EXECUTION COPY
ASSIGNMENT, ASSUMPTION AND WAIVER AGREEMENT
ASSIGNMENT, ASSUMPTION AND WAIVER AGREEMENT (this "Agreement"), dated
as of December 19, 2002, between UXT Holdings LLC, UXT Intermediary LLC (each an
"Assignor" and collectively, the "Assignors"), the Purchasers listed on the
signature page hereto (each an "Assignee" and collectively, the "Assignees"),
TXU Corp., TXU Energy Company LLC (the "TXU Entities") and, solely with respect
to Sections 9, 10(b) and 12 of this Agreement, Berkshire Hathaway Inc. (the
"Purchaser Parent").
W I T N E S S E T H
WHEREAS, the Assignors are selling to the Assignees $250 million
aggregate principal amount (the "Purchased Notes") of 9% Exchangeable
Subordinated Notes Due 2012 of TXU Energy Company LLC (the "Notes") pursuant to
a purchase agreement, dated as of the date hereof, among the Assignors and
Assignees (the "Purchase Agreement").
WHEREAS, as a condition to such purchase, the Assignees have requested
that the Assignors assign and transfer to the Assignees any and all rights the
Assignors may have under the Purchase Agreement dated as of November 18, 2002
among the TXU Entities and the Assignors (the "Original Purchase Agreement"),
the Registration Rights Agreement dated November 22, 2002 among TXU Corp. and
the Assignors, as amended (the "Registration Rights Agreement"), and the
Exchange Agreement dated as of November 22, 2002 among the TXU Entities and the
Assignors (the "Exchange Agreement"), in each case with respect to the Purchased
Notes.
WHEREAS, the Assignees desire to accept such assignment, and in
consideration thereof, assume the obligations of the Assignors under the
Original Purchase Agreement, the Registration Rights Agreement and the Exchange
Agreement with respect to the Purchased Notes.
WHEREAS, the TXU Entities have agreed to such assignment.
WHEREAS, as a condition to their consent to such assignment, the TXU
Entities have requested the Assignors, the Assignees and the Purchaser Parent to
make certain representations and agree to certain covenants.
NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Any or all capitalized terms not defined in this Agreement shall
have the meanings as set forth in the Purchase Agreement, the Original Purchase
Agreement, the Registration Rights Agreement, the Exchange Agreement or the
Notes, as applicable.
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2. Except as otherwise provided in the Purchase Agreement or in this
Agreement, the Assignors hereby assign, transfer, convey and deliver to the
Assignees any and all rights the Assignors may have under and in accordance with
each of the Original Purchase Agreement, the Registration Rights Agreement and
the Exchange Agreement (other than Section 6 thereof) with respect to the
Purchased Notes; provided, however, that no such assignment shall otherwise
affect the Assignors rights with respect to any Notes retained by Assignors.
3. The Assignees accept the said assignment by the Assignors and hereby
assume and agree to perform and discharge, as and when they become due, the
duties and obligations of the Assignors under and in accordance with each of the
Original Purchase Agreement, including but not limited to Sections 5.06 and 5.07
of the Original Purchase Agreement, the Registration Rights Agreement and the
Exchange Agreement (other than Section 6 thereof) with respect to the Purchased
Notes; provided, however, that the Assignees shall not assume any of the
Assignors' obligations with respect to any Notes retained by Assignors.
4. The Assignors and the Assignees hereby agree to take any and all
actions as may be necessary or appropriate to more fully effectuate the
assignment of rights and assumption of obligations hereunder.
5. The TXU Entities hereby agree to the assignment of the rights,
benefits and obligations under the Original Purchase Agreement, the Registration
Rights Agreement and the Exchange Agreement (other than Section 6 thereof) to
the Assignees with respect to the Purchased Notes, including for purposes of
Section 9.05 of the Original Purchase Agreement and Section 15(e) of the
Registration Rights Agreement, and hereby agree that, except as provided in the
Purchase Agreement or in this Agreement, the Assignees shall have all of the
rights of a Purchaser under the Original Purchase Agreement, a Holder under the
Registration Rights Agreement and a Purchaser under the Exchange Agreement, in
each case with respect to the Purchased Notes.
6. The TXU Entities acknowledge that one or more of the Purchasers may
be deemed to be a Competitor as defined in the Purchased Notes. The TXU Entities
hereby agree to waive the provisions of Section 6.01 of the Purchased Notes (and
any corresponding provisions of any preferred membership interest of TXU Energy
Company LLC into which the Notes are exchanged) with respect to the Assignees
and their Affiliates, but not with respect to MidAmerican Energy Holdings
Company or any of its subsidiaries or any other Affiliate of the Purchaser
Parent that is significantly involved in the generation of electricity,
wholesale energy trading, retail energy marketing or energy delivery or any
holding company of such Affiliate that primarily owns entities engaged in such
businesses (collectively, the "Restricted Persons"), in order to permit the
Transfer of the Purchased Notes to the Assignees; provided, however, that the
TXU Entities do not hereby waive the provisions of such Section 6.01 (or any
corresponding provisions of any such preferred membership interest) with respect
to any future Transfers of the Notes or the Purchased Notes (or any such
preferred membership interest), other than to Affiliates of the Assignees who
are not Restricted Persons and who agree to be bound by the provisions of the
Purchase Agreement and this Agreement.
7. The Assignees acknowledge the existence of, and agree to be bound by
and comply with, the restrictions on Transfer contained in Section 6.01 of the
Notes; provided,
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however, that such restrictions shall not apply to any Transfer by the Assignees
of the Purchased Notes (or any preferred membership interest of TXU Energy
Company LLC into which the Notes are exchanged) to one or more of their
Affiliates who are not Restricted Persons and who agree to be bound by the
provisions of the Purchase Agreement and this Agreement.
8. The TXU Entities hereby agree to waive the $10,000,000 minimum
transfer amount contained in Section 6.04 of the Notes for the purposes of the
Transfer of the Notes from the Assignors to the Assignees.
9. The Assignees and the Purchaser Parent (other than with respect to
entities Controlled by it which exercise investment discretion independent of
the Purchaser Parent) hereby agree to, and the Purchaser Parent agrees to cause,
to the extent it has the ability to do so, its Affiliates (other than those
Affiliates, and other than with respect to entities Controlled by Affiliates,
exercising investment discretion independent of the Purchaser Parent, but
otherwise including portfolio companies, if any, of the Assignees and the
Purchaser Parent) to, be bound by and comply with the provisions contained in
both Sections 9, 10(a) and 10(d)(ii) of the Exchange Agreement and Sections 12,
15(a) and 15(e)(iii) of the Registration Rights Agreement as if such Assignees
and the Purchaser Parent were "DLJ Entities" until such time as the Assignees
and their Affiliates, as a group, own Notes and Common Stock aggregating less
than $75,000,000 in aggregate principal amount (determined, in the case of
Common Stock, on the basis of the Note Exercise Price at the date the Exchange
Rights are exercised with respect to such Common Stock).
10. (a) The Assignees acknowledge that none of the rights granted to
the DLJ VCOC Fund pursuant to Sections 3.08 and 3.09 of the Notes and Section 6
of the Exchange Agreement are being assigned to the Assignees and that, without
the consent of the appropriate TXU Entity, they will not be entitled to exercise
any of such rights.
(b) The Assignees, the Purchaser Parent and the Assignors represent
and warrant to the TXU Entities that there does not exist, and they agree
that they will not enter into or otherwise be a party to, any voting
agreement, voting trust, shareholders agreement, proxy or any other written
or oral agreement, arrangement or understanding among the Assignees or any
of their Affiliates on the one hand and the Assignor or any of its
Affiliates on the other hand regarding the voting of or exercise of rights
under the TXU Common Stock, the Notes (or any preferred membership interest
of TXU Energy Company LLC into which the Notes are exchanged), the Exchange
Agreement or the Registration Rights Agreement; provided, however, that the
foregoing shall not prohibit the Assignees, the Assignors and their
respective Affiliates from exercising their respective rights under the
Original Purchase Agreement, the Notes, the Exchange Agreement or the
Registration Rights Agreement, or from consulting with each other in
connection with the exercise of such rights other than (i) the rights
granted to the DLJ VCOC Fund pursuant to Sections 3.08 and 3.09 of the
Notes and Section 6 of the Exchange Agreement and (ii) the rights granted
to Holders of the Notes (other than the Assignees) and the DLJ VCOC Fund to
request information pursuant to Section 3.02 (a)(vi) of the Notes.
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11. The Assignees hereby waive their right to request or receive
confidential or non-public information regarding the TXU Entities, including,
but not limited to, pursuant to Section 3.02(a)(iii) or (vi) of the Notes;
provided, however, that any transferee of the Assignees other than an Affiliate
of the Assignees, will not be bound by this provision.
12. The Assignees and the Purchaser Parent represent and warrant to the
Assignors and the TXU Entities that they do not own and control, and agree that
they will not acquire ownership and control of, installed generation capacity
within the Electric Reliability Council of Texas ("ERCOT") in an amount that
would cause either TXU Entity (by virtue of Section 39.154(c) of the Texas
Utility Code) to be deemed to own and control more than 20% of the installed
generation capacity located in ERCOT in violation of Section 39.154 of the Texas
Utility Code and the Substantive Rules of the Public Utility Commission of
Texas.
13. Subject to its legal obligations (including requirements of stock
exchanges and other similar regulatory bodies and other than as may be required
pursuant to the Exchange Act), no party shall make any public announcement
regarding the entering into of this Agreement or the Closing without the prior
consent of the other party, which shall not be unreasonably withheld.
Notwithstanding the foregoing, upon the Closing the parties shall cooperate with
each other to make a public announcement of the transaction and shall agree as
to the timing and contents of any such announcement.
14. (a) The Assignees have independently and without reliance upon the
TXU Entities, and based on such information as the Assignees have deemed
appropriate, made their own analysis and decision to purchase the Notes;
provided, however, that the foregoing shall not limit any rights the Assignees
might have under the Purchase Agreement or the Original Purchase Agreement.
(b) The TXU Entities have not been requested to, and the Assignees
have not relied and will not rely on the TXU Entities to, furnish or make
available any documents or other information regarding the credit, affairs,
financial condition or business of, or any other matter concerning the TXU
Entities.
(c) The Assignees acknowledge that: (i) the TXU Entities are not
making any representations and warranties to the Assignees regarding their
business, assets or financial condition as of the date hereof; (ii) there may
currently exist information with respect to the Notes or the TXU Entities that
is not known to the Assignees and that may be material to a decision to acquire
the Notes (the "Excluded Information"); (iii) the Assignees have determined to
purchase the Notes notwithstanding their lack of knowledge of the Excluded
Information; and (iii) the TXU Entities shall have no liability to the
Assignees, and the Assignees waive and release any claims that they might have
against the TXU Entities, whether under applicable securities laws or otherwise,
with respect to the nondisclosure of the Excluded Information in connection with
the purchase of the Purchased Notes by the Assignees, but only to the extent
that the Excluded Information does not affect the truth or accuracy of the
representations or warranties of the TXU Entities in the Original Purchase
Agreement as of the date of the Original Purchase Agreement.
15. The execution, delivery and performance by the Assignees of the
Purchase Agreement and this Agreement does not and will not (a) violate,
conflict with or result in the
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breach of any provision of the organizational documents of the Assignees, (b)
conflict with or violate any Law or Governmental Order applicable to the
Assignees or (c) conflict with, or result in any breach of, constitute a default
(or event which with the giving of notice or lapse of time, or both, would
become a default) under, require any consent under, or give to others any rights
of termination, amendment, acceleration, suspension, revocation or cancellation
of, any note, bond, mortgage or indenture, contract, agreement, lease, sublease,
license, permit, franchise or other instrument or arrangement to which the
Assignees are a party, which would adversely affect the ability of the Assignees
to carry out their obligations under, and to consummate the transactions
contemplated by, this Agreement.
16. The execution, delivery and performance of the Purchase Agreement
and this Agreement by the Assignees does not and will not require any consent,
approval, authorization or other order of, action by, filing with or
notification to any Governmental Authority.
17. This Agreement shall be binding on and inure to the benefit of the
Assignors, the Assignees and the TXU Entities and their respective successors
and assigns.
18. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
[Signatures appear on next page]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.
UXT HOLDINGS LLC
By: DLJ Merchant Banking III, Inc.,
its managing member
By:
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Name:
Title:
UXT INTERMEDIARY LLC
By: UXT AIV, L.P.
its managing member
By: DLJ Merchant Banking III, Inc.
as managing general partner
By:
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Name:
Title:
BERKSHIRE HATHAWAY INC.
By:
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Name:
Title:
XXXXXXXX XXXXX PENSION
By:
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Name:
Title:
THE BUFFALO NEWS OFFICE PENSION PLAN
By:
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Name:
Title:
THE BUFFALO NEWS EDITORIAL PENSION PLAN
By:
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Name:
Title:
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CORNHUSKER CASUALTY COMPANY
By:
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Name:
Title:
FLIGHTSAFETY INTERNATIONAL INC.
RETIREMENT INCOME PLAN
By:
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Name:
Title:
FRUIT OF THE LOOM PENSION TRUST
By:
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Name:
Title:
GEICO CORPORATION PENSION PLAN TRUST
By:
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Name:
Title:
GOVERNMENT EMPLOYEES INSURANCE COMPANY
By:
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Name:
Title:
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XXXXX XXXXXXXX CORPORATION MASTER
PENSION TRUST
By:
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Name:
Title:
XXXXXX BRANDS, INC. UNION PENSION PLAN
AND XXXXXX BRANDS, INC.
PENSION PLAN & TRUST
By:
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Name:
Title:
ACME BRICK COMPANY PENSION TRUST
By:
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Name:
Title:
XXXXX XXXXXX COMPANY COLLECTIVE
INVESTMENT TRUST
By:
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Name:
Title:
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TXU CORP.
By:
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Name:
Title:
TXU ENERGY COMPANY LLC
By:
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Name:
Title:
