Document:

EX-10.1

 

Exhibit 10.1

NRG ENERGY, INC.

Common Shares, Par Value $0.01 Per Share

UNDERWRITING AGREEMENT

August 9, 2006

 

 

August 9, 2006

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, NY 10036

Ladies and Gentlemen:

     The entities listed on Schedule I (collectively, the “Selling Stockholders”) propose to sell
to you (the “Underwriter”) an aggregate of 16,852,481 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 August
15, 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 August
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 August 9, 2006, together with the 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.

     (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

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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

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be, required to register as an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.

     (n) Except as set forth in the Registration Statement, the 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”) has an order from the
Federal Energy Regulatory Commission, 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 or any of 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,

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materials or wastes, petroleum, petroleum products and their breakdown constituents, or
any other chemical substance regulated under Environmental Laws.

     (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 and nor will any take, 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.

     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, 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);

     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,

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hereby agrees to purchase such Shares from such Selling Stockholder at $48.41 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 and, for the avoidance of doubt,
any public sale or distribution of Common Shares by certain affiliates of Credit Suisse Securities
(USA) LLC in connection with the Company’s previously announced capital allocation program is not
prohibited by such Section 4.7.

     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 of which the Underwriter has been advised in writing, (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 undertaken by the Company to comply with the terms of the Investor
Rights Agreement.

     4. Payment and Delivery. Payment for the Shares to the Selling Stockholders shall be made in
Federal or other funds immediately available in New York City against delivery of such shares for
the account of the Underwriter at 10:00 a.m., New York City time, on August 15, 2006 or at such
other time on the same or such other date, not later than August 20, 2006, as shall be designated
in writing by the Underwriter. The date and time of the payment, in each case, will be referred to
as the “Closing Date.”

     The Shares shall be registered in such names and in such denominations as the Underwriter
shall request in writing not later than one full business day prior to the Closing Date. The
Shares shall be delivered to the Underwriter on the Closing Date for their account, with any
transfer taxes payable in connection with the transfer of the Shares to the Underwriter duly paid,
against payment of the Purchase Price therefor. The Underwriter acknowledges that the Shares being
delivered by the Selling Stockholders will be delivered via book-entry transfer to the
Underwriter’s account at DTC by a participant in DTC whose name appears on a security position
listing as the owner of such Shares. The documents to be delivered on the Closing Date

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by or on behalf of the parties hereto will be delivered at the offices of Latham & Watkins
LLP, 885 Third Avenue, New York, New York 10022 (the “Closing Location”), and the Shares will be
delivered at the office of DTC or its designated custodian (the “Designated Office”) on the Closing
Date.

     5. Conditions to Underwriter’s Obligations. The obligations of the Underwriter are subject to
the following conditions:

     (a) Subsequent to the execution and delivery of this Agreement and prior to the Closing
Date there shall not have occurred (i) any downgrading, nor shall the Company have received
any notice from any “nationally recognized statistical rating organization,” as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act of any intended or potential
downgrading or of any review for a possible change that does not indicate the direction of
the possible change, in the rating accorded the Company or any of the securities of the
Company or any of its subsidiaries or in the rating outlook for the Company; or (ii) any
change, or any development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or results of operations of the Company and its
combined subsidiaries, taken as a whole, from that set forth in the Time of Sale Prospectus
that, in the judgment of the Underwriter, is material and adverse and that makes it, in the
judgment of the Underwriter, impracticable to market the Shares on the terms and in the
manner contemplated in the Time of Sale Prospectus.

     (b) The Underwriter shall have received on the Closing Date a certificate, dated the
Closing Date and signed by the Chief Executive Officer or Chief Financial Officer of the
Company, to the effect set forth in Section 5(a) and to the effect that the representations
and warranties of the Company contained in this Agreement that are not qualified by
materiality are true and correct in all material respects, and that the representations and
warranties of the Company contained in this Agreement that are qualified by materiality are
true and correct, in each case, as of the Closing Date and that the Company has complied
with all of the agreements and satisfied all of the conditions on its part to be performed
or satisfied hereunder on or before the Closing Date.

     (c) The Underwriter shall have received on the Closing Date an opinion and a negative
assurance letter from Kirkland & Ellis LLP, outside counsel for the Company, dated the
Closing Date, reasonably acceptable to the Underwriter, covering the matters referred to in
Exhibit A-1. Additionally, Tim O’Brien, General Counsel of the Company shall provide an
opinion to the Underwriter, dated the Closing Date, reasonably acceptable to the
Underwriter, covering the matters referred to in Exhibit A-2. The opinion and a negative
assurance letter of Kirkland & Ellis LLP shall be rendered to the Underwriter at the request
of the Company and shall so state therein.

     (d) The Underwriter shall have received on the Closing Date an opinion and a negative
assurance letter of Latham & Watkins LLP, counsel for the Underwriter, in form and substance
reasonably acceptable to the Underwriter.

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     (e) The Underwriter shall have received on the Closing Date an opinion of Simpson
Thacher & Bartlett LLP, counsel for the Selling Stockholders, covering the matters referred
to in Exhibit A-3 and reasonably acceptable to the Underwriter.

     (f) The Underwriter shall have received, on each of the date of this Agreement and on
the Closing Date, letters dated the respective dates of delivery thereof, in form and
substance satisfactory to the Underwriter, from KPMG LLP and PricewaterhouseCoopers LLP,
independent public accountants, containing statements and information of the type ordinarily
included in accountants’ “comfort letters” to underwriters with respect to the financial
statements and certain financial information contained in the Time of Sale Prospectus and
the Prospectus; provided that the letters delivered on the Closing Date shall use a “cut-off
date” not earlier than the date hereof.

     (g) At the Closing Date, the Underwriter shall have received a certificate of an
authorized representative of the Selling Stockholders, dated the Closing Date, to the effect
that the representations and warranties of the Selling Stockholders set forth in Section
2(a) hereof that are not qualified by materiality are true and correct in all material
respects, and that the representations and warranties of the Selling Stockholders contained
in this Agreement that are qualified by materiality are true and correct, in each case, as
of the Closing Date, and that each of the Selling Stockholders has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date.

     (h) On or prior to the Closing Date, the Underwriter shall have received a properly
completed and executed United States Treasury Department Form W-9 (or other applicable form
or statement specified by Treasury Department regulations in lieu thereof) from each Selling
Stockholder pursuant to Section 2(a)(vi).

     (i) The delivery to the Underwriter on the Closing Date of such documents as the
Underwriter may reasonably request with respect to the good standing of the Company and
other matters related to the delivery of the Shares.

     6. Covenants of the Company and the Selling Stockholders.

     (a) In consideration of the agreements of the Underwriter herein contained, the Company
covenants with the Underwriter as follows:

     (i) To furnish to the Underwriter, without charge, five conformed
copies of the Registration Statement (including exhibits thereto and
documents incorporated by reference) and to furnish to the Underwriter,
without charge, prior to 10:00 a.m. New York City time on the business day
next succeeding the date of this Agreement and during the period mentioned
in Section 6(d) below, as many copies of the Time of Sale Prospectus, the
Prospectus, any documents incorporated therein by reference and any
supplements and amendments thereto or to the Registration Statement as the
Underwriter may reasonably request.

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     (ii) Before amending or supplementing the Registration Statement, the
Time of Sale Prospectus or the Prospectus (including by causing an
additional document to be incorporated by reference into the Registration
Statement, the Time of Sale Prospectus or the Prospectus), to furnish to the
Underwriter a copy of each such proposed amendment or supplement and not to
file any such proposed amendment or supplement to which the Underwriter
reasonably objects, unless in each case at such time all of the Shares have
been sold as contemplated in this Agreement, and to file with the Commission
within the applicable period specified in Rule 424(b) under the Securities
Act any prospectus required to be filed pursuant to such Rule.

     (iii) Unless in each case at such time all of the Shares have been sold
as contemplated in this Agreement, to furnish to the Underwriter a copy of
each proposed free writing prospectus prepared by or on behalf of, used by,
or referred to by the Company and not to use or refer to any proposed free
writing prospectus which the Underwriter has not consented to in advance,
which consent shall not be unreasonably withheld, and to file with the
Commission within the applicable period specified in Rule 433(d) under the
Securities Act any free writing prospectus required to be filed pursuant to
such rule.

     (iv) If:

     (A) at a time when a prospectus relating to the Shares is
required to be delivered under the Securities Act, any
representation or warranty made pursuant to Section 1 ceases to be
true and correct or any event occurs as a result of which the
Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or

     (B) it shall be necessary to amend the Registration Statement
or supplement the Prospectus to comply with the Securities Act or
the Exchange Act or the respective rules thereunder,

then, the Company promptly will notify the Underwriter and each Selling
Stockholder of such event, and either (A) (1) prepare and file with the
Commission an amendment or supplement which will correct any such
statement or omission or effect any such compliance and (2) at its own
expense, supply any supplemented Prospectus to the Underwriter in such
quantities as the Underwriter may reasonably request.

11

 

     (v) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Underwriter shall
reasonably request; provided, that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now
so qualified or to take any action that would subject it to material
taxation or service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject.

     (vi) To make generally available to the Company’s security holders and
to the Underwriter as soon as practicable an earnings statement covering a
period of at least twelve months beginning with the first fiscal quarter of
the Company occurring after the date of this Agreement a which shall satisfy
the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.

     (vii) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company’s counsel and the Company’s accountants in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of the
Registration Statement, the preliminary prospectus, if any, the Time of Sale
Prospectus, the Prospectus, any free writing prospectus prepared by or on
behalf of, used by, or referred to by the Company and amendments and
supplements to any of the foregoing, including all printing costs associated
therewith, and the mailing and delivering of copies thereof to the
Underwriter, Selling Stockholders and dealers, if any, in the quantities
hereinabove specified, (ii) all costs and expenses related to the transfer
and delivery of the Shares to the Underwriter, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing any
Blue Sky memorandum in connection with the offer and sale of the Shares
under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws
as provided in Section 6(e) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriter in connection with
such qualification and in connection with the Blue Sky memorandum, which
shall not exceed $25,000, (iv) all filing fees and the reasonable fees and
disbursements of counsel to the Underwriter incurred in connection with the
review and qualification of the offering of the Shares by the National
Association of Securities Dealers, Inc., (v) the cost of printing
certificates representing the Shares, (vi) the costs and charges of any
transfer agent, registrar or depositary, and (vii) all other costs and
expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section. It is
understood,

12

 

however, that except as provided in this Section, Section 8 entitled
“Indemnity and Contribution,” and the last paragraph of Section 9 below, the
Underwriter will pay all of its costs and expenses, including fees and
disbursements of its counsel and any advertising expenses connected with any
offers it may make.

