Exhibit 10(h)
PURCHASE AGREEMENT
As of June 29, 2004
Xxxxxxx Xxxxx International
Ropemaker Place
00 Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Dear Sirs:
TXU Corp., a Texas corporation (the "Company"), subject to the terms
and conditions and in reliance upon the representations and warranties set forth
herein, confirms its agreement with Xxxxxxx Xxxxx International ("Xxxxxxx
Xxxxx") to purchase from Xxxxxxx Xxxxx twenty million (20,000,000) shares (the
"Initial Shares") of common stock of the Company, no par value (the "Common
Stock"), at a per share price equal to (i) the closing price (the "Initial
Price") of the Common Stock on June 29, 2004 (subject to adjustment as provided
herein) or on such other date and at such other time as the parties may mutually
agree (the "Execution Date") plus (ii) $0.075. Prior to the close of business on
the first Trading Day (as hereinafter defined) immediately following the
Execution Date (the "Settlement Date"), (A) the Company will pay for the Initial
Shares by delivering an amount equal to the Aggregate Purchase Price (as
hereinafter defined) plus Aggregate Commissions (as hereinafter defined) by wire
transfer of immediately available funds to an account designated by Xxxxxxx
Xxxxx and (B) Xxxxxxx Xxxxx will authorize The Depository Trust Company to send
physical stock certificates representing the Initial Shares directly to the
Company. The parties understand and agree that the delivery of the Initial
Shares by or on behalf of Xxxxxxx Xxxxx upon the payment of the Aggregate
Purchase Price and Aggregate Commissions by the Company is irrevocable and that
as of the Settlement Date the Company shall be the sole beneficial owner of the
Initial Shares for all purposes.
The purchases of shares of Common Stock anticipated by this Agreement
shall be pursuant to the requirements of and in conformity with the provisions
of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and a Plan established by the Issuer as permitted by Rule
10b5-1 (the "Plan") described in Annex C hereto.
Section 1. Purchase Price Adjustment.
(a) On the Execution Date and contemporaneously with the execution
of this Agreement, each of the Execution Date, the Maturity Date, the Initial
Price, the Daily Share Purchase Amount, Aggregate Commissions and the Aggregate
Purchase Price (each as previously or hereinafter defined) shall be determined
and set forth on the Purchase Agreement Pricing Supplement attached as Annex A
hereto.
(b) For each Trading Day, commencing on the Settlement Date, the
Calculation Agent (as hereinafter defined) shall determine the following
amounts, as applicable:
(i) The Purchase Price Adjustment (as hereinafter defined) owed to
Xxxxxxx Xxxxx by the Company on the Excess Daily Value (as
hereinafter defined), if any, for each prior Trading Day;
(ii) The Purchase Price Adjustment owed to the Company by Xxxxxxx
Xxxxx on the Deficit Daily Value (as hereinafter defined), if
any, for each prior Trading Day; and
(iii) The value (which may be positive or negative) by which the sum
of the Purchase Price Adjustment pursuant to clause (ii) above
exceeds the Purchase Price Adjustment pursuant to clause (i)
above with respect to each day during the Transaction Term (a
"Daily Accrual Value").
(c) On the third Trading Day immediately following the last day of
the Transaction Term (the "Final Settlement Date"), Xxxxxxx Xxxxx shall pay the
Final Settlement Value if the Final Settlement Value is negative or the Company
shall pay the Final Settlement Value if the Final Settlement Value is positive.
(d) In the event that the Final Settlement Value is positive, prior to
the close of business on the Final Settlement Date, the Company shall cause to
be delivered, at the Company's option, either (i) an amount in cash (by wire
transfer of immediately available funds) equal to the sum of the Final
Settlement Value or (ii) the lesser of (Y) Final Stock Settlement Shares, the
value of which is equal to the Final Settlement Value divided by the difference
between (a) the closing price on the Maturity Date and (b) $0.03 or (Z) the Cap
Amount. In the event that the Company elects to pay such amount in Final Stock
Settlement Shares it shall cause to be delivered through The Depository Trust
Company to Xxxxxxx Xxxxx a certificate or certificates representing the Final
Stock Settlement Shares, in such denominations and in such names as Xxxxxxx
Xxxxx may specify. If a Stock Settlement Deficiency exists, Xxxxxxx Xxxxx will
notify the Company within five (5) Trading Days of the determination of such
Stock Settlement Deficiency. Within one (1) Trading Day of being notified by
Xxxxxxx Xxxxx of the occurrence of a Stock Settlement Deficiency, the Company
shall deliver to Xxxxxxx Xxxxx, at the Company's sole discretion, either (x) an
amount in cash (by wire transfer of immediately available funds) equal to the
Stock Settlement Deficiency Amount or (y) shares of Common Stock, the value of
which is equal to the Stock Settlement Deficiency Amount (such number of shares
being based on bids in the market for Common Stock on the date of the
notification by Xxxxxxx Xxxxx to the Company of the Stock Settlement
Deficiency). If the Company elects to deliver shares of Common Stock pursuant
to the preceding sentence, the Company shall be obligated to deliver shares of
Common Stock to Xxxxxxx Xxxxx, upon notification by Xxxxxxx Xxxxx, until such
time as Xxxxxxx Xxxxx has received an amount from the sale of such shares equal
to the Final Settlement Value or until such time as the Company has delivered
the amount of shares which is equal to the Cap Amount.
