CLASS B COMMON STOCK
BY AND BETWEEN
an Illinois Corporation
CHEVRON U.S.A. INC.
a Pennsylvania Corporation
APRIL 17, 2000
THIS CLASS B COMMON STOCK PURCHASE AGREEMENT (this 'Agreement') is made as
of the 17th day of April, 2000, by and between Dynegy Inc., an Illinois
corporation (the 'Company') and Chevron U.S.A. Inc., a Pennsylvania corporation
WHEREAS, the Company and Chevron are parties to that certain Shareholder
Agreement dated as of June 14, 1999 (the 'Shareholder Agreement'), pursuant to
which Chevron has the right to preserve its proportionate interest in the equity
value of the Company;
WHEREAS, the Company has notified Chevron pursuant to the applicable
provision of the Shareholder Agreement of its intention to offer shares of its
Class A common stock, no par value (the 'Class A Common Stock'), in a registered
public offering (the 'Public Offering');
WHEREAS, the Company has granted the underwriters of the Public Offering an
option to purchase additional shares of its Class A Common Stock to cover over-
allotments, if any (the 'Over-allotment Option');
WHEREAS, the Company and Chevron are parties to a letter agreement dated
April __, 2000 (the 'Letter Agreement'), which Letter Agreement sets forth
certain notice requirements associated with Chevron's election to purchase its
proportionate interest of the shares the Company desires to sell;
WHEREAS, Chevron has notified the Company pursuant to the applicable
provision of the Shareholder Agreement and the Letter Agreement of its desire to
preserve its proportionate interest in the equity value of the Company as a
result of the Public Offering;
WHEREAS, pursuant to the Letter Agreement Chevron has agreed to notify the
Company whether or not it intends to preserve its proportionate interest in the
equity value of the Company within twenty-four hours following the exercise of
the Over-allotment Option by the underwriters of the Public Offering;
WHEREAS, the Company and Chevron wish to set forth the terms and conditions
upon which the Company will sell to Chevron shares of its Class B common stock,
no par value (the 'Class B Common Stock'), in one or more private placements to
occur immediately following the closing of the Public Offering and, if
applicable, immediately following the closing related to the Over-allotment
Option in satisfaction of the Company's obligations under the Shareholder
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
1. Purchase and Sale of Class B Common Stock.
1.1 Sale and Issuance of Class B Common Stock. Subject to the
terms and conditions of this Agreement, the Company agrees to sell to Chevron
and Chevron agrees to purchase from the Company 1,293,055 shares of the
Company's Class B Common Stock, no par value (the 'Firm Stock') in connection
with the closing relating to the Public Offering (the
'Initial Closing'). In addition, in the event the underwriters of the Public
Offering elect to exercise the Over-allotment Option and Chevron elects to
preserve its proportionate interest in the Company following such exercise (as
provided in the Letter Agreement), the Company agrees to sell to Chevron and
Chevron agrees to purchase from the Company up to 308,000 additional shares of
the Company's Class B Common Stock (the 'Option Stock' and together with the
Firm Stock, the 'Stock') in connection with the closing relating to the Over-
allotment Option (the 'Option Closing'). In connection with the Option Closing,
if applicable, Chevron shall purchase that number of shares of Option Stock
equal to the percentage of the Over-allotment Option exercised by the
underwriters of the Public Offering multiplied by the total number of shares of
Option Stock set forth in the preceding sentence.
1.2 Registration Rights. The Stock issued under this Agreement
shall be deemed to be Registrable Common Stock as that term is defined in that
certain Registration Rights Agreement dated as of June 14, 1999, and Chevron
shall be entitled to the same registration rights respecting the Stock as
provided in such Registration Rights Agreement.
1.3 The Closings. The Initial Closing shall be held on the date,
at the location and immediately following the closing relating to the Public
Offering, or, if later, upon satisfaction or waiver of each of the conditions
set forth in Sections 4 and 5. At the Initial Closing, the Company will deliver
the Firm Stock to Chevron against payment of the purchase price therefor by wire
transfer. The Option Closing shall be held within one business day of the
closing relating to the Over-allotment Option, or, if later, upon satisfaction
or waiver of each of the conditions set forth in Sections 4 and 5, and, in
either case, at a location and time mutually agreed upon by the Company and
Chevron. At the Option Closing, the Company will deliver the Option Stock to
Chevron against payment of the purchase price therefor by wire transfer. The
purchase price for each share of Stock shall be equal to the public offering
price less the underwriting discount set forth on the final prospectus relating
to the Public Offering.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to Chevron that:
2.1 Organization and Good Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Illinois and has all requisite corporate power and authority to carry
out the transactions contemplated by this Agreement.
