Document:

exv10w27

 

Exhibit 10.27

EXECUTION COPY

 

 

COLLATERAL TRUST AGREEMENT

dated as of December 23, 2003

as amended and restated as of

December 24, 2004

among

NRG ENERGY, INC.,

NRG POWER MARKETING INC.,

the Guarantors from time to time party hereto,

CREDIT SUISSE FIRST BOSTON,

as Administrative Agent,

LAW DEBENTURE TRUST COMPANY OF NEW YORK,

as Trustee

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Priority Collateral Trustee, Parity Collateral Trustee

and Account Collateral Trustee

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
	 	 	2	 
	SECTION 1.1 Defined Terms
	 	 	2	 
	SECTION 1.2 Rules of Interpretation
	 	 	15	 
	 
	 	 	 	 
	ARTICLE 2. THE TRUST ESTATES
	 	 	16	 
	SECTION 2.1 Appointment of Priority Collateral Trustee and Declaration of Senior Trust
	 	 	16	 
	SECTION 2.2 Appointment of Parity Collateral Trustee and Declaration of Junior Trust
	 	 	17	 
	SECTION 2.3 Appointment of Account Collateral Trustee
	 	 	18	 
	SECTION 2.4 Priority of Liens
	 	 	18	 
	SECTION 2.5 Collateral Shared Equally and Ratably within Class
	 	 	20	 
	 
	 	 	 	 
	ARTICLE 3. OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE
	 	 	20	 
	SECTION 3.1 Undertaking of the Collateral Trustee
	 	 	20	 
	SECTION 3.2 Release or Subordination of Liens
	 	 	21	 
	SECTION 3.3 Remedies Upon Actionable Default
	 	 	21	 
	SECTION 3.4 Application of Proceeds
	 	 	22	 
	SECTION 3.5 Powers of the Collateral Trustee
	 	 	23	 
	SECTION 3.6 Documents and Communications
	 	 	23	 
	SECTION 3.7 For Sole and Exclusive Benefit of Holders of Secured Obligations
	 	 	23	 
	SECTION 3.8 Additional Secured Debt
	 	 	23	 
	 
	 	 	 	 
	ARTICLE 4. OBLIGATIONS ENFORCEABLE BY THE COMPANY AND THE GUARANTORS
	 	 	24	 
	SECTION 4.1 Release of Liens
	 	 	24	 
	SECTION 4.2 Delivery of Copies to Secured Debt Representatives
	 	 	26	 
	SECTION 4.3 Collateral Trustee not Required to Serve, File or Record
	 	 	26	 
	 
	 	 	 	 
	ARTICLE 5. IMMUNITIES OF THE COLLATERAL TRUSTEE
	 	 	26	 
	SECTION 5.1 No Implied Duty
	 	 	26	 
	SECTION 5.2 Appointment of Agents and Advisors
	 	 	27	 
	SECTION 5.3 Other Agreements
	 	 	27	 
	SECTION 5.4 Solicitation of Instructions
	 	 	27	 
	SECTION 5.5 Limitation of Liability
	 	 	27	 
	SECTION 5.6 Documents in Satisfactory Form
	 	 	27	 
	SECTION 5.7 Entitled to Rely
	 	 	27	 
	SECTION 5.8 Secured Debt Default
	 	 	28	 
	SECTION 5.9 Actions by Collateral Trustee
	 	 	28	 
	SECTION 5.10 Security or Indemnity in favor of the Collateral Trustee
	 	 	28	 
	SECTION 5.11 Rights of the Collateral Trustee
	 	 	28	 
	SECTION 5.12 Limitations on Duty of Collateral Trustee in Respect of Collateral
	 	 	28	 
	SECTION 5.13 Assumption of Rights, Not Assumption of Duties
	 	 	29	 
	SECTION 5.14 No Liability for Clean Up of Hazardous Materials
	 	 	29	 
	 
	 	 	 	 
	ARTICLE 6. RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE
	 	 	30	 
	SECTION 6.1 Resignation or Removal of Collateral Trustee
	 	 	30	 
	SECTION 6.2 Appointment of Successor Collateral Trustee
	 	 	30	 

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	 	 	Page	 
	SECTION 6.3 Succession
	 	 	30	 
	 
	 	 	 	 
	ARTICLE 7. MISCELLANEOUS PROVISIONS
	 	 	30	 
	SECTION 7.1 Amendment
	 	 	30	 
	SECTION 7.2 Further Assurances
	 	 	33	 
	SECTION 7.3 Successors and Assigns
	 	 	33	 
	SECTION 7.4 Delay and Waiver
	 	 	33	 
	SECTION 7.5 Notices
	 	 	34	 
	SECTION 7.6 Entire Agreement
	 	 	35	 
	SECTION 7.7 Compensation; Expenses
	 	 	35	 
	SECTION 7.8 Indemnity
	 	 	36	 
	SECTION 7.9 Severability
	 	 	36	 
	SECTION 7.10 Headings
	 	 	36	 
	SECTION 7.11 Obligations Secured
	 	 	36	 
	SECTION 7.12 Governing Law
	 	 	37	 
	SECTION 7.13 Consent to Jurisdiction
	 	 	37	 
	SECTION 7.14 Waiver of Jury Trial
	 	 	37	 
	SECTION 7.15 Counterparts
	 	 	37	 
	SECTION 7.16 Effectiveness
	 	 	37	 
	SECTION 7.17 Additional Obligors
	 	 	38	 
	SECTION 7.18 Continuing Nature of this Agreement
	 	 	38	 
	SECTION 7.19 Insolvency
	 	 	38	 
	SECTION 7.20 Rights and Immunities of Secured Debt Representatives
	 	 	38	 
	SECTION 7.21 Perfection of Junior Trust Estate
	 	 	38	 
	 
	 	 	 	 
	ARTICLE 8. CREDIT AGREEMENT PARALLEL DEBT FOR DUTCH AND SWISS SECURITY INTERESTS
	 	 	39	 
	 
	 	 	 	 
	ARTICLE 9. INDENTURE PARALLEL DEBT FOR DUTCH AND SWISS SECURITY INTERESTS
	 	 	40	 

	 	 	 	 	 	 	 
	

	 	Exhibits:	 	 	 	 
	

	 	Exhibit A
	 	Collateral Trust Joinder	 	 

ii

 

          This Collateral Trust Agreement, dated as of December 23, 2003, as amended and restated
as of December 24, 2004 (this “Agreement”), is entered into by and among NRG ENERGY, INC.,
a Delaware corporation (the “Company”), NRG POWER MARKETING INC., a Delaware corporation
(“Power Marketing” and, together with the Company, the “Credit Agreement
Borrowers”), the Guarantors from time to time party hereto, CREDIT SUISSE FIRST BOSTON, as
Administrative Agent (as defined below), LAW DEBENTURE TRUST COMPANY OF NEW YORK, as Trustee (as
defined below), and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Priority Collateral Trustee, Parity
Collateral Trustee and Account Collateral Trustee (each as defined below).

RECITALS

          1. On the Closing Date, the parties thereto entered into the Original Collateral Trust
Agreement. On the Restatement Date, this Agreement will be amended and restated in the form
hereof.

          2. On the Restatement Date, the Credit Agreement Borrowers intend to amend and restate a
Credit Agreement, originally dated as of December 23, 2003, as amended and restated on December 24,
2004 (as amended, restated, supplemented or modified from time to time, the “Credit
Agreement”) among the Credit Agreement Borrowers, the several banks and other financial
institutions or entities from time to time parties thereto as lenders, Credit Suisse First Boston,
and Goldman Sachs Credit Partners L.P., as joint lead book runners and joint lead arrangers (in
such capacities, collectively, the “Arrangers”) and as co-documentation agents, Credit
Suisse First Boston, as administrative agent (in such capacity and together with its successors,
the “Administrative Agent”) and as collateral agent (in such capacity and together with its
successors, the “Collateral Agent”) and Goldman Sachs Credit Partners L.P., as syndication
agent (in such capacity, the “Syndication Agent”), which will provide for a $950,000,000
credit facility to be made available in the form of revolving loans, term loans, swingline loans
and letters of credit to be issued thereunder or to be deposited in the form of credit-linked
deposits thereunder.

          3. The Company has previously issued 8% Second Priority Senior Secured Notes (the
“Notes”) in an aggregate principal amount of $1,725,000,000 pursuant to an Indenture dated
as of December 23, 2003 (as amended, supplemented, replaced or modified from time to time, the
“Indenture”) among the Company, the Guarantors and Law Debenture Trust Company of New York,
as trustee (in such capacity and together with its successors, the “Trustee”).

          4. The Credit Agreement Borrowers and the Guarantors have secured their respective Secured
Obligations (as defined below), including their obligations under the Credit Agreement and any
future Priority Lien Debt, on a priority basis, and, subject to such priority, their obligations
under the Indenture and any future Parity Lien Debt, with security interests in all present and
future Collateral (as defined below) to the extent
that such security interests have been provided for in the applicable Security Documents (as
defined below).

          5. This Agreement sets forth the terms on which each Secured Party appoints Deutsche Bank
Trust Company Americas as its collateral trustee for the present and future

 

 

holders of the Secured
Obligations to receive, hold, maintain, administer and distribute the Collateral at any time
delivered to the collateral trustee or the subject of the Security Documents, and to enforce the
Security Documents and all interests, rights, powers and remedies of the collateral trustee with
respect thereto or thereunder and the proceeds thereof.

          NOW THEREFORE, in consideration of the premises and the mutual agreements herein set forth,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

          ARTICLE 1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION

     SECTION 1.1 Defined Terms.

          (a) The following terms shall have the following meanings:

          “Act of Instructing Debtholders” shall mean, as to any matter at any time, (a) prior
to the Discharge of Priority Lien Obligations, a direction in writing delivered to the Collateral
Trustee by or with the written consent of the Priority Debt Representatives representing the
holders of Priority Lien Debt constituting more than 50% of the sum of (x) the aggregate
outstanding amount of all Priority Lien Debt and (y) the face amount of any outstanding letters of
credit issued under Priority Lien Documents or, if such direction is delivered in respect of any
act other than the enforcement of remedies or the protections of Liens on Collateral, 50% of the
sum of (i) the aggregate outstanding amount of all Priority Lien Debt, (ii) the aggregate undrawn
commitments with respect to all Priority Lien Debt and (iii) the face amount of all outstanding
letters of credit issued under any Priority Lien Document, and (b) at any time after the Discharge
of Priority Lien Obligations, a direction in writing delivered to the Collateral Trustee by or with
the written consent of the Parity Debt Representatives representing the Required Parity
Debtholders. For this purpose, Secured Debt registered in the name of, or beneficially owned by,
the Company or any Affiliate of the Company will be deemed not to be outstanding and neither the
Company nor any such Affiliate shall be entitled to vote to direct the relevant Secured Debt
Representative.

          “Actionable Default” shall mean (a) prior to the Discharge of Priority Lien
Obligations, the occurrence of any event of default under any Priority Lien Document, the result of
which is that (i) the holders of Priority Lien Debt under such Priority Lien Document have the
right to declare all of the Secured Obligations thereunder to be due and payable prior to the
stated maturity thereof or (ii) such Secured Obligations automatically become due and payable prior
to the stated maturity thereof, and (b) at any time after the Discharge of Priority Lien
Obligations, the occurrence of any event of default under any Parity Lien Document, the result of
which is that (x) the holders of
Parity Lien Debt under such Parity Lien Document have the right to declare all of the Secured
Obligations thereunder to be due and payable prior to the stated maturity thereof or (y) such
Secured Obligations automatically become due and payable prior to the stated maturity thereof.

          “Additional Notes” shall mean additional Notes (other than the first $1,250,000,000
aggregate principal amount of Notes issued under the Senior Note Documents on

2

 

December 23, 2003)
issued under the Secured Debt Documents, as part of the same series as such Notes issued on
December 23, 2003.

          “Administrative Agent” shall have the meaning assigned to such term in the recitals.

          “Affiliate” of any specified Person shall mean any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with such specified Person.
For purposes of this definition and the definition of the term “subsidiary”, “control,” as used
with respect to any Person, means 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; provided that beneficial ownership of 10% or
more of the voting stock of a Person will be deemed to be control. For purposes of this definition,
the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

          “Agreement” shall have the meaning assigned to such term in the preamble.

          “Arrangers” shall have the meaning assigned to such term in the recitals.

          “Attributable Debt” in respect of a sale and leaseback transaction shall mean, at the
time of determination, 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 shall be calculated using a discount rate equal to the rate of interest implicit
in such transaction, determined in accordance with GAAP; provided, however, 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.”

          “Bankruptcy Case” shall mean any case under Title 11 of the United States Code or any
comparable foreign law equivalent, or any successor bankruptcy law commenced voluntarily or
involuntarily against the Company or any other Obligor.

          “Board of Directors” shall mean (i) with respect to a corporation, the board of
directors of the corporation or any committee thereof duly authorized to act on behalf of such
board, (ii) with respect to a partnership, the Board of Directors of the general partner of the
partnership, (iii) with respect to a limited liability company, the managing member or members or
any controlling committee of managing members thereof and (iv) with respect to any other Person,
the board or committee of such Person serving a similar function.

          “Business Day” shall mean any day other than a Saturday, Sunday or day on which
commercial banks in New York City are authorized or required by law to close.

          “Capital Lease Obligations” shall mean, at the time any determination is to be made,
the amount of liability in respect of a capital lease that would at that time be required to be
capitalized on a balance sheet in accordance with GAAP, and the stated maturity thereof shall be

3

 

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 Stock” shall mean (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; (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.

          “CERCLA” shall have the meaning assigned to such term in Section 5.14.

          “Class” shall mean all Secured Parties having the same priority. This Agreement
includes two Classes of Secured Parties, the holders of Priority Lien Obligations and the holders
of Parity Lien Obligations.

          “Closing Date” shall mean December 23, 2003.

          “Collateral” shall mean, in the case of each Series of Secured Debt, (i) all
properties and assets of the Company and each applicable Guarantor, now owned or hereafter
acquired, in which Liens have been granted to each of the Priority Collateral Trustee and the
Parity Collateral Trustee and (ii) all Deposit Accounts and Securities Accounts (as defined in the
Guarantee and Collateral Agreement) of the Company and each applicable Guarantor, now owned or
hereafter acquired, in which liens have been granted to the Account Collateral Trustee, in each
case, under any of the Security Documents to secure the Secured Obligations in respect of such
Series of Secured Debt.

          “Collateral Agent” shall have the meaning assigned to such term in the recitals.

          “Collateral Trustee” means each of (i) the Priority Collateral Trustee (as defined in
Section 2.1 herein), (ii) the Parity Collateral Trustee (as defined in Section 2.2 herein), and
(iii) the Account Collateral Trustee (as defined in Section 2.3 herein); provided,
however, that in respect of the Deposit Accounts and the Securities Accounts (as defined in
the Guarantee and Collateral Agreement), “Collateral Trustee” means only the Account Collateral
Trustee.

          “Collateral Trust Joinder” shall mean an agreement substantially in the form of
Exhibit A hereto.

          “Company” shall have the meaning assigned to such term in the preamble.

          “Control Agreement” shall mean a Control Agreement to be executed and delivered by the
applicable Obligor and the other party or parties thereto, as required by the Guarantee and
Collateral Agreement, as the same maybe amended, restated, supplemented or otherwise modified from
time to time.

          “Credit Agreement” shall have the meaning assigned to such term in the recitals.

4

 

          “Credit Agreement Agent” shall mean, at any time and for so long as the Credit
Agreement shall be in effect, the Person serving at such time as the “Administrative Agent” under
the Credit Agreement or any other representative of the Lenders then most recently designated by
the Lenders in accordance with the terms of the Credit Agreement, in a written notice delivered to
each Secured Debt Representative and the Collateral Trustee, as the Credit Agreement Agent for the
purposes of each of the Priority Lien Documents, and, at any time when the Credit Agreement shall
no longer be in effect, the Person serving at such time as the “Agent” or “Administrative Agent”
under the applicable Credit Facility or any other representative of the lenders thereunder then
most recently designated by such lenders in accordance with the terms of the agreement relating to
such facility, in a written notice delivered to each Secured Debt Representative and the Collateral
Trustee, as the Credit Agreement Agent for the purposes of each of the Priority Lien Documents.

          “Credit Agreement Borrowers” shall have the meaning assigned to such term in the
preamble.

          “Credit Agreement Documents” shall mean the Credit Agreement and the Security
Documents.

          “Credit Agreement Parallel Debt” shall have the meaning assigned to such term in
Article 8.

          “Credit Facilities” shall mean, one or more debt facilities (including the Credit
Agreement) or commercial paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, credit-linked deposits (or similar deposits),
receivables financing (including through the sale of receivables to such lenders or to special
purpose entities formed to borrow from such lenders against such receivables) or letters of credit,
in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced (including
by means of sales of debt securities to institutional investors) in whole or in part from time to
time.

          “Credit-Linked Deposit” shall mean the cash deposit made by the Lenders to reimburse
drawings on certain letters of credit issued under the Credit Agreement,
which deposit is held by the Administrative Agent in accordance with the Credit Agreement.

          “Discharge of Priority Lien Obligations” shall mean the occurrence of all of the
following: (i) termination of all commitments to extend credit that would constitute Priority Lien
Debt; (ii) payment in full in cash of the principal of and interest and premium (if any) on all
Priority Lien Debt (other than any undrawn letters of credit); (iii) discharge or cash
collateralization (at 100% of the aggregate undrawn amount) of all outstanding letters of credit
constituting Priority Lien Debt; (iv) return in full in cash of any Credit-Linked Deposits to the
applicable Lenders and (v) payment in full in cash of all other Priority Lien Obligations that are
outstanding and unpaid at the time the Priority Lien Debt is paid in full in cash (other than any
obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in
respect of which no claim or demand for payment has been made at such time).

5

 

          “Dutch Security Documents” shall mean (a) the first priority Deed of Pledge dated
December 24, 2004, among NRG International LLC, as Pledgor, NRGenerating International B.V., as
Company and the Collateral Trustee, as Pledgee, (b) the second priority Deed of Pledge dated
December 24, 2004, among NRG International LLC, as Pledgor, NRGenerating International B.V., as
Company and the Collateral Trustee, as Pledgee, (c) the first priority Deed of Pledge dated
December 24, 2004, among NRGenerating Holdings (No. 21) B.V., as Pledgor, Tosli Acquisition B.V.,
as Company and the Collateral Trustee, as Pledgee, and (d) the second priority Deed of Pledge
dated December 24, 2004, among NRGenerating Holdings (No. 21) B.V., as Pledgor, Tosli Acquisition
B.V., as Company and the Collateral Trustee, as Pledgee.

          “Environmental Laws” shall mean all former, current and future Federal, state, local
and foreign laws (including common law), treaties, regulations, rules, ordinances and codes, and
legally binding decrees, judgments, directives and orders (including consent orders), in each case,
relating to protection of the environment, natural resources, occupational health and safety or the
presence, Release of, or exposure to, Hazardous Materials, or the generation, manufacture,
processing, distribution, use, treatment, storage, transport, recycling or handling of, or the
arrangement for such activities with respect to, Hazardous Materials.

          “Environmental Liability” shall mean all liabilities, obligations, damages, losses,
claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and costs (including
administrative oversight costs, natural resource damages and remediation costs), whether contingent
or otherwise, arising out of or relating to (a) compliance or non-compliance with any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release of any Hazardous
Materials or (e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed, imposed or covered by an indemnity with respect to any of the foregoing.

          “Equally and Ratably” shall mean, in reference to sharing of Liens or proceeds thereof
as between the Secured Parties of the same Class, that such Liens or proceeds:

          (i) shall be allocated and distributed first to each Secured Debt Representative for
each outstanding Series of Secured Debt within that Class, for the account of the holders
of such Series of Secured Debt, ratably in proportion to the principal of (and, in the case
of the Credit Agreement, any Credit-Linked Deposits) and interest and premium (if any) and
reimbursement obligations (contingent or otherwise) with respect to letters of credit, if
any, outstanding (whether or not drawings have been made under such letters of credit) on
each outstanding Series of Secured Debt within that Class when the allocation or
distribution is made, and thereafter

          (ii) shall be allocated and distributed (if any remain after payment in full of all of
the principal of (and, in the case of the Credit Agreement, any Credit-Linked Deposits) and
interest and premium (if any) on all outstanding Secured Obligations within that Class) to
each Secured Debt Representative for each outstanding series of Secured Obligations within
that Class, for the account of the holders of any remaining Secured Obligations within that
Class, ratably in proportion to the aggregate unpaid

6

 

amount of such remaining Secured
Obligations within that Class due and demanded (with written notice to the applicable
Secured Debt Representative and the Collateral Trustee) prior to the date such distribution
is made.

          It is understood and agreed that Liens and proceeds will not be shared between Classes.

          “Equity Interests” shall mean Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is convertible into, or
exchangeable for, Capital Stock).

          “GAAP” shall mean generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board or the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which are in effect from time to time.

          “Guarantee” shall mean 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).

          “Guarantee and Collateral Agreement” shall mean the Guarantee and Collateral Agreement
dated as of December 23, 2003, as amended and restated as of the date hereof, and executed and
delivered by the Company and each Guarantor, as the same may be amended, restated or otherwise
modified from time to time.

          “Guarantors” shall mean, initially, in the case of any Series of Secured Debt,
each Subsidiary party hereto that, pursuant to the terms of the Guarantee and Collateral Agreement,
has provided a Guarantee in respect of the Secured Obligations evidenced by such Series of Secured
Debt and shall include any future Subsidiary required by the terms of any Secured Debt Document to
become a guarantor of the Secured Obligations evidenced thereby, and any successor of the
foregoing.

          “Hazardous Materials” shall mean (a) any petroleum products or byproducts and all
other hydrocarbons, coal ash, coal combustion by-products or waste, boiler slag, scrubber residue,
flue desulfurization material, radon gas, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, chlorofluorocarbons and all other ozone-depleting substances and (b) any
chemical, material, substance or waste that is prohibited, limited or regulated by or pursuant to
any Environmental Law.

          “Hedging Agreement” shall mean any agreement of the type described in clauses (a), (b)
or (c) of the definition of “Hedging Obligations”.

          “Hedging Obligations” shall mean, with respect to any specified Person, the
obligations of such Person under (a) interest rate swap agreements (whether from fixed to

7

 

floating
or from floating to fixed), interest rate cap agreements and interest rate collar agreements; (b)
other agreements or arrangements designed to manage interest rates or interest rate risk; and (c)
other agreements or arrangements designed to protect such Person against fluctuations in currency
exchange rates or commodity prices.

          “Indebtedness” shall mean, with respect to any specified Person, any indebtedness of
such Person (excluding accrued expenses and trade payables), whether or not contingent (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; (d) representing Capital Lease Obligations or Attributable Debt in respect of sale and
leaseback transactions; (e) representing the balance deferred and unpaid of the purchase price of
any property (including trade payables) or services due more than six months after such property is
acquired or such services are completed; or (f) representing the net amount owing under any Hedging
Obligations, if and to the extent any of the preceding items (other than letters of credit,
Attributable Debt and Hedging Obligations) would 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.

          “Indemnified Liabilities” shall mean any and all liabilities (including all
Environmental Liabilities), obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect to
the execution, delivery, performance, administration or enforcement of this Agreement or any
of the other Security Documents, including any of the foregoing relating to the use of proceeds of
any Secured Debt or the violation of, noncompliance with or liability under, any law (including
Environmental Laws) applicable to or enforceable against the Company or any of its subsidiaries or
any of the Collateral and all reasonable costs and expenses (including reasonable fees and expenses
of legal counsel selected by the Indemnitee) incurred by any Indemnitee in connection with any
claim, action, investigation or proceeding in any respect relating to any of the foregoing, whether
or not suit is brought.

          “Indemnitee” shall have the meaning assigned to such term in Section 7.8(a).

          “Indenture” shall have the meaning assigned to such term in the recitals.

          “Indenture Parallel Debt” shall have the meaning assigned to such term in Article 9.

          “Insolvency Proceeding” shall mean:

          (i) any proceeding for the reorganization, recapitalization or adjustment or marshalling
of the assets or liabilities of the Company or any other Obligor, any receivership or
assignment for the benefit of creditors relating to the Company or any other Obligor or any
similar case or proceeding relative to the Company or any other Obligor or its creditors,
as such, in each case whether or not voluntary;

8

 

          (ii) any liquidation, dissolution, marshalling of assets or liabilities or other winding up
of or relating to the Company or any other Obligor, in each case whether or not voluntary
and whether or not involving bankruptcy or insolvency; or

          (iii) any other proceeding of any type or nature in which substantially all claims of
creditors of the Company or any other Obligor are determined and any payment or
distribution is or may be made on account of such claims.

          “Junior Trust Estate” shall have the meaning assigned to such term in Section 2.2.

          “Lenders” shall mean, at any time, the parties to the Credit Agreement then holding
(or committed to provide) loans, letters of credit, Credit-Linked Deposits or other extensions of
credit that constitute (or when provided will constitute) Priority Lien Debt outstanding under the
Credit Agreement.

          “Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust, deed to
secure debt, lien (statutory or otherwise), pledge, hypothecation, encumbrance, restriction,
collateral assignment, charge or security interest in, on or of such asset; (b) the interest of a
vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having substantially the
same economic effect as any of the foregoing) relating to such asset; and (c) in the case of Equity
Interests or debt securities, any purchase option, call or similar right of a third party with
respect to such Equity Interests or debt securities.

          “Note Documents” shall mean the Indenture, the Notes, each Sharing Confirmation and
the Security Documents.

          “Notes” shall have the meaning assigned to such term in the recitals.

          “Notice of Actionable Default” shall mean a written notice given to the Collateral
Trustee stating that an Actionable Default has occurred and is continuing, delivered by (i) prior
to the Discharge of Priority Lien Obligations, the Secured Debt Representative for the holders of
Priority Lien Obligations that are governed by the Secured Debt Document pursuant to which such
Actionable Default has occurred, and (ii) following the Discharge of Priority Lien Obligations, the
Secured Debt Representative for the holders of Parity Lien Obligations that are governed by the
Secured Debt Document pursuant to which such Actionable Default has occurred.