In the event that the Final Settlement Value is negative, Xxxxxxx Xxxxx
shall cause such amount to be delivered to the Company. Xxxxxxx Xxxxx shall
satisfy such obligation by delivery to the Company, at the Company's option,
either (a) an amount in cash (by wire transfer of immediately available funds)
equal to the Final Settlement Value or (b) a number of shares of Common Stock
equal to the quotient obtained by dividing the Final Settlement Value by the
aggregate purchase price paid by Xxxxxxx Xxxxx to acquire such shares of Common
Stock on the day immediately prior to the Final Settlement Date. The parties
understand and agree that the deliveries made pursuant to the preceding sentence
shall be irrevocable and shall satisfy in full Xxxxxxx Xxxxx'x obligations under
this Section 1.
If Xxxxxxx Xxxxx is unable to purchase a total number of shares of
Common Stock equal to or greater than the Initial Shares by the Maturity Date,
then:
(i) The Company will deliver to Xxxxxxx Xxxxx a number of shares of
Common Stock equal to the difference between the Initial Shares and the number
of shares of Common Stock purchased by Xxxxxxx Xxxxx pursuant to this Agreement
as of the Maturity Date (the "Remaining Shares") against a payment per share
equal to (a) in the case of delivery by the Company of shares of Common Stock
registered for resale under the Securities Act, the Closing Price on the Trading
Day immediately preceding such date of delivery minus a fee equal to $0.11,
provided, that if Xxxxxxx Xxxxx exercises its option to cease purchasing shares
of Common Stock pursuant to Section 3.1(b)(iv) in light of internal policies and
procedures voluntarily adopted by Xxxxxxx Xxxxx, the $0.11 fee will not be
deducted from the Closing Price, or (b) in the case of delivery by the Company
of shares of Common Stock not registered for resale under the Securities Act,
the price at which Xxxxxxx Xxxxx can sell such shares, taking into account
reasonable hedging costs; provided that Xxxxxxx Xxxxx and the Company shall
mutually agree in good faith on the manner of sale with respect to such shares.
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(ii) Xxxxxxx Xxxxx will determine the Final Settlement Value
using the Closing Price described above in (i) for the Remaining Shares.
(iii) The Company will compensate Xxxxxxx Xxxxx for costs,
including reasonable hedging costs, incurred, or reasonably expected to be
incurred, by Xxxxxxx Xxxxx in taking delivery of the Remaining Shares as
compared to purchases of shares of Common Stock in the open market. The Company
may satisfy such obligation by delivery to Xxxxxxx Xxxxx, at the Company's
option, either (a) an amount in cash (by wire transfer of immediately available
fund) equal to such amount or (b) a number of shares equal to the quotient
obtained by dividing such amount by the Closing Price realized by Xxxxxxx Xxxxx
upon any resale of the shares.
The Final Stock Settlement Shares and any other shares of Common Stock
made as payment by the Company to Xxxxxxx Xxxxx pursuant to Section 1(d) shall
be delivered by the Company in shares of Common Stock the resale of which may be
unregistered or registered under the Securities Act. In the event the Company
elects to deliver shares pursuant to Section 1(d) that are intended to be
registered under the Securities Act, no later than five Trading Days prior to
any delivery, the Company shall have executed and delivered to Xxxxxxx Xxxxx the
Registration Rights Agreement. In the event that shares which are not intended
to be registered under the Securities Act are delivered to Xxxxxxx Xxxxx
pursuant to Section 1(d), Xxxxxxx Xxxxx shall determine the value of such shares
by applying a commercially reasonable discount.
