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If CAPP and Seller each meet their respective obligations under the PPA, the security provisions related to the Seller's obligations under the PPA should not be an issue, other than security to CAPP for Seller's future perform.ance under the PPA. The security for the Seller's obligations under the PPA becomes critically, important if Seller fails to perform under the PPA or otherwise defaults under the PPA. Article 9 of the PPA addresses the security for Seller's obligations under the PPA and reference is made to that article. Within Section 9.2 of the PPA, Seller may, in certain circumstances, substitute the pledged collateral with other collateral such as letters of credit, cash or a guaranty from an investment grade rated guarantor ("Substitute Collateral"). Additionally, Section 9.2 of the PPA provides for Seller to refinance the existing LBO Financing Documents and replace the existing collateral pursuant to a new financing package with new collateral ("New Collateral Refinancing") which permits some dilution from value of the security under the LBO Financing Documents existing immediately prior to such refinancing, and which provides CAPP with a first lien on equal footing with other lenders (subject to other liens which may be permitted by the documents related to the New Collateral Refinancing). Seller's Financial Strewth and Resources through the Term ofthe PPA Fundamental to any decision to participate in the transactions contemplated in the PPA and the Member Contract is the financial viability of Seller and the TCEH Pledged Entities over the term of the PPA. While Seller's obligations under the PPA are secured by a first lien security interest in certain assets of the TCEH Pledged Entities, Seller's ability to meet its obligations under the PPA are dependent on its financial resources and viability to perform (as well as its willingness to do so). No assurances can be given regarding the financial strength or viability of Seller, TCEH or the other TCEH Pledged Entities or the ability of such entities to meet their obligations with respect to the PPA and the LBO Financing Documents. Limitation ofRemedies; Damages Available under the PPA The PPA does not provide for the agreement to be enforced by specific performance against either party thereto (i.e., a court directing (i) Seller to meet their obligations to provide electric energy and capacity under the terms of the agreement or (ii) CAPP to accept and pay for electric energy under the terms of the agreement). To the extent a default is declared and such default is not cured, Seller and CAPP have limited remedies. It should be noted that if Seller fails to schedule energy for CAPP from the PPA Facilities when such facilities are available or to otherwise provide alternate energy, Seller is required to pay CAPP "liquidated damages" equal to the cost of any replacement energy acquired by CAPP to replace the electric energy withheld by Seller less the energy price as provided in the PPA ("Replacement Damages"); provided, however, Seller's withholding energy, for extended or repeated occasions, is a default under the PPA and CAPP may terminate the PPA in such an event. 4 .m U000iAL,