          “Obligations” shall mean any principal (including reimbursement obligations with
respect to letters of credit whether or not any drawing has been made thereon and including, in the
case of the Credit Agreement, any obligations to return Credit-Linked Deposits), interest
(including any interest accruing at the then applicable rate provided in any applicable Secured
Debt Document after the maturity of the loans or notes and reimbursement obligations therein and
interest accruing at the then applicable rate provided in any applicable Secured Debt Document
after the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), penalties, fees, indemnifications, reimbursements, damages and

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other liabilities payable under the documentation governing any Indebtedness or Hedging Agreement.

          “Obligor” shall mean the Company and the applicable Guarantors.

          “Original Collateral Trust Agreement” shall mean this Agreement as in effect
immediately prior to the Restatement Date.

          “Parity Debt Representative” shall mean:

          (i) in the case of the Notes, the Trustee; or

          (ii) in the case of any other Series of Parity Lien Debt, the trustee, agent or
representative of the holders of such Series of Parity Lien Debt who maintains the transfer
register for such Series of Parity Lien Debt and is appointed as a Parity Debt
Representative (for purposes related to the administration of the security documents)
pursuant to the credit agreement, indenture or other agreement governing such Series of
Parity Lien Debt, and who has executed a Collateral Trust Joinder.

          “Parity Lien” shall mean a Lien granted by a Security Document to the Collateral
Trustee upon any property of the Company or any other Obligor to secure Parity Lien Obligations.

          “Parity Lien Debt” shall mean (i) the Notes and (ii) any other Indebtedness (including
Additional Notes) that is secured equally and ratably with the Notes by a Parity Lien that was
permitted to be incurred and so secured under the applicable provisions of the Indenture and the
Credit Agreement (each if then in effect) and any other applicable Secured Debt Document;
provided, in the case of each issue or series of Indebtedness referred to in this clause
(ii), that:

          (a) on or before the date on which such Indebtedness was incurred by the Company such
Indebtedness is designated by the Company, in an officers’ certificate delivered to each
Parity Debt Representative and the Parity Collateral Trustee on or before such date, as
Parity Lien Debt for the purposes of the Indenture (if then in effect) and this Agreement;

          (b) such Indebtedness is governed by an indenture or other agreement that includes a
Sharing Confirmation; and

          (c) all requirements set forth in this Agreement as to the confirmation, grant or
perfection of the Liens granted to the Parity Collateral Trustee, for the benefit of the
Secured Parties, to secure such Indebtedness or Obligations in respect thereof are
satisfied

          (and the satisfaction of such requirements and the other provisions of this clause (ii) shall
be conclusively established, for purposes of entitling the holders of such Indebtedness to share
equally and ratably with the other holders of Parity Lien Debt in the benefits and proceeds of the
Parity Collateral Trustee’s Liens on the Collateral, if the Company delivers to the

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Parity
Collateral Trustee an officers’ certificate stating that such requirements and other provisions
have been satisfied and that such Indebtedness is Parity Lien Debt, together with an opinion of
counsel stating that such officers’ certificate has been duly authorized by the Board of Directors
of the Company and has been duly executed and delivered, and the holders of such Indebtedness and
Obligations in respect thereof will be entitled to rely conclusively thereon).

          “Parity Lien Documents” shall mean, collectively, the Note Documents and any indenture
or agreement governing each other Series of Parity Lien Debt and all agreements binding on any
Obligor related thereto.

          “Parity Lien Obligations” shall mean Parity Lien Debt and all other Obligations in
respect thereof.

          “Parity Lien Secured Parties” shall mean the holders of Parity Lien Obligations and
any Parity Debt Representatives.

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

          “Power Marketing” shall have the meaning assigned to such term in the preamble.

          “Priority Debt Representative” shall mean (i) in the case of the Credit Agreement (and
any Hedging Agreements that are permitted to be incurred by the terms of each Secured Debt Document
and are permitted by the terms of the Priority Lien Documents relating to the Credit Agreement to
be secured Equally and Ratably with the Priority Lien Obligations thereunder), the Administrative
Agent; or (ii) in the case of any other Series of Priority Lien Debt, the trustee, agent or
representative of the holders of such Series of Priority Lien Debt who maintains the transfer
register for such Series of Priority Lien Debt and is appointed as a Priority Debt Representative
(for purposes related to the administration of the security documents) pursuant to the credit
agreement, indenture or other agreement governing such Series of Priority Lien Debt, and who has
executed a Collateral Trust Joinder.

          “Priority Lien” shall mean a Lien granted by a Security Document to the Collateral
Trustee, for the benefit of the Priority Lien Secured Parties, upon any property of the Company or
any other Obligor to secure Priority Lien Obligations.

          “Priority Lien Debt” shall mean (i) the Indebtedness under, together with the
aggregate amount of all Credit-Linked Deposits made pursuant to, the Credit Agreement and (ii)
Indebtedness, including any deposit that is similar to the Credit-Linked Deposits, under any other
Credit Facility that is secured Equally and Ratably with the Indebtedness under the Credit
Agreement by a Priority Lien that was permitted to be incurred and so secured under the applicable
provisions of the Credit Agreement and the Indenture (each if then in effect) and any other
applicable Secured Debt Document, but only if on or before the day on which such Indebtedness under
a Credit Facility described in clause (ii) above is incurred by any applicable Obligor such
Indebtedness is designated by such Obligor, in an officers’ certificate delivered to each Parity
Debt Representative and the Priority Collateral Trustee on or before such date, as

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Priority Lien
Debt for the purposes of each of the Parity Lien Debt Documents and this Agreement.

          “Priority Lien Documents” shall mean, collectively, the Credit Agreement Documents and
the credit agreement, indenture or other agreement governing any other Credit Facility pursuant to
which the Priority Lien Debt is incurred and all other agreements governing, securing or related to
any Priority Lien Obligations.

          “Priority Lien Obligations” shall mean the Priority Lien Debt and all other
Obligations in respect of Priority Lien Debt and includes, in the case of the Credit Agreement and
any other Credit Facility the Indebtedness under which constitutes Priority Lien Debt, any
obligations in respect of Hedging Agreements that are permitted to be incurred by the terms of the
Priority Lien Documents relating to the Credit Agreement or, if the Credit Agreement is not in
effect at the time such Hedging
Agreement is entered into, such other Credit Facilities, and are permitted by the terms of the
Priority Lien Documents relating to the Credit Agreement or, if the Credit Agreement is not in
effect at the time such Hedging Agreement is entered into, such other Credit Facilities to be
secured Equally and Ratably with the Priority Lien Obligations thereunder.

          “Priority Lien Secured Parties” shall mean the holders of Priority Lien Obligations
and any Priority Debt Representatives.

          “Release” shall mean any release, spill, emission, leaking, pumping, injection,
pouring, emptying, deposit, disposal, discharge, dispersal, dumping, escaping, leaching or
migration into or through the environment or within or upon any building, structure, facility or
fixture.

          “Required Parity Debtholders” shall mean, at any time in respect of any action or
matter, holders of a majority in aggregate outstanding principal amount of all Parity Lien Debt
then outstanding, voting together as a single class. For this purpose, Parity Lien Debt registered
in the name of, or beneficially owned by, the Company or any Affiliate of the Company will be
deemed not to be outstanding and neither the Company nor any such Affiliate shall be entitled to
vote to direct the relevant Parity Debt Representative.

          “Responsible Officer” shall mean, with respect to the Collateral Trustee or any
Secured Debt Representative, any officer within the corporate trust department of the Collateral
Trustee or such Secured Debt Representative, as the case may be, including any managing director,
director, vice president, assistant vice president, associate, trust officer or any other officer
of the Collateral Trustee or such Secured Debt Representative, as the case may be, who customarily
performs functions similar to those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred because of such Person’s
knowledge of and familiarity with the particular subject and who shall have direct responsibility
for the administration of this Agreement.

          “Restatement Date” shall mean December 24, 2004.

          “Secured Debt” shall mean Parity Lien Debt and Priority Lien Debt.

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          “Secured Debt Default” shall mean any event or condition which, under the terms of any
credit agreement, indenture or other agreement governing any Series of Secured Debt causes, or
permits holders of Secured Debt outstanding thereunder (with or without the giving of notice or
lapse of time, or both, and whether or not notice has been given or time has lapsed) to cause, the
Secured Debt outstanding thereunder to become immediately due and payable.

          “Secured Debt Documents” shall mean the Parity Lien Documents and the Priority Lien
Documents.

          “Secured Debtholder” shall mean, at any time, a Person which then is the holder of any
Secured Debt (including any Credit-Linked Deposits or similar deposits) or has any commitment with
respect to any Secured Debt or the issuance of any letters of credit under any Secured Debt
Document or the making of any loans under any Secured Debt Document.

          “Secured Debt Representative” shall mean each Parity Debt Representative and each
Priority Debt Representative.

          “Secured Obligations” shall mean the Parity Lien Obligations and the Priority Lien
Obligations.

          “Secured Parties” shall mean the Parity Lien Secured Parties and the Priority Lien
Secured Parties.

          “Security Documents” shall mean this Agreement and one or more security agreements,
pledge agreements, collateral assignments, mortgages, collateral agency agreements, control
agreements, deeds of trust or other grants or transfers for security executed and delivered by the
Company or any other Obligor creating (or purporting to create) a Lien upon Collateral in favor of
either the Priority Collateral Trustee, the Parity Collateral Trustee or the Account Collateral
Trustee, for the benefit of any or all of the Secured Parties, in each case, as amended, modified,
renewed, restated or replaced, in whole or in part, from time to time, in accordance with its
terms.

          “Senior Trust Estate” shall have the meaning assigned to such term in Section 2.1.

          “Series of Parity Lien Debt” shall mean, severally, the Notes and each other issue or
series of Parity Lien Debt for which a single transfer register is maintained.

          “Series of Priority Lien Debt” shall mean, severally, the extensions of credit under
the Credit Agreement and each other issue or series of Priority Lien Debt for which a single
transfer register is maintained and shall include, in the case of the Credit Agreement and any
other Credit Facility the Indebtedness under which constitutes Priority Lien Debt, any obligations
in respect of Hedging Agreements that are permitted to be incurred by the terms of the Priority
Lien Documents relating to the Credit Agreement or, if the Credit Agreement is not in effect at the
time such Hedging Agreement is entered into, such other Credit Facilities, and are permitted by the
terms of the Priority Lien Documents relating to the Credit Agreement or, if the Credit Agreement
is not in effect at the time such Hedging Agreement is entered into, such other Credit Facilities
to be secured Equally and Ratably with the Priority Lien Obligations thereunder

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          “Series of Secured Debt” shall mean, severally, the Notes, each other issue or Series
of Parity Lien Debt, the extensions of credit under the Credit Agreement, and each other issue or
Series of Priority Lien Debt.

          “Sharing Confirmation” shall mean, as to any Series of Parity Lien Debt, the written
agreement of the holders of such Series of Parity Lien Debt, as set forth in the
indenture or other agreement governing such Series of Parity Lien Debt, for the enforceable
benefit of all holders of each other existing and future Series of Parity Lien Debt and each
existing and future Parity Debt Representative, that all Parity Lien Obligations shall be and are
secured Equally and Ratably by all Liens at any time granted by the Company or any other Obligor to
secure any Obligations in respect of such Series of Parity Lien Debt, whether or not upon property
otherwise constituting Collateral, that all such Liens shall be enforceable by the Collateral
Trustee for the benefit of all holders of Parity Lien Obligations Equally and Ratably, and that the
holders of Obligations in respect of such Series of Parity Lien Debt are bound by the provisions in
this Agreement relating to the order of application of proceeds from enforcement of such Liens, and
consent to and direct the Collateral Trustee to perform its obligations under this Agreement.

          “subsidiary” shall mean, with respect to any Person (herein referred to as the
“parent”), any corporation, partnership, limited liability company, association or other
entity (a) of which securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or more than 50% of the general partnership
interests are, at the time any determination is being made, owned, controlled or held, or (b) that
is, at the time any determination is made, otherwise controlled by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

          “Subsidiary” shall mean any subsidiary of the Company.

          “Swiss Security Documents” shall mean (a) the Public Certification regarding the
pledge of the shares in NRG International Holdings GmbH (1st ranking right of pledge) dated
December 24, 2004 between NRG International III Inc., as pledgor and the Collateral Trustee, as
pledgee (b) the Public Certification regarding the pledge of the shares in NRG International
Holdings GmbH (2nd ranking right of pledge) dated December 24, 2004 between NRG International III
Inc., as pledgor and the Collateral Trustee, as pledgee, (c) the Public Certification regarding
the pledge of the shares in NRG International Holdings (No.2) GmbH (1st ranking right of pledge)
dated December 24, 2004 between NRG International III Inc., as pledgor and the Collateral Trustee,
as pledgee, and (d) the Public Certification regarding the pledge of the shares in NRG
International Holdings (No.2) GmbH (2nd ranking right of pledge) dated December 24, 2004 between
NRG International III Inc., as pledgor and the Collateral Trustee, as pledgee.

          “Syndication Agent” shall have the meaning assigned to such term in the recitals.

          “Trustee” shall have the meaning assigned to such term in the recitals.

          “Trust Estates” shall have the meaning assigned to such term in Section 2.2.

          “UCC” shall mean the Uniform Commercial Code as in effect from time to time in the
State of New York or any other applicable jurisdiction.

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          (b) All terms used in this Agreement that are defined in Article 9 of the UCC, and not
otherwise defined herein shall have the meanings therein set forth.

     SECTION 1.2 Rules of Interpretation.

          (a) Any of the terms defined herein may, unless the context otherwise requires, be used in the
singular or the plural, depending on the reference.

          (b) Whenever the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.

          (c) Unless otherwise indicated, any reference to any agreement or instrument shall be deemed
to include a reference to such agreement or instrument as assigned, amended, amended and restated,
supplemented, otherwise modified from time to time or replaced in accordance with the terms of this
Agreement.

          (d) The use in this Agreement or any of the other Security Documents of the word “include” or
“including,” when following any general statement, term or matter, shall not be construed to limit
such statement, term or matter to the specific items or matters set forth immediately following
such word or to similar items or matters, whether or not nonlimiting language (such as “without
limitation” or “but not limited to” or words of similar import) is used with reference thereto, but
rather shall be deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter. The word “will” shall be construed to
have the same meaning and effect as the word “shall.”

          (e) References to “Sections” and “clauses” shall be to Sections and clauses, respectively, of
this Agreement unless otherwise specifically provided.

          (f) References to “Articles” shall be to Articles of this Agreement unless otherwise
specifically provided.

          (g) References to “Exhibits” and “Schedules” shall be to Exhibits and Schedules, respectively,
of this Agreement unless otherwise specifically provided.

          (h) The use in this Agreement of 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.

          (i) This Agreement, the other Security Documents and any documents or instruments delivered
pursuant hereto shall be construed without regard to the identity of the party who drafted the
various provisions of the same. Each and every provision of this Agreement, the other Security
Documents and any instruments and documents entered into and delivered in connection therewith
shall be construed as though the parties participated equally in the drafting of the same.
Consequently, each of the parties
acknowledges and agrees that any rule of construction that a document is to be construed
against the drafting party shall not be applicable either to this Agreement or the other Security
Documents and any instruments and documents entered into and delivered in connection therewith.

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ARTICLE 2. THE TRUST ESTATES

     SECTION 2.1 Appointment of Priority Collateral Trustee and Declaration of Senior 
Trust.

          (a) Appointment of Priority Collateral Trustee. Each of the Priority Lien Secured
Parties hereby appoints Deutsche Bank Trust Company Americas as its collateral trustee for purposes
of obtaining and perfecting a security interest in the Collateral (as defined in the Guarantee and
Collateral Agreement) for the benefit of the Priority Secured Parties. Deutsche Bank Trust Company
Americas accepts such appointment by the Priority Lien Secured Parties as their collateral trustee
(in such capacity, the “Priority Collateral Trustee”).

          (b) TO SECURE the payment of the Priority Lien Obligations and in consideration of the
premises and the mutual agreements set forth herein, each of the Obligors hereby grants to the
Priority Collateral Trustee, and the Priority Collateral Trustee hereby accepts and agrees to hold,
in trust under this Agreement for the benefit of all present and future holders of Priority Lien
Obligations, all of such Obligor’s right, title and interest in, to and under all Collateral
granted to the Priority Collateral Trustee under any Security Document for the benefit of the
Priority Lien Secured Parties, together with all of the Priority Collateral Trustee’s right, title
and interest in, to and under the Security Documents, and all interests, rights, powers and
remedies of the Priority Collateral Trustee thereunder or in respect thereof and all cash and
non-cash proceeds thereof (collectively, the “Senior Trust Estate”),

          TO HAVE AND TO HOLD the Senior Trust Estate unto the Priority Collateral Trustee and its
successors and assigns in trust under this Agreement,

          IN TRUST, NEVERTHELESS, for the benefit solely and exclusively of all present and future
holders of Priority Lien Obligations as security for the payment of all present and future Priority
Lien Obligations,

          PROVIDED, that if at any time (i) all Liens granted by any and all of the Priority
Lien Documents have been released as provided in Section 4.1, (ii) the Priority Collateral Trustee
holds no other property in trust as part of the Senior Trust Estate, (iii) no monetary obligation
(other than indemnification and other contingent obligations not then due and payable) is
outstanding and payable under this Agreement to the Priority Collateral Trustee or any of its
co-trustees, agents or sub-agents (whether in an individual or representative capacity) and (iv)
the Company delivers to the Collateral Trustee an officer’s certificate stating that all Liens of
the Priority Collateral Trustee have been released in compliance with all applicable provisions of
the Priority Lien Documents and that Obligors are not required by any Priority Lien Document to
grant any Lien upon any property to secure the Priority Lien Obligations, then the senior trust
arising hereunder shall terminate, except that, notwithstanding such termination, all provisions
set forth in Sections 7.7 and 7.8 hereof enforceable by the Priority Collateral Trustee or any of
its co-trustees, agents or sub-agents (whether in an individual or representative capacity) shall
remain enforceable in accordance with their terms,

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          AND THE PARTIES FURTHER DECLARE AND COVENANT that the Senior Trust Estate shall be held and
distributed by the Priority Collateral Trustee subject to the further agreements herein.

     SECTION 2.2 Appointment of Parity Collateral Trustee and Declaration of Junior Trust.

          (a) Appointment of Parity Collateral Trustee. Each of the Parity Lien Secured
Parties hereby appoints Deutsche Bank Trust Company Americas as its collateral trust for purposes
of obtaining and perfecting a security interest in the Collateral (as defined in the Guarantee and
Collateral Agreement) for the benefit of the Parity Lien Secured Parties. Deutsche Bank Trust
Company Americas accepts such appointment by the Parity Lien Secured Parties as their collateral
trustee (in such capacity, the “Parity Collateral Trustee”).

          (b) TO SECURE the payment of the Parity Lien Obligations and in consideration of the premises
and the mutual agreements set forth herein, each of the Obligors hereby grants to the Parity
Collateral Trustee, and the Parity Collateral Trustee hereby accepts and agrees to hold, in trust
under this Agreement for the benefit of all present and future holders of Parity Lien Obligations,
all of such Obligor’s right, title and interest in, to and under all Collateral granted to the
Parity Collateral Trustee under any Security Document for the benefit of the Parity Lien Secured
Parties, together with all of the Parity Collateral Trustee’s right, title and interest in, to and
under the Security Documents, and all interests, rights, powers and remedies of the Parity
Collateral Trustee thereunder or in respect thereof and all cash and non-cash proceeds thereof
(collectively, the “Junior Trust Estate”, and together with the Senior Trust Estate, the
“Trust Estates”),

          TO HAVE AND TO HOLD the Junior Trust Estate unto the Parity Collateral Trustee and its
successors and assigns in trust under this Agreement,

          IN TRUST, NEVERTHELESS, for the benefit solely and exclusively of all present and future
holders of Parity Lien Obligations as security for the payment of all present and future Parity
Lien Obligations,

          PROVIDED, that if at any time (i) all Liens granted by any and all of the Parity Lien
Documents have been released as provided in Section 4.1, (ii) the Parity Collateral Trustee holds
no other property in trust as part of the Junior Trust Estate, (iii) no monetary obligation (other
than indemnification and other contingent obligations not then due and payable) is outstanding and
payable under this Agreement to the Collateral Trustee or any of its co-trustees, agents or
sub-agents (whether in an individual or representative capacity) and (iv) the Company delivers to
the Parity Collateral Trustee an officer’s certificate stating that all Liens of the Parity
Collateral Trustee have been released in compliance with all applicable provisions of the Parity
Lien Documents and that the Obligors are not required by any Parity Lien Document to grant any Lien
upon any property to secure the Parity Lien Obligations, then the junior trust arising hereunder
shall terminate, except that, notwithstanding such termination, all provisions set forth
in Sections 7.7 and 7.8 hereof enforceable by the Parity Collateral Trustee or any of its
co-trustees, agents or sub-agents (whether in an individual or representative capacity) shall
remain enforceable in accordance with their terms,

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          AND THE PARTIES FURTHER DECLARE AND COVENANT that the Junior Trust Estate shall be held and
distributed by the Parity Collateral Trustee subject to the further agreements herein.

     SECTION 2.3 Appointment of Account Collateral Trustee.

          Appointment of Account Collateral Trustee. Each of the Priority Lien Secured Parties
and the Parity Lien Secured Parties (i) hereby appoints Deutsche Bank Trust Company Americas as its
collateral trustee for purposes of obtaining and perfecting a security interest in the Deposit
Accounts and the Securities Accounts (as defined in the Guarantee and Collateral Agreement) and all
of the other deposit accounts or securities accounts (each as defined in the UCC) which constitute
collateral described in Section 3 of the Guarantee and Collateral Agreement of any Grantor (as
defined in the Guarantee and Collateral Agreement) maintained by any bank or securities
intermediary (each as defined in the UCC) and (ii) hereby instructs the Account Collateral Trustee
to hold, maintain, control and take enforcement actions with respect to the Deposit Accounts and
Securities Accounts in accordance with the Guarantee and Collateral Agreement and this Agreement.
Deutsche Bank Trust Company Americas hereby accepts such appointment by the Priority Lien Secured
Parties and the Parity Lien Secured Parties as their collateral trustee (in such capacity, the
“Account Collateral Trustee”)

     SECTION 2.4 Priority of Liens.

          (a) Notwithstanding anything else contained herein or in any Security Document, it is the
intent of the parties that: (i) this Agreement and the Security Documents create two separate and
distinct Trust Estates and Liens: the Senior Trust Estate and Lien securing the payment and
performance of the Priority Lien Obligations and the Junior Trust Estate and Lien securing the
payment and performance of the Parity Lien Obligations and (ii) the Liens securing the Parity Lien
Obligations are subject and subordinate to the Liens securing the Priority Lien Obligations.

          (b) The parties hereto agree that, after the date hereof and prior to the Discharge of
Priority Lien Obligations, in no event shall the Parity Debt Representatives or any Parity Lien
Secured Parties have a Lien on or security interest in any Collateral that is not subject and
subordinate to the first priority lien of the Priority Lien Secured Parties. Notwithstanding (i)
anything to the contrary contained in any Parity Lien Document and irrespective of the time, order
or method of attachment or perfection of the security interests created by the Priority Lien
Documents or the Parity Lien Documents, (ii) anything contained in any filing or agreement to which
the Priority Lien Secured Parties or Parity Lien Secured Parties or any other party hereto
may be a party and (iii) the rules for determining priority under the UCC or any other law
governing the relative priorities of secured creditors, any security interest in any Collateral
that is part of the Senior Trust Estate has and shall have priority over any security interest in
such Collateral that is part of the Junior Trust Estate.

          (c) Whether or not any Bankruptcy Case or Insolvency Proceeding has been commenced by or
against any Obligor, until the Discharge of Priority Lien Obligations, (i) the

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Parity Lien Secured
Parties will not (A) exercise or seek to exercise any rights or exercise any remedies with respect
to any Collateral that is subject to the Senior Trust Estate, (B) institute any action or
proceeding with respect to such rights or remedies with respect to any Collateral, including any
action of foreclosure, (C) contest, protest or object to any foreclosure proceeding or action
brought by the Priority Lien Secured Parties or any other exercise by the Priority Lien Secured
Parties of any rights and remedies under any Priority Lien Documents relating to the Collateral
that is subject to the Senior Trust Estate, (D) object to the forbearance by the Priority Lien
Secured Parties to the bringing or pursuing of any foreclosure proceeding or action or any other
exercise of any rights or remedies relating to the Collateral that is subject to the Senior Trust
Estate, (E) take or receive from the Obligors, directly or indirectly, in cash or other property or
by set off or in any other manner, the Collateral or any part thereof or proceeds therefrom in
satisfaction of the Parity Lien Obligations, (F) contest or seek to invalidate any Liens or
security interests securing the Priority Debt Obligations, or the perfection thereof, or the
validity or enforceability of this Agreement, (G) take or permit any action prejudicial to or
inconsistent with the priority position of the Senior Trust Estate over the Junior Trust Estate,
(H) object to any adequate protection or similar relief requested and obtained by the Priority Lien
Secured Parties in any Insolvency Proceeding or Bankruptcy Case with respect to any Obligor or (I)
object to any consent or approval by the Priority Lien Secured Parties to the use of cash or other
Collateral, or any similar relief, in any Insolvency Proceeding or Bankruptcy Case with respect to
any Obligor, and (ii) the Priority Lien Secured Parties shall have the exclusive right to enforce
rights and exercise remedies with respect to any Collateral that is part of the Senior Trust
Estate, regardless of whether such Collateral may also be part of the Junior Trust Estate.
Notwithstanding the foregoing, the Parity Lien Secured Parties may enforce rights, exercise
remedies and take actions (A) without any condition or restriction whatsoever, at any time after
the Discharge of Priority Lien Obligations, (B) as necessary to perfect a Lien upon any Collateral
by any method of perfection except through possession or control or (C) as necessary to prove,
preserve or protect (but not enforce) the Liens securing the Parity Lien Obligations.

