REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of November 22, 2002 (this
"Agreement"), by and between TXU Corp., a Texas corporation (the "Company"), UXT
Holdings LLC, and UXT Intermediary LLC (each, a "Purchaser" and collectively,
"Purchasers").
WHEREAS, Purchasers purchased 9% Exchangeable Subordinated Notes Due
2012 (the "Notes") of TXU Energy Company LLC, a Delaware limited liability
company ("TXU Energy"), pursuant to that certain Purchase Agreement dated as of
the date hereof (the "Purchase Agreement"), among TXU Energy, the Company and
Purchasers; and
WHEREAS, TXU Energy, the Company and Purchasers entered into an
exchange agreement on the date hereof (the "Exchange Agreement") pursuant to
which Purchasers will have the right to exchange its Notes into Common Stock (as
defined below) of the Company.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, it is agreed as follows:
1. Definitions.
(a) Unless otherwise defined herein, the terms below shall have the
following meanings (such meanings being equally applicable to both the singular
and plural form of the terms defined):
"Affiliate" shall mean, with respect to any specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
Controls, is Controlled by, or is under common Control with, such specified
Person and shall also include, with respect to any Purchaser, the general
partner and any limited partner and any Affiliate of the general partner and any
limited partner of such Purchaser. For avoidance of doubt, the Company and its
Affiliates shall be considered Affiliates of TXU Energy and Purchasers and their
Affiliates shall not be considered Affiliates of TXU Energy or the Company.
"Agreement" shall mean this Registration Rights Agreement, including
all amendments, modifications and supplements and any exhibits or schedules to
any of the foregoing.
"Business Day" shall mean any day other than Saturday, Sunday or any
other day which is a legal holiday under the laws of the States of New York,
Texas or a day on which national banking associations in such States are
authorized or required by law or other governmental action to close.
"Common Stock" shall mean shares of the Company's common stock,
without par value.
"Control" (including the terms "Controlled by" and "under common
Control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, as trustee or executor, by
contract or otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.
"DLJ Entities" shall have the meaning as set forth in the Exchange
Agreement.
"Effective Period" shall mean the period commencing with the effective
date of the Shelf Registration Statement and ending on the date that is 180 days
from the date that the Purchasers and their Affiliates, as a group, own less
than ten percent (10%) of the initial amount of Registrable Securities.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and all rules and regulations promulgated thereunder.
"Holder" shall mean Purchasers, and any transferee of Purchasers to
whom Registrable Securities are permitted to be transferred in accordance with
the terms of this Agreement, and, in each case, who continues to be entitled to
the rights of a Holder hereunder.
"NASD" shall mean the National Association of Securities Dealers,
Inc., or any successor entity thereof.
"Person" shall mean any individual, corporation, partnership, joint
venture, firm, trust, unincorporated organization, government or any agency or
political subdivision thereof or other entity.
"Registrable Securities" shall mean (a) the shares of Common Stock
issued pursuant to the Exchange Agreement and held by a Holder upon exchange of
any Notes and (b) any securities issuable or issued or distributed in respect of
any of the Common Stock identified in clause (a) by way of stock dividend or
stock split or in connection with a combination of shares, recapitalization,
reorganization, merger, consolidation or otherwise. For purposes of this
Agreement, (i) Registrable Securities shall cease to be Registrable Securities
when a Registration Statement covering such Registrable Securities has been
declared effective under the Securities Act by the SEC and such Registrable
Securities have been disposed of pursuant to such effective Registration
Statement or (ii) Registrable Securities of the Holder shall not be deemed to be
Registrable Securities at any time when such Registrable Securities may be
distributed to the public pursuant to Rule 144(k) (or any successor provision
then in effect) under the Securities Act.
"Registration Statement" shall mean any Demand Registration Statement,
Piggy-Back Registration Statement and/or the Shelf Registration Statement, as
the case may be.
"SEC" shall mean the Securities and Exchange Commission, or any
successor thereto.
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"Securities Act" shall mean the Securities Act of 1933, as amended,
and all rules and regulations promulgated thereunder.
(b) The following terms have the meanings set forth in the Section set
forth opposite such term:
Term Section
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Acquisition 12
Acquisition Restrictions 12
Blackout Period 5
Company Recitals
Damages Accrual Period 10(b)
Demand for Registration 3(c)
Demand Registration 3(a)
Demand Registration Statement 3(a)
Exchange Agreement Recitals
Excused Performance 10(c)
Indemnified Party 9(d)
Indemnifying Party 9(d)
Liquidated Damages Amount 10(b)
Maximum Number of Securities 3(b)
Participating Demand Holders 3(a)
Participating Piggy-Back Holders 4(b)
Piggy-Back Registration 4(a)
Piggy-Back Registration Statement 4(a)
Notes Recitals
Purchase Agreement Recitals
Purchasers Recitals
Shelf Registration Statement 2
TXU Energy Recitals
2. Shelf Registration Statement. As promptly as practicable (and in
any event within 30 days after the date hereof), the Company shall file with the
SEC, and thereafter use its reasonable best efforts to have declared effective
as soon as practicable after the filing thereof, a "shelf" Registration
Statement (a "Shelf Registration Statement") on Form S-3 or Form S-1, in the
event the Company is not "S-3 eligible", pursuant to Rule 415 under the
Securities Act covering the resale of any or all of the Registrable Securities,
and Registrable Securities issuable (whether or not issued) under the Exchange
Agreement. The Company shall, subject to customary terms and conditions, use its
reasonable best efforts to keep the Shelf Registration Statement continuously
effective from the date that such Shelf Registration Statement is declared
effective during the Effective Period to the extent required to permit the
disposition (in accordance with the intended method or methods thereof, as
aforesaid) of the Registrable Securities so registered.
