Document:

<PAGE>
                                                                    EXHIBIT 4.23

================================================================================

                        NRG PEAKER FINANCE COMPANY LLC,

                                   as Issuer,

                         BAYOU COVE PEAKING POWER, LLC,
                         BIG CAJUN I PEAKING POWER LLC,
                     NRG ROCKFORD LLC, NRG ROCKFORD II LLC,
                         AND NRG STERLINGTON POWER LLC,
                                 as Guarantors

                                      AND

                           XL CAPITAL ASSURANCE INC.,

                                   as Insurer

                                       TO

                              THE BANK OF NEW YORK,

                                   as Trustee

                                   ----------
                                    INDENTURE

                            Dated as of June 18, 2002

                                   ----------

                                  $325,000,000

              Series A Floating Rate Senior Secured Bonds due 2019

                  Additional Floating Rate Senior Secured Bonds
                   Additional Fixed Rate Senior Secured Bonds

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                                TABLE OF CONTENTS

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PARTIES..................................................................................................................1
RECITALS OF THE COMPANY..................................................................................................1

                                                            ARTICLE ONE

                                       DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.01. Definitions..................................................................................................1
    Accelerated Bond Obligations...........................................................................................2
    Acceptable Assignee....................................................................................................2
    Act....................................................................................................................2
    Additional Bonds.......................................................................................................2
    Additional Fixed Rate Bonds............................................................................................2
    Additional Floating Rate Bonds.........................................................................................2
    Affiliate..............................................................................................................2
    Agent Member...........................................................................................................2
    Applicable Procedures..................................................................................................2
    Authenticating Agent...................................................................................................2
    Authorized Officer.....................................................................................................3
    Bankruptcy Event.......................................................................................................3
    Board..................................................................................................................3
    Board Resolution.......................................................................................................3
    Bond Obligations.......................................................................................................3
    Bonds..................................................................................................................3
    Bonds Register.........................................................................................................3
    Bonds Registrar........................................................................................................3
    Business Day...........................................................................................................3
    Calculation Agent......................................................................................................3
    Certificated Bonds.....................................................................................................3
    Closing Date...........................................................................................................3
    Code...................................................................................................................3
    Collateral.............................................................................................................4
    Collateral Agent.......................................................................................................4
    Common Agreement.......................................................................................................4
    Company................................................................................................................4
    Company Request; Company Order.........................................................................................4
    Controlling Party......................................................................................................4
    Corporate Trust Office.................................................................................................4
    corporation............................................................................................................4
    Debt...................................................................................................................4
    Depositary.............................................................................................................4
    Depositary Agreement...................................................................................................4
    Dollars; $.............................................................................................................4
</Table>

                                       ii
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<S>                                                                                                                       <C>
    DTC....................................................................................................................4
    Exchange Act...........................................................................................................4
    Financing Documents....................................................................................................4
    Financing Parties......................................................................................................4
    GAAP...................................................................................................................4
    Global Bond............................................................................................................5
    Guarantors.............................................................................................................5
    Guaranty...............................................................................................................5
    Holder.................................................................................................................5
    Indenture..............................................................................................................5
    Initial Principal Amount...............................................................................................5
    Institutional Accredited Investor......................................................................................5
    instrument.............................................................................................................5
    Insurance and Reimbursement Agreement..................................................................................5
    Insurer................................................................................................................5
    Insurer Default........................................................................................................5
    Interest Period........................................................................................................5
    Issue Date.............................................................................................................5
    Issuer Event of Default................................................................................................6
    Issuer Permitted Debt..................................................................................................6
    Investment Company Act.................................................................................................6
    Legend.................................................................................................................6
    London Business Day....................................................................................................6
    Management Committee...................................................................................................6
    money..................................................................................................................6
    Moody's................................................................................................................6
    Non-Permitted Holder...................................................................................................6
    Non-Recourse Persons...................................................................................................6
    Notice of Default......................................................................................................6
    NRG Energy.............................................................................................................6
    Obligations............................................................................................................6
    Officer's Certificate..................................................................................................6
    Operative Documents....................................................................................................6
    Opinion of Counsel.....................................................................................................6
    Optional Redemption Price..............................................................................................7
    Outstanding............................................................................................................7
    Paying Agent...........................................................................................................7
    Permitted Change of Control............................................................................................7
    Permitted Peaker Buyout................................................................................................7
    Permitted Peaker Buyout (Completion/Loss Event)........................................................................8
    Person.................................................................................................................8
    Place of Payment.......................................................................................................8
    Policy.................................................................................................................8
    Predecessor Bond.......................................................................................................8
    Project Companies......................................................................................................8
    Project Event of Default...............................................................................................8
    Project Revenues.......................................................................................................8
    QIB....................................................................................................................8
    Qualified Purchaser....................................................................................................8
</Table>

                                      iii
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    Rating Agency..........................................................................................................8
    Redemption Date........................................................................................................8
    Redemption Premium.....................................................................................................8
    Reference Banks........................................................................................................8
    Regular Record Date....................................................................................................8
    Regulation D...........................................................................................................8
    Regulation S...........................................................................................................8
    Regulation S Certificated Bonds........................................................................................9
    Remaining Principal Amount.............................................................................................9
    Restricted Certificated Bonds..........................................................................................9
    Restricted Global Bonds................................................................................................9
    Rule 144...............................................................................................................9
    Rule 144A..............................................................................................................9
    Rule 144A Information..................................................................................................9
    Scheduled Payment Date.................................................................................................9
    Scheduled Payments.....................................................................................................9
    Securities Act.........................................................................................................9
    security...............................................................................................................9
    Series A Bonds.........................................................................................................9
    Standard & Poor's......................................................................................................9
    Stated Maturity........................................................................................................9
    Swap Agreement.........................................................................................................9
    Swap Counterparty......................................................................................................9
    Swap Obligations.......................................................................................................9
    Telerate Page 3750....................................................................................................10
    Three-Month USD-LIBOR-BBA.............................................................................................10
    Trustee...............................................................................................................10
    UCC...................................................................................................................10
    United States.........................................................................................................10
    U.S...................................................................................................................10
    USD-LIBOR-BBA Determination Date......................................................................................10

SECTION 1.02. Form of Documents Delivered to the Trustee and the Insurer..................................................10

SECTION 1.03. Compliance Certificates and Opinions........................................................................11

SECTION 1.04. Acts of Holders; Record Dates...............................................................................12

SECTION 1.05. Notices, Etc., to Trustee, Company and Insurer..............................................................13

SECTION 1.06. Notice to Holders...........................................................................................14

SECTION 1.07. Waiver .....................................................................................................14

SECTION 1.08. Effect of Headings and Table of Contents....................................................................14

SECTION 1.09. Successors and Assigns......................................................................................14

SECTION 1.10. Separability Clause.........................................................................................14
</Table>

                                       iv
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SECTION 1.11. Benefits of Indenture.......................................................................................15

SECTION 1.12. Governing Law...............................................................................................15

SECTION 1.13. Business Day Convention.....................................................................................15

SECTION 1.14. Waiver of Jury Trial........................................................................................15

                                                             ARTICLE TWO

                                                              BOND FORMS

SECTION 2.01. Forms Generally.............................................................................................15

SECTION 2.02. Form of Legends.............................................................................................16

SECTION 2.03. Form of Legend for Restricted Global Bonds..................................................................18

SECTION 2.04. Form of Trustee's Certificate of Authentication.............................................................18

                                                            ARTICLE THREE

                                                              THE BONDS

SECTION 3.01. Title and Terms.............................................................................................19

SECTION 3.02. Additional Bonds............................................................................................19

SECTION 3.03. Denominations...............................................................................................20

SECTION 3.04. Execution, Authentication, Delivery and Dating..............................................................20

SECTION 3.05. Temporary Bonds.............................................................................................20

SECTION 3.06. Registration, Registration of Transfer and Exchange.........................................................21

SECTION 3.07. Restrictions on Transfer....................................................................................22

SECTION 3.08. Mutilated, Destroyed, Lost and Stolen Bonds.................................................................26

SECTION 3.09. Payment of Principal and Interest...........................................................................26

SECTION 3.10. Persons Deemed Owners.......................................................................................27

SECTION 3.11. Cancellation................................................................................................28

SECTION 3.12. CUSIP, ISIN and Common Code Numbers.........................................................................28
</Table>

                                       v
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SECTION 3.13. Tax Treatment...............................................................................................28

SECTION 3.14. Section 3(c)(7) of the Investment Company Act Procedures for Restricted Global Bonds........................29

SECTION 3.15. Certain Transactions Void; Company Right to Force Sale or Redemption........................................30

                                                             ARTICLE FOUR

                                                               GUARANTY

SECTION 4.01. Guaranty ..................................................................................................31

                                                             ARTICLE FIVE

                                                      SATISFACTION AND DISCHARGE

SECTION 5.01. Satisfaction and Discharge of Indenture.....................................................................31

                                                             ARTICLE SIX

                                                               REMEDIES

SECTION 6.01. Acceleration of Maturity and Rescission and Annulment by the Holders........................................32

SECTION 6.02. Suits for Enforcement by Trustee............................................................................33

SECTION 6.03. Reserved ...................................................................................................33

SECTION 6.04. Application of Money Collected..............................................................................33

SECTION 6.05. Reserved ...................................................................................................33

SECTION 6.06. Trustee May File Proofs of Claim............................................................................33

SECTION 6.07. Trustee May Enforce Claims Without Possession of Bonds......................................................34

SECTION 6.08. Limitation on Suits.........................................................................................34

SECTION 6.09. Unconditional Right of Holders to Receive Principal and Interest............................................35

SECTION 6.10. Restoration of Rights and Remedies..........................................................................35

SECTION 6.11. Remedies Not Exclusive......................................................................................35

SECTION 6.12. Delay or Omission Not Waiver................................................................................35
</Table>

                                       vi
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SECTION 6.13. Control of Proceedings......................................................................................36

SECTION 6.14. Waiver of Past Defaults.....................................................................................36

SECTION 6.15. Undertaking for Costs.......................................................................................36

SECTION 6.16. Waiver of Usury, Stay or Extension Laws.....................................................................37

                                                            ARTICLE SEVEN

                                                             THE TRUSTEE

SECTION 7.01. Certain Duties and Responsibilities.........................................................................37

SECTION 7.02. Notice of Defaults..........................................................................................38

SECTION 7.03. Certain Rights of Trustee...................................................................................38

SECTION 7.04. Not Responsible for Recitals or Issuance of Bonds...........................................................40

SECTION 7.05. May Hold Bonds..............................................................................................40

SECTION 7.06. Money Held in Trust.........................................................................................40

SECTION 7.07. Compensation and Reimbursement..............................................................................40

SECTION 7.08. Corporate Trustee Required; Eligibility.....................................................................41

SECTION 7.09. Resignation and Removal; Appointment of Successor...........................................................41

SECTION 7.10. Acceptance of Appointment by Successor......................................................................43

SECTION 7.11. Appointment of Co-Trustee...................................................................................43

SECTION 7.12. Merger, Conversion, Consolidation or Succession to Business.................................................44

SECTION 7.13. Appointment of Authenticating Agent.........................................................................44

                                                            ARTICLE EIGHT

                                           HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 8.01. Company to Furnish Trustee Names and Addresses of Holders...................................................46

SECTION 8.02. Preservation of Information; Communications to Holders......................................................46

SECTION 8.03. Reports by Company and Project Companies....................................................................46
</Table>

                                      vii
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                                                             ARTICLE NINE

                                         CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 9.01. Company May Consolidate, Etc., Only on Certain Terms........................................................47

SECTION 9.02. Successor Substituted.......................................................................................48

                                                             ARTICLE TEN

                                                       SUPPLEMENTAL INDENTURES

SECTION 10.01. Supplemental Indentures Without Consent of Holders.........................................................48

SECTION 10.02. Supplemental Indentures With Consent of Holders............................................................49

SECTION 10.03. Execution of Supplemental Indentures.......................................................................50

SECTION 10.04. Effect of Supplemental Indentures..........................................................................50

SECTION 10.05. Reference in Bonds to Supplemental Indentures..............................................................50

                                                            ARTICLE ELEVEN

                                                              COVENANTS

SECTION 11.01. Payment of Principal, Optional Redemption Price and Interest...............................................51

SECTION 11.02. Maintenance of Office or Agency............................................................................51

SECTION 11.03. Money for Bond Payments to Be Held in Trust................................................................52

SECTION 11.04. Statement by Officers as to Default........................................................................53

SECTION 11.05. Waiver of Certain Covenants................................................................................53

                                                            ARTICLE TWELVE

                                                         REDEMPTION OF BONDS

SECTION 12.01. Right of Redemption........................................................................................53

SECTION 12.02. Election to Redeem; Notice to Trustee......................................................................54

SECTION 12.03. Notice of Redemption.......................................................................................54

SECTION 12.04. Deposit of Optional Redemption Price.......................................................................55
</Table>

                                      viii
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SECTION 12.05. Bonds Payable on Redemption Date...........................................................................55

SECTION 12.06. Bonds Redeemed in Part.....................................................................................55

                                                           ARTICLE THIRTEEN

                                                         TERM AND TERMINATION

                                                           ARTICLE FOURTEEN

                                               NOTICES BY TRUSTEE AND CALCULATION AGENT

SECTION 14.01. Notices by Trustee to Insurer of Payments on Policy........................................................56

SECTION 14.02. Notice by Calculation Agent to Swap Counterparty of Calculation of Three-Month USD-LIBOR-BBA...............57

                                                           ARTICLE FIFTEEN

                                                          SCOPE OF LIABILITY

Signatures................................................................................................................59
</Table>

                                    EXHIBITS

Exhibit A-1   Form of Series A Bond

Exhibit A-2   Form of Additional Fixed Rate Senior Secured Bond

Exhibit B     Certificate for Transfers of Restricted Global Bonds, Regulation S
              Certificated Bonds and Restricted Certificated Bonds

Exhibit C-1   Transferor Certificate for Transfers from Restricted Global Bond
              to Regulation S Certificated Bond

Exhibit C-2   Transferor Certificate for Transfers from Restricted Global Bond
              to Restricted Certificated Bond

Exhibit C-3   Transferor Certificate for Transfers from Regulation S
              Certificated Bond or Restricted Certificated Bond to Restricted
              Global Bond

Exhibit D-1   Investor Certificate for Transfers to Regulation S Certificated
              Bonds

Exhibit D-2   Investor Certificate for Transfers to Restricted Certificated
              Bonds

Exhibit D-3   Investor Certificate for Transfers to Restricted Global Bonds

Exhibit E     Form of Supplemental Indenture relating to the issuance of
              Additional Bonds

                                       ix
<PAGE>

         INDENTURE, dated as of June 18, 2002, among NRG Peaker Finance Company
LLC, a limited liability company duly organized and existing under the laws of
the State of Delaware, (herein called the "Company"), having its principal
office at 901 Marquette Avenue, Suite 2800, Minneapolis, MN 55402-3265, Bayou
Cove Peaking Power, LLC, Big Cajun I Peaking Power LLC, and NRG Sterlington
Power LLC, each a Delaware limited liability company, NRG Rockford LLC and NRG
Rockford II LLC, each an Illinois limited liability company (herein collectively
called the "Guarantors" or the "Project Companies"), XL Capital Assurance Inc.,
a New York stock insurance company (herein called the "Insurer"), and The Bank
of New York, as Trustee (herein called the "Trustee").

                             RECITALS OF THE COMPANY

           The Company has duly authorized (i) the creation of an issue of
Series A Floating Rate Senior Secured Bonds due 2019 (the "Series A Bonds") of
the tenor and amount hereinafter set forth and (ii) the issuance from time to
time of additional series of floating rate and fixed rate senior secured bonds
as herein provided (the "Additional Floating Rate Bonds" and "Additional Fixed
Rate Bonds", as appropriate, and together, the "Additional Bonds"), and to
provide for such Series A Bonds and Additional Bonds, the Company has duly
authorized the execution and delivery of this Indenture.

         All things necessary to make the Series A Bonds, when executed by the
Company and authenticated and delivered under this Indenture and duly issued by
the Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         For and in consideration of the premises and the purchase of the Bonds
by their Holders, it is mutually agreed, for the equal and proportionate benefit
of all Holders of the Bonds, as follows:

                                   ARTICLE ONE

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.01. Definitions.

         For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

                  (1) the terms defined in this Article have the meanings
         assigned to them in this Article and include the plural as well as the
         singular;

                  (2) all accounting terms not otherwise defined herein have the
         meanings assigned to them in accordance with United States generally
         accepted accounting principles ("GAAP") and, except as otherwise
         expressly provided in this Indenture, the

                                       1
<PAGE>

         term GAAP, with respect to any computation required or permitted
         hereunder shall mean such accounting principles as in effect at the
         date of such computation;

                  (3) unless the context otherwise requires, any reference to an
         "Article", "Section" or "Exhibit" refers to an Article or a Section of,
         or an Exhibit to, this Indenture, as applicable;

                  (4) the words "herein", "hereof" and "hereunder" and other
         words of similar import refer to this Indenture as a whole and not to
         any particular Article, Section or other subdivision;

                  (5) "or" is not exclusive;

                  (6) "including" means including without limitation;

                  (7) any agreement, instrument or statute referred to in this
         Indenture or in any instrument or certificate delivered in connection
         with this Indenture means such agreement, instrument or statute as
         amended, modified or supplemented from time to time as permitted hereby
         in the case of agreements or instruments and includes (in the case of
         agreements or instruments) references to all attachments thereto and
         instruments incorporated therein; and

                  (8) references to a Person are also to its permitted
         successors and assigns, unless otherwise provided.

         "Accelerated Bond Obligations" has the meaning specified in Section
6.01.

         "Acceptable Assignee" has the meaning assigned to it in the Common
Agreement.

         "Act" when used with respect to any Holder, has the meaning specified
in Section 1.03.

         "Additional Bonds" has the meaning specified in the recitals to this
Indenture.

         "Additional Fixed Rate Bonds" has the meaning specified in the recitals
to this Indenture.

         "Additional Floating Rate Bonds" has the meaning specified in the
recitals to this Indenture.

         "Affiliate" has the meaning assigned to it in the Common Agreement.

         "Agent Member" means a member of, or participant in, the Depositary.

         "Applicable Procedures" means the rules and procedures of the
Depositary to the extent applicable.

         "Authenticating Agent" has the meaning specified in Section 7.13.

                                       2
<PAGE>

         "Authorized Officer" means:

         (1) with respect to the Trustee, any officer within the Corporate Trust
Office of the Trustee, including any Vice President, Assistant Vice President,
Assistant Secretary, Assistant Treasurer, Trust Officer or other officer of the
Trustee 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 Indenture;

         (2) with respect to the Insurer, the Chairman of the Board of the
Insurer, the President, Executive Vice President, General Counsel or Associate
General Counsel or any Managing Director or Director of the Insurer; and

         (3) with respect to the Company or any Guarantor, the President, the
Treasurer or any Vice President of the Company or such Guarantor, as the case
may be.

         "Bankruptcy Event" has the meaning assigned to it in the Common
Agreement.

         "Board" means either the board of directors of the Insurer or any duly
authorized committee of that board.

         "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Management Committee of the Company and to be in full force and effect on
the date of such certification, and delivered to the Trustee and the Insurer,
provided, that if an Insurer Default has occurred and is continuing, the Company
shall endeavor to make such delivery in good faith but failure of the Company to
make such a delivery shall not be an Issuer Event of Default under this
Indenture.

         "Bond Obligations" has the meaning assigned to it in the Common
Agreement.

         "Bonds" means, collectively, the Series A Bonds and the Additional
Bonds.

         "Bonds Register" and "Bonds Registrar" have the meanings specified in
Section 3.06(1).

         "Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
generally are authorized or obligated by law or executive order to close.

         "Calculation Agent" means The Bank of New York, or any successor
Calculation Agent as appointed by the Company with the consent of the Insurer
(so long as no Insurer Default has occurred and is continuing) and the Swap
Counterparty.

         "Certificated Bonds" means the Regulation S Certificated Bonds and the
Restricted Certificated Bonds.

         "Closing Date" has the meaning assigned to it in the Common Agreement.

         "Code" means the Internal Revenue Code of 1986, as amended.

                                       3
<PAGE>

         "Collateral" has the meaning assigned to it in the Common Agreement.

         "Collateral Agent" has the meaning assigned to it in the Common
Agreement.

         "Common Agreement" means the Common Agreement, dated as of June 18,
2002, among the Insurer, the Trustee, the Company, the Project Companies, the
Swap Counterparty and the Collateral Agent.

         "Company" means the Person named as the "Company" in the preamble of
this Indenture until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.

         "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any Authorized Officer of the Company and
delivered to the Trustee and the Insurer.

         "Controlling Party" has the meaning assigned to it in the Common
Agreement.

         "Corporate Trust Office" means the principal office of the Trustee in
The City of New York, New York at which at any particular time its corporate
trust business shall be principally administered, which is located at 101
Barclay Street, New York, New York, 10286, Attention: Corporate Trust
Administration or at such other address as the Trustee may designate by notice
to the Holders, the Insurer and the Company, or the principal corporate trust
office of any successor Trustee at the address designated by such successor
Trustee by notice to the Holders, the Insurer and the Company.

         "corporation" means a corporation, limited liability company,
association, company, joint-stock company or business trust.

         "Debt" has the meaning assigned to it in the Common Agreement.

         "Depositary" means, initially, The Depository Trust Company, a New York
banking corporation, or any successor clearing agency so registered appointed
pursuant to Section 3.06(2).

         "Depositary Agreement" has the meaning assigned to it in the Common
Agreement.

         "Dollars" or "$" or any similar references means the currency of the
United States.

         "DTC" means the Depositary.

         "Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.

         "Financing Documents" has the meaning assigned to it in the Common
Agreement.

         "Financing Parties" has the meaning assigned to it in the Common
Agreement.

         "GAAP" has the meaning specified in Section 1.01(2).

                                       4
<PAGE>

         "Global Bond" means a Bond that evidences all of or part of the Bonds
of any series and bears the legend set forth in Section 2.03, issued to the
Depositary or its nominee, and registered in the name of the Depositary or its
nominee.

         "Guarantors" has the meaning specified in the preamble of this
Indenture.

         "Guaranty" has the meaning assigned to it in the Common Agreement.

         "Holder" means a Person in whose name a Bond is registered in the Bond
Register.

         "Indenture" means this Indenture as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.

         "Initial Principal Amount" of a Bond means the principal amount of such
Bond at issuance.

         "Institutional Accredited Investor" means an institution that is an
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D.

         "instrument" means an "instrument" as defined in Section 9-102(a)(47)
of the UCC.

         "Insurance and Reimbursement Agreement" has the meaning assigned to it
in the Common Agreement.

         "Insurer" has the meaning specified in the preamble of this Indenture.

         "Insurer Default" has the meaning assigned to it in the Common
Agreement.

         "Interest Period" means, for the Series A Bonds and the Additional
Floating Rate Bonds, respectively, the period beginning on the date of issuance
of those Bonds and ending on the first Scheduled Payment Date for those Bonds
and, thereafter, each of the successive periods beginning on the last day of the
preceding Interest Period for those Bonds and ending on the following Scheduled
Payment Date for those Bonds, subject to the following: (1) if any Scheduled
Payment Date for the Series A Bonds and the Additional Floating Rate Bonds,
respectively, is not a Business Day or a London Business Day, the Interest
Period that would otherwise end on that Scheduled Payment Date will, instead,
end on the Business Day (which is also a London Business Day) following that
Scheduled Payment Date unless that Business Day falls in a new calendar month,
in which case that Interest Period will end on the Business Day (which is also a
London Business Day) preceding that Scheduled Payment Date, and (2)
notwithstanding clause (1), the final Interest Period for the Series A Bonds and
the Additional Floating Rate Bonds, respectively, will end on the scheduled
maturity date of those Bonds, regardless of whether or not the scheduled
maturity date is a Business Day or a London Business Day. Interest payable in
respect of each Interest Period will accrue from and including the first day and
to but excluding the last day of such Interest Period.

         "Issue Date" means, with respect to any series of Bonds, the date of
issuance thereof. The Issue Date for the Series A Bonds shall be June 18, 2002.

                                       5
<PAGE>

         "Issuer Event of Default" (i) has the meaning assigned to it in the
Common Agreement and (ii) shall include any additional events of default that
are added for the benefit of the Holders and that are identified as "Issuer
Events of Default" in an indenture supplemental hereto executed pursuant to
Section 10.01(2).

         "Issuer Permitted Debt" has the meaning assigned to it in the Common
Agreement.

         "Investment Company Act" means the Investment Company Act of 1940, as
amended.

         "Legend" has the meaning specified in Section 2.02(2).

         "London Business Day" means any day on which commercial banks and
foreign exchange markets settle payments and are open for general business
(including dealings in foreign exchange and foreign currency deposits) in
London.

         "Management Committee" means the body authorized by the limited
liability company agreement of the Company to act for the Company or any duly
authorized subcommittee thereof.

         "money" has the meaning specified in Section 1-201(24) of the UCC.

         "Moody's" means Moody's Investors Service, Inc., or any successor
thereto, and, if such corporation shall for any reason no longer perform the
functions of a securities rating agency, "Moody's" shall be deemed to refer to
any other nationally recognized rating agency designated by the Company,
provided, that with respect to the rating of the Bonds, the designation shall be
with the consent of the Insurer (so long as no Insurer Default has occurred and
is continuing), such consent not to be unreasonably withheld.

         "Non-Permitted Holder" has the meaning specified in Section 3.15(1).

         "Non-Recourse Persons" has the meaning specified in Article 14.

         "Notice of Default" means a written notice given by registered or
certified mail or confirmed telecopy or facsimile transmission to the Company by
the Trustee specifying the occurrence of an Issuer Event of Default and
requiring it to be remedied and stating that such notice is a "Notice of
Default" under this Indenture.

         "NRG Energy" has the meaning assigned to it in the Common Agreement.

         "Obligations" has the meaning assigned to it in the Common Agreement.

         "Officer's Certificate" means a certificate signed by an Authorized
Officer of the Company, or any person duly appointed in a Board Resolution of
the Company, and delivered to the Trustee, with a copy to the Insurer (so long
as no Insurer Default has occurred and is continuing). The officer signing an
Officer's Certificate given pursuant to Section 11.04 shall be the principal
executive, financial or accounting officer of the Company.

         "Operative Documents" has the meaning assigned to it in the Common
Agreement.

         "Opinion of Counsel" means a written opinion of counsel, who may, but
need not, be counsel for the Company, provided, that with respect to matters
relating to tax, bankruptcy and

                                       6
<PAGE>

security interests, such counsel shall be independent of the Company and its
Affiliates, and who shall be reasonably acceptable to the Trustee and the
Insurer (so long as no Insurer Default has occurred and is continuing).

         "Optional Redemption Price" has the meaning specified in Section
12.01(1).

         "Outstanding", when used with respect to the Bonds, means, as of the
date of determination, all Bonds theretofore authenticated and delivered under
this Indenture, except:

                  (i) Bonds theretofore cancelled by the Trustee or delivered to
         the Trustee for cancellation;

                  (ii) Bonds for whose payment or redemption money in the
         necessary amount has been theretofore deposited with the Trustee or
         with any Paying Agent (other than the Company) in trust or set aside
         and segregated in trust by the Company (if the Company shall act as its
         own Paying Agent) for the Holders of such Bonds; provided that, if such
         Bonds are to be redeemed, notice of such redemption has been duly given
         pursuant to this Indenture or provision for such notice satisfactory to
         the Trustee has been made;

                  (iii) Bonds that have been paid pursuant to Section 3.08 or in
         exchange for or in lieu of which other Bonds have been authenticated
         and delivered pursuant to this Indenture, other than any such Bonds in
         respect of which there shall have been presented to the Trustee proof
         satisfactory to it that such Bonds are held by a bona fide purchaser in
         whose hands such Bonds are valid obligations of the Company;

provided, however, that, except as provided for herein, in determining whether
the Holders of the requisite Remaining Principal Amount of the Bonds have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder or under the Common Agreement, Bonds owned by the Company or any
Affiliate of the Company shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Bonds that the Trustee actually knows to be so owned shall be so
disregarded; provided, further that Bonds so owned by the Company or any
Affiliate of the Company that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Bonds and that the pledgee is not
the Company or any Affiliate of the Company; provided, further that principal
amounts of Bonds which have been paid with proceeds of the Policy shall continue
to remain Outstanding for purposes of this Indenture until the Insurer has been
paid as subrogee pursuant to the provisions of Section 4.2 of the Insurance and
Reimbursement Agreement, and the Insurer shall be deemed to be the Holder of
such Bonds to the extent of any payments thereon made by the Insurer.

         "Paying Agent" means any Person authorized by the Company to pay the
principal of, Redemption Price, if any, interest on or any other amounts under
any Bonds on behalf of the Company.

         "Permitted Change of Control" has the meaning assigned to it in the
Common Agreement.

         "Permitted Peaker Buyout" has the meaning assigned to it in the Common
Agreement.

                                       7
<PAGE>

         "Permitted Peaker Buyout (Completion/Loss Event)" has the meaning
assigned to it in the Common Agreement.

         "Person" means any individual, corporation, limited liability company,
estate, partnership, joint venture, trust (including any beneficiary thereof),
unincorporated organization or other legal entity, or any government or any
agency or political subdivision thereof.

         "Place of Payment" has the meaning specified in Section 3.09(l).

         "Policy" has the meaning assigned to it in the Common Agreement.

         "Predecessor Bond" of any particular Bond means every previous Bond
evidencing all or a portion of the same debt as that evidenced by such
particular Bond; and, for the purposes of this definition, any Bond
authenticated and delivered under Section 3.08 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Bond shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Bond.

         "Project Companies" has the meaning specified in the preamble of this
Indenture.

         "Project Event of Default" has the meaning assigned to it in the Common
Agreement.

         "Project Revenues" has the meaning assigned to it in the Common
Agreement.

         "QIB" means a "qualified institutional buyer" within the meaning
assigned to that term in Rule 144A.

         "Qualified Purchaser" means a "qualified purchaser" within the meaning
assigned to that term Section 2(a)(51)(A) of the Investment Company Act.

         "Rating Agency" means Standard & Poor's or Moody's or, if Standard &
Poor's and Moody's cease to exist, any nationally recognized statistical rating
organization or other comparable Person designated by the Company and acceptable
to the Insurer (provided that no Insurer Default shall have occurred and be
continuing), notice of which designation shall have been given to the Trustee.

         "Redemption Date", when used with respect to any Bond to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.

         "Redemption Premium" has the meaning assigned to it in Section 12.01.

         "Reference Banks" means four major banks in the London interbank market
selected by the Calculation Agent, acting in good faith and in a commercially
reasonable manner.

         "Regular Record Date", for any Scheduled Payment Date for the Bonds,
means the fifteenth day, whether or not a Business Day, preceding such Scheduled
Payment Date.

         "Regulation D" means Regulation D promulgated under the Securities Act.

         "Regulation S" means Regulation S promulgated under the Securities Act.

                                       8
<PAGE>

         "Regulation S Certificated Bonds" has the meaning set forth in Section
2.01(3).

         "Remaining Principal Amount" with respect to a Bond means the Initial
Principal Amount of such Bond less any principal amounts of such Bond redeemed
pursuant to Article Twelve or Section 3.15(2) hereof and less any amortization
payments paid on such Bond.

         "Restricted Certificated Bonds" has the meaning specified in Section
2.01(3).

         "Restricted Global Bonds" has the meaning specified in Section 2.01(3).

         "Rule 144" means Rule 144 promulgated under the Securities Act (or any
successor provision thereto).

         "Rule 144A" means Rule 144A promulgated under the Securities Act (or
any successor provision thereto).

         "Rule 144A Information" means such information as is specified pursuant
to paragraph (d)(4) of Rule 144A (or any successor provision thereto).

         "Scheduled Payment Date" means each date for scheduled payment of
principal and/or interest under the terms of the Bonds of any series.

         "Scheduled Payments" means, with respect to any Scheduled Payment Date,
all scheduled payments in respect of principal and/or interest payable by the
Company under the terms of the Bonds of any series on such date.

         "Securities Act" means the U.S. Securities Act of 1933, as amended.

         "security" has the meaning specified in Section 8-102(a)(15) of the
UCC.

         "Series A Bonds" has the meaning specified in the recitals to this
Indenture.

         "Standard & Poor's" means Standard & Poor's Rating Services, a division
of The McGraw-Hill Companies, Inc., or any successor thereto, and, if such
corporation shall for any reason no longer perform the functions of a securities
rating agency, "Standard & Poor's" shall be deemed to refer to any other
nationally recognized rating agency designated by the Company, provided, that
with respect to the rating of the Bonds, the designation shall be with the
consent of the Insurer (so long as no Insurer Default has occurred and is
continuing), such consent not to be unreasonably withheld.

         "Stated Maturity", when used with respect to any Series A Bond means
June 10, 2019; and when used with respect to any Additional Bond, means the
maturity date provided in the Supplemental Indenture applicable thereto.

         "Swap Agreement" has the meaning assigned to it in the Common
Agreement.

         "Swap Counterparty" has the meaning assigned to it in the Common
Agreement.

         "Swap Obligations" has the meaning assigned to it in the Common
Agreement.

                                       9
<PAGE>

         "Telerate Page 3750" means the display page of Bridge's Telerate
Service designated as 3750 or such other page as may replace that page on that
service, or such other service as may be nominated as the information vendor,
for the purpose of displaying rates comparable to Three-Month USD-LIBOR-BBA.

         "Three-Month USD-LIBOR-BBA" means, for each Interest Period, the rate
for deposits in U.S. dollars for a period of three months, commencing on the
first day of such Interest Period and in an amount that is representative for a
single transaction in that market at that time, that appears on Telerate Page
3750 as of 11:00 a.m., London time, on the USD-LIBOR-BBA Determination Date with
respect to such Interest Period. If such rate does not appear on the Telerate
Page 3750, then Three-Month USD-LIBOR-BBA for the relevant Interest Period will
be determined on the basis of the rates at which deposits in U.S. dollars are
offered by the Reference Banks at approximately 11:00 a.m., London time, on the
USD-LIBOR-BBA Determination Date with respect to such Interest Period to prime
banks in the London interbank market for a period of three months commencing on
the first day of such Interest Period and in an amount that is representative
for a single transaction in that market at that time, assuming an actual/360 day
count basis. The Calculation Agent shall request the principal London office of
each of the Reference Banks to provide a quotation of its rate. If at least two
such quotations are provided, the rate for that Interest Period will be the
arithmetic mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that Interest Period will be the arithmetic mean of the
rates quoted by major banks in New York City, selected by the Calculation Agent,
at approximately 11:00 a.m., New York City time, on the first day of such
Interest Period for loans in U.S. dollars to leading European banks for a period
of three months commencing on the first day of such Interest Period and in an
amount that is representative for a single transaction in that market at that
time. If the Calculation Agent is unable to obtain rate quotations for such
loans, the rate for that USD-LIBOR-BBA Determination Date shall be Three-Month
USD-LIBOR-BBA as calculated for the immediately preceding Interest Period.
Notwithstanding the foregoing, "Three-Month USD-LIBOR-BBA" with respect to the
first Interest Period will be 1.87938%.

         "Trustee" means the Person named as the "Trustee" in the preamble of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.

         "UCC" means the Uniform Commercial Code as in effect in the State of
New York.

         "United States" and "U.S." means the United States of America
(including the States and the District of Columbia), its territories and
possessions and other areas subject to its jurisdiction.

         "USD-LIBOR-BBA Determination Date" means with respect to each Interest
Period, the second London Business Day preceding the first day of such Interest
Period.

SECTION 1.02. Form of Documents Delivered to the Trustee and the Insurer.

         In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters

                                       10
<PAGE>

and one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.

         Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his or her certificate or opinion is
based are erroneous. Any such certificate or opinion of counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

         Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

All information to be provided under this Indenture by the Company or the
Trustee, as applicable, shall be provided by an Authorized Officer of the
Company or the Trustee, as applicable.

SECTION 1.03. Compliance Certificates and Opinions.

         Upon any request or application by the Company to the Trustee to take
any action under this Indenture, including the initial authentication of Notes
on the date of this Indenture, the Company shall furnish to the Trustee such
certificates and opinions as may be required hereunder. Each such certificate or
opinion, and any certificate evidencing a determination required to be made by
the Company under this Indenture, shall be in the form of an Officer's
Certificate, if to be given by an officer of the Company, or an Opinion of
Counsel, if to be given by counsel, and shall comply with the requirements set
forth hereunder.

         Each certificate or opinion with respect to compliance by or on behalf
of the Company with a condition or covenant provided for in this Indenture
(other than a certificate provided pursuant to TIA Section 314(a)(4)) shall
comply with the provisions of TIA Section 314(e) and shall include:

         (1) a statement that the Person making such certificate or opinion has
read such covenant or condition and the definitions herein or in the Common
Agreement relating thereto;

         (2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;

         (3) a statement that, in the opinion of such Person, he or she has or
they have made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or condition
has been satisfied; and

         (4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.

                                       11
<PAGE>

SECTION 1.04. Acts of Holders; Record Dates.

         (1) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given, made
or taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as in this Indenture otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and to the Company. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are in this Indenture
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 7.01) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section 1.04.

         The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him or her the execution thereof. Where such
execution is by a signer acting in a capacity other than the signer's individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of the signer's authority. The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner that the Trustee deems sufficient.

         The ownership of Bonds shall be proved by the Bonds Register.

         (2) Any Act of the Holder of any Bond shall bind every future Holder of
the same Bond and the Holder of every Bond issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee, the Company or the
Insurer in reliance thereon, whether or not notation of such Act is made upon
such Bond.

         (3) The Company may set any day as the record date for the purpose of
determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted to be given or taken by Holders, provided
that the Company may not set a record date for, and the provisions of this
paragraph shall not apply with respect to, the giving or making of (i) any
Notice of Default, (ii) any declaration of acceleration referred to in Section
6.01, (iii) any request to institute proceedings referred to in Section 6.07, or
(iv) any direction referred to in Section 6.14. If not set by the Company prior
to the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section 8.01)
prior to such first solicitation or vote, as the case may be. With regard to any
record date, only the Holders on such date, and no other Holders, shall be
entitled to give or take, or vote on, the relevant action whether or not such
Holders remain Holders after such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite Remaining

                                       12
<PAGE>

Principal Amount of Outstanding Bonds on the date the action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its own
expense, shall cause notice of such record date and the proposed action by
Holders to be given to the Trustee in writing and to each Holder in the manner
set forth in Section 1.05.

         (4) Notwithstanding any other provision in this Indenture to the
contrary, so long as no Insurer Default has occurred and is continuing, only the
Insurer shall be entitled to exercise (i) all rights and remedies with respect
to the Bonds under this Indenture, (ii) the right to vote on all matters
presented to the Holders and (iii) all other rights and remedies, in each case
as the Controlling Party pursuant to Sections 7.4 and 7.5 of the Common
Agreement and subject to Section 7.6 of the Common Agreement, and no Act of the
Holders of the Bonds will be effective and only an Act of the Insurer in
exercising such rights of the Holders of the Bonds in respect of such Act will
be effective; provided, however, that (i) the Holders shall retain the right
under this Indenture to approve any changes in the material terms of the Bonds
as set forth in Section 10.02(2), and (ii) if an Insurer Default occurs and is
continuing, all rights and remedies available to a specific series of Bonds
shall be exercised directly by the Holders of such series of Bonds, and all
rights and remedies available to the Holders of the Bonds as a group under this
Indenture shall be exercised by the Holders acting as a group. So long as no
Insurer Default has occurred and is continuing, any vote, determination,
election or other Act of the Insurer in exercising the rights with respect to
the Bonds as provided in this Section 1.04(4) shall be deemed to be the vote,
determination, election or other Act of the Holders.

         (5) Without limiting the foregoing, a Holder entitled under this
Indenture to take any action under this Indenture with regard to a particular
Bond may do so with regard to all or any part of the Remaining Principal Amount
of such Bond, which action may differ with respect to different portions of the
Remaining Principal Amount of such Bond, or by one or more duly appointed agents
each of which may do so pursuant to such appointment with regard to all or any
part of such principal amount.

SECTION 1.05. Notices, Etc., to Trustee, Company and Insurer.

         Any Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:

                  (a) the Trustee by any Holder or by the Company or the
         Insurer, as the case may be, shall be sufficient for every purpose
         hereunder (unless otherwise in this Indenture expressly provided) if
         made, given, furnished or filed in writing to or with the Trustee at
         its Corporate Trust Office, and such notice shall be deemed effective
         when actually received; or

                  (b) the Company by the Trustee or by any Holder or the
         Insurer, as the case may be, shall be sufficient for every purpose
         hereunder (unless otherwise in this Indenture expressly provided) if in
         writing and mailed, first-class postage prepaid, to the Company
         addressed to it at the address of its principal office specified in the
         preamble of this Indenture or at any other address previously furnished
         in writing to the Trustee and the Insurer by the Company, Attention:
         General Counsel; or

                  (c) the Insurer by any Holder or by the Trustee or the
         Company, as the case may be, shall be sufficient for every purpose
         hereunder (unless otherwise in this Indenture

                                       13
<PAGE>

         expressly provided) if in writing and mailed, first-class postage
         prepaid, to the Insurer addressed to it at 250 Park Avenue, 19th Floor,
         New York, NY 10177, Attention: Surveillance;

         or to such other Persons or addresses as the Person to whom notice is
given may have previously furnished to the others in writing in the manner set
forth above.

SECTION 1.06. Notice to Holders.

         Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise in this Indenture expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at the Holder's address as it appears in the Bond
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Any notice
sent to the Holders by the Trustee or the Company shall also be sent to the
Insurer (so long as no Insurer Default has occurred and is continuing), provided
that such notice to the Insurer shall be subject to the same conditions as
provided in this Indenture for notices to the Holders.

         If by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee and the Insurer,
with respect to notifications to the Insurer, shall constitute a sufficient
notification for every purpose hereunder.

SECTION 1.07. Waiver.

         Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders or the Insurer, as the case may be, shall
be filed with the Trustee, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.

SECTION 1.08. Effect of Headings and Table of Contents.

         The Article and Section headings in this Indenture and the Table of
Contents are for convenience only and shall not affect the construction hereof.

SECTION 1.09. Successors and Assigns.

         All covenants and agreements in this Indenture of any party hereto
shall bind its successors and assigns, whether so expressed or not.

SECTION 1.10. Separability Clause.

         If any provision in this Indenture or in the Bonds shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions, and the

                                       14
<PAGE>

validity, legality or enforceability of such provisions in any other
jurisdiction, shall not in any way be affected or impaired thereby.

SECTION 1.11. Benefits of Indenture.

         Nothing in this Indenture or in the Bonds, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.

SECTION 1.12. Governing Law.

         This Indenture and the Bonds shall be governed by and construed in
accordance with the laws of the State of New York.

SECTION 1.13. Business Day Convention.

         If any Scheduled Payment Date or Redemption Date is not a business day
at any Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Bonds) payment of any amounts due on the Bonds need not be
made at such Place of Payment on such date, but may be made on the next
succeeding business day at such Place of Payment with the same force and effect
as if made on the Scheduled Payment Date or Redemption Date. SECTION 1.14.
Waiver of Jury Trial.

         THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER FINANCING DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE PARTIES HERETO. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE TRUSTEE TO ENTER INTO THIS INDENTURE.

                                   ARTICLE TWO

                                   BOND FORMS

SECTION 2.01. Forms Generally.

         (1) The Series A Bonds and the Additional Floating Rate Bonds, if any,
shall be in substantially the form set forth in Exhibit A-1, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture (and, in the case of Additional Floating
Rate Bonds, the corresponding Supplemental Indenture), the Additional Fixed Rate
Bonds, if any, shall be in substantially the form set forth in Exhibit A-2 and
as provided in the corresponding Supplemental Indenture, and the Bonds may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or of the Depositary or as may,

                                       15
<PAGE>

consistently herewith, be determined by the officers executing such Bonds, as
evidenced by their execution of the Bonds.

         The definitive Bonds shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Bonds, as evidenced by their execution of such
Bonds.

         (2) All the Bonds shall be issued only in registered form, without
coupons.

         (3) Upon their original issuance, the Bonds of each series offered and
sold to Institutional Accredited Investors who are not also QIBs shall be issued
in the names of their initial beneficial owners and delivered to such Holders
(or upon their respective orders) by the Company. Such Bonds are referred to in
this Indenture as the "Restricted Certificated Bonds".

         Bonds of each series offered and sold in their initial distribution in
reliance on Regulation S shall be issued in the form of one or more physical
certificates, registered in the name of the beneficial owner thereof, in
definitive, fully-registered form without interest coupons attached with the
applicable legend substantially set forth in the form of Section 2.02(a) and (c)
(each, a "Regulation S Certificated Bond"), which shall be duly executed by the
Company and authenticated by the Trustee as hereinafter provided.

         Bonds offered and sold in their initial distribution in reliance on
Rule 144A shall be issued in the form of one or more Global Bonds registered in
the name of the Depositary or its nominee and deposited with the Trustee, as
custodian for the Depositary. Such Global Bonds are referred to in this
Indenture as the "Restricted Global Bonds".

         (4) The aggregate Initial Principal Amount of each Restricted Global
Bond may be increased or decreased from time to time by adjustments made on the
records of the Trustee, as custodian for the Depositary, as provided in Section
3.07.

SECTION 2.02. Form of Legends.

         (1) Each Bond issued hereunder shall, in addition to any other legends
required or permitted by this Indenture, bear the legend below:

     THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
     SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR THE INVESTMENT COMPANY ACT
     OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT") AND MAY NOT BE OFFERED,
     SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) BY THE INITIAL INVESTOR,
     (1) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED
     INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
     ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
     INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
     (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
     REGULATION S UNDER THE SECURITIES ACT, OR (3) PURSUANT TO AN EXEMPTION FROM
     REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
     AVAILABLE), AND (B) BY SUBSEQUENT INVESTORS, AS SET FORTH IN (A) ABOVE,
     AND, IN ADDITION, TO

                                       16
<PAGE>

     AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING
     OF RULE 501 OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN
     EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND, IN THE CASE OF
     EACH OF CLAUSES (A) AND (B), (1) IN ACCORDANCE WITH ALL APPLICABLE
     SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS
     AND (2) IN A PRINCIPAL AMOUNT OF NOT LESS THAN $250,000 FOR THE PURCHASER
     AND FOR EACH ACCOUNT FOR WHICH IT IS ACTING, TO A PURCHASER AND, AS
     APPLICABLE, EACH ACCOUNT FOR WHICH SUCH PURCHASER IS ACTING, THAT (I) IS A
     QUALIFIED PURCHASER WITHIN THE MEANING OF SECTION 3(C)(7) OF THE INVESTMENT
     COMPANY ACT, (II) WAS NOT FORMED FOR THE PURPOSE OF INVESTING IN THE ISSUER
     (EXCEPT WHEN EACH BENEFICIAL OWNER OF THE PURCHASER AND EACH SUCH ACCOUNT
     IS A QUALIFIED PURCHASER), (III) HAS RECEIVED THE NECESSARY CONSENT FROM
     ITS BENEFICIAL OWNERS WHEN THE PURCHASER OR SUCH ACCOUNT IS A PRIVATE
     INVESTMENT COMPANY FORMED BEFORE APRIL 30, 1996, (IV) IS NOT A
     BROKER-DEALER THAT OWNS AND INVESTS ON A DISCRETIONARY BASIS LESS THAN
     $25,000,000 IN SECURITIES OF UNAFFILIATED ISSUERS AND (V) IS NOT a pension,
     profit sharing or other retirement trust fund or plan in which the
     partners, beneficiaries or participants, as applicable, may designate the
     particular investments to be made, AND IN A TRANSACTION THAT MAY BE
     EFFECTED WITHOUT LOSS OF ANY APPLICABLE INVESTMENT COMPANY ACT EXEMPTION.
     ANY TRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT,
     WILL BE VOID AB INITIO AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE
     TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER,
     THE TRUSTEE OR ANY INTERMEDIARY. EACH TRANSFEROR OF THIS NOTE WILL PROVIDE
     NOTICE OF THE TRANSFER RESTRICTIONS SET FORTH HEREIN AND IN THE INDENTURE
     TO ITS TRANSFEREE. IN ADDITION TO THE FOREGOING, THE ISSUER MAINTAINS THE
     RIGHT TO PURCHASE OR FORCE THE RESALE OF ANY NOTES PREVIOUSLY TRANSFERRED
     TO NON-PERMITTED HOLDERS (AS DEFINED IN THE INDENTURE) IN ACCORDANCE WITH
     AND SUBJECT TO THE TERMS OF THE INDENTURE.

     THE BONDS EVIDENCED HEREBY MAY NOT BE OFFERED OR SOLD UNLESS: (1) THE
     TRANSFEREE REPRESENTS THAT IT IS A "QUALIFIED PURCHASER" (AS DEFINED IN
     2(A)(51)(A) UNDER THE INVESTMENT COMPANY ACT, AS AMENDED); (2) THE
     TRANSFEROR REPRESENTS THAT PRIOR TO SUCH TRANSFER, THE TRANSFEROR HAS
     PROVIDED TO THE TRANSFEREE NOTICE OF THE TRANSFER RESTRICTIONS APPLICABLE
     TO THIS SECURITY; (3) BOTH THE TRANSFEROR AND THE TRANSFEREE ACKNOWLEDGE
     THAT THE ISSUER MAY REFUSE TO HONOR THE TRANSFER OF THE SECURITY IF IT
     DETERMINES IN ITS SOLE DISCRETION THAT THE TRANSFEREE IS NOT A QUALIFIED
     PURCHASER; AND (4) THE TRANSFEREE ACKNOWLEDGES THAT THE ISSUER HAS THE
     RIGHT TO FORCE THE REDEMPTION OR RESALE OF THE SECURITY HELD BY THE
     TRANSFEREE IF IT DETERMINES IN ITS SOLE DISCRETION THAT THE TRANSFEREE IS
     NOT A QUALIFIED PURCHASER.

                                       17
<PAGE>

         (2) If any Bond is issued upon the transfer, exchange or replacement of
another Bond that does not bear a legend setting forth restrictions on transfer
that are intended to ensure compliance with the Securities Act as provided in
Section 2.02(1) (the "Legend"), the Bond so issued shall not bear the Legend. If
any Bond is issued upon the transfer, exchange or replacement of another Bond
bearing the Legend, or if a request is made to remove the Legend on any Bond,
the Bond so issued shall bear the Legend, or the Legend shall not be removed, as
the case may be, unless there is delivered to the Company such satisfactory
evidence, which may include an opinion of independent counsel licensed to
practice law in the State of New York, as may be reasonably required by the
Company, that neither the Legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply with the provisions
of Rule 144A, Rule 144 or Regulation S under the Securities Act or that such
Bonds are not "restricted securities" within the meaning of Rule 144 under the
Securities Act. Upon provision of such satisfactory evidence, the Trustee, at
the direction of the Company, shall authenticate and deliver a Bond that does
not bear the Legend.

SECTION 2.03. Form of Legend for Restricted Global Bonds.

         Every Restricted Global Bond authenticated and delivered hereunder
shall, in addition to any other legends required or permitted by this Indenture,
bear a legend in substantially the following form:

         THIS BOND IS A RESTRICTED GLOBAL BOND WITHIN THE MEANING OF THE
         INDENTURE REFERRED TO BELOW AND IS REGISTERED IN THE NAME OF A
         DEPOSITARY OR ITS NOMINEE. THIS BOND MAY NOT BE EXCHANGED IN WHOLE OR
         IN PART FOR A BOND REGISTERED, AND NO TRANSFER OF THIS BOND IN WHOLE OR
         IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
         DEPOSITARY OR ITS NOMINEE, EXCEPT IN THE LIMITED CIRCUMSTANCES
         DESCRIBED IN THE INDENTURE.

SECTION 2.04. Form of Trustee's Certificate of Authentication.

         The Trustee's certificates of authentication shall be in substantially
the following form:

         This is one of the Bonds of the series designated therein referred to
in the within-mentioned Indenture.

Dated:

                                                           THE BANK OF NEW YORK,

                                                                      as Trustee

                                                      By:
                                                         -----------------------
                                                            Authorized Signatory

                                       18
<PAGE>

                                  ARTICLE THREE

                                    THE BONDS

SECTION 3.01. Title and Terms.

         (1) The aggregate Initial Principal Amount of Bonds that may be
authenticated and delivered under this Indenture is unlimited.

         (2) The Series A Bonds shall be designated the "Series A Floating Rate
Senior Secured Bonds due 2019" and shall be issued in an aggregate Initial
Principal Amount of $325,000,000. The Series A Bonds shall have the terms and
conditions set forth in the form of the Series A Bonds as set forth in Exhibit
A-1, and in this Indenture.

SECTION 3.02. Additional Bonds.

         (1) Subject to clause (2) of this Section 3.02, one or more series of
Additional Bonds may be authenticated and delivered under this Indenture, in
each case pursuant to an indenture supplemental hereto (a "Supplemental
Indenture") substantially in the form of Exhibit E and upon satisfaction of the
conditions set forth in this Section 3.02. Each series of Additional Floating
Rate Bonds shall have the terms and conditions set forth in Exhibit A-1, and in
this Indenture, subject to such insertions, omissions, substitutions and
variations as may be provided in the corresponding Supplemental Indenture. Each
series of Additional Fixed Rate Bonds shall have the terms and conditions set
forth in Exhibit A-2, this Indenture and in the Supplemental Indenture
corresponding to such issuance.

         (2) Additional Bonds may be issued by the Company; provided that (i)
the Trustee shall have received prior to such issuance an Officer's Certificate
from the Company certifying that (a) each of the conditions set forth in this
Section 3.02(2) and the Supplemental Indenture relating to the issuance of such
Additional Bonds has been satisfied and (b) the incurrence of Debt pursuant to
the issuance of Additional Bonds complies with Section 4.3 (including, without
limitation, the definition of Issuer Permitted Debt) of the Common Agreement,
(ii) an appropriate Supplemental Indenture relating to the issuance of such
Additional Bonds substantially in the form of Exhibit E hereto has been executed
and delivered, (iii) any supplements, amendments or modifications to or of the
Financing Documents that may be required or appropriate in connection with the
issuance of such Additional Bonds have been executed and delivered (in respect
of which the consent of the Trustee and the Holders shall not be required,
except to the extent required by any such Financing Document), and (iv) the
Trustee shall have received the written consent of each Guarantor confirming
that such Guarantor's Guaranty shall apply to the Bonds and the Additional Bonds
which the Company proposes to issue.

         (3) Upon satisfaction of the applicable conditions set forth in clause
(2) of this Section 3.02, the Company shall execute Additional Bonds and deliver
them to the Trustee, and the Trustee, upon the written request of the Company,
shall authenticate such Additional Bonds and deliver them to the purchasers
thereof as may be directed by the Company in writing, without any further action
of the Company.

                                       19
<PAGE>

         (4) Upon the issuance of any Additional Bonds, the Company shall
promptly provide the Trustee with a schedule that will set forth the
requirements for the payment of principal of and interest on such Additional
Bonds.

SECTION 3.03. Denominations.

         The Bonds of each series shall be issuable only in fully registered
form without coupons and in principal amounts only in denominations of $250,000
and integral multiples of $1,000 in excess thereof.

SECTION 3.04. Execution, Authentication, Delivery and Dating.

         The Bonds shall be executed on behalf of the Company by any of its
Authorized Officers, attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Bonds may be manual
or facsimile.

         Bonds bearing the manual or facsimile signatures of individuals who
were at any time the Authorized Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Bonds or did not hold
such offices at the date of such Bonds.

         At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Bonds of each series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Bonds; and the Trustee shall authenticate
and deliver such Bonds in accordance with such Company Order.

         Each Bond shall be dated the date of its authentication.

         No Bond shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Bond a
certificate of authentication substantially in the form provided for in this
Indenture executed by the Trustee by manual signature, and such certificate upon
any Bond shall be conclusive evidence, and the only evidence, that such Bond has
been duly authenticated and delivered hereunder. Notwithstanding the foregoing,
if any Bond shall have been authenticated and delivered hereunder and never
issued and sold by the Company, and the Company shall deliver such Bond to the
Trustee for cancellation as provided in Section 3.11, for all purposes of this
Indenture such Bond shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.

SECTION 3.05. Temporary Bonds.

         Pending the preparation of definitive Bonds of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Bonds that are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Bonds in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Bonds may determine, as evidenced by their execution of
such Bonds.

                                       20
<PAGE>

         If temporary Bonds of any series are issued, the Company will cause
definitive Bonds of that series to be prepared without unreasonable delay. After
the preparation of definitive Bonds of such series, the temporary Bonds of such
series shall be exchangeable for definitive Bonds of such series upon surrender
of the temporary Bonds of such series at any office or agency of the Company
designated pursuant to Section 11.02, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Bonds of any series the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor one or more definitive Bonds of the same series, of any authorized
denominations and of like tenor and aggregate Initial Principal Amount. Until so
exchanged, the temporary Bonds of any series shall in all respects be entitled
to the same benefits under this Indenture as definitive Bonds of such series and
tenor.

SECTION 3.06. Registration, Registration of Transfer and Exchange.

         (1) The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the "Bonds Register") in which, subject to Sections
3.06(2) and 3.07 and to such reasonable regulations as it may prescribe, the
Company shall provide for the registration of Bonds and of transfers of Bonds.
The Trustee is hereby appointed "Bonds Registrar" for the purpose of registering
Bonds and transfers of Bonds as in this Indenture provided.

         Subject to Sections 3.06(2) and 3.07, upon surrender for registration
of transfer of any Bond of a series at the office or agency of the Company
designated pursuant to Section 11.02, the Company shall execute, and the Trustee
shall authenticate and deliver, one or more new Bonds of the same series, of any
authorized denominations and of like tenor and aggregate Initial Principal
Amount.

         At the option of the Holder, Bonds of any series may be exchanged for
other Bonds of the same series, of any authorized denominations and of like
tenor and aggregate Initial Principal Amount, upon surrender of the Bonds to be
exchanged at such office or agency. Whenever any Bonds are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Bonds that the Holder making the exchange is entitled to receive.

         All Bonds issued upon any registration of transfer or exchange of Bonds
shall be the valid obligations of the Company, evidencing the same debt and
entitled to the same benefits under this Indenture, as the Bonds surrendered
upon such registration of transfer or exchange.

         Every Bond presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or Bonds Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Bonds Registrar duly executed, by the Holder
thereof or such Holder's attorney duly authorized in writing and, in the case of
any Bond that bears the Legend referred to in Section 2.02(1)(a), a certificate
in the form of Exhibit B duly executed by the transferor Holder or such Holder's
attorney duly authorized in writing.

