Document:

EXHIBIT 10.1

 

EXHIBIT 10.1

STOCK PURCHASE AGREEMENT

     STOCK
PURCHASE AGREEMENT, dated as of December 13, 2004 (this “Agreement”),
by and among MatlinPatterson Global Advisers LLC, a Delaware limited liability
company (“Matlin Advisers”), MatlinPatterson Global Opportunities Partners,
L.P., a Delaware limited partnership (“Matlin Partners (Delaware)”),
MatlinPatterson Global Opportunities Partners (Bermuda) L.P., a Bermuda exempt
limited partnership (“Matlin Partners (Bermuda)”) and NRG Energy, Inc., a
Delaware corporation (the “Company”).

RECITALS

     WHEREAS, each Seller owns the Common Shares set forth opposite such
Seller’s name as shown in Exhibit A attached hereto and made a part hereof
under the heading “Total Shares” (the “Total Shares”); and

     WHEREAS, each Seller desires to sell, and the Company desires to purchase
from each Seller, the number of Common Shares set forth opposite such Seller’s
name as shown on Exhibit A under the heading “Seller Shares” (the “Seller
Shares”) on the terms and conditions set forth herein (the “Share Purchase”);
and

     WHEREAS, in connection with the consummation of the Share Purchase, the
Company intends to issue $400 million of convertible perpetual preferred stock of the Company
in a private placement qualified under Section 4(2) of the
Securities Act of 1933 (the “Financing”); and

     WHEREAS, the parties desire to make certain representations, warranties
and agreements in connection with the Share Purchase and also to prescribe
certain conditions to the Share Purchase as provided in this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained herein, and intending to be legally bound
hereby, the parties agree as follows:

ARTICLE I

DEFINITIONS

     1.1 Defined Terms. For all purposes of this Agreement, the following
terms shall have the respective meanings set forth in this Section 1.1 (such
definitions to be equally applicable to both the singular and plural forms of
the terms herein defined):

     “Affiliate” of a specified Person means any other Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or
is under common control with the specified Person. For the purposes of this
definition, the term “control,” when used with respect to a specified Person,
means the possession, direct or indirect, of the power to direct or cause the
direction of the management or policies of the specified Person. For purposes
of this definition the terms “controlled by” or “under

 

common control with” shall have correlative meanings. For purposes of
this definition, a manager or general partner of a specified Person shall be
deemed to “control” the specified Person.

     “Agreement” has the meaning set forth in the preamble hereof.

     “Bank Consent” has the meaning set forth in Section 4.2(b) hereof.

     “Closing” has the meaning set forth in Section 2.2 hereof.

     “Closing Date” has the meaning set forth in Section 2.2 hereof.

     “Common Shares” means the shares of common stock of the Company, par value
$.01 per share.

     “Company” has the meaning set forth in the preamble hereof.

     “Company Indemnified Persons” has the meaning set forth in Section 8.7(a)
hereof.

     “Consultation” has the meaning set forth in Section 5.10 hereof.

     “Disputed Claims Reserve” shall have the meaning ascribed to such term in
the Debtor’s Second Amended Joint Plan of Reorganization Pursuant to Chapter 11
of the Bankruptcy Code, confirmed on November 24, 2003, in the Chapter 11
bankruptcy of the Company and certain of its subsidiaries.

     “Encumbrances” means any and all liens, charges, security interests,
options, claims, mortgages, rights of first refusal, pledges, proxies, voting
trusts or agreements, obligations, understandings or arrangements or other
restrictions on use, voting, title, transfer or any other attribute of
ownership of any nature whatsoever.

     “Exchange Act” has the meaning set forth in Section 3.2(b) hereof.

     “Fairness Opinion” has the meaning set forth in Section 4.4 hereof.

     “Financing” has the meaning set forth in the recitals hereof.

     “Governmental Entity” means any domestic or foreign court, administrative
or regulatory agency or commission or other governmental authority or
instrumentality.

     “Information” has the meaning set forth in Section 5.5(a) hereof.

     “Injunction” has the meaning set forth in Section 6.1(a) hereof.

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     “Judgments” means any judgments, injunctions, stays, decrees, orders,
writs, rulings or awards of any court or other judicial authority or any
Governmental Entity of competent jurisdiction.

     “Laws” means any national, regional, federal, state, local or foreign
laws, statutes, treaties, codes, ordinances, rules, regulations, orders or
decrees of any Governmental Entity.

     “Management Letter” means the letter from the Company to Matlin Partners
(Delaware) in substantially the form attached hereto as Exhibit C.

     “Matlin Advisers” has the meaning set forth in the preamble.

     “Matlin Indemnified Persons” has the meaning set forth in Section 8.7(b)
hereof.

     “Matlin Partners (Bermuda)” has the meaning set forth in the preamble.

     “Matlin Partners (Delaware)” has the meaning set forth in the preamble.

     “MatlinPatterson Party” means each of Matlin Advisers, Matlin Partners
(Delaware) and Matlin Partners (Bermuda), and “MatlinPatterson Parties” means
Matlin Advisers, Matlin Partners (Delaware) and Matlin Partners (Bermuda),
collectively.

     “Permits” means all permits, authorizations, approvals, registrations,
licenses, certificates, variances and similar rights granted by or obtained
from any Governmental Entity.

     “Person” means an individual, partnership, limited partnership, limited
liability partnership, limited liability company, foreign limited liability
company, trust, estate, corporation, custodian, trustee, executor,
administrator, nominee, joint venture, association, Governmental Entity or any
other entity.

     “Purchase Price” has the meaning set forth in Section 2.1 hereof.

     “Registration Rights Agreement” means that certain Registration Rights
Agreement, dated as of December 5, 2003, by and among the Company and Sellers.

     “Related Persons” has the meaning set forth in Section 5.5(b) hereof.

     “Reserve Rights” has the meaning set forth in Section 3.3(c) hereof.

     “Restricted Period” means the date beginning on the date of this Agreement
and ending on the date on which the restrictions in Section 5.3 hereof
terminate in accordance with the terms of such Section.

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     “Retained
Share Certificate” has the meaning set forth in
Section 5.12 hereof.

     “Seller” means each of Matlin Partners (Delaware) and Matlin Partners
(Bermuda), and “Sellers” means Matlin Partners (Delaware) and Matlin Partners
(Bermuda), collectively.

     “Seller
Share Certificate” has the meaning set forth in
Section 5.12 hereof.

     “Seller Shares” has the meaning set forth in the recitals hereof.

     “Share Purchase” has the meaning set forth in the recitals hereof.

     “Termination Date” means December 31, 2004.

     “Total Shares” has the meaning set forth in the recitals hereof.

     1.2 Interpretation. When a reference is made in this Agreement to
“Articles,” “Sections,” “Exhibits” or “Schedules,” such reference shall be to
the corresponding Articles or Sections of, or Exhibits or Schedules to, this
Agreement unless otherwise indicated. The headings contained in this Agreement
and in any Exhibits or Schedules to this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words “include”, “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation”. The phrases “the date of this Agreement”, “the date hereof” and
terms of similar import, unless the context otherwise requires, shall be deemed
to refer to December 13, 2004. The parties hereby acknowledge and agree that
(a) each party and its counsel have reviewed and negotiated the terms and
provisions of this Agreement and have contributed to its revision, (b) the rule
of construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement
and (c) the terms and provisions of this Agreement shall be construed fairly as
to all parties hereto, regardless of which party was generally responsible for
the preparation of this Agreement.

