Exhibit 1
PURCHASE AGREEMENT
PURCHASE AGREEMENT ("Agreement") dated as of April 23, 2004, by and among
each of the entities listed on the attached Schedule A (each a "Seller," and
together the "Sellers"), and TXU Corp., a Texas corporation ("Purchaser").
INTRODUCTION
Each Seller is a Class B Preferred Member of TXU Energy Company LLC, a
Delaware limited liability company (the "Company"), and is a party to the Second
Amended and Restated Limited Liability Company Agreement of the Company, dated
as of July 1, 2003 (the "LLC Agreement"). Capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the LLC
Agreement.
Each Seller proposes to (i) sell, assign, and transfer its Class B
Preferred Membership Interests to the Purchaser in accordance with the terms and
subject to the conditions set forth in this Agreement and (ii) withdraw from the
Company as a Class B Preferred Member.
The Purchaser proposes to (i) purchase, acquire, and accept each Seller's
Class B Preferred Membership Interests in accordance with the terms and subject
to the conditions set forth in this Agreement and (ii) be admitted to the
Company as the substituted Class B Preferred Member.
NOW, THEREFORE, in consideration of the premises and agreements contained
herein, the parties hereto agree as follows:
ARTICLE I.
SALE AND PURCHASE
SECTION 1.1. Sale and Purchase of Interests.
(a) Subject to the terms and conditions set forth herein, each Seller
hereby agrees to sell, assign, transfer, convey and deliver to Purchaser, and
Purchaser hereby agrees to purchase, acquire, and accept, all of each Seller's
Class B Preferred Membership Interests for an aggregate purchase price of
$1,228,646,317.48 plus accrued and unpaid dividends thereon from and including
April 1, 2004 through but excluding the Closing Date (as defined below) (the
"Purchase Price"), with each Seller receiving the portion of the aggregate
Purchase Price set forth on the attached Schedule A.
(b) Subject to the terms and conditions of this Agreement, the sale and
purchase of the Class B Preferred Membership Interests contemplated by this
Agreement shall take place at a closing (the "Closing") to be held at or
directed from the offices of Xxxxxx Xxxx & Priest LLP, at 10:00 A.M., Eastern
Daylight Time on April 26, 2004 or at such
other place and or at such other time or such other date as the Purchaser and
Sellers shall mutually agree upon in writing (the date on which the Closing
takes place being the "Closing Date").
(c) At the Closing, the Sellers shall deliver, or cause to be delivered, to
the Purchaser, (i) the Class B Preferred Membership Interest Certificates
evidencing the Sellers' Class B Preferred Membership Interests and (ii) the
written resignation of the Class B Preferred Manager from the Company's Board of
Managers as contemplated by Section 1.7(b) of this Agreement.
(d) At the Closing, the Purchaser shall deliver, or cause to be delivered,
(i) to the Sellers, the Purchase Price by wire transfer in immediately available
funds to an account designated in writing by the Sellers to the Purchaser not
later than one business day prior to the Closing Date and (ii) to the Secretary
of the Company, a duly executed Class B Joinder substantially in the form
attached to the LLC Agreement.
SECTION 1.2. Assignment of Other Rights. Effective upon the Closing, each
Seller hereby assigns, transfers, conveys and delivers to Purchaser, and
Purchaser hereby accepts such assignment, transfer, conveyance and delivery of,
any and all rights that the Seller may have under and in accordance with the
Purchase Agreement dated as of November 18, 2002 among the Sellers, Purchaser
and the Company (the "Purchase Agreement"), the Registration Rights Agreement
dated as of November 22, 2002 among the Purchaser and Sellers, as amended (the
"Registration Rights Agreement") and the Exchange Agreement.
SECTION 1.3. Assumption. Effective upon the Closing, Purchaser hereby
assumes any and all obligations of each Seller in respect of its Class B
Preferred Membership Interests under the LLC Agreement, Class B Preferred
Membership Interest Certificate and the Delaware Act.
SECTION 1.4. Release of Sellers. Effective upon the Closing and the
delivery by Purchaser of the Class B Joinder to the Secretary of the Company,
pursuant to the terms of the LLC Agreement, each Seller shall no longer be a
member of the Company in accordance with Section 18-702(b)(3) of the Delaware
Act and shall have no further duty, liability, or obligation under the LLC
Agreement and the Class B Preferred Membership Interest Certificate.
SECTION 1.5. Withdrawal and Admission. Effective upon the Closing and the
delivery by Purchaser of the Class B Joinder to the Secretary of the Company,
pursuant to the terms of the LLC Agreement, Purchaser is hereby admitted to the
Company as a substituted Class B Preferred Member in respect of the Class B
Preferred Membership Interests of each Seller acquired hereunder and,
immediately thereafter, each Seller hereby withdraws, and is withdrawn, from the
Company as a Class B Preferred Member.
