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PLAN SUPPORT AGREEMENT
This PLAN SUPPORT AGREEMENT (this "AGREEMENT") is made and entered into as
of May 13, 2003 by and among (i) NRG Energy, Inc. ("NRG"), (ii) certain of NRG's
subsidiaries and affiliates as set forth on SCHEDULE 1-A (the "RELEVANT NRG
SUBSIDIARIES" and, together with NRG, the "NRG GROUP"), (iii) Xcel Energy Inc.
("XCEL"), (iv) the persons identified on SCHEDULE 1-B (collectively, the
"SUPPORTING NOTEHOLDERS") and (v) the persons identified on SCHEDULE 1-C who are
signatories to this Agreement (collectively, the "SUPPORTING LENDERS", and
together with the Supporting Noteholders, the "SUPPORTING CREDITORS") (the NRG
Group, Xcel and the Supporting Creditors, collectively, the "PARTIES" and
individually, a "PARTY").
RECITALS
WHEREAS:
A. NRG has issued from time to time the several series of senior notes and
other instruments described on SCHEDULE 2-A (collectively, the "SENIOR NOTES");
B. One or more of the NRG Group members is a borrower or account party in
respect of the credit facilities and other financial obligations described on
SCHEDULE 2-B (the "LENDER FACILITIES");
C. Each NRG Group member is contemplating a restructuring of its financial
obligations through the prosecution of jointly administered chapter 11 cases
(collectively, the "CHAPTER 11 CASES"; the court adjudicating the Chapter 11
Cases is referred to as the "BANKRUPTCY COURT");
D. The Parties have reached an agreement in principle on the terms and
conditions (i) of the NRG Plan (as defined in the Term Sheet, as defined below)
(such plan together with all plan related documents, agreements, supplements and
instruments, the "NRG PLAN"); and (ii) regarding the settlement of claims and
causes of action the NRG Group and other parties in interest in the Chapter 11
Cases have asserted or could assert against Xcel; such terms and conditions
being set forth in the Term Sheet Concerning NRG Plan And Relationship With Xcel
Energy Inc. (the "TERM SHEET") attached hereto as EXHIBIT A;
E. The NRG Group and the Supporting Creditors acknowledge and agree that
the best way to proceed to effectuate the NRG Plan is to do so in a way that
would:
1. maximize the value of the NRG Group for the benefit of all
interested persons;
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2. minimize the disruption to the NRG Group resulting from the
commencement of the Chapter 11 Cases, by seeking to conclude the
Chapter 11 Cases as quickly as possible; and
3. facilitate the NRG Group's ability to obtain postpetition financing
and post-reorganization financing on favorable terms, in order to
minimize the cost, conditions and restrictions thereof to the NRG
Group;
F. The Parties desire to express to each other their mutual support and
commitment in respect of the matters discussed in the Term Sheet, including the
consummation of the NRG Plan consistent therewith; and
G. In expressing such support and commitment, the Parties do not desire
and do not intend in any way to derogate from or diminish the solicitation
requirements of applicable securities and bankruptcy law, the fiduciary duties
of the members of the NRG Group as debtors in possession, the fiduciary duties
of any Supporting Creditor who is appointed to the official committee of
unsecured creditors (the "CREDITORS' COMMITTEE") in the Chapter 11 Cases or the
role of any state or federal agencies with regulatory authority concerning any
member of the NRG Group.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties hereby
agree as follows:
1. Defined Terms. All capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Term Sheet.
2. Term Sheet Conditions. Without limiting the conditions set forth
herein, each Party's agreement to this Agreement and support for the NRG Plan
and the Term Sheet is expressly conditioned on satisfaction of each of the terms
and conditions set forth in the Term Sheet and this Agreement. To the extent any
such conditions involve a time period or an outside date for satisfaction, the
Parties acknowledge and agree that time is of the essence with respect to each
such condition.
3. NRG Group's Support. The NRG Group believes that consummation of the
NRG Plan will best facilitate its business and financial restructuring and that
consummation of the settlements described in the Term Sheet is in its best
interests and in the best interests of its creditors and other parties in
interest. Accordingly, the NRG Group hereby expresses its intention to file and
seek confirmation of the NRG Plan consistent with the terms and provisions
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of the Term Sheet. Without limiting the foregoing, the NRG Group intends, for so
long as this Agreement remains in effect:
a. to submit for, and use its best efforts to obtain at the earliest
practicable date, Bankruptcy Court approval of a disclosure statement (as
approved by the Bankruptcy Court, the "DISCLOSURE STATEMENT") in form and
substance satisfactory to Xcel and the Supporting Creditors;
b. to use its best efforts to solicit the requisite votes in favor
of, and to obtain confirmation by the Bankruptcy Court at the earliest
practicable date of, the NRG Plan in form and substance satisfactory to
Xcel and the Supporting Creditors and approval by the Bankruptcy Court of
the settlement set forth in the Term Sheet;
c. not to pursue, propose or support, or encourage the pursuit,
proposal or support of, any plan of reorganization for any member of the
NRG Group that is not consistent with the Term Sheet and the NRG Plan; and
d. to otherwise use its best efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things, necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by the Term Sheet and by the NRG
Plan at the earliest practicable date (including opposing any appeal of
the Confirmation Order and using its best efforts to resolve, or have the
Bankruptcy Court determine, all issues (if any) concerning the dollar
amount of all Noteholder claims, all Bank Group claims, including claims
under the Lender Facilities, and all recourse claims of any bank lender
against NRG prior to the commencement of the hearing on the Disclosure
Statement for the NRG Plan in accordance with the provisions of the Term
Sheet);
in all events expressly subject to the exercise by NRG and each other member of
the NRG Group of its fiduciary duties as debtors in possession in the Chapter 11
Cases.
4. Xcel's Support. Xcel hereby expresses its commitment to and its
intention to implement the Term Sheet in accordance with its terms and subject
to its conditions. Without limiting the foregoing, Xcel intends and commits, for
so long as this Agreement remains in effect:
a. to support the NRG Plan and, as reasonably requested, to assist
NRG in the preparation of the Disclosure Statement;
b. not pursue, propose, support, or encourage the pursuit, proposal
or support of, any chapter 11 plan, or other restructuring or
reorganization for any member of the NRG
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Group (directly or indirectly) that is not consistent with the Term Sheet
and the NRG Plan;
c. not, nor encourage any other person or entity, to interfere with,
delay, impede, appeal or take any other negative action, directly or
indirectly, in any respect regarding acceptance or implementation of the
NRG Plan;
d. to use its commercially reasonable efforts to comply with the
terms and provisions of the Term Sheet applicable to Xcel and to obtain
any necessary regulatory and other approvals pertaining thereto; and
e. to cooperate in consummating and making effective the
transactions contemplated by the Term Sheet and the NRG Plan at the
earliest practicable date;
in each case consistent with the terms and provisions of the Term Sheet, but in
all events expressly subject to any federal or state regulatory approvals and
requirements and to the fiduciary duties in the Chapter 11 Cases of any director
or officer of any member of the NRG Group who is also a director or officer of
Xcel.
5. Supporting Creditors' Claims and Support. Each Supporting Noteholder
represents and warrants, on a several but not joint basis, that, as of the date
hereof, it is the legal or beneficial holder of, or holder of investment
authority over, the Senior Notes identified on its signature page hereto
(collectively, such Supporting Noteholder's "RELEVANT NOTES") and has or will
have the authority to vote or direct the voting of claims relating to the
Relevant Notes. Each Supporting Lender represents and warrants, on a several but
not joint basis, that, as of the date hereof, it is the legal or beneficial
holder of claims pursuant to the Lender Facilities identified on its signature
page hereto (collectively, such Supporting Lender's "RELEVANT DEBT"; all
Supporting Creditors' Relevant Notes and Relevant Debt, collectively, the
"RELEVANT CLAIMS") and has or will have the authority to vote or direct the
voting of claims relating to the Relevant Debt. Each Supporting Creditor
believes that consummation of the NRG Plan consistent with the Term Sheet is in
its best interests. Accordingly, each Supporting Creditor will support the NRG
Plan consistent with the terms and conditions of the Term Sheet. Without
limiting the foregoing, each Supporting Creditor commits to (subject to
paragraph 9 hereof), for so long as this Agreement remains in effect:
a. support the NRG Plan and use its commercially reasonable efforts
to facilitate the filing and confirmation of the NRG Plan at the earliest
practicable date;
b. not pursue, propose, support, or encourage the pursuit, proposal
or support of, any chapter 11 plan, or other restructuring or
reorganization for any member of the NRG Group (directly or indirectly)
that is not consistent with the Term Sheet and the NRG Plan;
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c. not, nor encourage any other person or entity, to interfere with,
delay, impede, appeal or take any other negative action, directly or
indirectly, in any respect regarding acceptance or implementation of the
NRG Plan;
d. not commence any proceeding or prosecute any objection to oppose
or object to the NRG Plan or to the Disclosure Statement, and not to take
any action that would delay approval or confirmation, as applicable, of
the Disclosure Statement and the NRG Plan; provided, however, that the
Supporting Creditor may object to the disclosure statement solely on the
basis that it does not contain adequate information as required by section
1125 of the Bankruptcy Code;
e. elect on any ballot distributed in connection with and pursuant
to the NRG Plan to affirmatively release any and all NRG Released Causes
of Action and, as applicable, any Separate Bank Claims, that it has or may
have against Released Parties; and
f. use its commercially reasonable efforts to resolve, or have the
Bankruptcy Court determine, all issues (if any) concerning the dollar
amount of all Noteholder claims, all Bank Group claims, including claims
under the Lender Facilities, and all Bank project lender recourse claims
against NRG prior to the commencement of the hearing on the Disclosure
Statement for the NRG Plan in accordance with the provisions of the Term
Sheet)
in each case consistent with the terms and provisions of the Term Sheet;
provided, however, that notwithstanding anything herein to the contrary, if any
Supporting Creditor is appointed to and serves on the Creditors' Committee, the
terms of this Agreement shall not be construed to limit such Supporting
Creditor's exercise of its fiduciary duties in its role as a member of a
Creditors' Committee, and any exercise of such fiduciary duties shall not be
deemed to constitute a breach of the terms of this Agreement.
6. Acknowledgement. While the Supporting Creditors (subject to paragraph 9
hereof) commit herein to support the NRG Plan and it is their intention to vote
in favor of the NRG Plan, this Agreement is not and shall not be deemed to be a
solicitation for consent to the NRG Plan. The acceptance of the Supporting
Creditors will not be solicited until the Supporting Creditors have received the
Disclosure Statement and the related ballots in forms approved by the Bankruptcy
Court.
7. Limitations on Transfer. Each Supporting Creditor hereby agrees not to
(a) sell, transfer, assign, pledge, or otherwise dispose, directly or indirectly
their right, title or interest in respect of the Relevant Claims, in whole or in
part, or any interest therein, or (b) grant any proxies, deposit any of its
claims into a voting trust, or enter into a voting agreement with respect to any
of such claims (clauses (a) and (b), collectively, a "TRANSFER") unless such
transferee
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agrees in writing at the time of such Transfer to be bound by this Agreement in
its entirety without revisions. Any Transfer that does not comply with this
paragraph shall be void ab initio. In the event of a Transfer, the transferor
shall, within three business days, provide written notice of such transfer to
Xcel and NRG, together with a copy of the written agreement of the transferee to
be bound by this Agreement in its entirety without revision. Upon compliance
with the foregoing, the transferee shall be deemed to constitute a Supporting
Noteholder or a Supporting Lender, as the case may be. No Supporting Lender or
Supporting Noteholder may create any subsidiary or affiliate for the sole
purpose of acquiring any Lender Facilities or Senior Notes without first causing
such subsidiary or affiliate to become a party hereto as a Supporting Lender or
Supporting Noteholder, as the case may be.
8. Further Acquisition of Senior Notes and Lender Facilities. This
Agreement shall in no way be construed to preclude any Supporting Noteholder
from acquiring additional Senior Notes or claims in respect of the Lender
Facilities or any Supporting Lender from acquiring additional claims in respect
of the Lender Facilities or Senior Notes. However, any such Senior Notes and
claims so acquired shall automatically be deemed to be Relevant Claims and to be
subject to all of the terms of this Agreement other than paragraph 7 hereof.
9. Other Claims Held by Supporting Creditors. Notwithstanding anything
herein to the contrary, the agreements and other obligations of each Supporting
Creditor hereunder apply only with respect to such Supporting Creditor's
Relevant Claims and do not apply to, and shall have no effect in respect of, any
Unrestricted Claims such Supporting Creditor has or may have against any member
of the NRG Group. For the purposes of this paragraph 9, "UNRESTRICTED CLAIMS"
shall mean claims held by a Supporting Creditor against any member of the NRG
Group other than such Supporting Creditor's Relevant Claims.
10. Condition to each Party's Obligations. Each Party's obligations under
this Agreement are subject to the satisfaction of the following condition:
Each of the following persons shall have executed this Agreement:
a. each member of the NRG Group;.
b. Xcel;
c. the Supporting Noteholders who shall represent a majority in
principal amount outstanding of the Senior Notes; and
d. the Supporting Lenders, who shall represent at least two-thirds
in principal amount outstanding and a majority in number of the lenders
under each of the NRG Revolver, the L/C Facility and the Xxxxx Credit
Agreement (for the purposes of this Agreement, the "principal amount
outstanding" in respect of the L/C Facility shall be deemed to constitute
the aggregate amount of all funded and unreimbursed draws in
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respect of the L/C Facility together with the face amount of all available
but undrawn amounts under the L/C Facility).
