EXHIBIT 10.2
SETTLEMENT AGREEMENT
This Settlement Agreement (this "AGREEMENT"), dated as of the 8th day
of October 2002, is by and among EOTT Energy Partners, L.P., a Delaware limited
partnership, EOTT Energy Corp., a Delaware corporation, EOTT Energy General
Partner, LLC, a Delaware limited liability company, EOTT Energy Pipeline Limited
Partnership, a Delaware limited partnership, EOTT Energy Operating Limited
Partnership, a Delaware limited partnership, EOTT Energy Canada Limited
Partnership, a Delaware limited partnership, EOTT Energy Liquids, L.P., a
Delaware limited partnership, EOTT Energy Finance Corp., a Delaware corporation,
and EOTT Canada Ltd., an Alberta corporation (collectively, the "EOTT PARTIES"),
on the one hand, and Enron Corp., an Oregon corporation and as
debtor-in-possession, Enron North America Corp., a Delaware corporation and as
debtor-in-possession, Enron Energy Services, Inc., a Delaware corporation and as
debtor-in-possession, Enron Pipeline Services Company, a Delaware corporation,
EGP Fuels Company, a Delaware corporation, and Enron Gas Liquids, Inc., a
Delaware corporation and as debtor-in-possession (collectively, the "ENRON
PARTIES"), on the other. The EOTT Parties and the Enron Parties are collectively
referred to herein as the "PARTIES".
RECITALS
WHEREAS, the Parties have certain claims against and certain disputes
exist among one another;
WHEREAS, Enron Corp., Enron North America Corp., Enron Energy Services,
Inc. and Enron Gas Liquids, Inc. are debtors in chapter 11 cases, styled In re
Enron Corp., et al., Case No. 01-16034 (AJG) (Chapter 11) (the "ENRON CHAPTER 11
CASES"), pending in the United States Bankruptcy Court for the Southern District
of New York (the "ENRON BANKRUPTCY COURT");
WHEREAS, certain of the EOTT Parties intend to file for protection
under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court
for the Southern District of Texas; and
WHEREAS, following extensive, arms' length and good faith negotiations,
the Parties desire to compromise and settle such claims and disputes as set
forth in this Agreement, and the Parties intend that the full terms and
conditions of their compromise and settlement be set forth in this Agreement;
NOW, THEREFORE, in consideration of the recitals, covenants, releases,
and agreements contained herein, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Parties hereby
agree as follows:
AGREEMENT AND RELEASES
1. Definitions.
"Agreed Payments" means the rights of the Parties to payment pursuant
to paragraph B of the Stipulation.
"Agreement" has the meaning assigned to such term in the Recitals.
"Approval Date" means the date on which both the Final EOTT Order shall
have been entered in the EOTT Bankruptcy Court and the Final Enron Order shall
have been entered in the Enron Bankruptcy Court.
"Assumed Obligations" has the meaning assigned to such term in Section
11 hereof.
"Bankruptcy Code" means title 11 of the United States Code, as amended.
"Business Day" means a day other than a Saturday, Sunday or such other
day on which commercial banks in Houston, Texas are authorized or required by
law to close.
"Cash Payment" has the meaning assigned to such term in Section 5
hereof.
"Claims" has the meaning assigned to such term in Section 8(a) hereof.
"Closing Date" shall mean (i) the later of (a) the second Business Day
following the Approval Date and (b) the Effective Date (as such term is defined
under the Employee Transition Agreement) or (ii) such other date as agreed to by
the Parties.
"Damages" has the meaning assigned to such term in Section 8(a) hereof.
"Determination Order" has the meaning assigned to such term in Section
20 hereof.
"Disputed Amount" has the meaning assigned to such term in Section 20
hereof.
"Dispute Notice" has the meaning assigned to such term in Section 20
hereof.
"EGPFC" means EGP Fuels Company, a Delaware corporation.
"Employee Benefits Payments" means the Monthly Employee Benefits
Payments together with the Fixed Employee Benefits Amount.
"Employees" has the meaning assigned to such term in Section 7 hereof.
"Employee Transition Agreement" means the agreement between EPSC, EOTT
GP, EOTT Energy Pipeline Limited Partnership and EOTT Energy Operating Limited
Partnership, substantially in the form of Exhibit A hereto.
"Enron" means Enron Corp., an Oregon corporation.
"Enron Bankruptcy Court" has the meaning assigned to such term in the
Recitals.
"Enron Chapter 11 Cases" has the meaning assigned to such term in the
Recitals.
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"Enron Consent" means that certain written consent of Enron, as the
sole stockholder of the EOTT GP, consenting to the filing of a voluntary
petition in bankruptcy on behalf of EOTT GP and EOTT in the Southern District of
Texas, in the form of Exhibit B hereto.
"Enron Corporate Services Agreement" means that certain Corporate
Services Agreement between Enron and EOTT GP, as general partner of EOTT, EOTT
Energy Operating Limited Partnership, EOTT Energy Pipeline Limited Partnership
and EOTT Energy Canada Limited Partnership, dated as of March 24, 1994, and any
amendments thereto, if any.
"Enron Debtor Parties" means, collectively, Enron, Enron North America
Corp., Enron Energy Services, Inc., Enron Gas Liquids, Inc. and all such other
Enron Parties which are debtors in the Enron Chapter 11 Cases as of the date
hereof.
"Enron Documents" means, collectively, this Agreement, the Employee
Transition Agreement, the Enron Consent, the ROFR Waiver, the Termination
Agreements, the Lien Releases and the Restructuring Agreement.
"Enron Parties" has the meaning assigned to such term in the Recitals.
"EOTT" means EOTT Energy Partners, L.P., a Delaware limited
partnership.
"EOTT Bankruptcy Court" means the United States Bankruptcy Court for
the Southern District of Texas presiding over the EOTT Chapter 11 Cases.
"EOTT Chapter 11 Cases" means the jointly administered chapter 11 cases
of the EOTT Parties.
"EOTT Designee" means Xxxxx Xxxxxxx.
"EOTT Documents" means, collectively, this Agreement, the Employee
Transition Agreement, the Note, the Guaranty, the Letter of Credit, the
Termination Agreements and the Restructuring Agreement.
"EOTT GP" means EOTT Energy Corp., a Delaware corporation.
"EOTT Indemnity" has the meaning assigned to such term in Section 9
hereof.
"EOTT LLC" means EOTT Energy General Partner, LLC, a Delaware limited
liability company.
"EOTT Operating Subsidiaries" means, collectively, EOTT Energy Pipeline
Limited Partnership, a Delaware limited partnership, EOTT Energy Operating
Limited Partnership, a Delaware limited partnership, EOTT Energy Canada Limited
Partnership, a Delaware limited partnership, and EOTT Energy Liquids, L.P., a
Delaware limited partnership.
"EOTT Parties" has the meaning assigned to such term in the Recitals.
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"EOTT Partnership Agreement" means the Amended and Restated Agreement
of Limited Partnership of EOTT Energy Partners, L.P., as amended.
"EOTT Petition Date" means the date upon which the EOTT Chapter 11
Cases were commenced or, if the EOTT Chapter 11 Cases are not filed
concurrently, the last date upon which any of the EOTT Chapter 11 Cases are
commenced.
"EOTT Plan of Reorganization" means the plan(s) of reorganization filed
by the EOTT Parties in the EOTT Chapter 11 Cases.
"EPSC" means Enron Pipeline Services Company, a Delaware corporation.
"EPSC Corporate Services Agreement" means that certain Corporate
Services Agreement between EOTT GP and EPSC, dated effective December 1, 2000,
and any amendments thereto, if any.
"Excluded Enron Claims" has the meaning assigned to such term in
Section 8(a) hereof.
"Excluded EOTT Claims" has the meaning assigned to such term in Section
8(b) hereof.
"Existing Letters of Credit" means the letters of credit posted for the
benefit of TST Briar Lake Limited Partnership and Travelers/Aetna Property
Casualty Corp.
"Final Enron Order" means an order of the Enron Bankruptcy Court, in
form and substance reasonably satisfactory to the EOTT Parties, approving the
Settlement Documents, the operation or effect of which has not been stayed,
reversed, vacated or modified in a manner that would deprive a Party of the
material benefits of the Settlement Documents, and as to which order the time to
appeal or to seek review or rehearing has expired and to which (a) no appeal or
request for review or rehearing was filed or (b) if an appeal or request for
review or rehearing was filed, such an appeal or request for review or rehearing
is no longer pending. The Final Enron Order shall include, without limitation,
the following: (i) the compromise and settlement set forth herein is the result
of good faith, arm's length negotiations; (ii) the compromise and settlement
reflected herein constitutes the exchange of reasonably equivalent value between
the Parties to resolve the claims and disputes as set forth in this Agreement;
(iii) the compromise and settlement set forth herein is fair and reasonable to
all Parties and in no way unjustly enriches any of the Parties; (iv) the
consideration to be exchanged pursuant to this compromise and settlement
(including, but not limited to, the obligations set forth in the Settlement
Documents) constitute the contemporaneous exchange of new value and legal, valid
and effective transfers; (v) the provisions of the Final Enron Order and any
actions taken pursuant thereto shall survive entry of any order which may be
entered (x) converting any of the Enron Chapter 11 Cases to a chapter 7 case,
(y) confirming or consummating any plan(s) of reorganization of any or all of
the Enron Debtor Parties, or (z) dismissing any of the Enron Chapter 11 Cases
and the terms and provisions of the Final Enron Order shall continue in this or
any superseding case under the Bankruptcy Code; (vi) the Note, the Guaranty, the
Letter of Credit and the Assumed Obligations contemplated by the compromise and
settlement and approved in the Final Order shall not be discharged by the entry
of an order confirming or consummating any plan(s) of reorganization of any or
all of the Enron Debtor Parties; (vii) the provisions of the Final Enron Order
shall inure to the benefit of the Enron Parties and shall be binding upon the
Enron Parties and their respective
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successors and assigns, including any trustee or other fiduciary hereafter
appointed as a legal representative of any of the Enron Debtor Parties and shall
also be binding upon all creditors of the Enron Debtor Parties and other parties
in interest and (viii) no subsequent orders or any confirmed plan of
reorganization shall change or modify any rights or obligations under this
Agreement.
"Final EOTT Order" means an order of the EOTT Bankruptcy Court, in form
and substance reasonably satisfactory to the Enron Parties, approving the
Settlement Documents, the operation or effect of which has not been stayed,
reversed, vacated or modified in a manner that would deprive a Party of the
material benefits of the Settlement Documents, and as to which order the time to
appeal or to seek review or rehearing has expired and to which (i) no appeal or
request for review or rehearing was filed or (ii) if an appeal or request for
review or rehearing was filed, such an appeal or request for review or rehearing
is no longer pending. The Final EOTT Order shall include, without limitation,
the following: (i) the compromise and settlement set forth herein is the result
of good faith, arm's length negotiations; (ii) the compromise and settlement
reflected herein constitutes the exchange of reasonably equivalent value between
the Parties to resolve the claims and disputes as set forth in this Agreement;
(iii) the compromise and settlement set forth herein is fair and reasonable to
all Parties and in no way unjustly enriches any of the Parties; (iv) the
consideration to be exchanged pursuant to this compromise and settlement
(including, but not limited to, the obligations set forth in the Settlement
Documents) constitute the contemporaneous exchange of new value and legal, valid
and effective transfers; (v) the provisions of the Final EOTT Order and any
actions taken pursuant thereto shall survive entry of any order which may be
entered (x) converting any of the EOTT Chapter 11 Cases to a chapter 7 case, (y)
confirming or consummating any plan(s) of reorganization of any or all of the
EOTT Parties, or (z) dismissing any of the EOTT Chapter 11 Cases and the terms
and provisions of the Final EOTT Order shall continue in this or any superseding
case under the Bankruptcy Code; (vi) the provisions of the Final EOTT Order
shall inure to the benefit of the EOTT Parties and shall be binding upon the
EOTT Parties and their respective successors and assigns, including any trustee
or other fiduciary hereafter appointed as a legal representative of any of the
EOTT Parties and shall also be binding upon all creditors of the EOTT Parties
and other parties in interest and (vii) no subsequent orders or any confirmed
plan of reorganization shall change or modify any rights or obligations under
this Agreement.
"Final Invoice" has the meaning assigned to such term in the Employee
Transition Agreement.
"Fixed Employee Benefits Amount" means an amount equal to $1,356,000
less an amount equal to ($1,356,000/365) multiplied by the number of days
remaining in calendar year 2002 after the date of withdrawal of the EOTT Parties
from the Enron Corp. Cash Balance Plan.
"Guaranty" means the guaranty of payments under the Note by the
Guarantors substantially in the form of Exhibit C hereto.
"Guarantors" means EOTT Canada, Ltd. together with all existing and
future Subsidiaries of EOTT.
"H&B Opinion" has the meaning assigned to such term in Section 17(h)
hereof.
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"Indebtedness" of any Person means without duplication (i) all
indebtedness of such Person for borrowed money and (ii) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments or which
bear interest.
"Indemnitee" has the meaning assigned to such term in Section 9 hereof.
"Interim Invoices" means monthly invoices delivered by EPSC to the EOTT
Parties in accordance with the terms of the O&S Agreement for any period
beginning after July 31, 2002 and ending on the Transition Date.
"Xxxxxx" means Xxxxxx Commercial Paper Inc., a New York corporation.
"Letter of Credit" has the meaning assigned to such term in Section 6
hereof.
"Lien Releases" means collectively, that certain release of liens held
by EPSC on assets of EOTT Parties in Mississippi, and that certain release of
liens held by EGPFC on assets of the EOTT Parties in Texas.
"Monthly Employee Benefits Payments" means all amounts payable under
the monthly invoices, prepared in a manner consistent with past practice, issued
by Enron to any EOTT Party with respect to (i) the minimum contributions of such
Party for the Enron Cash Balance Plan and issued during the period beginning
with invoice number 105-0902, dated September 12, 2002, through the date of
withdrawal of such Party from such plan, (ii) the administration expenses
allocable to any EOTT Party with respect to the Enron Savings Plan issued to
such Party during the period beginning with invoice number 105-0902, dated
September 12, 2002, through the date of withdrawal of such Party from such plan
and (iii) participation by any EOTT Party in the Enron Retiree Medical Plan
issued to any EOTT Party for the period beginning on August 1, 2002 and ending
on the date of withdrawal of such Party from such plan.
"Note" means the promissory note in the initial principal amount of
$6,211,673.13 made by EOTT to the order of Enron, and guaranteed by the
Guarantors substantially in the form of Exhibit D hereto.
"Noteholders" means the holders of the 11% Senior Notes due 2009,
issued by EOTT Energy Partners, L.P. and EOTT Energy Finance Corp. pursuant to
that certain First Supplemental Indenture, dated October 1, 1999, which are
party to the Restructuring Agreement.
"O&S Agreement" means that Operation and Service Agreement, dated
October 1, 2000, as amended, executed between EPSC and EOTT GP, as general
partner on behalf of EOTT Energy Operating Limited Partnership and EOTT Energy
Pipeline Limited Partnership.
"O&S Indemnity" has the meaning assigned to such term in Section 10(a)
hereof.
"Operating Partnerships" means, collectively, EOTT Energy Pipeline
Limited Partnership and EOTT Energy Operating Limited Partnership.
"Operator Indemnitees" has the meaning assigned to such term in Section
10(a) hereof.
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"Parties" has the meaning assigned to such term in the Recitals.
"Person" means any individual, sole proprietorship, partnership,
limited liability partnership, joint venture, trust, unincorporated
organization, association, corporation, limited liability company, institution,
public benefit corporation, other entity or government (whether federal, state,
county, city, municipal, local, foreign or otherwise, including any
instrumentality, division, agency, body or department thereof).
"Released Affiliate" means, with respect to any EOTT Party or Enron
Party, as the case may be, any Person directly or indirectly controlled by such
Party or with respect to which such Party shares control. For purposes of this
definition, "control" means the possession of the power to direct or cause the
direction of management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Released Enron Claims" has the meaning assigned to such term in
Section 8(a) hereof.
"Released Enron Parties" has the meaning assigned to it in Section 8(b)
hereof.
"Released EOTT Claims" has the meaning assigned to such term in Section
8(b) hereof.
"Released EOTT Parties" has the meaning assigned to it in Section 8(a).
"Restructuring Agreement" means that certain agreement entered into by
the Enron Parties, the EOTT Parties, the Noteholders, Xxxxxx and Standard with
respect to the terms of a pre-negotiated plan of reorganization for the EOTT
Parties, substantially in the form of Exhibit E hereto.
"ROFR Waiver" means the waiver by Enron of its right of first refusal
granted pursuant to Section 5.6 of that certain Purchase and Sale Agreement,
dated June 29, 2001, between Enron and EOTT, in the form of Exhibit F hereto.
"SCTSC" means Standard Chartered Trade Services Corporation, a Delaware
corporation.
"Settlement Documents" has the meaning assigned to such term hereof in
Section 3.
"Standard" means Standard Chartered Bank, plc, a banking organization
existing under the laws of England and Wales.
"Stipulation" means that certain Stipulation and Agreed Order Regarding
Rejection of Certain Contracts Between EOTT Energy Liquids, L.P. and Enron Gas
Liquids, Inc., dated April 2, 2002, and entered in the Enron Chapter 11 Cases.
"Subsidiary" means, with respect to any Person, (i) any corporation of
which an aggregate of more than 50% of the outstanding stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or
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beneficially by such Person or one or more Subsidiaries of such Person, or with
respect to which any such Person has the right to vote or designate the vote of
50% or more of such Stock whether by proxy, agreement, operation of law or
otherwise and (ii) any partnership, limited liability partnership or limited
liability company in which such Person or one or more Subsidiaries of such
Person shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or managing member or may exercise the powers of a general
partner or managing member.
"Taxes" means (i) all federal, state, local or foreign taxes, charges,
fees, imposts, levies or other assessments, including, without limitation, all
net income, gross receipts, capital, sales, use, ad valorem, value added,
transfer, franchise, profits, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance, stamp,
occupation, property and estimated taxes, customs duties, fees, assessments and
charges of any kind whatsoever, (ii) all interest, penalties, fines, additions
to tax or additional amounts imposed by any taxing authority in connection with
any item described in clause (i) and (iii) any transferee liability in respect
of any items described in clauses (i) and/or (ii).