ARTICLE II

PURCHASE AND SALE OF SELLER SHARES; PURCHASE PRICE

     2.1 General.
On the terms and subject to the conditions hereof, at the
Closing, each Seller shall sell, transfer, assign, convey and deliver to the
Company, and the Company shall purchase and accept from each Seller, the Seller
Shares set forth opposite such Seller’s name as shown on Exhibit A under the
heading “Seller Shares”, free and clear of all Encumbrances, for a price per
Common Share equal to the lesser of (a) the closing
stock price of the Common Shares on the business day on which the
conversion price of the shares to be issued in the Financing is
determined by the Company and the placement agents of
the Financing, less three percent (3%) of such closing stock price or
(b) the closing stock price of the Common Shares on the date of
this Agreement (the
aggregate amount to be paid for all of the Seller Shares being the “Purchase
Price”).

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     2.2 Closing. Subject to the terms and conditions of this Agreement, the
closing of the Share Purchase (the “Closing”) will take place at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York, as promptly as
practicable after the satisfaction or waiver (by the party entitled to waive
the condition) of all of the conditions set forth in Article VI hereof (other
than those conditions that by their nature are to be fulfilled only at the
Closing, but subject to the fulfillment or waiver (by the party entitled to
waive the condition) of all such conditions at the time of the Closing), unless
another time, date or place is agreed to in writing by the parties hereto. The
date on which the Closing occurs is referred to herein as the “Closing Date.”

     2.3 Deliveries at Closing.

          (a) At the Closing, the Company shall deliver or cause to be delivered:

     (i) to Sellers, the Purchase Price, by wire transfer of
immediately available funds in United States dollars in accordance
with the wire transfer instructions set forth on Schedule I
hereto;

     (ii) to Matlin Partners (Delaware), a copy of the Management
Letter, duly executed and delivered by the Company;

     (iii)
to each Seller, one (1) stock certificate representing that number of
Common Shares represented by the Retained Share Certificate issued to
such Seller in accordance with Section 5.12(b), in proper form for transfer without any stock legend or
other similar notation as provided in Section 5.12(ii) hereof;

     (iv)
the Company shall pay to the MatlinPatterson Parties, or reimburse
the MatlinPatterson Parties for, as the case may be, the reasonable
fees and disbursements of one law firm representing the
MatlinPatterson Parties incurred solely with respect to the Share
Purchase in accordance with Section 8.1 hereof; and

     (v) to the MatlinPatterson Parties, such other documents and
instruments required to be delivered by the Company at or prior to
the Closing Date pursuant to this Agreement.

          (b) At the Closing:

     (i)
each Seller shall deliver or cause to be delivered to the Company (A)
the Retained Share Certificate and the Seller Share Certificate
issued to it in accordance with Section 5.12(b) hereof, as
provided in Section 5.12(i)(A) hereof and (B) for such
Seller Share Certificate, a stock power effectively endorsed to the
Company or in blank, as provided in Section 5.12(i)(B) hereof;

     (ii) each MatlinPatterson Party shall deliver or cause to be
delivered to the Company such other documents and instruments
required to be delivered by it at or prior to the Closing Date
pursuant to this Agreement.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE MATLINPATTERSON PARTIES

     Each MatlinPatterson Party hereby represents and warrants to the Company
as of the date hereof and as of the Closing Date as to itself (including,
without limitation, the representations and warranties contained in Sections
3.2 (b), and 3.3(b), (c) and (d) hereof which are made only as to itself,
except Matlin Advisers hereby makes such representations and warranties as to
itself and as to all of its Affiliates) as follows:

     3.1 Organization. It is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation.

     3.2 Authority; No Violation.

          (a) It has the full limited liability company or partnership power and
authority to execute and deliver each of this Agreement and the other documents
required to be executed and delivered by it pursuant to this Agreement, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of
each of this Agreement and the other documents required to be executed and
delivered by it pursuant to this Agreement, and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
approved by its board of directors, managing partners or other managing
authority, and no other limited liability company, partnership or other
organizational proceedings on its part are necessary to approve this Agreement
or any of the other documents required to be executed and delivered by it
pursuant to this Agreement or to consummate the transactions contemplated
hereby or thereby. It has duly executed and delivered this Agreement and this
Agreement constitutes its binding obligation, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or similar laws relating to
creditors’ rights and general equity principles. At or prior to the Closing,
it will duly execute and deliver each other document required to be executed
and delivered by it pursuant to this Agreement and such other documents shall
constitute its binding obligation, enforceable against it in accordance with
their terms, subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws relating to creditors’ rights and
general equity principles.

          (b) The execution, delivery and performance by it of this Agreement and
the other documents required to be executed and delivered by it pursuant to
this Agreement, and the consummation by it of the transactions contemplated
hereby and thereby, do not and will not (i) require any authorization, consent,
waiver, approval, exemption, permit or order of or other action by, or notice
or declaration to, or filing with, any Governmental Entity under any Law
applicable to it or any of its assets, except for any filings required to be
made under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or any regulations promulgated thereunder, (ii) violate any provision of
any of its partnership agreements, limited liability company membership

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agreements, articles or certificates of formation, articles or
certificates of limited partnership or other governing documents or the
partnership agreements, limited liability company membership agreements,
articles or certificates of incorporation, by-laws or other governing documents
of any of its Affiliates, (iii) violate any Law, Permit or Judgment applicable
to it or any of its Affiliates, or any of their respective properties or
assets, or give any Governmental Entity the right to challenge any of the
transactions contemplated by this Agreement or (iv) violate, conflict with,
result in a breach of any provision of or the loss of any benefit under,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any Encumbrance upon any of its properties or assets
or those of its Affiliates (including, but not limited to, the Seller Shares)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement (written or oral) or other
instrument or obligation to which it or any of its Affiliates is a party, or by
which they or any of their respective properties or assets (including, but not
limited to, the Seller Shares) may be bound or affected.

     3.3 Ownership of Total Shares, Seller Shares; Good Title Conveyed; Other
Rights; Resignations.

          (a) It owns beneficially and of record the number of Total Shares set
forth on Exhibit A opposite its name under the heading “Total Shares”. It owns
beneficially and of record the number of Seller Shares set forth on Exhibit A
opposite its name under the heading “Seller Shares”, free and clear of any
Encumbrances. At the Closing, it will deliver to the Company, and the Company
will acquire, good and valid title to, the Seller Shares set forth on Exhibit A
opposite its name under the heading “Seller Shares”, free and clear of any
Encumbrances.

          (b) The Total Shares set forth on Exhibit A under the heading “Total
Shares” represent all of the Common Shares and other voting securities of the
Company owned by the MatlinPatterson Parties and their Affiliates and none of
the MatlinPatterson Parties nor any of their Affiliates own beneficially or of
record any other Common Shares or other voting securities of the Company. None
of the MatlinPatterson Parties nor any of their Affiliates have any agreements
(written or oral), arrangements, commitments or understandings with any Person
with regard to the Total Shares (including, but not limited to, the Seller
Shares), other than the Registration Rights Agreement and this Agreement.

          (c) Exhibit B attached hereto and made a part hereof accurately and
completely describes the rights of each of the MatlinPatterson Parties and
their Affiliates with respect to potential distributions from the Disputed
Claims Reserve (the “Reserve Rights”) currently owned by the MatlinPatterson
Parties and their Affiliates. Except as completely and accurately disclosed in
Exhibit B, none of the MatlinPatterson Parties nor their
Affiliates have any agreements
(written or oral), arrangements, commitments or understandings with any

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Person with regard to the Reserve Rights currently owned by any of the
MatlinPatterson Parties and/or their Affiliates.

          (d) Matlin Advisers has delivered, or has caused to be delivered, to the
Company fully executed letters of resignation from each of Mark Patterson,
Ramon Betolaza and Frank Plimpton as members of the Board of Directors of the
Company, effective at the time of the Closing, and copies of such fully
executed and delivered letters of resignation are attached hereto as Exhibit D.
Such letters of resignation are irrevocable and at the Closing Mark Patterson,
Ramon Betolaza and Frank Plimpton shall no longer be directors of the Company;
provided that if the Closing does not occur for any reason, such resignations
shall have no force and effect.

