as
described in the Offer to Purchase and Consent Statement. The tender offer is
conditioned upon, among other things, the approval of the proposed amendment. If
this letter of transmittal and consent is executed and dated but not marked with
respect to the proposed amendment, the shareholder will be
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deemed to have consented to the proposed amendment. The tender offer is being
sent to all persons in whose names shares are registered on the books of IPC as
of the close of business on , 2001 as well as to all persons in whose name
shares are registered on the books of IPC as of the record date. If you become
holder of record of shares after the record date and you wish to tender your
shares, you must obtain and submit with your tender an irrevocable proxy from
the holder of record as of the record date to grant your consent to the proposed
amendment. If your shares were held of record as of the record date in the name
of another, you must establish to IPC's satisfaction your entitlement to
exercise or transfer such consent. This will ordinarily require an irrevocable
proxy by such record holder to and from each successive transferee, including
the holder, with each signature guaranteed by an eligible institution. See
Instruction 5. A form that may be used to obtain such irrevocable proxy is
included in the materials you received. If you acquire shares after the record
date, you will be unable to tender your shares if you cannot obtain an
irrevocable proxy from the holder of record of such shares as of the record
date.
4. PARTIAL TENDER AND/OR CONSENT (Not applicable to shareholders who
tender by book-entry transfer). If fewer than all the shares represented by any
certificate delivered to the depositary are to be tendered or consents are being
granted with respect to fewer than all the shares represented by any certificate
specified herein, fill in the number of shares that are to be tendered and/or
with respect to which consents are being granted in the box above under the
heading "Description of shares tendered and/or with respect to which consents
are granted." In the case of shares tendered, a new certificate for the
remainder of the shares represented by the old certificate will be sent to the
person(s) signing this letter of transmittal and consent, unless otherwise
provided in the box above under the heading "Special Transfer or Payment
Instructions" or "Special Delivery Instructions," as promptly as practicable
following the expiration or termination of the tender offer. All shares
represented by certificates delivered to the depositary will be deemed to have
been tendered and consents will be deemed to have been granted in respect of
such shares, unless otherwise indicated.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL AND CONSENT; STOCK POWERS AND
ENDORSEMENTS. If this letter of transmittal and consent is signed by the
holder(s) of record of the shares referred to herein, the signature(s) must
correspond with the name(s) as written on the face of the certificates without
alteration, enlargement or any change whatsoever.
If any of the shares tendered or with respect to which consents are granted
under this letter of transmittal and consent are held of record by two or more
persons, all such persons must sign the letter of transmittal and consent.
If any of the shares tendered or with respect to which consents are granted
under this letter of transmittal and consent are registered in different names
on different certificates, you must complete, sign and submit as many separate
such documents as there are different registrations on certificates.
If this letter of transmittal and consent is signed by the holder(s) of
record of the shares referred to herein, no endorsements of certificates or
separate stock powers are required unless payment of the purchase price is to be
made to, or shares not tendered or not purchased are to be registered in the
name of, any person other than the holder(s) of record. Signatures on any
certificates or stock powers must be guaranteed by an eligible institution. See
Instruction 1.
If shares are tendered herewith and this letter of transmittal and consent
is signed by a person other than the holder(s) of record of the shares tendered
herewith, such shares must be endorsed or accompanied by appropriate stock
powers, in either case, signed exactly as the name(s) of the holder(s) of record
appear(s) on the certificates or position listing for such shares. Signature(s)
on any such certificate or stock powers must be guaranteed by an eligible
institution. See Instruction 1.