"Termination Agreements" means those certain agreements between the
applicable EOTT Parties and the applicable Enron Parties wherein the Parties
mutually agree to terminate each of the EPSC Corporate Services Agreement, the
Enron Corporate Services Agreement and the Transition Services Agreement, in the
form of Exhibits G-1, G-2 and G-3, respectively.
"Transition Date" means the date on which the transition of employees
pursuant to the Employee Transition Agreement is completed.
"Transition Expenses" has the meaning assigned to such term in the
Employee Transition Agreement.
"Transition Services Agreement" means that certain Transition Services
Agreement, dated June 29, 2001, between EGPFC and EOTT GP.
"Undisputed" with respect to any payment by any EOTT Party, means that
portion of such payment (i) which is not disputed in good faith by such EOTT
Party after consultation with Enron and the good faith efforts by such EOTT
Party to resolve such dispute or (ii) which is determined to be payable pursuant
to Section 20 hereof.
"Withdrawal Date" has the meaning assigned to such term in Section 7
hereof.
2. Execution of Agreements. Contemporaneously with the execution of
this Agreement, and as further consideration for this Agreement, the Parties
shall execute and deliver the Employee Transition Agreement, the Termination
Agreements and the Restructuring Agreement and Enron shall deliver the Enron
Consent to EOTT. As further consideration for this Agreement and as a compromise
of certain claims, on and subject to the occurrence of the Closing Date, (i)
EOTT shall execute and deliver the Note and the Guaranty, (ii) EOTT shall cause
to be delivered the Letter of Credit, (iii) Enron shall execute the ROFR Waiver
and (iv) EPSC and EGPFC shall execute the Lien Releases.
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3. Court Approval. Within 10 Business Days following the later of (i)
the execution of this Agreement and (ii) the EOTT Petition Date, the Enron
Parties shall file with the Enron Bankruptcy Court and the EOTT Parties shall
file with the EOTT Bankruptcy Court motions seeking entry of an order approving
this Agreement, the Employee Transition Agreement, the Note, the Guaranty, the
Letter of Credit, the Termination Agreements, the Enron Consent, the ROFR Waiver
and the Lien Releases (collectively, the "SETTLEMENT DOCUMENTS"). Such motions
shall be in form and substance reasonably satisfactory to the other Parties.
4. EOTT Bar Date. The EOTT Parties shall agree that the deadline for
each of the Enron Parties to file a proof of claim or proof of interest in any
of the EOTT Chapter 11 Cases shall be extended to the earlier of (i) 10 Business
Days following entry of a final nonappealable order confirming a plan of
reorganization in all of the EOTT Chapter 11 Cases incorporating this Settlement
and (ii) the date 180 days after the EOTT Petition Date. To the extent that the
Settlement Documents are approved in the Final EOTT Order and the Final Enron
Order and the Closing occurs as described herein, the Enron Parties shall not be
required to file any proofs of claim or proofs of interest and no right of any
Enron Party under any Settlement Document shall be effected or otherwise
prejudiced in any way as a result of the failure of any Enron Party to file any
such proof of claim or proof of interest.
5. Cash Payment. As further consideration for this Agreement and as a
compromise of certain claims, subject to the satisfaction of all other
conditions precedent to the effectiveness of the EOTT Plan of Reorganization, on
or before the effective date of the EOTT Plan of Reorganization EOTT shall pay
to Enron by wire transfer of immediately available funds the sum of one million
two hundred fifty thousand dollars ($1,250,000) (the "CASH PAYMENT"). The EOTT
Parties agree that payment of the Cash Payment pursuant to this Section 5 shall
be a condition precedent to the effectiveness of the EOTT Plan of
Reorganization. The EOTT Parties further agree that such condition precedent may
be waived only in writing by Enron, on behalf of the Enron Parties.
6. Letter of Credit. As further consideration for this Agreement and as
security for the Note, EOTT shall cause to be delivered an irrevocable letter of
credit for the account of Enron (the "LETTER OF CREDIT"). The Letter of Credit
shall be issued and payable by Standard or such other bank acceptable to Enron,
shall be in form and substance acceptable to Enron and shall remain in full
force and effect until the date 10 Business Days after the maturity date of the
Note. The foregoing term notwithstanding, the Letter of Credit may have an
expiration date ending prior to the maturity date of the Note provided that (i)
such Letter of Credit shall, in each case, be renewed (in form and substance
satisfactory to Enron) and delivered to Enron not later than 10 Business Days
prior to its expiry and (ii) a Letter of Credit (in form and substance
satisfactory to Enron) with respect to the Note shall remain in force at all
times up to the date 10 Business Days after the maturity date of the Note. The
Letter of Credit, and each renewal thereof, shall initially be in an amount
equal to five million dollars ($5,000,000); provided, however, that on the first
Business Day after the earlier of the effective date of the EOTT Plan of
Reorganization and 180 days after the EOTT Petition Date, the total amount
available to Enron under such Letter of Credit shall be increased to an amount
equal to (i) the maximum principal outstanding under the Note (including any
amounts that may be capitalized) on the expiry date of such Letter of Credit
plus (ii) the interest payable thereon through the date one month after the
expiry date of such Letter of Credit. Enron shall be entitled to draw down any
portion or the full
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amount of such Letter of Credit in the event (i) a default occurs under any
Settlement Document and is continuing on the date three Business Days after the
receipt by EOTT of notice from Enron of such default (provided that Enron shall
only be able to draw on the Letter of Credit in an amount equal to the principal
amount then outstanding under the Note (including any amounts that may be
capitalized) plus the interest accrued thereon through such date plus any other
amount due on the Note, if any) and (ii) a renewed Letter of Credit is not
delivered to Enron when and on the date required by this Section 6 (provided
that Enron shall only be able to draw on the Letter of Credit in an amount equal
to the principal amount then outstanding under the Note (including any amount
capitalized) plus the interest accrued thereon through such date plus any other
amount due on the Note, if any). The Letter of Credit shall be returned to EOTT
for termination upon payment in full of all amounts payable under the Note.
7. Employee Benefits.
(a) The employees, former employees and their covered spouses
and dependents of EOTT GP (collectively, the "EMPLOYEES") may continue to
participate in the Enron retirement and welfare benefit plans in which they
participate as of the date hereof; provided, however, that the EOTT Parties
shall take all such actions necessary to withdraw from all such Enron retirement
and welfare benefit plans, including, without limitation, the implementation of
all such pension and welfare benefit plans for the Employees as may be required
by applicable law, on the earlier of (i) the effective date of the EOTT Plan of
Reorganization and (ii) 180 days after the EOTT Petition Date (the "WITHDRAWAL
DATE"). For the avoidance of doubt, nothing in this Section 7 shall be deemed to
restrict the EOTT Parties from withdrawing from the applicable Enron retirement
and welfare benefit plans prior to the Withdrawal Date.
(b) As consideration for the continuation of the Employees in
such plans, and as further consideration for this Agreement and as a compromise
of certain claims, EOTT shall pay (i) all Undisputed Monthly Benefits Payments
within 10 Business Days after the receipt by EOTT of an invoice with respect to
the same and (ii) the Fixed Employee Benefits Amount in 12 equal installments on
the first Business Day of each month beginning on January 2, 2003.
8. Releases.
(a) Enron Parties' Release of Released EOTT Parties. Except
with respect to any Excluded Enron Claims (as defined below), on the Closing
Date, the Enron Parties, for themselves and each of their successors and
assigns, shall and hereby do release, acquit and forever discharge the EOTT
Parties, together with each of their respective current and former principals,
officers, directors, managers and employees, and each of their respective
current and former parent companies, subsidiaries, Released Affiliates, agents,
financial advisors, attorneys, trustees, accountants, insurers, predecessors,
successors, assigns, indemnitees and representatives of any kind (collectively
the "RELEASED EOTT PARTIES"), (i) from and against any and all liability, (ii)
from all claims, judgments, demands, liens, actions, administrative proceedings,
and causes of action of every kind and nature, whether derivative or otherwise,
including, without limitation, avoidance actions under chapter 5 of the
Bankruptcy Code or applicable state law (collectively, "CLAIMS"), and (iii) from
all damages, injuries, contributions, indemnities, compensation, obligations,
costs, attorney's fees and expenses of every kind and nature
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whatsoever, whether known or unknown, fixed or contingent, whether in law or in
equity, whether sounding in tort or in contract and whether or not asserted
(collectively, "DAMAGES"), insofar as such liabilities, Claims or Damages arise
out of or in connection with the actions or omissions of any Released EOTT Party
prior to the Closing Date (such liabilities, Claims and Damages, the "RELEASED
ENRON CLAIMS"), including, except for any Excluded Enron Claims, any claims for
payment by any Enron Party owed or due prior to the date hereof under any of the
O&S Agreement, the Enron Corporate Services Agreement, the EPSC Corporate
Services Agreement and the Transition Services Agreement. For purposes of this
Section 8, and notwithstanding anything to the contrary contained herein,
"EXCLUDED ENRON CLAIMS" means (i) all rights with respect to the EOTT Indemnity,
(ii) all rights with respect to the O&S Indemnity, (iii) any payments due under
the O&S Agreement for the period beginning August 1, 2002 through the Transition
Date, including, without limitation, payments for any Interim Invoice, the Final
Invoice and the Transition Expenses, (iv) all rights with respect to the Agreed
Payments, (v) all rights with respect to the Employee Benefits Payments, (vi)
all rights of Enron under the Note, the Guaranty and the Letter of Credit, (vii)
all rights with respect to the Cash Payment, (ix) all rights under any
Settlement Document and (x) all liabilities, Claims and/or Damages with respect
to or arising as a result of or in connection with the enforcement of any such
rights and/or collection on any such claims.
(b) EOTT Parties' Release of the Released Enron Parties.
Except with respect to the Excluded EOTT Claims, on the Closing Date, the EOTT
Parties, for themselves and each of their predecessors, successors and assigns,
shall and hereby do release, acquit and forever discharge (i) the Enron Parties,
together with each of their respective current and former principals, officers,
directors, managers and employees, and each of their respective current and
former parent companies, subsidiaries, Released Affiliates, agents, financial
advisors, attorneys, trustees, accountants, insurers, predecessors, successors,
assigns, indemnitees and representatives of any kind, if any, and (ii) any
person who was, but, as of the date of this Agreement, no longer is an officer
or director of EOTT GP (collectively the "RELEASED ENRON PARTIES") from and
against any and all liability and from all Claims and Damages insofar as such
liabilities, Claims or Damages arise out of or in connection with the actions or
omissions of any Released Enron Party prior to the Closing Date (such
liabilities, Claims and Damages, the "RELEASED EOTT CLAIMS"), including, without
limitation, any claims for payment by any Enron Party owed or due prior to the
date hereof under any of the O&S Agreement (other than any claims for payment
under the O&S Indemnity), the Enron Corporate Services Agreement, the EPSC
Corporate Services Agreement and the Transition Services Agreement. On the
Closing Date, all claims for which the EOTT Parties have filed a proof of claim
in the Enron Chapter 11 Cases in the Bankruptcy Court shall be disallowed and
expunged in their entirety without the necessity of the filing of any additional
pleadings. For purposes of this Section 8, and notwithstanding anything to the
contrary contained herein, "EXCLUDED EOTT Claims" means (i) all rights with
respect to the Agreed Payments, (ii) all rights with respect to the O&S
Indemnity, (iii) any claim against any person who was, but, as of the date of
this Agreement no longer is, an officer or director of EOTT GP for acts of fraud
or willful misconduct, (iv) all rights under any Settlement Document and (v) all
liabilities, Claims and/or Damages with respect to or arising as a result of or
in connection with the enforcement of such right and/or collection on any such
claims.
(c) EXCEPT AS OTHERWISE PROVIDED HEREIN, EACH OF THE PARTIES
HEREBY EXPRESSLY AGREES THAT THE LIABILITIES, CLAIMS
11
AND/OR DAMAGES RELEASED HEREBY SHALL INCLUDE, WITHOUT LIMITATION, SUCH
LIABILITIES, CLAIMS AND/OR DAMAGES ARISING PRIOR TO THE CLOSING DATE AS A DIRECT
OR INDIRECT RESULT OF THE NEGLIGENCE OF ANY OTHER PARTY HERETO.
(d) The release of each Party contained herein is a final
release, even if there may exist a mistake on the part of any Party or all
Parties to this Agreement as to the extent and nature of the claims, injuries,
and damages of any Party against any other Party.
(e) For the avoidance of doubt, the Parties hereby acknowledge
and agree that the releases, acquittals and discharges contained herein shall
not apply to any right provided or any liability, Claim and/or Damage arising
under or in connection with this Agreement and the other Settlement Documents.
9. EOTT Indemnity. To the fullest extent permitted by law but subject
to the limitations expressly provided in this Section 9, the EOTT Parties shall
indemnify (i) Enron, (ii) any person who is or was an officer, director or
employee of Enron and (iii) any person who was but, as of the date of this
Agreement no longer is, an officer or director of EOTT GP (Enron and each such
person, an "INDEMNITEE") from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including, without limitation, legal
fees and expenses), judgments, fines, penalties, interest, settlements and other
amounts resulting from any and all actions, suits or proceedings but only
insofar as such actions, suits or proceeding are (a) EOTT derivative actions or
suits or proceedings relating to EOTT derivative actions and (b) based on
actions taken, or the failure to take any action, on or after April 10, 2002;
provided, however, that in each case the Indemnitee acted in good faith and in a
manner which such Indemnitee believed to be in, or not opposed to, the best
interest of EOTT and, with respect to any criminal proceeding, had no reasonable
cause to believe its, his or her conduct was unlawful (the "EOTT Indemnity").
For the avoidance of doubt, the EOTT Indemnity shall not apply to losses,
claims, damages, liabilities, joint or several, expenses (including, without
limitation, legal fees and expenses), judgments, fines, penalties, interest,
settlements and other amounts directly resulting from acts of fraud or the
willful misconduct by an Indemnitee. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that the
Indemnitee acted in a manner contrary to that specified above.
10. O&S Indemnity.
(a) To the fullest extent permitted by applicable law, each of
EOTT GP and the Operating Partnerships shall and does hereby agree to indemnify,
protect, hold harmless and defend EPSC and its legal representatives, agents,
employees, officers, directors, shareholders, subsidiaries and affiliates
(collectively, the "OPERATOR INDEMNITEES") from and against any and all losses
arising from, by reason of or in connection with (i) any failure of EOTT GP to
duly perform or observe any term, provision, covenant or agreement to be
performed or observed by EOTT GP pursuant to the O&S Agreement, (ii) the
ownership by EOTT GP or the Operating Partnerships, and the operation by EPSC
and its affiliates of the Facilities (as such term is defined in the O&S
Agreement), (iii) refusal of EOTT GP to approve EPSC recommended items for
inclusion in the budgets or (iv) refusal of EOTT GP to approve EPSC recommended
12
corrections, additions or modifications to the budgets; provided, however, that
neither EOTT GP nor the Operating Partnerships shall be required to indemnify
any Operator Indemnitee for losses caused by or resulting from the gross
negligence or willful misconduct of EPSC or its employees or agents (the "O&S
INDEMNITY").
(b) To the fullest extent permitted by applicable law, EPSC
shall and does hereby agree to indemnify, protect, hold harmless and defend EOTT
GP and its legal representatives, agents, employees, officers, directors,
subsidiaries and affiliates from and against any and all losses arising from the
gross negligence or willful misconduct of EPSC or its employees, agents or
representatives in the performance of the services under the O&S Agreement.
(c) Notwithstanding Sections 10(a) and (b) above, when any
losses result from the joint or concurrent negligence in the case of EOTT GP or
gross negligence in the case of EPSC or willful misconduct of both parties
hereto, such Parties' obligation to indemnify shall be in proportion to each
Party's allocable share of joint or concurrent negligence or willful misconduct.
11. Assumed Obligations; Interim Invoices; Administrative Claims. The
EOTT Parties shall assume in the EOTT Chapter 11 Cases and cure the O&S
Agreement through (i) the payment of all Undisputed amounts payable under any
Interim Invoice within 15 days after the receipt of any such invoice, (ii) the
payment of the Final Invoice and the Transition Expenses pursuant to the terms
of the Employee Transition Agreement and (iii) the continued effectiveness of
the O&S Indemnity as provided in this Agreement. The EOTT Parties shall pay all
Undisputed amounts under any Interim Invoices when due and payable in accordance
with the terms and provision of the O&S Agreement. This Agreement, the Agreed
Payments, the Employee Benefits Payments, the Final Invoice, the Transition
Expenses, the EOTT Indemnity and the O&S Indemnity shall be assumed by the EOTT
Parties in the EOTT Chapter 11 Cases pursuant to the Final EOTT Order and shall
be deemed to constitute chapter 11 administrative claims against the EOTT
Parties in the EOTT Bankruptcy Cases and, upon confirmation and consummation of
a plan(s) of reorganization for any of the EOTT Parties, except as provided in
Section 8 above, shall not be discharged and, instead, shall constitute ongoing
obligations of the reorganized entities or their successor(s). The Cash Payment,
the Note, the Guaranty, the Letter of Credit and the Employee Benefits Payments
shall be deemed to constitute chapter 11 administrative claims against the EOTT
Parties in the EOTT Chapter 11 Cases and, upon confirmation and consummation of
a plan(s) of reorganization for any of the EOTT Parties, shall not be discharged
and, instead, shall constitute ongoing obligations of the reorganized entities
or their successor(s). The obligations to be assumed by the EOTT Parties
pursuant to this Section 11 are collectively referred to as the "ASSUMED
OBLIGATIONS").
12. Unknown Damages. Each of the Parties expressly agrees as further
consideration for this Agreement that, upon the Closing Date, this Agreement
shall apply to all unknown and any unanticipated injuries and damages of the
respective Parties, as well as those now known by the Parties, arising out of or
in connection with the actions or omissions of any Party prior to the Closing
Date, and expressly waives any applicable state law that may hold to the
contrary.
13. No Set Off or Recoupment. Except as may be consented to in writing
by Enron, no EOTT Party shall be entitled to, and none of them will, exercise
any right of set off or
13
recoupment against (i) the Cash Payment, (ii) any Agreed Payments (except as
provided in the Stipulation), (iii) amounts payable under the Note, the
Guaranty, the Letter of Credit, the O&S Indemnity or the EOTT Indemnity, (iv)
amounts payable as Transition Expenses or Employee Benefits Payments or (v)
amounts invoiced on any Interim Invoice or the Final Invoice.
