EXHIBIT 4(h)
FORM OF PURCHASE CONTRACT AGREEMENT
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TXU CORP.
AND
THE BANK OF NEW YORK,
as Purchase Contract Agent
and Trustee
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FORM OF PURCHASE CONTRACT AGREEMENT
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DATED AS OF______ , _____
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Other Provisions of General Application
SECTION 1.1. Definitions....................................................1
SECTION 1.2. Compliance Certificates and Opinions...........................9
SECTION 1.3. Form of Documents Delivered to Agent..........................10
SECTION 1.4. Acts of Holders; Record Date..................................10
SECTION 1.5. Notices.......................................................11
SECTION 1.6. Notice to Holders; Waiver.....................................12
SECTION 1.7. Effect of Headings and Table of Contents......................13
SECTION 1.8. Successors and Assigns........................................13
SECTION 1.9. Separability Clause...........................................13
SECTION 1.10. Benefits of Agreement.........................................13
SECTION 1.11. Governing Law.................................................13
SECTION 1.12. Legal Holidays................................................13
SECTION 1.13. Counterparts..................................................14
SECTION 1.14. Inspection of Agreement.......................................14
ARTICLE II
Certificate Forms
SECTION 2.1. Forms of Certificates Generally...............................14
SECTION 2.2. Form of Agent's Certificate of Authentication.................15
ARTICLE III
The Securities
SECTION 3.1. Title and Terms; Denominations................................15
SECTION 3.2. Rights and Obligations Evidenced by the Certificates..........15
SECTION 3.3. Execution, Authentication, Delivery and Dating................16
SECTION 3.4. Temporary Certificates........................................16
SECTION 3.5. Registration; Registration of Transfer and Exchange...........17
SECTION 3.6. Book-Entry Interests..........................................18
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............19
SECTION 3.11. Persons Deemed Owners.........................................20
SECTION 3.12. Cancellation..................................................21
SECTION 3.13. Establishment or Reestablishment of Type B Securities.........21
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SECTION 3.14. Establishment or Reestablishment of Type A Securities.........23
SECTION 3.15. Transfer of Collateral upon Occurrence of Termination Event...24
SECTION 3.16. No Consent to Assumption......................................25
ARTICLE IV
The Debt Securities
SECTION 4.1. Payment of Interest; Rights to Interest Preserved; Interest
Rate Reset; Notice............................................25
SECTION 4.2. Notice and Voting.............................................26
SECTION 4.3. Tax Event Redemption..........................................27
[SECTION 4.4. Consent to Treatment for Tax Purposes.........................27
ARTICLE V
The Purchase Contracts
SECTION 5.1. Purchase of Shares of Common Stock............................27
SECTION 5.2. Contract Adjustment Payments..................................29
SECTION 5.3. Deferral of Payment Dates For Contract Adjustment Payments....29
SECTION 5.4. Payment of Purchase Price.....................................30
SECTION 5.5. Issuance of Shares of Common Stock............................34
SECTION 5.6. Adjustment of Settlement Rate.................................35
SECTION 5.7. Notice of Adjustments and Certain Other Events................39
SECTION 5.8. Termination Event; Notice.....................................40
SECTION 5.9. Early Settlement..............................................40
SECTION 5.10. No Fractional Shares..........................................42
SECTION 5.11. Charges and Taxes.............................................42
ARTICLE VI
Remedies
SECTION 6.1. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock..............43
SECTION 6.2. Restoration of Rights and Remedies............................43
SECTION 6.3. Rights and Remedies Cumulative................................43
SECTION 6.4. Delay or Omission Not Waiver..................................43
SECTION 6.5. Undertaking for Costs.........................................43
SECTION 6.6. Waiver of Stay or Extension Laws..............................44
ARTICLE VII
The Agent
SECTION 7.1. Certain Duties and Responsibilities...........................44
SECTION 7.2. Notice of Default.............................................45
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SECTION 7.3. Certain Rights of Agent.......................................45
SECTION 7.4. Not Responsible for Recitals or Issuance of Securities........46
SECTION 7.5. May Hold Securities...........................................46
SECTION 7.6. Money Held in Custody.........................................46
SECTION 7.7. Compensation and Reimbursement................................47
SECTION 7.8. Corporate Agent Required; Eligibility.........................47
SECTION 7.9. Resignation and Removal; Appointment of Successor.............48
SECTION 7.10. Acceptance of Appointment by Successor........................49
SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business...49
SECTION 7.12. Preservation of Information; Communications to Holders........49
SECTION 7.13. No Obligations of Agent.......................................50
SECTION 7.14. Tax Compliance................................................50
ARTICLE VIII
Supplemental Agreements
SECTION 8.1. Supplemental Agreements Without Consent of Holders............50
SECTION 8.2. Supplemental Agreements with Consent of Holders...............51
SECTION 8.3. Execution of Supplemental Agreements..........................52
SECTION 8.4. Effect of Supplemental Agreements.............................52
SECTION 8.5. Reference to Supplemental Agreements..........................52
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
SECTION 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions......................53
SECTION 9.2. Rights and Duties of Successor Corporation....................53
SECTION 9.3. Opinion of Counsel Given to Agent.............................53
ARTICLE X
Covenants
SECTION 10.1. Performance Under Purchase Contracts..........................54
SECTION 10.2. Maintenance of Office or Agency...............................54
SECTION 10.3. Company to Reserve Common Stock...............................54
SECTION 10.4. Covenants as to Common Stock..................................55
ARTICLE XI
Trust Indenture Act
SECTION 11.1. Trust Indenture Act; Application..............................55
SECTION 11.2. Lists of Holders of Securities................................55
SECTION 11.3. Reports by the Agent..........................................55
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SECTION 11.4. Periodic Reports to Agent.....................................55
SECTION 11.5. Evidence of Compliance with Conditions Precedent..............56
SECTION 11.6. Defaults; Waiver..............................................56
SECTION 11.7. Agent's Knowledge of Defaults.................................56
SECTION 11.8. Conflicting Interests.........................................56
SECTION 11.9. Direction of Agent............................................57
EXHIBIT A Form of Type A Certificate
EXHIBIT B Form of Type B Certificate
EXHIBIT C Instruction to Collateral Agent
EXHIBIT D Instruction to Purchase Contract Agent
EXHIBIT E Notice to Settle with Separate Cash
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FORM OF 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;
(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.
"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 MARKET VALUE" has the meaning specified in Section 5.1.
"APPLICABLE OWNERSHIP INTEREST" means __________________________.
"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 ▇▇▇ ▇▇▇▇ ▇▇▇▇ (▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇) are
permitted or required by any applicable law to close.
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"CASH SETTLEMENT" has the meaning set forth in Section 5.4(a)(i).
"CERTIFICATE" means a Type A Certificate or a Type B Certificate.
"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 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" has the meaning specified in Section 3.13.
"COMMON STOCK" means the Common Stock, without par value, of the Company.
"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 fee payable by the Company in
respect of each Purchase Contract issued in connection with Type B Securities,
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 principal corporate trust office of the
Agent at which, at any particular time, its corporate trust business shall be
administered, which office at the date hereof is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"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).
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"DEBT SECURITIES" means the series of debt securities of the Company
designated the ___% Series ___ Senior Notes due ______, _______ , to be issued
under the Indenture as of the date hereof.
"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" has the meaning specified in Section 5.4(b).
"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 an Type A Certificate and/or a Type B Certificate
is registered on the related Type A Register and/or the Type B Register, as the
case may be.
"INDENTURE" means the Indenture 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, or any successor thereto.
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"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 SECURITIES," with respect to any Type A Securities and Type B
Securities means, as of the date of determination, all Type A Securities or Type
B Securities evidenced by Certificates theretofore authenticated, executed and
delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Type B Securities and (B)
Type A Securities for which the Stated Amount of the related Debt Security
or the appropriate Applicable Ownership Interest in the Treasury Portfolio
has been theretofore deposited with the Agent in trust for the Holders of
such Type A Securities;
(ii) Type A Securities and Type B Securities 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) Type A Securities and Type B Securities 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 Type A
Securities or Type B Securities evidenced by such Certificate are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Type A Securities or Type B Securities have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, Type A Securities or Type B Securities 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 Type A Securities or Type B
Securities which a Responsible Officer of the Agent knows to be so owned
shall be so disregarded. Type A Securities or Type B Securities 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 Type A Securities or Type B
Securities and that the pledgee is not the Company or any Affiliate of the
Company.
"PAYMENT DATE" means each ____________, ___________, __________ and
__________, commencing _____________, _____.
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"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.
"PERMITTED INVESTMENTS" has the meaning set forth in Section 1 of the
Pledge Agreement.
