================================================================================
TXU CORP.
AND
THE BANK OF NEW YORK,
as Purchase Contract Agent
and Trustee
PURCHASE CONTRACT AGREEMENT
Dated as of October 1, 2001
================================================================================
TIE SHEET
---------
Section of Section of
Trust Indenture Act Purchase Contract
of 1939, as amended agreement
------------------- ------------
310(a) 7.8
310(b) 7.9(g), 11.8
310(c) Inapplicable
311(a) 11.2(b)
311(b) 11.2(b)
311(c) Inapplicable
312(a) 11.2(a)
312(b) 11.2(b)
313 11.3
314(a) 11.4
314(b) Inapplicable
314(c) 11.5
314(d) Inapplicable
314(e) 1.1, 1.3, 11.5
314(f) 11.1
315(a) 7.1(a)
315(b) 7.2
315(c) 7.1(e)
315(d) 7.1(b)
316(a) 11.6
316(b) 6.1
316(c) 11.2
317(a) Inapplicable
317(b) Inapplicable
318(a) 11.1(b)
318(b) 11.1
318(c) 11.1(a)
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* This Cross-Reference Table does not constitute part of the
Purchase
Contract Agreement and shall not affect the interpretation of any of its
terms or provisions.
2
TABLE OF CONTENTS
Page No.
--------
RECITALS 6
ARTICLE I Definitions and Other Provisions of General Applications 6
SECTION 1.1 Definitions. 6
SECTION 1.2 Compliance Certificates and Opinions. 18
SECTION 1.3 Form of Documents Delivered to Agent. 19
SECTION 1.4 Acts of Holders; Record Dates. 19
SECTION 1.5 Notices. 21
SECTION 1.6 Notice to Holders; Waiver. 21
SECTION 1.7 Effect of Headings and Table of Contents. 22
SECTION 1.8 Successors and Assigns. 22
SECTION 1.9 Separability Clause. 22
SECTION 1.10 Benefits of Agreement. 22
SECTION 1.11 Governing Law. 22
SECTION 1.12 Legal Holidays. 22
SECTION 1.13 Counterparts. 23
SECTION 1.14 Inspection of Agreement. 23
ARTICLE II Certificate Forms 23
SECTION 2.1 Forms of Certificates Generally. 23
SECTION 2.2 Form of Agent's Certificate of Authentication. 24
ARTICLE III The Securities 24
SECTION 3.1 Title and Terms; Denominations. 24
SECTION 3.2 Rights and Obligations Evidenced by the Certificates. 24
SECTION 3.3 Execution, Authentication, Delivery and Dating. 25
SECTION 3.4 Temporary Certificates. 25
SECTION 3.5 Registration; Registration of Transfer and Exchange. 26
SECTION 3.6 Book-Entry Interests. 27
SECTION 3.7 Notices to Holders. 27
SECTION 3.8 Appointment of Successor Clearing Agency. 27
SECTION 3.9 Definitive Certificates. 27
SECTION 3.10 Mutilated, Destroyed, Lost and Stolen Certificates. 28
SECTION 3.11 Persons Deemed Owners. 29
SECTION 3.12 Cancellation. 29
SECTION 3.13 Establishment or Reestablishment of Treasury Units. 29
SECTION 3.14 Establishment or Reestablishment of Corporate Units. 32
SECTION 3.15 Transfer of Collateral upon Occurrence of Termination
Event. 34
SECTION 3.16 No Consent to Assumption. 34
ARTICLE IV The Debt Securities 34
SECTION 4.1 Payment of Interest; Rights to Interest Preserved;
Interest Rate Reset; Notice. 34
SECTION 4.2 Notice and Voting. 36
SECTION 4.3 Substitution of a Treasury Portfolio for Debt Securities. 36
SECTION 4.4 Consent to Treatment for Tax Purposes. 37
3
ARTICLE V The Purchase Contracts 38
SECTION 5.1 Purchase of Shares of Common Stock. 38
SECTION 5.2 Contract Adjustment Payments. 39
SECTION 5.3 Deferral of Payment Dates For Contract Adjustment Payments. 39
SECTION 5.4 Payment of Purchase Price. 40
SECTION 5.5 Issuance of Shares of Common Stock. 44
SECTION 5.6 Adjustment of Settlement Rate. 44
SECTION 5.7 Notice of Adjustments and Certain Other Events. 48
SECTION 5.8 Termination Event; Notice. 49
SECTION 5.9 Early Settlement. 49
SECTION 5.10 No Fractional Shares. 50
SECTION 5.11 Charges and Taxes. 51
ARTICLE VI Remedies 51
SECTION 6.1 Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock. 51
SECTION 6.2 Restoration of Rights and Remedies. 51
SECTION 6.3 Rights and Remedies Cumulative. 52
SECTION 6.4 Delay or Omission Not Waiver. 52
SECTION 6.5 Undertaking for Costs. 52
SECTION 6.6 Waiver of Stay or Extension Laws. 52
ARTICLE VII The Agent 53
SECTION 7.1 Certain Duties and Responsibilities. 53
SECTION 7.2 Notice of Default. 54
SECTION 7.3 Certain Rights of Agent. 54
SECTION 7.4 Not Responsible for Recitals or Issuance of Securities. 55
SECTION 7.5 May Hold Securities. 55
SECTION 7.6 Money Held in Custody. 55
SECTION 7.7 Compensation and Reimbursement. 55
SECTION 7.8 Corporate Agent Required; Eligibility. 56
SECTION 7.9 Resignation and Removal; Appointment of Successor. 56
SECTION 7.10 Acceptance of Appointment by Successor. 57
SECTION 7.11 Merger, Conversion, Consolidation or Succession to Business. 57
SECTION 7.12 Preservation of Information; Communications to Holders. 58
SECTION 7.13 No Obligations of Agent. 58
SECTION 7.14 Tax Compliance. 58
ARTICLE VIII Supplemental Agreements 59
SECTION 8.1 Supplemental Agreements Without Consent of Holders. 59
SECTION 8.2 Supplemental Agreements with Consent of Holders. 59
SECTION 8.3 Execution of Supplemental Agreements. 60
SECTION 8.4 Effect of Supplemental Agreements. 60
SECTION 8.5 Reference to Supplemental Agreements. 60
ARTICLE IX Consolidation, Merger, Sale or Conveyance 61
SECTION 9.1 Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions. 61
SECTION 9.2 Rights and Duties of Successor Entity. 61
SECTION 9.3 Opinion of Counsel Given to Agent. 61
4
ARTICLE X Covenants 62
SECTION 10.1 Performance Under Purchase Contracts. 62
SECTION 10.2 Maintenance of Office or Agency. 62
SECTION 10.3 Company to Reserve Common Stock. 62
SECTION 10.4 Covenants as to Common Stock. 62
ARTICLE XI Trust Indenture Act 63
SECTION 11.1 Trust Indenture Act; Application. 63
SECTION 11.2 Lists of Holders of Securities. 63
SECTION 11.3 Reports by the Agent. 63
SECTION 11.4 Periodic Reports to Agent. 63
SECTION 11.5 Evidence of Compliance with Conditions Precedent. 63
SECTION 11.6 Defaults; Waiver. 64
SECTION 11.7 Agent's Knowledge of Defaults. 64
SECTION 11.8 Conflicting Interests. 64
SECTION 11.9 Direction of Agent. 64
EXHIBIT A A-1
EXHIBIT B ▇-▇
▇▇▇▇▇▇▇ ▇ ▇-▇
▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ AGREEMENT, dated as of October 1, 2001, 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 APPLICATIONS
SECTION 1.1 DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular; and
nouns and pronouns of the masculine gender include the feminine and neuter
genders;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and
(d) the following terms have the meanings given to them in this
Section 1.1(d):
"3-YEAR TREASURY PORTFOLIO" means (i) interest or principal strips of
U.S. Treasury Securities that mature on or prior to November 15, 2004 in an
aggregate amount equal to the Applicable Principal Amount of Series K Notes and
(ii) with respect to the scheduled interest payment date on the Series K Notes
that occurs on November 16, 2004, interest or principal strips of U.S. Treasury
Securities which mature on or prior to November 16, 2004 in an aggregate amount
equal to the aggregate interest payment that would be due on the Applicable
Principal Amount of Series K Notes that would have been included in Corporate
Units assuming no remarketing of Series K Notes on August 16, 2004 and that the
interest rate on the Series K Notes was not reset on August 16, 2004.
6
"3-YEAR TREASURY PORTFOLIO PURCHASE PRICE" means the lowest aggregate
price quoted by a Primary Treasury Dealer to the Quotation Agent on the third
Business Day immediately preceding August 16, 2004 for the purchase of the
3-Year Treasury Portfolio for settlement on August 16, 2004.
"3-YEAR TREASURY SECURITY" means a zero-coupon U.S. Treasury Security
having a principal amount at maturity equal to $1,000 and maturing on November
15, 2004 (CUSIP No. ▇▇▇▇▇▇▇▇▇).
"4-YEAR TREASURY PORTFOLIO" means (i) interest or principal strips of
U.S. Treasury Securities that mature on or prior to November 15, 2005 in an
aggregate amount equal to the Applicable Principal Amount of Series L Notes and
(ii) with respect to the scheduled interest payment date on the Series L Notes
that occurs on November 16, 2005, interest or principal strips of U.S. Treasury
Securities which mature on or prior to November 16, 2005 in an aggregate amount
equal to the aggregate interest payment that would be due on the Applicable
Principal Amount of Series L Notes that would have been included in Corporate
Units assuming no remarketing of Series L Notes on August 16, 2005 and that the
interest rate on the Series L Notes was not reset on August 16, 2005.
"4-YEAR TREASURY PORTFOLIO PURCHASE PRICE" means the lowest aggregate
price quoted by a Primary Treasury Dealer to the Quotation Agent on the third
Business Day immediately preceding August 16, 2005 for the purchase of the
4-Year Treasury Portfolio for settlement on August 16, 2005.
"4-YEAR TREASURY SECURITY" means a zero-coupon U.S. Treasury Security
having a principal amount at maturity equal to $1,000 and maturing on November
15, 2005 (CUSIP No. ▇▇▇▇▇▇▇▇▇).
"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 BENCHMARK TREASURY" on a particular determination date
shall mean direct obligations of the United States (which may be obligations
traded on a when-issued basis only) having a maturity comparable to the
remaining term to maturity of the applicable series of Debt Securities, which
may be two years or two and one quarter years, as applicable, as agreed upon by
the Company and the Reset Agent. The yield for the Applicable Benchmark Treasury
will be the bid side yield displayed at 10:00 A.M.,
New York City time, on the
third Business Day immediately preceding the applicable Reset Date in the
Telerate system (or if the Telerate system is (a) no longer available on the
third Business Day immediately preceding such Reset Date or (b) in the opinion
of the Reset Agent (after consultation with the Company) no longer an
appropriate system from which to obtain such yield, such other nationally
recognized quotation system as, in the opinion of the Reset Agent (after
consultation with the Company), is appropriate). If such yield is not so
displayed, the yield for the Applicable Benchmark Treasury shall be, as
calculated by the Reset Agent, the yield to maturity for the Applicable
Benchmark Treasury, expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a
7
daily basis, and computed by taking the arithmetic mean of the secondary market
bid rates, as of 10:30 A.M.,
New York City time, on the third Business Day
immediately preceding the applicable Reset Date of three leading United States
government securities dealers selected by the Reset Agent (after consultation
with the Company) (which may include the Reset Agent or an affiliate thereof).
"APPLICABLE MARKET VALUE" has the meaning specified in Section 5.1.
"APPLICABLE OWNERSHIP INTEREST" means, with respect to each Corporate
Unit and the U.S. Treasury Securities in a Treasury Portfolio, (1) for a 3-Year
Treasury Portfolio, (i) a 1/40, or 2.5%, undivided ownership interest in a
$1,000 principal or interest amount of a principal or interest strip in a U.S.
Treasury Security included in such Treasury Portfolio which matures on or prior
to November 15, 2004, and (ii) for the scheduled interest payment date on the
Series K Notes that occurs on November 16, 2004, a 0.0297% undivided beneficial
ownership interest in a $1,000 principal or interest amount of a principal or
interest strip in a U.S. Treasury Security maturing on or before November 16,
2004, (2) for a 4-Year Treasury Portfolio, (i) a 1/40, or 2.5%, undivided
ownership interest in a $1,000 principal or interest amount of a principal or
interest strip in a U.S. Treasury Security included in such Treasury Portfolio
which matures on or prior to November 15, 2004, and (ii) for the scheduled
interest payment date on the Series L Notes that occurs on November 16, 2004, a
0.0341% undivided beneficial ownership interest in a $1,000 principal or
interest amount of a principal or interest strip in a U.S. Treasury Security
maturing on or before November 16, 2005, or (3) for a Tax Event Treasury
Portfolio, (A) prior to the Series K Reset Date, (i) a 1/40, or 2.5%, undivided
beneficial ownership interest in a $1,000 principal or interest amount of a
principal or interest strip in a U.S. Treasury Security included in such
Treasury Portfolio which matures on or prior to November 16, 2004 and a 1/40, or
2.5%, undivided beneficial ownership interest in a $1,000 principal or interest
amount of a principal or interest strip in a U.S. Treasury Security included in
such Treasury Portfolio which matures on or prior to November 16, 2005, and (ii)
for each scheduled interest payment date on the Debt Securities of each series
that occurs after the Tax Event Redemption Date, a 0.0297% undivided beneficial
ownership interest in a $1,000 principal or interest amount of a principal or
interest strip in a U.S. Treasury Security maturing on such date or (B) from the
Series K Reset Date to the Series L Reset Date, (i) a 1/40, or 2.5%, undivided
beneficial ownership interest in a $1,000 principal or interest strip in a U.S.
Treasury Security included in such Treasury Portfolio which matures on or prior
to November 16, 2005 and (ii) for each scheduled interest payment date on the
Series L Notes that occurs after a Tax Event Redemption Date, a 0.0341%
undivided beneficial ownership interest in a $1,000 principal or interest amount
of such U.S. Treasury Security which is a principal or interest strip maturing
on such date.
"APPLICABLE PRINCIPAL AMOUNT" means (i) on any date prior to the Series
K Reset Date, the aggregate principal amount of Series K Notes and Series L
Notes that are components of Corporate Units on such date or (ii) on any date on
or after the Series K Reset Date and prior to the Series L Reset Date, the
aggregate principal amount of Series K Notes outstanding and the aggregate
principal amount of Series L Notes that are components of Corporate Units on
such date, or (iii) on or after the Series L Reset Date, the aggregate principal
amount of the Series K Notes and Series L Notes outstanding on such date.
"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.
8
"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.
"CASH SETTLEMENT" has the meaning set forth in Section 5.4(a)(i).
"CERTIFICATE" means a Corporate Unit Certificate or a Treasury Unit
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 The Chase Manhattan Bank, as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have become
such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"COLLATERAL SUBSTITUTION" means the substitution of the pledged
components of one type of Security for pledged components of the other type of
Security in connection with establishment or reestablishment of Treasury Units
or Corporate Units, as described in Sections 3.13 and 3.14 hereof.
9
"COMMON STOCK" means the Common Stock, without par value, of the
Company, including, where applicable, the preferred share purchase rights
appurtenant thereto.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "Company" shall
mean such successor.
"COMPANY CERTIFICATE" means a certificate signed by an Authorized
Officer and delivered to the Agent.
"CONTRACT ADJUSTMENT PAYMENTS" means the amounts payable by the Company
in respect of each Purchase Contract issued in connection with the Corporate
Units and the Treasury Units, which amounts shall be equal to (A) in the case of
each Purchase Contract issued in connection with Corporate Units (i) for the
period prior to the First Purchase Contract Settlement Date, 3.65 % per annum of
the Stated Amount, and (ii) for the period from and after the First Purchase
Contract Settlement Date until the Second Purchase Contract Settlement Date,
3.30% per annum of the Remaining Stated Amount, and (B) in the case of each
Purchase Contract issued in connection with Treasury Units (i) for the period
prior to the First Purchase Contract Settlement Date, 3.65% per annum of the
Stated Amount of such Treasury Units, and (ii) for the period from and after the
First Purchase Contract Settlement Date until the Second Purchase Contract
Settlement Date, 3.30% per annum of the Remaining Stated Amount of such Treasury
Units; in each case computed on the basis of a 360 day year of twelve 30 day
months, plus any Deferred Contract Adjustment Payments accrued pursuant to
Section 5.2.
"CORPORATE TRUST OFFICE" means the corporate trust office of the Agent
at which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"CORPORATE UNIT" means a Security initially issued in substantially the
form set forth as Exhibit A hereto in the Stated Amount of $50 which represents
(i) beneficial ownership by the Holder of either (a) prior to the First Contract
Settlement Date, (1) one Series L Note and one Series K Note, each in an
aggregate principal amount of $25, or (2) following the successful remarketing
of the Series K Notes on August 16, 2004, one Series L Note in an aggregate
principal amount of $25 and an Applicable Ownership Interest in the 3-Year
Treasury Portfolio, subject to the Pledge of such Debt Securities or Applicable
Ownership Interest in such 3-Year Treasury Portfolio by the Holder pursuant to
the Pledge Agreement, (b) on or after the First Contract Settlement Date, (1)
one Series L Note in an aggregate principal amount of $25, or (2) following the
successful remarketing of the Series L Notes on August 16, 2005, an Applicable
Ownership Interest in the 4-Year Treasury Portfolio, subject to the Pledge of
such Series L Note or Applicable Ownership Interest in such 4-Year Treasury
Portfolio by the Holder pursuant to the Pledge Agreement, or (c) upon the
occurrence of a Tax Event Redemption prior to the Second Purchase Contract
Settlement Date, an Applicable Ownership Interest in a Tax Event Treasury
Portfolio, subject to the Pledge of such Applicable Ownership Interest in such
Tax Event Treasury Portfolio by the Holder pursuant to the Pledge Agreement, and
(ii) the rights and obligations of the Holder under one Purchase Contract.
"CORPORATE UNIT CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Corporate Units
specified on such certificate.
"CORPORATE UNIT REGISTER" and "CORPORATE UNIT REGISTRAR" have the
respective meanings specified in Section 3.5.
10
"COUPON RATE" with respect to a Debt Security means the percentage rate
per annum at which such Debt Security will bear interest.
"CURRENT MARKET PRICE" has the meaning specified in Section 5.6(a)(8).
"DEBT SECURITIES" means the Series K Notes and the Series L Notes.
"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" is either the First Early Settlement Rate or
the Second Early Settlement Rate, as applicable.
"EXCHANGE ACT" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"EXPIRATION DATE" has the meaning specified in Section 1.4.
"EXPIRATION TIME" has the meaning specified in Section 5.6(a)(6).
"FAILED REMARKETING" means a remarketing that does not occur because a
condition precedent to such remarketing is not fulfilled, or if in spite of
using their reasonable efforts, the Remarketing Agents cannot remarket the
appropriate Debt Securities of Holders of Corporate Units at a price not less
than 100% of the applicable Treasury Portfolio Purchase Price, in the case of
the remarketings of Debt Securities on the third Business Day immediately
preceding each of August 16, 2004 and August 16, 2005, or 100% of the aggregate
principal amount of such Debt Securities, in the case of the remarketings of
Debt Securities on the third Business Day immediately preceding each of November
16, 2004 and November 16, 2005, in each case, plus accrued and unpaid interest.
"FIRST EARLY SETTLEMENT RATE" has the meaning specified in Section
5.9(b).
"FIRST PURCHASE CONTRACT SETTLEMENT DATE" means November 16, 2004.
"GLOBAL CERTIFICATE" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Depositary or a nominee
thereof.
"HOLDER," when used with respect to a Security, means the Person in
whose name the Security evidenced by a Corporate Unit Certificate and/or a
Treasury Unit Certificate is registered on the Corporate Unit Register and/or
the Treasury Unit Register, as the case may be.
11
"INDENTURE" means the Indenture dated as of October 1, 2001 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.
"ISSUER ORDER" or "ISSUER REQUEST" means a written order or request
signed in the name of the Company by an Authorized Officer and delivered to the
Agent.
