Exhibit 10.1

 

Execution Version

 

AMENDED AND RESTATED SETTLEMENT
AGREEMENT

 

This amended and restated settlement agreement (this “Settlement Agreement”),
dated as of May 30, 2012, is entered into by and among (i) Dynegy Inc.
(“Dynegy”), (ii) Dynegy Gas Investments, LLC (“DGIN”), (iii) Dynegy Coal Holdco,
LLC (“Dynegy Coal Holdco”), (iv) Dynegy Holdings, LLC (“DH”), (v) Dynegy
Danskammer, L.L.C. (“Dynegy Danskammer”), (vi) Dynegy Roseton, L.L.C. (“Dynegy
Roseton”), (vii) Dynegy Northeast Generation, Inc. (“DNE”), (viii) Hudson Power,
L.L.C. (“Hudson”; each of DH, Dynegy Danskammer, Dynegy Roseton, DNE and Hudson
are debtors and debtors in possession in the jointly administered chapter 11
cases styled as In re Dynegy Holdings, LLC et al., Case No. 11-38111 (CGM), and
are collectively referred to herein as the “Debtors”), (ix) the undersigned,
beneficial owners (or advisors, nominees or investment managers for the
beneficial owner(s)) of a portion of the outstanding Senior Notes issued by DH,
solely in their capacities as holders of such Senior Notes and not in any other
capacity (the “Consenting Senior Noteholders”), (x) Resources Capital Management
Corporation (“RCM”), Resources Capital Asset Recovery, L.L.C., Series DD and
Series DR, Roseton OL LLC, Danskammer OL LLC, Roseton OP LLC, and Danskammer OP
LLC (collectively, the “PSEG Entities”), (xi)  U.S. Bank National Association,
not in its individual capacity but solely as successor indenture trustee under
the Lease Indentures and successor pass through trustee under the Pass Through
Trust Agreement, as directed by a majority of, and on behalf of all, the Lease
Certificate Holders (the “Lease Trustee”), (xii) Wells Fargo Bank, N.A. (“Wells
Fargo”), as Subordinated Notes Indenture Trustee (solely with respect to
Sections II.e.(i)(6), II.e.(ii)(x), II.e.(iv), II.l.(iii) and III.n herein);
(xiii) DO S1 Limited (“CQS”), (xiv) Loomis, Sayles & Company, L.P., solely in
its capacity as a holder of NGC Trust Capital Income Securities (defined below)
(“Loomis”) and (xv) Claren Road Credit Master Fund Ltd. (“Claren Road”,
collectively with CQS, Loomis and any other beneficial holder of NGC Trust
Capital Income Securities (defined below) who becomes a party hereto after the
date hereof, the “Consenting Sub Debt Holders” and, together with the Consenting
Senior Noteholders, the PSEG Entities, and the Lease Trustee, the “Settling
Claimants”) (each of the entities in (i)-(xv) above, a “Party” and collectively,
the “Parties”).

 

RECITALS

 

WHEREAS, on September 1, 2011, Dynegy entered into a Membership Interest
Purchase Agreement with its indirect subsidiary DGIN whereby DGIN sold 100% of
the outstanding membership interests of its direct wholly-owned subsidiary
Dynegy Coal Holdco to Dynegy (the “Membership Interest Purchase Agreement”), in
exchange for an undertaking to make certain specified payments over time;

 

WHEREAS, DGIN subsequently assigned its right to receive payments under the
Undertaking Agreement to DH in exchange for a promissory note (the “DH Note”) in
the amount of $1.25 billion that matures in 2027 and bears annual interest at a
rate of 4.24%, payable upon maturity, and as a condition to Dynegy’s consent to
such assignment, the undertaking was

 

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amended and restated to be, among other things, an obligation of Dynegy to DH
(as amended and restated, the “Undertaking Agreement”);

 

WHEREAS, on September 21, 2011, an ad hoc committee of holders of the Senior
Notes commenced an action in New York State Supreme Court against, among others,
DH, Dynegy and certain of their non-Debtor affiliates (Avenue Investments, L.P.,
et al. v. Dynegy Inc., et al., Index No. 652599/2011 (N.Y. County), the
“Noteholder Litigation”);

 

WHEREAS, on September 27, 2011, the Lease Trustee, at the direction of certain
Lease Certificate Holders, commenced an action in New York State Supreme Court
against, among others, DH, Dynegy, and certain of their non-Debtor affiliates
(The Successor Lease Indenture Trustee, et al. v. Dynegy Inc., et al., Index No.
652642/2011 (N.Y. County), the “Lease Indenture Trustee Litigation”);

 

WHEREAS, on October 31, 2011, defendants in the Noteholder Litigation and Lease
Indenture Trustee Litigation filed motions to dismiss such proceedings,
alleging, among other things, that the plaintiffs lacked standing, that the
court lacked personal jurisdiction over some of the defendants, and that the
complaints failed to state a claim upon which relief could be granted;

 

WHEREAS, on November 4, 2011, certain of the PSEG Entities commenced an action
in New York State Supreme Court against, among others, DH, Dynegy and certain of
their non-Debtor affiliates (Resources Capital Management Corp., et al. v.
Dynegy Inc., et al., Index No. 653067/11 (N.Y. County), the “PSEG Litigation”
and together with the Noteholder Litigation and Lease Indenture Trustee
Litigation, the “Prepetition Litigation”);

 

WHEREAS, plaintiffs in the Prepetition Litigation challenged the transfer by
DGIN of the outstanding membership interests of Dynegy Coal Holdco to Dynegy,
alleging, among other things, that the challenged transfer constituted a
fraudulent conveyance under New York law, a breach of contract, or, in the
alternative, an unlawful dividend or distribution, and they also asserted causes
of action for breach of fiduciary duties against the directors of Dynegy and the
managers of DH and DGIN, and sought to pierce the corporate veil between Dynegy,
DH and DGIN;

 

WHEREAS, on November 7, 2011 (the “Petition Date”), each of the Debtors filed a
voluntary petition for relief under chapter 11 of title 11 of the United States
Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the
Southern District of New York, Poughkeepsie Division (the “Bankruptcy Court”),
and each thereby commenced a chapter 11 case, which are jointly administered
under Case No. 11-38111 (CGM) (the “Chapter 11 Cases”);

 

WHEREAS, also on the Petition Date, the Debtors filed a motion with the
Bankruptcy Court seeking entry of an order authorizing the Debtors to reject the
Facility Leases and certain of the other Lease Documents, nunc pro tunc to the
Petition Date (the “Rejection Motion”) [Dkt. No. 5];

 

WHEREAS, following the Petition Date, the parties thereto agreed to stay the
Prepetition Litigation pending the Chapter 11 Cases;

 

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WHEREAS, on November 11, 2011, the Lease Trustee commenced an adversary
proceeding against Dynegy Danskammer, Dynegy Roseton and DH (Adversary
Proceeding No. 11-09083, the “Adversary Proceeding”) seeking, among other
things, a declaratory judgment that the claims asserted by the Lease Trustee
against those Debtors were not subject to a cap on lease rejection damages
pursuant to section 502(b)(6) of the Bankruptcy Code;

 

WHEREAS, on November 11, 2011, the Lease Trustee filed a motion with the
Bankruptcy Court seeking the appointment of an examiner pursuant to section
1104(c) of the Bankruptcy Code [Dkt. No. 48];

 

WHEREAS, on November 18, 2011, certain of the PSEG Entities filed a motion for
entry of an order dismissing the Chapter 11 Cases (the “Motion to Dismiss”)
[Dkt. No. 92];

 

WHEREAS, on December 13, 2011, the Debtors, Dynegy and the PSEG Entities entered
into a binding term sheet (the “PSEG Settlement”) to settle and resolve certain
issues and disputes in lieu of further litigation regarding the Facility Leases,
the Rejection Motion, the Motion to Dismiss, the PSEG Litigation, and the
parties’ rights and claims arising under the Facility Leases, the Lease
Guarantees and the other Lease Documents, including, without limitation, their
rights and claims under those certain Tax Indemnity Agreements, dated in each
case as of May 8, 2001, between Dynegy Danskammer and certain of the PSEG
Entities and between Dynegy Roseton and certain of the PSEG Entities;

 

WHEREAS, on December 20, 2011 (as amended on December 28, 2011), the Bankruptcy
Court entered a stipulated order (the “PSEG Stipulated Order”) [Dkt. Nos. 227 &
273], among other things, (a) approving the rejection of certain of the Lease
Documents, subject to, among other things, continued litigation over, and later
determination of, the effective date of the rejection and the amount of the
damage claim arising from the rejection, and preservation of all parties’ rights
with respect to the claims and contentions raised in the Adversary Proceeding,
and (b) subject to the reservation of certain rights by the Lease Trustee with
respect to the PSEG Settlement, approving the Debtors’ entry into the PSEG
Settlement as set forth in that certain term sheet attached as Exhibit A to the
PSEG Stipulated Order, including the allowance of a $110 million unsecured claim
against DH in favor of RCM (the “TIA Claim”) and a $7.5 million cash payment
paid by Dynegy to RCM within five days of the entry of the PSEG Stipulated
Order;

 

WHEREAS, (a) on December 29, 2011, the Bankruptcy Court entered an order (the
“Examiner Order”) [Dkt. No. 276] for the appointment of an examiner (the
“Examiner”), (b) on January 11, 2012, the United States Trustee for Region 2
appointed Susheel Kirpalani to serve as Examiner [Dkt. No. 308], and (c) on
January 12, the Bankruptcy Court entered an order approving the appointment of
Mr. Kirpalani as Examiner;

 

WHEREAS, on January 4, 2012, the PSEG Entities, pursuant to the PSEG Settlement
as approved by the PSEG Stipulated Order, withdrew their Motion to Dismiss;

 

WHEREAS, on January 25, 2012, DH, Dynegy Roseton and Dynegy Danskammer filed in
the Adversary Proceeding an answer and counterclaims against the Lease Trustee;

 

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WHEREAS, on March 9, 2012, the Examiner issued his report setting forth his
assessment of various potential claims and causes of action arising from the
Prepetition Restructurings involving the Debtors and certain of their
affiliates, including the September 1, 2011 transfer of Dynegy Coal Holdco (the
“Examiner Report”);

 

WHEREAS, on March 12, 2012, the Bankruptcy Court ordered the Debtors to
participate in mediation with certain of their creditor constituencies and other
parties in interest under the auspices of the Examiner, in his capacity as
mediator under the Examiner Order;

 

WHEREAS, the Parties to the May 1 Settlement Agreement (as defined below), as
well as the Creditors’ Committee and certain other parties, engaged in numerous
negotiation sessions mediated by the Examiner;

 

WHEREAS, on March 28, 2012, CQS filed the CQS Trustee Motion;

 

WHEREAS, on March 28, 2012 and April 18, 2012, Claren Road filed the Claren Road
Trustee Motions;

 

WHEREAS, on May 1, 2012, Dynegy, DGIN, Dynegy Coal Holdco, the Debtors, the
Consenting Senior Noteholders, the PSEG Entities, and the Lease Trustee executed
that certain Settlement Agreement dated as of May 1, 2012 (the “May 1 Settlement
Agreement”) and filed the Settlement Approval Motion seeking approval thereof
[Dkt No. 640] (the “Settlement Approval Motion”);

 

WHEREAS, subsequent to the execution of the May 1 Settlement Agreement and the
filing of the Settlement Approval Motion, certain of the Parties to the May 1
Settlement Agreement, as well as the Creditors’ Committee, engaged in additional
negotiation sessions with the Consenting Sub Debt Holders and the Subordinated
Notes Indenture Trustee mediated by the Examiner;

 

WHEREAS, on May 17, 2012, Claren Road filed the Claren Road Notice of Appeal;

 

WHEREAS, on May 22, 2012, Claren Road, CQS and the Subordinated Notes Indenture
Trustee each filed an objection to the Settlement Approval Motion;

 

WHEREAS, if the Prepetition Litigation, the Adversary Proceeding and/or
litigation regarding the Settlement Approval Motion and objections thereto, the
Trustee Motions and the Claren Road Notice of Appeal were to proceed (and
additional potential litigation between and among the Parties is commenced),
there is uncertainty about the outcome for all Parties and the Parties may incur
significant costs and suffer significant delay in resolving their claims through
the Prepetition Litigation, the Adversary Proceeding and in resolving the
Settlement Approval Motion and objections thereto, the Trustee Motions and the
Claren Road Notice of Appeal (and additional litigation that may be commenced
between and among the Parties);

 

WHEREAS, the Parties seek to avoid the risks, inordinate cost and delay of
litigating the Prepetition Litigation, the Trustee Motions, the Adversary
Proceeding, the Settlement Approval

 

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Motion and the Claren Road Notice of Appeal (and additional litigation that may
be commenced between and among the Parties);

 

WHEREAS, as a result of extensive arm’s-length negotiations through the
mediation process, the Parties have resolved to enter into this Settlement
Agreement to settle all disputes, claims and causes of action (i) between DH, on
the one hand, and Dynegy, on the other hand, including, among other things, any
arising with respect to the transfer of Dynegy Coal Holdco to Dynegy, as well as
any and all other potential claims and causes of action described in the
Examiner Report, and (ii) between and among the Parties, relating, among other
things, to the facts alleged and the claims and counterclaims asserted, in the
Prepetition Litigation, the Adversary Proceeding, the Settlement Approval Motion
and objections thereto, the Trustee Motions and the Claren Road Notice of Appeal
and in any additional litigation that could be commenced between and among the
Parties with respect to the subject matter thereof;

 

WHEREAS, the Parties wish to pursue a sale of the Roseton and Danskammer
Facilities (as defined below) in their entireties to maximize the value of such
assets; and

 

WHEREAS, simultaneous with the execution of this Settlement Agreement, the
Parties to this Settlement Agreement (other than the Lease Trustee and the
Subordinated Notes Indenture Trustee) and the Consenting Lease Certificate
Holders also entered into: (i) the Amended and Restated Plan Support Agreement
attached hereto as Annex A (the “Plan Support Agreement”), pursuant to which
such Parties agree, subject to the terms and conditions of the Plan Support
Agreement to, as applicable, pursue or support a plan of reorganization
containing the terms and conditions set forth in the Plan Support Agreement and
as otherwise agreed upon by the Parties; and (ii) the Dynegy Entity Joinder (as
defined below), pursuant to which certain subsidiaries of Dynegy, which are not
Parties to this Settlement Agreement, agree to join in and be bound by, and
entitled to the benefits of, Sections II.h, II.i., II.j. and II.k. of this
Settlement Agreement;

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the recitals stated above, and the premises
and mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:

 

I.                                        Definitions.  As used in this
Settlement Agreement and for purposes of this Settlement Agreement only, the
following terms have the following meanings; provided, that other capitalized
terms used but not otherwise defined in this Settlement Agreement shall have the
meanings ascribed to such terms in the Existing Plan:

 

“Ad Hoc Senior Noteholder Committee” means the Consenting Senior Noteholders
that are members of an ad hoc group of holders of Senior Notes.

 

“Adversary Proceeding” has the meaning ascribed to it in the Recitals.

 

“Approval Order” means an order of the Bankruptcy Court approving this
Settlement Agreement and the compromise and settlement memorialized herein among
the Parties, the

 

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proposed form of which is attached as Annex D hereto, and which shall, among
other things, order the following:  “Notwithstanding anything in this Order or
the Settlement Agreement to the contrary, and in light of the integrated nature
of the settlements and compromises embodied in this Order and the Settlement
Agreement, in the event that (i) a court of competent jurisdiction enters a
final order ruling that this Order or any of the transactions contemplated
hereby or in the Settlement Agreement are void, invalid, illegal or
unenforceable in any material respect, (ii) any of the transactions contemplated
by this Order or the Settlement Agreement are reversed, vacated, overturned,
voided or unwound in any material respect, or (iii) this Order is reversed,
vacated, overturned or amended in any material respect, then in each case, the
entirety of this Order (other than this paragraph 23) and the Settlement
Agreement (other than Section III.y. thereof) shall be void ab initio and of no
force and effect and, during any subsequent proceeding, the Settlement Parties
and the Creditors’ Committee shall not assert claim preclusion, issue
preclusion, estoppel or any similar defense in respect of rights and claims of
the Settlement Parties that were the subject of this Order and the Settlement
Agreement prior to this Order and the Settlement Agreement being of no force or
effect.”

 

“Bankruptcy Code” has the meaning ascribed to it in the Recitals.

 

“Bankruptcy Court” has the meaning ascribed to it in the Recitals.

 

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure.