Section 2. Anti-dilution Adjustments.
(a) Subdivisions and Combination of Common Stock. In the event that the
outstanding shares of the Common Stock shall be subdivided or split (including
by means of a stock dividend) into a greater number of shares of Common Stock
where the effective date of such combination or the record date for such split
occurs during the Transaction Term, the Initial Shares and the Daily Share
Purchase Amount shall be proportionately increased and the Initial Price shall
be deemed to be proportionately decreased. Conversely, in the event that the
outstanding shares of Common Stock shall each be combined into a smaller number
of shares of Common Stock through a combination of shares of Common Stock or a
reverse stock split where the effective date of such combination or the record
date for such reverse stock split occurs during the Transaction Term, the
Initial Shares and the Daily Share Purchase Amount shall be proportionately
decreased and the Initial Price shall be proportionately increased. Any
adjustment pursuant to this Section 2(a) shall become effective (i) in the case
of a subdivision or combination of the Common Stock, on the effective date of
such subdivision or combination or (ii) in the case of a stock split or reverse
stock split, at the close of business on the record date for such stock split or
reverse stock split. Notwithstanding anything to the contrary contained herein,
no adjustment shall be made pursuant to this Section 2(a) unless a similar
adjustment is required to be made to the number of shares of Common Stock
delivered or deliverable to the lender or lenders of Common Stock to Xxxxxxx
Xxxxx.
(b) Reclassification, Consolidation, Merger or Sale of Assets. In the
event that during the Transaction Term the Company shall enter into any
agreement, arrangement or understanding that provides for any recapitalization
or reclassification of the Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of an event specified in Section 2(a)), any consolidation of the Company
with, or merger of the Company into, any other person, any merger of another
person into the Company (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock), any sale or transfer of all or substantially all of the assets of
the Company or any compulsory share exchange and pursuant to any of which the
Common Stock is converted into the right to receive other securities, cash or
other property (each of the foregoing, an "Extraordinary Transaction") then
Xxxxxxx Xxxxx and the Company shall negotiate in good faith to amend this
Agreement to give appropriate effect to the Extraordinary Transaction. In the
event that the parties are unable to reach an agreement on the earlier of
(i) twenty (20) Trading Days prior to the date, if any, that is specified for
the consummation of such transaction under the governing legal agreements for
such transaction and (ii) ten (10) Trading Days after the first public
disclosure of the contemplated Extraordinary Transaction (the "Early
Termination Date"), (w) the Transaction Term shall be deemed to terminate on
the twentieth Trading Day after the Early Termination Date, (x) the provisions
of Section 3(b)(i) shall be void and of no further force or effect from and
after the Early Termination Date and (y) the Final Settlement Date shall be the
twenty-sixth Trading Day after the Early Termination Date.
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(c) Extraordinary Dividends. In the event that the Company declares an
extraordinary dividend or has an ex-dividend date occur during the Transaction
Term, Xxxxxxx Xxxxx may (i) accelerate the repurchases and settlement of the
shares of Common Stock as of the date of declaration of such dividend or
(ii) require the Company to settle the transaction immediately by delivering
shares of Common Stock to Xxxxxxx Xxxxx equal to the number of Initial Shares
less the number of shares of Common Stock purchased as of the date of
declaration of such dividend, and in each case (1) the provisions of Section
3(b) shall be void and of no further force and effect from and after the date
of acceleration, (2) either the Company or Xxxxxxx Xxxxx will pay the Final
Settlement Amount as provided in Section 1(c) and (3) the Company, in order to
reimburse Xxxxxxx Xxxxx for its reasonable market execution costs, will pay to
Xxxxxxx Xxxxx the Acceleration Fee. If Xxxxxxx Xxxxx exercises its option
pursuant to subclauses (i) or (ii) of this Section 2(c), the date of such
exercise shall be referred to as the "Acceleration Date."
Section 3. Covenants.
(a) The Company covenants and agrees with Xxxxxxx Xxxxx:
(i) during the Transaction Term, neither the Company nor any of its
affiliates shall take any action that would cause the purchases by
Xxxxxxx Xxxxx pursuant to Section 3(b)(i) of this Agreement not to
comply with the provisions of Rule 10b-18 under the Exchange Act
as if such provisions applied; and
(ii) during the Transaction Term, to promptly notify Xxxxxxx Xxxxx
telephonically (which oral communication shall be promptly
confirmed by telecopy to Xxxxxxx Xxxxx) that as a result of
an acquisition or other business combination transaction or for
any other reason, the Company determines that the Company will be
engaged in a distribution of shares of Common Stock or other
securities for which Common Stock is a reference security for
purposes of Rule 102 of Regulation M under the Exchange Act and to
promptly notify Xxxxxxx Xxxxx by telecopy of the period commencing
on the date that is one (1) business day before the commencement
of such distribution and ending on the day on which the Company
completes the distribution.