         No service charge shall be made for any registration of transfer or
exchange of Bonds, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Bonds.

         If the Bonds are to be redeemed in part, the Company shall not be
required (A) to issue, register the transfer of or exchange any Bonds of any
series during a period beginning at the

                                       21
<PAGE>

opening of 15 days before the day of the mailing of a notice of redemption of
the Bonds and ending at the close of business on the day of such mailing, or (B)
to register the transfer of or exchange any Bond in whole or in part, except the
unredeemed portion of any Bond being redeemed in part.

         (2) The provisions of clauses (a), (b), (c) and (d) below shall apply
only to Restricted Global Bonds:

                  (a) Each Restricted Global Bond authenticated under this
         Indenture shall be registered in the name of the Depositary or its
         nominee and delivered to the Depositary or its nominee or custodian,
         and each such Restricted Global Bond shall constitute a single Bond for
         all purposes of this Indenture.

                  (b) Notwithstanding any other provision in this Indenture, no
         Restricted Global Bond may be exchanged in whole or in part for Bonds
         in certificated form, and no transfer of a Restricted Global Bond in
         whole or in part may be registered, in the name of any Person other
         than the Depositary or its nominee unless (i) the Depositary (x) has
         notified the Company that it is unwilling or unable to continue as a
         depositary for such Restricted Global Bond or (y) has ceased to be a
         clearing agency registered under the Exchange Act, or (iii) there shall
         have occurred and be continuing an Issuer Event of Default.

                  (c) Subject to clause (b) above, any exchange of a Restricted
         Global Bond for other Bonds may be made in whole or in part, and all
         Bonds issued in exchange for a Restricted Global Bond or any portion
         thereof shall be registered in such names as the Depositary shall
         direct.

                  (d) Every Bond authenticated and delivered upon registration
         of transfer of, or in exchange for or in lieu of, a Restricted Global
         Bond or any portion thereof, whether pursuant to this Section, Section
         3.05, 3.08, 10.05 or 12.06 or otherwise, shall be authenticated and
         delivered in the form of, and shall be, a Restricted Global Bond,
         unless such Bond is registered in the name of a Person other than the
         Depositary or its nominee.

SECTION 3.07. Restrictions on Transfer.

         (1) Each Holder and beneficial owner of any Bond shall be deemed to
have represented and agreed as follows (terms used in this Section 3.07(1) that
are defined in Rule 144A, Regulation D or Regulation S are used in this
Indenture as defined therein):

                  (a) Such Holder or beneficial owner either:

                           (i)(x) is a QIB, (y) is aware that the sale of the
                  Bonds to it is being made in reliance on Rule 144A, and (z) is
                  acquiring such Bonds for its own account or the account of a
                  QIB,

                           (ii)(x) is an Institutional Accredited Investor
                  purchasing such Bonds for its own account, and (y) is not
                  acquiring such Bonds with a view to any resale or distribution
                  thereof other than in accordance with the restrictions set
                  forth in this Section 3.07, or

                                       22
<PAGE>

                           (iii) is a non-U.S. person acquiring the Bonds in an
                  offshore transaction in reliance on Regulation S.

                  (b) Such Holder or beneficial owner is a Qualified Purchaser;
         and

                  (c) Such Holder or beneficial owner understands that the Bonds
         have not been registered under the Securities Act and may not be
         offered, resold, pledged or otherwise transferred except (i) (A) by an
         initial investor, (1) to a person who such Holder or beneficial owner
         reasonably believes is a QIB acquiring for its own account or the
         account of a QIB in a transaction meeting the requirements of Rule
         144A, (2) in an offshore transaction complying with Rule 903 or Rule
         904 of Regulation S, or (3) pursuant to an exemption from registration
         under the Securities Act provided by Rule 144 thereunder (if
         available), and (B) by a subsequent investor, as set forth in (A)
         above, and, in addition, to an institutional investor that is an
         accredited investor within the meaning of Rule 501 of Regulation D
         under the Securities Act pursuant to an exemption from registration
         under the Securities Act (if available) or (C) pursuant to an effective
         registration statement under the Securities Act, (ii) to a person who
         is a Qualified Purchaser for purposes of Section 3(c)(7) of the
         Investment Company Act, and (iii) in accordance with all applicable
         securities laws of the states of the United States and other
         jurisdictions. Such Holder or beneficial owner also understands that
         the Company has not been registered under the Investment Company Act.
         Such Holder or beneficial owner understands and agrees that any
         purported transfer of the Bonds to a purchaser that does not comply
         with the requirements set forth in this Section 3.07(1)(c) will be null
         and void abinitio.

         (2) Notwithstanding any other provisions of this Indenture or the
Bonds, transfers of Bonds, in whole or in part, and transfers of interests in
Restricted Global Bonds shall be made only in accordance with this Section
3.07(2).

                  (a) Within Restricted Global Bond. Beneficial interests in any
         Restricted Global Bond may be transferred to Persons who take delivery
         thereof in the form of a beneficial interest in the same Restricted
         Global Bond in accordance with the transfer restrictions set forth in
         the Legend which shall be set forth on such Restricted Global Bond. No
         written orders or instructions shall be required to be delivered to the
         Bonds Registrar to effect the transfers described in this Section
         3.07(2)(a). Nothing in this Section 3.07(2) shall be construed to limit
         the obligations of the Company to institute the Section 3(c)(7)
         Procedures described in Section 3.14.

                  (b) Restricted Global Bond to Regulation S Certificated Bonds
         or Restricted Certificated Bonds. If the holder of a beneficial
         interest in Restricted Global Bond wishes at any time transfer such
         interest to a Person who takes delivery thereof in the form of a
         Regulation S Certificated Bond or a Restricted Certificated Bond of the
         same series, such transfer may be effected (i) subject to the
         Applicable Procedures and only in accordance with this Section
         3.07(2)(b) and (ii) provided that the remaining principal amount of
         such holder's beneficial interest in the Restricted Global Bonds shall
         either equal zero or meet the applicable minimum denomination set forth
         in Section 3.03. Upon receipt by the Trustee, as Bonds Registrar, at
         its office in The City of New York of (i) a written order given in
         accordance with the Applicable Procedures containing information
         regarding the account of the Agent Member to be debited for such
         beneficial interest, (ii)

                                       23
<PAGE>

         a certificate in substantially the form set forth in Exhibit C-1 (in
         the case of a transfer to a Person who takes delivery thereof in the
         form of a Regulation S Certificated Bond) or Exhibit C-2 (in the case
         of a transfer to a Person who takes delivery thereof in the form of a
         Restricted Certificated Bond), executed by the holder of such
         beneficial interest in such Restricted Global Bond, and (iii) an
         Investor Certificate executed by the proposed transferee of such
         interest in the form of Exhibit D-1 (in the case of a Person who takes
         delivery in the form of a Regulation S Certificated Bond) or Exhibit
         D-2 (in the case of a Person who takes delivery in the form of a
         Restricted Certificated Bond), in each case containing certifications
         as to certain Securities Act, Investment Company Act and U.S. tax
         matters, including that the proposed transferee is (A) either (1) a
         Non-U.S. Person purchasing in an offshore transaction in reliance on
         Regulation S (in the case of a transfer to a Person who takes delivery
         in the form of a Regulation S Certificated Bond) or (2) an
         Institutional Accredited Investor (in the case of a Person who takes
         delivery in the form of a Restricted Certificated Bond) and, in each
         case, (B) a Qualified Purchaser, the Trustee, as Bonds Registrar shall
         instruct the Depository to reduce Initial Principal Amount of such
         Restricted Global Bond by the principal amount of the beneficial
         interest in such Restricted Global Bond to be so transferred, and the
         Trustee shall record the transfer in the Bond Register and, upon
         execution by the Company, deliver one or more Regulation S Certificated
         Bonds or Restricted Certificated Bonds, as applicable, such Bonds
         together having a principal amount equal to the amount by which the
         Initial Principal Amount of the Restricted Global Bond was reduced upon
         such transfer and each such Bond in the authorized minimum denomination
         and integral multiples specified in Section 3.03. Any purported
         transfer in violation of the foregoing requirements shall be null and
         void ab initio, and the Trustee shall not register any such purported
         transfer and shall not deliver such Regulation S Certificated Bonds or
         Restricted Certificated Bonds, as applicable.

                  (c) Regulation S Certificated Bond or Restricted Certificated
         Bond to Restricted Global Bond. If the holder of a Regulation S
         Certificated Bond or Restricted Certificated Bond wishes at any time to
         transfer all or a portion of such Bond to a Person who wishes to take
         delivery thereof in the form of a beneficial interest in the Restricted
         Global Bond of the same series, such transfer may be effected, subject
         to the Applicable Procedures and only in accordance with this Section
         3.07(2)(c). Upon receipt by the Trustee, as Bonds Registrar, at its
         office in The City of New York of (i) such Regulation S Certificated
         Bond or Restricted Certificated Bond as provided in Section 3.06, and
         written instructions satisfactory to the Bonds Registrar directing the
         Trustee to credit or cause to be credited to a specified Agent Member's
         account a beneficial interest in the Restricted Global Bond in a
         principal amount equal to the Initial Principal Amount of the
         Regulation S Certificated Bond or Restricted Certificated Bond (or
         portion thereof) to be so transferred, (ii) a written order given in
         accordance with the Applicable Procedures containing information
         regarding the account of the Agent Member to be credited with such
         beneficial interest, (iii) a certificate substantially in the form set
         forth in Exhibit C-3 executed by the holder of such Regulation S
         Certificated Bond or Restricted Certificated Bond and (iv) an Investor
         Certificate executed by the proposed transferee of such Bond in the
         form of Exhibit D-3, containing certifications as to certain Securities
         Act, Investment Company Act and U.S. tax matters, including that the
         proposed transferee is a QIB and a Qualified Purchaser, the Trustee, as
         Bond Registrar, shall cancel such Regulation S Certificated Bond or
         Restricted Certificated Bond, as applicable, and shall instruct the
         Depository to increase the Initial Principal Amount of such Restricted
         Global Bond by

                                       24
<PAGE>

         the Initial Principal Amount of the Regulation S Certificated Bond or
         Restricted Certificated Bond to be transferred and to credit or cause
         to be credited to the account of the Person specified in such
         instructions a beneficial interest in such Restricted Global Bond
         having a principal amount equal to the amount by which the Initial
         Principal Amount of such Regulation S Certificated Bond or Restricted
         Certificated Bond was reduced upon such transfer. Regulation S
         Certificated Bond and Restricted Certificated Bonds may not otherwise
         be exchanged for Restricted Global Bonds or for beneficial interests in
         Restricted Global Bonds. Any purported transfer in violation of the
         foregoing requirements shall be null and void ab initio, and the
         Trustee shall not register any such purported transfer of a Regulation
         S Certificated Bond or Restricted Certificated Bond, as applicable, in
         the form of a beneficial interest in the Restricted Global Bond.

                  (d) Within Regulation S Certificated Bonds and Restricted
         Certificated Bonds or Between Certificated Bonds. If the holder of a
         Regulation S Certificated Bond or Restricted Certificated Bond wishes
         at any time to transfer all or a portion of such Bond to a Person who
         wishes to take delivery thereof in the form of a Regulation S
         Certificated Bond or Restricted Certificated Bond of the same series,
         such transfer may be effected only in accordance with this Section
         3.07(2)(d). Upon receipt by the Trustee, as Bond Registrar, at its
         office in The City of New York of (i) such Regulation S Certificated
         Bond or Restricted Certificated Bond as provided in Section 3.06, and
         written instructions satisfactory to the Bond Registrar directing the
         Trustee to cancel such Certificated Bond surrendered for transfer and
         issue the applicable Certificated Bond in a principal amount equal to
         the Initial Principal Amount of the Certificated Bond (or a portion
         thereof) to be so transferred, (ii) a certificate substantially in the
         form set forth in Exhibit C-1 (in the case of a Person who takes
         delivery in the form of a Regulation S Certificated Bond) or Exhibit
         C-2 (in the case of a Person who takes delivery in the form of a
         Restricted Certificated Bond) executed by the holder of such
         Certificated Bond surrendered for transfer and (iii) an Investor
         Certificate executed by the proposed transferee of such Bond in the
         form of Exhibit D-1 (in the case of a Person who takes delivery in the
         form of a Regulation S Certificated Bond) or Exhibit D-2 (in the case
         of a Person who takes delivery in the form of a Restricted Certificated
         Bond), containing certifications as to certain Securities Act,
         Investment Company Act and U.S. tax matters, including that the
         proposed transferee is (A) either (1) a Non-U.S. Person purchasing in
         an offshore transaction in reliance on Regulation S (in the case of a
         transfer to a Person who takes delivery in the form of a Regulation S
         Certificated Bond) or (2) an Institutional Accredited Investor (in the
         case of a Person who takes delivery in the form of a Restricted
         Certificated Bond) and, in each case, (B) a Qualified Purchaser, the
         Trustee, as Bond Registrar, shall cancel such Certificated Bond
         surrendered for transfer, and the Trustee shall record the transfer in
         the Bond Register and, upon execution by the Company, deliver one or
         more Certificated Bonds together having a principal amount equal to the
         Initial Principal Amount (or a portion thereof) of the Certificated
         Bond so transferred and each such Certificated Bond in the authorized
         minimum denomination and integral multiples specified in Section 3.03.
         Any purported transfer in violation of the foregoing requirements shall
         be null and void ab initio, and the Trustee shall not register any such
         purported transfer of a Regulation S Certificated Bond or Restricted
         Certificated Bond.

         (3) The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable

                                       25
<PAGE>

law with respect to any transfer of any interest in any Bond other than to
require delivery of certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.

SECTION 3.08. Mutilated, Destroyed, Lost and Stolen Bonds.

         (1) If any mutilated Bond is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Bond of the same series and of like tenor and Initial Principal
Amount and bearing a number not contemporaneously outstanding.

         (2) If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Bond and
(ii) such security or indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Bond has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Bond, a new Bond of the
same series and of like tenor and Initial Principal Amount and bearing a number
not contemporaneously outstanding.

         (3) If any such mutilated, destroyed, lost or stolen Bond has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Bond, pay such Bond.

         (4) Upon the issuance of any new Bond under this Section 3.08, the
Company or the Trustee may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee and its agents)
connected therewith.

         (5) Subject to clause (2) above, every new Bond issued pursuant to this
Section 3.08 in lieu of any destroyed, lost or stolen Bond shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Bond shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Bonds duly issued hereunder.

         (6) The provisions of this Section 3.08 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Bonds.

SECTION 3.09. Payment of Principal and Interest.

         (1) All payments of the principal of, the Optional Redemption Price, if
any, interest on and other amounts in respect of the Regulation S Certificated
Bonds and Restricted Certificated Bonds shall be payable at the office or agency
of the Company maintained for that purpose pursuant to Section 11.02 and at any
other office or agency maintained by the Company for that purpose (each, a
"Place of Payment"); provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Bond Register. All payments
of the principal of, the Optional Redemption Price, if any, interest on and
other amounts under the Restricted Global

                                       26
<PAGE>

Bonds shall be made to the Depositary or its nominee, as the holder thereof.
Payment to or credit to the accounts of owners of beneficial interests in such
Bonds will be effected pursuant to the procedures and customary practices of the
Depositary and its Agent Members.

         (2) Interest on any Bond (including overdue interest and interest
thereon) that is payable on any Scheduled Payment Date shall be paid to the
Person in whose name that Bond (or one or more Predecessor Bonds) is registered
at the close of business on the Regular Record Date for such interest.

         (3) Each Bond delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Bond shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Bond.

         (4) Amounts properly withheld under the Code by any Person from a
payment to any Holder of interest and/or principal and/or the Optional
Redemption Price shall be considered as having been paid by the Company, or the
Insurer if applicable, to such Holder for all purposes of this Indenture.

SECTION 3.10. Persons Deemed Owners.

         (1) Prior to due presentment of a Bond for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Bond is registered as the owner of such Bond for
the purpose of receiving payment of principal of and any premium and any
interest on such Bond and for all other purposes whatsoever, whether or not such
Bond be overdue, and none of the Company, the Trustee or any agent of the
Company or the Trustee shall be affected by notice to the contrary.

         (2) Neither any Agent Member nor any other Person on whose behalf any
Agent Member may act shall have any rights under this Indenture with respect to
any Restricted Global Bond registered in the name of the Depositary or its
nominee, or under any Restricted Global Bond registered in the name of the
Depositary or its nominee, and the Depositary or its nominee, as the case may
be, shall be treated by the Company, the Trustee and any agent of the Company or
the Trustee as the absolute owner and holder of such Restricted Global Bond
(including all Bonds represented thereby) for all purposes whatsoever.
Notwithstanding the foregoing, nothing in this Indenture shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or such nominee, as the case may be, as between such Depositary,
its Agent Members and any other Person on whose behalf an Agent Member may act,
the operation of customary practices of such Persons governing the exercise of
the rights of any Holder.

         (3) For so long as Bonds are represented by Restricted Global Bonds,
the Company and the Trustee may request, accept and rely upon a certificate or
letter of confirmation signed on behalf of the Depositary, or any form of record
executed by it, to the effect that at any particular time or throughout any
particular period any particular Person is, was or will be shown in its records
as entitled to a particular interest in the Restricted Global Bonds.

                                       27
<PAGE>

SECTION 3.11. Cancellation.

         All Bonds surrendered for payment, redemption, registration of transfer
or exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company may
at any time deliver to the Trustee for cancellation any Bonds previously
authenticated and delivered hereunder that the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Bonds previously authenticated
hereunder that the Company has not issued and sold, and all Bonds so delivered
shall be promptly cancelled by the Trustee. No Bonds shall be authenticated in
lieu of or in exchange for any Bonds cancelled as provided in this Section 3.11,
except as expressly permitted by this Indenture. All cancelled Bonds held by the
Trustee shall be disposed of by the Trustee in accordance with its customary
procedures unless the Trustee shall be directed by a Company Order to return the
cancelled Bonds to the Company.

SECTION 3.12. CUSIP, ISIN and Common Code Numbers.

         The Company in issuing the Bonds may use CUSIP, ISIN and Common Code
numbers and, if so, the Trustee shall use CUSIP, ISIN and Common Code numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers;
provided further that the Trustee shall assume no responsibility for the
accuracy of such numbers and any such redemption shall not be affected by any
defect in or omission of such numbers.

SECTION 3.13. Tax Treatment.

         In the absence of any change in law occurring after the Issue Date that
would render the treatment contemplated in this Section 3.13 inconsistent with
the law, regulation, or any interpretation thereof, based upon representations
from each Holder and beneficial owner of the Bonds, as of the Issue Date and for
so long as the Company has no reason to know and an Authorized Officer of the
Trustee or any Paying Agent has not received actual notice that such
representations by Holders and beneficial owners of at least 75% of the
aggregate principal amount of the Bonds are false or unreliable, the Company,
the Trustee and any Paying Agent agree to treat the Bonds for all United States
federal tax purposes as investment securities and not as an extension of credit
pursuant to a loan agreement; provided, however, that the Company, the Trustee
and any Paying Agent shall not be obligated under this covenant with respect to
any Bonds held by a Holder or beneficial owner with respect to which the Company
has reason to know or an Authorized Officer of the Trustee or any Paying Agent
has received actual notice that such representations made by such Holder or
beneficial owner, as the case may be, as of the Issue Date are false or
unreliable.

         By accepting a Bond or a beneficial interest therein, each Holder and
beneficial owner agrees to such treatment and covenants to take no action
inconsistent with such treatment unless otherwise notified by the Company.

                                       28
<PAGE>

SECTION 3.14. Section 3(c)(7) of the Investment Company Act Procedures for
Restricted Global Bonds.

         (1) Important Notices. On or after the Issue Date, the Company shall
send a copy of the "Section 3(c)(7) Important Notice to DTC", with a request
that DTC forward such report to the relevant Agent Members.

         (2) DTC Actions. On or after the Issue Date, the Company shall direct
DTC to take the following steps in connection with the Restricted Global Bonds:

                  (a) to include the "3c7" marker in the DTC 20-character
         security descriptor and the 48-character additional descriptor for each
         Restricted Global Bond order to indicate that sales of interests in the
         Restricted Global Bond are limited to Qualified Purchasers;

                  (b) to cause each physical DTC deliver order ticket delivered
         by DTC to purchasers to contain the DTC 20-character security
         descriptor; and to cause each DTC deliver order ticket delivered by DTC
         to purchasers in electronic form to contain the "3c7" indicator and a
         related user manual for participants, which will contain a description
         of the relevant restrictions;

                  (c) to send a Section 3(c)(7) Important Notice to all DTC
         Participants in connection with the initial issuance of the Restricted
         Global Bonds; and

                  (d) the Company will advise DTC that it is a Section 3(c)(7)
         Company and will request DTC to include the Restricted Global Bonds in
         DTC's "Reference Directory" of Section 3(c)(7) offerings.

         (3) Bloomberg Screens, etc. The Company shall on or after the Issue
Date request Bloomberg L.P. to include the following on each Bloomberg screen
containing information about the Restricted Global Bonds:

                  (a) the "Bond Box" on the bottom of the "Security Display"
         page describing each Restricted Global Bond should state: "Iss'd Under
         144A/3c7";

                  (b) the "Security Display" page should have a flashing red
         indicator stating "See Other Available Information";

                  (c) such indicator should link to an "Additional Security
         Information" page, which should state that the Restricted Global Bonds
         "are being offered in reliance on the exemption from registration under
         Rule 144A to Persons that are both (1) qualified institutional buyers
         (as defined in Rule 144A) and (2) qualified purchasers (as defined
         under Section 3(c)(7))."

         (4) CUSIP. The Company shall cause each "CUSIP" number obtained for the
Restricted Global Bonds to have an attached "fixed field" that contains "3c7"
and "144A" indicators.

                                       29
<PAGE>

SECTION 3.15. Certain Transactions Void; Company Right to Force Sale or
Redemption.

         (1) Notwithstanding anything to the contrary elsewhere in this
Indenture, any transfer of a beneficial interest in any Bonds to a Person (any
such Person, a "Non-Permitted Holder") that is not both (a) a Qualified
Institutional Buyer, a non-U.S. Person as defined in Regulation S or an
Institutional Accredited Investor and (b) a Qualified Purchaser shall be null
and void and any such purported transfer of which the Company or the Trustee
shall have notice may be disregarded by the Company and the Trustee for all
purposes. The Trustee shall hold any funds conveyed by the intended transferee
of such interest in such Restricted Global Bond, Regulation S Certificated Bond
or Restricted Certificated Bond in trust for the transferor and shall promptly
reconvey such funds to such Person in accordance with the written instructions
thereof delivered to the Trustee at its Corporate Trust Office.

         (2) If any Non-Permitted Holder shall become the owner of a beneficial
interest in any Restricted Global Bond or the Holder of a Regulation S
Certificated Bond or Restricted Certificated Bond, the Company or the Trustee on
its behalf shall, promptly after discovery that such person is a Non-Permitted
Holder by the Company or the Trustee (and notice by the Trustee to the Company,
if the Trustee makes the discovery), send notice to such Non-Permitted Holder
demanding that such Non-Permitted Holder transfer its interest to a Person that
is not a Non-Permitted Holder within thirty (30) days of the date of such
notice. If such Non-Permitted Holder fails to so transfer its Bonds, the Company
shall have the right, without further notice to the Non-Permitted Holder, either
(i) to redeem such Bonds at a redemption price equal to the principal amount
thereof plus accrued interest thereon (but excluding any Redemption Premium) or
(ii) to sell such Bonds or such Non-Permitted Holder's beneficial interest in
such Bonds, as applicable, to a purchaser selected by the Company that is a not
a Non-Permitted Holder on such terms as the Company may choose. The Company may
select the purchaser by soliciting one or more bids from one or more brokers or
other market professionals that regularly deal in securities similar to the
Bonds, and selling such Bonds to the highest such bidder. However, the Company
may select a purchaser by any other means determined by it in its sole
discretion. The Holder of each Bond, the Non-Permitted Holder and each other
Person in the chain of title from the Holder to the Non-Permitted Holder, by its
acceptance of an interest in the Bonds or the Bonds, as applicable, agrees to
cooperate with the Company and the Trustee to effect such transfers. The
proceeds of any such forced sale, net of any commissions, expenses and taxes due
in connection with such sale shall be remitted to the Non-Permitted Holder. The
terms and conditions of any sale under this Section 3.15 shall be determined in
the sole discretion of the Company, and the Company shall not be liable to any
Person having an interest in the Bonds sold as a result of any such sale or the
exercise of such discretion.

                                       30

<PAGE>

                                  ARTICLE FOUR

                                    GUARANTY

SECTION 4.01. Guaranty.

         All the provisions of Article 6 of the Common Agreement which govern
the Guaranty of the Bond Obligations of each of the Project Companies are hereby
incorporated by reference into this Indenture in the same manner and to the same
extent as if such provisions were expressly set forth herein.

                                  ARTICLE FIVE

                           SATISFACTION AND DISCHARGE

SECTION 5.01. Satisfaction and Discharge of Indenture.

         This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Bonds in this Indenture expressly provided for), and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:

         (1)      either:

                  (a) all Bonds theretofore authenticated and delivered (other
         than (i) Bonds that have been destroyed, lost or stolen and that have
         been replaced or paid as provided in Section 3.08 and (ii) Bonds for
         whose payment money has theretofore been deposited in trust or
         segregated and held in trust by the Company and thereafter repaid to
         the Company or discharged from such trust as provided in Section 11.03)
         have been delivered to the Trustee for cancellation; or

                  (b) all such Bonds not theretofore delivered to the Trustee
         for cancellation:

                           (i) have become due and payable, or

                           (ii) will become due and payable at their Stated
                  Maturity within one year, or

                           (iii) are to be called for redemption within one year
                  under arrangements satisfactory to the Trustee for the giving
                  of notice of redemption by the Trustee in the name, and at the
                  expense, of the Company,

         and the Company, in the case of (b)(i), (ii) or (iii) above, has
         deposited or caused to be deposited with the Trustee an amount
         sufficient to pay and discharge the entire

                                       31
<PAGE>

         indebtedness on such Bonds not theretofore delivered to the Trustee for
         cancellation, for principal and premium, if any, and interest to the
         date of such deposit (in the case of Bonds that have become due and
         payable) or to the Stated Maturity or Redemption Date, as the case may
         be, and such amount is available for the payment of principal, the
         Optional Redemption Price, if any, and interest in accordance with
         Section 12.05; and

         (2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company to the Insurer hereunder or pursuant to the other
Financing Documents, or has been relieved of all obligations hereunder pursuant
to Article 13; and

         (3) the Company has delivered to the Trustee, with a copy to the
Insurer (so long as no Insurer Default has occurred and is continuing), an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent in this Indenture provided for relating to the satisfaction
and discharge of this Indenture have been complied with; and

         (4) the Policy shall have terminated in accordance with its terms or
otherwise and shall have been surrendered to the Insurer.

         (5) Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 7.07, the
obligations of the Trustee to any Authenticating Agent under Section 7.13 and,
if money shall have been deposited with the Trustee pursuant to subclause (b) of
clause (1) of this Section 5.01, the obligations of the Trustee under Section
11.03(2) Section 12.05 shall survive.

                                  ARTICLE SIX

                                    REMEDIES

SECTION 6.01. Acceleration of Maturity and Rescission and Annulment by the
Holders.

         (1) If an Insurer Default occurs and is continuing and if an Issuer
Event of Default has occurred and is continuing, then and in every such case the
Holders evidencing not less than 60% of the Remaining Principal Amount of the
Outstanding Bonds may direct the Trustee to declare the Bonds to be immediately
due and payable by written notice to the Company, and upon any such declaration
the unpaid principal amount of the Bonds, together with accrued and unpaid
interest thereon through the date of acceleration (the "Accelerated Bond
Obligations"), shall become immediately due and payable and (b) require the
Company immediately, without presentment, demand, protest or other notice of any
kind, all of which the Company hereby expressly waives, to pay to the Collateral
Agent an amount in immediately available funds equal to the aggregate amount of
Accelerated Bond Obligations.

         Notwithstanding the foregoing, upon the occurrence of an Issuer Event
of Default specified in Section 7.1(d) of the Common Agreement, the Bonds shall
become immediately due and payable, without declaration, notice or demand by or
to any Person.

                                       32
<PAGE>

         (2) At any time after a declaration of acceleration of maturity has
been made by the Holders and before a judgment or decree for payment of the
amount due has been obtained by the Trustee as hereinafter provided in this
Article Six, the Holders evidencing not less than 60% of the Remaining Principal
Amount of the Outstanding Bonds, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:

                  (a) the Company has paid or deposited with the Trustee a sum
         sufficient to pay all principal of and interest on the Bonds and all
         other amounts that would then be due hereunder or upon the Bonds if the
         Issuer Event of Default giving rise to such acceleration had not
         occurred;

                  (b) the Company has paid all the outstanding Swap Obligations
         then due and payable under the Swap Agreement to the Swap Counterparty,
         if applicable, as evidenced by an Officer's Certificate delivered to
         the Trustee; and

                  (c) all Issuer Events of Default, other than the nonpayment of
         the principal of the Bonds that has become due solely by such
         acceleration, have been cured or waived as provided in Section 6.14.

No such rescission shall affect any subsequent default or impair any right
consequent thereto.

SECTION 6.02. Suits for Enforcement by Trustee.

         If an Insurer Default occurs and is continuing and if an Issuer Event
of Default has occurred and is continuing, the Trustee shall, at the direction
of the Holders evidencing not less than 60% of the Remaining Principal Amount of
the Outstanding Bonds, proceed to protect and enforce its rights and the rights
of the Holders under this Indenture by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted in this Indenture, or
to enforce any other proper remedy.

SECTION 6.03. Reserved.

SECTION 6.04. Application of Money Collected.

         Any money collected by the Collateral Agent from the Company pursuant
to Section 6.01 shall be distributed by the Collateral Agent in accordance with
Section 7.7 of the Common Agreement.

SECTION 6.05. Reserved.

SECTION 6.06. Trustee May File Proofs of Claim.

         In case of any judicial proceeding relative to the Company, its
property or its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
necessary or appropriate in order to have claims of the Holders or the Trustee,
as the case may be, allowed in any such proceeding. In particular, the Trustee
shall be authorized to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator,

                                       33
<PAGE>

sequestrator or other similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and if the
Trustee shall consent to the making of such payments directly to the Holders to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.

           No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder or
the Insurer any plan of reorganization, arrangement, adjustment or composition
affecting the Bonds or the rights of any Holder or the Insurer or to authorize
the Trustee to vote in respect of the claim of any Holder or the Insurer in any
such proceeding; provided, however, that the Trustee may, on behalf of the
Holders (but not on behalf of the Insurer), vote for the election of a trustee
in bankruptcy or similar official and be a member of a creditors' or other
similar committee.

SECTION 6.07. Trustee May Enforce Claims Without Possession of Bonds.

         All rights of action and claims under this Indenture or the Bonds may
be prosecuted and enforced by the Trustee without the possession of any of the
Bonds or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Bonds or the Insurer, as applicable, in respect of which such judgment
has been recovered.

SECTION 6.08. Limitation on Suits.

         No Holder of any Bond shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:

                  (1) such Holder has previously given written notice to the
         Trustee of a continuing Issuer Event of Default and a continuing
         Insurer Default;

                  (2) the Holders of not less than 60% in Remaining Principal
         Amount of the Outstanding Bonds shall have made written request to the
         Trustee to institute proceedings in respect of such Issuer Event of
         Default and Insurer Default in its own name as Trustee hereunder;

                  (3) such Holder (or Holders) has offered to the Trustee
         indemnity satisfactory to it against the costs, expenses and
         liabilities to be incurred in compliance with such request;

                  (4) the Trustee for 30 days after its receipt of such notice,
         request and offer of indemnity satisfactory to it has failed to
         institute any such proceeding; and

                  (5) no direction inconsistent with such written request has
         been given (in accordance with the terms of this Indenture) to the
         Trustee during such 30-day period by the Holders of a majority in
         Remaining Principal Amount of the Bonds;

                                       34
<PAGE>

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner in this Indenture provided and for the equal and ratable benefit of
all of such Holders, subject to the provisions of this Indenture.

SECTION 6.09. Unconditional Right of Holders to Receive Principal and Interest.

         Notwithstanding any other provision in this Indenture, the Holder of
any Bond shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium, including any Redemption Premium,
and interest on such Bond on the respective Scheduled Payment Dates expressed in
such Bond and in this Indenture (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment
and such rights shall not be impaired without the consent of such Holder.

SECTION 6.10. Restoration of Rights and Remedies.

         If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.

SECTION 6.11. Remedies Not Exclusive.

         (1) Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Bonds in the last paragraph of
Section 3.08, no remedy conferred upon or reserved to the Trustee or Holders
under this Indenture is intended to be exclusive of any other remedy or
remedies, but every such remedy shall be cumulative and in addition to every
other remedy conferred in this Indenture or now or hereafter existing at law or
in equity or by statute.

         (2) The Trustee shall have, with respect to the Collateral in
accordance with the Collateral Documents, in addition to any other remedies that
may be available to it at law or in equity pursuant to this Indenture, all
rights and remedies conferred upon a secured party under the UCC (it being
understood that, so long as no Insurer Default has occurred and is continuing,
the Insurer shall have the exclusive right under Section 1.04(4) to exercise all
the rights and remedies of the Holders under this Indenture).

SECTION 6.12. Delay or Omission Not Waiver.

         No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing under this Indenture shall impair any such right or
remedy or constitute a waiver of any Issuer Event of Default and/or Insurer
Default, as applicable, or an acquiescence therein. Every right and remedy given
by this Article Six or by law to the Trustee or to the Holders may be

                                       35
<PAGE>

exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.

SECTION 6.13. Control of Proceedings.

         The Holders of not less than 60% of the Remaining Principal Amount of
the Outstanding Bonds shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, with respect to the
Bonds (it being understood that, so long as no Insurer Default has occurred and
is continuing, the Insurer shall have the exclusive right under Section 1.04(4)
to exercise the rights of the Holders in determining whether and how to exercise
any such vote), provided that:

                  (a) such direction shall not be in conflict with any rule of
         law or with this Indenture and shall not involve the Trustee in
         personal liability or expense for which the Trustee has not received a
         reasonable indemnity, and

                  (b) the Trustee may take any other action deemed proper by the
         Trustee which is not inconsistent with such direction.

SECTION 6.14. Waiver of Past Defaults.

         (1) The Holders of not less than 60% in Remaining Principal Amount of
the Outstanding Bonds may on behalf of the Holders of all the Bonds, waive any
past default hereunder and its consequences (it being understood that, so long
as no Insurer Default has occurred and is continuing, the Insurer shall have the
exclusive right under Section 1.04(4) to exercise the rights of the Holders in
determining whether so to waive), except a default:

                  (a) in the payment of the principal of or interest on any
         Bond, or

                  (b) in respect of a covenant or provision hereof which under
         Article Ten cannot be modified or amended without the consent of the
         Holder of each Bond affected.

         (2) Upon any such waiver, such default shall cease to exist, and any
Issuer Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon. SECTION
6.15. Undertaking for Costs.

         In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, having due regard to the merits and good faith of the
claims or defenses made by such party litigant, provided that this Section 6.15
shall not be deemed to authorize any court to require such an undertaking or to
make such an assessment in any suit instituted by the Trustee.

                                       36
<PAGE>

SECTION 6.16. Waiver of Usury, Stay or Extension Laws.

           The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power in this Indenture granted to the Trustee, including the power to liquidate
and apply the Collateral, but will suffer and permit the execution of every such
power as though no such law had been enacted.

                                 ARTICLE SEVEN

                                   THE TRUSTEE

SECTION 7.01. Certain Duties and Responsibilities.

         (1) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.

         (2) The Trustee shall keep appropriate records in connection with its
obligations and duties arising under this Indenture in a commercially reasonable
form and upon resignation or removal shall deliver such records or appropriate
summaries thereof in the form and manner then kept to its successor or to the
Company.

         (3) All moneys and other property received by the Trustee under or
pursuant to any provision of this Indenture shall be held in trust for the
purposes of this Indenture and the Trustee (except as otherwise provided in this
Indenture) shall have no right to set off or apply any such monies or other
property against any obligation of the Company.

         (4) If an Issuer Event of Default and/or an Insurer Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.

         (5) Except during the continuance of an Issuer Event of Default and/or
an Insurer Default:

                  (a) the Trustee undertakes to perform such duties and only
         such duties as are specifically set forth in this Indenture and no
         implied covenants or obligations shall be read into this Indenture
         against the Trustee, it being expressly understood that the Trustee

                                       37
<PAGE>

         has no obligation to monitor compliance by the Company with any
         covenant or agreement contained or incorporated by reference in this
         Indenture (including, but not limited to Article Eleven hereof); and

                  (b) in the absence of bad faith on its part, the Trustee may
         conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and, if required by the terms of this
         Indenture, conforming to the requirements of this Indenture; provided,
         however, that in the case of any such certificates or opinions which by
         any provision hereof are specifically required to be furnished to the
         Trustee, the Trustee shall be under a duty to examine the same to
         determine whether or not they conform to the requirements of this
         Indenture (but need not confirm or investigate the accuracy of
         mathematical calculations or other facts stated therein).

         (6) The Trustee may not be relieved from liability for its own gross
negligent action, its own negligent failure to act or its own willful
misconduct, except that:

                  (a) this paragraph does not limit the effect of paragraph (1)
         of this Section 7.01;

                  (b) the Trustee shall not be liable for any error of judgment
         made in good faith unless it is proved that the Trustee was negligent
         in ascertaining the pertinent facts;

                  (c) the Trustee shall not be liable with respect to any action
         it takes or omits to take in good faith in accordance with a written
         direction received by it pursuant to Section 6.13; and

                  (d) anything in this Indenture to the contrary
         notwithstanding, in no event shall the Trustee (in any of its
         capacities hereunder) be liable under or in connection with this
         Indenture for indirect, special, incidental, punitive or consequential
         losses or damages of any kind whatsoever, including but not limited to
         lost profits, whether or not foreseeable, even if the Trustee (in any
         of its capacities hereunder) has been advised of the possibility
         thereof and regardless of the form of action in which such damages are
         sought.

SECTION 7.02. Notice of Defaults.

         If an Issuer Event of Default occurs with respect to the Bonds, and an
Authorized Officer of the Trustee in the Corporate Trust Office has actual
knowledge of its occurrence and continuance, the Trustee shall give the Holders,
with a copy to the Company and the Insurer, each promptly, notice of such
default.

SECTION 7.03. Certain Rights of Trustee.

         Subject to the provisions of Section 7.01:

         (1) the Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;

                                       38
<PAGE>

         (2) any request or direction of the Company mentioned in this Indenture
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Management Committee shall be sufficiently evidenced by a
Board Resolution;

         (3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be in this Indenture specifically prescribed) may, in the absence of bad faith
on its part, conclusively rely upon an Officer's Certificate;

         (4) the Trustee may consult with counsel of its choice and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;

         (5) (a) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders or the Insurer pursuant to this Indenture, unless such
Holders or the Insurer shall have offered to the Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction, and the Insurer
hereby agrees to indemnify the Trustee against the costs, expenses and
liabilities which might be incurred by the Trustee in compliance with the
requests or directions of the Insurer pursuant to this Indenture to exercise any
of the rights or powers vested in the Trustee by this Indenture;

         (b) the Collateral Agent shall be under no obligation to exercise any
of the rights or powers vested in it by the Common Agreement at the request or
direction of any of the Holders or the Insurer pursuant to the Common Agreement,
unless such Holders or the Insurer shall have offered to the Collateral Agent
security or indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction,

         (6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the cost of the Company and shall incur no liability of any kind by reason of
such inquiry or investigation;

         (7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;

         (8) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;

         (9) the Trustee shall not be deemed to have notice of any Insurer
Default or Issuer Event of Default unless an Authorized Officer of the Trustee
has actual knowledge thereof or

                                       39
<PAGE>

unless written notice of any event which is in fact such a default is received
by the Trustee at the Corporate Trust Office of the Trustee, and such notice
references the Bonds and this Indenture;

         (10) the rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and each agent, custodian and other person employed to act hereunder;
and

         (11) the Trustee may request that the Company deliver an Officer's
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officer's Certificate may be signed by any person authorized to sign an
Officer's Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.

SECTION 7.04. Not Responsible for Recitals or Issuance of Bonds.

         The recitals contained in this Indenture and in the Bonds, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Bonds. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Bonds or the proceeds thereof.

SECTION 7.05. May Hold Bonds.

         The Trustee, any Authenticating Agent, any Paying Agent, any Bond
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Bonds and, subject to Section 7.13,
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Authenticating Agent, Paying Agent, Bond Registrar or such
other agent.

SECTION 7.06. Money Held in Trust.

         Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law or pursuant to the terms
of this Indenture. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.

SECTION 7.07. Compensation and Reimbursement.

         Subject to Article Six, the Company agrees:

         (1) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall agree in writing from time to time for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);

                                       40
<PAGE>

         (2) except as otherwise expressly provided in this Indenture, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its gross negligence, bad
faith or willful misconduct; and

         (3) to indemnify the Trustee and any predecessor trustee and their
agents for, and to hold each of them harmless against, any and all loss, damage,
claim, liability or expense, including taxes (other than taxes based upon,
measured by or determined by the income of the Trustee), incurred without gross
negligence, bad faith or willful misconduct on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder.

SECTION 7.08. Corporate Trustee Required; Eligibility.

         There shall at all times be one (and only one) Trustee hereunder
(except as may be required pursuant to Section 7.11), which shall be a Person
that has a combined capital and surplus of at least $50,000,000 and has its
Corporate Trust Office in The City of New York, the State of New York. If such
Person publishes reports of condition at least annually, pursuant to law or to
the requirements of a supervising or examining authority, then for the purposes
of this Section 7.08, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.08, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article Seven.

         If the appointment of a separate or co-trustee is required pursuant to
Section 7.11, such separate or co-trustee shall meets the requirements of the
Trustee set forth in this Section 7.08.

SECTION 7.09. Resignation and Removal; Appointment of Successor.

         (1) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article Seven shall become effective until
the acceptance of appointment by the successor Trustee under Section 7.10.

         (2) The Trustee may resign at any time by giving written notice thereof
to the Company, with a copy to the Insurer. If an instrument of acceptance by a
successor Trustee required by Section 7.10 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction at the cost
of the Company for the appointment of a successor Trustee.

         (3) The Trustee may be removed at any time by Act of the Holders of not
less than 60% in Remaining Principal Amount of the Outstanding Bonds (it being
understood that, so long as no Insurer Default has occurred and is continuing,
the Insurer shall have the exclusive right under Section 1.04(4) to exercise all
the rights of the Holders under this Indenture), delivered to the Trustee and to
the Company. If an instrument of acceptance by a successor Trustee shall not

                                       41
<PAGE>

have been delivered to the Trustee within 60 days after the giving of such
notice of removal, the Trustee being removed may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Bonds of such series.

         (4) If at any time:

                  (a) the Trustee shall cease to be eligible under Section 7.08
         and shall fail to resign after written request therefor by the Company
         or by any such Holder, or

                  (b) the Trustee shall become incapable of acting or shall be
         adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
         property shall be appointed or any public officer shall take charge or
         control of the Trustee or of its property or affairs for the purpose of
         rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 6.15, any Holder who has been a bona fide
Holder of a Bond for at least six months, or the Insurer may, on behalf of such
Holder and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.

         (5) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall, with the consent of the Insurer (so long
as no Insurer Default has occurred and is continuing), such consent not to be
unreasonably withheld, promptly appoint a successor Trustee that shall comply
with the applicable requirements of Section 7.10, it being agreed that the
Insurer shall consent to the appointment of any successor Trustee that (i) is a
Federal or U.S. state-chartered depository institution or trust company, (ii)
has a combined capital and surplus of at least $50,000,000 and has its corporate
trust office in The City of New York, the State of New York, and (iii) the
short-term and long-term unsecured debt obligations of which (or, in the case of
a depository institution or trust company that is the principal subsidiary of a
holding company, the short-term and long-term unsecured debt obligations of
which) are rated P-1 and Aaa by Moody's, or A-1+ and AAA by S&P at the time any
amounts are held on deposit therein. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
shall be appointed by Act of the Holders of not less than 60% in Remaining
Principal Amount of the Outstanding Bonds (it being understood that, so long as
no Insurer Default has occurred and is continuing, the Insurer shall have the
exclusive right under Section 1.04(4) to exercise the rights of the Holders)
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 7.10, become the successor Trustee
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 7.10, any Holder who has been a
bona fide Holder of a Bond for at least six months, or the Insurer, as long as
no Insurer Default has occurred and is continuing, may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee.

         (6) The Company shall give prompt notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 1.06 and the Insurer in the manner
provided in Section 1.05 (so long as no Insurer Default

                                       42
<PAGE>

has occurred and is continuing). Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.

SECTION 7.10. Acceptance of Appointment by Successor.

         Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company, the Insurer and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on request of
the Company or the successor Trustee, such retiring Trustee shall, upon payment
of its charges (subject to Section 7.07 of this Indenture), execute and deliver
an instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder. Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts.

         No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article Seven.

SECTION 7.11. Appointment of Co-Trustee.

         It is the purpose of this Indenture that there shall be no violation of
any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as trustee in such
jurisdiction. It is recognized that in case of litigation under this Indenture,
and in particular in case of the enforcement thereof on default, or in the case
the Trustee deems that by reason of any present or future law of any
jurisdiction it may not exercise any of the powers, rights or remedies herein
granted to the Trustee or hold title to the properties, in trust, as herein
granted or take any action which may be desirable or necessary in connection
therewith, it may be necessary that the Trustee appoint an individual or
institution as a separate trustee or co-trustee. The following provisions of
this Section are adopted to these ends.

         (1) In the event that the Trustee appoints an additional individual or
institution as a separate trustee or co-trustee, each and every remedy, power,
right, claim, demand, cause of action, immunity, estate, title, interest and
lien expressed or intended by this Indenture to be exercised by or vested in or
conveyed to the Trustee with respect thereto shall be exercisable by and vest in
such separate trustee or co-trustee but only to the extent necessary to enable
such separate trustee or co-trustee to exercise such powers, rights and
remedies, and only to the extent that the Trustee by the laws of any
jurisdiction is incapable of exercising such powers, rights and remedies and
every covenant and obligation necessary to the exercise thereof by such separate
trustee or co-trustee shall run to and be enforceable by either of them.

         (2) Should any instrument in writing from the Company be required by
the separate trustee or co-trustee so appointed by the Trustee for more fully
and certainly vesting in and confirming to him or it such properties, rights,
powers, trusts, duties and obligations, any and all such instruments in writing
shall, on request, be executed, acknowledged and delivered by the Company at the
expense of the Company; provided, that if an Issuer Event of Default shall have
occurred and be continuing, if the Company does not execute any such instrument
within fifteen

                                       43
<PAGE>

(15) days after request therefor, the Trustee shall be empowered as an
attorney-in-fact for the Company to execute any such instrument in the Company's
name and stead. In case any separate trustee or co-trustee or a successor to
either shall die, become incapable of acting, resign or be removed, all the
estates, properties, rights, powers, trusts, duties and obligations of such
separate trustee or co-trustee, so far as permitted by law, shall vest in and be
exercised by the Trustee until the appointment of a new trustee or successor to
such separate trustee or co-trustee.

SECTION 7.12. Merger, Conversion, Consolidation or Succession to Business.

         Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article Seven,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. If any Bonds shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Bonds so authenticated with the same effect as if such successor
Trustee had itself authenticated such Bonds.

SECTION 7.13. Appointment of Authenticating Agent.

         The Trustee may appoint an "Authenticating Agent" or Agents who shall
be authorized to act on behalf of the Trustee to authenticate Bonds issued upon
original issue and upon exchange, registration of transfer or partial redemption
or pursuant to Section 3.08, and Bonds so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Bonds by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by federal or state authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section 7.13, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 7.13, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 7.13.

         Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this

                                       44
<PAGE>

Section 7.13, without the execution or filing of any paper or any further act on
the part of the Trustee or the Authenticating Agent.

         An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or if at any time such Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section 7.13, the Trustee may appoint a successor Authenticating Agent which
shall be acceptable to the Company and shall give notice of such appointment in
the manner provided in Section 1.06 to all Holders of Bonds and in the manner
provided in Section 1.05 to the Insurer. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 7.13.

         The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.

         If an appointment is made pursuant to this Section 7.13, the Bonds may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:

         This is one of the Bonds of the series designated therein referred to
in the within-mentioned Indenture.

Dated:

                                                                             ,
                                                  ---------------------------
                                                        THE BANK OF NEW YORK,
                                                                   As Trustee

                                                  By:                        ,
                                                      -----------------------
                                                      As Authenticating Agent

                                                  By:
                                                      -----------------------
                                                         Authorized Signatory

                                       45
<PAGE>

                                  ARTICLE EIGHT

                HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 8.01. Company to Furnish Trustee Names and Addresses of Holders.

         The Company will furnish or cause to be furnished to the Trustee to the
extent such information is in the possession of the Company:

         (1) quarterly, not later than ten days after each Regular Record Date,
a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of each series of Bonds as of the fifteenth day
(whether or not a Business Day) prior to such date, and

         (2) at such other times as the Trustee may reasonably request in
writing, within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior to the
time such list is furnished;

which list may exclude, in either case, any names and addresses received by the
Trustee in its capacity as Bond Registrar.

SECTION 8.02. Preservation of Information; Communications to Holders.

         The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 8.01 and the names and
addresses of Holders received by the Trustee in its capacity as Bond Registrar.
The Trustee may destroy any list furnished to it as provided in Section 8.01
upon receipt of a new list so furnished.

         Within five Business Days after the receipt by the Trustee of a written
application by any three or more Holders or the Insurer stating that the
applicants desire to communicate with other Holders with respect to their rights
under the Indenture or the Bonds, accompanied by a copy of the form of proxy or
other communication that such applicants propose to transmit, and by reasonable
proof that each such applicant, except in the case of the Insurer, has owned a
Bond for a period of at least six months preceding the date of such application,
the Trustee shall deliver such proxy or other communication, at the expense of
the applicants, to the Holders of the Bonds in the manner provided in Section
1.06. Every Holder of Bonds, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders.

SECTION 8.03. Reports by Company and Project Companies.

         (1) So long as any of the Bonds are Outstanding, and the Company is not
subject to Section 13 or 15(d) of the Exchange Act, upon request the Company
shall provide to Holders or prospective purchasers designated by such Holders
Rule 144A Information in order to permit compliance with Rule 144A under the
Securities Act in connection with the resale of such Bond by such Holder.

                                       46
<PAGE>

         (2) In addition to the obligations set forth in paragraph (1), the
Company shall deliver or cause to be delivered to the Trustee the financial
statements and other information of the Company described in Section 2.3(a) of
the Common Agreement.

         (3) Each of the Project Companies shall deliver or cause to be
delivered to the Trustee the financial statements and other information of such
Project Company described in Section 3.2(c) of the Common Agreement.

         (4) The Trustee shall promptly deliver or cause to be delivered the
financial statements and information described in clauses (2) and (3) above to
any Holder that requests such information from the Trustee.

         (5) Delivery of the financial statements and other information referred
to in this Section 8.03 and other statements, reports, information and documents
to the Trustee is for informational purposes only and the Trustee's receipt of
such statements, reports, information and documents shall not constitute
constructive notice of any information contained therein, including the
Company's compliance with any of its covenants hereunder as to which the Trustee
is entitled to rely exclusively on the Officer's Certificate delivered to the
Trustee pursuant to Section 11.04 of this Indenture.

                                  ARTICLE NINE

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 9.01. Company May Consolidate, Etc., Only on Certain Terms.

         Subject to the covenants set forth in Article Eleven of this Indenture,
the Company shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, and the Company shall not permit any Person to consolidate with or merge
into the Company, or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:

                  (1) immediately after giving effect to such transaction, no
         Issuer Event of Default, and no event which, after notice or lapse of
         time or both, would become an Issuer Event of Default, shall have
         happened and be continuing;

                  (2) if, as a result of any such consolidation or merger, or
         such conveyance, transfer or lease, any properties or assets of the
         Company other than the Collateral would become subject to a mortgage,
         pledge, lien, security interest or other encumbrance that would not be
         permitted by this Indenture or the other Financing Documents, the
         Company or such successor Person, as the case may be, shall take such
         steps as shall be necessary effectively to secure the Bonds of each
         series equally and ratably with (or prior to) all indebtedness secured
         thereby;

                  (3) the Company has delivered to the Trustee, with a copy to
         the Insurer (so long as no Insurer Default has occurred and is
         continuing), an Officer's Certificate and an

                                       47
<PAGE>

         Opinion of Counsel, each stating that such consolidation or merger,
         conveyance, transfer or lease and, if a supplemental indenture is
         required in connection with such transaction, such supplemental
         indenture, comply with this Article Nine and that all conditions
         precedent in this Indenture provided for relating to such transaction
         have been complied with; and

                  (4) at any time when there is no Insurer Default that has
         occurred and is continuing, the Insurer has delivered to the Company,
         with a copy to the Trustee, a written consent of the Insurer, in its
         sole discretion, consenting to such transaction prior to the
         consummation thereof.

SECTION 9.02. Successor Substituted.

         Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 9.01, the successor Person formed by such consolidation or into which
the Company is merged or to which such conveyance, transfer or lease is made,
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture with the same effect as if such successor
Person had been named as the Company in this Indenture, and thereafter, except
in the case of a lease, the Company shall be relieved of all obligations and
covenants under this Indenture, the Bonds and the other Financing Documents.

                                  ARTICLE TEN

                             SUPPLEMENTAL INDENTURES

SECTION 10.01. Supplemental Indentures Without Consent of Holders.

         Without the consent of Holders of the Bonds, but, so long as no Insurer
Default has occurred and is continuing, with the consent of the Insurer, in its
sole discretion, the Company, when authorized by a Board Resolution, and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in a form satisfactory to the Trustee, for any
of the following purposes:

                  (1) to add to the covenants of the Company and the Project
         Companies for the benefit of the Holders of the Bonds (it being
         understood that all such additional covenants shall be for the equal
         benefit of all series of Bonds) or to surrender any right or power in
         this Indenture conferred upon the Company or any Project Company; or

                  (2) to add any additional Issuer Events of Default or Project
         Events of Default for the benefit of the Holders of the Bonds (it being
         understood that all such additional Issuer Events of Default or Project
         Events of Default shall be for the equal benefit of all series of
         Bonds); or

                  (3) to provide additional collateral for the Bonds; or

                                       48
<PAGE>

                  (4) to evidence and provide for the acceptance of appointment
         hereunder by a successor Trustee with respect to the Bonds; or

                  (5) to permit the registration of some or all of the Bonds
         under the Securities Act and the qualification of this Indenture under
         the U.S. Trust Indenture Act of 1939, as amended, or the listing or
         inclusion of any or all of the Bonds on any securities exchange or
         quotation system; or

                  (6) to cure any ambiguity, to correct or supplement any
         provision in this Indenture which may be defective or inconsistent with
         any other provision in this Indenture, or to make any other provisions
         with respect to matters or questions arising under this Indenture,
         which shall not be inconsistent with any of the provisions of this
         Indenture, provided that such action pursuant to this paragraph (6)
         shall not materially adversely affect the interests of the Holders of
         any series of Bonds or the Insurer; or

                  (7) to establish the terms of any series of Additional Bonds
         to be issued under this Indenture.

SECTION 10.02. Supplemental Indentures With Consent of Holders.

         (1) Subject to paragraph (2) below, the Company, when authorized by a
Board Resolution, and the Trustee may, (a) at any time when no Insurer Default
has occurred and is continuing, with the consent of the Insurer, in its sole
discretion, or (b) at any time when an Insurer Default has occurred and is
continuing, with the consent of a majority of the Holders of the Outstanding
Bonds affected thereby, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders of Bonds of such series under this Indenture.

         (2) No such supplemental indenture entered into pursuant to this
Section 10.02 shall, without the consent of the Holder of each Outstanding Bond
affected thereby:

                  (a) change any Scheduled Payments with respect to such Bond,

                  (b) change any Scheduled Payment Date with respect to such
         Bond,

                  (c) change the Stated Maturity of such Bond,

                  (d) reduce the Remaining Principal Amount or the Optional
         Redemption Price of such Bond,

                  (e) reduce the rate of interest on such Bond,

                  (f) change the place of payment where, or the coin or currency
         in which, the principal of, the Optional Redemption Price, if any, or
         interest on such Bond is payable,

                  (g) impair the right to institute suit for the enforcement of
         any such payment on or after the Stated Maturity thereof (or, in the
         case of redemption, on or after the Redemption Date),

                                       49
<PAGE>

                  (h) reduce the percentage in Remaining Principal Amount of the
         Bonds, the consent of whose Holders is required for any such
         supplemental indenture, or the consent of whose Holders is required for
         any waiver (of compliance with certain provisions of this Indenture or
         certain defaults hereunder and their consequences) provided for in this
         Indenture, and

                  (i) modify any of the provisions of this Section 10.02 or
         Section 6.14, except to increase any such percentage or to provide that
         certain other provisions of this Indenture cannot be modified or waived
         without the consent of the Holder of each Bond affected thereby;
         provided, however, that this paragraph shall not be deemed to require
         the consent of any Holder with respect to changes in the references to
         "the Trustee" and concomitant changes in this Section 10.02, or the
         deletion of this proviso, in accordance with the requirements of
         Sections 7.10 and 10.01(6).

         It shall not be necessary for any Act of Holders under this Section
10.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.

SECTION 10.03. Execution of Supplemental Indentures.

         In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article Ten or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is permitted and does not violate, conflict with or cause a default
under this Indenture. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.

SECTION 10.04. Effect of Supplemental Indentures.

         Upon the execution of any supplemental indenture under this Article
Ten, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Bonds theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.

SECTION 10.05. Reference in Bonds to Supplemental Indentures.

         Bonds authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Ten may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Bonds of any series so modified as to conform, in the opinion of the Trustee
and the Company, to any such supplemental indenture may be prepared and executed
by the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Bonds of such series.

                                       50
<PAGE>

                                 ARTICLE ELEVEN

                                    COVENANTS

         The Company hereby makes for the benefit of the Holders of the Bonds of
each series the covenants set forth in Sections 2.1, 2.2, 2.3, 2.4, 2.5, 2.6,
2.7, 2.8, 2.9 and 2.11 and Article 4 of the Common Agreement in the same manner
and to the same extent as if such covenants were expressly set forth in this
Article Eleven of this Indenture. Each of the Guarantors hereby makes for the
benefit of the Holders of the Bonds of each series the covenants set forth in
Article 3 and Article 5 of the Common Agreement in the same manner and to the
same extent as if such covenants were expressly set forth in this Article Eleven
of this Indenture. In addition, the Company makes the following covenants for
the benefit of the Holders of the Bonds.