 

“Business Day” means any day other than Saturday, Sunday and any day that is a
legal holiday or a day on which banking institutions in New York, New York are
required or authorized by law or governmental action to close.

 

“Chapter 11 Cases” has the meaning ascribed to it in the Recitals.

 

“Claim” or “Claims”, as applicable, has the meaning set forth in section 101(5)
of the Bankruptcy Code (and, for the avoidance of doubt, shall not include any
Equity Interests).

 

“Claren Road” has the meaning ascribed to it in the Preamble.

 

“Claren Road Notice of Appeal” means the Notice of Appeal of Order Denying
Public Access to Judicial Documents filed on May 17, 2012 [Dkt No. 699].

 

“Claren Road Settlement Objection” means the Objection of Claren Road Asset
Management, LLC to Debtors’ Motion for Approval of Settlement Between the
Debtors and the Settlement Parties Pursuant to Rule 9019 of the Federal Rules of
Bankruptcy Procedure filed on May 22, 2012 [Dkt No. 714].

 

“Claren Road Trustee Motions” means (i) the Joinder of Claren Road Asset
Management, LLC in Support of Motion of the United States Trustee for an Order
Directing the Appointment of a Chapter 11 Trustee Pursuant to Section 1104 of
the Bankruptcy Code filed on March 28, 2012 [Dkt No. 554]; and (ii) the Motion
of Claren Road Asset Management, LLC for an Order Directing the Appointment of a
Chapter 11 Trustee Pursuant to Section 1104 of the Bankruptcy Code filed on
April 18, 2012 [Dkt No. 590].

 

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“CoalCo Credit Facility” has the meaning ascribed to it in the definition of
“Prepetition Restructurings.”

 

“Combination” has the meaning ascribed to it in the Plan Support Agreement.

 

“Conforming Plan” has the meaning ascribed to it in the Plan Support Agreement.

 

“Consenting Lease Certificate Holders” means the beneficial owners (or advisors,
nominees or investment managers for the beneficial owner(s)) of a portion of the
outstanding Lease Certificates that have executed the Plan Support Agreement.

 

“Consenting Senior Noteholders” has the meaning ascribed to it in the Preamble.

 

“Consenting Sub Debt Holders” has the meaning ascribed to it in the Preamble.

 

“CQS” has the meaning ascribed to it in the Preamble.

 

“CQS Settlement Objection” means DO S1 Limited’s Objection to Debtors’ Motion
for Approval of Global Settlement Pursuant to Rule 9019 of the Federal Rules of
Bankruptcy Procedure filed on May 22, 2012 [Dkt No. 715].

 

“CQS Trustee Motion” means DO S1 Limited’s Joinder to Motion of United States
Trustee for Order Directing Appointment of a Chapter 11 Trustee Pursuant to
Section 1104 of the Bankruptcy Code filed on March 28, 2012 [Dkt No. 556].

 

“Creditors’ Committee” means the Official Committee of Creditors Holding
Unsecured Claims appointed in the Chapter 11 Cases.

 

“Danskammer/Roseton OL Independent Manager” has the meaning ascribed to it in
Section III.z.

 

“Danskammer Facility Lease” means the Facility Lease Agreement dated as of May
8, 2001, between Danskammer OL, LLC, as Owner Lessor, and Dynegy Danskammer, as
Facility Lessee, pertaining to Units 3 and 4 of the Danskammer Power Station in
Newburgh, New York.

 

“Danskammer Lease Documents” means (a) the Participation Agreement, dated as of
May 1, 2001 (the “Danskammer Participation Agreement”), among Dynegy Danskammer,
Danskammer OL LLC, Wilmington Trust Company, not in its individual capacity
except as expressly provided therein but solely as Lessor Manager, Danskammer OP
LLC, The Chase Manhattan Bank, not in its individual capacity but solely as
Lease Indenture Trustee, and The Chase Manhattan Bank, not in its individual
capacity but solely as Pass Through Trustee, (b) the Danskammer Facility Lease,
and (c) the other “Operative Documents” as defined in Appendix A to the
Danskammer Participation Agreement.

 

“Danskammer Participation Agreement” has the meaning ascribed to it in the
definition of “Danskammer Lease Documents.”

 

“DCH Membership Interests” has the meaning ascribed to it in Section II.a.

 

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“Debtors” has the meaning ascribed to it in the Preamble.

 

“DGIN” has the meaning ascribed to it in the Preamble.

 

“DH” has the meaning ascribed to it in the Preamble.

 

“DH Note” has the meaning ascribed to it in the Recitals.

 

“DH Released Parties” has the meaning ascribed to it in Section II.i.

 

“DH Releasing Parties” has the meaning ascribed to it in Section II.h.

 

“DIP Credit Facility” has the meaning ascribed to it in Section II.d.

 

“Disclosure Certificate” has the meaning ascribed to it in Section III.c.

 

“DNE” has the meaning ascribed to it in the Preamble.

 

“Dynegy” has the meaning ascribed to it in the Preamble.

 

“Dynegy Administrative Claim” has the meaning ascribed to it in Section II.a.

 

“Dynegy and Debtor Releasing Parties” has the meaning ascribed to it in Section
II.j.

 

“Dynegy CoalCo” has the meaning ascribed to it in the definition of “Prepetition
Restructurings.”

 

“Dynegy Coal Holdco” has the meaning ascribed to it in the Preamble.

 

“Dynegy Danskammer” has the meaning ascribed to it in the Preamble.

 

“Dynegy Entity Joinder” means the Joinder Agreement, in the form attached hereto
as Annex B.

 

“Dynegy GasCo” has the meaning ascribed to it in the definition of “Prepetition
Restructurings.”

 

“Dynegy Released Parties” has the meaning ascribed to it in Section II.h.

 

“Dynegy Releasing Parties” has the meaning ascribed to it in Section II.k.

 

“Dynegy Roseton” has the meaning ascribed to it in the Preamble.

 

“Equity Interests” means all shares of capital stock, beneficial, partnership or
membership interests, participations or other equivalents of a corporation,
partnership, limited liability company or equivalent entity, whether voting or
non-voting, and including all warrants, options, securities or other instruments
convertible into or exchangeable for any of the foregoing, or other rights to
purchase any of the foregoing.

 

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“Examiner” has the meaning ascribed to it in the Recitals.

 

“Examiner Order” has the meaning ascribed to it in the Recitals.

 

“Examiner Report” has the meaning ascribed to it in the Recitals.

 

“Existing Plan” means the proposed Second Amended Chapter 11 Plan of
Reorganization for Dynegy Holdings, LLC Proposed by Dynegy Holdings, LLC and
Dynegy Inc., filed with the Bankruptcy Court on March 5, 2012 [Dkt. No. 473].

 

“Facilities” has the meaning ascribed to it in Section II.d.

 

“Facility Leases” means, collectively, the Danskammer Facility Lease and the
Roseton Facility Lease.

 

“FERC” has the meaning ascribed to it in Section II.d.

 

“GasCo Credit Facility” has the meaning ascribed to it in the definition of
“Prepetition Restructurings.”

 

“Guaranty Claim” has the meaning ascribed to it in Section II.d.

 

“GUC Carveout” has the meaning ascribed to in Section II.d.

 

“Hudson” has the meaning ascribed to it in the Preamble.

 

“Intercompany Receivable” means the affiliate receivable balance that has been
recorded and adjusted over time and held by DH from Dynegy, and which has
historically been classified within equity by DH, as described in Note 15 of
DH’s consolidated financial statements for the period from November 8, 2011
through December 31, 2011 included in Dynegy’s Annual Report on Form 10-K filed
with the Securities & Exchange Commission on March 8, 2012.

 

“Lease Administrative Claims” has the meaning ascribed to it in Section II.d.

 

“Lease Certificate Holders” means the holders of the Lease Certificates.

 

“Lease Certificates” means those certain pass-through trust certificates
evidencing fractional undivided interests in the pass through trust established
pursuant to the Pass Through Trust Agreement and which, among other things,
holds the outstanding notes issued by Roseton OL LLC and Danskammer OL LLC, as
owner lessors, under the Lease Indentures.

 

“Lease Documents” means the Danskammer Lease Documents and the Roseton Lease
Documents.

 

“Lease Guarantees” means, collectively, (i) that certain Guaranty, dated as of
May 1, 2001, made by DH, as Guarantor, with respect to the Danskammer Facility
Lease, and (ii) that

 

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certain Guaranty, dated as of May 1, 2001, made by DH, as Guarantor, with
respect to the Roseton Facility Lease.

 

“Lease Indenture Trustee Litigation” has the meaning ascribed to it in the
Recitals.

 

“Lease Indentures” means the Indenture of Trust, Mortgage, Assignment of Leases
and Rents and Security Agreement related to Roseton Units 1 and 2, dated as of
May 8, 2001, and the Indenture of Trust, Mortgage, Assignment of Leases and
Rents and Security Agreement related to Danskammer Units 3 and 4, dated as of
May 8, 2001.

 

“Lease Trustee” has the meaning ascribed to it in the Preamble.

 

“Lessor Claims” has the meaning ascribed to it in Section II.d.

 

“Lessor Recovery Cap” has the meaning ascribed to it in Section II.d.

 

“Loomis” has the meaning ascribed to it in the Preamble.

 

“Majority of the Consenting Senior Noteholders” means the Consenting Senior
Noteholders (i) holding a majority of the aggregate principal amount of Senior
Notes held by all Consenting Senior Noteholders and (ii) constituting not less
than two of the Consenting Senior Noteholders.

 

“Majority of the Consenting Sub Debt Holders” means the Consenting Sub Debt
Holders (i) holding a majority of the aggregate principal amount of Subordinated
Notes Claims held by all Consenting Sub Debt Holders and (ii) constituting at
least two of the Consenting Sub Debt Holders.

 

“May 1 Settlement Agreement” has the meaning ascribed to it in the Recitals.

 

“Membership Interest Purchase Agreement” has the meaning ascribed to it in the
Recitals.

 

“Motion to Dismiss” has the meaning ascribed to it in the Recitals.

 

“NGC Trust” means the NGC Corporation Capital Trust I created under the Delaware
Business Trust Act pursuant to the NGC Trust Declaration for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the trust and investing the proceeds thereof in the
Subordinated Notes, and engaging in only those other activities necessary,
advisable or incidental thereto.

 

“NGC Trust Capital Income Securities” means those certain Series B 8.316%
Subordinated Capital Income Securities due 2027 in the initial aggregate
principal amount of $200,000,000, issued by the NGC Trust pursuant to the NGC
Trust Declaration.

 

“NGC Trust Capital Income Securities Guarantee” means that certain Capital
Securities Guarantee Agreement between DH (f/k/a NGC Corporation) and First
National Bank of Chicago, as Capital Securities Guarantee Trustee (as amended,
restated and supplemented

 

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through the Petition Date) for the benefit of the holders of the NGC Trust
Capital Income Securities.

 

“NGC Trust Common Securities” means those certain 8.316% Common Securities due
2027 in the initial principal amount of $6,200,000, issued by the NGC Trust
pursuant to the NGC Trust Declaration.

 

“NGC Trust Declaration” means the Declaration of Trust dated as of May 20, 1997,
which created the NGC Trust (as such Declaration of Trust was amended and
restated on May 28, 1997, and as thereafter amended, restated and supplemented
through the Petition Date).

 

“Noteholder Litigation” has the meaning ascribed to it in the Recitals.

 

“Noteholder RSA” means that certain Restructuring Support Agreement, dated
November 7, 2011, among Dynegy, DH and the Consenting Noteholders (as defined
therein), as amended from time to time thereto, and as amended and restated by
that certain Amended and Restated Restructuring Support Agreement, dated
December 26, 2011, among Dynegy, DH and the Consenting Noteholders (as defined
therein).

 

“NYPSC” has the meaning ascribed to in Section II.d.

 

“Party” or “Parties” have the meanings ascribed to them in the Preamble.

 

“Pass Through Trust Agreement” means the Roseton-Danskammer 2001-Series B Pass
Through Trust Agreement, dated as of May 1, 2001.

 

“Petition Date” has the meaning ascribed to it in the Recitals.

 

“Plan Effective Date” means the date on which all conditions to consummation of
the Conforming Plan have been satisfied (or waived, to the extent such
conditions can be waived pursuant to the terms of the Conforming Plan) and the
Conforming Plan becomes effective.

 

“Plan Support Agreement” has the meaning ascribed to it in the Recitals.

 

“Prepetition Litigation” has the meaning ascribed to it in the Recitals.

 

“Prepetition Restructurings” means the prepetition transactions involving Dynegy
and certain of its direct and indirect subsidiaries pursuant to which, among
other things:  (a)  Dynegy and certain of its direct and indirect subsidiaries
completed an internal reorganization which eliminated their regional
organizational structure and created separate coal-fueled power generation and
gas-fueled power generation units whereby (i) substantially all of Dynegy’s
indirectly owned coal-fired power generation facilities were held by its
indirect subsidiary Dynegy Midwest Generation, LLC (“Dynegy CoalCo”), (ii)
substantially all of Dynegy’s indirectly owned natural gas-fueled power
generation facilities were held by its indirect subsidiary Dynegy Power, LLC
(“Dynegy GasCo”), and (iii) all of Dynegy’s indirect ownership interests of DNE
were held by DH (formerly, Dynegy Holdings Inc.); (b) Dynegy GasCo and its
parent Dynegy Gas Investments Holdings, LLC, each non-Debtor subsidiaries of DH,
entered into a $1.1 billion, five-year senior secured term loan facility (the
“GasCo Credit Facility”), and

 

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Dynegy CoalCo and its parent Dynegy Coal Investments Holdings, LLC, each
non-Debtor subsidiaries of DH, entered into a $600 million, five-year senior
secured term loan facility (the “CoalCo Credit Facility”), and in each case
applied the proceeds from such credit agreements as permitted by such
agreements, including to repay the outstanding indebtedness under DH’s existing
senior secured credit agreement; and (c) Dynegy entered into the Membership
Interest Purchase Agreement, in exchange for an undertaking by Dynegy to make
certain specified payments to DGIN over time, DGIN subsequently assigned its
right to receive payments under such undertaking to DH in exchange for the DH
Note, and Dynegy and DH entered into the Undertaking Agreement.

 

“PSEG Entities” has the meaning ascribed to it in the Preamble.

 

“PSEG Litigation” has the meaning ascribed to it in the Recitals.

 

“PSEG Settlement” has the meaning ascribed to it in the Recitals.

 

“PSEG Stipulated Order” has the meaning ascribed to it in the Recitals.

 

“RCM” has the meaning ascribed to it in the Preamble.

 

“Rejection Motion” has the meaning ascribed to it in the Recitals.

 

“R&D Claims” has the meaning ascribed to it in Section II.d.

 

“Roseton Facility Lease” means the Facility Lease Agreement, dated as of May 8,
2001, between Roseton OL LLC, as Owner Lessor, and Dynegy Roseton, as Facility
Lessee, pertaining to Units 1 and 2 of the Roseton Power Station in Newburgh,
New York.

 

“Roseton Lease Documents” means, collectively, (a) the Participation Agreement,
dated as of May 1, 2001 (the “Roseton Participation Agreement”), among Dynegy
Roseton, Roseton OL LLC, Wilmington Trust Company, not in its individual
capacity except as expressly provided therein but solely as Lessor Manager,
Roseton OP LLC, The Chase Manhattan Bank, not in its individual capacity but
solely as Lease Indenture Trustee and The Chase Manhattan Bank, not in its
individual capacity but solely as Pass Through Trustee, (b) the Roseton Facility
Lease, and (c) the other “Operative Documents” as defined in Appendix A to the
Roseton Participation Agreement.

 

“Roseton Participation Agreement” has the meaning ascribed to it in the
definition of “Roseton Lease Documents.”

 

“Senior Notes” means the 8.750% Senior Notes due 2012, the 7.50% Senior
Unsecured Notes due 2015, the 8.375% Senior Unsecured Notes due 2016, the 7.125%
Senior Debentures due 2018, the 7.75% Senior Unsecured Notes due 2019, and the
7.625% Senior Debentures due 2026, in each case issued by DH under the Senior
Notes Indenture.

 

“Senior Notes Indenture” means that certain Indenture, dated as of September 26,
1996, restated as of March 23, 1998, and amended and restated as of March 14,
2001, between DH

 

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(f/k/a Dynegy Holdings Inc.) and Bank One Trust Company, National Association,
as Trustee (as amended, restated and supplemented through the Petition Date).

 

“Senior Notes Indenture Trustee” means Wilmington Trust, National Association,
as indenture trustee under the Senior Notes Indenture.