11. Additional Conditions to Xcel's Obligations. Xcel's obligations under
this Agreement are also subject to the satisfaction of the following conditions
unless the failure of such condition is the result of Xcel's own breach of this
Agreement:
a. the Petition Date shall have occurred no later than May 14, 2003;
b. the NRG Group shall have used its reasonable best efforts, with
the support of the Supporting Creditors, to cause the entry of an order by
the Bankruptcy Court no later than 30 days after the Petition Date, and in
form acceptable to Xcel, setting a bar date for all claims against the NRG
Entities no later than 60 days after the Petition Date (with the schedules
and statement of financial affairs of all NRG Entities to be filed by 30
days after the Petition Date);
c. the NRG Group shall have used its reasonable best efforts, with
the support of the Supporting Creditors, to cause the entry of an order by
the Bankruptcy Court no later than 45 days after the Petition Date
approving the Disclosure Statement;
d. the NRG Group shall have used its reasonable best efforts, with
the support of the Supporting Creditors, to obtain the requisite votes in
favor of the NRG Plan no later than 90 days after the Petition Date (the
"VOTING DEADLINE") and shall have received the requisite votes from the
Unsecured Creditor Class to confirm the NRG Plan;
e. the Supporting Creditors shall have voted to accept the NRG Plan
no later than the Voting Deadline (it being recognized that, while this is
a condition to Xcel's obligations under this Agreement, and without
derogation of the support and commitment of the Supporting Creditors set
forth in paragraph 5 above, it is not a solicitation of the votes of the
Supporting Creditors and it is not a vote by the Supporting Creditors to
accept the NRG Plan) and such vote has not been revoked or withdrawn;
f. 100% of the members of the Separate Bank Settlement Group shall
have executed and delivered the Separate Bank Settlement Release no later
than the Effective Date of the NRG Plan;
g. the following persons shall have released the Released Parties
from all NRG Released Causes of Action by "checking the box" (as described
in section V.C of the Term Sheet) no later than the Voting Deadline:
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1. holders of a majority in number representing 85% in
principal amount outstanding of the claims in respect of the Senior Notes,
including 100% of the Supporting Noteholders;
2. holders of a majority in number representing 85% in
principal amount outstanding of the claims in respect of each of the NRG
Revolver, the L/C Facility and the Xxxxx Credit Agreement, including 100%
of the Supporting Lenders;
3. 100% of the members of the Separate Bank Settlement Group;
and
4. holders of 85% in amount of all claims in the Unsecured
Creditor Class;
h. the entry on the docket of the Bankruptcy Court of the
Confirmation Order, which shall (i) fully incorporate all of the relevant
provisions of the Term Sheet (including the releases and injunctions
described above) and any other matters agreed to in writing by Xcel, (b)
not contain any provisions inconsistent with the Term Sheet or such other
matters (other than a provision to which Xcel has previously consented to
in writing), and (c) not approve any amendments or supplements to such NRG
Plan (other than amendments or supplements to which Xcel has previously
consented to in writing) which Xcel determines to be adverse to it in its
sole reasonable discretion, which the NRG Group shall use its reasonable
best efforts to cause to occur no later than 110 days after the Petition
Date;
i. the receipt by Xcel, and, to the extent applicable, NRG of all
regulatory and other approvals (including any approvals from the Federal
Energy Regulatory Commission, the Securities and Exchange Commission and
any state Public Utility Commission) necessary for Xcel and, to the extent
applicable, NRG to perform such obligations set forth for Xcel in the Term
Sheet and such NRG Plan;
j. the Effective Date for such NRG Plan approved by such
Confirmation Order referenced in paragraph 11.h hereof, and the
satisfaction of all of the other conditions set forth in this paragraph
11, occurring by no later than December 15, 2003;
k. all other Parties to this Agreement having fulfilled their
respective obligations under this Agreement in all respects and no such
Party having breached any of its obligations under this Agreement;
l. each of the Supporting Lenders that has a claim against Xcel
under any Xcel credit facility (the "CROSS-OVER LENDERS") shall approve,
without payment of any special fee or expense, any waiver or amendment
that Xcel and the administrative agent under such credit facility believe
is necessary under such credit facility to implement this
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Agreement, the NRG Plan and the transactions contemplated thereby,
including with respect to the establishment of the Tax Escrow (except that
if other lenders to Xcel under any credit facility shall receive a special
fee or expense for their waiver or amendment, the Cross-Over Lenders shall
be entitled to the same pro rata fee or expense), and, in any case, such
waiver or amendment is obtained by Xcel prior to the Effective Date; and
m. NRG shall not have violated the provisions of Section VI.B(B) of
the Term Sheet.
Should any of such conditions, or any other conditions to the performance of any
obligation of Xcel in this Agreement, not be timely fulfilled or waived by Xcel,
any obligations of Xcel set forth in this Agreement shall be null and void ab
initio and all Xcel Released Causes of Action and any other claims, causes of
action, remedies, defenses, setoffs, rights or other benefits of Xcel shall be
fully preserved without any estoppel, evidentiary or other effect of any kind or
nature whatsoever.
12. Termination Events. The occurrence of each of the following events
shall constitute a "TERMINATION EVENT":
a. NRG's Chapter 11 Case (other than an involuntary bankruptcy case
for which an order for relief has not been entered) shall have been
dismissed or converted to a case under chapter 7 of the Bankruptcy Code.
b. Xcel shall have disclaimed in writing its intention to fulfill
its obligations under this Agreement, or Xcel shall fail to fulfill any or
all of its obligations under this Agreement;
c. the failure of the condition set forth in paragraph 10 of this
Agreement;
d. the breach or failure of any of the conditions set forth in
paragraphs 11.a. through 11.m. of this Agreement;
e. any Court (including the Bankruptcy Court) shall declare, in a
Final Order, this Agreement to be unenforceable;
f. the most current NRG Plan and the Disclosure Statement on file
with the Bankruptcy Court on or after June 17, 2003 (and any amendments,
supplements and documents related to such pleadings filed after June 17,
2003) shall (i) not be in form and substance satisfactory to each Party,
(ii) not be consistent with and fully incorporate the terms and provisions
of the Term Sheet or (iii) contain any provisions inconsistent with the
Term Sheet;
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g. (A) after giving effect to Section V.A(2) of the Term Sheet, to
the extent applicable, the Parties shall have failed to resolve, or shall
have failed to agree to a procedure for resolving, all issues (if any)
concerning any claims asserted or assertable, directly or indirectly, by
the lenders under the Xxxxx Credit Agreement (in their capacity as such)
against NRG or any of its subsidiaries prior to June 17, 2003 or (B) such
lenders shall have failed to file a proof of claim in the Chapter 11 Cases
with respect all such claims on or prior to June 3, 2003;
h, the Required Parties (as defined below) shall not have reached
agreement by July 31, 2003 on whether, and the terms under which, Xcel
will escrow Tax Benefits (as defined in the Term Sheet); and
i. January 1, 2004.
13. Termination of this Agreement. Upon the occurrence of a Termination
Event, this Agreement shall terminate (except for a Termination Event described
in paragraph 12.f or 12.g, for which the Termination Event shall only terminate
this Agreement with respect to the Party invoking such Termination Event unless
a "Required Party" invokes such Termination Event) as follows:
a. immediately upon the occurrence of the Termination Events set
forth in paragraph 12.c, 12.h or 12.i unless the date referenced therein
is, prior to the expiration of such date, extended in writing by each of
(i) Xcel, (ii) the NRG Group, (iii) holders of two-thirds in principal
amount outstanding of the Relevant Notes (the "REQUIRED NOTEHOLDERS"), and
(iv) holders of two-thirds in principal amount outstanding of the Relevant
Debt (the "REQUIRED LENDERS") (each of the persons or groups of persons
described in each of the foregoing clauses (i) through (iv) a "REQUIRED
PARTY" and, collectively, the "REQUIRED PARTIES");
b. immediately upon the occurrence of the Termination Events set
forth in paragraphs 12.e, 12.f or 12.g (but only with respect to the Party
invoking the Termination Event described in paragraph 12.f or 12.g unless
a Required Party invokes such Termination Event) of this Agreement;
c. 30 calendar days after the occurrence of the Termination Events
described in paragraph 12.a and 12.b of this Agreement, unless either (i)
the occurrence of the event giving rise to the Termination Event is no
longer continuing on such 30th day or (ii) each of the Required
Noteholders, Required Lenders, and, for purposes of paragraph 12.a, Xcel,
shall have waived in writing such Termination Event; provided, however,
that for the purposes of this clause 13.c, if such event has occurred as a
result of an action taken or omitted to be taken by a Supporting Creditor,
the claims of such Supporting Creditor
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shall not be included in the calculation of the "Required Noteholders" or
the "Required Lenders," as the case may be; and
d. 30 calendar days after the occurrence of the Termination Event
described in paragraph 12.d of this Agreement, unless (i) the event giving
rise to the Termination Event occurred as a result of an action taken or
omitted to be taken by Xcel or (ii) Xcel modifies or waives in writing
such Termination Event.
14. Effect of Termination. Upon termination of this Agreement (which in
the case of a Termination Event described in paragraph 12.f or 12.g, upon
termination of this Agreement only with respect to the Party invoking such
Termination Event unless a "Required Party" invokes such Termination Event), all
obligations hereunder shall terminate and shall be of no further force and
effect; provided however, that any claim for breach of this Agreement shall
survive termination and all rights and remedies with respect to such claims
shall not be prejudiced in any way; but provided further, that the breach of
this Agreement by one or more Supporting Creditors shall not create any rights
or remedies against any non-breaching Supporting Creditor unless such
non-breaching Supporting Creditor has participated in or aided and abetted the
breach by the breaching Supporting Creditor(s). Except as set forth above in
this paragraph 14 and for the obligations set forth in paragraph 16 hereof, upon
such termination, any obligations of the non-breaching Parties set forth in this
Agreement shall be null and void ab initio and all claims, causes of action,
remedies, defenses, setoffs, rights or other benefits of such non-breaching
Parties shall be fully preserved without any estoppel, evidentiary or other
effect of any kind or nature whatsoever.
15. Representations and Warranties. NRG, Xcel and each Supporting
Creditor, on a several but not joint basis, represents and warrants to each
other Party that the following statements are true, correct and complete as of
the date hereof:
a. Corporate Power and Authority. It is duly organized, validly
existing, and in good standing under the laws of the state of its
organization, and has all requisite corporate, partnership or other power
and authority to enter into this Agreement and to carry out the
transactions contemplated by, and perform its respective obligations
under, this Agreement.
b. Authorization. The execution and delivery of this Agreement and
the performance of its obligations hereunder have been duly authorized by
all necessary corporate, partnership or other action on its part.
c. Binding Obligation. This Agreement has been duly executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable in accordance with the terms hereof.
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d. No Conflicts. The execution, delivery and performance by it (when
such performance is due) of this Agreement do not and shall not (i)
violate any provision of law, rule or regulation applicable to it or any
of its subsidiaries or its certificate of incorporation or bylaws or other
organizational documents or those of any of its subsidiaries or (ii)
conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any material contractual obligation
to which it or any of its subsidiaries is a party.
e. Adequate Information. Although none of the Parties intends that
this Agreement should constitute, and they each believe it does not
constitute, a solicitation and acceptance of the NRG Plan, they each
acknowledge and agree that, regardless of whether its Relevant Claims
constitute "securities" within the meaning of the Securities Act of 1933,
(i) each of the Supporting Creditors is an "accredited investor" as such
term is defined in Rule 501(a) of the Securities Act of 1933 and a
"qualified institutional buyer" as such term is defined in Rule 144A of
the Securities Act of 1933 and (ii) adequate information was provided by
the NRG Group and Xcel to each Supporting Creditor in order to enable it
to make an informed decision such that, were this Agreement to be
construed as or deemed to constitute such a solicitation and acceptance,
such solicitation was (i) in compliance with any applicable nonbankruptcy
law, rule, or regulation governing the adequacy of disclosure in
connection with such solicitation, or (ii) if there is not any such law,
rule, or regulation, solicited after disclosure to such holder of
"adequate information" as such term is defined in section 1125(a) of the
Bankruptcy Code.
16. Confidentiality. NRG, Xcel and each Supporting Creditor agrees to use
commercially reasonable efforts to maintain the confidentiality of (a) the
individual identities of the Supporting Creditors or (b) the individual holdings
of the Supporting Creditors; provided, however, that such information may be
disclosed (i) to the Parties' respective directors, trustees, executives,
officers, auditors, and employees and financial and legal advisors or other
agents (collectively referred to herein as the "REPRESENTATIVES" and
individually as a "REPRESENTATIVE"), (ii) to persons in response to, and to the
extent required by, (x) any subpoena, or other legal process or (y) the NAIC,
any bank regulatory agency or any other regulatory agency or authority. If any
Party or its Representative receives a subpoena or other legal process as
referred to in clause (ii)(x) above in connection with the Agreement, such Party
shall provide the other Parties with prompt written notice of any such request
or requirement, to the fullest extent permissible and practicable under the
circumstances, so that the other Parties may seek a protective order or other
appropriate remedy or waiver of compliance with the provisions of this
Agreement. Notwithstanding the provisions in this paragraph 16, (i) Xcel and NRG
may disclose (a) the existence of and nature of support evidenced by this
Agreement in one or more public releases that have first been sent to counsel
for the Supporting Noteholders and counsel for the Global Steering Committee for
review and comment, and (b) in the context of any such releases, the aggregate
holdings of the Supporting Creditors (but, as indicated above, not their
identities or their individual holdings),
PAGE 13
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
(ii) any Party hereto may disclose the identities of the Parties hereto and
their individual holdings in any action to enforce this Agreement or in an
action for damages as a result of any breaches hereof, (iii) any Party hereto
may disclose, to the extent consented to in writing by a Supporting Creditor,
such Supporting Creditor's identity and individual holdings and (iv) to the
extent required by the Bankruptcy Code, Bankruptcy Rules, Local Rules of the
Bankruptcy Court or other applicable rules, regulations or procedures of the
Bankruptcy Court or the Office of the United States Trustee, NRG may disclose
the individual identities of the Supporting Creditors in a writing that has
first been sent to counsel for the Supporting Noteholders and counsel for the
Global Steering Committee for review and comment on five business days' notice.
17. Preparation of Restructuring Documents. Notwithstanding anything to
the contrary contained in this Agreement, including specifically any obligation
of a Party to use efforts to cause an event to occur by the "earliest practical
date," the obligations of the Parties hereunder shall be expressly subject to
the preparation of definitive documents relating to the transactions
contemplated by this Agreement and the Term Sheet, (i) including without
limitation, (a) the NRG Plan, the Disclosure Statement, the Confirmation Order,
and any related ballots, releases and settlement documents and (b) all other
agreements, instruments, orders or other documents necessary or appropriate to
consummate the transactions contemplated by this Agreement, the Term Sheet or
the NRG Plan, each of which documents must be acceptable to each of the Parties,
and (ii) any "first day" orders and motions must be acceptable to each of the
Required Parties.
18. Amendment or Waiver. Except as otherwise specifically provided herein,
this Agreement may not be modified, amended or supplemented without the prior
written consent of the Required Parties. No waiver of any of the provisions of
this Agreement shall be deemed or constitute a waiver of any other provision of
this Agreement, whether or not similar, nor shall any waiver be deemed a
continuing waiver.