SECTION 11.01. Payment of Principal, Optional Redemption Price and Interest.

         The Company covenants and agrees for the benefit of each series of
Bonds, that it will duly and punctually pay the principal, the Optional
Redemption Price, if any, and interest then due and owing on the Bonds of that
series in accordance with the terms of the Bonds of that series and this
Indenture.

SECTION 11.02. Maintenance of Office or Agency.

         The Company will maintain in The City of New York, New York, an office
or agency where Bonds may be presented or surrendered for payment, where Bonds
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Bonds and this Indenture
may be served. Unless and until the Trustee shall have received from the Company
notice to the contrary, such presentations, surrenders, notices and demands may
be made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands. The Company will give prompt written notice to
the Trustee, with a copy to the Insurer (so long as no Insurer Default has
occurred and in continuing), of any change in the location of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee, with a copy to the
Insurer (so long as no Insurer Default has occurred and in continuing), with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.

           The Company may also from time to time designate one or more other
offices or agencies (in or outside The City of New York, New York) where the
Bonds may be presented or surrendered for any or all such purposes and may from
time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York, New York for
such purposes. The Company shall give prompt written notice to the Trustee, with
a copy to the Insurer (so long as no Insurer Default has occurred and in
continuing), of any such designation or rescission and of any change in the
location of any such other office or agency.

                                       51
<PAGE>

SECTION 11.03. Money for Bond Payments to Be Held in Trust.

         (1) The Company hereby appoints the Trustee as the initial Paying Agent
for amounts due on the Bonds. The Company may appoint any other Person to act as
Paying Agent to perform all functions of Paying Agent under this Indenture, as
fully to all intents and purposes as though the Paying Agent has been expressly
authorized to perform such functions.

         Whenever the Company shall have one or more Paying Agents, the Trustee
shall, prior to each due date of the principal of or any premium or interest on
any Bonds, deposit with such Paying Agent a sum sufficient to pay such amount,
such sum to be held in trust pursuant to this Indenture.

         If the Company shall at any time act as its own Paying Agent with
respect to the Bonds, it shall, on or before each due date of the principal of
or any premium or interest on any of the Bonds, segregate and hold in trust for
the benefit of the Persons entitled thereto the proceeds deposited with it
pursuant to the preceding paragraph until such sums shall be paid to such
Persons or otherwise disposed of as in this Indenture provided and will promptly
notify the Trustee and the Insurer (so long as no Insurer Default has occurred
and in continuing) of its action or failure so to act.

         The Company shall cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section 11.03,
that such Paying Agent will (i) comply with the provisions of this Indenture
applicable to it as a Paying Agent; (ii) hold all sums held by it for the
payment of amounts due with respect to the Bonds in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as in this Indenture provided and pay such sums to such
Persons as in this Indenture provided; (iii) give the Trustee, with a copy to
the Insurer (so long as no Insurer Default has occurred and in continuing),
prompt notice of any default by the Company of which it has actual knowledge in
the making of any payment required to be made with respect to the Bonds; and
(iv) during the continuance of any default by the Company (or any other obligor
upon the Bonds) in the making of any payment in respect of the Bonds, upon the
written request of the Trustee, forthwith pay to the Trustee all sums held in
trust by such Paying Agent as such.

         The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

         (2) Any money deposited by the Company with the Trustee, or deposited
with any Paying Agent, or then held by the Company, in trust for the payment of
the principal of or any Optional Redemption Price or interest on any Bonds and
remaining unclaimed until the later of (i) two years after such principal, the
Optional Redemption Price or interest has become due and payable and (ii) the
termination of the Policy, whether on its terms or otherwise, shall be paid to
the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Bond shall thereafter, as an
unsecured creditor, look only to the

                                       52
<PAGE>

Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided however, that the Trustee or
such Paying Agent before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in The City of New York, New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.

SECTION 11.04. Statement by Officers as to Default.

         The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officer's
Certificate, stating, to the knowledge of the signers thereof, whether or not
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company is in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge.

SECTION 11.05. Waiver of Certain Covenants.

         The Company or the Project Companies may omit in any particular
instance to comply with any covenant or condition set forth in this Article 11
or incorporated by reference in this Indenture if before the time for such
compliance the Holders of at least 60% in Remaining Principal Amount of the
Outstanding Bonds shall, by Act of such Holders, either waive such compliance in
such instance or generally waive compliance with such covenant or condition (it
being understood that, so long as no Insurer Default has occurred and is
continuing, the Insurer shall have the exclusive right under Section 1.04(4) to
exercise the rights of the Holders in determining whether to make such waiver),
but no such waiver shall extend to or affect such covenant or condition except
to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company or any Project Company, as applicable,
and the duties of the Trustee in respect of any such covenant or condition shall
remain in full force and effect.

                                 ARTICLE TWELVE

                               REDEMPTION OF BONDS

SECTION 12.01. Right of Redemption.

         (1) The Company may, at any time and from time to time, at its option,
redeem the Outstanding Bonds (in whole or in part) at a redemption price (the
"Optional Redemption Price") equal to 100% of the principal amount thereof, plus
accrued and unpaid interest on the Bonds to the applicable Redemption Date. The
Optional Redemption Price shall also include the applicable redemption premium
described in clause (2) of this Section 12.01 (the "Redemption

                                       53
<PAGE>

Premium") in the case of any redemption of the Bonds by the Company other than
in connection with a Permitted Peaker Buyout (Completion/Loss Event).

         (2) The Redemption Premium with respect to a redemption of the Bonds in
accordance with Section 12.01(1) on a Redemption Date that is on or before June
10, 2003 will be 7.25%. The Redemption Premium with respect to a redemption of
the Bonds in accordance with Section 12.01(1) on a Redemption Date that is on or
after the dates specified below shall be as set forth opposite such dates.

<Table>
<Caption>
                    For Redemption Dates On or After                          Redemption Premium
                    --------------------------------                          ------------------
<S>                                                                           <C>
                            June 11, 2003                                          6.81%
                            June 11, 2004                                          6.38%
                            June 11, 2005                                          5.94%
                            June 11, 2006                                          5.50%
                            June 11, 2007                                          5.06%
                            June 11, 2008                                          4.63%
                            June 11, 2009                                          4.19%
                            June 11, 2010                                          3.75%
                            June 11, 2011                                          3.31%
                            June 11, 2012                                          2.88%
                            June 11, 2013                                          2.44%
                            June 11, 2014                                          2.00%
                            June 11, 2015                                          1.56%
                            June 11, 2016                                          1.13%
                            June 11, 2017                                          0.69%
                            June 11, 2018                                          0.25%
</Table>

SECTION 12.02. Election to Redeem; Notice to Trustee.

         The election of the Company to redeem any Bonds pursuant to Section
12.01 shall be evidenced by a Board Resolution. In case of any such redemption
at the election of the Company of less than 100% of the Remaining Principal
Amount of the Outstanding Bonds, the Company shall, at least 60 days prior to
the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Bonds to be redeemed.

SECTION 12.03. Notice of Redemption.

         Notice of redemption shall be given by the Company by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Bonds to be redeemed, at its address
appearing in the Bonds Register.

         All notices of redemption shall state:

                  (1) the Redemption Date,

                  (2) the Optional Redemption Price,

                                       54
<PAGE>

                  (3) interest accrued to but not including the Redemption Date,

                  (4) if less than 100% of the Bonds are to be redeemed, the
         amount to be redeemed with respect to each Bond,

                  (5) that on the Redemption Date the Optional Redemption Price
         will become due and payable upon each such Bond to be redeemed and that
         interest thereon will cease to accrue on and after said date,

                  (6) the place or places where such Bonds are to be surrendered
         for payment of the Optional Redemption Price; and

                  (7) the CUSIP, ISIN and Common Code numbers of each of the
         Bonds to be redeemed.

         Notice of redemption of Bonds to be redeemed at the election of the
Company shall be given to the Holders by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.

SECTION 12.04. Deposit of Optional Redemption Price.

         Prior to any Redemption Date, the Company shall deposit with the
Trustee or the Paying Agent, as applicable, an amount of money sufficient to pay
the Optional Redemption Price, and interest accrued to but not including the
Redemption Date with respect to the Bonds which are subject to redemption on
that date.

SECTION 12.05. Bonds Payable on Redemption Date.

         Notice of redemption having been given as aforesaid, the Bonds so to be
redeemed shall, on the Redemption Date, become due and payable at the Optional
Redemption Price therein specified, together with interest accrued to but not
including the Redemption Date, and from and after such date (unless the Company
shall default in the payment of the Optional Redemption Price and accrued
interest) all or the portion of the Bonds subject to redemption shall cease to
bear interest. Upon surrender of any such Bond or portion thereof for redemption
in accordance with said notice, such Bond or portion thereof shall be paid by
the Company at the Optional Redemption Price, together with accrued interest to
the Redemption Date; provided, however, that payments of interest whose
applicable Scheduled Payment Date is on or prior to the Redemption Date shall be
payable to the Holders of such Bonds, or one or more Predecessor Bonds,
registered as such at the close of business on the relevant Regular Record Dates
according to their terms.

         If any Bond called for redemption shall not be so paid upon surrender
thereof for redemption, the Remaining Principal Amount thereof shall, until
paid, bear interest from the Redemption Date at the rate borne by the Bond.

SECTION 12.06. Bonds Redeemed in Part.

         Any Bond that is to be redeemed only in part shall be surrendered at an
office or agency of the Company designated for that purpose pursuant to Section
11.02 (with, if the Company or

                                       55
<PAGE>

the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Bond without service charge, a new Bond or Bonds, of any authorized denomination
as requested by such Holder, in aggregate Initial Principal Amount equal to and
in exchange for the Initial Principal Amount of the Bond so surrendered.

                                ARTICLE THIRTEEN

                              TERM AND TERMINATION

         This Indenture and each other Financing Documents shall take effect on
the date hereof and shall remain in effect, without prejudice to Section 12.17
or Section 12.18 of the Common Agreement, until the date that is 366 days after
all of the Obligations shall have been irrevocably performed or satisfied in
full in cash; provided that if NRG Energy shall have issued and provided the
Reinstatement Guaranty, the Company and each Project Company shall be released
from their respective obligations under the Financing Documents, and all
Collateral shall be released from the Lien of the Collateral Documents, at the
time such Reinstatement Guaranty is issued and provided by NRG Energy.

                                ARTICLE FOURTEEN

                    NOTICES BY TRUSTEE AND CALCULATION AGENT

SECTION 14.01. Notices by Trustee to Insurer of Payments on Policy.

         Upon the receipt of the notice by the Trustee from the Depositary Agent
pursuant to Section 4.2.4 of the Depositary Agreement, the Trustee shall deliver
to the Insurer a Payment Notice in the form of Exhibit A to the Policy (a
"Payment Notice"), appropriately completed and executed by the Trustee, before
10:00 a.m., New York City time on the Business Day immediately before the
applicable Scheduled Payment Date. The Trustee shall present such Payment Notice
to the Insurer by (i) delivery of the original Payment Notice to the Insurer at
its address set forth in Section 1.04(c), or (ii) facsimile transmission of the
original Payment Notice to the Insurer at the following facsimile number: (646)
658-5955 (or such other facsimile number that the Insurer may provide to the
Trustee for this purpose by written notice). If presentation is made by
facsimile transmission, the Trustee shall (x) simultaneously confirm
transmission by telephone to the Insurer at the following telephone number:
(646) 658-5900 (or such other telephone number that the Insurer may provide to
the Trustee for this purpose by written notice), and (y) as soon as reasonably
practicable, deliver the original Payment Notice to the Insurer at its address
set forth in Section 1.05(c).

                                       56
<PAGE>

SECTION 14.02. Notice by Calculation Agent to Swap Counterparty of Calculation
        of Three-Month USD-LIBOR-BBA.

         Before 12:00 p.m., New York City time on each USD-LIBOR-BBA
Determination Date, the Calculation Agent shall notify the Swap Counterparty of
its calculation of Three-Month USD-LIBOR-BBA with respect to the Series A Bonds
on such USD-LIBOR-BBA Determination Date by facsimile transmission to the Swap
Counterparty at the following facsimile number: (212) 902-0996. The Trustee
shall simultaneously confirm such facsimile transmission by telephone to the
Swap Counterparty at the following telephone number: (212) 902-1000.

                                ARTICLE FIFTEEN

                               SCOPE OF LIABILITY

         Except as set forth in this Article Fifteen, notwithstanding anything
in this Indenture or the other Financing Documents to the contrary, the Holders
shall have no claims with respect to the transactions contemplated by the
Operative Documents against NRG Energy or any of its Affiliates (other than the
Financing Parties), shareholders, officers, directors or employees
(collectively, the "Nonrecourse Persons"); provided that the foregoing provision
of this Article Fifteen shall not (a) constitute a waiver, release or discharge
of any of the indebtedness, or of any of the terms, covenants, conditions, or
provisions of this Indenture or any other Financing Document and the same shall
continue (but without personal liability to any Nonrecourse Person except as
provided herein and therein) until fully paid, discharged, observed, or
performed, (b) limit or restrict the right of any Holder (or any assignee,
beneficiary or successor to any of them) to name the Company, any Project
Company or any other Person as a defendant in any action or suit for a judicial
foreclosure or for the exercise of any other remedy under or with respect to
this Indenture or any other Financing Document, or for injunction or specific
performance, so long as no judgment in the nature of a deficiency judgment shall
be enforced against any Nonrecourse Person, except as set forth in this Article
Fifteen, (c) limit or restrict any right or remedy of any Holder (or any
assignee or beneficiary thereof or successor thereto) with respect to, and each
of the Nonrecourse Persons shall remain fully liable to the extent that such
Person would otherwise be liable for its own actions with respect to, any fraud
(which shall not include innocent or negligent misrepresentation), willful
misrepresentation, or misappropriation of Project Revenues or any other
earnings, revenues, rents, issues, profits or proceeds from or of the Collateral
that should or would have been paid as provided herein or paid or delivered to
any Holder (or any assignee or beneficiary thereof or successor thereto) towards
any payment required under this Indenture or any other Financing Document, (d)
affect or diminish or constitute a waiver, release or discharge of any specific
written obligation, covenant, or agreement made by any of the Nonrecourse
Persons or any security granted by the Nonrecourse Persons in support of the
obligations of such Persons under any Financing Document or as security for the
obligations of the Company and the Project Companies, and (e) limit the
liability of (i) any Person who is a party to any Project Document and has
issued any certificate or other statement in connection therewith with respect
to such liability as may arise by reason of the terms and conditions of such
Project Document (but subject to any limitation of liability in such Project
Document), certificate or statement, (ii) any Person rendering a legal opinion
pursuant to this Indenture or (iii) NRG

                                       57
<PAGE>

Energy or any Acceptable Assignee under or pursuant to the Contingent Guaranty
Agreement, in each case under this clause (e) relating solely to such liability
of such Person as may arise under such referenced agreement, instrument or
opinion. The limitations on recourse set forth in this Article Fifteen shall
survive the termination of this Indenture and the full payment and performance
of the obligations hereunder and under the other Financing Documents.

                                       58
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.

                                              NRG PEAKER FINANCE COMPANY LLC,
                                              as Issuer

                                              By:
                                                 ------------------------------
                                                 Name:
                                                 Title:

                                              BAYOU COVE PEAKING POWER, LLC,
                                              as Guarantor

                                              By:
                                                 ------------------------------
                                                 Name:
                                                 Title:

                                              BIG CAJUN I PEAKING POWER LLC,
                                              as Guarantor

                                              By:
                                                 ------------------------------
                                                 Name:
                                                 Title:

                                              NRG ROCKFORD LLC,
                                              as Guarantor

                                              By:
                                                 ------------------------------
                                                 Name:
                                                 Title:

                                              NRG ROCKFORD II LLC,
                                              as Guarantor

                                              By:
                                                 ------------------------------
                                                 Name:
                                                 Title:

                                              NRG STERLINGTON POWER LLC,
                                              as Guarantor

                                              By:
                                                 ------------------------------
                                                 Name:
                                                 Title:

                                       59
<PAGE>

                                              XL CAPITAL ASSURANCE INC.,
                                              as Insurer

                                              By:
                                                 ------------------------------
                                                 Name:
                                                 Title:

                                              THE BANK OF NEW YORK,
                                              as Trustee

                                              By:
                                                 ------------------------------
                                                 Name:
                                                 Title:

                                       60
<PAGE>

                                                                     EXHIBIT A-1

                              FORM OF SERIES A BOND

      THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
      STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR THE INVESTMENT
      COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT") AND MAY NOT
      BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) BY THE
      INITIAL INVESTOR, (1) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES
      IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER
      THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
      QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
      RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE
      904 OF REGULATION S UNDER THE SECURITIES ACT, OR (3) PURSUANT TO AN
      EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
      THEREUNDER (IF AVAILABLE), AND (B) BY SUBSEQUENT INVESTORS, AS SET FORTH
      IN (A) ABOVE, AND, IN ADDITION, TO AN INSTITUTIONAL INVESTOR THAT IS AN
      ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501 OF REGULATION D UNDER
      THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
      SECURITIES ACT AND, IN THE CASE OF EACH OF CLAUSES (A) AND (B), (1) IN
      ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
      STATES AND OTHER JURISDICTIONS AND (2) IN A PRINCIPAL AMOUNT OF NOT LESS
      THAN $250,000 FOR THE PURCHASER AND FOR EACH ACCOUNT FOR WHICH IT IS
      ACTING, TO A PURCHASER AND, AS APPLICABLE, EACH ACCOUNT FOR WHICH SUCH
      PURCHASER IS ACTING, THAT (I) IS A QUALIFIED PURCHASER WITHIN THE MEANING
      OF SECTION 3(C)(7) OF THE INVESTMENT COMPANY ACT, (II) WAS NOT FORMED FOR
      THE PURPOSE OF INVESTING IN THE ISSUER (EXCEPT WHEN EACH BENEFICIAL OWNER
      OF THE PURCHASER AND EACH SUCH ACCOUNT IS A QUALIFIED PURCHASER), (III)
      HAS RECEIVED THE NECESSARY CONSENT FROM ITS BENEFICIAL OWNERS WHEN THE
      PURCHASER OR SUCH ACCOUNT IS A PRIVATE INVESTMENT COMPANY FORMED BEFORE
      APRIL 30, 1996, (IV) IS NOT A BROKER-DEALER THAT OWNS AND INVESTS ON A
      DISCRETIONARY BASIS LESS THAN $25,000,000 IN SECURITIES OF UNAFFILIATED
      ISSUERS AND (V) IS NOT a pension, profit sharing or other retirement trust
      fund or plan in which the partners, beneficiaries or participants, as
      applicable, may designate the particular investments to be made, AND IN A
      TRANSACTION THAT MAY BE EFFECTED WITHOUT LOSS OF ANY APPLICABLE INVESTMENT
      COMPANY ACT EXEMPTION. ANY TRANSFER IN VIOLATION OF THE FOREGOING WILL BE
      OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO AND WILL NOT OPERATE TO
      TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS TO
      THE CONTRARY TO THE ISSUER, THE TRUSTEE OR ANY INTERMEDIARY. EACH
      TRANSFEROR OF THIS NOTE WILL PROVIDE NOTICE OF THE TRANSFER RESTRICTIONS
      SET FORTH HEREIN AND IN THE INDENTURE TO ITS TRANSFEREE. IN ADDITION TO
      THE FOREGOING, THE ISSUER MAINTAINS THE RIGHT TO PURCHASE OR FORCE THE
      RESALE OF ANY NOTES PREVIOUSLY TRANSFERRED TO NON-PERMITTED

                                     A-1-1
<PAGE>

      HOLDERS (AS DEFINED IN THE INDENTURE) IN ACCORDANCE WITH AND SUBJECT TO
      THE TERMS OF THE INDENTURE.

      THE BONDS EVIDENCED HEREBY MAY NOT BE OFFERED OR SOLD UNLESS: (1) THE
      TRANSFEREE REPRESENTS THAT IT IS A "QUALIFIED PURCHASER" (AS DEFINED IN
      2(A)(51)(A) UNDER THE INVESTMENT COMPANY ACT, AS AMENDED); (2) THE
      TRANSFEROR REPRESENTS THAT PRIOR TO SUCH TRANSFER, THE TRANSFEROR HAS
      PROVIDED TO THE TRANSFEREE NOTICE OF THE TRANSFER RESTRICTIONS APPLICABLE
      TO THIS SECURITY; (3) BOTH THE TRANSFEROR AND THE TRANSFEREE ACKNOWLEDGE
      THAT THE ISSUER MAY REFUSE TO HONOR THE TRANSFER OF THE SECURITY IF IT
      DETERMINES IN ITS SOLE DISCRETION THAT THE TRANSFEREE IS NOT A QUALIFIED
      PURCHASER; AND (4) THE TRANSFEREE ACKNOWLEDGES THAT THE ISSUER HAS THE
      RIGHT TO FORCE THE REDEMPTION OR RESALE OF THE SECURITY HELD BY THE
      TRANSFEREE IF IT DETERMINES IN ITS SOLE DISCRETION THAT THE TRANSFEREE IS
      NOT A QUALIFIED PURCHASER.

      [INSERT IN THE CASE OF A RESTRICTED GLOBAL BOND: THIS BOND IS A RESTRICTED
      GLOBAL BOND WITHIN THE MEANING OF THE INDENTURE REFERRED TO BELOW AND IS
      REGISTERED IN THE NAME OF A DEPOSITARY OR ITS NOMINEE. THIS BOND MAY NOT
      BE EXCHANGED IN WHOLE OR IN PART FOR A BOND REGISTERED, AND NO TRANSFER OF
      THIS BOND IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON
      OTHER THAN SUCH DEPOSITARY OR ITS NOMINEE, EXCEPT IN THE LIMITED
      CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]

                                     A-1-2
<PAGE>

                         NRG PEAKER FINANCE COMPANY LLC

          SERIES A FLOATING RATE SENIOR SECURED BONDS DUE JUNE 10, 2019

                                 $_____________

[INSERT FOR RESTRICTED GLOBAL BOND:
CUSIP: 62938R AA 5
ISIN: US62938RAA59]

[INSERT FOR REGULATION S CERTIFICATED BOND:
CUSIP: U6696W AA 0
ISIN: USU6696WAA00]

NO. [___]

            NRG Peaker Finance Company LLC, a limited liability company duly
organized and existing under the laws of Delaware (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to
[__________________], or registered assigns, the principal sum of $[___________]
Dollars (or such lesser remaining principal amount as is reflected [in the
attached Schedule of Exchanges of Interests in the Restricted Global Bond][in
the books and records of the Trustee under the Indenture referred to below]), at
the times and in the amounts pursuant to the amortization schedule set forth on
the reverse hereof, and to pay interest thereon from and including June 18, 2002
to but excluding the first Scheduled Payment Date (as defined below), and for
each successive period (each, an "Interest Period") from and including the last
day of the preceding Interest Period to but excluding the following such
Scheduled Payment Date, subject to certain exceptions set forth in the Indenture
at a rate per annum equal to Three-Month USD-LIBOR-BBA per annum plus 1.07%,
until the principal hereof is paid or made available for payment.

            The interest so payable, and punctually paid or duly provided for,
on any Scheduled Payment Date will, as provided in such Indenture, be paid to
the Person in whose name this Bond (or one or more Predecessor Bonds) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the February 23 (or February 24 in the case of a leap
year), May 26, August 26 or November 25 (whether or not a Business Day), as the
case may be, next preceding such Scheduled Payment Date. The Scheduled Payment
Dates shall be March 10, June 10, September 10 and December 10, commencing
September 10, 2002.

            If this Bond is issued in the form of a Global Bond, payments of the
principal of and interest on this Bond shall be made in immediately available
funds to the Depositary. If this Bond is issued as a Regulation S Certificated
Bond or a Restricted Certificated Bond, payment of the principal of and interest
on this Bond will be made at the Corporate Trust Office of the Trustee in The
City of New York, New York, maintained for such purpose, and at any other office
or agency maintained by the Company for such purpose, in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of
the Company payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Bonds Register.
The "Stated Maturity" of this Bond will be June 10, 2019. Installments of
principal of this Bond will be due and payable, in accordance with the Indenture
referred to on the reverse hereof, in the manner described on the reverse
hereof.

                                     A-1-3
<PAGE>

            This Bond is one of a duly authorized issue of Bonds of the Company,
issued under an Indenture, dated as of June 18, 2002 (herein, as supplemented or
amended from time to time, called the "Indenture", which term shall have the
meaning assigned to it in such instrument), among the Company, the Guarantors,
XL Capital Assurance Inc. (the "Insurer") and The Bank of New York (herein
called the "Trustee" which term includes any successor trustee under the
Indenture) designated as its Series A Floating Rate Senior Secured Bonds due
June 10, 2019 (herein called the "Series A Bonds"), in an initial aggregate
Initial Principal Amount of $325,000,000. The Company has also authorized the
issuance from time to time under the Indenture of additional series of floating
rate and fixed rate senior secured bonds as provided in the Indenture
(collectively, the "Additional Bonds" and together with the Series A Bonds, the
"Bonds").

            Reference is hereby made to the Indenture and the Common Agreement
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Insurer, the Trustee and the Holders of the Bonds
of each series. This Bond is subject to the provisions of the Indenture and the
Common Agreement. To the extent any provision of this Bond conflicts with the
express provisions of the Indenture or the Common Agreement, the provisions of
the Indenture and the Common Agreement shall govern and be controlling.

            Scheduled payments of principal and interest on the Bonds are
guaranteed by the Insurer under the Financial Guaranty Insurance Policy No.
CA00261A, dated as of June 18, 2002, issued for the benefit of the Trustee on
behalf of the Holders of the Bonds (the "Insurance Policy").

            The Company's obligations owed to the Secured Parties (as defined in
the Common Agreement), including the Holders of the Bonds of each series, are
secured by the lien created pursuant to the Issuer Collateral Documents (as
defined in the Common Agreement) for the equal and ratable benefit of such
Secured Parties on the Issuer Collateral (as defined in the Common Agreement).

            Each of the Guarantors unconditionally and irrevocably guaranties
the obligations and indebtedness of the Company in respect of the Guaranteed
Obligations, including, without limitation, the payment of principal of and
interest on the Bonds of each series when due and payable, which Guaranties
(included in the Common Agreement and incorporated by reference in the
Indenture) are secured by the lien created pursuant to the Project Company
Collateral Documents (as defined in the Common Agreement) for the equal and
ratable benefit of such Secured Parties on all the Project Company Collateral
(as defined in the Common Agreement).

            As set forth in Section 1.04(4) of the Indenture, so long as no
Insurer Default has occurred and is continuing, the Insurer shall be entitled to
exercise all rights and remedies with respect to the Bonds under the Indenture,
including the right to vote on all matters presented to the Holders, the
exercise of remedies and the waiver of breaches and defaults, except for (1) the
rights of each of the Holders of the Bonds to approve any changes in the
material terms of the Bonds as specified in Section 10.02(2) of the Indenture
and (2) if an Insurer Default occurs and is continuing, all rights and remedies
available to a specific series of Bonds shall be exercised directly by the
Holders of such series of Bonds, and all rights and remedies available to
Holders as a group under the Indenture shall be exercised by the Holders, acting
as a group.

            In the absence of any change in law occurring after the Issue Date
that would render the treatment contemplated in this Section 3.13 inconsistent
with the law, regulation, or any interpretation thereof, based upon
representations from each Holder and beneficial owner of the

                                     A-1-4
<PAGE>

Bonds, as of the Issue Date and for so long as the Company has no reason to know
and an Authorized Officer of the Trustee or any Paying Agent has not received
actual notice that such representations by Holders and beneficial owners of at
least 75% of the aggregate principal amount of the Bonds are false or
unreliable, the Company, the Trustee and any Paying Agent agree to treat the
Bonds for all United States federal tax purposes as investment securities and
not as an extension of credit pursuant to a loan agreement; provided, however,
that the Company, the Trustee and any Paying Agent shall not be obligated under
this covenant with respect to any Bonds held by a Holder or beneficial owner
with respect to which the Company has reason to know or an Authorized Officer of
the Trustee or any Paying Agent has received actual notice that such
representations made by such Holder or beneficial owner, as the case may be, as
of the Issue Date are false or unreliable.

            By accepting a Bond or a beneficial interest therein, each Holder
and beneficial owner agrees to the treatment described in the preceding
paragraph and covenants to take no action inconsistent with such treatment
unless otherwise notified by the Company.

            Reference is hereby made to the further provisions of this Bond set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place. Capitalized terms used and
not otherwise defined herein are defined in the Indenture.

            Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Bond
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

                                     A-1-5
<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.

                                               NRG PEAKER FINANCE COMPANY LLC

                                               By:
                                                   -----------------------------

                  This is one of the Bonds of the series designated therein
referred to in the within-mentioned Indenture.

Dated:
                                                           THE BANK OF NEW YORK,
                                                                      as Trustee

                                                         By:
                                                             -------------------
                                                            Authorized Signatory

                                     A-1-6
<PAGE>

                                Reverse of Bond.

            The interest on this Bond shall be payable quarterly in arrears
(including interest on any interest that is not paid when due), at a rate per
annum equal to Three-Month USD-LIBOR-BBA (as defined below and in the Indenture)
plus 1.07%. The interest shall be calculated on the basis of a 360-day year and
the actual number of days elapsed.

            "Three-Month USD-LIBOR-BBA" means, for each Interest Period, the
rate for deposits in U.S. dollars for a period of three months, commencing on
the first day of such Interest Period and in an amount that is representative
for a single transaction in that market, at that time, that appears on Telerate
Page 3750 as of 11:00 a.m., London time, on the USD-LIBOR-BBA Determination Date
with respect to such Interest Period. If such rate does not appear on the
Telerate Page 3750, then Three-Month USD-LIBOR-BBA for the relevant Interest
Period will be determined on the basis of the rates at which deposits in U.S.
dollars are offered by the Reference Banks at approximately 11:00 a.m., London
time, on the USD-LIBOR-BBA Determination Date with respect to such Interest
Period to prime banks in the London interbank market for a period of three
months commencing on the first day of such Interest Period and in an amount that
is representative for a single transaction in that market at that time, assuming
an actual/360 day count basis. The Calculation Agent shall request the principal
London office of each of the Reference Banks to provide a quotation of its rate.
If at least two such quotations are provided, the rate for that Interest Period
will be the arithmetic mean of the quotations. If fewer than two quotations are
provided as requested, the rate for that Interest Period will be the arithmetic
mean of the rates quoted by major banks in New York City, selected by the
Calculation Agent, at approximately 11:00 a.m., New York City time, on the first
day of such Interest Period for loans in U.S. dollars to leading European banks
for a period of three months commencing on the first day of such Interest Period
and in an amount that is representative for a single transaction in that market
at that time. If the Calculation Agent is unable to obtain rate quotations for
such loans, the rate for that USD-LIBOR-BBA Determination Date shall be
Three-Month USD-LIBOR-BBA as calculated for the immediately preceding quarterly
period. Notwithstanding the foregoing, "Three-Month USD-LIBOR-BBA" with respect
to t he first Interest Period will be 1.87938%.

            Three-Month USD-LIBOR-BBA will be determined by The Bank of New
York, as Calculation Agent, or any successor calculation agent as determined by
the Company.

            The Company shall repay the principal amount of the Series A Bonds
in annual installments, commencing on December 10, 2002 and continuing until the
Stated Maturity. The aggregate amount of principal of the Series A Bonds to be
repaid in each year shall be as follows:

<Table>
<Caption>
      Date                                                Principal Amount ($)
      ----                                                --------------------
<S>                                                       <C>
December 10, 2002                                                5,638,000
December 10, 2003                                                7,989,000
December 10, 2004                                               10,497,000
December 10, 2005                                                4,312,000
December 10, 2006                                                6,768,000
December 10, 2007                                               11,164,000
December 10, 2008                                               12,903,000
December 10, 2009                                               14,758,000
December 10, 2010                                               19,889,000
December 10, 2011                                               21,232,000
</Table>

                                     A-1-7
<PAGE>

<Table>
<Caption>
      Date                                                Principal Amount ($)
      ----                                                --------------------
<S>                                                       <C>
December 10, 2012                                               21,680,000
December 10, 2013                                               23,143,000
December 10, 2014                                               28,840,000
December 10, 2015                                               30,787,000
December 10, 2016                                               32,865,000
December 10, 2017                                               35,083,000
December 10, 2018                                               18,726,000
June 10, 2019                                                   18,702,600
</Table>

            Each annual scheduled repayment of principal will be made on
December 10 of the relevant year (except that the final repayment of principal
will be made on June 10, 2019), together with the payment of interest due on
that date, to the person whose name this Bond is registered on the Regular
Record Date before the payment date. The final annual scheduled repayment of
principal will be made only against surrender of the Bond to the Trustee.

            The Bonds are subject to redemption, at any time and from time to
time, as a whole or in part, at the election of the Company, at the Optional
Redemption Price (as defined below), payable in cash. The redemption price for
the Series A Bonds (the "Optional Redemption Price"), payable in cash, shall
equal 100% of the outstanding principal amount of such Bonds, plus accrued and
unpaid interest on the Bonds to the applicable Redemption Date. The Optional
Redemption Price shall also include the applicable redemption premium described
below (the "Redemption Premium") in the case of any redemption other than a
redemption of the Bonds by the Company of the Bonds by the Company in connection
with a Permitted Peaker Buyout (Completion/Loss Event).

            The Redemption Premium with respect to a redemption of the Bonds on
a Redemption Date that is on or before June 10, 2003 will be 7.25%. The
Redemption Premium with respect to a redemption of the Bonds on a Redemption
Date that is on or after the dates specified below shall be as set forth
opposite such dates.

<Table>
<Caption>
           For Redemption Dates On or After              Redemption Premium
           --------------------------------              ------------------
<S>                                                      <C>
                      June 11, 2003                              6.81%
                      June 11, 2004                              6.38%
                      June 11, 2005                              5.94%
                      June 11, 2006                              5.50%
                      June 11, 2007                              5.06%
                      June 11, 2008                              4.63%
                      June 11, 2009                              4.19%
                      June 11, 2010                              3.75%
                      June 11, 2011                              3.31%
                      June 11, 2012                              2.88%
                      June 11, 2013                              2.44%
                      June 11, 2014                              2.00%
                      June 11, 2015                              1.56%
                      June 11, 2016                              1.13%
                      June 11, 2017                              0.69%
                      June 11, 2018                              0.25%
</Table>

                                     A-1-8
<PAGE>

            Payment of the Optional Redemption Price shall include interest
accrued to but not including the Redemption Date, but interest installments for
a Scheduled Payment Date prior to such Redemption Date will be payable to the
Holders of such series of Bonds, or one or more Predecessor Bonds, of record at
the close of business on the relevant Regular Record Dates referred to on the
face hereof, all as provided in the Indenture.

            In the event of a partial redemption, the amount to be redeemed will
be allocated pro rata as determined by the then outstanding principal amount
among all the Outstanding Bonds at the Redemption Date. The amount to be
redeemed that is allocated to the Series A Bonds will be further allocated pro
rata as determined by the then outstanding principal amount among all of the
Outstanding Series A Bonds.

            In all cases of redemption, the redemption price with respect to
each Bond to be redeemed will not be less than 100% of the outstanding principal
amount of such Bond at the time of redemption.

            In the event of redemption of this Series A Bond in part only, a new
Series A Bond or Bonds for the Initial Principal Amount will be issued in the
name of the Holder hereof upon the cancellation hereof, notwithstanding that the
Remaining Principal Amount of such Bond or Bonds may be less than such Initial
Principal Amount.

            The Indenture permits the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders of the
Bonds under the Indenture at any time by the Company and the Trustee, with the
consent of the Insurer, in its sole discretion (so long as no Insurer Default
has occurred and is continuing). For certain material changes to the terms of
the Bonds, as specified in Section 10.02(2) of the Indenture, the consent of
each affected Holder is required. For changes to the terms of the Bonds other
than those specified in Sections 10.01 or 10.02(2) of the Indenture, the consent
of a majority of the affected Holders is required if an Insurer Default has
occurred and is continuing.

            The Indenture also contains provisions permitting the Holders of not
less than 60% in Remaining Principal Amount of the Outstanding Bonds, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences (it being understood
that, so long as no Insurer Default has occurred and is continuing, the Insurer
shall have the exclusive right under the Indenture to exercise the rights of the
Holders in determining whether and how to exercise any such vote).

            Any such consent or waiver shall be conclusive and binding upon such
Holder and upon all future Holders of this Bond and of any Bond issued upon the
registration or transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Bond.

            No reference herein to the Indenture and no provision of this Bond
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, and the Optional
Redemption Price, if any, and interest on this Bond at the times, place and
rate, and in the coin and currency, as prescribed in the Indenture.

            As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Bond is registrable in the Bonds
Register, upon surrender of this Bond for registration of transfer at the office
or agency of the Company in any place where the principal of

                                     A-1-9
<PAGE>

and interest on this Bond are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the Bonds
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Bonds, of authorized denominations and
for the same aggregate Initial Principal Amount, will be issued to the
designated transferee or transferees.

            The Bonds are issuable only in registered form without coupons in
Initial Principal Amounts of denominations of $250,000 and any integral
multiples of $1,000 in excess thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Bonds are exchangeable for a like
aggregate Initial Principal Amount of Bonds of a different authorized
denomination, as requested by the Holder surrendering the same.

            No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

            Prior to due presentment of this Bond for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Bond is registered as the owner hereof for all
purposes, whether or not this Bond be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

                                     A-1-10
<PAGE>

                [INSERT IN THE CASE OF A RESTRICTED GLOBAL BOND]

                       Schedule of Exchanges of Interests
                          in the Restricted Global Bond

            The following exchanges of a part of this Restricted Global Bond for
an interest in another Restricted Global Bond or for a Restricted Certificated
Bond or a Regulation S Global Bond, or exchanges of a part of a Restricted
Certificated Bond or a Regulation S Global Bond for an interest in this
Restricted Global Bond, have been made:

<Table>
<Caption>

                                                                           Principal Amount of this
                      Amount of decrease          Amount of increase         Restricted Global Bond
                          in Principal                in Principal               following such               Signature of
                         Amount of this              Amount of this                 decrease               authorized officer
Date of Exchange     Restricted Global Bond      Restricted Global Bond           (or increase)                of Trustee
----------------     ----------------------      ----------------------    ------------------------        ------------------
<S>                  <C>                         <C>                       <C>                             <C>

</Table>

                                     A-1-11
<PAGE>

                                                                     EXHIBIT A-2

                FORM OF ADDITIONAL FIXED RATE SENIOR SECURED BOND

      THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
      STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR THE INVESTMENT
      COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT") AND MAY NOT
      BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) BY THE
      INITIAL INVESTOR, (1) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES
      IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER
      THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
      QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
      RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE
      904 OF REGULATION S UNDER THE SECURITIES ACT, OR (3) PURSUANT TO AN
      EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
      THEREUNDER (IF AVAILABLE), AND (B) BY SUBSEQUENT INVESTORS, AS SET FORTH
      IN (A) ABOVE, AND, IN ADDITION, TO AN INSTITUTIONAL INVESTOR THAT IS AN
      ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501 OF REGULATION D UNDER
      THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
      SECURITIES ACT AND, IN THE CASE OF EACH OF CLAUSES (A) AND (B), (1) IN
      ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
      STATES AND OTHER JURISDICTIONS AND (2) IN A PRINCIPAL AMOUNT OF NOT LESS
      THAN $250,000 FOR THE PURCHASER AND FOR EACH ACCOUNT FOR WHICH IT IS
      ACTING, TO A PURCHASER AND, AS APPLICABLE, EACH ACCOUNT FOR WHICH SUCH
      PURCHASER IS ACTING, THAT (I) IS A QUALIFIED PURCHASER WITHIN THE MEANING
      OF SECTION 3(C)(7) OF THE INVESTMENT COMPANY ACT, (II) WAS NOT FORMED FOR
      THE PURPOSE OF INVESTING IN THE ISSUER (EXCEPT WHEN EACH BENEFICIAL OWNER
      OF THE PURCHASER AND EACH SUCH ACCOUNT IS A QUALIFIED PURCHASER), (III)
      HAS RECEIVED THE NECESSARY CONSENT FROM ITS BENEFICIAL OWNERS WHEN THE
      PURCHASER OR SUCH ACCOUNT IS A PRIVATE INVESTMENT COMPANY FORMED BEFORE
      APRIL 30, 1996, (IV) IS NOT A BROKER-DEALER THAT OWNS AND INVESTS ON A
      DISCRETIONARY BASIS LESS THAN $25,000,000 IN SECURITIES OF UNAFFILIATED
      ISSUERS AND (V) IS NOT a pension, profit sharing or other retirement trust
      fund or plan in which the partners, beneficiaries or participants, as
      applicable, may designate the particular investments to be made, AND IN A
      TRANSACTION THAT MAY BE EFFECTED WITHOUT LOSS OF ANY APPLICABLE INVESTMENT
      COMPANY ACT EXEMPTION. ANY TRANSFER IN VIOLATION OF THE FOREGOING WILL BE
      OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO AND WILL NOT OPERATE TO
      TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS TO
      THE CONTRARY TO THE ISSUER, THE TRUSTEE OR ANY INTERMEDIARY. EACH
      TRANSFEROR OF THIS NOTE WILL PROVIDE NOTICE OF THE TRANSFER RESTRICTIONS
      SET FORTH HEREIN AND IN THE INDENTURE TO ITS TRANSFEREE. IN ADDITION TO
      THE FOREGOING, THE ISSUER MAINTAINS THE RIGHT TO PURCHASE OR FORCE THE
      RESALE OF ANY NOTES PREVIOUSLY TRANSFERRED TO NON-PERMITTED

                                     A-2-1
<PAGE>

      HOLDERS (AS DEFINED IN THE INDENTURE) IN ACCORDANCE WITH AND SUBJECT TO
      THE TERMS OF THE INDENTURE.

      THE BONDS EVIDENCED HEREBY MAY NOT BE OFFERED OR SOLD UNLESS: (1) THE
      TRANSFEREE REPRESENTS THAT IT IS A "QUALIFIED PURCHASER" (AS DEFINED IN
      2(A)(51)(A) UNDER THE INVESTMENT COMPANY ACT, AS AMENDED); (2) THE
      TRANSFEROR REPRESENTS THAT PRIOR TO SUCH TRANSFER, THE TRANSFEROR HAS
      PROVIDED TO THE TRANSFEREE NOTICE OF THE TRANSFER RESTRICTIONS APPLICABLE
      TO THIS SECURITY; (3) BOTH THE TRANSFEROR AND THE TRANSFEREE ACKNOWLEDGE
      THAT THE ISSUER MAY REFUSE TO HONOR THE TRANSFER OF THE SECURITY IF IT
      DETERMINES IN ITS SOLE DISCRETION THAT THE TRANSFEREE IS NOT A QUALIFIED
      PURCHASER; AND (4) THE TRANSFEREE ACKNOWLEDGES THAT THE ISSUER HAS THE
      RIGHT TO FORCE THE REDEMPTION OR RESALE OF THE SECURITY HELD BY THE
      TRANSFEREE IF IT DETERMINES IN ITS SOLE DISCRETION THAT THE TRANSFEREE IS
      NOT A QUALIFIED PURCHASER.

      [INSERT IN THE CASE OF A RESTRICTED GLOBAL BOND: THIS BOND IS A RESTRICTED
      GLOBAL BOND WITHIN THE MEANING OF THE INDENTURE REFERRED TO BELOW AND IS
      REGISTERED IN THE NAME OF A DEPOSITARY OR ITS NOMINEE. THIS BOND MAY NOT
      BE EXCHANGED IN WHOLE OR IN PART FOR A BOND REGISTERED, AND NO TRANSFER OF
      THIS BOND IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON
      OTHER THAN SUCH DEPOSITARY OR ITS NOMINEE, EXCEPT IN THE LIMITED
      CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]

                                     A-2-2
<PAGE>

                         NRG PEAKER FINANCE COMPANY LLC

              [__]% SERIES [__] SENIOR SECURED BONDS DUE [________]

                                   $[________]

CUSIP:
ISIN:

NO. [___]

            NRG Peaker Finance Company LLC, a limited liability company duly
organized and existing under the laws of Delaware (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to
[__________________], or registered assigns, the principal sum of $
[______________] Dollars (or such lesser remaining principal amount as is
reflected [in the attached Schedule of Exchanges of Interests in the Restricted
Global Bond][in the books and records of the Trustee under the Indenture
referred to below]), at the times and in the amounts pursuant to the
amortization schedule set forth on the reverse hereof, and to pay interest
thereon from and including [___________ ] to but excluding the first Scheduled
Payment Date (as defined below), and for each successive period (each, an
"Interest Period") from and including the last day of the preceding Interest
Period to but excluding the following such Scheduled Payment Date, subject to
certain exceptions set forth in the Indenture at the rate of [__]% per annum,
until the principal hereof is paid or made available for payment. The interest
so payable, and punctually paid or duly provided for, on any Scheduled Payment
Date will, as provided in such Indenture, be paid to the Person in whose name
this Bond (or one or more Predecessor Bonds) is registered at the close of
business on the Regular Record Date for such interest, which shall be the
[_______ ] and [_______ ] (whether or not a Business Day), as the case may be,
next preceding such Scheduled Payment Date. The Scheduled Payment Dates shall be
[_________] and [_________], commencing [___________].

            If this Bond is issued in the form of a Global Bond, payments of the
principal of and interest on this Bond shall be made in immediately available
funds to the Depositary. If this Bond is issued as a Regulation S Certificated
Bond or a Restricted Certificated Bond, payment of the principal of and interest
on this Bond will be made at the Corporate Trust Office of the Trustee in The
City of New York, New York, maintained for such purpose, and at any other office
or agency maintained by the Company for such purpose, in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of
the Company payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Bonds Register.

            The "Stated Maturity" of this Bond will be [ ____]. Installments of
principal of this Bond will be due and payable, in accordance with the Indenture
referred to on the reverse hereof, in the manner described on the reverse
hereof.

            This Bond is one of a duly authorized issue of additional bonds of
the Company, issued under an Indenture, dated as of June 18, 2002, as
supplemented by the [First] Supplemental Indenture dated as of [_______________]
(herein, as supplemented or amended from time to time, called the "Indenture",
which term shall have the meaning assigned to it in such

                                     A-2-3
<PAGE>

instrument), among the Company, the Guarantors, XL Capital Assurance Inc. (the
"Insurer") and The Bank of New York (herein called the "Trustee" which term
includes any successor trustee under the Indenture) designated as its [__]%
Fixed Rate Senior Secured Bonds due [_______], limited in aggregate Initial
Principal Amount to $[__________] (herein called the "[__]% Fixed Rate Bonds").
On June 18, 2002, the Company issued under the Indenture its Series A Floating
Rate Senior Secured Bonds due 2019 (the "Series A Bonds"), and the Company has
also authorized the issuance from time to time under the Indenture of additional
series of floating rate and fixed rate senior secured bonds as provided in the
Indenture (collectively, the "Additional Bonds" and together with the [__]%
Fixed Rate Bonds and the Series A Bonds, the "Bonds").

            Reference is hereby made to the Indenture and the Common Agreement
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Insurer, the Trustee and the Holders of the Bonds
of each series. This Bond is subject to the provisions of the Indenture and the
Common Agreement. To the extent any provision of this Bond conflicts with the
express provisions of the Indenture or the Common Agreement, the provisions of
the Indenture and the Common Agreement shall govern and be controlling.

            Scheduled payments of principal and interest on the Bonds are
guaranteed by the Insurer under the Financial Guaranty Insurance Policy No.
CA00261A, dated as of June 18, 2002, issued for the benefit of the Trustee on
behalf of the Holders of the Bonds (the "Insurance Policy").

            The Company's obligations owed to the Secured Parties (as defined in
the Common Agreement), including the Holders of the Bonds of each series, are
secured by the lien created pursuant to the Issuer Collateral Documents (as
defined in the Common Agreement) for the equal and ratable benefit of such
Secured Parties on the Issuer Collateral (as defined in the Common Agreement).

            Each of the Guarantors unconditionally and irrevocably guaranties
the obligations and indebtedness of the Company in respect of the Guaranteed
Obligations, including, without limitation, the payment of principal of and
interest on the Bonds of each series when due and payable, which Guaranties
(included in the Common Agreement and incorporated by reference in the
Indenture) are secured by the lien created pursuant to the Project Company
Collateral Documents (as defined in the Common Agreement) for the equal and
ratable benefit of such Secured Parties on all the Project Company Collateral
(as defined in the Common Agreement).

            As set forth in Section 1.04(4) of the Indenture, so long as no
Insurer Default has occurred and is continuing, the Insurer shall be entitled to
exercise all rights and remedies with respect to the Bonds under the Indenture,
including the right to vote on all matters presented to the Holders, the
exercise of remedies and the waiver of breaches and defaults, except for (1) the
rights of each of the Holders of the Bonds to approve any changes in the
material terms of the Bonds as specified in Section 10.02(2) of the Indenture
and (2) if an Insurer Default occurs and is continuing, all rights and remedies
available to a specific series of Bonds shall be exercised directly by the
Holders of such series of Bonds, and all rights and remedies available to
Holders as a group under the Indenture shall be exercised by the Holders, acting
as a group.

            In the absence of any change in law occurring after the Issue Date
that would render the treatment contemplated in this Section 3.13 inconsistent
with the law, regulation, or any interpretation thereof, based upon
representations from each Holder and beneficial owner of the Bonds, as of the
Issue Date and for so long as the Company has no reason to know and an
Authorized Officer of the Trustee or any Paying Agent has not received actual
notice that such

                                     A-2-4
<PAGE>

representations by Holders and beneficial owners of at least 75% of the
aggregate principal amount of the Bonds are false or unreliable, the Company,
the Trustee and any Paying Agent agree to treat the Bonds for all United States
federal tax purposes as investment securities and not as an extension of credit
pursuant to a loan agreement; provided, however, that the Company, the Trustee
and any Paying Agent shall not be obligated under this covenant with respect to
any Bonds held by a Holder or beneficial owner with respect to which the Company
has reason to know or an Authorized Officer of the Trustee or any Paying Agent
has received actual notice that such representations made by such Holder or
beneficial owner, as the case may be, as of the Issue Date are false or
unreliable.

            By accepting a Bond or a beneficial interest therein, each Holder
and beneficial owner agrees to the treatment described in the preceding
paragraph and covenants to take no action inconsistent with such treatment
unless otherwise notified by the Company.

            Reference is hereby made to the further provisions of this Bond set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place. Capitalized terms used and
not otherwise defined herein are defined in the Indenture.

            Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Bond
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

                                     A-2-5
<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.

                                                 NRG PEAKER FINANCE COMPANY LLC

                                                 By:
                                                     ---------------------------

                  This is one of the Bonds of the series designated therein
referred to in the within-mentioned Indenture.

Dated:
                                                           THE BANK OF NEW YORK,
                                                                      as Trustee

                                                         By:
                                                            --------------------
                                                            Authorized Signatory

                                     A-2-6
<PAGE>

                                Reverse of Bond.

            The interest on this Bond shall be payable semi-annually in arrears
(including interest on any interest that is not paid when due), at a fixed rate
of [__]% per annum. The interest shall be calculated on the basis of a 360-day
year and 30-day month. Interest will be paid on an unadjusted basis, with
semi-annual payments calculated on the basis of 180 days per semi-annual period
and 30-day months.

            The Company shall repay the principal amount of the [__]% Fixed Rate
Bonds in annual installments, commencing on [_______] and continuing until the
Stated Maturity. The aggregate amount of principal of the [__]% Fixed Rate Bonds
to be repaid in each year shall be as follows:

<Table>
<Caption>
               Year          Principal Amount             Year                Principal Amount
               ----          ----------------             ----                ----------------
<S>                          <C>                          <C>                 <C>
                             $                                                $

</Table>

            Each annual scheduled repayment of principal will be made on
[________] of the relevant year, together with the payment of interest due on
that date, to the person whose name this Bond is registered on the Regular
Record Date before the payment date. The final annual scheduled repayment of
principal will be made only against surrender of the Bond to the Trustee.

            The Bonds are subject to redemption, at any time and from time to
time, as a whole or in part, at the election of the Company, at the [__]% Fixed
Rate Redemption Price (as defined below), payable in cash. The redemption price
for the [__]% Fixed Rate Bonds, payable in cash, shall equal the sum of present
values of the Scheduled Payments of principal and interest remaining outstanding
at the Redemption Date until maturity, plus the interest accrued to but not
including the applicable Redemption Date (the "[__]% Fixed Rate Redemption
Price"). Payment of the [__]% Fixed Rate Redemption Price shall include interest
accrued to but not including the Redemption Date, but interest installments for
a Scheduled Payment Date prior to such Redemption Date will be payable to the
Holders of such series of Bonds, or one or more Predecessor Bonds, of record at
the close of business on the relevant Regular Record Dates referred to on the
face hereof, all as provided in the Indenture.

            The present value shall be calculated by the Calculation Agent by
discounting the remaining principal and interest payments to maturity on a
semi-annual basis assuming a 365-day year and an actual day count. The discount
rate used to determine the [__]% Fixed Rate Redemption Price shall be equal to
the Treasury Yield (as defined below), plus [__]%.

            "Treasury Yield" means the yield on treasury securities at a
constant maturity corresponding to the remaining average life (as of the
Redemption Date, rounded to the nearest month) to the stated maturity of the
principal being redeemed. For purposes of this definition, the Treasury Yield
shall be equal to the arithmetic mean of the yields published in the Statistical

                                     A-2-7
<PAGE>

Release (as defined below) under the heading "Week Ending" for "U.S. Government
Securities-Treasury Constant Maturities" with a maturity equal to such remaining
life; provided, that if no published maturity exactly corresponds with such
remaining life, then the Treasury Yield shall be interpolated or extrapolated on
a straight-line basis from the arithmetic means of the yields for the next
shortest and next longest published maturities. For the purposes of calculation
of the Treasury Yield, the most recent Statistical Release published prior to
the Redemption Date shall be used. If the format or the content of the
Statistical Release changes in a manner that precludes determination of the
Treasury Yield in the above manner, then the Treasury Yield shall be determined
in a manner that most closely approximates the above manner, as reasonably
determined by the Calculation Agent.

            "Statistical Release" means the statistical release designated
"H.15(519)" or any successor publication which is published weekly by the Board
of Governors of the Federal Reserve System and which reports yields on actively
traded United States government securities adjusted to constant maturities, or,
if such statistical release is not published at the time of any determination,
then such other reasonably comparable statistical release which shall be
designated by the Calculation Agent.]

            In the event of a partial redemption, the amount to be redeemed will
be allocated pro rata as determined by the then outstanding principal amount
among all the Outstanding Bonds at the Redemption Date. The amount to be
redeemed that is allocated to the [__]% Fixed Rate Bonds will be further
allocated pro rata as determined by the then outstanding principal amount among
all of the Outstanding [__]% Fixed Rate Bonds.

            In all cases of redemption, the redemption price with respect to
each Bond to be redeemed will not be less than 100% of the outstanding principal
amount of such Bond at the time of redemption.

            In the event of redemption of this [__]% Fixed Rate Bond in part
only, a new [__]% Fixed Rate Bond or Bonds for the Initial Principal Amount will
be issued in the name of the Holder hereof upon the cancellation hereof,
notwithstanding that the Remaining Principal Amount of such Bond or Bonds may be
less than such Initial Principal Amount.

            The Indenture permits the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders of the
Bonds under the Indenture at any time by the Company and the Trustee, with the
consent of the Insurer, in its sole discretion (so long as no Insurer Default
has occurred and is continuing). For certain material changes to the terms of
the Bonds, as specified in Section 10.02(2) of the Indenture, the consent of
each affected Holder is required. For changes to the terms of the Bonds other
than those specified in Sections 10.01 or 10.02(2) of the Indenture, the consent
of a majority of the affected Holders is required if an Insurer Default has
occurred and is continuing.

            The Indenture also contains provisions permitting the Holders of not
less than 60% in Remaining Principal Amount of the Outstanding Bonds, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences (it being understood
that, so long as no Insurer Default has occurred and is continuing, the Insurer
shall have the exclusive right under the Indenture to exercise the rights of the
Holders in determining whether and how to exercise any such vote).

                                     A-2-8
<PAGE>

            Any such consent or waiver shall be conclusive and binding upon such
Holder and upon all future Holders of this Bond and of any Bond issued upon the
registration or transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Bond.

            No reference herein to the Indenture and no provision of this Bond
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, and the [__]% Fixed Rate
Redemption Price, if any, and interest on this Bond at the times, place and
rate, and in the coin and currency, as prescribed in the Indenture.

            As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Bond is registrable in the Bonds
Register, upon surrender of this Bond for registration of transfer at the office
or agency of the Company in any place where the principal of and interest on
this Bond are payable, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Bonds Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Bonds, of authorized denominations and for the same
aggregate Initial Principal Amount, will be issued to the designated transferee
or transferees.

            The Bonds are issuable only in registered form without coupons in
Initial Principal Amounts of denominations of $250,000 and any integral
multiples of $1,000 in excess thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Bonds are exchangeable for a like
aggregate Initial Principal Amount of Bonds of a different authorized
denomination, as requested by the Holder surrendering the same.

            No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

            Prior to due presentment of this Bond for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Bond is registered as the owner hereof for all
purposes, whether or not this Bond be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

                                     A-2-9
<PAGE>

                [INSERT IN THE CASE OF A RESTRICTED GLOBAL BOND]

                       Schedule of Exchanges of Interests
                          in the Restricted Global Bond

            The following exchanges of a part of this Restricted Global Bond for
an interest in another Restricted Global Bond or for a Restricted Certificated
Bond or a Regulation S Global Bond, or exchanges of a part of a Restricted
Certificated Bond or a Regulation S Global Bond for an interest in this
Restricted Global Bond, have been made:

<Table>
<Caption>
                                                                       Principal Amount of this
                         Amount of decrease      Amount of increase     Restricted Global Bond
                            in Principal            in Principal           following such               Signature of
                           Amount of this          Amount of this              decrease              authorized officer
  Date of Exchange     Restricted Global Bond  Restricted Global Bond        (or increase)               of Trustee
-------------------    ----------------------  ----------------------  ------------------------      ------------------
<S>                    <C>                     <C>                     <C>                           <C>

</Table>

                                     A-2-10
<PAGE>

                                                                       EXHIBIT B

            FORM OF TRANSFER CERTIFICATE FOR RESTRICTED GLOBAL BOND,
         REGULATION S CERTIFICATED BOND OR RESTRICTED CERTIFICATED BOND
          (FOR TRANSFERS PURSUANT TO SECTION 3.06(1) OF THE INDENTURE)

The Bank of New York,
        as Trustee
101 Barclay Street
New York, NY 10286
Attention: Corporate Trust Administration

           Re:    [Insert as applicable: Series A Floating Rate Senior
                  Secured Bonds due June 10, 2019] of NRG Peaker Finance
                  Company LLC (the "Bonds")

                  Reference is made to the Indenture, dated as of June 18, 2002
(the "Indenture"), among NRG Peaker Finance Company LLC (the "Company"), XL
Capital Assurance Inc., as insurer, Bayou Cove Peaking Power, LLC, Big Cajun I
Peaking Power LLC, NRG Rockford LLC, NRG Rockford II LLC and NRG Sterlington
Power LLC, as guarantors, and The Bank of New York as Trustee (the "Trustee").
Capitalized terms used herein and defined in the Indenture or in Regulation S or
Rule 144A under the U.S. Securities Act of 1933, as amended (the "Securities
Act") are used herein as so defined.

