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					                                                                 CONFIDENTIAL
                                                              CWT DRAFT 12/5/02
                                                        BNP PARIBAS COMMENTS
                                                                      24 JAN 03




                       PURCHASE AND SALE AGREEMENT


                                   by and between


                         ENRON NORTH AMERICA CORP.


                                        and


                       [___________________________________]


                                   BNP PARIBAS


                       Dated as of _________________, 20022003




CWT\NYLIB5\682643.10
                                          TABLE OF CONTENTS

                                                                                                                                Page

                                                     ARTICLE I

                                                  DEFINITIONS

Section 1.1   Definitions.............................................................................................................1

                                                    ARTICLE II

                             PURCHASE AND SALE OF CONTRACT

Section 2.1   Agreement to Purchase and Sell. ........................................................................34
Section 2.2   Purchase Price .......................................................................................................5
Section 2.3   Non-Recourse Sale; Disclaimer of Warranties .....................................................5

                                                   ARTICLE III

                REPRESENTATIONS AND WARRANTIES OF SELLER

Section 3.1   Corporate Existence; Compliance with Applicable Law ....................................56
Section 3.2   Corporate Power; Authorization ...........................................................................6
Section 3.3   Enforceability......................................................................................................56
Section 3.4   Brokerage Arrangements ......................................................................................6

                                                   ARTICLE IV

                 REPRESENTATIONS AND WARRANTIES OF BUYER

Section 4.1   Corporate Existence; Compliance with Applicable Law ....................................67
Section 4.2   Corporate Power; Authorization .........................................................................67
Section 4.3   Enforceability........................................................................................................7
Section 4.4   Availability of Financing ......................................................................................7
Section 4.5   Acknowledgement of Buyer ...............................................................................78
Section 4.6   Eligible Contract Participant ...............................................................................78
Section 4.7   Brokerage Arrangements ....................................................................................78

                                                    ARTICLE V

                                                      CLOSING

Section 5.1   Closing ................................................................................................................78
Section 5.2   Deliveries by Seller at Closing .............................................................................8


                                                            -i-
Section 5.3   Deliveries by Buyer at Closing ...........................................................................89

                                                   ARTICLE VI

                                   COVENANTS OF THE PARTIES

Section 6.1   Bankruptcy Court Approval ................................................................................89
Section 6.2   Cooperation ...........................................................................................................9
Section 6.3   Fees and Expenses ............................................................................................910
Section 6.4   Transfer Taxes ..................................................................................................910
Section 6.5   Reasonable Efforts ............................................................................................910
Section 6.6   Indemnification .................................................................................................910

                                                  ARTICLE VII

              CONDITIONS TO THE PARTIES’ OBLIGATIONS TO CLOSE

Section 7.1   Seller’s Closing Conditions ............................................................................1011
Section 7.2   Buyer’s Closing Conditions ............................................................................1011

                                                  ARTICLE VIII

                                     RESOLUTION OF DISPUTES

Section 8.1   Consent to Jurisdiction of Bankruptcy Court..................................................1113
Section 8.2   Waiver of Jury Trial ........................................................................................1213

                                                   ARTICLE IX

                                              MISCELLANEOUS

Section 9.1   No Setoff .........................................................................................................1214
Section 9.2   DAMAGES .....................................................................................................1214
Section 9.3   Notice ..............................................................................................................1215
Section 9.4   No Third Party Beneficiaries ..........................................................................1416
Section 9.5   Governing Law ...............................................................................................1416
Section 9.6   Miscellaneous. ................................................................................................1416
Section 9.7   Assignment and Binding Effect ......................................................................1517




                                                           -ii-
                           PURCHASE AND SALE AGREEMENT

               This PURCHASE AND SALE AGREEMENT (“Agreement”), dated as of
[_______________], 2002,2003, is by and among Enron North America Corp., a Delaware
corporation (“Seller”), and [_______________], a [_______________] corporationBNP Paribas,
a bank organized under the laws of France (“Buyer”) (with Seller and Buyer each being a “Party”
and collectively being the “Parties”). [Note to Bidder: A guaranty of Buyer’s Parent may be
required]

                                           RECITALS:

               A.      Seller is a party to the Contract (as defined below).

               B.      On December 2, 2001 (the “Petition Date”), Seller filed a petition for
bankruptcy protection pursuant to Chapter 11 of the United States Bankruptcy Code, as amended,
in the United States Bankruptcy Court for the Southern District of New York.

                C.     Seller desires to sell and assign the Contract to Buyer, and Buyer desires to
purchase and accept such assignment and assume all of Seller’s rights and obligations arising on
and after the Closing Date under the Contract on the terms and subject to the conditions set forth in
this Agreement.

                NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:

                                           ARTICLE I

                                         DEFINITIONS

               Section 1.1   Definitions. As used in this Agreement, the following terms shall
have the following meanings:

               “ACE” shall mean ACE Capital Re Overseas Ltd. and any successor to the rights
and obligations of ACE under the Contract.

               “ACE Guaranty” shall mean ACE Guaranty Re Inc. and any successor to the rights
and obligations of ACE Guaranty under the Reinsurance Agreement.

               “Affiliate” of a Person shall mean a Person directly or indirectly controlled by,
controlling or under common control with the other Person. For the purposes of this definition,
“control” means, when used with respect to any Person, the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract, or otherwise, and the terms “controlling”
and “controlled” have correlative meanings.
                “Agreement” shall have the meaning set forth in the introductory paragraph hereto
together will all exhibits and schedules hereto.

              “Applicable Law” shall mean any statute, law, rule, or regulation, or any judgment,
order, consent order, stipulated agreement, ordinance, writ, injunction, or decree of, any
Governmental Entity to which a specified Person or property is subject.

               “Assumed Liabilities” shall have the meaning given such term in Section 2.1(d).

               “Bankruptcy Code” shall mean Title 11 of the United States Code, as amended.

               “Bankruptcy Court Order” shall have the meaning given such term in Section 6.1.

                “Bankruptcy Court” shall mean the United States Bankruptcy Court for the
Southern District of New York, in which the Seller filed petitions for bankruptcy protection
pursuant to Chapter 11 of the Bankruptcy Code, as amended, or successor court of competent
jurisdiction to which Seller’s bankruptcy proceeding may be transferred.

               “Business Day” shall mean any calendar day, excluding Saturdays and Sundays
and any other days on which banks in New York are permitted or required to close.

               “Buyer’s Closing Conditions” shall have the meaning given such term in
Section 7.2.

               “Claim” shall have the meaning given such term in Section 6.6.

              “Closing Conditions” shall mean, collectively, the Seller’s Closing Conditions and
Buyer’s Closing Conditions.

               “Closing Date” shall have the meaning given such term in Section 5.1.

               “Closing” shall mean the closing of the transaction contemplated by this
Agreement.

               “Code” shall mean the Internal Revenue Code of 1986, as amended.

             “Confidentiality Agreement” shall mean the letter agreement dated [__],January 13,
2002 between Buyer and Seller regarding confidential information.

               “Contract” shall mean the agreementconfirmation between Seller and Ace Capital
Re Overseas Limited (“ACE”) described inACE dated as of December 22, 2000, a copy of which
is annexed as Exhibit A hereto.

               “Credit Event” shall mean any of the events identified as a Credit Event in Section
3 of the Contract.

               “Determination Period” shall mean, in respect of the Seller’s payment obligations
under the Contract, the quarterly period for which a settlement is required to be made pursuant to



                                               -2-
the terms of the Contract, it being understood that a settlement under the Contract is attributable to
the quarter starting on the date such payment is due.

                 “Encumbrances” shall mean claims, Liabilities, liens, charges, rights of setoff,
recoupment or netting, causes of action, pledges, options, mortgages, deeds of trust, security
interests, restrictions (whether on voting, sale, transfer, disposition, or otherwise), any agreements
or transactions between Seller and the counterparty to the Contract, easements, and other
encumbrances of every type and description, in each case whether matured or unmatured,
liquidated or unliquidated, contingent or fixed and whether imposed by law, equity, agreement,
understanding, or otherwise.

               “Excluded Assets” shall have the meaning given such term in Section 2.1(c).

               “Excluded Liabilities” shall have the meaning given such term in Section 2.1(d).

                “Governmental Entity” shall mean any court or tribunal in any jurisdiction
(domestic or foreign) or any federal, state, municipal or local government or other governmental
body, agency, authority (including any state attorney’s general office or office of consumer
protection), department, commission, board, bureau, instrumentality, arbitrator or arbitral body
(domestic or foreign).

                 “Liabilities” shall mean all indebtedness, payments owing, obligations,
responsibilities, duties and other liabilities of a Person, whether absolute, accrued, contingent,
fixed or otherwise, or whether due or to become due.

                 “Person” shall mean any individual, corporation, partnership, joint venture, trust,
limited liability company, unincorporated organization, Governmental Entity or other entity.

               “Petition Date” shall have the meaning given such term in the Recitals of this
Agreement.

               “Purchase Price” shall have the meaning given such term in Section 2.2.

               “Reference Entity” shall mean each of the entities listed in Schedule A to the
Contract.

               “Reinsurance Agreement” shall mean the Quota Share Reinsurance Agreement,
dated as of July 21, 2000, between ACE and ACE Guaranty.

                “Seller’s Closing Conditions” shall have the meaning given such term in
Section 7.1.

               “Seller’s Indemnified Parties” shall have the meaning given such term in
Section 6.6.

               “Taxes” shall mean all taxes, however denominated, including any interest,
penalties or other additions to tax that may become payable in respect thereof, imposed by any
Governmental Entity, which taxes shall include, without limiting the generality of the foregoing,


                                                 -3-
all income or profits taxes (including, but not limited to, federal income taxes, state income taxes
and any liability for the payment of any combined or consolidated tax, including liability imposed
pursuant to Treasury Regulations Section 1.1502-6), gross receipts taxes, sales taxes, use taxes,
real property gains or transfer taxes, ad valorem taxes, property taxes, value-added taxes, franchise
taxes, production taxes, severance taxes, windfall profit taxes, withholding taxes, payroll taxes,
employment taxes, social security, excise taxes, recording taxes and other obligations of the same
or similar nature to any of the foregoing, whether disputed or not.

                                            ARTICLE II

                           PURCHASE AND SALE OF CONTRACT

               Section 2.1      Agreement to Purchase and Sell.

                 (a) Contract. At the Closing, in accordance with the Bankruptcy Court Order and
on the terms and subject to the conditions set forth in this Agreement, Seller shall sell, assign and
delegate to Buyer, all of Seller’s rights, duties and obligations in, to and under the Contract, arising
on and after the Closing Date, and Buyer shall accept such sale assignment and delegation and
assume such rights, duties and obligations, in accordance with the terms hereof; provided,
however, Seller shall retain the right to any payment under the Contract resulting from the
occurrence of a Credit Event with respect to a Reference Entity which is received before the close
of business on [January 5, 2003]; provided, further, after such date [i.e., January 5, 2003], any and
all rights to receive payments under the Contract resulting from the occurrence of a Credit Event
shall inure to the Buyer; provided, further, Seller shall retain the obligation to make any payment,
attributable to the entire Determination Period in which the Closing Date occurs, notwithstanding
that a portion of such Determination Period may remain after the Closing Date., including but not
limited to those payments due to be made by Seller on or before February 6, 2003.

                (b) Not Subject to Documentation.               TheWithout limiting the Seller's
representations in this Agreement, the Buyer hereby acknowledges that (i) any due diligence, legal
or otherwise, desired to be conducted by the Buyer in respect of any aspect of the Contract,
including but not limited to documentation risk, has been conducted prior to the Buyer’s
submission of a bid on the Contract pursuant to the pre-approved auction process; (ii) its
acceptance of the assignment and delegation and its assumption of the rights, duties and
obligations in, to and under the Contract will not be subject to post-Closing Date documentation of
the assigned transaction by the parties; and (iii) all bids submitted with respect to the Contract were
based on the Contract documentation in its form as of the Closing Date.

                (c) Excluded Assets. Notwithstanding anything herein to the contrary, Buyer shall
have no rights as a result of this Agreement to any assets of Seller or its Affiliates of any kind other
than the Contract and the rights thereunder arising on and after the Closing Date, as limited
pursuant to Section 2.1(a). For the avoidance of doubt, but without limitation of the generality of
the foregoing sentence, Buyer shall not acquire, as a result of this Agreement, any tradenames,
trademarks, service marks or logos owned by Seller or its Affiliates; payments received by Seller
under the Contract on or before [January 5, 2003]; any bonds, credit default swaps, futures
contracts, hedge contracts or similar hedging arrangements whether related to the Contract or not;
and all other assets and properties owned by Seller or its Affiliates. Assets and rights of Seller and


                                                  -4-
its Affiliates that are not to be acquired by Buyer pursuant to this Agreement are referred to herein
as “Excluded Assets”.

                 (d) Assumed Liabilities. At Closing, Buyer shall assume and shall agree to pay,
perform and discharge as and when they become due and payable, or are required to be performed,
all Liabilities of Seller under the Contract arising out of or relating to events on and after the
Closing Date; including, without limitation, any charges, fees, Taxes, assessments, adders or
surcharges imposed or authorized by any Governmental Entity on and after the Closing Date
(collectively, the “Assumed Liabilities”). Seller remains responsible for any charges, fees, Taxes,
assessments, interest penalties, adders or surcharges imposed or authorized retroactively by any
Governmental Entity for periods prior to the Closing Date. Assumed Liabilities shall exclude,
without limitation, all accounts payable or Liabilities on account of payments made by, or payment
obligations incurred by, Seller under the Contract before the Closing Date., including, but not
limited to, payments due to be made by Seller on or before February 6, 2003. Buyer shall not
assume and shall have no liability for any Liabilities of the Seller other than the Assumed
Liabilities (such Liabilities, exclusive of the Assumed Liabilities, being collectively referred to as
the “Excluded Liabilities”).

                (e) Collection of Receivables. After the Closing, Seller shall be entitled to receive
and collect all amounts due and payable under the Contract which are allocable or attributable to
payments made, or payment obligations attributable to, each Determination Period applicable to
the Contract that occurs prior to the Closing Date and in which the Closing Date occurs[January 5,
2003], and Buyer shall be entitled to receive and collect all amounts due and payable under the
Contract for payments made, or payment obligations attributable to, each full Determination
Period that begins after the Closing Date the period after [January 5, 2003]. All amounts on
account of the Contract received by one Party that, pursuant to this Section 2.1(e), were entitled to
be received by the other Party, shall be held in trust by the receiving Party and promptly paid to the
Party entitled to such funds.

              Section 2.2    Purchase Price. The purchase price for the Contract shall be
$[_________] (the “Purchase Price”). The Purchase Price (less the escrow deposit paid by Buyer
and the interest earned thereon) shall be paid to Seller at the Closing by wire transfer of
immediately available United States funds to the account designated by Seller.

                 Section 2.3     Non-Recourse Sale; Disclaimer of Warranties. Buyer hereby
acknowledges and agrees that, other than the representations and warranties contained in this
Agreement, Seller makes no representations or warranties whatsoever, express or implied, with
respect to any matter relating to the Contract or the Assumed Liabilities including, without
limitation, income to be derived or expenses to be incurred in connection with the Contract or the
Assumed Liabilities, or any other matter or thing relating to the Contract or the Assumed
Liabilities or any portion thereof. Buyer further acknowledges that Buyer has conducted or had
the opportunity to conduct an independent inspection and investigation of the Contract and the
Assumed Liabilities and all such other matters relating to or affecting the Contract or Assumed
Liabilities as Buyer deemed necessary or appropriate and that in proceeding with its assumption of
all of Seller’s rights, duties and obligations under the Contract and the Assumed Liabilities, Buyer
is doing so based solely upon this Agreement and such independent inspections and investigations
and acknowledges that, subject to the foregoing, Buyer will be receiving all of Seller’s rights,


                                                 -5-
duties and obligations under the Contract and the Assumed Liabilities “AS IS, WHERE IS” AND
“WITH ALL FAULTS”. Buyer acknowledges that, with respect to the assignment and delegation
of all of Seller’s rights, duties and obligations in, to and under the Contract and the assumption of
the Assumed Liabilities, it shall have no recourse to Seller or any of its Affiliates in connection
with: (i) any Assumed Liabilities; (ii) the Contract or any termination or alleged termination of the
Contract occurring after the Closing Date; (iii) any disputes with respect to Contract
documentation; and (iv) any breaches, defaults, non-performance or claims (as that term is defined
in Section 101(5) of the Bankruptcy Code) under the Contract occurring after the Closing Date.

                                             ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF SELLER

                Seller represents and warrants to Buyer the following as of the date hereof and as of
the Closing:

                 Section 3.1    Corporate Existence; Compliance with Applicable Law. Seller (i) is
a corporation duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; (ii) is duly qualified as a foreign corporation in those jurisdictions
in which it is necessary for the conduct of its business, except for failures which in the aggregate
are not material to the enforceability or value of the Contract, and (iii) has all requisite corporate
power and authority and the legal right to own and operate its properties and to conduct its
business as currently conducted, subject to the entry of the Bankruptcy Court Order.

                 Section 3.2    Corporate Power; Authorization. The execution, delivery and
performance by Seller of this Agreement and the consummation by it of the transaction
contemplated hereby (i) are within Seller’s corporate powers, (ii) have been duly authorized by all
necessary corporate action on the part of Seller, and (iii) do not and will not (A) contravene
Seller’s certificate of incorporation or by-laws, (B) upon entry of the Bankruptcy Court Order by
the Bankruptcy Court and except for violations which in the aggregate are not material to the
enforceability or value of the Contract, violate any Applicable Law, or (C) result in the creation or
imposition of any Encumbrance upon the Contract.

                Section 3.3    Enforceability. This Agreement has been duly executed and
delivered on behalf of Seller. Subject to any required approvals of the Bankruptcy Court, this
Agreement is the legal, valid and binding obligation of Seller, enforceable against it in accordance
with its terms, except that such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors’ rights generally and
(ii) equitable principles which may limit the availability of certain equitable remedies (such as
specific performance) in certain instances.

                Section 3.4  Brokerage Arrangements.       Seller has not entered (directly or
indirectly) into any agreement with any person, firm or corporation that would obligate Buyer to
pay any commission, brokerage or “finder’s fee” in connection with the transactions contemplated
herein.




                                                  -6-
                Section 3.5     The Contract. Seller has delivered to Buyer true, correct and
complete copies of the Contract (together with all agreements or instruments of guarantee, security,
insurance, reinsurance or other credit support therefor), in each case as amended and in effect on
the date hereof. Seller has or, upon entry of the Bankruptcy Court Order, will have good title to the
Contract, and will deliver to Buyer good title to the Contract, free and clear of all Encumbrances
whatsoever. Seller will not at any time after the date hereof dispose of or grant or permit to exist
any Encumbrance on, the Contract in whole or in part or any of its rights therein. Seller will use its
best efforts to prevent termination of the Contract prior to the Closing Date. All representations
and warranties heretofore made by Seller under the Contract were true, correct and complete in all
material respects when made or deemed made. To the best of Seller's knowledge, there has been
no default by ACE under the Contract.

                                          ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF BUYER

                Buyer hereby represents and warrants to Seller as follows as of the date hereof and
as of the Closing:

               Section 4.1     Corporate Existence; Compliance with Applicable Law. Buyer
(i) is a [_______________]banking corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation; (ii) is duly qualified to do business,
except for failures which in the aggregate are not material; (iii) has all requisite power and
authority and the legal right to own and operate its properties and to conduct its business as
currently conducted; (iv) is in compliance with its organic instruments; and (v) is in compliance
with all Applicable Law, except where such non-compliance would not materially adversely affect
Buyer’s ability to perform its obligations hereunder.

                Section 4.2   Corporate Power; Authorization. The execution, delivery and
performance by Buyer of this Agreement and the consummation by Buyer of the transactions
contemplated hereby (i) are within Buyer’s powers, (ii) have been duly authorized by all necessary
action and (iii) do not and will not (A) contravene Buyer’s organic instruments, (B) violate any
Applicable Law, or (C) result in the breach of, or constitute a default under, or result in or permit
the termination or acceleration of, any obligation, agreement, undertaking or similar provision of
any agreement, undertaking, contract, lease, indenture, mortgage, deed of trust or other instrument
to which Buyer is a party or by which Buyer or any of its property is bound or to which any of its
properties is subject.

                Section 4.3    Enforceability. This Agreement has been duly executed and
delivered on behalf of Buyer. This Agreement is the legal, valid and binding obligation of Buyer,
enforceable against it in accordance with its terms, except that such enforceability may be limited
by (i) applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting
creditors’ rights generally and (ii) equitable principles which may limit the availability of certain
equitable remedies (such as specific performance) in certain instances.

              Section 4.4    Availability of Financing.     Buyer (a) has sufficient funds
immediately available to enable Buyer to consummate the transactions contemplated hereby and


                                                 -7-
to permit Buyer to timely perform all of its obligations under this Agreement, including payments
to be made at Closing pursuant to Article II, and (b) shall maintain such immediately available
funds through Closing.

               Section 4.5       Acknowledgement of Buyer. Buyer acknowledges that: (i) it has
knowledge and experience in transactions of this type and in the business of Seller, and is therefore
capable of evaluating the risks and merits of purchasing, accepting the assignment of, and
assuming the Assumed Liabilities; (ii) it has relied on its own independent investigation, and,
except for the express representations set forth in Article III has not relied on any information or
representations furnished by Seller or any representative or agent thereof in determining to enter
into this Agreement; (iii) it has conducted its own due diligence, including a review of the Contract
and an analysis of the documentation risk associated therewith and a review of the Applicable Law
in connection therewith to its complete satisfaction, including the opportunity to ask questions, and
has received to its complete satisfaction answers to any such questions, concerning the Contract,
the Excluded Assets, the Assumed Liabilities and the terms and conditions of this Agreement.

                Section 4.6    Eligible Contract Participant.        Buyer acknowledges that it
constitutes an “eligible contract participant” as such term is defined in Section 1(a)(12) of the U.S.
Commodity Exchange Act, as amended.

                Section 4.7  Brokerage Arrangements. Buyer has not entered (directly or
indirectly) into any agreement with any person, firm or corporation that would obligate Seller to
pay any commission, brokerage, or “finder’s fee” in connection with the transactions
contemplated herein.

                                           ARTICLE V

                                            CLOSING

              Section 5.1    Closing. The Closing of the transactions contemplated by this
Agreement (the “Closing”) will take place at 9:00 a.m., Central Time, in the offices of Cadwalader,
Wickersham & Taft, or in such other location as the Seller designates, on the first (1st) Business
Day following the entry of the Bankruptcy Court Order, or at such other place and on such other
date as may be agreed by the Parties (the “Closing Date”).

               Section 5.2  Deliveries by Seller at Closing. At the Closing, Seller will deliver
the following documents to Buyer, each in form and substance reasonably satisfactory to Buyer:

                (a) A certificate executed on behalf of Seller by a president, senior vice president,
managing director, or vice president thereof, dated the Closing Date, representing and certifying as
to the matters set forth in Sections 7.2(a) and 7.2(b); and

               (b) A Bill of Sale and Assignment and Assumption Agreement executed by the
Seller and the Buyer, in the form attached hereto as Exhibit B, dated as of the Closing Date;

               (c) Documents evidencing Seller’s notification to ACE of a Credit Event.



                                                 -8-
               Section 5.3     Deliveries by Buyer at Closing. At the Closing, Buyer will deliver
the following to Seller, each in form and substance reasonably satisfactory to Seller:

               (a) The Purchase Price, wired in immediately available funds to such accounts and
in such proportions as designated by Seller; and

                (b) A certificate executed by the president, senior vice president or vice presidentan
authorized officer of Buyer, dated the Closing Date, representing and certifying as to the matters
set forth in Sections 7.1(a) and 7.1(b).

                                           ARTICLE VI

                               COVENANTS OF THE PARTIES

                  Section 6.1    Bankruptcy Court Approval. This Agreement is subject to the
approval of the Bankruptcy Court in accordance with the pre-approved auction procedures. Seller
shall use commercially reasonablebest efforts to obtain entry of an order from the Bankruptcy
Court approving the transaction contemplated herein and authorizing Seller to assume and assign
the Contract (the “Bankruptcy Court Order”) by the Bankruptcy Court. The Bankruptcy Court
Order shall be an order that is not subject to any stay, shall be in form and substance acceptable to
Buyer and shall provide, among other things, that: (i) the sale of the Contract to Buyer shall be free
and clear of all Encumbrances; (ii) the Buyer is acting in good faith and is entitled to the
protections of a buyer under section 363(m) of the Bankruptcy Code; (iii) the sale of the Contract
is free of all federal, state, municipal or other laws imposing a transfer, stamp, excise, recording or
similar tax under section 1146(c) of the Bankruptcy Code; (iv) Seller is authorized and directed to
assume and assign the Contract and to pay any amounts needed to cure any obligations related to
assumption of the Contract at or prior to the Closing Date; (v) all references in the Contract to
Enron shall be deemed modified to reference Buyer's name and the notice provisions and other
applicable provisions of the Contract shall be deemed modified to include information provided by
Buyer; (vi) from and after the Closing Date, ACE shall perform all of its obligations as
Counterparty under the Contract in favor of Buyer, and shall execute on or contemporaneously
with the Closing Date such acknowledgement of assignment of the Contract to Buyer as Buyer
may reasonably request; and (vii) from and after the Closing Date any credit support or other credit
enhancement in existence with respect to the Contract, shall be for the benefit of Buyer. Buyer
shall use commercially reasonable efforts to support Seller’s efforts to obtain entry of the
Bankruptcy Court Order and shall take no actions inconsistent therewith. Buyer shall make
commercially reasonable efforts to provide assurance as required under the Bankruptcy Code of
the future performance of the Contract by Buyer. Buyer shall promptly take all actions reasonably
required by Seller to assist in obtaining entry of the Bankruptcy Court Order, such as furnishing
affidavits, non-confidential financial information or other documents or information for filing with
the Bankruptcy Court and, if reasonably necessary, making Buyer’s employees and
representatives available to testify before the Bankruptcy Court with respect to demonstrating
adequate assurance of future performance by Buyer under the Contract that are to be assumed and
assigned by Seller.

                Section 6.2     Cooperation. Each Party agrees that it will cooperate with and make
available to the other Party during normal business hours, all books and records and information of


                                                 -9-
or relating to the Contract and other matters relevant to this Agreement after the Closing Date
which are necessary or useful in connection with (a) any Tax inquiry, audit, investigation, or
dispute, (b) any proceeding or audit by a Governmental Entity, or (c) any other matter requiring
any such books and records or information for any reasonable business purpose; provided,
however, nothing in this Section 6.2 shall require a Party to take any action or make any
disclosures that would cause the waiver of any attorney-client or similar privilege or breach a
confidentiality agreement with a third party. The Party requesting any such books and records or
information shall bear all of the out-of-pocket costs and expenses reasonably incurred in
connection with providing such books and records, information, or employees, and hold in strict
confidence and shall not disclose to any Person any confidential information except as permitted
by the Confidentiality Agreement between the Parties in effect immediately prior to the execution
of this Agreement.

               Section 6.3    Fees and Expenses. Except as otherwise expressly provided in this
Agreement, all fees and expenses, including fees and expenses of counsel, incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring
such fee or expense.

                Section 6.4    Transfer Taxes. All sales, use, transfer, filing, recordation,
registration and similar Taxes and fees arising from or associated with the transactions
contemplated hereunder shall be borne by Buyer, unless such Taxes are specifically levied under
Applicable Law on Seller (in which case, Buyer shall promptly reimburse Seller upon payment
thereof), and each Party shall file all necessary documentation with respect to, and make all
payments of, such Taxes and fees imposed on it on a timely basis. Notwithstanding the foregoing,
Seller shall use its reasonable efforts to cause the Bankruptcy Court Order to include a provision
exempting the transactions contemplated by this Agreement from all Taxes of the type referenced
in 11 U.S.C. §1146.

                Section 6.5     Reasonable Efforts. Upon the terms and subject to the conditions
herein provided, each of the Parties hereto agrees to use its respective reasonable, good faith
efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties hereto in doing, all things necessary, proper or advisable under
Applicable Law to ensure that the conditions set forth in this Agreement are satisfied and to
consummate and make effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement. Without limiting the generality of the foregoing, Seller shall
provide to Buyer the details of any Credit Protection Seller, as defined in the Contract.

                Section 6.6    Indemnification. From and after the Closing Date, Buyer shall
immediately indemnify and hold Seller, its respective Affiliates, and their respective officers,
directors, shareholders, employees, agents, successors and permitted assigns (“Seller’s
Indemnified Parties”) from and against any and all future claims (as that term is defined in
Section 101(5) of the Bankruptcy Code), liabilities, losses, costs, damages and expenses, including,
without limitation, court costs and reasonable attorneys’ fees and expenses (collectively, “Claims”)
arising after the Closing Date out of or resulting from the Contract, Assumed Liabilities, or any
breach by Buyer of its covenants, representations, warranties, obligations and/or agreements in this
Agreement, subject to Section 10.6(b). From and after the Closing Date, Seller shall indemnify
and hold Buyer, its respective Affiliates, and their respective officers, directors, shareholders,


                                                -10-
employees, agents, successors and permitted assigns (“Buyer’s Indemnified Parties”) from and
against any and all past, present and future claims (as that term is defined in Section 101(5) of the
Bankruptcy Code), liabilities, losses, costs, damages and expenses, including, without limitation,
court costs and reasonable attorneys’ fees and expenses (collectively, “Claims”) arising at any
time on or prior to the Closing Date out of or resulting from the Contract, Assumed Liabilities, or
any breach by BuyerSeller of its covenants, representations, warranties, obligations and/or
agreements in this Agreement, subject to Section 10.6(b). Buyer shall reimburse Seller’s
Indemnified Parties for any legal or other expenses reasonably incurred by Seller’s Indemnified
Parties in connection with investigating or defending any such Claim which is the Claim of a third
party as such expenses are incurred.

                                          ARTICLE VII

              CONDITIONS TO THE PARTIES’ OBLIGATIONS TO CLOSE

               Section 7.1   Seller’s Closing Conditions.      The obligation of Seller to
consummate the transactions contemplated by this Agreement is subject, at the option of Seller, to
the satisfaction or waiver of the following conditions (collectively, the “Seller’s Closing
Conditions”):

               (a) Representations and Warranties True. All the representations and warranties of
Buyer contained in this Agreement taken as a whole shall be true and correct in all material
respects on and as of the Closing Date as if made on and as of such date, except to the extent that
any such representation or warranty is made as of a specified date, in which case such
representation or warranty shall continue to be made as of such specified date;

              (b) Covenants and Agreements Performed. Buyer shall have performed and
complied with in all material respects all covenants and agreements required by this Agreement to
be performed or complied with by it on or prior to the Closing Date, and all deliveries
contemplated by Section 5.3 shall have been made;

                (c) Legal Proceedings. No preliminary or permanent injunction or other order,
decree, or ruling issued by a Governmental Entity, and no statute, rule, regulation, or executive
order promulgated or enacted by a Governmental Entity shall be in effect which restrains, enjoins,
prohibits, or otherwise makes illegal the consummation of the transactions contemplated hereby;
and

             (d) Bankruptcy Court Approval.            The entry by the Bankruptcy Court of the
Bankruptcy Court Order.

