Common Shares, Par Value $0.01
Per Share
Morgan Stanley
& Co. Incorporated
1585 Broadway
New York, NY 10036
The
entities listed on Schedule I (collectively, the “
Selling Stockholders ”) propose to sell to you (the
“ Underwriter ”) an aggregate of 4,216,871
shares of common stock of NRG Energy, Inc., a Delaware corporation
(the “ Company ”), par value $0.01 per share
(the “ Shares ”). The outstanding shares of
common stock of the Company are hereinafter referred to as the
“ Common Shares .”
The
Company has filed with the Securities and Exchange Commission (the
“ Commission ”) a registration statement,
including a prospectus, on Form S-3 (File No. 333-130549),
relating to the registration of certain securities described
therein, including the Shares. The registration statement as
amended to the date of this Agreement is hereinafter referred to as
the “ Registration Statement ” (for purposes of
this definition, information contained in a form of prospectus or
prospectus supplement that is deemed retroactively to be a part of
the Registration Statement pursuant to Rule 430B under the
Securities Act of 1933, as amended (the “ Securities
Act ”), shall be considered to be included in the
Registration Statement as of the time specified in Rule 430B),
and the related prospectus dated December 21, 2005 in the form
in which it has most recently been filed with the Commission is
hereinafter referred to as the “ Base Prospectus
.” The Base Prospectus, as supplemented by the prospectus
supplement specifically relating to the Shares to be dated November
9, 2006 in the form first used to confirm sales of the Shares (or
in the form first made available to the Underwriter by the Company
to meet requests of purchasers pursuant to Rule 173 under the
Securities Act) is hereinafter referred to as the “
Prospectus ,” and the term “ preliminary
prospectus ” means the Base Prospectus, as supplemented
by the Free Writing Prospectus dated November 9, 2006. For
purposes of this definition, information contained in a form of
prospectus (including a prospectus supplement) that is deemed
retroactively to be a part of the Registration Statement pursuant
to Rule 430B shall be considered to be included in the
Prospectus as of the actual time that form of prospectus (including
a prospectus supplement) is filed with the Commission pursuant to
Rule 424(b) under the Securities Act.
For
purposes of this Agreement, “ free writing prospectus
” has the meaning set forth in Rule 405 under the Securities
Act, and “ Time of Sale Prospectus ” means,
collectively, the Base Prospectus and the Free Writing Prospectus
dated November 9, 2006, together with other free writing
prospectuses, if any, identified in Schedule II hereto, as of
the Applicable Time of Sale (as defined herein), and the
information set forth in Schedule III hereto. As used herein,
the terms “Registration Statement,” “Base
Prospectus,” “preliminary prospectus,”
“Time of Sale Prospectus” and “Prospectus”
shall include the documents, if any, incorporated by reference
therein. The terms “supplement” and
“amendment” and “amend” as used in this
Agreement with respect to the Registration Statement, the Base
Prospectus, the preliminary prospectus, the Time of Sale
Prospectus, Prospectus or any free writing prospectus shall include
any supplement or amendment made by a subsequent filing by the
Company with the Commission pursuant to the Securities Exchange Act
of 1934, as amended (the “ Exchange Act ”), that
is incorporated by reference therein.
1. Representations and Warranties of the Company . The
Company represents and warrants to, and agrees with, the
Underwriter and each Selling Stockholder that:
(a) The
Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before, or
to the knowledge of the Company, threatened by the Commission. The
Company is a well-known seasoned issuer (as defined in
Rule 405 under the Securities Act) eligible to use the
Registration Statement as an automatic shelf registration statement
and the Company has not received notice that the Commission objects
to the use of the Registration Statement as an automatic shelf
registration statement pursuant to Rule 401(g)(2) of the
Securities Act.
(b) (i) Each
document, if any, filed or to be filed pursuant to the Exchange Act
and incorporated by reference in the Time of Sale Prospectus or the
Prospectus complied or will comply when so filed in all material
respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, (ii) each part of
the Registration Statement, when such part became effective, did
not contain, and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading,
(iii) the Registration Statement as of the date hereof does
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (iv) the
Registration Statement and the Prospectus comply, and as amended or
supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations of
the Commission thereunder, (v) the Time of Sale Prospectus
does not, and at the time of each sale of the Shares in connection
with the offering and at the Closing Date (as defined in
Section 4), the Time of Sale Prospectus, as then amended or
supplemented by the Company, if applicable, will not, contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading and
(vi) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not
apply to statements or omissions in the Registration Statement, the
Time of Sale Prospectus or the Prospectus, each as amended or
supplemented, based upon information relating to the Underwriter
furnished to the Company in writing by the Underwriter expressly
for use therein.
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(c) The Company is
not an “ineligible issuer” in connection with the
offering pursuant to Rules 164, 405 and 433 under the
Securities Act. Any free writing prospectus that the Company is
required to file pursuant to Rule 433(d) under the Securities Act
has been, or will be, filed with the Commission in accordance with
the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Each free writing
prospectus that the Company has filed, or is required to file,
pursuant to Rule 433(d) under the Securities Act or that was
prepared by or on behalf of or used or referred to by the Company
complies or will comply in all material respects with the
requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Except for the free
writing prospectuses, if any, identified in Schedule II
hereto, and electronic road shows each furnished to you before
first use, the Company has not prepared, used or referred to, and
will not, without your prior consent, prepare, use or refer to, any
free writing prospectus.
(d) The Company
has been duly incorporated, is validly existing as a corporation in
good standing under the laws of the state of Delaware, has the
corporate power and authority to own its property and to conduct
its business as described in the Time of Sale Prospectus,
Prospectus and Registration Statement and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except (i) to the extent
that the failure to be so qualified or be in good standing would
not have a material adverse effect on the business or result of
operations of the Company and its subsidiaries, taken as a whole (a
“ Material Adverse Effect ”) and (ii) for
jurisdictions not recognizing the legal concepts of good standing
or qualification.
(e) Each domestic
subsidiary of the Company has been duly organized, is validly
existing in good standing under the laws of the jurisdiction of its
organization, has the power and authority to own its property and
to conduct its business as described in the Time of Sale
Prospectus, Prospectus and Registration Statement and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership
or leasing of property requires such qualification, except
(i) to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect on the
Company and its subsidiaries, taken as a whole and (ii) for
jurisdictions not recognizing the legal concepts of good standing
or qualification. Except as set forth in the Registration
Statement, Time of Sale Prospectus and Prospectus, all of the
issued shares of capital stock, or equity interests, as applicable
of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and
(except (i) for directors’ qualifying share 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 of the
Company, Registration Statement, Time of Sale Prospectus and
Prospectus and existing on the date hereof) are owned directly by
the Company, free and clear of all liens, encumbrances, equities or
claims.
(f) This Agreement
has been duly authorized, executed and delivered by the
Company.
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(g) The authorized
capital stock of the Company conforms as to legal matters to the
description thereof contained in each of the Time of Sale
Prospectus, the Prospectus, and the Registration
Statement.
(h) The Common
Shares have been duly authorized and are validly issued, fully paid
and non-assessable.
(i) The execution
and delivery by the Company of, and the performance by the Company
of its obligations under, this Agreement will not contravene
(i) any provision of the amended and restated certificate of
incorporation or the amended and restated by-laws of the Company,
(ii) or any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company
and its subsidiaries, taken as a whole, (iii) or any
applicable law or judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any
subsidiary except that, in the case of clauses (ii) and (iii),
for any contravention that would not have a Material Adverse Effect
on the Company. No consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this
Agreement except (x) for such consent, approvals,
authorizations, orders or qualifications that have been obtained or
where failure to do so would not have a Material Adverse Effect on
the Company and (y) for the registration of the Shares under
the Securities Act and such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer
and sale of the Shares.
(j) There has not
occurred any material adverse change, or any development involving
a prospective material adverse change, in the condition, financial
or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth
in the Time of Sale Prospectus, the Prospectus, and the
Registration Statement.
(k) There are no
legal or governmental proceedings pending or, to the knowledge of
the Company, threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject other than
proceedings that are disclosed or described in all material
respects in the Registration Statement, Time of Sale Prospectus, or
the Prospectus and proceedings that are not expected to have a
Material Adverse Effect, and there are no statutes, regulations,
contracts or other documents that are required to be described in
the Registration Statement, Time of Sale Prospectus, or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described in all material respects or filed, or
incorporated by reference as required.
(l) Each
preliminary prospectus supplement filed pursuant to Rule 424
under the Securities Act, complied when so filed in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(m) The Company is
not, and after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof as described in the
Prospectus will not be, required to register as an
“investment company” as such term is defined in the
Investment Company Act of 1940, as amended.
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(n) Except as set
forth in the Registration Statement, Time of Sale Prospectus, or
Prospectus, each subsidiary of the Company that is subject to
regulation as a “public utility” as such term is
defined in the Federal Power Act (“ FPA ”) and
that makes sales of energy or capacity that are not pursuant to a
state regulatory authority’s implementation of PURPA (as
defined below) has an order from the Federal Energy Regulatory
Commission, such order not subject to any pending challenge,
investigation, complaint, or other proceeding (other than generic
proceedings generally applicable in the industry)
(i) authorizing such subsidiary to engage in wholesale sales
of electricity and, to the extent permitted under its market-based
rate tariff, other transactions at market-based rates and
(ii) granting such waivers and blanket authorizations as are
customarily granted to entities with market-based rate authority,
including blanket authorizations to issue securities and to assume
liabilities pursuant to Section 204 of the FPA.
(o) With respect
to any subsidiary that purports to own a “Qualifying
Facility” (“ QF ”) as defined under the
Public Utility Regulatory Policies Act and the current rules and
regulations promulgated thereunder (“ PURPA ”),
such facility is a QF under PURPA.
(p) Except as
disclosed in the Registration Statement, the Time of Sale
Prospectus, or Prospectus, and except for such matters as would
not, individually or in the aggregate, result in a Material Adverse
Effect, the Company and its subsidiaries (1) are conducting
and have conducted their businesses, operations and facilities in
compliance with Environmental Laws (as defined below);
(2) have duly obtained, possess, maintain in full force and
effect, and have fulfilled and performed all of their obligations
under any and all permits, licenses or registrations required under
Environmental Law (“ Environmental Permits ”);
(3) have not received any notice from a governmental authority
or any other third party alleging any violation of Environmental
Law or liability thereunder; (4) are not subject to any
pending or, to the best knowledge of the Company or any of its
subsidiaries, threatened claim in writing or other legal proceeding
under any Environmental Laws against the Company or any of its
subsidiaries; and (5) do not have knowledge of any applicable
Environmental Laws, or any unsatisfied conditions in an
Environmental Permit, that, individually or in the aggregate, can
reasonably be expected to require any material capital expenditures
for either the installation of new pollution control equipment, or
a switch in a project’s fuel or any other material
modification of current operations in order to maintain the
Company’s or the subsidiaries’ compliance with
Environmental Law. As used in this paragraph, “
Environmental Laws ” means any and all applicable
foreign, federal, state and local laws and regulations, or any
enforceable administrative or judicial interpretation thereof,
relating to pollution or the protection of human health or the
environment, including, without limitation, those relating to
(i) emissions, discharges or releases of Hazardous Substances
into ambient air, surface water, groundwater or land, (ii) the
generation, manufacture, processing, distribution, use, treatment,
storage, disposal, release, transport or handling of, or exposure
to, Hazardous Substances, (iii) the protection of wildlife or
endangered or threatened species, or (iv) the investigation,
remediation or cleanup of any Hazardous Substances. As used in this
paragraph, “ Hazardous Substances ” means
pollutants, contaminants, hazardous substances, materials or
wastes, petroleum, petroleum products and their breakdown
constituents, or any other chemical substance regulated under
Environmental Laws.
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(q) Except as
described in the Time of Sale Prospectus, the Prospectus, and the
Registration Statement, the Company has not sold, issued or
distributed any shares of Common Stock during the six-month period
preceding the date hereof, including any sales pursuant to
Rule 144A under, or Regulation D or S of, the Securities
Act, other than shares issued pursuant to employee benefit plans,
qualified stock option plans or other employee compensation plans
or pursuant to outstanding options, rights or warrants.
(r) Neither NRG
nor any of its subsidiaries has taken nor will take through the
Closing Date, directly or indirectly, any action which is designed
to or which has constituted or which might reasonably be expected
to cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Shares, except for the share repurchases completed pursuant to
NRG’s publicly announced capital allocation
program.
2. Representations and Warranties of the Selling
Stockholders .
(a) Each Selling
Stockholder severally represents and warrants to, and agrees with
the Underwriter, as of the date hereof and as of the Closing Date,
that:
(i)
All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Stockholder of this
Agreement, and for the sale and delivery of the Shares to be sold
by such Selling Stockholder hereunder, have been obtained; and such
Selling Stockholder has full right, power and authority to enter
into this Agreement and to sell, assign, transfer and deliver the
Shares to be sold by such Selling Stockholder hereunder;
(ii)
The sale of the Shares to be sold by such Selling Stockholder
hereunder, the compliance by such Selling Stockholder with all of
the provisions of this Agreement and the performance by such
Selling Stockholder of its obligations under this Agreement
(a) 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 statute, indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is
bound or to which any of the property or assets of such Selling
Stockholder is subject, nor (b) will such action result in any
violation of the provisions of the Certificate of Incorporation or
By laws of such Selling Stockholder if such Selling Stockholder is
a corporation, the Limited Liability Company Agreement of such
Selling Stockholder if such Selling Stockholder is a limited
liability company or the Partnership Agreement of such Selling
Stockholder if such Selling Stockholder is a partnership or any
statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over such Selling
Stockholder or the property of such Selling Stockholder;
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(iii)
Such Selling Stockholder has, and immediately prior to the Closing
Date such Selling Stockholder will have, good and valid title to
the Shares to be sold by such Selling Stockholder hereunder, free
and clear of all liens, encumbrances, equities or claims, and upon
purchase of such Shares and payment therefor pursuant hereto, the
Underwriter will acquire a good and valid security entitlement with
respect to such Shares free and clear of any liens, encumbrances,
equities or claims;
(iv)
Such Selling Stockholder has not taken and will not take through
the Closing Date, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or
resale of the Shares;
(v)
To the extent that any statements or omissions made in the
Registration Statement, the Prospectus, any Free Writing Prospectus
or any amendment or supplement thereto are made in reliance upon
and in conformity with written information relating to the Selling
Stockholder furnished to the Company by such Selling Stockholder
expressly for use therein, such information did and will, conform
in all material respects to the requirements of the Act and the
rules and regulations of the Commission thereunder and will not
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading, it being understood and
agreed that such information consists only of such Selling
Stockholder’s name, address and number of Shares beneficially
owned and offered as set forth under “Selling
Stockholders” in the Registration Statement and the
Prospectus;
(vi)
In order to document the Underwriter’s compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to
or at the Time of Delivery a properly completed and executed United
States Treasury Department Form W-9 (if such Selling Stockholder is
a United States person, as defined under Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended) or Form W-8 (if
such Selling Stockholder is not a United States person, as defined
under Section 7701(a)(30) under the Internal Revenue Code of
1986, as amended) (or other applicable form or statement specified
by Treasury Department regulations in lieu thereof);
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3. Agreements to Sell and Purchase. Each Selling
Stockholder, severally and not jointly, hereby agrees to sell to
the Underwriter the number of shares set forth opposite the name of
such Selling Stockholder on Schedule I, and the Underwriter,
upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, hereby
agrees to purchase such Shares from such Selling Stockholder at
$54.57 per share (the “ Purchase Price
”).
The Company hereby
agrees that, without the prior written consent of the Underwriter,
it will not, during the period ending 60 days after the date
of this Agreement, (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly
any Common Shares or any securities convertible into or exercisable
or exchangeable for Common Shares, or (ii) enter into any swap
or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common
Shares, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common
Shares or such other securities, in cash or otherwise. Each of the
parties hereto hereby acknowledges that the foregoing sentence does
not apply to repurchases of shares by a Finance Subsidiary or any
other share repurchase program by the Company for its Common Stock
or to sales of stock in connection with its previously announced
capital allocation program. The parties hereto agree that this
paragraph satisfies the requirements of Section 4.7 of the
Investor Rights Agreement, dated as of February 2, 2006 (the
“ Investor Rights Agreement ”), by and among the
Company and certain stockholders of the Company with respect to the
Shares.
The restrictions
contained in the preceding paragraph shall not apply to
(A) the issuance by the Company of Common Stock upon the
exercise of an option or warrant or the conversion of a security
outstanding on the date hereof, (B) grants by the Company of
employee stock options or other equity-based compensation pursuant
to the terms of a plan in effect on the date of this Agreement,
(C) transactions by persons other than the Company relating to
Common Stock, (D) the filing by the Company of a shelf registration
statement with respect to Common Stock or securities convertible
into or exercisable or exchangeable for Common Stock or
(E) actions u
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