Exhibit 10.85
AGREEMENT REGARDING PROSECUTION OF LITIGATION
          This Agreement Regarding Prosecution of Litigation is entered into on
February 28, 2009 by and among Merrill Lynch Commodities, Inc. (“MLCI”) and
Merrill Lynch & Co., Inc. (“ML&C” and, collectively with MLCI, “Plaintiffs”) and
Reliant Energy Power Supply, LLC, RERH Holdings, LLC, Reliant Energy Retail
Holdings, LLC, Reliant Energy Retail Services, LLC, RE Retail Receivables, LLC,
and Reliant Energy Solutions East, LLC (collectively, “Defendants”), regarding
the prosecution and defense of the lawsuit styled Merrill Lynch Commodities,
Inc. and Merrill Lynch & Co., Inc., plaintiffs, against Reliant Energy Power
Supply, LLC, RERH Holdings, LLC, Reliant Energy Retail Holdings, LLC, Reliant
Energy Retail Services, LLC, RE Retail Receivables, LLC, and Reliant Energy
Solutions East, LLC, defendants, pending in the Supreme Court of the State of
New York, County of New York under Index Number 603820/2008 (the “Litigation”).
W I T N E S S E T H
          WHEREAS, NRG Energy, Inc. and Reliant Energy, Inc. are engaged in
discussions concerning the possible acquisition (the “Transaction”) by NRG
Energy, Inc. or an affiliate of certain portions of the retail energy business
of Reliant Energy, Inc. (“Reliant Retail”), to be embodied in an LLC Membership
Interest Purchase Agreement between Reliant Energy, Inc., as seller, and NRG
Retail LLC, as purchaser, to be executed contemporaneously with this Agreement
(the “Purchase Agreement”);
          WHEREAS, Plaintiffs provide credit support to Reliant Energy, Inc. for
the operation of the Reliant Retail business pursuant to, among other
agreements, the Credit Sleeve and Reimbursement Agreement between Plaintiffs and
Defendants, dated

 

--------------------------------------------------------------------------------

 

as of September 24, 2006 (as amended and restated from time-to-time thereafter)
(the “CSRA”), which credit support has been and continues to be beneficial to
the Reliant Retail business;
          WHEREAS, Plaintiffs contend that Defendants have committed a breach of
the CSRA resulting in the occurrence of an Event of Default, as defined therein,
which breach is denied by Defendants;
          WHEREAS, Plaintiffs initiated the Litigation against Defendants in the
Supreme Court of the State of New York, County of New York (the “Court”), on
December 24, 2008 seeking, among other things, a declaratory judgment declaring
that Defendants have committed a breach of the CSRA resulting in the occurrence
of an Event of Default thereunder;
          WHEREAS, in connection with NRG Energy, Inc.’s discussions with
Reliant Energy, Inc. regarding the Transaction, Reliant Energy, Inc., MLCI and
ML&C have engaged in discussions concerning the manner of operation of the CSRA
during the period between the signing and closing of the Purchase Agreement, to
be memorialized in an agreement among Reliant Energy, Inc. and/or it affiliates,
MLCI and ML&C (the “Interim Agreement”);
          WHEREAS, in connection with NRG Energy, Inc.’s discussions with
Reliant Energy, Inc. regarding the Transaction, NRG Energy, Inc., MLCI and ML&C
have engaged in discussions to determine the terms (“Acceptable Terms”) under
which MLCI and ML&C would continue to supply credit support to the Reliant
Retail business for an agreed period following the acquisition of the Reliant
Retail business by NRG Energy, Inc. or an affiliate (the “New CSRA
Arrangement”), to be exhibited to a letter

2

--------------------------------------------------------------------------------

 

agreement between NRG Energy, Inc. and MLCI (the “NRG/ML Letter Agreement”);
          WHEREAS, NRG Energy, Inc. and Reliant Energy, Inc. believe that
sufficient progress has been made toward finalization of the Purchase Agreement,
Reliant Energy, Inc., MLCI and ML&C believe that sufficient progress has been
made toward finalization of the Interim Agreement, and NRG Energy, Inc., MLCI
and ML&C believe that sufficient progress has been made in the negotiation of
Acceptable Terms, that it is in their mutual interests to ensure that the
conduct of the Litigation does not imperil the negotiation and consummation of
the Transaction;
          NOW THEREFORE, Plaintiffs and Defendants agree as follows:
          1. If, and only if, Reliant Energy, Inc. and NRG Retail LLC execute
the Purchase Agreement on or before March 1, 2009 (the actual date of such
execution hereinafter referred to as the “Execution Date”), then immediately
upon being advised of (i) the Execution Date and (ii) the execution of the
Interim Agreement, Plaintiffs and Defendants shall enter into and jointly file
with the Court a stipulation in the Litigation, in the form attached hereto as
Exhibit A (the “Joint Stipulation to Stay Litigation”), providing that the
Litigation be placed on the Court’s Suspense Docket and further providing that
the Litigation be removed from the Suspense Docket and reactivated upon
notification by either Plaintiffs or Defendants that one or more enumerated
contingencies permitting reactivation of the Litigation has occurred.
          2. If, notwithstanding the execution of the Joint Stipulation to Stay
Litigation, the Court declines to place the Litigation on the Suspense Docket or
otherwise stay the progress of the Litigation, then, pending the occurrence of
the contingency set forth in Paragraph 3 of this Agreement, Plaintiffs shall be
entitled to and may continue to

3

--------------------------------------------------------------------------------

 

prosecute the Litigation actively in all respects, and Defendants shall be
entitled to and may continue to defend the Litigation actively in all respects,
except that, pending the occurrence of any of the contingencies set forth in
clauses (i) through (v) of Paragraph 5 of this Agreement, neither Plaintiffs nor
Defendants will seek to enforce any ruling on the merits in their favor or any
award of judgment in their favor with respect to the Litigation.
          3. If, on or before June 1, 2009, or, if the contingency set forth in
Paragraph 4 is satisfied, July 1, 2009 (the “Closing Deadline”), the New CSRA
Arrangement is reduced to an executed writing and NRG Energy, Inc. or an
affiliate completes the acquisition of Reliant Retail pursuant to the terms of
the Purchase Agreement as they existed on the date of execution of this
Agreement, except as those terms may have been amended with the prior written
consent of Plaintiffs, which consent shall not have been unreasonably withheld
or delayed (collectively, “Deal Completion”), then, upon being informed of Deal
Completion, Plaintiffs and Defendants shall immediately jointly file with the
Court a stipulation and release in the form annexed hereto as Exhibit B
effecting the dismissal with prejudice of the Litigation, without costs or
liability in any party against any other and providing mutual releases with
respect to the subject matter of the Litigation.
          4. The Closing Deadline may be extended until not later than July 1,
2009 if Deal Completion does not occur on or before June 1, 2009, and, on or
before June 1, 2009, NRG Energy, Inc. certifies to Plaintiffs in writing that
the reason the Purchase Agreement has not closed is that despite using
commercially reasonable efforts, NRG Energy, Inc. and Reliant Energy, Inc. have
been unable to obtain all required

4

--------------------------------------------------------------------------------

 

regulatory approvals for the sale of the Reliant Retail business to NRG Energy,
Inc. or an affiliate.
          5. If the Joint Stipulation for Stay of Litigation has been executed
and the Court has placed the Litigation on its Suspense Docket or otherwise
stayed the progress of the Litigation, either Plaintiffs or Defendants can
request that the Litigation be removed from the Suspense Docket and returned to
the Court’s Active Docket or otherwise be returned to active status by affirming
to the Court that one or more of the following has occurred:
               (i) either party thereto terminates or purports to terminate the
Purchase Agreement;
               (ii) the Purchase Agreement is modified or amended without the
prior written consent of MLCI, which consent shall not be unreasonably withheld
or delayed;
               (iii) the NRG/ML Letter Agreement is terminated;
               (iv) the Purchase Agreement is not closed by the Closing
Deadline;
               (v) the New CSRA Arrangement is not reduced to an executed
writing at or prior to the closing of the Purchase Agreement.
          6. Upon the occurrence of any of the contingencies set forth in
Paragraph 5 of this Agreement, Plaintiffs and Defendants shall cease to operate
under any constraints with respect to the prosecution and defense of the
Litigation.
          7. For the avoidance of doubt, this Agreement shall have no effect at
all upon the conduct of the Litigation or the rights of Plaintiffs and
Defendants with

5

--------------------------------------------------------------------------------

 

respect thereto unless and until both (i) the Purchase Agreement is executed by
Reliant Energy, Inc. and NRG Energy, Inc. or an affiliate on or before March 1,
2009, and (ii) the Interim Agreement is executed.
          8. This Agreement is governed by the laws of the State of New York,
without giving effect to the conflict of laws principles thereof. Any dispute
relating to this Agreement shall be submitted for disposition solely to the
Court, which shall have exclusive jurisdiction of any and all disputes arising
out of or relating to this Agreement. Each party agrees that venue in the Court
for purposes of such a dispute is proper and convenient, and each party waives
any objection to venue and any right, on any basis whatsoever, to seek to change
or otherwise challenge venue. The party seeking disposition of a dispute shall
request or otherwise undertake that the matter be referred to the Justice before
whom the Litigation is then, or if the same has been dismissed, most recently
was, pending.
          9. EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

6

--------------------------------------------------------------------------------

 

                      Merrill Lynch Commodities, Inc.       Merrill Lynch & Co.,
Inc.    
 
                   
By:
  /s/ Dennis Albrecht
 
Name: Dennis Albrecht       By:   /s/ Marlene Debel
 
Name: Marlene Debel    
 
  Title: Managing Director, COO           Title    
 
                    Reliant Energy Power Supply, LLC       RERH Holdings, LLC  
 
 
                   
By:
  /s/ Lloyd A. Whittington
 
Name: Lloyd A. Whittington       By:   /s/ Lloyd A. Whittington
 
Name: Lloyd A. Whittington    
 
  Title: Vice President and Treasurer           Title: Assistant Treasurer    
 
                    Reliant Energy Retail Holdings, LLC       Reliant Energy
Retail Services, LLC    
 
                   
By:
  /s/ Lloyd A. Whittington
 
Name: Lloyd A. Whittington       By:   /s/ Lloyd A. Whittington
 
Name: Lloyd A. Whittington    
 
  Title: Assistant Treasurer           Title: Vice President and Treasurer    
 
                    RE Retail Receivables, LLC       Reliant Energy Solutions
East, LLC    
 
                   
By:
  /s/ Lloyd A. Whittington
 
Name: Lloyd A. Whittington       By:   /s/ Lloyd A. Whittington
 
Name: Lloyd A. Whittington    
 
  Title: Assistant Treasurer           Title: Vice President and Treasurer    

7

--------------------------------------------------------------------------------

 

(Exhibit A to Stay Agreement)
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK

     
MERRILL LYNCH COMMODITIES, INC. and
   
MERRILL LYNCH & CO., INC.,
   
 
   
Plaintiffs,
   
 
   
-against-
   
 
  Index No.: 603820/2008
RELIANT ENERGY POWER SUPPLY, LLC, RERH
   
HOLDINGS, LLC, RELIANT ENERGY RETAIL
   
HOLDINGS, LLC, RELIANT ENERGY RETAIL
   
SERVICES, LLC, RE RETAIL RECEIVABLES, LLC
   
AND RELIANT ENERGY SOLUTIONS EAST, LLC,
   
 
   
Defendants.
   

JOINT STIPULATION TO STAY LITIGATION
          WHEREAS, Reliant Energy, Inc. and NRG Retail LLC have executed an
agreement (the “Purchase Agreement”) for the sale of certain portions of the
retail energy business (“Reliant Retail”) conducted by Defendants, Reliant
Energy Power Supply, LLC, RERH Holdings, LLC, Reliant Energy Retail Holdings,
LLC, Reliant Energy Retail Services, LLC, RE Retail Receivables, LLC, and
Reliant Energy Solutions East, LLC, to an NRG Retail LLC, an affiliate of NRG
Energy, Inc., which agreement is acceptable to Plaintiffs, Merrill Lynch
Commodities, Inc. (“MLCI”) and Merrill Lynch & Co., Inc. (“ML&C”);
          WHEREAS, Plaintiffs and Defendants are parties to the Credit Sleeve
and Reimbursement Agreement between Plaintiffs and Defendants, dated as of
September 24, 2006 (as amended and restated from time-to-time thereafter) (the
“CSRA”), which credit support has been and continues to be beneficial to the
Reliant Retail business;
          WHEREAS, Reliant Energy, Inc. and its affiliates and Plaintiffs have

 

--------------------------------------------------------------------------------

 

entered into an agreement concerning the manner of operation of the CSRA during
the period between the signing and closing of the Purchase Agreement;
          WHEREAS, NRG Energy, Inc. and MLCI have entered into a letter
agreement to which are exhibited the terms under which MLCI and ML&C would
continue to supply credit support to the Reliant Retail business for an agreed
period following the acquisition of the Reliant Retail business by NRG Energy,
Inc. (the “NRG/ML Letter Agreement”);
          NOW, THEREFORE, IT IS HEREBY STIPULATED and agreed, by and among
Plaintiffs and Defendants, acting through their undersigned attorneys, subject
to the approval of the Court, as follows:
          1. All proceedings in this action are hereby stayed and the action
shall be assigned to the Court’s Suspense Docket, pending further events
described below.
          2. The aforementioned stay shall dissolve and the action shall be
removed from the Court’s Suspense Docket and returned to the Court’s Active
Docket upon any party to the action affirming to the Court, with notice to all
other parties, that any of the following contingencies has occurred:
               (i) either party thereto terminates or purports to terminate the
Purchase Agreement;
               (ii) the Purchase Agreement is modified or amended without the
prior written consent of MLCI, which consent was not unreasonably withheld or
delayed;
               (iii) the NRG/ML Letter Agreement is terminated;

 

--------------------------------------------------------------------------------

 

               (iv) the Purchase Agreement is not closed (i) by June 1, 2009, or
(ii) by July 1, 2009 in the event the Purchase Agreement does not close on or
before June 1, 2009 and, on or before June 1, 2009, NRG Energy, Inc. certifies
to Plaintiffs in writing that the reason the Purchase Agreement has not closed
is that despite using commercially reasonable efforts, NRG Energy, Inc. and
Reliant Energy, Inc. have been unable to obtain all required regulatory
approvals for the sale of the Reliant Retail business to NRG Energy, Inc. or an
affiliate;
               (v) Plaintiffs and NRG Energy, Inc. or affiliate(s) of NRG
Energy, Inc. do not, at or prior to the closing of the Purchase Agreement,
execute an amended, restated, or otherwise revised and modified version of the
CSRA setting forth the terms under which Plaintiffs will continue to supply
credit support to the Reliant Retail business for an agreed period following the
closing of the Purchase Agreement.

 

--------------------------------------------------------------------------------

 

Dated: New York, New York
             February 28, 2009

     
SUSMAN GODFREY L.L.P.
  MILBANK, TWEED, HADLEY &
 
  MCCLOY LLP
 
   
By:                                                             
   
Arun S. Subramanian
  By:                                                            
Tibor L. Nagy, Jr.
  Michael L. Hirschfeld
Stephen D. Susman
  Thomas A. Arena
654 Madison Avenue, 5th Floor
  1 Chase Manhattan Plaza
New York, New York 10065
  New York, New York 10005-1448
(212) 336-8342
  (212) 530-5000
 
   
and
  Attorney for Plaintiffs
 
   
 
   
Eric J. Mayer
   
1000 Louisiana, Suite 5100
   
Houston, TX 77002-5096
   
(713) 651-9366
   
 
   
Attorneys for Defendants
   

So Ordered:

     
 
Hon. Melvin L. Schweitzer, J.S.C.
   

 

--------------------------------------------------------------------------------

 

(Exhibit B to Stay Agreement)
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK

     
MERRILL LYNCH COMMODITIES, INC. and
   
MERRILL LYNCH & CO., INC.,
   
 
   
Plaintiffs,
   
 
   
-against-
   
 
  Index No.: 603820/2008
RELIANT ENERGY POWER SUPPLY, LLC, RERH
   
HOLDINGS, LLC, RELIANT ENERGY RETAIL
   
HOLDINGS, LLC, RELIANT ENERGY RETAIL
   
SERVICES, LLC, RE RETAIL RECEIVABLES, LLC
   
AND RELIANT ENERGY SOLUTIONS EAST, LLC,
   
 
   
Defendants.
   