     3.4 Claims, Judgments. There are no claims, actions or proceedings
pending or, to its knowledge, threatened which, if adversely determined, could,
directly or indirectly, limit or impair its ability to enter into this
Agreement or any other document required to be entered into by it pursuant to
this Agreement or to consummate the transactions contemplated hereby or
thereby. There are no outstanding or unsatisfied Judgments to which it is a
party that could limit or impair its ability to enter into this Agreement or
any other document required to be entered into by it pursuant to this Agreement
or to consummate the transactions contemplated by this Agreement.

     3.5 Brokers. Neither it, its Affiliates nor its officers, directors,
employees or representatives has employed any broker or finder or incurred any
liability for any broker’s fees, commissions or finder’s fees in connection
with any of the transactions contemplated by this Agreement.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company hereby represents and warrants to each of the MatlinPatterson
Parties as of the date hereof and as of the Closing Date as follows:

     4.1 Corporate Organization. The Company is duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.

     4.2 Authority; No Violation.

          (a) The Company has the full corporate power and authority to execute and
deliver this Agreement, the other documents required to be executed and
delivered by the Company pursuant to this Agreement, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of each of this Agreement and the
other documents required to be executed and delivered by the Company pursuant
to this Agreement and the consummation of the transactions contemplated hereby
and thereby have been duly and validly approved by the board of directors of
the Company, and no other corporate proceedings on the part of the Company are
necessary to approve this Agreement or any other documents required to be
executed and delivered by the Company pursuant to this

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Agreement or to consummate the transactions contemplated hereby and
thereby. The Company has duly executed and delivered this Agreement and this
Agreement constitutes a binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar Laws
relating to creditors’ rights and general equity principles. At or prior to
the Closing, the Company will duly execute and deliver each other document
required to be executed and delivered by it pursuant to this Agreement and such
other documents shall constitute binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar Laws relating to creditors’ rights and general equity
principles. The Company has legally available funds under Section 160 of the
Delaware General Corporation Law from which to purchase the Seller Shares.

          (b) The execution, delivery and performance by the Company of this
Agreement and the other documents required to be executed and delivered by the
Company pursuant to this Agreement, and the consummation by the Company of the
transactions contemplated hereby and thereby, do not and will not (i) require
any authorization, consent, waiver, approval, exemption, permit or order of or
other action by, or notice or declaration to, or filing with, any Governmental
Entity under any Law applicable to the Company or any of its assets, except for
any filings required to be made under the Exchange Act, or any regulations
promulgated thereunder, and except for any filings required to be made with,
or any authorization, consent, waiver, approval, exemption, permit or order
required to be obtained from, the Federal Energy Regulatory Commission in
connection with the Financing, (ii) violate any provision of the certificate
of incorporation or by-laws of the Company, (iii) violate any Law, Permit or
Judgment applicable to the Company, or any of its properties or assets, or give
any Governmental Entity (other than the Federal Energy Regulatory Commission
in connection with the Financing) the right to challenge any of the
transactions contemplated by this Agreement or (iv) violate, conflict with,
result in a breach of any provision of or the loss of any benefit under,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any Encumbrance upon any of the properties or assets
of the Company under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement (written or
oral) or other instrument or obligation to which the Company is a party, or by
which any of its properties or assets may be bound or affected, except under
that certain Credit Agreement, dated as of December 23, 2003, by and among the
Company, NRG Power Marketing, Inc., the Lenders party thereto, Credit Suisse
First Boston, acting through its Cayman Islands Branch, Lehman Brothers Inc.,
as joint lead book runners and joint lead arrangers, Credit Suisse First
Boston, acting though its Cayman Islands Branch, as administrative agent,
General Electric Capital Corporation, as revolver agent, and Lehman Commercial
Paper Inc., as syndication agent, which consent is a condition to the
obligation of the Company to consummate the transactions contemplated by this
Agreement (the “Bank Consent”).

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     4.3 Claims, Judgments. There are no claims, actions or proceedings
pending or, to the knowledge of the Company, threatened which, if adversely
determined, could, directly or indirectly, limit or impair the ability of the
Company to enter into this Agreement or any other document required to be
entered into by it pursuant to this Agreement or to consummate the transactions
contemplated hereby or thereby. There are no outstanding or unsatisfied
Judgments to which the Company is a party that could limit or impair the
ability of the Company to enter into this Agreement or any other document
required to be entered into by it pursuant to this Agreement or to consummate
the transactions contemplated by this Agreement.

     4.4 Fairness Opinion. The Company has received an opinion of Houlihan
Lokey Howard & Zukin Financial Advisors, Inc., financial advisor to the Special
Committee of the Board of Directors of the Company, to the effect that, as of
the date hereof, the consideration to be paid by the Company pursuant to
Section 2.1 hereof is fair from a financial point of view to the Company and
the shareholders of the Company (other than the MatlinPatterson Parties and
their Affiliates) (the “Fairness Opinion”).

     4.5 Brokers. Neither the Company nor its officers, directors, employees
or representatives has employed any broker or finder or incurred any liability
for any broker’s fees, commissions or finder’s fees in connection with any of
the transactions contemplated by this Agreement, other than fees incurred in
connection with the Financing or obtaining the Fairness Opinion.

ARTICLE V

ADDITIONAL AGREEMENTS

     5.1 Reasonable Efforts. Each of the Company and the MatlinPatterson
Parties shall use its reasonable efforts (a) to take, or cause to be taken, all
actions necessary, proper or advisable to comply with all legal requirements
which may be imposed on such party with respect to the Share Purchase and,
subject to the conditions set forth in Article VI hereof, to consummate the
transactions contemplated by this Agreement and (b) to obtain (and to cooperate
with the other parties to obtain) any consent (including, without limitation,
the Bank Consent), authorization, order or approval of, or any exemption by,
any Governmental Entity or other third party which is required to be obtained
by it in connection with the Share Purchase and the other transactions
contemplated by this Agreement, and to comply with the terms and conditions of
such consent, authorization, order or approval. The Company shall use
reasonable efforts to complete the Financing.

     5.2 Further Assurances. In case at any time after the Closing any further
action is necessary to implement the terms of this Agreement, the parties will
cause their respective officers and directors to take all such necessary
actions as may be reasonably requested by the other party.

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     5.3 Certain Restrictions. After the Closing, without the prior consent of
the Company, none of the MatlinPatterson Parties nor its successors or assigns
shall, and each MatlinPatterson Party shall cause its Affiliates not to,
directly or indirectly, (a) acquire, offer to acquire or agree to acquire any
voting securities of the Company or any of its subsidiaries (other than
pursuant to (i) a dividend paid on its Common Shares or (ii) subject to the
last sentence of this Section 5.3, a distribution from the Disputed Claims
Reserve); (b) directly or indirectly seek to exert control over the Company,
any of its subsidiaries or their management or policies; (c) make any public
announcement with respect to, or submit any proposal for, or enter, offer or
agree to enter into any investment, acquisition or other business combination
relating to the Company or any of its subsidiaries; (d) solicit or join in the
solicitation of proxies to vote any voting securities of the Company or any of
its subsidiaries, or seek to advise or influence any person with respect to the
voting of any voting securities of the Company or any of its subsidiaries; (e)
otherwise act, either alone or in concert with others, to seek control of, or
influence over, the Company or any of its subsidiaries; (f) in any way assist
or join a third party or a group (as defined in Section 13(d)(3) of the
Exchange Act) in any of the foregoing; (g) disclose any intention, proposal,
plan or arrangement with respect to any of the foregoing; or (h) make any
demand, request or proposal to amend, waive or terminate any provision of this
Section 5.3. The restrictions contained in this Section 5.3 shall terminate
upon the earliest to occur of: (i) two (2) years from the date of this
Agreement, (ii) the mutual agreement of the Company and the MatlinPatterson
Parties, (iii) the public announcement by an offeror of an unsolicited proposal
to acquire the Company by merger, acquisition of assets or similar transaction
or (iv) the acquisition by a Person (other than the Company or any of its
Affiliates) or “group” of Persons (as defined in Section 13(d)(3) of the
Exchange Act) (other than the Company or any of its Affiliates) of beneficial
ownership of more than thirty-three percent (33%) of the voting securities of
the Company. Nothing contained in this Section 5.3 shall prohibit the
MatlinPatterson Parties and their Affiliates from acquiring voting securities
of the Company from time to time so long as the number of such voting
securities when added to the number of voting securities of the Company then
owned by the MatlinPatterson Parties and their Affiliates, individually and
collectively, does not exceed 9.9% of the outstanding voting securities of the
Company; provided, however, that if during the Restricted Period, as a result
of the Reserve Rights, the MatlinPatterson Parties and their Affiliates,
individually or collectively, own more than 9.9% of the voting securities of
the Company, the MatlinPatterson Parties shall, and shall cause their
Affiliates to, sell the minimum number of voting securities of the Company
required to be sold such that the number of voting securities of the Company
then owned by the MatlinPatterson Parties and their Affiliates, individually
and collectively, does not exceed 9.9% of the outstanding voting securities of
the Company; and provided further that, to the extent permitted by Law, the
Company shall use reasonable efforts to notify the MatlinPatterson Parties
and/or its Affiliates of any intended stock distribution from the Disputed
Claims Reserve prior to such distribution.

