Plan Support Agreement among NRG Energy, Inc., Xcel Energy Inc., Supporting Creditors, and Affiliates (May 13, 2003)

Summary

This agreement is between NRG Energy, Inc., certain subsidiaries, Xcel Energy Inc., and specified noteholders and lenders. It outlines their mutual commitment to support a proposed bankruptcy reorganization plan for NRG and its affiliates. The parties agree to work together to confirm and implement the plan, settle related claims, and avoid supporting any alternative plans. The agreement is subject to conditions in an attached term sheet and requires all parties to act in good faith while respecting legal and fiduciary duties during the bankruptcy process.

EX-10.01 5 c77119exv10w01.txt EX-10.01 PLAN SUPPORT AGREEMENT PAGE 1 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL EXECUTION COPY RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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; PAGE 2 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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 PAGE 3 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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 PAGE 4 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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; PAGE 5 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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 PAGE 6 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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 Finco 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 PAGE 7 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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: PAGE 8 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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 Finco 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 PAGE 9 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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; PAGE 10 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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 Finco 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 PAGE 11 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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. PAGE 12 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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 Matthew A. Cantor, Kirkland & Ellis, Citigroup Center, 153 East 53rd Street, New York, New York 10022-4611, fax: 212 ###-###-####; b. if to Xcel, to Brad B. Erens, Jones Day, 77 West Wacker, Chicago, Illinois, 60601-1692, fax: 312 ###-###-####, with a copy to Scott J. Friedman, Jones Day, 222 East 41st Street, New York, New York 10017, fax: 212 ###-###-####: c. if to the Supporting Noteholders, to Evan D. Flaschen, Bingham McCutchen LLP, One State Street, Hartford, CT 06103, fax: 860 ###-###-####; 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 Peter V. Pantaleo and David J. Mack, Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York, 10017-3954, fax: 212 ###-###-####. 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. PAGE 15 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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:

[Plan Support Agreement Signature Page for Supporting Noteholder] SUPPORTING LENDER: _________________________________________ NAME By:______________________________________ Name: Title:

[Plan Support Agreement Signature Page for Supporting Lender] SCHEDULE 1-A (RELEVANT NRG SUBSIDIARIES) CONTINUING SUBSIDIARIES

NON-CONTINUING SUBSIDIARIES

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)

SCHEDULE 2-B (LENDER FACILITIES)

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").

PAGE 2 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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-Nelson Energy, LLC, LSP-Pike Energy, LLC and NRG Turbine LLC, as sub-borrowers (the "FINCO 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.

PAGE 3 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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

PAGE 4 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL 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