2.2 Authorization. The Company has all requisite authority to
enter into this Agreement and to perform all the obligations required to be
performed by the Company hereunder. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action of
the Company, and this Agreement constitutes a valid and binding obligation of
the Company, enforceable in accordance with its terms.
2.3 Valid Issuance of Stock. The Stock, when issued, sold and
delivered in accordance with the terms hereof for the consideration expressed
herein, will be duly and validly issued, fully paid and nonassessable and will
be free of restrictions on transfer other than restrictions on transfer under
this Agreement and under applicable state and federal securities laws. Subject
to the truth and accuracy of Chevron's representations set forth in
Section 3 of this Agreement, the offer, sale and issuance of the Stock as
contemplated by this Agreement are exempt from the registration requirements of
any applicable state and federal securities laws.
2.4 Compliance with Other Documents. The execution and delivery
of this Agreement, consummation of the transactions contemplated hereby, and
compliance with the terms and provisions hereof will not conflict with or result
in a breach of the terms and conditions of, or constitute a default under the
charter documents of the Company, as amended to date, or of any material
contract or agreement to which the Company is now a party, except where such
conflict, breach or default of any such contract or agreement, either
individually or in the aggregate, would not have a material adverse effect on
the Company's business, financial condition or results of operations.
3. Representations and Warranties of Chevron. Chevron hereby
represents and warrants that:
3.1 Authorization. Chevron has all requisite authority to enter
into this Agreement and to perform all the obligations required to be performed
by Chevron hereunder. The execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action of Chevron, and this
Agreement constitutes a valid and binding obligation of Chevron, enforceable in
accordance with its terms.
3.2 Investigation. Chevron acknowledges that it has had an
opportunity to discuss the business, affairs and current prospects of the
Company with the Company's management. Chevron further acknowledges having had
access to information about the Company that it has requested or considers
necessary for purposes of purchasing the Stock.
3.3 Accredited Investor. Chevron is an 'accredited investor' as
such term is defined in Regulation D under the Securities Act of 1933, as
amended (the 'Act').
3.4 Qualified Institutional. Chevron is a 'qualified
institutional buyer' as such term is defined in Rule 144A promulgated under the
3.5 Restricted Securities.
(a) Chevron is acquiring the Stock solely for its own beneficial
account, for investment purposes, and not with a view to, or for
resale in connection with, any distribution of the Stock. Chevron
understands that the securities being purchased have not been
registered under the Act or any state securities laws by reason of
specific exemptions under the provisions thereof which depend in part
upon the investment intent of Chevron and of the other representations
made by Chevron in this Agreement. Chevron understands that the
Company is relying upon the representations and agreements contained
in this Agreement (and any supplemental information) for the purpose
of determining whether this transaction meets the requirements for
(b) Chevron understands that the shares of Stock being purchased
are 'restricted securities' under applicable federal securities laws
and that the Act and
the rules of the SEC promulgated thereunder provide in substance that
Chevron may dispose of the Stock being purchased only pursuant to an
effective registration statement under the Act or an exemption
therefrom, and Chevron understands that the Company has no obligation
or intention to register the Stock being purchased, or to take action
so as to permit sales pursuant to the Act. Accordingly, Chevron
understands that under the SEC's rules, Chevron may dispose of the
Stock being purchased principally only in 'private placements' which
are exempt from registration under the Act, in which event the
transferee will acquire 'restricted securities' subject to the same
limitations as in the hands of Chevron. As a consequence, Chevron
understands that it must bear the economic risks of the investment in
the Stock purchased for an indefinite period of time.
(c) Chevron agrees: (i) that it will not sell, assign, pledge,
give, transfer or otherwise dispose of the Stock purchased or any
interest therein, or make any offer or attempt to do any of the
foregoing, except pursuant to a registration of such securities under
the Act and all applicable state securities laws or in a transaction
which is exempt from the registration provisions of the Act and all
applicable state securities laws; (ii) that the certificate(s) for the
Stock purchased will bear a legend making reference to the foregoing
restrictions; and (iii) that the Company and any transfer agent for
the Stock purchased shall not be required to give effect to any
purported transfer of any of such Stock except upon compliance with
the foregoing restrictions.
(d) Chevron has not offered or sold any portion of the Stock
purchased by Chevron and has no present intention of dividing such
Stock with others or of reselling or otherwise disposing of any
portion of such Stock either currently or after the passage of a fixed
or determinable period of time or upon the occurrence or nonoccurrence
of any predetermined event or circumstance.
3.6 Legends. Chevron understands that the Stock may bear the
(a) 'THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION
OF COUNSEL IN FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.'