               Section 7.2   Buyer’s Closing Conditions.       The obligation of Buyer to
consummate the transactions contemplated by this Agreement is subject, at the option of Buyer, to
the satisfaction or waiver, of the following conditions (collectively, the “Buyer’s Closing
Conditions”):

               (a) Representations and Warranties True. All the representations and warranties of
Seller contained in this Agreement taken as a whole shall be true and correct in all material


                                                -11-
respects on and as of the Closing Date as if made on and as of such date, except to the extent that
any such representation or warranty is made as of a specified date, in which case such
representation or warranty shall continue to be made as of such specified date;

              (b) Covenants and Agreements Performed. Seller shall have performed and
complied with in all material respects all covenants and agreements required by this Agreement to
be performed or complied with by it on or prior to the Closing Date, and all deliveries
contemplated by Section 5.2 shall have been made;

                (c) Legal Proceedings. No preliminary or permanent injunction or other order,
decree or ruling issued by a Governmental Entity, and no statute, rule, regulation or executive
order promulgated or enacted by a Governmental Entity, shall be in effect which restrains, enjoins,
prohibits, or otherwise makes illegal the consummation of the transactions contemplated hereby;
and

             (d) Bankruptcy Court Approval. The entry by the Bankruptcy Court of the
Bankruptcy Court Order. in form and substance satisfactory to Buyer;

               (e) ISDA Master Agreement and Credit Support. (1) The execution and delivery
by Buyer and ACE of an ISDA Master Agreement (including the Schedule thereto), in form and
substance satisfactory to Buyer, relating to the Contract, and the agreement by Buyer and ACE that
the Contract shall be deemed to be a "Transaction" under such ISDA Master Agreement; and (2)
the assignment by ACE to Buyer of all of its rights against ACE Guaranty under the Reinsurance
Agreement or the provision by ACE Guaranty to Buyer of other similar credit support, in either
case in form and substance satisfactory to Buyer; and

                 (f) Amendments to Contract. The Contract shall have been amended, pursuant to a
written agreement between Buyer and ACE in form and substance satisfactory to Buyer, to provide
that (1) all references in the Contract to Enron shall be deemed modified to reference Buyer's name
and the notice provisions and other applicable provisions of the Contract shall be deemed modified
to include information provided by Buyer; (2) in the section of the Contract called "Cash
Settlement Amount," the last sentence shall be amended to make it clear that, if the applicable
Cash Protection Amount is negative, no amount shall be payable by Seller to Buyer or by Buyer to
Seller; (3) in the section of the Contract called "Valuation Date," the paragraph beginning
"Notwithstanding the foregoing" shall be deleted; (4) the section of the Contract called "Credit
Protection Seller" shall be amended to read "Credit Protection Seller means Counterparty"; and (5)
the reference to "48 Hyder Plc" in Schedule A to the Contract shall be amended to read "48 WPD
Holdings UK".

               (g) Closing Date. The Closing Date shall occur no later than February 28, 2003.

                                         ARTICLE VIII

                                        TERMINATION




                                               -12-
               Section 8.1   Termination. This Agreement may be terminated at any time prior
to the Closing Date solely as follows [Note to Bidder: These time periods may need to be
adjusted as the court calendar is set]::

               (a) by Buyer, if the Bankruptcy Court Order has not been entered by Bankruptcy
Court on or before the [ ] day after the execution and delivery of this Agreement by
Seller;February 6, 2003, or if the Closing Date has not occurred by February 28, 2003;

               (b) by mutual written consent of Seller and Buyer;

               (c) by Seller or by Buyer, if a material breach or default shall be made by the other
Party in the observance or in the due and timely performance of any of the covenants or
agreements contained herein, and such default shall not have been cured within five (5) days after
written notice thereof is delivered to the breaching or defaulting Party by the other Party; or,
provided that such cure period shall not extend beyond the Closing Date; or

               (d) by Seller or Buyer, if a Governmental Entity has issued a nonappealable-order,
decree or ruling or taken any other action (which order, decree or ruling the Parties hereto have
used all their commercially reasonable efforts to lift), which permanently restrains, enjoins or
otherwise prohibits the transactions contemplated by this Agreement.

              Section 8.2     Return of Deposit. Upon termination of this Agreement, Seller shall
promptly return to Buyer the escrow deposit and interest thereon referenced in Section 2.2 above.

                                          ARTICLE IX

                                RESOLUTION OF DISPUTES

                 Section 9.1   Consent to Jurisdiction of Bankruptcy Court. The Bankruptcy Court
shall retain exclusive jurisdiction to enforce the terms of this Agreement and each ancillary
document hereto and to decide any claims or disputes (collectively, the "Disputes") which may
arise or result from, or be connected with, this Agreement (or any ancillary document hereto), any
breach or default hereunder or thereunder, or the transactions contemplated hereby, and any and all
Disputes related to the foregoing shall be filed and maintained only in the Bankruptcy Court, and
the parties hereby consent to and submit to the jurisdiction and venue of the Bankruptcy Court;
provided, however, that if the Bankruptcy Cases have closed, the parties agree to unconditionally
and irrevocably submit to the exclusive jurisdiction of the United States District Court for the
Southern District of New York sitting in New York County or the Commercial Division, Civil
Branch of the Supreme Court of the State of New York sitting in New York County and any
appellate court from any thereof, for the resolution of any Dispute.

          Section 9.2 Waiver of Jury Trial. EACH OF THE PARTIES HERETO
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
EXHIBIT HERETO, OR ANY COURSE OF CONDUCT, COURSE OF DEALING OR
STATEMENTS (WHETHER VERBAL OR WRITTEN) RELATING TO THE FOREGOING.


                                               -13-
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES HERETO TO
ENTER INTO THIS AGREEMENT.

                                            ARTICLE X

                                       MISCELLANEOUS

                 Section 10.1 No Setoff. Neither Party shall have the right to setoff, net, off-set, or
otherwise combine accounts or obligations Owed (hereinafter defined) to the other Party or any of
its Affiliates under any other agreement(s), instrument(s) or undertaking(s), against any amounts
Owed by such Party to the other Party or any of its Affiliates under this Agreement. For purposes
of this Section 10.1, “Owed” shall mean any amounts owed or otherwise accrued and payable
(regardless of whether such amounts have been or could be invoiced) as of the applicable date of
determination and regardless of whether arising prior to or after the Petition Date. Each Party
represents and acknowledges that the prohibition set forth in this Section 10.1 is an integral part of
this Agreement and that without such prohibition the Parties would not be willing to enter into this
Agreement. Each party further acknowledges that each is executing this Agreement on behalf of
itself as principal and, with respect to this Section 10.1, as agent on behalf of its Affiliates, which
Affiliates shall be bound by this Section 10.1 as if such Affiliates had directly signed this
Agreement as it relates to this Section.