                  This certificate relates to U.S.$__________ initial principal
amount of Bonds presented or surrendered on the date hereof (the "Surrendered
Bonds") which are registered in the name of [insert name of transferor] (the
"Transferor"). The Transferor has requested a transfer of such Surrendered Bonds
registered in the name of a Person (the "Transferee") other than the Transferor.

                  In connection with such request and in respect of such
Surrendered Bonds, the Transferor does hereby certify that:

            A.    It is an initial investor who purchased the Bonds from the
                  initial purchasers pursuant to, the Purchase Agreement, dated
                  June 14, 2002, among the Company, the Guarantors and the
                  initial purchaser named therein and that the Surrendered Bonds
                  are being transferred:

                  1.    To a person who the Transferor reasonably believes is a
                        qualified purchaser within the meaning of Section
                        2(a)(51)(A) of the Investment Company Act of 1940, as
                        amended; AND

                  2.    (a) To a person who the Transferor reasonably believes
                        is a qualified institutional buyer within the meaning of
                        Rule 144A under the Securities Act purchasing for its
                        own account or for the account of a qualified
                        institutional buyer in a transaction meeting the
                        requirements of Rule 144A;

                        (b) In an offshore transaction complying with Rule 903
                        or Rule 904 of Regulation S under the Securities Act; OR

                                       B-1
<PAGE>

                        (c) Pursuant to an exemption from registration under the
                        Securities Act provided by Rule 144 thereunder.

OR

            B.    If the Transferor is a subsequent investor, that the
                  Surrendered Bonds are being transferred:

                  1.    To a person who the Transferor reasonably believes is a
                        qualified purchaser within the meaning of Section
                        2(a)(51)(A) of the Investment Company Act of 1940, as
                        amended; AND

                  2.    (a) To a person who the Transferor reasonably believes
                        is a qualified institutional buyer within the meaning of
                        Rule 144A under the Securities Act purchasing for its
                        own account or for the account of a qualified
                        institutional buyer in a transaction meeting the
                        requirements of Rule 144A;

                        (b) In an offshore transaction complying with Rule 903
                        or Rule 904 of Regulation S under the Securities Act;

                        (c) Pursuant to an exemption from registration under the
                        Securities Act provided by Rule 144 thereunder; OR

                        (d) To an institutional investor that is an accredited
                        investor within the meaning of Rule 501 of Regulation D
                        under the Securities Act pursuant to an exemption from
                        registration under the Securities Act.

            The Transferor understands that this certificate is required in
connection with certain securities laws of the United States. In connection
therewith, if administrative or legal proceedings are commenced or threatened in
connection with which this certificate is or would be relevant, the Transferor
irrevocably authorizes you to produce this certificate to any interested party
in such proceeding.

            This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and Goldman Sachs International as
the initial purchaser of the Bonds.

Dated:

                                         --------------------------------
                                         (Print the name of the Transferor, as
                                         such term is defined in the second
                                         paragraph of this certificate.)

                                         By:
                                             -----------------------------------
                                         Name:
                                         Title:
                                         (If the Transferor is a corporation,
                                         partnership or fiduciary, the title of
                                         the person signing on behalf of the
                                         Transferor must be stated.

                                      B-2
<PAGE>

                                                                     EXHIBIT C-1

                     FORM OF CERTIFICATE FOR TRANSFERS FROM
             [RESTRICTED GLOBAL BOND][RESTRICTED CERTIFICATED BOND]
                        TO REGULATION S CERTIFICATED BOND

              (FOR TRANSFERS PURSUANT TO SECTION 3.07(2)[(B)][(D)]
                                OF THE INDENTURE)

The Bank of New York,
        as Trustee
101 Barclay Street
New York, NY 10286
Attention:  Corporate Trust Administration

            Re:   [Insert as applicable: Series A Floating Rate Senior Secured
                  Bonds due , 2019] of NRG Peaker Finance Company LLC (the
                  "Bonds")

                  Reference is made to the Indenture, dated as of June 18, 2002
(the "Indenture"), among NRG Peaker Finance Company LLC (the "Company"), XL
Capital Assurance Inc., as insurer, Bayou Cove Peaking Power, LLC, Big Cajun I
Peaking Power LLC, NRG Rockford LLC, NRG Rockford II LLC, and NRG Sterlington
Power LLC, as guarantors, and The Bank of New York, as Trustee (the "Trustee").
Capitalized terms used herein and defined in the Indenture or in Regulation S or
Rule 144 under the U.S. Securities Act of 1933, as amended (the "Securities
Act") are used herein as so defined.

                  This certificate relates to U.S.$_____________ aggregate
initial principal amount of Bonds which are [evidenced by the Restricted Global
Bond (CUSIP No. _________; ISIN __________) and held with the Depositary] [held
in the definitive form of a Restricted Certificated Bond (CUSIP No. _________;
ISIN __________) and registered] in the name of [insert name of transferor] (the
"Transferor"). The Transferor has requested a transfer of such [beneficial
interest in the Bonds][Bonds] to a Person who will take delivery thereof in the
form of an equal aggregate initial principal amount of Bonds held in the
definitive form of a Regulation S Certificated Bond (CUSIP No. __________; ISIN
____________).

                  In connection with such request and in respect of such Bonds,
the Transferor does hereby certify that:

            (a)   with respect to transfers made in reliance on Regulation S
                  under the Securities Act:

                  (i)   the offer of the Bonds was not made to a person in the
                        United States;

                  (ii)  either:

                        1)    at the time the buy order was originated, the
                              transferee was outside the United States or the
                              Transferor and any person acting on its behalf
                              reasonably believed that the transferee was
                              outside the United States, or

                                     C-1-1
<PAGE>

                        2)    the transaction was executed in, on or through the
                              facilities of a designated offshore securities
                              market and neither the Transferor nor any person
                              acting on its behalf knows that the transaction
                              was prearranged with a buyer in the United States;

                  (iii) no directed selling efforts have been made in
                        contravention of the requirements of Rule 903(b) or
                        904(b) of Regulation S, as applicable; and

                  (iv)  the transaction is not part of a plan or scheme to evade
                        the registration requirements of the Securities Act; OR

            (b)   with respect to transfers made in reliance on Rule 144 under
                  the Securities Act, the Bonds are being transferred in a
                  transaction permitted by Rule 144 under the Securities Act.

            The Transferor also certifies that such transfer is being made to a
person who the Transferor reasonably believes is also a qualified purchaser
within the meaning of Section 2(a)(51)(A) of the Investment Company Act of 1940,
as amended.

                  We understand that this certificate is required in connection
with certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding.

                  This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Goldman Sachs International
as the initial purchaser of the Bonds.

Dated:

                                         ---------------------------------------
                                         (Print the name of the Transferor, as
                                         such term is defined in the second
                                         paragraph of this certificate.)

                                         By:
                                             -----------------------------------
                                         Name:
                                         Title:
                                         (If the Transferor is a corporation,
                                         partnership or fiduciary, the title of
                                         the person signing on behalf of the
                                         Transferor must be stated.)

                                     C-1-2
<PAGE>

                                                                     EXHIBIT C-2

                     FORM OF CERTIFICATE FOR TRANSFERS FROM
           [RESTRICTED GLOBAL BOND][REGULATION S CERTIFICATED BOND] TO
                          RESTRICTED CERTIFICATED BOND

              (FOR TRANSFERS PURSUANT TO SECTION 3.07(2)[(B)][(D)]
                                OF THE INDENTURE)

The Bank of New York,
        as Trustee
101 Barclay Street
New York, NY 10286
Attention:  Corporate Trust Administration

            Re:   [Insert as applicable: Series A Floating Rate Senior Secured
                  Bonds due , 2019] of NRG Peaker Finance Company LLC (the
                  "Bonds")

                  Reference is made to the Indenture, dated as of June 18, 2002
(the "Indenture"), among NRG Peaker Finance Company LLC (the "Company"), XL
Capital Assurance Inc., as insurer, Bayou Cove Peaking Power, LLC, Big Cajun I
Peaking Power LLC, NRG Rockford LLC, NRG Rockford II LLC, and NRG Sterlington
Power LLC, as guarantors, and The Bank of New York, as Trustee (the "Trustee").
Capitalized terms used herein and defined in the Indenture or in Regulation S or
Rule 144 under the U.S. Securities Act of 1933, as amended (the "Securities
Act") are used herein as so defined.

                  This certificate relates to U.S.$_____________ aggregate
initial principal amount of Bonds which are [evidenced by the Restricted Global
Bond (CUSIP No. _________; ISIN __________) and held with the Depositary][held
in the definitive form of a Regulation S Certificated Bond (CUSIP No. _________;
ISIN __________) and registered] in the name of [insert name of transferor] (the
"Transferor"). The Transferor has requested a transfer of such [beneficial
interest in the Bonds][Bond] to a Person who will take delivery thereof in the
form of an equal aggregate initial principal amount of Bonds held in the
definitive form of a Restricted Certificated Bond (CUSIP No. __________; ISIN
__________).

                  In connection with such request and in respect of such Bonds,
the Transferor does hereby certify that the Bonds are being transferred to an
institutional investor that is an accredited investor within the meaning of Rule
501 of Regulation D under the Securities Act pursuant to an exemption from
registration under the Securities Act.

      The Transferor also certifies that such transfer is being made to a person
who the Transferor reasonably believes is also a qualified purchaser within the
meaning of Section 2(a)(51)(A) of the Investment Company Act of 1940, as
amended.

                  We understand that this certificate is required in connection
with certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding.

                                     C-2-1
<PAGE>

                  This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Goldman Sachs International
as the initial purchaser of the Bonds.

Dated:

                                         ---------------------------------------
                                         (Print the name of the Transferor, as
                                         such term is defined in the second
                                         paragraph of this certificate.)

                                         By:
                                             -----------------------------------
                                         Name:
                                         Title:
                                         (If the Transferor is a corporation,
                                         partnership or fiduciary, the title of
                                         the person signing on behalf of the
                                         Transferor must be stated.)

                                     C-2-2
<PAGE>

                                                                     EXHIBIT C-3

                     FORM OF CERTIFICATE FOR TRANSFERS FROM
         [REGULATION S CERTIFICATED BOND][RESTRICTED CERTIFICATED BOND]
                            TO RESTRICTED GLOBAL BOND

         (FOR TRANSFERS PURSUANT TO SECTION 3.07(2)(C) OF THE INDENTURE)

The Bank of New York,
        as Trustee
101 Barclay Street
New York, NY 10286
Attention: Corporate Trust Administration

            Re:   [Insert as applicable: Series A Floating Rate Senior Secured
                  Bonds due , 2019] of NRG Peaker Finance Company LLC (the
                  "Bonds")

                  Reference is made to the Indenture, dated as of June 18, 2002
(the "Indenture"), among NRG Peaker Finance Company LLC (the "Company"), XL
Capital Assurance Inc., as insurer, Bayou Cove Peaking Power, LLC, Big Cajun I
Peaking Power LLC, NRG Rockford LLC, NRG Rockford II LLC, and NRG Sterlington
Power LLC, as guarantors, and The Bank of New York, as Trustee (the "Trustee").
Capitalized terms used herein and defined in the Indenture or in Regulation S or
Rule 144 under the U.S. Securities Act of 1933, as amended (the "Securities
Act") are used herein as so defined.

                  This certificate relates to $_____________ aggregate initial
principal amount of Bonds held in the definitive form of a [Restricted
Certificated Bond (CUSIP No. _______; ISIN __________)][Regulation S
Certificated Bond (CUSIP No. _______; ISIN __________] by [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
Bonds to a Person that will take delivery in the form of an equal initial
principal amount of Bonds evidenced by the Restricted Global Bond (CUSIP No.
___________; ISIN __________).

                  In connection with such request and in respect of such Bonds,
the Transferor does hereby certify that such transfer has been effected pursuant
to and in accordance with Rule 144A under the Securities Act and accordingly the
Transferor does hereby further certify that the Bonds are being transferred to a
person that the Transferor reasonably believes is purchasing the Bonds for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A and the Bonds
have been transferred in a transaction meeting the requirements of Rule 144A and
in accordance with any applicable securities laws of any state of the United
States.

                  The Transferor also certifies that such transfer is being made
to a person who the Transferor reasonably believes is also a qualified purchaser
within the meaning of Section 2(a)(51)(A) of the Investment Company Act of 1940,
as amended.

                  We understand that this certificate is required in connection
with certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding.

                                     C-3-1
<PAGE>

                  This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Goldman Sachs International
as the initial purchaser of the Bonds.

Dated:

                                         ---------------------------------------
                                         (Print the name of the Transferor, as
                                         such term is defined in the second
                                         paragraph of this certificate.)

                                         By:
                                             -----------------------------------
                                         Name:
                                         Title:

                                         (If the Transferor is a corporation,
                                         partnership or fiduciary, the title of
                                         the person signing on behalf of the
                                         Transferor must be stated.)

                                     C-3-2
<PAGE>

                                                                     EXHIBIT D-1

                            INVESTOR CERTIFICATE FOR
                       FOR REGULATION S CERTIFICATED BONDS

NRG Peaker Finance Company LLC
901 Marquette Avenue
Suite 2800
Minneapolis, MN 55402-3265
Attention:  General Counsel

The Bank of New York,
     as Trustee
101 Barclay Street
New York, NY 10286
Attention:  Corporate Trust Administration

         Re:      [Insert as applicable: Series A Floating Rate Senior Secured
                  Bonds due 2019] of NRG Peaker Finance Company LLC (the
                  "Bonds")

                  Reference is made to the Indenture, dated as of June 18, 2002
(the "Indenture"), among NRG Peaker Finance Company, LLC (the "Issuer"), XL
Capital Assurance Inc., as insurer, Bayou Cove Peaking Power, LLC, Big Cajun I
Peaking Power LLC, NRG Rockford LLC, NRG Rockford II LLC, and NRG Sterlington
Power LLC, as guarantors and The Bank of New York, as Trustee (the "Trustee").
Capitalized terms used herein and defined in the Indenture.

                  The undersigned, in connection with its purchase of the Bonds
identified below, hereby represents and warrants as of the date hereof as
follows:

         1. The undersigned is not, and each account on behalf of which it is
acquiring the Bonds is not a "U.S. person" as defined in Regulation S under the
Securities Act of 1933, as amended (the "Securities Act"), and is acquiring the
Bonds in reliance on the exemption from registration provided by Regulation S
thereunder.

         2. It understands that the Bonds have not been registered under the
Securities Act and may not be offered, resold, pledged or otherwise transferred
except (a)(i) by an initial investor, (A) to a person who its reasonably
believes is a qualified institutional buyer acquiring for its own account or the
account of a qualified institutional buyer in a transaction meeting the
requirements of Rule 144A, (B) in an offshore transaction complying with Rule
903 or Rule 904 of Regulation S, or (C) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 thereunder (if
available), (ii) by a subsequent investor, as set forth in (i) above and, in
addition, to an institutional investor that is an accredited investor within the
meaning of Rule 501 of Regulation D under the Securities Act pursuant to an
exemption from registration under the Securities Act (if available) or (iii)
pursuant to an effective registration statement under the Securities Act, (b) to
a person who is a qualified purchaser for purposes of Section 3(c)(7) of the
Investment Company Act of 1940, as amended (the "Investment Company Act"), and
(c) in accordance with all applicable securities laws of the states of the
United States and other jurisdictions. It also understands that the Issuer has
not been registered under the Investment Company Act. It understands and agrees
that any purported transfer of the Bonds to a purchaser that does not comply
with the requirements set forth in this Investor Certificate will be null and
void ab initio. It agrees, in connection with any subsequent transfer of the
Bonds it is

                                     D-1-1
<PAGE>

acquiring, to cause the proposed transferee to execute and deliver to the
Trustee an Investor Certificate substantially in the form hereof.

         3. The undersigned is, and each account on behalf of which it is
acquiring the Bonds is also a "qualified purchaser" for purposes of Section
3(c)(7) of the Investment Company Act.

         4. It is acquiring the Bonds in an initial principal amount of not less
than $250,000 for the purchaser and for each such account.

         5. It is (or if it is acquiring the Bonds for another account, each
such account is) acquiring the Bonds as principal for its own account for
investment and not for sale in connection with any distribution thereof.

         6. The undersigned and each such account: (i) were not formed for the
specific purpose of investing in the Bonds (except when each beneficial owner of
the undersigned and each such account is a qualified purchaser for purposes of
Section 3(c)(7) of the Investment Company Act), (ii) to the extent the
undersigned or such account is a private investment company formed before April
30, 1996, the undersigned or such account has received the necessary consent
from the undersigned's or such account's beneficial owners, (iii) are not a
pension, profit sharing or other retirement trust fund or plan in which the
partners, beneficiaries or participants, as applicable, may designate the
particular investments to be made and (iv) are not a broker-dealer that owns and
invests on a discretionary basis less than $25,000,000 in securities of
unaffiliated issuers.

         7. Further, each of the undersigned and each such account agrees: (i)
that the undersigned or such account shall not hold the Bonds for the benefit of
any other person and shall be the sole beneficial owner thereof for all
purposes; (ii) that the undersigned or it shall not sell participation interests
in the Bonds or enter into any other arrangement pursuant to which any other
person shall be entitled to a beneficial interest in distributions on the Bonds;
(iii) that the Bonds purchased directly or indirectly by it constitute an
investment of no more than 40% of the undersigned's and each such account's
assets (except when each beneficial owner of the undersigned and each such
account is a qualified purchaser for purposes of Section 3(c)(7) of the
Investment Company Act), (iv) to purchase the Bonds in a principal amount of not
less than $250,000 for the holder and each such account and (v) that the
undersigned or it will provide notice to subsequent transferees of the relevant
transfer restrictions described in this Investor Certificate.

         8. In connection with the transfer to it of the Bonds: (i) none of the
Issuer or any of its affiliates is acting as a fiduciary or financial or
investment adviser for it; (ii) it is not relying on any written or oral advice,
counsel or representations of the Issuer other than in the final offering
circular dated June 14, 2002 relating to the offering of the Bonds (the
"Offering Circular"); (iii) it has consulted with its own legal, regulatory,
tax, business, investment, financial, and accounting advisers to the extent it
has deemed necessary, and has made its own investment decisions based upon its
own judgment and upon any advice from such advisers as it has deemed necessary
and not upon any view expressed by the Issuer or any of its affiliates; and (iv)
it is a sophisticated investor and is acquiring the Bonds with a full
understanding of all of the terms, conditions and risks thereof, and it is
capable of assuming and willing to assume those risks.

                                     D-1-2
<PAGE>

         9. It is not a "U.S. person" as defined in Section 7701(a)(30) of the
Internal Revenue Service Code of 1986, as amended; it will provide the Trustee
with a properly completed Form W-8 since it is not a "U.S. person"; and it
represents that it is not acquiring the Bonds as part of a plan to reduce, avoid
or evade U.S. federal income taxes owed, owing, or potentially owed or owing.

         10. If the undersigned is a bank or a branch of a bank, it represents
that it is purchasing the Bonds for investment purposes, and not in the ordinary
course of its lending business.

         11. It understands that the Issuer, the Trustee and their respective
counsel will rely upon the accuracy and truth of the foregoing representations,
and it hereby consents to such reliance.

Dated: [___________]                        Very truly yours,

                                                   By:
                                                       -------------------------
                                                       Name:
                                                       Title:

Purchase of an aggregate principal amount of
[Series A Floating Rate] Senior Secured Bonds: US$
                                                   ------------------------

                      REGISTRATION AND PAYMENT INSTRUCTIONS

Name in which Bonds should be registered:
                                          ---------------------------
Address and Contact Person
for notices:
                                                ----------------------

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

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

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

Telephone number:
                                                ----------------------
Telecopier number:
                                                ----------------------
Instructions for delivery of Bonds:
                                                ----------------------

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

                                                ----------------------
Wire transfer information for payments:
Bank:
      -----------------------
Address:
        -----------------------
Bank ABA#:
           -----------------
Account #:
           -------------------
FAO:
     -----------------------
Attention:
           -------------------

                                     D-1-3
<PAGE>

                                                                     EXHIBIT D-2

                            INVESTOR CERTIFICATE FOR
                        FOR RESTRICTED CERTIFICATED BONDS

NRG Peaker Finance Company LLC

901 Marquette Avenue
Suite 2800
Minneapolis, MN 55402-3265
Attention:  General Counsel

The Bank of New York,
     as Trustee
101 Barclay Street
New York, NY 10286
Attention:  Corporate Trust Administration

         Re:      [Insert as applicable: Series A Floating Rate Senior Secured
                  Bonds due 2019] of NRG Peaker Finance Company LLC (the
                  "Bonds")

                  Reference is made to the Indenture, dated as of June 18, 2002
(the "Indenture"), among NRG Peaker Finance Company, LLC (the "Issuer"), XL
Capital Assurance Inc., as insurer, Bayou Cove Peaking Power, LLC, Big Cajun I
Peaking Power LLC, NRG Rockford LLC, NRG Rockford II LLC, and NRG Sterlington
Power LLC, as guarantors and The Bank of New York, as Trustee (the "Trustee").
Capitalized terms used herein and defined in the Indenture.

                  The undersigned, in connection with its purchase of the Bonds
identified below, hereby represents and warrants as of the date hereof as
follows:

         1. The undersigned is, and each account on behalf of which it is
acquiring the Bonds is also an institutional investor that is an accredited
investor within the meaning of Rule 501 of Regulation D under the Securities Act
of 1933, as amended (the "Securities Act"), and is acquiring the Bonds pursuant
to an exemption from registration under the Securities Act.

         2. It understands that the Bonds have not been registered under the
Securities Act and may not be offered, resold, pledged or otherwise transferred
except (a)(i) by an initial investor, (A) to a person who its reasonably
believes is a qualified institutional buyer acquiring for its own account or the
account of a qualified institutional buyer in a transaction meeting the
requirements of Rule 144A, (B) in an offshore transaction complying with Rule
903 or Rule 904 of Regulation S, or (C) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 thereunder (if
available), (ii) by a subsequent investor, as set forth in (i) above and, in
addition, to an institutional investor that is an accredited investor within the
meaning of Rule 501 of Regulation D under the Securities Act pursuant to an
exemption from registration under the Securities Act (if available) or (iii)
pursuant to an effective registration statement under the Securities Act, (b) to
a person who is a qualified purchaser for purposes of Section 3(c)(7) of the
Investment Company Act of 1940, as amended (the "Investment Company Act"), and
(c) in accordance with all applicable securities laws of the states of the
United States and other jurisdictions. It also understands that the Issuer has
not been registered under the Investment Company Act. It understands and agrees
that any purported transfer of the Bonds to a

                                     D-2-1
<PAGE>

purchaser that does not comply with the requirements set forth in this Investor
Certificate will be null and void ab initio. It agrees, in connection with any
subsequent transfer of the Bonds it is acquiring, to cause the proposed
transferee to execute and deliver to the Trustee an Investor Certificate
substantially in the form hereof.

         3. The undersigned is, and each account on behalf of which it is
acquiring the Bonds is also a "qualified purchaser" for purposes of Section
3(c)(7) of the Investment Company Act.

         4. It is acquiring the Bonds in an initial principal amount of not less
than $250,000 for the purchaser and for each such account.

         5. It is (or if it is acquiring the Bonds for another account, each
such account is) acquiring the Bonds as principal for its own account for
investment and not for sale in connection with any distribution thereof.

         6. The undersigned and each such account: (i) were not formed for the
specific purpose of investing in the Bonds (except when each beneficial owner of
the undersigned and each such account is a qualified purchaser for purposes of
Section 3(c)(7) of the Investment Company Act), (ii) to the extent the
undersigned or such account is a private investment company formed before April
30, 1996, the undersigned or such account has received the necessary consent
from the undersigned's or such account's beneficial owners, (iii) are not a
pension, profit sharing or other retirement trust fund or plan in which the
partners, beneficiaries or participants, as applicable, may designate the
particular investments to be made and (iv) are not a broker-dealer that owns and
invests on a discretionary basis less than $25,000,000 in securities of
unaffiliated issuers.

         7. Further, each of the undersigned and each such account agrees: (i)
that the undersigned or such account shall not hold the Bonds for the benefit of
any other person and shall be the sole beneficial owner thereof for all
purposes; (ii) that the undersigned or it shall not sell participation interests
in the Bonds or enter into any other arrangement pursuant to which any other
person shall be entitled to a beneficial interest in distributions on the Bonds;
(iii) that the Bonds purchased directly or indirectly by it constitute an
investment of no more than 40% of the undersigned's and each such account's
assets (except when each beneficial owner of the undersigned and each such
account is a qualified purchaser for purposes of Section 3(c)(7) of the
Investment Company Act), (iv) to purchase the Bonds in a principal amount of not
less than $250,000 for the holder and each such account and (v) that the
undersigned or it will provide notice to subsequent transferees of the relevant
transfer restrictions described in this Investor Certificate.

         8. In connection with the transfer to it of the Bonds: (i) none of the
Issuer or any of its affiliates is acting as a fiduciary or financial or
investment adviser for it; (ii) it is not relying on any written or oral advice,
counsel or representations of the Issuer other than in the final offering
circular dated June 14, 2002 relating to the offering of the Bonds (the
"Offering Circular"); (iii) it has consulted with its own legal, regulatory,
tax, business, investment, financial, and accounting advisers to the extent it
has deemed necessary, and has made its own investment decisions based upon its
own judgment and upon any advice from such advisers as it has deemed necessary
and not upon any view expressed by the Issuer or any of its affiliates; and (iv)
it is a sophisticated investor and is acquiring the Bonds with a full
understanding of all of the terms, conditions and risks thereof, and it is
capable of assuming and willing to assume those risks.

                                      D-2-2
<PAGE>

         9. It will provide the Trustee with a properly completed Form W-9 if it
is a "U.S. person" for purposes of Section 7701(a)(30) of the Internal Revenue
Service Code of 1986, as amended (the "Code") that is not exempt from such
requirement, and a properly completed Form W-8 if it is not a "U.S. person".

         10. If it is not a "U.S. person" as defined in Section 7701(a)(30) of
the Code, it represents that it is not acquiring the Bonds as part of a plan to
reduce, avoid or evade U.S. federal income taxes owed, owing, or potentially
owed or owing.

         11. If the undersigned is a bank or a branch of a bank, it represents
that it is purchasing the Bonds for investment purposes, and not in the ordinary
course of its lending business.

         12. It understands that the Issuer, the Trustee and their respective
counsel will rely upon the accuracy and truth of the foregoing representations,
and it hereby consents to such reliance.

Dated: [___________]                            Very truly yours,

                                                       By:
                                                          ----------------------
                                                          Name:
                                                          Title:

Purchase of an aggregate principal amount of
[Series A Floating Rate] Senior Secured Bonds: US$
                                                   -----------------------

                      REGISTRATION AND PAYMENT INSTRUCTIONS

Name in which Bonds should be registered:
                                          ---------------------------

Address and Contact Person
for notices:
                                                ----------------------

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

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

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

Telephone number:
                                                ----------------------
Telecopier number:
                                                ----------------------
Instructions for delivery of Bonds:
                                                ----------------------

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

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

                                     D-2-3
<PAGE>

Wire transfer information for payments:
Bank:
      -----------------------
Address:
        -----------------------
Bank ABA#:
           -----------------
Account #:
           -------------------
FAO:
     -----------------------
Attention:
           -------------------

                                      D-2-4
<PAGE>

                                                                     EXHIBIT D-3

                            INVESTOR CERTIFICATE FOR
                           FOR RESTRICTED GLOBAL BONDS

NRG Peaker Finance Company LLC

901 Marquette Avenue
Suite 2800
Minneapolis, MN 55402-3265
Attention:  General Counsel

The Bank of New York,
     as Trustee
101 Barclay Street
New York, NY 10286
Attention:  Corporate Trust Administration

        Re:       [Insert as applicable: Series A Floating Rate Senior Secured
                  Bonds due 2019] of NRG Peaker Finance Company LLC (the
                  "Bonds")

                  Reference is made to the Indenture, dated as of June 18, 2002
(the "Indenture"), among NRG Peaker Finance Company, LLC (the "Issuer"), XL
Capital Assurance Inc., as insurer, Bayou Cove Peaking Power, LLC, Big Cajun I
Peaking Power LLC, NRG Rockford LLC, NRG Rockford II LLC, and NRG Sterlington
Power LLC, as guarantors and The Bank of New York, as Trustee (the "Trustee").
Capitalized terms used herein and defined in the Indenture.

                  The undersigned, in connection with its purchase of the Bonds
identified below, hereby represents and warrants as of the date hereof as
follows:

         1. The undersigned is, and each account on behalf of which it is
acquiring the Bonds is also a "qualified institutional buyer" as defined in Rule
144A under the Securities Act of 1933, as amended (the "Securities Act"), and is
acquiring the Bonds in reliance on the exemption from Securities Act
registration provided by Rule 144A thereunder.

         2. It understands that the Bonds have not been registered under the
Securities Act and may not be offered, resold, pledged or otherwise transferred
except (a)(i) by an initial investor, (A) to a person who its reasonably
believes is a qualified institutional buyer acquiring for its own account or the
account of a qualified institutional buyer in a transaction meeting the
requirements of Rule 144A, (B) in an offshore transaction complying with Rule
903 or Rule 904 of Regulation S, or (C) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 thereunder (if
available), (ii) by a subsequent investor, as set forth in (i) above and, in
addition, to an institutional investor that is an accredited investor within the
meaning of Rule 501 of Regulation D under the Securities Act pursuant to an
exemption from registration under the Securities Act (if available) or (iii)
pursuant to an effective registration statement under the Securities Act, (b) to
a person who is a qualified purchaser for purposes of Section 3(c)(7) of the
Investment Company Act of 1940, as amended (the "Investment Company Act"), and
(c) in accordance with all applicable securities laws of the states of the
United States and other jurisdictions. It also understands that the Issuer has
not been registered under the Investment Company Act. It understands and agrees
that any purported transfer of the Bonds to a

                                      D-3-1
<PAGE>

purchaser that does not comply with the requirements set forth in this Investor
Certificate will be null and void ab initio. It agrees, in connection with any
subsequent transfer of the Bonds it is acquiring, to cause the proposed
transferee to execute and deliver to the Trustee an Investor Certificate
substantially in the form hereof.

         3. The undersigned is, and each account on behalf of which it is
acquiring the Bonds is also a "qualified purchaser" for purposes of Section
3(c)(7) of the Investment Company Act.

         4. It is acquiring the Bonds in an initial principal amount of not less
than $250,000 for the purchaser and for each such account.

         5. It is (or if it is acquiring the Bonds for another account, each
such account is) acquiring the Bonds as principal for its own account for
investment and not for sale in connection with any distribution thereof.

         6. The undersigned and each such account: (i) were not formed for the
specific purpose of investing in the Bonds (except when each beneficial owner of
the undersigned and each such account is a qualified purchaser for purposes of
Section 3(c)(7) of the Investment Company Act), (ii) to the extent the
undersigned or such account is a private investment company formed before April
30, 1996, the undersigned or such account has received the necessary consent
from the undersigned's or such account's beneficial owners, (iii) are not a
pension, profit sharing or other retirement trust fund or plan in which the
partners, beneficiaries or participants, as applicable, may designate the
particular investments to be made and (iv) are not a broker-dealer that owns and
invests on a discretionary basis less than $25,000,000 in securities of
unaffiliated issuers.

         7. Further, each of the undersigned and each such account agrees: (i)
that the undersigned or such account shall not hold the Bonds for the benefit of
any other person and shall be the sole beneficial owner thereof for all
purposes; (ii) that the undersigned or it shall not sell participation interests
in the Bonds or enter into any other arrangement pursuant to which any other
person shall be entitled to a beneficial interest in distributions on the Bonds;
(iii) that the Bonds purchased directly or indirectly by it constitute an
investment of no more than 40% of the undersigned's and each such account's
assets (except when each beneficial owner of the undersigned and each such
account is a qualified purchaser for purposes of Section 3(c)(7) of the
Investment Company Act), (iv) to purchase the Bonds in a principal amount of not
less than $250,000 for the holder and each such account and (v) that the
undersigned or it will provide notice to subsequent transferees of the relevant
transfer restrictions described in this Investor Certificate.

         8. In connection with the transfer to it of the Bonds: (i) none of the
Issuer or any of its affiliates is acting as a fiduciary or financial or
investment adviser for it; (ii) it is not relying on any written or oral advice,
counsel or representations of the Issuer other than in the final offering
circular dated June 14, 2002 relating to the offering of the Bonds (the
"Offering Circular"); (iii) it has consulted with its own legal, regulatory,
tax, business, investment, financial, and accounting advisers to the extent it
has deemed necessary, and has made its own investment decisions based upon its
own judgment and upon any advice from such advisers as it has deemed necessary
and not upon any view expressed by the Issuer or any of its affiliates; and (iv)
it is a sophisticated investor and is acquiring the Bonds with a full
understanding of all of the terms, conditions and risks thereof, and it is
capable of assuming and willing to assume those risks.

                                      D-3-2
<PAGE>

         9. It will provide the Trustee with a properly completed Form W-9 if it
is a "U.S. person" for purposes of Section 7701(a)(30) of the Internal Revenue
Service Code of 1986, as amended (the "Code") that is not exempt from such
requirement, and a properly completed Form W-8 if it is not a "U.S. person".

         10. If it is not a "U.S. person" as defined in Section 7701(a)(30) of
the Code, it represents that it is not acquiring the Bonds as part of a plan to
reduce, avoid or evade U.S. federal income taxes owed, owing, or potentially
owed or owing.

         11. If the undersigned is a bank or a branch of a bank, it represents
that it is purchasing the Bonds for investment purposes, and not in the ordinary
course of its lending business.

         12. It understands that the Issuer, the Trustee and their respective
counsel will rely upon the accuracy and truth of the foregoing representations,
and it hereby consents to such reliance.

Dated: [___________]                       Very truly yours,

                                                 By:
                                                    ----------------------------
                                                    Name:
                                                    Title:

Purchase of an aggregate principal amount of
[Series A Floating Rate] Senior Secured Bonds: US$
                                                   -----------------------------

                      REGISTRATION AND PAYMENT INSTRUCTIONS

Name in which Bonds should be registered:
                                          ---------------------------

Address and Contact Person
for notices:
                                                ----------------------

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

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

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

Telephone number:
                                                ----------------------
Telecopier number:
                                                ----------------------
Instructions for delivery of Bonds:
                                                ----------------------

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

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

                                     D-3-3
<PAGE>

Wire transfer information for payments:
Bank:
      -----------------------
Address:
        -----------------------
Bank ABA#:
           -----------------
Account #:
           -------------------
FAO:
     -----------------------
Attention:
           -------------------

                                     D-3-4
<PAGE>

                                                                       EXHIBIT E

                         NRG PEAKER FINANCE COMPANY LLC,

                                   as Issuer,

                         BAYOU COVE PEAKING POWER, LLC,
                         BIG CAJUN I PEAKING POWER LLC,
                     NRG ROCKFORD LLC, NRG ROCKFORD II LLC,
                         AND NRG STERLINGTON POWER LLC,

                                 as Guarantors,

                            XL CAPITAL ASSURANCE INC.

                                   as Insurer,

                                       TO

                              THE BANK OF NEW YORK,

                                   as Trustee

                                   ----------

                         [FIRST] SUPPLEMENTAL INDENTURE

                                   ----------

                         Dated as of [________ __, ____]

                                  $[_________]
         "Series [__] [Floating Rate] [Fixed Rate] Senior Secured Bonds"

                                      E-1
<PAGE>

                                                                       EXHIBIT E

                  [FIRST] SUPPLEMENTAL INDENTURE, dated as of [_____], 20[__]
among NRG Peaker Finance Company LLC, a limited liability company duly organized
and existing under the laws of the State of Delaware (herein called the
"Company"), having its principal office at 901 Marquette Avenue, Suite 2300,
Minneapolis, MN 55402-3265, Bayou Cove Peaking Power, LLC, Big Cajun I Peaking
Power LLC and NRG Sterlington Power LLC, each a Delaware limited liability
company and NRG Rockford LLC and NRG Rockford II LLC, each an Illinois limited
liability company (herein collectively called the "Guarantors" or the "Project
Companies"), XL Capital Assurance Inc., an insurance company incorporated under
the laws of the State of New York (herein called the "Insurer") and The Bank of
New York, as Trustee (herein called the "Trustee"). Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them in the
Indenture.

                                   WITNESSETH:

                  WHEREAS, the Company has heretofore entered into an Indenture,
dated as of June [__], 2002 (the "Original Indenture"), with the Guarantors, the
Insurer and the Trustee;

                  WHEREAS, the Original Indenture is incorporated herein by this
reference and the Original Indenture, as supplemented by this Supplemental
Indenture, is herein called the "Indenture";

                  WHEREAS, under the Original Indenture, additional series of
floating rate senior secured bonds and fixed rate senior secured bonds may at
any time be established by the Company in accordance with the provisions of the
Original Indenture and the terms of such series may be described by a
supplemental indenture executed by the Company, the Guarantors, the Trustee and
the Insurer;

                  WHEREAS, the Company proposes to create under the Indenture an
additional series of [floating rate] [fixed rate] senior secured bonds;

                  WHEREAS, additional floating rate and fixed rate senior
secured bonds of other series hereafter established, except as may be limited in
the Original Indenture as at the time supplemented and modified, may be issued
from time to time pursuant to the Indenture as at the time supplemented and
modified; and

                  WHEREAS, all things necessary to make the Series [_] [Floating
Rate] [Fixed Rate] Senior Secured Bonds (as defined below), when executed by the
Company and authenticated and delivered under this Supplemental Indenture and
duly issued by the Company, the valid obligations of the Company, and to make
this Supplemental Indenture a valid agreement of the Company, in accordance with
their and its terms, have been done.

                  NOW, THEREFORE, for and in consideration of the premises and
the purchase of the Series [_] [Floating Rate] [Fixed Rate] Senior Secured Bonds
by their Holders, it is mutually agreed, for the equal and proportionate benefit
of all Holders, as follows:

                                    ARTICLE I

                  Series [__] [Floating Rate] [Fixed Rate] Senior Secured Bonds

                  Section 1.01. Establishment. There is hereby established an
additional series of [floating rate] [fixed rate] senior secured bonds to be
issued under the Indenture, to be

                                      E-2
<PAGE>

designated as the Company's Series [____] [Floating Rate] [Fixed Rate] Senior
Secured Bonds due [____] (the "Series [____] [Floating Rate] [Fixed Rate] Senior
Secured Bonds").

                  The aggregate Initial Principal Amount of Series [____]
[Floating Rate] [Fixed Rate] Senior Secured Bonds that may be authenticated and
delivered under this Supplemental Indenture is limited to $[________], except
for Series [____] [Floating Rate] [Fixed Rate] Senior Secured Bonds
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Series [__] [Floating Rate] [Fixed Rate] Senior
Secured Bonds pursuant to Section 3.05, 3.06, 3.08, 10.05 or 12.06. of the
Original Indenture.

                  [The Series [____] Floating Rate Senior Secured Bonds shall be
issued in the form of one Global Bond in substantially the form set out in
Exhibit A-1 to the Original Indenture.] [The Series [____] Fixed Rate Senior
Secured Bonds shall be issued in the form of one Global Bond in substantially
the form set out in Exhibit A-2 to the Original Indenture.] The Depositary with
respect to the Series [____] [Floating Rate] [Fixed Rate] Senior Secured Bonds
shall be The Depository Trust Company.

                  The form of the Trustee's Certificate of Authentication for
the Series [__] [Floating Rate] [Fixed Rate] Senior Secured Bonds shall be in
substantially the form set forth in Section 2.04 of the Original Indenture.

                  Each Series [__] [Floating Rate] [Fixed Rate] Senior Secured
Bonds shall be dated the date of authentication thereof and shall bear interest
from the date of original issuance thereof or from the most recent Scheduled
Payment Date to which interest has been paid or duly provided for.

                  Section 1.02. Definitions. The following defined terms used
herein shall, unless the context otherwise requires, have the meanings specified
below. Capitalized terms used herein for which no definition is provided herein
shall have the meanings set forth in the Original Indenture.

                  "Stated Maturity" means [_________].

                  [insert other applicable definitions]

                  Section 1.03. Payment of Principal and Interest.

                  The Company shall repay the principal amount of the [__]%
Fixed Rate Senior Secured Bonds in annual installments, commencing on [_______]
and continuing until the Stated Maturity. The aggregate amount of principal of
the [__]% [Series __] [Floating Rate] [Fixed Rate] Senior Secured Bonds to be
repaid in each year shall be as follows:

<Table>
<Caption>

             Year            Principal Amount        Year      Principal Amount
             ----            ----------------        ----      ----------------
<S>                          <C>                     <C>       <C>
                             $                                 $

</Table>

                                      E-3
<PAGE>

            The unpaid principal amount of the Series [____] [Floating Rate]
[Fixed Rate] Senior Secured Bonds shall bear interest [insert applicable
interest provisions].

            [Insert other applicable provisions].

                                   ARTICLE II

                            Miscellaneous Provisions

                  Section 2.01. Recitals by Company. The recitals contained in
this Supplemental Indenture and in the Series [__] [Floating Rate] [Fixed Rate]
Senior Secured Bonds, except the Trustee's certificates of authentication, shall
be taken as the statements of the Company, and neither the Trustee nor any
Authenticating Agent assumes any responsibility for their correctness. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Series [__] [Floating Rate] [Fixed Rate] Senior
Secured Bonds or the proceeds thereof.

                  Section 2.02. Ratification and Incorporation of Original
Indenture. As supplemented hereby, the Original Indenture is in all respects
ratified and confirmed, and the Original Indenture and this Supplemental
Indenture shall be read, taken and construed as one and the same instrument.

                  Section 2.03. Executed in Counterparts. This Supplemental
Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

                                      E-4
<PAGE>

                        IN WITNESS WHEREOF, the parties hereto have caused this
[First] Supplemental Indenture to be duly executed all as of the day and year
first above written.

                                                NRG PEAKER FINANCE COMPANY LLC,
                                                as Issuer

                                                By:
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                                BAYOU COVE PEAKING POWER, LLC,
                                                as Guarantor

                                                By:
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                                BIG CAJUN I PEAKING POWER LLC,
                                                as Guarantor

                                                By:
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                                NRG ROCKFORD LLC,
                                                as Guarantor

                                                By:
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                                NRG ROCKFORD II LLC,
                                                as Guarantor

                                                By:
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                      E-5
<PAGE>

                                                NRG STERLINGTON POWER LLC,
                                                as Guarantor

                                                By:
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                                XL CAPITAL ASSURANCE INC.,
                                                as Insurer

                                                By:
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                                THE BANK OF NEW YORK,
                                                as Trustee

                                                By:
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                      E-6<PAGE>
                                                                    EXHIBIT 4.24

================================================================================

                                COMMON AGREEMENT

                                      among

                            XL CAPITAL ASSURANCE INC.
                                     (XLCA)

              GOLDMAN SACHS MITSUI MARINE DERIVATIVE PRODUCTS, L.P.
                               (Swap Counterparty)

                              THE BANK OF NEW YORK
                                    (Trustee)

                              THE BANK OF NEW YORK
                               (Collateral Agent)

                         NRG PEAKER FINANCE COMPANY LLC
                                    (Issuer)

                                       and

                        EACH PROJECT COMPANY PARTY HERETO
                               (Project Companies)

                            DATED AS OF JUNE 18, 2002

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
RECITALS..........................................................................................................1

ARTICLE 1 DEFINITIONS AND RULES OF INTERPRETATION.................................................................2

         1.1       Definitions....................................................................................2
         1.2       Rules of Interpretation........................................................................3
         1.3       Accounting Principles and Terms................................................................3

ARTICLE 2 AFFIRMATIVE COVENANTS OF ISSUER.........................................................................3

         2.1       Use of Proceeds and Revenues...................................................................3
         2.2       Notices........................................................................................3
         2.3       Financial Statements...........................................................................4
         2.4       Inspection of Books and Records................................................................5
         2.5       Compliance with Laws...........................................................................5
         2.6       Existence, Conduct of Business, Etc............................................................5
         2.7       Calculation of Ratios and Other Compliance Calculations........................................5
         2.8       Further Assurances.............................................................................6
         2.9       Taxes..........................................................................................6
         2.10      Notice of Redemption...........................................................................6
         2.11      Swap Agreement.................................................................................6

ARTICLE 3 AFFIRMATIVE COVENANTS OF THE PROJECT COMPANIES..........................................................7

         3.1       Use of Proceeds and Revenues...................................................................7
         3.2       Reporting Requirements.........................................................................8
         3.3       Inspection of Books and Records...............................................................10
         3.4       Plans and Specifications; Completion Tests....................................................10
         3.5       Compliance with Laws..........................................................................10
         3.6       Maintenance of Existence and Business.........................................................10
         3.7       Project Documents.............................................................................11
         3.8       Permits.......................................................................................11
         3.9       Further Assurances............................................................................11
         3.10      Maintenance of Insurance......................................................................12
         3.11      Taxes.........................................................................................12
         3.12      Title; Maintenance of Properties..............................................................12
         3.13      Market Based Rate Authority...................................................................12
         3.14      Completion....................................................................................13
         3.15      Operation and Maintenance.....................................................................13
         3.16      Condemnation Event............................................................................13
         3.17      Sterlington PPA Legal Opinion.................................................................14
         3.18      Fuel and Power Marketing Plan.................................................................14
         3.19      Unrestricted Subsidiary.......................................................................14
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                                                             <C>
ARTICLE 4 NEGATIVE COVENANTS OF ISSUER...........................................................................14

         4.1       Contingent Liabilities........................................................................14
         4.2       Limitations on Liens..........................................................................14
         4.3       Indebtedness..................................................................................14
         4.4       Sale of Assets................................................................................15
         4.5       Distributions.................................................................................15
         4.6       Investments...................................................................................18
         4.7       Transactions With Affiliates..................................................................18
         4.8       ERISA.........................................................................................18
         4.9       Liquidation; Amendment of Organizational Documents............................................18
         4.10      Accounts......................................................................................19
         4.11      Name and Location; Fiscal Year................................................................19
         4.12      Assignment....................................................................................19
         4.13      No SEC Registration...........................................................................19

ARTICLE 5 NEGATIVE COVENANTS OF PROJECT COMPANIES................................................................19

         5.1       Contingent Liabilities........................................................................19
         5.2       Liens.........................................................................................20
         5.3       Indebtedness..................................................................................20
         5.4       Asset Dispositions............................................................................20
         5.5       Business Activities...........................................................................20
         5.6       Subsidiaries, etc.; Investments...............................................................20
         5.7       Distributions.................................................................................21
         5.8       Transactions With Affiliates..................................................................21
         5.9       ERISA.........................................................................................21
         5.10      Merger or Consolidation; Liquidation; Amendment of Organizational Documents...................21
         5.11      Amendments to Project Documents...............................................................22
         5.12      Accounts......................................................................................22
         5.13      Name and Location; Fiscal Year................................................................23
         5.14      Assignment....................................................................................23
         5.15      Acquisition of Real Property..................................................................23
         5.16      Additional Project Documents..................................................................24
         5.17      Use of Project Site...........................................................................24
         5.18      Hazardous Substances..........................................................................24

ARTICLE 6 GUARANTY ..............................................................................................24

         6.1       Guaranty......................................................................................24
         6.2       Guaranty Absolute.............................................................................25
         6.3       Rights and Obligations Absolute and Unconditional.............................................25
         6.4       Guaranty Continuing...........................................................................26
         6.5       Waivers.......................................................................................26
         6.6       Acknowledgments...............................................................................28
         6.7       Subordination.................................................................................28
         6.8       Subrogation...................................................................................28
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>                                                                                                              <C>
         6.9       Bankruptcy....................................................................................28
         6.10      Interest; Collection Expenses.................................................................29
         6.11      Reinstatement of Guaranty.....................................................................29
         6.12      Termination of Guaranty.......................................................................29
         6.13      Survival......................................................................................29
         6.14      Contribution Obligations among Project Companies..............................................29

ARTICLE 7 EVENTS OF DEFAULT; REMEDIES............................................................................30

         7.1       Issuer Events of Default......................................................................30
         7.2       Project Events of Default.....................................................................34
         7.3       Fundamental Project Event of Default..........................................................39
         7.4       Controlling Party Agreement...................................................................40
         7.5       Remedies......................................................................................42
         7.6       Notice to Trustee and Project Events of Default...............................................43
         7.7       Application of Proceeds.......................................................................43

ARTICLE 8 SCOPE OF LIABILITY.....................................................................................44

ARTICLE 9 INDEMNIFICATION, AMENDMENTS and WAIVERS................................................................45

         9.1       Indemnification...............................................................................45
         9.2       Amendments and Waivers........................................................................47

ARTICLE 10 INDEPENDENT CONSULTANTS...............................................................................48

         10.1      Removal and Fees..............................................................................48
         10.2      Duties........................................................................................49
         10.3      Certification of Dates........................................................................49

ARTICLE 11 THE COLLATERAL AGENT..................................................................................49

         11.1      Appointment and Duties of the Collateral Agent................................................49
         11.2      Rights of Collateral Agent....................................................................50
         11.3      Lack of Reliance on the Agents................................................................52
         11.4      Indemnification...............................................................................53
         11.5      Resignation or Removal of the Collateral Agent................................................54
         11.6      Release of Collateral.........................................................................54
         11.7      Assignment of Rights, Not Assumption of Duties................................................54
         11.8      Appointment of Co-Collateral Agent............................................................55
         11.9      XLCA Confirmation Before Release of Certain Funds.............................................56

ARTICLE 12 MISCELLANEOUS.........................................................................................56

         12.1      Addresses.....................................................................................56
         12.2      Additional Security; Right to Set-Off.........................................................59
         12.3      Delay and Waiver..............................................................................59
         12.4      Costs, Expenses and Attorneys' Fees...........................................................60
         12.5      Entire Agreement..............................................................................60
         12.6      Governing Law.................................................................................60
</TABLE>

                                      iii

<PAGE>
<TABLE>
<S>                                                                                                              <C>
         12.7      Severability..................................................................................60
         12.8      Headings......................................................................................61
         12.9      No Partnership, Etc...........................................................................61
         12.10     Limitation on Liability.......................................................................61
         12.11     Waiver of Jury Trial..........................................................................61
         12.12     Consent to Jurisdiction.......................................................................61
         12.13     Usury.........................................................................................62
         12.14     Successors and Assigns........................................................................62
         12.15     Counterparts..................................................................................62
         12.16     Term and Termination..........................................................................63
         12.17     Reinstatement.................................................................................63
         12.18     Survival......................................................................................63
         12.19     Partial Termination...........................................................................63
         12.20     No XLCA Liability or Duties...................................................................63
         12.21     Calculation of Net Annual Payment Pursuant to Swap Agreement..................................64
</TABLE>

INDEX OF ANNEXES AND EXHIBITS

Annex A           Definitions
Exhibit A         Form of Debt Service Coverage Ratio Certificate
Exhibit B         Form of Compliance Calculation Certificate
Exhibit C         Insurance Requirements
Exhibit D         Completion Tests
Exhibit E         Form of Annual Operations Report
Exhibit F         Form of Annual Insurance Certificate
Exhibit G         Bayou Cove Deed of Transfer
Exhibit H         General Subordination Provisions
Exhibit I         Subordination Provisions for Subordinated Bonds
Exhibit J         Stipulated O&M Expenses

                                       iv

<PAGE>
                  This COMMON AGREEMENT (as amended, amended and restated,
supplemented or otherwise modified from time to time, this "Agreement"), dated
as of June 18, 2002, is entered into among (1) XL Capital Assurance Inc., a New
York stock insurance company ("XLCA"), (2) Goldman Sachs Mitsui Marine
Derivative Products, L.P., a Delaware limited partnership (the "Swap
Counterparty"), (3) The Bank of New York, a New York banking corporation, not in
its individual capacity but solely as trustee for the benefit of the holders of
the Bonds (the "Bondholders") (in such capacity, the "Trustee"), (4) The Bank of
New York, as collateral agent for the benefit of the Secured Parties (in such
capacity, the "Collateral Agent"), (5) NRG Peaker Finance Company LLC, a
Delaware limited liability company, as Issuer (the "Issuer"), and (6) each party
hereto identified as a Project Company on the signature pages hereto (each a
"Project Company" and, collectively, the "Project Companies").

                                    RECITALS

WHEREAS:

                  A. The Projects comprise five natural gas-fired electric
         generation facilities located in Louisiana and Illinois. The electric
         generation facilities comprising the Projects are peaker facilities
         designed to generate electricity during periods of peak demand for
         electricity. As of the date hereof, the Big Cajun I Units 3&4 Project,
         the Rockford I Project and the Sterlington Project are complete and
         operate commercially. The Rockford II Project and the Bayou Cove
         Project are guaranteed by NRG Energy pursuant to the Contingent
         Guaranty Agreement to be completed and commercially operating by June
         30, 2003.

                  B. Each Project is owned by an indirect wholly-owned
         subsidiary of NRG Energy. The Issuer is an indirect wholly-owned
         subsidiary of NRG Energy.

                  C. The Issuer will issue and sell its Series A Bonds in an
         offering in reliance on Rule 144A and Regulation S under the Securities
         Act and will use the proceeds from the sale of the Series A Bonds to
         make loans to three of the five Project Companies pursuant to and in
         accordance with the Project Loan Agreements. Such Project Companies
         will use the proceeds of the sale of the Series A Bonds lent to them
         pursuant to the Project Loan Agreements to (i) reimburse NRG Energy for
         NRG Energy's costs of having constructed and/or acquired the Projects
         (including interest incurred during construction), (ii) pay the
         Premium, (iii) deposit $11,279,588 on the Closing Date into the
         Collateralized Experience Account, and (iv) pay transaction fees and
         costs in connection with the Transaction.

                  D. The Issuer will pay the principal of and interest on the
         Series A Bonds in accordance with the terms of the Indenture.

                  E. The Issuer will enter into the Swap Agreement with the Swap
         Counterparty pursuant to which the Issuer will make fixed rate interest
         rate payments to the Swap Counterparty and the Swap Counterparty will
         make floating rate interest payments to the Issuer.

<PAGE>

                  F. Regularly scheduled payments of principal of and interest
         on the Series A Bonds will be unconditionally and irrevocably
         guaranteed by XLCA pursuant to, and subject to, the Policy and the
         Insurance and Reimbursement Agreement in exchange for the payment of
         the Premium by the Issuer to XLCA as set forth in the Premium Letter.

                  G. Regularly scheduled payments of Swap Payment Amounts will
         be unconditionally and irrevocably guaranteed by XLCA pursuant to, and
         subject to, the Swap Policy and the Insurance and Reimbursement
         Agreement in exchange for the payment of the Swap Policy Premium by the
         Issuer to XLCA as set forth in the Premium Letter.

                  H. Pursuant to and in accordance with the Contingent Guaranty
         Agreement, NRG Energy will be obligated to make certain payments under
         circumstances specified in the Contingent Guaranty Agreement.

                  I. Pursuant to and in accordance with the Insurance and
         Reimbursement Agreement, the Issuer will be obligated to reimburse XLCA
         in respect of payments (if any) made by XLCA pursuant to the Policy
         and/or the Swap Policy and in respect of other amounts specified in the
         Insurance and Reimbursement Agreement.

                  J. Pursuant to the Issuer Collateral Documents, the Issuer's
         obligations owed to the Secured Parties will be secured by a first
         priority lien for the benefit of the Secured Parties on the membership
         interests in the Issuer and all of the property and assets of the
         Issuer (including the Project Loan Notes).

                  K. Pursuant to the Guaranties, each of the Project Companies
         will unconditionally and irrevocably guaranty the obligations and
         indebtedness of the Issuer in respect of the Guaranteed Obligations,
         which Guaranties will, pursuant to the Project Company Collateral
         Documents, be secured by a first priority lien for the benefit of the
         Secured Parties on the membership interests in each Project Company
         (other than the Big Cajun Project Company and the Sterlington Project
         Company) and on all or substantially all of the property and assets of
         each Project Company.

                  L. The parties hereto wish to enter into this Agreement in
         order to, among other things, set forth certain common provisions
         regarding the various transactions recited above.

                  NOW, THEREFORE, in consideration of the agreements herein, the
         parties hereto agree as follows:

                                   ARTICLE 1
                     DEFINITIONS AND RULES OF INTERPRETATION

         1.1 Definitions. Capitalized terms defined in the preamble of this
Agreement shall have the meanings given to them in the preamble of this
Agreement and, except as otherwise expressly provided in this Agreement,
capitalized terms used in the preamble, the recitals and in this Agreement shall
have the meanings given in Annex A hereto.

                                       2
<PAGE>

         1.2 Rules of Interpretation. Except as otherwise expressly provided in
this Agreement, the rules of interpretation set forth in Annex A hereto shall
apply to this Agreement.

         1.3 Accounting Principles and Terms. Except as otherwise provided in
this Agreement, (a) all computations and determinations as to financial matters,
and all financial statements to be delivered under this Agreement, shall be made
or prepared in accordance with GAAP (including principles of consolidation where
appropriate but excluding footnote disclosure on interim financial statements)
and on a consistent basis (except to the extent approved or required by the
independent public accountants certifying such statements and disclosed
therein), and (b) all accounting terms used in this Agreement shall have the
meanings respectively ascribed to such terms by GAAP.

                                   ARTICLE 2
                         AFFIRMATIVE COVENANTS OF ISSUER

                  The Issuer covenants and agrees that it shall perform the
covenants set forth in this Article 2 (unless waived in accordance with Section
9.2 of this Agreement).

         2.1 Use of Proceeds and Revenues.

                  (a) Proceeds. Unless otherwise expressly provided herein or in
the Depositary Agreement, the Issuer shall use all the proceeds from the sale of
the Series A Bonds to lend to each of the Bayou Cove Project Company, the
Rockford I Project Company and the Rockford II Project Company such Project
Company's Project Loan Amount pursuant to the Project Loan Agreement to which
such Project Company is a party.