(b) 'THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE PROVISIONS OF A SHAREHOLDER AGREEMENT BETWEEN THE COMPANY AND
CHEVRON AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT
IN ACCORDANCE THEREWITH. A COPY OF SAID AGREEMENT IS ON FILE AT THE OFFICE
OF THE SECRETARY OF THE COMPANY.'
4. Conditions to Chevron's Obligations. The obligation of Chevron to
purchase the Firm Stock at the Initial Closing and the Option Stock at the
Option Closing is subject to the fulfillment on or prior to the Initial Closing
or the Option Closing, as applicable, of the following conditions:
4.1 Representations and Warranties. The representations and warranties
made by the Company in Section 2 hereof shall be true and correct when made, and
shall be true and correct as of such closing with the same force and effect as
if they had been made on and as of such date, and the Company shall have
performed or satisfied all covenants and conditions in this Agreement prior to
4.2 Securities Laws. The offer and sale of the Stock to Chevron
pursuant to this Agreement shall be exempt from the registration requirements of
the Act and qualification requirements of all applicable state securities laws.
4.3 Authorizations. All authorizations, approvals, consents or
permits, if any, of the Company's stockholders or any governmental authority or
regulatory body that are required in connection with the lawful issuance and
sale of the Stock pursuant to this Agreement shall have been duly obtained and
shall be effective on and as of the Initial Closing or the Option Closing, as
4.4 Public Offering or Over-allotment Option Closing Consummated. The
closing of the Public Offering or the Over-allotment Option, as applicable,
shall have occurred.
4.5 Delivery of Stock Certificate. The Company shall have delivered to
Chevron a stock certificate relating to the Firm Stock or the Option Stock, as
5. Conditions to the Company's Obligations. The obligation of the
Company to sell the Firm Stock at the Initial Closing and the Option Stock at
the Option Closing is subject to the fulfillment on or prior to the Initial
Closing or Option Closing, as applicable, of the following conditions:
5.1 Representations and Warranties. The representations and warranties
of Chevron contained in Section 3 hereof shall be true as of such closing with
the same force and effect as if they had been made on and as of such date, and
Chevron shall have performed or satisfied all covenants and conditions in this
Agreement and the Letter Agreement prior to such closing.
5.2 Public Offering or Over-allotment Option Closing Consummated. The
closing of the Public Offering or the Over-allotment Option, as applicable,
shall have occurred.
5.3 Payment of Purchase Price. Chevron shall have delivered to
the Company the purchase price for the Firm Stock or the Option Stock, as
applicable, in accordance with Section 1.2 hereof.
6. Confidentiality. The parties hereto agree that, except with the
prior written permission of the other party, it shall at all times keep
confidential and not divulge, furnish, or make accessible to anyone any
confidential information, knowledge, or data concerning or relating to the
business or financial affairs of such other party to which said party has been
or shall become privy by reason of this Agreement, discussions or negotiations
relating to this Agreement, or the performance of its obligations hereunder.
7.1 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of Delaware, without regard to the conflict of
law provisions thereof.
7.2 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the respective successors and assigns of the parties hereto.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
7.3 Entire Agreement. This Agreement (as supplemented by the
applicable provisions of the Shareholder Agreement and the Letter Agreement)
constitutes the entire understanding and agreement between the parties with
regard to the subject matter hereof.
7.4 Notices. Except as otherwise provided, all notices and other
communications required or permitted hereunder shall be in writing, shall be
effective when given, and shall in any event be deemed to be given upon receipt
or, if earlier, (i) five (5) days after deposit with the U.S. postal service or
other applicable postal service, if delivered by first class mail, postage
prepaid, (ii) upon delivery, if delivered by hand, (iii) one (1) business day
after the day of deposit with Federal Express or similar overnight courier,
freight prepaid, if delivered by overnight courier or (iv) one (1) business day
after the day of facsimile transmission, if delivered by facsimile transmission
with copy by first class mail, postage prepaid, and shall be addressed, (a) if
to Chevron, at Chevron's address set forth below its signature, or at such other
address as Chevron shall have furnished to the Company in writing or (b) if to
the Company, at its address as set forth below its signature, or at such other
address as the Company shall have furnished to Chevron in writing.
7.5 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of the Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only with the written consent of the Company and Chevron.
7.6 Expenses. Irrespective of whether the Initial Closing or
Option Closing is effected, the Company and Chevron shall each pay their own
costs and expenses incurred with respect to the negotiation, execution, delivery
and performance of this Agreement.
7.7 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
7.8 Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
7.9 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year hereinabove first written.
By: /s/ Robert D. Doty, Jr.
Robert D. Doty, Jr.
Senior Vice President
Address: 1000 Louisiana, Suite 5800
Houston, Texas 77002
CHEVRON U.S.A. INC.
By: /s/ David R. Stevenson
David R. Stevenson