          (d) In exercising rights and remedies with respect to the Collateral, the Priority Debt
Representatives may enforce (or refrain from enforcing) the provisions of the Priority Lien
Documents and exercise (or refrain from exercising) remedies thereunder or any such rights and
remedies, all in such order and in such manner as they may determine in the exercise of their sole
and exclusive discretion, including (i) the exercise or forebearance from exercise of all rights
and remedies in respect of the Collateral and/or the Priority Lien Obligations, (ii) the
enforcement or forbearance from enforcement of any Lien in respect of the Collateral, (iii) the
release, with or without consideration, of the Collateral from the Senior Trust Estate, and, in
connection with any such release, the concurrent release, with or without consideration (as
determined by the Priority Lien Secured Parties), of such collateral from the Junior Trust Estate,
(iv) the exercise or forebearance from exercise of rights and powers of a holder of shares of stock
included in the Senior Trust Estate to the extent provided in the
Security Documents, (v) the acceptance of the Collateral in full or partial satisfaction of
the Priority Lien Obligations and (vi) the exercise or forebearance from exercise of all rights and
remedies of a secured lender under the UCC or any similar law of any applicable jurisdiction or in
equity.

          (e) Without in any way limiting the generality of the foregoing paragraphs, the Priority Lien
Secured Parties may, at any time and from time to time, without the consent of

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or notice to the
Parity Lien Secured Parties, without incurring responsibility to the Parity Lien Secured Parties
and without impairing or releasing the subordination provided in this Agreement or the obligations
hereunder of the Parity Lien Secured Parties, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or alter, the Priority
Lien Obligations, or otherwise amend or supplement in any manner the Priority Lien Obligations, or
any instrument evidencing the Priority Lien Obligations or any agreement under which the Priority
Lien Obligations are outstanding, (ii) release any Person or entity liable in any manner for the
collection of the Priority Lien Obligations, (iii) release the Lien on any Collateral securing the
Priority Lien Obligations and (iv) exercise or refrain from exercising any rights against any
Obligor.

          (f) The doctrine of marshalling of assets or collateral or any other legal or equitable
principle or doctrine which could otherwise, in any way, constrain, limit or affect the order or
manner of the enforcement against any Person obligated for the Priority Lien Obligations or the
liquidation of the Senior Trust Estate shall not be applicable to the Senior Trust Estate or to the
rights of the Priority Lien Secured Parties under this Agreement.

     SECTION 2.5 Collateral Shared Equally and Ratably within Class. The parties hereto
agree that the payment and satisfaction of all of the Secured Obligations within each Class shall
be secured Equally and Ratably by each of the security interests established in favor of the
Priority Collateral Trustee and the Parity Collateral Trustee belonging to such Class. It is
understood and agreed that nothing in this Section 2.4 is intended to alter the priorities among
Secured Parties belonging to different Classes as provided in Section 2.3 hereof.

       ARTICLE 3. OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE

     SECTION 3.1  Undertaking of the Collateral Trustee.

          (a) Subject to, and in accordance with, this Agreement, the Collateral Trustee will, as
trustee for the benefit solely and exclusively of the present and future Secured Parties for whom
it is acting:

               (i) accept, enter into, hold, maintain, administer and enforce all Security Documents,
including all Collateral subject thereto, and all security interests created thereunder,
perform its obligations under the Security Documents and protect, exercise and enforce the
interests, rights, powers and remedies granted or available to it under, pursuant to or in
connection with the Security Documents;

               (ii) take all lawful and commercially reasonable actions permitted under the Security
Documents that it may deem necessary or advisable to protect or preserve its interest in the
Collateral subject thereto and such interests, rights, powers and remedies;

               (iii) deliver and receive notices pursuant to the Security Documents;

               (iv) sell, assign, collect, assemble, foreclose on, institute legal proceedings with
respect to, or otherwise exercise or enforce the rights and remedies of a secured party
(including a mortgagee, trust deed beneficiary and insurance beneficiary or

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loss payee) with
respect to the Collateral under the Security Documents and its other interests, rights,
powers and remedies;

               (v) remit as provided in Section 3.4 all cash proceeds received by the Collateral
Trustee from the collection, foreclosure or enforcement of its interest in the Collateral
under the Security Documents or any of its other interests, rights, powers or remedies;

               (vi) execute and deliver amendments to the Security Documents as from time to time
authorized by an Act of Instructing Debtholders; and

               (vii) release any Lien granted to it by any Security Document upon any Collateral if
and as required by Section 4.1(b).

          (b) Each party to this Agreement acknowledges and consents to the undertaking of the
Collateral Trustee set forth in Section 3.1(a) and agrees to each of the other provisions of this
Agreement applicable to it.

          (c) Notwithstanding anything to the contrary contained in this Agreement, the Collateral
Trustee shall not commence any exercise of remedies or any foreclosure actions or otherwise take
any action or proceeding against any of the Collateral (other than actions as necessary to prove,
protect or preserve the Liens securing the Secured Obligations) unless and until it shall have
received a Notice of Actionable Default, or a Responsible Officer of the Collateral Trustee has
actual knowledge that an Actionable Default has occurred and is continuing, and then only in
accordance with the provisions of this Agreement.

     SECTION 3.2 Release or Subordination of Liens. The Collateral Trustee will not
release or subordinate any Lien of the Collateral Trustee or consent to the release or
subordination of any Lien of the Collateral Trustee, except (a) as directed by an Act of
Instructing Debtholders, (b) as required by Article 4, (c) as ordered pursuant to applicable law
under a final and nonappealable order or judgment of a court of competent jurisdiction or (d) for
the subordination of the Junior Trust Estate and the Parity Liens to the Senior Trust Estate and
the Priority Liens.

     SECTION
3.3 Remedies Upon Actionable Default. If the Collateral Trustee at any time
receives a Notice of Actionable Default or other
notice that an Actionable Default has occurred and is continuing, it will promptly deliver written
notice thereof to each Secured Debt Representative. Thereafter, the Collateral Trustee may await
direction by an Act of Instructing Debtholders and will act, or decline to act, as directed by an
Act of Instructing Debtholders, in the exercise and enforcement of the Collateral Trustee’s
interests, rights, powers and remedies in respect of the Collateral or under the Security Documents
or applicable law and, following the initiation of such exercise of remedies, the Collateral
Trustee will act, or decline to act, with respect to the manner of such exercise of remedies as
directed by an Act of Instructing Debtholders. Unless it has been directed to the contrary by an
Act of Instructing Debtholders, the Collateral Trustee in any event may (but shall not be obligated
to) take or refrain from taking such action with respect to any Actionable Default as it may deem
advisable and in the best interest of the holders of Secured Obligations.

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     SECTION 3.4 Application of Proceeds.

          (a) The Collateral Trustee shall apply the proceeds of any collection, sale, foreclosure or
other realization upon any Collateral and the proceeds of any title insurance policy required under
any real property mortgage in the following order of application:

          FIRST, to the payment of all amounts payable under this Agreement on account of the Collateral
Trustee’s fees or any reasonable legal fees, costs and expenses or other liabilities of any kind
incurred by the Collateral Trustee or any co-trustee or agent in connection with any Security
Document, including any amounts payable by the Collateral Trustee, as collateral trustee, to or for
the benefit of persons other than the Secured Debtholders pursuant to the terms thereof;

          SECOND, to the respective Priority Debt Representatives for application to the payment of
Priority Lien Obligations Equally and Ratably, or to be held by the Priority Debt Representatives
pending such application, until all Priority Debt Obligations have been paid in full in cash or the
cash amount held by the Priority Debt Representatives in respect of all Priority Lien Obligations
is sufficient to pay all Priority Lien Obligations in full in cash;

          THIRD, to the respective Parity Debt Representatives for application to the Parity Lien
Obligations entitled to the benefit of such Collateral Equally and Ratably, or to be held by the
Parity Debt Representatives pending such application, until all Parity Lien Obligations have been
paid in full in cash or the cash amount held by the Parity Debt Representatives in respect of all
Parity Lien Obligations is sufficient to pay all Parity Lien Obligations in full in cash; and

          FOURTH, any surplus remaining after the payment in full in cash of all of the Secured
Obligations entitled to the benefit of such Collateral shall be paid to the Company or the other
applicable Obligor, as the case may be, or its successors or assigns, or as a court of competent
jurisdiction may direct.

          For this purpose, “proceeds” of Collateral includes any and all cash, securities and other
property realized from collection, foreclosure or enforcement of the Collateral Trustee’s
Liens upon the Collateral (including distributions of Collateral in satisfaction of any
Secured Obligations).

          (b) If any Parity Debt Representative or any holder of a Parity Lien Obligation collects or
receives any proceeds in respect of the Parity Lien Obligations that should have been applied to
the payment of the Priority Lien Obligations in accordance with clause (a) above and, with respect
to a Parity Debt Representative, a Responsible Officer of such Parity Debt Representative shall
have received written notice, or shall have actual knowledge, of the same prior to such Parity Debt
Representative’s distribution of such proceeds, whether after the commencement of a Bankruptcy Case
or otherwise, such Parity Debt Representative or such holder of a Parity Lien Obligation, as the
case may be, shall forthwith deliver the same to the Collateral Trustee, for the account of the
holders of the Priority Lien Obligations, in the form received, duly indorsed to the Collateral
Trustee, for the account of the holders of the Priority Lien Obligations to be applied in
accordance with clause (a) above. Until so delivered, such proceeds shall be held by such Parity
Debt Representative or such holder of a Parity Lien

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Obligation, as the case may be, for the benefit
of the holders of the Priority Lien Obligations and shall be deemed to be held segregated from
other funds and property held by such Parity Debt Representative or such holder of a Parity Lien
Obligation.

     SECTION 3.5 Powers of the Collateral Trustee.

          (a) The Collateral Trustee is irrevocably authorized and empowered to enter into and perform
its obligations and protect, perfect, exercise and enforce its interest, rights, powers and
remedies under the Security Documents and applicable law and in equity and to act as set forth in
this Article 3 or as requested in any lawful directions given to it from time to time in respect of
any matter by an Act of Instructing Debtholders.

          (b) No Secured Debt Representative, Secured Debtholder or other holder of Secured Obligations
shall have any liability whatsoever for any act or omission of the Collateral Trustee.

     SECTION 3.6 Documents and Communications. The Collateral Trustee will permit each
Secured Debt Representative and each Secured Debtholder upon reasonable written notice from time to
time to inspect and copy, at the cost and expense of the party requesting such copies, any and all
Security Documents and other documents, notices, certificates, instructions or communications
received by the Collateral Trustee in its capacity as such.

     SECTION 3.7 For Sole and Exclusive Benefit of Holders of Secured Obligations. The
Collateral Trustee shall accept, hold, administer and enforce all Liens at any time transferred or
delivered to it and all other interests, rights, powers and remedies at any time granted to or
enforceable by the Collateral Trustee and all other property of the Trust Estates solely and
exclusively for the benefit of the present and future holders of present and
future Secured Obligations, and shall distribute all proceeds received by it in realization
thereon or from enforcement thereof solely and exclusively pursuant to the provisions of Section
3.4.

     SECTION 3.8 Additional Secured Debt.

          (a) The Collateral Trustee will, as trustee hereunder, perform its undertakings set forth in
Section 3.1(a) with respect to each holder of Secured Obligations of a Series of Secured Debt that
is issued or incurred after the date hereof that (i) holds Secured Obligations that are identified
as a holder of Parity Lien Debt or Priority Lien Debt in accordance with the procedures set forth
in Section 3.8(b) and (ii) signs, through its designated Secured Debt Representative identified
pursuant to Section 3.8(b), a Collateral Trust Joinder.

          (b) The Company or other applicable Obligor shall be permitted to designate as additional
Secured Debtholders hereunder each Person who is, or who becomes, the registered holder of Parity
Lien Debt or the holder of Priority Lien Debt incurred by the Company or such other Obligor after
the date of this Agreement in accordance with the terms of the Secured Debt Documents;
provided that for purposes of this Section 3.8, all extensions of credit under the Credit
Agreement (including issuances of letters of credit) shall be deemed to be incurred on the date
hereof so that no such further designation shall be required to be made so that all such extensions
of credit under the Credit Agreement (regardless when made or incurred) shall be deemed Priority
Lien Debt. The Company or other applicable Obligor may effect such

23

 

designation by delivering to
the Collateral Trustee, with copies to each previously identified Secured Debt Representative, each
of the following:

               (i) An officer’s certificate of the Company stating that:

                    (A) the Company or such other Obligor intends to incur additional Secured Debt
(“New Secured Debt”) which shall either be (x) Priority Lien Debt permitted
by each agreement governing Secured Debt to be secured with a Priority Lien on a
pari passu basis with all previously existing Priority Lien Debt and which, when
incurred and after giving pro forma effect to the incurrence of such Priority Lien
Debt and the application of the proceeds therefrom, shall be in an aggregate
principal amount that is permitted by the terms of the Secured Debt Documents or (y)
Parity Lien Debt permitted by each agreement governing Secured Debt to be secured
with a Parity Lien on a pari passu basis with all previously existing Parity Lien
Debt and which, when incurred and after giving pro forma effect to the incurrence of
such Parity Lien Debt and the application of the proceeds therefrom, shall be in an
aggregate principal amount that is permitted by the terms of each Secured Debt
Document; and

                    (B) after giving pro forma effect to the incurrence of such New Secured Debt
and the application of the proceeds therefrom, no Secured Debt Default shall have
occurred and be continuing and, to the best of the signatory’s knowledge after due
inquiry, no event or condition shall have occurred which could reasonably be
expected to result in a Secured Debt Default;

               (ii) evidence that the Company or such other Obligor has duly authorized, executed (if
applicable) and recorded (or caused to be recorded) in each appropriate governmental office
all relevant filings and recordations to ensure that the New Secured Debt is secured by the
Collateral;

               (iii) evidence that the officer’s certificate delivered pursuant to clause (i) above
has been duly authorized by the Board of Directors of the Company and has been duly executed
and delivered; and

               (iv) a written notice specifying the name and address of the Secured Debt
Representative for such series of New Secured Debt for purposes of Section 7.5.

Notwithstanding the foregoing, nothing in this Agreement shall be construed to allow the Company or
any other Obligor to incur additional Indebtedness unless otherwise permitted by the terms of the
Secured Debt Documents.

ARTICLE 4. OBLIGATIONS ENFORCEABLE BY THE COMPANY AND THE GUARANTORS

     SECTION 4.1 Release of Liens.

          (a) The Collateral Trustee’s Liens upon the Collateral will be released:

24

 

               (i) in whole, upon (A) the payment in full and discharge of all outstanding Secured
Debt and all other Secured Obligations that are outstanding, due and payable at the time all
of the Secured Debt is paid in full and discharged, (B) the return in full of all
outstanding Credit-Linked Deposits (or similar deposits) made under all Secured Debt
Documents and (C) the termination or expiration of all commitments to extend credit under
all Secured Debt Documents and the cancellation or termination of all outstanding letters of
credit issued pursuant to any Secured Debt Documents;

               (ii) as to any Collateral that is sold, transferred or otherwise disposed of by the
Company or any other Obligor in a transaction or other circumstance which is not prohibited
by all of the Secured Debt Documents at the time of such sale, transfer or other disposition
or to the extent of the interest sold, transferred or otherwise disposed of; and

               (iii) as to any Collateral other than Collateral being released pursuant to clauses (i)
or (ii) of this Section 4.1(a), if consent to the release of such Collateral has been given
by an Act of Instructing Debtholders; provided that if such Collateral represents
all or substantially all of the Collateral, consent to release of such Collateral has been
given by the requisite percentage or number of holders of each Series of Secured Debt under
the applicable Secured Debt Document, and in each case, such release has become effective in
accordance with such consent.

          (b) The Collateral Trustee agrees for the benefit of the Company and the other Obligors that
if the Collateral Trustee at any time receives:

               (i) an officer’s certificate of the Company stating that (x) such officer has read
Article 4 of this Agreement and understands the provisions and the definitions relating
hereto, (y) such officer has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not the conditions
precedent in this Agreement and all other Secured Debt Documents, if any, relating to the
release of the Collateral have been complied with and (z) in the opinion of such officer,
such conditions precedent, if any, have been complied with;

               (ii) the proposed instrument or instruments releasing such Lien as to such property in
recordable form, if applicable; and

               (iii) the written confirmation of each Priority Debt Representative (or, at any time
after a Discharge of Priority Lien Obligations, each Parity Debt Representative (such
confirmation to be given following receipt of, and based solely on, the officer’s
certificate described in 4.1 (b)(i) above) that, in its view, such release is permitted by
Section 4.1(a) and the respective Secured Debt Documents governing the Secured Obligations
the holders of which such Secured Debt Representative represents,

then the Collateral Trustee will execute (with such acknowledgements and/or notarizations as are
required) and deliver such release to the Company or other applicable Obligor on or before the
later of (x) the date specified in such request for such release and (y) the fifth Business Day
after the date of receipt of the items required by this Section 4.1(b) by the Collateral Trustee.

25

 

          (c) The Collateral Trustee hereby agrees that:

               (i) in the case of any release pursuant to clause (ii) of Section 4.1(a), if the terms
of any such sale, transfer or other disposition require the payment of the purchase price to
be contemporaneous with the delivery of the applicable release, then, at the request of the
Company or other applicable Obligor, the Collateral Trustee shall either be present at the
closing of such transaction or shall deliver the release under customary escrow arrangements
that permit such contemporaneous payment and delivery of the release; and

               (ii) at any time when a Secured Debt Default under a Series of Secured Debt that
constitutes Parity Lien Debt has occurred and is continuing, within one Business Day of the
receipt by it of any Act of Instructing Debtholders pursuant to Section 4.1(a)(iii), the
Collateral Trustee shall deliver a copy of such Act of Instructing Debtholders to each
Secured Debt Representative.

          (d) Each Secured Debt Representative hereby agrees that:

               (i) as soon as reasonably practicable after receipt of an officer’s certificate from
the Company pursuant to Section 4.1(b)(i) it will, to the extent required by such Section,
either provide (x) the written confirmation required by Section 4.1(b)(iii), (y) a written
statement that such release is not permitted by Section 4.1(a) or(z) a request for further
information from the Company reasonably necessary to
determine whether the proposed release is permitted by Section 4.1(a) and after receipt of
such information such Secured Debt Representative will as soon as reasonably practicable
either provide the written confirmation or statement required pursuant to clause (x) or (y),
as applicable; and

               (ii) within one Business Day of the receipt by it of any notice from the Collateral
Trustee pursuant to Section 4.1(c)(ii), such Secured Debt Representative shall deliver a
copy of such notice to each registered holder of the Series of Priority Lien Debt or Series
of Parity Lien Debt for which it acts as Secured Debt Representative.

     SECTION 4.2 Delivery of Copies to Secured Debt Representatives. The Company will
deliver to each Secured Debt Representative a copy of each officer’s certificate delivered to the
Collateral Trustee pursuant to Section 4.1(b), together with copies of all documents delivered to
the Collateral Trustee with such officer’s certificate. The Secured Debt Representatives will not
be obligated to take notice thereof or to act thereon, subject to Section 4.1(d).

     SECTION 4.3 Collateral Trustee not Required to Serve, File or Record. The Collateral
Trustee is not required to serve, file, register or record any instrument releasing or
subordinating its security interest in any Collateral.

ARTICLE 5. IMMUNITIES OF THE COLLATERAL TRUSTEE

     SECTION 5.1 No Implied Duty. The Collateral Trustee will not have any fiduciary
duties nor will it have responsibilities other than those expressly assumed by it in this Agreement
and the other Security Documents. The Collateral Trustee shall not be required to take any

26

 

action
which is contrary to applicable law or any provision of this Agreement or the other Security
Documents.

     SECTION 5.2 Appointment of Agents and Advisors. The Collateral Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder either directly or by or
through agents, attorneys, accountants, appraisers or other experts or advisors selected by it in
good faith as it may reasonably require and shall not be responsible for any misconduct or
negligence on the part of any of them.

     SECTION 5.3 Other Agreements. The Collateral Trustee has accepted and is bound by the
Security Documents executed by the Collateral Trustee as of the date of this Agreement and, as
directed by an Act of Instructing Debtholders, the Collateral Trustee may execute additional
Security Documents delivered to it after the date of this Agreement, provided,
however, that such additional Security Documents do not adversely affect the rights,
privileges, benefits and immunities of the Collateral Trustee. The Collateral Trustee shall not
otherwise be bound by, or be held obligated
by, the provisions of any credit agreement, indenture or other agreement governing Secured
Debt (other than this Agreement and the other Security Documents).

     SECTION 5.4 Solicitation of Instructions.

          (a) The Collateral Trustee may at any time solicit written confirmatory instructions, in the
form of an Act of Instructing Debtholders or an order of a court of competent jurisdiction, as to
any action which it may be requested or required to take, or which it may propose to take, in the
performance of any of its obligations under this Agreement.

          (b) No written direction given to the Collateral Trustee by an Act of Instructing Debtholders,
which in the sole judgment of the Collateral Trustee imposes, purports to impose or might
reasonably be expected to impose upon the Collateral Trustee any obligation or liability not set
forth in or arising under this Agreement and the other Security Documents shall be binding upon the
Collateral Trustee unless the Collateral Trustee elects, at its sole option, to accept such
direction.

     SECTION 5.5 Limitation of Liability. The Collateral Trustee shall not be responsible
or liable for any action taken or omitted to be taken by it hereunder or under any other Security
Document, except for its own gross negligence, bad faith or willful misconduct as determined by a
court of competent jurisdiction.

     SECTION 5.6 Documents in Satisfactory Form. The Collateral Trustee shall be entitled
to require that all agreements, certificates, opinions, instruments and other documents at any time
submitted to it, including those expressly provided for in this Agreement, be delivered to it in a
form and with substantive provisions reasonably satisfactory to it.

     SECTION 5.7 Entitled to Rely. The Collateral Trustee may conclusively rely upon any
certificate, notice or other document (including any facsimile) reasonably believed by it to be
genuine and correct and to have been signed or sent by or on behalf of the proper Person or persons
and need not investigate any fact or matter stated in any such document. The Collateral Trustee
may seek and rely upon any judicial order or judgment, upon any advice, opinion or statement of
legal counsel, independent consultants and other experts selected by it in good faith

27

 

and upon any
certification, instruction, notice or other writing delivered to it by the Company or any other
Obligor in compliance with the provisions of this Agreement or delivered to it by any Secured Debt
Representative as to the Secured Debtholders for whom it acts, without being required to determine
the authenticity thereof or the correctness of any fact stated therein or the propriety or validity
of service thereof. The Collateral Trustee may act in reliance upon any instrument comporting with
the provisions of this Agreement or any signature reasonably believed by it to be genuine and may
assume that any Person purporting to give notice or receipt or advice or
make any statement or execute any document in connection with the provisions hereof has been
duly authorized to do so. To the extent an officer’s certificate or an opinion of counsel is
required or permitted under this Agreement to be delivered to the Collateral Trustee in respect of
any matter, the Collateral Trustee may rely conclusively on such officer’s certificate or opinion
of counsel as to such matter.

     SECTION 5.8 Secured Debt Default. The Collateral Trustee shall not be required to
inquire as to the occurrence or absence of any Secured Debt Default and shall not be affected by or
required to act upon any notice or knowledge as to the occurrence of any Secured Debt Default
unless and until it receives a Notice of Actionable Default or a Responsible Officer of the
Collateral Trustee has actual knowledge that an Actionable Default has occurred and is continuing.

     SECTION 5.9 Actions by Collateral Trustee. As to any matter not expressly provided
for by this Agreement, the Collateral Trustee shall act or refrain from acting as directed by an
Act of Instructing Debtholders and shall be fully protected if it does so.

     SECTION 5.10 Security or Indemnity in favor of the Collateral Trustee. The Collateral
Trustee shall not be required to advance or expend any funds or otherwise incur any financial
liability in the performance of its duties or the exercise of its powers or rights hereunder unless
it has been provided with security or indemnity reasonably satisfactory to it against any and all
liability or expense which may be incurred by it by reason of taking or continuing to take such
action.

     SECTION 5.11 Rights of the Collateral Trustee. In the event there is any bona fide,
good faith disagreement between the other parties to this Agreement or any of the other Security
Documents resulting in adverse claims being made in connection with Collateral held by the
Collateral Trustee and the terms of this Agreement or any of the other Security Documents do not
unambiguously mandate the action the Collateral Trustee is to take or not to take in connection
therewith under the circumstances then existing, or the Collateral Trustee is in doubt as to what
action it is required to take or not to take hereunder, it shall be entitled to refrain from taking
any action (and shall incur no liability for doing so) until directed otherwise in writing by a
request signed jointly by the parties hereto entitled to give such direction or by order of a court
of competent jurisdiction.

     SECTION 5.12 Limitations on Duty of Collateral Trustee in Respect of Collateral.

          (a) Beyond the exercise of reasonable care in the custody of Collateral in its possession, the
Collateral Trustee shall have no duty as to any Collateral in its possession or control or in the
possession or control of any agent or bailee or any income thereon or as to

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preservation of rights
against prior parties or any other rights pertaining thereto and the
Collateral Trustee shall not be responsible for filing any financing or continuation
statements or recording any documents or instruments in any public office at any time or times or
otherwise perfecting or maintaining the perfection of any security interest in the Collateral. The
Collateral Trustee shall be deemed to have exercised reasonable care in the custody of the
Collateral in its possession if the Collateral is accorded treatment substantially equal to that
which it accords its own property, and the Collateral Trustee shall not be liable or responsible
for any loss or diminution in the value of any of the Collateral by reason of the act or omission
of any carrier, forwarding agency or other agent or bailee selected by the Collateral Trustee in
good faith.