                  (b) Revenues. Unless otherwise expressly provided herein or in
the Depositary Agreement, the Issuer shall deposit, or cause to be deposited,
all Project Revenues paid to or otherwise received by the Issuer in the
applicable Account in accordance with the terms of the Depositary Agreement.

         2.2 Notices. The Issuer shall promptly, upon acquiring notice or giving
notice, as the case may be, or obtaining knowledge thereof, give written notice
(together with copies of any underlying notices or other documentation) to the
Collateral Agent, the Trustee, the Swap Counterparty and XLCA (if XLCA is the
Controlling Party) (it being acknowledged that XLCA shall have no obligation to
provide any such written notice received by it to any other Person) of:

                  (a) Any action, suit, arbitration or litigation pending or
threatened against the Issuer and (i) involving claims against the Issuer in
excess of $5,000,000 in the aggregate, or (ii) involving any injunctive,
declaratory or other equitable relief that, if determined adversely to the
Issuer, could reasonably be expected to have an Issuer Material Adverse Effect,
such notice to include, if reasonably requested by the Controlling Party, copies
of all material papers filed in such litigation involving the Issuer, and, if
reasonably requested by the Controlling Party, such notice to be given monthly
if any such papers have been filed since the last notice given;

                  (b) Any dispute or disputes which may exist between the Issuer
and any Governmental Authority and which involve (i) claims against the Issuer
which exceed

                                       3
<PAGE>

$5,000,000 in the aggregate, or (ii) injunctive or declaratory relief that, if
adversely determined, could reasonably be expected to have an Issuer Material
Adverse Effect;

                  (c) Any Issuer Event of Default or Issuer Inchoate Default,
together with a description of any action being taken or proposed to be taken
with respect thereto;

                  (d) Any matter which has had or, in the Issuer's reasonable
judgment, could reasonably be expected to have, an Issuer Material Adverse
Effect;

                  (e) Any change in ratings given to the Issuer by Moody's or
S&P, including the placement of the Issuer on "credit watch negative" or a
similar status, and, to the extent the Issuer, any Project Company or NRG Energy
has been notified in writing by any Rating Agency, any change in the Shadow
Ratings; and

                  (f) Any other documentation or other information reasonably
requested by XLCA (if XLCA is the Controlling Party).

                  Notwithstanding the foregoing, the Issuer shall not be
required to give notice of any matter described in this Section 2.2 that is
described in any Form 10-K, 10-Q or 8-K or other form or document filed by the
Issuer or any of its Affiliates with the Securities and Exchange Commission and
available on the Securities and Exchange Commission's Electronic Data Gathering,
Analysis and Retrieval (EDGAR) system.

         2.3 Financial Statements. The Issuer shall deliver or cause to be
delivered to the Collateral Agent, the Trustee, the Swap Counterparty and XLCA
(if XLCA is the Controlling Party) (it being acknowledged that XLCA shall have
no obligation to provide any financial statements or other information provided
to it under this Section 2.3 to any other Person):

                  (a) as soon as available and in any event within 120 days
after the end of each fiscal year of the Issuer, an audited consolidated balance
sheet of the Issuer as of the end of such fiscal year and the related audited
statements of income, retained earnings and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, to the extent available, all reported on by an independent public
accountant of nationally recognized standing; and

                  (b) each time financial statements are delivered under Section
2.3(a) above, along with such financial statements, a certificate signed by a
Responsible Officer of the Issuer, certifying that such officer has made or
caused to be made a review of the transactions and financial condition of the
Issuer during the relevant fiscal period and that such review has not, to the
best of such Responsible Officer's knowledge, disclosed the existence of any
event or condition which constitutes an Issuer Event of Default or Issuer
Inchoate Default, or if any such event or condition existed or exists, the
nature thereof and the corrective actions that the Issuer has taken or proposes
to take with respect thereto, and also certifying that the Issuer is in
compliance with all applicable material provisions of each Financing Document to
which the Issuer is a party or, if such is not the case, stating the nature of
such non-compliance and the corrective actions which the Issuer has taken or
proposes to take with respect thereto.

                                       4
<PAGE>

         2.4 Inspection of Books and Records. The Issuer shall keep proper books
of accounts and records in accordance with GAAP and in compliance in all
material respects with all applicable Legal Requirements and make the same
available for inspection by the Controlling Party.

         2.5 Compliance with Laws. The Issuer shall comply with all applicable
Legal Requirements, except where non-compliance could not reasonably be expected
to have an Issuer Material Adverse Effect.

         2.6 Existence, Conduct of Business, Etc. The Issuer shall (a) maintain
and preserve (i) its existence as a limited liability company formed under the
laws of the State of Delaware (other than as permitted by Section 9.01 of the
Indenture), and (ii) all rights, privileges and franchises necessary or
desirable in the normal conduct of its business, (b) perform all of its
contractual obligations under the Financing Documents and (c) engage only in the
businesses (i) contemplated by the Financing Documents as represented in Section
2.1(o)(ii)(C) of the Insurance and Reimbursement Agreement or (ii) otherwise
expressly permitted by the Financing Documents. Without limiting the generality
of clause (c) in the preceding sentence, the Issuer shall not (A) enter into any
Project Document or any Additional Project Document (other than in connection
with activities expressly permitted by the Financing Documents), (B) hold any
equity, voting or other interest in any Person, or (C) have any employees.

         2.7 Calculation of Ratios and Other Compliance Calculations.

                  (a) Within 17 days after each Determination Date, the Issuer
shall deliver to the Collateral Agent, the Trustee, the Swap Counterparty and
XLCA (if XLCA is the Controlling Party) (it being acknowledged that XLCA shall
have no obligation to provide any such certificate received by it to any other
Person) a certificate in the form of Exhibit A with the calculation of the Debt
Service Coverage Ratio for the Determination Period ending on such Determination
Date. If XLCA is the Controlling Party, XLCA shall notify the Issuer of any
errors in the calculation of the Debt Service Coverage Ratio within 10 days
after receipt of the Issuer's certificate and the Issuer and XLCA shall
diligently work to agree on the correction of any such errors. If the Issuer and
XLCA are unable to agree on the correction of any such errors within 5 days
after notification by XLCA to the Issuer of any such errors, such dispute shall
be resolved by the Fuel and Power Market Consultant within 3 days after
submission of the dispute to the Fuel and Power Market Consultant. The Issuer
shall deliver a corrected certificate to the Collateral Agent and XLCA within 3
days after agreement by the Issuer and XLCA, or resolution by the Fuel and Power
Market Consultant, on the correction of any such errors. If XLCA is not the
Controlling Party, the certificate originally delivered by the Issuer to the
Collateral Agent shall be final and conclusive.

                  (b) For so long as NRG Energy or any Acceptable Assignee has
obligations under the Contingent Guaranty Agreement, within 17 days after each
Determination Date, the Issuer shall deliver to the Collateral Agent, the
Trustee, the Swap Counterparty and XLCA (if XLCA is the Controlling Party) (it
being acknowledged that XLCA shall have no obligation to provide any such
certificate received by it to any other Person) a certificate in the form of
Exhibit B for the Determination Period ending on such Determination Date. If
XLCA is the Controlling Party, XLCA shall notify the Issuer of any errors in the

                                       5
<PAGE>

calculation of any of the calculations set forth in such certificate within 10
days after receipt of such certificate and the Issuer and XLCA shall diligently
work to agree on the correction of any such errors. If the Issuer and XLCA are
unable to agree on the correction of any such errors within 5 days after
notification by XLCA to the Issuer of any such errors, such dispute shall be
resolved by the Independent Engineer and/or the Fuel and Power Market
Consultant, as indicated in Exhibit B, within 3 days after submission of the
dispute to the Independent Engineer and/or the Fuel and Power Market Consultant,
as the case may be. The Issuer shall deliver a corrected certificate to the
Collateral Agent and XLCA within 3 days after agreement by the Issuer and XLCA,
or resolution by the Independent Engineer and/or the Fuel and Power Market
Consultant, on the correction of any such errors. If XLCA is not the Controlling
Party, the certificate originally delivered by the Issuer to the Collateral
Agent shall be final and conclusive.

         2.8 Further Assurances.

                  (a) The Issuer shall preserve the security interests in the
Issuer Collateral and shall undertake all actions which are necessary or
advisable under applicable law in such manner and in such jurisdictions to (i)
perfect and maintain the Collateral Agent's security interest in the Issuer
Collateral in full force and effect at all times (including the priority
thereof), and (ii) preserve and protect the Issuer Collateral and protect and
enforce the Issuer's rights and title and the rights of the Collateral Agent to
the Issuer Collateral, including the preparation, making or delivery of all
filings and recordations, the payment of fees and other charges and the issuance
of supplemental documentation.

                  (b) The Issuer shall perform such reasonable acts as may be
necessary to carry out the intent of this Agreement and the other Financing
Documents.

                  (c) The Issuer shall cause its equity interests to be
"certificated securities" as defined in Article 8 of the UCC and include in its
limited liability company agreement language (consistent with Section 8-103(c)
of the UCC) to the effect that such equity interests are "securities" (as such
term is defined in Article 8 of the UCC) governed by Article 8 of the UCC.

         2.9 Taxes. The Issuer shall pay and discharge promptly when due all
material Taxes and governmental charges imposed upon it or upon its income or
profits or in respect of its property, in each case before the same shall become
delinquent or in default and before penalties accrue thereon, unless and to the
extent the same are being contested in good faith by appropriate proceedings and
adequate reserves with respect thereto shall, to the extent required by GAAP,
have been set aside, and failure to pay or comply with the contested item could
not reasonably be expected to have an Issuer Material Adverse Effect.

         2.10 Notice of Redemption. The Issuer shall give notice to XLCA of any
redemption for any reason of any Bonds no later than the time a redemption
notice in respect of the redemption of such Bonds is given by the Issuer or the
Trustee in accordance with the Indenture.

         2.11 Swap Agreement. The Issuer shall at all times be a party to an
interest rate swap agreement in respect of the Series A Bonds on the same or
similar terms (with adjustments to the aggregate notional amount as appropriate)
as the Swap Agreement and if for any reason the Issuer is not a party to the
Swap Agreement or if the Swap Agreement terminates, the Issuer shall

                                       6
<PAGE>

ensure that it is party to a Replacement Swap Agreement such that at no time
shall the Issuer not be a party to such an interest rate swap agreement,
provided, however, that the Issuer's obligations to enter into a Replacement
Swap Agreement pursuant to this Section 2.11 shall be expressly conditioned upon
XLCA's agreement to provide a financial guaranty to the replacement swap
provider on the same or similar terms as the Swap Policy. The Issuer shall be
required to apply any amounts received from any replacement swap provider in
connection with the Issuer's entry into a Replacement Swap Agreement (a) first,
toward the satisfaction of any Swap Breakage Costs due and owing to the original
Swap Counterparty under the Swap Agreement, and (b) second, to reimburse XLCA
for any payments made under the Swap Policy constituting termination payments in
connection with an early termination of the Swap Agreement to the extent not
previously reimbursed. The Issuer shall terminate or partially terminate the
Swap Agreement, in each case subject to its terms and conditions, such that at
no time shall the aggregate notional amount under the Swap Agreement exceed the
then outstanding aggregate principal amount of the Series A Bonds.

                                   ARTICLE 3
                 AFFIRMATIVE COVENANTS OF THE PROJECT COMPANIES

                  Each Project Company covenants and agrees that it shall
perform the covenants set forth in this Article 3, only with respect to itself
and its Project (unless waived in accordance with Section 9.2 of this
Agreement). The covenants set forth in this Article 3 that expressly require
performance only by a specified Project Company shall be required to be
performed only by such Project Company (unless such performance is waived in
accordance with Section 9.2 of this Agreement).

         3.1 Use of Proceeds and Revenues.

                  (a) Proceeds. Unless otherwise expressly provided herein or in
the Depositary Agreement, each Project Company party to a Project Loan Agreement
shall apply, on the Closing Date, the proceeds from the sale of the Series A
Bonds borrowed from the Issuer pursuant to the Project Loan Agreement to which
such Project Company is a party to (i) reimburse NRG Energy for NRG Energy's
costs of having constructed and/or acquired the Projects (including interest
incurred during construction), (ii) pay the Premium and all additional amounts
required to be paid to XLCA pursuant to the Policy and the Insurance and
Reimbursement Agreement on the Closing Date, (iii) deposit $11,279,588 in the
Collateralized Experience Account in accordance with Section 4.3.1 of the
Depositary Agreement, and (iv) pay the transaction fees and costs due on the
Closing Date in connection with the Transaction to the relevant Persons.

                  (b) Revenues. Each Project Company shall deposit all Project
Revenues, Loss Proceeds and any other amounts due to it directly into the
applicable Accounts as required pursuant to the Depositary Agreement and the
other Financing Documents. Each Project Company shall use its good faith
reasonable efforts to cause all Project Revenues, Loss Proceeds and any other
amounts due to it to be paid or otherwise delivered by Persons making such
payment or delivery directly into the applicable Accounts as required pursuant
to the Depositary Agreement and the other Financing Documents.

                                       7
<PAGE>

         3.2 Reporting Requirements.

                  (a) Notice of Material Events. Each Project Company shall
promptly, upon acquiring notice or giving notice, as the case may be, or
obtaining knowledge thereof, give written notice (together with copies of any
underlying notices or other documentation) to the Collateral Agent, the Trustee,
the Swap Counterparty and XLCA (if XLCA is the Controlling Party) (it being
acknowledged that XLCA shall have no obligation to provide any such written
notice received by it to any other Person) of:

                  (i) Any action, suit, arbitration, litigation, investigation
         or other proceeding or any dispute with any Governmental Authority
         relating to it or its Project and that involves (A) claims against it
         or its Project in excess of $2,000,000 or potential claims against it
         or its Project in excess of $4,000,000, in each case in the aggregate,
         (B) any injunctive, declaratory or other equitable relief that, if
         determined adversely to such Project Company, could reasonably be
         expected to have a Project Material Adverse Effect, (C) revocation,
         modification, failure to renew or the like of any material Permit or
         imposition of additional material conditions with respect thereto, or
         (D) any Lien (other than a Project Company Permitted Lien) related to
         its Project for taxes due and payable but not paid;

                  (ii) Any Project Event of Default or Project Inchoate Default,
         together with a description of any action being taken or proposed to be
         taken with respect thereto;

                  (iii) Any cancellation or suspension, or receipt of written
         notice of threatened or potential cancellation or suspension, of any
         insurance described in Exhibit C;

                  (iv) Any matter which has had or, in such Project Company's
         reasonable judgment, could reasonably be expected to have, a Project
         Material Adverse Effect;

                  (v) Any termination of, or delivery or receipt of written
         notice of any material default under, any of such Project Company's
         Major Project Documents;

                  (vi) Any written notice received from or given to any party to
         any of such Project Company's Major Project Documents (A) that an event
         of force majeure has occurred thereunder or (B) in respect of any claim
         in connection with an event of force majeure thereunder;

                  (vii) The scheduled or proposed conduct of any of the
         performance or other tests listed on Exhibit D (the "Completion
         Tests"), which notice shall be given at least 10 Business Days prior to
         the date on which such test is scheduled or proposed to occur, and a
         copy of which notice shall be given to the Independent Engineer;

                  (viii) Any (A) fact, circumstance, condition or occurrence at,
         on or arising from, such Project Company's Site, Improvements or other
         Mortgaged Property that results in material noncompliance with, or
         material violation of, any Hazardous Substances Law, (B) Release or
         threatened Release of Hazardous Substances in, on, under or from or in
         connection with, such Project Company's Site, Improvements or other
         Mortgaged Property that has resulted or could reasonably be expected to
         result in material personal

                                       8
<PAGE>

         injury, material property damage or a Project Material Adverse Effect,
         and (C) pending or, to the knowledge of such Project Company,
         threatened Environmental Claim against it or, to the knowledge of such
         Project Company, any of its Affiliates, contractors, lessees or any
         other Persons, arising in connection with the development,
         construction, ownership, leasing, use, operation or maintenance of its
         Project, or such Project Company's occupying or conducting operations
         on or at such Project Company's Site, Improvements or other Mortgaged
         Property that has resulted or could reasonably be expected to result in
         material personal injury, material property damage or a Project
         Material Adverse Effect; and

                  (ix) Any Casualty Event or Condemnation Event, or the
         commencement of proceedings in connection therewith, with respect to
         its Project involving a probable loss of $5,000,000 or more.

                  Notwithstanding the foregoing, such Project Company shall not
be required to give notice of any matter described in this Section 3.2(a) that
is described in any Form 10-K, 10-Q or 8-K or other form or document filed by
such Project Company or any of its Affiliates with the Securities and Exchange
Commission and available on the Commission's Electronic Data Gathering, Analysis
and Retrieval (EDGAR) system.

                  (b) Additional Documents, Periodic Reports, Etc. Each Project
Company shall deliver, or cause to be delivered, to the Collateral Agent, the
Trustee, the Swap Counterparty and XLCA (if XLCA is the Controlling Party) (it
being acknowledged that XLCA shall have no obligation to provide any notices or
other information provided to it pursuant to this Section 3.2(b) to any other
Person):

                  (i) Promptly, but in no event later than 10 Business Days
         after it has knowledge of the execution and delivery thereof, a copy of
         each of its material Additional Project Documents;

                  (ii) Promptly, but in no event later than 10 Business Days
         after the effective date thereof, a copy of each material amendment,
         supplement or other modification to any of its Major Project Documents;

                  (iii) Promptly, but in no event later than 10 Business Days
         after receipt thereof by it, copies of any Permit listed on Part II of
         the Permit Schedule and any other material Permit related to its
         Project obtained by it after the date hereof;

                  (iv) With respect to the Bayou Cove Project only, promptly,
         but in no event later than 10 Business Days after the execution and
         delivery thereof, a copy of the transfer deed for the transfer of a
         portion of the Site relating to the Bayou Cove Project pursuant to
         Section 4.2.2 of the Bayou Cove EPC Agreement (Electric Interconnection
         Facilities);

                  (v) Within 17 days after each Determination Date, an Annual
         Operations Report substantially in the form of Exhibit E setting forth
         the information required therein;

                                       9
<PAGE>

                  (vi) Within 17 days after each Determination Date, a
         certificate, substantially in the form of Exhibit F certifying that the
         insurance requirements set forth in Exhibit C have been implemented and
         are being complied with in all material respects; and

                  (vii) Any other documentation or other information reasonably
         requested by XLCA (if XLCA is the Controlling Party).

                  (c) Financial Statements. Each Project Company shall deliver,
or cause to be delivered, to the Collateral Agent, the Trustee, the Swap
Counterparty and XLCA (if XLCA is the Controlling Party) (it being acknowledged
that XLCA shall have no obligation to provide any financial statements and other
information provided to it under this Section 3.2(c) to any other Person) as
soon as available and in any event within 120 days after the end of its fiscal
year, a balance sheet (which need not be audited) of such Project Company and
the related statements of income, retained earnings and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, to the extent available, each certified as to fairness of
presentation by a Responsible Officer of such Project Company.

         3.3 Inspection of Books and Records. Each Project Company shall keep
proper books of records and accounts in accordance with GAAP and in compliance
in all material respects with all applicable Legal Requirements and make the
same available for inspection by the Controlling Party.

         3.4 Plans and Specifications; Completion Tests.

                  (a) Plans and Specifications. Each Project Company shall cause
a complete set of as-built plans and specifications (and all supplements
thereto) related to its Project to be maintained at the corporate office at such
Project Company's Site and available for inspection by the Controlling Party and
the Independent Engineer; provided that neither the Bayou Cove Project Company
nor the Rockford II Project Company shall be required to comply with this
covenant until the Completion Date for such Project Company's Project. Without
prejudice to the immediately preceding sentence, each of the Bayou Cove Project
Company and the Rockford II Project Company shall, not later than eight months
after the Completion Date for its Project, cause an as-built survey to be
prepared and delivered to XLCA (if XLCA is the Controlling Party), the
Collateral Agent, the Trustee and the Independent Engineer.

                  (b) Completion Tests. Each Project Company shall permit the
Controlling Party and the Independent Engineer to witness the Completion Tests
in respect of its Project.

         3.5 Compliance with Laws. Each Project Company shall comply with, and
shall ensure that its Project is operated in compliance with, and shall make
such alterations to its Project as may be required for compliance with, all
applicable Legal Requirements, except where non-compliance could not reasonably
be expected to have a Project Material Adverse Effect.

         3.6 Maintenance of Existence and Business. Each Project Company shall
at all times preserve and maintain (a) its existence as a limited liability
company and its good standing under the laws of (i) in the case of the Bayou
Cove Project Company, the Big Cajun Project Company and the Sterlington Project
Company, the State of Delaware, or (ii) in the case of the Rockford I Project
Company and the Rockford II Project Company, the State of Illinois (other than
as

                                       10
<PAGE>

permitted by Section 5.10), (b) its qualification to do business in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business as conducted or proposed to be
conducted makes such qualification necessary except to the extent that the
failure to do so could not reasonably be expected to have a Project Material
Adverse Effect, and (c) its other material rights, privileges and franchises
necessary or desirable in the normal conduct of its business.

         3.7 Project Documents. Each Project Company shall exercise, preserve
and defend all of its rights under its Project Documents, except to the extent
failure to so exercise, preserve or defend such rights could not reasonably be
expected to have a Project Material Adverse Effect.

         3.8 Permits. Each Project Company shall obtain all Permits required at
any time and from time to time in connection with such Project Company's
development, construction, ownership, leasing, operation, maintenance or use of
its Project, except to the extent the failure to obtain such Permits could not
reasonably be expected to have a Project Material Adverse Effect.

         3.9 Further Assurances.

                  (a) Each Project Company shall preserve the security interests
granted or purported to be granted under the Collateral Documents to which it is
a party and undertake all actions which are necessary or advisable under
applicable law in such manner and in such jurisdictions to (i) perfect and
maintain the Collateral Agent's valid and perfected security interests in its
Project Company Collateral in full force and effect at all times (including the
priority thereof), subject to no Liens other than Project Company Permitted
Liens, and (ii) preserve and protect its Project Company Collateral and protect
and enforce its right, title and interest in and to, and the rights of the
Collateral Agent in and to, its Project Company Collateral, including the
preparation, making or delivery of all filings and recordations, the payment of
fees and other charges and the issuance of supplemental documentation.

                  (b) If a Project Company obtains any right, title or interest
in, to or under any real property (including leasehold interests) that is
material to the development, construction, ownership, leasing, operation,
maintenance or use of its Project and that is not covered by the Collateral
Documents to which it is a party, it shall (i) collaterally assign such right,
title or interest to the Collateral Agent for the benefit of the Secured
Parties, (ii) record a supplement to the Mortgage to which it is a party in form
and substance reasonably satisfactory to Collateral Agent encumbering such
right, title or interest by the Lien of such Mortgage, and (iii) obtain a
supplement to the applicable Title Policy insuring the first priority (subject
to Project Company Permitted Liens) of such Mortgage over such real property.

                  (c) Each Project Company shall perform such reasonable acts as
may be necessary to carry out the intent of this Agreement (including its
Guaranty) and the other Financing Documents to which it is a party.

                  (d) Each Project Company shall cause its equity interests to
be "certificated securities" as defined in Article 8 of the UCC and include in
its limited liability company

                                       11
<PAGE>

agreement language (consistent with Section 8-103(c) of the UCC) to the effect
that such equity interests are "securities" (as such term is defined in Article
8 of the UCC) governed by Article 8 of the UCC.

         3.10 Maintenance of Insurance. Each Project Company shall maintain or
cause to be maintained on its behalf in effect at all times the types of
insurance required pursuant to Exhibit C in the amounts and on the terms and
conditions specified therein (including paragraph 5 of Exhibit C).

         3.11 Taxes. Each Project Company will pay and discharge promptly when
due all material Taxes and governmental charges imposed upon it or upon its
income or profits or in respect of its property, in each case before the same
shall become delinquent or in default and before penalties accrue thereon,
unless and to the extent the same are being contested in good faith by
appropriate proceedings and adequate reserves with respect thereto shall, to the
extent required by GAAP have been set aside, and failure to pay or comply with
the contested item could not reasonably be expected to have a Project Material
Adverse Effect.

         3.12 Title; Maintenance of Properties.

                  (a) Title. Each Project Company shall preserve and maintain
good and, with respect to real property, marketable and insurable, title to its
Project and all of its other assets and good, marketable and insurable fee title
to, or as applicable, a valid and subsisting leasehold estate in, its Site and
the Improvements and Easements related to its Project, in each case free and
clear of all Liens other than Project Company Permitted Liens; provided that the
covenant set forth in this Section 3.12 shall not serve to prohibit any
disposition of assets expressly permitted under Section 5.4 of this Agreement.

                  (b) Bayou Cove. Specifically, notwithstanding the terms of the
Bayou Cove EPC Agreement (Electric Interconnection Facilities), the Bayou Cove
Project Company shall preserve and maintain good, marketable and insurable title
to its Site and the Improvements and Easements related to its Project, in each
case free and clear of all Liens other than its Project Company Permitted Liens,
except for the transfer of title to Entergy Louisiana of that portion of its
Site which is defined on the deed of transfer attached as Exhibit G; provided
that the covenant set forth in this Section 3.12(b) shall not serve to prohibit
any disposition of assets expressly permitted under Section 5.4 of this
Agreement.

                  (c) Maintenance of Properties. Each Project Company shall
maintain in good repair, working order and condition, all of its material
properties used or useful in respect of the conduct of its business and from
time to time make all appropriate repairs, renewals and replacements thereof,
except to the extent that it shall determine in good faith not to maintain,
repair, renew or replace such property if such property is no longer useful in
the conduct of its business and the failure to do so could not reasonably be
expected to have a Project Material Adverse Effect; provided that the covenant
set forth in this Section 3.12(c) shall not serve to prohibit any disposition of
assets expressly permitted under Section 5.4 of this Agreement.

         3.13 Market Based Rate Authority. To the extent market-based rates are
available to similarly situated generators selling Power, Ancillary Services or
some combination of the

                                       12
<PAGE>

foregoing in the Applicable Markets, each Project Company shall maintain at all
times its authority to sell at market-based rates wholesale Power, Ancillary
Services and, to the extent permitted as an Exempt Wholesale Generator or under
its FERC tariff, Other Energy-Related Products and Services in the Applicable
Markets, not subject to any rate caps or mitigation measures other than rate
caps and mitigation measures generally applicable to similarly situated
generators selling Power, Ancillary Services or some combination of the
foregoing in the Applicable Markets.

         3.14 Completion.

                  (a) The Bayou Cove Project Company shall cause the Completion
of the Bayou Cove Project to occur on or prior to June 30, 2003. In addition,
the Bayou Cove Project Company shall (i) up to a maximum aggregate cap of
$2,000,000 pay any and all Uncovered Warranty Costs that are incurred or
identified during any Warranty Period relating to the Bayou Cove Project, (ii)
pay any and all indemnity claims made against it arising out of any Bayou Cove
Equipment and Construction Contract relating to any actions or events which
occurred or failed to occur prior to Completion, and (iii) pay any damages owing
to any Bayou Cove Contractor under any Bayou Cove Equipment and Construction
Contract or any third party claim made against it arising out of any actions or
events related to any work performed to achieve Completion under a Bayou Cove
Equipment and Construction Contract (the obligations contained in this Section
3.14(a), the "Bayou Cove Completion Obligations").

                  (b) The Rockford II Project Company shall cause the Completion
of the Rockford II Project to occur on or prior to June 30, 2003. In addition,
the Rockford II Project Company shall (i) pay any and all indemnity claims made
against it arising out of any Rockford II Equipment and Construction Contract
relating to any actions or events which occurred or failed to occur prior to
Completion, and (ii) pay any damages owing to any Rockford II Contractor under
any Rockford II Equipment and Construction Contract or any third party claim
made against it arising out of any actions or events related to any work
performed to achieve Completion under a Rockford II Equipment and Construction
Contract (the obligations contained in this Section 3.14(b), the "Rockford II
Completion Obligations").

         3.15 Operation and Maintenance. Each Project Company shall, or shall
cause its Operator to, use, operate and maintain its Project in compliance with
Prudent Utility Practices, all Legal Requirements and the terms of its Project
Documents.

         3.16 Condemnation Event. If a Condemnation Event occurs or proceedings
therefor commence with respect to a Project Company's Project, such Project
Company shall (i) diligently pursue all its rights to compensation against the
relevant Governmental Authority in respect of such Condemnation Event except
where failure to do so could not reasonably be expected to have a Project
Material Adverse Effect, and (ii) not, without the written approval of XLCA (if
XLCA is the Controlling Party and which approval shall be in XLCA's absolute
discretion), compromise or settle any claim in excess of $5,000,000 against such
Governmental Authority. Each Project Company consents to the participation of
the Controlling Party in any condemnation proceedings, and each Project Company
shall from time to time deliver to the Controlling Party all documents and
instruments requested by it to permit such participation.

                                       13
<PAGE>

         3.17 Sterlington PPA Legal Opinion. The Sterlington Project Company
shall deliver a legal opinion to the Secured Parties and the Depositary Agent in
respect of the Sterlington PPA within 30 days after its acceptance by FERC and
execution by the parties thereto, which legal opinion shall be in form and
substance substantially the same as the legal opinions delivered with respect to
the other Major Project Documents on the Closing Date.

         3.18 Fuel and Power Marketing Plan. Each Project Company shall comply,
in all material respects with the power marketing, fuel supply and transmission
and transportation service parameters set forth in Sections 2.2.2, 2.2.3, 3.2
and 3.3 of the Fuel and Power Marketing Plan attached to the Power Sales and
Agency Agreement to which such Project Company is a party.

         3.19 Unrestricted Subsidiary. Each of the Bayou Cove Project Company,
the Big Cajun Project Company and the Sterlington Project Company shall maintain
at all times its designation as an "Unrestricted Subsidiary" (as such term is
defined in the South Central Financing Documents); provided that any such
Project Company shall not be required to comply with this covenant if it is no
longer a Subsidiary of NRG South Central.

                                   ARTICLE 4
                          NEGATIVE COVENANTS OF ISSUER

                  The Issuer covenants and agrees that the Issuer shall perform
the covenants set forth in this Article 4 (unless waived in accordance with
Section 9.2 of this Agreement).

         4.1 Contingent Liabilities. Except for the consummation of the
transactions pursuant to this Agreement and the other Financing Documents, the
Issuer shall not become liable as a surety, guarantor, accommodation endorser or
otherwise, for or upon the obligation of any other Person; provided, however,
that this Section 4.1 shall not be deemed to prohibit the incurrence, creation,
assumption or existence of Issuer Permitted Debt or Issuer Permitted Liens.

         4.2 Limitations on Liens. The Issuer shall not create, assume or suffer
to exist any Lien securing a charge or obligation on any Issuer Collateral, real
or personal, whether now owned or hereafter acquired, except Issuer Permitted
Liens.

         4.3 Indebtedness.

                  (a) The Issuer shall not incur, create, assume or permit to
exist any Debt, except Issuer Permitted Debt.

                  (b) Notwithstanding anything to the contrary in Section
4.3(a), and in addition to the requirements set forth in Section 3.02 of the
Indenture, Additional Bonds shall not be authenticated, delivered or issued
under the Indenture and no Debt shall be incurred by or on behalf of the Issuer
in respect of any Additional Bonds unless (i) no Issuer Event of Default or
Issuer Inchoate Default has occurred and is continuing or would occur as a
result of such authentication, delivery, issuance or incurrence, (ii) each of
Moody's and S&P has confirmed in writing that such authentication, delivery,
issuance or incurrence will not result in downgrade of (x) the ratings for the
Series A Bonds (after giving effect to the Policy) below Aaa by Moody's

                                       14
<PAGE>

and AAA by S&P, and (y) the Shadow Ratings for the Series A Bonds below Baa3 by
Moody's and BBB- by S&P, and (iii) XLCA shall have agreed, in its absolute
discretion, to the issuance of the Additional Bonds and to unconditionally and
irrevocably guaranty the scheduled payments of principal of and interest on such
Additional Bonds in the same manner and to the same extent as scheduled payments
of principal of and interest on the Series A Bonds are guaranteed under the
Policy. The Collateral Agent shall, on behalf of the Secured Parties, execute
such documents and take such other actions as reasonably requested by, and at
the expense of, the Issuer to effect and evidence the issuance of Additional
Bonds pursuant to Section 3.02 of the Indenture.

         4.4 Sale of Assets. The Issuer shall not sell, lease (as lessor),
assign, transfer or otherwise dispose of any of its material properties or
assets, whether now owned or hereafter acquired (other than in accordance with
Section 9.01 of the Indenture); provided that this Section 4.4 shall not be
deemed to prohibit the grant, creation or assumption of Issuer Permitted Liens.
The Issuer shall not sell, assign, transfer or otherwise dispose of any Project
Loan Note other than pursuant to, and in connection with, a Permitted Peaker
Buyout.

         4.5 Distributions.

                  (a) The Issuer shall not directly or indirectly (i) make or
declare any distribution (in cash, property or obligation) on, or make any other
payment on account of, any equity interest in the Issuer, (ii) make any payment
in respect of Subordinated Debt or (iii) make any other payment from the
Distribution Account (whether to a Project Company, any Affiliate of the Issuer
or any Project Company or any other Person) (each such distribution or payment,
a "Restricted Payment") unless:

                  (i) no Issuer Event of Default, Issuer Inchoate Default or
         Project Event of Default pursuant to Section 7.2(n) of this Agreement
         (Interconnection Solution) has occurred and is continuing and such
         Restricted Payment will not result in an Issuer Event of Default or an
         Issuer Inchoate Default;

                  (ii) subject to any reduction in the amount of the Restricted
         Payment in accordance with Section 4.5(b) of this Agreement, the amount
         of such Restricted Payment is limited to, and such Restricted Payment
         is made from, Account Funds in the Distribution Account and in
         accordance with Section 4.6 of the Depositary Agreement;

                  (iii) the Restricted Payment is made on a Restricted Payment
         Date;

                  (iv) as of the Restricted Payment Date, the Available
         Collateralized Experience Funds equal or exceed the Collateralized
         Experience Amount as of such date; and

                  (v) the Issuer shall have delivered to Collateral Agent, the
         Trustee, the Swap Counterparty and XLCA, at least five Business Days
         prior to the proposed Restricted Payment Date, a certificate dated as
         of the proposed Restricted Payment Date and duly executed by a
         Responsible Officer of the Issuer, certifying to the effect that each
         of the foregoing conditions and the other applicable conditions of this
         Section 4.5 shall have been satisfied as of such date and XLCA (if it
         is the Controlling Party), acting in its absolute discretion, shall
         have confirmed in writing to the Collateral Agent XLCA's

                                       15
<PAGE>

         agreement with such certificate (provided that failure by XLCA to make
         such confirmation prior to the proposed Restricted Payment Date shall
         be deemed to be such confirmation).

                  (b) If there shall have occurred and be continuing a Project
Event of Default or an Inchoate Project Block Condition in respect of any
Project Company, the Issuer shall reduce the Restricted Payment to be made by it
pursuant to Section 4.5(a) of this Agreement by an amount equal to the Project
Company Blocked Amount for such Project Company. Subject to Section 4.5(d), such
Project Company Blocked Amount shall be deemed to be Account Funds in the
Distribution Account not disbursed within 30 days after an Annual Scheduled
Payment Date and, accordingly, the Collateral Agent shall direct the Depositary
Agent to promptly transfer such Project Company Blocked Amount to the Revenue
Account to be applied in accordance with the Depositary Agreement in the same
manner as Account Funds in the Distribution Account that are not disbursed in
accordance with Section 4.6.2 of the Depositary Agreement by the 30th day
following an Annual Scheduled Payment Date.

                  (c) Notwithstanding anything to the contrary in Section
4.5(a), if the Issuer is not permitted to make a Restricted Payment pursuant to
Section 4.5(a) on any Initial Restricted Payment Date solely because of an
Inchoate Block Condition:

                  (i) the amount of the Restricted Payment that the Issuer would
         have been permitted to make pursuant to Section 4.5(a) had no such
         Inchoate Block Condition been continuing on such Initial Restricted
         Payment Date (the "Blocked Restricted Payment Amount") shall not be
         transferred from the Distribution Account to the Revenue Account until
         the earlier of the end of the Subsequent Restricted Payment Period and
         the occurrence of an Issuer Event of Default (at which time the Blocked
         Restricted Payment Amount or any part thereof not previously applied as
         permitted by Section 4.5(c)(ii) shall be deemed to be Account Funds in
         the Distribution Account not disbursed within 30 days after an Annual
         Scheduled Payment Date and, accordingly, the Collateral Agent shall
         direct the Depositary Agent to promptly transfer the Blocked Restricted
         Payment Amount or such part thereof to the Revenue Account to be
         applied in accordance with the Depositary Agreement in the same manner
         as Account Funds in the Distribution Account that are not disbursed in
         accordance with Section 4.6.2 of the Depositary Agreement by the 30th
         day following an Annual Scheduled Payment Date); and

                  (ii) prior to the end of the Subsequent Restricted Payment
         Period, and only if such Inchoate Block Condition shall have been cured
         by, or on behalf of, the Issuer or shall have been waived by the
         Controlling Party prior to maturing into or becoming an Issuer Event of
         Default, the Issuer may use the Blocked Restricted Payment Amount to
         make a Restricted Payment; provided that the conditions set forth in
         Section 4.5(a)(i) through (v) are satisfied (the date upon which such
         payment is made, the "Subsequent Restricted Payment Date").

                  (d) Notwithstanding anything to the contrary in Section
4.5(b), if the Issuer is not permitted to make a Restricted Payment pursuant to
Section 4.5(b) on any Initial Restricted Payment Date solely because of an
Inchoate Project Block Condition:

                                       16
<PAGE>

                  (i) the Project Company Blocked Amount shall not be
         transferred from the Distribution Account to the Revenue Account until
         the earlier of the end of the Subsequent Project Restricted Payment
         Period and the occurrence of a Project Event of Default (at which time
         the Project Company Blocked Amount or any part thereof not previously
        applied as permitted by Section 4.5(d)(ii) shall be deemed to be
         Account Funds in the Distribution Account not disbursed within 30 days
         after an Annual Scheduled Payment Date and, accordingly, the Collateral
         Agent shall direct the Depositary Agent to promptly transfer the
         Project Company Blocked Amount or such part thereof to the Revenue
         Account to be applied in accordance with the Depositary Agreement in
         the same manner as Account Funds in the Distribution Account that are
         not disbursed in accordance with Section 4.6.2 of the Depositary
         Agreement by the 30th day following an Annual Scheduled Payment Date);
         and

                  (ii) prior to the end of the Subsequent Project Restricted
         Payment Period, and only if such Inchoate Project Block Condition shall
         have been cured by, or on behalf of, the relevant Project Company or
         shall have been waived by the Controlling Party prior to maturing into
         or becoming a Project Event of Default, the Issuer may use the Project
         Company Blocked Amount to make a Restricted Payment; provided that the
         conditions set forth in Section 4.5(a)(i) through (v) are satisfied
         (the date upon which such payment is made, the "Subsequent Project
         Restricted Payment Date").

                  (e) Even if all of the conditions set forth in Section 4.5(a)
or 4.5(b) of this Agreement have not been satisfied as of a proposed Restricted
Payment Date, the Issuer may make distributions ("Tax Distributions") for
Federal, state or local income tax payments in an amount not to exceed the
amount that the Issuer and the Project Companies would be required to pay if
such Persons were tax paying entities forming a consolidated group for Federal
income tax purposes or a similar consolidated, combined or unitary group for
state or local income tax purposes (the "Tax Group"), which amount shall be
assumed to equal the product of (A) the net income of the Tax Group for Federal,
state or local income tax purposes multiplied by (B) the highest marginal
Federal, state or local income tax rate at the time applicable to "C"
corporations; provided that the net income of the Tax Group shall be calculated
based on the assumption that the Tax Group is not part of any other consolidated
group (or similar group for state or local income tax purposes) and that all of
the Tax Group's tax attributes and benefits (including, without limitation,
deductions, credits, refunds, carryovers and carrybacks) shall be applied solely
with respect to the Tax Group's income; and provided, further, that no Tax
Distribution pursuant to this Section 4.5(e) shall be permitted, if an Issuer
Event of Default or Issuer Inchoate Default has occurred and is continuing or
would result from such Tax Distributions.

                  (f) Notwithstanding anything to the contrary in Section
4.5(e), if the Issuer is not permitted to make a Tax Distribution pursuant to
Section 4.5(e) solely because there shall be continuing an Issuer Inchoate
Default:

                  (i) the amount of the Tax Distribution that the Issuer would
         have been permitted to make pursuant to Section 4.5(e) had no such
         Issuer Inchoate Default been continuing (the "Tax Distribution Amount")
         shall not be transferred from the Distribution Account to the Revenue
         Account until the earlier of the end of the Subsequent Tax

                                       17
<PAGE>

         Payment Period and the occurrence of an Issuer Event of Default (at
         which time the Tax Distribution Amount or any part thereof not
         previously applied as permitted by Section 4.5(f)(ii) shall be deemed
         to be Account Funds in the Distribution Account not disbursed within 30
         days after an Annual Scheduled Payment Date and, accordingly, the
         Collateral Agent shall direct the Depositary Agent to promptly transfer
         the Tax Distribution Amount or such part thereof to the Revenue Account
         to be applied in accordance with the Depositary Agreement in the same
         manner as Account Funds in the Distribution Account that are not
         disbursed in accordance with Section 4.6.2 of the Depositary Agreement
         by the 30th day following an Annual Scheduled Payment Date); and

                  (ii) prior to the end of the Subsequent Tax Payment Period,
         and only if such Issuer Inchoate Default shall have been cured by, or
         on behalf of, the Issuer or shall have been waived by the Controlling
         Party prior to maturing into or becoming an Issuer Event of Default,
         the Issuer may use the Tax Distribution Amount to make a Tax
         Distribution in the amount set forth, and in the manner contemplated,
         in Section 4.5(e).

                  (g) Notwithstanding anything to the contrary herein or in any
other Financing Document, neither (i) Excluded Revenues nor (ii) amounts payable
to, or permitted to be disbursed to, NRG Energy pursuant to the Depositary
Agreement shall constitute Restricted Payments subject to this Section 4.5 and
such Excluded Revenues and amounts shall be permitted to be disbursed to NRG
Energy or any Affiliate thereof without regard for the conditions set forth in
this Section 4.5.

         4.6 Investments. The Issuer shall not make any investments (whether by
purchase of stocks, bonds, notes or other securities, loan, extension of credit,
advance or otherwise) other than (a) Permitted Investments made pursuant to
Section 5.1 of the Depositary Agreement, and (b) the investments provided for in
the Financing Documents.

         4.7 Transactions With Affiliates. The Issuer shall not enter into any
transaction or agreement (or any transaction under or pursuant to any
transaction or agreement) with any of its Affiliates other than (a) transactions
provided for in or expressly permitted by the Financing Documents, (b)
transactions or agreements certified by a Responsible Officer of the Issuer as
having terms that are not materially less favorable than the terms the Issuer
would obtain in an arm's-length transaction with a person that is not an
Affiliate, or (c) transactions or agreements between or among only the Issuer
and/or the Project Companies not otherwise prohibited by the terms of any
Financing Document.

         4.8 ERISA. The Issuer shall not establish, maintain, contribute to or
become obligated to contribute to any ERISA Plan.

         4.9 Liquidation; Amendment of Organizational Documents.

                  (a) The Issuer shall not liquidate or dissolve itself (or
suffer any liquidation or dissolution) or amend its organizational documents in
any material respect (except, in respect of such amendment of its organizational
documents, (i) as required to comply with the "special purpose entity"
requirements or similar criteria of any Rating Agency or (ii) in connection with
a Permitted Change of Control).

                                       18
<PAGE>

                  (b) Section 9.01 of the Indenture shall govern the Issuer's
rights in respect of the transactions expressly referred to in such Section 9.01
(and reference is made herein to Section 9.01(4) of the Indenture and the right
of XLCA (at any time when there is no Insurer Default) to consent, in its
absolute discretion, to any transaction referred to therein prior to its
consummation). Upon any consolidation of the Issuer with, or merger of the
Issuer into, any other Person in accordance with Section 9.01 of the Indenture,
the successor Person formed by such consolidation or into which the Issuer is
merged or to which any conveyance, transfer or lease is made in accordance with
Section 9.01 of the Indenture shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Agreement and the other
Financing Documents with the same effect as if such successor Person had been
named as the Issuer in this Agreement and the other Financing Documents, and
thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under the Financing Documents.

         4.10 Accounts. The Issuer shall not maintain, establish or use any
bank, deposit or securities accounts other than the Accounts and the Closing
Date Account.

         4.11 Name and Location; Fiscal Year. The Issuer shall not (a) change
its name, the location of its principal place of business, the location of the
Issuer Collateral, its jurisdiction of organization or its organizational
identification number without notice to the Collateral Agent at least 30 days
prior to such change, or (b) for so long as XLCA is the Controlling Party,
change its fiscal year without XLCA's prior written consent.

         4.12 Assignment. The Issuer shall not assign its rights or obligations
hereunder or under any other Financing Documents, except as expressly permitted
under this Agreement.

         4.13 No SEC Registration. The Issuer shall not, and shall not permit
any Person acting on its behalf to, subject the offering, issuance or sale of
the Series A Bonds to Section 5 of the Securities Act.

                                   ARTICLE 5
                     NEGATIVE COVENANTS OF PROJECT COMPANIES

                  Each Project Company covenants and agrees that it shall
perform the covenants set forth in this Article 5, only with respect to itself
and its Project (unless waived in accordance with Section 9.2 of this
Agreement). The covenants set forth in this Article 5 that expressly require
performance only by a specified Project Company shall be required to be
performed only by such Project Company (unless such performance is waived in
accordance with Section 9.2 of this Agreement).

         5.1 Contingent Liabilities. Except for the consummation of the
transactions pursuant to this Agreement and the other Financing Documents, such
Project Company shall not become liable as a surety, guarantor, accommodation
endorser or otherwise, for or upon the obligation of any other Person; provided,
however, that this Section 5.1 shall not be deemed to prohibit the incurrence,
creation, assumption or existence of Project Company Permitted Debt or Project
Company Permitted Liens.

                                       19
<PAGE>

         5.2 Liens. Such Project Company shall not create, assume or suffer to
exist any Lien securing a charge or obligation on any of its Project Company
Collateral, whether now owned or hereafter acquired, except Project Company
Permitted Liens.

         5.3 Indebtedness. Such Project Company shall not incur, create, assume
or permit to exist any Debt, except Project Company Permitted Debt.

         5.4 Asset Dispositions. Such Project Company shall not sell, lease (as
lessor), license (as licensor), assign, pledge, transfer or otherwise dispose of
any of its assets (including any Project Company Collateral), whether now owned
or hereafter acquired, other than (a) sales of goods, products and/or services
in the ordinary course of business as contemplated by its Project Documents, (b)
sales of assets that are replaced with substantially similar assets, (c) sales
for fair market value of worn out or obsolete assets, or of surplus assets or
land, that are not useful or necessary in connection with the development,
construction, ownership, leasing, operation, maintenance or use of its Project,
in an aggregate amount (over the entire term of this Agreement) not to exceed
$10,000,000 (provided that such aggregate amount shall be increased from time to
time by reference to the United States Department of Labor Consumer Price
Index), (d) sales or transfers of assets required by the terms of its Project
Documents (provided that the Bayou Cove Project Company shall not be permitted
to transfer the entire Site of the Bayou Cove Project pursuant to the Bayou Cove
EPC Agreement (Interconnection Facilities)), and (e) in connection with a
Permitted Peaker Buyout, provided that this Section 5.4 shall not be deemed to
prohibit the grant or creation of any Project Company Permitted Liens. If a
Project Company is permitted to dispose of assets pursuant to this Section 5.4,
as certified to the Collateral Agent by a Responsible Officer of such Project
Company, the Collateral Agent shall then take all actions reasonably requested
by such Project Company in writing in order to release the Liens of the
Collateral Agent on such assets (including the execution of UCC-3 termination
statements and deeds of reconveyance).

         5.5 Business Activities. Such Project Company shall not engage in any
activities other than (a) the development, ownership, leasing, construction,
operation, maintenance and use of its Project as contemplated by the Operative
Documents, (b) other activities expressly permitted by the Financing Documents,
and (c) activities reasonably incidental thereto. Such Project Company shall not
make any alterations, modifications, renovations or improvements to its Project
other than those that (i) are required to comply with Legal Requirements or (ii)
are in accordance with Prudent Utility Practices.

         5.6 Subsidiaries, etc.; Investments.

                  (a) Subsidiaries, etc. Such Project Company shall not (a)
create or acquire any Subsidiary, (b) become a general or limited partner in any
partnership or a member in any limited liability company, (c) become a joint
venturer in any joint venture, or (d) create or hold any equity interests in any
other Person.

                  (b) Investments. Such Project Company shall not make any
investments (whether by purchase of stocks, bonds, notes or other securities,
loan, extension of credit, advance or otherwise) other than (i) Permitted
Investments in accordance with Article V of the

                                       20
<PAGE>

Depositary Agreement and (ii) other investments expressly permitted in the
Financing Documents.

         5.7 Distributions. Such Project Company shall not directly or
indirectly (a) make or declare any distribution (in cash, property or
obligation) on, or make any other payment on account of, any equity interest in
Project Company, (b) make any payment in respect of Subordinated Debt, or (c)
make any other payment from the Distribution Account (whether to a Project
Company, any Affiliate of the Issuer or any Project Company or any other Person)
other than distributions or payments from the Distribution Account in accordance
with Section 4.6.2 of the Depositary Agreement and Section 4.5 of this
Agreement.

         5.8 Transactions With Affiliates. Such Project Company shall not enter
into any transaction or agreement with any of its Affiliates, other than (a)
transactions provided for in or expressly permitted by the Operative Documents,
(b) transactions or agreements between or among only the Issuer and/or the other
Project Companies not otherwise prohibited by the terms of any Financing
Document, or (c) transactions or agreements certified to the Controlling Party
by a Responsible Officer of such Project Company as having terms that are not
materially less favorable to such Project Company than the terms such Project
Company would obtain in an arm's-length transaction with a Person that is not
its Affiliate; provided that, in respect of each transaction or agreement
permitted pursuant to paragraph (c) of this Section 5.8, Project Company shall
perform its obligations and exercise its rights under any such transaction or
agreement as if such transaction or agreement was an arm's-length transaction
with a Person that is not its Affiliate.

         5.9 ERISA. Such Project Company shall not establish, maintain,
contribute to or become obligated to contribute to any ERISA Plan.

         5.10 Merger or Consolidation; Liquidation; Amendment of Organizational
Documents.

         (a) Such Project Company shall not consolidate with or merge into any
other Person or permit any Person to consolidate with or merge into such Project
Company or convey, transfer or lease its properties and assets substantially as
an entirety to such Project Company, unless:

                  (i) immediately after giving effect to such transaction, no
         Project Company Event of Default or Project Inchoate Default with
         respect to such Project Company shall have occurred and be continuing;

                  (ii) if, as a result of any such consolidation, merger or
         conveyance, transfer or lease, properties or assets of such Project
         Company other than the Collateral would become subject to a mortgage,
         pledge, lien, security interest or other encumbrance that would not be
         permitted by this Agreement, such Project Company or such successor
         Person, as the case may be, shall take such steps as shall be necessary
         effectively to secure the Bonds of each series equally and ratably with
         (or prior to) all indebtedness secured thereby;

                  (iii) such Project Company has delivered to the Trustee, with
         a copy to XLCA, an Officer's Certificate (as such term is defined in
         the Indenture) and an Opinion of

                                       21
<PAGE>

         Counsel (as such term is defined in the Indenture), each stating that
         such consolidation, merger, conveyance, transfer or lease and, if a
         supplemental indenture is required in connection with such transaction,
         such supplemental indenture complies with Article Nine of the Indenture
         and that all conditions precedent in this Agreement and the Indenture
         provided for relating to such transaction have been complied with; and

                  (iv) at any time when XLCA is the Controlling Party, XLCA
         consents in writing, in its absolute discretion, to such transaction
         prior to the consummation thereof.

                  (b) Upon any consolidation of such Project Company with, or
merger of the Project Company into, any other Person in accordance with Section
5.10(a), the successor Person formed by such consolidation or into which such
Project Company is merged shall succeed to, and be substituted for, and may
exercise every right and power of, such Project Company under this Agreement and
the other Financing Documents with the same effect as if such successor Person
had been named as such Project Company in this Agreement and the other Financing
Documents, and thereafter the predecessor Person shall be relieved of all
obligations and covenants under the Financing Documents.

                  (c) Such Project Company shall not liquidate or dissolve
itself (or suffer any liquidation or dissolution) or amend its organizational
documents in any material respect (except, in respect of such amendment of its
organizational documents, (i) as required to comply with the "special purpose
entity" requirements or similar criteria of any Rating Agency and (ii) in
connection with a Permitted Change of Control).

                  (d) Nothing in this Section 5.10 shall be deemed to prohibit
any Permitted Peaker Buyout or Permitted Change of Control.

         5.11 Amendments to Project Documents. Such Project Company shall not
terminate, assign its rights under, amend, modify, supplement or waive, or
permit or consent to the termination, amendment, modification, supplement or
waiver of, any provision of, or give any consent under (any such action, a
"Project Document Action") (a) Section 2.2.2, 2.2.3, 3.2 or 3.3 of the Fuel and
Power Marketing Plan attached to the Power Sales and Agency Agreement to which
such Project Company is a party or any requirement under such Power Sales and
Agency Agreement that such Project Company or NRG Power Marketing comply with
such Fuel and Power Marketing Plan (i) if XLCA is the Controlling Party, without
the written consent of XLCA (which consent shall be given or withheld in XLCA's
absolute discretion), or (ii) if XLCA is not the Controlling Party, if such
Project Document Action could reasonably be expected to have a Project Material
Adverse Effect, and (b) any of its other Major Project Documents if such Project
Document Action could reasonably be expected to have a Project Material Adverse
Effect.

         5.12 Accounts. Project Company shall not maintain, establish or use any
bank, deposit or securities accounts other than (a) the Accounts, and (b) such
other local bank, deposit or securities accounts as shall be necessary to
facilitate the performance by the Bayou Cove Project Company and the Rockford II
Project Company of their obligations under Section 3.14 and/or the performance
by NRG Energy of its obligations under Section 2.5 of the Contingent Equity
Guaranty.

                                       22
<PAGE>

         5.13 Name and Location; Fiscal Year. Such Project Company shall not (a)
change its name, the location of its principal place of business, the location
of its Project Company Collateral, its jurisdiction of organization or its
organizational identification number without notice to the Collateral Agent at
least 30 days prior to such change, or (b) for so long as XLCA is the
Controlling Party, change its fiscal year without XLCA's written consent.

         5.14 Assignment. Such Project Company shall not assign its rights or
obligations hereunder or under any of the other Financing Documents to which it
is a party, except as expressly permitted under this Agreement.

         5.15 Acquisition of Real Property. Such Project Company shall not
acquire or lease any real property or other interest in real property (excluding
(x) the acquisition (but not the exercise) of any options to acquire any such
interests in real property and (y) the acquisition of any Easements related
thereto) unless: (a) it shall have delivered to the Collateral Agent (i) an
environmental indemnity agreement, in form and substance reasonably satisfactory
to XLCA (or if XLCA shall not be the Controlling Party, an independent
environmental consultant), pursuant to which, among other things, an indemnitor
reasonably satisfactory to XLCA (or if XLCA shall not be the Controlling Party,
an independent environmental consultant)) indemnifies the Issuer, such Project
Company and the Secured Parties from any and all claims, losses, diminutions in
value of such real property, damages or other liabilities related to or arising
from Hazardous Substances then in, on or under such real property or otherwise
caused by or attributable to such indemnitor; or (ii) an environmental insurance
policy, in form and substance, and from an insurance carrier, reasonably
satisfactory to XLCA (or, if XLCA is not the Controlling Party, an independent
environmental consultant), which provides the same protection as described for
the environmental indemnity agreement above or (b) (i) it shall have delivered
to the Collateral Agent a Phase I environmental report prepared by an
environmental consultant reasonably satisfactory to XLCA (or if XLCA shall not
be the Controlling Party, an independent environmental consultant) with respect
to such real property in accordance with ASTM standards, (along with a
corresponding reliance letter from the environmental consultant in form and
substance reasonably satisfactory to XLCA (or if XLCA shall not be the
Controlling Party, an independent environmental consultant)), stating that there
is no evidence of a Release or threatened Release that could reasonably be
expected to result in a future Release of any Hazardous Substance in, on, under
or at such real property and that no additional investigation (including a Phase
II environmental assessment) is recommended, and (ii) if evidence was found of a
Release or threatened Release that could reasonably be expected to result in a
future Release of any Hazardous Substance in, on, under or at such real property
or an additional investigation (including a Phase II environmental assessment)
is recommended in such Phase I environmental report, it shall have delivered to
the Collateral Agent a Phase II environmental report (or other recommended
investigation) with respect to such real property, pursuant to a scope of work
reasonably satisfactory to XLCA (or if XLCA shall not be the Controlling Party,
an independent environmental consultant) (along with a corresponding reliance
letter from the environmental consultant in form and substance reasonably
satisfactory to XLCA (or if XLCA shall not be the Controlling Party, an
independent environmental consultant)), confirming, to the reasonable
satisfaction of XLCA (or if XLCA shall not be the Controlling Party, an
independent environmental consultant)), either (A) that no Release or threatened
Release of any Hazardous Substance has occurred in, on, under or at such real
property, or (B) if a Release or threatened Release that could reasonably be
expected to result in a future Release of any Hazardous

                                       23
<PAGE>

Substance has occurred in, on, under or at such real property, that such Release
or threatened Release that could reasonably be expected to result in a future
Release of any Hazardous Substances either does not trigger any reporting or
remediation obligations under Hazardous Substances Law or has been remediated to
acceptable levels under Hazardous Substances Law.

         5.16 Additional Project Documents.

                  (a) Such Project Company shall not enter into or become a
party to any Additional Project Document to the extent that the execution,
delivery or performance of such Additional Project Document could reasonably be
expected to have a Project Material Adverse Effect.

                  (b) If such Project Company enters into any Major Project
Document, such Project Company shall deliver to the Collateral Agent a Consent
from the third party under such Major Project Document in substantially the form
of Exhibit 3.1(f)(ii) to the Insurance and Reimbursement Agreement.

         5.17 Use of Project Site. Such Project Company shall not use, or permit
to be used, its Site for any purpose other than as contemplated by the Operative
Documents to which it is a party.

