exv10w1wa






Exhibit 10.1A




Execution




 





AMENDED AND RESTATED CREDIT SLEEVE

AND REIMBURSEMENT AGREEMENT




Originally dated as of




September 24, 2006




among




NRG ENERGY, INC.,

(from and after the Unwind Start Date)




The Other Sleeve Obligors referred to herein,

as Reimbursement Guarantors,




MERRILL LYNCH COMMODITIES, INC.,

as Sleeve Provider,




and




MERRILL LYNCH & CO., INC.,

as ML Guarantee Provider,




dated as of September 30, 2009 and

effective as of October 5, 2009




 





 









 





TABLE OF CONTENTS



This Table of Contents is not part of the Agreement to which it is attached but is inserted for
convenience of reference only.




	 	 	 	 	 
	 	 	 	Page	 
	 
	Section 1. Definitions and Accounting Matters
	 	 	1	 
	1.01. Certain Defined Terms
	 	 	1	 
	1.02. Terms Generally
	 	 	22	 
	1.03. Accounting Terms and Determinations
	 	 	22	 
	 
	 	 	 	 
	Section 2. Credit Sleeve for Post-Unwind Start Date Obligations
	 	 	23	 
	2.01. Credit Sleeve
	 	 	23	 
	2.02. Power and Hedging Contracts; Obligations of Compliance Parties
	 	 	24	 
	 
	 	 	 	 
	Section 3. Payments, Fees and Records
	 	 	26	 
	3.01. Notice of Payment on ML Guarantee or Collateral Foreclosure
	 	 	26	 
	3.02. Repayment of Draw Reimbursement Obligations
	 	 	26	 
	3.03. Interest
	 	 	27	 
	3.04. Monthly Sleeve Fee
	 	 	28	 
	3.05. Make-Whole Payment
	 	 	28	 
	3.06. Payments Generally
	 	 	28	 
	3.07. Records; Prima Facie Evidence
	 	 	29	 
	 
	 	 	 	 
	Section 4. Conditions
	 	 	29	 
	 
	 	 	 	 
	Section 5. Representations and Warranties
	 	 	29	 
	5.01. Existence, Qualification and Power; Compliance with Laws
	 	 	29	 
	5.02. Authorization; No Contravention
	 	 	30	 
	5.03. Governmental Authorization; Other Consents
	 	 	30	 
	5.04. Binding Effect
	 	 	30	 
	5.05. Financial Statements; No Material Adverse Effect
	 	 	30	 
	5.06. Litigation
	 	 	31	 
	5.07. No Default
	 	 	31	 
	5.08. [Intentionally Deleted]
	 	 	31	 
	5.09. [Intentionally Deleted]
	 	 	31	 
	5.10. [Intentionally Deleted]
	 	 	31	 
	5.11. ERISA Compliance
	 	 	31	 
	5.12. [Intentionally Deleted]
	 	 	32	 
	5.13. Margin Regulations; Investment Company Act; Public Utility
Holding Company Act
	 	 	32	 
	5.14. Disclosure
	 	 	32	 
	5.15. Compliance with Laws
	 	 	33	 
	5.16. Security Interest in Posted Collateral
	 	 	33	 






 









 






	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	5.17. Solvency
	 	 	33	 
	 
	 	 	 	 
	Section 6. Affirmative Covenants
	 	 	33	 
	6.01. Financial Statements
	 	 	33	 
	6.02. Certificates; Other Information
	 	 	34	 
	6.03. Notices
	 	 	35	 
	6.04. Payment of Obligations
	 	 	35	 
	6.05. Preservation of Existence, Etc
	 	 	35	 
	6.06. [Intentionally Deleted]
	 	 	35	 
	6.07. [Intentionally Deleted]
	 	 	35	 
	6.08. Compliance with Laws
	 	 	35	 
	6.09. Books and Records
	 	 	36	 
	6.10. Inspection Rights
	 	 	36	 
	6.11. Further Assurances
	 	 	36	 
	6.12. Obligation to Post Collateral
	 	 	36	 
	6.13. Obligation to Cause Partial Credit Sleeve Termination Date and
Credit Sleeve Termination Date
	 	 	36	 
	6.14. Return of TDSP Postings
	 	 	37	 
	 
	 	 	 	 
	Section 7. Negative Covenants
	 	 	37	 
	7.01. Fundamental Changes
	 	 	37	 
	7.02. Other Covenants
	 	 	37	 
	 
	 	 	 	 
	Section 8. Events of Default
	 	 	38	 
	8.01. Reliant Events of Default
	 	 	38	 
	8.02. Sleeve Provider Events of Default
	 	 	40	 
	 
	 	 	 	 
	Section 9. Remedies and Termination
	 	 	41	 
	9.01. Remedies of Sleeve Provider
	 	 	41	 
	9.02. Remedies of NRG
	 	 	42	 
	9.03. [Intentionally Deleted]
	 	 	43	 
	9.04. Certain Limitations on Remedies
	 	 	43	 
	 
	 	 	 	 
	Section 10. Posted Collateral
	 	 	43	 
	 
	 	 	 	 
	Section 11. Reimbursement Guaranty by Other Reliant Retail Parties
	 	 	49	 
	11.01 Reimbursement Guaranty of the Obligations
	 	 	49	 
	11.02 Payment by Guarantors
	 	 	49	 
	11.03 Liability of Reimbursement Guarantors Absolute
	 	 	49	 
	11.04 Waivers by Reimbursement Guarantors
	 	 	51	 
	11.05 [Intentionally Deleted]
	 	 	51	 
	11.06 [Intentionally Deleted]
	 	 	52	 
	11.07 Continuing Reimbursement Guaranty
	 	 	52	 
	11.08 Authority of Reimbursement Guarantors or NRG
	 	 	52	 
	11.09 Financial Condition of NRG
	 	 	52	 






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	 	 	Page
	 
	 	 	 	 
	11.10
Bankruptcy, etc.
	 	 	52	 
	 
	 	 	 	 
	Section 12. Miscellaneous
	 	 	53	 
	12.01 Notices
	 	 	53	 
	12.02 Confidentiality; Limitation on Use of Information
	 	 	54	 
	12.03 Reliant Employees
	 	 	54	 
	12.04 [Intentionally Deleted]
	 	 	54	 
	12.05 Waiver

	 	 	55	 
	12.06
Amendments, Etc.
	 	 	55	 
	12.07
Expenses, Etc.
	 	 	55	 
	12.08 Successors and Assigns
	 	 	56	 
	12.09 Assignments
	 	 	56	 
	12.10 Survival
	 	 	56	 
	12.11 Counterparts
	 	 	56	 
	12.12
Governing Law; Jurisdiction; Etc.
	 	 	56	 
	12.13 Certain Dispute Resolution Procedures
	 	 	57	 
	12.14 Captions
	 	 	58	 
	12.15 Limitation on Interest
	 	 	58	 
	12.16 Integration
	 	 	58	 
	12.17 Conditions to Amendment and Restatement
	 	 	58	 
	12.18 Additional Unwind Start Date Actions
	 	 	60	 
	12.19 Existing CSRA Provisions
	 	 	61	 
	12.20 Public Disclosures
	 	 	61	 






 -iii-




 









 





Schedules




Schedules




	 	 	 	 	 
	SCHEDULE 1.01(a)

	 	-
	 	Post-Unwind Start Date Obligations
	SCHEDULE 1.01(c)

	 	-
	 	Data and Reporting Requirement
	SCHEDULE 3.06(a)

	 	-
	 	Merrill Account
	SCHEDULE 5.06

	 	-
	 	Litigation
	SCHEDULE 5.15

	 	-
	 	Compliance With Laws
	SCHEDULE 12.13

	 	-
	 	Calculation Agents
	SCHEDULE 12.17(a)

	 	-
	 	Releases of Merrill Collateral
	 SCHEDULE 12.18(b)

	 	-
	 	Terminated Agreements
	 
	 	 	 	 
	EXHIBIT A

	 	-
	 	Form of Acceptable Letter of Credit
	EXHIBIT B

	 	-
	 	Form of BAC Guarantee






 -iv




 









 





          AMENDED AND RESTATED CREDIT SLEEVE AND REIMBURSEMENT AGREEMENT (this “Agreement”)
originally dated as of September 24, 2006, as amended and restated as of September 30, 2009 (the
“Signing Date”) and effective October 5, 2009 (the “Unwind Start Date”), among NRG
ENERGY, INC. (“NRG”) (but only as of and after the Unwind Start Date), RELIANT ENERGY POWER
SUPPLY, LLC, a Delaware limited liability company (“REPS”), RERH Holdings, LLC, a Delaware
limited liability company (“RERH Holdings”), Reliant Energy Retail Holdings, LLC, a
Delaware limited liability company (“RERH”), Reliant Energy Retail Services, LLC, a
Delaware limited liability company (“RERS”) and RE Retail Receivables, LLC, a Delaware
limited liability company (“RERR”, and together with NRG (but only on and after the Unwind
Start Date), REPS, RERH Holdings, RERH, RERS and RERR, the “Sleeve Obligors”), MERRILL
LYNCH COMMODITIES, INC., a Delaware corporation, as sleeve provider (the “Sleeve
Provider”), and MERRILL LYNCH & CO., INC., a Delaware corporation, as guarantee provider (the
“ML Guarantee Provider”, together with the Sleeve Provider, the “Merrill Parties”,
and together with the Sleeve Obligors, the “Parties”, and each a “Party”).




          The Sleeve Obligors (other than NRG), the Sleeve Provider and the ML Guarantee Provider are
parties to the existing Credit Sleeve and Reimbursement Agreement dated as of September 24, 2006,
as previously amended and restated as of December 1, 2006, and as further amended and restated as
of August 1, 2007 and May 1, 2009 (as so previously amended and restated the “Existing
CSRA”), pursuant to which such Sleeve Obligors have requested that the Sleeve Provider, and the
Sleeve Provider has agreed to, arrange for the provision of certain guarantees of the ML Guarantee
Provider and the posting of required collateral in connection therewith, in each case, in
connection with the trading and related activities of the Sleeve Obligors.




          The Sleeve Obligors have arranged for the return of all Merrill Collateral on the Unwind Start
Date, including all ML Guarantees, and the release on the Unwind Start Date of the Merrill Parties
from all other obligations under the Existing CSRA, in each case, except for the Merrill Parties’
obligations in respect of the Post-Unwind Start Date Obligations (as defined below).




          In connection with the Unwind Start Date, the Parties desire to amend and restate the Existing
CSRA.




          Accordingly, subject to Section 12.17, the Parties agree that the Existing CSRA shall
be amended and restated in its entirety as follows:




          Section 1. Definitions and Accounting Matters.




          1.01. Certain Defined Terms. As used herein, the following terms shall have the following
respective meanings:




          “Acceptable Collateral Agent” means (a) any of BNYMellon N.A., Wells Fargo Bank, N.A.,
Deutsche Bank, N.A. or JPMorgan Chase, N.A., in each case, so long as such person has a short-term
credit rating of at least A-1 by S&P and P-2 by Moody’s, a long-term debt rating




 









 




of at least A by S&P and A-1 by Moody’s, and assets of at least $10,000,000,000, or (b) other
major U.S. commercial bank or a foreign bank with a U.S. branch office as may be agreed by the
Parties.




          “Acceptable Letter of Credit” means an irrevocable, non-transferable, standby letter
of credit, expiring in not less than 20 Business Days (or, if earlier, the date on which the
obligations secured by such Acceptable Letter of Credit are satisfied), issued by Deutsche Bank,
BNP Paribas, Bank of America, N.A. or Royal Bank of Scotland, in each case, so long as such issuer
possesses a Credit Rating of at least A by S&P and A2 by Moody’s, in the form attached hereto as
Exhibit A or such other form that is reasonably acceptable to the Merrill Parties and is
maintained in accordance with the provisions of Section 10 of this Agreement. All costs relating
to any such Acceptable Letter of Credit shall be for the account of the Sleeve Obligors.




          “Affiliate” of any specified Person means any other Person directly or indirectly
Controlling or Controlled by or under direct or indirect common Control with such specified Person;
provided that a Person will be deemed to be an Affiliate of NRG if NRG has knowledge that such
Person beneficially owns 10% or more of the Voting Stock of NRG; provided, further, that NRG shall
only be deemed to have knowledge of any Person beneficially owning 10% or more of NRG’s Voting
Stock if such Person has filed a statement of beneficial ownership pursuant to Sections 13(d) or
13(g) of the Exchange Act or has provided written notice thereof to NRG.




          “Aggregate Merrill Threshold” means, at any time, the sum of the “Thresholds”
applicable at such time to REPS (and MLCI as its credit support provider) to the extent actually
utilized at such time to cover Current Exposure under Power and Hedging Contracts for which any
Post-Unwind Start Date Transaction remains outstanding.




          “Agreement” has the meaning ascribed thereto in the preamble to this Agreement.




          “Asset Sale” shall have the meaning set forth in the NRG Credit Agreement as in effect
on the date hereof.




          “Attributable Debt” means, on any date, (a) in respect of a sale and leaseback
transaction, the present value of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be extended (such
present value to be calculated using a discount rate equal to the rate of interest implicit in such
transaction, determined in accordance with GAAP; provided, that if such sale and leaseback
transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby
will be determined in accordance with the definition of “Capital Lease Obligation”) and (b) in
respect of any Synthetic Lease Obligation or financing lease, the amount of the remaining lease
payments under the relevant lease that would as of such date be required to be capitalized on a
balance sheet in accordance with GAAP if such lease were accounted for as a Capital Lease
Obligation.




          “Audited Financial Statements” means the audited consolidated balance sheet of NRG and
its consolidated Subsidiaries for the Fiscal Year ended December 31, 2008, and the




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related consolidated statements of income or operations, stockholders’ equity, comprehensive
income (loss) and cash flows for such Fiscal Year, setting forth in each case in comparative form
the figures as of the end of, and for, the previous Fiscal Year, all in reasonable detail.




          “BAC Guarantee” means the guarantee of the ML Parent Guarantor in the form of
Exhibit B hereto.




          “Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as heretofore and hereafter
amended, as codified at 11 U.S.C. Section 101 et seq.




          “Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a)
the Federal Funds Rate in effect for such day plus 1/2 of 1% and (b) the Prime Rate in effect for
such day. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Rate
shall be effective from and including the effective date of such change in the Prime Rate or the
Federal Funds Rate, respectively.




          “BCFe” means, (a) with respect to any Post-Unwind Start Date Transaction, the
contracted volume of the Sleeve Obligors power and gas positions for such transaction expressed as
a billion cubic feet equivalent, (b) in the case of options, by using the delta volumes instead of
the contracted volume, and (c) in the case of power, by converting fixed price power to Henry Hub
gas using a market heat rate, as calculated by the Sleeve Provider in a manner consistent with
Section VII of the Sleeve Obligors’ retail risk management policy in effect on the Unwind Start
Date.




          “Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact closed in, Houston,
Texas or New York City.




          “Calculation Agent” has the meaning ascribed thereto in Section 12.13.




          “Capital Lease Obligation” means, as applied to any Person, at the time any
determination is to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet of such Person in accordance with
GAAP in the reasonable judgment of such Person, and the stated maturity thereof shall be the date
of the last payment of rent or any other amount due under such lease prior to the first date upon
which such lease may be prepaid by the lessee without payment of a penalty.




          “Capital Outlay Date” has the meaning ascribed thereto in Section 3.01.




          “Capital Stock” means:





     (a) in the case of a corporation, corporate stock;




     (b) in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate stock;



-3-









 






     (c) in the case of a partnership or limited liability company, partnership interests
(whether general or limited) or membership interests; and




     (d) any other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing Person, but
excluding from all of the foregoing any debt securities convertible into Capital Stock,
whether or not such debt securities include any right of participation with Capital Stock.



          “Change of Control” means the occurrence of any of the following:





     (a) the direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions, of all or
substantially all of the properties or assets of NRG and its Subsidiaries taken as a whole
to any “person” (as that term is used in Section 13(d) of the Exchange Act, but excluding
any employee benefit plan of NRG or any of its Subsidiaries, and any Person or entity acting
in its capacity as trustee, agent or other fiduciary or administrator of such plan);




     (b) the adoption of a plan relating to the liquidation or dissolution of NRG;




     (c) the consummation of any transaction (including any merger or consolidation) the
result of which is that any “person” (as defined above) becomes the beneficial owner,
directly or indirectly, of more than 40% of the Voting Stock of NRG, measured by voting
power rather than number of shares;




     (d) NRG consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, NRG, in any such event pursuant to a transaction
in which any of the outstanding Voting Stock of NRG or such other Person is converted into
or exchanged for cash, securities or other property, other than any such transaction where
the Voting Stock of NRG outstanding immediately prior to such transaction is converted into
or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or transferee
Person constituting a majority of the outstanding shares of such Voting Stock of such
surviving or transferee Person (immediately after giving effect to such issuance); and




     (e) any Other Sleeve Obligor ceases to be a Wholly Owned Subsidiary of NRG (other than
RERS or RERR).



     It shall not be deemed a “Change of Control” pursuant to clauses (a), (c) or
(d) above, if NRG or the surviving entity, as the case may be, has the same or higher
Credit Rating from each of S&P and Moody’s immediately following such transfer, sale, disposition,
merger, consolidation or other transaction as NRG did immediately prior to such transfer, sale,
disposition, merger, consolidation or other transaction.



          “C&I Guarantees” means each of the ML Guarantees identified as C&I Guarantees on
Schedule 1.01(a).




-4-









 








          “Code” means the Internal Revenue Code of 1986, as amended from time to time.




          “Collateral Foreclosure” means any setoff, application or foreclosure taken by an
applicable secured party with respect to any Merrill Collateral or any failure of any applicable
Counterparty or other beneficiary of Merrill Collateral hereunder to return Merrill Collateral to
the applicable Merrill Party within one Business Day of the date required by the terms of the
applicable Counterparty Documents or other applicable agreement.




          “Collateral Trustee” has the meaning ascribed thereto in the Existing Security
Documents.




          “Compliance Information” means, with respect to any Compliance Party, the information
customarily requested from similarly situated trading counterparties by the Sleeve Provider or the
ML Guarantee Provider in the ordinary course of their respective businesses (i) to comply with
applicable Laws (including the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001))) and (ii) to comply with other internal compliance requirements, in each case to
the extent the same are of general application to, and established by the Sleeve Provider or the ML
Guarantee Provider in the ordinary course of their respective businesses for, similarly situated
trading counterparties.




          “Compliance Party” means each Person entitled to benefit from (i) an ML Guarantee, or
(ii) the posting of cash collateral by, or any agreement to post or provide cash collateral by, the
Sleeve Provider, under any Post-Unwind Start Date Transaction.




          “Compliance Requirements” means, with respect to any Compliance Party, the receipt by
the Sleeve Provider or the ML Guarantee Provider, as applicable, from such Compliance Party of
applicable Compliance Information that satisfies the compliance requirements generally established
by the Sleeve Provider or the ML Guarantee Provider for similarly situated trading counterparties
in the ordinary course of their respective businesses.




          “Contingent Adjustment Amount” has the meaning ascribed thereto in Section 10.




          “Contingent Cash Collateral” means, for any day, all cash posted by or on behalf of
the Sleeve Obligors to the Merrill Parties pursuant to clauses (a)(i)(2) or
(a)(ii)(B) of Section 10, which as of such day has not theretofore been applied or
used by the Merrill Parties to satisfy any Credit Sleeve Obligation or otherwise returned to NRG.