PAGE 5 PROVIDED AS PART OF SETTLEMENT DISCUSSIONS; SUBJECT TO FEDERAL RULE OF EVIDENCE 408 AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS 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 Moody's (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) SCOTT DAVIDO, WHO SHALL ALSO BE CHAIRMAN OF THE BOARD; (2) ERSHEL C. REDD, JR.; AND (3) LEONARD LOBIONDO, 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 FINCO 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 FINCO" 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-Koch Trading, LP FINANCIAL ALL Entergy-Koch Trading, LP PHYSICAL ELECTRIC $ 8,500,000 3/31/2003 Entergy-Koch 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 J. Aron & Company FINANCIAL ALL $ 10,000,000 1/31/2004 Morgan Stanley Capital Group Inc. FINANCIAL ALL $ 15,000,000 9/30/2003 Morgan Stanley 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 Sprague Energy Corp. FINANCIAL ALL $ 4,000,000 11/30/2003 Sprague Energy Corp. PHYSICAL NAT GAS Williams Energy Marketing & Trading FINANCIAL ALL Terminated, (n/a) Effective 11/15/02 Williams 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. PAUL BONDS 400SD3190 NRG Processing Solutions LLC $ 20,000.00 License Bond 400SF4076 NRG Energy Center Pittsburgh $ 75,000.00 Street Opening Bond 400SH7762 Meriden Gas Turbines, LLC $ 876,800.00 Subdivision Bond 400SH7763 Meridan Gas Turbines, LLC $ 768,490.00 Subdivision Bond Sub-Total St. Paul $1,740,290.00 SAFECO BONDS ###-###-#### Xcel Energy, Inc. $ 20,000.00 Solid Waste Facility Bond Sub-Total Safeco $ 20,000.00 CNA BONDS ###-###-#### NRG Energy Center $ 100,000.00 Highway Occupancy Permit Obligation Bond ###-###-#### NRG Power Marketing, Inc. $ 250,000.00 License Bond ###-###-#### NRG Energy Cneter San Diego LLC $ 5,000.00 Franchise Bond ###-###-#### NRG Processing Solutions LLC $ 100,000.00 Tree & Yard Waste Permit Bond Yard Waste Composting & Processing Facility ###-###-#### NRG Processing Solutions LLC $ 45,000.00 Permit Bond ###-###-#### NRG Processsing Solutions LLC $ 72,400.00 Solid Waste Facility Permit Bond ###-###-#### NRG Power Marketing, Inc. $1,000,000.00 Bond of Distributor of Automotive Fuel ###-###-#### NRG Power Marketing Inc. $1,000,000.00 Motor Fuels Tax Bond ###-###-#### NRG Processing Solutions LLC $ 100,000.00 Waste Facility License & Permit Bond ###-###-#### NRG Processing Solutions LLC $ 25,000.00 Waste Facility License/Permit Bond ###-###-#### El Segundo Power LLC $ 10,000.00 Lease Bond ###-###-#### MM SKB Energy LLC $ 19,215.00 Processing Facility Bond ###-###-#### Dunkirk Power LLC $ 25,000.00 Bond of Distributor of Automotive Fuel ###-###-#### Huntley Power LLC $ 35,000.00 Bond of Distributor of Automotive Fuel NRG Northeast Affiliate ###-###-#### Services, Inc. $ 29,000.00 Workers' Compensation Bond ###-###-#### NRG Ilion LP LLC $ 52,308.00 Utility Payment Bond ###-###-#### NRG Energy Center Pittsburgh LLC $ 80,000.00 Highway Restoration & Maintenance Bond ###-###-#### 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. PAUL BONDS 400SD3190 Hennepin County 6/30/2002 6/30/2003 $ 200.00 St. Paul NRG Yes 400SF4076 City of Pittsburgh 5/15/2002 5/15/2003 $ 300.00 St. Paul NRG Yes 400SH7762 City of Meriden 8/24/2001 8/24/2003 $1,754.00 St. Paul NRG Yes 400SH7763 City of Meriden 8/24/2001 8/24/2003 $1,537.00 St. Paul NRG Yes Sub-Total St. Paul $3,791.00 SAFECO BONDS ###-###-#### County of Hennepin 8/9/2002 8/9/2003 $ 200.00 Safeco NRG Yes Sub-Total Safeco $ 200.00 CNA BONDS ###-###-#### PA Dept. of Trans. 9/21/2002 9/21/2003 $ 450.00 CNA NRG Yes ###-###-#### Pennsylvania Public Yes Utility Commission 9/12/2002 9/12/2003 $2,250.00 CNA NRG ###-###-#### City of San Diego 9/2/2002 9/2/2003 $ 100.00 CNA NRG Yes ###-###-#### Scott County 10/12/2002 10/12/2003 $ 560.00 CNA NRG Yes Yes ###-###-#### Dakota County 10/10/2002 10/10/2003 $ 252.00 CNA NRG ###-###-#### Dakota County 10/10/2002 10/10/2003 $ 405.00 CNA NRG Yes ###-###-#### State of New York 10/12/2002 10/12/2003 $2,250.00 CNA NRG Yes ###-###-#### State of New Jersey 10/12/2002 10/12/2003 $2,250.00 CNA NRG Yes ###-###-#### County of Anoka 11/17/2002 11/17/2003 $ 560.00 CNA NRG Yes ###-###-#### County of Anoka 11/17/2002 11/17/2003 $ 140.00 CNA NRG Yes ###-###-#### State of California 11/9/2002 11/9/2003 $ 100.00 CNA NRG Yes ###-###-#### Commonwealth of PA 11/25/2002 11/25/2003 $ 108.00 CNA NRG Yes ###-###-#### State of New York 1/1/2003 1/1/2004 $ 100.00 CNA NRG Yes ###-###-#### Sate of New York 1/2/2003 1/3/2004 $ 100.00 CNA NRG Yes Yes ###-###-#### State of New York 12/31/2002 12/31/2003 $ 351.00 CNA NRG ###-###-#### Niagra Mohawk Power Yes Corp. 12/12/2002 12/12/2003 $ 471.00 CNA NRG ###-###-#### Commonwealth of PA 6/18/2002 6/18/2003 $ 160.00 CNA NRG Yes ###-###-#### 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 ###-###-#### NRG Energy $1,500,000.00 Permit Bond ###-###-#### Arthur 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 ###-###-#### City of St. Paul, MN 5/23/2002 5/23/2003 $ 2,625.00 CNA NRG Yes ###-###-#### 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, Sherburne 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 Finco 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-Nelson Energy, LLC ("LSP-Nelson") and NRG Nelson Turbines LLC (together with LSP-Nelson, "Nelson"); and (c) LSP-Pike Energy, LLC ("Pike" and, together with Audrain and Nelson, 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 "FinCo 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 FinCo Lenders, together with all amendments, modifications, renewals, restatements, substitutions and replacements thereof and all documents, agreements or instruments related thereto (the "FinCo Credit Agreement"). Collateral: The FinCo Lenders, pursuant to the FinCo 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 Nelson (the "Nelson Collateral") and the assets of Pike (the "Pike Collateral" and, collectively with the Audrain Collateral and Nelson Collateral, the "Collateral"), as more fully described in the FinCo 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 FinCo 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. Nelson: The reasonably necessary funds to preserve, maintain and sell or otherwise dispose of the Nelson Collateral shall (a) first, be provided from the funds deposited in the bank accounts of Nelson and any insurance proceeds or refunds related to Nelson 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 Nelson Funds"). As a precondition to NRG's obligation to lend the NRG Nelson Funds to Nelson, the FinCo Lenders shall agree to subordinate their claims against Nelson, including any payment of principal or interest in respect thereof, to the prior repayment in full to NRG of the NRG Nelson 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 FinCo 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 FinCo Lenders and not chargeable against or payable by NRG (but the foregoing is not intended to preclude the FinCo Lenders from applying any of the funds lent by NRG to, or already on deposit with, any of the Projects).