______________, the _________ of TXU Corp., a Texas corporation (the
"Company"), pursuant to the authority granted in the Board Resolutions of the
Company dated ______, ____, and Sections 102, 201, 301 and 1501 of the Indenture
defined herein, does hereby certify to The Bank of New York, as Trustee (the
"Trustee") under the Indenture of the Company (For Unsecured Debt Securities
Series _) dated as of ___________, ____ (the "Indenture"), that:
1. The Securities of the first series to be issued under the Indenture shall
be designated "__% Series ___ [Floating Rate] Senior Notes due
____________, ____" (the "Series _ Notes"). All capitalized terms used in
this certificate which are not defined herein shall have the meanings set
forth in Exhibit A hereto; all capitalized terms used in this certificate
which are not defined herein or in Exhibit A hereto shall have the meanings
set forth in the Indenture;
2. The Series _ Notes shall mature and the principal thereof shall be due and
payable together with all accrued and unpaid interest thereon on
____________, ____;
3. The Series _ Notes shall bear interest as provided in the form thereof set
forth in Exhibit A hereto. [The Calculation Agent for the Series _ Notes
shall be ____________________, or its successor as Calculation Agent. At
any time, the Company may designate a successor Calculation Agent, who may
be any Person who is eligible to be a successor Trustee or co-trustee under
the Indenture or who (a) is in fact independent, (b) does not have any
direct material financial interest in the Company or in any Affiliate of
the Company, (c) is not connected with the Company as an officer, employee,
promoter, underwriter, partner, director or person performing similar
functions, (d) is selected by an Authorized Officer and (e) is approved by
the Trustee in the exercise of reasonable care;]/1/
4. The principal of, and premium, if any, and each installment of interest on
the Series _ Notes shall be payable at the office or agency of the Company
in The City of New York; provided that payment of interest may be made at
the option of the Company by check mailed to the address of the persons
entitled thereto or by wire transfer to an account designated by the person
entitled thereto; and provided further that so long as the Series _ Notes
are registered in the name of The Depository Trust Company ("DTC"), or its
nominee as discussed below, all payments of principal and interest in
respect of the Series _ Notes will be made in immediately available funds.
Notices and demands to or upon the Company in respect of the Series _ Notes
and the Indenture may be served at the office or agency of the Company in
The City of New York. The Corporate Trust Office of the Trustee will
initially be the agency of the Company for such payment and service of
notices and demands and the Company hereby appoints The Bank of New York as
its agent for all such purposes; provided, however, that the Company
reserves the right to change, by one or more Officer's Certificates, any
such office or agency and such agent. The registration and registration of
transfers and exchanges in respect of the Series _ Notes may be effected at
the offices of TXU Business Services Company in Dallas, Texas. TXU Business
1 Applicable to Floating Rate Senior Notes.
Services Company will initially be the Security Registrar and the Trustee
will initially be the Paying Agent for the Series _ Notes;
5. [Redemption provisions for the Series _ Notes will be inserted here];
6. The Series _ Notes shall initially be issued in the form of a global
security to, and registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"); provided, that the Company reserves the
right to provide for another depositary, registered as a clearing agency
under the Exchange Act, to act as depositary for the global Series _ Notes
(DTC and any such successor depositary, the "Depositary"); beneficial
interests in Series _ Notes issued in global form may not be exchanged in
whole or in part for individual certificated Series _ Notes in definitive
form, and no transfer of a global Series _ Note in whole or in part may be
registered in the name of any Person other than the Depositary or its
nominee except that if the Depositary (A) has notified the Company that it
is unwilling or unable to continue as depositary for the global Series _
Notes or (B) has ceased to be a clearing agency registered under the
Exchange Act and, in either case, a successor depositary for such global
Series _ Notes has not been appointed, the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and
delivery of definitive Series _ Notes, will authenticate and deliver Series
_ Notes in definitive certificated form in an aggregate principal amount
equal to the principal amount of the global Series _ Notes representing
such Series _ Notes in exchange for such global Series _ Notes, such
definitive Series _ Notes to be registered in the names provided by the
Depositary; each global Series _ Note (i) shall represent and shall be
denominated in an amount equal to the aggregate principal amount of the
outstanding Notes to be represented by such global Series _ Note (ii) shall
be registered in the name of the Depositary or its nominee, (iii) shall be
delivered by the Trustee to the Depositary, its nominee, any custodian for
the Depositary or otherwise pursuant to the Depositary's instruction and
(iv) shall bear a legend restricting the transfer of such global Series _
Note to any Person other than the Depositary or its nominee; none of the
Company, the Trustee, any Paying Agent or any Authenticating Agent will
have any responsibility or liability for any aspect of the records relating
to, or payments made on account of or transfers of, beneficial ownership
interests in a global Series _ Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests; the
Notes in global form will contain restrictions on transfer, substantially
as described in the form set forth in Exhibit A.
DTC or such nominee shall be the Holder of such global securities for all
purposes under the Indenture and the Series _ Notes, and beneficial owners
with respect to such global security shall hold their interests pursuant to
applicable procedures of Depositary. The Company, the Trustee and the
Securities Registrar shall be entitled to deal with Depositary for all
purposes of the Indenture relating to such global security (including the
payment of principal, premium, if any, and interest and Additional Amounts,
if any, and the giving of instructions or directions by or to the
beneficial owners of such global security) as the sole Holder of such
global security and shall have no obligations to the beneficial owners
thereof. Any such global security shall bear the legend in substantially
the form appearing on the form of the Series _ Notes set forth in Exhibit A
hereto, or such other form as DTC shall require.
None of the Company, the Trustee or the Securities Registrar shall have any
liability for any acts or omissions of the Depositary, for any Depositary
records of beneficial interests, for any transactions between the
Depositary or any participant member of the Depositary and/or beneficial
owners, for any transfers of beneficial interests in the Series _ Notes, or
in respect of any transfers effected by the Depositary or by any
participant member of the Depositary or any beneficial owner of any
interest in any Series _ Notes held through any such participant member of
the Depositary.
2
7. No service charge shall be made for the registration of transfer or
exchange of the Series _ Notes; provided, however, that the Company
may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with the
exchange or transfer;
8. If the Company shall make any deposit of money and/or Eligible
Obligations with respect to any Series _ Notes, or any portion of the
principal amount thereof, as contemplated by Section 701 of the
Indenture, the Company shall not deliver an Officer's Certificate
described in clause (z) in the first paragraph of said Section 701
unless the Company shall also deliver to the Trustee, together with
such Officer's Certificate, either:
(A) an instrument wherein the Company, notwithstanding the
satisfaction and discharge of its indebtedness in respect of the
Series _ Notes, shall assume the obligation (which shall be absolute
and unconditional) to irrevocably deposit with the Trustee or Paying
Agent such additional sums of money, if any, or additional Eligible
Obligations (meeting the requirements of Section 701), if any, or any
combination thereof, at such time or times, as shall be necessary,
together with the money and/or Eligible Obligations theretofore so
deposited, to pay when due the principal of and premium, if any, and
interest due and to become due on such Series _ Notes or portions
thereof, all in accordance with and subject to the provisions of said
Section 701; provided, however, that such instrument may state that
the obligation of the Company to make additional deposits as aforesaid
shall be subject to the delivery to the Company by the Trustee of a
notice asserting the deficiency accompanied by an opinion of an
independent public accountant of nationally recognized standing,
selected by the Trustee, showing the calculation thereof; or
(B) an Opinion of Counsel to the effect that, as a result of a
change in law occurring after the date of this certificate, the
Holders of such Series _ Notes, or portions of the principal amount
thereof, will not recognize income, gain or loss for United States
federal income tax purposes as a result of the satisfaction and
discharge of the Company's indebtedness in respect thereof and will be
subject to United States federal income tax on the same amounts, at
the same times and in the same manner as if such satisfaction and
discharge had not been effected.
9. The obligations of the Company under the Series _ Notes and under the
Indenture to the extent related to such series will be subject to
assignment by the Company to and assumption by a wholly owned Subsidiary of
the Company at any time, as provided in the form of Series _ Notes set
forth in Exhibit A hereto, provided, however, that the Company shall not
make any such assignment unless the Company shall deliver to the Trustee an
Opinion of Counsel to the effect that the Holders of such Series _ Notes,
or portions of the principal amount thereof, will not recognize income,
gain or loss for United States federal income tax purposes as a result of
such assignment and assumption;
In the event that such Subsidiary assumes the obligations under the Series
_ Notes, the Company will issue an unconditional guarantee of the Series _
Notes which guarantee shall be in form and substance satisfactory to the
Trustee. Pursuant to the guarantee, the Company will remain fully and
unconditionally liable for the payment obligations of such assuming
Subsidiary under the Series _ Notes and under the Indenture, including,
without limitation, payment, as and when due, of the principal of, premium,
if any, and interest on, the Series _ Notes. Other than the obligation to
make payments of the principal of, premium, if any, and interest on, the
Series _ Notes and payments to the Trustee under Section 907 of the
Indenture, the Company will be released and discharged from all of its
other obligations under the Indenture. The foregoing assignment and
assumption shall be in compliance with applicable law, including the
Securities Act.
3
If the Company assigns its obligations under the Indenture to a Subsidiary,
the guarantee will provide that if there is an Event of Default and the
Holders are prevented by applicable law from exercising their rights to
accelerate the maturity of the Series _ Notes, to collect interest on the
Series _ Notes, or to enforce any other right or remedy with respect to the
Series _ Notes, the Company will pay, upon demand, the amount that would
otherwise have been due and payable had the exercise of such rights and
remedies been permissible.
If the Company assigns its obligations under the Indenture to a Subsidiary
that is organized in a foreign jurisdiction, it will also agree that all
payments made by the Company pursuant to the Series _ Notes or its
guarantee on the Series _ Notes will be made without withholding or
deduction for any foreign taxes or other foreign governmental charges
imposed with respect to payments on the Series _ Notes, unless such
withholding or deduction is required by law. If any such withholding or
deduction is made, the Company shall pay to each Holder of Series _ Notes
the amount that would otherwise have been due to that Holder in the absence
of such withholding or deduction, after any additional taxes or other
charges payable in respect of such Company payment ("Additional Amounts"),
except that no such Additional Amounts shall be payable:
(A) to or for a Holder who is liable for those foreign taxes or
charges because of the Holder's connection with the relevant jurisdiction,
whether as a citizen, a resident or a national of the jurisdiction or
because the Holder carries on a business or maintains a permanent
establishment there or is physically present there;
(B) to or for a Holder who presents a Series _ Note required to be
presented for payment more than 30 days after the date on which payment
first becomes due, unless that Holder would have been entitled to such
Additional Amounts by presenting such security during the 30 day period;
(C) to or for a Holder who presents a Series _ Note, where
presentation is required, at any place other than in The City of New York,
unless the Company does not provide a place for presentation within The
City of New York; or
(D) to or for a Holder who is liable for the tax or charge because the
Holder failed to take appropriate and available steps to declare
non-residence or request exemption from the relevant tax authority.
No Additional Amounts will be payable with respect to any Series _ Notes if
the beneficial owner would not have been entitled to such payment if that
beneficial owner had been a Holder;
10. The Series _ Notes shall have such other terms and provisions as are
provided in the form thereof set forth in Exhibit A hereto, and shall be
issued in substantially such form;
11. The undersigned has read all of the covenants and conditions contained in
the Indenture, and the definitions in the Indenture relating thereto,
relating to the issuance, authentication and delivery of the Series _ Notes
and in respect of compliance with which this certificate is made;
12. The statements contained in this certificate are based upon the familiarity
of the undersigned with the Indenture, the documents accompanying this
certificate, and upon discussions by the undersigned with officers and
employees of the Company familiar with the matters set forth herein;
4
13. In the opinion of the undersigned, he has made such examination or
investigation as is necessary to enable him to express an informed opinion
as to whether or not such covenants and conditions have been complied with;
and
14. In the opinion of the undersigned, such conditions and covenants and
conditions precedent (including any covenants compliance with which
constitutes a condition precedent) provided for in the Indenture relating
to the authentication and delivery of the Series _ Notes requested in the
accompanying Company Order _-D-_, have been complied with.
5
IN WITNESS WHEREOF, I have executed this Officer's Certificate this ____
day of _________, ____.
Treasurer
6
EXHIBIT A
[depository legend]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
NO._______________ CUSIP NO.__________
[FORM OF FACE OF SERIES _ SENIOR NOTE]
TXU CORP.
__% [FLOATING RATE] SENIOR NOTES DUE ____________, ____
TXU CORP., a corporation duly organized and existing under the laws of the
State of Texas (herein referred to as the "Company", which term includes any
successor Person under the Indenture), for value received, hereby promises to
pay to
or registered assigns, the principal sum of ____________________ Dollars on
__________________, and to pay interest on said principal sum semi-annually
on________ and _________ [quarterly on _____, _________, _________ and
___________ ] of each year commencing ___________, ____ (each an Interest
Payment Date) at the per annum interest rate of __% [determined by the
Calculation Agent on each Interest Determination Date, as such terms are defined
herein],/2/ until the principal hereof is paid or made available for payment.
Interest on the Securities of this series will accrue from ____________, ____,
to the first Interest Payment Date, and thereafter will accrue from the last
Interest Payment Date to which interest has been paid or duly provided for. In
the event that any Interest Payment Date is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of such
delay) with the same force and effect as if made on the Interest Payment Date.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the Business Day immediately preceding such Interest
Payment Date, so long as the Securities of this Series are registered in the
name of the securities depository, provided, however, that interest payable at
Maturity will be paid to the Person to whom principal is paid. Any such interest
2 Applicable to Floating Rate Senior Notes.
A-1
not so punctually paid or duly provided for will forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture referred to on the
reverse hereof.
Payment of the principal of (and premium, if any) and interest on this
Security will be made upon presentation at the office or agency of the Company
maintained for that purpose in The City of New York, the State of New York in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts, provided, however,
that, at the option of the Company, interest on this Security may be paid by
check mailed to the address of the person entitled thereto, as such address
shall appear on the Security Register or by wire transfer to an account
designated by the Person entitled thereto; and provided further, that so long as
the Securities of this series are registered in the name of The Depository Trust
Company or a nominee thereof, all payments of principal and interest in respect
of the Securities of this series will be made in immediately available funds.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place. Any capitalized term which
is used herein and not otherwise defined shall have the meaning ascribed to such
term in the Indenture.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
A-2
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
TXU CORP.
By:________________________________
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture (For Unsecured Debt Securities Series _), dated as of
___________, ____ (herein, together with any amendments thereto, called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Bank of New York, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture, including the Board
Resolutions and Officer's Certificate filed with the Trustee on ____________,
_____ creating the series designated on the face hereof, for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered.
[Interest Calculation Provisions, if applicable, will be inserted here]/3/
[Redemption provisions will be inserted here]
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Security upon compliance with certain conditions set forth
in the Indenture including the Officer's Certificate described above.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of all series to be affected. The Indenture contains
provisions permitting the Holders of a majority in aggregate principal amount of
the Securities of all series then Outstanding to waive compliance by the Company
with certain provisions of the Indenture. The Indenture also contains provisions
permitting the Holders of specified percentages in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of a majority in aggregate principal
amount of the Securities of all series at the time Outstanding in respect of
which an Event of Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in respect of such Event
3 Applicable to Floating Rate Senior Notes.
A-4
of Default as Trustee and offered the Trustee reasonable indemnity, and the
Trustee shall not have received from the Holders of a majority in aggregate
principal amount of Securities of all series at the time Outstanding in respect
of which an Event of Default shall have occurred and be continuing a direction
inconsistent with such request, and shall have failed to institute any such
proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
The Securities of this series are issuable only in registered form without
coupons in denominations of $____ and in integral multiples thereof. As provided
in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor and of authorized denominations,
as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Security is registered as the absolute owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
Unless an Event of Default, or an event which, after notice or lapse of
time or both, would become an Event of Default, shall have occurred and be
continuing, the obligations of the Company under the Securities of this series
and the Indenture to the extent related to such series may be assigned by the
Company to, and be assumed in whole, on a full recourse basis, by a wholly owned
Subsidiary of the Company at any time; provided, however, that such assumption
shall be subject to, and permitted only upon the fulfillment and satisfaction
of, the following terms and conditions: (a) an assumption agreement and a
supplemental indenture to the Indenture evidencing such assumption shall be in
substance and form reasonably satisfactory to the Trustee and shall, inter alia,
include modifications and amendments to the Indenture making the obligations
under the Securities of this series and under the Indenture to the extent
related to such series primary obligations of such Subsidiary, substituting such
Subsidiary of the Company for the Company in the form of the Securities of this
series and in provisions of the Indenture to the extent related to this series
and releasing and discharging the Company from its obligations under the
Securities of this series and the Indenture to the extent related to this
series; and (b) the Trustee shall have received (i) an executed counterpart of
such assumption agreement and supplemental indenture; (ii) evidence satisfactory
to the Trustee and the Company that all necessary authorizations, consents,
orders, approvals, waivers, filings and declarations of or with, Federal, state,
county, municipal, regional or other governmental authorities, agencies or
boards (collectively, "Governmental Actions") relating to such assumption have
been duly obtained and are in full force and effect, (iii) evidence satisfactory
to the Trustee that any security interest intended to be created by the
Indenture is not in any material way adversely affected or impaired by any of
the agreements or transactions relating to such assumption, (iv) an Opinion of
Counsel to the effect that the Holders of the Securities of this series, or
portions of the principal amount thereof, will not recognize income, gain or
loss for United States federal income tax purposes as a result of such
assignment and assumption and (v) an Opinion of Counsel for such Subsidiary,
A-5
reasonably satisfactory in substance, scope and form to the Trustee and the
Company, to the effect that (A) the supplemental indenture evidencing such
assumption has been duly authorized, executed and delivered by such Subsidiary,
(B) the execution and delivery by such Subsidiary of such supplemental indenture
and the consummation of the transactions contemplated thereby do not contravene
any provision of law or any governmental rule applicable to such Subsidiary or
any provision of such Subsidiary's charter documents or by-laws and do not
contravene any provision of, or constitute a default under, or result in the
creation or imposition of any lien upon any of such Subsidiary's properties or
assets under any indenture, mortgage, contract or other agreement to which such
Subsidiary is a party or by which such Subsidiary or any of its properties may
be bound or affected, (C) all necessary Governmental Actions relating to such
assumption have been duly obtained and are in full force and effect and (D) such
agreement and supplemental indenture constitute the legal, valid and binding
obligations of such Subsidiary, enforceable in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws at the time in
effect affecting the rights of creditors generally.
At the time of such assumption the Company will issue an unconditional
guarantee of the Securities of this series which guarantee shall be in form and
substance satisfactory to the Trustee. Pursuant to the guarantee, the Company
will remain fully and unconditionally liable for the payment of the obligations
of such assuming Subsidiary under the Securities of this series and under the
Indenture, including, without limitation, payment, as and when due, of the
principal of, premium, if any, and interest on, the Securities of this series.
Other than the obligation to make payments of the principal of, premium, if any,
and interest on the Securities of this series and payments to the Trustee under
Section 907 of the Indenture, the Company shall be released and discharged from
all other obligations under the Indenture.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture and in the Officer's
Certificate establishing the terms of the Securities of this series.
A-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this __% [Floating
Rate] Senior Note due ________:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Security on the Security Register. The agent may
substitute another to act for him or her.
Date: ____________________________________
Signature:_________________________
Signature Guarantee:_______________
(Sign exactly as your name appears on the other side of this Security)
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Security Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Security
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
A-7
EXHIBIT 4(i)
TXU CORP.
AND
THE BANK OF NEW YORK,
as Purchase Contract Agent
and Trustee
FORM OF PURCHASE CONTRACT AGREEMENT
Dated as of ____________
TIE SHEET
Section of Section of
Trust Indenture Act Purchase Contract
of 1939, as amended Agreement
------------------- ------------
310(a)......................................................7.8
310(b)......................................................7.9(d) and (g), 11.8
310(c)......................................................Inapplicable
311(a)......................................................11.2(b)
311(b)......................................................11.2(b)
311(c)......................................................Inapplicable
312(a)......................................................11.2(a)
312(b)......................................................11.2(b)
313.........................................................11.3
314(a)......................................................11.4
314(b)......................................................Inapplicable
314(c)......................................................11.5
314(d)......................................................Inapplicable
314(e)......................................................1.2
314(f)......................................................11.1
315(a)......................................................7.1(a)
315(b)......................................................7.2
315(c)......................................................7.1(e)
315(d)(1)...................................................7.1(b)
315(d)(2)...................................................7.1(b)
315(d)(3)...................................................11.9
316(a)(1)(A)................................................11.9
316(a)(1)(B)................................................11.6
316(b)......................................................6.1
316(c)......................................................11.2
317(a)......................................................Inapplicable
317(b)......................................................Inapplicable
318(a)......................................................11.1(b)
-------------
* This Cross-Reference Table does not constitute part of the Purchase
Contract Agreement and shall not affect the interpretation of any of its
terms or provisions.
i
TABLE OF CONTENTS
Page No.
RECITALS.......................................................................1
ARTICLE I Definitions and Other Provisions of General Application..............1
Section 1.1 Definitions.....................................................1
Section 1.2 Compliance Certificates and Opinions...........................10
Section 1.3 Form of Documents Delivered to Agent...........................11
Section 1.4 Acts of Holders; Record Dates..................................11
Section 1.5 Notices........................................................12
Section 1.6 Notice to Holders; Waiver......................................13
Section 1.7 Effect of Headings and Table of Contents.......................13
Section 1.8 Successors and Assigns.........................................13
Section 1.9 Separability Clause............................................14
Section 1.10 Benefits of Agreement.........................................14
Section 1.11 Governing Law.................................................14
Section 1.12 Legal Holidays................................................14
Section 1.13 Counterparts..................................................14
Section 1.14 Inspection of Agreement.......................................14
ARTICLE II Certificate Forms..................................................15
Section 2.1 Forms of Certificates Generally................................15
Section 2.2 Form of Agent's Certificate of Authentication..................15
ARTICLE III The Securities....................................................16
Section 3.1 Title and Terms; Denominations.................................16
Section 3.2 Rights and Obligations Evidenced by the Certificates...........16
Section 3.3 Execution, Authentication, Delivery and Dating.................16
Section 3.4 Temporary Certificates.........................................17
Section 3.5 Registration; Registration of Transfer and Exchange............18
Section 3.6 Book-Entry Interests...........................................19
Section 3.7 Notices to Holders.............................................19
Section 3.8 Appointment of Successor Clearing Agency.......................19
Section 3.9 Definitive Certificates........................................19
Section 3.10 Mutilated, Destroyed, Lost and Stolen Certificates............20
Section 3.11 Persons Deemed Owners.........................................21
Section 3.12 Cancellation..................................................21
Section 3.13 Establishment or Reestablishment of Treasury Units............21
Section 3.14 Establishment or Reestablishment of Corporate Units...........23
Section 3.15 Transfer of Collateral upon Occurrence of Termination Event...25
Section 3.16 No Consent to Assumption......................................25
ARTICLE IV The Debt Securities................................................25
Section 4.1 Payment of Interest; Rights to Interest Preserved;
Interest Rate Reset; Notice....................................25
Section 4.2 Notice and Voting..............................................27
Section 4.3 Substitution of a Treasury Portfolio for Debt Securities.......27
Section 4.4 Consent to Treatment for Tax Purposes..........................28
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ARTICLE V The Purchase Contracts..............................................28
Section 5.1 Purchase of Shares of Common Stock.............................28
Section 5.2 Contract Adjustment Payments...................................29
Section 5.3 Deferral of Payment Dates For Contract Adjustment Payments.....30
Section 5.4 Payment of Purchase Price......................................31
Section 5.5 Issuance of Shares of Common Stock.............................34
Section 5.6 Adjustment of Settlement Rate..................................34
Section 5.7 Notice of Adjustments and Certain Other Events.................38
Section 5.8 Termination Event; Notice......................................39
Section 5.9 Early Settlement...............................................39
Section 5.10 No Fractional Shares..........................................41
Section 5.11 Charges and Taxes.............................................41
ARTICLE VI Remedies...........................................................41
Section 6.1 Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock...............41
Section 6.2 Restoration of Rights and Remedies.............................42
Section 6.3 Rights and Remedies Cumulative.................................42
Section 6.4 Delay or Omission Not Waiver...................................42
Section 6.5 Undertaking for Costs..........................................42
Section 6.6 Waiver of Stay or Extension Laws...............................42
ARTICLE VII The Agent.........................................................43
Section 7.1 Certain Duties and Responsibilities............................43
Section 7.2 Notice of Default..............................................44
Section 7.3 Certain Rights of Agent........................................44
Section 7.4 Not Responsible for Recitals or Issuance of Securities.........45
Section 7.5 May Hold Securities............................................45
Section 7.6 Money Held in Custody..........................................45
Section 7.7 Compensation and Reimbursement.................................45
Section 7.8 Corporate Agent Required; Eligibility..........................46
Section 7.9 Resignation and Removal; Appointment of Successor..............46
Section 7.10 Acceptance of Appointment by Successor........................47
Section 7.11 Merger, Conversion, Consolidation or Succession
to Business...................................................47
Section 7.12 Preservation of Information; Communications to Holders........48
Section 7.13 No Obligations of Agent.......................................48
Section 7.14 Tax Compliance................................................48
ARTICLE VIII Supplemental Agreements..........................................49
Section 8.1 Supplemental Agreements Without Consent of Holders.............49
Section 8.2 Supplemental Agreements with Consent of Holders................49
Section 8.3 Execution of Supplemental Agreements...........................50
Section 8.4 Effect of Supplemental Agreements..............................50
Section 8.5 Reference to Supplemental Agreements...........................50
ARTICLE IX Consolidation, Merger, Sale or Conveyance..........................51
Section 9.1 Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions.......................51
Section 9.2 Rights and Duties of Successor Entity..........................51
Section 9.3 Opinion of Counsel Given to Agent..............................51
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ARTICLE X Covenants...........................................................52
Section 10.1 Performance Under Purchase Contracts..........................52
Section 10.2 Maintenance of Office or Agency...............................52
Section 10.3 Company to Reserve Common Stock...............................52
Section 10.4 Covenants as to Common Stock..................................52
ARTICLE XI Trust Indenture Act................................................53
Section 11.1 Trust Indenture Act; Application..............................53
Section 11.2 Lists of Holders of Securities................................53
Section 11.3 Reports by the Agent..........................................53
Section 11.4 Periodic Reports to Agent.....................................53
Section 11.5 Evidence of Compliance with Conditions Precedent..............53
Section 11.6 Defaults; Waiver..............................................54
Section 11.7 Agent's Knowledge of Defaults.................................54
Section 11.8 Conflicting Interests.........................................54
Section 11.9 Direction of Agent............................................54
EXHIBIT A
EXHIBIT B
EXHIBIT C
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PURCHASE CONTRACT AGREEMENT, dated as of _________________, between TXU
Corp., a Texas corporation (the "Company"), and The Bank of New York, acting as
purchase contract agent, attorney-in-fact and trustee for the Holders of
Securities from time to time (in any one or more of such capacities, the
"Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Agent, as provided in this Agreement, the
valid obligations of the Company and the Holders, and to constitute these
presents a valid agreement of the Company, in accordance with its terms, have
been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular; and
nouns and pronouns of the masculine gender include the feminine and
neuter genders;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision; and
(d) the following terms have the meanings given to them in this Section
1.1(d):
"ACT" when used with respect to any Holder, has the meaning specified
in Section 1.4.
"AFFILIATE" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"AGENT" means the Person named as the "Agent" in the first paragraph of
this instrument until a successor Agent shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter "Agent" shall mean such
Person.
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"AGREEMENT" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"APPLICABLE BENCHMARK TREASURY" on a particular determination date
shall mean __________________________________.
"APPLICABLE MARKET VALUE" has the meaning specified in Section 5.1.
"APPLICABLE PRINCIPAL AMOUNT" means _____________________________.
"AUTHORIZED OFFICER" means the Chairman of the Board, the President,
any Vice President, the Treasurer, any Assistant Treasurer, or any other officer
or agent of the Company duly authorized by the Board of Directors to act in
respect of matters relating to this Agreement.
"AUTHORIZED NEWSPAPER" means a newspaper in the English language of
general circulation in the City of New York and generally published each
Business Day. As of the date of this Agreement, the Company anticipates that for
purposes of each Reset Announcement Date, the Authorized Newspaper will be the
Wall Street Journal.
"BANKRUPTCY CODE" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"BENEFICIAL OWNER" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected on
the books of the Clearing Agency or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency Participant or
as an indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"BOARD OF DIRECTORS" means the board of directors of the Company or a
duly authorized committee of that board.
"BOARD RESOLUTION" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification and delivered
to the Agent.
"BOOK-ENTRY INTEREST" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
"BUSINESS DAY" means any day other than a Saturday, Sunday or any other
day on which banking institutions in New York City (in the State of New York)
are permitted or required by any applicable law to close.
"CASH SETTLEMENT" has the meaning set forth in Section 5.4(a)(i).
"CERTIFICATE" means a Corporate Unit Certificate or a Treasury Unit
Certificate.
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"CLEARING AGENCY" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a nominee of
that organization, shall be registered as a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Securities.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING PRICE" has the meaning specified in Section 5.1.
"COLLATERAL" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"COLLATERAL AGENT" means ___________________, as Collateral Agent under
the Pledge Agreement until a successor Collateral Agent shall have become such
pursuant to the applicable provisions of the Pledge Agreement, and thereafter
"Collateral Agent" shall mean the Person who is then the Collateral Agent
thereunder.
"COLLATERAL SUBSTITUTION" means the substitution of the pledged
components of one type of Security for pledged components of the other type of
Security in connection with establishment or reestablishment of Treasury Units
or Corporate Units, as described in Sections 3.13 and 3.14 hereof.
"COMMON STOCK" means the Common Stock, without par value, of the
Company, including, where applicable, the preference stock purchase rights
appurtenant thereto.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "Company" shall
mean such successor.
"COMPANY CERTIFICATE" means a certificate signed by an Authorized
Officer and delivered to the Agent.
"CONTRACT ADJUSTMENT PAYMENTS" means the amounts payable by the Company
in respect of each Purchase Contract issued in connection with the Corporate
Units and the Treasury Units, which amounts shall be equal to _____% per annum
of the Stated Amount; computed on the basis of a 360-day year of twelve 30-day
months, plus any Deferred Contract Adjustment Payments accrued pursuant to
Section 5.2.
"CORPORATE TRUST OFFICE" means the corporate trust office of the Agent
at which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at 101
Barclay Street, Floor 8W, New York, New York 10286.
"CORPORATE UNIT" means a Security, initially issued in substantially
the form set forth as Exhibit A hereto in the Stated Amount of $__, which
represents _______________________________.
"CORPORATE UNIT CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Corporate Units
specified on such certificate.
"CORPORATE UNIT REGISTER" and "CORPORATE UNIT REGISTRAR" have the
respective meanings specified in Section 3.5.
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"COUPON RATE" with respect to a Debt Security means the percentage rate
per annum at which such Debt Security will bear interest.
"CURRENT MARKET PRICE" has the meaning specified in Section 5.6(a)(8).
"DEBT SECURITIES" means the series of debt securities of the Company to
be designated "Series __ Senior Notes due ____________" issued under the
Indenture.
"DEFAULT" means a default by the Company in any of its obligations
under this Agreement.
"DEFERRED CONTRACT ADJUSTMENT PAYMENTS" has the meaning specified in
Section 5.3.
"DEPOSITARY" means, initially, DTC until another Clearing Agency
becomes its successor.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"EARLY SETTLEMENT" has the meaning specified in Section 5.9(a).
"EARLY SETTLEMENT AMOUNT" has the meaning specified in Section 5.9(a).
"EARLY SETTLEMENT DATE" has the meaning specified in Section 5.9(a).
"EARLY SETTLEMENT RATE" has the meaning specified in Section 5.9(b).
"EXCHANGE ACT" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"EXPIRATION DATE" has the meaning specified in Section 1.4.
"EXPIRATION TIME" has the meaning specified in Section 5.6(a)(6).
"FAILED REMARKETING" means a remarketing that does not occur because a
condition precedent to such remarketing is not fulfilled, or if in spite of
using their reasonable efforts, the Remarketing Agents cannot remarket the Debt
Securities of Holders of Corporate Units at a price not less than 100% of the
Remarketing Treasury Portfolio Purchase Price, in the case of the remarketing of
Debt Securities on the Initial Remarketing Date, or 100% of the aggregate
principal amount of such Debt Securities, in the case of the remarketing of Debt
Securities on the Secondary Remarketing Date, in each case, plus accrued and
unpaid interest.
"GLOBAL CERTIFICATE" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Depositary or a nominee
thereof.
"HOLDER," when used with respect to a Security, means the Person in
whose name the Security evidenced by a Corporate Unit Certificate and/or a
Treasury Unit Certificate is registered on the Corporate Unit Register and/or
the Treasury Unit Register, as the case may be.
"INDENTURE" means the Indenture (For Unsecured Debt Securities Series
_) dated as of ____________ between the Company and the Indenture Trustee
pursuant to which the Debt Securities are to be issued, as originally executed
and delivered and as it may from time to time be supplemented or amended by one
or more indentures supplemental thereto entered into pursuant to the applicable
4
provisions thereof and shall include the terms of a particular series of
securities established as contemplated by Section 301 thereof.
"INDENTURE TRUSTEE" means The Bank of New York, as trustee under the
Indenture, or any successor thereto.
"INITIAL REMARKETING DATE" means the third Business Day immediately
preceding the Initial Reset Date.
"INITIAL RESET DATE" means ___________________________________________.
"ISSUER ORDER" or "ISSUER REQUEST" means a written order or request
signed in the name of the Company by an Authorized Officer and delivered to the
Agent.
"NYSE" has the meaning specified in Section 5.1.
"OFFICER'S CERTIFICATE" means a certificate signed by an authorized
signatory of the Company establishing the terms of the debt securities of any
series pursuant to the Indenture.
"OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or an Affiliate and
who shall be reasonably acceptable to the Agent.
"OUTSTANDING," with respect to any Corporate Units or Treasury Units
means, as of the date of determination, all Corporate Units or Treasury Units
evidenced by Certificates theretofore authenticated, executed and delivered
under this Agreement, except:
(i) If a Termination Event has occurred, (A) Treasury Units for which
Treasury Securities have been deposited with the Agent in trust for the Holders
of such Treasury Units and (B) Corporate Units for which Debt Securities or the
appropriate Applicable Ownership Interest in a Treasury Portfolio (or as
contemplated in Section 3.15 hereto with respect to a Holder's interest in the
Treasury Portfolio, cash) has been theretofore deposited with the Agent in trust
for the Holders of such Corporate Units;
(ii) Corporate Units and Treasury Units evidenced by Certificates
theretofore cancelled by the Agent or delivered to the Agent for cancellation or
deemed cancelled pursuant to the provisions of this Agreement; and
(iii) Corporate Units and Treasury Units evidenced by Certificates in
exchange for or in lieu of which other Certificates have been authenticated,
executed on behalf of the Holder and delivered pursuant to this Agreement, other
than any such Certificate in respect of which there shall have been presented to
the Agent proof satisfactory to it that such Certificate is held by a bona fide
purchaser in whose hands the Corporate Units or Treasury Units evidenced by such
Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite number of the Corporate Units or Treasury Units have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Corporate Units or Treasury Units owned by the Company or any Affiliate of the
Company shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Agent shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Corporate Units or Treasury Units which a Responsible Officer of the Agent
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actually knows to be so owned shall be so disregarded. Corporate Units or
Treasury Units so owned which have been pledged in good faith may be regarded as
Outstanding Securities if the pledgee establishes to the satisfaction of the
Agent the pledgee's right so to act with respect to such Corporate Units or
Treasury Units and that the pledgee is not the Company or any Affiliate of the
Company.
"PAYMENT DATE" means each of [(i)] _______, ______, _________ and
___________, commencing _______________ [and (ii)_____________________________].
"PERMITTED INVESTMENTS" has the meaning set forth in Article I of the
Pledge Agreement.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof or any other entity of whatever nature.
"PLEDGE" means the pledge under the Pledge Agreement of the Debt
Securities, the Treasury Securities or the appropriate Applicable Ownership
Interest in a Treasury Portfolio, in each case constituting a part of the
Securities.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Agent, as purchase contract agent and as
attorney-in-fact for the Holders from time to time of Securities, and the
Collateral Agent, as the collateral agent, the custodial agent and the
securities intermediary.
"PLEDGED APPLICABLE OWNERSHIP INTEREST IN A TREASURY PORTFOLIO" has the
meaning specified in Section 2.1 of the Pledge Agreement.
"PLEDGED DEBT SECURITIES" has the meaning specified in Section 2.1 of
the Pledge Agreement.
"PLEDGED TREASURY SECURITIES" has the meaning specified in Section 2.1
of the Pledge Agreement.
"PREDECESSOR CERTIFICATE" means a Predecessor Corporate Unit
Certificate or a Predecessor Treasury Unit Certificate.
"PREDECESSOR CORPORATE UNIT CERTIFICATE" of any particular Corporate
Unit Certificate means every previous Corporate Unit Certificate evidencing all
or a portion of the rights and obligations of the Company and the Holder under
the Corporate Units evidenced thereby; and, for the purposes of this definition,
any Corporate Unit Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Corporate Unit
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Corporate
Unit Certificate.
"PREDECESSOR TREASURY UNIT CERTIFICATE" of any particular Treasury Unit
Certificate means every previous Treasury Unit Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Treasury Units evidenced thereby; and, for the purposes of this definition, any
Treasury Unit Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury Unit
Certificate shall be deemed to evidence the same rights and obligations of the
6
Company and the Holder as the mutilated, destroyed, lost or stolen Treasury Unit
Certificate.
"PRIMARY TREASURY DEALER" means a primary U.S. government securities
dealer in New York City.
"PROCEEDS" has the meaning set forth in Article I of the Pledge
Agreement.
"PURCHASE CONTRACT," when used with respect to any Security, means the
contract forming a part of such Security and obligating the Company (A) to sell
to the Holder of such Security and the Holder of such Security to purchase not
later than the Purchase Contract Settlement Date, for $__ in cash, a number of
newly issued shares of Common Stock equal to the applicable Settlement Rate, and
(B) to pay the Holder Contract Adjustment Payments on the terms and subject to
the conditions set forth in Article Five hereof.
"PURCHASE CONTRACT SETTLEMENT DATE" means ____________.
"PURCHASE CONTRACT SETTLEMENT FUND" has the meaning specified in
Section 5.5.
"PURCHASE PRICE" has the meaning specified in Section 5.1.
"PURCHASED SHARES" has the meaning specified in Section 5.6(a)(6).
"QUOTATION AGENT" means (i) _____________________________________ or
its successor, provided, however, that, if the foregoing shall cease to be a
Primary Treasury Dealer, the Company shall substitute therefor another Primary
Treasury Dealer, and (ii) any other Primary Treasury Dealer selected by the
Company.
"RECORD DATE" for the payment of interest, distribution and Contract
Adjustment Payments payable on any Payment Date means, as to any Global
Certificate, the Business Day next preceding such Payment Date, and as to any
other Certificate, a day selected by the Company which shall be at least one
Business Day but not more than 60 Business Days prior to such Payment Date (and
which shall correspond to the related record date for the Debt Securities).
"REDEMPTION AMOUNT" means for each Debt Security, the product of (i)
the principal amount of such Debt Security and (ii) a fraction whose numerator
is the applicable Treasury Portfolio Purchase Price and whose denominator is the
Applicable Principal Amount.
"REDEMPTION PRICE" means an amount per Debt Security equal to the
Redemption Amount plus accrued and unpaid interest, if any, to the date of
redemption.
"REGISTER" means the Corporate Unit Register and the Treasury Unit
Register.
"REGISTRAR" means the Corporate Unit Registrar and the Treasury Unit
Registrar.
"REMARKETING AGENTS" has the meaning specified in Section 5.4.
"REMARKETING AGREEMENT" means a Remarketing Agreement contemplated by
Section 5.4 by and between the Company, the Remarketing Agents and the Purchase
Contract Agent, including any supplements thereto.
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"REMARKETING FEE" means an amount not exceeding __ basis points (.__%)
of (i) the applicable Treasury Portfolio Purchase Price, in the case of any
successful remarketing of Debt Securities on the Initial Remarketing Date, or
(ii) the aggregate principal amount of the remarketed Debt Securities, in the
case of any successful remarketing of Debt Securities on the Secondary
Remarketing Date.
"REMARKETING TREASURY PORTFOLIO" means ______________________________.
"REMARKETING TREASURY PORTFOLIO PURCHASE PRICE" means the lowest
aggregate price quoted by a Primary Treasury Dealer to the Quotation Agent on
the third Business Day immediately preceding the Initial Reset Date for the
purchase of the Remarketing Treasury Portfolio for settlement on the Initial
Reset Date.
"REORGANIZATION EVENT" has the meaning specified in Section 5.6(b).
"RESET AGENT" means __________________________________________________,
or such other Reset Agent as the Company shall select from time to time.
"RESET ANNOUNCEMENT DATE" means the seventh Business Day immediately
preceding the Reset Date, the date on which the Reset Spread, and the Applicable
Benchmark Treasury will be announced by the Company.
"RESET DATE" means the Initial Reset Date, or if the remarketing of the
Debt Securities on the Initial Remarketing Date results in a Failed Remarketing,
____________.
"RESET RATE" means the Coupon Rate to be in effect for the Debt
Securities on and after the Reset Date and determined as provided in Section
4.1.
"RESPONSIBLE OFFICER," when used with respect to the Agent, means any
Vice President, Assistant Vice President, Trust Officers or other officer of the
Agent assigned by the Agent to the Corporate Trust Administration Division of
the Agent (or any successor division or department of the Agent).
"SECONDARY REMARKETING DATE" means the third Business Day immediately
preceding ____________.
"SECURITY" means a Corporate Unit or a Treasury Unit.
"SENIOR INDEBTEDNESS" means indebtedness of any kind of the Company
(including the Debt Securities) unless the instrument under which such
indebtedness is incurred expressly provides that it is in parity or subordinate
in right of payment to the Contract Adjustment Payments.
"SETTLEMENT RATE" has the meaning specified in Section 5.1.
"STATED AMOUNT" means $__, which is equal to the stated amount of a
Corporate Unit and the face amount of a Treasury Unit.