"PLEDGE" means the pledge under the Pledge Agreement of the Debt
Securities, the Treasury Securities or the appropriate Applicable Ownership
Interest in the 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, the collateral
agent, the custodial agent and the securities intermediary.
"PREDECESSOR CERTIFICATE" means a Predecessor Type A Certificate or a
Predecessor Type B Certificate.
"PREDECESSOR TYPE A CERTIFICATE" of any particular Type A Certificate means
every previous Type A Certificate evidencing all or a portion of the rights and
obligations of the Company and the Holder under the Type A Security evidenced
thereby; and, for the purposes of this definition, any Type A Certificate
authenticated and delivered under Section 3.10 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Type A Certificate shall be deemed to
evidence the same rights and obligations of the Company and the Holder as the
mutilated, destroyed, lost or stolen Type A Certificate.
"PREDECESSOR TYPE B CERTIFICATE" of any particular Type B Certificate means
every previous Type B Certificate evidencing all or a portion of the rights and
obligations of the Company and the Holder under the Type B Securities evidenced
thereby; and, for the purposes of this definition, any Type B Certificate
authenticated and delivered under Section 3.10 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Type B Certificate shall be deemed to
evidence the same rights and obligations of the Company and the Holder as the
mutilated, destroyed, lost or stolen Type B Certificate.
"PRIMARY TREASURY DEALER" means a primary U.S. government securities dealer
in New York City.
"PROCEEDS" has the meaning set forth in Section 1 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 to (i) sell
and the Holder of such Security to purchase Common Stock and (ii) pay the Holder
Contract Adjustment Payments, if any, on the terms and subject to the conditions
set forth in Article Five hereof.
"PURCHASE CONTRACT SETTLEMENT DATE" means ________________________________.
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"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).
"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 less 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 ____________________________.
"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 Type A Register and the Type B Register.
"REGISTRAR" means the Type A Registrar and the Type B Registrar.
"REMARKETING AGENT" has the meaning specified in Section 5.4.
"REMARKETING AGREEMENT" means a Remarketing Agreement dated _____, _____ by
and between the Company, the Trust, the Remarketing Agent and the Purchase
Contract Agent, including any supplements thereto.
"REMARKETING FEE" has the meaning specified in Section 5.4.
"REORGANIZATION EVENT" has the meaning specified in Section 5.6(b).
"RESET RATE" means _______________________.
"RESET ANNOUNCEMENT DATE" means _____________________________.
"RESPONSIBLE OFFICER," when used with respect to the Agent, means any
officer of the Agent assigned by the Agent to administer its corporate trust
matters.
"SECURITY" means a Type A Security or a Type B Security.
"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 $___.
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"TAX EVENT" means ________________________.
"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 or more than 60 days notice.
"TAX EVENT REDEMPTION DATE" means the date on which a Tax Event Redemption
is to occur.
"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.
"TREASURY PORTFOLIO" means _________________________________.
"TREASURY SECURITY" means ______________________________.
"TYPE A CERTIFICATE" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Type A Securities specified
on such certificate.
"TYPE A REGISTER" and "TYPE A REGISTRAR" have the respective meanings
specified in Section 3.5.
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"TYPE A SECURITY" means the collective rights and obligations of a Holder
of a Type A Certificate in respect of a Debt Security or an appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
subject in each case to the Pledge thereof, and the related Purchase Contract.
"TYPE B CERTIFICATE" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Type B Security specified on
such certificate.
"TYPE B REGISTER" and "TYPE B REGISTRAR" have the respective meanings
specified in Section 3.5.
"TYPE B SECURITY" means, following the substitution of one or more Treasury
Securities for Debt Securities or for the Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, as collateral to secure a holder's
obligations under a Purchase Contract, the collective rights and obligations of
a holder of a Type B Certificate in respect of such Treasury Securities, subject
in each case to the Pledge thereof, and the related Purchase Contract.
"TWO-YEAR BENCHMARK TREASURY" means ______________________________.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated _______,
_____ 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 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;
(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;
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(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 DATE.
(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 Type A Register or
the Type B 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.
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 Type A Securities and the Outstanding Type B
Securities, 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 Type A Securities or
the Type B Securities 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,
11
(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,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Vice President,
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, Dallas, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, 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 ______________________, 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, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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.
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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.
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 Type A
Certificates or the Type B 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 any Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement, the
Type A Certificates or the Type B 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.
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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.
ARTICLE II
CERTIFICATE FORMS
SECTION 2.1. FORMS OF CERTIFICATES GENERALLY.
The Type A Certificates (including the form of Purchase Contract forming
part of the Type A Securities 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 Type A Securities are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Type A Certificates, as evidenced by their execution of
the Type A Certificates.
The definitive Type A 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 Type A Securities
evidenced by such Type A Certificates, consistent with the provisions of this
Agreement, as evidenced by their execution thereof.
The Type B Certificates (including the form of Purchase Contracts forming
part of the Type B Securities 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 Type B Securities may be listed or any
depositary therefor, or as may, consistently herewith, be determined by the
officers of the Company executing such Type B Certificates, as evidenced by
their execution of the Type B Certificates.
The definitive Type B 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 Type B Securities
evidenced by such Type B 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
14
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 Type A
Securities shall be in substantially the form set forth on the form of the Type
A Certificates.
The form of the Agent's certificate of authentication of the Type B
Securities shall be in substantially the form set forth on the form of the Type
B Certificates.
ARTICLE III
THE SECURITIES
SECTION 3.1. TITLE AND TERMS; DENOMINATIONS.
The aggregate number of Type A Securities and Type B Securities evidenced
by Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to _______________ 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 Type A Security or Type B Security and any integral
multiple thereof.
SECTION 3.2. RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES.
Each Type A Certificate shall evidence the number of Type A Securities
specified therein, with each such Type A Security representing the ownership by
the Holder thereof of a beneficial interest in a Debt Security or the Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, subject to the
Pledge of such Debt Security or the Applicable Ownership Interest in the
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 Type A Security shall pledge, pursuant to the Pledge
Agreement, the Debt Security or the Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, forming a part of such Type A Security,
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 the
Applicable Ownership Interest in the Treasury Portfolio, as the case may be, for
the benefit of the Company, to secure the obligation of the Holder under each
Purchase Contract to purchase the Common Stock of the Company.
Each Type B Certificate shall evidence the number of Type B Securities
specified therein, with each such Type B Security representing the ownership by
the Holder thereof of a [1/100] undivided beneficial interest in a Treasury
15
Security with a principal amount equal to [$1,000] 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.
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
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 or 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 Type A Securities or Type B Securities 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.
16
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 Type A Securities or Type B Securities, 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 Type A Securities or Type
B Securities, as the case may be, evidenced thereby as definitive Certificates.
SECTION 3.5. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
The Agent shall keep at the Corporate Trust Office a register (the "Type A
Register") in which, subject to such reasonable regulations as it may prescribe,
the Agent shall provide for the registration of Type A Certificates and of
transfers of Type A Certificates (the Agent, in such capacity, the "Type A
Registrar") and a register (the "Type B Register") in which, subject to such
reasonable regulations as it may prescribe, the Agent shall provide for the
registration of the Type B Certificates and transfers of Type B Certificates
(the Agent, in such capacity, the "Type B 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 Type A Securities or Type B Securities,
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
Type A Securities or Type B Securities, 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 Type A Securities
or Type B Securities, as the case may be, and be entitled to the same benefits
and subject to the same obligations, under this Agreement as the Type A
Securities or Type B Securities, 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 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.
17
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 shall not be obligated to
execute and deliver to the Agent, and the Agent shall 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 during the
period commencing on the Business Day immediately preceding a Purchase Contract
Settlement Date and ending on such 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 Type A Securities, if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the aggregate Stated Amount of the
Debt Securities or the Treasury Portfolio, as applicable, evidenced thereby, or
(iii) in the case of Type B Securities, 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 Five 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
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
18
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 Securities
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 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 Type A Securities or Type B
Securities, 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 Type A Securities
or Type B Securities, as the case may be, and bearing a Certificate number not
contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Certificate during the period commencing on the Business Day immediately
19
preceding a Purchase Contract Date and ending on such 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 applicable portion 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 appropriate
Applicable Ownership Interest in the 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 the payment by 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.
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 as the owner of the Type A
Securities or Type B Securities evidenced thereby, for the purpose of receiving
interest on the Debt Securities or distributions on the maturing quarterly
interest strips of the 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 Type A Securities or Type B Securities 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,
20
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 appropriate Applicable Ownership Interest in the 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 Type A Security 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 TYPE B SECURITIES.
