MASTER AGREEMENT OF DISSOLUTION, DISTRIBUTION AND ASSIGNMENT
This Master Agreement of Dissolution, Distribution and Assignment (this
"Agreement"), dated as of August 27, 1997 (the "Execution Date"), is entered
into by and between Enron Power I (Puerto Rico), Inc., a Delaware corporation
("Enron Power"), and CNF Penuelas, Inc., a Delaware corporation ("CNF"):
WHEREAS, pursuant to the Partnership Agreement of Enron Power Construction
Partnership dated as of October 16, 1995 (the "Original Joint Venture
Agreement"), Enron Power and Enron Power II (Puerto Rico), Inc. ("ENRON II")
formed Enron Power Construction Partnership (the "Joint Venture");
WHEREAS, pursuant to the Assignment dated as of November 1, 1995, ENRON II
assigned its 50% interest in the Joint Venture to CNF;
WHEREAS, pursuant to the Amended and Restated Joint Venture Agreement of
Enron/CNF Power Construction Partnership dated as of November 1, 1995 (the
"Amended Joint Venture Agreement"), Enron Power and CNF (hereinafter
individually called the "Partner" and collectively called the "Partners")
amended and restated the Original Joint Venture Agreement, and renamed the Joint
Venture as Enron/CNF Power Construction Partnership (the "General Partnership");
WHEREAS, pursuant to the Limited Partnership Agreement of Enron/CNF Power
Construction, L.P. dated as of December 13, 1996 (the "Partnership Agreement")
and a certificate of limited partnership filed December 17, 1996 with the
Delaware Secretary of State, the Partners formed Enron/CNF Power Construction,
L.P., a Delaware limited partnership (the "Partnership"), with each Partner
owning a 49% general partner interest and a 1% limited partner interest in the
Partnership;
WHEREAS, pursuant to the Assignment and Assumption Agreement dated as of
December 18, 1996 the Partners transferred and assigned all of their interests
in the General Partnership to the Partnership, and continued the business of the
Joint Venture under the Partnership;
WHEREAS, except for certain site preparation activities, the Partnership has not
commenced construction under that certain Onshore Construction Contract dated as
of November 1, 1995 (the "Construction Contract"), originally between
EcoElectrica, L.P. and the Joint Venture, and substantially all of the costs and
expenses of the Joint Venture to date have been covered by Enron Engineering &
Construction Company, a Delaware corporation ("EE&CC"), CNF Constructors, Inc.,
a Tennessee corporation, and their respective affiliates;
WHEREAS, subject to the terms and conditions of this Agreement, the Partners
desire (i) to dissolve the Partnership and cause any and all right, title and
interest in and to the assets and property of the Partnership (the "Partnership
Property"), including, but not limited to, the Partners' interests in the
Construction Contract, to be distributed to the Partners as agreed to herein;
(ii) CNF to assign and transfer to Enron Power all of CNF's interests in and to
the Partnership Property to be distributed to CNF pursuant to the dissolution of
the Partnership (the "CNF Interest"); and (iii) Enron Power to thereafter
perform under the Construction Contract in lieu of the Partnership.
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants, agreements and conditions contained herein, and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to set forth the terms and conditions of the dissolution of the
Partnership, the distribution of Partnership Property and the assignment and
transfer to Enron Power of the CNF Interest, the parties hereto hereby agree as
follows:
ARTICLE I
Dissolution, Distribution and Assignment; Closing
Section 1.1 Dissolution. Subject to the terms and conditions of this Agreement,
and in accordance with Section 22.3(a) of the Partnership Agreement, the
Partners agree to dissolve the Partnership and to wind up expeditiously the
Partnership's affairs and business. In accordance with Section 22.4 of the
Partnership Agreement, Enron Power and CNF will act as the liquidators of the
Partnership.
Section 1.2 Distribution and Termination. Subject to the terms and conditions of
this Agreement, on the Effective Date (as hereinafter defined), all of the
Partnership Property shall be distributed to the Partners in accordance with the
Distribution and Assignment Agreement referred to in Section 1.6(ii) of this
Agreement. Upon such distribution, the Partnership's affairs shall be terminated
and the liquidators shall promptly cause to be filed all certificates and
instruments required to effect the termination of the Partnership, including a
Certificate of Cancellation in substantially the form attached hereto as Exhibit
1.2 to be filed with the Secretary of State of the State of Delaware.
Section 1.3 Assignment of CNF Interest. Immediately following the distribution
of the Partnership Property to the Partners on the Effective Date, (i) CNF shall
assign and transfer to Enron Power the CNF Interest, including, but not limited
to, all of CNF's interest in the Construction Contract, and (ii) Enron Power
shall accept the CNF Interest, and will thereby assume and agree to perform all
the duties and obligations of CNF under the Construction Contract. Each of the
Partners acknowledges that upon the assignment of the CNF Interest to Enron
Power, Enron Power shall possess all of the rights, title and interest which had
been held by the Partnership in and to the Construction Contract.
Section 1.4 Time and Place of Closing on the Effective Date. Unless the Partners
agree otherwise in writing, and subject to the terms and conditions of this
Agreement, (i) the winding up of the Partnership's business and affairs, (ii)
the distribution to the Partners of all of their respective rights, title and
interest in and to the Partnership Property, and (iii) the assignment and
transfer of the CNF Interest shall each be consummated (the "Closing") at the
offices of Enron Power, 333 Clay, Suite 400, Houston, Texas 77002, or at such
other place as the Partners may agree in writing. The date when the Closing
actually occurs is referred to in this Agreement as the "Effective Date."
Section 1.5 Conditions Precedent to Closing. The Closing shall be held on a
mutually acceptable date within three (3) business days after the satisfaction
or mutual waiver of the following ("Conditions Precedent"):
(a) the mutually satisfactory execution and delivery of all Related Agreements
(as defined below);
(b) Enron Power receiving a Notice to Proceed (as defined in the Construction
Contract); and
(c) the satisfaction or waiver of all conditions precedent to the Notice to
Proceed Date (as defined in the Construction Contract).
Section 1.6 Related Agreements. Subject to the terms and conditions stated in
this Agreement along with the right for CNF and Enron Power to mutually agree in
writing to waive any requirement under this Section 1.6, at or prior to the
Effective Date the appropriate parties shall execute and deliver the following
agreements (the agreements listed in this Section 1.6 are collectively referred
to in this Agreement as the "Related Agreements") and where applicable CNF and
Enron Power shall cause their affiliates to deliver:
(i) The Distribution and Assignment Agreement, in the form attached hereto
as Exhibit 1.6(i), providing for the distribution of the Partnership
Property to each of the Partners (the "Distribution and Assignment
Agreement");
(ii) The Assignment and Assumption Agreement, in the form attached hereto
as Exhibit 1.6(ii), providing for the assignment and transfer by CNF
of the CNF Interest to Enron Power, and the acceptance and assumption
of the CNF Interest by Enron Power (the "CNF Assignment Agreement");
(iii)The acknowledgment and consent of EcoElectrica, L.P. of the
transactions contemplated by this Agreement in substantially the form
attached to the Distribution and Assignment Agreement and the CNF
Assignment Agreement (the "Consents"), provided, however, that in the
event CNF's affiliated partner in EcoElectrica has executed both
Consents, but Enron Power's affiliated partner in EcoElectrica has not
executed both Consents within three (3) business days after the Notice
to Proceed Date, then Enron Power will be deemed to have waived the
requirement under Section 1.6 (iii);
(iv) The letter agreement (the "Enron Development/KESI Cancellation
Letter") between Enron Development Corp. ("Enron Development") and
Kenetech Energy Systems, Inc. ("KESI"), in substantially the form
attached hereto as Exhibit 1.6(iv), cancelling the Side Letter
Agreement dated November 1, 1995 between Enron Development and KESI
pursuant to which each has the right to cancel the Construction
Contract and that certain Offshore Supply Contract dated as of
November 1, 1995, originally between EcoElectrica, L.P. and Enron
Equipment Procurement Company (the "Offshore Supply Contract");
(v) Except to the extent waived in accordance with the terms thereof, all
documents required to be delivered at or prior to the closing
contemplated by the Master Agreement of Dissolution, Distribution and
Assignment (the "Equipment L.P. Dissolution Agreement") entered into
on the date of this Agreement between Enron Equipment Procurement
Company ("Enron Procurement") and CNF Equipment, Inc. ("CNF
Equipment") relating to the dissolution of Enron/CNF Equipment, L.P.,
a Delaware limited partnership (the "Equipment L.P.") and the
distribution and assignment of its property (collectively, the
"Equipment L.P. Agreements");
(vi) The guaranty of Kenetech Corporation, a Delaware corporation
("Kenetech"), in the form attached hereto as Exhibit 1.6(vi), pursuant
to which Kenetech unconditionally guarantees any and all obligations
of CNF under Section 3.1, Section 3.2, Section 3.3, Section 5.1 and
Section 5.2 of this Agreement (the "Kenetech Guaranty");
(vii)The guaranty of Enron Power Corp., a Delaware corporation, in the
form attached hereto as Exhibit 1.6(vii), pursuant to which Enron
Power Corp. unconditionally guarantees any and all obligations of
Enron Power under Section 3.1, Section 5.1 and Section 5.2;
(viii) The Global Change Order, in substantially the form attached hereto
as Exhibit 1.6(viii), relating to the consent and amendment required
by the lenders to the project;
(ix) The Change Order, in substantially the form attached hereto as Exhibit
1.6(ix), relating to the LPG storage facility (the "LPG Change
Order"), provided, however, that in the event the LPG Change Order has
not been executed within three (3) business days after the Notice to
Proceed Date, then Enron Power will be deemed to have waived the
requirement under Section 1.6 (ix);
(x) The letter agreement between CNF Industries, Inc. and Enron Power I,
in the form attached hereto as Exhibit 1.6(x), releasing the guaranty
of CNF Industries, Inc. granted pursuant to Section 11.3 of the
Partnership Agreement; and
(xi) The letter agreement between Enron Power Corp. and CNF, in the form
attached hereto as Exhibit 1.6(xi), releasing the guaranty of Enron
Power Corp. granted pursuant to Section 11.3 of the Partnership
Agreement.