(b) Xxxxxxx Xxxxx covenants and agrees with the Company:
(i) subject to clauses (ii), (iii), (iv) and (v) below, to use its
best efforts to purchase, or cause to be purchased, on each
Trading Day during the Transaction Term the Daily Share
Purchase Amount on the open market at the then market price;
(ii) in connection with bids and purchases pursuant to clause (i)
above, Xxxxxxx Xxxxx shall comply, or cause compliance, with
the timing and volume provisions of Rule 10b-18(b)(2) and (4)
under the Exchange Act as if such provisions applied;
(iii) in connection with bids and purchases pursuant to clause (i)
above, Xxxxxxx Xxxxx will effect purchases at a purchase price
that does not exceed the highest independent bid or the last
independent transaction price, whichever is higher, reported
in the consolidated system at the time such purchases are
effected (as those terms are defined in Rule 10b-18 under the
Exchange Act;
(iv) not to purchase shares of Common Stock on any Trading Day
with respect to which Xxxxxxx Xxxxx reasonably determines in
good faith that it is appropriate, in light of any legal or
regulatory requirements or related policies and procedures
(including policies or procedures that have been voluntarily
adopted by Xxxxxxx Xxxxx), for Xxxxxxx Xxxxx to refrain from
purchasing shares of Common Stock on any such Trading Day.
Xxxxxxx Xxxxx shall promptly notify the Company upon
exercising its rights pursuant to this clause (iv) and shall
subsequently promptly notify the Company on the day Xxxxxxx
Xxxxx shall resume purchasing shares of Common Stock pursuant
to clause (i) above, it being understood that Xxxxxxx Xxxxx
shall not be required to indicate to the Company the reason
for Xxxxxxx Xxxxx'x exercise of its rights pursuant to this
clause (iv) if Xxxxxxx Xxxxx reasonably determines in good
faith that disclosing such reason to the Company may result
in a violation of federal or state securities laws or is
prohibited by Xxxxxxx Xxxxx'x internal conflicts policies and
procedures; and
(v) in connection with purchases pursuant to clause (i) above,
Xxxxxxx Xxxxx will effect all purchases through its U.S.
broker dealer, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated;
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provided, however, that it is understood and agreed that, if after making
reasonable commercial efforts to borrow shares of Common Stock from other
lenders which efforts are not successful, Xxxxxxx Xxxxx shall not be obligated
to comply with the above clause of this paragraph (b) if it is required to
purchase any Shortfall Shares (as hereinafter defined).
Section 4. Representations and Warranties.
The Company hereby represents and warrants to Xxxxxxx Xxxxx that as of
the date hereof and each Trading Day during the Transaction Term:
(a) the Company has all power and authority to execute this Agreement
and enter into the Plan and the transactions contemplated hereby;
(b) this Agreement has been duly authorized, validly executed and
delivered by the Company and constitutes a legal, valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or other similar
laws affecting the rights of creditors now or hereafter in effect, and to
equitable principles that may limit the right to specific enforcement of
remedies);
(c) the Company will have a sufficient number of treasury shares or
duly authorized but unissued shares of Common Stock available to deliver the
Cap Amount;
(d) the Company is not entering into this Agreement (i) to create
actual or apparent trading activity in the Common Stock (or any security
convertible into or exchangeable for Common Stock) or (ii) to facilitate a
future distribution of the Common Stock (or any security convertible into or
exchangeable for Common Stock) or in connection with a future issuance of
securities as part of a plan, in either case with the intention to manipulate
the price of the Common Stock (or any security convertible into or exchangeable
for Common Stock);
(e) the purchase of the Initial Shares by the Company, the compliance
by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or any other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries is
subject, other than such defaults which would not impair the ability of the
Company to perform its obligations hereunder in all material respects, nor will
such action result in any violation of the provisions of the Restated Articles
of Incorporation or Bylaws of the Company or any statute or any rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its properties;
(f) no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body having
jurisdiction over the Company is required for the purchase of the Initial
Shares by the Company, the compliance by the Company with all the terms of this
Agreement, or the consummation by the Company of the transactions contemplated
by this Agreement, other than the registration of shares of Common Stock
pursuant to the Registration Rights Agreement;
(g) the Company has made its own independent inquiry as to the legal,
tax, credit and accounting aspects of the transactions contemplated by this
Agreement and any related transactions, and the Company has not relied on
Xxxxxxx Xxxxx, Xxxxxxx Xxxxx'x legal counsel or Xxxxxxx Xxxxx'x accounting
advisors for legal, tax, credit or accounting advice in connection with the
transactions contemplated by this Agreement or any related transactions. The
Company agrees and acknowledges that Xxxxxxx Xxxxx and its affiliates may from
time to time, not in the capacity of the Company's agent but in the ordinary
course of their business, execute transactions for their own account or the
account of customers and hold and deal in securities or options on securities
of the Company (including, without limitation, Common Stock) and that Xxxxxxx
Xxxxx and its affiliates may continue to conduct such transactions during the
Transaction Term.