A Holder may separate the Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as applicable, from the related
Purchase Contracts in respect of a Type A Security by substituting for such Debt
Securities or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, Treasury Securities in an aggregate principal
amount equal to the aggregate principal amount of such Debt Securities or for
the aggregate Stated Amount of the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable (a "Collateral Substitution"), at any time from and
after the date of this Agreement and on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date in the case of the
Debt Securities and on or prior to the second Business Day immediately preceding
the Purchase Contract Settlement Date in the case of the appropriate Applicable
Ownership Interest in the Treasury Portfolio, in each case by (a) depositing
with the Collateral Agent Treasury Securities having an aggregate principal
amount equal to the aggregate principal amount of the Debt Securities comprising
part of such Type A Securities or for the aggregate Stated Amount of the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio comprising part of such Type
A Securities, as the case may be, and (b) (i) by delivering cash in an amount
equal to the excess of the Contract Adjustment Payments that would have accrued
since the last Payment Date through the date of substitution on the Type B
Securities being created by the holder, over the Contract Adjustment Payments
that have accrued over the same time period on the related Type A Securities,
which amount the Agent shall promptly remit to the Company, and (ii)
transferring the related Type A Securities to the Agent accompanied by a notice
to the Agent, substantially in the form of Exhibit D hereto, stating that the
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Holder has transferred the relevant amount of Treasury Securities to the
Collateral Agent and requesting that the Agent instruct the Collateral Agent to
release the Debt Securities or the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, underlying such Type A Securities,
whereupon the Agent shall promptly give such instruction to the Collateral
Agent, substantially in the form of Exhibit C hereto. Upon receipt of the
Treasury Securities described in clause (a) above and the instruction described
in clause (b) above, in accordance with the terms of the Pledge Agreement, the
Collateral Agent will release to the Agent, on behalf of the Holder, Debt
Securities or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, having a corresponding aggregate principal amount
of such Debt Securities or aggregate Stated Amount of the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, as the case may be, from the Pledge, free and clear
of the Company's security interest therein, and upon receipt thereof the Agent
shall promptly:
(i) cancel the related Type A Securities;
(ii) transfer the Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, to the
Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Type B Certificate executed by the Company in accordance with Section 3.3
evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Type A Securities.
Holders who elect to separate the Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
from the related Purchase Contract and to substitute Treasury Securities for
such Debt Securities or the appropriate Applicable Ownership Interest in the
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.
Holders may make Collateral Substitutions (i) only in integral multiples of
100 Type A Securities if Debt Securities are being substituted by Treasury
Securities, or (ii) only in integral multiples of _____ Type A Securities if the
appropriate Applicable Ownership Interests of the Treasury Portfolio are being
substituted by Treasury Securities.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Type A Securities or
fails to deliver a Type A Certificate(s) to the Agent after depositing Treasury
Securities with the Collateral Agent, the Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
constituting a part of such Type A Security, and any interest on such Debt
Securities or distributions with respect to the Applicable Ownership Interest in
the 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 Type A
Security is so transferred or the Type A Certificate is so delivered, as the
case may be, or, with respect to a Type A Certificate, such Holder provides
22
evidence satisfactory to the Company and the Agent that such Type A 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 Type A Security remains in effect, such Type A Security
shall not be separable into its constituent parts, and the rights and
obligations of the Holder in respect of the Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be, and
Purchase Contract comprising such Type A Security may be acquired, and may be
transferred and exchanged, only as a Type A Security.
SECTION 3.14. ESTABLISHMENT OR REESTABLISHMENT OF TYPE A SECURITIES.
A Holder of a Type B Security may create or recreate Type A Securities at
any time on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, if a Tax Event Redemption has not occurred,
and (ii) on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date, if a Tax Event Redemption has occurred, in
each case by (a) depositing with the Collateral Agent Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case
may be, having an aggregate principal amount in the case of the Debt Securities,
or an aggregate Stated Amount of the appropriate Applicable Ownership Interest
(as defined in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, equal to the aggregate principal amount of the
Treasury Securities comprising part of the Type B Securities and (b)
transferring the related Type B Securities to the Agent accompanied by a notice
to the Agent, substantially in the form of Exhibit D 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 Agent instruct the Collateral Agent
to release the Treasury Securities underlying such Type B Securities, whereupon
the Agent shall promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit C hereto. Upon receipt of the Debt
Securities or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, described in clause (a) above and the instruction
described in clause (b) 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 Type B Security;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver an
Type A Certificate executed by the Company in accordance with Section 3.3
evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Type B Securities.
Holders who elect to separate Treasury Securities from the related Purchase
Contract and to substitute Debt Securities 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.
23
Holders of Type B Securities may establish or reestablish Type A Securities
in integral multiples of 100 Type B Securities for 100 Type A Securities if a
Tax Event Redemption has not occurred, and in integral multiples of Type B
Securities for Type A Securities if a Tax Event Redemption has occurred.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Type B Securities or
fails to deliver a Type B Certificate(s) to the Agent after depositing Debt
Securities with the Collateral Agent, the Treasury Securities constituting a
part of such Type B Security, 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 Type B Security is so transferred or the Type B Certificate
is so delivered, or, with respect to a Type B Certificate, such Holder provides
evidence satisfactory to the Company and the Agent that such Type B Certificate
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 Type B Security remains in effect, such Type B Security
shall not be separable into its constituent parts and the rights and obligations
of the Holder of such Type B Security in respect of the Treasury Security and
Purchase Contract comprising such Type B Security may be acquired, and may be
transferred and exchanged only as a Type B Security.
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 appropriate Applicable Ownership Interest in the
Treasury Portfolio or the Treasury Securities, as the case may be, underlying
the Type A Securities and the Type B Securities pursuant to the terms of the
Pledge Agreement, the Agent shall request transfer instructions with respect to
such Debt Securities or the appropriate Applicable Ownership Interest in the
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
Type A Register or the Type B Register, as the case may be. Upon book-entry
transfer of the Type A Securities or Type B Securities or delivery of a Type A
Certificate or Type B Certificate to the Agent with such transfer instructions,
the Agent shall transfer the Debt Securities, the Treasury Portfolio or Treasury
Securities, as the case may be, underlying such Type A Securities or Type B
Securities, 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 Type A Securities or Type B Securities fails to effect such transfer
or delivery, the Debt Securities, the appropriate Applicable Ownership Interest
in the Treasury Portfolio or Treasury Securities, as the case may be, underlying
such Type A Securities or Type B Securities, 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 Type A Securities or Type B
Securities are transferred or the Type A Certificate or Type B Certificate is
surrendered or such Holder provides satisfactory evidence that such Type A
Certificate or Type B 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 the Treasury Portfolio or any Treasury Securities, the Purchase Contract
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
24
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, shall 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, its trustee 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 any Debt Securities or distribution with respect
to the appropriate Applicable Ownership Interest in the 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 Type A Certificate (or
one or more Predecessor Type A Certificates) of which such Debt Securities or
the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, is a part is registered at the close of business on the Record Date
for such Payment Date.
Each Type A Certificate evidencing Debt Securities delivered under this
Agreement upon registration of transfer of or in exchange for or in lieu of any
other Type A Certificate shall carry the rights to payment of interest accrued
and unpaid, and to accrue interest, which is carried by the Debt Securities
underlying such other Type A Certificate.
In the case of any Type A Security 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 appropriate Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, underlying such Type A
Securities 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 interests shall, subject to receipt thereof by
the Agent, be payable to the Person in whose name the Type A Certificate (or one
or more Predecessor Type A 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 Type A Securities with respect to which
Cash Settlement or Early Settlement of the underlying Purchase Contract is
effected on the Business Day immediately preceding the Purchase Contract
Settlement Date or an Early Settlement Date, as the case may be, or with respect
25
to which a Collateral Substitution has been effected, payment of interest on the
related Debt Securities or distributions with respect to the appropriate
Applicable Ownership Interest in the 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 Type
A Securities; provided, however, that to the extent that such Holder continues
to hold the separated Debt Securities that formerly comprised a part of such
Holder's Type A Securities, such Holder shall be entitled to receive the payment
of interest on such separated Debt Securities.
The applicable Coupon Rate on the Debt Securities on and after the Purchase
Contract Settlement Date will be reset on the third Business Day immediately
preceding the Purchase Contract Settlement Date to the Reset Rate (such Reset
Rate to be in effect on and after the Purchase Contract Settlement Date). On the
Reset Announcement Date the Reset Spread and the Two-Year Benchmark Treasury to
be used to determine the Reset Rate will be announced by the Company. On the
Business Day immediately following the Reset Announcement Date, the Company will
cause a notice of such Series ___ Reset Spread and Two-Year Benchmark Treasury
to be published in an Authorized Newspaper.