STIPULATION OF DISMISSAL AND RELEASE
          IT IS HEREBY STIPULATED and agreed, by and among Plaintiffs, Merrill
Lynch Commodities, Inc. and Merrill Lynch & Co., Inc. and Defendants, Reliant
Energy Power Supply, LLC, RERH Holdings, LLC, Reliant Energy Retail Holdings,
LLC, Reliant Energy Retail Services, LLC, RE Retail Receivables, LLC, and
Reliant Energy Solutions East, LLC, acting through their undersigned attorneys,
as follows:
          1. This action is dismissed with prejudice and without costs or
liability in any party as against any other party.
          2. Plaintiffs and their present and former stockholders, partners,
subsidiaries, affiliates, successors and assigns (the “Merrill Releasors”)
hereby fully release and forever discharge the Defendants, their predecessors,
successors, parents, members, affiliates, divisions, subsidiaries, and any and
all present or former officers, directors, employees, stockholders, agents,
affiliates, attorneys, representatives, and assigns (the “Reliant Releasees”)
from any and all claims, demands, causes of action,

 

--------------------------------------------------------------------------------

 

suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, extents, executions, claims, rights,
obligations, losses, liabilities, costs, expenses, attorneys fees and demands
whatsoever, whether known or unknown, suspected or unsuspected, fixed or
contingent, disclosed or undisclosed, asserted or unasserted, matured or
unmatured, material or immaterial, whether individual, class, derivative or
representative, whether in law, admiralty or equity, or of any other type or in
any other capacity, that the Merrill Releasors ever had, now have or hereinafter
can, shall, or may have against the Reliant Releasees for, upon or by reason of
the facts alleged in the Complaint in this action which Plaintiffs contend, and
which Defendants deny, constitute a breach of, or Event of Default under, the
Credit Sleeve and Reimbursement Agreement executed on or about September 24,
2006 (as amended and restated from time to time thereafter but not including any
amendment and restatement in connection with the Purchase Agreement between
Defendants and their affiliates and NRG Retail LLC) by and among the Plaintiffs
and the Defendants (the “CSRA”).
          3 The Defendants and their present and former stockholders, members,
partners, subsidiaries, affiliates, successors and assigns (the “Reliant
Releasors”) hereby fully release and forever discharge the Plaintiffs, their
predecessors, successors, parents, affiliates, divisions, subsidiaries, and any
and all present or former officers, directors, employees, stockholders, agents,
affiliates, attorneys, representatives, and assigns (the “Merrill Releasees”)
from any and all claims, demands, causes of action, suits, debts, dues, sums of
money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses,

 

--------------------------------------------------------------------------------

 

damages, judgments, extents, executions, claims, rights, obligations, losses,
liabilities, costs, expenses, attorneys fees and demands whatsoever, whether
known or unknown, suspected or unsuspected, fixed or contingent, disclosed or
undisclosed, asserted or unasserted, matured or unmatured, material or
immaterial, whether individual, class, derivative or representative, whether in
law, admiralty or equity, or of any other type or in any other capacity, that
the Reliant Releasors ever had, now have or hereafter can, shall, or may have
against the Merrill Releasees for, upon or by reason of the facts alleged in the
Complaint in this action which Plaintiffs contend, and which Defendants deny,
constitute a breach of the CSRA.
Dated: New York, New York
             [            ], 2009

     
SUSMAN GODFREY L.L.P.
  MILBANK, TWEED, HADLEY &
 
  MCCLOY LLP
 
   
By:                                                             
   
Arun S. Subramanian
  By:                                                             
Tibor L. Nagy, Jr.
  Michael L. Hirschfeld
Stephen D. Susman
  Thomas A. Arena
654 Madison Avenue, 5th Floor
  1 Chase Manhattan Plaza
New York, New York 10065
  New York, New York 10005-1448
(212) 336-8342
  (212) 530-5000
 
   
and
  Attorney for Plaintiffs
 
   
Eric J. Mayer
   
1000 Louisiana, Suite 5100
   
Houston, TX 77002-5096
   
(713) 651-9366
   
 
   
Attorneys for Defendants
   

So Ordered:

     
 
Hon. Melvin L. Schweitzer, J.S.C.