"NYSE" has the meaning specified in Section 5.1.
"OFFICER'S CERTIFICATE" means a certificate signed by an authorized
signatory of the Company establishing the terms of the debt securities of any
series pursuant to the Indenture.
"OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or an Affiliate and
who shall be reasonably acceptable to the Agent.
"OUTSTANDING," with respect to any Corporate Unit or Treasury Unit
means, as of the date of determination, all Corporate Units or Treasury Units
evidenced by Certificates theretofore authenticated, executed and delivered
under this Agreement, except:
(i) If a Termination Event has occurred, (A) Treasury Units for
which Treasury Securities have been deposited with the Agent in trust for the
Holders of such Treasury Units and (B) Corporate Units for which Debt
Securities or the appropriate Applicable Ownership Interest in a Treasury
Portfolio (or as contemplated in Section 3.15 hereto with respect to a
Holder's interest in the Treasury Portfolio, cash), as the case may be, has
been theretofore deposited with the Agent in trust for the Holders of such
Corporate Units;
(ii) Corporate Units and Treasury Units evidenced by Certificates
theretofore canceled by the Agent or delivered to the Agent for cancellation or
deemed canceled pursuant to the provisions of this Agreement; and
(iii) Corporate Units and Treasury Units evidenced by Certificates in
exchange for or in lieu of which other Certificates have been authenticated,
executed on behalf of the Holder and delivered pursuant to this Agreement, other
than any such Certificate in respect of which there shall have been presented to
the Agent proof satisfactory to it that such Certificate is held by a bona fide
purchaser in whose hands the Corporate Units or Treasury Units evidenced by such
Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite number of the Corporate Units or Treasury Units have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Corporate Units or Treasury Units owned by the Company or any Affiliate of the
Company shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Agent shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Corporate Units or Treasury Units which a Responsible Officer of the Agent knows
to be so owned shall be so disregarded. Corporate Units or Treasury Units so
owned which have been pledged in good faith may be regarded as Outstanding
Securities if the pledgee establishes to
12
the satisfaction of the Agent the pledgee's right so to act with respect to such
Corporate Units or Treasury Units and that the pledgee is not the Company or any
Affiliate of the Company.
"PAYMENT DATE" means each February 16, May 16, August 16 and November
16, commencing November 16, 2001.
"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 a Treasury Portfolio, in each case constituting a part of the
Securities.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Agent, as purchase contract agent and as
attorney-in-fact for the Holders from time to time of Securities, the Collateral
Agent, the Custodial Agent and the Securities Intermediary.
"PREDECESSOR CERTIFICATE" means a Predecessor Corporate Unit
Certificate or a Predecessor Treasury Unit Certificate.
"PREDECESSOR CORPORATE UNIT CERTIFICATE" of any particular Corporate
Unit Certificate means every previous Corporate Unit Certificate evidencing all
or a portion of the rights and obligations of the Company and the Holder under
the Corporate Unit Certificate evidenced thereby; and, for the purposes of this
definition, any Corporate Unit Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Corporate Unit Certificate shall be deemed to evidence the same rights
and obligations of the Company and the Holder as the mutilated, destroyed, lost
or stolen Corporate Unit Certificate.
"PREDECESSOR TREASURY UNIT CERTIFICATE" of any particular Treasury Unit
Certificate means every previous Treasury Unit Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Treasury Unit Certificate evidenced thereby; and, for the purposes of this
definition, any Treasury Unit Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Treasury Unit Certificate shall be deemed to evidence the same rights and
obligations of the Company and the Holder as the mutilated, destroyed, lost or
stolen Treasury Unit Certificate.
"PRIMARY TREASURY DEALER" means a primary U.S. government securities
dealer in
New York City.
"PROCEEDS" has the meaning set forth in 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 (A) obligating the Company to sell
to the Holder of such Security and the Holder of such Security to purchase (i)
not later than the First Purchase Contract Settlement Date, for $25 in cash, a
number of newly issued shares of Common Stock equal to the applicable Settlement
Rate and (ii) not later than the Second Purchase Contract Settlement Date, for
$25 in cash, a number of newly
13
issued shares of Common Stock equal to the applicable Settlement Rate, and (B)
obligating the Company to pay the Holder Contract Adjustment Payments, on the
terms and subject to the conditions set forth in Article Five hereof.
"PURCHASE CONTRACT SETTLEMENT DATE" means, as applicable, the First
Purchase Contract Settlement Date or the Second Purchase Contract Settlement
Date.
"PURCHASE CONTRACT SETTLEMENT FUND" has the meaning specified in
Section 5.5.
"PURCHASE PRICE" has the meaning specified in Section 5.1.
"PURCHASED SHARES" has the meaning specified in Section 5.6(a)(6).
"QUOTATION AGENT" means (i) ▇▇▇▇▇▇▇ ▇▇▇▇▇ Government Securities, Inc.
and its respective successors, provided, however, that, if the foregoing shall
cease to be a Primary Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer
selected by the Company.
"RECORD DATE" for the payment of interest, distribution and Contract
Adjustment Payments payable on any Payment Date means, as to any Global
Certificate, the Business Day next preceding such Payment Date, and as to any
other Certificate, a day selected by the Company which shall be at least one
Business Day but 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 for each Debt Security, the product of (i)
the principal amount of such Debt Security and (ii) a fraction whose numerator
is the applicable Treasury Portfolio Purchase Price and whose denominator is the
Applicable Principal Amount.
"REDEMPTION PRICE" means an amount per Debt Security equal to the
Redemption Amount plus accrued and unpaid interest, if any, to the date of
redemption.
"REGISTER" means the Corporate Unit Register and the Treasury Unit
Register.
"REGISTRAR" means the Corporate Unit Registrar and the Treasury Unit
Registrar.
"REMAINING STATED AMOUNT" means $25, which is equal to one-half of the
Stated Amount of the Corporate Unit and the face amount of the Treasury Unit,
and is intended to reflect the settlement of one-half of each Purchase Contract
on or prior to the First Purchase Contract Settlement Date.
"REMARKETING AGENTS" has the meaning specified in Section 5.4.
"REMARKETING AGREEMENT" means a Remarketing Agreement contemplated by
Section 5.4 by and between the Company, the Remarketing Agents and the Purchase
Contract Agent, including any supplements thereto.
"REMARKETING FEE" means an amount not exceeding 25 basis points (.25%)
of (i) the applicable Treasury Portfolio Purchase Price, in the case of any
successful remarketing of Debt Securities on the third Business Day immediately
preceding each of August 16, 2004 and August 16, 2005, or (ii) the aggregate
principal amount of the remarketed Debt Securities, in the case of any
successful
14
remarketing of Debt Securities on the third Business Day immediately preceding
each of November 16, 2004 and November 16, 2005.
"REORGANIZATION EVENT" has the meaning specified in Section 5.6(b).
"RESET AGENT" means ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated,
or such other Reset Agent as the Company shall select from time to time.
"RESET ANNOUNCEMENT DATE" means the seventh Business Day immediately
preceding the applicable Reset Date, the date on which the applicable Series K
Reset Spread or Series L Reset Spread, as applicable, and the Applicable
Benchmark Treasury will be announced by the Company.
"RESET DATE" means, as applicable, the Series K Reset Date or the
Series L Reset Date.
"RESET RATE" means, as applicable, the Series K Reset Rate or the
Series L Reset Rate.
"RESPONSIBLE OFFICER," when used with respect to the Agent, means any
Vice President, Assistant Vice President, Trust Officers or other officer of the
Agent assigned by the Agent to the Corporate Trust Administration Division of
the Agent (or any successor division or department of the Agent).
"SECOND EARLY SETTLEMENT RATE" has the meaning specified in Section
5.9(b).
"SECOND PURCHASE CONTRACT SETTLEMENT DATE" means November 16, 2005.
"SECURITY" means a Corporate Unit or a Treasury Unit.
"SENIOR INDEBTEDNESS" means indebtedness of any kind of the Company
(including the Debt Securities) unless the instrument under which such
indebtedness is incurred expressly provides that it is in parity or subordinate
in right of payment to the Contract Adjustment Payments.
"SERIES K NOTES" means the series of Debt Securities of the Company
designated Series K Senior Notes due November 16, 2006 to be issued under the
Indenture.
"SERIES K RESET DATE" means August 16, 2004 or, if the remarketing of
the Series K Notes on the third Business Day immediately preceding August 16,
2004 results in a Failed Remarketing, November 16, 2004.
"SERIES K RESET RATE" means the Coupon Rate to be in effect for the
Series K Notes on and after the Series K Reset Date and determined as provided
in Section 4.1.
"SERIES K RESET SPREAD" means, an amount determined by the Reset Agent
which, when added to the Applicable Benchmark Treasury in effect on the third
Business Day immediately preceding the Series K Reset Date, will produce the
rate the Series K Notes should bear in order to have an approximate market value
on the third Business Day immediately preceding the Series K Reset Date of
100.5% of (a) the 3-Year Treasury Portfolio Purchase Price, if the Series K
Reset Date is August 16, 2004, or (b) their aggregate principal amount if the
Series K Reset Date is November 16, 2004; provided that (i) the Company may
limit the Series K Reset Rate to be no higher than the rate on the Applicable
Benchmark Treasury on such Business Day plus 200 basis points (2.0%); (ii) such
market value may be less than 100.5% if the Company exercises such right to
limit the Series K Reset Rate; and (iii) the Series D Reset Rate shall in no
event exceed the maximum permitted by applicable law.
15
"SERIES L NOTES" means the series of Debt Securities of the Company
designated Series L Senior Notes due November 16, 2007 to be issued under the
Indenture.
"SERIES L RESET DATE" means August 16, 2005 or, if the remarketing of
the Series L Notes on the third Business Day immediately preceding August 16,
2005 results in a Failed Remarketing, November 16, 2005.
"SERIES L RESET RATE" means the Coupon Rate to be in effect for the
Series L Notes on and after the Series L Reset Date and determined as provided
in Section 4.1.
"SERIES L RESET SPREAD" means an amount determined by the Reset Agent
which, when added to the Applicable Benchmark Treasury in effect on the third
Business Day immediately preceding the Series L Reset Date, will produce the
rate the Series L Notes should bear in order to have an approximate market value
on the third Business Day immediately preceding the Series L Reset Date of
100.5% of (a) the 4-Year Treasury Portfolio Purchase Price, if the Series L
Reset Date is August 16, 2005, or (b) their aggregate principal amount if the
Series L Reset Date is November 16, 2005; provided that (i) the Company may
limit the Series L Reset Rate to be no higher than the rate on the Applicable
Benchmark Treasury on such Business Day plus 200 basis points (2.0%); (ii) such
market value may be less than 100.5% if the Company exercises such right to
limit the Series L Reset Rate; and (iii) the Series L Reset Rate shall in no
event exceed the maximum permitted by applicable law.
"SETTLEMENT RATE" has the meaning specified in Section 5.1.
"STATED AMOUNT" means $50, which is equal to the stated amount of the
Corporate Unit and the face amount of the Treasury Unit.
"TAX EVENT" means the receipt by the Company of an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, change in, or announced
proposed change in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, (b) any amendment to or change in an interpretation or
application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any interpretation or
pronouncement by any such legislative body, court, governmental agency or
regulatory authority that provides for a position with respect to such laws or
regulations that differs from the generally accepted position on the date the
Debt Securities are issued, which amendment, change or proposed change is
effective or which interpretation or pronouncement is announced on or after the
date of issuance of the Debt Securities, there is more than an insubstantial
risk that interest payable by the Company on the Debt Securities would not be
deductible, in whole or in part, by the Company for United States federal income
tax purposes.
"TAX EVENT REDEMPTION" means, if a Tax Event shall occur and be
continuing, the redemption of Debt Securities, in whole but not in part, at the
option of the Company on not less than 30 days or more than 60 days notice.
"TAX EVENT REDEMPTION DATE" means the date on which a Tax Event
Redemption is to occur.
"TAX EVENT TREASURY PORTFOLIO" means, with respect to the Applicable
Principal Amount of Debt Securities (a) if the Tax Event Redemption Date occurs
prior to the Series K Reset Date, a portfolio of zero-coupon U.S. Treasury
Securities consisting of (i) interest or principal strips of U.S. Treasury
Securities that mature on or prior to November 16, 2004 in an aggregate amount
equal to the Applicable Principal Amount of Series K Notes and interest or
principal strips of U.S. Treasury Securities
16
that mature on or prior to November 16, 2005 in an aggregate amount equal to the
Applicable Principal Amount of Series L Notes and (ii) with respect to each
scheduled interest payment date on the Debt Securities of each series that
occurs after the Tax Event Redemption Date, interest or principal strips of U.S.
Treasury Securities that mature on or prior to such dates in an aggregate amount
equal to the aggregate interest payment that would be due on the Applicable
Principal Amount of the Debt Securities on such date, assuming the Coupon Rate
of the Debt Securities of each series is not reset on any Reset Date, (b) if the
Tax Event Redemption occurs on or after the Series K Reset Date and prior to the
Series L Reset Date, a portfolio of zero-coupon U.S. Treasury Securities
consisting of (i) interest or principal strips of U.S. Treasury Securities that
mature on or prior to November 16, 2006 in an aggregate amount equal to the
Applicable Principal Amount of Series K Notes, and interest or principal strips
of U.S. Treasury Securities that mature on or prior to November 16, 2005 in an
aggregate amount equal to the Applicable Principal Amount of Series L Notes, and
(ii) with respect to each scheduled interest payment date on Debt Securities of
each series that occurs after the Tax Event Redemption Date and on or before
November 16, 2006, in the case of the Series K Notes, or on or before November
16, 2005, in the case of the Series L Notes, interest or principal strips of
U.S. Treasury Securities that mature on or prior to such date in an aggregate
amount equal to the aggregate interest payment that would be due on the
Applicable Principal Amount of the Debt Securities, on that date assuming the
Coupon Rate of the Series L Notes was not reset on a Series L Reset Date, and
(c) if the Tax Event Redemption Date occurs after the Series L Reset Date, a
portfolio of zero-coupon U.S. Treasury Securities consisting of (i) principal or
interest strips of U.S. Treasury Securities that mature on or prior to November
16, 2006 in an aggregate principal amount equal to the Applicable Principal
Amount of Series K Notes and principal or interest strips of U.S. Treasury
Securities that mature on or prior to November 16, 2007 in an aggregate
principal amount equal to the Applicable Principal Amount of the Series L Notes
and (ii) with respect to each scheduled interest payment date on the Debt
Securities that occurs after the Tax Event Redemption Date, interest or
principal strips of U.S. Treasury Securities that mature on or prior to such
date in an aggregate amount equal to the aggregate interest payment that would
be due on the Applicable Principal Amount of the Debt Securities on such date.
"TAX EVENT TREASURY PORTFOLIO PURCHASE PRICE" means the lowest
aggregate price quoted by a Primary Treasury Dealer to the Quotation Agent on
the third Business Day immediately preceding the Tax Event Redemption Date for
the purchase of the Tax Event Treasury Portfolio for settlement on the Tax Event
Redemption Date.
"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 Second 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 Second 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 Second 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 Second 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 Second Purchase Contract Settlement Date
the Company shall file a petition for relief under the Bankruptcy Code, or shall
consent to the
17
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, as applicable, a 3-Year Treasury Portfolio,
a 4-Year Treasury Portfolio or a Tax Event Treasury Portfolio.
"TREASURY PORTFOLIO PURCHASE PRICE" means, as applicable, the 3-Year
Treasury Portfolio Purchase Price, the 4-Year Treasury Portfolio Purchase Price
or the Tax Event Treasury Portfolio Purchase Price.
"TREASURY SECURITY" means, as applicable, the 3-Year Treasury Security
or the 4-Year Treasury Security.
"TREASURY UNITS" means a Security, initially issued in substantially
the form set forth as Exhibit B hereto in a Stated Amount of $50, which
represents (i)(a) prior to the First Purchase Contract Settlement Date, a 1/40
undivided beneficial ownership in a 3-year Treasury Security having a principal
amount at maturity equal to $1,000 and a 1/40 undivided beneficial interest in a
4-year Treasury Security having a principal amount at maturity equal to $1,000,
and (b) from the First Purchase Contract Settlement Date to the Second Purchase
Contract Settlement Date, a 1/40 undivided beneficial interest in a 4-year
Treasury Security having a principal amount at maturity equal to $1,000, subject
to the Pledge of each such Treasury Security by the Holder pursuant to the
Pledge Agreement, and (ii) the rights and obligations of the Company and the
Holder under one Purchase Contract.
"TREASURY UNIT CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Treasury Units specified
on such certificate.
"TREASURY UNIT REGISTER" and "TREASURY UNIT REGISTRAR" have the
respective meanings specified in Section 3.5.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated October
10, 2001 among the Company, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
and ▇▇▇▇▇▇▇, Sachs & Co., as representatives of the underwriters named therein.
"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
18
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;
(3) a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO AGENT.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4 ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Agent and, where it is hereby expressly
required, to the Company. Such instrument or
19
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.
(c) The ownership of Securities shall be proved by the Corporate Unit
Register or the Treasury Unit Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Certificate shall bind every
future Holder of the same Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof in respect of anything done, omitted or suffered to be done
by the Agent or the Company in reliance thereon, whether or not notation of
such action is made upon such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Agreement to be given, made
or taken by Holders of Securities. If any record date is set pursuant to
this paragraph, the Holders of the Outstanding Corporate Units and the
Outstanding Treasury Units, as the case may be, on such record date, and no
other Holders, shall be entitled to take the relevant action with respect
to the Corporate Units or the Treasury Units, as the case may be, whether
or not such Holders remain Holders after such record date; provided that no
such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite number of
Outstanding Securities on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be canceled 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.
20
SECTION 1.5 NOTICES.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, to the Agent at The Bank of
New York,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, 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 The Chase Manhattan Bank at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Global Trust Services, 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.
21
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 Corporate Unit
Certificates or the Treasury Unit Certificates) payment of the Contract
Adjustment Payments, if any, shall not be made on such date, but such payments
shall be made on the next succeeding Business Day with the same force and effect
as if made on such Payment Date, and no interest shall accrue or be payable by
the Company or any Holder for the period from and after any such Payment Date,
except that, if such next succeeding Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day with the same force and effect as if made on such Payment Date.
In any case where any Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement, the
Corporate Unit Certificates or the Treasury Unit Certificates), the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the immediately following Business Day with the same force and
effect as if performed on the Purchase Contract Settlement Date.
22
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 Corporate Unit Certificates (including the form of Purchase
Contract forming part of the Corporate Units evidenced thereby) shall be in
substantially the form set forth in Exhibit A hereto, with such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Corporate Units are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Corporate Unit Certificates, as evidenced by their
execution of the Corporate Unit Certificates.
The definitive Corporate Unit Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Corporate Units evidenced by such Corporate Unit Certificates, consistent with
the provisions of this Agreement, as evidenced by their execution thereof.
The Treasury Unit Certificates (including the form of Purchase
Contracts forming part of the Treasury Units evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Treasury Units may be listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Treasury Unit Certificates, as evidenced by their
execution of the Treasury Unit Certificates.
The definitive Treasury Unit Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Treasury Units evidenced by such Treasury Unit Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE
23
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
PURCHASE
CONTRACT AGREEMENT.
SECTION 2.2 FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION.
The form of the Agent's certificate of authentication of the Corporate
Units shall be in substantially the form set forth on the form of the Corporate
Unit Certificates set forth as Exhibit A hereto.
The form of the Agent's certificate of authentication of the Treasury
Units shall be in substantially the form set forth on the form of the Treasury
Unit Certificates set forth as Exhibit B hereto.
ARTICLE III
THE SECURITIES
SECTION 3.1 TITLE AND TERMS; DENOMINATIONS.
The aggregate number of Corporate Units and Treasury Units evidenced by
Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to 20,000,000 units except for Certificates authenticated,
executed and delivered upon registration of transfer of, in exchange for, or in
lieu of, other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.12, 3.13, 5.9
or 8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Corporate Unit or Treasury Unit and any integral
multiple thereof.