          (b) The Collateral Trustee shall not be responsible for the existence, genuineness or value of
any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in
any of the Collateral, whether impaired by operation of law or by reason of any action or omission
to act on its part hereunder, except to the extent such action or omission constitutes gross
negligence, bad faith or willful misconduct on the part of the Collateral Trustee, for the validity
or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity
of the title of any Obligor to the Collateral, for insuring the Collateral or for the payment of
taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the
Collateral. The Collateral Trustee hereby disclaims any representation or warranty to the present
and future holders of the Secured Obligations concerning the perfection of the Liens and security
interests granted hereunder or in the value of any of the Collateral.

     SECTION 5.13 Assumption of Rights, Not Assumption of Duties. Notwithstanding anything
to the contrary contained herein, (a) each of the parties thereto shall remain liable under each of
the Security Documents (other than this Agreement) to the extent set forth therein to perform all
of their respective duties and obligations thereunder to the same extent as if this Agreement had
not be executed, (b) the exercise by the Collateral Trustee of any of its rights, remedies or
powers hereunder shall not release such parties from any of their respective duties or obligations
under the other Security Documents and (c) the Collateral Trustee shall not be obligated to perform
any of the obligations or duties of any of the parties thereunder other than the Collateral
Trustee.

     SECTION 5.14 No Liability for Clean Up of Hazardous Materials. In the event that the
Collateral Trustee is required to acquire title to an asset for any reason, or take any managerial
action of any kind in regard thereto, in order to carry out any fiduciary or trust obligation for
the benefit of another, which in the Collateral Trustee’s sole discretion may cause the Collateral
Trustee to be considered an “owner or operator” under the provisions of the Comprehensive
Environmental Response Cleanup and Liability Act or any similar Environmental Laws (collectively,
“CERCLA”) or otherwise cause the Collateral Trustee to incur, or be exposed to, any
Environmental Liability or any liability under CERCLA or any other federal, state or local law, the
Collateral Trustee reserves the right, instead of taking such action, either to resign as
Collateral Trustee or to arrange for the transfer of the title or control of the asset to a court
appointed receiver. The Collateral Trustee shall not be liable to any Person for any Environmental
Liability or any environmental claims or contribution actions under any federal, state or local
law, rule or regulation by reason of the Collateral Trustee’s actions and

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conduct as authorized, empowered and directed hereunder or relating to the discharge, Release
or threatened Release of Hazardous Materials into the environment.

ARTICLE 6. RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE

     SECTION 6.1 Resignation or Removal of Collateral Trustee. Subject to the appointment
of a successor Collateral Trustee as provided in Section 6.2 and the acceptance of such appointment
by the successor Collateral Trustee, (a) the Collateral Trustee may resign at any time by giving
not less than 30 days’ notice of resignation to each Secured Debt Representative and the Company
and (b) the Collateral Trustee may be removed at any time, with or without cause, by an Act of
Instructing Debtholders.

     SECTION 6.2 Appointment of Successor Collateral Trustee. Upon any such resignation or
removal, a successor Collateral Trustee may be appointed by an Act of Instructing Debtholders. If
no successor Collateral Trustee shall have been so appointed and shall have accepted such
appointment within 30 days after the predecessor Collateral Trustee gave notice of resignation or
was removed, the retiring Collateral Trustee may (at the expense of the Company), at its option,
appoint a successor Collateral Trustee, or petition a court of competent jurisdiction for
appointment of a successor Collateral Trustee, which shall be a bank or trust company (a)
authorized to exercise corporate trust powers, (b) having a combined capital and surplus of at
least $500,000,000 and (c) maintaining an office in New York, New York. The Collateral Trustee
shall fulfill its obligations hereunder until a successor Collateral Trustee meeting the
requirements of this Section 6.2 has accepted its appointment as Collateral Trustee and the
provisions of Section 6.3 have been satisfied.

     SECTION 6.3 Succession. When the Person so appointed as successor Collateral Trustee
accepts such appointment:

          (a) such Person shall succeed to and become vested with all the rights, powers, privileges and
duties of the predecessor Collateral Trustee, and the predecessor Collateral Trustee shall be
discharged from its duties and obligations hereunder, and

          (b) the predecessor Collateral Trustee shall promptly transfer all Liens and collateral
security and other property of the Trust Estates within its possession or control to the possession
or control of the successor Collateral Trustee and shall execute instruments and assignments as may
be necessary or desirable or reasonably requested by the successor Collateral Trustee to transfer
to the successor Collateral Trustee all Liens, interests, rights, powers and remedies of the
predecessor Collateral Trustee in respect of the Security Documents or the Trust Estates.

Thereafter the predecessor Collateral Trustee shall remain entitled to enforce the immunities
granted to it in Article 5 and the provisions of Sections 7.7 and 7.8.

ARTICLE 7. MISCELLANEOUS PROVISIONS

     SECTION 7.1 Amendment.

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          (a) No amendment or supplement to the provisions of this Agreement or any other Security
Document (to which the Collateral Trustee is a party) will be effective without the approval of the
Collateral Trustee acting as directed by an Act of Instructing Debtholders, except that:

               (i) any amendment or supplement that has the effect solely of adding or maintaining
Collateral, securing additional Secured Debt that was otherwise permitted by the terms of
the Secured Debt Documents to be secured by the Collateral or preserving or perfecting the
Liens thereon or the rights of the Collateral Trustee therein will become effective when
executed and delivered by the Company or any other applicable Obligor party thereto and the
Collateral Trustee;

               (ii) no amendment or supplement that reduces, impairs or adversely affects the right of
any Secured Debtholder (A) to vote its outstanding Secured Debt as to any matter described
as subject to an Act of Instructing Debtholders (or amends the provisions of this clause
(ii) or the definition of “Act of Instructing Debtholders” or “Actionable Default”), (B) to
share in the order of application described in Section 3.4 in the proceeds of enforcement of
or realization on any Collateral, in each case that has not been released in accordance with
the provisions described in Section 4.1 or (C) to require that Liens securing Secured
Obligations be released only as set forth in the provisions described in Section 4.1 shall
become effective without the consent of the requisite percentage or number of holders of
each Series of Secured Debt so affected under the applicable Secured Debt Document;

               (iii) no amendment or supplement that imposes any obligation upon the Collateral
Trustee or any Secured Debt Representative or adversely affects the rights of the Collateral
Trustee or any Secured Debt Representative, respectively, in its capacity as such shall
become effective without the consent of the Collateral Trustee or such Secured Debt
Representative, respectively; and

               (iv) any amendment or supplement that has the effect solely of adding a parallel debt
hereunder in respect of any future Series of Secured Debt that shall become entitled to the
benefits of this Agreement, which is in form substantially the same as the Credit Agreement
Parallel Debt and the Indenture Parallel Debt contained herein, will become effective when
executed and delivered by the Company or any other applicable Obligor party thereto, the
applicable Secured Debt Representative with respect to such future Series of Secured Debt
and the Collateral Trustee.

The Collateral Trustee shall not enter into any such amendment or supplement unless it shall have
received an officer’s certificate of the Company to the effect that such amendment or supplement
will not result in a breach of any provision or covenant contained in any of the Secured Debt
Documents. Prior to executing any amendment or supplement pursuant to this Section 7.1, the
Collateral Trustee shall be entitled to receive an opinion of counsel of the
Company to the effect that the execution of such document is authorized or permitted hereunder, and
with respect to amendments adding Collateral, an opinion of counsel of the Company addressing
customary perfection, and if such additional Collateral consists of equity interests of any Person,
priority, matters with respect to such additional Collateral. Notwithstanding the

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foregoing, any
amendment, supplement or other agreement regarding the provisions of the Security Documents that
releases Collateral will be effective only in accordance with the requirements set forth in Section
4.1.

          (b) The Collateral Trustee, acting as directed by an Act of Instructing Debtholders, and the
Obligors may, at any time and from time to time, without the consent of any Parity Lien Secured
Parties, enter into amendments or other written agreements supplemental to any Security Document
that is a Priority Lien Document for the purpose of adding to, or deleting from, or waiving or
consenting to any departures from any provisions of, any Security Document that is a Priority Lien
Document or changing in any manner the rights of the holders of the Priority Lien Secured Parties
or the Obligors thereunder. Any amendment or waiver of, or any consent under, any provision of any
Priority Lien Document that is a Security Document (except to the extent that such amendment,
waiver or consent, would have the effect of releasing Collateral from the Junior Trust Estate not
in accordance with Section 4.1) shall apply automatically to any comparable provision of any
comparable Parity Lien Document without the consent of or notice to any Parity Lien Secured Parties
and without any action by any Obligor or any Parity Lien Secured Parties. The Company shall
promptly notify the Parity Lien Secured Parties of any amendment or waiver of, or any consent
under, any provision of any Priority Lien Document that is a Security Document that applies
automatically to any comparable provision of any comparable Parity Lien Document, which notice
shall include a copy of such amendment, waiver or consent, as applicable, provided that the failure
to give such notice shall not affect the validity of such amendment or waiver of, or consent under,
the Priority Lien Documents.

          (c) Without an Act of Instructing Debtholders, no Parity Lien Document that is a Security
Document (but that is not also a Priority Lien Document) may be amended, supplemented or otherwise
modified or entered into to the extent such amendment, supplement or modification, or the terms of
any new Parity Lien Document that is a Security Document, would be inconsistent with any of the
terms of the Priority Lien Documents or this Agreement. The Parity Lien Secured Parties agree that
each Parity Lien Document that is a Security Document (but that is not also a Priority Lien
Document) shall include the following language:

          “Notwithstanding anything herein to the contrary, the lien and security interest granted to
the Collateral Trustee pursuant to this Agreement and the exercise of any right or remedy by such
Collateral Trustee hereunder are subject to the provisions of the Collateral Trust Agreement dated
as of December 23, 2003, as amended and restated as of December 24, 2004 (the “Collateral Trust
Agreement”) among Credit Suisse First Boston, as Administrative Agent, the Collateral Trustee,
Law Debenture Trust Company of New York, as Trustee, NRG Energy, Inc. and NRG Power Marketing Inc.,
as the Credit Agreement Borrowers, and the other Guarantors party thereto (as amended, restated,
supplemented or modified from time to time). In the event of any conflict between the terms of the
Collateral Trust Agreement and this Agreement, the terms of the Collateral Trust Agreement shall
govern.”

; provided, however, that if the jurisdiction in which any such Parity Lien
Document shall be filed prohibits the inclusion of the language above or would prevent a document
containing such language to be recorded of record, the Parity Debt Representatives and the Priority
Debt Representatives agree, prior to such Parity Lien Document being entered into, to negotiate in

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good faith replacement language stating that the lien and security interest granted under such
Parity Lien Document is subject to the provisions of this Agreement.

     SECTION 7.2 Further Assurances The Company and each of the other Obligors shall do or
cause to be done all acts and things which may be required, or which the Collateral Trustee from
time to time may reasonably request, to assure and confirm that the Collateral Trustee holds, for
the benefit of the holders of the applicable Secured Obligations, duly created and enforceable and
except, with respect to any Series of Secured Debt, to the extent not required to be perfected by
the Secured Debt Documents relating to such Series of Secured Debt, perfected Liens upon the
Collateral, including after-acquired Collateral and any property or assets which become Collateral
pursuant to the definition thereof after the date hereof, subject, in the case of Parity Lien
Obligations with respect to the Collateral that secures such Parity Lien Obligations, only to the
Priority Liens and those Liens that arise by operation of law and are not voluntarily granted, in
each case as contemplated by the Secured Debt Documents.

          Upon the reasonable request of the Collateral Trustee at any time and from time to time, the
Company and each of the other Obligors shall promptly execute, acknowledge and deliver such
security documents, instruments, certificates, notices and other documents, and take such other
actions as shall be reasonably required, or that the Collateral Trustee may reasonably request, to
create, perfect, protect, assure or enforce the Liens and benefits intended to be conferred, in
each case as contemplated by the Secured Debt Documents for the benefit of the holders of Secured
Obligations.

     SECTION 7.3 Successors and Assigns.

          (a) Except as provided in Section 5.2, the Collateral Trustee may not, in its capacity as
such, delegate any of its duties or assign any of its rights hereunder, and any attempted
delegation or assignment of any such duties or rights shall be null and void. All obligations of
the Collateral Trustee hereunder shall inure to the sole and exclusive benefit of, and be
enforceable by, each Secured Debt Representative and each present and future holder of Secured
Obligations, each of whom shall be entitled to enforce this Agreement as a third party beneficiary
hereof, and all of their respective successors and assigns.

          (b) Neither the Company nor any other Obligor may delegate any of its duties or assign any of
its rights hereunder, and any attempted delegation or assignment of any such duties or rights shall
be null and void. All obligations of the Company and the other Obligors hereunder shall inure to
the sole and exclusive benefit of, and be enforceable by, the Collateral Trustee, each Secured Debt
Representative and each present and future holder of Secured
Obligations, each of whom shall be entitled to enforce this Agreement as a third party
beneficiary hereof, and all of their respective successors and assigns.

     SECTION 7.4 Delay and Waiver. No failure to exercise, no course of dealing with
respect to the exercise of, and no delay in exercising, any right, power or remedy arising under
this Agreement or any of the other Security Documents shall impair any such right, power or remedy
or operate as a waiver thereof. No single or partial exercise of any such right, power or remedy
shall preclude any other or future exercise thereof or the exercise of any other right,

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power or
remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law.

     SECTION 7.5 Notices. Any communications, including notices and instructions, between
the parties hereto or notices provided herein to be given may be given to the following addresses:

	 	 	 	 	 
	 

	 	If to the Collateral Trustee:
	 	Deutsche Bank Trust Company Americas
	

	 	 	 	60 Wall Street, 27th Floor
	

	 	 	 	Mail Stop: NYC60-2710
	

	 	 	 	New York, NY 10005
	

	 	 	 	Attention: Annie Jaghatspanyan

	

	 	 	 	Fax:    (212) 797-8614
	 
	 	 	 	 
	

	 	If to the Company or any other Obligor:	 	 
	

	 	 	 	NRG Energy, Inc.
	

	 	 	 	211 Carnegie Center
	

	 	 	 	Princeton, NJ 08540
	

	 	 	 	Attention: Treasurer, Chief Financial
	

	 	 	 	Officer and General Counsel
	

	 	 	 	Fax:    (609) 524-4501
	 
	 	 	 	 
	

	 	If to the Administrative Agent:
	 	Credit Suisse First Boston
	

	 	 	 	Eleven Madison Avenue
	

	 	 	 	New York, NY 10010
	

	 	 	 	Attention: Julia Kingsbury
	

	 	 	 	Fax:    (212) 325-8304
	 
	 	 	 	 
	

	 	If to the Trustee:
	 	Law Debenture Trust Company of New York
	

	 	 	 	767 Third Avenue, 31st Floor
	

	 	 	 	New York, NY 10017
	

	 	 	 	Attention: Estelle Lawrence
	

	 	 	 	Fax:    (212) 750-1361

and if to any other Secured Debt Representative, to such address as it may specify by written
notice to the parties named above.

          Each notice hereunder shall be in writing and may be personally served or sent by facsimile or
United States mail or courier service and shall be deemed to have been given when delivered in
Person or by courier service and signed for against receipt thereof, upon receipt of facsimile, or
three business days after depositing it in the United States mail with postage prepaid and properly
addressed. Each party may change its address for notice hereunder to any other location within the
continental United States by giving written notice thereof to the other parties as set forth in
this Section 7.5.

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          Promptly following any Discharge of Priority Lien Obligation each Priority Debt Representative
with respect to each applicable Series of Priority Lien Debt that is so discharged shall provide
written notice of such discharge to the Collateral Trustee and to each other Secured Debt
Representative.

     SECTION 7.6 Entire Agreement. This Agreement states the complete agreement of the
parties relating to the undertaking of the Collateral Trustee set forth herein and supersedes all
oral negotiations and prior writings in respect of such undertaking.

     SECTION 7.7 Compensation; Expenses.

          The Obligors jointly and severally agree to pay, promptly upon demand:

          (a) such compensation to the Collateral Trustee and its agents, co-agents and sub-agents as
the Company and the Collateral Trustee shall agree in writing from time to time;

          (b) all reasonable costs and expenses incurred in the preparation, execution, delivery,
filing, recordation, administration or enforcement of this Agreement or any other Security Document
or any consent, amendment, waiver or other modification relating thereto;

          (c) all reasonable fees, expenses and disbursements of legal counsel and any auditors,
accountants, consultants or appraisers or other professional advisors and agents engaged by the
Collateral Trustee or any Secured Debt Representative incurred in connection with the negotiation,
preparation, closing, administration, performance or enforcement of this Agreement and the other
Security Documents or any consent, amendment, waiver or other modification relating thereto and any
other document or matter requested by the Company;

          (d) all reasonable costs and expenses of creating, perfecting, releasing or enforcing the
Collateral Trustee’s security interests in the Collateral, including filing and recording fees,
expenses and taxes, stamp or documentary taxes, search fees, and title insurance premiums;

          (e) all other reasonable costs and expenses incurred by the Collateral Trustee or any Secured
Debt Representative in connection with the negotiation, preparation and execution of the Security
Documents and any consents, amendments, waivers or other
modifications thereto and the transactions contemplated thereby or the exercise of rights or
performance of obligations by the Collateral Trustee thereunder; and

          (f) after the occurrence of any Secured Debt Default, all costs and expenses incurred by the
Collateral Trustee or any Secured Debt Representative in connection with the preservation,
collection, foreclosure or enforcement of the Collateral subject to the Security Documents or any
interest, right, power or remedy of the Collateral Trustee or in connection with the collection or
enforcement of any of the Secured Obligations or the proof, protection, administration or
resolution of any claim based upon the Secured Obligations in any Bankruptcy Case or Insolvency
Proceeding, including all fees and disbursements of attorneys, accountants, auditors, consultants,
appraisers and other professionals engaged by the Collateral Trustee or the Secured Debt
Representatives.

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The agreements in this Section 7.7 shall survive repayment of all other Secured Obligations and the
removal or resignation of the Collateral Trustee.

     SECTION 7.8 Indemnity.

          (a) The Obligors jointly and severally agree to defend, indemnify, pay and hold harmless the
Collateral Trustee, each Secured Debt Representative, each Secured Debtholder and each of their
respective Affiliates and each and all of the directors, officers, partners, trustees, employees,
attorneys and agents, and (in each case) their respective heirs, representatives, successors and
assigns (each of the foregoing, an “Indemnitee”) from and against any and all Indemnified
Liabilities; provided, no Indemnitee shall be entitled to indemnification hereunder with
respect to any Indemnified Liability to the extent such Indemnified Liability is found by a final
and nonappealable decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee.

          (b) All amounts due under Section 7.8(a) shall be payable upon demand.

          (c) To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth
in Section 7.8(a) may be unenforceable in whole or in part because they are violative of any law or
public policy, each of the Obligors shall contribute the maximum portion that it is permitted to
pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.

          (d) No Obligor shall ever assert any claim against any Indemnitee, on any theory of liability,
for any lost profits or special, indirect or consequential damages or (to the fullest extent a
claim for punitive damages may lawfully be waived) any punitive damages arising out of, in
connection with, or as a result of, this Agreement or any other Secured Debt Document or any
agreement or instrument or transaction contemplated hereby or relating in any respect to any
Indemnified Liability, and each of the Obligors hereby forever waives, releases and agrees not to
sue upon any claim for any such lost profits or special, indirect, consequential or (to the fullest
extent lawful) punitive damages, whether or not accrued and whether or not known or suspected to
exist in its favor.

          (e) The agreements in this Section 7.8 shall survive repayment of all other Secured
Obligations and the removal or resignation of the Collateral Trustee.

     SECTION 7.9 Severability. If any provision of this Agreement is invalid, illegal or
unenforceable in any respect or in any jurisdiction, the validity, legality and enforceability of
such provision in all other respects and of all remaining provisions, and of such provision in all
other jurisdictions, shall not in any way be affected or impaired thereby.

     SECTION 7.10 Headings. Section headings herein are included herein for convenience of
reference only and shall not constitute a part hereof for any other purpose or be given any
substantive effect.

     SECTION 7.11 Obligations Secured. All obligations of the Obligors set forth in or
arising under this Agreement shall be Secured Obligations and are secured by all Liens granted by
the Security Documents.

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     SECTION 7.12 Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and shall be construed and enforced in accordance with, the
laws of the State of New York without regard to conflicts of law principles.

     SECTION 7.13 Consent to Jurisdiction. All judicial proceedings brought against any
party hereto arising out of or relating to this Agreement or any of the other Security Documents
may be brought in any state or federal court of competent jurisdiction in the State, County and
City of New York. By executing and delivering this Agreement, each Obligor, for itself and in
connection with its properties, irrevocably (a) accepts generally and unconditionally the
nonexclusive jurisdiction and venue of such courts, (b) waives any defense of forum non conveniens,
(c) agrees that service of all process in any such proceeding in any such court may be made by
registered or certified mail, return receipt requested, to such party at its address provided in
accordance with Section 7.5, (d) agrees that service as provided in clause (c) above is sufficient
to confer personal jurisdiction over such party in any such proceeding in any such court and
otherwise constitutes effective and binding service in every respect and (e) agrees each party
hereto retains the right to serve process in any other manner permitted by law or to bring
proceedings against any party in the courts of any other jurisdiction.

     SECTION 7.14 Waiver of Jury Trial. Each party hereto hereby agrees to waive its
respective rights to a jury trial of any claim or cause of action based upon or arising under this
Agreement or any of the other Security Documents or any dealings between them relating to the
subject matter of this Agreement or the intents and purposes of the other Security Documents. The
scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this Agreement and the other Security Documents,
including contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material inducement to
enter into a business relationship, that each party hereto has already relied on this waiver in
entering into this Agreement, and that each party hereto will continue to rely on this waiver in
its related future dealings. Each party hereto further warrants and represents that it has
reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. This waiver is irrevocable, meaning that
it may not be modified either orally or in writing (other than by a mutual written waiver
specifically referring to this Section 7.14 and executed by each of the parties hereto), and this
waiver shall apply to any subsequent amendments, renewals, supplements or modifications of or to
this Agreement or any of the other Security Documents or to any other documents or agreements
relating thereto. In the event of litigation, this Agreement may be filed as a written consent to
a trial by the court.

     SECTION 7.15 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument.

     SECTION 7.16 Effectiveness. This Agreement shall become effective upon the execution
of a counterpart hereof by each of the parties hereto and receipt by each party of written
notification of such execution and written or telephonic authorization of delivery thereof.

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     SECTION 7.17 Additional Obligors. The Company shall cause each Subsidiary that
becomes an Obligor or is required by any Secured Debt Document to become a party to this Agreement
to become a party to this Agreement, for all purposes of this Agreement, by causing such subsidiary
to execute and deliver to the parties hereto a Collateral Trust Joinder, whereupon such subsidiary
shall be bound by the terms hereof to the same extent as if it had executed and delivered this
Agreement as of the date hereof. The Company agrees to provide each Secured Debt Representative
with a copy of each Collateral Trust Joinder executed and delivered pursuant to this Section.

     SECTION 7.18 Continuing Nature of this Agreement. This Agreement, including the
subordination provisions hereof, shall be reinstated if at any time any payment or distribution in
respect of any of the Priority Lien Obligations is rescinded or must otherwise be returned in an
Insolvency Proceeding or a Bankruptcy Case or otherwise by any of the Priority Lien Secured Parties
or any representative of any such party (whether by demand, settlement, litigation or otherwise).
In the event that all or any part of a payment or distribution made with respect to the Priority
Lien Obligations is recovered from any of the Priority Lien Secured Parties in an Insolvency
Proceeding or a Bankruptcy Case or otherwise (and whether by demand, settlement, litigation or
otherwise), any payment or distribution received by any of the Parity Lien Secured Parties with
respect to the Parity Lien Obligations from the proceeds of any Collateral or any title insurance policy
required by any real property mortgage at any time after the date of the payment or distribution
that is so recovered, whether pursuant to a right of subrogation or otherwise, shall be deemed to
have been received by the Parity Lien Secured Parties in trust as property for the Priority Lien
Secured Parties and the Parity Lien Secured Parties shall forthwith deliver such payment or
distribution to the Collateral Trustee, for the benefit of the Priority Lien Secured Parties, for
application to the Priority Lien Obligations until such Priority Lien Obligations shall have been
paid in full in cash and all commitments in respect of Priority Lien Obligations shall have been
terminated.

     SECTION 7.19 Insolvency. This Agreement shall be applicable both before and after the
commencement of any Insolvency Proceeding or Bankruptcy Case by or against any Obligor. The
relative rights, as provided for in this Agreement, shall continue after the commencement of any
such Insolvency Proceeding or Bankruptcy Case on the same basis as prior to the date of the
commencement of any such case, as provided in this Agreement.

     SECTION 7.20 Rights and Immunities of Secured Debt Representatives. The
Administrative Agent shall be entitled to all of the rights, protections, immunities and
indemnities set forth in the Credit Agreement, the Trustee shall be entitled to all of the rights,
protections, immunities and indemnities set forth in the Indenture and any future Secured Debt
Representative shall be entitled to all of the rights, protections, immunities and indemnities set
forth in the credit agreement, indenture or other agreement governing the applicable Secured Debt
with respect to which such Person shall act as representative, in each case as if specifically set
forth herein. In no event shall any Secured Debt Representative be liable for any act or omission
on the part of the Obligors or the Collateral Trustee hereunder.

     SECTION 7.21 Perfection of Junior Trust Estate. Solely for purposes of perfecting the
Lien of the Parity Collateral Trustee in its capacity as agent of the holders of Parity Lien
Obligations and the Parity Lien Representatives in any portion of the Junior Trust Estate or

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Collateral (as defined in the Guaranty and Collateral Agreement) in the possession of the Priority
Collateral Trustee (or its agents or bailees) as part of the Senior Trust Estate including, without
limitation, any instruments, goods, negotiable documents, tangible chattel paper, certificated
securities or money, the Priority Collateral Trustee, the holders of Priority Lien Obligations and
the Priority Lien Representatives hereby acknowledge that the Priority Collateral Trustee also
holds and/or takes possession of such property (including, without limitation, for purposes of
Sections 8-301 and 9-313 of the UCC) for the benefit of the Parity Collateral Trustee for the
benefit of the holders of Parity Lien Obligations and the Parity Lien Representatives.

