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Tax Idemnification Agreement Dated June 28,

This is an actual contract by Cogeneration Corp. of America.

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Sectors: Utilities
Governing Law: New York, View New York State Laws
Effective Date: June 28, 1996
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Dated as of June 28, l996


1. Definitions 1
2. Obligations with respect to Taxes 2
3. Method of Payment 4
4. No Setoff 4
5. Nature of Obligations 5
6. Representations and Warranties 6
7. Covenants and Agreements 6
8. Enforcement 7
9. Notices 7
10. Survival of Representations and
Warranties 7
11. Severability 7
12. Amendment 8
13. Successors and Assigns 8
14. Number and Gender 8
15. Headings Descriptive 8
16. Governing Law; Jurisdiction; Waiver of
Trial by Jury 8
17. Counterparts 9
18. Term 10



This TAX INDEMNIFICATION AGREEMENT, dated as of June 28, 1996 (this "Agreement"), is made by and among (i) NRG GENERATING (NEWARK) COGENERATION INC., a Delaware corporation ("NRG Newark"), NRG GENERATING (PARLIN) COGENERATION INC., a Delaware corporation ("NRG Parlin") (each of the foregoing parties, individually, a "Borrower" and, collectively, "Borrowers"), (ii) NRG GENERATING (U.S.) INC., a Delaware corporation ("NRG Generating"), and (iii) CREDIT SUISSE, as agent ("Agent") on behalf of and for the benefit of the Secured Parties (as defined in the Credit Agreement referred to below).

W I T N E S S E T H :

WHEREAS, Borrowers and Agent have previously entered into the Credit Agreement, dated as of May 17, 1996, by and among (i) each of the Borrowers (ii) Credit Suisee and each Purchasing Lender and (iii) Agent (as the same may be amended, modified or supplemented from time to time, the "Credit Agreement"), pursuant to which the Lenders are willing to provide the Loans and the Commitments to Borrowers on the terms and subject to the conditions set forth in the Credit Agreement;

WHEREAS, NRG Generating owns 100% of the issued and outstanding capital stock of each Borrower and is willing to pay on behalf of, and defer collection of, certain tax-related obligations of each Borrower due to NRG Generating; and

WHEREAS, it is a condition precedent to the making of the Additional Loans and the availability of the Debt Service Line of Credit Facility Commitment by the Lenders under the Credit Agreement that NRG Generating and Borrowers shall have entered into this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, and in order to induce the Lenders and Agent to enter into the Credit Agreement with Borrowers, the parties hereto hereby agree as follows:


Unless otherwise defined herein, all capitalized terms used herein which are defined in the Credit Agreement shall have their respective meanings as therein defined and the terms set forth immediately below shall have the respective meanings assigned thereto.

"Income Tax" or "Income Taxes" means any Tax based upon, measured by, or calculated with respect to (i) net income or profits (including, but not limited to, any capital gains, minimum tax and any Tax on items of tax preference, but not including sales, use, real property gains, real or personal property, gross or net receipts, transfer or similar Taxes) or (ii) multiple bases (including, but not limited to, corporate franchise, doing business or occupation Taxes) if one or more of the bases upon which such Tax may be based upon, measured by, or calculated with respect to, is described in clause (i) above.

"Income Tax Return" means any return, filing, questionnaire, information return or other document required to be filed, including requests for extensions of time, filings made with estimated tax payments, claims for refund and amended returns that may be filed, for any period with any taxing authority (whether domestic or foreign) in connection with any Income Tax or Income Taxes (whether or not a payment is required to be made with respect to such filing).

"Minimum Net Worth" means the Net Worth of NRG Generating as set forth in the June 30, 1996 audited financial statements of NRG Generating.

"Net Worth" means, as to any Person, all items which in conformity with GAAP would be included under stockholders' equity on a balance sheet of such Person.

"Tax" or "Taxes" means all forms of taxation, whenever created or imposed, and whether of the United States or elsewhere, and whether imposed by a local, municipal, governmental, state, foreign, federal or other body, together with any related interest, penalties and additions to any such tax, or additional amounts imposed by any taxing authority (domestic or foreign) upon NRG Generating and any of its Subsidiaries.


(a) Filing of Income Tax Returns. Until all Obligations have been indefeasibly paid in full, NRG Generating shall prepare and timely file or shall cause to be prepared and timely filed all appropriate Federal, state, local or foreign Income Tax Returns that are required to be filed which include either of the Borrowers. Each Borrower hereby irrevocably designates NRG Generating as its agent to take any and all actions necessary or incidental to the preparation and filing of such Income Tax Returns and agrees to cooperate in good faith with NRG Generating in the preparation of such Income Tax Returns. Neither Borrower shall file any amended Income Tax Return for which such Borrower is not obligated to prepare or cause to be prepared the original of such Income Tax Return pursuant to this Section 2(a) without the prior written consent of NRG Generating.


(b) Payment of Income Taxes. NRG Generating shall timely pay or cause to be paid, without contribution from either of the Borrowers (except out of amounts distributed or distributable pursuant to Section 5.1(c)(x) of the Credit Agreement), all Income Taxes (including estimated Income Taxes) with respect to Income Tax Returns which include either of the Borrowers and which NRG Generating is required to prepare and file or cause to be prepared and filed pursuant to this Agreement.

(c) Refunds. NRG Generating shall be entitled to retain or receive immediate payment from the Borrowers of any refund or credit arising with respect to either of the Borrowers (including, without limitation, refunds and credits arising by reason of amended Income Tax Returns or otherwise) relating to Income Taxes paid by NRG Generating pursuant to this Agreement.

(d) Tax Cooperation. Each of the Borrowers agrees to provide NRG Generating with such cooperation, information and records as NRG Generating shall reasonably request in connection with the preparation or filing of any Income Tax Return or claim for refund or in conducting any audit or other proceeding in respect of Taxes. Such cooperation and information shall include, without limitation, making such officers, directors, employees and agents available as may reasonably be requested by NRG Generating in connection with the preparation of any Income Tax Return or any Income Tax audit or other Income Tax proceeding that relates to such Borrower, promptly forwarding copies of appropriate notices and forms or
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