19. Notices. Any notice required or desired to be served, given or
delivered under this Agreement shall be in writing, and shall be deemed to have
been validly served, given or delivered if provided by personal delivery, or
upon receipt of fax delivery, as follows:
a. if to any member of the NRG Group, to Xxxxxxx X. Xxxxxx, Xxxxxxxx
& Xxxxx, Citigroup Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, fax: 000-000-0000;
b. if to Xcel, to Xxxx X. Xxxxx, Xxxxx Day, 00 Xxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx, 00000-0000, fax: 000-000-0000, with a copy to Xxxxx X. Xxxxxxxx,
Xxxxx Day, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, fax:
000-000-0000:
c. if to the Supporting Noteholders, to Xxxx X. Xxxxxxxx, Xxxxxxx
XxXxxxxxx LLP, Xxx Xxxxx Xxxxxx, Xxxxxxxx, XX 00000, fax: 000-000-0000;
and
PAGE 14
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
d. if to the Supporting Lenders, to Xxxxx X. Xxxxxxxx and Xxxxx X.
Xxxx, Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000-0000, fax: 000-000-0000.
20. Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO ANY CONFLICTS OF LAW PROVISION WHICH WOULD REQUIRE THE APPLICATION OF
THE LAW OF ANY OTHER JURISDICTION. By its execution and delivery of this
Agreement, each of the Parties hereto hereby irrevocably and unconditionally
agrees for itself that any legal action, suit or proceeding against it with
respect to any matter under or arising out of or in connection with this
Agreement or for recognition or enforcement of any judgment rendered in any such
action, suit or proceeding, may be brought in the United States District Court
for the Southern District of New York. By execution and delivery of this
Agreement, each of the Parties hereto irrevocably accepts and submits itself to
the nonexclusive jurisdiction of each such court, generally and unconditionally,
with respect to any such action, suit or proceeding, and waives any objection it
may have to venue or the convenience of the forum. Notwithstanding the foregoing
consent to New York jurisdiction, upon the commencement of the Chapter 11 Cases,
each of the Parties hereto hereby agrees that the Bankruptcy Court shall have
exclusive jurisdiction of all matters arising out of or in connection with this
Agreement.
21. Specific Performance. This Agreement, including without limitation the
Parties' agreement herein to support the NRG Plan and to facilitate its
confirmation, is intended as a binding commitment enforceable in accordance with
its terms. It is understood and agreed by each of the Parties hereto that money
damages would not be a sufficient remedy for any breach of this Agreement by any
Party and each non-breaching Party shall be entitled to specific performance and
injunctive or other equitable relief as a remedy of any such breach.
22. Headings. The headings of the sections, paragraphs and subsections of
this Agreement are inserted for convenience only and shall not affect the
interpretation hereof.
23. Interpretation. This Agreement is the product of negotiations of the
Parties, and in the enforcement or interpretation hereof, is to be interpreted
in a neutral manner, and any presumption with regard to interpretation for or
against any Party by reason of that Party having drafted or caused to be drafted
this Agreement, or any portion hereof, shall not be effective in regard to the
interpretation hereof.
24. Successors and Assigns. This Agreement is intended to bind and inure
to the benefit of the Parties and their respective successors, assigns, heirs,
executors, administrators and representatives.
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PROVIDED AS PART OF SETTLEMENT
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25. No Third-Party Beneficiaries. Unless expressly stated herein, this
Agreement shall be solely for the benefit of the Parties hereto and no other
person or entity shall be a third-party beneficiary hereof.
26. No Waiver of Participation and Reservation of Rights. Except as
expressly provided in this Agreement and in any amendment among the Parties,
nothing herein is intended to, or does, in any manner waive, limit, impair or
restrict the ability of each of the Parties to protect and preserve its rights,
remedies and interests, including without limitation, its claims against any of
the other Parties (or their respective affiliates or subsidiaries) or its full
participation in any bankruptcy case filed by NRG or any of its affiliates and
subsidiaries. If the transactions contemplated by this Agreement or in the NRG
Plan are not consummated, or if this Agreement is terminated for any reason, the
Parties fully reserve any and all of their rights.
27. No Admissions. This Agreement shall in no event be construed as or be
deemed to be evidence of an admission or concession on the part of any Party of
any claim or fault or liability or damages whatsoever. Each of the Parties
denies any and all wrongdoing or liability of any kind and does not concede any
infirmity in the claims or defenses which it has asserted or could assert.
28. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement. Delivery of an executed signature page of
this Agreement by facsimile shall be effective as delivery of a manually
executed signature page of this Agreement.
29. Representation by Counsel. Each Party acknowledges that it has been
represented by counsel with this Agreement and the transactions contemplated
herein. Accordingly, any rule of law or any legal decision that would provide
any Party with a defense to the enforcement of the terms of this Agreement
against such Party based upon lack of legal counsel shall have no application
and is expressly waived.
30. Entire Agreement. This Agreement and the exhibits and schedules
hereto, including, without limitation, the Term Sheet, constitute the entire
agreement between the Parties and supersedes all prior and contemporaneous
agreements, representations, warranties and understandings of the Parties,
whether oral, written or implied, as to the subject matter hereof.
31. Several not Joint. The agreements, representations and obligations of
the Parties under this Agreement are, in all respects, several and not joint
32. Tax Shelter Regulations. Notwithstanding anything herein to the
contrary, any Party to this Agreement (and any employee, representative, or
other agent of any Party to this Agreement) may disclose to any and all persons,
without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated by the Term Sheet or the NRG Plan and all materials of
any kind (including opinions or other tax analyses) that are provided to it
relating to
PAGE 16
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
such tax treatment and tax structure; provided, however, that no Party (nor any
employee, representative or other agent thereof) shall disclose (A) any
information that is not relevant to an understanding of the tax treatment of the
transactions contemplated by the Term Sheet or the NRG Plan, including the
identity of any Party to this Agreement (or its employees, representatives or
agents) or other information that could lead any person to determine such
identity or (B) any information to the extent such disclosure could result in a
violation of any federal or state securities laws.
[Remainder of page intentionally blank; remaining pages are signature pages.]
IN WITNESS WHEREOF, the undersigned have each caused this Agreement to be
duly executed and delivered by their respective, duly authorized officers as of
the date first above written.
NRG ENERGY, INC., on behalf of itself and each of its
affiliates identified on Schedule 1-A
By:__________________________________________________
Name:
Title:
[Plan Support Agreement Signature Page for NRG Group]
XCEL ENERGY INC.
By:______________________________________
Name:
Title:
[Plan Support Agreement Signature Page for Xcel]
SUPPORTING NOTEHOLDER:
_________________________________________
NAME
By:______________________________________
Name:
Title:
ISSUANCE ISSUE AMOUNT MATURITY PRINCIPAL AMOUNT HELD
-------- ------------ -------- ---------------------
6.750% Senior Notes $340 million July 15, 2006 $
7.500% Senior Notes $250 million June 15, 2007 $
7.500% Senior Notes $300 million June 1, 2009 $
7.625% Senior Notes $125 million February 1, 2006 $
7.750% Senior Notes $350 million April 1, 2011 $
7.970% Senior Notes (ROARS) $233 million March 15, 2020 $
8.000% Senior Notes (ROARS) $240 million November 1, 2013 $
8.250% Senior Notes $350 million September 15, 2010 $
8.625% Senior Notes $500 million April 1, 2031 $
6.500% Equity Unit Bond $287.5 million May 16, 2006 $
8.700% Senior Notes (issued $250 million March 15, 2005 $
in connection with a certain
debt and derivative transaction
to synthetically issue
(pound) 160 million debt)
TOTAL HELD: $
[Plan Support Agreement Signature Page for Supporting Noteholder]
SUPPORTING LENDER:
_________________________________________
NAME
By:______________________________________
Name:
Title:
LENDER FACILITY AMOUNT OUTSTANDING PRINCIPAL AMOUNT HELD
--------------- ------------------ ---------------------
NRG Revolver $1,000,000,000
L/C Facility $125,000,000
Xxxxx Credit Agreement $1,081,000,000
TOTAL HELD: $
[Plan Support Agreement Signature Page for Supporting Lender]
SCHEDULE 1-A
(RELEVANT NRG SUBSIDIARIES)
CONTINUING SUBSIDIARIES
FINANCE GROUP DEBTOR STATE OF INCORPORATION
------------- ------ ----------------------
N/A NRG Energy, Inc. Delaware
N/A NRG Power Marketing Inc. Delaware
N/A NRGenerating Xxxxxxxx Xx. 00 X.X.
XXXXXXXXX Xxxxxx Kill Power LLC Delaware
NORTHEAST Astoria Gas Turbine Power LLC Delaware
NORTHEAST Berrians I Gas Turbine Power, LLC
NORTHEAST Connecticut Jet Power LLC Delaware
NORTHEAST Devon Power LLC Delaware
NORTHEAST Dunkirk Power LLC Delaware
NORTHEAST Xxxxxxx Power LLC Delaware
NORTHEAST Middletown Power LLC Delaware
NORTHEAST Montville Power LLC Delaware
NORTHEAST Northeast Generation Holding LLC Delaware
NORTHEAST Norwalk Power LLC Delaware
NORTHEAST NRG Eastern LLC Delaware
NORTHEAST NRG Northeast Generating LLC Delaware
NORTHEAST Oswego Harbor Power LLC Delaware
NORTHEAST Somerset Power LLC Delaware
SOUTH CENTRAL Big Cajun II Unit 4 LLC Delaware
SOUTH CENTRAL Louisiana Generating LLC Delaware
SOUTH CENTRAL NRG New Roads Holdings LLC Delaware
SOUTH CENTRAL NRG South Central Generating LLC Delaware
SOUTH CENTRAL NRG Central US LLC
SOUTH CENTRAL South Central Generation Holding LLC
NON-CONTINUING SUBSIDIARIES
FINANCE GROUP DEBTOR STATE OF INCORPORATION
------------- ------ ----------------------
XXXXX NRG Capital LLC Delaware
XXXXX NRG Finance Company I LLC Delaware
SCHEDULE 1-B
OMITTED: CONFIDENTIAL TREATMENT UNDER RULE 24B-2 REQUESTED
SCHEDULE 1-C
OMITTED: CONFIDENTIAL TREATMENT UNDER RULE 24B-2 REQUESTED
SCHEDULE 2-A
(SENIOR NOTES)
ISSUANCE ISSUE AMOUNT INDENTURE DATE MATURITY
-------- ------------ -------------- --------
6.750% Senior Notes $340 million March 13, 2001; July 15, 2006
July 16, 2001
7.500% Senior Notes $250 million June 1, 1997 June 15, 2007
7.500% Senior Notes $300 million May 25, 1999 June 1, 2009
7.625% Senior Notes $125 million January 21, 1996 February 1, 2006
7.750% Senior Notes $350 million March 13, 2001; April 1, 2011
April 5, 2001
7.970% Senior Notes (ROARS) $233 million March 20, 2000 March 15, 2020
8.000% Senior Notes (ROARS) $240 million November 8, 1999 November 1, 2013
8.250% Senior Notes $350 million September 11, 2000 September 15, 2010
8.625% Senior Notes $500 million March 13, 2001; April 5, April 1, 2031
2001; July 16, 2001
6.500% Equity Unit Bond $287.5 million March 13, 2001 May 16, 2006
8.700% Senior Notes (issued $250 million March 20, 2000 March 15, 2005
in connection with a certain
debt and derivative
transaction to synthetically
issue (pound) 160 million debt)
SCHEDULE 2-B
(LENDER FACILITIES)
CREDIT AGREEMENT DESCRIPTION
---------------- -----------
NRG Revolver 364-Day Revolving Credit Agreement dated as of
March 8, 2002 (as the same may be amended,
supplemented or restated from time to time)
among NRG Energy, Inc., the financial
institutions party thereto, ABN Amro Bank
N.V., as administrative agent, Solomon Xxxxx
Xxxxxx 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.
L/C Facility $125 Million Standby Letter of Credit Facility
dated as of November 30, 1999 (as the same may
be amended, supplemented or restated from time
to time) among NRG Energy, Inc., the lenders
party thereto and Australia and New Zealand
Banking Group Limited as administrative agent.
Xxxxx Credit Agreement Credit Agreement dated May 8, 2001 (as the
same may be amended, supplemented or restated
from time to time) among NRG Finance Company I
LLC, Credit Suisse First Boston as
administrative agent, the lenders party
thereto and NRG Audrain Generation LLC,
LSP-Xxxxxx Energy, LLC, LSP-Pike Energy, LLC
and NRG Turbine LLC, as sub-borrowers.
PAGE 1
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
EXHIBIT A
(TERM SHEET)
NRG ENERGY INC.
TERM SHEET CONCERNING NRG PLAN AND RELATIONSHIP WITH XCEL ENERGY INC.
DATED AS OF MAY 13, 2003
The following (this "TERM SHEET") is an outline of (i) the key terms and
provisions of a plan or plans of reorganization for NRG Energy Inc. ("NRG") and
the other NRG Entities (as defined below) and (ii) in connection therewith, the
key terms for the resolution, settlement and treatment under such plan or plans
of, among other things, (a) the claims and causes of action (as described more
fully below) of NRG against Xcel Energy Inc. ("XCEL"), (b) Xcel's claims and
causes of action (as described more fully below) against NRG and (c) claims and
causes of action (as described more fully below) of the Noteholder Group (as
defined below) and the Bank Group (as defined below) against Xcel.
This Term Sheet is subject to finalization and execution of a Plan Support
Agreement (the "PSA") to which this Term Sheet is intended to be attached as
Exhibit A and the completion of the remaining due diligence on the Internal
Revenue Code "gross receipts" test referred to in Section VI.B(B). Upon
execution of the PSA, this Term Sheet is intended to be binding on the
signatories to the PSA in accordance with the terms of the PSA. However, this
Term Sheet remains subject to, among a variety of other things, finalizing any
incomplete Schedules hereto, resolving any terms that are bracketed or indicated
as being "open" or subject to further review, and acceptable definitive
documentation of all matters contemplated herein, including any plan of
reorganization for NRG, any court-approved Disclosure Statement related thereto
and any agreements related to or terms and conditions of such NRG plan. Any vote
in favor of any NRG plan, whether or not it includes the terms and conditions
set forth herein, is not being solicited by or agreed to by this Term Sheet and
is subject to, among a variety of other things, those matters listed above.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THIS TERM SHEET IS
BEING PROVIDED AS PART OF SETTLEMENT DISCUSSIONS AND, AS A RESULT, SHALL BE
TREATED AS SUCH PURSUANT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND
STATE LAW EQUIVALENTS.
I. THE APPLICABLE ENTITIES
The Parties Generally: Those persons or entities that execute the PSA (the
"PARTIES" and individually a "PARTY").
Xcel: Xcel Energy Inc. ("XCEL").
NRG: NRG Energy, Inc. ("NRG").