"TAX EVENT" means the receipt by the Company of an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, change in, or announced
proposed change in, the laws (or any regulations thereunder) of the United
8
States or any political subdivision or taxing authority thereof or therein
affecting taxation, (b) any amendment to or change in an interpretation or
application of any such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any interpretation or
pronouncement by any such legislative body, court, governmental agency or
regulatory authority that provides for a position with respect to any such laws
or regulations that differs from the generally accepted position on
________________, which amendment, change or proposed change is effective or
which interpretation or pronouncement is announced on or after ______________,
there is more than an insubstantial risk that interest payable by the Company on
the Debt Securities would not be deductible, in whole or in part, by the Company
for United States federal income tax purposes.
"TAX EVENT REDEMPTION" means, if a Tax Event shall occur and be
continuing, the redemption of Debt Securities, in whole but not in part, at the
option of the Company on not less than 30 days nor more than 60 days notice.
"TAX EVENT REDEMPTION DATE" means the date on which a Tax Event
Redemption is to occur.
"TAX EVENT TREASURY PORTFOLIO" means ___________________________.
"TAX EVENT TREASURY PORTFOLIO PURCHASE PRICE" means _______________.
"TERMINATION DATE" means the date, if any, on which a Termination Event
occurs.
"TERMINATION EVENT" means the occurrence of any of the following
events: (i) at any time on or prior to the Purchase Contract Settlement Date, a
judgment, decree or court order shall have been entered granting relief under
the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of the Company
or any other similar applicable Federal or State law, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such decree or order shall have continued undischarged
and unstayed for a period of 60 days; or (ii) at any time on or prior to the
Purchase Contract Settlement Date, a judgment, decree or court order for the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the winding up or
liquidation of its affairs, shall have been entered, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such judgment, decree or order shall have continued
undischarged and unstayed for a period of 60 days; or (iii) at any time on or
prior to the Purchase Contract Settlement Date the Company shall file a petition
for relief under the Bankruptcy Code, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or consent
seeking reorganization or liquidation under the Bankruptcy Code or any other
similar applicable Federal or State law, or shall consent to the filing of any
such petition, or shall consent to the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency of it or of its property, or
shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due.
"THRESHOLD APPRECIATION PRICE" has the meaning specified in Section
5.1.
"TIA" means, as of any time, the Trust Indenture Act of 1939, as
amended, or any successor statute, as in effect at such time.
"TRADING DAY" has the meaning specified in Section 5.1.
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"TREASURY PORTFOLIO" means the receipt by the Company of an opinion of
a nationally recognized independent tax counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, change in, or announced
proposed change in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, (b) any amendment to or change in an interpretation or
application of any such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any interpretation or
pronouncement by any such legislative body, court, governmental agency or
regulatory authority that provides for a position with respect to any such laws
or regulations that differs from the generally accepted position on
__________________, which amendment, change or proposed change is effective or
which interpretation or pronouncement is announced on or after ____________,
there is more than an insubstantial risk that interest payable by the Company on
the Debt Securities would not be deductible, in whole or in part, by the Company
for United States federal income tax purposes.
"TREASURY PORTFOLIO PURCHASE PRICE" means, as applicable, the
Remarketing Treasury Portfolio Purchase Price or the Tax Event Treasury
Portfolio Purchase Price.
"TREASURY SECURITY" means a zero-coupon U.S. Treasury security having a
principal amount at maturity equal to $[1,000] and maturing on ____________
(CUSIP No. _________).
"TREASURY UNITS" means a Security, initially issued in substantially
the form set forth as Exhibit B hereto in a Stated Amount of $__, which
represents _________________________________.
"TREASURY UNIT CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Treasury Units specified
on such certificate.
"TREASURY UNIT REGISTER" and "TREASURY UNIT REGISTRAR" have the
respective meanings specified in Section 3.5.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated
____________ relating to the Corporate Units among the Company and
_____________________________________.
"VICE PRESIDENT" means any vice president, whether or not designated by
a number or a word or words added before or after the title "vice president."
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent a Company
Certificate stating that in the opinion of the Authorized Officer signing such
Company Certificate all conditions precedent, if any, provided for in this
Agreement relating to the proposed action have been complied with and an Opinion
of Counsel stating that, in the opinion of such counsel, all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
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(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO AGENT.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4 ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Agent and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and (subject to
Section 7.1) conclusive in favor of the Agent and the Company, if made in
the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent
deems sufficient.
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(c) The ownership of Securities shall be proved by the Corporate Unit
Register or the Treasury Unit Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Certificate shall bind every
future Holder of the same Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof in respect of anything done, omitted or suffered to be done
by the Agent or the Company in reliance thereon, whether or not notation of
such action is made upon such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Agreement to be given, made
or taken by Holders of Securities. If any record date is set pursuant to
this paragraph, the Holders of the Outstanding Corporate Units and the
Outstanding Treasury Units, as the case may be, on such record date, and no
other Holders, shall be entitled to take the relevant action with respect
to the Corporate Units or the Treasury Units, as the case may be, whether
or not such Holders remain Holders after such record date; provided that no
such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite number of
Outstanding Securities on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and of no effect), and nothing in
this paragraph shall be construed to render ineffective any action taken by
Holders of the requisite number of Outstanding Securities on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration
Date to be given to the Agent in writing and to each Holder of Securities
in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration Date
is given to the Agent in writing, and to each Holder of Securities in the manner
set forth in Section 1.6, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the Company shall be deemed to have initially designated the
180th day after such record date as the Expiration Date with respect thereto,
subject to its right to change the Expiration Date as provided in this
paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than
the 180th day after the applicable record date.
SECTION 1.5 NOTICES.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, to the Agent at The Bank of New York,
101 Barclay Street, New York, New York 10286, Attention: Vice President,
12
Corporate Trust Administration, or at any other address previously
furnished in writing by the Agent to the Holders and the Company;
(2) the Company by the Agent or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, to the Company at TXU Corp., Energy
Plaza, 1601 Bryan Street, Dallas, Texas 75201, Attention: Secretary, or at
any other address previously furnished in writing to the Agent by the
Company;
(3) the Collateral Agent by the Agent, the Company or any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, addressed to
the Collateral Agent at ________________________________________________,
Attention: _____________________, or at any other address previously
furnished in writing by the Collateral Agent to the Agent, the Company and
the Holders; or
(4) the Indenture Trustee by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, addressed to the Indenture Trustee at
The Bank of New York, 101 Barclay Street, New York, New York 10286,
Attention: Vice President, Corporate Trust Administration, or at any other
address previously furnished in writing by the Indenture Trustee to the
Company.
SECTION 1.6 NOTICE TO HOLDERS; WAIVER.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the applicable Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Agent, but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Agent shall
constitute a sufficient notification for every purpose hereunder.
SECTION 1.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.8 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
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SECTION 1.9 SEPARABILITY CLAUSE.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
SECTION 1.10 BENEFITS OF AGREEMENT.
Nothing in this Agreement or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and, to the extent provided hereby, the Holders, any benefits or any
legal or equitable right, remedy or claim under this Agreement. The Holders from
time to time shall be beneficiaries of this Agreement and shall be bound by all
of the terms and conditions hereof and of the Securities evidenced by their
Certificates by their acceptance of delivery of such Certificates.
SECTION 1.11 GOVERNING LAW.
THIS AGREEMENT AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 1.12 LEGAL HOLIDAYS.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Corporate Unit
Certificates or the Treasury Unit Certificates) payment of the Contract
Adjustment Payments, if any, shall not be made on such date, but such payments
shall be made on the next succeeding Business Day with the same force and effect
as if made on such Payment Date, and no interest shall accrue or be payable by
the Company or any Holder for the period from and after any such Payment Date,
except that, if such next succeeding Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day with the same force and effect as if made on such Payment Date.
In any case where the Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement, the
Corporate Unit Certificates or the Treasury Unit Certificates), the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the immediately following Business Day with the same force and
effect as if performed on the Purchase Contract Settlement Date.
SECTION 1.13 COUNTERPARTS.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
SECTION 1.14 INSPECTION OF AGREEMENT.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder.
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ARTICLE II
CERTIFICATE FORMS
SECTION 2.1 FORMS OF CERTIFICATES GENERALLY.
The Corporate Unit Certificates (including the form of Purchase
Contract forming part of the Corporate Units evidenced thereby) shall be in
substantially the form set forth in Exhibit A hereto, with such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Corporate Units are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Corporate Unit Certificates, as evidenced by their
execution of the Corporate Unit Certificates.
The definitive Corporate Unit Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Corporate Units evidenced by such Corporate Unit Certificates, consistent with
the provisions of this Agreement, as evidenced by their execution thereof.
The Treasury Unit Certificates (including the form of Purchase
Contracts forming part of the Treasury Units evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Treasury Units may be listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Treasury Unit Certificates, as evidenced by their
execution of the Treasury Unit Certificates.
The definitive Treasury Unit Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Treasury Units evidenced by such Treasury Unit Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
SECTION 2.2 FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION.
The form of the Agent's certificate of authentication of the Corporate
Units shall be in substantially the form set forth on the form of the Corporate
Unit Certificates set forth as Exhibit A hereto.
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The form of the Agent's certificate of authentication of the Treasury
Units shall be in substantially the form set forth on the form of the Treasury
Unit Certificates set forth as Exhibit B hereto.
ARTICLE III
THE SECURITIES
SECTION 3.1 TITLE AND TERMS; DENOMINATIONS.
The aggregate number of Corporate Units and Treasury Units evidenced by
Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to _________ units [(or __________ if the overallotment
option provided for in the Underwriting Agreement is exercised in full)] except
for Certificates authenticated, executed and delivered upon registration of
transfer of, in exchange for, or in lieu of, other Certificates pursuant to
Section 3.4, 3.5, 3.10, 3.12, 3.13, 5.9 or 8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Corporate Unit or Treasury Unit and any integral
multiple thereof.
SECTION 3.2 RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES.
Each Corporate Unit Certificate shall evidence the number of Corporate
Units specified therein, with each such Corporate Unit representing the
ownership by the Holder thereof of a beneficial interest in a Debt Security or
the Applicable Ownership Interest in the appropriate Treasury Portfolio, as the
case may be, subject to the Pledge of such Debt Security or Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, by such
Holder pursuant to the Pledge Agreement, and the rights and obligations of the
Holder thereof and the Company under one Purchase Contract. The Agent as
attorney-in-fact for, and on behalf of, the Holder of each Corporate Unit shall
pledge, pursuant to the Pledge Agreement, each Debt Security or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
forming a part of such Corporate Unit, to the Collateral Agent and grant to the
Collateral Agent a security interest in the right, title, and interest of such
Holder in such Debt Security or Applicable Ownership Interest in the appropriate
Treasury Portfolio, as the case may be, for the benefit of the Company, to
secure the obligation of the Holder under one Purchase Contract to purchase the
Common Stock of the Company.
Each Treasury Unit Certificate shall evidence the number of Treasury
Units specified therein, with each such Treasury Unit representing the ownership
by the Holder thereof of a [1/20], or [5%], undivided beneficial interest in a
Treasury Security, subject to the Pledge of such Treasury Security by such
Holder pursuant to the Pledge Agreement, and the rights and obligations of the
Holder thereof and the Company under one Purchase Contract. The Agent as
attorney-in-fact for, and on behalf of, the Holder of each Treasury Unit shall
pledge, pursuant to the Pledge Agreement, each Treasury Security forming a part
of such Treasury Unit, to the Collateral Agent and grant to the Collateral Agent
a security interest in the right, title, and interest of such Holder in such
Treasury Security for the benefit of the Company, to secure the obligation of
the Holder under one Purchase Contract to purchase the Common Stock of the
Company.
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Agent for authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such Certificates, and the
16
Agent in accordance with such Issuer Order shall authenticate, execute on behalf
of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President, one of its Vice Presidents, its Treasurer,
one of its Assistant Treasurers, its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Certificates may be
manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent shall
be conclusive evidence that the Holder of such Certificate has entered into the
Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or
be valid or obligatory for any purpose unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Agent by manual signature, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder.
SECTION 3.4 TEMPORARY CERTIFICATES.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holders, and deliver, in lieu of such definitive Certificates,
temporary Certificates which are in substantially the forms set forth in Exhibit
A and Exhibit B hereto, with such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Corporate Units or Treasury Units are listed,
or as may, consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, one or more definitive Certificates of like tenor and denominations
and evidencing a like number of Corporate Units or Treasury Units, as the case
may be, as the temporary Certificate or Certificates so surrendered. Until so
exchanged, the temporary Certificates shall in all respects evidence the same
benefits and the same obligations with respect to the Corporate Units or
Treasury Units, as the case may be, evidenced thereby as definitive
Certificates.
17
SECTION 3.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
The Agent shall keep at the Corporate Trust Office a register (the
"Corporate Unit Register") in which, subject to such reasonable regulations as
it may prescribe, the Agent shall provide for the registration of Corporate Unit
Certificates and of transfers of Corporate Unit Certificates (the Agent, in such
capacity, the "Corporate Unit Registrar") and a register (the "Treasury Unit
Register") in which, subject to such reasonable regulations as it may prescribe,
the Agent shall provide for the registration of the Treasury Unit Certificates
and of transfers of Treasury Unit Certificates (the Agent, in such capacity, the
"Treasury Unit Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of any authorized denominations, like
tenor, and evidencing a like number of Corporate Units or Treasury Units as the
case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Corporate Units or Treasury Units, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of the
Holder, and deliver the Certificates which the Holder making the exchange is
entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of a Certificate shall evidence the ownership of the same number of Corporate
Units or Treasury Units, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this Agreement as the
Corporate Units or Treasury Units, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Agent, duly executed by the Holder thereof
or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Agent may require payment
from the Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates, other than any exchanges pursuant to Sections 3.6 and
8.5 not involving any transfer.
Notwithstanding the foregoing, the Company will not be obligated to
execute and deliver to the Agent, and the Agent will not be obligated to
authenticate, execute on behalf of the Holder and deliver any Certificate
presented or surrendered for registration of transfer or for exchange on or
after the Business Day immediately preceding the Purchase Contract Settlement
Date or on or after the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date
has occurred, deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
Certificate, (ii) in the case of Corporate Units, if a Termination Event shall
have occurred prior to the Purchase Contract Settlement Date, transfer the
aggregate principal amount of the Debt Securities or the aggregate Stated Amount
of the appropriate Treasury Portfolio, as applicable, evidenced thereby, or
18
(iii) in the case of Treasury Units, if a Termination Event shall have occurred
prior to the Purchase Contract Settlement Date, transfer the Treasury Securities
evidenced thereby, in each case subject to the applicable conditions and in
accordance with the applicable provisions of Article V hereof.
SECTION 3.6 BOOK-ENTRY INTERESTS.
The Certificates, on original issuance, will be issued in the form of
one or more fully registered Global Certificates, to be delivered to the
Depositary or a nominee or custodian thereof by, or on behalf of, the Company.
Such Global Certificates shall initially be registered on the books and records
of the Company in the name of Cede & Co., the nominee of the Depositary, and no
Beneficial Owner will receive a definitive Certificate representing such
Beneficial Owner's interest in such Global Certificate, except as provided in
Section 3.9. The Agent shall enter into an agreement with the Depositary if so
requested by the Company. Unless and until definitive, fully registered
Certificates have been issued to Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full force and
effect;
(b) the Company shall be entitled to deal with the Clearing Agency
for all purposes of this Agreement (including the payment of Contract
Adjustment Payments, if any, and receiving approvals, votes or consents
hereunder) as the Holder of the Securities and the sole holder of the
Global Certificate(s) and shall have no obligation to the Beneficial
Owners;
(c) to the extent that the provisions of this Section 3.6 conflict
with any other provisions of this Agreement, the provisions of this Section
3.6 shall control; and
(d) the rights of the Beneficial Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Beneficial Owners and the Clearing Agency
and/or the Clearing Agency Participants. The Clearing Agency will make book
entry transfers among Clearing Agency Participants and receive and transmit
payments of Contract Adjustment Payments to such Clearing Agency
Participants.
SECTION 3.7 NOTICES TO HOLDERS.
Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any
Certificates registered in the name of a Clearing Agency or the nominee of a
Clearing Agency, the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.
SECTION 3.8 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Clearing Agency with respect to the Securities.
SECTION 3.9 DEFINITIVE CERTIFICATES.
If (i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 3.8, or (ii) the Company elects to terminate the book-entry system
through the Clearing Agency with respect to the Securities, then upon surrender
of the Global Certificates representing the Book-Entry Interests with respect to
19
the Securities by the Clearing Agency, accompanied by registration instructions,
the Company shall cause definitive Certificates to be delivered to Beneficial
Owners in accordance with the instructions of the Clearing Agency. The Company
shall not be liable for any delay in delivery of such instructions and may
conclusively rely on and shall be protected in relying on, such instructions.
SECTION 3.10 MUTILATED, DESTROYED, LOST AND STOLEN CERTIFICATES.
If any mutilated Certificate is surrendered to the Agent, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, a new
Certificate at the cost of the Holder, evidencing the same number of Corporate
Units or Treasury Units, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i) evidence
to their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity at the cost of the Holder as may be required by
them to hold each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Agent that such Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen
Certificate, a new Certificate, evidencing the same number of Corporate Units or
Treasury Units, as the case may be, and bearing a Certificate number not
contemporaneously outstanding.
Notwithstanding the foregoing, the Company will not be obligated to
execute and deliver to the Agent, and the Agent will not be obligated to
authenticate, execute on behalf of the Holder and deliver any Certificate on or
after the Business Day immediately preceding the Purchase Contract Settlement
Date or on or after the Termination Date. In addition, in lieu of delivery of a
new Certificate, upon satisfaction of the applicable conditions specified above
in this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent may (i) if the Purchase Contract Settlement Date has
occurred, deliver the shares of Common Stock issuable in respect of the Purchase
Contracts forming a part of the Securities evidenced by such Certificate, or
(ii) if a Termination Event shall have occurred, transfer the Debt Securities,
the Applicable Ownership Interest in the appropriate Treasury Portfolio or the
Treasury Securities, as the case may be, forming a part of the Securities
represented by such Certificate to such Holder, in each case subject to the
applicable conditions and in accordance with the applicable provisions of
Article Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Agent may require payment from the Holder of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Agent)
connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
20
SECTION 3.11 PERSONS DEEMED OWNERS.
Prior to due presentment of a Certificate for registration of transfer,
the Company and the Agent, and any agent of the Company or the Agent, may treat
the Person in whose name such Certificate is registered on the Corporate Units
Register or the Treasury Units Register, as applicable, as the owner of the
Corporate Units or Treasury Units evidenced thereby, for the purpose of
receiving interest on the Debt Securities or distributions on the maturing
quarterly interest strips of the appropriate Treasury Portfolio, as applicable,
receiving payments of Contract Adjustment Payments, performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any interest on
the Debt Securities or the Contract Adjustment Payments payable in respect of
the Purchase Contracts constituting a part of the Corporate Units or Treasury
Units evidenced thereby shall be overdue and notwithstanding any notice to the
contrary, and neither the Company nor the Agent, nor any agent of the Company or
the Agent, shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing herein shall prevent the Company, the Agent or any agent of the Company
or the Agent, from treating the Clearing Agency as the sole Holder of such
Global Certificate or from giving effect to any written certification, proxy or
other authorization furnished by any Clearing Agency (or its nominee), as a
Holder, with respect to such Global Certificate or impair, as between such
Clearing Agency and owners of beneficial interests in such Global Certificate,
the operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
SECTION 3.12 CANCELLATION.
All Certificates surrendered for delivery of shares of Common Stock on
or after the Purchase Contract Settlement Date, upon the transfer of Debt
Securities, the Applicable Ownership Interest in the appropriate Treasury
Portfolio or Treasury Securities, as the case may be, after the occurrence of a
Termination Event or pursuant to an Early Settlement, or upon the registration
of a transfer or exchange of a Security, or a Collateral Substitution or the
re-establishment of a Corporate Unit shall, if surrendered to any Person other
than the Agent, be delivered to the Agent and, if not already cancelled, shall
be promptly cancelled by it. The Company may at any time deliver to the Agent
for cancellation any Certificates previously authenticated, executed and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Certificates so delivered shall, upon Issuer Order, be
promptly cancelled by the Agent. No Certificates shall be authenticated,
executed on behalf of the Holder and delivered in lieu of or in exchange for any
Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Agent shall
upon written request be returned to the Company.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
SECTION 3.13 ESTABLISHMENT OR REESTABLISHMENT OF TREASURY UNITS.
A Holder of a Corporate Unit may, at any time on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, create
or recreate a Treasury Unit and separate the Debt Security or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as applicable, from
the related Purchase Contract in respect of such Corporate Unit by substituting
a Treasury Security for the Debt Security, or the Applicable Ownership Interest
in the appropriate Treasury Portfolio, that form a part of such Corporate Unit
in accordance with this Section 3.13; provided, however, that if a successful
remarketing of the Debt Securities has occurred on the Initial Remarketing Date
21
or a Tax Event Redemption has occurred, Holders of such Corporate Units may make
such Collateral Substitutions at any time on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date. Holders may make
Collateral Substitutions and establish Treasury Units (i) only in integral
multiples of __ Corporate Units if only Debt Securities are being substituted by
Treasury Securities, or (ii) only in integral multiples of ______ Corporate
Units if the Applicable Ownership Interests in the appropriate Treasury
Portfolio are being substituted by Treasury Securities. To create __ Treasury
Units (if a Tax Event Redemption has not occurred and the Debt Securities remain
a component of the Corporate Units), or ______ Treasury Units (if a Tax Event
Redemption has occurred or the Remarketing Treasury Portfolio has replaced the
Debt Securities as a component of the Corporate Units as a result of a
successful remarketing of such Debt Securities), the Corporate Unit Holder shall
(a) if a Treasury Portfolio has not replaced any Debt Securities as a
component of Corporate Units as a result of a successful remarketing of the
Debt Securities or a Tax Event Redemption, deposit with the Collateral
Agent a Treasury Security having a principal amount at maturity of
$[1,000]; or
(b) if a Treasury Portfolio has replaced the Debt Securities as a
component of Corporate Units as a result of a successful remarketing of the
Debt Securities or a Tax Event Redemption, on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date,
deposit with the Collateral Agent Treasury Securities having an aggregate
principal amount at maturity of $_________; and
(c) in each case, transfer and surrender the related __ Corporate
Units, or, in the event a Treasury Portfolio is a component of Corporate
Units, ______ Corporate Units, to the Agent accompanied by a notice to the
Agent, substantially in the form of Exhibit B to the Pledge Agreement,
stating that the Holder has transferred the relevant types and amounts of
Treasury Securities to the Collateral Agent and requesting that the Agent
instruct the Collateral Agent to release the applicable Debt Securities or
the Applicable Ownership Interest in the appropriate Treasury Portfolio, as
the case may be, underlying such Corporate Unit, whereupon the Agent shall
promptly give such instruction to the Collateral Agent, substantially in
the form of Exhibit A to the Pledge Agreement.
Upon receipt of the Treasury Securities described in clause (a) or (b)
above and the instructions described in clause (c) above, in accordance with the
terms of the Pledge Agreement, the Collateral Agent will release from the
Pledge, to the Agent, on behalf of the Holder, Debt Securities or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
that had been components of such Corporate Unit, free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Corporate Units surrendered and transferred;
(ii) transfer the Debt Securities or the Applicable Ownership Interest
in the appropriate Treasury Portfolio, as the case may be, that had been
components of such Corporate Unit to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Treasury Unit Certificate executed by the Company in accordance with Section 3.3
evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Corporate Units.
Holders who elect to separate the Debt Securities or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
from the related Purchase Contracts and to substitute Treasury Securities for
22
such Debt Securities or the Applicable Ownership Interest in the appropriate
Treasury Portfolio, as the case may be, shall be responsible for any fees or
expenses payable to the Collateral Agent for its services as Collateral Agent in
respect of the substitution, and the Company shall not be responsible for any
such fees or expenses.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Corporate Units or
fails to deliver a Corporate Unit Certificate to the Agent after depositing the
appropriate Treasury Securities with the Collateral Agent, the Debt Securities
or the Applicable Ownership Interest in the appropriate Treasury Portfolio, as
the case may be, constituting a part of such Corporate Unit, and any interest on
such Debt Securities or distributions with respect to the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, shall be
held in the name of the Agent or its nominee in trust for the benefit of such
Holder, until such Corporate Unit is so transferred or the Corporate Unit
Certificate is so delivered, as the case may be, or, until such Holder provides
evidence satisfactory to the Company and the Agent that such Corporate Unit
Certificate has been destroyed, lost or stolen, together with any indemnity that
may be required by the Agent and the Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying a Corporate Unit remains in effect, such Corporate Unit
shall not be separable into its constituent parts, and the rights and
obligations of the Holder in respect of the Debt Securities or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
and Purchase Contract comprising such Corporate Unit may be acquired, and may be
transferred and exchanged, only as an entire Corporate Unit.
SECTION 3.14 ESTABLISHMENT OR REESTABLISHMENT OF CORPORATE UNITS.
A Holder of a Treasury Unit may, at any time on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, create
or recreate a Corporate Unit by depositing with the Collateral Agent a Debt
Security or the Applicable Ownership Interest in the appropriate Treasury
Portfolio, as the case may be, having an aggregate principal amount equal to the
aggregate principal amount at maturity of, and in substitution for all, but not
less than all, of the Treasury Securities comprising part of the Treasury Unit
in accordance with this Section 3.14; provided, however, that if a Treasury
Portfolio has replaced the Debt Securities as a component of Corporate Units as
a result of a successful remarketing of the Debt Securities or a Tax Event
Redemption, such Collateral Substitutions may be made at any time on or prior to
the second Business Day immediately preceding the Purchase Contract Settlement
Date. Holders of Treasury Units may make such Collateral Substitutions and
establish Corporate Units (i) only in integral multiples of __ Treasury Units if
Treasury Securities are being replaced by only Debt Securities, or (ii) only in
integral multiples of ______ Treasury Units if any Treasury Security is being
replaced by the Applicable Ownership Interest in the appropriate Treasury
Portfolio. To create __ Corporate Units (if a Tax Event Redemption has not
occurred and the Debt Securities remain components of Corporate Units), or
______ Corporate Units (if a Tax Event Redemption has occurred or the
Remarketing Treasury Portfolio has replaced the Debt Securities as a result of a
successful remarketing of such Debt Securities), the Treasury Unit Holder shall
(a) if a Treasury Portfolio has not replaced the Debt Securities as a
component of Corporate Units as a result of a successful remarketing of the Debt
Securities on the Initial Remarketing Date or a Tax Event Redemption, on or
prior to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, deposit with the Collateral Agent $[1,000] in aggregate
principal amount of Debt Securities; or
(b) if a Treasury Portfolio has replaced the Debt Securities as a
component of Corporate Units as a result of a successful remarketing of the Debt
Securities or a Tax Event Redemption, on or prior to the second Business Day
23
immediately preceding the Purchase Contract Settlement Date, deposit with the
Collateral Agent the Applicable Ownership Interest in the Treasury Portfolio for
each ______ Corporate Units being created by the Holder, and having an aggregate
principal amount of $_________; and
(c) in each case, transfer and surrender the related __ Treasury
Units, or in the event the Treasury Portfolio is a component of Corporate Units,
______ Corporate Units, to the Agent accompanied by a notice to the Agent,
substantially in the form of Exhibit B to the Pledge Agreement, stating that the
Holder has transferred the relevant amount of Debt Securities or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be, to
the Collateral Agent and requesting that the Agent instruct the Collateral Agent
to release the Treasury Securities underlying such Treasury Units, whereupon the
Agent shall promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit A to the Pledge Agreement.
Upon receipt of the Debt Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, described in
clause (a) or (b) above and the instructions described in clause (c) above, in
accordance with the terms of the Pledge Agreement, the Collateral Agent will
effect the release of the Treasury Securities having a corresponding aggregate
principal amount from the Pledge to the Agent free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Treasury Units surrendered and transferred;
(ii) transfer the Treasury Securities that had been components of such
Treasury Units to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Corporate Unit Certificate executed by the Company in accordance with Section
3.3 evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Treasury Units.
Holders who elect to separate Treasury Securities from the related
Purchase Contract and to substitute Debt Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, for such
Treasury Securities shall be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any such fees or
expenses.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.14 fails to effect a book-entry transfer of the Treasury Units or
fails to deliver a Treasury Unit Certificate to the Agent after depositing the
Debt Securities or Applicable Ownership Interest in the appropriate Treasury
Portfolio with the Collateral Agent, the Treasury Securities constituting a part
of such Treasury Unit Certificate, and any interest on such Treasury Securities,
shall be held in the name of the Agent or its nominee in trust for the benefit
of such Holder, until such Treasury Unit is so transferred or the Treasury Unit
is so delivered, or until such Holder provides evidence satisfactory to the
Company and the Agent that such Treasury Unit has been destroyed, lost or
stolen, together with any indemnity that may be required by the Agent and the
Company.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Treasury Unit remains in effect, such Treasury Unit shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Treasury Unit in respect of the Treasury Security and
Purchase Contract comprising such Treasury Unit may be acquired, and may be
transferred and exchanged only as an entire Treasury Unit.
24
SECTION 3.15 TRANSFER OF COLLATERAL UPON OCCURRENCE OF TERMINATION EVENT.
Upon the occurrence of a Termination Event and the transfer to the
Agent of the Debt Securities, the Applicable Ownership Interest in the
appropriate Treasury Portfolio or the Treasury Securities, as the case may be,
underlying the Corporate Units and the Treasury Units pursuant to the terms of
the Pledge Agreement, the Agent shall request transfer instructions with respect
to such Debt Securities or the Applicable Ownership Interest in the appropriate
Treasury Portfolio or Treasury Securities, as the case may be, from each Holder
by written request mailed to such Holder at its address as it appears in the
Corporate Unit Register or the Treasury Unit Register, as the case may be. Upon
book-entry transfer of a Corporate Unit Certificate or Treasury Unit Certificate
or delivery of a Corporate Unit Certificate or Treasury Unit Certificate to the
Agent with such transfer instructions, the Agent shall transfer the Debt
Securities, the Applicable Ownership Interest in the appropriate Treasury
Portfolio or Treasury Securities, as the case may be, underlying such Corporate
Units or Treasury Units, as the case may be, to such Holder by book-entry
transfer, or other appropriate procedures, in accordance with such instructions.
In the event a Holder of Corporate Units or Treasury Units fails to effect such
transfer or delivery, the Debt Securities, the Applicable Ownership Interest in
the appropriate Treasury Portfolio or Treasury Securities, as the case may be,
underlying such Corporate Units or Treasury Units, as the case may be, and any
interest thereon, shall be held in the name of the Agent or its nominee in trust
for the benefit of such Holder, until such Corporate Units or Treasury Units are
transferred or the Corporate Unit Certificate or Treasury Unit Certificate is
surrendered or such Holder provides satisfactory evidence that such Corporate
Unit Certificate or Treasury Unit Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the Agent and the
Company. In the case of a Treasury Portfolio or any Treasury Securities, the
Agent may dispose of the subject securities for cash and pay the applicable
portion of such cash to the Holders in lieu of such Holders' Applicable
Ownership Interest in such Treasury Portfolio, or any Treasury Securities, where
such Holder would otherwise have been entitled to receive less than $[1,000] of
any such security.
SECTION 3.16 NO CONSENT TO ASSUMPTION.
Each Holder of a Security, by acceptance thereof, will be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company, its
trustee in bankruptcy, receiver, liquidator or a person or entity performing
similar functions, in the event that the Company becomes a debtor under the
Bankruptcy Code or subject to other similar State or Federal law providing for
reorganization or liquidation.
ARTICLE IV
THE DEBT SECURITIES
SECTION 4.1 PAYMENT OF INTEREST; RIGHTS TO INTEREST PRESERVED; INTEREST RATE
RESET; NOTICE.
A payment of interest on the Debt Securities or distribution with
respect to the Applicable Ownership Interest in the appropriate Treasury
Portfolio, as the case may be, which is paid on any Payment Date shall, subject
to receipt thereof by the Agent from the Collateral Agent as provided by the
terms of the Pledge Agreement, be paid to the Person in whose name the Corporate
Unit Certificate (or one or more Predecessor Corporate Unit Certificates) of
which such Debt Securities or the Applicable Ownership Interest in the
appropriate Treasury Portfolio, as the case may be, are a part is registered at
the close of business on the Record Date for such Payment Date.
Each Corporate Unit Certificate evidencing Debt Securities delivered
under this Agreement upon registration of transfer of or in exchange for or in
lieu of any other Corporate Unit Certificate shall carry the rights to payment
25
of interest accrued and unpaid, and to accrue interest, which are carried by the
Debt Securities underlying such other Corporate Unit Certificate.
In the case of any Corporate Unit with respect to which Cash Settlement
of the underlying Purchase Contract is effected on the Business Day immediately
preceding the Purchase Contract Settlement Date pursuant to prior notice, or
with respect to which Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date, or with respect to which a Collateral
Substitution is effected, in each case on a date that is after any Record Date
and on or prior to the next succeeding Payment Date, interest on the Debt
Securities or distributions with respect to the Applicable Ownership Interest in
the appropriate Treasury Portfolio, as the case may be, underlying such
Corporate Unit otherwise payable on such Payment Date shall be payable on such
Payment Date notwithstanding such Cash Settlement or Early Settlement or
Collateral Substitution, and such interest or distributions shall, subject to
receipt thereof by the Agent, be payable to the Person in whose name the
Corporate Unit Certificate (or one or more Predecessor Corporate Unit
Certificates) was registered at the close of business on the Record Date. Except
as otherwise expressly provided in the immediately preceding sentence, in the
case of any Corporate Unit with respect to which Cash Settlement or Early
Settlement of the underlying Purchase Contract is effected on the Business Day
immediately preceding the applicable Purchase Contract Settlement Date or an
Early Settlement Date, as the case may be, or with respect to which a Collateral
Substitution has been effected, payment of interest on the related Debt
Securities or distributions with respect to the Applicable Ownership Interest in
the appropriate Treasury Portfolio, as the case may be, that would otherwise be
payable after the Purchase Contract Settlement Date or Early Settlement Date
shall not be payable hereunder to the Holder of such Corporate Unit; provided,
however, that to the extent that such Holder continues to hold the separated
Debt Security that formerly comprised a part of such Holder's Corporate Unit,
such Holder shall be entitled to receive the payment of interest on such
separated Debt Security.
The Reset Rate on the Debt Securities to be in effect on and after the
Reset Date will be determined on the third Business Day immediately preceding
the Reset Date (such Reset Rate to be effective from and after the Reset Date).
If the Initial Remarketing results in a Failed Remarketing, the Coupon Rate on
the Debt Securities will not be reset to the Reset Rate but will continue at the
initial Coupon Rate. If the Secondary Remarketing results in a Failed
Remarketing, the Reset Rate will be the rate determined by the Reset Agent as
the rate the Debt Securities should bear in order for each Senior Note to have
an approximate market value of [_____%] of the principal amount of the Debt
Securities. The Company may limit the reset rate to [___] basis points over the
yield on the Applicable Benchmark Treasury. In addition, the Reset Rate will in
no event exceed the maximum rate permitted by applicable law. On each Reset
Announcement Date, the Reset Spread and the Applicable Benchmark Treasury to be
used to determine the Reset Rate will be announced by the Company. In addition,
on any Reset Announcement Date relating to an Initial Reset Date occurring prior
to _________________, the percentage undivided beneficial ownership interest
determined by the Reset Agent for purposes of clause (1)(iii) of the definition
of "Applicable Ownership Interest" will be announced by the Company. On the
Business Day immediately following the Reset Announcement Date, the Company will
cause a notice of the Reset Spread, Applicable Benchmark Treasury and, if
applicable, percentage undivided beneficial ownership interest in the to be
published in an Authorized Newspaper.
Not later than 7 calendar days nor more than 15 calendar days prior to
each Reset Announcement Date and the Purchase Contract Settlement Date, if the
Purchase Contract Settlement Date is not also a Reset Date, the Company will
request that the Depositary (or any successor Clearing Agency or its nominee)
notify by first-class mail, postage prepaid, the Beneficial Owners or Clearing
Agency Participants holding Corporate Units or Treasury Units, of each Reset
Announcement Date and any procedures to be followed by such Holders of
Securities, who intend to settle their obligation under the Purchase Contract
with separate cash on the Purchase Contract Settlement Date.
26
SECTION 4.2 NOTICE AND VOTING.
Under and subject to the terms of the Pledge Agreement, the Agent will
be entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Debt Securities but only to the extent instructed by the Holders as
described below. Upon receipt of notice of any meeting at which holders of Debt
Securities are entitled to vote or upon any solicitation of consents, waivers or
proxies of holders of Debt Securities, the Agent shall, as soon as practicable
thereafter, mail to the Holders of Corporate Units a notice (a) containing such
information as is contained in the notice or solicitation, (b) stating that each
Corporate Unit Holder on the record date set by the Agent therefor (which, to
the extent possible, shall be the same date as the record date for determining
the holders of Debt Securities entitled to vote) shall be entitled to instruct
the Agent as to the exercise of the voting rights pertaining to the Debt
Securities constituting a part of such Holder's Corporate Units and (c) stating
the manner in which such instructions may be given. Upon the written request of
the Holders of Corporate Units on such record date, the Agent shall endeavor
insofar as practicable to vote or cause to be voted, in accordance with the
instructions set forth in such requests, the maximum number of Debt Securities
as to which any particular voting instructions are received. In the absence of
specific instructions from the Holder of a Corporate Unit, the Agent shall
abstain from voting the Debt Security constituting a part of such Holder's
Corporate Unit. The Company hereby agrees, if applicable, to solicit Holders of
Corporate Units to timely instruct the Agent in order to enable the Agent to
vote such Debt Securities.
SECTION 4.3 SUBSTITUTION OF A TREASURY PORTFOLIO FOR DEBT SECURITIES.
(a) Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debt
Securities shall be delivered to the Collateral Agent in exchange for the
Pledged Debt Securities. Pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Corporate Units the Tax
Event Treasury Portfolio and promptly remit the remaining portion of such
Redemption Price to the Agent for payment to the Holders of such Corporate
Units. The Tax Event Treasury Portfolio will be substituted for the outstanding
Pledged Debt Securities, and will be held by the Collateral Agent in accordance
with the terms of the Pledge Agreement to secure the obligation of each Holder
of a Corporate Unit to purchase the Common Stock of the Company on the Purchase
Contract Settlement Date under the Purchase Contract constituting a part of such
Corporate Unit. Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Corporate Units and the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Tax Event Treasury Portfolio as the Holder of Corporate Units and
the Collateral Agent had in respect of the Debt Securities subject to the Pledge
thereof as provided in Articles II, III, IV, V and VI of the Pledge Agreement,
and any reference herein to the Debt Securities shall be deemed to be reference
to such Tax Event Treasury Portfolio. The Company may cause to be made in any
Corporate Unit Certificates thereafter to be issued such change in phraseology
and form (but not in substance) as may be appropriate to reflect the
substitution of the Tax Event Treasury Portfolio for Debt Securities as
collateral.
(b) Upon the successful remarketing of the Pledged Debt Securities on
the Initial Remarketing Date, the proceeds of such remarketing (after deducting
any Remarketing Fee) shall be delivered to the Collateral Agent in exchange for
the Pledged Debt Securities. Pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Remarketing Treasury
Portfolio Purchase Price to purchase on behalf of the Holders of Corporate Units
the Remarketing Treasury Portfolio and promptly remit the remaining portion of
such proceeds to the Agent for payment to the Holders of such Corporate Units.
The Remarketing Treasury Portfolio will be substituted for the outstanding
Pledged Debt Securities, and will be held by the Collateral Agent in accordance
with the terms of the Pledge Agreement to secure the obligation of each Holder
of a Corporate Unit to purchase the Common Stock of the Company on the Purchase
27
Contract Settlement Date under the Purchase Contract constituting a part of such
Corporate Unit. Following the successful remarketing of the Pledged Debt
Securities on the Initial Remarketing Date, the Holders of Corporate Units and
the Collateral Agent shall have such security interests, rights and obligations
with respect to the Remarketing Treasury Portfolio as the Holder of Corporate
Units and the Collateral Agent had in respect of the Debt Securities subject to
the Pledge thereof as provided in Articles II, III, IV, V and VI of the Pledge
Agreement, and any reference herein to the Debt Securities shall be deemed to be
reference to such Remarketing Treasury Portfolio. The Company may cause to be
made in any Corporate Unit Certificates thereafter to be issued such change in
phraseology and form (but not in substance) as may be appropriate to reflect the
substitution of the Remarketing Treasury Portfolio for Debt Securities as
collateral.
SECTION 4.4 CONSENT TO TREATMENT FOR TAX PURPOSES.
Each Holder of a Corporate Unit or a Treasury Unit, by its acceptance
thereof, covenants and agrees to treat itself as the owner, for United States
federal, state and local income and franchise tax purposes, of (i) the related
Debt Securities or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, in the case of the Corporate Units, or (ii) the Treasury Securities,
in the case of the Treasury Units. Each Holder of a Corporate Unit, by its
acceptance thereof, further covenants and agrees to treat the Debt Securities as
indebtedness of the Company for United States federal, state and local income
and franchise tax purposes.
ARTICLE V
THE PURCHASE CONTRACTS
SECTION 5.1 PURCHASE OF SHARES OF COMMON STOCK.
Each Purchase Contract shall, unless a Termination Event or an Early
Settlement in accordance with Section 5.9 hereof has occurred, obligate the
Holder of the related Security to purchase, and the Company to sell, on the
Purchase Contract Settlement Date, for $__ in cash (the "Purchase Price"), a
number of newly issued shares of Common Stock equal to the applicable Settlement
Rate. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as
defined below) is equal to or greater than $_______ (the "Threshold Appreciation
Price"), ______ shares of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price, but is
greater than $_____, the number of shares of Common Stock equal to $__ divided
by the Applicable Market Value and (c) if the Applicable Market Value is less
than or equal to $_____, ______ shares of Common Stock per Purchase Contract, in
each case subject to adjustment as provided in Section 5.6 (and in each case
rounded upward or downward to the nearest [1/10,000]th of a share). As provided
in Section 5.10, no fractional shares of Common Stock will be issued upon
settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the __ consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date. The "Closing Price" of the Common Stock on any date of determination means
the closing sale price (or, if no closing price is reported, the last reported
sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on
such date or, if the Common Stock is not listed for trading on the NYSE on any
such date, as reported in the composite transactions for the principal United
States national or regional securities exchange on which the Common Stock is so
listed. If the Common Stock is not so listed on a United States national or
regional securities exchange, the Closing Price means the last sale price of the
Common Stock as reported by the NASDAQ Stock Market, or if the Common Stock is
not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
28
organization. If such bid price is not available, the Closing Price means market
value of the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained by the Company for this purpose. A
"Trading Day" means a day on which the Common Stock (A) is not suspended from
trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the Common
Stock.