14. Transition of Services. In order to facilitate the transition of
services provided by EPSC pursuant to the O&S Agreement in accordance with the
terms of the Employee Transition Agreement, upon execution of this Agreement,
the EOTT Designee shall be provided access to all operational information and
personnel utilized in the services provided by EPSC and the Enron Parties shall
use commercially reasonable efforts to include the EOTT Designee in discussions
regarding significant operational services provided under the O&S Agreement. The
foregoing notwithstanding, nothing contained in this Agreement shall be
construed as requiring the consent of the EOTT Designee as a condition to the
taking of any action or for the provision of any services under the O&S
Agreement, except where the consent or approval of EOTT is required as provided
in the O&S Agreement.
15. Representations and Warranties of the Enron Parties. The Enron
Parties represent and warrant that:
(a) they have not assigned, hypothecated or otherwise
alienated any claims, rights or causes of action to be released on the Closing
Date as contemplated by this Agreement nor any part thereof;
(b) subject to the entry of a Final Enron Order, the
applicable Enron Party has the absolute and unrestricted right, power and
authority to execute and deliver each of the Enron Documents, and to perform its
respective obligations hereunder and thereunder and to release the claims
specified in Section 8(a) above;
(c) subject to the entry of a Final Enron Order, upon the
execution and delivery of such documents, each of the Enron Documents will
constitute legal, valid and binding obligations of the Enron Parties party
thereto, in accordance with their respective terms;
(d) subject to the entry of a Final Enron Order, neither the
execution and delivery of any Enron Document nor the consummation or performance
of any of the transactions contemplated hereby and thereby will give any person
the right to prevent, delay or otherwise interfere with any of the contemplated
transactions pursuant to (i) any provision of the charter, bylaws, or other
constituent documents of the Enron Parties, (ii) any resolution adopted by the
stockholders, the Board of Directors, or any committee thereof, of the Enron
Parties, (iii) any legal requirement or order to which any Enron Party may be
subject or (iv) any contract which any Enron Party has executed or by which an
Enron Party may be bound, subject to the right of any party-in-interest to
appear and be heard pursuant to section 1109 of the Bankruptcy Code to object to
the approval of any Enron Document;
(e) the applicable boards of directors of the Enron Parties
have authorized the execution and delivery of the Enron Documents; and
(f) no promise or agreement which is not expressed herein or
in the other Settlement Documents has been made to any Enron Party in executing
each of the Enron
14
Documents, and none of the Enron Parties is relying upon any statement or
representation of any agent of the EOTT Parties.
16. Representations and Warranties of the EOTT Parties. The EOTT
Parties represent and warrant that:
(a) they have not assigned, hypothecated or otherwise
alienated any claims, rights or causes of action to be released on the Closing
Date as contemplated by this Agreement nor any part thereof;
(b) the applicable EOTT Party has the absolute and
unrestricted right, power and authority to execute and deliver the EOTT
Documents, and to perform its respective obligations hereunder and thereunder
and to release the claims specified in Section 8(b) above;
(c) subject to the entry of the Final EOTT Order, upon the
execution and delivery of such documents, each of the EOTT Documents will
constitute legal, valid and binding obligations of the EOTT Parties party
thereto, in accordance with their respective terms;
(d) subject to the entry of a Final EOTT Order, neither the
execution and delivery of any EOTT Document nor the consummation or performance
of any of the transactions contemplated hereby and thereby will give any person
the right to prevent, delay or otherwise interfere with any of the contemplated
transactions pursuant to (i) any provision of charter, bylaws, or other
constituent documents of the EOTT Parties, (ii) any resolution adopted by the
unitholders, members, stockholders, the board of directors, or any committee
thereof, of the EOTT Parties, (iii) any legal requirement or order to which any
EOTT Party may be subject or (iv) any contract which any EOTT Party has executed
or by which any EOTT Party may be bound, subject to the right of any
party-in-interest to appear and be heard pursuant to section 1109 of the
Bankruptcy Code to object to the approval of any EOTT Document;
(e) the Restructuring Committee of the Board of Directors of
EOTT GP has authorized, and, pursuant to Section 6.9 of the EOTT Partnership
Agreement, the Audit Committee of the Board of Directors of EOTT GP has
approved, the execution and delivery of each of the EOTT Documents, where
applicable, for itself, in its capacity as the general partner on behalf of EOTT
and in its capacity as the managing member on behalf EOTT LLC; and EOTT LLC has
authorized the execution and delivery of this Agreement, the Employee Transition
Agreement, the Termination Agreements and the Restructuring Agreement in its
capacity as the general partner on behalf of each of the EOTT Operating
Subsidiaries;
(f) no promise or agreement which is not expressed herein or
in the other Settlement Documents has been made to any EOTT Party in executing
each of the EOTT Documents, and none of the EOTT Parties is relying upon any
statement or representation of any agent of the Enron Parties; and
(g) the entities listed on Schedule 16(g) constitute all of
the direct or indirect Subsidiaries of EOTT.
15
17. Conditions of the Enron Parties to Closing. The obligations of the
Enron Parties contemplated by this Agreement shall be subject to satisfaction of
the following conditions on or prior to the Closing Date, which may be waived by
Enron on behalf of the Enron Parties:
(a) the EOTT Parties, the Noteholders, Xxxxxx, SCTSC and
Standard shall have executed and delivered the Restructuring Agreement;
(b) the EOTT Parties shall have executed and delivered the
Employee Transition Agreement and the Termination Agreements;
(c) the EOTT Parties shall have executed and delivered the
documents required by Section 19 below;
(d) the EOTT Parties shall have paid in full, when due and
payable, all Undisputed Employee Benefits Payments and all Undisputed amounts
under the Interim Invoices;
(e) the representations and warranties of the EOTT Parties
contained herein shall be true and correct;
(f) no EOTT Party shall have breached any term or condition of
any Settlement Document;
(g) the Existing Letters of Credit shall have been terminated
and the funds posted therefor shall have been returned, without set off or
recoupment, to Enron;
(h) the EOTT Parties shall deliver to Enron an opinion of
counsel, in form and substance reasonably acceptable to Enron, that each of the
Agreement, the Note, the Guaranty, the Letter of Credit, the Termination
Agreements, the Employee Transition Agreement and the Restructuring Agreement
has been duly authorized, validly executed and delivered and, assuming the due
authorization, valid execution and delivery by (i) the applicable Enron Parties
in the case of this Agreement, the Termination Agreements, the Employee
Transition Agreement and the Restructuring Agreement and (ii) Xxxxxx, SCTSC,
Standard and the Noteholders in the case of the Restructuring Agreement, is
enforceable against the EOTT Parties in accordance with their respective terms
(the "H&B OPINION"); and
(i) the EOTT Bankruptcy Court shall have entered the Final
EOTT Order.
18. Conditions of the EOTT Parties to Closing. The obligations of the
EOTT Parties contemplated by this Agreement shall be subject to satisfaction of
the following conditions on or prior to the Closing Date, which may be waived by
EOTT on behalf of the EOTT Parties:
(a) the Enron Parties shall have executed and delivered the
Restructuring Agreement, the Enron Consent, the Employee Transition Agreement
and the Termination Agreements;
(b) Xxxxxx, SCTSC and Standard shall have executed and
delivered the Restructuring Agreement;
16
(c) the Enron Parties shall have executed and delivered the
documents required by Xxxxxxx 00 xxxxx;
(x) the representations and warranties of the Enron Parties
contained herein shall be true and correct;
(e) no Enron Party shall have breached any term or condition
of any Settlement Document; and
(f) the Enron Bankruptcy Court shall have entered the Final
Enron Order.
19. Closing.
(a) On the Closing Date, subject to the satisfaction of the
conditions set forth in Section 17:
(i) Enron shall execute and deliver the ROFR
Waiver; and
(ii) EPSC and EGPFC shall execute and deliver the
Lien Releases.
(b) On the Closing Date, subject to satisfaction of the
conditions set forth in Section 18:
(i) EOTT shall make and deliver the Note;
(ii) the Guarantors shall execute and deliver the
Guaranty;
(iii) EOTT shall cause to be delivered the Letter
of Credit;
(iv) the EOTT Parties shall pay in full all
Undisputed Transition Expenses, all
Undisputed amounts under the Final Invoice
by wire transfer to Enron of immediately
available funds;
(v) the EOTT Parties shall deliver the H&B
Opinion; and
(vi) EOTT shall return to Enron for cancellation
that certain promissory note, dated March
25, 1994, made to the order of EOTT by Enron
in the principal amount of $35,000,000.
20. Disputed Payments. If any EOTT Party shall, in good faith, dispute
any portion of any amounts due and payable under any Interim Invoice or the
Final Invoice, or as an Employee Benefit Payment or Transition Expenses (such
amounts, a "DISPUTED AMOUNT"), such EOTT Party shall be entitled to withhold
such Disputed Amount; provided, however, that such EOTT Party shall provide the
Enron Parties with written notice of such dispute (a "DISPUTE Notice") within
five Business Days prior to the date such payment is due and payable and such
notice must include documentation reasonably substantiating such dispute. The
EOTT Parties and the Enron Parties shall make a good faith effort to resolve
mutually such dispute expeditiously. If the EOTT Parties and the Enron Parties
have not mutually resolved such
17
dispute within five Business Days after receipt of a Dispute Notice by the Enron
Parties, then the dispute shall be submitted to the Enron Bankruptcy Court for
determination. In the event the Enron Bankruptcy Court shall determine to be
payable to the Enron Parties any portion or all of a Disputed Amount, the EOTT
Parties shall pay such amount to Enron, on behalf of the applicable Enron Party,
together with interest thereon from the date such amount was originally due and
payable at a rate equal to 6% per annum, on the 12th day following the entry of
the order of the Enron Bankruptcy Court with respect to such determination (a
"DETERMINATION ORDER"). In the event an appeal is filed with respect to a
Determination Order prior to the 11th day following the entry of such order,
Enron shall hold all funds received from the EOTT Parties in the Enron account
designated for the deposit of settlement proceeds pursuant to the Determination
Order and shall not use nor dispurse such funds, or the interest earned thereon,
until the earlier of (i) a further order of the Enron Bankruptcy Court, upon
notice and a hearing, directing such disbursement and (ii) the dismissal or
final adjudication in favor of the Enron Parties of any such appeal. The funds
so held shall be dispursed in accordance with the determinations made in any
such appeal.
21. Mutual Covenants Not to Xxx.
(a) Subject to the terms and conditions set forth in this
Agreement and except with respect to the exclusion of certain claims pursuant to
this Agreement, each of the Enron Parties hereby warrants, covenants and agrees
that from and after the Closing Date, it will not xxx or otherwise commence any
legal action against any of the Released EOTT Parties with respect to any of the
Released Enron Claims.
(b) Subject to the terms and conditions set forth in this
Agreement and except with respect to the exclusion of certain claims pursuant to
this Agreement, each of the EOTT Parties hereby warrants, covenants and agrees
that from and after the Closing Date it will not xxx or otherwise commence any
legal action against any of the Released Enron Parties with respect to any of
the Released EOTT Claims.
22. Closing Date; Return to Status Quo. If (i) the Enron Bankruptcy
Court and the EOTT Bankruptcy Court do not approve the Settlement Documents or
if, upon appeal from an order of either the Enron Bankruptcy Court or the EOTT
Bankruptcy Court approving the Settlement Documents, such order is vacated or
modified in a manner that would deprive a Party of the material benefits of the
Settlement Documents or (ii) the Closing Date does not occur on or prior to
January 2, 2003, then, in either case, the Settlement Documents, and all orders
and proceedings had in connection therewith shall thereupon become null and void
without further action by any Party hereto and the Parties shall be restored to
their respective status quo ante. In the event the Parties are returned to their
respective status quo ante, no information obtained nor any statements made in
the course of the negotiation or preparation of the Settlement Documents shall
be used by any of the Parties against any other Party, no such information or
statements shall be an admission against any such Party, nor shall any such
information or statement be admissible in any administrative or legal
proceeding.
23. Publicity. The Parties agree that, prior to issuing any press
release announcing or describing the settlement contained in this Agreement, the
Parties shall provide each other with a written copy of such press release and
permit the other Parties to comment thereon and be
18
advised when such release will be issued; provided that the Parties are
expressly authorized to describe the settlement contained herein and/or attach
copies of any Settlement Document to the motion filed with the Enron Bankruptcy
Court and/or the EOTT Bankruptcy Court.
24. Attorney's Fees, Expenses, and Costs. The Parties agree that, other
than with respect to the Transition Expenses, each Party is solely responsible
for the attorneys' fees, expenses and costs incurred by such Party in connection
with the negotiation, preparation, execution or performance of the Settlement
Documents.
25. Consultation with Attorneys. The Parties understand and acknowledge
that this is a legal release of any and all claims that they, or any of them,
may have against each other that were asserted or could have been asserted, and
each of them represents and acknowledges that it has had the opportunity to
retain independent counsel to represent it in connection with its consideration
of this Agreement and the other Settlement Documents. Each Party represents and
warrants that it has each undertaken its own investigation of the facts and is
relying solely upon its own knowledge and the advice of counsel. The Parties
represent and warrant that they have each consulted with independent counsel and
other advisors with respect to the preparation, negotiation, and execution of
the Settlement Documents to the extent they deemed such consultation necessary
or appropriate, and have been provided with a reasonable period of time to
consider and execute the Settlement Documents. The Parties, therefore, stipulate
and agree that no Settlement Document shall be construed against any Party as
the drafter thereof. All provisions of the Settlement Documents have been
negotiated by the Parties at arm's length, and no Party shall be deemed the
scrivener of any Settlement Document. The Parties agree and direct that the rule
of contract construction providing that ambiguous contract terms should be
construed against the drafting party shall not apply nor be applied to any
Settlement Document.
26. FORUM SELECTION CLAUSE. SHOULD ANY DISPUTE ARISE CONCERNING THE
CONSTRUCTION AND/OR ENFORCEMENT OF ANY SETTLEMENT DOCUMENT, THE PARTIES HEREBY
SPECIFICALLY AGREE AND CONSENT THAT ANY CONTROVERSY, CLAIM, OR DISPUTE ARISING
OUT OF OR RELATING TO SUCH SETTLEMENT DOCUMENT, OR ANY ALLEGED BREACH THEREOF,
INCLUDING (WITHOUT LIMITATION) ANY DISPUTE REGARDING THE EXECUTION, BREACH OR
COMPLIANCE WITH SUCH SETTLEMENT DOCUMENT, OR CLAIMS FOR EQUITABLE OR INJUNCTIVE
RELIEF, SHALL BE RESOLVED EXCLUSIVELY BY THE UNITED STATES BANKRUPTCY COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY AGREE AND CONSENT TO THE EXCLUSIVE
JURISDICTION OF THAT COURT. THE PARTIES FURTHER AGREE THAT THE PREVAILING PARTY
OF ANY SUCH ACTION SHALL BE ENTITLED TO RECOVER ITS REASONABLE ATTORNEY'S FEES
INCURRED IN PROSECUTING OR DEFENDING THAT DISPUTE.
27. GOVERNING LAW. THE PARTIES AGREE THAT, NOTWITHSTANDING ANY
CONFLICTS OF LAWS PRINCIPLES, ANY DISPUTE CONCERNING THE SETTLEMENT DOCUMENTS
WILL BE GOVERNED BY NEW YORK LAW.
19
28. Notices. Any notice, request, consent, payment, demand or other
communication required or permitted to be given under this Agreement or any
other Settlement Document shall be in writing and shall be deemed to have been
duly given on the date of service if served personally on the party or parties
to whom notice is given, or on the 10th day after mailing if mailed to the party
to whom the notice is to be given by certified mail, return receipt requested,
postage prepaid and properly addressed as follows:
If to the Enron Parties:
Enron Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to the EOTT Parties:
EOTT Energy Corp.
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Vice President and General Counsel
Facsimile: (000) 000-0000
Either party may change its address for the purposes of this Section 28 by
giving the other party hereto written notice of the new address in the manner
set forth above.
29. No Survival of Representations. The Parties agree and stipulate
that none of the representations and warranties contained in this Agreement
shall survive the Closing Date, and no Party hereto shall have any right to
bring suit for breach of this Agreement or any other Settlement Document in the
event of a breach of a representation or warranty.
30. Entire Agreement and Integration Clause. Except as evidenced by the
other Settlement Documents, this Agreement integrates the whole of all
agreements and understandings of any sort or character between the Parties
concerning the subject matter of this Agreement, and supercedes all prior
negotiations, discussions, or agreements of any sort whatsoever, whether oral or
written. There are no representations, agreements, or inducements, except as set
forth expressly and specifically in this Agreement and the other Settlement
Documents. THERE ARE NO UNWRITTEN OR ORAL UNDERSTANDINGS, AGREEMENTS, OR
REPRESENTATIONS OF ANY SORT WHATSOEVER CONCERNING THE SUBJECT MATTER OF THE
SETTLEMENT DOCUMENTS, IT BEING STIPULATED
20
THAT THE RIGHTS OF THE PARTIES HERETO AGAINST ANY OPPOSING PARTY HERETO SHALL BE
GOVERNED EXCLUSIVELY BY THIS AGREEMENT.
31. Further Assurances. The Parties shall execute, acknowledge, deliver
or cause to be executed, acknowledged or delivered, all further documents as
shall be reasonably necessary or convenient to carry out the provisions of this
Agreement and the Settlement Documents.
32. Amendments in Writing. This Agreement may only be amended or
modified if such amendment, modification or waiver is in writing and signed by
all Parties and authorized pursuant to an order of each of the Enron Bankruptcy
Court and the EOTT Bankruptcy Court. No waiver of any breach of this Agreement
shall be construed as an implied amendment or agreement to amend or modify any
provision of this Agreement.
33. No Waiver. The failure by any of the Parties to enforce at any
time, or for any period of time, any one or more of the terms or conditions of
this Agreement or any other Settlement Document, or a course of dealing between
the Parties, shall not be a waiver of such terms or conditions or of such
Party's right thereafter to enforce each and every term and condition of this
Agreement and the other the Settlement Documents.
34. Construction. Words in this Agreement of any gender or neuter shall
be construed to include any other gender or neuter where appropriate. Words used
in this Agreement that are either singular or plural shall be construed to
include the other where appropriate.
35. Headings. Headings are for convenience only and shall not limit,
expand, affect, or alter the meaning of any text.
