Exhibit 10(ss)
ADDITIONAL GUARANTY AGREEMENT
THIS ADDITIONAL GUARANTY AGREEMENT, dated as of November 19, 2002 (this
"Guaranty Agreement"), is made by TXU Energy Company LLC, a Delaware limited
liability company (together with its successors and assigns, including Surviving
Entities pursuant to Section 9(b) and Replacement Guarantors pursuant to Section
21, the "Guarantor"), in favor of State Street Bank and Trust Company of
Connecticut, National Association, as Owner Trustee of the ZSF/Dallas Tower
Trust, a Delaware grantor trust (in such capacity, together with its successors
and assigns, the "Lessor"). Capitalized terms used herein have the meanings
ascribed to such terms in Section 22 (including the incorporation of the
definitions of terms that are defined in the Lease, as defined below), unless
otherwise defined elsewhere herein.
WHEREAS, Lessor and TXU Properties Company, a Texas corporation
(together with its successors and permitted assigns, the "Lessee"), have entered
into that certain Lease Agreement dated as of February 14, 2002 (as amended,
restated, supplemented or otherwise modified from time to time, the "Lease");
and
WHEREAS, TXU Corp., a Texas corporation (the "Parent") executed a
Guaranty Agreement dated as of February 14, 2002 (as amended, restated,
supplemented or otherwise modified from time to time, the "Parent Guaranty
Agreement"), in favor of the Lessor; and
WHEREAS, Lessor, LaSalle Bank National Association, as Indenture
Trustee (in such capacity, together with its successors and assigns, the
"Indenture Trustee"), and First Union National Bank, as Servicer (in such
capacity, together with its successors and assigns, the "Servicer"), are parties
to that certain Indenture and Servicing Agreement dated as of February 14, 2002
(as amended, restated, supplemented or otherwise modified from time to time, the
"Indenture"); and
WHEREAS, in connection with the transactions contemplated by the
Indenture, LaSalle Bank National Association, as Pass-Through Trustee for the
benefit of the Certificateholders (as defined below)(in such capacity, together
with its successors and assigns, the "Pass-Through Trustee"), has executed and
delivered that certain Declaration of Trust dated as of February 14, 2002 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Declaration of Trust"), pursuant to which the Energy Plaza Lease Pass-Through
Trust, a Delaware grantor trust (the "Trust") was created; and
WHEREAS, pursuant to the Assignment of Agreements (as defined in the
Indenture) and the Assignment of Lease (as defined in the Indenture), the Lessor
has assigned to the Indenture Trustee for the benefit of the registered holders
from time to time of the Secured Notes (the "Holders"), and for the benefit of
the registered holders from time to time (the "Certificateholders") of the Trust
Certificates issued pursuant to the Declaration of Trust (the "Certificates"),
all of its rights, titles, and interests in and to the Lease, the Parent
Guaranty Agreement and the other Lease Operative Documents (other than the
Excepted Payments and the Excepted Rights), including, without limitation, the
immediate and continuing right to collect and enforce any Additional Guaranty
from time to time executed pursuant to Section 9(c) of the Parent Guaranty
Agreement; and
WHEREAS, TXU Europe Limited, a corporation incorporated under the laws
of England and Wales ("TXU Europe"), is a subsidiary of the Parent and has filed
a petition for administration under the laws of England; and
WHEREAS, the Lessee and the Guarantor have been notified by a Majority
in Interest of Certificateholders (as defined in the Indenture) that (i) the
taking of action by TXU Europe to authorize and effect such administration
constitutes a Lease Event of Default under Section 16.1(f)(I) of the Lease (such
Lease Event of Default, the "Existing Lease Default"), and (ii) the Existing
Lease Default caused an Event of Default under clause (e) of Section 10.1 of the
Indenture (together with the Existing Lease Default, collectively, the "Existing
Defaults"); and
WHEREAS, the Lessee and Guarantor have requested, and
Certificateholders constituting a Majority in Interest of Certificateholders are
willing to agree to instruct the Indenture Trustee and the Servicer to waive the
Existing Defaults and to forbear from exercising remedies with respect to the
Existing Defaults, in each case subject to the terms and conditions set forth in
a letter agreement dated as of the date hereof (the "Waiver Agreement"), among
the Lessee, the Parent, the Guarantor and such Certificateholders, including,
without limitation, the condition precedent that the Guarantor execute and
deliver this Guaranty Agreement; and
WHEREAS, the Guarantor is an indirect wholly-owned Subsidiary of the
Parent and an Affiliate of the Lessee and is engaged in related and
interdependent businesses with the Parent and the Lessee; and
WHEREAS, the Guarantor is desirous that a Majority in Interest of
Certificateholders execute and deliver the Waiver Agreement and will receive
substantial financial and other benefits from such execution and delivery as a
member of the consolidated group of entities that includes the Parent and the
Lessee; and
WHEREAS, the Board of Managers (or equivalent governing body) of the
Guarantor has determined that it is in the best interests of the Guarantor and
is advisable to execute and deliver this Guaranty Agreement as an Additional
Guaranty pursuant to Section 9(c) of the Parent Guaranty Agreement (and not as a
Replacement Guaranty pursuant to Section 21 of the Parent Guaranty Agreement);
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor hereby covenants and
agrees with, and represents and warrants to the Lessor for the benefit of each
of the Lessor, the Servicer, the Trust, the Pass-Through Trustee, each other
Holder, each Certificateholder, each Indemnitee, each member of each
Indemnitee's Group, each Tax Indemnitee and each other Person to whom Base Rent
or Supplemental Rent may be payable pursuant to the Lease (together with all
successors and assigns of the foregoing, collectively, the "Beneficiaries," and
each individually, a "Beneficiary") as follows:
1. THE GUARANTY. The Guarantor hereby irrevocably and unconditionally
guarantees to each Beneficiary to which such obligations are owing the
following obligations:
(i) the due, punctual and full payment by the Lessee
(whether at the stated time for payment thereof, by demand or
otherwise) of
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all amounts to be paid by the Lessee pursuant to the Lease and the
other Lease Operative Documents, including but not limited to Base
Rent, Supplemental Rent, amounts payable by the Lessee if the Lessee
self-insures pursuant to Section 9.1(g) of the Lease, amounts payable
by the Lessee pursuant to Sections 19.1 and 19.2 of the Lease (and
other similar provisions of the other Lease Operative Documents), the
purchase price of the Property if the Lessee exercises its right to
purchase the Property pursuant to the Lease, any applicable Make-Whole
Premium, any Termination Value Payment, any Stipulated Loss Value
Payment, any late charges or penalties, interest payable on late
charges or penalties, all amounts payable by the Lessee under Article
17 of the Lease (including but not limited to liquidated damages),
fees, expenses (including but not limited to the reasonable fees and
expenses of attorneys, accountants, experts, and advisors), or other
similar costs (including all such amounts which would become due but
for the operation of the automatic stay under Section 362(a) of the
United States Bankruptcy Code, 11 U.S.C.ss.362(a), and the operation of
Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11
U.S.C.ss.502(b) andss.506(b)); and
(ii) the due, prompt and faithful performance of, and
compliance with, all other obligations, covenants, terms, conditions
and undertakings of the Lessee contained in each Lease Operative
Document to which the Lessee is a party in accordance with the terms
thereof (all such obligations described in clauses (i) and (ii) above
are herein called the "Guaranteed Obligations").