ARTICLE II
Representations and Warranties
Section 2.1 Representations and Warranties of CNF. CNF represents and warrants
to Enron Power that:
(a) Organization of CNF. CNF is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to own, lease, operate and
otherwise hold all of its properties and assets and to carry on its
business as presently conducted and is duly qualified to do business in
each jurisdiction in which the nature of its business as now conducted or
its assets makes such qualification necessary, except where the failure to
be so qualified would not have a material adverse effect on it.
(b) Authorization and Validity of Agreement. CNF has all necessary corporate
power and authority to enter into this Agreement and each of the Related
Agreements to which it is a party and to perform its obligations hereunder
and thereunder, and the execution, delivery and performance by CNF of this
Agreement and each of the Related Agreements to which it is a party has
been duly and validly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by CNF and at or prior to
the Effective Date each of the Related Agreements to which CNF is a party
will have been duly executed and delivered by CNF, and, assuming this
Agreement and each of the Related Agreements to which CNF is a party
constitute legal, valid and binding obligations of the other parties
thereto, when executed and delivered will constitute legal, valid and
binding obligations of CNF, enforceable against it in accordance with their
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(c) Consent and Approval; No Conflict. Neither the execution and delivery of
this Agreement or the Related Agreements to which CNF is a party nor the
consummation of the transactions and performance of the terms and
conditions contemplated hereby or thereby will (i) conflict with or result
in any breach of any provision of the certificate of incorporation or
bylaws of CNF; (ii) except as otherwise provided in this Agreement, require
any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, except (A) any
regulatory approvals or routine governmental consents normally acquired
after the consummation of transactions such as transactions of the nature
contemplated by this Agreement or (B) where it is reasonably expected that
the failure to obtain such consent, approval, authorization or permit, or
to make such filing or notification, would not prevent or delay in any
material respect the consummation of the transactions contemplated hereby
or thereby; (iii) result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any agreement, instrument or obligation to
which CNF is a party or by which CNF may be bound and to which any of the
Partnership Property is subject, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been obtained or will be obtained prior to the Closing; (iv)
violate any order, writ, injunction, decree, statute, rule or regulation to
which CNF is subject and which relate to any of its assets; or (v) result
in the imposition or creation of any lien, charge or encumbrance upon any
Partnership Property under any agreement by which Partnership Property is
bound.
(d) Ownership of Partnership Interests; Title. As of the date of this Agreement
and immediately prior to the Closing, CNF is and will be the owner of
record and beneficially of a 49% general partner interest and a 1% limited
partner interest in the Partnership, and it has not received any notice of
adverse claim to the ownership of such interests and does not have any
reason to know of any such adverse claim.
(e) No Liens. CNF shall transfer and assign the CNF Interest to Enron Power
pursuant to the CNF Assignment Agreement free and clear of all liens,
encumbrances or similar rights.
(f) Solvency. As of the date hereof CNF is Solvent, and following the transfer
of the CNF Interest to Enron Power pursuant to the CNF Assignment Agreement
and the receipt by CNF of the payment contemplated by Section 3.1(a) and
Section 3.1(b) (i) and (ii) of this Agreement, CNF shall be Solvent. For
purposes of this Section 2.1(f) the term "Solvent" shall mean: (i) the
assets of CNF, at a fair valuation, exceed CNF's total liabilities
(including contingent, subordinated, unmatured and unliquidated
liabilities); (ii) based on current projections, which are based on
underlying assumptions which provide a reasonable basis for the projections
and which reflect CNF's judgment based on present circumstances of the most
likely set of conditions and CNF's most likely course of action for the
period projected (including any payments that may be received by CNF under
Section 3.1), CNF has sufficient cash flow to enable it to pay its debts as
they mature; and (iii) CNF does not have unreasonably small capital with
which to engage in its anticipated business. For purposes of this
Section 2.1(f), the "fair valuation" of the assets of CNF means a valuation
on the basis of the amount which may be realized within a reasonable time,
either through collection or sale of such assets at the regular market
value, conceiving the latter as the amount which could be obtained for the
property in question within such period by a capable and diligent
businessman from an interested buyer who is willing to purchase under
ordinary selling conditions, including obtaining necessary consents.
(g) Fair Consideration. The consideration payable to CNF pursuant to Article
III of this Agreement equals or exceeds the reasonable equivalent value of
the CNF Interest to be transferred to Enron Power pursuant to the CNF
Assignment Agreement.
(h) Delivery of CNF Work Product. CNF and affiliated parties have delivered to
Enron Power all work, of any kind or nature, related to the Project (as
defined in the Construction Contract) in the possession or under the
control of such person, including but not limited to: drawings,
specifications, calculations, purchase orders, quotations, estimates,
budgets, cost reports, cost forecasts, labor or manpower projections or
forecasts, cash flow projections, schedules, work plans, transportation
studies, installation plans or procedures, arrangements with subcontractors
or subsuppliers, monthly reports, daily logs, engineering studies,
correspondence with or between any party related to the Project and
including that with any possible subcontractors, monthly reports, daily
logs, engineering studies, and related data.
(i) No Agreements, Claims, Actions or Proceedings. Except for this Agreement,
the Related Agreements, and any agreement entered into jointly by CNF and
Enron Power, CNF is not a party to any contract, agreement or arrangement
relating to the Partnership Property or the Construction Contract which
binds or purports to bind the Partnership or its assets. Except as
disclosed on Schedule 2.1(i), as of the Execution Date and, except as may
be provided on an amended Schedule 2.1(i) delivered by CNF at or prior to
the Effective Date, as of the Effective Date there are no claims, actions
or proceedings pending that arise from activities conducted by CNF, its
affiliates or their representatives that relate to the Partnership,
Partnership Property or the Construction Contract and, to the knowledge of
CNF, no such claims, actions or proceedings are threatened.
Section 2.2 Representations and Warranties of Enron Power. Enron Power hereby
represents and warrants to CNF that:
(a) Organization of Enron Power. Enron Power is a corporation duly organized,
validly existing and in good standing under the laws of the state of
Delaware and has all requisite corporate power and authority to own, lease,
operate and otherwise hold all of its properties and assets and to carry on
its business as presently conducted and is duly qualified to do business in
each jurisdiction in which the nature of its business as now conducted or
its assets makes such qualification necessary, except where the failure to
be so qualified would not have a material adverse effect on it.