         5.18 Hazardous Substances. Such Project Company shall not, and shall
not allow any of its Affiliates, contractors or agents, or any other Person with
the consent, or under the control of, such Project Company or any of its
Affiliates, contractors or agents, to Release any Hazardous Substances in
violation of any Hazardous Substances Law or other Legal Requirement if such
Release could reasonably be expected to have a Project Material Adverse Effect.

                                   ARTICLE 6
                                    GUARANTY

         6.1 Guaranty.

                  (a) Each Project Company, as primary obligor and not merely as
surety, absolutely, unconditionally and irrevocably and jointly and severally
with each other Project Company guarantees to the Secured Parties the full and
punctual payment when due, whether at stated maturity, by acceleration or
otherwise, of all of the Bond Obligations, the Reimbursement Obligations and the
Swap Obligations of the Issuer under the Financing Documents, together with the
payment in full of all fees and expenses incurred by the Collateral Agent or any
other Secured Party in enforcing any such Obligations or the terms hereof,
including reasonable fees and expenses of its legal counsel and agents
(collectively, the "Guaranteed Obligations"), and agrees that if, for any
reason, the Issuer shall fail to pay when due any of the Guaranteed Obligations,
such Project Company will pay the same forthwith. Each Project Company waives
notice of acceptance of its Guaranty and of any obligation to which it applies
or may apply under the terms hereof, and waives promptness, diligence,
presentment, demand of payment or performance, notice of dishonor or non-payment
or non-performance, protest, or notice of protest, of any such obligations, suit
or taking other action by any Secured Party against, and

                                       24
<PAGE>

giving any notice of default or other notice to, or making any demand on, any
party liable thereon (including any Project Company).

                  (b) If, notwithstanding the representation and warranty set
forth in Section 2.2(aa) of the Insurance and Reimbursement Agreement or
anything to the contrary herein, enforcement of the liability of any Project
Company under its Guaranty for the full amount of the Guaranteed Obligations
would be an unlawful or voidable transfer under any applicable fraudulent
conveyance or fraudulent transfer law or any comparable law, then the liability
of such Project Company hereunder shall be reduced to the highest amount for
which such liability may then be enforced without giving rise to an unlawful or
voidable transfer under any such law.

         6.2 Guaranty Absolute. The Guaranty of each Project Company is a
primary obligation of such Project Company and is an absolute, unconditional,
continuing and irrevocable guaranty of payment in full in cash of the Guaranteed
Obligations and not of collectibility, and is in no way conditioned on or
contingent upon any attempt to enforce in whole or in part the Issuer's
liabilities and obligations to the Secured Parties. If the Issuer shall fail to
pay in full in cash any of the Guaranteed Obligations to any Secured Party as
and when they are due, the Project Companies shall forthwith pay such Guaranteed
Obligations immediately (in immediately available funds in Dollars) to an
account designated by the Collateral Agent. Each failure by the Issuer to pay
any Guaranteed Obligation strictly in accordance with the terms of each
Financing Document under which such Guaranteed Obligation arises, regardless of
any Legal Requirement now or hereafter in effect in any jurisdiction, shall give
rise to a separate cause of action herewith, and separate suits may be brought
hereunder as each cause of action arises.

         6.3 Rights and Obligations Absolute and Unconditional. All rights of
the Secured Parties and all obligations of each Project Company in respect of
its Guaranty hereunder shall be absolute and unconditional irrespective of:

                  (a) any lack of validity, legality or enforceability of any
Financing Document;

                  (b) the failure of any Secured Party:

                  (i) to assert any claim or demand or to enforce any right or
         remedy against the Issuer, any Project Company or any other Person
         (including any other guarantor) under the provisions of any Financing
         Document or otherwise, or

                  (ii) to exercise any right or remedy against any other
         guarantor of, or collateral securing, any of the Obligations;

                  (c) any change in the time, manner or place of payment of, or
in any other term of, any of the Obligations, or any other extension or renewal
of any obligation of the Issuer or any Project Company;

                  (d) any reduction, limitation, impairment or termination of
any of the Obligations for any reason (other than the written agreement of all
of the Secured Parties to terminate the Obligations in full), including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to, and Project Company hereby waives any right to or

                                       25
<PAGE>

claim of, any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or occurrence
affecting, any obligation of the Issuer, any Project Company or otherwise, other
than Project Company's indefeasible payment in full of the Guaranteed
Obligations;

                  (e) any amendment to, rescission, waiver or other modification
of, or any consent to departure from, any of the terms of any Financing Document
other than its Guaranty;

                  (f) any addition, exchange, release, surrender or
non-perfection of any collateral, or any amendment to or waiver or release or
addition of, or consent to departure from, any other security interest held by
any Secured Party securing any of the Obligations;

                  (g) any sale, exchange, release or surrender of, realization
upon or other manner or order of dealing with any property by whomsoever pledged
or mortgaged to secure or howsoever securing the Obligations or any liabilities
or obligations (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof and/or any offset there against;

                  (h) the application of any sums by whomsoever paid or
howsoever realized to any obligations and liabilities of the Issuer or any
Project Company to the Secured Parties under the Financing Documents in the
manner provided therein regardless of what obligations and liabilities remain
unpaid;

                  (i) any action or failure to act in any manner referred to in
this Guaranty which may deprive Project Company of its right to subrogation
against the Issuer or any other Project Company to recover full indemnity for
any payments or performances made pursuant to its Guaranty or of its right of
contribution against any other party; or

                  (j) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the Issuer, any
Project Company, any surety or any guarantor.

         6.4 Guaranty Continuing. Each Project Company's Guaranty is a
continuing Guaranty and all obligations to which it applies or may apply under
the terms hereof shall be conclusively presumed to have been created in reliance
hereon. In the event that, notwithstanding the provisions of Section 6.1, any
Project Company's Guaranty shall be deemed revocable in accordance with
applicable Legal Requirements, then any such revocation shall become effective
only upon receipt by the Collateral Agent of written notice of revocation signed
by such Project Company. No revocation or termination hereof shall affect in any
manner rights arising under any Project Company's Guaranty with respect to
Guaranteed Obligations arising prior to receipt by the Collateral Agent of
written notice of such revocation or termination.

         6.5 Waivers. Each Project Company hereby waives and relinquishes all
rights and remedies accorded by applicable law to sureties or guarantors and
agrees not to assert or take advantage of any such rights or remedies, including
(a) any right to require the Collateral Agent or any other Secured Party to
proceed against the Issuer, any Project Company or any other Person or to
proceed against or exhaust any security held by the Collateral Agent or any
other

                                       26
<PAGE>

Secured Party at any time or to pursue any other remedy in the Collateral
Agent's or any other Secured Party's power before proceeding against such
Project Company, (b) any defense that may arise by reason of the incapacity,
lack of power or authority, dissolution, merger, termination or disability of
the Issuer, any Project Company or any other Person or the failure of the
Collateral Agent or any other Secured Party to file or enforce a claim against
the estate (in administration, bankruptcy or any other proceeding) of the
Issuer, any Project Company or any other Person, (c) demand, presentment,
protest and notice of any kind except as provided herein, including notice of
the existence, creation or incurring of any new or additional indebtedness or
obligation or of any action or non-action on the part of the Issuer, any Project
Company, the Collateral Agent, any other Secured Party, any endorser or creditor
of the Issuer, any Project Company or on the part of any other Person under this
or any other instrument in connection with any obligation or evidence of
indebtedness held by the Collateral Agent or any other Secured Party as
collateral or in connection with any Guaranteed Obligation, (d) any defense
based upon an election of remedies by the Collateral Agent or any other Secured
Party, including an election to proceed by non-judicial rather than judicial
foreclosure, which destroys or otherwise impairs the subrogation rights of any
Project Company, the right of any Project Company to proceed against the Issuer
or any other Project Company for reimbursement, or both, (e) any defense based
on any offset against any amounts which may be owed by any Person to any Project
Company for any reason whatsoever, (f) any defense based on any act, failure to
act, delay or omission whatsoever on the part of the Issuer or any Project
Company or the failure by the Issuer or any Project Company to do any act or
thing or to observe or perform any covenant, condition or agreement to be
observed or performed by it under the Financing Documents, (g) any defense based
upon any statute or rule of law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than that
of the principal; provided that, upon payment or performance in full of the
Guaranteed Obligations, a Project Company's Guaranty shall no longer be of any
force or effect, (h) any defense, setoff or counterclaim which may at any time
be available to or asserted by the Issuer or any Project Company against the
Collateral Agent, any other Secured Party or any other Person under the
Financing Documents, (i) any duty on the part of the Collateral Agent or any
other Secured Party to disclose to any Project Company any facts the Collateral
Agent or any other Secured Party may now or hereafter know about the Issuer or
any Project Company, regardless of whether the Collateral Agent or such Secured
Party have reason to believe that any such facts materially increase the risk
beyond that which any Project Company intends to assume, or have reason to
believe that such facts are unknown to any Project Company, or have a reasonable
opportunity to communicate such facts to any Project Company, since each Project
Company acknowledges that it is fully responsible for being and keeping informed
of the financial condition of the Issuer and the Project Companies and of all
circumstances bearing on the risk of non-payment or non-performance of any
obligations and liabilities hereby guaranteed, (j) any defense based on any
change in the time, manner or place of any payment or performance under, or in
any other term of, the Financing Documents or any other amendment, renewal,
extension, acceleration, compromise or waiver of or any consent or departure
from the terms of the Financing Documents, (k) any defense arising because of
the Collateral Agent's or any other Secured Party's election, in any proceeding
instituted under the Federal Bankruptcy Code, of the application of Section
1111(b)(2) of the Federal Bankruptcy Code, and (l) any defense based upon any
borrowing or grant of a security interest under Section 364 of the Federal
Bankruptcy Code.

                                       27
<PAGE>

         6.6 Acknowledgments. Each Project Company acknowledges that it has been
provided with a copy of each of the Financing Documents and has read and is
familiar with the provisions of each of the Financing Documents.

         6.7 Subordination. All existing and future indebtedness of, or other
obligation owed by, the Issuer or any Project Company to any other Project
Company is hereby subordinated to all of the Guaranteed Obligations on the same
terms as required in respect of subordinated Debt of the Issuer and the Project
Companies pursuant to this Agreement as set forth in Exhibit H to this
Agreement.

         6.8 Subrogation. So long as the Financing Documents remain in effect
and until all of the Guaranteed Obligations have been paid in full, (a) no
Project Company shall have any right of subrogation and each Project Company
waives all rights to enforce any remedy which the Secured Parties now have or
may hereafter have against the Issuer or any other Project Company, and waives
the benefit of, and all rights to participate in, any security now or hereafter
held by the Collateral Agent or any other Secured Party from the Issuer or any
of the Project Companies, and (b) each Project Company waives any claim, right
or remedy which it may now have or hereafter acquire against the Issuer or any
other Project Company that arises hereunder and/or from the performance by it
hereunder, including any claim, remedy or right of subrogation, reimbursement,
exoneration, contribution, indemnification, or participation in any claim, right
or remedy of the Secured Parties against the Issuer or any Project Company, or
any security which the Secured Parties now have or hereafter acquire, whether or
not such claim, right or remedy arises in equity, under contract, by statute,
under common law or otherwise. Any amount paid to any Project Company on account
of any such subrogation rights prior to the indefeasible payment in full in cash
of the Obligations (including the Guaranteed Obligations) and the termination of
all other obligations of the Secured Parties under the Financing Documents shall
be held in trust for the benefit of the Collateral Agent and shall immediately
thereafter be paid to the Collateral Agent for the benefit of the Secured
Parties.

         6.9 Bankruptcy.

         (a) So long as the Financing Documents remain in effect and until all
of the Obligations have been paid in full, none of the Project Companies shall,
without the prior written approval of the Controlling Party, commence, or join
with any other Person in commencing, any bankruptcy, reorganization, or
insolvency proceeding against the Issuer or any other Project Company. The
obligations of each Project Company under its Guaranty shall not be altered,
limited or affected by any proceeding, voluntary or involuntary, involving the
bankruptcy, reorganization, insolvency, receivership, liquidation or arrangement
of the Issuer, NRG Energy or any Project Company, or by any defense which the
Issuer or any other Project Company may have by reason of any order, decree or
decision of any court or the administrative body resulting from any such
proceeding.

         (b) So long as the Financing Documents remain in effect and until all
of the Guaranteed Obligations have been paid in full, to the extent of any
Guaranteed Obligation, each Project Company shall file, in any bankruptcy or
other proceeding in which the filing of claims is required or permitted by Legal
Requirements, all claims which such Project Company may have against the Issuer
or any other Project Company related to any indebtedness of the Issuer or any

                                       28
<PAGE>

Project Company to such Project Company, and hereby assigns to the Collateral
Agent, on behalf of the Secured Parties, all rights of such Guarantor
thereunder. If any Project Company fails to file any such claim, the Collateral
Agent, as attorney-in-fact for such Project Company, is hereby authorized to do
so in the name of such Project Company or, in the Collateral Agent's discretion,
to assign the claim to a nominee and to cause proofs of claim to be filed in the
name of the Collateral Agent's nominee. The foregoing power of attorney is
coupled with an interest and cannot be revoked. The Collateral Agent or its
nominee shall have the sole right to accept or reject any plan proposed in any
such proceeding and to take any other action which a party filing a claim is
entitled to take. In all such cases, whether in administration, bankruptcy or
otherwise, the person authorized to pay such a claim shall pay the same to the
Collateral Agent to the extent of any Guaranteed Obligation which then remain
unpaid, and, to the full extent necessary for that purpose, each Project Company
hereby assigns to the Collateral Agent all of such Project Company's rights to
all such payments or distributions to which such Project Company would otherwise
be entitled; provided, however, that such Project Company's obligations
hereunder shall not be satisfied except to the extent that the Collateral Agent
receives cash by reason of any such payment or distribution. If the Collateral
Agent receives anything hereunder other than cash, the same shall be held as
collateral for amounts due under this Guaranty.

         6.10 Interest; Collection Expenses. Any amount required to be paid by
any Project Company pursuant to the terms of its Guaranty shall bear interest at
the Late Payment Rate or the maximum rate permitted by Legal Requirements,
whichever is less, from the date due until paid in full. If the Collateral Agent
or any other Secured Party is required to pursue any remedy against any Project
Company, such Project Company shall pay to the Collateral Agent or such Secured
Party, as the case may be, upon demand, all reasonable attorneys' fees and
expenses all other costs and expenses incurred by the Collateral Agent or such
Secured Party in enforcing its Guaranty.

         6.11 Reinstatement of Guaranty. Each Project Company's Guaranty and its
obligations of the Guarantors shall automatically be reinstated if and to the
extent that for any reason any payment made pursuant to its Guaranty is
rescinded or otherwise restored to it, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise with respect to the Issuer or any
other Person or as a result of any settlement or compromise with any Person
(including any Project Company) in respect of such payment, and such Project
Company shall pay the Collateral Agent on demand all of its reasonable costs and
expenses (including reasonable fees of counsel) incurred by the Collateral Agent
in connection with such rescission or restoration.

         6.12 Termination of Guaranty. The Guaranty of a Project Company shall
terminate in its entirety upon the occurrence of a Project Release Event with
respect to such Project Company.

         6.13 Survival. The provisions of this Article 6 shall survive
satisfaction, discharge and/or termination of this Agreement and the other
Financing Documents.

         6.14 Contribution Obligations among Project Companies. In order to
provide for just and equitable contribution among the Project Companies, each
Project Company agrees that if any payment or distribution is made by a Project
Company (a "Funding Project Company")

                                       29
<PAGE>

under its Guaranty, such Funding Project Company shall be entitled to a
contribution from the other Project Companies for all such payments or
distributions, or damages and expenses incurred by such Funding Project Company
in discharging any Guaranteed Obligations. Each Project Company which is not a
Funding Project Company (a "Non-Funding Project Company") shall be liable to a
Funding Project Company with respect to any such payments or distributions, or
damages and expenses, in an aggregate amount equal to (a) the ratio of (i) the
net worth of such Non-Funding Project Company, as determined in accordance with
the most recent balance sheet of such Non-Funding Project Company at the time of
such payment by a Funding Project Company, to (ii) the aggregate net worth of
all Project Companies, similarly determined, multiplied by (b) the amount which
the Funding Project Company paid on account of the Guaranteed Obligations. If at
any time there exists more than one Funding Project Company, then payment from
the other Non-Funding Project Companies pursuant to this Section 6.14 shall be
in an aggregate amount equal in proportion to the total amount of money paid for
or on account of the Guaranteed Obligations by the Funding Project Companies
pursuant to their Guaranties. If the Funding Project Company is required to make
any payment hereunder, such Funding Project Company shall also be entitled to a
right of subrogation in respect of such payment from the other Project
Companies. Notwithstanding anything in this Section 6.14 to the contrary, the
agreements in this Section 6.14 are to establish the relative rights of
contribution of the Project Companies and shall not modify the joint and several
nature of the obligations of each Project Company owed to or for the benefit of
the Secured Parties or impair the rights of the Collateral Agent for the benefit
of the Secured Parties to hold any of the Project Companies liable for payment
of the full amount of all Guaranteed Obligations.

                                   ARTICLE 7
                           EVENTS OF DEFAULT; REMEDIES

         7.1 Issuer Events of Default. The occurrence of any of the following
events shall constitute an "Issuer Events of Default" hereunder:

                  (a) Failure to Make Payments. The Issuer shall fail to pay, in
accordance with the terms of the Financing Documents, (i) any principal of any
Bond Obligation on the date that such principal is due, (ii) any amount in
respect of any Reimbursement Obligation on the date that such amount is due,
(iii) any Swap Payment Amount in accordance with the Swap Agreement, (iv) any
interest on any Bond Obligation, Reimbursement Obligation, Swap Payment Amount
or any scheduled fee, cost, charge or sum due hereunder or under the other
Financing Documents within 3 Business Days after the date that such sum is due,
or (v) any other fee, cost, charge or other sum due hereunder or under the other
Financing Documents within 10 Business Days after the date that such sum is due;
provided that any such failure of the Issuer to pay the amounts described in
this Section 7.1(a) shall not be an Issuer Event of Default if such amounts are
paid (i) by one or more of the Project Companies pursuant to, and in accordance
with, their respective Guaranties, (ii) by NRG Energy (or any other Equity
Party) pursuant to, and in accordance with, the Contingent Guaranty Agreement
(or other Equity Document), or (iii) otherwise with Account Funds from the Debt
Payment Account in accordance with the terms of the Depositary Agreement.

                                       30
<PAGE>

                  (b) Judgments. One or more final judgments for the payment of
money (if such payments are not fully covered by insurance) in excess of
$5,000,000 in the aggregate shall be rendered against the Issuer, and the Issuer
shall not discharge the same or provide for its discharge in accordance with its
terms, or procure a stay of execution thereof, within 60 days after the date of
entry thereof; provided, however, that any such judgment shall not be (and shall
not constitute part of) an Issuer Event of Default under this Section 7.1(b) if
and for so long as (i) the amount of such judgment is fully covered by a valid
and binding policy of insurance between the defendant and the insurer covering
payment thereof and (ii) such insurer has been notified of, and has not disputed
the claim made for payment of, the amount of such judgment.

                  (c) Misstatements; Omissions. Any representation or warranty
by the Issuer set forth in any Financing Document or in any document entered
into in connection therewith in favor of or for the benefit of any Secured Party
or in any certificate, financial statement or other document delivered in
connection therewith for the benefit of any Secured Party shall prove to have
been incorrect in any material respect when made (or deemed made) and the facts
or events underlying such incorrect representation or warranty shall not be
changed so as to correct such representation or warranty in all material
respects for a period of 30 days (or so long as the facts or events underlying
such incorrect representation or warranty are capable of being changed so as to
correct such incorrect representation or warranty in all material respects and
the Issuer is diligently proceeding to change such events or facts, such longer
period but in no event for an aggregate period in excess of 90 days) after a
Responsible Officer of the Issuer becomes aware thereof or the Issuer first
received a notice from or on behalf of the Controlling Party (or XLCA if the
proviso to this Section 7.1(c) applies) specifying such material inaccuracy and
requiring that the facts or events underlying such incorrect representation or
warranty be changed so as to correct such incorrect representation or warranty
in all material respects; provided, however, that any Issuer Event of Default
pursuant to this Section 7.1(c) arising solely from any representation or
warranty made by the Issuer for the benefit of XLCA under the Insurance and
Reimbursement Agreement shall be an Issuer Event of Default in respect of which
no Person other than XLCA shall have the rights given to the parties to this
Agreement in respect of Issuer Events of Default generally.

                  (d) Bankruptcy; Insolvency. The Issuer shall become subject to
a Bankruptcy Event.

                  (e) Debt Cross Default. The Issuer shall default for a period
beyond any applicable grace period (i) in the payment of any principal, interest
or other amount due on any Debt for Borrowed Money of the Issuer (other than the
Obligations) and such defaulted amount, together with any other principal,
interest or other amount due and unpaid on any Debt for Borrowed Money of the
Issuer (other than the Obligations) equals or exceeds $5,000,000 in the
aggregate, or (ii) in the payment of any amount then due or performance of any
obligation then required under any agreement evidencing Debt of the Issuer
(other than the Financing Documents) if, because of such default, the holder of
such Debt accelerates the payment thereof and such accelerated amount, together
with the amount of any other Debt of the Issuer then so accelerated (other than
the Obligations), equals or exceeds $5,000,000 in the aggregate.

                  (f) ERISA. With respect to any ERISA Plan which a member of
the Controlled Group sponsors, maintains, administers, contributes to,
participates in, or has any

                                       31
<PAGE>

obligation to contribute to or any liability under, an event has occurred or a
condition exists which, together with all other such events or conditions, would
reasonably be expected to have an Issuer Material Adverse Effect.

                  (g) Breach of Terms of Financing Documents.

                  (i) The Issuer shall fail to perform or observe any of the
         covenants or other agreements set forth in Sections 2.1 (Use of
         Proceeds and Revenues), 2.6(a)(i) and (c) (Existence, Conduct of
         Business, etc.), or Article 4 (other than Section 4.6 (Investments),
         4.8 (ERISA), 4.10 (Accounts) and 4.11 (Name and Location; Fiscal
         Year)).

                  (ii) The Issuer shall fail to perform or observe any of the
         covenants or other agreements set forth in the Financing Documents
         which are not otherwise specifically provided for in Section 7.1(g)(i)
         or elsewhere in this Section 7.1 and such failure shall continue
         unremedied for a period of 30 days after the Issuer becomes aware
         thereof or receives written notice thereof from the Controlling Party;
         provided, however, if (A) such failure does not consist of a failure to
         pay money and cannot be cured within such 30 day period, (B) such
         failure is susceptible of cure within 90 days, (C) the Issuer is
         proceeding with diligence and in good faith to cure such failure, (D)
         the existence of such failure has not had and, after considering the
         nature of the cure, could not reasonably be expected to have an Issuer
         Material Adverse Effect, and (E) the Controlling Party and the
         Collateral Agent shall have received an officer's certificate signed by
         a Responsible Officer of the Issuer to the effect of clauses (A), (B),
         (C) and (D) above and stating what action the Issuer is taking to cure
         such failure, then such 30 day cure period shall be extended to such
         date, not to exceed a total of 90 days, as shall be necessary for the
         Issuer diligently to cure such failure.

                  (h) Loss of Exemption. The Issuer shall become subject to, or
not exempt from, regulation under the FPA or PUHCA, other than Section 9(a)(2)
of PUHCA, and such regulation, or loss of exemption from regulation, shall have
an Issuer Material Adverse Effect; provided that the Issuer shall have 60 days
after a Responsible Officer of the Issuer obtains knowledge of such event to
cure such event before it becomes an Issuer Event of Default so long as the
extension of time to cure such event could not reasonably be expected to have an
Issuer Material Adverse Effect.

                  (i) Issuer Collateral. (i) The grant of the Lien of any of the
Issuer Collateral Documents shall fail in any material respect to provide a
perfected Lien in favor of the Collateral Agent for the benefit of the Secured
Parties on any of the Issuer Collateral with the priority purported to be
created thereby, and the Issuer shall fail to cure any such failure within 15
days after the Issuer becomes aware thereof or receives written notice thereof
from the Collateral Agent, or (ii) the Collateral Agent shall receive a
Secretary of State report indicating that the Collateral Agent's security
interest in any of the Issuer Collateral is not prior to all other security
interests or other interests reflected in such report, other than Issuer
Permitted Liens, and the Issuer shall fail to cure such condition within 15 days
after the Issuer becomes aware thereof or receives written notice thereof from
the Collateral Agent.

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<PAGE>

                  (j) Loss of Control. (a) All or substantially all of the
assets of a Project Company shall be sold, leased, licensed, assigned, pledged,
transferred or otherwise disposed of by such Project Company other than pursuant
to a Permitted Peaker Buyout, or (b) NRG Energy shall fail to directly or
indirectly own 100% of the membership interests in the Issuer or any Project
Company and control the fundamental management decisions of the Issuer or any
Project Company other than in connection with (i) a Permitted Peaker Buyout or
(ii) a Permitted Change of Control.

                  (k) Project Events of Default.

                  (i) A Fundamental Project Event of Default shall have occurred
         and be continuing.

                  (ii) Any Project Event of Default shall have occurred and be
         continuing and (A) has resulted in an Issuer Material Adverse Effect,
         or (B) could reasonably be expected to result in an Issuer Material
         Adverse Effect, provided that there shall be no Issuer Event of Default
         under this Section 7.1(k)(ii) if the Issuer consummates a Permitted
         Peaker Buyout (Peaker Sale/Project Event of Default) or Peaker
         Collateralization in respect of the applicable Project Company and/or
         its Project.

                  (l) Unenforceability of Financing Documents. At any time after
the execution and delivery thereof, any material provision of any Financing
Document shall cease to be in full force and effect (other than by reason of a
release of Collateral thereunder in accordance with the terms hereof or thereof,
the satisfaction in full of the Obligations or any other termination of a
Financing Document in accordance with the terms hereof and thereof) or any
Financing Document shall be declared null and void by a Governmental Authority
of competent jurisdiction.

                  (m) Equity Documents and Equity Parties.

                  (i) Any Equity Document shall fail to be in full force and
         effect (other than due to a termination thereof in accordance with the
         terms hereof and thereof) or any Equity Party shall repudiate in
         writing any of its obligations thereunder.

                  (ii) Any Equity Party shall fail to make any payment as and
         when due under any Equity Document to which it is a party.

                  (iii) There shall have occurred and be continuing an NRG Event
         of Default (other than pursuant to the matters referred to in Section
         7.1 (m)(i) or Section 7.1(m)(ii)), provided that there shall be no
         Issuer Event of Default pursuant to this Section 7.1(m)(iii) if the
         Equity Party shall have deposited, or caused the deposit of, cash in
         the Cash Collateral Accounts in accordance with Section 2.2(c) or
         Section 2.3(b) of the Contingent Guaranty Agreement, in each case as
         applicable.

                  (n) Completion. Either one or both of the Bayou Cove Project
or the Rockford II Project shall have failed to reach Completion on or prior to
June 30, 2003; provided, however, that:

                                       33
<PAGE>

                  (i) a failure of the Bayou Cove Project to reach Completion on
         or prior to June 30, 2003 shall not be an Issuer Event of Default if,
         on or prior to such date, the Issuer consummates a Permitted Peaker
         Buyout (Completion / Loss Event) or Peaker Collateralization in respect
         of the Bayou Cove Project and the Bayou Cove Project Company; and

                  (ii) a failure of the Rockford II Project to reach Completion
         on or prior to June 30, 2003 shall not be an Issuer Event of Default
         if, on or prior to such date, the Issuer consummates a Permitted Peaker
         Buyout (Completion / Loss Event) or Peaker Collateralization in respect
         of the Rockford II Project and the Rockford II Project Company.

                  (o) Significant Casualty Event or Significant Condemnation
Event.

                  (i) There shall have occurred a Significant Casualty Event in
         respect of a Project or the Issuer shall not have delivered to the
         Collateral Agent the Responsible Officer's certificate required in
         respect of such Project under Section 4.7.2(a)(ii) of the Depositary
         Agreement or XLCA (or the Independent Engineer) shall not have
         consented to, or confirmed the statements set forth in, as the case may
         be, such certificate as required by Section 4.7.2(a)(ii) of the
         Depositary Agreement, provided that there shall be no Issuer Event of
         Default under this Section 7.1(o)(i) if the Issuer consummates a
         Permitted Peaker Buyout (Completion / Loss Event) or Peaker
         Collateralization in respect of such Project.

                  (ii) There shall have occurred a Significant Condemnation
         Event in respect of a Project or the Issuer shall not have delivered to
         the Collateral Agent the Responsible Officer's certificate required in
         respect of such Project under Section 4.7.2(b)(ii) of the Depositary
         Agreement or XLCA (or the Independent Engineer) shall not have
         consented to, or confirmed the statements set forth in, as the case may
         be, such certificate as required by Section 4.7.2(b)(ii) of the
         Depositary Agreement, provided that there shall be no Issuer Event of
         Default under this Section 7.1(o)(ii) if the Issuer consummates a
         Permitted Peaker Buyout (Completion / Loss Event) or Peaker
         Collateralization in respect of such Project.

         7.2 Project Events of Default. The occurrence of any of the following
events in respect of a Project Company shall constitute a "Project Event of
Default" with respect to such Project Company hereunder:

                  (a) Failure to Make Payments. Such Project Company shall fail
         to pay, in accordance with the terms of its Guaranty, any amount due
         thereunder on the date that such amount is due.

                  (b) Judgments. One or more final judgments for the payment of
         money (if such payments are not fully covered by insurance) in excess
         of $5,000,000 in the aggregate shall be rendered against such Project
         Company, and such Project Company shall not discharge the same or
         provide for its discharge in accordance with its terms, or procure a
         stay of execution thereof, within 60 days after the day of entry
         thereof; provided, however, that any such judgment

                                       34
<PAGE>

         shall not be (and shall not constitute part of) a Project Event of
         Default under this Section 7.2(b) if and for so long as (i) the amount
         of such judgment is fully covered by a valid and binding policy of
         insurance between the defendant and the insurer covering payment
         thereof and (i) such insurer has been notified of, and has not disputed
         the claim made for payment of, the amount of such judgment.

                  (c) Misstatements; Omissions. Any representation or warranty
by such Project Company set forth in any Financing Document or in any document
entered into in connection therewith in favor of or for the benefit of any
Secured Party or in any certificate, financial statement or other document
delivered in connection therewith for the benefit of any Secured Party shall
prove to have been incorrect in any material respect when made (or deemed made)
and the facts or events underlying such incorrect representation or warranty
shall not be changed so as to correct such representation or warranty in all
material respects for a period of 30 days (or so long as the facts or events
underlying such incorrect representation or warranty are capable of being
changed so as to correct such incorrect representation or warranty in all
material respects and such Project Company is diligently proceeding to change
such events or facts, such longer period but in no event for an aggregate period
in excess of 90 days) after a Responsible Officer of such Project Company
becomes aware thereof or receives written notice thereof from or on behalf of
the Controlling Party (or XLCA if the proviso to this Section 7.2(c) applies)
specifying such material inaccuracy and requiring that the facts or events
underlying such incorrect representation or warranty be changed so as to correct
such incorrect representation or warranty in all material respects; provided,
however, that any Project Event of Default pursuant to this Section 7.2(c)
arising solely from any representation or warranty made by a Project Company for
the benefit of XLCA under the Insurance and Reimbursement Agreement shall be an
Issuer Event of Default in respect of which no Person other than XLCA shall have
the rights given to parties to this Agreement in respect of Issuer Events of
Default generally.

                  (d) Bankruptcy.

                  (i) Such Project Company shall become subject to a Bankruptcy
         Event.

                  (ii) Any Major Project Participant (other than such Project
         Company) in such Project Company's Project (so long as such Major
         Project Participant has any remaining obligations (other than
         indemnification obligations) under the Major Project Documents related
         to such Project to which it is a party) shall become subject to a
         Bankruptcy Event; provided that no Project Event of Default shall occur
         as a result of such Bankruptcy Event if: (A) with respect to any such
         Major Project Participant that is the only Person able to provide the
         services that are being provided under the Major Project Document to
         which it is a party on a commercially reasonable basis, (x) such Major
         Project Participant is continuing to perform all of its obligations
         under such Major Project Document in accordance with the terms thereof
         and (y) the Controlling Party does not, within 60 days after the
         occurrence of such Bankruptcy Event, declare a Project Event of Default
         with respect thereto; and (B) with respect to any Major Project
         Participant in such Project Company's Project, (t) within 30 days after
         the occurrence of such Bankruptcy Event, such Project Company notifies
         the Controlling Party and the Collateral Agent in writing that it
         intends to replace the affected Person in accordance with this clause
         (B), (u) within 135 days after the occurrence of such Bankruptcy Event,
         such Project Company replaces

                                       35
<PAGE>

         the affected Person with a Person that is reasonably satisfactory to
         XLCA (if XLCA is then the Controlling Party) or whose replacement of
         the affected Person could not reasonably be expected to have a Project
         Material Adverse Effect (if XLCA is not then the Controlling Party)
         pursuant to documentation that is reasonably satisfactory to XLCA (if
         XLCA is then the Controlling Party) or that could not reasonably be
         expected to have a Project Material Adverse Effect (if XLCA is not then
         the Controlling Party), and (v) such Bankruptcy Event does not have a
         Project Material Adverse Effect.

                  (e) Debt Cross Default. Such Project Company shall default for
a period beyond any applicable grace period (i) in the payment of any principal,
interest or other amount due on any Debt for Borrowed Money of such Project
Company (other than the Obligations) and such defaulted amount, together with
any other principal, interest or other amount due and unpaid on any Debt for
Borrowed Money of such Project Company (other than the Obligations) equals or
exceeds $5,000,000 in the aggregate, or (ii) in the payment of any amount then
due or performance of any obligation then required under any agreement
evidencing Debt of such Project Company (other than the Financing Documents) if,
because of such default, the holder of such Debt accelerates the payment thereof
and such accelerated amount, together with the amount of any other Debt of such
Project Company then so accelerated (other than the Obligations), equals or
exceeds $5,000,000 in the aggregate.

                  (f) Breach of Terms of Financing Documents.

                  (i) Such Project Company shall fail to perform or observe any
         of the covenants set forth in Section 3.1 (Use of Proceeds and
         Revenues), 3.6(a) (Maintenance of Existence and Business), 3.10
         (Insurance) or Article 5 (other than Section 5.6(b) (Investments), 5.9
         (ERISA), 5.12 (Accounts), 5.13 (Name Change, etc.) or 5.18 (Hazardous
         Substances)); provided that in the case where such Project Company's
         failure to perform or observe the covenants set forth in Section 3.1 is
         not an intentional failure, such failure shall not become a Project
         Event of Default unless such Project Company does not cure such failure
         within three Business Days after the occurrence of such failure.

                  (ii) Such Project Company shall fail to perform or observe any
         of the covenants or other agreements set forth hereunder or in any
         other Financing Document which are not otherwise specifically provided
         for in Section 7.2(f)(i) or elsewhere in this Section 7.2 and such
         failure shall not be susceptible of cure or, if susceptible of cure,
         shall continue unremedied for a period of 30 days after such Project
         Company becomes aware thereof or receives written notice thereof from,
         or on behalf of, the Controlling Party; provided, however, if (A) such
         failure does not consist of a failure to pay money and cannot be cured
         within such 30-day period, (B) such failure is susceptible of cure
         within 90 days, (C) such Project Company is proceeding with diligence
         and in good faith to cure such failure, (D) the existence of such
         failure has not had and, after considering the nature of the cure,
         could not be reasonably expected to have, a Project Material Adverse
         Effect, and (E) the Controlling Party and the Collateral Agent shall
         have received an officer's certificate signed by a Responsible Officer
         of such Project Company to the effect of clauses (A), (B), (C) and (D)
         above and stating what action such Project Company is taking to cure
         such failure, then such 30-day cure period shall be extended to

                                       36
<PAGE>

         such date, not to exceed a total of 90 days, as shall be necessary for
         such Project Company diligently to cure such failure.

                  (g) Major Project Documents.

                  (i) Any Person (other than a Secured Party) shall be in breach
         of, or in default under, (A) a Major Project Document relating to such
         Project Company's Project (after giving effect to any applicable grace
         period set forth in such Major Project Document), or (B) any Consent
         related to such Major Project Document, and in each case such breach or
         default could reasonably be expected to have a Project Material Adverse
         Effect, and such breach or default shall not be susceptible of cure or,
         if susceptible of cure, shall continue unremedied for a period of 45
         days; provided that if (A) such breach or default does not consist of a
         failure to pay money and cannot be cured within such 45-day period, (B)
         such breach or default is susceptible of cure within 90 days, (C) the
         breaching party is proceeding with diligence and in good faith to cure
         such breach, and (D) the existence of such breach or default does not
         have a Project Material Adverse Effect and the extension of time to
         cure such breach or default could not, after considering the nature of
         the cure, be reasonably expected to have a Project Material Adverse
         Effect, then such 45-day cure period shall be extended to such date,
         not to exceed a total of 90 days, as shall be necessary for the
         breaching party diligently to cure such breach or default; provided,
         further, that no Project Event of Default shall be declared or deemed
         to exist as a result of any such breach or default if: (y) within the
         90-day cure period referred to in this Section 7.2(g)(i) (or within the
         45-day cure period, if no extension is given), such Project Company
         replaces the affected Person (other than such Project Company) with a
         Person that is reasonably satisfactory to XLCA (if XLCA is then the
         Controlling Party) or whose replacement of the affected Person could
         not reasonably be expected to have a Project Material Adverse Effect
         (if XLCA is not then the Controlling Party) pursuant to documentation
         that is reasonably satisfactory to XLCA (if XLCA is then the
         Controlling Party) or that could not reasonably be expected to have a
         Project Material Adverse Effect (if XLCA is not then the Controlling
         Party), and (z) the existence of such breach or default does not have a
         Project Material Adverse Effect and the extension of time (if any) to
         obtain a replacement Person could not reasonably be expected to have a
         Project Material Adverse Effect.

                  (ii) Any Major Project Document relating to such Project
         Company's Project shall terminate, any material provision in any such
         Major Project Document shall for any reason cease to be valid and
         binding on any Person party thereto except upon fulfillment of such
         Person's obligations thereunder (or any such Person shall so state in
         writing), or shall be declared null and void, or the validity or
         enforceability thereof shall be contested by any party thereto or any
         Governmental Authority, or any such Person shall deny in writing that
         it has any liability or obligation thereunder, except upon fulfillment
         of its obligations thereunder, and in each case such occurrence could
         reasonably be expected to have a Project Material Adverse Effect;
         provided that no Project Event of Default shall be declared or deemed
         to exist as a result of the occurrence of such event if: (A) within 30
         days after the occurrence of such event, such Project Company notifies
         the Controlling Party and the Collateral Agent in writing that it
         intends to cure such event, (B) within 135 days after the occurrence of
         such event, such Project Company (x) replaces the affected

                                       37
<PAGE>

                  Person (other than Project Company) with a Person that is
reasonably satisfactory to XLCA (if XLCA is then the Controlling Party) or whose
replacement of the affected Person could not reasonably be expected to have a
Project Material Adverse Effect (if XLCA is not then the Controlling Party)
pursuant to documentation that is reasonably satisfactory to XLCA (if XLCA is
then the Controlling Party) or that could not reasonably be expected to have a
Project Material Adverse Effect (if XLCA is not then the Controlling Party) or
(y) replaces the affected Major Project Document with a Project Document that is
reasonably satisfactory to XLCA (if XLCA is then the Controlling Party) or that
could not reasonably be expected to have a Project Material Adverse Effect (if
XLCA is not then the Controlling Party); and (C) the occurrence of such event
does not have a Project Material Adverse Effect and the extension of time to
cure such event could not reasonably be expected to have a Project Material
Adverse Effect.

                  (h) Loss of EWG Status. Such Project Company shall cease to be
an Exempt Wholesale Generator or its Project shall cease to be an Eligible
Facility, or such Project Company shall fail to take all actions required to
maintain such status (except if such Project Company or such Project, as the
case may be, is no longer required to hold such status in order to be exempt
from PUHCA), and such cessation or failure shall have a Project Material Adverse
Effect; provided that such Project Company shall have 60 days after a
Responsible Officer of such Project Company obtains knowledge of such cessation
or failure to cure such cessation or failure before it becomes a Project Event
of Default so long as the extension of time to cure such cessation or failure
could not reasonably be expected to have a Project Material Adverse Effect.

                  (i) Abandonment. At any time following the Completion Date for
its Project, such Project Company shall announce that it is abandoning such
Project or such Project shall be abandoned or operation thereof shall
substantially cease for a continuous period of more than 2 years for any reason.

                  (j) Permits. Any Permit shall be revoked, canceled, not
renewed or materially modified by the issuing agency or other Governmental
Authority having jurisdiction (excluding any revocation, cancellation,
non-renewal, or material modification at the request of the relevant Project
Company and with the prior written consent of the Controlling Party and the
Collateral Agent) and within 90 days thereafter the relevant Project Company is
not able to demonstrate to the reasonable satisfaction of XLCA (if XLCA is then
the Controlling Party) acting in consultation with the Independent Engineer (or
a Responsible Officer of such Project Company is not able to certify to the
Trustee (if XLCA is not then the Controlling Party) that such revocation,
cancellation or material modification of, or failure to renew, such Permit could
not reasonably be expected to have a Project Material Adverse Effect.

                  (k) ERISA. With respect to any ERISA Plan which a member of
the Controlled Group sponsors, maintains, administers, contributes to,
participates in, or has any obligation to contribute to or any liability under,
an event has occurred or a condition exists which, together with all other such
events or conditions, could reasonably be expected to have a Project Material
Adverse Effect.

                  (l) Project Company Collateral. (i) The grant of the Lien of
such Project Company's Project Company Collateral Documents shall fail in any
material respect to provide a

                                       38
<PAGE>

perfected Lien in favor of the Collateral Agent for the benefit of the Secured
Parties on any of such Project Company's Project Company Collateral with the
priority purported to be created thereby, and such Project Company shall fail to
cure any such failure within 15 days after it becomes aware thereof or receives
written notice thereof from the Collateral Agent, or (ii) Collateral Agent shall
receive a Secretary of State report indicating that the Collateral Agent's
security interest in any of such Project Company Collateral is not prior to all
other security interests or other interests reflected in such report, other than
Project Company Permitted Liens, and such Project Company shall fail to cure
such condition within 15 days after it becomes aware thereof or receives written
notice thereof from the Collateral Agent.

                  (m) Liens of Certain Equity Interests. The membership
interests in the Big Cajun Project Company or the Sterlington Project Company
shall be, or shall become, subject to any Lien (whether or not existing before
or after the Closing Date but other than (i) a Lien in favor of the Secured
Parties pursuant to which any such membership interests become part of the
Collateral, or (ii) Project Company Permitted Liens as described in paragraphs
(b) and (d) of the definition of Project Company Permitted Liens) and such Lien
shall not be discharged within 15 days after such Project Company becomes aware
thereof or receives written notice thereof from the Collateral Agent.

                  (n) Interconnection Solution. The Interconnection Solution
shall fail to be in full force and effect within nine months after the Closing
Date; provided, however, that if the Big Cajun Project Company is proceeding
with diligence and in good faith to cure such failure, such failure shall not be
considered a Project Event of Default unless it continues unremedied for an
additional 90 days following the end of such nine month period.

         7.3 Fundamental Project Event of Default. The occurrence of any of the
following Project Events of Default with respect to a Project Company shall
constitute a "Fundamental Project Event of Default" with respect to such Project
Company (provided that any such Project Event of Default shall not be a
Fundamental Project Event of Default with respect to a Project Company if the
Issuer consummates a Permitted Peaker Buyout (Peaker Sale / Project Event of
Default) or a Peaker Collateralization in respect of such Project Company and/or
its Project):

                  (a) The occurrence of a Project Event of Default under Section
         7.2(d)(i) (Bankruptcy of Project Company) with respect to such Project
         Company;

                  (b) The occurrence of a Project Event of Default under Section
         7.2(f)(i) (Breach of Terms of Financing Documents) with respect to such
         Project Company's failure to perform or observe the covenants set forth
         in:

                  (i) Section 3.1 (Use of Proceeds and Revenues), if such
         failure shall continue unremedied for a period of 30 days;

                  (ii) Section 3.6(a) (Maintenance of Existence);

                  (iii) Section 3.10 (Insurance), if such failure shall continue
         unremedied for a period of 30 days;

                                       39
<PAGE>

                  (iv) Section 3.12(a) (Title), if such failure is in respect of
         all or substantially all of such Project Company's assets;

                  (v) Section 5.2 (Liens), in respect of Liens in excess of
         $5,000,000, if such failure shall continue unremedied for a period of
         30 days;

                  (vi) Section 5.3 (Indebtedness);

                  (vii) Sections 5.4(a), (b), (c) or (d) (Asset Dispositions),
         in respect of any asset that is material to the ownership, leasing,
         operation, maintenance or use of such Project Company's Project;

                  (viii) Section 5.10 (Merger or Consolidation; Liquidation) in
         respect of a merger, consolidation, liquidation or dissolution; and

                  (ix) Section 5.14 (Assignment).

                  (c) The occurrence of a Project Event of Default under Section
7.2(i) (Abandonment) with respect to such Project Company's Project;

                  (d) The occurrence of a Project Event of Default under Section
7.2(h) (Loss of Exemption) with respect to such Project Company or its Project;

                  (e) The occurrence of a Project Event of Default under Section
7.2(j) (Permits) with respect to a Permit that is necessary to operate such
Project Company's Project on a commercially feasible basis, if such Project
Event of Default continues unremedied for a period of 90 days; and

                  (f) The occurrence of a Project Event of Default under Section
7.2(l) (Project Company Collateral) with respect to all or substantially all of
the Project Company Collateral of such Project Company

                  (g) The occurrence or continuation of a Project Event of
Default under Section 7.2(n) (Interconnection Solution) at any time that the Big
Cajun PPA or an Alternate Big Cajun PPA is not in full force and effect.

         7.4 Controlling Party Agreement.

                  (a) Each party to this Agreement agrees that the Controlling
         Party shall, subject to Section 9.2 (b) as to matters referred to in
         the proviso to Section 9.2(b), have the exclusive power to determine,
         control and direct any request, demand, authorization, direction,
         notice, consent, waiver or other action to be given, made or taken by
         any party to any Financing Document. Notwithstanding anything to the
         contrary in any Financing Document, each of the Swap Counterparty, the
         Collateral Agent and the Trustee (on behalf of itself and the
         Bondholders) agrees not to give, make or take any such request, demand,
         authorization, direction, notice, consent, waiver or other action for
         so long as XLCA is the Controlling Party (unless, in each such case, it
         is directed to do so by XLCA). Without prejudice to Section 2.11 of
         this Agreement, this Section 7.4(a) shall not prohibit (a) notices by
         the Issuer to the Swap

                                       40
<PAGE>
Counterparty under the Swap Agreement from becoming effective if, pursuant to
the express terms of the Swap Agreement, such notices are to be effective
without XLCA's consent upon being given to XLCA, or (b) the Swap Counterparty
from designating an early termination of the Swap Agreement (as expressly
permitted by its terms) without XLCA's consent.

                  (b) Each party to this Agreement agrees that the Controlling
Party shall have the exclusive power to determine the exercise of all rights and
remedies in respect of any Issuer Event of Default or any other default or event
of default under any Financing Document howsoever arising. Notwithstanding
anything to the contrary in any Financing Document, each of the Swap
Counterparty, the Collateral Agent and the Trustee (on behalf itself and the
Bondholders) agrees not to exercise any rights or remedies granted in, or
pursuant to or in respect of any, Financing Document or available to it at law
or in equity in respect of any default or event of default under any Financing
Document for so long as XLCA is the Controlling Party (unless, in each such
case, it is directed to exercise such rights and remedies by XLCA). Without
prejudice to Section 2.11 of this Agreement, this Section 7.4(b) shall not
prohibit the Swap Counterparty from designating an early termination of the Swap
Agreement (as expressly permitted by its terms) without XLCA's consent.

                  (c) Without prejudice to the generality of Section 7.4(a) or
7.4(b) of this Agreement, each of the Trustee, on behalf of itself and the
Bondholders, and the Swap Counterparty, hereby assigns to XLCA the respective
rights of the Trustee, the Bondholders and the Swap Counterparty with respect to
the Obligations to the extent of any payments under the Policy or the Swap
Policy. The foregoing assignment is in addition to, and not in limitation of,
rights of subrogation otherwise available to XLCA in respect of the Policies
(including pursuant to Section 4.2 of the Insurance and Reimbursement
Agreement), which subrogation rights are acknowledged, and agreed to, by the
other Secured Parties. Payments to XLCA in respect of the foregoing assignment
shall in all cases be subject to and subordinate to the rights of the
Bondholders to receive all scheduled payments of interest and principal under
the Bond Obligations. The Controlling Party is hereby appointed agent and
attorney-in-fact for each other Secured Party in any legal proceeding in respect
of the Obligations. Each Secured Party agrees that the Controlling Party may at
any time during the continuation of any proceeding by or against any debtor with
respect to which a claim seeking the avoidance as a preferential transfer of any
payment made with respect to the Obligations (a "Preference Claim"), or other
claim with respect to the Obligations is asserted under any proceeding in
connection with a Bankruptcy Event, direct all matters relating to such
proceeding, including, without limitation, (i) all matters relating to any
Preference Claim, (ii) the direction of any appeal of any order relating to any
Preference Claim and (iii) the posting of any surety or performance bond pending
any such appeal. The Trustee, on behalf of itself and the Bondholders, and the
Swap Counterparty each hereby agrees that XLCA shall be subrogated to, and the
Trustee, on behalf of itself and the Bondholders, and the Swap Counterparty each
hereby delegates and assigns, to the fullest extent permitted by law, the
respective rights of the Trustee, the Bondholders and the Swap Counterparty in
the conduct of any proceeding in connection with a Bankruptcy Event, including,
without limitation, all rights of any party to an adversary proceeding or action
with respect to any court order issued in connection with any such proceeding.

                  (d) Each party to this Agreement agrees that in respect of the
matters set forth or contemplated in Sections 7.4, 7.5, 7.6 and 7.7 and in
respect of related matters set forth or

                                       41
<PAGE>

contemplated in the Financing Documents, the Swap Counterparty shall abide by
the decisions, and follow and comply with the requests, of the Controlling Party
and shall have no voting or other related rights in respect of any such matters.

         7.5 Remedies. Upon the occurrence and during the continuation of an
Issuer Event of Default, the Controlling Party may, without any obligation to do
so and without further notice of default, presentment or demand for payment,
protest or notice of non-payment or dishonor, or other notices or demands of any
kind (all such notices and demands being waived), exercise any or all of the
following rights and remedies, in any combination or order, in addition (but
without prejudice to its rights as Controlling Party pursuant to Section 7.4) to
such other rights or remedies as the Secured Parties may have hereunder or under
the Collateral Documents or at law or in equity:

                  (a) Cure. Make disbursements to or on behalf of the Issuer to
cure any Issuer Event of Default hereunder and to cure any default or render any
performance under any Project Document as XLCA in its absolute discretion may
consider necessary or appropriate, whether to preserve and protect the
Collateral or the Secured Parties' interests therein or for any other reason,
and all sums so expended, together with interest on such total amount at the
Late Payment Rate (but in no event shall the rate exceed the maximum lawful
rate), shall be repaid by the Issuer to Collateral Agent promptly upon demand
therefor and shall be secured by the Financing Documents.

                  (b) Acceleration. Declare and make all sums of accrued and
outstanding principal, accrued but unpaid interest and accrued but unpaid
premium remaining under the Financing Documents, together with all unpaid
amounts, fees, costs and charges due hereunder or under any other Financing
Document (including in respect of any Reimbursement Obligation, Depositary
Obligation or Bond Obligation) immediately due and payable, and require the
Issuer immediately, without presentment, demand, protest or other notice of any
kind, all of which the Issuer hereby expressly waives, to pay to the Collateral
Agent an amount in immediately available funds equal to the aggregate amount of
any such outstanding accelerated obligations; provided that XLCA, so long as it
shall be the Controlling Party, shall not cause such an acceleration upon the
occurrence and during the continuation of an Issuer Event of Default pursuant to
Section 7.1(a) (Failure to Make Payments) if at such time (i) the discounted
present value of the aggregate amount of all payments made under the Policies
for which XLCA has not been reimbursed under the Insurance and Reimbursement
Agreement (or otherwise) is less than $25,000,000 (such discounted present value
being calculated by discounting the value of such aggregate amount back to the
Closing Date at a discount rate of 6.672826%), and (ii) no Issuer Event of
Default or Issuer Inchoate Default shall have occurred or be continuing (other
than pursuant to or in respect of Section 7.1(a) of this Agreement); and
provided, further, that in the event of an Issuer Event of Default occurring
under Section 7.1(d) (Bankruptcy), all such amounts, notwithstanding anything to
the contrary in this Agreement, shall become immediately due and payable without
further act of any Secured Party.

                  (c) Cash Collateral. Apply to any Obligation then due any
amounts on deposit in any Account, any funds on deposit in any Cash Collateral
Account, any drawings made under any Acceptable Letter of Credit or any proceeds
or any other monies of the Issuer on deposit with Depositary Agent or any
Secured Party in the manner provided in this Agreement or

                                       42
<PAGE>

in the Uniform Commercial Code and other relevant statutes and decisions and
interpretations thereunder with respect to cash collateral.

                  (d) Possession of Projects. Enter into possession of any
Project and perform any and all work and labor necessary to complete such
Project or to operate and maintain such Project, and all sums expended in so
doing, together with interest on such total amount at the Late Payment Rate,
shall be repaid by the Issuer to the Secured Party or Parties expending such
sums promptly upon demand and shall be secured by the Financing Documents to the
extent provided herein.

                  (e) Remedies Under Collateral Documents. Exercise any and all
rights and remedies available to the Secured Parties under any of the Collateral
Documents, including judicial or non-judicial foreclosure or public or private
sale of any of the Collateral pursuant to the Collateral Documents.

         7.6 Notice to Trustee and Project Events of Default. In exercising its
rights as Controlling Party in respect of remedies under Section 7.5 under this
Agreement, XLCA shall give the Trustee notice of XLCA's exercise of such
remedies (provided that failure by XLCA to give such notice shall in no way
limit, prejudice or affect XLCA's ability to exercise any remedies and XLCA
shall have no liability of any kind to any Person for failure to give such
notice). Without limiting anything set forth in this Article 7, upon the
occurrence of a Project Event of Default hereunder, the remedies available to
the Controlling Party and the other Secured Parties shall not include the
remedies set forth in Section 7.5 unless an Issuer Event of Default has also
occurred and is continuing.

         7.7 Application of Proceeds. If there shall have occurred an Issuer
Event of Default, all money, proceeds and other property received or held by the
Collateral Agent comprising Collateral or pursuant to the exercise by the
Collateral Agent of rights and remedies of the Secured Parties under any
Financing Document in respect of the Collateral shall be applied by the
Collateral Agent as follows (and if any Secured Party receives any such money,
proceeds or property other than as distributed by the Collateral Agent pursuant
to this Section 7.7, such Secured Party shall promptly pay or transfer the same
to the Collateral Agent for distribution in accordance with this Section 7.7):

                  first: to the payment of all and any fees, costs and expenses
owed to the Collateral Agent and the Trustee in their respective trust
capacities pursuant to any Financing Document;

                  second: to the payment of the whole amount then outstanding
(including accrued interest, principal and premium (if any)) of the Obligations
(or if the Obligations shall only have been accelerated in part, the whole
amount then outstanding of such part) and in case such proceeds are not
sufficient to pay in full the whole amount so outstanding, then to make pro-rata
payments without any preference or priority, to each Secured Party (other than
the Collateral Agent or the Trustee) in respect of the Obligations; and

                  third: after the payment in full of the Obligations, to the
payment of the remainder, if any, to the Issuer or as a court of competent
jurisdiction may direct.

                                       43
<PAGE>
                                                                         ANNEX A

                                   DEFINITIONS

                  "364 Day Revolver" means that certain 364-Day Revolving Credit
Agreement, dated as of March 8, 2002 and amended as of April 8, 2002 and May 14,
2002, among NRG Energy, the financial institutions party thereto, ABN AMRO Bank,
N.V., as Administrative Agent, Salomon Smith Barney, Inc., as Syndication Agent,
Barclays Bank plc, as Co-Syndication Agent, and The Royal Bank of Scotland plc
and Bayerische Hypo-und Vereinsbank AG, New York Branch, as Co-Documentation
Agents.

                  "Acceptable Assignee" has the meaning given in Section 11 of
the Contingent Guaranty Agreement.

                  "Acceptable Letter of Credit" means a letter of credit that
(a) is issued by a bank or other financial institution rated at least A2 by
Moody's and at least A by S&P, (b) has no account party that is a Financing
Party or any Affiliate of any Financing Party, and (c) is in the form attached
as Exhibit B to the Depositary Agreement.

                  "Acceptable PPA" means, with respect to a Project, an
agreement for the sale of Power generated by such Project that (a) does not
require the applicable Project Company to accept fuel price market risk (e.g., a
tolling agreement, fuel pass-through, energy prices indexed to fuel prices,
prices otherwise structured to limit negative spark spread risk), (b) has an
initial term of at least one year, (c) provides for annual revenues that equal
or exceed such Project Company's Allocation Percentage multiplied by the
aggregate amount of Scheduled Debt Service payments on the Series A Bonds
Outstanding (as such term is defined in the Indenture) for each year during the
term of such agreement for the sale of Power, and (d) provides for the
counterparty credit support that complies with the credit support criteria
contained in the NRG Credit Risk Policy; provided that with respect to any such
agreement entered into by NRG Power Marketing as principal under the Power Sales
and Agency Agreement to which such Project Company is a party, such agreement
will be an Acceptable PPA with respect to such Project Company only if such
Project Company and NRG Power Marketing have entered into a written agreement
evidencing and/or attaching the terms and conditions of the agreement that is
being passed through to such Project Company as contemplated by Section 2.9 of
such Power Sales and Agency Agreement.

                  "Account Funds" means all cash, cash equivalents, financial
assets, instruments, investments, investment property, securities and other
property, including Permitted Investments, on deposit in or credited to an
Account in accordance with the Depositary Agreement.

                  "Accounts" has the meaning given in Section 2.1 of the
Depositary Agreement.

                  "Accrued Insurer Loss Amount (Bond)" means, as of any Annual
Scheduled Payment Date, the aggregate amount then due and owing to XLCA by the
Issuer under the Insurance and Reimbursement Agreement in respect of the
Reimbursement Obligations relating to the Policy.

<PAGE>

                  "Accrued Insurer Loss Amount (Swap)" means, as of any Annual
Scheduled Payment Date, the aggregate amount then due and owing to XLCA by the
Issuer under the Insurance and Reimbursement Agreement in respect of the
Reimbursement Obligations relating to the Swap Policy.