          “Contingent Collateral” means, for any day, the aggregate amount of all Acceptable
Letters of Credit, together with all Contingent Cash Collateral, posted by or on behalf of the
Sleeve Obligors to the Merrill Parties pursuant to clauses (a)(i)(2) or (a)(ii)(B)
of Section 10, which as of such day has not theretofore been applied or used by the Merrill
Parties to satisfy any Credit Sleeve Obligation or otherwise returned to NRG.




          “Contingent Exposure” means, with respect to any Post-Unwind Start Date Transaction,
the aggregate Dollar amount of all potential liability of the Merrill Parties in respect of such
transaction, as reasonably determined by the Merrill Parties to a 99.0% (2.32-sigma) confidence
level. The determination of Contingent Exposure in respect of any Post-Unwind




-5-









 




Start Date Transaction shall be made on a contract by contract basis and shall exclude any
amounts included in the calculation of Current Exposure.




          “Contractual Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which such Person is a party
or by which it or any of its property is bound.




          “Control” means, with respect to any Person, the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise; and the terms “controlling,”
“controlled by” and “under common control with” have correlative meanings.




          “Core Collateral Subsidiary” shall have the meaning set forth in the NRG Credit
Agreement as in effect on the date hereof, it being understood and agreed that any and all
provisions in effect on the date hereof under the NRG Credit Agreement permitting any Person to
designate and re-designate any Core Collateral Subsidiary, any assets thereof or any equity issued
by it as a Subsidiary or asset that is not Core Collateral (as defined in the NRG Credit Agreement)
shall apply hereunder, and upon any Core Collateral Subsidiary or any assets or equity thereof
being so designated, such Subsidiary shall cease to be a Core Collateral Subsidiary hereunder.




          “Counterparty” means each “counterparty” in respect of a Post-Unwind Start Date
Transaction identified on Schedule 1.01(a) hereto.




          “Counterparty Document” means, with respect to each Counterparty, the Power and
Hedging Contract, Credit Support Agreement and ML Guarantee and any related certificates, documents
and agreements, as applicable, relating to such Counterparty.




          “CPT” means the prevailing time in Houston, Texas.




          “Credit Rating” means at any time:





     (a) with respect to any Counterparty or any issuer of an Acceptable Letter of Credit,
if Moody’s or S&P has issued a credit rating for long-term senior unsecured, and non-credit
enhanced, Dollar-denominated debt of such Person, or, if such credit rating is not
available, the issuer rating of such Person, issued by each of Moody’s and S&P, as
applicable, as in effect at such time in respect of such Person (in the event of a split
rating the lower rating shall apply);




     (b) with respect to any Counterparty or any issuer of an Acceptable Letter of Credit,
if (i) clause (a) above does not apply at such time, (ii) the obligations of such
Person are guaranteed by any Person, (iii) the Sleeve Provider has approved in its
reasonable discretion the form of such guarantee and (iv) Moody’s or S&P has issued a credit
rating for long-term senior unsecured, and non-credit enhanced debt of such guarantor, such
credit rating issued by each of Moody’s and S&P, as applicable, as in effect at such time in
respect of the guarantor (in the event of a split rating the lower rating shall apply);



-6-









 






     (c) with respect to any Counterparty, if neither clause (a) nor
clause (b) above shall apply at such time, the credit rating, if any, for such
Person designated in writing by the Sleeve Provider and in effect at such time for purposes
of this Agreement (which the Sleeve Provider may designate or withhold in its reasonable
discretion after consultation with, and review of any relevant credit information provided
by, the Sleeve Obligors); or




     (d) with respect to the ML Guarantee Provider, if Moody’s or S&P has issued a credit
rating for long-term senior unsecured, and non-credit enhanced, Dollar-denominated debt of
the ML Guarantee Provider, such credit rating, or, if such credit rating in not available,
the issuer rating of the ML Guarantee Provider, issued by Moody’s or S&P, as applicable, as
in effect at such time in respect of the ML Guarantee Provider.



          “Credit Sleeve Obligations” mean the Obligations of the Sleeve Obligors under this
Agreement, including the Reimbursement Obligations and the Obligations in respect of the payment of
all Monthly Sleeve Fees, Make-whole Payment and any other amounts required to be paid by the Sleeve
Obligors hereunder.




          “Credit Sleeve Termination Date” means the earliest date on which the Credit Sleeve
Obligations have been terminated and satisfied in full and all Merrill Collateral, including all
C&I Guarantees, posted by the Merrill Parties has been returned to the Merrill Parties or
reimbursement has been made therefore and on which all other obligations owed to the Merrill
Parties hereunder and under the other Transaction Documents have been paid and satisfied in full
(in each case, other than indemnities and any similar obligations of NRG and the Other Sleeve
Obligors not then due and payable that expressly survive termination of this Agreement and the
other Transaction Documents).




          “Credit Support Agreement” means a credit support agreement among a Counterparty, REPS
and the Sleeve Provider, in each case, in the form in effect as of the Unwind Start Date.




          “Current Adjustment Amount” has the meaning ascribed thereto in Section 10.




          “Current Collateral” means, for any day, all cash and Acceptable Letters of Credit
posted by or on behalf of the Sleeve Obligors to the Merrill Parties pursuant to clauses
(a)(i)(1) or (a)(ii)(A) of Section 10 of this Agreement, which as of such day
has not theretofore been applied or used by the Merrill Parties to satisfy any Credit Sleeve
Obligation or otherwise returned to NRG.




          “Current Draw Reimbursement Obligations” means Draw Reimbursement Obligations other
than any portion thereof that becomes a Deferred Reimbursement Obligation.




          “Current Exposure” means, as of any Business Day, (a) the sum, without duplication, of
(i) the Current Mark-to-Market of all Post-Unwind Start Date Transactions, (ii) all cash, letters
of credit, surety bonds and any cash equivalents posted by the Merrill Parties under this
Agreement, (iii) the aggregate amount of all outstanding ML Guarantees (other than any ML Guarantee
of a Post-Unwind Start Date Transaction) and (iv) Current Payables, in each case, as determined by
the Merrill Parties as of such Business Day and set forth in the related Exposure Report; provided
that for purposes of the foregoing (1) Current Mark-to-Market shall




-7-









 




exclude the effect of the True Forward Hedge Positions solely to the extent such positions are
in-the-money to the Sleeve Obligors and exceed Current Payables and (2) the amount of any ML
Guarantee shall be deemed equal to the stated or determinable amount of the related primary
obligation, or portion thereof, in respect of which such ML Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as determined by ML
Guarantee Provider in good faith. Without limiting any challenge rights of the Sleeve Obligors
provided in Part I of Schedule 1.01(c), the determination of Current Exposure shall be
conclusive and binding on all of the Parties hereto absent manifest error. As used in this
definition, “True Forward Hedge Positions” means all Forward Hedge Positions (as defined in
Schedule 1.01(c)).




          “Current Mark-to-Market” has the meaning ascribed thereto in Schedule 1.01(c).




          “Current Payables” means, for any day, the aggregate accounts payable balance for such
day of the Sleeve Obligors under all Power and Hedging Contracts in respect of which any
Post-Unwind Start Date Transaction remains outstanding, as reflected in the books and records of
the Sleeve Obligors.




          “Custody Date” means the date on which a definitive standby custody agreement with an
Acceptable Collateral Agent has been executed and delivered by each of NRG, MLCI and such
Acceptable Collateral Agent.




          “Default” means an Event of Default or an event that with notice or lapse of time or
both would, unless cured or waived, become an Event of Default.




          “Deferred Cure Reimbursement Obligations” has the meaning ascribed thereto in
Section 12.07(b).




          “Deferred Draw Reimbursement Obligations” has the meaning ascribed thereto in
Section 3.02.




          “Deferred Reimbursement Obligations” means the Deferred Draw Reimbursement Obligations
and Deferred Cure Reimbursement Obligations.




          “Dollars” and “$” means lawful money of the United States of America.




          “Draw Reimbursement Obligations” has the meaning ascribed thereto in Section
3.02.




          “Environmental Laws” means any and all Federal, state, local, regional and foreign
statutes, laws, rules of common law, constitutional provisions, regulations, ordinances, rules
judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the environment or Hazardous
Materials, including, those relating to the use analysis, generation, manufacture, storage,
discharge, emission, release, disposal, transportation treatment, investigation, removal, or
remediation of Hazardous Materials. Environmental Laws include those acts commonly referred to as:
the Comprehensive Environmental Response, Compensation and Liability Act of 1980; the Superfund
Amendments and Reauthorization Act; the National Environmental Policy




-8-









 




Act; the Hazardous Materials Transportation Act; the Resource Conservation and Recovery Act,
the Solid Waste Disposal Act, the Clean Water Act, the Clean Air Act, the Toxic Substances Control
Act, and the Occupational Safety and Health Act, and their state counterparts.




          “ERCOT” means the Electric Reliability Council of Texas, or any successor thereto.




          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations promulgated thereunder.




          “ERISA Affiliate” means any trade or business (whether or not incorporated) which is a
member of the controlled group of RERH Holdings or under common control with RERH Holdings within
the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code) or Section 4001(a)(14) of ERISA.




          “ERISA Event” means (a) a reportable event (within the meaning of Section 4043 of
ERISA) with respect to a Pension Plan; (b) a withdrawal by RERH Holdings or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that
is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal (within the meaning of Sections 4203 or 4205 of ERISA) by RERH Holdings or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization;
(d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC
to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA,
upon RERH Holdings or any ERISA Affiliate.




          “Event of Default” means a Sleeve Provider Event of Default or a Reliant Event of
Default.




          “Exchange Act” means the Securities Exchange Act of 1934, as amended.




          “Exchange Traded Contract” has the meaning ascribed thereto in the Existing CSRA.




          “Excluded Subsidiaries” means collectively, the “Excluded Subsidiaries” from time to
time as defined in the NRG Credit Agreement and the “Excluded Subsidiaries” from time to time as
defined in the Senior Note Documents as the NRG Credit Agreement and such Senior Note Documents are
in effect on the Unwind Start Date, it being understood and agreed that any provisions in effect on
the date hereof under the NRG Credit Agreement permitting any Person to designate and re-designate
a Subsidiary as an Excluded Subsidiary shall apply hereunder and upon any such designation under
the NRG Credit Agreement, the relevant Subsidiary shall be an Excluded Subsidiary hereunder.




-9-









 








          “Exclusivity and Fee Letter” means that certain letter agreement, dated February 22,
2009, from NRG and accepted and agreed to by the Merrill Parties.




          “Exempt Subsidiaries” means the “Exempt Subsidiaries” from time to time as defined in
the NRG Credit Agreement as such agreement is in effect on the Unwind Start Date.




          “Existing CSRA” has the meaning ascribed thereto in the introductory paragraphs to
this Agreement.




          “Existing Security Documents” shall mean the “Security Documents” (as defined in the
Existing CSRA).




          “Exposure Report” has the meaning ascribed thereto in Schedule 1.01(c).




          “Fair Market Value” means the value that would be paid by a willing buyer to a willing
seller in a transaction not involving distress or necessity of either party, determined in good
faith by the chief financial officer or the treasurer of NRG or Board of Directors of NRG or the
selling entity.




          “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided, that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such
rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to Bank of America, N.A. on such day on such transactions as determined by the Sleeve
Provider.




          “Federal Reserve Board” means the Board of Governors of the Federal Reserve System of
the United States of America.




          “First Execution Date” means September 24, 2006.




          “Fiscal Quarter” means each three month period of a Fiscal Year ending on March 31,
June 30, September 30, and December 31.




          “Fiscal Year” means any period of twelve consecutive calendar months ending on
December 31; references to a Fiscal Year with a number corresponding to any calendar year
(e.g., the “2006 Fiscal Year”) refer to the Fiscal Year ending on December 31 of
such calendar year.




          “GAAP” means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other entity as




-10-









 




have been approved by a significant segment of the accounting profession, which are in effect
from time to time.




          “Governmental Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state, county, or local, and any agency,
authority, instrumentality, regulatory body, court, central bank, independent system operator,
transmission organization or other entity to the extent exercising executive, legislative,
judicial, taxing, monetary, regulatory, supervisory or administrative powers or functions of or
pertaining to government or the regulation of the business of the Sleeve Obligors.




          “Governmental Contract” means a contract for the purchase or sale of any retail
electric products or services between any Sleeve Obligor and a Governmental Customer.




          “Governmental Customer” means (a) any agency, authority, instrumentality, central
bank, independent system operator, transmission organization or other entity owned or controlled by
any Governmental Authority or (b) any Person that is or could be a Governmental Authority; in
either case, to the extent acting in a commercial capacity under a Governmental Contract.




          “Guarantee” means a guarantee other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any manner including by way
of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof,
of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or
by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to
maintain financial statement conditions or otherwise; provided, that standard contractual
indemnities that do not relate to Indebtedness shall not be considered a Guarantee). The term
“Guarantee” as a defined verb has a corresponding meaning.




          “Guaranteed Obligations” has the meaning ascribed thereto in Section 11.01.




          “Hazardous Materials” means all explosive, flammable, corrosive or radioactive
substances or wastes and all hazardous, carcinogenic, mutagenic or toxic substances, wastes or
other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes, toxic mold and all
other substances or wastes of any nature regulated pursuant to any Environmental Law.




          “ICE” means the IntercontinentalExchange, Inc. or its successor.




          “Indebtedness” means, with respect to any specified Person, any indebtedness of such
Person (excluding accrued expenses or trade payables), whether or not contingent (without
duplication):





     (a) in respect of borrowed money;




     (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit
or reimbursement agreements in respect thereof;




     (c) in respect of banker’s acceptances;



-11-









 






     (d) representing Capital Lease Obligations or Attributable Debt in respect of sale and
leaseback transactions, Synthetic Lease Obligations or financing leases;




     (e) representing the balance deferred and unpaid of the purchase price of any property
or services due more than six months after such property is acquired or such services are
completed;




     (f) representing any Interest Hedging Obligations; or




     (g) consisting of Disqualified Stock;


whether or not any of the preceding items appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes
all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not
such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included,
the Guarantee by the specified Person of any Indebtedness of any other Person. The amount of any
Indebtedness outstanding as of any date will be:





     (i) the accreted value of the Indebtedness, in the case of any Indebtedness issued with
original issue discount;




     (ii) the principal amount of and premium (if any) on the Indebtedness, in the case of
any other Indebtedness;




     (iii) in respect of Indebtedness of other Persons secured by a Lien on the assets of
the specified Person, the lesser of:




     (A) the Fair Market Value of such asset at such date of determination, and




     (B) the amount of such Indebtedness of such other Persons; and




     (iv) in respect of any Guarantee, an amount equal to the stated or determinable amount
of the related primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the guaranteeing Person in good faith.



          “Interest Hedging Obligations” means, with respect to any specified Person, the net
obligations of such Person under:





     (a) interest rate swap agreements (whether from fixed to floating or from
floating to fixed), interest rate cap agreements and interest rate collar
agreements;




     (b) other agreements or arrangements designed to manage interest rate risk; and



-12-









 






     (c) other agreements or arrangements designed to protect such Person against
fluctuations in currency exchange rates.



          “Law” means, as to any Person, any law, rule, regulation, ordinance or treaty, or any
determination, ruling or other directive by or from a court, arbitrator or other Governmental
Authority, including ERCOT, in each case applicable to or binding on such Person or any of its
property or assets or to which such Person or any of its property or assets is subject.




          “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law, including any conditional sale or other title retention
agreement and any lease that constitutes a security interest.




          “Loans” means the loans made by the Working Capital Facility Provider to REPS under,
and in accordance with, the Working Capital Facility.




          “Make-whole Payment” has the meaning ascribed thereto in Section 3.05.




          “Margin Stock” means “margin stock” within the meaning of Regulations T, U and X of
the Federal Reserve Board.




          “Market Information” means market information such as price curves, volatilities,
interest rates and similar information for which quotes are customarily available from reference
market makers.




          “Material Adverse Effect” means a material adverse effect upon (a) the business,
operations, property or financial condition of NRG and its Subsidiaries taken as a whole; or
(b) the validity or enforceability against any of NRG or any Other Sleeve Obligor of any
Transaction Document to which it is a party or the material rights and remedies of the Sleeve
Provider thereunder.




          “Merrill Collateral” or “ML Collateral” has the meaning ascribed thereto in
Section 3.01.




          “Merrill Parties” means the Sleeve Provider and the ML Guarantee Provider.




          “Minimum Transfer Amount” means $100,000.




          “Mirror OTC Contract” has the meaning ascribed thereto in the Existing CSRA.




          “ML Credit Event” means the any of the following:





     (a) the ML Guarantee Provider (i) shall default (after giving effect to all
applicable grace periods) in the payment of any Indebtedness or Guarantee having an
aggregate principal amount (including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than $100,000,000 and (ii) either
(A) at the time of such default (after giving effect to all applicable grace
periods), the final scheduled maturity of such Indebtedness shall have



-13-









 







occurred or (B) the final scheduled maturity of such Indebtedness shall have
been accelerated; or




     (b) any senior unsecured, non-credit enhanced debt of the ML Guarantee Provider
shall fail to maintain a Credit Rating of at least BBB by S&P or Baa by Moody’s; or




     (c) the ML Guarantee Provider institutes or consents to the institution of any
proceeding under any insolvency, bankruptcy, reorganization, receivership,
liquidation, winding-up or other debtor relief law, or makes an assignment for the
benefit of creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it
or for all or any material part of their respective property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of the ML Guarantee Provider and the
appointment continues undischarged or unstayed for 60 calendar days; or any
proceeding under any insolvency, bankruptcy, reorganization, receivership,
liquidation, winding-up or other debtor relief law relating to the ML Guarantee
Provider or to all or any material part of their respective property is instituted
without the consent of such Person and continues undismissed or unstayed for 60
calendar days, or an order for relief is entered in any such proceeding; or




     (d) the ML Guarantee Provider becomes unable or admits in writing its inability
or fails generally to pay its debts as they become due; or




     (e) the entry into any definitive agreement for the sale, merger or
consolidation, or other transaction or disposition of or by either of the Merrill
Parties, if the resulting successor to or assignee of either of the Merrill Parties
would not be a direct or indirect 100% owned subsidiary of the ML Parent Guarantor,
or would otherwise result in the termination of the BAC Guarantee.



          “ML Guarantee” means each guarantee listed on Schedule 1.01(a) and any
guarantee by the ML Guarantee Provider in respect of any Post-Unwind Start Date Transaction.




          “ML Guarantee Provider” means ML&Co.




          “ML&Co.” means Merrill Lynch & Co., Inc., a Delaware corporation.




          “MLCI” means Merrill Lynch Commodities, Inc., a Delaware corporation.




          “ML Parent Guarantor” means Bank of America Corporation, a Delaware corporation.




          “Monthly Determination Date” means, with respect to any calendar month, the last
Business Day of the immediately preceding month.




          “Monthly Payment Date” means, in respect of any month, the date two Business Days
after the first day of such month.