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3. Demand Registration.
(a) After receipt of a written request from a Holder requesting that
the Company effect a registration (a "Demand Registration") under the Securities
Act covering all or part of the Registrable Securities which specifies the
intended method or methods of disposition thereof, the Company shall promptly
notify all Holders in writing of the receipt of such request and each such
Holder, in lieu of exercising its rights under Section 4 hereof, may elect (by
written notice sent to the Company within ten (10) Business Days from the date
of such Holder's receipt of the aforementioned notice from the Company) to have
all or part of such Holder's Registrable Securities included in such
registration thereof pursuant to this Section 3, and such Holder shall specify
in such notice the number of Registrable Securities that such Holder elects to
include in such registration. Thereupon the Company shall, as expeditiously as
is possible, but in any event no later than thirty (30) days (excluding any days
which occur during a permitted Blackout Period under Section 5 below) after
receipt of a written request for a Demand Registration, file with the SEC and
use its reasonable best efforts to cause to be declared effective as soon as
practical after the filing thereof a registration statement (a "Demand
Registration Statement") relating to all shares of Registrable Securities which
the Company has been so requested to register by such Holders ("Participating
Demand Holders"), to the extent required to permit the disposition (in
accordance with the intended method or methods thereof, as aforesaid) of the
Registrable Securities so registered; provided, however, that the aggregate
number of the Registrable Securities requested to be registered constitute at
least 10% of the initial amount of the Registrable Securities or include all
Registrable Securities which remain outstanding at such time; provided further
that, the Company may, if permitted by applicable Laws and Regulations, utilize
the Shelf Registration Statement to satisfy its obligations hereunder.
(b) If the majority of the Participating Demand Holders in a Demand
Registration relating to a public offering so request that the offering be
underwritten with a managing underwriter selected in the manner set forth in
Section 14 below and such managing underwriter of such Demand Registration
advises the Company in writing that, in its opinion, the number of securities to
be included in such offering is greater than the total number of securities
which can be sold therein without having a material adverse effect on the
distribution of such securities or otherwise having a material adverse effect on
the marketability thereof (the "Maximum Number of Securities"), then the Company
shall include in such Demand Registration the Registrable Securities that the
Participating Demand Holders have requested to be registered thereunder only to
the extent the number of such Registrable Securities does not exceed the Maximum
Number of Securities. If such amount exceeds the Maximum Number of Securities,
the number of Registrable Securities included in such Demand Registration shall
be allocated among all the Participating Demand Holders on a pro rata basis
(based on the number of Registrable Securities held by each Participating Demand
Holder).
(c) Holders shall be entitled to an aggregate of two (2) registrations
of Registrable Securities pursuant to Section 3(a) in respect of an underwritten
secondary offering (each, a "Demand for Registration"); provided that a
registration requested pursuant to Section 3(a) shall not be deemed to have been
effected for purposes of Section 3(d) unless (i) it has been declared effective
by the SEC, (ii) it has remained effective for the period set forth in Section
6(a) and (iii) the offering of Registrable Securities pursuant to such
registration is not subject to
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any stop order, injunction or other order or requirement of the SEC (other than
any such stop order, injunction or other requirement of the SEC prompted by act
or omission of Holders of Registrable Securities).
(d) Notwithstanding anything to the contrary contained herein, the
Company shall not be required to prepare and file (i) more than two Demand
Registration Statements in any 12 month period or (ii) any Demand Registration
Statement within 90 days following the date of effectiveness of any other
Registration Statement.
4. Piggy-Back Registration.
(a) If at any time on or after January 1, 2003, the Company proposes
to file on its behalf and/or on behalf of any holder of its securities (other
than a holder of Registrable Securities) a registration statement under the
Securities Act on any form (other than a registration statement on Form S-4 or
S-8, any successor form for securities to be offered in a transaction of the
type referred to in Rule 145 under the Securities Act, to employees of the
Company pursuant to any employee benefit plan or the Company's divided
reinvestment and direct stock purchase plan, respectively) for the registration
of Common Stock or preferred stock that is convertible to Common Stock (a
"Piggy-Back Registration"), it will give written notice to all Holders at least
twenty (20) days before the initial filing with the SEC of such piggy-back
registration statement (a "Piggy-Back Registration Statement"), which notice
shall set forth the intended method of disposition of the securities proposed to
be registered by the Company. The notice shall offer to include in such filing
the aggregate number of shares of Registrable Securities as such Holders may
request.