            Section 10.2 DAMAGES. EACH PARTY’S LIABILITY FOR DAMAGES
HEREUNDER WILL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY AS THE SOLE
AND EXCLUSIVE REMEDY, AND EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
HEREIN, EACH PARTY’S LIABILITY FOR ALL OTHER REMEDIES OR DAMAGES AT
LAW OR IN EQUITY (INCLUDING, WITHOUT LIMITATION, SPECIFIC PERFORMANCE)
IS WAIVED. NEITHER PARTY, WILL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL,
PUNITIVE, SPECIAL, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS, LOSS OF
USE OR REVENUE OR LOSSES OR OTHER BUSINESS INTERRUPTION DAMAGES,
CONNECTED WITH THIS AGREEMENT, REGARDLESS OF WHETHER A CLAIM IS
BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY,
VIOLATION OF ANY APPLICABLE DECEPTIVE TRADE PRACTICES ACT OR SIMILAR
LAW OR ANY OTHER LEGAL OR EQUITABLE PRINCIPLES. IT IS THE INTENT OF THE
PARTIES THAT THE LIMITATIONS IMPOSED ON EACH PARTY’S LIABILITY FOR
REMEDIES BE WITHOUT REGARD TO THE CAUSE THEREOF, INCLUDING THE
NEGLIGENCE OF EITHER PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR
CONCURRENT, OR ACTIVE OR PASSIVE.




                                                 -14-
                Section 10.3 Notice. All notices, requests, statements or payments shall be made
as specified below. All notices are required to be in writing and shall be delivered by letter,
facsimile or other documentary form. Notice by facsimile or hand delivery shall be deemed to
have been received by the close of the Business Day on which it was transmitted or hand delivered
(unless transmitted or hand delivered after close in which case it shall be deemed received at the
close of the next Business Day). Notice by overnight mail or courier shall be deemed to have been
received two (2) Business Days after it was sent. A Party may change its addresses by providing
notice of same in accordance herewith. Notices shall be sent as follows:

               If to Seller, to:

                       Enron North America Corp.
                       1400 Smith Street
                       Houston, TX 77002
                       Attention: Kevin Sweeney
                       Fax: (713) 646-7768

               With a copy to:

                       Enron North America Corp.
                       1400 Smith Street
                       Houston, TX 77002
                       Attn: General Counsel
                       Fax: (713) 646-3491

               with a copy to:

                       Cadwalader, Wickersham & Taft
                       1201 F Street, N.W., Suite 1100
                       Washington, D.C. 20004
                       Attn.: Mark C. Ellenberg
                       Fax: (202) 862-2400

               If to Buyer, addressed to:



                              BNP Paribas
                       10 Harewood Avenue
                       London NW1 6AA
                       United Kingdom
                       Attn: Emmanuel Deboaisne
                       Fax: +33 142 98 4730




                                              -15-
               With a copy to:



                       Lovells
                       Atlantic House
                       Holborn Viaduct
                       London EC1A 2FG
                       Attn: David G.T. Hudd
                       Fax: +44 20 7296 2001

               And with a copy to:

                       Lovells
                       900 Third Avenue
                       New York, NY 10022
                       Attn: Karen Ostad
                       Fax: (212) 909-0666

               Section 10.4 No Third Party Beneficiaries. Except with regard to the Seller’s
Indemnified Parties that are not the Seller and the Buyer's Indemnified Parties that are not the
Buyer, which are third party beneficiaries to Section 6.6, nothing in this Agreement will provide
any benefit to any third party or entitle any third party to any claim, cause of action, remedy or
right of any kind, it being the intent of the Parties that this Agreement will not be construed as a
third-party beneficiary contract.

           Section 10.5 Governing Law. EXCEPT TO THE EXTENT THAT THE
PROVISIONS OF THE BANKRUPTCY CODE ARE APPLICABLE, THIS AGREEMENT
AND THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER WILL BE GOVERNED
BY AND CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE
LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF
ANOTHER JURISDICTION.

               Section 10.6    Miscellaneous.

               (a) Entire Agreement; Confidentiality Agreement. This Agreement and the
Schedules and 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, except for the Confidentiality
Agreement between the Parties in effect immediately prior to the execution of this Agreement,
which continues in full force and effect; provided, however, Seller shall be permitted to (i) disclose
the Confidential Information (as defined in the Confidentiality Agreement) to the committee of its
unsecured creditors and such committee’s counsel and representatives and (ii) file any
Confidential Information with the Bankruptcy Court.




                                                -16-
                (b) Survival. Except for Sections 2.1(e), 6.2, 6.3, 6.4 and 6.6, which shall survive
the Closing, the representations, warranties and covenants contained in this Agreement or in any
document, certificate or instruments delivered pursuant hereto or in connection herewith shall not
survive the Closing, and there shall be no liability in respect thereof, whether such liability has
accrued prior to the Closing Date or after the Closing Date, on the part of either Party or its officers,
directors, employees, agents and Affiliates; provided, however, that Buyer shall be liable for any
losses, claims, damages or liabilities resulting from a willful breach by Buyer of any of its
representations, warranties or covenants under this Agreement.

               (c) Waiver. No waiver by any Party of any default by the other Party in the
performance of any of the provisions of this Agreement will be construed as a waiver of any other
default hereunder whether of a like kind or different nature.

               (d) Amendments and Extensions. No amendment, modification or change to this
Agreement will be enforceable unless reduced to writing and executed by duly authorized
representatives of both Parties.

                (e) Severability. If any provision, or portion of a provision, hereof is declared or
rendered unlawful by any Governmental Entity with jurisdiction over the Parties pursuant to a
final non appealable order, decree or ruling, or deemed unlawful due to a statutory change, the
Parties will negotiate an equitable adjustment to the provisions of this Agreement with a view to
effecting, to the extent possible, the original purpose and intent of this Agreement, and the validity
and enforceability of the remaining provisions, or portions of provisions, of this Agreement shall
not be affected thereby.

               (f) Counterparts. This Agreement may be executed in several counterparts,
including through facsimile signatures, each of which is an original and all of which constitute one
and the same agreement.

