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EXHIBIT 10.2
SHARE SUBSCRIPTION AGREEMENT
This Share Subscription Agreement, hereinafter referred to as the "Share
Subscription Agreement", is entered into on this 29th day of March 1999
by and between
1 RELIANT ENERGY WHOLESALE HOLDINGS (EUROPE) INC., a company
incorporated under the laws of the State of Delaware, USA, having
its principal offices at 1111 Louisiana, Houston, Texas, United
States of America, herein represented by R. Steve Letbetter,
hereinafter referred to, together with any successors and permitted
assignees, as the "New Partner";
and
2 PROVINCIE NOORD HOLLAND
having its seat at Haarlem, the Netherlands,
herein represented by J.P.J. Lagrand,
hereinafter referred to as the "Province of North Holland";
and
3 GEMEENTE AMSTERDAM
having its seat at Amsterdam, the Netherlands,
herein represented by G. ter Horst,
hereinafter referred to as the "City of Amsterdam";
and
4 N.V. PROVINCIAAL EN GEMEENTELIJK UTRECHTS
STROOMLEVERINGSBEDRIJF
having its registered office at Utrecht, the Netherlands,
herein represented by M. ten Klooster,
hereinafter referred to as "Pegus";
and
5 RELIANT ENERGY POWER GENERATION, INC., a company incorporated
under the laws of the State of Delaware, United States of America,
with its principal offices at 1111 Louisiana, Houston, Texas,
United States of America,
herein represented by R. Steve Letbetter,
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hereinafter referred to as the "Ultimate Parent 2"
and
6 N.V. ENERSIEPRODUKTIEBEDRIJF UNA
having its registered office at Utrecht, the Netherlands,
herein represented by P. Koppen de Neve,
hereinafter referred to as the "Company";
(The New Partner, Province of North Holland, City of Amsterdam, Pegus, the
Ultimate Parent 2 and the Company hereinafter collectively referred to as the
"Parties" and each individually as a "Party").
WHEREAS:
A. Pursuant to the Partnership Documentation concluded between Parties
on the Signing Date (i) the Existing Partners will sell and transfer
their Shares to the New Partner and the New Partner will purchase
and accept such Shares on the terms and conditions set forth in the
Share Purchase Agreement and (ii) the New Partner wishes to
subscribe for the Subscription Shares and in respect of such
subscription contribute the Subscription Price on the terms and
conditions set out in this Share Subscription Agreement.
IT IS HEREBY AGREED AS FOLLOWS:
ARTICLE 1 DEFINITIONS
1.1. Capitalized terms used in this Share Subscription Agreement and not
otherwise defined shall have the meanings ascribed to them in
schedule 1.1 to the Partnership Agreement, which schedule is
attached hereto as SCHEDULE 1.1, except as the context may otherwise
require.
1.2. All Schedules and Annexes to this Share Subscription Agreement shall
form an integral part hereof.
1.3. References to Articles, Schedules or Annexes shall be references to
Articles of and Schedules and Annexes to this Share Subscription
Agreement.
1.4. Headings are inserted for convenience only and shall not affect the
interpretation of this Share Subscription Agreement.
1.5. Nouns, pronouns and verbs of the singular number shall be deemed to
include the plural, and vice versa, and pronouns of the masculine
gender shall be deemed to include the feminine and neuter, and vice
versa, all as the context may require.
1.6. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation".
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1.7. Whenever used in this Share Subscription Agreement the words
"hereof", "herein" and similar words shall be construed as
references to this Share Subscription Agreement as a whole and not
limited to the particular Article or subsection in which the
reference appears.
1.8. The words "best knowledge" shall mean such knowledge as the relevant
entities, officials, directors or members of the management board,
municipal executive board or provincial executive body, as the case
may be, have or may reasonably be expected to have.
ARTICLE 2SUBSCRIPTION AND SUBSCRIPTION PRICE
2.1. Subject to the terms and conditions of this Share Subscription
Agreement, the Company agrees to issue to the New Partner and the
New Partner agrees to subscribe for 850 (in words: eight hundred
and fifty) Shares (the "Subscription Shares") free from any and all
liens, charges, claims, third party rights, pledges and
encumbrances and together with all rights attaching to them.
2.2. The subscription price for the Subscription Shares (the "Subscription
Price") shall be NLG 897,667,150 (in words: eight hundred ninety
seven million six hundred sixty seven thousand one hundred and
fifty Dutch Guilders), and shall be payable as set forth in Article
6.3.
ARTICLE 3 SIGNING
3.1. The Signing Actions shall take place on the Signing Date and shall be
deemed to take place simultaneously, with each such action being
conditional upon all such actions being effected.
ARTICLE 4CONDITIONS TO COMPLETION
4.1. The obligations of the Parties under this Share Subscription
Agreement shall be subject to and conditional upon each of the
First Completion Conditions being satisfied or waived by the Party
to whose benefit the First Completion Conditions inure.
4.2. Each of the Parties hereto agrees to make all reasonable efforts to
ensure that each of the First Completion Conditions is satisfied as
soon as possible after the Signing Date. If at any time a Party
becomes aware of anything that may prevent any First Completion
Conditions being satisfied, it shall immediately inform the other
Parties and they shall cooperate to make all reasonable efforts to
ensure that the First Completion Conditions are satisfied.
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ARTICLE 5 COVENANTS PRIOR TO COMPLETION
5.1. The Company shall ensure, from the Signing Date to the First
Completion Date, that no action contrary to the Pre-Completion
Covenants shall be taken without the prior written approval of the
New Partner.
ARTICLE 6 COMPLETION AND PAYMENT
6.1. The Completion of the Subscription Shares shall take place at the
Amsterdam offices of Loeff Claeys Verbeke at the First Completion
Date.
6.2. The issuance of the Subscription Shares shall be carried out by
means of execution of a notarial deed, in accordance with the form
attached hereto as SCHEDULE 6.2,to be executed by the Notary. The
Notary is a civil law notary of Loeff Claeys Verbeke, the firm of
the external legal advisors of the Company. The other Parties
hereby acknowledge that they are aware of the provisions of
articles 8, 9, l0 and 14.2 of the "Guidelines" concerning
associations between civil law notaries ("notarissen") and
associations between civil law notaries (notarissen) and
barristers/solicitors ("advocaten") as established by the Board of
the Royal Regulatory Body of Civil Law Notaries ("Koninklijke
Notariele Beroepsorganisatie"). The other Parties hereby explicitly
agree that Loeff Claeys Verbeke shall advise and act on behalf of
the Company with respect to this Share Subscription Agreement, any
agreements resulting from this Share Subscription Agreement and/or
any disputes resulting therefrom. To this end the other Parties
hereby approve the exchange of essential information, relating to
the issuance of the Subscription Shares, between the
barristers/solicitors ("advocaten "), tax advisors ("fiscalisten")
and civil law notaries ("notarissen") of Loeff Claeys Verbeke.
6.3. The New Partner shall pay the Subscription Price to the Company at
the First Completion Date in accordance with the First Completion
Actions as follows:
(i) an amount of NLG 21,250,000 (in words: twenty one million two
hundred fifty thousand Dutch Guilders) in cash, which is
equal to 25% (in words: twenty five percent) of the nominal
value of the Subscription Shares;
(ii) the remainder of the Subscription Price by way of assignment
to the Company of a promissory note issued to New Partner by
Ultimate Parent 2, the form of which note is attached as
SCHEDULE 6.3.
6.4. The Company hereby waives any right under Chapter III, article 8 of
its Articles of Association to call up that portion of the nominal
amount of the Subscription Shares in excess of the cash portion
thereof other than as provided in the Promissory Note, all Parties
acknowledging that the promissory note delivered under Article 6.3
constitutes, together with said cash portion, complete payment for
the Subscription Shares.
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ARTICLE 7 COMPLETION
7.1. At the Completion of the Subscription Shares, the First Completion
Actions shall take place, which actions shall be deemed to take
place as described in schedule 18.2 to the Partnership Agreement,
with each such action being conditional upon all such actions being
effected.
7.2. Each Party shall at the reasonable request of the other Party
execute all documents and do all other acts and things as may
reasonably be deemed necessary to give full effect to this Share
Subscription Agreement and all agreements pursuant hereto.
ARTICLE 8 WAIVER
8.1. The Existing Partners unconditionally and irrevocably waive all of
their respective rights under the Articles of Association in respect
of the issuance of the Subscription Shares.
ARTICLE 9 DUE DILIGENCE INVESTIGATION
9.1. The New Partner and the Ultimate Parent 2 acknowledge and agree that
they have performed, with the assistance of professional legal,
accountancy, financial, technical and tax advisors, a due diligence
investigation (the "Due Diligence Investigation") and furthermore:
9.1.1. that for the purposes of the Due Diligence Investigation
they have had (and that their advisors have had)
opportunity to review the information, including the data
room information set out in SCHEDULE 9.1.1., made
available to them and their advisors;
9.1.2. that they have obtained (and their advisors have obtained)
other information that they (and their advisors) deemed
proper, and necessary for the purposes of entering into
this Share Subscription Agreement, through management
interviews, management presentations, site visits and
questions submitted to the Existing Partners and the
Companies and their advisors;
9.1.3. that they have raised with the Existing Partners and the
Companies any and all specific issues which they
considered relevant in connection with the transactions
contemplated hereby.
9.2. The New Partner and the Ultimate Parent 2 acknowledge that the
representations and warranties contained in this Share Subscription
Agreement are the only representations, warranties or other
assurances of any kind given by or on behalf of the Company on which
the New Partner and the Ultimate Parent 2 may rely (and have relied
on) in entering into this Share Subscription Agreement.
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9.3. The New Partner and the Ultimate Parent 2 hereby declare that they
are not aware as of the Signing Date of any matter or anything which
is inconsistent with the representations and warranties of the
Company contained in this Share Subscription Agreement.
ARTICLE 10 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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10.1. Subject to the provisions of Article 9 and Article 12, the Company
represents and warrants to the New Partner that as of First
Completion Date the following statements (the "Warranties") shall be
true and correct:
10.1.1. the Companies have been duly incorporated and
are validly existing under the laws of the
Netherlands;
10.1.2. the Company is registered with the Trade
Register of the Chamber of Commerce of "Utrecht
en omstreken" under file number 30084656 in
conformity with the extract attached as annex
1.4 to the Share Purchase Agreement and the
information contained in the extract is correct;
10.1.3. the Company has the power and authority to enter into this
Share Subscription Agreement and to carry out its
obligations thereunder;
10.1.4. the Company has legally resolved to enter into
this Share Subscription Agreement subject to the
provisions hereof, the signing hereof has been
duly authorized and upon signature hereof this
Share Subscription Agreement will constitute the
legally valid and binding obligations of the
Company enforceable against the Company in
accordance with its terms and conditions;
10.1.5. execution, delivery and performance of this Share
Subscription Agreement by the Company and its compliance
with the terms andconditions hereof do not violate,
conflict with or constitute a breach of any of the terms
or provisions of, or a default under (or an event
that with notice or lapse of time, or both,
would constitute a default), or require consent
under, or result in the creation or imposition
of a lien, charge, pledge or encumbrance on any
property or assets of the Companies or an
acceleration of any indebtedness of any of the
Companies pursuant to (i) any statute, rule or
regulation under applicable laws or any order of
any governmental agency or of any court or any
agreement to which the Company is a party or
subject or (ii) any bond, debenture, note,
indenture, mortgage, deed of pledge or trust,
loan or credit agreement, reimbursement
agreement relating to any letter of credit,
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license, permit, authorization, leases,
subleases or other agreement or instrument to
which any of the Companies is a party or is
subject, except as it would not have a material
adverse effect on the Company or the Companies;
10.1.6. the entire issued and paid-up share capital of the Company
consists of 2,550 (in words: two thousand five hundred
and fifty) Shares before the Completion of the
Subscription Shares;
10.1.7. the authorized share capital of the Company amounts to Euro
204,210,000 (in words: two hundred four million two
hundred one thousand Euro), divided into 4,500 Shares;
10.1.8. the New Partner shall have full right and title to the
Subscription Shares free of any pledge, usufruct,
attachment or any other charge;
10.1.9. no person other than the New Partner has any right,
contingent or otherwise, to acquire or to be offered the
Subscription Shares or any other Shares;
10.1.10. the Companies are legally and validly registered in
accordance with the laws of the Netherlands;
10.1.11. the most recent versions of the articles of
association of the Companies have been submitted
to the New Partner prior to the signing date. No
action has since been taken to amend any of the
articles of association, except as provided for
in the Partnership Agreement. The Company is
subject to the provisions of the statutory
regime with respect to large companies
(structuurregime);
10.1.12. none of the Companies has been dissolved or liquidated
and no resolution has been adopted with respect to the
dissolution or liquidation of the Companies and there are
no circumstances known to the Company that may cause the
dissolution or liquidation of any of the Companies;
10.1.13. none of the Companies has been declared bankrupt
and no suspension of payments has been granted
to any of the Companies; no resolution has been
adopted to the aforesaid effect and no
circumstances exist that could require one or
more of the Companies being declared bankrupt or
granted a suspension of payments;
10.1.14. no resolution has been adopted with respect to any of the
Companies to issue shares additional to the issued and
outstanding share capital of each of such Companies;
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10.1.15. no rights - including options, warrants and convertible
debentures - have been granted with respect to unissued
shares in the capital of the Companies;
10.1.16. the Companies' investments in the Participations and the
results of operations of the Participations are not
material to the financial condition, results of operations
or prospects of the Companies.
ARTICLE 11 REPRESENTATIONS AND WARRANTIES OF THE NEW PARTNER AND
ULTIMATE PARENT 2
11.1. The New Partner and the Ultimate Parent 2 represent and warrant to
the Company that each and every statement made by them under article
19 of the Partnership Agreement shall be true and correct at the
First Completion Date.
ARTICLE 12 BREACH OF WARRANTIES, NON-FULFILMENT, DAMAGES
12.1. In the event of a breach of any of the Warranties by the Company,
the New Partner or the Ultimate Parent 2 ("Breach") or
non-fulfilment by the Company, the New Partner or the Ultimate
Parent 2 of any other obligation contemplated by this Share
Subscription Agreement ("Non-Fulfilment"), the Company, the New
Partner or the Ultimate Parent 2 (the "Notifying Party"), as the
case may be, shall upon obtaining knowledge thereof notify the
other Party (the "Notified Party") of such Breach or Non-Fulfilment
promptly and in writing, and under no circumstances later than 30
(in words: thirty) days after obtaining knowledge of the Breach or
Non-Fulfilment, setting out in reasonable detail the events or
facts giving rise to the Breach or Non Fulfilment, and specifying
the amount of Damages claimed as a result of any Breach of
Warranties.
12.2. If the Notified Party fails to take appropriate measures to remedy
the Breach or Non-Fulfilment within 30 (thirty) days of such
notification and a dispute arises, the Notifying Party shall be
entitled to institute arbitration proceedings with a view to
resolving the dispute pursuant to article 40 of the Partnership
Agreement.
12.3. Subject to the other provisions of this Article 12, the Company
shall indemnify the New Partner for all Damages incurred by the New
Partner, resulting from any Breach or any Non-Fulfilment, as the
case may be.
12.4. The Company shall not owe Damages to the New Partner by virtue of
this Article 12 or otherwise have obligations towards the New
Partner if and to the extent that the Damage ensuing from a Breach
or Non-Fulfilment:
12.4.1. has been paid to the New Partner by virtue of any
insurance policy;
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12.4.2. has been paid to the New Partner by a third party other
than an insurance company;
12.4.3. has not been reported in writing with a statement of the
nature, cause and scope of the loss or damage to the
Company within 60 (in words: sixty) days after the day the
New Partner has become aware of a Breach or Non-Fulfilment;
12.4.4. is specifically, fairly and fully disclosed in writing to
the New Partner before the Signing Date;
12.4.5. is covered by means of a reserve in the 1998
Annual Accounts, on the understanding that, for
the application of this Article 12.4.5, reserves
which are (or should be) released after the
First Completion Date shall be added to reserves
which at that instance are found to be
insufficient for the underlying Damage if there
is not definitive insight concerning the
sufficiency of the other reserves;
12.4.6. are solely due to changes in legislation, regulations or
case law after the First Completion Date;
12.4.7. is a consequence of a change after the Completion Date of
the corporate tax structure or the accounting policies of
the Companies;
12.4.8. would not have occurred without an action or
omission after the Completion Date by the New
Partner, the Companies or any person whose
action or omission is attributable to the New
Partner and/or the Companies which bear a
material connection to the Damage;
12.4.9. except as otherwise specifically provided in this Share
Subscription Agreement, if and to the extent it reduces
the tax obligations of the New Partner relating to its
investment in the Company or of the Companies after the
First Completion Date; and
12.4.10. furthermore, if and to the extent that the
alleged Breach or Non Fulfilment is not
submitted by the New Partner to the arbitral
body referred to in article 40 of the
Partnership Agreement within a period of three
months after the written notification by the New
Partner to Existing Partners of the Breach or
Non-Fulfilment.
12.5. The Existing Partners and the Company shall ensure that reasonable
steps are taken to prevent or mitigate Damages which could give
rise to a claim by virtue of this Article 12. If the Damages
concerned are a consequence of or bear connection to a claim from
or liability towards a third party, neither the Existing Partners
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nor the Company shall in the matter of such claim or liability
agree to any terms with the third party without prior written
permission from the New Partner. In addition, the Company shall not
agree to any such terms without prior permission from the Existing
Partners. The Company shall keep the New Partner and the Existing
Partners fully informed of such Damages and of the defense to be
conducted by the Company.
12.6. A Damage claim against the Company in connection with a Breach or
Non-Fulfilment shall not be permitted for any individual claims for
an amount below NLG 1,000,000 (in words: one million Dutch
Guilders) and in any event the aggregate amount of all claims (as
finally determined or agreed) in excess of NLG 1,000,000 (in words:
one million Dutch Guilders) must total more than NLG 50,000,000 (in
words: fifty million Dutch Guilders) before a claim may be lodged
in which case the excess over NLG 50,000,000 (in words: fifty
million Dutch Guilders) shall be payable.
12.7. Under no circumstances shall the aggregate amount of all awards or
Damages awarded or agreed against the Company exceed an amount equal
to 20% (in words: twenty percent) of the Subscription Price.
12.8. The New Partner shall not be entitled to make any claim against the
Company for any Breach or Non-Fulfilment unless notice in writing of
such claim is given prior to 1 May immediately following the first
full Fiscal Year of the Company after the First Completion Date.
12.9. The amount of any award or Damages owed by the Company to the New
Partner shall, at the option of the New Partner, be either paid
directly to the New Partner or subtracted from the unpaid amount of
the Promissory Note referred to in Article 6.3.
12.10. The New Partner irrevocably and unconditionally waives its right to
claim Damages against the Company with respect to Stranded Costs
and/or Legal Action Stranded Costs.
ARTICLE 13 TERMINATION
13.1. If the Partnership Agreement is terminated in accordance with
article 22 of the Partnership Agreement, this Share Purchase
Agreement shall terminate in accordance with its terms.
ARTICLE 14 MISCELLANEOUS
14.1. Articles 19 and 22 through 40 of the Partnership Agreement shall
govern this Share Purchase Agreement.
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IN WITNESS WHEREOF this Share Subscription Agreement has been executed by the
Parties hereto in sixfold on the date set out on page one
SIGNED by
for and on behalf of Provincie Noord Holland
By: J.P.J. Lagrand
SIGNED by
for and on behalf of Gemeente Amsterdam
By: G. ter Horst
SIGNED by
for and on behalf of N.V. Provinciaal en Gemeentelijk Utrechts
Stroomleveringsbedrijf
By: M. ten Klooster
SIGNED by
for and on behalf of Reliant Energy Wholesale Holdings (Europe) Inc.
By: R. Steve Letbetter
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SIGNED by
Reliant Energy Power Generation, Inc.
By: R. Steve Letbetter
SIGNED by
for and on behalf of N.V. Energieproduktiebedrijf UNA
By: P. Koppen de Neve
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Schedules to the Share Subscription Agreement
Schedule 1.1 : Definitions
Schedule 6.2 : Draft Deed of issuance
Schedule 6.3 : Principal Terms of Promissory Note