(b) Authorization and Validity of Agreement. Enron Power has all necessary
corporate power and authority to enter into this Agreement and each of the
Related Agreements to which it is a party and to perform its obligations
hereunder and thereunder, and the execution, delivery and performance by
Enron Power of this Agreement and each of the Related Agreements to which
it is a party has been duly and validly authorized by all necessary
corporate action. This Agreement has been duly executed and delivered by
Enron Power and at or prior to the Effective Date each of the Related
Agreements to which Enron Power is a party will have been duly executed and
delivered by Enron Power, and, assuming this Agreement and each of the
Related Agreements to which Enron Power is a party constitute legal, valid
and binding obligations of the other parties thereto, when executed and
delivered will constitute legal, valid and binding obligations of Enron
Power, enforceable against it in accordance with their terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(c) Consent and Approval; No Conflict. Neither the execution and delivery of
this Agreement or the Related Agreements to which Enron Power is a party
nor the consummation of the transactions and performance of the terms and
conditions contemplated hereby or thereby will (i) conflict with or result
in any breach of any provision of the certificate of incorporation or
bylaws of Enron Power; (ii) except as otherwise provided in this Agreement,
require any consent, approval, authorization or permit of, or filing with
or notification to, any governmental or regulatory authority, except (A)
any regulatory approvals or routine governmental consents normally acquired
after the consummation of transactions such as transactions of the nature
contemplated by this Agreement or (B) where it is reasonably expected that
the failure to obtain such consent, approval, authorization or permit, or
to make such filing or notification, would not prevent or delay in any
material respect the consummation of the transactions contemplated hereby
or thereby; (iii) result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any agreement, instrument or obligation to
which Enron Power is a party or by which Enron Power may be bound and to
which any of the Partnership Property is subject, except for such defaults
(or rights of termination, cancellation or acceleration) as to which
requisite waivers or consents have been obtained or will be obtained prior
to the Closing; (iv) violate any order, writ, injunction, decree, statute,
rule or regulation to which Enron Power is subject and which relate to any
of its assets; or (v) result in the imposition or creation of any lien,
charge or encumbrance upon any Partnership Property under any agreement by
which the Partnership Property is bound.
(d) Ownership of Partnership Interests; Title. As of the date of this Agreement
and immediately prior to the Closing, Enron Power is and will be the owner
of record and beneficially of a 49% general partner interest and a 1%
limited partner interest in the Partnership, and it has not received any
notice of adverse claim to the ownership of such interests and does not
have any reason to know of any such adverse claim.
(e) No Claims. As of the date of this Agreement and, except as may be set forth
on an amended Schedule 2.1(i) delivered by CNF pursuant to Section 2.1(i),
immediately prior to the Closing, there are no claims, actions or
proceedings pending that arise from the gross negligence or willful
misconduct of CNF, its affiliates or their representatives that relate to
the Partnership, Partnership Property or the Construction Contract and, to
the knowledge of Enron Power, no such claims, actions or proceedings are
threatened.
ARTICLE III
Additional Covenants and Agreements
Section 3.1 Certain Payments to CNF.
(a) Payment on the Execution Date. Subject to the terms and conditions of this
Agreement, Enron Power shall pay to CNF on the Execution Date, by wire
transfer or certified bank check, an aggregate of $300,000 in partial
consideration for the transactions contemplated in this Agreement.
(b) Payments Following the Effective Date. Subject to, and conditioned upon the
satisfaction or valid waiver of the Conditions Precedent, Enron Power shall
pay to CNF, by wire transfer or a certified bank check, the following
amounts:
(i) Four Hundred Eighty Eight Thousand One Hundred and Seven Dollars
($488,107) on the Effective Date to CNF or its designee for the
out-of-pocket costs incurred and paid by CNF and its affiliates on
behalf of the Partnership and constituting Contract Costs (as defined
in the Partnership Agreement) through April 30, 1997 for which CNF and
its affiliates had not been reimbursed as of April 30, 1997; and
(ii) Four Million One Hundred Thousand Dollars ($4,100,000) on the
Effective Date.
(c) Cancellation Option. In the event a Notice to Proceed under the
Construction Contract is not issued by EcoElectrica, L.P. to Enron Power by
December 15, 1997, Enron Power shall have the right, but not the
obligation, to terminate this Agreement by giving written notice of such
election to CNF on or prior to December 19, 1997 (the "Revocation Option").
Should Enron Power elect to exercise the Revocation Option, CNF shall be
obligated to promptly repay to Enron Power (and in any event no later than
December 31, 1997) any and all amounts paid to CNF pursuant to this Section
3.1 of this Agreement. In the event that Enron Power elects to exercise the
Revocation Option, and subject to the repayment by CNF to Enron Power of
any and all amounts owed by CNF hereunder, then this Agreement shall be
considered terminated effective upon delivery by Enron Power of notice of
the Revocation Option, and thereafter Enron Power shall have no further
payment obligations under the Agreement and CNF and Enron Power shall
continue as partners.
(d) Cancellation of Project. In the event the Project is terminated or
cancelled prior to the receipt of a Notice to Proceed (including, without
limitation, because of the denial of a permit or license necessary to the
Project or the termination or cancellation of the Power Purchase Agreement
(as defined in the Construction Contract)), CNF shall be obligated to
promptly repay Enron Power (in any event no later than thirty (30) days
after notice of such termination or cancellation is given by Enron Power to
CNF) any and all amounts paid to CNF pursuant to this Section 3.1 of the
Agreement. In the event that the Project is terminated or cancelled, and
subject to the repayment by CNF to Enron Power of any and all amounts owed
by CNF hereunder, then this Agreement shall be considered terminated
effective upon delivery by Enron Power of notice of the Project
cancellation, and thereafter Enron Power shall have no further payment
obligations under the Agreement and CNF and Enron Power shall continue as
partners.
Section 3.2 Alteration of Construction Contract and Offshore Supply Contract.
Prior to the Effective Date, CNF agrees to assist Enron Power in the
negotiations with EcoElectrica L.P. pertaining to the Global Change Order and
the LPG Change Order in order to minimize modifications or alterations to the
Construction Contract and the Offshore Supply Contract that result in a negative
impact on, or decrease the profit accruing under, the Construction Contract and
the Offshore Supply Contract.
Section 3.3 Continued Existence. CNF shall maintain its corporate existence as a
Delaware corporation in good standing under the laws thereunder for a period
equal to the earlier of (x) one year following the date of this Agreement or (y)
the Notice to Proceed Date.
Section 3.4 Certain Other Obligations. In addition, Enron Power acknowledges
that between the Effective Date and the earlier of the Effective Date or the
termination of this Agreement CNF will not be performing any obligations under
the Partnership Agreement relating to the performance of the Construction
Contract, including the obligation under Article 11 with respect to obtaining a
payment and performance bond.
ARTICLE IV
Arbitration
Section 4.1 Management Resolution of Disputes. In the event of any claim,
dispute, disagreement or controversy arising out of or relating to this
Agreement or the transactions contemplated herein or the breach or termination
of this Agreement or any Related Agreement (each, hereinafter referred to as a
"Dispute"), which the parties to this Agreement have been unable to settle or
agree upon within a period of fifteen (15) days after such Dispute arises, each
party shall nominate a senior officer of its management to meet at a mutually
agreed time and place not later than thirty (30) days after the Dispute has
arisen to attempt to resolve such Dispute. Should a resolution of such Dispute
not be obtained within ten (10) days after the meeting of senior officers for
such purpose, or such longer period as the parties may mutually agree upon, then
either party may by notice to the other submit the Dispute to arbitration in
accordance with the provisions of Section 4.2 of this Agreement.
Section 4.2 Binding Arbitration of Disputes. Any Dispute which is not settled in
accordance with the provisions of Section 4.1 of this Agreement shall be
submitted to binding arbitration to be conducted in accordance with the
following procedure:
(a) The party seeking arbitration hereunder may request such arbitration in
writing, which writing shall include a clear statement of the matter(s) in
dispute and shall name one arbitrator appointed by such party. Within
twenty (20) business days after receipt of such request, the other party
shall appoint one arbitrator, or in default thereof, such arbitrator shall
be named as soon as practicable by the Arbitration Committee of the
American Arbitration Association, and the two arbitrators so appointed
shall name a third arbitrator within ten (10) business days, or failing
such agreement on a third arbitrator by the two arbitrators so appointed, a
third arbitrator shall be appointed by the Arbitration Committee of the
American Arbitration Association.
(b) The arbitration hearing shall be held in New York, New York, on at least
twenty (20) business days' prior written notice to the parties. Except as
otherwise provided herein, the proceedings shall be conducted in accordance
with the Commercial Arbitration Rules and procedures of the American
Arbitration Association. Any decision of the arbitrators shall be joined in
by at least two of the arbitrators and shall be set forth in a written
award which shall state the basis of the award and shall include both
findings of fact and conclusions of law. Notwithstanding the foregoing, in
the case of any monetary dispute or claim for damages, the amount of which
is contested, each party shall submit in writing a proposed arbitration
award at the commencement of the arbitration hearing, and the arbitrators
shall be required to adopt in full the proposed arbitration award of one of
the parties with respect to such monetary amount or damages. Any award
rendered pursuant to the foregoing, which may include an award or decree of
specific performance hereunder, shall be final and binding on the parties
and not subject to review or appeal, and judgment thereon may be entered or
enforcement thereof sought by either party in a court of competent
jurisdiction.