The Relevant NRG Subsidiaries: Of the majority-owned direct and indirect
subsidiaries of NRG (collectively, the "NRG
SUBSIDIARIES"), those subsidiaries listed on
SCHEDULE 1-A to the PSA or who otherwise become part
of the Chapter 11 Cases (together with NRG, the "NRG
ENTITIES").
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PROVIDED AS PART OF SETTLEMENT
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RULE OF EVIDENCE 408 AND ALL
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The Noteholder Group: The persons identified on SCHEDULE 1-B to the PSA
(collectively, as comprised from time to time, the
"NOTEHOLDER GROUP"), being legal or beneficial
holders of, or investment managers with respect to,
some of the "NOTES" identified on SCHEDULE 2-A to
the PSA. The members of the Noteholder Group and all
other holders of the Notes from time to time are
referred to as the "NOTEHOLDERS."
The Bank Group: The persons identified on SCHEDULE 1-C to the PSA
(collectively, the "BANK GROUP"; those persons
separately identified on Schedule 1-C, as comprised
from time to time, the "GLOBAL STEERING COMMITTEE"),
being legal or beneficial holders of the claims
under "LENDER FACILITIES" identified on SCHEDULE 2-B
to the PSA, comprising (i) the NRG revolving credit
facility (the "NRG REVOLVER"), (ii) the NRG letter
of credit facility (the "L/C FACILITY") and (iii)
the Credit Agreement (as amended, modified and
supplemented) dated May 8, 2001 among NRG Finance
Company I LLC, Credit Suisse First Boston, the
lenders party thereto and NRG Audrain Generation
LLC, LSP-Xxxxxx Energy, LLC, LSP-Pike Energy, LLC
and NRG Turbine LLC, as sub-borrowers (the "XXXXX
CREDIT AGREEMENT").
II. DEFINED TERMS
A. "BANKRUPTCY COURT": The Bankruptcy Court exercising jurisdiction over
the Chapter 11 Cases.
B. "PETITION DATE": The date on which an order for relief is entered
with respect to a chapter 11 case with NRG as debtor
and debtor-in-possession, such case, together with
the chapter 11 cases for those subsidiaries listed
on SCHEDULE 1-A to the PSA and those other NRG
Subsidiaries which NRG consolidates with the NRG
chapter 11 case, are referred to herein as the
"CHAPTER 11 CASES."
C. "EFFECTIVE DATE": The date on which the NRG Plan becomes effective in
accordance with its terms, the occurrence of which
shall be subject to various conditions to
effectiveness pursuant to the NRG Plan as agreed to
by the Parties. As of the Effective Date, the
Confirmation Order shall be in full force and
effect, and shall not have been stayed or modified,
but there shall be no requirement that the
Confirmation Order be a Final Order for the
Effective Date to occur.
D. "XCEL PAYMENT DATE": The later of (i) 90 days after the date (the
"CONFIRMATION DATE") on which there occurs the entry
of the Confirmation Order on the docket of the
Bankruptcy Court and (ii) one business day after the
Effective Date.
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PROVIDED AS PART OF SETTLEMENT
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E. "NRG PLAN": The chapter 11 plan or plans of reorganization with
respect to the NRG Entities, such plan or plans, the
related disclosure statement(s) and all plan related
documents, agreements and orders to be fully
consistent with the terms and provisions of this
Term Sheet and otherwise acceptable to the Parties.
The order of the Bankruptcy Court confirming the NRG
Plan is referred to as the "CONFIRMATION ORDER."
F. "FINAL ORDER": An order or judgment of the Bankruptcy Court as
entered on the docket in the Chapter 11 Cases that
has not been reversed, stayed, modified or amended,
and as to which the time to appeal or seek
certiorari has expired and no appeal or petition for
certiorari has been timely taken, or as to which any
appeal that has been taken or any petition for
certiorari that has been timely filed has been
resolved by the highest court to which the order or
judgment was appealed from or from which certiorari
was sought.
G. "NRG RELEASED Collectively, all claims or causes of action of any
CAUSES OF ACTION": kind or nature (whether known or unknown) which NRG,
any of the NRG Subsidiaries or any creditor of NRG,
directly or indirectly, has or may have as of the
Effective Date against (A) Xcel or any officer,
director, employee, affiliate (other than NRG and
the NRG Subsidiaries), agent or other party acting
on behalf of Xcel or an affiliate of Xcel (other
than NRG and the NRG Subsidiaries), in each case in
their capacity as such (Xcel and all such persons
and entities being collectively referred to as the
"XCEL RELEASED PARTIES"), in respect of the Support
and Capital Subscription Agreement between Xcel and
NRG dated May 29, 2002 (such claims are referred to
as the "SUPPORT AGREEMENT CLAIMS"), (B) the Xcel
Released Parties in respect of any other matter
relating to NRG or any of the NRG Subsidiaries or
any of the claims of any creditor against NRG or any
of the NRG Subsidiaries and all liabilities and
causes of action related to such claims and (C) any
other person or entity (together with the Xcel
Released Parties, the "RELEASED PARTIES") to the
extent (but only to the extent) that such person or
entity is entitled to a claim for indemnification,
reimbursement, contribution, subrogation or
otherwise against any of the Xcel Released Parties
in respect thereof, it being understood that the
liability of any such person or entity other than to
the extent of its claims against the Xcel Released
Parties shall not be released and is expressly
preserved (the claims set forth in clauses (B) and
(C), as more particularly described in Section IV.A
and subject to the exceptions described in Section
IV.B, are referred to as "ALL OTHER CLAIMS").
Notwithstanding the foregoing, the NRG Released
Causes of Action shall not include the Separate Bank
Claims. In the event any creditor of NRG or any of
the NRG Subsidiaries sells, assigns, trades, or
otherwise
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PROVIDED AS PART OF SETTLEMENT
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RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
transfers its claim or cause of action against NRG
or any of the NRG Subsidiaries to any third party
(including an affiliate or subsidiary of such
creditor) (a "TRANSFEREE") at any time, such
Transferee shall be deemed a creditor of NRG or the
NRG Subsidiaries as applicable and subject to the
terms of this Term Sheet.
H. "SEPARATE BANK Collectively, those members of the Bank Group as
SETTLEMENT GROUP": identified on SCHEDULE II.H hereto that have
Separate Bank Claims and who shall be entitled to
the Separate Bank Settlement Payment.
I. "SEPARATE BANK Collectively, all claims or causes of action of any
CLAIMS": kind or nature, whether known or unknown, which any
member of the Separate Bank Settlement Group or a
Transferee thereof, directly or indirectly, has or
may have against any of the Released Parties related
in any manner to or arising in any manner in respect
of such Separate Bank Settlement Group member's or
Transferee's loans, financings, letter of credit
facilities and other financing and support
facilities provided to NRG or any of the NRG
Subsidiaries, such claims to include, without
limitation, claims against the Released Parties of
the type described in clauses (2) through (7) and
clause (9) of Section IV.A below.
J. "SEPARATE BANK Pursuant to or in connection with the NRG Plan, $112
SETTLEMENT PAYMENT": million of cash to be funded by Xcel on the Xcel
Payment Date to NRG will be concurrently paid by NRG
to the Separate Bank Settlement Group on the Xcel
Payment Date, but expressly subject to 100% of the
members of the Separate Bank Settlement Group prior
to that time having executed and delivered to Xcel
the Separate Bank Settlement Releases as described
in Section V.D. The Separate Bank Settlement Payment
shall not be property of NRG's chapter 11 estate.
The Separate Bank Settlement Payment is being paid
by Xcel solely to facilitate the NRG Plan and the
benefits to Xcel thereunder. The Separate Bank
Settlement Payment is, expressly, not being paid as
any concession of the validity of any claims being
released.
K. "XCEL CONTRIBUTION": (1) Collectively, (1) $640 million, subject to the
provisions of Sections III.B and III.C. and
(2) the Xcel Released Causes of Action. $238
million of the Xcel Contribution shall be paid
in cash to NRG on the Xcel Payment Date (the
"INITIAL CONTRIBUTION"). $50 million of the
Xcel Contribution shall be paid to NRG on the
later of January 1, 2004 and the Xcel Payment
Date (the "SECOND INSTALLMENT"). The Second
Installment may be paid by Xcel in Xcel stock
pursuant to the Xcel Shares Option (as
described in Section III.C). Except as
provided in Section
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PROVIDED AS PART OF SETTLEMENT
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III.B with respect to the timing thereof and
subject to reduction as set forth in Section
V.C, $352 million of the Xcel Contribution
shall be paid in cash to NRG on the later of
April 30, 2004 and the Xcel Payment Date (the
"THIRD INSTALLMENT"); provided, however, that
Xcel shall not be required to pay NRG the
positive difference, if any, between the Third
Installment and the amount of the Cash Refund
(as defined below) received by Xcel as of such
date until 30 days after the due date of the
Third Installment.
(2) Although, as indicated in Section III.A(2),
the Release-Based Amount is being paid in part
to facilitate the NRG Plan and the benefits to
Xcel thereunder, the payment of the Third
Installment will be required regardless of
whether the Cash Refund is ever received or
whether any Xcel Tax Benefit is later reduced
or eliminated on audit by a taxing authority.
The Third Installment shall be payable without
interest; provided, if Xcel defaults in the
timely payment of the Third Installment
(taking into account the 30 day grace period
set forth above), the unpaid amount shall
accrue simple interest at 10% per annum from
the date of non-payment until the date of
payment (in addition to any other remedies
such as collection actions, the reasonable
cost of which shall also be payable by Xcel).
(3) An escrow account will be maintained by a
disbursing agent for receipt of any portion of
the Xcel Contribution received after the Xcel
Payment Date; the disbursing agent shall
promptly distribute to the Unsecured Creditor
Class (defined below) all funds received in
this account, subject to requirements for
disbursement of the Release-Based Amount and
subject to standard hold-back provisions with
respect to Disputed Claims.
L. "XCEL RELEASED CAUSES Collectively, all claims or causes of action of any
OF ACTION": kind or nature (whether known or unknown) which Xcel
has or may have against any of the NRG Entities or
any officer, director, employee, affiliate or agent
of any of the NRG Entities, in each case in their
capacity as such, except as otherwise provided in
this Term Sheet (such exclusion to include, for
instance, Xcel's existing and future intercompany
claims against the NRG Entities as set forth in
Section IX.A hereof).
M. "Continuing Debtor THOSE NRG SUBSIDIARIES IDENTIFIED AS CONTINUING
Subsidiaries": DEBTOR SUBSIDIARIES ON Schedule 1-A TO THE PSA.
PAGE 6
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
N. "Noncontinuing Debtor THOSE NRG SUBSIDIARIES IDENTIFIED AS NONCONTINUING
Subsidiaries": DEBTOR SUBSIDIARIES ON Schedule 1-A TO THE PSA.
III. DETAILS OF THE XCEL CONTRIBUTION AND THE SEPARATE BANK SETTLEMENT PAYMENT
A. Allocation of Xcel (1) $250 million of the Xcel Contribution (the
Contribution: "SUPPORT AGREEMENT AMOUNT") shall be
Contribution: in exchange for the release of
the NRG Released Causes of Action comprised of
the Support Agreement Claims. The Support
Agreement Amount shall be payable out of the
entire Initial Contribution and $12 million of
the Second Installment. The Confirmation Order
shall expressly provide that the Support
Agreement Claims belong solely and exclusively
to NRG and not to any creditor of NRG or of
any other NRG Entity and that the Support
Agreement Claims are fully released as to all
entities as of the Effective Date, subject to
payment in full of the Support Agreement
Amount.
(2) Up to $390 million of the Xcel Contribution
(the "RELEASE-BASED AMOUNT"), together with
the Xcel Released Causes of Action, shall be
in exchange for the releases described in
Section V.C of the NRG Released Causes of
Action comprised of All Other Claims. The
Released-Based Amount shall be paid out of $38
million of the Second Installment and the
entire Third Installment.
The Release-Based Amount is being paid by Xcel
solely to facilitate the NRG Plan and the benefits
to Xcel thereunder. The Release-Based Amount is,
expressly, not being paid as any concession of the
validity of any claims being released.
PAGE 7
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
B. Payment of Xcel (1) As of April 1, 2003, Xcel's senior unsecured
Contribution in the Event public notes (the "XCEL NOTES") were rated
of an Xcel Downgrade BBB- by Standard & Poor's and Baa3 by Xxxxx'x
(the "4/1/03 Ratings"). In the event that on
the Confirmation Date the Xcel Notes have not
retained at least the 4/1/03 Ratings for a
period of at least 120 consecutive days
through and including the Confirmation Date,
then Xcel, in its sole discretion, may,
subject to the creditor election described
below, pay up to $150 million of the Initial
Contribution no later than 10 business days
after the Xcel Payment Date in registered,
unrestricted and freely-tradable "XEL" common
stock ("XEL STOCK") that has been registered
under the Securities Act of 1933, as amended,
pursuant to an effective registration
statement (the "XCEL DOWNGRADE ELECTION"). In
such event, no later than five business days
after the Confirmation Date, Xcel shall issue
a press release stating whether Xcel has
elected to make any or all of $150 million of
the Initial Contribution in XEL Stock and the
portion, if any, of such part of the Initial
Contribution that will be paid in XEL Stock.
The number of shares of XEL Stock that Xcel
shall be required to deliver shall be the
nearest whole number of shares equal to (x)
the amount of the Initial Contribution made in
XEL Stock divided by (y) the average closing
price for XEL Stock for the last ten full
trading days through and including the
business day prior to the date when the
portion of the Initial Contribution to be paid
in XEL Stock is made.
PAGE 8
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
(2) Notwithstanding the foregoing, the "Authorized
Party" (as defined below) may request that
Xcel not exercise the Xcel Downgrade Election
by causing Xcel to receive written notice of
such request (an "NRG PAYMENT REQUEST") within
five business days after Xcel's issuance of
the press release set forth above. After
timely receipt by Xcel of an NRG Payment
Request, Xcel shall be required to pay NRG the
$150 million of the Initial Contribution in
cash on the business day after the Xcel Notes
have retained at least the 4/1/03 Ratings for
a period of at least 120 consecutive days. In
addition, through the Effective Date and prior
to payment in full by Xcel of the Initial
Contribution, the Authorized Party may revoke
the NRG Payment Request by causing Xcel to
receive written notice of such revocation (an
"NRG PAYMENT REVOCATION"). Once given, an NRG
Payment Revocation shall be irrevocable. In
addition, on the 180th day after receipt by
Xcel of an NRG Payment Request, if Xcel shall
not have been required to pay NRG the $150
million of the Initial Contribution in cash
prior to such date, the NRG Payment Revocation
shall be deemed given to Xcel. Upon receipt or
deemed receipt by Xcel of an NRG Payment
Revocation, Xcel shall pay the portion of the
Initial Contribution subject to the Xcel
Downgrade Election in Xcel Stock within 10
business days after the later of (i) receipt
or deemed receipt of the NRG Payment
Revocation and (ii) the Xcel Payment Date. The
number of shares of XEL Stock that Xcel shall
be required to deliver shall be the nearest
whole number of shares equal to (x) the amount
of the Initial Contribution made in XEL Stock
divided by (y) the average closing price for
XEL Stock for the last ten full trading days
through and including the business day prior
to the date when the portion of the Initial
Contribution to be paid in XEL Stock is made.