     (viii) To afford the Underwriter and any affiliates of the Underwriter
on reasonable notice, a reasonable opportunity to conduct a due diligence
investigation with respect to the Company customary in scope for
transactions pursuant to which the Underwriter or any affiliates of the
Underwriter acts as an underwriter of equity securities (including, without
limitation, the availability of the chief financial officer and general
counsel to respond to questions regarding the business and financial
condition of the Company and the right to have made available to them for
inspection such records and other information as they may reasonably
request).

     (ix) Not to consider the Underwriter to be an “interested person”
within the meaning of Section 203 of the General Corporation Law of the
State of Delaware as a result of the transactions contemplated by this
Agreement.

     (b) In consideration of the agreements of the Underwriter herein contained, each
Selling Stockholder covenants with the Underwriter as follows:

     (i) To deliver to the Underwriter prior to the Closing Date, a properly
completed and executed United States Treasury Department Form W-8 (if the
Selling Stockholder is a non-United States Person) or Form W-9 (if the
Selling Stockholder is a United States Person), which in each case may be
replaced by any other applicable form or statement specified by Treasury
Department regulations in lieu thereof;

     (ii) To notify promptly the Company and the Underwriter if, at any time
prior to the date on which the distribution of the Shares as contemplated
herein and in the Prospectus has been completed, as determined by the
Underwriter, of any changes in any of the information referred to in Section
2(a)(v) included in the Registration Statement or the Prospectus relating to
such Selling Stockholder;

     (iii) To do and perform all things to be done and performed under this
Agreement prior to the Closing Date, and to satisfy all conditions precedent
to the delivery of the Shares pursuant to this Agreement;

     (iv) To pay or to cause to be paid all transfer taxes, stamp duties and
other similar taxes with respect to the Shares, if any, to be sold by such
Selling Stockholder; and

13

 

     (v) Such Selling Stockholder has not, prior to the execution of this
Agreement, distributed any “prospectus” (within the meaning of the
Securities Act) or offering material in connection with the offering or sale
of the Shares other than the Registration Statement and the then most recent
Preliminary Prospectus, and will not, at any time on or after the execution
of this Agreement, distribute any “prospectus” (within the meaning of the
Securities Act) of offering material in connection with the offering or sale
of the Shares other than the Registration Statement and the then most recent
Prospectus.

     7. Covenants of the Underwriter. The Underwriter hereby represents and agrees that:

     (a) It has not made, and will not make any offer relating to the Shares that would
constitute a free writing prospectus, without the prior consent of the Company, which
consent shall not be unreasonably withheld.

     (b) Any free writing prospectus used or referred to by it will not be subject to broad
unrestricted dissemination and will not be required to be filed with the Commission, in
accordance with Rule 433 under the Securities Act, as a result of any action taken or caused
to be taken by it, without the prior written consent of the Company, which consent shall not
be unreasonably withheld.

     (c) Any free writing prospectus used or referred to by it, except any “issuer free
writing prospectus” as defined in Rule 433 under the Securities Act, as to which it makes no
representation or warranty, complied in all material respects with the Securities Act.

     (d) The Underwriter has not and will not sell Shares equal to more than 3% of the
outstanding Common Shares to any one buyer or any group of buyer acting together unless the
Underwriter has taken reasonable steps to determine that such buyer will not own more than
5% of the outstanding Common Shares immediately after such sale.

     8. Indemnity and Contribution.

     (a) The Company agrees to indemnify and hold harmless the Underwriter, each Selling
Stockholder, and each person, if any, who controls the Underwriter or any Selling
Stockholder within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, and each affiliate of the Underwriter or any Selling Stockholder within
the meaning of Rule 405 under the Securities Act (provided that the Company’s
indemnification obligation shall not extend to any free writing prospectus required to be
filed by the Company due to the Underwriter’s breach of the covenants set forth in Section
8), from and against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any amendment
thereof, the preliminary prospectus, if any, the

14

 

Time of Sale Prospectus, any free writing prospectus or any “issuer information” that
the Company has filed, or is required to file, pursuant to Rule 433(d) of the Securities
Act, or the Prospectus or any amendment or supplement thereto (if the Company furnished any
amendments or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements
therein, (i) with respect to the Registration Statement or any amendment thereof, not
misleading, and (ii) with respect to any preliminary prospectus, the Time of Sale
Prospectus, any free writing prospectus that the Company has filed, or is required to file,
pursuant to Rule 433(d) under the Securities Act, or the Prospectus or any amendment or
supplement thereto (if the Company furnished any amendments or supplements thereto), not
misleading in the light of the circumstances under which they were made, except in each case
insofar as such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon information
relating to the Underwriter or any Selling Stockholder furnished to the Company in writing
by such Underwriter or such Selling Stockholder expressly for use therein, which in the case
of each Selling Stockholder shall be only the information referred to in Section 2(a)(v).

     (b) The Underwriter agrees to indemnify and hold harmless the Company, each Selling
Stockholder, the directors of the Company and each Selling Stockholder, the officers of the
Company who sign the Registration Statement and each person, if any, who controls the
Company or any Selling Stockholder within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the
Company to the Underwriter and the Selling Stockholders, but only with reference to
information relating to the Underwriter furnished to the Company in writing by the
Underwriter expressly for use in the Registration Statement, any preliminary prospectus, the
Time of Sale Prospectus, any other free writing prospectus that the Company has filed or is
required to file pursuant to Rule 433(d) of the Securities Act, or the Prospectus or any
amendment or supplement thereto.

     (c) Each Selling Stockholder, severally and not jointly, agrees to indemnify and hold
harmless the Company, the Underwriter, each other Selling Stockholder, the directors of the
Company, the Underwriter and each other Selling Stockholder, the officers of the Company who
sign the Registration Statement and each person, if any, who controls the Company, the
Underwriter or any other Selling Stockholder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity in
subsection (a) above from the Company to the Underwriter and the Selling Stockholders, but
only with reference to information relating to such Selling Stockholder furnished to the
Company in writing by such Selling Stockholder expressly for use in the Registration
Statement, any preliminary prospectus, the Time of Sale Prospectus, any other free writing
prospectus that the Company has filed or is required to file pursuant to Rule 433(d) of the
Securities Act, or the Prospectus or any amendment or supplement thereto, which, in the case
of each Selling Stockholder shall be only the information referred to in Section 2(a)(v).

     (d) In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought pursuant

15

 

to Section 8(a), 8(b) or 8(c), such person (the “indemnified party”) shall promptly
notify the person against whom such indemnity may be sought (the “indemnifying party”) in
writing and the indemnifying party, upon request of the indemnified party, shall retain
counsel chosen by the indemnifying party and reasonably satisfactory to the indemnified
party to represent the indemnified party and any others entitled to indemnification pursuant
to this Section 8 the indemnifying party may designate in such proceeding and shall pay the
reasonably incurred fees and expenses of such counsel related to such proceeding as
incurred. In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the reasonably incurred fees and expenses of such counsel shall be at the
expense of such indemnified party unless 1) the indemnifying party and the indemnified party
shall have mutually agreed to the retention of such counsel or 2) the named parties to any
such proceeding (including any impleaded parties) include both the indemnifying party and
the indemnified party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is understood
and agreed that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonably incurred fees and
expenses of more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such reasonably incurred fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by the
Underwriter, in the case of parties indemnified pursuant to Section 8(a), by the Company, in
the case of parties indemnified pursuant to Section 8(b), and by the applicable Selling
Stockholder, in the case of parties indemnified pursuant to Section 8(c). The indemnifying
party shall not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and against any loss
or liability by reason of such settlement or judgment. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party, unless such
settlement (i) includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act, by or on behalf
of any indemnified party.

     (e) To the extent the indemnification provided for in Section 8(a), 8(b) or 8(c) is
unavailable to an indemnified party or insufficient in respect of any losses, claims,
damages or liabilities referred to therein, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to
the amount paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the indemnified
party or parties on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause 8(e)(i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause 8(e)(i) above
but also the relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the

16

 

statements or omissions that resulted in such losses, claims, damages or liabilities,
as well as any other relevant equitable considerations. The relative benefits received by
the Company and the Selling Stockholders on the one hand and the Underwriter, on the other
hand, in connection with the offering of the Shares sold by the Selling Stockholders to the
Underwriter hereunder shall be deemed to be in the same respective proportions as the net
proceeds from the offering of such Shares (before deducting expenses) received by the
Selling Stockholders from the Underwriter, on the one hand, and the product of (i) the
difference between the closing price of the Common Shares on the New York Stock Exchange on
the date hereof and the price per share paid by the Underwriter and (ii) the number of
Shares sold by the Selling Stockholders to the Underwriter hereunder, bear to the aggregate
public offering price of the Shares. The relative fault of the Company on the one hand and
the Underwriter and the Selling Stockholders, as applicable, on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriter or the Selling
Shareholders, as applicable, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

     (f) The Company, the Underwriter and each of the Selling Stockholders, agree that it
would not be just or equitable if contribution pursuant to this Section 8 were determined by
pro rata allocation or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 8(e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities referred to in
Section 8(e) shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the provisions of this
Section 8, neither the Underwriter nor any of the Selling Stockholders shall be required to
contribute any amount in excess of the amount by which the total price at which the Shares
underwritten and distributed to the public were offered to the public exceeds the amount of
any damages that the Underwriter or Selling Stockholders have otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.

     (g) The indemnity and contribution provisions contained in this Section 8 and the
representations, warranties and other statements of the Company contained in this Agreement
shall remain operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of the Underwriter or any person
controlling the Underwriter or any affiliate of the Underwriter or by or on behalf of the
Company, the officers or directors of the Company or any person controlling the Company,
(iii) any investigation made by or on behalf of a Selling Stockholder or any person
controlling a Selling Stockholder or any affiliate of a Selling Stockholder or by or on
behalf of the Company, the officers or directors of the Company

17

 

or any person controlling the Company and (iv) acceptance of and payment for any of the
Shares.

     9. Termination. The Underwriter may terminate this Agreement at any time by notice to the
Company and each Selling Stockholder if after the execution and delivery of this Agreement and
prior to any Sale Date (i) trading generally shall have been suspended or materially limited on, or
by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market, (ii) trading of any securities of the Company shall have been suspended on
any exchange or in any over-the-counter market, (iii) a material disruption in the securities
settlement, payment or clearance services in the United States shall have occurred, (iv) any
moratorium on commercial banking activities shall have been declared by Federal or New York State
authorities or (v) there shall have occurred any outbreak or escalation of hostilities, or any
change in financial markets or any calamity or crisis that, in the Underwriter’s judgment, is
material and adverse and which, singly or together with any other event specified in this clause
(v), makes it, in the Underwriter’s judgment, impracticable or inadvisable to proceed with the
offer, sale or delivery of the Shares on the terms and in the manner contemplated in the Time of
Sale Prospectus and the Prospectus. The Underwriter shall not be obligated to close the purchase
and sale of any shares pursuant to this Agreement on any date on which this Agreement is terminated
pursuant to this Section 9.