(c) Notwithstanding the foregoing, nothing contained herein shall be deemed to
give the arbitrators appointed pursuant to the foregoing any authority,
power or right to alter, change, amend, modify, waive, add to or delete
from any of the provisions of this Agreement or the Related Agreements.
(d) The losing party shall bear all costs of the arbitration including costs of
all arbitrators, both parties' attorneys' fees and disbursements and expert
fees. In the event that the arbitrators allocate liability among the
parties, then the costs of the arbitration shall be shared pro rata by the
parties.
(e) Each of the parties to this Agreement agree that compliance by a party with
the provisions of subparagraphs (a) through (e) of this Section 4.2 shall
be a complete defense to any suit, action or proceeding instituted in any
federal or state court, or before any administrative tribunal by another
party with respect to any controversy or dispute arising under or pursuant
to this Agreement and which is subject to arbitration as set forth herein,
other than a suit or action alleging non-compliance with a final and
binding arbitration award rendered hereunder.
Section 4.3 Enforceability in Federal and State Court. The agreement to
arbitrate set forth in Section 4.2 shall be enforceable in either federal or
state court. The enforcement of such agreement and all procedural aspects
thereof, including the construction and interpretation of this agreement to
arbitrate, the scope of the arbitrable issues, allegations of waiver, delay or
defenses as to arbitrability, and the rules (except as otherwise expressly
provided herein) governing the conduct of the arbitration, shall be governed by
and construed pursuant to the United States Arbitration Act, 9 U.S.C. 1-16. In
deciding the substance of any such claim, dispute or disagreement, the
arbitrators shall apply the substantive laws of the State of Delaware; provided,
however, that the arbitrators shall have no authority to award punitive damages
under any circumstances (whether it be exemplary damages, treble damages, or any
other penalty or punitive type of damages) regardless of whether such damages
may be available under Delaware law, the parties to this Agreement hereby
waiving their right, if any, to recover punitive damages in connection with any
such claims, disputes or disagreements.
ARTICLE V
Indemnification
Section 5.1 Mutual Indemnification. Each of Enron Power and CNF (each an
"Indemnifying Party") hereby agrees to indemnify, defend and hold harmless the
other, its directors, officers, and employees, its controlled and controlling
persons and persons under common control, and their respective directors,
officers and employees (collectively "related persons"), from and against all
Claims (as hereinafter defined) asserted against, resulting to, imposed upon or
incurred by such party or such party's related persons (an "Indemnified
Person"), directly or indirectly, by reason of, arising out of, or resulting
from (a) the inaccuracy or breach of any representation or warranty of the
Indemnifying Party contained in this Agreement and (b) the breach of any
covenant or agreement of the Indemnifying Party contained in this Agreement.
"Claim" shall include (i) all debts, liabilities and obligations; (ii) losses,
damages, costs and expenses including, without limitation, interest (including
prejudgment interest in any litigated matter), penalties, court costs and
reasonable attorneys' fees and expenses; and (iii) all demands, claims, actions,
costs of investigation, causes of action, proceedings, arbitrations, judgments,
settlements and assessments, whether or not ultimately determined to be valid ;
provided, however, that "Claims" shall not include any of the foregoing to the
extent covered by insurance maintained by or for the benefit of the applicable
Indemnified Person; however the Indemnifying Party shall be liable for the
deductible and any uninsured portion of the applicable Claim.
Section 5.2 Additional Indemnification. In addition to its obligations under
Section 5.1, Enron Power hereby agrees to indemnify, defend and hold harmless
CNF and its related persons from and against (a) all Claims asserted against,
imposed upon or incurred by CNF or any of its related persons by reason of,
arising out of, or resulting from the performance of the Construction Contract
before or after the Closing (including any Claim arising from activities
conducted jointly by Enron Power and CNF, their affiliates and representatives)
and (b) all Claims asserted against, imposed upon or incurred by CNF or any of
its related persons by reason of, arising out of, or resulting from the
performance of the Construction Contract after the Effective Date but prior to
the termination of this Agreement under either Section 3.1(c) or Section 3.1(d),
except for Claims under Section 5.1 and Claims that shall have been determined
by the arbitrators under Article IV to have resulted from (i) the sole
negligence of CNF or its related persons, or (ii) the willful misconduct of CNF
or its related persons (such excluded Claims under (i) and (ii) referred to as a
"CNF Obligation"). CNF shall indemnify, defend and hold harmless Enron Power and
its related persons from and against all Claims arising out of CNF Obligations,
but only if the aggregate Claims incurred by Enron Power and its related persons
arising from CNF Obligations exceeds $625,000, and then only with respect to the
amount in excess of $625,000.
ARTICLE VI
Notices
Section 6.1 Notices. Any notice or other written instrument required or
permitted to be given pursuant to this Agreement shall be in writing signed by
the party giving such notice and shall, to the extent reasonably practicable, be
sent by telefax, and if not reasonably practicable to send by telefax, then by
hand delivery, overnight courier, telegram or registered mail, to the other
party at such address as set forth below:
If delivered to CNF:
CNF Constructors, Inc.
900 Rockmead Drive
4 Kingwood Place, Suite 200
Kingwood, TX 77339
Attention: Douglas L. Kieta
Telefax No.: (713) 356-3845
with a copy to:
Kenetech Corporation
500 Sansome Street
San Francisco, CA 94111
Attention: President
Telefax No.: (415) 984-8111
If delivered to Enron Power:
Enron Power I (Puerto Rico), Inc.
333 Clay Street, Suite 400
Houston, Texas 77002
Attention: Legal Department
Telefax No.: (713) 646-6280
with a copy to:
Enron Engineering & Construction Company
333 Clay Street, Suite 400
Houston, Texas 77002
Attention: Legal Department
Telefax No.: (713) 646-6280
Each party shall have the right to change the place to which notice shall be
sent or delivered or to specify one additional address to which copies of
notices may be sent, in either case by similar notice sent or deliveries in like
manner to the other parties. Without limiting any other means by which a party
to this Agreement maybe able to prove that a notice has been received by another
party, a notice shall be deemed to be duly received: (a) if delivered by hand,
overnight courier or telegram, the date when left at the address of the
recipient; (b) if sent by registered mail, the date of the return receipt; or
(c) if sent by telefax, upon receipt by the sender of an acknowledgment or
transmission report generated by the machine from which the telefax was sent
indicating that the telefax was sent in its entirety to the recipient's telefax
number.
ARTICLE VII
Miscellaneous
Section 7.1 Confidentiality. Each Partner acknowledges that Article 14 of the
Partnership Agreement shall survive the dissolution and termination of the
Partnership, and that no Partner shall disclose any Confidential Information (as
defined in the Partnership Agreement) to any third party except as provided
therein. Furthermore, the terms and conditions of this Agreement and the
transactions contemplated hereby shall remain subject to the terms and
conditions of that certain Confidentiality Agreement dated as of March 4, 1997
among EE&CC, CNFC Industries Inc. and Kenetech.
Section 7.2 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.
Section 7.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to the
choice of law principles thereof.
Section 7.4 Entire Agreement. This Agreement (including the Related Agreements
and other agreements incorporated herein) and the exhibits hereto contain the
entire agreement between the parties with respect to the subject matter hereof
and there are no agreements, understandings, representations or warranties
between the parties other than those set forth or referred to herein.
Section 7.5 Expenses. Whether the transactions contemplated hereby are or are
not consummated, all legal and other costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such costs and expenses.
Section 7.6 Headings; Definitions. The section and article headings contained in
this Agreement are inserted for convenience of reference only and will not
affect the meaning or interpretation of this Agreement. All references to
Sections or Articles contained herein mean Sections or Articles of this
Agreement unless otherwise stated. All capitalized terms defined herein are
equally applicable to both the singular and plural forms of such terms.
Section 7.7 Amendments and Waivers. This Agreement may not be modified or
amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought. Any
party hereto may, only by an instrument in writing, waive compliance by the
other parties hereto with any term or provision of this Agreement on the part of
such other party hereto to be performed or complied with. The waiver by any
party hereto of a breach of any term or provision of this Agreement shall not be
construed as a waiver of any subsequent breach.
Section 7.8 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any adverse manner to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
Section 7.9 Additional Documents. In connection with this Agreement and the
transactions contemplated hereby, each party hereto agrees to execute and
deliver, or cause the execution and delivery of, such additional documents and
instruments, and to perform such additional acts, as may be necessary as
appropriate to effectuate, carry out and perform all of the terms, provisions
and conditions of this Agreement and the transactions contemplated hereby.
Section 7.10 Survival. The provisions of Article IV and V shall survive the
termination of this Agreement for a period of five (5) years from the Execution
Date.
IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each of
the parties as of the day first above written.
Enron Power I (Puerto Rico), Inc.
By: _____________________________
Name:
Title:
CNF Penuelas, Inc.
By: _____________________________
Name:
Title:
ONSHORE CERTIFICATE
EXHIBIT 1.2
CERTIFICATE OF CANCELLATION OF
CERTIFICATE OF LIMITED PARTNERSHIP OF
ENRON/CNF POWER CONSTRUCTION, L.P.
This Certificate of Cancellation, dated as of [_____], 1997, is being filed by
the undersigned in the Office of the Secretary of State of the State of Delaware
(the "Secretary of State") in accordance with the provisions of 6 Del.C. 17-203
to cancel the Certificate of Limited Partnership of Enron/CNF Power
Construction, L.P. (the "Partnership").
1. The name of the limited partnership is Enron/CNF Power Construction, L.P.
2. The Partnership filed in the Office of the Secretary of State a Certificate
of Limited Partnership on December 17, 1996.
3. The reason for the filing of this Certificate of Cancellation is that the
Partnership has been dissolved and the winding up of the Partnership has
been completed.
4. This Certificate of Cancellation shall be effective immediately upon
filing.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Cancellation as of the date first-above written.
GENERAL PARTNERS:
Enron Power I (Puerto Rico), Inc., a Delaware corporation
By: _________________________________
Name:
Title:
CNF Penuelas, Inc., a Delaware corporation
By: _________________________________
Name:
Title:
ONSHORE
EXHIBIT 1.6(i)
DISTRIBUTION AND ASSIGNMENT AGREEMENT
This Distribution and Assignment Agreement (this "Agreement"), dated as of
[______], 1997, is entered into by and among Enron/CNF Power Construction, L.P.,
a Delaware limited partnership (the "Partnership"), Enron Power I (Puerto Rico),
Inc. a Delaware corporation ("Enron Power"), and CNF Penuelas, Inc., a Delaware
corporation ("CNF").
WHEREAS, pursuant to the Limited Partnership Agreement of Enron/CNF Power
Construction, L.P. dated as of December 13, 1996 (the "Partnership Agreement")
and a certificate of limited partnership filed December 16, 1996 with the
Delaware Secretary of State, Enron Power and CNF (hereinafter individually
called a "Partner" and collectively called the "Partners") formed the
Partnership, with each Partner owning a 49% general partner interest and a 1%
limited partner interest in the Partnership;
WHEREAS, the Partners are the sole limited partners and general partners of the
Partnership;
WHEREAS, pursuant to that certain Master Agreement of Dissolution, Distribution
and Assignment, dated [______], 1997 (the "Master Agreement"), the Partners
agreed, among other things, to dissolve the Partnership in accordance with
Section 22.3(a) of the Partnership Agreement;
WHEREAS, as contemplated by the Master Agreement, the Partners have paid all
debts and liabilities of the Partnership (including, without limitation, all
expenses incurred in liquidation) or have otherwise made adequate provisions for
such debt and liabilities;
WHEREAS, the Partners, as liquidators of the Partnership, have completed, or
have otherwise made adequate provisions for, all actions necessary to wind up
the affairs of the Partnership in accordance with the Partnership Agreement and
Section 17-803 of the Delaware Revised Uniform Limited Partnership Act, as
amended (the "Act");
WHEREAS, pursuant to this Agreement, the Partners wish to distribute to each
Partner a 50% undivided interest in the right, title and interest in and to all
of the assets owned, leased or held by the Partnership as of the date hereof,
whether tangible or intangible (the "Partnership Property," including, without
limitation, all of the assets and property described in Exhibit A hereto);
NOW THEREFORE, in consideration of the mutual covenants set forth below and
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby acknowledge and ratify their agreement as
follows:
Distribution and Assignment. The Partners, as liquidators of the Partnership,
hereby distribute, assign, convey and deliver (i) to Enron Power and its
successors and assigns a 50% undivided interest in and to the Partnership
Property, and (ii) to CNF and its successors and assigns a 50% undivided
interest in and to the Partnership Property.
Acceptance of Assignment. Each of the Partners hereby accepts the assignment of
its 50% undivided interest in the Partnership Property and acknowledges that
such assignment constitutes a complete return of its capital contribution and a
complete distribution of its interest in the Partnership and all of the
Partnership's property and assets.
Acknowledgment and Consent to Release of Partnership. Each Partner acknowledges,
consents to and agrees to be bound by, the terms and conditions set forth in the
attached Acknowledgment, Consent and Release.
Effective Date. This Agreement is effective as of the date first above written.
Certificate of Cancellation. Upon the distribution and assignment of the
Partnership Property pursuant to this Agreement, the Partners agree to file a
Certificate of Cancellation with the Secretary of State of the State of Delaware
in order to cancel the Certificate of Limited Partnership of the Partnership in
accordance with Section 17-203 of the Act.
Further Assurances. The parties shall take all acts and execute all documents as
any other party may reasonably request to fully carry out and effectuate the
transactions contemplated by this Agreement.
Miscellaneous. This Agreement (including the Acknowledgment, Consent and Release
attached hereto): (i) shall be governed by and construed in accordance with the
laws of the State of Delaware; (ii) shall not be amended or modified except by
an instrument in writing executed by all parties; (iii) shall be binding upon
the successors and assigns of the respective parties; and (iv) may be executed
in several counterparts, all of which together shall constitute one agreement
binding on all parties hereto notwithstanding that all parties have not signed
the same counterpart.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first above written.
THE PARTNERSHIP:
ENRON/CNF POWER CONSTRUCTION, L.P.
a Delaware limited partnership
By: ENRON POWER I (PUERTO RICO), INC.
as a General and Limited Partner
By: ___________________________
Name:
Title:
By: CNF PENUELAS, INC.
as a General and Limited Partner
By: ___________________________
Name:
Title:
THE PARTNERS:
ENRON POWER I (PUERTO RICO), INC.
a Delaware corporation
By: __________________________
Name:
Title:
CNF PENUELAS, INC.
a Delaware corporation
By: __________________________
Name:
Title:
ACKNOWLEDGMENT CONSENT AND RELEASE
THE UNDERSIGNED, EcoElectrica, L.P., hereby acknowledges and agrees that it has
been informed of and consents to the distribution and assignment of the
Partnership Property pursuant to the terms and conditions of the Distribution
and Assignment Agreement (the "Agreement") to which this Acknowledgment, Consent
and Release is attached. Each capitalized term used herein and not otherwise
defined herein shall have the definition assigned thereto in the Agreement.
EcoElectrica, L.P. hereby further agrees that, subject to the execution and
delivery of the Assignment and Assumption Agreement whereby CNF assigns its
interest in the Partnership Property to Enron Power, all references to
"Supplier" and "Contractor" in that certain Offshore Construction Contract dated
as of November 1, 1995 (the "Construction Contract"), originally between
EcoElectrica, L.P. and Enron Power, shall refer to Enron Power. Finally,
EcoElectrica, L.P. hereby releases the Partnership, and each of the Partners
solely in their capacities as general partners and limited partners in the
Partnership (the "Released Parties"), from all duties and obligations under the
Construction Contract and agrees to accept performance of all such duties and
obligations from Enron Power in place of the Partnership and the Released
Parties.
ECOELECTRICA, L.P.,
a Bermuda exempted limited partnership
By: KES Bermuda, Inc.
a Delaware corporation, its general partner
By: ______________________________
Name:
Title:
By: Buenergia, B.V.
a Dutch limited liability company,
its general partner
By: ______________________________
Name:
Title:
ONSHORE ASSIGNMENT
EXHIBIT 1.6 (ii)
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (this "Agreement"), dated as of
[_____], 1997, is entered into by and between Enron Power I (Puerto Rico), Inc.,
a Delaware corporation ("Enron Power") and CNF Penuelas, Inc., a Delaware
corporation ("CNF").
WHEREAS, pursuant to the Limited Partnership Agreement of Enron/CNF, L.P. dated
as of December 13, 1996 (the "Partnership Agreement") and a certificate of
limited partnership filed December 16, 1996 with the Delaware Secretary of
State, Enron Power and CNF (hereinafter individually called a "Partner" and
collectively called the "Partners") formed the Partnership, with each Partner
owning a 49% general partner interest and a 1% limited partner interest in the
Partnership;
WHEREAS, pursuant to that certain Master Agreement of Dissolution, Distribution
and Assignment, dated [_______], 1997 (the "Master Agreement"), the Partners
agreed, among other things, to dissolve the Partnership in accordance with
Section 22.3(a) of the Partnership Agreement;
WHEREAS, pursuant to that certain Distribution and Assignment Agreement, dated
as of the date hereof (the "Distribution and Assignment Agreement"), the
Partners distributed, assigned, conveyed, and delivered to each Partner a 50%
undivided interest in the right, title and interest in and to all of the assets
owned, leased or held by the Partnership as of the date hereof, whether tangible
or intangible (the "Partnership Property," including, without limitation, all of
the assets and property described in Exhibit A hereto);
WHEREAS, pursuant to the Master Agreement, CNF desires to assign and transfer to
Enron Power all of CNF's interest in and to the Partnership Property distributed
and assigned to CNF under the Distribution and Assignment Agreement (the "CNF
Interest");
NOW THEREFORE, in consideration of the promises, covenants and agreements set
forth herein and in the Master Agreement and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
acknowledge and ratify their agreement as follows:
Assignment. CNF hereby assigns, conveys, transfers and delivers to Enron Power
all of CNF's right title and interest in and to the CNF Interest in exchange for
the consideration specified in the Master Agreement.
Acceptance of Assignment. Enron Power hereby accepts the assignment of the CNF
Interest and hereby assumes and agrees to perform or to satisfy and discharge
any and all duties and obligations relating to and arising out of the
Construction Contract.
Acknowledgment and Consent to Release of Partnership. Each Partner acknowledges,
consents to and agrees to be bound by, the terms and conditions set forth in the
attached Acknowledgment, Consent and Release.
Effective Date. This Agreement is effective as of the date first above written.
Further Assurances. The parties shall take all acts and execute all documents as
any other party may reasonably request to fully carry out and effectuate the
transactions contemplated by this Agreement.
Miscellaneous. This Agreement (including the Acknowledgment, Consent and Release
attached hereto): (i) shall be governed by and construed in accordance with the
laws of the State of Delaware; (ii) shall not be amended or modified except by
an instrument in writing executed by all parties; (iii) shall be binding upon
the successors and assigns of the respective parties; and (iv) may be executed
in several counterparts, all of which together shall constitute one agreement
binding on all parties hereto notwithstanding that all parties have not signed
the same counterpart.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first above written.
CNF PENUELAS, INC.
Delaware corporation, as assignor
By: ______________________________
Name:
Title:
ENRON POWER I (PUERTO RICO), INC.
a Delaware corporation, as assignee
By: ______________________________
Name:
Title:
ACKNOWLEDGMENT CONSENT AND RELEASE
THE UNDERSIGNED, EcoElectrica, L.P., hereby acknowledges and agrees that it has
been informed of and consents to the assignment and conveyance of the CNF
Interest pursuant to the terms and conditions of the Assignment and Assumption
Agreement (the "Agreement") to which this Acknowledgment, Consent and Release is
attached. Each capitalized term used herein and not otherwise defined herein
shall have the definition assigned thereto in the Agreement. EcoElectrica, L.P.
hereby further agrees that all references to "Supplier" and "Contractor" in that
certain Onshore Construction Contract dated as of November 1, 1995 (the
"Construction Contract"), originally between EcoElectrica, L.P. and Enron Power
Construction Partnership, shall refer to Enron Power. Finally, EcoElectrica,
L.P. hereby releases the Partnership, and each of the Partners solely in their
capacities as general partners and limited partners in the Partnership (the
"Released Parties"), from all duties and obligations under the Construction
Contract and agrees to accept performance of all such duties and obligations
from Enron Power in place of the Partnership and the Released Parties.
ECOELECTRICA, L.P.,
a Bermuda exempted limited partnership
By: KES Bermuda, Inc.
a Delaware corporation, its general partner
By: ________________________
Name:
Title:
By: Buenergia, B.V.
a Dutch limited liability company, its general
partner
By: ________________________
Name:
Title:
ONSHORE LETTER AGREEMENT
Exhibit 1.6(iv)
Enron Development Corp.
333 Clay Street, Suite 1700
Houston, Texas 77002
[___________], 1997
Kenetech Energy Systems, Inc.
500 Sansome Street
Suite 300
San Francisco, CA 94111
Re: Cancellation of Side Letter Agreement
Gentlemen:
I refer to that certain Side Letter Agreement dated November 1, 1995 (the "Side
Letter Agreement") between Enron Development Corp. and Kenetech Energy Systems,
Inc., pursuant to which each has the right to cancel (i) the Onshore
Construction Contract dated as of November 1, 1995, originally between
EcoElectrica, L.P. and Enron Power Construction Partnership and (ii) the
Offshore Supply Contract dated as of November 1, 1995, originally between
EcoElectrica, L.P. and Enron Equipment Procurement Company ("Enron
Procurement").
In accordance with (i) the Master Agreement of Dissolution, Distribution and
Assignment dated the date hereof, by and between Enron Power I (Puerto Rico),
Inc. and CNF Penuelas, Inc., and (ii) the Master Agreement of Dissolution
Distribution and Assignment dated the date hereof, by and between Enron
Procurement, and CNF Equipment Inc., please evidence your agreement to cancel
the terms and conditions of the Side Letter Agreement by signing and returning
this letter agreement to the undersigned.
Very truly yours,
[Authorized Signatory]
AGREED AND ACCEPTED:
KENETECH ENERGY SYSTEMS, INC.
By: __________________________ Date: __________________________
Name:
Title:
ONSHORE KENETECH GUARANTY
GUARANTY
This Guaranty, dated as of [_______], 1997 (this "Guaranty"), is by Kenetech
Corporation, a Delaware corporation (the "Guarantor"), in favor of Enron Power I
(Puerto Rico), Inc., a Delaware corporation (the "Beneficiary"):
WHEREAS, the Beneficiary and CNF Penuelas, Inc., a Delaware corporation and an
indirect wholly-owned subsidiary of the Guarantor ("CNF"), are the sole general
partners and limited partners of Enron/CNF Power Construction, L.P., a Delaware
limited partnership (the "Partnership");
WHEREAS, the Beneficiary and CNF entered into that certain Master Dissolution,
Distribution and Assignment Agreement, dated as of [_______], 1997, (the "Master
Agreement"), whereby the parties agreed, among other things, (i) to dissolve the
Partnership and cause any and all right, title and interest in and to the assets
and property of the Partnership (the "Partnership Property"), including, but not
limited to, that certain Onshore Construction Contract dated as of November 1,
1995 (the "Construction Contract"), originally between EcoElectrica, L.P. and
Enron Power Construction Partnership, to be distributed to the Beneficiary and
CNF; (ii) that CNF assign and transfer to the Beneficiary all of CNF's interests
in and to the Partnership Property to be distributed to CNF pursuant to the
dissolution of the Partnership (the "CNF Interest"); and (iii) that the
Beneficiary thereafter perform under the Construction Contract in lieu of the
Partnership;
WHEREAS, it is a condition to the Beneficiary consummating the transactions
under the Master Agreement that the Guarantor enter into this Guaranty;
WHEREAS, Guarantor acknowledges that it will benefit if CNF consummates the
transactions under the Master Agreement;
NOW, THEREFORE, in consideration of the premises set forth above and other good
and valuable consideration, receipt of which is hereby acknowledged, and as an
inducement to the Beneficiary to enter into the Master Agreement, the Guarantor
hereby agrees as follows:
1. Guaranty. In consideration of the Beneficiary entering into the Master
Agreement, the Guarantor absolutely, unconditionally and irrevocably
guarantees to Beneficiary, its successors and assigns, the prompt payment
when due, of all obligations and liabilities of CNF to Beneficiary arising
from Section 3.1, Section 3.2, Section 3.3, Section 5.1 and Section 5.2 of
the Master Agreement (the "Obligations") for so long as any Obligation may
arise under the Master Agreement. If for any reason CNF shall fail fully
and punctually to pay and perform any Obligation, the Guarantor shall pay
such sum to the Beneficiary, plus interest thereon calculated at the thirty
day LIBOR rate from the date CNF became obligated to make such payment
under the Master Agreement through the date payment is made by the
Guarantor. This Guaranty is an absolute, unconditional guaranty of payment
and performance and not of collectability, and is in no way conditioned or
contingent upon any attempt to collect from CNF, enforce performance by CNF
or on any other condition or contingency.
2. Nature of Guaranty. The Guarantor's obligations hereunder shall not be
affected by the validity or enforceability of CNF's obligations under the
Master Agreement or any other agreement relating thereto or by any other
event, occurrence or circumstance which might otherwise constitute a legal
or equitable discharge or defense of a guarantor or surety. In the event
that any payment of CNF in respect of any Obligations is rescinded or must
otherwise be returned for any reason whatsoever, the Guarantor shall remain
liable hereunder in respect to such Obligations as if such payment had not
been made. However, notwithstanding anything herein to the contrary,
nothing herein is intended to deny to the Guarantor, and it is expressly
agreed that the Guarantor shall have and may assert, any and all of the
defenses, set-offs, counterclaims and other rights with regard to any
Obligations that CNF may possess, including without limitation, any defense
based upon the payment or satisfaction by CNF of such Obligations (or the
performance or observance of any terms or provisions of the Master
Agreement out of which such Obligations are alleged to arise), except any
defense that CNF may possess relating to (i) lack of validity or
enforceability of the Master Agreement against CNF arising from the
defective incorporation of CNF; (ii) lack of qualification by CNF to do
business in any applicable jurisdiction; (iii) defective corporate
authority by CNF to enter into or perform the Master Agreement; or (iv) the
insolvency, bankruptcy, or other reorganization of CNF.
The Beneficiary shall not be obligated to file any claim relating to the
Obligations in the event that CNF becomes subject to a bankruptcy,
reorganization or similar proceeding, and the failure of Beneficiary to
file shall not affect the Guarantor's obligations hereunder.
3. Modification and Amendments. The Guarantor agrees that Beneficiary may at
any time and from time to time, without notice to or further consent of the
Guarantor, make any agreement with CNF or with any other party to or person
liable on any of the Obligations, or interested therein, for the payment,
compromise, discharge or release thereof, in whole or in part, or for any
modification of the terms thereof or of any agreement between Beneficiary
and CNF or any such other party or person, without in any way impairing or
affecting this Guaranty. Except the modifications allowed pursuant to this
Section 3, this Guaranty may be amended only with the written consent of
the Beneficiary and the Guarantor.
4. Expenses. The Guarantor agrees to pay on demand all out-of-pocket expenses
(including the reasonable fees and expenses of Beneficiary's counsel) in
any way relating to the enforcement or protection of the rights of
Beneficiary hereunder.
5. Subrogation. The Guarantor will not exercise any rights which it may
acquire by way of subrogation until all the Obligations to Beneficiary
shall have been paid in full. Subject to the foregoing, upon payment of all
the Obligations, the Guarantor shall be subrogated to the rights of
Beneficiary against CNF.
6. No Waiver; Cumulative Rights. No failure on the part of Beneficiary to
exercise, and no delay in exercising, any right, remedy or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
by Beneficiary of any right, remedy or power hereunder preclude any other
or future exercise of any right, remedy or power. Each and every right,
remedy and power hereby granted to Beneficiary or allowed it by law or
other agreement shall be cumulative and not exclusive of any other, and may
be exercised by Beneficiary from time to time.
7. Waiver of Notice. The Guarantor waives notice of the acceptance of this
Guaranty, presentment, demand, notice of dishonor, protest and all other
notices whatsoever.
8. Representations and Warranties.
(a) The Guarantor is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has full
corporate power to execute, deliver and perform this Guaranty.
(b) The execution, delivery and performance of this Guaranty have been and
remain duly authorized by all necessary corporate action and do not
contravene any provision of law or of the Guarantor's constitutional
documents or any contractual restriction binding on the Guarantor or
its assets.
(c) All consents, authorizations and approvals of, and registrations and
declarations with, any governmental authority necessary for the due
execution, delivery and performance of this Guaranty have been
obtained and remain in full force and effect and all conditions
thereof have been duly complied with, and no other action by, and no
notice to or filing with, any governmental authority is required in
connection with the execution, delivery or performance of this
Guaranty.
(d) This Guaranty constitutes the legal, valid and binding obligation of
the Guarantor enforceable against the Guarantor in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors rights and to general equity principles.
(e) (i) The Guarantor is not, and will not as a result of the execution
and delivery of this Guaranty, be rendered insolvent, (ii) the
Guarantor does not intend to incur, or believe it is incurring,
obligations beyond its ability to pay, and (iii) the Guarantor's
property remaining after the delivery and performance of this Guaranty
will not constitute unreasonably small capital.
9. Assignment. This Guaranty is binding upon Guarantor and its successors and
permitted assigns. Neither the Guarantor nor the Beneficiary may assign its
rights, interest or obligations hereunder to any other person without the
prior written consent of the other party.
10. Notices. All notices or other communications in connection with this
guaranty shall be given in the same manner and with the same effect as set
forth in Section 6.1 of the Master Agreement. The Guarantor's address for
notices is as follows: Kenetech Corporation 500 Sansome Street San
Francisco, California 94111 Attention: President Telefax No. (415) 984-8111
or such other address as the Guarantor shall from time to time specify to
Beneficiary.
11. Governing Law. This Guaranty shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to
choice of law doctrine.
12. Severability. The invalidity of one or more phrases, sentences, clauses or
Sections contained in this Guaranty shall not affect the validity of the
remaining portions of this Guaranty so long as the material purposes of
this Guaranty can be determined and effectuated.
IN WITNESS WHEREOF, the Guarantor has caused its duly authorized officer to
execute and deliver this Guaranty as of the date first above written.
KENETECH CORPORATION
By: ______________________________
Name:
Title:
ONSHORE ENRON GUARANTY
Exhibit 1.6(vii)
GUARANTY
This Guaranty, dated as of [______], 1997 (this "Guaranty"), is by Enron Power
Corp., a Delaware corporation (the "Guarantor"), in favor of CNF Penuelas, Inc,
a Delaware corporation (the "Beneficiary"):
WHEREAS, the Beneficiary and Enron Power I (Puerto Rico), Inc. a Delaware
corporation and an affiliate of the Guarantor ("EPI"), are the sole general
partners and limited partners of Enron/CNF Power Construction, L.P., a Delaware
limited partnership (the "Partnership");
WHEREAS, the Beneficiary and CNF entered into that certain Master Dissolution,
Distribution and Assignment Agreement, dated as of [_____], 1997, (the "Master
Agreement"), whereby the parties agreed, among other things, (i) to dissolve the
Partnership and cause any and all right, title and interest in and to the assets
and property of the Partnership (the "Partnership Property"), including, but not
limited to, that certain Onshore Construction Contract dated as of November 1,
1995 (the "Construction Contract"), originally between EcoElectrica, L.P. and
Enron Power Construction Partnership, to be distributed to the Beneficiary and
EPI; (ii) that the Beneficiary assign and transfer to EPI all of the
Beneficiary's interests in and to the Partnership Property to be distributed to
the Beneficiary pursuant to the dissolution of the Partnership (the "CNF
Interest"); and (iii) that EPI thereafter perform under the Construction
Contract in lieu of the Partnership;
WHEREAS, it is a condition to the Beneficiary consummating the transactions
under the Master Agreement that the Guarantor enter into this Guaranty;
WHEREAS, Guarantor acknowledges that it will benefit if the Beneficiary
consummates the transactions under the Master Agreement;
NOW, THEREFORE, in consideration of the premises set forth above and other good
and valuable consideration, receipt of which is hereby acknowledged, and as an
inducement to CNF to enter into the Master Agreement, the Guarantor hereby
agrees as follows:
1. Guaranty. In consideration of the Beneficiary entering into the Master
Agreement, the Guarantor absolutely, unconditionally and irrevocably
guarantees to Beneficiary, its successors and assigns, the prompt payment
when due, of all obligations and liabilities of EPI to Beneficiary arising
from Section 3.1, Section 5.1, and Section 5.2 of the Master Agreement (the
"Obligations") for so long as any Obligation may arise under the Master
Agreement. If for any reason EPI shall fail fully and punctually to pay and
perform any Obligation, the Guarantor shall pay such sum to the
Beneficiary, plus interest thereon calculated at the thirty day LIBOR rate
from the date EPI became obligated to make such payment under the Master
Agreement through the date payment is made by the Guarantor. This Guaranty
is an absolute, unconditional guaranty of payment and performance and not
of collectability, and is in no way conditioned or contingent upon any
attempt to collect from EPI, enforce performance by EPI or on any other
condition or contingency.