PAGE 9
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
(3) If (i) on the Confirmation Date the Xcel Notes
have retained at least the 4/1/03 Ratings for
a period of at least 120 consecutive days but
(ii) at any time after the Confirmation Date
and prior to the Xcel Payment Date the Xcel
Notes have not retained at least the 4/1/03
Ratings for a period of at least 120
consecutive days, then the provisions of
subsections (1) and (2) above shall apply, but
Xcel, in its sole discretion, may, subject to
an NRG Payment Request, exercise the Xcel
Downgrade Election and pay the requisite XEL
Stock no later than the later of (1) 10
business days after the Xcel Payment Date and
(2) 105 days after the first date on which the
Xcel Notes have not retained at least the
4/1/03 Ratings for a period of at least 120
consecutive days (the "DOWNGRADE DATE"). In
such event, Xcel shall issue a press release
stating the specifics of its Xcel Downgrade
Election no later than five business days
after the Downgrade Date. In addition, in this
instance, upon receipt by Xcel of an NRG
Payment Revocation, Xcel shall pay the portion
of the Initial Contribution subject to the
Xcel Downgrade Election in XEL Stock within
the later of (i) 10 business days after
receipt of the NRG Payment Revocation and (ii)
105 days after the Downgrade Date.
(4) For purposes of this Section III.B, the term
"AUTHORIZED PARTY" shall mean collectively,
the official committee of unsecured creditors
of NRG in the Chapter 11 Cases (the
"CREDITORS' COMMITTEE") and the Global
Steering Committee. The Creditors' Committee
or the Global Steering Committee acting
without the other shall not be an Authorized
Party.
(5) In addition to the foregoing, in the event
that on the Xcel Payment Date the Xcel Notes
have not retained at least the 4/1/03 Ratings
for a period of at least 120 consecutive days
through and including the date payment of the
Third Installment is due, then the Third
Installment shall be extended to the later of
June 30, 2004 and sixty days after the Xcel
Payment Date.
PAGE 10
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
C. Xcel Shares Option: No later than five business days after the date on
which the Confirmation Order is entered on the
docket of the Bankruptcy Court, Xcel shall issue a
press release stating whether Xcel has elected to
make any or all of the Second Installment in XEL
Stock and the portion, if any, of the Second
Installment that will be paid in XEL Stock (the
"XCEL SHARES OPTION"). To the extent that Xcel
chooses the Xcel Shares Option, Xcel shall make such
portion of the Second Installment in XEL Stock,
pursuant to an effective registration statement. The
number of shares of XEL Stock that Xcel shall be
required to deliver shall be the nearest whole
number of shares equal to (x) the amount of the
Second Installment made in XEL stock divided by (y)
the average closing price for XEL Stock for the last
ten full trading days through and including the
business day prior to the date the Second
Installment is due.
D. Mechanics of Separate The Separate Bank Settlement Payment shall be in
Bank Settlement Payment: exchange for the release of 100% of the Separate
Bank Claims and shall be payable entirely in cash.
The Confirmation Order shall expressly provide that
when the Separate Bank Settlement Payment is made,
the Separate Bank Claims shall be fully released as
to all Released Parties as of the Effective Date.
E. Xcel Released Causes The component of the Xcel Contribution comprised of
of Action: the Xcel Released Causes of Action shall be
delivered and effective as of the Effective Date.
IV. NRG RELEASED CAUSES OF ACTION
A. Included Claims: The "All Other Claims" component of the NRG Released
Causes of Action shall include:
(1) any claim that is property of any NRG
Entities' estate pursuant to section 541 of
the Bankruptcy Code or otherwise;
(2) any preference, fraudulent conveyance and
other actions under sections 510, 544, 545,
547, 548, 549, 550 or 553 of the Bankruptcy
Code or any state law equivalents;
(3) any claims arising out of illegal dividends or
similar theories of liability;
(4) any claims asserting veil piercing, alter ego
liability or any similar theory;
(5) any claims based upon unjust enrichment;
(6) any claims for breach of fiduciary duty;
PAGE 11
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
(7) any claims for fraud, misrepresentation or any
state or federal securities law violations;
(8) any claim that NRG or any NRG Subsidiary may
have as a result of having been a member of
the Xcel affiliated tax group or a signatory
to an Xcel tax sharing agreement; and
(9) except as described in Section IV.B, all other
claims, obligations, suits, judgments,
damages, demands, debts, rights, causes of
action and liabilities against the Released
Parties as of the Effective Date whether or
not liquidated or unliquidated, fixed or
contingent, matured or unmatured, known or
unknown, foreseen or unforeseen, then existing
or thereafter arising, in law or in equity.
B. Excluded Claims: The "All Other Claims" component of the NRG Released
Causes of Action shall not include:
(1) any obligations relating to Xcel's payment and
performance of the Xcel Contribution and the
other benefits to be provided by Xcel as
described in this Term Sheet;
(2) any obligations relating to a "transitional
services agreement" of the type described in
Section VI.E;
(3) any post-Effective Date obligations relating
to the "employee matters agreement" of the
type described in Section VI.F;
(4) any obligations of the Released Parties under
the agreements set forth on in SCHEDULE VI.I;
or
(5) the Separate Bank Claims.
PAGE 12
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
V. ADDITIONAL ISSUES REGARDING THE XCEL CONTRIBUTION AND THE SEPARATE BANK
SETTLEMENT PAYMENT
A. Classification of (1) The NRG Plan will classify all allowed
Noteholder Group, impaired unsecured claims against NRG (other
Bank Group: than convenience claims) into one pari passu
class (the "UNSECURED CREDITOR CLASS"). This
class will include, without limitation, all
unsecured creditors holding funded debt claims
against NRG (including the debenture portion
of the NRZ Equity Units), all recourse claims
against NRG of creditors of the NRG
Subsidiaries and other general unsecured
claims against NRG such as rejection claims,
trade claims, etc.
(2) All Noteholder claims, all Bank Group claims,
including claims under the Lender Facilities,
and all Bank project lender recourse claims
against NRG (excluding, in each case,
postpetition interest, letter of credit fees
and other similar postpetition charges not
generally allowable under the Bankruptcy
Code), will be allowed in full in accordance
with the terms of the applicable documents
that give rise to such claims, without
defense, offset, counterclaim, reduction,
subordination or recharacterization. The
Parties reserve all rights as to (i) the
proper calculation of the amount of any such
claims in accordance with the relevant
documentation for such claims and (ii) solely
in connection therewith, the proper
interpretation of all such documents. The
Parties will use their commercially reasonable
efforts to resolve any issues (if any)
concerning such matters either consensually or
judicially prior to the commencement of the
hearing on the Disclosure Statement for the
NRG Plan.
B. Allocation of The Support Agreement Amount shall be paid to NRG
Support Agreement and available pro rata to all allowed claims in the
Amount: Unsecured Creditor Class (which claims, as to
members of the Separate Bank Settlement Group, shall
not be reduced by receipt of the Separate Bank
Settlement Payment); provided, however, that the NRG
Plan shall provide which portion, if any, of the
Support Agreement Amount shall be retained by NRG to
the extent necessary to provide working capital for
its business.
PAGE 13
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
C. Timing and (1) In addition to the general releases set forth
Allocation of Release- in the NRG Plan as described in Section VI.A,
Based Amount: the relevant ballots distributed in connection
with the NRG Plan to the creditors of NRG will
have an election (the "RELEASE ELECTION"), in
form and substance satisfactory to Xcel, by
which each creditor of NRG can expressly elect
to release, in such creditor's capacity both
as a creditor of NRG and (if applicable) as a
creditor of any NRG Subsidiary, the Released
Parties from all NRG Released Causes of Action
by checking an appropriate box on such ballot,
subject to such creditor's receipt of its pro
rata share of the Release-Based Amount. The
Released-Based Amount shall be distributable
pro rata to all allowed claims in the
Unsecured Creditor Class (which claims, as to
members of the Separate Bank Settlement Group,
shall not be reduced by receipt of the
Separate Bank Settlement Payment), provided
that creditors not checking the box would not
receive their pro rata portion of the
Release-Based Amount; instead, the aggregate
share of the Release-Based Amount of those who
did not check the box which otherwise would
have been payable to all such creditors (if
they had checked the box) will be credited
against and deducted from the Xcel
Contribution in inverse order of maturity.
(2) The Release-Based Amounts so credited or
deducted will be based upon the maximum amount
for which such claim(s) could be allowed. In
the event such claim(s) are allowed by a Final
Order in an amount less than the maximum
amount, the Release-Based Amount withheld on
account of the difference between the maximum
amount and allowed amount, to the extent an
Xcel Contribution payment has been reduced by
such credit or deduction, will be distributed
ratably to creditors entitled to the
Release-Based Amount. A party with a claim
against NRG and an NRG Subsidiary as of the
Petition Date and who agrees to eliminate such
claim against NRG as result of separate
consideration from an NRG Subsidiary shall be
deemed to have retained its original claim
against NRG solely for purposes of the
Released-Based Amount unless such creditor's
claim against the NRG Subsidiary is unimpaired
or such creditor agrees to release all of its
NRG Causes of Action against the Released
Parties as part of the elimination of its
claim against NRG. In connection with the NRG
Plan, NRG, Xcel, the Creditors' Committee, the
Global Steering Committee and the Noteholder
Group shall enter into an agreement specifying
the details as to how to calculate the
Released-Based Amount payable by Xcel to NRG
at any time based upon, among other things,
the creditors who make the Release Election,
the creditors who do not make the Release
Election, the allowance and/or estimation of
claims and other factors (the "RELEASED-BASED
AMOUNT AGREEMENT").
PAGE 14
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
D. Timing and (1) Provided that 100% of the Separate Bank
Allocation of Separate Settlement Group members have executed and
Bank Settlement delivered a Separate Bank Settlement Release
Payment: to Xcel, the Separate Bank Settlement Payment
shall be paid in cash simultaneously with the
payment of the Initial Contribution and shall
be allocated solely to the Separate Bank
Settlement Group.
(2) In addition to the general releases set forth
in the Plan as described in Section VI.A and
the Release Election described in Section
V.C., release forms (the "SEPARATE BANK
SETTLEMENT RELEASES") will be distributed to
the members of the Separate Bank Settlement
Class. The Separate Bank Settlement Releases
will not call for a vote on the NRG Plan, as
the Separate Bank Claims are only against the
Released Parties, not the NRG Entities. The
Separate Bank Settlement Releases will be in
form and substance satisfactory to Xcel and
the Bank Group, will be a condition to the
occurrence of the Effective Date and will
permit each member of the Separate Bank
Settlement Group to expressly elect to release
the Released Parties from all Separate Bank
Claims by signing and returning the Separate
Bank Settlement Release to Xcel. In exchange
for 100% of the members of the Separate Bank
Settlement Group signing and returning the
Separate Bank Settlement Release, such members
would receive their share (as determined by
and among the members of the Separate Bank
Settlement Group) of the Separate Bank
Settlement Payment.
VI. OTHER XCEL-RELATED PLAN AND CONFIRMATION ORDER PROVISIONS
A. General Release of The NRG Plan would provide that NRG, each of the NRG
NRG Released Causes Subsidiaries and, to the maximum extent permitted by
of Action: law, each impaired creditor of the NRG Entities
would be deemed to have released the Released
Parties as of the Effective Date from all NRG
Released Causes of Action, whether or not, in the
case of a creditor, such creditor has voted for or
against, or has not voted with respect to, the NRG
Plan and whether or not such creditor has objected
to the NRG Plan or the release of its NRG Released
Causes of Action against the Released Parties
pursuant to the NRG Plan.
B. Tax Issues: (A) For federal income tax purposes, Xcel shall
claim a worthless stock deduction for its NRG stock
for the year in which the NRG Plan becomes effective
(the "LOSS YEAR"). Xcel shall not claim a worthless
stock deduction for any year before the Loss Year.
"XCEL TAX BENEFIT" means the reduction in federal
income tax liability of Xcel, any affiliate and the
Xcel consolidated group, as the case may be,
attributable to the worthless stock deduction,
including without limitation the amount of any cash
PAGE 15
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
refund of taxes (including any interest paid
thereon) to be generated by the carryback of such
deduction in whole or in part to any taxable year
prior to the Loss Year (the "CASH REFUND") and the
reduction of any estimated payments of federal
income tax liability in the Loss Year or any
subsequent year, which reduction may be made (or not
made) by Xcel in its sole discretion.
The NRG Plan and the Confirmation Order would
provide that:
The Xcel Tax Benefit would be the sole and exclusive
property of Xcel, and the NRG Entities and any party
claiming by or through them would release any right
or interest that they might otherwise have in the
Xcel Tax Benefit as part of the NRG Plan; and
NRG and its direct and indirect subsidiaries would
not be (A) reconsolidated with Xcel or any of its
other affiliates for tax purposes at any time after
their June 2002 re-affiliation or (b) treated as a
party to or otherwise entitled to the benefits of
any tax sharing agreement with Xcel.
(B) From the Petition Date through and including the
Effective Date, NRG shall neither cause nor permit
to be made any distribution from an NRG subsidiary
to the extent that (1) the distribution would be
treated as a dividend for federal income tax
purposes and (2) the distribution or portion thereof
so treated, alone or in combination with any other
distribution during that period, to the extent so
treated, would exceed $x. For purposes of this
limitation, "x" shall be based on (and be less than)
the excess of NRG's aggregate gross receipts over
its aggregate receipts from the passive income
sources listed in section 165(g)(3)(B) of the
Internal Revenue Code and shall be determined by
Xcel and communicated to NRG as quickly as
practicable after completion of the remaining due
diligence on the "gross receipts" test set forth in
that section.
C. Injunctions The Confirmation Order shall:
(1) (A) contain a finding that certain NRG
Released Causes of Action to be specified by
Xcel (including all veil piercing, alter ego
and similar claims and Support Agreement
Claims) are, to the maximum extent permitted
by law, the exclusive property of the NRG
Entities, as debtors-in-possession, pursuant
to section 541 of the Bankruptcy Code, (B)
contain a ruling that all NRG Released Causes
of Action and all Separate Bank Claims against
the Released Parties are fully settled and
released under the NRG Plan, (C) contain a
ruling that the Separate Bank Settlement
PAGE 16
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
Payment is not property of NRG's chapter 11
estate and (D) permanently enjoin any creditor
of any of the NRG Entities from pursuing any
NRG Released Causes of Action or any Separate
Bank Claims against any of the Released
Parties; and
(2) permanently enjoin any person or entity that
holds, has held or may hold a claim or cause
of action released under the NRG Plan from
taking any of the following actions on account
of any NRG Released Causes of Action or the
Separate Bank Claims: (A) commencing or
continuing in any manner any action or other
proceeding; (B) enforcing, attaching,
collecting or recovering in any manner any
judgment, award, decree or order; (C)
creating, perfecting or enforcing any lien or
encumbrance, (D) asserting any setoff, right
of subrogation or recoupment of any kind
against any debt, liability or obligation due
to any released person or entity; and (E)
commencing or continuing any action in any
manner, in any place, that does not comply
with or is inconsistent with the provisions of
the NRG Plan.
(3) Notwithstanding anything herein to the
contrary, if 100% of the members of the
Separate Bank Settlement Group do not sign the
Separate Bank Settlement Release or the
Separate Bank Settlement Payment is not made
in accordance with the terms herein, the
Separate Bank Claims shall not be released,
discharged or otherwise impaired in any way by
the NRG Plan, the Confirmation Order or any
other order in the Chapter 11 Cases.
D. Certain Obligations On the Effective Date, all Xcel guarantees, equity
and Arrangements: contribution obligations, indemnification
obligations, arrangements whereby Xcel has posted
cash collateral and all other credit support
obligations with respect to NRG or any NRG
Subsidiary, in each case set forth on SCHEDULE VI.D
hereto or such additional items added to Schedule
VI.D. by Xcel by the NRG bar date not to exceed in
the aggregate $5 million of face amount for such
added items (collectively, the "GUARANTEES"), shall
be terminated (with Xcel having no further liability
for such obligations or arrangements) and all such
cash collateral shall be returned to Xcel on the
Effective Date, except that NRG shall cooperate with
Xcel and support the return to Xcel of the $11.5
million of cash collateral posted by Xcel for the
Mid-Atlantic project at the earliest practical date
after the current expiration of the relevant
Mid-Atlantic agreement in July of 2003. NRG and the
NRG Subsidiaries shall be solely responsible for
renewing, administering and paying for their own
insurance policies starting with insurance policies
relating to property and other coverages
PAGE 17
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
expiring as of June, 2003, and insurance policies
covering director and officer liabilities (the "D&O
POLICY") expiring on August 18, 2003 (the "D&O
EXPIRATION DATE"); provided, however, that Xcel
shall (1) not cancel the D&O Policy before the D&O
Expiration Date, (2) reasonably cooperate with NRG's
past or current officers and directors who may be
entitled to coverage under the D&O Policy to allow
them to administer their claims and (3) if available
and at the sole cost of NRG, and after receiving
sufficient funds from NRG, at NRG's request purchase
customary tail coverage for NRG's officers and
non-Xcel directors in office on the day prior to the
Petition Date and who are entitled to coverage under
the D&O Policy.
E. Transitional The NRG Plan would, if desired by NRG, incorporate a
Services Agreement: transitional services agreement pursuant to which
Xcel would provide NRG specified administrative
services for a specified reasonable agreed period
after the Effective Date, as requested by NRG, and
would receive compensation therefor at the cost to
Xcel of goods provided or the fair value of services
provided.
F. Employee Matters The NRG Plan would approve an employee matters
Agreement: agreement pursuant to which various obligations with
respect to employees and benefit plans would be
allocated between Xcel and NRG as set forth in
SCHEDULE VI.F hereto as of the Effective Date.
G. Tax Matters Effective as of the Effective Date, Xcel and NRG
Agreement and Control shall enter into a tax matters agreement that
Group Indemnity: addresses liability for any unpaid taxes of NRG and
Xcel for periods during which NRG and Xcel were part
of the same consolidated, combined or unitary tax
group, entitlement to any tax refunds for such
periods, the control of contests for such periods,
cooperation with respect to audits and such other
matters as would be customary in a tax matters
agreement between similarly-situated corporations.
In addition, Xcel and NRG shall use their
commercially reasonable efforts to negotiate and
execute on the Effective Date an agreement
satisfactory to the Parties whereby Xcel and NRG (on
behalf of itself and the NRG Subsidiaries) shall
separately indemnify each other on and as of the
Effective Date for any actions taken by the
indemnifying party through the Effective Date where
the statutory liability imposed on the indemnified
party is solely by reason of Xcel's direct or
indirect ownership of NRG and the NRG Subsidiaries.
H. NRZ Equity Units: The Confirmation Order shall provide that the right
and obligation of any holder of an NRZ Equity Unit
to purchase common shares of Xcel was terminated as
of the Petition Date.
PAGE 18
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
I. Other Xcel The NRG Plan would provide for assumption by NRG of
Agreements: the agreements with Xcel described on SCHEDULE VI.I
hereto. Agreements not on Schedule VI.I would be
rejected.
VII. OVERALL NRG PLAN CLASSIFICATION AND TREATMENT OF CLAIMS
TYPE OF
CLASS CLAIM/INTEREST TREATMENT VOTING RIGHTS
----- -------------- --------- -------------
Class 1 Unsecured Priority Claims Unimpaired. Each holder of a Class 1 Claim will Not entitled to
receive cash in an amount equal to the allowed amount vote. Deemed to
of their claim. accept.
Class 2 Convenience Claims Unimpaired. Each holder of an allowed claim in Not entitled to
Class 2 will receive cash equal to the amount of such vote. Deemed to
Claim against such Debtor (as reduced, if applicable, accept.
pursuant to an election by the holder thereof in
accordance with Section 3.4 of the NRG Plan).
CLASS 3 Secured Claims against Impaired. [AT THE DEBTORS' OPTION], the Debtors shall Entitled to vote
Noncontinuing Debtor distribute to each holder of a secured claim
Subsidiaries classified in Class 3 (a) the collateral securing
such allowed secured Claim, (b) cash in an amount
equal to the proceeds actually realized from the
sale, pursuant to section 363(b) of the Bankruptcy
Code, of any collateral securing such allowed secured
claim, less the actual costs and expenses of
disposing of such collateral, or (c) such other
treatment as may be agreed upon by the Debtors and
the holder of such allowed secured claim, on the
later of (i) the Effective Date and (ii) the
fifteenth business day of the first month following
the month in which such claim becomes an allowed
secured claim, or as soon after such dates as is
practicable. Each holder of an allowed claim in
Class 3 shall retain the liens securing such claim as
of the confirmation date until the Debtors shall have
made the distribution to such holder provided for in
Article IV of the NRG Plan.
Class 4 Intentionally Omitted
PAGE 19
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
TYPE OF
CLASS CLAIM/INTEREST TREATMENT VOTING RIGHTS
----- -------------- --------- -------------
Class 5 Miscellaneous Secured Impaired. [AT THE DEBTORS' OPTION,] the Debtors shall Entitled to vote
Claims distribute to each holder of an allowed miscellaneous
secured claim (a) the collateral securing such allowed
secured claim, (b) cash in an amount equal to the proceeds
actually realized from the sale, pursuant to section 363(b)
of the Bankruptcy Code, of any collateral securing such
allowed secured claim, less the actual costs and expenses of
disposing of such collateral, or (c) such other treatment as
may be agreed upon by the Debtors and the holder of an
allowed miscellaneous secured claim, on the later of (i) the
Effective Date and (ii) the fifteenth business day of the
first month following the month in which such claim becomes
an allowed secured claim, or as soon after such dates as is
practicable. Each holder of an allowed claim in Class 5
shall retain the Liens securing such claim as of the
confirmation date until the Debtors shall have made the
distribution to such holder provided for in Article IV of
the NRG Plan.
PAGE 20
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
TYPE OF
CLASS CLAIM/INTEREST TREATMENT VOTING RIGHTS
----- -------------- --------- -------------
Class 6 NRG Unsecured Claims, Impaired. Except as otherwise provided in the NRG Entitled to vote
including NRG Rejected Plan with respect to certain letter of credit claims,
Guaranty Claims each holder of an allowed claim in Class 6 will
receive its pro rata share of (a) on the Effective
Date, the New NRG Notes, (b) on the Effective
Date, 100,000,000 shares of New NRG Common Stock,
subject to dilution by the Management Incentive Plan
as set forth in Section IX.J of this Term Sheet, and
(c) on the date of the Third Installment (or as soon
thereafter as practical), cash in an amount not less
than the Release-Based Amount; and provided further
that the Cash distributable to holders of allowed
claims in Class 6 represents a pro rata share of the
Released-Based Amount, as set forth and described in
Section III.A of this Term Sheet and each holder of
an Allowed Claim classified in Class 6 shall receive
its pro rata share of such cash only if such holder
elects (by checking the appropriate box on its
Ballot) to grant the releases described in Section
III.A of this Term Sheet.
Class 7 PMI Unsecured Claims Impaired. On the Effective Date, each holder of an Entitled to vote
allowed Class 7 claim will receive its pro rata share
of New NRG Notes and shares of New NRG Common Stock
allocated to Class 7 from Class 6.
Class 8 Unsecured Noncontinuing Impaired. Each holder of an allowed Class 8 claim Not entitled to
Debtor Subsidiary Claims shall receive no distribution under the NRG Plan on vote. Deemed to
account of such Class 8 Claims. reject.
Class 9 NRG Intercompany Claims To be discussed. To be discussed.
Class 10 Intentionally Omitted
PAGE 21
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
TYPE OF
CLASS CLAIM/INTEREST TREATMENT VOTING RIGHTS
----- -------------- --------- -------------
Class 11 NRG Old Common Stock Impaired. No property will be distributed to or Not entitled to
retained by the holders of allowed equity Interests vote. Deemed to
in Class 11. On the Effective Date, each and every reject.
equity interest in Class 11 shall be cancelled and
discharged and the holders of Class 11 equity
interests shall receive no distribution under the NRG
Plan on account of such equity interests.
Class 12 PMI Common Stock Unimpaired. NRG shall retain its 100% ownership Not entitled to
interest in PMI. vote. Deemed to
accept.
Class 13 Securities Litigation Impaired. Each and every claim in Class 13 shall be Not entitled to
Claims cancelled and discharged and the holders of Class 13 vote. Deemed to
claims shall receive no distribution under the NRG reject.
Plan on account of such claims.
Class 14 Noncontinuing Debtor Impaired. Each and every equity interest in Class 14 Not entitled to
Subsidiary Common Stock shall be cancelled and discharged and the holders of vote. Deemed to
Class 14 equity interests shall receive no reject.
distribution under the NRG Plan on account of such
equity interests.
VIII. DETAILS OF CLASS 6 DISTRIBUTIONS
A. THE "New NRG Notes": THE NEW NRG SENIOR NOTES SHALL (I) BE IN AN INITIAL
PRINCIPAL AMOUNT OF $500,000,000.00; (II) AT THE
OPTION OF REORGANIZED NRG EITHER (A) ACCRUE INTEREST
COMMENCING ON THE EFFECTIVE DATE PAYABLE
SEMIANNUALLY IN CASH AT A RATE OF 10% PER ANNUM, OR
(B) ACCRUE INTEREST AT A RATE OF 12% PER ANNUM
PAYABLE IN KIND; PROVIDED, HOWEVER, THAT ANY
INTEREST PAID IN KIND SHALL BE PAID IN CASH UPON THE
EARLIER OF THE FIFTH ANNIVERSARY OF THE EFFECTIVE
DATE OR THE MATURITY DATE OF THE NEW NRG NOTES; AND
(III) MATURE ON THE SEVENTH ANNIVERSARY OF THE
EFFECTIVE DATE. THE NEW NRG NOTES WILL BE ISSUED
UNDER A NEW INDENTURE IN A FORM CONTAINED IN THE NRG
PLAN SUPPLEMENT.
PAGE 22
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
B. THE "New NRG (1) THE NEW NRG COMMON STOCK WOULD BE REGISTERED
Common Stock": UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR, IF APPLICABLE, PURSUANT TO
BANKRUPTCY CODE SS.1145, AND NRG WOULD USE ITS
BEST EFFORTS TO OBTAIN NASDAQ LISTING.
(2) REGISTRATION RIGHTS AGREEMENT FOR A PERCENTAGE
OF NEW NRG COMMON STOCK TO BE AGREED UPON BY
THE PARTIES AND SUBJECT TO CUSTOMARY BLACKOUT
PERIODS.
PAGE 23
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
C. THE "NRG Cash [Formula [Open] for determining amount of NRG cash
AMOUNT": (i.e., not including any Xcel Contribution) to be
distributed to Class 6, including relationship to
Exit Financing]
IX. MISCELLANEOUS
A. Intercompany Claims: (1) As part of the settlement with Xcel, any pre-
or postpetition claims of Xcel against any of
the NRG Entities arising from the provision of
intercompany goods or services to any of the
NRG Subsidiaries or from payment by Xcel under
any Guaranty shall paid in full in cash by NRG
in the ordinary course (including payment
during the Chapter 11 Cases) in the
appropriate amount based on the underlying
contracts or agreements between the parties
(including all agreements listed on Schedule
VI.I), without any subordination or
recharacterization of such claims, except that
the claims which are to be paid in full in the
ordinary course during the Chapter 11 Cases
shall not include claims of Xcel arising under
the Guarantees listed in Schedule VI.D but
shall include any claims of Xcel related to
RDF, Thermal and NSP-Minnesota.
Notwithstanding the foregoing, (A) all claims
arising or accruing on or prior to January 31,
2003 for the provision of intercompany goods
or services under the Xcel/NRG administrative
Services Agreement dated June, 2002 (the
"ASA") and all claims for amounts paid by Xcel
on or prior to January 31, 2003 under any
Guaranty (collectively, the "SETTLED CLAIMS")
shall not be paid until the Effective Date, at
which time Xcel shall receive, on account of
and in full and final settlement of such
claims, an unsecured, 2.5 year non amortizing
promissory note of NRG in the principal amount
of $10 million bearing interest at the per
annum rate of 3%; and (B) after January 31,
2003 NRG shall only be responsible for amounts
billed under the ASA related to corporate
insurance obtained for the benefit of NRG and
other services requested by NRG (collectively,
the "REIMBURSABLE CLAIMS"). A comprehensive
schedule of the types of all existing
intercompany claims is set forth on Schedule
IX.A hereto. NRG agrees that it shall not
order services from Xcel under the ASA or
otherwise inconsistent with the provisions of
this Term Sheet.