                  "Acquisition Agreements" means the Bayou Cove Membership
Interest Purchase Agreement, the Bayou Cove Assignment and Assumption Agreement,
the Rockford Acquisition Agreement, the Rockford Assignment and Assumption
Agreement, the Sterlington Project Development Agreement, the Sterlington
Supplement and Modification to Project Development Agreement, and the
Sterlington and NRG South Central Assignment and Assumption Agreement.

                  "Acquisition Indemnity Payment" means, for any Project, any
and all amounts paid as indemnification payments to an Affiliate of the Project
Company owning such Project pursuant to an Acquisition Agreement relating to
such Project in order to compensate the relevant acquirer of such Project (or
Affiliate of such acquirer) for any devaluation of such Project due to a breach
of any representation, warranty or covenant contained in such Acquisition
Agreement.

                  "Acquisition Indemnity/Performance LD Reserve Account" has the
meaning given in Section 2.1 of the Depository Agreement.

                  "Actual Net Revenue" (a) in connection with the calculation of
a Performance Shortfall has the meaning given in Appendix I to the Contingent
Guaranty Agreement and (b) in connection with the calculation of an Experience
Accrual Amount or Experience Reduction Amount has the meaning given in Appendix
II to the Contingent Guaranty Agreement.

                  "Additional Bonds" has the meaning given in the Indenture.

                  "Additional Contingent Guaranty Agreement" means any
contingent guaranty agreement, substantially in the form of the Contingent
Guaranty Agreement or as otherwise in form and substance satisfactory to the
Controlling Party, provided by an Acceptable Assignee in connection with a
Permitted Change of Control pursuant to Section 10 of the Contingent Guaranty
Agreement.

                  "Additional Project Document" means, with respect to any
Project, any Project Document entered into with respect to such Project after
the Closing Date.

                  "Affiliate" means, with respect to a specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with the Person specified,
or who holds or beneficially owns 10% or more of the equity interest in the
Person specified or 10% or more of any class of voting securities of the Person
specified. For the purposes of this definition "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or to cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise. When used with respect to the Issuer,
"Affiliate" shall include NRG Energy and each Project Company.

                                       2
<PAGE>

                  "Affiliated Major Project Participant" means any Major Project
Participant that is an Affiliate of the applicable Project Company (in each case
to the extent such Person has remaining obligations under the Major Project
Documents).

                  "Allocation Percentage" means (a) in respect of the Bayou Cove
Project Company, 20%, (b) in respect of the Big Cajun Project Company, 28%, (c)
in respect of the Rockford I Project Company, 31%, (d) in respect of the
Rockford II Project Company, 10%, and (e) in respect of the Sterlington Project
Company, 11%; provided that upon a Permitted Peaker Buyout, the Allocation
Percentage for the Project Company subject to such Permitted Peaker Buyout shall
be reduced to 0% and the Allocation Percentage for each other Project Company
not subject to such Permitted Peaker Buyout shall be increased to its Allocation
Increased Percentage.

                  "Allocation Increased Percentage" means, in connection with a
Permitted Peaker Buyout and with respect to a Project Company that is not
subject to such Permitted Peaker Buyout, a percentage amount that is equal to
100% multiplied by (a) the product in Dollars of (x) such Project Company's
Allocation Percentage immediately prior to the consummation of such Permitted
Peaker Buyout multiplied by (y) the aggregate principal amount of all Series A
Bonds Outstanding (as such term is defined in the Indenture) immediately prior
to such consummation, divided by, (b) the aggregate principal amount of all
Series A Bonds Outstanding (as such term is defined in the Indenture)
immediately after such consummation.

                  "Allocation Percentage Buyout Amount" means, in respect of a
Project Company, an amount equal to the Allocation Percentage for such Project
Company multiplied by the aggregate principal amount of Series A Bonds then
Outstanding (as such term is defined in the Indenture).

                  "Alternate Big Cajun PPA" means, with respect to the Big Cajun
Project, any Acceptable PPA which has been entered into by the Big Cajun Project
Company as a replacement for the Big Cajun PPA; provided that (i) such
Acceptable PPA specifies the same delivery point for electricity as the Big
Cajun PPA and (ii) the counterparty to such Acceptable PPA has entered into a
Consent on terms and conditions similar to those contained in the Consent
relating to the Big Cajun PPA delivered on the Closing Date.

                  "Ancillary Services" means, in respect of a Project Company,
the ancillary services that FERC has authorized to be sold at market-based rates
in the Applicable Markets for such Project Company's Project.

                  "Annual Operations Report" means, in respect of each Project,
an annual operations report for such Project substantially in the form of
Exhibit E to the Common Agreement.

                  "Annual Scheduled Payment Date" means each (a) December 10th
commencing on December 10, 2002 and ending on, and including, December 10, 2018,
and (b) June 10, 2019.

                  "Applicable Markets" means, with respect to any Project, the
markets for Energy Products and Services in which such Project is interconnected
or in which such Project Company buys, sells or offers for delivery such
products or services.

                                       3
<PAGE>

                  "Associated Support Obligations" means, with respect to a
Project in connection with a Permitted Change of Control, the product of (a) the
percentage of such Project, or the membership interests in the applicable
Project Company, purchased by the Acceptable Assignee multiplied by (b) the sum
of (i) the product of (A) the Allocation Percentage of the applicable Project
Company multiplied by (B) the NRG Support Obligations under the Contingent
Guaranty Agreement, prior to giving effect to such Permitted Change of Control
(excluding NRG Energy's obligations under Sections 2.5 and 2.10 of the
Contingent Guaranty Agreement), plus (ii) if such Project is the Bayou Cove
Project or the Rockford II Project and such Permitted Change of Control occurs
prior to Completion of such Project, 100% of NRG Energy's obligations under
Section 2.5 of the Contingent Guaranty Agreement with respect to such Project,
plus (iii) if such Project is the Big Cajun I Units 3&4 Project, 100% of NRG
Energy's obligations under Section 2.10 of the Contingent Guaranty Agreement.

                  "Authorized Signatory" has the meaning given in Section 6.5 of
the Depositary Agreement.

                  "Available Collateralized Deductible Funds" means, as of any
date, the aggregate amount of (i) Account Funds on deposit in the Collateralized
Deductible Account on such date, (ii) any Deductible Cash Collateral Deposits
made and not reimbursed as of such date and (iii) amounts available for drawing
on such date under any Acceptable Letter of Credit posted for the Collateralized
Deductible Account or such Deductible Cash Collateral Deposits.

                  "Available Collateralized Experience Funds" means, as of any
date, the aggregate amount of (i) Account Funds on deposit in the Collateralized
Experience Account on such date, (ii) any Experience Cash Collateral Deposits
made and not reimbursed as of such date and (iii) amounts available for drawing
on such date under any Acceptable Letter of Credit posted for the Collateralized
Experience Account or such Experience Cash Collateral Deposits.

                  "Bankruptcy" means, in respect of any Person, a Bankruptcy
Event of such Person.

                  "Bankruptcy Event" shall be deemed to occur with respect to
any Person if (a) such Person shall institute a voluntary case seeking
liquidation or reorganization under Bankruptcy Law, or shall consent to the
institution of an involuntary case thereunder against it; (b) such Person shall
file a petition or consent or shall otherwise institute any similar proceeding
under any other applicable Federal or state law, or shall consent thereto; (c)
such Person shall apply for, or by consent there shall be an appointment of, a
receiver, liquidator, sequestrator, trustee or other officer with similar powers
for itself or any substantial part of its assets; (d) such Person shall make an
assignment for the benefit of its creditors; (e) such Person shall admit in
writing its inability to pay its debts generally as they become due; (f) an
involuntary case shall be commenced seeking liquidation or reorganization of
such Person under Bankruptcy Law or any similar proceedings shall be commenced
against such Person under any other applicable Federal or state law and (i) the
petition commencing the involuntary case is not timely controverted, (ii) the
petition commencing the involuntary case is not dismissed within 60 days of its
filing, (iii) an interim trustee is appointed to take possession of all or a
portion of the property, and/or to operate all or any part of the business, of
such Person and such appointment is not vacated within 60 days, or (iv) an order
for relief shall have been issued or entered therein; (g) a decree or order

                                       4
<PAGE>

of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee or other officer having similar
powers of such Person or all or a part of its property shall have been entered;
or (h) any other similar relief shall be granted against such Person under any
applicable Federal or state law.

                  "Bankruptcy Law" means Title 11, United States Code, and any
other state or federal insolvency, reorganization, moratorium or similar law for
the relief of debtors, or any successor statute and, additionally, with respect
to XLCA, Article 74 of the New York Insurance Law.

                  "Base Case Project Projections" means a projection of
operating results for the Projects delivered pursuant to Section 3.1(n) of the
Insurance and Reimbursement Agreement.

                  "Bayou Cove Assignment and Assumption Agreement" means the
Assignment and Assumption Agreement between NRG Bayou Cove LLC and El Paso
Merchant Energy Company, dated as of September 10, 2002.

                  "Bayou Cove Completion Obligations" has the meaning given in
Section 3.14(a) of the Common Agreement.

                  "Bayou Cove Construction Costs" means, collectively, any and
all costs (other than Uncovered Warranty Costs), expenses, fees, taxes or
reimbursement obligations incurred by or on behalf of the Bayou Cove Project
Company under or in connection with a Bayou Cove Equipment and Construction
Contract or otherwise in connection with achieving Project Completion of the
Bayou Cove Project, in each case on or prior to Completion of the Bayou Cove
Project.
                  "Bayou Cove Contractors" means, collectively, each of the
contractors, service providers and/or suppliers providing equipment and/or
services to the Bayou Cove Project pursuant to the terms of any Bayou Cove
Equipment and Construction Contract or any agent or subcontractor thereof.

                  "Bayou Cove Electric Interconnection Agreement" means the
Interconnection and Operating Agreement between the Bayou Cove Project Company
and Entergy Gulf States, Inc., effective as of October 18, 2001.

                  "Bayou Cove Electric Interconnection Facilities" means,
collectively, the electric interconnection facilities, including any system
upgrades, contemplated to be engineered, constructed, installed, tested,
commissioned and completed pursuant to the Bayou Cove EPC Agreement (Electric
Interconnection Facilities), the Bayou Cove Electric Interconnection Agreement
and any sub-contract related thereto.

                  "Bayou Cove EPC Agreement (Balance of Plant)" means the
Turnkey Contract among Stone & Webster, Inc., Shaw Constructors, Inc. and the
Bayou Cove Project Company, dated as of November 21, 2001.

                                       5
<PAGE>
                  "Bayou Cove EPC Agreement (Electric Interconnection
Facilities)" means the Agreement for Engineering, Procurement and Construction
between the Bayou Cove Project Company and Entergy Louisiana, dated as of
October 31, 2001.

                  "Bayou Cove Equipment and Construction Contracts" means,
collectively, (i) the Bayou Cove Turbine Purchase Agreement, (ii) the Bayou Cove
Generator Step-Up Transformers Purchase Agreement, (iii) the Bayou Cove EPC
Agreement (Balance of Plant), (iv) the Bayou Cove EPC Agreement (Electric
Interconnection Facilities), (v) the Bayou Cove Electric Interconnection
Agreement, and (vi) any other agreement or document (including any subcontracts)
entered into with respect to achieving Project Completion for the Bayou Cove
Project.

                  "Bayou Cove Gas Interconnection Agreement" means the
Reimbursement, Construction, Ownership and Operating Agreement between the Bayou
Cove Project Company and Egan Hub Partners, L.P., dated as of February 8, 2002.

                  "Bayou Cove Generator Step-Up Transformers Purchase Agreement"
means the Generator Step-Up Transformers Contract Agreement between the Bayou
Cove Project Company and ABB Power T&D Company, Inc., dated as of June 1, 2001.

                  "Bayou Cove Major Project Documents" means, collectively, (a)
the Bayou Cove Electric Interconnection Agreement, the Bayou Cove Gas
Interconnection Agreement and the Bayou Cove PSA Agreement, (b) any Additional
Project Document for the Bayou Cove Project that replaces any of the agreements
described in clause (a), (c) any Major Power Purchase Agreement, Major FSA or
Major FTA for the Bayou Cove Project and (d) any Additional Project Document for
the Bayou Cove Project that constitutes a material ground lease agreement,
material electric interconnection agreement or material sharing agreement.

                  "Bayou Cove Membership Interest Purchase Agreement" means the
Membership Interest Purchase Agreement between NRG Bayou Cove LLC and El Paso
Remediation Company, dated as of September 10, 2001 by which NRG Bayou Cove LLC
purchased all of El Paso Remediation Company's membership interests in the Bayou
Cove Project Company, constituting 100% of the membership interests in the Bayou
Cove Project Company.

                  "Bayou Cove Project" means the natural gas-fired electric
generation facility owned by the Bayou Cove Project Company currently under
construction near Jennings, Louisiana in Acadia Parish which, upon Completion,
is expected to generate 295 MW (summer capacity) / 345 MW (winter capacity).

                  "Bayou Cove Project Company" means Bayou Cove Peaking Power,
LLC, a Delaware limited liability company.

                  "Bayou Cove Project Documents" means all Project Documents for
the Bayou Cove Project.

                  "Bayou Cove PSA Agreement" means the Power Sales and Agency
Agreement between NRG Power Marketing and the Bayou Cove Project Company, dated
as of the Closing Date, including the Fuel and Power Marketing Plan attached
thereto.

                                       6
<PAGE>

                  "Bayou Cove Turbine Purchase Agreement" means the Turbine
Purchase Site Specific Agreement between NRG Energy and General Electric
Company, dated as of December 5, 2001, as assigned by NRG Energy to the Bayou
Cove Project Company.

                  "Big Cajun Act of Cash Sale and Grant of Servitude" means the
Act of Cash Sale and Grant of Servitude signed by Louisiana Generating and the
Big Cajun Project Company on the Closing Date.

                  "Big Cajun Act of Subordination" means the Act of
Subordination of Act of Mortgage, Pledge and Assignment of Leases and Rents
executed by JPMorgan Chase Bank on June 13, 2002.

                  "Big Cajun PPA" means the Power Purchase Agreement among the
Big Cajun Project Company, Louisiana Generating and NRG South Central, dated as
of February 15, 2002.

                  "Big Cajun PSA Agreement" means the Power Sales and Agency
Agreement between NRG Power Marketing and the Big Cajun Project Company, dated
as of the Closing Date, including the Fuel and Power Marketing Plan attached
thereto.

                  "Big Cajun Project Company" means Big Cajun I Peaking Power
LLC, a Delaware limited liability company.

                  "Big Cajun I Units 3&4 Major Project Documents" means,
collectively, (a) the Big Cajun PSA Agreement, the Big Cajun PPA, any Alternate
Big Cajun PPA, the Big Cajun Shared Facilities Agreement, the Big Cajun Sale of
Moveables in Place, the Big Cajun Switchyard Servitude Agreement and the Big
Cajun Act of Cash Sale and Grant of Servitude, (b) any Additional Project
Document for the Big Cajun I Units 3&4 Project that replaces any of the
agreements described in clause (a), (c) any Major Power Purchase Agreement,
Major FSA or Major FTA for the Big Cajun I Units 3&4 Project and (d) any
Additional Project Document for the Big Cajun I Units 3&4 Project that
constitutes a material ground lease agreement, material electric interconnection
agreement or material sharing agreement.

                  "Big Cajun I Units 3&4 Project Documents" means all Project
Documents for the Big Cajun I Units 3&4 Project.

                  "Big Cajun I Units 1&2 Project" means the approximately 220 MW
natural gas-fired electric generation facility owned by Louisiana Generating,
which is located in New Roads, Louisiana, adjacent to the Big Cajun I Units 3&4
Project.

                  "Big Cajun I Units 3&4 Project" means the approximately 204 MW
(summer capacity) / 239 MW (winter capacity) natural gas-fired electric
generation facility owned by the Big Cajun Project Company, which is located in
New Roads, Louisiana adjacent to the Big Cajun I Units 1&2 Project.

                  "Big Cajun Sale of Moveables in Place" means the sale of
Moveables in Place signed by Louisiana Generating and the Big Cajun Project
Company on the Closing Date.

                                       7
<PAGE>

                  "Big Cajun Shared Facilities Agreement" means the Shared
Facilities Agreement between the Big Cajun Project Company and Louisiana
Generating, dated as of the Closing Date.

                  "Big Cajun Switchyard Servitude Agreement" means the
Switchyard Servitude Agreement between NRG New Roads Holding LLC and the Big
Cajun Project Company dated June 18, 2002.

                  "Blocked Restricted Payment Amount" has the meaning given in
Section 4.5(c)(i) of the Common Agreement.

                  "Bond Obligations" means each payment and performance
obligation of the Issuer (monetary or otherwise and whether arising by
acceleration or otherwise) arising under or in connection with the Indenture and
the Series A Bonds, including in respect of payment of principal of, premium, if
any, and interest on the Series A Bonds when due and payable and all other
amounts or performances due or to become due under or in connection therewith.

                  "Bondholders" has the meaning given in the preamble to the
Common Agreement.

                  "Bonds" means, collectively, the Series A Bonds and any
Additional Bonds.

                  "Business Day" means any day other than a Saturday, Sunday,
legal holiday or other day on which commercial banking institutions in New York
are authorized or obligated by law, executive order or governmental decree to be
closed.

                  "Calculation Agent" means The Bank of New York, or any
successor Calculation Agent as appointed by the Issuer with the consent of XLCA
(if XLCA is the Controlling Party) and the Swap Counterparty.

                  "Capital Lease Obligations" means, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) property to the extent such
obligations are classified and accounted for as a capital lease on a balance
sheet for such Person under GAAP, and, for purposes of the Financing Documents,
the amount of such obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.

                  "Capital Stock" means, with respect to any Person, any common
stock, preferred stock and any other capital stock of such Person and shares,
interests, participations or other ownership interest (however designated), of
any Person and any rights (other than debt securities convertible into, or
exchangeable for, capital stock or such other ownership interests), warrants,
options or other rights to purchase any of the foregoing, including each class
of common stock and preferred stock of such Person if such Person is a
corporation and each general and/or limited partnership interest of such Person
if such Person is a partnership and/or limited liability company interest of
such Person if such Person is a limited liability company.

                  "Cash Available for Debt Service" means, for any period, all
Operating Revenues received, or projected to be received (in accordance with
revenue projections prepared by the Power and Fuel Market Consultant within 3
months prior to the determination of Cash Available

                                       8
<PAGE>

for Debt Service for such period), during such period minus all Operating Costs
paid, or projected to be paid (in accordance with cost projections prepared by
the Power and Fuel Market Consultant within 3 months prior to the determination
of Cash Available for Debt Service for such period), during such period.

                  "Cash Collateral Accounts" has the meaning given in Section
7.6 of the Contingent Guaranty Agreement.

                  "Cash Collateral Deposits" means Experience Cash Collateral
Deposits and Deductible Cash Collateral Deposits.

                  "Casualty Event" means any damage to or destruction of a
Project.

                  "Casualty Insurance Proceeds" means any and all proceeds of
any insurance, indemnity, warranty or guaranty payable from time to time with
respect to any Casualty Event, other than business interruption insurance
proceeds and similar proceeds.

                  "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C.ss.ss.9601 et seq., as amended
by the Superfund Amendments and Reauthorization Act of 1986, and all rules and
regulations thereunder.

                  "Closing Date" means June 18, 2002.

                  "Closing Date Account" means an account established by the
Issuer solely for the purposes of receiving and disbursing the proceeds of the
sale of the Series A Bonds on the Closing Date and to be used solely for such
purposes, which account shall be closed on or shortly after the Closing Date.

                  "Co-Collateral Agent" means the co-collateral agent appointed
pursuant to Section 11.8 of the Common Agreement.

                  "Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute.

                  "Collateral" means, collectively, the Issuer Collateral and
all Project Company Collateral.

                  "Collateral Agent" has the meaning given in the preamble to
the Common Agreement.

                  "Collateral Documents" means, collectively, the Issuer
Collateral Documents and all Project Company Collateral Documents.

                  "Collateralized Deductible Account" has the meaning given in
Section 2.1 of the Depositary Agreement.

                                       9
<PAGE>

                  "Collateralized Deductible Amount" means (a) the Deductible
Limit minus (b) the aggregate of all Deductible Payments previously made by NRG
Energy which have not been reimbursed to NRG Energy pursuant to Section 4.2.1 of
the Depositary Agreement.

                  "Collateralized Experience Account" has the meaning given in
Section 2.1 of the Depositary Agreement.

                  "Collateralized Experience Amount" means, as of any Annual
Scheduled Payment Date, the sum of the Collateralized Experience Amount
(Project) for all Projects as of such Annual Scheduled Payment Date; provided,
however, that if either (a) NRG Energy's ratings or the Shadow Ratings for the
Series A Bonds fall below Investment Grade from Moody's or S&P, or (b) the Debt
Service Coverage Ratio for the previous 12 months is below 1.20 to 1.00, then
the Collateralized Experience Amount as of such Annual Scheduled Payment Date
shall be equal to 200% of Scheduled Debt Service due on the next Annual
Scheduled Payment Date; provided, further, that if the event described in clause
(b) of the foregoing proviso occurs and NRG Energy's ratings as of such Annual
Scheduled Payment Date are at least Baa2 from Moody's and BBB from S&P, then the
Collateralized Experience Amount as of such Annual Scheduled Payment Date shall
be equal to 150% of Scheduled Debt Service due on the next Annual Scheduled
Payment Date.

                  "Collateralized Experience Amount (Project)" means, as of any
Annual Scheduled Payment Date, with respect to a Project, the product of (x)
Scheduled Debt Service due on the next Annual Scheduled Payment Date multiplied
by (y) the Allocation Percentage for the applicable Project Company; provided,
however, that during a Tolling Period with respect to such Project, the
Collateralized Experience Amount (Project) with respect to such Project shall be
an amount equal to 50% of the product of (x) Scheduled Debt Service due on the
next Annual Scheduled Payment Date and (y) the Allocation Percentage for the
applicable Project Company.

                  "ComEd" means Commonwealth Edison Company, an Illinois
corporation.

                  "Common Agreement" means that certain Common Agreement, dated
as of the Closing Date, among XLCA, the Swap Counterparty, the Trustee, the
Collateral Agent, the Issuer and each Project Company.

                  "Complete" or "Completion" means, with respect to each of the
Bayou Cove Project and the Rockford II Project, the earliest date on which all
of the following shall have occurred:

                  (a) such Project shall have achieved Project Completion and
         the Controlling Party shall have received a certificate of the
         Independent Engineer to that effect, which certificate will be in form
         and substance reasonably satisfactory to XLCA if XLCA is the
         Controlling Party;

                  (b) with respect to the Bayou Cove Project only, either (i)
         all Punch List Items for the Bayou Cove Project shall have been
         completed and paid for in full or (ii) the Bayou Cove Project Company
         shall have itemized all Punch List Items for the Bayou Cove Project,
         which list shall have been confirmed by the Independent Engineer, and
         the

                                       10
<PAGE>

         deposit into the Punch List Account required pursuant to Section 4.8 of
         the Depositary Agreement with respect to such Punch List Items shall
         have been made in full;

                  (c) with respect to the Rockford II Project only, either (i)
         all Punch List Items for the Rockford II Project shall have been
         completed and paid for in full, or (ii) the Rockford II Project Company
         shall have itemized all Punch List Items for the Rockford II Project,
         which list shall have been confirmed by the Independent Engineer, and
         the deposit into the Punch List Account required pursuant to Section
         4.8 of the Depositary Agreement with respect to such Punch List Items
         shall have been made in full;

                  (d) all material Permits required for operation of such
         Project (including all certificates of occupancy for such Project)
         shall have been obtained and shall be in full force and effect and
         shall not be subject to any pending appeal, intervention, or similar
         proceeding that could reasonably be expected to have a Project Material
         Adverse Effect, and the Controlling Party shall have received copies of
         all such Permits and all fees and charges associated therewith shall
         have been paid in full;

                  (e) with respect to the Bayou Cove Project only, (i) all Bayou
         Cove Construction Costs shall have been paid in full (other than those
         subject to a good faith dispute and for which adequate reserves in
         accordance with GAAP have been set aside), (ii) either (x) all
         performance guarantees under the Bayou Cove Equipment and Construction
         Contracts shall have been satisfied in full or (y) the minimum
         performance standards specified therein shall have been satisfied and
         all Performance Liquidated Damages to be paid (including by way of NRG
         Energy or any Affiliate thereof making payments into the Acquisition
         Indemnity/Performance LD Reserve Account) pursuant to the Bayou Cove
         Equipment and Construction Contracts shall have been paid in full to
         the Bayou Cove Project Company without regard for any limitations
         placed on the payment of Liquidated Damages in the Bayou Cove Equipment
         and Construction Contracts (other than those subject to a good faith
         dispute in an amount not to exceed $5,000,000 in the aggregate, taking
         into account any and all retainage amounts also subject to a good faith
         dispute), (iii) any retainage or other amounts withheld from payment to
         any Bayou Cove Contractor under a Bayou Cove Equipment and Construction
         Contract shall have been paid over in full to the relevant Bayou Cove
         Contractor (other than those which are (A) deposited into the Punch
         List Account or (B) subject to a good faith dispute in an amount not to
         exceed $5,000,000 in the aggregate, taking into account any and all
         Performance Liquidated Damages also subject to a good faith dispute),
         and (iv) any lien or encumbrance over any portion of the Bayou Cove
         Project in favor of a Bayou Cove Contractor shall have been released
         and discharged in full (other than Project Company Permitted Liens);
         and

                  (f) with respect to the Rockford II Project only, (i) the
         Rockford II Construction Costs shall have been paid in full (other than
         those subject to a good faith dispute and for which adequate reserves
         in accordance with GAAP have been set aside), (ii) either (x) all
         performance guarantees under the Rockford II Equipment and Construction
         Contracts shall have been satisfied in full or (y) the minimum
         performance standards specified therein shall have been satisfied and
         all Performance Liquidated Damages to be paid (including by way of NRG
         Energy or any Affiliate thereof making

                                       11
<PAGE>

         payments into the Acquisition Indemnity/Performance LD Reserve Account)
         by the Rockford II Contractors pursuant to the Rockford II Equipment
         and Construction Contracts shall have been paid to the Rockford II
         Project Company without regard for any limitations placed on the
         payment of Liquidated Damages in the Rockford II Equipment and
         Construction Contracts (other than those subject to a good faith
         dispute in an amount not to exceed $5,000,000 in the aggregate, taking
         into account any and all retainage amounts also subject to a good faith
         dispute), (iii) any retainage or other amounts withheld from payment to
         any Rockford II Contractor under a Rockford II Equipment and
         Construction Contract shall have been paid over in full to the relevant
         Rockford Contractor (other than those which are (A) deposited into the
         Punch List Account or (B) subject to a good faith dispute in an amount
         not to exceed $5,000,000 in the aggregate taking into account any and
         all Performance Liquidated Damages also subject to a good faith
         dispute), (iv) any lien or encumbrance over any portion of the Rockford
         II Project in favor of a Rockford II Contractor shall have been
         released and discharged in full (other than Project Company Permitted
         Liens), and (v) title to all equipment acquired for the Rockford II
         Project under the Rockford II Equipment and Construction Contracts
         shall have been duly transferred to the Rockford II Project Company
         free and clear of all liens (other than Project Company Permitted
         Liens).

                  "Completion Date" means, in respect of the Bayou Cove Project
and the Rockford II Project, the date upon which such Project achieves
Completion.

                  "Completion Tests" has the meaning given in Section
3.2(a)(vii) of the Common Agreement.

                  "Condemnation Event" means any Project (or any portion
thereof) is condemned, confiscated, requisitioned, captured, seized or subjected
to forfeiture, or title thereto is taken, by any Governmental Authority.

                  "Condemnation Proceeds" means any and all payments (in any
form whatsoever) made or due and payable from time to time in connection with
any Condemnation Event by any Governmental Authority (or any person acting under
color of Governmental Authority).

                  "Consents" means, collectively, the third-party consents and
assignments required pursuant to Section 3.1(f)(ii) of the Insurance and
Reimbursement Agreement or Section 5.16(b) of the Common Agreement.

                  "Consolidated Net Tangible Assets" has the meaning given in
Section 4.1(ii) of the Contingent Guaranty Agreement.

                  "Contingent Guaranty Agreement" means the Contingent Guaranty
Agreement, dated as of the Closing Date, by NRG Energy in favor of the
Collateral Agent.

                  "Construction Contractors" means, as applicable, the Bayou
Cove Contractors or the Rockford II Contractors.

                  "Construction Contracts" means, as applicable, the Bayou Cove
Equipment and Construction Contracts or the Rockford II Equipment and
Construction Contracts.

                                       12
<PAGE>

                  "Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Issuer or any Project Company, are
treated as a single employer under Section 414(b), (c), (m) or (o) of the Code
or under Section 4001(b)(1) of ERISA.

                  "Controlling Party" means XLCA for so long as either of the
Policies shall be effective and there shall not have occurred and be continuing
an Insurer Default and, at all other times, the requisite number or percentage
of Bondholders acting pursuant to the Indenture.

                  "Debt" of any Person at any date means, without duplication,
(a) such Person's Debt for Borrowed Money, (b) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (c) all
obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business (which exception is intended to encompass ordinary course obligations
under the Project Documents), (d) all Capitalized Lease Obligations of such
Person, (e) all obligations of such Person to purchase securities (or other
property) which arise out of or in connection with the sale of the same or
substantially similar securities (or property), (f) all deferred obligations of
such Person to reimburse any bank or other Person in respect of amounts paid or
advanced under a letter of credit or other instrument, (g) all Debt of others
secured by a Lien on any asset of such Person, whether or not such Debt is
assumed by such Person, and (h) all Debt (or other obligations) of others
guaranteed directly or indirectly by such Person or as to which such Person has
an obligation substantially the economic equivalent of a guaranty (provided
that, for purposes determining the amount of any Debt of the type described in
this clause (h), if the amount of such guaranty or similar obligation is less
than the full amount of the Debt or other obligation guaranteed, the amount of
such Debt shall be limited to the amount of such guaranty or similar
obligation).

                  "Debt for Borrowed Money" means, with respect to any Person,
all obligations of such person for borrowed money.

                  "Debt Payment Account" has the meaning given in Section 2.1 of
the Depositary Agreement.

                  "Debt Service Coverage Ratio" means, for any period, the ratio
of (a) all Cash Available for Debt Service for such period to (b) all Scheduled
Debt Service due during such period.

                  "Debt Service Shortfall" means, with respect to any Annual
Scheduled Payment Date, the amount, if any, by which (a) Scheduled Debt Service
on such date exceeds (b) funds in the Debt Payment Account available therefor in
accordance with the terms of Section 4.2 of the Depositary Agreement, without
giving effect to funding sources other than those described in priorities First,
Second and Third of Section 4.2.3 of the Depositary Agreement.

                  "Deductible Cash Collateral Deposit" has the meaning given in
Section 2.3(b) of the Contingent Guaranty Agreement.

                  "Deductible Limit" means $56,679,911

                                       13
<PAGE>

                  "Deductible Payment" means (a) any payment made by NRG Energy
pursuant to Section 2.3(a) of the Contingent Guaranty Agreement and (b) any
amount applied pursuant to priority Eighth or Ninth in Section 4.2.3 of the
Depositary Agreement.

                  "Deductible Termination Payment" has the meaning given in
Section 2.3(c) of the Contingent Guaranty Agreement.

                  "Delay Amounts" means Delay Liquidated Damages, proceeds under
delay in start-up or similar insurance and other similar amounts.

                  "Delay Liquidated Damages" means all amounts paid under a
Project Document as liquidated damages for failure to complete all or a portion
of a Project, or failure to deliver equipment for a Project, by the date set
forth for completion or delivery thereof in such Project Document, including
amounts paid under guaranties, letters of credit and other support instruments
for such purposes.

                  "Depositary Agent" means The Bank of New York, in its capacity
as depositary agent and securities intermediary under the Depositary Agreement,
or its successor appointed pursuant to the terms of the Depositary Agreement.

                  "Depositary Agreement" means the Security Deposit Agreement,
dated as of the Closing Date, among the Issuer, each Project Company, the
Collateral Agent and the Depositary Agent.

                  "Depositary Obligations" means each payment and performance
obligation of the Issuer under the Depositary Agreement.

                  "Designated Monthly Date" means any date specified by the
Issuer in a Disbursement Request. The Designated Monthly Date may vary from time
to time, but there shall not be more than one Designated Monthly Date in any
given month.

                  "Determination Date" means, October 31 of each year with the
first such date being October 31, 2002 and the last such date being October 31,
2018.

                  "Determination Period" means (a) the period from the Closing
Date through and including October 31, 2002, and (b) thereafter, each period
from November 1 of each year through and including October 31 of the following
year.

                  "Disbursement Project Event of Default" means a Project Event
of Default with respect to a Project for which a disbursement of Loss Proceeds
is being requested pursuant to Section 4.7.2 of the Depositary Agreement.

                  "Disbursement Request" means a Disbursement Request
substantially in the form of Exhibit A to the Depositary Agreement.

                  "Distribution Account" has the meaning given in Section 2.1 of
the Depositary Agreement.

                                       14
<PAGE>

                  "Dollars" and "$" mean United States dollars or such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts in the United States of
America.

                  "Early Termination Date" has the meaning given in Section
2.2(d) of the Contingent Guaranty Agreement.

                  "Easements" means, with respect to any parcel of real
property, (a) all agreements, easements, rights of way or use, rights of ingress
or egress, privileges, appurtenances, tenements, hereditaments and other rights
and benefits appurtenant, belonging or pertaining to such parcel, including the
use of any streets, ways, alleys, vaults or strips of land adjoining, abutting,
adjacent or contiguous to such parcel, and (b) all permits, licenses and rights,
whether or not of record, appurtenant to such parcel.

                  "Effective Date" means the date on which the Policies are
issued.

                  "Eligible Facility" means an eligible facility within the
meaning of Section 32(a)(2) of PUHCA.

                  "Energy Products and Services" means, collectively, Power,
Ancillary Services, Fuel Products and Other Energy-Related Products and
Services.

                  "Energy Transaction Costs" means all costs (including
liquidated damages or other damages or penalties) incurred by a Project Company
in connection with the purchase, sale, resale or other use of Energy Products
and Services, including Fuel Costs, Hedging Costs and costs under such Project
Company's Power Sales and Agency Agreement.

                  "Entergy Louisiana" means Entergy Louisiana, Inc., a Louisiana
corporation.

                  "Environmental Claim" means any claim, notice of claim,
complaint, notice of violation, letter or other written assertion of any kind
concerning any asserted or actual violation of or liability under any Hazardous
Substances Law or any asserted or actual violation or liability relating to any
Hazardous Substance.

                  "Environmental Consultant" means (a) if XLCA is the
Controlling Party, an environmental consultant reasonably acceptable to XLCA
(which shall include URS Corporation and P.E. LaMoreau & Associates, Inc.), and
(b) if XLCA is not the Controlling Party, an independent nationally recognized
environmental consultant.

                  "Environmental Reports" means, with respect to a Project, the
environmental reports delivered to XLCA in accordance with Section 3.1(v) of the
Insurance and Reimbursement Agreement for such Project.

                  "Environmental Subject Claims" has the meaning given in
Section 9.1(b) of the Common Agreement.

                  "Equity Documents" means the Contingent Guaranty Agreement and
any Additional Contingent Guaranty Agreement.

                                       15
<PAGE>

                  "Equity Party" means NRG Energy and any Acceptable Assignee.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.

                  "ERISA Plan" means any employee benefit plan covered by Title
IV of ERISA or to which Section 412 of the Code applies.

                  "Exelon" means Exelon Generating Company, LLC, a Delaware
limited liability company.

                  "Excluded Revenues" means, collectively, proceeds from the
sale of the Series A Bonds on the Closing Date, Delay Amounts, payments by NRG
Energy to any Project Company pursuant to Section 2.5 or 2.6 of the Contingent
Guaranty Agreement, Peaker Buyout Profits and proceeds received in connection
with a Permitted Change of Control.

                  "Exempt Wholesale Generator" means an exempt wholesale
generator within the meaning of Section 32(a)(1) of PUHCA.

                  "Experience Accrual Amount" has the meaning given in Appendix
II to the Contingent Guaranty Agreement.

                  "Experience Amount Percentage" means, with respect to a
Project Company, the percentage of the Total Experience Amount attributed to
such Project Company.

                  "Experience Cash Collateral Deposit" has the meaning given in
Section 2.2(c) of the Contingent Guaranty Agreement.

                  "Experience Payment" has the meaning given in Section 2.2(b)
of the Contingent Guaranty Agreement.

                  "Experience Reduction Amount" has the meaning given in
Appendix II to the Contingent Guaranty Agreement.

                  "Experience Termination Payment" has the meaning given in
Section 2.2(d) of the Contingent Guaranty Agreement.

                  "FERC" means the Federal Energy Regulatory Commission and any
successor thereto.

                  "Final Scheduled Payment Date" means June 10, 2019.

                  "Financing Documents" means the Common Agreement (including
the Guaranty of each Project Company), the Policy, the Swap Policy, the Premium
Letter, the Insurance and Reimbursement Agreement, the Indenture, the Bonds, the
Swap Agreement, the Equity Documents, the Collateral Documents, the Depositary
Agreement, the Project Loan Agreements, the Project Loan Notes, the Consents,
the Lease Estoppels, the Nondisturbance Agreements, the Rockford I Lien
Subordination Agreement, the Big Cajun Act of Subordination, and each other

                                       16
<PAGE>

agreement, document, certificate or instrument entered into or delivered in
connection therewith by any Financing Party or any Equity Party and any Secured
Party in connection with the Transaction, whether or not specifically mentioned
therein, provided that neither the Purchase Agreement nor any other agreement
between a Financing Party and the Initial Purchaser shall be a "Financing
Document."

                  "Financing Parties" means the Issuer and each Project Company.

                  "Fiscal Agent" means the fiscal agent, if any, designated
pursuant to the terms of the Policies.

                  "FPA" means the Federal Power Act, as amended.

                  "Fuel and Power Marketing Plan" means, with respect to a
Project Company, the Fuel and Power Marketing Plan attached as Exhibit A to the
Power Sales and Agency Agreement to which such Project Company is a party.

                  "Fuel Costs" means all costs associated with Fuel Products,
including imbalance charges and applicable taxes.

                  "Fuel Products" means Natural Gas supply and transportation
and other fuel and fuel-related products and services.

                  "Funding Project Company" has the meaning given to in Section
6.14 of the Common Agreement.

                  "Fundamental Project Event of Default" has the meaning given
in Section 7.3 of the Common Agreement.

                  "Funds Block Condition" means, in each case as applicable, any
Issuer Event of Default, Issuer Inchoate Default, Project Event of Default,
Project Inchoate Default, Inchoate Block Condition or Inchoate Project Block
Condition.

                  "GAAP" means generally accepted accounting principles in the
United States of America consistently applied.

                  "General Subject Claims" has the meaning given in Section
9.1(a) of the Common Agreement.

                  "Governmental Authority" means any applicable national, state
or local government (whether domestic or foreign), any political subdivision
thereof or any other governmental, quasi-governmental, judicial, public or
statutory instrumentality, authority, body, agency, bureau or entity (including
any zoning authority, FERC and the applicable PUC) or any arbitrator with
authority to bind a party at law.

                  "Governmental Rule" means any applicable law, rule,
regulation, ordinance, order, code interpretation, treaty, judgment, decree,
directive, guideline, policy or similar form of decision of any Governmental
Authority.

                                       17
<PAGE>

                  "Ground Lease" means each of the Rockford I Ground Lease, the
Rockford II Ground Lease and the Sterlington Ground Lease.

                  "Guaranteed Obligations" has the meaning given in Section
6.1(a) of the Common Agreement.

                  "Guaranty" means, in respect of a Project Company, its
guaranty pursuant to Article 6 of the Common Agreement.

                  "Hazardous Substance" means any of the following: (a) any
petroleum or petroleum product, explosives, radioactive materials, asbestos,
formaldehyde, polychlorinated biphenyls, lead or radon gas; or (b) any
substance, material, product, derivative, compound or mixture, mineral,
chemical, waste, gas, medical waste or pollutant that is regulated under or that
could reasonably be expected to support the assertion of a claim under any
Hazardous Substances Law, whether or not defined as hazardous under any
Hazardous Substances Laws.

                  "Hazardous Substances Law" means, any applicable law, statute,
ordinance, code, rule, regulation, license, permit, authorization, approval,
covenant, administrative or court order, judgment, decree, injunction, code or
requirement of or any agreement with, any Governmental Authority:

                  (a) relating to pollution (or the cleanup, removal or
         remediation thereof, or any other response thereto), human health,
         safety, natural resources or the environment, including ambient or
         indoor air, water vapor, surface water, groundwater, drinking water,
         land (including surface or subsurface), plant, aquatic and animal life;
         or

                  (b) concerning exposure to, or the use, containment, storage,
         recycling, treatment, generation, Release or threatened Release,
         transportation, processing, handling, labeling, containment,
         production, disposal or remediation of any Hazardous Substance,

in each case as amended and as now or hereafter in effect, and any common law or
equitable doctrine (including injunctive relief and tort doctrines such as
negligence, nuisance, trespass and strict liability) that may impose liability
or obligations for injuries (whether personal or property) or damages due to or
threatened as a result of the presence of, exposure to, or ingestion of, any
Hazardous Substance, whether such common law or equitable doctrine is now or
hereafter recognized or developed. "Hazardous Substances Laws" include CERCLA;
the Resource Conservation and Recovery Act of 1976, 42 U.S.C.ss.ss.6901 et seq.;
the Federal Water Pollution Control Act, 33 U.S.C.ss.ss.1251 et seq.; the Clean
Air Act, 42 U.S.C.ss.ss.7401 et seq.; the Refuse Act, 33 U.S.C.ss.ss.401 et
seq.; the Hazardous Materials Transportation Act of 1975, 49
U.S.C.ss.ss.1801-1812; the Toxic Substances Control Act, 15 U.S.C.ss.ss.2601 et
seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.ss.ss.136
et seq.; the Safe Drinking Water Act, 42 U.S.C.ss.ss.300 et seq.; and the
Occupational Safety and Health Act of 1970.

                  "Hedging Costs" means costs associated with options and other
hedging arrangements entered into in connection with the purchase, sale, resale
or other use of Energy Products and Services.

                                       18
<PAGE>

                  "Improvements" has the meaning given in the applicable
Mortgage.

                  "Inchoate Block Conditions" means, as of any date, that there
shall have occurred and be continuing an Issuer Inchoate Default or that an
Issuer Inchoate Default would have occurred if a Restricted Payment would have
been made on such date.

                  "Inchoate Project Block Condition" means, as of any date, that
there shall have occurred and be continuing a Project Inchoate Default or that a
Project Inchoate Default would have occurred if a Restricted Payment would have
been made on such date.

                  "Indemnitee" has the meaning given in Section 9.1(a) of the
Common Agreement.

                  "Indenture" means the Indenture, dated as of the Closing Date,
among the Issuer, the Project Companies, XLCA and the Trustee.

                  "Independent Consultants" means, collectively, the Insurance
Consultant, the Independent Engineer and the Power and Fuel Market Consultant.

                  "Independent Engineer" has the meaning given in Section
10.1(a) of the Common Agreement.

                  "Indexed Net Revenue" shall have the meaning set forth in
Appendix I to the Contingent Guaranty Agreement.

                  "Initial Purchaser" means Goldman Sachs International.

                  "Initial Restricted Payment Date" means any Annual Scheduled
Payment Date or any date within 30 days thereafter.

                  "Insurance and Reimbursement Agreement" means the Financial
Guaranty Insurance and Reimbursement Agreement, dated as of the Closing Date,
among XLCA, the Issuer and the Project Companies.

                  "Insurance Consultant" has the meaning given in Section
10.1(b) of the Common Agreement.

                  "Insurer Default" means the existence and continuance of any
of the following: (a) a failure by XLCA to make a payment when or as required
under the Policy in accordance with its terms or under the Swap Policy in
accordance with its terms; or (b)(i) XLCA (A) files any petition or commences
any case or proceeding under any provision or chapter of the Bankruptcy Law or
any other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization, (B) makes a general assignment
for the benefit of its creditors, or (C) has an order for relief entered against
it under the Bankruptcy Law or any other similar federal or state law relating
to insolvency, bankruptcy, rehabilitation, liquidation or reorganization which
is final and nonappealable; or (ii) a court of competent jurisdiction, the New
York Department of Insurance or other competent regulatory authority enters a
final and nonappealable order, judgment or decree (A) appointing a custodian,
trustee, agent or receiver for XLCA or for all or any material portion of its
property or (B) authorizing the taking of

                                       19
<PAGE>

possession by a custodian, trustee, agent or receiver of XLCA (or the taking of
possession of all or any material portion of the property of the XLCA).

                  "Interconnection Solution" means, with respect to the Big
Cajun I Units 3&4 Project, the implementation and effectiveness, in a manner
satisfactory to XLCA in its absolute discretion (if it is the Controlling
Party), of any of the following methods for obtaining direct contractual
electric interconnection access rights for the Big Cajun I Units 3&4 Project
with the Entergy transmission system (or any successor transmission system): (i)
the assignment of a portion of Louisiana Generating's rights under the Louisiana
Generating Interconnection Agreement to the Big Cajun Project Company; (ii) the
amendment of the Louisiana Generating Interconnection Agreement, as appropriate,
to include the Big Cajun I Units 3&4 Project and the Big Cajun Project Company;
(iii) the execution of a separate interconnection agreement directly between the
Big Cajun Project Company and Entergy or its relevant Affiliate (or any
successor thereto); or (iv) any other method of obtaining such direct
contractual electric interconnection access rights, in each case effected by
assignments, amendments or new agreements, as the case may be, and such other
documentation as XLCA (if it is the Controlling Party) shall reasonably request.

                  "Investment Grade" means, with respect to any debt instrument
or Person, a rating of at least Baa3 by Moody's and at least BBB- by S&P (or, in
each case, an equivalent rating by another nationally recognized credit rating
agency if either of such rating agencies is not then rating the subject debt
instrument or Person).

                  "Issuer" has the meaning given in the preamble to the Common
Agreement.

                  "Issuer Collateral" means, collectively, all real, personal
and mixed property which is subject or is intended to become subject to the
security interests or Liens granted pursuant to any of the Issuer Collateral
Documents; provided that "Issuer Collateral" shall not include any Released
Assets (as defined in any Issuer Collateral Document).

                  "Issuer Collateral Documents" means, collectively, the
Depositary Agreement, the Issuer Security Agreement, the Issuer Pledge
Agreement, any other agreement or instrument granting a Lien on the real,
personal and/or mixed property of Issuer in favor of the Collateral Agent for
the benefit of the Secured Parties, and any financing statements, notices and
the like filed, recorded or delivered in connection with the foregoing.

                  "Issuer Event of Default" has the meaning given in Section 7.1
of the Common Agreement.

                  "Issuer Inchoate Default" means any occurrence, circumstance
or event, or any combination thereof, which, with the lapse of time and/or the
giving of notice, would constitute an Issuer Event of Default.

                  "Issuer Material Adverse Effect" means:

                  (a) a material adverse change in the business, property,
         results of operation or financial condition of the Issuer and the
         Project Companies (taken as a whole); or

                                       20
<PAGE>

                  (b) any event or occurrence of whatever nature which could
         reasonably be expected to materially and adversely effect (i) the
         ability of the Issuer and the Project Companies (taken as a whole) to
         perform their respective obligations under any of the Financing
         Documents, or (ii) the validity or enforceability of the Operative
         Documents (taken as a whole); or

                  (c) any event or occurrence of whatever nature which could
         reasonably be expected to materially and adversely effect the validity
         and priority of the Secured Parties' security interests in the
         Collateral (taken as a whole);

provided that (i) any adverse change in the Natural Gas supply market or the
Power market after the Closing Date which could cause a change in the conditions
or market forecasts contained in the reports delivered on the Closing Date by
the Power and Fuel Market Consultant shall not be deemed to, in and of itself,
have an "Issuer Material Adverse Effect", and (ii) a downgrade in any rating
assigned to the Issuer, any Project Company, any Affiliate thereof, the
Obligations, the Transaction or any Tranche shall not be deemed to, in and of
itself, be an "Issuer Material Adverse Effect".

                  "Issuer Permitted Debt" means (a) Debt of the Issuer under the
Financing Documents (including Additional Bonds), (b) unsecured Debt which is
subordinated to the Obligations in accordance with the terms set forth in
Exhibit H to the Common Agreement, (c) unsecured guaranties by the Issuer of the
obligations of the Project Companies to pay Energy Transaction Costs (or,
without duplication, unsecured guaranties by the Issuer of NRG Power Marketing
to pay Energy Transaction Costs in connection with any transaction entered into
by NRG Power Marketing as principal in accordance with a Power Sales and Agency
Agreement), (d) the Subordinated Bonds, and (e) Project Company Permitted Debt
incurred by the Issuer and on-lent to the Project Companies.

                  "Issuer Permitted Liens" means, collectively, (a) the Lien,
security interests and related rights and interests of the Secured Parties as
provided in the Financing Documents (including Liens securing Additional Bonds);
(b) Liens for any tax, assessment or other governmental charge either not yet
due or being contested in good faith and by appropriate proceedings, so long as
(i) such proceedings shall not involve any substantial danger of the sale,
forfeiture or substantial loss of a Project, the related Site or any related
Easements, title thereto or any material interest therein and shall not
interfere in any material respect with the use or disposition of such Project,
Site or Easements, or (ii) a bond or other security reasonably acceptable to the
Collateral Agent has been posted or provided in such manner and amount as to
reasonably assure the Collateral Agent that any taxes, assessments or other
charges reasonably determined to be due will be promptly paid in full when such
contest is determined; (c) Liens arising out of judgments or awards so long as
an appeal or proceeding for review is being prosecuted in good faith and for the
payment of which adequate reserves, bonds or other security reasonably
acceptable to the Collateral Agent have been provided or the payment of which is
fully covered by insurance reasonably acceptable to the Collateral Agent; (d)
Liens securing the Subordinated Bonds on terms set forth in Exhibit I to the
Common Agreement; (e) Liens securing the Issuer Permitted Debt referred to in
paragraph (e) of the definition of Issuer Permitted Debt to the extent the
applicable Project Company Permitted Debt is permitted to be secured, and (f)
Liens contemplated in Section 9.01(2) of the Indenture.

                                       21
<PAGE>

                  "Issuer Pledge Agreement" means the Issuer Pledge Agreement,
dated as of the Closing Date, among the Issuer, NRG Capital II LLC and the
Collateral Agent.

                  "Issuer Security Agreement" means the Issuer Security
Agreement, dated as of the Closing Date, between the Issuer and the Collateral
Agent.

                  "Late Payment Rate" means the lesser of (a) the greater of the
per annum rate of interest, publicly announced from time to time by The Bank of
New York in New York City, as its prime rate plus 2%, and (b) the maximum rate
permissible under applicable usury or similar laws limiting interest rates. The
Late Payment Rate shall be computed on the basis of a 360 day year for the
actual number of days elapsed for such period. The Late Payment Rate shall be
calculated, in good faith, by the Calculation Agent.

                  "Lease Estoppels" means, collectively, the Rockford I Lease
Estoppel, the Rockford II Lease Estoppel and the Sterlington Lease Estoppel.

                  "Legal Requirement" means, as to any Person, the articles of
incorporation, bylaws or other organizational or governing documents of such
Person, and any requirement under a Permit, and any Governmental Rule, in each
case applicable to or binding upon such Person or any of its properties or to
which such Person or any of its property is subject.

                  "Lien" means, with respect to an asset, any mortgage, deed of
trust, lien, pledge, charge, security interest, easement or encumbrance of any
kind in respect of such asset, whether or not filed, recorded or otherwise
perfected or effective under applicable law, as well as the interest of a vendor
or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.

                  "Liquidated Damages" means, collectively, Delay Liquidated
Damages and Performance Liquidated Damages.

                  "Loan Life Coverage Ratio" means, for any period, (i) the sum
of Cash Available for Debt Service for all remaining Scheduled Debt Service
Payment periods, divided by (ii) the sum of all remaining unpaid Scheduled Debt
Service Payments.

                  "LOC Substitution Date" means any date upon which an
Acceptable Letter of Credit is provided to the Collateral Agent instead of, or
in replacement of, cash on deposit in any Account or Cash Collateral Account, as
the case may be.

                  "Loss Proceeds" means, collectively, Casualty Insurance
Proceeds and Condemnation Proceeds.

                  "Loss Proceeds Account" has the meaning given in Section 2.1
of the Depositary Agreement.

                  "Louisiana Generating" means Louisiana Generating LLC, a
Delaware limited liability company.

                                       22
<PAGE>

                  "Louisiana Generating Interconnection Agreement" means the
Interconnection and Operating Agreement between Louisiana Generating and Entergy
Gulf States, Inc. filed with FERC on June 11, 2002.

                  "MAIN Market Region" means the region covered by the
Mid-America Interconnected Network regional reliability council.

                  "Major FSAs" with respect to a Project Company, has the
meaning given in the Fuel and Power Marketing Plan attached as Exhibit A to the
Power Sales and Agency Agreement to which such Project Company is a Party.

                  "Major FTAs" with respect to a Project Company, has the
meaning given in the Fuel and Power Marketing Plan attached as Exhibit A to the
Power Sales and Agency Agreement to which such Project Company is a Party.

                  "Major Power Purchase Agreement" with respect to a Project
Company, has the meaning given in the Fuel and Power Marketing Plan attached as
Exhibit A to the Power Sales and Agency Agreement to which such Project Company
is a Party.

                  "Major Project Documents" means (a) in respect of the Bayou
Cove Project and the Bayou Cove Project Company, the Bayou Cove Major Project
Documents, (b) in respect of the Big Cajun I Units 3&4 Project and the Big Cajun
Project Company, the Big Cajun Units 3&4 Major Project Documents, (c) in respect
of the Sterlington Project and the Sterlington Project Company, the Sterlington
Major Project Documents, (d) in respect of the Rockford I Project and the
Rockford I Project Company, the Rockford I Major Project Documents, and (e) in
respect of the Rockford II Project and the Rockford II Project Company, the
Rockford II Major Project Documents.

                  "Major Project Participants" means, with respect to a Project,
the Project Company that owns such Project and each other party to the Major
Project Documents entered into for such Project.

                  "Mezzanine Tranche" means the portion of the Policy initially
insuring $332,352,000 of principal and interest in respect of the Series A Bonds
representing the second loss layer of the Policy to be drawn in the event of a
Policy Payment.

                  "Monthly Date" means the 10th day of each month.

                  "Moody's" means Moody's Investors Service, Inc., or any
successor thereto, and, if such corporation shall for any reason no longer
perform the functions of a securities rating agency, "Moody's" shall be deemed
to refer to any other nationally recognized rating agency designated by the
Issuer; provided, that with respect to the rating of the Bonds, the designation
shall be with the consent of XLCA (if XLCA shall be the Controlling Party).

                  "Mortgaged Properties" has the meaning given in the applicable
Mortgage.

                  "Mortgages" means, collectively, each of the mortgages
encumbering the Sites and/or Easements related to the Projects as security for
the Guaranteed Obligations.

                                       23
<PAGE>

                  "Natural Gas" any mixture of hydrocarbons and non-combustible
gases as a gaseous state consisting primarily of methane.

                  "Net Peaker Buyout Proceeds" means Peaker Buyout Proceeds
minus Peaker Buyout Profits.

                  "New Revolving Credit Facility" means a new revolving credit
facility entered into by NRG Energy which refinances all outstanding loans and
commitments under the 364 Day Revolver or any New Revolving Credit Facility.

                  "Nondisturbance Agreements" means, collectively, the Rockford
I Non-Disturbance Agreement and the Rockford II Non-Disturbance Agreement.

                  "Non-Funding Project Company" has the meaning given in Section
6.14 of the Common Agreement.

                  "Nonrecourse Persons" has the meaning given in Article 8 of
the Common Agreement.

                  "Notice" has the meaning assigned to such term in the
Policies.

                  "NRG Credit Risk Policy" with respect to a Project Company,
has the meaning given in the Power Sales and Agency Agreement to which such
Project Company is a party.

                  "NRG Energy" means NRG Energy, Inc., a Delaware corporation.

                  "NRG Energy Material Adverse Effect" means:

                  (a) a material adverse change in the business, property,
         results of operations or financial condition of NRG Energy; or

                  (b) any event or occurrence of whatever nature which could
         reasonably be expected to materially and adversely effect (i) the
         ability of NRG Energy to perform its obligations under the Contingent
         Guaranty Agreement or (ii) the validity or enforceability of the
         Contingent Guaranty Agreement;

provided that a downgrade in any rating assigned to NRG Energy or its debt
obligations shall not be deemed, in and of itself, to be a "NRG Energy Material
Adverse Effect".

                  "NRG Event of Default" has the meaning given in Section 13 of
the Contingent Guaranty Agreement.

                  "NRG Guaranteed Obligations" has the meaning given in Section
2 of the Contingent Guaranty Agreement.

                  "NRG Permitted Liens" means, collectively, (a) Liens for any
tax, assessment or other governmental charge either not yet due or being
contested in good faith and by appropriate proceedings, so long as (i) such
proceedings shall not involve any substantial danger of the sale,

                                       24
<PAGE>

forfeiture or substantial loss of a Project, the related Site or any related
Easements, title thereto or any material interest therein and shall not
interfere in any material respect with the use or disposition of such Project,
Site or Easements, or (ii) a bond or other security reasonably acceptable to the
Collateral Agent has been posted or provided in such manner and amount as to
reasonably assure the Collateral Agent that any taxes, assessments or other
charges reasonably determined to be due will be promptly paid in full when such
contest is determined; and (b) Liens arising out of judgments or awards so long
as an appeal or proceeding for review is being prosecuted in good faith and for
the payment of which adequate reserves, bonds or other security reasonably
acceptable to the Collateral Agent have been provided or the payment of which is
fully covered by insurance reasonably acceptable to the Collateral Agent.

                  "NRG Power Marketing" means NRG Power Marketing, Inc., a
Delaware corporation.

                  "NRG South Central" means NRG South Central Generating LLC, a
Delaware limited liability company.

                  "NRG Support Obligations" has the meaning given in Section 2
of the Contingent Guaranty Agreement.

                  "Obligations" means the Bond Obligations, the Reimbursement
Obligations, the Depositary Obligations, the Swap Obligations and the
obligations of each Project Company under its Guaranty.

                  "Offering Circular" means the final offering circular, dated
June 14, 2002, in respect of the Series A Bonds and, unless otherwise stated,
the Preliminary Offering Circular.

                  "Operating Costs" means, collectively, Stipulated O&M Costs
and Energy Transaction Costs.