(b) Each Holder desiring to have Registrable Securities registered
under this Section 4 ("Participating Piggy-Back Holders") shall advise the
Company in writing within ten (10) days after the date of receipt of such offer
from the Company, setting forth the amount of such Registrable Securities for
which registration is requested. The Company shall thereupon include in such
filing the number or amount of Registrable Securities for which registration is
so requested, subject to paragraph (c) below, and shall use its reasonable best
efforts to effect registration of such Registrable Securities under the
Securities Act.
(c) If the Piggy-Back Registration relates to an underwritten public
offering and the managing underwriter of such proposed public offering advises
in writing that, in its opinion, the amount of Registrable Securities requested
to be included in the Piggy-Back Registration in addition to the securities
being registered by the Company would be greater than the Maximum Number of
Securities (having the same meaning as defined in Section 3(b) but replacing the
term "Demand Registration" with "Piggy-Back Registration"), then:
(i) in the event the Company initiated the Piggy-Back
Registration, the Company shall include in such Piggy-Back
Registration first, the securities the Company proposes to register
and second, the securities of all other selling security holders,
including the Participating Piggy-Back Holders, to be included in such
Piggy-Back Registration in an amount which, together with the
securities the Company proposes to register, shall not exceed the
Maximum Number of Securities, such amount to be
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allocated among such selling security holders on a pro rata basis
(based on the number of securities of the Company held by each such
selling security holder);
(ii) in the event any holder of securities of the Company
initiated the Piggy-Back Registration, the Company shall include in
such Piggy-Back Registration first, the securities such initiating
security holder proposes to register, second, the securities of any
other selling security holders (including Participating Piggy-Back
Holders), in an amount which, together with the securities the
initiating security holder proposes to register, shall not exceed the
Maximum Number of Securities, such amount to be allocated among such
other selling security holders on a pro rata basis (based on the
number of securities of the Company held by each such selling security
holder) and third, any securities the Company proposes to register, in
an amount which, together with the securities the initiating security
holder and the other selling security holders propose to register,
shall not exceed the Maximum Number of Securities;
(d) The Company will not hereafter enter into any agreement which is
inconsistent with the rights of priority provided in paragraph (c) above.
5. Blackout Periods. The Company shall have the right to delay the
filing or effectiveness of a Registration Statement required pursuant to Section
3 hereof or suspend sales under a Shelf Registration Statement filed hereunder
during no more than two (2) periods aggregating to not more than 45 days in any
12 month period (a "Blackout Period") in the event that (i) the Company would,
in accordance with the written advice of its counsel, be required to disclose in
the prospectus information not otherwise then required by law to be publicly
disclosed and (ii) in the good faith and reasonable judgment of the Company's
Board of Directors, there is a reasonable likelihood that such disclosure, or
any other action to be taken in connection with the prospectus, would materially
and adversely affect or interfere with any financing, acquisition, merger,
disposition of assets (not in the ordinary course of business), corporate
reorganization or other similar transaction in which the Company is engaged or
in respect of which the Company proposes to engage in discussions or
negotiations with respect to, or has proposed or taken a substantial step to
commence, or there is an event or state of facts relating to the Company which
is material to the Company the disclosure of which would, in the reasonable
judgment of the Company, be adverse to its interests; provided, however, that
the Company shall delay during such Blackout Period the filing or effectiveness
of, or suspend sales under, any Registration Statement required pursuant to the
registration rights of the holders of any securities of the Company. The Company
shall promptly give the Holders written notice of such determination containing
a general statement of the reasons for such postponement and an approximation of
the anticipated delay.