 

“Settlement Agreement” has the meaning ascribed to it in the Preamble.

 

“Settlement Approval Motion” has the meaning ascribed to it in the Recitals.

 

“Settlement Effective Date” has the meaning ascribed to it in Section III.a.

 

“Settling Claimant Fee Recipients” has the meaning ascribed to it in Section
II.e.

 

“Settling Claimant Released Parties” has the meaning ascribed to it in Section
II.j.

 

“Settling Claimant Releasing Parties” has the meaning ascribed to it in Section
II.i.

 

“Settling Claimants” has the meaning ascribed to it in the Preamble.

 

“Subordinated Notes” means those certain Series B 8.316% Subordinated Deferrable
Interest Debentures due 2027 in the initial aggregate principal amount of
$206,200,000, issued by DH under the Subordinated Notes Indenture.

 

“Subordinated Notes Claims” means all Claims against DH (and the Surviving
Entity, as applicable) arising under or based upon the Subordinated Notes
Indenture, Subordinated Notes, NGC Trust Capital Income Securities, NGC Trust
Common Securities or NGC Trust Capital Income Securities Guarantee.

 

“Subordinated Notes Indenture” means that certain Subordinated Debenture
Indenture between DH (f/k/a NGC Corporation) and First National Bank of Chicago,
as Debenture Trustee, dated as of May 28, 1997 (as amended, restated and
supplemented through the Petition Date).

 

“Subordinated Notes Indenture Trustee” means Wells Fargo, as successor indenture
trustee under the Subordinated Notes Indenture.

 

“Surviving Entity” has the meaning ascribed to it in the Plan Support Agreement.

 

“TIA Claim” has the meaning ascribed to it in the Recitals.

 

“Trustee Motions” means the Claren Road Trustee Motion and CQS Trustee Motion.

 

“Undertaking Agreement” has the meaning ascribed to it in the Recitals.

 

“Warrant Agreement” means that certain Warrant Agreement, to be dated as of the
Plan Effective Date, governing the Warrants, which shall be in form and
substance reasonably acceptable to Dynegy, DH, the Creditors’ Committee, a
Majority of the Consenting Senior Noteholders, and the Lease Trustee.

 

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“Warrants” means the warrants to be issued pursuant to the Warrant Agreement
entitling holders thereof to purchase an aggregate of 13.5% of the fully-diluted
common shares of the Surviving Entity to be outstanding immediately following
the Plan Effective Date (subject to dilution by any options, restricted stock or
other equity interests issued as equity compensation to officers, employees or
directors of the Surviving Entity or its affiliates), for an exercise price
determined based on a net equity value of the Surviving Entity of $4 billion
(assuming that the Conforming Plan provides for a cash payment to unsecured
creditors of DH of no less than $200 million), and containing customary
anti-dilution adjustments.

 

“Wells Fargo” has the meaning ascribed to it in the Preamble.

 

“Wells Fargo Settlement Objection” means the Initial Objection of Wells Fargo
Bank, N.A., in its capacity as Subordinated Notes Indenture Trustee, to the
Debtors’ Motion for Approval of Settlement Between the Debtors and the
Settlement Parties Pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure filed on May 22, 2012 [Dkt No. 716].

 

II.                                   Settlement Terms

 

a.                                      The Transfer of the DCH Membership
Interests.

 

(i)                                     On the Settlement Effective Date, Dynegy
shall assign, transfer and deliver or cause to be assigned, transferred and
delivered (as a capital contribution or otherwise) to DH or DGIN (as determined
by Dynegy, DH, the Creditors’ Committee, a Majority of the Consenting Senior
Noteholders and the Lease Trustee) and DH or DGIN, as applicable, shall receive
from Dynegy, 100% of the outstanding Equity Interests of Dynegy Coal Holdco (the
“DCH Membership Interests”), free and clear of all liens.  Upon consummation of
the receipt and assignment, transfer and delivery of the DCH Membership
Interests as provided above, DH shall own, directly or indirectly, all of the
DCH Membership Interests.

 

(ii)                                  In full consideration for the receipt by
DH or DGIN, as applicable, of the DCH Membership Interests from Dynegy (and
Dynegy’s agreements contained in Section 2 of the Plan Support Agreement), (a)
Dynegy shall have an allowed administrative claim pursuant to sections 503(b)
and 507(a) of the Bankruptcy Code in an unliquidated amount against DH in the
Chapter 11 Cases (the “Dynegy Administrative Claim”), (b) the Prepetition
Litigation and the Adversary Proceeding shall be dismissed with prejudice
pursuant to Sections f. and g. hereof, and (c) the Parties shall issue and
receive the releases set forth in Sections II.h., i., j., and k. hereof.  The
Parties hereby agree as among themselves that the Dynegy Administrative Claim
shall be satisfied in full under the Conforming Plan by the following
consideration: (1) newly issued common shares of the Surviving Entity equal to
one percent (1%) of the fully-diluted common shares of the Surviving Entity to
be outstanding immediately following the Plan Effective Date, subject to
dilution by the Warrants and any options, restricted stock or other Equity
Interests issued as equity compensation to officers, employees or directors of
the Surviving Entity or its affiliates, (2) the Warrants (clauses (1) and (2)
together, the “Equity Consideration”) and (3) the Dynegy Released Parties being
released as described in Section 2 of the Plan Support Agreement.  If the
Conforming Plan is not confirmed,

 

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then the amount of the Dynegy Administrative Claim may, to the extent not agreed
upon by the Parties and the Creditors’ Committee, at the request of any of the
Parties be determined by an arbitration proceeding (which arbitration proceeding
shall (I) unless otherwise specified herein, be conducted pursuant to the rules
of the American Arbitration Association, (II) include the Parties and the
Creditors’ Committee, (III) be heard not later than thirty (30) days from the
date any Party requests such arbitration proceeding, and (IV) be decided not
later than forty-five (45) days from the date any Party requests such
arbitration proceeding), such amount to be equal to the value of the Equity
Consideration as if the Conforming Plan had been confirmed, but in any event,
not less than $70 million nor more than $130 million, which amount shall be
entitled to payment in cash in full on the effective date of any plan for DH,
unless otherwise agreed by Dynegy; provided that if the Conforming Plan is not
confirmed because (1) Dynegy breached the Plan Support Agreement, Dynegy
terminated its obligations under the Plan Support Agreement pursuant to Section
12(b)a. through f. thereof, or any Party terminates the Plan Support Agreement
pursuant to Section 12(b)g. or h. thereof or (2) Dynegy and DH are unable to be
combined other than as a result of any action or any inaction on the part of DH,
then (x) the determination of the amount of the Dynegy Administrative Claim
shall take into account (and shall be reduced in respect of) any value lost by
DH as a result of the failure of Dynegy and DH to be combined and (y) the Dynegy
Administrative Claim (as reduced) may be satisfied with plan securities
(including the Equity Consideration with any necessary adjustments) or other
non-cash consideration of equivalent value as determined by the Bankruptcy Court
in connection with confirmation of any DH plan.  Prior to the Combination,
Dynegy shall assign or otherwise transfer the Dynegy Administrative Claim (x) to
a trust established to hold and distribute the proceeds of the Dynegy
Administrative Claim or (y) in some other efficient manner determined by Dynegy,
in each case for the benefit of the holders of Dynegy’s common stock; provided,
that in the event such transfer of the Dynegy Administrative Claim shall occur
prior to the confirmation of the Conforming Plan, the material documentation
necessary to effect such transfer shall be subject to the prior review of, and
shall be in form and substance reasonable acceptable to DH, a Majority of the
Consenting Senior Noteholders, the Lease Trustee and the Creditors’ Committee. 
For the avoidance of doubt, nothing contained herein shall constitute Bankruptcy
Court approval of the proposed treatment of the Dynegy Administrative Claim for
purposes of section 1129 of the Bankruptcy Code, which shall remain subject to
further order of the Bankruptcy Court.

 

b.                                      Termination of the Undertaking Agreement
and the DH Note.  Upon the occurrence of the Settlement Effective Date, the
Undertaking Agreement and the DH Note shall each be terminated and there shall
be no further obligations thereunder.

 

c.                                       Transfer of Cash; Undertaking Agreement
Payments.

 

(i)                                     As of May 1, 2012, on an unconsolidated
basis, Dynegy held cash and cash equivalents in the amount of $17.2 million and,
from and after the date thereof and hereof, each of Dynegy and Dynegy Coal
Holdco agrees that it has not and will not transfer, directly or indirectly, any
cash or other assets from Dynegy Coal Holdco or its

 

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subsidiaries to Dynegy; provided, that Dynegy Coal Holdco and its subsidiaries
shall, (x) subject to any restrictions contained in the CoalCo Credit Facility,
be permitted to transfer to Dynegy, on or prior to the Settlement Effective
Date, the amounts required to (1) make any payments (or to reimburse Dynegy for
any payments under this clause (1) from Dynegy cash not upstreamed from Dynegy
Coal Holdco or its subsidiaries) required under Section II.e. of this Settlement
Agreement, (2) make payments of expenses of Dynegy related to the Chapter 11
Cases and the Conforming Plan, and (3) pay the fees and expenses of its
professionals and advisors; provided, that such professional fees and expenses
shall not exceed a reasonable estimate thereof to be provided to Dynegy (with
copies to the other Parties and the Creditors’ Committee) no later than five (5)
Business Days prior to the Settlement Effective Date and (y) continue to be
permitted to make payments to Dynegy in the ordinary course required to be made
pursuant to those certain cash management agreements, energy management
agreements, service agreements, tax sharing agreements, trademark license
agreements and other intercompany agreements entered into in connection with the
Prepetition Restructurings in August 2011, so long as such amounts are either
transferred by Dynegy to Dynegy Administrative Services Company for purposes of
facilitating payments or reimbursements under such agreements or used by Dynegy
in accordance with any such tax sharing agreement.

 

(ii)                                  Effective May 1, 2012, the Undertaking
Agreement was amended such that any payments owing from Dynegy to DH under the
Undertaking Agreement shall instead be made directly by Dynegy Coal Holdco on
behalf of Dynegy.  The Undertaking Agreement is not otherwise amended by this
Section II.c.(ii).  The Parties hereto hereby acknowledge and agree to this
amendment to the Undertaking Agreement.

 

d.                                      Lease Claims.

 

(i)                                     Allowed Claims.  The Lease Trustee, as
indenture trustee for the Lease Certificate Holders, will be granted the
following allowed claims in the Chapter 11 Cases (subject to the limitations set
forth below):  (1) a senior unsecured claim equal to $540,000,000 against DH on
account of all claims arising under or relating to the Lease Guarantees or
otherwise under any of the other Lease Documents (the “Guaranty Claim”); (2) an
unsecured claim equal to $454,717,690 against Dynegy Roseton on account of all
claims arising under or relating to the Roseton Facility and Roseton Lease
Documents; (3) an unsecured claim equal to $85,282,310 against Dynegy Danskammer
on account of all claims arising under or relating to the Danskammer facility
and Danskammer Lease Documents (the claims set forth in the preceding clauses
(2) and (3), the “R&D Claims”); (4) an administrative expense claim against
Dynegy Roseton on account of postpetition accrued rent, plus additional amounts
that may accrue thereafter pursuant to the Roseton Lease Documents (equal to
$42,176,760); and (5) an administrative expense claim against Dynegy Danskammer
on account of postpetition accrued rent, plus additional amounts that may accrue
thereafter pursuant to the Danskammer Lease Documents (equal to $3,154,179) (the
claims set forth in the preceding clauses (4) and (5), the “Lease Administrative
Claims,” and together with the claims set forth in the preceding clauses (1),
(2) and (3), the “Lessor Claims”).  Other than any claims for trustee and
professional fees in the Chapter 11 Cases as described

 

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herein or in the Plan Support Agreement, under no circumstances will the Lease
Trustee or the Lease Certificate Holders be entitled to any administrative
claims against DH, and the only claims of the Lease Trustee or the Lease
Certificate Holders to be allowed as against DH shall be the Guaranty Claim.

 

(ii)                                  Lessor Recovery Cap.  The aggregate
recovery of the Lease Trustee and the Lease Certificate Holders (exclusive of
the amounts received on account of trustee and professional fees and expenses)
on the Lessor Claims shall be capped at $571,507,840 (the “Lessor Recovery
Cap”).  If the Lease Trustee receives aggregate distributions on account of the
Lessor Claims or as proceeds from the sale of the Facilities described in
Section II.d.(iv) below in excess of the Lessor Recovery Cap, the Lease Trustee
shall immediately turn over any such excess distributions received by the Lease
Trustee to DH for distribution to the other holders of Allowed General Unsecured
Claims against DH pursuant to the Conforming Plan (or any other chapter 11 plan
which is ultimately confirmed for DH); provided, that the Lease Trustee (on
behalf of itself and the Lease Certificate Holders) shall disclaim any right to
a distribution of any amounts turned over to DH pursuant to this subsection (ii)
in its capacity as a general unsecured creditor of DH, and shall turn over any
such distribution it receives to DH for distribution to the other creditors of
DH in accordance with the Conforming Plan (or any other chapter 11 plan which is
ultimately confirmed for DH).  For the purpose of this subsection (ii), the
value of any securities distributed in respect of the Lessor Claims shall be
determined based on (a) a net equity value of Dynegy of $2,825,000,000, being
the midpoint of the equity valuation of Dynegy prepared by Lazard Frères & Co.
LLC and filed as Exhibit F to the disclosure statement for the Existing Plan
filed on March 6, 2012 [Dkt. No. 472], if such securities are issued by the
Surviving Entity; and (b) the mid-point enterprise valuation of Dynegy Roseton
or Dynegy Danskammer, as applicable, to the extent set forth in any approved
disclosure statement and/or confirmed plan of reorganization or liquidation for
such entities, if such securities are issued by Dynegy Danskammer or Dynegy
Roseton.

 

(iii)                               Sale of Roseton and Danskammer Facilities. 
The Debtors, with the cooperation of the PSEG Entities (which cooperation shall
include, without limitation, taking any and all actions necessary to effect a
transfer of title in connection with any sale), shall use their commercially
reasonable efforts to sell the Roseton and Danskammer power generation
facilities (including all of the power generation units and other structures and
equipment, the related land and all other assets related to the operation
thereof) (all such assets together, the “Facilities”), including all of the
Debtors’ and the PSEG Entities’ interests in the Facilities, as soon as
reasonably practicable; provided, that neither the Debtors nor the PSEG Entities
shall execute a binding sale agreement or related ancillary agreements with
respect to the Facilities (or any portion thereof) without the prior written
consent of the Lease Trustee and the Creditors’ Committee (if in existence) and
without prior consultation with the Consenting Senior Noteholders, which consent
and consultation shall not be unreasonably withheld, delayed, or conditioned. 
The terms of any sale process shall be mutually agreed upon among the Debtors,
the Creditors’ Committee (if in existence), RCM and the Lease

 

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Trustee, shall be contingent on receipt of all required regulatory approvals,
and shall include the following:

 

1.                                      in any sale of the PSEG Entities’
interests in the Roseton Facility together with the Debtors’ interests in such
Facility, the consideration to be attributed to the PSEG Entities’ interests
shall equal the product of the percentage of PSEG Entities’ interests in such
Facility (based on the value of the PSEG Entities’ interests in such Facility)
and the total consideration for such Facility; provided, that the percentages of
the PSEG Entities’ and the Debtors’ respective interests in such Facility shall
be determined by and among the Debtors, the PSEG Entities, the Creditors’
Committee and the Lease Trustee, in consultation with the Consenting Senior
Noteholders, based on the values of the Debtors’ and the PSEG Entities’
respective interests in such Facility, and in the event of any dispute, the
Bankruptcy Court shall have jurisdiction to resolve such dispute;

 

2.                                      in any sale of the PSEG Entities’
interests in the Danskammer Facility together with the Debtors’ interests in
such Facility, the consideration to be attributed to the PSEG Entities’
interests shall equal the product of the percentage of PSEG Entities’ interests
in such Facility (based on the value of the PSEG Entities’ interests in such
Facility) and the total consideration for such Facility; provided, that the
percentages of the PSEG Entities’ and the Debtors’ respective interests in such
Facility shall be determined by and among the Debtors, the PSEG Entities, the
Creditors’ Committee and the Lease Trustee, in consultation with the Consenting
Senior Noteholders, based on the values of the Debtors’ and the PSEG Entities’
respective interests in such Facility, and in the event of any dispute, the
Bankruptcy Court shall have jurisdiction to resolve such dispute; and

 

3.                                      in any sale of the Roseton facility
together with the Danskammer Facility, the portion of consideration to be
attributed to the Roseton Facility and the portion of consideration to be
attributed to the Danskammer Facility, with the consideration attributable to
the PSEG Entities for each such Facility to be determined as set forth in
clauses 1 and 2 immediately above, and with the Bankruptcy Court having
jurisdiction to resolve any allocation dispute.

