Exhibit 10(a)
Atmos Energy Corporation
LSG Acquisition Corporation
Three Lincoln Center, Suite 1800
Xxxxxx, Xxxxx 00000
ATTN: J. Xxxxxxx Xxxxx
GUARANTY
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WHEREAS, TXU GAS COMPANY, LP, a Texas Limited Partnership ("TXU Gas")
and LSG Acquisition Corporation ("LSG"), a Texas corporation, are parties to
that certain Agreement and Plan of Merger, as amended, dated as of June 17, 2004
(the "Agreement"); and
WHEREAS, the execution and delivery of this Guaranty is required by the
Agreement and the transactions contemplated by the Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, TXU Corp., a Texas Corporation
(the "Guarantor") hereby irrevocably and unconditionally guarantees to LSG, as
primary obligor and not merely as surety, the full and prompt payment of the
Guaranteed Obligations (hereinafter defined) upon the following terms:
1. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Agreement. The term "Guaranteed
Obligations," as used herein, means (i) all payment obligations ("Obligations")
of TXU Gas to LSG now existing or hereafter arising in connection with the
Agreement, including (without limitation) the indemnity obligations set forth in
Article IX of the Agreement, (ii) interest, if any, on such Guaranteed
Obligations, and (iii) any and all expenses (including reasonable attorneys'
fees) reasonably incurred by LSG or Atmos Energy Corporation, a Texas and
Virginia corporation ("LSG Parent") in enforcing its rights under this Guaranty.
2. The liability of the Guarantor under this Guaranty with respect to the
aggregate principal amount of Guaranteed Obligations shall not exceed
$1,925,000,000 (U.S. Dollars); provided, however, in no event shall Guaranteed
Obligations relating to (i) TXU Gas Excluded Assets exceed $500,000,000 (U.S.
Dollars) or; (ii) TXU Gas Retained Liabilities identified in Paragraphs (iv) and
(v) of the definition of TXU Gas Retained Liability set forth in the Agreement
exceed $1,400,000,000 (U.S. Dollars). The term of this Guaranty shall be limited
to a period of ten (10) years from the date hereof with respect to Guaranteed
Obligations relating to TXU Gas Retained Liabilities. No notice, demand or claim
hereunder may be made after the expiration of such period. Notices, demands or
claims made hereunder prior to such expiration shall not release Guarantor from
liability for such Guaranteed Obligations for which a notice, demand or claim
has been made prior to expiration.
3. This instrument shall be an absolute, continuing, irrevocable and
unconditional guaranty of full and prompt payment and not a guaranty of
collection, and the Guarantor shall remain liable on its indebtedness,
liabilities and obligations hereunder until the payment in full of the
Guaranteed Obligations. No set-off, counterclaim, recoupment, reduction or
diminution of any indebtedness, liability or obligation, or any defense of any
kind or nature which TXU Gas may have against LSG, LSG Parent or any other
party, shall, to the extent permitted by applicable law, be available to, or
asserted by, the Guarantor against LSG.
4. The liability of the Guarantor under this Guaranty shall be
unconditional irrespective of:
(a) any lack of enforceability of any Guaranteed Obligations,
including any defense based upon or arising by reason of any lack of authority
of any officer, director or any other person acting or purporting to act on
behalf of TXU Gas;
(b) any change of the time, manner or place of payment, or any other
term, of any Obligations;
(c) any law, regulation or order of any jurisdiction affecting any
term of any Obligations or LSG's rights with respect thereto;
(d) the insolvency, receivership, reorganization or bankruptcy of
TXU Gas;
(e) the merger or consolidation of TXU Gas with or into another entity
(including, without limitation, the Guarantor), the loss of TXU Gas' separate
legal identity or the cessation of TXU Gas' existence;
(f) any disability of TXU Gas, or the dissolution, insolvency or
bankruptcy of TXU Gas, the Guarantor or any other party at any time liable for
the payment of any or all of the Guaranteed Obligations;
(g) any renewal, extension, modification, waiver, amendment or
rearrangement of any or all of the Guaranteed Obligations or any instrument,
document or agreement evidencing, securing or otherwise relating to any or all
of the Guaranteed Obligations;
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(h) any adjustment, indulgence, forbearance, waiver or compromise
that may be granted or given by LSG, the Guarantor or any other party ever
liable for any or all of the Guaranteed Obligations;
(i) any neglect, delay, omission, failure or refusal of LSG to take
or prosecute any action for the collection of any of the Guaranteed Obligations
or to foreclose or take or prosecute any action in connection with any
instrument, document, or agreement evidencing, securing or otherwise relating
to any or all of the Guaranteed Obligations;
(j) any payment by TXU Gas to LSG is held to constitute a preference
or fraudulent transfer or conveyance under any applicable bankruptcy or
insolvency law or if for any other reason TXU Gas is required to refund any
payment or pay the amount thereof to someone else;
(k) the settlement or compromise of any of the Guaranteed Obligations;
(l) the non-perfection of any security interest or lien securing any
or all of the Guaranteed Obligations;
(m) any change in the limited partnership or other entity existence,
structure or ownership of TXU Gas; or
(n) any other circumstance which might otherwise constitute a defense
available to, or discharge of, TXU Gas or the Guarantor (other than a defense
of payment or a defense expressly provided in the Agreement).
This guarantee shall be effective or be reinstated, as the case may be, if at
any time any payment or performance of the obligations under this Guaranty is
rescinded or must otherwise be returned by LSG upon the insolvency, bankruptcy
or reorganization of TXU Gas or Guarantor or otherwise.