Not later than 7 calendar days nor more than 15 calendar days prior to the
Reset Announcement Date, the Company will notify the DTC or its nominee (or any
successor Clearing Agency or its nominee) by first-class mail, postage prepaid,
to notify the Beneficial Owners or Clearing Agency Participants holding Type A
Securities or Type B Securities, of such Reset Announcement Date and the
procedures to be followed by such Holders of Type Securities A who intend to
settle their obligation under the Purchase Contract with separate cash on the
Purchase Contract Settlement Date.
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 Debt Securities pledged with the Collateral Agent 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 Type A
Securities a notice (a) containing such information as is contained in the
notice or solicitation, (b) stating that each 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 underlying their Type A Securities and (c)
stating the manner in which such instructions may be given. Upon the written
request of the Holders of Type A Securities 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 an Type A Securities, the
Agent shall abstain from voting the Debt Security underlying such Type A
Securities. The Company hereby agrees, if applicable, to solicit Holders of Type
A Securities to timely instruct the Agent in order to enable the Agent to vote
such Debt Securities.
26
SECTION 4.3. TAX EVENT REDEMPTION.
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 Type A Securities the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Agent for payment to the Holders of such Type A Securities. The
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 Type A Security to
purchase the Common Stock of the Company under the Purchase Contract
constituting a part of such Type A Security. Following the occurrence of a Tax
Event Redemption prior to the Purchase Contract Settlement Date, the Holders of
Type A Securities and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Treasury Portfolio as the Holder of
Type A Securities and the Collateral Agent had in respect of the Debt Security
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 Treasury Portfolio. The Company may cause to be
made in any Type A Certificates thereafter to be issued such change in
phraseology and form (but not in substance) as may be appropriate to reflect the
liquidation of the Trust and the substitution of the Treasury Portfolio for Debt
Securities as collateral.
[SECTION 4.4. CONSENT TO TREATMENT FOR TAX PURPOSES.
Each Holder of a Type A or Type B Securities, 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 Type A Securities, or (ii) the Treasury
Securities, in the case of the Type B Securities. Each Holder of Type A
Securities, 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 an Early Settlement has occurred in
accordance with Section 5.9 hereof, obligate the Holder of the related Security
to purchase, and the Company to sell, on the Purchase Contract Settlement Date
at a price equal to the Stated Amount (the "Purchase Price"), a number of newly
issued shares of Common Stock equal to the Settlement Rate unless, on or prior
to the Purchase Contract Settlement Date, there shall have occurred a
Termination Event with respect to the Security of which such Purchase Contract
is a part. 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
27
Price, but is greater than $ ______, the number of shares of Common Stock equal
to the Stated Amount 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
[1/10,000th] 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 20 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 NYSE. 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 and (B) has traded at
least once on the national or regional securities exchange or association that
is the primary market for the trading of the Common Stock.
Each Holder of a Type A Security or a Type B Security, 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 as its attorney-in-fact 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 Portfolio
or the Treasury Securities pursuant to the Pledge Agreement; provided that upon
a Termination Event, the rights of the Holder of such Security under the
Purchase Contract may be enforced without regard to any other rights or
obligations. Each Holder of a Type A Security or a Type B Security, 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 Stated Amount of the Debt Securities
or the Proceeds of the Treasury Securities or the 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), 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.
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SECTION 5.2. CONTRACT ADJUSTMENT PAYMENTS.
Subject to Section 5.3 herein, the Company shall pay, on each 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 at the close of business on the Record Date next preceding such
Payment Date. The Contract Adjustment Payments will be payable at the office of
the Agent in The City of New York maintained for that purpose 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 Type A Register or Type B Register.
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 (including as a result of a
Collateral Substitution or the re-establishment of a Type A Security) any other
Certificate 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.
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 be paid to the
Person in whose name the Certificate evidencing such Security (or one or more
Predecessor Certificates) is 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,
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. Any
Contract Adjustment Payments so deferred shall bear additional Contract
Adjustment Payments thereon at the rate of ______ % per annum (computed on the
29
basis of 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 together with the additional Contract Adjustment Payments
accrued thereon, being referred to herein as the "Deferred Contract Adjustment
Payments"). Deferred Contract Adjustment Payments shall be due on the next
succeeding Payment Date except to the extent that payment is deferred pursuant
to this Section. 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
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 or acquisitions
of shares of capital stock of the Company in connection with the satisfaction by
the Company of its obligations under any employee 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
capital stock of the Company, (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 such 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 or redemptions of capital stock solely from the issuance
or exchange of capital stock or (v) redemptions or repurchases of any rights
outstanding under a shareholder rights plan or the declaration thereunder of a
dividend of rights in the future).
SECTION 5.4. PAYMENT OF PURCHASE PRICE.
(a) (i) Unless a Tax Event Redemption has occurred or a Holder 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 Type A
Security must notify the Agent by use of a notice in substantially the form of
Exhibit E hereto of its intention to pay in cash ("Cash Settlement") the
Purchase Price for the shares of Common Stock to be purchased pursuant to a
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Purchase Contract. Such 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 Type A Security 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 Type A Security fails to notify the Agent of
its intention to make a Cash Settlement in accordance with paragraph (a)(i)
above, such failure shall constitute an event of default 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 Type A Security 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.
(b) In order to dispose of the Debt Securities of Type A Security Holders
who have not notified the Agent of their intention to effect a Cash Settlement
as provided in paragraph (a)(i) above, the Company shall engage a nationally
recognized investment bank (the "Remarketing Agent") pursuant to the Remarketing
Agreement to sell such Debt Securities. In order to facilitate the remarketing,
the Agent shall notify, by 10:00 a.m., New York City time, on the fourth
Business Day immediately preceding the Purchase Contract Settlement Date, the
Remarketing Agent 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
Agent. Upon receipt of such notice from the Agent and such Debt Securities from
the Collateral Agent, the Remarketing Agent will, on the third Business Day
immediately preceding the Purchase Contract Settlement Date, use its 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 as the remarketing fee
("Remarketing Fee") an amount not exceeding [25] basis points [(.25%)] of the
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aggregate principal amount of the remarketed Debt Securities from any amount of
such proceeds in excess of the aggregate principal amount of the remarketed Debt
Securities plus accrued and unpaid interest (including any deferred interest),
if any, then the Remarketing Agent will remit the entire amount 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 Type A Security 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 Type A Security. Type A Security
Holders whose Debt Securities are so remarketed will not otherwise be
responsible for the payment of any Remarketing Fee in connection therewith. If,
in spite of using its reasonable efforts, the Remarketing Agent cannot remarket
the related Debt Securities of such Holders of Type A Securities at a price not
less than [100%] of the aggregate principal amount of such Debt Securities plus
accrued and unpaid interest (including deferred interest), if any, the
remarketing will be deemed to have failed (a "Failed Remarketing") and 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 (including any deferred interest) on
such Debt Securities will become payable by the Company to the Agent for payment
to the Holder of the Type A Securities to which such Debt Securities relates.
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 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 Second 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 the Debt
Securities in full satisfaction of the Holders' obligations under the Purchase
Contracts or (ii) sell the Debt Securities in one or more public or private
sales.
(d) (i) Unless a Holder of Type B Securities or Type A Securities (if a Tax
Event Redemption has occurred) 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 Type B Security or Type A Security
(if a Tax Event Redemption has occurred) must notify the Agent by use of a
notice in substantially the form of Exhibit E hereto of its intention to pay in
cash the Purchase Price for the shares of Common Stock to be purchased pursuant
to the applicable portion of the Purchase Contract on or prior to 5:00 p.m., New
York City time, on the second Business Day immediately preceding the Purchase
Contract Settlement Date.
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(ii) A Holder of a Type B Security or Type A Security (if a Tax Event
Redemption has occurred) 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 Type B Security fails to notify the Agent of
its intention to make a Cash Settlement in accordance with paragraph (d)(i)
above, or if a Holder of a Type A Security (if a Tax Event Redemption has
occurred) does notify the Agent as provided in paragraph (d)(i) above its
intention to pay the Purchase Price in cash, but fails to make such payment
as required by paragraph (d)(ii) above, then upon the maturity of the
Pledged Treasury Securities or the appropriate Applicable Ownership
Interest in the 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 appropriate Applicable Ownership Interest in the 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 appropriate Applicable Ownership Interest in the
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 Type B Security or Type A Security when received.
(e) Any distribution to Holders of excess funds and interest described
above, shall be payable at the office of the Agent in The City of New York
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) Unless a Holder settles the underlying Purchase Contract through the
early delivery of cash to the Collateral Agent in the manner described herein,
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.