If the letter of transmittal and consent or any certificate or stock power
is signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a
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fiduciary or representative capacity, such person should so indicate when
signing, and proper evidence satisfactory to Illinova and IPC of the authority
of such persons to act must be submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Illinova will pay all stock transfer taxes, if any, payable on account of the
acquisition of shares by Illinova pursuant to the tender offer. If, however,
payment of the purchase price or the special cash payment, as applicable, is to
be made to, or shares not tendered or not purchased are to be registered in the
name of, any person other than the registered owner, or if tendered shares are
registered in the name of any person other than the person signing this letter
of transmittal and consent, the amount of any stock transfer or other taxes
(whether imposed on the registered owner, such other person or otherwise)
payable on account of the transfer to such person will be deducted from the
purchase price unless satisfactory evidence of the payment of such taxes, or
exemption therefrom is submitted. See "Terms of the Tender Offer--Acceptance of
Shares for Payment and Payment of Purchase Price" in the offer to purchase and
consent statement. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE
NECESSARY TO AFFIX TRANSFER TAX STAMPS TO THE CERTIFICATES REPRESENTING SHARES
TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any shares purchased is to be issued in the name of, any
shares not tendered or not purchased are to be returned to, or the check for the
special cash payment is to be issued in the name of, a person other than the
person(s) signing this letter of transmittal and consent or if such check and/or
any certificate for shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this letter of transmittal and consent
or to an address other than that shown in the box above under the heading
"Name(s) and Address(es) of Holder(s) of record," then the "Special Transfer or
Payment Instructions" and/or "Special Delivery Instructions" on this letter of
transmittal and consent must be completed. If you are tendering your shares by
book-entry transfer, any shares not accepted for payment will be returned by
crediting the account maintained by you at the book-entry transfer facility.
8. SUBSTITUTE FORM W-9 AND FORM IRS W-8BEN. If you are tendering your
shares and granting your consent to the proposed amendment or if you are
granting your consent to the proposed amendment but not tendering, you must
provide the depositary with (i) in the case of a U.S. Preferred Shareholder,
your correct Taxpayer Identification Number ("Taxpayer Identification Number" or
"TIN") and a certification that you are not subject to backup withholding on the
Substitute Form W-9 contained herein, or (ii) in the case of a Non-U.S.
Preferred Shareholder, a properly completed IRS Form W-8BEN. Failure to provide
the information on either Substitute Form W-9 or Form W-8BEN may subject you to
a penalty imposed by the IRS and to U.S. federal income tax backup withholding
on the gross amount payable at a rate of 30.5%. As used in these instructions,
the terms "U.S. Preferred Shareholder" and "Non-U.S. Preferred Shareholder" have
the same meaning as used in "Offer to Purchase and Consent Statement--Certain
U.S. Federal Income Tax Considerations."
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions regarding the
terms of the tender offer or the consent solicitation should be directed to
Merrill Lynch & Co., the dealer manager for the tender offer and the
solicitation agent for the consent solicitation, at (800) 432-9558. Questions
regarding how to tender or consent and requests for additional copies of this
document, the applicable letter of transmittal and consent, or other documents
related to the tender offer or consent solicitation should be directed to Mellon
Investor Services LLC, the depositary and information agent for the tender offer
and consent solicitation, at (800) 982-7650. You may also contact your broker,
dealer, commercial bank or trust company for assistance concerning the tender
offer or consent solicitation.
10. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including the time of receipt) and acceptance for payment
of any tender of shares will be determined by Illinova in its sole discretion
and its determination will be final and binding. All questions as to the form
and validity (including time of receipt) of consents and the eligibility for the
special cash payment will be determined by IPC in its sole discretion, and its
determination will be final and binding. Illinova
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reserves the absolute right to waive any defect or irregularity in any tender of
shares or to reject any and all tenders that it determines are not in proper
form or the acceptance of or payment for which may, in Illinova's opinion, be
unlawful. IPC reserves the absolute right to waive any defect or irregularity in
any consent or to reject any and all consents that it determines are not in
proper form or the acceptance of or payment for which may, in IPC's opinion, be
unlawful. Neither Illinova, IPC, the dealer manager/solicitation agent, the
depositary/information agent nor any other person will be under any duty to give
notice of any defect or irregularity in tenders or consents, and they will not
incur any liability for failure to give any such notice.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any of your certificate(s)
for shares have been lost, stolen or destroyed, please complete the affidavit of
lost or destroyed certificate(s) in this letter of transmittal with respect to
the lost certificate(s). You may be required to pay an indemnity bond premium
fee. The tender of shares pursuant to this letter of transmittal and consent
will not be valid unless prior to the expiration date such procedures have been
completed and a replacement certificate for the shares has been delivered to the
depositary. See Instruction 2.