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Xxxxxxx Xxxxx hereby represents and warrants to the Company that:
(a) Xxxxxxx Xxxxx has all power and authority to execute this Agreement
and to consummate the transactions contemplated hereby;
(b) this Agreement has been duly authorized, validly executed and
delivered by Xxxxxxx Xxxxx and constitutes a legal, valid and binding agreement
of Xxxxxxx Xxxxx, enforceable against Xxxxxxx Xxxxx in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or other similar
laws affecting the rights of creditors now or hereafter in effect, and to
equitable principles that may limit the right to specific enforcement of
remedies);
(c) Xxxxxxx Xxxxx has made its own independent inquiry as to the
legal, tax, credit and accounting aspects of the transactions contemplated by
this Agreement and any related transactions, and Xxxxxxx Xxxxx has not relied
on the Company or its legal counsel or accounting advisors for legal, tax,
credit or accounting advice in connection with the transactions contemplated by
this Agreement or any related transactions.
(d) Xxxxxxx Xxxxx acknowledges that its rights under this Agreement
(other than Section 5) do not directly or indirectly give rise to any rights or
claims against the Company as a creditor of the Company.
Section 5. Indemnification.
(i) The Company agrees to indemnify Xxxxxxx Xxxxx and its affiliates
and their respective directors, officers, employees, agents and controlling
persons (Xxxxxxx Xxxxx and each such person being an "Indemnified Party") from
and against any and all losses, claims, damages and liabilities, joint or
several, to which such Indemnified Party may become subject under any applicable
federal or state law, or otherwise, and related to or arising out of (a) the
breach by the Company of any of its representations or warranties contained in
this Agreement or the Plan and (b) the breach by the Company of any of its
covenants or agreements contained in this Agreement or the Plan, and will
reimburse any Indemnified Party for all expenses (including reasonable counsel
fees and expenses) in connection with the investigation of, preparation for or
defense or settlement of any pending or threatened claim or any action or
proceeding arising therefrom, whether or not such Indemnified Party is a party
except if such claim, action or proceeding is initiated or brought by or on
behalf of the Company. The Company will not be liable under the foregoing
indemnification provision to the extent that any loss, claim, damage, liability
or expense is found in a final judgment by a court to have resulted directly
from willful misconduct or negligence on the part of Xxxxxxx Xxxxx or on the
part of any other Indemnified Party.
(ii) If the indemnification provided for in this Agreement is for any
reason held unenforceable, the Company agrees to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with the same) for which such indemnification
is held unenforceable as shall be appropriate to reflect (1) the relative fault
of the Company on the one hand and the Indemnified Parties on the other hand in
connection with the actions or inactions that have resulted in such losses,
claims, damages, liabilities and expenses, (2) the relative benefits received by
the Company on the one hand and Xxxxxxx Xxxxx on the other hand from the
transactions contemplated by the Agreement and (3) any other relevant equitable
considerations. Relative fault shall be determined by reference to, among other
things, each such party's relative intent, knowledge, access to information and
opportunity to correct or prevent such actions or inaction. The Company and
Xxxxxxx Xxxxx each agree that it would not be just and equitable if
contributions pursuant to this subparagraph (ii) were to be determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 5, Xxxxxxx Xxxxx shall not be required to contribute
in excess of the amount equal to the excess of (x) the compensation received by
Xxxxxxx Xxxxx pursuant to this Agreement over (y) the amount of any damages
which Xxxxxxx Xxxxx has otherwise been required to pay by reason of any such
action or inaction.