6. Registration Procedures. If the Company is required by the
provisions of Section 2 or 3 to use its reasonable best efforts to effect the
registration of any of its securities under the Securities Act, the Company
will, as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement
with respect to such securities and use its reasonable best efforts to
cause such Registration Statement promptly to become and remain
effective for a period of time required for the disposition of such
securities by the holders thereof but not to exceed 90 days for a
Demand
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Registration under Section 3(a) (except with respect to a Shelf
Registration Statement under Section 2 which shall remain effective
during the Effective Period); provided, however, that before filing
such Registration Statement or any amendments thereto (for purposes of
this subsection, amendments shall not be deemed to include any filing
that the Company is required to make pursuant to the Exchange Act),
the Company shall furnish the representatives of the Holders referred
to in Section 6(m) copies of all documents proposed to be filed, which
documents will be subject to the review of such counsel. The Company
shall not be deemed to have used its reasonable best efforts to keep a
Registration Statement effective during the applicable period if it
voluntarily takes any action that would result in the Holders of such
Registrable Securities not being able to sell such Registrable
Securities during that period, unless such action is required under
applicable law;
(b) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all
securities covered by such Registration Statement until the earlier of
such time as all of such securities have been disposed of in a public
offering or the expiration of 90 days for a Demand Registration under
Section 3(a) (except with respect to the Shelf Registration Statement
under Section 2, for which such period shall be the Effective Period);
(c) furnish to such selling security holders such number of
conformed copies of the applicable Registration Statement and each
such amendment and supplement thereto (including in each case all
exhibits), and copies of a summary prospectus or other prospectus,
including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents, as such
selling security holders may reasonably request;
(d) use its reasonable best efforts to register or qualify
the securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions within the United
States and Puerto Rico as each Holder of such securities shall
reasonably request, to keep such registration or qualification in
effect for so long as such Registration Statement remains in effect,
and to take any other action which may be reasonably necessary to
enable such seller to consummate the disposition in such jurisdictions
of the securities owned by such Holder (provided, however, that the
Company shall not be required in connection therewith or as a
condition thereto to qualify to do business, subject itself to
taxation in or to file a general consent to service of process in any
jurisdiction wherein it would not but for the requirements of this
paragraph (d) be obligated to do so; and provided further that the
Company shall not be required to qualify such Registrable Securities
in any jurisdiction in which the securities regulatory authority
requires that any Holder submit any shares of its Registrable
Securities to the terms, provisions and restrictions of any escrow,
lockup or similar agreement(s) for consent to sell Registrable
Securities in such jurisdiction unless such Holder agrees to do so),
and do such other reasonable acts and things as may be required of it
to enable such Holder to consummate the disposition in such
jurisdiction of the securities covered by such Registration Statement;
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(e) furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to Section 2 or 3, if
the method of distribution is by means of an underwriting, on the date
that the shares of Registrable Securities are delivered to the
underwriters for sale pursuant to such registration, or if such
Registrable Securities are not being sold through underwriters, on the
date that the registration statement with respect to such shares of
Registrable Securities becomes effective, (1) a signed opinion, dated
such date, of the independent legal counsel representing the Company
for the purpose of such registration, addressed to the underwriters,
if any, and if such Registrable Securities are not being sold through
underwriters, then to the Holders making such request, as to such
matters as such underwriters or the Holders holding a majority of the
Registrable Securities included in such registration, as the case may
be, may reasonably request and as would be customary in such a
transaction and (2) letters dated such date and the date the offering
is priced from the independent certified public accountants of the
Company, addressed to the underwriters, if any, and if such
Registrable Securities are not being sold through underwriters, then
to the Holders making such request and, if such accountants refuse to
deliver such letters to such Holders, then to the Company (i) stating
that they are independent certified public accountants within the
meaning of the Securities Act and that, in the opinion of such
accountants, the financial statements and other financial data of the
Company included in the Registration Statement or the prospectus, or
any amendment or supplement thereto, comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act and (ii) covering such other financial matters (including
information as to the period ending not more than five (5) business
days prior to the date of such letters) with respect to the
registration in respect of which such letter is being given as such
underwriters or the Holders holding a majority of the Registrable
Securities included in such registration, as the case may be, may
reasonably request and as would be customary in such a transaction;
(f) enter into customary agreements (including if the method
of distribution is by means of an underwriting, an underwriting
agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition
of such Registrable Securities;
(g) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the SEC, and make earnings
statements satisfying the provisions of Section 11(a) of the
Securities Act generally available to the Holders no later than 45
days after the end of any 12 month period (or 90 days, if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in an
underwritten public offering or (ii) if not sold to underwriters in
such an offering, beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the
Registration Statement, which statements shall cover said 12 month
periods;
(h) use its reasonable best efforts to cause all such
Registrable Securities to be listed on each securities exchange or
quotation system on which similar securities issued by the Company are
listed or traded;
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(i) give written notice to the Holders:
(i) when such Registration Statement or any
amendment thereto has been filed with the SEC and when such
Registration Statement or any post-effective amendment
thereto has become effective;
(ii) of any request by the SEC for amendments or
supplements to such Registration Statement or the prospectus
included therein or for additional information;
(iii) of the issuance by the SEC of any stop order
suspending the effectiveness of such Registration Statement
or the initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal
counsel of any notification with respect to the suspension
of the qualification of the Common Stock for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose; and
(v) of the happening of any event that requires
the Company to make changes in such Registration Statement
or the prospectus in order to make the statements therein
not misleading (which notice shall be accompanied by an
instruction to suspend the use of the prospectus until the