(2) NRG shall not take any action, or fail to take
any action, which would increase the
likelihood that Xcel will be required to make
any payment on any Guaranty during the Chapter
11 Cases.
PAGE 24
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
(3) To the extent, if any, that intercompany
claims of Xcel (other than Settled Claims and
other than claims under the ASA which are not
Reimbursable Claims, but including claims for
reimbursement of payments made by Xcel under
Guarantees) are unpaid as of the Effective
Date, such amounts shall be paid in full in
cash on the Effective Date by the relevant NRG
Entity under the NRG Plan without any
subordination or recharacterization of such
claims.
(4) The provisions of this Section IX.A shall not
apply to any tax sharing agreement. All tax
sharing agreements, to the extent otherwise
binding on Xcel and NRG, shall terminate
(without any residual or ongoing liability of
either party to the other) as of the Effective
Date for all taxable periods, past, present
and future. On and after the Effective Date,
tax matters shall be governed exclusively by
the tax matters agreement referred to in
Section VI.G above.
(5) A schedule of the types of existing
intercompany claims is set forth on SCHEDULE
IX.A hereto. Except as provided in the
foregoing paragraphs in this Section IX.A, no
intercompany claims between NRG and Xcel shall
be paid.
B. Solicitation; As discussed in the introductory language to this
Fiduciary Duties: Term Sheet and in the PSA, notwithstanding anything
herein to the contrary, each Party expressly
acknowledges and agrees that the Parties do not
desire and do not intend in any way to derogate from
or diminish the solicitation requirements of
applicable securities and bankruptcy law, the
fiduciary duties of the NRG Entities as debtors in
possession, the fiduciary duties of any Noteholder
or member of the Bank Group that is appointed to the
Creditors' Committee or the role of any state or
federal agencies with regulatory authority
concerning Xcel or any of the NRG Entities.
PAGE 25
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
C. BOARD OF DIRECTORS (A) XCEL HAS INFORMED THE PARTIES THAT THE NRG BOARD
AND MANAGEMENT: OF DIRECTORS IMMEDIATELY AFTER THE TIME OF THE ORDER
FOR RELIEF IN THE CHAPTER 11 CASES SHALL BE:
(1) XXXXX XXXXXX, WHO SHALL ALSO BE CHAIRMAN OF
THE BOARD;
(2) XXXXXX X. XXXX, XX.; AND
(3) XXXXXXX XXXXXXXX, WHO SHALL ALSO BE CRO OF
NRG.
(B) THE BOARD OF DIRECTORS OF REORGANIZED NRG WILL
BE STAGGERED AND WILL CONSIST OF:
(1) SIX DIRECTORS DESIGNATED BY THE NOTEHOLDER
GROUP;
(2) FOUR DIRECTORS DESIGNATED BY THE MEMBERS OF
THE BANK GROUP; AND
(3) THE POST-REORGANIZATION CEO.
IN ADDITION, THERE WILL BE A COMMITTEE CONSISTING OF
TWO DESIGNEES OF THE NOTEHOLDER GROUP AND TWO
DESIGNEES OF THE GLOBAL STEERING COMMITTEE. SUCH
COMMITTEE, BY MAJORITY VOTE, SHALL BE SATISFIED AS
OF THE EFFECTIVE DATE WITH THE PERSONS DESIGNATED TO
SERVE AS CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL
OFFICER OF REORGANIZED NRG, AS WELL AS THE
EMPLOYMENT TERMS FOR SUCH PERSONS.
D. CHARTER/BYLAWS: OTHER GOVERNANCE MATTERS (E.G., CHARTER AND BYLAWS)
OF REORGANIZED NRG TO BE DISCUSSED IN GOOD FAITH.
E. OTHER RELEASES: IN ADDITION TO THE RELEASES DESCRIBED IN SECTIONS
V.C, AND VI.A ABOVE, THE NRG PLAN SHALL CONTAIN
CUSTOMARY RELEASES FOR DIRECTORS, OFFICERS, PRE AND
POST PETITION COMMITTEES, PROFESSIONALS, XCEL, NRG,
ETC.
F. OTHER INJUNCTIONS: IN ADDITION TO THE INJUNCTIONS DESCRIBED IN SECTION
VI.C ABOVE, THE NRG PLAN SHALL CONTAIN OTHER
CUSTOMARY CHAPTER 11 INJUNCTIONS.
G. INDEMNIFICATION: THE NRG PLAN SHALL CONTAIN CUSTOMARY INDEMNIFICATION
PROVISIONS FOR DIRECTORS, OFFICERS, PRE AND POST
PETITION COMMITTEES, PROFESSIONALS, XCEL, NRG, ETC.
PAGE 26
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
H. DUTCH AUCTION THE NRG PLAN WILL INCORPORATE VOLUNTARY DEBT/EQUITY
PROVISIONS: REALLOCATION PROCEDURES AS MORE FULLY
DESCRIBED IN THE NRG PLAN.
I. SETTLEMENTS WITH NRG AND THE APPLICABLE DEBTOR INTEND TO SEEK FROM
HOLDERS OF PROJECT-LEVEL PROJECT-LEVEL SECURED LENDERS, ON A
SECURED DEBT AND FUNDING OF PROJECT-BY-PROJECT BASIS, A CONSENSUAL RESTRUCTURING
XXXXX PROJECTS: OR DISCHARGE OF SUCH DEBT. NRG IS CONTINUING TO
EVALUATE WHAT ADDITIONAL MODIFICATIONS, IF ANY, ARE
APPROPRIATE.
IN THE INTERIM, DURING THE PENDENCY OF THE CHAPTER
11 CASES, NRG SHALL FUND THE "NRG XXXXX" PROJECTS
PURSUANT TO THE NRG SUBSIDIARY TERM SHEET ATTACHED
AS Schedule IX.I HERETO.
J. MANAGEMENT THE NRG PLAN WILL INCLUDE A MANAGEMENT INCENTIVE PLAN
INCENTIVE PLAN: TO BE DETERMINED.
K. DISPUTED CLAIMS: (1) CUSTOMARY NRG INTEREST-BEARING RESERVE PENDING
RESOLUTION OF DISPUTED CLAIMS; AND
(2) AN INTEREST-BEARING RESERVE FOR XCEL'S
RELEASE-BASED AMOUNT FOR DISPUTED CLAIMS AS
DESCRIBED IN SECTION V.C ABOVE.
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
SCHEDULE II.H
SEPARATE BANK SETTLEMENT GROUP(1)
The banks and other financial institutions from time to time parties to (a) the
$1,000,000,000 364-Day Revolving Credit Agreement, dated as of March 8, 2002,
between NRG Energy, Inc., as Borrower, and ABN AMRO Bank N.V., as Administrative
Agent, as the same may be amended, restated, supplemented or otherwise modified;
(b) the $2,000,000,000 Credit Agreement, dated as of May 8, 2002, between NRG
Finance Company I LLC, as Borrower, and Credit Suisse First Boston, as
Administrative Agent, as the same may be amended, restated, supplemented or
otherwise modified; and (c) the $125,000,000 Standby Letter of Credit, dated as
of November, 1999, between NRG Energy, Inc., as Borrower, and Australia and New
Zealand Banking Group Limited, as Administrative Agent, as the same may be
amended, restated, supplemented or otherwise modified.
----------
(1) Allocation and mechanics (including concerning a reserve for undrawn ANZ
Letters of Credit) as agreed to between the agents.
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
SCHEDULE VI.D
(Certain Obligations and Arrangements Between Xcel and NRG)
GUARANTEES
Physical/ Date Guaranty Expires or
Counterparty Financial Commodity Amount of Guaranty Expired (NOTE "A")
------------ --------- --------- ------------------ ------------------------
AEP Energy Services, Inc. FINANCIAL ALL
American Electric Power Service Corp FINANCIAL ALL $ 7,000,000 12/31/2002
American Electric Power Service Corp PHYSICAL ELECTRIC
Aquila Merchant Services, Inc. FINANCIAL ALL
Aquila Merchant Services, Inc. PHYSICAL ELECTRIC $ 10,000,000 10/12/2002
Aquila Merchant Services, Inc. PHYSICAL NAT GAS
Bank of America, N.A. FINANCIAL ALL $ 10,000,000 8/31/2003
Consolidated Edison Energy, Inc. PHYSICAL ELECTRIC $ 10,000,000 12/31/2003
Constellation Power Source, Inc. FINANCIAL ALL $ 15,000,000 7/31/2003
Constellation Power Source, Inc. PHYSICAL ELECTRIC
Duke Energy Trading & Marketing LLC FINANCIAL ALL
Duke Energy Trading & Marketing LLC PHYSICAL ELECTRIC $ 15,000,000 5/24/2003
Duke Energy Trading & Marketing LLC PHYSICAL NAT GAS
El Paso Merchant Energy, L.P. FINANCIAL ALL
El Paso Merchant Energy, L.P. PHYSICAL ELECTRIC $ 12,000,000 2/28/2002
El Paso Merchant Energy, L.P. PHYSICAL NAT GAS
Entergy-Xxxx Trading, LP FINANCIAL ALL
Entergy-Xxxx Trading, LP PHYSICAL ELECTRIC $ 8,500,000 3/31/2003
Entergy-Xxxx Trading, LP PHYSICAL NAT GAS
Exelon Generation Company, LLC FINANCIAL ALL $ 7,000,000 3/31/2003
Exelon Generation Company, LLC PHYSICAL ELECTRIC
HQ Energy Services (U.S.) Inc. (tolling agmt) (tolling Terminated, (n/a)
agmt) Effective 11/30/02
X. Xxxx & Company FINANCIAL ALL $ 10,000,000 1/31/2004
Xxxxxx Xxxxxxx Capital Group Inc. FINANCIAL ALL $ 15,000,000 9/30/2003
Xxxxxx Xxxxxxx Capital Group Inc. PHYSICAL ELECTRIC
PG&E Energy Trading - Gas Corporation FINANCIAL ALL $ 2,000,000 12/31/2002
PG&E Energy Trading - Gas Corporation PHYSICAL NAT GAS
PG&E Energy Trading - Power, L.P. FINANCIAL ALL $ 9,000,000 12/31/2002
PG&E Energy Trading - Power, L.P. PHYSICAL ELECTRIC
PJM Interconnection, LLC FINANCIAL ALL $ 17,000,000 $12M 4/30/03,
$5M 7/31/03
PJM Interconnection, LLC PHYSICAL ELECTRIC
Select Energy, Inc. FINANCIAL ALL $ 3,000,000 8/31/2002
Select Energy, Inc. PHYSICAL ELECTRIC
Xxxxxxx Energy Corp. FINANCIAL ALL $ 4,000,000 11/30/2003
Xxxxxxx Energy Corp. PHYSICAL NAT GAS
Xxxxxxxx Energy Marketing & Trading FINANCIAL ALL Terminated, (n/a)
Effective 11/15/02
Xxxxxxxx Energy Marketing & Trading PHYSICAL ELECTRIC
Atlantic City Electric Company,
dba Conectiv FINANCIAL ALL $ 11,500,000 7/31/2003
(BGS Auction)
NEPOOL PHYSICAL ELECTRIC $ 60,000,000 12/31/2003
Obligation total, for the counterparties from above $ 226,000,000
Obligation total above covered under Xcel guaranties or assignments $ 226,000,000
NOTE "A":
Any transactions that were entered into with a CP on or before the expiration
date of the guaranty will be covered through the duration of the trade(s) on an
"evergreen" basis. Thus, for Aquila, El Paso, and PGET Power, all trade
obligations of NRG were entered into prior to the expiration dates of those
guaranties, even though the periods ultimately covered under those trade
obligations are relatively far out into the future (to 12/03 for Aquila and PGET
Power, to 12/06 for El Paso). The inclusion of a guaranty or other item on this
Schedule VI.D. which has expired shall not be deemed a statement that such
guaranty or other item is otherwise effective or in force or effect.