36. Binding on Successors and Assigns. The exhibits and schedules to
this Agreement are expressly incorporated herein by reference. This Agreement
and each exhibit and schedule hereto shall be binding on and shall inure to the
benefit of the Parties hereto and their respective successors and assigns, and
is enforceable against them in accordance with its terms.
37. Multiple Counterparts and Facsimile Signatures. This Agreement may
be executed in counterparts. All counterparts hereof shall collectively
constitute a single agreement. This Agreement may be executed and delivered by
facsimile copies, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
21
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
EOTT ENERGY CORP. ENRON CORP.
By: /s/ Xxxx X. Xxxxx mms By: /s/ Xxxxxxx X. Xxxxx, Xx.
----------------------------------- ------------------------------
Name: Xxxx X. Xxxxx Name: Xxxxxxx X. Xxxxx, Xx.
Title: CEO & President Title: Executive Vice President
EOTT ENERGY PARTNERS, L.P. ENRON NORTH AMERICA CORP.
By: EOTT Energy Corp., as general partner
By: /s/ Xxxx X. Xxxxx mms By: /s/ L. Xxx Xxxxxx
----------------------------------- ------------------------------
Name: Xxxx X. Xxxxx Name: L. Xxx Xxxxxx
Title: CEO & President Title: President
EOTT ENERGY OPERATING LIMITED PARTNERSHIP ENRON PIPELINE SERVICES COMPANY
By: EOTT Energy General Partner, LLC., as
general partner
By: /s/ Xxxx X. Xxxxx mms By: /s/ Xxxxx Xxxxxxxx
------------------------------------- -------------------------------
Name: Xxxx X. Xxxxx Name: Xxxxx Xxxxxxxx
Title: CEO & President Title: VP
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP EGP FUELS COMPANY
By: EOTT Energy General Partner, LLC., as
general partner
By: /s/ Xxxx X. Xxxxx mms By: /s/ Xxxxx Xxxxxxxx
---------------------------------- -------------------------------
Name: Xxxx X. Xxxxx Name: Xxxxx Xxxxxxxx
Title: CEO & President Title: VP
EOTT Energy GENERAL Partner, LLC Enron Gas Liquids, Inc.
By: /s/ Xxxx X. Xxxxx mms By: /s/ Xx Xxxxx
----------------------------------- -------------------------------
Name: Xxxx X. Xxxxx Name: Xx Xxxxx
Title: CEO & President Title: President
EOTT ENERGY CANADA LIMITED PARTNERSHIP ENRON ENERGY SERVICES, INC.
By: EOTT Energy General Partner, LLC, as
general partner
By: /s/ Xxxx X. Xxxxx mms By: /s/ Xxxxxx X. Xxxxxx
----------------------------------- ------------------------------
Name: Xxxx X. Xxxxx Name: Xxxxxx X. Xxxxxx
Title: CEO & President Title: President
EOTT ENERGY LIQUIDS, L.P.
By: EOTT Energy General Partner, LLC, as
general partner
By: /s/ Xxxx X. Xxxxx mms
---------------------------------
Name: Xxxx X. Xxxxx
Title: CEO & President:
EOTT CANADA, LTD.
By: /s/ Xxxx X. Xxxxx mms
---------------------------------
Name: Xxxx X. Xxxxx
Title: CEO & President
EOTT Energy Finance Corp.
By: /s/ Xxxx X. Xxxxx mms
---------------------------------
Name: Xxxx X. Xxxxx
Title: CEO & President:
Schedule 16(g)
Subsidiaries
EOTT Energy General Partner, LLC
EOTT Energy Pipeline Limited Partnership
EOTT Energy Operating Limited Partnership
EOTT Energy Canada Limited Partnership
EOTT Energy Liquids, L.P.
EOTT Energy Finance Corp.
24
EXHIBIT A
FORM OF EMPLOYEE TRANSITION AGREEMENT
25
EMPLOYEE TRANSITION AGREEMENT
AMONG
ENRON PIPELINE SERVICES COMPANY
AND
EOTT ENERGY CORP.,
AS GENERAL PARTNER ON BEHALF OF
EOTT ENERGY PARTNERS, L.P.,
AND
EOTT ENERGY GENERAL PARTNER, LLC, AS THE GENERAL PARTNER OF AND ON
BEHALF OF EOTT ENERGY OPERATING LIMITED PARTNERSHIP, AND EOTT
ENERGY PIPELINE LIMITED PARTNERSHIP
Dated October 8, 2002
26
EMPLOYEE TRANSITION AGREEMENT
THIS EMPLOYEE TRANSITION AGREEMENT is entered into by and
between Enron Pipeline Services Company, a Delaware corporation ("ENRON"), and
EOTT Energy General Partner, LLC, a Delaware limited liability company, in its
capacity as the general partner and on behalf of EOTT Energy Operating Limited
Partnership, a Delaware limited partnership ("EOLP"), and EOTT Energy Pipeline
Limited Partnership, a Delaware limited partnership (together with EOLP the
"OPERATING PARTNERSHIPS"), and EOTT Energy Corp., a Delaware corporation
("EEC"), in its capacity as the general partner and on behalf of EOTT Energy
Partners, L.P. (the "PARTNERSHIP") (the Operating Partnerships and the
Partnership are hereinafter referred to as the "EOTT PARTIES"). The EOTT Parties
and Enron are hereinafter collectively referred to as the "Parties", and any one
of them a "Party" (together with all schedules, appendices and exhibits, if any,
attached and made a part hereof, this "AGREEMENT").
WHEREAS, Enron and the Operating Partnerships desire to
terminate the Operation and Service Agreement and transition certain Enron
employees to the EOTT Parties on the terms and subject to the conditions of this
Agreement;
WHEREAS, the EOTT Parties agree to make offers of employment to those
certain Enron employees in the manner and according to the terms and provisions
stated herein;
WHEREAS, the Parties desire to set forth their respective rights and
responsibilities with regard to the transition of Eligible Transition Employees
(as defined below) and any other matters addressed herein;
NOW THEREFORE, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
Except as otherwise indicated by the context, all capitalized terms
used in this Agreement shall have the meanings set forth below:
"AD&D PLAN" shall have the meaning ascribed to such term in Section 4.2(f)(i).
"APPROVAL DATE" means the date on which both the Final EOTT Order shall have
been entered in the EOTT Bankruptcy Court and the Final Enron Order shall have
been entered in the Enron Bankruptcy Court.
"COBRA" shall have the meaning ascribed to such term in Section 3.2.
"DISPUTED AMOUNT" shall have the meaning ascribed to such term in the
Settlement
Agreement.
"EFFECTIVE DATE" shall mean the first day of the first full payroll period after
the Approval Date and when all of the conditions precedent identified in Article
11 herein have been satisfied or waived, unless otherwise agreed between the
parties.
"ELIGIBLE TRANSITION EMPLOYEES" shall mean all individuals employed by Enron who
are currently assigned to perform work on the Facilities affected by this
Agreement and such other Enron employees as may be listed in Schedule A,
attached hereto and made a part hereof, as such Schedule A may be revised from
time to time as agreed between the parties.
"ENRON BANKRUPTCY COURT" means the United States Bankruptcy Court for the
Southern District of
New York.
"ENRON INDEMNITEES" shall have the meaning ascribed to such term in Section 7.1.
"EOTT BANKRUPTCY COURT" means the United States Bankruptcy Court for the
Southern District of Texas presiding over the jointly administered chapter 11
cases of certain of the EOTT Parties.
"THE EOTT PARTIES' PLANS" shall have the meaning ascribed to such term in
Section 3.3.
"ESOP" shall have the meaning ascribed to such term in Section 4.1(c)(i).
"FACILITIES" shall have the same meaning as defined in the Operation and Service
Agreement.
"FINAL EOTT ORDER" shall have the meaning ascribed to such term in the
Settlement Agreement.
"FINAL ENRON ORDER" shall have the meaning ascribed to such term in the
Settlement Agreement.
2
"FINAL INVOICE" shall mean an invoice prepared by Enron in good faith estimating
all costs incurred by Enron under the Operation and Service Agreement since the
last invoice delivered by Enron through the Effective Date, including, but not
limited to, the Transition Expenses.
"GOVERNMENTAL AUTHORITY" means, with respect to any Person, any country, state,
county, city or political subdivision that exercises jurisdiction over such
Person or such Person's property or assets, and any court, agency, department,
commission, board, bureau or instrumentality of any of them.
"LAW" means, collectively, any law, statute, rule, regulation, ordinance, order,
directive, code, interpretation, judgment, decree, injunction, writ, permit,
license, authorization, or decision or agreement with or by any Governmental
Authority, and including Environmental Law.
"LTD PLAN" shall have the meaning ascribed to such term in Section 4.2(a)(i).
"NOTE" shall have the meaning ascribed to such term in the
Settlement Agreement.
"OPERATOR CONTROLLED GROUP" shall have the meaning ascribed to such term in
Section 3.1.
"OPERATION AND SERVICE AGREEMENT" shall mean the Operation and Service Agreement
executed between Enron Pipeline Services Company and EOTT Energy Corp., a
Delaware corporation, solely in its capacity as the general partner of EOTT
Energy Operating Limited Partnership, a Delaware limited partnership, and EOTT
Energy Pipeline Limited Partnership, a Delaware limited partnership, and dated
and effective as of October 1, 2000, as amended.
"O&S AGREEMENT INDEMNITY" shall have the meaning ascribed to such term in the
Settlement Agreement.
"PERSON" means any individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
organization, joint venture, firm, or other entity or a government or any
political subdivision or agency, department, or instrumentality thereof.
"SAVINGS PLAN" has the meaning ascribed to such term in Section 4.1(b).
"
SETTLEMENT AGREEMENT" shall mean that
SETTLEMENT AGREEMENT entered into as of
the 7th day of October, 2002 by and among EOTT Energy Partners, L.P., a Delaware
limited partnership, EOTT Energy Corp., a Delaware corporation, EOTT Energy
General Partner, LLC, a Delaware limited liability company, EOTT Energy Pipeline
Limited Partnership, a Delaware limited partnership, EOTT Energy Operating
Limited Partnership, a Delaware limited partnership, EOTT Energy Canada Limited
Partnership, a Delaware limited partnership, EOTT Energy Liquids, L.P., as
Delaware limited partnership, EOTT Energy Finance Corp., a Delaware corporation,
and EOTT Canada Ltd., an Alberta corporation on the one hand, and Enron Corp.,
an Oregon corporation and as debtor-in-possession, Enron North America Corp., a
Delaware corporation and as debtor-in-possession, Enron Energy Services, Inc., a
Delaware corporation and as debtor-in-possession Enron Pipeline Services
Company, a Delaware corporation, EGP Fuels Company, a Delaware corporation, and
Enron Gas Liquids, Inc., a Delaware corporation and as debtor-in-possession, on
the other.
3
"SYSTEM EMPLOYEES" shall mean those Eligible Transition Employees who become
employed by EEC pursuant to the terms and provisions of this Agreement.
"TRANSITION EXPENSES" shall have the meaning ascribed to such term in Section
2.1.
ARTICLE 2
EMPLOYMENT OF SYSTEM EMPLOYEES
2.1 Certain Obligations with Respect to Eligible Transition Employees. The
EOTT Parties and Enron shall be responsible for, on an equal basis,
reasonable winddown costs, incurred by Enron as a result of the
transition of Eligible Transition Employees. The EOTT Parties' share of
such costs are the "TRANSITION EXPENSES". Projected winddown costs are
set forth on Exhibit B hereto.
2.2 Employment of System Employees. The EOTT Parties shall make or cause to
be made an offer of employment to each Eligible Transition Employee,
and will initially employ or cause to be employed each such Eligible
Transition Employee at not less than the current base compensation such
System Employee was paid by Enron; provided, however, nothing in this
Agreement shall operate or be construed to prevent the EOTT Parties
from subsequently increasing or decreasing any such System Employee's
base compensation in such a manner as the EOTT Parties may deem
appropriate or from terminating any System Employee.
ARTICLE 3
EMPLOYMENT MATTERS
3.1 System Employees. Enron has delivered the Schedule of Eligible
Transition Employees on a confidential basis to the Vice President,
Human Resources at EEC with the Schedule showing the name, job
position, work location, base compensation and years of past service
credit for all Eligible Transition Employees. Enron will provide the
EOTT Parties, on a confidential basis, relevant written information in
Enron's possession regarding each such individual's work
qualifications, training history, and prior jobs held while employed by
any affiliate of Enron or the EOTT Parties. The EOTT Parties agree to
cause a member or members of the controlled group under IRC Section
1563(c)(2)(A) of which Enron is a member (the "OPERATOR CONTROLLED
Group") to make offers of employment as of the Effective Date to such
Eligible Transition Employees with such offers of employment to be made
within thirty (30) days of the date of execution of the Agreement.
Additionally, the EOTT Parties shall require that all acceptances of
employment by the System Employees be received by the EOTT Parties on
or before fifteen (15) days prior to the anticipated Approval Date,
unless otherwise agreed between the parties. The EOTT Parties agree
that such offers of employment shall be made in accordance with this
Section. The offered employment shall be at levels of compensation
consistent with the EOTT Parties' salary policies for jobs of similar
responsibilities, but in accordance with Section 2.2 above. If the EOTT
Parties offer an Eligible Transition Employee employment hereunder that
requires a relocation beyond fifty (50) miles from that Eligible
Transition Employee's current work
4
location, the EOTT Parties shall pay relocation benefits in accordance
with Enron's relocation policy.
3.2 COBRA Continuation Coverage. Enron shall be responsible for the health
care claims of any Eligible Transition Employees prior to the Effective
Date, as required by the Consolidated Omnibus Reconciliation Act of
1985 ("COBRA") under affected medical plans sponsored by Enron. The
EOTT Parties shall be responsible for providing health care
continuation coverage, if any, as required by COBRA to any of the
System Employees who are employed by the EOTT Parties as of or
subsequent to the Effective Date and who cease employment with the EOTT
Parties for any reason thereafter.
3.3 Participation In the EOTT Parties' Plans. Subsequent to the Effective
Date, upon employment with the EOTT Parties or one of its affiliates,
the System Employees shall be eligible for participation in all
employee benefit plans (within the meaning of Section 3(3) of ERISA)
for which similarly situated employees of the EOTT Parties are eligible
("EOTT PARTIES' PLANS"). The EOTT Parties shall recognize all credited
service dates accepted by Enron in all service and vesting requirements
for System Employee participation. Under the EOTT Parties' Plans, the
System Employees will be given credit for Past Service (defined below)
for purposes of (i) determining eligibility for participation
(including, without limitation, eligibility for early retirement), and
(ii) determining the duration and amount, if any, of disability
benefits. "PAST SERVICE" means (i) service as an employee of Enron or
any of its affiliates and (ii) service as an employee of any other
entity, but only to the extent that such service is recognized under
the applicable and similar plan of the EOTT Parties, and is continuous
through the Effective Date.
3.4 No Medical Preexisting Condition. No preexisting condition, exclusion,
or limitation shall be applicable with respect to the participation and
coverage of any System Employee or dependent in any of the EOTT
Parties' Plans which is a medical benefit plan.
3.5 Responsibility for Claims. Employee benefit claims for expenses
incurred by, or for services provided to, Eligible Transition Employees
or their dependents which occur prior to the Effective Date shall be
covered under the Enron sponsored plans. Employee benefit claims for
expenses incurred by, or for services provided to, System Employees or
their covered dependents which occur on or after the Effective Date
shall be covered under the EOTT Parties' Plans. The amount and type of
benefits payable in any case shall be determined in accordance with the
terms of the applicable employee benefit plan.
3.6 Information From Enron. Enron shall furnish the EOTT Parties with
copies of the relevant information from each Eligible Transition
Employee's personnel files and historical compensation data, and such
other information that is reasonably requested by the EOTT Parties for
the purpose of carrying out the provisions of this Section 3.1, except
as may be prohibited by law or contractual obligation, or which in the
opinion of Enron contains subjective opinion that may expose Enron to
potential liability.
5
ARTICLE 4
SPECIFIC BENEFIT PLAN TRANSITION OBLIGATIONS
4.1 Enron's Pension Plans.
(a) Enron Corp. Cash Balance Plan. System Employees shall continue
to be eligible to participate in the Enron Corp. Cash Balance
Plan on or after the Effective Date for as long as EEC is a
participating employer in such plan.
(b) Enron Corp. Savings Plan.
System Employees shall continue to be eligible for
participation in the Enron Corp. Savings Plan ("SAVINGS PLAN")
for as long as EEC is a participating employer in such plan.
The account of each System Employee who is a participant in
the Savings Plan shall continue to be held by the Trustee of
the Savings Plan in accordance with the applicable terms and
provisions of the Savings Plan, and shall be distributed to
System Employee participants according to the terms and
provisions of the Savings Plan regarding the time and manner
of payment of benefits.
(c) Enron Corp. Employee Stock Ownership Plan.
(i) System Employees who are already participants therein
will remain participants in the Enron Employee Stock
Ownership Plan ("ESOP") as long as EEC is a
participating employer in such plan.
(ii) The account of each System Employee who is a
participant in the ESOP shall continue to be held by
the Trustee of the ESOP in accordance with the
applicable terms and provisions of the ESOP, and
shall be distributed to participants according to the
terms and provisions of the ESOP regarding the time
and manner of payment of benefits.
4.2 EOTT Parties Sponsored Employee Welfare Benefit Plans. The System
Employees and their dependents shall participate in the EOTT Parties
Plans which are employee welfare benefit plans maintained by the EOTT
Parties for its employees.
(a) Long Term Disability Benefits.
(i) Eligible Transition Employees who were on Enron's
sick pay policy on the Effective Date shall be
eligible at the end of their sick pay period to
6
apply for and receive benefits to which they are
entitled under the provisions of the Enron Long Term
Disability Plan ("LTD PLAN").
(ii) Enron shall be responsible for all long term
disability cases existing under the LTD Plan on the
Effective Date, including cases and events for
Eligible Transition Employees which occurred on or
prior to the Effective Date.
(iii) Eligible Transition Employees who are receiving or
entitled to receive long term disability benefits
under the LTD Plan as provided in 4.2 (a) (i) and
(ii) above shall continue to receive or be entitled
to receive benefits under such plan, in addition to
any other Enron benefits pertaining to long term
disability recipients, on or after the Effective
Date.
