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SUBSCRIPTION AGREEMENT
BY AND AMONG
TNPC, INC.
DLJMB FUNDING II, INC.
DLJ MERCHANT BANKING PARTNERS II, L.P.
DLJ MERCHANT BANKING PARTNERS II-A, L.P.
DLJ DIVERSIFIED PARTNERS, L.P.
DLJ DIVERSIFIED PARTNERS-A, L.P.
DLJ MILLENNIUM PARTNERS. L.P.
DLJ MILLENNIUM PARTNERS-A, L.P.
DLJ FIRST ESC L.P.
DLJ OFFSHORE PARTNERS II, C.V.
DLJ EAB PARTNERS, L.P.
DLJ ESC II, L.P.
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
ONTARIO TEACHERS' PENSION PLAN BOARD
AND
LJM2-TNPC, LLC
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS AND GENERAL INTERPRETATION............................ 1
1.1 DEFINITIONS........................................................ 1
1.2 RULES OF CONSTRUCTION.............................................. 3
1.3 HEADINGS........................................................... 3
ARTICLE II SUBSCRIPTION..................................................... 3
2.1 SUBSCRIPTION BY THE INVESTORS...................................... 3
2.2 STOCKHOLDERS AGREEMENT............................................. 4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY................... 4
3.1 ORGANIZATION; GOOD STANDING OF THE COMPANY; CAPITALIZATION......... 4
3.2 AUTHORITY.......................................................... 5
3.3 DUE EXECUTION AND ENFORCEABILITY................................... 5
3.4 NO RESTRICTIONS AGAINST PERFORMANCE................................ 5
3.5 THIRD-PARTY AND GOVERNMENTAL CONSENTS.............................. 5
3.6 LITIGATION......................................................... 6
3.7 NO BROKER'S FEES................................................... 6
3.8 BOOKS AND RECORDS.................................................. 6
3.9 DISCLOSURE......................................................... 6
3.10 COMPLIANCE WITH LAWS............................................... 6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.................. 7
4.1 ORGANIZATION; GOOD STANDING........................................ 7
4.2 AUTHORITY.......................................................... 7
4.3 DUE EXECUTION AND ENFORCEABILITY................................... 7
4.4 NO RESTRICTIONS AGAINST PERFORMANCE................................ 7
4.5 THIRD-PARTY AND GOVERNMENTAL CONSENTS.............................. 8
4.6 ACCREDITED INVESTORS............................................... 8
ARTICLE V ADDITIONAL AGREEMENTS............................................. 9
5.1 CONFIDENTIALITY.................................................... 9
5.2 FURTHER ASSURANCES................................................. 9
5.3 EXPENSES........................................................... 9
ARTICLE VI CLOSING; CONDITIONS TO CLOSING................................... 10
6.1 LOCATION AND TIME OF CLOSING....................................... 10
6.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY........................... 10
6.3 CONDITIONS TO OBLIGATIONS OF THE INVESTORS......................... 10
ARTICLE VII INDEMNIFICATION................................................. 11
7.1 SURVIVAL........................................................... 11
7.2 THE COMPANY'S AGREEMENT TO INDEMNIFY............................... 11
7.3 INVESTORS'AGREEMENT TO INDEMNIFY................................... 11
7.4 MATTERS INVOLVING THIRD PARTIES.................................... 11
7.5 EXCLUSIVE REMEDY; LIMITATION ON DAMAGES............................ 12
7.6 EXPRESS NEGLIGENCE CLAUSE.......................................... 13
ARTICLE VIII GENERAL PROVISIONS............................................. 13
8.1 ENTIRE AGREEMENT; TERMINATION OF PRIOR AGREEMENT................... 13
8.2 WAIVERS AND AMENDMENTS............................................. 13
8.3 NOTICES............................................................ 14
8.4 GOVERNING LAW; VENUE; SUBMISSION TO SERVICE OF PROCESS............. 16
8.5 BINDING EFFECT; ASSIGNMENT......................................... 16
8.6 SEVERABILITY....................................................... 16
8.7 COUNTERPARTS....................................................... 17
8.8 SPECIFIC PERFORMANCE............................................... 17
EXHIBITS:
---------
EXHIBIT 1.1(a) - Form of Special Warrant
EXHIBIT 1.1(b) - Amendment No. 2 to the Stockholders Agreement
EXHIBITS 1.1(c) - Opinion to be delivered on behalf of the Company
SCHEDULES:
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SCHEDULE 3.1 - Agreements to Acquire Securities
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT, dated as of July 10, 2000 (this
"Agreement") is by and among DLJMB Funding II, Inc., DLJ Merchant Banking
Partners II, L.P., DLJ Merchant Banking Partners II-A, L.P., DLJ Diversified
Partners, L.P., DLJ Diversified Partners-A, L.P., DLJ Millennium Partners, L.P.,
DLJ Millennium Partners-A, L.P., DLJ First ESC X.X., XXX Xxxxxxxx Xxxxxxxx XX,
X.X, XXX EAB Partners, L.P., DLJ ESC II, L.P. (together, the "DLJMB Investors"),
the California Public Employees' Retirement System ("CalPERS"), the Ontario
Teachers' Pension Plan Board ("OTP"), LJM2-TNPC, LLC, a Delaware limited
liability company ("LJM2") (together, the "Investors") and TNPC, Inc. (formerly
EMW Energy Services Corp.), a Delaware corporation (the "Company").
WHEREAS, the Investors have agreed to contribute to the Company an
aggregate of $97,500,000 cash in exchange for Special Warrants on the terms set
forth herein;
WHEREAS, the DLJMB Investors intend to purchase the Special Warrants in
satisfaction of their stock purchase rights set forth in Section 2.4 of the
Stockholders Agreement; and
WHEREAS, the purpose of the Company shall be to engage in the retail
marketing and retail sale of natural gas, electricity and other commodities,
products and services to residential and small commercial customers in the
United States;
NOW, THEREFORE, for and in consideration of the foregoing premises,
mutual covenants, rights and obligations set forth herein, the benefits to be
derived therefrom and for other good and valuable consideration, the receipt and
sufficiency of which are hereby expressly acknowledged by the parties hereto,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND GENERAL INTERPRETATION
1.1 DEFINITIONS. The following terms shall be used in this Agreement
with the meanings set forth in this Section 1.1:
"AMENDED CHARTER" means the Amended and Restated Certificate of
Incorporation of the Company, as amended to date.
"AMENDMENT NO. 2 TO THE STOCKHOLDERS AGREEMENT" means Amendment No. 2
to the Stockholders Agreement entered into among the Company, the Investors and
certain other stockholders of the Company in the form attached as EXHIBIT 1.1(b)
hereto.
"BUSINESS" means the business of selling natural gas and electricity to
residential customers.
"CLOSING" has the meaning set forth in Section 6.1.
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"COMMON STOCK" means shares of the Company's voting common stock, par
value $.01 per share, and the Non-Voting Common Stock, having the terms set
forth in the Amended Charter.
"DAMAGES" has the meaning set forth in Section 7.2.
"GOVERNMENTAL AUTHORITY" means any court, judicial or quasi-judicial or
administrative agency or body or commission or other governmental or other
regulatory authority or agency.
"INDEMNIFIED PARTY" has the meaning set forth in Section 7.4.
"INDEMNIFYING PARTY" has the meaning set forth in Section 7.4.
"LAWS" means all (a) federal, state, local or foreign laws, statutes,
ordinances, judgments, decrees, rules and regulations, (b) orders, (c) permits
and (d) agreements with federal, state, local or foreign regulatory authorities
or agencies to which the Company or an Investor, as the case may be, is a party
or by which it is bound.
"LIEN" means, with respect to any asset, any mortgage, lien (including
mechanics, warehousemen, laborers and landlords liens), claim, pledge, charge,
security interest, preemptive right, right of first refusal, option, judgment or
encumbrance of any kind in respect of or affecting such asset.
"MATERIAL ADVERSE EFFECT" means any event, condition, effect or change
(or series of such occurrences, as a whole or individually) that is or would be
materially adverse to the business, results of operations, condition (financial
or otherwise), business, assets, liabilities or prospects of the person or
entity to which reference is made.
"NON-VOTING COMMON STOCK" means the non-voting common stock, par value
$.01 per share, of the Company, having the terms set forth in the Amended
Charter.
"REGISTRATION STATEMENT" means the draft registration statement of
TNPC, Inc. on Form S-1 dated July 7, 2000.
"SECURITIES" has the meaning set forth in Section 4.6(a).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SPECIAL WARRANTS" means the warrants to purchase shares of Non-Voting
Common Stock having the terms set forth in the form of warrant attached as
EXHIBIT 1.1(a) hereto.
"STOCKHOLDERS AGREEMENT" means the Stockholders Agreement entered into
among the Company, the DLJMB Investors, G.E. Capital Equity Investments, Inc.,
CalPERS, OTP, Enron
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Energy Services, LLC and Xxxxxx Energy Services, LLC on January 6, 2000, as
amended by Amendment No. 1 to the Stockholders Agreement dated June 30, 2000,
and Amendment No. 2 to the Stockholders Agreement.
1.2 RULES OF CONSTRUCTION. The definitions in Section 1.1 herein
and elsewhere in this Agreement shall apply equally to both the singular and
plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include," "includes" and "including" shall be deemed to be followed
by the phrase "without limitation." The words "herein," "hereof," "hereto" and
"hereunder" and words of similar import refer to this Agreement in its entirety
and not to any part hereof unless the context shall otherwise require. All
references herein to "Sections" and "Articles" shall be deemed references to
sections and articles of this Agreement unless the context shall otherwise
require. Unless the context shall otherwise require, any references to any
agreement or other instrument or statute or regulation are to it as amended and
supplemented from time to time (and, in the case of a statute or regulation, to
any corresponding provisions of successor statutes or regulations).
1.3 HEADINGS. The Article and Section headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
ARTICLE II
SUBSCRIPTION
2.1 SUBSCRIPTION BY THE INVESTORS.
(a) CASH CONTRIBUTIONS. Subject to the terms and conditions of
this Agreement, at the Closing, the Investors shall contribute as a capital
contribution to the Company, and the Company shall accept from the Investors,
the following cash contributions:
INVESTOR CASH CONTRIBUTION
-------- -----------------
DLJMB Investors $ 7,500,000
CalPERS $25,000,000
OTP $15,000,000
LJM2 $50,000,000
Such contributions shall be made by wire transfer of immediately available funds
to an account or accounts designated by the Company at least two (2) Delaware
business days prior to Closing.
(b) ISSUANCE OF WARRANTS TO THE INVESTORS. In consideration for
the foregoing, at the Closing, subject to the terms and conditions of this
Agreement, the Company will issue to the Investors the number of Special
Warrants set forth below:
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SPECIAL
-------
INVESTOR WARRANTS
-------- --------
DLJMB Investors 3,489
CalPERS 11,629
OTP 6,978
LJM2 23,258
(c) ALLOCATION AMONG DLJMB INVESTORS. The DLJMB Investors jointly
agree that the cash contributions to be made by the DLJMB Investors pursuant to
Section 2.1(a) above and the Securities to be issued to the DLJMB Investors
pursuant to Section 2.1(b) above shall be allocated among the DLJMB Investors
in such manner as the DLJMB Investors shall advise the Company in writing at
least two (2) Delaware business days prior to Closing.
(d) DELIVERY OF OPINION. In connection with the issuance of such
Special Warrants, the Investors shall receive an opinion of Xxxxxx & Xxxxxx
L.L.P. in the form of Exhibit 1.1(c).
2.2 AMENDMENT NO. 2 TO THE STOCKHOLDERS AGREEMENT. At the Closing,
subject to the terms and conditions of this Agreement, the Company, each of the
Investors and certain other stockholders of the Company will execute and
deliver Amendment No. 2 to the Stockholders Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each of the Investors as of the
date hereof that:
3.1 ORGANIZATION; GOOD STANDING OF THE COMPANY; CAPITALIZATION.
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has the
corporate power and authority to own, lease and operate its properties and
assets and to carry on its business as presently conducted. The Company is duly
qualified to do business and is in good standing in each jurisdiction in which
the properties owned or leased by it or the operation of its business makes
such qualification necessary, except where the failure so to qualify and be in
good standing would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(b) The authorized capital stock of the Company consists of
2,000,000 shares of Common Stock of which 1,000,000 shares are designated as
Non-Voting Common Stock, and 50,000 shares of preferred stock, par value $.01
per share. The number of issued and outstanding shares of capital stock of the
Company is as follows: (i) voting Common Stock, 105,502 shares; (ii) Non-Voting
Common Stock, 10,322 shares; and (iii) preferred stock, no shares. There are no
outstanding options, warrants, commitments, agreements or any other rights of
any character entitling any person or entity to acquire shares of capital stock
or securities convertible or
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exchangeable for capital stock in the Company except as set forth on SCHEDULE
3.1 hereto. The Company does not own any equity interest in any other entity
except for its subsidiaries TNPC Holdings, Inc. and The New Power Company.
(c) The Special Warrants when issued will be duly authorized and
validly issued. The Common Stock to be issued upon valid exercise of the
Special Warrants in accordance with their terms, will be duly authorized and
adequately reserved in contemplation of the exercise of the Special Warrants
and, when issued and delivered in accordance with the terms of the Special
Warrants, will be validly issued, fully paid, non-assessable and free and clear
of all Liens (other than those arising under the Stockholders Agreement), and
the issuance thereof will not have been subject to any preemptive rights or
made in violation of any applicable Law.
3.2 AUTHORITY. The Company has the requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and Amendment No. 2 to the Stockholders Agreement and to consummate the
transactions contemplated hereby and thereby. The Company has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement.
3.3 DUE EXECUTION AND ENFORCEABILITY. This Agreement and Amendment
No. 2 to the Stockholders Agreement constitute legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application referring to or affecting enforcement of creditors' rights and
general principles of equity.
3.4 NO RESTRICTIONS AGAINST PERFORMANCE. Neither the execution,
delivery nor performance of this Agreement or Amendment No. 2 to the
Stockholders Agreement by the Company nor the consummation by the Company of
the transactions contemplated by this Agreement or Amendment No. 2 to the
Stockholders Agreement will, with or without the giving of notice or the
passage of time, or both, violate any provisions of, conflict with, result in a
breach of, constitute a default under (or give rise to any right of
termination, cancellation or acceleration), or result in the creation or
imposition of any Lien under: (a) the organizational documents of the Company;
(b) any Law that is applicable to the Company or any of its subsidiaries or any
of their respective properties or assets; (c) any contract, indenture,
instrument, agreement, mortgage, lease, right or other obligation or
restriction to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or any of their respective
properties or assets is or may be bound; or (d) any order, judgment, writ,
injunction, decree, license, franchise, permit or other authorization of any
Governmental Authority by which the Company or any of its subsidiaries or any
of their respective properties or assets are or may be bound, except in the
case of clauses (b) and (c), as would not individually or in the aggregate have
a Material Adverse Effect on the Company and its subsidiaries taken as a whole.
3.5 THIRD-PARTY AND GOVERNMENTAL CONSENTS. Except for the
stockholder consent required as provided in Amendment No. 2 to the Stockholders
Agreement, no approval, consent,
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waiver, order or authorization of, or registration, qualification, declaration,
or filing with, or notice to, any Governmental Authority or other third party
is required to be made or obtained on the part of the Company or its
subsidiaries in connection with the execution and delivery of this Agreement
and Amendment No. 2 to the Stockholders Agreement or the issuance of the
Special Warrants as contemplated hereby.
3.6 LITIGATION. There is no judicial or administrative action,
suit, proceeding (whether adjudicatory, rule-making, licensing or otherwise) or
investigation pending or, to the knowledge of the Company, threatened in law or
equity against the Company or its subsidiaries, relating to the Company or its
subsidiaries or the transactions contemplated by this Agreement before any
Governmental Authority, that would have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole, or on the ability of the Company
to consummate the transactions contemplated hereby or to carry on the Business
as currently contemplated.
3.7 NO BROKER'S FEES. No agent, broker or other person is or may
be entitled to a commission or finder's fee from the Company in connection with
the transactions contemplated by this Agreement.
3.8 BOOKS AND RECORDS. The books of account, minute books, stock
record books and other records of the Company are complete and correct in all
material respects and have been maintained in accordance with sound business
practices, including the maintenance of adequate systems of internal controls.
The minute books of the Company contain accurate and complete records of all
meetings held of, and material corporate action taken by, the stockholders, the
Board of Directors and any committees of the Board of Directors of the Company.
3.9 DISCLOSURE. To the knowledge of the Company, the
representations and warranties made by the Company contained in this Agreement,
together with all written and oral information provided to the Investors in
connection with the transactions contemplated hereby, including, without
limitation, the Registration Statement, do not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
and facts contained herein or therein, in light of the circumstances in which
they were or are made, not false or misleading.
3.10 COMPLIANCE WITH LAWS. The Business is being conducted by the
Company in compliance with all applicable Laws other than such Laws as the
violation of which would not have a Material Adverse Effect on the Company and
its subsidiaries taken as a whole. The Company is currently not conducting the
Business in violation of any applicable Laws the violation of which would have
a Material Adverse Effect on the ability of the Company to conduct the Business
in the future. The Company or one of its subsidiaries holds or has applied for
all permits from all Governmental Authorities and third parties necessary for
the lawful conduct of the Business to the extent conducted by the Company and
its subsidiaries as of the date hereof other than those permits that would not
have a Material Adverse Effect on the Company and its subsidiaries taken as a
whole. The Company is and has been in compliance with, and, to the knowledge of
the Company,
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is not under investigation with respect to or been given notice of any
violation of, any such permit as would have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor severally, and not jointly, represents and warrants to
the Company as of the date hereof that:
4.1 ORGANIZATION; GOOD STANDING. Such Investor is duly organized
or formed (as the case may be), validly existing and, in the case of the
Investors other than CalPERS, in good standing under the laws of the
jurisdiction in which it is organized or formed, with full corporate or similar
power and authority to own, lease and operate its properties and assets and to
carry on its business as presently conducted.
4.2 AUTHORITY. Such Investor has the corporate or similar power
and authority to execute, deliver and perform its obligations under this
Agreement and Amendment No. 2 to the Stockholders Agreement and to consummate
the transactions contemplated hereby and thereby. Such Investor has taken all
necessary corporate or similar action to authorize its execution, delivery and
performance of this Agreement and Amendment No. 2 to the Stockholders Agreement.
4.3 DUE EXECUTION AND ENFORCEABILITY. This Agreement and Amendment
No. 2 to the Stockholders Agreement constitute legal, valid and binding
obligations of such Investor, enforceable against such Investor in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application referring to or affecting enforcement of creditors' rights and
general principles of equity.
4.4 NO RESTRICTIONS AGAINST PERFORMANCE. Neither the execution,
delivery nor performance by such Investor of this Agreement or Amendment No. 2
to the Stockholders Agreement, nor the consummation by such Investor of the
transactions contemplated by this Agreement or Amendment No. 2 to the
Stockholders Agreement will, with or without the giving of notice or the
passage of time, or both, violate any provisions of, conflict with, result in a
breach of, constitute a default under, or result in the creation or imposition
of any Lien under: (a) the organizational or governing documents of such
Investor; (b) any Law that is applicable to such Investor or any of its
properties or assets; (c) any contract, indenture, instrument, agreement,
mortgage, lease, right or other obligation or restriction to which such
Investor is a party or by which it or any of its properties or assets are or
may be bound; or (d) any order, judgment, writ, injunction, decree, license,
franchise, permit or other authorization of any Governmental Authority by which
such Investor or any of its properties or assets are or may be bound, except in
each of the foregoing cases as would not individually or in the aggregate have
a Material Adverse Effect on such Investor or materially impair the ability of
such Investor to consummate the transactions contemplated hereby.
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4.5 THIRD-PARTY AND GOVERNMENTAL CONSENTS. Except as previously
obtained, no approval, consent, waiver, order or authorization of, or
registration, qualification, declaration, or filing with, or notice to, any
Governmental Authority or other third party is required on the part of such
Investor in connection with the execution and delivery of this Agreement by
such Investor or the consummation of the transactions contemplated hereby or
thereby.
4.6 ACCREDITED INVESTORS.
(a) Such Investor is acquiring the Special Warrants to be acquired
by it under this Agreement (including, for purposes of this representation and
warranty, the shares of Common Stock underlying such Special Warrants)
(collectively, the "Securities") for its own account, for investment purposes,
and not with a view to, or for resale in connection with, any public
distribution of the Securities in violation of the federal securities laws.
(b) Such Investor understands that the Securities have not been
registered under the Securities Act or any federal or state law by reason of
specific exemptions under the provisions thereof, the availability of which
depend in part upon the accuracy of its representations made in this Section
4.6.
(c) Such Investor understands that the Company is relying upon the
representations and agreements contained in this Section 4.6 for the purpose of
determining whether this transaction meets the requirements for such exemptions.
(d) Such Investor is an "accredited investor" as defined in Rule
01(a) of Regulation D under the Securities Act.
(e) Such Investor has such knowledge, skill and experience in
business, financial and investment matters that it is capable of evaluating the
merits and risks of an investment in the Securities. The undersigned recognizes
that an investment in the Securities is a speculative investment involving a
high degree of risk.
(f) Such Investor understands that the Securities are "restricted
securities" under applicable federal securities laws and that the Securities
Act and the rules of the Securities and Exchange Commission thereunder provide
in substance that it may dispose of the Securities only pursuant to an
effective registration statement under the Securities Act or an exemption
therefrom, and it understands that, notwithstanding the Registration Statement
provided to such Investor by the Company, the Company has no obligation to
register any of the Securities or securities issuable upon conversion or
exercise thereof, thereunder, except as contemplated by the Stockholders
Agreement and Amendment No. 2 to the Stockholders Agreement.
(g) Such Investor has been furnished by the Company all
information (or provided access to all information) regarding the business and
financial condition of the Company, its expected plans for future business
activities, the attributes of the Securities and the merits and risks of an
8
investment in the Securities that it has requested or otherwise needs to
evaluate the investment in the Securities.
(h) Such Investor is not purchasing the Securities as a result of
any form of general solicitation or general advertising.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 CONFIDENTIALITY. Each party hereto shall hold and shall cause
its employees, auditors, attorneys, financial advisors, bankers and other
consultants to hold in strict confidence, unless compelled to disclose by
judicial or administrative process or by other requirements of Law, all
confidential or proprietary documents and information concerning any other
party furnished to it by such other party or its representatives in connection
with the transactions contemplated by this Agreement (except to the extent that
such information can be shown to have been (a) previously known by the party to
which it was furnished other than as a result of the evaluation or negotiation
of the transactions contemplated by this Agreement, or (b) in the public domain
through no fault of such party), and each party shall treat such information as
the sole property of the party furnishing the information and it shall not
release or disclose such information to any other person, except its employees,
auditors, attorneys, financial advisors, bankers and other consultants and
advisors in connection with this Agreement who agree to be bound by the
forgoing. If the transactions contemplated by this Agreement are not
consummated, such confidence shall be maintained except to the extent such
information comes into the public domain through no fault of the party required
to hold it in confidence, and such information shall not be used to the
detriment of, or in relation to any investment in, the other party, and all
such documents (including copies thereof) shall be destroyed or returned to the
other party. Each party shall be deemed to have satisfied its obligation to
hold confidential, proprietary or other information concerning or supplied by
the other parties if it exercises the same care as it takes to preserve
confidentiality for its own similar information.
5.2 FURTHER ASSURANCES. Each party hereto, upon the request of any
other party hereto, shall do all such further acts and execute, acknowledge and
deliver all such further instruments and documents as may be necessary or
desirable to carry out the transactions contemplated by this Agreement.
5.3 EXPENSES. All costs and expenses incurred in connection with
the transactions contemplated by this Agreement shall be paid by the party
incurring such cost or expense, provided that, within 60 days after the
Closing, the Company shall reimburse each of (i) the DLJMB Investors, (ii)
CalPERS, (iii) OTP and (iv) LJM2 for all reasonable documented out of pocket
expenses (including legal fees and expenses) incurred in connection with the
transactions contemplated by this Agreement, up to a maximum of $20,000 for
each of (i) the DLJMB Investors, (ii) CalPERS, (iii) OTP and (iv) LJM2.
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ARTICLE VI CLOSING;
CONDITIONS TO CLOSING
6.1 LOCATION AND TIME OF CLOSING. The closing (the "Closing") of
the transactions contemplated hereby shall take place on the later of July 12,
2000 or the second business day following satisfaction of the conditions to
Closing set forth in Sections 6.2 and 6.3 (other than conditions that by their
nature are to be satisfied at Closing) at the offices of Xxxxxx & Xxxxxx
L.L.P., First City Tower, 0000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, at 10:00
a.m., local time, or, at such other time or place as the parties hereto shall
agree. The date of the Closing is herein referred to as the "Closing Date."
6.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of
the Company to be performed at the Closing are subject to the satisfaction of
the conditions set forth in this Section 6.2.
(a) No action or proceeding before any court or Governmental
Authority shall have been instituted seeking to restrain, prohibit, or
otherwise interfere with the transactions contemplated hereby.
(b) The Investors shall have performed in all material respects
all of their obligations under this Agreement required to be performed by them
on or prior to the Closing Date.
(c) The representations and warranties of each Investor contained
in this Agreement that are qualified by reference to materiality or Material
Adverse Effect shall be true and correct, and any such representations and
warranties that are not so qualified shall be true and correct in all material
respects, at and as of the Closing Date, as if made at and as of such date,
except that representations and warranties made as of a specific date need be
true only as of that date.
6.3 CONDITIONS TO OBLIGATIONS OF THE INVESTORS. The respective
obligations of each Investor to be performed at Closing are subject to the
satisfaction of the conditions set forth in this Section 6.3.
(a) No action or proceeding before any court or Governmental
Authority shall have been instituted seeking to restrain, prohibit, or
otherwise interfere with the transactions contemplated hereby.
(b) The Company shall have performed in all material respects all
of its obligations under this Agreement required to be performed by it on or
prior to the Closing Date.
(c) The representations and warranties of the Company contained in
this Agreement that are qualified by reference to materiality or Material
Adverse Effect shall be true and correct, and any such representations and
warranties that are not so qualified shall be true and correct in all
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material respects at and as of the Closing Date, as if made at and as of such
date, except that representations and warranties made as of a specific date
need be true only as of that date.
(d) The Investors shall have received an opinion of Xxxxxx &
Xxxxxx L.L.P. or other counsel to the Company reasonably acceptable to the
Investors covering the matters described on EXHIBIT 1.1(c) hereto.
ARTICLE VII
INDEMNIFICATION
7.1 SURVIVAL
(a) All of the representations and warranties of the Company and
the Investors shall survive the date hereof and continue in full force and
effect for a period of two (2) years thereafter, after which they shall
terminate and be of no further force or effect; provided that the
representations set forth in Sections 3.1 and 4.1 shall survive the date hereof
for the applicable statute of limitations.
(b) All of the covenants of the parties hereto that are intended
to be performed after the date hereof shall survive the date hereof.
7.2 THE COMPANY'S AGREEMENT TO INDEMNIFY. Subject to the terms and
conditions of this Article VII, the Company hereby agrees to indemnify, defend
and hold harmless the Investors, from and against all demands, claims, actions
or causes of action, assessments, losses, damages, liabilities, costs and
expenses, including, without limitation, interest, penalties and attorney's
fees and expenses (collectively, "Damages"), asserted against, resulting to,
imposed upon or incurred by the Investors, directly or indirectly, by reason of
or resulting from any breach of any representation, warranty or agreement of
the Company contained in or made pursuant to this Agreement, provided that, in
the case of a breach of a representation or warranty, a written claim for
indemnification against the Company is given pursuant to Section 8.3 below
within the survival period set forth in Section 7.1(a).
7.3 INVESTORS' AGREEMENT TO INDEMNIFY. Subject to the terms and
conditions of this Article VII, each Investor, severally and not jointly,
hereby agrees to indemnify, defend and hold harmless the Company from and
against any and all Damages asserted against, resulting to, imposed upon or
incurred by the Company, directly or indirectly, by reason of or resulting from
a breach of any representation, warranty or agreement of such Investor
contained in or made pursuant to this Agreement, provided that, in the case of
a breach of a representation or warranty, a written claim for indemnification
against the Investors is given pursuant to Section 8.3 below within the
survival period set forth in Section 7.1(a).
7.4 MATTERS INVOLVING THIRD PARTIES. If any third party shall
notify any party hereto (the "Indemnified Party") with respect to any matter
which may give rise to a claim for
11
indemnification against any other party hereto (the "Indemnifying Party") under
this Article VII, then the Indemnified Party shall notify each Indemnifying
Party thereof promptly; PROVIDED, HOWEVER, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall relieve the
Indemnifying Party from any liability or obligation hereunder unless (and then
solely to the extent) the Indemnifying Party thereby is prejudiced as a result
of such delay. In the event any Indemnifying Party notifies the Indemnified
Party within thirty (30) days after the Indemnified Party has given notice of
the matter that the Indemnifying Party is assuming the defense thereof, (A) the
Indemnifying Party will defend the Indemnified Party against the matter with
counsel of its choice reasonably satisfactory to the Indemnified Party, (B) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
(except that the Indemnifying Party will be responsible for the fees and
expenses of the separate co-counsel to the extent the Indemnified Party has
been advised by counsel that (i) the counsel the Indemnifying Party has
selected has a conflict of interest or (ii) there may be one or more legal
defenses available to the Indemnified Party that are different from or
additional to those available to the Indemnifying Party), (C) the Indemnified
Party will not consent to the entry of any judgment or enter into any
settlement with respect to the matter without the written consent of the
Indemnifying Party (not to be withheld unreasonably), and (D) the Indemnifying
Party will not consent to the entry of any judgment with respect to the matter,
or enter into any settlement which does not include a provision whereby the
plaintiff or claimant in the matter releases the Indemnified Party from all
liability with respect thereto, without the written consent of the Indemnified
Party (not to be withheld unreasonably). In the event no Indemnifying Party
notifies the Indemnified Party within thirty (30) days after the Indemnified
Party has given notice of the matter that the Indemnifying Party is assuming
the defense thereof, however, the Indemnified Party may defend against, or
enter into any settlement with respect to, the matter in any manner it
reasonably may deem appropriate. At any time after commencement of any such
action, any Indemnifying Party may request an Indemnified Party to accept a
bona fide offer from the other parties to the action for a monetary settlement
payable solely by such Indemnifying Party (which does not burden or restrict
the Indemnified Party nor otherwise prejudice it) whereupon such action shall
be taken unless the Indemnified Party determines that the dispute should be
continued, in which case the Indemnifying Party shall be liable for indemnity
hereunder only to the extent of the lesser of (i) the amount of the settlement
offer or (ii) the amount for which the Indemnified Party may be liable with
respect to such action. In addition, the party controlling the defense of any
third party claim shall deliver, or cause to be delivered, to the other party
copies of all correspondence, pleadings, motions, briefs, appeals or other
written statements relating to or submitted in connection with the defense of
the third party claim, and timely notices of, and the right to participate in
(as an observer) any hearing or other court proceeding relating to the third
party claim.
7.5 EXCLUSIVE REMEDY; LIMITATION ON DAMAGES
(a) NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY AND EXCEPT AS
PROVIDED IN THE PROVISO CLAUSE TO THIS SENTENCE AND IN SECTION 8.8, IN
CONNECTION WITH ANY CLAIM MADE BY A PARTY AGAINST ANOTHER PARTY HEREUNDER, THE
CLAIMING PARTY SHALL NOT BE ENTITLED TO RECOVER
12
ANY PUNITIVE, CONSEQUENTIAL, SPECIAL, INCIDENTAL OR INDIRECT DAMAGES
(INCLUDING, WITHOUT LIMITATION, ANY EXEMPLARY DAMAGES, TREBLE DAMAGES,
PENALTIES, OR LOSS OF PROFITS OR INCOME), WHETHER BASED ON STATUTE, IN TORT,
CONTRACT OR OTHERWISE, REGARDLESS OF WHETHER SUCH DAMAGES MAY BE AVAILABLE
UNDER APPLICABLE LAW OR OTHERWISE, AND WHETHER OR NOT ARISING FROM A PARTY'S
SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT, THE
PARTIES HERETO HEREBY WAIVING THEIR RIGHT, IF ANY, TO RECOVER SUCH DAMAGES IN
CONNECTION WITH ANY CLAIMS HEREUNDER; PROVIDED, HOWEVER, THAT (A) IN NO EVENT
SHALL SUCH LIMITATIONS OR RESTRICTIONS PREVENT A PARTY FROM RECOVERING ITS
ACTUAL DAMAGES AND (B) THE FOREGOING LIMITATIONS AND RESTRICTIONS SHALL NOT
APPLY TO ANY SUCH DAMAGES THAT ARE ATTRIBUTABLE TO THE GROSS NEGLIGENCE,
WILLFUL MISCONDUCT OR FRAUD OF THE PARTY AGAINST WHOM SUCH CLAIM IS MADE.
(b) THE COMPANY AND THE INVESTORS AGREE THAT THEIR SOLE RESPECTIVE
RIGHTS FOR ANY RECOURSE OF ANY KIND WITH RESPECT TO ANY BREACHES OF ANY
REPRESENTATIONS, WARRANTIES OR COVENANTS UNDER THIS AGREEMENT SHALL BE THEIR
RESPECTIVE RIGHTS TO INDEMNIFICATION AS EXPRESSLY SET FORTH IN THIS ARTICLE VII.
7.6 EXPRESS NEGLIGENCE CLAUSE. THE PARTIES HERETO INTEND THAT THE
INDEMNITIES SET FORTH IN THIS ARTICLE VII BE CONSTRUED AND APPLIED AS WRITTEN
ABOVE NOTWITHSTANDING ANY RULE OF CONSTRUCTION TO THE CONTRARY. WITHOUT
LIMITING THE FOREGOING, THE INDEMNITIES SHALL APPLY NOTWITHSTANDING ANY STATE'S
"EXPRESS NEGLIGENCE RULE" OR SIMILAR RULE THAT WOULD DENY COVERAGE BASED ON AN
INDEMNITEE'S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE OR
GROSS NEGLIGENCE OR STRICT LIABILITY. IT IS THE INTENT OF THE PARTIES THAT, TO
THE EXTENT PROVIDED IN THIS ARTICLE VI, THE INDEMNITIES SET FORTH HEREIN SHALL
APPLY TO AN INDEMNITEE'S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE
NEGLIGENCE, GROSS NEGLIGENCE OR STRICT LIABILITY. THE PARTIES AGREE THAT THIS
PROVISION IS "CONSPICUOUS" FOR PURPOSES OF ALL STATE LAWS.
ARTICLE VIII
GENERAL PROVISIONS
8.1 ENTIRE AGREEMENT; TERMINATION OF PRIOR AGREEMENT. This
Agreement (including the exhibits and schedules) contains the entire agreement
among the parties with respect to the subject matter hereof and the related
transactions and supersedes all prior agreements, written or oral, with respect
thereto.
8.2 WAIVERS AND AMENDMENTS. This Agreement may be amended,
superseded, canceled, renewed or extended only by a written instrument signed
by the parties hereto. The
13
provisions hereof may be waived in writing by the parties hereto. No delay on
the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any
party of any such right, power or privilege, nor any single or partial exercise
of any such right, power or privilege, preclude any further exercise thereof or
the exercise of any other such right, power or privilege.
8.3 NOTICES.
(a) Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally by hand or by
recognized overnight courier, telecopied or mailed (by registered or certified
mail, postage prepaid) as follows:
(i) If to DLJMB Investors, then to:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) If to CalPERS, then to:
California Public Employees' Retirement System
Lincoln Plaza
400 "P" Street
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Senior Investment Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Brand, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
14
With a copy to:
Pacific Corporate Group, Inc.
0000 Xxxxxxxx Xxxxxx
XxXxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(iii) If to OTP, then to:
Ontario Teachers' Pension Plan Board
0000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(iv) If to LJM2, then to:
LJM2-TNPC, LLC
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: General Partner, LJM2
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx, XX, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(v) If to the Company, then to:
TNPC, Inc.
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Managing Director, Law and
Government Affairs
Telephone: (000) 000-0000
15
Facsimile: (000) 000-0000
(b) Each such notice or other communication shall be effective (i)
if given by telecopier, when such telecopy is transmitted to the telecopier
number specified in Section 8.3(a) (with confirmation of transmission), or (ii)
if given by any other means, when delivered at the address specified in Section
8.3(a). Any party by notice given in accordance with this Section 8.3 to the
other party may designate another address (or telecopier number) or person for
receipt of notices hereunder. Notices by a party may be given by counsel to
such party.
8.4 GOVERNING LAW; VENUE; SUBMISSION TO SERVICE OF PROCESS.
(a) THIS AGREEMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY
AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF DELAWARE, OTHER THAN THE CONFLICT OF LAWS RULES
THEREOF.
(b) THE PARTIES AGREE THAT THE STATE OF DELAWARE SHALL HAVE SOLE
AND EXCLUSIVE JURISDICTION OVER ANY ACTION BROUGHT TO ENFORCE THE TERMS OF THIS
AGREEMENT AND THAT THE PARTIES HEREBY CONSENT TO SUITS IN THE COURTS OF THE
STATE OF DELAWARE AND WAIVE THE DEFENSES OF PERSONAL JURISDICTION, SERVICE AND
VENUE.
8.5 BINDING EFFECT; ASSIGNMENT. This Agreement and all of its
provisions, rights and obligations shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement may not be assigned (including by operation of Law) by
a party without the express written consent of the Company (in the case of
assignment by the Investors) or the Investors (in the case of assignment by the
Company) and any purported assignment, unless so consented to, shall be void
and without effect. Nothing herein express or implied is intended or shall be
construed to confer upon or to give anyone other than the parties hereto and
their respective successors and permitted assigns any rights or benefits under
or by reason of this Agreement and no other party shall have any right to
enforce any of the provisions of this Agreement.
8.6 SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall continue in full force and effect and
shall in no way be affected, impaired or invalidated so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term,
provision, covenant or restriction is invalid, void or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the fullest extent possible.
16
8.7 COUNTERPARTS. The Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding
when one or more counterparts hereof, individually or taken together, shall
bear the signatures of all of the parties reflected hereon as the signatories.
8.8 SPECIFIC PERFORMANCE. The parties hereto agree that, to the
extent permitted by law, the terms of this agreement may be specifically
enforced by a decree for the specific performance of any agreement contained
herein or by an injunction against a violation of any of the terms hereof or
otherwise.
(SIGNATURE PAGES FOLLOW)
* * * * *
17
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first written above.
TNPC, INC.
By: /s/ H. XXXXXX XXXXXXXX
----------------------------
Name: H. Xxxxxx Xxxxxxxx
--------------------------
Title: CEO
-------------------------
DLJ MERCHANT BANKING PARTNERS II, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By: /s/ XXX XXXXX
----------------------------
Name: Xxx Xxxxx
--------------------------
Title: Vice President
-------------------------
DLJ MERCHANT BANKING PARTNERS II-A, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By: /s/ XXX XXXXX
----------------------------
Name: Xxx Xxxxx
--------------------------
Title: Vice President
-------------------------
DLJ DIVERSIFIED PARTNERS, L.P.
By: DLJ Diversified Partners, Inc.
Managing General Partners
By: /s/ XXX XXXXX
----------------------------
Name: Xxx Xxxxx
--------------------------
Title: Vice President
-------------------------
DLJ DIVERSIFIED PARTNERS-A, L.P.
By: DLJ Diversified Partners, Inc.
Managing General Partner
By: /s/ XXX XXXXX
----------------------------
Name: Xxx Xxxxx
--------------------------
Title: Vice President
-------------------------
DLJ MILLENNIUM PARTNERS, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By: /s/ XXX XXXXX
----------------------------
Name: Xxx Xxxxx
--------------------------
Title: Vice President
-------------------------
DLJ MILLENNIUM PARTNERS-A, L.P.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By: /s/ XXX XXXXX
----------------------------
Name: Xxx Xxxxx
--------------------------
Title: Vice President
-------------------------
DLJ FIRST ESC L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By: /s/ XXX XXXXX
----------------------------
Name: Xxx Xxxxx
--------------------------
Title: Vice President
-------------------------
DLJ OFFSHORE PARTNERS II, C.V.
By: DLJ Merchant Banking II, Inc.
Managing General Partner
By: /s/ XXX XXXXX
----------------------------
Name: Xxx Xxxxx
--------------------------
Title: Vice President
-------------------------
DLJ EAB PARTNERS, L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By: /s/ XXX XXXXX
----------------------------
Name: Xxx Xxxxx
--------------------------
Title: Vice President
-------------------------
DLJ ESC II, L.P.
By: DLJ LBO Plans Management Corporation
General Partner
By: /s/ XXX XXXXX
----------------------------
Name: Xxx Xxxxx
--------------------------
Title: Vice President
-------------------------
DLJMB FUNDING II, INC.
By: /s/ XXX XXXXX
----------------------------
Name: Xxx Xxxxx
--------------------------
Title: Vice President
-------------------------
CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM
By: /s/ XXXX X. XXXXXXXXX
----------------------------
Name: Xxxx X. Xxxxxxxxx
--------------------------
Title: Investment Officer II
-------------------------
ONTARIO TEACHERS' PENSION PLAN BOARD
By: /s/ XXXXX XXXXXX
----------------------------------
Name: Xxxxx Xxxxxx
--------------------------------
Title: Assistant Portfolio Manager
-------------------------------
LJM2-TNPC, LLC
By: LJM2 Co-Investment, L.P.,
its Class A Member
By: LJM2 Capital Management, L.P.,
its general partner
By: LJM2 Capital Management, L.L.C.,
its general partner
By: /s/ XXXXX XXXX
----------------------------------
Name: Xxxxx Xxxx
--------------------------------
Title: Authorized Person
-------------------------------
EXHIBIT 1.1(a)
FORM OF SPECIAL WARRANT
EXHIBIT 1.1(b)
AMENDMENT NO. 2 TO THE STOCKHOLDERS AGREEMENT
EXHIBIT 1.1(c)
OPINIONS DELIVERED ON BEHALF OF THE COMPANY
1. The Company is duly incorporated, validly existing and in good
standing in the jurisdiction of its incorporation. The Company has the
requisite corporate power and authority to execute, deliver and perform its
obligations under the Agreement and Amendment No. 2 to the Stockholders
Agreement and to consummate the transactions contemplated thereby. The Company
has taken all necessary corporate action to authorize the execution, delivery
and performance of the Agreement and Amendment No. 2 to the Stockholders
Agreement. The Agreement and Amendment No. 2 to the Stockholders Agreement have
been duly executed and delivered by the Company.
2. Neither the execution, delivery nor performance of the Agreement and
Amendment No. 2 to the Stockholders Agreement by the Company nor the
consummation by the Company of the transactions contemplated by the Agreement
and Amendment No. 2 to the Stockholders Agreement will violate any provisions
of or conflict with, result in a breach of, constitute a default under: (a) the
organizational documents of the Company; (b) any judgment, injunction, order or
decree known to such counsel, after reasonable inquiry, to be binding upon the
Company, or (c) any contractual or legal restriction contained in any
agreement, indenture, loan or credit agreement, bond or note or guaranties of
any such obligations which is identified as a material contract on an annex to
the legal opinion.
3. The Common Stock or Non-Voting Common Stock, as the case may be, to
be issued, upon valid exercise of the Special Warrants in accordance with their
terms, will be duly authorized and, when issued and delivered in accordance with
the terms of the Special Warrants, will be validly issued, fully paid,
non-assessable.
4. Assuming the accuracy of the representations of the Investors set
forth in Section 4.6 as of the date hereof, the issuance of the Special
Warrants to be issued will not require registration under the Securities Act.
SCHEDULE 3.1
AGREEMENTS TO ACQUIRE SECURITIES
1. Warrants: As of the date hereof, the Company has issued Special Warrants to
acquire shares of Common Stock at an exercise price of $10.00 per share and
Investor Warrants to acquire shares of Common Stock at an exercise price of
$968.75 per share which are held as follows:
Holder Special Warrants Investor Warrants
------ ---------------- -----------------
Enron Energy Services, LLC 176,839 -0-
GE Capital Equity, Inc. 26,250 18,065
DLJMB Investors 26,250 18,065
CalPERS 15,395 7,742
OTP 21,434 7,742
2. AOL Agreement: Pursuant to the terms of the subscription agreement dated
January 6, 2000, by and among the Company, Enron Energy Services, LLC ("EES")
and America Online, Inc. ("AOL"), the Company agreed to issue up to 12,903
shares of Common Stock to AOL in increments of 1,290.3 shares for every 100,000
customers that subscribe to the Company's service through AOL, up to 1 million
customers.
3. IBM Agreement: Pursuant to the terms of the subscription agreement dated May
15, 2000, by and among the Company, EES and International Business Machines
Corporation ("IBM"), the Company has agreed to issue shares of Common Stock to
IBM in exchange for a cash contribution of $20 million over time. First, the
Company issued 5,502 shares of Common Stock in exchange for $10 million payable
on May 31, 2000 and September 29, 2000. Second, provided a firm commitment
underwritten public offering of shares of Common Stock registered under the
Securities Act is consummated on or before May 15, 2001 (a "Qualified IPO"),
then on the later to occur of December 29, 2000 or the consummation of the
Qualified IPO, IBM agreed to purchase $5 million worth of Common Stock at
one-half the initial public offering price in the Qualified IPO. Finally, on the
later to occur of the business day following the first anniversary of a
Qualified IPO or December 31, 2001, provided that the Company consummated a
Qualified IPO and subject to certain exceptions, the Company agreed to issue and
IBM agreed to purchase $5 million worth of Common Stock at the average of the
last reported daily sales price of the Common Stock on the principal national
securities exchange or market on which the Common Stock is listed or admitted to
trading for each day such exchange or market is open for trading (a "Trading
Day") during the twenty (20) Trading Days prior to such date.
4. Columbia Agreement: Pursuant to the terms of the subscription agreement to be
entered into among Columbia Energy Services Corporation ("Columbia"), the
Company and EES as provided by that certain Asset Purchase Agreement dated June
29, 2000 by and among Columbia, Columbia Energy Retail Corporation, Columbia
Energy Power Marketing Corporation, the New Power Company and the Company (the
"Asset Purchase Agreement"), the Company agreed to issue to Columbia on the date
of closing of the Asset Purchase Agreement, 3,011 shares of Common Stock
as partial consideration for the assets purchased by the Company under the
Asset Purchase Agreement.
5. Stock Options: Pursuant to the terms of the TNPC, Inc. 2000 Stock Plan, the
Company has issued or has available for issuance to certain of its officers,
directors, employees and service providers options to acquire shares of Common
Stock at a predetermined exercise price and/or restricted stock covering an
aggregate of 67,097 shares of Common Stock.