                Section 10.7 Assignment and Binding Effect. Neither Party may assign this
Agreement or its rights hereunder without the prior written consent of the other Party; provided,
however, that either Party may, without the consent of the other Party (and without relieving the
transferring Party from any Liability hereunder), (A) transfer, sell, pledge, encumber or assign this
Agreement or the accounts, revenues or proceeds hereof in connection with any financing or other
financial arrangements, or (B) transfer or assign this Agreement to any person or entity succeeding
to all or substantially all of the assets of such Party. Assignments or transfers not in compliance
with this Section 10.7 shall be void ab initio. This Agreement shall inure to the benefit of and be
binding upon the Parties and their respective successors and assigns.


                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




                                                 -17-
               IN WITNESS WHEREOF, the Parties have signed this Agreement in multiple
counterparts, all as of the Agreement Date.


                                          SELLER:


                                          ENRON NORTH AMERICA CORP.



                                          By: ____________________________________
                                              Name:
                                              Title:


                                          BUYER:


                                          [___________________________]


                                          BNP PARIBAS



                                          By: ____________________________________
                                              Name:
                                              Title:
                                                                               EXHIBIT A

Credit Default Swap Confirmation, dated as of December 22, 2000, between Enron North America
                      Corp. and AceACE Capital Re Overseas Limited

                                       [see attached]
                                                               EXHIBIT B

Form of Bill of Sale and Assignment and Assumption Agreement

                       [see attached]




                            A-1
        BILL OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT

                This Bill of Sale and Assignment and Assumption Agreement (this “Agreement”)
is entered into this [___] day of [__________], 20022003 (the “Closing Date”) by and between
Enron North America Corp., a Delaware corporation (“Assignor”), and [____________________],
a [____________________] corporationBNP Paribas, a bank organized under the laws of France
(“Assignee”). Capitalized terms used but not defined herein shall have the meaning given to them
in the PSA (as defined below).

                                             RECITALS

               WHEREAS, Assignor and Assignee have entered into a Purchase and Sale
Agreement dated [______________], 20022003 (the “PSA”), under which Assignor has agreed to
assign and delegate to Assignee all of Assignor’s rights, duties and obligations in, to and under the
Contract, subject to the terms of the PSA.

                WHEREAS, Assignor now desires to assign and delegate to Assignee Assignor’s
rights, duties and obligations in, to and under the Contract as more fully provided and limited in
the PSA; and Assignee desires to accept such assignment and delegation and to assume such rights,
duties and obligations, in accordance with the terms hereof.

               NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows:

                              ASSIGNMENT AND AGREEMENTS:

                 1.       Transfer of Assets. In accordance with the Bankruptcy Court Order,
Assignor hereby assigns and delegates to Assignee, and Assignee hereby accepts such assignment
and delegation of, all of Assignor’s rights, duties and obligations in, to and under the Contract
arising on and after the Closing Date; provided, however, Assignor shall retain the right to any
payment under the Contract resulting from the occurrence of a Credit Event with respect to a
Reference Entity which is received before the close of business on November 6, 2002January 5,
2003; provided, further, after such date, any and all rights to receive payments under the Contract
resulting from the occurrence of a Credit Event shall inure to the Assignee; provided, further,
Assignor shall retain the obligation to make any payment, attributable to the entire Determination
Period in which the Closing Date occurs, notwithstanding that a portion of such Determination
Period may remain after the Closing Date. Notwithstanding the foregoing, Assignee shall have no
rights as a result of this Agreement to any assets of Assignor or its Affiliates of any kind other than
the Contract and the rights thereunder arising on and after the Closing Date, as limited pursuant to
the foregoing sentence. For the avoidance of doubt, but without limitation of the generality of the
foregoing sentence, Assignee shall not acquire, as a result of this Agreement, any rights (including
indemnification) and claims and recoveries of Assignor against third parties arising out of or
relating to events prior to the Closing DateJanuary 5, 2003 with respect to the Contract;
tradenames, trademarks, service marks or logos owned by Assignor or its Affiliates; accounts
receivable or payments received by, or otherwise owing to, Assignor under the Contract before the


                                                 A-2
Closing DateJanuary 5, 2003; and all other assets and properties owned by Assignor or its
Affiliates.

                2.      Assumption. In accordance with the Bankruptcy Court Order, upon
payment by Assignor of the cure amount and occurrence of the Closing Date, Assignee hereby
assumes and agrees to pay, perform and discharge as and when they become due and payable, or
are required to be performed, all Liabilities of Assignor under the Contract arising out of or
relating to events on and after the Closing Date; including, without limitation, any charges, fees,
Taxes, assessments, adders or surcharges imposed or authorized by any Governmental Entity on
and after the Closing Date (collectively, the “Assumed Liabilities”). Assignor remains responsible
for any premiums, charges, fees, Taxes, assessments, interest penalties, adders or surcharges
imposed or authorized retroactively by any Governmental Entity or other person or entity for
periods prior to the Closing Date. Assumed Liabilities exclude, without limitation, all accounts
payable or Liabilities on account of payments made by, or payment obligations incurred by,
Assignor under the Contract before the Closing Date. Assignee does not assume and has no
liability for any Liabilities of the Assignor other than the Assumed Liabilities (such Liabilities,
exclusive of the Assumed Liabilities, being collectively referred to as the “Excluded Liabilities”).

               3.     Further Assurances. Assignor and Assignee hereby covenant and agree to
execute and deliver any and all such other and additional instruments and other documents as shall
be reasonably requested by the other party hereto to further evidence the assignment and
delegation of Assignor’s rights, duties and obligations under the Contract.

               4.      Conflicts with PSA. To the extent there is a conflict between the terms and
provisions of this Agreement and the PSA, the terms and conditions of the PSA will govern.

             5.      Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to conflict of laws
principles.

               6.      Counterparts. This Agreement may be executed in several original
counterparts, each of which shall be deemed an original, but all of which shall constitute one and
the same agreement.


          [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]




                                               A-3
              IN WITNESS WHEREOF, Assignor and Assignee have caused this Agreement to
be duly executed on the Closing Date.


                                          ASSIGNOR:


                                          ENRON NORTH AMERICA CORP.



                                          By: ____________________________________
                                              Name:
                                              Title:


                                          ASSIGNEE:


                                          [_____________________________]


                                          BNP PARIBAS



                                          By: ____________________________________
                                              Name:
                                              Title:




                                        A-4

				
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