(iv) System Employees shall be eligible for long term
disability benefits under the EOTT Parties' Plans
which provide such benefits.
(b) Sick Pay Benefits. Employees who are receiving sick pay under
the Enron sick policy on the Effective Date shall continue to
be paid by Enron under such policy until the earlier of (i)
the employee being released to return to active work or (ii)
the expiration of sick pay benefits. Upon being released to
return to work, such Eligible Transition Employees shall
receive an offer of employment from the EOTT Parties, provided
such return to work release date is not greater than six (6)
months from Effective Date. Upon returning to active
employment status, such employees who become System Employees
will terminate participation in the Enron plans and become
participants in the EOTT Parties' Plans.
(c) Medical Benefits.
(i) Eligible Transition Employees who were confined to a
hospital or medical care facility on the Effective
Date shall remain covered under the Enron Medical
Plan until the earlier of (1) the termination of
benefits or (2) the employee being released to return
to active work. System Employees who have covered
dependents confined to a hospital or medical care
facility on the Effective Date shall remain covered
under the Enron Medical Plan until the earlier of (1)
the termination of benefits or (2) the dependents are
released from confinement.
(ii) Expenses for covered medical treatment under the
Enron Medical Plan incurred by System Employees and
their dependents prior to the Effective Date shall be
covered under the Enron Medical Plan and shall be
filed with Enron or its claims administrator. System
Employees and their dependents who incur expenses
prior to the Effective Date may file claims under the
Enron Medical Plan for a period of one year following
the Effective Date.
7
After the Effective Date, the amount applied toward
deductibles and out of pocket maximums in the Enron's Medical
Plan from January 1, 2002 up to the Effective Date, will be
recognized toward satisfaction of deductibles and out of
pocket maximums under the EOTT Parties' Plans which provide
medical benefits for the calendar year 2002. For such amounts
to be recognized, Enron will be required to provide an
electronic tape feed to the appropriate ASO vendor within 15
days after the Effective Date with the deductibles and out of
pocket maximums amounts applied under the Enron plans which
provided medical benefits
(iv) System Employees whose employment with the EOTT
Parties terminates after the Effective Date shall be
eligible to receive medical and dental benefits under
the EOTT Parties' Plans which provide post employment
and retiree medical and dental benefits according to
the provisions of such plans. Financial
responsibility for such medical and dental coverage
and claims, as well as coverage and claims for their
covered dependents, shall rest solely with the EOTT
Parties.
(d) Dental Benefits.
(i) Claims for dental expenses incurred before the
Effective Date shall be filed and paid under the
Enron Dental Plan. Claims for dental expenses
incurred on or after the Effective Date shall be
filed under the EOTT Parties' Plans which provide
dental benefits.
(ii) Amounts applied to the orthodontia lifetime maximum
under the Dental Plan shall also apply to the
orthodontia lifetime maximum under the EOTT Parties
Plans for eligible treatment in progress on the
Effective Date. Orthodontia treatment in progress
under the Enron Dental Plan for covered System
Employees and their dependents age 19 and younger,
shall terminate on the Effective Date. For such
amounts to be recognized, Enron will be required to
provide an electronic tape feed to the appropriate
ASO vendor within 15 days after the Effective Date
with the amounts paid under the Enron dental plan for
orthodontia treatment up to the Effective Date.
(iii) After the Effective Date, the amount applied toward
deductibles and out of pocket maximums in the Enron
Dental Plan from January 1, 2002 up to the Effective
Date will be recognized toward satisfaction of
deductibles and out of pocket maximums in the EOTT
Parties' Plans. For such amounts to be recognized,
Enron will be required to provide an electronic tape
feed to the appropriate ASO vendor within 15 days
after the Effective Date with the deductibles and out
of pocket maximums amounts applied under the Enron
plans which provided dental benefits.
(e) Life Insurance Benefits.
8
(i) System Employees who enroll for life insurance
coverage under the EOTT Plans shall not be considered
late entrants and will not be required to provide
certification of health status for issue levels up to
$300,000.
(ii) Enron will be responsible for the life insurance
benefits for any Eligible Transition Employee who
remains covered by an Enron sick pay plan as provided
in Section 4.2(b).
(f) Accidental Death and Dismemberment Benefits.
(i) The Enron Accidental Death & Dismemberment Plan (the
"AD&D PLAN") shall be responsible for the payment of
all claims for or relating to accidental injuries and
deaths occurring before the Effective Date, provided
such claims are filed within one year of the
Effective Date.
(ii) Eligible Transition Employees who are covered under
the Enron sick pay plan as provided in Section 4.2(b)
on the Effective Date shall remain covered under the
AD&D Plan until the earlier of (1) the termination of
such coverage or (2) return to active work.
(g) Section 125 Spending Accounts. System Employees shall be able
to submit medical or dependent care expenses to Enron for any
expenses incurred prior to the Effective Date for
reimbursement under the provisions of the Enron Section 125
Spending Account Plans, except any System Employee who enrolls
under COBRA Provisions shall be eligible to participate in the
COBRA Spending Accounts. No Spending Account balances will be
transferred to the EOTT Parties by Enron as part of the
transition obligations.
(h) Education Reimbursement. Enron's obligation for education
reimbursement to System Employees is limited to those System
Employees who have already received approval for and completed
by the Effective Date a course approved under the Enron
Education Reimbursement Plan. The EOTT Parties have currently
suspended any educational reimbursement plans.
(i) Vacation. System Employees with a 2002 unused vacation balance
with Enron as of the Effective Date will transfer their
vacation balance to the EOTT Parties. Beginning January 1,
2003, a System Employee's vacation will be earned and accrued
at the end of each month and be paid at the base rate of pay
at the time the vacation is used. The Enron continuous service
date of a System Employee will be recognized for the EOTT
Parties vacation accrual. For System Employees whose vacation
accrual rate is established at three weeks with a vacation
eligibility date on or after January 1, 2000, the EOTT Parties
will continue to recognize this same vacation accrual.
9
(j) Holiday. System Employees will continue on the Enron holiday
schedule for the remainder of 2002 with an exception to the
Christmas Observance Holiday on December 24, 2002. The EOTT
Parties will recognize the Enron Christmas Observance Holiday
as one (1) EOTT Parties' Discretionary Holiday. The EOTT
Parties will recognize one (1) Enron Discretionary Holiday if
the System Employee has not used this discretionary holiday as
of the Effective Date. Beginning January 1, 2003, all System
Employees will follow the EOTT Parties' holiday schedule.
4.3 Enron Stock Option Plan. Options currently granted to System Employees
under any Enron Corp. stock plan or program shall continue under normal
vesting requirements, as set out in such plan or program, as long as
the System Employees are employed by Enron or the EOTT Parties.
4.4 Workers Compensation Claims. Enron shall be responsible for any Workers
Compensation claims filed by any System Employees prior to the
Effective Date. The EOTT Parties shall be responsible for all Workers
Compensation claims filed by System Employees after the Effective Date.
ARTICLE 5
RECORDS AND AUDITS
Records Maintenance and Audits. Enron shall, for a period required by
law after the termination of this Agreement, maintain records and other evidence
sufficient to accurately and properly reflect charges and distributions related
to the Employee Benefits matters hereunder. Enron agrees to send the original
records on the System Employees to the EOTT Parties, and retain copies, as set
out in Section 3.6 above. The EOTT Parties or their representatives shall have
access at all reasonable times and with reasonable notice to review such records
to administer the plans. Any audits performed by or on behalf of the EOTT
Parties shall be at the EOTT Parties' sole cost and expense.
ARTICLE 6
CONFIDENTIALITY
Each party acknowledges that in connection with its
performance under this Agreement, it may gain access to confidential material
and information which is proprietary to the other party. Unless otherwise
required by law, each party agrees:
(a) to hold such material and information in strict confidence and
not make use thereof other than for performance under or
enforcement of this Agreement;
(b) to reveal such material and information only to those
employees requiring such information in connection with the
performance of the employee benefits matters only after such
employees agree to be bound by the provisions of this
confidentiality provision; and
10
(c) not to reveal such material and information to any third
person, except as necessary in connection with this Agreement,
or as may be required by law or court proceeding, and then
only to the extent that such persons agree to be bound by the
confidentiality obligations set forth herein.
This confidentiality provision shall survive for a period of three
years following the expiration or termination of this Agreement.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification by the EOTT Parties. The EOTT
Parties agree to protect, defend, indemnify and hold harmless Enron and
its employees, officers, directors, agents and representatives, at the
EOTT Parties' cost and expense, from and against any and all claims,
demands or causes of action, and will reimburse Enron for any and all
costs, liabilities, judgments, and expenses (including attorneys' fees)
reasonably incurred by Enron in connection with the investigation,
preparing for and defending against any such claim, demand or cause of
action, whether or not resulting in any liability, and any amount paid
in settlement of any litigation, commenced or threatened, or of any
such claim, demand or cause of action if such settlement is effected
with the written consent of the EOTT Parties, under, arising out of, or
attributable to any the EOTT Parties' employee benefit plan, program
operative or any act or omission by the EOTT Parties or their employees
or agents with respect to an Enron Plan.
7.2 Indemnification Procedures. Promptly after
receipt by a party indemnified (the "INDEMNIFIED PARTY") under this
Article 7 of notice of the commencement of any action or the written
assertion of any claim or demand, the Indemnified Party shall, if a
claim in respect thereof is to be made against an indemnifying party
(the "INDEMNIFYING PARTY") under this Article 7, notify the
Indemnifying Party in writing of the commencement or the written
assertion thereof; but the omission so to notify the Indemnifying Party
shall not relieve it from any liability which it may otherwise have to
the Indemnified Party. In case any such action, claim or demand shall
be brought or asserted against any Indemnified Party, it shall notify
the Indemnifying Party, who shall be entitled to participate therein
or, upon request by the Indemnifying Party, the Indemnified Party may
assume the defense thereof with counsel reasonably satisfactory to the
Indemnifying Party. In the alternative, the Indemnifying Party may
assume the defense thereof with counsel reasonably satisfactory to the
Indemnified Party. Upon assumption by the Indemnifying Party of the
defense of such action, claim or demand, the Indemnified Party shall
have the right to participate in such action, claim or demand and to
retain its own counsel, but the Indemnifying Party shall not be liable
to the Indemnified Party under Article 7 for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred
by the Indemnified Party, in connection with the defense thereof other
than reasonable costs of investigation and preparation, unless the
Indemnifying Party and the Indemnified Party are named parties to any
such action, claim or demand (including any impleaded parties) and
11
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them.
7.3 Survival. The agreements contained in this
Article 7 shall remain operative and in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of Enron, the EOTT Parties, or any
of their respective officers or directors or any controlling person,
and shall survive the termination of this Agreement.
7.4 Other Beneficiaries. The reimbursement and
indemnity obligations of the EOTT Parties under this Article 7 shall be
in addition to any liability which the EOTT Parties may otherwise have
and shall be binding upon and inure to the benefit of any successors,
assigns, heirs and personal representatives of the EOTT Parties and
their employees, officers, directors, agents and representatives.
ARTICLE 8
TERM OF AGREEMENT
This Agreement shall be effective as of the Effective Date and shall
continue in force and effect for one year after the Effective Date.
ARTICLE 9
MISCELLANEOUS
9.1 Assignability.
(a) Enron shall not assign, in whole or in
part, any of the rights, obligations or benefits arising under
this Agreement without the prior written consent of the EOTT
Parties, which consent may not be unreasonably withheld,
except by operation of law, and except that Enron may assign
its rights, obligations and benefits hereunder to any entity
controlled by, under common control with, or which controls
such party, provided Enron shall continue to remain jointly
and severally liable for all of its assignee's obligations
hereunder.
(b) The EOTT Parties may assign, in whole or
in part, any of the rights, obligations or benefits arising
under this Agreement to a subsidiary, affiliate or related
third party, without the prior written consent of Enron, but
with written notice to Enron of such assignment, provided the
EOTT Parties shall continue to remain jointly and severally
liable for all of its assignee's obligations hereunder.
9.2 Injunctions. The parties acknowledge that
irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. The parties hereto shall be entitled
to an injunction or injunctions to prevent breaches of the provisions
of this Agreement and to enforce specifically the terms and provisions
hereof in any court
12
having jurisdiction, such remedy being in addition to any other remedy
to which they may be entitled at law or in equity.
9.3 Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES ARISING OUT OF THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
9.4 Notices. Any notice, request, consent, payment,
demand or other communication required or permitted to be given under
this Agreement shall be in writing and shall be deemed to have been
duly given on the date of service if served personally on the party or
parties to whom notice is given, or on the 10th day after mailing if
mailed to the party to whom the notice is to be given by certified
mail, return receipt requested, postage prepaid and properly addressed
as follows:
If to Enron:
Enron Pipeline Services Company.
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: General Counsel
Legal Department
If to EOTT Parties:
EOTT Energy Corp.
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: General Counsel
Legal Department
Either party may change its address for the purpose of this Section 9.4
by giving the other party hereto written notice of the new address in
the manner set forth above.
9.5 Further Assurances. Subject to the provisions
hereof, the parties hereto shall make, execute, acknowledge and deliver
such other instruments and documents, and take all such other actions,
as may be reasonable required in order to effectuate the purposes of
this Agreement and to consummate the transactions contemplated hereby.
Subject to the provisions hereof, each of the parties shall, in
connection with entering into this Agreement, performing its
obligations hereunder and taking any and all actions relating hereto,
comply with all applicable laws, regulations, orders and decrees,
obtain all required consents and approvals and make all required filing
with any governmental agency, other regulatory or administrative
agency, commission or similar authority and promptly provide the other
parties with all such information as they may reasonably request in
order to be able to comply with the provisions of this section.
13
9.6 Change of Law. If, due to any change in
applicable law or regulations or the interpretation thereof by any
court of law or other governing body having jurisdiction subsequent to
the date of this Agreement, performance of any provision of this
Agreement or any transaction contemplated thereby shall become
impracticable or impossible, the parties hereto shall use their best
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such provision.
9.7 Headings. Descriptive headings are for
convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
9.8 Severability. In the event any portion of this
Agreement shall be found by a court of competent jurisdiction to be
unenforceable, that portion of this Agreement will be null and void and
the remainder of this Agreement will be binding on the parties as if
the unenforceable provisions had never been contained herein.
9.9 No Third Party Beneficiaries. Nothing in this
Agreement shall provide any benefit to any third party or entitle any
third party to any claim, cause of action, remedy or right of any kind,
it being the intent of the parties that this Agreement shall not be
construed as a third party beneficiary contract; provided, however,
that the indemnification provisions in Article 7 shall inure to the
benefit of the Enron Indemnitees as provided in Article 7.
9.10 Waiver. No waiver by either party of any term or
breach of this Agreement shall be construed as a waiver of any other
term of breach hereof or of the same or a similar or breach on any
other occasion.
9.11 Amendment. No modification or amendment of this
Agreement shall be binding upon either party unless in writing and
signed by the parties hereto.
9.12 Entire Agreement. This Agreement, together with
all Schedules attached hereto, constitutes the entire agreement between
the parties pertaining to the subject matter hereof, and supersedes all
prior agreements, understandings, negotiations and discussions, whether
oral or written, of the parties hereto regarding the subject matter
hereof.
9.13 Disputes. The Parties hereby agree that any dispute arising under this
Agreement shall be submitted to the Enron Bankruptcy Court for
resolution
9.14 Counterparts. This Agreement may be executed and delivered in multiple
counterparts, each of which for all purposes shall be deemed an
original, and all counterparts shall together constitute but one and
the same instrument.
ARTICLE 10
FINAL INVOICE
14
Within sixty (60) days after the Effective Date, Enron shall submit a
statement to the EOTT Parties reconciling the Final Invoice with the actual
costs incurred by Enron under the Operation and Services Agreement for the
period covered by the Final Invoice, including the Transition Costs ("ACTUAL
COSTS"). The amount by which the Actual Costs exceed the Final Invoice shall be
paid upon demand to Enron less any Disputed Amount. The amount by which the
Final Invoice exceeds the Actual Costs, less any Disputed Amount, shall be
applied against the principal outstanding under the Note. The Parties shall
resolve any Disputed Amount as set forth in Section 20, Disputed Payments, of
the
Settlement Agreement.
ARTICLE 11
CONDITIONS PRECEDENT
The obligation of Enron to consummate the transactions contemplated by
this Agreement is subject, in the discretion of Enron, to the satisfaction of
each of the following conditions (any of which, in Enron's absolute and sole
discretion, may be waived in whole or in part):
(a) The entry of a Final EOTT Order;
(b) The entry of a Final Enron Order;
(c) No breach of any term or condition of the Settlement Agreement
shall have occurred; and
(d) The EOTT Parties shall have paid, and Enron shall have received,
payment in full for all invoices, less any Disputed Amount, Enron has submitted
under the Operation and Service Agreement for the period August 1, 2002 through
the Effective Date, including, but not limited to, the Final Invoice.
ARTICLE 12
OPERATION AND SERVICE AGREEMENT
The parties hereby agree that, upon the Effective Date of this
Agreement, the Operation and Service Agreement shall be terminated, and be of no
further force and effect except for the rights with respect to the O&S Agreement
Indemnity.
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the 8th day of October, 2002, but EFFECTIVE FOR ALL PURPOSES as
of the Effective Date.
ENRON PIPELINE SERVICES COMPANY
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
EOTT ENERGY GENERAL PARTNER, LLC, SOLEY IN
ITS CAPACITY AS THE GENERAL PARTNER OF AND
ON BEHALF OF EOTT ENERGY OPERATING LIMITED
PARTNERSHIP, AND EOTT ENERGY PIPELINE
LIMITED PARTNERSHIP
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
EOTT ENERGY CORP., SOLELY IN ITS CAPACITY
AS THE GENERAL PARTNER OF AND ON BEHALF OF
EOTT ENERGY PARTNERS, L.P.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
16
SCHEDULE A
ELIGIBLE TRANSITION EMPLOYEES
AS OF SEPTEMBER 30, 2002, AMENDED AS AGREED BETWEEN THE PARTIES
SCHEDULE B
PROJECTED WINDDOWN COSTS
Costs to box, inventory and deliver operational documentation, records and
drawings. Engineering records will enter compliance information into an Access
database. An estimated 130 boxes of engineering records will be shipped to EOTT
Energy Corp's Houston offices. Electronic data will be transferred to a hard
drive and forwarded along with the boxes. Additional records include Pipeline
Integrity, Right-of-Way, Safety, Environmental and Training. Total estimated
winddown costs less than $20,000.