     5.4 Lock-up. After the Closing, each of the MatlinPatterson Parties
agrees that, during the period beginning on the Closing Date and continuing to
and including the date that is ninety (90) days after the Closing Date, it will
not, and it will

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cause its Affiliates not to, directly or indirectly, sell, transfer, make
any short sale of, loan or effect any distribution or other distribution of any
interest in any Common Shares.

     5.5 “Big Boy” Provisions. (a) Each of the MatlinPatterson Parties hereby
acknowledges and agrees that they know that the Company and/or its subsidiaries
may have material, non-public information regarding the Company and/or its
subsidiaries and their conditions (financial and otherwise), results of
operations, businesses, properties, plans and prospects (collectively,
“Information”). Each of the MatlinPatterson Parties also hereby acknowledges
and agrees that none of the Company nor any of its subsidiaries shall have any
obligation to disclose to any of the MatlinPatterson Parties any of such
Information.

          (b) Each of the MatlinPatterson Parties further acknowledges, agrees and
represents that they have adequate information concerning the business and
financial condition of the Company and its subsidiaries to make an informed
decision regarding the sale of the Seller Shares and have independently and
without reliance upon any of the Company, its subsidiaries or their agents made
their own analysis and decision to sell, or cause the sale of, the Seller
Shares. Each of the MatlinPatterson Parties hereby waives, releases, acquits
and forever discharges, to the fullest extent permitted by law, any and all
claims and causes of action they have or may have as of the Closing Date
against the Company, its subsidiaries, and/or their respective employees,
representatives and agents (collectively, “Related Persons”), based upon,
relating to or arising out of any nondisclosure of the Information, but not any
such claims or causes of actions based upon, relating to, or arising out of any
material misstatements or material omissions by the Company or any of its
Related Persons; provided that if the Closing does not occur for any reason,
the provisions of this Section 5.5 shall have no force or effect.

     5.6 Bank Consent Fee. The Company shall pay and
be responsible for any fees, charges or other payments
required to be paid to the lenders in connection with obtaining the Bank
Consent.

     5.7 Stop Orders. The Company acknowledges that, as of the date of this
Agreement, and assuming consummation of the transactions contemplated by this
Agreement and based on the facts known to it concerning the MatlinPatterson
Parties’ share ownership and other relationships with the Company, neither it
nor any Related Person is required under the federal securities laws to give
the Company’s transfer agent any instructions not to permit the transfer of any
Common Shares owned of record by any of the MatlinPatterson Parties or any of
their respective Affiliates except if such transfer is in violation of Section
5.4 hereof. The Company agrees that absent a change in the facts and
circumstances referenced in the preceding sentence, neither it nor any Related
Person is required under the federal securities laws to give the Company’s
transfer agent any instructions not to permit the transfer of any Common Shares
owned of record by any of the MatlinPatterson Parties or any of their
respective Affiliates except if such transfer is in violation of Section 5.4
hereof.

     5.8 Limit on Certain Additional Common Share Repurchases. For a period of
six (6) months following the Closing, the Company shall not repurchase

12

 

Common Shares from its shareholders, on a non pro-rata basis, if such non
pro-rata repurchase would cause the MatlinPatterson Parties and its Affiliates,
individually or collectively, to own more than 9.9% of the Common Shares.
Notwithstanding the foregoing, nothing contained in this Section 5.8 shall
prohibit or otherwise restrict the Company from repurchasing Common Shares from
its shareholders on a pro-rata basis.

     5.9 Termination of Registration Rights Agreement. The Registration Rights
Agreement as between the Company and Sellers shall be terminated and shall become null and void and of no further
force or effect upon consummation of the Closing. Notwithstanding the
foregoing or anything contained in the Registration Rights Agreement to the
contrary, in the event the Closing does not occur as provided in this Agreement
as a result either of the failure of any of the MatlinPatterson Parties to
comply with any term or condition of this Agreement or the exercise by the
MatlinPatterson Parties of the termination right under Section 7.1(e) of this
Agreement, Sellers shall only be entitled to exercise their right to cause the
Company to register their Common Shares one time pursuant to Section 2(a) of
the Registration Rights Agreement, and at the request of the Company each
Seller shall execute, deliver and file, or permit to be filed, an amendment to
the Registration Rights Agreement reflecting such amendment to Section 2(a) of
the Registration Rights Agreement. Except as set forth in the immediately
preceding sentence, if the Closing does not occur for any reason (including,
without limitation, the termination of this Agreement or the failure of the
Financing to occur), the provisions of the Registration Rights Agreement shall
remain in full force and effect and unchanged.

     5.10 Consultation. Immediately after the determination of the Purchase
Price in accordance with Section 2.1, the parties shall meet and consult with
each other in good faith and for a period of one (1) hour following
such determination, or such longer or shorter period as the parties may
mutually agree, to determine if any of the parties will exercise its
termination right as provided in Section 7.1(e) hereof (the “Consultation”).

     5.11
Commencement of the Financing. The Company shall use reasonable
efforts to commence the Financing and to determine the conversion
price of the shares to be issued in the Financing on the day
immediately following the date of this Agreement.

     5.12
Share Certificates. As promptly as practicable following the date of
this Agreement and prior to the consummation of the Closing (a)
Sellers shall surrender to the Company or its transfer agent stock
certificates representing all of the Total Shares and (b) the Company
shall issue, or cause to be issued, to each Seller two (2) stock
certificates: one (1) stock certificate representing that number of
Common Shares equal to the difference between the Total Shares owned
of record by such Seller and the Seller Shares owned of record by
such Seller (each a “Retained Share Certificate”) and one
(1) stock certificate representing that number of Seller Shares owned
of record by such Seller (each a “Seller Share
Certificate”); provided, however that each Retained Share
Certificate and each Seller Share Certificate shall contain the same
restrictive legends and other notations that were included on the
certificates surrendered by Sellers as provided in subsection (a)
above. At the Closing (i) each Seller shall (A) surrender the
Retained Share Certificate and the Seller Share Certificate issued
to it in accordance with subsection (b) above and (B) for such Seller
Share Certificate, deliver a stock power effectively endorsed to the
Company or in blank and (ii) the Company shall issue, or cause to be
issued, to each Seller one (1) stock certificate representing that
number of Common Shares represented by the Retained Share Certificate
issued to such Seller in accordance with subsection (b) above in proper form for transfer without any stock
legend or similar notation.