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          “Monthly Sleeve Fee” means, in respect of any calendar month for which the Credit
Sleeve Termination Date has not occurred or prior to the Monthly Determination Date for such month,
(a) if the Merrill Parties remain obligated in respect of any Post-Unwind Start Date Transactions
with Current Exposure that is equal to or greater than 50 BCFe (as determined as of the Monthly
Determination Date for such month), $1,000,000, (b) if the Merrill Parties remain obligated in
respect of any Post-Unwind Start Date Transactions with Current Exposure that is equal to or
greater than 30 BCFe but less than 50 BCFe (as determined as of the Monthly Determination Date for
such month), $750,000, and (c) if the Merrill Parties remain obligated in respect of any
Post-Unwind Start Date Transactions with Current Exposure that is less than 30 BCFe (as determined
as of the Monthly Determination Date for such month) or if the Credit Sleeve Termination Date has
not occurred on or prior to such Monthly Determination Date, $500,000; provided that for any month
following January 2010 in which the Credit Sleeve Termination Date has not occurred on or prior to
the Monthly Determination Date for such month, the Monthly Sleeve Fee that would otherwise be
payable for such month shall be increased by 100%.




          “Moody’s” shall mean Moody’s Investors Service, Inc. or if such company shall cease to
issue ratings, another nationally recognized rating company selected in good faith by mutual
agreement of the Sleeve Provider and NRG.




          “Multiemployer Plan” means a multiemployer plan defined as such in Section 3(37) of
ERISA to which contributions have been made, or have been required to be made, by RERH Holdings or
any ERISA Affiliate and that is covered by Title IV of ERISA.




          “Notice Date” has the meaning ascribed thereto in Section 3.02.




          “NRG” has the meaning ascribed thereto in the preamble to this Agreement.




          “NRG Credit Agreement” means the Second Amended and Restated Credit Agreement dated as
of June 8, 2007 between NRG, Citicorp North America Inc., as Administrative Agent, and the lenders
and other Persons party thereto, as amended, restated, refinanced and otherwise modified from time
to time.




          “NYMEX” means the New York Mercantile Exchange or its successor.




          “Obligations” means any amounts, principal, interest, premium, fees, indemnifications,
reimbursements, expenses, damages and other liabilities payable under the applicable documentation.




          “Obligee Guarantor” has the meaning ascribed thereto in Section 11.06.




          “Other Sleeve Obligors” means each of REPS, RERH Holdings, RERH, RERS, RERR and any
other Subsidiaries of RERH Holdings and, in each case, their respective successors and assigns.




          “Partial Credit Sleeve Termination Date” means the earliest date on which all of the
Merrill Parties’ obligations in respect of the Post-Unwind Start Date Transactions have been
terminated and satisfied in full and all Merrill Collateral (other than any C&I Guarantee in




-15-









 




respect of which NRG has satisfied the requirements of Section 10(a)(iii)) posted by the
Merrill Parties has been returned to the Merrill Parties or reimbursement has been made therefor.




          “Party” has the meaning ascribed thereto in the preamble to this Agreement.




          “PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any
or all of its functions under ERISA.




          “Pension Plan” means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and
is sponsored or maintained by RERH Holdings or any ERISA Affiliate or to which RERH Holdings or any
ERISA Affiliate contributes or has an obligation to contribute or with respect to which RERH
Holdings or any ERISA Affiliate has any direct or contingent liability, or in the case of a
multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at
any time during the immediately preceding five plan years.




          “Person” means any individual, corporation, firm, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited liability company or
government or other entity.




          “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of
ERISA) established by RERH Holdings or its Subsidiaries or with respect to which RERH Holdings or
its Subsidiaries could have any direct or contingent liability or, with respect to any such plan
that is subject to Section 412 of the Code, or Title IV of ERISA, any such plan established by an
ERISA Affiliate.




          “Post-Default Rate” means a per annum rate equal to the Base Rate (as in effect from
time to time) plus 11.00%.




          “Post-Unwind Start Date Obligations” means, collectively, the Post-Unwind Start Date
Transactions, the outstanding cash postings to TDSPs described on Schedule 1.01(a) hereto
and the ML Guarantees.




          “Post-Unwind Start Date Transaction” means a trade entered prior to the Unwind Start
Date in accordance with this Agreement under which the final delivery date, payment date, or
settlement date is scheduled to occur after the Unwind Start Date, and in each case, is identified
on Schedule 1.01(a) hereto.




          “Posted Collateral” means, for any day, all cash and letters of credit posted by the
Sleeve Obligors to the Merrill Parties under this Agreement, including all Current Collateral and
Contingent Collateral posted in accordance with Section 10, which as of such day has not
theretofore been applied or used by the Merrill Parties to satisfy any Credit Sleeve Obligation or
otherwise returned to NRG.




          “Power and Hedging Contract” means each over-the-counter master agreement between REPS
and a Counterparty providing for transactions regarding Accepted Products (as such term is defined
in the Existing CSRA), and including as part thereof the associated Credit Support Agreement, in
each case, existing on the Unwind Start Date.




-16-









 








          “Preferred Equity” means, collectively, each of (i) the Certificate of Designations of
NRG, adopted December 14, 2004, with respect to 4.0% Convertible Perpetual Preferred Stock and (ii)
the Certificate of Designations of NRG, adopted August 5, 2005, with respect to 3.625% Convertible
Perpetual Preferred Stock.




          “Prime Rate” means a fluctuating rate of interest equal to the rate of interest most
recently announced by the Wall Street Journal as the prime rate for Dollar-denominated loans.




          “Reimbursement Guarantors” means each of the Other Sleeve Obligors and their
respective successors and assigns.




          “Reimbursement Guaranty” means the guarantee of the Reimbursement Guarantors to repay
the Guaranteed Obligations in accordance with Section 11.




          “Reimbursement Obligations” means the Draw Reimbursement Obligations and the Deferred
Reimbursement Obligations.




          “Reliant Default” means any Default with respect to a Reliant Event of Default.




          “Reliant Event of Default” has the meaning ascribed thereto in Section 8.01.




          “Remaining C&I Exposure” means an amount equal to 115% of the sum of all exposure and
all other liabilities and potential liabilities of the Merrill Parties under each C&I Guarantee, as
reasonably determined by the Merrill Parties (in each case, calculated by the Merrill Parties in a
manner consistent with the calculation of Current Exposure and Contingent Exposure hereunder).




          “REPS” has the meaning ascribed thereto in the preamble of this Agreement.




          “RERH” has the meaning ascribed thereto in the preamble to this Agreement.




          “RERH Holdings” has the meaning ascribed thereto in the preamble to this Agreement.




          “RERR” has the meaning ascribed thereto in the preamble to this Agreement.




          “RERS” has the meaning ascribed thereto in the preamble to this Agreement.




          “Responsible Officer” means the chief executive officer, president, chief financial
officer, treasurer or assistant treasurer of a Party and, in addition with respect to the Other
Sleeve Obligors, any officer thereof that is also a vice president or more senior officer of NRG
(excluding vice presidents in marketing). Any document delivered hereunder that is signed by a
Responsible Officer of a Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Party and such Responsible
Officer shall be conclusively presumed to have acted on behalf of such Party.




          “Restricted Subsidiary” shall have the meaning set forth in the NRG Credit Agreement
as in effect on the date hereof, it being understood and agreed that any and all




-17-









 




provisions in effect on the date hereof under the NRG Credit Agreement permitting any Person
to designate and re-designate any Restricted Subsidiary or any other type of Subsidiary shall apply
hereunder; provided that, for purposes of this Agreement, each Other Sleeve Obligor shall be deemed
to be a Restricted Subsidiary at all times.




          “S&P” means Standard & Poor’s Ratings Group (presently a division of The McGraw-Hill
Companies, Inc.), together with its successors, or, if such company shall cease to issue ratings,
another nationally recognized rating company selected in good faith by mutual agreement of the
Sleeve Provider and NRG.




          “Scheduled Term” means the period from the First Execution Date through January 29,
2010.




          “SEC” means the Securities and Exchange Commission or any Governmental Authority
succeeding to any of its principal functions.




          “Senior Note Documents” means any or all of the following:





     (a) The Base Indenture, dated as of February 2, 2006 (as amended, restated, refinanced,
modified or otherwise in effect from time to time) (the “Base Indenture”), by and
between NRG and Law Debenture Trust Company of New York, as trustee (the “Trustee”);




     (b) First Supplemental Indenture, dated as of February 2, 2006, by and among NRG, the
subsidiaries of the Company set forth on Schedule I attached thereto and the Trustee,
providing for the issuance of 7.250% Senior Notes due 2014;




     (c) Second Supplemental Indenture, dated as of February 2, 2006, by and among NRG, the
subsidiaries of the Company set forth on Schedule I attached thereto and the Trustee,
providing for the issuance of 7.375% Senior Notes due 2016;




     (d) Third Supplemental Indenture, dated as of March 14, 2006, by and among NRG, the
guarantors listed on the signature page thereto and the Trustee;




     (e) Fourth Supplemental Indenture, dated as of March 14, 2006, by and among NRG, the
guarantors listed on the signature page thereto and the Trustee;




     (f) Fifth Supplemental Indenture, dated as of April 28, 2006, by and among NRG, the
guarantors listed on the signature page thereto and the Trustee;




     (g) Sixth Supplemental Indenture, dated as of April 28, 2006, among NRG, the guarantors
listed on the signature page thereto and the Trustee;




     (h) Seventh Supplemental Indenture, dated November 13, 2006 among NRG, the guarantors
listed on the signature page thereto and the Trustee;




     (i) Eighth Supplemental Indenture, dated November 13, 2006 among NRG, the guarantors
listed on the signature page thereto and the Trustee;



-18-









 






     (j) Ninth Supplemental Indenture, dated as of November 21, 2006, by and among NRG, the
subsidiaries of NRG set forth on Schedule I attached thereto and the Trustee, providing for
the issuance of 7.375% Senior Notes due 2017;




     (k) Tenth Supplemental Indenture, dated July 19, 2007 among NRG, the guarantors listed
on the signature page thereto and the Trustee;




     (l) Eleventh Supplemental Indenture, dated July 19, 2007 by and among NRG, the
guarantors listed on the signature page thereto and the Trustee;




     (m) Twelfth Supplemental Indenture, dated as of July 19, 2007 among NRG, the
subsidiaries of the Company set forth on Schedule I attached thereto and the Trustee;




     (n) Thirteenth Supplemental Indenture, dated as of August 28, 2007 among NRG, the
guarantors listed on the signature page thereto and the Trustee;




     (o) Fourteenth Supplemental Indenture, dated as of August 28, 2007, by and among NRG,
the guarantors listed on the signature page thereto and the Trustee;




     (p) Fifteenth Supplemental Indenture, dated as of August 28, 2007, by and among NRG,
the subsidiaries of the Company set forth on Schedule I attached thereto and the Trustee;




     (q) Sixteenth Supplemental Indenture, dated as of April 28, 2009, by and among NRG, the
subsidiaries of NRG party thereto and the Trustee;




     (r) Seventeenth Supplemental Indenture, dated as of April 28, 2009, by and among NRG,
the subsidiaries of NRG party thereto and the Trustee;




     (s) Eighteenth Supplemental Indenture, dated as of April 28, 2009, by and among NRG,
the subsidiaries of NRG party thereto and the Trustee;




     (t) Nineteenth Supplemental Indenture, dated as of May 8, 2009, by and among NRG, the
subsidiaries of NRG party thereto and the Trustee;




     (u) Twentieth Supplemental Indenture, dated as of May 8, 2009, by and among NRG, the
subsidiaries of NRG party thereto and the Trustee;




     (v) Twenty-first Supplemental Indenture, dated as of May 8, 2009, by and among NRG, the
subsidiaries of NRG party thereto and the Trustee;




     (w) Twenty-second Supplemental Indenture, dated as of June 5, 2009, by and among NRG,
the subsidiaries of NRG party thereto and the Trustee;




     (x) Twenty-third Supplemental Indenture, dated as of July 14, 2009, by and among NRG,
the subsidiaries of NRG party thereto and the Trustee;



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     (y) Twenty-fourth Supplemental Indenture, dated as of October 5, 2009, by and among
NRG, the subsidiaries of NRG party thereto and the Trustee;




     (z) Twenty-fifth Supplemental Indenture, dated as of October 5, 2009, by and among NRG,
the subsidiaries of NRG party thereto and the Trustee;




     (aa) Twenty-sixth Supplemental Indenture, dated as of October 5, 2009, by and among
NRG, the subsidiaries of NRG party thereto and the Trustee;




     (bb) Twenty-seventh Supplemental Indenture, dated as of October 5, 2009, by and among
NRG, the subsidiaries of NRG party thereto and the Trustee; and




     (cc) Any other supplemental indenture issued pursuant to the Base Indenture.



          “Senior Notes” shall mean each note issued pursuant to the Senior Note Documents.




          “Significant Subsidiary” shall mean any Subsidiary that would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the
Securities Act, as such Regulation is in effect on the date hereof and shall in any event include
the Core Collateral Subsidiaries.




          “Sleeve Obligors” has the meaning ascribed thereto in the preamble to this Agreement.




          “Sleeve Provider” has the meaning ascribed thereto in the preamble to this Agreement.




          “Sleeve Provider Event of Default” has the meaning ascribed thereto in Section
8.02.




          “Solvent” and “Solvency” mean, with respect to any Person on any date of
determination, that on such date (i) the fair value of the property of such Person is greater than
the total amount of liabilities, including contingent liabilities, of such Person, (ii) the present
fair salable value of the assets of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts as they become absolute and matured,
(iii) such Person does not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person’s ability to pay such debts and liabilities as they mature and (iv) such Person
is not engaged in business or a transaction, and is not about to engage in business or a
transaction, for which such Person’s property would constitute an unreasonably small capital. The
amount of contingent liabilities at any time shall be computed as the amount that, in the light of
all the facts and circumstances existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability; provided that if the context in which “Solvent”
or “Solvency” is used refers to a Person together with its Subsidiaries, Person as used above shall
be deemed to be a reference to such Person together with its Subsidiaries.




          “Specified Transaction” means, with respect to any Person (i) any prepaid forward sale
of energy, oil, gas or minerals by such Person that is intended primarily as a borrowing of




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funds, excluding volumetric production payments, and (ii) any interest rate, currency,
commodity or other swap, collar, cap, option or other derivative that is intended primarily as a
borrowing of funds, or any combination of any of the foregoing, with the amount of the obligations
of such Person thereunder being the net obligations of such Person thereunder.




          “Subsidiary” of a Person means a corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other governing body (other
than securities or interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise controlled, directly,
or indirectly through one or more intermediaries, or both, by such Person.




          “Synthetic Lease Obligation” means the monetary obligation of a Person under a
so-called synthetic, off-balance sheet or tax retention lease.




          “TDSP” means a transmission or distribution service provider.




          “Terminated Agreements” has the meaning ascribed thereto in Section 12.18(b).




          “Third A&R Date” means May 1, 2009.




          “Transaction Documents” means this Agreement and any other contract or agreement
(including ISDA Master Agreements, but excluding any Credit Support Agreements and any Terminated
Agreements) between any Merrill Party or its Affiliates, on one hand, and any Sleeve Obligor or its
Affiliates, on the other hand, relating to the transactions contemplated hereby.




          “Unaudited Financial Statements” means the unaudited consolidated balance sheet of NRG
and its consolidated Subsidiaries as at the end of the Fiscal Quarter ended June 30, 2009, and the
related unaudited consolidated statements of income or operations for such Fiscal Quarter and cash
flows for the Fiscal Quarter then ended, including normal year-end adjustments and without
comparisons to prior periods.




          “Unfunded Pension Liability” means the failure of a Pension Plan to satisfy the
minimum funding standard applicable to such Pension Plan for any plan year, as determined in
accordance with Section 412 of the Code.




          “Unrestricted Subsidiary” shall have the meaning set forth in the NRG Credit
Agreement.




          “Unwind Start Date” has the meaning ascribed thereto in the preamble to this
Agreement.




          “Valuation Date” means, (a) when used with respect to the determination of the Current
Adjustment Amount, each Business Day, and (b) when used with respect to the determination of the
Contingent Adjustment Amount, each Monthly Determination Date.




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          “Voting Stock” of any Person as of any date means the Capital Stock of such Person
that is at the time entitled to vote in the election of the board of directors of such Person.




          “Wholly Owned Subsidiary” of any specified Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which (other than directors’
qualifying shares) is owned by such Person or by one or more other Wholly Owned Subsidiaries of
such Person.




          “Working Capital Facility” means the Working Capital Facility dated as of September 1,
2006, as amended and restated as of the Third A&R Date, among Working Capital Facility Provider, as
Lender, REPS, as Borrower, and the Other Sleeve Obligors, as Guarantors.




          “Working Capital Facility Provider” means Merrill Lynch Capital Corporation, a
Delaware corporation.




          1.02. Terms Generally. The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”. Unless the context
requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, restated, supplemented or otherwise modified, renewed or replaced
(subject to any restrictions on such amendments, restatements, supplements or modifications,
renewals or replacements set forth therein or herein), (b) references to any law, constitution,
statute, treaty, regulation, rule or ordinance, including any section or other part thereof (each,
for purposes of this Section 1.02, a “law”) shall refer to that law as amended from
time to time and shall include any successor law, (c) any reference herein to any Person shall be
construed to include such Person’s successors and permitted assigns, (d) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof and (e) all references herein
to Sections, Exhibits and Schedules shall be construed to refer to Sections of, and Exhibits and
Schedules to, this Agreement.




          1.03. Accounting Terms and Determinations. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all financial statements and certificates and reports as to
financial matters required to be furnished to the Sleeve Provider hereunder shall be prepared in
accordance with GAAP, applied on a basis consistent with that used in the financial statements
referred to in Section 5.05.




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          Section 2. Credit Sleeve for Post-Unwind Start Date Obligations.




          2.01. Credit Sleeve.




          (a) From and after the Unwind Start Date, and otherwise subject to and in accordance with the
terms and conditions of this Agreement, the Merrill Parties shall:





     (i) until the earlier of the Credit Sleeve Termination Date and January 29, 2010, cause
the ML Guarantee Provider to perform under ML Guarantees in respect of REPS’ obligations
under the Post-Unwind Start Date Transactions, and prevent any events of default or
termination events relating solely to the ML Guarantee Provider as a credit support provider
under such Post-Unwind Start Date Transactions, including the related Credit Support
Agreements;




     (ii) until the earlier of the Credit Sleeve Termination Date and January 29, 2010,
cause the Sleeve Provider to perform under Credit Support Agreements providing credit
support for the obligations in respect of the Post-Unwind Start Date Transactions, and
prevent any events of default or termination events relating solely to the Sleeve Provider
as a credit support provider under the Credit Support Agreements related to the Post-Unwind
Start Date Transactions;




     (iii) until the earlier of the Credit Sleeve Termination Date and April 30, 2010, cause
the ML Guarantee Provider to perform under the C&I Guarantees; and




     (iv) execute and deliver such further certificates, documents and agreements, and take
such further actions, as NRG may reasonably request to fully implement the intent of the
foregoing;




provided, however, that from and after the Unwind Start Date, the foregoing obligations of
the Merrill Parties are subject to the following: (A) all obligations of the Merrill Parties
to perform in respect of any ML Guarantee or to post or provide any collateral or other
credit support under this Agreement shall be limited to the Post-Unwind Start Date
Obligations; (B) all commitments of the Merrill Parties with respect to entering into any
Mirror OTC Contract or Exchange Traded Contract shall be terminated; (C) all commitments of
the Merrill Parties with respect to providing ML Guarantees or the posting or provision of
collateral to Governmental Authorities that are not Governmental Customers shall be
terminated, including, without limitations, all obligations to post or provide collateral to
any TDSP or ERCOT; and (D) the Sleeve Obligors, in consultation with the Merrill Parties,
shall have the right to deliver to all applicable Persons notices that all such commitments
as provided in the foregoing clauses (A), (B) and (C) have terminated and the right to the
return of any collateral theretofore posted under such commitments.