The guaranty in the preceding sentence is an absolute, present and
continuing guaranty of payment and not of collectability and is in no
way conditional or contingent upon any attempt to collect from the
Lessee, the Parent or any other Person or upon any other action,
occurrence or circumstance whatsoever. In the event that the Lessee
shall fail so to pay any of such Guaranteed Obligations, the Guarantor
agrees to pay the same when due to each Beneficiary, without demand,
presentment, protest or notice of any kind. Each default under any
Lease Operative Document shall give rise to a separate cause of action
hereunder and separate suits may be brought hereunder as each cause of
action arises.
The Guarantor also hereby agrees to pay and to indemnify and save each
Beneficiary harmless from and against any damage, loss, cost or expense
(including but not limited to the reasonable fees and expenses of
attorneys, accountants, and advisors) which such Beneficiary may incur
or be subject to as a consequence, direct or indirect, of (i) any
breach by the Guarantor or the Lessee of any covenant, term or
condition in, or the occurrence of any default under, this Guaranty
Agreement or any other Lease Operative Document, together with all
expenses resulting from the compromise or defense of any claims or
liabilities arising as a result of any such breach or default, and
(ii) any legal action threatened or commenced in connection with or +
relating to this Guaranty Agreement or any other Lease Operative
Document.
2. OBLIGATIONS ABSOLUTE. The obligations of the Guarantor hereunder shall
be primary, absolute, irrevocable and unconditional, irrespective of
the validity, regularity or enforceability of any of the Indenture,
the Lease, the Parent Guaranty Agreement or any of the other Operative
Documents (collectively, the "Transaction Documents"), shall
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not be subject to any counterclaim, setoff, deduction or defense based
upon any claim the Guarantor may have against the Lessee, the Parent,
any Beneficiary, or otherwise, and shall remain in full force and
effect without regard to, and (subject to the provisions of Section
21 hereof with respect to the release of the Guarantor upon the
substitution of a Replacement Guarantor hereunder) shall not be
released, discharged or in any way affected by, any circumstance or
condition whatsoever (whether or not the Guarantor shall have any
knowledge or notice thereof), including, without limitation:
(a) any amendment, restatement, supplement or other modification
from time to time to or of the Transaction Documents or any other
instrument referred to therein (except that the obligations of the
Guarantor hereunder shall apply to the Transaction Documents or such
other instruments as so amended, restated, supplemented or modified)
or any assignment or transfer of any thereof or of any interest
therein, or any furnishing, acceptance or release of any security for
the Guaranteed Obligations, (b) any waiver, consent, extension,
indulgence or other action or inaction under or in respect of the
Transaction Documents; (c) any bankruptcy, insolvency, readjustment,
composition, liquidation or similar proceeding with respect to the
Lessor, the owner participant in the Lessor, the Pass-Through Trustee,
the Parent or the Lessee or its property; (d) any merger,
amalgamation or consolidation of the Guarantor, the Lessor, the
Pass-Through Trustee, the Parent or the Lessee into or with any other
Person or any sale, lease or transfer of any or all of the assets of
the Guarantor, the Lessor, the Pass-Through Trustee, the Parent or
the Lessee to any Person; (e) any failure on the part of the Lessor,
the Pass-Through Trustee, the Parent or the Lessee for any reason to
comply with or perform any of the terms of any other agreement with the
Guarantor; or (f) any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor.
The Guarantor covenants that its obligations hereunder will not be
discharged except by payment in full of all of the Guaranteed
Obligations.
3. WAIVER. The Guarantor unconditionally waives to the fullest extent
permitted by law, (a) notice of acceptance hereof, of any action
taken or omitted in reliance hereon and of any defaults by the Lessee
in the payment of any amounts due under the Transaction Documents,
and of any of the matters referred to in Section 2 hereof, (b) all
notices which may be required by statute, rule of law or otherwise to
preserve any of the rights of any Beneficiary against the Guarantor,
including, without limitation, presentment to or demand for payment
from the Lessee or the Guarantor, notice to the Lessee or to the
Guarantor of default or protest for nonpayment or dishonor and the
filing of claims with a court in the event of the bankruptcy of the
Lessee, the Parent, the Lessor, the owner participant in the
Lessor or the Pass-Through Trustee, (c) any right to the
enforcement, assertion or exercise by any Beneficiary of any right,
power or remedy conferred in this Guaranty Agreement or the other
Transaction Documents, (d) any requirement or diligence on the part
of any Beneficiary and (e) any other act or omission or thing or delay
to do any other act or thing which might in any manner or to any extent
vary the risk of the Guarantor or which might otherwise operate as a
discharge of the Guarantor.
4. OBLIGATIONS UNIMPAIRED. The Guarantor authorizes each Beneficiary,
without notice or demand to the Guarantor and without affecting its
obligations hereunder, from time to time (a) to renew, compromise,
extend, accelerate or otherwise change the time for payment of, or
otherwise change the terms of, all or any part of the Guaranteed
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Obligations and the Transaction Documents or any other instrument
referred to therein, (b) to take and hold security for the payment
of the Guaranteed Obligations, for the performance of the Transaction
Documents, for the performance of this Guaranty Agreement or
otherwise for the indebtedness guaranteed hereby and to exchange,
enforce, waive and release any such security, (c) to obtain
additional or substitute endorsers or guarantors; (d) to exercise or
refrain from exercising any rights against the Lessee, the Parent,
the Lessor, the Pass-Through Trustee, and others; and (e) to apply
any sums, by whomsoever paid or however realized, to the payment of
any Guaranteed Obligation hereunder. The Guarantor waives any right
to require any Beneficiary to proceed against the Parent or any
additional or substitute endorsers or guarantors or to pursue or
exhaust any security provided by the Lessee, the Parent, the Lessor,
the Pass-Through Trustee, the Guarantor or any other Person or to
pursue any other remedy available to any Beneficiary.