ARTICLE VI

CONDITIONS

     6.1 Conditions Precedent to Each Party’s Obligation To Effect the Share
Purchase. The respective obligation of each party to effect the Share Purchase
shall be subject to the satisfaction or waiver (by the party entitled to waive
the condition) at or prior to the Closing of the following conditions:

          (a) No Injunctions or Restraints; Illegality. No order, injunction,
decree or other similar legal restraint or prohibition preventing, materially
delaying, making illegal or otherwise materially interfering with the
consummation of the Share Purchase shall have been issued by any Governmental
Entity, court or agency of competent jurisdiction (an “Injunction”) and be in
effect. No proceeding shall have been initiated and remain pending seeking an
Injunction. No Law shall have been enacted, entered or promulgated by any
Governmental Entity which prohibits, restricts or makes illegal the
consummation of the Share Purchase.

13

 

     6.2 Conditions Precedent to Obligation of the Company. The obligation of
the Company to effect the Share Purchase is also subject to the satisfaction or
waiver by the Company at or prior to the Closing of the following conditions:

          (a) Each of the representations and warranties of the MatlinPatterson
Parties set forth in Article III of this Agreement shall be true and correct as
of the date of this Agreement and as of the Closing Date as though made on and
as of the Closing Date;

          (b) Each of the MatlinPatterson Parties shall have performed and complied
with all agreements and covenants required to be performed and complied with by
them under this Agreement on or prior to the Closing Date;

          (c) the Company shall have obtained the Bank Consent;

          (d) the resignation letters received from Mark Patterson, Ramon Betolaza
and Frank Plimpton shall be effective;

          (e) the Company shall have completed the Financing on terms and conditions
satisfactory to the Company in its sole discretion, and the Company shall have
received net cash proceeds from the Financing in an amount equal to
$400 million or such lesser amount as the Company shall
determine in its sole discretion; and

          (f) the Company shall have received from each MatlinPatterson Party (i) a
certificate in a form and substance satisfactory to the Company signed by a
duly authorized officer of such MatlinPatterson Party, dated as of the Closing
Date, certifying as to itself, to the effect set forth in clauses (a) and (b) above of this
Section 6.2 and (ii) the items included in Section 2.3(b) of this Agreement.

     6.3 Conditions Precedent to Obligation of the MatlinPatterson Parties.
The obligation of the MatlinPatterson Parties to effect the Share Purchase is
also subject to the satisfaction or waiver by the MatlinPatterson Parties at or
prior to the Closing of the following conditions:

          (a) Each of the representations and warranties of the Company set forth in
Article IV of this Agreement shall be true and correct as of the date of this
Agreement and as of the Closing Date as though made on and as of the Closing
Date;

          (b) the Company shall have performed and complied with all agreements and
covenants required to be performed and complied with by the Company under this
Agreement on or prior to the Closing Date;

          (c) the Company shall have executed and delivered to Matlin Partners
(Delaware) the Management Letter; and

14

 

          (d) the MatlinPatterson Parties shall have received (i) a certificate in a
form and substance satisfactory to the MatlinPatterson Parties signed by a duly
authorized officer of the Company, dated as of the Closing Date, certifying to
the effect set forth in clauses (a) and (b) above of this Section 6.3 and (ii)
the items included in Section 2.3(a) of this Agreement.

     6.4 Condition Subsequent: Bank Consent. Notwithstanding anything
contained herein to the contrary, the effectiveness of this Agreement and the
rights and obligations contained in this Agreement shall be subject to and
contingent upon the parties obtaining the Bank Consent on or before
December 24, 2004. In the event that the Bank Consent is not obtained on or before
December 24, 2004 this Agreement shall be treated for all purposes as if it was never
entered into or effective among the parties and shall be null and void and of
no force or effect. In the event that the Bank Consent is obtained on or
before December 24, 2004 this Agreement and the rights and obligations contained in
this Agreement shall become in full force and effect.

ARTICLE VII

TERMINATION AND AMENDMENT

     7.1 Termination. This Agreement may be terminated prior to the Closing:

          (a) by mutual written consent of the MatlinPatterson Parties and the
Company;

          (b) by either the Company or the MatlinPatterson Parties upon written
notice to the other party if any Governmental Entity of competent jurisdiction
shall have issued a final, nonappealable order enjoining or otherwise
prohibiting the Share Purchase;

          (c) by either the Company or the MatlinPatterson Parties upon written
notice to the other party if the Share Purchase shall not have been consummated
on or before the Termination Date, or such later date as the parties may agree
upon in writing, unless the failure of the Closing to occur by such date shall
be due to the failure of the party seeking to terminate this Agreement to
perform or observe any covenants or agreements of such party set forth herein;

          (d) by the Company upon written notice to the MatlinPatterson Parties if
it determines it is unable to complete the Financing on terms and conditions
satisfactory to the Company in its sole discretion on or before the Termination
Date;

          (e) prior to the completion of the Consultation, by either the Company or
any of the MatlinPatterson Parties if it decides not to proceed with the Share
Purchase; or

          (f) by
the Matlin Patterson Parties upon notice to the Company if the
Company fails to commence the Financing and determine the conversion
price of the shares to be issued in the Financing on the day
immediately following the date of this Agreement.

     7.2 Effect of Termination. In the event of termination of this Agreement
by either the Company or the MatlinPatterson Parties as provided in Section

15

 

7.1, this Agreement shall forthwith become void and have no effect except
that (a) Sections 5.9 and 7.2 and Article VIII shall survive any termination of
this Agreement and (b) notwithstanding anything to the contrary contained in
this Agreement, no party shall be relieved or released from any liabilities or
damages arising out of its breach of any provision of this Agreement prior to
such termination. The parties acknowledge and agree that, as a result of the
actual damages a party would sustain by reason of a willful breach of this
Agreement, such party may not be made whole by monetary damages, and it is
accordingly agreed that such party shall have the right to elect, in addition
to any and all other remedies under this Agreement or at law or in equity, to
seek specific performance under this Agreement.

     7.3 Amendment. This Agreement may be amended by the parties hereto;
provided that this Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.

     7.4 Extension; Waiver. No extension of the time for performance of any
obligation hereunder or waiver of any condition or breach of any
representation, warranty, covenant or agreement or failure to insist on strict
compliance with an obligation, covenant, agreement or condition shall operate
as an extension, waiver of, or estoppel with respect to, any subsequent or
other breach or failure. The single or partial exercise of any right, power or
remedy provided under this Agreement shall not preclude any other or further
exercise thereof or the exercise of any other right, power or remedy except
where expressly stated in this Agreement.

ARTICLE VIII

GENERAL PROVISIONS

     8.1 Expenses. Except as otherwise provided in this Agreement, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses, provided, that (a) the MatlinPatterson Parties shall bear all stamp
or other documentary or transaction duties and any other transfer taxes (if
any) arising as a result or in consequence of the Share Purchase or otherwise
as a result or in consequence of this Agreement or of its implementation and
(b) the Company shall pay, or reimburse the MatlinPatterson Parties, as the
case may be, for the reasonable fees and disbursements of one law firm
representing the MatlinPatterson Parties incurred solely with respect to the
Share Purchase.

     8.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, by telecopy (with
confirmation) or other electronic means (provided that a hard copy of such
notice is promptly sent thereafter), by registered or certified mail (return
receipt requested) or by a nationally recognized express courier (with
confirmation) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):

          (a) if to the Company, to:

16

 

	 
	NRG Energy, Inc.

	211 Carnegie Center

	West Windsor, New Jersey 08540

	Attention: General Counsel

               and

          (b) if to the MatlinPatterson Parties, to:

	 
	MatlinPatterson Global Advisers LLC

	520 Madison Avenue

	New York, NY 10022-4213

	Attention: General Counsel

     8.3 Counterparts. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart. The parties acknowledge and agree that any signature pages
delivered hereunder may be delivered by facsimile or other electronic means;
provided that in such event each party shall promptly thereafter deliver an
original copy of such signature pages to the other party.