SECTION 1.6. Effect of Withdrawal and Substitution. Effective upon the
Closing and the delivery by Purchaser of the Class B Joinder to the Secretary of
the Company, pursuant to the terms of the LLC Agreement, the Capital Account of
each Seller will be transferred to Purchaser. After the Closing, the portion of
the Net Income or Net Losses of the Company and the portions of all other items
of income, gain, loss, deduction, or credit allocable to the Class B
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Preferred Membership Interests of each Seller on or after such date shall be
credited or charged, as the case may be, to Purchaser and not to Seller, as
provided in Section 8.05(b) of the LLC Agreement. Purchaser shall be entitled to
all distributions or payments in respect of its Class B Preferred Membership
Interests (not including the payment to Sellers under Section 1.1 hereof) made
after the Closing. Notwithstanding anything to the contrary in this Agreement or
the LLC Agreement, for the period ending on the Closing Date the aggregate
amount of income of the Company (in the form of net profits, taxable income,
gain or otherwise) allocated to each Seller in respect of its Class B Preferred
Membership Interest shall not exceed the sum of the amount of quarterly cash
distributions paid by the Company to such Seller plus the amount of any accrued
and unpaid dividends in respect of such Interest for such period prior to the
Closing Date.
SECTION 1.7. Acknowledgements of Sellers. The Sellers hereby expressly
acknowledge and agree as follows:
(a) the Closing Date shall constitute the Termination Date as defined in,
and for purposes of, the Exchange Agreement, and that the Sellers and the DLJ
VCOC Fund shall, effective upon the Closing, no longer have any rights under
Section 6 of the Exchange Agreement.
(b) the Sellers and the DLJ VCOC Fund shall, effective upon the Closing, no
longer have any rights under Section 3.02 of the LLC Agreement and Sections 3.07
and 3.08 of the Class B Preferred Membership Interest Certificates, and must
take any and all actions necessary to have the DLJ VCOC Fund's designee resign
from the Company's Board of Managers effective as of the Closing Date; provided,
that upon such resignation, such designee shall continue to be entitled to the
indemnification and other rights pursuant to Article XII of the LLC Agreement.
(c) the Sellers and the DLJ VCOC Fund shall, effective upon the Closing, no
longer have any right to receive any of the information contemplated by Section
3.02 of the Class B Preferred Membership Interest Certificates, and additionally
agree to keep confidential, and cause the DLJ VCOC Fund to keep confidential,
any non-public information previously received by the Sellers and/or the DLJ
VCOC under Section 3.02 of the Class B Preferred Membership Interest
Certificates.
(d) without limiting the foregoing, the Sellers shall have no further
rights under the LLC Agreement, the Class B Preferred Membership Interest
Certificates, the Purchase Agreement, the Exchange Agreement and the
Registration Rights Agreement; provided, however, that the Sellers' rights to
indemnification from the Company pursuant to Article VI of the Class B Preferred
Membership Interest Certificates shall survive as if the Sellers remained
holders of such Certificates.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF SELLER
Each Seller represents and warrants to Purchaser as follows:
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SECTION 2.1. Authority; Validity. Seller has all requisite power and
authority to execute, deliver, and perform this Agreement. The execution and
delivery of this Agreement by Seller, the performance by it of its obligations
hereunder, and the consummation of the transactions contemplated hereby have
been duly authorized by all requisite action on the part of Seller. This
Agreement has been duly executed and delivered by Seller, and (assuming due
authorization, execution, and delivery by the Purchaser), this Agreement
constitutes a legal, valid, and binding obligation of Seller, enforceable
against Seller, in accordance with its terms.
SECTION 2.2. Ownership Interest. Seller is the sole owner of the Class B
Preferred Membership Interests listed on Schedule A, and, upon the Closing, such
Class B Preferred Membership Interests will be free and clear of all Claims. For
purposes of this Agreement, "Claims" shall mean any security interest, pledge,
hypothecation, mortgage, lien (including, without limitation, environmental and
tax liens), violation, charge, lease, license, encumbrance, servient easement,
adverse claim, reversion, reverter, preferential arrangement, restrictive
covenant, condition or restriction of any kind, including without limitation,
any restriction on the use, voting, transfer, receipt of income or other
exercise of any attributes of ownership.
SECTION 2.3. Transfer of Interest. Upon consummation of the transactions
contemplated by this Agreement, Seller will transfer good and marketable title
to its Class B Preferred Membership Interests to Purchaser, free and clear of
all Claims (other than Claims created by or through Purchaser or its
Affiliates).
