3.625% Perpetual Convertible
Preferred Stock,
par value $0.01 per share
WHEREAS, NRG
Energy, Inc., a Delaware corporation (the “ Company
”), proposes, upon the terms and considerations set forth
herein, to issue and sell to Credit Suisse First Boston Capital
LLC, as the purchaser (the “ Purchaser ”),
250,000 shares of its 3.625% Perpetual Convertible Preferred Stock,
par value $0.01 per share (the “ Shares ”);
and
WHEREAS, the
Shares will have the terms and provisions contained in the
Certificate of Designations to be filed with the Delaware Secretary
of State as of the date hereof (the “ Certificate of
Designations ”); and
WHEREAS, the
Shares will be convertible into cash and shares of NRG’s par
value $.01 Common Stock (the “ Common Stock ”)
in accordance with the Certificate of Designations; and
WHEREAS, the
Shares will be offered and sold to the Purchaser without
registration under the Securities Act of 1933, as amended (the
“ Act ”), in reliance on an exemption pursuant
to Section 4(2) under the Act;
NOW, THEREFORE,
this Stock Purchase Agreement (this “ Agreement
”), dated as of August 10, 2005, is entered into to confirm
the agreement concerning the purchase of the Shares by the
Purchaser from the Company.
1.
Representations, Warranties and Agreements of the Company .
The Company represents, warrants and agrees, as of the date hereof
and as of the Closing Date (as defined below), as
follows:
(a) The
Company’s Annual Report on Form 10-K most recently filed with
the Securities and Exchange Commission (the “
Commission ”) and all subsequent reports
(collectively, the “ Exchange Act Reports ”)
which have been filed by the Company with the Commission or sent to
stockholders pursuant to the Securities and Exchange Act of 1934,
as amended (the “ Exchange Act ”), do not
include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. Such documents, when they were filed with the
Commission, conformed in all material respects to the requirements
of the Exchange Act and the rules and regulations of the Commission
thereunder.
(b) When
the Shares are issued and delivered pursuant to this Agreement,
such Shares will not be of the same class (within the meaning of
Rule 144A under the Act) as securities of the Company that are
listed on a national securities exchange registered under
Section 6 of the Exchange Act or that are quoted in a United
States automated inter-dealer quotation system.
(c) Neither
the Company nor any of its subsidiaries is, nor after giving effect
to the sale of the Shares and upon application of the proceeds
thereof will be, an “investment company” or a company
“controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended.
(d) The
purchase of the Shares pursuant hereto is exempt from the
registration requirements of the Act. No form of general
solicitation or general advertising within the meaning of
Regulation D (including, but not limited to, advertisements,
articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television
or radio, or any seminar or meeting whose attendees have been
invited by any general solicitation or general advertising) was
used by the Company or any of its representatives in connection
with the sale of the Shares.
(e) The
Company and each of its subsidiaries have been duly organized and
are validly existing and in good standing under the laws of their
respective jurisdictions of organization, are duly qualified to do
business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires
such qualification (except such failures to qualify as are not,
either individually or in the aggregate, material to the Company
and its subsidiaries taken as a whole), and have all power and
authority necessary to own or hold their respective properties and
to conduct the businesses in which they are engaged.
(f) The
Company has the capitalization as set forth in the Exchange Act
Reports, and all of the issued shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid and non-assessable; and, except as disclosed in the Exchange
Act Reports, all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and (except
(i) for directors’ qualifying shares or foreign national
qualifying capital stock, and (ii) as pledged to secure
indebtedness of the Company and/or its subsidiaries pursuant to
credit facilities, indentures and other instruments evidencing
indebtedness as set forth in the Exchange Act Reports and existing
on the date hereof) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims.
(g) The
Company has all requisite corporate power and authority to issue
and sell the Shares. The Shares have been duly authorized by the
Company and, when issued and upon delivery to the Purchaser against
payment therefor in accordance with the terms hereof, will be
validly issued, fully paid and nonassessable, and will not be
subject to any preemptive or similar rights.
(h) The
Company has all requisite corporate power and authority to enter
into this Agreement and the Credit Agreement Amendment (as defined
below). This Agreement has been duly authorized, executed and
delivered by the Company and is the legally valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms.
(i) The
issue and sale of the Shares, the compliance by the Company with
all of the provisions of the Certificate of Designations, the First
Amendment, dated as of August 5, 2005 (the “ Credit
Agreement Amendment ”), to the Credit Agreement, dated as
of December 23, 2003, as amended and restated as of
December 24, 2004, by and among the Company, NRG Power
Marketing, Inc., and the lenders party thereto (as further amended
by the Credit Agreement Amendment, the “ Credit
Agreement ”), and this Agreement and the consummation of
the transactions contemplated hereby and thereby (i) will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its
2
subsidiaries is
subject, (ii) will not result in any violation of the
provisions of the charter, by-laws or applicable organizational
documents of the Company or any of its subsidiaries or
(iii) will not violate any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets; and no consent, approval, authorization
or order of, or filing, registration or qualification with any such
court or governmental agency or body is required for the issue and
sale of the Shares, the consummation by the Company of the
transactions contemplated by this Agreement, the Certificate of
Designations or the Credit Agreement Amendment, except (x) in
the cases of clauses (i) and (iii) only, for such
defaults, violations and failures as would not reasonably be
expected to have, either individually or in the aggregate, a
material adverse change, or any development involving a prospective
material adverse change, in or affecting the management, condition,
financial or otherwise, stockholders’ equity, results of
operations, business or prospects of the Company and its
subsidiaries, taken as a whole (a “Material Adverse
Effect”); (y) such consent, approvals, authorizations,
orders, filings, registrations or qualifications that have been
obtained or where failure to do so would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse
Effect; and (z) such consents, approvals, authorizations,
orders, filings, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase of the Shares by the Purchaser.
(j) Except
as disclosed in the Exchange Act Reports, there are no contracts,
agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities
of the Company (other than the registration rights agreements
relating to the Company’s 8% Second Priority Senior Secured
Notes due 2013 (the “ Secured Notes ”) and the
Company’s outstanding 4.0% Perpetual Convertible Preferred
Stock) owned or to be owned by such person or to require the
Company to include such securities in the securities being
registered pursuant to any registration statement filed by the
Company under the Act.
(k) During
the six-month period preceding the date of this Agreement, none of
the Company or any other person acting on behalf of the Company has
offered or sold to any person any Shares, or any securities of the
same or a similar class as the Shares, other than Shares sold to
the Purchaser hereunder. The Company will take reasonable
precautions designed to insure that any offer or sale, direct or
indirect, in the United States or to any U.S. person (as defined in
Rule 902 under the Act), of any Shares or any substantially similar
security issued by the Company, within six months subsequent to the
Closing Date, is made under restrictions and other circumstances
reasonably designed not to affect the status of the sale of the
Shares to the Purchaser contemplated by this Agreement as a
transaction exempt from the registration provisions of the Act;
including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Act.
(l) Except
as disclosed in the Exchange Act Reports, neither the Company nor
any of its subsidiaries has sustained, since the date of the latest
audited financial statements included in the Exchange Act Reports,
any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree; and, since such date, there has not been
any change in the stockholders’ equity or long-term debt of
the Company or any of its subsidiaries or Material Adverse
Effect.
(m) The
financial statements (including the related notes and supporting
schedules) included in the Exchange Act Reports present fairly the
financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved.
3
(n) Each
of KPMG LLP and PricewaterhouseCoopers LLP, each of whom has
certified certain financial statements of the Company and whose
report appears in the Exchange Act Reports, was an independent
registered public accounting firm with respect to the Company
within the meaning of the Securities Act and the applicable rules
and regulations thereunder adopted by the Commission and the Public
Company Accounting Oversight Board during the periods covered by
the financial statements on which they reported contained in the
Exchange Act Reports.
(o) Except
as disclosed in the Exchange Act Reports, the Company and each of
its subsidiaries has good and marketable title in fee simple to all
real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens,
encumbrances and defects, except as do not materially affect the
value of the property of the Company and its subsidiaries taken as
a whole and do not materially interfere with the use made and
proposed to be made of such property by the Company or any of its
subsidiaries; and all real property and buildings held under lease
by the Company or any of its subsidiaries are held by them under
valid, subsisting and enforceable leases, with such exceptions as
are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company
or any of its subsidiaries.
(p) Except
as disclosed in the Exchange Act Reports, the Company and each of
its subsidiaries carry, or are covered by, insurance in such
amounts and covering such risks as is adequate for the conduct of
their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar
businesses in similar industries, except as would not reasonably be
expected to have, either individually or in the aggregate, a
Material Adverse Effect.
(q) Except
as disclosed in the Exchange Act Reports, the Company and each of
its subsidiaries (i) own or possess adequate rights to use all
material patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service mark registrations,
copyrights and licenses necessary for the conduct of their
respective businesses and (ii) have no reason to believe that
the conduct of their respective businesses will conflict with, and
have not received any notice of any claim of conflict with, any
such rights of others, except with respect to clause (ii) as
would not reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect.
(r) Except
as disclosed in the Exchange Act Reports, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject that, if
determined adversely to the Company or any of its subsidiaries,
could have a Material Adverse Effect, and to the best of the
Company’s knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others.
(s) No
relationship, direct or indirect, that would be required to be
described in a Company’s registration statement pursuant to
Item 404 of Regulation S-K, exists between or among the
Company on the one hand, and the (i) directors or officers,
(ii) nominees for directors, (iii) stockholders owning of
record or beneficially owning more than 5% of any class of the
Company’s voting securities, or (iv) any immediate
family member of any of the foregoing, of the Company, on the other
hand, that has not been described in the Exchange Act
Reports.
(t) No
labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company or any of
its subsidiaries, is imminent that could be expected to have a
Material Adverse Effect.
4
(u) The
Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder (“ ERISA
”); no “reportable event” (as defined in ERISA)
has occurred with respect to any “pension plan” (as
defined in ERISA) for which the Company would have any liability;
the Company has not incurred and does not expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any “pension plan” or
(ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published
interpretations thereunder (the “ Code ”); and
each “pension plan” for which the Company would have
any liability that is intended to be qualified under Section 401(a)
of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would
cause the loss of such qualification.
(v) Except
as disclosed in the Exchange Act Reports, the Company has filed all
federal, state and local income and franchise tax returns required
to be filed through the date hereof and has paid all taxes due
thereon (except where any payment is being contested in good
faith), and no tax deficiency has been determined adversely to the
Company or any of its subsidiaries that has had (nor does the
Company have any knowledge of any tax deficiency that, if
determined adversely to the Company or any of its subsidiaries,
might have) or could reasonably be expected to have a Material
Adverse Effect.
(w) Except
as disclosed in the Exchange Act Reports, since December 31,
2004 through the date hereof, the Company has not (i) issued
or granted any securities (other than the Secured Notes and
registered notes offered in exchange therefor)), (ii) incurred
any liability or obligation, direct or contingent, other than
liabilities and obligations that were incurred in the ordinary
course of business, (iii) entered into any transaction not in
the ordinary course of business or (iv) declared or paid any
dividend on its capital stock.
(x) Except
as disclosed in the Exchange Act Reports, the Company
(i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls that provide
reasonable assurance that (A) transactions are executed in
accordance with management’s authorization, (B) transactions
are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets,
(C) access to its assets is permitted only in accordance with
management’s authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(y) Except
as disclosed in the Exchange Act Reports, neither the Company nor
any of its subsidiaries (i) is in violation of its charter,
by-laws or applicable organizational documents, (ii) is in
default in any material respect, and no event has occurred that,
with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term,
covenant, condition or other obligation contained in any material
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject or
(iii) is in violation in any material respect of any law,
ordinance, governmental rule, regulation or court decree to which
it or its property or assets may be subject or has failed to obtain
or maintain any material license, permit, certificate, franchise or
other governmental authorization or permit necessary to the
ownership of its property or to the conduct of its
business.
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