(LOU PAI)
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (the "Agreement") is entered into and
effective as of July 12, 2000 between TNPC, Inc., a Delaware corporation (the
"Company"), and Lou L. Pai, a resident of the State of Texas ("Stockholder").
WHEREAS, Stockholder has agreed to contribute cash to the Company in
exchange for shares of non-voting common stock, par value $0.01 per share, of
the Company ("Non-Voting Common Stock"); and
WHEREAS, Stockholder and the Company wish to set forth the terms on
which the shares of Non-Voting Common Stock will be issued to Stockholder.
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
SUBSCRIPTION
1.1 SUBSCRIPTION BY STOCKHOLDER. Stockholder hereby subscribes for and
agrees to accept from the Company, and the Company agrees to issue and deliver
to Stockholder 2,315 shares of Non-Voting Common Stock (the "Shares", which term
shall be deemed to include shares of voting common stock into which such shares
are converted) in exchange for a cash payment by Stockholder to the Company in
the amount of $2,159.76 per share. Stockholder shall make such cash payment on
or before August 22, 2000, and the Company shall then issue to Stockholder such
number of Shares subscribed for in this Agreement.
1.2 AGREEMENT TO BE BOUND. Stockholder agrees that the Shares shall be
subject to the terms of this Agreement and the certificate of incorporation and
by-laws of the Company as they may be amended from time to time.
ARTICLE II
GENERAL PROVISIONS;
REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1 BUSINESS OPPORTUNITY AGREEMENT. Stockholder hereby ratifies and
approves the Business Opportunity Agreement dated January 6, 2000 by and between
Enron Corp., an Oregon corporation, and the Company.
2.2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF STOCKHOLDER.
Stockholder represents and warrants to the Company that the following is true as
of the date hereof:
(a) Stockholder is acquiring the Shares for his own account,
solely for investment purposes, and not with a view to, or for resale
in connection with, any distribution of the Shares.
(b) Stockholder understands that the Shares will not be
registered under the Securities Act of 1933, as amended (the
"Securities Act") or any federal or state law by reason of specific
exemptions under the provisions thereof, the availability of which
depends in part upon the bona fide nature of his investment intent and
upon the accuracy of his representations made in this Section 2.2.
(c) Stockholder understands that the Company is relying upon
the representations and agreements contained in this Section 2.2 for
the purpose of determining whether this transaction meets the
requirements for such exemptions.
(d) Stockholder is an "accredited investor" as defined in
Rule 501(a) under the Securities Act.
(e) Stockholder has such knowledge, skill and experience in
business, financial and investment matters that Stockholder is capable
of evaluating the merits and risks of an investment in the Shares.
Stockholder recognizes that an investment in the Shares is a
speculative investment involving a high degree of risk. Stockholder is
and will be able to bear the economic risks of this investment and,
consequently, without limiting the generality of the foregoing,
Stockholder is and will be able to hold the Shares for an extended
period of time and will have a sufficient net worth to sustain a loss
of Stockholder's entire investment in the Shares in the event such loss
should occur.
(f) Stockholder understands that the Shares will be
"restricted securities" under applicable federal securities laws and
that the Securities Act and the Securities and Exchange Commission (the
"Commission") provide in substance that Stockholder may dispose of the
Shares only pursuant to an effective registration statement under the
Securities Act or an exemption therefrom, and Stockholder understands
that, except as provided elsewhere in this Agreement, the Company will
have no obligation to register any of the Shares.
(g) Stockholder has been furnished by the Company with
information (or provided access to information) regarding the business
and financial condition of the Company, its expected plans for future
business activities, the attributes of the Shares and the merits and
risks of an investment in the Shares that he has requested or otherwise
needs to evaluate the investment in the Shares, including, but not
limited to, a copy of the Company's draft registration statement on
Form S-1 dated July 7, 2000.
(h) Stockholder agrees to take such action as may be required
to prevent the Shares from being subject to any community property
interest.
2
2.3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The
Company represents and warrants to Stockholder that the following is true as of
the date hereof:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of its state of
incorporation, and has the corporate power and authority to carry on
its business as presently conducted. The Company 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 to
the extent that the failure to be so qualified would not have a
material adverse effect on the financial condition, business or
operations (a "Material Adverse Effect") on the Company and its
subsidiaries taken as a whole, or prevent or materially delay the
consummation of the transactions contemplated by this Agreement.
(b) The Company has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement and
to consummate the transactions contemplated hereunder. The execution
and delivery of this Agreement by the Company, the performance by the
Company of its obligations hereunder, and the consummation by the
Company of the transactions contemplated hereby have been duly
authorized by all requisite corporate action on the part of the
Company.
(c) This Agreement has been duly executed and delivered by the
Company, and (assuming due execution and delivery of this Agreement by
Stockholder) this Agreement constitutes a legal, valid and binding
obligation of the Company, enforceable against it 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.
(d) The Shares issued by the Company to Stockholder are duly
authorized, and when issued will be validly issued and fully-paid and
non-assessable. The shares of voting common stock, par value $0.01 per
share, of the Company issuable upon conversion of the Shares (the
"Conversion Shares") are duly authorized, and when issued upon
conversion of the Shares, will be validly issued, fully paid and
nonassessable. No Person will have any preemptive or similar rights
with respect to the Shares or Conversion Shares, except as have been
effectively waived. As used herein, a "Person" means any individual,
partnership, firm, corporation, association, trust, unincorporated
organization or other entity.
(e) The execution, delivery and performance of this Agreement
by the Company does not and will not (i) violate, conflict with or
result in the breach of any provision of its certificate of
incorporation or bylaws, (ii) conflict with or violate any law,
governmental regulation or governmental order applicable to it or any
of its assets, properties or businesses or (iii) conflict with, result
in any breach of, constitute a default (or event which with the giving
of notice or lapse of time, or both, would become a default) under,
require any consent under, or give to others any rights of termination,
3
amendment, acceleration, suspension, revocation or cancellation of, or
result in the creation of any encumbrance on any of the Company's
assets or properties pursuant to, any note, bond, mortgage or
indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument or arrangement to which the Company is a
party or by which any of its assets or properties is bound or affected;
except to the extent that any conflict under (ii) or (iii) above would
not have a Material Adverse Effect on the Company and its subsidiaries
taken as a whole.
(f) The execution, delivery and performance of this Agreement
by the Company does not and will not require any consent, approval,
authorization or other order of, action by, filing with or notification
to any governmental or other regulatory authority or agency other than
the filing of a Form D with the Commission.
(g) The Company covenants that, if after the date hereof and
until the date on which the Shares are fully converted into shares of
common stock, par value $0.01 per share, of the Company ("Common
Stock") in accordance with the Amended and Restated Certificate of
Incorporation of the Company, filings are required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act") so that the Shares may be converted into shares of Common
Stock, the Company will upon the written request of Stockholder, and
Stockholder will upon the written request of the Company, (i) file or
cause to be filed, as promptly as practicable after the receipt of such
notice and in no event later than fifteen (15) business days after the
receipt of such notice, with the Federal Trade Commission and the
United States Department of Justice, all reports and other documents
required to be filed by such party under the HSR Act concerning the
transactions contemplated in such notice, (ii) promptly comply with or
cause to be complied with any requests by the Federal Trade Commission
or the United States Department of Justice for additional information
so that the waiting period applicable thereto under the HSR Act shall
expire as soon as practicable, and (iii) cooperate with the Company in
requesting early termination of any applicable waiting period under the
HSR Act. The Company will reimburse Stockholder for any filing fees in
connection with such filing by Stockholder.
(h) The Company covenants that, until the consummation of a
firm commitment underwritten public offering of Common Stock registered
under the Securities Act (an "Initial Public Offering"), it will
deliver to Stockholder (as long as Stockholder is not a director of the
Company):
(i) as soon as practicable and in any event within
fifteen (15) days after the end of each calendar month, a
report showing in reasonable detail the financial and
operating performance and results for the prior calendar
month;
(ii) as soon as practicable and in any event within
sixty (60) days after the end of each quarterly period (other
than the last quarterly period) in each fiscal year,
consolidated statements of income, changes in stockholders'
equity and changes in financial position of the Company for
such quarterly period and for the period from the beginning of
the current fiscal year to the end of such quarterly
4
period, and a consolidated balance sheet of the Company as at
the end of such quarterly period, all unaudited but prepared
in accordance with generally accepted accounting principles
("GAAP") on a basis consistent with past practice;
(iii) as soon as practicable and in any event within
ninety (90) days after the end of each fiscal year,
consolidated statements of income, changes in stockholders'
equity and changes in financial position of the Company for
such year, and a consolidated balance sheet of the Company as
at the end of such year, in each case audited for the Company
by independent public accountants of recognized national
standing selected by the Company from among the five largest
accounting firms in the United States, whose report shall
state that such consolidated financial statements present
fairly the results of operations, cash flows and financial
position of the Company in accordance with GAAP on a basis
consistent with prior periods except as noted therein and that
the examination by such accountants has been made in
accordance with generally accepted auditing standards; and
(iv) as soon as practicable, and in any event within
the applicable time period specified in the instructions to
Form 8-K under the Securities Exchange Act of 1934, notice of
any event that would be required to be reported on such form
if the Company were then required to file such reports.
ARTICLE III
TRANSFERS OF SECURITIES
3.1 GENERAL RULE. Any sale, assignment, exchange or other transfer or
disposition, direct or indirect (collectively, a "Transfer"), by Stockholder of
the Shares shall be governed by this Agreement. Notwithstanding the foregoing,
the term "Transfer" shall not include (a) any disposition pursuant to an
exchange, merger, recapitalization, consolidation or reorganization involving
the Company in which securities of the Company or any other Person are issued in
respect of the Shares or (b) a conversion of the Shares into shares of Common
Stock. Any attempted Transfer of all or any portion of the Shares, other than in
accordance with the terms of this Agreement, shall be null and void.
3.2 VOLUNTARY TRANSFER. Without first obtaining the Company's written
consent, (a) prior to December 31, 2001, Stockholder shall not make any
voluntary Transfer of the Shares, and (b), on or after December 31, 2001,
Stockholder shall not make any voluntary Transfer of the Shares other than a
Transfer for cash that complies with the provisions of Section 3.3 below.
3.3 RIGHT OF FIRST REFUSAL.
(a) On or after December 31, 2001, prior to any Transfer or
attempted Transfer by Stockholder of some or all of the Shares (the
"Offered Shares") for cash, Stockholder shall (i) give prior written
notice (a "Transfer Notice") to the Company of Stockholder's intention
to effect such Transfer, describing the terms and conditions of the
5
proposed Transfer, including the identity of the prospective
transferee(s), the number of shares of Offered Shares Stockholder
desires to sell and the purchase price. After receipt of the Transfer
Notice, the Company shall have the option for 30 days from the date of
receipt of the Transfer Notice to elect to purchase all, but not less
than all, of the Offered Shares upon the same terms and conditions as
those set forth in the Transfer Notice by delivering a written notice
(the "Election Notice") of such election to Stockholder within such
30-day period. Stockholder shall not consummate such Transfer until the
earlier to occur of the lapse of the 30-day period or the date on which
the Company notifies Stockholder in writing that it will not exercise
its rights under this Section 3.3 (the "Authorization Date"). If the
Company has elected not to purchase all of the Offered Shares, has
failed to make a timely election or fails in any material respect to
purchase the Offered Shares in accordance with Section 3.3(b) below,
Stockholder may Transfer all, but not less than all, of the Offered
Shares to the prospective transferee(s) thereof specified in the
Transfer Notice, at a price and on terms no more favorable to such
prospective transferee(s) than as specified in the Transfer Notice,
during the 30-day period immediately following the Authorization Date,
subject to Sections 3.7 and 3.8 hereof. Each of the certificates issued
upon such Transfer shall bear the restrictive legends set forth in the
second paragraph of Section 3.10 hereto, unless in the reasonable
judgment of counsel for the Company such legend is not required in
order to ensure compliance with the Securities Act. If the Offered
Shares are not so transferred within such 30-day period, such Offered
Shares must be re-offered to the Company in accordance with the
provisions of this Section 3.3 if Stockholder still desires to Transfer
the Offered Shares.
(b) If the Company exercises the right to purchase the Offered
Shares by timely delivery of the Election Notice, unless otherwise
agreed by Stockholder and the Company, the closing will take place at
the offices of the Company in Greenwich, Connecticut, or such other
location as the Company's principal place of business may be, on the
fifth business day after the date of the Election Notice. At the
closing, the Company will pay the purchase price set forth in the
Transfer Notice in cash (by certified or cashier's check) solely upon
Stockholder's delivery to the Company of valid certificates evidencing
all of the Offered Shares then being purchased pursuant to the Election
Notice. Certificates representing the Offered Shares will be duly
endorsed for transfer to the Company. By delivery of such certificates
to the Company, Stockholder will be deemed to represent and warrant to
the Company that the transferred Offered Shares are owned by
Stockholder free and clear of all liens, adverse claims, and other
encumbrances other than as provided in this Agreement. Stockholder will
promptly perform, whether before or after any such closing, such
additional acts (including, without limitation, executing and
delivering additional documents) as are reasonably required by the
Company to effect the transactions contemplated by this Section 3.3.
3.4 INVOLUNTARY TRANSFER. In the event of an involuntary Transfer of
the Shares by Stockholder (including, but not limited to, Transfers resulting
from death of Stockholder, the initiation of bankruptcy proceedings against
Stockholder, the entry of a divorce decree directly involving Stockholder, the
execution of either a judgment or a foreclosure by a court of law against
Stockholder or any other event that would have the effect of forcing Stockholder
to
6
Transfer the Shares to a third party), Stockholder shall give written notice
(an "Involuntary Transfer Notice") to the Company promptly after the occurrence
of the event which caused such involuntary Transfer. After receipt of an
Involuntary Transfer Notice, the Company shall have the option for 30 days from
the date of receipt of the Involuntary Transfer Notice to elect to purchase such
Stockholder's Shares within such 30-day period at their Fair Market Value. As
used herein, Fair Market Value shall mean such reasonable and fair value as
determined in good faith by the board of directors of the Company using a
generally accepted method of valuation. In the event of the death of
Stockholder, any Transfer of the Shares to the Stockholder's spouse or
descendants shall not be subject to this Section 3.4 (but shall be subject to
Section 3.7).
3.5 DRAG ALONG RIGHTS. In connection with any Transfer by Enron Energy
Services, LLC ("EES") and its affiliates (as defined for purposes of Rule 405
under the Securities Act, "Affiliates") of all of their shares of Common Stock
or securities convertible into or exercisable for Common Stock ("Common Stock
Equivalents") to any transferee or group of related transferees (other than an
Affiliate of EES), EES or its Affiliate shall have the right to require
Stockholder to Transfer all, but not less than all, of the Shares to such
transferee or transferees on the same terms and for the exact same consideration
on a per share basis as received by EES or its Affiliate in such Transfer.
Stockholder shall not be required to make any representations or warranties in
connection with such Transfer other than representations and warranties as to
(i) Stockholder's ownership of the Shares to be Transferred free and clear of
all liens, claims and encumbrances, (ii) Stockholder's power and authority to
effect such Transfer and (iii) such matters pertaining to compliance with
securities laws as the transferee may reasonably require. The closing of such
purchase by the transferee shall be on the same date that the transferee
acquires shares from EES or its Affiliate PROVIDED that Stockholder is given 10
days advance notice of such closing.
3.6 TERMINATION OF CERTAIN TRANSFER PROVISIONS. Upon the consummation
of an Initial Public Offering, Sections 3.2, 3.3, 3.4, 3.5 and 3.7 hereof shall
automatically terminate. The Company shall be under no obligation to undertake
the filing or completion of an Initial Public Offering.
3.7 CONDITIONS TO TRANSFERS; CONTINUED APPLICABILITY OF AGREEMENT. As a
condition to any Transfer permitted under this Agreement, any transferee of the
Shares shall be required to become a party to this Agreement by executing an
Adoption Agreement in substantially the form of EXHIBIT A hereto, and shall have
all the obligations of a party hereunder and the rights that are expressly
provided for herein. If any Person acquires Shares from a party to this
Agreement in a Transfer notwithstanding such Person's failure to execute an
Adoption Agreement in accordance with the preceding sentence, such Person and
such Shares shall be subject to this Agreement, even if such Person is not a
party to this Agreement.
3.8 TRANSFERS SUBJECT TO COMPLIANCE WITH SECURITIES ACT. Stockholder
acknowledges that the Shares have not been registered under the Securities Act
and agrees that no sale, transfer, assignment, hypothecation or other
disposition of the Shares shall be made in the absence of (a) a current
registration statement under the Securities Act as to the Shares and the
registration or qualification of the Shares under any applicable state
securities laws that is then in effect or (b)
7
an opinion of counsel reasonably satisfactory to the Company to the effect
that such registration or qualification is not required.
3.9 LOCK-UP AGREEMENT. In connection with any Initial Public Offering,
Stockholder agrees to enter into an agreement on such terms as may be reasonably
requested by the underwriters for the public offering not to directly or
indirectly, sell, transfer or otherwise dispose of or transfer the economic
benefits and burdens of, any of the Shares for a period of time following such
Initial Public Offering as such underwriter may reasonably request but not to
exceed 180 days.
3.10 RESTRICTIVE LEGENDS. Each certificate representing Shares held by
Stockholder, and each certificate representing Shares issued to any subsequent
transferee, shall be stamped or otherwise imprinted with a legend in
substantially the following form:
THIS SECURITY IS SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER
TERMS AND CONDITIONS SET FORTH IN A SUBSCRIPTION AGREEMENT BETWEEN THE
COMPANY AND STOCKHOLDER, A COPY OF WHICH MAY BE OBTAINED FROM THE
COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.
THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. THE SECURITY MAY NOT BE OFFERED
FOR SALE, SOLD, PLEDGED, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF (A) A CURRENT REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AS TO THE SECURITY AND THE REGISTRATION OR QUALIFICATION UNDER ANY
APPLICABLE STATE SECURITIES LAWS THAT IS THEN IN EFFECT OR (B) AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT
THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
3.11 REGISTRATION RIGHTS.
(a) The Company agrees that after the effectiveness of an
Initial Public Offering (or such later date as applicable in accordance with
Section 3.9 hereof), Stockholder will be entitled to piggyback registration
rights to include any of the Conversion Shares (used herein, the "Piggyback
Securities") in any registration statement filed by the Company with the
Commission to register for sale shares of Common Stock by the Company for its
own account or for the account of any holder of Common Stock or Common Stock
Equivalents as defined in the Stockholders Agreement, as amended, dated as of
January 6, 2000, among the Company, EES and certain institutional investors
named therein (the "Investor Stockholders Agreement") (other than a
registration statement on Form S-4 or Form S-8 or any successor forms thereto
or other than in connection with an exchange offer or offering solely to the
Company's existing security holders). Each time the Company proposes to so
file a registration statement with respect to which Stockholder has the right
to request inclusion of Piggyback Securities, the Company shall
8
give written notice of such proposed filing to Stockholder as soon as
practicable (but in no event less than 15 days before the anticipated filing
date of such registration statement) and, upon the written request by
Stockholder which shall be given to the Company within 15 days after delivery
by the Company of the notice of intent to file a registration statement,
Stockholder may include in such registration Piggyback Securities (which
request by Stockholder shall specify the number of Piggyback Securities
proposed to be included in such registration). Stockholder shall be permitted
to withdraw all or part of Stockholder's Piggyback Securities from such a
registration at any time prior to the effective date thereof. The Company
shall use commercially reasonable efforts to cause all such shares of
Piggyback Securities that Stockholder has requested to be included in such
registration to be sold on the same terms and conditions as the Common Stock
otherwise being sold in such registration; PROVIDED, HOWEVER, that if the
managing underwriter or underwriters advises the Company, that in their
opinion the total amount of the securities, including Piggyback Securities,
to be included such offering is sufficiently large to cause a material and
adverse affect on the price or success of the offering, then the number of
Piggyback Securities included by Stockholder shall be reduced at the same
time and on the same basis as the number of shares included by other holders
of Piggyback Securities (as defined in the Investor Stockholders Agreement)
who are not deemed to be Requesting Holders (as defined in the Investor
Stockholders Agreement) with respect to such registration. Notwithstanding
the foregoing, Stockholder shall not have any piggyback registration rights
with respect to Conversion Shares if, on the date of filing of a registration
statement by the Company, (a) Stockholder is entitled to sell his Conversion
Shares pursuant to Rule 144(k) (or any comparable successive provision)
promulgated under the Securities Act or (b) if the Stockholder could sell all
of his Conversion Shares within a three-month period under Rule 144 (or any
comparable successive provision) promulgated under the Securities Act. The
Company may suspend, terminate or withdraw a piggyback registration statement
at any time in its sole discretion.
(b) The Company shall pay the following registration expenses
(the "Registration Expenses"): (a) all registration and filing fees (including,
without limitation, with respect to filings to be made with the Commission and
the National Association of Securities Dealers, Inc.), (b) fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Piggyback Securities), (c) printing expenses, (d) internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), (e) the fees and expenses incurred in
connection with the listing on an exchange of the Piggyback Securities if the
Company shall choose to list such Piggyback Securities, (f) reasonable fees and
disbursements of counsel for the Company and customary fees and expenses for
independent certified public accountants retained by the Company, (g) the
reasonable fees and expenses of any special experts retained by the Company in
connection with such registration and (h) fees and expenses of any "qualified
independent underwriter" or other independent appraiser participating in any
offering pursuant to Section 3 of Schedule E to the By-laws of the National
Association of Securities Dealers, Inc. The Company shall not have any
obligation to pay any underwriting fees, discounts, or commissions attributable
to the sale of Piggyback Securities or, except as provided by clause (b) or (h)
above, any out-of-pocket expenses of Stockholder (or the agents who manage
Stockholder's accounts) or the fees and disbursements of any underwriter
attributable to the sale of Piggyback Securities.
9
3.12 OTHER ACTION. The Company and Stockholder shall use reasonable
efforts to take, or cause to be taken, all appropriate action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws to consummate and make effective the transactions contemplated hereunder,
including, without limitation, using reasonable efforts to obtain all licenses,
permits, consents, approvals, authorizations, qualifications and orders of the
competent governmental entities.
ARTICLE IV
MISCELLANEOUS
4.1 ENTIRE AGREEMENT; TERMINATION OF PRIOR AGREEMENT. This Agreement
contains the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements, written or oral, with respect
thereto.
4.2 WAIVERS AND AMENDMENTS. This Agreement may be amended, superseded,
canceled, renewed or extended only by a written instrument signed by the parties
hereto. The 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.
4.3 REGISTRATION OF TRANSFERS. If, in the reasonable judgment of
counsel to the Company, a proposed Transfer by Stockholder would constitute a
violation of this Agreement, then the Company may refuse to register such
proposed Transfer of Shares on the stock transfer records of the Company and
give related instructions to its stock transfer agent, if any, to stop the
registration of such proposed Transfer of Shares to the extent reasonably
necessary to avoid such violation.
4.4 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 Stockholder, then to the address set forth on
the signature page hereto.
(ii) If to the Company, then to:
10
TNPC, Inc.
10 Glenville Street
Greenwich, Connecticut 06831
Attention: General Counsel
Facsimile: (203) 531-0404
(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 4.4(a) (with confirmation of
transmission), or (ii) if given by any other means, when delivered at
the address specified in Section 4.4(a). Any party by notice given in
accordance with this Section 4.4 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.
4.5 GOVERNING LAW.
(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, WITHOUT GIVING
EFFECT TO 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.
4.6 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.
4.7 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.
11
4.8 ASSIGNMENT. Except as expressly provided herein, this Agreement
shall not be assigned by any party without the express written consent of the
other party hereto (which consent may be granted or withheld in the sole
discretion of any party). Notwithstanding the foregoing, the rights of
Stockholder set forth in Section 3.11 of this Agreement may be assigned to any
Person who acquires some or all of the Shares or Conversion Shares in compliance
with Article III. Any assignment of the rights set forth in Section 3.11
pursuant to this Section 4.8 shall be effective only upon receipt by the Company
of written notice from the assignor stating the name and address of any
assignee.
4.9 THIRD PARTY BENEFICIARY. As a result of the rights granted to EES
in Section 3.5 hereof, EES shall be considered a third party beneficiary of this
Agreement entitled to enforce such provision as though it were a party hereto.
(SIGNATURE PAGE FOLLOWS)
* * * * *
12
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first written above.
TNPC, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
STOCKHOLDER
-----------------------------------
Lou L. Pai
Address:
---------------------------
---------------------------
Fax No.:
---------------------------
13
EXHIBIT A
ADOPTION AGREEMENT
This Adoption Agreement ("Adoption") is executed pursuant to the terms
of the Subscription Agreement dated as of July 12, 2000 between TNPC, Inc. (the
"Company") and _______________ ("Stockholder") (the "Subscription Agreement"), a
copy of which is attached hereto by the transferee ("Transferee") executing this
Adoption Agreement. By the execution of this Adoption Agreement, the Transferee
agrees as follows:
1. ACKNOWLEDGMENT. Transferee acknowledges that Transferee is acquiring
Shares from a stockholder of the Company, subject to the terms and conditions of
the Subscription Agreement. Capitalized terms used herein without definition are
defined in the Subscription Agreement and are used herein with the same meanings
set forth therein.
2. AGREEMENT. Transferee (a) agrees that the Shares acquired by
Transferee shall be bound by and subject to the terms of the Subscription
Agreement and (b) hereby joins in, and agrees to be bound by, the Subscription
Agreement with the same force and effect as if he were originally a party
thereto. Transferee represents and warrants that all of the representations and
warranties made by Stockholder in Section 2.2 of the Subscription Agreement are
true and correct as to the Transferee as if such Transferee were Stockholder.
3. NOTICE. Any notice required as permitted by the Stockholders
Agreement shall be given to Transferee at the address listed below Transferee's
signature below.
EXECUTED AND DATED on this _____ day of ____________, ________.
TRANSFEREE:
By:
-------------------------------
Notice
Address:
--------------------------
--------------------------
--------------------------
14