requisite changes have been made);
(j) use its reasonable best efforts to prevent the issuance
or obtain the withdrawal of any order suspending the effectiveness of
such Registration Statement at the earliest possible time;
(k) furnish to each Holder, without charge, at least one
copy of such Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if the
Holder so requests in writing, all exhibits (including those, if any,
incorporated by reference);
(l) upon the occurrence of any event contemplated by Section
6(i)(v) above, promptly prepare a post-effective amendment to such
Registration Statement or a supplement to the related prospectus or
file any other required document so that, as thereafter delivered to
the Holders, the prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading. If the Company notifies the Holders in
accordance with Section 6(i)(v) above to suspend the use of the
prospectus until the requisite changes to the prospectus have been
made, then the Holders shall suspend use of such prospectus and use
their reasonable efforts to return to the Company all copies of such
prospectus (at the Company's expense) other than permanent file copies
then in such Holder's possession, and the period of effectiveness of
such Registration Statement provided for above shall be extended by
the number of days from and including the date of the giving of such
notice to the date Holders shall have received such amended or
supplemented prospectus pursuant to this Section 6(l);
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(m) make reasonably available for inspection by the
representatives of the Holders, any underwriter participating in any
disposition pursuant to such Registration Statement and any attorney,
accountant or other agent retained by such representative or any such
underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and cause the
Company's officers, directors and employees to supply all relevant
information reasonably requested by such representative or any such
underwriter, attorney, accountant or agent in connection with the
registration;
(n) in connection with any underwritten offering pursuant to
a Demand Registration under Section 3(a), make appropriate officers of
the Company and the senior executives of the Company available to the
selling security holders for meetings with prospective purchasers of
the Registrable Securities and prepare and present to potential
investors customary "road show" material in each case in accordance
with the recommendations of the underwriters and in all respects in a
manner consistent with other new issuances of securities in an
offering of a similar size to such offering of the Registrable
Securities, in connection with any proposed sale of the Registrable
Securities; provided, however, that the aggregate number of
Registrable Securities requested to be sold constitute at least 10% of
the Registrable securities issued on the date the demand to file the
Demand Registration Statement pursuant to such Demand Registration was
made; and
(o) use reasonable best efforts to procure the cooperation
of the Company's transfer agent in settling any offering or sale of
Registrable Securities, including with respect to the transfer of
physical stock certificates into book-entry form in accordance with
any procedures reasonably requested by the Holders or the
underwriters.
7. Expenses. All expenses incurred in connection with each
registration pursuant to Sections 2, 3 and 4 of this Agreement, excluding
underwriters' discounts and commissions, but including without limitation all
registration, filing and qualification fees, word processing, duplicating,
printers' and accounting fees (including the expenses of any special audits or
"comfort" letters required by or incident to such performance and compliance),
fees of the NASD or listing fees, messenger and delivery expenses, all fees and
expenses of complying with state securities or blue sky laws, fees and
disbursements of counsel for the Company, fees and expenses of the Company and
the underwriters relating to "road show" investor presentations, including the
reasonable fees and disbursements of one counsel for the selling Holders (which
counsel shall be selected by the Holders holding a majority in interest of the
Registrable Securities being registered), shall be paid by the Company:
8. Rule 144 and Rule 144A Information. (a) With a view to making
available the benefits of certain rules and regulations of the SEC which may at
any time permit the sale of the Registrable Securities to the public without
registration, the Company agrees to:
(i) make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act;
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(ii) use its reasonable best efforts to file with the SEC in
a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and
(iii) furnish to each Holder of Registrable Securities
forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of such Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual
or quarterly report of the Company, and such other reports and
documents so filed by the Company as such Holder may reasonably
request in availing itself of any rule or regulation of the SEC
allowing such Holder to sell any Registrable Securities without
registration.
(b) At all times during which the Company is neither subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, nor exempt
from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, it will
provide, upon the written request of any Holder of Registrable Securities in
written form (as promptly as practicable and in any event within 15 Business
Days), to any prospective buyer of such stock designated by such Holder, all
information required by Rule 144A(d)(4)(i) of the General Regulations
promulgated by the SEC under the Securities Act.
9. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Holder and its
Affiliates, such Holder's partners and their Affiliates, directors and officers,
each person who participates in the offering of such Registrable Securities,
including underwriters (as defined in the Securities Act), and each person, if
any, who controls such Holder or participating person within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which they may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or proceedings in
respect thereof) arise out of or are based on any untrue or alleged untrue
statement of any material fact contained in such Registration Statement on the
effective date thereof (including any prospectus filed under Rule 424 under the
Securities Act or any amendments or supplements thereto) or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse each such Holder and its Affiliates, such
Holder's partners and their Affiliates, directors and officers, such
participating person or controlling person for any legal or other expenses
reasonably incurred by them (but not in excess of expenses incurred in respect
of one counsel for all of them unless there is an actual conflict of interest
between any indemnified parties, which indemnified parties may be represented by
separate counsel) in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 9(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld); provided further, that the Company shall not be
liable to any Holder and its Affiliates, such Holder's partners and their
Affiliates, directors and officers, participating person or controlling person
in any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in
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connection with such Registration Statement, preliminary prospectus, final
prospectus or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder and its Affiliates, such Holder's
partners and their Affiliates, directors and officers, participating person or
controlling person. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any such Holder and its
Affiliates, such Holder's partners and their Affiliates, directors and officers,
participating person or controlling person, and shall survive the transfer of
such securities by such Holder.