SECTION 3.2 RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES.
Each Corporate Unit Certificate shall evidence the number of Corporate
Units specified therein, with each such Corporate Unit representing the
ownership by the Holder thereof of a beneficial interest in the Debt Securities
and/or Applicable Ownership Interest in a Treasury Portfolio, as the case may
be, subject to the Pledge of such Debt Securities and/or Applicable Ownership
Interest in a Treasury Portfolio, as the case may be, by such Holder pursuant to
the Pledge Agreement, and the rights and obligations of the Holder thereof and
the Company under one Purchase Contract. The Agent as attorney-in-fact for, and
on behalf of, the Holder of each Corporate Unit shall pledge, pursuant to the
Pledge Agreement, each Debt Security and/or the Applicable Ownership Interest in
a Treasury Portfolio, as the case may be, forming a part of such Corporate Unit,
to the Collateral Agent and grant to the Collateral Agent a security interest in
the right, title, and interest of such Holder in such Debt Security and/or
Applicable Ownership Interest in a Treasury Portfolio, as the case may be, for
the benefit of the Company, to secure the obligation of the Holder under one
Purchase Contract to purchase the Common Stock of the Company.
Each Treasury Unit Certificate shall evidence the number of Treasury
Units specified therein, with each such Treasury Unit representing the ownership
by the Holder thereof, prior to the First Purchase Contract Settlement Date, of
a 1/40 undivided beneficial interest in both a 3-Year Treasury Security and a
4-Year Treasury Security and, on and after the First Purchase Contract
Settlement Date, of a 1/40 undivided beneficial interest in a 4-Year Treasury
Security, and each subject to the Pledge of such Treasury Security by such
Holder pursuant to the Pledge Agreement, and the rights and obligations of the
Holder thereof and the Company under one Purchase Contract. The Agent as
attorney-in-fact for, and on behalf of, the Holder of each Treasury Unit shall
pledge, pursuant to the Pledge Agreement, each
24
Treasury Security forming a part of such Treasury Unit, to the Collateral Agent
and grant to the Collateral Agent a security interest in the right, title, and
interest of such Holder in such Treasury Security for the benefit of the
Company, to secure the obligation of the Holder under one Purchase Contract to
purchase the Common Stock of the Company.
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Agent for authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such Certificates, and the
Agent in accordance with such Issuer Order shall authenticate, execute on behalf
of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President, one of its Vice Presidents, its Treasurer,
one of its Assistant Treasurers, its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Certificates may be
manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent shall
be conclusive evidence that the Holder of such Certificate has entered into the
Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or
be valid or obligatory for any purpose unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Agent by manual signature, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder.
SECTION 3.4 TEMPORARY CERTIFICATES.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holders, and deliver, in lieu of such definitive Certificates,
temporary Certificates which are in substantially the forms set forth in Exhibit
A and Exhibit B hereto, with such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Corporate Units or Treasury Units are listed,
or as may, consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary
25
Certificates shall be exchangeable for definitive Certificates upon surrender of
the temporary Certificates at the Corporate Trust Office, at the expense of the
Company and without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Certificates, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver in exchange therefor, one or more definitive Certificates of like tenor
and denominations and evidencing a like number of Corporate Units or Treasury
Units, as the case may be, as the temporary Certificate or Certificates so
surrendered. Until so exchanged, the temporary Certificates shall in all
respects evidence the same benefits and the same obligations with respect to the
Corporate Units or Treasury Units, as the case may be, evidenced thereby as
definitive Certificates.
SECTION 3.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
The Agent shall keep at the Corporate Trust Office a register (the
"Corporate Unit Register") in which, subject to such reasonable regulations as
it may prescribe, the Agent shall provide for the registration of Corporate Unit
Certificates and of transfers of Corporate Unit Certificates (the Agent, in such
capacity, the "Corporate Unit Registrar") and a register (the "Treasury Unit
Register") in which, subject to such reasonable regulations as it may prescribe,
the Agent shall provide for the registration of the Treasury Unit Certificates
and transfers of Treasury Unit Certificates (the Agent, in such capacity, the
"Treasury Unit Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of any authorized denominations, like
tenor, and evidencing a like number of Corporate Units or Treasury Units as the
case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Corporate Units or Treasury Units, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of the
Holder, and deliver the Certificates which the Holder making the exchange is
entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of a Certificate shall evidence the ownership of the same number of Corporate
Units or Treasury Units, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this Agreement as the
Corporate Units or Treasury Units, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of transfer
or for exchange shall (if so required by the Agent) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Agent, duly executed by the Holder thereof or its attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Agent may require payment
from the Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates, other than any exchanges pursuant to Sections 3.6 and
8.5 not involving any transfer.
26
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.
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
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
27
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 Corporate
Units or Treasury Units, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i) evidence
to their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity at the cost of the Holder as may be required by
them to hold each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Agent that such Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen
Certificate, a new Certificate, evidencing the same number of Corporate Units or
Treasury Units, as the case may be, and bearing a Certificate number not
contemporaneously outstanding.
Notwithstanding the foregoing, the Company 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
preceding a Purchase Contract Settlement 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
Second 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.
28
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 on the Corporate Unit
Register or the Treasury Unit Register, as applicable, as the owner of the
Corporate Units or Treasury Units evidenced thereby, for the purpose of
receiving interest on the Debt Securities or distributions on the maturing
quarterly interest strips of a Treasury Portfolio, as applicable, receiving
payments of Contract Adjustment Payments, performance of the Purchase Contracts
and for all other purposes whatsoever, whether or not any interest on the Debt
Securities or the Contract Adjustment Payments payable in respect of the
Purchase Contracts constituting a part of the Corporate Units or Treasury Units
evidenced thereby shall be overdue and notwithstanding any notice to the
contrary, and neither the Company nor the Agent, nor any agent of the Company or
the Agent, shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing herein shall prevent the Company, the Agent or any agent of the Company
or the Agent, from treating the Clearing Agency as the sole Holder of such
Global Certificate or from giving effect to any written certification, proxy or
other authorization furnished by any Clearing Agency (or its nominee), as
Holder, with respect to such Global Certificate or impair, as between such
Clearing Agency and owners of beneficial interests in such Global Certificate,
the operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
SECTION 3.12 CANCELLATION.
All Certificates surrendered for delivery of shares of Common Stock on
or after the Second 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 Corporate Unit shall, if surrendered to any Person other
than the Agent, be delivered to the Agent and, if not already canceled, shall be
promptly canceled 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 canceled 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 canceled as
provided in this Section, except as expressly permitted by this Agreement. All
canceled 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 canceled
or for cancellation.
SECTION 3.13 ESTABLISHMENT OR REESTABLISHMENT OF TREASURY UNITS.
A Holder of a Corporate Unit may, at any time on or prior to the fifth
Business Day immediately preceding the Second Purchase Contract Settlement Date,
create or recreate a Treasury Unit and separate the Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury
29
Portfolio, as applicable, from the related Purchase Contract in respect of such
Corporate Unit by substituting 3-Year Treasury Securities and 4-Year Treasury
Securities for all, but not less than all, of the Series K Note and the Series L
Note, respectively, or appropriate Applicable Ownership Interest in a 3-Year
Treasury Portfolio or 4-Year Treasury Portfolio, respectively, or a Tax Event
Treasury Portfolio, as the case may be, that form a part of such Corporate Unit
in accordance with this Section 3.13; provided, however, that if a Treasury
Portfolio has not replaced any Debt Securities as a component of Corporate Units
as a result of a successful remarketing or a Tax Event Redemption, such
Collateral Substitutions may not be made during the period from the fifth
Business Day immediately preceding the First Purchase Contract Settlement Date
through the First Purchase Contract Settlement Date; if a 3-Year Treasury
Portfolio has replaced Series K Notes as a component of Corporate Units as a
result of a successful remarketing of Series K Notes, and a Tax Event Redemption
has not occurred, such Collateral Substitutions may not be made during the
period from the second Business Day immediately preceding the First Purchase
Contract Settlement Date through the First Purchase Contract Settlement Date;
and if a Tax Event Redemption has occurred or the 4-Year Treasury Portfolio has
replaced the Series L Notes as a result of a successful remarketing of the
Series L Notes, Holders of such Corporate Units may make such Collateral
Substitutions at any time on or prior to the second Business Day immediately
preceding the Second Purchase Contract Settlement Date (but not during the
period from the second Business Day immediately preceding the First Purchase
Date through the First Purchase Contract Settlement Date). Holders may make
Collateral Substitutions and establish Treasury Units (i) only in integral
multiples of 40 Corporate Units if only Debt Securities are being substituted by
Treasury Securities, or (ii) only in integral multiples of 1,600,000 Corporate
Units if the appropriate Applicable Ownership Interests in any Treasury
Portfolio are being substituted by any Treasury Security. To create 40 Treasury
Units (if a Tax Event Redemption has not occurred and Series K Notes and Series
L Notes remain components of Corporate Units), or 1,600,000 Treasury Units (if a
Tax Event Redemption has occurred or a Treasury Portfolio has replaced either
series of Debt Securities as a result of a successful remarketing of such Debt
Securities), the Corporate Unit Holder shall
(a) if a Treasury Portfolio has not replaced any Debt Securities as a
component of Corporate Units as a result of a successful remarketing or a
Tax Event Redemption, (i) prior to the fifth Business Day preceding the
First Purchase Contract Settlement Date, deposit with the Collateral Agent
a 3-Year Treasury Security having a principal amount at maturity of $1,000
and a 4-Year Treasury Security having a principal amount at maturity of
$1,000, or (ii) after the First Purchase Contract Settlement Date and prior
to the fifth Business Day preceding the Second Purchase Contract Settlement
Date, deposit with the Collateral Agent a 4-Year Treasury Security having a
principal amount at maturity of $1,000; or
(b) if a 3-Year Treasury Portfolio has replaced Series K Notes as a
component of Corporate Units as a result of a successful remarketing of
Series K Notes and a Tax Event Redemption has not occurred, prior to the
second Business Day immediately preceding the First Purchase Contract
Settlement Date, deposit with the Collateral Agent 3-Year Treasury
Securities having an aggregate principal amount at maturity of $40,000,000
and 4-Year Treasury Securities having an aggregate principal amount at
maturity of $40,000,000; or
(c) if a 4-Year Treasury Portfolio has replaced Series L Notes as a
component of Corporate Units as a result of a successful remarketing of
Series L Notes or a Tax Event Redemption has occurred, (i) prior to the
second Business Day immediately preceding the First Purchase Contract
Settlement Date, deposit with the Collateral Agent 3-Year Treasury
Securities having an aggregate principal amount at maturity of $40,000,000
and 4-Year Treasury Securities having an aggregate principal amount at
maturity of $40,000,000, or (ii) after the First Purchase Contract
Settlement Date and prior to the second Business Day immediately preceding
the
30
Second Purchase Contract Settlement Date, 4-Year Treasury Securities
having an aggregate principal amount at maturity of $40,000,000; and
(d) in each case, transfer the 40 Corporate Units, or, in the event a
Treasury Portfolio is a component of Corporate Units, 1,600,000 Corporate
Units, to the Agent accompanied by a notice to the Agent, substantially in
the form of Exhibit B to the Pledge Agreement, stating that the Holder has
transferred the relevant types and amounts of Treasury Securities to the
Collateral Agent and requesting that the Agent instruct the Collateral
Agent to release the applicable Debt Securities or the appropriate
Applicable Ownership Interest in the applicable Treasury Portfolio, as the
case may be, underlying such Corporate Unit, whereupon the Agent shall
promptly give such instruction to the Collateral Agent, substantially in
the form of Exhibit A to the Pledge Agreement.
Upon receipt of the Treasury Securities described in clause (a), (b) or
(c) above and the instructions described in clause (d) above, in accordance with
the terms of the Pledge Agreement, the Collateral Agent will release from the
Pledge, to the Agent, on behalf of the Holder, Debt Securities or the
appropriate Applicable Ownership Interest in the applicable Treasury Portfolio,
as the case may be, that had been components of such Corporate Unit, free and
clear of the Company's security interest therein, and upon receipt thereof the
Agent shall promptly:
(i) cancel the related Corporate Units surrendered and transferred;
(ii) transfer the Debt Securities or the appropriate Applicable
Ownership Interest in the relevant Treasury Portfolio, as the case may be, that
had been components of such Corporate Unit to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Treasury Unit Certificate executed by the Company in accordance with Section 3.3
evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Corporate Units.
Holders who elect to separate the Debt Securities or the appropriate
Applicable Ownership Interest in the relevant Treasury Portfolio, as the case
may be, from the related Purchase Contracts and to substitute Treasury
Securities for such Debt Securities or the appropriate Applicable Ownership
Interest in the relevant Treasury Portfolio, as the case may be, shall be
responsible for any fees or expenses payable to the Collateral Agent for its
services as Collateral Agent in respect of the substitution, and the Company
shall not be responsible for any such fees or expenses.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Corporate Units or
fails to deliver a Corporate Unit Certificate to the Agent after depositing the
appropriate Treasury Securities with the Collateral Agent, the Debt Securities
or the appropriate Applicable Ownership Interest in the relevant Treasury
Portfolio, as the case may be, constituting a part of such Corporate Unit, and
any interest on such Debt Securities or distributions with respect to the
Applicable Ownership Interest in the relevant Treasury Portfolio, as the case
may be, shall be held in the name of the Agent or its nominee in trust for the
benefit of such Holder, until such Corporate Unit is so transferred or the
Corporate Unit Certificate is so delivered, as the case may be, or, until such
Holder provides evidence satisfactory to the Company and the Agent that such
Corporate Unit Certificate has been destroyed, lost or stolen, together with any
indemnity that may be required by the Agent and the Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying a Corporate Unit remains in effect, such Corporate Unit
shall not be separable into its constituent parts,
31
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 Corporate Unit may be
acquired, and may be transferred and exchanged, only as an entire Corporate
Unit.
SECTION 3.14 ESTABLISHMENT OR REESTABLISHMENT OF CORPORATE UNITS.
A Holder of a Treasury Unit may, at any time on or prior to the fifth
Business Day immediately preceding the Second Purchase Contract Settlement Date,
create or recreate Corporate Units by depositing with the Collateral Agent Debt
Securities or the appropriate Applicable Ownership Interest in a Treasury
Portfolio, as the case may be, having an aggregate principal amount equal to the
aggregate principal amount at maturity of, and in substitution for all, but not
less than all, of the Treasury Securities comprising part of the Treasury Unit
in accordance with this Section 3.14; provided, however, that if a Treasury
Portfolio has not replaced any Debt Securities as a component of Corporate Units
as a result of a successful remarketing or a Tax Event Redemption, such
Collateral Substitutions may not be made during the period from the fifth
Business Day immediately preceding the First Purchase Contract Settlement Date
through the First Purchase Contract Settlement Date; if a 3-Year Treasury
Portfolio has replaced Series K Notes as a component of Corporate Units as a
result of a successful remarketing of Series K Notes and a Tax Event Redemption
has not occurred, such Collateral Substitutions may not be made during the
period from the second Business Day immediately preceding the First Purchase
Contract Settlement Date through the First Purchase Contract Settlement Date;
and if a Tax Event Redemption has occurred or the 4-Year Treasury Portfolio has
replaced the Series L Notes as a result of a successful remarketing of the
Series L Notes, Holders of Treasury Units may make such Collateral Substitutions
at any time on or prior to the second Business Day immediately preceding the
Second Purchase Contract Settlement Date (but not during the period from the
second Business Day immediately preceding the First Purchase Contract Settlement
Date through the First Purchase Contract Settlement Date). Holders of Treasury
Units may make such Collateral Substitutions and establish Corporate Units (i)
only in integral multiples of 40 Treasury Units if Treasury Securities are being
replaced by only Debt Securities, or (ii) only in integral multiples of
1,600,000 Treasury Units if any Treasury Security is being replaced by the
Applicable Ownership Interest in a Treasury Portfolio. To create 40 Corporate
Units (if a Tax Event Redemption has not occurred and Series K Notes and Series
L Notes remain components of Corporate Units), or 1,600,000 Corporate Units (if
a Tax Event Redemption has occurred or a Treasury Portfolio has replaced either
series of Debt Securities as a result of a successful remarketing of such Debt
Securities), the Treasury Unit Holder shall
(a) if a Treasury Portfolio has not replaced any Debt Securities as a
component of Corporate Units as a result of a successful remarketing or a Tax
Event Redemption, (i) prior to the fifth Business Day preceding the First
Purchase Contract Settlement Date, deposit with the Collateral Agent $1,000 in
aggregate principal amount of Series K Notes and $1,000 in aggregate principal
amount of Series L Notes, or (ii) after the First Purchase Contract Settlement
Date, deposit with the Collateral Agent $1,000 in aggregate principal amount of
Series L Notes; or
(b) if a 3-Year Treasury Portfolio has replaced Series K Notes as a
component of Corporate Units as a result of a successful remarketing of Series K
Notes and a Tax Event Redemption has not occurred, prior to the second Business
Day immediately preceding the First Purchase Contract Settlement Date, deposit
with the Collateral Agent the Applicable Ownership Interest in a 3-Year Treasury
Portfolio and $40,000,000 aggregate principal amount of Series L Notes; or
(c) if a 4-Year Treasury Portfolio has replaced Series L Notes as a
component of Corporate Units as a result of a successful remarketing of Series L
Notes or a Tax Event Redemption has occurred prior to the second Business Day
immediately preceding the Second Purchase Contract Settlement Date, deposit with
the Collateral Agent the Applicable Ownership Interest in the applicable
32
Treasury Portfolio for each 1,600,000 Corporate Units being created by the
Holder, and having an aggregate principal amount of $80,000,000, or, if after
the First Purchase Contract Settlement Date, $40,000,000; and
(d) in each case, transfer and surrender the related 40 Treasury Units,
or in the event a Treasury Portfolio is a component of Corporate Units,
1,600,000 Corporate Units, to the Agent accompanied by a notice to the Agent,
substantially in the form of Exhibit B to the Pledge Agreement, stating that the
Holder has transferred the relevant amount of Debt Securities or the appropriate
Applicable Ownership Interest in the relevant Treasury Portfolio, as the case
may be, to the Collateral Agent and requesting that the Agent instruct the
Collateral Agent to release the Treasury Securities underlying such Treasury
Units, whereupon the Agent shall promptly give such instruction to the
Collateral Agent, substantially in the form of Exhibit A to the Pledge
Agreement.
Upon receipt of the Debt Securities or the appropriate Applicable
Ownership Interest in the applicable Treasury Portfolio, as the case may be,
described in clause (a), (b) or (c) above and the instructions described in
clause (d) above, in accordance with the terms of the Pledge Agreement, the
Collateral Agent will effect the release of the Treasury Securities having a
corresponding aggregate principal amount from the Pledge to the Agent free and
clear of the Company's security interest therein, and upon receipt thereof the
Agent shall promptly:
(i) cancel the related Treasury Units surrendered and transferred;
(ii) transfer the Treasury Securities that had been components of such
Treasury Units to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Corporate Unit Certificate executed by the Company in accordance with Section
3.3 evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Treasury Units.
Holders who elect to separate Treasury Securities from the related
Purchase Contract and to substitute Debt Securities or the Applicable Ownership
Interest in the relevant Treasury Portfolio, as the case may be, for such
Treasury Securities shall be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any such fees or
expenses.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.14 fails to effect a book-entry transfer of the Treasury Units or
fails to deliver a Treasury Unit Certificate to the Agent after depositing the
appropriate Debt Securities or Applicable Ownership Interest in the relevant
Treasury Portfolio with the Collateral Agent, the Treasury Securities
constituting a part of such Treasury Unit Certificate, and any interest on such
Treasury Securities, shall be held in the name of the Agent or its nominee in
trust for the benefit of such Holder, until such Treasury Unit is so transferred
or the Treasury Unit is so delivered, or until such Holder provides evidence
satisfactory to the Company and the Agent that such Treasury Unit has been
destroyed, lost or stolen, together with any indemnity that may be required by
the Agent and the Company.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Treasury Unit remains in effect, such Treasury Unit shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Treasury Unit in respect of the Treasury Security and
Purchase Contract comprising such Treasury Unit may be acquired, and may be
transferred and exchanged only as an entire Treasury Unit.