          (b) From and after the Unwind Start Date, each of the Other Sleeve Obligors shall have the
right to conduct any power, gas and other commodity purchases or sales and hedging transactions;
provided that (i) such transactions do not impose setoff rights against any Post-Unwind Start Date
Obligations and (ii) the Other Sleeve Obligors may not enter into any




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transaction under any Power and Hedging Contract so long as any Post-Unwind Start Date
Transaction remains outstanding thereunder and so long as the Merrill Parties have not been fully
released and legally discharged from all obligations under such Power and Hedging Contract (other
than any indemnities and/or other contingent obligations not then due and payable, if any).




          2.02. Power and Hedging Contracts; Obligations of Compliance Parties.




          (a) Power and Hedging Contracts. In connection with the obligations of the Merrill
Parties under Section 2.01(a):





     (i) Modifications to any Power and Hedging Contract, Credit Support Agreement or ML
Guarantee, in each case, in respect of any Post-Unwind Start Date Obligation shall require
the consent of the Merrill Parties, not to be unreasonably withheld or delayed.




     (ii) Following receipt of notice from any Counterparty or Governmental Customer in
respect of which any Post-Unwind Start Date Obligation is outstanding, that REPS (or the
Sleeve Provider on its behalf) is required to post or return collateral in connection with
any collateral posting obligation that the Sleeve Provider has undertaken in accordance with
this Agreement, REPS shall promptly (and in no event later than, for collateral to be posted
on the same day, 11:00 a.m. CPT on such day of receipt, and for collateral to be posted on
the next day, 2:00 p.m. CPT on such day of receipt) provide such notice to the Sleeve
Provider. On each day in which REPS is permitted to value exposure or make any other
determination in respect of collateral to be posted by or to the Sleeve Provider in
connection with any posting obligation that the Sleeve Provider has agreed to undertake in
connection with this Agreement, REPS shall make such valuation or determination in good
faith and in a commercially reasonable manner. To the extent applicable, following any
valuation or determination made pursuant to the prior sentence, REPS shall make demand to
the applicable Person for the posting of collateral by or the return of collateral to the
Sleeve Provider and to the extent the Sleeve Provider receives such a demand from REPS, the
Sleeve Provider shall, subject to the terms and conditions of this Agreement, including,
without limitation, the provisions of Section 4, and the related Credit Support
Agreement, make such posting of collateral as demanded, whether or not the Sleeve Provider
disputes the valuation, determination or demand (but subject to the Sleeve Provider’s rights
to cause the adjustment thereof below). Each valuation, determination and demand of REPS
specified in this clause (ii) shall be made by REPS without consultation with the
Sleeve Provider unless such consultation is sought by REPS, except that:




     (1) if the Sleeve Provider disputes any such valuation, determination or
demand, prior to any action taken under paragraphs (2) or (3) below,
and prior to the commencement of any further remedial action, REPS shall negotiate
with the Sleeve Provider in good faith for one Business Day to resolve any such
dispute and upon resolution of such dispute, the applicable valuation, determination
or demand shall be adjusted accordingly, with corresponding adjustments to the
subsequent requests to the Persons to whom such valuations, determinations or
demands apply;




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     (2) if the Sleeve Provider disputes any such valuation based on Market
Information, prior to any action taken under paragraph (3) below, the Market
Information and resulting calculation shall be determined in accordance with
Section 12.13 and upon such determination, the applicable valuation shall be
adjusted accordingly, with corresponding adjustments to the subsequent requests to
the Persons to whom such valuations apply; provided that, until such determination
in accordance with Section 12.13, the valuation determined by REPS shall
apply;




     (3) to the extent applicable, if after the application of paragraphs
(1) and (2) above, the Sleeve Provider in its reasonable discretion
determines that (x) more than $15,000,000 in outstanding value of Merrill Collateral
remains at any time posted or is requested to be posted in excess of the amount that
is required to be posted as determined by REPS (determined, in each case, on
aggregate basis across all Persons to whom the Sleeve Provider has such excess
posted or has requested posting of Merrill Collateral in an outstanding value of
$2,000,000 or more in connection with this Agreement), or (y) more than $5,000,000
in outstanding value of Merrill Collateral remains at any time posted or is
requested to be posted to any single Person in excess of the amount that is required
to be posted as determined by REPS, then, in either case, if REPS disputes such
determination, such determination shall be referred by the parties to the
Calculation Agent within three Business Days for resolution, and upon resolution of
such dispute the applicable valuation shall apply and REPS shall use its reasonable
best efforts to negotiate with, and to the extent applicable, dispute valuations of,
or provide updated valuations to each such Person holding excess Merrill Collateral
that the Sleeve Provider may direct in accordance with the resolution; provided that
in lieu thereof REPS may instead authorize the Sleeve Provider to do so; and
provided further that, until resolution of this dispute by the Calculation Agent,
the valuation determined by REPS shall apply; and




     (4) to the extent applicable, if after application of paragraphs (1)
and (2) above the Sleeve Provider in its reasonable discretion determines
that the outstanding value of any single Counterparty’s cash collateral posted or
requested to be posted to any Sleeve Obligor as determined by REPS is more than
$5,000,000 in deficiency of the amount that is required to be posted as determined
by Sleeve Provider, then, if REPS disputes such determination, such determination
shall be referred by the parties to the Calculation Agent for within three Business
Days, and upon resolution of such dispute the applicable valuation shall apply and
REPS shall use its reasonable best efforts to negotiate with, and to the extent
applicable, dispute valuations of, or provide updated valuations to each such
Counterparty that the Sleeve Provider may direct in accordance with the resolution;
provided that in lieu thereof REPS may instead authorize the Sleeve Provider to do
so; and provided further that, until resolution of this dispute by the Calculation
Agent, the valuation determined by REPS shall apply .



          (b) Compliance Requirements. Each Compliance Party shall be subject to the Compliance
Requirements.




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          Section 3. Payments, Fees and Records.




          3.01. Notice of Payment on ML Guarantee or Collateral Foreclosure. The Sleeve Provider
shall notify NRG, promptly upon receipt from any beneficiary or recipient of an ML Guarantee or any
secured party to which the Sleeve Provider has provided collateral pursuant to Section 2
(whether an ML Guarantee, posted cash collateral, surety bond, letter of credit or other collateral
or credit support, “Merrill Collateral” or “ML Collateral”) of any demand for
payment under such ML Collateral or any Collateral Foreclosure thereon or of any notice of default.
The Sleeve Provider shall notify NRG of the Dollar amount paid by the Merrill Parties as a result
of such demand or the Dollar amount of Merrill Collateral relating to such Collateral Foreclosure,
as applicable, and the date on which payment was made by a Merrill Party in respect of such demand
or the date on which such Collateral Foreclosure occurred, as applicable (any such date, a
“Capital Outlay Date”).




          3.02. Repayment of Draw Reimbursement Obligations. NRG hereby unconditionally and
irrevocably promises to pay to the Sleeve Provider, on behalf of the applicable Merrill Party, the
entire outstanding Dollar amount of each payment on behalf of the Sleeve Obligors by the ML
Guarantee Provider or the Sleeve Provider arising from each demand for payment under Merrill
Collateral or payment on behalf of the Sleeve Obligors by the Sleeve Provider arising from each
Collateral Foreclosure of ML Collateral and the entire outstanding Dollar amount of any ML
Collateral that is not returned by any person to the Merrill Parties for any reason (including, any
bankruptcy or insolvency of the applicable counterparty) within one Business Day of the time
required by the terms of the applicable Counterparty Document or other applicable arrangement
pursuant to which such Merrill Collateral was posted to such person (each, a “Draw
Reimbursement Obligation”), notwithstanding the identity of the beneficiary or recipient of any
Merrill Collateral, and without presentment, demand, protest or other formalities of any kind.
Each such Draw Reimbursement Obligation shall mature on the Business Day following the date the
Sleeve Provider delivers notice to NRG of the related Capital Outlay Date as provided in
Section 3.01 (the “Notice Date”); provided that, in the event that, on or prior to
the Business Day following the Notice Date, NRG delivers to the Sleeve Provider in good faith a
written notice referred to in Section 8.02(b) or (c) predicated upon (i) failure to pay
under any ML Guarantee after demand by the beneficiary complying with the terms and conditions of
the ML Guarantee or (ii) the breach of a Merrill Party of its obligations under Section
2.01 or any Credit Support Agreement, such Draw Reimbursement Obligation shall mature and be
payable on the earliest of (A) the date that the notice to the Sleeve Provider is withdrawn, (B)
the date the underlying failure related to the Draw Reimbursement Obligation is cured, (C) the date
that the remedies under Section 9.02 with respect to such failure have been resolved,
mutually concluded, or finally determined by a court of competent jurisdiction, or (D) January 29,
2010 (any Reimbursement Obligation subject to the foregoing proviso, a “Deferred Draw
Reimbursement Obligation”).




          Notwithstanding any payment of a Draw Reimbursement Obligation NRG makes as required in this
Section 3.02, NRG does not by making such payment waive any rights under Sections
8.02 and 9.02 against a Merrill Party related to the applicable Draw Reimbursement
Obligation, subject to the limitations in Section 9.04.




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          3.03. Interest.




          (a) (i) NRG hereby unconditionally promises to pay to the Sleeve Provider, when due and
payable in accordance with Section 3.03(d):





     (A) interest accruing at a rate per annum equal to the Base Rate (as in effect from
time to time) plus 5.875% on the unreimbursed Dollar amount of each Current Draw
Reimbursement Obligation for the period from and including the Business Day following the
related Notice Date to but excluding the date the Dollar amount of such Current Draw
Reimbursement Obligation shall be paid in full; and




     (B) interest accruing at a rate per annum equal to the LIBO Rate (as defined in the
Working Capital Facility and incorporated by reference in accordance with Section
3.03(a)(ii)) plus 5.875% on the unpaid Dollar amount of each Deferred Reimbursement
Obligation for the period from and including the Business Day following the related Notice
Date to but excluding the date the Dollar amount of such Deferred Reimbursement Obligation
shall be paid in full.




     (ii) NRG agrees, for the benefit of the Sleeve Provider, to perform, comply with and
be bound by each of its covenants, agreements and obligations contained in Sections 2.10,
2.13, and 2.14 of the Working Capital Facility with respect to Deferred Reimbursement
Obligations, as modified and supplemented and in effect from time to time, or as last in
effect in the event the Working Capital Facility shall be terminated.


Without limiting the generality of the foregoing, the above-mentioned provisions of the Working
Capital Facility, together with related definitions (including the definition of “LIBO Rate” and
“Interest Payment Date”) and ancillary provisions, are hereby incorporated herein by reference, as
if set forth herein in full, mutatis mutandis, notwithstanding that the Working Capital Facility is
being terminated concurrently with the Unwind Start Date.




          (b) Notwithstanding Section 3.03(a), NRG hereby unconditionally promises to pay to the
Sleeve Provider, when due and payable in accordance with Section 3.03(d), interest accruing
at a rate per annum equal to the Post-Default Rate (as in effect from time to time) on (i) the
Dollar amount of each Reimbursement Obligation that is not paid in full within one Business Day
after becoming due and (ii) any other overdue amount payable by NRG or any Other Sleeve Obligor
under any Transaction Documents with any Merrill Party, in each case for the period from and
including the due date thereof to but excluding the date the same is paid in full.




          (c) Interest on any amount, including interest on Reimbursement Obligations, shall be computed
on the basis of actual days elapsed (including the first day but excluding the last day) occurring
during the period such interest accrues and a year of 365 or 366 days, as applicable (if computed
by reference to the Prime Rate) or 360 days (if computed by reference to the Federal Funds Rate or
the LIBO Rate).




          (d) (i) Subject to clause (iii) below, accrued interest on each Current Draw
Reimbursement Obligation shall be payable monthly on the last Business Day of each month and




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on the date that such Current Draw Reimbursement Obligation shall be paid in full; (ii)
subject to clause (iii) below, accrued interest on each Deferred Reimbursement Obligation
shall be payable on each Interest Payment Date (as defined in the Working Capital Facility and
incorporated by reference in accordance with Section 3.03(a)(ii)) for such Deferred
Reimbursement Obligation and on the date that such Deferred Reimbursement Obligation shall be paid
in full; and (iii) accrued interest on any amount (including Current Draw Reimbursement Obligations
and Deferred Reimbursement Obligations) payable in accordance with Section 3.03(b) shall be
payable on demand from time to time, on the last Business Day of each month and on the date that
such amount is paid in full.




          3.04. Monthly Sleeve Fee. NRG hereby unconditionally promises to pay to the Sleeve
Provider, with respect to each month, the Monthly Sleeve Fee for such month, payable in advance on
the Monthly Payment Date for such month. The Monthly Sleeve Fee or any portion thereof shall not
be refundable under any circumstances. In addition, NRG hereby unconditionally promises to pay to
the Sleeve Provider from time to time on demand interest accruing at a rate per annum equal to the
Post-Default Rate (as in effect from time to time) on the aggregate amount of any Monthly Sleeve
Fee and on any other amount payable hereunder that is not paid in full when due.




          3.05. Make-Whole Payment. In lieu of any amounts that would otherwise become due and
payable under the Exclusivity and Fee Letter, NRG shall pay to the Sleeve Provider on the Unwind
Start Date a make-whole payment in an amount equal to $5,000,000, and on January 4, 2010 a further
make-whole payment in an amount equal to $5,000,000 (collectively, the “Make-whole
Payment”). The Make-whole Payment shall discharge the obligations of the Sleeve Obligors under
Section 3(iii) of the Exclusivity and Fee Letter. The Make-whole Payment or any portion thereof
shall not be refundable under any circumstances.




          3.06. Payments Generally.




          (a) Payments by Sleeve Obligors. Except to the extent otherwise provided herein, all
payments in respect of Reimbursement Obligations, interest, Monthly Sleeve Fees, the Make-whole
Payment and other amounts to be made by the Sleeve Obligors under this Agreement, and, except to
the extent otherwise provided therein, all payments to be made by the Sleeve Obligors under any
other Transaction Document, shall be made in Dollars, in immediately available funds, without
deduction, set-off or counterclaim to the Sleeve Provider at the account designated on Schedule
3.06(a) or any other account designated in writing by the Sleeve Provider to NRG not less than
five Business Days before any payment is made, not later than 3:00 p.m., New York City time, on the
date on which such payment shall become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding Business Day).




          (b) Extensions to Next Business Day. If the due date of any payment under this
Agreement would otherwise fall on a day that is not a Business Day, such date shall be extended to
the immediately succeeding Business Day and interest shall be payable for any amount so extended
for the period of such extension (except in the case of the Monthly Sleeve Fee).




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          3.07. Records; Prima Facie Evidence.




          (a) Maintenance of Records by the Sleeve Provider. The Sleeve Provider shall maintain
records in which it shall record (i) each ML Guarantee issued hereunder or other Merrill Collateral
provided hereunder, (ii) the amount of each Reimbursement Obligation, (iii) interest due and
payable or to become due and payable from NRG to the Sleeve Provider hereunder and (iv) the amount
of any sum received by the Sleeve Provider hereunder.




          (b) Effect of Entries. The entries made in the records maintained pursuant to
paragraph (a) above shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of the Sleeve Provider to
maintain such records or any error therein shall not in any manner affect the obligation of NRG to
repay the Reimbursement Obligations in accordance with the terms of this Agreement.




          Section 4. Conditions.




     The obligation of the Merrill Parties to post or provide any Merrill Collateral, including to
post or provide any additional cash collateral or to otherwise make any payment or perform under
any ML Guarantee, in respect of any Post-Unwind Start Date Obligation is subject to the following
conditions precedent that, both immediately prior to and after giving effect thereto and to the
intended use thereof:




     (a) (i) Each of the representations and warranties of the Sleeve Obligors made in
Section 5 and in the other Transaction Documents, if any, which is qualified by
materiality shall be true and correct and (ii) each of the other representations and
warranties of the Sleeve Obligors made in Section 5 and in the other Transaction
Documents shall be true and correct in all material respects, in each case of clause (i) and
(ii) on and as of the date of request provision of such Merrill Collateral, with the same
force and effect as if made on and as of such date (or, if any such representation or
warranty is expressly stated to have been made as of a specific date, as of such specific
date);




     (b) The Sleeve Obligors shall be in compliance with all obligations to post Current
Collateral and Contingent Collateral in accordance with Section 10; and




     (c) no Reliant Default or Reliant Event of Default shall have occurred and be
continuing.


Each request by NRG or any Other Sleeve Obligor for provision of Merrill Collateral shall
constitute a certification to the effect that the above conditions have been satisfied.




          Section 5. Representations and Warranties. NRG and each of the Other Sleeve Obligors hereby
represents and warrants as follows:



          5.01. Existence, Qualification and Power; Compliance with Laws. Such Person (a) is duly
organized or formed, validly existing and in good standing under the Laws of the jurisdiction of
its incorporation or organization, (b) has all requisite power and authority and




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all requisite governmental licenses, authorizations, consents and approvals to (i) own its assets
and carry on its business and (ii) execute, deliver and perform its obligations under the
Transaction Documents to which it is a party, (c) is duly qualified and is licensed and in good
standing under the Laws of each jurisdiction where its ownership, lease or operation of properties
or the conduct of its business requires such qualification or license, and (d) is in compliance
with all Laws; except in each case referred to in clause (b)(i), (c) or
(d), to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.




          5.02. Authorization; No Contravention. The execution, delivery and performance by such
Person of each Transaction Document to which such Person is party, have been duly authorized by all
necessary corporate or other organizational action, and do not and will not (a) contravene the
terms of any of such Person’s organizational documents; (b) conflict with or result in any breach
or contravention of, or require any payment to be made under (i) any Contractual Obligation to
which such Person is a party or affecting such Person or the properties of such Person or any of
its Subsidiaries, except in each case as could not reasonably be expected to have a Material
Adverse Effect, or (ii) any order, injunction, writ or decree of any Governmental Authority or any
arbitral award to which such Person or its property is subject that could reasonably be expected to
have a Material Adverse Effect; or (c) violate any Law that could reasonably be expected to have a
Material Adverse Effect. The Sleeve Obligors are in compliance with all Contractual Obligations
referred to in clause (b)(i), except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect.




          5.03. Governmental Authorization; Other Consents. Except as to (i) those which have been
duly obtained, taken, given or made and are in full force and effect and (ii) those third party
(including Governmental Customers) consents and agreements necessary to obtain the release and
discharge of any Merrill Collateral, no approval, consent, exemption, authorization, or other
action by, or notice to, or filing with, any Governmental Authority or any other Person is
necessary or required in connection with the execution, delivery or performance by any Sleeve
Obligors of this Agreement or any other Transaction Document; provided that any failure of the
Sleeve Obligors to obtain any consents and agreements described in clause (ii) shall not
relieve the Sleeve Obligors of their obligation to cause the Partial Credit Sleeve Termination Date
and Credit Sleeve Termination Date each to occur as provided herein.




          5.04. Binding Effect. This Agreement has been, and each other Transaction Document, when
executed and delivered hereunder, will have been, duly executed and delivered by each Sleeve
Obligor that is party thereto. This Agreement constitutes, and each other Transaction Document
when so executed and delivered will constitute, a legal, valid and binding obligation of each
Sleeve Obligor, enforceable against each Sleeve Obligor that is party thereto in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally and by general principles of
equity, whether such enforceability is considered in a proceeding at law or in equity.




