Opinion
Case No. 01-16034 (AJG) Jointly Administered
April 10, 2003
Martin J. Bienenstock, Brian S. Rosen and Martin A. Sosland, WEIL, GOTSHAL MANGES LLP, Attorneys For Debtors And Debtors In Possession.
Upon the motion dated March 14, 2003 (the "Motion") of Enron North America Corp. ("ENA" or "Seller"), as a debtor and debtor in possession, pursuant to sections 105, 363(b), (f), (m) and (n), and 365 of title 11 of the United States Code (the "Bankruptcy Code") and Rules 2002, 6004, 6006, and 9013 of the Federal Rules of Bankruptcy Procedures (the "Bankruptcy Rules"), for the entry of the following two orders: (A) this order (the "Procedures Order") (I) scheduling May 5, 2003, at 10:00 a.m. as the date and time to hold an auction (the "Auction") at which ENA will solicit higher or better bids for the sale of the Cash Flow Interest Agreement, dated as of July 1, 1998 (the "CFIA"), between ENA and Onondaga Cogeneration Limited Partnership ("OCLP"), the Amended and Restated Gas Sales Agreement, effective as of July 1, 1998, between ENA and OCLP (the "Gas Sales Agreement" and, together with the CFIA, the "Contracts") and certain related assets (together with the Contracts, the "Assets"), in connection with that certain Purchase and Sale Agreement between ENA and Arctas-Paragon Investments LLC ("Buyer") dated as of March 14, 2003 (the "Purchase Agreement"), free and clear of all liens, claims, interests, encumbrances, rights of setoff, recoupment, netting, and deduction; (II) approving the procedures to be used in connection with the Auction (the "Bidding Procedures"); (III) approving procedures to determine the amounts (the "Cure Amounts"), if any, to cure any defaults under the Contracts (the "Cure Amount Procedures"), if and prior to any such Contracts are assumed by Seller and assigned to Buyer, (IV) approving the payment of a termination fee (the "Termination Fee") to Buyer; (V) scheduling a hearing on the sale of the Assets free and clear of liens, claims, interests, encumbrances, rights of setoff, recoupment, and deduction (the "Sale Hearing"); and (VI) approving the form and manner of notice for the Motion and the relief requested therein, including notice of the Auction, the Bidding Procedures, the Cure Amount Procedures, the Sale Hearing, and the form of Sale Order (as defined below) (collectively, the "Notice Procedures"); and (B) at the conclusion of the Sale Hearing, the order (the "Sale Order"), a copy of which is attached to the Motion as Exhibit "C," authorizing Seller to sell the Assets to Buyer or to the successful bidder at the Auction (the "Winning Bidder"), and the Court having jurisdiction to consider and determine the Motion in accordance with 28 U.S.C. § 1334; and due notice of the Motion having been provided, and it appearing that no other or further notice need be provided; and after due deliberation and sufficient cause appearing therefor, it is;
All capitalized terms used, unless otherwise defined herein, shall have the meaning as defined in the Motion or in the Purchase Agreement (as defined herein).
HEREBY FOUND AND DETERMINED THAT:
The Court has jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C. § 157 and 1334.
A. The Termination Fee in an amount equal to the greater of (i) One Hundred and Twenty Thousand Dollars ($120,000.00), and (ii) three percent (3%) of the price at which the Assets are sold pursuant to an Alternative Transaction (as that term is defined in the Purchase Agreement) as set forth in the Purchase Agreement (but in any event not to exceed Two Hundred Thousand Dollars ($200,000.00)) is fair and reasonable and was negotiated by the parties in good faith and at arm's-length. The Termination Fee will initiate an overbid process at a floor price that is desirable for ENA's estate, will foster competitive bidding for the Assets, and will accordingly confer a benefit to ENA, its estate and creditors at least equal to the amount of the Termination Fee.
B. The Bidding Procedures are reasonable and appropriate and the use of the Auction represents the best method for maximizing the return from the sale of the Assets.
C. The form and scope of the Bidding Procedures Notice (as that term is defined below) are reasonable and appropriate.
D. The Cure Amount Procedures are appropriate and represent the best method for determining the Cure Amounts, if any.
E. The entry of this Procedures Order is in the best interest of the Seller and its estate and creditors.
F. A reasonable opportunity to object or be heard with respect to the Motion and the relief requested therein and this Order has been afforded to all interested persons and entities, including, but not limited to, (i) the Office of the United States Trustee; (ii) counsel for the DIP Lenders; (iii) counsel for the Official Committee of Unsecured Creditors in the Debtors' chapter 11 cases (the "Creditors' Committee"); (iv) Buyer and its counsel; (v) all entities known to ENA to have, or to have asserted, any lien, claim, interest, encumbrance, or right of setoff, recoupment, netting, or deduction in or upon the Assets; (vi) all known parties who submitted a prior bid for the Assets; (vii) all known parties who expressed in writing to ENA an interest in the Assets; (viii) the counter-parties to the Contracts; (ix) all relevant taxing authorities; (x) the Examiner for ENA; (xi) counsel for the Employment-Related Issues Committee; (xii) counsel to any other statutory committee appointed in the Debtors' chapter 11 cases (the "Additional Committees"); and (xiii) all entities who had filed a notice of appearance and request for service of papers in these cases in accordance with Bankruptcy Rule 2002 and the Court's Second Amended Case Order, dated December 17, 2002 (the "Case Management Order").
NOW THEREFORE, THE COURT HEREBY ORDERS THAT:
1. The Bidding Procedures set forth below are approved.
2. The Sale Hearing shall be held on May 15, 2003, at 10:00 a.m. (New York City Time), or as soon thereafter as counsel may be heard, before the Honorable Arthur J. Gonzalez, United States Bankruptcy Judge, in Room 523 of the United States Bankruptcy Court, Alexander Hamilton Customs House, One Bowling Green, New York, New York 10004.
3. All objections to the Motion or the relief requested therein with regard to the Bidding Procedures and the Notice Procedures relating the sale of the Assets, that have not been withdrawn, waived, or settled, and all reservations of rights included therein except those announced on the record and agreed to by all counsel present, are overruled on the merits.
4. Pursuant to Bankruptcy Rule 6004(f)(1), ENA is authorized to conduct, the Auction in respect of the Assets pursuant to the terms set forth below.
5. The following Bidding Procedures shall apply with respect to the proposed sale of the Assets:
a. Auction Date and Time. The Auction will be held on May 5, 2003, commencing at 10:00 a.m. (New York Time) at the offices of Weil, Gotshal Manges, 767 Fifth Avenue, New York, New York 10153 for consideration of qualifying offers that may be presented to ENA, or at such time and/or date as ENA may determine, upon prior consultation with the Creditors' Committee. Notice of any changes in the Auction date or time shall be filed with the Court and provided to any party known by ENA to have indicated a desire to participate in the Auction as soon as practicable.
b. Qualification as Bidder. Any entity that wishes to make a bid for the Assets (each bid a "Competing Bid") must provide ENA with sufficient and adequate information to demonstrate, to the satisfaction of ENA, upon consultation with the Creditors' Committee, that such bidder has the financial wherewithal and ability to consummate the sale including evidence of adequate financing, and including a financial guaranty or irrevocable letter of credit, if deemed appropriate, each in a form agreed upon by ENA, in consultation with the Creditors' Committee.
c. Bid Requirements.
• ENA, upon consultation with the Creditors' Committee, shall entertain bids that are on substantially the same terms and conditions as those terms set forth in the Purchase Agreement and the documents set forth as exhibits thereto.
• Bids must be accompanied by a cash deposit at least equal to 10% of the Competing Bid (the "Earnest Money Deposit") (which, if such person or entity is Buyer, shall refer to the Earnest Money Deposit made by the Buyer under the Purchase Agreement).
• Prior to the Bid Deadline, the Earnest Money Deposit is to be:
wired transferred to:
JP Morgan Chase Bank 500 Stanton Christiana Road Newark, DE 19713 ABA#021000021 For Credit To: Weil, Gotshal Manges LLP Special Account Acct#0158-37-474 Reference: 43889.0003 M. Sosland (Onondaga Deposit)
• Upon the closing of the sale of the Assets, the Earnest Money Deposit is to be applied toward the purchase price, in accordance with the terms of the Purchase Agreement, if ENA, in consultation with the Creditors' Committee, accepts the Competing Bid as the highest or best offer at the conclusion of the Auction and the sale of the Assets to such entity is approved by the Court.
• If one or more bidders, other than Buyer, are not the Winning Bidder, their Earnest Money Deposits will be returned to such bidders as soon as reasonably practicable upon the earlier of (a) the closing of the sale of the Assets the Winning Bidder or (b) at such time as such bids are no longer binding pursuant to the Bidding Procedures as approved by the Court.
• Competing Bids must be (a) in writing, (b) signed by an individual authorized to bind the prospective purchaser, and (c) received no later than 4:00 p.m. (New York Time) on May 2, 2003 (the "Bid Deadline") by (i) Enron, 1400 Smith Street, Houston, Texas 77002, Attention: Maria E. Grannen, maria.e.grannen@enron.com; or Facsimile: 713-646-3253), (ii) Weil, Gotshal Manges LLP, 100 Crescent Court, Dallas, Texas 75201, Attention: Martin A. Sosland, Esq. (martin.sosland@weil.com; and Facsimile: 214-746-7777), Attorneys for the Debtor; and (iii) Squire, Sanders Dempsey L.L.P., 312 Walnut Street, Suite 3500, Cincinnati, Ohio 45202, Attention: Stephen D. Lerner, Esq., (slerner@ssd.com; and Facsimile: 513-361-1201), Attorneys for the Creditors' Committee.
• Any Competing Bid must be presented under a contract substantially similar to the Purchase Agreement, attached to the Motion as Exhibit "A", marked to show any modifications made to the Purchase Agreement, including the amount of consideration, name of purchaser, and other conforming changes that must be made to reflect the purchaser and its bid, and such bid must not be subject to due diligence review, board approval obtaining financing, or the receipt of any non-governmental consents.
• Initial Overbids. The initial overbid (the "Initial Overbid") must be in an amount that is at least U.S. $228,000 greater than the U.S. $4,050,000 Purchase Price in the Purchase Agreement.
• Parties not submitting competing Bids by the Bid Deadline may not be permitted to participate at the Auction.
• All bids for the purchase of the Assets shall be subject to approval of the Bankruptcy Court.
d. Due Diligence and Questions Prior to Submitting Bids.
• In order to conduct due diligence regarding the Assets, documents relating to the Assets will be available for viewing at 1400 Smith Street, Houston, Texas and/or via electronic format. Contact Maria E. Grannen at 713-345-4395 to schedule a time to review the contents of the due diligence room or to receive a copy of relevant documents via electronic format. The due diligence room will be available from April 11, 2003 to May 2, 2003. In order to access such documents, if not previously executed, parties must sign the Confidentiality Agreements with ENA in substantially the form attached hereto as Exhibit "B."
e. Auction.
• Evaluation of Highest or Best Offer. ENA shall, after the Bid Deadline and prior to the Auction, upon consultation with the Creditors' Committee: (i) evaluate all Competing bids received, (ii) invite certain parties to participate in the Auction, and (iii) determine, which Competing Bid reflects the highest or best offer for the Assets (the "Initial Bid"). ENA shall inform each bidder of such determination during the Auction.
• ENA, in consultation with the Creditors' Committee may reject any Competing Bid not in conformity with the requirements of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules of the Court, this Procedures Order or that is contrary to the best interests of ENA, its estate or creditors.
• Adjournment of Auction. The Auction may be adjourned as ENA, upon consultation with the Creditors' Committee, deems appropriate. Reasonable notice of such adjournment and the time and place for the resumption of the Auction shall be given to Buyer, all entities submitting Competing Bids, and the Creditors' Committee.
• Subsequent Bids. Subsequent bids (i.e., the Bid Increment) at the Auction must be in an amount that is at least U.S. $40,000 more than the Initial Overbid and each subsequent bid.
• Other Terms. All Competing Bids are subject to such other terms and conditions as are announced by ENA, in consultation with the Creditors' Committee. The Bidding Procedures set forth herein may be modified by ENA, in consultation with the Creditors' Committee, as maybe determined to be in the best interests of its estate or creditors.
f. Failure to Close. In the event a qualified bidder (other than Buyer) is the Winning Bidder (as determined by ENA, upon consultation with the Creditors' Committee, and approved by the Court), and such Winning Bidder fails to consummate the proposed transaction by the Closing Date for any reason, ENA shall (i) retain such bidder's Deposit (but not as liquidated damages), and ENA reserves the right to pursue all available remedies, whether legal or equitable, available to it, and (ii) upon consultation with the Creditors' Committee, shall be free to consummate the proposed transaction with the next highest bidder at the highest price bid by such bidder at the Auction (or, if that bidder is unable to consummate the transaction at that price, ENA, upon consultation with the Creditors' Committee, may consummate the transaction with the next higher bidder, and so forth) without the need for an additional hearing or order of the Court.
g. Non-Conforming Bids. Notwithstanding anything to the contrary herein, ENA, in consultation with the Creditors' Committee, shall have the right to entertain non-conforming bids for the Assets.
h. Modifications. In its business judgment and sole and absolute discretion, upon consultation with the Creditors' Committee, ENA may reject any bid at any time before entry of an order by the Bankruptcy Court approving such bid, including, but not limited to those that are (i) not in conformity with the requirements of the Bankruptcy Code, the Bankruptcy Rules or the Local Bankruptcy Rules of the Court, (ii) contrary to the best interests of ENA, its estate and creditors, and parties in interest, or (iii) otherwise inadequate or insufficient. Subject to paragraph 6(g) above, no bids shall be considered by ENA unless a party submitted an offer in accordance with these Bidding Procedures and participated in the Auction.
i. Bids are Irrevocable. All bids are irrevocable until the earlier to occur of (i) the closing of the sale of the Assets, or (ii) thirty (30) days following the last date of the Auction (as may be adjourned).
j. Non-Solicitation of Third Parties. Buyer, any bidder, or any of its respective directors, officers, employees, accountants or other agents or representatives shall not directly, or indirectly, solicit a bid from a third party to purchase the Assets or engage in or continue any discussion or negotiations with any party that has made or who may bid for the Assets.
k. Expenses. Any bidders presenting bids shall bear their own expenses in connection with the sale of the Assets, whether or not such sale is ultimately approved.
l. Notice of Winning Bidder. Within one (1) business day following the conclusion of the Auction, ENA shall provide notice of the Winning Bidder to OCLP and a summary of the facts supporting the Winning Bidder's ability to perform under the Contracts.
6. In the event that the Purchase Agreement is terminated pursuant to Section 11.1(a)(ii)(D) or Section 11.1(a) (iii) (D) thereof and the Alternative Transaction closes, Seller shall pay to Buyer, as a priority administrative claim, within two (2) Business Days after the closing of the Alternative Transaction, an amount equal to the greater of (i) One Hundred and Twenty Thousand Dollars ($120,000.00), and (ii) three percent (3%) of the price at which the Assets are sold pursuant to an Alternative Transaction; provided, however, in no event shall this Termination Fee exceed Two Hundred Thousand Dollars ($200,000.00).
7. The following Cure Amount Procedures shall apply with respect to the proposed assumption and assignment of the Contracts pursuant to section 365 of the Bankruptcy Code:
a. ENA shall provide notice of the Cure Amounts to all non-debtor parties to the Contracts on or before April 11, 2003. If a party disagrees with the Cure Amount proposed by ENA, it must file a written response with the Bankruptcy Court with supporting documentation and serve a copy on (i) Enron North America Corp., 1400 Smith Street, Houston, Texas, 77002, Attention: Maria E. Grannen (Facsimile: 713-646-3253), (ii) Weil, Gotshal Manges LLP, 700 Louisiana, Suite 1600, Houston, Texas 77002, Attention: Martin Sosland, Esq. (Facsimile: 214-746-7777), Attorneys for ENA, and (iii) Squire, Sanders Dempsey L.L.P., 312 Walnut Street, Suite 3500, Cincinnati, Ohio, 45202, Attention: Stephen D. Lerner, Esq. (Facsimile: 513-361-1201), Attorneys for the Creditors' Committee so that it is actually received by such persons no later than May 2, 2003, at 5:00 p.m. (New York Time).
b. If a Cure Amount cannot be resolved consensually and Seller proceeds with the assumption and assignment of the relevant Contract to Buyer, the disputed portion of the Cure Amount will be escrowed pending a determination by the Court of such amount upon notice of a hearing in accordance with the Case Management Order.
8. Pursuant to Bankruptcy Rule 2002, ENA is hereby authorized and ordered to serve this Procedures Order, and notice of the Bidding Procedures, the Cure Amount Procedures, the Auction and the Sale Hearing (the "Notice"), in substantially the form attached hereto as Exhibit "A" on or before April 11, 2003, in accordance with the Case Management Order, Bankruptcy Rules 2002, 6004, and 9013 and Rule 9013-1(c) of the Local Rules, upon (a) Buyer, (b) Squire, Sanders Dempsey L.L.P., 312 Walnut Street, Suite 3500, Cincinnati, Ohio 45202, Attention: Stephen D. Lerner, Esq., Attorneys for the Creditors' Committee, (c) the Office of the United States Trustee, 33 Whitehall Street, 21st Floor, New York, New York 10004, Attn: Mary Tom, Esq. (d) Davis, Polk Wardwell, counsel to JP Morgan Chase, 450 Lexington Avenue, New York, New York 10017, Attn: Donald Bernstein, Esq., (e) Shearman Sterling, counsel to Citibank, N.A., 599 Lexington Avenue, New York, New York 10022, Attn: Fred Sosnick, Esq., (e) Kronish Lieb Weiner Hellman LLP, 1114 Avenue of the Americas, New York, New York 10036-7798, Attn: James A. Beldner, Esq., counsel for the Employment-Related Issues Committee; (f) counsel to any other statutory committee appointed in the Debtors' chapter 11 cases; (g) any person, or counsel if retained, appointed pursuant to 28 U.S.C. § 1104, (h) all entities who have filed notices of appearances requesting service of papers in this case in accordance with Bankruptcy Rule 2002, (i) all relevant taxing authorities, (j) any entity known to ENA to assert any lien or other interest in the Assets; (k) any party who submitted a prior bid for the Assets; (l) any party who has expressed in writing an interest in the Assets; (m) all counter-parties to the Contracts; and (2) electronic notification through posting on the Bankruptcy Court's website, www.nysb.uscourts.gov; and all such service shall constitute good and sufficient notice of the sale of the Assets, this Procedures Order, the Bidding Procedures, the Cure Amount Procedures, the Auction, the Sale Hearing and all proceedings to be held thereon.
9. Responses or objections, if any, to the relief requested in the Motion with regard to the request for the sale of the Assets and the assumption and assignment of the Contracts, other than an objection to the proposed Cure Amounts with respect to the Contracts which shall be governed by paragraph 7(a) above, must be in writing, conform to the Federal Rules of Bankruptcy Procedure and the Local Rules, and be filed with the Bankruptcy Court electronically in accordance with General order M-242 (General Order M-242 and the User's Manual for the Electronic Case Filing System can be found at www.nysb.uscourts.gov, the official website for the Bankruptcy Court), by registered users of the Bankruptcy Court's case filing system and, by all other parties in interest, on a 3.5 inch disk, preferably in Portable Document Format (PDF), Wordperfect or any other Windows-based word processing format (with a hard copy delivered directly to Chambers) and shall be served in accordance with General Order M-242 and the Case Management Order, and upon: (1) Weil, Gotshal Manges LLP, 767 Fifth Avenue, New York, New York 10153, Attention: Martin J. Bienenstock, Esq. and Brian S. Rosen, Esq. (Facsimile: 212-310-8007), Counsel for the Debtors; (2) Squire, Sanders Dempsey L.L.P., 312 Walnut Street, Suite 3500, Cincinnati, Ohio 45202, Attention: Stephen D. Lerner, Esq. (Facsimile: 513-361-1201), Attorneys for the Creditors' Committee, Counsel for the Creditors' Committee; (3) the Office of the United States Trustee, 33 Whitehall Street, 21st Floor, New York, New York 10004, Attention: Mary Elizabeth Tom, Esq.; (4) Davis, Polk Wardwell, 450 Lexington Avenue, New York, New York 10017, Attention: Donald S. Bernstein, Esq. (Facsimile: 212-450-3800), Counsel for JP Morgan Chase Bank, as Agent; (5) Shearman Sterling, 599 Lexington Avenue, New York, New York 10022, Attention: Fredric Sosnick, Esq. (Facsimile: 212-848-7179), Counsel for Citicorp, as Agent; (6) Kronish Lieb Weiner Hellman LLP, 1114 Avenue of the Americas, New York, New York 10036-7798, Attention: James A. Beldner, Esq., (Facsimile: 212-479-6275), Counsel for the Employment-Related Issues Committee; (7) Goldin Associates, LLC, 400 Madison Avenue, 10th Floor, New York, New York 10017, Attention: Harrison Goldin (Facsimile: 212-888-2841), Examiner for Enron North America; (8) counsel to any other statutory committee appointed in the Debtors' chapter 11 cases; and (9) any person, or counsel if retained, appointed pursuant to 28 U.S.C. § 1104, so as to be received by no later than 5:00 p.m. (New York Time), on May 12, 2003.
EXHIBIT "A" Notice UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK
IN RE:
ENRON CORP., et al., Chapter 11
Debtors. Case No. 01-16034 (AJG)
Jointly Administered
NOTICE OF AUCTION, BIDDING PROCEDURES, ASSUMPTION AND ASSIGNMENT OF A CASH FLOW INTEREST AGREEMENT AND A GAS SALES AGREEMENT, PROPOSED CURE AMOUNTS, CURE AMOUNT PROCEDURES AND HEARING FOR AN ORDER AUTHORIZING SALE OF SUCH CONTRACTS AND RELATED ASSETS BY ENRON NORTH AMERICA CORP. FREE AND CLEAR OF LIENS, CLAIMS, INTERESTS, ENCUMBRANCES, RIGHTS OF SETOFF, RECOUPMENT, NETTING, AND DEDUCTION1. On March 14, 2003, Enron North America Corp. ("ENA" or "Seller"), as a debtor and debtor in possession, filed a motion (the "Motion") with the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"), pursuant to sections 105, 363(b), (f), (m) and (n), and 365 of title 11 of the United States Code (the "Bankruptcy Code") and Rules 2002, 6004, 6006, and 9013 of the Federal Rules of Bankruptcy Procedures (the "Bankruptcy Rules"), for the entry of the following two orders: (A) an order (the "Procedures Order") (I) scheduling May 5, 2003, at 10:00 a.m. as the date and time to hold an auction (the "Auction") at which ENA will solicit higher or better bids for the sale of the Cash Flow Interest Agreement, dated as of July 1, 1998 (the "CFIA"), between ENA and Onondaga Cogeneration Limited Partnership ("OCLP"), the Amended and Restated Gas Sales Agreement, effective as of July 1, 1998, between ENA and OCLP (the "Gas Sales Agreement" and, together with the CFIA, the "Contracts") and certain related assets (together with the Contracts, the "Assets"), in connection with that certain Purchase and Sale Agreement between ENA and Arctas-Paragon Investments LLC ("Buyer") dated as of March 14, 2003 (the "Purchase Agreement"), free and clear of all liens, claims, interests, encumbrances, rights of setoff, recoupment, netting, and deduction; (II) approving the procedures to be used in connection with the Auction (the "Bidding Procedures"); (III) approving procedures to determine the amounts (the "Cure Amounts"), if any, to cure any defaults under the Contracts (the "Cure Amount Procedures"), if any, prior to any such Contracts being assumed by Seller and assigned to Buyer, (IV) approving the payment of a termination fee (the "Termination Fee") to Buyer; (V) scheduling a hearing on the sale of the Assets free and clear of liens, claims, interests, encumbrances, rights of setoff, recoupment, and deduction (the "Sale Hearing"); and (VI) approving the form and manner of notice for the Motion and the relief requested therein, including notice of the Auction, the Bidding Procedures, the Cure Amount Procedures, the Sale Hearing, and the form of Sale Order (as defined below) (collectively, the "Notice Procedures"); and (B) at the conclusion of the Sale Hearing, the order (the "Sale Order"), a copy of which is attached to the Motion as Exhibit "C," authorizing Seller to sell the Assets to Buyer or to the successful bidder at the Auction (the "Winning Bidder").
2. On April 10, 2003, the Bankruptcy Court entered the Procedures Order, pursuant to which the Bankruptcy Court established that (a) the Sale Hearing shall be held before the Honorable Arthur J. Gonzalez, United States Bankruptcy Judge, in Courtroom 523 of the United States Bankruptcy Court for the Southern District of New York, One Bowling Green, New York, New York 10004-1408, on May 15, 2003, at 10:00 a.m. or as soon thereafter as counsel may be heard, and (b) the Auction will be held on May 5, 2003, for consideration of qualifying offers that may be presented to the Seller.
3. The following Bidding Procedures shall apply with respect to the proposed sale of the Assets:
a. Auction Date and Time. The Auction will be held on May 5, 2003, commencing at 10:00 a.m. (New York Time) at the offices of Weil, Gotshal Manges, 767 Fifth Avenue, New York, New York 10153 for consideration of qualifying offers that may be presented to ENA, or at such time and/or date as ENA may determine, upon prior consultation with the Creditors' Committee. Notice of any changes in the Auction date or time shall be filed with the Court and provided to any party known by ENA to have indicated a desire to participate in the Auction as soon as practicable.
b. Qualification as Bidder. Any entity that wishes to make a bid for the Assets (each bid a "Competing Bid") must provide ENA with sufficient and adequate information to demonstrate, to the satisfaction of ENA, upon consultation with the Creditors' Committee, that such bidder has the financial wherewithal and ability to consummate the sale including evidence of adequate financing, and including a financial guaranty or irrevocable letter of credit, if deemed appropriate, each in a form agreed upon by ENA, in consultation with the Creditors' Committee.
c. Bid Requirements.
• ENA, upon consultation with the Creditors' Committee, shall entertain bids that are on substantially the same terms and conditions as those terms set forth in the Purchase Agreement and the documents set forth as exhibits thereto.
• Bids must be accompanied by a cash deposit at least equal to 10% of the Competing Bid (the "Earnest Money Deposit") (which, if such person or entity is Buyer, shall refer to the Earnest Money Deposit made by the Buyer under the Purchase Agreement).
• Prior to the Bid Deadline, the Earnest Money Deposit is to be:
wired transferred to:
JP Morgan Chase Bank 500 Stanton Christiana Road Newark, DE 19713 ABA #021000021 For Credit To: Weil, Gotshal Manges LLP Special Account Acct #0158-37-474 Reference: 43889.0003 M. Sosland (Onondaga Deposit)
• Upon the closing of the sale of the Assets, the Earnest Money Deposit is to be applied toward the purchase price, in accordance with the terms of the Purchase Agreement, if ENA, in consultation with the Creditors' Committee, accepts the Competing Bid as the highest or best offer at the conclusion of the Auction and the sale of the Assets to such entity is approved by the Court.
• If one or more bidders, other than Buyer, are not the Winning Bidder, their Earnest Money Deposits will be returned to such bidders as soon as reasonably practicable upon the earlier of (a) the closing of the sale of the Assets the Winning Bidder or (b) at such time as such bids are no longer binding pursuant to the Bidding Procedures as approved by the Court.
• Competing Bids must be (a) in writing, (b) signed by an individual authorized to bind the prospective purchaser, and (c) received no later than 4:00 p.m. (New York Time) on May 2, 2003 (the "Bid Deadline") by (i) Enron, 1400 Smith Street, Houston, Texas 77002, Attention: Maria E. Grannen, maria.e.grannen@enron.com; or Facsimile: 713-646-3253), (ii) Weil, Gotshal Manges LLP, 100 Crescent Court, Dallas, Texas 75201, Attention: Martin A. Sosland, Esq. (martin.sosland@weil.com; and Facsimile: 214-746-7777), Attorneys for the Debtor; and (iii) Squire, Sanders Dempsey L.L.P., 312 Walnut Street, Suite 3500, Cincinnati, Ohio 45202, Attention: Stephen D. Lerner, Esq., (slerner@ssd.com; and Facsimile: 513-361-1201), Attorneys for the Creditors' Committee.
• Any Competing Bid must be presented under a contract substantially similar to the Purchase Agreement, attached to the Motion as Exhibit "A", marked to show any modifications made to the Purchase Agreement, including the amount of consideration, name of purchaser, and other conforming changes that must be made to reflect the purchaser and its bid, and such bid must not be subject to due diligence review, board approval obtaining financing, or the receipt of any non-governmental consents.
• Initial Overbids. The initial overbid (the "Initial Overbid") must be in an amount that is at least U.S. $228,000 greater than the U.S. $4,050,000 Purchase Price in the Purchase Agreement.
• Parties not submitting competing Bids by the Bid Deadline may not be permitted to participate at the Auction.
• All bids for the purchase of the Assets shall be subject to approval of the Bankruptcy Court.
d. Due Diligence and Questions Prior to Submitting Bids.
• In order to conduct due diligence regarding the Assets, documents relating to the Assets will be available for viewing at 1400 Smith Street, Houston, Texas and/or via electronic format. Contact Maria E. Grannen at 713-345-4395 to schedule a time to review the contents of the due diligence room or to receive a copy of relevant documents via electronic format. The due diligence room will be available from April 11, 2003 to May 2, 2003. In order to access such documents, if not previously executed, parties must sign the Confidentiality Agreements with ENA in substantially the form attached to the Procedure Order as Exhibit "B."
e. Auction.
• Evaluation of Highest or Best Offer. ENA shall, after the Bid Deadline and prior to the Auction, upon consultation with the Creditors' Committee: (i) evaluate all Competing bids received, (ii) invite certain parties to participate in the Auction, and (iii) determine, which Competing Bid reflects the highest or best offer for the Assets (the "Initial Bid"). ENA shall inform each bidder of such determination during the Auction.
• ENA, in consultation with the Creditors' Committee may reject any Competing Bid not in conformity with the requirements of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules of the Court, this Procedures Order or that is contrary to the best interests of ENA, its estate or creditors.
• Adjournment of Auction. The Auction may be adjourned as ENA, upon consultation with the Creditors' Committee, deems appropriate. Reasonable notice of such adjournment and the time and place for the resumption of the Auction shall be given to Buyer, all entities submitting Competing Bids, and the Creditors' Committee.
• Subsequent Bids. Subsequent bids (i.e., the Bid Increment) at the Auction must be in an amount that is at least U.S. $40,000 more than the Initial Overbid and each subsequent bid.
• Other Terms. All Competing Bids are subject to such other terms and conditions as are announced by ENA, in consultation with the Creditors' Committee. The Bidding Procedures set forth herein may be modified by ENA, in consultation with the Creditors' Committee, as maybe determined to be in the best interests of its estate or creditors.
f. Failure to Close. In the event a qualified bidder (other than Buyer) is the Winning Bidder (as determined by ENA, upon consultation with the Creditors' Committee, and approved by the Court), and such Winning Bidder fails to consummate the proposed transaction by the Closing Date for any reason, ENA shall (i) retain such bidder's Deposit (but not as liquidated damages), and ENA reserves the right to pursue all available remedies, whether legal or equitable, available to it, and (ii) upon consultation with the Creditors' Committee, shall be free to consummate the proposed transaction with the next highest bidder at the highest price bid by such bidder at the Auction (or, if that bidder is unable to consummate the transaction at that price, ENA, upon consultation with the Creditors' Committee, may consummate the transaction with the next higher bidder, and so forth) without the need for an additional hearing or order of the Court.
g. Non-Conforming Bids. Notwithstanding anything to the contrary herein, ENA, in consultation with the Creditors' Committee, shall have the right to entertain non-conforming bids for the Assets.
h. Modifications. In its business judgment and sole and absolute discretion, upon consultation with the Creditors' Committee, ENA may reject any bid at any time before entry of an order by the Bankruptcy Court approving such bid, including, but not limited to those that are (i) not in conformity with the requirements of the Bankruptcy Code, the Bankruptcy Rules or the Local Bankruptcy Rules of the Court, (ii) contrary to the best interests of ENA, its estate and creditors, and parties in interest, or (iii) otherwise inadequate or insufficient. Subject to paragraph 6(g) above, no bids shall be considered by ENA unless a party submitted an offer in accordance with these Bidding Procedures and participated in the Auction.
i. Bids are Irrevocable. All bids are irrevocable until the earlier to occur of (i) the closing of the sale of the Assets, or (ii) thirty (30) days following the last date of the Auction (as may be adjourned).
j. Non-Solicitation of Third Parties. Buyer, any bidder, or any of its respective directors, officers, employees, accountants or other agents or representatives shall not directly, or indirectly, solicit a bid from a third party to purchase the Assets or engage in or continue any discussion or negotiations with any party that has made or who may bid for the Assets.
k. Expenses. Any bidders presenting bids shall bear their own expenses in connection with the sale of the Assets, whether or not such sale is ultimately approved.
l. Notice of Winning Bidder. Within one (1) business day following the conclusion of the Auction, ENA shall provide notice of the Winning Bidder to OCLP and a summary of the facts supporting the Winning Bidder's ability to perform under the Contracts.
4. Copies of the Motion and the exhibits thereto, as the same may have been revised, may be (a) reviewed electronically during regular Court hours at the United States Bankruptcy Court, Records Department, Room 511, Alexander Hamilton Custom House, One Bowling Green, New York, New York 10004; (b) on www.nysb.uscourts.gov, the official website for the Bankruptcy Court; or (c) procured upon written request to Weil, Gotshal Manges LLP, Attorneys for ENA, 100 Crescent Court, Suite 1300, Dallas, Texas 75201, Attention: Lyle Bartram, Legal Assistant.
5. In connection with the proposed sale transaction, ENA intends to transfer one or more of the Contracts to the Buyer or the Winning Bidder. On the Closing Date, or as soon thereafter as practicable, ENA or the Buyer or the Winning Bidder, as agreed among them, will pay to OCLP all amounts due and owing under the Contracts for prepetition and postpetition arrearages (the "Cure Amounts"). ENA's records indicate that it owes U.S. $0 for Cure Amounts and there are no defaults by ENA under the Contracts.
6. Objections, if any, to the proposed Cure Amounts must be made in writing with supporting documentation and must conform to the Federal Rules of Bankruptcy Procedure and the Local Rules of the Bankruptcy Court, and be filed with the Bankruptcy Court electronically in accordance with General Order M-242 (General Order M-242 and the User's Manual for the Electronic Case Filing System can be found at www.nysb.uscourts.gov, the official website for the Bankruptcy Court), by registered users of the Bankruptcy Court's case filing system and, by all other parties in interest, on a 3.5 inch disk, preferably in Portable Document Format (PDF), Wordperfect or any other Windows-based word processing format (with a hard copy delivered directly to chambers) and shall be served upon (i) Enron North America Corp., 1400 Smith Street, Houston, Texas, 77002, Attention: Maria E. Grannen (Facsimile: 713-646-3253), (ii) Weil, Gotshal Manges LLP, 700 Louisiana, Suite 1600, Houston, Texas 77002, Attention: Martin Sosland, Esq. (Facsimile: 214-746-7777), Attorneys for ENA, and (iii) Squire, Sanders Dempsey L.L.P., 312 Walnut Street, Suite 3500, Cincinnati, Ohio, 45202, Attention: Stephen D. Lerner, Esq. (Facsimile: 513-361-1201), Attorneys for the Creditors' Committee so that it is actually received by such persons no later than May 2, 2003, at 5:00 p.m. (New York Time).
7. FAILURE TO FILE AN OBJECTION TO THE CURE AMOUNTS SHALL CONSTITUTE ACCEPTANCE OF AND CONSENT TO THE CURE AMOUNTS AND ANY OTHER CLAIM FOR CURE OR OTHER COMPENSATION PURSUANT TO SECTIONS 365(B)(1) OR 365(F)(2) OF THE BANKRUPTCY CODE, OTHER THAN THE PROPOSED CURE AMOUNTS, SHALL BE FOREVER WAIVED.
8. If an objection to the Cure Amounts is timely filed, and the Cure Amounts cannot be resolved consensually and Seller proceeds with the assignment of the relevant Contract to Buyer or the Winning Bidder, the disputed portion of the Cure Amounts will be escrowed pending a determination by the Court of such amount upon notice of a hearing in accordance with the Case Management Order.
9. Any other responses or objections, if any, to the relief requested in the Motion with regard to the request for the sale of the Assets and the assumption and assignment of the Contracts, must be in writing, conform to the Federal Rules of Bankruptcy Procedure and the Local Rules, and be filed with the Bankruptcy Court electronically in accordance with General order M-242 (General Order M-242 and the User's Manual for the Electronic Case Filing System can be found at www.nysb.uscourts.gov, the official website for the Bankruptcy Court), by registered users of the Bankruptcy Court's case filing system and, by all other parties in interest, on a 3.5 inch disk, preferably in Portable Document Format (PDF), Wordperfect or any other Windows-based word processing format (with a hard copy delivered directly to Chambers) and shall be served in accordance with General Order M-242 and the Case Management Order, and upon: (1) Weil, Gotshal Manges LLP, 767 Fifth Avenue, New York, New York 10153, Attention: Martin J. Bienenstock, Esq. and Brian S. Rosen, Esq. (Facsimile: 212-310-8007), Counsel for the Debtors; (2) Squire, Sanders Dempsey L.L.P., 312 Walnut Street, Suite 3500, Cincinnati, Ohio 45202, Attention: Stephen D. Lerner, Esq. (Facsimile: 513-361-1201), Attorneys for the Creditors' Committee, Counsel for the Creditors' Committee; (3) the Office of the United States Trustee, 33 Whitehall Street, 21st Floor, New York, New York 10004, Attention: Mary Elizabeth Tom, Esq.; (4) Davis, Polk Wardwell, 450 Lexington Avenue, New York, New York 10017, Attention: Donald S. Bernstein, Esq. (Facsimile: 212-450-3800), Counsel for JP Morgan Chase Bank, as Agent; (5) Shearman Sterling, 599 Lexington Avenue, New York, New York 10022, Attention: Fredric Sosnick, Esq. (Facsimile: 212-848-7179), Counsel for Citicorp, as Agent; (6) Kronish Lieb Weiner Hellman LLP, 1114 Avenue of the Americas, New York, New York 10036-7798, Attention: James A. Beldner, Esq., (Facsimile: 212-479-6275), Counsel for the Employment-Related Issues Committee; (7) Goldin Associates, LLC, 400 Madison Avenue, 10th Floor, New York, New York 10017, Attention: Harrison Goldin (Facsimile: 212-888-2841), Examiner for Enron North America; (8) counsel to any other statutory committee appointed in the Debtors' chapter 11 cases; and (9) any person, or counsel if retained, appointed pursuant to 28 U.S.C. § 1104, so as to be received by no later than 5:00 p.m. (New York Time), on May 12, 2003.
EXHIBIT "B" Confidentiality Agreements [DATE]
[Address]
Attn:
Re: Confidentiality Agreement
Dear:
In connection with discussions regarding a potential transaction involving the cash flow interests of Enron North America Corp. ("ENA") under that certain Cash Flow Interest Agreement (the "CFIA") dated as of July 1, 1998 and entered into between Onondaga Cogeneration Limited Partnership ("OCLP") and ENA, formerly known as Enron Capital Trade Resources, (the "Proposed Transaction"), ENA and * ("Buyer") are prepared to furnish one another with information (whether written, oral or electronically-generated) which is confidential, proprietary or generally not available to the public ("Confidential Information"). ENA and Buyer are sometimes referred to individually as a "Party" and collectively as the "Parties." All information furnished by one Party to the other Party pursuant to this agreement shall, unless otherwise advised in writing by the furnishing Party, be considered Confidential Information. As a condition to furnishing Confidential Information, the Parties hereto each agree to the following:
1. A Party shall not disclose the other Party's Confidential Information without the other Party's prior written consent; provided, however, a Party may disclose: (a) the other Party's Confidential Information to the Party's directors, employees, advisors, lenders, representatives or affiliates (save as set forth herein), and their respective directors, employees, advisors, lenders, investors, potential purchasers, representatives or affiliates (save as set forth herein) (collectively, "Representatives"), who agree to maintain the confidentiality of such Confidential Information in accordance with the terms hereof; and (b) any of the other Party's Confidential Information that: (i) becomes generally available to the public; (ii) is already known to the Party at the time of disclosure by the other Party; (iii) is acquired from a third party not known to the receiving Party to be prohibited from making disclosure; or (iv) is required to be disclosed to comply with any applicable law, order, regulation or ruling.
2. A Party shall not use the other Party's Confidential Information other than for the purpose of evaluating, negotiating and consummating the Proposed Transaction. Upon a Party's request, the other Party shall return all written Confidential Information of the requesting Party, except for that portion of such Confidential Information that may be found in analyses, compilations, studies or other documents prepared by, or for, the returning Party, and the returning Party and its Representatives shall not retain any copies of such written Confidential Information. The portion of written Confidential Information that may be found in analyses, compilations, studies or other documents prepared by, or for, the returning Party, as well as any Confidential Information furnished by the requesting Party not so requested or returned, will be held by the returning Party and kept subject to the terms of this agreement, or destroyed.
3. Notwithstanding anything contained in this agreement, Confidential Information may be disclosed to any governmental, judicial or regulatory authority requiring such Confidential Information, provided that: (a) each Party shall promptly inform the other Party of the substance of any inquiries received by such Party from any governmental, judicial or regulatory authority in connection with attempts to gain access to Confidential Information concerning the Proposed Transaction; (b) prior to such disclosure, the Party who originally supplied the Confidential Information is given the earliest practicable notice of any disclosure requirement so that it may take whatever action it deems appropriate, at its sole expense, including intervention in any proceeding and the seeking of an injunction to prohibit such disclosure; (c) such Confidential Information is submitted under applicable provisions in the jurisdiction in which disclosure is sought for confidential treatment by such governmental, judicial or regulatory authority; and (d) the Party subject to the governmental, judicial or regulatory authority endeavors to protect the confidentiality of any Confidential Information to the extent reasonable under the circumstances and to use its good faith efforts to prevent the further disclosure of any Confidential Information provided to any governmental, judicial or regulatory authority. If any court or other tribunal having jurisdiction orders that a Party is obligated to disclose any documents containing Confidential Information, then the Party shall first obtain from the other Party a "Public Disclosure Copy" in which the Confidential Information has been redacted at the other Party's discretion to the extent that such redaction is permitted by the applicable court or tribunal requiring disclosure, as the case may be.
4. Although a Party furnishing information, including Confidential Information, has endeavored to include materials which the furnishing Party believes to be reliable and relevant for the receiving Party's evaluation, the furnishing Party makes no representation or warranty as to the accuracy or completeness of any such provided information. Furthermore, neither the furnishing Party nor its Representatives shall have any liability to either the receiving Party or its Representatives resulting from the use of any such information by the receiving Party or its Representatives.
5. Each Party shall have the right to apply to a court to enjoin any breach of this agreement. Excepting the right of a Party to seek such relief, all claims and matters in question arising out of this agreement or the relationship between the Parties created by this agreement, whether sounding in contract, tort or otherwise, shall be resolved by binding arbitration pursuant to the Federal Arbitration Act. The arbitration shall be administered by the American Arbitration Association ("AAA"). There shall be three arbitrators. Each Party shall designate an arbitrator, who need not be neutral, within 30 days of receiving notification of the filing with the AAA of a demand for arbitration. The two arbitrators so designated shall elect a third arbitrator. If either Party fails to designate an arbitrator within the time specified or the two Parties' arbitrators fail to designate a third arbitrator within 30 days of their appointments, the third arbitrator shall be appointed by the AAA. The location of any arbitration shall be New York City, New York. It is expressly agreed that the arbitrators shall have no authority to award punitive or exemplary damages, the Parties hereby waiving their right, if any, to recover punitive or exemplary damages, either in arbitration or in litigation.
6. A Party shall be liable for any breach of this agreement by such Party or any of its Representatives. Neither failure nor delay by the non-defaulting Party in exercising any of its rights, powers or privileges herein shall operate as a waiver nor shall any single or partial exercise preclude any other or further exercise of any right, power or privilege.
7. Neither this agreement nor any communications of the Parties shall be deemed to create any obligation or liability for either Party to proceed with the Proposed Transaction unless and until the Parties so agree in writing. This agreement neither obligates a Party to deal exclusively with the other Party nor prevents a Party or any of its affiliates from competing with the other Party or any of its affiliates. The Parties agree that no joint venture, partnership, or other fiduciary relationship shall be deemed to exist or arise with respect to the Proposed Transaction. This Agreement is not an offer, an acceptance or a contract to enter into the Proposed Transaction, nor is either party required to proceed with or continue such negotiations.
8. This agreement shall be binding upon and for the benefit of ENA and Buyer and their respective Representatives, successors, and permitted assigns. Neither ENA nor Buyer may assign its rights or obligations hereunder without the prior written consent of the other Party. Notwithstanding the foregoing, ENA and Buyer agree and acknowledge that OCLP shall be a third party beneficiary of the rights of ENA under this agreement.
9. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS RULES OR PRINCIPLES.
10. Each Party to this agreement represents that it is properly authorized to do business and to enter into this agreement.
11. This agreement and the obligations hereunder shall terminate on the date one year from the date of this letter.
IN WITNESS WHEREOF, the Parties hereto have executed this agreement in duplicate originals to be effective as of the day and year first written above.
Very truly yours,
ENRON NORTH AMERICA CORP.
By: ______________________ Name: Title Agreed and accepted as of the date first written above:
By: ________________________ Name: Title:
[DATE]
[Company] [Address]
ATTN:
Re: Assets — Confidentiality Agreement
Dear:
1. In connection with consideration by ("*") of a possible negotiated transaction (a "Transaction") by * or one or more of its affiliates involving the interests of Enron North America Corp. ("ENA") and/or its affiliates (ENA and its affiliates collectively the "Company") in: certain ENA assets including but not limited to (i) a Cash Flow Interest Agreement dated as of July 1, 1998; and (ii) an Amended and Restated Gas Sales Agreement dated July 1, 1998, as amended from time to time (collectively, the "Assets"), the Company, and its advisors and agents are prepared to make available to * certain information which is non-public, confidential or proprietary in nature ("Confidential Information").
2. By execution of this letter agreement (the "Agreement"), * agrees to treat all Confidential Information confidentially and to observe the terms and conditions set forth herein. For purposes of this Agreement, Confidential Information shall include all written information provided by the Company (whether prepared by the Company or otherwise) that contains or otherwise reflects information concerning the Company and its subsidiaries, or the Assets (including, without limitation, any contracts, agreements and other non-public or confidential information concerning the Assets) that * or *'s Representatives (as defined below) may be provided by or on behalf of the Company in the course of its evaluation of a possible Transaction. The term "Confidential Information" shall also include all reports, analyses, notes or other information that are based on, contain or reflect any Confidential Information ("Notes"). * shall not be required to maintain the confidentiality of those portions of the Confidential Information that (i) become generally available to the public other than as a result of a disclosure by * or any of *'s Representatives, (ii) was already known to * on a non-confidential basis prior to the disclosure of such Confidential Information to * pursuant to this Agreement, provided that the source of such information was not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Company or any of its affiliates with respect to such material or (iii) is made available to * on a non-confidential basis from a source other than the Company or its agents, advisors or representatives provided that the source of such information was not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Company or any of its affiliates with respect to such material.