Each Holder of a Corporate Unit or a Treasury Unit, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact (including the execution
of Certificates on behalf of such Holder), agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its obligations under such
Purchase Contracts, and consents to the provisions hereof, irrevocably
authorizes the Agent to enter into and perform the Pledge Agreement on its
behalf as its attorney-in-fact, and consents to and agrees to be bound by the
Pledge of the Debt Securities, the Treasury Portfolios or the Treasury
Securities, as the case may be, pursuant to the Pledge Agreement. Each Holder of
a Corporate Unit or a Treasury Unit, by its acceptance thereof, further
covenants and agrees, that, to the extent and in the manner provided in Section
5.4 and the Pledge Agreement, but subject to the terms thereof, payments in
respect of the principal of and interest on Debt Securities or the Proceeds of
the Treasury Securities or the Applicable Ownership Interest in any Treasury
Portfolio on the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.
Upon registration of transfer of a Certificate, the transferee shall be
bound (without the necessity of any other action on the part of such transferee,
except as may be required by the Agent pursuant hereto), under the terms of this
Agreement, the Purchase Contracts underlying such Certificate and the Pledge
Agreement; and the transferor shall be released from the obligations under this
Agreement, the Purchase Contracts underlying the Certificates so transferred and
the Pledge Agreement. The Company covenants and agrees, and each Holder of a
Certificate, by its acceptance thereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
SECTION 5.2 CONTRACT ADJUSTMENT PAYMENTS.
Subject to Section 5.3 herein, the Company shall pay, on each Payment
Date, except the Initial Reset Date, if the Initial Reset Date is not also a
regular quarterly Payment Date, the Contract Adjustment Payments payable in
respect of each Purchase Contract to the Person in whose name a Certificate (or
one or more Predecessor Certificates) is registered on the Register at the close
of business on the Record Date next preceding such Payment Date. The Contract
Adjustment Payments will be payable at the Corporate Trust Office or, at the
option of the Company, by check mailed to the address of the Person entitled
thereto at such Person's address as it appears on the Corporate Unit Register or
Treasury Unit Register or by wire transfer to an account appropriately
designated in writing by the Person entitled to payment.
Upon the occurrence of a Termination Event, the Company's obligation to
pay Contract Adjustment Payments (including any accrued or Deferred Contract
Adjustment Payments) shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of any other Certificate (including as
a result of a Collateral Substitution or the re-establishment of a Corporate
Unit) shall carry the rights to Contract Adjustment Payments accrued and unpaid,
and to accrue Contract Adjustment Payments, which were carried by the Purchase
Contracts which were represented by such other Certificates.
29
Subject to Section 5.9, in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date that is after any Record Date and on or prior to the next
succeeding Payment Date, Contract Adjustment Payments, if any, otherwise payable
on such Payment Date shall be payable on such Payment Date notwithstanding such
Early Settlement, and such Contract Adjustment Payments shall, subject to
receipt thereof by the Agent, be payable to the Person in whose name the
Certificate evidencing such Security (or one or more Predecessor Certificates)
was registered at the close of business on such Record Date. Except as otherwise
expressly provided in the immediately preceding sentence, in the case of any
Security with respect to which Early Settlement of the underlying Purchase
Contract is effected on an Early Settlement Date, Contract Adjustment Payments
that would otherwise be payable after the Early Settlement Date with respect to
such Purchase Contract shall not be payable.
The Company's obligations with respect to Contract Adjustment Payments
(including any accrued or Deferred Contract Adjustment Payments), will be
subordinated and junior in right of payment to the Company's obligations under
any Senior Indebtedness.
SECTION 5.3 DEFERRAL OF PAYMENT DATES FOR CONTRACT ADJUSTMENT PAYMENTS.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) at least ten Business
Days prior to the earlier of (i) the next succeeding Payment Date or (ii) the
date the Company is required to give notice of the Record Date or Payment Date
with respect to payment of such Contract Adjustment Payments to the NYSE or
other applicable self-regulatory organization or to Holders of the Securities,
but in any event not less than one Business Day prior to such Record Date. In
connection with any Contract Adjustment Payments so deferred, additional
Contract Adjustment Payments on the amounts so deferred will accrue at the rate
of _____% per annum (computed on the basis of a 360 day year of twelve 30 day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with the
accrued additional Contract Adjustment Payments accrued thereon, being referred
to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to this Section 5.3. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date. If the Purchase Contracts are terminated upon
the occurrence of a Termination Event, the Holder's right to receive Contract
Adjustment Payments and Deferred Contract Adjustment Payments will terminate.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each Holder will receive on the Purchase Contract Settlement
Date, in lieu of a cash payment, a number of shares of Common Stock (in addition
to a number of shares of Common Stock equal to the Settlement Rate) equal to (x)
the aggregate amount of Deferred Contract Adjustment Payments payable to such
Holder divided by (y) the Applicable Market Value.
No fractional shares of Common Stock will be issued by the Company with
respect to the payment of Deferred Contract Adjustment Payments on the Purchase
Contract Settlement Date. In lieu of fractional shares otherwise issuable with
respect to such payment of Deferred Contract Adjustment Payments, the Holder
will be entitled to receive an amount in cash as provided in Section 5.10.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
30
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) redemptions, purchases or
acquisitions of capital stock of the Company in connection with the satisfaction
by the Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of employees, officers, directors or
agents or a stock purchase or dividend reinvestment plan, or the satisfaction by
the Company of its obligations pursuant to any contract or security outstanding
on the date of such event requiring the Company to redeem, purchase or acquire
its capital stock, (ii) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of all or a portion of one class or
series of the Company's capital stock for another class or series of the
Company's capital stock, (iii) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
the Company's capital stock or the security being converted or exchanged, (iv)
dividends or distributions in capital stock of the Company (or rights to acquire
capital stock), or repurchases, redemptions or acquisitions of capital stock in
connection with the issuance or exchange of capital stock (or securities
convertible into or exchangeable for shares of the Company's capital stock) or
(v) redemptions, exchanges or repurchases of any rights outstanding under a
shareholder rights plan or payment thereunder of a dividend or distribution of
or with respect to rights in the future.
SECTION 5.4 PAYMENT OF PURCHASE PRICE.
(a) (i) Unless a Treasury Portfolio has replaced the Debt Securities
as a component of the Corporate Units or a Holder settles the underlying
Purchase Contract through the early delivery of cash to the Agent in the manner
described in Section 5.9, each Holder of a Corporate Unit must notify the Agent
of its intention to pay in cash ("Cash Settlement") the Purchase Price for the
shares of Common Stock to be purchased pursuant to the Purchase Contract on a
Purchase Contract Settlement Date by presenting and surrendering to the Agent
the Corporate Unit Certificate with a notice in substantially the form of
Exhibit C hereto completed and executed. Such presentation, surrender and notice
shall be made on or prior to 5:00 p.m., New York City time, on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date. The
Agent shall promptly notify the Collateral Agent of the receipt of such a notice
from a Holder intending to make a Cash Settlement.
(ii) A Holder of a Corporate Unit who has so notified the
Agent of its intention to make a Cash Settlement is required to pay the Purchase
Price to the Collateral Agent prior to 11:00 a.m., New York City time, on the
Business Day immediately preceding the Purchase Contract Settlement Date in
lawful money of the United States by certified or cashiers' check or wire
transfer, in each case in immediately available funds payable to or upon the
order of the Company. Any cash received by the Collateral Agent will be invested
promptly by the Collateral Agent in Permitted Investments and paid to the
Company on the Purchase Contract Settlement Date in settlement of the Purchase
Contract in accordance with the terms of this Agreement and the Pledge
Agreement. Any funds received by the Collateral Agent in respect of the
investment earnings from the investment in such Permitted Investments, will be
distributed to the Agent when received for payment to the Holder.
(iii) If a Holder of a Corporate Unit fails to notify the Agent
of its intention to make a Cash Settlement in accordance with paragraph (a)(i)
above, such failure shall constitute a default under the Purchase Contract and
the Holder shall be deemed to have consented to the disposition of the Pledged
Debt Securities pursuant to the remarketing as described in paragraph (b) below.
If a Holder of a Corporate Unit does notify the Agent as provided in paragraph
(a)(i) above of its intention to pay the Purchase Price in cash, but fails to
make such payment as required by paragraph (a)(ii) above, such failure shall
also constitute a default; however, the Debt Securities of such a Holder will
not be remarketed but instead the Collateral Agent, for the benefit of the
Company, will exercise its rights as a secured party with respect to such Debt
Securities, including those rights specified in paragraph (c) below.
31
(b) In order to dispose of the Debt Securities of Corporate Unit
Holders who have not notified the Agent of their intention to effect a Cash
Settlement with respect to the Purchase Contract Settlement Date as provided in
paragraph (a)(i) above, the Company shall engage one or more nationally
recognized investment banking firms (the "Remarketing Agents") pursuant to a
Remarketing Agreement to sell such Debt Securities. In order to facilitate the
remarketing, the Agent shall notify the Remarketing Agents, by 10:00 a.m., New
York City time, on the fourth Business Day immediately preceding the Purchase
Contract Settlement Date, of the aggregate number of Debt Securities to be
remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the
Pledge Agreement, will present for remarketing such Debt Securities to the
Remarketing Agents. Upon receipt of such notice from the Agent and such Debt
Securities from the Collateral Agent, the Remarketing Agents will, on the third
Business Day immediately preceding the Purchase Contract Settlement Date, use
their reasonable efforts to remarket such Debt Securities on such date at a
price of approximately [100.5]% (but not less than [100]%) of the aggregate
principal amount of such Debt Securities, plus accrued and unpaid interest
(including deferred interest), if any, thereon. After deducting any Remarketing
Fee, the Remarketing Agents will remit the remaining portion of the proceeds
from such remarketing to the Collateral Agent. Such portion of the proceeds,
equal to the aggregate principal amount of such Debt Securities, will
automatically be applied by the Collateral Agent, in accordance with the Pledge
Agreement to satisfy in full such Corporate Unit Holders' obligations to pay the
Purchase Price for the Common Stock under the related Purchase Contracts on the
Purchase Contract Settlement Date. Any proceeds in excess of those required to
pay the Purchase Price and the Remarketing Fee will be remitted to the Agent for
payment to the Holders of the related Corporate Units. Corporate Unit Holders
whose Debt Securities are so remarketed will not otherwise be responsible for
the payment of any Remarketing Fee in connection therewith. If such a
remarketing results in a Failed Remarketing in accordance with the terms of the
Pledge Agreement, the Collateral Agent, for the benefit of the Company, will
exercise its rights as a secured party with respect to such Debt Securities,
including those actions specified in paragraph (c) below; provided, that if upon
a Failed Remarketing the Collateral Agent exercises such rights for the benefit
of the Company with respect to such Debt Securities, any accrued and unpaid
interest on such Debt Securities will become payable by the Company to the Agent
for payment to the Holder of the Corporate Units to which such Debt Securities
relate. Such payment will be made by the Company on or prior to 11 a.m., New
York City time, on the Purchase Contract Settlement Date in lawful money of the
United States by certified or cashiers' check or wire transfer, in each case, in
immediately available funds payable to or upon the order of the Agent. The
Company will cause a notice of such Failed Remarketing to be published on the
Business Day immediately preceding the Purchase Contract Settlement Date in an
Authorized Newspaper.
(c) With respect to any Debt Securities beneficially owned by Holders
who have elected Cash Settlement but failed to deliver cash as required in
(a)(ii) above, or with respect to Debt Securities which are subject to a Failed
Remarketing, the Collateral Agent for the benefit of the Company reserves all of
its rights as a secured party with respect thereto and, subject to applicable
law and paragraph (h) below, may, among other things, (i) retain such Debt
Securities in full satisfaction of the Holders' obligations under the Purchase
Contracts or (ii) sell such Debt Securities in one or more public or private
sales and apply the proceeds of such sale in full satisfaction of the Holders'
obligations under the Purchase Contracts.
(d) (i) Unless a Holder of a Treasury Unit or Corporate Unit (if a
Treasury Portfolio has replaced the Debt Securities as a component of the
Corporate Units) settles the underlying Purchase Contract through the early
delivery of cash to the Purchase Contract Agent in the manner described in
Section 5.9, each Holder of a Treasury Unit or Corporate Unit (if a Treasury
Portfolio has replaced the Debt Securities as a component of the Corporate
Units) must notify the Agent of its intention to pay in cash the Purchase Price
for the shares of Common Stock to be purchased pursuant to the Purchase Contract
on the Purchase Contract Settlement Date by presenting and surrendering to the
32
Agent the Treasury Unit Certificate or Corporate Unit Certificate, as the case
may be, with a notice in substantially the form of Exhibit C hereto completed
and executed. Such presentation, surrender and notice must be made on or prior
to 5:00 p.m., New York City time, on the second Business Day immediately
preceding the Purchase Contract Settlement Date. The Agent shall promptly notify
the Collateral Agent of the receipt of such notice from a Holder intending to
make a Cash Settlement.
(ii) A Holder of a Treasury Unit or Corporate Unit (if a Treasury
Portfolio has replaced the Debt Securities as a component of the Corporate
Units), who has so notified the Agent of its intention to make a Cash Settlement
in accordance with paragraph (d)(i) above is required to pay the Purchase Price
to the Collateral Agent prior to 11:00 a.m., New York City time, on the Business
Day immediately preceding the Purchase Contract Settlement Date in lawful money
of the United States by certified or cashiers' check or wire transfer, in each
case, in immediately available funds payable to or upon the order of the
Company. Any cash received by the Collateral Agent will be invested promptly by
the Collateral Agent in Permitted Investments and paid to the Company on the
Purchase Contract Settlement Date in settlement of the Purchase Contract in
accordance with the terms of this Agreement and the Pledge Agreement. Any funds
received by the Collateral Agent in respect of the investment earnings from the
investment in such Permitted Investments will be distributed to the Agent when
received for payment to the Holder.
(iii) If a Holder of a Treasury Unit or Corporate Unit (if a Treasury
Portfolio has replaced the Debt Securities as a component of the Corporate
Units), fails to notify the Agent of its intention to make a Cash Settlement in
accordance with paragraph (d)(i) above, or if such Holder does notify the Agent
as provided in paragraph (d)(i) above of its intention to pay the Purchase Price
in cash, but fails to make such payment as required by paragraph (d)(ii) above,
then such failure shall constitute a default under the Purchase Contract and
upon the maturity of the Pledged Treasury Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, held by the
Collateral Agent on the Business Day immediately prior to the Purchase Contract
Settlement Date, the principal amount of the Treasury Securities or the
Applicable Ownership Interest in the appropriate Treasury Portfolio, as the case
may be, received by the Collateral Agent will be invested promptly in overnight
Permitted Investments. On the Purchase Contract Settlement Date an amount equal
to the Purchase Price will be remitted to the Company as payment thereof without
receiving any instructions from the Holder. In the event the sum of the proceeds
from the related Pledged Treasury Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, and the
investment earnings earned from such investments is in excess of the aggregate
Purchase Price of the Purchase Contracts being settled thereby, the Collateral
Agent will distribute such excess to the Agent for the benefit of the Holder of
the related Treasury Units or Corporate Units when received.
(e) Any distribution to Holders of excess funds and interest
described above, shall be payable at the Corporate Trust Office maintained for
that purpose or, at the option of the Holder, by check mailed to the address of
the Person entitled thereto at such address as it appears on the Register.
(f) The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificate therefor to
the Holder unless it shall have received payment in full of the Purchase Price
for the shares of Common Stock to be purchased thereunder in the manner herein
set forth.
(g) Upon Cash Settlement with respect to a Purchase Contract, (i) the
Collateral Agent will in accordance with the terms of the Pledge Agreement cause
the Pledged Debt Security or the Pledged Applicable Ownership Interest in the
appropriate Treasury Portfolio, as the case may be, or the Pledged Treasury
Security underlying the relevant Security to be released from the Pledge by the
Collateral Agent free and clear of any security interest of the Company and
transferred to the Agent for delivery to the Holder thereof or its designee as
33
soon as practicable and (ii) subject to the receipt thereof from the Collateral
Agent, the Agent shall, by book-entry transfer, or other appropriate procedures,
in accordance with instructions provided by the Holder thereof, transfer such
Debt Security or the Applicable Ownership Interest in the appropriate Treasury
Portfolio, as the case may be, or such Treasury Security (or, if no such
instructions are given to the Agent by the Holder, the Agent shall hold such
Debt Security or the Applicable Ownership Interest in the appropriate Treasury
Portfolio, as the case may be, or such Treasury Security, and any distribution
thereon, in the name of the Agent or its nominee in trust for the benefit of
such Holder).
(h) The obligations of the Holders to pay the Purchase Price on the
Purchase Contract Settlement Date are non-recourse obligations and are payable
solely out of any Cash Settlement or the proceeds of any Collateral pledged to
secure the obligations of the Holders with respect to such Purchase Price, and
in no event will Holders be liable for any deficiency between the proceeds of
Collateral disposition and the Purchase Price.
SECTION 5.5 ISSUANCE OF SHARES OF COMMON STOCK.
Unless a Termination Event shall have occurred, and except with respect
to Purchase Contracts with respect to which there has been an Early Settlement,
on the Purchase Contract Settlement Date, upon the Company's receipt of payment
in full of the Purchase Price for the shares of Common Stock purchased by the
Holders pursuant to the foregoing provisions of this Article and subject to
Section 5.6(b), the Company shall issue and deposit with the Agent, for the
benefit of the Holders of the Outstanding Securities, one or more certificates
representing the newly issued shares of Common Stock registered in the name of
the Agent (or its nominee) as custodian for the Holders (such certificates for
shares of Common Stock, together with any dividends or distributions for which
both a record date and payment date for such dividend or distribution has
occurred after the Purchase Contract Settlement Date, being hereinafter referred
to as the "Purchase Contract Settlement Fund") to which the Holders are entitled
hereunder. Subject to the foregoing, upon surrender of a Certificate to the
Agent on or after the Purchase Contract Settlement Date, together with
settlement instructions thereon duly completed and executed, the Holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Common Stock which such Holder is
entitled to receive pursuant to the provisions of this Article V (after taking
into account all Securities then held by such Holder) together with cash in lieu
of fractional shares as provided in Section 5.10 and any dividends or
distributions with respect to such shares constituting part of the Purchase
Contract Settlement Fund, but without any interest thereon, and any Certificate
so surrendered shall forthwith be cancelled. Such shares shall be registered in
the name of the Holder or the Holder's designee as specified in the settlement
instructions provided by the Holder to the Agent. If any shares of Common Stock
issued in respect of a Purchase Contract are to be registered to a Person other
than the Person in whose name the Certificate evidencing such Purchase Contract
is registered, no such registration shall be made unless the Person requesting
such registration has paid any transfer and other taxes required by reason of
such registration in a name other than that of the registered Holder of the
Certificate evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or is not
payable.
SECTION 5.6 ADJUSTMENT OF SETTLEMENT RATE.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on the Common Stock in Common Stock, the Settlement Rate, as in
effect at the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
34
at the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such increase to become
effective immediately after the opening of business on the day following the
date fixed for such determination. For the purposes of this paragraph (1), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include any shares issuable
in respect of any scrip certificates issued in lieu of fractions of shares of
Common Stock. The Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options or warrants to all
holders of its Common Stock that are not available on an equivalent basis to
Holders of the Securities upon settlement of the Purchase Contracts underlying
such Securities entitling such holders of the Common Stock, for a period
expiring within 45 days after the record date for the determination of
stockholders entitled to receive such rights, options or warrants, to subscribe
for or purchase shares of Common Stock at a price per share less than the
Current Market Price per share of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights, options or
warrants (other than pursuant to any dividend reinvestment plan or share
purchase plan, including such a plan that provides for purchases of Common Stock
by non-shareholders), the Settlement Rate, in effect at the opening of business
on the day following the date fixed for such determination shall be increased by
dividing such Settlement Rate, by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include any shares issuable in respect of any
scrip certificates issued in lieu of fractions of shares of Common Stock. The
Company shall not issue any such rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided or
split into a greater number of shares of Common Stock, the Settlement Rate, in
effect at the opening of business on the day following the day upon which such
subdivision or split becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Settlement Rate, in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision, split or
combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any rights or warrants referred to in
paragraph (2) of this Section, any dividend or distribution paid exclusively in
cash and any dividend or distribution referred to in paragraph (1) of this
Section), the Settlement Rate, in effect at the opening of business on the day
following the day on which such dividend or distribution was effected, shall be
adjusted so that the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of business on the date
fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the Current Market
Price per share of the Common Stock on the date fixed for such determination
less the then fair market value (as determined by the Board of Directors, whose
35
determination shall be conclusive and described in a Board Resolution) of the
portion of the assets or evidences of indebtedness so distributed applicable to
one share of Common Stock and the denominator shall be such Current Market Price
per share of the Common Stock, such adjustment to become effective immediately
prior to the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution. In any case
in which this paragraph (4) is applicable, paragraph (2) of this Section shall
not be applicable.
(5) In case the Company shall, (I) by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding any cash that is distributed
in a Reorganization Event to which Section 5.6(b) applies or as part of a
distribution referred to in paragraph (4) of this Section) in an aggregate
amount that, combined together with (II) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in cash within
the 12 months preceding the date of payment of such distribution and in respect
of which no adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made and (III) the aggregate of any cash plus the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) of consideration payable in
respect of any tender or exchange offer (other than consideration payable in
respect of any odd-lot tender offer) by the Company or any of its subsidiaries
for all or any portion of the Common Stock concluded within the 12 months
preceding the date of payment of the distribution described in clause (I) above
and in respect of which no adjustment pursuant to this paragraph (5) or
paragraph (6) of this Section has been made, exceeds 15% of the product of the
Current Market Price per share of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
distribution times the number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after the close of business on
such date for determination, the Settlement Rate, shall be increased so that the
same shall equal the rate determined by dividing the Settlement Rate in effect
immediately prior to the close of business on the date fixed for determination
of the stockholders entitled to receive such distribution by a fraction (i) the
numerator of which shall be equal to the Current Market Price per share of the
Common Stock on the date fixed for such determination less an amount equal to
the quotient of (x) the combined amount distributed or payable in the
transactions described in clauses (I), (II) and (III) above and (y) the number
of shares of Common Stock outstanding on such date for determination and (ii)
the denominator of which shall be equal to the Current Market Price per share of
the Common Stock on such date for determination.
(6) In case (I) a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares (as defined below)) of an aggregate consideration having a fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution) that combined together with
(II) the aggregate of the cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described in a
Board Resolution), as of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer (other
than consideration payable in respect of any odd-lot tender offer), by the
Company or any subsidiary of the Company for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to paragraph (5)
of this Section or this paragraph (6) has been made and (III) the aggregate
amount of any distributions to all holders of the Company's Common Stock made
exclusively in cash (other than regular quarterly cash dividends) within the 12
months preceding the expiration of such tender or exchange offer and in respect
of which no adjustment pursuant to paragraph (5) of this Section or this
paragraph (6) has been made, exceeds 15% of the product of the Current Market
Price per share of the Common Stock as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender or exchange offer (as it
may be amended) times the number of shares of Common Stock outstanding
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(including any tendered shares) on the Expiration Time, then, and in each such
case, immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate, shall be adjusted so that the same
shall equal the rate determined by dividing the Settlement Rate immediately
prior to the close of business on the date of the Expiration Time by a fraction
(i) the numerator of which shall be equal to (A) the product of (I) the Current
Market Price per share of the Common Stock on the date of the Expiration Time
and (II) the number of shares of Common Stock outstanding (including any
tendered shares) on the Expiration Time less (B) the amount of cash plus the
fair market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the transactions described in clauses (I), (II)
and (III) above (assuming in the case of clause (I) the acceptance, up to any
maximum specified in the terms of the tender or exchange offer, of Purchased
Shares), and (ii) the denominator of which shall be equal to the product of (A)
the Current Market Price per share of the Common Stock as of the Expiration Time
and (B) the number of shares of Common Stock outstanding (including any tendered
shares) as of the Expiration Time less the number of all shares validly tendered
and not withdrawn as of the Expiration Time (the shares deemed so accepted, up
to any such maximum, being referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.6(b) applies) shall be deemed to involve
(a) a distribution of such securities other than Common Stock to all holders of
Common Stock (and the effective date of such reclassification shall be deemed to
be "the date fixed for the determination of stockholders entitled to receive
such distribution" and the "date fixed for such determination" within the
meaning of paragraph (4) of this Section), and (b) a subdivision, split or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of shares
of Common Stock outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon which such subdivision
or split becomes effective" or "the day upon which such combination becomes
effective", as the case may be, and "the day upon which such subdivision, split
or combination becomes effective" within the meaning of paragraph (3) of this
Section).
(8) The "Current Market Price" per share of Common Stock on any day
means the average of the daily Closing Prices for the five consecutive Trading
Days selected by the Company commencing not more than 30 Trading Days before,
and ending not later than, the earlier of the day in question and the day before
the "ex date" with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "ex date," when used with
respect to any issuance or distribution, shall mean the first date on which the
Common Stock trades regular way the applicable exchange or in the applicable
market without the right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate, shall be calculated to
the nearest [1/10,000]th of a share of Common Stock (or if there is not a
nearest [1/10,000]th of a share to the next lower [1/10,000]th of a share). No
adjustment in the Settlement Rate shall be required unless such adjustment would
require an increase or decrease of at least one percent therein; provided,
however, that any adjustments which by reason of this subparagraph are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. If an adjustment is made to the Settlement Rate pursuant
to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a),
an adjustment shall also be made to the Applicable Market Value solely to
determine which of clauses (a), (b) or (c) of the definition of Settlement Rate
in Section 5.1 will apply on the Purchase Contract Settlement Date. Such
adjustment shall be made by multiplying the Applicable Market Value by a
fraction of which the numerator shall be the Settlement Rate immediately after
such adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
37
of this Section 5.6(a) and the denominator shall be the Settlement Rate
immediately before such adjustment; provided, however, that if such adjustment
to the Settlement Rate is required to be made pursuant to the occurrence of any
of the events contemplated by paragraph (1), (2), (3), (4), (5), (7) or (10) of
this Section 5.6(a) during the period taken into consideration for determining
the Applicable Market Value, appropriate and customary adjustments shall be made
to the Settlement Rate.
(10) The Company may make such increases in the Settlement Rate, in
addition to those required by this Section, as it considers to be advisable in
order to avoid or diminish the effect of any income tax to any holders of shares
of Common Stock resulting from any dividend or distribution of stock or issuance
of rights or warrants to purchase or subscribe for stock or from any event
treated as such for income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of (i) any consolidation or merger of the Company with or into
another Person (other than a merger or consolidation in which the Company is the
continuing corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, securities or
other property of the Company or another corporation), (ii) any sale, transfer,
lease or conveyance to another Person of the property of the Company as an
entirety or substantially as an entirety, (iii) any statutory exchange of
securities of the Company with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Company other than as a result of or after the occurrence of a Termination Event
(any such event, a "Reorganization Event"), the Settlement Rate will be adjusted
to provide that each Holder of Securities will receive on the Purchase Contract
Settlement Date with respect to each Purchase Contract forming a part thereof,
the kind and amount of securities, cash and other property receivable upon such
Reorganization Event (without any interest thereon, and without any right to
dividends or distribution thereon which have a record date that is prior to the
Purchase Contract Settlement Date) by a Holder of the number of shares of Common
Stock issuable on account of each Purchase Contract if the Purchase Contract
Settlement Date had occurred immediately prior to such Reorganization Event
assuming such Holder of Common Stock is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or with which such statutory exchange of securities was effected or to which
such sale, transfer, lease or conveyance was made, as the case may be (any such
Person, a "Constituent Person"), or an Affiliate of a Constituent Person to the
extent such Reorganization Event provides for different treatment of Common
Stock held by Affiliates of the Company and non-affiliates and such Holder
failed to exercise its rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such Reorganization Event
(provided that if the kind or amount of securities, cash and other property
receivable upon such Reorganization Event is not the same for each share of
Common Stock held immediately prior to such Reorganization Event by other than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("non-electing share"), then for the
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such Reorganization Event by each non-electing share
shall be deemed to be the kind and amount so receivable per share by a plurality
of the non-electing shares). In the event of such a Reorganization Event, the
Person formed by such consolidation, merger or exchange or the Person which
acquires the assets of the Company or, in the event of a liquidation or
dissolution of the Company, the Company or a liquidating trust created in
connection therewith, shall execute and deliver to the Agent an agreement
supplemental hereto providing that the Holders of each Outstanding Security
shall have the rights provided by this Section 5.6. Such supplemental agreement
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental agreement, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section. The above
provisions of this Section shall similarly apply to successive Reorganization
Events.
SECTION 5.7 NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
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(i) forthwith compute the Settlement Rate in accordance with Section
5.6 and prepare and transmit to the Agent a Company Certificate setting forth
the Settlement Rate, the method of calculation thereof in reasonable detail, and
the facts requiring such adjustment and upon which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an event that
requires an adjustment to the Settlement Rate pursuant to Section 5.6 (or if the
Company is not aware of such occurrence, as soon as practicable after becoming
so aware), provide a written notice to the Holders of the Securities of the
occurrence of such event and a statement in reasonable detail setting forth the
method by which the adjustment to the Settlement Rate was determined and setting
forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or responsibility
to any Holder of Securities to determine whether any facts exist which may
require any adjustment of the Settlement Rate, or with respect to the nature or
extent or calculation of any such adjustment when made, or with respect to the
method employed in making the same. The Agent shall not be accountable with
respect to the validity or value (or the kind or amount) of any shares of Common
Stock, or of any securities or property, which may at the time be issued or
delivered with respect to any Purchase Contract, and the Agent makes no
representation with respect thereto. The Agent shall not be responsible for any
failure of the Company to issue, transfer or deliver any shares of Common Stock
pursuant to a Purchase Contract or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article.
SECTION 5.8 TERMINATION EVENT; NOTICE.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, and the rights
and obligations of the Holders to purchase Common Stock, will immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice thereof to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
applicable Register. Upon and after the occurrence of a Termination Event, the
Securities shall thereafter represent the right to receive the Debt Securities
or the Applicable Ownership Interest in the appropriate Treasury Portfolio, as
the case may be, forming a part of such Securities in the case of Corporate
Units, or Treasury Securities in the case of Treasury Units, in accordance with
the provisions of Section 4.3 of the Pledge Agreement.
SECTION 5.9 EARLY SETTLEMENT.
(a) A holder of Corporate Units may settle the related Purchase
Contracts in their entirety at any time on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date in the manner
described herein, but only in integral multiples of __ Corporate Units;
provided, however, if a Treasury Portfolio has become a component of the
Corporate Units, Holders of Corporate Units may settle early only in integral
multiples of ______ Corporate Units. A holder of Treasury Units may settle the
related Purchase Contracts in their entirety at any time on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date
in the manner described herein (in either case, "Early Settlement") but only in
integral multiples of __ Treasury Units. The right to Early Settlement is
subject to there being in effect, if so required under Federal securities laws,
a registration statement covering the shares of Common Stock to be delivered in
respect of the Purchase Contracts being settled. Upon Early Settlement, (i) the
holder's rights to receive Deferred Contract Adjustment Payments, if any, on the
39
Purchase Contracts being settled will be forfeited, (ii) the holder's right to
receive additional Contract Adjustment Payments in respect of such Purchase
Contracts will terminate and (iii) no adjustment will be made to or for the
holder on account of Deferred Contract Adjustment Payments, or any amount
accrued in respect of Contract Adjustment Payments. In order to exercise the
right to effect any Early Settlement with respect to any Purchase Contracts, the
Holder of the Certificate evidencing Securities shall deliver such Certificate
to the Agent at the Corporate Trust Office duly endorsed for transfer to the
Company or in blank with the form of Election to Settle Early therein duly
completed and executed and accompanied by payment payable to the Company in
immediately available funds in an amount (the "Early Settlement Amount") equal
to the sum of (i) $__ times the number of Purchase Contracts being settled (ii)
if such delivery is made with respect to any Purchase Contracts during the
period from the close of business on any Record Date next preceding any Payment
Date to the opening of business on such Payment Date, an amount equal to the
Contract Adjustment Payments payable on such Payment Date with respect to such
Purchase Contracts; provided that no payment is required if the Company has
elected to defer the Contract Adjustment Payments which would otherwise be
payable on the Payment Date. Except as provided in the immediately preceding
sentence and subject to the second to last paragraph of Section 5.2, no payment
or adjustment shall be made upon Early Settlement of any Purchase Contract on
account of any Contract Adjustment Payments accrued on such Purchase Contract or
on account of any dividends on the Common Stock issued upon such Early
Settlement. In order for any of the foregoing requirements to be considered
satisfied or effective with respect to a Purchase Contract underlying any
Security on or by a particular Business Day, such requirement must be met at or
prior to 5:00 p.m., New York City time, on such Business Day; the first Business
Day on which all of the foregoing requirements have been satisfied by 5:00 p.m.,
New York City time shall be the "Early Settlement Date" with respect to such
Security.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Company shall issue, and the Holder shall be entitled to
receive ______ newly issued shares of Common Stock per Corporate Unit or
Treasury Unit (the "Early Settlement Rate") (regardless of the market price of
the Common Stock on the date of Early Settlement); provided, however, that upon
the Early Settlement of the Purchase Contracts, the Holder of such related
Securities will forfeit the right to receive any Deferred Contract Adjustment
Payments. The Early Settlement Rate shall be adjusted in the same manner and at
the same time as the Settlement Rate is adjusted, in accordance with Section
5.6. As promptly as practicable after Early Settlement of Purchase Contracts in
accordance with the provisions of this Section 5.9, the Company shall issue and
shall deliver to the Agent at the Corporate Trust Office a certificate or
certificates for the full number of shares of Common Stock issuable upon such
Early Settlement together with payment in lieu of any fraction of a share, as
provided in Section 5.10.
(c) No later than the third Business Day after the applicable Early
Settlement Date the Company shall cause (i) the shares of Common Stock issuable
upon Early Settlement of Purchase Contracts to be issued and delivered, and (ii)
the related Debt Securities or the Applicable Ownership Interest in the
appropriate Treasury Portfolio, in the case of Corporate Units, or the related
Treasury Securities, in the case of Treasury Units, to be released from the
Pledge by the Collateral Agent and transferred, in each case to the Agent for
delivery to the Holder thereof or its designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Debt Securities, the
Applicable Ownership Interest in the appropriate Treasury Portfolio or Treasury
Securities, as the case may be, from the Collateral Agent, as applicable, the
Agent shall, in accordance with the instructions provided by the Holder thereof
on the applicable form of Election to Settle Early in the Certificate evidencing
the related Securities, (i) transfer to the Holder the Debt Securities, Treasury
Portfolio or Treasury Securities, as the case may be, forming a part of such
Securities, and (ii) deliver to the Holder a certificate or certificates for the
40
full number of shares of Common Stock issuable upon such Early Settlement
together with payment in lieu of any fraction of a share, as provided in Section
5.10.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the Agent
shall authenticate, countersign and deliver to the Holder thereof, at the
expense of the Company, a Certificate evidencing the Securities as to which
Early Settlement was not effected.
SECTION 5.10 NO FRACTIONAL SHARES.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Common
Stock which shall be delivered upon settlement shall be computed on the basis of
the aggregate number of Purchase Contracts evidenced by the Certificates so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the
Purchase Contract Settlement Date or upon Early Settlement, the Company, through
the Agent, shall make a cash payment in respect of such fractional interest in
an amount equal to the fractional share times (i) the Threshold Appreciation
Price, in the case of an Early Settlement or (ii) the Applicable Market Value,
in all other circumstances. The Company shall provide the Agent from time to
time with sufficient funds to permit the Agent to make all cash payments
required by this Section 5.10 in a timely manner.
SECTION 5.11 CHARGES AND TAXES.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts and in payment of any Deferred Contract Adjustment
Payments; provided, however, that the Company shall not be required to pay any
such tax or taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Security or any issuance of a share
of Common Stock in a name other than that of the registered Holder of a
Certificate surrendered in respect of the Securities evidenced thereby, other
than in the name of the Agent, as custodian for such Holder, and the Company
shall not be required to issue or deliver such share certificates or
Certificates unless or until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid
or that no such tax is due.
ARTICLE VI
REMEDIES
SECTION 6.1 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE CONTRACT ADJUSTMENT
PAYMENTS AND TO PURCHASE COMMON STOCK.
The Holder of any Corporate Unit or Treasury Unit shall have the right,
which is absolute and unconditional (subject to the right of the Company to
defer payment thereof pursuant to Section 5.3, the prepayment of Contract
Adjustment Payments pursuant to Section 5.9(a) and the forfeiture of any
Deferred Contract Adjustment Payments upon Early Settlement pursuant to Section
5.9(b) or upon the occurrence of a Termination Event), to receive payment of
each installment of the Contract Adjustment Payments with respect to the
Purchase Contract constituting a part of such Security on the respective Payment
Date for such Security and to purchase Common Stock pursuant to such Purchase
Contract and, in each such case, to institute suit for the enforcement of any
41
such payment and right to purchase Common Stock, and such rights shall not be
impaired without the consent of such Holder.
SECTION 6.2 RESTORATION OF RIGHTS AND REMEDIES.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such Holder
shall continue as though no such proceeding had been instituted.
SECTION 6.3 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.4 DELAY OR OMISSION NOT WAIVER.
No delay or omission of any Holder to exercise any right or remedy upon
a default shall impair any such right or remedy or constitute a waiver of any
such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
SECTION 6.5 UNDERTAKING FOR COSTS.
All parties to this Agreement agree, and each Holder of Corporate Units
or Treasury Units, by its acceptance of such Corporate Units or Treasury Units
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Agreement, or in
any suit against the Agent for any action taken, suffered or omitted by it as
Agent, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided that the provisions of
this Section shall not apply to any suit instituted by the Company, to any suit
instituted by the Agent, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of payment of
interest on any Debt Securities or Contract Adjustment Payments on any Purchase
Contract on or after the respective Payment Date therefor in respect of any
Security held by such Holder, or for enforcement of the right to purchase shares
of Common Stock under the Purchase Contracts constituting part of any Security
held by such Holder.
SECTION 6.6 WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
42
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE VII
THE AGENT
SECTION 7.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Prior to a Default and after the curing or waiving of all such
Defaults that may have occurred,
(1) the Agent undertakes to perform, with respect to the Securities,
such duties and only such duties as are specifically set forth in this Agreement
and no implied covenants or obligations shall be read into this Agreement
against the Agent; and
(2) the Agent may, with respect to the Securities, conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, in the absence of bad faith on the part of the Agent, upon certificates
or opinions furnished to the Agent and conforming to the requirements of this
Agreement; but in the case of any certificates or opinions which by any
provision hereof are specifically required to be furnished to the Agent, the
Agent shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Agreement.
(b) No provision of this Agreement shall be construed to relieve the
Agent from liability for its own negligent action, its own negligent failure to
act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the Agent
was negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers.
(c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of this
Section.
(d) The Agent is authorized to execute, deliver and perform the Pledge
Agreement in its capacity as Agent and to grant the Pledge. The Agent shall be
entitled to all of the rights, privileges, immunities and indemnities contained
in this Agreement with respect to any duties of the Agent under, or actions
taken by the Agent pursuant to, such Pledge Agreement.
(e) In case a Default has occurred (that has not been cured or waived),
and is actually known by a Responsible Officer of the Agent, the Agent shall
exercise such of the rights and powers vested in it by this Agreement, and use
43
the same degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(f) At the request of the Company, the Agent is authorized to execute
and deliver one or more Remarketing Agreements to, among other things,
effectuate Section 5.4.
SECTION 7.2 NOTICE OF DEFAULT.
Within 90 days after the occurrence of any Default hereunder of which a
Responsible Officer of the Agent has actual knowledge, the Agent shall transmit
by mail to the Company and the Holders of Securities, as their names and
addresses appear in the Register, notice of such Default hereunder, unless such
Default shall have been cured or waived; provided that, except for a Default in
any payment obligation hereunder, the Agent shall be protected in withholding
such notice if and so long as a Responsible Officer of the Agent in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
SECTION 7.3 CERTAIN RIGHTS OF AGENT.
Subject to the provisions of Section 7.1:
(a) the Agent may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Certificate, Issuer Order or Issuer Request,
and any resolution of the Board of Directors of the Company may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other evidence be
herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon a Company Certificate;
(d) the Agent may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Agent,
in its discretion, may make reasonable further inquiry or investigation into
such facts or matters related to the execution, delivery and performance of the
Purchase Contracts as it may see fit, and, if the Agent shall determine to make
such further inquiry or investigation, it shall be given a reasonable
opportunity to examine the books, records and premises of the Company,
personally or by agent or attorney;
(f) the Agent may execute any of the powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or an
Affiliate and the Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney or an Affiliate appointed with
due care by it hereunder; and
44
(g) the rights, privileges, protections, immunities and benefits
given to the Agent, including, without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Agent in each of its
capacities hereunder.
SECTION 7.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Company, and the Agent assumes no responsibility for their
accuracy. The Agent makes no representations as to the validity or sufficiency
of either this Agreement or of the Securities, or of the Pledge Agreement or the
Pledge. The Agent shall not be accountable for the use or application by the
Company of the proceeds in respect of the Purchase Contracts.
SECTION 7.5 MAY HOLD SECURITIES.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Collateral
Agent or any other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
SECTION 7.6 MONEY HELD IN CUSTODY.
Money held by the Agent in custody hereunder need not be segregated
from the other funds except to the extent required by law or provided herein.
The Agent shall be under no obligation to invest or pay interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
SECTION 7.7 COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(a) to pay to the Agent from time to time such compensation for all
services rendered by it hereunder as the parties shall agree from time to time
in writing (which compensation shall not be limited by any provisions of law in
regards to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Agent upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Agent in accordance with any provision of this Agreement
(including the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(c) to indemnify the Agent and any predecessor Agent for, and to hold
it harmless against, any loss, liability or expense incurred without negligence
or bad faith on its part, arising out of or in connection with the acceptance or
administration or the performance of its duties hereunder, including the costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
"Agent" for purposes of this Section 7.7 shall include any predecessor
Agent; provided, however, that the negligence or bad faith of any Agent
hereunder shall not affect the rights of any other Agent hereunder.
45
When the Agent incurs expenses or renders services in an action or
proceeding commenced pursuant to Section 4.3 of the Pledge Agreement upon the
occurrence of a Termination Event, the expenses (including the reasonable
charges and expenses of its counsel) and the compensation for the services are
intended to constitute expenses of administration under any applicable Federal
or State bankruptcy, insolvency or other similar law.
The provisions of this Section 7.7 shall survive the termination of
this Agreement and the Pledge Agreement.
There shall at all times be an Agent hereunder which shall be (i) not
an Affiliate of the Company and (ii) a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to exercise corporate trust
powers, having (or being a member of a bank holding company having) a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by Federal or State authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 7.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice thereof
to the Company 60 days prior to the effective date of such resignation. If the
instrument of acceptance by a successor Agent required by Section 7.10 shall not
have been delivered to the Agent within 30 days after the giving of such notice
of resignation, the resigning Agent may petition any court of competent
jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and the
Company.
(d) If at any time
(1) the Agent fails to comply with Section 310(b) of the TIA,
after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Security for at least six months, or
(2) the Agent shall cease to be eligible under Section 7.8 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case,
(i) the Company by a Board Resolution may remove the Agent, or (ii)
any Holder who has been a bona fide
46
Holder of a Security for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Agent and the appointment of a
successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Agent and
shall comply with the applicable requirements of Section 7.10. If no successor
Agent shall have been so appointed by the Company and accepted appointment in
the manner required by Section 7.10, the Agent or any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders as their names and addresses
appear in the applicable Register. Each notice shall include the name of the
successor Agent and the address of its Corporate Trust Office.
(g) If the Agent has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the TIA, the Agent and the Company shall
in all respects comply with the provisions of Section 310(b) of the TIA.
SECTION 7.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Agent, every
such successor Agent so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Agent an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the
retiring Agent; but, on the request of the Company or the successor Agent, such
retiring Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and deliver to such
successor Agent all property and money held by such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Agent all such rights, powers and agencies referred
to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the
time of such acceptance such successor Agent shall be qualified and eligible
under this Article.
SECTION 7.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Person into which the Agent may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of the
Agent, shall be the successor of the Agent hereunder, provided such Person shall
be otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
In case any Certificates shall have been authenticated and executed on behalf of
the Holders, but not delivered, by the Agent then in office, any successor by
merger, conversion or consolidation to such Agent may adopt such authentication
47
and execution and deliver the Certificates so authenticated and executed with
the same effect as if such successor Agent had itself authenticated and executed
such Securities.
SECTION 7.12 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Agent in its
capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof that
each such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their rights
under this Agreement or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to transmit,
then the Agent shall mail to all the Holders copies of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Agent of the materials to be mailed and of
payment, or provision for the payment, of the reasonable expenses of such
mailing.
SECTION 7.13 NO OBLIGATIONS OF AGENT.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligations and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Security thereunder. The Company agrees, and
each Holder of a Certificate, by his acceptance thereof, shall be deemed to have
agreed, that the Agent's execution of the Certificates on behalf of the Holders
shall be solely as agent and attorney-in-fact for the Holders, and that the
Agent shall have no obligation to perform such Purchase Contracts on behalf of
the Holders, except to the extent expressly provided in Article V hereof.
SECTION 7.14 TAX COMPLIANCE.
(a) The Agent, on its own behalf and on behalf of the Company, will
comply with all applicable certification, information reporting and withholding
(including "backup" withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any payments made
with respect to the Securities or (ii) the issuance, delivery, holding,
transfer, redemption or exercise of rights under the Securities. Such compliance
shall include, without limitation, the preparation and timely filing of required
returns and the timely payment of all amounts required to be withheld to the
appropriate taxing authority or its designated agent.
(b) The Agent shall comply with any written direction received from
the Company with respect to the application of such requirements to particular
payments or Holders or in other particular circumstances, and may for purposes
of this Agreement conclusively rely on any such direction in accordance with the
provisions of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or its authorized representative within a
reasonable period of time after receipt of such request.
48
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
SECTION 8.1 SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(a) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein and
in the Certificates; or
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company;
or
(c) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(d) to make provision with respect to the rights of Holders pursuant
to the requirements of Section 5.6(b); or
(e) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other provisions herein, or to make
any other provisions with respect to such matters or questions arising under
this Agreement, provided such action shall not adversely affect the interests of
the Holders.
SECTION 8.2 SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Agent, the Company, when authorized by
a Board Resolution, and the Agent may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the
Purchase Contracts, or the provisions of this Agreement or the rights of the
Holders in respect of the Securities; provided, however, that, except as
contemplated herein, no such supplemental agreement shall, without the consent
of the Holder of each Outstanding Security affected thereby,
(a) change any Payment Date;
(b) change the amount or the type of Collateral required to be
Pledged to secure a Holder's Obligations under the Purchase Contract, impair the
right of the Holder of any Purchase Contract to receive distributions on the
related Collateral (except for the rights of Holders of Corporate Units to
substitute the Treasury Securities for the Pledged Debt Securities or the
Applicable Ownership Interest in a Treasury Portfolio or the rights of holders
of Treasury Units to substitute Debt Securities or the Applicable Ownership
Interest in a Treasury Portfolio for the Pledged Treasury Securities) or
otherwise adversely affect the Holder's rights in or to such Collateral or
adversely alter the rights in or to such Collateral;
(c) reduce any Contract Adjustment Payments or any Deferred Contract
Adjustment Payment, or change any place where, or the coin or currency in which,
any Contract Adjustment Payment is payable;
49
(d) impair the right to institute suit for the enforcement of any
Purchase Contract;
(e) reduce the number of shares of Common Stock to be purchased
pursuant to any Purchase Contract, increase the price to purchase shares of
Common Stock upon settlement of any Purchase Contract, change the Purchase
Contract Settlement Date or the right to Early Settlement or otherwise adversely
affect the Holder's rights under any Purchase Contract; or
(f) reduce the percentage of the outstanding Purchase Contracts the
consent of whose Holders is required for any such supplemental agreement;
provided, that if any amendment or proposal referred to above would
adversely affect only the Corporate Units or the Treasury Units, then only the
Holders of the affected class of Security as of the record date for the Holders
entitled to vote thereon will be entitled to vote on or consent to such
amendment or proposal, and such amendment or proposal shall not be effective
except with the consent of Holders of not less than a majority of such class;
provided further, however, that no such agreement, whether with or without the
consent of the Holders, shall affect Section 3.16 hereof.
It shall not be necessary for any Act of the Holders under this Section
to approve the particular form of any proposed supplemental agreement, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 8.3 EXECUTION OF SUPPLEMENTAL AGREEMENTS.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Agent shall be entitled to receive
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental agreement is
authorized or permitted by this Agreement. The Agent may, but shall not be
obligated to, enter into any such supplemental agreement which affects the
Agent's own rights, duties or immunities under this Agreement or otherwise.
SECTION 8.4 EFFECT OF SUPPLEMENTAL AGREEMENTS.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder shall be bound thereby.
SECTION 8.5 REFERENCE TO SUPPLEMENTAL AGREEMENTS.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Agent and the Company, to any such supplemental
agreement may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Agent in exchange for
Outstanding Certificates.
50
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY PROPERTY
EXCEPT UNDER CERTAIN CONDITIONS.
The Company covenants that it will not merge or consolidate with or
into any other Person or sell, assign, transfer, lease or convey all or
substantially all of its properties and assets to any Person or group of
affiliated Persons in one transaction or a series of related transactions,
unless (i) either the Company shall be the continuing entity, or the successor
(if other than the Company) shall be a Person, other than an individual,
organized and existing under the laws of the United States of America or a State
thereof or the District of Columbia and such entity shall expressly assume all
the obligations of the Company under the Purchase Contracts, the Debt
Securities, this Agreement and the Pledge Agreement by one or more supplemental
agreements in form reasonably satisfactory to the Agent and the Collateral
Agent, executed and delivered to the Agent and the Collateral Agent by such
Person, and (ii) the Company or such successor entity, as the case may be, shall
not, immediately after such merger or consolidation, or such sale, assignment,
transfer, lease or conveyance, be in default in its payment obligations or in
any material default in the performance of any of its other obligations
hereunder, or under any of the Securities or the Pledge Agreement.
SECTION 9.2 RIGHTS AND DUTIES OF SUCCESSOR ENTITY.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by a successor entity in
accordance with Section 9.1, such successor entity shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the Company. Such successor entity thereupon may cause to be signed, and may
issue either in its own name or in the name of TXU Corp. any or all of the
Certificates evidencing Securities issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Agent; and, upon the
order of such successor corporation, instead of the Company, and subject to all
the terms, conditions and limitations in this Agreement prescribed, the Agent
shall authenticate and execute on behalf of the Holders and deliver any
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Agent for authentication and execution, and any
Certificate evidencing Securities which such successor entity thereafter shall
cause to be signed and delivered to the Agent for that purpose. All the
Certificates so issued shall in all respects have the same legal rank and
benefit under this Agreement as the Certificates theretofore or thereafter
issued in accordance with the terms of this Agreement as though all of such
Certificates had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance such change in phraseology and form (but not in substance)
may be made in the Certificates evidencing Securities thereafter to be issued as
may be appropriate.
SECTION 9.3 OPINION OF COUNSEL GIVEN TO AGENT.
The Agent, subject to Sections 7.1 and 7.3, shall receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale,
assignment, transfer, lease or conveyance, and any such assumption, complies
with the provisions of this Article and that all conditions precedent to the
consummation of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance have been met.
51
ARTICLE X
COVENANTS
SECTION 10.1 PERFORMANCE UNDER PURCHASE CONTRACTS.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, The City of New
York an office or agency where Certificates may be presented or surrendered for
acquisition of shares of Common Stock upon settlement of the Purchase Contracts
on the Purchase Contract Settlement Date or Early Settlement and for transfer of
Collateral upon occurrence of a Termination Event, where Certificates may be
surrendered for registration of transfer or exchange, for a Collateral
Substitution or establishment of a Corporate Unit and where notices and demands
to or upon the Company in respect of the Securities and this Agreement may be
served. The Company will give prompt written notice to the Agent of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Company hereby appoints the Agent as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Agent of any such designation or rescission
and of any change in the location of any such other office or agency. The
Company hereby designates as the place of payment for the Securities the
Corporate Trust Office and appoints the Agent at its Corporate Trust Office as
paying agent in such city.
SECTION 10.3 COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock the full number of shares of Common
Stock issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding Certificates.
SECTION 10.4 COVENANTS AS TO COMMON STOCK.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
52
ARTICLE XI
TRUST INDENTURE ACT
SECTION 11.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Agreement is subject to the provisions of the TIA that are
required or deemed to be part of this Agreement and shall, to the extent
applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Agreement limits,
qualifies or conflicts with the duties imposed by Section 310 to 317, inclusive,
of the TIA, such imposed duties shall control.
SECTION 11.2 LISTS OF HOLDERS OF SECURITIES.
(a) The Company shall furnish or cause to be furnished to the Agent
(a) semi-annually, not later than [June 1] and [December 1] in each year,
commencing ________________, a list, in such form as the Agent may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of a
date not more than 15 days prior to the delivery thereof, and (b) at such other
times as the Agent may request in writing, within 30 days after the receipt by
the Company of any such request, a List of Holders as of a date not more than 15
days prior to the time such list is furnished; provided that, the Company shall
not be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Agent by the
Company. The Agent may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Agent shall comply with its obligations under Section 311(a)
of the TIA, subject to the provisions of Section 311(b) and Section 312(b) of
the TIA.
SECTION 11.3 REPORTS BY THE AGENT.
Not later than [November 1] of each year, commencing [November 1,]
____, the Agent shall provide to the Holders such reports, if any, as are
required by Section 313(a) of the TIA in the form and in the manner provided by
Section 313(a) of the TIA. Such reports shall be as of the preceding [September
15]. The Agent shall also comply with the requirements of Sections 313(b), (c)
and (d) of the TIA.
SECTION 11.4 PERIODIC REPORTS TO AGENT.
The Company shall provide to the Agent such documents, reports and
information as required by Section 314(a) (if any) and the compliance
certificate required by Section 314(a) of the TIA in the form, in the manner and
at the times required by Section 314(a) of the TIA.
SECTION 11.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Company shall provide to the Agent such evidence of compliance with
any conditions precedent provided for in this Agreement as and to the extent
required by Section 314(c) of the TIA. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) of the TIA may be given in the
form of a Company's Certificate. Any opinion required to be given pursuant to
Section 314(c)(2) of the TIA may be given in the form of an Opinion of Counsel.
53
SECTION 11.6 DEFAULTS; WAIVER.
The Holders of a majority of the Outstanding Purchase Contracts voting
together as one class may, by vote or consent, on behalf of all of the Holders,
waive any past Default and its consequences, except a Default
(a) in the payment on any Security, or
(b) in respect of a provision hereof which under Section 8.2 cannot
be modified or amended without the consent of the Holder of each Outstanding
Security affected.
Upon such waiver, any such Default shall cease to exist, and any
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Agreement, but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
SECTION 11.7 AGENT'S KNOWLEDGE OF DEFAULTS.
The Agent shall not be deemed to have knowledge of any Default unless a
Responsible Officer shall have obtained written notice of such Default.
SECTION 11.8 CONFLICTING INTERESTS.
The Indenture, the Indenture (For Unsecured Debt Securities Series A),
dated as of October 1, 1997, of the Company to The Bank of New York, as trustee,
the Indenture (For Unsecured Debt Securities Series B), dated as of October 1,
1997, of the Company to The Bank of New York, as trustee, the Indenture (For
Unsecured Debt Securities Series C), dated as of January 1, 1998, of the Company
to The Bank of New York, as trustee, the Purchase Contract Agreement dated as of
July 1, 1998 of the Company to The Bank of New York, as agent, attorney-in-fact
and trustee, the Indenture (For Unsecured Debt Securities Series D and Series
E), dated as of July 1, 1998, of the Company to The Bank of New York, as
trustee, the Indenture (For Unsecured Debt Securities Series F), dated as of
October 1, 1998 of the Company to The Bank of New York, as trustee, the
Indenture (For Unsecured Debt Securities Series G), dated as of October 1, 1998,
of the Company to The Bank of New York, as trustee, the Indenture (For Unsecured
Debt Securities Series H), dated as of June 1, 1999, of the Company to The Bank
of New York, as trustee, the Indenture (For Unsecured Debt Securities Series I),
dated as of September 1, 1999, of the Company to The Bank of New York, as
trustee, the Indenture (For Unsecured Debt Securities Series J), dated as of
July 1, 2001, of the Company to The Bank of New York, as trustee, the Indenture
(For Unsecured Debt Securities Series K and Series L), dated as of October 1,
2001, of the Company to The Bank of New York, as trustee, the Purchase Contract
Agreement, dated as of October 1, 2001, of the Company to The Bank of New York,
as agent, attorney-in-fact and trustee, the Indenture (For Unsecured Debt
Securities Series M), dated as of June 1, 2002, of the Company to The Bank of
New York, as trustee, the Purchase Contract Agreement, dated as of June 1, 2002,
of the Company to The Bank of New York, as agent, attorney-in-fact and trustee,
or the Indenture (For Unsecured Debt Securities Series N), dated as of July 1,
2003, of the Company to The Bank of New York, as trustee shall be deemed to be
specifically described in this Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the TIA.
SECTION 11.9 DIRECTION OF AGENT.
Sections 316(a)(1)(A) of the TIA is hereby expressly excluded from this
Agreement, as permitted by the TIA.
54
IN WITNESS WHEREOF, the parties hereto have caused this Purchase
Contract Agreement to be duly executed as of the day and year first above
written.
TXU CORP.
By:
Name:
Title:
THE BANK OF NEW YORK,
as Purchase Contract Agent and Trustee
By:
Name:
Title:
55
EXHIBIT A
FORM OF CORPORATE UNIT CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. _____ Cusip No.___________
Number of Corporate Units _______
TXU CORP.
_____% Corporate Units
($__ Stated Amount)
This Corporate Unit Certificate certifies that ___________ is the
registered Holder of the number of Corporate Units set forth above. Each
Corporate Unit represents (a) a stock purchase contract of TXU Corp., a Texas
corporation (the "Company") (as modified and supplemented and in effect from
time to time, a "Purchase Contract") and (b) beneficial ownership of either (A)
(i) beneficial ownership of a Series _ Senior Note due ____________ of the
Company ("Debt Security"), having a principal amount of $__ or (ii) following a
successful remarketing of the Debt Securities on the Initial Remarketing Date,
an Applicable Ownership Interest in the appropriate Treasury Portfolio, subject
to the pledge of such Debt Security or Applicable Ownership Interest in the
appropriate Treasury Portfolio by the Holder pursuant to the Pledge Agreement or
(B) upon the occurrence of a Tax Event Redemption prior to the Purchase Contract
Settlement Date, an Applicable Ownership Interest in the appropriate Treasury
Portfolio, subject to the Pledge of such Applicable Ownership Interest in the
appropriate Treasury Portfolio by the Holder pursuant to the Pledge Agreement.
All capitalized terms used herein without definition herein shall have the
meaning set forth in the Purchase Contract Agreement referred to below.
Pursuant to the Pledge Agreement, the Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case
may be, constituting part of each Corporate Unit evidenced hereby have been
pledged to the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Purchase Contract comprising a portion of
such Corporate Unit.
The Pledge Agreement provides that all payments of the principal amount
of Pledged Debt Securities or the Stated Amount of the Pledged Applicable
Ownership Interest (as specified in clause (1) of the definition of such term)
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in the appropriate Treasury Portfolio, as the case may be, or payments of
interest on any Pledged Debt Securities or the Pledged Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, constituting
part of the Corporate Units received by the Collateral Agent shall be paid by
the Collateral Agent by wire transfer in same day funds (i) in the case of (A)
payments of interest with respect to Pledged Debt Securities or cash
distributions on the Pledged Applicable Ownership Interest (as specified in
clauses (1)(ii), (1)(iii) or (2)(ii) of the definition of such term) in the
appropriate Treasury Portfolio, as the case may be, and (B) any payments of the
principal amount of Pledged Debt Securities or the Stated Amount of the Pledged
Applicable Ownership Interest (as specified in clauses (1)(i) or (2)(i) of the
definition of such term) in the appropriate Treasury Portfolio, as the case may
be, with respect to any Debt Securities or the Applicable Ownership Interest in
the appropriate Treasury Portfolio, as the case may be, that have been released
from the Pledge pursuant to the Pledge Agreement, to the Agent to the account
designated by the Agent, no later than 2:00 p.m., New York City time, on the
Business Day such payment is received by the Collateral Agent (provided that in
the event such payment is received by the Collateral Agent on a day that is not
a Business Day or after 12:30 p.m., New York City time, on a Business Day, then
such payment shall be made no later than 10:30 a.m., New York City time, on the
next succeeding Business Day) and (ii) in the case of payments of the principal
amount of Debt Securities or the Applicable Ownership Interest (as specified in
clauses (1)(i) or (2)(i) of the definition of such term) in the appropriate
Treasury Portfolio, as the case may be, to the Company on the Purchase Contract
Settlement Date (as defined herein) in accordance with the terms of the Pledge
Agreement, in full satisfaction of the respective obligations of the Holders of
the Corporate Units of which such Pledged Debt Securities or the Pledged
Applicable Ownership Interest in the appropriate Treasury Portfolio, as the case
may be, are a part under the Purchase Contracts forming a part of such Corporate
Units. Payment of interest on any Pledged Debt Securities or cash distribution
on the Pledged Applicable Ownership Interest (as specified in clauses (1)(ii),
1(iii) or (2)(ii) of the definition of such term) in the appropriate Treasury
Portfolio, as the case may be, forming part of a Corporate Unit evidenced hereby
which are payable quarterly in arrears on ___________, ______, _________ and
______ of each year, commencing _______________,
[and________________________________] (each a "Payment Date"), shall, subject to
receipt thereof by the Agent from the Collateral Agent, be paid to the Person in
whose name this Corporate Unit Certificate (or a Predecessor Corporate Unit
Certificate) is registered at the close of business on the Record Date for such
Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Unit Certificate to purchase, and the Company to sell, not later than
___________ (the "Purchase Contract Settlement Date"), at a price of $__ in cash
(the "Purchase Price"), a number of newly-issued shares of Common Stock, without
par value including, where applicable, the preference stock purchase rights
appurtenant thereto ("Common Stock"), of the Company equal to the applicable
Settlement Rate (as defined below), unless on or prior to the Purchase Contract
Settlement Date there shall have occurred a Termination Event or an Early
Settlement with respect to the Corporate Units of which such Purchase Contract
is a part, all as provided in the Purchase Contract Agreement and more fully
described on the herein.
The Settlement Rate is equal to ______________________________.
The Company shall pay, on each Payment Date other than the Initial
Reset Date, if the Initial Reset Date is not also a regular quarterly Payment
Date in respect of each Purchase Contract forming part of a Corporate Unit
evidenced hereby, an amount (the "Contract Adjustment Payments") equal to _____%
per annum of the Stated Amount; computed on the basis of a 360-day year of
twelve 30-day months, subject to deferral at the option of the Company as
provided in the Purchase Contract Agreement and more fully described herein.
Such Contract Adjustment Payments shall be payable to the Person in whose name
this Corporate Unit Certificate (or a Predecessor Corporate Unit Certificate or
a Predecessor Treasury Unit Certificate) is registered on the Register at the
close of business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the Corporate Trust
Office or, at the option of the Company, by check mailed to the address of the
Person entitled thereto at such Person's address as it appears on the Corporate
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Unit Register or by wire transfer to an account appropriately designated in
writing by the Person entitled to payment.
Unless the context otherwise requires, each provision of this Security
shall be part of the Purchase Contracts evidenced hereby. This Security and each
Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement,
dated as of ______________ (as may be supplemented from time to time, the
"Purchase Contract Agreement"), between the Company and The Bank of New York, as
purchase contract agent and trustee (including any successor thereunder, herein
called the "Agent"), to which Purchase Contract Agreement and supplemental
agreements thereto reference is hereby made for a description of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Agent, the Company, and the Holders and of the terms upon which the
Corporate Unit Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Corporate Units to purchase at the applicable Purchase Price, and the
Company to sell, a number of newly issued shares of Common Stock equal to the
Early Settlement Rate or the applicable Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the __ consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date. The "Closing Price" of the Common Stock on any date of determination means
the closing sale price (or, if no closing price is reported, the last reported
sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on
such date or, if the Common Stock is not listed for trading on the NYSE on any
such date, as reported in the composite transactions for the principal United
States national or regional securities exchange on which the Common Stock is so
listed. If the Common Stock is not so listed on a United States national or
regional securities exchange, the Closing Price means the last sale price of the
Common Stock as reported by the NASDAQ Stock Market, or if the Common Stock is
not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization. If such bid price is not available, the Closing Price means market
value of the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained by the Company for this purpose. A
"Trading Day" means a day on which the Common Stock (A) is not suspended from
trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the Common
Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of the Corporate Units evidenced hereby shall pay, on the Purchase
Contract Settlement Date, the applicable Purchase Price for the shares of Common
Stock purchased pursuant to each Purchase Contract evidenced hereby by effecting
a Cash Settlement or, an Early Settlement. A Holder of Corporate Units who does
not make such payment in accordance with the Purchase Contract Agreement or who
does not notify the Agent of such Holder's intention, on or prior to 5:00 p.m.,
New York City time, on the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, to make an effective Cash Settlement or an Early
Settlement, shall have defaulted in its obligations under the related Purchase
Contract and the Collateral Agent shall exercise its rights as a secured
creditor for the benefit of the Company under the Purchase Contract Agreement
and the Pledge Agreement and shall apply the Proceeds of the sale of the related
applicable Pledged Debt Securities held by the Collateral Agent to satisfy the
Holder's obligations under such Purchase Contract to purchase Common Stock at
the Purchase Price.
The Company shall not be obligated to issue any shares of Common Stock
in respect of the Purchase Contract on the Purchase Contract Settlement Date or
deliver any certificates therefor to the Holder unless it shall have received
payment in full of the aggregate Purchase Price for the shares of Common Stock
to be purchased thereunder in the manner herein set forth.
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Under and subject to the terms of the Pledge Agreement and the Purchase
Contract Agreement, the Agent will be entitled to exercise the voting and any
other consensual rights pertaining to the Pledged Debt Securities, but only to
the extent instructed by the Holders as described in the paragraph below. Upon
receipt of notice of any meeting at which holders of Debt Securities are
entitled to vote or upon the solicitation of consents, waivers or proxies of
holders of Debt Securities, the Agent shall, as soon as practicable thereafter,
mail to the Holders of Corporate Units a notice (a) containing such information
as is contained in the notice or solicitation, (b) stating that each Corporate
Unit Holder on the record date set by the Agent therefor shall be entitled to
instruct the Agent as to the exercise of the voting rights pertaining to the
Debt Securities constituting a part of such Holder's Corporate Unit and (c)
stating the manner in which such instructions may be given. Upon the written
request of the Corporate Unit Holders on such record date, the Agent shall
endeavor insofar as practicable to vote or cause to be voted, in accordance with
the instructions set forth in such requests, the maximum number of Debt
Securities as to which any particular voting instructions are received. In the
absence of specific instructions from the Holder of a Corporate Units, the Agent
shall abstain from voting any Debt Securities evidenced by such Corporate Units.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debt
Securities shall be delivered to the Collateral Agent in exchange for the
Pledged Debt Securities. Pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Corporate Units the Tax
Event Treasury Portfolio and promptly remit the remaining portion of such
Redemption Price, if any, to the Agent for payment to the Holders of such
Corporate Units. The Tax Event Treasury Portfolio will be substituted for the
Pledged Debt Securities, and will be held by the Collateral Agent in accordance
with the terms of the Pledge Agreement to secure the obligation of each Holder
of a Corporate Unit to purchase the Common Stock of the Company on the Purchase
Contract Settlement Date under the Purchase Contract constituting a part of such
Corporate Unit. Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Corporate Units and the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Tax Event Treasury Portfolio as the Holder of Corporate Units and
the Collateral Agent had in respect of the Debt Securities subject to the Pledge
thereof as provided in Articles II, III, IV, V and VI of the Pledge Agreement,
and any reference herein to the Pledged Debt Securities shall be deemed to be
reference to such Tax Event Treasury Portfolio. The Company may cause to be made
in any Corporate Unit Certificates thereafter to be issued such change in
phraseology and form (but not in substance) as may be appropriate to reflect the
substitution of the Tax Event Treasury Portfolio for Debt Securities as
collateral.
Upon the successful remarketing of the Pledged Debt Securities on the
Initial Remarketing Date, the proceeds of such remarketing (after deducting any
Remarketing Fee) shall be delivered to the Collateral Agent in exchange for the
Pledged Debt Securities. Pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Remarketing Treasury
Portfolio Purchase Price to purchase on behalf of the Holders of Corporate Units
the Remarketing Treasury Portfolio and promptly remit the remaining portion of
such proceeds to the Agent for payment to the Holders of such Corporate Units.
The Remarketing Treasury Portfolio will be substituted for the outstanding
Pledged Debt Securities, and will be held by the Collateral Agent in accordance
with the terms of the Pledge Agreement to secure the obligation of each Holder
of a Corporate Unit to purchase the Common Stock of the Company on the Purchase
Contract Settlement Date under the Purchase Contract constituting a part of such
Corporate Unit. Following the successful remarketing of the Pledged Debt
Securities on the Initial Remarketing Date, the Holders of Corporate Units and
the Collateral Agent shall have such security interests, rights and obligations
with respect to the Remarketing Treasury Portfolio as the Holder of Corporate
Units and the Collateral Agent had in respect of the Debt Securities subject to
the Pledge thereof as provided in Articles II, III, IV, V and VI of the Pledge
Agreement, and any reference herein to the Debt Securities shall be deemed to be
reference to such Remarketing Treasury Portfolio. The Company may cause to be
made in any Corporate Unit Certificates thereafter to be issued such change in
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phraseology and form (but not in substance) as may be appropriate to reflect the
substitution of the Remarketing Treasury Portfolio for Debt Securities as
collateral.
The Corporate Units are issuable only in registered form and only in
denominations of a single Corporate Unit and any integral multiple thereof. The
transfer of any Corporate Unit Certificate will be registered and Corporate Unit
Certificates may be exchanged as provided in the Purchase Contract Agreement.
The Corporate Unit Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
A Holder of a Corporate Unit may, at any time on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, create
or recreate a Treasury Unit and separate the Debt Security or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as applicable, from
the related Purchase Contract in respect of such Corporate Unit by substituting
the appropriate Treasury Security for the Debt Security, or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, that form a part of
such Corporate Unit in accordance with the Purchase Contract Agreement;
provided, however, that if a successful remarketing of the Debt Securities has
occurred on the Initial Remarketing Date or a Tax Event Redemption has occurred,
Holders of such Corporate Units may make such Collateral Substitutions at any
time on or prior to the second Business Day immediately preceding the Purchase
Contract Settlement Date. Holders may make Collateral Substitutions and
establish Treasury Units (i) only in integral multiples of __ Corporate Units if
only Debt Securities are being substituted by Treasury Securities, or (ii) only
in integral multiples of ______ Corporate Units if the Applicable Ownership
Interests in the appropriate Treasury Portfolio are being substituted by
Treasury Securities. To create __ Treasury Units (if a Tax Event Redemption has
not occurred and the Debt Securities remain a component of the Corporate Units),
or ______ Treasury Units (if a Tax Event Redemption has occurred or the
Remarketing Treasury Portfolio has replaced the Debt Securities as a component
of the Corporate Units as a result of a successful remarketing of such Debt
Securities), the Corporate Unit Holder shall
(a) if a Treasury Portfolio has not replaced any Debt Securities as a
component of Corporate Units as a result of a successful remarketing of the
Debt Securities on the Initial Remarketing Date or a Tax Event Redemption,
deposit with the Collateral Agent a Treasury Security having a principal
amount at maturity of $[1,000]; or
(b) if a Treasury Portfolio has replaced the Debt Securities as a
component of Corporate Units as a result of a successful remarketing of the
Debt Securities on the Initial Remarketing Date or a Tax Event Redemption,
on or prior to the second Business Day immediately preceding the Purchase
Contract Settlement Date, deposit with the Collateral Agent Treasury
Securities having an aggregate principal amount at maturity of $_________;
and
(c) in each case, transfer and surrender the related __ Corporate
Units, or, in the event a Treasury Portfolio is a component of Corporate
Units, ______ Corporate Units, to the Agent accompanied by a notice to the
Agent, substantially in the form of Exhibit B to the Pledge Agreement,
stating that the Holder has transferred the relevant types and amounts of
Treasury Securities to the Collateral Agent and requesting that the Agent
instruct the Collateral Agent to release the applicable Debt Securities or
the Applicable Ownership Interest in the appropriate Treasury Portfolio, as
the case may be, underlying such Corporate Unit, whereupon the Agent shall
promptly give such instruction to the Collateral Agent, substantially in
the form of Exhibit A to the Pledge Agreement.
Upon receipt of the Treasury Securities described in clause (a) or (b)
above and the instructions described in clause (c) above, in accordance with the
terms of the Pledge Agreement, the Collateral Agent will release from the
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Pledge, to the Agent, on behalf of the Holder, Debt Securities or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
that had been components of such Corporate Unit, free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Corporate Units surrendered and transferred;
(ii) transfer the Debt Securities or the Applicable Ownership Interest
in the appropriate Treasury Portfolio, as the case may be, that had been
components of such Corporate Unit to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Treasury Unit Certificate executed by the Company in accordance with the
Purchase Contract Agreement evidencing the same number of Purchase Contracts as
were evidenced by the cancelled Corporate Units.
Holders who elect to separate the Debt Securities or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
from the related Purchase Contracts and to substitute Treasury Securities for
such Debt Securities or the Applicable Ownership Interest in the appropriate
Treasury Portfolio, as the case may be, shall be responsible for any fees or
expenses payable to the Collateral Agent for its services as Collateral Agent in
respect of the substitution, and the Company shall not be responsible for any
such fees or expenses.
A Holder of a Treasury Unit may create or recreate a Corporate Unit by
depositing with the Collateral Agent a Debt Security or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, having an
aggregate principal amount equal to the aggregate principal amount at maturity
of, and in substitution for all, but not less than all, of the Treasury
Securities comprising part of the Treasury Unit in exchange for the release of
such Pledged Treasury Securities in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, except the Initial Reset Date, if the Initial Reset Date is
not also a quarterly Payment Date the Contract Adjustment Payments payable in
respect of each Purchase Contract to the Person in whose name the Corporate Unit
Certificate evidencing such Purchase Contract is registered on the Register at
the close of business on the Record Date next preceding such Payment Date. The
Contract Adjustment Payments will be payable at the Corporate Trust Office or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Corporate Unit Register or
by wire transfer to an account appropriately designated in writing by such
person.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so deferred shall
bear additional Contract Adjustment Payments thereon at the rate of _____% per
annum (computed on the basis of a 360-day year of twelve 30-day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Corporate Unit Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
A-6
shares of Common Stock (in addition to the number of shares equal to the
Settlement Rate) equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of this Corporate Unit Certificate
divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases, redemptions or
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of employees, officers, directors or agents or a stock purchase or
dividend reinvestment plan, or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of such
event or agent benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of such
event requiring the Company to purchase, redeem or acquire its capital stock,
(ii) as a result of a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock, (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of the Company's capital stock or the security
being converted or exchanged, (iv) dividends or distributions in capital stock
of the Company (or rights to acquire capital stock) or repurchases, redemptions
or acquisitions of capital stock in connection with the issuance or exchange of
the Company's capital stock (or securities convertible into or exchangeable for
shares of capital stock) or (v) redemptions, exchanges or repurchases of any
rights outstanding under a shareholder rights plan or the declaration or payment
thereunder of a dividend or distribution of or with respect to rights in the
future.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, and the rights
and obligations of the Holders to purchase Common Stock, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Corporate Unit
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Debt Securities or the Applicable Ownership Interest in
the appropriate Treasury Portfolio, as the case may be, forming a part of the
Corporate Units evidenced hereby from the Pledge in accordance with the
provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, a Holder of Corporate Units may settle the related Purchase
Contracts in their entirety at any time on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, but only in
integral multiples of __ Corporate Units; provided, however, that if a Treasury
Portfolio has become a component of the Corporate Units, Holders of Corporate
Units may settle early only in integral multiples of ______ Corporate Units at
any time on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date. In order to exercise the right to effect any
such early settlement ("Early Settlement") with respect to any Purchase
Contracts evidenced by this Corporate Unit Certificate, the Holder of this
Corporate Unit Certificate shall deliver this Corporate Unit Certificate to the
Agent at the Corporate Trust Office duly endorsed for transfer to the Company or
in blank with the form of Election to Settle Early set forth below duly
completed and executed and accompanied by payment payable to the Company in
immediately available funds in an amount (the "Early Settlement Amount") equal
to the sum of (i) $__ times the number of Purchase Contracts being settled, plus
(ii) if such delivery is made with respect to any Purchase Contracts during the
period from the close of business on any Record Date next preceding any Payment
Date to the opening of business on such Payment Date, an amount equal to the
Contract Adjustment Payments payable, if any, on such Payment Date with respect
A-7
to such Purchase Contracts. Upon Early Settlement of Purchase Contracts by a
Holder of the related Securities, the Pledged Debt Securities or the Pledged
Applicable Ownership Interest in the a Treasury Portfolio underlying such
Securities shall be released from the Pledge as provided in the Pledge Agreement
and the Holder shall be entitled to receive a number of shares of Common Stock
on account of each Purchase Contract forming part of a Corporate Unit as to
which Early Settlement is effected equal to the Early Settlement Rate which
shall be equal to ______ newly issued shares of Common Stock per Purchase
Contract (the "Early Settlement Rate"); provided however, that upon the Early
Settlement of the Purchase Contracts, (i) the Holder thereof will forfeit the
right to receive any Deferred Contract Adjustment Payments, if any, on such
Purchase Contracts, (ii) the Holder's right to receive additional Contract
Adjustment Payments in respect of such Purchase Contracts will terminate, and
(iii) no adjustment will be made to or for the Holder on account of Deferred
Contract Adjustment Payments, or any amount accrued in respect of Contract
Adjustment Payments. The Early Settlement Rate shall be adjusted in the same
manner and at the same time as the Settlement Rate is adjusted as provided in
the Purchase Contract Agreement.
Upon registration of transfer of this Corporate Unit Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Corporate
Unit Certificate. The Company covenants and agrees, and the Holder, by its
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Corporate Unit Certificate, by its acceptance
hereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contracts forming part of the Corporate Units evidenced hereby on its
behalf as its attorney-in-fact, expressly withholds any consent to the
assumption of the Purchase Contracts by the Company, its trustee in bankruptcy,
receiver, liquidator or a person or entity performing similar functions, in the
event that the Company becomes the subject of a case under the Bankruptcy Code
or subject to other similar Federal or State law providing for reorganization or
liquidation, agrees to be bound by the terms and provisions thereof, covenants
and agrees to perform its obligations under such Purchase Contracts, consents to
the provisions of the Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to and agrees to be bound by the Pledge of the Pledged Debt Securities
or the Pledged Applicable Ownership Interest in a Treasury Portfolio, as the
case may be, underlying this Corporate Unit Certificate pursuant to the Pledge
Agreement. The Holder, by its acceptance hereof, further covenants and agrees,
that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect of the principal of the Pledged Debt Securities, or the portion of
the Applicable Ownership Interest (as specified in clauses (1)(i) or 2(i) of the
definition of such term) in the appropriate Treasury Portfolio, on the Purchase
Contract Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.
The Holder of this Corporate Unit Certificate, by its acceptance
hereof, covenants and agrees to treat itself as the owner, for United States
federal, state and local income and franchise tax purposes, of the Debt
Securities or the Applicable Ownership Interest in the appropriate Treasury
Portfolio forming part of the Corporate Units evidenced hereby. The Holder of
this Corporate Unit Certificate, by its acceptance hereof, further covenants and
agrees to treat the Debt Securities forming part of the Corporate Units
evidenced hereby as indebtedness of the Company for United States federal, state
and local income and franchise tax purposes.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts. In addition, certain amendments to the Purchase Contract
A-8
Agreement may be made without any consent of the Holders as provided in the
Purchase Contract Agreement.
THE PURCHASE CONTRACTS SHALL FOR ALL PURPOSES BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company and the Agent and any agent of the Company or the Agent may
treat the Person in whose name this Corporate Unit Certificate is registered on
the Corporate Unit Register as the owner of the Corporate Units evidenced hereby
for the purpose of receiving payments of interest payable quarterly and on the
Initial Reset Date, if the remarketing of the Debt Securities on the third
Business Day immediately preceding the Initial Reset Date is successful on the
Debt Securities receiving payments of Contract Adjustment Payments and any
Deferred Contract Adjustment Payments, performance of the Purchase Contracts and
for all other purposes whatsoever, whether or not any payments in respect
thereof be overdue and notwithstanding any notice to the contrary, and neither
the Company, the Agent nor any such agent shall be affected by notice to the
contrary.
The Purchase Contracts shall not, prior to the settlement thereof in
accordance with the Purchase Contract Agreement, entitle the Holder to any of
the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent during regular business hours of the Agent.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Corporate Unit Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
A-9
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
TXU Corp.
By:
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: The Bank of New York,
not individually but solely as
Attorney-in-Fact of such Holder
By:
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Corporate Unit Certificates referred to in the
within mentioned Purchase Contract Agreement.
THE BANK OF NEW YORK,
as Purchase Contract Agent and Trustee
By:
Authorized Signatory
A-10
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian--------------
(cust) (minor)
Under Uniform Gifts to Minors Act
-----------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in
common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Corporate Unit Certificate and all rights thereunder, hereby
irrevocably constituting and appointing
attorney to transfer said Corporate Unit Certificate on the books of TXU Corp.
with full power of substitution in the premises.
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Corporate Unit
Certificates in every particular, without
alteration or enlargement or any change
whatsoever.
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-11
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Corporate Units
evidenced by this Corporate Unit Certificate be registered in the name of, and
delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: __________________ ____________________________________
Signature
Signature Guarantee: ___________________
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
If shares are to be registered in the name of and REGISTERED HOLDER
delivered to a Person other than the Holder, please
(i) print such Person's name and address and (ii)
provide a guarantee of your signature:
Please print name and address of
Registered Holder:
--------------------------------------- -------------------------------------
Name Name
--------------------------------------- ------------------------------------
Address Address
--------------------------------------- ------------------------------------
--------------------------------------- ------------------------------------
--------------------------------------- ------------------------------------
Social Security or other
Taxpayer Identification
Number, if any ___________________________________
A-12
ELECTION TO SETTLE EARLY
The undersigned Holder of this Corporate Unit Certificate hereby irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Purchase Contract Agreement with respect to the Purchase Contracts
underlying the number of Corporate Units evidenced by this Corporate Unit
Certificate specified below. The undersigned Holder directs that a certificate
for shares of Common Stock deliverable upon such Early Settlement be registered
in the name of, and delivered, together with a check in payment for any
fractional share and any Corporate Unit Certificate representing any Corporate
Units evidenced hereby as to which Early Settlement of the related Purchase
Contracts is not effected, to the undersigned at the address indicated below
unless a different name and address have been indicated below. Pledged Debt
Securities or the Applicable Ownership Interest in the appropriate Treasury
Portfolio, as the case may be, deliverable upon such Early Settlement will be
transferred in accordance with the transfer instructions set forth below. If
shares are to be registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incident thereto.
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock or Corporate Unit Certificates
are to be registered in the name of and delivered to,
and Pledged Debt Securities, or the Treasury Portfolio, REGISTERED HOLDER
as the case may be, are to be transferred to, a Person
other than the Holder, please print such Person's
name and address:
Please print name and address of
Registered Holder:
________________________________________________________________________________
Name Name
________________________________________________________________________________
Address Address
________________________________________________________________________________
Social Security or other Taxpayer Identification
Number, if any ______________________________________
A-13
Transfer Instructions for Pledged Debt Securities, or the Treasury Portfolio, as
the case may be, Transferable Upon Early Settlement or a Termination Event:
A-14
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Date Amount of decrease Amount of increase Principal Amount of Signature of
in Principal Amount in Principal Amount this Global authorized
of the Global of the Global Certificate officer of
Certificate Certificate following such Trustee or Securities
decrease or increase Custodian
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A-15
EXHIBIT B
FORM OF TREASURY UNIT CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. ____________________ Cusip No. _____________
Number of Treasury Units ___________________
TXU CORP.
Treasury Units
($__ Stated Amount)
This Treasury Unit Certificate certifies that ___________ is the
registered Holder of the number of Treasury Units set forth above. Each Treasury
Unit represents (a) a stock purchase contract of TXU Corp., a Texas corporation
(the "Company") (as modified and supplemented and in effect from time to time, a
"Purchase Contract") and (b) a [1/20], or [5]% undivided beneficial ownership
interest in a Treasury Security. All capitalized terms used herein without
definition herein have the meaning set forth in the Purchase Contract Agreement
referred to below.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Treasury Unit evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a portion of such Treasury Unit.
The Pledge Agreement provides that all payments of the principal of any
Treasury Securities received by the Collateral Agent shall be paid by the
Collateral Agent by wire transfer in same day funds (i) in the case of any
principal payments with respect to any Treasury Securities that have been
released from the Pledge pursuant to the Pledge Agreement, to the Holders of the
applicable Treasury Units to the accounts designated by them in writing for such
purpose no later than 2:00 p.m. New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a Business Day
B-1
or after 12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day), and (ii) in the case of the principal of any Pledged
Treasury Securities, to the Company on the Purchase Contract Settlement Date (as
defined herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Treasury Units
of which such Pledged Treasury Securities are a part under the Purchaser
Contracts forming a part of such Treasury Units.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury Unit Certificate to purchase, and the Company, to sell not later than
____________ (the "Purchase Contract Settlement Date"), at a price of $__ in
cash (the "Purchase Price"), a number of newly issued shares of Common Stock,
without par value, of the Company including, where applicable, the preference
stock purchase rights appurtenant thereto ("Common Stock"), equal to the
applicable Settlement Rate (as defined below), unless on or prior to the
Purchase Contract Settlement Date there shall have occurred a Termination Event
or an Early Settlement with respect to the Treasury Units of which such Purchase
Contract is a part, all as provided in the Purchase Contract Agreement and more
fully described below.
The "Settlement Rate" is equal to (a) if the Applicable Market Value
(as defined below) determined with respect to such Purchase Contract Settlement
Date is equal to or greater than $_______ (the "Threshold Appreciation Price"),
______ shares of Common Stock per Purchase Contract, (b) if such Applicable
Market Value is less than the Threshold Appreciation Price but is greater than
$_____, the number of shares of Common Stock per Purchase Contract equal to $__
divided by the Applicable Market Value and (c) if the Applicable Market Value is
less than or equal to $_____, ______ shares of Common Stock per Purchase
Contract, in each case subject to adjustment as provided in the Purchase
Contract Agreement. No fractional shares of Common Stock will be issued upon
settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement.
The Company shall pay on each Payment Date other than the Initial Reset
Date is not also a regular quarterly Payment Date in respect of each Purchase
Contract forming part of a Treasury Unit evidenced hereby an amount (the
"Contract Adjustment Payments") equal to _____% per annum of the Stated Amount
computed on the basis of a 360 day year of twelve 30 day months, subject to
deferral at the option of the Company as provided in the Purchase Contract
Agreement and more fully described below. Such Contract Adjustment Payments
shall be payable to the Person in whose name this Treasury Unit Certificate (or
a Predecessor Treasury Unit Certificate or a Predecessor Corporate Unit
Certificate) is registered on the Register at the close of business on the
Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the Corporate Trust
Office or, at the option of the Company, by check mailed to the address of the
Person entitled thereto as such address appears on the Treasury Unit Register or
by wire transfer to an account appropriately designated in writing by the Person
entitled to payment.
Unless the context otherwise requires, each provision of this Security
shall be part of the Purchase Contracts evidenced hereby. This Security and each
Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement,
dated as of ____________ (as may be supplemented from time to time, the
"Purchase Contract Agreement") between the Company and The Bank of New York, as
purchase contract agent and trustee (including any successor thereunder, herein
called the "Agent"), to which Purchase Contract Agreement and supplemental
agreements thereto reference is hereby made for a description of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Agent, the Company and the Holders and of the terms upon which the Treasury
Unit Certificates are, and are to be, executed and delivered.
B-2
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Treasury Unit to purchase at the applicable Purchase Price, and the
Company to sell, a number of newly issued shares of Common Stock equal to the
applicable Early Settlement Rate or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the __ consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date. The "Closing Price" of the Common Stock on any date of determination means
the closing sale price (or, if no closing price is reported, the last reported
sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on
such date or, if the Common Stock is not listed for trading on the NYSE on any
such date, as reported in the composite transactions for the principal United
States national or regional securities exchange on which the Common Stock is so
listed. If the Common Stock is not so listed on a United States national or
regional securities exchange, the Closing Price means the last sale price of the
Common Stock as reported by the NASDAQ Stock Market, or if the Common Stock is
not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization. If such bid price is not available, the Closing Price means market
value of the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained by the Company for this purpose. A
"Trading Day" means a day on which the Common Stock (A) is not suspended from
trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the Common
Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of the Treasury Units evidenced hereby shall pay, on the Purchase
Contract Settlement Date, the Purchase Price for the shares of Common Stock
purchased pursuant to each Purchase Contract evidenced hereby by effecting a
Cash Settlement or an Early Settlement of each such Purchase Contract or by
applying a principal amount of the Pledged Treasury Securities underlying such
Holder's Treasury Units equal to the Stated Amount of such Purchase Contract to
the purchase of Common Stock. A Holder of Treasury Units who does not make such
payment in accordance with the Purchase Contract Agreement or who does not
notify the Agent of such Holder's intention, on or prior to 5:00 p.m., New York
City time, on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, to make an effective Cash Settlement or an Early Settlement,
shall have defaulted in its obligations under the related Purchase Contract, and
the Collateral Agent shall exercise its rights as a secured creditor for the
benefit of the Company under the Purchase Contract Agreement and the Pledge
Agreement and shall apply the principal amount at maturity of the related
Pledged Treasury Securities held by the Collateral Agent to the Purchase Price
of the Common Stock on such Purchase Contract Settlement Date.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the Purchase Price for
the shares of Common Stock to be purchased thereunder in the manner set forth in
the Purchase Contract Agreement.
The Treasury Unit Certificates are issuable only in registered form and
only in denominations of a single Treasury Unit and any integral multiple
thereof. The transfer of any Treasury Unit Certificate will be registered and
Treasury Unit Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Treasury Unit Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
B-3
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
A Holder of a Treasury Unit may, at any time on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, create
or recreate a Corporate Unit by depositing with the Collateral Agent a Debt
Security or the Applicable Ownership Interest in the applicable Treasury
Portfolio, as the case may be, having an aggregate principal amount equal to the
aggregate principal amount at maturity of, and in substitution for all, but not
less than all, of the Treasury Securities comprising part of the Treasury Unit
in accordance with the Purchase Contract Agreement; provided, however, that if
the Treasury Portfolio has replaced the Debt Securities as a component of
Corporate Units as a result of a successful remarketing of the Debt Securities
on the Initial Remarketing Date or a Tax Event Redemption, such Collateral
Substitutions may be made at any time on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date. Holders of Treasury
Units may make such Collateral Substitutions and establish Corporate Units (i)
only in integral multiples of __ Treasury Units if Treasury Securities are being
replaced by only Debt Securities, or (ii) only in integral multiples of ________
Treasury Units if any Treasury Security is being replaced by the Applicable
Ownership Interest in the appropriate Treasury Portfolio. To create __ Corporate
Units (if a Tax Event Redemption has not occurred and the Debt Securities remain
components of Corporate Units), or ______ Corporate Units (if a Tax Event
Redemption has occurred or the Remarketing Treasury Portfolio has replaced the
Debt Securities as a result of a successful remarketing of such Debt
Securities), the Treasury Unit Holder shall
(a) if a Treasury Portfolio has not replaced the Debt Securities as a
component of Corporate Units as a result of a successful remarketing of the Debt
Securities on the Initial Remarketing Date or a Tax Event Redemption, on or
prior to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, deposit with the Collateral Agent $[1,000] in aggregate
principal amount of Debt Securities; or
(b) if a Treasury Portfolio has replaced the Debt Securities as a
component of Corporate Units as a result of a successful remarketing of the Debt
Securities on the Initial Remarketing Date or a Tax Event Redemption, on or
prior to the second Business Day immediately preceding the Purchase Contract
Settlement Date, deposit with the Collateral Agent the Applicable Ownership
Interest in the Treasury Portfolio for each ______ Corporate Units being created
by the Holder, and having an aggregate principal amount of $_________; and
(c) in each case, transfer and surrender the related __ Treasury Units,
or in the event the Treasury Portfolio is a component of Corporate Units, ______
Corporate Units, to the Agent accompanied by a notice to the Agent,
substantially in the form of Exhibit B to the Pledge Agreement, stating that the
Holder has transferred the relevant amount of Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be, to
the Collateral Agent and requesting that the Agent instruct the Collateral Agent
to release the Treasury Securities underlying such Treasury Units, whereupon the
Agent shall promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit A to the Pledge Agreement.
Upon receipt of the Debt Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, described in
clause (a) or (b) above and the instructions described in clause (c) above, in
accordance with the terms of the Pledge Agreement, the Collateral Agent will
effect the release of the Treasury Securities having a corresponding aggregate
principal amount from the Pledge to the Agent free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
B-4
(i) cancel the related Treasury Units surrendered and transferred;
(ii) transfer the Treasury Securities that had been components of such
Treasury Units to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Corporate Unit Certificate executed by the Company in accordance with the
Purchase Contract Agreement evidencing the same number of Purchase Contracts as
were evidenced by the cancelled Treasury Units.
Holders who elect to separate Pledged Treasury Securities from the
related Purchase Contracts and to substitute Debt Securities or the Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, for such
Pledged Treasury Securities shall be responsible for any fees or expenses
payable to the Collateral Agent for its services as Collateral Agent in respect
of the substitution, and the Company shall not be responsible for any such fees
or expenses.
A Holder of a Corporate Unit may create or recreate a Treasury Unit and
separate the Debt Security or the Applicable Ownership Interest in the
appropriate Treasury Portfolio, as applicable, from the related Purchase
Contract in respect of such Corporate Unit by substituting a Treasury Security
for the Debt Security, or the Applicable Ownership Interest in the appropriate
Treasury Portfolio, that form a part of such Corporate Unit in accordance with
the Purchase Contract Agreement.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, except Initial Reset Date, if the Initial Reset Date is not
also a quarterly Payment Date, the Contract Adjustment Payments payable in
respect of each Purchase Contract to the Person in whose name the Treasury Unit
Certificate evidencing such Purchase Contract is registered on the Register at
the close of business on the Record Date next preceding such Payment Date. The
Contract Adjustment Payments will be payable at the Corporate Trust Office or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Treasury Unit Register or
by wire transfer to an account appropriately designated in writing by such
person.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so deferred shall
bear additional Contract Adjustment Payments thereon at the rate of _____% per
annum (computed on the basis of a 360-day year of twelve 30-day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Treasury Unit Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
shares of Common Stock (in addition to the number of shares equal to the
Settlement Rate) equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of this Treasury Unit Certificate
divided by (y) the Applicable Market Value.
B-5
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases, redemptions or
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of employees, officers, directors or agents or a stock purchase or
dividend reinvestment plan, or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of such
event or agent benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of such
event requiring the Company to purchase, redeem or acquire its capital stock,
(ii) as a result of a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock, (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of the Company's capital stock or the security
being converted or exchanged, (iv) dividends or distributions in capital stock
of the Company (or rights to acquire capital stock) or repurchases, redemptions
or acquisitions of capital stock in connection with the issuance or exchange of
the Company's capital stock (or securities convertible into or exchangeable for
shares of capital stock) or (v) redemptions, exchanges or repurchases of any
rights outstanding under a shareholder rights plan or the declaration or payment
thereunder of a dividend or distribution of or with respect to rights in the
future.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, and the rights
and obligations of the Holders to purchase Common Stock shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Treasury Unit
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Securities from the Pledge in accordance with
the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, a Holder of Treasury Units may settle the related Purchase
Contracts in their entirety on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, but only in integral multiples
of __ Treasury Units. In order to exercise the right to effect any such early
settlement ("Early Settlement") with respect to any Purchase Contracts evidenced
by this Treasury Unit Certificate, the Holder of this Treasury Unit Certificate
shall deliver this Treasury Unit Certificate to the Agent at the Corporate Trust
Office duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early set forth below duly completed and executed and
accompanied by payment payable to the Company in immediately available funds
payable to the order of the Company in an amount (the "Early Settlement Amount")
equal to the sum of (i) $__ times the number of Purchase Contracts being
settled, (ii) if such delivery is made with respect to any Purchase Contracts
during the period from the close of business on any Record Date next preceding
any Payment Date to the opening of business on such Payment Date, an amount
equal to the Contract Adjustment Payments payable, if any, on such Payment Date
with respect to such Purchase Contracts. Upon Early Settlement of Purchase
Contracts by a Holder of the related Securities, the Pledged Treasury Securities
underlying such Securities shall be released from the Pledge as provided in the
Pledge Agreement and the Holder shall be entitled to receive a number of shares
of Common Stock on account of each Purchase Contract forming part of a Treasury
Unit as to which Early Settlement is effected equal to the Early Settlement Rate
which shall be equal to ______ newly issued shares of Common Stock per Purchase
B-6
Contract (the "Early Settlement Rate"); provided however, that upon the Early
Settlement of the Purchase Contracts, (i) the Holder thereof will forfeit the
right to receive any Deferred Contract Adjustment Payments, if any, on such
Purchase Contracts, (ii) the Holder's right to receive additional Contract
Adjustment Payments in respect of such Purchase Contracts will terminate, and
(iii) no adjustment will be made to or for the Holder on account of Deferred
Contract Adjustment Payments, or any amount accrued in respect of Contract
Adjustment Payments. The Early Settlement Rate shall be adjusted in the same
manner and at the same time as the Settlement Rate is adjusted, as provided in
the Purchase Contract Agreement.
Upon registration of transfer of this Treasury Unit Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Treasury
Unit Certificate. The Company covenants and agrees, and the Holder, by its
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Treasury Unit Certificate, by its acceptance hereof,
irrevocably authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Treasury Units evidenced hereby on its behalf as
its attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in
bankruptcy, receiver, liquidator or a person or entity performing similar
functions, in the event that the Company becomes the subject of a case under the
Bankruptcy Code or subject to other similar Federal or State law providing for
reorganization or liquidation, agrees to be bound by the terms and provisions
thereof, covenants and agrees to perform its obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract Agreement,
authorizes the Agent to enter into and perform the Pledge Agreement on its
behalf as its attorney-in-fact, and consents to the Pledge of the Treasury
Securities underlying this Treasury Unit Certificate pursuant to the Pledge
Agreement. The Holder, by its acceptance hereof, further covenants and agrees,
that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect to the Stated Amount of the Pledged Treasury Securities on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
The Holder of this Treasury Unit Certificate, by its acceptance hereof,
covenants and agrees to treat itself as the owner, for United States federal,
state and local income and franchise tax purposes, of the Treasury Securities
forming part of the Treasury Units evidenced hereby.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts. In addition, certain amendments to the Purchase Contract
Agreement may be made without any consent of the Holders as provided in the
Purchase Contract Agreement.
THE PURCHASE CONTRACTS SHALL FOR ALL PURPOSES BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company and the Agent and any agent of the Company or the Agent may
treat the Person in whose name this Treasury Unit Certificate is registered on
the Treasury Unit Register as the owner of the Treasury Units evidenced hereby
for the purpose of receiving payments of interest on the Treasury Securities,
receiving payments of Contract Adjustment Payments and any Deferred Contract
Adjustment Payments, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect thereof be overdue
B-7
and notwithstanding any notice to the contrary, and neither the Company, the
Agent nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof, in
accordance with the Purchase Agreement, entitle the Holder to any of the rights
of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent during regular business hours of the Agent.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Treasury Unit Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
B-8
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
TXU Corp.
By:
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: The Bank of New York,
not individually but solely as
Attorney-in-Fact of such Holder
By:
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Treasury Unit Certificates referred to in the
within mentioned Purchase Contract Agreement.
THE BANK OF NEW YORK,
as Purchase Contract Agent and Trustee
By:
Authorized Signatory
B-9
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian--------------
(cust) (minor)
Under Uniform Gifts to Minors Act
-----------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in
common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Treasury Unit Certificate and all rights thereunder, hereby
irrevocably constituting and appointing
attorney to transfer said Treasury Unit Certificate on the books of TXU Corp.
with full power of substitution in the premises.
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Treasury Unit
Certificates in every particular, without
alteration or enlargement or any change
whatsoever.
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-10
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Treasury Units
evidenced by this Treasury Unit Certificate be registered in the name of, and
delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
If shares are to be registered in the name of REGISTERED HOLDER
and delivered to a Person other than the
Holder, please print such Person's name and
address:
Please print name and address
of Registered Holder:
Name Name
Address Address
Social Security or other
Taxpayer Identification
Number, if any
___________________________________
B-11
ELECTION TO SETTLE EARLY
The undersigned Holder of this Treasury Unit Certificate hereby irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Purchase Contract Agreement with respect to the Purchase Contracts
underlying the number of Treasury Units evidenced by this Treasury Unit
Certificate specified below. The undersigned Holder directs that a certificate
for shares of Common Stock deliverable upon such Early Settlement be registered
in the name of, and delivered, together with a check in payment for any
fractional share and any Treasury Unit Certificate representing any Treasury
Units evidenced hereby as to which Early Settlement of the related Purchase
Contracts is not effected, to the undersigned at the address indicated below
unless a different name and address have been indicated below. Pledged Treasury
Securities deliverable upon such Early Settlement will be transferred in
accordance with the transfer instructions set forth below. If shares are to be
registered in the name of a Person other than the undersigned, the undersigned
will pay any transfer tax payable incident thereto.
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-12
Number of Securities evidenced hereby as to which Early Settlement
of the related Purchase Contracts is being elected:
If shares of Common Stock or Treasury REGISTERED HOLDER
Unit Certificates are to be registered
in the name of and delivered to, and
Pledged Tresury Securities, are to be
transferred to, a Person other than the
Holder, please print such Person's name
and address: Please print name and address of
Registered Holder:
Name Name
Address Address
Social Security or other Taxpayer Identification
Number, if any
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
B-13
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Date Amount of decrease Amount of increase Principal Amount of Signature of
in Principal Amount in Principal Amount this Global authorized
of the Global of the Global Certificate officer of
Certificate Certificate following such Trustee or Securities
decrease or increase Custodian
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
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B-14
EXHIBIT C
NOTICE TO SETTLE BY SEPARATE CASH
Attention:
Re: Securities of TXU Corp. (the "Company")
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.4 of the Purchase Contract Agreement, dated as of ______________
among the Company, yourselves, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts, that such Holder has
elected to pay to the Collateral Agent, on or prior to 11:00 a.m. New York City
time, on the Business Day immediately preceding the Purchase Contract Settlement
Date, (in lawful money of the United States by [certified or cashiers check or]
wire transfer, in immediately available funds), $_________ as the Purchase Price
for the shares of Common Stock issuable to such Holder by the Company under the
related Purchase Contract on the Purchase Contract Settlement Date. The
undersigned Holder hereby instructs you to notify promptly the Collateral Agent
of the undersigned Holders election to make such cash settlement with respect to
the Purchase Contracts related to such Holder's [Corporate Units] [Treasury
Units].
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Please print name and address of Registered Holder:
________________________________________________________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
__________________________________
__________________________________
C-1
EXHIBIT 4(j)
TXU CORP.
AND
AS COLLATERAL AGENT, CUSTODIAL AGENT
AND SECURITIES INTERMEDIARY
AND
THE BANK OF NEW YORK
AS PURCHASE CONTRACT AGENT
PLEDGE AGREEMENT
DATED AS OF ____________
TABLE OF CONTENTS
-----------------
Page No.
--------
ARTICLE I. DEFINITIONS.........................................................2
ARTICLE II. PLEDGE; CONTROL AND PERFECTION.....................................6
Section 2.1 The Pledge.................................................6
Section 2.2 Control and Perfection.....................................7
ARTICLE III. DISTRIBUTIONS ON PLEDGED COLLATERAL...............................8
ARTICLE IV. SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF
DEBT SECURITIES..................................................10
Section 4.1 Substitution for Debt Securities and the Creation of
Treasury Units.............................................10
Section 4.2 Substitution for Treasury Securities and the Creation of
Corporate Units............................................11
Section 4.3 Termination Event...........................................12
Section 4.4 Cash Settlement.............................................13
Section 4.5 Early Settlement............................................14
Section 4.6 Application of Proceeds; Settlement.........................15
ARTICLE V. VOTING RIGHTS -- DEBT SECURITIES...................................16
ARTICLE VI. RIGHTS AND REMEDIES; SUBSTITUTION OF A TREASURY
PORTFOLIO FOR DEBT SECURITIES....................................17
Section 6.1 Rights and Remedies of the Collateral Agent.................17
Section 6.2 Substitution of a Treasury Portfolio for Debt
Securities.................................................18
Section 6.3 Initial Remarketing.........................................19
Section 6.4 Substitutions...............................................20
ARTICLE VII. REPRESENTATIONS AND WARRANTIES; COVENANTS........................20
Section 7.1 Representations and Warranties..............................20
Section 7.2 Covenants...................................................21
ARTICLE VIII. THE COLLATERAL AGENT............................................21
Section 8.1 Appointment, Powers and Immunities..........................21
Section 8.2 Instructions of the Company.................................22
Section 8.3 Reliance by Collateral Agent................................22
Section 8.4 Rights in Other Capacities..................................23
Section 8.5 Non-Reliance on Collateral Agent............................23
Section 8.6 Compensation and Indemnity..................................23
Section 8.7 Failure to Act..............................................24
Section 8.8 Resignation of Collateral Agent.............................24
Section 8.9 Right to Appoint Agent or Advisor...........................25
Section 8.10 Survival....................................................25
Section 8.11 Exculpation.................................................25
i
ARTICLE IX. AMENDMENT.........................................................25
Section 9.1 Amendment Without Consent of Holders........................25
Section 9.2 Amendment with Consent of Holders...........................26
Section 9.3 Execution of Amendments.....................................27
Section 9.4 Effect of Amendments........................................27
Section 9.5 Reference to Amendments.....................................27
ARTICLE X. MISCELLANEOUS......................................................27
Section 10.1 No Waiver...................................................27
Section 10.2 Governing Law...............................................27
Section 10.3 Notices.....................................................28
Section 10.4 Successors and Assigns......................................28
Section 10.5 Counterparts................................................28
Section 10.6 Severability................................................28
Section 10.7 Expenses, etc...............................................29
Section 10.8 Security Interest Absolute..................................29
ii
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of ____________ (this "Agreement"), by and
among TXU Corp., a Texas corporation (the "Company"), as pledgee,
___________________, a New York banking corporation, not individually but solely
as collateral agent (in such capacity, together with its successors in such
capacity, the "Collateral Agent"), as custodial agent (in such capacity,
together with its successors in such capacity, the "Custodial Agent") and as a
"securities intermediary" as defined in Section 8-102(a)(14) of the Code (as
defined herein) (in such capacity, together with its successors in such
capacity, the "Securities Intermediary"), and The Bank of New York, a New York
banking corporation, not individually but solely as purchase contract agent and
as attorney-in-fact of the Holders (as defined in the Purchase Contract
Agreement) from time to time of the Securities (as hereinafter defined) (in such
capacity, together with its successors in such capacity, the "Purchase Contract
Agent") under the Purchase Contract Agreement (as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued up to __________ new
securities (the "Securities") of the Company. Terms not otherwise defined herein
are used herein with the meaning ascribed to them in the Purchase Contract
Agreement.
The Securities will initially consist of _________ units (referred to
as "Equity Units") with a stated amount, per Equity Unit, equal to $__ (the
"Stated Amount"). The Equity Units will initially consist of _________ Corporate
Units and _ Treasury Units. Each Corporate Unit will initially be comprised of
(a) a stock purchase contract (as modified and supplemented and in effect from
time to time, a "Purchase Contract") under which (i) the Holder will purchase
from the Company not later than ____________ ("Purchase Contract Settlement
Date"), for $__ in cash, a number of newly issued shares of common stock,
without par value, of the Company ("Common Stock") equal to the applicable
Settlement Rate and (ii) the Company will pay certain Contract Adjustment
Payments to the Holders as provided in the Purchase Contract Agreement, and (b)
either (A) prior to the Purchase Contract Settlement Date so long as no Tax
Event Redemption has occurred, (i) beneficial ownership of a Series _ Senior
Note due ____________ of the Company (the "Debt Securities"), having a principal
amount of $__, or (ii) following a successful remarketing of the Debt Securities
on the Initial Remarketing Date, the Applicable Ownership Interest in the
Remarketing Treasury Portfolio, or (B) upon the occurrence of a Tax Event
Redemption prior to the Purchase Contract Settlement Date, the Applicable
Ownership Interest in the Tax Event Treasury Portfolio.
Each Treasury Unit will initially be comprised of (a) a Purchase
Contract under which (i) the Holder will purchase from the Company not later
than the Purchase Contract Settlement Date, for $__ in cash, a number of newly
issued shares of Common Stock equal to the applicable Settlement Rate and (ii)
the Company will pay certain Contract Adjustment Payments to the Holders as
provided in the Purchase Contract Agreement, and (b) a [1/20], or [5]% undivided
beneficial ownership interest in a zero-coupon U.S. Treasury security having a
principal amount at maturity equal to $[1,000] and maturing on ____________
(CUSIP No. _________) ("Treasury Security").
[Pursuant to the terms of the Purchase Contract Agreement, the Company
may issue up to _________ additional Corporate Units and, if the Company issues
such additional Corporate Units, the related Debt Securities will be pledged
hereunder.]
Pursuant to the terms of the Indenture (as defined below), the Company
will issue the Debt Securities in an aggregate principal amount equal to or
greater than the aggregate Stated Amount of all Corporate Units.
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
and in the name of such Holders and to grant the pledge provided hereby of the
Debt Securities, any Applicable Ownership Interest in a Treasury Portfolio and
any Treasury Securities to secure each Holder's obligations under the related
Purchase Contract, as provided herein and subject to the terms hereof. Upon such
pledge, the Debt Securities will be beneficially owned by the Holders but will
be owned of record by the Purchase Contract Agent subject to the Pledge
hereunder, and the Treasury Securities (and the Applicable Ownership Interest in
the appropriate Treasury Portfolio) will be beneficially owned by the Holders
but will be held in book-entry form by the Securities Intermediary subject to
the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own
behalf and as attorney-in-fact of the Holders from time to time of the
Securities, agree as follows:
ARTICLE I.
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(c) terms not otherwise defined herein are used herein with the
meaning ascribed to them in the Purchase Contract Agreement.
"AGREEMENT" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
2
"BANKRUPTCY CODE" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in The City of New York (in the State of
New York) are permitted or required by any applicable law to close.
"CASH" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"CODE" has the meaning specified in Section 6.1 hereof.
"COLLATERAL" has the meaning specified in Section 2.1 hereof.
"COLLATERAL ACCOUNT" means the securities account (number __________)
maintained at ___________________ in the name "The Bank of New York, as Purchase
Contract Agent on behalf of the holders of Securities subject to the security
interest of ___________________ as Collateral Agent under the Pledge Agreement,
for the benefit of TXU Corp., as pledgee" and any successor account.
"COLLATERAL AGENT" has the meaning specified in the first paragraph of
this Agreement.
"COMMON STOCK" has the meaning specified in the Recitals.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this Agreement until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"CUSTODIAL AGENT" has the meaning specified in the first paragraph of
this Agreement.
"DEBT SECURITY" AND "DEBT SECURITIES" have the respective meanings
specified in the Recitals.
"EQUITY UNITS" has the meaning specified in the Recitals.
"INDENTURE" means the Indenture (For Unsecured Debt Securities Series
_) dated as of ____________ between the Company and the Indenture Trustee
pursuant to which the Debt Securities are to be issued, as originally executed
and delivered and as it may from time to time be supplemented or amended by one
or more indentures supplemental thereto entered into pursuant to the applicable
provisions thereof and shall include the terms of a particular series of
securities established as contemplated by Section 301 thereof.
"INDENTURE TRUSTEE" means The Bank of New York, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
3
"INITIAL RESET DATE" means any Business Day, as selected by the
Company in its sole discretion, from _________________ to _________________.
"INTERMEDIARY" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"PERMITTED INVESTMENTS" means any one of the following which shall
mature not later than the next succeeding Business Day [(i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof or such indebtedness
constitutes a general obligation of it); (ii) deposits, certificates of deposit
or acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than U.S. $200 million at the time of
deposit; (iii) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (ii); (iv) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated under
the laws of the United States or any State thereof, which commercial paper has a
rating at the time of purchase at least equal to "A-1" by Standard & Poor's
Ratings Service, a Division of McGraw-Hill Companies, Inc. ("S&P") or at least
equal to "P-1" by Moody's Investors Service, Inc. ("Moody's"); and (v)
investments in money market funds registered under the Investment Company Act of
1940, as amended, rated in the highest applicable rating category by S&P or
Moody's].
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PLEDGE" has the meaning specified in Section 2.1 hereof.
"PLEDGED APPLICABLE OWNERSHIP INTEREST IN A TREASURY PORTFOLIO" has
the meaning specified in Section 2.1 hereof.
"PLEDGED DEBT SECURITIES" has the meaning specified in Section 2.1
hereof.
"PLEDGED TREASURY SECURITIES" has the meaning specified in Section 2.1
hereof.
"PROCEEDS" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and
other property from time to time received, receivable or otherwise distributed
upon the sale, exchange, collection or disposition of the Collateral or any
proceeds thereof.
"PURCHASE CONTRACT" has the meaning specified in the Recitals.
"PURCHASE CONTRACT AGENT" has the meaning specified in the first
paragraph of this Agreement.
"PURCHASE CONTRACT AGREEMENT" has the meaning specified in the
Recitals.
4
"SECURITIES" has the meaning specified in the Recitals.
"SECURITIES INTERMEDIARY" has the meaning specified in the first
paragraph of this Agreement.
"SECURITY ENTITLEMENT" has the meaning set forth in
Section 8-102(a)(17) of the Code.
"SEPARATE DEBT SECURITIES" means any Debt Securities that are not
Pledged Debt Securities.
"STATED AMOUNT" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES REGULATIONS" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"TRANSFER" means, with respect to the Collateral and in accordance
with the instructions of the Collateral Agent, the Purchase Contract Agent or
the Holder, as applicable:
(i) except as otherwise provided in Section 2.1 hereof, in the
case of Collateral consisting of securities which cannot be delivered by
book-entry or which the parties agree are to be delivered in physical form,
delivery in appropriate physical form to the recipient accompanied by any duly
executed instruments of transfer, assignments in blank, transfer tax stamps and
any other documents necessary to constitute a legally valid transfer to the
recipient; and
(ii) in the case of Collateral consisting of securities
maintained in book-entry form, by causing a "securities intermediary" (as
defined in Section 8-102(a)(14) of the Code) to (i) credit a Security
Entitlement with respect to such securities to a "securities account" (as
defined in Section 8-501(a) of the Code) maintained by or on behalf of the
recipient and (ii) to issue a confirmation to the recipient with respect to such
credit. In the case of Collateral to be delivered to the Collateral Agent, the
securities intermediary shall be the Securities Intermediary and the securities
account shall be the Collateral Account.
"TREASURY SECURITY" has the meaning specified in the Recitals.
"VALUE" with respect to any item of Collateral on any date means, as
to (i) Debt Securities, the aggregate principal amount thereof, (ii) Cash, the
face amount thereof and (iii) Treasury Securities, the aggregate principal
amount thereof at maturity; provided however, that in the case of the
remarketing of the Debt Securities on the third Business Day immediately
preceding the Initial Reset Date, Value means the Remarketing Treasury Portfolio
Purchase Price.
5
ARTICLE II.
PLEDGE; CONTROL AND PERFECTION
SECTION 2.1 THE PLEDGE.
The Holders from time to time acting through the Purchase Contract
Agent, as their attorney-in-fact, and the Purchase Contract Agent, as such
attorney-in-fact, hereby pledge and grant to the Collateral Agent, for the
benefit of the Company, as collateral security for the performance when due by
such Holders of their respective obligations under the related Purchase
Contracts, a security interest in all of the right, title and interest of such
Holders and the Purchase Contract Agent (a) in the Debt Securities and Treasury
Securities constituting a part of the Securities and any Treasury Securities
delivered in exchange for any Debt Securities, and any Debt Securities delivered
in exchange for any Treasury Securities, in accordance with Article IV hereof,
in each case that have been Transferred to or received by the Collateral Agent
and not released by the Collateral Agent to such Holders or the Purchase
Contract Agent under the provisions of this Agreement; (b) in payments made by
Holders pursuant to Section 4.4 hereof; (c) in the Collateral Account and all
securities, financial assets, Cash and other property credited thereto and all
Security Entitlements related thereto; (d) in the Applicable Ownership Interest
in the Treasury Portfolio purchased on behalf of the Holders of Corporate Units
by the Collateral Agent upon the occurrence of (i) a Tax Event Redemption as
provided in Section 6.2 hereof or (ii) a successful remarketing of the Debt
Securities and (e) all Proceeds of the foregoing (all of the foregoing,
collectively, the "Collateral"). Prior to or concurrently with the execution and
delivery of this Agreement, the Purchase Contract Agent, on behalf of the
initial Holders of the Securities, shall cause the Debt Securities comprising a
part of the Corporate Units to be Transferred to the Collateral Agent for the
benefit of the Company. Such Debt Securities shall be Transferred by physically
delivering such Debt Securities to the Collateral Agent endorsed in blank.
Treasury Securities and any Treasury Portfolio, as applicable, shall be
Transferred to the Collateral Account maintained by the Collateral Agent at the
Securities Intermediary by book-entry transfer to the Collateral Account in
accordance with the TRADES Regulations and other applicable law and by the
notation by the Securities Intermediary on its books that a Security Entitlement
with respect to such Treasury Securities or Treasury Portfolio has been credited
to the Collateral Account. For purposes of perfecting the Pledge under
applicable law, including, to the extent applicable, the TRADES Regulations or
the Uniform Commercial Code as adopted and in effect in any applicable
jurisdiction, the Collateral Agent shall be the agent of the Company as provided
herein. The pledge provided in this Section 2.1 is herein referred to as the
"Pledge" and the Debt Securities, Treasury Securities or the Applicable
Ownership Interest in any Treasury Portfolio subject to the Pledge, excluding
any Debt Securities or Treasury Securities or interest in any Treasury Portfolio
released from the Pledge as provided in Article IV hereof, are hereinafter
referred to as "Pledged Debt Securities", the "Pledged Treasury Securities," or
"Pledged Applicable Ownership Interest in a Treasury Portfolio," respectively,
and collectively, the "Pledged Securities." Subject to the Pledge and the
provisions of Section 2.2 hereof, the Holders from time to time shall have full
beneficial ownership of the Collateral. The Collateral Agent shall have the
right to have the Debt Securities or any other Securities held in physical form
reregistered in its name or in the name of its agent or the Securities
Intermediary and credited to the Collateral Account.
6
Except as may be required in order to release Debt Securities (or, if
(i) a Tax Event Redemption or (ii) a successful remarking of the Debt
Securities, as the case may be, has occurred, the Applicable Ownership Interest
in the appropriate Treasury Portfolio) or Treasury Securities in connection with
a Holder's election to convert its investment from Corporate Units to Treasury
Units, or from Treasury Units to Corporate Units, as the case may be, or except
as otherwise required to release Pledged Securities as specified herein, neither
the Collateral Agent nor the Securities Intermediary shall relinquish physical
possession of any certificate evidencing Debt Securities (or, if (i) a Tax Event
Redemption or (ii) a successful remarking of the Debt Securities, as the case
may be, has occurred, the Applicable Ownership Interest in the appropriate
Treasury Portfolio) or Treasury Securities prior to the termination of this
Agreement. If it becomes necessary for the Collateral Agent to relinquish
physical possession of a certificate in order to release a portion of the Debt
Securities evidenced thereby from the Pledge, the Collateral Agent shall use its
best efforts to obtain physical possession of a replacement certificate
evidencing any Debt Securities remaining subject to the Pledge hereunder
registered to it or endorsed in blank within ten days of the date it
relinquished possession. The Collateral Agent shall promptly notify the Company
of its failure to obtain possession of any such replacement certificate as
required hereby.
SECTION 2.2 CONTROL AND PERFECTION.
(a) In connection with the Pledge granted in Section 2.1, and subject
to the other provisions of this Agreement, the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, hereby authorize
and direct the Securities Intermediary (without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any instructions and
"entitlement orders" (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent on behalf of the Company may give in writing with respect to
the Collateral Account, the Collateral credited thereto and any Security
Entitlements with respect to any thereof. Such instructions and entitlement
orders may, without limitation, direct the Securities Intermediary to transfer,
redeem, sell, liquidate, assign, deliver or otherwise dispose of the Debt
Securities, the Treasury Securities, any Treasury Portfolio and any Security
Entitlements with respect thereto and to pay and deliver any income, proceeds or
other funds derived therefrom to the Company. The Purchase Contract Agent and
the Holders from time to time, acting through the Purchase Contract Agent, each
hereby further authorize and direct the Collateral Agent, as agent of the
Company, to itself issue instructions and entitlement orders, and to otherwise
take action, with respect to the Collateral Account, the Collateral credited
thereto and any Security Entitlements with respect thereto, pursuant to the
terms and provisions hereof, all without the necessity of obtaining the further
consent of the Purchase Contract Agent or any of the Holders. The Collateral
Agent shall be the agent of the Company and shall act as directed in writing by
the Company. Without limiting the generality of the foregoing, the Collateral
Agent shall issue entitlement orders to the Securities Intermediary when and as
directed by the Company.
(b) The Securities Intermediary hereby confirms and agrees that:
(i) all securities or other property underlying any financial assets credited to
the Collateral Account shall be registered in the name of the Securities
Intermediary, indorsed to the Securities Intermediary or in blank or credited to
another collateral account maintained in the name of the Securities Intermediary
and in no case will any financial asset credited to the Collateral Account be
7
registered in the name of the Purchase Contract Agent, the Company or any
Holder, payable to the order of, or specially indorsed to, the Purchase Contract
Agent, the Collateral Agent, the Company or any Holder except to the extent the
foregoing have been specially indorsed to the Securities Intermediary or in
blank; (ii) all property delivered to the Securities Intermediary pursuant to
this Pledge Agreement (including, without limitation, any Debt Securities, the
Applicable Ownership Interest in any Treasury Portfolio or any Treasury
Securities) will be promptly credited to the Collateral Account; (iii) the
Collateral Account is an account to which financial assets are or may be
credited, and the Securities Intermediary shall, subject to the terms of this
Agreement, treat the Purchase Contract Agent as the "entitlement holder" (as
defined in Section 8-102(a)(7) of the Code) with respect to the Collateral
Account; (iv) the Securities Intermediary has not entered into, and until the
termination of this Agreement will not enter into, any agreement with any other
Person relating to the Collateral Account and/or any financial assets credited
thereto pursuant to which it has agreed to comply with "entitlement orders" (as
defined in Section 8-102(a)(8) of the Code) of such other Person; and (v) the
Securities Intermediary has not entered into, and until the termination of this
Agreement will not enter into, any agreement with the Company, the Collateral
Agent, the Purchase Contract Agent or the Holders of the Securities purporting
to limit or condition the obligation of the Securities Intermediary to comply
with entitlement orders as set forth in this Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each item of
property (whether investment property, financial asset, security, instrument or
cash) credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement (or any
portion hereof) and any other agreement now existing or hereafter entered into,
the terms of this Agreement shall prevail.
(e) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, and each of them severally, with
full power of substitution, as the Purchase Contract Agent's attorney-in-fact to
take on behalf of, and in the name, place and stead of the Purchase Contract
Agent and the Holders, any action necessary or desirable to perfect and to keep
perfected the security interest in the Collateral referred to in Section 2.1.
The grant of such power-of-attorney shall not be deemed to require of the
Collateral Agent any specific duties or obligations not otherwise assumed by the
Collateral Agent hereunder.
ARTICLE III.
DISTRIBUTIONS ON PLEDGED COLLATERAL
So long as the Purchase Contract Agent is the registered owner of the
Pledged Debt Securities, it shall receive all payments thereon. If the Pledged
Debt Securities are reregistered, such that the Collateral Agent becomes the
registered holder, all payments of principal or interest on such Pledged Debt
Securities, together with any payments of principal or interest or cash
distributions in respect of any other Pledged Securities received by the
8
Collateral Agent that are properly payable hereunder shall be paid by the
Collateral Agent by wire transfer in same day funds:
(a) in the case of (A) payment of interest with respect to the
Pledged Debt Securities or cash distributions on the appropriate Pledged
Applicable Ownership Interest in a Treasury Portfolio (as specified in
clauses (1)(ii), (1)(iii) or (2)(ii) of the definition of the term Applicable
Ownership Interest), as the case may be, and (B) any payments of principal with
respect to any Debt Securities or the appropriate Applicable Ownership Interest
(as specified in clauses (1)(i) or (2)(i) of the definition of such term) in a
Treasury Portfolio, as the case may be, that have been released from the Pledge
pursuant to Section 4.3 hereof, to the Purchase Contract Agent, for the benefit
of the relevant Holders of Corporate Units, to the account designated by the
Purchase Contract Agent for such purpose, no later than 2:00 p.m., New York City
time, on the Business Day such payment is received by the Collateral Agent
(provided that in the event such payment is received by the Collateral Agent on
a day that is not a Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30 a.m., New York
City time, on the next succeeding Business Day);
(b) in the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant to
Section 4.3 hereof, to the Holders of the Treasury Units to the accounts
designated by them in writing to the Collateral Agent for such purpose no later
than 2:00 p.m., New York City time, on the Business Day such payment is received
by the Collateral Agent (provided that in the event such payment is received by
the Collateral Agent on a day that is not a Business Day or after 12:30 p.m.,
New York City time, on a Business Day, then such payment shall be made no later
than 10:30 a.m., New York City time, on the next succeeding Business Day); and
(c) in the case of payments of the principal of any Pledged Debt
Securities or on the appropriate Pledged Applicable Ownership Interest in a
Treasury Portfolio (as specified in clauses (1)(i) or (2)(i) of the definition
of the term Applicable Ownership Interest), as the case may be, or the principal
of any Pledged Treasury Securities, to the Company on the Purchase Contract
Settlement Date in accordance with the procedure set forth in Section 4.6(a) or
4.6(b) hereof, in full satisfaction of the respective obligations of the Holders
under the related Purchase Contracts.