     8.4 Governing Law; Jurisdiction. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware, without regard
to any applicable conflicts of law provisions thereof, and the State and
Federal courts in the City of Wilmington, Delaware shall have exclusive
jurisdiction over any action or proceeding seeking to enforce any provision of,
or based upon any right arising out of, this Agreement or the transactions
contemplated by this Agreement. The parties do hereby irrevocably (a) submit
themselves to the personal jurisdiction of such courts, (b) agree to service of
such courts process upon them with respect to any such action or proceeding,
(c) waive any objection to venue laid therein and (d) consent to service of
process by registered mail, return receipt requested. EACH PARTY
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
CONNECTION WITH THIS AGREEMENT. The parties acknowledge and agree that the
foregoing choice of law and forum provisions are the product of an arms-length
negotiation among the parties.

     8.5 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.

17

 

     8.6 Assignment; No Third Party Beneficiaries. This Agreement and the
rights, interests or obligations of any party hereunder shall not be assigned
by any party hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties hereto. Subject to the foregoing,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns. This Agreement is
not intended and shall not be construed to confer upon any Person other than
the parties hereto any rights or remedies hereunder.

     8.7 Indemnification.

     (a) Each MatlinPatterson Party shall indemnify and hold harmless the
Company, its Affiliates and their respective directors, officers, managers,
members, partners, employees, agents, stockholders and controlling persons (the
“Company Indemnified Persons”) for, and shall pay to the Company Indemnified
Persons the amount of, any and all losses, damages, liabilities and/or expenses
(including costs of investigation and defense and reasonable attorneys’ fees)
actually incurred, whether or not involving a third-party claim, arising from,
in connection with or relating to (i) any breach of any representation or
warranty made by such MatlinPatterson Party in this Agreement or the
certificate delivered by it pursuant to Section 6.2(f) hereof or (ii) any
breach of any covenant, agreement or obligation of such MatlinPatterson Party
contained in this Agreement.

     (b) The Company shall indemnify and hold harmless each MatlinPatterson
Party, its Affiliates and their respective directors, officers, managers,
members, partners, employees, agents, stockholders and controlling persons (the
“Matlin Indemnified Persons”) for, and shall pay to the Matlin Indemnified
Persons the amount of, any and all losses, damages, liabilities and/or expenses
(including costs of investigation and defense and reasonable attorneys’ fees)
actually incurred, whether or not involving a third-party claim, arising from,
in connection with or relating to (i) any breach of any representation or
warranty made by the Company in this Agreement or the certificate delivered by
it pursuant to Section 6.3(d) hereof or (ii) any breach of any covenant,
agreement or obligation of the Company contained in this Agreement.

     8.8 Survival of Covenants, Representations and Warranties. Each of the
covenants, agreements, representations and warranties of the Company and the
MatlinPatterson Parties contained in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement, and each of
the indemnification obligations contained in Section 8.7 hereof, shall survive
the Closing in accordance with its terms as provided in this Agreement;
provided, however, that the representations and warranties contained in
Articles III (other than the representations and warranties contained in the
last sentence of Section 3.3(a) hereof) and IV, and the indemnification
obligations contained in Sections 8.7(a)(i) (other than the indemnification
obligations relating to a breach of any of the representations and warranties
contained in the last sentence of Section 3.3(a) hereof) and 8.7(b)(i) hereof,
shall survive the Closing for a period of twelve (12) months; and provided
further that the representations and warranties contained in the last sentence
of Section 3.3(a) hereof, and the indemnification obligations contained in
Section 8.7(a)(i) hereof relating to a breach of any of the

18

 

representations and warranties contained in the last sentence of Section
3.3(a) hereof, shall survive the Closing indefinitely.

     8.9 Entire Agreement. This Agreement (together with the agreements
referred to herein) sets out the entire agreement and understanding between the
parties with respect to the subject matter hereof.

[signature page follows]

19

 

     IN WITNESS WHEREOF, each of the MatlinPatterson Parties and the Company
has caused this Agreement to be executed by their respective officers thereunto
duly authorized as of the date first above written, but effective only as
provided in Section 6.4 of this Agreement.

	 	 	 	 	 
	 	 	MATLINPATTERSON GLOBAL ADVISERS LLC
	 
	 	 	 	 
	

	 	By:
	/s/ ROBERT WEISS
	

	 	 	

	

	 	 	Name:	 Robert Weiss
	

	 	 	Title:	 General Counsel
	 
	 	 	 	 
	 	 	MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS L.P.
	

	 	By:
	MatlinPatterson Global Advisers LLC
	

	 	 	     Its Investment Adviser
	 
	 	 	 	 
	

	 	By:
	/s/ ROBERT WEISS
	

	 	 	

	

	 	 	Name:	 Robert Weiss
	

	 	 	Title:	 General Counsel
	 
	 	 	 	 
	 	 	MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS (BERMUDA) L.P.
	

	 	By:
	MatlinPatterson Global Advisers LLC
	

	 	 	     Its Investment Adviser
	 
	 	 	 	 
	

	 	By:
	/s/ ROBERT WEISS
	

	 	 	

	

	 	 	Name:	 Robert Weiss
	

	 	 	Title:	 General Counsel
	 
	 	 	 	 
	 	 	NRG ENERGY, INC.
	 
	 	 	 	 
	

	 	By:
	 /s/ ROBERT C. FLEXON
	

	 	 	

	

	 	 	Name:	 Robert C. Flexon
	

	 	 	Title:	 Executive Vice President and Chief Financial Officer

658662

20

 

Exhibit A

Seller Shares; Total Shares

 

 

EXHIBIT A

	 	 	 	 	 	 	 	 	 
	 	 	Total Shares
	 	Seller Shares

	74.159% MatlinPatterson Global Opportunities L.P.
	 	 	15,947,947	 	 	 	9,640,683	 
	25.841% MatlinPatterson Global Opportunities (Bermuda) L.P.
	 	 	5,557,097	 	 	 	3,359,317	 
	 
	 	 	
 	 	 	 	
 	 
	 
	 	 	21,505,044	 	 	 	13,000,000	 
	  
	  
	 	 	DSUs*
	 	             
	74.159% MatlinPatterson Global Opportunities L.P.
	 	 	25,127	 	 	 	         	 
	25.841% MatlinPatterson Global Opportunities (Bermuda) L.P.
	 	 	8,755	 	 	 	            	 
	 
	 	 	
 	 	 	 	 	 
	 
	 	 	33,882	**	 	 	 	 

*11,294 DSUs allocated to Ramon Betolaza, Frank Plimpton and Mark
Patterson that were transferred proportionately between the Sellers.

 

 

Exhibit B

Reserve Rights

 

EXHIBIT B*

	 	 	 	 	 
	 	 	Claim (Class 5)
	74.159% MatlinPatterson Global Opportunities L.P.
	 	$	67,901,250	 
	25.841% MatlinPatterson Global Opportunities (Berm
	 	$	23,660,339	 
	 
	 	 	
 	 
	 
	 	$	91,561,589	 
	 
	 
	 	 	Claim (Class 5)
	74.159% MatlinPatterson Global Opportunities L.P.
	 	$	125,714,910	 
	25.841%
MatlinPatterson Global Opportunities (Berm
	 	$	43,805,635	 
	 
	 	 	
 	 
	 
	 	$	169,520,545	 
	 
	 
	 	 	Claim (Class 5)
	74.159% MatlinPatterson Global Opportunities L.P.
	 	$	45,995,287	 
	25.841%
MatlinPatterson Global Opportunities (Berm
	 	$	16,027,158	 
	 
	 	 	
 	 
	 
	 	$	62,022,445	 

*Excludes unsettled trades in the NRG Finance Company I LLC
construction loan. The Sellers originally held $20MM of this loan in the proportions
set forth above. A $5MM purchase and sale transaction settled on
December 3, 2004. Two purchase and sale transactions for the $15MM
balance are unsettled.