Upon indefeasible payment in full of the Guaranteed Obligations owing to LSG,
Guarantor shall be subrogated to the rights of LSG against TXU Gas, and LSG
agrees to take such steps as Guarantor may reasonably request to implement such
subrogation. However, Guarantor may not exercise any right of subrogation until
the Guaranteed Obligations are paid in full.
5. No failure or delay on the part of LSG to exercise, and no delay in
exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by LSG of any right, remedy or
power hereunder preclude any other or future exercise of any right, remedy or
power hereunder. Each and every right, remedy and power hereby granted to LSG or
allowed it by law or other agreement shall be cumulative and not exclusive of
any other, and may be exercised by LSG from time to time.
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6. All notices or other communications given or required to be given
hereunder shall be in writing at the addresses below either by certified mail
with return receipt requested, in person, or by overnight courier service, each
of which shall be effective upon receipt.
The Guarantor's address for notices is as follows:
TXU Corp.
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
ATTN: Treasurer
LSG's address for notices is as follows:
Atmos Energy Corporation
Three Lincoln Centre, Suite 1800
Xxxxxx, Xxxxx 00000
ATTN: J. Xxxxxxx Xxxxx
Guarantor and LSG may change its address for notices by giving notice to the
other party in accordance with the provisions stated above.
7. Guarantor represents and warrants that:
(a) it is a corporation, duly organized, validly existing and in good
standing under the laws of the State of Texas and has full corporate power and
authority to carry on the business in which it is engaged and to execute,
deliver and perform this Guaranty;
(b) it has the corporate power and authority to execute, deliver and
perform its Obligations under this Guaranty;
(c) the execution, delivery, and performance of this Guaranty have
been and remain duly and validly authorized by all necessary corporate action
and do not conflict or result in a violation or breach of the articles of
incorporation or by-laws of Guarantor;
(d) this Guaranty and the Obligations constitute legal, valid and
binding obligations of Guarantor, enforceable against it in accordance with
their terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or equity); and
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(e) none of the execution and delivery of this Guaranty, or the
consummation of the transaction contemplated hereby or thereby will violate or
conflict with, or result in the acceleration of rights, benefits or payments
under:
(i) any provision of the Guarantor's constituent documents;
(ii) any statute, law, regulation or governmental order to which
Guarantor or the assets and properties of any thereof are bound or subject;
(iii) any commitment to which Guarantor is a party or by which it or
any of its properties may be bound or subject; and
(iv) any agreement, contract or commitment of Guarantor to which it
is a party or by which it or any of its properties may be bound or subject.
8. No amendment or waiver of any provision of this Guaranty or consent to
any departure by the Guarantor therefrom shall in any event be effective unless
the same shall be in writing and signed by LSG except as otherwise provided in
the Agreement.
9. This Guaranty is for the benefit of LSG and, from and after the time
LSG merges into LSG Parent , LSG Parent and their respective successors and
assigns, and in the event of an assignment of the Guaranteed Obligations, or any
part thereof, and the rights and benefits hereunder may be transferred by
TXU Gas. This Guaranty is binding not only on the Guarantor, but on the
Guarantor's successors and assigns. The Guarantor may not assign its rights,
interest or obligations hereunder to any other person without the prior written
consent of LSG, which consent shall not be unreasonably withheld or delayed,
and any purported assignment absent such consent is void.
10. The Guarantor shall pay on demand all reasonable attorneys' fees and
all other reasonable costs and expenses incurred by LSG in connection with the
enforcement or collection of this Guaranty.
11. The Guarantor hereby waives promptness, diligence, notice of any
default under the Guaranteed Obligations, demand of payment, notice of
acceptance of this Guaranty, presentment, notice of protest, notice of dishonor,
notice of the incurring by TXU Gas of additional obligations and all other
notices and demands with respect to the Guaranteed Obligations and this
Guaranty.
12. The Guarantor agrees that LSG may exercise, or fail or refuse to
exercise, any and all rights and remedies granted to any of them under the
Agreement without affecting the validity or enforceability of this Guaranty.
The Guarantor hereby waives the right to require LSG to proceed against TXU Gas
on the Guaranteed Obligations.
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13. THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF THE GUARANTOR
AND LSG WITH RESPECT TO THE GUARANTOR'S GUARANTY OF THE GUARANTEED OBLIGATIONS
AND SUPERCEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDING, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF.
THIS GUARANTY IS INTENDED BY THE GUARANTOR AND LSG AS A FINAL AND COMPLETE
EXPRESSION OF THE TERMS OF THIS GUARANTY, AND NO COURSE OF DEALING BETWEEN OR
AMONG THE GUARANTOR AND LSG, NO COURSE OF PERFORMANCE, NO TRADE PRACTICES AND NO
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE USED TO CONTRADICT, VARY,
SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY. THERE ARE NO ORAL AGREEMENTS
BETWEEN OR AMONG (A) THE GUARANTOR AND (B) LSG.
14. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. VENUE FOR ANY ACTION ARISING FROM THIS AGREEMENT IS PROPER ONLY IF
FILED IN DALLAS COUNTY, TEXAS. EACH PARTY SUBMITS TO THE JURISDICTION OF COURTS
IN DALLAS COUNTY, TEXAS, WITHOUT WAIVING THE RIGHT TO REMOVE TO FEDERAL COURT IN
DALLAS COUNTY IF REMOVAL IS OTHERWISE PROPER.
IN WITNESS WHEREOF, the Guarantor has caused two duly authorized
representatives to execute and deliver this Guaranty.
GUARANTOR:
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TXU Corp.
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: Senior Vice President, Treasurer
and Assistant Secretary
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