All payments received by the Purchase Contract Agent as provided herein shall be
applied by the Purchase Contract Agent pursuant to the provisions of the
Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent or a Holder of Corporate Units shall receive any payments of
principal on account of any Debt Security or, if applicable, the Applicable
Ownership Interest (as specified in clauses (1)(i) or (2)(i) of the definition
of such term) in the appropriate Treasury Portfolio that, at the time of such
payment, is a Pledged Debt Security or the Pledged Applicable Ownership Interest
in a Treasury Portfolio, as the case may be, or the Purchase Contract Agent or a
Holder of Treasury Units shall receive any payments of principal on account of
any Treasury Securities that, at the time of such payment, are Pledged Treasury
Securities, the Purchase Contract Agent or such Holder, as the case may be,
shall transfer the Proceeds of such payment of principal on such Pledged Debt
Security, Pledged Applicable Ownership Interest in a Treasury Portfolio or
Pledged Treasury Securities, as the case may be, to the Collateral Agent and the
Collateral Agent shall hold such Proceeds for the benefit of the Company as
9
Collateral for the performance when due by such Holder of its obligations under
the related Purchase Contracts.
ARTICLE IV.
SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF DEBT SECURITIES
SECTION 4.1 SUBSTITUTION FOR DEBT SECURITIES AND THE CREATION OF TREASURY
UNITS.
A Holder of a Corporate Unit may create or recreate a Treasury Unit
and separate the Debt Securities or the appropriate Applicable Ownership
Interest in a Treasury Portfolio, as applicable, from the related Purchase
Contract in respect of such Corporate Unit by substituting Treasury Securities
for all, but not less than all, of the Debt Securities or Applicable Ownership
Interest in the appropriate Treasury Portfolio that form a part of such
Corporate Unit in accordance with this Section 4.1 and 3.13 of the Purchase
Contract Agreement; provided, however, that if a Treasury Portfolio has not
replaced the Debt Securities as a component of Corporate Units as a result of a
successful remarketing or a Tax Event Redemption, such Collateral Substitutions
may be made only on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date; if a Treasury Portfolio has replaced Debt
Securities as a component of Corporate Units as a result of a successful
remarketing of the Debt Securities or a Tax Event Redemption, such Collateral
Substitutions may be made only on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date. Holders may make
Collateral Substitutions and establish Treasury Units (i) only in integral
multiples of __ Corporate Units if only Debt Securities are being substituted by
Treasury Securities, or (ii) only in integral multiples of ______ Corporate
Units if the appropriate Applicable Ownership Interests in the Treasury
Portfolio are being substituted for Treasury Securities. For example, to create
__ Treasury Units (if a Tax Event Redemption has not occurred and Debt
Securities remain components of Corporate Units), or ______ Treasury Units (if a
Tax Event Redemption has occurred or a Remarketing Treasury Portfolio has
replaced Debt Securities as components of Corporate Units as a result of a
successful remarketing of the Debt Securities), the Corporate Unit Holder shall
(a) if a Treasury Portfolio has not replaced any Debt Securities as a
component of Corporate Units as a result of a successful remarketing or a Tax
Event Redemption, on or prior to the fifth Business Day preceding the Purchase
Contract Settlement Date, deposit with the Collateral Agent a Treasury Security
having a principal amount at maturity of $[1,000]; or
(b) if a Treasury Portfolio has replaced the Debt Securities as a
component of Corporate Units as a result of a successful remarketing of the Debt
Securities or a Tax Event Redemption, on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, deposit with the
Collateral Agent Treasury Securities having an aggregate principal amount at
maturity of $_________; and
(c) in each case, transfer and surrender the related __ Corporate
Units, or, in the event a Treasury Portfolio is a component of Corporate Units,
10
______ Corporate Units, to the Purchase Contract Agent accompanied by a notice
to the Purchase Contract Agent, substantially in the form of Exhibit B hereto,
stating that the Holder has transferred the relevant amount of Treasury
Securities to the Collateral Agent and requesting that the Purchase Contract
Agent instruct the Collateral Agent to release the applicable Debt Securities or
the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, underlying such Corporate Units, whereupon the Purchase Contract
Agent shall promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit A hereto.
Upon receipt of the Treasury Securities described in clause (a) or (b)
above and the instructions described in clause (c) above from the Purchase
Contract Agent, the Collateral Agent shall release the Pledged Debt Securities
or the appropriate Pledged Applicable Ownership Interest in a Treasury
Portfolio, as the case may be, and shall promptly Transfer such Pledged Debt
Securities or the appropriate Pledged Applicable Ownership Interest in a
Treasury Portfolio, as the case may be, free and clear of the lien, pledge or
security interest created hereby, to the Purchase Contract Agent.
SECTION 4.2 SUBSTITUTION FOR TREASURY SECURITIES AND THE CREATION OF
CORPORATE UNITS.
A Holder of a Treasury Unit may create or recreate Corporate Units by
depositing with the Collateral Agent Debt Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, having an
aggregate principal amount equal to the aggregate principal amount at maturity
of, and in substitution for all, but not less than all, of the Treasury
Securities comprising part of the Treasury Unit in accordance with this
Section 4.2 and 3.14 of the Purchase Contract Agreement; provided, however, that
if a Treasury Portfolio has not replaced the Debt Securities as a component of
Corporate Units as a result of a successful remarketing or a Tax Event
Redemption, such Collateral Substitutions may be made only on or prior to the
fifth Business Day immediately preceding the Purchase Contract Settlement Date;
and if a Treasury Portfolio has replaced the Debt Securities as a component of
Corporate Units as a result of a successful remarketing of the Debt Securities
or a Tax Event Redemption, such Collateral Substitutions may be made only on or
prior to the second Business Day immediately preceding the Purchase Contract
Settlement Date. Holders of Treasury Units may make such Collateral
Substitutions and establish Corporate Units (i) only in integral multiples of __
Treasury Units if Treasury Securities are being replaced by Debt Securities, or
(ii) only in integral multiples of ______ Treasury Units if any Treasury
Security is being replaced by the Applicable Ownership Interest in the Treasury
Portfolio. To create __ Corporate Units (if a Tax Event Redemption has not
occurred and the Debt Securities remain components of Corporate Units), or
______ Corporate Units (if a Tax Event Redemption has occurred or a Remarketing
Treasury Portfolio has replaced the Debt Securities as a result of a successful
remarketing of the Debt Securities), the Treasury Unit Holder shall
(a) if a Treasury Portfolio has not replaced the Debt Securities as a
component of Corporate Units as a result of a successful remarketing or a Tax
Event Redemption on or prior to the fifth Business Day preceding the Purchase
Contract Settlement Date, deposit with the Collateral Agent $[1,000] in
aggregate principal amount of Debt Securities; or
(b) if a Treasury Portfolio has replaced the Debt Securities as a
component of Corporate Units as a result of a successful remarketing of the Debt
11
Securities or a Tax Event Redemption on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, deposit with the
Collateral Agent the Applicable Ownership Interest in the appropriate Treasury
Portfolio having an aggregate principal amount at maturity of $_________; or
(c) in each case, transfer and surrender the related __ Treasury
Units, or in the event the Treasury Portfolio is a component of Corporate Units,
______ Treasury Units, to the Purchase Contract Agent accompanied by a notice to
the Purchase Contract Agent, substantially in the form of Exhibit B hereto,
stating that the Holder has transferred the relevant amount of Debt Securities
or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, to the Collateral Agent and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release the Pledged Treasury
Securities underlying such Treasury Units, whereupon the Purchase Contract Agent
shall promptly give such instruction to the Collateral Agent, substantially in
the form of Exhibit A hereto.
Upon receipt of the Debt Securities or the appropriate Applicable
Ownership Interest in the applicable Treasury Portfolio, as the case may be,
described in clause (a) or (b) above and the instructions described in
clause (c) above, from the Purchase Contract Agent, the Collateral Agent shall
release the related Pledged Treasury Securities and shall promptly Transfer such
Pledged Treasury Securities, free and clear of the lien, pledge or security
interest created hereby, to the Purchase Contract Agent.
SECTION 4.3 TERMINATION EVENT.
Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that there has occurred a Termination
Event, the Collateral Agent shall release all Collateral from the Pledge and
shall promptly Transfer any Pledged Debt Securities (or, if (i) a Tax Event
Redemption or (ii) a successful remarketing of the Debt Securities, as the case
may be, has occurred, the Pledged Applicable Ownership Interest in a Treasury
Portfolio) and Pledged Treasury Securities to the Purchase Contract Agent for
the benefit of the Holders of the Corporate Units and the Treasury Units,
respectively, free and clear of any lien, pledge or security interest or other
interest created hereby.
If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged Debt
Securities, the Pledged Applicable Ownership Interest in a Treasury Portfolio or
the Pledged Treasury Securities, as the case may be, as provided by this Section
4.3, any Holder may, and the Purchase Contract Agent shall, upon receipt from
the Holders of reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by the Purchase Contract Agent in compliance
with this paragraph, (i) use its reasonable best efforts to obtain an opinion of
a nationally recognized law firm reasonably acceptable to the Collateral Agent
to the effect that, as a result of the Company being the debtor in such a
bankruptcy case, the Collateral Agent will not be prohibited from releasing or
Transferring the Collateral as provided in this Section 4.3, and shall deliver
such opinion to the Collateral Agent within ten days after the occurrence of
such Termination Event, and if (y) any such Holder or the Purchase Contract
Agent shall be unable to obtain such opinion within ten days after the
occurrence of such Termination Event or (z) the Collateral Agent shall continue,
12
after delivery of such opinion, to refuse to effectuate the release and Transfer
of all Pledged Debt Securities, the Pledged Applicable Ownership Interest in a
Treasury Portfolio or the Pledged Treasury Securities, as the case may be, as
provided in this Section 4.3, then any Holder may, and the Purchase Contract
Agent shall, within 15 days after the occurrence of such Termination Event
commence an action or proceeding in the court with jurisdiction of the Company's
case under the Bankruptcy Code seeking an order requiring the Collateral Agent
to effectuate the release and transfer of all Pledged Debt Securities, the
Pledged Applicable Ownership Interest in a Treasury Portfolio or the Pledged
Treasury Securities, as the case may be, as provided by this Section 4.3 or (ii)
commence an action or proceeding in the court with jurisdiction of the Company's
case under the Bankruptcy Code like that described in subsection (i)(z) hereof
within ten days after the occurrence of such Termination Event.
SECTION 4.4 CASH SETTLEMENT.
(a) Upon receipt by the Collateral Agent of (i) a notice from the
Purchase Contract Agent that a Holder of a Corporate Unit or Treasury Unit has
elected, in accordance with the procedures specified in Section 5.4(a)(i) or
(d)(i) of the Purchase Contract Agreement, respectively, to settle its Purchase
Contract with Cash and (ii) payment by such Holder of the amount required to
settle the Purchase Contract prior to 11:00 a.m., New York City time, on the
Business Day immediately preceding the Purchase Contract Settlement Date in
lawful money of the United States by certified or cashiers' check or wire
transfer in immediately available funds payable to or upon the order of the
Company, then the Collateral Agent shall promptly invest any Cash received from
a Holder in connection with a Cash Settlement in Permitted Investments. Upon
receipt of the proceeds upon the maturity of the Permitted Investments on the
Purchase Contract Settlement Date, the Collateral Agent shall pay the portion of
such proceeds and deliver any certified or cashiers' checks received, in an
aggregate amount equal to the Purchase Price, to the Company on the Purchase
Contract Settlement Date, and shall distribute any funds in respect of the
interest earned from the Permitted Investments to the Purchase Contract Agent
for payment to the relevant Holder.
(b) If a Holder of a Corporate Unit (unless a Treasury Portfolio has
replaced the relevant Debt Security) fails to notify the Purchase Contract Agent
of its intention to make a Cash Settlement in accordance with Section 5.4(a)(i)
of the Purchase Contract Agreement, such failure shall constitute a default
under the related Purchase Contract and hereunder, and the Holder shall be
deemed to have consented to the disposition of the Pledged Debt Securities
pursuant to the remarketing as described in Section 5.4(b) of the Purchase
Contract Agreement, which is incorporated herein by reference and Section 4.6
hereof, and the Collateral Agent, for the benefit of the Company, will exercise
its rights as a secured party with respect to applicable Pledged Debt Securities
at the direction of the Company to cause the remarketing of such Pledged Debt
Securities. If a Holder of Corporate Units does notify the Purchase Contract
Agent as provided in Section 5.4(a)(i) of the Purchase Contract Agreement of its
intention to make a Cash Settlement, but fails to make such payment as required
by Section 5.4(a)(ii) of the Purchase Contract Agreement, such failure shall
constitute a default under the related Purchase Contracts and hereunder, and the
Pledged Debt Securities of such a Holder will not be remarketed but instead the
Collateral Agent, for the benefit of the Company, will exercise its rights as a
secured party with respect to such Debt Securities at the direction of the
Company to retain or dispose of the Collateral in accordance with applicable
law. In addition, in the event of a Failed Remarketing as described in
13
Section 5.4(b) of the Purchase Contract Agreement, such Failed Remarketing shall
constitute a default hereunder by such Holder, and the Collateral Agent, for the
benefit of the Company, will also exercise its rights as a secured party with
respect to such Debt Securities at the direction of the Company to retain or
dispose of the Collateral in accordance with applicable law.
(c) If a Holder of Treasury Units or Corporate Units (if a Treasury
Portfolio has replaced the Debt Securities) fails to notify the Purchase
Contract Agent of such Holder's intention to make a Cash Settlement in
accordance with Section 5.4(d)(i) of the Purchase Contract Agreement, or if a
Holder of Treasury Units or Corporate Units (if a Treasury Portfolio has
replaced the Debt Securities) notifies the Purchase Contract Agent as provided
in Section 5.4(d)(i) of the Purchase Contract Agreement of its intention to make
a Cash Settlement, but fails to make such payment as required by Section
5.4(d)(ii) of the Purchase Contract Agreement, such failure shall constitute a
default under the related Purchase Contracts and hereunder by such Holder and
upon the maturity of the related Pledged Treasury Securities or the Pledged
Applicable Ownership Interest in a Treasury Portfolio, if any, held by the
Collateral Agent on the Business Day immediately preceding the Purchase Contract
Settlement Date, the principal amount of such Pledged Treasury Securities or the
portion of the Pledged Applicable Ownership Interest in a Treasury Portfolio
corresponding to such Purchase Contracts received by the Collateral Agent shall,
upon written direction of the Company, be invested promptly in Permitted
Investments. On the Purchase Contract Settlement Date, an aggregate amount equal
to the Purchase Price will be remitted to the Company as payment thereof. In the
event the sum of the proceeds from the Pledged Treasury Securities or the
Pledged Applicable Ownership Interest in a Treasury Portfolio, as the case may
be, and the investment earnings earned from such investments is in excess of the
aggregate Purchase Price of the Purchase Contracts being settled thereby, the
Collateral Agent will distribute such excess to the Purchase Contract Agent for
the benefit of the Holder of the related Treasury Units or Corporate Units when
received.
SECTION 4.5 EARLY SETTLEMENT.
Upon written notice to the Collateral Agent by the Purchase Contract
Agent that a Holder of a Security has elected to effect Early Settlement of its
entire obligation under the Purchase Contract forming a part of such Security in
accordance with the terms of the Purchase Contract and the Purchase Contract
Agreement, and that the Purchase Contract Agent has received from such Holder,
and paid to the Company as confirmed in writing by the Company, the related
Early Settlement Amount pursuant to the terms of the Purchase Contract and the
Purchase Contract Agreement and that all conditions to such Early Settlement
have been satisfied, then the Collateral Agent shall release from the Pledge,
(a) the Pledged Debt Securities or the appropriate Pledged Applicable Ownership
Interest in a Treasury Portfolio in the case of a Holder of Corporate Units or
(b) the Pledged Treasury Securities in the case of a Holder of Treasury Units,
in each case that had been components of such Security, and shall transfer such
Pledged Debt Securities or the appropriate Pledged Applicable Ownership Interest
in a Treasury Portfolio or Pledged Treasury Securities, as the case may be, free
and clear of the Pledge created hereby, to the Purchase Contract Agent for the
benefit of such Holder.
14
SECTION 4.6 APPLICATION OF PROCEEDS; SETTLEMENT.
(a) In the event a Holder of Corporate Units, unless a Treasury
Portfolio has replaced the Debt Securities, has not elected to make an effective
Cash Settlement by notifying the Purchase Contract Agent in the manner provided
for in Section 5.4(a)(i) of the Purchase Contract Agreement or has not made an
Early Settlement of the Purchase Contracts underlying its Corporate Units, such
Holder shall be deemed to have elected to pay for the shares of Common Stock to
be issued under such Purchase Contracts from the Proceeds of the related Pledged
Debt Securities. The Collateral Agent shall by 10:00 a.m., New York City time,
on the fourth Business Day immediately preceding the Purchase Contract
Settlement Date, without any instruction from such Holder of Corporate Units,
present the related Pledged Debt Securities to the Remarketing Agent for
remarketing. Upon receiving such Pledged Debt Securities, the Remarketing Agent,
pursuant to the terms of the Remarketing Agreement, will use its reasonable
efforts to remarket such Pledged Debt Securities on such date at a price of
approximately [100.5]% (but not less than [100]%) of the aggregate Value of such
Pledged Debt Securities, plus accrued and unpaid interest, if any, thereon.
After deducting as the Remarketing Fee an amount not exceeding ___ basis points
(.__%) of the aggregate Value of the Pledged Debt Securities from any amount of
such Proceeds in excess of the sum of (i) the aggregate Value of such Debt
Securities, plus (ii) such accrued and unpaid interest on the remarketed Pledged
Debt Securities, the Remarketing Agent will remit the entire amount of the
Proceeds of a successful remarketing to the Collateral Agent. On the Purchase
Contract Settlement Date, the Collateral Agent shall apply that portion of the
Proceeds from such remarketing equal to the aggregate Value of the Pledged Debt
Securities, to satisfy in full the obligations of such Holders of Corporate
Units to pay the Purchase Price to purchase the Common Stock under the related
Purchase Contracts. The remaining portion of such Proceeds, if any, shall be
distributed by the Collateral Agent to the Purchase Contract Agent for payment
to the Holders. If the Remarketing Agent advises the Collateral Agent in writing
that it cannot remarket the related Pledged Debt Securities of such Holders of
Corporate Units at a price not less than 100% of the aggregate Value of such
Pledged Debt Securities plus any accrued and unpaid interest, or if the
remarketing does not occur because a condition precedent to it has not been
fulfilled, thus resulting in a Failed Remarketing, the Collateral Agent will,
for the benefit of the Company, at the written direction of the Company, retain
or dispose of the Pledged Debt Securities in accordance with applicable law and
satisfy in full, from any such disposition or retention, such Holder's
obligation to pay the Purchase Price for the Common Stock under the related
Purchase Contracts.
(b) In the event a Holder of Treasury Units or, if a Treasury
Portfolio has replaced the Debt Securities, Corporate Units, has not made an
Early Settlement of the Purchase Contracts underlying its Treasury Units or
Corporate Units, as the case may be, such Holder shall be deemed to have elected
to pay for the shares of Common Stock to be issued under such Purchase Contracts
from the Proceeds of the related Pledged Treasury Securities or the related
Pledged Applicable Ownership Interest in a Treasury Portfolio, as the case may
be. On the Business Day immediately prior to the Purchase Contract Settlement
Date, the Collateral Agent shall, at the written direction of the Purchase
Contract Agent, invest the Cash proceeds of the maturing Pledged Treasury
Securities or the Pledged Applicable Ownership Interest in a Treasury Portfolio,
as the case may be, in overnight Permitted Investments. Without receiving any
instruction from any such Holder of Treasury Units or Corporate Units, the
Collateral Agent shall apply the Proceeds of the related Pledged Treasury
Securities or Pledged Applicable Ownership Interest in a Treasury Portfolio to
the settlement of the related Purchase Contracts on the Purchase Contract
Settlement Date. In the event the sum of the Proceeds from the related Pledged
Treasury Securities or related Pledged Applicable Ownership Interest in a
15
Treasury Portfolio and the investment earnings from the investment in overnight
Permitted Investments is in excess of the aggregate Purchase Price of the
Purchase Contracts being settled thereby on the Purchase Contract Settlement
Date, the Collateral Agent shall distribute such excess, when received, to the
Purchase Contract Agent for the benefit of the Holders.
(c) Pursuant to the Remarketing Agreement, on or prior to the fifth
Business Day immediately preceding each Reset Date, but no earlier than the
Payment Date immediately preceding such Reset Date, holders of Separate Debt
Securities may elect to have their Separate Debt Securities remarketed by
delivering the Separate Debt Securities, together with a notice of such
election, substantially in the form of Exhibit C hereto, to the Custodial Agent.
The Custodial Agent will hold the Separate Debt Securities in an account
separate from the Collateral Account. A holder of Separate Debt Securities
electing to have its Separate Debt Securities remarketed will also have the
right to withdraw such election by written notice to the Custodial Agent,
substantially in the form of Exhibit D hereto, on or prior to the fifth Business
Day immediately preceding the applicable Reset Date, upon which notice the
Custodial Agent will return the Separate Debt Securities to such holder. On the
fourth Business Day immediately preceding the applicable Reset Date, the
Custodial Agent will deliver to the Remarketing Agent for remarketing all
Separate Debt Securities delivered to the Custodial Agent pursuant to this
Section 4.6(c) and not withdrawn pursuant to the terms hereof prior to such
date. The portion of the proceeds from such remarketing equal to the aggregate
Value of the Separate Debt Securities, plus accrued and unpaid interest, if any,
thereon, will automatically be remitted by the Remarketing Agent to the
Custodial Agent for the benefit of the holders of the Separate Debt Securities.
In addition, after deducting as the Remarketing Fee an amount not exceeding __
basis points (.__%) of the Value of the remarketed Separate Debt Securities,
from any amount of such proceeds in excess of the sum of (i) the aggregate Value
of the remarketed Separate Debt Securities plus (ii) any accrued and unpaid
interest thereon, the Remarketing Agent will remit to the Custodial Agent the
remaining portion of the proceeds, if any, for the benefit of such holders. If,
despite using its reasonable efforts, the Remarketing Agent advises the
Custodial Agent in writing that it cannot remarket the related Separate Debt
Securities of such holders, together with the remarketed Pledged Debt
Securities, at a price not less than 100% of the aggregate Value of the Separate
Debt Securities and the Pledged Debt Securities plus accrued and unpaid interest
or, if a condition to the remarketing shall not have been fulfilled, thus in
either case resulting in a Failed Remarketing, the Remarketing Agent will
promptly return the Separate Debt Securities to the Custodial Agent for
redelivery to such holders.
ARTICLE V.
VOTING RIGHTS -- DEBT SECURITIES
The Purchase Contract Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the Pledged Debt
Securities or any part thereof for any purpose not inconsistent with the terms
of this Agreement and in accordance with the terms of the Purchase Contract
Agreement; provided, that the Purchase Contract Agent shall not exercise or, as
the case may be, shall not refrain from exercising such right if, in the
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judgment of the Company, such action would impair or otherwise have a material
adverse effect on the value of all or any of the Pledged Debt Securities; and
provided, further, that the Purchase Contract Agent shall give the Company and
the Collateral Agent at least five days' prior written notice of the manner in
which it intends to exercise, or its reasons for refraining from exercising, any
such right. Upon receipt of any notices and other communications in respect of
any Pledged Debt Securities, including notice of any meeting at which holders of
Debt Securities are entitled to vote or solicitation of consents, waivers or
proxies of holders of Debt Securities, the Collateral Agent shall use reasonable
efforts to send promptly to the Purchase Contract Agent such notice or
communication, and as soon as reasonably practicable after receipt of a written
request therefor from the Purchase Contract Agent, execute and deliver to the
Purchase Contract Agent such proxies and other instruments in respect of such
Pledged Debt Securities (in form and substance satisfactory to the Collateral
Agent) as are prepared by the Purchase Contract Agent with respect to the
Pledged Debt Securities.
ARTICLE VI.
RIGHTS AND REMEDIES; SUBSTITUTION OF A TREASURY PORTFOLIO FOR
DEBT SECURITIES
SECTION 6.1 RIGHTS AND REMEDIES OF THE COLLATERAL AGENT.
(a) In addition to the rights and remedies specified in Section 4.4
hereof or otherwise available at law or in equity, after an event of default
hereunder, the Collateral Agent shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform Commercial Code
(or any successor thereto) as in effect in the State of New York from time to
time (the "Code") (whether or not the Code is in effect in the jurisdiction
where the rights and remedies are asserted) and the TRADES Regulations and such
additional rights and remedies to which a secured party is entitled under the
laws in effect in any jurisdiction where any rights and remedies hereunder may
be asserted. Wherever reference is made in this Agreement to any section of the
Code, such reference shall be deemed to include a reference to any provision of
the Code which is a successor to, or amendment of, such section. Without
limiting the generality of the foregoing, such remedies may include, to the
extent permitted by applicable law, (i) retention of the Pledged Debt Securities
or other Collateral in full satisfaction of the Holders' obligations under the
Purchase Contracts or (ii) sale of the Pledged Debt Securities or other
Collateral in one or more public or private sales and application of the
proceeds in full satisfaction of the Holders' obligations under the Purchase
Contracts.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the Pledged Applicable Ownership
Interest of a Treasury Portfolio (as specified in clauses (1)(i) or (2)(i) of
the definition of the term "Applicable Ownership Interest") or on account of
principal payments of any Pledged Treasury Securities as provided in Article III
hereof in satisfaction of the obligations of the Holder of the Securities of
which such Pledged Treasury Securities, or the Pledged Applicable Ownership
Interest of a Treasury Portfolio (as specified in clauses (1)(i) or (2)(i) of
the definition of the term "Applicable Ownership Interest"), as applicable, is a
part under the related Purchase Contracts, the inability to make such payments
shall constitute a default hereunder and the Collateral Agent shall have and may
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exercise, with reference to such Pledged Treasury Securities, or such
appropriate Pledged Applicable Ownership Interest of a Treasury Portfolio (as
specified in clauses (1)(i) or (2)(i) of the definition of the term Applicable
Ownership Interest), as applicable, and such obligations of such Holder, any and
all of the rights and remedies available to a secured party under the Code and
the TRADES Regulations after default by a debtor, and as otherwise granted
herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) principal of, or interest
on, the Pledged Debt Securities, (ii) the principal amount of the Pledged
Treasury Securities, or (iii) the appropriate Pledged Applicable Ownership
Interest in a Treasury Portfolio, subject, in each case, to the provisions of
Article III, and as otherwise provided herein.
(d) The Purchase Contract Agent individually and as attorney-in-fact
for each Holder of Securities, in the event such Holder becomes the Holder of
Corporate Units or Treasury Units, agrees that, from time to time, upon the
written request of the Collateral Agent, the Purchase Contract Agent or such
Holder, it shall execute and deliver such further documents and do such other
acts and things as the Collateral Agent may reasonably request in order to
maintain the Pledge, and the perfection and priority thereof, and to confirm the
rights of the Collateral Agent hereunder. The Purchase Contract Agent shall have
no liability to any Holder for executing any documents or taking any such acts
requested by the Collateral Agent hereunder, except for liability for its own
negligent act, its own negligent failure to act or its own willful misconduct.
SECTION 6.2 SUBSTITUTION OF A TREASURY PORTFOLIO FOR DEBT SECURITIES.
(a) Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Collateral Agent will, upon the written
instruction of the Company and the Purchase Contract Agent, deliver the
Applicable Principal Amount of Pledged Debt Securities to the Indenture Trustee
for payment of the Redemption Price. The Collateral Agent shall, or in the event
the Pledged Debt Securities are registered in the name of the Purchase Contract
Agent, the Purchase Contract Agent shall, direct the Indenture Trustee to pay
the Redemption Price therefor payable on the Tax Event Redemption Date on or
prior to 12:30 p.m., New York City time, by check or wire transfer in
immediately available funds at such place and at such account as may be
designated by the Collateral Agent. In the event the Collateral Agent receives
such Redemption Price, subject to the provisions of Section 4.3 hereof, the
Collateral Agent will, at the written direction of the Company, apply an amount
equal to the Redemption Amount of such Redemption Price to purchase from the
Quotation Agent, the Tax Event Treasury Portfolio and promptly remit the
remaining portion of such Redemption Price to the Purchase Contract Agent for
payment to the Holders of Corporate Units. The Collateral Agent shall Transfer
the Tax Event Treasury Portfolio to the Collateral Account to secure the
obligation of all Holders of Corporate Units to purchase Common Stock of the
Company under the Purchase Contracts constituting a part of such Corporate
Units, in substitution for the Pledged Debt Securities. Thereafter the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Tax Event Treasury Portfolio as it had in respect of the Pledged
Debt Securities, as provided in Articles II, III, IV, V and VI hereof, and any
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reference herein to the Pledged Debt Securities shall be deemed to be a
reference to such Tax Event Treasury Portfolio.
(b) Upon the successful remarketing of the Debt Securities on the
third Business Day immediately preceding the Initial Reset Date, the proceeds of
such remarketing (after deducting any Remarketing Fee) shall be delivered to the
Collateral Agent in exchange for the Pledged Debt Securities. Pursuant to the
terms of this Agreement, the Collateral Agent will apply an amount equal to the
Remarketing Treasury Portfolio Purchase Price to purchase on behalf of the
Holders of Corporate Units the Remarketing Treasury Portfolio and promptly remit
the remaining portion of such proceeds to the Purchase Contract Agent for
payment to the Holders of such Corporate Units. The Remarketing Treasury
Portfolio will be substituted for the outstanding Pledged Debt Securities, and
will be held by the Collateral Agent in accordance with the terms of this
Agreement to secure the obligation of each Holder of a Corporate Unit to
purchase the Common Stock of the Company on the Purchase Contract Settlement
Date under the Purchase Contract constituting a part of such Corporate Unit.
Following the successful remarketing of the Debt Securities on the third
Business Day immediately preceding the Initial Reset Date, the Holders of
Corporate Units and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Remarketing Treasury Portfolio as the
Holder of Corporate Units and the Collateral Agent had in respect of the Pledged
Debt Securities subject to the Pledge thereof as provided in Articles II, III,
IV, V and VI hereof, and any reference herein to the Pledged Debt Securities
shall be deemed to be reference to the Remarketing Treasury Portfolio.
SECTION 6.3 INITIAL REMARKETING.
The Collateral Agent shall, by 10:00 a.m., New York City time, on the
fourth Business Day immediately preceding the Initial Reset Date, without any
instruction from any Holder of Corporate Units, present the related Pledged Debt
Securities to the Remarketing Agent for remarketing. Upon receiving such Pledged
Debt Securities, the Remarketing Agent, pursuant to the terms of the Remarketing
Agreement and the Supplemental Remarketing Agreement, will use its reasonable
efforts to remarket such Pledged Debt Securities on such date at a price of
approximately [100.5]% (but not less than [100]%) of the Remarketing Treasury
Portfolio Purchase Price, plus accrued and unpaid interest, if any, on the
Pledged Debt Securities. After deducting as the Remarketing Fee an amount not
exceeding __ basis points (.__%) of the Remarketing Treasury Portfolio Purchase
Price from any amount of such Proceeds in excess of the sum of (i) Remarketing
Treasury Portfolio Purchase Price, plus (ii) the amount of accrued and unpaid
interest, if any, on the Pledged Debt Securities, the Remarketing Agent will
remit the entire amount of the Proceeds of such remarketing to the Collateral
Agent on or prior to 12:00 p.m., New York City time on the Initial Reset Date.
In the event the Collateral Agent receives such Proceeds, the Collateral Agent
will, at the written direction of the Company, apply an amount equal to the
Remarketing Treasury Portfolio Purchase Price to purchase from the Quotation
Agent the Remarketing Treasury Portfolio and remit the remaining portion of such
Proceeds, if any, to the Purchase Contract Agent for payment to the Holders of
Corporate Units. The Collateral Agent shall Transfer the Remarketing Treasury
Portfolio to the Collateral Account to secure the obligation of all Holders of
Corporate Units to purchase Common Stock of the Company under the Purchase
Contracts constituting a part of such Corporate Units, in substitution for the
Pledged Debt Securities. Thereafter the Collateral Agent shall have such
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security interests, rights and obligations with respect to the Remarketing
Treasury Portfolio as it had in respect of the Pledged Debt Securities as
provided in Articles II, III, IV, V and VI hereof, and any reference herein to
the Pledged Debt Securities shall be deemed to be a reference to such
Remarketing Treasury Portfolio, and any reference herein to interest on the Debt
Securities shall be deemed to be a reference to distributions on such
Remarketing Treasury Portfolio.
SECTION 6.4 SUBSTITUTIONS.
Whenever a Holder has the right to substitute Treasury Securities,
Debt Securities or the appropriate Applicable Ownership Interest in a Treasury
Portfolio, as the case may be, for Collateral held by the Collateral Agent, such
substitution shall not constitute a novation of the security interest created
hereby.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 7.1 REPRESENTATIONS AND WARRANTIES.
The Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any representation or warranty made by or on
behalf of a Holder), hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on each day a Holder
Transfers Collateral that:
(a) such Holder has the power to grant a security interest in and
lien on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and,
in the case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent, free and clear of any
security interest, lien, encumbrance, call, liability to pay money or other
restriction other than the security interest and lien granted under Article II
hereof;
(c) upon the Transfer of the Collateral to the Collateral Account or
physical delivery of the Debt Securities to the Collateral Agent, the Collateral
Agent, for the benefit of the Company, will have a valid and perfected first
priority security interest therein (assuming that any central clearing operation
or any Intermediary or other entity not within the control of the Holder
involved in the Transfer of the Collateral, including the Collateral Agent,
gives the notices and takes the action required of it hereunder and under
applicable law for perfection of that interest and assuming the establishment
and exercise of control pursuant to Section 2.2 hereof); and
(d) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any security interest,
lien or other encumbrance on the Collateral other than the security interest and
lien granted under Article II hereof or violate any provision of any existing
law or regulation applicable to it or of any mortgage, charge, pledge,
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indenture, contract or undertaking to which it is a party or which is binding on
it or any of its assets.
SECTION 7.2 COVENANTS.
The Holders from time to time, acting through the Purchase Contract
Agent as their attorney-in-fact (it being understood that the Purchase Contract
Agent shall not be liable for any covenant made by or on behalf of a Holder),
hereby covenant to the Collateral Agent that for so long as the Collateral
remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will create
or purport to create or allow to subsist any mortgage, charge, lien, pledge or
any other security interest whatsoever over the Collateral or any part of it
other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the pledge hereunder,
transferred in connection with the Transfer of the Securities.
ARTICLE VIII.
THE COLLATERAL AGENT
SECTION 8.1 APPOINTMENT, POWERS AND IMMUNITIES.
The Collateral Agent shall act as agent for the Company hereunder with
such powers as are specifically vested in the Collateral Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Each of the Collateral Agent, the Custodial Agent and the Securities
Intermediary: (a) shall have no duties or responsibilities except those
expressly set forth in or incorporated into this Agreement and no implied
covenants or obligations shall be inferred from this Agreement against any of
them, nor shall any of them be bound by the provisions of any agreement by any
party hereto beyond the specific or incorporated terms hereof; (b) shall not be
responsible for any recitals contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by it under, this
Agreement, the Securities or the Purchase Contract Agreement (except as
specifically incorporated by reference herein), or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement
(other than as against the Collateral Agent, the Custodial Agent or the
Securities Intermediary), the Securities or the Purchase Contract Agreement or
any other document referred to or provided for herein (except as specifically
incorporated by reference herein) or therein or for any failure by the Company
or any other Person (except the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be) to perform any of its obligations
hereunder or thereunder or for the perfection, priority or, except as expressly
required hereby, maintenance of any security interest created hereunder; (c)
shall not be required to initiate or conduct any litigation or collection
proceedings hereunder (except in the case of the Collateral Agent, pursuant to
directions furnished under Section 8.2 hereof, subject to Section 8.6 hereof);
21
(d) shall not be responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to or provided for
herein or in connection herewith or therewith, except for its own negligence or
willful misconduct; and (e) shall not be required to advise any party as to
selling or retaining, or taking or refraining from taking any action with
respect to, the Securities or other property deposited hereunder in accordance
with the terms hereof. Subject to the foregoing, during the term of this
Agreement, the Collateral Agent shall take all reasonable action in connection
with the safekeeping and preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent, the
Custodial Agent or the Securities Intermediary to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or
the Securities Intermediary be liable for any amount in excess of the Value of
the Collateral. Notwithstanding the foregoing, the Collateral Agent, the
Custodial Agent and the Securities Intermediary, each in its individual
capacity, hereby waive any right of setoff, bankers lien, liens or perfection
rights as Securities Intermediary or any counterclaim with respect to any of the
Collateral.
SECTION 8.2 INSTRUCTIONS OF THE COMPANY.
The Company shall have the right, by one or more instruments in
writing executed and delivered to the Collateral Agent, the Custodial Agent or
the Securities Intermediary, as the case may be, to direct the time, method and
place of conducting any proceeding for the realization of any right or remedy
available to the Collateral Agent, or of exercising any power conferred on the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, or to direct the taking or refraining from taking of any action
authorized by this Agreement; provided, however, that (i) such direction shall
not conflict with the provisions of any law or of this Agreement and (ii) the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall be
adequately indemnified as provided herein. Nothing in this Section 8.2 shall
impair the right of the Collateral Agent in its discretion to take any action or
omit to take any action which it deems proper and which is not inconsistent with
such direction.
SECTION 8.3 RELIANCE BY COLLATERAL AGENT.
Each of the Securities Intermediary, the Custodial Agent and the
Collateral Agent shall be entitled conclusively to rely upon any certification,
order, judgment, opinion, notice or other communication (including, without
limitation, any thereof by telephone, telecopy, telex or facsimile) believed by
it to be genuine and correct and to have been signed or sent by or on behalf of
the proper Person or Persons (without being required to determine the
correctness of any fact stated therein), and upon advice and statements of legal
counsel and other experts selected by the Collateral Agent, the Custodial Agent
or the Securities Intermediary, as the case may be. As to any matters not
expressly provided for by this Agreement, the Collateral Agent, the Custodial
Agent and the Securities Intermediary shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
given by the Company in accordance with this Agreement.
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SECTION 8.4 RIGHTS IN OTHER CAPACITIES.
The Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may (without having to account therefor to the
Company) accept deposits from, lend money to, make their investments in and
generally engage in any kind of banking, trust or other business with the
Purchase Contract Agent and any Holder of Securities (and any of their
respective subsidiaries or affiliates) as if it were not acting as the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, and the Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent and any Holder of Securities without having to
account for the same to the Company; provided that each of the Securities
Intermediary, the Custodial Agent and the Collateral Agent covenants and agrees
with the Company that it shall not accept, receive or permit there to be created
in favor of itself and shall take no affirmative action to permit there to be
created in favor of any other Person, any security interest, lien or other
encumbrance of any kind in or upon the Collateral.
SECTION 8.5 NON-RELIANCE ON COLLATERAL AGENT.
None of the Securities Intermediary, the Custodial Agent or the
Collateral Agent shall be required to keep itself informed as to the performance
or observance by the Purchase Contract Agent or any Holder of Securities of this
Agreement, the Purchase Contract Agreement, the Securities or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Purchase Contract Agent or any Holder of Securities. The Collateral
Agent, the Custodial Agent and the Securities Intermediary shall not have any
duty or responsibility to provide the Company with any credit or other
information concerning the affairs, financial condition or business of the
Purchase Contract Agent or any Holder of Securities (or any of their respective
affiliates) that may come into the possession of the Collateral Agent, the
Custodial Agent or the Securities Intermediary or any of their respective
affiliates.
SECTION 8.6 COMPENSATION AND INDEMNITY.
The Company agrees: (i) to pay each of the Collateral Agent and the
Custodial Agent from time to time such compensation as shall be agreed in
writing between the Company and the Collateral Agent or the Custodial Agent, as
the case may be, for all services rendered by each of them hereunder and (ii) to
indemnify the Collateral Agent, the Custodial Agent and the Securities
Intermediary for, and to hold each of them harmless from and against, any loss,
liability or reasonable out-of-pocket expense incurred without negligence,
willful misconduct or bad faith on its part, arising out of or in connection
with the acceptance or administration of its powers and duties under this
Agreement, including the reasonable out-of-pocket costs and expenses (including
reasonable fees and expenses of counsel) of defending itself against any claim
or liability in connection with the exercise or performance of such powers and
duties. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall each promptly notify the Company of any third party claim
which may give rise to indemnity hereunder and give the Company the opportunity
to participate in the defense of such claim with counsel reasonably satisfactory
to the indemnified party, and no such claim shall be settled without the written
consent of the Company, which consent shall not be unreasonably withheld.
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SECTION 8.7 FAILURE TO ACT.
In the event of any ambiguity in the provisions of this Agreement or
any dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, the
Collateral Agent and the Custodial Agent shall be entitled, after prompt notice
to the Company and the Purchase Contract Agent, at its sole option, to refuse to
comply with any and all claims, demands or instructions with respect to such
property or funds so long as such dispute or conflict shall continue, and
neither the Collateral Agent nor the Custodial Agent shall be or become liable
in any way to any of the parties hereto for its failure or refusal to comply
with such conflicting claims, demands or instructions. The Collateral Agent and
the Custodial Agent shall be entitled to refuse to act until either (i) such
conflicting or adverse claims or demands shall have been finally determined by a
court of competent jurisdiction or settled by agreement between the conflicting
parties as evidenced in a writing, satisfactory to the Collateral Agent or the
Custodial Agent, as the case may be, or (ii) the Collateral Agent or the
Custodial Agent, as the case may be, shall have received security or an
indemnity satisfactory to the Collateral Agent or the Custodial Agent, as the
case may be, sufficient to save the Collateral Agent or the Custodial Agent, as
the case may be, harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which the Collateral Agent or the Custodial
Agent, as the case may be, may without negligence, willful misconduct, or bad
faith on its part incur by reason of its acting. The Collateral Agent or the
Custodial Agent may in addition elect to commence an interpleader action or seek
other judicial relief or orders as the Collateral Agent or the Custodial Agent,
as the case may be, may deem necessary. Notwithstanding anything contained
herein to the contrary, neither the Collateral Agent nor the Custodial Agent
shall be required to take any action that is in its opinion contrary to law or
to the terms of this Agreement, or which would in its opinion subject it or any
of its officers, employees or directors to liability.
SECTION 8.8 RESIGNATION OF COLLATERAL AGENT.