33
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 relevant Treasury Portfolio or the Treasury Securities, as the case may be,
underlying the Corporate Units and the Treasury Units pursuant to the terms of
the Pledge Agreement, the Agent shall request transfer instructions with respect
to such Debt Securities or the appropriate Applicable Ownership Interest in the
relevant Treasury Portfolio or Treasury Securities, as the case may be, from
each Holder by written request mailed to such Holder at its address as it
appears in the Corporate Unit Register or the Treasury Unit Register, as the
case may be. Upon book-entry transfer of a Corporate Unit Certificate or
Treasury Unit Certificate or delivery of a Corporate Unit Certificate or
Treasury Unit Certificate to the Agent with such transfer instructions, the
Agent shall transfer the Debt Securities, the appropriate Applicable Ownership
Interest in the relevant Treasury Portfolio or Treasury Securities, as the case
may be, underlying such Corporate Units or Treasury Units, as the case may be,
to such Holder by book-entry transfer, or other appropriate procedures, in
accordance with such instructions. In the event a Holder of Corporate Units or
Treasury Units fails to effect such transfer or delivery, the Debt Securities,
the appropriate Applicable Ownership Interest in the relevant Treasury Portfolio
or Treasury Securities, as the case may be, underlying such Corporate Units or
Treasury Units, as the case may be, and any interest thereon, shall be held in
the name of the Agent or its nominee in trust for the benefit of such Holder,
until such Corporate Units or Treasury Units are transferred or the Corporate
Unit Certificate or Treasury Unit Certificate is surrendered or such Holder
provides satisfactory evidence that such Corporate Unit Certificate or Treasury
Unit Certificate has been destroyed, lost or stolen, together with any indemnity
that may be required by the Agent and the Company. In the case of a Treasury
Portfolio or any Treasury Securities, the Agent may dispose of the subject
securities for cash and pay the applicable portion of such cash to the Holders
in lieu of such Holders' Applicable Ownership Interest in such Treasury
Portfolio, or any Treasury Securities, where such Holder would otherwise have
been entitled to receive less than $1,000 of any such security.
SECTION 3.16 NO CONSENT TO ASSUMPTION.
Each Holder of a Security, by acceptance thereof, 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, 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 any Treasury
Portfolio, as the case may be, which is paid on any Payment Date shall, subject
to receipt thereof by the Agent from the Collateral Agent as provided by the
terms of the Pledge Agreement, be paid to the Person in whose name the Corporate
Unit Certificate (or one or more Predecessor Corporate Unit Certificates) of
which such Debt Securities or the appropriate Applicable Ownership Interest in a
Treasury Portfolio, as the case may be, are a part is registered at the close of
business on the Record Date for such Payment Date.
Each Corporate Unit Certificate evidencing Debt Securities delivered
under this Agreement upon registration of transfer of or in exchange for or in
lieu of any other Corporate Unit
34
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 Corporate Unit Certificate.
In the case of any Corporate Unit with respect to which Cash Settlement
of the underlying applicable portion of the Purchase Contract is effected on the
Business Day immediately preceding the applicable 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 any Treasury Portfolio, as the case
may be, underlying such Corporate Unit otherwise payable on such Payment Date
shall be payable on such Payment Date notwithstanding such Cash Settlement or
Early Settlement or Collateral Substitution, and such interest or distributions
shall, subject to receipt thereof by the Agent, be payable to the Person in
whose name the Corporate Unit Certificate (or one or more Predecessor Corporate
Unit Certificates) was registered at the close of business on the Record Date.
Except as otherwise expressly provided in the immediately preceding sentence, in
the case of any Corporate Unit with respect to which Cash Settlement or Early
Settlement of the underlying Purchase Contract is effected on the Business Day
immediately preceding the applicable Purchase Contract Settlement Date or an
Early Settlement Date, as the case may be, or with respect to which a Collateral
Substitution has been effected, payment of interest on the related Debt
Securities or distributions with respect to the appropriate Applicable Ownership
Interest in the related Treasury Portfolio, as the case may be, that would
otherwise be payable after the applicable Purchase Contract Settlement Date or
Early Settlement Date shall not be payable hereunder to the Holder of such
Corporate Unit; provided, however, that to the extent that such Holder continues
to hold the separated Debt Securities that formerly comprised a part of such
Holder's Corporate Unit, such Holder shall be entitled to receive the payment of
interest on such separated Debt Securities.
The applicable Coupon Rate on the Series K Notes to be in effect on and
after the Series K Reset Date will be reset on the third Business Day
immediately preceding the Series K Reset Date to the Series K Reset Rate (such
Series K Reset Rate to be effective from and after the Series K Reset Date). On
each Reset Announcement Date with respect to Series K Notes, the Series K Reset
Spread and the Applicable Benchmark Treasury to be used to determine the Series
K Reset Rate will be announced by the Company. On the Business Day immediately
following each such Reset Announcement Date, the Company will cause a notice of
such Series K Reset Spread and Applicable Benchmark Treasury to be published in
an Authorized Newspaper.
The applicable Coupon Rate on the Series L Notes to be in effect on and
after the Series L Reset Date will be reset on the third Business Day
immediately preceding the Series L Reset Date to the Series L Reset Rate (such
Series L Reset Rate to be in effect from and after the Series L Reset Date). On
each Reset Announcement Date with respect to Series L Notes, the Series L Reset
Spread and the Applicable Benchmark Treasury to be used to determine the Series
L Reset Rate will be announced by the Company. On the Business Day immediately
following each such Reset Announcement Date, the Company will cause a notice of
such Series L Reset Spread and Applicable Benchmark Treasury to be published in
an Authorized Newspaper.
Not later than 7 calendar days nor more than 15 calendar days prior to
each Reset Announcement Date and each Purchase Contract Settlement Date, if such
Purchase Contract Settlement Date is not also a Reset Date, the Company will
request that the Depositary notify (or any successor Clearing Agency or its
nominee) by first-class mail, postage prepaid, the Beneficial Owners or Clearing
Agency Participants holding Corporate Units or Treasury Units, of such Reset
Announcement Date and any procedures to be followed by such Holders of
Securities, who intend to settle their obligation under
35
the applicable portion of the Purchase Contract with separate cash on the
applicable 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 Corporate
Units 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 Corporate Units and (c)
stating the manner in which such instructions may be given. Upon the written
request of the Holders of Corporate Units on such record date, the Agent shall
endeavor insofar as practicable to vote or cause to be voted, in accordance with
the instructions set forth in such requests, the maximum number of Debt
Securities as to which any particular voting instructions are received. In the
absence of specific instructions from the Holder of a Corporate Unit, the Agent
shall abstain from voting the Debt Security underlying such Corporate Unit. The
Company hereby agrees, if applicable, to solicit Holders of Corporate Units to
timely instruct the Agent in order to enable the Agent to vote such Debt
Securities.
SECTION 4.3 SUBSTITUTION OF A TREASURY PORTFOLIO FOR DEBT SECURITIES.
(a) Upon the occurrence of a Tax Event Redemption prior to the Second
Purchase Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debt
Securities shall be delivered to the Collateral Agent in exchange for the
Pledged Debt Securities. Pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Corporate Units the Tax
Event Treasury Portfolio and promptly remit the remaining portion of such
Redemption Price to the Agent for payment to the Holders of such Corporate
Units. The Tax Event Treasury Portfolio will be substituted for the outstanding
Pledged Debt Securities, and will be held by the Collateral Agent in accordance
with the terms of the Pledge Agreement to secure the obligation of each Holder
of a Corporate Unit to purchase the Common Stock of the Company on the
applicable Purchase Contract Settlement Date under the Purchase Contract
constituting a part of such Corporate Unit. Following the occurrence of a Tax
Event Redemption prior to the Second Purchase Contract Settlement Date, the
Holders of Corporate Units and the Collateral Agent shall have such security
interests, rights and obligations with respect to the Tax Event Treasury
Portfolio as the Holder of Corporate Units and the Collateral Agent had in
respect of the Debt Securities subject to the Pledge thereof as provided in
Sections 2, 3, 4, 5 and 6 of the Pledge Agreement, and any reference herein to
the Debt Securities shall be deemed to be reference to such Tax Event Treasury
Portfolio. The Company may cause to be made in any Corporate Unit Certificates
thereafter to be issued such change in phraseology and form (but not in
substance) as may be appropriate to reflect the substitution of the Tax Event
Treasury Portfolio for Debt Securities as collateral.
(b) Upon the successful remarketing of Series K Notes on the third
Business Day immediately preceding August 16, 2004, the proceeds of such
remarketing (after deducting any Remarketing Fee) shall be delivered to the
Collateral Agent in exchange for the Pledged Series K Notes. Pursuant to the
terms of the Pledge Agreement, the Collateral Agent will apply an amount equal
to the 3-Year Treasury Portfolio Purchase Price to purchase on behalf of the
Holders of Corporate Units the
36
3-Year Treasury Portfolio and promptly remit the remaining portion of such
proceeds to the Agent for payment to the Holders of such Corporate Units. The
3-Year Treasury Portfolio will be substituted for the outstanding Pledged Series
K Notes, and will be held by the Collateral Agent in accordance with the terms
of the Pledge Agreement to secure the obligation of each Holder of a Corporate
Unit to purchase the Common Stock of the Company on the First Purchase Contract
Settlement Date under the Purchase Contract constituting a part of such
Corporate Unit. Following the remarketing of the Series K Notes on the third
business day immediately preceding August 16, 2004, the Holders of Corporate
Units and the Collateral Agent shall have such security interests, rights and
obligations with respect to the 3-Year Treasury Portfolio as the Holder of
Corporate Units and the Collateral Agent had in respect of the Series K Notes
subject to the Pledge thereof as provided in Sections 2, 3, 4, 5 and 6 of the
Pledge Agreement, and any reference herein to the Series K Notes shall be deemed
to be reference to such 3-Year Treasury Portfolio. The Company may cause to be
made in any Corporate Unit Certificates thereafter to be issued such change in
phraseology and form (but not in substance) as may be appropriate to reflect the
substitution of the 3-Year Treasury Portfolio for Series K Notes as collateral.
(c) Upon the successful remarketing of Series L Notes on the third
Business Day immediately preceding August 16, 2005, the proceeds of such
remarketing (after deducting any Remarketing Fee) shall be delivered to the
Collateral Agent in exchange for the Pledged Series L Notes. Pursuant to the
terms of the Pledge Agreement, the Collateral Agent will apply an amount equal
to the 4-Year Treasury Portfolio Purchase Price to purchase on behalf of the
Holders of Corporate Units the 4-Year Treasury Portfolio and promptly remit the
remaining portion of such proceeds to the Agent for payment to the Holders of
such Corporate Units. The 4-Year Treasury Portfolio will be substituted for the
outstanding Pledged Series L Notes, and will be held by the Collateral Agent in
accordance with the terms of the Pledge Agreement to secure the obligation of
each Holder of a Corporate Unit to purchase the Common Stock of the Company on
the Second Purchase Contract Settlement Date under the Purchase Contract
constituting a part of such Corporate Unit. Following the remarketing of the
SERIES L Notes on the third business day immediately preceding August 16, 2005,
the Holders of Corporate Units and the Collateral Agent shall have such security
interests, rights and obligations with respect to the 4-Year Treasury Portfolio
as the Holder of Corporate Units and the Collateral Agent had in respect of the
Series L Notes subject to the Pledge thereof as provided in Sections 2, 3, 4, 5
and 6 of the Pledge Agreement, and any reference herein to the Series L Notes
shall be deemed to be reference to such 4-Year Treasury Portfolio. The Company
may cause to be made in any Corporate Unit Certificates thereafter to be issued
such change in phraseology and form (but not in substance) as may be appropriate
to reflect the substitution of the 4-Year Treasury Portfolio for Series L Notes
as collateral.
SECTION 4.4 CONSENT TO TREATMENT FOR TAX PURPOSES.
Each Holder of a Corporate Unit or a Treasury Unit, by its acceptance
thereof, covenants and agrees to treat itself as the owner, for United States
federal, state and local income and franchise tax purposes, of (i) the related
Debt Securities or the appropriate Applicable Ownership Interest in the relevant
Treasury Portfolio, in the case of the Corporate Units, or (ii) the Treasury
Securities, in the case of the Treasury Units. Each Holder of a Corporate Unit,
by its acceptance thereof, further covenants and agrees to treat the Debt
Securities as indebtedness of the Company for United States federal, state and
local income and franchise tax purposes.
37
ARTICLE V
THE PURCHASE CONTRACTS
SECTION 5.1 PURCHASE OF SHARES OF COMMON STOCK.
Each Purchase Contract shall, unless a Termination Event or an Early
Settlement in accordance with Section 5.9 hereof has occurred, obligate the
Holder of the related Security to purchase, and the Company to sell, on each of
the First Purchase Contract Settlement Date and the Second Purchase Contract
Settlement Date, for $25 in cash on each such date (the "Purchase Price"), a
number of newly issued shares of Common Stock equal to the applicable Settlement
Rate. The "Settlement Rate" as determined with respect to a Purchase Contract
Settlement Date is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $55.68 (the "Threshold Appreciation Price"),
0.4490 shares of Common Stock per Purchase Contract, (b) if the Applicable
Market Value is less than the Threshold Appreciation Price, but is greater than
$45.64, the number of shares of Common Stock equal to $25 divided by the
Applicable Market Value and (c) if the Applicable Market Value is less than or
equal to $45.64, 0.5478 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" with respect to a Purchase Contract
Settlement Date means the average of the Closing Price per share of Common Stock
on each of the twenty consecutive Trading Days ending on the third Trading Day
immediately preceding such 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 at the close of business that
is the primary market for the trading of the Common Stock.
Each Holder of a Corporate Unit or a Treasury Unit, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact (including the execution
of Certificates on behalf of such Holder), agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its obligations under such
Purchase Contracts, and consents to the provisions hereof, irrevocably
authorizes the Agent 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 Portfolios
or the Treasury Securities pursuant to the Pledge Agreement. Each Holder of a
Corporate Unit or a Treasury Unit, by its acceptance thereof, further covenants
and agrees, that, to the extent and in the manner provided in Section 5.4 and
the Pledge Agreement, but subject to the terms thereof, payments in respect of
the principal of and interest on Debt Securities or the Proceeds of the Treasury
Securities or Applicable Ownership Interest in any Treasury Portfolio on a
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
38
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 Contract underlying
such Certificate and the Pledge Agreement; and the transferor shall be released
from the obligations under this Agreement, the Purchase Contracts underlying the
Certificates so transferred and the Pledge Agreement. The Company covenants and
agrees, and each Holder of a Certificate, by its acceptance thereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.
SECTION 5.2 CONTRACT ADJUSTMENT PAYMENTS.
Subject to Section 5.3 herein, the Company shall pay, on each Payment
Date, 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 Corporate Unit
Register or Treasury Unit 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 any other Certificate (including as
a result of a Collateral Substitution or the re-establishment of a Corporate
Unit) shall carry the rights to Contract Adjustment Payments accrued and unpaid,
and to accrue Contract Adjustment Payments, which were carried by the Purchase
Contracts which were represented by such other Certificates.
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 Second
Purchase Contract Settlement Date, to defer the payment of any or all of the
Contract Adjustment Payments otherwise payable on any Payment Date to a date no
later than the Purchase Contract Settlement Date next succeeding the date such
deferral commences, 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
39
ten Business Days prior to the earlier of (i) the next succeeding Payment Date
or (ii) the date the Company is required to give notice of the Record Date or
Payment Date with respect to payment of such Contract Adjustment Payments to the
NYSE or other applicable self-regulatory organization or to Holders of the
Securities, but in any event not less than one Business Day prior to such Record
Date. In connection with any Contract Adjustment Payments so deferred,
additional Contract Adjustment Payments on the amounts so deferred will accrue
at the rate of 8.75% per annum (computed on the 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
accrued additional Contract Adjustment Payments 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 5.3. No Contract
Adjustment Payments may be deferred to a date that is after the Purchase
Contract Settlement Date next succeeding the date such deferral commences. 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 next succeeding Purchase
Contract Settlement Date, each Holder will receive on such 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 applicable
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 a 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 capital stock of the Company in connection with the satisfaction by the
Company of its obligations under any employee or agent benefit plans or the
satisfaction by the Company of its obligations pursuant to any contract or
security outstanding on the date of such event requiring the Company to purchase
its capital stock, (ii) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of the Company's
capital stock or the security being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company (or rights to acquire capital
stock) or repurchases 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).
SECTION 5.4 PAYMENT OF PURCHASE PRICE.
(a)(i) Unless a Treasury Portfolio has replaced the relevant Debt
Securities 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 Corporate Unit must notify the Agent by use
of a notice in substantially the form of Exhibit C hereto of its intention to
pay in cash ("Cash Settlement") the Purchase Price for the shares of Common
Stock to be purchased pursuant to the
40
applicable portion of a Purchase Contract on a Purchase Contract Settlement
Date. 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 applicable Purchase Contract
Settlement Date. The Agent shall promptly notify the Collateral Agent of the
receipt of such a notice from a Holder intending to make a Cash Settlement.
(ii) A Holder of a Corporate Unit who has so notified the Agent
of its intention to make a Cash Settlement is required to pay the Purchase
Price to the Collateral Agent prior to 11:00 a.m., New York City time, on the
Business Day immediately preceding the applicable 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 applicable Purchase Contract Settlement Date in settlement
of the applicable portion of the Purchase Contract in accordance with the
terms of this Agreement and the Pledge Agreement. Any funds received by the
Collateral Agent in respect of the investment earnings from the investment in
such Permitted Investments, will be distributed to the Agent when received for
payment to the Holder.
(iii) If a Holder of a Corporate Unit fails to notify the Agent
of its intention to make a Cash Settlement in accordance with paragraph (a)(i)
above, such failure shall constitute a default under the related Purchase
Contract and the Holder shall be deemed to have consented to the disposition
of the applicable Pledged Debt Securities (as defined in the Pledge Agreement,
and which shall be Series K Notes in connection with the First Purchase
Contract Settlement Date and Series L Notes in connection with the Second
Purchase Contract Settlement Date) pursuant to the remarketing as described in
paragraph (b) below. If a Holder of a Corporate Unit does notify the Agent as
provided in paragraph (a)(i) above of its intention to pay the Purchase Price
in cash, but fails to make such payment as required by paragraph (a)(ii)
above, such failure shall also constitute a default; however, the Debt
Securities of such a Holder will not be remarketed but instead the Collateral
Agent, for the benefit of the Company, will exercise its rights as a secured
party with respect to such Debt Securities, including those rights specified
in paragraph (c) below.
(b) In order to dispose of the applicable Debt Securities
(which shall be Series K Notes in connection with the First Purchase Contract
Settlement Date and Series L Notes in connection with the Second Purchase
Contract Settlement Date) of Corporate Unit Holders who have not notified the
Agent of their intention to effect a Cash Settlement with respect to a
Purchase Contract Settlement Date as provided in paragraph (a)(i) above, the
Company shall engage one or more nationally recognized investment banking
firms (the "Remarketing Agents") pursuant to a Remarketing Agreement to sell
such Debt Securities. In order to facilitate the remarketing, the Agent shall
notify the Remarketing Agents, by 10:00 a.m., New York City time, on the
fourth Business Day immediately preceding such Purchase Contract Settlement
Date, of the aggregate number of Debt Securities to be remarketed.