EXHIBIT B
FORM OF
WRITTEN CONSENT
OF
THE SOLE STOCKHOLDER
OF
EOTT ENERGY CORP.
__________________________ , 2002
The undersigned, Enron Corp. (the "Stockholder"), being the
holder of record of all of the issued and outstanding shares of the common
stock, par value $1.00 per share ("Common Stock"), of EOTT Energy Corp., a
Delaware corporation (the "Company"), pursuant to Section 228(a) of the Delaware
General Corporation Law, does hereby consent to and approve the following
resolution:
WHEREAS, pursuant to Article VIII of the Restated Certificate
of the Company, without the prior affirmative vote or written consent the
Stockholder, the Board of Directors of the Company and the Company shall not,
inter alia, file a voluntary petition in bankruptcy for or on behalf of the
Company or EOTT Energy Partners, L.P. (the "Partnership") other than in the
United States Bankruptcy Court in which the jointly administered cases, In re
Enron Corp., et al., Case No. 01-16034 are pending;
WHEREAS, the Board of Directors of the Company has notified
the Stockholder of its intention to file a voluntary petition in bankruptcy on
behalf of the Company, the Partnership and certain subsidiaries of the
Partnership; and
WHEREAS, the Board of Directors of the Company desires to file
such voluntary petition in bankruptcy in the United States Bankruptcy Court for
the Southern District of Texas;
NOW, THEREFORE, BE IT RESOLVED, that the Stockholder hereby
consents to the filing of a voluntary petition in bankruptcy on behalf of the
Company and the Partnership in the United States Bankruptcy Court for the
Southern District of Texas provided that such filing shall occur on or prior to
date 30 days after the date hereof.
IN WITNESS WHEREOF, the undersigned sole stockholder of the
Company, being the holder of record of all of the issued and outstanding shares
of Common Stock, has executed this Written Consent to be effective as of the
date first above written.
ENRON CORP.
By:
------------------------
Name:
Title:
EXHIBIT C
FORM OF
GUARANTY
This GUARANTY (this "GUARANTY"), dated as of October __, 2002,
by and among the Guarantors identified as such on the signature page hereof
(each, a "GUARANTOR" and collectively, the "GUARANTORS"), and Enron Corp.,
Oregon corporation, as holder of the Note (as defined below) (the "NOTEHOLDER").
WITNESSETH:
WHEREAS, pursuant to that certain secured promissory note,
dated as of the date hereof in the aggregate the initial principal amount of
$6,211,673.13 (the "NOTE"), by EOTT Energy Partners, L.P., a Delaware limited
partnership (the "BORROWER"), in favor of the Noteholder (as from time to time
amended, restated, supplemented or otherwise modified, the "NOTE"), the Borrower
has agreed to pay amounts with respect to principal, accrued and unpaid interest
thereon and other expenses to the Noteholder, subject to the terms and
conditions set forth in such Note;
WHEREAS, the Borrower and certain of its affiliates and
subsidiaries (collectively, the "EOTT PARTIES") and the Noteholder and certain
of its affiliates and subsidiaries (collectively, the "ENRON PARTIES") are party
to that certain Settlement Agreement, dated as of the date hereof (the
"SETTLEMENT AGREEMENT");
WHEREAS, the Guarantors are wholly-owned direct and indirect
subsidiaries of the Borrower and as such will derive direct and indirect
economic benefits from the execution of the Note and other financial
accommodations provided to the Borrower pursuant to the Settlement Agreement;
and
WHEREAS, in order to induce the Noteholder to enter into the
Settlement Agreement and other related agreements, each Guarantor has jointly
and severally unconditionally agreed to guarantee payment of all amounts due
under the Note (the "OBLIGATIONS");
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, and to induce the Enron Parties to provide the
financial accommodations under the Note and the Settlement Agreement, it is
agreed as follows:
DEFINITIONS.
Capitalized terms used herein shall have the meanings assigned
to them in the Settlement Agreement, unless otherwise defined herein.
References to this "GUARANTY" shall mean this Guaranty,
including all amendments, modifications and supplements and any annexes,
exhibits and schedules to
any of the foregoing, and shall refer to this Guaranty as the same may be in
effect at the time such reference becomes operative.
THE GUARANTY.
Guaranty of Guaranteed Obligations of Borrower. Each Guarantor
hereby jointly and severally unconditionally guarantees to the Noteholder, and
its respective successors, endorsees, transferees and assigns, the prompt
payment (whether at stated maturity, by acceleration or otherwise) and
performance of the Obligations of Borrower (hereinafter the "GUARANTEED
OBLIGATIONS"). Each Guarantor hereby jointly and severally unconditionally
agrees that this Guaranty is a guaranty of payment and performance and not of
collection, and that its obligations under this Guaranty shall be primary,
absolute and unconditional, irrespective of, and unaffected by:
the genuineness, validity, regularity, enforceability or any
future amendment of, or change in this Guaranty, any Settlement
Document or any other agreement, document or instrument to which the
Borrower, the Noteholder and/or the Guarantors are or may become a
party;
the absence of any action to enforce this Guaranty or any
Settlement Document or the waiver or consent by the Noteholder with
respect to any of the provisions thereof;
the existence, value or condition of, or failure to perfect
its Lien against, any Collateral for the Guaranteed Obligations or any
action, or the absence of any action by the Noteholder in respect
thereof (including, without limitation, the release of any such
security); or
the insolvency of person party to any Settlement Document, the
Note or this Guaranty; or
any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or
guarantor,
it being unconditionally agreed by each Guarantor that its obligations under
this Guaranty shall not be discharged until the date that all Obligations have
been paid in full and satisfied (the "TERMINATION DATE"). Each Guarantor shall
be regarded, and shall be in the same position, as principal debtor with respect
to the Guaranteed Obligations. Each Guarantor jointly and severally
unconditionally agrees that any notice or directive given at any time to the
Noteholder which is inconsistent with the waivers set forth in the previous
sentences shall be null and void and may be ignored by the Noteholder, and, in
addition, may not be pleaded or introduced as evidence in any litigation
relating to this Guaranty for the reason that such pleading or introduction
would be at variance with the written terms of this Guaranty, unless the
Noteholder has specifically agreed otherwise in writing. It is unconditionally
agreed among each Guarantor and the Noteholder that the foregoing waivers are of
the essence of the transaction contemplated by the Settlement
2
Agreement and the Note and that, but for this Guaranty and such waivers, the
Noteholder and its affiliates and subsidiaries would decline to enter into the
Settlement Agreement.
Demand by Noteholder. In addition to the terms of the Guaranty
set forth in Section 2.1 hereof, and in no manner imposing any limitation on
such terms, it is expressly understood and agreed that, if, at any time, the
outstanding principal amount of the Guaranteed Obligations under the Note
(including all accrued interest thereon) is declared to be immediately due and
payable, then the Guarantors shall, without demand, pay to the holders of the
Guaranteed Obligations the entire outstanding Guaranteed Obligations due and
owing to such holders. Payment by the Guarantors shall be made to the
Noteholder, or its designated assign, in immediately available funds to an
account designated by the Noteholder or its designated assign, or at the address
set forth herein for the giving of notice to the Noteholder or at any other
address that may be specified in writing from time to time by the Noteholder,
and shall be credited and applied to the Guaranteed Obligations.
Enforcement of Guaranty. In no event shall the Noteholder have
any obligation (although it is entitled, at its option) to proceed against the
Borrower or any of its affiliate or any Collateral pledged to secure Guaranteed
Obligations before seeking satisfaction from any or all of the Guarantors, and
the Noteholder may proceed, prior or subsequent to, or simultaneously with, the
enforcement of the Noteholder's rights hereunder, to exercise any right or
remedy which it may have against any Collateral, as a result of any Lien it may
have as security for all or any portion of the Guaranteed Obligations.
Waiver. In addition to the waivers contained in Section 2.1
hereof, each Guarantor waives and jointly and severally unconditionally agrees
that they shall not at any time insist upon, plead or in any manner whatever
claim or take the benefit or advantage of, any appraisal, valuation, stay,
extension, marshaling of assets or redemption laws, or exemption, whether now or
at any time hereafter in force, which may delay, prevent or otherwise affect the
performance by the Guarantors of their Guaranteed Obligations under, or the
enforcement by the Noteholder of, this Guaranty. Guarantors hereby waive
diligence, presentment and demand (whether for non-payment or protest or of
acceptance, maturity, extension of time, change in nature or form of the
Guaranteed Obligations, acceptance of further security, release of further
security, composition or agreement arrived at as to the amount of, or the terms
of, the Guaranteed Obligations, notice of adverse change in any of the EOTT
Parties' financial condition or any other fact which might increase the risk to
the Guarantors) with respect to any of the Guaranteed Obligations or all other
demands whatsoever and waive the benefit of all provisions of law which are or
might be in conflict with the terms of this Guaranty. Each Guarantor hereby
jointly and severally represent, warrant and unconditionally agrees that, as of
the date of this Guaranty, their obligations under this Guaranty are not subject
to any offsets or defenses against the any of the Enron Parties of any kind.
Each Guarantor further jointly and severally unconditionally agrees that their
obligations under this Guaranty shall not be subject to any counterclaims,
offsets or defenses against any of the Enron Parties of any kind which may arise
in the future.
3
Benefit of Guaranty. The provisions of this Guaranty are for
the benefit of the Noteholder and its respective successors, transferees,
endorsees and assigns, and nothing herein contained shall impair, as between the
Borrower and its affiliates and subsidiaries and the Noteholder and its
affiliates and subsidiaries, the obligations of the Settlement Parties under the
Settlement Agreement and the Note. In the event all or any part of the
Guaranteed Obligations are transferred, indorsed or assigned by the Noteholder
to any person or persons, any reference to "NOTEHOLDER" herein shall be deemed
to refer equally to such person or persons.
Modification of Guaranteed Obligations, Etc. Each Guarantor
hereby acknowledges and jointly and severally unconditionally agrees that the
Noteholder may at any time or from time to time, with or without the consent of,
or notice to, the Guarantors or any of them:
change or extend the manner, place or terms of payment of, or
renew or alter all or any portion of, the Guaranteed Obligations;
take any action under or in respect of the Settlement Document
or the Note in the exercise of any remedy, power or privilege contained
therein or available to it at law, equity or otherwise, or waive or
refrain from exercising any such remedies, powers or privileges;
amend or modify, in any manner whatsoever, any Settlement
Document or the Note;
extend or waive the time for any of the EOTT Parties'
performance of, or compliance with, any term, covenant or agreement on
its part to be performed or observed under any Settlement Document or
the Note, or waive such performance or compliance or consent to a
failure of, or departure from, such performance or compliance;
take and hold Collateral for the payment of the Guaranteed
Obligations guaranteed hereby or sell, exchange, release, dispose of,
or otherwise deal with, any property pledged, mortgaged or conveyed, or
in which the Noteholder has been granted a Lien, to secure any
Obligations;
release anyone who may be liable in any manner for the payment
of any amounts owed by Guarantors or any of the EOTT Parties to the
Noteholder;
modify or terminate the terms of any intercreditor or
subordination agreement pursuant to which claims of other creditors of
any Guarantor or any of the EOTT Parties are subordinated to the claims
of the Noteholder; and/or
apply any sums by whomever paid or however realized to any
amounts owing by any Guarantor or any of the EOTT Parties to the
Noteholder in such manner as the Noteholder shall determine in its
discretion;
4
and the Noteholder shall not incur any liability to Guarantors as a result
thereof, and no such action shall impair or release the Guaranteed Obligations
of the Guarantors or any of them under this Guaranty.
Reinstatement. This Guaranty shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any of the EOTT Parties or any Guarantor for liquidation or reorganization,
should any of the EOTT Parties or any Guarantor become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of such EOTT Party's or such
Guarantor's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Guaranteed
Obligations, or any part thereof, is, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned by the Noteholder,
whether as a "voidable preference", "fraudulent conveyance", or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Guaranteed Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
Deferral of Subrogation, Etc. Notwithstanding anything to the
contrary in this Guaranty, or in any Settlement Document or the Note, each
Guarantor hereby:
expressly and irrevocably waives, on behalf of itself and its
successors and assigns (including any surety) until the Termination
Date, any and all rights at law or in equity to subrogation, to
reimbursement, to exoneration, to contribution, to indemnification, to
set off or to any other rights that could accrue to a surety against a
principal, to a guarantor against a principal, to a guarantor against a
maker or obligor, to an accommodation party against the party
accommodated, to a holder or transferee against a maker, or to the
holder of any claim against any person, and which such Guarantor may
have or hereafter acquire against any EOTT Party in connection with or
as a result of such Guarantor's execution, delivery and/or performance
of this Guaranty, or any other documents to which such Guarantor is a
party or otherwise; and
5
acknowledges and agrees (i) that this waiver is intended to
benefit the Noteholder and shall not limit or otherwise effect any
Guarantor's liability hereunder or the enforceability of this Guaranty,
and (ii) that the Noteholder and its respective successors and assigns
are intended third party beneficiaries of the waivers and agreements
set forth in this Section 2.8 and their rights under this Section 2.8
shall survive payment in full of the Guaranteed Obligations.
Election of Remedies. If the Noteholder may, under applicable
law, proceed to realize benefits under any Settlement Document or the Note
giving the Noteholder a Lien upon any Collateral owned by any EOTT Party, either
by judicial foreclosure or by non-judicial sale or enforcement, the Noteholder
may, at its sole option, determine which of such remedies or rights it may
pursue without affecting any of such rights and remedies under this Guaranty.
If, in the exercise of any of its rights and remedies, the Noteholder shall
forfeit any of its rights or remedies, including its right to enter a deficiency
judgment against any EOTT Party, whether because of any applicable laws
pertaining to "election of remedies" or the like, Guarantors hereby consent to
such action by the Noteholder and waive any claim based upon such action, even
if such action by the Noteholder shall result in a full or partial loss of any
rights of subrogation which Guarantors might otherwise have had but for such
action by the Noteholder. Any election of remedies which results in the denial
or impairment of the right of the Noteholder to seek a deficiency judgment
against any EOTT Party shall not impair each Guarantor's obligation to pay the
full amount of the Guaranteed Obligations. In the event the Noteholder shall bid
at any foreclosure or trustee's sale or at any private sale permitted by law,
the Settlement Documents or the Note, the Noteholder may bid all or less than
the amount of the Guaranteed Obligations and the amount of such bid need not be
paid by the Noteholder but shall be credited against the Guaranteed Obligations.
The amount of the successful bid at any such sale shall be conclusively deemed
to be the fair market value of the collateral and the difference between such
bid amount and the remaining balance of the Guaranteed Obligations shall be
conclusively deemed to be the amount of the Guaranteed Obligations guaranteed
under this Guaranty, notwithstanding that any present or future law or court
decision or ruling may have the effect of reducing the amount of any deficiency
claim to which the Noteholder might otherwise be entitled but for such bidding
at any such sale.
DELIVERIES.
In a form satisfactory to the Noteholder, the Guarantors shall
deliver to the Noteholder, concurrently with the execution of this Guaranty and
the Settlement Agreement, the Note and other instruments, certificates and
documents as are required to be delivered by Guarantors to Noteholder under the
Settlement Agreement.
6
REPRESENTATIONS AND WARRANTIES.
Each Guarantor jointly and severally make the representations
and warranties as to each Guarantor contained in the Settlement Agreement, each
of which is incorporated herein by reference, and the representation and
warranty to the Noteholder (which representation and warranty shall survive the
execution and delivery of this Guaranty) that the execution, delivery and
performance of this Guaranty, the Settlement Agreement and the Note and all
instruments and documents to be delivered by each Guarantor hereunder and under
the Settlement Agreement are within such Guarantor's corporate power, have been
duly authorized by all necessary or proper corporate action, including the
consent of stockholders, members and/or partners where required, are not in
contravention of any provision of such Guarantor's charter or by-laws, do not
violate any law or regulation, or any order or decree of any Governmental
Authority, do not conflict with or result in the breach of, or constitute a
default under, or accelerate or permit the acceleration of any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which any Guarantor is a party or by which any Guarantor or any of
its property is bound, do not result in the creation or imposition of any Lien
upon any of the property of any Guarantor, other than those in favor of the
Noteholder, and the same do not require the consent or approval of any
Governmental Authority, all of which have been duly obtained, made or complied
with prior to the date hereof. On or prior to the date hereof, this Guaranty,
and any Settlement Document to which any Guarantor is a party shall have been
duly executed and delivered for the benefit of or on behalf of such Guarantor,
and each shall then constitute a legal, valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its terms.
FURTHER ASSURANCES.
Each Guarantor jointly and severally unconditionally agrees,
upon the written request of the Noteholder, to execute and deliver to the
Noteholder, from time to time, any additional instruments or documents
reasonably considered necessary by the Noteholder to cause this Guaranty to be,
become or remain valid and effective in accordance with its terms.
PAYMENTS FREE AND CLEAR OF TAXES.
All payments required to be made by each Guarantor hereunder
shall be made to the Noteholder free and clear of, and without deduction for,
any and all present and future Taxes. If any Guarantor shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder, (a) the sum
payable shall be increased as much as shall be necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 6) the Noteholder receives an amount equal to the sum
they would have received had no such deductions been made, (b) such Guarantor
shall make such deductions, and (c) such Guarantor shall pay the full amount
deducted to the relevant taxing or other authority in accordance with applicable
law. Within 30 days after the date of any payment of Taxes, each applicable
Guarantor
7
shall furnish to the Noteholder the original or a certified copy of a receipt
evidencing payment thereof. Each Guarantor shall jointly and severally indemnify
and, within 10 days of demand therefor, pay the Noteholder for the full amount
of Taxes (including any Taxes imposed by any jurisdiction on amounts payable
under this Section 6) paid by the Noteholder, as appropriate, and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted.
OTHER TERMS.
Entire Agreement. This Guaranty, together with the Note and
the other Settlement Documents, constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements relating to a guaranty of the Guaranteed Obligations.
Headings. The headings in this Guaranty are for convenience of
reference only and are not part of the substance of this Guaranty.