ARTICLE 8. CREDIT AGREEMENT PARALLEL DEBT FOR DUTCH AND SWISS SECURITY INTERESTS

          Without prejudice to the provisions of the Credit Agreement, and for the purpose of ensuring
and preserving the validity and continuity of the security interests granted and to be granted
under or pursuant to the Dutch Security Documents and the Swiss Security Documents,
the Credit Agreement Borrowers hereby irrevocably and unconditionally undertake to pay to the
Collateral Trustee amounts equal to and in the currency of the total amount of the Secured
Obligations (as defined in the Credit Agreement), which from time to time are due in accordance
with and under the same terms and conditions as each of the Secured Obligations (such payment
undertakings and the obligations and liabilities which are the result thereof hereinafter referred
to as the “Credit Agreement Parallel Debt”).

          The Credit Agreement Borrowers and the Collateral Trustee acknowledge that (i) for this
purpose the Credit Agreement Parallel Debt constitutes undertakings, obligations and liabilities of
the Credit Agreement Borrowers to the Collateral Trustee which are separate and independent from,
and without prejudice to, the corresponding Secured Obligations which exist between the Credit
Agreement Borrowers and the Secured Parties (as defined in the Credit Agreement) and (ii) the
Credit Agreement Parallel Debt represents the Collateral Trustee’s own claims (vorderingen op naam)
(Forderung in eigenem Namen) to receive payment of the Credit Agreement Parallel Debt, provided
that the total amount of the Credit Agreement Parallel Debt shall never exceed the total amount of
the Secured Obligations.

          Every payment of monies made by the Credit Agreement Borrowers or the applicable Guarantors to
the Administrative Agent (as defined in the Credit Agreement) regarding the Credit Agreement shall,
conditionally upon such payment not subsequently being voided or reduced by virtue of any
provisions or enactments relating to bankruptcy, insolvency, liquidation or similar laws of general
application, be in satisfaction pro tanto of the covenant by the Credit Agreement Borrowers
contained in the first paragraph of this Article 8, provided that, if any such payment as is
mentioned above is subsequently voided or reduced by virtue of any provisions or enactments
relating to bankruptcy, insolvency, liquidation or similar laws of general application, the
Collateral Trustee shall be entitled to receive a corresponding amount as Credit Agreement Parallel
Debt under the first paragraph under this Article 8 from the Credit Agreement Borrowers and the
Credit Agreement Borrowers shall remain liable to satisfy such Credit Agreement Parallel Debt and
such Credit Agreement Parallel Debt shall be deemed not to have been discharged.

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          Subject to the provisions of the first paragraph of this Article 8, but notwithstanding any of
the other provisions of this Article 8:

          (a) the total amount due and payable as Credit Agreement Parallel Debt under this Article 8
shall be decreased to the extent the Credit Agreement Borrowers or the applicable Guarantors shall
have paid any amounts to the Secured Parties or any of them to reduce the outstanding Secured
Obligations or any of the Secured Parties otherwise receives any amount in payment of the Secured
Obligations; and

          (b) to the extent that the Credit Agreement Borrowers or the applicable Guarantors shall have
paid any amounts to the Collateral Trustee under the Credit Agreement Parallel Debt or the
Collateral Trustee otherwise shall have received monies in payment of the Credit Agreement Parallel
Debt, the total amount due and payable under the Secured Obligations shall be decreased as if said
amounts were received directly in payment of the Secured Obligations.

          For the avoidance of doubt, in the event that the Credit Agreement Borrowers are in default in
respect of the Secured Obligations, as set forth in the Credit Agreement, the Credit Agreement
Borrowers shall, at the same time, be deemed in default in respect of their obligations under the
Credit Agreement Parallel Debt.

ARTICLE 9. INDENTURE PARALLEL DEBT FOR DUTCH AND SWISS SECURITY INTERESTS

          Without prejudice to the provisions of the Indenture, and for the purpose of ensuring and
preserving the validity and continuity of the security interests granted under or pursuant to the
Dutch Security Documents and the Swiss Security Documents, the Company hereby irrevocably and
unconditionally undertakes to pay to the Collateral Trustee amounts equal to and in the currency of
the total amount of the Parity Lien Obligations in respect of the Notes, which from time to time
are due in accordance with and under the same terms and conditions as each of the Notes and the
Indenture (such payment undertakings and the obligations and liabilities which are the result
thereof hereinafter referred to as the “Indenture Parallel Debt”).

          The Company and the Collateral Trustee acknowledge that (i) for this purpose the Indenture
Parallel Debt constitutes undertakings, obligations and liabilities of the Company to the
Collateral Trustee which are separate and independent from, and without prejudice to, the
corresponding Parity Lien Obligations in respect of the Notes that are issued by the Company to the
holders of the Notes and (ii) that the Indenture Parallel Debt represents the Collateral Trustee’s
own claims (vorderingen op naam) (Forderung in eigenem Namen) to receive payment of the Indenture
Parallel Debt, provided that the total amount of the Indenture Parallel Debt shall never exceed the
total amount of the Parity Lien Obligations in respect of the Notes.

          Every payment of monies made by the Company or the applicable Guarantors to the Trustee
regarding the Parity Lien Obligations in respect of the Notes shall, conditionally upon such
payment not subsequently being voided or reduced by virtue of any provisions or enactments relating
to bankruptcy, insolvency, liquidation or similar laws of general application,

40

 

be in satisfaction
pro tanto of the covenant by the Company contained in the first paragraph of this Article 9,
provided that, if any such payment as is mentioned above is subsequently voided or reduced by
virtue of any provisions or enactments relating to bankruptcy, insolvency, liquidation or similar
laws of general application, the Collateral Trustee shall be entitled to receive a corresponding
amount as Indenture Parallel Debt under the first paragraph of this Article 9 from the Company and
the Company shall remain liable to satisfy such Indenture Parallel Debt and such Indenture Parallel
Debt shall be deemed not to have been discharged.

          Subject to the provision in the first paragraph in this Article 9, but notwithstanding any of
the other provisions of this Article 9:

          (a) the total amount due and payable as Indenture Parallel Debt under this Article 9 shall be
decreased to the extent the Company or the applicable Guarantors shall have paid any amounts to the
holders or any of them to reduce the outstanding Parity Lien Obligations in respect of the Notes or
any of the holders otherwise receives any amount in payment of the Parity Lien Obligations in
respect of the Notes; and

          (b) to the extent that the Company shall have paid any amounts to the Collateral Trustee under
the Indenture Parallel Debt or the Collateral Trustee otherwise shall have received monies in
payment of the Indenture Parallel Debt, the total amount due and payable under the Parity Lien
Obligations in respect of the Notes shall be decreased as if said amounts were received directly in
payment of the Parity Lien Obligations in respect of the Notes.

          For the avoidance of doubt, in the event that the Company is in default in respect of the
Parity Lien Obligations in respect of the Notes, as set forth in the Indenture, the Company shall,
at the same time, be deemed in default in respect of its obligations under the Indenture Parallel
Debt.

[ Remainder of page intentionally left blank ]

41

 

          IN WITNESS WHEREOF, the parties hereto have caused this Collateral Trust Agreement to be
executed by their respective officers or representatives hereunto duly authorized as of the day and
year first above written.

	 	 	 	 	 	 	 
	 	 	The Borrowers:
	 
	 	 	 	 	 	 
	 	 	NRG ENERGY, INC.,
	 
	 	 	 	 	 	 
	 	 	By:	 	 	/s/   George P. Schaefer
	 	 	 	 	 
	

	 	 	 	Name:
	 	George P. Schaefer
	

	 	 	 	Title:
	 	Treasurer
	 
	 	 	 	 	 	 
	 	 	NRG POWER MARKETING INC.,
	 
	 	 	 	 	 	 
	 	 	By:	 	 	/s/   George P. Schaefer
	 	 	 	 	 
	

	 	 	 	Name:
	 	George P. Schaefer
	

	 	 	 	Title:
	 	Treasurer

(signatures continue on next page)

42

 

	 	 	 
	

	 	The Guarantors:
	 
	 	 
	

	 	ARTHUR KILL POWER LLC
	

	 	ASTORIA GAS TURBINE POWER LLC
	

	 	BERRIANS I GAS TURBINE POWER LLC
	

	 	BIG CAJUN II UNIT 4 LLC
	

	 	CAMAS POWER BOILER, INC.
	

	 	CAPISTRANO COGENERATION COMPANY
	

	 	CHICKAHOMINY RIVER ENERGY CORP.
	

	 	COMMONWEALTH ATLANTIC POWER LLC
	

	 	CONEMAUGH POWER LLC
	

	 	CONNECTICUT JET POWER LLC
	

	 	DEVON POWER LLC
	

	 	DUNKIRK POWER LLC
	

	 	EASTERN SIERRA ENERGY COMPANY
	

	 	EL SEGUNDO POWER II LLC
	

	 	ENERGY NATIONAL, INC.
	

	 	ENIFUND, INC.
	

	 	ENIGEN, INC.
	

	 	ESOCO MOLOKAI, INC.
	

	 	ESOCO, INC.
	

	 	GRANITE II HOLDING, LLC
	

	 	HANOVER ENERGY COMPANY
	

	 	HUNTLEY POWER LLC
	

	 	INDIAN RIVER ROPERATIONS INC.
	

	 	INDIAN RIVER POWER LLC
	

	 	JAMES RIVER POWER LLC
	

	 	KEYSTONE POWER LLC
	

	 	LOUISIANA GENERATING LLC
	

	 	LS POWER MANAGEMENT LLC
	

	 	MERIDEN GAS TURBINES LLC
	

	 	MIDATLANTIC GENERATION HOLDING LLC
	

	 	MIDDLETOWN POWER LLC
	

	 	MONTVILLE POWER LLC
	 
	 	 
	

	 	Executing this Agreement on behalf of and so as to
bind each of the persons named above under the
caption “The Guarantors”

	 	 	 	 	 	 	 
	 	 	By:	 	       /s/   George Schaefer
	 	 	 	 	 
	

	 	 	 	Name:
	 	George Schaefer
	

	 	 	 	Title:
	 	Treasurer

(signatures continue on next page)

43

 

	 	 	 
	

	 	The Guarantors:
	 
	 	 
	

	 	NEO CALIFORNIA POWER LLC
	

	 	NEO CHESTER-GEN LLC
	

	 	NEO CORPORATION
	

	 	NEO FREEHOLD-GEN LLC
	

	 	NEO LANDFILL GAS HOLDINGS INC.
	

	 	NEO POWER SERVICES, INC.
	

	 	NEO-MONTAUK GENCO MANAGEMENT LLC
	

	 	NORTHEAST GENERATION HOLDINGS LLC
	

	 	NORWALK POWER LLC
	

	 	NRG AFFILIATE SERVICES INC.
	

	 	NRG ARTHUR KILL OPERATIONS, INC.
	

	 	NRG ASIA-PACIFIC, LTD.
	

	 	NRG ASTORIA GAS TURBINE OPERATIONS INC.
	

	 	NRG BAYOU COVE LLC
	

	 	NRG BRAZOS VALLEY GP LLC
	

	 	NRG BRAZOS VALLEY LP LLC
	

	 	NRG BOURBONNAISE EQUIPMENT LLC
	

	 	NRG BOURBONAISE LLC
	

	 	NRG CALIFORNIA PEAKER OPERATIONS LLC
	

	 	NRG CABRILLO POWER OPERATIONS INC.
	

	 	NRG CADILLAC OPERATIONS INC.
	

	 	NRG CENTRAL U.S. LLC
	

	 	NRG COMLEASE LLC
	

	 	NRG CONNECTICUT AFFILIATE SERVICES INC.
	 
	 	 
	

	 	Executing this Agreement on behalf of and so as to
bind each of the persons named above under the
caption “The Guarantors”

	 	 	 	 	 	 	 
	 	 	By:	 	          /s/   George Schaefer
	 	 	 	 	 
	

	 	 	 	Name:
	 	George Schaefer
	

	 	 	 	Title:
	 	Treasurer

(signatures continue on next page)

44

 

	 	 	 
	

	 	The Guarantors:
	 
	

	 	NRG DEVELOPMENT COMPANY INC.
	

	 	NRG DEVON OPERATIONS INC.
	

	 	NRG DUNKIRK OPERATIONS INC.
	

	 	NRG EASTERN LLC
	

	 	NRG EL SEGUNDO OPERATIONS INC.
	

	 	NRG ENERGY JACKSON VALLEY I, INC.
	

	 	NRG ENERGY JACKSON VALLEY II, INC.
	

	 	NRG GRANITE ACQUISITIONS LLC
	

	 	NRG HUNTLEY OPERATIONS INC.
	

	 	NRG ILION LP LLC
	

	 	NRG INTERNATIONAL LLC
	

	 	NRG INTERNATIONAL III, INC.
	

	 	NRG KAUFMAN LLC
	

	 	NRG LATIN AMERICA INC.
	

	 	NRG MARKETING SERVICES LLC
	

	 	NRG MESQUITE LLC
	

	 	NRG MEXTRANS INC.
	

	 	NRG MIDATLANTIC AFFILIATE SERVICES INC.
	

	 	NRG MIDATLANTIC GENERATING LLC
	

	 	NRG MIDATLANTIC LLC
	

	 	NRG MIDDLETOWN OPERATIONS INC.
	

	 	NRG MONTVILLE OPERATIONS INC.
	

	 	NRG NEW JERSEY ENERGY SALES LLC
	

	 	NRG NEW ROADS HOLDINGS LLC
	

	 	NRG NORTH CENTRAL OPERATIONS INC.
	

	 	NRG NORTHEAST AFFILIATE SERVICES, INC.
	

	 	NRG NORTHEAST GENERATING LLC
	

	 	NRG NORWALK HARBOR OPERATIONS INC.
	

	 	NRG OPERATING SERVICES, INC.
	

	 	NRG OSWEGO HARBOR POWER OPERATIONS INC.
	

	 	NRG PACGEN INC.
	

	 	NRG PROCESSING SOLUTIONS LLC.
	 
	

	 	Executing this Agreement on behalf of and so as to
bind each of the persons named above under the
caption “The Guarantors”

	 	 	 	 	 	 	 
	 	 	By:	 	           /s/   George Schaefer
	 	 	 	 	 
	

	 	 	 	Name:
	 	George Schaefer
	

	 	 	 	Title:
	 	Treasurer

(signatures continue on next page)

45

 

	 	 	 
	

	 	The Guarantors:
	 
	 	 
	

	 	NRG ROCKFORD ACQUISITION LLC
	

	 	NRG ROCKFORD EQUIPMENT LLC
	

	 	NRG ROCKY ROAD LLC
	

	 	NRG SAGUARO OPERATIONS INC.
	

	 	NRG SERVICES CORPORATION
	

	 	NRG SOUTH CENTRAL AFFILIATE SERVICES INC.
	

	 	NRG SOUTH CENTRAL GENERATING LLC
	

	 	NRG SOUTH CENTRAL OPERATIONS INC.
	

	 	NRG TELOGIA POWER LLC
	

	 	NRG WEST COAST LLC
	

	 	NRG WESTERN AFFILIATE SERVICES INC.
	

	 	O’BRIEN COGENERATION, INC.II
	

	 	ONSITE ENERGY, INC.
	

	 	OSWEGO HARBOR POWER LLC
	

	 	PACIFIC CROCKETT HOLDINGS, INC.
	

	 	PACIFIC GENERATION COMPANY
	

	 	PACIFIC GENERATION HOLDINGS COMPANY
	

	 	PACIFIC-MT. POSO CORPORATION
	

	 	SAGUARO POWER LLC
	

	 	SAN JOAQUIN VALLEY ENERGY I, INC.
	

	 	SAN JOAQUIN VALLEY ENERGY IV, INC.
	

	 	SOMERSET OPERATIONS INC.
	

	 	SOMERSET POWER LLC
	

	 	SOUTH CENTRAL GENERATION HOLDING LLC
	

	 	TACOMA ENERGY RECOVERY COMPANY
	

	 	TELOGIA POWER INC.
	

	 	VIENNA OPERATIONS INC.
	

	 	VIENNA POWER LLC.
	 
	 	 
	

	 	Executing this Agreement on behalf of and so as to
bind each of the persons named above under the
caption “The Guarantors”

	 	 	 	 	 	 	 
	 	 	By:	 	            /s/   George Schaefer
	 	 	 	 	 
	

	 	 	 	Name:
	 	George Schaefer
	

	 	 	 	Title:
	 	Treasurer

(signatures continue on next page)

46

 

	 	 	 	 	 	 	 
	 	 	GRANITE POWER PARTNERS II, L.P.
	 
	 	 	 	 	 	 
	 	 	By:	 	NRG Granite Acquisition LLC
	 	 	Its:	 	General Partner
	 
	 	 	 	 	 	 
	 	 	By:	 	        /s/   George Schaefer
	 	 	 	 	 
	

	 	 	 	Name:
	 	George Schaefer
	

	 	 	 	Title:
	 	Treasurer
	 
	 	 	 	 	 	 
	 	 	KAUFMAN COGEN LP
	 
	 	 	 	 	 	 
	 	 	By:	 	NRG Kaufman LLC
	 	 	Its:	 	General Partner
	 
	 	 	 	 	 	 
	 	 	By:	 	        /s/   George Schaefer
	 	 	 	 	 
	

	 	 	 	Name:
	 	George Schaefer
	

	 	 	 	Title:
	 	Treasurer
	 
	 	 	 	 	 	 
	 	 	NRG ILION LIMITED PARTNERSHIP
	 
	 	 	 	 	 	 
	 	 	By:	 	NRG Rockford Acquisition LLC
	 	 	Its:	 	General Partner
	 
	 	 	 	 	 	 
	 	 	By:	 	        
 /s/   George Schaefer
	 	 	 	 	 
	

	 	 	 	Name:
	 	George Schaefer
	

	 	 	 	Title:
	 	Treasurer
	 
	 	 	 	 	 	 
	 	 	NRGENERATING HOLDINGS (NO. 21) B.V.
	 
	 	 	 	 	 	 
	 	 	By:	 	        /s/   Robert Henry
	 	 	 	 	 
	

	 	 	 	Name:
	 	Robert Henry
	

	 	 	 	Title:
	 	Director

(signatures continue on next page)

47

 

	 	 	 	 	 	 	 
	 	 	DEUTSCHE BANK TRUST COMPANY
	 	 	AMERICAS, as Collateral Trustee
	 
	 	 	 	 	 	 
	 	 	By:	 	        /s/  Richard L. Buckwalter
	 	 	 	 	 
	

	 	 	 	Name:
	 	Richard L. Buckwalter
	

	 	 	 	Title:
	 	Vice President
	 
	 	 	 	 	 	 
	 	 	By:	 	        /s/  Irina Golovashchuk
	 	 	 	 	 
	

	 	 	 	Name:
	 	Irina Golovashchuk
	

	 	 	 	Title:
	 	Associate

(signatures continue on next page)

48

 

	 	 	 	 	 	 	 
	 	 	CREDIT SUISSE FIRST BOSTON,
	 	 	acting through its Cayman Islands Branch, as the

Administrative Agent
	 
	 	 	 	 	 	 
	 	 	By:	 	        /s/  Jay Chall
	 	 	 	 	 
	

	 	 	 	Name:
	 	Jay Chall
	

	 	 	 	Title:
	 	Director
	 
	 	 	 	 	 	 
	 	 	By:	 	        /s/  Denise L. Alvarez
	 	 	 	 	 
	

	 	 	 	Name:
	 	Denise L. Alvarez
	

	 	 	 	Title:
	 	Associate

49

 

 

Exhibit A to

Collateral Trust Agreement

Collateral Trust Joinder

          The undersigned,                                        , a                                         , hereby agrees to become party as
[ an Obligor ] [ a Parity Debt Representative ] [ a
Priority Debt Representative ] under the Collateral Trust Agreement dated as of December
23, 2003 (as amended and restated as of December 24, 2004 and as amended, restated, supplemented or
otherwise modified from time to time), by and among NRG Energy, Inc., a Delaware corporation, NRG
Power Marketing Inc., Credit Suisse First Boston, as Administrative Agent under the Credit
Agreement (as defined therein), Law Debenture Company of New York, as Trustee under the Indenture
(as defined therein), and Deutsche Bank Trust Company Americas, as Collateral Trustee, for all
purposes thereof on the terms set forth therein, and to be bound by the terms of said Collateral
Trust Agreement as fully as if the undersigned had executed and delivered said Collateral Trust
Agreement as of the date thereof.

          The provisions of Article 7 of said Collateral Trust Agreement shall apply with like effect to
this Joinder.

          IN WITNESS WHEREOF, the undersigned has executed and delivered this Joinder as of
                                        , 20                    .

	 	 	 	 	 
	 	 	[                                                                                                                          ]
	 
	 	 	 	 
	

	 	By:
	 	                                                                                                    
	

	 	 	 	Name:
	

	 	 	 	Title:exv10w28

 

EXHIBIT 10.28

EXECUTION COPY

RAILROAD CAR FULL SERVICE MASTER LEASING AGREEMENT

GENERAL ELECTRIC RAILCAR

SERVICES CORPORATION

and

NRG POWER MARKETING INC.

Dated: February 18,
2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page No.	 
	1.
	 	Lease	 	 	2	 
	2.
	 	Delivery	 	 	2	 
	3.
	 	Inspection; Acceptance	 	 	2	 
	4.
	 	Rent	 	 	2	 
	5.
	 	Use, Location and Possession	 	 	3	 
	6.
	 	Railroad Charges	 	 	4	 
	7.
	 	Repairs; Maintenance	 	 	4	 
	8.
	 	Casualty Car(s)	 	 	6	 
	9.
	 	Renewal	 	 	7	 
	10.
	 	Return Conditions	 	 	7	 
	11.
	 	Representations and Warranties of Lessee	 	 	7	 
	12.
	 	Representations and Warranties of Lessor	 	 	10	 
	13.
	 	Insurance	 	 	12	 
	14.
	 	Financial Covenants	 	 	12	 
	15.
	 	Closing Conditions	 	 	13	 
	16.
	 	Taxes	 	 	16	 
	17.
	 	Indemnity	 	 	17	 
	18.
	 	Transfer or Assignment of Interest; Subleasing; Restrictions on Liens	 	 	20	 
	19.
	 	Default	 	 	21	 
	20.
	 	Mandated Modifications	 	 	24	 
	21.
	 	Substitution of Car(s)	 	 	24	 
	22.
	 	Transaction Expenses	 	 	24	 
	23.
	 	Notice	 	 	25	 
	24.
	 	Exclusion of Warranties	 	 	25	 
	25.
	 	Entire Agreement;
Counterparts; Severability	 	 	26	 
	26.
	 	Compliance with Laws	 	 	26	 
	27.
	 	Applicable Law	 	 	26	 
	28.
	 	Survival	 	 	26	 
	29.
	 	Financial Statements; Reports; Insurance Certificate Grant of Security Interest; Further Assurances	 	 	27	 
	30.
	 	Definitions and Rules of Construction	 	 	28	 
	31.
	 	True Lease	 	 	30	 

Schedule I            Pricing Assumptions

 

 

GENERAL ELECTRIC RAILCAR SERVICES CORPORATION

RAILROAD CAR FULL SERVICE MASTER LEASING AGREEMENT

     This Railroad Car Full Service Master Leasing Agreement (“Agreement”) is made
effective as of February 18, 2005 (the “Closing Date”), between General Electric Railcar Services
Corporation, a Delaware corporation (“Lessor”), and NRG Power Marketing Inc., a
Delaware corporation (“Lessee”).

1. Lease. Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor, the
railroad
car(s) described in one or more riders (the “Rider(s)”) (the “Car(s)”) subject to this Agreement.
Lessor shall purchase the Cars from the manufacturer or supplier (“Seller”) and lease the Cars to
Lessee if Lessor receives a fully executed Rider for the applicable Cars including all schedules,
annexes, and attachments thereto. Each Rider includes the number of Car(s), the commodities
the Lessee may carry, the rental rate, term of use, Car numbers and other pertinent information
that may be desired by both parties. If the terms of this Agreement and a Rider conflict, the
terms of such Rider govern. Each Rider, together with the provisions of this Agreement
incorporated therein, shall constitute a separate lease (each, a “Lease”). Once a Rider is signed,
Lessee may not cancel the Rider except as provided therein.

2. Delivery. Lessor will deliver the Car(s) to Lessee at the Delivery Location(s) specified
in the
applicable Rider. Lessor’s obligation to deliver is subject to delays beyond its control. Lessee
will use the Car(s) exclusively in its own service, unless otherwise herein provided.

3. Inspection; Acceptance. Lessee shall have the right but not the obligation to inspect
each of
the Cars at the Delivery Location prior to acceptance under a Rider. Lessee’s acceptance of each
Car under a Rider will be deemed to have occurred upon the execution and delivery by Lessee of
the applicable Rider. The date of delivery of a Car to Lessee subject to a Rider shall be the
“Delivery Date” for such Car.