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(iii) The Company agrees that without the prior written consent of
Xxxxxxx Xxxxx, which consent shall not be unreasonably withheld, it will not
settle, compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding in respect to which indemnification could
be sought under the indemnification provision of this Agreement unless such
settlement, compromise or consent includes an unconditional release of each
Indemnified Party from all liability arising out of such claim, action or
proceeding.
(v) The provisions of this Section 5 shall survive any termination of
this Agreement or completion of the transactions contemplated hereby for three
(3) years.
(vi) Promptly after receipt by an Indemnified Party of notice of the
commencement of any action, such Indemnified Party will, if a claim in respect
thereof may be made against the Company under this Section 5, notify the Company
in writing of the commencement thereof, but the omission so to notify the
Company will not relieve it from any liability which it may have to any
Indemnified Party otherwise than under this Section 5 except to the extent that
the Company's rights are materially prejudiced as a result of such delay. In
case such notice of any such action shall be so given, the Company shall be
entitled to participate at its own expense in the defense, or if it so elects,
to assume the defense of such action, in which event such defense shall be
conducted by counsel chosen by the Company and satisfactory to the Indemnified
Party or Indemnified Parties who shall be defendant or defendants in such
action, and such defendant or defendants shall bear the fees and expenses of any
additional counsel retained by them; but if the Company shall elect not to
assume the defense of such action, the Company will reimburse such Indemnified
Party or Indemnified Parties for the reasonable fees and expenses of any counsel
retained by them; provided, however, if the defendants in any such action
(including impleaded parties) include both the Indemnified Parties and the
Company and counsel for the Company shall have reasonably concluded that there
may be a conflict of interest involved in the representation by a single counsel
of both the Indemnifying Parties and the Company, the Indemnified Party or
Indemnified parties shall have the right to select separate counsel,
satisfactory to the Company (it being understood, however, that the Company
shall not be liable for the expenses of more than one separate counsel
representing the Indemnified Parties who are parties to such action.
Section 6. Certain Definitions.
As used herein the following terms shall have the meanings set forth
below:
"Acceleration Fee" shall mean an amount equal to (i) $0.11 multiplied by
(ii) the number of Remaining Shares
"Actual Share Purchase Amount" shall mean the actual number of shares
of Common Stock purchased by Xxxxxxx Xxxxx pursuant to Section 3(b)(i) of this
Agreement on any given Trading Day.
"Actual Share Purchase Value" shall mean, on any given Trading Day, the
product of the Actual Share Purchase Amount and the corresponding Settlement
Price.
"Aggregate Actual Share Purchase Value" shall mean the amount equal to
the aggregate value of all Actual Share Purchase Values, as calculated during
the Transaction Term.
"Aggregate Commissions" shall have the meaning set forth in Annex A
hereto.
"Aggregate Purchase Price" shall have the meaning set forth in Annex A
hereto.
"Aggregate Purchase Price Adjustment Value" shall mean the sum (which
may be positive, if Xxxxxxx Xxxxx owes the Company value, or negative, if the
Company owes Xxxxxxx Xxxxx value) of all Daily Accrual Values for each Trading
Day during the Transaction Term.
"Applicable Adjustment Rate" shall mean, for any given Trading Day, an
interest rate equal to the Daily Federal Funds Rate.
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"Calculation Agent" shall mean Xxxxxxx Xxxxx International.
"Cap Amount" shall mean 60,000,000 shares.
"Closing Price" on any day shall mean the last reported sales price
regular way of the Common Stock on such day or, in case no such sales price is
reported on such day, the average of the reported closing bid and asked prices
regular way of the Common Stock, in each case on the NYSE, or if not then traded
on the NYSE, the principal securities exchange or quotation system on which the
Common Stock is then listed or admitted to trading, or if not then listed or
admitted to trading on a securities exchange or quotation system, the average of
the closing bid and asked prices of the Common Stock in the over-the-counter
market on the day in question as reported by the National Quotations Bureau
Incorporated, or a similarly generally accepted reporting service, or, if not so
available in such manner, as furnished by any NYSE member firm selected by the
Calculation Agent.
"Daily Federal Funds Rate" shall mean, with respect to any Trading Day,
the rate on such date for United States dollar federal funds as published in
H.15(519) under the heading "Federal Funds (Effective)".
"Daily Share Purchase Amount" shall mean between 376,190 to 576,190
shares of Common Stock; provided, that if the daily volume limits of Rule 10b-18
under the Exchange Act fall below 476,190 shares of Common Stock, Xxxxxxx Xxxxx
may purchase a large block of Common Stock in order to reduce the future Daily
Share Repurchase Amounts to comply with the volume limits of Rule 10b-18(4).