SECTION 2.4. No Conflicts; Consents. The execution, delivery, and
performance of this Agreement by the Seller and the consummation of the
transactions contemplated hereby do not and will not (i) violate, conflict with,
or result in a breach of any provision of the certificate of formation or
limited liability company agreement (or similar organizational documents) of the
Seller, (ii) conflict with or result in a default (or give rise to any right of
termination, cancellation, or acceleration) under any of the terms, conditions,
or provisions of any note, bond, lease, mortgage, indenture, permit, agreement,
or other instrument or obligation to which the Seller is a party, or by which
the Seller or any of its properties or assets may be bound or affected, (iii)
conflict with or violate any statute, ordinance, law, rule, regulation, or
governmental order applicable to the Seller or its properties or assets, or (iv)
result in the creation or imposition of any Claim upon any property or assets
used or held by the Seller. No waiver, consent, or approval by, any notification
or filing with, or any other action by, any Person is required in connection
with the execution, delivery, and performance by the Seller of this Agreement or
the consummation of the transactions contemplated hereby.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants to Sellers as follows:
SECTION 3.1. Existence and Power. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to execute, deliver, and perform this Agreement, to carry out its
obligations hereunder, and to consummate the transactions contemplated hereby.
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SECTION 3.2. Authority; Validity. The execution and delivery of this
Agreement by Purchaser, the performance by it of its obligations hereunder, and
the consummation of the transactions contemplated hereby have been duly
authorized by all requisite action on the part of Purchaser. This Agreement has
been duly executed and delivered by Purchaser, and (assuming due authorization,
execution, and delivery by the Sellers) this Agreement constitutes a legal,
valid, and binding obligation of Purchaser enforceable against Purchaser in
accordance with its terms.
SECTION 3.3. No Conflicts; Consents. The execution, delivery, and
performance of this Agreement by Purchaser and the consummation of the
transactions contemplated hereby do not and will not (i) violate, conflict with,
or result in a breach of any provision of the articles or certificate of
incorporation or by-laws of Purchaser, (ii) conflict with or result in a default
(or give rise to any right of termination, cancellation, or acceleration) under
any of the terms, conditions, or provisions of any note, bond, lease, mortgage,
indenture, permit, agreement, or other instrument or obligation to which
Purchaser is a party, or by which Purchaser or any of its properties or assets
may be bound or affected, (iii) conflict with or violate any statute, ordinance,
law, rule, regulation, or governmental order applicable to Purchaser or its
properties or assets, or (iv) result in the creation or imposition of any Claim
upon any property or assets used or held by Purchaser. No waiver, consent, or
approval by, any notification or filing with, or any other action by, any Person
is required in connection with the execution, delivery, and performance by
Purchaser of this Agreement or the consummation of the transactions contemplated
hereby.
ARTICLE IV.
ADDITIONAL AGREEMENT
SECTION 4.1. Transfer as Purchase and Sale. Purchaser, the Company and
Sellers hereby agree to treat the Transfer of each Seller's Class B Preferred
Membership Interests to Purchaser as contemplated in this Agreement as a
purchase and sale under Sections 741 and 1001 of the Code, with any gain
therefrom treated as gain from the sale or exchange of a capital asset, and not
as a retirement under Section 736 of the Code. The parties further agree that no
portion of the consideration paid by Purchaser to any Seller under this
Agreement is intended to be treated as attributable to any "unrealized
receivables" or "inventory items" of the Company within the meaning of Section
751(a) of the Code.
SECTION 4.2. Subsequent Sales of Class B Preferred Membership Intrerests.
If at any time prior to 90 days after April 16, 2004, the Purchaser or any of
its Affiliates acquires, or enters into an agreement, commitment or other
arrangement to acquire, any Class B Preferred Membership Interest from any other
holder of the Class B Preferred Membership Interests for an effective purchase
price greater than the Purchase Price attributable to the Class B Preferred
Membership Interests being sold pursuant to this Agreement (whether measured by
the effective price per underlying share of TXU Common Stock, liquidation value
of the Class B Preferred Membership Interest or otherwise) (a "Subsequent
Transaction"), then Purchaser shall immediately pay to each Seller an amount
equal to the difference between (x) the effective purchase price per dollar of
liquidation value of Class B Preferred Membership Interest paid to such holder
in such Subsequent Transaction and (y) the Purchase Price per dollar of
liquidation value of Class B Preferred Membership Interest sold pursuant to this
Agreement, multiplied by
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the aggregate amount of liquidation value of Class B Preferred Membership
Interest sold by each Seller pursuant to this Agreement. For purposes of this
Section, the effective purchase price and the Purchase Price shall exclude
payments made in respect of accrued and unpaid dividends.