PAGE 1 of 1
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
BONDS
-----
BOND
NUMBER PRINCIPAL AMOUNT DESCRIPTION
------ --------- ------ -----------
INDEMNIFIED BY XCEL ENERGY:
ST. XXXX XXXXX
400SD3190 NRG Processing Solutions LLC $ 20,000.00 License Bond
000XX0000 NRG Energy Center Pittsburgh $ 75,000.00 Street Opening Bond
000XX0000 Meriden Gas Turbines, LLC $ 876,800.00 Subdivision Bond
400SH7763 Meridan Gas Turbines, LLC $ 768,490.00 Subdivision Bond
Sub-Total St. Xxxx $1,740,290.00
SAFECO BONDS
6161831 Xcel Energy, Inc. $ 20,000.00 Solid Waste Facility Bond
Sub-Total Safeco $ 20,000.00
CNA BONDS
929214989 NRG Energy Center $ 100,000.00 Highway Occupancy Permit Obligation Bond
929215308 NRG Power Marketing, Inc. $ 250,000.00 License Bond
929215309 NRG Energy Cneter San Diego LLC $ 5,000.00 Franchise Bond
929222788 NRG Processing Solutions LLC $ 100,000.00 Tree & Yard Waste Permit Bond
Yard Waste Composting & Processing Facility
929222789 NRG Processing Solutions LLC $ 45,000.00 Permit Bond
929222790 NRG Processsing Solutions LLC $ 72,400.00 Solid Waste Facility Permit Bond
929222795 NRG Power Marketing, Inc. $1,000,000.00 Bond of Distributor of Automotive Fuel
929222796 NRG Power Marketing Inc. $1,000,000.00 Motor Fuels Tax Bond
929224970 NRG Processing Solutions LLC $ 100,000.00 Waste Facility License & Permit Bond
929224971 NRG Processing Solutions LLC $ 25,000.00 Waste Facility License/Permit Bond
929224973 El Segundo Power LLC $ 10,000.00 Lease Bond
929224975 MM SKB Energy LLC $ 19,215.00 Processing Facility Bond
929224986 Dunkirk Power LLC $ 25,000.00 Bond of Distributor of Automotive Fuel
929224987 Xxxxxxx Power LLC $ 35,000.00 Bond of Distributor of Automotive Fuel
NRG Northeast Affiliate
929225083 Services, Inc. $ 29,000.00 Workers' Compensation Bond
929231861 NRG Ilion LP LLC $ 52,308.00 Utility Payment Bond
929239784 NRG Energy Center Pittsburgh LLC $ 80,000.00 Highway Restoration & Maintenance Bond
929239794 Dunkirk Power, LLC $ 53,000.00 Mined Land Reclamation Bond
BONDS
-----
BOND
NUMBER OBLIGEE EFF DATE EXP DATE PREMIUM SURETY DIV. INDEMNITY
------ ------- -------- -------- ------- ------ ---- ---------
INDEMNIFIED BY XCEL ENERGY:
ST. XXXX XXXXX
400SD3190 Hennepin County 6/30/2002 6/30/2003 $ 200.00 Xx. Xxxx XXX Xxx
000XX0000 Xxxx of Pittsburgh 5/15/2002 5/15/2003 $ 300.00 St. Xxxx NRG Yes
000XX0000 City of Meriden 8/24/2001 8/24/2003 $1,754.00 St. Xxxx NRG Yes
400SH7763 City of Meriden 8/24/2001 8/24/2003 $1,537.00 St. Xxxx NRG Yes
Sub-Total St. Xxxx $3,791.00
SAFECO BONDS
6161831 County of Hennepin 8/9/2002 8/9/2003 $ 200.00 Safeco NRG Yes
Sub-Total Safeco $ 200.00
CNA BONDS
929214989 PA Dept. of Trans. 9/21/2002 9/21/2003 $ 450.00 CNA NRG Yes
929215308 Pennsylvania Public Yes
Utility Commission 9/12/2002 9/12/2003 $2,250.00 CNA NRG
929215309 City of San Diego 9/2/2002 9/2/2003 $ 100.00 CNA NRG Yes
929222788 Xxxxx County 10/12/2002 10/12/2003 $ 560.00 CNA NRG Yes
Yes
929222789 Dakota County 10/10/2002 10/10/2003 $ 252.00 CNA NRG
929222790 Dakota County 10/10/2002 10/10/2003 $ 405.00 CNA NRG Yes
929222795 State of New York 10/12/2002 10/12/2003 $2,250.00 CNA NRG Yes
929222796 State of New Jersey 10/12/2002 10/12/2003 $2,250.00 CNA NRG Yes
929224970 County of Anoka 11/17/2002 11/17/2003 $ 560.00 CNA NRG Yes
929224971 County of Anoka 11/17/2002 11/17/2003 $ 140.00 CNA NRG Yes
929224973 State of California 11/9/2002 11/9/2003 $ 100.00 CNA NRG Yes
929224975 Commonwealth of PA 11/25/2002 11/25/2003 $ 108.00 CNA NRG Yes
929224986 State of New York 1/1/2003 1/1/2004 $ 100.00 CNA NRG Yes
929224987 Sate of New York 1/2/2003 1/3/2004 $ 100.00 CNA NRG Yes
Yes
929225083 State of New York 12/31/2002 12/31/2003 $ 351.00 CNA NRG
929231861 Niagra Mohawk Power Yes Corp. 12/12/2002 12/12/2003 $ 471.00 CNA NRG
929239784 Commonwealth of PA 6/18/2002 6/18/2003 $ 160.00 CNA NRG Yes
929239794 State of New York 5/15/2002 5/15/2003 $ 106.00 CNA NRG Yes
PAGE 2 of 1
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
BONDS
-----
BOND
NUMBER PRINCIPAL AMOUNT DESCRIPTION
------ --------- ------ -----------
929239797 Cabrillo Power LLC $ 100,000.00 Lease Bond
929239799 NRG Energy $1,500,000.00 Permit Bond
929242598 Xxxxxx Kill Power LLC $ 10,000.00 Performance Bond
Sub-Total CAN $4,610,923.00
TOTAL INDEMNIFIED BY XCEL ENERGY $6,371,213.00
NON-INDEMNIFIED BONDS
U668424 NRG Energy, Inc. $ 30,000.00 Solid Waste Management Bond
TOTAL ALL NRG BONDS $6,401,213.00
BONDS
-----
BOND
NUMBER OBLIGEE EFF DATE EXP DATE PREMIUM SURETY DIV. INDEMNITY
------ ------- -------- -------- ------- ------ ---- ---------
929239797 State of California 5/21/2002 5/21/2003 $ 175.00 CNA NRG Yes
929239799 City of St. Xxxx, MN 5/23/2002 5/23/2003 $ 2,625.00 CNA NRG Yes
929242598 Department of Energy
Conservation 3/18/2002 3/18/2003 $ 50.00 CNA NRG Yes
Sub-Total CAN 13,563.00
TOTAL INDEMNIFIED BY XCEL ENERGY $17,554.00
NON-INDEMNIFIED BONDS
U668424 County of Washington 1/20/1999 1/20/2004 $ 400.00 Reliance NRG No
TOTAL ALL NRG BONDS $17,954.00
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
OTHER INDEMNIFICATION OBLIGATIONS
Agreement and Consent for Transfer to NRG between Northern States Power Company,
NRG Energy, Inc., Anoka County, Hennepin County, Xxxxxxxxx County, and
Tri-County Solid Waste Management Committee dated on or about August 20, 2001.
Affirmation Agreement between Northern States Power Company and NRG Energy, Inc.
dated August 8, 1993.
OTHER GUARANTY OBLIGATIONS
Guarantees of employment agreements for three NRG employees.
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
SCHEDULE VI.F
(EMPLOYEE BENEFIT MATTERS)
QUALIFIED DEFINED BENEFIT PENSION PLANS
- Xcel would continue to maintain the NRG benefit formulas for NRG employees
as part of the Xcel/NRG plan (the "Merged Plan") until the Effective Date.
- On the Effective Date, (a) NRG employees would stop participating in the
Merged Plan, (b) all NRG employee Merged Plan benefits would be frozen
(except as set forth below) and (c) the obligation for all such benefits
would remain in the Merged Plan and would be the responsibility of the
Merged Plan and Xcel to fund and provide. To the extent a partial
termination, within the meaning of Section 411(d)(3) of the Internal
Revenue Code, of the Merged Plan would occur as of the Effective Date,
either as a result of the NRG employees ceasing to be employed by Xcel and
its subsidiaries or otherwise, such employees would be fully vested as of
the Effective Date in their frozen benefits under the Merged Plan as and
to the extent provided by Section 411(d)(3) of the Internal Revenue Code.
On and after the Effective Date, the Merged Plan would provide that, as of
the Effective Date, with respect to NRG employees who are employed by NRG
and are participants in the Merged Plan on the Effective Date, credit for
employment with NRG on or after the Effective Date would be credited (i)
for vesting purposes under the Merged Plan, if no such partial termination
occurred, and (ii) for purposes of eligibility for entitlement for the
commencement or receipt of benefits under the Merged Plan (including,
without limitation, for eligibility for commencement or receipt of any
early retirement benefit or supplement), but (iii) for no other purposes
including, without limitation, benefit accrual purposes. As hereby
modified, such benefits to which NRG employees are entitled under the
terms of the Merged Plan would be paid to them by the Merged Plan as and
when provided therein.
NON-QUALIFIED RETIREMENT PLANS ("NQRPS")
- Xcel and NRG would determine prior to the Effective Date what proportion
of the obligations owing to current NRG employees under the NRG NQRPs is
legally allocable to Xcel by virtue of prior service by those employees as
Xcel (NSP) employees (the "Xcel NQRP Amount").
- Xcel would maintain responsibility for the Xcel NQRP Amount to the extent
it has not already satisfied its obligation therefor. The difference
between the total amount owing to current NRG employees under the NQRPs
and the Xcel NQRP Amount (the "NRG NQRP Amount") would be reinstated or
replaced with a similar nonqualified plan approved by the NRG Plan. Any
new plan in respect of the NRG NQRP Amount would be developed in
consultation with the Bank Group and the Noteholder Group.
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL
RULE OF EVIDENCE 408 AND ALL
BANKRUPTCY AND STATE LAW EQUIVALENTS
SCHEDULE VI.I
(Xcel/NRG Agreements To Be Assumed)
1. Agreement for the Use and Operation of Certain Facilities Located at the
High Bridge Plant dated Jan. 23, 2002.
2. Agreement for the Sale of Thermal Energy and Wood Byproduct between
Northern States Power Company and NRG Thermal f/k/a Norenco Corporation,
dated November 16, 1989.
3. Refuse Derived Fuel Supply Agreement between Northern States Power Company
and NRG Resource Recovery, Inc." (not dated) (Term: 1-1-1992 to
12-31-2001, automatically renewing for five year terms thereafter, unless
terminated by six month written notice.)
4. Lease and Agreement between Northern States Power Company and Minnesota
Waste Processing Company, L.L.C. dated September 13, 1994.
5. Lease and Agreement between Northern States Power Company and NRG Energy
Inc. dated July 21, 1997.
6. Short Term Coal Agreement for the Sale of Coal from Northern States Power
Company (dba Xcel Energy, Seller) to NRG Energy Center-Rock Tenn LLC
(Buyer) dated January 6, 2003.
7. Letter Agreement between e prime and NRG Energy, Inc. dated on or about
February 25, 2003.
8. Agreement For Consulting Services Between NRG Energy, Inc. And Utility
Engineering Corporation dated May 22, 2000.
SCHEDULE IX.A
(Intercompany Claims Owing to Xcel)
1. All amounts owed by NRG to Xcel in connection with various payments made
by Xcel in connection with the Guarantees.
2. Third Quarter 2002 estimated tax payment made to NRG.
3. All amounts owed by NRG to Xcel in connection with the ASA.
4. All amounts owed by NRG to Xcel in connection with various Northern States
Power Company and other agreements listed on Schedule VI.I.
5. All amounts owed by NRG to Xcel in connection with various engineering
services.
6. All amounts owed by NRG to Xcel in connection with e prime.
7. All amounts owed by NRG to Xcel in connection with NSP-Wisconsin.
8. All amounts owed by NRG to Xcel in connection with PSCo.
9. All amounts, if any, owed by NRG to Xcel for NRG's own utility usage.
SCHEDULE IX.I
(NRG Xxxxx Project Funding)
PROVIDED AS PART OF SETTLEMENT
DISCUSSIONS; SUBJECT TO FEDERAL RULE
OF EVIDENCE 408 AND ALL BANKRUPTCY
AND STATE LAW EQUIVALENTS
TERM SHEET CONCERNING CERTAIN SUBSIDIARIES OF
NRG ENERGY INC.
DATED AS OF MAY __ 2003
The following (the "Term Sheet") concerns certain matters relating to the
following indirect wholly-owned subsidiaries of NRG Energy Inc. ("NRG"): (a) NRG
Audrain Generating LLC ("Audrain"); (b) LSP-Xxxxxx Energy, LLC ("LSP-Xxxxxx")
and NRG Xxxxxx Turbines LLC (together with LSP-Xxxxxx, "Xxxxxx"); and (c)
LSP-Pike Energy, LLC ("Pike" and, together with Audrain and Xxxxxx, the
"Projects").
The Term Sheet is subject to finalization and execution of the Plan Support
Agreement, dated as of May __, 2003 (the "Plan Support Agreement"), by and among
NRG, certain of NRG's subsidiaries and affiliates as set forth therein, Excel
Energy Inc., the Supporting Noteholders (as defined therein), and the Supporting
Lenders (as defined therein).
Notwithstanding anything to the contrary in the foregoing, the Term Sheet is
being provided as part of settlement discussions and, as a result, shall be
treated as such pursuant to Federal Rule of Evidence 408 and all bankruptcy and
state law equivalents.
Parties: NRG, Audrain, Nelson, Pike and the lenders (the
"XxxXx Lenders") pursuant to the Credit Agreement,
dated as of May 8, 2001, by and among NRG Finance
Company I LLC, Audrain, LSP-Nelson, Pike, NRG
Turbine LLC, Credit Suisse First Boston, as
Administrative Agent, and the XxxXx Lenders,
together with all amendments, modifications,
renewals, restatements, substitutions and
replacements thereof and all documents, agreements
or instruments related thereto (the "XxxXx Credit
Agreement").
Collateral: The XxxXx Lenders, pursuant to the XxxXx Credit
Agreement, assert, and NRG does not dispute, a
security interest in substantially all of the
assets of Audrain (the "Audrain Collateral"), the
assets of Xxxxxx (the "Xxxxxx Collateral") and the
assets of Pike (the "Pike Collateral" and,
collectively with the Audrain Collateral and
Xxxxxx Collateral, the
"Collateral"), as more fully described in the
XxxXx Credit Agreement.
Audrain: NRG shall, subject to Bankruptcy Court approval
(if necessary), lend to Audrain reasonably
necessary funds (the "NRG Audrain Funds") to
preserve, maintain, operate and sell or otherwise
dispose of the Audrain Collateral until the
earlier of (a) December 31, 2003 and (b) the first
date on which the NRG Audrain Funds are equal to
or exceed $750,000. As a precondition to NRG's
obligation to lend the NRG Audrain Funds to
Audrain, the XxxXx Lenders shall agree to
subordinate their claims against Audrain,
including any payment of principal or interest in
respect thereof, to the prior repayment in full to
NRG of the NRG Audrain Funds.
Xxxxxx: The reasonably necessary funds to preserve,
maintain and sell or otherwise dispose of the
Xxxxxx Collateral shall (a) first, be provided
from the funds deposited in the bank accounts of
Xxxxxx and any insurance proceeds or refunds
related to Xxxxxx and (b) thereafter, be provided
by NRG, subject to Bankruptcy Court approval (if
necessary), in an amount not to exceed $500,000
(the funds to be provided by NRG are referred to
as the "NRG Xxxxxx Funds"). As a precondition to
NRG's obligation to lend the NRG Xxxxxx Funds to
Xxxxxx, the XxxXx Lenders shall agree to
subordinate their claims against Xxxxxx, including
any payment of principal or interest in respect
thereof, to the prior repayment in full to NRG of
the NRG Xxxxxx Funds.
Pike: The reasonably necessary funds to preserve,
maintain and sell or otherwise dispose of the Pike
Collateral shall be provided from the funds
deposited in the bank accounts of Pike and any
insurance proceeds or refunds related to Pike.
Sale or Disposition NRG shall not sell or otherwise dispose of the
Collateral without the prior approval of the XxxXx
Lenders; provided, the foregoing shall not
preclude NRG from abandoning any of the Collateral
if permissible under applicable law.
Proceeds To the extent NRG receives any proceeds or refunds
related to any of the Projects, including, without
limitation, insurance proceeds, such proceeds and
refunds shall be remitted to the appropriate
Project within 3 business days of NRG's receipt of
such funds.
Expenses of Disposition Any expenses incurred in the sale or disposition
of the Collateral, including, without limitation,
investment banker, broker and other professional
fees, shall be for the account of the XxxXx
Lenders and not chargeable against or payable by
NRG (but the foregoing is not intended to preclude
the XxxXx Lenders from applying any of the funds
lent by NRG to, or already on deposit with, any of
the Projects).