Severability. Whenever possible, each provision of this
Guaranty shall be interpreted in such a manner to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
Notices. Whenever it is provided herein that any notice,
demand, request, consent, approval, declaration or other communication shall or
may be given to or served upon any of the parties by any other party, or
whenever any of the parties desires to give or serve upon another any such
communication with respect to this Guaranty, each such notice, demand, request,
consent, approval, declaration or other communication shall be in writing and
shall be addressed to the party to be notified as follows:
If to the Noteholder:
Enron Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
with copies to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
8
If to any Guarantor:
c/o EOTT Energy Partners, L.P.
000 Xxxx Xxx Xxxxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been validly served, given or delivered (i) upon the earlier of actual
receipt and three Business Days after the same shall have been deposited with
the United States mail, registered or certified mail, return receipt requested,
with proper postage prepaid, (ii) upon transmission, when sent by telecopy or
other similar facsimile transmission (with such telecopy or facsimile promptly
confirmed by delivery of a copy by personal delivery or United States mail as
otherwise provided in this Section 7.4), (iii) one Business Day after deposit
with a reputable overnight carrier with all charges prepaid or (iv) when
delivered, if hand-delivered by messenger.
Successors and Assigns. This Guaranty and all obligations of
the Guarantors hereunder shall be binding upon the successors and assigns of
each Guarantor (including a debtor-in-possession on behalf of such Guarantor)
and shall, together with the rights and remedies of the Noteholder hereunder,
inure to the benefit of the Noteholder, all future holders of any instrument
evidencing any of the Obligations and their respective successors and assigns.
No sales of participations, other sales, assignments, transfers or other
dispositions of any agreement governing or instrument evidencing the Obligations
or any portion thereof or interest therein shall in any manner affect the rights
of the Noteholder hereunder. The Guarantors may not assign, sell, hypothecate or
otherwise transfer any interest in or obligation under this Guaranty.
No Waiver; Cumulative Remedies; Amendments. The Noteholder
shall not by any act, delay, omission or otherwise be deemed to have waived any
of its rights or remedies hereunder, and no waiver shall be valid unless in
writing, signed by the Noteholder and then only to the extent therein set forth.
A waiver by the Noteholder of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the Noteholder
would otherwise have had on any future occasion. No failure to exercise nor any
delay in exercising on the part of the Noteholder, any right, power or privilege
hereunder, shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or future
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies hereunder provided are cumulative and may be exercised
singly or concurrently, and are not exclusive of any rights and remedies
provided by law. None of the terms or provisions of this Guaranty may be waived,
altered, modified, supplemented or amended except by an instrument in writing,
duly executed by the Noteoholder and Guarantors.
9
Termination. This Guaranty is a continuing guaranty and shall
remain in full force and effect until the Termination Date. Upon payment and
performance in full of the Guaranteed Obligations, the Noteholder shall deliver
to Guarantors such documents as the Guarantors may reasonably request to
evidence such termination.
Counterparts. This Guaranty may be executed in any number of
counterparts, each of which shall collectively and separately constitute one and
the same agreement.
FORUM SELECTION CLAUSE. SHOULD ANY DISPUTE ARISE CONCERNING
THE CONSTRUCTION AND/OR ENFORCEMENT OF THIS GUARANTY, EACH GUARANTOR JOINTLY AND
SEVERALLY UNCONDITIONALLY AND SPECIFICALLY AGREES AND CONSENTS THAT ANY
CONTROVERSY, CLAIM, OR DISPUTE ARISING OUT OF OR RELATING TO THIS GUARANTY, OR
ANY ALLEGED BREACH HEREOF, INCLUDING (WITHOUT LIMITATION) ANY DISPUTE REGARDING
THE EXECUTION, BREACH OR COMPLIANCE WITH THIS GUARANTY OR ANY RELATED DOCUMENTS,
OR CLAIMS FOR EQUITABLE OR INJUNCTIVE RELIEF, SHALL BE RESOLVED EXCLUSIVELY BY
THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND
HEREBY AGREES AND CONSENTS TO THE EXCLUSIVE JURISDICTION OF THAT COURT. EACH
GUARANTOR JOINTLY AND SEVERALLY UNCONDITIONALLY AGREES THAT THE PREVAILING PARTY
OF ANY SUCH ACTION SHALL BE ENTITLED TO RECOVER ITS REASONABLE ATTORNEY'S FEES
INCURRED IN PROSECUTING OR DEFENDING THAT DISPUTE.
GOVERNING LAW. EACH GUARANTOR JOINTLY AND SEVERALLY
UNCONDITIONALLY AGREES THAT, NOTWITHSTANDING ANY CONFLICTS OF LAWS PRINCIPLES,
ANY DISPUTE CONCERNING THIS GUARANTY WILL BE GOVERNED BY
NEW YORK LAW.
Limitation on Guaranteed Obligations. Notwithstanding any
provision herein contained to the contrary, each Guarantor's liability hereunder
shall be limited to an amount not to exceed as of any date of determination the
aggregate principal amount of the Note, plus the interest thereon at the
applicable rate specified in the Note.
10
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Guaranty as of the date first above written.
EOTT ENERGY GENERAL PARTNER, LLC
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EOTT ENERGY PIPELINE LIMITED PARTNERSHIP
By: EOTT Energy General Partner, LLC, as
general partner
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EOTT ENERGY OPERATION LIMITED PARTNERSHIP
By: EOTT Energy General Partner, LLC, as
general partner
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EOTT ENERGY CANADA LIMITED PARTNERSHIP
By: EOTT Energy General Partner, LLC, as
general partner
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EOTT ENERGY LIQUIDS, L.P.
By: EOTT Energy General Partner, LLC, as
general partner
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EOTT ENERGY LTD.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EOTT ENERGY FINANCE CORP.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
ENRON CORP., as Noteholder
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EXHIBIT D
FORM OF
SECURED PROMISSORY NOTE
Initial Principal Amount: Houston, Texas
$6,211,673.13 , 2002
-------
FOR VALUE RECEIVED, the undersigned, EOTT ENERGY PARTNERS,
L.P., a Delaware limited partnership (the "BORROWER"), hereby unconditionally
promises to pay to the order of ENRON CORP. ("ENRON"), or to its registered
assigns, at its office at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, or such other
place as the holder of this Secured Promissory Note (this "NOTE") may designate
in writing from time to time, in lawful money of the United States of America
and in immediately available funds, the principal amount of six million
two-hundred eleven thousand six hundred seventy-three and 13/100s dollars
($6,211,673.13), and any increased principal amount arising pursuant to the
terms of this Note below, together with interest on the unpaid principal amount
of this Note outstanding from time to time from the date hereof, at the rate
provided below.
This Note is secured by an irrevocable letter of credit as
provided in that certain Settlement Agreement, dated as of October 3, 2002 (the
"SETTLEMENT AGREEMENT"), among the Borrower and certain of its affiliates on the
one hand, and Enron and certain of its affiliates on the other. Reference is
hereby made to the Settlement Agreement and the Letter of Credit for the terms
and conditions upon which the security interests were granted and the rights of
the holder of this Note in respect thereof. Payment of this Note is also
guaranteed by all of the Subsidiaries of the Borrower as provided in the
Guaranty, dated as of the date hereof (the "GUARANTY"), among the Borrower, its
Subsidiaries and Enron. Reference is hereby made to the Guaranty for a
description of the nature and extent of the guaranty and the rights of the
holder of this Note in respect thereof. All capitalized terms, unless otherwise
defined herein, shall have the meanings ascribed to them in the Settlement
Agreement.
1. Interest.
(a) Subject to Section 1(b), the Borrower shall pay interest,
based on the principal amount outstanding from time to time under this
Note (including amounts capitalized pursuant to Section 1(b) below),
semi-annually in arrears, in cash, on each April 1 and October 1,
beginning on April 1, 2003 (each an "INTEREST PAYMENT DATE"), and on
the Maturity Date at a rate equal to 10.0% per annum, based on a
360-day year.
(b) If prior to an Interest Payment Date, neither the Borrower
nor any direct or indirect Subsidiary of the Borrower shall have made
any cash payments with respect to the interest accrued, principal or
fees or premium, if any, on the Borrower's 11% Senior Notes due 2009,
issued pursuant to the First Supplemental Indenture, dated October 1,
1999, between The Bank of
New York, as trustee, and the Borrower or on
any note issued by any EOTT Party in exchange therefor, then the
Borrower may, but shall not be required to, pay the interest due on
this Note pursuant to Section 1(a) above by capitalizing and adding
such
amount to the principal amount outstanding under this Note. If the
Borrower shall elect to capitalize due and payable interest pursuant to
the immediately preceding sentence, it shall notify the holder of this
Note of such election on the Interest Payment Date on which such
interest is due.
(c) Notwithstanding anything to the contrary set forth in this
Section 1, if at any time until payment in full of this Note, the
interest rate payable thereon exceeds the highest rate of interest
permissible under any law which a court of competent jurisdiction
shall, in a final determination, deem applicable hereto (the "MAXIMUM
LAWFUL RATE"), then in such event and so long as the Maximum Lawful
Rate would be so exceeded, the rate of interest payable on this Note
shall be equal to the Maximum Lawful Rate; provided, however, that if
at any time thereafter the interest rate payable thereon is less than
the Maximum Lawful Rate, the Borrower shall continue to pay interest
thereunder at the Maximum Lawful Rate until such time as the total
interest received by the holder of this Note is equal to the total
interest which it would have received had the interest rate on this
Note been (but for the operation of this Section 1(c)) the interest
rate payable since the Closing Date. Thereafter, the interest rate
payable shall be the stated interest rate unless and until such rate
again exceeds the Maximum Lawful Rate, in which event this Section 1(c)
shall again apply. In no event shall the total interest received by the
holder of this Note pursuant to the terms hereof exceed the amount
which it could lawfully have received had the interest due hereunder
been calculated for the full term hereof at the Maximum Lawful Rate. In
the event the Maximum Lawful Rate is calculated pursuant to this
Section 1(c), such interest shall be calculated at a daily rate equal
to the Maximum Lawful Rate divided by the number of days in the year in
which such calculation is made. In the event that a court of competent
jurisdiction, notwithstanding the provisions of this Section 1(c),
shall make a final determination that the holder of this Note has
received interest hereunder in excess of the Maximum Lawful Rate, such
holder shall, to the extent permitted by applicable law, promptly apply
such excess first to any interest due and not yet paid under this Note,
then to the outstanding principal of this Note (in the inverse order of
maturity), then to other unpaid amounts under the Settlement Agreement
and thereafter shall refund any excess to the Borrower or as a court of
competent jurisdiction may otherwise order.
(d) If the Borrower shall default in the payment of any
amounts due and payable under this Note (a "DEFAULTED NOTE PAYMENT")
whether upon acceleration, at maturity or as otherwise provided herein,
such Defaulted Note Payment shall bear interest at a rate equal to the
lesser of (a) 12% per annum and (b) the Maximum Lawful Rate, which
shall (i) accrue from the day of such default in payment to the date
payment of such Defaulted Note Payment has been made or duly provided
for, (ii) be payable on demand and (iii) be calculated set forth in
this Sections 1(a) and (c).
2. Payments.
(a) All principal hereof and interest thereon shall be due and
payable on October 1, 2005 (the "MATURITY DATE").
(b) The Borrower shall make payments in respect of principal
equal to one million dollars ($1,000,000) on each of October 1, 2003
and October 1, 2004. The remaining principal due herein shall be due
and payable on the Maturity Date.
2
(c) If any payment on this Note becomes due and payable on a
Saturday, Sunday or other day on which commercial banks in Houston,
Texas are authorized or required by law to close, the maturity thereof
shall be extended to the next succeeding day that is not a Saturday,
Sunday or other day on which commercial banks in Houston, Texas are
authorized or required by law to close, and with respect to payments of
principal, interest thereon shall be payable at the then applicable
rate during such extension.
3. Optional Prepayment. The Borrower shall have the right to prepay
this Note in full on the earlier of (i) the effective date of the EOTT Plan of
Reorganization and (ii) the date 180 days after the Petition Date by the payment
of an amount equal to five million dollars ($5,000,000) plus the interest
accrued on this Note through such date plus all amounts payable pursuant to
Section 4 hereof, if any (such amount, the "PREPAYMENT AMOUNT"); provided,
however, that the Borrower shall give Enron notice in writing of such prepayment
five Business Days prior to such prepayment. Upon the receipt and collection of
the Prepayment Amount, Enron shall return this Note to the Borrower marked
cancelled.
4. Taxes.
(a) If, as a result of any change in law, rule or regulation
from and after the Closing Date, the Borrower shall be required by law
to deduct any present or future Taxes, levies, imposts, deductions,
charges or withholdings, or any liabilities with respect thereto,
excluding Taxes imposed on or measured by the net income of the holder
of this Note, by the jurisdiction under the laws of which it is
organized or any political subdivision thereof (all such non-excluded
Taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "ADDITIONAL TAX AMOUNTS"),
from or in respect of any sum payable hereunder to the holder of this
Note, (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions
applicable to additional sums payable under this Section 4(a)) such
holder receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such
deductions, and (iii) the Borrower shall pay the full amount deducted
to the relevant taxing or other authority in accordance with applicable
law.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary Taxes or any other sales, transfer,
exercise, mortgage recording or property Taxes, charges or similar
levies that arise from any payment made hereunder or from the
execution, sale, transfer, delivery or registration of, or otherwise
with respect to, any of the Settlement Documents (hereinafter referred
to as "OTHER TAXES").
(c) The Borrower shall indemnify any and all holders of this
Note for the full amount of any Additional Tax Amounts payable pursuant
to Section 4(a) and any Other Taxes payable pursuant to Section 4(b)
(including without limitation, any such Additional Tax Amounts or Other
Taxes imposed by any jurisdiction on amounts payable under this Section
4(c) paid by any holder of this Note and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Additional Tax Amounts or Other Taxes were
correctly or legally asserted). This indemnification shall be made
within 30 days from the date such holder makes written demand therefor.
(d) Within 30 days after the date of any payment of Additional
Tax Amounts, the Borrower shall furnish to the applicable holder of
this Note the original or a certified copy of a receipt evidencing
payment thereof.
(e) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 4 shall survive the payment in full
of this Note.
5. Negative Covenant. The EOTT Parties jointly and severally
unconditionally covenant and agree that no EOTT Party shall directly or
indirectly form, incorporate or acquire any Subsidiary unless such Subsidiary
shall execute and deliver a guaranty containing the same terms and conditions as
the Guaranty.
6. Set-Offs. ALL PAYMENTS TO BE MADE BY THE BORROWER HEREUNDER, WHETHER
ON ACCOUNT OF PRINCIPAL, INTEREST, FEES OR OTHERWISE, SHALL BE MADE WITHOUT
SET-OFF, DEDUCTION, COUNTERCLAIM OR RECOUPMENT EXCEPT AS OTHERWISE PERMITTED IN
WRITING BY ENRON CORP.
7. Presentment, Demand, Protest and Notices. All parties now and
hereafter liable with respect to this Note, whether maker, principal, surety,
guarantor, endorser or otherwise, hereby WAIVE AND RELINQUISH presentment,
notice of presentment, demand, protest, notice of intent to accelerate, notice
of acceleration and all other notices of any kind.
8. Amendment, Supplement and Waiver. The terms and conditions of this
Note may not be amended and supplemented except with the consent of the holder
hereof and any existing Default or compliance with any provision of this Note
may not be waived except with the written consent of the holder hereof;
provided, however, that without the consent of the holder hereof, this Note may
be amended or supplemented to cure any ambiguity, defect or inconsistency, in a
manner that does not materially adversely affect the holder hereunder, to
provide for the assumption of the Borrower's obligations to such holder by a
successor to the Borrower in case of a merger or consolidation, or to make any
change that would provide any additional rights or benefits to such holder.
9. Defaults and Remedies. Each of the following constitutes an "EVENT
OF DEFAULT": (a) default in payment when due of the principal, interest thereon,
fees or other amounts, if any, on this Note; (b) failure by the Borrower or any
of its affiliates or Subsidiaries for five days after notice from Enron to
comply with any of their agreements in the Settlement Documents; (c) a material
breach of any representation, warranty or certification made or deemed made in
any Settlement Document; (d) the failure to pay the Cash Payment when due and
payable in accordance with the terms of the Settlement Agreement; (e) the
failure of any Settlement Document to be in full force and effect and valid,
binding and enforceable (other than in accordance with its terms); (f) the
failure of the Letter of Credit to be renewed or replaced (in form and substance
acceptable to Enron) at least 10 Business Days prior to its expiry, or the
failure of the Letter of Credit to be in full force and effect until the date 10
Business Days after the maturity date of this Note; (g) any Settlement Document
is declared null and void, or the Borrower or any of its Subsidiaries deny any
of their obligations under any Settlement Document; (h) any default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any
4
indebtedness for money borrowed by the Borrower or any of its Subsidiaries (or
the payments of which is guaranteed by the Borrower or any of its Subsidiaries)
which in any instance or when aggregated with all other such defaults exceeds $3
million in the aggregate, whether such indebtedness or guarantee now exists, or
is created after the date hereof, which default (1) is caused by a failure to
pay indebtedness at its stated final maturity (after giving effect to any
applicable grace period provided in such indebtedness) or (2) results in the
acceleration of such indebtedness prior to its stated final maturity; (i)
failure by the Borrower or any of its Subsidiaries to pay final judgments
aggregating in excess of $3 million (net of any amounts with respect to which a
reputable and creditworthy insurance company has acknowledged liability in
writing), which judgments are not paid, discharged or stayed for a period of 30
days; (j) the failure of the EOTT Parties to consummate a plan of reorganization
on terms and conditions and with provisions consistent with the Restructuring
Agreement within 180 days after the EOTT Petition Date; (k) the filing of a plan
of reorganization or liquidation for the EOTT Parties by any party that contains
terms inconsistent with the terms of the Settlement Agreement; (l) the
appointment of a chapter 11 or chapter 7 trustee in the EOTT Bankruptcy Cases;
(m) the filing for bankruptcy, insolvency or similar event in the United States
or the United Kingdom with respect to the issuer of the Letter of Credit
(provided that such event shall not constitute an Event of Default hereunder if
the Borrower shall cause to be delivered to Enron within 10 Business Days after
such event a replacement Letter of Credit issued by a bank acceptable to Enron,
in its sole discretion); and (n) subsequent to the consummation of the EOTT
Parties' plan of reorganization proposed in the EOTT Bankruptcy Cases, a court
of competent jurisdiction enters an order or decree under any bankruptcy law
that (1) is for relief against the Borrower or any of its Subsidiaries, (2)
appoints a custodian of the Borrower or any of its Subsidiaries or for all or
substantially all of the property of the Borrower or any of its Subsidiaries or
(3) orders the liquidation of the Borrower or any of its Subsidiaries and (4)
the order or decree remains unstayed and in effect for 60 consecutive days
(collectively, a "Bankruptcy Event").