 

The Debtors, the Lease Trustee and the PSEG Entities agree to cooperate with one
another with respect to obtaining all necessary regulatory approvals, including,
without limitation, from the Federal Energy Regulatory Commission (“FERC”) and
the New York Public Service Commission (“NYPSC”), for the transfer of ownership
and operation of the Facilities in connection with any sale of the Facilities,
including the making of joint or coordinated filings with FERC, the NYPSC, or
any other regulatory body so as to ensure that all necessary regulatory
approvals are obtained on a timely basis.

 

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For the avoidance of doubt, no other transactions and no actions, obligations or
rights of any of the Parties under this Agreement (including, without
limitation, in respect of the transfer of the DCH Membership Interests, the
termination of the Undertaking Agreement and DH Note, the dismissal of the
Prepetition Litigation and the Adversary Proceeding, and the releases set forth
in Sections II.h., II.i., II.j. and II.k. hereof) are or shall be conditioned
upon the consummation of the proposed sale of the Facilities pursuant to this
Section II.d.(iii).

 

(iv)                              Distribution of Proceeds from a Sale of the
Facilities.  Any proceeds from a sale of any Facilities (or portion thereof)
shall be distributed as follows:

 

1.                                      First, to the Debtors, to pay any and
all reasonable and documented out-of-pocket fees and expenses incurred by the
Debtors in connection with such sale; and

 

2.                                      Second, (a) that portion of the
remaining proceeds attributable to the Debtors’ interests in the sold property
to those Debtors holding such interests for distribution to their creditors
(including, without limitation, to DH to repay any and all outstanding amounts
owed to DH by Dynegy Danskammer and Dynegy Roseton pursuant to that certain
Intercompany Revolving Loan Agreement by and among the borrower Debtors party
thereto and DH, dated as of November 15, 2011, as amended (the “DIP Credit
Facility”)); provided, that all such proceeds to be distributed to the Lease
Trustee on account of the Lease Administrative Claims and/or the R&D Claims
shall be in full and final satisfaction of such claims, but shall instead be
distributed as follows:  first, to the other holders of allowed general
unsecured claims against Dynegy Danskammer and Dynegy Roseton in an amount not
to exceed $500,000 (the “GUC Carveout”), and second, to the Lease Trustee or DH
in accordance with subclause (b) of this paragraph; and (b) that portion of the
remaining proceeds attributable to the PSEG Entities’ interests in the sold
property as follows:

 

A.                                    50% solely to the Lease Trustee; and

 

B.                                    50% to DH, to be distributed to holders of
Allowed General Unsecured Claims against DH pursuant to the Conforming Plan (or
any other chapter 11 plan which is ultimately confirmed for DH); provided, that
the Lease Trustee (on behalf of itself and the Lease Certificate Holders) shall
disclaim any right to a distribution of the amounts paid to DH pursuant to this
Section II.d.(iv) in its capacity as a creditor of DH, and shall turn over any
such distribution it receives to DH for distribution to the other creditors of
DH pursuant to the Conforming Plan (or any other chapter 11 plan which is
ultimately confirmed for DH).

 

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Any distributions made to the Lease Trustee pursuant to Section II.d. of this
Settlement Agreement shall be subject to, and shall be taken into account when
determining, in all respects, the Lessor Recovery Cap.  For the avoidance of
doubt, it is understood that in determining the amounts subject to the Lessor
Recovery Cap, only proceeds of a Facilities sale received by the Lease Trustee
for the benefit of the Lease Certificate Holders shall be included, and that any
amounts that the Lease Trustee turns over to DH pursuant to Section II.d.(iv),
clause second, of this Settlement Agreement shall not be taken into account in
calculating the Lessor Recovery Cap.

 

(v)                                 Distribution Mechanics.  The means by which
any proceeds from a sale of the Facilities (or portions thereof) are to be
distributed pursuant to the waterfall set forth in Section II.d.(iv) above shall
be determined by the Parties and the Creditors’ Committee and may include, among
other things, distributions pursuant to a confirmed chapter 11 plan for Dynegy
Roseton and Dynegy Danskammer.

 

e.                                       Fees and Expenses.  (i) On or prior to
the Settlement Effective Date, Dynegy shall pay in cash all reasonable and
documented prepetition and postpetition fees and expenses accrued through the
Settlement Effective Date (or earlier date of payment, as applicable) of (1) the
Lease Trustee, as successor lease indenture trustee and successor pass through
trustee and its professionals and advisors (to the extent not previously paid by
Dynegy pursuant to subsection (iii) below), (2) the Ad Hoc Senior Noteholder
Committee and its professionals and advisors, (3) the other Consenting Senior
Noteholders and their respective professionals and advisors, (4) the PSEG
Entities and its professionals and advisors, (all of the entities in subclauses
(1) through (4), the “Settling Claimant Fee Recipients”) (5) CQS and Claren Road
and their respective professionals and advisors in an aggregate amount not to
exceed $2,000,000 and (6) the Subordinated Notes Indenture Trustee, and its
professionals and advisors, in an aggregate amount not to exceed $300,000, after
any such entity provides a customary summary invoice describing such fees and
expenses (which invoice may be redacted to protect privileged or confidential
information) to Dynegy, with copies to DH and the Creditors’ Committee; (ii)
after the Settlement Effective Date, Dynegy shall pay, on a monthly basis, all
of the reasonable and documented fees and expenses (x) payable under subclause
(i) but which remain outstanding after the Settlement Effective Date and (y)
accrued on and after the Settlement Effective Date of the Settling Claimant Fee
Recipients through the Plan Effective Date, in each case within fifteen (15)
Business Days after any such entity provides a customary summary invoice
describing such fees and expenses (which invoice may be redacted to protect
privileged or confidential information) to Dynegy, with copies to DH and the
Creditors’ Committee; provided, that no later than five (5) Business Days prior
to the Settlement Effective Date, each of the Settling Claimant Fee Recipients
shall provide Dynegy with a schedule of (A) the amount of such fees and expenses
incurred through the Settlement Effective Date and (B) an estimate of the
aggregate amount of such additional fees and expenses it is anticipated to incur
through the Plan Effective Date and a schedule of the professionals and advisors
to whom such payments should be made and the relevant amounts, and Dynegy shall
not be obligated to pay any fees and expenses referred to in (A) and (B)
incurred in excess of the aggregate amount of such estimated fees and expenses;
(iii) within two (2) Business Days after the execution and delivery of the May 1
Settlement Agreement, Dynegy paid to the Lease Trustee and its professionals and
advisors, their respective reasonable and documented fees and expenses through
May 1, 2012, pursuant to the

 

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instructions and customary summary invoices describing such fees and expenses
provided to Dynegy, DH and the Creditors’ Committee by the Lease Trustee on or
prior to May 1, 2012; and (iv) nothing herein shall be deemed to impair, waive,
discharge or negatively affect the Indenture Trustee Charging Liens (as defined
in the Existing Plan).  In the event that Dynegy files a petition for bankruptcy
protection under the Bankruptcy Code at any time prior to the Plan Effective
Date, any obligations it may have under this Section II.e. shall be subject to
Bankruptcy Court approval in connection with the assumption of this Settlement
Agreement as specified in Section III.x. of this Settlement Agreement.

 

f.                                        Dismissal of Adversary Proceeding.  On
the Settlement Effective Date, the Lease Trustee, DH, Dynegy Roseton and Dynegy
Danskammer shall file a stipulation of dismissal, irrevocably and
unconditionally dismissing the Adversary Proceeding with prejudice as to all
parties and all claims and without costs to any party.  For the avoidance of
doubt, the Lease Trustee, DH, Dynegy Roseton and Dynegy Danskammer shall take
all actions necessary to stay the Adversary Proceeding (and toll all pending
dates in the Adversary Proceeding) pending the occurrence of the Settlement
Effective Date or any prior termination of this Settlement Agreement.

 

g.                                      Dismissal of Prepetition Litigation.  On
the Settlement Effective Date, (a) counsel to each of the Settling Claimants who
are plaintiffs and counsel to the named defendants in (i) the Noteholder
Litigation and (ii) the Lease Indenture Trustee Litigation, respectively, shall
file a stipulation of dismissal irrevocably and unconditionally dismissing such
Prepetition Litigation with prejudice as to all parties and all claims and
without costs to any party; and (b) each of the Settling Claimants who are
plaintiffs in the PSEG Litigation shall file and serve a notice of
discontinuance irrevocably and unconditionally dismissing the PSEG Litigation
with prejudice as to all parties and all claims and without costs to any party.

 

h.                                      Release by the Debtors, DGIN and Dynegy
Coal Holdco of Dynegy Released Parties.  Effective upon the occurrence of the
Settlement Effective Date, except for the obligations set forth in this
Settlement Agreement, each of the Debtors, DGIN, Dynegy Coal Holdco and each of
their direct and indirect non-Debtor subsidiaries party hereto or to the Dynegy
Entity Joinder, affiliates, predecessors, successors and assigns (collectively,
the “DH Releasing Parties”) voluntarily and knowingly, unconditionally and
absolutely waives, remises, releases, settles, acquits, satisfies and forever
discharges Dynegy and its present and former parents, affiliates, direct and
indirect subsidiaries, shareholders, directors, officers, managers,
predecessors, successors and assigns, and its and each of their respective
agents, attorneys, advisors, accountants, restructuring consultants, financial
advisors and investment bankers, and any Person claimed to be liable
derivatively through any of the foregoing (collectively, the “Dynegy Released
Parties”), of and from all, manner of action and actions, cause and causes of
action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, controversies, damages, charges, judgments, executions,
claims and demands whatsoever, in law or in equity, whether known or unknown,
asserted or unasserted, suspected or claimed, which any of the DH Releasing
Parties ever had, now has, or hereinafter can, shall or may have, against any of
the Dynegy Released Parties for, upon or by reason of any matter, cause or thing
whatsoever, from the beginning of the world through the Settlement Effective
Date solely to the extent relating to or arising from disputes with respect to
the matters

 

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investigated by the Examiner (including, the Prepetition Restructurings), the
Prepetition Litigation, the Adversary Proceeding, the Lease Documents or the
Intercompany Receivable, including, without limitation, any claims that have
been or could have been brought in connection with the transfer of the DCH
Membership Interests to Dynegy or the Undertaking Agreement; provided, that the
foregoing release shall not include, among other matters outside the scope of
such release, (x) the obligations owed to DH under the DIP Credit Facility by
any Dynegy Released Party who is a borrower under the DIP Credit Facility, or
(y) the obligations owed to any DH Releasing Party pursuant to any intercompany
agreement entered into between any DH Releasing Party and any Dynegy Released
Party in the ordinary course of business (with the exception of the Undertaking
Agreement and the Intercompany Receivable (to the extent applicable), which
shall be released in accordance with the provisions hereof), and pursuant to
those certain cash management agreements, energy management agreements, service
agreements, tax sharing agreements, trademark license agreements and other
intercompany agreements entered into in connection with the Prepetition
Restructurings entered into in August 2011 or the CoalCo Credit Facility, the
GasCo Credit Facility and any guarantees or security provided thereunder.  The
DH Releasing Parties shall also be deemed to knowingly and voluntarily waive and
relinquish any and all provisions, rights and benefits conferred by any law of
the United States or any state or territory of the United States, or principle
of common law, which governs or limits a person’s release of unknown claims,
comparable or equivalent to California Civil Code § 1542, which provides:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

i.                                         Releases by Settling Claimants of DH
Released Parties, Dynegy Released Parties and other Settling Claimants. 
Effective upon the occurrence of the Settlement Effective Date, except for the
obligations set forth in this Settlement Agreement, each of the Settling
Claimants, for itself, its direct and indirect subsidiaries, affiliates,
predecessors, successors and assigns (collectively, the “Settling Claimant
Releasing Parties”) voluntarily and knowingly, unconditionally and absolutely
waives, remises, releases, settles, acquits, satisfies and forever discharges
(i) the Dynegy Released Parties, (ii) DH and its affiliates and its and their
present and former parents, affiliates, direct and indirect subsidiaries,
shareholders, directors, officers, managers, predecessors, successors and
assigns, and its and each of their respective agents, attorneys, advisors,
accountants, restructuring consultants, financial advisors and investment
bankers, and any Person claimed to be liable derivatively through any of the
foregoing (collectively, the “DH Released Parties”), and (iii) the other
Settling Claimant Released Parties (defined below) of and from all, manner of
action and actions, cause and causes of action, suits, debts, dues, sums of
money, accounts, reckonings, bonds, bills, specialties, covenants,
controversies, damages, charges, judgments, executions, claims and demands
whatsoever, in law or in equity, whether known or unknown, asserted or
unasserted, suspected or claimed, which any of the Settling Claimant Releasing
Parties ever had, now has, or hereinafter can, shall or may have, against any of
the Dynegy Released Parties, the DH Released Parties or

 

22

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the other Settling Claimant Released Parties for, upon or by reason of any
matter, cause or thing whatsoever, from the beginning of the world through the
Settlement Effective Date, solely to the extent relating to or arising from
disputes with respect to the matters investigated by the Examiner (including,
the Prepetition Restructurings), the Prepetition Litigation, the Adversary
Proceeding, the Lease Documents or the Intercompany Receivable, including,
without limitation, any claims that have been or could have been brought in
connection with the transfer of the DCH Membership Interests to Dynegy;
provided, that nothing in this Settlement Agreement shall release the Settling
Claimants’ respective rights under this Settlement Agreement, including the
right (x) to receive payment or distribution, if any, on account of the Lessor
Claims (subject to the Lessor Recovery Cap), the Allowed Senior Notes Claim and
the TIA Claim in favor of RCM previously allowed against DH in the Chapter 11
Cases pursuant to the PSEG Settlement as approved by the PSEG Stipulated Order
and (y) to receive payment of (or assert claims for) fees and expenses as set
forth in Section II.e hereof.  The Settling Claimant Releasing Parties shall
also be deemed to knowingly and voluntarily waive and relinquish any and all
provisions, rights and benefits conferred by any law of the United States or any
state or territory of the United States, or principle of common law, which
governs or limits a person’s release of unknown claims, comparable or equivalent
to California Civil Code § 1542, which provides:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

j.                                         Releases by Dynegy, DGIN, Dynegy Coal
Holdco and the Debtors of Settling Claimant Released Parties.  Effective upon
the occurrence of the Settlement Effective Date, except for the obligations set
forth in this Settlement Agreement, Dynegy, DGIN, Dynegy Coal Holdco and each of
the Debtors, and in each case, its direct and indirect non-Debtor subsidiaries
party hereto or to the Dynegy Entity Joinder, affiliates, predecessors,
successors and assigns (collectively, the “Dynegy and Debtor Releasing Parties”)
voluntarily and knowingly, unconditionally and absolutely waives, remises,
releases, settles, acquits, satisfies and forever discharges each Settling
Claimant and each Consenting Lease Certificate Holder and, in each case, its
affiliates and its and their present and former parents, affiliates, direct and
indirect subsidiaries, shareholders, directors, officers, managers,
predecessors, successors and assigns, and its and each of their respective
agents, attorneys, advisors, accountants, restructuring consultants, financial
advisors and investment bankers, and any Person claimed to be liable
derivatively through any of the foregoing (collectively, the “Settling Claimant
Released Parties”), of and from all, manner of action and actions, cause and
causes of action, suits, debts, dues, sums of money, accounts, reckonings,
bonds, bills, specialties, covenants, controversies, damages, charges,
judgments, executions, claims and demands whatsoever, in law or in equity,
whether known or unknown, asserted or unasserted, suspected or claimed, which
any of the Dynegy and Debtor Releasing Parties ever had, now has, or hereinafter
can, shall or may have, against any of the Settling Claimant Released Parties
for, upon or by reason of any matter, cause or thing whatsoever, from the
beginning of the world through the Settlement Effective Date, solely to the
extent relating to or arising from disputes with respect to the matters
investigated by

 

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the Examiner (including, the Prepetition Restructurings), the Prepetition
Litigation, the Adversary Proceeding or the Lease Documents including, without
limitation, any claims that have been or could have been brought in connection
with the transfer of the DCH Membership Interests to Dynegy.  The Dynegy and
Debtor Releasing Parties shall also be deemed to knowingly and voluntarily waive
and relinquish any and all provisions, rights and benefits conferred by any law
of the United States or any state or territory of the United States, or
principle of common law, which governs or limits a person’s release of unknown
claims, comparable or equivalent to California Civil Code § 1542, which
provides:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

k.                                      Release by Dynegy of DH Released
Parties.  Effective upon the occurrence of the Settlement Effective Date, except
for the obligations set forth in this Settlement Agreement, Dynegy and each of
its direct and indirect non-Debtor subsidiaries party hereto or to the Dynegy
Entity Joinder, affiliates, predecessors, successors and assigns (collectively,
the “Dynegy Releasing Parties”) voluntarily and knowingly, unconditionally and
absolutely waives, remises, releases, settles, acquits, satisfies and forever
discharges the DH Releasing Parties, of and from all, manner of action and
actions, cause and causes of action, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, controversies,
damages, charges, judgments, executions, claims and demands whatsoever, in law
or in equity, whether known or unknown, asserted or unasserted, suspected or
claimed, which any of the Dynegy Releasing Parties ever had, now has, or
hereinafter can, shall or may have, against any of the DH Releasing Parties for,
upon or by reason of any matter, cause or thing whatsoever, from the beginning
of the world through the Settlement Effective Date solely to the extent relating
to or arising from disputes with respect to the matters investigated by the
Examiner (including, the Prepetition Restructurings), the Prepetition
Litigation, the Adversary Proceeding, the Lease Documents or the Intercompany
Receivable, including, without limitation, any claims that have been or could
have been brought in connection with the transfer of the DCH Membership
Interests to Dynegy or the Undertaking Agreement; provided, that the foregoing
release shall not include, among other matters outside the scope of such
release, the obligations owed to any Dynegy Releasing Party pursuant to any
intercompany agreement entered into between any Dynegy Releasing Party and any
DH Releasing Party in the ordinary course of business (with the exception of the
Undertaking Agreement and the Intercompany Receivable (to the extent
applicable), which shall be released in accordance with the provisions hereof),
and pursuant to those certain cash management agreements, energy management
agreements, service agreements, tax sharing agreements, trademark license
agreements and other intercompany agreements entered into in connection with the
Prepetition Restructurings entered into in August 2011 or the CoalCo Credit
Facility, the GasCo Credit Facility and any guarantees or security provided
thereunder.  The Dynegy Releasing Parties shall also be deemed to knowingly and
voluntarily waive and relinquish any and all provisions, rights and benefits
conferred by any law of the United States or any state or territory of the
United States, or principle of common law, which governs or limits a

 

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person’s release of unknown claims, comparable or equivalent to California Civil
Code § 1542, which provides:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR

 

l.                                         Withdrawal of Settlement Objections,
Notice of Appeal and Trustee Motion.  Upon execution of this Settlement
Agreement: (i) Claren Road agrees to immediately withdraw the Claren Road
Settlement Objection and related discovery and adjourn and/or stay any related
deadlines or discovery with respect to the Claren Road Notice of Appeal and
Claren Road Trustee Motions; (ii) CQS agrees to immediately withdraw the CQS
Settlement Objection and related discovery, and adjourn the CQS Trustee Motion
and stay all discovery requests related thereto; and (iii) Wells Fargo agrees to
immediately withdraw the Wells Fargo Settlement Objection.  Upon entry of the
Approval Order, the actions withdrawn in (i)-(iii) above shall be deemed
withdrawn with prejudice, and Claren Road and CQS shall take all necessary
actions to withdraw, with prejudice, all adjourned matters described in (i) and
(ii) above.

 

m.                                  Subordinated Notes Claims.  DH agrees to
provide Wells Fargo, solely as trustee for the holders of the Subordinated Notes
Claims, with an allowed subordinated unsecured claim in the amount of
$222,513,384.51, consisting of (a) $206,200,000.00 in the principal amount of
the Subordinated Notes and (b) $16,313,384.51 in accrued but unpaid interest at
the applicable rates specified in the Subordinated Notes Indenture, the
Subordinated Notes, the NGC Trust Declaration, the NGC Trust Capital Income
Securities, the NGC Trust Capital Income Securities Guarantee, the NGC Trust
Common Securities and related and ancillary documents and instruments.  For
purposes of treatment of and distribution on the allowed subordinated unsecured
claim described in the foregoing sentence, Dynegy and DH further agree to amend
the Existing Plan to provide Wells Fargo, as Subordinated Notes Indenture
Trustee, solely on behalf of the holders of the Subordinated Notes Claims, with
solely an Allowed General Unsecured Claim in the amount of $55,000,000 against
DH in exchange for and in full satisfaction of all Subordinated Notes Claims,
which Subordinated Notes Claims shall be treated as set forth in the Plan
Support Agreement (which treatment shall be the same as that received by the
holders of Senior Notes) on a pari passu basis with all other Allowed General
Unsecured Claims and shall not be subject to subordination.  For the avoidance
of doubt, nothing in this paragraph shall impair or affect DH and Dynegy’s
agreement to satisfy the fees, expenses and costs of the Subordinated Notes
Indenture Trustee as set forth in Section II.e.(i)(6) of this Settlement
Agreement and in the Plan Support Agreement, or impair or affect the Indenture
Trustee Charging Liens (as such term is defined in the Existing Plan). 
Notwithstanding any termination of the Plan Support Agreement, the Parties agree
among themselves that they shall not support any plan that provides different
treatment to the Subordinated Notes beneficially held by the Consenting Sub Debt
Holders than the treatment described in the immediately preceding sentence (and
will not support any plan that does not include such treatment for all other
holders of Subordinated Notes so long as such holders do not take any actions in
contravention of those

 

25

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enumerated in Section 3 of the Plan Support Agreement, as if such holders were
party to the Plan Support Agreement).  Notwithstanding the foregoing, DH and any
of its successors, assigns or transferees shall waive any and all rights it may
have to receive a distribution on account of the $6,200,000 principal amount of
NGC Trust Common Securities, and such distribution shall instead be made to the
holders of the NGC Trust Capital Income Securities.  In furtherance of the
foregoing, the Approval Order shall include the following language: “Each
Consenting Senior Noteholder and any successors, assigns or transferees of any
Senior Notes Claims held by a Consenting Senior Noteholder, each Consenting
Lease Certificate Holder and any successors, assigns or transferees of any Lease
Certificates held by a Consenting Lease Certificate Holder, and each Consenting
Sub Debt Holder and any successors, assigns or transferees of any NGC Trust
Capital Income Securities held by a Consenting Sub Debt Holder shall be deemed
bound by Section II.m of the Settlement Agreement (as may be amended,
supplemented or modified from time to time in accordance with the terms of the
Settlement Agreement).”

 

III.                              Miscellaneous Provisions

 

a.                                      Effectiveness of Settlement Agreement. 
This Settlement Agreement shall become effective on the second Business Day
following satisfaction of each of the following conditions: (i) each of the
Parties shall have executed and delivered signed copies of this Settlement
Agreement; (ii) the Dynegy Entity Joinder shall have been executed by each of
the parties thereto; and (iii) the Approval Order, in form and substance
reasonably acceptable to Dynegy, DH, the Creditors’ Committee, a Majority of the
Consenting Senior Noteholders, the Lease Trustee, RCM, and a Majority of the
Consenting Sub Debt Holders shall have been entered by the Bankruptcy Court, be
in full force and effect and not stayed, reversed, vacated or amended; or on
such other date as Dynegy, DH, the Creditors’ Committee, a Majority of the
Consenting Senior Noteholders, the Lease Trustee, the Majority of the Consenting
Sub Debt Holders and RCM mutually agree, including as a result of any waiver of
the foregoing conditions (the “Settlement Effective Date”); provided, that to
the extent not already effective on the date of execution of the May 1
Settlement Agreement, Section I., II.c., subsection (iii) of Section II.e., the
last sentence of Section II.f., Section II.l, and Section III (other than
Section III.c.) of this Settlement Agreement shall become effective immediately
upon execution and delivery of this Settlement Agreement by all Parties.

 

b.                                      Settlement Approval Motion.  [REMOVED].

 

c.                                       Representations of the Parties.

 

(i)                                     The Settling Claimants’ Representations
and Warranties.  To induce each other Party to enter into and perform its
obligations under this Settlement Agreement, each Settling Claimant, severally
but not jointly, represents, warrants and acknowledges, as of the Settlement
Effective Date, as follows:

 

1.                                          Authority. (i) The Settling Claimant
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, and has all the requisite corporate,
partnership or other power and authority to execute and deliver this Settlement
Agreement and the other documents and instruments contemplated

 

26

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hereby to which such Settling Claimant is contemplated to be a party and perform
its obligations under this Settlement Agreement and the other documents and
instruments contemplated hereby to which it is contemplated to be a party, and
to consummate the transactions contemplated herein and therein; (ii) the
execution, delivery and performance by the Settling Claimant of this Settlement
Agreement and the other documents and instruments contemplated hereby to which
such Settling Claimant is contemplated to be a party and the consummation of the
transactions contemplated herein and therein have been duly authorized by all
necessary action (corporate, partnership, limited liability company or
otherwise) on the part of the Settling Claimant and no other action or
proceedings on the part of the Settling Claimants are necessary to authorize and
approve this Settlement Agreement or the other documents and instruments
contemplated hereby to which such Settling Claimant is contemplated to be a
party or any of the transactions contemplated herein or therein; and
(iii) solely with respect to the Lease Trustee, it has been directed by Lease
Certificate Holders holding not less than a majority of the fractional undivided
interest evidenced by the Lease Certificates to execute and deliver this
Settlement Agreement and the other documents and instruments contemplated hereby
to which the Lease Trustee is contemplated to be a party and, pursuant to
Section 5.2 of each of the Lease Indentures and Sections 1.4 and 6.4 of the Pass
Through Trust Agreement, such direction shall be binding on all Lease
Certificate Holders.

 

2.                                          Ownership.  Each Settling Claimant
is the legal owner, beneficial owner and/or the investment advisor or manager
for the legal or beneficial owner of a Claim (it being understood that the Lease
Trustee is acting solely in its capacity as successor trustee) arising out of or
relating to the Senior Notes, the Lease Certificates, the Lease Documents, the
Subordinated Notes, the NGC Trust Capital Income Securities, the NGC Trust
Capital Income Securities Guarantee and/or other debt obligations owed by the
Debtors.

 

3.                                          Validity.  This Settlement Agreement
has been duly executed and delivered by the Settling Claimant and constitutes
the legal, valid and binding agreement of the Settling Claimant, enforceable
against the Settling Claimant in accordance with its terms.

 

4.                                          No Conflict.  The execution,
delivery and performance by the Settling Claimant (when such performance is due)
of this Settlement Agreement does not and shall not (i) subject to the actions,
consents and filings referred to in clause 5 below, violate

 

27

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any provision of law, rule or regulation applicable to it or, in the case of an
entity, any of its subsidiaries or its or their certificates of incorporation or
bylaws or other organizational documents, 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, where applicable, any
of its subsidiaries is a party.

 

5.                                          Authorization of Governmental
Authorities and Creditors.  No action by (including any authorization, consent
or approval), in respect of, or filing with, any governmental authority or
regulatory body, except such filing as may be necessary and/or required for
disclosure by the Securities and Exchange Commission or pursuant to state
securities or “blue sky” laws, is required for, or in connection with, the valid
and lawful authorization, execution, delivery and performance by the Settling
Claimant pursuant to this Settlement Agreement; provided, that implementation
and consummation of the transactions contemplated herein may be subject to
receipt of regulatory approvals pursuant to the Federal Power Act or similar
state law.

 

6.                                          No Reliance.  The Settling Claimant
(i) is a sophisticated party with respect to the subject matter of this
Settlement Agreement, (ii) has been represented and advised by legal counsel in
connection with this Settlement Agreement, (iii) has adequate information
concerning the matters that are the subject of this Settlement Agreement, and
(iv) has independently and without reliance upon any other Party hereto or any
of their affiliates, or any officer, employee, agent or representative thereof,
and based on such information as the Settling Claimant has deemed appropriate,
made its own analysis and decision to enter into this Settlement Agreement,
except that the Settling Claimant has relied upon each other Party’s express
representations, warranties and covenants in this Settlement Agreement, and the
Settling Claimant acknowledges that it has entered into this Settlement
Agreement voluntarily and of its own choice and not under coercion or duress.

 

7.                                          Title.  As of the date hereof, the
Settling Claimant (other than the Lease Trustee, which is acting solely in its
capacity as successor trustee) is the legal owner, beneficial owner and/or the
investment advisor or manager for the legal or beneficial owner of the Claims in
the aggregate principal amount set forth in the disclosure certificate which
shall be provided to DH and Dynegy within three (3) Business Days of the
execution of this Settlement Agreement (the “Disclosure Certificate”) (and in
the case of a nominee, it has due and proper authorization to act on behalf of,

 

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and to bind, the beneficial owner of such Claims); provided, that the
information contained in the Disclosure Certificate shall be maintained as
confidential by DH, Dynegy and their financial advisors and legal counsel,
except to the extent otherwise required by law or any rule or regulation of any
exchange or regulatory authority; and provided further that, subject to
Section III.q. of this Settlement Agreement, DH and Dynegy may disclose the
aggregate of all Claims held by the Settling Claimants.  Within one (1) Business
Day of delivering the Disclosure Certificates to DH and Dynegy required by the
preceding sentence, counsel to the Consenting Senior Noteholders, counsel to the
Lease Trustee, and counsel to the Consenting Sub Debt Holders shall disclose the
aggregate Claims against DH held by each Consenting Senior Noteholder, each
Consenting Lease Certificate Holder and each Consenting Sub Debt Holder,
respectively, to counsel to the Creditors’ Committee, which shall maintain such
information as confidential and on a professionals’ eyes only basis; provided,
however, that such disclosure shall only be required if counsel to the
Consenting Senior Noteholders and counsel to the Lease Trustee receive at least
one (1) Disclosure Certificate required under this paragraph.  The Settling
Claimant’s interest in the Claim is free and clear of any pledge, lien, security
interest, charge, claim, equity, option, warrant, proxy, voting restriction,
right of first refusal or other limitation on disposition or encumbrances of any
kind, that would adversely affect in any way the Settling Claimant’s performance
of its obligations contained in this Settlement Agreement at the time such
obligations are required to be performed.  Any Settling Claimant that provided a
Disclosure Certificate in connection with the May 1 Settlement Agreement and
does not provide an updated Disclosure Certificate in connection herewith, will
be deemed to represent the continued accuracy as of the date hereof of such
previous Disclosure Certificate.

 

ii.                                       Debtors’ Representations and
Warranties.  To induce each other Party to enter into and perform its
obligations under this Settlement Agreement, each Debtor hereby represents,
warrants and acknowledges, as of the Settlement Effective Date, as follows:

 

1.                                          Authority.  Subject to Bankruptcy
Court approval, (i) each of the Debtors is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, and has
all the requisite corporate, partnership, limited liability company or other
power and authority to execute and deliver this Settlement Agreement and the
other documents and instruments contemplated hereby to which the Debtors are
contemplated to be

 

29

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parties and perform their obligations under this Settlement Agreement and the
other documents and instruments contemplated hereby to which they are
contemplated to be parties, and to consummate the transactions contemplated
herein and therein, and to consummate the transactions contemplated herein and
therein, and (ii) the execution, delivery and performance by such Debtors under
this Settlement Agreement and the other documents and instruments contemplated
hereby to which each such Debtor is contemplated to be a party and the
consummation of the transactions contemplated herein and therein, have been duly
authorized by all necessary action on the part of such Debtor,  and no other
actions or proceedings on the part of such Debtor are necessary to authorize and
approve this Settlement Agreement or the other documents or instruments
contemplated hereby to which such Debtor is contemplated to be a party or any of
the transactions contemplated herein or therein.

 

2.                                          Validity.  Subject to Bankruptcy
Court approval, this Settlement Agreement has been duly executed and delivered
by the Debtors and constitutes the legal, valid and binding agreement of the
Debtors, enforceable against the Debtors in accordance with its terms.

 

3.                                          No Conflict.  Subject to Bankruptcy
Court approval, the execution, delivery and performance by the Debtors (when
such performance is due) of this Settlement Agreement does not and shall not
(i) subject to the actions, consents and filings referred to in clause 4 below,
violate any provision of law, rule or regulation applicable to the Debtors or
any of their subsidiaries or the Debtors’ or their subsidiaries’ certificates of
incorporation or bylaws or other organizational documents, 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 obligations to which it or any of
its subsidiaries is a party.