     The Underwriter may terminate this Agreement for any failure or refusal on the part of the
Company or any Selling Shareholder to comply with the terms or to fulfill any of the conditions of
this Agreement. If this Agreement shall be terminated by the Underwriter because of any failure or
refusal on the part of the Company or any Selling Shareholder to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable
to perform its obligations under this Agreement, the Company will reimburse the Underwriter for all
out-of-pocket expenses (including the fees and disbursements of their counsel, but without
duplication of any reimbursement obligation pursuant to any other agreement) reasonably incurred by
the Underwriter in connection with this Agreement or the offering contemplated hereunder.

     10. Selling Stockholder Default.

     (a) If any Selling Shareholder shall default in its or their obligation to sell and
deliver any Shares hereunder, then the Underwriter may, by notice to the Company, terminate
this Agreement without any liability on the part of any non-defaulting party except that the
provisions of Sections 1, 2, 7, 8, 11 and 16 hereof shall remain in full force and effect.
No action taken pursuant to this Section 10 shall relieve any Selling Shareholder so
defaulting from liability, if any, in respect of such default.

     (b) In the event that such default occurs and the Company and Underwriter agree to
proceed with the Offering, then the Underwriter may, or the Company shall have the right, in
each case by notice to the other, to postpone the Closing Date be, for a period not
exceeding five business days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or supplement to the
Registration Statement or the Prospectus which, in the opinion of

18

 

Underwriter’s Counsel, may thereby be made necessary or advisable; and in no event
shall the Company be obligated to increase the number of Shares it is required to sell
hereunder.

     11. Effectiveness. This Agreement shall become effective upon the execution and delivery
hereof by the parties hereto.

     12. Successors and Assigns. This Agreement shall be binding upon and inure solely to the
benefit of the parties hereto and their respective successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from the Underwriter shall be deemed a successor or assign solely by reason of such
purchase.

     13. Counterparts. This Agreement may be signed in two or more counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and hereto were upon the
same instrument.

     14. Applicable Law; Submission to Jurisdiction; Appointment of Agent for Service. This
Agreement shall be governed by and construed in accordance with the laws of the State of New York.
This Agreement, together with any contemporaneous written agreements and any prior written
agreements (to the extent not superseded by this Agreement) that relate to the offering of the
Shares, represents the entire agreement between the Company and the Underwriter with respect to the
preparation of any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, the conduct
of the offering, and the purchase and sale of the Shares.

     15. Headings. The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed a part of this Agreement.

     16. No Fiduciary Duty. The Company acknowledges and agrees that in connection with this
offering, sale of the Shares or any other services the Underwriter may be deemed to be providing
hereunder, notwithstanding any preexisting relationship, advisory or otherwise, between the parties
or any oral representations or assurances previously or subsequently made by the Underwriter: (i)
no fiduciary or agency relationship between the Company and any other person, on the one hand, and
the Underwriter, on the other, exists; (ii) the Underwriter is not acting as advisor, expert or
otherwise, to the Company, and such relationship between the Company on the one hand, and the
Underwriter, on the other, is entirely and solely commercial, based on arms-length negotiations;
(iii) any duties and obligations that the Underwriter may have to the Company shall be limited to
those duties and obligations specifically stated herein; and (iv) the Underwriter and its
affiliates may have interests that differ from those of the Company. The Company hereby waives any
claims that the Company may have against the Underwriter with respect to any breach of fiduciary
duty in connection with the sale of the Shares.

19

 

     17. Notices. All communications hereunder shall be in writing and effective only upon receipt
and shall be delivered, mailed or sent, if to the Underwriter at 1585 Broadway, New York, New York
10036, Attention: Todd Singer, if to the Selling Stockholders at the applicable address set forth
on Schedule I hereto, and if the Company to NRG Energy, Inc., 211 Carnegie Center, Princeton, New
Jersey 08540-6213, Attention: General Counsel.

20

 

	 	 	 	 	 
	 	NRG Energy, Inc.

 	 
	 	By:  	/s/ Robert C. Flexon
 	 
	 	 	Name:  	Robert C. Flexon 	 
	 	 	Title:  	Executive Vice President

and Chief Financial Officer 	 
	 

 

 

	 	 	 	 	 
	Accepted as of the date hereof:	 	 
	 
	 	 	 	 
	MORGAN STANLEY & CO.	 	 
	 

	 	INCORPORATED	 	 
	 
	 	 	 	 
	By:

	 	/s/ Todd J. Singer	 	 
	 

	 	 	 	 
	 

	 	Name: Todd J. Singer	 	 
	 

	 	Title: Executive Director	 	 

 

 

	 	 	 	 	 
	 	 	BLACKSTONE TG CAPITAL PARTNERS IV L.P.
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	By: Blackstone Management Associates IV L.L.C.,
	 	 	as General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David Foley
	 

	 	 	 	 
	 

	 	 	 	Name: David Foley
	 

	 	 	 	Title: Member
	 
	 	 	 	 
	 	 	BLACKSTONE TG CAPITAL PARTNERS IV-B
	 

	 	L.P.	 	 
	 
	 	 	 	 
	 	 	By: Blackstone Management Associates IV L.L.C.,
	 	 	as General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David Foley
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	BLACKSTONE CAPITAL PARTNERS IV-A L.P.
	 
	 	 	 	 
	 	 	By: Blackstone Management Associates IV L.L.C.,
	 	 	as General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David Foley
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	BLACKSTONE PARTICIPATION PARTNERSHIP IV L.P.
	 
	 	 	 	 
	 	 	By: Blackstone Management Associates IV L.L.C.,
	 	 	as General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David Foley
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 

 

 

	 	 	 	 	 
	 	 	BLACKSTONE FAMILY INVESTMENT
	 	 	PARTNERSHIP IV-A L.P.
	 
	 	 	 	 
	 	 	By: Blackstone Management Associates IV L.L.C.,
	 	 	as General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David Foley
	 

	 	 	 	 
	 

	 	 	 	Name: David Foley
	 

	 	 	 	Title: Member

 

 

	 	 	 	 	 
	 	 	HELLMAN & FRIEDMAN CAPITAL PARTNERS
	 	 	IV, L.P.
	 
	 	 	 	 
	 	 	By: H&F Investors IV, LLC, its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Georgia Lee
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	H&F INTERNATIONAL PARTNERS
	 	 	IV-A, L.P.
	 
	 	 	 	 
	 	 	By: H&F Investors IV, LLC, its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Georgia Lee
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	H&F INTERNATIONAL PARTNERS IV-C, L.P.
	 
	 	 	 	 
	 	 	By: H&F Investors IV, LLC, its General Partner
	 
	 	 	 	 
	 	 	By: H&F Investors IV, LLC, its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Georgia Lee
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	H&F EXECUTIVE FUND IV, L.P.
	 
	 	 	 	 
	 	 	By: H&F Investors IV, LLC, its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Georgia Lee
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	H&F TGN AIV, L.P.
	 
	 	 	 	 
	 	 	By: H&F Investors IV, LLC, its General Partner
	 
	 	 	 	 
	 	 	By: H&F Investors IV, LLC, its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Georgia Lee
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 

 

 

	 	 	 	 	 
	 	 	KKR PARTNERS III, L.P. (SERIES I)
	 
	 	 	 	 
	 	 	By: KKR Millennium GP (Energy) LLC, a General
	 	 	Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Marc S. Lipschultz
	 

	 	 	 	 
	 

	 	 	 	Member
	 
	 	 	 	 
	 	 	KKR MILLENNIUM FUND (ENERGY) L.P.
	 
	 	 	 	 
	 	 	By: KKR Associates Millennium (Energy) L.P., its
	 	 	General Partner
	 	 	By: KKR Millennium GP (Energy) LLC, its General
	 	 	Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Marc S. Lipschultz
	 

	 	 	 	 
	 

	 	 	 	Member
	 
	 	 	 	 

 

 

	 	 	 	 	 
	 	 	TPG III — AIV 1, L.P.
	 
	 	 	 	 
	 	 	By: TPG GenPar III, L.P., its General Partner
	 	 	By: TPG Advisors III, Inc., its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David A. Spuria
	 

	 	 	 	 
	 

	 	 	 	Name: David A. Spuria
	 

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	TPG III — AIV 2, L.P.
	 
	 	 	 	 
	 	 	By: TPG GenPar III, L.P., its General Partner
	 	 	By: TPG Advisors III, Inc., its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David A. Spuria
	 

	 	 	 	 
	 

	 	 	 	Name: David A. Spuria
	 

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	TPG III — AIV 3, L.P.
	 
	 	 	 	 
	 	 	By: TPG GenPar III, L.P., its General Partner
	 	 	By: TPG Advisors III, Inc., its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David A. Spuria
	 

	 	 	 	 
	 

	 	 	 	Name: David A. Spuria
	 

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	TPG PARTNERS IV — AIV 1, L.P.
	 
	 	 	 	 
	 	 	By: TPG GenPar IV, L.P., its General Partner
	 	 	By: TPG Advisors IV, Inc., its General Partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David A. Spuria
	 

	 	 	 	 
	 

	 	 	 	Name: David A. Spuria
	 

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	TPG PARTNERS IV — AIV 2, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David A. Spuria
	 

	 	 	 	 
	 

	 	 	 	Name: David A. Spuria
	 

	 	 	 	Title: Vice President

 

 

Schedule I

Selling Stockholders

	 	 	 	 	 
	Name	 	Number of Shares to be Sold	 
	Blackstone TG Capital Partners IV L.P.
	 	 	3,309,582	 
	Blackstone TG Capital Partners IV-B L.P.
	 	 	629,828	 
	Blackstone Capital Partners IV-A L.P.
	 	 	57,685	 
	Blackstone Family Investment Partnership IV-A L.P.
	 	 	208,160	 
	Blackstone Participation Partnership IV L.P.
	 	 	7,625	 
	Hellman & Friedman Capital Partners IV, L.P.
	 	 	3,207,977	 
	H&F International Partners IV-A, L.P.
	 	 	262,115	 
	H&F International Partners IV-C, L.P.
	 	 	1,179	 
	H&F Executive Fund IV, L.P.
	 	 	84,588	 
	H&F TGN AIV, L.P.
	 	 	661,012	 
	KKR Millennium Fund (Energy) L.P.
	 	 	4,099,941	 
	KKR Partners III L.P. (Series I)
	 	 	215,786	 
	TPG III-AIV 1, L.P.
	 	 	523,313	 
	TPG III-AIV 2, L.P.
	 	 	986,144	 
	TPG III-AIV 3, L.P.
	 	 	81,324	 
	TPG Partners IV-AIV 1, L.P.
	 	 	872,383	 
	TPG Partners IV-AIV 2, L.P.
	 	 	1,661,839	 

Applicable Mailing Address

	 	 	 
	Blackstone Group

	 	345 Park Avenue
	 

	 	New York, NY 10154
	 

	 	(212) 583-5712
	 
	 	 
	Hellman & Friedman

	 	One Marine Plaza, 12th floor
	 

	 	San Francisco, CA 94111
	 

	 	(415) 788-5111
	 
	 	 
	Kohlberg Kravis Roberts & Co.