3. * agrees that it will not use the Confidential Information for any purpose other than determining whether it wishes to enter into a Transaction. * agrees not to disclose or allow disclosure to others of any Confidential Information; except that, * may disclose Confidential Information to its directors, officers, employees, partners, affiliates, agents, financing sources, advisors or representatives (hereinafter, "Representatives"), to the extent necessary to permit such Representatives to assist * in making the determination referred to in the prior sentence, provided, however, that * shall inform such Representatives of the confidential nature of the Confidential Information and shall be responsible for any breach of this Agreement by any of its Representatives.
4. In addition, * agrees that it will not make any disclosure that it is having or has had discussions concerning a Transaction, that * has received Confidential Information or that it is considering a possible Transaction; provided that * may make such disclosure if such disclosure is required in the Company's Chapter 11 bankruptcy proceedings, or if * has received the written opinion of *'s counsel that such disclosure must be made by * in order that it not commit a violation of law and, prior to such disclosure, * promptly advises and consults with the Company and its legal counsel concerning the information * proposes to disclose.
5. Although the Company has endeavored to include in the Confidential Information information known to it which it believes to be relevant for the purpose of *'s investigation, * understands and agrees that none of the Company, or any of its affiliates, agents, advisors or representatives, (i) has made or make any representation or warranty, expressed or implied, as to the accuracy or completeness of the Confidential Information or (ii) shall have any liability whatsoever to * or its Representatives relating to or resulting from the use of the Confidential Information or any errors therein or omissions therefrom.
6. In the event that * or anyone to whom it transmits any Confidential Information in accordance with this Agreement are requested or required (by deposition, interrogatories, requests for information or documents in legal proceedings, subpoenas, civil investigative demand or similar process), in connection with any proceeding, to disclose any Confidential Information, * will (i) take all reasonable steps to preserve the privileged nature and confidentiality of the Confidential Information, including requesting that the Confidential Information not be disclosed to non-parties or the public, (ii) give the Company prompt written notice of such request or requirement so that the Company may seek an appropriate protective order or other remedy and/or waive compliance with the provisions of this Agreement, and (iii) cooperate with the Company to obtain such protective order. In the event that such protective order or other remedy is not obtained or the Company waives compliance with the relevant provisions of this Agreement, * (or such other persons to whom such request is directed) will furnish only that portion of the Confidential Information which, in the written opinion of *'s counsel, is legally required to be disclosed and, upon the Company's request, will use *'s best efforts to obtain assurances that confidential treatment will be accorded to such information. Company will pay any external costs incurred by *, including without limitation its reasonable legal fees, with respect to *'s compliance with this Section 5.
7. If * decides that it does not wish to proceed with a Transaction, it will notify the Company of that decision. In that case, or if the Company shall elect at any time to terminate further access by * to the Confidential Information for any reason, * will promptly redeliver to the Company all copies of the Confidential Information except for that portion which consists of analyses, compilations, studies or other documents prepared by *. That portion which consists of analyses, compilations, studies or other documents prepared by * will be destroyed by * immediately upon the Company's request. Notwithstanding the return of Confidential Information * and its Representatives will continue to be bound by *'s obligations of confidentiality and other obligations hereunder.
8. * understands that (i) the Company will conduct the process for a possible Transaction as the Company in its sole discretion may determine (including, without limitation, negotiating with any prospective buyer and entering into definitive agreements without prior notice to * or any other person), (ii) any procedures relating to such a Transaction may be changed at any time without notice to * or any other person, (iii) the Company has and will continue to have the right to reject or accept any potential buyer, proposal or offer, for any reason whatsoever, in its sole discretion, and (iv) neither * nor any of its Representatives will have any claims whatsoever against the Company or any of its directors, officers, stockholders, owners, affiliates or agents arising out of or relating to the Transaction (other than those against the parties to a definitive agreement with * in accordance with the terms thereof). * agrees that unless and until a definitive agreement between the Company and * with respect to any Transaction has been executed and delivered, neither the Company nor * will be under any legal obligation of any kind whatsoever with respect to such Transaction except for the provisions of this Agreement.
9. * agrees that money damages would not be a sufficient remedy for any breach of this Agreement by * or its Representatives, that in addition to all other remedies the Company shall be entitled to specific performance and injunctive relief as a remedy for any such breach. In the event of litigation relating to this Agreement, if a court of competent jurisdiction determines that either party has breached this Agreement, the non-prevailing party shall be liable and pay to the prevailing party the reasonable legal fees incurred by the prevailing party in connection with such litigation, including any appeal therefrom.
10. The Company reserves the right to assign its rights, powers and privileges under this Agreement (including, without limitation, the right to enforce the terms of this Agreement) to any person who enters into a Transaction.
11. All modifications of, waivers of and amendments to this Agreement or any part hereof must be in writing signed on behalf of * and the Company.
12. It is further understood and agreed that no failure or delay by the Company in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any right, power or privilege hereunder.
13. In the event that any provision or portion of this Agreement is determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this letter shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by applicable law.
14. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, United States of America, without regard to conflicts of law principles. The parties acknowledge and agree that the Bankruptcy Court for the Southern District of New York shall have the exclusive jurisdiction over this Agreement and that any claims arising out of or related in any manner to this Agreement shall be properly brought only before the Bankruptcy Court for the Southern District of New York. The parties further agree that all communications (whether oral or in writing) between and/or among themselves, their counsel and/or their respective representatives relating to or concerning settlement of their disputes or the negotiation of settlement of their disputes related to the Transaction shall also be governed and protected by Federal Rule of Evidence 408 and New York Civil Practice Law and Rule 4547 to the fullest extent permitted by such rules. If the New York legislature enacts legislation contrary to any portion of this Agreement (whether such is currently pending or proposed in the future) or in the event that a Federal or state court or administrative agency enters a decision voiding any portion of this Agreement (whether such decision currently exists or not), the parties agree not to treat their non-disclosure obligations under this Agreement as null and void. If any party breaches this Agreement, the other party may seek an order compelling compliance and/or a contempt order without notice to the breaching party and without regard to the confidentiality and non-disclosure obligations of this Agreement.
15. If * is in agreement with the foregoing, please so indicate by signing, dating and returning one copy of this Agreement, which will constitute our agreement with respect to the matters set forth herein.
16. The term of this Agreement is two years, and all rights and obligations will terminate after that period.
Very truly yours,
ENRON NORTH AMERICA CORP.
By: __________________________ Name: ________________________ Title: _______________________ Date: ________________________
Agreed and Accepted:
By: __________________________ Name: ________________________ Title: _______________________ Date: ________________________