10. Acceleration. If any Event of Default occurs and is continuing, the
principal outstanding (including the amounts capitalized pursuant to Section
1(b) above) and the interest accrued thereon as of the date thereof, together
with any amounts due under Section 4 above, shall be due and payable immediately
without further action or notice. The holder of this Note may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except for nonpayment
of this Note that has become due solely because of its acceleration) have been
cured or waived.
11. Other Remedies. If an Event of Default occurs and is continuing,
the holder of this Note may pursue any available remedy to collect the payment
of this Note or to enforce the performance of any provision of this Note. A
delay or omission by the holder of this Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
12. Settlement Agreement. As referenced in the Settlement Agreement,
and subject to the certain limitations set forth therein, the obligations of the
Borrower under this Note are secured by the Letter of Credit. The Letter of
Credit referred to in the Settlement Agreement shall be terminated upon the
terms and subject to the conditions set forth in the Settlement Agreement. THE
RIGHTS AND PRIVILEGES OF THE LIEN REFERRED TO IN THE SETTLEMENT
5
13. AGREEMENT SHALL BE TRANSFERRED TO THE HOLDER OF THIS NOTE OR THE
HOLDER OF THE NOTE OF THE BORROWER ISSUED IN SATISFACTION OF THIS NOTE.
14. Successors and Assigns. This Note, and each of the provisions
contained herein, applies to, inures to the benefit of and binds all parties
hereto, their successors and assigns, whether by voluntary action, operation of
law or otherwise.
15. FORUM SELECTION CLAUSE. SHOULD ANY DISPUTE ARISE CONCERNING THE
CONSTRUCTION AND/OR ENFORCEMENT OF THIS NOTE, THE BORROWER HEREBY SPECIFICALLY
AGREES AND CONSENTS THAT ANY CONTROVERSY, CLAIM, OR DISPUTE ARISING OUT OF OR
RELATING TO THIS NOTE, OR ANY ALLEGED BREACH HEREOF, INCLUDING (WITHOUT
LIMITATION) ANY DISPUTE REGARDING THE EXECUTION, BREACH OR COMPLIANCE WITH THIS
NOTE OR ANY RELATED DOCUMENTS, OR CLAIMS FOR EQUITABLE OR INJUNCTIVE RELIEF,
SHALL BE RESOLVED EXCLUSIVELY BY THE UNITED STATES BANKRUPTCY COURT FOR THE
SOUTHERN DISTRICT OF
NEW YORK AND HEREBY AGREES AND CONSENTS TO THE EXCLUSIVE
JURISDICTION OF THAT COURT. THE BORROWER FURTHER AGREES THAT THE PREVAILING
PARTY OF ANY SUCH ACTION SHALL BE ENTITLED TO RECOVER ITS REASONABLE ATTORNEY'S
FEES INCURRED IN PROSECUTING OR DEFENDING THAT DISPUTE.
16. GOVERNING LAW. THE BORROWER AGREES THAT, NOTWITHSTANDING ANY
CONFLICTS OF LAWS PRINCIPLES, ANY DISPUTE CONCERNING THIS NOTE WILL BE GOVERNED
BY
NEW YORK LAW.
EOTT ENERGY PARTNERS, L.P.
By: EOTT Energy Corp., as general partner
By:
--------------------------------
EXHIBIT E
FORM OF RESTRUCTURING AGREEMENT
[INCLUDED AS EXHIBIT 10.3]
EXHIBIT F
FORM OF
ROFR WAIVER
__________________ , 2002
EOTT Energy Partners, L.P.
EOTT Energy Liquids, L.P.
0000 Xxxx Xxx Xxxxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
Reference is made to that certain Purchase and Sale Agreement, dated as
of June 29, 2001 (the "Sale Agreement"), between Enron Corp. ("Enron") and EOTT
Energy Partners, L.P. ("EOTT").
Enron hereby waives its right of first refusal to the sale of Assets
(as defined in the Sale Agreement) by EOTT or any of its affiliates under
Section 5.6 of the Sale Agreement and releases EOTT and its affiliates from the
obligations set forth therein.
This waiver and release is being made in accordance with Section 9.2 of
the Sale Agreement and are effect as of the date of this letter.
Very truly yours,
ENRON CORP.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
EXHIBIT G-1
FORM OF EPSC TERMINATION AGREEMENT
TERMINATION AGREEMENT
This Termination Agreement (this "AGREEMENT") is made and entered into
this 8th day of October, 2002 by and between Enron Pipeline Services Company
("EPSC") and EOTT Energy Corp. ("EOTT"). EPSC and EOTT are sometimes referred to
herein individually as a "PARTY" and collectively as the "PARTIES."
WHEREAS, EPSC and EOTT are parties to that certain Corporate Services
Agreement, dated as of December 1, 2000, as amended (the "CORPORATE SERVICES
AGREEMENT");
WHEREAS, neither Party is currently obligated to perform under such
agreement, nor does either Party currently have a claim against the other in
connection with the Corporate Services Agreement; and
WHEREAS, EPSC and EOTT desire to terminate the Corporate Services
Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and affirmed, the
Parties agree as follows:
38. Termination of Prior Agreement. Notwithstanding anything to the
contrary at law or in equity or any provision, term or condition to the contrary
contained in the Corporate Services Agreement or any agreements, certificates,
instruments or other documents entered into or delivered in connection
therewith, except for the Settlement Agreement, dated of even date herewith, by
and among EOTT and certain of its affiliates and subsidiaries and EPSC and
certain of its affiliates and subsidiaries (the "SETTLEMENT AGREEMENT"),
effective as of the date hereof, the Corporate Services Agreement (and any and
all agreements, certificates, instruments or other documents entered into in
connection therewith) shall be fully and finally terminated (including, without
limitation, all payments, financial commitments and other obligations
thereunder, of any nature whatsoever). No further obligation shall arise under
the Corporate Services Agreement with respect to either Party.
39. Forum Selection; Choice of Law.
(a) FORUM SELECTION CLAUSE. SHOULD ANY DISPUTE ARISE
CONCERNING THE CONSTRUCTION AND/OR ENFORCEMENT OF THIS AGREEMENT, THE PARTIES
HEREBY SPECIFICALLY AGREE AND CONSENT THAT ANY SUCH CONTROVERSY, CLAIM, OR
DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY ALLEGED BREACH
THEREOF, INCLUDING (WITHOUT LIMITATION) ANY DISPUTE REGARDING THE EXECUTION,
BREACH OR COMPLIANCE WITH THIS AGREEMENT, OR CLAIMS FOR EQUITABLE OR INJUNCTIVE
RELIEF, SHALL BE RESOLVED EXCLUSIVELY BY THE UNITED STATES BANKRUPTCY COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY AGREE AND CONSENT TO THE EXCLUSIVE
JURISDICTION OF THAT COURT. THE PARTIES FURTHER AGREE THAT THE PREVAILING PARTY
OF ANY
SUCH ACTION SHALL BE ENTITLED TO RECOVER ITS REASONABLE ATTORNEY'S FEES INCURRED
IN PROSECUTING OR DEFENDING THAT DISPUTE.
(b) GOVERNING LAW. THE PARTIES AGREE THAT, NOTWITHSTANDING ANY
CONFLICTS OF LAWS PRINCIPLES, ANY DISPUTE CONCERNING THIS AGREEMENT WILL BE
GOVERNED BY NEW YORK LAW.
40. Miscellaneous.
(a) Counterparts. The Parties agree that this Agreement and
any other document required or contemplated to be executed in order to
consummate this Agreement may be executed in one or more counterparts, each of
which shall be deemed an original agreement. All counterparts of any such
document together shall constitute one and the same instrument.
(b) Entire Agreement. Except as set forth in the Settlement
Agreement, this Agreement sets forth the entire agreement between the Parties
and supersedes any and all prior agreements or understanding between the Parties
pertaining to the subject matter hereof.
(c) Amendments. This Agreement may not be amended, altered,
modified or waived, in whole or in part, except in a writing executed by all the
Parties to this Agreement.
(d) Captions. Captions and titles appearing at the beginning
of any of sections or subdivisions hereof are for convenience only and will not
constitute part of such section or subdivisions and will be disregarded in
construing the language contained in such section or subdivision.
(e) Severability. If any provision or portion of this
Agreement becomes invalid or unenforceable for any reason, there will be deemed
to be made such minor changes in such provision or portion as are necessary to
make it valid and enforceable. The invalidity or unenforceability of any
provision or portion hereof will not affect the validity or enforceability of
the other provisions or portions hereof.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement
effective as of the date first above set forth.
ENRON PIPELINE SERVICES COMPANY
By:
------------------------------------------
Name:
Title:
EOTT ENERGY CORP.
By:
------------------------------------------
Name:
Title:
EXHIBIT G-2
FORM OF EGPFC TERMINATION AGREEMENT
TERMINATION AGREEMENT
This Termination Agreement (this "AGREEMENT") is made and entered into
this 8th day of October, 2002 by and between EGP Fuels Company ("EGP") and EOTT
Energy Corp. ("EOTT"). EGP and EOTT are sometimes referred to herein
individually as a "PARTY" and collectively as the "PARTIES."
WHEREAS, EGP and EOTT are parties to that certain Transition Services
Agreement, dated as of June 29, 2001 (the "TRANSITION SERVICES AGREEMENT");
WHEREAS, neither Party is currently obligated to perform under such
agreement, nor does either Party currently have a claim against the other in
connection with the Transition Services Agreement; and
WHEREAS, EGP and EOTT desire to terminate the Transition Services
Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and affirmed, the
Parties agree as follows:
41. Termination of Prior Agreement. Notwithstanding anything to the
contrary at law or in equity or any provision, term or condition to the contrary
contained in the Transition Services Agreement or any agreements, certificates,
instruments or other documents entered into or delivered in connection
therewith, except for the Settlement Agreement, dated of even date herewith, by
and among EOTT and certain of its affiliates and subsidiaries and EGP and
certain of its affiliates and subsidiaries (the "SETTLEMENT AGREEMENT"),
effective as of the date hereof, the Transition Services Agreement (and any and
all agreements, certificates, instruments or other documents entered into in
connection therewith) shall be fully and finally terminated (including, without
limitation, all payments, financial commitments and other obligations
thereunder, of any nature whatsoever). No further obligation shall arise under
the Transition Services Agreement with respect to either Party.
42. Forum Selection; Choice of Law.
(a) FORUM SELECTION CLAUSE. SHOULD ANY DISPUTE ARISE
CONCERNING THE CONSTRUCTION AND/OR ENFORCEMENT OF THIS AGREEMENT, THE PARTIES
HEREBY SPECIFICALLY AGREE AND CONSENT THAT ANY SUCH CONTROVERSY, CLAIM, OR
DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY ALLEGED BREACH
THEREOF, INCLUDING (WITHOUT LIMITATION) ANY DISPUTE REGARDING THE EXECUTION,
BREACH OR COMPLIANCE WITH THIS AGREEMENT, OR CLAIMS FOR EQUITABLE OR INJUNCTIVE
RELIEF, SHALL BE RESOLVED EXCLUSIVELY BY THE UNITED STATES BANKRUPTCY COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY AGREE AND CONSENT TO THE EXCLUSIVE
JURISDICTION OF THAT COURT. THE PARTIES FURTHER AGREE THAT THE PREVAILING PARTY
OF ANY
SUCH ACTION SHALL BE ENTITLED TO RECOVER ITS REASONABLE ATTORNEY'S FEES INCURRED
IN PROSECUTING OR DEFENDING THAT DISPUTE.
(b) GOVERNING LAW. THE PARTIES AGREE THAT, NOTWITHSTANDING ANY
CONFLICTS OF LAWS PRINCIPLES, ANY DISPUTE CONCERNING THIS AGREEMENT WILL BE
GOVERNED BY NEW YORK LAW.
43. Miscellaneous.
(a) Counterparts. The Parties agree that this Agreement and
any other document required or contemplated to be executed in order to
consummate this Agreement may be executed in one or more counterparts, each of
which shall be deemed an original agreement. All counterparts of any such
document together shall constitute one and the same instrument.
(b) Entire Agreement. Except as set forth in the Settlement
Agreement, this Agreement sets forth the entire agreement between the Parties
and supersedes any and all prior agreements or understanding between the Parties
pertaining to the subject matter hereof.
(c) Amendments. This Agreement may not be amended, altered,
modified or waived, in whole or in part, except in a writing executed by all the
Parties to this Agreement.
(d) Captions. Captions and titles appearing at the beginning
of any of sections or subdivisions hereof are for convenience only and will not
constitute part of such section or subdivisions and will be disregarded in
construing the language contained in such section or subdivision.
(e) Severability. If any provision or portion of this
Agreement becomes invalid or unenforceable for any reason, there will be deemed
to be made such minor changes in such provision or portion as are necessary to
make it valid and enforceable. The invalidity or unenforceability of any
provision or portion hereof will not affect the validity or enforceability of
the other provisions or portions hereof.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement
effective as of the date first above set forth.
EGP FUELS COMPANY
By:
-----------------------------------
Name:
Title:
EOTT ENERGY CORP.
By:
-----------------------------------
Name:
Title:
EXHIBIT G-3
FORM OF ENRON TERMINATION AGREEMENT
TERMINATION AGREEMENT
This Termination Agreement (this "AGREEMENT") is made and entered into
this 8th day of October, 2002 by and among Enron Corp. ("ENRON"), EOTT Energy
Corp., as general partner of EOTT Energy Partners, L.P., and EOTT Energy General
Partner, LLC, as the general partner of EOTT Energy Operating Limited
Partnership, EOTT Energy Pipeline Limited Partnership and EOTT Energy Canada
Limited Partnership (collectively the "EOTT PARTIES"). The EOTT Parties and
Enron are sometimes referred to herein individually as a "PARTY" and
collectively as the "PARTIES."
WHEREAS, Enron and the EOTT Parties are parties to that certain
Corporate Services Agreement, dated as of dated as of March 24, 1994, as amended
(the "CORPORATE SERVICES AGREEMENT"); and
WHEREAS, the Parties mutually desire to terminate the Corporate
Services Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and affirmed, the
Parties agree as follows:
44. Termination of Prior Agreement. Notwithstanding anything to the
contrary at law or in equity or any provision, term or condition to the contrary
contained in the Corporate Services Agreement or any agreements, certificates,
instruments or other documents entered into or delivered in connection
therewith, except for the Settlement Agreement, dated of even date herewith, by
and among the EOTT Parties and certain of their affiliates and subsidiaries and
Enron and certain of its affiliates and subsidiaries (the "SETTLEMENT
AGREEMENT"), effective as of the date hereof, the Corporate Services Agreement
(and any and all agreements, certificates, instruments or other documents
entered into in connection therewith) shall be fully and finally terminated
(including, without limitation, all payments, financial commitments and other
obligations thereunder, of any nature whatsoever). No further obligation shall
arise under the Corporate Services Agreement with respect to either Party.
45. Forum Selection; Choice of Law.
(a) FORUM SELECTION CLAUSE. SHOULD ANY DISPUTE ARISE
CONCERNING THE CONSTRUCTION AND/OR ENFORCEMENT OF THIS AGREEMENT, THE PARTIES
HEREBY SPECIFICALLY AGREE AND CONSENT THAT ANY SUCH CONTROVERSY, CLAIM, OR
DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY ALLEGED BREACH
THEREOF, INCLUDING (WITHOUT LIMITATION) ANY DISPUTE REGARDING THE EXECUTION,
BREACH OR COMPLIANCE WITH THIS AGREEMENT, OR CLAIMS FOR EQUITABLE OR INJUNCTIVE
RELIEF, SHALL BE RESOLVED EXCLUSIVELY BY THE UNITED STATES BANKRUPTCY COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY AGREE AND CONSENT TO THE EXCLUSIVE
JURISDICTION OF THAT COURT. THE PARTIES FURTHER AGREE THAT THE PREVAILING PARTY
OF ANY
SUCH ACTION SHALL BE ENTITLED TO RECOVER ITS REASONABLE ATTORNEY'S FEES INCURRED
IN PROSECUTING OR DEFENDING THAT DISPUTE.
(b) GOVERNING LAW. THE PARTIES AGREE THAT, NOTWITHSTANDING ANY
CONFLICTS OF LAWS PRINCIPLES, ANY DISPUTE CONCERNING THIS AGREEMENT WILL BE
GOVERNED BY NEW YORK LAW.
46. Miscellaneous.
(a) Counterparts. The Parties agree that this Agreement and
any other document required or contemplated to be executed in order to
consummate this Agreement may be executed in one or more counterparts, each of
which shall be deemed an original agreement. All counterparts of any such
document together shall constitute one and the same instrument.
(b) Entire Agreement. Except as set forth in the Settlement
Agreement, this Agreement sets forth the entire agreement between the Parties
and supersedes any and all prior agreements or understanding between the Parties
pertaining to the subject matter hereof.
(c) Amendments. This Agreement may not be amended, altered,
modified or waived, in whole or in part, except in a writing executed by all the
Parties to this Agreement.
(d) Captions. Captions and titles appearing at the beginning
of any of sections or subdivisions hereof are for convenience only and will not
constitute part of such section or subdivisions and will be disregarded in
construing the language contained in such section or subdivision.
(e) Severability. If any provision or portion of this
Agreement becomes invalid or unenforceable for any reason, there will be deemed
to be made such minor changes in such provision or portion as are necessary to
make it valid and enforceable. The invalidity or unenforceability of any
provision or portion hereof will not affect the validity or enforceability of
the other provisions or portions hereof.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement
effective as of the date first above set forth.
Enron CORP.
By:
------------------------------------------
Name:
Title:
EOTT ENERGY CORP., as general partner of EOTT
Energy Partners, L.P.
By:
------------------------------------------
Name:
Title:
EOTT ENERGY GENERAL PARTNER, LLC, as general
partner of EOTT Energy Operating Limited
Partnership, EOTT Energy Pipeline Limited
Partnership and EOTT Energy Canada Limited
Partnership
By:
------------------------------------------
Name:
Title:
