Exhibit(e)(3)
MASTER TERMINATION AGREEMENT
This MASTER TERMINATION AGREEMENT, dated February 22, 2002 (this
"Agreement"), is entered into among Enron Corp., an Oregon corporation
("Enron"), Enron North America Corp., a Delaware corporation ("ENA"), Enron
Power Marketing, Inc., a Delaware corporation ("EPMI"), Enron Energy Services,
Inc., a Delaware corporation ("EESI"), and Enron Energy Services LLC, a Delaware
limited liability company ("EES LLC" and together with Enron, ENA, EPMI and EESI
the "Enron Parties"), and NewPower Holdings, Inc., a Delaware corporation
("NewPower"), and The New Power Company, a Delaware corporation ("TNPC" and
together with NewPower, the "NewPower Parties"). Enron, EES LLC, ENA, EESI,
EPMI, NewPower and TNPC are sometimes referred to individually herein as a
"Party", and collectively as the "Parties."
RECITALS:
WHEREAS, certain of the Enron Parties and the NewPower Parties prior to
the date hereof have entered into agreements listed in Schedule A hereto
pursuant to which, among other things, (i) certain future business opportunities
were allocated between certain of the Enron Parties and the NewPower Parties and
areas of noncompetition were agreed upon, (ii) one or more of the Enron Parties
agreed to provide certain services to the NewPower Parties, (iii) EES LLC agreed
to provide certain computer software and support to the NewPower Parties, and
(iv) EES LLC and TNPC agreed to the methodologies that would be used to transfer
certain contracts that were contributed by EES LLC to the NewPower Parties with
respect to certain electricity and natural gas customers (the foregoing matters
in clauses (i) through (iv) above, collectively, the "Transactions and
Agreements"); and
WHEREAS, Enron and certain of its subsidiaries and affiliates (but not
the NewPower Parties) have filed voluntary petitions for Chapter 11
reorganization (collectively, the "Chapter 11 Proceeding") with the U.S.
Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court");
and
WHEREAS, the Enron Parties and the NewPower Parties desire to terminate
the Transactions and Agreements and the other contracts and agreements covered
hereunder subject to the conditions herein stated.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the Parties hereto agree as follows:
1. Termination, Release and Payment. Subject to the prior
approval of this Agreement by the Bankruptcy Court, effective
immediately upon the payment in full of that certain
promissory note, of even date herewith, in the original
principal amount of $28,000,000.00 from NewPower to EESI (the
"Promissory Note") (the "Termination Date"), all oral or
written contracts, agreements, arrangements, executory
commitments, instruments, loan or credit agreements, notes,
bonds, guarantees, indentures, leases, licenses or other
arrangements, including the Transactions and Agreements and
including any transactions or arrangements effected under or
in connection with any of the foregoing which constitute
obligations that have not been performed, discharged and
settled in full without further obligation as of the date
hereof (collectively, the "Contracts" and individually, a
"Contract") (A) to which both (x) any of the NewPower Parties
or any of their current or former subsidiaries (the "NewPower
Entities") and (y) any of the Enron Parties or any of their
current or former subsidiaries (other than the NewPower
Entities) (the "Enron Entities") is a party or by which any of
them or any of their respective properties or assets may be
bound, or (B) under which either (x) any of the NewPower
Entities have or have agreed to incur indebtedness or other
borrowing or assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or
otherwise) for the obligations of any of the Enron Entities or
(y) any of the Enron Entities have or have agreed to incur
indebtedness or other borrowing or assume, guarantee, endorse
or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any of the
NewPower Entities, excluding from (A) and (B) this Agreement,
the Settlement Agreement (as defined below) and the Tender
Agreement among NewPower, Enron and certain of its affiliates
(the "Tender Agreement") (the Contracts referred to in clauses
(A) and (B), collectively, the "EN Agreements"), shall, to the
extent that any of the NewPower Entities has any right
against, or an obligation to, any of the Enron Entities, or to
the extent that any of the Enron Entities has any right
against, or an obligation to, any of the NewPower Entities
thereunder or with respect thereto, be automatically
terminated, without further action from any party, and from
and after the Termination Date each of the Enron Entities and
the NewPower Entities on behalf of themselves and each of
their respective Subsidiaries hereby FULLY, COMPLETELY AND
FOREVER RELEASE each other and are hereby released from all
rights, duties, and obligations accrued, contingent, (whether
past, present, future or otherwise and whether at law or in
equity) in and under the EN Agreements, including, but not
limited to, any further payments under or with respect
thereto. Notwithstanding the foregoing, (a) the Commodities
Contracts (as such term is defined in the Settlement
Agreement, dated as of even date herewith, among the NewPower
Parties, Enron, Enron North America Corp., Enron Power
Marketing, Inc., and Enron Energy Services, Inc. (the
"Settlement Agreement") shall be canceled and terminated
pursuant to the terms of the Settlement Agreement, and (b) (i)
Section 6 of the Business Opportunity Agreement dated as of
January 6, 2000 between Enron and EMW Energy Services Corp.
(now known as NewPower) and (ii) the provisions of the
Software Agreement, dated as of January 6, 2000, between EES
LLC and EMW Energy Services Corp. other than Sections 4(c), 5,
6 and 7 of such agreement, shall survive and continue in full
force and effect after the Termination Date in accordance with
their terms, and, in addition, all provisions of such
agreements containing relevant definitions, or with respect to
governing law, submission to jurisdiction, waivers, and waiver
of jury trial, shall survive.
2. (a) Effective immediately upon payment in full of all
principal and accrued and unpaid interest under the Promissory
Note (except with respect to the obligations and rights under
this Agreement, the Settlement Agreement and the Tender
Agreement, which shall survive in accordance with their
terms), each of
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the Enron Parties, for itself and on behalf of its Related Companies,
and each of the NewPower Parties, for itself and on behalf of its
Related Companies, hereby fully, completely and forever release and
discharge each other, each other's Related Companies, their and their
Related Companies' past and present directors, officers, agents,
employees (to the extent acting in such capacity) and attorneys, and
predecessors, successors and assigns, from any and all suits, claims or
rights whatsoever of any kind, including, without limitation, under or
in respect of the EN Agreements, both in law or in equity, known or
unknown, suspected or unsuspected, asserted or contingent, which any
party now has or ever may have had against any other party up to and
including the date upon which the later to occur of (x) the payment in
full of the principal amount and all accrued and unpaid interest under
the Promissory Note and (y) the payments to all Related Companies of
the Enron Parties of all amounts due them as required by and pursuant
to the Offer (as defined in Section 7 below), (such later date, the
"Effective Date") or which may arise in respect of any period or
matters occurring prior to the Effective Date. "Related Companies"
means (i) in respect of each of the Enron Parties, each entity that
owns, directly or indirectly, a majority of the voting capital stock or
voting equity capital of such Enron Party and each entity of which such
Enron Entity owns, directly or indirectly, a majority of the voting
capital stock or voting equity capital (in each such case other than
the NewPower Parties) and (ii) in respect of each of the NewPower
Parties, each entity that owns, directly or indirectly, a majority of
the voting capital stock or voting equity capital of such NewPower
Party and each entity of which such NewPower Party owns, directly or
indirectly, a majority of the voting capital stock or voting equity
capital (in each such case other than the Enron Parties and the Enron
Parties' Related Companies that beneficially own or hold equity capital
of NewPower).
(b) To the knowledge of the Enron Parties, after due inquiry, (i) no
person that is a controlled affiliate of any of the Enron Entities
(other than an Enron Entity with respect to which there are granted
effective releases under Section 2(a) above) (such controlled
affiliates of the Enron Entities (other than an Enron Entity with
respect to which there are granted effective releases under Section
2(a) above), collectively the "EP Affiliates") is a party to any
Contract (other than as set forth in Schedule I to the Settlement
Agreement or on Schedules A and B of this Agreement) with a NewPower
Entity that will not have been performed, discharged and settled in
full without further obligation as of the Effective Date, and (ii)
there are no matters (whether arising under Contract or past dealings
and whether arising at law or in equity), other than as set forth on
Schedule I to the Settlement Agreement or on Schedules A and B of this
Agreement, pursuant to which any EP Affiliate has any claim or cause of
action against any of the NewPower Parties. For purposes of the
preceding sentence, the Enron Parties acknowledge and agree, without
limitation, that each of Cortez Energy Services, LLC, McGarret I,
L.L.C., McGarret II, L.L.C., McGarret III, L.L.C., each a Delaware
limited liability company, and EES Warrant Trust, a Delaware business
trust, constitute an EP Affiliate.
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3. Representations and Agreements. (a) Each Party hereby represents and
warrants to each other Party that the execution, delivery, and
performance hereof by it are within its corporate or other
organizational powers and have been duly authorized by all necessary
corporate or other action (other than approval by the Bankruptcy
Court), and, subject to such approval by the Bankruptcy Court, that
this Agreement constitutes its legal, valid, and binding obligation. In
addition, the Parties hereto acknowledge and agree that this Agreement,
the agreements listed on Schedule A hereto, the Settlement Agreement,
the agreements listed on Schedule I to the Settlement Agreement
(including any and all transactions or confirmations executed in
connection therewith), the Promissory Note and the agreements listed in
Schedule B hereto are the only EN Agreements that have not been
performed in full by the parties thereto or under which (i) any of the
NewPower Entities has a continuing obligation or liability to or in
respect of any of the Enron Entities, or (ii) any of the Enron Entities
has a continuing obligation or liability to or in respect of any of the
NewPower Entities.
(b) NewPower represents and warrants to the Enron Entities that this
Agreement has been approved by the majority vote of the members of the
Business Review Committee of NewPower's Board of Directors (a copy of
such approval to be provided to Enron).
4. Further Assurances. Subject to the prior approval of this Agreement and
the transactions contemplated hereby by the Bankruptcy Court, each
Party shall execute and deliver such additional instruments and other
documents and shall take such further actions as may be reasonably
necessary or appropriate to effectuate, carry out and comply with all
of its obligations under this Agreement. Without limiting the
generality of the foregoing, but subject to the prior approval of this
Agreement and the transactions contemplated hereby by the Bankruptcy
Court, no Party shall enter into any agreement or arrangement (or
alter, amend or terminate any existing agreement or arrangement) or
take any other action (or fail to take any other action) if such action
(or failure) would materially impair the ability of any Party to
effectuate, carry out or comply with all the terms of this Agreement.
5. Prior Approval by Creditors' Committee; Agreement to Seek Bankruptcy
Court Approval. The Enron Parties represent that the transactions
contemplated by this Agreement have been approved by the creditors'
committee established under the Chapter 11 Proceeding. Not later than
March 1, 2002, the Enron Parties shall file a joint motion (the
"Initial Motion") for determination of approval by the Bankruptcy Court
of this Agreement and the transactions contemplated hereby, which
Initial Motion shall be in substantially the form attached as Annex A
hereto. Each of the Enron Parties shall use reasonable best efforts to
obtain an order from the Bankruptcy Court approving the Initial Motion
(the "Initial Order"), as promptly as is practicable and in any event
within 60 days after the date of this Agreement. The Enron Parties
shall give the NewPower Parties reasonable opportunity to review in
advance all filings with the Bankruptcy Court relating to approval of
this Agreement and the Initial Motion.
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6. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
7. Termination. This Agreement shall terminate if the Offer (as defined in
the Agreement and Plan of Merger by and among NewPower and certain
other parties dated the date hereof) is terminated without Purchaser's
purchase of shares thereunder validly tendered and not withdrawn, and,
if this Agreement is so terminated, the EN Agreements (other than the
Commodities Contracts that shall be subject to the Settlement
Agreement) shall continue in effect in accordance with their terms.
8. Counterparts. The Parties have executed this Agreement in multiple
counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one instrument.
9. Entire Agreement. This Agreement contains the entire agreement among
the Parties with respect to the subject matter hereof, and there are no
other agreements, understandings, representations, or warranties
between or among the Parties other than those set forth or referred to
herein and therein.