	 	9 West 57th Street, Suite 4200
	 

	 	New York, NY 10019
	 

	 	(212) 750-8300
	 
	 	 
	Texas Pacific Group

	 	301 Commerce Street, Suite 3300
	 

	 	Fort Worth, TX 76102
	 

	 	(817) 871-4000

 

 

Schedule II

Free Writing Prospectus

Free Writing Prospectus dated August 9, 2006

 

 

Schedule III

Other Information

The price per share in each trade executed pursuant to the Registration Statement and Underwriting
Agreement.

 

 

EXHIBIT A-1

FORM OF OPINION OF KIRKLAND & ELLIS LLP

TO BE DELIVERED PURSUANT

TO SECTION 5(C)

(See Attached)

 

 

EXHIBIT A-2

FORM OF OPINION OF TIM O’BRIEN, GENERAL COUNSEL

TO BE DELIVERED PURSUANT

TO SECTION 5(C)

(See Attached)

 

 

EXHIBIT A-3

FORM OF OPINION OF SIMPSON THACHER & BARTLETT LLP

TO BE DELIVERED PURSUANT

TO SECTION 5(E)

(See Attached)<PAGE>

                                                                     EXHIBIT 4.2

                              AMENDED AND RESTATED

                           SECURITY HOLDERS' AGREEMENT

          This AMENDED AND RESTATED SECURITY HOLDERS' AGREEMENT ("Agreement"),
dated as of June 27, 2006, is among PGT, Inc., a Delaware corporation (the
"Corporation") formerly known as JLL Window Holdings, Inc., JLL Partners Fund
IV, L.P., a Delaware limited partnership ("Fund IV"), those employees of the
Corporation listed on Schedule I hereto (the "Management Investors"), and each
Additional Stockholder (as hereinafter defined).

                                   WITNESSETH

          WHEREAS, on January 29, 2004, each of the Corporation, Fund IV, and
certain of the Management Investors entered into that certain Security Holders'
Agreement (the "Original Agreement") to memorialize certain agreements with
respect to the shares of Common Stock owned by such parties, and the other
Management Investors became a party to the Original Agreement, all in accordance
with the terms and conditions set forth therein; and

          WHEREAS, in connection with the Corporation's proposed Initial Public
Offering (as hereinafter defined), the Corporation and each of the Stockholders
(as hereinafter defined) desire to amend and restate the Original Agreement on
the terms set forth herein, conditioned upon, subject to, and effective
immediately prior to the consummation of the Corporation's Initial Public
Offering.

          NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereby agree as follows:

                                   ARTICLE I

                               Certain Definitions

          For purposes of this Agreement, the following terms shall have the
following meanings:

               (a) The term "Affiliate" shall have the meaning set forth in Rule
405 promulgated under the Securities Act.

               (b) The term "Additional Stockholders" shall mean the Permitted
Transferees of Fund IV.

               (c) The term "Board" shall mean the Board of Directors of the
Corporation.

               (d) The term "Commission" shall mean the United States Securities
and Exchange Commission or any successor agency.

<PAGE>

               (e) The term "Common Stock" shall mean the common stock, par
value $.01 per share, of the Corporation.

               (f) The term "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.

               (g) The term "Initial Public Offering" shall mean the first
Public Offering of shares of Common Stock.

               (h) The term "Permitted Transferee" shall mean any Person to whom
Fund IV Transfers Shares other than in a Public Offering or a sale pursuant to
Rule 144 under the Securities Act and who, with the prior consent of Fund IV,
agrees to be bound by the provisions of the Agreement.

               (i) The term "Person" shall mean any individual, firm,
corporation, partnership, limited liability company, trust or other entity, and
shall include any successor (by merger or otherwise) of such entity.

               (j) The term "Public Offering" shall mean a public offering of
equity securities of the Corporation pursuant to an effective registration
statement under the Securities Act (other than (i) a registration statement
filed under Regulation A or on Form S-4 or any successor form or (ii) a
registration statement filed on Form S-8 or any successor form).

               (k) The term "Registrable Securities" shall mean (i) the Shares
owned by Fund IV on the date hereof and (ii) Shares acquired by Fund IV or one
or more Additional Stockholders after the date hereof in accordance with the
terms hereof. As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when (i) a registration statement registering
such securities under the Securities Act has been declared effective and such
securities have been sold or otherwise transferred by the holder thereof
pursuant to such effective registration statement, or (ii) such securities are
sold in accordance with Rule 144 (or any successor provision) promulgated under
the Securities Act, or (iii) such securities are transferred under circumstances
in which any legend borne by the certificates for such securities relating to
restrictions on transferability thereof, under the Securities Act or otherwise,
is removed by the Corporation.

               (l) The term "Securities Act" shall mean the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.

               (m) The term "Shares" shall mean the shares of Common Stock owned
by Fund IV on the date hereof and additional shares of Common Stock acquired by
Fund IV and any Additional Stockholders after the date hereof, including shares
of Common Stock acquired on the exercise of options or as a result of a
subsequent purchase, conversion, reorganization, recapitalization,
reclassification, stock dividend, split-up, sale of assets, distribution or
redemption of securities.

                                        2

<PAGE>

               (n) The term "Stockholder" shall mean Fund IV, each of the
Management Investors, and each of the Additional Stockholders.

               (o) The term "Transfer" shall mean any voluntary or involuntary
attempt to, directly or indirectly through the transfer of interests in
controlled Affiliates or otherwise, offer, sell, assign, transfer, grant a
participation in, pledge or otherwise dispose of any shares of Common Stock, or
the consummation of any such transactions, or the soliciting of any offers to
purchase or otherwise acquire, or taking a pledge of, any of shares of Common
Stock; provided, however, that the transfer of an interest in any of the
Stockholders shall not be deemed to be a transfer.

                                   ARTICLE II

                  Representations and Warranties and Covenants

          Section 2.01 Representations and Warranties of the Corporation.

          The Corporation represents and warrants to each Stockholder, as of the
date hereof, as follows:

               (a) Corporate Authority. The Corporation has full power and
authority to execute, deliver and perform this Agreement;

               (b) Due Authorization. This Agreement has been duly and validly
authorized, executed and delivered by the Corporation and constitutes a valid
and binding obligation of the Corporation, enforceable against the Corporation
in accordance with its terms, except that (i) the enforceability hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting creditors' rights, (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to certain equitable defenses and to the discretion of the court before
which any proceedings therefor may be brought, and (iii) the rights to indemnity
hereunder may be limited by federal or state securities laws or the public
policy underlying such laws; and

               (c) No Conflict. The execution, delivery and performance of this
Agreement by the Corporation do not violate or conflict with or constitute a
default under (i) the Corporation's certificate of incorporation and by-laws,
(ii) any judgment, order or decree or statute, law, ordinance, rule or
regulation of any governmental entity applicable to the Corporation or (iii) any
material agreement to which it is a party or by which it or its property is
bound.

          Section 2.02 Representations and Warranties of the Stockholders.

          Each Stockholder individually represents and warrants to each other
Stockholder and the Corporation, as of the date hereof, as follows:

                                       3

<PAGE>

               (a) Authority. The Stockholder (a) if not an individual, has full
power, capacity and authority to execute, deliver and perform this Agreement,
(b) if an individual, is competent and has all requisite power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby;

               (b) Due Authorization. This Agreement has been duly and validly
authorized, executed and delivered by the Stockholder and constitutes a valid
and binding obligation of the Stockholder, enforceable against the Stockholder
in accordance with its terms, except that (i) the enforceability hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting creditors' rights, (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to certain equitable defenses and to the discretion of the court before
which any proceedings therefor may be brought, and (iii) the rights to indemnity
and contribution hereunder may be limited by federal or state securities laws or
the public policy underlying such laws;

               (c) No Conflict. The execution, delivery and performance of this
Agreement by the Stockholder do not violate or conflict with or constitute a
default under (i) the Stockholder's organizational documents, provided that this
clause (i) is inapplicable to any Stockholder that is an individual, (ii) any
judgment, order or decree or statute, law ordinance, rule or regulation of any
governmental entity applicable to the Stockholder, or (iii) any material
agreement to which the Stockholder is a party or by which it or its property is
bound; and

               (d) Acquisition of Shares for Investment.

                    (i) Fund IV and each Additional Stockholder agree to the
imprinting, so long as required by law, of legends on certificates representing
all of the Shares acquired by such stockholder to the following effect:

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE
     TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
     ("TRANSFERRED") EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
     UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES
     REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF THE AMENDED AND
     RESTATED SECURITY HOLDERS' AGREEMENT DATED AS OF JUNE 27, 2006, AND MAY NOT
     BE TRANSFERRED UNLESS SUCH TRANSFER COMPLIES WITH THE PROVISIONS OF SUCH
     SECURITY HOLDERS' AGREEMENT. A COPY OF SUCH SECURITY HOLDERS' AGREEMENT IS
     ON FILE WITH THE SECRETARY OF PGT, INC., AND IS AVAILABLE WITHOUT CHARGE
     UPON WRITTEN REQUEST THEREFOR. THE HOLDER OF THIS

                                       4

<PAGE>

     CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY ALL
     OF THE PROVISIONS OF THE AFORESAID SECURITY HOLDERS' AGREEMENT.

                    (ii) Each Additional Stockholder understands that the
acquisition of the Shares by it has not been registered under the Securities Act
for the reason that the issuance of the Shares is exempt under the Securities
Act and that the reliance of the Corporation on such exemption is predicated in
part on such Additional Stockholder's representations set forth herein. Each
Additional Stockholder represents that either (a) it is experienced in
evaluating companies such as the Corporation, has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investment and has the ability to suffer the total loss of its
investment or (b) such Additional Stockholder is an "Accredited Investor" within
the meaning of Rule 501 of Regulation D under the Securities Act, as presently
in effect. Each Additional Stockholder further represents that it has had the
opportunity to conduct due diligence on the Corporation, to ask questions of and
receive answers from the Corporation concerning the terms and conditions of the
offering and to obtain additional information to such Additional Stockholder's
satisfaction.

          Section 2.03 Stockholder Covenants.

