Exhibit 2
SALES AGENCY AGREEMENT
This Sales Agency Agreement dated October 17, 2001 ("Sales Agency
Agreement") is made between (i) McGarret II, L.L.C. (the "Company"), (ii) Enron
Energy Services, LLC (the "Sponsor"), (iii) Enron North America Corp. (the "Swap
Counterparty"), (iv) CIBC Inc. (the "Series Certificate Holder") and (v)
Canadian Imperial Bank of Commerce (the "Agent"). This Sales Agency Agreement
shall be effective immediately on the drawdown of the Series Tranche with
respect to Series McGarret R.
Recitals:
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1. Hawaii I 125-0 Trust, a Delaware business trust (the "Trust"), Canadian
Imperial Bank of Commerce, as Agent, and the Lenders named therein have entered
into that certain Facility Agreement dated November 20, 2000 (as the same may be
amended, modified or supplemented from time to time, the "Facility Agreement").
2. The principal asset owned by Series McGarret R of the Trust is a
Class B Member Interest in the Company and the principal asset owned by the
Company is a special warrant for the purchase of 8,458,200 shares of common
stock in TNPC, Inc., a Delaware corporation (the "Asset"). The Asset was
assigned to the Company pursuant to the Asset Assignment, which is attached
hereto as Exhibit A, and incorporated herein by reference.
3. It is now the intention of the parties hereto that the Company shall
appoint the Series Certificate Holder, the Swap Counterparty and the Agent as
the Company's sales agents for the purpose of selling the Asset, in each case on
the terms and conditions of this Sales Agency Agreement.
Operative Provisions
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1. Defined Terms. In this Sales Agency Agreement, including the
Recitals, capitalized terms used and not otherwise defined herein have the
meanings set forth in the Second Amended and Restated Limited Liability
Company Agreement of the Company (the "Asset LLC Agreement").
2. Appointment of Series Certificate Holder as Sales Agent. Subject to
the provisions of paragraph 4 below, on the terms and subject to the
conditions of this Sales Agency Agreement and upon the occurrence of a
Series Certificate Holder Appointment Event (as defined below), the Company
hereby appoints the Series Certificate Holder as its sales agent for the
purpose of selling the Asset. The Series Certificate Holder shall not take
any action in its capacity as sales agent hereunder unless one of the
following events has occurred (each such event, a "Series Certificate
Holder Appointment Event"):
(a) the Series Certificate Holder has directed the Trust to
dispose of its Class B Membership Interest pursuant to the procedures
set forth in Section 3.03(b)(iii) of the Asset LLC Agreement and such
procedures fail to result in a sale of the Trust's Class B Membership
Interest, in which case the Series Certificate Holder's appointment
shall commence on the Final Distribution Date;
(b) the appointment of the Swap Counterparty as sales agent
pursuant to paragraph 3 has been terminated as provided in clause
(ii) or (iii) in the last sentence of such paragraph 3, in which case
the Series Certificate Holder's appointment shall commence on the
date the Swap Counterparty is terminated as sales agent; or
(c) the appointment of the Agent as sales agent pursuant to
paragraph 4 has been terminated as provided in clause (ii) or (iii)
in the last sentence of such paragraph 4, in which case the Series
Certificate Holder's appointment shall commence on the date the Agent
is terminated as sales agent.
Any such appointment of the Series Certificate Holder shall terminate
upon the earliest to occur of: (i) the sale of the Asset; (ii) the 60th day
after the Final Distribution Date, if such appointment is the result of the
Series Certificate Holder Appointment Event described in clause (a) above and
the Series Certificate Holder fails to use commercially reasonable efforts to
effect the Disposition of the Asset within such 60 day period (it being
understood that such Disposition need not be under contract or closed within
such 60 day period); and (iii) the date after such 60 day period on which the
Series Certificate Holder ceases to use commercially reasonable efforts to
effect the disposition of the Asset, if such appointment is the result of the
Series Certificate Holder Appointment Event described in clause (a) above.
3. Appointment of Swap Counterparty as Sales Agent. Subject to the
provisions of paragraph 4 below, on the terms and subject to the conditions
of this Sales Agency Agreement and upon the occurrence of a Swap
Counterparty Appointment Event (as defined below) and provided that the
Swap Counterparty has fully performed its obligations under the Total
Return Swap Agreement, the Company hereby appoints the Swap Counterparty as
its sales agent for the purpose of selling the Asset. The Swap Counterparty
shall not take any action in its capacity as sales agent hereunder unless
one of the following events has occurred (each such event, a "Swap
Counterparty Appointment Event"):
(a) the Series Certificate Holder fails to direct the Trust to
dispose of its Class B Member Interest pursuant to the procedures set
forth in Section 3.03(b)(iii) of the Asset LLC Agreement, in which
case the Swap Counterparty's appointment shall commence on the Final
Distribution Date; or
(b) the appointment of the Series Certificate Holder as sales
agent pursuant to paragraph 2 has been terminated as provided in
clause (ii) or (iii) of the last sentence of such paragraph 2, in
which case the Swap Counterparty's appointment shall commence on the
date the Series Certificate Holder is terminated as sales agent.
Any such appointment of the Series Certificate Holder shall terminate
upon the earliest to occur of: (i) the sale of the Asset; (ii) the 60th day
after the Final Distribution Date, if such appointment is the result of the
Swap Counterparty Appointment Event described in clause (a) above and the
Swap Counterparty fails to use commercially reasonable efforts to effect
the Disposition of the Asset within such 60 day period (it being understood
that such Disposition need not be under contract or closed within such 60
day period); and (iii) the date after such 60 day period on which the Swap
Counterparty ceases to use commercially reasonable efforts to effect the
disposition of the Asset, if such appointment is the result of the Swap
Counterparty Appointment Event described in clause (a) above.
4. Appointment of Agent as Sales Agent. On the terms and subject to
the conditions of this Sales Agency Agreement and upon the occurrence of
the Agent Appointment Event (as defined below), the Company hereby appoints
the Agent as its sales agent for the purpose of selling the Asset. The
Agent shall not take any action in its capacity as sales agent hereunder
unless the following event has occurred (the "Agent Appointment Event"):
the Swap Counterparty fails to pay the Floating Payment (as defined in the
Total Return Swap Agreement) to the Trust on any Applicable Payment Date
(as defined in the Total Return Swap Agreement), pursuant to the terms of
the Total Return Swap Agreement with respect to the Series, in which case
the Agent's appointment shall commence on the Final Distribution Date.
Any such appointment of the Agent shall terminate upon the earliest to
occur of: (i) the sale of the Asset; (ii) the 60th day after the Final
Distribution Date, if the Agent fails to use commercially reasonable
efforts to effect the Disposition of the Asset within such 60 day period
(it being understood that such Disposition need not be under contract or
closed within such 60 day period); and (iii) the date after such 60 day
period on which the Agent ceases to use commercially reasonable efforts to
effect the disposition of the Asset.
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5. Sale of Asset; Consent and Agreement by Company. Subject to a
Series Certificate Holder Appointment Event, a Swap Counterparty
Appointment Event or an Agent Appointment Event having occurred, the Series
Certificate Holder, the Swap Counterparty or the Agent, as applicable,
shall be entitled, on behalf of the Company, to negotiate a sale of all or
part of the Asset in accordance with the terms of this Sales Agency
Agreement (a "Sale"); provided that the party directing such Sale shall
have an obligation to conduct such sale in a commercially reasonable
manner. Further, any such Sale shall be made in compliance with all Laws
and in compliance with all legally binding contractual restrictions on
transfer of the Asset. The Company hereby irrevocably consents to and shall
raise no objections against any such Sale and shall take all necessary and
desirable actions in connection with the consummation of any such Sale,
including, without limitation, executing such agreements and documents as
may be reasonably necessary to effectuate such Sale in the form to be
negotiated by the sales agent; provided, however, that no undertakings,
covenants, representations or warranties shall be given by the Company in
connection with any Sale other than (i) a warranty as to due authorization
and execution of the applicable documents, (ii) a warranty that the Company
is a limited liability company duly formed, validly existing and in good
standing, (iii) a warranty as to title to the Asset and (iv) customary
covenants, undertakings, representations or warranties given by sellers in
similar transactions.
6. Sales Proceeds. The documentation executed in connection with any
Sale shall provide that (i) the sales proceeds shall be paid directly to
the Company, and (ii) the Company shall pay all reasonable out-of-pocket
costs and expenses incurred by the sales agent and the Company in
connection with such sale. The Company shall distribute the sale proceeds
in accordance with Section 5.02 of the Asset LLC Agreement.
7. Confidentiality. The contents of this Sales Agency Agreement and
all other documents relating to this Sales Agency Agreement are
confidential and shall not be disclosed to any third party (other than to
brokers or market makers in connection with a proposed Sale), except for
such information (a) as has become generally available to the public, (b)
as may be required or appropriate in any report, statement or testimony
submitted to any regulatory body having or claiming to have jurisdiction
over the relevant party or to the Federal Reserve Board or the FDIC or
similar organizations, (c) as may be required or appropriate in respect to
any summons or subpoena or in connection with any litigation or
proceedings, (d) in order to comply with any Law applicable to the relevant
party; provided that such prospective third party agrees to be bound by the
confidentiality provisions set forth in this paragraph.
8. Indemnification. The Sponsor will, to the fullest extent permitted
under applicable law, indemnify the Series Certificate Holder, the Agent
and the Swap Counterparty (as applicable), and their respective officers,
directors, employees and agents of each of the foregoing (collectively, the
"Sales Agent Indemnitees") from and against all expenses (including
reasonable fees and disbursements of counsel), losses and damages which any
of the Sales Agent Indemnitees may incur as a consequence of or in
connection with the execution or performance of their duties as set forth
herein other than any such loss or damage which results from the gross
negligence or willful misconduct of such Sales Agent Indemnitee. However,
in no event shall the Sponsor have any liability to any Sales Agent
Indemnitee hereunder for any loss or prospective profits or any other
special, punitive, exemplary, consequential, incidental or indirect losses
or damages (in tort, contract or otherwise) unless the relevant Sales Agent
Indemnitee is liable for such damage to a third person and is otherwise
entitled to indemnification by the Sponsor under this Sales Agency
Agreement.
9. No Fees or Commissions. No fee or commission shall be payable by
the Company to the Series Certificate Holder, the Swap Counterparty or the
Agent in connection with this Sales Agency Agreement or any
Sale.
10. Governing Law. This Agreement shall be governed by the law of
the State of New York.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Sales
Agency Agreement on the date first before written.
McGARRET III, L.L.C.
By: Enron Energy Services, LLC, its
Managing Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇, President,
New Business Ventures
ENRON ENERGY SERVICES, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇, President,
New Business Ventures
ENRON NORTH AMERICA CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Managing
Director and
Chief Financial Officer
CIBC INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇
Authorized Signatory
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇
Authorized Signatory