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(g) Upon Cash Settlement of any Purchase Contract, (i) the Collateral Agent
will in accordance with the terms of the Pledge Agreement cause the Pledged Debt
Securities or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, or the Pledged Treasury Securities 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 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 Securities or
the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, or such Treasury Securities (or, if no such instructions are given
to the Agent by the Holder, the Agent shall hold such Debt Securities or the
Treasury Portfolio, as the case may be, or such Treasury Securities, 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 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
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 or an Early Settlement shall have occurred, on
the Purchase Contract Settlement Date, upon its 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 Five (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 the 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
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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
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 a dividend reinvestment 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.
35
(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, 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 determination shall be conclusive and described in a Board
Resolution filed with the Agent) 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 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
36
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) 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, 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 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 (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
37
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 on such exchange or in such market without the
right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate, shall be calculated to the
nearest [1/10,000th] of a share of Common Stock (or if there is not a nearest
[1/10,000th] of a share to the next lower [1/10,000th] 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)
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
38
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 such
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 to which such sale or transfer 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:
(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
39
(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 Deferred Contract Adjustment Payments, if the Company shall have
such obligation, and the rights and obligations of 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 and after the occurrence of a Termination Event, the Securities shall
thereafter represent the right to receive the Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
forming a part of such Securities in the case of Type A Securities, or Treasury
Securities in the case of Type B Securities, in accordance with the provisions
of Section 4.3 of the Pledge Agreement. 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 Register.
SECTION 5.9. EARLY SETTLEMENT.
(a) Subject to and upon compliance with the provisions of this Section 5.9,
at the option of the Holder thereof, Purchase Contracts underlying Securities,
having an aggregate Stated Amount equal to [$1,000] or an integral multiple
thereof, may be settled early ("Early Settlement") in the case of Type A
Securities (unless a Tax Event Redemption has occurred) on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date and in
the case of Type B Securities on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, in each case, as provided
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herein; provided however, that if a Tax Event Redemption has occurred and the
Treasury Portfolio has become a component of the Type A Securities, Purchase
Contracts underlying Type A Securities may be settled early, on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date,
but only in an aggregate amount of $__________ or in an integral multiple
thereof. In order to exercise the right to effect 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 on the reverse thereof duly completed and accompanied by payment
(payable to the Company in immediately available funds in an amount (the "Early
Settlement Amount") equal to (i) the product of (A) the Stated Amount times (B)
the number of Purchase Contracts with respect to which the Holder has elected to
effect Early Settlement 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 sum of (x) the Contract Adjustment Payments payable
on such Payment Date with respect to such Purchase Contracts plus (y) in the
case of Type A Certificate, the payment of interest on the related Debt
Securities payable on such 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. If the foregoing requirements are first satisfied with respect
to Purchase Contracts underlying any Securities at or prior to 5:00 p.m., New
York City time, on a Business Day, such day shall be the "Early Settlement Date"
with respect to such Securities and if such requirements are first satisfied
after 5:00 p.m., New York City time, on a Business Day or on a day that is not a
Business Day, the "Early Settlement Date" with respect to such Securities shall
be the next succeeding Business Day.
(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, _______ shares of Common Stock on account of each Purchase Contract as
to which Early Settlement is effected (the "Early Settlement Rate"); 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. 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 appropriate Applicable Ownership Interest in
the Treasury Portfolio, in the case of Type A Securities, or the related
Treasury Securities, in the case of Type B Securities, 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
appropriate Applicable Ownership Interest in the Treasury Portfolio or Treasury
Securities, as the case may be, from the Collateral Agent, as applicable, the
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Agent shall, in accordance with the instructions provided by the Holder thereof
on the applicable form of Election to Settle Early on the reverse of 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 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 value of such fractional shares times the Applicable
Market Value. 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.
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ARTICLE VI
REMEDIES
SECTION 6.1. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE CONTRACT
ADJUSTMENT PAYMENTS AND TO PURCHASE COMMON STOCK.
In the event that Contract Adjustment Payments shall constitute a component
of Type A Securities or Type B Securities, the Holder of any Type A Security or
Type B Security 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 to 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 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 Type A Securities
or Type B Securities, by its acceptance of such Type A Securities or Type B
Securities shall be deemed to have agreed, that any court may in its discretion
43
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, if any, 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
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 the Pledge 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.
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(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 and deliver 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
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 the 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 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
45
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; and
(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.
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
46
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 (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.
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.
SECTION 7.8. CORPORATE AGENT REQUIRED; ELIGIBILITY.
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
47
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 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.
48
(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 Trust Indenture Act, the Agent and the Company
shall in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
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
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.
49
(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 Five 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 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.
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:
50
(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 Type A Securities to substitute
the Treasury Securities for the Pledged Debt Securities or the rights of holders
of Type B Securities to substitute Debt Securities 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;
(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
51
Common Stock upon settlement of any Purchase Contract, change the Purchase
Contract Settlement Date 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 Type A Securities or the Type B Securities, then only the
affected class of Holders as of the record date for the Holders entitled to vote
thereon will be entitled to vote on 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 Holders, shall affect
Section 3.16 hereof.
It shall not be necessary for any Act of 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.
52
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 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 corporation, or the successor (if other than the
Company) shall be a corporation organized and existing under the laws of the
United States of America or a State thereof or the District of Columbia and such
corporation 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 corporation, and (ii) the Company or such successor
corporation, 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 CORPORATION.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by a successor corporation in
accordance with Section 9.1, such successor corporation 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 corporation 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 corporation 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
53
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.
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 re-establishment of a Type A Security 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.
54
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.
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)
semiannually, not later than ______ and _________ 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 ___________ of each year, commencing ___________, 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 __________. 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 (if any) and the compliance certificate
required by Section 314 of the TIA in the form, in the manner and at the times
required by Section 314 of the TIA.
55
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.
SECTION 11.6. DEFAULTS; WAIVER.
The Holders of a majority of the Outstanding Purchase Contracts voting
together as one class may, by vote, 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 charged with the administration of this Agreement 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 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, and the Indenture (For Unsecured Debt Securities Series J), dated as of
June 1, 2001, 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.
56
SECTION 11.9. DIRECTION OF AGENT.
Section 316(a)(1)(A) of the TIA is hereby expressly excluded from this
Agreement, as permitted by the TIA.
57
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
TXU CORP.
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
THE BANK OF NEW YORK,
as Purchase Contract Agent and Trustee
By:____________________________
Name:
Title:
58
EXHIBIT A
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 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) 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 Type A Securities _______
Form of Face of Type A Certificate
____% Type A Securities
This Type A Certificate certifies that ___________ is the registered Holder
of the number of Type A Securities set forth above. Each Type A Security
represents (i) either (a) one _____ % Debt Security due ____________ (the "Debt
Security") of TXU Corp. (the "Company"), in an aggregate principal amount of
$____, subject to the Pledge of such Debt Securities by such Holder pursuant to
the Pledge Agreement or (b) upon the occurrence of a Tax Event Redemption prior
to the Purchase Contract Settlement Date, the appropriate Applicable Ownership
Interest in the Treasury Portfolio, subject to the Pledge of such Applicable
Ownership Interest in the Treasury Portfolio by such Holder pursuant to the
Pledge Agreement, and (ii) the rights and obligations of the Holder under one
Purchase Contract with the Company. All capitalized terms used herein which are
defined in the Purchase Contract Agreement have the meaning set forth therein.
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 Type A Securities evidenced hereby have been pledged
to the Collateral Agent, for the benefit of the Company, to secure the
A-1
obligations of the Holder under the Purchase Contract comprising a portion of
such Type A Securities.
The Pledge Agreement provides that all payments of the Stated Amount of or
the appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, or
payments of interest on, any (as defined in the Pledge Agreement) or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case
may be, constituting part of the Type A 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 (A) cash distributions with respect to Pledged Debt
Securities or the appropriate Applicable Ownership Interest (as specified in
clause (B) of the definition of such term) of the Treasury Portfolio, as the
case may be, and (B) any payments of the Stated Amount or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such terms) of the Treasury Portfolio, as the case may be, with respect to any
Debt Securities or the appropriate Applicable Ownership Interest in the 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 Stated Amount or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, of any
Pledged Debt Securities or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the 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 Type A Securities of which such Pledged Debt Securities or the Treasury
Portfolio, as the case may be, are a part under the Purchase Contracts forming a
part of such Type A Securities. Payment of interest on any Debt Security or the
appropriate Applicable Ownership Interest (as specified in clause (B) of the
definition of such term) of the Treasury Portfolio, as the case may be, forming
part of a Type A Security evidenced hereby which are payable quarterly in
arrears on_____________ and ________ each year, commencing __________ (a
"Payment Date"), shall, subject to receipt thereof by the Agent from the
Collateral Agent, be paid to the Person in whose name this Type A Certificate
(or a Predecessor Type A 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 Type A
Certificate to purchase, and the Company to sell, on_________ (the "Purchase
Contract Settlement Date"), at a price equal to $____ (the "Stated Amount"), a
number of shares of Common Stock, no par value ("Common Stock"), of the Company,
equal to the Settlement Rate, 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 Type A Securities of which such Purchase Contract
is a part, all as provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. The purchase price (the "Purchase Price") for
the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract
Settlement Date by application of payment received in respect of the Stated
A-2
Amount or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, as the case may
be, of the Pledged Debt Securities or the appropriate Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, pledged to secure the
obligations under such Purchase Contract of the Holder of the Type A Security of
which such Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of each Purchase
Contract forming part of a Type A Security 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 on the reverse hereof. Such Contract
Adjustment Payments shall be payable to the Person in whose name this Type A
Certificate (or a Predecessor Type A Certificate) is registered at the close of
business on the Record Date for such Payment Date.