          5.05. Financial Statements; No Material Adverse Effect.




          (a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly




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noted therein and (ii) fairly present in all material respects the consolidated financial
condition of NRG and its consolidated Subsidiaries as of the date thereof and their results of
operations and cash flows for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly noted therein.




          (b) The Unaudited Financial Statements (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly noted therein and (ii)
fairly present in all material respects the consolidated financial condition of NRG and its
consolidated Subsidiaries as of the date thereof and their results of operations and cash flows for
the period covered thereby in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein, subject, in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments.




          (c) From the date of the Audited Financial Statements through the Unwind Start Date, except as
disclosed in public filings or in writing to the Sleeve Provider on or before five Business Days
before the Unwind Start Date, there has been no event or circumstance, either individually or in
the aggregate that has had or could reasonably be expected to have a Material Adverse Effect.




          5.06. Litigation. There are no actions, suits, proceedings, claims or disputes pending or,
to the knowledge of each Sleeve Obligor, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, by or against the Sleeve Obligors or against any
of their properties or revenues that (a) purport to affect or pertain to this Agreement or any
other Transaction Document, or any of the transactions contemplated hereby or (b) except as
disclosed to the Sleeve Provider on Schedule 5.06 or as disclosed in public filings, exist
on or prior to the Unwind Start Date and either individually or in the aggregate, if determined
adversely, could reasonably be expected to have a Material Adverse Effect.




          5.07. No Default. Immediately prior to the Unwind Start Date, and before giving effect to
the amendment and restatement of this Agreement described in Section 12.17, no Reliant
Default had occurred and was continuing. On the Unwind Start Date, and after giving effect to the
amendment and restatement of this Agreement described in Section 12.17, no Reliant Default
has occurred and is continuing or would result from the consummation of the amendment and
restatement described in Section 12.17 or the resulting transactions contemplated by this
Agreement or any other Transaction Document.




          5.08. [Intentionally Deleted].




          5.09. [Intentionally Deleted].




          5.10. [Intentionally Deleted].




          5.11. ERISA Compliance.




          (a) Except as could not reasonably be expected to result in a Material Adverse Effect, (i)
each Plan has been established, operated and administered in compliance in all




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material respects with its terms and the applicable provisions of ERISA, the Code and other
Federal or state Laws, (ii) each Plan that is intended to qualify under Section 401(a) of the Code
has received a favorable determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best knowledge of the Sleeve
Obligors, nothing has occurred which would prevent, or cause the loss of, such qualification, and
(iii) NRG and each ERISA Affiliate have made all required contributions (both quarterly and
annually) to each Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.




          (b) There are no pending or, to the best knowledge of the Sleeve Obligors, threatened claims,
actions or lawsuits or investigations, or action by any Governmental Authority, with respect to any
Plan that could reasonably be expected to have a Material Adverse Effect. There has been no
prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan
that has resulted or could reasonably be expected to result in a Material Adverse Effect.




          (c) (i) No ERISA Event has occurred or is reasonably expected to occur that could reasonably
be expected to have a Material Adverse Effect; (ii) no Pension Plan has any Unfunded Pension
Liability, whether or not waived, that could reasonably be expected to have a Material Adverse
Effect, and no application for a waiver of the minimum funding standard has been filed or is
expected to be filed with respect to any Pension Plan; (iii) none of the Sleeve Obligors and any of
their ERISA Affiliates has incurred, or reasonably expects to incur, any liability (and no event
has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan that could
reasonably be expected to have a Material Adverse Effect; and (iv) none of the Sleeve Obligors and
any of their ERISA Affiliates has engaged in a transaction that could be subject to Sections 4069
or 4212(c) of ERISA.




          5.12. [Intentionally Deleted].




          5.13. Margin Regulations; Investment Company Act; Public Utility Holding Company Act.




          (a) None of the Sleeve Obligors is engaged principally or as one of its material activities,
in the business of extending credit for the purpose of buying or carrying Margin Stock.




          (b) None of the Sleeve Obligors or any Person Controlling the Sleeve Obligors (i) is in
violation of any regulation under the Public Utility Holding Company Act of 2005, the Federal Power
Act or any foreign, federal or local statute or any other Law of the United States of America or
any other jurisdiction, except in each case as could not reasonably be expected to have a Material
Adverse Effect, or (ii) is or is required to be registered as an “investment company” under the
Investment Company Act of 1940.




          5.14. Disclosure. The Sleeve Obligors have disclosed to the Sleeve Provider all
agreements, instruments and corporate or other restrictions to which the Sleeve




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Obligors are subject, and all other matters known to it (other than general industry, political,
and economic conditions or matters disclosed in public filings), that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect. No report,
financial statement, certificate or other information furnished (whether in writing or orally) by
or on behalf of any Sleeve Obligor to the Sleeve Provider in connection with the transactions
contemplated or delivered to the Sleeve Provider hereunder or under any other Transaction Document
(in each case, as modified or supplemented by other information so furnished), at the time
furnished or delivered, contains any material misstatement of fact or omits to state any material
fact necessary to make the statements therein, taken as a whole, in the light of the circumstances
under which they were made, not misleading; provided that with respect to projected financial
information, the Sleeve Obligors represent only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time made; it being understood that
estimates are by their nature inherently uncertain and no assurances are being given that such
results will be achieved; and provided further, that the Sleeve Obligors make no representation or
warranty, express or implied, with respect to the Compliance Information delivered to Sleeve
Provider in accordance with Section 2.02(b).




          5.15. Compliance with Laws. Except as set forth on Schedule 5.15 or as disclosed
in public filings, each of the Sleeve Obligors is in compliance in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings diligently
conducted or (b) the failure to comply therewith, either individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.




          5.16. Security Interest in Posted Collateral. Section 10 creates for the benefit
of the Merrill Parties, a valid, first priority perfected security interest in the Posted
Collateral, subject to no other Lien other than inchoate Liens on account of taxes, assessments or
governmental charges not yet delinquent or that are being contested in good faith by appropriate
proceedings.




          5.17. Solvency. NRG and the Other Sleeve Obligors are, on a consolidated basis, Solvent.




          Section 6. Affirmative Covenants. From the Unwind Start Date until the Credit Sleeve Termination
Date, NRG shall, and shall cause each of the Other Sleeve Obligors, to:




          6.01. Financial Statements. Deliver to the Sleeve Provider, in form and detail reasonably
satisfactory to the Sleeve Provider:




          (a) as soon as available, but in any event within 90 days after the end of each Fiscal Year of
NRG ending after the Unwind Start Date, an audited consolidated balance sheet of NRG and its
consolidated Subsidiaries as at the end of such Fiscal Year, and the related consolidated
statements of income or operations, stockholders’ equity, comprehensive income (loss) and cash
flows for such Fiscal Year, setting forth in each case, the figures as of the end of,




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and for, the
previous Fiscal Year, all in reasonable detail and prepared in accordance with
GAAP, such consolidated statements to be audited and accompanied by a report and opinion of an
independent registered public accounting firm of nationally recognized standing, which report and
opinion shall be prepared in accordance with the standards of the Public Company Accounting
Oversight Board or its successor and shall not be subject to any “going concern” or like
qualification or exception; and




          (b) as soon as available, but in any event within 50 days after the end of each of the first
three Fiscal Quarters of each Fiscal Year of NRG ending after the Unwind Start Date, an unaudited
consolidated balance sheet of NRG and its consolidated Subsidiaries as at the end of such Fiscal
Quarter, and the related unaudited consolidated statements of income or operations for such Fiscal
Quarter and for the portion of NRG’s Fiscal Year to date then ended and cash flows for the portion
of NRG’s Fiscal Year to date then ended, setting forth in each case (beginning with Fiscal Quarter
ending September 2009) in comparative form the figures for the corresponding Fiscal Quarter of the
previous Fiscal Year and the corresponding portion of the previous Fiscal Year, all in reasonable
detail, certified by a Responsible Officer of NRG as fairly presenting in all material respects the
financial condition, results of operations and cash flows of NRG and its consolidated Subsidiaries
in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes.




          6.02. Certificates; Other Information. Deliver to the Sleeve Provider, in form and detail
reasonably satisfactory to the Sleeve Provider:




          (a) promptly after any request by the Sleeve Provider, copies of any detailed audit reports,
management letters or written recommendations submitted to the board of directors (or the audit
committee of the board of directors) of NRG by independent accountants in connection with the
accounts or books of NRG or any of the Other Sleeve Obligors or any audit of any of them;




          (b) promptly after the furnishing or receiving thereof, copies of any written notice of
default furnished to, or received from, any holder of debt securities of NRG or any of the Other
Sleeve Obligors pursuant to the terms of any indenture, guarantee or credit or similar agreement
reflecting material indebtedness for borrowed money and not otherwise required to be furnished to
the Sleeve Provider pursuant to Section 6.01 or any other clause of this Section;




          (c) at the applicable times required by Schedule 1.01(c), the data, reports and other
information set forth therein; and




          (d) promptly, such additional information regarding the business, financial or corporate
affairs of NRG or any of the Other Sleeve Obligors, or compliance with the terms of the Transaction
Documents, as the Sleeve Provider may from time to time reasonably request.




          Documents required to be delivered pursuant to Section 6.01(a) or (b) (to the
extent any such documents are included in materials otherwise filed with the SEC) shall be
delivered electronically and when so delivered, shall be deemed to have been delivered on the date
on which NRG provides such documents electronically, including by email or electronic posting;
provided that: (i) NRG shall at the request of the Sleeve Provider deliver paper copies of




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such
documents to the Sleeve Provider and (ii) if documents are electronically posted, NRG shall
notify the Sleeve Provider (by telecopier or electronic mail) of the posting. The Sleeve
Provider shall have no obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor compliance by NRG with
any such request for delivery.




          6.03. Notices. Promptly notify the Sleeve Provider:





     (a) after any Responsible Officer’s obtaining knowledge of the occurrence of any
Default with respect to a Reliant Event of Default and the intended actions of the Sleeve
Obligors with respect thereto;




     (b)   of any matter that has resulted or could reasonably be expected to result in a
Material Adverse Effect; and




     (c)   after any Responsible Officer’s obtaining knowledge of the occurrence of any
ERISA Event or of any actual or reasonably likely contribution failure under Code Section
412, or ERISA Section 302 with respect to any Pension Plan or the filing of an application
seeking waiver of any potential contribution failure that either individually or in the
aggregate could reasonably be expected to result in a Material Adverse Effect.


Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer
of the applicable Sleeve Obligor setting forth details of the occurrence referred to therein and
stating what action the applicable Sleeve Obligor has taken and proposes to take with respect
thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and
all provisions of this Agreement and any other Transaction Document that have been breached.




          6.04. Payment of Obligations. Pay and discharge as the same shall become due and payable
(a) all material tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by appropriate proceedings
diligently conducted and adequate reserves in accordance with GAAP are being maintained by each
Sleeve Obligor; and (b) all lawful claims which, if unpaid, could reasonably be expected to result
in a Material Adverse Effect.




          6.05. Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and
effect its legal existence and good standing under the Laws of the jurisdiction of its organization
except in a transaction permitted by Section 7.01; and (b) take all reasonable action to
maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.




          6.06. [Intentionally Deleted].




          6.07. [Intentionally Deleted].




          6.08. Compliance with Laws. Comply in all material respects with the requirements of all
Laws and all orders, writs, injunctions and decrees applicable to it or to its




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business or
property, except in such instances in which (a) such requirement of Law or order,
writ, injunction or decree is being contested in good faith by appropriate proceedings diligently
conducted or (b) the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.




          6.09. Books and Records. (a) Maintain proper books of record and account, in which entries
in conformity with GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Sleeve Obligors and (b) maintain such books of
record and account in material conformity with all applicable requirements of any Governmental
Authority having regulatory jurisdiction over the Sleeve Obligors.




          6.10. Inspection Rights.  Permit representatives and independent contractors of the Sleeve
Provider to visit and inspect any of its properties, to examine its corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its officers, and independent public accountants at such reasonable
times during normal business hours and as often as may be reasonably desired, upon reasonable
advance notice to NRG, all at the expense of the Sleeve Obligors, and the Sleeve Obligors will pay
up to $50,000 during any contract year to the extent of the third party expenses of the Sleeve
Provider incurred in connection therewith (but the Sleeve Obligors shall pay no further expenses in
connection therewith); provided that when a Reliant Event of Default exists the Sleeve Provider (or
any of their respective representatives or independent contractors) may do any of the foregoing at
the expense of the Sleeve Obligors, to the extent reasonable under the circumstances, without being
subject to the expense limit described above, and at any time during normal business hours and
without advance notice.




          6.11. Further Assurances. Promptly upon request by the Sleeve Provider, (a) correct any
material defect or error that may be discovered in any Transaction Document or in the execution,
acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such further acts, deeds,
certificates, assurances and other instruments as the Sleeve Provider may reasonably require from
time to time in order to (i) carry out more effectively the purposes of the Transaction Documents,
(ii) perfect and maintain the validity and effectiveness of any of the Transaction Documents and
(iii) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto
the Merrill Parties the rights granted or now or hereafter intended to be granted to the Merrill
Parties under any Transaction Document or under any other instrument executed in connection with
any Transaction Document to which NRG or any of its Subsidiaries is or is to be a party.




          6.12. Obligation to Post Collateral. At the times required by Section 10, NRG
shall post and maintain such cash or Acceptable Letters of Credit, as applicable, as provided in
such Section to the Merrill Parties.




          6.13. Obligation to Cause Partial Credit Sleeve Termination Date and Credit Sleeve Termination
Date. NRG and the Other Sleeve Obligors shall cause the Partial Credit Sleeve Termination Date
to occur on or prior to January 29, 2010, and shall cause the




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Credit Sleeve Termination Date to
occur on or prior to April 30, 2010. Notwithstanding
anything herein to the contrary, the “Credit Sleeve Termination Date” shall not occur until the
date on which all Merrill Collateral, including all C&I Guarantees, posted by the Merrill Parties
have been returned to the Merrill Parties and the Merrill Parties have been legally discharged from
all obligations in respect of the transactions contemplated hereby and all ML Guarantees have been
terminated, and on which all other obligations owed to the Merrill Parties hereunder and under the
other Transaction Documents have been paid and satisfied in full (other than indemnities and any
similar obligations of the Sleeve Obligors not then due and payable and that expressly survive
termination of this Agreement and the other Transaction Documents).




          6.14. Return of TDSP Postings. The Sleeve Obligors agree to use all commercially
reasonable efforts to effect the release and discharge of all ML Collateral held by any TDSP as
soon as practicable following the Unwind Start Date; provided that nothing herein shall limit the
Sleeve Obligors’ obligations to cause the Partial Credit Sleeve Termination Date and Credit Sleeve
Termination Date each to occur in accordance with Section 6.13.




          Section 7. Negative Covenants. From the Unwind Start Date until the Credit Sleeve Termination
Date, NRG shall not, and shall cause its Restricted Subsidiaries not to:




          7.01. Fundamental Changes. (a) Merge into or consolidate with any other Person, or permit
any other Person to merge into or consolidate with it, or liquidate or dissolve; provided that, if
at the time thereof and immediately after giving effect thereto no Reliant Default or Reliant Event
of Default shall have occurred and be continuing, (i) any Person may merge into NRG in a
transaction in which NRG is the surviving corporation, (ii) any Person may merge into any
Restricted Subsidiary in a transaction in which the surviving entity is a Restricted Subsidiary,
(iii) any Restricted Subsidiary (other than REPS) may liquidate or dissolve if NRG determines in
good faith that such liquidation or dissolution is in the best interests of NRG and is not
materially disadvantageous to the Merrill Parties, and (iv) any merger, consolidation, liquidation
or dissolution otherwise prohibited by this Section 7.01(a) may be consummated in reliance
of the General Disposition Basket (as defined below), or (b) consummate any Asset Sale (except to
the extent any transaction permitted by Section 7.01(a) constitutes an Asset Sale, which
transaction shall be permitted pursuant to the terms of Section 7.01(a)); provided that, (i) NRG
and/or any Restricted Subsidiary may sell, transfer, lease or otherwise dispose of its assets to
NRG or to Restricted Subsidiary (as applicable), and (ii) if at the time thereof and immediately
after giving effect thereto no Reliant Default or Reliant Event of Default shall have occurred and
be continuing, NRG or any Subsidiary may sell, transfer, lease or otherwise dispose of (A) any of
its assets (or otherwise undertake any transaction otherwise prohibited by Section 7.01(a))
provided that the aggregate fair market value (as determined by NRG in good faith) of all property
disposed of in reliance on this clause 7.01(b)(ii)(A) (sub-clauses (A) and (B), the
“General Disposition Basket”) from and after the date hereof shall not exceed $750,000,000,
and (B) any of the assets or capital stock of Nuclear Innovation North America LLC, NRG Texas Power
LLC, Elbow Creek Wind Project LLC and West Coast Power LLC and Subsidiaries of each of the
foregoing.




          7.02. Other Covenants. The provisions of Sections 6.01, 6.02 and Sections 6.05 through
6.15 of the NRG Credit Agreement, together with all underlying




-37-









 




definitions (the “Specified
Covenants”), all as in effect from time to time, are hereby
incorporated herein by reference mutatis mutandis and shall be deemed to continue in effect (with
any amendments, modifications or waivers thereof (whether or not effected in connection with a
replacement, refinancing or restatement of the NRG Credit Agreement)) for the benefit of MLCI;
provided that if the NRG Credit Agreement is no longer in effect or at any time the aggregate
outstanding principal amount of Indebtedness outstanding and/or available to be drawn thereunder is
less than $100 million then the foregoing clause shall be deemed to apply to such Specified
Covenants as the same were in effect immediately before the NRG Credit Agreement ceased to be in
effect or immediately before the aggregate outstanding principal amount and/or amount available to
be drawn thereunder was reduced to less than $100 million, as the case may be, and without giving
effect to any amendments or waivers entered into immediately prior to or otherwise in connection
with the termination of such agreement or such reduction in principal amount; provided further,
that so long as the NRG Credit Agreement has not been terminated and the aggregate outstanding
principal amount of Indebtedness outstanding and/or available to be drawn thereunder is at least
$100 million, the Sleeve Obligors shall not be required to provide to the Merrill Parties hereunder
copies of any notices required to be given to the lenders under the terms of the Specified
Covenants.




          Notwithstanding anything to the contrary in this Agreement, (x) NRG shall have at all times
the right (and the Merrill Parties shall have no right or claim in respect of any such action) to
amend, restate, supplement, replace, refinance, obtain waivers or consents, or otherwise modify any
and all terms and conditions of the NRG Credit Agreement (including the Specified Covenants) in
accordance with the terms thereof (provided that after the date when the aggregate outstanding
principal amount of Indebtedness outstanding and/or available to be drawn thereunder was reduced to
less than $100 million, no such amendment, restatement, supplement, replacement, waiver or
modification shall affect the Specified Covenants hereunder), and (y) (except following the date
when the aggregate outstanding principal amount of Indebtedness outstanding and/or available to be
drawn under the NRG Credit Agreement was reduced to less than $100 million) a waiver of any breach
of, or consent obtained under, any term or condition of the NRG Credit Agreement (including with
respect to the Specified Covenants) obtained in accordance with the terms and conditions thereof
shall operate, automatically and without further action, as a waiver or consent in respect of the
same terms and conditions under this Agreement and any other Transaction Document as relevant to
the Specified Covenants.




          Section 8. Events of Default.