5. SUBROGATION. The Guarantor will not exercise against the Lessee, the
Parent, any Additional Guarantor (as defined in Section
9(c)(i) of this Guaranty Agreement), any other Additional Guarantor
(as defined in the Parent Guaranty Agreement), any party obligated
under any Qualified Letter of Credit (as defined in Section 9(c)(iv)
of this Guaranty Agreement) or any party obligated under any
Qualified Letter of Credit (as defined in Section 9(c)(iv) of the
Parent Guaranty Agreement), any rights that it may have acquired by
way of subrogation under this Guaranty Agreement, by any payment
made hereunder or otherwise, or accept any payment on account of such
subrogation rights, or any rights of reimbursement or indemnity or
any rights or recourse to any security for the Guaranteed Obligations
unless and until all of the obligations, undertakings or conditions
to be performed or observed by the Lessee pursuant to the Lease and
by the Lessee and the Guarantor pursuant to the other Transaction
Documents at the time of the Guarantor's exercise of any such right
shall have been performed, observed or paid in full.
For a period of one year after the payment in full of the Guaranteed
Obligations, the Guarantor hereby waives (x) all rights of subrogation
which it may at any time otherwise have as a result of this Guaranty
Agreement (whether statutory or otherwise) to the claims of the Lessor
and the other Beneficiaries against the Lessee, the Parent or any other
guarantor of the Guaranteed Obligations (each referred to herein as the
"Other Party") and all contractual, statutory or common law rights of
reimbursement, contribution or indemnity from any Other Party which it
may at any time otherwise have as a result of this Guaranty Agreement;
(y) any right to enforce any other remedy which the Lessor and the
other Beneficiaries now have or may hereafter have against any Other
Party; and (z) all claims (as such term is defined in the Bankruptcy
Code) it may at any time otherwise have against any Other Party arising
from any transaction whatsoever, including without limitation its right
to assert or enforce any such claims.
6. REINSTATEMENT OF GUARANTY. This Guaranty Agreement shall continue to
be effective, or be reinstated, as the case may be, if and to the
extent at any time payment, in whole or in part, of any of the sums due
to any Beneficiary under the Lease or any other sum constituting any
of the other Guaranteed Obligations is rescinded or must otherwise be
restored or returned by any Beneficiary upon the insolvency,
bankruptcy, dissolution,
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liquidation or reorganization of the Lessee, the Parent, the Lessor,
the owner participant in the Lessor, or the Pass-Through Trustee, or
upon or as a result of the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to the
Lessee, the Parent, the Lessor, such owner participant, the
Pass-Through Trustee or any substantial part of any property of any of
the foregoing, or otherwise, all as though such payments had not been
made. If an event permitting Lessor or any other Beneficiary to demand
payment of any of the Guaranteed Obligations shall at any time have
occurred and be continuing and such demand shall at such time be
prevented or the right of any Beneficiary to receive any payment under
any Transaction Document shall at such time be delayed or otherwise
affected by reason of the pendency against the Lessee of a case or
proceeding under a bankruptcy or insolvency law, the Guarantor agrees
that, for purposes of this Guaranty Agreement and its obligations
hereunder, such Guaranteed Obligation shall be deemed to have been
demanded with the same effect as if Lessor or such other Beneficiary
had demanded the same in accordance with the terms of the Transaction
Documents, and the Guarantor shall forthwith pay such demanded amount
and any other amounts guaranteed hereunder.
7. PAYMENTS. The Guarantor hereby guarantees that the Guaranteed
Obligations will be paid to the Beneficiaries in lawful currency of
the United States of America and in immediately available funds, at the
times and places provided in, and otherwise strictly in accordance
with the terms and provisions of, the applicable Transaction Documents
giving rise to such Guaranteed Obligations (regardless of any law,
regulation or decree now or hereafter in effect which might in any
manner affect the Guaranteed Obligations, or the rights of any such
Beneficiary with respect thereto as against the Lessee, or cause or
permit to be invoked any alteration in the time, amount or manner of
payment by the Lessee of any or all of the Guaranteed Obligations),
without set-off or counterclaim and free and clear of, and without
reduction for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings now or hereafter imposed, levied, collected, withheld
or assessed by any country (or by any political subdivision or taxing
authority thereof or therein) excluding taxes and other amounts for
which the Lessee has no obligation to pay pursuant to the Lease or the
other Lease Operative Documents (such non-excluded taxes and other
amounts being called "Taxes"). If any Taxes are required to be
withheld for any amount payable to any Beneficiary under this Guaranty
Agreement, the amounts so payable to the applicable Beneficiary shall
be increased to the extent necessary to yield to such Beneficiary
(after payment of all Taxes) interest or any such other amounts at the
rates or in the amounts specified in the Transaction Documents.
8. RANK OF GUARANTY. The Guarantor agrees that its obligations under this
Guaranty Agreement shall rank at least pari passu with all other
unsecured senior obligations of the Guarantor now or hereafter
existing.
9. ADDITIONAL COVENANTS OF THE GUARANTOR.
(a) General. So long as the Guaranteed Obligations are
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outstanding or the Transaction Documents shall remain in effect, the
Guarantor agrees that, unless the Majority in Interest of the
Certificateholders otherwise consents in writing:
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(i) Maintenance of Existence, Etc. Subject to Section 9(b), the
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Guarantor will at all times do or cause to be done all things necessary
to maintain and preserve its existence as a limited liability company,
and maintain, preserve and renew its and its Subsidiaries' licenses,
patents and franchises material to the conduct of the business of
the Guarantor and such Subsidiaries taken as a whole, provided that
nothing contained in this Section 9(a)(i) shall (A) require the
Guarantor or any such Subsidiary to maintain, preserve or renew any
license, patent or franchise not necessary or desirable in the conduct
of its business, or (B) prohibit the Guarantor from terminating the
corporate existence of a Subsidiary if in the reasonable opinion of the
Guarantor such termination is in the best interests of the Guarantor
and is not disadvantageous to any Beneficiary.