Payment of interest on the Debt Securities or the appropriate Applicable
Ownership Interest (as specified in clause (B) of the definition of such term)
of the Treasury Portfolio, as the case may be, and Contract Adjustment Payments
will be payable at the office of the Agent in The City of New York or, at the
option of the Company, by check mailed to the address of the Person entitled
thereto as such address appears on the Type A Register.
Reference is hereby made to the further provisions set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Type A 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-3
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:
------------------------------------
not individually but solely as
Attorney-in-Fact of such Holder
By:
------------------------------------
Name:
Title:
Dated: _____________
A-4
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Type A Certificates referred to in the within mentioned
Purchase Contract Agreement.
By:
------------------------------------
as Purchase Contract Agent
By:
------------------------------------
Authorized Officer
A-5
(FORM OF REVERSE OF TYPE A CERTIFICATE)
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 _____________
, as Purchase Contract Agent (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 Type A Certificates are, and are to be, executed and
delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this Type A
Certificate to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a
number of shares of Common Stock of the Company equal to the Settlement Rate,
unless, on or prior to the Purchase Contract Settlement Date, there shall have
occurred a Termination Event or Early Settlement with respect to the Security of
which such Purchase Contract is a part. 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 per Purchase Contract equal to the Stated Amount divided by the Applicable
Market Value and (c) if the Applicable Market Amount 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.
Each Purchase Contract evidenced hereby, which is settled either through
Early Settlement or Cash Settlement, shall obligate the Holder of the related
Type A Securities to purchase at the Purchase Price, and the Company to sell, a
number of newly issued shares of Common Stock equal to the 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 20 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
securities exchange on which the Common Stock is so listed, or if the Common
Stock is not so listed on a United States national or regional securities
exchange, the last quoted bid price for the Common Stock in the over-the-counter
market as reported on the NYSE, if such bid price is not available, the market
value of the Common Stock on such. 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 at the close of business and (B) has traded
at least once on the national or regional securities exchange or association
that is the primary market for the trading of the Common Stock.
A-6
In accordance with the terms of the Purchase Contract Agreement, the Holder
of this Type A Certificate shall pay the Purchase Price for the shares of Common
Stock purchased pursuant to each Purchase Contract evidenced hereby by effecting
a Cash Settlement, an Early Settlement or from the proceeds of a remarketing of
the related Pledged Debt Securities of such holders. A Holder of Type A
Securities who does not elect, 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 pay the
Purchase Price for the shares of Common Stock to be issued under the related
Purchase Contract from the Proceeds of the sale of the related Pledged Debt
Securities held by the Collateral Agent. Such sale will be made by the
Remarketing Agent pursuant to the terms of the Remarketing Agreement and the
Remarketing Underwriting Agreement on the third Business Day immediately
preceding the Purchase Contract Settlement Date. If, as provided in the Purchase
Contract Agreement, upon the occurrence of a Failed Remarketing the Collateral
Agent, for the benefit of the Company, exercises its rights as a secured
creditor with respect to the Pledged Debt Securities related to this Type A
Certificate, any accrued and unpaid interest (including deferred interest) on
such Pledged Debt Securities will become payable by the Company to the Holder of
this Type A Security Certificate in the manner provided for in the Purchase
Contract Agreement.
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 aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Each Purchase Contract evidenced hereby and all obligations and rights of
the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses as
they appear in the Type A Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Debt Security
(as defined in the Pledge Agreement) or the appropriate Applicable Ownership
Interest in the Treasury Portfolio forming a part of each Type A Security from
the Pledge. A Type A Security shall thereafter represent the right to receive
the Debt Security or the appropriate Applicable Ownership Interest in the
Treasury Portfolio forming a part of such Type A Security in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement.
Under 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. 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 Type A Security Holders a notice (a) containing such
information as is contained in the notice or solicitation, (b) stating that each
Type A Security 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 Type A Securities and (c)
stating the manner in which such instructions may be given. Upon the written
request of the Type A Security Holders on such record date, the Agent shall
endeavor insofar as practicable to vote or cause to be voted, in accordance with
A-7
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 Type A Security, the Agent
shall abstain from voting the Debt Security evidenced by such Type A Securities.
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 Debt Securities shall be delivered to the
Collateral Agent in exchange for the Pledged Debt Securities. Thereafter,
pursuant to the terms of the Pledge Agreement, the Collateral Agent for the
benefit of the Company will apply an amount equal to the Redemption Amount of
such Redemption Price to purchase, the Treasury Portfolio and promptly remit the
remaining portion of such Redemption Price to the Agent for payment to the
Holders of such Type A Securities.
Following the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Holders of Type A Securities and the Collateral
Agent shall have such security interests rights and obligations with respect to
the Treasury Portfolio as the Holder of Type A Securities and the Collateral
Agent had in respect of the Debt Securities, as the case may be, 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 Treasury Portfolio.
The Type A Certificates are issuable only in registered form and only in
denominations of a single Type A Security and any integral multiple thereof. The
transfer of any Type A Certificate will be registered and Type A Certificates
may be exchanged as provided in the Purchase Contract Agreement. The Type A
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 who elects to substitute Treasury Securities for Debt
Securities or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, thereby creating Type B Securities, shall be responsible for any fees
or expenses payable in connection therewith. Except as provided in the Purchase
Contract Agreement, for so long as the Purchase Contract underlying a Type A
Security remains in effect, such Type A Security shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Type A
Security in respect of Debt Securities or the appropriate Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, and Purchase Contract
constituting such Type A Security may be transferred and exchanged only as a
Type A Security. The holder of an Type A Securities may substitute for the
Pledged Debt Securities or the appropriate Applicable Ownership Interest in the
Treasury Portfolio securing its obligation under the related Purchase Contract,
Treasury Securities in an aggregate principal amount equal to the aggregate
Stated Amount of the Pledged Debt Securities or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
in the Treasury Portfolio in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. From and after such Collateral Substitution,
the Security for which such Pledged Treasury Securities secures the Holder's
obligation under the Purchase Contract shall be referred to as a "Type B
Security." A Holder may make such Collateral Substitution only in integral
multiples of [100] Type A Securities for [100] Type B Securities; provided,
A-8
however, that if a Tax Event Redemption has occurred and the Treasury Portfolio
has become a component of the Type A Securities, a Holder may make such
Collateral Substitutions only in integral multiples of ___________ Type A
Securities for ___________ Type B Securities. Such Collateral Substitution may
cause the equivalent aggregate principal amount of this Certificate to be
increased or decreased; provided, however, the equivalent aggregate principal
amount outstanding under this Type A Certificate shall not exceed $_________.
All such adjustments to the equivalent aggregate principal amount of this Type A
Certificate shall be duly recorded by placing an appropriate notation on the
Schedule attached hereto.
A Holder of Type B Securities may create or recreate Type A Securities by
delivering to the Collateral Agent Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, with a Stated Amount, in the case
of such Debt Securities, or with the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio, in the case of such appropriate Applicable Ownership Interest in the
Treasury Portfolio, equal to the aggregate principal amount of the Pledged
Treasury Securities 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, the Contract Adjustment Payments payable in respect of each
Purchase Contract to the Person in whose name the Type A Certificate evidencing
such Purchase Contract is registered at the close of business on the Record Date
for such Payment Date. Contract Adjustment Payments will be payable at the
office of the Agent in The City of New York 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 Type A Register.
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 Type A Certificate will receive on the
Purchase Contract Settlement Date, in lieu of a cash payment, a number of shares
of Common Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of this Type A Certificate divided by
(y) the Applicable Market Value.