Concurrently, the Collateral Agent, pursuant to the terms of the Pledge
Agreement, will present for remarketing such Debt Securities to the
Remarketing Agents. Upon receipt of such notice from the Agent and such Debt
Securities from the Collateral Agent, the Remarketing Agents will, on the
third Business Day immediately preceding such Purchase Contract Settlement
Date, use their reasonable efforts to remarket such Debt Securities on such
date at a price of approximately 100.5% (but not less than 100%) of the
aggregate principal amount of such Debt Securities, plus accrued and unpaid
interest, if any, thereon. After deducting the applicable Remarketing Fee from
any amount of such proceeds in excess of the aggregate principal amount of
such remarketed Debt Securities of such series plus accrued and unpaid
interest, if any, then the Remarketing Agent will remit the remaining portion
of the proceeds from such remarketing to the Collateral Agent. Such portion of
the proceeds, equal to the aggregate principal amount of such Debt Securities,
will automatically be applied by the Collateral Agent, in accordance with the
Pledge Agreement, to satisfy in full such Corporate Unit Holders' obligations
to pay the Purchase
41
Price for the Common Stock under the applicable portions of the related Purchase
Contracts on such Purchase Contract Settlement Date. Any proceeds in excess of
those required to pay the Purchase Price and the Remarketing Fee will be
remitted to the Agent for payment to the Holders of the related Corporate Unit.
Corporate Unit Holders whose Debt Securities are so remarketed will not
otherwise be responsible for the payment of any Remarketing Fee in connection
therewith. If such a remarketing results in a Failed Remarketing in accordance
with the terms of the Pledge Agreement, the Collateral Agent, for the benefit of
the Company, will exercise its rights as a secured party with respect to such
Debt Securities, including those actions specified in paragraph (c) below;
provided, that if upon a Failed Remarketing the Collateral Agent exercises such
rights for the benefit of the Company with respect to such Debt Securities, any
accrued and unpaid interest on such Debt Securities will become payable by the
Company to the Agent for payment to the Holder of the Corporate Unit to which
such Debt Securities relate. Such payment will be made by the Company on or
prior to 11 a.m. New York City time on the applicable 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 such Purchase
Contract Settlement Date in an Authorized Newspaper.
(c) With respect to any Debt Securities beneficially owned by
Holders who have elected Cash Settlement but failed to deliver cash as
required in (a)(ii) above, or with respect to Debt Securities which are
subject to a Failed Remarketing, the Collateral Agent for the benefit of the
Company reserves all of its rights as a secured party with respect thereto
and, subject to applicable law and paragraph (h) below, may, among other
things, (i) retain such Debt Securities in full satisfaction of the Holders'
obligations under the applicable portions of the Purchase Contracts or (ii)
sell such Debt Securities in one or more public or private sales and apply the
proceeds of such sale in full satisfaction of the Holders' obligations under
the applicable portions of the Purchase Contracts.
(d)(i) Unless a Holder of a Treasury Unit or, if a Treasury
Portfolio has replaced the relevant Debt Securities, a Corporate Unit, settles
the underlying Purchase Contract through the early delivery of cash to the
Purchase Contract Agent in the manner described in Section 5.9, each Holder of
a Treasury Unit or, if a Treasury Portfolio has replaced the relevant Debt
Securities, a Corporate Unit must notify the Agent by use of a notice in
substantially the form of Exhibit C 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 a Purchase Contract on or prior to 5:00 p.m., New York
City time, on the second Business Day immediately preceding the applicable
Purchase Contract Settlement Date.
(ii) A Holder of a Treasury Unit or, if a Treasury Portfolio has
replaced the relevant Debt Securities, a Corporate Unit, 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 applicable 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 applicable Purchase Contract Settlement Date in settlement of the
applicable portion of the Purchase Contract in accordance with the terms of
this Agreement and the Pledge Agreement. Any funds received by the Collateral
Agent in respect of the investment earnings from the investment in such
Permitted Investments will be distributed to the Agent when received for
payment to the Holder.
(iii) If a Holder of a Treasury Unit or, if a Treasury Portfolio
has replaced the relevant Debt Securities, a Corporate Unit, 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 Treasury Unit or a Corporate Unit
(if a Tax
42
Event Redemption has occurred) does notify the Agent as provided in paragraph
(d)(i) above of its intention to pay the Purchase Price in cash, but fails to
make such payment as required by paragraph (d)(ii) above, then such failure
shall constitute a default under the related Purchase Contract and upon the
maturity of the Pledged Treasury Securities or the appropriate Applicable
Ownership Interest in the relevant Treasury Portfolio, as the case may be, held
by the Collateral Agent on the Business Day immediately prior to the applicable
Purchase Contract Settlement Date, the principal amount of the Treasury
Securities or the appropriate Applicable Ownership Interest in the relevant
Treasury Portfolio, as the case may be, received by the Collateral Agent will be
invested promptly in overnight Permitted Investments. On the applicable 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 relevant
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 applicable
portions of the Purchase Contracts being settled thereby, the Collateral Agent
will distribute such excess to the Agent for the benefit of the Holder of the
related Treasury Units or Corporate Units when received.
(e) Any distribution to Holders of excess funds and interest
described above, shall be payable at the 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 with respect to a
Purchase Contract Settlement Date in the manner described herein, the Company
shall not be obligated to issue any shares of Common Stock in respect of the
relevant portion of the Purchase Contract or deliver any certificate therefor
to the Holder unless it shall have received payment in full of the Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
(g) Upon Cash Settlement with respect to the applicable portion
of any Purchase Contract, (i) the Collateral Agent will, in accordance with
the terms of the Pledge Agreement, cause the corresponding Pledged Debt
Securities or appropriate Applicable Ownership Interest in the relevant
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 relevant 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 relevant 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 on
each Purchase Contract Settlement Date are non-recourse obligations and are
payable solely out of any Cash Settlement or the proceeds of any Collateral
pledged to secure the obligations of the Holders with respect to such Purchase
Price, and in no event will Holders be liable for any deficiency between the
proceeds of Collateral disposition and the Purchase Price. A default by a
Holder in the performance of its obligations under a Purchase Contract in
connection with the First Purchase Contract Settlement Date shall not in
itself be a default in the performance of its obligations under such Purchase
Contract in connection with the Second Purchase Contract Settlement Date
(except in connection with Early Settlement).
43
SECTION 5.5 ISSUANCE OF SHARES OF COMMON STOCK.
Unless a Termination Event or an Early Settlement shall have occurred,
on a Purchase Contract Settlement Date, upon its receipt of payment in full of
the applicable Purchase Price for 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 delivery of settlement instructions
thereon duly completed and executed, and, in connection with the Second Purchase
Contract Settlement Date, upon surrender of a Certificate to the Agent on or
after the Second Purchase Contract Settlement Date, 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 any Certificate
so surrendered shall forthwith be canceled. Such shares shall be registered in
the name of the Holder or the Holder's designee as specified in the settlement
instructions provided by the Holder to the Agent. If any shares of Common Stock
issued in respect of a Purchase Contract are to be registered to a Person other
than the Person in whose name the Certificate evidencing such Purchase Contract
is registered, no such registration shall be made unless the Person requesting
such registration has paid any transfer and other taxes required by reason of
such registration in a name other than that of the registered Holder of the
Certificate evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or is not
payable.
SECTION 5.6 ADJUSTMENT OF SETTLEMENT RATE.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on the Common Stock in Common Stock, the Settlement Rate, as in
effect at the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
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
44
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.
(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
45
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 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").
46
(7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.6(b) applies) shall be deemed to involve
(a) a distribution of such securities other than Common Stock to all holders of
Common Stock (and the effective date of such reclassification shall be deemed to
be "the date fixed for the determination of stockholders entitled to receive
such distribution" and the "date fixed for such determination" within the
meaning of paragraph (4) of this Section), and (b) a subdivision, split or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of shares
of Common Stock outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon which such subdivision
or split becomes effective" or "the day upon which such combination becomes
effective", as the case may be, and "the day upon which such subdivision, split
or combination becomes effective" within the meaning of paragraph (3) of this
Section).
(8) The "Current Market Price" per share of Common Stock on any day
means the average of the daily Closing Prices for the five consecutive Trading
Days selected by the Company commencing not more than 30 Trading Days before,
and ending not later than, the earlier of the day in question and the day before
the "ex date" with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "ex date," when used with
respect to any issuance or distribution, shall mean the first date on which the
Common Stock trades regular way 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 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
47
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 applicable 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
(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 responsi-
bility 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
48
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, 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 Second 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 relevant Treasury Portfolio, as the case may be,
forming a part of such Securities in the case of Corporate Units, or Treasury
Securities in the case of Treasury Units, in accordance with the provisions of
Section 4.3 of the Pledge Agreement. Upon the occurrence of a Termination Event,
the Company shall promptly but in no event later than two Business Days
thereafter give written notice thereof to the Agent, the Collateral Agent and to
the Holders, at their addresses as they appear in the applicable Register.
SECTION 5.9 EARLY SETTLEMENT.
(a) A holder of Corporate Units may settle the related Purchase
Contracts in their entirety on or prior to the fifth Business Day immediately
preceding either Purchase Contract Settlement Date in the manner described
herein, but only in integral multiples of 40 Corporate Units; provided, however,
that such settlements may not be made during the period from the fifth Business
Day immediately preceding the First Purchase Contract Settlement Date through
the First Purchase Contract Settlement Date, and provided, further, if a
Treasury Portfolio has become a component of the Corporate Units, Holders of
Corporate Units may settle early only in integral multiples of 1,600,000
Corporate Units. A holder of Treasury Units may settle the related Purchase
Contracts in their entirety on or prior to the second Business Day immediately
preceding each Purchase Contract Settlement Date in the manner described herein
(in either case, an Early Settlement) but only in integral multiples of 40
Treasury Units. Upon Early Settlement, (i) the holder's rights to receive
Deferred Contract Adjustment Payments on the Purchase Contracts being settled
will be forfeited, (ii) the holder's right to receive additional Contract
Adjustment Payments in respect of such Purchase Contracts will terminate and
(iii) no adjustment will be made to or for the holder on account of Deferred
Contract Adjustment Payments, or any amount accrued in respect of Contract
Adjustment Payments. In order to exercise the right to effect any such early
settlement ("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 the sum of (i)(A) $50 times the number of Purchase Contracts being settled if
settled on or prior to the First Purchase Contract Settlement Date or (B) $25
times the number of Purchase Contracts being settled if settled after the First
Purchase Contract Settlement Date, plus, in either case, (ii) if such delivery
is made with respect to any Purchase Contracts during the period from the close
of business on any Record Date next preceding any Payment Date to the opening of
business on such Payment Date, an amount equal to the Contract Adjustment
Payments payable on such Payment Date with respect to such Purchase Contracts.
Except as provided in the immediately preceding sentence and subject to the
second to last paragraph of Section 5.2, no payment or
49
adjustment shall be made upon Early Settlement of any Purchase Contract on
account of any Contract Adjustment Payments accrued on such Purchase Contract or
on account of any dividends on the Common Stock issued upon such Early
Settlement. In order for any of the foregoing requirements to be considered
satisfied or effective with respect to a Purchase Contract underlying any
Security on or by a particular Business Day, such requirement must be met at or
prior to 5:00 p.m., New York City time, on such Business Day; the first Business
Day on which all of the foregoing requirements have been satisfied by 5:00 p.m.,
New York City time shall be the "Early Settlement Date" with respect to such
Security.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Company shall issue, and the Holder shall be entitled to
receive (i) if settled prior to the First Purchase Contract Settlement Date,
0.8980 newly issued shares of Common Stock per Corporate Unit or Treasury Unit
(the "First Early Settlement Rate") or (ii) if settled after the First Purchase
Contract Settlement Date and before the Second Purchase Contract Settlement
Date, 0.4490 newly issued shares of Common stock per Corporate Unit or Treasury
Unit (the "Second Early Settlement Rate"), (regardless in either case of the
market price of the Common Stock on the date of such Early Settlement);
provided, however, that upon the Early Settlement of the Purchase Contracts, the
Holder of such related Securities will forfeit the right to receive any Deferred
Contract Adjustment Payments. The Early Settlement Rate shall be adjusted in the
same manner and at the same time as the Settlement Rate is adjusted. 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 relevant Treasury Portfolio, in the case of Corporate Units, or the related
Treasury Securities, in the case of Treasury Units, to be released from the
Pledge by the Collateral Agent and transferred, in each case to the Agent for
delivery to the Holder thereof or its designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Debt Securities, the
appropriate Applicable Ownership Interest in the relevant Treasury Portfolio or
Treasury Securities, as the case may be, from the Collateral Agent, as
applicable, the Agent shall, in accordance with the instructions provided by the
Holder thereof on the applicable form of Election to Settle Early 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 a Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered
50
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 a 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 (i) the
Threshold Appreciation Price, in the case of an Early Settlement, or (ii) the
Applicable Market Value, in all other circumstances. The Company shall provide
the Agent from time to time with sufficient funds to permit the Agent to make
all cash payments required by this Section 5.10 in a timely manner.
SECTION 5.11 CHARGES AND TAXES.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts and in payment of any Deferred Contract Adjustment
Payments; provided, however, that the Company shall not be required to pay any
such tax or taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Security or any issuance of a share
of Common Stock in a name other than that of the registered Holder of a
Certificate surrendered in respect of the Securities evidenced thereby, other
than in the name of the Agent, as custodian for such Holder, and the Company
shall not be required to issue or deliver such share certificates or
Certificates unless or until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
ARTICLE VI
REMEDIES
SECTION 6.1 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE CONTRACT ADJUSTMENT
PAYMENTS AND TO PURCHASE COMMON STOCK.
The Holder of any Corporate Unit or Treasury Unit shall have the right,
which is absolute and unconditional (subject to the right of the Company to
defer payment thereof pursuant to Section 5.3, the prepayment of Contract
Adjustment Payments pursuant to Section 5.9(a) and the forfeiture of any
Deferred Contract Adjustment Payments upon Early Settlement pursuant to Section
5.9(b) or upon the occurrence of a Termination Event), to receive payment of
each installment of the Contract Adjustment Payments with respect to the
Purchase Contract constituting a part of such Security on the respective Payment
Date for such Security and to purchase Common Stock pursuant to such Purchase
Contract and, in each such case, to institute suit for the enforcement of any
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.
51
SECTION 6.3 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.4 DELAY OR OMISSION NOT WAIVER.
No delay or omission of any Holder to exercise any right or remedy upon
a default shall impair any such right or remedy or constitute a waiver of any
such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
SECTION 6.5 UNDERTAKING FOR COSTS.
All parties to this Agreement agree, and each Holder of Corporate Units
or Treasury Units, by its acceptance of such Corporate Units or Treasury Units
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Agreement, or in
any suit against the Agent for any action taken, suffered or omitted by it as
Agent, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided that the provisions of
this Section shall not apply to any suit instituted by the Company, to any suit
instituted by the Agent, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of payment of
interest on any Debt Securities or Contract Adjustment Payments on any Purchase
Contract on or after the respective Payment Date therefor in respect of any
Security held by such Holder, or for enforcement of the right to purchase shares
of Common Stock under the Purchase Contracts constituting part of any Security
held by such Holder.
SECTION 6.6 WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
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.
52
ARTICLE VII
THE AGENT
SECTION 7.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Prior to a Default and after the curing or waiving of all such
Defaults that may have occurred,
(1) the Agent undertakes to perform, with respect to the Securities,
such duties and only such duties as are specifically set forth in this Agreement
and no implied covenants or obligations shall be read into this Agreement
against the Agent; and
(2) the Agent may, with respect to the Securities, conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, in the absence of bad faith on the part of the Agent, upon certificates
or opinions furnished to the Agent and conforming to the requirements of this
Agreement; but in the case of any certificates or opinions which by any
provision hereof are specifically required to be furnished to the Agent, the
Agent shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Agreement.
(b) No provision of this Agreement shall be construed to relieve the
Agent from liability for its own negligent action, its own negligent failure to
act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the Agent
was negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers.
(c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of this
Section.
(d) The Agent is authorized to execute, deliver and perform the Pledge
Agreement in its capacity as Agent and to grant the Pledge. The Agent shall be
entitled to all of the rights, privileges, immunities and indemnities contained
in this Agreement with respect to any duties of the Agent under, or actions
taken by the Agent pursuant to, such Pledge Agreement.
(e) In case a Default has occurred (that has not been cured or
waived), and is actually known by a Responsible Officer of the Agent, the Agent
shall exercise such of the rights and powers vested in it by this Agreement, and
use 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.
53
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
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Certificate, Issuer Order or Issuer Request,
and any resolution of the Board of Directors of the Company may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other evidence be
herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon a Company Certificate;
(d) the Agent may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Agent,
in its discretion, may make reasonable further inquiry or investigation into
such facts or matters related to the execution, delivery and performance of the
Purchase Contracts as it may see fit, and, if the Agent shall determine to make
such further inquiry or investigation, it shall be given a reasonable
opportunity to examine the books, records and premises of the Company,
personally or by agent or attorney;
(f) the Agent may execute any of the powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or an
Affiliate and the Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney or an Affiliate appointed with
due care by it hereunder; and
(g) the rights, privileges, protections, immunities and benefits given
to the Agent, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Agent in each of its capacities
hereunder.
54
SECTION 7.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Company, and the Agent assumes no responsibility for their
accuracy. The Agent makes no representations as to the validity or sufficiency
of either this Agreement or of the Securities, or of the Pledge Agreement or the
Pledge. The Agent shall not be accountable for the use or application by the
Company of the proceeds in respect of the Purchase Contracts.
SECTION 7.5 MAY HOLD SECURITIES.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Collateral
Agent or any other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
SECTION 7.6 MONEY HELD IN CUSTODY.
Money held by the Agent in custody hereunder need not be segregated
from the other funds except to the extent required by law or provided herein.
The Agent shall be under no obligation to invest or pay interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
SECTION 7.7 COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(a) to pay to the Agent from time to time such compensation for all
services rendered by it hereunder as the parties shall agree from time to time
(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.
55
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
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
56
promptly appoint a successor Agent and shall comply with the applicable
requirements of Section 7.10. If no successor Agent shall have been so appointed
by the Company and accepted appointment in the manner required by Section 7.10,
the Agent or any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders as their names and addresses
appear in the applicable Register. Each notice shall include the name of the
successor Agent and the address of its Corporate Trust Office.
(g) If the Agent has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the TIA, the Agent and the Company shall
in all respects comply with the provisions of Section 310(b) of the TIA.
SECTION 7.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Agent, every
such successor Agent so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Agent an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the
retiring Agent; but, on the request of the Company or the successor Agent, such
retiring Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and deliver to such
successor Agent all property and money held by such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Agent all such rights, powers and agencies referred
to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the time
of such acceptance such successor Agent shall be qualified and eligible under
this Article.
SECTION 7.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Person into which the Agent may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of the
Agent, shall be the successor of the Agent hereunder, provided such Person shall
be otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
In case any Certificates shall have been authenticated and executed on behalf of
the Holders, but not delivered, by the Agent then in office, any successor by
merger, conversion or consolidation to such Agent may adopt such authentication
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.
57
SECTION 7.12 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Agent in its
capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof that
each such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their rights
under this Agreement or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to transmit,
then the Agent shall mail to all the Holders copies of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Agent of the materials to be mailed and of
payment, or provision for the payment, of the reasonable expenses of such
mailing.
SECTION 7.13 NO OBLIGATIONS OF AGENT.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligations and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Security thereunder. The Company agrees, and
each Holder of a Certificate, by his acceptance thereof, shall be deemed to have
agreed, that the Agent's execution of the Certificates on behalf of the Holders
shall be solely as agent and attorney-in-fact for the Holders, and that the
Agent shall have no obligation to perform such Purchase Contracts on behalf of
the Holders, except to the extent expressly provided in Article 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.
58
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
SECTION 8.1 SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(a) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein and
in the Certificates; or
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company;
or
(c) to evidence and provide for the acceptance of appointment here-
under by a successor Agent; or
(d) to make provision with respect to the rights of Holders pursuant
to the requirements of Section 5.6(b); or
(e) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other provisions herein, or to make
any other provisions with respect to such matters or questions arising under
this Agreement, provided such action shall not adversely affect the interests of
the Holders.