               (a) Each Stockholder agrees that it will not make known,
disclose, furnish, make available or utilize any of the Corporation's
confidential information, other than as required by law; provided that, prior to
disclosing any of the confidential information required by law, such Stockholder
will promptly notify the Corporation so that the Corporation may seek a
protective order or other appropriate remedy. Confidential information does not
include any information available to or already in the hands of the public, any
information disclosed to such Stockholder by a third party who is not under a
duty of confidentiality with respect to such information, or any information
independently developed by such Stockholder without the use of confidential
information of the Corporation.

               (b) Each Stockholder agrees that every Transfer of the shares of
Common Stock owned by such Stockholder shall comply with all federal, state, and
local securities laws applicable to such Transfer.

                                   ARTICLE III

                         Amendment to Original Agreement

               Section 3.01 Amendment. The Corporation, Fund IV, and each
Management Investor agree that each of the provisions of the Original Agreement
shall automatically terminate immediately prior to the consummation of the
Initial Public Offering and shall thereafter be void and have no further force
or effect, provided, however, that such termination of the Original Agreement
shall not relieve any

                                       5

<PAGE>

Stockholder from liability for any breach of the Original Agreement occurring
prior to such termination.

          Section 3.02 Waiver of Tag-along Rights. Each of the Management
Investors hereby waives any and all of his rights pursuant to Section 3.04 of
the Original Agreement in connection with any Transfer by Fund IV of its shares
of Common Stock in connection with the Initial Public Offering, including,
without limitation, its right to exercise so-called tag-along rights and to
notice thereof.

                                   ARTICLE IV

                               Registration Rights

          Section 4.01 Demand Registrations.

               (a) Requests for Registration. At any time after one hundred
eighty (180) days following the consummation of the Initial Public Offering,
subject to the conditions set forth herein, Fund IV shall be entitled to make a
written request of the Corporation (a "Demand") for registration under the
Securities Act of all or part of the Registrable Securities (a "Demand
Registration"). Such Demand shall specify: (i) the aggregate number of
Registrable Securities requested to be registered, (ii) the intended method of
distribution in connection with such Demand Registration to the extent then
known. Within ten (10) business days after receipt of a Demand, the Corporation
shall give written notice of such Demand to all Additional Stockholders and
shall include in such registration all Registrable Securities with respect to
which the Corporation has received a written request for inclusion therein
within twenty business (20) days after the receipt by such Additional
Stockholder of the Corporation's notice required by Section 4.02 of this
Agreement.

               (b) Number of Demand Registrations. Fund IV shall be entitled to
three (3) Demand Registrations.

               (c) Satisfaction of Obligations. Subject to the provisions of
Section 4.03, a registration shall not be treated as a permitted Demand for a
Demand Registration until (i) the applicable registration statement under the
Securities Act has been filed with the Commission with respect to such Demand
Registration (which shall include any registration statement that is not
withdrawn by holders of Registrable Securities in the circumstances contemplated
by Section 4.03), and (ii) such registration statement shall have been
maintained continuously effective for a period of at least ninety (90) days or
such shorter period during which all Registrable Securities included therein
have been disposed of thereunder in accordance with the method of distribution
set forth in such registration statement.

               (d) Availability of Short Form Registrations. The Corporation
shall use its best efforts to comply with the requirements for use of short form
registration for the sale of Registrable Securities under the Securities Act.

                                       6

<PAGE>

               (e) Restrictions on Demand Registrations. The Corporation shall
not be obligated (i) in the case of a Demand Registration, to maintain the
effectiveness of a registration statement under the Securities Act, for a period
longer than ninety (90) days or (ii) to effect any Demand Registration within
one hundred eighty (180) days after the effective date of (A) a registration in
which Fund IV and the Additional Stockholders were given "piggyback" rights
pursuant to Section 4.02 hereof (provided that, with respect to such a
registration in which such piggyback rights were exercised, Fund IV and the
Additional Stockholders exercising such piggyback rights were permitted to
include in such registration fifty percent (50%) of the Registrable Securities
that Fund IV and such Additional Stockholders sought to include therein) or (B)
any other Demand Registration. In addition, the Corporation shall be entitled to
postpone (upon written notice to Fund IV and any Additional Stockholders) for up
to ninety (90) days the filing or the effectiveness of a registration statement
in respect of a Demand (but no more than once in any period of twelve (12)
consecutive months) if the Board determines in good faith and in its reasonable
judgment that effecting the Demand Registration in respect of such Demand would
have a material adverse affect on any proposal or plan by the Corporation to
engage in any debt or equity offering, material acquisition, or disposition of
assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer, or other similar transaction. In the event of a
postponement by the Corporation of the filing or effectiveness of a registration
statement in respect of a Demand, Fund IV shall have the right to withdraw such
Demand in accordance with Section 4.03 hereof.

               (f) Participation in Demand Registrations. The Corporation shall
not include any securities other than Registrable Securities in a Demand
Registration, except with the written consent of Fund IV. If, in connection with
a Demand Registration, any managing underwriter (or, if such Demand Registration
is not an underwritten offering, a nationally recognized independent underwriter
selected by Fund IV (which such underwriter shall be reasonably acceptable to
the Corporation and whose fees and expenses shall be borne solely by the
Corporation)) advises the Corporation and Fund IV that, in its opinion, the
inclusion of all the Registrable Securities and, if authorized pursuant to this
Article IV, other securities of the Corporation, in each case, sought to be
registered in connection with such Demand Registration would adversely affect
the marketability of the Registrable Securities sought to be sold pursuant
thereto, then the Corporation shall include in the registration statement
applicable to such Demand Registration only such securities as the Corporation
and Fund IV are advised by such underwriter can be sold without such an effect
(the "Maximum Demand Number"), as follows and in the following order of
priority:

                    (i) first, the number of Registrable Securities sought to be
registered by Fund IV and the Additional Stockholders, pro rata in proportion to
the number of Registrable Securities sought to be registered by Fund IV and each
Additional Stockholder; and

                    (ii) second, if the number of Registrable Securities to be
included under clause (i) above is less than the Maximum

                                       7

<PAGE>

Demand Number, the number of securities sought to be included by each other
seller, pro rata in proportion to the number of securities sought to be sold by
all such other sellers, which in the aggregate, when added to the number of
securities to be included pursuant to clause (i) above, equals the Maximum
Demand Number.

               (g) Selection of Underwriters. If Fund IV requests that such
Demand Registration be an underwritten offering, then Fund IV shall select a
nationally recognized underwriter or underwriters to manage and administer such
offering, such underwriter or underwriters, as the case may be, to be subject to
the approval of the Corporation, which approval shall not be unreasonably
withheld or delayed.

               (h) Other Registrations. If the Corporation has received a Demand
and if the applicable registration statement in respect of such Demand has not
been withdrawn or abandoned, the Corporation shall not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (other than a registration relating to the Corporation
employee benefit plans, exchange offers by the Corporation or a merger or
acquisition of a business or assets by the Corporation, including, without
limitation, a registration on Form S-4 or Form S-8 or any successor form),
whether on its own behalf or at the request of any holder or holders of such
securities, until a period of at least ninety (90) days has elapsed from the
effective date of any Demand Registration, unless a shorter period of time is
approved by Fund IV. Notwithstanding the foregoing, the Corporation shall be
entitled to postpone any such Demand Registration and may file or cause to be
effected such other registration in accordance with the terms of Section 4.01(e)
hereof.

          Section 4.02 Piggyback Registrations.

               (a) Right to Piggyback. At any time after one hundred eighty
(180) days following the consummation of the Initial Public Offering, whenever
the Corporation proposes to register any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (other than a registration relating to the Corporation
employee benefit plans, exchange offers by the Corporation or a merger or
acquisition of a business or assets by the Corporation including, without
limitation, a registration on Form S-4 or Form S-8 or any successor form) (a
"Piggyback Registration"), the Corporation shall give Fund IV and each of the
Additional Stockholders prompt written notice thereof (but not less than ten
(10) business days prior to the filing by the Corporation with the Commission of
any registration statement with respect thereto). Such notice (a "Piggyback
Notice") shall specify, at a minimum, the number of securities proposed to be
registered, the proposed date of filing of such registration statement with the
Commission, the proposed method of distribution, the proposed managing
underwriter or underwriters (if any and if known), and a good faith estimate by
the Corporation of the proposed minimum offering price of such securities. Upon
the written request of Fund IV or any Additional Stockholder given to the
Secretary of the Corporation within ten (10) business days of receipt by Fund IV
or

                                       8

<PAGE>

any such Additional Stockholder of the Piggyback Notice (which written request
shall specify the number of Registrable Securities intended to be disposed of by
Fund IV and any such Additional Stockholder and the intended method of
distribution thereof), the Corporation shall include in such registration all
Registrable Securities with respect to which the Corporation has received such
written requests for inclusion.

               (b) Priority on Piggyback Registrations. If, in connection with a
Piggyback Registration, any managing underwriter (or, if such Piggyback
Registration is not an underwritten offering, a nationally recognized
independent underwriter selected by the Corporation (reasonably acceptable to
Fund IV and whose fees and expenses shall be borne solely by the Corporation))
advises the Corporation and the holders of the Registrable Securities sought to
be included in such Piggyback Registration, that, in its opinion, the inclusion
of all the securities sought to be included in such Piggyback Registration by
the Corporation, any Persons who have sought to have shares registered
thereunder pursuant to rights to demand (other than pursuant to so-called
"piggyback" or other incidental or participation registration rights) such
registration (such demand rights being "Other Demand Rights" and such Persons
being "Other Demanding Sellers"), any holders of Registrable Securities seeking
to sell such securities in such Piggyback Registration ("Piggyback Sellers"),
and any other proposed sellers, in each case, if any, would adversely affect the
marketability of the securities sought to be sold pursuant thereto, then the
Corporation shall include in the registration statement applicable to such
Piggyback Registration only such securities as the Corporation, the Other
Demanding Sellers, and the Piggyback Sellers are so advised by such underwriter
can be sold without such an effect (the "Maximum Piggyback Number"), as follows
and in the following order of priority:

                    (i) if the Piggyback Registration is an offering on behalf
of the Corporation and not any Person exercising Other Demand Rights (whether or
not other Persons seek to include securities therein pursuant to so-called
"piggyback" or other incidental or participatory registration rights) (a
"Primary Offering"), then (A) first, such number of securities to be sold by the
Corporation as the Corporation, in its reasonable judgment and acting in good
faith and in accordance with sound financial practice, shall have determined,
and (B) second, if the number of securities to be included under clause (A)
above is less than the Maximum Piggyback Number, the number of Registrable
Securities sought to be registered by each Piggyback Seller, pro rata in
proportion to the number of Registrable Securities sought to be registered by
all the Piggyback Sellers and all other proposed sellers, which in the
aggregate, when added to the number of securities to be registered under clause
(A) above, equals the Maximum Piggyback Number; and

                    (ii) if the Piggyback Registration is an offering other than
pursuant to a Primary Offering, then (A) first, such number of securities sought
to be registered by each Other Demanding Seller, pro rata in proportion to the
number of securities sought to be registered by all such Other Demanding Sellers
and (B) second, if the number of securities to be included

                                       9

<PAGE>

under clause (A) above is less than the Maximum Piggyback Number, the number of
Registrable Securities sought to be registered by each Piggyback Seller, pro
rata in proportion to the number of Registrable Securities sought to be
registered by all the Piggyback Sellers and all other proposed sellers, which in
the aggregate, when added to the number of securities to be registered under
clause (A) above, equals the Maximum Piggyback Number.