2. Nature of Guaranty. The Guarantor's obligations hereunder shall not be
affected by the validity or enforceability of EPI's obligations under the
Master Agreement or any other agreement relating thereto or by any other
event, occurrence or circumstance which might otherwise constitute a legal
or equitable discharge or defense of a guarantor or surety. In the event
that any payment of EPI in respect of any Obligations is rescinded or must
otherwise be returned for any reason whatsoever, the Guarantor shall remain
liable hereunder in respect to such Obligations as if such payment had not
been made. However, notwithstanding anything herein to the contrary,
nothing herein is intended to deny to the Guarantor, and it is expressly
agreed that the Guarantor shall have and may assert, any and all of the
defenses, set-offs, counterclaims and other rights with regard to any
Obligations that EPI may possess, including without limitation, any defense
based upon the payment or satisfaction by EPI of such Obligations (or the
performance or observance of any terms or provisions of the Master
Agreement out of which such Obligations are alleged to arise), except any
defense that EPI may possess relating to (i) lack of validity or
enforceability of the Master Agreement against EPI arising from the
defective incorporation of EPI; (ii) lack of qualification by EPI to do
business in any applicable jurisdiction; (iii) defective corporate
authority by EPI to enter into or perform the Master Agreement; or (iv) the
insolvency, bankruptcy, or other reorganization of EPI.
The Beneficiary shall not be obligated to file any claim relating to the
Obligations in the event that EPI becomes subject to a bankruptcy,
reorganization or similar proceeding, and the failure of Beneficiary to
file shall not affect the Guarantor's obligations hereunder.
3. Modification and Amendments. The Guarantor agrees that Beneficiary may at
any time and from time to time, without notice to or further consent of the
Guarantor, make any agreement with EPI or with any other party to or person
liable on any of the Obligations, or interested therein, for the payment,
compromise, discharge or release thereof, in whole or in part, or for any
modification of the terms thereof or of any agreement between Beneficiary
and EPI or any such other party or person, without in any way impairing or
affecting this Guaranty. Except the modifications allowed pursuant to this
Section 3, this Guaranty may be amended only with the written consent of
the Beneficiary and the Guarantor.
4. Expenses. The Guarantor agrees to pay on demand all out-of-pocket expenses
(including the reasonable fees and expenses of Beneficiary's counsel) in
any way relating to the enforcement or protection of the rights of
Beneficiary hereunder.
5. Subrogation. The Guarantor will not exercise any rights which it may
acquire by way of subrogation until all the Obligations to Beneficiary
shall have been paid in full. Subject to the foregoing, upon payment of all
the Obligations, the Guarantor shall be subrogated to the rights of
Beneficiary against EPI.
6. No Waiver; Cumulative Rights. No failure on the part of Beneficiary to
exercise, and no delay in exercising, any right, remedy or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
by Beneficiary of any right, remedy or power hereunder preclude any other
or future exercise of any right, remedy or power. Each and every right,
remedy and power hereby granted to Beneficiary or allowed it by law or
other agreement shall be cumulative and not exclusive of any other, and may
be exercised by Beneficiary from time to time.
7. Waiver of Notice. The Guarantor waives notice of the acceptance of this
Guaranty, presentment, demand, notice of dishonor, protest and all other
notices whatsoever.
8. Representations and Warranties.
(a) The Guarantor is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has full
corporate power to execute, deliver and perform this Guaranty.
(b) The execution, delivery and performance of this Guaranty have been and
remain duly authorized by all necessary corporate action and do not
contravene any provision of law or of the Guarantor's constitutional
documents or any contractual restriction binding on the Guarantor or
its assets.
(c) All consents, authorizations and approvals of, and registrations and
declarations with, any governmental authority necessary for the due
execution, delivery and performance of this Guaranty have been
obtained and remain in full force and effect and all conditions
thereof have been duly complied with, and no other action by, and no
notice to or filing with, any governmental authority is required in
connection with the execution, delivery or performance of this
Guaranty.
(d) This Guaranty constitutes the legal, valid and binding obligation of
the Guarantor enforceable against the Guarantor in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors rights and to general equity principles.
(e) (i) The Guarantor is not, and will not as a result of the execution
and delivery of this Guaranty, be rendered insolvent, (ii) the
Guarantor does not intend to incur, or believe it is incurring,
obligations beyond its ability to pay, and (iii) the Guarantor's
property remaining after the delivery and performance of this Guaranty
will not constitute unreasonably small capital.
9. Assignment. This Guaranty is binding upon Guarantor and its successors and
permitted assigns. Neither the Guarantor nor the Beneficiary may assign its
rights, interest or obligations hereunder to any other person without the
prior written consent of the other party.
10. Notices. All notices or other communications in connection with this
guaranty shall be given in the same manner and with the same effect as set
forth in Section 6.1 of the Master Agreement. The Guarantor's address for
notices is as follows: Kenetech Corporation 500 Sansome Street San
Francisco, California 94111 Attention: President Telefax No. (415) 984-8111
or such other address as the Guarantor shall from time to time specify to
Beneficiary.
11. Governing Law. This Guaranty shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to
choice of law doctrine.
12. Severability. The invalidity of one or more phrases, sentences, clauses or
Sections contained in this Guaranty shall not affect the validity of the
remaining portions of this Guaranty so long as the material purposes of
this Guaranty can be determined and effectuated.
IN WITNESS WHEREOF, the Guarantor has caused its duly authorized officer to
execute and deliver this Guaranty as of the date first above written.
ENRON POWER CORP.
By: ______________________________
Name:
Title:
ONSHORE RELEASE OF CNF
Exhibit 1.6(x)
CNF Industries, Inc.
355 Research Parkway
Meriden, Connecticut 06450
[______], 1997
Enron Power I (Puerto Rico), Inc.
333 Clay Street, Suite 400
Houston, Texas 77002
Attn: Legal Department
Re: Release of CNF Industries, Inc. Guaranty
Gentlemen:
I refer to that certain Guaranty dated as of December 18, 1996 (the "CNF Onshore
Guaranty") by CNF Industries, Inc., a Delaware corporation (the "Guarantor"),
for the benefit of Enron Power I (Puerto Rico), Inc., a Delaware corporation
("Enron Power I"), entered into pursuant to Section 11.3 of the Limited
Partnership Agreement of Enron/CNF Power Construction, L.P., a Delaware limited
partnership.
In accordance with (i) the Master Agreement of Dissolution, Distribution and
Assignment dated [________], 1997, by and between Enron Power I and CNF
Penuelas, Inc., and (ii) Section 16 of the CNF Onshore Guaranty, please evidence
your agreement to terminate the CNF Onshore Guaranty and release the Guarantor
from any and all obligations thereunder by signing and returning this letter
agreement to the undersigned.
Very truly yours,
[Authorized Signatory]
AGREED AND ACCEPTED:
ENRON POWER I (PUERTO RICO), INC.
By: __________________________ Date: July __, 1997
Name:
Title:
ONSHORE RELEASE OF ENRON
Exhibit 1.6(xi)
Enron Power Corp.
P.O. Box 1188
Houston, Texas 77251-1188
[______], 1997
CNF Penuelas, Inc.
355 Research Parkway
Meriden, Connecticut 06450
Attn:___________________
Re: Release of Enron Power Corp. Guaranty
Gentlemen:
I refer to that certain Guaranty dated as of December 18, 1996 (the "EPC Onshore
Guaranty") by Enron Power Corp., a Delaware corporation (the "Guarantor"), for
the benefit of CNF Penuelas, Inc., a Delaware corporation ("CNF"), entered into
pursuant to Section 11.3 of the Limited Partnership Agreement of Enron/CNF Power
Construction, L.P., a Delaware limited partnership.
In accordance with (i) the Master Agreement of Dissolution, Distribution and
Assignment dated [_____], 1997, by and between Enron Power I (Puerto Rico) I,
Inc. and CNF, and (ii) Section 16 of the EPC Onshore Guaranty, please evidence
your agreement to terminate the EPC Onshore Guaranty and release the Guarantor
from any and all obligations thereunder by signing and returning this letter
agreement to the undersigned.
Very truly yours,
[Authorized Signatory]
AGREED AND ACCEPTED:
CNF PENUELAS, INC.
By: __________________________ Date: July __, 1997
Name:
Title: