\nLiens ………………………………………………………………………………… Section 5.4
\nMaterial Adverse Effect ………………………………………………………………… Section 10.9(c)
\nMergers ………………………………………………………………………………. Recitals
\nNewco ………………………………………………………………………………… Preamble
\nNewco Class A Common Stock ……………………………………………………………… Recitals
\nNewco Class B Common Stock ……………………………………………………………… Recitals
\nNewco Common Stock …………………………………………………………………….. Recitals
\nNewco Group …………………………………………………………………………… Section 7.16
\nNewco Share Price ……………………………………………………………………… Section 4.4(f)
\nNon-U.S. Antitrust Laws ………………………………………………………………… Section 7.5(a)(ii)
\nNorthern ……………………………………………………………………………… Recitals
\nNorthern Series A Preferred Stock ……………………………………………………….. Recitals
\nNYSE …………………………………………………………………………………. Section 4.1(c)
\nOBCA …………………………………………………………………………………. Section 1.1(a)
\nOriginal Outstanding Enron Shares ……………………………………………………….. Section 4.1(a)
\nOther Non-U.S. Jurisdictions ……………………………………………………………. Section 8.1(c)
\nProxy Statement\/Prospectus ……………………………………………………………… Section 7.8(a)
\nReturns ………………………………………………………………………………. Section 5.10(a)
\nRule 145 Affiliates ……………………………………………………………………. Section 7.11
\nRule 16b-3 ……………………………………………………………………………. Section 4.8
\nSales Consideration ……………………………………………………………………. Section 4.1(d)
\nSEC ………………………………………………………………………………….. Section 4.5(b)
\nSecond Preferred Stock …………………………………………………………………. Section 5.3
\nSecurities Act ………………………………………………………………………… Section 4.4(e)
\nSeptember 30, 2001 Balance Sheet ………………………………………………………… Section 5.7
\nSeries B Preferred Stock ……………………………………………………………….. Section 5.3
\nSeries C Preferred Stock ……………………………………………………………….. Section 5.3
\nSignificant Subsidiary …………………………………………………………………. Section 5.4
\nSpecified Jurisdictions ………………………………………………………………… Section 8.1(c)
\nSubsidiary ……………………………………………………………………………. Section 10.9(d)
\nTax qualified plans ……………………………………………………………………. Section 7.16
\nTaxes ………………………………………………………………………………… Section 5.10(d)
\nTermination Date ………………………………………………………………………. Section 9.2(a)
\nThird-Party Provisions …………………………………………………………………. Section 10.3
\nZeros ………………………………………………………………………………… Section 5.3
\n<\/c><\/s><\/table>\n vi<\/p>\n
AGREEMENT AND PLAN OF MERGER<\/p>\n
THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) dated as
\nof November 9, 2001, is by and among Dynegy Inc., an Illinois corporation
\n(“Dynegy”), Stanford, Inc., a Delaware corporation and wholly owned subsidiary
\nof Dynegy (“Newco”), Sorin, Inc., an Oregon corporation and wholly owned
\nsubsidiary of Newco (“Enron Merger Sub”), Badin, Inc., an Illinois corporation
\nand wholly owned subsidiary of Newco (“Dynegy Merger Sub”), and Enron Corp., an
\nOregon corporation (“Enron”).<\/p>\n
RECITALS<\/p>\n
A. The Enron Merger. At the Effective Time, the parties intend
\nto effect a merger of Enron Merger Sub with and into Enron, with Enron being the
\nsurviving entity (the “Enron Merger”), pursuant to which each share of common
\nstock, no par value, of Enron (“Enron Common Stock”) will be converted into
\n0.2685 shares of Class A common stock, par value $.01 per share, of Newco
\n(“Newco Class A Common Stock”), subject to adjustment.<\/p>\n
B. The Dynegy Merger. Concurrently with the Enron Merger, the
\nparties intend to effect a merger of Dynegy Merger Sub with and into Dynegy,
\nwith Dynegy being the surviving entity (the “Dynegy Merger” and, together with
\nthe Enron Merger, the “Mergers”), pursuant to which (i) each share of Class A
\ncommon stock, no par value, of Dynegy (“Dynegy Class A Common Stock”) will be
\nconverted into one share of Newco Class A Common Stock and (ii) each share of
\nClass B common stock, no par value, of Dynegy (“Dynegy Class B Common Stock”
\nand, together with the Dynegy Class A Common Stock, the “Dynegy Common Stock”)
\nwill be converted into one share of Class B common stock, par value $.01 per
\nshare, of Newco (“Newco Class B Common Stock” and, together with the Newco Class
\nA Common Stock, the “Newco Common Stock”).<\/p>\n
C. Intended U.S. Tax Consequences. The parties to this
\nAgreement intend that, for federal income tax purposes, the Mergers shall
\nqualify as transfers of Enron Common Stock and Dynegy Common Stock to Newco in a
\ntransaction qualifying under Section 351 of the Internal Revenue Code of 1986,
\nas amended (the “Code”).<\/p>\n
D. Intended U.S. Accounting Treatment. The parties to this
\nAgreement intend that the Mergers be treated as the purchase of Enron by Dynegy
\nfor accounting purposes.<\/p>\n
E. Preferred Stock Subscription Agreements. Concurrently with
\nthe execution and delivery of this Agreement, (i) Dynegy is entering into a
\nSubscription Agreement with Northern Natural Gas Company (“Northern”) and Enron
\npursuant to which Dynegy is agreeing to purchase from Northern 1,000 shares of
\nits Series A Preferred Stock (the “Northern Series A Preferred Stock”); and (ii)
\nChevronTexaco Corporation (“ChevronTexaco”) is entering into a Subscription
\nAgreement with Dynegy (the “Dynegy Subscription Agreement”) pursuant to which
\nChevronTexaco is agreeing to purchase from Dynegy 150,000 shares of its Series B
\nMandatorily Convertible Redeemable Preferred Stock, no par value (the “Dynegy
\nSeries B Preferred Stock”).<\/p>\n
NOW, THEREFORE, in consideration of the foregoing, and of the
\nrepresentations, warranties, covenants and agreements contained herein, the
\nparties hereto hereby agree as follows:<\/p>\n
ARTICLE 1<\/p>\n
THE MERGERS<\/p>\n
Section 1.1 The Mergers.<\/p>\n
(a) Upon the terms and subject to conditions of this
\nAgreement, at the Effective Time, Enron Merger Sub shall be merged with and into
\nEnron in accordance with this Agreement, and the separate corporate existence of
\nEnron Merger Sub shall thereupon cease. Enron shall be the surviving entity in
\nthe Enron Merger (sometimes hereinafter referred to as the “Enron Surviving
\nEntity”). The Enron Merger shall have the effects specified herein and in the
\nBusiness Corporation Act of the State of Oregon (the “OBCA”).<\/p>\n
(b) Upon the terms and subject to conditions of this
\nAgreement, at the Effective Time, Dynegy Merger Sub shall be merged with and
\ninto Dynegy in accordance with this Agreement, and the separate corporate
\nexistence of Dynegy Merger Sub shall thereupon cease. Dynegy shall be the
\nsurviving entity in the Dynegy Merger (sometimes hereinafter referred to as the
\n“Dynegy Surviving Entity”). The Dynegy Merger shall have the effects specified
\nherein and in the Business Corporation Act of the State of Illinois (the
\n“IBCA”).<\/p>\n
Section 1.2 The Closing. Upon the terms and subject to the
\nconditions of this Agreement, the closing of the Mergers (the “Closing”) shall
\ntake place (a) at the offices of Baker Botts L.L.P., One Shell Plaza, 910
\nLouisiana, Houston, Texas 77002, at 9:00 a.m., local time, on the first business
\nday immediately following the day on which the last to be fulfilled or waived of
\nthe conditions set forth in Section 8.1, or, if on such day any condition set
\nforth in Section 8.2 or Section 8.3 has not been fulfilled or waived, as soon as
\npracticable after all the conditions set forth in Article 8 (other than the
\nconditions that by their terms are only capable of being satisfied on the
\nClosing Date) have been fulfilled or waived in accordance herewith or (b) at
\nsuch other time, date or place as Dynegy and Enron may agree, but in no event
\nprior to the expiration of a period of six months after the initial purchase of
\nshares of Dynegy Series B Preferred Stock by ChevronTexaco pursuant to the
\nDynegy Subscription Agreement. The date on which the Closing occurs is
\nhereinafter referred to as the “Closing Date.”<\/p>\n
Section 1.3 Effective Time. On the Closing Date, (i) Dynegy,
\nEnron and Enron Merger Sub shall cause articles of merger meeting the
\nrequirements of Section 60.494 of the OBCA to be properly executed and filed in
\naccordance with the OBCA and (ii) Dynegy, Enron and Dynegy Merger Sub shall
\ncause articles of merger meeting the requirements of Section 11.25 of the IBCA
\nto be properly executed and filed in accordance with the IBCA (collectively, the
\n“Articles of Merger”). The Mergers shall become effective at the time that
\nDynegy and Enron shall have agreed upon and designated in the respective
\nArticles of Merger as the effective time thereof (the “Effective Time”).<\/p>\n
2<\/p>\n
ARTICLE 2<\/p>\n
CERTIFICATE OF INCORPORATION AND BYLAWS OF NEWCO;
\n ARTICLES OF INCORPORATION AND BYLAWS OF THE SURVIVING ENTITIES<\/p>\n
Section 2.1 Certificate of Incorporation and Bylaws of Newco.
\nAt or prior to the Effective Time, Dynegy and Newco shall take all action as may
\nbe necessary to cause Newco’s certificate of incorporation and bylaws to be
\namended and restated as of the Effective Time as set forth in Exhibits 2.1(a)
\n(subject to any adjustments necessary to permit Newco to fulfill its obligations
\nunder Section 7.14) and 2.1(b) hereto, respectively, and to reflect that Newco
\nshall be named “Dynegy Inc.”<\/p>\n
Section 2.2 Articles of Incorporation of the Enron Surviving
\nEntity. As of the Effective Time, the articles of incorporation of Enron in
\neffect immediately prior to the Effective Time shall be the articles of
\nincorporation of the Enron Surviving Entity, until duly amended in accordance
\nwith applicable law.<\/p>\n
Section 2.3 Bylaws of the Enron Surviving Entity. As of the
\nEffective Time, the bylaws of Enron in effect immediately prior to the Effective
\nTime shall be the bylaws of the Enron Surviving Entity, until duly amended in
\naccordance with applicable law; provided that the number of directors of the
\nEnron Surviving Entity shall be changed to equal the number of directors of
\nEnron Merger Sub immediately prior to the Effective Time.<\/p>\n
Section 2.4 Articles of Incorporation of the Dynegy Surviving
\nEntity. As of the Effective Time, the articles of incorporation of Dynegy in
\neffect immediately prior to the Effective Time shall be the articles of
\nincorporation of the Dynegy Surviving Entity, until duly amended in accordance
\nwith applicable law.<\/p>\n
Section 2.5 Bylaws of the Dynegy Surviving Entity. As of the
\nEffective Time, the bylaws of Dynegy Merger Sub in effect immediately prior to
\nthe Effective Time shall be the bylaws of the Dynegy Surviving Entity, until
\nduly amended in accordance with applicable law; provided that the number of
\ndirectors of the Dynegy Surviving Entity shall be changed to equal the number of
\ndirectors of Dynegy Merger Sub immediately prior to the Effective Time.<\/p>\n
ARTICLE 3<\/p>\n
DIRECTORS AND OFFICERS OF NEWCO AND
\n OF THE SURVIVING ENTITIES<\/p>\n
Section 3.1 Board of Directors of Newco.<\/p>\n
(a) At the Effective Time, the Board of Directors of Newco
\nshall consist of not more than 15 members, at least three of which shall be
\ndesignated by Enron, after consultation with Dynegy, before the Effective Time
\n(“Former Enron Directors”). Prior to the Effective Time, Dynegy shall, after
\nconsultation with Enron, determine the total number of directors on the Board of
\nDirectors of Newco effective as of the Effective Time and the number of Former
\nEnron Directors (in each case subject to the preceding sentence) and designate
\nthe current members of the Dynegy Board of Directors that will serve on the
\nNewco Board of <\/p>\n
3<\/p>\n
Directors as of the Effective Time (“Former Dynegy Directors”). Charles L.
\nWatson shall be the Chairman of the Board of Newco. From and after the Effective
\nTime, each person so designated shall serve as a director of Newco until such
\nperson’s successor shall be elected and qualified or such person’s earlier
\ndeath, resignation or removal in accordance with the certificate of
\nincorporation and bylaws of Newco.<\/p>\n
(b) Prior to the Effective Time, Dynegy shall cause Newco to
\ntake such action as may be necessary to cause the Dynegy designees and the Enron
\ndesignees to be elected to the Board of Directors of Newco as of the Effective
\nTime.<\/p>\n
Section 3.2 Certain Officers of Newco. From and after the
\nEffective Time, Charles L. Watson shall be the Chief Executive Officer of Newco
\nand Stephen W. Bergstrom shall be the President and Chief Operating Officer of
\nNewco.<\/p>\n
Section 3.3 Board of Directors of Enron Surviving Entity. The
\ndirectors of Enron Merger Sub immediately prior to the Effective Time shall be
\nthe directors of the Enron Surviving Entity as of the Effective Time, until
\ntheir successors shall be elected and qualified or their earlier death,
\nresignation or removal in accordance with the articles of incorporation and
\nbylaws of the Enron Surviving Entity.<\/p>\n
Section 3.4 Officers of Enron Surviving Entity. The officers
\nof Enron immediately prior to the Effective Time shall be the officers of the
\nEnron Surviving Entity as of the Effective Time, until their successors shall be
\nappointed or their earlier death, resignation or removal in accordance with the
\narticles of incorporation and bylaws of the Enron Surviving Entity.<\/p>\n
Section 3.5 Board of Directors of Dynegy Surviving Entity. The
\ndirectors of Dynegy Merger Sub immediately prior to the Effective Time shall be
\nthe directors of the Dynegy Surviving Entity as of the Effective Time, until
\ntheir successors shall be elected and qualified or their earlier death,
\nresignation or removal in accordance with the articles of incorporation and
\nbylaws of the Dynegy Surviving Entity.<\/p>\n
Section 3.6 Officers of Dynegy Surviving Entity. The officers
\nof Dynegy immediately prior to the Effective Time shall be the officers of the
\nDynegy Surviving Entity as of the Effective Time, until their successors shall
\nbe appointed or their earlier death, resignation or removal in accordance with
\nthe articles of incorporation and bylaws of the Dynegy Surviving Entity.<\/p>\n
ARTICLE 4<\/p>\n
CONVERSION OF COMMON STOCK<\/p>\n
Section 4.1 Enron Merger Ratio. For purposes of this
\nAgreement:<\/p>\n
(a) The “Enron Merger Ratio” shall equal 0.2685, subject to
\n adjustment as provided in this Section 4.1. If, on or after the date of
\n this Agreement, Enron issues or sells any shares of Enron Common Stock
\n or any Enron Convertible Securities, other than Excluded Convertible
\n Securities and securities issued upon conversion, exercise or <\/p>\n
4<\/p>\n
exchange of Excluded Convertible Securities (collectively, the “Enron
\n Additional Securities”), for Sales Consideration per share of Enron
\n Common Stock less than the Enron Parity Price as of the date a price is
\n determined pursuant to a binding agreement for such issuance or sale,
\n then the Enron Merger Ratio shall be adjusted by multiplying the Enron
\n Merger Ratio immediately prior to such adjustment by a fraction, (i)
\n the numerator of which is the sum of (a) the number of fully diluted
\n shares of Enron Common Stock outstanding (calculated using the treasury
\n stock method) immediately prior to the adjustment (the “Original
\n Outstanding Enron Shares”) plus (b) the aggregate Sales Consideration
\n for such Enron Additional Securities divided by the Enron Parity Price,
\n and (ii) the denominator of which is the sum of the Original
\n Outstanding Enron Shares plus the number of shares of Enron Common
\n Stock represented by such Enron Additional Securities.<\/p>\n
(b) “Enron Convertible Securities” means any shares of capital
\n stock or securities convertible into or exchangeable for Enron Common
\n Stock, or any options, rights or warrants exercisable to purchase Enron
\n Common Stock.<\/p>\n
(c) “Enron Parity Price” means, with respect to any date, the
\n product of (i) the Enron Merger Ratio on such date multiplied by (ii)
\n the per share last reported price of the Dynegy Class A Common Stock as
\n reported on the consolidated transaction reporting system for
\n securities traded on the New York Stock Exchange, Inc. (“NYSE”) (as
\n reported in the New York City edition of The Wall Street Journal or, if
\n not reported thereby, another authoritative source) on such date.<\/p>\n
(d) “Sales Consideration” with respect to any issuance or sale
\n of Enron Additional Securities means the aggregate of (i) the cash
\n consideration, (ii) the trading value (based on the average last
\n reported prices therefor for the five consecutive trading days ending
\n on the first trading day prior to such date as quoted by an
\n authoritative source agreed upon by Dynegy and Enron) for any listed or
\n traded securities, and (iii) the fair market value (as determined by
\n agreement of Dynegy and Enron) for any other consideration, in each
\n case received therefor or to be received upon the exercise of any
\n option or warrant. In the event of the issuance of any Enron
\n Convertible Securities, the shares of Enron Common Stock issuable with
\n respect to such Enron Convertible Securities shall be deemed to be
\n issued in such transaction on an as converted basis.<\/p>\n
(e) “Excluded Convertible Securities” means (i) the Northern
\n Series A Preferred Stock, (ii) any Enron Convertible Securities
\n outstanding on the date of this Agreement and disclosed, or not
\n required to be disclosed, pursuant to this Agreement, other than the
\n first two items of Section 5.3 of the Enron Disclosure Letter, and
\n (iii) employee stock options granted after the date hereof permitted by
\n Section 7.1(f), provided that the exercise price thereof is not less
\n than the fair market value on the date of grant (as provided in the
\n applicable plan).<\/p>\n
Section 4.2 Conversion of Capital Stock of Enron and Enron
\nMerger Sub.<\/p>\n
(a) At the Effective Time, each share of common stock, no par
\nvalue, of Enron Merger Sub issued and outstanding immediately prior to the
\nEffective Time shall, by virtue of the Enron Merger and without any action on
\nthe part of the holder thereof, be converted <\/p>\n
5<\/p>\n
into and become the number of fully paid and nonassessable shares of common
\nstock, no par value, of the Enron Surviving Entity equal to the quotient of the
\nnumber of fully diluted shares of Enron Common Stock outstanding immediately
\nprior to the Effective Time divided by 1,000.<\/p>\n
(b) At the Effective Time, each share of Enron Common Stock
\nissued and outstanding immediately prior to the Effective Time, including any
\nshares subject to employment-related restrictions (other than shares of Enron
\nCommon Stock to be canceled without payment of any consideration therefor
\npursuant to Section 4.2(c)), shall, by virtue of the Enron Merger and without
\nany action on the part of the holder thereof, be converted into a fraction of a
\nshare of Newco Class A Common Stock equal to the Enron Merger Ratio and
\nthereupon shall cease to be outstanding and shall be canceled and retired and
\nshall cease to exist, and each holder of such shares of Enron Common Stock shall
\nthereafter cease to have any rights with respect to such shares of Enron Common
\nStock, except the right to receive, without interest, certificates for shares of
\nNewco Class A Common Stock in accordance with Section 4.4(c) and cash for
\nfractional shares in accordance with Section 4.4(c) and Section 4.4(f) upon the
\nsurrender of the certificate or certificates that immediately prior to the
\nEffective Time represented shares of Enron Common Stock (“Enron Certificates”).<\/p>\n
(c) Each share of Enron Common Stock held in Enron’s treasury
\nand each share of Enron Common Stock owned by Enron, Newco, Dynegy, Dynegy
\nMerger Sub or Enron Merger Sub shall, at the Effective Time and by virtue of the
\nEnron Merger, cease to be outstanding and shall be canceled and retired without
\npayment of any consideration therefor, and no shares of capital stock of Newco
\nor other consideration shall be delivered in exchange therefor.<\/p>\n
(d) At the Effective Time, each share of Enron Preferred Stock
\nissued and outstanding immediately prior to the Effective Time shall remain
\noutstanding and unaffected by the Enron Merger.<\/p>\n
Section 4.3 Conversion of Capital Stock of Newco, Dynegy and
\nDynegy Merger Sub.<\/p>\n
(a) At the Effective Time, each share of common stock, no par
\nvalue, of Dynegy Merger Sub issued and outstanding immediately prior to the
\nEffective Time shall, by virtue of the Dynegy Merger and without any action on
\nthe part of the holder thereof, be converted into and become one fully paid and
\nnonassessable share of common stock, no par value, of the Dynegy Surviving
\nEntity.<\/p>\n
(b) At the Effective Time, (i) each share of Dynegy Class A
\nCommon Stock issued and outstanding immediately prior to the Effective Time
\n(other than Dynegy Dissenting Shares and shares of Dynegy Class A Common Stock
\nto be canceled without payment of any consideration therefor pursuant to Section
\n4.3(c)) shall, by virtue of the Dynegy Merger and without any action on the part
\nof the holder thereof, be converted into one share (the “Dynegy Merger Ratio”)
\nof Newco Class A Common Stock and (ii) each share of Dynegy Class B Common Stock
\nissued and outstanding immediately prior to the Effective Time (other than
\nDynegy Dissenting Shares and shares of Dynegy Class B Common Stock to be
\ncanceled without payment of any consideration therefor pursuant to Section
\n4.3(c)) shall, by virtue of the Dynegy Merger and without any action on the part
\nof the holder thereof, be converted into one share of <\/p>\n
6<\/p>\n
Newco Class B Common Stock (collectively, the “Dynegy Consideration”). At the
\nEffective Time, each share of Dynegy Common Stock shall, by virtue of the Dynegy
\nMerger and without any action on the part of the holder thereof, cease to be
\noutstanding and shall be canceled and retired and shall cease to exist, and each
\nholder of shares of Dynegy Common Stock (other than Dynegy Dissenting Shares and
\nshares of Dynegy Common Stock to be canceled without payment of any
\nconsideration therefor pursuant to Section 4.3(c)) shall thereafter cease to
\nhave any rights with respect to such shares of Dynegy Common Stock.<\/p>\n
(c) Each share of Dynegy Common Stock issued and held in
\nDynegy’s treasury and each share of Dynegy Common Stock owned by Enron shall, at
\nthe Effective Time and by virtue of the Dynegy Merger, cease to be outstanding
\nand shall be canceled and retired without payment of any consideration therefor,
\nand no shares of capital stock of Newco or other consideration shall be
\ndelivered in exchange therefor.<\/p>\n
(d) At the Effective Time, each share of Dynegy Series B
\nPreferred Stock issued and outstanding immediately prior to the Effective Time,
\nif any, shall remain outstanding and unaffected by the Dynegy Merger.<\/p>\n
(e) Each share of Newco Common Stock and all other shares of
\ncapital stock of Newco issued and outstanding immediately prior to the Effective
\nTime shall, at the Effective Time and without any action on the part of Newco or
\nthe holder thereof, cease to be outstanding and shall be canceled and retired
\nwithout payment of any consideration therefor, and no shares of capital stock of
\nNewco or other consideration shall be delivered in exchange therefor.<\/p>\n
Section 4.4 Exchange of Certificates.<\/p>\n
(a) From and after the Effective Time, each outstanding
\ncertificate which prior to the Effective Time represented shares of Dynegy
\nCommon Stock (“Dynegy Certificates”) shall be deemed for all purposes to
\nevidence ownership of, and to represent, the shares of Newco Common Stock into
\nwhich the shares of Dynegy Common Stock represented by such Dynegy Certificate
\nhave been converted as herein provided. The registered owner on the books and
\nrecords of Dynegy or its transfer agent of any such Dynegy Certificate as of the
\nEffective Time shall, until such Dynegy Certificate shall have been surrendered
\nfor transfer or otherwise accounted for to Newco or its transfer agent, have and
\nbe entitled to exercise any voting and other rights with respect to and to
\nreceive any dividend and other distributions upon the shares of Newco Common
\nStock evidenced by such Dynegy Certificate as above provided. Following the
\nEffective Time, each holder of record of one or more Dynegy Certificates may,
\nbut shall not be required to, surrender any Dynegy Certificate for cancellation
\nto Newco or its transfer agent, and the holder of such Dynegy Certificate shall
\nbe entitled to receive in exchange therefor a certificate representing that
\nnumber of shares of Newco Common Stock which such holder has the right to
\nreceive pursuant to the provisions of this Article 4, and the Dynegy Certificate
\nso surrendered shall forthwith be canceled. In the event of a transfer of
\nownership of shares of Dynegy Common Stock that is not registered in the
\ntransfer records of Newco or Dynegy, a certificate representing the proper
\nnumber of shares of Newco Common Stock may be issued to such a transferee if the
\nDynegy Certificate representing such shares of Dynegy Common Stock is presented
\nto Newco or its transfer agent, accompanied by all documents <\/p>\n
7<\/p>\n
required to evidence and effect such transfer and to evidence that any
\napplicable stock transfer taxes have been paid.<\/p>\n
(b) As of the Effective Time, Newco shall appoint Mellon
\nInvestor Services LLC or such other party reasonably satisfactory to Enron as
\nexchange agent (the “Exchange Agent”), and Newco shall, when and as needed,
\ndeposit, or cause to be deposited with the Exchange Agent for the benefit of the
\nholders of shares of Enron Common Stock for exchange in accordance with this
\nArticle 4, certificates representing the shares of Newco Common Stock to be
\nissued pursuant to Section 4.2 and delivered pursuant to this Section 4.4 in
\nexchange for outstanding shares of Enron Common Stock. When and as needed, Newco
\nshall provide the Exchange Agent immediately following the Effective Time cash
\nsufficient to pay cash in lieu of fractional shares in accordance with Section
\n4.4(c) and (f) (such cash and certificates for shares of Newco Common Stock,
\ntogether with any dividends or distributions with respect thereto, being
\nhereinafter referred to as the “Exchange Fund”).<\/p>\n
(c) Promptly after the Effective Time, Newco shall cause the
\nExchange Agent to mail to each holder of record of one or more Enron
\nCertificates (together with the Dynegy Certificates, the “Certificates”) (other
\nthan to holders of shares of Enron Common Stock that, pursuant to Section
\n4.2(c), are canceled without payment of any consideration therefor): (A) a
\nletter of transmittal (the “Letter of Transmittal”), which shall specify that
\ndelivery shall be effected, and risk of loss and title to the Enron Certificates
\nshall pass, only upon delivery of the Enron Certificates to the Exchange Agent
\nand shall be in such form and have such other provisions as Newco may reasonably
\nspecify and (B) instructions for use in effecting the surrender of the Enron
\nCertificates in exchange for certificates representing shares of Newco Common
\nStock and cash in lieu of fractional shares, if any. Upon surrender of an Enron
\nCertificate for cancellation to the Exchange Agent together with such Letter of
\nTransmittal, duly executed and completed in accordance with the instructions
\nthereto, the holder of such Enron Certificate shall be entitled to receive in
\nexchange therefor (x) a certificate representing that number of whole shares of
\nNewco Common Stock and (y) a check representing the amount of cash in lieu of
\nfractional shares, if any, and unpaid dividends and distributions, if any, which
\nsuch holder has the right to receive pursuant to the provisions of this Article
\n4, after giving effect to any required withholding tax, and the Enron
\nCertificate so surrendered shall forthwith be canceled. No interest will be paid
\nor accrued on the cash in lieu of fractional shares and unpaid dividends and
\ndistributions, if any, payable to holders of Enron Certificates. In the event of
\na transfer of ownership of Enron Common Stock that is not registered in the
\ntransfer records of Enron, a certificate representing the proper number of
\nshares of Newco Common Stock, together with a check for the cash to be paid in
\nlieu of fractional shares, if any, may be issued to such a transferee if the
\nEnron Certificate representing such Enron Common Stock is presented to the
\nExchange Agent, accompanied by all documents required to evidence and effect
\nsuch transfer and to evidence that any applicable stock transfer taxes have been
\npaid.<\/p>\n
(d) Notwithstanding any other provisions of this Agreement, no
\ndividends or other distributions declared or made after the Effective Time with
\nrespect to shares of Newco Common Stock with a record date after the Effective
\nTime shall be paid to the holder of any unsurrendered Enron Certificate with
\nrespect to the shares of Newco Common Stock represented by such Enron
\nCertificate as a result of the conversion provided in Section 4.2(b) until such
\nEnron Certificate is surrendered as provided herein. Subject to the effect of
\napplicable laws, <\/p>\n
8<\/p>\n
following surrender of any such Enron Certificate, there shall be paid to the
\nholder of the Enron Certificates so surrendered, without interest, (i) at the
\ntime of such surrender, the amount of dividends or other distributions with a
\nrecord date after the Effective Time theretofore payable and not paid with
\nrespect to the number of whole shares of Newco Common Stock issued pursuant to
\nSection 4.2, less the amount of any withholding taxes, and (ii) at the
\nappropriate payment date, the amount of dividends or other distributions with a
\nrecord date after the Effective Time but prior to surrender and a payment date
\nsubsequent to surrender payable with respect to such whole shares of Newco
\nCommon Stock, less the amount of any withholding taxes.<\/p>\n
(e) At or after the Effective Time, the Enron Surviving Entity
\nand the Dynegy Surviving Entity shall pay from funds on hand at the Effective
\nTime any dividends or make other distributions with a record date prior to the
\nEffective Time that may have been declared or made by Enron or Dynegy,
\nrespectively, on shares of Enron Common Stock or Dynegy Common Stock,
\nrespectively, that remain unpaid at the Effective Time, and after the Effective
\nTime, there shall be no transfers on the stock transfer books of the Enron
\nSurviving Entity of the shares of Enron Common Stock, or on the stock transfer
\nbooks of the Dynegy Surviving Entity of the shares of Dynegy Common Stock, that
\nwere outstanding immediately prior to the Effective Time. If, after the
\nEffective Time, Enron Certificates are presented to the Enron Surviving Entity
\nor Dynegy Certificates are presented to the Dynegy Surviving Entity, the
\npresented Certificates shall be canceled and exchanged for certificates
\nrepresenting shares of Newco Common Stock and cash in lieu of fractional shares,
\nif any, deliverable in respect thereof pursuant to this Agreement in accordance
\nwith the procedures set forth in this Article 4. Certificates surrendered for
\nexchange by any person constituting an “affiliate” of Dynegy or Enron for
\npurposes of Rule 145(c) under the Securities Act of 1933, as amended (the
\n“Securities Act”), shall not be exchanged until Newco has received a written
\nagreement from such person as provided in Section 7.11.<\/p>\n
(f) No fractional shares of Newco Common Stock shall be issued
\npursuant hereto. In lieu of the issuance of any fractional shares of Newco
\nCommon Stock pursuant to Section 4.2(b), cash adjustments will be paid to
\nholders in respect of any fractional shares of Newco Common Stock that would
\notherwise be issuable, and the amount of such cash adjustment shall be equal to
\nsuch fractional proportion of the Newco Share Price. For purposes of this
\nAgreement, the “Newco Share Price” shall mean the average of the per share last
\nreported prices of the Dynegy Class A Common Stock as reported on the
\nconsolidated transaction reporting system for securities traded on the NYSE (as
\nreported in the New York City edition of The Wall Street Journal or, if not
\nreported thereby, another authoritative source) for the 20 consecutive trading
\ndays ending on the fifth trading day prior to the Closing Date, appropriately
\nadjusted for any stock splits, reverse stock splits, stock dividends,
\nrecapitalizations or other similar transactions.<\/p>\n
(g) Any portion of the Exchange Fund (including the proceeds
\nof any investments thereof and any certificates for shares of Newco Common
\nStock) that remains undistributed to the former shareholders of Enron one year
\nafter the Effective Time shall be delivered to Newco. Any former shareholders of
\nEnron who have not theretofore complied with this Article 4 shall thereafter
\nlook only to Newco for delivery of certificates representing their shares of
\nNewco Common Stock and cash in lieu of fractional shares, if any, and for any
\nunpaid <\/p>\n
9<\/p>\n
dividends and distributions on the shares of Newco Common Stock deliverable to
\nsuch former shareholder pursuant to this Agreement.<\/p>\n
(h) None of Newco, Dynegy, Enron, the Dynegy Surviving Entity,
\nthe Enron Surviving Entity, the Exchange Agent or any other person shall be
\nliable to any person for any portion of the Exchange Fund properly delivered to
\na public official pursuant to applicable abandoned property, escheat or similar
\nlaws.<\/p>\n
(i) If any Certificate shall have been lost, stolen or
\ndestroyed, upon the making of an affidavit of that fact by the person claiming
\nsuch Certificate to be lost, stolen or destroyed and, if required by Newco, the
\nposting by such person of a bond in such reasonable amount as Newco may direct
\nas indemnity against any claim that may be made against it with respect to such
\nCertificate, the Exchange Agent will issue in exchange for such lost, stolen or
\ndestroyed Certificate certificates representing the shares of Newco Common
\nStock, cash in lieu of fractional shares, if any, and unpaid dividends and
\ndistributions on shares of Newco Common Stock deliverable in respect thereof
\npursuant to this Agreement.<\/p>\n
Section 4.5 Options.<\/p>\n
(a) At the Effective Time, (i) all options to acquire shares
\nof Enron Common Stock outstanding at the Effective Time under Enron’s stock
\nplans (collectively, the “Enron Stock Plans”) identified in Section 4.5(a) of
\nthe Enron Disclosure Letter (individually, a “Enron Option” and collectively,
\nthe “Enron Options”) and (ii) all options to acquire shares of Dynegy Class A
\nCommon Stock outstanding at the Effective Time under Dynegy’s stock plans
\n(collectively, the “Dynegy Stock Plans”) identified in Section 4.5(a) of the
\nDynegy Disclosure Letter (individually, a “Dynegy Option” and collectively, the
\n“Dynegy Options”) shall remain outstanding following the Effective Time, subject
\nto the modifications described in this Section 4.5(a). Prior to the Effective
\nTime, Enron, Dynegy and Newco shall take all actions (if any) as may be required
\nto permit the assumption of such Enron Options and Dynegy Options by Newco
\npursuant to this Section 4.5(a). At the Effective Time, the Enron Options and
\nthe Dynegy Options shall be assumed and adjusted by Newco in the manner set
\nforth herein and with respect to Dynegy Options that are incentive stock options
\nwithin the meaning of Section 422 of the Code in such manner that Newco is a
\ncorporation “assuming a stock option in a transaction to which Section 424(a)
\napplies” within the meaning of Section 424 of the Code. Each Enron Option
\nassumed and adjusted by Newco shall be subject to the same terms and conditions
\nas under the applicable Enron Stock Plan and the applicable option agreement
\nentered into pursuant thereto, except that, immediately following the Effective
\nTime, (A) each Enron Option shall be an option for that whole number of shares
\nof Newco Class A Common Stock (rounded up to the next whole share) equal to the
\nnumber of shares of Enron Common Stock subject to such Enron Option immediately
\nprior to the Effective Time multiplied by the Enron Merger Ratio, and (B) the
\nexercise price per Newco share shall be an amount equal to the exercise price
\nper share of Enron Common Stock subject to such Enron Option in effect
\nimmediately prior to the Effective Time divided by the Enron Merger Ratio (the
\nprice per share, as so determined, being rounded down to the nearest whole
\ncent). Each Dynegy Option assumed and adjusted by Newco shall be subject to the
\nsame terms and conditions as under the applicable Dynegy Stock Plan and the
\napplicable option agreement entered into pursuant thereto, except that,
\nimmediately following the Effective Time, each Dynegy Option shall be an option
\nfor the number of shares of Newco <\/p>\n
10<\/p>\n
Class A Common Stock equal to the number of shares of Dynegy Common Stock
\nsubject to such Dynegy Option immediately prior to the Effective Time. Without
\nlimiting the foregoing, effective at the Effective Time, Newco shall assume the
\nEnron Corp. 1999 Stock Plan, Enron Corp. 1994 Stock Plan, Enron Corp. 1991 Stock
\nPlan, Dynegy Inc. 2000 Long Term Incentive Plan, Dynegy Inc. 2001 Non-Executive
\nStock Incentive Plan and Dynegy Inc. 2001 Special Long-Term Incentive Plan
\n(collectively, the “Assumed Plans”) for purposes of employing such plans to make
\ngrants of stock options and other awards based on shares of Newco Class A Common
\nStock following the Effective Time; to the extent that any obligation exists at
\nthe Effective Time to issue Enron Common Stock or Dynegy Class A Common Stock
\nunder any Assumed Plan, the obligation of Newco thereafter to issue Newco Common
\nStock in fulfillment of such previous obligation shall be to issue the number of
\nshares of Newco Common Stock equal to (i) in the case of Enron Common Stock, the
\nnumber of shares (rounded to the nearest whole share) of Enron Common Stock
\nsubject to such obligation multiplied by the Enron Merger Ratio and (ii) in the
\ncase of Dynegy Class A Common Stock, the number of shares of Dynegy Class A
\nCommon Stock subject to such obligation; provided, however, that, if the
\nobligation is an award of a specified dollar amount of Enron Common Stock or
\nDynegy Common Stock, the substitution shall be effected simply by substituting
\nNewco Common Stock having the specified dollar value.<\/p>\n
(b) At or prior to the Effective Time, Newco shall take all
\ncorporate action necessary to reserve for issuance a number of shares of Newco
\nClass A Common Stock equal to the number of shares of Newco Class A Common Stock
\navailable for issuance pursuant to the Assumed Plans (which number shall be the
\nsum of (i) the product (rounded to the nearest whole share) of the number of
\nshares of Enron Common Stock available for issuance immediately prior to the
\nEffective Time multiplied by the Enron Merger Ratio plus (ii) the number of
\nshares of Dynegy Common Stock available for issuance immediately prior to the
\nEffective Time). Promptly following the Closing Date, Newco shall file with the
\nSecurities and Exchange Commission (the “SEC”) a Registration Statement on Form
\nS-8 (or a post-effective amendment on Form S-8 with respect to the Form S-4 or
\nsuch other appropriate form) covering all such shares of Newco Class A Common
\nStock and shall cause such registration statement to remain effective (and shall
\ncause the prospectus or prospectuses relating thereto to remain compliant with
\napplicable securities laws) for as long as there are outstanding any such Enron
\nOptions or Dynegy Options or, with respect to Assumed Plans other than the Enron
\nStock Plans or Dynegy Stock Plans, for as long as required under applicable
\nsecurities laws.<\/p>\n
(c) Except as otherwise specifically provided by this Section
\n4.5, the terms of the Enron Options and Dynegy Options and the relevant Enron
\nStock Plans and Dynegy Stock Plans, as in effect on the Effective Time, shall
\nremain in full force and effect with respect to the Enron Options and Dynegy
\nOptions, as applicable, after giving effect to the Mergers and the assumptions
\nby Newco as set forth above; similarly, the terms of each other Assumed Plan
\nshall remain in full force and effect after giving effect to the Mergers and the
\nassumptions by Newco as set forth above. As soon as practicable following the
\nEffective Time, Newco shall deliver to the holders of Enron Options and Dynegy
\nOptions and beneficiaries of awards under Assumed Plans other than Enron Stock
\nPlans and Dynegy Stock Plans appropriate notices setting forth the rights of
\nsuch holders and beneficiaries pursuant to the respective Enron Stock Plans and
\nDynegy Stock Plans and other Assumed Plans and under the agreements evidencing
\nthe grants of such Enron Options and Dynegy Options, and that such Enron Options
\nand Dynegy Options and such <\/p>\n
11<\/p>\n
Assumed Plans shall be assumed by Newco and shall continue in effect on the same
\nterms and conditions (subject to any adjustments required by this Section 4.5).<\/p>\n
Section 4.6 Dynegy Dissenting Shares. Notwithstanding anything
\nin this Agreement to the contrary, no share of Dynegy Common Stock the holder of
\nwhich shall have properly complied with the provisions of Section 11.70 of the
\nIBCA as to rights to dissent with respect to the Dynegy Merger (a “Dynegy
\nDissenting Share”) shall be deemed converted into and to represent the right to
\nreceive the Dynegy Consideration hereunder; and the holders of Dynegy Dissenting
\nShares, if any, shall be entitled to receive such consideration as shall be
\ndetermined pursuant to and in accordance with the provisions of such Section
\n11.70; provided, however, that, if any holder fails to properly perfect or
\nexercise his or her rights to payment as provided in such Section 11.70, such
\nholder shall forfeit such right to payment for such Dynegy Dissenting Shares and
\neach such Dynegy Dissenting Share shall thereupon be deemed to be converted into
\nthe right to receive the Dynegy Consideration.<\/p>\n
Section 4.7 Adjustment of Enron Merger Ratio. If, subsequent
\nto the date of this Agreement but prior to the Effective Time, Dynegy changes
\nthe number of shares of Dynegy Common Stock, or Enron changes the number of
\nshares of Enron Common Stock, issued and outstanding as a result of a stock
\nsplit, reverse stock split, stock dividend, recapitalization or other similar
\ntransaction, the Enron Merger Ratio and other items dependent thereon shall be
\nappropriately adjusted.<\/p>\n
Section 4.8 Rule 16b-3 Approval. Newco agrees that its Board
\nof Directors shall, at or prior to the Effective Time, adopt resolutions
\nspecifically approving, for purposes of Rule 16b-3 (“Rule 16b-3”) under the
\nSecurities Exchange Act of 1934, as amended (the “Exchange Act”), the receipt,
\npursuant to Section 4.2 or Section 4.3, of shares of Newco Common Stock, and of
\noptions to acquire shares of Newco Class A Common Stock, by executive officers
\nor directors of Enron or Dynegy who become executive officers or directors of
\nNewco subject to Rule 16b-3.<\/p>\n
ARTICLE 5<\/p>\n
REPRESENTATIONS AND WARRANTIES OF ENRON<\/p>\n
Except as set forth in the disclosure letter delivered to
\nDynegy by Enron at or prior to the execution hereof (the “Enron Disclosure
\nLetter”), Enron represents and warrants to Dynegy, Newco, Dynegy Merger Sub and
\nEnron Merger Sub that:<\/p>\n
Section 5.1 Existence; Good Standing; Corporate Authority.
\nEnron is a corporation duly incorporated, validly existing and of active status
\nunder the laws of the State of Oregon. Enron is duly qualified to do business
\nand, to the extent such concept or similar concept exists in the relevant
\njurisdiction, is in good standing under the laws of any jurisdiction in which
\nthe character of the properties owned or leased by it therein or in which the
\ntransaction of its business makes such qualification necessary, except where the
\nfailure to be so qualified does not and is not reasonably likely to have,
\nindividually or in the aggregate, an Enron Material Adverse Effect. Enron has
\nall requisite corporate power and authority to own, operate and lease its
\nproperties and to carry on its business as now conducted. The copies of Enron’s
\narticles of <\/p>\n
12<\/p>\n
incorporation and bylaws previously made available to Dynegy are true and
\ncorrect and contain all amendments as of the date hereof.<\/p>\n
Section 5.2 Authorization, Validity and Effect of Agreements.
\nEnron has the requisite corporate power and authority to execute and deliver
\nthis Agreement and all other agreements and documents required to be executed
\nand delivered by Enron pursuant to this Agreement. The consummation by Enron of
\nthe transactions contemplated hereby has been duly authorized (i) by the Board
\nof Directors of Enron by unanimous vote of the directors present and (ii) by all
\nother requisite corporate action on behalf of Enron, other than the approval
\nreferred to in Section 5.20. This Agreement constitutes the valid and legally
\nbinding obligation of Enron, enforceable against Enron in accordance with its
\nterms, subject to applicable bankruptcy, insolvency, fraudulent transfer,
\nreorganization, moratorium or other similar laws relating to creditors’ rights
\nand general principles of equity. Enron has taken all action necessary to render
\nthe restrictions set forth in Section 60.825 to 60.845 of the OBCA and in
\nArticle V of its articles of incorporation inapplicable to this Agreement and
\nthe transactions contemplated hereby.<\/p>\n
Section 5.3 Capitalization. The authorized capital stock of
\nEnron consists of 1,200,000,000 shares of Enron Common Stock and 16,500,000
\nshares of preferred stock, no par value (“Enron Preferred Stock”). As of October
\n31, 2001, there were (i) 743,905,381 outstanding shares of Enron Common Stock,
\n(ii) 85,479,162 shares of Enron Common Stock reserved for issuance upon exercise
\nof outstanding Enron Options, (iii) 6,400,000 shares of Enron Common Stock
\nreserved for issuance upon exercise of an option held by Bank of America, (iv)
\n167,053,369 shares of Enron Common Stock reserved for issuance upon conversion
\nof outstanding Enron convertible or exchangeable securities and (v)
\n1,570,934.568509 outstanding shares of Enron Preferred Stock, consisting of
\n1,137,991 shares of Cumulative Second Preferred Convertible Stock (the “Second
\nPreferred Stock”), 35.568509 shares of 9.142% Perpetual Second Preferred Stock
\n(the “9.142% Preferred Stock”), 250,000 shares of Mandatorily Convertible Junior
\nPreferred Stock, Series B (the “Series B Preferred Stock”), and 182,908 shares
\nof Mandatorily Convertible Single Reset Preferred Stock, Series C (the “Series C
\nPreferred Stock”). All such issued and outstanding shares of Enron Common Stock
\nand Enron Preferred Stock are duly authorized, validly issued, fully paid,
\nnonassessable and free of preemptive rights. As of the date of this Agreement,
\nexcept as set forth in this Section 5.3 and except for shares delivered upon
\nexercises of options or conversions or exchanges of convertible or exchangeable
\nsecurities set forth in this Section 5.3 from October 31, 2001 to the date
\nhereof, there are no outstanding shares of capital stock of Enron, and there are
\nno options, warrants, calls, subscriptions, convertible securities or other
\nrights, agreements or commitments that may obligate Enron or any of its
\nSubsidiaries to issue, transfer or sell any shares of capital stock or other
\nvoting securities of Enron or any of its Significant Subsidiaries. Enron has no
\noutstanding bonds, debentures, notes or other obligations the holders of which
\nhave the right to vote, or (except for the Second Preferred Stock, the Series B
\nPreferred Stock, the Series C Preferred Stock and the Zero Coupon Convertible
\nSenior Notes due 2021 of Enron (the “Zeros”)) which are convertible into or
\nexercisable for securities having the right to vote, with the shareholders of
\nEnron on any matter.<\/p>\n
Section 5.4 Subsidiaries. For purposes of this Agreement,
\n“Significant Subsidiary” shall mean significant subsidiary as defined in Rule
\n1-02 of Regulation S-X of the Exchange Act. Each of Enron’s Significant
\nSubsidiaries is a corporation or other legal entity <\/p>\n
13<\/p>\n
duly organized, validly existing and, to the extent such concept or similar
\nconcept exists in the relevant jurisdiction, in good standing under the laws of
\nits jurisdiction of incorporation or organization, has the corporate or other
\nentity power and authority to own, operate and lease its properties and to carry
\non its business as it is now being conducted, and is duly qualified to do
\nbusiness and is in good standing (where applicable) in each jurisdiction in
\nwhich the ownership, operation or lease of its property or the conduct of its
\nbusiness requires such qualification, except for jurisdictions in which such
\nfailure to be so qualified or to be in good standing does not and is not
\nreasonably likely to have an Enron Material Adverse Effect. As of the date of
\nthis Agreement, all of the outstanding shares of capital stock of, or other
\nownership interests in, each of Enron’s Significant Subsidiaries are duly
\nauthorized, validly issued, fully paid and nonassessable, and are owned,
\ndirectly or indirectly, by Enron free and clear of all mortgages, deeds of
\ntrust, liens, security interests, pledges, leases, conditional sale contracts,
\ncharges, privileges, easements, rights of way, reservations, options, rights of
\nfirst refusal and other encumbrances (“Liens”).<\/p>\n
Section 5.5 Compliance with Laws; Permits. Except for such
\nmatters as, individually or in the aggregate, do not or are not reasonably
\nlikely to have an Enron Material Adverse Effect and except for matters arising
\nunder Environmental Laws, which are treated exclusively in Section 5.13, and for
\ntax matters, which are treated exclusively in Section 5.10:<\/p>\n
(a) Neither Enron nor any Subsidiary of Enron is in violation
\n of any applicable law, rule, regulation, code, governmental
\n determination, order, treaty, convention, governmental certification
\n requirement or other public limitation, U.S. or non-U.S. (collectively,
\n “Applicable Laws”), and no claim is pending or, to the knowledge of
\n Enron, threatened with respect to any such matters. To the knowledge of
\n Enron, no condition exists which does or is reasonably likely to
\n constitute a violation of or deficiency under any Applicable Law by
\n Enron or any Subsidiary of Enron.<\/p>\n
(b) Enron and each Subsidiary of Enron hold all permits,
\n licenses, certifications, variations, exemptions, orders, franchises
\n and approvals of all governmental or regulatory authorities necessary
\n for the conduct of their respective businesses as currently conducted
\n (the “Enron Permits”). All Enron Permits are in full force and effect
\n and there exists no default thereunder or breach thereof, and Enron has
\n no notice or actual knowledge that such Enron Permits will not be
\n renewed in the ordinary course after the Effective Time. No
\n governmental authority has given, or, to the knowledge of Enron,
\n threatened to give, any action to terminate, cancel or reform any Enron
\n Permit.<\/p>\n
(c) Enron and each Subsidiary of Enron possess all permits,
\n licenses, operating authorities, orders, exemptions, franchises,
\n variances, consents, approvals or other authorizations required for the
\n present ownership and operation of all its real property or leaseholds
\n (“Enron Real Property”). There exists no material default or breach
\n with respect to, and no party or governmental authority has taken or,
\n to the knowledge of Enron, threatened to take, any action to terminate,
\n cancel or reform any such permit, license, operating authority, order,
\n exemption, franchise, variance, consent, approval or other
\n authorization pertaining to Enron Real Property.<\/p>\n
14<\/p>\n
Section 5.6 No Conflict.<\/p>\n
(a) Neither the execution and delivery by Enron of this
\nAgreement nor the consummation by Enron of the transactions contemplated hereby
\nin accordance with the terms hereof will (i) subject to the approvals referred
\nto in Section 5.20, conflict with or result in a breach of any provisions of the
\narticles of incorporation or bylaws of Enron; (ii) violate, or conflict with, or
\nresult in a breach of any provision of, or constitute a default (or an event
\nwhich, with notice or lapse of time or both, would constitute a default) under,
\nor result in the termination or in a right of termination or cancellation of, or
\ngive rise to a right of purchase under, or accelerate the performance required
\nby, or result in the creation of any Lien upon any of the properties of Enron or
\nits Subsidiaries under, or result in being declared void, voidable, or without
\nfurther binding effect, or otherwise result in a detriment to Enron or any of
\nits Subsidiaries under, any of the terms, conditions or provisions of, any note,
\nbond, mortgage, indenture, deed of trust, license, concession, franchise,
\npermit, lease, contract, agreement, joint venture or other instrument or
\nobligation to which Enron or any of its Subsidiaries is a party, or by which
\nEnron or any of its Subsidiaries or any of their properties is bound or
\naffected; or (iii) subject to the filings and other matters referred to in
\nSection 5.6(b), contravene or conflict with or constitute a violation of any
\nprovision of any law, rule, regulation, judgment, order or decree binding upon
\nor applicable to Enron or any of its Subsidiaries, except, in the case of
\nmatters described in clause (ii) or (iii), as do not and are not reasonably
\nlikely to have, individually or in the aggregate, an Enron Material Adverse
\nEffect.<\/p>\n
(b) Neither the execution and delivery by Enron of this
\nAgreement nor the consummation by Enron of the transactions contemplated hereby
\nin accordance with the terms hereof will require any consent, approval,
\nqualification or authorization of, or filing or registration with, any court or
\ngovernmental or regulatory authority, other than (i) the filing of the Articles
\nof Merger provided for in Section 1.3, (i) the filing of a listing application
\nwith the NYSE pursuant to Section 7.9, (iii) filings required under the
\nHart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR
\nAct”), the Exchange Act, the Securities Act, the Public Utility Holding Company
\nAct of 1935, as amended (the “1935 Act”), or applicable state securities and
\n“Blue Sky” laws, (iv) filings, approvals and notifications required under
\napplicable non-U.S. competition, antitrust or premerger notification laws, (v)
\nfilings with, and the approval of, or notices to, non-U.S. regulatory
\nauthorities having jurisdiction over the Mergers set forth in Section 5.6(b)(v)
\nof the Enron Disclosure Letter, (vi) filings with, and the approval of, or
\nnotices to, other state regulatory authorities having jurisdiction over the
\nMergers set forth in Section 5.6(b)(vi) of the Enron Disclosure Letter (the
\nfilings, approvals and notices in this clause (vi), collectively, the “Enron
\nRegulatory Approvals”) and (vii) filings with, approvals of or notices to the
\nFederal Energy Regulatory Commission (the “FERC”) in connection with the
\nMergers, except for any consent, approval, qualification or authorization the
\nfailure of which to obtain and for any filing or registration the failure of
\nwhich to make does not and is not reasonably likely to have an Enron Material
\nAdverse Effect.<\/p>\n
Section 5.7 SEC Documents. Enron has filed with the SEC all
\ndocuments (including exhibits and any amendments thereto) required to be so
\nfiled by it since January 1, 1999 pursuant to Sections 13(a), 14(a) and 15(d) of
\nthe Exchange Act, and has made available (in paper form or via the internet) to
\nDynegy each registration statement, report, proxy statement or information
\nstatement (other than preliminary materials) it has so filed, each in the form<\/p>\n
15<\/p>\n
(including exhibits and any amendments thereto) filed with the SEC
\n(collectively, the “Enron Reports”) and has included in the Enron Disclosure
\nLetter a draft of its Quarterly Report on Form 10-Q for the quarter ended
\nSeptember 30, 2001 (the “Draft Third Quarter Report”). As of its respective
\ndate, each Enron Report (i) complied in all material respects in accordance with
\nthe applicable requirements of the Exchange Act and the rules and regulations
\nthereunder and (ii) did not contain any untrue statement of a material fact or
\nomit to state a material fact required to be stated therein or necessary to make
\nthe statements made therein, in the light of the circumstances under which they
\nwere made, not misleading, except for such statements, if any, as have been
\nmodified by subsequent filings with the SEC prior to the date hereof. Each of
\nthe consolidated balance sheets included in or incorporated by reference into
\nthe Enron Reports (including the related notes and schedules) fairly presents in
\nall material respects the consolidated financial position of Enron and its
\nconsolidated Subsidiaries as of its date, and each of the consolidated
\nstatements of operations, cash flows and changes in shareholders’ equity
\nincluded in or incorporated by reference into the Enron Reports (including any
\nrelated notes and schedules) fairly presents in all material respects the
\nresults of operations, cash flows or changes in shareholders’ equity, as the
\ncase may be, of Enron and its consolidated Subsidiaries for the periods set
\nforth therein (subject, in the case of unaudited statements, to (x) such
\nexceptions as may be permitted by Form 10-Q of the SEC and (y) normal year-end
\naudit adjustments which will not be material), in each case in accordance with
\ngenerally accepted accounting principles consistently applied during the periods
\ninvolved, except as may be noted therein. The draft consolidated balance sheet
\nof Enron and its consolidated Subsidiaries as of September 30, 2001 (the
\n“September 30, 2001 Balance Sheet”) included in the Draft Third Quarter Report
\n(including the related notes and schedules) fairly presents in all material
\nrespects the consolidated financial position of Enron and its consolidated
\nSubsidiaries as of that date, and the consolidated statements of operations,
\ncash flows and changes in shareholders’ equity included in the Draft Third
\nQuarter Report (including any related notes and schedules) fairly presents in
\nall material respects the results of operations, cash flows or changes in
\nshareholders’ equity, as the case may be, of Enron and its consolidated
\nSubsidiaries for the period then ended (subject to (A) such exceptions as may be
\npermitted by Form 10-Q of the SEC, (B) normal year-end audit adjustments which
\nwill not be material and (C) changes routinely anticipated in the preparation of
\nthe final Quarterly Report on Form 10-Q for the quarter ended September 30, 2001
\nwhich will not be material), in each case in accordance with generally accepted
\naccounting principles consistently applied during the periods involved, except
\nas may be noted therein. Except as and to the extent set forth in the September
\n30, 2001 Balance Sheet, neither Enron nor any of its Subsidiaries has any
\nliabilities or obligations of any nature (whether accrued, absolute, contingent
\nor otherwise) that would be required to be reflected on, or reserved against in,
\na consolidated balance sheet of Enron and its consolidated Subsidiaries or in
\nthe notes thereto prepared in accordance with generally accepted accounting
\nprinciples consistently applied, other than liabilities or obligations that were
\nincurred in the ordinary course of business since September 30, 2001 and
\nliabilities or obligations that do not and are not reasonably likely to have,
\nindividually or in the aggregate, an Enron Material Adverse Effect. All reserves
\nor adjustments required by generally accepted accounting principles to be
\nreflected in the carrying value of the assets included in the September 30, 2001
\nBalance Sheet have been taken other than reserves or adjustments which do not
\nand are not reasonably likely to have, individually or in the aggregate, an
\nEnron Material Adverse Effect.<\/p>\n
16<\/p>\n
Section 5.8 Litigation. Except as described in the Enron
\nReports filed prior to the date of this Agreement and the Draft Third Quarter
\nReport (collectively, the “Enron Filed Reports”) and except for tax matters,
\nwhich are treated exclusively in Section 5.10, there are no actions, suits or
\nproceedings pending against Enron or any of its Subsidiaries or, to Enron’s
\nknowledge, threatened against Enron or any of its Subsidiaries, at law or in
\nequity or in any arbitration or similar proceedings, before or by any U.S.
\nfederal, state or non-U.S. court, commission, board, bureau, agency or
\ninstrumentality or any U.S. or non-U.S. arbitral or other dispute resolution
\nbody, that are reasonably likely to have, individually or in the aggregate, an
\nEnron Material Adverse Effect.<\/p>\n
Section 5.9 Absence of Certain Changes. Except as described in
\nthe Enron Filed Reports, since December 31, 2000, there has not been (i) any
\nevent or occurrence, or series of events or occurrences, that has had or is
\nreasonably likely to have, individually or in the aggregate, an Enron Material
\nAdverse Effect, except for such changes or effects described in clause (1) of
\nthe definition of Enron Material Adverse Effect resulting from changes in
\ngeneral industry conditions or changes in general economic conditions, (ii) any
\nmaterial change by Enron or any of its Subsidiaries, when taken as a whole, in
\nany of its accounting methods, principles or practices or any of its tax
\nmethods, practices or elections, (iii) any declaration, setting aside or payment
\nof any dividend or distribution in respect of any capital stock of Enron or any
\nredemption, purchase or other acquisition of any of its securities, except
\ndividends on shares of Enron Common Stock at a rate of not more than $0.125 per
\nshare per quarter, on shares of its Second Preferred Stock at a rate of not more
\nthan $3.413 per share per quarter, on shares of its 9.142% Preferred Stock at an
\nannual rate of not more than $91.420 per share and on shares of its Series B
\nPreferred Stock at an annual rate of 6.5% of the liquidation preference thereof,
\nor (iv) any increase in or establishment of any bonus, insurance, severance,
\ndeferred compensation, pension, retirement, profit sharing, stock option, stock
\npurchase or other employee benefit plan, except in the ordinary course of
\nbusiness consistent with past practice.<\/p>\n
Section 5.10 Taxes.<\/p>\n
(a) All tax returns, statements, reports, declarations,
\nestimates and forms (“Returns”) required to be filed by or with respect to Enron
\nor any of its Subsidiaries (including any Return required to be filed by an
\naffiliated, consolidated, combined, unitary or similar group for a taxable year
\nin which Enron or any of its Subsidiaries was included in such group) on or
\nprior to the date hereof have been properly filed on a timely basis with the
\nappropriate governmental authorities, except to the extent that any failure to
\nfile does not and is not reasonably likely to have, individually or in the
\naggregate, an Enron Material Adverse Effect, and all taxes due with such Returns
\nhave been duly paid, or deposited in full on a timely basis or adequately
\nreserved for in accordance with generally accepted accounting principles, except
\nto the extent that any failure to pay or deposit or make adequate provision for
\nthe payment of such taxes does not and is not reasonably likely to have,
\nindividually or in the aggregate, an Enron Material Adverse Effect.
\nRepresentations made in this Section 5.10 are made to the knowledge of Enron to
\nthe extent that the representations relate to a corporation which was, but is
\nnot currently, a part of Enron’s or any of its Subsidiaries’ affiliated,
\nconsolidated, combined, unitary or similar group.<\/p>\n
17<\/p>\n
(b) Except to the extent not reasonably likely to have,
\nindividually or in the aggregate, an Enron Material Adverse Effect, (i) no
\naudits or other administrative proceedings or court proceedings are presently
\npending with regard to any taxes or Returns of Enron or any of its Subsidiaries
\nas to which any taxing authority has asserted in writing any claim; (ii) no
\ngovernmental authority is now asserting in writing any deficiency or claim for
\ntaxes or any adjustment to taxes with respect to which Enron or any of its
\nSubsidiaries may be liable with respect to income and other material taxes that
\nhave not been fully paid or finally settled; (iii) neither Enron nor any of its
\nSubsidiaries has any liability for taxes under Treas. Reg. ss. 1.1502-6 or any
\nsimilar provision of state, local, or non-U.S. tax law, except for taxes of the
\naffiliated group of which Enron or any of its Subsidiaries is the common parent,
\nwithin the meaning of Section 1504(a)(1) of the Code or any similar provision of
\nstate, local, or non-U.S. tax law; and (iv) neither Enron nor any of its
\nSubsidiaries is a party to, is bound by or has any obligation under any tax
\nsharing, allocation or indemnity agreement or any similar agreement or
\narrangement. Neither Enron nor any of its Subsidiaries is a party to an
\nagreement that provides for the payment of any amount in connection with the
\nMergers that would be reasonably likely to constitute an “excess parachute
\npayment” within the meaning of Section 280G of the Code.<\/p>\n
(c) Neither Enron nor any of its Subsidiaries knows of any
\nfact, or has taken any action or has failed to take any action, as a result of
\nwhich the Mergers would not qualify as transfers of Enron Common Stock and
\nDynegy Common Stock to Newco in a transaction qualifying under Section 351 of
\nthe Code.<\/p>\n
(d) For purposes of this Agreement, “tax” or “taxes” means all
\nnet income, gross income, gross receipts, sales, use, ad valorem, transfer,
\naccumulated earnings, personal holding company, excess profits, franchise,
\nprofits, license, withholding, payroll, employment, excise, severance, stamp,
\noccupation, premium, property, disability, capital stock, or windfall profits
\ntaxes, customs duties or other taxes, together with any interest and any
\npenalties, additions to tax or additional amounts imposed by any taxing
\nauthority.<\/p>\n
Section 5.11 Employee Benefit Plans.<\/p>\n
(a) Section 5.11 of the Enron Disclosure Letter lists or
\ndescribes all Enron Benefit Plans. The term “Enron Benefit Plans” means all
\nmaterial employee benefit plans and other material benefit arrangements,
\nincluding all “employee benefit plans” as defined in Section 3(3) of the
\nEmployee Retirement Income Security Act of 1974, as amended (“ERISA”), whether
\nor not U.S.-based plans, and all other material employee benefit, bonus,
\nincentive, deferred compensation, stock option (or other equity-based
\ncompensation), severance, employment, change in control, welfare (including
\npost-retirement medical and life insurance) and fringe benefit plans, practices
\nor agreements, whether or not subject to ERISA or U.S.-based and whether written
\nor oral, sponsored, maintained or contributed to or required to be contributed
\nto by Enron or any of its Subsidiaries, to which Enron or any of its
\nSubsidiaries is a party or is required to provide benefits under applicable law
\nor in which any person who is currently, has been or, prior to the Effective
\nTime, is expected to become an employee of Enron is a participant. Enron will
\nmake available to Dynegy, within 30 days after the date hereof, with true and
\ncomplete copies of the Enron Benefit Plans and, if applicable, the most recent
\ntrust agreements, Forms 5500, summary plan descriptions, funding statements,
\nannual reports and actuarial reports, if applicable, for each such plan.<\/p>\n
18<\/p>\n
(b) Except for such matters as, individually or in the
\naggregate, do not and are not reasonably likely to have an Enron Material
\nAdverse Effect: all applicable reporting and disclosure requirements have been
\nmet with respect to Enron Benefit Plans; there has been no “reportable event,”
\nas that term is defined in Section 4043 of ERISA, with respect to Enron Benefit
\nPlans subject to Title IV of ERISA for which the 30-day reporting requirement
\nhas not been waived; to the extent applicable, the Enron Benefit Plans comply
\nwith the requirements of ERISA and the Code or with other applicable law, and
\nhave been maintained and operated in accordance with their terms, and, to
\nEnron’s knowledge, there are no breaches of fiduciary duty in connection with
\nthe Enron Benefit Plans; there are no pending or, to Enron’s knowledge,
\nthreatened claims against or otherwise involving any Enron Benefit Plan; with
\nrespect to the Enron Benefit Plans or any “employee pension benefit plans,” as
\ndefined in Section 3(2) of ERISA, that are or were subject to Title IV of ERISA
\nand have been maintained or contributed to within six years prior to the
\nEffective Time by Enron, its Subsidiaries or any trade or business (whether or
\nnot incorporated) that is under common control, or that is treated as a single
\nemployer, with Enron or any of its Subsidiaries under Section 414(b), (c), (m)
\nor (o) of the Code (an “ERISA Affiliate”), (i) neither Enron nor any of its
\nSubsidiaries has incurred any direct or indirect liability under Title IV of
\nERISA in connection with any termination thereof or withdrawal therefrom; and
\n(ii) there does not exist any accumulated funding deficiency within the meaning
\nof Section 412 of the Code or Section 302 of ERISA, whether or not waived.<\/p>\n
(c) Neither Enron nor any of its Subsidiaries nor any of its
\nERISA Affiliates contributes to, or has an obligation to contribute to, a
\n“multiemployer plan” within the meaning of Section 3(37) of ERISA, and the
\nexecution of, and performance of the transactions contemplated by, this
\nAgreement will not (either alone or upon the occurrence of any additional or
\nsubsequent events) constitute an event under any benefit or compensation plan,
\npolicy, arrangement or agreement or any trust or loan (in connection therewith)
\nthat will or may result in any payment (whether of severance pay or otherwise),
\nacceleration, forgiveness of indebtedness, vesting, distribution, increase in
\nbenefits or obligations to fund benefits with respect to any employee of Enron
\nor any Subsidiary thereof which, individually or in the aggregate, are
\nreasonably likely to have an Enron Material Adverse Effect.<\/p>\n
(d) Except as provided in this Agreement, since September 1,
\n2001, no U.S. Enron Benefit Plan has been amended or modified in a material
\nsubstantive respect and no awards or compensation has been made or committed to
\nor paid under any U.S. Enron Benefit Plan that was not in the ordinary course of
\nbusiness and consistent with past practices.<\/p>\n
Section 5.12 Labor Matters.<\/p>\n
(a) As of the date of this Agreement, neither Enron nor any of
\nits Subsidiaries is a party to, or bound by, any collective bargaining agreement
\nor similar contract, agreement or understanding with a labor union or similar
\nlabor organization that is material to Enron and its Subsidiaries, taken as a
\nwhole. To the knowledge of Enron, there are no organizational efforts with
\nrespect to the formation of a collective bargaining unit presently being made or
\nthreatened that is reasonably likely to have an Enron Material Adverse Effect.<\/p>\n
(b) Except for such matters as do not and are not reasonably
\nlikely to have an Enron Material Adverse Effect and except as described in the
\nEnron Filed Reports, (i) neither <\/p>\n
19<\/p>\n
Enron nor any Subsidiary of Enron has received any written complaint of any
\nunfair labor practice or other unlawful employment practice or any written
\nnotice of any material violation of any federal, state or local statutes, laws,
\nordinances, rules, regulations, orders or directives with respect to the
\nemployment of individuals by, or the employment practices of, Enron or any
\nSubsidiary of Enron or the work conditions or the terms and conditions of
\nemployment and wages and hours of their respective businesses and (ii) there are
\nno unfair labor practice charges or other employee related complaints against
\nEnron or any Subsidiary of Enron pending or, to the knowledge of Enron,
\nthreatened, before any governmental authority by or concerning the employees
\nworking in their respective businesses.<\/p>\n
Section 5.13 Environmental Matters.<\/p>\n
(a) Enron and each Subsidiary of Enron has been and is in
\ncompliance with all applicable orders of any court, governmental authority or
\narbitration board or tribunal and any applicable law, ordinance, rule,
\nregulation or other legal requirement (including common law) related to human
\nhealth and the environment (“Environmental Laws”) except for such matters as do
\nnot and are not reasonably likely to have, individually or in the aggregate, an
\nEnron Material Adverse Effect. There are no past or present facts, conditions or
\ncircumstances that interfere with the conduct of any of their respective
\nbusinesses in the manner now conducted or which interfere with continued
\ncompliance with any Environmental Law, except for any noncompliance or
\ninterference that is not reasonably likely to have, individually or in the
\naggregate, an Enron Material Adverse Effect.<\/p>\n
(b) Except for such matters as do not and are not reasonably
\nlikely to have, individually or in the aggregate, an Enron Material Adverse
\nEffect, (i) no judicial or administrative proceedings or governmental
\ninvestigations are pending or, to the knowledge of Enron, threatened against
\nEnron or its Subsidiaries that allege the violation of or seek to impose
\nliability pursuant to any Environmental Law, and (ii) there are no past or
\npresent facts, conditions or circumstances at, on or arising out of, or
\notherwise associated with, any current (or, to the knowledge of Enron or its
\nSubsidiaries, former) businesses, assets or properties of Enron or any
\nSubsidiary of Enron, including but not limited to on-site or off-site disposal,
\nrelease or spill of any material, substance or waste classified, characterized
\nor otherwise regulated as hazardous, toxic or otherwise harmful to human health
\nor the environment under Environmental Laws, including petroleum or petroleum
\nproducts or byproducts (“Hazardous Materials”) which facts, conditions or
\ncircumstances violate Environmental Law or are reasonably likely to give rise to
\n(x) costs, expenses, liabilities or obligations for any cleanup, remediation,
\ndisposal or corrective action under any Environmental Law, (y) claims arising
\nfor personal injury, property damage or damage to natural resources, or (z)
\nfines, penalties or injunctive relief.<\/p>\n
(c) Neither Enron nor any of its Subsidiaries has (i) received
\nany notice of noncompliance with, violation of, or liability or potential
\nliability under any Environmental Law or (ii) entered into any consent decree or
\norder or is subject to any order of any court or governmental authority or
\ntribunal under any Environmental Law or relating to the cleanup of any Hazardous
\nMaterials, except for any such matters as do not and are not reasonably likely
\nto have an Enron Material Adverse Effect.<\/p>\n
20<\/p>\n
Section 5.14 Intellectual Property. Enron and its Subsidiaries
\nown or possess adequate licenses or other valid rights to use all patents,
\npatent rights, know-how, trade secrets, trademarks, trademark rights and other
\nproprietary information and other proprietary intellectual property rights used
\nor held for use in connection with their respective businesses as currently
\nbeing conducted, except where the failure to own or possess such licenses and
\nother rights does not and is not reasonably likely to have, individually or in
\nthe aggregate, an Enron Material Adverse Effect, and there are no assertions or
\nclaims challenging the validity of any of the foregoing that are reasonably
\nlikely to have, individually or in the aggregate, an Enron Material Adverse
\nEffect. To the knowledge of Enron, the conduct of Enron’s and its Subsidiaries’
\nrespective businesses as currently conducted does not conflict with any patents,
\npatent rights, licenses, trademarks, trademark rights, trade names, trade name
\nrights or copyrights of others that are reasonably likely to have, individually
\nor in the aggregate, an Enron Material Adverse Effect. To the knowledge of
\nEnron, there is no material infringement of any proprietary right owned by or
\nlicensed by or to Enron or any of its Subsidiaries that is reasonably likely to
\nhave, individually or in the aggregate, an Enron Material Adverse Effect.<\/p>\n
Section 5.15 Decrees, Etc. Except for such matters as do not
\nand are not reasonably likely to have an Enron Material Adverse Effect, (a) no
\norder, writ, injunction or decree of any court or governmental authority or any
\narbitral or other dispute resolution body has been issued or entered against
\nEnron or any Subsidiary of Enron that continues to be in effect that affects the
\nownership or operation of any of their respective assets, and (b) since January
\n1, 1991, no criminal order, writ, fine, injunction, decree, judgment or
\ndetermination of any court or governmental authority has been issued against
\nEnron or any Subsidiary of Enron.<\/p>\n
Section 5.16 Insurance.<\/p>\n
(a) Except for such matters as do not and are not reasonably
\nlikely to have, individually or in the aggregate, an Enron Material Adverse
\nEffect, Enron and its Subsidiaries maintain insurance coverage with financially
\nresponsible insurance companies in such amounts and against such losses as are
\ncustomary in the industries in which Enron and its Subsidiaries operate on the
\ndate hereof.<\/p>\n
(b) Except for such matters as do not and are not reasonably
\nlikely to have, individually or in the aggregate, an Enron Material Adverse
\nEffect, (i) no event relating specifically to Enron or its Subsidiaries has
\noccurred that is reasonably likely, after the date of this Agreement, to result
\nin an upward adjustment in premiums under any insurance policies they maintain,
\n(ii) excluding insurance policies that have expired and been replaced in the
\nordinary course of business, no excess liability or protection and indemnity
\ninsurance policy has been canceled by the insurer within one year prior to the
\ndate hereof, and to Enron’s knowledge, no threat in writing has been made to
\ncancel (excluding cancellation upon expiration or failure to renew) any such
\ninsurance policy of Enron or any Subsidiary of Enron during the period of one
\nyear prior to the date hereof, and (iii) no event has occurred, including the
\nfailure by Enron or any Subsidiary of Enron to give any notice or information or
\nby giving any inaccurate or erroneous notice or information, that limits or
\nimpairs the rights of Enron or any Subsidiary of Enron under any such excess
\nliability or protection and indemnity insurance policies.<\/p>\n
21<\/p>\n
Section 5.17 No Brokers. Enron has not entered into any
\ncontract, arrangement or understanding with any person or firm which may result
\nin the obligation of Enron, Newco or Dynegy to pay any finder’s fees, brokerage
\nor other like payments in connection with the negotiations leading to this
\nAgreement or the consummation of the transactions contemplated hereby, except
\nthat Enron has retained J.P. Morgan Securities Inc. and Salomon Smith Barney
\nInc. as its financial advisors, the arrangements with which have been disclosed
\nin writing to Dynegy prior to the date hereof.<\/p>\n
Section 5.18 Opinions of Financial Advisors. The Board of
\nDirectors of Enron has received the separate opinions of J.P. Morgan Securities
\nInc. and Salomon Smith Barney Inc. to the effect that, as of the date of this
\nAgreement, the Enron Merger Ratio is fair, from a financial point of view, to
\nthe holders of Enron Common Stock.<\/p>\n
Section 5.19 Dynegy Stock Ownership. Neither Enron nor any of
\nits affiliates or associates owns in excess of five percent of the shares of
\ncapital stock of Dynegy or of any other securities convertible into or otherwise
\nexercisable to acquire shares of capital stock of Dynegy.<\/p>\n
Section 5.20 Vote Required. The approval of this Agreement by
\n(i) the holders of a majority of the votes entitled to be cast by holders of
\nEnron Common Stock and the Second Preferred Stock voting together as a single
\nclass, with each share of Enron Common Stock being entitled to one vote per
\nshare and each share of Second Preferred Stock being entitled to a number of
\nvotes per share equal to the number of shares of Enron Common Stock into which
\nsuch share of Second Preferred Stock is then convertible, and (ii) the holders
\nof a majority of the outstanding shares of Enron Common Stock entitled to vote
\nare the only approvals of the holders of any class or series of Enron capital
\nstock necessary to approve any transaction contemplated by this Agreement.<\/p>\n
Section 5.21 Regulation as a Utility.<\/p>\n
(a) Enron is a “holding company” as defined in the 1935 Act.
\nEnron is exempt from registration and all sections of the 1935 Act and the rules
\nand regulations promulgated thereunder, other than from Section 9(a)(2) thereof,
\npursuant to Rule 2 under Section 3(a)(1) of the 1935 Act. Enron also has filed
\nan application for exemption under Section 3(a)(3) or, in the alternative,
\nSection 3(a)(5) of the 1935 Act. Pending SEC action on that application, Enron
\nis exempt from registration and all sections of the 1935 Act and the rules and
\nregulations promulgated thereunder, other than from Section 9(a)(2) thereof,
\npursuant to Section 3(c) of the 1935 Act. Portland General Electric Company
\n(“Enron Utility”), a wholly owned direct Subsidiary of Enron, is a “public
\nutility company” within the meaning of Section 2(a)(5) of the 1935 Act. No other
\nSubsidiary of Enron is a “public utility company” within the meaning of Section
\n2(a)(5) of the 1935 Act.<\/p>\n
(b) Enron Utility is regulated as a public utility in the
\nState of Oregon and in no other state. Neither Enron nor any “subsidiary
\ncompany” or “affiliate” (as each such term is defined in the 1935 Act) of Enron
\n(other than Enron Utility) is subject to regulation as a public utility or
\npublic service company (or similar designation) by any other state in the United
\nStates or any foreign country.<\/p>\n
22<\/p>\n
Section 5.22 Capital Expenditure Program. Section 5.22 of the
\nEnron Disclosure Letter contains a complete copy of management’s most recent
\ncapital expenditure budget of Enron as of the date of this Agreement for each
\nquarterly period in 2002 (the “Enron Capital Budget”).<\/p>\n
Section 5.23 Improper Payments. No bribes, kickbacks or other
\nimproper payments have been made by Enron or any Subsidiary of Enron or agent of
\nany of them in connection with the conduct of their respective businesses or the
\noperation of their respective assets, and neither Enron, any Subsidiary of Enron
\nnor any agent of any of them has received any such payments from vendors,
\nsuppliers or other persons, where any such payment made or received is
\nreasonably likely to have an Enron Material Adverse Effect.<\/p>\n
ARTICLE 6<\/p>\n
REPRESENTATIONS AND WARRANTIES OF DYNEGY, NEWCO,
\n DYNEGY MERGER SUB AND ENRON MERGER SUB<\/p>\n
Except as set forth in the disclosure letter delivered to
\nEnron by Dynegy at or prior to the execution hereof (the “Dynegy Disclosure
\nLetter”), Dynegy, Newco, Dynegy Merger Sub and Enron Merger Sub, jointly and
\nseverally, represent and warrant to Enron that:<\/p>\n
Section 6.1 Existence; Good Standing; Corporate Authority.
\nEach of Dynegy, Newco, Dynegy Merger Sub and Enron Merger Sub is a corporation
\nduly incorporated, validly existing and in good standing under the laws of its
\njurisdiction of incorporation. Dynegy is duly qualified to do business and, to
\nthe extent such concept or similar concept exists in the relevant jurisdiction,
\nis in good standing under the laws of any jurisdiction in which the character of
\nthe properties owned or leased by it therein or in which the transaction of its
\nbusiness makes such qualification necessary, except where the failure to be so
\nqualified does not and is not reasonably likely to have, individually or in the
\naggregate, a Dynegy Material Adverse Effect. Dynegy has all requisite corporate
\npower and authority to own, operate and lease its properties and to carry on its
\nbusiness as now conducted. The copies of the articles or certificate of
\nincorporation and bylaws of Dynegy, Newco, Dynegy Merger Sub and Enron Merger
\nSub previously made available to Enron are true and correct and contain all
\namendments as of the date hereof.<\/p>\n
Section 6.2 Authorization, Validity and Effect of Agreements.
\nEach of Dynegy, Newco, Dynegy Merger Sub and Enron Merger Sub has the requisite
\ncorporate power and authority to execute and deliver this Agreement and all
\nother agreements and documents required to be executed and delivered by it
\npursuant to this Agreement. The consummation by Dynegy of the transactions
\ncontemplated hereby has been duly authorized (i) by the Board of Directors of
\nDynegy by unanimous vote of the directors present and (ii) by all other
\nrequisite corporate action on behalf of Dynegy, other than the approvals
\nreferred to in Section 6.20. The consummation by each of Newco, Dynegy Merger
\nSub and Enron Merger Sub of the transactions contemplated hereby, including, in
\nthe case of Newco, the issuance by Newco of shares of Newco Common Stock
\npursuant to the Mergers, has been duly authorized by all requisite corporate
\naction on behalf of each of Newco, Dynegy Merger Sub and Enron Merger Sub. This
\nAgreement constitutes the valid and legally binding obligation of each of
\nDynegy, Newco, Dynegy Merger Sub and Enron Merger Sub, enforceable against such
\nparty in accordance with its terms, subject <\/p>\n
23<\/p>\n
to applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
\nmoratorium or other similar laws relating to creditors’ rights and general
\nprinciples of equity. Dynegy has taken all action necessary to render the
\nrestrictions set forth in Sections 7.85 and 11.75 of the IBCA inapplicable to
\nthis Agreement and the transactions contemplated hereby.<\/p>\n
Section 6.3 Capitalization. The authorized capital stock of
\nDynegy consists of 900,000,000 shares of Dynegy Class A Common Stock,
\n360,000,000 shares of Dynegy Class B Common Stock, and 70,000,000 shares of
\npreferred stock, no par value (“Dynegy Preferred Stock”). As of November 6,
\n2001, there were (i) 238,956,530 outstanding shares of Dynegy Class A Common
\nStock and 86,599,914 outstanding shares of Dynegy Class B Common Stock, (ii)
\n27,211,749 shares of Dynegy Common Stock reserved for issuance upon exercise of
\noutstanding Dynegy Options, and (iii) no outstanding shares of Dynegy Preferred
\nStock. All such issued and outstanding shares of Dynegy Common Stock are duly
\nauthorized, validly issued, fully paid, nonassessable and free of preemptive
\nrights, other than the rights of Chevron U.S.A. Inc. (“Chevron”) pursuant to
\nArticle 6 of the Shareholder Agreement, dated as of June 14, 1999 (the “Dynegy
\nShareholder Agreement”), among Energy Convergence Holding Company, Illinova
\nCorporation, Dynegy and Chevron. As of the date of this Agreement, except (a) as
\nset forth in this Section 6.3, (b) for the rights of Chevron pursuant to Article
\n6 of the Dynegy Shareholder Agreement and pursuant to the Dynegy Subscription
\nAgreement and the Dynegy Series B Preferred Stock and (c) for shares delivered
\nupon exercises of options set forth in this Section 6.3 from October 26, 2001 to
\nthe date hereof, there are no outstanding shares of capital stock of Dynegy, and
\nthere are no options, warrants, calls, subscriptions, convertible securities or
\nother rights, agreements or commitments that may obligate Dynegy or any of its
\nSubsidiaries to issue, transfer or sell any shares of capital stock or other
\nvoting securities of Dynegy or any of its Significant Subsidiaries. Dynegy has
\nno outstanding bonds, debentures, notes or other obligations the holders of
\nwhich have the right to vote, or which are convertible into or exercisable for
\nsecurities having the right to vote, with the shareholders of Dynegy on any
\nmatter.<\/p>\n
Section 6.4 Subsidiaries.<\/p>\n
(a) Each of Dynegy’s Significant Subsidiaries is a corporation
\nor other legal entity duly organized, validly existing and, to the extent such
\nconcept or similar concept exists in the relevant jurisdiction, in good standing
\nunder the laws of its jurisdiction of incorporation or organization, has the
\ncorporate or other entity power and authority to own, operate and lease its
\nproperties and to carry on its business as it is now being conducted, and is
\nduly qualified to do business and is in good standing (where applicable) in each
\njurisdiction in which the ownership, operation or lease of its property or the
\nconduct of its business requires such qualification, except for jurisdictions in
\nwhich such failure to be so qualified or to be in good standing does not and is
\nnot reasonably likely to have a Dynegy Material Adverse Effect. As of the date
\nof this Agreement, all of the outstanding shares of capital stock of, or other
\nownership interests in, each of Dynegy’s Significant Subsidiaries are duly
\nauthorized, validly issued, fully paid and nonassessable, and are owned,
\ndirectly or indirectly, by Dynegy free and clear of all Liens.<\/p>\n
(b) All of the outstanding capital stock of Newco is owned
\ndirectly by Dynegy and all of the outstanding capital stock of each of Dynegy
\nMerger Sub and Enron Merger Sub is owned directly by Newco. Each of Newco,
\nDynegy Merger Sub and Enron Merger Sub has been <\/p>\n
24<\/p>\n
formed solely for the purpose of engaging in the transactions contemplated
\nhereby and, as of the Effective Time, will not have engaged in any activities
\nother than in connection with the transactions contemplated by this Agreement.
\nImmediately prior to the Effective Time, Newco will have 1,000 outstanding
\nshares of Newco Class A Common Stock, and each of Dynegy Merger Sub and Enron
\nMerger Sub will have 100 outstanding shares of its common stock, no par value.<\/p>\n
(c) The shares of Newco Common Stock to be issued in
\nconnection with the Mergers, when issued in accordance with this Agreement, will
\nbe validly issued, fully paid, nonassessable and free of preemptive rights,
\nother than the rights of Chevron pursuant to the Shareholder Agreement dated as
\nof November 9, 2001 among Newco, Dynegy, Enron and Chevron.<\/p>\n
Section 6.5 Compliance with Laws; Permits. Except for such
\nmatters as, individually or in the aggregate, do not or are not reasonably
\nlikely to have a Dynegy Material Adverse Effect and except for matters arising
\nunder Environmental Laws, which are treated exclusively in Section 6.13, and for
\ntax matters, which are treated exclusively in Section 6.10:<\/p>\n
(a) Neither Dynegy nor any Subsidiary of Dynegy is in
\n violation of any Applicable Laws, and no claim is pending or, to the
\n knowledge of Dynegy, threatened with respect to any such matters. To
\n the knowledge of Dynegy, no condition exists which does or is
\n reasonably likely to constitute a violation of or deficiency under any
\n Applicable Law by Dynegy or any Subsidiary of Dynegy.<\/p>\n
(b) Dynegy and each Subsidiary of Dynegy hold all permits,
\n licenses, certifications, variations, exemptions, orders, franchises
\n and approvals of all governmental or regulatory authorities necessary
\n for the conduct of their respective businesses as currently conducted
\n (the “Dynegy Permits”). All Dynegy Permits are in full force and effect
\n and there exists no default thereunder or breach thereof, and Dynegy
\n has no notice or actual knowledge that such Dynegy Permits will not be
\n renewed in the ordinary course after the Effective Time. No
\n governmental authority has given, or, to the knowledge of Dynegy,
\n threatened to give, any action to terminate, cancel or reform any
\n Dynegy Permit.<\/p>\n
(c) Dynegy and each Subsidiary of Dynegy possess all permits,
\n licenses, operating authorities, orders, exemptions, franchises,
\n variances, consents, approvals or other authorizations required for the
\n present ownership and operation of all its real property or leaseholds
\n (“Dynegy Real Property”). There exists no material default or breach
\n with respect to, and no party or governmental authority has taken or,
\n to the knowledge of Dynegy, threatened to take, any action to
\n terminate, cancel or reform any such permit, license, operating
\n authority, order, exemption, franchise, variance, consent, approval or
\n other authorization pertaining to Dynegy Real Property.<\/p>\n
Section 6.6 No Conflict.<\/p>\n
(a) Neither the execution and delivery by Dynegy, Newco,
\nDynegy Merger Sub or Enron Merger Sub of this Agreement nor the consummation by
\nDynegy, Newco, Dynegy Merger Sub or Enron Merger Sub of the transactions
\ncontemplated hereby in accordance with the <\/p>\n
25<\/p>\n
terms hereof will (i) subject to the approvals referred to in Section 6.20,
\nconflict with or result in a breach of any provisions of the articles or
\ncertificate of incorporation or bylaws of Dynegy, Newco, Dynegy Merger Sub or
\nEnron Merger Sub; (ii) violate, or conflict with, or result in a breach of any
\nprovision of, or constitute a default (or an event which, with notice or lapse
\nof time or both, would constitute a default) under, or result in the termination
\nor in a right of termination or cancellation of, or give rise to a right of
\npurchase under, or accelerate the performance required by, or result in the
\ncreation of any Lien upon any of the properties of Dynegy or its Subsidiaries
\nunder, or result in being declared void, voidable, or without further binding
\neffect, or otherwise result in a detriment to Dynegy or any of its Subsidiaries
\nunder, any of the terms, conditions or provisions of, any note, bond, mortgage,
\nindenture, deed of trust, license, concession, franchise, permit, lease,
\ncontract, agreement, joint venture or other instrument or obligation to which
\nDynegy or any of its Subsidiaries is a party, or by which Dynegy or any of its
\nSubsidiaries or any of their properties is bound or affected; or (iii) subject
\nto the filings and other matters referred to in Section 6.6(b), contravene or
\nconflict with or constitute a violation of any provision of any law, rule,
\nregulation, judgment, order or decree binding upon or applicable to Dynegy or
\nany of its Subsidiaries, except, in the case of matters described in clause (ii)
\nor (iii), as do not and are not reasonably likely to have, individually or in
\nthe aggregate, a Dynegy Material Adverse Effect.<\/p>\n
(b) Neither the execution and delivery by Dynegy, Newco,
\nDynegy Merger Sub or Enron Merger Sub of this Agreement nor the consummation by
\nDynegy, Newco, Dynegy Merger Sub or Enron Merger Sub of the transactions
\ncontemplated hereby in accordance with the terms hereof will require any
\nconsent, approval, qualification or authorization of, or filing or registration
\nwith, any court or governmental or regulatory authority, other than (i) the
\nfiling of the Articles of Merger provided for in Section 1.3, (ii) the filing of
\na listing application with the NYSE pursuant to Section 7.9, (iii) filings
\nrequired under the HSR Act, the Exchange Act, the Securities Act, the 1935 Act,
\nor applicable state securities and “Blue Sky” laws, (iv) filings, approvals and
\nnotifications required under applicable non-U.S. competition, antitrust or
\npremerger notification laws, (v) filings with, and the approval of, or notices
\nto, other state regulatory authorities having jurisdiction over the Mergers set
\nforth in Section 6.6 of the Dynegy Disclosure Letter (the filings, approvals and
\nnotices in this clause (v), collectively, the “Dynegy Regulatory Approvals”) and
\n(vi) filings with, approvals of or notices to the FERC in connection with the
\nMergers, except for any consent, approval, qualification or authorization the
\nfailure of which to obtain and for any filing or registration the failure of
\nwhich to make does not and is not reasonably likely to have a Dynegy Material
\nAdverse Effect.<\/p>\n
Section 6.7 SEC Documents. Dynegy has filed with the SEC all
\ndocuments (including exhibits and any amendments thereto) required to be so
\nfiled by it since January 1, 1999 pursuant to Sections 13(a), 14(a) and 15(d) of
\nthe Exchange Act, and has made available (in paper form or via the internet) to
\nEnron each registration statement, report, proxy statement or information
\nstatement (other than preliminary materials) it has so filed, each in the form
\n(including exhibits and any amendments thereto) filed with the SEC
\n(collectively, the “Dynegy Reports”). As of its respective date, each Dynegy
\nReport (i) complied in all material respects in accordance with the applicable
\nrequirements of the Exchange Act and the rules and regulations thereunder and
\n(ii) did not contain any untrue statement of a material fact or omit to state a
\nmaterial fact required to be stated therein or necessary to make the statements
\nmade therein, in the light of the circumstances under which they were made, not
\nmisleading except for such <\/p>\n
26<\/p>\n
statements, if any, as have been modified by subsequent filings with the SEC
\nprior to the date hereof. Each of the consolidated balance sheets included in or
\nincorporated by reference into the Dynegy Reports (including the related notes
\nand schedules) fairly presents in all material respects the consolidated
\nfinancial position of Dynegy and its consolidated Subsidiaries as of its date,
\nand each of the consolidated statements of operations, cash flows and changes in
\nshareholders’ equity included in or incorporated by reference into the Dynegy
\nReports (including any related notes and schedules) fairly presents in all
\nmaterial respects the results of operations, cash flows or changes in
\nshareholders’ equity, as the case may be, of Dynegy and its consolidated
\nSubsidiaries for the periods set forth therein (subject, in the case of
\nunaudited statements, to (x) such exceptions as may be permitted by Form 10-Q of
\nthe SEC and (y) normal year-end audit adjustments which will not be material),
\nin each case in accordance with generally accepted accounting principles
\nconsistently applied during the periods involved, except as may be noted
\ntherein. Except as and to the extent set forth on the consolidated balance sheet
\nof Dynegy and its consolidated Subsidiaries included in the most recent Dynegy
\nReport filed prior to the date of this Agreement that includes such a balance
\nsheet, including all notes thereto, neither Dynegy nor any of its Subsidiaries
\nhas any liabilities or obligations of any nature (whether accrued, absolute,
\ncontingent or otherwise) that would be required to be reflected on, or reserved
\nagainst in, a consolidated balance sheet of Dynegy or in the notes thereto
\nprepared in accordance with generally accepted accounting principles
\nconsistently applied, other than liabilities or obligations which are incurred
\nin the ordinary course of business since the date of the balance sheet included
\nin the most recent Dynegy Report filed prior to the date of this Agreement and
\nliabilities or obligations which do not and are not reasonably likely to have,
\nindividually or in the aggregate, a Dynegy Material Adverse Effect. All reserves
\nor adjustments required by generally accepted accounting principles to be
\nreflected in the carrying value of the assets included in such balance sheet
\nhave been taken other than reserves or adjustments which do not and are not
\nreasonably likely to have, individually or in the aggregate, a Dynegy Material
\nAdverse Effect.<\/p>\n
Section 6.8 Litigation. Except as described in the Dynegy
\nReports filed prior to the date of this Agreement and except for tax matters,
\nwhich are treated exclusively in Section 6.10, there are no actions, suits or
\nproceedings pending against Dynegy or any of its Subsidiaries or, to Dynegy’s
\nknowledge, threatened against Dynegy or any of its Subsidiaries, at law or in
\nequity or in any arbitration or similar proceedings, before or by any U.S.
\nfederal, state or non-U.S. court, commission, board, bureau, agency or
\ninstrumentality or any U.S. or non-U.S. arbitral or other dispute resolution
\nbody, that are reasonably likely to have, individually or in the aggregate, a
\nDynegy Material Adverse Effect.<\/p>\n
Section 6.9 Absence of Certain Changes. Except as described in
\nthe Dynegy Reports filed prior to the date of this Agreement, since December 31,
\n2000, there has not been (i) any event or occurrence, or series of events or
\noccurrences, that has had or is reasonably likely to have, individually or in
\nthe aggregate, a Dynegy Material Adverse Effect, except for such changes or
\neffects described in clause (1) of the definition of Dynegy Material Adverse
\nEffect resulting from changes in general industry conditions or changes in
\ngeneral economic conditions, (ii) any material change by Dynegy or any of its
\nSubsidiaries, when taken as a whole, in any of its accounting methods,
\nprinciples or practices or any of its tax methods, practices or elections, (iii)
\nany declaration, setting aside or payment of any dividend or distribution in
\nrespect of any capital stock of Dynegy or any redemption, purchase or other
\nacquisition of any of its <\/p>\n
27<\/p>\n
securities, except dividends on shares of Dynegy Common Stock and Dynegy Class B
\nCommon Stock at a rate of not more than $0.075 per share per quarter, or (iv)
\nany increase in or establishment of any bonus, insurance, severance, deferred
\ncompensation, pension, retirement, profit sharing, stock option, stock purchase
\nor other employee benefit plan, except in the ordinary course of business
\nconsistent with past practice.<\/p>\n
Section 6.10 Taxes.<\/p>\n
(a) All Returns required to be filed by or with respect to
\nDynegy or any of its Subsidiaries (including any Return required to be filed by
\nan affiliated, consolidated, combined, unitary or similar group for a taxable
\nyear in which Dynegy or any of its Subsidiaries was included in such group) on
\nor prior to the date hereof have been properly filed on a timely basis with the
\nappropriate governmental authorities, except to the extent that any failure to
\nfile does not and is not reasonably likely to have, individually or in the
\naggregate, a Dynegy Material Adverse Effect, and all taxes due with such Returns
\nhave been duly paid, or deposited in full on a timely basis or adequately
\nreserved for in accordance with generally accepted accounting principles, except
\nto the extent that any failure to pay or deposit or make adequate provision for
\nthe payment of such taxes does not and is not reasonably likely to have,
\nindividually or in the aggregate, a Dynegy Material Adverse Effect.
\nRepresentations made in this Section 6.10 are made to the knowledge of Dynegy to
\nthe extent that the representations relate to a corporation which was, but is
\nnot currently, a part of Dynegy’s or any of its Subsidiaries’ affiliated,
\nconsolidated, combined, unitary or similar group.<\/p>\n
(b) Except to the extent not reasonably likely to have,
\nindividually or in the aggregate, a Dynegy Material Adverse Effect, (i) no
\naudits or other administrative proceedings or court proceedings are presently
\npending with regard to any taxes or Returns of Dynegy or any of its Subsidiaries
\nas to which any taxing authority has asserted in writing any claim; (ii) no
\ngovernmental authority is now asserting in writing any deficiency or claim for
\ntaxes or any adjustment to taxes with respect to which Dynegy or any of its
\nSubsidiaries may be liable with respect to income and other material taxes that
\nhave not been fully paid or finally settled; (iii) neither Dynegy nor any of its
\nSubsidiaries has any liability for taxes under Treas. Reg. ss. 1.1502-6 or any
\nsimilar provision of state, local, or non-U.S. tax law, except for taxes of the
\naffiliated group of which Dynegy or any of its Subsidiaries is the common
\nparent, within the meaning of Section 1504(a)(1) of the Code or any similar
\nprovision of state, local, or non-U.S. tax law; and (iv) neither Dynegy nor any
\nof its Subsidiaries is a party to, is bound by or has any obligation under any
\ntax sharing, allocation or indemnity agreement or any similar agreement or
\narrangement. Neither Dynegy nor any of its Subsidiaries is a party to an
\nagreement that provides for the payment of any amount in connection with the
\nMergers that would be reasonably likely to constitute an “excess parachute
\npayment” within the meaning of Section 280G of the Code.<\/p>\n
(c) Neither Dynegy nor any of its Subsidiaries knows of any
\nfact, or has taken any action or has failed to take any action, as a result of
\nwhich the Mergers would not qualify as transfers of Enron Common Stock and
\nDynegy Common Stock to Newco in a transaction qualifying under Section 351 of
\nthe Code.<\/p>\n
28<\/p>\n
Section 6.11 Employee Benefit Plans.<\/p>\n
(a) Section 6.11 of the Dynegy Disclosure Letter lists or
\ndescribes all Dynegy Benefit Plans. The term “Dynegy Benefit Plans” means all
\nmaterial employee benefit plans and other material benefit arrangements,
\nincluding all “employee benefit plans” as defined in Section 3(3) of ERISA,
\nwhether or not U.S.-based plans, and all other material employee benefit, bonus,
\nincentive, deferred compensation, stock option (or other equity-based
\ncompensation), severance, employment, change in control, welfare (including
\npost-retirement medical and life insurance) and fringe benefit plans, practices
\nor agreements, whether or not subject to ERISA or U.S.-based and whether written
\nor oral, sponsored, maintained or contributed to or required to be contributed
\nto by Dynegy or any of its Subsidiaries, to which Dynegy or any of its
\nSubsidiaries is a party or is required to provide benefits under applicable law
\nor in which any person who is currently, has been or, prior to the Effective
\nTime, is expected to become an employee of Dynegy is a participant. Dynegy will
\nmake available to Enron, within 30 days after the date hereof, with true and
\ncomplete copies of the Dynegy Benefit Plans and, if applicable, the most recent
\ntrust agreements, Forms 5500, summary plan descriptions, funding statements,
\nannual reports and actuarial reports, if applicable, for each such plan.<\/p>\n
(b) Except for such matters as, individually or in the
\naggregate, do not and are not reasonably likely to have a Dynegy Material
\nAdverse Effect: all applicable reporting and disclosure requirements have been
\nmet with respect to Dynegy Benefit Plans; there has been no “reportable event,”
\nas that term is defined in Section 4043 of ERISA, with respect to Dynegy Benefit
\nPlans subject to Title IV of ERISA for which the 30-day reporting requirement
\nhas not been waived; to the extent applicable, Dynegy Benefit Plans comply with
\nthe requirements of ERISA and the Code or with other applicable law, and have
\nbeen maintained and operated in accordance with their terms, and, to Dynegy’s
\nknowledge, there are no breaches of fiduciary duty in connection with Dynegy
\nBenefit Plans; there are no pending or, to Dynegy’s knowledge, threatened claims
\nagainst or otherwise involving any Dynegy Benefit Plan; with respect to Dynegy
\nBenefit Plans or any “employee pension benefit plans,” as defined in Section
\n3(2) of ERISA, that are or were subject to Title IV of ERISA and have been
\nmaintained or contributed to within six years prior to the Effective Time by
\nDynegy, its Subsidiaries or any of its ERISA Affiliates, (i) neither Dynegy nor
\nany of its Subsidiaries has incurred any direct or indirect liability under
\nTitle IV of ERISA in connection with any termination thereof or withdrawal
\ntherefrom; and (ii) there does not exist any accumulated funding deficiency
\nwithin the meaning of Section 412 of the Code or Section 302 of ERISA, whether
\nor not waived.<\/p>\n
(c) Neither Dynegy nor any of its Subsidiaries nor any of its
\nERISA Affiliates contributes to, or has an obligation to contribute to, a
\n“multiemployer plan” within the meaning of Section 3(37) of ERISA, and the
\nexecution of, and performance of the transactions contemplated by, this
\nAgreement will not (either alone or upon the occurrence of any additional or
\nsubsequent events) constitute an event under any benefit or compensation plan,
\npolicy, arrangement or agreement or any trust or loan (in connection therewith)
\nthat will or may result in any payment (whether of severance pay or otherwise),
\nacceleration, forgiveness of indebtedness, vesting, distribution, increase in
\nbenefits or obligations to fund benefits with respect to any employee of Dynegy
\nor any Subsidiary thereof which, individually or in the aggregate, are
\nreasonably likely to have a Dynegy Material Adverse Effect.<\/p>\n
29<\/p>\n
(d) Except as provided in this Agreement, since September 1,
\n2001, no U.S. Dynegy Benefit Plan has been amended or modified in a material
\nsubstantive respect and no awards or compensation has been made or committed to
\nor paid under any U.S. Dynegy Benefit Plan that was not in the ordinary course
\nof business and consistent with past practices.<\/p>\n
Section 6.12 Labor Matters.<\/p>\n
(a) As of the date of this Agreement, neither Dynegy nor any
\nof its Subsidiaries is a party to, or bound by, any collective bargaining
\nagreement or similar contract, agreement or understanding with a labor union or
\nsimilar labor organization that is material to Dynegy and its Subsidiaries,
\ntaken as a whole. To the knowledge of Dynegy, there are no organizational
\nefforts with respect to the formation of a collective bargaining unit presently
\nbeing made or threatened that is reasonably likely to have a Dynegy Material
\nAdverse Effect.<\/p>\n
(b) Except for such matters as do not and are not reasonably
\nlikely to have a Dynegy Material Adverse Effect and except as described in the
\nDynegy Reports filed prior to the date of this Agreement, (i) neither Dynegy nor
\nany Subsidiary of Dynegy has received any written complaint of any unfair labor
\npractice or other unlawful employment practice or any written notice of any
\nmaterial violation of any federal, state or local statutes, laws, ordinances,
\nrules, regulations, orders or directives with respect to the employment of
\nindividuals by, or the employment practices of, Dynegy or any Subsidiary of
\nDynegy or the work conditions or the terms and conditions of employment and
\nwages and hours of their respective businesses and (ii) there are no unfair
\nlabor practice charges or other employee related complaints against Dynegy or
\nany Subsidiary of Dynegy pending or, to the knowledge of Dynegy, threatened,
\nbefore any governmental authority by or concerning the employees working in
\ntheir respective businesses.<\/p>\n
Section 6.13 Environmental Matters.<\/p>\n
(a) Dynegy and each Subsidiary of Dynegy has been and is in
\ncompliance with all Environmental Laws except for such matters as do not and are
\nnot reasonably likely to have, individually or in the aggregate, a Dynegy
\nMaterial Adverse Effect. There are no past or present facts, conditions or
\ncircumstances that interfere with the conduct of any of their respective
\nbusinesses in the manner now conducted or which interfere with continued
\ncompliance with any Environmental Law, except for any noncompliance or
\ninterference that is not reasonably likely to have, individually or in the
\naggregate, a Dynegy Material Adverse Effect.<\/p>\n
(b) Except for such matters as do not and are not reasonably
\nlikely to have, individually or in the aggregate, a Dynegy Material Adverse
\nEffect, (i) no judicial or administrative proceedings or governmental
\ninvestigations are pending or, to the knowledge of Dynegy, threatened against
\nDynegy or its Subsidiaries that allege the violation of or seek to impose
\nliability pursuant to any Environmental Law, and (ii) there are no past or
\npresent facts, conditions or circumstances at, on or arising out of, or
\notherwise associated with, any current (or, to the knowledge of Dynegy or its
\nSubsidiaries, former) businesses, assets or properties of Dynegy or any
\nSubsidiary of Dynegy, including but not limited to on-site or off-site disposal,
\nrelease or spill of any Hazardous Materials which facts, conditions or
\ncircumstances violate Environmental Law or are reasonably likely to give rise to
\n(x) costs, expenses, liabilities or <\/p>\n
30<\/p>\n
obligations for any cleanup, remediation, disposal or corrective action under
\nany Environmental Law, (y) claims arising for personal injury, property damage
\nor damage to natural resources, or (z) fines, penalties or injunctive relief.<\/p>\n
(c) Neither Dynegy nor any of its Subsidiaries has (i)
\nreceived any notice of noncompliance with, violation of, or liability or
\npotential liability under any Environmental Law or (ii) entered into any consent
\ndecree or order or is subject to any order of any court or governmental
\nauthority or tribunal under any Environmental Law or relating to the cleanup of
\nany Hazardous Materials, except for any such matters as do not and are not
\nreasonably likely to have a Dynegy Material Adverse Effect.<\/p>\n
Section 6.14 Intellectual Property. Dynegy and its
\nSubsidiaries own or possess adequate licenses or other valid rights to use all
\npatents, patent rights, know-how, trade secrets, trademarks, trademark rights
\nand other proprietary information and other proprietary intellectual property
\nrights used or held for use in connection with their respective businesses as
\ncurrently being conducted, except where the failure to own or possess such
\nlicenses and other rights does not and is not reasonably likely to have,
\nindividually or in the aggregate, a Dynegy Material Adverse Effect, and there
\nare no assertions or claims challenging the validity of any of the foregoing
\nthat are reasonably likely to have, individually or in the aggregate, a Dynegy
\nMaterial Adverse Effect. To the knowledge of Dynegy, the conduct of Dynegy’s and
\nits Subsidiaries’ respective businesses as currently conducted does not conflict
\nwith any patents, patent rights, licenses, trademarks, trademark rights, trade
\nnames, trade name rights or copyrights of others that are reasonably likely to
\nhave, individually or in the aggregate, a Dynegy Material Adverse Effect. To the
\nknowledge of Dynegy, there is no material infringement of any proprietary right
\nowned by or licensed by or to Dynegy or any of its Subsidiaries that is
\nreasonably likely to have, individually or in the aggregate, a Dynegy Material
\nAdverse Effect.<\/p>\n
Section 6.15 Decrees, Etc. Except for such matters as do not
\nand are not reasonably likely to have a Dynegy Material Adverse Effect, (a) no
\norder, writ, injunction or decree of any court or governmental authority or any
\narbitral or other dispute resolution body has been issued or entered against
\nDynegy or any Subsidiary of Dynegy that continues to be in effect that affects
\nthe ownership or operation of any of their respective assets, and (b) since
\nJanuary 1, 1991, no criminal order, writ, fine, injunction, decree, judgment or
\ndetermination of any court or governmental authority has been issued against
\nDynegy or any Subsidiary of Dynegy.<\/p>\n
Section 6.16 Insurance.<\/p>\n
(a) Except for such matters as do not and are not reasonably
\nlikely to have, individually or in the aggregate, a Dynegy Material Adverse
\nEffect, Dynegy and its Subsidiaries maintain insurance coverage with financially
\nresponsible insurance companies in such amounts and against such losses as are
\ncustomary in the industries in which Dynegy and its Subsidiaries operate on the
\ndate hereof.<\/p>\n
(b) Except for such matters as do not and are not reasonably
\nlikely to have, individually or in the aggregate, a Dynegy Material Adverse
\nEffect, (i) no event relating specifically to Dynegy or its Subsidiaries has
\noccurred that is reasonably likely, after the date of this Agreement, to result
\nin an upward adjustment in premiums under any insurance policies they maintain,
\n(ii) excluding insurance policies that have expired and been replaced in the
\nordinary <\/p>\n
31<\/p>\n
course of business, no excess liability or protection and indemnity insurance
\npolicy has been canceled by the insurer within one year prior to the date
\nhereof, and to Dynegy’s knowledge, no threat in writing has been made to cancel
\n(excluding cancellation upon expiration or failure to renew) any such insurance
\npolicy of Dynegy or any Subsidiary of Dynegy during the period of one year prior
\nto the date hereof, and (iii) no event has occurred, including the failure by
\nDynegy or any Subsidiary of Dynegy to give any notice or information or by
\ngiving any inaccurate or erroneous notice or information, that limits or impairs
\nthe rights of Dynegy or any Subsidiary of Dynegy under any such excess liability
\nor protection and indemnity insurance policies.<\/p>\n
Section 6.17 No Brokers. Dynegy has not entered into any
\ncontract, arrangement or understanding with any person or firm which may result
\nin the obligation of Enron, Newco or Dynegy to pay any finder’s fees, brokerage
\nor other like payments in connection with the negotiations leading to this
\nAgreement or the consummation of the transactions contemplated hereby, except
\nthat Dynegy has retained Lehman Brothers Inc. as its financial advisor, the
\narrangements with which have been disclosed in writing to Enron prior to the
\ndate hereof.<\/p>\n
Section 6.18 Opinion of Financial Advisor. The Board of
\nDirectors of Dynegy has received the opinion of Lehman Brothers Inc. to the
\neffect that, as of the date of this Agreement, from a financial point of view
\nthe Dynegy Merger Ratio is fair to the holders of Dynegy Class A Common Stock in
\nlight of the Enron Merger Ratio.<\/p>\n
Section 6.19 Enron Stock Ownership. Neither Dynegy nor any of
\nits affiliates or associates owns in excess of five percent of the shares of
\ncapital stock of Enron or of any other securities convertible into or otherwise
\nexercisable to acquire shares of capital stock of Enron.<\/p>\n
Section 6.20 Vote Required. The only vote of the holders of
\nany class or series of Dynegy capital stock necessary to approve any transaction
\ncontemplated by this Agreement is the affirmative vote in favor of the approval
\nof this Agreement of the holders of at least two-thirds of the shares of Dynegy
\nClass A Common Stock and Dynegy Class B Common Stock (voting together).
\nConcurrently with the execution and delivery hereof, Chevron, the owner of
\n86,599,914 shares of Dynegy Class B Common Stock, is entering into a Shareholder
\nAgreement providing for, among other things, the voting of the Dynegy Class B
\nCommon Stock owned by it.<\/p>\n
Section 6.21 Regulation as a Utility.<\/p>\n
(a) Each of Dynegy and Illinova Corporation, a wholly owned
\ndirect subsidiary of Dynegy (“Illinova”), is a “holding company” as defined in
\nthe 1935 Act. Each of Dynegy and Illinova is exempt from registration and all
\nsections of the 1935 Act and the rules and regulations promulgated thereunder,
\nother than from Section 9(a)(2) thereof, under Section 3(a)(1) of the 1935 Act.
\nIllinois Power Company (“Illinois Power”) is a Subsidiary of Dynegy and is a
\n“public utility company” within the meaning of Section 2(a)(5) of the 1935 Act.
\nNo other Subsidiary of Dynegy is a “public utility company” within the meaning
\nof Section 2(a)(5) of the 1935 Act.<\/p>\n
32<\/p>\n
(b) Illinois Power is regulated as a public utility in the
\nState of Illinois and in no other state. Neither Dynegy nor any “subsidiary
\ncompany” or “affiliate” (as each such term is defined in the 1935 Act) of Dynegy
\n(other than the Illinois Power) is subject to regulation as a public utility or
\npublic service company (or similar designation) by any other state in the United
\nStates or any foreign country.<\/p>\n
Section 6.22 Improper Payments. No bribes, kickbacks or other
\nimproper payments have been made by Dynegy or any Subsidiary of Dynegy or agent
\nof any of them in connection with the conduct of their respective businesses or
\nthe operation of their respective assets, and neither Dynegy, any Subsidiary of
\nDynegy, nor any agent of any of them has received any such payments from
\nvendors, suppliers or other persons, where any such payment made or received is
\nreasonably likely to have a Dynegy Material Adverse Effect.<\/p>\n
ARTICLE 7<\/p>\n
COVENANTS<\/p>\n
Section 7.1 Conduct of Business. From and after the date
\nhereof and prior to the Effective Time, except as set forth in the Dynegy
\nDisclosure Letter or the Enron Disclosure Letter or as expressly contemplated by
\nany other provision of this Agreement or (provided that the party proposing to
\ntake such action has provided the other party with advance notice of the
\nproposed action to the extent practicable) as required by Applicable Laws,
\nunless the other party has consented in writing thereto (which, in the case of
\nSection 7.1(m), shall not be unreasonably withheld), each of Dynegy and Enron:<\/p>\n
(a) shall, and shall cause each of its Subsidiaries to,
\n conduct its operations according to their usual, regular and ordinary
\n course in substantially the same manner as heretofore conducted;
\n provided, however, that this subsection (a) shall not prevent a party
\n from introducing, or permitting its Subsidiaries from introducing, new
\n products and services related to the business and operations heretofore
\n conducted by them;<\/p>\n
(b) shall use its commercially reasonable best efforts, and
\n shall cause each of its Subsidiaries to use its commercially reasonable
\n best efforts, to preserve intact their business organizations and
\n goodwill (except that any of its Subsidiaries may be merged with or
\n into, or be consolidated with, any of its Subsidiaries or may be
\n liquidated into it or any of its Subsidiaries), keep available the
\n services of their respective officers and employees and maintain
\n satisfactory relationships with those persons having business
\n relationships with them;<\/p>\n
(c) shall not amend its articles of incorporation or bylaws,
\n except that Enron may amend its articles of incorporation to increase
\n its authorized Enron Common Stock by not more than 500 million shares;<\/p>\n
(d) shall promptly notify the other of any material adverse
\n change in its condition (financial or otherwise) or business or any
\n termination, cancellation, repudiation or material breach of any
\n material contract (or communications expressly indicating that the same
\n may be contemplated) or the institution of any material litigation or
\n proceedings (including arbitration and other dispute resolution
\n proceedings) or <\/p>\n
33<\/p>\n
material governmental complaints, investigations, inquiries or hearings
\n (or communications indicating that the same may be contemplated) or the
\n breach in any material respect of any representation or warranty
\n contained herein;<\/p>\n
(e) shall promptly make available (in paper form or via the
\n internet) to the other true and correct copies of any report, statement
\n or schedule filed with the SEC subsequent to the date of this
\n Agreement;<\/p>\n
(f) in the case of Enron, shall not, and shall not permit any
\n of its Subsidiaries to, (i) except (A) pursuant to the exercise of
\n options, warrants, conversion rights and other contractual rights
\n existing on the date hereof and disclosed pursuant to this Agreement or
\n not required to be disclosed pursuant to this Agreement or (B) pursuant
\n to the exercise of awards granted after the date hereof and expressly
\n permitted under this Agreement or in connection with transactions
\n permitted by Section 7.1(j), issue or sell any shares of its capital
\n stock in excess of $2.0 billion in the aggregate (or such larger amount
\n as (x) Enron may propose in order to prevent a downgrading of Enron’s
\n senior debt to less than investment grade by Standard & Poor’s Ratings
\n Services, a division of the McGraw-Hill Companies, Inc., by Moody’s
\n Investors Service, Inc. or by Fitch, Inc. that shall not affect the
\n intended accounting treatment set forth in the recitals to this
\n Agreement and (y) Dynegy consents to in writing, which consent shall
\n not be unreasonably withheld) for all such issuances and sales (and
\n provided that any such shares must be converted into Enron Common Stock
\n prior to the Mergers if the Mergers are to occur), effect any stock
\n split or otherwise change its capitalization as it existed on the date
\n hereof, (ii) grant, confer or award any option, warrant, conversion
\n right or other right not existing on the date hereof to acquire any
\n shares of its capital stock, (iii) amend or otherwise modify any
\n option, warrant, conversion right or other right to acquire any shares
\n of its capital stock existing on the date hereof, (iv) with respect to
\n any of its former or present employees (including officers and
\n directors), increase any compensation or benefits, or enter into, amend
\n or extend (or permit the extension of) any employment or consulting
\n agreement, except in each case in the ordinary course of business
\n consistent with past practice, (v) adopt any new employee benefit plan
\n or agreement (including any stock option, stock benefit or stock
\n purchase plan) or amend (except as required by law) any existing
\n employee benefit plan in any material respect, except in the ordinary
\n course of business consistent with past practice, or (vi) permit any
\n holder of an option to acquire shares of Enron Common Stock to have
\n shares withheld upon exercise, for tax purposes, in excess of the
\n number of shares needed to satisfy the minimum statutory withholding
\n requirements for federal and state tax withholding;<\/p>\n
(g) in the case of Dynegy, shall not, except pursuant to the
\n exercise of options, warrants, conversion rights and other contractual
\n rights existing on the date hereof and disclosed pursuant to this
\n Agreement or not required to be disclosed pursuant to this Agreement or
\n pursuant to the exercise of awards granted after the date hereof and
\n not prohibited by this Agreement, issue any shares of its capital stock
\n if it is reasonably likely to delay materially or to affect materially
\n and adversely the ability of Dynegy to solicit the approval of its
\n shareholders of this Agreement and the Dynegy Merger or to obtain any
\n consent, authorization, order or approval of any governmental
\n commission, board or <\/p>\n
34<\/p>\n
other regulatory body or the expiration of any applicable waiting
\n period required to consummate the transactions contemplated by this
\n Agreement;<\/p>\n
(h) except for (i) the payment of regular dividends on the
\n shares of Enron Common Stock at a quarterly rate of not more than
\n $0.125 per share, (ii) the payment of dividends on the shares of
\n Enron’s Second Preferred Stock at a quarterly rate of not more than
\n $3.413 per share, on shares of its 9.142% Preferred Stock at an annual
\n rate of not more than $91.420 per share, on shares of its Series B
\n Preferred Stock at an annual rate of 6.5% of the liquidation value
\n thereof, (iii) any additional dividend payments on the Second Preferred
\n Stock, the 9.142% Preferred Stock, the Series B Preferred Stock and the
\n Series C Preferred Stock required by the terms of Enron’s articles of
\n incorporation or statement of resolutions establishing such series of
\n Preferred Stock, and (iv) the payment of regular dividends on the
\n shares of Dynegy Common Stock at a quarterly rate of not more than
\n $0.075 per share, in each case with customary record and payment dates,
\n shall not (1) declare, set aside or pay any dividend or make any other
\n distribution or payment with respect to any shares of its capital stock
\n or (2) redeem, purchase or otherwise acquire any shares of its capital
\n stock or capital stock of any of its Subsidiaries, or make any
\n commitment for any such action;<\/p>\n
(i) in the case of Enron, shall not, and shall not permit any
\n of its Subsidiaries to, except for contractual commitments in effect on
\n the date hereof and disclosed in the Enron Disclosure Letter, sell,
\n lease or otherwise dispose of any of its assets (including capital
\n stock of Subsidiaries) that are, individually or in the aggregate,
\n material to it and its Subsidiaries as a whole, except for (i) sales of
\n surplus or obsolete equipment, (ii) sales of other assets in the
\n ordinary course of business, or (iii) sales, leases or other transfers
\n between such party and its wholly owned Subsidiaries or between those
\n Subsidiaries;<\/p>\n
(j) in the case of Enron, shall not, and shall not permit any
\n of its Subsidiaries to, except pursuant to contractual commitments in
\n effect on the date hereof and disclosed in the Enron Disclosure Letter,
\n acquire or agree to acquire by merging or consolidating with, or by
\n purchasing an equity interest in or a substantial portion of the assets
\n of, or by any other manner, any business or any corporation,
\n partnership, association or other business organization or division
\n thereof, in each case (i) for an aggregate consideration for all such
\n acquisitions in excess of $50 million (excluding acquisitions approved
\n in writing by both parties) or (ii) where a filing under the HSR Act or
\n any non-U.S. competition, antitrust or premerger notification laws is
\n required;<\/p>\n
(k) shall not, except as may be required as a result of a
\n change in generally accepted accounting principles, change any of the
\n material accounting principles or practices used by it;<\/p>\n
(l) shall, and shall cause any of its Subsidiaries to, use
\n commercially reasonable best efforts to maintain with financially
\n responsible insurance companies insurance in such amounts and against
\n such risks and losses as are customary for such party;<\/p>\n
(m) shall not, and shall not permit any of its Subsidiaries
\n to, (i) make or rescind any material election relating to taxes,
\n including elections for any and all joint <\/p>\n
35<\/p>\n
ventures, partnerships, limited liability companies, working interests
\n or other investments where it has the capacity to make such binding
\n election, other than an initial election for an entity under Treas.
\n Reg.ss. 301.7701-3, (ii) settle or compromise any material claim,
\n action, suit, litigation, proceeding, arbitration, investigation, audit
\n or controversy relating to taxes, or (iii) change in any material
\n respect any of its methods of reporting any item for tax purposes from
\n those employed in the preparation of its tax returns for the most
\n recent taxable year for which a return has been filed, except as may be
\n required by applicable law;<\/p>\n
(n) in the case of Enron, shall not, and shall not permit any
\n of its Subsidiaries to, (i) incur Debt, net of Debt repaid, in an
\n aggregate principal amount in excess of $1 billion over amounts
\n reflected in the Debt schedule included in Section 7.1 of the Enron
\n Disclosure Letter, or guarantee any such Debt or issue or sell any
\n warrants or rights to acquire any of such Debt or guarantee any debt
\n securities of others, (ii) except in the ordinary course of business or
\n with or between its Subsidiaries, enter into any material lease
\n (whether such lease is an operating or capital lease) or create any
\n material mortgages, Liens, security interests or other encumbrances on
\n its property in connection with any indebtedness thereof (other than
\n Permitted Liens) or (iii) make or commit to make capital expenditures
\n that, individually or in the aggregate with all other capital
\n expenditures made in a quarter, exceed the capital expenditures
\n forecast in the Enron Capital Budget for such quarter by more than 20%,
\n excluding capital expenditures to repair damage covered by insurance
\n (provided that if the Termination Date is extended pursuant to Section
\n 9.2(a), Enron shall submit for Dynegy’s approval, which shall not be
\n unreasonably withheld, a capital budget through the extended
\n Termination Date, and such capital budget, as so approved, shall be
\n substituted for such forecast for periods after December 31, 2002); for
\n the purposes of this Agreement, (x) “Debt” shall mean, with respect to
\n any person, the aggregate amount, without duplication, of (i) all
\n obligations for borrowed money; (ii) all obligations evidenced by
\n bonds, debentures, notes or other similar instruments; (iii) all
\n obligations to pay the deferred purchase price of property or services;
\n (iv) all capitalized lease obligations; (v) all obligations or
\n liabilities of others secured by a lien on any asset owned by such
\n person whether or not such obligation or liability is assumed, to the
\n extent of the lesser of such obligation or liability or the book value
\n of such asset; (vi) all Contingent Obligations of such person; and
\n (vii) any other obligations or liabilities which are required by
\n generally accepted accounting principles to be shown as debt on a
\n balance sheet, and (y) “Contingent Obligation” shall mean, as applied
\n to any person, any direct or indirect liability, contingent or
\n otherwise, of that person with respect to any indebtedness, lease,
\n dividend, letter of credit or other similar obligation of another,
\n including, without limitation, any such obligation directly or
\n indirectly guaranteed, endorsed (other than for collection or deposit
\n in the ordinary course of business), co-made or discounted or sold with
\n recourse by that person, or in respect of which that person is
\n otherwise directly or indirectly liable, including, without limitation,
\n any such obligation for which that person is in effect liable through
\n any agreement (contingent or otherwise) to purchase, repurchase or
\n otherwise acquire such obligation or any security therefor, or to
\n provide funds for the payment or discharge of such obligation (whether
\n in the form of loans, advances, stock purchases, capital contributions
\n or otherwise), or to maintain the solvency or any balance sheet, income
\n or other financial condition of the obligor of such obligation, or to
\n make payment for any <\/p>\n
36<\/p>\n
products, materials or supplies or for any transportation, services or
\n lease regardless of the nondelivery or nonfurnishing thereof, in any
\n such case if the purpose or intent of such agreement is to provide
\n assurance that such obligation will be paid or discharged, or that any
\n agreements relating thereto will be complied with, or that the holders
\n of such obligation will be protected (in whole or in part) against loss
\n in respect thereof, with the amount of any Contingent Obligation being
\n equal to the amount of the obligation, or portion thereof, so
\n guaranteed or otherwise supported;<\/p>\n
(o) shall not enter into any transaction that is reasonably
\n likely to delay materially or to affect materially and adversely the
\n ability of any of the parties hereto to solicit the approval of its
\n shareholders of this Agreement and the applicable Merger or to obtain
\n any consent, authorization, order or approval of any governmental
\n commission, board or other regulatory body or the expiration of any
\n applicable waiting period required to consummate the transactions
\n contemplated by this Agreement;<\/p>\n
(p) unless in the good faith opinion of its Board of Directors
\n after consultation with its outside legal counsel the following would
\n be inconsistent with its fiduciary duties, (i) shall not terminate,
\n amend, modify or waive any provision of any agreement containing a
\n standstill covenant to which it is a party and (ii) during such period
\n shall enforce, to the fullest extent permitted under Applicable Law,
\n the provisions of such agreement, including by obtaining injunctions to
\n prevent any breaches of such agreements and to enforce specifically the
\n terms and provisions thereof in any court of the United States of
\n America or any state having jurisdiction;<\/p>\n
(q) in the case of Enron, shall not, and shall cause its
\n Subsidiaries not to, make any increase in its risk control limits or
\n value at risk limits for its trading or other activities above those in
\n effect on the date hereof as established by Enron’s Board of Directors;
\n and<\/p>\n
(r) shall not (i) agree in writing or otherwise to take any of
\n the foregoing actions or (ii) permit any of its Subsidiaries to agree
\n in writing or otherwise to take any of the foregoing actions that refer
\n to Subsidiaries.<\/p>\n
Section 7.2 No Solicitation by Enron.<\/p>\n
(a) Enron agrees that (i) neither it nor any of its
\nSubsidiaries shall, and it shall not authorize or permit any of its officers,
\ndirectors, employees, agents or representatives (including, without limitation,
\nany investment banker, attorney or accountant retained by it or any of its
\nSubsidiaries) to, and on becoming aware of it will use its reasonable best
\nefforts to stop such person from continuing to, directly or indirectly, solicit,
\ninitiate or encourage (including by way of furnishing nonpublic information), or
\ntake any action designed to facilitate, directly or indirectly, any inquiry,
\nproposal or offer (including, without limitation, any proposal or offer to its
\nshareholders) with respect to a tender or exchange offer, merger, consolidation,
\nbusiness combination, purchase or similar transaction or series of transactions
\n(other than the transactions contemplated by this Agreement) involving,
\nindividually or in the aggregate, 15% or more of the assets, net revenues or net
\noperating income of Enron and its Subsidiaries on a consolidated basis or,
\nexcept as permitted by Section 7.1(f), 15% or more of any class of capital stock
\nof Enron, including, without limitation, any merger or similar transaction in
\nwhich 15% or more of Enron’s <\/p>\n
37<\/p>\n
capital stock is issued to a third party or its shareholders (any such proposal,
\noffer or transaction being hereinafter referred to as a “Enron Acquisition
\nProposal”) or cooperate with or assist, participate or engage in any discussions
\nor negotiations concerning an Enron Acquisition Proposal; and (ii) it will
\nimmediately cease and cause to be terminated any existing negotiations with any
\nparties conducted heretofore with respect to any of the foregoing; provided that
\nnothing contained in this Agreement shall prevent Enron or its Board of
\nDirectors from (A) complying with Rule 14e-2 promulgated under the Exchange Act
\nwith regard to an Enron Acquisition Proposal or (B) prior to the Cutoff Date,
\nproviding information (pursuant to a confidentiality agreement in reasonably
\ncustomary form and which does not contain terms that prevent Enron from
\ncomplying with its obligations under this Section 7.2) to, or engaging in any
\nnegotiations or discussions with, any person or entity who has made an
\nunsolicited bona fide written Enron Acquisition Proposal with respect to all the
\noutstanding shares of Enron Common Stock or all or substantially all the assets
\nof Enron that, in the good faith judgment of the Board of Directors of Enron,
\nafter consultation with a financial advisor of recognized national reputation,
\nand taking into account the likelihood of financing and consummation, is
\nsuperior to the Mergers (a “Enron Superior Proposal”) or is reasonably likely to
\nlead to an Enron Superior Proposal, to the extent the Board of Directors of
\nEnron, after consultation with its outside legal counsel, determines that the
\nfailure to do so would be inconsistent with its fiduciary obligations; provided,
\nhowever, that this Section 7.2 shall not limit the ability of Enron or any of
\nits Subsidiaries from selling or otherwise disposing of any assets to the extent
\npermitted by Section 7.1(i).<\/p>\n
(b) Prior to taking any action referred to in Section 7.2(a),
\nif Enron intends to participate in any such discussions or negotiations or
\nprovide any such information to any such third party, Enron shall give prompt
\nprior oral and written notice to Dynegy of each such action. Enron will
\nimmediately notify Dynegy orally and in writing of any such requests for such
\ninformation or the receipt of any Enron Acquisition Proposal or any inquiry with
\nrespect to or that could lead to an Enron Acquisition Proposal, including the
\nidentity of the person or group engaging in such discussions or negotiations,
\nrequesting such information or making such Enron Acquisition Proposal, and the
\nmaterial terms and conditions of any Enron Acquisition Proposal. Enron will (i)
\nkeep Dynegy fully informed of the status in reasonable detail (including any
\nchanges or proposed changes to such status in reasonable detail) on a timely
\nbasis of any such requests, Enron Acquisition Proposals or inquiries and (ii)
\nuse its reasonable best efforts to provide to Dynegy as soon as practicable
\nafter receipt or delivery thereof with copies of all material correspondence and
\nother material written material sent or provided to Enron from any third party
\nin connection with any Enron Acquisition Proposal or sent or provided by Enron
\nto any third party in connection with any Enron Acquisition Proposal (this
\nsentence not requiring the providing of information more frequently than once
\nevery 24 hours or the provision of confidential information of such party to
\nDynegy, other than the terms and conditions of any Enron Acquisition Proposal).
\nAny written notice under this Section 7.2 shall be given by facsimile with
\nreceipt confirmed or personal delivery.<\/p>\n
(c) Nothing in this Section 7.2 shall permit Enron to enter
\ninto any agreement with respect to an Enron Acquisition Proposal during the term
\nof this Agreement, it being agreed that during the term of this Agreement
\n(except pursuant to Section 9.3(c)), Enron shall not enter into any agreement
\nwith any person that provides for, or in any way facilitates, an Enron
\nAcquisition Proposal, other than a confidentiality and\/or standstill agreement
\nin reasonably <\/p>\n
38<\/p>\n
customary form and that does not contain terms that prevent Enron from complying
\nwith its obligations under this Section 7.2.<\/p>\n
(d) For purposes hereof, the “Cutoff Date,” when used with
\nrespect to Enron, means the date the condition set forth in Section 8.1(a)(i) is
\nsatisfied.<\/p>\n
Section 7.3 No Solicitation by Dynegy.<\/p>\n
(a) Dynegy agrees that (i) neither it nor any of its
\nSubsidiaries shall, and it shall not authorize or permit any of its officers,
\ndirectors, employees, agents or representatives (including, without limitation,
\nany investment banker, attorney or accountant retained by it or any of its
\nSubsidiaries) to, and on becoming aware of it will use its reasonable best
\nefforts to stop such person from continuing to, directly or indirectly, solicit,
\ninitiate or encourage (including by way of furnishing nonpublic information), or
\ntake any action designed to facilitate, directly or indirectly, any inquiry,
\nproposal or offer (including, without limitation, any proposal or offer to its
\nshareholders) with respect to a tender or exchange offer, merger, consolidation,
\nbusiness combination, purchase or similar transaction or series of transactions
\n(other than the transactions contemplated by this Agreement or transactions
\npursuant to Article 6 of the Dynegy Shareholder Agreement) involving,
\nindividually or in the aggregate, 15% or more of the assets, net revenues or net
\noperating income of Dynegy and its Subsidiaries on a consolidated basis or 15%
\nor more of any class of capital stock of Dynegy, including, without limitation,
\nany merger or similar transaction in which 15% or more of Dynegy’s capital stock
\nis issued to a third party or its shareholders (any such proposal, offer or
\ntransaction being hereinafter referred to as a “Dynegy Acquisition Proposal”) or
\ncooperate with or assist, participate or engage in any discussions or
\nnegotiations concerning a Dynegy Acquisition Proposal; and (ii) it will
\nimmediately cease and cause to be terminated any existing negotiations with any
\nparties conducted heretofore with respect to any of the foregoing; provided that
\nnothing contained in this Agreement shall prevent Dynegy or its Board of
\nDirectors from (A) complying with Rule 14e-2 promulgated under the Exchange Act
\nwith regard to a Dynegy Acquisition Proposal or (B) prior to the Cutoff Date,
\nproviding information (pursuant to a confidentiality agreement in reasonably
\ncustomary form and which does not contain terms that prevent Dynegy from
\ncomplying with its obligations under this Section 7.3) to or engaging in any
\nnegotiations or discussions with any person or entity who has made an
\nunsolicited bona fide written Dynegy Acquisition Proposal with respect to all
\nthe outstanding shares of Dynegy Common Stock or all or substantially all the
\nassets of Dynegy that, in the good faith judgment of the Board of Directors of
\nDynegy, after consultation with a financial advisor of recognized national
\nreputation, and taking into account the likelihood of financing and
\nconsummation, is superior to the Mergers (a “Dynegy Superior Proposal”) or is
\nreasonably likely to lead to a Dynegy Superior Proposal, to the extent that the
\nBoard of Directors of Dynegy, after consultation with its outside legal counsel,
\ndetermines that the failure to do so would be inconsistent with its fiduciary
\nobligations.<\/p>\n
(b) Prior to taking any action referred to in Section 7.3(a),
\nif Dynegy intends to participate in any such discussions or negotiations or
\nprovide any such information to any such third party, Dynegy shall give prompt
\nprior oral and written notice to Enron of each such action. Dynegy will
\nimmediately notify Enron orally and in writing of any such requests for such
\ninformation or the receipt of any Dynegy Acquisition Proposal or any inquiry
\nwith respect to or that could lead to a Dynegy Acquisition Proposal, including
\nthe identity of the person or <\/p>\n
39<\/p>\n
group engaging in such discussions or negotiations, requesting such information
\nor making such Dynegy Acquisition Proposal, and the material terms and
\nconditions of any Dynegy Acquisition Proposal. Dynegy will (i) keep Enron fully
\ninformed of the status in reasonable detail (including any changes or proposed
\nchanges to such status in reasonable detail) on a timely basis of any such
\nrequests, Dynegy Acquisition Proposals or inquiries and (ii) use its reasonable
\nbest efforts to provide to Enron as soon as practicable after receipt or
\ndelivery thereof with copies of all material correspondence and other material
\nwritten material sent or provided to Dynegy from any third party in connection
\nwith any Dynegy Acquisition Proposal or sent or provided by Dynegy to any third
\nparty in connection with any Dynegy Acquisition Proposal (this sentence not
\nrequiring the providing of information more frequently than once every 24 hours
\nor the provision of confidential information of such party to Enron, other than
\nthe terms and conditions of any Dynegy Acquisition Proposal). Any written notice
\nunder this Section 7.3 shall be given by facsimile with receipt confirmed or
\npersonal delivery.<\/p>\n
(c) Nothing in this Section 7.3 shall permit Dynegy to enter
\ninto any agreement with respect to a Dynegy Acquisition Proposal during the term
\nof this Agreement, it being agreed that during the term of this Agreement
\n(except pursuant to Section 9.4(c)), Dynegy shall not enter into any agreement
\nwith any person that provides for, or in any way facilitates, a Dynegy
\nAcquisition Proposal, other than a confidentiality and\/or standstill agreement
\nin reasonably customary form and that does not contain terms that prevent Dynegy
\nfrom complying with its obligations under this Section 7.3.<\/p>\n
(d) For purposes hereof, the “Cutoff Date,” when used with
\nrespect to Dynegy, means the date the condition set forth in Section 8.1(a)(ii)
\nis satisfied.<\/p>\n
Section 7.4 Meetings of Shareholders.<\/p>\n
(a) Each of Dynegy and Enron shall take all action necessary,
\nin accordance with applicable law and its articles of incorporation and bylaws,
\nto convene a meeting of its shareholders as promptly as practicable to consider
\nand vote upon the matters presented in connection with the Mergers. Dynegy and
\nEnron shall coordinate and cooperate with respect to the timing of such meetings
\nand shall use their commercially reasonable best efforts to hold such meetings
\non the same day. Notwithstanding any other provision of this Agreement, unless
\nthis Agreement is terminated in accordance with the terms hereof, Enron and
\nDynegy shall each submit the foregoing matters to its shareholders, whether or
\nnot the Board of Directors of Enron or Dynegy, as the case may be, withdraws,
\nmodifies or changes its recommendation and declaration regarding such matters.<\/p>\n
(b) Each of Dynegy and Enron, through its Board of Directors,
\nshall recommend approval of such matters and use its commercially reasonable
\nbest efforts to solicit from its shareholders proxies in favor of such matters;
\nprovided, however, that the Board of Directors of Dynegy or the Board of
\nDirectors of Enron may at any time prior to such party’s Cut-Off Date upon two
\nbusiness days’ prior written notice to Enron or Dynegy, respectively, (i)
\nwithdraw, modify or change any recommendation and declaration regarding such
\nmatters or (ii) recommend and declare advisable any Enron Superior Proposal or
\nDynegy Superior Proposal, as the case may be, if in the good faith opinion of
\nsuch Board of Directors after consultation with its outside legal counsel the
\nfailure so (x) to withdraw, modify or change its <\/p>\n
40<\/p>\n
recommendation and declaration or (y) to recommend and declare advisable any
\nEnron Superior Proposal or Dynegy Superior Proposal, as the case may be, would
\nbe inconsistent with its fiduciary obligations.<\/p>\n
Section 7.5 Filings; Commercially Reasonable Best Efforts,
\nEtc.<\/p>\n
(a) Subject to the terms and conditions herein provided, Enron
\nand Dynegy shall:<\/p>\n
(i) make their respective required filings under the
\n HSR Act (and shall share equally all filing fees incident
\n thereto), which filings shall be made promptly, and thereafter
\n shall promptly make any other required submissions under the
\n HSR Act;<\/p>\n
(ii) use their commercially reasonable best efforts
\n to cooperate with one another in (A) determining which filings
\n are advisable to be made prior to the Effective Time with, and
\n which consents, approvals, permits or authorizations are
\n advisable to be obtained prior to the Effective Time from,
\n governmental or regulatory authorities under any applicable
\n non-U.S. competition, antitrust or premerger notification laws
\n (the “Non-U.S. Antitrust Laws”) in connection with the
\n execution and delivery of this Agreement, and the consummation
\n of the Mergers and the transactions contemplated hereby; and
\n (B) timely making all such filings and timely seeking all such
\n consents, approvals, permits or authorizations;<\/p>\n
(iii) use their commercially reasonable best efforts
\n to cooperate with one another in (A) determining which filings
\n are required to be made prior to the Effective Time with, and
\n which consents, approvals, permits or authorizations are
\n required to be obtained prior to the Effective Time from, any
\n governmental or regulatory authorities of the United States,
\n the several states and non-U.S. jurisdictions (other than with
\n respect to any Non-U.S. Antitrust Laws) in connection with the
\n execution and delivery of this Agreement, and the consummation
\n of the Mergers and the transactions contemplated hereby; and
\n (B) timely making all such filings and timely seeking all such
\n consents, approvals, permits or authorizations;<\/p>\n
(iv) promptly notify each other of any communication
\n concerning this Agreement or the transactions contemplated
\n hereby to that party from any governmental or regulatory
\n authority and permit the other party to review in advance any
\n proposed communication concerning this Agreement or the
\n transactions contemplated hereby to any governmental or
\n regulatory authority;<\/p>\n
(v) not agree to participate in any meeting or
\n discussion with any governmental or regulatory authority in
\n respect of any filings, investigation or other inquiry
\n concerning this Agreement or the transactions contemplated
\n hereby unless it consults with the other party in advance and,
\n to the extent permitted by such governmental or regulatory
\n authority, gives the other party the opportunity to attend and
\n participate in such meeting or discussion;<\/p>\n
41<\/p>\n
(vi) furnish the other party with copies of all
\n correspondence, filings and communications (and memoranda
\n setting forth the substance thereof) between them and their
\n Subsidiaries and their respective representatives on the one
\n hand, and any government or regulatory authority or members or
\n any such authority’s staff on the other hand, with respect to
\n this Agreement and the transactions contemplated hereby; and<\/p>\n
(vii) furnish the other party with such necessary
\n information and reasonable assistance as such other party and
\n its affiliates may reasonably request in connection with their
\n preparation of necessary filings, registrations or submissions
\n of information to any governmental or regulatory authorities,
\n including, without limitation, any filings necessary or
\n appropriate under the provisions of the HSR Act or any
\n applicable Non-U.S. Antitrust Laws.<\/p>\n
(b) Without limiting Section 7.5(a), Dynegy and Enron shall:<\/p>\n
(i) each use commercially reasonable best efforts to
\n avoid the entry of, or to have vacated, terminated or
\n modified, any decree, order or judgment that would restrain,
\n prevent or delay the Closing; and<\/p>\n
(ii) each use commercially reasonable best efforts to
\n take any and all steps necessary to obtain any consents or
\n eliminate any impediments to the Mergers.<\/p>\n
(c) Dynegy and Enron intend that the Mergers will qualify as
\ntransfers of Enron Common Stock and Dynegy Common Stock to Newco in a
\ntransaction qualifying under Section 351 of the Code. Neither Dynegy, Enron nor
\ntheir respective Subsidiaries shall take actions, cause actions to be taken or
\nfail to take actions, as a result of which the Mergers would not qualify as
\ntransfers of Enron Common Stock and Dynegy Common Stock to Newco in a
\ntransaction qualifying under Section 351 of the Code.<\/p>\n
Section 7.6 Inspection. From the date hereof to the Effective
\nTime, each of Enron and Dynegy shall allow all designated officers, attorneys,
\naccountants, financing sources and other representatives of Dynegy or Enron, as
\nthe case may be, access, at all reasonable times, upon reasonable notice, to the
\nrecords and files, correspondence, audits and properties, as well as to all
\ninformation relating to commitments, contracts, titles, financial position,
\nlitigation, proceedings, complaints, investigations, inquiries or hearings, or
\notherwise pertaining to the business and affairs of Dynegy and Enron and their
\nrespective Subsidiaries, including inspection of such properties; provided that
\nno investigation pursuant to this Section 7.6 shall affect any representation or
\nwarranty given by any party hereunder, and provided further that notwithstanding
\nthe provision of information or investigation by any party, no party shall be
\ndeemed to make any representation or warranty except as expressly set forth in
\nthis Agreement. Notwithstanding the foregoing, no party shall be required to
\nprovide any information which it reasonably believes it may not provide to the
\nother party by reason of applicable law, rules or regulations, which constitutes
\ninformation protected by attorney\/client privilege if such privilege would be
\nadversely affected by reason of being so provided, or which it is required to
\nkeep confidential by reason of contract or agreement with third parties. The
\nparties hereto shall make reasonable and appropriate substitute disclosure
\narrangements under circumstances in which the <\/p>\n
42<\/p>\n
restrictions of the preceding sentence apply. Each of Dynegy and Enron agrees
\nthat it shall not, and shall cause its respective representatives not to, use
\nany information obtained pursuant to this Section 7.6 for any purpose unrelated
\nto the consummation of the transactions contemplated by this Agreement. All
\nnonpublic information obtained pursuant to this Section 7.6 shall be governed by
\nthe Confidentiality Agreement dated October 28, 2001 between Dynegy and Enron
\n(the “Confidentiality Agreement”).<\/p>\n
Section 7.7 Publicity. The parties shall consult with each
\nother before issuing any press release or public announcement pertaining to this
\nAgreement or the transactions contemplated hereby and shall not issue any such
\npress release or make any such public announcement without the prior written
\nconsent of the other party, which consent shall not be unreasonably withheld,
\nexcept as may be required by applicable law or by obligations pursuant to any
\nlisting agreement with any national securities exchange, in which case the party
\nproposing to issue such press release or make such public announcement shall use
\nits commercially reasonable best efforts to consult in good faith with the other
\nparty before issuing any such press releases or making any such public
\nannouncements.<\/p>\n
Section 7.8 Registration Statement on Form S-4.<\/p>\n
(a) Each of Dynegy and Enron shall cooperate and promptly
\nprepare, and Newco shall file with the SEC, as soon as practicable, a
\nRegistration Statement on Form S-4 (the “Form S-4”) under the Securities Act
\nwith respect to the shares of Newco Common Stock issuable in the Mergers, a
\nportion of which Registration Statement shall also serve as the joint proxy
\nstatement with respect to the meetings of the shareholders of Dynegy and of
\nEnron in connection with the transactions contemplated by this Agreement (the
\n“Proxy Statement\/Prospectus”). The respective parties shall cause the Proxy
\nStatement\/Prospectus and the Form S-4 to comply as to form in all material
\nrespects with the applicable provisions of the Securities Act, the Exchange Act
\nand the rules and regulations thereunder. Dynegy and Newco shall use
\ncommercially reasonable best efforts, and Enron shall cooperate with Dynegy and
\nNewco, to have the Form S-4 declared effective by the SEC as promptly as
\npracticable. Dynegy and Newco shall use commercially reasonable best efforts to
\nobtain, prior to the effective date of the Form S-4, all necessary non-U.S.
\nsecurities laws, state securities law or “Blue Sky” permits or approvals
\nrequired to carry out the transactions contemplated by this Agreement, and
\nDynegy and Enron shall share equally all expenses incident thereto (including
\nall SEC and other filing fees and all printing and mailing expenses associated
\nwith the Form S-4 and the Proxy Statement\/Prospectus). Newco shall advise Enron
\nand Dynegy, promptly after it receives notice thereof, of the time when the Form
\nS-4 has become effective or any supplement or amendment has been filed, the
\nissuance of any stop order, the suspension of the qualification of the shares of
\nNewco Common Stock issuable in connection with the Mergers for offering or sale
\nin any jurisdiction or any request by the SEC for amendment of the Proxy
\nStatement\/Prospectus or the Form S-4 or comments thereon and responses thereto
\nor requests by the SEC for additional information. Each of the parties shall
\nalso promptly provide each other party copies of all written correspondence
\nreceived from the SEC and summaries of all oral comments received from the SEC
\nin connection with the transactions contemplated by this Agreement. Each of the
\nparties shall promptly provide each other party with drafts of all
\ncorrespondence intended to be sent to the SEC in connection with the
\ntransactions contemplated by this Agreement and allow each such party the
\nopportunity to comment thereon prior to delivery to the SEC.<\/p>\n
43<\/p>\n
(b) Dynegy and Enron shall each use its commercially
\nreasonable best efforts to cause the Proxy Statement\/Prospectus to be mailed to
\nits shareholders as promptly as practicable after the Form S-4 is declared
\neffective under the Securities Act.<\/p>\n
(c) Each of Dynegy and Enron shall ensure that the information
\nprovided by it for inclusion in the Proxy Statement\/Prospectus and each
\namendment or supplement thereto, at the time of mailing thereof and at the time
\nof the respective meetings of shareholders of Dynegy and Enron, or, in the case
\nof information provided by it for inclusion in the Form S-4 or any amendment or
\nsupplement thereto, at the time it becomes effective, (i) will not include an
\nuntrue statement of a material fact or omit to state a material fact required to
\nbe stated therein or necessary to make the statements therein, in light of the
\ncircumstances under which they were made, not misleading and (ii) will comply as
\nto form in all material respects with the provisions of the Securities Act and
\nthe Exchange Act.<\/p>\n
Section 7.9 Listing Application. Dynegy shall cause Newco
\npromptly to prepare and submit to the NYSE a listing application covering the
\nshares of Newco Class A Common Stock issuable in the Mergers and shall use
\ncommercially reasonable best efforts to obtain, prior to the Effective Time,
\napproval for the listing of such shares of Newco Class A Common Stock, subject
\nto official notice of issuance.<\/p>\n
Section 7.10 Letters of Accountants.<\/p>\n
(a) Enron shall use commercially reasonable best efforts to
\ncause to be delivered to Dynegy “comfort” letters of Arthur Andersen LLP,
\nEnron’s independent public accountants, dated within two business days of the
\neffective date of the Form S-4 and within two business days of the Closing Date,
\nrespectively, and addressed to Dynegy and Newco with regard to certain financial
\ninformation regarding Enron included in the Form S-4, in form reasonably
\nsatisfactory to Dynegy and customary in scope and substance for “comfort”
\nletters delivered by independent public accountants in connection with
\nregistration statements similar to the Form S-4.<\/p>\n
(b) Dynegy shall use commercially reasonable best efforts to
\ncause to be delivered to Enron “comfort” letters of Arthur Andersen LLP,
\nDynegy’s independent public accountants, dated within two business days of the
\neffective date of the Form S-4 and within two business days of the Closing Date,
\nrespectively, and addressed to Enron, with regard to certain financial
\ninformation regarding Newco and Dynegy included in the Form S-4, in form
\nreasonably satisfactory to Enron and customary in scope and substance for
\n“comfort” letters delivered by independent public accountants in connection with
\nregistration statements similar to the Form S-4.<\/p>\n
Section 7.11 Agreements of Rule 145 Affiliates. Prior to the
\nEffective Time, each of Dynegy and Enron shall cause to be prepared and
\ndelivered to the other a list identifying all persons who such party believes,
\nat the date of the meeting of such party’s shareholders to consider and vote
\nupon the approval of the matters presented in connection with the Mergers, may
\nbe deemed to be “affiliates” of such party, as that term is used in paragraphs
\n(c) and (d) of Rule 145 under the Securities Act (the “Rule 145 Affiliates”).
\nEach of Dynegy and Enron shall use commercially reasonable best efforts to cause
\neach person who is identified as a Rule 145 Affiliate in such list to deliver to
\nthe other, at or prior to the Effective Time, a written agreement, <\/p>\n
44<\/p>\n
in the form of Exhibit 7.11. Newco shall be entitled to place restrictive
\nlegends on any shares of Newco Common Stock issued to such Rule 145 Affiliates
\npursuant to the Mergers.<\/p>\n
Section 7.12 Expenses. Whether or not the Mergers are
\nconsummated, all costs and expenses incurred in connection with this Agreement
\nand the transactions contemplated hereby shall be paid by the party incurring
\nsuch expenses, except as expressly provided in Section 7.5(a)(i), Section 7.8(a)
\nand Section 9.5(c) of this Agreement or as otherwise agreed in writing by the
\nparties.<\/p>\n
Section 7.13 Indemnification and Insurance.<\/p>\n
(a) From and after the Effective Time, Newco and, as
\napplicable, the Dynegy Surviving Entity and the Enron Surviving Entity shall
\nindemnify, defend and hold harmless to the fullest extent permitted under
\napplicable law each person (other than any Excluded Person, except to the extent
\nof existing irrevocable contractual rights) who is, or has been at any time
\nprior to the Effective Time, an officer or director of Dynegy or Enron,
\nrespectively, or any Subsidiary or division thereof, and each person who served
\nat the request of Dynegy or Enron, respectively, as a director, officer, trustee
\nor fiduciary of another corporation, partnership, joint venture, trust, pension
\nor other employee benefit plan or enterprise, and each person who is, or has
\nbeen at any time prior to the Effective Time, a party to a written employee
\nindemnification agreement with Dynegy or Enron or any Subsidiary thereof
\n(individually, an “Indemnified Party” and, collectively, the “Indemnified
\nParties”) against all losses, claims, damages, liabilities, costs or expenses
\n(including attorneys’ fees), judgments, fines, penalties and amounts paid in
\nsettlement in connection with any claim, action, suit, proceeding or
\ninvestigation arising out of or pertaining to acts or omissions, or alleged acts
\nor omissions, by them in their capacities as such, whether commenced, asserted
\nor claimed before or after the Effective Time. In the event of any such claim,
\naction, suit, proceeding or investigation (an “Action”), (i) Newco and, as
\napplicable, the Dynegy Surviving Entity or the Enron Surviving Entity shall pay,
\nas incurred, the fees and expenses of counsel selected by the Indemnified Party,
\nwhich counsel shall be reasonably acceptable to Newco and such Surviving Entity,
\nin advance of the final disposition of any such Action to the fullest extent
\npermitted by applicable law and, if required, upon receipt of any undertaking
\nrequired by applicable law, and (ii) Newco and such Surviving Entity shall
\ncooperate in the defense of any such matter; provided, however, Newco and such
\nSurviving Entity shall not be liable for any settlement effected without its
\nwritten consent (which consent shall not be unreasonably withheld or delayed),
\nand provided further, that Newco and such Surviving Entity shall not be
\nobligated pursuant to this Section 7.13 to pay the fees and disbursements of
\nmore than one counsel (other than local counsel) for all Indemnified Parties in
\nany single Action, unless, in the good faith judgment of any of the Indemnified
\nParties, there is or may be a conflict of interests between two or more of such
\nIndemnified Parties, in which case there may be separate counsel for each
\nsimilarly situated group. For purposes of this Agreement, “Excluded Person”
\nshall mean each officer or director or former officer or director of Enron
\nspecified by Enron in a notice to Dynegy delivered prior to the Closing
\nreferencing this Section 7.13 and identifying such person as an Excluded Person
\nfor purposes hereof.<\/p>\n
(b) The parties agree that the rights to indemnification,
\nincluding provisions relating to advances of expenses incurred in defense of any
\naction or suit, in the certificate or <\/p>\n
45<\/p>\n
articles of incorporation and bylaws of Dynegy, Enron and their respective
\nSubsidiaries with respect to matters occurring through the Effective Time shall
\nsurvive the Mergers.<\/p>\n
(c) For a period of six years after the Effective Time, Newco
\nand, as applicable, the Dynegy Surviving Entity and the Enron Surviving Entity
\nshall cause to be maintained officers’ and directors’ liability insurance
\ncovering the Indemnified Parties who are, or at any time prior to the Effective
\nTime were, covered by existing officers’ and directors’ liability insurance
\npolicies of Dynegy or Enron, as applicable, on terms substantially no less
\nadvantageous to the Indemnified Parties than such existing insurance, provided
\nthat Newco, the Dynegy Surviving Entity and the Enron Surviving Entity shall not
\nbe required to pay aggregate premiums for the six-year period in excess of six
\ntimes 150% of the last annual premium paid by Dynegy or Enron, as applicable,
\nprior to the date hereof (the amount of which premium is set forth in the Dynegy
\nDisclosure Letter and the Enron Disclosure Letter, as the case may be), but in
\nsuch case shall purchase as much coverage as reasonably practicable for such
\namount.<\/p>\n
(d) The rights of each Indemnified Party hereunder shall be in
\naddition to any other rights such Indemnified Party may have under the articles
\nor certificate of incorporation or bylaws of Dynegy, Enron or any of their
\nrespective Subsidiaries, under applicable law or otherwise. The provisions of
\nthis Section 7.13 shall survive the consummation of the Mergers and expressly
\nare intended to benefit each of the Indemnified Parties.<\/p>\n
(e) If Newco, the Dynegy Surviving Entity or the Enron
\nSurviving Entity or any of their respective successors or assigns (i)
\nconsolidates with or merges into any other person and shall not be the
\ncontinuing or surviving corporation or entity in such consolidation or merger or
\n(ii) transfers all or substantially all of its properties and assets to any
\nperson, then and in either such case, proper provision shall be made so that the
\nsuccessors and assigns of Newco or such Surviving Entity, as the case may be,
\nshall assume the obligations set forth in this Section 7.13.<\/p>\n
Section 7.14 Agreements Regarding Enron Supplemental
\nIndentures. Newco shall take such actions as are required by the Indenture,
\ndated as of February 7, 2001, by and between Enron and The Chase Manhattan Bank,
\nas Trustee, relating to the Zeros to assume the obligations of Enron to deliver
\nsecurities, cash or other assets upon conversion of the Zeros. Newco shall take
\nall actions as are required by the articles of incorporation of Enron and the
\napplicable statement of resolutions establishing each of the Second Preferred
\nStock, the Series B Preferred Stock and the Series C Preferred Stock to assume
\nthe obligations of Enron to deliver securities, cash or other assets upon
\nconversion of such series of Enron Preferred Stock.<\/p>\n
Section 7.15 No Hire. From the date of this Agreement until
\nthe Effective Time, Dynegy and Enron shall not, and shall cause their respective
\nSubsidiaries not to, solicit for employment or employ any officer, director or
\nkey employee (personnel at the director level and above in the case of Dynegy or
\nthe manager level and above in the case of Enron) of the other party or its
\nSubsidiaries. If this Agreement is terminated, Dynegy and Enron shall not, and
\nshall cause their respective Subsidiaries not to, solicit for employment any
\nofficer, director or key employee of the other party or its Subsidiaries for a
\nperiod of 180 days after such termination, provided that this restriction shall
\nnot apply (i) to Dynegy, if the fee provided for in Section 9.5(a) is payable,
\nor (ii) to Enron, if the fee provided for in Section 9.5(b) is payable. The
\nsolicitation prohibitions of this Section 7.15 shall not apply to solicitations
\nmade to the public or <\/p>\n
46<\/p>\n
the industry generally, and a party shall not be prohibited from employing any
\nsuch person who has an outstanding offer of employment as of the date hereof.<\/p>\n
Section 7.16 Employee Matters. Newco shall maintain without
\nsubstantive modification for a period of one year following the Effective Time
\nthose Enron Benefit Plans that are tax qualified (“tax qualified plans”) under
\nSections 401(a) and 501(a) of the Code. The active or former employees of Enron
\nwho after the Effective Time participate in a tax qualified plan sponsored or
\nmaintained by Newco or its U.S. federal income tax consolidated Subsidiaries
\n(collectively, “Newco Group”) will receive credit for service under such plan,
\nbut only for purposes of eligibility and vesting, as if service with Enron prior
\nto the Effective Time had been service with Dynegy. From and after the Effective
\nTime, Enron employees, excluding those covered by collective bargaining
\nagreements, will be provided severance benefits that are at least comparable in
\nall respects to the severance benefits provided by Dynegy under its severance
\nbenefit plans and arrangements for similarly situated employees. For purposes of
\nthe foregoing obligation regarding severance, the term “severance benefit plans
\nand arrangements” shall not include any individually negotiated agreements. The
\nforegoing notwithstanding, nothing in this Section 7.16 shall obligate Dynegy to
\nprovide severance benefits if an employee is offered a comparable position,
\nbenefits and salary with a third-party purchaser of the business operation in
\nwhich the employee works without regard to the form of the third-party purchase
\ntransaction. Enron Benefit Plans that are employee welfare benefit plans within
\nthe meaning of section 3(1) of ERISA, other than severance pay plans, shall be
\nmaintained for one year after the Effective Time without substantive change in
\neither benefits provided or classes of employees covered; provided that such
\nplans may be modified in accordance with past practice to take into account
\ncustomary periodic design adjustments and employee premium costs to reflect
\nexperience and change in the law and provided that Enron employees may be
\nprovided medical benefits under the Dynegy medical benefit plans and
\narrangements for similarly situated employees commencing as of the January 1
\nimmediately following the Effective Time. Enron employees who on or after the
\nEffective Time become eligible for health care benefits under plans other than
\nEnron Benefit Plans, if other than at the end of an annual coverage period under
\nthe analogous or correlative Enron Benefit Plan providing similar health
\nbenefits, shall under such plans be granted credit for co-pays, deductibles and
\nthe like applicable under the Enron Benefit Plan and shall not be subject to any
\npreexisting condition exclusion that was not applicable under the Enron Benefit
\nPlan. With respect to sick pay, severance pay and vacation time from and after
\nthe Effective Time, (i) to the extent benefits are dependent upon years of
\nservice and\/or compensation criteria, service with and compensation received
\nfrom Enron prior to the Effective Time shall be credited as if it had been
\nservice with Dynegy and (ii) no Enron employee who was active at the Effective
\nTime shall have his annual vacation entitlement reduced for a one-year period
\nfollowing the Effective Time. Enron may in its discretion continue its present
\nretiree medical program and its existing portable medical program until the
\nEffective Time, provided there is no substantive change.<\/p>\n
Section 7.17 Alternative Structure. The parties acknowledge
\nthat they would prefer to structure the transactions contemplated hereby in a
\nmanner that results in a single corporation with substantially all the senior
\ndebt (other than that of regulated utility subsidiaries) of Dynegy, Dynegy
\nHoldings Inc. (a subsidiary of Dynegy) and Enron, in lieu of the Mergers
\nprovided for herein. Accordingly, the parties agree to cooperate with each other
\nin analyzing and <\/p>\n
47<\/p>\n
determining such a structure that is advisable in connection with these
\ntransactions and promptly to execute and deliver an appropriate amendment to
\nthis Agreement to reflect such structure.<\/p>\n
ARTICLE 8<\/p>\n
CONDITIONS<\/p>\n
Section 8.1 Conditions to Each Party’s Obligation to Effect
\nthe Mergers. The respective obligation of each party to effect the Mergers shall
\nbe subject to the fulfillment at or prior to the Closing Date of the following
\nconditions:<\/p>\n
(a) (i) The Enron Merger and this Agreement shall have been
\n approved by the affirmative vote of (A) holders of a majority of the
\n votes entitled to be cast by holders of Enron Common Stock and the
\n Second Preferred Stock voting together as a single class and (B)
\n holders of a majority of the outstanding shares of Enron Common Stock
\n entitled to vote thereon; and<\/p>\n
(ii) This Agreement shall have been approved by the
\n affirmative vote of the holders of at least two-thirds of the shares of
\n Dynegy Class A Common Stock and Dynegy Class B Common Stock (voting
\n together) entitled to vote thereon.<\/p>\n
(b) (i) Any waiting period applicable to the consummation of
\n the Mergers under the HSR Act shall have expired or been terminated,
\n (ii) approval of the FERC with respect to the Mergers under Section 203
\n of the Federal Power Act shall have been granted, (iii) the SEC shall
\n have taken all necessary action under Section 9(a)(2) of the 1935 Act
\n and there shall not have been received a written notice from the SEC
\n (that has not been subsequently withdrawn or negated) of a challenge to
\n Newco’s, Chevron’s or ChevronTexaco’s reliance on the good-faith
\n exemption provided by Section 3(c) of the 1935 Act in connection with
\n the Mergers, (iv) there shall not be pending or threatened in writing
\n any claim, proceeding or action by an agency of the government of the
\n United States, of the United Kingdom or of the European Union seeking
\n to restrain, prohibit or rescind any transactions contemplated by this
\n Agreement as an actual or threatened violation of the HSR Act, Non-U.S.
\n Antitrust Laws or other antitrust, competition or premerger
\n notification, trade regulation law, regulation or order, as applicable,
\n or seeking to penalize a party for completing any such transaction
\n which in any of such cases is, in the reasonable judgment of either
\n Enron or Dynegy, reasonably likely to have a Material Adverse Effect on
\n Newco after the Effective Time, (v) in the event of any review by the
\n U.K. Office of Fair Trading or, if applicable, the U.K. Secretary of
\n State for Trade and Industry, indications reasonably satisfactory to
\n each of Enron and Dynegy that the Mergers will not be referred to the
\n Competition Commission shall have been received or, if the Mergers are
\n referred to the Competition Commission, indications reasonably
\n satisfactory to each of Enron and Dynegy that the Mergers can proceed,
\n (vi) any mandatory waiting period under any applicable Non-U.S.
\n Antitrust Laws (where the failure to observe such waiting period
\n referred to in this clause (vi) would, in the reasonable judgment of
\n either Dynegy or Enron, be reasonably likely to have a Material Adverse
\n Effect on Newco after the Effective Time) shall have expired or been
\n terminated, (vii) the Enron Regulatory Approvals and the Dynegy
\n Regulatory Approvals <\/p>\n
48<\/p>\n
shall have been obtained, and no such Enron Regulatory Approval or
\n Dynegy Regulatory Approval shall impose or contain terms or conditions
\n that would, in the reasonable judgment of either Dynegy or Enron, be
\n reasonably likely to have a Material Adverse Effect on Newco after the
\n Effective Time, (viii) all consents, approvals, permits and
\n authorizations referred to in Section 7.5(a)(iii) shall have been
\n obtained (where the failure to obtain such consents, approvals, permits
\n or authorizations would, in the reasonable judgment of either Dynegy or
\n Enron, be reasonably likely to have a Material Adverse Effect on Newco
\n after the Effective Time), and no consent, approval, permit or
\n authorization shall impose or contain terms or conditions that would,
\n in the reasonable judgment of either Dynegy or Enron, be reasonably
\n likely to have a Material Adverse Effect on Newco after the Effective
\n Time, and (ix) there shall not have been a final or preliminary
\n administrative order denying approval of or prohibiting the Mergers
\n issued by a governmental authority with jurisdiction to enforce
\n applicable Non-U.S. Antitrust Laws, which order is in the reasonable
\n judgment of either Enron or Dynegy reasonably likely to have a Material
\n Adverse Effect on Newco after the Effective Time.<\/p>\n
(c) None of the parties hereto shall be subject to any decree,
\n order or injunction that prohibits the consummation of the Mergers
\n issued by a court of competent jurisdiction of (i) the United States or
\n any state or other jurisdiction in the United States, (ii) the European
\n Union or any member state thereof or Canada (the “Specified
\n Jurisdictions”) or (iii) any other jurisdiction (the “Other Non-U.S.
\n Jurisdictions”); provided, however, that, prior to invoking this
\n condition, each party shall have complied with Section 7.5, and with
\n respect to other matters not covered by Section 7.5, shall have used
\n its commercially reasonable best efforts to have any such decree, order
\n or injunction lifted or vacated; and no statute, rule or regulation
\n shall have been enacted by any governmental authority which prohibits
\n or makes unlawful the consummation of the Mergers; provided, further,
\n that, with respect to any decree, order, injunction, statute, rule or
\n regulation of any Other Non-U.S. Jurisdiction, noncompliance with such
\n decree, order, injunction, statute, rule or regulation would, in the
\n reasonable judgment of either Dynegy or Enron, be reasonably likely to
\n have a Material Adverse Effect on Enron, Dynegy or Newco.<\/p>\n
(d) The Form S-4 shall have become effective and no stop order
\n with respect thereto shall be in effect.<\/p>\n
(e) The shares of Newco Class A Common Stock to be issued
\n pursuant to the Mergers shall have been authorized for listing on the
\n NYSE, subject to official notice of issuance.<\/p>\n
Section 8.2 Conditions to Obligation of Enron to Effect the
\nMergers. The obligation of Enron to effect the Mergers shall be subject to the
\nfulfillment or waiver at or prior to the Closing Date of the following
\nconditions:<\/p>\n
(a) Dynegy, Newco, Dynegy Merger Sub and Enron Merger Sub
\n shall have performed, in all material respects, their covenants and
\n agreements contained in this Agreement required to be performed on or
\n prior to the Closing Date, and the representations and warranties of
\n Dynegy, Newco, Dynegy Merger Sub and Enron <\/p>\n
49<\/p>\n
Merger Sub contained in this Agreement (i) that are qualified as to
\n materiality or Dynegy Material Adverse Effect shall be true and correct
\n in all respects as of the Closing Date, except to the extent such
\n representations and warranties expressly relate to an earlier date (in
\n which case as of such earlier date), and (ii) that are not so qualified
\n shall be true and correct in all respects as of the Closing Date,
\n except to the extent such representations and warranties expressly
\n relate to an earlier date (in which case as of such earlier date) and
\n except for such breaches of representations and inaccuracies in
\n warranties referred to in this clause (ii) that do not have and are not
\n reasonably likely to have, individually or in the aggregate, a Dynegy
\n Material Adverse Effect, and Enron shall have received a certificate of
\n each of Dynegy, Newco, Dynegy Merger Sub and Enron Merger Sub, executed
\n on its behalf by its President or one of its Vice Presidents, dated the
\n Closing Date, certifying to such effect.<\/p>\n
(b) Enron shall have received the opinion of Vinson & Elkins
\n L.L.P., counsel to Enron, in form and substance reasonably satisfactory
\n to Enron and dated the Closing Date, a copy of which shall be furnished
\n to Dynegy, to the effect that the Mergers will be treated as transfers
\n of Enron Common Stock by the holders of Enron Common Stock and of
\n Dynegy Common Stock by the holders of Dynegy Common Stock to Newco in
\n exchange for Newco Common Stock in a transaction qualifying under
\n Section 351 of the Code and that no gain or loss will be recognized for
\n United States federal income tax purposes by the shareholders of Enron
\n who exchange Enron Common Stock solely for Newco Common Stock pursuant
\n to the Enron Merger (except to the extent of any cash received in lieu
\n of fractional shares). In rendering such opinion, such counsel shall be
\n entitled to receive and rely upon representations of officers of Enron,
\n Dynegy, Chevron and ChevronTexaco, substantially in the form of
\n Exhibits 8.2(a), 8.2(b), 8.2(c) and 8.2(d), respectively, dated as of
\n the Closing Date.<\/p>\n
(c) The representations and warranties contained in Section
\n 6.9(i) [no event constituting a Dynegy Material Adverse Effect] shall
\n be true and correct in all respects as of the Closing Date.<\/p>\n
Section 8.3 Conditions to Obligation of Dynegy, Newco, Dynegy
\nMerger Sub and Enron Merger Sub to Effect the Mergers. The obligations of
\nDynegy, Newco, Dynegy Merger Sub and Enron Merger Sub to effect the Mergers
\nshall be subject to the fulfillment or waiver at or prior to the Closing Date of
\nthe following conditions:<\/p>\n
(a) Enron shall have performed, in all material respects, its
\n covenants and agreements contained in this Agreement required to be
\n performed on or prior to the Closing Date, and the representations and
\n warranties of Enron contained in this Agreement (i) that are qualified
\n as to materiality or Enron Material Adverse Effect shall be true and
\n correct in all respects as of the Closing Date, except to the extent
\n such representations and warranties expressly relate to an earlier date
\n (in which case as of such earlier date), and (ii) that are not so
\n qualified shall be true and correct in all respects as of the Closing
\n Date, except to the extent such representations and warranties
\n expressly relate to an earlier date (in which case as of such earlier
\n date) and except for such breaches of representations and inaccuracies
\n in warranties referred to in this clause (ii) that do not have and are
\n not reasonably likely to have, individually or in the <\/p>\n
50<\/p>\n
aggregate, an Enron Material Adverse Effect, and Dynegy shall have
\n received a certificate of Enron, executed on its behalf by its
\n President or one of its Vice Presidents, dated the Closing Date,
\n certifying to such effect.<\/p>\n
(b) Dynegy shall have received the opinion of Baker Botts
\n L.L.P., counsel to Dynegy, in form and substance reasonably
\n satisfactory to Dynegy and dated the Closing Date, a copy of which
\n shall be furnished to Enron, to the effect that the Mergers will be
\n treated as transfers of Enron Common Stock by the holders of Enron
\n Common Stock and of Dynegy Common Stock by the holders of Dynegy Common
\n Stock to Newco in exchange for Newco Common Stock in a transaction
\n qualifying under Section 351 of the Code and that no gain or loss will
\n be recognized for United States federal income tax purposes by the
\n shareholders of Dynegy who exchange Dynegy Common Stock solely for
\n Newco Common Stock pursuant to the Dynegy Merger and by the
\n shareholders of Enron who exchange Enron Common Stock solely for Newco
\n Common Stock pursuant to the Enron Merger (except to the extent of any
\n cash received in lieu of fractional shares). In rendering such opinion,
\n such counsel shall be entitled to receive and rely upon representations
\n of officers of Enron, Dynegy, Chevron and ChevronTexaco, substantially
\n in the form of Exhibits 8.2(a), 8.2(b), 8.2(c) and 8.2(d),
\n respectively, dated as of the Closing Date.<\/p>\n
(c) The representations and warranties contained in Section
\n 5.9(i) [no event constituting an Enron Material Adverse Effect] shall
\n be true and correct in all respects as of the Closing Date.<\/p>\n
ARTICLE 9<\/p>\n
TERMINATION<\/p>\n
Section 9.1 Termination by Mutual Consent. This Agreement may
\nbe terminated at any time prior to the Effective Time by the mutual written
\nconsent of Enron and Dynegy.<\/p>\n
Section 9.2 Termination by Dynegy or Enron. This Agreement may
\nbe terminated at any time prior to the Effective Time by action of the Board of
\nDirectors of Dynegy or Enron if:<\/p>\n
(a) the Mergers shall not have been consummated by November
\n 30, 2002 (the “Termination Date”); provided, however, that the right to
\n terminate this Agreement pursuant to this clause (a) shall not be
\n available to any party whose failure to perform or observe in any
\n material respect any of its obligations under this Agreement in any
\n manner shall have been the cause of, or resulted in, the failure of the
\n Mergers to occur on or before such date; provided, further, that, if on
\n the initial Termination Date (i) the conditions to Closing set forth in
\n Section 8.1(b) shall not have been fulfilled and\/or (ii) the conditions
\n to Closing set forth in Section 8.1(a) shall not have been fulfilled
\n and the meetings of shareholders shall not have been held, but in
\n either case all other conditions to the Closing shall have been
\n fulfilled or shall be capable of being fulfilled, then the Termination
\n Date may be extended from time to time by either Enron or Dynegy, by
\n notice to the other, to a date not later than May 31, 2003;<\/p>\n
51<\/p>\n
(b) a meeting (including adjournments and postponements) of
\n Enron’s shareholders for the purpose of obtaining the approvals
\n required by Section 8.1(a)(i) shall have been held and such shareholder
\n approvals shall not have been obtained;<\/p>\n
(c) a meeting (including adjournments and postponements) of
\n Dynegy’s shareholders for the purpose of obtaining the approvals
\n required by Section 8.1(a)(ii) shall have been held and such
\n shareholder approvals shall not have been obtained; or<\/p>\n
(d) a court of competent jurisdiction or governmental,
\n regulatory or administrative agency or commission of the United States,
\n any state or other jurisdiction of the United States, any Specified
\n Jurisdiction or any Other Non-U.S. Jurisdiction shall have issued an
\n order, decree or ruling or taken any other action permanently
\n restraining, enjoining or otherwise prohibiting the transactions
\n contemplated by this Agreement and such order, decree, ruling or other
\n action shall have become final and nonappealable; provided, that, with
\n respect to any order, decree, ruling or other action of any Other
\n Non-U.S. Jurisdiction, noncompliance with such order, decree, ruling or
\n other action would, in the reasonable judgment of either Dynegy or
\n Enron, be reasonably likely to have a Material Adverse Effect on Enron,
\n Dynegy or Newco.<\/p>\n
Section 9.3 Termination by Enron. This Agreement may be
\nterminated at any time prior to the Effective Time by action of the Board of
\nDirectors of Enron, after, in the case of Section 9.3(b) or (c), consultation
\nwith its outside legal advisors, if<\/p>\n
(a) (i) there has been a breach by Dynegy, Newco, Dynegy
\n Merger Sub or Enron Merger Sub of any representation, warranty,
\n covenant or agreement set forth in this Agreement or if any
\n representation or warranty of Dynegy, Newco, Dynegy Merger Sub or Enron
\n Merger Sub shall have become untrue, in either case such that the
\n conditions set forth in Section 8.2(a) would not be satisfied and (ii)
\n such breach is not curable, or, if curable, is not cured within 30 days
\n after written notice of such breach is given to Dynegy by Enron;<\/p>\n
(b) the Board of Directors of Dynegy shall have withdrawn or
\n materially modified, in a manner adverse to Enron, its approval or
\n recommendation of the Dynegy Merger or recommended a Dynegy Acquisition
\n Proposal, or resolved to do so; or<\/p>\n
(c) prior to the Cutoff Date, (i) the Board of Directors of
\n Enron has received an Enron Superior Proposal, (ii) in light of such
\n Enron Superior Proposal the Board of Directors of Enron shall have
\n determined in good faith, after consultation with its outside legal
\n advisors, and taking into account all reasonably available information,
\n including information concerning the likelihood that the approval by
\n Enron’s shareholders of the Enron Merger and this Agreement will not be
\n obtained by reason of the existence of such Enron Superior Proposal,
\n that proceeding with the Enron Merger would be inconsistent with its
\n fiduciary obligations, (iii) Enron is not in material breach of Section
\n 7.2, Section 7.4, Section 7.5 and Section 7.8, (iv) Enron has paid the
\n fee provided for under Section 9.5(a)(i), and (v) the Board of
\n Directors of Enron concurrently approves, and Enron concurrently enters
\n into, a binding definitive written agreement providing for the
\n implementation of such Enron Superior Proposal; provided that Enron may
\n not effect such termination pursuant to this Section 9.3(c) unless and
\n until (i) Dynegy receives at <\/p>\n
52<\/p>\n
least four business days’ prior written notice from Enron of its
\n intention to effect such termination pursuant to this Section 9.3(c),
\n which notice includes the terms of the applicable Enron Acquisition
\n Proposal; and (ii) during such four business day period, Enron shall,
\n and shall cause its respective financial and legal advisors to,
\n consider any adjustment in the terms and conditions of this Agreement
\n that Dynegy may propose.<\/p>\n
Section 9.4 Termination by Dynegy. This Agreement may be
\nterminated at any time prior to the Effective Time by action of the Board of
\nDirectors of Dynegy, after, in the case of Section 9.4(b) or (c), consultation
\nwith its outside legal advisors, if:<\/p>\n
(a) (i) there has been a breach by Enron of any
\n representation, warranty, covenant or agreement set forth in this
\n Agreement or if any representation or warranty of Enron shall have
\n become untrue, in either case such that the conditions set forth in
\n Section 8.3(a) would not be satisfied and (ii) such breach is not
\n curable, or, if curable, is not cured within 30 days after written
\n notice of such breach is given by Dynegy to Enron;<\/p>\n
(b) the Board of Directors of Enron shall have withdrawn or
\n materially modified, in a manner adverse to Dynegy, its approval or
\n recommendation of the Enron Merger or recommended an Enron Acquisition
\n Proposal, or resolved to do so; or<\/p>\n
(c) prior to the Cutoff Date, (i) the Board of Directors of
\n Dynegy has received a Dynegy Superior Proposal, (ii) in light of such
\n Dynegy Superior Proposal the Board of Directors of Dynegy shall have
\n determined in good faith, after consultation with its outside legal
\n advisors, and taking into account all reasonably available information,
\n including information concerning the likelihood that the approval of
\n this Agreement by Dynegy’s shareholders will not be obtained by reason
\n of the existence of such Dynegy Superior Proposal, that proceeding with
\n the Dynegy Merger would be inconsistent with its fiduciary obligations,
\n (iii) Dynegy is not in material breach of Section 7.3, Section 7.4,
\n Section 7.5 and Section 7.8, (iv) Dynegy has paid the fee provided for
\n under Section 9.5(b)(i), and (v) the Board of Directors of Dynegy
\n concurrently approves, and Dynegy concurrently enters into, a binding
\n definitive written agreement providing for the implementation of such
\n Dynegy Superior Proposal; provided that Dynegy may not effect such
\n termination pursuant to this Section 9.4(c) unless and until (i) Enron
\n receives at least four business days’ prior written notice from Dynegy
\n of its intention to effect such termination pursuant to this Section
\n 9.4(c), which notice includes the terms of the applicable Dynegy
\n Acquisition Proposal; and (ii) during such four business day period,
\n Dynegy shall, and shall cause its respective financial and legal
\n advisors to, consider any adjustment in the terms and conditions of
\n this Agreement that Enron may propose.<\/p>\n
Section 9.5 Effect of Termination.<\/p>\n
(a) If this Agreement is terminated:<\/p>\n
(A) by Enron or Dynegy pursuant to Section 9.2(b)
\n [failure to obtain Enron shareholder approval] either (1)
\n after the public announcement of an Enron Acquisition
\n Proposal, whether or not the Enron Acquisition Proposal is
\n still pending or has been consummated, and Enron enters into
\n an agreement with respect to any Enron Acquisition Proposal or
\n is a party to or subject to a <\/p>\n
53<\/p>\n
completed Enron Acquisition Proposal (in either case, whether
\n or not relating to the initial Enron Acquisition Proposal) on
\n or prior to the date 12 months after such termination or (2)
\n after the Board of Directors of Enron has withdrawn or
\n modified, in a manner adverse to Dynegy, its approval or
\n recommendation of the Enron Merger or recommended an Enron
\n Acquisition Proposal, or resolved to do so; or<\/p>\n
(B) by Dynegy pursuant to Section 9.4(b) [withdrawal
\n of Enron recommendation to shareholders]; or<\/p>\n
(C) by Enron pursuant to Section 9.3(c) [fiduciary
\n out];<\/p>\n
then Enron shall pay Dynegy a fee of $297.5 million at the time of such
\ntermination (or, in the case of clause (A)(1), at the time such clause is
\nsatisfied, and such fee shall be reduced by any prior payment under Section
\n9.5(c)) and shall concurrently pay a fee of $52.5 million to ChevronTexaco, in
\neach case in cash by wire transfer to an account designated by Dynegy or
\nChevronTexaco, respectively.<\/p>\n
(ii) If this Agreement is terminated by Enron pursuant to
\nSection 9.3(c) and in accordance with the terms thereof (including the payment
\nof the fee referred to therein), no fee additional to the fee specified in
\nSection 9.3(c) shall be payable by Enron to Dynegy.<\/p>\n
(b) If this Agreement is terminated:<\/p>\n
(A) by Enron or Dynegy pursuant to Section 9.2(c)
\n [failure to obtain Dynegy shareholder approval] either (1)
\n after the public announcement of a Dynegy Acquisition
\n Proposal, whether or not the Dynegy Acquisition Proposal is
\n still pending or has been consummated, and Dynegy enters into
\n an agreement with respect to any Dynegy Acquisition Proposal
\n or is a party to or subject to a completed Dynegy Acquisition
\n Proposal (in either case, whether or not relating to the
\n initial Dynegy Acquisition Proposal) on or prior to the date
\n 12 months after such termination or (2) after the Board of
\n Directors of Dynegy has withdrawn or modified, in a manner
\n adverse to Enron, its approval or recommendation of the Dynegy
\n Merger or recommended a Dynegy Acquisition Proposal, or
\n resolved to do so; or<\/p>\n
(B) by Enron pursuant to Section 9.3(b) [withdrawal
\n of Dynegy recommendation to shareholders]; or<\/p>\n
(C) by Dynegy pursuant to Section 9.4(c) [fiduciary
\n out];<\/p>\n
then Dynegy shall pay Enron a fee of $350 million at the time of such
\ntermination (or, in the case of clause (A)(1), at the time such clause is
\nsatisfied, and such fee shall be reduced by any prior payment under Section
\n9.5(c)) in cash by wire transfer to an account designated by Enron.<\/p>\n
(ii) If this Agreement is terminated by Dynegy pursuant to
\nSection 9.4(c) and in accordance with the terms thereof (including the payment
\nof the fee referred to <\/p>\n
54<\/p>\n
therein), no fee additional to the fee specified in Section 9.4(c) shall be
\npayable by Dynegy to Enron.<\/p>\n
(c) If this Agreement is terminated by Enron or Dynegy
\npursuant to Section 9.2(b) other than in circumstances covered by Section 9.5(a)
\nrequiring the payment of the fee specified therein at the time of termination,
\nthen Enron shall pay Dynegy a fee of $10 million to reimburse it for its costs
\nand expenses incurred in connection with this transaction. If this Agreement is
\nterminated by Enron or Dynegy pursuant to Section 9.2(c), other than in
\ncircumstances covered by Section 9.5(b) requiring the payment of the fee
\nspecified therein at the time of termination, then Dynegy shall pay Enron a fee
\nof $10 million to reimburse it for its costs and expenses incurred in connection
\nwith this transaction.<\/p>\n
(d) In the event of termination of this Agreement and the
\nabandonment of the Mergers pursuant to this Article 9, all obligations of the
\nparties hereto shall terminate, except the obligations of the parties pursuant
\nto this Section 9.5, the last sentence of Section 7.6 and Section 7.12 and
\nSection 7.15 and except for the provisions of Sections 10.2, 10.3, 10.4, 10.6,
\n10.8, 10.9, 10.11, 10.12, 10.13 and 10.14, provided that nothing in this Section
\n9.5(d) shall relieve any party from any liability for any willful and material
\nbreach by such party of any of its representations or warranties set forth in
\nthis Agreement or any material breach by such party of any of its covenants or
\nagreements set forth in this Agreement and, subject to Section 10.14, all rights
\nand remedies of such nonbreaching party under this Agreement in the case of any
\nsuch breach, at law or in equity, shall be preserved. The Confidentiality
\nAgreement shall survive any termination of this Agreement, and the provisions of
\nsuch Confidentiality Agreement shall apply to all information and material
\ndelivered by any party hereunder.<\/p>\n
Section 9.6 Extension; Waiver. At any time prior to the
\nEffective Time, each party may by action taken by its Board of Directors, to the
\nextent legally allowed, (a) extend the time for the performance of any of the
\nobligations or other acts of the other parties hereto, (b) waive any
\ninaccuracies in the representations and warranties made to such party contained
\nherein or in any document delivered pursuant hereto and (c) waive compliance
\nwith any of the agreements or conditions for the benefit of such party contained
\nherein. Any agreement on the part of a party hereto to any such extension or
\nwaiver shall be valid only if set forth in an instrument in writing signed on
\nbehalf of such party.<\/p>\n
ARTICLE 10<\/p>\n
GENERAL PROVISIONS<\/p>\n
Section 10.1 Nonsurvival of Representations, Warranties and
\nAgreements. All representations, warranties and agreements in this Agreement or
\nin any instrument delivered pursuant to this Agreement shall not survive the
\nMergers; provided, however, that the agreements contained in Article 4 and in
\nSections 3.1, 3.2, 7.11, 7.12, 7.13, 7.14 and 7.16 and this Article 10 and the
\nagreements delivered pursuant to this Agreement shall survive the Mergers.<\/p>\n
Section 10.2 Notices. Except as otherwise provided herein, any
\nnotice required to be given hereunder shall be sufficient if in writing, and
\nsent by facsimile transmission or by courier service (with proof of service), or
\nhand delivery, addressed as follows:<\/p>\n
55<\/p>\n
(a) if to Enron:<\/p>\n
Enron Corp.
\n 1400 Smith Street
\n Houston, Texas 77002
\n Attention: General Counsel
\n Facsimile (713) 853-3129<\/p>\n
with a copy to:<\/p>\n
Vinson & Elkins L.L.P.
\n 1001 Fannin, Suite 2300
\n Houston, Texas 77002-6760
\n Attention: William E. Joor, III, Esq.
\n Scott N. Wulfe, Esq.
\n Facsimile: (713) 758-2346<\/p>\n
(b) if to Dynegy, Newco, Dynegy Merger Sub or Enron Merger
\nSub:<\/p>\n
Dynegy Inc.
\n 1000 Louisiana, Suite 5800
\n Houston, Texas 77002
\n Attention: General Counsel
\n Facsimile (713) 507-6808<\/p>\n
with a copy to:<\/p>\n
Baker Botts L.L.P.
\n One Shell Plaza
\n 910 Louisiana
\n Houston, Texas 77002-4995
\n Attention: R. Joel Swanson, Esq.
\n J. David Kirkland, Jr., Esq.
\n Facsimile: (713) 229-1522<\/p>\n
or to such other address as any party shall specify by written notice so given,
\nand such notice shall be deemed to have been delivered as of the date so
\ntelecommunicated, personally delivered or mailed.<\/p>\n
Section 10.3 Assignment; Binding Effect; Benefit. Neither this
\nAgreement nor any of the rights, interests or obligations hereunder shall be
\nassigned by any of the parties hereto (whether by operation of law or otherwise)
\nwithout the prior written consent of the other parties. Subject to the preceding
\nsentence, this Agreement shall be binding upon and shall inure to the benefit of
\nthe parties hereto and their respective successors and assigns. Notwithstanding
\nanything contained in this Agreement to the contrary, except for the provisions
\nof Article 4, Section 7.13 and Section 9.5(a) and except as provided in any
\nagreements delivered pursuant hereto (collectively, the “Third-Party
\nProvisions”), nothing in this Agreement, expressed or implied, is intended to
\nconfer on any person other than the parties hereto or their respective heirs,<\/p>\n
56<\/p>\n
successors, executors, administrators and assigns any rights, remedies,
\nobligations or liabilities under or by reason of this Agreement. The Third-Party
\nProvisions may be enforced by the beneficiaries thereof (including ChevronTexaco
\nwith respect to Section 9.5(a)). Notwithstanding the foregoing and any other
\nprovision of this Agreement, and in addition to any other required action of the
\nBoard of Directors of Newco, a majority of the Former Enron Directors (or their
\nsuccessors) serving on the Board of Directors of Newco shall be entitled during
\nthe one-year period commencing at the Effective Time to enforce the provisions
\nof Section 7.16 on behalf of Enron’s officers, directors and employees, as the
\ncase may be. Such directors’ rights and remedies under the preceding sentence
\nare cumulative and are in addition to any other rights and remedies that they
\nmay have at law or in equity, but in no event shall this Section 10.3 be deemed
\nto impose any additional duties on any such directors. Newco shall pay, at the
\ntime they are incurred, all reasonable costs, fees and expenses of such
\ndirectors incurred in connection with the assertion of any rights on behalf of
\nthe persons set forth above pursuant to this Section 10.3.<\/p>\n
Section 10.4 Entire Agreement. This Agreement, the exhibits to
\nthis Agreement, the Enron Disclosure Letter, the Dynegy Disclosure Letter and
\nany documents delivered by the parties in connection herewith constitute the
\nentire agreement among the parties with respect to the subject matter hereof and
\nsupersede all prior agreements and understandings among the parties with respect
\nthereto, except that the Confidentiality Agreement shall continue in effect. No
\naddition to or modification of any provision of this Agreement shall be binding
\nupon any party hereto unless made in writing and signed by all parties hereto.<\/p>\n
Section 10.5 Amendments. This Agreement may be amended by the
\nparties hereto, by action taken or authorized by their Boards of Directors, at
\nany time before or after approval of matters presented in connection with the
\nMergers by the shareholders of Enron or Dynegy, but after any such shareholder
\napproval, no amendment shall be made which by law requires the further approval
\nof shareholders without obtaining such further approval. This Agreement may not
\nbe amended except by an instrument in writing signed on behalf of each of the
\nparties hereto.<\/p>\n
Section 10.6 Governing Law. This Agreement shall be governed
\nby and construed in accordance with the laws of the State of Texas, without
\nregard to its rules of conflicts of laws, except to the extent the laws of the
\nState of Illinois are required to be applicable to the Dynegy Merger or the laws
\nof the State of Oregon are required to be applicable to the Enron Merger.<\/p>\n
Section 10.7 Counterparts. This Agreement may be executed by
\nthe parties hereto in separate counterparts, each of which when so executed and
\ndelivered shall be an original, but all such counterparts shall together
\nconstitute one and the same instrument. Each counterpart may consist of a number
\nof copies hereof each signed by less than all, but together signed by all of the
\nparties hereto.<\/p>\n
Section 10.8 Headings. Headings of the Articles and Sections
\nof this Agreement are for the convenience of the parties only and shall be given
\nno substantive or interpretative effect whatsoever. <\/p>\n
57<\/p>\n
Section 10.9 Interpretation. In this Agreement:<\/p>\n
(a) Unless the context otherwise requires, words describing
\n the singular number shall include the plural and vice versa, words
\n denoting any gender shall include all genders, and words denoting
\n natural persons shall include corporations and partnerships and vice
\n versa.<\/p>\n
(b) The phrase “to the knowledge of” and similar phrases
\n relating to knowledge of Enron or Dynegy, as the case may be, shall
\n mean the actual knowledge of its executive officers.<\/p>\n
(c) “Material Adverse Effect” with respect to any person shall
\n mean a material adverse effect on or change in the business, assets,
\n liabilities, financial condition or results of operations of such
\n person and its Subsidiaries, taken as a whole, or the ability of the
\n party to consummate the transactions contemplated by this Agreement or
\n fulfill the conditions to closing. “Enron Material Adverse Effect” and
\n “Dynegy Material Adverse Effect” mean a Material Adverse Effect with
\n respect to Enron and Dynegy, respectively. For purposes of determining
\n whether an Enron Material Adverse Effect has occurred from and after
\n the date of this Agreement, to the extent that the liabilities and
\n expenses from and after the date hereof associated with all pending or
\n threatened litigation matters, in the reasonable judgment of Dynegy
\n exercised in good faith after consultation with outside counsel
\n experienced in such types of litigation, exceed, or are reasonably
\n likely to exceed, $2 billion in the aggregate (net of proceeds of
\n insurance and litigation reserves reflected on the September 30, 2001
\n Balance Sheet), the amount of such excess over $2 billion will be taken
\n into account in determining whether an Enron Material Adverse Effect
\n has occurred, and, in any event, if the amount of such excess exceeds,
\n or is reasonably likely to exceed, $1.5 billion, an Enron Material
\n Adverse Effect will be deemed to have occurred; provided, however, that
\n such $1.5 billion threshold shall have no implication, or be used, for
\n purposes of interpreting any other provision or sentence of this
\n Agreement, including, without limitation, interpreting whether an Enron
\n Material Adverse Effect has occurred with respect to any matters other
\n than litigation matters.<\/p>\n
(d) The term “Subsidiary,” when used with respect to any
\n party, shall mean any corporation or other organization (including a
\n limited liability company), whether incorporated or unincorporated, of
\n which such party directly or indirectly owns at least 50% of the
\n securities or other interests having by their terms ordinary voting
\n power to elect at least 50% of the board of directors or others
\n performing similar functions with respect to such corporation or other
\n organization or, except with respect to Article 7, any organization of
\n which such party or a Subsidiary of such party is a general partner or
\n managing member.<\/p>\n
Section 10.10 Waivers. Except as provided in this Agreement,
\nno action taken pursuant to this Agreement, including, without limitation, any
\ninvestigation by or on behalf of any party, shall be deemed to constitute a
\nwaiver by the party taking such action of compliance with any representations,
\nwarranties, covenants or agreements contained in this Agreement. The waiver by
\nany party hereto of a breach of any provision hereunder shall not operate or be<\/p>\n
58<\/p>\n
construed as a waiver of any prior or subsequent breach of the same or any other
\nprovision hereunder.<\/p>\n
Section 10.11 Incorporation of Disclosure Letters and
\nExhibits. The Enron Disclosure Letter, the Dynegy Disclosure Letter and all
\nexhibits attached hereto and referred to herein are hereby incorporated herein
\nand made a part hereof for all purposes as if fully set forth herein.<\/p>\n
Section 10.12 Severability. Any term or provision of this
\nAgreement which is invalid or unenforceable in any jurisdiction shall, as to
\nthat jurisdiction, be ineffective to the extent of such invalidity or
\nunenforceability without rendering invalid or unenforceable the remaining terms
\nand provisions of this Agreement or affecting the validity or enforceability of
\nany of the terms or provisions of this Agreement in any other jurisdiction. If
\nany provision of this Agreement is so broad as to be unenforceable, the
\nprovision shall be interpreted to be only so broad as is enforceable.<\/p>\n
Section 10.13 Enforcement of Agreement. The parties hereto
\nagree that irreparable damage would occur in the event that any of the
\nprovisions of this Agreement were not performed in accordance with its specific
\nterms or was otherwise breached. It is accordingly agreed that the parties shall
\nbe entitled to an injunction or injunctions to prevent breaches of this
\nAgreement and to enforce specifically the terms and provisions hereof, this
\nbeing in addition to any other remedy to which they are entitled at law or in
\nequity.<\/p>\n
Section 10.14 No Special Damages. IN NO EVENT SHALL ANY PARTY
\nBE LIABLE IN RESPECT OF THIS AGREEMENT FOR EXEMPLARY, SPECIAL OR PUNITIVE
\nDAMAGES.<\/p>\n
59<\/p>\n
IN WITNESS WHEREOF, the parties have executed this Agreement
\nand caused the same to be duly delivered on their behalf on the day and year
\nfirst written above.<\/p>\n
DYNEGY INC.<\/p>\n
By: \/s\/ CHARLES L. WATSON
\n ————————————
\n Charles L. Watson
\n Chairman of the Board and Chief
\n Executive Officer<\/p>\n
STANFORD, INC.<\/p>\n
By: \/s\/ CHARLES L. WATSON
\n ————————————
\n Charles L. Watson
\n President<\/p>\n
SORIN, INC.<\/p>\n
By: \/s\/ CHARLES L. WATSON
\n ————————————
\n Charles L. Watson
\n President<\/p>\n
BADIN, INC.<\/p>\n
By: \/s\/ CHARLES L. WATSON
\n ————————————
\n Charles L. Watson
\n President<\/p>\n
ENRON CORP.<\/p>\n
By: \/s\/ KENNETH L. LAY
\n ————————————
\n Kenneth L. Lay
\n Chairman of the Board and Chief
\n Executive Officer<\/p>\n
60<\/p>\n
EXHIBIT 2.1(a)<\/p>\n
RESTATED CERTIFICATE OF INCORPORATION<\/p>\n
OF<\/p>\n
STANFORD, INC.<\/p>\n
Under Sections 242 and 245 of the
\n Delaware General Corporation Law<\/p>\n
Stanford, Inc. (the “Corporation”), a corporation organized and
\nexisting under and by virtue of the General Corporation Law of the State of
\nDelaware (the “DGCL”), hereby certifies that:<\/p>\n
1. The current name of the Corporation is Stanford, Inc. The original
\nCertificate of Incorporation of the Corporation (as heretofore amended, the
\n“Certificate of Incorporation”) was filed with the Secretary of State of the
\nState of Delaware on November 2, 2001.<\/p>\n
2. The Board of Directors of the Corporation duly adopted resolutions
\nproposing and declaring advisable the amendments to the Certificate of
\nIncorporation this Restated Certificate of Incorporation is effecting, and the
\nCorporation’s sole stockholder has duly adopted those amendments and this
\nRestated Certificate of Incorporation, all in accordance with the provisions of
\nSections 228, 242 and 245 of the DGCL.<\/p>\n
3. This Restated Certificate of Incorporation (hereinafter, this
\nRestated Certificate of Incorporation, as it may be further amended or restated
\nfrom time to time, is referred to as this “Restated Certificate of
\nIncorporation”) restates and amends the Certificate of Incorporation in its
\nentirety as follows:<\/p>\n
RESTATED CERTIFICATE OF INCORPORATION<\/p>\n
FIRST: The name of the Corporation is Stanford, Inc. (hereinafter, the
\n“Corporation”).<\/p>\n
SECOND: The address of the registered office of the Corporation in the
\nState of Delaware is Corporation Trust Center, 1209 Orange Street, City of
\nWilmington, County of New Castle, Zip Code 19801, and the name of the registered
\nagent of the Corporation at such address is The Corporation Trust Company.<\/p>\n
THIRD: The purpose of the Corporation is to engage in any lawful act or
\nactivity for which corporations may be organized under the General Corporation
\nLaw of the State of Delaware (the “DGCL”).<\/p>\n
FOURTH: The aggregate number of shares of capital stock that the
\nCorporation shall have authority to issue is 3,000,000,000, of which
\n2,000,000,000 shares are <\/p>\n
classified as Class A common stock, no par value (“Class A Common Stock”), and
\n800,000,000 shares are classified as Class B common stock, no par value (“Class
\nB Common Stock” and, together with the Class A Common Stock, the “Common
\nStock”), and 200,000,000 shares are classified as preferred stock, no par value
\n(“Preferred Stock”).<\/p>\n
The Corporation may issue shares of any class or series of its capital
\nstock from time to time for such consideration and for such corporate purposes
\nas the Board of Directors of the Corporation (the “Board of Directors”) may from
\ntime to time determine.<\/p>\n
The following is a statement of the powers, preferences and rights, and
\nthe qualifications, limitations or restrictions, of the Preferred Stock, the
\nClass A Common Stock and the Class B Common Stock:<\/p>\n
DIVISION A. PREFERRED STOCK<\/p>\n
The shares of Preferred Stock may be divided into and issued in one or
\nmore series, the relative rights, powers and preferences of which series may
\nvary in any and all respects. The Board of Directors is expressly vested with
\nthe authority to fix, by resolution or resolutions adopted prior to and
\nproviding for the issuance of any shares of each particular series of Preferred
\nStock and incorporate in a certificate of designations filed with the Secretary
\nof State of the State of Delaware, the designations, powers, preferences,
\nrights, qualifications, limitations and restrictions thereof, of the shares of
\neach series of Preferred Stock, to the extent not provided for in this Restated
\nCertificate of Incorporation, and with the authority to increase or decrease the
\nnumber of shares within each such series; provided, however, that the Board of
\nDirectors may not decrease the number of shares within a series of Preferred
\nStock below the number of shares within such series that is then issued. The
\nauthority of the Board of Directors with respect to fixing the designations,
\npowers, preferences, rights, qualifications, limitations and restrictions of
\neach such series of Preferred Stock shall include, but not be limited to,
\ndetermination of the following:<\/p>\n
(1) the distinctive designation and number of shares of that series;<\/p>\n
(2) the rate of dividends (or the method of calculation thereof)
\npayable with respect to shares of that series, the dates, terms and other
\nconditions upon which such dividends shall be payable, and the relative rights
\nof priority of such dividends to dividends payable on any other class or series
\nof capital stock of the Corporation;<\/p>\n
(3) the nature of the dividend payable with respect to shares of that
\nseries as cumulative, noncumulative or partially cumulative, and if cumulative
\nor partially cumulative, from which date or dates and under what circumstances;<\/p>\n
(4) whether shares of that series shall be subject to redemption, and,
\nif made subject to redemption, the times, prices, rates, adjustments and other
\nterms and conditions of such redemption (including the manner of selecting
\nshares of that series for redemption if fewer than all shares of such series are
\nto be redeemed);<\/p>\n
(5) the rights of the holders of shares of that series in the event of
\nvoluntary or involuntary liquidation, dissolution or winding up of the
\nCorporation (which rights may be <\/p>\n
2<\/p>\n
different if such action is voluntary than if it is involuntary), including the
\nrelative rights of priority in such event as to the rights of the holders of any
\nother class or series of capital stock of the Corporation;<\/p>\n
(6) the terms, amounts and other conditions of any sinking or similar
\npurchase or other fund provided for the purchase or redemption of shares of that
\nseries;<\/p>\n
(7) whether shares of that series shall be convertible into or
\nexchangeable for shares of capital stock or other securities of the Corporation
\nor of any other corporation or entity, and, if provision be made for conversion
\nor exchange, the times, prices, rates, adjustments, and other terms and
\nconditions of such conversion or exchange;<\/p>\n
(8) the extent, if any, to which the holders of shares of that series
\nshall be entitled (in addition to any voting rights provided by law) to vote as
\na class or otherwise with respect to the election of directors or otherwise;<\/p>\n
(9) the restrictions and conditions, if any, upon the issue or reissue
\nof any additional Preferred Stock ranking on a parity with or prior to shares of
\nthat series as to dividends or upon liquidation, dissolution or winding up;<\/p>\n
(10) any other repurchase obligations of the Corporation, subject to
\nany limitations of applicable law; and<\/p>\n
(11) any other designations, powers, preferences, rights,
\nqualifications, limitations or restrictions of shares of that series.<\/p>\n
Any of the designations, powers, preferences, rights, qualifications,
\nlimitations or restrictions of any series of Preferred Stock may be dependent on
\nfacts ascertainable outside this Restated Certificate of Incorporation, or
\noutside the resolution or resolutions providing for the issue of such series of
\nPreferred Stock adopted by the Board of Directors pursuant to authority
\nexpressly vested in it by this Restated Certificate of Incorporation. Except as
\napplicable law or this Restated Certificate of Incorporation otherwise may
\nrequire, the terms of any series of Preferred Stock may be amended without
\nconsent of the holders of any other series of Preferred Stock or any class of
\ncapital stock of the Corporation.<\/p>\n
The relative powers, preferences and rights of each series of Preferred
\nStock in relation to the powers, preferences and rights of each other series of
\nPreferred Stock shall, in each case, be as fixed from time to time by the Board
\nof Directors in the resolution or resolutions adopted pursuant to the authority
\ngranted in this Division A of this Article FOURTH, and the consent, by class or
\nseries vote or otherwise, of holders of Preferred Stock of such of the series of
\nPreferred Stock as are from time to time outstanding shall not be required for
\nthe issuance by the Board of Directors of any other series of Preferred Stock,
\nwhether or not the powers, preferences and rights of such other series shall be
\nfixed by the Board of Directors as senior to, or on a parity with, the powers,
\npreferences and rights of such outstanding series, or any of them; provided,
\nhowever, that the Board of Directors may provide in such resolution or
\nresolutions adopted with respect to any series of Preferred Stock that the
\nconsent of holders of at least a majority (or such greater proportion as shall
\nbe therein fixed) of the outstanding shares of such series voting thereon shall
\nbe required for the issuance of shares of any or all other series of Preferred
\nStock.<\/p>\n
3<\/p>\n
Shares of any series of Preferred Stock shall have no voting rights
\nexcept as required by law or as provided in the relative powers, preferences and
\nrights of such series.<\/p>\n
DIVISION B. COMMON STOCK<\/p>\n
Except as otherwise set forth in this Article FOURTH, Division B, the
\nrelative powers, preferences and rights, and the qualifications, limitations and
\nrestrictions, of the Class A Common Stock and the Class B Common Stock shall be
\nidentical in all respects.<\/p>\n
1. Dividends. Subject to the rights of the holders of Preferred Stock, and
\nsubject to any other provisions of this Restated Certificate of Incorporation,
\nholders of Common Stock shall be entitled to receive such dividends and other
\ndistributions in cash, stock of any corporation (other than Common Stock) or
\nproperty of the Corporation as may be declared thereon by the Board of Directors
\nfrom time to time out of assets or funds of the Corporation legally available
\ntherefor and shall share equally on a per share basis in all such dividends and
\nother distributions. In the case of dividends or other distributions payable in
\nCommon Stock, including distributions pursuant to stock splits or divisions of
\nCommon Stock, only shares of Class A Common Stock shall be paid or distributed
\nwith respect to Class A Common Stock and only shares of Class B Common Stock
\nshall be paid or distributed with respect to Class B Common Stock. The number of
\nshares of Class A Common Stock and Class B Common Stock so distributed on each
\nshare shall be equal in number. Neither the shares of Class A Common nor the
\nshares of Class B Common Stock may be reclassified, subdivided or combined
\nunless such reclassification, subdivision or combination occurs simultaneously
\nand in the same proportion for each class.<\/p>\n
2. Voting.<\/p>\n
(a) Except as may be otherwise required by law or by the provisions of this
\nRestated Certificate of Incorporation or the Bylaws of the Company, the holders
\nof the Class B Common Stock shall vote together with the holders of the Class A
\nCommon Stock as a single class on every matter coming before any meeting of the
\nstockholders or otherwise to be acted upon by the stockholders, subject to any
\nvoting rights which may be granted to holders of any other class or series of
\nPreferred Stock. So long as any Class B Common Stock is outstanding, the
\nCorporation shall not (x) without the affirmative vote of 66 2\/3% of the shares
\nof Class A and Class B Common Stock outstanding, voting as a single class,
\neffect any amendments to this Restated Certificate of Incorporation, any
\nmergers, consolidations, reorganizations, or sales of assets requiring
\nstockholder approval under the DGCL or dispositions of all or substantially all
\nof the Corporation’s assets, or any liquidation, dissolution or winding up of
\nthe Corporation, or (y) without the affirmative vote of a majority of the shares
\nof Class B Common Stock outstanding, voting as a separate class, and the
\naffirmative vote of 66 2\/3% of the shares of Class A and Class B Common Stock,
\nvoting as a single class, amend any provision of this paragraph (a) of Section 2
\nrelating to the Common Stock.<\/p>\n
(b) The Board of Directors of the Corporation shall consist of at least
\ntwelve members and no more than fifteen members as established from time to time
\nby resolution of the Board of Directors, except that such numbers are subject to
\nautomatic adjustment as necessary, under those circumstances and during those
\ntime periods that holders of any other class or series <\/p>\n
4<\/p>\n
of the Corporation’s outstanding Preferred Stock have rights to elect members of
\nthe Board of Directors (the “Preferred Stock Directors”), as set forth in this
\nRestated Certificate of Incorporation or in the resolution of the Board of
\nDirectors establishing and designating such series and fixing and determining
\nthe relative rights and preferences thereof. So long as any shares of Class B
\nCommon Stock are outstanding, the holders of the Class B Common Stock, as such
\nholders, shall be entitled to vote as a separate class for the election of the
\ngreater of (x) three directors of the Corporation and (y) that whole number of
\ndirectors that is closest to but not less than 20% of the total number of
\ndirectors (the “Class B Directors”) and the holders of the Class A Common Stock
\nshall be entitled to vote as a separate class for the remaining directors of the
\nCorporation (the “Class A Directors”), excluding Preferred Stock Directors, if
\nany. At such time as no Class B Common Stock is outstanding, the term of all
\nClass B Directors shall immediately end.<\/p>\n
(c) For purposes of electing Class B Directors, the Board of Directors will
\nnominate such individuals as may be specified by a majority vote of the then
\nexisting Class B Directors or, if there are no Class B Directors, by holders of
\na majority of the Class B Common Stock. The remaining directors will be
\nnominated in accordance with the Corporation’s Bylaws.<\/p>\n
(d) At any meeting having as a purpose the election of directors by holders
\nof the Common Stock, the presence, in person or by proxy, of the holders of a
\nmajority of the shares of the relevant class or classes of Common Stock then
\noutstanding shall be required and be sufficient to constitute a quorum of such
\nclass or classes for the election of any director by such holders. Each director
\nshall be elected by the vote or written consent required under the DGCL of the
\nholders of such class or classes. At any such meeting or adjournment thereof,
\n(i) the absence of a quorum of such holders of an applicable class of Common
\nStock shall not prevent the election of the directors to be elected by the
\nholders of shares other than such class of Common Stock, and (ii) in the absence
\nof such quorum (either of holders of such class of Common Stock or of shares
\nother than such class of Common Stock, or both), a majority of the holders,
\npresent in person or by proxy, of the class or classes of stock which lack a
\nquorum shall have power to adjourn the meeting for the election of directors
\nwhich they are entitled to elect, from time to time, without notice other than
\nannouncement at the meeting, until a quorum shall be present. All of the holders
\nof Class A Common Stock that are entitled to vote at an election of Class A
\nDirectors shall have the right to vote, in person or by proxy, the number of
\nshares of Class A Common Stock owned by him or her for as many persons as there
\nare Class A Directors to be elected and for whose election he or she has a right
\nto vote, or to cumulate the votes by giving one candidate as many votes as the
\nnumber of such Class A Directors multiplied by the aggregate number of votes
\nshall equal, or by distributing such votes on the same principle among any
\nnumber of such candidates. All of the holders of Class B Common Stock that are
\nentitled to vote at an election of Class B Directors shall have the right to
\nvote, in person or by proxy, the number of shares of Class B Common Stock owned
\nby him or her for as many persons as there are Class B Directors to be elected
\nand for whose election he or she has a right to vote, but in no event shall he
\nor she be permitted to cumulate his or her votes for one or more Class B
\nDirectors.<\/p>\n
(e) Any vacancy in the office of a class of director may be filled by the
\nremaining directors of such class, unless such vacancy occurred because of the
\nremoval (with or without cause) of a director or all offices of a class of
\ndirectors are vacant, in which event such vacancy or vacancies shall be filled
\nby the affirmative vote of the holders of a majority of the outstanding <\/p>\n
5<\/p>\n
shares of the applicable class of Common Stock. Any or all of the directors may
\nbe removed, with or without cause, by vote or by written consent in each case in
\naccordance with Section 141 of the DGCL by the holders of the applicable class
\nof Common Stock and not otherwise. Any director elected to fill a vacancy shall
\nserve the same remaining term as that of his or her predecessor, subject,
\nhowever, to prior death, resignation, retirement, disqualification, or removal
\nfrom office.<\/p>\n
(f) Without the affirmative vote of the holders of at least 66 2\/3% of the
\noutstanding shares of the Class B Common Stock, the Corporation may not effect
\nany change in the rights, privileges or preferences of the Class B Common Stock.
\nThis provision shall not be applicable to any amendment to this Restated
\nCertificate of Incorporation or adoption of resolutions of the Board of
\nDirectors which establishes or designates one or more classes or series of
\nPreferred Stock in accordance with Article FOURTH, Division A.<\/p>\n
(g) With respect to actions by the holders of Class B Common Stock upon
\nthose matters on which such holders are entitled to vote as a separate class,
\nsuch actions may be taken without a stockholders meeting, and without any action
\nby the holders of Class A Common Stock if no approval or action by the holders
\nof Class A Common Stock is required pursuant to this Restated Certificate of
\nIncorporation either voting as a separate class or together with the holders of
\nClass B Common Stock acting as a single class, by the written consent of holders
\nof the Class B Common Stock who would be entitled to vote at a meeting those
\nshares having voting power to cast not less than the minimum number of votes
\nthat would be necessary to authorize or take such action at a meeting at which
\nall shares of Class B Common Stock entitled to vote were present and voted.
\nNotice shall be given in accordance with the applicable provisions of the DGCL
\nof the taking of corporate action without a meeting by less than unanimous
\nwritten consent to those holders of Class B Common Stock on the record date
\nwhose shares were not represented on the written consent.<\/p>\n
3. Transfer.<\/p>\n
(a) If any person holding shares of Class B Common Stock of record (a
\n“Class B Holder”) purports to transfer such shares of Class B Common Stock,
\nwhether by sale, assignment, gift, bequest or otherwise, except to a Permitted
\nTransferee, such transfer shall be deemed to constitute a request by the Class B
\nHolder for conversion of such shares and shall result in such shares being
\nconverted into Class A Common Stock as provided by Section 4 of this Article
\nFOURTH, Division B.<\/p>\n
(b) In the case of a Class B Holder acquiring record and beneficial
\nownership of the shares of Class B Common Stock in question upon initial
\nissuance by the Corporation (an “Original Holder”), a “Permitted Transferee”
\nshall mean any Affiliate (as defined below) of such Original Holder.<\/p>\n
In the case of a Class B Holder which is a Permitted Transferee of an
\nOriginal Holder, a “Permitted Transferee” shall mean:<\/p>\n
(y) any Original Holder, or<\/p>\n
(z) any Permitted Transferee of any Original Holder.<\/p>\n
6<\/p>\n
For this paragraph and Section 4 of this Article FOURTH, Division B,
\n“Affiliate” means any corporation, partnership, limited liability company or
\nother entity (each, a “Person”) that directly, or indirectly through one or more
\nintermediaries, controls, or is controlled by, or is under common control with,
\nanother Person, and includes any Person acting in concert with another Person.<\/p>\n
(c) With respect to a Class B Holder which holds shares by virtue of its
\nstatus as an Affiliate, the subsequent loss of Affiliate status shall, unless
\nwithin 15 days thereafter all shares of Class B Common Stock held by such Class
\nB Holder are transferred to an Original Holder or a Permitted Transferee of an
\nOriginal Holder, result in the automatic conversion of all of its shares of
\nClass B Common Stock into shares of Class A Common Stock, and stock certificates
\nformerly representing such shares of Class B Common Stock shall thereupon and
\nthereafter be deemed to represent shares of Class A Common Stock as provided by
\nSection 4 of this Article FOURTH, Division B.<\/p>\n
(d) Any transfer of shares of Class B Common Stock not permitted hereunder
\nshall result in the conversion of the transferee’s shares of Class B Common
\nStock into shares of Class A Common Stock as provided by Section 4 of this
\nArticle FOURTH, Division B, effective as of the date on which certificates
\nrepresenting such shares are presented for transfer on the books of the
\nCorporation or on such earlier date that the Corporation receives notice of such
\nattempted transfer. The Corporation may, in connection with preparing a list of
\nstockholders entitled to vote at any meeting of stockholders, or as a condition
\nto the transfer or the registration of shares of Class B Common Stock on the
\nCorporation’s books, require the furnishing of such affidavits or other proof as
\nit deems necessary to establish that the person is the beneficial owner of
\nshares of Class B Common Stock or is a Permitted Transferee.<\/p>\n
(e) Shares of Class B Common Stock shall be registered in the names of the
\nbeneficial owners thereof and not in “street” or “nominee” name. For this
\npurpose, a “beneficial owner” of any shares of Class B Common Stock shall mean a
\nperson who, or any entity which, possesses the powers, either singly or jointly,
\nto direct the voting or disposition of such shares. Certificates for shares of
\nClass B Common Stock shall bear the following legend:<\/p>\n
The rights, preferences and limitations of the Class B Common Stock
\n represented by this certificate are specified in and governed by the
\n Restated Certificate of Incorporation of Stanford, Inc., a Delaware
\n corporation (the “Corporation”), which has been filed with the
\n Secretary of State of the State of Delaware, and the Corporation’s
\n Bylaws. This certificate is transferable only in the circumstances
\n described and upon compliance with the conditions specified in the
\n Corporation’s Restated Certificate of Incorporation and Bylaws. A copy
\n of the Corporation’s Restated Certificate of Incorporation and Bylaws
\n is available from the Corporation without charge to the record holder
\n of this certificate upon written request to the Corporation at its
\n principal place of business or record office.<\/p>\n
7<\/p>\n
4. Conversion.<\/p>\n
(a) Each share of Class B Common Stock shall be converted at such time, in
\nsuch manner and upon such terms and conditions as provided herein into one fully
\npaid and non-assessable share of Class A Common Stock.<\/p>\n
(b) Each share of Class B Common Stock shall automatically convert into a
\nshare of Class A Common Stock (x) at such time as the holders of all Class B
\nCommon Stock cease to own in the aggregate 15% of the issued and outstanding
\nCommon Stock, or (y) at such earlier time as provided in Section 3 of this
\nArticle FOURTH, Division B. Upon automatic conversion of shares of Class B
\nCommon Stock, the Corporation shall reflect such conversion, and the issuance of
\nClass A Common Stock in connection therewith on its books and records for all
\npurposes even if certificates reflecting such converted shares of Class B Common
\nStock are not surrendered to the Corporation or its transfer agent. All shares
\nof Class B Common Stock, upon conversion thereof into Class A Common Stock,
\nshall retain their designation as Class B Common Stock and shall have the status
\nof authorized and unissued shares of Class B Common Stock; provided that if all
\nshares of Class B Common Stock outstanding are converted into shares of Class A
\nCommon Stock, then all authorized but unissued shares or treasury shares of
\nClass B Common Stock shall automatically convert into authorized but unissued or
\ntreasury shares of Class A Common Stock, as the case may be, and no further
\nshares of Class B Common Stock shall exist. Except as specifically contemplated
\nunder this Section 4, shares of Class B Common Stock may not be converted into
\nClass A Common Stock.<\/p>\n
(c) Each share of Class A Common Stock beneficially owned (within the
\nmeaning of Section 3 of this Article FOURTH, Division B) by Chevron U.S.A. Inc.,
\na Pennsylvania corporation (“Chevron”), or its Affiliates shall simultaneous
\nwith Chevron or its Affiliate acquiring such ownership automatically be
\nconverted into one fully paid and non-assessable share of Class B Common Stock;
\nprovided, however, that for purposes of any shares of Class B Common Stock so
\nissued, only Chevron will be deemed to be the Original Holder thereof for
\npurposes of the provisions of Section 3 of this Article FOURTH, Division B, and
\nprovided, further, that this provision shall not apply with respect to shares of
\nClass A Common Stock issued upon conversion of all Class B Common Stock in
\naccordance with part (x) of the first sentence of paragraph (b) of this Section
\n4, or any shares of Class A Common Stock owned by Chevron or its Affiliates,
\nafter such conversion shall have occurred. Upon automatic conversion of shares
\nof Class A Common Stock, the Corporation shall reflect such conversion and the
\nissuance of Class B Common Stock in connection therewith on its books and
\nrecords for all purposes even if certificates reflecting such converted shares
\nof Class A Common Stock are not surrendered to the Corporation for transfer. All
\nshares of Class B Common Stock shall be subject to the restrictions and
\nprovisions contained in this Restated Certificate of Incorporation. All shares
\nof Class A Common Stock, upon conversion thereof into Class B Common Stock,
\nshall retain their designation as Class A Common Stock and shall have the status
\nof authorized and unissued shares of Class A Common Stock.<\/p>\n
(d) Nothing herein shall prevent the Original Holder (or any Permitted
\nTransferee) of the Class B Common Stock and the Corporation from executing an
\nagreement allowing the Original Holder (or any Permitted Transferee), at its
\noption, to convert the Class B Common Stock into Class A Common Stock, nor the
\nconversion of any Class B Common Stock pursuant to such agreement.<\/p>\n
8<\/p>\n
(e) The Corporation will, as soon as practicable after such deposit of a
\ncertificate or certificates for Common Stock to be converted in accordance with
\nthis Section 4, issue and deliver at the office of the Corporation or of its
\ntransfer agent to the person for whose account such Common Stock was so
\nsurrendered, a certificate or certificates for the number of full shares of
\nCommon Stock into which the shares represented by the surrendered certificate
\nare converted. If surrendered certificates for Common Stock are converted only
\nin part, the Corporation will issue and deliver to the holder, without charge
\ntherefor, a new certificate or certificates representing the aggregate of the
\nunconverted shares of such class of Common Stock. The failure of the holder to
\ndeliver to the Corporation certificates representing shares of a class of Common
\nStock converted in accordance with this Section 4, shall in no way affect the
\nautomatic conversion of such shares.<\/p>\n
(f) The issuance of certificates for shares of a class of Common Stock upon
\nconversion of shares of the other class of Common Stock shall be made without
\ncharge for any issue, stamp or other similar tax in respect of such issuance;
\nprovided, however, if any such certificate is to be issued in a name other than
\nthat of the holder of the share or shares of the class of Common Stock
\nconverted, the person or persons requesting the issuance thereof shall pay to
\nthe Corporation the amount of any tax which may be payable in respect of any
\ntransfer involved in such issuance or shall establish to the satisfaction of the
\nCorporation that such tax has been paid.<\/p>\n
(g) The Corporation shall at all times reserve and keep available, solely
\nfor the purpose of issuance upon conversion of the outstanding shares of Class B
\nCommon Stock, such number of shares of Class A Common Stock as shall be issuable
\nupon the conversion of all such outstanding shares, provided that nothing
\ncontained herein shall be construed to preclude the Corporation from satisfying
\nthe obligations in respect of the conversion of the outstanding shares of Class
\nB Common Stock by delivery of shares of Class A Common Stock which are held in
\nthe treasury of the Corporation. The Corporation shall take all such corporate
\nand other actions as from time to time may be necessary to insure that all
\nshares of Class A Common Stock issuable upon conversion of shares of Class B
\nCommon Stock upon issue will be duly and validly authorized and issued, fully
\npaid and nonassessable and free of any preemptive or similar rights. In order
\nthat the Corporation may issue shares of Class A Common Stock upon conversion of
\nthe Class B Common Stock, the Corporation will endeavor to comply with all
\napplicable Federal and state securities laws and will endeavor to list such
\nshares to be issued upon conversion on such securities exchange on which the
\nClass A Common Stock is then listed.<\/p>\n
(h) The Corporation shall at all times reserve and keep available, solely
\nfor the purpose of issuance upon conversion of the outstanding shares of Class A
\nCommon Stock a number of shares of Class B Common Stock equal to 40% of the
\nnumber of outstanding shares of Class A Common Stock, provided that nothing
\ncontained herein shall be construed to preclude the Corporation from satisfying
\nthe obligations in respect of the conversion of the outstanding shares of Class
\nA Common Stock by delivery of shares of Class B Common Stock which are held in
\nthe treasury of the Corporation. The Corporation shall take all such corporate
\nand other actions as from time to time may be necessary to insure that all
\nshares of Class B Common Stock issuable upon conversion of shares of Class A
\nCommon Stock upon issue will be duly and validly authorized and issued, fully
\npaid and nonassessable and free of any preemptive or similar rights. In order
\nthat the Corporation may issue shares of Class B Common Stock upon <\/p>\n
9<\/p>\n
conversion of the Class A Common Stock, the Corporation will endeavor to comply
\nwith all applicable Federal and state securities laws.<\/p>\n
5. Distribution of Assets. In the event of any liquidation, dissolution or
\nwinding up of the Corporation, or any reduction or decrease of its capital stock
\nresulting in a distribution of assets to the holders of the Common Stock, after
\nthere shall have been paid to or set aside for the holders of the stock ranking
\nsenior to the Common Stock the full preferential amounts to which they are
\nrespectively entitled, the holders of the Common Stock shall be entitled to
\nreceive, pro rata, all of the remaining assets of the Corporation available for
\ndistribution to its stockholders.<\/p>\n
6. Entire Designations. Except as may otherwise be required by law and for
\nthe equitable rights and remedies which may otherwise be available to holders of
\nCommon Stock, the shares of Common Stock shall not have any designations,
\npreferences, limitations or relative rights, other than those specifically set
\nforth in this Restated Certificate of Incorporation.<\/p>\n
7. Headings. The headings of the various subdivisions of this Division B
\nare for convenience of reference only and shall not affect the interpretation of
\nany of the provisions of this Section.<\/p>\n
FIFTH: Directors. The business and affairs of the Corporation shall be
\nmanaged by or under the direction of the Board of Directors. In addition to the
\nauthority and powers conferred on the Board of Directors by the DGCL or by the
\nother provisions of this Restated Certificate of Incorporation, the Board of
\nDirectors is authorized and empowered to exercise all such powers and do all
\nsuch acts and things as may be exercised or done by the Corporation, subject to
\nthe provisions of the DGCL, this Restated Certificate of Incorporation and the
\nBylaws of the Corporation; provided, however, that no Bylaws hereafter adopted,
\nor any amendments thereto, shall invalidate any prior act of the Board of
\nDirectors that would have been valid if such Bylaws or amendment had not been
\nadopted.<\/p>\n
SIXTH: Action by Written Consent; Special Meetings. Except as
\ncontemplated by Section 2(g) of Article FOURTH, Division B of this Restated
\nCertificate of Incorporation, no action required to be taken or that may be
\ntaken at any annual or special meeting of the stockholders of the Corporation
\nmay be taken without a meeting, and the power of the stockholders of the
\nCorporation to consent in writing to the taking of any action by written consent
\nwithout a meeting is specifically denied. Unless otherwise provided by the DGCL,
\nby this Restated Certificate of Incorporation or by any provisions established
\npursuant to Article FOURTH hereof with respect to the rights of holders of one
\nor more outstanding series of Preferred Stock, special meetings of the
\nstockholders of the Corporation may be called at any time only by the Chairman
\nof the Board of Directors, the President, the Chief Executive Officer of the
\nCorporation, by the Board of Directors pursuant to a resolution approved by the
\naffirmative vote of at least a majority of the members of the Board of
\nDirectors, or by any holder or holders of at least 20% of the outstanding shares
\nof Common Stock entitled to vote on the matter for which the meeting is called,
\nand no such special meeting may be called by any other person or persons.<\/p>\n
SEVENTH: No director of the Corporation shall be personally liable to
\nthe Corporation or any of its stockholders for monetary damages for breach of
\nfiduciary duty as a <\/p>\n
10<\/p>\n
director of the Corporation; provided, however, that this Article SEVENTH shall
\nnot eliminate or limit the liability of such a director (1) for any breach of
\nsuch director’s duty of loyalty to the Corporation or its stockholders, (2) for
\nacts or omissions not in good faith or which involve intentional misconduct or a
\nknowing violation of law, (3) under Section 174 of the DGCL, as the same exists
\nor as such provision may hereafter be amended, supplemented or replaced, or (4)
\nfor any transactions from which such director derived an improper personal
\nbenefit. If the DGCL is amended after the filing of this Restated Certificate of
\nIncorporation to authorize corporate action further eliminating or limiting the
\npersonal liability of directors, then the liability of a director of the
\nCorporation, in addition to the limitation on personal liability provided
\nherein, shall be limited to the fullest extent permitted by such law, as so
\namended. Any repeal or modification of this Article SEVENTH by the stockholders
\nof the Corporation shall be prospective only, and shall not adversely affect any
\nlimitation on the personal liability of a director of the Corporation existing
\nat the time of such repeal or modification.<\/p>\n
EIGHTH: Subject to the provisions of this Restated Certificate of
\nIncorporation, the Bylaws may be altered, amended or repealed, and new Bylaws
\nmay be adopted, by the board of directors; provided that no amendment or repeal
\nof (a) the last sentence of Section 3 of Article III of the Bylaws, and (b)
\nSections 6, 7(b), 7(c), 9 and 10 of Article III of the Bylaws, nor the adoption
\nof any provision of the Bylaws which would substantially and adversely affect
\nthe rights of the holders of Class B Common Stock, shall be effective except
\nupon the affirmative vote of a majority of the shares of Class B Common Stock
\noutstanding, voting as a separate class.<\/p>\n
IN WITNESS WHEREOF, the Corporation has caused the Restated Certificate
\nof Incorporation to be signed and attested by its duly authorized officers, this
\n____ day of _______, 2001.<\/p>\n
STANFORD, INC.<\/p>\n
By:
\n ————————————-
\n Name:
\n ——————————–
\n Title:
\n ——————————-<\/p>\n
11<\/p>\n
EXHIBIT 2.1(b)<\/p>\n
AMENDED AND RESTATED BYLAWS
\n OF
\n STANFORD, INC.<\/p>\n
Adopted and Amended by Resolution of the Board of Directors on<\/p>\n
__________ ___, 2001<\/p>\n
ARTICLE I<\/p>\n
CAPITAL STOCK<\/p>\n
Section 1. Share Ownership. Shares for the capital stock of the Company
\nshall be certificated; provided, however, that the Board of Directors of the
\nCompany may provide by resolution or resolutions that some or all of any or all
\nclasses or series of the Company’s stock may be uncertificated shares. Owners of
\nshares of the capital stock of the Company shall be recorded in the share
\ntransfer records of the Company and ownership of such shares shall be evidenced
\nby a certificate or book entry notation in the share transfer records of the
\nCompany. Any certificates representing such shares shall be signed by the
\nChairman of the Board, if there is one, the President or a Vice President and by
\nthe Treasurer, an Assistant Treasurer, the Corporate Secretary or an Assistant
\nCorporate Secretary and shall be sealed with the seal of the Company, which
\nsignatures and seal may be facsimiles. In case any officer who has signed or
\nwhose facsimile signature has been placed upon such certificate shall have
\nceased to be such officer before such certificate is issued, it may be issued by
\nthe Company with the same effect as if such person were such officer at the date
\nof its issuance.<\/p>\n
Section 2. Stockholders of Record. The Board of Directors of the
\nCompany may appoint one or more transfer agents or registrars of any class of
\nstock or other security of the Company. The Company may be its own transfer
\nagent if so appointed by the Board of Directors. The Company shall be entitled
\nto treat the holder of record of any shares of the Company as the owner thereof
\nfor all purposes, and shall not be bound to recognize any equitable or other
\nclaim to, or interest in, such shares or any rights deriving from such shares,
\non the part of any other person, including (but without limitation) a purchaser,
\nassignee or transferee, unless and until such other person becomes the holder of
\nrecord of such shares, whether or not the Company shall have either actual or
\nconstructive notice of the interest of such other person.<\/p>\n
Section 3. Transfer of Shares. The shares of the capital stock of the
\nCompany shall be transferable in the share transfer records of the Company by
\nthe holder of record thereof, or his duly authorized attorney or legal
\nrepresentative in accordance with the Restated Certificate of Incorporation of
\nthe Company and applicable law, upon presentation to the Company or to its
\ntransfer agent (if any) of a duly executed assignment and other evidence of
\nauthority to transfer, or proper evidence of succession, and, if the shares are
\nrepresented by a certificate, a duly endorsed certificate or certificates for
\nshares surrendered for cancellation, and with such proof of the authenticity of
\nthe signatures as the corporation or its transfer agent may reasonably require.
\nAll certificates representing shares surrendered for transfer, properly
\nendorsed, shall be canceled and new certificates for a like number of shares
\nshall be issued therefor. In the case of lost, <\/p>\n
stolen, destroyed or mutilated certificates representing shares for which the
\nCompany has been requested to issue new certificates, new certificates or other
\nevidence of such new shares may be issued upon such conditions as may be
\nrequired by the Board of Directors or the Corporate Secretary or an Assistant
\nCorporate Secretary for the protection of the Company and any transfer agent or
\nregistrar. Uncertificated shares shall be transferred in the share transfer
\nrecords of the Company upon the written instruction originated by the
\nappropriate person to transfer the shares.<\/p>\n
Section 4. Stockholders of Record and Fixing of Record Date. Except as
\notherwise required by applicable law, for the purpose of determining
\nstockholders entitled to notice of or to vote at any meeting of stockholders or
\nany adjournment thereof, or entitled to receive a distribution by the Company
\n(other than a distribution involving a purchase or redemption by the Company of
\nany of its own shares) or a share dividend, or in order to make a determination
\nof stockholders for any other proper purpose, the Board of Directors may fix in
\nadvance a record date for any such determination of stockholders, such date to
\nbe not more than sixty days, and in the case of a meeting of stockholders not
\nless than ten days, prior to the date on which the particular action requiring
\nsuch determination of stockholders is to be taken. If no record date is fixed
\nfor the determination of stockholders entitled to notice of or to vote at a
\nmeeting of stockholders, or stockholders entitled to receive a distribution
\n(other than a distribution involving a purchase or redemption by the Company of
\nany of its own shares) or a share dividend, the day next preceding the date on
\nwhich notice of the meeting is mailed or the date on which the resolution of the
\nBoard of Directors declaring such distribution or share dividend is adopted, as
\nthe case may be, shall be the record date for such determination of
\nstockholders. When a determination of stockholders entitled to vote at any
\nmeeting of stockholders has been made as herein provided, such determination
\nshall apply to any adjournment thereof except where the determination has been
\nmade through the closing of the share transfer records and the stated period of
\nclosing has expired.<\/p>\n
ARTICLE II<\/p>\n
Meetings of Stockholders<\/p>\n
Section 1. Place of Meetings. All meetings of stockholders shall be
\nheld at the principal office of the Company, in the City of Houston, Texas, or
\nat such other place within or without the State of Delaware as may be designated
\nby the Board of Directors or officer calling the meeting.<\/p>\n
Section 2. Annual Meeting. The annual meeting of the stockholders shall
\nbe held on such date and at such time as shall be designated from time to time
\nby the Board of Directors or as may otherwise be stated in the notice of the
\nmeeting.<\/p>\n
Section 3. Special Meetings. Special meetings of the stockholders of
\nthe Company may be called at any time only by the Chairman of the Board, if
\nthere is one, the President and Chief Executive Officer of the Company, by the
\nBoard of Directors pursuant to a resolution approved by the affirmative vote of
\nat least a majority of the members of the Board of Directors, or by any holder
\nor holders of at least 20% of the outstanding shares entitled to vote on the
\nmatter for which the meeting is called, and no such special meeting may be
\ncalled by any other person or persons.<\/p>\n
Page 2 of 20<\/p>\n
Section 4. Notice of Meeting. Except as otherwise required by
\napplicable law, written or printed notice of all meetings stating the place, day
\nand hour of the meeting and, in case of a special meeting, the purpose or
\npurposes for which the meeting is called, shall be delivered not less than ten
\nnor more than sixty days before the date of the meeting, either personally or by
\nmail, by or at the direction of the Chairman of the Board, if there is one, the
\nChief Executive Officer, if there is one, the President, the Corporate Secretary
\nor the officer or person calling the meeting to each stockholder of record
\nentitled to vote at such meetings. If mailed, such notice shall be deemed to be
\ndelivered when deposited in the United States mail, postage prepaid, addressed
\nto the stockholder at his address as it appears on the share transfer records of
\nthe Company, with postage thereon prepaid.<\/p>\n
Section 5. Voting List. The officer or agent having charge of the share
\ntransfer records for shares of the Company shall make, at least ten days before
\neach meeting of stockholders, a complete list of the stockholders entitled to
\nvote at such meeting or any adjournment thereof, arranged in alphabetical order,
\nwith the address of and the number of shares held by each, which list, for a
\nperiod of ten days prior to such meeting, shall be kept on file at the principal
\nplace of business of the Company and shall be subject to inspection by any
\nstockholder at any time during usual business hours. Such list shall also be
\nproduced and kept open at the time and place of the meeting and shall be subject
\nto the inspection of any stockholder during the whole time of the meeting. The
\noriginal share transfer records shall be prima facie evidence as to who are the
\nstockholders entitled to examine such list or to vote at any meeting of
\nstockholders. Failure to comply with any requirements of this Section 5 shall
\nnot affect the validity of any action taken at such meeting.<\/p>\n
Section 6. Quorum and Vote of Stockholders. Except as otherwise
\nprovided by law, the Restated Certificate of Incorporation of the Company or
\nthese Bylaws, the holders of a majority of shares entitled to vote, represented
\nin person or by proxy, shall constitute a quorum at a meeting of stockholders,
\nbut, if a quorum is not represented, a majority in interest of those represented
\nmay adjourn the meeting from time to time. With respect to each matter other
\nthan the election of directors as to which no other voting requirement is
\nspecified by law, the Restated Certificate of Incorporation of the Company or in
\nthis Section 6, the affirmative vote of the holders of a majority of the shares
\nentitled to vote on that matter and represented in person or by proxy at a
\nmeeting at which a quorum is present shall be the act of the stockholders. With
\nrespect to a matter submitted to a vote of the stockholders as to which a
\nstockholder approval requirement is applicable under the stockholder approval
\npolicy of the New York Stock Exchange, Rule 16b-3 under the Securities Exchange
\nAct of 1934, as amended (the “Exchange Act”), or any provision of the Internal
\nRevenue Code, in each case for which no higher voting requirement is specified
\nby law, the Restated Certificate of Incorporation of the Company or these
\nBylaws, the affirmative vote of the holders of a majority of the shares entitled
\nto vote on, and voted for or against, that matter at a meeting at which a quorum
\nis present shall be the act of the stockholders, provided that approval of such
\nmatter shall also be conditioned on any more restrictive requirement of such
\nstockholder approval policy, Rule 16b-3 or Internal Revenue Code provision, as
\napplicable, being satisfied. With respect to the approval of independent public
\naccountants (if submitted for a vote of the stockholders), the affirmative vote
\nof the holders of a majority of the shares entitled to vote on, and voted for or
\nagainst, that matter at a meeting of stockholders at which a quorum is present
\nshall be the act of the stockholders.<\/p>\n
Page 3 of 20<\/p>\n
Section 7. Presiding Officer and Conduct of Meetings. The Chairman of
\nthe Board, if there is one, or in his absence, the Chief Executive Officer, if
\nthere is one, or in his absence, the President shall preside at all meetings of
\nthe stockholders or, if such officers are not present at a meeting, by such
\nother person as the Board of Directors shall designate or if no such person is
\ndesignated by the Board of Directors, the most senior officer of the Company
\npresent at the meeting. The Corporate Secretary of the Company, if present,
\nshall act as secretary of each meeting of stockholders; if he is not present at
\na meeting, then such person as may be designated by the presiding officer shall
\nact as secretary of the meeting. Meetings of stockholders shall follow
\nreasonable and fair procedure. Subject to the foregoing, the conduct of any
\nmeeting of stockholders and the determination of procedure and rules shall be
\nwithin the absolute discretion of the officer presiding at such meeting (the
\n“Chairman of the Meeting”), and there shall be no appeal from any ruling of the
\nChairman of the Meeting with respect to procedure or rules. Accordingly, in any
\nmeeting of stockholders or part thereof, the Chairman of the Meeting shall have
\nthe sole power to determine appropriate rules or to dispense with theretofore
\nprevailing rules. Without limiting the foregoing, the following rules shall
\napply:<\/p>\n
(a) If disorder should arise which prevents continuation of
\n the legitimate business of meeting, the Chairman of the Meeting may
\n announce the adjournment of the meeting; and upon so doing, the meeting
\n shall be immediately adjourned.<\/p>\n
(b) The Chairman of the Meeting may ask or require that anyone
\n not a bona fide stockholder or proxy leave the meeting.<\/p>\n
(c) A resolution or motion proposed by a stockholder shall
\n only be considered for vote of the stockholders if it meets the
\n criteria of Article II, Section 8 (Proper Business–Annual Meeting of
\n Stockholders) or Article II, Section 9 (Proper Business–Special
\n Meeting of Stockholders), as the case may be. The Chairman of the
\n Meeting may propose any resolution or motion for vote of the
\n stockholders.<\/p>\n
(d) The order of business at all meetings of stockholders
\n shall be determined by the Chairman of the Meeting.<\/p>\n
(e) The Chairman of the Meeting may impose any reasonable
\n limits with respect to participation in the meeting by stockholders,
\n including, but not limited to, limits on the amount of time taken up by
\n the remarks or questions of any stockholder, limits on the number of
\n questions per stockholder and limits as to the subject matter and
\n timing of questions and remarks by stockholders.<\/p>\n
(f) Before any meeting of stockholders, the Board of Directors
\n (i) shall appoint three persons other than nominees for office to act
\n as inspectors of election at the meeting or its adjournment and (ii)
\n may designate one or more alternate inspectors to replace any inspector
\n who fails to act. If no inspector or alternate is able to act at a
\n meeting of stockholders, the Chairman of the Meeting shall appoint one
\n or more, up to a maximum of three, inspectors of election to act at the
\n meeting of the stockholders.<\/p>\n
Page 4 of 20<\/p>\n
The duties of the inspectors shall be to:<\/p>\n
(i) determine the number of shares outstanding and the
\n voting power of each such share, the shares represented at the
\n meeting, the existence of a quorum, and the authenticity,
\n validity and effect of proxies and ballots;<\/p>\n
(ii) receive votes or ballots;<\/p>\n
(iii) hear and determine all challenges and questions in
\n any way arising in connection with the vote and retain for a
\n reasonable period a record of the disposition of any
\n challenges made to any determination by the inspectors;<\/p>\n
(iv) count and tabulate all votes and ballots;<\/p>\n
(v) report and certify to the Board of Directors the
\n results based on the information assembled by the inspectors;
\n and<\/p>\n
(vi) do any other acts that may be proper to conduct the
\n election or vote with fairness to all stockholders.<\/p>\n
(g) Each inspector of election, before entering upon the
\n discharge of the duties of inspector, shall take and sign an oath
\n faithfully to execute the duties of inspector with strict impartiality
\n and according to the best of such inspector’s ability.<\/p>\n
(h) In determining the validity and counting of proxies and
\n ballots, the inspectors of election shall be limited to an examination
\n of the items specifically allowed by Section 231(d) of the DGCL.<\/p>\n
All determinations of the Chairman of the Meeting shall be conclusive
\nunless a matter is determined otherwise upon motion duly adopted by the
\naffirmative vote of the holders of at least 662\/3 % of the voting power of the
\nshares of capital stock of the Company entitled to vote in the election of
\ndirectors held by stockholders present in person or represented by proxy at such
\nmeeting.<\/p>\n
Section 8. Proper Business–Annual Meeting of Stockholders. At any
\nannual meeting of stockholders, only such business shall be conducted as shall
\nbe a proper subject for the meeting and shall have been properly brought before
\nthe meeting. To be properly brought before an annual meeting of stockholders,
\nbusiness (other than business relating to any nomination of directors, which is
\ngoverned by Article III, Section 3 of these Bylaws) must (a) be specified in the
\nnotice of such meeting (or any supplement thereto) given by or at the direction
\nof the Board of Directors (or any duly authorized committee thereof), (b)
\notherwise be properly brought before the meeting by or at the direction of the
\nChairman of the Meeting or the Board of Directors (or any duly authorized
\ncommittee thereof) or (c) otherwise (i) be properly requested to be brought
\nbefore the meeting by a stockholder of record entitled to vote in the election
\nof directors generally, in compliance with the provisions of this Section 8 and
\n(ii) constitute a proper subject to be brought before such meeting. For business
\nto be properly brought before an annual meeting of stockholders, any stockholder
\nwho intends to bring any matter (other than a matter relating to any nomination
\nof directors, which is governed by Article III, Section 3 of these Bylaws)
\nbefore an annual meeting of stockholders and is entitled to vote on such matter
\nmust deliver written notice of such stockholder’s intent to bring such matter
\nbefore the annual <\/p>\n
Page 5 of 20<\/p>\n
meeting of stockholders, either by personal delivery or by United States mail,
\npostage prepaid, to the Corporate Secretary of the Company. Such notice must be
\nreceived by the Corporate Secretary not less than ninety days nor more than 180
\ndays prior to the date on which the immediately preceding year’s annual meeting
\nof stockholders was held. In no event shall the public disclosure of an
\nadjournment of an annual meeting of stockholders commence a new time period for
\nthe giving of a stockholder’s notice as described above.<\/p>\n
To be in proper written form, a stockholder’s notice to the Corporate
\nSecretary shall set forth as to each matter the stockholder proposes to bring
\nbefore the annual meeting of stockholders (a) a brief description of the
\nbusiness desired to be brought before the meeting and the reasons for conducting
\nsuch business at the meeting, (b) the name and address, as they appear on the
\nCompany’s books and records, of the stockholder proposing such business, (c)
\nevidence, reasonably satisfactory to the Corporate Secretary of the Company, of
\nsuch stockholder’s status as such and of the number of shares of each class of
\ncapital stock of the Company of which such stockholder is the beneficial owner,
\n(d) a description of all arrangements or understandings between such stockholder
\nand any other person or persons (including their names and the number of shares
\nbeneficially owned by them) in connection with the proposal of such business by
\nsuch stockholder and any material interest of such stockholder in such business
\nand (e) a representation that such stockholder intends to appear in person or by
\nproxy at the annual meeting to bring such business before the meeting. No
\nbusiness shall be conducted at an annual meeting of stockholders except in
\naccordance with the procedures set forth in this Section 8. Beneficial ownership
\nshall be determined in accordance with Rule 13d-3 under the Exchange Act. When
\nused in these Bylaws, “person” has the meaning ascribed to such term in Section
\n2(a)(2) of the Securities Act of 1933, as amended, as the context may require.<\/p>\n
Within thirty days after such stockholder shall have submitted the
\naforesaid items, the Corporate Secretary or the Board of Directors of the
\nCompany shall determine whether the proposed business has been properly
\nrequested to be brought before the annual meeting of stockholders and shall
\nnotify such stockholder in writing of its determination. If such stockholder
\nfails to submit a required item in the form or within the time indicated, or if
\nthe Corporate Secretary or the Board of Directors of the Company determines that
\nthe proposed business otherwise has not been properly requested, then such
\nproposal by such stockholder shall not be voted upon by the stockholders of the
\nCompany at such annual meeting of stockholders. The Chairman of the Meeting
\nshall, if the facts warrant, determine and declare to the meeting that a
\nproposal made by a stockholder of the Company pursuant to this Section 8 was not
\nmade in accordance with the procedures prescribed by these Bylaws, and if he
\nshould so determine, he shall so declare to the meeting and the defective
\nproposal shall be disregarded.<\/p>\n
Nothing in this Section 8 shall be interpreted or construed to require
\nthe inclusion of information about any such proposal in any proxy statement
\ndistributed by, at the direction of, or on behalf of the Board of Directors of
\nthe Company.<\/p>\n
Section 9. Proper Business–Special Meeting of Stockholders. At any
\nspecial meeting of stockholders, only such business shall be conducted as shall
\nhave been stated in the notice of such meeting or shall otherwise have been
\nproperly brought before the meeting by or at the direction of the Chairman of
\nthe Meeting or the Board of Directors (or any duly authorized committee
\nthereof).<\/p>\n
Page 6 of 20<\/p>\n
Section 10. Action by Written Consent. Except as set forth otherwise in
\nthe Restated Certificate of Incorporation of the Company, no action required to
\nbe taken or that may be taken at any annual or special meeting of the
\nstockholders of the Company may be taken without a meeting, and the power of the
\nstockholders of the Company to consent in writing to the taking of any action by
\nwritten consent without a meeting is specifically denied.<\/p>\n
ARTICLE III<\/p>\n
Directors<\/p>\n
Section 1. General. The business and affairs of the Company shall be
\nmanaged by or under the direction of the Board of Directors.<\/p>\n
Section 2. Number; Term. The number of directors which shall constitute
\nthe whole Board of Directors shall be fixed in the manner provided in the
\nRestated Certificate of Incorporation of the Company. Except as otherwise
\nprovided in the Restated Certificate of Incorporation of the Company or
\napplicable law, in the event of any change in the authorized number of
\ndirectors, each director then continuing to serve as such shall nevertheless
\ncontinue as a director until the expiration of his or her current term, or his
\nor her prior death, resignation, disqualification or removal. No decrease in the
\nnumber of directors constituting the Board of Directors shall shorten the term
\nof any incumbent director.<\/p>\n
Each director elected by the holders of Preferred Stock pursuant to
\nDivision A of Article FOURTH of the Restated Certificate of Incorporation of the
\nCompany (or elected by such directors to fill a vacancy) shall serve for a term
\nending upon the earlier of the election of his successor or the termination at
\nany time of a right of the holders of Preferred Stock to elect members of the
\nBoard of Directors.<\/p>\n
The above qualifications and limitations notwithstanding, each director
\nshall serve until his successor shall have been duly elected and qualified,
\nunless he or she shall resign, become disqualified, disabled or shall otherwise
\nbe removed.<\/p>\n
Section 3. Nomination of Directors. Nominations for the election of
\ndirectors may be made by the Board of Directors or by any stockholder (each, a
\n“Nominator”) entitled to vote in the election of directors. Such nominations,
\nother than those made by the Board of Directors, shall be made in writing
\npursuant to timely notice delivered to or mailed and received by the Corporate
\nSecretary of the Company as set forth in this Section 3. To be timely in
\nconnection with an annual meeting of stockholders, a Nominator’s notice, setting
\nforth the name and address of the person to be nominated, shall be delivered to
\nor mailed and received at the principal executive offices of the Company not
\nless than 90 days nor more than 180 days prior to the date on which the
\nimmediately preceding year’s annual meeting of stockholders was held. To be
\ntimely in connection with any election of a director at a special meeting of the
\nstockholders, a Nominator’s notice, setting forth the name of the person to be
\nnominated, shall be delivered to or mailed and received at the principal
\nexecutive offices of the Company not less than forty days nor more than sixty
\ndays prior to the date of such meeting; provided, however, that in the event
\nthat less than forty-seven days’ notice or prior public disclosure of the date
\nof the special meeting<\/p>\n
Page 7 of 20<\/p>\n
of the stockholders is given or made to the stockholders, the Nominator’s notice
\nto be timely must be so received not later than the close of business on the
\nseventh day following the day on which such notice of date of the meeting was
\nmailed or such public disclosure was made. At such time, the Nominator shall
\nalso submit written evidence, reasonably satisfactory to the Corporate Secretary
\nof the Company, that the Nominator is a stockholder of the Company and shall
\nidentify in writing (a) the name and address of the Nominator, (b) the number of
\nshares of each class of capital stock of the Company owned beneficially by the
\nNominator, (c) the name and address of each of the persons with whom the
\nNominator is acting in concert, (d) the number of shares of capital stock
\nbeneficially owned by each such person with whom the Nominator is acting in
\nconcert and (e) a description of all arrangements or understandings between the
\nNominator and each nominee and any other persons with whom the Nominator is
\nacting in concert pursuant to which the nomination or nominations are to be
\nmade. At such time, the Nominator shall also submit in writing (i) the
\ninformation with respect to each such proposed nominee that would be required to
\nbe provided in a proxy statement prepared in accordance with Regulation 14A
\nunder the Exchange Act and (ii) a notarized affidavit executed by each such
\nproposed nominee to the effect that, if elected as a member of the Board of
\nDirectors, he will serve and that he is eligible for election as a member of the
\nBoard of Directors. Within thirty days (or such shorter time period that may
\nexist prior to the date of the meeting) after the Nominator has submitted the
\naforesaid items to the Corporate Secretary of the Company, the Corporate
\nSecretary of the Company shall determine whether the evidence of the Nominator’s
\nstatus as a stockholder submitted by the Nominator is reasonably satisfactory
\nand shall notify the Nominator in writing of his determination. The failure of
\nthe Corporate Secretary of the Company to find such evidence reasonably
\nsatisfactory, or the failure of the Nominator to submit the requisite
\ninformation in the form or within the time indicated, shall make the person to
\nbe nominated ineligible for nomination at the meeting at which such person is
\nproposed to be nominated. The Chairman of the Meeting shall, if the facts
\nwarrant, determine and declare to the meeting that a nomination was not made in
\naccordance with the procedures prescribed by these Bylaws, and if he should so
\ndetermine, he shall so declare to the meeting and the defective nomination shall
\nbe disregarded. Beneficial ownership shall be determined in accordance with Rule
\n13d-3 under the Exchange Act.<\/p>\n
No provision of this Section 3 shall apply to the election of any Class
\nB Director (as defined in the Restated Certificate of Incorporation).<\/p>\n
Section 4. Place of Meetings and Meetings by Telephone. Meetings of the
\nBoard of Directors may be held either within or without the State of Delaware,
\nat whatever place is specified by the officer calling the meeting. Meetings of
\nthe Board of Directors may also be held by means of conference telephone or
\nother communications equipment by means of which all persons participating in
\nthe meeting can hear each other. Participation in such a meeting by means of
\nconference telephone or other communications equipment shall constitute presence
\nin person at such meeting, except where a director participates in a meeting for
\nthe express purpose of objecting to the transaction of any business on the
\nground that the meeting is not lawfully called or convened. In the absence of
\nspecific designation by the officer calling the meeting, the meetings shall be
\nheld at the principal office of the Company.<\/p>\n
Section 5. Regular Meetings. The Board of Directors shall meet each
\nyear immediately following the annual meeting of the stockholders for the
\ntransaction of such business as may <\/p>\n
Page 8 of 20<\/p>\n
properly be brought before the meeting. The Board of Directors shall also meet
\nregularly at such other times as shall be designated by the Board of Directors.
\nNo notice of any kind to either existing or newly elected members of the Board
\nof Directors for such annual or regular meetings shall be necessary.<\/p>\n
Section 6. Special Meetings. Special meetings of the Board of Directors
\nmay be held at any time upon the call of the Chairman of the Board, if there is
\none, the Chief Executive Officer, if there is one, the President or the
\nCorporate Secretary of the Company or any three of the directors then in office.
\nNotice of any special meeting shall be given: (i) at least five days prior
\nthereto if the notice is given personally or by an electronic transmission, (ii)
\nat least five business days prior thereto if the notice is given by having it
\ndelivered by a third party entity that provides delivery services in the
\nordinary course of business and guarantees delivery of the notice to the
\ndirector no later than the following business day, and (iii) at least seven
\nbusiness days prior thereto if the notice is given by mail. Notice of any
\nmeeting where any actions described in Section 7(b) of this Article III will be
\nconsidered shall be given to Class B Directors at least 30 days before the vote
\non any such action and shall set forth the material terms thereof. For this
\npurpose, the term “electronic transmission” may include, but shall not be
\nlimited to, a facsimile, email or other electronic means. Notice shall be
\ndelivered to the director’s business address and\/or telephone number and shall
\nbe deemed given upon electronic transmission, upon delivery to the third party
\ndelivery service, or upon being deposited in the United States mail with postage
\nthereon prepaid. Notice of the time, place and purpose of any special meeting
\nmay be waived in writing before or after such meeting, and shall be equivalent
\nto the giving of notice. Attendance of a director at such meeting shall also
\nconstitute a waiver of notice thereof, except where he attends for the express
\npurpose of objecting to the transaction of any business on the ground that the
\nmeeting is not lawfully called or convened. Except as otherwise provided by
\nthese Bylaws, neither the business to be transacted at, nor the purpose of, any
\nregular or special meeting of the Board of Directors need be specified in the
\nnotice or waiver of notice of such meeting.<\/p>\n
Section 7. Quorum and Voting<\/p>\n
(a) Except as otherwise provided by applicable law, a majority
\n of the number of directors fixed in the manner provided in the Restated
\n Certificate of Incorporation of the Company shall constitute a quorum
\n for the transaction of business. Except as otherwise provided by law,
\n the Restated Certificate of Incorporation of the Company or these
\n Bylaws, the affirmative vote of a majority of the directors present at
\n any meeting at which there is a quorum shall be the act of the Board of
\n Directors. Any regular or special directors’ meeting may be adjourned
\n from time to time by those present, whether a quorum is present or not.<\/p>\n
(b) Notwithstanding anything to the contrary herein, so long
\n as any shares of Class B Common Stock of the Company are issued and
\n outstanding and the holders of Class B Common Stock have not terminated
\n their rights to block such actions granted to them under Section 4.1 of
\n the Stockholder Agreement between the Company and Chevron U.S.A. Inc.,
\n a Pennsylvania corporation, dated November 9, 2001, the Company shall
\n not take (or permit to be taken in its capacity as a stockholder or
\n partner or otherwise permit any subsidiary of the Company to take) any
\n of the following actions if <\/p>\n
Page 9 of 20<\/p>\n
all of the Class B Directors present at the meeting where such action
\n is considered vote against such action:<\/p>\n
(i) amendment of (A) the last sentence of Article III,
\n Section 3 of these Bylaws, (B) Article III, Sections 6, 7(b),
\n 7(c), 9 and 10 of these Bylaws, or (C) the last two sentences
\n of Section 2(d) of Article IV, Division B of the Restated
\n Certificate of Incorporation of the Company;<\/p>\n
(ii) adoption of any provision of these Bylaws or
\n amendment to the Restated Certificate of Incorporation which
\n would substantially and adversely affect the rights of the
\n holders of the Class B Common Stock;<\/p>\n
(iii) authorization of new shares of any stock or other
\n voting securities of the Company where the aggregate
\n consideration to be received by the Company therefor exceeds
\n $3 billion;<\/p>\n
(iv) any merger or consolidation of the Company or any
\n subsidiary (other than a merger or consolidation by a
\n subsidiary with the Company or another subsidiary), any joint
\n venture, any liquidation or dissolution of the Company, any
\n voluntary initiation of a proceeding in bankruptcy or
\n acquiescence to an involuntary initiation of a proceeding in
\n bankruptcy, any acquisition of stock or assets by the Company
\n or its subsidiaries, or any issuance of common or preferred
\n stock by the Company, any of which would result in the payment
\n or receipt of consideration (including the incurrence or
\n assumption of indebtedness and liabilities) having a fair
\n market value exceeding $3 billion; or<\/p>\n
(v) any other material transaction (or series of related
\n transactions) which would result in the payment or receipt of
\n consideration (including the incurrence or assumption of
\n indebtedness and liabilities) having a fair market value
\n exceeding $3 billion and is out of the ordinary course of
\n business for the Company.<\/p>\n
(c) The executive officers of the Company shall advise the
\n members of the Board of Directors of the consideration of a proposal
\n relating to any matter of the type described in Section 7(b) at such
\n time as they determine to give substantive attention to such proposal.<\/p>\n
Section 8. Compensation. Directors shall receive such compensation for
\ntheir services as shall be determined by the Board of Directors.<\/p>\n
Section 9. Executive and Other Committees. The Board of Directors, by
\nresolution or resolutions adopted by a majority of the full Board of Directors,
\nmay designate one or more members of the Board of Directors to constitute an
\nExecutive Committee, and one or more other committees, which shall in each case
\nbe comprised of such number of directors as the Board of Directors may determine
\nfrom time to time. Unless precluded by applicable law or rule of the New York
\nStock Exchange, each committee of the Board of Directors, other than any
\nnomination committee with respect to Class A Directors (as such term is defined
\nin the Company’s Restated Certificate of Incorporation), shall include at least
\none Class B Director at <\/p>\n
Page 10 of 20<\/p>\n
all times, unless a majority of Class B Directors consents to a committee not
\nhaving any Class B Directors. Subject to such restrictions as may be contained
\nin the Company’s Restated Certificate of Incorporation or that may be imposed by
\nthe DGCL, any such committee shall have and may exercise such powers and
\nauthority of the Board of Directors in the management of the business and
\naffairs of the Company as the Board of Directors may determine by resolution and
\nspecify in the respective resolutions appointing them, and may authorize the
\nseal of the Company to be affixed to all papers which may require it; but no
\nsuch committee shall have the power or authority in reference to the following
\nmatters: (a) approving or adopting, or recommending to the stockholders of the
\nCompany, any action or matter expressly required by the DGCL to be submitted to
\nthe stockholders for approval, (b) adopting, amending or repealing any Bylaw of
\nthe Company, or (c) actions set forth in Section 7(b) of this Article III. Each
\nduly authorized action taken with respect to a given matter by any such duly
\nappointed committee of the Board of Directors shall have the same force and
\neffect as the action of the full Board of Directors and shall constitute for all
\npurposes the action of the full Board of Directors with respect to such matter.<\/p>\n
The Board of Directors shall have the power at any time to change the
\nmembership of any such committee and to fill vacancies in it. A majority of the
\nmembers of any such committee shall constitute a quorum. The Board of Directors
\nshall name a chairman at the time it designates members to a committee. Each
\nsuch committee shall appoint such subcommittees and assistants as it may deem
\nnecessary. Except as otherwise provided by the Board of Directors, meetings of
\nany committee shall be conducted in accordance with the provisions of Sections 4
\nand 6 of this Article III as the same shall from time to time be amended. Any
\nmember of any such committee elected or appointed by the Board of Directors may
\nbe removed by the Board of Directors whenever in its judgment the best interests
\nof the Company will be served thereby, but such removal shall be without
\nprejudice to the contract rights, if any, of the person so removed. Election or
\nappointment of a member of a committee shall not of itself create contract
\nrights.<\/p>\n
Section 10. Agenda Items. No action may be taken at a meeting of the
\nBoard of Directors with respect to any matter that was not previously set forth
\non an agenda for such meeting if either a majority of the Class B Directors
\npresent at such meeting or a majority of the other directors present at such
\nmeeting oppose taking action at such meeting with respect to such matter.<\/p>\n
ARTICLE IV<\/p>\n
Officers<\/p>\n
Section 1. Officers. The officers of the Company shall consist of a
\nPresident and a Corporate Secretary and such other officers and agents as the
\nBoard of Directors may from time to time elect or appoint. The Board of
\nDirectors may delegate to the Chairman of the Board, if there is one, and\/or the
\nChief Executive Officer, if there is one, the authority to appoint or remove
\nadditional officers and agents of the Company. Each officer shall hold office
\nuntil his successor shall have been duly elected or appointed and shall qualify
\nor until his death or until he shall resign or shall have been removed in the
\nmanner hereinafter provided. Any two or more <\/p>\n
Page 11 of 20<\/p>\n
offices may be held by the same person. Except for the Chairman of the Board, if
\nany, no officer need be a director.<\/p>\n
Section 2. Vacancies; Removal. Whenever any vacancies shall occur in
\nany office by death, resignation, increase in the number of offices of the
\nCompany, or otherwise, the officer so elected shall hold office until his
\nsuccessor is chosen and qualified. The Board of Directors may at any time remove
\nany officer of the Company, whenever in its judgment the best interests of the
\nCompany will be served thereby, but such removal shall be without prejudice to
\nthe contract rights, if any, of the person so removed. Election or appointment
\nof an officer or agent shall not of itself create contract rights.<\/p>\n
Section 3. Powers and Duties of Officers. The officers of the Company
\nshall have such powers and duties as generally pertain to their offices as well
\nas such powers and duties as from time to time shall be conferred by the Board
\nof Directors. The Corporate Secretary shall have the duty to record the
\nproceedings of the meetings of the stockholders and directors in a book to be
\nkept for that purpose.<\/p>\n
ARTICLE V<\/p>\n
Indemnification<\/p>\n
Section 1. General. The Company shall, to the fullest extent permitted
\nby applicable law in effect on the date of effectiveness of these Bylaws, and to
\nsuch greater extent as applicable law may thereafter permit, indemnify and hold
\nIndemnitee harmless from and against any and all losses, liabilities, claims,
\ndamages and, subject to Article V, Section 2 (Expenses), Expenses (as this and
\nall other capitalized words used in this Article V not previously defined in
\nthese Bylaws are defined in Article V, Section 16 (Definitions)), whatsoever
\narising out of any event or occurrence related to the fact that Indemnitee is or
\nwas a director or officer of the Company or is or was serving in another
\nCorporate Status.<\/p>\n
Section 2. Expenses. If Indemnitee is, by reason of his Corporate
\nStatus, a party to and is successful, on the merits or otherwise, in any
\nProceeding, he shall be indemnified against all Expenses actually and reasonably
\nincurred by him or on his behalf in connection therewith. If Indemnitee is not
\nwholly successful in such Proceeding but is successful, on the merits or
\notherwise, as to any Matter in such Proceeding, the Company shall indemnify
\nIndemnitee against all Expenses actually and reasonably incurred by him or on
\nhis behalf relating to such Matter. The termination of any Matter in such a
\nProceeding by dismissal, with or without prejudice, shall be deemed to be a
\nsuccessful result as to such Matter. To the extent that the Indemnitee is, by
\nreason of his Corporate Status, a witness in any Proceeding, he shall be
\nindemnified against all Expenses actually and reasonably incurred by him or on
\nhis behalf in connection therewith.<\/p>\n
Section 3. Advances. In the event of any threatened or pending action,
\nsuit or proceeding in which Indemnitee is a party or is involved and that may
\ngive rise to a right of indemnification under this Article V, following written
\nrequest to the Company by Indemnitee, the Company shall promptly pay to
\nIndemnitee amounts to cover expenses reasonably incurred by Indemnitee in such
\nproceeding in advance of its final disposition upon the receipt by the Company
\nof (i) a written undertaking executed by or on behalf of Indemnitee providing
\nthat <\/p>\n
Page 12 of 20<\/p>\n
Indemnitee will repay the advance if it shall ultimately be determined that
\nIndemnitee is not entitled to be indemnified by the Company as provided in these
\nBylaws and (ii) satisfactory evidence as to the amount of such expenses.<\/p>\n
Section 4. Repayment of Advances or Other Expenses. Indemnitee agrees
\nthat Indemnitee shall reimburse the Company all expenses paid by the Company in
\ndefending any civil, criminal, administrative or investigative action, suit or
\nproceeding against Indemnitee in the event and only to the extent that it shall
\nbe determined pursuant to the provisions of this Article V or by final judgment
\nor other final adjudication under the provisions of any applicable law that
\nIndemnitee is not entitled to be indemnified by the Company for such expenses.<\/p>\n
Section 5. Request for Indemnification. To obtain indemnification,
\nIndemnitee shall submit to the Corporate Secretary of the Company a written
\nclaim or request. Such written claim or request shall contain sufficient
\ninformation to reasonably inform the Company about the nature and extent of the
\nindemnification or advance sought by Indemnitee. The Corporate Secretary of the
\nCompany shall promptly advise the Board of Directors of such request.<\/p>\n
Section 6. Determination of Entitlement; No Change of Control. If there
\nhas been no Change of Control at the time the request for indemnification is
\nsubmitted, Indemnitee’s entitlement to indemnification shall be determined in
\naccordance with Section 145(d) of the DGCL. If entitlement to indemnification is
\nto be determined by Independent Counsel, the Company shall furnish notice to
\nIndemnitee within ten days after receipt of the request for indemnification,
\nspecifying the identity and address of Independent Counsel. The Indemnitee may,
\nwithin fourteen days after receipt of such written notice of selection, deliver
\nto the Company a written objection to such selection. Such objection may be
\nasserted only on the ground that the Independent Counsel so selected does not
\nmeet the requirements of Independent Counsel and the objection shall set forth
\nwith particularity the factual basis for such assertion. If there is an
\nobjection to the selection of Independent Counsel, either the Company or
\nIndemnitee may petition the Court for a determination that the objection is
\nwithout a reasonable basis and\/or for the appointment of Independent Counsel
\nselected by the Court.<\/p>\n
Section 7. Determination of Entitlement; Change of Control. If there
\nhas been a Change of Control at the time the request for indemnification is
\nsubmitted, Indemnitee’s entitlement to indemnification shall be determined in a
\nwritten opinion by Independent Counsel selected by Indemnitee. Indemnitee shall
\ngive the Company written notice advising of the identity and address of the
\nIndependent Counsel so selected. The Company may, within seven days after
\nreceipt of such written notice of selection, deliver to the Indemnitee a written
\nobjection to such selection. Indemnitee may, within five days after the receipt
\nof such objection from the Company, submit the name of another Independent
\nCounsel and the Company may, within seven days after receipt of such written
\nnotice of selection, deliver to the Indemnitee a written objection to such
\nselection. Any objections referred to in this Section 7 may be asserted only on
\nthe ground that the Independent Counsel so selected does not meet the
\nrequirements of Independent Counsel and such objection shall set forth with
\nparticularity the factual basis for such assertion. Indemnitee may petition the
\nCourt for a determination that the Company’s objection to the first and\/or
\nsecond selection of Independent Counsel is without a reasonable basis and\/or for
\nthe appointment as Independent Counsel of a person selected by the Court.<\/p>\n
Page 13 of 20<\/p>\n
Section 8. Procedures of Independent Counsel. If a Change of Control
\nshall have occurred before the request for indemnification is sent by
\nIndemnitee, Indemnitee shall be presumed (except as otherwise expressly provided
\nin this Article V) to be entitled to indemnification upon submission of a
\nrequest for indemnification in accordance with Article V, Section 5 (Request for
\nIndemnification), and thereafter the Company shall have the burden of proof to
\novercome the presumption in reaching a determination contrary to the
\npresumption. The presumption shall be used by Independent Counsel as a basis for
\na determination of entitlement to indemnification unless the Company provides
\ninformation sufficient to overcome such presumption by clear and convincing
\nevidence or the investigation, review and analysis of Independent Counsel
\nconvinces him by clear and convincing evidence that the presumption should not
\napply.<\/p>\n
Except in the event that the determination of entitlement to
\nindemnification is to be made by Independent Counsel, if the person or persons
\nempowered under Article V, Section 6 (Determination of Entitlement; No Change of
\nControl) or Section 7 (Determination of Entitlement; Change of Control) to
\ndetermine entitlement to indemnification shall not have made and furnished to
\nIndemnitee in writing a determination within sixty days after receipt by the
\nCompany of the request therefor, the requisite determination of entitlement to
\nindemnification shall be deemed to have been made and Indemnitee shall be
\nentitled to such indemnification unless Indemnitee knowingly misrepresented a
\nmaterial fact in connection with the request for indemnification or such
\nindemnification is prohibited by applicable law. The termination of any
\nProceeding or of any Matter therein, by judgment, order, settlement or
\nconviction, or upon a plea of nolo contendere or its equivalent, shall not
\n(except as otherwise expressly provided in this Article V) of itself adversely
\naffect the right of Indemnitee to indemnification or create a presumption that
\nIndemnitee did not act in good faith and in a manner that he reasonably believed
\nto be in or not opposed to the best interests of the Company, or with respect to
\nany criminal Proceeding, that Indemnitee had reasonable cause to believe that
\nhis conduct was unlawful. A person who acted in good faith and in a manner he
\nreasonably believed to be in the interest of the participants and beneficiaries
\nof an employee benefit plan of the Company shall be deemed to have acted in a
\nmanner not opposed to the best interests of the Company.<\/p>\n
For purposes of any determination hereunder, a person shall be deemed
\nto have acted in good faith and in a manner he reasonably believed to be in or
\nnot opposed to the best interests of the Company, or, with respect to any
\ncriminal action or Proceeding, to have had no reasonable cause to believe his
\nconduct was unlawful, if his action is based on the records or books of account
\nof the Company or another enterprise or on information supplied to him by the
\nofficers of the Company or another enterprise in the course of their duties or
\non the advice of legal counsel for the Company or another enterprise or on
\ninformation or records given or reports made to the Company or another
\nenterprise by an independent certified public accountant or by an appraiser or
\nother expert selected with reasonable care by the Company or another enterprise.
\nThe term “another enterprise” as used in this Section shall mean any other
\ncompany or any partnership, limited liability company, association, joint
\nventure, trust, employee benefit plan or other enterprise of which such person
\nis or was serving at the request of the Company as a director, officer, employee
\nor agent. The provisions of this paragraph shall not be deemed to be exclusive
\nor to limit in any way the circumstances in which an Indemnitee may be deemed to
\nhave met the applicable standards of conduct for determining entitlement to
\nrights under this Article V.<\/p>\n
Page 14 of 20<\/p>\n
Section 9. Independent Counsel Expenses. The Company shall pay any and
\nall reasonable fees and expenses of Independent Counsel incurred acting pursuant
\nto this Article V and in any proceeding to which it is a party or witness in
\nrespect of its investigation and written report and shall pay all reasonable
\nfees and expenses incident to the procedures in which such Independent Counsel
\nwas selected or appointed. No Independent Counsel may serve if a timely
\nobjection has been made to his selection until a court has determined that such
\nobjection is without a reasonable basis.<\/p>\n
Section 10. Adjudication. In the event that (i) a determination is made
\npursuant to Article V, Section 6 (Determination of Entitlement; No Change of
\nControl) or Section 7 (Determination of Entitlement; Change of Control) that
\nIndemnitee is not entitled to indemnification under this Article V; (ii)
\nadvancement of Expenses is not timely made pursuant to Article V, Section 3
\n(Advances); (iii) Independent Counsel has not made and delivered a written
\nopinion determining the request for indemnification (a) within ninety days after
\nbeing appointed by the Court, (b) within ninety days after objections to his
\nselection have been overruled by the Court or (c) within ninety days after the
\ntime for the Company or Indemnitee to object to his selection; or (iv) payment
\nof indemnification is not made within five days after a determination of
\nentitlement to indemnification has been made or deemed to have been made
\npursuant to Article V, Section 6 (Determination of Entitlement; No Change of
\nControl), Section 7 (Determination of Entitlement; Change of Control) or Section
\n8 (Procedures of Independent Counsel), Indemnitee shall be entitled to an
\nadjudication in an appropriate court of the State of Delaware, or in any other
\ncourt of competent jurisdiction, of his entitlement to such indemnification or
\nadvancement of Expenses. In the event that a determination shall have been made
\nthat Indemnitee is not entitled to indemnification, any judicial proceeding or
\narbitration commenced pursuant to this Section 10 shall be conducted in all
\nrespects as a de novo trial on the merits and Indemnitee shall not be prejudiced
\nby reason of that adverse determination. If a Change of Control shall have
\noccurred, in any judicial proceeding commenced pursuant to this Section 10, the
\nCompany shall have the burden of proving that Indemnitee is not entitled to
\nindemnification or advancement of Expenses, as the case may be. If a
\ndetermination shall have been made or deemed to have been made that Indemnitee
\nis entitled to indemnification, the Company shall be bound by such determination
\nin any judicial proceeding commenced pursuant to this Section 10, or otherwise,
\nunless Indemnitee knowingly misrepresented a material fact in connection with
\nthe request for indemnification, or such indemnification is prohibited by law.<\/p>\n
The Company shall be precluded from asserting in any judicial
\nproceeding commenced pursuant to this Section 10 that the procedures and
\npresumptions of this Article V are not valid, binding and enforceable and shall
\nstipulate in any such proceeding that the Company is bound by all provisions of
\nthis Article V. In the event that Indemnitee, pursuant to this Section 10, seeks
\na judicial adjudication to enforce his rights under, or to recover damages for
\nbreach of, this Article V, Indemnitee shall be entitled to recover from the
\nCompany, and shall be indemnified by the Company against, any and all Expenses
\nactually and reasonably incurred by him in such judicial adjudication, but only
\nif he prevails therein. If it shall be determined in such judicial adjudication
\nthat Indemnitee is entitled to receive part but not all of the indemnification
\nor advancement of Expenses sought, the Expenses incurred by Indemnitee in
\nconnection with such judicial adjudication or arbitration shall be appropriately
\nprorated.<\/p>\n
Page 15 of 20<\/p>\n
Section 11. Participation by the Company. With respect to any such
\nclaim, action, suit, proceeding or investigation as to which Indemnitee notifies
\nthe Company of the commencement thereof: (a) the Company will be entitled to
\nparticipate therein at its own expense; (b) except as otherwise provided below,
\nto the extent that it may wish, the Company (jointly with any other indemnifying
\nparty similarly notified) will be entitled to assume the defense thereof, with
\ncounsel reasonably satisfactory to Indemnitee. After receipt of notice from the
\nCompany to Indemnitee of the Company’s election so to assume the defense
\nthereof, the Company will not be liable to Indemnitee under this Article V for
\nany legal or other expenses subsequently incurred by Indemnitee in connection
\nwith the defense thereof other than reasonable costs of investigation or as
\notherwise provided below. Indemnitee shall have the right to employ his own
\ncounsel in such action, suit, proceeding or investigation but the fees and
\nexpenses of such counsel incurred after notice from the Company of its
\nassumption of the defense thereof shall be at the expense of Indemnitee unless
\n(i) the employment of counsel by Indemnitee has been authorized by the Company,
\n(ii) Indemnitee shall have reasonably concluded that there is a conflict of
\ninterest between the Company and Indemnitee in the conduct of the defense of
\nsuch action or (iii) the Company shall not in fact have employed counsel to
\nassume the defense of such action, in each of which cases the fees and expenses
\nof counsel employed by Indemnitee shall be subject to indemnification pursuant
\nto the terms of this Article V. The Company shall not be entitled to assume the
\ndefense of any action, suit, proceeding or investigation brought in the name of
\nor on behalf of the Company or as to which Indemnitee shall have made the
\nconclusion provided for in (ii) above; and (c) the Company shall not be liable
\nto indemnify Indemnitee under this Article V for any amounts paid in settlement
\nof any action or claim effected without its written consent, which consent shall
\nnot be unreasonably withheld. The Company shall not settle any action or claim
\nin any manner that would impose any limitation or unindemnified penalty on
\nIndemnitee without Indemnitee’s written consent, which consent shall not be
\nunreasonably withheld.<\/p>\n
Section 12. Nonexclusivity of Rights. The rights of indemnification and
\nadvancement of Expenses as provided by this Article V shall not be deemed
\nexclusive of any other rights to which Indemnitee may at any time be entitled to
\nunder applicable law, the Restated Certificate of Incorporation of the Company,
\nthese Bylaws, any agreement, a vote of stockholders or a resolution of
\ndirectors, or otherwise. No amendment, alteration or repeal of this Article V or
\nany provision hereof shall be effective as to any Indemnitee for acts, events
\nand circumstances that occurred, in whole or in part, before such amendment,
\nalteration or repeal. The provisions of this Article V shall continue as to an
\nIndemnitee whose Corporate Status has ceased for any reason and shall inure to
\nthe benefit of his heirs, executors and administrators. Neither the provisions
\nof this Article V nor those of any agreement to which the Company is a party
\nshall be deemed to preclude the indemnification of any person who is not
\nspecified in this Article V as having the right to receive indemnification or is
\nnot a party to any such agreement, but whom the Company has the power or
\nobligation to indemnify under the provisions of the DGCL.<\/p>\n
Section 13. Insurance and Subrogation. The Company may maintain
\ninsurance, at its expense, to protect itself and any director, officer, employee
\nor agent of the Company or another corporation, partnership, joint venture,
\ntrust or other enterprise against any such expense, liability or loss, whether
\nor not the Company would have the power to indemnity such person against such
\nexpense, liability or loss under applicable law.<\/p>\n
Page 16 of 20<\/p>\n
The Company shall not be liable under this Article V to make any
\npayment of amounts otherwise indemnifiable hereunder if, but only to the extent
\nthat, Indemnitee has otherwise actually received such payment under any
\ninsurance policy, contract, agreement or otherwise.<\/p>\n
In the event of any payment hereunder, the Company shall be subrogated
\nto the extent of such payment to all the rights of recovery of Indemnitee, who
\nshall execute all papers required and take all action reasonably requested by
\nthe Company to secure such rights, including execution of such documents as are
\nnecessary to enable the Company to bring suit to enforce such rights.<\/p>\n
Section 14. Severability. If any provision or provisions of this
\nArticle V shall be held to be invalid, illegal or unenforceable for any reason
\nwhatsoever, the validity, legality and enforceability of the remaining
\nprovisions shall not in any way be affected or impaired thereby; and, to the
\nfullest extent possible, the provisions of this Article V shall be construed so
\nas to give effect to the intent manifested by the provision held invalid,
\nillegal or unenforceable.<\/p>\n
Section 15. Certain Actions for Which Indemnification Is Not Provided.
\nNotwithstanding any other provision of this Article V, no person shall be
\nentitled to indemnification or advancement of Expenses under this Article V with
\nrespect to any Proceeding, or any Matter therein, brought or made by such person
\nagainst the Company.<\/p>\n
Section 16. Definitions. For purposes of this Article V:<\/p>\n
“Change of Control” means a change in control of the Company after the
\ndate Indemnitee acquired his Corporate Status, which shall be deemed to have
\noccurred in any one of the following circumstances occurring after such date:
\n(i) there shall have occurred an event required to be reported with respect to
\nthe Company in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
\nresponse to any similar item on any similar schedule or form) promulgated under
\nthe Exchange Act, whether or not the Company is then subject to such reporting
\nrequirement; (ii) any “person” (as such term is used in Sections 13(d) and 14(d)
\nof the Exchange Act) shall have become the “beneficial owner” (as defined in
\nRule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
\nCompany representing 40% or more of the combined voting power of the Company’s
\nthen outstanding voting securities without prior approval of at least two-thirds
\nof the members of the Board of Directors in office immediately prior to such
\nperson attaining such percentage interest; (iii) the Company is a party to a
\nmerger, consolidation, sale of assets or other reorganization, or a proxy
\ncontest, as a consequence of which members of the Board of Directors in office
\nimmediately prior to such transaction or event constitute less than a majority
\nof the Board of Directors thereafter; or (iv) during any period of two
\nconsecutive years, individuals who at the beginning of such period constituted
\nthe Board of Directors (including, for this purpose, any new director whose
\nelection or nomination for election by the Company’s stockholders was approved
\nby a vote of at least two-thirds of the directors then still in office who were
\ndirectors at the beginning of such period) cease for any reason to constitute at
\nleast a majority of the Board of Directors.<\/p>\n
“Corporate Status” describes the status of Indemnitee as a director,
\nofficer, employee, agent or fiduciary of the Company or of any other
\ncorporation, partnership, limited liability <\/p>\n
Page 17 of 20<\/p>\n
company, association, joint venture, trust, employee benefit plan or other
\nenterprise that Indemnitee is or was serving at the request of the Company.<\/p>\n
“Court” means the Court of Chancery of the State of Delaware or any
\nother court of competent jurisdiction.<\/p>\n
“Designated Professional Capacity” shall include, but not be limited
\nto, a physician, nurse, psychologist or therapist, registered surveyor,
\nregistered engineer, registered architect, attorney, certified public accountant
\nor other person who renders such professional services within the course and
\nscope of his employment, who is licensed by appropriate regulatory authorities
\nto practice such profession and who, while acting in the course of such
\nemployment, committed or is alleged to have committed any negligent acts, errors
\nor omissions in rendering such professional services at the request of the
\nCompany or pursuant to his employment (including, without limitation, rendering
\nwritten or oral opinions to third parties).<\/p>\n
“Expenses” shall include all reasonable attorneys’ fees, retainers,
\ncourt costs, transcript costs, fees of experts, witness fees, travel expenses,
\nduplicating costs, printing and binding costs, telephone charges, postage,
\ndelivery service fees, and all other disbursements or expenses of the types
\ncustomarily incurred in connection with prosecuting, defending, preparing to
\nprosecute or defend, investigating, or being or preparing to be a witness in a
\nProceeding.<\/p>\n
“Indemnitee” includes any officer (including an officer acting in his
\nDesignated Professional Capacity) or director of the Company who is, or is
\nthreatened to be made, a witness in or a party to any Proceeding as described in
\nArticle V, Section 1 (General) or Section 2 (Expenses) by reason of his
\nCorporate Status.<\/p>\n
“Independent Counsel” means a law firm, or a member of a law firm, that
\nis experienced in matters of corporation law and neither presently is, nor in
\nthe five years previous to his selection or appointment has been, retained to
\nrepresent: (i) the Company or Indemnitee in any matter material to either such
\nparty or (ii) any other party to the Proceeding giving rise to a claim for
\nindemnification hereunder.<\/p>\n
“Matter” is a claim, a material issue or a substantial request for
\nrelief.<\/p>\n
“Proceeding” includes any action, suit, arbitration, alternate dispute
\nresolution mechanism, investigation, administrative hearing or any other
\nproceeding, whether civil, criminal, administrative or investigative, except one
\ninitiated by an Indemnitee pursuant to Article V, Section 10 (Adjudication) to
\nenforce his rights under this Article V.<\/p>\n
Section 17. Notices. Promptly after receipt by Indemnitee of notice of
\nthe commencement of any action, suit or proceeding, Indemnitee shall, if he
\nanticipates or contemplates making a claim for expenses or an advance pursuant
\nto the terms of this Article V, notify the Company of the commencement of such
\naction, suit or proceeding; provided, however, that any delay in so notifying
\nthe Company shall not constitute a waiver or release by Indemnitee of rights
\nhereunder and that any omission by Indemnitee to so notify the Company shall not
\nrelieve the Company from any liability that it may have to Indemnitee otherwise
\nthan under this Article V. Any communication required or permitted to the
\nCompany shall be addressed to the Corporate Secretary of the Company and any
\nsuch communication to Indemnitee shall be <\/p>\n
Page 18 of 20<\/p>\n
addressed to Indemnitee’s address as shown on the Company’s records unless he
\nspecifies otherwise and shall be personally delivered or delivered by overnight
\nmail delivery. Any such notice shall be effective upon receipt.<\/p>\n
Section 18. Contractual Rights. The right to be indemnified or to the
\nadvancement or reimbursement of Expenses (i) is a contract right based upon good
\nand valuable consideration, pursuant to which Indemnitee may sue as if these
\nprovisions were set forth in a separate written contract between Indemnitee and
\nthe Company, (ii) is intended to be retroactive and shall be available as to
\nevents occurring prior to the adoption of these provisions and (iii) shall
\ncontinue after any rescission or restrictive modification of such provisions as
\nto events occurring prior thereto.<\/p>\n
Section 19. Indemnification of Employees, Agents and Fiduciaries. The
\nCompany, by adoption of a resolution of the Board of Directors, may indemnify
\nand advance expenses to a person who is an employee (including an employee
\nacting in his Designated Professional Capacity), agent or fiduciary of the
\nCompany including any such person who is or was serving at the request of the
\nCompany as a director, officer, employee, agent or fiduciary of any other
\ncorporation, partnership, joint venture, limited liability company, trust,
\nemployee benefit plan or other enterprise to the same extent and subject to the
\nsame conditions (or to such lesser extent and\/or with such other conditions as
\nthe Board of Directors may determine) under which it may indemnify and advance
\nexpenses to an Indemnitee under this Article V.<\/p>\n
ARTICLE VI<\/p>\n
Miscellaneous Provisions<\/p>\n
Section 1. Offices. The address of the registered office of the Company
\nin the State of Delaware is Corporation Trust Center, 1209 Orange Street, City
\nof Wilmington, County of New Castle, 19801, and the name of the registered agent
\nof the Company at such address is The Corporation Trust Company. The principal
\noffice of the Company shall be located in Houston, Texas, unless and until
\nchanged by resolution of the Board of Directors. The Company may also have
\noffices at such other places as the Board of Directors may designate from time
\nto time, or as the business of the Company may require. The principal office and
\nregistered office may be, but need not be, the same.<\/p>\n
Section 2. Resignations. Any director or officer may resign at any
\ntime. Such resignations shall be made in writing and shall take effect at the
\ntime specified therein, or, if no time is specified, at the time of its receipt
\nby the Chairman of the Board, if there is one, the Chief Executive Officer, if
\nthere is one, the President or the Corporate Secretary. The acceptance of a
\nresignation shall not be necessary to make it effective, unless expressly so
\nprovided in the resignation.<\/p>\n
Section 3. Seal. The Corporate Seal shall be circular in form, shall
\nhave inscribed thereon the name of the Company and may be used by causing it or
\na facsimile thereof to be impressed or affixed or otherwise reproduced.<\/p>\n
Page 19 of 20<\/p>\n
Section 4. Separability. If one or more of the provisions of these
\nBylaws shall be held to be invalid, illegal or unenforceable, such invalidity,
\nillegality or unenforceability shall not affect any other provision hereof and
\nthese Bylaws shall be construed as if such invalid, illegal or unenforceable
\nprovision or provisions had never been contained herein.<\/p>\n
ARTICLE VII<\/p>\n
Amendment of Bylaws<\/p>\n
Section 1. Vote Requirements. Subject to the provisions of the
\nCompany’s Restated Certificate of Incorporation, these Bylaws may be altered,
\namended or repealed, and new Bylaws may be adopted, by the Board of Directors;
\nprovided that no amendment or repeal of (a) the last sentence of Article III,
\nSection 3 of these Bylaws, or (b) Article III, Sections 6, 7(b), 7(c), 9 and 10
\nof these Bylaws, nor the adoption of any provision of these Bylaws which would
\nsubstantially and adversely affect the rights of the holders of Class B Common
\nStock, shall be effective except upon the affirmative vote of a majority of the
\nshares of Class B Common Stock outstanding.<\/p>\n
Page 20 of 20<\/p>\n
EXHIBIT 7.11<\/p>\n
FORM OF RULE 145 AFFILIATE LETTER<\/p>\n
________________, 200_<\/p>\n
[Stanford, Inc.]
\n1000 Louisiana, Suite 5800
\nHouston, Texas 77002<\/p>\n
Ladies and Gentlemen:<\/p>\n
I have been advised that as of the date of this letter I may be
\ndeemed to be an “affiliate” of [Dynegy Inc., an Illinois corporation
\n(“Dynegy”),] [Enron Corp., an Oregon corporation (“Enron”),] as the term
\n“affiliate” is defined for purposes of paragraphs (c) and (d) of Rule 145 of the
\nRules and Regulations (the “Rules and Regulations”) of the Securities and
\nExchange Commission (the “Commission”) under the Securities Act of 1933, as
\namended (the “Securities Act”). Pursuant to the terms of the Agreement and Plan
\nof Merger dated as of November 7, 2001 (the “Agreement”), among Dynegy [Inc., an
\nIllinois corporation (“Dynegy”)], Stanford, Inc., a Delaware corporation and
\nwholly owned subsidiary of Dynegy to be renamed Dynegy Inc. (the “Company”),
\nBadin, Inc., an Illinois corporation and wholly owned subsidiary the Company
\n(“Badin”), Sorin, Inc., an Oregon corporation and wholly owned subsidiary the
\nCompany (“Sorin”) and Enron [Corp., an Oregon corporation (“Enron”)], Sorin will
\nbe merged with and into Enron, with Enron being the surviving entity (the “Enron
\nMerger”), and concurrently therewith Badin will be merged with and into Dynegy,
\nwith Dynegy being the surviving entity (the “Dynegy Merger” and, together with
\nthe Enron Merger, the “Mergers”). Pursuant to the Mergers, the outstanding
\ncommon stock, no par value, of Enron (“Enron Common Stock”) will be converted
\ninto Class A common stock, par value $.01 per share, of the Company (“Company
\nClass A Common Stock”), and the outstanding Class A common stock, no par value,
\nof Dynegy (“Dynegy Class A Common Stock”) and outstanding Class B common stock,
\nno par value, of Dynegy (“Dynegy Class B Common Stock”) will be converted into
\nCompany Class A Common Stock and Class B common stock, par value $.01 per share,
\nof the Company (“Company Class B Common Stock” and, together with the Company
\nClass A Common Stock, the “Company Common Stock”), respectively.<\/p>\n
As a result of the [Dynegy] [Enron] Merger, I may receive (i) shares
\nof Company Class A Common Stock in exchange for shares of [Dynegy Class A]
\n[Enron] Common Stock [and\/or (ii) shares of Company Class B Common Stock in
\nexchange for shares of Dynegy Class B Common Stock] (or upon the exercise of
\noptions for such shares).<\/p>\n
I represent, warrant and covenant to the Company that as of the date
\nI receive any Company Common Stock as a result of the [Dynegy] [Enron] Merger:<\/p>\n
A. I shall not make any sale, transfer or other disposition of such
\n Company Common Stock in violation of the Securities Act or the Rules and
\n Regulations.<\/p>\n
B. I have carefully read this letter and the Agreement and, to the
\n extent I felt necessary, discussed the requirements of such documents and
\n other applicable limitations upon my ability to sell, transfer or
\n otherwise dispose of the Company Common Stock with my counsel.<\/p>\n
C. I have been advised that the issuance of Company Common Stock to
\n me pursuant to the [Dynegy] [Enron] Merger will be registered with the
\n Commission under the Securities Act on a Registration Statement on Form
\n S-4. I have also been advised, however, that, since, at the time the
\n [Dynegy] [Enron] Merger is submitted for a vote of the shareholders of
\n [Dynegy] [Enron], I may be deemed to be an affiliate of [Dynegy] [Enron]
\n for purposes of paragraphs (c) and (d) of Rule 145 of the Rules and
\n Regulations, I may not sell, transfer or otherwise dispose of the Company
\n Common Stock issued to me in the [Dynegy] [Enron] Merger within one year
\n following the [Dynegy] [Enron] Merger, and, if I am then an affiliate of
\n the Company, thereafter, unless (i) such sale, transfer or other
\n disposition has been registered under the Securities Act, (ii) such sale,
\n transfer or other disposition is made in conformity with the volume and
\n other limitations of Rule 145 of the Rules and Regulations (as such rule
\n may be hereafter from time to time amended), or (iii) in the opinion of
\n counsel reasonably acceptable to Company or as described in a “no action”
\n or interpretive letter obtained by me from the staff of the Commission,
\n such sale, transfer or other disposition is otherwise exempt from
\n registration under the Securities Act.<\/p>\n
D. [I understand that the Company is under no obligation to register
\n the sale, transfer or other disposition of the Company Common Stock by me
\n or on my behalf under the Securities Act or to take any other action
\n necessary in order to make compliance with an exemption from such
\n registration available.]<\/p>\n
E. I understand that stop transfer instructions will be given to the
\n Company’s transfer agent with respect to the Company Common Stock and that
\n there will be placed on the certificates for the Company Common Stock
\n issued to me in connection with the [Dynegy] [Enron] Merger, or any
\n substitutions therefor, a legend substantially in the form set forth
\n below:<\/p>\n
“THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN
\n A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
\n SECURITIES ACT OF 1933 APPLIES AND MAY ONLY BE SOLD,
\n PLEDGED OR OTHERWISE TRANSFERRED IN COMPLIANCE WITH THE
\n REQUIREMENTS OF RULE 145 OR PURSUANT TO AN EFFECTIVE
\n REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN EXEMPTION
\n FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
\n OF 1933.”<\/p>\n
F. I also understand that unless the transfer by me of my Company
\n Common Stock has been registered under the Securities Act or is a sale
\n made in conformity with <\/p>\n
the provisions of Rule 145, the Company reserves the right to place the
\n following legend on the certificates issued to my transferee in
\n substantially the form set forth below:<\/p>\n
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
\n REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE
\n ACQUIRED FROM A PERSON WHO RECEIVED SUCH SHARES IN A
\n TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
\n SECURITIES ACT OF 1933 APPLIES. THE SHARES HAVE BEEN
\n ACQUIRED BY THE HOLDER NOT WITH A VIEW TO, OR FOR RESALE
\n IN CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE
\n MEANING OF THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD,
\n PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
\n EFFECTIVE REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN
\n EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
\n SECURITIES ACT OF 1933.”<\/p>\n
G. I also understand and agree that the representations, warranties,
\n covenants and agreements I have made herein are for the benefit of
\n [Dynegy] [Enron] and the Company and will be relied upon by the Company
\n and its counsel and accountants.<\/p>\n
I understand and agree that the legends set forth in paragraphs [E
\nand F] above will be removed by delivery of substitute certificates without such
\nlegend if such legend is not required for purposes of the Securities Act. I
\nunderstand and agree that such legends and the stop orders referred to above
\nwill be removed if (i) one year shall have elapsed from the date I acquire the
\nCompany Common Stock received in the [Dynegy] [Enron] Merger and the provisions
\nof Rule 145(d)(2) are then available to me, (ii) two years shall have elapsed
\nfrom the date I acquire the Company Common Stock received in the [Dynegy]
\n[Enron] Merger and the provisions of Rule 145(d)(3) are then available to me or
\n(iii) the Company has received either an opinion of counsel, which opinion and
\ncounsel shall be reasonably satisfactory to the Company, or a “no action” letter
\nobtained by me from the staff of the Commission, to the effect that the
\nrestrictions imposed by Rule 145 under the Act no longer apply to me.<\/p>\n
Execution of this letter should not be considered an admission,
\nstipulation or acknowledgement by me that I am an “affiliate” of [Dynegy]
\n[Enron] or the Company as described in the first paragraph of this letter or
\nconsidered as a waiver of any rights that I may have to object to any claim that
\nI am an affiliate on or after the date of this letter.<\/p>\n
Very truly yours,<\/p>\n
[Insert Name of Affiliate]<\/p>\n
Accepted this _____ day of<\/p>\n
____________________, 200__ by<\/p>\n
[STANFORD, INC.]<\/p>\n
By: ______________________________
\n Name:
\n Title:<\/p>\n
EXHIBIT 8.2(a)<\/p>\n
ENRON CORP.
\n OFFICER’S CERTIFICATE<\/p>\n
The undersigned, a duly authorized officer of Enron Corp., an Oregon
\ncorporation (“Enron”), and acting as such, in connection with the opinions to
\nbe rendered by Baker Botts L.L.P. and Vinson & Elkins L.L.P. with respect to
\ncertain federal income tax consequences under the Internal Revenue Code of
\n1986, as amended (the “Code”), of the transactions contemplated by the
\nAgreement and Plan of Merger (the “Merger Agreement”) dated as of November 7,
\n2001 by and among Dynegy Inc., an Illinois corporation (“Dynegy”), Sorin,
\nInc., an Illinois corporation (“Dynegy Merger Sub”), Enron, Badin, Inc., an
\nOregon corporation (“Enron Merger Sub”) and Stanford, Inc., a Delaware
\ncorporation (“Newco”), hereby represents as follows:1<\/p>\n
1. For purposes of this Certificate,<\/p>\n
(i) “Chevron Agreements” means the Subscription Agreement by and
\nbetween ChevronTexaco Corp. (“Chevron”) and Newco dated November 7, 2001 and the
\nSeries A, B and C Warrants attached thereto as exhibits;<\/p>\n
(ii) “Chevron Transfers” means the issuance(s) of Newco Stock in
\nexchange for cash pursuant to the Chevron Agreements;<\/p>\n
(iii) “Disposition” means any transaction that, for federal income
\ntax purposes, constitutes a sale, exchange or other disposition, whether taxable
\nor nontaxable, of shares of Newco Stock.<\/p>\n
(iv) “Newco Stock” means Newco Series A Common Stock and Newco
\nSeries B Common Stock;<\/p>\n
(v) “Property” means (x) Dynegy Stock or Enron Common Stock
\nexchanged for Newco Stock in the Mergers (excluding any shares of Dynegy Stock
\nas to which dissenters’ rights have been exercised under Illinois law) and (y)
\ncash paid by a Transferor for Newco Stock pursuant to the Chevron Agreements;<\/p>\n
(vi) “Dynegy Stock” means Dynegy Series A Common Stock and
\nDynegy Series B Common Stock;<\/p>\n
(vii) “Transactions” means the Mergers and the Chevron Transfers;<\/p>\n
(viii) “Transferor” means (x) each holder of Dynegy Stock or Enron
\nCommon Stock immediately prior to the Effective Time who receives Newco Stock in
\nthe Mergers and (y) <\/p>\n
———————<\/p>\n
(1) Capitalized terms used but not defined herein have the meanings ascribed
\n to them in the Merger Agreement.<\/p>\n
each person to whom Newco issues Newco Stock in exchange for cash pursuant to
\nthe Chevron Agreements.<\/p>\n
2. The facts relating to Enron, Newco and the Transactions set forth in
\nthe Merger Agreement and the other agreements relating to the Transactions are
\ntrue, accurate and complete in all material respects.<\/p>\n
3. The Merger Agreement, the related written agreements entered into
\ncontemporaneously therewith or referenced therein and all exhibits and
\nattachments thereto represent the full and complete agreement among Dynegy,
\nEnron and Newco with respect to the Mergers and there are no other written or
\noral agreements regarding the Mergers. The Mergers will be consummated in
\naccordance with the Merger Agreement (including all agreements referenced
\ntherein and all exhibits and attachments thereto), and none of the material
\nterms and conditions therein has been or will be waived or modified.<\/p>\n
4. The facts relating to Enron, Newco and the Transactions set forth in
\nthe [Proxy Statement-Prospectus\/Registration Statement] filed with the
\nSecurities and Exchange Commission under the Securities and Exchange Act of
\n1934, as amended, dated ____, 2002 are true, accurate, and complete in all
\nmaterial respects at the Effective Time.<\/p>\n
5. To the knowledge of Enron, none of the Enron Common Stock or Dynegy
\nStock to be exchanged for Newco Stock pursuant to the Mergers is “section 306
\nstock” within the meaning of section 306(c) of the Code.<\/p>\n
6. The Transactions are not the result of the solicitation by a promoter,
\nbroker, or investment house.<\/p>\n
7. To the knowledge of Enron, no Transferor of Property to Newco in the
\nTransactions will retain any rights in the Property so transferred.<\/p>\n
8. Newco will not assume any indebtedness of any Transferor in connection
\nwith the Transactions. To the knowledge of Enron, none of the Property will be
\nreceived by Newco subject to any indebtedness in the Transactions.<\/p>\n
9. There is no plan or intention on the part of Newco to redeem or
\notherwise reacquire any of the stock of Newco to be issued in the Transactions
\nother than the payment of cash in lieu of fractional shares in the Mergers.<\/p>\n
10. To the knowledge of Enron, (i) no Transferor has a binding commitment,
\nand there is no plan or intention on the part of any Transferor, to engage in a
\nDisposition of any shares of Newco Stock to be received by such Transferor in
\nthe Transactions and (ii) immediately after the Mergers and each issuance of
\nNewco Stock pursuant to the Chevron Transfers, each Transferor will have the
\nability to exercise complete dominion and control over all of the shares of
\nNewco Stock received by such Transferor in the Transactions, including, without
\nlimitation, all voting rights with respect thereto.<\/p>\n
-2-<\/p>\n
11. Taking into account any issuance of additional shares of Newco Stock,
\nany issuance of Newco Stock for services, the exercise of any Newco stock
\nrights, warrants, or subscriptions, any public offering of Newco Stock, and, to
\nthe knowledge of Enron, the Disposition of any of the Newco Stock to be received
\nin the Transactions, the Transferors will be in Control of Newco, regardless of
\nwhether any Newco Stock issuable pursuant to the Chevron Agreements after the
\nEffective Date is treated as outstanding. For purposes of this paragraph,
\n“Control” means ownership of stock possessing at least eighty percent (80%) of
\nthe total combined voting power of all classes of stock entitled to vote and at
\nleast eighty percent (80%) of the total number of shares of each other class of
\nstock.<\/p>\n
12. The consideration to be issued to the Transferors in the Mergers was
\nthe result of arm’s-length negotiations between the managements of Dynegy and
\nEnron. Each holder of Property to be exchanged or paid for Newco Stock pursuant
\nto the Transactions will receive Newco Stock (and, if applicable, cash in lieu
\nof fractional shares) approximately equal to the fair market value of the
\nProperty exchanged therefor.<\/p>\n
13. Newco will remain in existence following the Mergers and any Chevron
\nTransfer. There is no plan or intention by Newco to liquidate Dynegy or Enron,
\nto cause Dynegy or Enron to merge with or into any other entity, to effect a
\nconversion of Dynegy or Enron or to otherwise dispose of any of the Enron Common
\nStock and Dynegy Stock transferred to it pursuant to the Mergers.<\/p>\n
14. Each of Dynegy, Enron and Newco, and, to the knowledge of Enron, each
\nTransferor, will pay its or his or her own expenses, if any, incurred in
\nconnection with the Transactions.<\/p>\n
15. Newco will not be an investment company within the meaning of section
\n351(e)(1) of the Code and Treas. Reg. Section 1.351-1(c)(1)(ii).<\/p>\n
16. Prior to the Mergers, each of Dynegy Merger Sub and Enron Merger Sub
\nwill be a direct, wholly owned subsidiary of Newco. Each of Dynegy Merger Sub
\nand Enron Merger Sub is or will be a transitory corporation formed for the sole
\npurpose of participating in the Mergers.<\/p>\n
17. No Newco Stock to be issued in, or in connection with, the
\nTransactions will be placed in escrow or will be issued under a contingent stock
\narrangement or other similar arrangement.<\/p>\n
18. The Transactions are being effected for bona fide business reasons.<\/p>\n
19. No Newco Stock will be issued for services rendered to or for the
\nbenefit of Newco or any affiliate thereof in connection with the Transactions.
\nNo Newco Stock will be issued for indebtedness of Newco that is not evidenced by
\na security or for interest on indebtedness of Newco.<\/p>\n
20. Newco Stock will be the only capital stock of Newco issued and
\noutstanding for federal income tax purposes. There will be no nonvoting class of
\ncapital stock of Newco issued and outstanding for federal income tax purposes.<\/p>\n
-3-<\/p>\n
21. There will be no indebtedness between Newco and any Transferor at the
\nEffective Time or at the time of any Chevron Transfer and there will be no
\nindebtedness created in favor of any Transferor as a result of the Transactions.<\/p>\n
22. All of the transfers by the Transferors made pursuant to the
\nTransactions will occur under the plan described in the Merger Agreement and the
\nChevron Agreements, in which the rights of the parties are defined.<\/p>\n
23. The payment of cash in lieu of fractional shares of Newco, if any, in
\nthe Mergers is solely for the purpose of avoiding the expense and inconvenience
\nto Newco of issuing fractional shares and does not represent separately
\nbargained-for consideration.<\/p>\n
24. None of the compensation received or to be received by any
\nshareholder-employee of Dynegy or Enron will be separate consideration for, or
\nallocable to, any of their Dynegy Stock or Enron Common Stock. None of the Newco
\nStock received by any such shareholder-employee in the Mergers will be separate
\nconsideration for, or allocable to, any employment agreement or other
\ncompensatory arrangement. The compensation paid to any shareholder-employee will
\nbe for services actually rendered and will be commensurate with amounts paid to
\nthird parties bargaining at arm’s-length for similar services.<\/p>\n
25. The undersigned officer is authorized to make all of the statements
\nset forth herein on behalf of Enron.<\/p>\n
I understand that the representations above will be relied upon by Baker
\nBotts L.L.P. and Vinson & Elkins L.L.P. as a basis for their respective
\nopinions, and that such opinions will be conditioned upon the initial and
\ncontinuing accuracy of these representations.<\/p>\n
Dated: ________, 2002<\/p>\n
ENRON CORP.<\/p>\n
By:
\n —————————-
\n Name:
\n —————————-
\n Title:
\n —————————-<\/p>\n
-4-<\/p>\n
EXHIBIT 8.2(b)<\/p>\n
DYNEGY INC.
\n OFFICER’S CERTIFICATE<\/p>\n
The undersigned, a duly authorized officer of Dynegy Inc., an Illinois
\ncorporation (“Dynegy”), and acting as such, in connection with the opinions
\nto be rendered by Baker Botts L.L.P. and Vinson & Elkins L.L.P. with respect
\nto certain federal income tax consequences under the Internal Revenue Code of
\n1986, as amended (the “Code”), of the transactions contemplated by the
\nAgreement and Plan of Merger (the “Merger Agreement”) dated as of November 7,
\n2001 by and among Dynegy, Sorin, Inc., an Illinois corporation (“Dynegy
\nMerger Sub”), Enron Corp., an Oregon corporation (“Enron”), Badin, Inc., an
\nOregon corporation (“Enron Merger Sub”) and Stanford, Inc., a Delaware
\ncorporation (“Newco”), hereby represents as follows:1<\/p>\n
1. For purposes of this Certificate,<\/p>\n
(i) “Chevron Agreements” means the Subscription Agreement by and
\nbetween ChevronTexaco Corp. (“Chevron”) and Newco dated November 7, 2001 and the
\nSeries A, B and C Warrants attached thereto as exhibits;<\/p>\n
(ii) “Chevron Transfers” means the issuance(s) of Newco Stock in
\nexchange for cash pursuant to the Chevron Agreements;<\/p>\n
(iii) “Disposition” means any transaction that, for federal income
\ntax purposes, constitutes a sale, exchange or other disposition, whether taxable
\nor nontaxable, of shares of Newco Stock.<\/p>\n
(iv) “Newco Stock” means Newco Series A Common Stock and Newco
\nSeries B Common Stock;<\/p>\n
(v) “Property” means (x) Dynegy Stock or Enron Common Stock
\nexchanged for Newco Stock in the Mergers (excluding any shares of Dynegy Stock
\nas to which dissenters’ rights have been exercised under Illinois law) and (y)
\ncash paid by a Transferor for Newco Stock pursuant to the Chevron Agreements;<\/p>\n
(vi) “Dynegy Stock” means Dynegy Series A Common Stock and
\nDynegy Series B Common Stock;<\/p>\n
(vii) “Transactions” means the Mergers and the Chevron Transfers;<\/p>\n
(viii) “Transferor” means (x) each holder of Dynegy Stock or Enron
\nCommon Stock immediately prior to the Effective Time who receives Newco Stock in
\nthe Mergers and (y) <\/p>\n
———————<\/p>\n
(1) Capitalized terms used but not defined herein have the meanings ascribed
\n to them in the Merger Agreement.<\/p>\n
each person to whom Newco issues Newco Stock in exchange for cash pursuant to
\nthe Chevron Agreements.<\/p>\n
2. The facts relating to Dynegy, Newco and the Transactions set forth in
\nthe Merger Agreement, the Chevron Agreements and the other agreements relating
\nto the Transactions are true, accurate and complete in all material respects.<\/p>\n
3. The Merger Agreement, the related written agreements entered into
\ncontemporaneously therewith or referenced therein and all exhibits and
\nattachments thereto represent the full and complete agreement among Dynegy,
\nEnron and Newco with respect to the Mergers and there are no other written or
\noral agreements regarding the Mergers. The Mergers will be consummated in
\naccordance with the Merger Agreement (including all agreements referenced
\ntherein and all exhibits and attachments thereto), and none of the material
\nterms and conditions therein has been or will be waived or modified.<\/p>\n
4. The Chevron Agreements (including all agreements referenced therein and
\nall exhibits and attachments thereto) represent the full and complete agreement
\nbetween Newco and Chevron with respect to the Chevron Transfers and there are no
\nother written or oral agreements regarding the Chevron Transfers. The Chevron
\nTransfers will be consummated in accordance with the Chevron Agreements
\n(including all agreements referenced therein and all exhibits and attachments
\nthereto), and none of the material terms and conditions therein has been or will
\nbe waived or modified.<\/p>\n
5. The facts relating to Dynegy, Newco and the Transactions set forth in
\nthe [Proxy Statement-Prospectus\/Registration Statement] filed with the
\nSecurities and Exchange Commission under the Securities and Exchange Act of
\n1934, as amended, dated ____, 2002 are true, accurate, and complete in all
\nmaterial respects at the Effective Time.<\/p>\n
6. To the knowledge of Dynegy, none of the Enron Common Stock or Dynegy
\nStock to be exchanged for Newco Stock pursuant to the Mergers is “section 306
\nstock” within the meaning of section 306(c) of the Code.<\/p>\n
7. The Transactions are not the result of the solicitation by a promoter,
\nbroker, or investment house.<\/p>\n
8. To the knowledge of Dynegy, no Transferor of Property to Newco in the
\nTransactions will retain any rights in the Property so transferred.<\/p>\n
9. Newco will not assume any indebtedness of any Transferor in connection
\nwith the Transactions. To the knowledge of Dynegy, none of the Property will be
\nreceived by Newco subject to any indebtedness in the Transactions.<\/p>\n
10. There is no plan or intention on the part of Newco to redeem or
\notherwise reacquire any of the stock of Newco to be issued in the Transactions
\nother than the payment of cash in lieu of fractional shares in the Mergers.<\/p>\n
-2-<\/p>\n
11. To the knowledge of Dynegy, (i) no Transferor has a binding
\ncommitment, and there is no plan or intention on the part of any Transferor, to
\nengage in a Disposition of any shares of Newco Stock to be received by such
\nTransferor in the Transactions and (ii) immediately after the Mergers and each
\nissuance of Newco Stock pursuant to the Chevron Transfers, each Transferor will
\nhave the ability to exercise complete dominion and control over all of the
\nshares of Newco Stock received by such Transferor in the Transactions,
\nincluding, without limitation, all voting rights with respect thereto.<\/p>\n
12. Taking into account any issuance of additional shares of Newco Stock,
\nany issuance of Newco Stock for services, the exercise of any Newco stock
\nrights, warrants, or subscriptions, any public offering of Newco Stock, and, to
\nthe knowledge of Dynegy, the Disposition of any of the Newco Stock to be
\nreceived in the Transactions, the Transferors will be in Control of Newco,
\nregardless of whether any Newco Stock issuable pursuant to the Chevron
\nAgreements after the Effective Date is treated as outstanding. For purposes of
\nthis paragraph, “Control” means ownership of stock possessing at least eighty
\npercent (80%) of the total combined voting power of all classes of stock
\nentitled to vote and at least eighty percent (80%) of the total number of shares
\nof each other class of stock.<\/p>\n
13. The consideration to be issued to the Transferors (i) in the Mergers
\nwas the result of arm’s-length negotiations between the managements of Dynegy
\nand Enron and (ii) in the Chevron Transfers was the result of arm’s-length
\nnegotiations between the managements of Dynegy and Chevron. Each holder of
\nProperty to be exchanged or paid for Newco Stock pursuant to the Transactions
\nwill receive Newco Stock (and, if applicable, cash in lieu of fractional shares)
\napproximately equal to the fair market value of the Property exchanged therefor.<\/p>\n
14. Newco will remain in existence following the Mergers and any Chevron
\nTransfer. There is no plan or intention by Newco to liquidate Dynegy or Enron,
\nto cause Dynegy or Enron to merge with or into any other entity, to effect a
\nconversion of Dynegy or Enron or to otherwise dispose of any of the Enron Common
\nStock and Dynegy Stock transferred to it pursuant to the Mergers.<\/p>\n
15. Each of Dynegy, Enron and Newco, and, to the knowledge of Dynegy, each
\nTransferor, will pay its or his or her own expenses, if any, incurred in
\nconnection with the Transactions.<\/p>\n
16. Newco will not be an investment company within the meaning of section
\n351(e)(1) of the Code and Treas. Reg. Section 1.351-1(c)(1)(ii).<\/p>\n
17. Prior to the Mergers, each of Dynegy Merger Sub and Enron Merger Sub
\nwill be a direct, wholly owned subsidiary of Newco. Each of Dynegy Merger Sub
\nand Enron Merger Sub is or will be a transitory corporation formed for the sole
\npurpose of participating in the Mergers.<\/p>\n
18. No Newco Stock to be issued in, or in connection with, the
\nTransactions will be placed in escrow or will be issued under a contingent stock
\narrangement or other similar arrangement.<\/p>\n
-3-<\/p>\n
19. The Transactions are being effected for bona fide business reasons.<\/p>\n
20. No Newco Stock will be issued for services rendered to or for the
\nbenefit of Newco or any affiliate thereof in connection with the Transactions.
\nNo Newco Stock will be issued for indebtedness of Newco that is not evidenced by
\na security or for interest on indebtedness of Newco.<\/p>\n
21. Newco Stock will be the only capital stock of Newco issued and
\noutstanding for federal income tax purposes. There will be no nonvoting class of
\ncapital stock of Newco issued and outstanding for federal income tax purposes.<\/p>\n
22. There will be no indebtedness between Newco and any Transferor at the
\nEffective Time or at the time of any Chevron Transfer and there will be no
\nindebtedness created in favor of any Transferor as a result of the Transactions.<\/p>\n
23. All of the transfers by the Transferors made pursuant to the
\nTransactions will occur under the plan described in the Merger Agreement and the
\nChevron Agreements, in which the rights of the parties are defined.<\/p>\n
24. The payment of cash in lieu of fractional shares of Newco, if any, in
\nthe Mergers is solely for the purpose of avoiding the expense and inconvenience
\nto Newco of issuing fractional shares and does not represent separately
\nbargained-for consideration.<\/p>\n
25. None of the compensation received or to be received by any
\nshareholder-employee of Dynegy or Enron will be separate consideration for, or
\nallocable to, any of their Dynegy Stock or Enron Common Stock. None of the Newco
\nStock received by any such shareholder-employee in the Mergers will be separate
\nconsideration for, or allocable to, any employment agreement or other
\ncompensatory arrangement. The compensation paid to any shareholder-employee will
\nbe for services actually rendered and will be commensurate with amounts paid to
\nthird parties bargaining at arm’s-length for similar services.<\/p>\n
26. The undersigned officer is authorized to make all of the statements
\nset forth herein on behalf of Dynegy.<\/p>\n
I understand that the representations above will be relied upon by Baker
\nBotts L.L.P. and Vinson & Elkins L.L.P. as a basis for their respective
\nopinions, and that such opinions will be conditioned upon the initial and
\ncontinuing accuracy of these representations.<\/p>\n
Dated: ________, 2002 DYNEGY, INC.<\/p>\n
By:
\n —————————-
\n Name:
\n —————————-
\n Title:
\n —————————-<\/p>\n
-4-<\/p>\n
EXHIBIT 8.2(c)<\/p>\n
[Chevron U.S.A. Inc. Letterhead]<\/p>\n
________, 2002<\/p>\n
Baker Botts L.L.P.
\n910 Louisiana
\nHouston, Texas 77002<\/p>\n
Vinson & Elkins L.L.P
\n1001 Fannin
\nHouston, Texas 77002<\/p>\n
Dear Sirs:<\/p>\n
In connection with the proposed merger (the “Merger”) of Sorin, Inc., a
\nwholly owned subsidiary of Stanford, Inc. (“Newco”),1 with and into Dynegy Inc.
\n(“Dynegy”), where Dynegy survives the Merger, and where Chevron U.S.A. Inc.
\n(“Chevron”) will receive Newco common stock in exchange for Dynegy stock, we
\nrepresent that we do not have any plan, intention, obligation or other
\ncommitment to sell, exchange, or otherwise dispose of, whether taxable or
\nnontaxable, for federal income tax purposes the shares of stock of Newco
\nreceived in those transactions.<\/p>\n
We understand that Baker Botts L.L.P. and Vinson & Elkins L.L.P. will rely
\non this Certificate in rendering their opinions as to the transaction and we
\nwill promptly and timely inform them if, after signing this Certificate, we have
\nreason to believe that any of the facts described herein or any of the
\nrepresentations made in this Certificate are untrue, incorrect or incomplete in
\nany respect.<\/p>\n
CHEVRON U.S.A. INC.,
\n a Pennsylvania corporation<\/p>\n
By:_________________________________<\/p>\n
Title:______________________________<\/p>\n
——————<\/p>\n
(1) For purposes of this certificate, capitalized terms used and not otherwise
\n defined herein shall have the meaning ascribed thereto in the Agreement
\n and Plan of Merger Agreement dated November 7, 2001 providing for the
\n Merger and\/or the Form S-4 filed with the SEC on _______, 2002.<\/p>\n
EXHIBIT 8.2(d)<\/p>\n
[ChevronTexaco Corp. Letterhead]<\/p>\n
________, 2002<\/p>\n
Baker Botts L.L.P.
\n910 Louisiana
\nHouston, Texas 77002<\/p>\n
Vinson & Elkins L.L.P
\n1001 Fannin
\nHouston, Texas 77002<\/p>\n
Dear Sirs:<\/p>\n
In connection with (1) the proposed merger (the “Merger”) of Sorin, Inc.,
\na wholly owned subsidiary of Stanford, Inc. (“Newco”),1 with and into Dynegy
\nInc. (“Dynegy”), where Dynegy survives the Merger, and where ChevronTexaco Corp.
\n(“Chevron”) will receive Newco common stock in exchange for Dynegy stock and (2)
\nthe proposed purchase by Chevron of shares of Newco common stock and warrants
\npursuant to the Subscription Agreement by and between Chevron and Newco dated
\nNovember 7, 2001 and the Series A, B and C Warrants attached thereto as
\nexhibits, we represent that we do not have, nor will we have at the time of any
\npurchase described in clause (2) above, any plan, intention, obligation or other
\ncommitment to sell, exchange, or otherwise dispose of, whether taxable or
\nnontaxable, for federal income tax purposes the shares of stock of Newco
\nreceived in those transactions.<\/p>\n
We understand that Baker Botts L.L.P. and Vinson & Elkins L.L.P. will rely
\non this Certificate in rendering their opinions as to the transaction and we
\nwill promptly and timely inform them if, after signing this Certificate, we have
\nreason to believe that any of the facts described herein or any of the
\nrepresentations made in this Certificate are untrue, incorrect or incomplete in
\nany respect.<\/p>\n
CHEVRONTEXACO CORP.,
\n a Delaware corporation<\/p>\n
By:_________________________________<\/p>\n
Title:______________________________<\/p>\n
——————<\/p>\n
(1) For purposes of this certificate, capitalized terms used and not otherwise
\n defined herein shall have the meaning ascribed thereto in the Agreement
\n and Plan of Merger Agreement dated November 7, 2001 providing for the
\n Merger and\/or the Form S-4 filed with the SEC on _______, 2002.<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7381,7454],"corporate_contracts_industries":[9535,9409],"corporate_contracts_types":[9622,9626],"class_list":["post-43047","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-dynegy-inc","corporate_contracts_companies-enron-corp","corporate_contracts_industries-utilities__gas","corporate_contracts_industries-energy__exploration","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43047","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43047"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43047"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43047"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43047"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}