 

 

Exhibit C

Management Letter

 

 

[NRG LETTERHEAD]

[Date]

MatlinPatterson Global Opportunities Partners L.P.

c/o MatlinPatterson Global Partners LLC

520 Madison Avenue

New York, New York 10022

Re: Management Rights

Ladies and Gentlemen:

This letter will confirm our agreement in connection with the ownership of common equity (the
“Securities”) in NRG Energy, Inc. (the “Company”) by the MatlinPatterson Global Opportunities
Partners L.P. (the “Fund”). On the date hereof, and for so long as the Fund owns any of the
Securities or any other interests in the Company, the Fund will be entitled to the following
contractual management rights:

	1.	 	Financial Statements and Other Information. The Company shall deliver to the Fund:

	 	a.	 	as soon as available and in any event within 45 days after the end of each of
the first three quarters of each fiscal year of the Company, consolidated balance
sheets of the Company and its subsidiaries as of the end of such period, and
consolidated statements of income and cash flows of the Company and its subsidiaries
for the period then ended prepared in conformity with generally accepted accounting
principles in the United States applied on a consistent basis, except as otherwise
noted therein, and subject to the absence of footnotes and to year-end adjustments;
	 
	 	b.	 	as soon as available and in any event within 120 days after the end of each
fiscal year of the Company, a consolidated balance sheet of the Company and its
subsidiaries as of the end of such year, and consolidated statements of income and
cash flows of the Company and its subsidiaries for the year then ended prepared in
conformity with generally accepted accounting principles in the United States applied
on a consistent basis, except as otherwise noted therein, together with an auditor’s
report thereon of a firm of established national reputation; and
	 
	 	c.	 	to the extent the Company is required by law or pursuant to the terms of any
outstanding indebtedness of the Company to prepare such reports, any annual reports,
quarterly reports and other periodic reports pursuant to Section 13 or 15(d) of the
Exchange Act actually prepared by the Company as soon as available.
	 
	2.	 	 	Inspection and Access. The Company and its subsidiaries shall provide to the Fund, true and
correct copies of all documents, reports, financial data and other information as the Fund may
reasonably request. Additionally, the Company shall permit any authorized representatives
designated by the Fund to visit and inspect any of the properties of the

 

 

	 	 	Company and its
subsidiaries or any of its subsidiaries, including its and their books of account, and to
discuss its and their affairs, finances and accounts with its and their officers, all at such
times as a Significant Investor may reasonably request.

	3.	 	Right of Consultation. Representatives of the Fund shall have the right to consult with and
advise the management of the Company and its subsidiaries, upon reasonable notice at
reasonable times from time to time, on all matters relating to the operation of the Company
and its subsidiaries.

The aforementioned rights are intended to satisfy the requirement of management rights for purposes
of qualifying the Fund’s investment in each Company as a “venture capital investment” for purposes
of United States Department of Labor Regulation § 2510.3-101 (the “Regulation”). In the event that
the rights set forth herein are not satisfactory for such purpose, the Company and the Fund shall
reasonably cooperate in good faith to agree upon mutually satisfactory management rights that
satisfy the Regulations.

All rights granted herein to the Fund are in addition to the rights provided to the Fund in its
capacity as a holder of the Securities and nothing herein shall be construed to limit, restrict or
impair any claim, right or privilege available, or granted, to the Fund pursuant to any other
contractual arrangements with the Company.

The Fund shall notify the Company in writing at such time as the Fund ceases to own any of the
Securities or any other interests in the Company.

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	NRG Energy, Inc.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
	 	 
	

	 	Name:
	 	 
	

	 	Title:	 	 

	 	 	 	 	 	 	 	 	 
	Accepted, Acknowledged and Agreed:	 	 
	 
	 	 	 	 	 	 	 	 
	MALTINPATTERSON GLOBAL OPPORTUNITIES PARTNERS L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	MatlinPatterson Global Partners LLC, its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By:	 	 	 	 
	

	 	 	 	 	 	
	 	 
	

	 	 	 	Name:	 	 	 	 
	

	 	 	 	Title:	 	 	 	 

 

 

Exhibit D

Letters of Resignation

 

 

NRG ENERGY, INC.

Resignation of Mark R. Patterson

December 13, 2004

NRG Energy, Inc.

104 Carnegie Center

West Windsor, New Jersey 08540

Reference is made to the Stock Purchase Agreement, dated as of December 13, 2004, by and among
MatlinPatterson Global Advisers LLC, MatlinPatterson Global Opportunities Partners, L.P.,
MatlinPatterson Global Opportunities Partners (Bermuda) L.P. and NRG Energy, Inc. (the “Stock
Purchase Agreement”).

I hereby resign as a director of NRG Energy, Inc., my resignation to be effective upon the
consummation of the Closing (as defined in the Stock Purchase Agreement); provided that if
the closing of the transactions contemplated by the Stock Purchase Agreement does not occur for any
reason, this resignation shall have no force and effect.

	 	 	 
	 

	 	/s/ Mark R. Patterson
	

	 	

	

	 	Mark R. Patterson

 

 

NRG ENERGY, INC.

Resignation of Ramon Betolaza

December 13, 2004

NRG Energy, Inc.

104 Carnegie Center

West Windsor, New Jersey 08540

Reference is made to the Stock Purchase Agreement, dated as of December 13, 2004, by and among
MatlinPatterson Global Advisers LLC, MatlinPatterson Global Opportunities Partners, L.P.,
MatlinPatterson Global Opportunities Partners (Bermuda) L.P. and NRG Energy, Inc. (the “Stock
Purchase Agreement”).

I hereby resign as a director of NRG Energy, Inc., my resignation to be effective upon the
consummation of the Closing (as defined in the Stock Purchase Agreement); provided that if
the closing of the transactions contemplated by the Stock Purchase Agreement does not occur for any
reason, this resignation shall have no force and effect.

	 	 	 
	 

	 	/s/ Ramon Betolaza
	

	 	

	

	 	Ramon Betolaza

 

 

NRG ENERGY, INC.

Resignation of Frank S. Plimpton

December 13, 2004

NRG Energy, Inc.

104 Carnegie Center

West Windsor, New Jersey 08540

Reference is made to the Stock Purchase Agreement, dated as of December 13, 2004, by and among
MatlinPatterson Global Advisers LLC, MatlinPatterson Global Opportunities Partners, L.P.,
MatlinPatterson Global Opportunities Partners (Bermuda) L.P. and NRG Energy, Inc. (the “Stock
Purchase Agreement”).

I hereby resign as a director of NRG Energy, Inc., my resignation to be effective upon the
consummation of the Closing (as defined in the Stock Purchase Agreement); provided that if
the closing of the transactions contemplated by the Stock Purchase Agreement does not occur for any
reason, this resignation shall have no force and effect.

	 	 	 
	 

	 	/s/ Frank S. Plimpton
	

	 	

	

	 	Frank S. PlimptonEX-10.1:

 

Exhibit 10.1

Option No. «grantnumber»

HMS HOLDINGS CORP.

Incentive Stock Option Agreement

     THIS AGREEMENT, made as of the «grantdate» between HMS HOLDINGS CORP., a
New York corporation (the “Corporation”), and «first» «last» (the “Optionee”),
is pursuant to the 1999 Long-Term Incentive Stock Plan of the Corporation (the
“Plan”). The Plan, as adopted by the Board of Directors (the “Board”), was
approved by the shareholders (the “Shareholders”) of the Corporation on March
9, 1999. Said Plan, as it may hereafter be amended and continued by the Board
of Directors and the Shareholders, is incorporated herein by reference and made
a part of this Agreement.