               (c) Withdrawal by the Corporation. If, at any time after giving
written notice of its intention to register any of its securities as set forth
in Section 4.02 and prior to the time the registration statement filed in
connection with such registration is declared effective, the Corporation shall
determine for any reason not to register such securities, the Corporation may,
at its election, give written notice of such determination to Fund IV and each
Additional Stockholder and thereupon shall be relieved of its obligation to
register any Registrable Securities in connection with such particular withdrawn
or abandoned registration (but not from its obligation to pay the Registration
Expenses (as defined below) in connection therewith as provided herein).

          Section 4.03 Withdrawal Rights. Fund IV or any Additional Stockholder,
having notified or directed the Corporation to include any or all of its
Registrable Securities in a registration statement under the Securities Act,
shall have the right to withdraw any such notice or direction with respect to
any or all of the Registrable Securities designated for registration thereby by
giving written notice to such effect to the Corporation at least five (5)
business days prior to the effective date of such registration statement. In the
event of any such withdrawal, the Corporation shall not include such Registrable
Securities in the applicable registration and such Registrable Securities shall
continue to be Registrable Securities hereunder. No such withdrawal shall affect
the obligations of the Corporation with respect to the Registrable Securities
not so withdrawn; provided that in the case of a Demand Registration, if such
withdrawal shall reduce the number of Registrable Securities sought to be
included in such registration below $10 million of aggregate market value as of
such date, then the Corporation shall as promptly as practicable give each
holder of Registrable Securities sought to be registered notice to such effect,
referring to this Agreement and summarizing this Section 4.03, and within five
(5) business days of the effectiveness of such notice, either the Corporation or
Fund IV may, by written notices made to each holder of Registrable Securities
sought to be registered and the Corporation, elect that such registration
statement not be filed or, if theretofore filed, be withdrawn. During such
period of five (5) business days, the Corporation shall not file such
registration statement if not theretofore filed or, if such registration
statement has been theretofore filed, the Corporation shall not seek, and shall
use its best efforts to prevent, the effectiveness thereof. Any registration
statement withdrawn or not filed (i) in accordance with an election by the
Corporation, (ii) in accordance with an election by Fund IV pursuant to Section
4.01(e) hereof, (iii) in accordance with an election by Fund IV prior to the
effectiveness of the applicable Demand Registration Statement, or (iv) in
accordance with an election by Fund IV subsequent to the effectiveness of the
applicable Demand Registration Statement, if any post-effective amendment or
supplement to the applicable Demand Registration Statement contains adverse
information regarding the Corporation shall not be counted as

                                       10
<PAGE>

a Demand Registration. Except as set forth in clause (iv) of the previous
sentence, any Demand withdrawn in accordance with an election by Fund IV
subsequent to the effectiveness of the applicable Demand Registration Statement
shall be counted as a Demand Registration unless Fund IV reimburses the
Corporation for its reasonable out-of-pocket expenses (but not including any
Internal Expenses, as defined below) related to the preparation and filing of
such registration statement (in which event such registration statement shall
not be counted as a Demand Registration hereunder).

          Section 4.04 Holdback Agreements. Fund IV and each Additional
Stockholder agree not to effect any public sale or distribution (including,
without limitation, sales pursuant to Rule 144) of equity securities of the
Corporation, or any securities convertible into or exchangeable or exercisable
for such securities, during the ten (10) day period prior to the date on which
the Corporation intends to commence a Public Offering through the period that is
ninety (90) days immediately following the effective date of such Public
Offering (except as part of such registration), or, if later, the date that is
ninety (90) days after the execution date of any underwriting agreement with
respect thereto.

          Section 4.05 Registration Procedures.

               (a) Whenever Fund IV or any Additional Stockholder has requested
that any Registrable Securities be registered pursuant to this Agreement
(whether pursuant to Demand Registration or Piggyback Registration), the
Corporation (subject to its right to withdraw such registration as contemplated
by Section 4.02(c)) shall use its best efforts to effect the registration and
the sale of such Registrable Securities in accordance with the intended method
of distribution thereof and, in connection therewith, the Corporation shall as
expeditiously as possible:

                    (i) prepare and file with the Commission a registration
statement with respect to such Registrable Securities on any form for which the
Corporation then qualifies and is available for the sale of Registrable
Securities to be registered thereunder in accordance with the intended method of
distribution and use its best efforts to cause such registration statement to
become effective within ninety (90) days of the date thereof;

                    (ii) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for a continuous period of not less than ninety (90) days (or, if
earlier, until all Registrable Securities included in such registration
statement have been sold thereunder in accordance with the method of
distribution set forth therein) and comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
methods of disposition by the sellers

                                       11

<PAGE>

thereof as set forth in such registration statement (including, without
limitation, by incorporating in a prospectus supplement or post-effective
amendment, at the request of a seller of Registrable Securities, the terms of
the sale of such Registrable Securities);

                    (iii) before filing with the Commission any such
registration statement or prospectus or any amendments or supplements thereto,
the Corporation shall furnish to counsel selected by Fund IV, counsel for the
underwriter or sales or placement agent, if any, and any other counsel for
holders of Registrable Securities, if any, in connection therewith, drafts of
all such documents proposed to be filed and provide such counsel with a
reasonable opportunity for review thereof and comment thereon, such review to be
conducted and such comments to be delivered with reasonable promptness;

                    (iv) promptly (a) notify each seller of Registrable
Securities of each of (i) the filing and effectiveness of the registration
statement and prospectus and any amendment or supplements thereto, (ii) the
receipt of any comments from the Commission or any state securities law
authorities or any other governmental authorities with respect to any such
registration statement or prospectus or any amendments or supplements thereto,
and (iii) any oral or written stop order with respect to such registration, any
suspension of the registration or qualification of the sale of such Registrable
Securities in any jurisdiction or any initiation or threat of any proceedings
with respect to any of the foregoing and (b) use its reasonable best efforts to
obtain the withdrawal of any order suspending the registration or qualification
(or the effectiveness thereof) or suspending or preventing the use of any
related prospectus in any jurisdiction with respect thereto;

                    (v) furnish to each seller of Registrable Securities, the
underwriters and the sales or placement agent, if any, and counsel for each of
the foregoing, a conformed copy of such registration statement and each
amendment and supplement thereto (in each case, including all exhibits thereto
and documents incorporated by reference therein) and such additional number of
copies of such registration statement, each amendment and supplement thereto (in
such case without such exhibits and documents), the prospectus (including each
preliminary prospectus) included in such registration statement and prospectus
supplements and all exhibits thereto and documents incorporated by reference
therein and such other documents as such seller, underwriter, agent or counsel
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by each such seller;

                    (vi) if requested by the managing underwriter or
underwriters of any registration or by Fund IV or Additional Stockholders,
subject to approval of counsel to the Corporation in its reasonable judgment,
promptly incorporate in a prospectus, supplement or post-effective amendment to
the registration statement such information concerning underwriters and the plan
of

                                       12

<PAGE>

distribution of the Registrable Securities as such managing underwriter or
underwriters or such holders shall reasonably furnish to the Corporation in
writing and request be included therein, including, without limitation, with
respect to the number of Registrable Securities being sold by such holders to
such underwriter or underwriters, the purchase price being paid therefor by such
underwriter or underwriters and with respect to any other terms of the
underwritten offering of the Registrable Securities to be sold in such offering;
and make all required filings of such prospectus, supplement or post-effective
amendment as soon as possible after being notified of the matters to be
incorporated in such prospectus, supplement or post-effective amendment;

                    (vii) use its best efforts to register or qualify such
Registrable Securities under such securities or "blue sky" laws of such
jurisdictions as Fund IV or Additional Stockholders reasonably request and do
any and all other acts and things that may be reasonably necessary or advisable
to enable Fund IV or Additional Stockholders to consummate the disposition in
such jurisdictions of the Registrable Securities owned by them and keep such
registration or qualification in effect for so long as the registration
statement remains effective under the Securities Act (provided that the
Corporation shall not be required to (a) qualify generally to do business in any
jurisdiction in which it would not otherwise be required to qualify but for this
paragraph, (b) subject itself to taxation in any such jurisdiction in which it
would not otherwise be subject to taxation but for this paragraph or (c) consent
to the general service of process in any jurisdiction in which it would not
otherwise be subject to general service of process but for this paragraph);

                    (viii) notify each seller of such Registrable Securities, at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act, upon the discovery that, or of the happening of any event as
a result of which, the registration statement covering such Registrable
Securities, as then in effect, contains an untrue statement of a material fact
or omits to state any material fact required to be stated therein or any fact
necessary to make the statements therein not misleading, and promptly prepare
and furnish to each such seller a supplement or amendment to the prospectus
contained in such registration statement so that such registration statement
shall not, and such prospectus as thereafter delivered to the purchasers of such
Registrable Securities shall not, contain an untrue statement of a material fact
or omit to state any material fact required to be stated therein or any fact
necessary to make the statements therein not misleading;

                    (ix) cause all such Registrable Securities to be listed on
the Nasdaq National Market or any other securities exchange and included in each
established over-the-counter market on which or through which similar securities
of the Corporation are listed or traded and, if not so listed or traded, to be
listed on the NASD automated quotation system ("Nasdaq") and, if listed on
Nasdaq, use its reasonable efforts to secure designation of all such

                                       13

<PAGE>

Registrable Securities covered by such registration statement as a Nasdaq
"national market system security" within the meaning of Rule 11Aa2-1 under the
Exchange Act, or, failing that, to secure Nasdaq authorization for such
Registrable Securities;

                    (x) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any disposition
pursuant to such registration statement, and any attorney, accountant or other
agent retained by any such seller or underwriter all financial and other
records, pertinent corporate documents and properties of the Corporation, and
cause the Corporation's officers, directors, employees, attorneys and
independent accountants to supply all information reasonably requested by any
such sellers, underwriters, attorneys, accountants or agents in connection with
such registration statement. Information that the Corporation determines, in
good faith, to be confidential shall not be disclosed by such persons unless (a)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in such registration statement, or (b) the release of
such information is ordered pursuant to a subpoena or other order from a court
of competent jurisdiction. Each seller of Registrable Securities agrees, on its
own behalf and on behalf of all its underwriters, accountants, attorneys and
agents, that the information obtained by it as a result of such inspections
shall be deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Corporation unless and until such
is made generally available to the public. Each seller of Registrable Securities
further agrees, on its own behalf and on behalf of all its underwriters,
accountants, attorneys and agents, that it will, upon learning that disclosure
of such information is sought in a court of competent jurisdiction, give notice
to the Corporation and allow the Corporation, at its expense, to undertake
appropriate action to prevent disclosure of the information deemed confidential;