"Daily Share Purchase Value" shall mean the product of the Actual Share
Purchase Amount and the Initial Price.
"Deficit Daily Value" shall mean, on any given Trading Day, if the
Settlement Price is less than the Initial Price, the positive value by which the
Daily Share Purchase Value exceeds the Actual Share Purchase Value, but in not
event less than zero.
"Excess Daily Value" shall mean, on any given Trading Day, if the
Settlement Price is greater than the Initial Price, the positive value by which
the Actual Share Purchase Value exceeds the Daily Share Purchase Value, but in
no event less than zero.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Final Settlement Value" shall mean (i) the Aggregate Actual Share
Purchase Value minus (ii) the Aggregate Purchase Price minus (iii) the Aggregate
Purchase Price Adjustment Value.
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"Final Stock Settlement Shares" shall mean a number of shares of Common
Stock determined by the Calculation Agent (rounded up or down to the nearest
whole number) equal to the number of shares of Common Stock that the Company
would be required to deliver to Xxxxxxx Xxxxx to satisfy its obligations to
Xxxxxxx Xxxxx pursuant to Section 1, based on bids in the market for such number
of shares of Common Stock as of the Maturity Date.
"Initial Price" shall mean the Closing Price of the Common Stock on the
Execution Date
"Maturity Date" shall mean the earlier of (A) the date on which the
total number of shares of Common Stock purchased by Xxxxxxx Xxxxx pursuant to
and for purposes of satisfying Xxxxxxx Xxxxx'x obligation under Section 3(b)(i)
of this Agreement (including for purposes of determining the Final Settlement
Value) is equal to or greater than the Initial Shares, provided, that such date
may not be after the later of (i) the date that is one day prior to the next
ex-dividend date when determined and (ii) August 27, 2004, and (B) an
Acceleration Date.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Purchase Price Adjustment" shall mean adjustment amounts accrued on
the Excess Daily Value or Deficit Daily Value, as applicable, and excluding the
Trading Day on which such Excess Daily Value or Deficit Daily Value, as
applicable, arises up from the first business day immediately succeeding the
Execution Date to and including the Final Settlement Date at the Applicable
Adjustment Rate for such Trading Day.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, substantially in the form of Annex B attached hereto.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Settlement Price" shall mean, on any given Trading Day, the weighted
average market price per share paid by Xxxxxxx Xxxxx to purchase the Actual
Share Purchase Amount.
"Shortfall Shares" shall mean the shares of Common Stock required to be
purchased by Xxxxxxx Xxxxx and delivered to any lender or lenders of Common
Stock in the event of any Stock Shortfall in order to satisfy Xxxxxxx Xxxxx'x
obligations to such lender or lenders.
"Stock Settlement Deficiency" shall mean the occurrence each date, if
any, on which the amount received by Xxxxxxx Xxxxx from the sale of the Final
Stock Settlement Shares, plus any other shares of Common Stock delivered by the
Company to Xxxxxxx Xxxxx pursuant to Section 1(c), is less than the Final
Settlement Value.
"Stock Settlement Deficiency Amount" shall mean the amount by which the
amount received by Xxxxxxx Xxxxx from the sale of the Final Stock Settlement
Shares, plus any other shares of Common Stock delivered by the Company to
Xxxxxxx Xxxxx pursuant to Section 1(c), is less than the Final Settlement Value.
"Stock Shortfall" shall mean any period of time during which Xxxxxxx
Xxxxx (i) is required to re-deliver shares of Common Stock to any lender of such
shares at the demand of such lender and (ii) is unable to satisfy such
obligation in full by the use of reasonable commercial efforts to borrow shares
of Common Stock from another lender or lenders.
9
"Trading Day" shall mean any day on which the Common Stock is traded on
the NYSE, or, if not then traded on the NYSE, the principal securities exchange
or quotation system on which such securities are then traded or, if not then
traded on a securities exchange or quotation system, in the over-the-counter
market.
"Transaction Term" shall mean the period commencing on the Settlement
Date after the Execution Date and terminating on, and including, the Maturity
Date.
Section 7. Miscellaneous.
(a) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
obligations set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
(b) Assignment. Neither the rights under this Agreement nor the
obligations created by this Agreement shall be assignable or delegable, in whole
or in part, by either party herein without the prior written consent of the
other, and any attempt to assign or delegate any rights or obligations arising
under this Agreement without such consent shall be void.