(b) Each Holder requesting or joining in a registration severally and
not jointly shall indemnify and hold harmless the Company, each of its directors
and officers, each person, if any, who controls the Company within the meaning
of the Securities Act, and each agent and any underwriter for the Company
(within the meaning of the Securities Act) against any losses, claims, damages
or liabilities, joint or several, to which the Company or any such director,
officer, controlling person, agent or underwriter may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or proceedings in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in such Registration Statement on the effective date thereof (including any
prospectus filed under Rule 424 under the Securities Act or any amendments or
supplements thereto) or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in such Registration
Statement, preliminary or final prospectus, or amendments or supplements
thereto, in reliance upon and in conformity with written information furnished
by or on behalf of such Holder expressly for use in connection with such
registration; and each such Holder shall reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, agent or underwriter (but not in excess of expenses incurred in respect
of one counsel for all of them unless there is an actual conflict of interest
between any indemnified parties, which indemnified parties may be represented by
separate counsel) in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 9(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld); and provided further that the liability of each
Holder hereunder shall be limited to the proportion of any such loss, claim,
damage, liability or expense which is equal to the proportion that the net
proceeds from the sale of the securities sold by such Holder under such
Registration Statement bears to the total net proceeds from the sale of all
securities sold thereunder, but not in any event to exceed the net proceeds
received by such Holder from the sale of Registrable Securities covered by such
Registration Statement.
(c) If the indemnification provided for in this Section 9 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in
12
connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding. If
the allocation provided in this paragraph (c) is not permitted by applicable
law, the parties shall contribute based upon the relevant benefits received by
the Company from the initial offering of the Registrable Securities on the one
hand and the net proceeds received by the Holders from the sale of Registrable
Securities on the other.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 9(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(d) Any Person entitled to indemnification hereunder (the "Indemnified
Party") agrees to give prompt written notice to the indemnifying party (the
"Indemnifying Party") after the receipt by the Indemnified Party of any written
notice of the commencement of any action, suit, proceeding or investigation or
threat thereof made in writing for which the Indemnified Party intends to claim
indemnification or contribution pursuant to this Agreement; provided that the
failure so to notify the Indemnified Party shall not relieve the Indemnifying
Party of any liability that it may have to the Indemnified Party hereunder
unless such failure is materially prejudicial to the Indemnifying Party. If
notice of commencement of any such action is given to the Indemnifying Party as
above provided, the Indemnifying Party shall be entitled to participate in and,
to the extent it may wish, to assume the defense of such action at its own
expense, with counsel chosen by it and reasonably satisfactory to such
Indemnified Party. The Indemnified Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be paid by the Indemnified Party unless (i)
the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails
to assume the defense of such action or (iii) the named parties to any such
action (including any impleaded parties) have been advised by such counsel that
either (A) representation of such Indemnified Party and the Indemnifying Party
by the same counsel would be inappropriate under applicable standards of
professional conduct or (B) there are one or more legal defenses available to it
which are substantially different from or additional to those available to the
Indemnifying Party. No Indemnifying Party shall be liable for any settlement
entered into without its written consent, which consent shall not be
unreasonably withheld.
(e) The agreements contained in this Section 9 shall survive the
transfer of the Registered Securities by any Holder and sale of all the
Registrable Securities pursuant to any Registration Statement and shall remain
in full force and effect, regardless of any investigation
13
made by or on behalf of any Holder or such director, officer or participating or
controlling Person.
10. Payment of Liquidated Damages.
(a) The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) a Registration Statement is
not timely filed pursuant to Section 2, 3 and 6, (ii) a Registration Statement
has not been declared effective under the Securities Act or any foreign
securities laws pursuant to Section 6 or (iii) the Company fails to comply with
any of the terms of this Agreement. Each of the events described above shall be
deemed to continue until (a) the date a Registration Statement is filed in the
case of an event of the type described in clause (i), (b) the date a
Registration Statement is declared effective under the Securities Act or any
foreign securities laws in the case of an event of the type described in clause
(ii) and (c) termination of the breach in the case of an event of the type
described in clause (iii).
(b) Accordingly, commencing on (and including) any event date
described above and ending on the day such failure to file or become effective
or breach is cured (a "Damages Accrual Period"), the Company agrees to pay, as
liquidated damages and not as a penalty, an amount (the "Liquidated Damages
Amount") payable to Holders of Registrable Securities within 15 days from the
date such Damages Accrual Period ends, at a rate per annum equal to 2% of the
value of the Registrable Securities owned by the Holders; provided that no
liquidated damages shall accrue or be payable if the failure to file, go
effective or comply is the result of an Excused Performance.