                    (xi) use its best efforts to comply with all applicable laws
related to such registration statement and offering and sale of securities and
all applicable rules and regulations of governmental authorities in connection
therewith (including, without limitation, the Securities Act and the Exchange
Act) and make generally available to its security holders as soon as practicable
(but in any event not later than fifteen (15) months after the effectiveness of
such registration statement) an earnings statement of the Corporation and its
subsidiaries complying with Section 11(a) of the Securities Act;

                    (xii) permit any seller of Registrable Securities that, in
its sole and exclusive judgment, might be deemed to be an underwriter or
controlling person of the Corporation to participate in the preparation of such
registration statement and to require the insertion therein of material
furnished to the Corporation in writing that in the reasonable judgment of such
holder and such holder's counsel should be included;

                                       14

<PAGE>

                    (xiii) use reasonable best efforts to furnish to each seller
of Registrable Securities a signed counterpart of (a) an opinion of counsel for
the Corporation and (b) a comfort letter signed by the independent public
accountants who have certified the Corporation's financial statements included
or incorporated by reference in such registration statement, covering such
matters with respect to such registration statement and, in the case of the
accountants' comfort letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' comfort letters delivered to the underwriters in
underwritten Public Offerings of securities for the account of, or on behalf of,
an issuer of common stock, such opinion and comfort letters to be dated the date
such opinions and comfort letters are customarily dated in such transactions,
and covering in the case of such legal opinion, such other legal matters and, in
the case of such comfort letter, such other financial matters, as Fund IV or
Additional Stockholders may reasonably request; and

                    (xiv) take all such other actions as Fund IV or Additional
Stockholders or the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities.

               (b) Underwriting. Without limiting any of the foregoing, in the
event that any offering of Registrable Securities is to be made by or through an
underwriter, the Corporation shall enter into an underwriting agreement with a
managing underwriter or underwriters containing representations, warranties,
indemnities and agreements customarily included (but not inconsistent with the
agreements contained herein) by an issuer of common stock in underwriting
agreements with respect to offerings of common stock for the account of, or on
behalf of, such issuers. In connection with the sale of Registrable Securities
hereunder, any seller of such Registrable Securities may, at its option, require
that any and all representations and warranties by, and indemnities and
agreements of, the Corporation to or for the benefit of such underwriter or
underwriters (or which would be made to or for the benefit of such an
underwriter or underwriter if such sale of Registrable Securities were pursuant
to a customary underwritten offering) be made to and for the benefit of such
seller and that any or all of the conditions precedent to the obligations of
such underwriter or underwriters (or which would be so for the benefit of such
underwriter or underwriters under a customary underwriting agreement) be
conditions precedent to the obligations of such seller in connection with the
disposition of its securities pursuant to the terms hereof (it being agreed that
in connection with any Demand Registration, without limiting any rights or
remedies of Fund IV or the Additional Stockholders, in the event any such
condition precedent shall not be satisfied and, if not so satisfied, shall not
be waived by Fund IV, such Demand Registration shall not be counted as a
permitted Demand Registration hereunder). In connection with any offering of
Registrable Securities registered pursuant to this Agreement, the Corporation
shall (i) furnish to the underwriter, if any (or, if no underwriter, the sellers
of such Registrable Securities), unlegended certificates representing ownership
of the Registrable Securities being sold, in such

                                       15

<PAGE>

denominations as requested and (ii) instruct any transfer agent and registrar of
the Registrable Securities to release any stop transfer order with respect
thereto.

               (c) Return of Prospectuses. Each seller of Registrable Securities
hereunder agrees that upon receipt of any notice from the Corporation of the
happening of any event of the kind described in Section 4.05(a)(viii), such
seller shall forthwith discontinue such seller's disposition of Registrable
Securities pursuant to the applicable registration statement and prospectus
relating thereto until such seller's receipt of the copies of the supplemented
or amended prospectus contemplated by Section 4.05(a)(viii) and, if so directed
by the Corporation, deliver to the Corporation all copies, other than permanent
file copies, then in such seller's possession of the prospectus current at the
time of receipt of such notice relating to such Registrable Securities. In the
event the Corporation shall give such notice, the ninety (90)-day period during
which such registration statement must remain effective pursuant to this
Agreement shall be extended by the number of days during the period from the
date of giving of a notice regarding the happening of an event of the kind
described in Section 4.05(a)(viii) to the date when all such sellers shall
receive such a supplemented or amended prospectus and such prospectus shall have
been filed with the Commission.

          Section 4.06 Registration Expenses. All expenses incident to the
Corporation's performance of, or compliance with, its obligations under this
Agreement, including, without limitation, all registration and filing fees, all
fees and expenses of compliance with securities and "blue sky" laws (including,
without limitation, the fees and expenses of counsel for underwriters or
placement or sales agents, if any, in connection therewith), all printing and
copying expenses, all messenger and delivery expenses, all fees and expenses of
underwriters and sales and placement agents, if any, in connection therewith
(excluding discounts and commissions and the fees and expenses of counsel
therefor), all fees and expenses of the Corporation's independent certified
public accountants and counsel (including, without limitation, with respect to
"comfort" letters and opinions) (collectively, the "Registration Expenses")
shall be borne by the Corporation; provided, however, that in the case of a
Piggyback Registration, all incremental costs resulting from applicable federal
and "blue sky" registration and filing fees, National Association of Securities
Dealers, Inc. filing fees, the expenses and fees for listing the securities to
be registered on each securities exchange and included in each established
over-the-counter market on which similar securities issued by the Corporation
are then listed or traded or for listing on Nasdaq and underwriting discounts
and commissions allocable to each of Fund IV and any Additional Stockholder
selling Registrable Securities shall be borne by such stockholder. The
Corporation shall be responsible for the fees and expenses of one (1) legal
counsel retained by Fund IV in connection with the sale of Registrable
Securities. Notwithstanding the foregoing, the Corporation shall not be
responsible for the fees and expenses of any additional counsel, or any of the
accountants, agents or experts retained by Fund IV or the Additional
Stockholders in connection with the sale of Registrable Securities. The
Corporation will pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties, the expense of any annual audit and the expense of any
liability insurance) (collectively, "Internal Expenses") and,

                                       16

<PAGE>

except as otherwise provided in this Section 4.06, the expenses and fees for
listing the securities to be registered on each securities exchange and included
in each established over-the-counter market on which similar securities issued
by the Corporation are then listed or traded or for listing on Nasdaq.

          Section 4.07 Indemnification.

               (a) By the Corporation. The Corporation agrees to indemnify, to
the fullest extent permitted by law, each holder of Registrable Securities being
sold, its officers, directors, members, employees and agents and each Person who
controls (within the meaning of the Securities Act) such holder or such an other
indemnified Person against all losses, claims, damages, liabilities and expenses
(collectively, the "Losses") caused by, resulting from or relating to any untrue
or alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or a fact necessary to make the statements therein
not misleading, except insofar as the same are caused by or contained in any
information furnished to the Corporation in writing by or on behalf of such
holder expressly for use therein or by such holder's failure to deliver a copy
of the registration statement or prospectus or any amendments or supplements
thereto after the Corporation has furnished such holder with a sufficient number
of copies of the same. In connection with an underwritten offering and without
limiting any of the Corporation's other obligations under this Agreement, the
Corporation shall indemnify such underwriters, their officers, directors,
employees and agents and each Person who controls (within the meaning of the
Securities Act) such underwriters or such an other indemnified Person to the
same extent as provided above with respect to the indemnification of the holders
of Registrable Securities being sold.

               (b) By Holders of Registrable Securities. In connection with any
registration statement in which a holder of Registrable Securities is
participating, each such holder will furnish, or cause to be furnished, to the
Corporation in writing information regarding such holder's ownership of
Registrable Securities and its intended method of distribution thereof and, to
the extent permitted by law, shall indemnify the Corporation, its directors,
officers, employees and agents and each Person who controls (within the meaning
of the Securities Act) the Corporation or such an other indemnified Person
against all Losses caused by, resulting from or relating to any untrue or
alleged untrue statement of material fact contained in the registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or omission is
caused by and contained in such information so furnished in writing by or on
behalf of such holder; provided, however, that each holder's obligation to
indemnify the Corporation hereunder shall be apportioned between each holder
based upon the net amount received by each holder from the sale of Registrable
Securities, as compared to the total net amount received by all of the holders
of Registrable Securities sold pursuant

                                       17

<PAGE>

to such registration statement, no such holder being liable to the Corporation
in excess of such apportionment.

               (c) Notice. Any Person entitled to indemnification hereunder
shall give prompt written notice to the indemnifying party of any claim with
respect to which its seeks indemnification; provided, however, the failure to
give such notice shall not release the indemnifying party from its obligation,
except to the extent that the indemnifying party has been materially prejudiced
by such failure to provide such notice.

               (d) Defense of Actions. In any case in which any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof the indemnifying party will not (so long as it shall
continue to have the right to defend, contest, litigate and settle the matter in
question in accordance with this paragraph) be liable to such indemnified party
hereunder for any legal or other expense subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation, supervision and monitoring (unless such indemnified
party reasonably objects to such assumption on the grounds that there may be
defenses available to it which are different from or in addition to the defenses
available to such indemnifying party, in which event the indemnified party shall
be reimbursed by the indemnifying party for the expenses incurred in connection
with retaining separate legal counsel). An indemnifying party shall not be
liable for any settlement of an action or claim effected without its consent.
The indemnifying party shall lose its right to defend, contest, litigate and
settle a matter if it shall fail diligently to contest such matter (except to
the extent settled in accordance with the next following sentence). No matter
shall be settled by an indemnifying party without the consent of the indemnified
party (which consent shall not be unreasonably withheld).

               (e) Survival. The indemnification provided for under this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified Person and will survive the transfer of
the Registrable Securities and the termination of this Agreement until the
expiration of all applicable statutes of limitations.

               (f) Contribution. If recovery is not available under the
foregoing indemnification provisions for any reason or reasons other than as
specified therein, any Person who would otherwise be entitled to indemnification
by the terms thereof shall nevertheless be entitled to contribution with respect
to any Losses with respect to which such Person would be entitled to such
indemnification but for such reason or reasons. In determining the amount of
contribution to which the respective Persons are entitled, there shall be
considered the Persons' relative knowledge and access to information concerning
the matter with respect to which the claim was asserted, the

                                       18

<PAGE>

opportunity to correct and prevent any statement or omission, and other
equitable considerations appropriate under the circumstances. It is hereby
agreed that it would not necessarily be equitable if the amount of such
contribution were determined by pro rata or per capita allocation. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not found guilty of such fraudulent misrepresentation. Notwithstanding the
foregoing, neither Fund IV nor any Additional Stockholder shall be required to
make a contribution in excess of the net amount received by such holder from the
sale of Registrable Securities.

                                   ARTICLE V

                                  Miscellaneous

          Section 5.01 Inconsistent Agreements. Without the prior written
consent of Fund IV, the Corporation shall not enter into any registration rights
agreement that conflicts, or is inconsistent, with the provisions of Article IV
of this Agreement.

          Section 5.02 Specific Performance. Each of the Stockholders
acknowledges and agrees that in the event of any breach of this Agreement, the
non-breaching party or parties would be irreparably harmed and could not be made
whole solely by monetary damages. The Stockholders hereby agree that, in
addition to any other remedy to which any party may be entitled at law or in
equity, they shall be entitled to compel specific performance of this Agreement
in any action instituted in any court of the United States or any state thereof
having subject matter jurisdiction for such action.

          Section 5.03 Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of any provisions hereof.

          Section 5.04 Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein, and there are no restrictions, promises,
representations, warranties, covenants, conditions or undertakings with respect
to the subject matter hereof, other than those expressly set forth or referred
to herein. This Agreement supersedes all prior agreements and understandings
between the parties hereto with respect to the subject matter hereof, including
the Original Agreement.

          Section 5.05 Notices. All notices and other communications required or
permitted to be given hereunder shall be in writing and shall be (i) delivered
by hand, (ii) delivered by a nationally recognized commercial overnight delivery
service, (iii) mailed postage prepaid by first class mail, or (iv) transmitted
by facsimile transmission at the address or telecopier number set forth below.
Such notices shall be effective: (A) in the case of hand deliveries when
received; (B) in the case of an overnight delivery service, on the next business
day after being placed in the possession of such delivery service, with delivery
charges prepaid; (C) in the case of mail, seven (7) days after deposit in the

                                       19

<PAGE>

postal system, first class mail, postage prepaid; and (D) in the case of
facsimile notices, when electronic confirmation of receipt is received by the
sender. Any party may change its address and telecopy number by written notice
to the other given in accordance with this Section 5.05.

          If to the Corporation, to:

               PGT, Inc.
               1070 Technology Drive
               Nokomis, FL 34275
               Attention: Mario Ferrucci III
               Facsimile: (941) 480-2767

               with a copy to:

               Skadden, Arps, Slate, Meagher & Flom LLP
               One Rodney Square
               Wilmington, DE 19801
               Attention: Robert B. Pincus, Esq.
               Fax: (302) 651-3001

          If to JLL Fund IV, L.P., to:

               JLL Partners Fund IV, L.P.
               450 Lexington Avenue, Suite 3350
               New York, NY 10017
               Attention: Ramsey A. Frank
               Facsimile: (212) 286-8626

               with a copy to:

               Skadden, Arps, Slate, Meagher & Flom LLP
               One Rodney Square
               Wilmington, DE 19801
               Attention: Robert B. Pincus, Esq.
               Fax: (302) 651-3001

          If to any of the Management Investors, at the address set forth on the
Corporation's transfer books. If to any of the Additional Stockholders, at the
address furnished to the Corporation by such Additional Stockholder at the time
it becomes a signatory to this Agreement.

          Section 5.06 Applicable Law. The substantive laws of the State of
Delaware shall govern the interpretation, validity and performance of the terms
of this Agreement, regardless of the law that might be applied under applicable
principles of conflicts of laws. THE PARTIES HERETO WAIVE THEIR RIGHT TO A JURY

                                       20
<PAGE>

TRIAL WITH RESPECT TO DISPUTES HEREUNDER; ALL SUCH DISPUTES SHALL BE SETTLED BY
BINDING ARBITRATION PURSUANT TO THE RULES OF THE AMERICAN ARBITRATION
ASSOCIATION IN NEW YORK, NEW YORK, AND THE ORDER OF SUCH ARBITRATORS SHALL BE
FINAL AND BINDING ON ALL PARTIES HERETO AND MAY BE ENTERED AS A JUDGMENT IN A
COURT HAVING JURISDICTION OVER THE PARTIES.

          Section 5.07 Severability. The invalidity, illegality or
unenforceability of one or more of the provisions of this Agreement in any
jurisdiction shall not affect the validity, legality or enforceability of the
remainder of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including, without limitation, any such
provision, in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest extent
permitted by law.

          Section 5.08 Successors; Assigns; Third-Party Beneficiaries. The
provisions of this Agreement shall be binding upon the parties hereto and their
respective heirs, successors and permitted assigns. Fund IV may assign all or
any portion of its rights hereunder in connection with the transfer by Fund IV
of Shares to a Permitted Transferee. The parties acknowledge and agree that in
the event of any such assignment by Fund IV, all references to Fund IV hereunder
shall be deemed to include such Permitted Transferee to the extent the
applicable rights have been assigned, in whole or in part, to such Permitted
Transferee. This Agreement is for the sole benefit of the parties hereto and
their respective heirs, successors and permitted assigns and no provision
hereof, whether express or implied, is intended, or shall be construed, to give
any other Person any other rights or remedies, whether legal or equitable,
hereunder.

          Section 5.09 Amendments. This Agreement may not be amended, modified
or supplemented unless such modification is in writing and signed by (a) the
Corporation and (b) Fund IV.

          Section 5.10 Waiver. Any waiver (express or implied) of any default or
breach of this Agreement shall not constitute a waiver of any other or
subsequent default or breach.

          Section 5.11 Counterparts. This Agreement may be executed in two or
more counterparts (including by facsimile), each of which shall be deemed an
original but all of which shall constitute one and the same Agreement.

          Section 5.12 Term. This Agreement shall be subject to, and shall be
effective immediately prior to, the consummation of the Initial Public Offering.
As of the time that this Agreement becomes effective, the Original Agreement
shall immediately terminate and all rights and obligations thereunder shall be
of no further force and effect, except that such termination of the Original
Agreement shall not relieve any Stockholder from liability for any breach of the
Original Agreement occurring prior to such termination. In the event that the
Initial Public Offering is not consummated, this

                                       21

<PAGE>

Agreement shall not become effective, and the Original Agreement shall continue
in full force and effect. Unless earlier terminated, this Agreement shall
terminate upon the seventh anniversary of the consummation of the Initial Public
Offering; provided, however, that the provisions of Section 4.07 shall survive
termination until the expiration of all applicable statutes of limitations; and
provided further that, to the extent that any Demand Registration or Piggyback
Registration has commenced at such time, this Agreement shall remain in effect
until the termination or expiration of such Demand Registration or Piggyback
Registration, as the case may be, and the obligations of Fund IV and the
Additional Stockholders pursuant to Section 4.04 hereof shall continue until 90
days following the effectiveness of the Registration Statement related thereto.

                            [SIGNATURE PAGES FOLLOW]

                                       22

<PAGE>

          IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the
terms and provisions of this Amended and Restated Security Holders' Agreement as
of the date first above written.

                                        PGT, INC.

                                        By: /s/ Jeffrey T. Jackson
                                            ------------------------------------
                                        Name: Jeffrey T. Jackson
                                              ----------------------------------
                                        Title: Chief Financial Officer and
                                               Treasurer
                                               ---------------------------------

                                        JLL PARTNERS FUND IV, L.P.

                                        By: /s/ Paul S. Levy
                                            ------------------------------------
                                        Name: Paul S. Levy
                                              ----------------------------------
                                        Title: Managing Member
                                               ---------------------------------

                                        MANAGEMENT INVESTORS:

                                        /s/ Rodney Hershberger
                                        ----------------------------------------
                                        Name: Rodney Hershberger

                                        /s/ Jeffrey T. Jackson
                                        ----------------------------------------
                                        Name: Jeffrey T. Jackson

                                        /s/ Herman W. Moore
                                        ----------------------------------------
                                        Name: Herman W. Moore

                                        /s/ Bruce W. Varnadore
                                        ----------------------------------------
                                        Name: Bruce W. Varnadore

<PAGE>

                                        /s/ Linda Gavit
                                        ----------------------------------------
                                        Name: Linda Gavit

                                        /s/ John I. Rankin
                                        ----------------------------------------
                                        Name: John I. Rankin

                                        /s/ Robert B. McCutcheon
                                        ----------------------------------------
                                        Name: Robert B. McCutcheon

                                        /s/ Bradford J. Voss
                                        ----------------------------------------
                                        Name: Bradford J. Voss

                                        /s/ Deborah L. LaPinska
                                        ----------------------------------------
                                        Name: Deborah L. LaPinska

                                       24

<PAGE>

                                        /s/ Randy L. White
                                        ----------------------------------------
                                        Name: Randy L. White

                                        /s/ David McCutcheon
                                        ----------------------------------------
                                        Name: David McCutcheon

                                        /s/ Julie A. Heinsman
                                        ----------------------------------------
                                        Name: Julie A. Heinsman

                                        /s/ Kevin Harris
                                        ----------------------------------------
                                        Name: Kevin Harris

                                        /s/ Todd Waggoner
                                        ----------------------------------------
                                        Name: Todd Waggoner

                                        /s/ Cara L. Dohnalek
                                        ----------------------------------------
                                        Name: Cara L. Dohnalek

                                        /s/ Brad Beachy
                                        ----------------------------------------
                                        Name: Brad Beachy

                                        /s/ William I. White
                                        ----------------------------------------
                                        Name: William I. White

                                        /s/ Kenneth W. Hilliard
                                        ----------------------------------------
                                        Name: Kenneth W. Hilliard

                                       25

<PAGE>

                                        /s/ Gretchen Reimanl-Moussa
                                        ----------------------------------------
                                        Name: Gretchen Reimal-Moussa

                                        /s/ Debra Madison
                                        ----------------------------------------
                                        Name: Debra Madison

                                        /s/ Jeffrey Slabach
                                        ----------------------------------------
                                        Name: Jeffrey Slabach

                                        /s/ Gary Stokes
                                        ----------------------------------------
                                        Name: Gary Stokes

                                        /s/ James Cassidy
                                        ----------------------------------------
                                        Name: James Cassidy

                                        /s/ Samuel Bryant
                                        ----------------------------------------
                                        Name: Samuel Bryant

                                        /s/ David Olmstead
                                        ----------------------------------------
                                        Name: David Olmstead

                                        /s/ Monte Burns
                                        ----------------------------------------
                                        Name: Monte Burns

                                       26

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