SECTION 8.2 SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Agent, the Company, when authorized by
a Board Resolution, and the Agent may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the
Purchase Contracts, or the provisions of this Agreement or the rights of the
Holders in respect of the Securities; provided, however, that, except as
contemplated herein, no such supplemental agreement shall, without the consent
of the Holder of each Outstanding Security affected thereby,
(a) change any Payment Date;
(b) change the amount or the type of Collateral required to be Pledged
to secure a Holder's Obligations under the Purchase Contract, impair the right
of the Holder of any Purchase Contract to receive distributions on the related
Collateral (except for the rights of Holders of Corporate Units to substitute
the Treasury Securities for the Pledged Debt Securities or the Applicable
Ownership Interest in the relevant Treasury Portfolio or the rights of holders
of Treasury Units to substitute Debt Securities or the Applicable Ownership
Interest in the relevant Treasury Portfolio for the Pledged Treasury Securities)
or otherwise adversely affect the Holder's rights in or to such Collateral or
adversely alter the rights in or to such Collateral;
(c) reduce any Contract Adjustment Payments or any Deferred Contract
Adjustment Payment, or change any place where, or the coin or currency in which,
any Contract Adjustment Payment is payable;
59
(d) impair the right to institute suit for the enforcement of any
Purchase Contract;
(e) reduce the number of shares of Common Stock to be purchased
pursuant to any Purchase Contract, increase the price to purchase shares of
Common Stock upon settlement of any Purchase Contract, change a Purchase
Contract Settlement Date or the right to Early Settlement or otherwise adversely
affect the Holder's rights under any Purchase Contract; or
(f) reduce the percentage of the outstanding Purchase Contracts the
consent of whose Holders is required for any such supplemental agreement;
provided, that if any amendment or proposal referred to above would
adversely affect only the Corporate Units or the Treasury Units, then only the
Holders of the affected class of Security as of the record date for the Holders
entitled to vote thereon will be entitled to vote on such amendment or proposal,
and such amendment or proposal shall not be effective except with the consent of
Holders of not less than a majority of such class; provided further, however,
that no such agreement, whether with or without the consent of the Holders,
shall affect Section 3.16 hereof.
It shall not be necessary for any Act of 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.
60
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 entity, or the successor (if other than the Company)
shall be a Person, other than an individual organized and existing under the
laws of the United States of America or a State thereof or the District of
Columbia and such entity shall expressly assume all the obligations of the
Company under the Purchase Contracts, the Debt Securities, this Agreement and
the Pledge Agreement by one or more supplemental agreements in form reasonably
satisfactory to the Agent and the Collateral Agent, executed and delivered to
the Agent and the Collateral Agent by such corporation, and (ii) the Company or
such successor entity, as the case may be, shall not, immediately after such
merger or consolidation, or such sale, assignment, transfer, lease or
conveyance, be in default in its payment obligations or in any material default
in the performance of any of its other obligations hereunder, or under any of
the Securities or the Pledge Agreement.
SECTION 9.2 RIGHTS AND DUTIES OF SUCCESSOR ENTITY.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by a successor entity in
accordance with Section 9.1, such successor entity shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the Company. Such successor entity thereupon may cause to be signed, and may
issue either in its own name or in the name of TXU Corp. any or all of the
Certificates evidencing Securities issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Agent; and, upon the
order of such successor corporation, instead of the Company, and subject to all
the terms, conditions and limitations in this Agreement prescribed, the Agent
shall authenticate and execute on behalf of the Holders and deliver any
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Agent for authentication and execution, and any
Certificate evidencing Securities which such successor entity thereafter shall
cause to be signed and delivered to the Agent for that purpose. All the
Certificates so issued shall in all respects have the same legal rank and
benefit under this Agreement as the Certificates theretofore or thereafter
issued in accordance with the terms of this Agreement as though all of such
Certificates had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance such change in phraseology and form (but not in substance)
may be made in the Certificates evidencing Securities thereafter to be issued as
may be appropriate.
SECTION 9.3 OPINION OF COUNSEL GIVEN TO AGENT.
The Agent, subject to Sections 7.1 and 7.3, shall receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale,
assignment, transfer, lease or conveyance, and any such assumption, complies
with the provisions of this Article and that all conditions precedent to the
consummation of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance have been met.
61
ARTICLE X
COVENANTS
SECTION 10.1 PERFORMANCE UNDER PURCHASE CONTRACTS.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, The City of New
York an office or agency where Certificates may be presented or surrendered for
acquisition of shares of Common Stock upon settlement of the Purchase Contracts
on the Purchase Contract Settlement Date or Early Settlement and for transfer of
Collateral upon occurrence of a Termination Event, where Certificates may be
surrendered for registration of transfer or exchange, for a Collateral
Substitution or establishment of a Corporate Unit and where notices and demands
to or upon the Company in respect of the Securities and this Agreement may be
served. The Company will give prompt written notice to the Agent of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Company hereby appoints the Agent as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Agent of any such designation or rescission
and of any change in the location of any such other office or agency. The
Company hereby designates as the place of payment for the Securities the
Corporate Trust Office and appoints the Agent at its Corporate Trust Office as
paying agent in such city.
SECTION 10.3 COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times prior to the Second Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock the full number of shares of Common
Stock issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding Certificates.
SECTION 10.4 COVENANTS AS TO COMMON STOCK.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
62
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 June 1 and December 1 in each year, commencing
June 1, 2002, a list, in such form as the Agent may reasonably require, of the
names and addresses of the Holders ("List of Holders") as of a date not more
than 15 days prior to the delivery thereof, and (b) at such other times as the
Agent may request in writing, within 30 days after the receipt by the Company of
any such request, a List of Holders as of a date not more than 15 days prior to
the time such list is furnished; provided that, the Company shall not be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Agent by the
Company. The Agent may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Agent shall comply with its obligations under Section 311(a)
of the TIA, subject to the provisions of Section 311(b) and Section 312(b) of
the TIA.
SECTION 11.3 REPORTS BY THE AGENT.
Not later than November 1 of each year, commencing November 1, 2002,
the Agent shall provide to the Holders such reports, if any, as are required by
Section 313(a) of the TIA in the form and in the manner provided by Section
313(a) of the TIA. Such reports shall be as of the preceding September 15. The
Agent shall also comply with the requirements of Sections 313(b), (c) and (d) of
the TIA.
SECTION 11.4 PERIODIC REPORTS TO AGENT.
The Company shall provide to the Agent such documents, reports and
information as required by Section 314 (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.
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.
63
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
Purchase Contract Agreement dated as of
July 1, 1998 of the Company to The Bank of New York, as agent, attorney-in-fact
and trustee, the Indenture (For Unsecured Debt Securities Series D and Series
E), dated as of July 1, 1998, of the Company to The Bank of New York, as
trustee, the Indenture (For Unsecured Debt Securities Series F), dated as of
October 1, 1998 of the Company to The Bank of New York, as trustee, the
Indenture (For Unsecured Debt Securities Series G), dated as of October 1, 1998,
of the Company to The Bank of New York, as trustee, the Indenture (For Unsecured
Debt Securities Series H), dated as of June 1, 1999, of the Company to The Bank
of New York, as trustee, the Indenture (For Unsecured Debt Securities Series I),
dated as of September 1, 1999, of the Company to The Bank of New York, as
trustee, or the Indenture (For Unsecured Debt Securities Series J), dated as of
July 1, 2001, of the Company to The Bank of New York, as trustee, shall be
deemed to be specifically described in this Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the TIA.
SECTION 11.9 DIRECTION OF AGENT.
Section 316(a)(1)(A) of the TIA is hereby expressly excluded from this
Agreement, as permitted by the TIA.
64
IN WITNESS WHEREOF, the parties hereto have caused this
Purchase
Contract Agreement to be duly executed as of the day and year first above
written.
TXU CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
65
THE BANK OF NEW YORK,
as Purchase Contract Agent and Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
66
EXHIBIT A
FORM OF CORPORATE UNIT CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE
PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. _____ Cusip No. ▇▇▇▇▇▇▇▇▇
Number of Corporate Units _______
TXU CORP.
8.75% Corporate Units
($50 Stated Amount)
This Corporate Unit Certificate certifies that ___________ is the
registered Holder of the number of Corporate Units set forth above. Each
Corporate Unit represents (a) a stock purchase contract (as modified and
supplemented and in effect from time to time, a "Purchase Contract") and (b)
either (A) prior to the First Purchase Contract Settlement Date (as defined
herein) so long as no Tax Event Redemption has occurred, (i) beneficial
ownership of a Series K Senior Note due November 16, 2006 of the Company
("Series K Note"), having a principal amount of $25, and a Series L Senior Note
due November 16, 2007 of the Company ("Series L Note", and together with the
Series L Note, the "Debt Securities"), having a principal amount of $25, or (ii)
following a successful remarketing of the Series K Notes on the third Business
Day immediately preceding August 16, 2004, $25 principal amount of Series L
Notes and the Applicable Ownership Interest in the 3-Year Treasury Portfolio,
(B) from the First Purchase Contract Settlement Date to the Second Purchase
Contract Settlement Date (as defined herein) so long as no Tax Event Redemption
has occurred, (i) beneficial ownership of a Series L Note, having a principal
amount of $25, or (ii) following a successful remarketing of the Series L Notes
on the third Business Day immediately preceding August 16, 2005, the Applicable
Ownership Interest in the 4-Year Treasury Portfolio, or (C) upon the occurrence
of a Tax Event Redemption prior to the Second Purchase Contract Settlement Date,
the appropriate Applicable Ownership Interest in the Tax Event Treasury
Portfolio (in each case, as defined herein). All capitalized terms used herein
without definition herein shall have the meaning set forth in the
Purchase
Contract Agreement referred to below.
Pursuant to the Pledge Agreement, the Debt Securities and/or the
appropriate Applicable Ownership Interest in the relevant Treasury Portfolio, as
the case may be, constituting part of each
A-1
Corporate Unit evidenced hereby have been pledged to the Collateral Agent, for
the benefit of the Company, to secure the obligations of the Holder under the
Purchase Contract comprising a portion of such Corporate Unit.
The Pledge Agreement provides that all payments of principal or
interest on or cash distributions in respect of any Pledged Debt Securities, or
the appropriate Applicable Ownership Interest of the relevant Treasury
Portfolio, as the case may be, constituting part of the Corporate Units received
by the Collateral Agent shall be paid by the Collateral Agent by wire transfer
in same day funds (i) in the case of (A) payments of interest with respect to
Pledged Debt Securities or cash distributions on the appropriate Applicable
Ownership Interest (as specified in clauses (1)(ii), (2)(ii), (3)(A)(ii) and
(3)(B)(ii) of the definition of such term) of the Treasury Portfolio, as the
case may be, and (B) any payments of the principal with respect to any Debt
Securities or on the appropriate Applicable Ownership Interest (as specified in
clauses (1)(i), (2)(i), (3)(A)(i) and (3)(B)(i) of the definition of such term)
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 principal of any
Pledged Debt Securities or on the appropriate Applicable Ownership Interest (as
specified in clauses (1)(i), (2)(i), (3)(A)(i) and (3)(B)(i) of the definition
of such term) of the Treasury Portfolio, as the case may be, to the Company on
the applicable Purchase Contract Settlement Date (as defined herein) in
accordance with the terms of the Pledge Agreement, in full satisfaction of the
respective obligations of the Holders of the Corporate Units of which such
Pledged Debt Securities or the Treasury Portfolio, as the case may be, are a
part under the Purchase Contracts forming a part of such Corporate Units.
Payment of interest on any Debt Security or distributions on the appropriate
Applicable Ownership Interest (as specified in clauses (1)(ii), (2)(ii),
(3)(A)(ii) and (3)(B)(ii) of the definition of such term) of the Treasury
Portfolio, as the case may be, forming part of a Corporate Unit evidenced hereby
which are payable quarterly in arrears on February 16, May 16, August 16 and
November 16 each year, commencing November 16, 2001 (a "Payment Date"), shall,
subject to receipt thereof by the Agent from the Collateral Agent, be paid to
the Person in whose name this Corporate Unit Certificate (or a Predecessor
Corporate Unit Certificate) is registered at the close of business on the Record
Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Unit Certificate to purchase, and the Company to sell, (i) not later
than November 16, 2004 (the "First Purchase Contract Settlement Date"), at a
price of $25 in cash (the "Purchase Price"), a number of newly issued shares of
Common Stock, without par value, of the Company ("Common Stock"), equal to the
applicable Settlement Rate (as defined below) and (ii) not later than November
16, 2005 (the "Second Purchase Contract Settlement Date" and with the First
Purchase Contract Settlement Date, each, a "Purchase Contract Settlement Date"),
at a price of $25 in cash, a number of newly issued shares of Common Stock,
equal to the applicable Settlement Rate, unless on or prior to the applicable
Purchase Contract Settlement Date there shall have occurred a Termination Event
or an Early Settlement with respect to the Corporate Units of which such
Purchase Contract is a part, all as provided in the
Purchase Contract Agreement
and more fully described below.
The "Settlement Rate" with respect to a Purchase Contract Settlement
Date is equal to (a) if the Applicable Market Value (as defined below)
determined with respect to such Purchase Contract Settlement Date is equal to or
greater than $55.68 (the "Threshold Appreciation Price"), 0.4490 shares of
Common Stock per Purchase Contract, (b) if such Applicable Market Value is less
than the Threshold Appreciation Price but is greater than $45.64, the number of
shares of Common Stock per Purchase Contract equal to $25 divided by such
Applicable Market Value and (c) if the Applicable Market Value is less than or
equal to $45.64, 0.5478 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.
A-2
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract evidenced hereby an amount (the "Contract Adjustment
Payments") equal to (A) for the period prior to the First Purchase Contract
Settlement Date, 3.65% per annum of the Stated Amount, and (B) for the period
from and after the First Purchase Contract Settlement Date, 3.30% per annum of
the Remaining Stated Amount, computed, in each case, on the basis of a 360 day
year of twelve 30 day months, subject to deferral at the option of the Company
as provided in the Purchase Contract Agreement and more fully described below.
Such Contract Adjustment Payments shall be payable to the Person in whose name
this Corporate Unit Certificate (or a Predecessor Corporate Unit Certificate) is
registered at the close of business on the Record Date for such Payment Date.
Payment of interest on the Debt Securities or distributions on the
appropriate Applicable Ownership Interest (as specified in clauses (1)(ii),
(2)(ii), (3)(A)(ii) and (3)(B)(ii) of the definition of such term) in the
Treasury Portfolio, as the case may be, and Contract Adjustment Payments will be
payable at the office of the Agent referred to below 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 Corporate Unit Register.
Unless the context otherwise requires, each provision of this Security
shall be part of the Purchase Contracts evidenced hereby. This Security and each
Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement,
dated as of October 1, 2001 (as may be supplemented from time to time, the
"Purchase Contract Agreement"), between the Company and The Bank of New York, as
Purchase Contract Agent and trustee (including any successor thereunder, herein
called the "Agent"), to which Purchase Contract Agreement and supplemental
agreements thereto reference is hereby made for a description of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Agent, the Company, and the Holders and of the terms upon which the
Corporate Unit Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Corporate Units to purchase at the applicable Purchase Price, and the
Company to sell, a number of newly issued shares of Common Stock equal to the
applicable Early Settlement Rate or the applicable Settlement Rate, as
applicable.
The "Applicable Market Value" with respect to a Purchase Contract
Settlement Date 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 such 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.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of the Corporate Units evidenced hereby shall pay, on each Purchase
Contract Settlement Date, the applicable Purchase Price for the shares of Common
Stock purchased pursuant to each Purchase Contract evidenced hereby by effecting
a Cash Settlement or, an Early Settlement. A Holder of Corporate Units who does
not make such payment in accordance with the Purchase Contract Agreement or who
does not notify the Agent of
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such Holder's intention, on or prior to 5:00 p.m. New York City time on the
fifth Business Day immediately preceding a Purchase Contract Settlement Date, to
make an effective Cash Settlement or an Early Settlement, shall have defaulted
in its obligations under the applicable portion of the related Purchase
Contract, and the Collateral Agent shall exercise its rights as a secured
creditor for the benefit of the Company under the Purchase Contract Agreement
and the Pledge Agreement and shall apply the Proceeds of the sale of the
applicable related Pledged Debt Securities (which shall be the Series K Notes in
connection with the First Purchase Contract Settlement Date and Series L Notes
in connection with the Second Purchase Contract Settlement Date) held by the
Collateral Agent to satisfy the Holder's obligation under such Purchase Contract
to purchase Common Stock at the Purchase Price.
The Company shall not be obligated to issue any shares of Common Stock
in respect of any portion of a Purchase Contract on a Purchase Contract
Settlement Date or deliver any certificates therefor to the Holder unless it
shall have received payment in full of the aggregate Purchase Price for the
shares of Common Stock to be purchased thereunder in the manner herein set
forth.
Under the terms of the Pledge Agreement and the Purchase Contract
Agreement, the Agent will be entitled to exercise the voting and any other
consensual rights pertaining to the Pledged Debt Securities. 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
Corporate Units Holders a notice (a) containing such information as is contained
in the notice or solicitation, (b) stating that each Corporate Unit Holder on
the record date set by the Agent therefor shall be entitled to instruct the
Agent as to the exercise of the voting rights pertaining to the Debt Securities
constituting a part of such Holder's Corporate Unit and (c) stating the manner
in which such instructions may be given. Upon the written request of the
Corporate Unit Holders on such record date, the Agent shall endeavor insofar as
practicable to vote or cause to be voted, in accordance with the instructions
set forth in such requests, the maximum number of Debt Securities as to which
any particular voting instructions are received. In the absence of specific
instructions from the Holder of a Corporate Unit, the Agent shall abstain from
voting any Debt Securities evidenced by such Corporate Unit.
Upon the occurrence of a Tax Event Redemption prior to the Second
Purchase Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debt
Securities shall be delivered to the Collateral Agent in exchange for the
Pledged Debt Securities. Pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Corporate Units the Tax
Event Treasury Portfolio and promptly remit the remaining portion of such
Redemption Price to the Agent for payment to the Holders of such Corporate
Units. The Tax Event Treasury Portfolio will be substituted for the outstanding
Pledged Debt Securities, and will be held by the Collateral Agent in accordance
with the terms of the Pledge Agreement to secure the obligation of each Holder
of a Corporate Unit to purchase the Common Stock of the Company on the
applicable Purchase Contract Settlement Date under the Purchase Contract
constituting a part of such Corporate Unit. Following the occurrence of a Tax
Event Redemption prior to the Second Purchase Contract Settlement Date, the
Holders of Corporate Units and the Collateral Agent shall have such security
interests, rights and obligations with respect to the Tax Event Treasury
Portfolio as the Holder of Corporate Units and the Collateral Agent had in
respect of the Debt Securities subject to the Pledge thereof as provided in
Sections 2, 3, 4, 5 and 6 of the Pledge Agreement, and any reference herein to
the Debt Securities shall be deemed to be reference to such Tax Event Treasury
Portfolio. The Company may cause to be made in any Corporate Unit Certificates
thereafter to be issued such change in phraseology and form (but not in
substance) as may be appropriate to reflect the substitution of the Tax Event
Treasury Portfolio for Debt Securities as collateral.
Upon the successful remarketing of Series K Notes on the third Business
Day immediately preceding August 16, 2004, the proceeds of such remarketing
(after deducting any Remarketing Fee) shall be delivered to the Collateral Agent
in exchange for the Pledged Series K Notes.
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Pursuant to the terms of the Pledge Agreement, the Collateral Agent will apply
an amount equal to the 3-Year Treasury Portfolio Purchase Price to purchase on
behalf of the Holders of Corporate Units the 3-Year Treasury Portfolio and
promptly remit the remaining portion of such proceeds to the Agent for payment
to the Holders of such Corporate Units. The 3-Year Treasury Portfolio will be
substituted for the outstanding Pledged Series K Notes, and will be held by the
Collateral Agent in accordance with the terms of the Pledge Agreement to secure
the obligation of each Holder of a Corporate Unit to purchase the Common Stock
of the Company on the First Purchase Contract Settlement Date under the Purchase
Contract constituting a part of such Corporate Unit. Following the remarketing
of the Series K Notes on the third business day immediately preceding August 16,
2004, the Holders of Corporate Units and the Collateral Agent shall have such
security interests, rights and obligations with respect to the 3-Year Treasury
Portfolio as the Holder of Corporate Units and the Collateral Agent had in
respect of the Series K Notes subject to the Pledge thereof as provided in
Sections 2, 3, 4, 5 and 6 of the Pledge Agreement, and any reference herein to
the Series K Notes shall be deemed to be reference to such 3-Year Treasury
Portfolio. The Company may cause to be made in any Corporate Unit Certificates
thereafter to be issued such change in phraseology and form (but not in
substance) as may be appropriate to reflect the substitution of the 3-Year
Treasury Portfolio for Series K Notes as collateral.
