EBG HOLDINGS LLC The Schrafft Center 529 Main Street, Suite 605 Charlestown, MA 02129

Exhibit 10.12

EBG HOLDINGS LLC
The Schrafft Center
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000

May 31, 2007

Astoria Generating Company Holdings, L.L.C.
c/o US Power Generating Company, LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer

Dear Sir:

     We refer to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of February 28, 2007, among US Power Generating Company, a Delaware corporation (“USPowerGenCo”), EBG Holdings LLC, a Delaware limited liability company (“EBG”) EBG Merger LLC, a Delaware limited liability company, Astoria Generating Company Holdings, L.L.C., a Delaware limited liability company (“Astoria”), and Astoria Merger LLC, a Delaware limited liability company. Capitalized terms not defined herein have the meanings assigned to them in the Merger Agreement.

     This letter agreement confirms our agreement that:

     (1) The first sentence of Section 1.7(a) of the Merger Agreement shall be amended in its entirety by inserting the following text in lieu thereof:

“From and after the Effective Time, the individuals set forth on Exhibit D-l hereto shall be the directors of USPowerGenCo until their successors shall have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the applicable Organizational Documents.”

     (2) Section 9. l(a) of the Merger Agreement shall be amended in its entirety by inserting the following text in lieu thereof:

“9.1 (a) Except as otherwise specifically provided for in this Agreement, EBG and its Subsidiaries party hereto, on the one hand, and Astoria, on the other hand, shall bear their respective expenses, costs and fees (including attorneys’ and auditors’ expenses, costs and fees, if any) in connection with the transactions contemplated hereby, including the preparation, execution and delivery of this Agreement and compliance herewith; provided that Astoria and EBG shall share equally all filing fees in connection with the filings required by the HSR Act; provided, further, that, if the Mergers are effected, USPowerGenCo and/or

Astoria shall pay all such expenses, costs and fees of EBG (including without limitation the fees and expenses set forth on Exhibit I hereto) and Astoria, subject to the terms and conditions hereof; provided, further, that (i) in no event shall USPowerGenCo and/or Astoria pay in the aggregate in excess of $25,000,000 of such expenses, costs and fees of EBG and (ii) in no event shall the transaction fees and transaction bonuses of Astoria (including amounts payable to Affiliates of Astoria as transaction fees or transaction bonuses which are expressly permitted to be paid, but specifically excluding transfer taxes and expenses reasonably related to the IPO) exceed $34,000,000. For purposes of confirming that the total of such transaction fees and transaction bonuses of Astoria does not exceed $34,000,000, EBG shall have a reasonable opportunity to review expenses that were deemed to be reasonably related to the IPO.”

     (3) Section 4.1 of the EBG Disclosure Letter is hereby amended by deleting the following text:

“Permission to borrow at prevailing market interest rates available to the borrower up to $25 million to pay merger transaction expenses.”

     (4) Section 4.1 of the Astoria Disclosure Letter is hereby amended by deleting the second paragraph thereof and inserting the following text in lieu thereof:

“In connection with the transactions contemplated by this Agreement, Astoria shall have the right to pay transaction fees and expenses, including fees and expenses to Affiliates and/or on behalf of EBG, in amounts not to exceed $59,000,000 (such $59,000,000 shall (i) include up to $25,000,000 of expenses, costs and fees (including attorneys’ and auditors’ expenses, costs and fees, if any) incurred by EBG in connection with the transactions contemplated this Agreement, (ii) include up to $34,000,000 of expenses, costs and fees (including attorneys’ and auditors’ expenses, costs and fees, if any) incurred by Astoria in connection with the transactions contemplated this Agreement and (iii) not include any fees and expenses in connection with the public offering of securities contemplated by the Investor Rights Agreement, which may be paid in addition to the expenses, costs and fees payable in (i) and (ii) above). Astoria shall have permission to borrow at prevailing market rates available to any borrower to pay such fees and expenses.”

     (5) Exhibit B to the Merger Agreement shall be replaced with the form of agreement attached hereto as Exhibit II, which form of agreement shall constitute Exhibit B under the Merger Agreement for all purposes.

     (6) Exhibit C to the Merger Agreement shall be replaced with the form of agreement attached hereto as Exhibit III, which form of agreement shall constitute Exhibit C under the Merger Agreement for all purposes.

     This letter agreement shall constitute an amendment of and waiver under the Merger Agreement to the extent of the matters expressly provided for herein but shall not constitute a waiver of any of the other rights, privileges or remedies provided for in the Merger Agreement, which shall continue in full force and effect as amended hereby. This letter agreement shall be governed by the laws of the State of New York.

* * * * *

     Please sign in the space provided therefor below and return to us a counterpart of this letter (including by means of facsimile or electronic transmission), whereupon this letter shall constitute a binding agreement among us.

	Very truly yours, EBG HOLDINGS LLC
	By:	/s/ Xxxxxxx Xxxxxxx
		Name:	Xxxxxxx Xxxxxxx
		Title:
	US POWER GENERATING COMPANY
	By:	/s/ Xxxxxxx Xxxxxxx
		Name:	Xxxxxxx Xxxxxxx
		Title:
	EBG MERGER LLC
	By:	/s/ Xxxxxxx Xxxxxxx
		Name:	Xxxxxxx Xxxxxxx
		Title:
	ASTORIA MERGER LLC
	By:	/s/ Xxxxxxx Xxxxxxx
		Name:	Xxxxxxx Xxxxxxx
		Title:

Acknowledged and agreed as of the date first written above:

ASTORIA GENERATING COMPANY HOLDINGS, L.L.C.
 

By:  

Name:  

Title:  

     Please sign in the space provided therefor below and return to us a counterpart of this letter (including by means of facsimile or electronic transmission), whereupon this letter shall constitute a binding agreement among us.

Very truly yours,

EBG HOLDINGS LLC
 

By:  

Name:  

Title:  

US POWER GENERATING COMPANY
 

By:  

Name:  

Title:  

EBG MERGER LLC
 

By:  

Name:  

Title:  

ASTORIA MERGER LLC
 

By:  

Name:  

Title:  

Acknowledged and agreed as of the date first written above: ASTORIA GENERATING COMPANY HOLDINGS, L.L.C.
By:	/s/ Xxxxxxx Xxxxxxxx
	Name:	Xxxxxxx Xxxxxxxx
	Title:	SVP & General Counsel

cc: Madison Dearborn Partners, LLC
Three First National Plaza
70 X. Xxxxxxx, Suite 3800
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx and Xxxxxxx Xxxxxx

Xxxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxx, P.C. and Xxxxxxx X. Xxxxxxxx, P.C.