Subject to the appointment and acceptance of a successor Collateral
Agent or Custodial Agent as provided below, (a) the Collateral Agent and the
Custodial Agent may resign at any time by giving notice thereof to the Company
and the Purchase Contract Agent as attorney-in-fact for the Holders of
Securities, (b) the Collateral Agent and the Custodial Agent may be removed at
any time by the Company and (c) if the Collateral Agent or the Custodial Agent
fails to perform any of its material obligations hereunder in any material
respect for a period of not less than 20 days after receiving written notice of
such failure by the Purchase Contract Agent and such failure shall be
continuing, the Collateral Agent or the Custodial Agent may be removed by the
Purchase Contract Agent. The Purchase Contract Agent shall promptly notify the
Company of any removal of the Collateral Agent pursuant to clause (c) of the
immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent or
Custodial Agent, as the case may be. If no successor Collateral Agent or
Custodial Agent, as the case may be, shall have been so appointed and shall have
accepted such appointment within 30 days after the retiring Collateral Agent's
or Custodial Agent's giving of notice of resignation or such removal, then the
retiring Collateral Agent or Custodial Agent, as the case may be, may petition
any court of competent jurisdiction for the appointment of a successor
Collateral Agent or Custodial Agent, as the case may be. Each of the Collateral
Agent and the Custodial Agent shall be a bank which has an office in New York,
24
New York with a combined capital and surplus of at least $75,000,000. Upon the
acceptance of any appointment as Collateral Agent or Custodial Agent, as the
case may be, hereunder by a successor Collateral Agent or Custodial Agent, as
the case may be, such successor shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Collateral
Agent or Custodial Agent, as the case may be, and the retiring Collateral Agent
or Custodial Agent, as the case may be, shall take all appropriate action to
transfer any money and property held by it hereunder (including the Collateral)
to such successor. The retiring Collateral Agent or Custodial Agent shall, upon
such succession, be discharged from its duties and obligations as Collateral
Agent or Custodial Agent hereunder. After any retiring Collateral Agent's or
Custodial Agent's resignation hereunder as Collateral Agent or Custodial Agent,
the provisions of this Article VIII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Collateral Agent or Custodial Agent. Any resignation or removal of the
Collateral Agent hereunder shall be deemed for all purposes of this Agreement as
the simultaneous resignation or removal of the Custodial Agent and the
Securities Intermediary.
SECTION 8.9 RIGHT TO APPOINT AGENT OR ADVISOR.
The Collateral Agent shall have the right to appoint agents or
advisors in connection with any of its duties hereunder, and the Collateral
Agent shall not be liable for any action taken or omitted by, or in reliance
upon the advice of, such agents or advisors selected in good faith. The
appointment of agents pursuant to this Section 8.9 shall be subject to prior
consent of the Company, which consent shall not be unreasonably withheld.
SECTION 8.10 SURVIVAL.
The provisions of this Article VIII shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent or the
Custodial Agent.
SECTION 8.11 EXCULPATION.
Anything in this Agreement to the contrary notwithstanding, in no
event shall any of the Collateral Agent, the Custodial Agent or the Securities
Intermediary or their officers, employees or agents be liable under this
Agreement to any third party for indirect, special, punitive, or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Collateral Agent, the
Custodial Agent or the Securities Intermediary, or any of them, incurred without
any act or deed that is found to be attributable to gross negligence or willful
misconduct on the part of the Collateral Agent, the Custodial Agent or the
Securities Intermediary.
ARTICLE IX.
AMENDMENT
SECTION 9.1 AMENDMENT WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders or the holders of any Separate Debt
Securities, the Company, the Collateral Agent, the Custodial Agent, the
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Securities Intermediary and the Purchase Contract Agent, at any time and from
time to time, may amend this Agreement, in form satisfactory to the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, for any of the following purposes:
(a) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company; or
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company so
long as such covenants or such surrender do not adversely affect the validity,
perfection or priority of the security interests granted or created hereunder;
or
(c) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Custodial Agent, Securities
Intermediary or Purchase Contract Agent; or
(d) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other such provisions herein, or to
make any other provisions with respect to such matters or questions arising
under this Agreement, provided such action shall not adversely affect the
interests of the Holders.
SECTION 9.2 AMENDMENT WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority of the
Purchase Contracts at the time outstanding, by Act of said Holders delivered to
the Company, the Purchase Contract Agent or the Collateral Agent, as the case
may be, the Company, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may amend this Agreement for the
purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Securities; provided, however, that no
such supplemental agreement shall, without the consent of the Holder of each
Outstanding Security adversely affected thereby,
(a) change the amount or type of Collateral underlying a Security
(subject to the rights of Holders to make Collateral Substitutions as
contemplated by Sections 4.1 and 4.2), impair the right of the Holder of any
Security to receive distributions on the underlying Collateral or otherwise
adversely affect the Holder's rights in or to such Collateral; or
(b) otherwise effect any action that would require the consent of the
Holder of each Outstanding Security affected thereby pursuant to the Purchase
Contract Agreement if such action were effected by an agreement supplemental
thereto; or
(c) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such Act shall approve the substance thereof.
26
SECTION 9.3 EXECUTION OF AMENDMENTS.
In executing any amendment permitted by this Section, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent shall be entitled to receive and (subject to Section 6.1 hereof,
with respect to the Collateral Agent, and Section 7.1 of the Purchase Contract
Agreement, with respect to the Purchase Contract Agent) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent, if any, to the execution and delivery of such amendment have been
satisfied.
SECTION 9.4 EFFECT OF AMENDMENTS.
Upon the execution of any amendment under this Article IX, this
Agreement shall be modified in accordance therewith, and such amendment shall
form a part of this Agreement for all purposes; and every Holder of Securities
theretofore or thereafter authenticated, executed on behalf of the Holders and
delivered under the Purchase Contract Agreement shall be bound thereby.
SECTION 9.5 REFERENCE TO AMENDMENTS.
Security Certificates authenticated, executed on behalf of the Holders
and delivered after the execution of any amendment pursuant to this Article IX
may, and shall if required by the Collateral Agent or the Purchase Contract
Agent, bear a notation in form approved by the Purchase Contract Agent and the
Collateral Agent as to any matter provided for in such amendment. If the Company
shall so determine, new Security Certificates so modified as to conform, in the
opinion of the Collateral Agent, the Purchase Contract Agent and the Company, to
any such amendment may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Purchase
Contract Agent in accordance with the Purchase Contract Agreement in exchange
for Outstanding Security Certificates.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1 NO WAIVER.
No failure on the part of the Collateral Agent or any of its agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Collateral Agent or any of its
agents of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any remedies provided by
law.
SECTION 10.2 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. Without limiting the foregoing, the above
27
choice of law is expressly agreed to by the Company, the Securities
Intermediary, the Custodial Agent, the Collateral Agent and the Holders from
time to time acting through the Purchase Contract Agent, as their
attorney-in-fact, in connection with the establishment and maintenance of the
Collateral Account. The Company, the Collateral Agent and the Holders from time
to time of the Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. The Company, the Collateral Agent and the Holders from time to time of
the Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
SECTION 10.3 NOTICES.
All notices, requests, consents and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing (including,
without limitation, by telecopy) delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof (or
in the case of Holders, may be made and deemed given as provided in Sections 1.5
and 1.6 of the Purchase Contract Agreement) or, as to any party, at such other
address as shall be designated by such party in a notice to the other parties.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopier or personally
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid (except as aforesaid).
SECTION 10.4 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
and the Holders from time to time of the Securities, by their acceptance of the
same, shall be deemed to have agreed to be bound by the provisions hereof and to
have ratified the agreements of, and the grant of the Pledge hereunder by, the
Purchase Contract Agent.
SECTION 10.5 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
SECTION 10.6 SEVERABILITY.
If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions of the parties
28
hereto as nearly as may be possible and (ii) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7 EXPENSES, ETC.
The Company agrees to reimburse the Collateral Agent and the Custodial
Agent for: (a) all reasonable out-of-pocket costs and expenses of the Collateral
Agent and the Custodial Agent (including, without limitation, the reasonable
fees and expenses of the necessary services of a Securities Intermediary and of
counsel to the Collateral Agent and the Custodial Agent), in connection with
(i) the negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other document referred to
herein and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
SECTION 10.8 SECURITY INTEREST ABSOLUTE.
All rights of the Collateral Agent and security interests hereunder,
and all obligations of the Holders from time to time hereunder, shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the obligations
of Holders of Securities under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or any
other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.
29
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed as of the day and year first above written.
TXU CORP.
By:
Name:
Title:
Address for Notices:
TXU Corp.
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Attention:
Telecopy:
THE BANK OF NEW YORK as
Purchase Contract Agent and
as attorney-in-fact of the
Holders from time to time
of the Securities
By:
Name:
Title:
Address for Notices:
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust
Administration
Telecopy: (212) 815-5915
30
as Collateral Agent, Custodial
Agent and as Securities Intermediary
By:
Name:
Title:
Address for Notices:
31
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
___________________, as Collateral Agent
Attention: _____________________
Re: Securities of TXU Corp. (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of ____________ (the "Pledge Agreement"), among the
Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the Holders of [Corporate Units] [Treasury Units] from time to time, that
the Holder of securities listed below (the "Holder") has elected to substitute
$____ [principal amount at maturity of Treasury Securities] [principal amount of
Debt Securities] [the Applicable Ownership Interest in the [Remarketing][Tax
Event] Treasury Portfolio] in exchange for an equal Value of [Pledged Debt
Securities] [the Pledged Applicable Ownership Interest in the [Remarketing] [Tax
Event] Treasury Portfolio] [Pledged Treasury Securities] held by you in
accordance with the Pledge Agreement and has delivered to us a notice stating
that the Holder has Transferred [Debt Securities] [the Applicable Ownership
Interest in the [Remarketing] [Tax Event] Treasury Portfolio] [Treasury
Securities] to you, as Collateral Agent. We hereby instruct you, upon receipt of
such [Treasury Securities] [Debt Securities] [Applicable Ownership Interest in
the [Remarketing] [Tax Event] Treasury Portfolio] so Transferred, to release the
[Pledged Debt Securities] [Pledged Applicable Ownership Interest in the
[Remarketing] [Tax Event] Treasury Portfolio] [Pledged Treasury Securities]
related to such [Corporate Units] [Treasury Units] to us in accordance with the
Holder's instructions. Capitalized terms used herein but not defined shall have
the meaning set forth or incorporated by reference in the Pledge Agreement.
Please print name and address of registered Holder electing to substitute
[Treasury Securities] [Debt Securities] [Applicable Ownership Interest in a
Treasury Portfolio] for [Pledged Debt Securities or Pledged Applicable Ownership
Interest in a Treasury Portfolio] [Pledged Treasury Securities]:
------------------------------------ --------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
------------------------------------
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Administration
Telecopy: (212) 815-5915
Re: Securities of TXU Corp. (the "Company")
The undersigned Holder hereby notifies you that it has delivered to
________, as Collateral Agent, $____ [principal amount at maturity of Treasury
Securities] [principal amount of Debt Securities] [of the appropriate Applicable
Ownership Interest in the [Remarketing] [Tax Event] Treasury Portfolio] in
exchange for an equal Value of [Pledged Debt Securities or the Pledged
Applicable Ownership Interest in the [Remarketing] [Tax Event] Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities] held by the
Collateral Agent, in accordance with Section [4.1] [4.2] of the Pledge
Agreement, dated as of_______________ (the "Pledge Agreement"), among you, the
Company and the Collateral Agent. The undersigned Holder hereby instructs you to
instruct the Collateral Agent to release to you on behalf of the undersigned
Holder the [Pledged Debt Securities or the Pledged Applicable Ownership Interest
in the [Remarketing] [Tax Event] Treasury Portfolio] [Pledged Treasury
Securities] related to such [Corporate Units] [Treasury Units]. Capitalized
terms used herein but not defined shall have the meaning set forth or
incorporated by reference in the Pledge Agreement.
Please print name and address of Registered Holder:
------------------------------------ --------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
------------------------------------
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
Re: Securities of TXU Corp. (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of ____________ (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from time
to time, that the undersigned elects to deliver $________ principal amount of
Debt Securities for delivery to the Remarketing Agent on the Business Day
immediately preceding the [Initial Remarketing Date] [Secondary Remarketing
Date] for remarketing pursuant to Section 4.6(c) of the Pledge Agreement. The
undersigned will, upon request of the Remarketing Agent, execute and deliver any
additional documents deemed by the Remarketing Agent or by the Company to be
necessary or desirable to complete the sale, assignment and transfer of the Debt
Securities tendered hereby.
The undersigned hereby instructs you, upon receipt of the Proceeds of
such remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions". The undersigned hereby instructs you, in the event of
Failed Remarketing, upon receipt of the Debt Securities tendered herewith from
the Remarketing Agent, to deliver such Debt Securities to the person(s) and the
address(es) indicated herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the Debt Securities tendered hereby and that the undersigned is the
record owner of any Debt Securities tendered herewith in physical form or a
participant in The Depository Trust Company ("DTC") and the beneficial owner of
any Debt Securities tendered herewith by book-entry transfer to your account at
DTC and (ii) agrees to be bound by the terms and conditions of Section 4.6(c) of
the Pledge Agreement. Capitalized terms used herein but not defined shall have
the meaning set forth or incorporated by reference in the Pledge Agreement.
------------------------------------ --------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
------------------------------------
A. PAYMENT INSTRUCTIONS B. DELIVERY INSTRUCTIONS
Proceeds of the remarketing should be In the event of a Failed Remarketing,
paid by check in the name of the Debt Securities that are in physical
person(s) set forth below and mailed to form should be delivered to the
the address set forth below. person(s) set forth below and mailed
to the address set forth below.
Name(s) Name(s)
------------------------------------ --------------------------------------
(Please Print) (Please Print)
Address Address
------------------------------------ --------------------------------------
(Please Print)
------------------------------------
(Please Print) --------------------------------------
(Zip Code)
------------------------------------
(Zip Code) --------------------------------------
(Tax Identification or
------------------------------------ Social Security Number)
(Tax Identification or Social
Security Number)
In the event of a Failed Remarketing,
Debt Securities that are in book-entry
form should be credited to the
account at The Depositary Trust
Company set forth below.
----------------------
DTC Account Number
Name of Account
Party:
------------------------
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
______________, as Custodial Agent
Attention: _____________________
Re: Securities of TXU Corp. (the "Company")
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of ___________ (the "Pledge Agreement"), among
the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from time
to time, that the undersigned elects to withdraw the $_____ principal amount of
Debt Securities delivered to the Custodial Agent on ____________ for remarketing
pursuant to Section 4.6(c) of the Pledge Agreement. The undersigned hereby
instructs you to return such Debt Securities to the undersigned in accordance
with the undersigned's instructions. With this notice, the Undersigned hereby
agrees to be bound by the terms and conditions of Section 4.6(c) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth or incorporated in the Pledge Agreement.
----------------------------------- --------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
------------------------------------
EXHIBIT 4(k)
FORM OF REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated as of ____________ (the "Remarketing
Agreement") by and among TXU Corp., a Texas corporation (the "Company"), The
Bank of New York, not individually but solely as purchase contract agent,
trustee and attorney-in-fact of the holders of Purchase Contracts (the "Purchase
Contract Agent"), and ______________________________________, ("XYZ"), as
remarketing agent (the "Remarketing Agent").
WITNESSETH:
WHEREAS, the Company will issue $________________ aggregate stated amount
[(or $___________ aggregate stated amount if the overallotment option granted to
the underwriters ("Underwriters")] pursuant to the Underwriting Agreement, dated
____________ (the "Underwriting Agreement"), between the Company and the
Underwriters, is exercised in full) of its Equity Units (initially consisting of
Corporate Units (as defined below)) under the Purchase Contract Agreement, dated
as of ____________ (the "Purchase Contract Agreement"), by and between the
Purchase Contract Agent and the Company; and
WHEREAS, the Corporate Units will initially consist of _________ units [(or
__________ units if the overallotment option granted to the Underwriters is
exercised in full)] referred to as "Corporate Units"; and
WHEREAS, the Company will issue concurrently as components of the Corporate
Units $___________ [(or $___________ if the Underwriters' overallotment option
is exercised in full)] aggregate principal amount of its Series _ Senior Notes
due ____________ ("Senior Notes"), issued pursuant to an Indenture (For
Unsecured Debt Securities Series _), dated as of ____________ (the "Indenture"),
between The Bank of New York, as trustee, and the Company; and
WHEREAS, the Senior Notes that are components of Corporate Units will be
pledged pursuant to the Pledge Agreement, dated as of ____________ (the "Pledge
Agreement") as required pursuant to the Purchase Contract Agreement, by and
among the Company, ___________________, as Collateral Agent, Securities
Intermediary and Custodial Agent (the "Collateral Agent") and the Purchase
Contract Agent, to secure a Corporate Unit holder's obligations to purchase
common stock of the Company under the related Purchase Contract on
________________ (the "Purchase Contract Settlement Date"); and
WHEREAS, unless a Tax Event Redemption has occurred, the Senior Notes of
Corporate Unit holders who have not settled their Purchase Contracts early, will
be remarketed (the "Initial Remarketing") on the third Business Day immediately
preceding the Initial Reset Date (as defined below) (the "Initial Remarketing
Date"). The "Initial Reset Date" shall mean________________________________; and
WHEREAS, unless a Tax Event Redemption has occurred, in the event that the
Initial Remarketing results in a Failed Remarketing, the Senior Notes of
Corporate Unit holders who have not given notice on or prior to the fifth
Business Day prior to the Purchase Contract Settlement Date that they intend to
settle the Purchase Contracts related to their Corporate Units with separate
cash and who have not settled their Purchase Contracts early will be remarketed
(the "Secondary Remarketing") on the third Business Day immediately preceding
____________ (the "Secondary Remarketing Date"; each of the Initial Remarketing
and the Secondary Remarketing is referred to herein as a "Remarketing," and each
of the Initial Remarketing Date and the Secondary Remarketing Date, is referred
to herein as a "Remarketing Date"); and
WHEREAS, holders of Senior Notes that are not components of Corporate Units
may elect to have their Senior Notes remarketed in either Remarketing, in each
case by providing notice of such election within five Business Days prior to the
applicable Remarketing Date, and delivering their Senior Notes to the Custodial
Agent; and
WHEREAS, the applicable Reset Rate on the Senior Notes will be determined
on the applicable Remarketing Date by the Reset Agent (as defined herein) as the
rate that such Senior Notes should bear in order to have an approximate market
value of [100.5]%, as of the Initial Reset Date or [___________], as the case
may be, (i) of the Remarketing Treasury Portfolio Purchase Price, plus any
accrued and unpaid interest on such Senior Notes (in the case of the Initial
Remarketing) on the third Business Day immediately preceding Initial Reset Date
or (ii) of the Aggregate Principal Amount of the Senior Notes, plus any accrued
and unpaid interest on such Senior Notes (in the case of the Secondary
Remarketing) on the third Business Day immediately preceding ____________, such
Reset Rate to be effective on the applicable Reset Date; provided, however, that
(a) the Company may limit the Reset Rate to be no higher than the rate on the
Applicable Benchmark Treasury on such Business Day plus ___ basis points (___%);
(b) such market value may be less than [100.5]% if the Company exercises such
right to limit the Reset Rate; (c) the Reset Rate shall in no event exceed the
maximum permitted by applicable law; and (d) in the event that the Initial
Remarketing results in a Failed Remarketing, the interest rate on the Senior
Notes will not be reset on the Initial Reset Date; and
WHEREAS, the Company has requested XYZ to act as the Reset Agent and
Remarketing Agent, and in each such capacity to perform the services described
herein; and
WHEREAS, XYZ is willing to act as Reset Agent and Remarketing Agent and in
each such capacity is willing to perform such duties on the terms and conditions
expressly set forth herein;
NOW, THEREFORE, for and in consideration of the covenants herein made, and
subject to the conditions herein set forth, the parties hereto agree as follows:
Section 1. DEFINITIONS. Capitalized terms used and not defined in this
Agreement shall have the meanings assigned to them in the Purchase Contract
Agreement or, if not therein stated, the Pledge Agreement.
Section 2. Appointment and Obligations of Reset Agent and Remarketing
Agent. The Company hereby appoints:
(a) XYZ, and XYZ hereby accepts such appointment, as the Reset Agent
to determine, in consultation with the Company and in the manner provided for in
2
the Officer's Certificate establishing the terms of the Senior Notes and in the
Indenture, the Applicable Benchmark Treasury, applicable Reset Spread and, in
the case of an Initial Reset Date [prior to _________________], the portion of
the Applicable Ownership Interest in the Remarketing Treasury Portfolio relating
to the interest payment that would have been due on the Senior Notes on
_________________, in each case on the seventh Business Day preceding the
applicable Reset Date and the applicable Reset Rate on the third Business Day
immediately preceding each applicable Reset Date; and
(b) XYZ, and XYZ hereby accepts such appointment, as the Remarketing
Agent, to remarket Senior Notes (x) of Senior Note holders electing to have
their Senior Notes remarketed on the Initial Remarketing Date or the Secondary
Remarketing Date, as the case may be, and (y) (i) of Corporate Unit holders who
have not early settled the related Purchase Contracts, on the Initial
Remarketing Date and (ii) if the Initial Remarketing has resulted in a Failed
Remarketing, of Corporate Unit holders who have not early settled the related
Purchase Contracts and have failed to notify the Purchase Contract Agent, on or
prior to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, of their intention to settle the related Purchase Contracts
through Cash Settlement, on the Secondary Remarketing Date (all such Senior
Notes specified in clauses (x) and (y) above are hereinafter referred to as the
"Subject Senior Notes"), to the exclusion of other remarketing agents except
such as may be appointed pursuant to Section 4 hereof. Subject Senior Notes will
be remarketed pursuant to the Supplemental Remarketing Agreement attached hereto
as Exhibit A, among the Company, the Purchase Contract Agent and the Remarketing
Agent (with such changes as the Company, the Purchase Contract Agent and the
Remarketing Agent may agree upon, it being understood that changes may be
necessary in the representations, warranties, covenants and other provisions of
the Supplemental Remarketing Agreement due to changes in law or facts and
circumstances). Pursuant to the Supplemental Remarketing Agreement, the
Remarketing Agent will agree, subject to the terms and conditions set forth
therein, that it will (i) use its reasonable efforts to remarket not less than
the percentage agreed to in the Supplemental Remarketing Agreement of the
Subject Senior Notes on the applicable Remarketing Date, (a) at a price of
approximately (i) [100.5]% of the Remarketing Treasury Portfolio Purchase Price,
plus any accrued and unpaid interest on the Subject Senior Notes (in the case of
the Initial Remarketing), and (ii) [100.5]% of the aggregate principal amount of
such Subject Senior Notes, plus any accrued and unpaid interest on the Subject
Senior Notes (in the case of the Secondary Remarketing), and (b) purchase all
such remarketed Subject Senior Notes for sale to purchasers from the Remarketing
Agent. The Remarketing Agent shall not remarket any Subject Senior Notes for a
price less than (x) 100% of the Remarketing Treasury Portfolio Purchase Price,
plus any accrued and unpaid interest on the Subject Senior Notes (in the case of
the Initial Remarketing) and (y) 100% of the aggregate principal amount of such
Subject Senior Notes, plus any accrued and unpaid interest on the Subject Senior
Notes(in the case of the Secondary Remarketing), and shall not be required to
purchase any Subject Senior Notes not successfully remarketed. The proceeds of
such remarketing shall be paid to the Collateral Agent in accordance with
Section 6.2(b) of the Pledge Agreement and Section 4.3(b) of the Purchase
Contract Agreement (in the case of the Initial Remarketing) and Section 4.6 of
the Pledge Agreement and Section 5.4 of the Purchase Contract Agreement (in the
case of the Secondary Remarketing) (all of which Sections are incorporated
herein by reference). If fewer than all of the Subject Senior Notes are
remarketed in accordance with the terms hereof, a Remarketing shall be deemed to
have failed as to all Subject Senior Notes.
3
A holder of Senior Notes not pledged pursuant to the Pledge Agreement shall
have no right to have such Senior Notes remarketed unless (i) the Remarketing
Agent conducts a Remarketing pursuant to the terms of this Agreement, (ii) the
Subject Senior Notes have not been called for redemption as a result of a Tax
Event, (iii) the Remarketing Agent is able to find a purchaser or purchasers for
Subject Senior Notes, and (iv) such purchaser or purchasers deliver the purchase
price therefor to the Remarketing Agent. The Remarketing Agent is not obligated
to purchase any Subject Senior Notes that would otherwise remain unsold in a
Remarketing. The Remarketing Agent shall not be obligated in any case to provide
funds to make payment upon tender of Subject Senior Notes for remarketing.
Section 3. FEES. With respect to each Remarketing, the Remarketing Agent
shall retain as a Remarketing Fee an amount, to be agreed upon by the Company
and the Remarketing Agent, not exceeding ___ basis points (.__%) of the
aggregate principal amount of (i) the Remarketing Treasury Portfolio Purchase
Price (in the case of the Initial Remarketing) and (ii) the aggregate principal
amount of the Subject Senior Notes remarketed (in the case of the Secondary
Remarketing), from any amount received in connection with such Remarketing in
excess of (x) the Remarketing Treasury Portfolio Purchase Price, plus any
accrued and unpaid interest on the Subject Senior Notes (in the case of the
Initial Remarketing), and (y) the aggregate principal amount of such remarketed
Subject Senior Notes, plus any accrued and unpaid interest on the Subject Senior
Notes (in the case of the Secondary Remarketing). In addition, the Reset Agent
shall receive from the Company a reasonable and customary fee for acting as the
Reset Agent (the "Reset Agent Fee"); provided, however, that if a Remarketing
Agent shall also act as the Reset Agent, then the Reset Agent shall not be
entitled to receive any such Reset Agent Fee. Payment of such Reset Agent Fee
shall be made by the Company on the third Business Day immediately preceding the
applicable Remarketing Date in immediately available funds or, upon the
instructions of the Reset Agent, by certified or official bank check or checks
or by wire transfer.
Section 4. REPLACEMENT AND RESIGNATION OF REMARKETING AGENT AND RESET
AGENT; APPOINTMENT OF ADDITIONAL REMARKETING AGENTS. (a) The Company may in its
absolute discretion replace XYZ as the Remarketing Agent and/or XYZ as the Reset
Agent in its capacities hereunder by giving notice prior to 3:00 p.m., New York
City time, on the eighth Business Day immediately prior to any Remarketing Date.
Any such replacement shall become effective upon the Company's appointment of a
successor or successors to perform the services that would otherwise be
performed hereunder by the Remarketing Agent and/or the Reset Agent. Upon
providing such notice, the Company shall use all reasonable efforts to appoint
such a successor or successors and to enter into a remarketing agreement with
such successor or successors as soon as reasonably practicable.
(b) XYZ may resign at any time and be discharged from its duties and
obligations hereunder as the Remarketing Agent and/or the Reset Agent by giving
notice prior to 3:00 p.m., New York City time, on the eighth Business Day
immediately prior to either Remarketing Date. Any such resignation shall become
effective upon the Company's appointment of a successor or successors to perform
the services that would otherwise be performed hereunder by the Remarketing
Agent and/or the Reset Agent. Upon receiving notice from any Remarketing Agent
and/or the Reset Agent that it wishes to resign hereunder, the Company shall
4
appoint such a successor or successors and enter into a remarketing agreement
with it or them as soon as reasonably practicable.
(c) The Company may appoint additional remarketing agents at any time
prior to 3:00 p.m., New York City time, on the eight Business Day immediately
prior to any Remarketing Date. The appointment of any such additional
remarketing agents shall be effective upon such additional remarketing agents
agreeing to be bound by the terms of this agreement. To the extent any
additional remarketing agents are appointed, the obligations of all remarketing
agents thereunder shall be several and not joint.
Section 5. DEALING IN THE SECURITIES. The Remarketing Agent, when acting
hereunder or acting in its individual or any other capacity, may, to the extent
permitted by law, buy, sell, hold or deal in any of the Senior Notes. With
respect to any Senior Notes owned by it, the Remarketing Agent may exercise any
vote or join in any action with like effect as if it did not act in any capacity
hereunder. The Remarketing Agent, in its individual capacity, either as
principal or agent, may also engage in or have an interest in any financial or
other transaction with the Company as freely as if it did not act in any
capacity hereunder.
Section 6. REGISTRATION STATEMENT AND PROSPECTUS. In connection with a
Remarketing, if and to the extent required (in the opinion of counsel for either
the Remarketing Agent or the Company) by applicable law, regulations or
interpretations in effect at the time of such Remarketing, the Company shall use
its reasonable efforts to have a registration statement relating to the Subject
Senior Notes effective under the Securities Act of 1933, as amended (the
"Securities Act") by the third Business Day immediately preceding the applicable
Remarketing Date, shall furnish a current prospectus and/or prospectus
supplement to be used in such Remarketing by the Remarketing Agent under the
Supplemental Remarketing Agreement and shall pay all expenses relating thereto.
Section 7. CONDITIONS TO THE REMARKETING AGENT'S OBLIGATIONS. (a) The
obligations of the Remarketing Agent to remarket and purchase the Subject Senior
Notes shall be subject to the terms and conditions of the Supplemental
Remarketing Agreement.
(b) If at any time during the term of this Agreement, any Event of
Default (as defined therein) under the Indenture, or event that with the passage
of time or the giving of notice or both would become an Event of Default under
the Indenture, has occurred and is continuing, then the obligations and duties
of the Remarketing Agent under this Agreement shall be suspended until such
Event of Default or event has been cured. The Company will cause the Trustee to
give the Remarketing Agent notice of all such Events of Default and events of
which the Trustee is aware.
Section 8. INDEMNIFICATION. (a) The Company agrees to indemnify the
Remarketing Agent and the Reset Agent, and their respective affiliates,
directors and officers and each person who controls the Remarketing Agent or
Reset Agent within the meaning of Section 15 of the Securities Act (each such
person being an "Indemnified Party", from and against any and all losses,
claims, damages and liabilities, joint or several, to which such Indemnified
Party may become subject under any applicable federal or state statute,
regulation or common law, and related to or arising out of any acts or omissions
of the Remarketing Agent or Reset Agent in connection with their respective
5
duties and obligations as contemplated by Section 2 of this Agreement and will
reimburse any Indemnified Party for all expenses (including reasonable attorney
fees and expenses) as they are incurred in connection with the investigation or
defense of any pending or threatened claim or any action or proceeding arising
therefrom, whether or not such Indemnified Party is a party. The Company will
not be liable to any Indemnified Party under the foregoing indemnification
provision to the extent that any loss, claim, damage, liability or expense is
found in a final non-appealable judgment by a court of competent jurisdiction to
have resulted from the Remarketing Agent's or Reset Agent's bad faith, willful
misconduct or negligence. The Company also agrees that no Indemnified Party
shall have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Company or its security holders or creditors related to or
arising out of any acts or omissions of the Remarketing Agent or Reset Agent in
connection with their respective duties and obligations as contemplated by
Section 2 hereof, except to the extent that any loss, claim, damage or liability
is found in a final non-appealable judgment by a court of competent jurisdiction
to have resulted from the Remarketing Agent's or Reset Agent's bad faith or
negligence.
(b) If the indemnification provided for in Section 8(a) shall be
unenforceable for any reason, the Company agrees to contribute to the losses,
claims, damages and liabilities for which such indemnification shall be
unenforceable, in such proportion as shall be appropriate to reflect (i) the
relative fault of the Company on the one hand and the Indemnified Party on the
other in connection with the acts or omissions which have resulted in such
losses, claims, damages, liabilities and expenses, (ii) the relative benefits to
the Company of the work performed by the Remarketing Agent or Reset Agent as
contemplated by the Agreement, on the one hand, and the value of the engagement
to the Remarketing Agent or Reset Agent on the other hand, and (iii) any other
relevant equitable considerations; provided, however, that no Indemnified Party
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from the Company, provided
the Company is not also guilty of such fraudulent misrepresentation. The Company
and the Remarketing Agent and Reset Agent agree that it would not be just and
equitable if contribution pursuant to this Section 8(b) were to be determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above.
(c) Each Indemnified Party shall give written notice as promptly as
reasonably practicable to the Company of any action commenced against it in
respect of which indemnification may be sought hereunder but failure to so
notify the Company hereunder of any such action shall not relieve the Company of
any liability hereunder to the extent the Company is not materially prejudiced
as a result of such failure to notify. The Company may participate at its own
expense in the defense of any such action and may, at its option, assume the
defense thereof with counsel selected by the Company and reasonably acceptable
to the Indemnified Party and such Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it. If the defendants in any such
action include both the Indemnified Party and the Company and counsel for the
Company shall have reasonably concluded that there may be a conflict of interest
involved in the representation by a single counsel of both the Indemnified Party
and the Company, the Indemnified Party shall have the right to select separate
counsel, satisfactory to the Company, provided that, in no event shall the
Company be liable for the fees and expenses of more than one counsel separate
from its own counsel in addition to local counsel for all Indemnified Parties in
6
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
Section 9. TERMINATION OF REMARKETING AGREEMENT. This Agreement shall
terminate as to the Remarketing Agent on the effective date of its replacement
pursuant to Section 4(a) hereof or pursuant to Section 4(b) hereof.
Notwithstanding any such termination, the obligations set forth in Section 3
hereof shall survive and remain in full force and effect until all amounts
payable under said Section 3 shall have been paid in full. In addition, each
former Remarketing Agent and Reset Agent shall be entitled to the rights and
benefits, and subject to the obligations, under Section 8 hereof notwithstanding
any such termination or the replacement or resignation of such Remarketing Agent
or Reset Agent.
Section 10. REMARKETING AGENT'S PERFORMANCE; DUTY OF CARE. The duties and
obligations of the Remarketing Agent hereunder shall be determined solely by the
express provisions of this Agreement and the Supplemental Remarketing Agreement.
Section 11. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
Section 12. TERM OF AGREEMENT. Unless otherwise terminated in accordance
with the provisions hereof and except as otherwise provided herein, this
Agreement shall remain in full force and effect from the date hereof until the
first day thereafter on which no Senior Notes are outstanding.
Section 13. SUCCESSORS AND ASSIGNS. The rights and obligations of the
Company hereunder may not be assigned or delegated to any other person without
the prior written consent of the Remarketing Agent and the Purchase Contract
Agent. The rights and obligations of XYZ as the Remarketing Agent hereunder and
as the Reset Agent hereunder, may not be assigned or delegated to any other
person without the prior written consent of the Company. This Agreement shall
inure to the benefit of and be binding upon the Company, XYZ, as the Remarketing
Agent, and XYZ, as the Reset Agent, and its successors and assigns. The terms
"successors" and "assigns" shall not include any purchaser of Securities merely
because of such purchase.
Section 14. HEADINGS. Section headings have been inserted in this Agreement
as a matter of convenience of reference only, and it is agreed that such section
headings are not a part of this Agreement and will not be used in the
interpretation of any provision of this Agreement.
Section 15. SEVERABILITY. If any provision of this Agreement shall be held
or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as
applied in any particular case in any or all jurisdictions because it conflicts
with any provisions of any constitution, statute, rule or public policy or for
any other reason, such circumstances shall not have the effect of rendering the
provision in question invalid, inoperative or unenforceable in any other case,
circumstances or jurisdiction, or of rendering any other provision or provisions
of this Agreement invalid, inoperative or unenforceable to any extent
whatsoever.
7
Section 16. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be regarded as an original and all of which shall constitute
one and the same document.
Section 17. AMENDMENTS. This Agreement may be amended by any instrument in
writing signed by the parties hereto.
Section 18. NOTICES. Unless otherwise specified, any notices, requests,
consents or other communications given or made hereunder or pursuant hereto
shall be made in writing or transmitted by any standard form of
telecommunication, including telephone, telegraph or telecopy, and confirmed in
writing. All written notices and confirmations of notices by telecommunication
shall be deemed to have been validly given or made when delivered or mailed,
registered or certified mail, return receipt requested and postage prepaid or
transmitted by facsimile. All such notices, requests, consents or other
communications shall be addressed as follows: if to the Company, to TXU Corp.,
1601 Bryan Street, Dallas, Texas 75201, Attention: Treasurer; if to the
Remarketing Agent or the Reset Agent, to __________________________, Attention:
_______________; and if to the Purchase Contract Agent, to The Bank of New York,
101 Barclay Street, New York, New York 10286, Attention: Corporate Trust
Administration, or to such other address as any of the above shall specify to
the others in writing.
8
IN WITNESS WHEREOF, each of the Company, the Remarketing Agent and the
Purchase Contract Agent has caused this Agreement to be executed in its name and
on its behalf by one of its duly authorized officers as of the date first above
written.
This Supplemental Remarketing Agreement supplements a Remarketing
Agreement, dated ____________, among the parties hereto (the "Remarketing
Agreement"), and the terms hereof together with the terms of the Remarketing
Agreement constitute the entire agreement among the parties with respect to the
Remarketing of the Subject Senior Notes named in Schedule I hereto.
_______________________ (the "Remarketing Agent") hereby agrees, subject to the
terms and conditions herein set forth or incorporated herein, to use its
reasonable efforts to remarket not less than the percentage of the Subject
Senior Notes set forth with respect to such Remarketing Agent in Schedule I
hereto. All such Subject Senior Notes have been tendered for remarketing by the
holders thereof, or are the pledged Senior Notes of holders of Corporate Units
who [have not given notice that they intend to settle the Purchase Contracts
related to their Corporate Units with respect to a Purchase Contract Settlement
Date by a Cash Settlement and] have not early settled their Purchase Contracts.
1. DEFINITIONS. Terms defined in the Remarketing Agreement are used herein
with the meaning ascribed to them therein. Capitalized terms used and not
defined in this Agreement and the Remarketing Agreement shall have the meanings
assigned to them in the Purchase Contract Agreement, the Pledge Agreement, the
Underwriting Agreement and the Indenture, as applicable.
2. REGISTRATION STATEMENT AND PROSPECTUS. If required (in the opinion of
counsel to either the Remarketing Agent or the Company) by applicable law, the
Company has filed with the Securities and Exchange Commission (the
"Commission"), and there has become effective, a registration statement on Form
S-3 (No. 333-_____), including a prospectus, relating to the Subject Senior
Notes. Such registration statement, and the documents incorporated by reference
therein, as amended to the date of this Agreement, is hereinafter referred to as
the "Registration Statement", and the prospectus included in the Registration
Statement, as amended or supplemented to the date of this Agreement to relate to
the Subject Senior Notes and to the remarketing of the Subject Senior Notes, and
the documents incorporated by reference therein, is hereinafter referred to as
the "Prospectus" (including in each case all documents incorporated by
reference).
3. PROVISIONS INCORPORATED BY REFERENCE.
(a) Subject to Section 3(b), the following provisions of the
Underwriting Agreement shall be incorporated, as applicable, into this Agreement
and made applicable to the obligations of the Remarketing Agent, except as
explicitly amended hereby: ____________________.
(b) To the extent the Underwriting Agreement is applicable hereto,
references therein to (i) the "Underwriter" shall be deemed to refer to the
Remarketing Agent, (ii) the "Securities" and the "Senior Notes" shall be deemed
to refer to the Subject Senior Notes, (iii) "this Agreement" shall be deemed to
A-1
refer to the Remarketing Agreement as supplemented by this Agreement, (iv) "the
date hereof" shall be deemed to refer to the Initial Remarketing Date or the
Secondary Remarketing Date, as the case may be, and (v) "Closing Date" shall be
deemed to refer to the Remarketing Closing Date specified in Schedule I hereto
(the "Remarketing Closing Date"). To the extent the provisions of such
Underwriting Agreement refer to the "Prospectus" or the "Registration
Statement," such references shall be deemed to (i) refer to any prospectus or
registration statement, or other offering document, that the Company is required
to prepare or file with respect to the Subject Senior Notes pursuant to
applicable law, regulations or interpretations of the Commission in effect at
the time of the Remarketing of such Subject Senior Notes, including all
documents incorporated by reference therein and (ii) refer to each such document
as amended or supplemented to the third Business Day preceding the applicable
Remarketing Date and the Remarketing Closing Date, as applicable. The term
"Incorporated Documents" in such Underwriting Agreement shall be deemed to
include those filed and incorporated through the date hereof and the Tender
Date. References to issuance and/or sale of Senior Notes shall be deemed to
refer to Remarketing of the Subject Senior Notes. References in Section _____ to
information furnished by the Underwriters shall be deemed to refer to
information provided by the Remarketing Agent for use in the Prospectus.
4. PURCHASE AND SALE; REMARKETING FEE. Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth or
incorporated herein, the Remarketing Agent agrees to use its reasonable efforts
to remarket, and to purchase from the registered holder or holders thereof in
the manner specified in Section 5 hereof, the principal amount of the Subject
Senior Notes set forth in Schedule 1 hereto, such purchase to be at a purchase
price not less than 100% of [the Remarketing Treasury Portfolio Purchase Price,
plus any accrued and unpaid interest on the Subject Senior Notes] [the aggregate
principal amount of such Senior Notes, plus any accrued and unpaid interest
thereon]. In connection therewith, under the terms of the Senior Notes, the
registered holder or holders thereof have agreed, in the manner specified in
Section 5 hereof, to pay to the Remarketing Agent a Remarketing Fee, equal to an
amount determined by agreement of the Company and the Remarketing Agent with
respect to each Supplemental Remarketing Agreement, which shall not exceed __
basis points (.__%) of the aggregate principal amount of the remarketed Subject
Senior Notes, from any amount received from such Remarketing in excess of [the
Remarketing Treasury Portfolio Purchase Price] [the aggregate principal amount
of such remarketed Subject Senior Notes], plus any accrued and unpaid interest
on the Subject Senior Notes.
The Remarketing Agent does not agree to purchase or underwrite any Senior
Notes not remarketed by it. If fewer than all of the Subject Senior Notes are
remarketed in accordance with the terms hereof, the Remarketing shall be deemed
to have failed as to all Subject Senior Notes.
5. DELIVERY AND PAYMENT. Delivery of payment for the remarketed Subject
Senior Notes and payment of the Remarketing Fee shall be made on the Remarketing
Closing Date (as defined in Schedule I hereto) at the location and time
specified in Schedule I hereto (or such later date not later than five Business
Days after such date as the Remarketing Agent shall designate), which date and
time may be postponed by agreement among the Remarketing Agent, the Company, and
the registered holder or holders of the Subject Senior Notes. Delivery of the
Subject Senior Notes to be remarketed shall be made by the Collateral Agent and
the Custodial Agent, as applicable, to the Remarketing Agent on the fourth
Business Day immediately preceding the applicable Remarketing Date. Upon a
A-2
successful Remarketing, the Remarketing Agent may deduct the Remarketing Fee
from any amount of such Remarketing proceeds in excess of the [Remarketing
Treasury Portfolio Purchase Price] [aggregate principal amount of such
remarketed Subject Senior Notes] plus accrued and unpaid interest, if any, on
the Subject Senior Notes or, if the remarketed Subject Senior Notes are
represented by a Global Security, payment of the Remarketing Fee may be made by
any method of transfer agreed upon by the Remarketing Agent and the Depositary
for the Subject Senior Notes under the Indenture.