(ii) Financial Statements, Etc. The Guarantor will furnish to the
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Lessor and to each Certificateholder, as applicable:
(A) as soon as publicly available, and in any event
within the earlier of (1) 120 days after the end of each
fiscal year of the Guarantor or (2) the date by which the
annual financial statements of the Guarantor are required to be
delivered pursuant to its primary revolving credit facility, a
consolidated balance sheet of the Guarantor and its
consolidated Subsidiaries as at the end of such fiscal year
and the related consolidated statements of operations and
sources of funds of the Guarantor and its consolidated
Subsidiaries for such fiscal year, prepared in conformity with
GAAP (except as disclosed in the notes thereto) and reported
on by independent accountants of recognized national standing;
provided, that delivery of copies of either the annual report
on Form 10-K of the Guarantor for such annual period or, in
lieu thereof, a report on Form 8-K of Guarantor's direct
parent, TXU US Holdings Company, a Texas corporation
("Holdings"), filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this
clause (A) with respect to consolidated financial statements
if such financial statements are included in such report;
(B) as soon as publicly available, and in any event
within the earlier of (1) 60 days after the end of each quarter
(except the last quarter)of each fiscal year of the Guarantor
or (2) the date by which the quarterly financial statements of
the Guarantor are required to be delivered pursuant to its
primary revolving credit facility, a consolidated balance sheet
of the Guarantor and its consolidated Subsidiaries as at the
end of such quarter and the related consolidated statements of
operations and sources of funds of the Guarantor and its
consolidated Subsidiaries for such quarter and for the period
from the beginning of such fiscal year to the end of such
quarter, in each case setting forth comparative figures for the
related periods in the prior fiscal year, certified by the
chief financial officer, the chief accounting officer or the
treasurer of the Guarantor to have been prepared in accordance
with GAAP (except as disclosed in the notes
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thereto and subject to normal year-end adjustments); provided,
that delivery of copies of either the quarterly report on Form
10-Q of the Guarantor for such quarterly period or, in lieu
thereof, a report on Form 8K of Holdings, filed with the
Securities and Exchange Commission shall be deemed to satisfy
the requirements of this clause (B) with respect to
consolidated financial statements if such financial statements
are included in such report;
(C) concurrently with the delivery each year of the
financial statements furnished pursuant to Section 9(a)(ii)(A),
an officer's certificate of the Guarantor certifying that the
signer has reviewed or caused to be reviewed by persons under
his supervision, the relevant terms of this Guaranty Agreement
and has made, or caused to be made under his supervision, a
review of the transactions and financial condition of the
Guarantor and its consolidated Subsidiaries during the preceding
year, and that such review has not disclosed the existence
during such period, nor does the signer have knowledge of the
existence as at the date of such certificate, of a Lease
Default, a Lease Event of Default or a default hereunder, or of
any other default with respect to the Guaranteed Obligations or,
if any such a default existed or exists, specifying the nature
and period of existence thereof and what action the Guarantor
has taken or is taking or proposed to take with respect thereto;
(D) with reasonable promptness, such other information
relating to the Guarantor, any of its Material Subsidiaries, or
the Lessee that any Certificateholder may from time to time
reasonably request and that the Guarantor may furnish without
violating applicable securities laws (taking into account the
Certificateholders' confidentiality obligations under paragraph
9D of the Certificate Purchase Agreement pursuant to which the
Certificates were issued); and
(E) upon the request of any Certificateholder, provide
such Certificateholder, and any qualified institutional buyer
designated by such Certificateholder, such financial and other
information as such Certificateholder may reasonably determine
to be necessary in order to permit compliance with the
information requirements of Rule 144A (as such term is defined
in the Indenture) in connection with the resale of the Trust
Certificates (as such term is defined in the Indenture), except
at such times as the Guarantor is subject to the reporting
requirements of section 13 or 15(d) of the Exchange Act (as such
term is defined in the Indenture)(for the purpose of this clause
(E), the term "qualified institutional buyer" shall have the
meaning specified in Rule 144A).
(iii) Inspections, Etc. The Guarantor will permit any
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authorized representative of Lessor or any Certificate holder, upon reasonable
prior notice and at the expense of the Guarantor at such times as a Lease
Default or a Lease Event of Default shall exist and otherwise at the expense of
the Lessor or
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such Certificateholder, as the case may be, to visit and discuss with
the Guarantor's officers the financial condition of the Guarantor and
the Guarantor's ability to comply with its obligations hereunder, all
at such reasonable times and intervals as Lessor or such
Certificateholder may request.
(b) Merger, Consolidation. The Guarantor shall not consolidate with, or
merge with or into, any other Person or convey, transfer or lease all or
substantially all of its assets as an entirety (whether by one transaction or a
series of related transactions) to any Person, unless each of the following
conditions shall be satisfied:
(i) the successor entity formed by such consolidation, the survivor of
such merger (including the Guarantor) or the successor entity which
acquires by conveyance, transfer or lease all or substantially all
of the assets of the Guarantor as an entirety (each of the foregoing
being referred to as the "Surviving Entity") shall be a Solvent
entity organized and existing under the laws of the United States
of America, any State thereof or the District of Columbia and at
least $5,000,000,000 of the Surviving Entity's consolidated assets
shall be within the United States;
(ii) the Surviving Entity (if not the Guarantor), shall expressly assume
in writing by instrument or instruments reasonably satisfactory to
the Majority in Interest of the Certificateholders, in scope, form
and legal effect, the due and punctual payment, performance and
observance of all obligations of the Guarantor under this Guaranty
Agreement, with the same effect as if such entity had originally
been named Guarantor herein or had been a party hereto;
(iii) prior to and immediately after giving effect to such transaction,
no Lease Default or Lease Event of Default shall exist;
(iv) the Surviving Entity shall have delivered to the Lessor an officer's
certificate stating that such consolidation, merger, conveyance,
transfer or lease and the assumption agreement required by clause
(ii)above comply with the provisions of this Section 9(b);
(v) (A) in the case of any consolidation, merger, conveyance, transfer
or lease with an entity that is an Affiliate of the Guarantor
prior to giving effect to such transaction, then immediately after
giving effect to such transaction the tangible net worth
(calculated in accordance with GAAP) of the Successor Entity shall
be equal to or greater than $3,000,000,000, (B) in the case of any
consolidation, merger, conveyance, transfer or lease with any
Affiliate of the Guarantor to which the foregoing subclause (A) does
not apply, the Guarantor shall have first obtained the prior
written consent of the Lessor and the Majority in Interest of the
Certificateholders, and (C) in the case of any consolidation,
merger, conveyance, transfer or lease with any Person that is not
an Affiliate of the Guarantor prior to giving
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effect to such transaction, either (1) the tangible net worth
(calculated in accordance with GAAP) of the Surviving Entity
immediately after giving effect to such transaction shall be equal
to or greater than the greater of $3,000,000,000 and the tangible
net worth (calculated in accordance with GAAP) of the Guarantor
immediately prior to such transaction or (2) the Guarantor shall
have first obtained the prior written consent of the Lessor and the
Majority in Interest of the Certificateholders;
(vi) immediately after giving effect to such transaction, the Surviving
Entity shall have Acceptable Debt Ratings from Standard & Poor's
and Moody's that in each case are at least as high as the Debt
Ratings of the Guarantor immediately prior to the date of such
transaction; and
(vii) in the case of any such consolidation, merger, conveyance, transfer
or lease in which the Guarantor is not the Surviving Entity, the
Surviving Entity shall have caused to be delivered to Lessor and
the Indenture Trustee an opinion of counsel reasonably acceptable to
the Majority in Interest of the Certificateholders, to the effect
that all agreements or instruments effecting the assumption
referred to in clause (ii) above are enforceable in accordance
with their terms and comply with the terms of the Transaction
Documents.
Upon any consolidation or merger, or any conveyance, transfer or
lease of all or substantially all of the assets of the Guarantor as an
entirety, in accordance with this Section 9(b), in a transaction in which the
Guarantor is not the Surviving Entity, the Surviving Entity shall succeed to,
and be substituted for, the Guarantor under this Guaranty Agreement, with the
same effect as if such successor had been named as the Guarantor herein.
(c) Ratings Decline. If any Ratings Decline occurs, the Guarantor shall
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provide written notice thereof to the Lessor, the Indenture Trustee, the
Servicer and each Certificateholder within 10 days thereafter and shall cause
an Additional Guaranty or a Qualified Letter of Credit satisfying the
requirements set forth below to be provided to the Indenture Trustee (as
assignee of the Lessor's rights under the Lease) within 30 days after such
Ratings Decline. Any failure to provide such Additional Guaranty or Qualified
Letter of Credit within such 30-day period shall constitute a Lease Event of
Default. In the event that the Guarantor regains Acceptable Debt Ratings, and
provided that no Lease Default or Lease Event of Default shall exist at the
time of either such notice or such release, the Guarantor may, upon at least
thirty (30) days' prior written notice to the Lessor, the Indenture Trustee,
the Servicer and each Certificateholder, obtain the release of such Additional
Guaranty or Qualified Letter of Credit, as the case may be, by delivering to
the Lessor, the Indenture Trustee, the Servicer and each Certificateholder
satisfactory evidence that the Guarantor has regained Acceptable Debt Ratings.
In the event of a Ratings Decline occurring after such release, the provisions
of this Section 9(c) requiring the delivery of an Additional Guaranty or a
Qualified Letter of Credit shall again apply. In addition, at any time that
an Additional Guaranty or a Qualified Letter of Credit shall be in effect, the
Guarantor may, upon at least thirty (30) days' prior written
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notice to the Lessor, the Indenture Trustee (as assignee of the Lessor's rights
under the Lease), the Servicer and each Certificateholder, substitute an
Additional Guaranty or a Qualified Letter of Credit for the Additional Guaranty
or the Qualified Letter of Credit then outstanding pursuant hereto, provided
that no Lease Default or Lease Event of Default shall exist at the time of any
such notice or substitution.
(i) "Additional Guaranty" shall mean a guaranty agreement
that has been duly executed and delivered by an
Acceptable Guarantor (an "Additional Guarantor") and
is in a form substantially identical to this Guaranty
Agreement (with appropriate references revised to
reflect the identity and form of business
organization of the Additional Guarantor but with the
deletion of Section 21 and references to a
Replacement Guarantor). Without limitation of the
foregoing, any Additional Guaranty shall include
credit enhancement requirements identical to those
set forth in this Section 9(c) to protect the
Beneficiaries in the event a Ratings Decline occurs
with respect to any Debt Rating of such Additional
Guarantor.
(ii) "Acceptable Guarantor" shall mean a Solvent entity
organized and existing under the laws of the United
States of America, any State thereof or the District
of Columbia that satisfies all of the following
criteria:
(A) at least 35% of such entity's consolidated assets,
properties and operations shall be within the United States;
(B) the tangible net worth (calculated in accordance
with GAAP from audited financial statements reasonably
acceptable to the Majority in Interest of Certificateholders
and provided to the Indenture Trustee, the Servicer and the
holders of the Trust Certificates prior the delivery of such
Additional Guaranty) of such entity must be equal to or
greater than $3,000,000,000; and
(C) such entity must have Acceptable Debt Ratings.
(iii) "Qualified Letter of Credit" shall mean an uncollateralized,
irrevocable, standby letter of credit issued by an Acceptable
Bank, in form and substance satisfactory to the Majority in
Interest of Certificateholders (in their sole and exclusive
judgment exercised in good faith), that satisfies all
of the following criteria:
(A) the Servicer, acting on behalf of the Indenture
Trustee, as assignee of the Lessor's rights under the
Lease, shall be the initial beneficiary of such
letter of credit;
(B) such letter of credit shall authorize the Servicer
to draw on the Issuing Bank from time to time immediately
available funds in an aggregate amount which at all times
shall be at least equal to the greater of (1) the aggregate
Base Rent remaining to be paid over the remainder of the
scheduled Base Term (determined initially on the date of the
issuance
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thereof without discounting) and (2) the largest
Stipulated Loss Value Payment payable by the Lessee
over the remainder of the scheduled Base Term;
(C) such letter of credit shall provide that it may be
drawn as provided in paragraph (vi) below, with each drawing
under this clause (C) or under the foregoing clause (B)
being made by presentation, at an office of the issuing bank,
in person, via courier or other delivery service, on or before
the stated expiry date thereof, of a certificate that (I)
identifies the letter of credit with respect to which such
certificate is being presented, (II) identifies the
event permitting such drawing and certifies that such
event has occurred, and (III) identifies the amount
being drawn thereunder;
(D) such letter of credit shall have a stated expiry
date which is at least one year from date of the issuance
thereof and, if such expiry date is prior to the end of the
Base Term, which shall be automatically extended pursuant to
the terms of such letter of credit for a period of at least
one year from the date of such expiration unless the issuer
thereof shall, not later than 30 days prior to the stated
expiry date, provide written notice to the Servicer, acting
on behalf of the Indenture Trustee (as assignee of the
Lessor's rights under the Lease), in bold face type
identifying such letter of credit with particularity, stating
that such notice is a "Notice of Letter of Credit Expiration"
and that such letter of credit shall expire upon the expiry
date stated in such notice and in such letter of credit; and
(E) such letter of credit shall be transferable by the
beneficiary thereof in its entirety, without any fee
applicable to such transfer that is required to be
paid by any such transferor or transferee, to any
successor Servicer, acting on behalf of the Indenture
Trustee (as assignee of the Lessor's rights under the
Lease) pursuant to the terms of the Indenture.
(iv) "Acceptable Bank" shall mean any bank or trust company (i)
which is organized under the laws of the United States of
America or any State thereof, (ii) which has capital, surplus
and undivided profits aggregating at least $1,000,000,000,
and (iii) which has a Debt Rating issued by Standard & Poor's
of at least of at least AA- and a Debt Rating issued by
Moody's of at least Aa3 (or such bank or trust company must
have either of such Debt Ratings in the event that either
Moody's or Standard & Poor's (including their respective
successors) shall have ceased to exist).
(v) Any Additional Guaranty shall be delivered with (x)
legal opinions (in form and substance equivalent to
those opinions delivered with respect to this
Guaranty Agreement but consistent with the structure
of the Additional Guarantor), and (y) such
certificates, documents or instruments as the
Indenture Trustee, the Servicer or any
Certificateholder may reasonably request to provide
such Persons the types of legal opinions and
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such certificates, documents or instruments it received
with respect to this Guaranty Agreement, each of which
deliveries shall be in form and substance satisfactory to the
Indenture Trustee, the Servicer and each Certificateholder
(in their sole and exclusive judgments exercised in good
faith).
(vi) With respect to any Qualified Letter of Credit, the
Servicer on behalf of the Indenture Trustee (as
assignee of the Lessor's rights under the Lease)
shall be permitted thereunder,
(A) from time to time, if the Lessee and the Guarantor
fail to make any payment of Base Rent on the applicable Rent
Payment Date, to draw upon such Qualified Letter of Credit in
an amount equal to the amount of Base Rent that is not paid
on such Rent Payment Date;
(B) if any event occurs that requires the Lessee to make
a Stipulated Loss Value Payment pursuant to the Lease
and the Lessee and the Guarantor fail to make such
payment, to draw upon such Qualified Letter of Credit
in the amount of the Stipulated Loss Value Payment
calculated as of the business day following the date
of such occurrence;
(C) if any Lease Event of Default results in an
acceleration of the Base Rent payable under the
Lease, to draw upon such Qualified Letter of Credit
in an amount equal to the maximum remaining amount
available to be drawn thereunder; and
(D) if thirty (30) or fewer days remain prior to the
stated expiry date of such Qualified Letter of Credit, the
issuer thereof has given the notice of non-extension referred
to in clause (D) of paragraph (iii) above, and the Servicer on
behalf of the Indenture Trustee (as assignee of the Lessor's
rights under the Lease) has not received a Qualified Letter
of Credit or an Additional Guaranty to replace such
Qualified Letter of Credit, to draw upon such Qualified Letter
of Credit in an amount equal to the maximum remaining amount
available to be drawn thereunder.
The proceeds from each drawing under the Qualified
Letter of Credit shall be deposited in the Rent Collection
Account and applied pursuant to the provision of the Indenture
that would have applied in the event that the payment had been
made by the Lessee itself under the circumstances under the
Lease giving rise to such payment; provided, however, that
the proceeds from any drawing under clause (D) above
shall, within five (5) Business Days following the
Servicer's receipt of the proceeds of such drawing,
be applied (to the extent of such proceeds) by the
Indenture Trustee to the purchase of United States
Treasury securities identified to the Indenture
Trustee by the Guarantor, that are non-callable, that
mature as close as possible prior to each succeeding
Rent Payment Date and that are in the respective
amounts of Base Rent payable on such
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dates. Upon the receipt by the Servicer on behalf of the
Indenture Trustee (as assignee of the Lessor's rights under
the Lease) of the proceeds from a drawing under the Qualified
Letter of Credit pursuant clause (A), (B) or (C) above, the
obligation of the Lessee or the Guarantor to make the
corresponding payment under the Lease shall be deemed
satisfied, but only to the extent of the amount of such
proceeds and without (a)curing any Lease Default or Lease
Event of Default relating to such corresponding payment under
the Lease except as provided in the final sentence of
this paragraph or (b) affecting the obligation of the
Lessee or the Guarantor to make any other payment of
Base Rent, Supplemental Rent, Stipulated Loss Value Payment,
Termination Value Payment or any other amount at any time
payable under the Lease or this Guaranty Agreement, as the
case may be. Upon the purchase by the Indenture Trustee of the
United States Treasury securities referred to in the first
sentence of this paragraph, the execution of a supplement to
the Indenture to accomplish the defeasance of certain
obligations of the Lessee that is to be effected by such
purchase, the delivery (x) by the Lessee of a tax opinion
relating to the defeasance and (y) by the Issuer of a
security agreement and a legal opinion relating to such
securities and the defeasance effected by the
purchase thereof (which supplement to the Indenture,
security agreement and legal opinions must be
satisfactory in form, scope and substance to the
Indenture Trustee and the Majority in Interest of
Certificateholders, acting through the Pass-Through
Trustee(as such terms are defined in the Indenture)),
the Guarantor will no longer be obligated to provide
an Additional Guaranty or a Qualified Letter of
Credit at such times as it does not maintain
Acceptable Debt Ratings (and no Lease Default or
Lease Event of Default thereafter shall result solely
from its failure to maintain Acceptable Debt Ratings)
and the Lessee will be released from its obligation
to pay Base Rent during the Base Term (to the extent
of the principal amount of such securities at the
respective maturities thereof), but without affecting
the obligation of the Lessee or the Guarantor to make
any other payment of Base Rent or any payment of
Supplemental Rent, Stipulated Loss Value Payment, Termination
Value Payment or any other amount at any time payable under
the Lease or this Guaranty Agreement, as the case may be,
except to the extent of the net proceeds actually realized by
the Indenture Trustee at the respective maturities of such
securities or upon the sale or other disposition of such
securities pursuant to such security agreement and the other
Debt Documents under the circumstances provided therein for
such sale or other disposition. To the extent that the
proceeds from any drawing under clause (A) or (B) above are
received by the Servicer on behalf of the Indenture Trustee
(as assignee of the Lessor's rights under the Lease) before
the expiration of the applicable grace period under
Section 16.1 (a) of the Lease, then such receipt shall cure
the Lease Default that resulted from the failure of the
Lessee to make the payment in question under the Lease.
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(vii) For avoidance of doubt, an Additional Guaranty or Qualified
Letter of Credit delivered with respect to a Ratings Decline
may be used to satisfy both the provisions of this Section
9(c) and the provisions of Section 9(c) of the Parent Guaranty
Agreement (or any Replacement Parent Guaranty) with respect to
such Ratings Decline.
10. REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR.
The Guarantor represents and warrants as follows:
(a) Organization. Good Standing and Location. The Guarantor is (i)
a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware, (ii) duly
qualified and authorized to do business and in good standing in every
other jurisdiction where the nature of its business requires such
qualification and (iii) has all requisite limited liability company
power and authority, and all governmental licenses and permits, to own
and operate its properties and to carry on its businesses as presently
conducted. The Guarantor has the requisite limited liability company
power to enter into and perform its obligations under this Guaranty
Agreement.
(b) Authorization and Enforceability of Guaranty Agreement. The
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execution, delivery and performance of this Guaranty Agreement have been
duly authorized by all necessary limited liability company action on the
part of the Guarantor. This Guaranty Agreement has been duly and
validly executed and delivered and constitutes the legal, valid and
binding obligation of the Guarantor, enforceable against it in
accordance with its terms, subject to (i) applicable bankruptcy,
insolvency, moratorium, reorganization, receivership and similar laws
affecting the rights and remedies of creditors generally, and (ii)
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(c) Consents and Approvals; No Breach; Adequate Consideration.
------------------------------------------------------------
All consents, approvals, licenses and authorizations of, and filings and
registrations with, any Governmental Authority required under Applicable
Laws for the execution, delivery and performance of this Guaranty
Agreement have been obtained or made and are in full force and effect.
The execution, delivery and performance of this Guaranty Agreement does
not and will not violate the provisions of any Applicable Laws, and does
not and will not result in the breach of, or constitute a default or
require any consent under, any material agreement, instrument, or
document to which it is a party or by which it or any of its property may
be bound or affected. By virtue of its relationship with the Lessee and
the Parent, the execution, delivery and performance of this Guaranty
Agreement is for the direct benefit of Guarantor and it has received
adequate consideration for this Guaranty Agreement.
11. NOTICES. Unless otherwise specifically provided herein, all notices,
consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof shall be in
writing, and any such communication shall become effective when received,
addressed in the following manner: (a) if to the Guarantor, to TXU Energy
Company LLC, Attention: Treasurer, 1601 Bryan St., Dallas, Texas 75201,
with a copy to Hunton & Williams, 1601 Bryan Street, Dallas, Texas
15
75201, or (b) if to Lessor or any other Beneficiary, to the address
of Lessor set forth in the Lease and to the address of each other
Beneficiary as set forth in the Transaction Documents or as otherwise
provided to Guarantor by such other Beneficiary; provided, however,
-------- -------
that any such addressee may change its address for communications by notice
given aforesaid to the other parties hereto.
12. CONSTRUCTION. The section and subsection headings in this Guaranty
Agreement are for convenience of reference only and shall neither be
deemed to be a part of this Guaranty Agreement nor modify, define,
expand or limit any of the terms or provisions hereof. All references
herein to numbered sections, unless otherwise indicated, are to
sections of this Guaranty Agreement. Words and definitions in the
singular shall be read and construed as though in the plural and vice
versa, and words in the masculine, neuter or feminine gender shall be
read and construed as though in either of the other genders where the
context so requires.
13. SEVERABILITY. If any provision of this Guaranty Agreement, or the
application thereof to any Person or circumstances, shall, for any
reason or to any extent, be invalid or unenforceable, such invalidity
or unenforceability shall not in any manner affect or render invalid or
unenforceable the remainder of this Guaranty Agreement, and the
application of that provision to other Persons or circumstances shall
not be affected but, rather, shall be enforced to the extent permitted
by applicable law.
14. SUCCESSORS. The terms and provisions of this Guaranty Agreement shall
be binding upon the Guarantor and its successors and permitted assigns
and shall inure to the benefit of the Lessor, the other Beneficiaries
and their respective successors, transferees and assigns. Without
limitation of the foregoing sentence, the Guarantor acknowledges that
the Lessor has assigned to the Indenture Trustee of all of its rights,
titles, and interests in and to this Guaranty Agreement and the other
Lease Operative Documents (other than the Excepted Payments and
Excepted Rights) pursuant to the Assignment of Lease and Assignment of
Agreements.
15. ENTIRE AGREEMENT; AMENDMENT. This Guaranty Agreement expresses the
entire understanding of the subject matter hereof, and all other
understandings, written or oral, are hereby merged herein and
superseded. No amendment of or supplement to this Guaranty Agreement,
or waiver or modification of, or consent under, the terms hereof shall
be effective unless in writing and signed by the Guarantor, the
Indenture Trustee, the Lessor, and each Certificateholder; provided,
however, that the provisions of Section 9 hereof may be amended or
waived if such amendment or waiver is in writing and signed by the
Guarantor, the Indenture Trustee, the Lessor, and Certificateholders
constituting a Majority in Interest of the Certificateholders.
16. TERM OF GUARANTY AGREEMENT. Subject to Section 6, this Guaranty
Agreement and all guarantees, covenants and agreements of the Guarantor
contained herein shall continue in full force and effect and shall not
be discharged until such time as all of the Guaranteed Obligations
shall be paid or otherwise discharged in full.
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17. SURVIVAL. All warranties, representations and covenants made by the
Guarantor herein or in any certificate or other instrument delivered by
it or on its behalf under this Guaranty Agreement shall be considered
to have been relied upon by each Beneficiary and shall survive the
execution and delivery of this Guaranty Agreement, regardless of any
investigation made by any Beneficiary or on its behalf.
18. FURTHER ASSURANCES. The Guarantor hereby agrees to execute and deliver
all such instruments and take all such action as the Lessor may from
time to time reasonably request in order to effectuate fully the
purposes of this Guaranty Agreement.
19. GOVERNING LAW. This Guaranty Agreement has been executed and delivered
in the State of New York and shall be governed by, construed and
enforced in all respects in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely
therein, without regard to principles of conflicts of laws.
20. SUBMISSION TO JURISDICTION. The Guarantor hereby irrevocably submits
itself to the nonexclusive jurisdiction of the Supreme Court of the State
of New York, New York County, of the United States of America and to the
jurisdiction of the United States District Court for the Southern District
of New York, for the purpose of any suit, action or other proceeding
arising out of, or relating to, this Guaranty Agreement or the subject
matter hereof, and hereby waives, and agrees not to assert, by way of
motion, as a defense or otherwise, in any such suit, action or proceedings,
(i) any claim that it is not personally subject to the jurisdiction of
the above-named courts for any reason whatsoever, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of
such suit, action or proceeding is improper and (ii) any right which it
may have to a trial by a jury.
The Guarantor hereby agrees that the submission to jurisdiction
referred to in this Section 20 shall not limit in any manner the
rights of any of the Certificateholders to take proceedings
against the Guarantor in some other court of competent jurisdiction
whether within or outside the United States.
21. REPLACEMENT OF GUARANTOR. If no Lease Default, Lease Event of Default
or Event of Default shall exist at the time of either such request or
such release, then following the written request of the Guarantor to
the Indenture Trustee and the Certificateholders at least thirty (30)
days prior to the requested date on which the Guarantor is to be
released from its obligations under this Guaranty Agreement, the
Guarantor shall be released from further liability under this Guaranty
Agreement upon its being replaced by a Replacement Guarantor that
satisfies all the conditions contained in the definition of such term
set forth in Section 22.
22. DEFINITIONS. As used herein, the terms listed below shall have the
definitions specified below. Capitalized terms used but not otherwise
defined in this Guaranty Agreement shall have the meanings ascribed to
such terms in the Lease.
"Acceptable Debt Ratings" shall mean, with respect to any
Person, that such Person has a Debt Rating
17
issued by Moody's of at least Baa3 or better and a Debt Rating from
Standard & Poor's of at least BBB-. If any of the foregoing rating
categories used by Moody's or Standard & Poor's is revised or designated
differently (such as by changing letter designations to different letter
designations or to numerical designations), then the references herein to
such rating shall be changed to the revised or redesignated rating for
which the standards are closest to, but not lower than, the standards at
the date hereof for the rating which has been revised or redesignated. If
either(but not both) of Moody's or Standard & Poor's (including their
respective successors) shall cease to exist or shall cease to issue
Debt Ratings generally, then "Acceptable Debt Ratings" shall consist
solely of the above-required Debt Rating issued by whichever of Moody's
and Standard & Poor's shall remain in existence or shall continue to
issue Debt Ratings generally, as the case may be.
"Debt Rating" shall mean, with respect to any Person, the
rating applicable to such Person's senior, unsecured non-credit
enhanced long-term indebtedness for borrowed money issued by Standard &
Poor's or Moody's, as applicable. A Debt Rating, whether public or
private, issued by Standard & Poor's or Moody's shall be deemed to be
in effect on the date of announcement or publication by Standard &
Poor's or Moody's, as the case may be, of such Debt Rating or, in the
absence of such announcement or publication, on the effective date of
such Debt Rating and will remain in effect until the date when any
change in such Debt Rating is deemed to be in effect.
"Event of Default" shall have the meaning specified in the
Indenture.
"Issuing Bank" shall mean the bank that issues a Qualified
Letter of Credit.
"Majority in Interest of the Certificateholders" shall mean
the "Majority in Interest of the Holders" as such term is defined in
the Declaration of Trust.
"Material Subsidiary" shall mean any Subsidiary of the
Guarantor which (i) has contributed more than 5% of the Guarantor's
consolidated net income (calculated in accordance with GAAP) for the
fiscal year then most recently ended or (ii) owns assets which
constitute more than 5% of the Guarantor's consolidated assets
(calculated in accordance with GAAP) as of the last day of the fiscal
year most recently ended.
"Ratings Decline" shall mean the existence or occurrence of
any of the following events: (i) the Guarantor shall cease to have
Acceptable Debt Ratings; or (ii) either Moody's or Standard & Poor's ,
or both, shall not have in effect a Debt Rating with respect to the
Guarantor for any reason whatsoever except the failure of either, but
not both, of Moody's and Standard & Poor's (including their successors)
to continue in existence or to issue Debt Ratings generally, as the
case may be; provided, that, neither the existence nor the occurrence
of the foregoing events shall cause a Ratings Decline if (x) the Parent
Guaranty Agreement or a Replacement Parent Guaranty is in full force
and effect and enforceable against the Parent or the applicable
Replacement Parent Guarantor, as the case may be, in accordance with
its terms, and (y) the Parent or the applicable Replacement Parent
Guarantor, as the case may be, has Acceptable Debt Ratings.
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"Replacement Guarantor" shall mean a Person that satisfies the
requirements set forth in clauses (i), (ii) (which requirement shall be
satisfied by the execution and delivery by such Person of a guaranty
agreement that is in form identical to this Guaranty Agreement, with
appropriate references revised to reflect the identity and form of
business organization of such Person), (iv), (v)(A), (vi) and (vii) of
Section 9(b) of this Guaranty Agreement, recognizing that such Person
is to replace the Guarantor hereunder as the result of a transaction
that is not subject to such Section but is instead subject to Section
21; provided, that no Person may be both a Replacement Guarantor
hereunder and a Replacement Parent Guarantor pursuant to Section 21 of
the Parent Guaranty Agreement.
"Replacement Parent Guarantor" shall mean Replacement
Guarantor (as defined in Section 22 of the Parent Guaranty Agreement).
"Replacement Parent Guaranty" shall mean a guaranty agreement
delivered in replacement and substitution for the Parent Guaranty
Agreement in accordance with Section 21 thereof.
"Secured Notes" shall have the meaning given to such term in
the Indenture.
"Solvent" shall mean, when used with respect to any Person,
means that, as of any date of determination, (a) the amount of the
"fair value" or "present fair saleable value" of the assets of such
Person (on a going-concern basis) will, as of such date, exceed the
amount of all "liabilities of such Person, contingent or otherwise," as
of such date, as such quoted terms are determined in accordance with
applicable federal and state laws governing determinations of the
insolvency of debtors, (b) such fair value or present fair saleable
value of the assets of such Person (on a going-concern basis) will, as
of such date, be greater than the amount that will be required to pay
the liability of such Person on its debts as such debts become absolute
and matured, (c) such Person will not have, as of such date, an
unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they
mature. For purposes of this definition, (i) "debt" means liability on
a "claim," (ii) "claim" means any (x) right to payment, whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or
not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or
unsecured and (iii) unliquidated, contingent, disputed and unmatured
claims shall be valued at the amount that can be reasonably expected to
be actual and matured.
"Subsidiary" shall mean (i) any corporation, at least 50% of
the total combined voting power of all classes of Voting Stock of which
shall, at the time as of which any determination is being made, be
owned by the Guarantor, either directly or through Subsidiaries, and
(ii) any partnership, joint venture or similar entity if at least a 50%
interest in the profits or capital thereof is owned by the Guarantor,
either directly or through Subsidiaries (unless such entity can and
does ordinarily take major business actions without the prior approval,
direct or indirect, of the Guarantor).
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"Surviving Entity" shall have the meaning specified in Section
9(b)(i) of this Guaranty Agreement.
"Trust Certificates" shall mean the "Certificates" as such
term is defined in the Declaration of Trust.
"Voting Stock" shall mean, with respect to any corporation,
any shares of stock of such corporation whose holders are entitled
under ordinary circumstances to vote for the election of directors of
such corporation (irrespective of whether at the time stock of any
other class or classes shall have or might have voting power by reason
of the happening of any contingency).
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IN WITNESS WHEREOF, the Guarantor has caused this Additional Guaranty
Agreement to be duly executed and delivered as of the date and year first above
written.
TXU ENERGY COMPANY LLC
By: /s/Kirk R. Oliver
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Title: Treasurer and Assistant Secretary
By: /s/Anthony Horton
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Title: Assistant Treasurer
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