          8.01. Reliant Events of Default. Each of the following shall constitute a “Reliant
Event of Default”:





     (a) Non-Payment. Any Sleeve Obligor fails to pay within three Business Days
after the same becomes due, any amount payable to any Merrill Party hereunder or under any
other Transaction Document; or




     (b) Specific Covenants. Any Sleeve Obligor fails to perform or observe any
term, covenant or agreement contained in Section 10; or



-38-









 






     (c) Other Defaults. Any Sleeve Obligor fails to perform or observe any other
material covenant or agreement (not specified in clause (a) or (b) above or
not addressed
by clause (j) below) contained in any Transaction Document on its part to be
performed or observed and such failure continues for 30 days after the earlier to occur of
(i) such Sleeve Obligor’s receiving notice thereof from Sleeve Provider, or (ii) a
Responsible Officer or other executive officer of such Sleeve Obligor obtains knowledge of
such occurrence; or




     (d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of any Sleeve Obligor herein, in
any other Transaction Document, or in any document delivered in connection herewith or
therewith shall be incorrect or misleading in any material respect when made or deemed made;
or




     (e) Insolvency Proceedings, Etc. Any Sleeve Obligor institutes or consents to
the institution of any proceeding under any insolvency, bankruptcy, reorganization,
receivership or other debtor relief law, or makes an assignment for the benefit of
creditors; or applies for or consents to the appointment of any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of their respective property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged or unstayed
for 60 calendar days; or any proceeding under any insolvency, bankruptcy, reorganization,
receivership or other debtor relief law relating to any such Person or to all or any
material part of their respective property is instituted without the consent of such Person
and continues undismissed or unstayed for 60 calendar days, or an order for relief is
entered in any such proceeding; or




     (f) Inability to Pay Debts; Attachment. Any Sleeve Obligor becomes unable or
admits in writing its inability or fails generally to pay its debts as they become due; or




     (g) Invalidity of Documents or Security Interest in Posted Collateral. (i)
This Agreement shall for any reason (other than pursuant to the terms hereof) cease to
create a valid and perfected first priority Lien on and security interest in the Posted
Collateral purported to be covered by Section 10 hereof; or (ii) any Sleeve Obligor
shall so assert such invalidity or lack of perfection or priority; or (iii) at any time
after its execution and delivery and for any reason other than as expressly permitted
hereunder or thereunder or satisfaction in full of all the Credit Sleeve Obligations, this
Agreement ceases to be in full force and effect; or (iv) any Sleeve Obligor or any other
Person contests in any manner the validity or enforceability of any provision of this
Agreement; or (v) any Sleeve Obligor denies that it has any further liability or obligation
under any Transaction Document (other than pursuant to the terms hereof or thereof), or
purports to revoke, terminate or rescind any provision of any Transaction Document; or




     (h) Cross-Default. NRG or any of its Significant Subsidiaries or any group of
Significant Subsidiaries (other than, in each case, the Exempt Subsidiaries, Excluded
Subsidiaries and Unrestricted Subsidiaries, in all cases, other than any Other Sleeve



-39-









 







Obligor) (i) fails to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness
(or Guarantee) or under any Specified Transaction (in each case, except with respect to
payments described in paragraph (a) above) having an aggregate amount (including
amounts owing to all creditors under any combined or syndicated credit arrangement) of more
than $75,000,000 or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or other event is
to permit such Indebtedness or amounts owing under such Specified Transaction to be demanded
as a result of such failure or to become due or to be repurchased, prepaid, defeased or
redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem
such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become
payable or cash collateral in respect thereof to be demanded as a result of such failure,
and such failure or occurrence is not waived by the creditors within three Business Days of
such failure or occurrence; or




     (i) [Intentionally Deleted];




     (j) Credit Sleeve Termination Date. The Partial Credit Sleeve Termination Date
shall not have occurred at or prior to January 29, 2010 or the Credit Sleeve Termination
Date shall not have occurred at or prior to April 30, 2010; or




     (k) Change of Control. The occurrence of any Change of Control.



          8.02. Sleeve Provider Events of Default. Any of the following shall constitute a
“Sleeve Provider Event of Default”:





     (a) Non-Payment. (i) Any Merrill Party fails to pay within three Business Days
after the same becomes due, any amount payable to a Sleeve Obligor hereunder or under any
other Transaction Document, or (ii) at any time after the Custody Date, the Merrill Parties
shall fail to transfer any Posted Collateral to the applicable Acceptable Collateral Agent
when required by Section 10(d)(i), or (iii) the ML Parent Guarantor fails to pay
within three Business Days after the same becomes due, any amount payable to a Sleeve
Obligor under the BAC Guarantee; or




     (b) Willful Defaults. Any Merrill Party fails to perform or observe any
covenant or agreement set forth in Section 2.01 and such failure continues for ten
Business Days after such Merrill Party receiving written notice thereof from any Sleeve
Obligor, which notice makes specific reference to this Section 8.02(b) and provides
reasonably detailed information regarding the facts constituting such failure; provided that
any such failure shall not fall within the provisions of this Section 8.02(b) in the
event that both: (i) the covenant or agreement the Merrill Party failed to perform or
observe is a covenant or agreement that necessarily involves a consent, determination or
judgment required to be made by any Merrill Party or Sleeve Obligor in a “reasonable” or
“commercially reasonable” manner, or in “good faith” or with “reasonable discretion” or
without unreasonably withholding any such consent (each, a “Decision”); and (ii) there is a
good faith dispute among the parties as to such Decision; provided further, however, that
the foregoing proviso shall not apply at any time that (1) any Merrill Party is in



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breach of
its obligations to maintain ML Guarantees or Credit Support Agreements with two or more
Counterparties when required by this Agreement, or (2) any Merrill Party is
in breach of its obligations to post collateral to any two or more Counterparties when
required by the applicable Credit Support Agreement; or




     (c) Other Defaults. Any Merrill Party fails to perform or observe any other
covenant or agreement (excluding those specified in clause (a) above) contained in
any Transaction Document on its part to be performed or observed and such failure continues
for 30 days after the earlier to occur of (i) the Sleeve Provider receiving notice thereof
from any Sleeve Obligor or (ii) a Responsible Officer or other executive officer of Sleeve
Provider obtains knowledge of such occurrence; or




     (d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of any Merrill Party
herein, in any other Transaction Document, or in any document delivered in connection
herewith or therewith shall be incorrect or misleading in any material respect when made or
deemed made; or




     (e) Insolvency. Either Merrill Party institutes or consents to the institution
of any proceeding under any insolvency, bankruptcy, reorganization, receivership,
liquidation, winding-up or other debtor relief law, or makes an assignment for the benefit
of creditors; or applies for or consents to the appointment of any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of their respective property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged or unstayed
for 60 calendar days; or any proceeding under any insolvency, bankruptcy, reorganization,
receivership, liquidation, winding-up or other debtor relief law relating to such Person or
to all or any material part of their respective property is instituted without the consent
of such Person and continues undismissed or unstayed for 60 calendar days, or an order for
relief is entered in any such proceeding; or




     (f) Failure to Pay Debts. Either Merrill Party becomes unable or admits in
writing its inability or fails generally to pay its debts as they become due.



          Section 9. Remedies and Termination.




          9.01. Remedies of Sleeve Provider. If any Reliant Event of Default shall have occurred and
be continuing, the Sleeve Provider shall have each of the following rights and remedies:





     (a) the right to cure or cure the effects of such Reliant Event of Default and the
right to exercise all contractual rights and remedies of REPS under any Power and Hedging
Contract in respect of which any Post-Unwind Start Date Transaction remains outstanding;



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     (b) (i) the right to declare, by written notice to the Sleeve Obligors, an amount equal
to 115% of the sum of all Current Exposure and all other liabilities and potential
liabilities of the Merrill Parties to any Counterparty or other beneficiary under this
Agreement, as reasonably determined by the Merrill Parties to a 99.0% (2.32-sigma)
confidence level (such amount, the “Required Collateralization Amount”), to be, and
the Required Collateralization Amount shall thereupon become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which are hereby
waived by the Sleeve Obligors, which amount shall be posted to the Sleeve Provider, and may
be applied by the Sleeve Provider from time to time to satisfy any Draw Reimbursement
Obligation or any other Credit Sleeve Obligation, or at the option of the Sleeve Provider,
posted from time to time to any Counterparty or other beneficiary in such amounts as may be
agreed between the Sleeve Provider and such Counterparty or other beneficiary in exchange
for a release or return of Merrill Collateral, following which the Merrill Parties shall
have no liability to the Sleeve Obligors with respect to such portion of the Required
Collateralization Amount so applied or posted to any Counterparty or other beneficiary and
(ii) the right from time to time to require the Sleeve Obligors to post such additional
amounts to the extent that the Merrill Parties determine that the amount of cash then posted
is insufficient to exceed 115% of all Current Exposure and other potential liabilities as of
such time, all of which may be applied by the Merrill Parties as provided in clause
(i);




     (c) the right to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time owing by
any Merrill Party or any of their Affiliates to or for the credit or the account of the
Sleeve Obligors, against any amounts owed by any Sleeve Obligor, including Credit Sleeve
Obligations, whether such obligations are direct or indirect, absolute or contingent, or
matured or unmatured;




     (d) the right of specific performance and injunctive relief to give effect to the terms
and conditions of the Transaction Documents, to the extent permitted by applicable law, and
in connection therewith the Parties acknowledge that the monetary remedies provided to the
Merrill Parties under the Transaction Documents are insufficient to cover all damages that
could be incurred by the Merrill Parties in connection with such a Reliant Event of Default;
and




     (e) any other rights and remedies available at law or in equity with respect to breach
of contract, subject to the provisions of Section 9.04.



          9.02. Remedies of NRG. If any Sleeve Provider Event of Default shall have occurred and be
continuing, NRG shall have each of the following rights and remedies:




          (a) the right to cure or cure the effects of such Sleeve Provider Event of Default; and




          (b) any other rights and remedies available at law or in equity with respect to breach of
contract, subject to the provisions of Section 9.04.




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          9.03. [Intentionally Deleted].




          9.04. Certain Limitations on Remedies. FOR BREACH OF ANY PROVISION OF THIS AGREEMENT FOR
WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF
DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET
FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO
REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED
TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY,
AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN
PROVIDED, NO PARTY SHALL BE LIABLE UNDER THIS AGREEMENT FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE,
EXEMPLARY OR INDIRECT DAMAGES, INCLUDING CONSEQUENTIAL LOST PROFITS OR OTHER CONSEQUENTIAL BUSINESS
INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT OR OTHERWISE. IT IS THE INTENT OF THE
PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT
REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH
NEGLIGENCE BE SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED
TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR
IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT, AND THE DAMAGES
CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS.




          Section 10. Posted Collateral.




          (a) Obligation to Post and Maintain Collateral.





     (i) NRG shall on the Unwind Start Date (1) post (and shall maintain to the extent
required by clause (ii) below) cash and/or Acceptable Letters of Credit in an
aggregate amount at least equal to the Current Exposure; provided that at no time shall the
aggregate value of Acceptable Letters of Credit posted in respect of Current Exposure exceed
the Aggregate Merrill Threshold applicable at such time, and (2) post (and shall maintain to
the extent required by clause (ii) below) cash or provide one or more Acceptable
Letters of Credit having an aggregate value at least equal to the Contingent Exposure; and
provided, further, that on the Unwind Start Date NRG may, at its election, post cash in
satisfaction of its obligations under this Section 10(a)(i) by applying to that effect any
or all cash collateral already held by the Sleeve Provider pursuant to the terms of the
Existing CSRA (including Section 6.11(c) thereof).




     (ii) In addition, from time to time after the Unwind Start Date, upon demand by the
Sleeve Provider or NRG, as applicable, on or promptly following any Valuation Date,



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(A) if the Current Adjustment Amount for such Valuation Date is positive and equals
or exceeds the Minimum Transfer Amount, then NRG shall within one Business Day of
such demand post to the Merrill Parties additional cash and/or Acceptable Letters
of Credit in an aggregate amount at least equal to the Current Adjustment Amount
(rounded to the nearest $10,000); provided that if the Current Adjustment Amount
for such Valuation Date is negative and the absolute value equals or exceeds the
Minimum Transfer Amount, then, so long as no Reliant Default or Reliant Event of
Default has occurred and is continuing, the Merrill Parties shall within one
Business Day of such demand return to NRG in cash an amount of Current Collateral
equal to the absolute value of the Current Adjustment Amount (rounded to the
nearest $10,000); provided, further, that at no time shall the aggregate value of
Acceptable Letters of Credit posted in respect of Current Exposure exceed the
Aggregate Merrill Threshold applicable at such time. For purposes hereof, the
“Current Adjustment Amount” for any Valuation Date will equal:




     (1) the Current Exposure for such Valuation Date




     minus




(2) the aggregate amount of Current Collateral then held by (or on behalf
of) the Merrill Parties as of such Valuation Date; and




(B) if the Contingent Adjustment Amount for such Valuation Date is positive and
equals or exceeds the Minimum Transfer Amount, then NRG shall within one Business
Day of such demand post to the Merrill Parties additional cash and/or additional
Acceptable Letters of Credit having an aggregate value at least equal to the
Contingent Adjustment Amount; provided that if the Contingent Adjustment Amount for
such Valuation Date is negative and the absolute value equals or exceeds the
Minimum Transfer Amount, then, so long as no Reliant Default or Event of Default
has occurred and is continuing, the Merrill Parties shall within one Business Day
of such demand return in cash to NRG Contingent Cash Collateral in an amount equal
to the absolute value of the Current Adjustment Amount (rounded to the nearest
$100,000); provided that to the extent Contingent Cash Collateral is not available,
NRG may request, and the Merrill Parties hereby consent, to the reduction of the
available face amount of one or more Acceptable Letters of Credit by the value of
the Current Adjustment Amount.




For purposes hereof, the “Contingent Adjustment Amount” for any Valuation
Date will equal:




(1) the Contingent Exposure for such Valuation Date




minus




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(2) the aggregate value of Contingent Collateral then held by (or on behalf
of) the Merrill Parties as of such Valuation Date.



          (iii) On or prior to January 29, 2010, to the extent the ML Guarantee Provider has not been
released and fully discharged from all liability under any C&I Guarantee on such date, NRG shall
post cash or provide one or more Acceptable Letters of Credit having an aggregate value at least
equal to the Remaining C&I Exposure at such time.



          (b) Grant of Security Interest. Each of NRG and the Other Sleeve Obligors, as the
pledgor, hereby pledges to the Merrill Parties, as the secured party, as security for the Credit
Sleeve Obligations, and grants to the Merrill Parties a first priority continuing security interest
in, Lien on and right of set-off against all Posted Collateral transferred to or received by (or on
behalf of) the Merrill Parties hereunder.



          (c) Representations Regarding Posted Collateral. NRG and each Other Sleeve Obligor,
as applicable, represents to the Merrill Parties (which representations will be deemed to be
repeated as of each date on which it provides to the Merrill Parties any Posted Collateral) that:




     (i) it has the power to grant a security interest in and Lien on such Posted Collateral
and has taken all necessary actions to authorize the granting of that Lien;




     (ii) it is the sole owner of or otherwise has the right to transfer to the Merrill
Parties all Posted Collateral hereunder, free and clear of any Lien, encumbrance or other
restrictions other than the security interest and Lien granted under clause (b)
above and the Lien described in Section 5.16;




     (iii) upon the transfer of any Posted Collateral to (or on behalf of) the Merrill
Parties under the terms of this Section 10, the Merrill Parties will have a valid
and perfected first priority Lien therein (subject to the Lien described in Section 5.16);
and




     (iv) the performance by it of its obligations under this Section 10 will not
result in the creation of any Lien on any Posted Collateral other than the security interest
and Lien granted under clause (b) above.



          (d) Eligibility to Hold Posted Collateral.




     (i) The Merrill Parties will be entitled to hold Posted Collateral; provided, that at
anytime upon the occurrence and during the continuance of an ML Credit Event and/or a sleeve
Provider Event of Default, then upon a demand made by NRG, the Merrill Parties shall
transfer within three Business Days of such demand all Posted Collateral (free and clear of
any and all Liens except for the Liens of the Merrill Parties) held by them to an Acceptable
Collateral Agent; provided further that in all cases, the Merrill Parties shall have the
right to withdraw deposits held by any such collateral agent to apply or offset such amounts
against any Merrill Collateral required to be posted to any Counterparty or other
beneficiary of Merrill Collateral. The Merrill Parties will cooperate in good faith with
NRG and use commercially reasonably efforts to promptly



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enter into a standby custody
agreement and such other customary documentation as may
be necessary to establish a custody account with an Acceptable Collateral Agent as
contemplated by this clause (i).




     (ii) Except as provided in clause (i) above, the Merrill Parties will,
notwithstanding Section 9-207 of the New York Uniform Commercial Code, have the right to (A)
sell, pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose of, or
otherwise use in its business any Posted Collateral it holds, free from any claim or right
of any nature whatsoever of the Sleeve Obligors, including any equity or right of redemption
by the Sleeve Obligors and (B) register any Posted Collateral in the name of either Merrill
Party, a custodian or a nominee for either.



          (e) Merrill Parties’ Rights and Remedies. Following any Reliant Event of Default and
during the continuance thereof, the Merrill Parties may exercise one or more of the following
rights and remedies in respect of the Posted Collateral:




     (i) all rights and remedies available to a secured party under applicable law with
respect to Posted Collateral held by the Merrill Parties;




     (ii) any other rights and remedies available to the Merrill Parties under the terms of
any Counterparty Document;




     (iii) the right to liquidate any Posted Collateral through one or more public or
private sales or other dispositions with such notice, if any, as may be required under
applicable law, free from any claim or right of any nature whatsoever of NRG or any of its
Subsidiaries, including any equity or right of redemption by NRG and to apply the proceeds
(or the cash equivalent thereof) from the liquidation of the Posted Collateral to any
amounts payable by the Sleeve Obligors with respect to any Credit Sleeve Obligations,
whether or not contingent, in that order as the Merrill Parties may elect; or




     (iv) any other applicable right or remedy in respect of a Reliant Event of Default
provided in Section 9.01 hereof.



          (f) Further Assurances. Promptly following a demand made by any Party, the other
parties will execute, deliver, file and record any financing statement, specific assignment or
other document and take any other action that may be necessary or desirable and reasonably
requested by that party to create, preserve, perfect or validate any security interest or lien
granted under clause (b) above, to enable such Party to exercise or enforce its rights
under this Agreement with respect to Posted Collateral or to effect or document a release of a
security interest on Posted Collateral, as applicable.



          (g) Further Protection. NRG will promptly give notice to the Merrill Parties of, and
defend against, any suit, action, proceeding or Lien that involves Posted Collateral or that would
reasonably be expected to materially and adversely affect the Lien granted by it under clause
(b) above.



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          (h) Interest on Posted Collateral. The Sleeve Provider hereby unconditionally
promises to pay to NRG, with respect to any Posted Collateral which is cash, interest accruing
at a rate per annum equal to the Federal Funds Rate, for each day, on the Dollar amount of such
collateral posted as cash held by the Sleeve Provider on such day (which has not been theretofore
applied or used by the Merrill Parties to satisfy any Draw Reimbursement Obligation or any other
Credit Sleeve Obligation or otherwise returned to NRG). Such interest shall be payable monthly in
arrears within two Business Days following the last day of each month and on the Credit Sleeve
Termination Date.



          (i) Return of Posted Collateral on Credit Sleeve Termination Date. Promptly following
the occurrence of the Credit Sleeve Termination Date (or concurrently therewith to the extent that
the Sleeve Obligors have made arrangements satisfactory to the Merrill Parties to cause the
occurrence of the Credit Sleeve Termination Date in accordance with Section 6.13 below) and
the date on which all other Credit Sleeve Obligations have been paid or satisfied in full (other
than indemnities and any similar obligations of the Sleeve Obligors not then due and payable and
that expressly survive termination of this Agreement and the other Transaction Documents), the
Merrill Parties shall return all Posted Collateral, together with any accrued interest, to NRG
which has not been theretofore applied and will not be concurrently applied by the Merrill Parties
to satisfy any Draw Reimbursement Obligation or any other Credit Sleeve Obligation or otherwise
returned to NRG.



          (j) Acceptable Letters of Credit. Any Acceptable Letter of Credit shall be subject to
the following provisions:




     (i) Any Acceptable Letter of Credit shall be delivered by the Sleeve Obligors to such
address as the Merrill Parties shall specify and shall be maintained for the benefit of the
Merrill Parties or their designees. The Sleeve Obligors or the issuer of the Acceptable
Letter of Credit shall (1) renew or cause the renewal of each outstanding Acceptable Letter
of Credit on a timely basis as provided in the relevant Acceptable Letter of Credit, (2) if
the bank that issued an outstanding Acceptable Letter of Credit has indicated its intent not
to renew such Acceptable Letter of Credit, provide a substitute Acceptable Letter of Credit
at least twenty Business Days prior to the expiration of the outstanding Acceptable Letter
of Credit, and (3) if a bank issuing an Acceptable Letter of Credit shall fail to honor the
Merrill Parties’ properly documented request to draw on an outstanding Acceptable Letter of
Credit, provide for the benefit of the Merrill Parties a substitute Acceptable Letter of
Credit that is issued by a bank acceptable to the Merrill Parties within 3 Business Days
after such refusal.




     (ii) Upon the occurrence of a Letter of Credit Default, the Sleeve Obligors agree to
deliver to the Merrill Parties a substitute Acceptable Letter of Credit on or before the
second Business Day after the occurrence thereof (or on or before the fifth Business Day
after the occurrence thereof if only clause (1) under the definition of Letter of Credit
Default applies). “Letter of Credit Default” shall mean with respect to an
outstanding Acceptable Letter of Credit, the occurrence of any of the following events: (1)
the issuer of such Acceptable Letter of Credit shall fail to maintain a Credit Rating of at
least A by S&P and A2 by Moody’s; (2) the issuer of the Acceptable Letter of Credit shall
fail to



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comply with or perform its obligations under such Acceptable Letter of Credit if
such
failure shall be continuing after the lapse of any applicable grace period; (3) the
issuer of such Acceptable Letter of Credit shall disaffirm, disclaim, repudiate or reject,
in whole or in part, or challenge the validity of such Acceptable Letter of Credit; (4) such
Acceptable Letter of Credit shall expire or terminate, or shall fail or cease to be in full
force and effect at any time during the term of this Agreement; or (5) the issuer of such
Acceptable Letter of Credit institutes or consents to the institution of any proceeding
under any insolvency, bankruptcy, reorganization, receivership, liquidation, winding-up or
other debtor relief law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its respective
property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of the issuer of such
Acceptable Letter of Credit and the appointment continues undischarged or unstayed for 60
calendar days, or an order for relief is entered in any such proceeding; provided, however,
that no Letter of Credit Default shall occur in any event with respect to an Acceptable
Letter of Credit after the time such Acceptable Letter of Credit is required to be cancelled
or returned to the Sleeve Obligors in accordance with the terms of this Agreement.




     (iii) An Acceptable Letter of Credit shall provide that the Merrill Parties may draw
upon the Acceptable Letter of Credit in an amount that is equal to all amounts that are due
and owing from the Sleeve Obligors but have not been paid to the Merrill Parties within the
time allowed for such payments under this Agreement. An Acceptable Letter of Credit shall
provide that a drawing may be made on the Acceptable Letter of Credit upon submission to the
bank issuing the Acceptable Letter of Credit of one or more certificates of the Merrill
Parties in accordance with the specific requirements of the Acceptable Letter of Credit.
Upon or at any time after the occurrence of a Reliant Event of Default, the Merrill Parties
may draw on the entire, undrawn portion of any outstanding Acceptable Letter of Credit upon
submission to the bank issuing such Acceptable Letter of Credit of one or more certificates
in accordance with the specific requirements of the Acceptable Letter of Credit. Cash
proceeds received from drawing upon the Acceptable Letter of Credit shall be deemed Posted
Collateral and shall be applied against all amounts that are due and owing from the Sleeve
Obligors but have not been paid to the Merrill Parties within the time allowed for such
payments under this Agreement. Notwithstanding the Merrill Parties’ receipt of cash under
the Acceptable Letter of Credit, the Sleeve Obligors shall remain liable to the Merrill
Parties for any failure to transfer sufficient Posted Collateral to the Merrill Parties in
accordance with the terms of this Agreement. In addition, the Sleeve Obligors shall remain
liable for any amounts owing to the Merrill Parties and remaining unpaid after the
application of the amounts so drawn by the Merrill Parties.




     (k) BAC Guarantee. On the Unwind Start Date, the Merrill Parties shall cause
the ML Parent Guarantor to issue the BAC Guarantee in respect of the obligations of the
Merrill Parties to return Posted Collateral in accordance with the terms of this Section
10.



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          Section 11. Reimbursement Guaranty by Other Reliant Retail Parties 



          11.01. Reimbursement Guaranty of the Obligations. Subject to the provisions of Section
11.02, the Reimbursement Guarantors jointly and severally hereby irrevocably and
unconditionally guaranty to the Merrill Parties (i) the due and punctual payment in full of all
Reimbursement Obligations and all other amounts payable by NRG to the Merrill Parties under the
Transaction Documents when the same shall become due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due
but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
Section 362(a)) and (ii) the performance of all other obligations of NRG hereunder (collectively,
the “Guaranteed Obligations”).



          11.02. Payment by Guarantors. The Reimbursement Guarantors hereby jointly and severally
agree, in furtherance of the foregoing and not in limitation of any other right which any Merrill
Party may have at law or in equity against any Reimbursement Guarantor by virtue hereof, that upon
the failure of NRG to pay any of the Guaranteed Obligations when and as the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), the Reimbursement Guarantors will upon
demand pay, or cause to be paid, in accordance with the terms of this Agreement, to the Merrill
Parties, an amount equal to the sum of the unpaid principal amount of all Guaranteed Obligations
then due as aforesaid, accrued and unpaid interest on such Guaranteed Obligations (including
interest which, but for NRG’s becoming the subject of a case under the Bankruptcy Code, would have
accrued on such Guaranteed Obligations, whether or not a claim is allowed against NRG for such
interest in the related bankruptcy case) and all other Guaranteed Obligations then owed to the
Merrill Parties as aforesaid.



          11.03. Liability of Reimbursement Guarantors Absolute. Each Reimbursement Guarantor agrees
that its obligations hereunder are irrevocable, absolute, independent and unconditional and shall
not be affected by any circumstance which constitutes a legal or equitable discharge of a guarantor
or surety other than payment in full of the Guaranteed Obligations. In furtherance of the
foregoing and without limiting the generality thereof, each Reimbursement Guarantor agrees as
follows:




     (a)  this Reimbursement Guaranty is a guaranty of payment when due and not of
collectability. This Reimbursement Guaranty is a primary obligation of each Reimbursement
Guarantor and not merely a contract of surety;




     (b)  the obligations of each Reimbursement Guarantor hereunder are independent of the
obligations of NRG and the obligations of any other guarantor (including any other
Reimbursement Guarantor) of the obligations of NRG, and a separate action or actions may be
brought and prosecuted against such Reimbursement Guarantor whether or not any action is
brought against NRG or any of such other guarantors and whether or not NRG is joined in any
such action or actions;



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     (c)  payment by any Reimbursement Guarantor of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge any Reimbursement
Guarantor’s liability for any portion of the Guaranteed Obligations which
has not been paid; and without limiting the generality of the foregoing, if the Merrill
Parties is awarded a judgment in any suit brought to enforce any Reimbursement Guarantor’s
covenant to pay a portion of the Guaranteed Obligations, such judgment shall not be deemed
to release such Reimbursement Guarantor from its covenant to pay the portion of the
Guaranteed Obligations that is not the subject of such suit, and such judgment shall not,
except to the extent satisfied by such Reimbursement Guarantor, limit, affect, modify or
abridge any other Reimbursement Guarantor’s liability hereunder in respect of the Guaranteed
Obligations;




     (d)  any Merrill Party, upon such terms as it deems appropriate, without notice or
demand and without affecting the validity or enforceability hereof or giving rise to any
reduction, limitation, impairment, discharge or termination of any Reimbursement Guarantor’s
liability hereunder, from time to time may (i) renew, extend, accelerate, increase the rate
of interest on, or otherwise change the time, place, manner or terms of payment of the
Guaranteed Obligations; (ii) settle, compromise, release or discharge, or accept or refuse
any offer of performance with respect to, or substitutions for, the Guaranteed Obligations
or any agreement relating thereto and/or subordinate the payment of the same to the payment
of any other obligations; (iii) request and accept other guaranties of the Guaranteed
Obligations and take and hold security for the payment hereof or the Guaranteed Obligations;
(iv) release, surrender, exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for payment of the
Guaranteed Obligations, any other guaranties of the Guaranteed Obligations, or any other
obligation of any Person (including any other Reimbursement Guarantor) with respect to the
Guaranteed Obligations; (v) enforce and apply any security now or hereafter held by or for
the benefit of such Merrill Party in respect hereof or the Guaranteed Obligations and direct
the order or manner of sale thereof, or exercise any other right or remedy that such Merrill
Party may have against any such security, in each case as such Merrill Party in its
discretion may determine consistent herewith or any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable, and even though
such action operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of any Reimbursement Guarantor against NRG or any security for the
Guaranteed Obligations; and (vi) exercise any other rights available to it under the
Transaction Documents; and




     (e)  this Reimbursement Guaranty and the obligations of the Reimbursement Guarantors
hereunder shall be valid and enforceable and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason (other than payment in full
of the Guaranteed Obligations), including the occurrence of any of the following, whether or
not any Reimbursement Guarantor shall have had notice or knowledge of any of them: (i) any
failure or omission to assert or enforce or agreement or election not to assert or enforce,
or the stay or enjoining, by order of court, by operation of law or otherwise, of the
exercise or enforcement of, any claim or demand or any right,



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power or remedy (whether
arising under the Transaction Documents, at law, in equity or otherwise) with respect to the
Guaranteed Obligations or any agreement relating thereto, or with respect to any other
guaranty of or security for the payment of the Guaranteed
Obligations; (ii) any rescission, waiver, amendment or modification of, or any consent
to departure from, any of the terms or provisions (including provisions relating to events
of default) hereof, any of the other Transaction Documents or any agreement or instrument
executed pursuant thereto, or of any other guaranty or security for the Guaranteed
Obligations, in each case whether or not in accordance with the terms hereof or such
Transaction Document or any agreement relating to such other guaranty or security; (iii) the
Guaranteed Obligations, or any agreement relating thereto, at any time being found to be
illegal, invalid or unenforceable in any respect; (iv) any Merrill Party’s consent to the
change, reorganization or termination of the corporate structure or existence of NRG or any
of its Subsidiaries and to any corresponding restructuring of the Guaranteed Obligations;
(v) any failure to perfect or continue perfection of a security interest in any collateral
which secures any of the Guaranteed Obligations; and (vi) any other act or thing or
omission, or delay to do any other act or thing, which may or might in any manner or to any
extent vary the risk of any Reimbursement Guarantor as an obligor in respect of the
Guaranteed Obligations.



          11.04. Waivers by Reimbursement Guarantors. Each Reimbursement Guarantor hereby waives,
for the benefit of the Merrill Parties: (a) any right to require any Merrill Party, as a condition
of payment or performance by such Reimbursement Guarantor, to (i) proceed against NRG, any other
guarantor (including any other Reimbursement Guarantor) of the Guaranteed Obligations or any other
Person, (ii) proceed against or exhaust any security held from NRG, any such other guarantor or any
other Person, (iii) proceed against or have resort to any balance of any Posted Collateral or
credit on the books of any Merrill Party in favor of NRG or any other Person, or (iv) pursue any
other remedy in the power of any Merrill Party whatsoever; (b) any defense arising by reason of the
incapacity, lack of authority or any disability of NRG or any other Reimbursement Guarantor
including any defense based on or arising out of the lack of validity or the unenforceability of
the Guaranteed Obligations or any agreement or instrument relating thereto; (c) any defense based
upon any statute or rule of law which provides that the obligation of a surety must be neither
larger in amount nor in other respects more burdensome than that of the principal; (d) (i) any
principles or provisions of law, statutory or otherwise, which are or might be in conflict with the
terms hereof, to the extent the same may be waived, (ii) the benefit of any statute of limitations
affecting such Reimbursement Guarantor’s liability hereunder or the enforcement hereof, and
(iii) promptness, diligence and any requirement that any Merrill Party protect, secure, perfect or
insure any security interest or lien or any property subject thereto; (e) notices, demands,
presentments, protests, notices of protest, notices of dishonor and notices of any action or
inaction, including acceptance hereof, notices of default hereunder or under any agreement or
instrument related thereto, notices of any renewal, extension or modification of the Guaranteed
Obligations or any agreement related thereto, notices of any extension of credit to NRG and notices
of any of the matters referred to in Section 11.04; and (f) any other defenses or benefits
that may be derived from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms hereof.



          11.05. [Intentionally Deleted].



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          11.06. [Intentionally Deleted].



          11.07. Continuing Reimbursement Guaranty. This Reimbursement Guaranty is a continuing
guaranty and shall remain in effect until all of the Guaranteed Obligations shall have been paid in
full (subject to reinstatement as provided in Section 11.10(b) below). Each Reimbursement
Guarantor hereby irrevocably waives any right to revoke this Reimbursement Guaranty as to future
transactions giving rise to any Guaranteed Obligations.



          11.08. Authority of Reimbursement Guarantors or NRG. It is not necessary for any Merrill
Party to inquire into the capacity or powers of any Reimbursement Guarantor or NRG or the officers,
directors or any agents acting or purporting to act on behalf of any of them.



          11.09. Financial Condition of NRG. Any Reimbursement Guaranty may be made to NRG or
continued from time to time, without notice to or authorization from any Reimbursement Guarantor
regardless of the financial or other condition of NRG at the time of any such grant or
continuation. No Merrill Party shall have any obligation to disclose or discuss with any
Reimbursement Guarantor its assessment, or any Reimbursement Guarantor’s assessment, of the
financial condition of NRG. Each Reimbursement Guarantor has adequate means to obtain information
from NRG on a continuing basis concerning the financial condition of NRG and its ability to perform
its obligations under the Transaction Documents, and each Reimbursement Guarantor assumes the
responsibility for being and keeping informed of the financial condition of NRG and of all
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations. Each
Reimbursement Guarantor hereby waives and relinquishes any duty on the part of any Merrill Party to
disclose any matter, fact or thing relating to the business, operations or conditions of NRG now
known or hereafter known by any Merrill Party.



          11.10. Bankruptcy, etc.



          (a) Each Reimbursement Guarantor acknowledges and agrees that any interest on any portion of
the Guaranteed Obligations which accrues after the commencement of any bankruptcy, reorganization
or insolvency case or proceeding (or, if interest on any portion of the Guaranteed Obligations
ceases to accrue by operation of law by reason of the commencement of such case or proceeding, such
interest as would have accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed Obligations because it is
the intention of Reimbursement Guarantors and Merrill Parties that the Guaranteed Obligations which
are guaranteed by Reimbursement Guarantors pursuant hereto should be determined without regard to
any rule of law or order which may relieve NRG of any portion of such Guaranteed Obligations.
Reimbursement Guarantors will permit any trustee in bankruptcy, receiver, debtor in possession,
assignee for the benefit of creditors or similar person to pay the Merrill Parties, or allow the
claim of the Merrill Parties in respect of, any such interest accruing after the date on which such
case or proceeding is commenced.



          (b) In the event that all or any portion of the Guaranteed Obligations are paid by NRG or a
Reimbursement Guarantor, the obligations of Reimbursement Guarantors hereunder



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shall continue and
remain full force and effect or be reinstated, as the case may be, in the event that all or any
part of such payment(s) are rescinded or recovered directly or indirectly from any Merrill Party as
a preference, fraudulent transfer or otherwise, and any such payments which are
so rescinded or recovered shall constitute Guaranteed Obligations for all purposes hereunder.



          Section 12. Miscellaneous.



          12.01. Notices. All notices and other communications provided for herein shall be in
writing, including telecopy and electronic mail, and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopy or other means of
electronic transmission approved in advance by the recipient party, as follows:


(a) if to NRG or any Other Sleeve Obligor:



NRG ENERGY, INC.

211 Carnegie Center

Princeton, New Jersey 08540

Attention: Treasurer, Chief Financial Officer and General Counsel

Telecopy No.: (609) 524-4501



(b) if to the Sleeve Provider:



MERRILL LYNCH COMMODITIES, INC.

20 East Greenway Plaza

Suite 700

Houston, Texas 77046

Attention: Legal Department

Telephone No.: (713) 544-5263

Telecopy No.: (713) 544-5551

E-Mail: reliantsleeve_notices@ml.com



(c) if to the ML Guarantee Provider:



MERRILL LYNCH & CO., INC.

Merrill Lynch & Co., Inc.

4 World Financial Center, 22nd Floor

New York, NY 10281

Attention: Treasurer

Fax: (212) 449-2766

E-Mail: reliantsleeve_notices@ml.com



With a copy (which shall not constitute notice) to:



Merrill Lynch & Co., Inc.

222 Broadway, 17th Floor

New York, NY 10038

Attention: Corporate Secretary




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Any Party hereto may change its address, telecopy number or e-mail address for notices and other
communications hereunder by notice to the other Party hereto. All notices and other
communications given to any Party hereto in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt.




          12.02. Confidentiality; Limitation on Use of Information. (a) Any information made
available by the Sleeve Obligors, any Subsidiary of any of the foregoing, any Merrill Party or any
Affiliate thereof with respect to this Agreement is confidential and shall not be discussed with or
disclosed to any third party, except for such information (i) as may become generally available to
the public other than as a result of a violation of this Agreement, (ii) as may be required or
appropriate in response to any summons, subpoena, or otherwise in connection with any litigation or
to comply with any applicable law, order, regulation, or ruling or to the extent requested by any
regulatory authority, (iii) which becomes available to the Sleeve Obligors, any Subsidiary of any
of the foregoing, any Merrill Party or any Affiliate thereof on a non-confidential basis from a
source other than the other Party, (iv) as may be furnished to any person or entity (including that
Person’s auditors, attorneys, advisors, or financial institutions) with which such Person has a
written agreement or which are otherwise required to keep the information that is disclosed in
confidence, or (v) relating to the U.S. Federal income tax treatment and tax structure of the
transactions contemplated by this Agreement, including all relevant materials relating to such tax
treatment and tax structure (except where confidentiality is reasonably necessary to comply with
the securities laws). Notwithstanding the foregoing, the existence and terms of the ML Guarantees
shall not be considered confidential information.