 

4.                                          Authorization of Governmental
Authorities.  No action by (including any authorization, consent or approval),
in respect of, or filing with, any governmental authority or regulatory body,
except such filing as may be necessary and/or required for disclosure by the
Securities and Exchange Commission or pursuant to state securities or “blue sky”
laws, and the approval of the Bankruptcy Court of the Debtors’ authority to
enter into and implement this Settlement Agreement, is required for, or in
connection with, the valid and lawful authorization, execution, delivery and
performance by the Debtors of this Settlement Agreement; provided that,
implementation and consummation of the

 

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transactions contemplated herein may be subject to receipt of regulatory
approvals pursuant to the Federal Power Act or similar state law.

 

5.                                          No Reliance.  Each of the Debtors
(i) is a sophisticated party with respect to the matters that are the subject of
this Settlement Agreement, (ii) has had the opportunity to be represented and
advised by legal counsel in connection with this Settlement Agreement, (iii) has
adequate information concerning the matters that are the subject of this
Settlement Agreement, and (iv) has independently and without reliance upon any
other Party hereto, or any of their affiliates, or any officer, employee, agent
or representative thereof, and based on such information as such Debtor has
deemed appropriate, made its own analysis and decision to enter into this
Settlement Agreement, except that the Debtors have relied upon each other
Party’s express representations, warranties and covenants in this Settlement
Agreement, which each of the Debtors enters, or as to which each Debtor
acknowledges and agrees, voluntarily and of its own choice and not under
coercion or duress.

 

iii.                                    Representations and Warranties of
Dynegy, DGIN and Dynegy Coal Holdco.  To induce each other Party to enter into
and perform its obligations under this Settlement Agreement, each of Dynegy,
DGIN and Dynegy Coal Holdco hereby represents, warrants and acknowledges, as of
the Settlement Effective Date (except as otherwise expressly indicated below),
as follows:

 

1.                                         Authority.  (i) each of Dynegy, DGIN
and Dynegy Coal Holdco is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, and has all the
requisite corporate, partnership, limited liability company or other power and
authority to execute and deliver this Settlement Agreement and the other
documents and instruments contemplated hereby to which it is contemplated to be
a party and perform its obligations under this Settlement Agreement and the
other documents and instruments contemplated hereby to which it is contemplated
to be a party, and to consummate the transactions contemplated herein and
therein, and (ii) the execution, delivery and performance by Dynegy, DGIN and
Dynegy Coal Holdco under this Settlement Agreement and the other documents and
instruments contemplated hereby to which each of Dynegy, DGIN and Dynegy Coal
Holdco is contemplated to be a party, and the consummation of the transactions
contemplated herein and therein have been duly authorized by all necessary
action (corporate, partnership, limited liability company or otherwise) on the
part of Dynegy, DGIN and Dynegy Coal Holdco, and no other action or proceedings
on the

 

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part of Dynegy, DGIN and Dynegy Coal Holdco are necessary to authorize and
approve this Settlement Agreement or the other documents and instruments
contemplated hereby to which Dynegy, DGIN and Dynegy Coal Holdco are
contemplated to be parties or any of the transactions contemplated herein or
therein;

 

2.                                          Validity.  This Settlement Agreement
has been duly executed and delivered by each of Dynegy, DGIN and Dynegy Coal
Holdco and constitutes the legal, valid and binding agreement of each of Dynegy,
DGIN and Dynegy Coal Holdco, enforceable against Dynegy, DGIN and Dynegy Coal
Holdco in accordance with its terms.

 

3.                                         No Conflict.  The execution, delivery
and performance by Dynegy, DGIN and Dynegy Coal Holdco (when such performance is
due) of this Settlement Agreement does not and shall not (i) subject to the
actions, consents and filings referred to in clause 4 below, violate any
provision of law, rule or regulation applicable to it or any of its subsidiaries
or its or their certificates of incorporation or bylaws or other organizational
documents, 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
obligations to which it or any of its subsidiaries is a party.

 

4.                                         Authorization of Governmental
Authorities.  No action by (including any authorization, consent or approval),
in respect of, or filing with, any governmental authority or regulatory body,
except such filing as may be necessary and/or required for disclosure by the
Securities and Exchange Commission or pursuant to state securities or “blue sky”
laws, is required for, or in connection with, the valid and lawful
authorization, execution, delivery and performance by Dynegy, DGIN and Dynegy
Coal Holdco of this Settlement Agreement.

 

5.                                         No Reliance.  Each of Dynegy, DGIN
and Dynegy Coal Holdco (i) is a sophisticated party with respect to the subject
matter of this Settlement Agreement, (ii) has been represented and advised by
legal counsel in connection with this Settlement Agreement, (iii) has adequate
information concerning the matters that are the subject of this Settlement
Agreement, and (iv) has independently and without reliance upon any other Party
hereto or any of their affiliates, or any officer, employee, agent or
representative thereof, and based on such information as it has deemed
appropriate, made its own analysis and decision to enter into this Settlement
Agreement, except that each of Dynegy, DGIN and Dynegy Coal Holdco has relied
upon each other Party’s

 

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express representations, warranties and covenants in this Settlement Agreement,
which it enters, and each of Dynegy, DGIN and Dynegy Coal Holdco acknowledges
that it has entered into this Settlement Agreement voluntarily and of its own
choice and not under coercion or duress.

 

6.                                         Ownership of DCH Membership
Interests.  Dynegy is the beneficial and record owner of the DCH Membership
Interests and Dynegy’s transfer of the DCH Membership Interests in accordance
with this Settlement Agreement shall transfer such DCH Membership Interests,
directly or indirectly, to DH free and clear of any liens.

 

7.                                         Assets.  From and after the
Settlement Effective Date, Dynegy will not own any material assets or rights
that are necessary for the operation of the business of DH and its subsidiaries
as conducted prior to September 1, 2011, other than those related to corporate
services (including, without limitation, treasury, employee benefits, legal,
compliance, cash management and similar services) provided to DH in the ordinary
course of business, the services of officers and employees, information
technology and intellectual property, to the extent that such assets or rights
were owned by entities other than Dynegy Coal Holdco and its subsidiaries prior
to September 1, 2011.

 

d.                                      Termination.  This Settlement Agreement
and the obligations of the Parties may be terminated by (i) mutual written
agreement of Dynegy, DH, a Majority of the Consenting Senior Noteholders, a
Majority of the Consenting Sub Debt Holders, the Lease Trustee, and RCM (after
prior notice to and reasonable consultation with the Creditors’ Committee) or
(ii) by any of (1) Dynegy, (2) DH, (3) a majority in number of the Consenting
Senior Noteholders (for the avoidance of doubt, which shall not be calculated
based on the principal amount of Senior Notes held by such Consenting Senior
Noteholders), (4) the Lease Trustee or (5) a Majority of the Consenting Sub Debt
Holders in the event the Settlement Effective Date shall not have occurred prior
to June 29, 2012, provided that the Consenting Sub Debt Holders shall not have
such termination right in the event the Approval Order has been entered prior to
such date.  Any notice of termination given under clause (ii) hereof shall be
effective immediately.  Following entry of the Approval Order and so long as
such Approval Order is not stayed, reversed, vacated, overturned or amended in
any material respect, in the event the Settlement Agreement is terminated in
accordance with the terms hereof, Sections II.l and II.m shall continue to be
binding on the Parties hereto, and their successors and assigns.

 

e.                                       Effect of Termination.  Upon
termination of this Settlement Agreement in accordance with Section III.d.
hereof, all obligations of the Parties under this Settlement Agreement shall
terminate and shall be of no further force and effect; provided, that any claim
for breach of this Settlement Agreement (i) occurring after the Settlement
Effective Date or (ii) occurring after May 1, 2012 in respect of a breach of any
provision which is effective as of May

 

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1, 2012 or occurring after the date hereof in respect of a breach of any
provision which is effective as of the date hereof, in each case pursuant to
Section III.a. of this Settlement Agreement, shall survive termination and all
rights and remedies with respect to such claim shall be neither waived nor
prejudiced in any way by termination of this Settlement Agreement.

 

f.                                        Fiduciary Duties of Creditors’
Committee Members.  Notwithstanding anything to the contrary herein, if any
Settling Claimant or Subordinated Notes Indenture Trustee serves on the
Creditors’ Committee, then the terms of this Settlement Agreement shall not be
construed to limit such Settling Claimant’s or Subordinated Notes Indenture
Trustee’s exercise of fiduciary duties in its role as a member of the Creditors’
Committee, and any exercise of such fiduciary duties shall not be deemed to
constitute a breach of this Settlement Agreement; provided, that service as a
member of the Creditors’ Committee shall not relieve such Settling Claimant or
Subordinated Notes Indenture Trustee in its non-committee capacity of its
obligations under this Settlement Agreement.

 

g.                                      Acknowledgements.  Each Party
acknowledges that (a) no securities of either Dynegy, DH or any of their
affiliates are being offered or sold hereby and this Settlement Agreement
neither constitutes an offer to sell nor a solicitation of an offer to buy any
securities of Dynegy or DH and (b) this Settlement Agreement is not, and shall
not be deemed to be, a solicitation of a vote for the acceptance of a plan of
reorganization pursuant to section 1125 of the Bankruptcy Code.

 

h.                                      Cooperation and Support.  The Parties
shall cooperate with each other in good faith and shall coordinate their
activities (to the extent possible and subject to the terms of this Settlement
Agreement) in respect of (i) the prosecution of the Settlement Approval Motion
with the Bankruptcy Court, obtaining Bankruptcy Court approval of this
Settlement Agreement, the entry of the Approval Order, and the implementation of
the settlement terms set forth in this Settlement Agreement, and (ii) the
consummation of the transactions contemplated by this Settlement Agreement. 
Furthermore, (1) subject to the terms of this Settlement Agreement, each of the
Parties shall use its commercially reasonable efforts to (a) support and
complete all transactions contemplated hereby; (b) take any and all necessary
and appropriate actions in furtherance of the transactions contemplated hereby,
including (I) obtaining any and all required governmental and regulatory
approvals, including, without limitation, obtaining any required approvals
pursuant to Section 203 of the Federal Power Act, as amended, codified at 16
U.S.C. § 824 et. seq. and the implementing regulations thereunder, and any
similar state law, and (II) making and filing any and all required regulatory
filings; and (c) refrain from taking any action inconsistent with this
Settlement Agreement, and (2) in no event shall any Party file, cause an
affiliate or any other third party to file, or encourage any affiliate or any
third party to file, an opposition to the Settlement Approval Motion or the
Settlement Agreement.  Notwithstanding the requirements of this Section III.h,
the Consenting Sub Debt Holders shall not be required to pay any out-of-pocket
fees and expenses related to their obligations herein (other than as required to
comply with their obligations under Section II.l herein), and shall not be
required to provide any indemnity to the Subordinated Notes Indenture Trustee in
connection herewith.  Notwithstanding anything to the contrary contained in this
Settlement Agreement, for the avoidance of doubt, the rights, obligations and
agreements of the Subordinated Note Indenture Trustee, on the one hand, and the
holders of Subordinated Notes, the holders of the NGC Trust

 

34

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Capital Income Securities, and the holders of the NGC Trust Common Securities,
on the other hand, are not impaired or affected by the foregoing sentence,
including the Subordinated Notes Indenture Trustee’s right to indemnification as
provided under the Subordinated Notes Indenture.

 

i.                                         Governing Law; Jurisdiction.

 

(i)                                     THIS SETTLEMENT 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.

 

(ii)                                  By its execution and delivery of this
Settlement Agreement, each of the Parties hereto 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
Settlement Agreement or for recognition or enforcement of any judgment rendered
in any such action, suit or proceeding, shall be brought in the Bankruptcy
Court; provided, that (x) this Settlement Agreement, and the releases provided
in Section II herein, may be submitted in any court, arbitration and/or other
legal proceeding to enforce the terms of the releases provided in Section II
herein and (y) any determination of the amount of the Dynegy Administrative
Claim shall be by arbitration pursuant to Section II.a.(ii) of this Settlement
Agreement.  By execution and delivery of this Settlement Agreement, each of the
Parties irrevocably accepts and submits itself to the exclusive jurisdiction of
the Bankruptcy 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.

 

(iii)                               In the event the Bankruptcy Court does not
have or refuses to exercise jurisdiction with respect to this Settlement
Agreement and any disputes arising therefrom, any legal action, suit, or
proceeding against the Parties with respect to any matter under or arising out
of or in connection with this Settlement 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 or courts of the State of New York located in the Borough of Manhattan,
City of New York, and by execution and delivery of this Settlement Agreement,
each Party irrevocably accepts and submits itself to the exclusive jurisdiction
of the Bankruptcy Court and those courts.

 

35

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j.                                         No Admission of Liability.  Each
Party enters into this Settlement Agreement without admitting any liability or
conceding any allegations not already expressly admitted.  This Settlement
Agreement and its provisions shall not be offered or received in evidence in any
action or proceeding as an admission or concession of liability or wrongdoing of
any nature on the part of any Party except that it may be offered and received
in evidence solely to enforce this Settlement Agreement.

 

k.                                      Third-Party Beneficiaries.  Nothing in
this Settlement Agreement is intended to benefit or create any right or cause of
action in or on behalf of any person other than the Parties hereto unless
expressly set forth herein.  For the avoidance of doubt, (i) each of the persons
and entities released in Section II is an intended third-party beneficiary of
this Settlement Agreement and (ii) subject to Section III.r. of this Settlement
Agreement, the Creditors’ Committee is an intended third-party beneficiary of
Sections
II.a., II.c, II.d.(iii), II.d.(v), II.e, III.a., III.d., III.l, III.n., III.r.
and III.u. hereof.

 

l.                                         Notices.  All notices and other
communications in connection with this Settlement Agreement shall be in writing
and shall be deemed to have been given if delivered personally, sent by e-mail
or electronic facsimile (with confirmation), mailed by registered or certified
mail (return receipt requested) or delivered by an express courier (with
confirmation) to the Parties at the following addresses (or at such other
address for a Party as shall be specified by like notice):

 

If to Dynegy:

 

 

 

 

Dynegy Inc.

Attention: Catherine Callaway

601 Travis — 14th Floor

Houston, Texas 77002

Telephone: (713) 767-4615

Facsimile: (713) 767-5181

E-mail: Catherine.Callaway@dynegy.com

 

 

 

with a copy to:

 

 

 

 

White & Case LLP

Attention: Thomas E Lauria

200 South Biscayne Boulevard

Suite 4900

Miami, Florida 33131

Telephone: (305) 995-5282

Facsimile: (305) 358-5744

E-mail: tlauria@whitecase.com

 

 

 

If to DH:

 

 

 

 

Dynegy Holdings, LLC

Attention: Catherine Callaway

601 Travis — 14th Floor

Houston, Texas 77002

Telephone: (713) 767-4615

 

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Facsimile: (713) 767-5181

E-mail: Catherine.Callaway@dynegy.com

 

and

 

Attention: David Hershberg

E-mail: david.hershberg@gmail.com.

c/o Young Conaway Stargatt & Taylor, LLP

Attention:  James L. Patton, Jr.

Rodney Square

1000 North King Street

Wilmington, Delaware 19801

Telephone:  (302) 571-6684

Facsimile:  (302) 576-3325

E-mail:  jpatton@ycst.com

 

 

 

with a copy to:

 

 

 

 

Sidley Austin LLP

Attention: James F. Conlan

One South Dearborn

Chicago, Illinois 60603

Telephone: (312) 853-6890

Facsimile: (312) 853-7036

E-mail: jconlan@sidley.com

 

 

 

with a copy to:

 

 

 

 

Young Conaway Stargatt & Taylor, LLP

Attention:  James L. Patton, Jr.

Rodney Square

1000 North King Street

Wilmington, Delaware 19801

Telephone:  (302) 571-6684

Facsimile:  (302) 576-3325

E-mail:  jpatton@ycst.com

 

 

 

If to the Ad Hoc Senior Noteholders Committee:

 

 

 

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP

Attention: Andrew N. Rosenberg and Alice Belisle Eaton

1285 Avenue of the Americas

New York, New York 10019

Telephone: (212) 373-3000

Facsimile: (212) 757-3990

E-mail: arosenberg@paulweiss.com and

aeaton@paulweiss.com

 

37

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If to Franklin Advisers:

 

 

 

 

Franklin Advisers, Inc.