Upon the successful remarketing of Series L Notes on the third Business
Day immediately preceding August 16, 2005, the proceeds of such remarketing
(after deducting any Remarketing Fee) shall be delivered to the Collateral Agent
in exchange for the Pledged Series L Notes. Pursuant to the terms of the Pledge
Agreement, the Collateral Agent will apply an amount equal to the 4-Year
Treasury Portfolio Purchase Price to purchase on behalf of the Holders of
Corporate Units the 4-Year Treasury Portfolio and promptly remit the remaining
portion of such proceeds to the Agent for payment to the Holders of such
Corporate Units. The 4-Year Treasury Portfolio will be substituted for the
outstanding Pledged Series L Notes, and will be held by the Collateral Agent in
accordance with the terms of the Pledge Agreement to secure the obligation of
each Holder of a Corporate Unit to purchase the Common Stock of the Company on
the Second Purchase Contract Settlement Date under the Purchase Contract
constituting a part of such Corporate Unit. Following the remarketing of the
Series L Notes on the third business day immediately preceding August 16, 2005,
the Holders of Corporate Units and the Collateral Agent shall have such security
interests, rights and obligations with respect to the 4-Year Treasury Portfolio
as the Holder of Corporate Units and the Collateral Agent had in respect of the
Series L Notes subject to the Pledge thereof as provided in Sections 2, 3, 4, 5
and 6 of the Pledge Agreement, and any reference herein to the Series L Notes
shall be deemed to be reference to such 4-Year Treasury Portfolio. The Company
may cause to be made in any Corporate Unit Certificates thereafter to be issued
such change in phraseology and form (but not in substance) as may be appropriate
to reflect the substitution of the 4-Year Treasury Portfolio for Series L Notes
as collateral.
The Corporate Units are issuable only in registered form and only in
denominations of a single Corporate Unit and any integral multiple thereof. The
transfer of any Corporate Unit Certificate will be registered and Corporate Unit
Certificates may be exchanged as provided in the Purchase Contract Agreement.
The Corporate Unit Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
A Holder of a Corporate Unit may, at any time on or prior to the fifth
Business Day immediately preceding the Second Purchase Contract Settlement Date,
create or recreate a Treasury Unit and separate the Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, as
applicable, from the related Purchase Contract in respect of such Corporate Unit
by substituting 3-Year Treasury Securities and 4-Year Treasury Securities for
all, but not less than all, of the Series K Note and the Series L Note,
respectively, or appropriate Applicable Ownership Interest in a 3-Year Treasury
Portfolio or 4-Year Treasury Portfolio, respectively, or a Tax Event Treasury
Portfolio, as the case may be, that form a part of such Corporate Unit in
accordance with the Purchase Contract
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Agreement; provided, however, that if a Treasury Portfolio has not replaced any
Debt Securities as a component of Corporate Units as a result of a successful
remarketing or a Tax Event Redemption, such Collateral Substitutions may not be
made during the period from the fifth Business Day immediately preceding the
First Purchase Contract Settlement Date through the First Purchase Contract
Settlement Date; if a 3-Year Treasury Portfolio has replaced Series K Notes as a
component of Corporate Units as a result of a successful remarketing of Series K
Notes, and a Tax Event Redemption has not occurred, such Collateral
Substitutions may not be made during the period from the second Business Day
immediately preceding the First Purchase Contract Settlement Date through the
First Purchase Contract Settlement Date; and if a Tax Event Redemption has
occurred or the 4-Year Treasury Portfolio has replaced the Series L Notes as a
result of a successful remarketing of the Series L Notes, Holders of such
Corporate Units may make such Collateral Substitutions at any time on or prior
to the second Business Day immediately preceding the Second Purchase Contract
Settlement Date (but not during the period from the second Business Day
immediately preceding the First Purchase Contract Settlement Date through the
First Purchase Contract Settlement Date). Holders may make Collateral
Substitutions and establish Treasury Units (i) only in integral multiples of 40
Corporate Units if only Debt Securities are being substituted by Treasury
Securities, or (ii) only in integral multiples of 1,600,000 Corporate Units if
the appropriate Applicable Ownership Interests in any Treasury Portfolio are
being substituted by any Treasury Security. To create 40 Treasury Units (if a
Tax Event Redemption has not occurred and Series K Notes and Series L Notes
remain components of Corporate Units), or 1,600,000 Treasury Units (if a Tax
Event Redemption has occurred or a Treasury Portfolio has replaced either series
of Debt Securities as a result of a successful remarketing of such Debt
Securities), the Corporate Unit Holder shall
(a) if a Treasury Portfolio has not replaced any Debt Securities as a
component of Corporate Units as a result of a successful remarketing or a
Tax Event Redemption, (i) prior to the fifth Business Day preceding the
First Purchase Contract Settlement Date, deposit with the Collateral Agent
a 3-Year Treasury Security having a principal amount at maturity of $1,000
and a 4-Year Treasury Security having a principal amount at maturity of
$1,000, or (ii) after the First Purchase Contract Settlement Date and prior
to the fifth Business Day preceding the Second Purchase Contract Settlement
Date, deposit with the Collateral Agent a 4-Year Treasury Security having a
principal amount at maturity of $1,000; or
(b) if a 3-Year Treasury Portfolio has replaced Series K Notes as a
component of Corporate Units as a result of a successful remarketing of
Series K Notes and a Tax Event Redemption has not occurred, prior to the
second Business Day immediately preceding the First Purchase Contract
Settlement Date, deposit with the Collateral Agent 3-Year Treasury
Securities having an aggregate principal amount at maturity of $40,000,000
and 4-Year Treasury Securities having an aggregate principal amount at
maturity of $40,000,000; or
(c) if a 4-Year Treasury Portfolio has replaced Series L Notes as a
component of Corporate Units as a result of a successful remarketing of
Series L Notes or a Tax Event Redemption has occurred, (i) prior to the
second Business Day immediately preceding the First Purchase Contract
Settlement Date, deposit with the Collateral Agent 3-Year Treasury
Securities having an aggregate principal amount at maturity of $40,000,000
and 4-Year Treasury Securities having an aggregate principal amount at
maturity of $40,000,000, or (ii) after the First Purchase Contract
Settlement Date and prior to the second Business Day immediately preceding
the Second Purchase Contract Settlement Date, 4-Year Treasury Securities
having an aggregate principal amount at maturity of $40,000,000; and
(d) in each case, transfer the 40 Corporate Units, or, in the event a
Treasury Portfolio is a component of Corporate Units, 1,600,000 Corporate
Units, to the Agent accompanied by a notice to the Agent, substantially in
the form of Exhibit B to the Pledge Agreement, stating that the Holder has
transferred the relevant types and amounts of Treasury Securities to the
Collateral Agent and requesting that the Agent instruct the Collateral
Agent to release the applicable Debt Securities or the appropriate
Applicable Ownership Interest in the applicable Treasury Portfolio,
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as the case may be, underlying such Corporate Unit, whereupon the Agent
shall promptly give such instruction to the Collateral Agent, substantially
in the form of Exhibit A to the Pledge Agreement.
Upon receipt of the Treasury Securities described in clause (a), (b) or
(c) above and the instructions described in clause (d) above, in accordance with
the terms of the Pledge Agreement, the Collateral Agent will release from the
Pledge, to the Agent, on behalf of the Holder, Debt Securities or the
appropriate Applicable Ownership Interest in the applicable Treasury Portfolio,
as the case may be, that had been components of such Corporate Unit, free and
clear of the Company's security interest therein, and upon receipt thereof the
Agent shall promptly:
(i) cancel the related Corporate Units surrendered and transferred;
(ii) transfer the Debt Securities or the appropriate Applicable
Ownership Interest in the relevant Treasury Portfolio, as the case may be, that
had been components of such Corporate Unit to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Treasury Unit Certificate executed by the Company in accordance with Section 3.3
evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Corporate Units.
Holders who elect to separate the Debt Securities or the appropriate
Applicable Ownership Interest in the relevant Treasury Portfolio, as the case
may be, from the related Purchase Contracts and to substitute Treasury
Securities for such Debt Securities or the appropriate Applicable Ownership
Interest in the relevant Treasury Portfolio, as the case may be, shall be
responsible for any fees or expenses payable to the Collateral Agent for its
services as Collateral Agent in respect of the substitution, and the Company
shall not be responsible for any such fees or expenses.
A Holder of Treasury Units may create or recreate Corporate Units by
depositing with the Collateral Agent Debt Securities having an aggregate
principal amount, in the case of the Series K Notes and the Series L Notes,
equal to the aggregate principal amount at maturity, of the 3-Year Treasury
Securities and 4-Year Treasury Securities, respectively, comprising part of the
Treasury Units, or by so depositing the appropriate Applicable Ownership
Interest in a Treasury Portfolio, in exchange for the release of such Pledged
Treasury Securities, in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.
The Company shall have the right, at any time prior to the Second
Purchase Contract Settlement Date, to defer the payment of any or all of the
Contract Adjustment Payments otherwise payable on any Payment Date to a date no
later than the Purchase Contract Settlement Date next succeeding the date such
deferral commences, 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. In connection with
any Contract Adjustment Payments so deferred, additional Contract Adjustment
Payments will accrue on the amounts so deferred at the rate of 8.75% 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 next succeeding the date such deferral commences.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the next succeeding Purchase
Contract Settlement Date, the Holder of this Corporate Unit Certificate will
receive on such Purchase Contract Settlement Date, in lieu of a cash
A-7
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 Corporate
Unit Certificate divided by (y) the Applicable Market Value related to such
Purchase Contract Settlement Date.
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 or agent benefit plans or the
satisfaction by the Company of its obligations pursuant to any contract or
security outstanding on the date of such event requiring the Company to purchase
its capital stock, (ii) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of the Company's
capital stock or the security being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company (or rights to acquire capital
stock) or repurchases 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).
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, and the rights
and obligations of the Holders to purchase Common Stock, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Second Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
later than two Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
Corporate Unit Register. Upon and after the occurrence of a Termination Event,
the Collateral Agent shall release the Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
forming a part of the Corporate Units evidenced hereby from the Pledge in
accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, a Holder of Corporate Units may settle the related Purchase
Contracts in their entirety on or prior to the fifth Business Day immediately
preceding either Purchase Contract Settlement Date, but only in integral
multiples of 40 Corporate Units; provided, however, that such settlements may
not be made during the fifth Business Day immediately preceding the First
Purchase Contract Settlement Date through the First Purchase Contract Settlement
Date; and provided, further, that if a Tax Event Redemption has occurred and the
Treasury Portfolio has become a component of the Corporate Units, Holders may
settle early only in integral multiples of 1,600,000 Corporate Units at any time
on or prior to the second Business Day immediately preceding such Purchase
Contract Settlement Date (but not during the period two Business Days
immediately preceding the First Purchase Contract Settlement Date through the
First Purchase Contract Settlement Date). In order to exercise the right to
effect any such early settlement an ("Early Settlement") with respect to any
Purchase Contracts evidenced by this Corporate Unit Certificate, the Holder of
this Corporate Unit Certificate shall deliver this Corporate Unit Certificate to
the Agent at the Corporate Trust Office duly endorsed for transfer to the
Company or in blank with the form of Election to Settle Early set forth below
duly completed and 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 the sum of (i)(A) $50 times the number of Purchase Contracts
being settled, if settled on or prior to the fifth Business Day immediately
preceding the First Purchase Contract Settlement Date or (B) $25 times the
number of Purchase Contracts being settled, if settled after the First Purchase
Contract Settlement Date plus, in either case, (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
A-8
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 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 Corporate Unit as to which Early
Settlement is effected equal to the applicable Early Settlement Rate which shall
be equal to 0.8980 newly issued shares of Common Stock per Purchase Contract
(the "First Early Settlement Rate") if settled prior to the First Purchase
Contract Settlement Date, and equal to 0.4490 newly issued shares of Common
Stock per Purchase Contract (the "Second Early Settlement Rate" and with the
First Early Settlement Rate, each, an "Early Settlement Rate") if settled after
the First Purchase Contract Settlement Date; provided however, that upon the
Early Settlement of the Purchase Contracts, (i) the Holder thereof will forfeit
the right to receive any Deferred Contract Adjustment Payments, if any, on such
Purchase Contracts, (ii) the Holder's right to receive additional Contract
Adjustment Payments in respect of such Purchase Contracts will terminate, and
(iii) no adjustment will be made to or for the Holder on account of Deferred
Contract Adjustment Payments, or any amount accrued in respect of Contract
Adjustment Payments. Each Early Settlement Rate shall be adjusted in the same
manner and at the same time as the Settlement Rate is adjusted, as provided in
the Purchase Contract Agreement.
Upon registration of transfer of this Corporate Unit Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Corporate
Unit Certificate. The Company covenants and agrees, and the Holder, by its
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Corporate Unit Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Corporate Units evidenced hereby on its behalf as
its attorney-in-fact, expressly withholds any consent to the assumption (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 relevant Treasury Portfolio, as the case may be, underlying this
Corporate Unit 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 of the Pledged Debt Securities, or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, on each Purchase
Contract Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.
The Holder of this Corporate Unit Certificate, by its acceptance
hereof, covenants and agrees to treat itself as the owner, for United States
federal, state and local income and franchise tax purposes, of the Debt
Securities or the appropriate Applicable Ownership Interest in the Treasury
Portfolio forming part of the Corporate Units evidenced hereby. The Holder of
this Corporate Unit Certificate, by its acceptance hereof, further covenants and
agrees to treat the Debt Securities forming part of the Corporate Units
evidenced hereby as indebtedness of the Company for United States federal, state
and local income and franchise tax purposes.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts. In addition, certain
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amendments to the Purchase Contract Agreement may be made without any consent of
the Holders as provided in the Purchase Contract Agreement.
THE PURCHASE CONTRACTS EVIDENCED HEREBY SHALL FOR ALL PURPOSES BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
The Company and the Agent and any agent of the Company or the Agent may
treat the Person in whose name this Corporate Unit Certificate is registered on
the Corporate Unit Register as the owner of the Corporate Units evidenced hereby
for the purpose of receiving payments of interest payable quarterly on the Debt
Securities, receiving payments of Contract Adjustment Payments and any Deferred
Contract Adjustment Payments, performance of the Purchase Contracts and for all
other purposes whatsoever, whether or not any payments in respect thereof be
overdue and notwithstanding any notice to the contrary, and neither the Company,
the Agent nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof in
accordance with the Purchase Contract Agreement, entitle the Holder to any of
the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent during regular business hours of the Agent.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Corporate Unit Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
TXU Corp.
By:
-------------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: The Bank of New York,
not individually but solely as
Attorney-in-Fact of such Holder
By:
-------------------------------------
Name:
Title:
Dated: October __, 2001
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Corporate Unit Certificates referred to in the
within mentioned Purchase Contract Agreement.
THE BANK OF NEW YORK,
as Purchase Contract Agent and Trustee
By:
-------------------------------------
Authorized Signatory
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
----------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in
common
Additional abbreviations may also be used though not in the above list.
---------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Corporate Unit Certificate and all rights thereunder, hereby
irrevocably constituting and appointing attorney to transfer said Corporate
Unit Certificate on the books of TXU Corp. with full power of substitution in
the premises.
Dated:
--------------------------------------------------------------------------
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of the
within Corporate Unit Certificates in
every particular, without alteration or
enlargement or any change whatsoever.
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-12
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the [First] [Second] Purchase
Contract Settlement Date of the Purchase Contracts underlying the number of
Corporate Units evidenced by this Corporate Unit Certificate be registered in
the name of, and delivered, together with a check in payment for any fractional
share, to the undersigned at the address indicated below unless a different name
and address have been indicated below. If shares are to be registered in the
name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated:
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Signature
Signature Guarantee:
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(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
If shares are to be registered in the name of and REGISTERED HOLDER
delivered to a Person other than the Holder, please
(i) print such Person's name and address and (ii)
provide a guarantee of your signature:
Please print name and address of
Registered Holder:
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Name Name
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Address Address
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Social Security or other
Taxpayer Identification
Number, if any
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A-13
ELECTION TO SETTLE EARLY
The undersigned Holder of this Corporate Unit Certificate hereby irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Purchase Contract Agreement with respect to the Purchase Contracts
underlying the number of Corporate Units evidenced by this Corporate Unit
Certificate specified below. The undersigned Holder directs that a certificate
for shares of Common Stock deliverable upon such Early Settlement be registered
in the name of, and delivered, together with a check in payment for any
fractional share and any Corporate Unit Certificate representing any Corporate
Units evidenced hereby as to which Early Settlement of the related Purchase
Contracts is not effected, to the undersigned at the address indicated below
unless a different name and address have been indicated below. Pledged Debt
Securities or the 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:
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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 Corporate Unit Certificates
are to be registered in the name of and delivered to,
and Pledged Debt Securities, or the Treasury Portfolio, REGISTERED HOLDER
as the case may be, are to be transferred to, a Person
other than the Holder, please print such Person's
name and address:
Please print name and address of
Registered Holder:
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Name Name
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Address Address
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Social Security or other Taxpayer Identification
Number, if any
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A-14
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:
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Date Amount of decrease Amount of increase Principal Amount of Signature of
in Principal Amount in Principal Amount this Global authorized
of the Global of the Global Certificate officer of
Certificate Certificate following such Trustee or Securities
decrease or increase Custodian
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A-16
EXHIBIT B
FORM OF TREASURY UNIT CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. Cusip No. ▇▇▇▇▇▇▇▇▇
----------------
Number of Treasury Units
-------------------
TXU CORP.
Treasury Units
($50 Stated Amount)
This Treasury Unit Certificate certifies that ___________ is the
registered Holder of the number of Treasury Units set forth above. Each Treasury
Unit represents (a) a stock purchase contract (as modified and supplemented and
in effect from time to time, a "Purchase Contract") and (b) (i) prior to the
First Purchase Contract Settlement Date (as defined herein), a 1/40, or 2.5%
undivided beneficial ownership interest in a 3-Year Treasury Security and a
1/40, or 2.5% undivided beneficial ownership interest in a 4-Year Treasury
Security and (ii) from the First Purchase Contract Settlement Date to the Second
Purchase Contract Settlement Date (as defined herein), a 1/40, or 2.5% undivided
beneficial ownership interest in a 4-Year Treasury Security. All capitalized
terms used herein without definition herein have the meaning set forth in the
Purchase Contract Agreement referred to below.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Treasury Unit evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a portion of such Treasury Unit.
The Pledge Agreement provides that all payments of the principal of any
Treasury Securities received by the Collateral Agent shall be paid by the
Collateral Agent by wire transfer of same day funds (i) in the case of any
principal payments with respect to any Treasury Securities that have been
released
B-1
from the Pledge pursuant to the Pledge Agreement, to the Holders of the
applicable Treasury Units to the accounts designated by them in writing for such
purpose no later than 2:00 p.m. New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a Business Day
or after 12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day), and (ii) in the case of the principal of any Pledged
Treasury Securities, to the Company on the applicable Purchase Contract
Settlement Date (as defined herein) in accordance with the terms of the Pledge
Agreement, in full satisfaction of the respective obligations of the Holders of
the Treasury Units of which such Pledged Treasury Securities are a part under
the Purchaser Contracts forming a part of such Treasury Units.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury Unit Certificate to purchase, and the Company, to sell, (i) not later
than November 16, 2004 (the "First Purchase Contract Settlement Date"), at a
price of $25 in cash (the "Purchase Price"), a number of newly issued shares of
Common Stock, without par value, of the Company ("Common Stock"), equal to the
applicable Settlement Rate (as defined below) and (ii), not later than November
16, 2005 (the "Second Purchase Contract Settlement Date"), at a price of $25 in
cash, a number of newly issued shares of Common stock equal to the applicable
Settlement Rate, unless, in either case on or prior to the applicable Purchase
Contract Settlement Date there shall have occurred a Termination Event or an
Early Settlement with respect to the Treasury Units of which such Purchase
Contract is a part, all as provided in the Purchase Contract Agreement and more
fully described below.