4. Rent.

	 	A.  	Upon presentment by Lessor of an invoice, Lessee will pay rent for each of the
Car(s) (in amounts and in installments as set forth in the applicable Rider) from the
Delivery Date until such Car is returned to Lessor in accordance with the applicable
Lease. Lessee’s obligation to pay rent on each Car will terminate on the later of the
expiration date of the applicable Rider or the day after the Car arrives at a location
within 100 miles of the BNSF route running from the Powder River Basin to Chicago,
Illinois or St. Louis, Missouri or as otherwise agreed between Lessor and Lessee in
the condition required hereunder. Each rent payment must be paid in advance; provided,
that rent for the period beginning on the applicable Delivery Date to but not
including the first day of the month immediately following the applicable Delivery
Date shall be paid in arrears. The first rent payment (which shall include the rent in
arrears for the first portion of the term,

2

 

	 	   	plus the advance rent for the following month) must be paid on the first day
of the month immediately following the applicable Delivery Date and thereafter rent
must be paid on the first day of each month. Any period which is less than a full
month will be prorated. Notices and rent shall be sent to Lessor at its principal
office, 161 N. Clark Street, Chicago, Illinois 60601. The terms of this Agreement
will continue until the last Car(s) are returned by the Lessee in accordance with
the applicable Lease. If Lessee fails to pay in full when due any rent to be paid
under this Agreement, then Lessee shall pay on demand interest on such unpaid amount
from the due date therefor until paid at a per annum rate equal to the Past Due Rate
specified in the applicable Rider.
	 
	 	B.  	For purposes of the Initial Riders, rent, Stipulated Loss Values and the
termination
price for exercise of the Early Termination Option set forth in any of such Riders
shall be prepared by reference to the rent, Stipulated Loss Value and the
termination price for exercise of the Early Termination Option attached as
Schedule I hereto and shall be subject to a one-time adjustment (upward or
downward) to reflect (i) a change in the purchase price of each Car in accordance
with Schedule I hereto, (ii) a change in the Funding Index Rate in accordance with
Schedule I hereto, and (iii) any change in tax law effective on or prior to the
Delivery Date set forth in such Rider, so as to maintain for Lessor its nominal
after-tax yield and periodic after-tax cash flow (the “Net Economic Return”).
	 
	 	C.  	Lessee agrees to return all of the Cars at the end of the Term of the
applicable
Rider, and with respect to each Car to pay the daily equivalent of the rental at the
rate in effect on the last day of the Term until such time as the Car has been
returned; provided however, that for any Cars not returned on or prior to the last
Business Day of the calendar month following the last day of the Term, Lessee
shall pay (as liquidated damages and not as a penalty) rental until the date that
the
Car is returned pursuant to this Agreement at a rate equal to 150% of the daily
equivalent of the rental rate in effect on the last day of the Term. Except with
respect to rental (which is governed by this section), this Agreement and the
applicable Rider shall remain in full force and effect until all of the Cars subject
to
such Rider have been returned in accordance with the applicable Lease.

5. Use, Location and Possession. Subject to the terms of this Agreement, Lessee has the
exclusive right to possess, use and operate each Car solely for its intended purpose in accordance
with this Agreement, provided that any such use is in conformity with all applicable laws, rules
and regulations and in conformity with prudent industry practice. Lessee agrees not to operate or
locate any Car, or to suffer any Car to be operated or located, in any area excluded from coverage
by any insurance policy required by the terms of Section 13 hereof. Lessee shall operate each Car
and permit each Car to be located only in the continental United States or Canada; provided that
no Car may be used in operations or located within Canada for more than 90 days in any calendar
year. Lessee agrees that each Car will bear reporting marks and numbers specified by Lessor, and
Lessee may not change the reporting mark or number on any Car. Lessee shall not place any
lettering or marking of any kind upon the Cars without Lessor’s prior written consent; provided,
that Lessee may, at its expense, cause the Cars to be marked or stenciled with the

3

 

names or initials or other insignia customarily used by Lessee or any permitted sublessee
on railroad cars used by it of the same or a similar type.

6. Railroad
Charges. Lessee must reimburse Lessor for any payment Lessor is required to
make to any railroad for empty movement charges incurred while in Lessee’s service. It is agreed
that the railroad mileage and junction reports will be conclusive evidence of the facts reported in
the absence of manifest error identified in reasonable detail by Lessee.

7. Repairs; Maintenance.

	 	A.  	Lessor Responsibilities. Lessor will be responsible to perform,
arrange for, or
cause to have performed (itself or through its subcontractor) the maintenance and
repair of the Cars, except as expressly set forth in this Agreement or the
applicable
Rider. Lessor’s obligations hereunder shall include the maintenance, repair and
replacement of items in accordance with Association of American Railroads
(“AAR”), US Department of Transportation (“DOT”), Federal Railroad
Administration (“FRA”), or any other applicable law or regulations, provided that
(i) if the cost of such maintenance, repairs or modifications to any Car on any date
in order to comply with such legal or regulatory requirements (other than solely as
a result of an increase following the date of the applicable Rider in the labor or
material cost of such repairs or modifications) shall be in excess of the Stipulated
Loss Value for such Car set forth in the applicable Rider for the month
immediately following the date of the proposed repair or modification, or (ii) if
the applicable Rider does not provide a Stipulated Loss Value for such Car and it
shall be uneconomic to repair such Car (other than solely as a result of an increase
following the date of the applicable Rider in the labor or material cost of such
repairs) in Lessor’s reasonable judgment, Lessor may, at its option, decline to
repair such Car, and upon such determination, the Car shall be deemed to have
suffered an Event of Loss. Lessor shall take reasonable action to enforce against
the Seller any express warranty of Seller issued on or applicable to any of the
Cars; provided, that Lessor shall not be obligated to resort to litigation to
enforce
any such warranty unless Lessee shall pay all expenses in connection therewith.
	 
	 	B.  	Lessee Responsibilities. Lessee shall have neither the right nor the
responsibility
hereunder to make any repairs, perform any maintenance, or perform any
inspection (except any inspection otherwise required by applicable law or
regulation or as otherwise permitted in Sections 3 and 7.C.) with respect to any
Car. Lessee shall not remove or replace any part, equipment and/or accessory on
any Car except as permitted under this Agreement or the applicable Rider. Lessee
agrees to reasonably cooperate with Lessor in connection with any action by
Lessor to enforce any warranty against the Seller.
	 
	 	C.  	Inspection, Maintenance, and Notification. During the term of the
lease, Lessor
will inspect the Cars to determine if the Cars are then qualified under and in
compliance with AAR, DOT, FRA, or any other applicable law or regulation.
Lessee will make the Cars available to Lessor at locations specified in the

4

 

	 	   	applicable Rider when requested by Lessor, two times per year or more
frequently if agreed by Lessor and Lessee or if required in order to comply with any
applicable law or regulation, to enable Lessor or its designated agent to perform
preventative maintenance on the Cars; provided, however, that Lessor will provide
reasonable cooperation in scheduling the timing and location of such preventative
maintenance to accommodate Lessee’s scheduling requirements for the Cars. Upon
reasonable prior notice by Lessee to Lessor, Lessee may (at Lessee’s sole risk and
expense) observe and be present at Lessor’s facility during the performance of any
maintenance, repair or inspection of any Car. Lessee will notify Lessor promptly
upon obtaining actual knowledge of the time, place and nature of any accident or bad
order condition requiring any repair to any Car.
	 
	 	D.  	Costs.

	 	(i)  	Lessor shall be responsible for the cost and expense of all
maintenance and repair relating to ordinary wear and tear on each Car, and
including the cost of performing Modifications to the extent provided in
Section 20, but excluding costs relating to any other damage or modification
to a Car.
	 
	 	(ii)  	Lessee shall be responsible to pay or reimburse Lessor for the
cost and expense of repairs relating to any damage to a Car (other than
repairs described in Section 7.D.(i) or repairs made, or paid for, by the
Seller under any warranty applicable to such Car) during the Term, including
(a) damage relating to the loading or unloading of any Car, (b) corrosion
damage other than that associated with ordinary wear and tear, (c) any damage
resulting from use of a Car not in compliance with the restrictions on
Lessee’s use of the Car set forth herein and in the applicable Rider, and (d)
damage which does not constitute an Event of Loss resulting from any accident
or resulting from any other event requiring repairs to the Car.
Notwithstanding the foregoing, Lessee shall not be obligated to pay Lessor for
repair of any such damage (v) for which Lessor is responsible under 7(D)(i),
(w) which occurs at any time such Car is in a shop specified by Lessor for
repair of such Car, (x) for which a railroad is required to pay compensation
under AAR Rule 107, (y) which occurs after the applicable Lease has been
terminated and such Car has been returned to Lessor in accordance with the
terms of this Agreement, or (z) which Lessee demonstrates is directly
attributable to Lessor’s failure to maintain such Car in accordance with this
Agreement. Such costs and expense which Lessee must pay under this Section
7.D.(ii) are referred to as “Lessee Costs.” Lessee shall also pay all costs
associated with the removal, disposal and cleaning of commodities from the Car
during and at the end of the Term and any other costs associated with return
of the Cars in the condition required under the applicable Lease at the end of
the Term of the Lease.

5

 

	 	(iii)  	If (a) Lessee has made a payment for a Lessee Cost to Lessor
relating to any repair, and (b) Lessor receives payment of insurance
proceeds from insurance carried by Lessee pursuant to this Agreement, or
payment from a railroad, with respect to such repair (any such insurance or
railroad payment a “Third Party Payment”), and (c) no Event of Default has
occurred and is continuing, Lessor shall reimburse Lessee up to the amount
of the Third Party Payment, but in no event more than the Lessee Cost
payment previously paid by Lessee with respect to such repair.

	 	E.  	Rent Abatement. Except as provided in the next succeeding sentence,
when a Car arrives at a shop designated by Lessor for maintenance or repair, the
rental charges for such Car shall abate beginning with the sixth (6th) day after the
date of arrival in the shop, provided, that if a Car is delivered to a shop for
maintenance or repair without advance notice from Lessee to Lessor (unless Lessor has
requested delivery of such Car to such shop), the abatement period will not commence
until the sixth (6th) day after the later of (i) the date Lessee delivers notice to
Lessor regarding, or Lessor becomes aware of, the nature of the maintenance or repair
requested for such Car or (ii) the date such Car is delivered to a shop acceptable to
Lessor. The rental charges shall continue during the repair period to the extent any
repairs are required (i) as a result of any damage described in clause (a), (b) or (c)
of Section 7.D.ii., (ii) while on a railroad that does not subscribe to, or fails to
meet its responsibility under the Interchange Rules of the AAR, or (iii) while on any
private siding or track (other than track of a shop designated by Lessor for the
repair of such Car) or any private or industrial railroad.

8. Casualty Car(s). If any Car is totally damaged or destroyed or is uneconomic to repair
(other than solely as a result of an increase following the date of the applicable Rider in the
labor or material cost of such repairs) under Section 7 or is uneconomic to modify (other than
solely as a result of an increase following the date of the applicable Rider in the labor or
material cost of such repairs) under Section 20, in each case, as reasonably determined by Lessor
(an “Event of Loss”), the rent for such Car will terminate upon the receipt by Lessor of
reimbursement for such Car as specified in this Section 8. If the Event of Loss occurs as a result
of any damage described in clause (a), (b) or (c) of
Section 7.D.ii., the reimbursement amount will
be an amount equal to the Stipulated Loss Value for such Car. If the Event of Loss occurs as a
result of any damage other than damage described in the immediately preceding sentence, the
reimbursement amount will be the settlement value of such Car calculated using AAR Rule 107. Within
sixty (60) days of such Event of Loss, Lessee shall pay to Lessor the applicable reimbursement
amount for such Car, unless Lessor shall have previously received from a railroad the settlement
value for such Car calculated using AAR Rule 107. Lessor will remit to Lessee any amount it
subsequently receives from a railroad under AAR Rule 107 or any insurance proceeds from property
insurance carried by Lessee pursuant to Section 13 in respect of a Car up to the amount previously
paid to Lessor by Lessee as a reimbursement amount in respect of such Car. In the case of an Event
of Loss Lessor has the right, but is not obligated, to substitute for any such Car another Car of
substantially the same age, type, quality and capacity with the consent of Lessee.

6

 

9. Renewal. Unless otherwise provided in the applicable Rider, Lessee shall have no
right to
renew this Agreement with respect to any Car other than with the mutual agreement of Lessor
and Lessee.

10. Return
Conditions. Lessee must return the Car(s) to Lessor at a location agreed by
Lessor
and Lessee in the same or as good as delivered condition, ordinary wear and tear excepted.
Lessee shall be liable for any item which is removed, broken, altered, missing, damaged
(including bent top cords and gates if any), except to the extent, in each case, Lessor is or was
responsible for the cost of repair of such item pursuant to the applicable Lease, or replaced with
a
non-standard item (unless such replacement was done by Lessor). Lessee will return Car(s) free
from all charges, liens, and encumbrances (other than Lessor Liens) and free from all lettering
and stenciling (other than any marks and numbers required by the applicable Rider) and all
accumulations or deposits from commodities transported in the Car(s). Lessee must remove all
modifications made by Lessee that are readily removable without causing damage to the Car(s)
and without diminishing the value, utility or remaining economic useful life of the Car(s) (in
each case as if such modification had not been made) at Lessee’s cost and expense, and Lessee
will pay for the repair of any damage resulting from the removal of any such modifications in
accordance with Section 7.D.; provided that such removal shall not (i) diminish the fair market
value, residual value, utility or remaining economic useful life of the Car to which such
modifications relate below what the fair market value, residual value, utility or remaining
economic useful life thereof would have been without the addition of such modifications or (ii)
cause such Car to become “limited use property” within the meaning of Revenue Procedure
2001-28 or Revenue Procedure 2001-29. If Lessee has not removed any such modification prior
to the return of the related Car as provided herein, title to such modification shall pass to
Lessor
as of the date of such return. Lessee must reimburse Lessor for any expense incurred in cleaning,
removal, and disposal of any remaining accumulation or deposits from such Car. Lessor may, at
Lessee’s expense, return the Car(s) to Lessee for cleaning. No rental credits will be issued while
Car(s) are being cleaned, and rent will continue until such Car(s) are returned to Lessor empty
and clean at a location agreed by Lessor and Lessee.

11. Representations and
Warranties of Lessee. Lessee represents and warrants to Lessor as
follows as of the date of this Agreement and as of the date of execution of each Rider:

	 	A.  	Lessee is a corporation duly organized and validly existing under the laws of
the
State of Delaware, has all requisite corporate power and authority to carry on its
business in all material respects as now conducted, to own or hold under lease its
property and to enter into, and perform its obligations under, the Operative
Agreements to which it is a party, and is duly qualified and is in good standing as
a foreign corporation in each other jurisdiction where the failure to so qualify,
due
to the character of its properties or the nature of its activities, could reasonably
be
expected to have a material adverse effect on its financial or business condition or
would materially and adversely affect the ability of Lessee to perform its
obligations under the Operative Agreements to which it is a party;
	 
	 	B.  	Lessee is duly authorized by all necessary corporate action to execute and
deliver
the Operative Agreements to which it is a party and to fulfill and comply with the

7

 

	 	   	terms, conditions and provisions thereof; this Agreement and each Assignment
of Purchase Agreement (if any) have been, and each Rider has been or will be, on the
date required to be delivered hereby, duly executed and delivered by Lessee; and
this Agreement and each Assignment of Purchase Agreement (if any) are, and each
Rider, when so duly executed and delivered, will be, valid, legal and binding
agreements of Lessee, enforceable against Lessee in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general principles of equity,
including, without limitation, concepts of good faith and fair dealing, materiality,
reasonableness and the possible unavailability of specific performance or injunctive
relief (regardless of whether such enforceability is considered in a proceeding in
equity or at law);
	 
	 	C.  	There are no actions, suits or proceedings pending or, to the knowledge of
Lessee,
threatened against or affecting Lessee or any of its property or rights before any
court or governmental authority that (i) question the validity of any Operative
Agreement to which it is a party or Lessee’s ability to perform its obligations
under any Operative Agreement to which it is a party or (ii) if adversely
determined, would materially and adversely affect the ability of Lessee to perform
its obligations under any Operative Agreement to which it is a party;
	 
	 	D.  	Neither the execution and delivery of the Operative Agreements to which it is a
party, nor its compliance with the terms and provisions thereof that are applicable
to Lessee, (i) conflicts with, results in a breach of, constitutes a default under
(with or without the giving of notice or the lapse of time or both), or violates any
of the terms, conditions or provisions of, (A) the Certificate of Incorporation or
the Bylaws of Lessee or (B) any bond, debenture, note, mortgage, indenture,
agreement, lease or other instrument to which Lessee is now a party or by which it
or its property is bound or affected, where such conflict, breach, default or
violation, in the case of any of the instruments described in this subclause (B),
would have a material adverse effect on the financial or business condition of
Lessee or would materially and adversely affect the ability of Lessee to perform its
obligations under any Operative Agreement to which it is a party, or (ii) results in
the creation or imposition of any lien upon any Car pursuant to the terms of any
such certificate, by-laws, bond, debenture, note, mortgage, indenture, agreement,
lease or other instrument (other than pursuant to the terms of the Operative
Agreements);
	 
	 	E.  	Neither the execution and delivery by Lessee of the Operative Agreements to
which it is a party, nor the fulfillment of, or compliance with, the terms and
provisions of the Operative Agreements that are applicable to Lessee, conflicts
with, or results in a breach of, or violates, any of the terms, conditions or
provisions of any law, rule, regulation, order, injunction or decree of any
governmental authority applicable to Lessee, the breach or violation of which
would (i) have a material adverse effect on Lessee, Lessor or any Car, (ii)

8

 

	 	   	materially and adversely affect Lessee’s ability to perform its obligations
under any Operative Agreement to which it is a party, or (iii) result in the
imposition of any criminal liability on Lessee or Lessor;
	 
	 	F.  	All federal, state, local and foreign income tax returns required to be filed
by
Lessee have, in fact, been filed, and all taxes which are shown to be due and
payable in such returns have been paid except to the extent such taxes are being
contested in good faith by appropriate proceedings timely initiated and diligently
prosecuted. No material controversy in respect of additional income taxes due is
pending or, to the knowledge of Lessee, threatened, which controversy if
determined adversely would materially and adversely affect Lessee’s ability to
perform its obligations under any Operative Agreement to which it is a party;
	 
	 	G.  	No Event of Default or event which, with the giving of notice or the lapse of
time
or both, would constitute an Event of Default, has occurred and is continuing;
	 
	 	H.  	No consent, approval or authorization of any governmental authority (other
than approval to be obtained by appropriate submissions to the United States Surface
Transportation Board and filings with the office of the Registrar General of Canada)
is required (i) for Lessee’s execution, delivery and performance of the Operative
Agreements to which it is a party, or (ii) to the knowledge of Lessee, for Lessor’s
execution, delivery and performance of the Operative Agreements to which it is a party
solely by reason of the status of Lessee, the nature of the Cars, or Lessee’s proposed
operation or use of the Cars (including without limitation, use by Lessee’s affiliates
or any sublessee), provided that Lessee makes no representation or warranty whether
Lessor’s performance of its obligations under the Operative Agreements to which it is
a party, when taken in conjunction with any activities of Lessor that are not required
pursuant to such documents, may require such consent, approval or authorization other
than, in each case, any such consent, approval or authorization which is not yet
required to be obtained; and Lessee has complied with all applicable provisions of law
requiring the designation, declaration, filing, registration and/or qualification with
any governmental authority in connection with the execution and delivery and
performance of any Operative Agreement to which it is a party except where such
non-compliance will not have a material adverse effect on the Lessee’s ability to
perform its obligations under any Operative Agreement to which it is a party;
	 
	 	I.  	Lessee has not created any lien (other than pursuant to this Agreement or any
Rider) on any Car. Lessee has not taken any action that would interfere in any way
with Lessor’s title to the Cars, and no party has any claim to the Cars by, through or
under Lessee;
	 
	 	J.  	(i) the “location” (as such term is used in Section 9-307 of the Uniform
Commercial Code) of the Lessee is the State of Delaware, (ii) the place where its
records concerning the Cars and all of its interests in, to and under all documents
relating to the Cars are and will be kept is located at 211 Carnegie Center,

9

 

	 	   	Princeton, New Jersey 08540, (iii) “NRG Power Marketing Inc.” is Lessee’s
true legal name as registered in the jurisdiction of its organization and (iv)
Lessee agrees to give the other parties hereto at least 30 days’ prior written
notice of any change in its location as a registered organization from its present
location or its jurisdiction of organization from the jurisdiction as set forth
herein;
	 
	 	K.  	To the extent Lessee has assigned certain rights under an equipment purchase
agreement (a “Purchase Agreement”) to Lessor pursuant to an Assignment of Purchase
Agreement, Lessee has provided to Lessor a true, correct and complete copy of such
Purchase Agreement covering the Car(s) to be leased by Lessor pursuant to this
Agreement and the applicable Rider and such Purchase Agreement has not been amended,
restated, modified or rescinded since the date such copy was delivered to Lessor.
	 
	 	L.  	No change has occurred since the Reference Date in the financial or business
condition of either Lessee or NRG Energy, Inc. (the “Guarantor”) that materially and
adversely affects the Guarantor’s or the Lessee’s ability to perform its respective
obligations under any Operative Agreement to which it is a party;
	 
	 	M.  	The audited consolidated balance sheets of Guarantor and its consolidated
subsidiaries as of the fiscal year ended on the Balance Sheet Date, and their related
audited consolidated statements of income and cash flows for the fiscal years ended on
said dates have been prepared in accordance with generally accepted accounting
principles in the United States (“GAAP”), consistently applied, and present fairly the
financial position of Guarantor and its consolidated subsidiaries on a consolidated
basis as of such dates and the results of operations of Guarantor and its consolidated
subsidiaries on a consolidated basis for such period;
	 
	 	N.  	Neither Guarantor nor any of its subsidiaries is in default in any payment of
principal or interest, regardless of amount, due in respect of any indebtedness for
borrowed money in an aggregate principal amount exceeding $50,000,000. No default by
Lessee or any of its subsidiaries has occurred and is continuing (which default cannot
be cured within any applicable grace period) under any instrument or agreement
pursuant to which any indebtedness for borrowed money in excess of $50,000,000 has
been issued that results in such indebtedness becoming due prior to its scheduled
maturity or that enables or permits the holders of such indebtedness to cause such
indebtedness to become due prior to its scheduled maturity; and
	 
	 	O.  	Lessee has not, directly or indirectly, used the services of any broker, agent
or finder in regard to any of the transactions contemplated hereby.

12.
Representations and Warranties of Lessor. Lessor represents and warrants to Lessee as
follows as of the date of this Agreement and as of the date of execution of each Rider:

10

 

	 	A.  	Lessor is a corporation duly organized and validly existing under the laws
of the
State of Delaware, has all requisite corporate power and authority to carry on its
business in all material respects as now conducted, to own or hold under lease its
property and to enter into, and perform its obligations under, the Operative
Agreements to which it is a party, and is duly qualified and is in good standing as
a foreign company in each other jurisdiction where the failure to so qualify, due to
the character of its properties or the nature of its activities, could reasonably be
expected to have a material adverse effect on its business, results of operations,
assets or financial condition or would materially and adversely affect the ability
of
Lessor to perform its obligations under any Operative Agreement to which it is a
party;
	 
	 	B.  	Lessor is duly authorized by all necessary corporate action to execute and
deliver
the Operative Agreements to which it is a party and to fulfill and comply with the
terms, conditions and provisions thereof; this Agreement and the Assignment of
Purchase Agreement (if any) have been, and each Rider has been or will be, on the
date required to be delivered hereby, duly executed and delivered by Lessor; and
this Agreement and the Assignment of Purchase Agreement (if any) are, and each
Rider, when so duly executed and delivered, will be, valid, legal and binding
agreements of Lessor, enforceable against Lessor in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by general principles
of
equity, including, without limitation, concepts of good faith and fair dealing,
materiality, reasonableness and the possible unavailability of specific performance
or injunctive relief (regardless of whether such enforceability is considered in a
proceeding in equity or at law);
	 
	 	C.  	There are no actions, suits or proceedings pending or, to the knowledge of
Lessor,
threatened against or affecting Lessor or any of its property or rights before any
court or governmental authority that (i) question the validity of any Operative
Agreement to which it is a party or Lessor’s ability to perform its obligations
under any Operative Agreement to which it is a party or (ii) if adversely
determined, would materially and adversely affect the ability of Lessor to perform
its obligations under any Operative Agreement to which it is a party;
	 
	 	D.  	Neither the execution and delivery of the Operative Agreements to which it is a
party, nor its compliance with the terms and provisions thereof that are applicable
to Lessor, (i) conflicts with, results in a breach of, constitutes a default under
(with or without the giving of notice or the lapse of time or both), or violates any
of the terms, conditions or provisions of, (A) the Certificate of Incorporation or
Bylaws of Lessor or (B) any bond, debenture, note, mortgage, indenture,
agreement, lease or other instrument to which Lessor is now a party or by which it
or its property is bound or affected, where such conflict, breach, default or
violation, in the case of any of the instruments described in this subclause (B),
would have a material adverse effect on the business, results of operations, assets

11

 

	 	 	or financial condition of Lessor or would materially and adversely affect
the ability of Lessor to perform its obligations under any Operative Agreement to
which it is a party, or (ii) results in the creation or imposition of any lien upon
any Car pursuant to the terms of any such certificate, by-laws, bond, debenture,
note, mortgage, indenture, agreement, lease or other instrument;
	 
	 	E.  	Neither the execution and delivery by Lessor of the Operative Agreements to
which it is a party, nor the fulfillment of, or compliance with, the terms and
provisions of the Operative Agreements that are applicable to Lessor, conflicts with,
or results in a breach of, or violates, any of the terms, conditions or provisions of
any law, rule, regulation, order, injunction or decree of any governmental authority
applicable to Lessor, the breach or violation of which would (i) have a material
adverse effect on Lessee, Lessor or any Car, (ii) materially and adversely affect
Lessor’s ability to perform its obligations under any Operative Agreement to which it
is a party, or (iii) result in, or increase the risk of, the imposition of any
criminal liability on Lessee or Lessor;

13. Insurance. Upon acceptance of each Car, Lessee, at its own cost and expense, shall
keep
such Car insured under an “all risk” property insurance policy (the “Property Policy”) for the
value of such Car and in no event (other than with respect to Lessee’s deductible of $500,000) for
less than an amount equal to the greater of (i) the Stipulated Loss Value for such Car and (ii) the
settlement value of such Car (calculated using AAR Rule 107), and shall maintain Commercial
General Liability and/or Excess Liability insurance policies (the “Liability Policies”) which,
when combined, shall have limits of not less than $10,000,000 for each occurrence and in the
aggregate. All such insurance shall be placed with first class insurers and underwriters that have
an A.M. Best rating of A (excellent) or better, shall specify Lessor as loss payee on the Property
Policy and as an additional insured on the Liability Policies and shall provide that such insurance
may not be canceled as to Lessor or altered in any way that would affect the interest of Lessor
without at least thirty (30) days prior written notice to Lessor (ten (10) days in the case of
nonpayment of premium). All insurance shall be primary, without right of contribution from any
other insurance carried by Lessor. The “all risk” property insurance policy shall contain a
“breach of warranty” provision if, at any time from and after the date of this Agreement, Lessee
has obtained an “all risk” property insurance policy containing a “breach of warranty” in any
other lease transaction and shall provide that all amounts payable by reason of loss or damage to
the Car shall be payable to Lessor. Lessee shall provide Lessor with evidence satisfactory to
Lessor of the required insurance five (5) Business Days prior to the applicable Delivery Date.