10. Expenses. Except as otherwise set forth in this Agreement, all legal
and other costs and expenses incurred in reaching and executing this
Agreement and the transactions contemplated hereby shall be paid by the
Party incurring such costs and expenses.
11. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Parties hereto and their respective successors
and assigns.
12. 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
capitalized terms defined herein are equally applicable to both the
singular and plural forms of such terms.
13. Amendments; 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 any other Party 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.
14. Severability. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by reason of any rule
of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect. 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
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Parties as closely as possible in an acceptable manner to the end that
the transactions contemplated hereby are fulfilled to the extent
possible.
15. No Consequential or Punitive Damages. Notwithstanding anything in this
Agreement or in any other agreement to the contrary, in no event shall
any Party to this Agreement be obligated to any other Party to this
Agreement for any consequential, punitive or special damages arising
from any breach or violation of this Agreement.
ENRON CORP.
By: /s/ Mark S. Muller
------------------------------------
Name: Mark S. Muller
Title: EVP
ENRON ENERGY SERVICES, LLC
By: /s/ Daniel P. Leff
------------------------------------
Name: Daniel P. Leff
Title: Chairman &
Chief Executive Officer
ENRON NORTH AMERICA CORP.
By: /s/ L. Don Miller
------------------------------------
Name: L. Don Miller
Title: President
ENRON POWER MARKETING, INC.
By: /s/ L. Don Miller
------------------------------------
Name: L. Don Miller
Title: President
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ENRON ENERGY SERVICES, INC.
By: /s/ Daniel P. Leff
----------------------------------
Name: Daniel P. Leff
-------------------------------
Title: Chairman &
Chief Executive Officer
-------------------------------
NEWPOWER HOLDINGS, INC.
By: /s/ H. Eugene Lockhart
----------------------------------
Name: H. Eugene Lockhart
------------------------------
Title: Chairman, President and
Chief Executive Officer
------------------------------
THE NEW POWER COMPANY
By: /s/ H. Eugene Lockhart
----------------------------------
Name: H. Eugene Lockhart
-------------------------------
Title: President and
Chief Executive Officer
-------------------------------
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SCHEDULE A
TRANSACTIONS AND AGREEMENTS LISTING
1. Business Opportunity Agreement dated as of January 6, 2000 between
Enron Corp. and EMW Energy Services Corp., other than Section 6
thereof.
2. Noncompetition Agreement dated as of January 6, 2000 among Enron Corp.,
Enron Energy Services, LLC and EMW Energy Services Corp.
3. Master Services Agreement dated as of January 6, 2000 among Enron
Corp., Enron Energy Services, LLC and EMW Energy Services Corp.
4. Notwithstanding anything to the contrary in Section 11 thereof,
Sections 4(c), 5, 6 and 7 of the Software Agreement dated as of January
6, 2000 between Enron Energy Services, LLC and EMW Energy Services
Corp.
5. Transfer and Valuation Agreement, dated as of September 2000, between
The New Power Company and Enron Energy Services, LLC.
6. ROP Contract AD0089, dated as of August 2, 2001, between Enron Media
Services, L.P. and NewPower Holdings, Inc.
Schedule A
SCHEDULE B
1. Stockholders Agreement, dated as of January 6, 2000, among EMW Energy
Services Corp. (now known as NewPower Holdings, Inc.), EES LLC, Cortez
and certain other parties thereto, as amended by Amendment No. 2 to the
Stockholders Agreement, dated as of July 10, 2000, by and among the
parties thereto.
2. Contribution and Subscription Agreement, dated as of December 23, 1999,
by and among EMW Energy Services Corp. (now known as NewPower Holdings,
Inc.), EES LLC and the other parties thereto.
3. The Warrant Agreements relating to the warrants issued pursuant to
Section 2.1(e) of the Contribution and Subscription Agreement listed as
item no. 2 above.
4. The Assignment and Assumption of Contributed Contracts, dated as of
January 6, 2000, entered into by and between EES LLC and EMW Energy
Services Corp. (now known as NewPower Holdings, Inc.).
Schedule B