(c) An "Excused Performance" shall be deemed to result from (a) the
failure of the SEC to declare a Registration Statement effective despite the
Company's reasonable good faith efforts to respond to SEC comments in a timely
and complete manner, (b) the failure of the SEC to declare a Registration
Statement effective because of the failure of any Holder to provide any
information requested by the SEC, the NASD or any state securities regulatory
body concerning itself or its Affiliates, its or such Affiliates' relationship
with the Company or any Affiliates of the Company, or its plans for the
disposition of Registrable Securities or (c) the failure of the NASD or any
state securities regulatory body to provide any necessary clearance,
registration or qualification for the offering.
11. Limitations on Registration of Other Securities; Representation.
From and after the date of this Agreement, the Company shall not, without the
prior written consent of a majority in interest of the Holders, enter into any
agreement with any holder or prospective holder of any securities of the Company
giving such holder or prospective holder any registration rights the terms of
which are as or more favorable taken as a whole than the registration rights
granted to the Holders hereunder unless the Company shall also give such rights
to the Holders hereunder.
12. Acquisition of Additional Common Stock.
(a) During the period commencing on the date hereof and ending on the
termination of the Effective Period, each of the DLJ Entities hereby agrees that
neither it or any
14
entity Controlled by it (other than portfolio companies of the DLJ Entities)
shall, without the prior approval of the Company's Board of Directors
(excluding, for purposes of such approval, the Purchaser Director (as defined in
the Exchange Agreement)), (i) acquire, offer or propose to acquire or agree to
acquire (whether by purchase, tender or exchange offer, through an acquisition
of Control of another Person (including by way of merger or consolidation), by
joining a partnership, syndicate or other group, or otherwise), the beneficial
ownership of any Common Stock of the Company other than Common Stock issued
pursuant to the Exchange Agreement (or any warrants, options or other rights to
purchase or acquire, or any securities convertible into, or exchangeable for,
any Common Stock of the Company); (ii) make any public announcement with respect
to, or submit any proposal for, any merger, consolidation, sale of substantial
assets (other than sales made in the ordinary course of business of such Holder)
or other business combination or extraordinary transaction involving the
Company; (iii) except in connection with the election of the Purchaser Director,
make, or in any way participate in, any "solicitation" of "proxies" (as such
terms are defined or used in Regulation 14A under the Exchange Act) to vote any
Common Stock of the Company or seek to advise or influence any Person (other
than any Affiliate) with respect to the voting of any Common Stock of the
Company; (iv) otherwise act, either alone or in concert with others, to seek
control of the Company's Board or (v) publicly disclose any intention, proposal,
plan or arrangement with respect to any of the foregoing (collectively, the
"Acquisition Restrictions"). The Acquisition Restrictions contained in clause
(i) above shall not apply to any acquisition (each, an "Acquisition") of
beneficial ownership of any additional Common Stock of the Company: (x) which is
by way of stock dividends, stock reclassifications or other distributions or
offering made available on a pro rata basis to holders of Common Stock of the
Company generally or (y) that involves Common Stock acquired from the Company in
accordance with the provisions of the Exchange Agreement.
13. No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its securities, which is inconsistent in any
material respects with the rights granted to the Holders in this Agreement.
14. Selection of Managing Underwriters. In the event the Holders have
requested an underwritten offering pursuant to Section 3(a), the underwriter or
underwriters shall be selected by the Holders of a majority of the shares being
so registered and shall be approved by the Company, which approval shall not be
unreasonably withheld or delayed, provided (i) that all of the representations
and warranties by, and the other agreements on the part of, the Company to and
for the benefit of such underwriters shall also be made to and for the benefit
of such Holders of Registrable Securities, (ii) that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement shall be conditions precedent to the obligations of such
Holders of Registrable Securities and (iii) that no Holder shall be required to
make any representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
Holder, the Registrable Securities of such Holder and such Holder's intended
method of distribution and any other representations required by law. Subject to
the foregoing, all Holders proposing to distribute Registrable Securities
through such underwritten offering shall enter into an underwriting agreement in
customary form with the underwriter or underwriters. If any Holder of
Registrable Securities disapproves of the terms of the underwriting, such Holder
may elect to withdraw all its Registrable Securities by written notice to the
Company, the managing
15
underwriter and the other Holders participating in such registration. The
securities so withdrawn shall also be withdrawn from registration.
15. Miscellaneous.
(a) No Short Sales; Hedging. The DLJ Entities agree that they will not
sell any shares of Common Stock short or buy any put option (other than
"costless collars" after the second anniversary of the date hereof) in respect
of shares of Common Stock so long as any of the Notes remain outstanding. The
DLJ Entities further agree not to engage in any hedging activities with respect
to Common Stock until the second anniversary of the date hereof.