If the remarketed Subject Senior Notes are not represented by a Global
Security, certificates for the Senior Notes shall be registered in such names
and denominations as the Remarketing Agents may request and the Company agrees
to have such certificates available for inspection, packaging and checking by
the Remarketing Agent in New York, New York not later than 1:00 p.m. on the
Business Day prior to the Remarketing Closing Date.
6. NOTICES. Unless otherwise specified, any notices, requests, consents or
other communications given or made hereunder or pursuant hereto shall be made in
writing or transmitted by any standard form of telecommunication, including
telephone, telegraph or telecopy, and confirmed in writing. All written notices
and confirmations of notices by telecommunication shall be deemed to have been
validly given or made when delivered or mailed, registered or certified mail,
return receipt requested and postage prepaid or transmitted by facsimile. All
such notices, requests, consents or other communications shall be addressed as
follows: if to the Company, to TXU Corp., 1601 Bryan Street, Dallas, Texas
75201, Attention: Treasurer; if to the Remarketing Agent or the Reset Agent, to
__________________________, Attention:_______________; and if to the Purchase
Contract Agent, to The Bank of New York, 101 Barclay Street, New York, New York
10286, Attention: Corporate Trust Administration, or to such other address as
any of the above shall specify to the other in writing.
A-3
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and the Remarketing Agent.
Title of Subject Senior Notes: Series _ Senior Notes due ____________
Principal Amount of Subject Senior Notes: $
Reset Spread: %
Applicable Benchmark Treasury:
[Minimum percentage to be remarketed by XYZ: %]
Underwriting Agreement, ____________, between the Company
and _______________________________________________________________________,
as representative of the underwriters named therein.
Remarketing Fee: % ($ )
Remarketing Closing Date, Time and Location:
A-6
HUNTON & WILLIAMS LLP
ENERGY PLAZA
30TH FLOOR
1601 BRYAN STREET
DALLAS, TEXAS 75201-3402
TEL 214 o 979 o 3000
FAX 214 o 880 o 0011
EXHIBIT 5(a)
May 4, 2004
TXU Corp.
TXU Capital III
TXU Capital IV
1601 Bryan Street
Dallas, Texas 75201
Ladies and Gentlemen:
Reference is made to the Registration Statement (Registration Statement) on
Form S-3 to be filed by TXU Corp. (Company) and TXU Capital III and TXU Capital
IV (each a Trust) on or about the date hereof, with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (Securities Act), for
the registration of (i) securities (Securities) in an aggregate offering amount
not to exceed $2,000,000,000, including (a) shares of the Company's common
stock, without par value (Common Stock), and the rights to purchase the
Company's Series A Preference Stock attached thereto (Rights); (b) contracts to
purchase shares of Common Stock (Stock Purchase Contracts); (c) units, each
comprised of a Stock Purchase Contract and either unsecured senior notes of the
Company (Debt Securities) or debt obligations of third parties, including U.S.
Treasury Securities, pledged to secure the holder's obligation to purchase
shares of Common Stock under the Stock Purchase Contracts (Stock Purchase
Units); (d) one or more series of Debt Securities of the Company, each issued
pursuant to the terms of an indenture (Debt Securities Indenture), not as a part
of Stock Purchase Units; (e) shares of one or more series of the Company's
preference stock, $25 par value per share (Preference Stock); and (f) one or
more series of preferred trust securities of a Trust (Preferred Trust
Securities); (ii) one or more guarantees of the Company with respect to
Preferred Trust Securities (each a Guarantee); and (iii) one or more series of
junior subordinated debentures of the Company (Subordinated Debentures), each to
be issued pursuant to the terms of an indenture (Subordinated Indenture) and
purchased by a Trust with the proceeds of the sale of Preferred Trust Securities
and the related common trust securities issued by such Trust. In connection
therewith, we have reviewed such documents and records as we have deemed
necessary to enable us to express an opinion on the matters covered hereby.
Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Texas.
TXU Corp.
TXU Capital III
TXU Capital IV
May 4, 2004
Page 2
2. The shares of Common Stock and attached Rights will be validly issued,
fully paid and non-assessable when:
a. the Board of Directors of the Company, or a duly authorized
committee thereof, shall have adopted appropriate resolutions approving and
authorizing the issuance and sale of such shares and attached Rights and any
other action necessary to the consummation of the proposed issuance and sale
thereof; and
b. such shares and attached Rights shall have been issued and sold for
the consideration contemplated by, and otherwise in conformity with, the
Registration Statement as supplemented by a prospectus supplement with respect
to such issuance and sale and the acts and proceedings referred to above.
3. The Stock Purchase Contracts and Stock Purchase Units will be valid,
legal and binding obligations of the Company when:
a. the Board of Directors of the Company, or a duly authorized
committee thereof, shall have taken such action as may be necessary to establish
the terms of such Stock Purchase Contracts or Stock Purchase Units, as the case
may be; and
b. such Stock Purchase Contracts or Stock Purchase Units, as the case
may be, shall have been issued and delivered in accordance with the terms and
provisions thereof and for the consideration contemplated by, and otherwise in
conformity with, the Registration Statement as supplemented by a prospectus
supplement with respect to such issuance and delivery and the acts and
proceedings referred to above.
4. The Debt Securities will be valid, legal and binding obligations of the
Company when:
a. a Debt Securities Indenture with respect to such Debt Securities
shall have been executed and delivered by a duly authorized officer or
representative of the Company and by the trustee under such Debt Securities
Indenture; and
b. the Board of Directors of the Company, or an officer duly authorized
thereby, shall have taken such action, pursuant to the terms of such Debt
Securities Indenture, as may be necessary to establish the terms of such Debt
Securities, and such Debt Securities shall have been issued and delivered in
accordance with the terms and provisions of such Debt Securities Indenture.
TXU Corp.
TXU Capital III
TXU Capital IV
May 4, 2004
Page 3
5. The shares of Preference Stock will be validly issued, fully paid and
non-assessable when:
a. the Board of Directors of the Company, or a duly authorized
committee thereof, shall have adopted appropriate resolutions establishing the
relative rights and preferences of such shares, as set forth in or contemplated
by the Registration Statement, the exhibits thereto and any prospectus
supplement relating to the Preference Stock, and to authorize such other action
as may be necessary to the consummation of the proposed issuance and sale of
such shares;
b. a statement with respect to the resolutions establishing the
relative rights and preferences of such shares shall have been filed with the
Secretary of State of Texas in the form and manner required by law; and
c. such shares shall have been issued and sold for the consideration
contemplated by, and otherwise in conformity with, the Registration Statement,
as supplemented by a prospectus supplement with respect to such issuance and
sale and the acts, proceedings and documents referred to above.
6. Each Guarantee will be a valid, legal and binding obligation of the
Company when the Board of Directors of the Company, a duly authorized committee
thereof or an officer duly authorized thereby, shall have taken such action as
may be necessary to establish the terms of such Guarantee and such Guarantee
shall have been duly executed and delivered by the parties thereto.
7. The Subordinated Debentures will be valid, legal and binding
obligations of the Company when:
a. a Subordinated Indenture with respect to such Subordinated
Debentures shall have been executed and delivered by a duly authorized officer
or representative of the Company and by the trustee under such Subordinated
Indenture; and
b. the Board of Directors of the Company, or an officer duly authorized
thereby, shall have taken such action, pursuant to the terms of such
Subordinated Indenture, as may be necessary to establish the terms of such
Subordinated Debentures, and such Subordinated Debentures shall have been issued
and delivered in accordance with the terms and provisions of such Subordinated
Indenture.
TXU Corp.
TXU Capital III
TXU Capital IV
May 4, 2004
Page 4
The opinions set forth in paragraphs 3, 4, 6 and 7 above are subject, as to
enforceability, to the effect of bankruptcy, insolvency, reorganization,
receivership, fraudulent conveyance, fraudulent transfer, moratorium and other
laws affecting the rights and remedies of creditors generally and general
principals of equity.
This opinion is limited to the laws of the States of Texas and New York and
the federal laws of the United States of America. As to all matters of Texas
law, Thelen Reid & Priest LLP is authorized to rely on this opinion as if it
were addressed to it.
We hereby consent to the use of our name in the aforementioned Registration
Statement and to the use of this opinion as an exhibit thereto. Such consent
shall not be deemed to be an admission that we are "experts" within the meaning
of Section 7 of the Securities Act.
Very truly yours,
EXHIBIT 5(b)
THELEN REID & PRIEST LLP
Attorneys at Law
875 Third Avenue
New York, NY 10022-6225
Tel. 212.603.2000
Fax 212.603.2001
www.thelenreid.com
May 4, 2004
TXU Corp.
TXU Capital III
TXU Capital IV
1601 Bryan Street
Dallas, Texas 75201
Ladies and Gentlemen:
Reference is made to the Registration Statement (Registration Statement) on
Form S-3 to be filed by TXU Corp. (Company) and TXU Capital III and TXU Capital
IV (each a Trust) on or about the date hereof, with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (Securities Act), for
the registration of (i) securities (Securities) in an aggregate offering amount
not to exceed $2,000,000,000, including (a) shares of the Company's common
stock, without par value (Common Stock), and the rights to purchase the
Company's Series A Preference Stock attached thereto (Rights); (b) contracts to
purchase shares of Common Stock (Stock Purchase Contracts); (c) units, each
comprised of a Stock Purchase Contract and either unsecured senior notes of the
Company (Debt Securities) or debt obligations of third parties, including U.S.
Treasury Securities, pledged to secure the holder's obligation to purchase
shares of Common Stock under the Stock Purchase Contracts (Stock Purchase
Units); (d) one or more series of Debt Securities of the Company, each issued
pursuant to the terms of an indenture (Debt Securities Indenture), not as a part
of Stock Purchase Units; (e) shares of one or more series of the Company's
preference stock, $25 par value per share (Preference Stock); and (f) one or
more series of preferred trust securities of a Trust (Preferred Trust
Securities); (ii) one or more guarantees of the Company with respect to
Preferred Trust Securities (each a Guarantee); and (iii) one or more series of
junior subordinated debentures of the Company (Subordinated Debentures), each to
be issued pursuant to the terms of an indenture (Subordinated Indenture) and
purchased by a Trust with the proceeds of the sale of Preferred Trust Securities
and the related common trust securities issued by such Trust. In connection
therewith, we have reviewed such documents and records as we have deemed
necessary to enable us to express an opinion on the matters covered hereby.
Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Texas.
2. The shares of Common Stock, and the attached Rights, will be validly
issued, fully paid and non-assessable when:
TXU Corp.
TXU Capital III
TXU Capital IV
May 4, 2004
Page 2
a. the Board of Directors of the Company, or a duly authorized
committee thereof, shall have adopted appropriate resolutions approving and
authorizing the issuance and sale of such shares and attached Rights and any
other action necessary to the consummation of the proposed issuance and sale
thereof; and
b. such shares and attached Rights shall have been issued and sold for
the consideration contemplated by, and otherwise in conformity with, the
Registration Statement as supplemented by a prospectus supplement with respect
to such issuance and sale and the acts and proceedings referred to above.
3. The Stock Purchase Contracts and Stock Purchase Units will be valid,
legal and binding obligations of the Company, except as limited or affected by
bankruptcy, insolvency, reorganization, receivership, fraudulent conveyance,
fraudulent transfer, moratorium and other laws affecting the rights and remedies
of creditors generally and general principles of equity, when:
a. the Board of Directors of the Company, or a duly authorized
committee thereof, shall have taken such action as may be necessary to establish
the terms of such Stock Purchase Contracts or Stock Purchase Units, as the case
may be; and
b. such Stock Purchase Contracts or Stock Purchase Units, as the case
may be, shall have been issued and delivered in accordance with the terms and
provisions thereof and for the consideration contemplated by, and otherwise in
conformity with, the Registration Statement as supplemented by a prospectus
supplement with respect to such issuance and delivery and the acts and
proceedings referred to above.
4. The Debt Securities will be valid, legal and binding obligations of the
Company, except as limited or affected by bankruptcy, insolvency,
reorganization, receivership, fraudulent conveyance, fraudulent transfer,
moratorium and other laws affecting the rights and remedies of creditors
generally and general principles of equity, when:
a. a Debt Securities Indenture with respect to such Debt Securities
shall have been executed and delivered by a duly authorized officer or
representative of the Company and by the trustee under such Debt Securities
Indenture; and
b. the Board of Directors of the Company, or an officer duly authorized
thereby, shall have taken such action, pursuant to the terms of such Debt
Securities Indenture, as may be necessary to establish the terms of such Debt
Securities, and such Debt Securities shall have been issued and delivered in
accordance with the terms and provisions of such Debt Securities Indenture.
5. The shares of Preference Stock will be validly issued, fully paid and
non-assessable when:
TXU Corp.
TXU Capital III
TXU Capital IV
May 4, 2004
Page 3
a. the Board of Directors of the Company, or a duly authorized
committee thereof, shall have adopted appropriate resolutions establishing the
relative rights and preferences of such shares, as set forth in or contemplated
by the Registration Statement, the exhibits thereto and any prospectus
supplement relating to the Preference Stock, and to authorize such other action
as may be necessary to the consummation of the proposed issuance and sale of
such shares;
b. a statement with respect to the resolutions establishing the
relative rights and preferences of such shares shall have been filed with the
Secretary of State of Texas in the form and manner required by law; and
c. such shares shall have been issued and sold for the consideration
contemplated by, and otherwise in conformity with, the Registration Statement,
as supplemented by a prospectus supplement with respect to such issuance and
sale and the acts, proceedings and documents referred to above.
6. Each Guarantee will be a valid, legal and binding obligation of the
Company, except as limited or affected by bankruptcy, insolvency,
reorganization, receivership, fraudulent conveyance, fraudulent transfer,
moratorium and other laws affecting the rights and remedies of creditors
generally and general principles of equity, when the Board of Directors of the
Company, a duly authorized committee thereof or an officer duly authorized
thereby, shall have taken such action as may be necessary to establish the terms
of such Guarantee and such Guarantee shall have been duly executed and delivered
by the parties thereto.
7. The Subordinated Debentures will be valid, legal and binding obligations
of the Company, except as limited or affected by bankruptcy, insolvency,
reorganization, receivership, fraudulent conveyance, fraudulent transfer,
moratorium and other laws affecting the rights and remedies of creditors
generally and general principles of equity, when:
a. a Subordinated Indenture with respect to such Subordinated
Debentures shall have been executed and delivered by a duly authorized officer
or representative of the Company and by the trustee under such Subordinated
Indenture; and
b. the Board of Directors of the Company, or an officer duly authorized
thereby, shall have taken such action, pursuant to the terms of such
Subordinated Indenture, as may be necessary to establish the terms of such
Subordinated Debentures, and such Subordinated Debentures shall have been issued
and delivered in accordance with the terms and provisions of such Subordinated
Indenture.
This opinion is limited to the laws of the States of New York and Texas and
the federal laws of the United States of America. As to all matters of Texas
law, we have, with your consent, relied upon the opinion of even date herewith
addressed to you by Hunton & Williams LLP, Dallas, Texas, counsel for the
Company, which is being filed as an exhibit to the Registration Statement.
TXU Corp.
TXU Capital III
TXU Capital IV
May 4, 2004
Page 4
We hereby consent to the use of our name in the aforementioned Registration
Statement and to the use of this opinion as an exhibit thereto. Such consent
shall not be deemed to be an admission that we are "experts" within the meaning
of Section 7 of the Securities Act.
TXU Capital III
TXU Corp.
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Re: TXU Capital III
Ladies and Gentlemen:
We have acted as special Delaware counsel for TXU Corp., a Texas
corporation (the "Company"), and TXU Capital III, a Delaware statutory trust
(the "Trust"), in connection with the matters set forth herein. At your request,
this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of May 21, 1999
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on May 21, 1999;
(b) The Trust Agreement of the Trust, dated as of May 21, 1999, among
the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on Form
S-3, including a prospectus (the "Prospectus"), relating to the undivided
beneficial interests in the assets of the Trust (each, a "Security" and
collectively, the "Securities"), as proposed to be filed by the Company, the
Trust and others with the Securities and Exchange Commission on or about May 4,
2004;
(d) A form of Amended and Restated Trust Agreement of the Trust
(including Exhibits A, B and D thereto) (the "Trust Agreement"), to be entered
into among the Company, the trustees of the Trust named therein, and the
holders, from time to time, of undivided beneficial interests in the assets of
TXU Capital III
May 4, 2004
Page 2
the Trust, incorporated by reference as an exhibit to the Registration
Statement; and
(e) A Certificate of Good Standing for the Trust, dated May 4, 2004,
obtained from the Secretary of State.
Capitalized terms used herein and not otherwise defined are used as
defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular, we
have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our own
but rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are signatories to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Security is to be issued by the Trust (collectively, the "Security Holders")
of a certificate in the form attached as Exhibit D to the Trust Agreement
evidencing ownership of such Security in the name of such Person and the payment
for the Security acquired by it, in accordance with the Trust Agreement and the
Registration Statement, and (vii) that the Securities are issued and sold to the
Security Holders in accordance with the Trust Agreement and the Registration
Statement. We have not participated in the preparation of the Registration
Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder that are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a statutory trust under the Delaware Statutory Trust Act.
2. The Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Security Holders, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware. We note that the Security Holders may be obligated to
make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Legality" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other Person for any purpose.
TXU Capital IV
TXU Corp.
Energy Plaza
1601 Bryan Street
Dallas, Texas 75201
Re: TXU Capital IV
Ladies and Gentlemen:
We have acted as special Delaware counsel for TXU Corp., a Texas
corporation (the "Company"), and TXU Capital IV, a Delaware statutory trust (the
"Trust"), in connection with the matters set forth herein. At your request, this
opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of May 21, 1999
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on May 21, 1999;
(b) The Trust Agreement of the Trust, dated as of May 21, 1999, among
the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on Form
S-3, including a prospectus (the "Prospectus"), relating to the undivided
beneficial interests in the assets of the Trust (each, a "Security" and
collectively, the "Securities"), as proposed to be filed by the Company, the
Trust and others with the Securities and Exchange Commission on or about May 4,
2004;
(d) A form of Amended and Restated Trust Agreement of the Trust
(including Exhibits A, B and D thereto) (the "Trust Agreement"), to be entered
into among the Company, the trustees of the Trust named therein, and the
holders, from time to time, of undivided beneficial interests in the assets of
TXU Capital IV
May 4, 2004
Page 2
the Trust, incorporated by reference as an exhibit to the Registration
Statement; and
(e) A Certificate of Good Standing for the Trust, dated May 4, 2004,
obtained from the Secretary of State.
Capitalized terms used herein and not otherwise defined are used as
defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular, we
have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our own
but rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are signatories to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Security is to be issued by the Trust (collectively, the "Security Holders")
of a certificate in the form attached as Exhibit D to the Trust Agreement
evidencing ownership of such Security in the name of such Person and the payment
for the Security acquired by it, in accordance with the Trust Agreement and the
Registration Statement, and (vii) that the Securities are issued and sold to the
Security Holders in accordance with the Trust Agreement and the Registration
Statement. We have not participated in the preparation of the Registration
Statement and assume no responsibility for its contents.
TXU Capital IV
May 4, 2004
Page 3
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder that are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a statutory trust under the Delaware Statutory Trust Act.
2. The Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Security Holders, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware. We note that the Security Holders may be obligated to
make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Legality" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
EXHIBIT 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
TXU Corp. on Form S-3 of our report dated March 11, 2004, (which includes
explanatory paragraphs relating to the adoption of Statement of Financial
Accounting Standards No. 142 and the rescission of Emerging Issues Task Force
Issue 98-10 as described in the Notes to the Financial Statements), appearing in
the Annual Report on Form 10-K of TXU Corp. for the year ended December 31, 2003
and to the reference to us under the heading "Experts" in the Prospectus, which
is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Dallas, Texas
May 4, 2004
EXHIBIT 25(a)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification Number)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TXU CORP.
(Exact name of obligor as specified in its charter)
Texas 75-2669310
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Energy Plaza, 1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
-----------------
Debt Securities*
(Title of the indenture securities)
*Specific title(s) to be determined in connection with the issuance(s) of
Debt Securities.
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington,
D.C. 20429
New York Clearing House Association New York, N.Y. 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. - A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed as Exhibit 25(a) to Registration Statement
No. 333-102200.)
6. - The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
2
NOTE
Inasmuch as this Form T-1 is being filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 4th day of May, 2004.
THE BANK OF NEW YORK
By: /s/ Remo J. Reale
------------------------------------
Name: Remo J. Reale
Title: Vice President
3
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
2003, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency
and coin.. $3,752,987
Interest-bearing balances ................................ 7,153,561
Securities:
Held-to-maturity securities............................... 260,388
Available-for-sale securities............................. 21,587,862
Federal funds sold in domestic offices....................... 165,000
Securities purchased under agreements to
resell.................................................... 2,804,315
Loans and lease financing receivables:
Loans and leases held for sale............................ 557,358
Loans and leases, net of unearned
income........................................36,255,119
LESS: Allowance for loan and
lease losses.....................................664,233
Loans and leases, net of unearned
income and allowance.................................... 35,590,886
Trading Assets............................................... 4,892,480
Premises and fixed assets (including capitalized
leases)................................................... 926,789
Other real estate owned...................................... 409
Investments in unconsolidated subsidiaries and
associated companies...................................... 277,788
Customers' liability to this bank on acceptances
outstanding............................................... 144,025
Intangible assets
Goodwill.................................................. 2,635,322
Other intangible assets................................... 781,009
Other assets................................................. 7,727,722
-----------
Total assets................................................. $89,257,901
===========
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
Deposits:
In domestic offices....................................... $33,763,250
Noninterest-bearing..........................14,511,050
Interest-bearing.............................19,252,200
In foreign offices, Edge and Agreement
subsidiaries, and IBFs.................................. 22,980,400
Noninterest-bearing.............................341,376
Interest-bearing.............................22,639,024
Federal funds purchased in domestic
offices.................................................... 545,681
Securities sold under agreements to repurchase............... 695,658
Trading liabilities.......................................... 2,338,897
Other borrowed money:
(includes mortgage indebtedness and obligations
under capitalized leases)................................. 11,078,363
Bank's liability on acceptances executed and
outstanding............................................... 145,615
Subordinated notes and debentures............................ 2,408,665
Other liabilities............................................ 6,441,088
-----------
Total liabilities............................................ $80,397,617
===========
Minority interest in consolidated
subsidiaries.............................................. 640,126
EQUITY CAPITAL
Perpetual preferred stock and related
surplus................................................... 0
Common stock................................................. 1,135,284
Surplus...................................................... 2,077,255
Retained earnings............................................ 4,955,319
Accumulated other comprehensive income....................... 52,300
Other equity capital components.............................. 0
Total equity capital......................................... 8,220,158
-----------
Total liabilities minority interest and equity capital. 89,257,901
===========
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
]
Thomas A. Renyi ] Directors
Gerald L. Hassell ]
Alan R. Griffith ]
EXHIBIT 25(b)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification Number)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TXU CORP.
(Exact name of obligor as specified in its charter)
Texas 75-2669310
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Energy Plaza, 1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
-----------------
Junior Subordinated Debentures*
(Title of the indenture securities)
*Specific title(s) to be determined in connection with the issuance(s) of
Junior Subordinated Debentures.
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington,
D.C. 20429
New York Clearing House Association New York, N.Y. 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. - A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed as Exhibit 25(a) to Registration Statement
No. 333-102200.)
6. - The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
2
NOTE
Inasmuch as this Form T-1 is being filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 4th day of May, 2004.
THE BANK OF NEW YORK
By: /s/ Remo J. Reale
------------------------------------
Name: Remo J. Reale
Title: Vice President
3
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
2003, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency
and coin.. $3,752,987
Interest-bearing balances ................................ 7,153,561
Securities:
Held-to-maturity securities............................... 260,388
Available-for-sale securities............................. 21,587,862
Federal funds sold in domestic offices....................... 165,000
Securities purchased under agreements to
resell.................................................... 2,804,315
Loans and lease financing receivables:
Loans and leases held for sale............................ 557,358
Loans and leases, net of unearned
income........................................36,255,119
LESS: Allowance for loan and
lease losses.....................................664,233
Loans and leases, net of unearned
income and allowance.................................... 35,590,886
Trading Assets............................................... 4,892,480
Premises and fixed assets (including capitalized
leases)................................................... 926,789
Other real estate owned...................................... 409
Investments in unconsolidated subsidiaries and
associated companies...................................... 277,788
Customers' liability to this bank on acceptances
outstanding............................................... 144,025
Intangible assets
Goodwill.................................................. 2,635,322
Other intangible assets................................... 781,009
Other assets................................................. 7,727,722
-----------
Total assets................................................. $89,257,901
===========
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
Deposits:
In domestic offices....................................... $33,763,250
Noninterest-bearing..........................14,511,050
Interest-bearing.............................19,252,200
In foreign offices, Edge and Agreement
subsidiaries, and IBFs.................................. 22,980,400
Noninterest-bearing.............................341,376
Interest-bearing.............................22,639,024
Federal funds purchased in domestic
offices.................................................... 545,681
Securities sold under agreements to repurchase............... 695,658
Trading liabilities.......................................... 2,338,897
Other borrowed money:
(includes mortgage indebtedness and obligations
under capitalized leases)................................. 11,078,363
Bank's liability on acceptances executed and
outstanding............................................... 145,615
Subordinated notes and debentures............................ 2,408,665
Other liabilities............................................ 6,441,088
-----------
Total liabilities............................................ $80,397,617
===========
Minority interest in consolidated
subsidiaries.............................................. 640,126
EQUITY CAPITAL
Perpetual preferred stock and related
surplus................................................... 0
Common stock................................................. 1,135,284
Surplus...................................................... 2,077,255
Retained earnings............................................ 4,955,319
Accumulated other comprehensive income....................... 52,300
Other equity capital components.............................. 0
Total equity capital......................................... 8,220,158
-----------
Total liabilities minority interest and equity capital. 89,257,901
===========
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
]
Thomas A. Renyi ] Directors
Gerald L. Hassell ]
Alan R. Griffith ]
EXHIBIT 25(c)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification Number)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TXU CAPITAL III
(Exact name of obligor as specified in its charter)
Texas 75-2669310
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Energy Plaza, 1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
-----------------
TXU Capital III Preferred Trust Securities*
(Title of the indenture securities)
*Specific title(s) to be determined in connection with the issuance(s) of
TXU Capital III Preferred Trust Securities.
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington,
D.C. 20429
New York Clearing House Association New York, N.Y. 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. - A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed as Exhibit 25(a) to Registration Statement
No. 333-102200.)
6. - The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
2
NOTE
Inasmuch as this Form T-1 is being filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 4th day of May, 2004.
THE BANK OF NEW YORK
By: /s/ Remo J. Reale
------------------------------------
Name: Remo J. Reale
Title: Vice President
3
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
2003, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency
and coin.. $3,752,987
Interest-bearing balances ................................ 7,153,561
Securities:
Held-to-maturity securities............................... 260,388
Available-for-sale securities............................. 21,587,862
Federal funds sold in domestic offices....................... 165,000
Securities purchased under agreements to
resell.................................................... 2,804,315
Loans and lease financing receivables:
Loans and leases held for sale............................ 557,358
Loans and leases, net of unearned
income........................................36,255,119
LESS: Allowance for loan and
lease losses.....................................664,233
Loans and leases, net of unearned
income and allowance.................................... 35,590,886
Trading Assets............................................... 4,892,480
Premises and fixed assets (including capitalized
leases)................................................... 926,789
Other real estate owned...................................... 409
Investments in unconsolidated subsidiaries and
associated companies...................................... 277,788
Customers' liability to this bank on acceptances
outstanding............................................... 144,025
Intangible assets
Goodwill.................................................. 2,635,322
Other intangible assets................................... 781,009
Other assets................................................. 7,727,722
-----------
Total assets................................................. $89,257,901
===========
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
Deposits:
In domestic offices....................................... $33,763,250
Noninterest-bearing..........................14,511,050
Interest-bearing.............................19,252,200
In foreign offices, Edge and Agreement
subsidiaries, and IBFs.................................. 22,980,400
Noninterest-bearing.............................341,376
Interest-bearing.............................22,639,024
Federal funds purchased in domestic
offices.................................................... 545,681
Securities sold under agreements to repurchase............... 695,658
Trading liabilities.......................................... 2,338,897
Other borrowed money:
(includes mortgage indebtedness and obligations
under capitalized leases)................................. 11,078,363
Bank's liability on acceptances executed and
outstanding............................................... 145,615
Subordinated notes and debentures............................ 2,408,665
Other liabilities............................................ 6,441,088
-----------
Total liabilities............................................ $80,397,617
===========
Minority interest in consolidated
subsidiaries.............................................. 640,126
EQUITY CAPITAL
Perpetual preferred stock and related
surplus................................................... 0
Common stock................................................. 1,135,284
Surplus...................................................... 2,077,255
Retained earnings............................................ 4,955,319
Accumulated other comprehensive income....................... 52,300
Other equity capital components.............................. 0
Total equity capital......................................... 8,220,158
-----------
Total liabilities minority interest and equity capital. 89,257,901
===========
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
]
Thomas A. Renyi ] Directors
Gerald L. Hassell ]
Alan R. Griffith ]
EXHIBIT 25(d)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification Number)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TXU CORP.
(Exact name of obligor as specified in its charter)
Texas 75-2669310
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Energy Plaza, 1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
-----------------
TXU Corp. Guarantee with Respect to TXU Capital III Preferred Trust Securities*
(Title of the indenture securities)
*Specific title(s) to be determined in connection with the issuance(s) of
TXU Capital III Preferred Trust Securities.
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington,
D.C. 20429
New York Clearing House Association New York, N.Y. 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. - A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed as Exhibit 25(a) to Registration Statement
No. 333-102200.)
6. - The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
2
NOTE
Inasmuch as this Form T-1 is being filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 4th day of May, 2004.
THE BANK OF NEW YORK
By: /s/ Remo J. Reale
------------------------------------
Name: Remo J. Reale
Title: Vice President
3
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
2003, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency
and coin.. $3,752,987
Interest-bearing balances ................................ 7,153,561
Securities:
Held-to-maturity securities............................... 260,388
Available-for-sale securities............................. 21,587,862
Federal funds sold in domestic offices....................... 165,000
Securities purchased under agreements to
resell.................................................... 2,804,315
Loans and lease financing receivables:
Loans and leases held for sale............................ 557,358
Loans and leases, net of unearned
income........................................36,255,119
LESS: Allowance for loan and
lease losses.....................................664,233
Loans and leases, net of unearned
income and allowance.................................... 35,590,886
Trading Assets............................................... 4,892,480
Premises and fixed assets (including capitalized
leases)................................................... 926,789
Other real estate owned...................................... 409
Investments in unconsolidated subsidiaries and
associated companies...................................... 277,788
Customers' liability to this bank on acceptances
outstanding............................................... 144,025
Intangible assets
Goodwill.................................................. 2,635,322
Other intangible assets................................... 781,009
Other assets................................................. 7,727,722
-----------
Total assets................................................. $89,257,901
===========
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
Deposits:
In domestic offices....................................... $33,763,250
Noninterest-bearing..........................14,511,050
Interest-bearing.............................19,252,200
In foreign offices, Edge and Agreement
subsidiaries, and IBFs.................................. 22,980,400
Noninterest-bearing.............................341,376
Interest-bearing.............................22,639,024
Federal funds purchased in domestic
offices.................................................... 545,681
Securities sold under agreements to repurchase............... 695,658
Trading liabilities.......................................... 2,338,897
Other borrowed money:
(includes mortgage indebtedness and obligations
under capitalized leases)................................. 11,078,363
Bank's liability on acceptances executed and
outstanding............................................... 145,615
Subordinated notes and debentures............................ 2,408,665
Other liabilities............................................ 6,441,088
-----------
Total liabilities............................................ $80,397,617
===========
Minority interest in consolidated
subsidiaries.............................................. 640,126
EQUITY CAPITAL
Perpetual preferred stock and related
surplus................................................... 0
Common stock................................................. 1,135,284
Surplus...................................................... 2,077,255
Retained earnings............................................ 4,955,319
Accumulated other comprehensive income....................... 52,300
Other equity capital components.............................. 0
Total equity capital......................................... 8,220,158
-----------
Total liabilities minority interest and equity capital. 89,257,901
===========
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
]
Thomas A. Renyi ] Directors
Gerald L. Hassell ]
Alan R. Griffith ]
EXHIBIT 25(e)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification Number)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TXU CAPITAL IV
(Exact name of obligor as specified in its charter)
Texas 75-2669310
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Energy Plaza, 1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
-----------------
TXU Capital IV Preferred Trust Securities*
(Title of the indenture securities)
*Specific title(s) to be determined in connection with the issuance(s) of
TXU Capital IV Preferred Trust Securities.
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington,
D.C. 20429
New York Clearing House Association New York, N.Y. 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. - A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed as Exhibit 25(a) to Registration Statement
No. 333-102200.)
6. - The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
2
NOTE
Inasmuch as this Form T-1 is being filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 4th day of May, 2004.
THE BANK OF NEW YORK
By: /s/ Remo J. Reale
------------------------------------
Name: Remo J. Reale
Title: Vice President
3
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
2003, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency
and coin.. $3,752,987
Interest-bearing balances ................................ 7,153,561
Securities:
Held-to-maturity securities............................... 260,388
Available-for-sale securities............................. 21,587,862
Federal funds sold in domestic offices....................... 165,000
Securities purchased under agreements to
resell.................................................... 2,804,315
Loans and lease financing receivables:
Loans and leases held for sale............................ 557,358
Loans and leases, net of unearned
income........................................36,255,119
LESS: Allowance for loan and
lease losses.....................................664,233
Loans and leases, net of unearned
income and allowance.................................... 35,590,886
Trading Assets............................................... 4,892,480
Premises and fixed assets (including capitalized
leases)................................................... 926,789
Other real estate owned...................................... 409
Investments in unconsolidated subsidiaries and
associated companies...................................... 277,788
Customers' liability to this bank on acceptances
outstanding............................................... 144,025
Intangible assets
Goodwill.................................................. 2,635,322
Other intangible assets................................... 781,009
Other assets................................................. 7,727,722
-----------
Total assets................................................. $89,257,901
===========
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
Deposits:
In domestic offices....................................... $33,763,250
Noninterest-bearing..........................14,511,050
Interest-bearing.............................19,252,200
In foreign offices, Edge and Agreement
subsidiaries, and IBFs.................................. 22,980,400
Noninterest-bearing.............................341,376
Interest-bearing.............................22,639,024
Federal funds purchased in domestic
offices.................................................... 545,681
Securities sold under agreements to repurchase............... 695,658
Trading liabilities.......................................... 2,338,897
Other borrowed money:
(includes mortgage indebtedness and obligations
under capitalized leases)................................. 11,078,363
Bank's liability on acceptances executed and
outstanding............................................... 145,615
Subordinated notes and debentures............................ 2,408,665
Other liabilities............................................ 6,441,088
-----------
Total liabilities............................................ $80,397,617
===========
Minority interest in consolidated
subsidiaries.............................................. 640,126
EQUITY CAPITAL
Perpetual preferred stock and related
surplus................................................... 0
Common stock................................................. 1,135,284
Surplus...................................................... 2,077,255
Retained earnings............................................ 4,955,319
Accumulated other comprehensive income....................... 52,300
Other equity capital components.............................. 0
Total equity capital......................................... 8,220,158
-----------
Total liabilities minority interest and equity capital. 89,257,901
===========
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
]
Thomas A. Renyi ] Directors
Gerald L. Hassell ]
Alan R. Griffith ]
EXHIBIT 25(f)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification Number)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TXU CORP.
(Exact name of obligor as specified in its charter)
Texas 75-2669310
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Energy Plaza, 1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
-----------------
TXU Corp. Guarantee with Respect to TXU Capital IV Preferred Trust Securities*
(Title of the indenture securities)
*Specific title(s) to be determined in connection with the issuance(s) of
TXU Capital IV Preferred Trust Securities.
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington,
D.C. 20429
New York Clearing House Association New York, N.Y. 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. - A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed as Exhibit 25(a) to Registration Statement
No. 333-102200.)
6. - The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
2
NOTE
Inasmuch as this Form T-1 is being filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 4th day of May, 2004.
THE BANK OF NEW YORK
By: /s/ Remo J. Reale
------------------------------------
Name: Remo J. Reale
Title: Vice President
3
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
2003, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency
and coin.. $3,752,987
Interest-bearing balances ................................ 7,153,561
Securities:
Held-to-maturity securities............................... 260,388
Available-for-sale securities............................. 21,587,862
Federal funds sold in domestic offices....................... 165,000
Securities purchased under agreements to
resell.................................................... 2,804,315
Loans and lease financing receivables:
Loans and leases held for sale............................ 557,358
Loans and leases, net of unearned
income........................................36,255,119
LESS: Allowance for loan and
lease losses.....................................664,233
Loans and leases, net of unearned
income and allowance.................................... 35,590,886
Trading Assets............................................... 4,892,480
Premises and fixed assets (including capitalized
leases)................................................... 926,789
Other real estate owned...................................... 409
Investments in unconsolidated subsidiaries and
associated companies...................................... 277,788
Customers' liability to this bank on acceptances
outstanding............................................... 144,025
Intangible assets
Goodwill.................................................. 2,635,322
Other intangible assets................................... 781,009
Other assets................................................. 7,727,722
-----------
Total assets................................................. $89,257,901
===========
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
Deposits:
In domestic offices....................................... $33,763,250
Noninterest-bearing..........................14,511,050
Interest-bearing.............................19,252,200
In foreign offices, Edge and Agreement
subsidiaries, and IBFs.................................. 22,980,400
Noninterest-bearing.............................341,376
Interest-bearing.............................22,639,024
Federal funds purchased in domestic
offices.................................................... 545,681
Securities sold under agreements to repurchase............... 695,658
Trading liabilities.......................................... 2,338,897
Other borrowed money:
(includes mortgage indebtedness and obligations
under capitalized leases)................................. 11,078,363
Bank's liability on acceptances executed and
outstanding............................................... 145,615
Subordinated notes and debentures............................ 2,408,665
Other liabilities............................................ 6,441,088
-----------
Total liabilities............................................ $80,397,617
===========
Minority interest in consolidated
subsidiaries.............................................. 640,126
EQUITY CAPITAL
Perpetual preferred stock and related
surplus................................................... 0
Common stock................................................. 1,135,284
Surplus...................................................... 2,077,255
Retained earnings............................................ 4,955,319
Accumulated other comprehensive income....................... 52,300
Other equity capital components.............................. 0
Total equity capital......................................... 8,220,158
-----------
Total liabilities minority interest and equity capital. 89,257,901
===========
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
]
Thomas A. Renyi ] Directors
Gerald L. Hassell ]
Alan R. Griffith ]
EXHIBIT 25(g)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification Number)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
TXU CORP.
(Exact name of obligor as specified in its charter)
Texas 75-2669310
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Energy Plaza, 1601 Bryan Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
-----------------
Stock Purchase Contracts and Stock Purchase Units*
(Title of the indenture securities)
*Specific title(s) to be determined in connection with the issuance(s) of
TXU Corp. Stock Purchase Contracts and Stock Purchase Units.
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington,
D.C. 20429
New York Clearing House Association New York, N.Y. 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. - A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed as Exhibit 25(a) to Registration Statement
No. 333-102200.)
6. - The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
2
NOTE
Inasmuch as this Form T-1 is being filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 4th day of May, 2004.
THE BANK OF NEW YORK
By: /s/ Remo J. Reale
------------------------------------
Name: Remo J. Reale
Title: Vice President
3
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
2003, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency
and coin.. $3,752,987
Interest-bearing balances ................................ 7,153,561
Securities:
Held-to-maturity securities............................... 260,388
Available-for-sale securities............................. 21,587,862
Federal funds sold in domestic offices....................... 165,000
Securities purchased under agreements to
resell.................................................... 2,804,315
Loans and lease financing receivables:
Loans and leases held for sale............................ 557,358
Loans and leases, net of unearned
income........................................36,255,119
LESS: Allowance for loan and
lease losses.....................................664,233
Loans and leases, net of unearned
income and allowance.................................... 35,590,886
Trading Assets............................................... 4,892,480
Premises and fixed assets (including capitalized
leases)................................................... 926,789
Other real estate owned...................................... 409
Investments in unconsolidated subsidiaries and
associated companies...................................... 277,788
Customers' liability to this bank on acceptances
outstanding............................................... 144,025
Intangible assets
Goodwill.................................................. 2,635,322
Other intangible assets................................... 781,009
Other assets................................................. 7,727,722
-----------
Total assets................................................. $89,257,901
===========
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
Deposits:
In domestic offices....................................... $33,763,250
Noninterest-bearing..........................14,511,050
Interest-bearing.............................19,252,200
In foreign offices, Edge and Agreement
subsidiaries, and IBFs.................................. 22,980,400
Noninterest-bearing.............................341,376
Interest-bearing.............................22,639,024
Federal funds purchased in domestic
offices.................................................... 545,681
Securities sold under agreements to repurchase............... 695,658
Trading liabilities.......................................... 2,338,897
Other borrowed money:
(includes mortgage indebtedness and obligations
under capitalized leases)................................. 11,078,363
Bank's liability on acceptances executed and
outstanding............................................... 145,615
Subordinated notes and debentures............................ 2,408,665
Other liabilities............................................ 6,441,088
-----------
Total liabilities............................................ $80,397,617
===========
Minority interest in consolidated
subsidiaries.............................................. 640,126
EQUITY CAPITAL
Perpetual preferred stock and related
surplus................................................... 0
Common stock................................................. 1,135,284
Surplus...................................................... 2,077,255
Retained earnings............................................ 4,955,319
Accumulated other comprehensive income....................... 52,300
Other equity capital components.............................. 0
Total equity capital......................................... 8,220,158
-----------
Total liabilities minority interest and equity capital. 89,257,901
===========
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
]
Thomas A. Renyi ] Directors
Gerald L. Hassell ]
Alan R. Griffith ]
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