AGREEMENT
WITH RESPECT TO
THE NOTE PURCHASE AGREEMENT
This
Agreement with respect to the Note Purchase Agreement (this “
Agreement ”) is made as of this 19th day of December,
2008 among NRG Common Stock Finance II LLC, a Delaware limited
liability company (“ Issuer ”), NRG Energy,
Inc., a Delaware corporation (the “ Company ”),
Credit Suisse International (together with its successor and
assigns, “ Purchaser ”) and Credit Suisse
Securities (USA) LLC (“ Agent ”), solely in
its capacity as agent for Purchaser and Issuer.
WHEREAS,
Issuer, Purchaser and Agent are party to the Note Purchase
Agreement dated August 4, 2006 (the “ Note Purchase
Agreement ”), whereby Issuer agreed to sell and Purchaser
agreed to purchase Issuer’s promissory notes on the terms and
conditions set forth therein;
WHEREAS,
Issuer, Purchaser and Agent have heretofore entered into a Note
Purchase Amendment Agreement dated as of December 19, 2008
relating to the Note Purchase Agreement (the “ First
Amendment Agreement ”) (and, for the avoidance of doubt,
references to the Note Purchase Agreement herein shall mean the
Note Purchase Agreement as modified or amended by such First
Amendment Agreement);
WHEREAS,
Issuer and Purchaser wish to effect certain transactions in
connection with the Note Purchase Agreement on the terms and
conditions set forth herein;
NOW,
THEREFORE, in consideration of their mutual covenants herein
contained, the parties hereto, intending to be legally bound,
hereby mutually covenant and agree as follows:
SECTION
1 . Definitions. As used herein, capitalized terms not
defined herein shall have the meaning ascribed to them in, or as
provided in, the Note Purchase Agreement.
SECTION
2. Notice of Increased Costs . (a) Purchaser shall
provide notice (an “ Increased Costs Notice ”)
to Issuer following the end of each calendar month during which an
Increased Cost of Stock Borrow, Increased Cost or Other Increased
Cost of Hedging in respect of the Notes occurred or was continuing
of the amount in U.S. dollars of each such Increased Cost of Stock
Borrow, Increased Cost and/or Other Increased Cost of Hedging for
such month. Such Increased Costs Notice shall specify the nature
and amount of the Increased Cost of Stock Borrow, Increased Cost
and/or Other Increased Cost of Hedging and shall provide a
reasonably detailed basis for the determination thereof. In
addition, in respect of any Increased Cost of Stock Borrow
specified in such
Increased
Costs Notice, Purchaser shall provide notice of (i) the
reduction of the Threshold Price for any Note that the Calculation
Agent would apply pursuant to Section 15 of the Note Purchase
Agreement to account for such Increased Cost of Stock Borrow (the
“ Threshold Price Adjustment ”) and (ii) an
amount of cash in U.S. dollars (the “ Increased Cost of
Stock Borrow Amount ”) relating to such Increased Cost of
Stock Borrow that Issuer may elect to pay in lieu of such Threshold
Price Adjustment. Purchaser shall respond in good faith to good
faith inquiries or disputes from Issuer regarding the Increased
Cost of Stock Borrow, Threshold Price Adjustment, Increased Cost
and/or Other Increased Cost of Hedging set forth in an Increased
Costs Notice. Notwithstanding the foregoing, Issuer may, in its
reasonable judgment, designate as an Increased Cost of Stock Borrow
or an Other Increased Cost of Hedging, as the case may be, any
amount or portion thereof specified by Purchaser as an Other
Increased Cost of Hedging or an Increased Cost of Stock Borrow in
such Increased Costs Notice that Issuer reasonably believes should
more properly have been characterized as an Increased Cost of Stock
Borrow or an Other Increased Cost of Hedging, as the case may be,
by providing notice to Purchaser of such designation by 5:00 PM,
New York City time, on the second Business Day immediately
following the date of the relevant Increased Costs Notice (such
time on such Business Day, the “ Notice Deadline
”), in which case such Other Increased Cost of Hedging or
Increased Cost of Stock Borrow shall be considered an Increased
Cost of Stock Borrow or an Other Increased Cost of Hedging, as the
case may be, for purposes of this Agreement.
(b) By
5:00 PM, New York City time, on the third Business Day immediately
following the date of each Increased Costs Notice, Issuer shall
(i) if Issuer so elects pursuant to Section 2(a), pay the
Increased Cost of Stock Borrow Amount in immediately available
funds by wire transfer to an account designated by Purchaser and
(ii) either (A) pay the aggregate amount of any Increased
Cost and/or Other Increased Cost of Hedging specified in such
Increased Costs Notice (such amount, the “ Other Increased
Cost Amount ”) in immediately available funds by wire
transfer to an account designated by Purchaser or (B) subject
to satisfaction of the conditions set forth in Section 3, in
lieu of paying the Other Increased Cost Amount in cash, deliver
shares of NRG Common Stock (“ Delivered Shares
”) to Purchaser pursuant to Section 3. For the avoidance
of doubt, if Issuer pays the Increased Cost of Stock Borrow Amount
as set forth in this Section 2(b), then the Threshold Price
Adjustment described in such Increased Costs Notice shall not take
effect, and if Issuer does not make such payment by the time
required, then such Threshold Price Adjustment shall be effective
on the terms set forth in such Increased Costs Notice. The parties
also acknowledge, for the avoidance of doubt, that the terms of the
Notes do not provide for any adjustment to the Threshold Price in
respect of an Increased Cost or an Other Increased Cost of
Hedging.
SECTION
3 . Delivery of Shares . If Issuer elects in connection with
any Increased Costs Notice to deliver Delivered Shares in lieu of
paying the Other Increased Cost Amount in cash, then the following
provisions apply.
2
(a) Issuer
may elect to deliver Delivered Shares in lieu of paying the Other
Increased Cost Amount in cash only if Issuer notifies Purchaser of
its irrevocable election to do so by the Notice Deadline and all
Delivered Shares are, at the time of such delivery, covered by an
effective registration statement of the Company for immediate
resale by Purchaser (such registration statement, including the
related prospectus, the “ Registration Statement
”) in form and content commercially reasonably satisfactory
to Purchaser, and:
(i)
Purchaser (or an affiliate of Purchaser designated by Purchaser)
shall have been afforded a reasonable opportunity to conduct a due
diligence investigation with respect to the Company that is
customary in scope for underwritten offerings of equity securities
and that yields results that are commercially reasonably
satisfactory to Purchaser or such affiliate, as the case may be, in
its discretion; and
(ii)
Purchaser (or an affiliate of Purchaser designated by Purchaser)
and the Company shall have entered into an agreement (a “
Registration Agreement ”) on commercially reasonable
terms in connection with the public resale of such Delivered Shares
by Purchaser or such affiliate substantially similar to
underwriting a
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