14. Financial
Covenants. The financial covenants set forth in Section 6.10 (Consolidated
Interest Coverage Ratio) and Section 6.11 (Consolidated Leverage Ratio) of that certain Credit
Agreement as amended and restated as of December 24, 2004 among NRG Energy, Inc., Lessee,
the Lenders party thereto, and Credit Suisse First Boston, acting through its Cayman Islands
Branch, as administrative agent, joint lead book runner, joint lead arranger, and co-documentation agent, and Goldman Sachs Credit Partners L.P., as joint lead book runner, joint
lead arranger, and co-documentation agent, (as such Credit Agreement may be amended, restated,
supplemented or otherwise modified from time to time the “Senior Credit Agreement”) are
hereby incorporated by reference (together with all applicable defined terms relating thereto) as
if

12

 

fully set forth herein provided that any modification or deletion to such financial
covenants shall be effective only upon receipt by Lessor of notice of such amendment pursuant to
Section 29.B.
15.
Closing Conditions.

	 	A.  	Conditions on the Closing Date. The obligation of each of Lessee and
Lessor to perform its obligations hereunder shall be subject to the satisfaction or
waiver of the following conditions precedent on or prior to the Closing Date (except
that the obligation of any party hereto shall not be subject to such party’s own
performance or compliance):

	 	(i)  	This Agreement and the Guaranty dated as of February 18, 2005
by the Guarantor (the “Guaranty”) shall have been duly executed and delivered
by the parties thereto;
	 
	 	(ii)  	All proceedings taken in connection with the Closing Date and
all documents and instruments to be delivered thereon or relating thereto
shall be reasonably satisfactory to each party, and each party shall have
received copies of such documents as such party may reasonably request in
connection therewith, all in form and substance reasonably satisfactory to
such party and its counsel;
	 
	 	(iii)  	(A) Lessor shall have received the opinions, each dated the
Closing Date and in form and substance satisfactory to the Lessor, of (1)
Timothy O’Brien, Esq., General Counsel to Lessee and Guarantor; and (2)
Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to Lessee and
Guarantor; and (B) Lessee shall have received the opinions, each dated the
Closing Date and in form and substance satisfactory to the Lessee, of
(1) Oliver W. R. Champagne, Esq., General Counsel to Lessor; and

(2) Winston & Strawn LLP, special counsel to Lessor;
	 
	 	(iv)  	Lessor shall have received (A) copies of Lessee’s Certificate
of Incorporation, certified by the Secretary of State of the State of Delaware
no earlier than the fifteenth day prior to the Closing Date, and Bylaws,
accompanied by an Officer’s Certificate, dated the Closing Date, of such
corporation, stating that such documents are in full force and effect and have
not been amended since the respective dates thereof, (B) certificate of
existence from the Secretary of State of the State of Delaware dated no
earlier than the fifteenth day prior to the Closing Date, with respect to
Lessee, (C) a Certificate of the Secretary of Lessee, dated the Closing Date,
certifying that Lessee’s Board of Directors has duly adopted resolutions
authorizing the execution, delivery and performance by such corporation of the
Operative Agreements to which it is a party and that such resolutions are in
full force and effect and have not been amended since the date of their
adoption, and certifying as to the incumbency of the officers of Lessee
executing each of the Operative Agreements;

13

 

	 	(v)  	Lessor shall have received (A) copies of Guarantor’s Certificate
of Incorporation, certified by the Secretary of State of the State of
Delaware no earlier than the fifteenth day prior to the Closing Date, and
Bylaws, accompanied by an Officer’s Certificate, dated the Closing Date, of
such corporation, stating that such documents are in full force and effect
and have not been amended since the respective dates thereof, (B)
certificate of existence from the Secretary of State of the State of
Delaware dated no earlier than the fifteenth day prior to the Closing Date,
with respect to Guarantor, (C) a Certificate of the Secretary of Guarantor,
dated the Closing Date, certifying that the Guarantor’s Board of Directors
has duly adopted resolutions authorizing the execution, delivery and
performance by such corporation of the Operative Agreements to which it is a
party and that such resolutions are in full force and effect and have not
been amended since the date of their adoption, and certifying as to the
incumbency of the officers of Guarantor executing each of the Operative
Agreements; and
	 
	 	(vi)  	Lessee shall have received (A) copies of Lessor’s Certificate
of Incorporation, certified by the Secretary of State of the State of Delaware
no earlier than the fifteenth day prior to the Closing Date, and Bylaws,
accompanied by an Officer’s Certificate, dated the Closing Date, of such
corporation, stating that such documents are in full force and effect and have
not been amended since the respective dates thereof, (B) certificate of
existence from the Secretary of State of the State of Delaware dated no
earlier than the fifteenth day prior to the Closing Date, with respect to
Lessor, (C) a Certificate of the Secretary of Lessor, dated the Closing Date,
certifying that the Lessor’s Board of Directors has duly adopted resolutions
authorizing the execution, delivery and performance by such corporation of the
Operative Agreements to which it is a party and stating that such resolutions
are in full force and effect and have not been amended since the date of their
adoption, and certifying as to the incumbency of the officers of Lessor
executing each of the Operative Agreements.

	 	B.  	Conditions on Each Delivery Date. The obligation of each of Lessee and
Lessor to perform its obligations hereunder and under any Rider shall be subject to
satisfaction or waiver of the following conditions precedent on or prior to each
Delivery Date (except that the obligation of any party hereto shall not be subject to
such party’s own performance or compliance):

	 	(i)  	The applicable Rider shall have been duly executed and
delivered by the parties thereto;
	 
	 	(ii)  	With respect to each Initial Rider, Memoranda of the Lease and
each Rider to be executed and delivered on or prior to such Delivery Date
shall have been filed with the Surface Transportation Board, pursuant to 49
U.S.C. § 11301, and the Registrar General of Canada, pursuant to Section 105
of

14

 

	 	   	the Canada Transportation Act and the financing statements shall have
been filed in the appropriate offices in the State of Delaware;
	 
	 	(iii)  	All taxes, if any, payable by Lessee on or prior to such
Delivery Date in connection with the execution, delivery, recording or filing
of this Agreement and any Rider shall have been paid in full;
	 
	 	(iv)  	The Lessor shall have received evidence of Lessee’s compliance
with the terms and conditions set forth in Section 13 of this Agreement with
respect to insurance for the Cars to be delivered on such Delivery Date;
	 
	 	(v)  	The representations and warranties of each of the parties
contained in this Agreement and in any Rider and of the Guarantor in the
Guaranty shall be true and correct in all material respects on such Delivery
Date with the same effect as though made on and as of such Delivery Date, and
an Officer’s Certificate, dated such Delivery Date, of each of such parties to
that effect shall have been delivered to such party;
	 
	 	(vi)  	With respect to each Initial Rider, on such Delivery Date
Lessor shall have received the opinions, each dated such Delivery Date and in
form and substance satisfactory to the Lessor, of (A) Alvord and Alvord,
special Surface Transportation Board counsel; and (B) McCarthy Tetrault LLP,
special Canadian counsel;
	 
	 	(vii)  	(x) Good and valid title to each Car delivered on such
Delivery Date shall be transferred to Lessor, free of all liens (other than
the applicable Lease and Lessor Liens) and (y) the Capitalized Lessor’s Cost
of each Car shall not exceed the actual cost as confirmed by copies of
manufacturer invoices certified by Lessee plus applicable sales tax;
	 
	 	(viii)  	On such Delivery Date, neither Lessee nor Guarantor has suffered any
material adverse changes in its financial or business, condition since the
date of Lessee’s or Guarantor’s, as the case may be, most recent audited
financial statements publicly filed or delivered to Lessor;
	 
	 	(ix)  	No Event of Default or event which, with the giving of notice
or the lapse of time or both, would constitute an Event of Default, shall
exist prior to or immediately after giving effect to the transactions
contemplated by this Agreement and each Rider;
	 
	 	(x)  	All consents and approvals of third parties (including
governmental authorities) required in connection with the execution, delivery
and performance of this Agreement and each Rider by the parties thereto shall
have been received and shall be in full force and effect on such Delivery
Date, other than such consents and approvals the non-attainment of which

15

 

	 	   	will not have a material adverse effect on Lessee’s ability to
perform its obligations under any Operative Agreement to which it is a
party;
	 
	 	(xi)  	No change shall have occurred after the date of the execution
and delivery of this Agreement in applicable law or regulations thereunder or
interpretations thereof by regulatory authorities that, in the reasonable
opinion of Lessor or Lessee, would make it illegal for such party to enter
into any transaction contemplated by this Agreement or the applicable Rider
relating to the Cars to be delivered on such Delivery Date;
	 
	 	(xii)  	No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental agency, nor
shall any order, judgment or decree have been issued or proposed to be issued
by any court or governmental agency at the time of such Delivery Date, to set
aside, restrain, enjoin or prevent the completion and consummation of this
Agreement or the transactions contemplated hereby;
	 
	 	(xiii)  	No change in tax law shall have occurred on or prior to such Delivery Date
that in the reasonable opinion of Lessor affects or could affect in any
adverse respect the tax treatment to Lessor of the transactions contemplated
by this Agreement, unless an appropriate adjustment with respect thereto is
made pursuant to Section 4B hereof in a manner acceptable to Lessor; and
	 
	 	(xiv)  	All proceedings taken in connection with such Delivery Date
and all documents to be delivered thereon or relating thereto shall be
reasonably satisfactory to such party and its counsel, and such party and its
counsel shall have received copies of such documents as such party or its
counsel may reasonably request in connection therewith or as the basis for
such counsel’s opinions to be delivered in connection with such Delivery Date,
all in form and substance reasonably satisfactory to such party and its
counsel.

16. Taxes. Lessee shall pay, and shall indemnify, reimburse, and hold Lessor (on a net
after tax basis (taking into account any tax savings available to Lessor)) harmless from and
against, all fees, taxes, withholdings, assessments and other governmental charges, however
designated, together with any penalties, fines or interest, if any, thereon, (collectively, the
“Impositions”) which are at any time levied, assessed or imposed against Lessor, Lessee, this
Agreement, any Rider, the Car(s) or any part thereof by any Federal, state, local or foreign
government or taxing authority upon, with respect to, as a result of, or measured by (i) the
Car(s) (or any part thereof), or this Agreement or any Rider or the interest of the Lessor
therein, or (ii) the purchase, ownership, delivery, leasing, possession, maintenance, use,
operation, return, sale or other disposition of the Car(s) or any part thereof, or (iii) the
rentals, receipts or earnings payable under this Agreement or any Rider or otherwise arising from
the Car(s) or any part thereof; excluding in each case, however, (s) Impositions by any foreign
government or taxing authority except to the extent imposed as a result of the use or presence of
any Car, or the presence or activities of

16

 

Lessee, in such jurisdiction, (t) Impositions relating to any Car with respect to any period
after the termination of the lease of such Car and the return of such Car in accordance with this
Agreement, (u) Impositions resulting from the gross negligence or willful misconduct or breach of
any covenant of Lessor, (v) Impositions attributable to any transfer, assignment, lien, pledge or
financing by Lessor, other than as required by this Agreement, as requested by Lessee or pursuant
to Lessor’s exercise of any remedies pursuant to Section 19.B. of this Agreement or any Rider; (w)
Impositions relating to maintenance, modifications or repairs for which Lessor is responsible under
Section 7. A. or 20 of this Agreement, (x) Federal, state or local Impositions based on or measured
by the gross or net income of Lessor, other than Impositions which are (or are in the nature of)
use or rental Impositions, (y) Federal, state and local property taxes (including ad valorem taxes,
to the extent such taxes are in lieu of property taxes) incurred, assessed against or levied upon
the Car(s) and (z) Impositions imposed by the State of Illinois upon the purchase of Cars(s) from
the Seller (such Impositions specified in clauses (s) through (z), “Lessor Taxes”). Lessee agrees
to notify Lessor of any assessments of which Lessor is not otherwise aware and to cooperate with
Lessor in any contest, in each case, relating to any Lessor Taxes. Lessor shall have no duty to
contest any Lessor Taxes and will not be liable or accountable to Lessee therefore. Lessor shall
cooperate with Lessee to permit the pursuit of any contest with respect to any Impositions for
which Lessee is liable under this Section 16. Notwithstanding the foregoing, Lessee shall not be
required to indemnify Lessor for any use or rental Impositions imposed by the State of Illinois,
and Lessor shall reimburse Lessee for any use or rental Impositions imposed by the State of
Illinois and paid by the Lessee with respect to the Cars, this Agreement or the transactions
contemplated by this Agreement (and any such Impositions referred to in this sentence shall be
treated as Lessor Taxes). Lessor also shall reimburse Lessee for any claims made by Seller against
Lessee with respect to sales Impositions imposed upon the purchase of the Cars. Lessee will
complete and file on a timely basis any returns and filings required in any taxing jurisdiction
with respect to use and rental taxes imposed with respect to the Cars, this Agreement or the
transactions contemplated by this Agreement (other than with respect to any such use or rental
Impositions imposed on Lessor by the State of Illinois, provided, however, that Lessee shall
provide to Lessor such information and assistance as Lessor shall reasonably request with respect
to any such returns or filings in Illinois). Lessee’s and Lessor’s obligations under this paragraph
shall survive the expiration or earlier termination of this Agreement and any Rider.

17. Indemnity. A. Lessee shall indemnify Lessor (on a net after tax basis (taking into
account any tax savings available to Lessor)) from any losses, liabilities, expenses (including
without limitation, the reasonable cost of investigating and defending against any claim for
damages), fines or penalties, including losses related to damage caused to or by materials placed
in the Car(s) (collectively, “Claims”), which may at any time be imposed upon, incurred by or
asserted or awarded against Lessor in connection with: (a) the lease, sublease, use, operation,
possession, storage, abandonment or return of the Car(s) during the term of this Agreement, and
(b) any present or future applicable law, rule or regulation (including without limitation, common
law and environmental law) related to the release, removal, discharge or disposition, whether
intentional or unintentional, of any materials from or placed in a Car during the term of this
Agreement, except in each case (i) any Impositions, or any Tax Benefits (it being understood that
any obligation of Lessee with respect to Tax Benefits is set forth in Sections 17.B. and C. of
this Agreement), or (ii) any Claims which accrue on the Car(s) while such Car is in a repair shop

17

 

chosen by Lessor, or for which a railroad(s) has assumed full responsibility or (iii) any
Claims that Lessor has assumed or agreed to pay under this Agreement or any Rider (including,
without limitation, any maintenance and repairs that are not Lessee’s responsibility under Section
7.B., any modifications contemplated by Section 20 or any expenses set forth in Section 23) or (iv)
any Claims relating to any Car with respect to any period after the termination of the lease of
such Car and the return of such Car in accordance with this Agreement (other than Claims in
connection with Lessor’s exercise of remedies after an Event of Default has occurred and is
continuing) or (v) any Claims resulting from the gross negligence or willful misconduct or breach
of any covenant of Lessor or (vi) any Claims for the expenses of any transfer, assignment, lien,
pledge or financing by Lessor (other than Claims in connection with Lessor’s exercise of remedies
after an Event of Default has occurred and is continuing).

     B. Lessee hereby represents, warrants and covenants that: (i) each of the Cars is not, and
will not at any time during the term of this Lease be treated as, tax-exempt use property
within
the meaning of Section 168(h) of the Code; and (ii) at no time during the term of this Lease
will
Lessee take or omit to take, nor will it permit any sublessee or assignee to take or omit to
take,
any action (unless such action or omission is required by Lessor or by this Lease or any
Rider),
which will result in the disqualification of any Car for, or recapture of, all or any portion
of the
tax benefits with respect to such Car set forth in the “Tax Benefits” section of the
applicable
Rider (other than any tax benefits associated with foreign tax credits, the “Tax Benefits”).

     C. If as a result of a breach of any representation, warranty or covenant of the Lessee
contained in this Lease or any Rider (i) tax counsel of Lessor shall provide a written opinion
that
there is no reasonable basis for Lessor to claim on its Federal income tax return all or any
portion
of the Tax Benefits with respect to the Car(s), or (ii) any Tax Benefit claimed on the Federal
income tax return of Lessor is disallowed or adjusted by the Internal Revenue Service, or
(iii) any
Tax Benefit is recalculated or recaptured (any such determination, disallowance, adjustment,
recalculation or recapture being a “Loss”), then Lessee shall pay to Lessor, as an indemnity
and
as additional rent, a lump-sum amount that shall equal the present value (discounted at 4.0%)
of
all additional federal income taxes (plus interest, penalties and additions to tax) currently
payable
and anticipated to be payable in future years by Lessor as a result of such indemnified Loss
(and
any payment due hereunder), less (but not below zero) the present value (discounted at 4.0%)
of
all anticipated future tax savings of Lessor resulting from such indemnified Loss or the event
giving rise thereto (for purposes of this calculation, additional federal income taxes
anticipated to
be payable or reduced will be computed on the same basis); provided, however, that no
indemnity shall be payable under this clause (C) if such Loss with respect to any Car(s)
occurs as
a result of (1) a change in the Internal Revenue Code of 1986, as amended, or any regulation
thereunder that occurs and is effective after the Delivery Date for such Car(s), (2) any event
that
requires Lessee to pay Stipulated Loss Value, a settlement value, any lease termination
amount,
or any reimbursement or AAR Rules settlement amount, in each case, if Lessee shall have made
such payment to Lessor, (3) any transfer or assignment by Lessor other than any transfer or
assignment in connection with Lessor’s exercise of remedies pursuant to Section 19.B. or (4)
any
breach by Lessor of any covenant in this Agreement or any Rider. Such amount shall be payable
within 30 days of demand accompanied by a statement describing in reasonable detail such Loss
and the computation of such amount (but no earlier than the date such additional taxes are or
are
deemed payable by Lessor). The indemnity shall be computed on the same assumptions,

18

 

including Federal and state tax rates as were used by Lessor in originally evaluating the
transaction other than any assumption rendered untrue as a result of such Loss.

     D. If as a result of a violation by Lessee of its U.S. use covenant in Section 5
hereof during the first eight calendar years of the lease term for the applicable Rider,
Lessor’s
tax liability increases as a result of the foreign tax credits available for use by Lessor in
such
year being less than the foreign tax credits that would have been available for such year had
the
aggregate use of the Cars subject to such Rider outside the United States not exceeded 15% in
such calendar year, Lessee shall indemnify Lessor for an amount equal to such reduction in
foreign tax credits, plus any interest, penalties and additions to tax. If during any other
calendar year, the aggregate use of the Cars subject to such Rider outside the United States
exceeds 15% in any calendar year and the Lessor’s tax liability is reduced as a result of an
increased ability to utilize foreign tax credits, Lessor shall pay Lessee an amount equal to
such
increase in foreign tax credits, but in no event an amount greater than the indemnity paid by
Lessee under this paragraph with respect to such Cars. In the event of any dispute as to the
amount due under this Section 17.D., the parties shall agree to a mutually satisfactory
verification procedure, provided, however, that in no event shall Lessee have the right to
review Lessor’s tax returns.

     E. All references to Lessor in this Section 17 include Lessor, the consolidated
taxpayer group of which Lessor is a member, any other entity which has an ownership interest
in, is owned by or is under common ownership with, Lessor and, for purposes of Section
17.A., the respective or collective officers, directors, agents and employees of each. All
rights, privileges and indemnities contained in this Section 17 shall survive the expiration
or
other termination of this Lease, the rights, privileges and indemnities of Lessor contained
herein are expressly made for the benefit of, and shall be enforceable by Lessor, its
successors
and assigns.

     F. Lessee will make available and furnish upon request by the Lessor for inspection
and copying by the Lessor such records that are regularly maintained by the Lessee in the
ordinary course of its business relating to the Car(s) as may be reasonably necessary in order
for the Lessor to fulfill its tax return, filing, audit, protest and litigation obligations
and to
calculate the amount of any indemnity under Section 16 or 17 of this Agreement.

     G. Subject to reasonable customary conditions, Lessor will cooperate in good faith
with any request by Lessee that Lessor contest any Loss for which Lessor is seeking
indemnification hereunder, provided that Lessor shall control and make all decisions with
respect to any such contest.

     H. If any Lessor tax savings are taken into account in computing the amount payable by Lessee
to Lessor (or any amount payable by Lessor to Lessee) under this Section 17, and any of such tax
savings are subsequently disallowed or, as a result of a change of law, not available to Lessor as
anticipated in making such computation, Lessee shall make a further payment to Lessor to indemnify
and reimburse Lessor (on an after tax basis) for the loss of such tax savings.

19

 

18. Transfer or Assignment of Interest; Subleasing; Restrictions on Liens.

	 	A.  	Transfer, Assignment or Subleasing by Lessee.

	 	(i)  	At any time during the Term of the applicable Lease, Lessee
may permit the use of any of the Car(s) by any of its affiliates consistent
with its normal business practices; provided, that such affiliate is a United
States person within the meaning of section 7701(a)(30) of the Internal
Revenue Code of 1986, as amended, and such use shall not extend beyond the
term of this Agreement and the applicable Rider and Lessee continues to remain
liable to Lessor for any and all obligations and liabilities arising from the
use, control or operation of the Car by such affiliate.
	 
	 	(ii)  	Lessee may sublease all but not less than all of the Cars
described in any Rider; provided that (a) no Event of Default has occurred and
is continuing, (b) at any time prior to the fifth anniversary of the Lease Term
Commencement Date (1) no more than five (5) Train Sets are subject to one or
more subleases at any time and (2) the term of such sublease shall not be
greater than 36 months (or, if less, the remaining Term of the applicable
Lease), (c) such sublease shall terminate prior to the Lease Term Expiration
Date, (d) such sublease shall be expressly subject and subordinate to this
Agreement and related Rider, (e) the sublease shall expressly prohibit any
further assignment or subleasing of the Car by the sublessee, (f) the sublessee
shall not be primarily engaged in the leasing of railcars, (g) Lessee shall
take, or cause to be taken, such action reasonably necessary to collaterally
assign to Lessor all of Lessee’s right, title and interest in and to such
sublease, (h) no sublease shall provide the sublessee with a purchase option in
respect of the Car(s) or any renewal option which extends beyond the end of the
Term, or if applicable, the earlier date to which such sublease may extend
pursuant to clause (ii)(b) above, (i) no provision in such sublease relating to
the use or operation of any Car shall be less restrictive than the comparable
provision in this Agreement or the related Rider, (j) such sublease shall not
result in Lessee being liable for any indemnity obligation set forth in Section
17.C. or D or increase the risk that any such indemnity obligation will arise,
(k) to the knowledge of Lessee after due inquiry, the sublessee is not an
adverse plaintiff or defendant in any then-existing litigation against the
Lessor, and (1) such sublease shall expressly prohibit the transportation of
any commodity not expressly permitted under this Agreement or the related
Rider.
	 
	 	(iii)  	At all times during the Term of the applicable Lease,
regardless of any permitted use or sublease permitted under this Section
18.A., Lessee shall continue to remain liable to Lessor for any and all
obligations and liabilities arising from the use, control or operation of the
Car by any party. Except as set forth above, Lessee shall not transfer, assign
its interest in, or

20

 

	 	   	sublease any Car under this Agreement without Lessor’s prior written
consent.

	 	B.  	Transfer or Assignment by Lessor. Lessor may, without the consent of
Lessee,
assign, pledge, mortgage, lease, transfer or otherwise dispose, either in whole or
in
part, its rights under this Agreement or any Rider, or the right to enter into any
Rider, and Lessor may assign, pledge, mortgage, lease, transfer or otherwise
dispose of title to the Car(s) (it being understood that Lessor may, without the
consent of Lessee, agree with or arrange for a third party to perform Lessor’s
maintenance and repair obligations under this Agreement as contemplated by
Section 7.A.). Notwithstanding such assignment, pledge, mortgage, lease, transfer
or other disposition, Lessor shall remain responsible for its obligations as and to
the extent set forth in this Agreement and the applicable Rider in the event that
such assignee or transferee fails to perform its obligations under this Agreement
and the applicable Rider after demand by Lessee, unless Lessee consents in
writing to release Lessor from its responsibilities under this Agreement and the
applicable Rider, such consent not to be unreasonably withheld. Upon notice of
such assignment by Lessor, Lessee agrees that it will pay all rent and other
amounts payable under each Rider to the lessor named therein. Each Rider,
incorporating by reference the terms and conditions of this Agreement, constitutes
a separate instrument of lease, and the lessor named therein or its assignee shall
have all rights as “Lessor” thereunder separately exercisable by such named lessor
or assignee as the case may be exclusively and independently of Lessor or any
other assignee with respect to any other Rider executed pursuant hereto. Lessee
further agrees to confirm in writing receipt of a notice of assignment as may be
requested by assignee. Lessee hereby waives and agrees not to assert against any
such assignee any defense, set-off, recoupment claim or counterclaim which
Lessee has or may at any time have against Lessor or any other person for any
reason whatsoever relating to any event arising prior to the effectiveness of such
assignment or transfer.
	 