(c) Waivers, etc. No failure or delay on the part of either party in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No amendment, modification or waiver of any provision of this
Agreement nor consent to any departure by either party therefrom shall in any
event be effective unless the same shall be in writing, and, in the case of a
waiver or consent, shall be effective only in the specific instance and for the
purpose for which given.
(d) Beneficiaries. This Agreement shall be binding upon, and inure
solely to the benefit of, the Company, Xxxxxxx Xxxxx and no other person shall
acquire any rights hereunder. Without limiting the generality of the foregoing,
Xxxxxxx Xxxxx'x obligations under Section 3(b)(i) are solely for the benefit of
the Company and not the holders of any of the Company's securities.
(e) Changes of Law. If, due to any change in applicable law or
regulations or the interpretation thereof by any court of law or other body
having jurisdiction subsequent to the date of this Agreement, performance of any
provision of this Agreement or any transaction contemplated hereby shall become
impracticable or impossible, the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such provision.
(f) Confidentiality. Subject (i) to any contrary requirement of law or
applicable regulator, (ii) to the right of each party to enforce its rights
hereunder in any legal action and (iii) in the case of the Company, to the
determination by its counsel that disclosure is appropriate or necessary, each
party shall keep strictly confidential and shall cause its employees and agents
to keep strictly confidential the terms of this Agreement and any information
of or concerning the other party which it or any of its agents or employees may
acquire pursuant to, or in the course of performing its obligations under, any
provision of this Agreement.
(g) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
the fees and disbursements of the Company's counsel and accountants and other
experts. Xxxxxxx Xxxxx will pay its own expenses incident to the performance of
its obligations under this Agreement.
(h) Headings. Descriptive headings herein are for convenience only and
shall not control or affect the meaning or construction of any provision of this
Agreement.
10
(i) Counterparts. This Agreement may be executed by the parties hereto
in counterparts, and each such executed counterpart shall be, and shall be
deemed to be, an original instrument and all such counterparts, taken together,
shall constitute one and the same instrument.
(j) Notices. All notices, consents, requests, instructions, approvals
and other communications provided for herein shall be validly given, made or
served if in writing and delivered personally, by telegram, by telecopy or sent
by overnight courier, postage prepaid:
if to Xxxxxxx Xxxxx:
Xxxxxxx Xxxxx International
Ropemaker Place
00 Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Attention: Xxxxx Xxxxxxxxx
Telecopy No.: 00-000-000-0000
and, in connection with any notices
pursuant to Section 3(a)(ii) by
telephone and telecopy to:
Xxxxxxx Xxxxx & Co.
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
if to the Company:
TXU Corp.
0000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Legal Department
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
or to such other address as any party may, from time to time, designate in a
written notice given in a like manner. Notice given by telegram or telecopy
shall be deemed delivered when evidence of the transmission is received by the
sender and shall be confirmed in writing by overnight courier, postage prepaid.
Notice given by overnight courier as set out above shall be deemed delivered the
business day after the date the same is mailed.
(k) Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York without
reference to conflict of law principles.
11
If the foregoing is in accordance with our understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding Agreement between the
Company and you.
Very truly yours,
TXU CORP.
By /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: Authorized Representative
Accepted as of the date
first written above.
XXXXXXX XXXXX INTERNATIONAL
By /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title: Authorized Signatory
12
Annex A
PURCHASE AGREEMENT PRICING SUPPLEMENT
Execution Date: June 29, 2004
Maturity Date: shall mean the earlier of (A) the date on which the
total number of shares of Common Stock purchased by Xxxxxxx
Xxxxx pursuant to and for purposes of satisfying Xxxxxxx
Xxxxx'x obligation under Section 3(b)(i) of this Agreement
(including for purposes of determining the Final Settlement
Value) is equal to or greater than the Initial Shares,
provided, that such date may not be after the later of (i)
the date that is one day prior to the next ex-dividend date
when determined and (ii) August 27, 2004, and (B) an
Acceleration Date.
Initial Price (per share): $39.86
Aggregate Purchase Price: $797,200,000
Aggregate Commissions: $1,500,000
Daily Share Purchase Amount: Between 376,190 to 576,190 shares of Common Stock;
provided, that if the daily volume limits of
Rule 10b-18 under the Exchange Act falls below
476,190 shares of Common Stock, Xxxxxxx Xxxxx may
purchase a large block of Common Stock in order
to reduce the future Daily Share Repurchase Amount
to comply with the volume limits of Rule 10b-18.
A-1