A-9
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 or acquisitions
of capital stock of the Company in connection with the satisfaction by the
Company of its obligations under any employee 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 capital
stock of the Company, (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 such 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 or redemptions of capital stock solely from the issuance
or exchange of capital stock or (v) redemptions or repurchases of any rights
outstanding under a shareholder rights plan or a declaration thereunder of a
dividend of 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, 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 Type A Register.
Upon and after the occurrence of a Termination Event, the Collateral Agent shall
release the Debt Securities or the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, 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, at the option of the Holder thereof, Purchase Contracts underlying
Securities having an aggregate Stated Amount equal to [$1,000] or an integral
multiple thereof may be settled early ("Early Settlement") as provided in the
Purchase Contract Agreement; provided, however, that if a Tax Event Redemption
has occurred and the Treasury Portfolio has become a component of the Type A
Securities, Holders may early settle Type A Securities only in integral
multiples of ___________ Type A Securities. In order to exercise the right to
effect Early Settlement with respect to any Purchase Contracts evidenced by this
Type A Certificate, the Holder of this Type A Certificate shall deliver this
Type A 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 accompanied by payment in the form of
immediately available funds payable to the order of the Company in an amount
(the "Early Settlement Amount") equal to (i) the product of (A) the Stated
Amount times (B) the number of Purchase Contracts with respect to which the
Holder has elected to effect Early Settlement, 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 for any Payment Date to the opening of business on
A-10-
such Payment Date, an amount equal to the Contract Adjustment Payments payable
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 Debt Securities or the appropriate Applicable Ownership Interest in the
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 Type A Security as to which Early Settlement is effected equal to the
Early Settlement Rate; provided however, that upon the Early Settlement of the
Purchase Contracts, the Holder thereof will forfeit the right to receive any
Deferred Contract Adjustment Payments, if any, on such Purchase Contracts. The
Early Settlement Rate shall initially be equal to shares of Common Stock and
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 Type 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 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 Type A
Certificate. The Company covenants and agrees, and the Holder, by its acceptance
thereof, likewise covenants and agrees, to be bound by the provisions of this
paragraph.
The Holder of this Type A Certificate, by its acceptance hereof, authorizes
the Agent to enter into and perform the related Purchase Contracts forming part
of the Type A Securities evidenced hereby on his behalf as his attorney-in-fact,
expressly withholds any consent to the assumption (i.e., affirmance) of the
Purchase Contracts by the Company or its trustee in the event that the Company
becomes the subject of a case under the Bankruptcy Code, 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 Debt Securities or the appropriate Applicable Ownership Interest
in the Treasury Portfolio, as the case may be, underlying this Type A
Certificate pursuant to the Pledge Agreement. The Holder 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 Debt Securities, or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the 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.
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.
The Purchase Contracts shall for all purposes be governed by, and construed
in accordance with, the laws of the State of New York.
A-11
The Company, the Agent and its Affiliates and any agent of the Company or
the Agent may treat the Person in whose name this Type A Certificate is
registered as the owner of the Type A Securities evidenced hereby for the
purpose of receiving payments of interest payable quarterly 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, 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.
A-12
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 Type A Certificates and all rights thereunder, hereby irrevocably
constituting and appointing
--------------------------------------------------------------------------------
attorney to transfer said Type A Certificates on the books of TXU Corp. with
full power of substitution in the premises.
Dated:
----------------------------- ----------------------------------------
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within Type
A Certificates in every particular,
without alteration or enlargement or any
change whatsoever.
Signature Guarantee:
----------------------------------------
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-13
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 Type A Securities
evidenced by this Type A 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 REGISTERED HOLDER
of and 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-14
ELECTION TO SETTLE EARLY
The undersigned Holder of this Type A 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 Type A Securities evidenced by this Type A 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 Type A Certificate representing any Type A 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 appropriate Applicable
Ownership Interest in the 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.
Dated:
----------------------------- ----------------------------------------
Signature
Signature Guarantee:
------------------------------------------------------------
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 Type A
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
Transfer Instructions for Pledged Debt Securities, or the Treasury Portfolio, as
the case may be, Transferable Upon Early Settlement or a Termination Event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
A-15
[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 IN AMOUNT OF INCREASE IN PRINCIPAL AMOUNT OF SIGNATURE OF AUTHORIZED
PRINCIPAL AMOUNT OF THE PRINCIPAL AMOUNT OF THE THIS GLOBAL CERTIFICATE OFFICER OF TRUSTEE OR
GLOBAL CERTIFICATE GLOBAL CERTIFICATE FOLLOWING SUCH DECREASE SECURITIES CUSTODIAN
OR INCREASE
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
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A-16
EXHIBIT B
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE
CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF A
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 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) 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 THEREIN.
No. ______________ Number of Type B Securities ___________________ Cusip No.
B-1
FORM OF FACE OF TYPE B CERTIFICATE
This Type B Certificate certifies that __________ is the registered Holder
of the number of Type B Securities set forth above. Each Type B Security
represents (i) a [1/100] undivided beneficial ownership interest, of a Treasury
Security having a principal amount at maturity equal to [$1,000], subject to the
Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one Purchase
Contract with TXU Corp., a Texas corporation (the "Company"). All capitalized
terms used herein which are defined in the Purchase Contract Agreement have the
meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities constituting part
of each Type B Securities 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 Type B Securities.
Each Purchase Contract evidenced hereby obligates the Holder of this Type B
Certificate to purchase, and the Company, to sell, on ____________ (the
"Purchase Contract Settlement Date"), at a price equal to $____ (the "Stated
Amount"), a number of shares of Common stock, no par value per share ("Common
Stock"), of the Company equal to the Settlement Rate, 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 Type B Securities of which such
Purchase Contract is a part, all as provided in the Purchase Contract Agreement
and more fully described on the reverse hereof. The purchase price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby will be paid by application of the Proceeds from the Treasury Securities
pledged to secure the obligations under such Purchase Contract in accordance
with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each Purchase
Contract evidenced hereby an amount (the "Contract Adjustment Payments") equal
to __% per annum of the Stated Amount, computed on the basis of the actual
number of days elapsed in a year of 360 day year of twelve 30 day months, as the
case may be, subject to deferral at the option of the Company as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof. Such
Contract Adjustment Payments shall be payable to the Person in whose name this
Type B Certificate (or a Predecessor Type B Certificate) is registered at the
close of business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the office of the Agent in
The City of New York or, at the option of the Company, by check mailed to the
address of the Person entitled thereto as such address appears on the Type B
Register.
Reference is hereby made to the further provisions set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Type B 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-2
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)
By: ,
------------------------------------
not individually but solely as
Attorney-in-Fact of such Holder
By:
------------------------------------
Name:
Title:
Dated:___________
B-3
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Type B Securities referred to in the within-mentioned
Purchase Contract Agreement.
By: ,
------------------------------------
as Purchase Contract Agent
By:
------------------------------------
Authorized Signatory
B-4
(REVERSE OF
TYPE B CERTIFICATE)
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 First National
Bank of Chicago, as Purchase Contract Agent (including its successors
thereunder, herein called the "Agent"), to which the 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 Type B Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this Type B
Certificate to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase Price") a
number of shares of Common Stock of the Company equal to the Settlement Rate,
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 Security
of which such Purchase Contract is a part. 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 per Purchase Contract equal to the Stated Amount divided by the Applicable
Market Value and (c) if the Applicable Market Amount is less than or equal to
$________, then ______ 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 "Applicable Market Value" means the average of the Closing Prices per
share of Common Stock on each of the twenty 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 securities exchange on which the Common Stock is so listed, or if the
Common Stock is not so listed on a United States national or regional securities
exchange, 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, or,
if such bid price is not available, the market value of the Common Stock on such
date as determined by a nationally recognized independent investment banking
firm retained for this purpose by the Company. 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.
B-5
In accordance with the terms of the Purchase Contract Agreement, the Holder
of this Type B Certificate shall pay the Purchase Price for the shares of Common
Stock purchased pursuant to each Purchase Contract evidenced hereby by effecting
either an Early Settlement of each such Purchase Contract or by applying a
principal amount of the Pledged Treasury Securities underlying such Holder's
Type B Securities equal to the Stated Amount of such Purchase Contract to the
purchase of the Common Stock.
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 aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Each Purchase Contract evidenced hereby and all obligations and rights of
the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses as
they appear in the Type B Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Treasury
Securities (as defined in the Pledge Agreement) forming a part of each Type B
Certificate.