	 	C.  	Restrictions on Liens. No title or interest in any Car will vest in
Lessee except the
right to use the Car(s) in accordance with the terms of this Agreement. Neither
Lessee nor any sublessee will directly or indirectly create, incur, assume or suffer
to exist any lien on or with respect to any Car, Lessor’s title thereto or any
interest
therein or in, to or under this Agreement or any interest of Lessor in any rent or
any sublease. Lessee shall promptly, at its own expense, take or cause to be taken
such action as may be necessary to duly discharge any lien when such lien arises
and shall promptly furnish evidence of such discharge to Lessor.

19. Default.

	 	A.  	Events of Default. The occurrence of any of the following
events will be an Event of Default with respect to this Agreement or any Rider:

21

 

	 	(i)  	(A) The nonpayment by Lessee of rent (except as provided in
clause (B)) or any amount payable under Section 8 hereof, which is not
cured within five (5) Business Days after the date such payment is due;
(B) the nonpayment by Lessor of any portion of rent as to which Lessee
reasonably believes that it is entitled to a rent abatement under Section
7.E. and has given written notice of such belief to Lessor, which is not
cured within fifteen (15) Business Days after receipt of notice that
payment has not been made when due, and (C) the nonpayment by Lessee of any
other sum required to be paid under this Agreement or any Rider which is
not cured within five (5) Business Days after receipt of notice that
payment has not been made when due;
	 
	 	(ii)  	The breach by Lessee of any term or condition of Sections 14
or 18 or failure of Lessee to maintain insurance required by this Agreement;
	 
	 	(iii)  	The breach by Lessee of any other term or condition of this
Agreement which is not cured within thirty (30) days of receipt of written
notice of such breach;
	 
	 	(iv)  	Any representation or warranty by Lessee or Guarantor
contained in any Operative Agreement or in any certificate or document
required to be delivered hereunder or thereunder shall have been incorrect in
a material respect when made and shall remain uncured for a period of thirty
(30) days after receipt of written notice of incorrectness;
	 
	 	(v)  	The general assignment for the benefit of creditors made by
Lessee or Guarantor, or the failure of Lessee or Guarantor to pay, or the
statement in writing by Lessee or Guarantor that it is unable to pay, or
Lessee’s or Guarantor’s inability to pay its debts generally as its debts
become due, or the filing by Lessee or Guarantor of a voluntary petition under
any bankruptcy statute;
	 
	 	(vi)  	An involuntary petition is filed under any bankruptcy statute
against Lessee or Guarantor or any receiver, trustee, custodian or similar
official is appointed to take possession of the properties of Lessee or
Guarantor, unless such petition or appointment is set aside or withdrawn or
ceases to be in effect within 60 days from the date of such filing or
appointment;
	 
	 	(vii)  	An Event of Default has occurred under any other Rider; or
(viii) a Guaranty Event of Default (as defined in the Guaranty) has occurred
and is continuing under the Guaranty.

	 	B.  	Lessor Remedies.

22

 

	 	(i)  	Upon the occurrence and continuation of any Event of Default,
then, to the extent permitted by applicable law, Lessor shall have the
right to exercise any one or more of the following remedies:

	 	(a)  	To proceed by appropriate court action to enforce
performance by
Lessee of its obligations hereunder or to recover damages for breach
thereof;
	 
	 	(b)  	To take possession of any Car, wherever located,
without notice,
legal process, prior judicial hearing or liability for trespass or
other
damage (all of which Lessee hereby voluntarily and intelligently
waives) and, thereafter, hold, sell, operate or lease such Cars free of
claims by Lessee, without interrupting the other business of Lessee;
	 
	 	(c)  	By notice to Lessee, to terminate all Leases with
respect to which the
same entity or an affiliate of such entity is Lessor and declare all
rent
then owing to Lessor hereunder and under such Riders immediately
due and payable (whereupon Lessee shall promptly pay the same);
	 
	 	(d)  	To pursue any other remedy available to Lessor at
law or in equity;
and
	 
	 	(e)  	To draw under any letter of credit issued to Lessor
pursuant to the
Guaranty as described in Section 16(f) of the Guaranty.

	 	(ii)  	If Lessor elects not to sell, re-lease, or otherwise dispose
of all or any of the Cars and holds such Cars for the Lessee for the remaining
Term, Lessor may recover, in addition to all rent accrued and unpaid as of the
date of Lessor’s recovery of possession of the Cars, the difference between
(a) the present value, as of such date, of the rent for the remainder of the
Term respecting such Cars and (b) the present value, as of such date, of the
fair market rental value (as determined by an appraiser selected by Lessor in
its sole discretion) for the remainder of the Term respecting such Cars.
Present value shall be computed using a discount rate equal to the yield on an
actively traded U.S. Treasury issue selected by Lessor, as displayed on the
“USD” screen or comparable screen of the Bloomberg Financial Markets Service,
having a maturity equal to the then remaining length of the Term
provided, however, that if such remaining Term is not equal to the
maturity of an actively traded U.S. Treasury issue, such yield shall be
obtained by linear interpolation from the yields of actively traded U.S.
Treasury issues having the greater maturity closest to and the lesser maturity
closest to such remaining Term (the “Default Discount Rate”).
	 
	 	(iii)  	If Lessor sells, leases, or otherwise disposes of all or any
of the Cars, Lessor may recover from Lessee, in addition to any rent accrued
and unpaid as of the date of Lessor’s recovery of possession of the Cars, the

23

 

	 	   	present value computed by using a discount rate equal to the Default
Discount Rate of the difference between (i) the rent for the remainder of
the Term respecting such Cars and (ii) except in the case of a substantially
similar lease, the fair market rental value (as determined by an appraiser
selected by Lessor in its sole discretion) for such Cars for the remainder
of the Term, or (iii) in the case of a lease of Cars which is substantially
similar to this Agreement for a substantially similar term, the total rent
for the lease term of such substantially similar lease.
	 
	 	(iv)  	Time of performance of Lessee’s obligations hereunder is of
the essence. All remedies of Lessor hereunder are cumulative, and may, to the
extent permitted by law, be exercised concurrently or separately and the
exercise of any one remedy shall not be deemed to be an election of such
remedy to the exclusion of any other remedy or to preclude the exercise of any
other remedy at any other time. Failure on the part of Lessor to exercise, or
delay in exercising, any right or remedy hereunder or Lessor’s failure at any
time to require performance by Lessee of any of the provisions hereof shall
not operate as a waiver thereof; nor shall any single or partial exercise of
Lessor of any right or remedy hereunder preclude any other further exercise
thereof or the exercise of any other right or remedy. Lessee shall be liable
for all expenses incurred by Lessor in exercising the remedies provided
hereunder, including, but not limited to, court costs and expenses of internal
counsel, based upon time spent. Lessee shall pay to Lessor interest on any
overdue payments under Section 17 or amounts due under this Section 19 after
demand therefor and until paid at a rate per annum equal to the lesser of the
Past Due Rate and the maximum amount permitted by applicable law.

20. Mandated
Modifications. If the DOT, any other governmental agency, or organization
having jurisdiction over the operation, safety or use of railroad equipment, requires modifications
to the Car(s) subject to this Agreement in order to qualify the Car(s) for operation in railroad
interchange, Lessor shall perform such modifications at its own cost and expense (subject to the
final sentence of this Section 20), and Lessee must pay an additional monthly charge of $1.75 per
Car for each $100 expended by Lessor on the Car. Such obligation by Lessee arises on the date
the Car is released from the shop after application of the modifications (“Modifications”). If
Lessor reasonably determines that the cost of making Modifications is uneconomic (other than
solely as a result of an increase following the date of the applicable Rider in the labor or
material
cost of such repairs), Lessor shall so notify Lessee, whereupon such Car(s) shall be deemed to
have suffered an Event of Loss.

21. Substitution
of Car(s). Unless as otherwise set forth in the applicable Rider, Lessor
may
substitute for any Car another Car of the same type and capacity with the prior consent of Lessee
which consent shall not be unreasonably withheld. The rent for the substituted Car will
commence upon delivery of such Car to Lessee.

24

 

22. Transaction
Expenses. Each of Lessee and Lessor shall be responsible for its own
costs and
expenses incurred in connection with the transactions contemplated by this Agreement and each
Rider. Lessor shall be responsible for the costs and expenses of any filings with the Surface
Transportation Board and the Registrar General of Canada and of the opinions of Alvord and
Alvord and McCarthy Tetrault LLP with respect thereto.

23.
Notice. All notices and other communications permitted or required by the provisions of
this
Agreement shall be in writing and shall be sent certified mail, return receipt requested, or faxed
with a confirmation sheet confirming receipt attached, to the following addresses:

	 	 	 
	If to Lessee:

	 	NRG Power Marketing Inc.
	

	 	211 Carnegie Center
	

	 	Princeton, New Jersey 08540
	

	 	Attn: Director, Coal & Emissions
	

	 	Fax: (609) 524-4540
	 
	 	 
	

	 	Copy: General Counsel
	

	 	Fax: (609) 524-4589
	 
	 	 
	If to Lessor:

	 	General Electric Railcar Services Corporation
	

	 	161 North Clark
	

	 	7th Floor
	

	 	Chicago, Illinois 60601
	

	 	Attn: Risk Management
	

	 	Fax: (312) 853-5023
	 
	 	 
	

	 	with a copy to:
	 
	 	 
	

	 	General Electric Railcar Services Corporation
	

	 	161 North Clark
	

	 	7th Floor
	

	 	Chicago, Illinois 60601
	

	 	Attn: Vice President - Sales
	

	 	Fax: (312) 853-5518

24. Exclusion of
Warranties. LESSEE ACKNOWLEDGES AND AGREES THAT, AS
BETWEEN LESSOR AND LESSEE (I) EACH CAR IS OF A SIZE, DESIGN, CAPACITY
AND MANUFACTURE SELECTED BY AND ACCEPTABLE TO LESSEE, (II) LESSEE IS
SATISFIED THAT EACH CAR IS SUITABLE FOR ITS PURPOSES, (III) LESSOR IS NOT A
MANUFACTURER IN PROPERTY OF SUCH KIND, (IV) EACH CAR IS LEASED
HEREUNDER SUBJECT TO ALL APPLICABLE LAWS AND GOVERNMENTAL
REGULATIONS NOW IN EFFECT OR HEREAFTER ADOPTED, AND (V) LESSOR
LEASES TO LESSEE AND LESSEE TAKES EACH CAR “AS-IS”, “WHERE-IS” AND
“WITH ALL FAULTS”, AND LESSEE ACKNOWLEDGES THAT LESSOR HAS NOT
MADE, AND LESSOR HEREBY EXPRESSLY DISCLAIMS, ANY AND ALL
WARRANTIES OR REPRESENTATIONS EITHER EXPRESS OR IMPLIED, AS TO THE

25

 

VALUE, CONDITION, FITNESS FOR ANY PARTICULAR PURPOSE, DESIGN, OPERATION, MERCHANTABILITY
THEREOF OR AS TO THE TITLE, OF THE CARS, THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREOF OR
CONFORMITY THEREOF TO SPECIFICATIONS, OR ANY OTHER EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY
WHATSOEVER WITH RESPECT THERETO, NOR DOES LESSOR HAVE ANY LIABILITY FOR ANY CONSEQUENTIAL OR
INCIDENTAL DAMAGES ARISING OUT OF THIS AGREEMENT OR IN CONNECTION WITH ANY CAR, it being agreed
that all such risks, as between Lessor and Lessee, are to be borne by Lessee, provided that the
foregoing shall not affect the obligations for maintenance and repair to which Lessor expressly
agrees in this Agreement or any Rider.

25. Entire Agreement; Counterparts; Severability. This Agreement represents the entire
agreement and may not be modified, altered, or amended, except by an agreement in writing
signed by the parties. On or after September 30, 2005 but not later than October 31, 2005, Lessor
and Lessee agree that any Initial Rider may be amended solely for the purpose of modifying the
number of Cars subject to such Rider. This Agreement may be executed in any number of
counterparts, each executed counterpart constituting an original and in each case such
counterparts shall constitute but one and the same instrument. To the extent that any Rider
would constitute chattel paper, as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction, no security interest therein may be created through the
transfer or possession of this Agreement in and of itself without the transfer or possession of the
original of a Rider executed pursuant to this Agreement and incorporating this Agreement by
reference; and no security interest in this Agreement and a Rider may be created by the transfer
or possession of any counterpart of a Rider other than the original thereof, which shall be
identified as the document marked “Original” and all other counterparts shall be marked
“Duplicate”. Any provision of this Agreement or any Rider which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or
unenforceability without invalidating the remaining provisions hereof. To the extent permitted
by applicable law, Lessee hereby waives any provision of any law which prohibits or renders
unenforceable any provisions hereof in any respect.

26. Compliance with Laws. Lessee agrees to comply with all federal, state, and local
laws,
rules, and regulations promulgated by any governmental authority or industry agency or authority
which has proper jurisdiction to regulate the leasing, operation, maintenance, or use of the
Car(s).
Lessor agrees to comply with such laws, rules and regulations applicable to railcar owners or
Lessors promulgated by such authority or agency which has proper jurisdiction to regulate the
ownership and leasing and maintenance procedures applicable to the Car(s).

27. Applicable Law. The terms of this Agreement will be governed by the internal laws of
the
State of Illinois (without reference to conflicts of law provisions).

28. Survival. The representations, warranties and agreements of Lessee herein shall be
deemed
to be continuing and to survive the execution and delivery of this Agreement, each Rider and any
other Operative Agreement to which Lessee or Lessor is a party. With respect to each Rider, the
obligations of Lessee and Lessor under Sections 7, 8, 10, 16, 17, 20 and 22 hereof, together with
any of Lessee’s or Lessor’s obligations under the other provisions of this Agreement (as

26

 

incorporated therein) which have accrued but not been fully satisfied, performed or
complied with prior to the expiration or earlier cancellation or termination of such Rider, shall
survive the expiration or earlier cancellation or termination thereof.

29. Financial Statements; Reports; Insurance Certificate Grant of Security Interest; Further
Assurances.

	 	A.  	Lessee will furnish to Lessor: (i) within ninety (90) days after the end of
each
fiscal year of Guarantor a consolidated balance sheet of Guarantor and its
consolidated subsidiaries as at the end of such year, and the related statement of
income, stockholder’s equity and cash flows showing the financial position of
Guarantor and its consolidated subsidiaries as of the close of such fiscal year
prepared in accordance with GAAP, all in reasonable detail and certified by
independent certified public accountants of recognized standing selected by
Guarantor (it being agreed that if Guarantor files a Form 10-K with the United
States Securities and Exchange Commission (the “SEC”), that delivery of such
Form 10-K shall be deemed to satisfy the requirements of this subsection (i)), (ii)
within forty-five (45) days after the end of each of the first three fiscal quarters
of
Guarantor’s fiscal year, an unaudited consolidated balance sheet of Guarantor and
its consolidated subsidiaries as at the end of such fiscal quarter, and the related
statement of income, stockholder’s equity and cash flows showing the financial
position of Guarantor and its consolidated subsidiaries as of the close of such
fiscal quarter, prepared in accordance with GAAP and certified to accuracy by an
officer of Guarantor (it being agreed that if Guarantor files a Form 10-Q with the
SEC, that delivery of such Form 10-Q shall be deemed to satisfy the requirements
of this subsection (ii)), (iii) concurrently with any delivery of financial
statements
under this paragraph A, a certificate (or a copy of the certificate (or relevant
portion thereof) delivered under the Senior Credit Agreement) setting forth
computations demonstrating compliance with the covenants contained in Section
14 and setting forth the calculations of all applicable terms defined therein, (iv)
on
each anniversary date of this Agreement a certificate of insurance covering the
Cars, and (v) promptly from time to time such other information regarding the
operations, business affairs and financial condition of Lessee or Guarantor as
Lessor may reasonably request.
	 
	 	B.  	Lessee shall immediately notify Lessor upon Lessee or Guarantor obtaining
actual
knowledge of: (i) each Event of Loss or accident involving or allegedly involving
any Car, (ii) any lien which shall have attached to any Car by or through Lessee or
any sublessee, (iii) the occurrence of any Event of Default or any event which,
with the giving of notice or lapse of time or both, would constitute an Event of
Default known to Lessee, and (iv) each written amendment to the Senior Credit
Agreement relating to the financial covenants contained in Section 14 hereof, but
in any case not more than five (5) days after the effectiveness of such amendment.
	 
	 	C.  	(i) Lessee and Lessor intend that: (1) each Rider, incorporating by reference
the
terms of this Agreement, constitutes a true “lease” as such terms are defined in

27

 

	 	   	Article 2A of the UCC and not a sale or retention of a security interest; and
(2) Lessor is and shall remain the owner of each Car, and Lessee shall not acquire
any right, title or interest in or to any Car except the right to use it in
accordance with the terms of this Agreement and the applicable Rider, (i) In order
to secure the prompt payment of rent and all of the other amounts from time to time
outstanding with respect hereto and to each Rider, and the performance and
observance by Lessee of all of the provisions hereof and thereof and of all of the
other Operative Agreements, Lessee hereby collaterally assigns, grants, and conveys
to Lessor, a security interest in and lien on all of Lessee’s right, title and
interest in and to all of the following (whether now existing or hereafter created,
and including any other collateral described on any rider hereto; the “Collateral”):
(1) (if contrary to the parties’ intentions a court determines that this Agreement
and any Rider is not a true “lease” under the UCC) the Cars described in such Rider
or otherwise covered thereby and all additions, attachments, accessories and
accessions thereto whether or not furnished by the Seller; (2) all subleases,
chattel paper, accounts, security deposits, and general intangibles relating
thereto, and any and all substitutions, replacements or exchanges for any Car or
other collateral, in each such case in which Lessee shall from time to time acquire
an interest; and (3) any and all insurance and/or other proceeds of the property and
other collateral in and against which a security interest is granted hereunder. The
collateral assignment, security interest and lien granted herein shall survive the
termination, cancellation or expiration of each Rider until such time as Lessee’s
obligations thereunder and under the other Operative Agreements are fully and
indefeasibly discharged. In furtherance of the forgoing, Lessee irrevocably
authorizes Lessor to file UCC financing statements, and other filings with respect
to the Cars or any Collateral. Without Lessor’s prior written consent, Lessee agrees
not to file any corrective or termination statements or partial releases with
respect to any UCC financing statements filed by Lessor pursuant to this Agreement.
(d) If contrary to the parties’ intentions a court determines that any Rider is not
a true “lease”, the parties agree that in such event Lessee agrees that: (1) with
respect to the Cars, in addition to all of the other rights and remedies available
to Lessor hereunder upon the occurrence of an Event of Default, Lessor shall have
all of the rights and remedies of a first priority secured party under the UCC; and
(2) any obligation to pay rent or any other amount payable hereunder or under any
Rider, to the extent constituting the payment of interest, shall be at an interest
rate that is equal to the lesser of the maximum lawful rate permitted by applicable
law or the effective interest rate used by Lessor in calculating such amounts.

30. Definitions and Rules of Construction. A. The following terms when used in this
Agreement or in any Rider have the following meanings:

	 	(i)  	“applicable law” or “law”: any law, rule, regulation,
ordinance, order, code, common law, interpretation, judgment, directive,
decree, treaty, injunction, writ, determination, award, permit or similar norm
or decision of any governmental authority;

28

 

	 	(ii)  	“Balance Sheet Date”: (i) for purposes of this Agreement,
December 31, 2003, and (ii) for purposes of any Rider, the Balance Sheet
Date set forth in such Rider.
	 
	 	(iii)  	“Business Day”: (i) for purposes of delivery, inspection and
acceptance of Cars hereunder, any day other than a Saturday, a Sunday or a day
on which commercial banking institutions are authorized or required by law,
regulation or executive order to be closed in Princeton, NJ, Chicago, EL, or
Danville, Illinois, and (ii) for all other purposes, any day other than a
Saturday, a Sunday or a day on which commercial banking institutions are
authorized or required by law, regulation or executive order to be closed in
Princeton, NJ or Chicago, IL. Any obligation required to be performed by any
party hereunder or under any Rider on a date which is not a Business Day shall
be performed on the next succeeding Business Day.
	 
	 	(iv)  	“Fair Market Rental Value”: in connection with any Renewal
Term set forth in any Rider and with respect to any Car, means the cash rent
obtainable for such Car in an arm’s length lease between an informed and
willing lessee under no compulsion to lease and an informed and willing lessor
under no compulsion to lease as the same shall be specified by agreement
between Lessor and Lessee. In making such determination, costs of removal from
the location of current use shall not be a deduction from such rent and it
shall be assumed that the Cars have been maintained in the condition required
by this Agreement and collected in one place on the lines of Lessee as
directed by Lessor. Fair Market Rental Value of any Car shall be determined,
except as otherwise provided in any Operative Agreement, on the assumption
that such Car has been maintained in the condition required by this Agreement
and is in the condition required under Section 10 and that Lessee is in
compliance with this Agreement and the applicable Rider and the other
Operative Agreements;
	 
	 	(v)  	“governmental authority”: any Federal, state, county,
municipal, regional or other governmental authority, agency, board, body,
instrumentality or court, in each case, whether domestic or foreign;
	 
	 	(vi)  	“Initial Riders”: Collectively one or more Riders providing
for the lease by Lessor to Lessee of up to 1500 Cars manufactured by Johnstown
America for an aggregate Capitalized Lessor’s Cost of up to $94,447,276.
	 
	 	(vii)  	“Lessor Lien”: any lien affecting, on or in respect of, any
Car, this Agreement or any Rider arising as a result of (i) claims against
Lessor unrelated to the transactions contemplated by the Operative Agreements,
(ii) acts of Lessor unrelated to the transactions contemplated by the
Operative Agreements, (iii) acts or omissions in breach of any covenant or
agreement of Lessor set forth in any of the Operative Agreements, or (iv) any
claim by or through any subcontractor of Lessor relating to the

29

 

	 	   	performance of maintenance, repairs, or modifications required to be
performed by Lessor under the Lease, excluding, in each case, any acts or
omissions of Lessor occurring after an Event of Default has occurred and is
continuing;
	 
	 	(viii)  	“Reference Date”: (i) for purposes of this Agreement, December 17, 2004, and
(ii) for purposes of any Rider, the Reference Date set forth in such Rider.
	 
	 	(ix)  	“Train Set”: (i) with respect to each Initial Rider,
collectively, not less than 120 Cars nor more than 130 cars, as elected by
Lessee upon delivery (provided that up to two (2) Initial Riders may be for
less than 120 Cars at Lessee’s election), and (ii) with respect to any other
Rider, collectively 130 Cars;
	 
	 	(x)  	“UCC” or “Uniform Commercial Code”: the Uniform Commercial Code
as in effect in the State of Illinois or in any other applicable jurisdiction;
and any reference to an article (including Article 2A) or section thereof shall
mean the corresponding article or section (however termed) of any such other
applicable version of the Uniform Commercial Code.

	 	B.  	The following terms when used herein or in any Rider shall be construed as
follows: “herein,” “hereof,” “hereunder,” etc.: in, of, under, etc. this Agreement
or such other Operative Agreement in which such term appears (and not merely
in, of, under, etc. the section or provision where the reference occurs);
“including”: containing, embracing or involving all of the enumerated items, but
not limited to such items unless such term is followed by the words “and limited
to,” or similar words; and “or”: at least one, but not necessarily only one, of the
alternatives enumerated. Any defined term used in the singular preceded by “any”
indicates any number of the members of the relevant class. Any Operative
Agreement or other agreement or instrument referred to herein means such
agreement or instrument as supplemented and amended from time to time. Any
reference to Lessor or Lessee shall include their permitted successors and assigns.
Any reference to a law shall also mean such law as amended, superseded or
replaced from time to time.
	 
	 	C.  	Terms used but not defined herein shall have the meanings specified in the
applicable Rider.

31. True
Lease. It is the intent of the parties to this Agreement that each Rider
incorporating this Agreement be, such Rider shall be, a true lease for all tax purposes and that
Lessor shall be entitled to any and all federal and state tax credits and benefits available to
the owner of the Car(s). Lessor shall at all times be the owner of the Car(s) which are the
subject of such Rider for all purposes, such Rider conveying to Lessee no right, title or interest
in any Car(s) except as lessee.

30

 

[signature page follows]

31

 

          IN WITNESS WHEREOF, the parties hereto intending to be legally bound hereby have caused
this Lease Agreement to be duly executed by their respective authorized representatives all as of
the day and year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	Accepted on Behalf Of:	 	 	 	Accepted on Behalf of:
	 
		 	 	 	 	 	 		 	 
	NRG Power Marketing Inc.	 	 	 	General Electric Railcar Services
	 		 	 	 	 	 	Corporation
	 
		 	 	 	 	 	 		 	 
	By:

	/s/ Thomas N. May
	 	 	 	By:		 	 
	

	 
	 	 	 	 	 
	Name:

	Thomas N. May	 	 	 	Name:	 	 
	

		 	 	 	 	 	 	 	 
	Title:

	Vice President	 	 	 	Title:	 	 
	

		 	 	 	 	 	 	 	 
	

	 	NRG Power Marketing
Inc.	 	 	 	 		 	 

 

 

          IN WITNESS WHEREOF, the parties hereto intending to be legally bound hereby have caused
this Lease Agreement to be duly executed by their respective authorized representatives all as of
the day and year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	Accepted on Behalf Of:	 	 	 	Accepted on Behalf of:	
	 
		 	 	 	 	 	 		 	 
	NRG Power Marketing Inc.	 	 	 	General Electric Railcar Services
	 		 	 	 	 	 	Corporation
	 
		 	 	 	 	 	 		 	 
	By:

		 	 	 	 	 	By:
	/s/ James N. Muday
	 	 
	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:
	James N. Muday
	

		 	 	 	 	 		 	 
	Title:

	 	 	 	 	 	Title:
	Vice President

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