Attention: Ed Perks and Piret Loone

One Franklin Parkway

San Mateo, California 94403

Facsimile: (916) 463-1902

E-mail: perksed@frk.com and ploone@frk.com

 

 

 

with a copy to:

 

 

 

 

Milbank, Tweed, Hadley & McCloy LLP

Attention: Thomas Kreller and Brett Goldblatt

601 S. Figueroa Street

30th Floor

Los Angeles, California 90017

Telephone: (213) 892-4000

Facsimile: (213) 629-5063

E-mail: tkreller@milbank.com and bgoldblatt@milbank.com

 

 

 

If to Oaktree Capital Management:

 

 

 

 

Oaktree Capital Management

Attention: Kenneth Liang

333 South Grand Avenue, 28th Floor

Los Angeles, California 90071

Facsimile: (213) 830-8522

E-mail: kliang@oaktreecapital.com

 

 

 

If to the Lease Trustee:

 

 

 

 

U.S. Bank National Association

Attention: Pamela J. Wieder & Wayne F. Miller

60 Livingston Avenue

St. Paul, Minnesota 55107

Telephone: (651) 495-3961

Facsimile: (651) 495-8100

E-mail: pamela.wieder@usbank.com and

wayne.miller1@usbank.com

 

 

 

with a copy to:

 

 

 

 

Shipman & Goodwin LLP

Attention: Ira H. Goldman & Marie C. Pollio

One Constitution Plaza

Hartford, Connecticut 06103

Telephone: (860) 251-5820

 

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Facsimile: (860) 251-5214

E-mail: igoldman@goodwin.com and

mpollio@goodwin.com

 

 

 

with a copy to:

 

 

 

 

Cadwalader, Wickersham & Taft LLP

Attention: George A. Davis & Josh Brant

One World Financial Center

New York, New York 10281

Telephone: (212) 504-6797

Facsimile: (212) 504-6666

E-mail: george.davis@cwt.com & josh.brant@cwt.com

 

 

 

If to the PSEG Entities:

 

 

 

 

Resources Capital Management Corporation

80 Park Plaza, T-20

Newark, New Jersey 07102

Attention: Scott S. Jennings

Telephone: (973) 430-8660

Facsimile: (973) 643-8385

E-mail: scott.jennings@pseg.com

 

and

 

Attention: Shawn P. Leyden

Telephone: (973) 430-7698

Facsimile: (973) 643-8385

E-mail: shawnp.leyden@pseg.com

 

 

 

with a copy to:

 

 

 

 

Jenner & Block LLP

353 North Clark Street

Chicago, Illinois 60654

Attention: David J. Bradford

Telephone: (312) 923-2975

Facsimile: (312) 840-7375

E-mail: dbradford@jenner.com

 

and

 

Attention: Daniel R. Murray

Telephone number: 312-923-2953

Facsimile number 312-840-7353

E-mail: dmurray@jenner.com

 

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If to CQS:

 

 

 

 

Andrews Kurth LLP

450 Lexington Avenue, 15th Floor

New York, New York 10017

Attention: Paul N. Silverstein

Telephone: (212) 850-2800

Facsimile (212) 850-2929

Email: paulsilverstein@andrewskurth.com

 

 

 

If to Claren Road:

 

 

 

 

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, New York 10166-0193

Attention: Matthew Williams, Esq.

Telephone: (212) 351-4000

Facsimile: (212) 351-4025

Email: MJWilliams@gibsondunn.com

 

 

 

If to Loomis:

 

 

 

 

Thomas H. Day

Assistant General Counsel

Loomis, Sayles & Company, L.P.

One Financial Center

Boston, MA 02111

Tel: 617-310-3697

Email: tday@loomissayles.com

 

 

 

If to Wells Fargo:

 

 

 

 

Wells Fargo Bank, N.A.

40 West 57th Street

New York, New York 10019

Attention: James R. Lewis, Vice President

james.r.lewis@wellsfargo.com

 

 

 

with a copy to:

 

 

 

 

Arent Fox LLP

1675 Broadway

New York, New York 10019

Attention: Andrew Silfen, Esq.

Telephone: (212) 484-3903

Facsimile: (212) 484-3990

Email: Silfen.Andrew@arentfox.com

 

 

 

If to the Creditors’ Committee:

 

 

 

40

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Akin Gump Strauss Hauer & Feld LLP
Attention: Arik Preis
One Bryant Park
New York, NY 10036
Telephone: (212) 872-7418
Facsimile: (212) 872-1002
E-mail: apreis@akingump.com

 

m.           Entire Agreement.  This Settlement Agreement, including any
exhibits, annexes and/or schedules hereto, constitutes the entire agreement
between the Parties concerning the subject matter of this Settlement Agreement
and supersedes all prior negotiations, agreements and understandings, whether
written or oral, between and among the Parties concerning the subject matter of
this Settlement Agreement.  Each of the Parties hereto acknowledges that it is
executing this Settlement Agreement without reliance on any representations,
warranties or commitments other than those representations, warranties and
commitments expressly set forth in this Settlement Agreement.

 

n.             Modification or Amendment.  This Settlement Agreement may be
modified or amended only by written agreement executed by Dynegy, DH, a Majority
of the Consenting Senior Noteholders, the Lease Trustee, and RCM, after prior
notice to and reasonable consultation with the Creditors’ Committee; provided,
that the consent of the Creditors’ Committee shall also be required solely in
respect of any modification or amendment adverse to the rights of the Creditors’
Committee contained in Sections
II.a., II.c, II.d.(iii), II.d.(v), II.e, III.a., III.d., III.l., III.n. and
III.r. hereof; provided further, that the consent of a Majority of the
Consenting Sub Debt Holders shall be required solely in respect of (i) any
modification or amendment adverse to the rights of the Consenting Sub Debt
Holders where the adverse effect of such modification or amendment is unique to
the Consenting Sub Debt Holders, contained in Sections
II.e.(i)(5), II.e.(ii)(x), II.i, II.j, II.l, II.m and all of Article III hereof,
or (ii) any modification or amendment adding a provision to the Settlement
Agreement, where such provision is adverse to the rights of the Consenting Sub
Debt Holders and where the adverse effect of such added provision is unique to
the Consenting Sub Debt Holders; and provided further, that the consent of Wells
Fargo shall be required solely in respect of any modification or amendment
adverse to the rights of Wells Fargo, where the adverse effect of such
modification or amendment is unique to Wells Fargo in Sections
II.e.(i)(6), II.e.(ii)(x), II.e.iv, II.l.(iii), III.h and this Section III.n.

 

o.             Further Assurances.  From and after the date hereof, each of the
Parties agrees to use their respective commercially reasonable efforts to
execute or cause to be executed and deliver or cause to be delivered all such
agreements, instruments and documents and take or cause to be taken all such
further actions as the Parties may reasonably deem necessary from time to time
to carry out the intent and purpose of this Settlement Agreement, and to
consummate the transactions contemplated hereby and thereby.

 

p.             Successors and Assigns. Except as otherwise provided in this
Settlement Agreement, this Settlement Agreement is intended to bind and inure to
the benefit of each of the

 

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Parties and each of their respective successors, assigns, heirs, executors,
administrators and representatives.

 

q.             Public Disclosure.  Without limiting the prohibition on
disclosure of the Disclosure Certificate contained in Section III.c. of this
Settlement Agreement (subject to the qualifications set forth in such
Section III.c.), the Settling Claimants hereby consent to the disclosure of the
execution and contents of this Settlement Agreement by Dynegy or DH in the
Conforming Plan, the Disclosure Statement and any other related documents, and
any filings by Dynegy or DH with the Bankruptcy Court or the Securities and
Exchange Commission, or as required by law or regulation; provided, that except
as required by law or any rule or regulation of any securities exchange or any
governmental agency, none of Dynegy, DH, or any other Debtor shall use the name
of any Settling Claimant or its affiliates, officers, directors, managers,
stockholders, members, employees, partners, representatives and agents in any
press release or filing with the Securities and Exchange Commission without the
prior consent of such applicable Settling Claimant.  Each of Dynegy, DH, and the
other Debtors, on the one hand, and the Settling Claimants, on the other hand,
shall (a) consult with each other before issuing any press release or otherwise
making any public statement with respect to the transactions contemplated by
this Settlement Agreement, (b) provide to the other for review a copy of any
such press release or public statement and (c) not issue any such press release
or make any such public statement prior to such consultation and review and the
receipt of the prior consent of the other Parties (which shall not be
unreasonably withheld) unless required by applicable law or regulations of any
applicable stock exchange or governmental authority, in which case, the Party or
Parties required to issue the press release or make the public statement shall,
prior to issuing such press release or making such public statement, use its
reasonable best efforts to allow the other Parties reasonable time to comment on
such release or statement to the extent practicable.

 

r.             Creditors’ Committee Consent Rights.  Notwithstanding anything to
the contrary in this Settlement Agreement, in any circumstance where a provision
of this Settlement Agreement requires the approval or consent of the Creditors’
Committee, such requirement shall only be in effect and enforceable to the
extent that at the time such approval or consent is required, all then current
members of the Creditors’ Committee are eligible to vote on the subject of such
required approval or consent and, if so requested by a Party, counsel to the
Creditors’ Committee provides confirmation of such eligibility; provided, that
if at any time the approval or consent of the Creditors’ Committee is required
and (i) fewer than all of the then current members of the Creditors’ Committee
are at such time eligible to vote on the subject of the required approval or
consent or (ii)  counsel to the Creditors’ Committee is requested by a Party,
but is unable, to provide confirmation of the eligibility of all then current
members to vote with respect to such subject at such time, the Creditors’
Committee’s approval or consent rights shall, in such instance, instead be
deemed to be consultation rights only.  For the avoidance of doubt, all then
current members of the Creditors’ Committee must be eligible to vote for any and
all matters requiring the approval or consent of the Creditors’ Committee
hereunder, other than any approval or consent required under Section II.d.
hereof, solely with respect to which the vote of the Lease Trustee shall not be
required under this Section III.r.

 

s.             Interpretation.  This Settlement Agreement is the product of
negotiations among the Parties, and the enforcement or interpretation of this
Settlement Agreement is to be

 

42

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interpreted in a neutral manner; and any presumption with regard to
interpretation for or against any Party by reason of that Party (or its counsel)
having drafted or caused to be drafted this Settlement Agreement or any portion
of this Settlement Agreement, shall not be effective in regard to the
interpretation of this Settlement Agreement.

 

t.              Settlement Discussions.  This Settlement Agreement and the
transactions contemplated herein are part of a proposed settlement among the
Parties.  Nothing herein shall be deemed an admission of any kind.  To the
extent provided by Federal Rule of Evidence 408, all applicable mediation
privileges, and any applicable state rules of evidence, this Settlement
Agreement and all negotiations relating thereto shall not be admissible into
evidence in any proceeding other than a proceeding to enforce the terms of this
Settlement Agreement.

 

u.             Specific Performance.  It is understood and agreed by the Parties
that money damages would be an insufficient 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 for
any such breach, including, without limitation, an order of the Bankruptcy Court
or other court of competent jurisdiction requiring any Party to comply promptly
with any of its obligations hereunder; provided, that each Party agrees to waive
any requirement for the securing or posting of a bond in connection with such
remedy.

 

v.             Headings.  Titles and headings in this Settlement Agreement are
inserted for convenience of reference only and are not intended to affect the
interpretation or construction of the Settlement Agreement.

 

w.            Execution of Agreement.  This Settlement Agreement may be executed
in counterparts, and by the different Parties hereto on separate counterparts,
each of which when executed and delivered shall constitute an original. 
Delivery of an executed counterpart by facsimile or electronic mail shall be
equally as effective as delivery of an original executed counterpart.

 

x.             Assumption of Agreement.  In the event that Dynegy files a
petition for bankruptcy protection under the Bankruptcy Code prior to the
Settlement Effective Date, Dynegy will file a motion to assume this Settlement
Agreement pursuant to section 365 of the Bankruptcy Code on the first day of its
bankruptcy case.

 

y.             Non-Severability of Agreement.  This Settlement Agreement is to
be construed a whole, and all provisions of it are to be read and construed
together.  Notwithstanding anything in this Settlement Agreement or the Approval
Order to the contrary, and in light of the integrated nature of the settlements
and compromises embodied in this Settlement Agreement and the Approval Order, in
the event that (i) a court of competent jurisdiction enters a final order ruling
that the Approval Order or any of the transactions contemplated in this
Settlement Agreement or the Approval Order are void, invalid, illegal or
unenforceable in any material respect, (ii) any of the transactions contemplated
by this Settlement Agreement or the Approval Order are reversed, vacated,
overturned, voided or unwound in any material respect, or (iii) the Approval
Order is reversed, vacated, overturned or amended in any material respect, then
in each case, the entirety of this Settlement Agreement and the Approval Order
(other than this Section III.y. and the paragraph in the Approval Order with
respect thereto) shall be void ab initio and of no force and

 

43

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

 

effect and, during any subsequent proceeding, the Parties and the Creditors’
Committee shall not assert claim preclusion, issue preclusion, estoppel or any
similar defense in respect of rights and claims of the Parties that were the
subject of this Settlement Agreement and the Approval Order prior to this
Settlement Agreement and the Approval Order being of no force or effect.

 

z.             Concerning the Danskammer/Roseton OL Independent Manager of
Danskammer OL LLC and Roseton OL LLC.  Notwithstanding anything contained herein
to the contrary, this Settlement Agreement has been executed by Wilmington Trust
Company not in its individual capacity but solely in its capacity as independent
manager of each of Danskammer OL LLC and Roseton OL LLC (in such capacities,
collectively, the “Danskammer/Roseton OL Independent Manager”), and in no event
shall Wilmington Trust Company in its individual capacity or as
Danskammer/Roseton OL Independent Manager have any liability for the
representations, warranties, covenants, agreements or other obligations of
either of Danskammer OL LLC or Roseton OL LLC or any other Person hereunder or
other documents delivered pursuant hereto.  For all purposes of this Settlement
Agreement, in the performance of any duties or obligations of the
Danskammer/Roseton OL Independent Manager hereunder, the Danskammer/Roseton OL
Independent Manager shall be entitled to the benefits of the terms and
provisions of the Limited Liability Company Agreements of Danskammer OL LLC and
Roseton OL LLC, as applicable.

 

44

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

 

IN WITNESS WHEREOF, the Parties hereto have executed this Settlement Agreement
as of the date set forth above.

 

 

DYNEGY INC.

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

DYNEGY GAS INVESTMENTS, LLC

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

DYNEGY COAL HOLDCO, LLC

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

DYNEGY DANSKAMMER, L.L.C.

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

DYNEGY ROSETON, L.L.C.

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

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

 

 

DYNEGY NORTHEAST GENERATION, INC.

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

HUDSON POWER, L.L.C.

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

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

 

 

DYNEGY HOLDINGS, LLC

 

 

 

 

 

 

 

By:

/s/ David Hershberg

 

 

David Hershberg

 

 

Independent Manager

 

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

 

 

RESOURCES CAPITAL MANAGEMENT CORPORATION

 

 

 

 

 

 

 

By:

/s/ Scott S. Jennings

 

 

Name:

Scott S. Jennings

 

 

Title:

President

 

 

 

 

 

 

 

 

 

RESOURCES CAPITAL ASSET RECOVERY, L.L.C., SERIES DD AND SERIES DR

 

 

 

 

 

 

 

By:

/s/ Scott S. Jennings

 

 

Name:

Scott S. Jennings

 

 

Title:

Director

 

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

 

 

ROSETON OP LLC

 

 

 

 

 

 

 

 

 

By:

/s/ Scott S. Jennings

 

 

Name:

Scott S. Jennings

 

 

Title:

Director

 

 

 

 

 

 

 

 

 

DANSKAMMER OP LLC

 

 

 

 

 

 

 

 

 

By:

/s/ Scott S. Jennings

 

 

Name:

Scott S. Jennings

 

 

Title:

Director

 

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

 

 

ROSETON OL LLC

 

 

 

 

 

By: Wilmington Trust Company, not in its individual capacity, but solely as
Independent Manager

 

 

 

 

 

By:

/s/ Mark H. Brzoska

 

 

Name:

Mark H. Brzoska

 

 

Title:

Financial Services Officer

 

 

 

 

 

 

 

 

 

DANSKAMMER OL LLC

 

 

 

 

 

By: Wilmington Trust Company, not in its individual capacity, but solely as
Independent Manager

 

 

 

 

 

By:

/s/ Mark H. Brzoska

 

 

Name:

Mark H. Brzoska

 

 

Title:

Financial Services Officer

 

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

 

 

U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, but solely as
successor indenture trustee under the Lease Indentures and successor pass
through trustee under the Pass Through Trust Agreement

 

 

 

 

 

By:

/s/ Wayne Miller

 

 

Name:

Wayne Miller

 

 

Title:

AVP

 

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

 

 

AEGON USA Investment Management, LLC

 

 

 

 

 

By:

/s/ James H. Rich, III

 

 

Name:

James H. Rich, III

 

 

Title:

Authorized Signatory

 

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

 

 

AVENUE INVESTMENTS, L.P.