IMPORTANT TAX INFORMATION
Under U.S. federal income tax law, if your tendered shares are accepted for
payment or you receive a special cash payment as a result of granting your
consent to the proposed amendment, you will be required to provide the
depositary (as payer) with either your correct TIN on Substitute Form W-9 or a
properly completed IRS Form W-8BEN. If you are a U.S. individual, your TIN is
your social security number. For businesses and other entities, the number is
your federal employer identification number. If the depositary is not provided
with the correct TIN or properly completed IRS Form W-8BEN, you may be subject
to a penalty imposed by the IRS. In addition, payments that are made to you with
respect to shares purchased pursuant to the tender offer may be subject to
backup withholding tax at a rate of 30.5%.
Certain preferred shareholders (including, among others, all corporations
and certain Non-U.S. individuals) are exempt from backup withholding. If you are
a corporate U.S. preferred shareholder, to qualify for such exemption, you
should provide the depositary with a properly completed and executed Substitute
Form W-9 attesting to its exempt status. If you are a Non-U.S. preferred
shareholder and wish to qualify as an exempt recipient, you must submit to the
depositary a properly completed IRS Form W-8BEN, signed under penalties of
perjury, attesting to your exempt status. An IRS Form W-8BEN can be obtained
from the depositary. See the enclosed guidelines for certification of taxpayer
identification number on Substitute Form W-9 for additional instructions.
If U.S. federal income tax backup withholding applies, the depositary is
required to withhold 30.5% of any payments made to you. Backup withholding is
not an additional tax. Rather, the U.S. federal income tax liability of persons
subject to backup withholding will be reduced by the amount of the tax withheld.
If withholding results in an overpayment of taxes, a refund may be obtained from
the IRS.
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ILLINOIS POWER COMPANY
CUMULATIVE PREFERRED STOCK
COMPLETE ONLY IF APPLICABLE:
SOLICITED TENDERS AND/OR CONSENTS
As described in the Offer to Purchase and Consent Statement, dated
, 2001, Illinova Corporation will pay, in the amounts and on the
terms and conditions set forth in the Offer to Purchase and Consent Statement,
soliciting dealer fees to designated soliciting dealers (as described in the
Offer to Purchase and Consent Statement).
The above signed represents that the soliciting dealer that solicited and
obtained this tender and/or consent is:
Name of Firm: __________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker: _____________________________________________________
Telephone Number of Broker: ____________________________________________________
Address: _______________________________________________________________________
_______________________________________________________________________
(INCLUDE ZIP CODE)
If shares specified in this letter of transmittal and consent are held by
the above signed as custodian, specify below each beneficial owner of such
shares whose tender and/or consent you have solicited. Any questions as to what
constitutes beneficial ownership should be directed to the depositary. If the
space below is inadequate, attach a separate signed schedule using the same
format.
<Table>
<Caption>
NAME OF NUMBER OF SHARES NUMBER OF SHARES
BENEFICIAL OWNER IF LESS THAN 5,000 IF 5,000 OR MORE
----------------------------- ----------------------------- -----------------------------
----------------------------- ----------------------------- -----------------------------
----------------------------- ----------------------------- -----------------------------
----------------------------- ----------------------------- -----------------------------
----------------------------- ----------------------------- -----------------------------
----------------------------- ----------------------------- -----------------------------
----------------------------- ----------------------------- -----------------------------
----------------------------- ----------------------------- -----------------------------
----------------------------- ----------------------------- -----------------------------
----------------------------- ----------------------------- -----------------------------
----------------------------- ----------------------------- -----------------------------
</Table>
The acceptance of compensation by such soliciting dealer will constitute a
representation by it that (a) it has complied with the applicable requirements
of the Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder, in connection with such solicitation; (b) it is entitled
to such compensation for such solicitation under the terms and conditions of the
Offer to Purchase and Consent Statement; (c) in soliciting a tender and/or
consent, it has used no solicitation materials other than those furnished by
Illinova Corporation and Illinois Power Company; and (d) if it is a foreign
broker or dealer not eligible for membership in the National Association of
Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's
Rules of Fair Practice in making solicitations.
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SOLICITATION FEE PAYMENT INSTRUCTIONS
ISSUE CHECK TO:
Firm: __________________________________________________________________________
(PLEASE PRINT)
Attention: _____________________________________________________________________
Address: _______________________________________________________________________
_______________________________________________________________________
Phone Number: _______ Taxpayer Identification or Social Security Number: ______
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