          (b) In connection with the foregoing provisions of this Section 12.02, (A) the Parties
recognize that the Parties are both engaged in wholesale trading activities in the gas and
electricity markets that may from time to time be adverse, (B) the possession by the Merrill
Parties of the confidential information of the Sleeve Obligors, or the possession by the Sleeve
Obligors of the confidential information of the Merrill Parties, in compliance with the foregoing
does not constitute a reason for one Party to limit the ability of the other Party to engage in
such adverse trading activities, and (C) the Parties may in compliance with the foregoing and for
the purposes of the Transaction Documents discuss the confidential information of the other Parties
internally.



          12.03. Reliant Employees. During the Scheduled Term, the Merrill Parties shall not solicit
or otherwise induce any director, officer or key employee of the Sleeve Obligors, or any officer or
key employee of NRG or its Subsidiaries that is actively involved in the negotiation or
administration of this Agreement to leave the employ of the Sleeve Obligors, NRG or its
Subsidiaries; provided that this prohibition shall not apply to (i) directors, officers or key
employees of the Sleeve Obligors or officers or key employees of NRG or its Subsidiaries who are
not full time employees or who are not actively involved with the Merrill Parties in negotiating on
or administering this Agreement or (ii) officers, directors or key employees of the Sleeve
Obligors, NRG or its Subsidiaries who respond to general solicitations or who otherwise
independently seek employment without inducement by any Merrill Party.



          12.04. [Intentionally Deleted].



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          12.05. Waiver. No failure on the part of any Party to exercise and no delay in exercising,
and no course of dealing with respect to, any right, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.



          12.06. Amendments, Etc. Except as otherwise expressly provided in this Agreement, any
provision of this Agreement or in any other Transaction Document between or among any of the
Merrill Parties, on one hand, and any of the Sleeve Obligors, on the other hand, may be modified or
supplemented only by an instrument in writing signed by the applicable Parties thereto.



          12.07. Expenses, Etc.



          (a) REPS (and, from and after the Unwind Start Date, NRG) agrees to pay or reimburse the
Sleeve Provider for:  (A) all reasonable and documented out-of-pocket costs and expenses of the
Sleeve Provider (including the reasonable fees and expenses of legal counsel and of any other
third-party advisors or consultants) in connection with the execution or delivery of this Agreement
or any other Transaction Document or any agreement or instrument contemplated hereby or thereby,
the performance by the Parties hereto and thereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby, including, any such costs
and expenses incurred in connection with (1) any waiver, modification or amendment of this
Agreement or any other Transaction Document, whether or not consummated, (2) any Default by the
Sleeve Obligors and any enforcement or collection proceedings resulting therefrom, including all
manner of participation in or other involvement with (i) bankruptcy, insolvency, receivership,
foreclosure, winding up or liquidation proceedings, (ii) judicial or regulatory proceedings and
(iii) workout, restructuring or other negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated) and (3) the enforcement of this
Section 12.07; and (B) all transfer, stamp, documentary or other similar taxes, assessments
or charges levied by any governmental or revenue authority in respect of this Agreement or any of
the other Transaction Documents or any other document referred to herein or therein and all costs,
expenses, taxes, assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated by this Agreement or
any other document referred to herein.



          (b) REPS (and, from and after the Unwind Start Date, NRG) agrees to reimburse the Merrill
Parties for any amounts paid by the Merrill Parties to cure defaults by NRG or any Other Sleeve
Obligor under any Transaction Document or any other document, contract or agreement to which NRG or
such Other Sleeve Obligor is a party (the amounts referred to in this clause (b) being
herein collectively referred to as the “Deferred Cure Reimbursement Obligations”).
Deferred Cure Reimbursement Obligations may be prepaid but shall mature and be payable on January
29, 2010.



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          (c) REPS (and, from and after the Unwind Start Date, NRG) shall indemnify each Merrill Party
and each related Party of the Merrill Parties (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all actual losses,
claims, damages, liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of any of the transactions contemplated
hereby, (ii) the provision of any ML Guarantee or other Merrill Collateral or use thereof, (iii)
any actual or alleged presence or release of Hazardous Materials on or from any property owned or
operated by NRG or any of its Subsidiaries, or any liability under any Environmental Law related in
any way to NRG or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory and regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from (A) the gross negligence or willful
misconduct of such Indemnitee, (B) any breach by such Indemnitee of its obligations hereunder, or
(C) claims by one Indemnitee against another Indemnitee not relating to a breach of this Agreement
by any Sleeve Obligor.



          12.08. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors and permitted assigns. There shall
be no third party beneficiaries of this Agreement



          12.09. Assignments. Neither the Sleeve Obligors nor the Merrill Parties may assign any of
their rights or obligations hereunder without the prior written consent of the other Parties
hereto.



          12.10. Survival. The obligations of NRG under Section 3.05, Section 11.07,
Section 12.07 and any other provision that expressly provides for survival after
termination shall survive the Credit Sleeve Termination Date.



          12.11. Counterparts. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and any of the Parties hereto may
execute this Agreement by signing any such counterpart.



          12.12. Governing Law; Jurisdiction; Etc.



          (a) Governing Law. This Agreement shall be governed by, and construed in accordance
with, the law of the State of New York.



          (b) Submission to Jurisdiction. The Parties hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of New York and of the
Supreme Court of the State of New York sitting in New York County (including its Appellate
Division), and of any other appellate court in the State of New York (the “New York Courts”),



-56-









 







for
the purposes of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. Notwithstanding the nonexclusive submission above:




          (A) With respect to any proceeding initiated by or on behalf of any Sleeve Obligor
arising out of or relating to this Agreement or the transactions
contemplated hereby, the Sleeve Obligors agree to bring such proceeding exclusively in
the United States District Court for the Southern District of New York or if such court does
not have subject matter jurisdiction in any of the other New York Courts located in New
York, New York, and in such case EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY SUCH LEGAL
PROCEEDING;




          (B) With respect to any proceeding initiated by or on behalf of any Merrill Party
arising out of or relating to this Agreement or the transactions contemplated hereby, which
the Merrill Parties elect to bring in the United States District Court for the Southern
District of New York or if such court does not have subject matter jurisdiction in any of
the other New York Courts located in New York, New York, EACH PARTY HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY SUCH LEGAL PROCEEDING; and




          (C) With respect to any proceeding initiated by or on behalf of any Merrill Party
arising out of or relating to this Agreement or the transactions contemplated hereby, which
the Merrill Parties elect to bring in the United States District Court for the Southern
District of Texas (Houston Division) or if such court does not have subject matter
jurisdiction in any of the other Texas Courts located in Houston, Texas, the Sleeve Obligors
expressly reserve their rights to trial by jury.



          (c) Waiver of Venue. Each Party hereby irrevocably waives, to the fullest extent
permitted by applicable law, any objection that it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that any such proceeding brought
in such a court has been brought in an inconvenient forum.



          (d) Service of Process. Each Party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 12.01. Nothing in this Agreement
will affect the right of any Party to this Agreement to serve process in any other manner permitted
by law.



          12.13. Certain Dispute Resolution Procedures. If a Party (a “Disputing Party”)
disputes any Market Information forming a component used in a calculation under Sections
2.02, then (i) the Disputing Party will notify the other Party not later than the close of
business on the Business Day following the date that Disputing Party received the other Party’s
calculation and such Disputing Party will also provide its calculation of such amount and the
applicable Market Information used to make such calculation, (ii) the Parties will in good faith
consult with each other in an attempt to resolve the dispute and (iii) if the Parties fail to
resolve the dispute by the third (3rd) Business Day following the date the notice of
dispute was delivered, then the Calculation Agent will recalculate the applicable calculation by:
(A) utilizing any



-57-









 







Market Information that the Parties have agreed are not in dispute; and (B)
calculating the component that is in dispute by seeking four actual quotations at mid market from
reference market makers, and taking the arithmetic average of those obtained; provided that if such
number of quotations are not available for a particular component, then fewer than such number of
quotations may be used for such component; and if no quotations are available for a particular
component, then the Calculation Agent shall use its own calculations for that component. Following
a recalculation pursuant to this Section, the Calculation Agent will notify the Parties of the
recalculation of such amount not later than 12:00 noon CPT on the fifth Business Day following the
date of the notice of dispute was delivered, and the same shall be binding for the purposes of this
Agreement. The “Calculation Agent” shall be a third party agreed to by both NRG and the
Sleeve Provider from the list of third parties in Schedule 12.13; provided that if the
Parties are unable to promptly agree on such third party, then the next third party listed on such
Schedule who has not yet served as Calculation Agent shall be the Calculation Agent for such
dispute.



          12.14. Captions. The table of contents and captions and section headings appearing herein
are included solely for convenience of reference and are not intended to affect the interpretation
of any provision of this Agreement.



          12.15. Limitation on Interest. Notwithstanding anything herein to the contrary, if at
any time the interest rate applicable to any Reimbursement Obligation, together with all fees,
charges and other amounts which are treated as interest on such Reimbursement Obligation under
applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the
“Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the
Sleeve Provider in accordance with applicable law, the rate of interest payable in respect of such
Reimbursement Obligations hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Reimbursement Obligation but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges payable to the Sleeve
Provider in respect of other Reimbursement Obligations or periods shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Rate to the date of repayment, shall have been received by the Sleeve Provider.



          12.16. Integration. This Agreement and the other Transaction Documents constitute the
entire contract among the Parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject matter hereof.



          12.17. Conditions to Amendment and Restatement. The Existing CSRA shall be amended
and restated hereby as of the Unwind Start Date; provided that each of the following conditions has
been satisfied or waived by the Merrill Parties on or prior to October 5, 2009 (which may occur
concurrently with the effectiveness of such amendment and restatement):




     (a) All Merrill Collateral shall have been returned to the Merrill Parties, including
all ML Guarantees, and the Merrill Parties shall have been legally discharged,



-58-









 







in each case,
in a manner reasonably satisfactory to the Merrill Parties, from all other obligations under
the Existing CSRA (including all obligations to post any collateral or provide credit
support to any Governmental Authority or under any Power and Hedging Contract or any other
agreement for the benefit of the Sleeve Obligors, but excluding indemnities and other
contingent obligations not then due and payable), except for the
Merrill Parties’ obligations in respect of the Post-Unwind Start Date Obligations.
Without limiting the generality of the foregoing, each of the actions set forth in
Section 12.18(a) and on Schedule 12.17(a) shall have been duly taken on the
Unwind Start Date.




     (b) The Sleeve Obligors shall have, no later than one Business Day prior to the Unwind
Start Date, formally notified each TDSP that is the beneficiary of any ML Collateral that
the Sleeve Obligors desire for such TDSP to release all ML Collateral, and to discharge all
future obligations of the Merrill Parties to provide or post any future collateral or ML
Guarantee, in exchange for alternate collateral or other arrangements to be negotiated
between the Sleeve Obligors and such TDSP.




     (c) Since May 1, 2009, there shall have not have occurred any event or circumstance,
either individually or in the aggregate that has had or could reasonably be expected to have
a Material Adverse Effect.




     (d) The Merrill Parties shall have received a favorable written opinion of Kirkland &
Ellis LLP, counsel for NRG and the Other Sleeve Obligors (or from such other counsel, which
may be in-house counsel, as is reasonably acceptable to the Merrill Parties), as to the
enforceability of this Agreement effective as of the Unwind Start Date, the validity and
perfection of the liens created by Section 10, the absence of any violation of
federal and New York law and absence of conflict with the organization documents and any
material Contractual Obligations of the Sleeve Obligors (provided that, other than with
respect to the NRG Credit Agreement, the Senior Note Documents and the Preferred Equity, or
any refinancing in effect at the relevant time, such opinion as to absence of conflicts with
other Contractual Obligations may be from in-house counsel to NRG), in each case, in
connection with the execution, delivery and performance by the Sleeve Obligors of this
Agreement, and covering such other matters relating to the Sleeve Obligors, this Agreement
or the transactions contemplated hereby as the Merrill Parties or their counsel shall
reasonably request.




     (e) The Loans and all other Obligations under Working Capital Facility shall be repaid
and satisfied in full and the Working Capital Facility shall be terminated (other than
indemnities and any similar obligations of the Sleeve Obligors not then due and payable and
that expressly survive termination of this Agreement and the other Transaction Documents).




     (f) The Merrill Parties shall have received all reasonable fees and expenses that are
due hereunder, including payment of the following: (i) the invoice of the Merrill Parties
dated as of September 30, 2009 and (ii) the invoice of Milbank, Tweed, Hadley & McCloy LLP
dated September 30, 2009.



-59-









 






     (g) The Merrill Parties shall have received a certificate, dated the Unwind Start Date,
of a Responsible Officer of NRG, to the effect that:




     (1) the representations and warranties of the Sleeve Obligors made in this
Agreement are true and correct in all material respects on and as of the Unwind
Start Date, and




     (2) no Reliant Default or Reliant Event of Default has occurred and is
continuing as of the Unwind Start Date.



          12.18. Additional Unwind Start Date Actions.



          (a) ICE Block of Exchange Traded Contracts. With respect to each Exchange Traded
Contract and each corresponding Mirror OTC Contract that is held by the Sleeve Obligors and the
Merrill Parties on the Unwind Start Date, the Sleeve Obligors will, or will cause an Affiliate to,
(i) enter into a transaction on ICE or NYMEX, as applicable, to transfer the Sleeve Provider’s
position in such Exchange Traded Contract to such Sleeve Obligor or such Affiliate and (ii)
close-out each related Mirror OTC Contract (which may be through novation of the Sleeve Provider’s
position under such Mirror OTC Contract to such Affiliate), in each case, at no cost or expense to
the Merrill Parties. Concurrently with the completion of the foregoing transfers and novations,
the Merrill Parties shall be legally discharged from all obligations under such transactions, the
Merrill Parties shall have received the return of all variation margin and all other ML Collateral
posted in connection therewith, and all related ML Guarantees shall be terminated.



          (b) Terminated Agreements. Effective upon the satisfaction of each of the conditions
precedent set forth in Section 12.17(a), each of the Parties that is a party thereto hereby
terminates, and each other Party hereby consents to the termination of, each agreement listed on
Schedule 12.18(b) (the “Terminated Agreements”), provided that (i) each Party shall
remain liable for its obligations incurred under each Terminated Agreement relating to any period
prior to the Unwind Start Date that have not been discharged and (ii) all provisions which by their
express terms survive expiration or termination of any Terminated Agreement shall continue in full
force and effect.



          (c) Release of Collateral Under Existing Security Documents. The Merrill Parties
hereby agree that, effective upon each of the conditions precedent set forth in Section
12.17(a), the Merrill Parties shall and/or shall direct the Collateral Trustee to release all
of the Collateral (as defined in the Existing Security Documents), in each case, other than any
Posted Collateral to be retained by the Merrill Parties hereunder, and the Sleeve Provider shall
release all Class B limited liability company interests in RERH Holdings held by the Sleeve
Provider. In connection with the foregoing, the Merrill Parties shall timely execute and deliver,
provide, return or otherwise make available or direct the execution and delivery, provision, return
or otherwise making available of all filings, recordings, notices, and other related documents and
agreements, including releases and notices, directions and other communications to the Collateral
Trustee, reasonably required to implement the foregoing in accordance with the terms of the
foregoing.



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          12.19. Existing CSRA Provisions. Until the Unwind Start Date, the Parties agree that the
Existing CSRA and all rights and remedies of the Parties thereunder shall remain in full force and
effect; provided, that the Parties agree that from the Signing Date until
the Unwind Start Date, notwithstanding any contrary provision in the Existing CSRA or this
Agreement:




     (a) the transactions contemplated by that certain Framework Agreement dated as of the
date hereof between REPS and MLCI (the “Framework Agreement”) and by any other
agreement listed on Schedule 12.17(a) may be consummated;




     (b) the Merrill Parties will not be required to report Exposure and Risk Limits on
October 1, 2009;




     (c) any transactions entered into after the Signing Date between REPS and NRG shall be
entered into under the Energy Management Services Agreement, dated October 1, 2009, between
REPS and NRG Power Marketing LLC;




     (d) the Sleeve Obligors will not be required to transfer data to the Merrill Parties
pursuant to Schedule 1.01(c) of the Existing CSRA (but instead will transfer
information required by new Schedule 1.01(c) of this Agreement; and




     (e) the Sleeve Obligors will not be required to remain in compliance with Section
2.02(b) (or Exhibit B) of the Existing CSRA relating to limitations with respect to
Accepted Counterparties (as defined in the Existing CSRA) or Section 7.17 of the
Existing CSRA.



          12.20. Public Disclosures. NRG agrees that neither it nor its Affiliates will at any
time issue any press release or other public disclosure, including any prospectus, proxy statement
or other materials filed with any Governmental Authority using the name of the Sleeve Provider, the
ML Guarantee Provider or any of their Affiliates or referring to this Agreement, the transactions
or any of the agreements contained herein or contemplated hereby or any discussions relating to any
of the foregoing, without at least one full Business Day (or such shorter period as may be
practicable in the circumstances) prior notice to the Merrill Parties and the prior written consent
of the Sleeve Provider (such consent not to be unreasonably withheld, delayed or conditioned).



[signatures follow]




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          IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed and
delivered as of the day and year first above written.




	 	 	 	 	 
	 	NRG ENERGY, INC.

 	 
	 	By:  	/s/ Christopher S. Sotos
 	 
	 	 	Name:  	Christopher S. Sotos 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 



Signature Page to Credit Sleeve and Reimbursement Agreement 





 









 





	 	 	 	 	 
	 	MERRILL PARTIES



MERRILL LYNCH COMMODITIES, INC.,

      as Sleeve Provider

 	 
	 	By:  	/s/ Dennis Albrecht
 	 
	 	 	Name:  	Dennis Albrecht 	 
	 	 	Title:  	Managing Director 	 
	 
	 	MERRILL LYNCH & CO., INC.,

      as ML Guarantee Provider

 	 
	 	By:  	/s/ Marlene Debel
 	 
	 	 	Name:  	Marlene Debel 	 
	 	 	Title:  	Assistant Treasurer 	 
	 
	 	Accepted and agreed, for the purposes of Section 12.17.



MERRILL LYNCH CAPITAL CORPORATION,

      as Working Capital Facility Provider

 	 
	 	By:  	/s/ Barry Price
 	 
	 	 	Name:  	Barry Price 	 
	 	 	Title:  	Vice President 	 
	 



Signature Page to Credit Sleeve and Reimbursement Agreement





 









 





	 	 	 	 	 
	 	OTHER SLEEVE OBLIGORS



RELIANT ENERGY POWER SUPPLY, LLC

 	 
	 	By:  	/s/ Christopher S. Sotos
 	 
	 	 	Name:  	Christopher S. Sotos 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	RERH HOLDINGS, LLC

 	 
	 	By:  	/s/ Christopher S. Sotos
 	 
	 	 	Name:  	Christopher S. Sotos 	 
	 	 	Title:  	Vice President 	 
	 
	 	RELIANT ENERGY RETAIL HOLDINGS, LLC

 	 
	 	By:  	/s/ Christopher S. Sotos
 	 
	 	 	Name:  	Christopher S. Sotos 	 
	 	 	Title:  	Vice President 	 
	 
	 	RELIANT ENERGY RETAIL SERVICES, LLC

 	 
	 	By:  	/s/ Christopher S. Sotos
 	 
	 	 	Name:  	Christopher S. Sotos 	 
	 	 	Title:  	Vice President 	 
	 
	 	RE RETAIL RECEIVABLES, LLC

 	 
	 	By:  	/s/ Christopher S. Sotos
 	 
	 	 	Name:  	Christopher S. Sotos 	 
	 	 	Title:  	Vice President 	 
	 



Signature Page to Credit Sleeve and Reimbursement Agreement