The "Settlement Rate" with respect to a Purchase Contract Settlement
Date is equal to (a) if the Applicable Market Value (as defined below)
determined with respect to such Purchase Contract Settlement Date is equal to or
greater than $55.68 (the "Threshold Appreciation Price"), 0.4490 shares of
Common Stock per Purchase Contract, (b) if such Applicable Market Value is less
than the Threshold Appreciation Price but is greater than $45.64, the number of
shares of Common Stock per Purchase Contract equal to $25 divided by such
Applicable Market Value and (c) if the Applicable Market Value is less than or
equal to $45.64, 0.5478 shares of Common Stock per Purchase Contract, in each
case subject to adjustment as provided in the Purchase Contract Agreement. No
fractional shares of Common Stock will be issued upon settlement of Purchase
Contracts, as provided in the Purchase Contract Agreement.
The Company shall pay on each Payment Date in respect of each Purchase
Contract evidenced hereby an amount (the "Contract Adjustment Payments") equal
to (A) for the period prior to the First Purchase Contract Settlement Date,
3.65% per annum of the Stated Amount, or, and (B) for the period from and after
the First Purchase Contract Settlement Date, 3.30% per annum of the Remaining
Stated Amount, computed, in each case, on the basis of a 360 day year of twelve
30 day months, subject to deferral at the option of the Company as provided in
the Purchase Contract Agreement and more fully described below. Such Contract
Adjustment Payments shall be payable to the Person in whose name this Treasury
Unit Certificate (or a Predecessor Treasury Unit Certificate) 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
referred to below 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 Treasury Unit Register.
Unless the context otherwise requires, each provision of this Security
shall be part of the Purchase Contracts evidenced hereby. This Security and each
Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement,
dated as of October 1, 2001 (as may be supplemented from time to time, the
"Purchase Contract Agreement") between the Company and The Bank of New York, as
Purchase Contract Agent and trustee (including any successor thereunder, herein
called the "Agent"), to which
B-2
Purchase Contract Agreement and supplemental agreements thereto reference is
hereby made for a description of the respective rights, limitations of rights,
obligations, duties and immunities thereunder of the Agent, the Company and the
Holders and of the terms upon which the Treasury Unit Certificates are, and are
to be, executed and delivered.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Treasury Unit to purchase at the applicable Purchase Price, and the
Company to sell, a number of newly issued shares of Common Stock equal to the
applicable Early Settlement Rate or the applicable Settlement Rate, as
applicable.
The "Applicable Market Value" with respect to a Purchase Contract
Settlement Date means the average of the Closing Price per share of Common Stock
on each of the twenty consecutive Trading Days ending on the third Trading Day
immediately preceding such 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.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of the Treasury Units evidenced hereby shall pay, on each Purchase
Contract Settlement Date, the applicable Purchase Price for the shares of Common
Stock purchased pursuant to each Purchase Contract evidenced hereby by effecting
a Cash Settlement or an Early Settlement. A Holder of Treasury Units who does
not make such payment in accordance with the Purchase Contract Agreement or does
not notify the Agent of such Holder's intention, on or prior to 5:00 p.m. New
York City time on the fifth Business Day immediately preceding a Purchase
Contract Settlement Date, to make an effective Cash Settlement or an Early
Settlement, shall have defaulted in its obligations under the applicable portion
of the related Purchase Contract, and the Collateral Agent shall exercise its
rights as a secured creditor for the benefit of the Company under the Purchase
Contract Agreement and the Pledge Agreement and shall apply the principal amount
at maturity of the related Pledged Treasury Securities (which shall be the
3-Year Treasury Security in the case of the First Purchase Contract Settlement
Date, and the 4-Year Treasury Security in the case of the Second Purchase
Contract Settlement Date) held by the Collateral Agent to the Purchase Price of
the Common Stock on such Purchase Contract Settlement Date.
The Company shall not be obligated to issue any shares of Common Stock
in respect of any portion of a Purchase Contract on a Purchase Contract
Settlement Date or deliver any certificates therefor to the Holder unless it
shall have received payment in full of the aggregate purchase price for the
shares of Common Stock to be purchased thereunder in the manner herein set
forth.
The Treasury Units are issuable only in registered form and only in
denominations of a single Treasury Unit and any integral multiple thereof. The
transfer of any Treasury Unit Certificate will be registered and Treasury Unit
Certificates may be exchanged as provided in the Purchase Contract Agreement.
The Treasury Unit Registrar may require a Holder, among other things, to furnish
B-3
appropriate endorsements and transfer documents permitted by the Purchase
Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
A Holder of a Treasury Unit may, at any time on or prior to the fifth
Business Day immediately preceding the Second Purchase Contract Settlement Date,
create or recreate Corporate Units by depositing with the Collateral Agent Debt
Securities or the appropriate Applicable Ownership Interest in a Treasury
Portfolio, as the case may be, having an aggregate principal amount equal to the
aggregate principal amount at maturity of, and in substitution for all, but not
less than all, of the Treasury Securities comprising part of the Treasury Unit
in accordance with the Purchase Contract Agreement; provided, however, that if a
Treasury Portfolio has not replaced any Debt Securities as a component of
Corporate Units as a result of a successful remarketing or a Tax Event
Redemption, such Collateral Substitutions may not be made during the period from
the fifth Business Day immediately preceding the First Purchase Contract
Settlement Date through the First Purchase Contract Settlement Date; if a 3-Year
Treasury Portfolio has replaced Series K Notes as a component of Corporate Units
as a result of a successful remarketing of Series K Notes and a Tax Event
Redemption has not occurred, such Collateral Substitutions may not be made
during the period from the second Business Day immediately preceding the First
Purchase Contract Settlement Date through the First Purchase Contract Settlement
Date; and if a Tax Event Redemption has occurred or the 4-Year Treasury
Portfolio has replaced the Series L Notes as a result of a successful
remarketing of the Series L Notes, Holders of Treasury Units may make such
Collateral Substitutions at any time on or prior to the second Business Day
immediately preceding the Second Purchase Contract Settlement Date (but not
during the period from the second Business Day immediately preceding the First
Purchase Contract Settlement Date through the First Purchase Contract Settlement
Date). Holders of Treasury Units may make such Collateral Substitutions and
establish Corporate Units (i) only in integral multiples of 40 Treasury Units if
Treasury Securities are being replaced by only Debt Securities, or (ii) only in
integral multiples of 1,600,000 Treasury Units if any Treasury Security is being
replaced by the Applicable Ownership Interest in a Treasury Portfolio. To create
40 Corporate Units (if a Tax Event Redemption has not occurred and Series K
Notes and Series L Notes remain components of Corporate Units), or 1,600,000
Corporate Units (if a Tax Event Redemption has occurred or a Treasury Portfolio
has replaced either series of Debt Securities as a result of a successful
remarketing of such Debt Securities), the Treasury Unit Holder shall
(a) if a Treasury Portfolio has not replaced any Debt Securities as a
component of Corporate Units as a result of a successful remarketing or a Tax
Event Redemption, (i) prior to the fifth Business Day preceding the First
Purchase Contract Settlement Date, deposit with the Collateral Agent $1,000 in
aggregate principal amount of Series K Notes and $1,000 in aggregate principal
amount of Series L Notes, or (ii) after the First Purchase Contract Settlement
Date, deposit with the Collateral Agent $1,000 in aggregate principal amount of
Series L Notes; or
(b) if a 3-Year Treasury Portfolio has replaced Series K Notes as a
component of Corporate Units as a result of a successful remarketing of Series K
Notes and a Tax Event Redemption has not occurred, prior to the second Business
Day immediately preceding the First Purchase Contract Settlement Date, deposit
with the Collateral Agent the Applicable Ownership Interest in a 3-Year Treasury
Portfolio and $40,000,000 aggregate principal amount of Series L Notes; or
(c) if a 4-Year Treasury Portfolio has replaced Series L Notes as a
component of Corporate Units as a result of a successful remarketing of Series L
Notes or a Tax Event Redemption has occurred prior to the second Business Day
immediately preceding the Second Purchase Contract Settlement Date, deposit with
the Collateral Agent the Applicable Ownership Interest in the applicable
Treasury Portfolio for each 1,600,000 Corporate Units being created by the
Holder and having an
B-4
aggregate principal amount of $80,000,000, or, if after the First Purchase
Contract Settlement Date, $40,000,000; and
(d) in each case, transfer and surrender the related 40 Treasury
Units, or in the event a Treasury Portfolio is a component of Corporate Units,
1,600,000 Corporate Units, to the Agent accompanied by a notice to the Agent,
substantially in the form of Exhibit B to the Pledge Agreement, stating that the
Holder has transferred the relevant amount of Debt Securities or the appropriate
Applicable Ownership Interest in the relevant Treasury Portfolio, as the case
may be, to the Collateral Agent and requesting that the Agent instruct the
Collateral Agent to release the Treasury Securities underlying such Treasury
Units, whereupon the Agent shall promptly give such instruction to the
Collateral Agent, substantially in the form of Exhibit A to the Pledge
Agreement.
Upon receipt of the Debt Securities or the appropriate Applicable
Ownership Interest in the applicable Treasury Portfolio, as the case may be,
described in clause (a), (b) or (c) above and the instructions described in
clause (d) above, in accordance with the terms of the Pledge Agreement, the
Collateral Agent will effect the release of the Treasury Securities having a
corresponding aggregate principal amount from the Pledge to the Agent free and
clear of the Company's security interest therein, and upon receipt thereof the
Agent shall promptly:
(i) cancel the related Treasury Units surrendered and transferred;
(ii) transfer the Treasury Securities that had been components of such
Treasury Units to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Corporate Unit Certificate executed by the Company in accordance with Section
3.3 evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Treasury Units.
Holders who elect to separate Treasury Securities from the related
Purchase Contract and to substitute Debt Securities or the Applicable Ownership
Interest in the relevant Treasury Portfolio, as the case may be, for such
Treasury Securities shall be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any such fees or
expenses.
A Holder of Corporate Units may create or recreate Treasury Units by
depositing with the Collateral Agent 3-Year Treasury Securities and 4-Year
Treasury Securities, having an aggregate principal amount at maturity equal to
the aggregate principal amount of the Series K Notes and the Series L Notes,
respectively, or, the appropriate Applicable Ownership Interest in the Treasury
Portfolio equal to the aggregate principal amount of the Pledged Treasury
Securities at maturity, in exchange for the release of such Pledged Debt
Securities or appropriate Applicable Ownership Interest in a Treasury Portfolio,
as the case may be, in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.
The Company shall have the right, at any time prior to the Second
Purchase Contract Settlement Date, to defer the payment of any or all of the
Contract Adjustment Payments otherwise payable on any Payment Date to a date no
later than the Purchase Contract Settlement Date next succeeding the date such
deferral commences, 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. In connection with
any Contract Adjustment Payments so deferred, additional Contract Adjustment
Payments will accrue on the amounts so deferred at the rate of 8.75% per annum
(computed on the basis of a 360 day year of twelve 30 day months), compounding
on each succeeding
B-5
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 next succeeding the date such deferral commences.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the next succeeding Purchase
Contract Settlement Date, the Holder of this Treasury Unit Certificate will
receive on such 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 Treasury Unit
Certificate divided by (y) the Applicable Market Value related to such Purchase
Contract Settlement Date.
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 or agent benefit plans or the
satisfaction by the Company of its obligations pursuant to any contract or
security outstanding on the date of such event requiring the Company to purchase
its capital stock, (ii) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of the Company's
capital stock or the security being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company (or rights to acquire capital
stock) or repurchases 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).
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, and the rights and
obligations of the Holders to purchase Common Stock shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Second Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
later than two business days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
Treasury Unit Register. Upon and after the occurrence of a Termination Event,
the Collateral Agent shall release the Treasury Securities forming a part of the
Treasury Units evidenced hereby from the Pledge in accordance with the
provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, a Holder of Treasury Units may settle the related Purchase
Contracts in their entirety on or prior to the second Business Day immediately
preceding either Purchase Contract Settlement Date, but only in integral
multiples of 40 Treasury Units. In order to exercise the right to effect any
such early settlement (an "Early Settlement") with respect to any Purchase
Contracts evidenced by this Treasury Unit Certificate, the Holder of this
Treasury Unit Certificate shall deliver this Treasury Unit Certificate to the
Agent at the Corporate Trust Office duly endorsed for transfer to the Company or
in blank with the form of Election to Settle Early set forth below duly
completed and accompanied by payment in the form of immediately available funds
payable to the order of the Company in an amount (the "Early Settlement
B-6
Amount") equal to the sum of (i)(A) $50 times the number of Purchase Contracts
being settled, if settled on or prior to the second Business Day immediately
preceding the First Purchase Contract Settlement Date, or (B) $25 times the
number of Purchase Contracts being settled, if settled between the First
Purchase Contract Settlement Date and the second Business Day immediately
preceding the Second Purchase Contract Settlement Date, plus in either case,
(ii) if such delivery is made with respect to any Purchase Contracts during the
period from the close of business on any Record Date next preceding any Payment
Date to the opening of business on such Payment Date, an amount equal to the
Contract Adjustment Payments payable, if any, on such Payment Date with respect
to such Purchase Contracts. Upon Early Settlement of Purchase Contracts by a
Holder of the related Securities, the Pledged Treasury Securities underlying
such Securities shall be released from the Pledge as provided in the Pledge
Agreement and the Holder shall be entitled to receive a number of shares of
Common Stock on account of each Purchase Contract forming part of a Treasury
Unit as to which Early Settlement is effected equal to the applicable Early
Settlement Rate which shall be equal to 0.8980 newly issued shares of Common
Stock per Purchase Contract (the "First Early Settlement Rate") if settled prior
to the First Purchase Contract Settlement Date, and equal to 0.4490 newly issued
shares of Common Stock per Purchase Contract (the "Second Early Settlement Rate"
and with the First Early Settlement Rate, each, an "Early Settlement Rate") if
settled after the First Purchase Contract Settlement Date; provided however,
that upon the Early Settlement of the Purchase Contracts, (i) the Holder thereof
will forfeit the right to receive any Deferred Contract Adjustment Payments, if
any, on such Purchase Contracts, (ii) the Holder's right to receive additional
Contract Adjustment Payments in respect of such Purchase Contracts will
terminate, and (iii) no adjustment will be made to or for the Holder on account
of Deferred Contract Adjustment Payments, or any amount accrued in respect of
Contract Adjustment Payments. Each Early Settlement Rate shall be adjusted in
the same manner and at the same time as the Settlement Rate is adjusted, as
provided in the Purchase Contract Agreement.
Upon registration of transfer of this Treasury Unit Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Treasury
Unit Certificate. The Company covenants and agrees, and the Holder, by its
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Treasury Unit Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Treasury Units evidenced hereby on its behalf as its
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in 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 Treasury Unit 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 of
the Pledged Treasury Securities on each Purchase Contract Settlement Date shall
be paid by the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no right,
title or interest in such payments.
The Holder of this Treasury Unit Certificate, by its acceptance hereof,
covenants and agrees to treat itself as the owner, for United States federal,
state and local income and franchise tax purposes, of the Treasury Securities
forming part of the Treasury Units evidenced hereby.
B-7
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts. In addition, certain amendments to the Purchase Contract
Agreement may be made without any consent of the Holders as provided in the
Purchase Contract Agreement.
THE PURCHASE CONTRACTS EVIDENCED HEREBY SHALL FOR ALL PURPOSES BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
The Company and the Agent and any agent of the Company or the Agent may
treat the Person in whose name this Treasury Unit Certificate is registered on
the Treasury Unit Register as the owner of the Treasury Units evidenced hereby
for the purpose of receiving payments of interest on the Treasury Securities,
receiving payments of Contract Adjustment Payments and any Deferred Contract
Adjustment Payments, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect thereof be overdue
and notwithstanding any notice to the contrary, and neither the Company, the
Agent nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof, in
accordance with the Purchase Agreement, entitle the Holder to any of the rights
of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent during regular business hours of the Agent.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Treasury Unit Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
B-8
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
TXU Corp.
By:
---------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: The Bank of New York,
not individually but solely as
Attorney-in-Fact of such Holder
By:
-------------------------------
Name:
Title:
Dated: October 16, 2001
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Treasury Unit Certificates referred to in the
within-mentioned Purchase Contract Agreement.
THE BANK OF NEW YORK,
as Purchase Contract Agent and Trustee
By:
---------------------------------
Authorized Signatory
B-9
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
----------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in
common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee)
--------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Treasury Unit Certificate and all rights thereunder, hereby
irrevocably constituting and appointing attorney to transfer said Treasury
Unit Certificate on the books of TXU Corp. with full power of substitution in
the premises.
Dated:
--------------------------------------------------------------------------
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of the
within Treasury Unit Certificates in
every particular, without alteration or
enlargement or any change whatsoever.
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-10
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the [First] [Second] Purchase
Contract Settlement Date of the Purchase Contracts underlying the number of
Treasury Units evidenced by this Treasury Unit Certificate be registered in the
name of, and delivered, together with a check in payment for any fractional
share, to the undersigned at the address indicated below unless a different name
and address have been indicated below. If shares are to be registered in the
name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
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 REGISTERED HOLDER
of and delivered to a Person other than the
Holder, please print such Person's name
and address:
Please print name and address
of Registered Holder:
Name Name
Address Address
Social Security or other Taxpayer
Identification Number, if any
---------------------------------
B-11
ELECTION TO SETTLE EARLY
The undersigned Holder of this Treasury Unit Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Treasury Units evidenced by this Treasury
Unit Certificate specified below. The undersigned Holder directs that a
certificate for shares of Common Stock deliverable upon such Early Settlement be
registered in the name of, and delivered, together with a check in payment for
any fractional share and any Treasury Unit Certificate representing any Treasury
Units evidenced hereby as to which Early Settlement of the related Purchase
Contracts is not effected, to the undersigned at the address indicated below
unless a different name and address have been indicated below. Pledged Treasury
Securities deliverable upon such Early Settlement will be transferred in
accordance with the transfer instructions set forth below. If shares are to be
registered in the name of a Person other than the undersigned, the undersigned
will pay any transfer tax payable incident thereto.
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.
B-12
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock or Treasury Unit REGISTERED HOLDER
Certificates are to be registered in the
name of and delivered to, and Pledged
Treasury Securities are to be transferred
to, a Person other than the Holder, please
print such Person's name and address:
Please print name and address
of Registered Holder:
Name Name
Address Address
Social Security or other Taxpayer
Identification Number, if any
---------------------------------
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
B-13
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
--------------------------------------------------------------------------------------------------------------------
Date Amount of decrease Amount of increase Principal Amount of Signature of
in Principal Amount in Principal Amount this Global authorized
of the Global of the Global Certificate officer of
Certificate Certificate following such Trustee or Securities
decrease or increase Custodian
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B-14
EXHIBIT C
NOTICE TO SETTLE BY SEPARATE CASH
Attention:
Re: Securities of TXU Corp. (the "Company")
The undersigned Holder hereby irrevocably notifies you in
accordance with Section 5.4 of the Purchase Contract Agreement, dated as of
October 1, 2001 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 [First] [Second] Purchase
Contract Settlement Date, (in lawful money of the United States by [certified or
cashiers check or] wire transfer, in immediately available funds), $_________ as
the Purchase Price for the shares of Common Stock issuable to such Holder by the
Company under the related Purchase Contract on the [First] [Second] Purchase
Contract Settlement Date. The undersigned Holder hereby instructs you to notify
promptly the Collateral Agent of the undersigned Holders election to make such
cash settlement with respect to the Purchase Contracts related to such Holder's
[Corporate Units] [Treasury Units].
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.
Please print name and address of Registered Holder:
--------------------------------------------------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
-------------------------
-------------------------
C-1