The Type B Certificates are issuable only in registered form and only in
denominations of a single Type B Security and any integral multiple thereof. The
transfer of any Type B Certificate will be registered and Type B Certificates
may be exchanged as provided in the Purchase Contract Agreement. The Type B
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 who elects to substitute Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be, for
Treasury Securities, thereby recreating Type A Securities, shall be responsible
for any fees or expenses associated therewith. Except as provided in the
Purchase Contract Agreement, for so long as the Purchase Contract underlying a
Type B Security remains in effect, such Type B Security shall not be separable
into its constituent parts, and the rights and obligations of the Holder of such
Type B Security in respect of the Treasury Security and the Purchase Contract
constituting such Type B Security may be transferred and exchanged only as a
Type B Security. A Holder of Type B Securities may create or recreate Type A
Securities by delivering to the Collateral Agent Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, with a
Stated Amount, in the case of such Debt Securities, or with the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, in the case of such appropriate Applicable
Ownership Interest in the Treasury Portfolio, equal to the aggregate principal
amount of the Pledged Treasury Securities in exchange for the release of such
Pledged Treasury Securities in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement. From and after such substitution,
the Holder's Security shall be referred to as a "Type A Security." Such
substitution may cause the equivalent aggregate principal amount of this
Certificate to be increased or decreased; provided, however, the equivalent
aggregate principal amount outstanding under this Type B Certificate shall not
exceed $__________. All such adjustments to the equivalent aggregate principal
B-6
amount of this Type B Certificate shall be duly recorded by placing an
appropriate notation on the Schedule attached hereto.
A Holder of a Type A Security may create or recreate a Type B Security by
delivering to the Collateral Agent Treasury Securities in an aggregate principal
amount equal to the aggregate principal amount of the Pledged Debt Securities or
the appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, in
exchange for the release of such Pledged Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be, in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. Any such recreation of a Type B Security may be effected only in
multiples of [100] Type A Securities for [100] Type B Securities; provided,
however, if a Tax Event Redemption has occurred and the Treasury Portfolio has
become a component of the Type A Securities, a Holder may make such Collateral
Substitution in integral multiples of ___________ Type A Securities for
_________ Type B Securities.
Subject to the next succeeding paragraph, the Company shall pay, on each
Payment Date, the Contract Adjustment Payments payable in respect of each
Purchase Contract to the Person in whose name the Type B Certificate evidencing
such Purchase Contract is registered at the close of business on the Record Date
for such Payment Date. Contract Adjustment Payments will be payable at the
office of the Agent in The City of New York 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 Type B Register.
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 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 Type B Certificate will receive on the
Purchase Contract Settlement Date, in lieu of a cash payment, a number of Shares
of Common Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of the Type B 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
B-7
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 or acquisitions
of shares of capital stock of the Company in connection with the satisfaction by
the Company of its obligations under any employee 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
capital stock of the Company, (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 or redemptions of capital stock solely from the issuance
or exchange of capital stock or (v) redemptions or repurchases of any rights
outstanding under a shareholder rights plan or the declaration thereunder of a
dividend of 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 Contract Adjustment Payments
or any Deferred Contract Adjustment Payments, 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 Type B 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, at the option of the Holder thereof, Purchase Contracts underlying
Securities having an aggregate Stated Amount equal to [$1,000] or an integral
multiple thereof may be settled early ("Early Settlement") as provided in the
Purchase Contract Agreement. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this Type B
Certificate, the Holder of this Type B Certificate shall deliver this Type B
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 accompanied by payment in the form of
immediately available funds payable to the order of the Company in an amount
(the "Early Settlement Amount") equal to (i) the product of (A) the Stated
Amount times (B) the number of Purchase Contracts with respect to which the
Holder has elected to effect Early Settlement, 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 for 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 Type B Security as to which Early Settlement is
B-8
effected equal to _______ shares of Common Stock per Purchase Contract (the
"Early Settlement Rate"); provided however, that upon the Early Settlement of
the Purchase Contracts, the Holder thereof will forfeit the right to receive any
Deferred Contract Adjustment Payments on such Purchase Contracts. 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 Type B 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 Type B
Certificate. The Company covenants and agrees, and the Holder, by his acceptance
hereof, likewise covenants and agrees, to be bound by the provisions of this
paragraph.
The Holder of this Type B Certificate, by its acceptance hereof, authorizes
the Agent to enter into and perform the related Purchase Contracts forming part
of the Type B Securities evidenced hereby on his 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 the event that the Company
becomes the subject of a case under the Bankruptcy Code, 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 Type B Certificate pursuant to
the Pledge Agreement. The Holder 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.
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.
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, the Agent and its Affiliates and any agent of the Company or
the Agent may treat the Person in whose name this Type B Certificate is
registered as the owner of the Type B Securities 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 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.
B-9
The Purchase Contracts shall not, prior to the settlement thereof, 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.
B-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 Type B Certificates and all rights thereunder, hereby irrevocably
constituting and appointing
--------------------------------------------------------------------------------
attorney to transfer said Type B Certificates on the books of TXU Corp. with
full power of substitution in the premises.
Dated:
----------------------------- ----------------------------------------
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within Type
B Certificates in every particular,
without alteration or enlargement or any
change whatsoever.
Signature Guarantee:
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-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 Type A Securities
evidenced by this Type B 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:
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 delivered to a Person other than REGISTERED HOLDER
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-12
ELECTION TO SETTLE EARLY
The undersigned Holder of this Type B 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 Type B Securities evidenced by this Type B Certificate
specified below. The option to effect Early Settlement may be exercised only
with respect to Purchase Contracts underlying Type B Securities with an
aggregate Stated Amount equal to [$1,000] or an integral multiple thereof. 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
Type B Certificate representing any Type B Securities 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.
Dated:
----------------------------- ----------------------------------------
Signature
Signature Guarantee:
-----------------------------------
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 Type B
Certificates are to be registered in the
name of and delivered to and Pledged Debt REGISTERED HOLDER
Securities, or the Treasury Portfolio,
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
Transfer Instructions for Pledged Debt Securities, or the Treasury Portfolio, as
the case may be, 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 IN AMOUNT OF INCREASE IN PRINCIPAL AMOUNT OF SIGNATURE OF AUTHORIZED
PRINCIPAL AMOUNT OF THE PRINCIPAL AMOUNT OF THE THIS GLOBAL CERTIFICATE OFFICER OF TRUSTEE OR
GLOBAL CERTIFICATE GLOBAL CERTIFICATE FOLLOWING SUCH DECREASE SECURITIES CUSTODIAN
OR INCREASE
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
----------------------- -------------------------- -------------------------- ------------------------- --------------------------
B-14
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
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 __________, ___ among the Company, yourselves, as
Collateral Agent, and ourselves, as Purchase Contract Agent and as
attorney-in-fact for the holders of [Type A Securities] [Type B Securities] from
time to time, that the holder of securities listed below (the "Holder") has
elected to substitute [$_____ aggregate [principal amount] of Treasury
Securities] [$_______ aggregate principal amount of Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case
may be,] in exchange for the [Pledged Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,]
[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 [Treasury Securities] [Debt Securities or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be,] to you, as
Collateral Agent. We hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Debt Securities or the appropriate Applicable Ownership
Interest in the Treasury Portfolio, as the case may be], and upon the payment by
such Holder of any applicable fees, to release the [Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case
may be,] [Treasury Securities] related to such [Type A Securities] [Type B
Securities] to us in accordance with the Holder's instructions.
Date: By:
-------------------------- ------------------------------
Name:
Title:
Signature Guarantee:
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.
C-1
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Debt Securities or the appropriate Applicable Ownership
Interest in the Treasury Portfolio, as the case may be,] for the [Pledged Debt
Securities or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities]:
Name: Social Security or other Taxpayer
------------------------------ Identification Number, if any
Address
---------------------------- -----------------------------------
-----------------------------------
-----------------------------------
C-2
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
Attention:________________
Re: Securities of TXU Corp. (the "Company")
The undersigned Holder hereby notifies you that it has delivered to
____________, as Collateral Agent, $_______ aggregate principal amount of
[Treasury Securities] [Debt Securities or the appropriate Applicable Ownership
Interest in the Treasury Portfolio, as the case may be,] in exchange for the
[Pledged Debt Securities or the appropriate Applicable Ownership Interest in the
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 _______ ___, _____________, between you, the Company and the
Collateral Agent. The undersigned Holder has paid the Collateral Agent all
applicable fees relating to such exchange. 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 appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,]
[Pledged Treasury Securities] related to such [Type A Securities] [Type B
Securities].
Date: By:
-------------------------- ------------------------------
Name:
Title:
Signature Guarantee:
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
---------------------------- -----------------------------------
-----------------------------------
-----------------------------------
D-1
EXHIBIT E
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 each case 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
[Type A Securities] [Type B Securities].
Date: By:
-------------------------- ------------------------------
Name:
Title:
Signature Guarantee:
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
---------------------------- -----------------------------------
-----------------------------------
-----------------------------------
E-1