     The Plan is administered by the Compensation Committee (the “Committee”)
of the Board, as defined in the Plan. The Board has determined that it would be
to the advantage and interest of the Corporation and its shareholders to grant
the option provided for herein to the Optionee as an inducement to remain in
the service of the Corporation, or a Parent or a Subsidiary thereof, and as
incentive for increased efforts during such service.

     NOW, THEREFORE, pursuant to the Plan, the Corporation, with the approval
of the Committee, hereby grants to the Optionee as of the date hereof an option
(the “Option”) to purchase all or any part of an aggregate of «granted_» shares
of the Corporation’s common shares, $.01 par value per share (the “Common
Stock”), at «exerciseprice» per share upon the following terms and conditions:

     1. The Option and all rights of the Optionee to purchase shares of Common
Stock hereunder shall terminate on «expiration» (hereinafter referred to as the
“Expiration Date”).

Page 1

 

HMS Holdings Corp. Stock Option Number «grantnumber»

     2. The Optionee’s right and option to purchase shares of Common Stock
pursuant to the Option shall vest as follows:

	 	 	 	 	 
	«v1date»

	 	 	 	«v1shares» shares
	«v2date»

	 	an additional
	 	«v2shares» shares
	«v3date»

	 	an additional
	 	«v3shares» shares

     3. Once the Option has vested in accordance with the preceding Section 2,
it shall continue to be exercisable until the earlier of the termination of the
Optionee’s rights hereunder pursuant to Section 5, or the Expiration Date. A
partial exercise of the Option shall not affect the Optionee’s right to
exercise the Option with respect to the remaining shares subject thereto,
subject to the conditions of the Plan and this Agreement. Full payment for
shares acquired shall be made in cash at or prior to the time that an Option,
or any part thereof, is exercised.

     4. (a) Except as provided in Section 5, the Option may not be exercised
unless the Optionee is, at the time of exercise, an employee, as defined in the
Plan, of the Corporation or of a Parent or Subsidiary, as defined in the Plan,
thereof (collectively hereinafter referred to as the “Corporation”). The Option
shall not be affected by any change of duties or position so long as the
Optionee continues to be an employee of the Corporation. A leave of absence or
an interruption in service (including an interruption during military service)
authorized or approved by the Corporation shall not be deemed an interruption
of employment for the purposes of Section 5.

          (b) No partial exercise of the Option may be for less than 100 full shares
(or less than all the shares as to which the Option is exercisable, if less
than 100 shares), and in no event shall the Corporation be required to issue
any fractional shares.

     5. In the event the Optionee shall cease to be employed by the Corporation
for any reason, including but not limited to by reason of the Optionee’s death
or disability, all unexercised Options held by the Optionee which are not then
exercisable by the Optionee shall lapse effective the date of termination of
employment. To the extent not theretofore exercised, any Options held by the
Optionee which are then exercisable
shall terminate as follows: If the employment is terminated for any
reason other than “for

Page 2

 

HMS Holdings Corp. Stock Option Number «grantnumber»

cause”, disability, as defined below, or death, any then
exercisable Options shall terminate upon the expiration of one month after the
termination of employment. If the employment terminates because of a permanent
and total disability as defined by Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended (the “Code”) as it now exists or may hereafter be
amended or because of death, any then exercisable Options shall terminate upon
the expiration of one year after the termination of employment. If the
termination is “for cause” as determined by the Board, which shall be deemed to
mean the deliberate gross misconduct of the Optionee or the violation by the
Optionee, after any such termination, of the terms of a Restrictive covenant
and Confidentiality/Non-Disclosure Agreement with the Corporation, any then
exercisable Options shall terminate upon the termination of employment.

     6. Nothing in this Agreement shall confer upon the Optionee any right to
continue in the employ of the Corporation or affect the right of the
Corporation to terminate his employment at any time.

     7. (a) The Optionee may exercise the Option with respect to all or any
part of the shares then exercisable by giving the Corporation written notice at
401 Park Avenue South, New York, New York 10016. Such notice shall specify the
number of shares as to which the Option is being exercised and shall be
preceded or accompanied by payment in full in accordance with Section 3 hereof.

          (b) Prior to or concurrently with delivery by the Corporation to the
Optionee of a certificate(s) representing such shares, the Optionee shall:

     (i) upon notification of the amount due, pay
promptly any amount necessary to satisfy applicable
federal, state or local tax requirements; and

     (ii) if such shares are not currently or
effectively registered under the Securities Act of
1933, as amended (the “Act”) and applicable state
securities laws, give satisfactory assurance in
writing signed by the Optionee or his legal
representative, as the case may be, that such shares

Page 3

 

HMS Holdings Corp. Stock Option Number «grantnumber»

     are being purchased for investment and not with
a view to the distribution thereof.

          (c) As soon as practicable after receipt of the notice and payment
referred to in subparagraph (a) of this Section 7, the Corporation shall cause
to be delivered to the Optionee at the office of the Corporation at 401 Park
Avenue South, New York, New York 10016 or such other place as may be mutually
acceptable to the Corporation and the Optionee, a certificate or certificates
for such shares; provided however, that the time of such delivery may be
postponed by the Corporation for such period of time as may be required for the
Corporation, with reasonable diligence, to comply with applicable registration
requirements under the Act, the Securities Exchange Act of 1934, as amended,
and any requirements under any other law or regulation applicable to the
issuance or transfer of shares. If the Optionee fails for any reason to accept
delivery of all or any part of the number of shares specified in such notice
upon tender of delivery thereof, his right to purchase such undelivered shares
may be terminated.

     8. If the total outstanding shares of Common Stock of the Corporation
shall be increased or decreased or changed into or exchanged for a different
number or kind of shares of stock or other securities of the Corporation or of
another corporation through reorganization, merger or consolidation,
recapitalization, stock split, split-up, combination or exchange of shares or
declaration of any dividends payable in stock, then the Board shall
proportionally adjust the number of shares (and price per share) subject to the
unexercised portion of this Option (to the nearest possible full share) subject
in all cases to the limitations of Section 425 of the Code.

     9. This Option shall not be transferable other than by will or by the laws
of descent and distribution, or pursuant to a qualified domestic relations
order as defined by the Code or Title I of the Employee Retirement Income
Security Act, or the rules thereunder. During the lifetime of the Optionee,
this Option shall be exercisable only by the Optionee. In the event of any
attempt by the Optionee to transfer, assign, pledge, hypothecate or otherwise
dispose of the Option or of any right hereunder, except as provided for herein,
or in the event of the levy of any attachment, execution or similar process
upon the rights or interest hereby conferred, the Corporation may terminate
this Option by notice to the Optionee and it shall thereupon become null and
void.

Page 4

 

HMS Holdings Corp. Stock Option Number «grantnumber»

     10. The Option granted hereby is designated an Incentive Stock Option
under Section 422A(b) of the Code, to the extent permitted and subject to the
time provisions set forth within Section 5 of this Agreement.

     IN WITNESS WHEREOF, the Corporation has caused this Agreement to be signed
by a duly authorized officer, and the Optionee has affixed his signature
hereto.

	 	 	 	 	 
	 	 	By: HMS HOLDINGS CORP.
	 
	 	 	 	 
	

	 	Signature:
	 	
	

	 	
	 	

	

	 	 	 	William F. Miller III
	

	 	 	 	Chairman and Chief Executive Officer
	 
	 	 	 	 
	

	 	Date:
	 	«grantdate»

     The undersigned reaffirms his (her) obligations under a previously
executed Restrictive Covenant/Non-Compete Agreement with the Corporation and
agrees that his (her) reaffirmation of such obligations is an inducement to the
Corporation to grant the Option covered by this Agreement.

	 	 	 	 	 
	

	 	Optionee:
	 	
	

	 	 
	 	

	

	 	 	 	«first» «last»
	

	 	Date:
	 	
	

	 	 
	 	

Page 5

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