(b) Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of the Agreement was not performed
in accordance with the terms hereof and that the parties hereto shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
(c) Amendments and Waivers; Assignment. (i) Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by the Company and a
majority in interest of the Holders or, in the case of a waiver, by the party or
parties against whom the waiver is to be effective; provided, however, that
waiver by the Holders shall require the consent of a majority in interest of the
Holders.
(ii) No failure or delay by any party in exercising any right, power
or privilege hereunder (other than a failure or delay beyond a period of time
specified herein) shall operate as a waiver thereof and no single or partial
exercise thereof shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
(d) Notice Generally. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by courier
service, by fax or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified by notice given in
accordance with this Section 15(d)):
16
(i) If to Purchaser, at
UXT Holdings LLC
Eleven Madison Avenue
New York, NY 10010-3629
Attention: Xxx Xxxxx
Facsimile: 000-000-0000
and to any Holder, at the address
provided by such Holder
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx
Xxxx Xxxxxx
Facsimile: 212-848-7179
(ii) If to the Company, at
TXU Corp.
0000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Treasurer
Facsimile: 000-000-0000
with a copy to:
Hunton & Xxxxxxxx
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxx
Facsimile: 000-000-0000
and to:
Xxxxxx Xxxx & Priest LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Xx.
Facsimile : 000-000-0000
(e) Successors and Assigns; Third Party Beneficiaries. (i) This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the
17
parties hereto as hereinafter provided. The registration rights of any Holder
with respect to any Registrable Securities shall be transferred to any Person
who is the transferee of such Registrable Securities; provided that such
transferees shall have assumed the obligations of such Holder hereunder in a
form satisfactory to the Company. All of the obligations of the Company
hereunder shall survive any such transfer. Except as provided in Section 9, no
Person other than the parties hereto and their successors and permitted assigns
is intended to be a beneficiary of this Agreement.
(ii) It is acknowledged and agreed that the DLJ Entities and their
Affiliates shall not transfer Common Stock issued to them pursuant to the
Exchange Agreement to a Competitor (as defined in the Notes) other than pursuant
to a public offering.
(iii) Any transferee (or group of affiliated transferees) of the Notes
or Common Stock that would own or have pursuant to such transfer (assuming the
exercise of the Exchange Right) the right to acquire 5% or more of the
outstanding Common Stock as of the date of the transfer of such securities
shall, before such transfer, agree to be bound by the restrictions set forth in
Section 12 and Section 15(a).
(f) Headings. The headings and subheadings in this Agreement are
included for convenience and identification only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.
(g) Governing Law; Jurisdiction. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
(i) Any claim, action, suit or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated
hereby, may be heard and determined in any New York state or federal
court sitting in The City of New York, County of Manhattan, and each
of the parties hereto hereby consents to the exclusive jurisdiction of
such courts (and of the appropriate appellate courts therefrom in any
such claim, action, suit or proceeding) and irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of venue of any such claim, action, suit
or proceeding in any such court or that any such claim, action, suit
or proceeding that is brought in any such court has been brought in an
inconvenient forum.
(ii) Subject to applicable law, process in any such claim,
action, suit or proceeding may be served on any party anywhere in the
world, whether within or without the jurisdiction of any such court.
Nothing herein shall affect the right of any party to serve legal
process in any manner permitted by law or at equity. WITH RESPECT TO
ANY SUCH CLAIM, ACTION, SUIT OR PROCEEDING IN ANY SUCH COURT, EACH OF
THE PARTIES IRREVOCABLY WAIVES AND RELEASES TO THE OTHER ITS RIGHT TO
A TRIAL BY JURY, AND AGREES THAT IT WILL NOT SEEK A TRIAL BY JURY IN
ANY SUCH PROCEEDING.
(h) Severability. If any term or other provision of this Agreement is
held to be invalid, illegal or incapable of being enforced by any rule of Law or
public policy, all other
18
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
is not affected in any manner materially adverse to any party. Upon a
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.
(i) Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto pertaining to the subject matter hereof and supersedes
all prior agreements and understandings pertaining thereto.
(j) Cumulative Remedies. The rights and remedies provided by this
Agreement are cumulative and the use of any one right or remedy by any party
shall not preclude or waive its right to use any or all other remedies. Said
rights and remedies are given in addition to any other rights the parties may
have by law, statute, ordinance or otherwise.
(k) Construction. Each party hereto acknowledges and agrees that it
has had the opportunity to draft, review and edit the language of this Agreement
and that no presumption for or against any party arising out of drafting all or
any part of this Agreement will be applied in any Dispute relating to, in
connection with or involving this Agreement. Accordingly, the parties hereto
hereby waive the benefit of any rule of Law or any legal decision that would
require, in cases of uncertainty, that the language of a contract should be
interpreted most strongly against the party who drafted such language.
[Signatures appear on next page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
TXU CORP.
By: -------------------------------------
Name:
Title:
UXT HOLDINGS LLC
By: -------------------------------------
Name:
Title:
UXT INTERMEDIARY LLC
By: -------------------------------------
Name:
Title:
20