                  "Operating Revenues" means, collectively, (a) all payments
received by the Project Companies under the Project Documents (excluding Loss
Proceeds required to be deposited in the Loss Proceeds Account), (b) income
derived from the sale, resale or other use of Energy Products and Services by,
or on behalf of, the Project Companies, (c) proceeds of business interruption
insurance or similar insurance, and (d) earnings on Permitted Investments, in
each case as determined in conformity with cash accounting principles and
subject to netting requirements (if any) contained in the Project Documents;
provided, that "Operating Revenues" shall not include Excluded Revenues.

                  "Operative Documents" means the Financing Documents and the
Project Documents.

                  "Optional Redemption" has the meaning given in the Indenture.

                  "Other Energy-Related Products and Services" means ancillary
services, emissions credits, conversion services and other related products and
services.

                                       25
<PAGE>

                  "Other Undertakings" has the meaning given in Section 2 of the
Contingent Guaranty Agreement.

                  "PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under Title IV of ERISA.

                  "Peaker Buyout" means either (a) the sale, transfer or other
disposition by a Project Company or all or substantially all of its assets or
(b) the sale, transfer or other disposition by NRG Energy of 100% of its direct
or indirect interests in any Project Company.

                  "Peaker Buyout Proceeds" means all proceeds received by NRG
Energy or any of its Affiliates in connection with a Peaker Buyout.

                  "Peaker Buyout Profits" means, in connection with a Peaker
Buyout, (i) Peaker Buyout Proceeds associated therewith, minus (ii) the
aggregate amount of payments required to be made by the Issuer and the Project
Companies under the Financing Documents in connection with such Peaker Buyout
(including such payments as are set out in the definition of Permitted Peaker
Buyout (Completion / Loss Event) and clause (i) of the definition of Permitted
Peaker Buyout (Peaker Sale / Project Event of Default) but excluding such
payments as are set out in clause (ii) of the definition of Permitted Peaker
Buyout (Peaker Sale / Project Event of Default)).

                  "Peaker Collateralization" means, with respect to a Project
Company, the deposit into the Peaker Collateralization Account of an amount in
cash or an Acceptable Letter of Credit equal to at least the Allocation
Percentage Buyout Amount, using Loss Proceeds and/or other funds not comprising
the Collateral.

                  "Peaker Collateralization Account" has the meaning given in
Section 2.1 of Depositary Agreement.

                  "Performance Liquidated Damages" means all amounts paid under
a Project Document as liquidated damages for failure of a Project to meet the
performance or other guarantees (excluding schedule guarantees) specified in
such Project Document, including amounts paid under guaranties, letters of
credit and other support instruments for such purposes.

                  "Performance Shortfall" has the meaning given in Appendix I to
the Contingent Guaranty Agreement.

                  "Performance Shortfall Payment" has the meaning given in
Section 2.1 of the Contingent Guaranty Agreement.

                  "Permit" means any applicable permit, authorization,
registration, notice to and declaration of or with, consent, approval, waiver,
exception, variance, order, judgment, decree, license, exemption or filing,
required by or from any Governmental Authority, or required by any Legal
Requirement, and shall include any environmental or operating permit or license
that is required for the full use, occupancy, zoning and operation of a Project.

                  "Permit Schedule" has the meaning given in Section 3.1(bb)(i)
of the Insurance and Reimbursement Agreement.

                                       26
<PAGE>

                  "Permitted Change of Control" means a sale, transfer or other
disposition of no more than 50% of NRG Energy's direct or indirect interests in
the Issuer or any Project Company in respect of which the Permitted Change of
Control Conditions have been satisfied.

                  "Permitted Change of Control Conditions" means, in respect of
any sale, transfer or other disposition of no more than 50% of NRG Energy's
direct or indirect interests in the Issuer or any Project Company, that after
giving effect to such sale, transfer or other disposition, (i) each Project, and
all other Collateral, remains part of the Collateral, (ii) NRG Energy shall
directly or indirectly control (or control equally and jointly with another
Person) the fundamental management decisions of the Project Companies (it being
acknowledged that the possession by a Person other than NRG Energy of a veto
power over material events with respect to such Project Company (e.g.,
dissolution of such Project Company, merger or consolidation of such Project
Company, sale of all or substantially all assets of such Project Company,
material amendments to such Project Company's organizational documents) shall
not in and of itself constitute a failure by NRG Energy to directly or
indirectly control the fundamental management decisions of such Project
Company), (iii) each Project Company remains obligated under its Guaranty, and
(iv) either (x) NRG Energy shall remain obligated to XLCA under the Contingent
Guaranty Agreement and any other Financing Document to which it is a party, or
(y) the buyer (A) has assumed Associated Support Obligations with respect to the
transferred ownership interests by executing an assignment and assumption
agreement in form and substance reasonably satisfactory to XLCA (if XLCA is the
Controlling Party), (B) if XLCA is the Controlling Party, has provided opinions
of counsel (which may be in-house counsel) to XLCA in respect of customary
matters (i.e., formation, requisite authority, due authorization, execution and
delivery, enforceability, the absence of conflicts, consents and litigation)
relating to it and such assignment and assumption, and (C) such buyer is either
(x) rated at least A3 by Moody's and A- by S&P, or (y) is rated at least Baa2 by
Moody's and BBB by S&P and has provided cash, Acceptable Letters of Credit or
other credit support acceptable to the Controlling Party (acting in its sole
discretion) with respect to that portion of the NRG Guaranteed Obligations under
Section 2.3 of the Contingent Guaranty Agreement assumed by the buyer.

                  "Permitted Encumbrances" means, with respect to a Project,
those liens, encumbrances or other exceptions to title specified on a Title
Policy delivered pursuant to Section 3.1(dd) of the Insurance and Reimbursement
Agreement (it being understood that the exceptions to title appearing on said
Title Policy shall be reasonably acceptable to XLCA).

                  "Permitted Investments" means any of the following:

                  (a) securities issued or directly and fully guaranteed or
         insured by the United States of America or any agency or
         instrumentality thereof (provided that the full faith and credit of the
         United States of America is pledged in support thereof) having a
         maturity not exceeding one year from the date of issuance;

                  (b) time deposits and certificates of deposit of any domestic
         commercial bank rated at least A-1 or the equivalent thereof by S&P or
         at least P-1 or the equivalent thereof by Moody's having capital and
         surplus in excess of $250,000,000;

                                       27
<PAGE>

                  (c) fully secured repurchase obligations with a term of not
         more than 7 days for underlying securities of the types described in
         clause (a) above entered into with any bank meeting the qualifications
         established in clause (b) above;

                  (d) commercial paper of any corporation rated at least A-1 or
         the equivalent thereof by S&P or at least P-1 or the equivalent thereof
         by Moody's and in each case, having a maturity not exceeding 90 days
         from the date of acquisition;

                  (e) commercial paper of any domestic corporation rated at
         least A-2 or the equivalent thereof by S&P or at least P-2 or the
         equivalent thereof by Moody's and, in each case having a maturity not
         exceeding 90 days from the date of acquisition (provided that the
         aggregate amount of any such commercial paper of any single issuer
         thereof shall not exceed $3,000,000);

                  (f) fully secured repurchase obligations with a term of not
         more than 7 days for underlying securities of the types described in
         clause (a) above entered into with any bank meeting the qualifications
         established in clause (b) above; and

                  (g) money market mutual funds.

provided, however, that Permitted Investments shall not include any commercial
paper, notes, bonds or other securities of any kind of NRG Energy or any
Affiliate of NRG Energy.

                  "Permitted Liens" means Issuer Permitted Liens and Project
Company Permitted Liens.

                  "Permitted Peaker Buyout" means a Permitted Peaker Buyout
(Completion / Loss Event) or a Permitted Peaker Buyout (Peaker Sale / Project
Event of Default), as applicable.

                  "Permitted Peaker Buyout (Completion / Loss Event)" means a
Peaker Buyout for which the following conditions are satisfied:

                  (i) such Peaker Buyout is effected to cure an Issuer Event of
         Default under Section 7.1(n) or 7.1(o) of the Common Agreement; and

                  (ii) the Issuer redeems Series A Bonds in accordance with
         Article 12 of the Indenture in a principal amount equal to at least the
         Allocation Percentage Buyout Amount for such Project Company and pays
         all Swap Breakage Costs associated with such redemption, using Peaker
         Buyout Proceeds from such Peaker Buyout (if any) and/or other funds not
         comprising the Collateral.

                  "Permitted Peaker Buyout (Peaker Sale / Project Event of
Default)" means a Peaker Buyout for which the following conditions are
satisfied:

                  (i) (A) if the Allocation Percentage for the applicable
         Project Company is greater than the Experience Amount Percentage for
         such Project Company, the Issuer redeems Series A Bonds in accordance
         with Article 12 of the Indenture in a principal amount equal to at
         least the Allocation Percentage Buyout Amount, and pays the

                                       28
<PAGE>

         Redemption Premium and all Swap Breakage Costs associated with such
         redemption, using Peaker Buyout Proceeds from such Peaker Buyout (if
         any) and/or other funds not comprising the Collateral, or (B) if the
         Experience Amount Percentage for such Project Company is greater than
         the Allocation Percentage for such Project Company, one of the
         following three conditions (as selected by the Issuer) is satisfied:
         (1) the Issuer redeems Series A Bonds in accordance with Article 12 of
         the Indenture in a principal amount equal to the Experience Amount
         Percentage for such Project Company multiplied by the aggregate
         principal amount of Series A Bonds then Outstanding (as defined in the
         Indenture), and pays the Redemption Premium and all Swap Breakage Costs
         associated with such redemption, using Peaker Buyout Proceeds from such
         Peaker Buyout (if any) and/or other funds not comprising the
         Collateral; (2) the Issuer redeems Series A Bonds in accordance with
         Article 12 of the Indenture in a principal amount equal to at least the
         Allocation Percentage Buyout Amount, and pays the Redemption Premium
         and all Swap Breakage Costs associated with such redemption, using
         Peaker Buyout Proceeds from such Peaker Buyout (if any) and/or other
         funds not comprising Collateral and, prior to the consummation of such
         Peaker Buyout, Moody's or S&P confirms in writing that such Peaker
         Buyout will not result in the Shadow Ratings of (w) the Series A Bonds
         being lower than Ba2 (if rated by Moody's) or BB (if rated by S&P), (x)
         the Senior Tranche being lower than A1 (if rated by Moody's) or A (if
         rated by S&P), (y) the Mezzanine Tranche being lower than Ba1 (if rated
         by Moody's) or BBB- (if rated by S&P), and (z) the Subordinated Tranche
         being lower than B2 (if rated by Moody's) or BB (if rated by S&P); or
         (3) the Issuer redeems Series A Bonds in accordance with Article 12 of
         the Indenture in a principal amount equal to at least the Allocation
         Percentage Buyout Amount, and pays the Redemption Premium and all Swap
         Breakage Costs associated with such redemption, using Peaker Buyout
         Proceeds from such Peaker Buyout (if any) and/or other funds not
         comprising Collateral and the Loan Life Coverage Ratio (calculated
         using current market projections from the Power and Fuel Market
         Consultant), after giving effect to such Peaker Buyout, is at least
         1.50 to 1.00;

                  (ii) if on the date of the consummation of such Peaker Buyout,
         the amount of Available Collateralized Experience Funds is less than
         the Collateralized Experience Amount as of the immediately preceding
         Annual Scheduled Payment Date (or as of the Closing Date if the first
         Annual Scheduled Payment Date has not occurred), an amount of funds
         equal to the lesser of (x) the amount of such deficiency in the
         Collateralized Experience Account and (y) the amount of Peaker Buyout
         Profits received in connection with such Peaker Buyout is deposited
         into the Collateralized Experience Account;

                  (iii) after giving effect to such Peaker Buyout, (A) the
         number of Projects comprising the Collateral is at least three and (B)
         at least one remaining Project comprising the Collateral is located in
         each of the MAIN Market Region and the SERC Market Region;

                  (iv) no Issuer Event of Default has occurred and is continuing
         (other than an Issuer Event of Default relating solely to the Project
         or Project Company involved in such Peaker Buyout which is cured or
         eliminated by such Peaker Buyout); and

                                       29
<PAGE>

                  (v) if XLCA is the Controlling Party and such Peaker Buyout is
         with respect to the Rockford I Project, Rockford I Project Company,
         Rockford II Project or Rockford II Project Company, such agreements for
         the sharing of facilities for the Rockford I Project and the Rockford
         II Project as reasonably requested by XLCA are entered into by the
         Rockford I Project Company and the Rockford II Project Company on or
         prior to the consummation of such Peaker Buyout.

                  "Person" means any natural person, corporation, partnership,
limited liability company, firm, association, Governmental Authority or any
other entity whether acting in an individual, fiduciary or other capacity.

                  "Pledgor" means any Person pledging its interests (a) in a
Project Company or in the Rockford II Equipment Company under a Project Company
Pledge Agreement, or (b) in the Issuer under the Issuer Pledge Agreement
(collectively the "Pledgors").

                  "Policies" means the Policy and the Swap Policy.

                  "Policy" means the Financial Guaranty Insurance Policy,
including any endorsements thereto, issued by XLCA with respect to the Series A
Bonds, dated as of the Closing Date, substantially in the form of Appendix I to
the Insurance and Reimbursement Agreement.

                  "Policy Payment" has the meaning given in Section 4.1(a) of
the Insurance and Reimbursement Agreement.

                  "Policy Termination Date" means the Termination Date as
defined in the Policy.

                  "Power" means electric capacity, electric energy and/or
ancillary services.

                  "Power and Fuel Market Consultant" has the meaning given in
Section 10.1(c) of the Common Agreement.

                  "Power Sales and Agency Agreement" means, individually or
collectively, as the context requires, (i) the Bayou Cove PSA Agreement, (ii)
the Big Cajun PSA Agreement, (iii) the Rockford I PSA Agreement, (iv) the
Rockford II PSA Agreement and (v) the Sterlington PSA Agreement.

                  "Preference Claim" has the meaning given in Section 7.4(c) of
the Common Agreement.

                  "Preliminary Offering Circular" means the first preliminary
offering circular, dated May 24, 2002, and the second preliminary offering
circular, dated June 13, 2002, each in respect of the Series A Bonds.

                  "Premium" means the insurance premium (including any
additional premium) payable in respect of the Policy by the Issuer in accordance
with the Premium Letter and the Insurance and Reimbursement Agreement.

                                       30
<PAGE>

                  "Premium Letter" means the side letter, dated as of the
Closing Date, among XLCA, the Issuer and the Project Companies entered into in
consideration of the issuance of the Policies.

                  "Premiums" means the Policy Premium and the Swap Policy
Premium.

                  "Pricing Date" means the date of the Purchase Agreement.

                  "Project Companies" means, collectively, the Bayou Cove
Project Company, the Big Cajun Project Company, the Rockford I Project Company,
the Rockford II Project Company, and the Sterlington Project Company (each,
individually, a "Project Company"); provided that upon the occurrence of a
Project Release Event with respect to a Project Company, such Project Company
will no longer be a "Project Company" under the Financing Documents.

                  "Project Company Blocked Amount" means, in respect of a
Project Company and in connection with a proposed Restricted Payment pursuant to
Section 4.5 of the Common Agreement, an amount in Dollars equal to the Account
Funds that would have been available for the making of a Restricted Payment
pursuant to Section 4.5(a) of the Common Agreement had no Project Event of
Default or Project Inchoate Default occurred and be continuing multiplied by
such Project Company's Allocation Percentage.

                  "Project Company Collateral" means, with respect to a Project
Company or the Rockford II Equipment Company, all real, personal and mixed
property which is subject or is intended to become subject to the security
interests or Liens granted pursuant to the Project Company Collateral Documents
for such Project Company or the Rockford II Equipment Company; provided that
"Project Company Collateral" shall not include any Released Assets (as defined
in each Project Company Collateral Document).

                  "Project Company Collateral Documents" means, collectively,
the Mortgages, the Depositary Agreement, the Project Company Security
Agreements, the Project Company Pledge Agreements, any other agreement or
instrument granting a Lien on the real, personal and/or mixed property of a
Project Company or the Rockford II Equipment Company in favor of the Collateral
Agent for the benefit of the Secured Parties, and any subordination agreements,
financing statements, notices and the like filed, recorded or delivered in
connection with the foregoing.

                  "Project Company Permitted Debt" means, with respect to a
Project Company, (a) Debt under the Operative Documents to which such Project
Company is a party (including guarantees of the Additional Bonds), (b) trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts
payable or accrued expenses incurred are (i) payable within 90 days of the date
the respective goods are delivered or the respective services are rendered or
(ii) being contested in good faith by appropriate proceedings and adequate
reserves with respect thereto shall, to the extent required by GAAP, have been
set aside, (c) purchase money obligations and Capital Lease Obligations incurred
to finance discrete items of equipment not comprising an integral part of its
Project that extend only to the equipment being financed in an aggregate not
exceeding $5,000,000 at any one time outstanding for such Project Company, (d)
obligations in respect of

                                       31
<PAGE>

surety bonds or similar instruments in an aggregate amount not exceeding
$5,000,000 at any one time outstanding for such Project Company, (e) unsecured
Debt which is subordinated to the Obligations in accordance with the terms set
forth in Exhibit H to the Common Agreement, and (f) guaranties of Issuer
Permitted Debt and Project Company Permitted Debt.

                  "Project Company Permitted Liens" means, in respect of a
Project Company or the Rockford II Equipment Company, (a) the rights and
interests of the Secured Parties as provided in the Financing Documents; (b)
Liens for any tax, assessment or other governmental charge either not yet due or
being contested in good faith and by appropriate proceedings, so long as (i)
such proceedings shall not involve any substantial danger of the sale,
forfeiture or substantial loss of its Project, the related Site or any related
Easements, title thereto or any material interest therein and shall not
interfere in any material respect with the use or disposition of such Project,
Site or Easements, or (ii) a bond or other security (including funds that have
been withheld or reserved) reasonably acceptable to the Collateral Agent has
been posted or provided in such manner and amount as to reasonably assure the
Collateral Agent that any taxes, assessments or other charges determined to be
due will be promptly paid in full when such contest is determined; (c)
materialmen's, mechanics', workers', repairmen, employees' or other like Liens,
junior in right of payment to the Lien of the Project Company Collateral
Documents or for which the Secured Parties are otherwise indemnified, arising in
the ordinary course of business or in connection with the construction of the
Project, either for amounts not yet due or for amounts being contested in good
faith and by appropriate proceedings, so long as (i) such proceedings shall not
involve any substantial danger of the sale, forfeiture or substantial loss of
such Project, the related Site or any related Easements, title thereto or any
material interest therein and shall not interfere in any material respect with
the use or disposition of such Project, Site or Easements, or (ii) a bond or
other security reasonably acceptable to the Collateral Agent has been posted or
provided in such manner and amount as to reasonably assure the Collateral Agent
that any amounts determined to be due will be promptly paid in full when such
contest is determined; (d) Liens arising out of judgments or awards so long as
an appeal or proceeding for review is being prosecuted in good faith and for the
payment of which adequate reserves, bonds or other security reasonably
acceptable to the Collateral Agent have been provided or the payment of which is
fully covered by insurance reasonably acceptable to the Collateral Agent; (e)
Permitted Encumbrances; (f) Liens, deposits or pledges to secure statutory
obligations or performance of bids, tenders, contracts (other than for the
repayment of borrowed money) or leases, or for purposes of like general nature
in the ordinary course of its business, not to exceed $5,000,000 in the
aggregate at any time for such Project Company, and with any such Lien to be
released as promptly as practicable; (g) other Liens incident to the ordinary
course of business that are not incurred in connection with the obtaining of any
loan, advance or credit and that do not in the aggregate materially impair the
use of the property or assets of Project Company or the value of such property
or assets for the purposes of such business; (h) Liens securing Project Company
Permitted Debt described to in paragraph (c) of the definition thereof; (i)
Liens securing the Project Company Permitted Debt described in paragraph (f) of
the definition thereof to the extent the applicable Issuer Permitted Debt or
Project Company Permitted Debt is permitted to be secured; (j) Liens
contemplated in Section 5.10 (a)(ii) of the Common Agreement; and (k) Liens
disclosed on Schedule 3.1 of the Insurance and Reimbursement Agreement.

                                       32
<PAGE>

                  "Project Company Pledge Agreements" means the Project Company
Pledge Agreements, dated as of the Closing Date, among the applicable Pledgor,
the applicable Project Company and, as applicable, the Rockford II Equipment
Company, and the Collateral Agent.

                  "Project Company Security Agreements" means (a) the Project
Company Security Agreements, dated as of the Closing Date, between the
applicable Project Company and the Collateral Agent, and (b) the Rockford II
Equipment Security Agreement, dated as of the Closing Date, between Rockford II
Equipment Company and the Collateral Agent.

                  "Project Completion" means:

                  (a) with respect to the Bayou Cove Project, the occurrence of
         each of (i) the Acceptance of the Facilities (as defined in the Bayou
         Cove EPC Agreement (Balance of Plant)), (ii) the final acceptance and
         commissioning of the Project (as defined in) Bayou Cove EPC Agreement
         (Electric Interconnection Facilities)), (iii) the construction,
         installation, testing, commissioning and completion of the Bayou Cove
         Electric Interconnection Facilities and the Interconnecting Facilities
         (as defined in the Bayou Cove Gas Interconnection Agreement), to the
         extent not covered in the Bayou Cove EPC Agreement (Balance of Plant),
         (iv) the construction, installation, testing, commissioning and
         completion of the water well required to supply the Bayou Cove Project
         with water, and (v) the completion of any other work relating to the
         engineering, procurement, construction, installation, testing, and
         commissioning of the Bayou Cove Project, inclusive of all gas and
         electric interconnection points and water supply and wastewater
         discharge arrangements, such that the Bayou Cove Project is capable of
         (A) receiving all Natural Gas required to operate in accordance with
         the Bayou Cove Project Documents, and (B) delivering electricity to the
         point of interconnection designated in the Bayou Cove Project
         Documents, in each case while in compliance with all applicable Legal
         Requirements, Permits and the Bayou Cove Project Documents; and

                  (b) with respect to the Rockford II Project, the occurrence of
         each of (i) Final Acceptance (as defined in the Rockford II Combustion
         Turbine Equipment Supply Contract), (ii) the delivery of all equipment
         required to be delivered pursuant to the Rockford II Transformer
         Purchase Documents, (iii) the delivery of the Notice of Completion (as
         defined in the Rockford II Construction Contract) by the Rockford II
         Project Company, (iv) the termination of the Rockford II Construction
         Management Services Agreement, (v) the design, construction,
         installation, testing, commissioning and completion of the
         Interconnection Facilities (as defined in the Rockford II Electric
         Interconnection Agreement), (vi) the delivery of the Mechanical
         Acceptance notice (as defined in the Rockford II Gas Interconnection
         Agreement) by the Rockford II Project Company, and (vii) the completion
         of any other work relating to the engineering, procurement,
         construction, installation, testing, and commissioning of the Rockford
         II Project, inclusive of all gas and electric interconnection points
         and water supply and wastewater discharge arrangements, such that the
         Rockford II Project is capable of (A) receiving all Natural Gas
         required to operate in accordance with the Rockford II Project
         Documents, and (B) delivering electricity to the point of
         interconnection designated in the Rockford II Project Documents, in
         each case while in compliance with all applicable Legal Requirements,
         Permits and the Rockford II Project Documents.

                                       33
<PAGE>

                  "Project Document Action" has the meaning given in Section
5.11(a) of the Common Agreement.

                  "Project Documents" means, with respect to a Project, all
Major Project Documents for such Project and all other contracts, agreements,
instruments and other documents related to the development, design, engineering,
construction, use, operation, maintenance, improvement, ownership and/or
acquisition of such Project.

                  "Project Event of Default" has the meaning given in Section
7.2 of the Common Agreement.

                  "Project Inchoate Default" means any occurrence, circumstance
or event, or any combination thereof, which, with the lapse of time or giving of
notice, would constitute a Project Event of Default.

                  "Project Loan Agreements" means, collectively, (a) the Project
Loan Agreement, dated as of the Closing Date, between the Issuer and the Bayou
Cove Project Company, (b) the Project Loan Agreement, dated as of the Closing
Date, between the Issuer and the Rockford I Project Company, and (c) the Project
Loan Agreement, dated as of the Closing Date, between the Issuer and the
Rockford II Project Company.

                  "Project Loan Amount" means (a) in respect of the Bayou Cove
Project Company, $107,353,000, (b) in respect of the Rockford I Project Company,
$111,867,000, and (c) in respect of the Rockford II Project Company
$105,780,000.

                  "Project Loan Notes" means, collectively, (a) the promissory
note issued by the Bayou Cove Project Company to the Issuer on the Closing Date
pursuant to the Project Loan Agreement to which the Bayou Cove Project Company
is a party, (b) the promissory note issued by the Rockford I Project Company to
the Issuer on the Closing Date pursuant to the Project Loan Agreement to which
the Rockford I Project Company is a party, and (c) the promissory note issued by
the Rockford II Project Company to the Issuer on the Closing Date pursuant to
the Project Loan Agreement to which the Rockford II Project Company is a party.

                  "Project Material Adverse Effect" means, with respect to an
individual Project and the related Project Company:

                  (a) a material adverse change in the business, property,
         results of operations or financial condition of such Project or Project
         Company;

                  (b) any event or occurrence of whatever nature which could
         reasonably be expected to materially and adversely effect (i) the
         ability of such Project Company to perform its obligations under any of
         the Financing Documents, or (ii) the validity or enforceability of the
         Financing Documents and the Major Project Documents to which such
         Project Company is a party or by which it or any of its assets is bound
         (taken as a whole); or

                                       34
<PAGE>

                  (c) any event or occurrence of whatever nature which could
         reasonably be expected to materially and adversely effect the validity
         and priority of Secured Parties' security interests in the Project
         Company Collateral related to such Project;

provided that (i) any adverse change in the Natural Gas supply market or the
Power market after the Closing Date which could cause a change in the conditions
or market forecasts contained in the reports delivered on the Closing Date by
the Power and Fuel Market Consultant with respect to such Project shall not be
deemed to, in and of itself, have a "Project Material Adverse Effect", and (ii)
a downgrade in any rating assigned to such Project Company, any Affiliate
thereof, the Obligations or the Transaction or any Tranche shall not be deemed
to, in and of itself, be a "Project Material Adverse Effect."

                  "Project Release Event" means, with respect to a Project
Company, the earlier to occur of (a) the indefeasible payment or satisfaction in
full in cash of all the Obligations and (b) the occurrence of a Permitted Peaker
Buyout with respect to such Project Company and/or its Project. A Project
Release Event with respect to the Rockford II Project Company shall be deemed
also to be a Project Release Event with respect to the Rockford II Equipment
Company.

                  "Project Revenues" means, collectively, (a) income and
receipts of the Project Companies derived from the ownership or operation of the
Projects and other payments received by the Project Companies under the Project
Documents (including Loss Proceeds), (b) proceeds of any business interruption
insurance or other insurance, (c) income derived from the sale, resale or other
use of Energy Products and Services by, or on behalf of, the Project Companies,
(d) unscheduled payments received by the Issuer under the Swap Agreement, (e)
receipts derived from the sale of any property pertaining to the Projects or
incidental to the operation of the Projects, (f) earnings on Permitted
Investments, and (g) proceeds from the Collateral Documents with respect to the
Projects, in each case as determined in conformity with cash accounting
principles and subject to netting requirements (if any) contained in the Project
Documents; provided, that "Project Revenues" shall not include Excluded
Revenues.

                  "Projects" means, collectively, the Bayou Cove Project, the
Big Cajun I Units 3&4 Project, the Rockford I Project, the Rockford II Project
and the Sterlington Project (each, individually, a "Project"); provided that
upon the occurrence of a Project Release Event with respect to a Project, such
Project will no longer be a "Project" under the Financing Documents.

                  "Prudent Utility Practices" means those practices, methods,
equipment, specifications and standards of safety and performance, as the same
may change from time to time, as are commonly used by electric generation
stations owned by independent power producers utilizing comparable fuels in the
state where a Project is located, as applicable, of a type and size similar to
the applicable Project as good, safe and prudent engineering practices in
connection with the design, construction, operation, maintenance, repair and use
of electrical and other equipment, facilities and improvements of such
electrical station, with commensurate standards of safety, performance,
dependability, efficiency and economy. Prudent Utility Practices does not
necessarily mean one particular practice, method, equipment specification or
standard in all cases, but is instead intended to encompass a broad range of
acceptable practices, methods, equipment specifications and standards.

                                       35
<PAGE>

                  "PUC" means, with respect to a Project, the Public Utility
Commission, Public Service Commission or equivalent Government Authority in the
state where such Project is located.

                  "PUHCA" means the Public Utility Holding Company Act of 1935,
as amended, and all rules and regulations adopted thereunder.

                  "Punch List Account" has the meaning given in Section 2.1 of
the Depositary Agreement.

                  "Punch List Items" means, in connection with Completion of the
Bayou Cove Project or the Rockford II Project, such punch list items
contemplated in the Construction Contracts for such Project.

                  "Purchase Agreement" means the Purchase Agreement, dated June
14, 2002, among the Issuer, the Project Companies and the Initial Purchaser.

                  "Rating Agency" means Moody's or S&P or, if Moody's and S&P
cease to exist, any nationally recognized statistical rating organization or
other comparable Person designated by the Issuer and acceptable to XLCA (if XLCA
is the Controlling Party), notice of which designation shall have been given to
the Trustee.

                  "Redemption Premium" has the meaning given in the Indenture.

                  "Reimbursement Obligation" means each payment and performance
obligation of the Issuer under the Insurance and Reimbursement Agreement
(including the Issuer's obligation to pay the Premiums pursuant to Section 3.2
of the Insurance and Reimbursement Agreement and to cash collateralize its
reimbursement obligations pursuant to Section 6.2(b) of the Insurance and
Reimbursement Agreement).

                  "Reinstatement Guaranty" means a guaranty from NRG Energy in
form and substance reasonably satisfactory to XLCA guaranteeing the Obligations
upon reinstatement thereof at any time during the period following the payment
or other satisfaction in full of the Obligations until the date which is 366
days after such payment or other satisfaction.

                  "Release" means any release, pumping, pouring, emptying,
injecting, escaping, leaching, dumping, seepage, spill, leak, flow, discharge,
disposal or emission of a Hazardous Substance.

                  "Replacement Swap Agreement" means any replacement swap
agreement approved by XLCA (acting in its absolute discretion) that replaces the
Swap Agreement and that is with a replacement swap provider that is approved by
XLCA (acting in its absolute discretion).

                  "Reseller" means a power marketing company or any wholesale
buyer of electric products.

                  "Responsible Officer" means, as to any Person, its president,
chief executive officer, treasurer or secretary (or assistant secretary), any of
its vice presidents, or any managing

                                       36
<PAGE>

general partner or managing member of such Person that is a natural person (or
any of the preceding with regard to any managing general partner or managing
member of such Person that is not a natural person).

                  "Restricted Payment" has the meaning given in Section 4.5 of
the Common Agreement.

                  "Restricted Payment Date" means any Initial Restricted Payment
Date, any Subsequent Restricted Payment Date or any Subsequent Project
Restricted Payment Date, as applicable.

                  "Revenue Account" has the meaning given in Section 2.1 of the
Depositary Agreement.

                  "Rockford Acquisition Agreement" means the Purchase Agreement
among NRG Energy, Indeck Energy Services, Inc., Indeck Energy Services of Ilion,
Inc., and Indeck-Ilion Cogeneration Corporation, dated as of May 4, 2001.

                  "Rockford Assignment and Assumption Agreement" means the
General Assignment and Assumption Agreement among NRG Energy, NRG Rockford
Acquisition LLC, and NRG Ilion LP LLC, dated as of July 13, 2001.

                  "Rockford I Electric Interconnection Agreement" means the
Interconnection Agreement between ComEd and the Rockford I Project Company,
dated as of June 20, 2000.

                  "Rockford I Gas Interconnection Agreement" means the
Interconnection Agreement between the Rockford I Project Company and Northern
Illinois Gas Company, dated as of March 16, 2000.

                  "Rockford I Ground Lease" means the Ground Lease by and
between Rock River Valley Industrial Park, Inc. and the Rockford I Project
Company, dated as of January 1, 2000, as amended.

                  "Rockford I Lease Estoppel" means the estoppel letter dated
June 18, 2002 addressed to the Collateral Agent from Rock River Valley
Industrial Park, Inc. with respect to the Rockford I Ground Lease.

                  "Rockford I Lien Subordination Agreement" means that certain
lien subordination agreement between the Rockford I Project Company, the
Collateral Agent and Rock River Valley Industrial Park, Inc. dated June 18,
2002.

                  "Rockford I Major Project Documents" means, collectively, (a)
the Rockford I Electric Interconnection Agreement, the Rockford I Gas
Interconnection Agreement, the Rockford I PSA Agreement, the Rockford I Tolling
Agreement and the Rockford I Ground Lease, (b) any Additional Project Document
for the Rockford I Project that replaces any of the agreements described in
clause (a), (c) any Major Power Purchase Agreement, Major FSA or Major FTA for
the Rockford I Project and (d) any Additional Project Document for the Rockford

                                       37
<PAGE>

I Project that constitutes a material ground lease agreement, material electric
interconnection agreement or material sharing agreement.

                  "Rockford I Non-Disturbance Agreement" means the
Subordination, Non-Disturbance, and Attornment Agreement dated June 18, 2002
between Northwest Bank of Rockford and the Collateral Agent.

                  "Rockford I Project" means the 294 MW (summer capacity) / 310
MW (winter capacity) natural gas-fired electric generation facility owned by the
Rockford I Project Company and located in Rockford, Illinois.

                  "Rockford I Project Company," means NRG Rockford LLC, an
Illinois limited liability company formerly known as Indeck-Rockford, L.L.C.

                  "Rockford I Project Documents" means all Project Documents for
the Rockford I Project.

                  "Rockford I PSA Agreement" means the Power Sales and Agency
Agreement between NRG Power Marketing and the Rockford I Project Company, dated
as of the Closing Date, including the Fuel and Power Marketing Plan attached
thereto.

                  "Rockford I Tolling Agreement" means the Sales Agreement
between Exelon (as assignee of ComEd) and the Rockford I Project Company, dated
as of January 7, 2000 and amended as of June 23, 2000.

                  "Rockford II Combustion Turbine Equipment Supply Contract"
means the Contract for Combustion Turbine Equipment Supply (Unit I) between the
Rockford II Equipment Company (as assignee of Indeck Equipment Company, L.L.C.)
and Siemens Westinghouse Power Corporation, dated as of November 27, 2000, as
amended by Change Orders No. 1 through 6.

                  "Rockford II Completion Obligations" has the meaning given in
Section 3.14(b) of the Common Agreement.

                  "Rockford II Construction Agreement" means the Construction
Agreement by and between the Rockford II Project Company and Ragnar Benson,
Inc., dated as of August 2, 2001.

                  "Rockford II Construction Costs" means, collectively, any and
all costs, expenses, fees, taxes, or reimbursement obligations incurred by or on
behalf of the Rockford II Project Company, under or in connection with a
Rockford II Equipment and Construction Contract or otherwise in connection with
achieving Project Completion of the Rockford II Project, in each case on or
prior to Completion of the Rockford II Project.

                  "Rockford II Construction Management Services Agreement" means
the Construction Management Services Agreement by and between the Rockford II
Project Company and Indeck Energy Services, Inc. dated as of September 1, 2001.

                                       38
<PAGE>
                  "Rockford II Contractors" means, collectively, each of the
contractors and/or services providers providing equipment and/or services to the
Rockford II Project pursuant to the terms of any Rockford II Equipment and
Construction Contract or any agent or subcontractor thereof.

                  "Rockford II Electric Interconnection Agreement" means the
Interconnection Agreement between ComEd and the Rockford II Project Company,
dated as of September 14, 2001.

                  "Rockford II Engineering Services Agreement" means the
Agreement for Engineering Services between the Rockford II Project Company and
Raymond Professional Group, dated as of March 14, 2001.

                  "Rockford II Equipment and Construction Contracts" means,
collectively, (i) the Rockford II Combustion Turbine Equipment Supply Contract,
(ii) the Rockford II Transformer Purchase Documents, (iii) the Rockford II
Engineering Services Agreement, (iv) the Rockford II Construction Agreement, (v)
the Rockford II Construction Management Services Agreement, (vi) the Rockford II
Electric Interconnection Agreement, (vii) the Rockford II Gas Interconnection
Agreement and (viii) any other agreement or document (including any subcontract)
entered into with respect to achieving Project Completion for the Rockford II
Project.

                  "Rockford II Equipment Company" means NRG Rockford Equipment
II LLC, an Illinois limited liability company formerly known as Indeck-Equipment
Company II, L.L.C.

                  "Rockford II Gas Interconnection Agreement" means the
Interconnection Agreement between the Rockford II Project Company and Northern
Illinois Gas Company, dated as of April 1, 2002.

                  "Rockford II Ground Lease" means the Ground Lease by and
between Rock River Valley Industrial Park, Inc. and the Rockford II Project
Company, dated as of March 20, 2001, as amended.

                  "Rockford II Lease Estoppel" means the estoppel letter dated
June 18, 2002 addressed to the Collateral Agent from Rock River Valley
Industrial Park, Inc. with respect to the Rockford II Ground Lease.

                  "Rockford II Major Project Documents" means, collectively, (a)
the Rockford II PSA Agreement, the Rockford II Electric Interconnection
Agreement, the Rockford II Gas Interconnection Agreement and the Rockford II
Ground Lease, (b) any Additional Project Document for the Rockford II Project
that replaces any of the agreements described in clause (a), (c) any Major Power
Purchase Agreement, Major FSA or Major FTA for the Rockford II Project and (d)
any Additional Project Document for the Rockford II Project that constitutes a
material ground lease agreement, material electric interconnection agreement or
material sharing agreement.

                                       39
<PAGE>

                  "Rockford II Non-Disturbance Agreement" means the
Subordination, Non-Disturbance and Attornment Agreement dated June 18, 2002
between Northwest Bank of Rockford and the Collateral Agent.

                  "Rockford II Project" means the natural gas-fired electric
generation facility owned by the Rockford II Project Company currently under
construction in Rockford, Illinois on a site adjacent to the Rockford I facility
which, upon Completion, is expected to generate 153 MW (summer capacity) / 171
MW (winter capacity).

                  "Rockford II Project Company" means NRG Rockford II LLC, an
Illinois limited liability company formerly known as Indeck-Rockford II, LLC.

                  "Rockford II Project Documents" means all Project Documents
for the Rockford II Project.

                  "Rockford II PSA Agreement" means the Power Sales and Agency
Agreement between NRG Power Marketing and the Rockford II Project, dated as of
the Closing Date, including the Fuel and Power Marketing Plan attached thereto.

                  "Rockford II Transformer Purchase Documents" means the
purchase order No 105079 between Waukesha Electric Systems and Indeck-Pleasant
Valley, L.L.C. (together with annexes, general conditions and technical
requirements), dated as of May 2, 2000, as assigned to the Rockford II Equipment
Company.

                  "S&P" means Standard & Poor's Rating Services, a division of
The McGraw-Hill Companies, Inc., or any successor thereto, and, if such
corporation shall for any reason no longer perform the functions of a securities
rating agency, "S&P" shall be deemed to refer to any other nationally recognized
rating agency designated by the Issuer; provided, that with respect to the
rating of the Bonds, the designation shall be with the consent of XLCA (if XLCA
is the Controlling Party).

                  "Scheduled Debt Service" means, collectively, (a) all
regularly scheduled payments of principal of and interest on outstanding Series
A Bonds and all scheduled payments made by the Issuer to the Swap Counterparty
under the Swap Agreement, less (b) all scheduled payments received by the Issuer
from the Swap Counterparty under the Swap Agreement.

                  "Scheduled Payment Date" means each March 10, June 10,
September 10 and December 10 (the Annual Scheduled Payment Date) of each year
commencing on September 10, 2002 and ending on and including June 10, 2019.

                  "Secured Parties" means XLCA, the Bondholders, the Swap
Counterparty, the Collateral Agent (for the benefit of itself and the Secured
Parties) and the Trustee (for the benefit of itself and the Bondholders) (each,
a "Secured Party").

                  "Securities Act" means the Securities Act of 1933, including,
unless the context otherwise requires, the rules and regulations thereunder, as
amended from time to time.

                                       40
<PAGE>

                  "Securities Exchange Act" means the Securities Exchange Act of
1934, including, unless the context otherwise requires, the rules and
regulations thereunder, as amended from time to time.

                  "Senior Tranche" means the portion of the Policy initially
insuring $129,684,000 of principal and interest in respect of the Series A Bonds
representing the third loss layer of the Policy to be drawn in the event of a
Policy Payment.

                  "SERC Main Market Region" means the region covered by the
Southern Electric Reliability Council.

                  "Series A Bonds" means the Series A Floating Rate Senior
Secured Bonds due 2019 issued by the Issuer on the Closing Date pursuant to the
Indenture in an aggregate principal amount of $325,000,000.

                  "Shadow Ratings" means any or all, as applicable of the
ratings issued by the Rating Agencies for (a) the Series A Bonds (rated Baa3 by
Moody's and BBB- by S&P at the Closing Date), (b) the Senior Tranche (rated Aa2
by Moody's and AA- by S&P at the Closing Date), (c) the Mezzanine Tranche (rated
Baa2 by Moody's and BBB+ by S&P at the Closing Date), and (d) the Subordinated
Tranche (rated Ba3 by Moody's and BBB- by S&P at the Closing Date), in each case
without giving effect to the Policies.

                  "Significant Casualty Event" means, with respect to a Project,
any of the following events or conditions: (a) the actual total loss of such
Project; (b) a constructive total loss of such Project under applicable
insurance policies or an agreed or a compromised total loss of such Project; or
(c) such Project shall be either substantially destroyed or irreparably damaged
to an extent rendering restoration impracticable or uneconomical.

                  "Significant Condemnation Event" means any Condemnation Event
with respect to a Project that in the reasonable, good faith judgment of the
applicable Project Company (as evidenced by an officer's certificate of such
Project Company) (a) renders such Project unsuitable for its intended use, (b)
is such that restoration of such Project to substantially its condition as
existed immediately prior to such Condemnation Event would be impracticable or
impossible or (c) constitutes a taking of the applicable Project Company's title
to such Project.

                  "Site" means the "Premises" described in the applicable
Mortgage.

                  "South Central Finance Documents" means the "Finance
Documents" as defined in Appendix A to the Trust Indenture, dated as of March
30, 2000, among NRG South Central, Louisiana Generating and JPMorgan Chase Bank
(formerly The Chase Manhattan Bank), as Bond Trustee and Depositary Bank.

                  "Specified Financial Covenants" means the covenants set forth
in Section 7.12 (Consolidated Net Worth), Section 7.13 (Indebtedness to
Consolidated Capitalization) and Section 7.14 (Interest Coverage Ratio) of the
364 Day Revolver or any comparable provisions contained in any New Revolving
Credit Facility, as applicable, together with, in each case, all related
definitions and ancillary provisions.

                                       41
<PAGE>

                  "Stated Amount" means with respect to any Acceptable Letter of
Credit, the total amount to be drawn thereunder at the time in question in
accordance with the terms of such Acceptable Letter of Credit.

                  "Sterlington and NRG South Central Assignment and Assumption
Agreement" means the Assignment and Assumption Agreement between Koch Power,
Inc. and NRG South Central, dated as of August 17, 2000.

                  "Sterlington Electric Interconnection Agreement" means the
Interconnection and Operating Agreement between the Sterlington Project Company
and Entergy Louisiana, dated as of May 5, 2000.

                  "Sterlington Gas Interconnection Agreement" means the
Interconnect Agreement between Koch Gateway Pipeline Company and the Sterlington
Project Company, dated as of May 3, 2000.

                  "Sterlington Ground Lease" means the Lease Agreement between
Koch Nitrogen Company and the Sterlington Project Company, dated as of July 1,
2000.

                  "Sterlington Lease Estoppel" means the Ground Lessor Estoppel
Certificate dated June 18, 2002 executed by Koch Nitrogen Company with respect
to the Sterlington Ground Lease.

                  "Sterlington Major Project Documents" means, collectively, (a)
the Sterlington Electric Interconnection Agreement, the Sterlington Utilities
and Services Agreement, the Sterlington PSA Agreement, the Sterlington Gas
Interconnection Agreement, the Sterlington PPA (when accepted by the FERC and
executed by the parties thereto) and the Sterlington Ground Lease, (b) any
Additional Project Document for the Sterlington Project that replaces any of the
agreements described in clause (a), (c) any Major Power Purchase Agreement,
Major FSA or Major FTA for the Sterlington Project and (d) any Additional
Project Document for the Sterlington Project that constitutes a material ground
lease agreement, material electric interconnection agreement or material sharing
agreement.

                  "Sterlington PPA" means the Power Purchase Agreement among
Louisiana Generating, the Sterlington Project Company and NRG South Central, to
be executed after the Closing Date upon acceptance thereof by FERC and to be
dated as of May 15, 2002.

                  "Sterlington Project" means the 170 MW (summer capacity) / 193
MW (winter capacity) natural gas-fired electric generation facility owned by the
Sterlington Project Company and located in Sterlington, Louisiana.

                  "Sterlington Project Company" means NRG Sterlington Power LLC,
a Delaware limited liability company formerly known as Koch Power Louisiana,
L.L.C.

                  "Sterlington Project Development Agreement" means the Project
Development Agreement between NRG Energy and Koch Power, Inc., dated as of April
14, 1999.

                                       42
<PAGE>

                  "Sterlington Project Documents" means all Project Documents
for the Sterlington Project; provided that the Sterlington PPA shall not be a
Project Document for the Sterlington Project until accepted by the FERC and
executed by the parties thereto.

                  "Sterlington PSA Agreement" means the Power Sales and Agency
Agreement between NRG Power Marketing and the Sterlington Project Company, dated
as of the Closing Date, including the Fuel and Power Marketing Plan attached
thereto.

                  "Sterlington Supplement and Modification to Project
Development Agreement" means the Supplement and Modification to Project
Development Agreement between NRG Energy and Koch Power, Inc., dated as of May
25, 2000 and the Letter Agreement Re: Supplement and Modification to Project
Development Agreement between NRG Energy, and Koch Power, Inc., dated as of
August 17, 2000.

                  "Sterlington Utilities and Services Agreement" means the
Utilities and Services Agreement between Koch Nitrogen Company and the
Sterlington Project Company, dated as of July 1, 2000.

                  "Stipulated Fixed O&M Expenses" means, with respect to a
Project, the Stipulated Fixed O&M Expenses set forth for such Project in Part I
of Exhibit J to the Common Agreement.

                  "Stipulated Non-Fuel Variable O&M Expenses" means, with
respect to a Project, the Stipulated Non-Fuel O&M Expenses set forth for such
Project in Part II of Exhibit J to the Common Agreement.

                  "Stipulated O&M Expenses" means, collectively, Stipulated
Fixed O&M Expenses and Stipulated Non-Fuel Variable O&M Expenses.

                  "Subject Claims" has the meaning given in Section 9.1(b) of
the Common Agreement.

                  "Subordinated Bonds" means Debt for Borrowed Money of the
Issuer issued after the Closing Date pursuant to a note in favor of any Person
other than a Financing Party or any of its Affiliates, which Debt for Borrowed
Money and note are (a) subordinated in all respects to the Obligations in
accordance with the terms set forth in Exhibit I to the Common Agreement, (b)
not secured other than by a security interest that is subordinated in all
respects to the security interest of the Secured Parties in the Collateral and
as additionally set forth in Exhibit I to the Common Agreement, (c) not
guarantied other than by a guaranty that is subordinated in all respects to the
Guaranties as set forth in Exhibit I to the Common Agreement (and any Lien
securing such guaranty is subordinated in all respects to the security interest
of the Secured Parties in the Collateral as set forth in Exhibit I to the Common
Agreement), and (d) not entitled to the benefit of the Contingent Guaranty
Agreement or any other Financing Document.

                  "Subordinated Debt" means Debt of the Issuer or any Project
Company that is subordinated to the Obligations in accordance with the terms set
forth in Exhibit H or I to the Common Agreement.

                                       43
<PAGE>

                  "Subordinated Tranche" means the portion of the Policy
initially insuring $104,764,000 of principal and interest in respect of the
Series A Bonds representing the first loss layer of the Policy to be drawn in
the event of a Policy Payment.

                  "Subsequent Project Restricted Payment Date" has the meaning
given in Section 4.5(d) of the Common Agreement.

                  "Subsequent Project Restricted Payment Period" means, for the
purposes of Section 4.5 of the Common Agreement, the period prior to any Project
Event of Default and commencing on the occurrence of an Inchoate Project Block
Condition and ending on the 30th day following the cure (prior to such Inchoate
Project Block Condition maturing into or becoming a Project Event of Default) of
such Inchoate Project Block Condition.

                  "Subsequent Restricted Payment Date" has the meaning give to
it in Section 4.5(c) of the Common Agreement.

                  "Subsequent Restricted Payment Period" means, for the purposes
of Section 4.5 of the Common Agreement, the period prior to any Issuer Event of
Default and commencing on the occurrence of an Inchoate Block Condition and
ending on the 30th day following the cure (prior to such Inchoate Block
Condition maturing into or becoming an Issuer Event of Default) of such Inchoate
Block Condition.

                  "Subsequent Tax Payment Period" means, for the purposes of
Section 4.5 of the Common Agreement, the period prior to any Issuer Event of
Default and commencing on the occurrence of an Issuer Inchoate Default and
ending on the 30th day following the cure (prior to such Issuer Inchoate Default
maturing into or becoming an Issuer Event of Default) of such Issuer Inchoate
Default.

                  "Subsidiary" means, with respect to any Person, (a) any
corporation, association, or other business entity (other than a partnership or
a limited liability company) of which 50% or more of the total voting power of
shares of capital stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time of determination owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person or a
combination thereof, and (b) any partnership or limited liability company of
which 50% or more of the partnership's or limited liability company's, as the
case may be, capital accounts, distribution rights or general or limited
partnership interests or limited liability company membership interests, as the
case may be, are owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of that Person or a combination thereof.

                  "Summer Month" means any of May, June, July, August or
September.

                  "Swap Agreement" means the ISDA Master Agreement, dated as of
the Closing Date, between the Issuer and the Swap Counterparty, including the
Schedule and the Confirmation thereto and any Replacement Swap Agreement.

                  "Swap Breakage Costs" means any breakage costs and/or
termination costs which became due under the Swap Agreement.

                                       44
<PAGE>

                  "Swap Counterparty" has the meaning given in the preamble to
the Common Agreement, together with any replacement swap provider thereafter
approved by XLCA under a Replacement Swap Agreement.

                  "Swap Obligations" means each payment obligation of the Issuer
under the Swap Agreement including in respect of Swap Payment Amounts and Swap
Breakage Costs.

                  "Swap Payment Amount" has the meaning given in the Swap
Policy.

                  "Swap Policy" means the Financial Guaranty Insurance Policy,
including any endorsements thereto, issued by XLCA with respect to the Swap
Payment Amounts, dated as of the Closing Date, substantially in the form of
Appendix II to the Insurance and Reimbursement Agreement.

                  "Swap Policy Premium" means the insurance premium (including
any additional premium) payable in respect of the Swap Policy by the Issuer in
accordance with the Premium Letter and the Insurance and Reimbursement
Agreement.

                  "Swap Policy Termination Date" means the Termination Date as
defined in the Swap Policy.

                  "Taxes" means all present or future income, excise, stamp,
documentary, property or franchise taxes and other taxes, fees, duties, levies,
imposts, deductions, withholdings or other charges of any nature whatsoever (but
excluding franchise taxes and taxes imposed on or measured by net income or
receipts) imposed by any taxing authority, including, without limitation, any
penalties, interest or additions to tax with respect thereto.

                  "Tax Distributions" has the meaning given in Section 4.5(e) of
the Common Agreement.

                  "Tax Distribution Amount" has the meaning given in Section
4.5(f) of the Common Agreement.

                  "Tax Group" has the meaning given in Section 4.5(e) of the
Common Agreement.

                  "Title Insurer" means (a) with respect to the Bayou Cove
Project, the Big Cajun I Units 3&4 Project and the Sterlington Project, First
American Title Insurance Company (or any affiliate thereof), and (b) with
respect to the Rockford I Project and the Rockford II Project, Chicago Title
Insurance Company (or any affiliate thereof).

                  "Title Policy" means any title policy delivered by Issuer
pursuant to Section 3.1(dd) of the Insurance and Reimbursement Agreement.

                  "Tolling Period" means:

                  (A) with respect to any Project, any period during which the
         applicable Project Company has entered into an Acceptable PPA with a
         Reseller;

                                       45
<PAGE>

                  (B) with respect to the Rockford I Project, the period
         commencing on the Closing Date and ending on the date on which the
         Rockford I Tolling Agreement terminates;

                  (C) with respect to the Sterlington Project, the period
         commencing on the date after the Closing Date upon which the
         Sterlington PPA is accepted by the FERC and executed by the parties
         thereto and ending on the date on which the Sterlington PPA terminates;
         and

                  (D) with respect to the Big Cajun Project, the period
         commencing on the Closing Date and ending on the date on which the Big
         Cajun PPA terminates;

provided, in each case, (i) if the Reseller is an Affiliate of the Issuer (a)
such Reseller (or any Affiliate guaranteeing its obligations) maintains a
rating, independent of NRG Energy, of at least Investment Grade from each of S&P
and Moody's and (b) such rating is affirmed as "stable" Investment Grade (or the
equivalent) or better if NRG Energy is downgraded or placed on credit review or
watch by either of S&P or Moody's and (ii) the applicable power purchase
agreement, tolling agreement or other contractual arrangement has not been
terminated, otherwise ceases to be in full force and effect or the Reseller
thereunder has defaulted thereunder, which default has not been cured within the
time period provided for such cure under such agreement.

                  "Total Experience Amount" means the initial Total Experience
Amount set forth in Section 2.4 of the Contingent Guaranty Agreement, as reduced
or increased from time to time in accordance therewith.

                  "Tranche" mean the Senior Tranche, the Mezzanine Tranche
and/or the Subordinated Tranche, as applicable.

                  "Transaction" means the portfolio financing transaction in
respect of the Projects contemplated by the Financing Documents.

                  "Trustee" has the meaning given in the preamble to the Common
Agreement.

                  "Uncovered Warranty Costs" means any costs relating to repair
work performed during any Warranty Period under either the Bayou Cove EPC
Agreement (Balance of Plant) or Bayou Cove EPC Agreement (Electric
Interconnection Facilities) which are not paid for or otherwise covered by the
relevant Bayou Cove Contractor as the result of any limits on liability under
the Bayou Cove EPC Agreement (Balance of Plant) or Bayou Cove EPC Agreement
(Electric Interconnection Facilities), as applicable.

                  "UCC" means the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of New York; provided, however, in the
event that, by reason of mandatory provisions of law, any or all of the
perfection or priority of the security interest in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the State
of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection or priority and for purposes of definitions related to such
provisions.

                                       46
<PAGE>

                  "Warranty Period" means, with respect to the Bayou Cove EPC
Agreement (Balance of Plant) and the Bayou Cove EPC Agreement (Electric
Interconnection Facilities), the warranty period or periods specified therein,
as such periods may be extended pursuant to the terms thereof.

                  "Winter Month" means any of October, November, December,
January, February, March or April.

                  "XLCA" has the meaning given in the preamble to the Common
Agreement.

                                       47
<PAGE>
                             RULES OF INTERPRETATION

A.       The singular includes the plural and the plural includes the singular.

B.       "or" is not exclusive.

C.       A reference to a Governmental Rule includes any amendment or
         modification to such Governmental Rule, and all regulations, rulings
         and other Governmental Rules promulgated under such Governmental Rule.

D.       A reference to a Person includes its permitted successors and permitted
         assigns.

E.       Accounting terms have the meanings assigned to them by GAAP, as applied
         by the accounting entity to which they refer.

F.       The words "include", "includes" and "including" are not limiting.

G.       A reference in a document to an Article, Section, Exhibit, Schedule,
         Annex or Appendix is to the Article, Section, Exhibit, Schedule, Annex
         or Appendix of such document unless otherwise indicated. Exhibits,
         Schedules, Annexes or Appendices to any document shall be deemed
         incorporated by reference in such document. In the event of any
         conflict between the provisions of a Financing Document (exclusive of
         the Exhibits, Schedules, Annexes and Appendices thereto) and any
         Exhibit, Schedule or Annex thereto, the provisions of such Financing
         Document shall control. A reference to any Exhibit, Schedule, Annex or
         Appendix of a Financing Document shall mean such Exhibit, Schedule,
         Annex or Appendix as, amended, modified or supplemented from time to
         time in accordance with such Financing Document; provided that no
         Exhibit, Schedule, Annex or Appendix may be amended, modified or
         supplemented by Issuer except to the extent specifically permitted in
         such Financing Document.

H.       References to any document, instrument or agreement (i) shall include
         all exhibits, schedules and other attachments thereto, (ii) shall
         include all documents, instruments or agreements issued or executed in
         replacement thereof, and (iii) shall mean such document, instrument or
         agreement, or replacement or predecessor thereto, as amended, amended
         and restated, supplemented or otherwise modified from time to time and
         in effect at any given time.

I.       The words "hereof", "herein" and "hereunder" and words of similar
         import when used in any document shall refer to such document as a
         whole and not to any particular provision of such document.

J.       The word "will" shall be construed to have the same meaning and effect
         as the word "shall".

K.       The use in this Agreement of the words "asset" and "property" shall be
         construed to have the same meaning and effect and to refer to any and
         all tangible and intangible assets and properties, including cash,
         securities, accounts and contract rights.

                                       48
<PAGE>

L.       Any consent, approval, satisfaction or similar acquiescence to be
         granted under any provision of any Operative Document shall not be
         unreasonably withheld or delayed unless otherwise provided therein.

M.       References to "days" shall mean calendar days, unless the term
         "Business Days" shall be used. References to "years" shall mean
         calendar years, unless otherwise specified. References to a time of day
         shall mean such time in New York, unless otherwise specified.

N.       The Financing Documents are the result of negotiations between, and
         have been reviewed by the Financing Parties, NRG Energy, XLCA, the Swap
         Counterparty, the Trustee, the Collateral Agent, the Depositary Agent
         and their respective counsel. Accordingly, the Financing Documents
         shall be deemed to be the product of all parties thereto, and no
         ambiguity shall be construed in favor of or against any Financing
         Party, any Equity Party, XLCA, the Swap Counterparty, the Trustee, the
         Collateral Agent or the Depositary Agent solely as a result of any such
         Person having drafted or proposed the ambiguous provision.

                                       49

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