SECTION 4.3. Cooperation on Tax Matters. The Purchaser, each Seller and the
Company shall cooperate, and shall cause their respective officers, partners,
members, employees, agents, auditors and representatives to cooperate, in
preparing and filing all Tax returns and information reports in respect of Taxes
relating to the Company or an investment therein, including maintaining and
making available to each other all records necessary in connection with Taxes
and in resolving all disputes and audits with respect to all taxable periods
relating to Taxes. Purchaser and the Company recognize that each Seller may need
information and/or access, from time to time, after the Closing Date, to certain
accounting and Tax records and information held by Purchaser or the Company and
that relate to the Company; therefore, each of the Company and the Purchaser
agrees (a) to retain and maintain such records in accordance with its normal
recordkeeping policy and procedure for the taxable period first ending after the
Closing Date and for all prior taxable periods until the expiration of the
statute of limitations of the taxable periods to which such Tax returns and
other documents relate, and (b) to provide each Seller with information relating
to Taxes as reasonably requested by such Seller and to allow Seller and their
agents and representatives, at times and dates mutually acceptable to the
parties, to inspect, review, and make copies of such records as Seller may deem
necessary or appropriate from time to time, such activities to be conducted
during normal business hours and at the requesting party's expense.
ARTICLE V.
MISCELLANEOUS
SECTION 5.1. Further Assurances. Each of the parties hereto shall execute
such other documents and instruments of transfer or assignment and do such other
acts or things as may be reasonably required or desirable to carry out the
intent of the parties hereunder and the provisions of this Agreement and the
transactions contemplated hereby.
SECTION 5.2. Notices, etc. All notices and other communications provided
for hereunder shall be in writing and shall be delivered in person or by courier
service, with written receipt of acceptance returned to sender, or via certified
or registered mail, return receipt requested (postage and charges prepaid), or
by telecopier to each of the parties at the address or telecopier number set
forth in Section 13.01 of the LLC Agreement (with respect to Purchaser) and on
the Class B Preferred Members Schedule (with respect to the Sellers) or
telecopier number as shall be designated by a party in a written notice to the
other parties. All such notices and communications shall, when mailed or
telecopied, be effective when received at the relevant address. Telecopied
communications must be followed by a hard copy sent by registered or certified
mail, postage and charges prepaid.
SECTION 5.3. Amendments; Waivers. This Agreement may be amended or
modified, and any of the terms or conditions hereof may be waived, only by a
written instrument executed by the parties hereto, or in the case of a waiver,
by the party waiving compliance. Any waiver by any party of any condition, or of
the breach of any provision or term contained in this
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Agreement, in any one or more instances, shall not be deemed to be nor construed
as a furthering or continuing waiver of any such condition, or of the breach of
any other provision or term of this Agreement.
SECTION 5.4. Costs and Expenses. Each party hereto agrees to pay its own
costs and expenses with respect to the transactions contemplated by this
Agreement.
SECTION 5.5. No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto, the Company and their successors and assigns and
nothing herein, express or implied, shall give or be construed to give any
Person other than the parties hereto, the Company and such successors and
assigns any legal or equitable rights hereunder.
SECTION 5.6. Governing Law/Consent to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York. Each of the parties hereto hereby (i) submits to the exclusive
jurisdiction of any state or federal court sitting in the Borough of Manhattan
of the City of New York for the purpose of any action arising out of or relating
to this Agreement brought by any party hereto, and (ii) irrevocably waives, and
agrees not to assert by way of motion, defense or otherwise, in any such action,
any claim that it is not subject personally to the jurisdiction of the
above-names courts, that its property is exempt or immune from attachment or
execution, that the action is brought in an inconvenient forum, that the venue
of the action is improper, or that this Agreement or the transactions
contemplated by this Agreement may not be enforced in or by any of the
above-named courts.
SECTION 5.7. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES
TO THE EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.
SECTION 5.8. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original and, when taken
together, shall constitute one agreement.
SECTION 5.9. Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
[Signatures follow on separate pages]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
SELLERS:
UXT HOLDINGS, LLC
By: UXT Holdco 2, LLC
its sole member
DLJ Merchant Banking III, Inc.,
its Managing Member
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx
Title: Principal
UXT INTERMEDIARY, LLC
By: UXT AIV, L.P., its Managing Member
By: DLJ Merchant Banking III, Inc., its
Managing General Partner
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx
Title: Principal
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PURCHASER:
TXU CORP.
By: Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Treasurer & Assistant
Secretary
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By signing below, the undersigned hereby acknowledges, and subject to the
receipt from Purchaser of the Class B Joinder and, pursuant to the terms of the
LLC Agreement, agrees to Sections 1.4, 1.5, 1.6, 4.1 and 4.3 of this Agreement.
TXU ENERGY COMPANY LLC
By: Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Treasurer & Assistant
Secretary
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Schedule A
Class B Preferred Purchase Price
Membership Interests (excluding accrued
Seller Certificate # (by liquidation amount) dividends)
-------------------- --------------- ------------------------- ---------------------
UXT Intermediary LLC 1 $306,927,148.66 $754,209,821.88
UXT Holdings LLC 2 $193,072,851.34 $474,436,495.60
A-1