 

 

 

 

 

By:

/s/ Sonia Gardner

 

 

Name:

Sonia Gardner

 

 

Title:

Member

 

 

 

 

 

 

 

AVENUE SPECIAL SITUATIONS FUND VI (MASTER), L.P.

 

 

 

 

 

 

 

By:

/s/ Sonia Gardner

 

 

Name:

Sonia Gardner

 

 

Title:

Member

 

 

 

 

 

 

 

AVENUE INTERNATIONAL MASTER, L.P.

 

 

 

 

 

 

 

By:

/s/ Sonia Gardner

 

 

Name:

Sonia Gardner

 

 

Title:

Director

 

 

 

 

 

 

 

AVENUE CDP-GLOBAL OPPORTUNITIES FUND, L.P.

 

 

 

 

 

 

 

By:

/s/ Sonia Gardner

 

 

Name:

Sonia Gardner

 

 

Title:

Member

 

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

 

 

OAKTREE HUNTINGTON INVESTMENT FUND, L.P.

 

 

 

By:

Oaktree Huntington Investment Fund GP, L.P.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Huntington Investment Fund GP Ltd.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Capital Management, L.P.

 

Its:

Director

 

 

 

 

By:

/s/ Kenneth Liang

 

Name:

Kenneth Liang

 

Title:

Managing Director

 

 

 

 

By:

/s/ Mark Rochelli

 

Name:

Mark Rochelli

 

Title:

Senior Vice President

 

 

 

 

 

 

 

OAKTREE OPPORTUNITIES FUND VIII, L.P.

 

 

 

By:

Oaktree Opportunities Fund VIII GP, L.P.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Opportunities Fund VIII GP Ltd.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Capital Management, L.P.

 

Its:

Director

 

 

 

 

By:

/s/ Kenneth Liang

 

Name:

Kenneth Liang

 

Title:

Managing Director

 

 

 

 

By:

/s/ Mark Rochelli

 

Name:

Mark Rochelli

 

Title:

Senior Vice President

 

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

 

 

OAKTREE OPPORTUNITIES FUND VIII (PARALLEL), L.P.

 

 

 

By:

Oaktree Opportunities Fund VIII GP, L.P.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Opportunities Fund VIII GP Ltd.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Capital Management, L.P.

 

Its:

Director

 

 

 

 

By:

/s/ Kenneth Liang

 

Name:

Kenneth Liang

 

Title:

Managing Director

 

 

 

 

By:

/s/ Mark Rochelli

 

Name:

Mark Rochelli

 

Title:

Senior Vice President

 

 

 

 

 

 

 

OAKTREE OPPORTUNITIES FUND VIII (PARALLEL 2), L.P.

 

 

 

By:

Oaktree Opportunities Fund VIII GP, L.P.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Opportunities Fund VIII GP Ltd.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Capital Management, L.P.

 

Its:

Director

 

 

 

 

By:

/s/ Kenneth Liang

 

Name:

Kenneth Liang

 

Title:

Managing Director

 

 

 

 

By:

/s/ Mark Rochelli

 

Name:

Mark Rochelli

 

Title:

Senior Vice President

 

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

 

 

OAKTREE VALUE OPPORTUNITIES FUND, L.P.

 

 

 

 

By:

Oaktree Value Opportunities Fund GP, L.P.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Value Opportunities Fund GP Ltd.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Capital Management, L.P.

 

Its:

Director

 

 

 

 

By:

/s/ Kenneth Liang

 

Name:

Kenneth Liang

 

Title:

Managing Director

 

 

 

 

By:

/s/ Mark Rochelli

 

Name:

Mark Rochelli

 

Title:

Senior Vice President

 

 

 

 

 

 

 

OAKTREE SENIOR LOAN FUND, L.P.

 

 

 

 

By:

Oaktree Senior Loan Fund GP, LP.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Fund GP II, L.P.

 

Its:

General Partner

 

 

 

 

By:

/s/ Regan Scott

 

Name:

Regan Scott

 

Title:

Authorized Signatory

 

 

 

 

By:

/s/ Desmund Shirazi

 

 

Name:

Desmund Shirazi

 

 

Title:

Authorized Signatory

 

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

 

 

OAKTREE CAPITAL MANAGEMENT, L.P., solely as agent and on behalf of certain funds
and accounts it manages

 

 

 

 

By:

/s/ Regan Scott

 

Name:

Regan Scott

 

Title:

Authorized Signatory

 

 

 

 

By:

/s/ Desmund Shirazi

 

Name:

Desmund Shirazi

 

Title:

Authorized Signatory

 

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

 

 

MARINER LDC

 

 

 

 

 

 

 

 

 

By:

/s/ Adele Kittredge Murray

 

 

Name:

Adele Kittredge Murray

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

 

 

CASPIAN CAPITAL PARTNERS, L.P.

 

 

 

 

 

 

 

 

 

By:

/s/ Adele Kittredge Murray

 

 

Name:

Adele Kittredge Murray

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

 

 

CASPIAN SELECT CREDIT MASTER FUND, LTD.

 

 

 

 

 

 

 

 

 

By:

/s/ Adele Kittredge Murray

 

 

Name:

Adele Kittredge Murray

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

 

 

CASPIAN ALPHA LONG CREDIT FUND, L.P.

 

 

 

 

 

 

 

 

 

By:

/s/ Adele Kittredge Murray

 

 

Name:

Adele Kittredge Murray

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

 

 

CASPIAN SOLITUDE MASTER FUND, L.P.

 

 

 

 

 

 

 

 

 

By:

/s/ Adele Kittredge Murray

 

 

Name:

Adele Kittredge Murray

 

 

Title:

Authorized Signatory

 

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

 

 

CASPIAN HLSC1, LLC

 

 

 

 

 

 

 

 

 

By:

/s/ Adele Kittredge Murray

 

 

Name:

Adele Kittredge Murray

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

 

 

SUPER CASPIAN CAYMAN FUND LIMITED

 

 

 

 

 

 

 

 

 

By:

/s/ Adele Kittredge Murray

 

 

Name:

Adele Kittredge Murray

 

 

Title:

Authorized Signatory

 

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

 

 

VENOR CAPITAL MASTER FUND LTD.

 

 

 

By:

Venor Capital Management LP

 

Its:

Investment Manager

 

 

 

 

 

 

 

 

By:

/s/ Michael J. Wartell

 

 

 

Name:

Michael J. Wartell

 

 

 

Title:

Co-Chief Investment Officer

 

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

 

 

FRANKLIN ADVISORS, INC.

 

 

 

 

 

 

 

By:

/s/ Edward Perks

 

 

Name:

Edward D. Perks

 

 

Title:

SVP-Portfolio Manager; Dir.

 

 

Core/Hybrid Portfolio Management

 

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

 

 

DO S1 LIMITED

 

 

 

 

 

 

 

By:

/s/ Kevin Jones

 

 

NAME:

KEVIN JONES

 

 

TITLE:

AUTHORISED SIGNATORY

 

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

 

 

CLAREN ROAD CREDIT MASTER FUND, LTD.

 

 

 

 

By:

/s/ Albert Marino

 

 

Name:

Albert Marino

 

 

Title:

Director

 

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

 

 

LOOMIS, SAYLES & COMPANY, L.P., as investment manager for each of one or more
discretionary accounts solely in its capacity as a holder of NGC Trust Capital
Income Securities,

 

By: Loomis, Sayles & Company, Incorporated,

 

Its General Partner

 

 

 

 

 

 

 

By:

/s/ Thomas H. Day

 

 

Name:

Thomas H. Day

 

 

Title:

Assistant General Counsel

 

 

 

 

 

 

 

Amended and Restated Settlement Agreement with respect to Dynegy Holdings, LLC,
et al.

 

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

 

AGREED AND ACKNOWLEDGED

 

(as to Sections II.e.(i)(6), II.e.(ii)(x), II.e.(iv), II.l.iii, and III.n):

 

 

 

WELLS FARGO BANK, N.A., not in its individual capacity, but solely as successor
indenture trustee under the Subordinated Notes Indenture

 

 

 

 

 

By:

/s/ James R. Lewis

 

 

Name:

James R. Lewis

 

 

Title:

Vice President

 

 

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

 

ANNEX A

 

AMENDED AND RESTATED PLAN SUPPORT AGREEMENT

 

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

 

Execution Version

 

AMENDED AND RESTATED PLAN SUPPORT AGREEMENT

 

This amended and restated plan support agreement (this “Agreement”), dated as of
May 30, 2012, is entered into by and among (i) Dynegy Inc. (“Dynegy”),
(ii) Dynegy Gas Investments, LLC (“DGIN”), (iii) Dynegy Coal Holdco, LLC
(“Dynegy Coal Holdco”), (iv) Dynegy Holdings, LLC (“DH”), (v) Dynegy Danskammer,
L.L.C. (“Dynegy Danskammer”), (vi) Dynegy Roseton, L.L.C. (“Dynegy Roseton”),
(vii) Dynegy Northeast Generation, Inc. (“DNE”), (viii) Hudson Power, L.L.C.
(“Hudson”; each of DH, Dynegy Danskammer, Dynegy Roseton, DNE and Hudson are
debtors and debtors in possession in the jointly administered chapter 11 cases
styled as In re Dynegy Holdings, LLC et al., Case No. 11-38111 (CGM), and are
collectively referred to herein as the “Debtors”), (ix) the undersigned,
beneficial owners (or advisors, nominees or investment managers for the
beneficial owner(s)) of a portion of the outstanding Senior Notes (as defined
below) issued by DH, solely in their capacities as holders of such Senior Notes
and not in any other capacity (the “Consenting Senior Noteholders”),
(x) Resources Capital Management Corporation (“RCM”), Resources Capital Asset
Recovery, L.L.C., Series DD and Series DR, Roseton OL LLC, Danskammer OL LLC,
Roseton OP LLC, and Danskammer OP LLC (collectively, the “PSEG Entities”),
(xi) the undersigned beneficial owners (or advisors, nominees or investment
managers for the beneficial owners(s)) of a portion of the Lease Certificates,
solely in their capacities as holders of such Lease Certificates and not in any
other capacity (the “Consenting Lease Certificate Holders”), (xii) DO S1 Limited
(“CQS”), (xiii) Loomis, Sayles & Company, L.P., solely in its capacity as a
holder of NGC Trust Capital Income Securities (“Loomis”), (xiv) Claren Road
Asset Credit Master Fund Ltd. (“Claren Road”, collectively with CQS and Loomis
and any other beneficial holder of NGC Trust Capital Income Securities (defined
below) who becomes a party hereto after the date hereof, the “Consenting Sub
Debt Holders” and, together with the Consenting Senior Noteholders and the PSEG
Entities, the “Creditor Parties”) (each of the entities in (i)-(xiv) above, a
“Party” and collectively, the “Parties”).

 

RECITALS

 

WHEREAS, on November 7, 2011 (the “Petition Date”), each of the Debtors filed a
voluntary petition for relief under chapter 11 of title 11 of the United States
Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the
Southern District of New York, Poughkeepsie Division (the “Bankruptcy Court”),
and each thereby commenced chapter 11 cases that are jointly administered under
Case No. 11-38111 (CGM) (the “Chapter 11 Cases”);

 

WHEREAS, on November 11, 2011, the Lease Trustee filed a motion with the
Bankruptcy Court seeking the appointment of an examiner pursuant to section
1104(c) of the Bankruptcy Code [Dkt. No. 48];

 

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

 

WHEREAS, on December 1, 2011, Dynegy and DH, as co-plan proponents, filed the
Chapter 11 Plan of Reorganization for Dynegy Holdings, LLC Proposed by Dynegy
Holdings, LLC and Dynegy Inc. [Dkt. No. 122]  and related disclosure statement
[Dkt. No. 123] with the Bankruptcy Court;

 

WHEREAS, (a) on December 29, 2011, the Bankruptcy Court entered an order (the
“Examiner Order”) [Dkt. No. 276] for the appointment of an examiner (the
“Examiner”), (b) on January 11, 2012, the United States Trustee for Region 2
appointed Susheel Kirpalani to serve as Examiner [Dkt. No. 308], and (c) on
January 12, 2012, the Bankruptcy Court entered an order approving the
appointment of Mr. Kirpalani as Examiner;

 

WHEREAS, on January 19, 2012, Dynegy and DH, as co-plan proponents, filed the
Amended Chapter 11 Plan of Reorganization for Dynegy Holdings, LLC Proposed by
Dynegy Holdings, LLC and Dynegy Inc. [Dkt. No. 343] and related disclosure
statement [Dkt. No. 344] with the Bankruptcy Court;

 

WHEREAS, on March 6, 2012, Dynegy and DH, as co-plan proponents, filed the
Second Amended Chapter 11 Plan of Reorganization for Dynegy Holdings, LLC
Proposed by Dynegy Holdings, LLC and Dynegy Inc. [Dkt. No. 473] (the “Existing
Plan”) and related disclosure statement [Dkt. No. 472] with the Bankruptcy
Court;

 

WHEREAS, on March 9, 2012, the Examiner issued his report setting forth his
assessment of various potential claims and causes of action arising from certain
prepetition transactions involving the Debtors and certain of their affiliates,
including the September 1, 2011 transfer of Dynegy Coal Holdco (the “Examiner
Report”) [Dkt. No. 490];

 

WHEREAS, on March 12, 2012, the Bankruptcy Court ordered the Debtors to
participate in mediation with certain of their creditor constituencies and other
parties in interest under the auspices of the Examiner;

 

WHEREAS, the Parties to this Agreement, as well as the Lease Trustee, the
Creditors’ Committee and certain other parties, engaged in numerous negotiation
sessions mediated by the Examiner, regarding (among other things) the settlement
ultimately embodied in the May 1 Settlement Agreement and modifications to the
Existing Plan, which led to an agreement regarding certain issues with respect
to a restructuring of DH;

 

WHEREAS, on May 1, 2012, Dynegy, DGIN, Dynegy Coal Holdco, the Debtors, the
Consenting Senior Noteholders, the PSEG Entities, and the Consenting Lease
Certificate Holders executed that certain Plan Support Agreement dated as of
May 1, 2012 (the “May 1 Plan Support Agreement”);

 

WHEREAS, subsequent to the execution of the May 1 Plan Support Agreement,
certain Parties to the May 1 Plan Support Agreement, as well as the Creditors’
Committee, engaged in additional negotiation sessions with the Consenting Sub
Debt Holders and the Subordinated Notes Indenture Trustee mediated by the
Examiner;

 

2

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

 

WHEREAS, as a result of the continuation of the extensive arm’s-length
negotiations and mediation process, simultaneously with the execution of this
Agreement, the Parties (in the case of the Consenting Lease Certificate Holders,
by and through the Lease Trustee, as successor trustee under the Lease
Indentures and Pass Through Trust Agreement on behalf of all of the Lease
Certificate Holders) have entered into an amended and restated settlement
agreement (the “Settlement Agreement”), subject to the approval of the
Bankruptcy Court, to settle all disputes, claims and causes of action
(i) between DH and Dynegy, and (ii) between and among the Parties, all as more
fully set forth in the Settlement Agreement;

 

WHEREAS, in order to implement the global resolution of all issues regarding
DH’s restructuring, each Party also desires to pursue and support an amended
plan of reorganization under chapter 11 of the Bankruptcy Code on the terms set
forth in this Agreement; and

 

WHEREAS, DH and Dynegy have agreed, subject to the terms and conditions of this
Agreement, to amend the Existing Plan in accordance with the terms set forth in
this Agreement, to file such amended plan with the Bankruptcy Court, and to use
their best efforts to have such amended plan confirmed by the Bankruptcy Court.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the recitals stated above, and the premises
and mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Party, intending to be legally bound, agrees as follows:

 

1.             Definitions.  As used in this Agreement and for purposes of this
Agreement only, the following terms have the following meanings; provided, that
other capitalized terms used but not otherwise defined in this Agreement shall
have the meanings ascribed to such terms in the Existing Plan:

 

“Ad Hoc Senior Noteholder Committee” means those Consenting Senior Noteholders
that are members of an ad hoc group of holders of Senior Notes.

 

“Agreement” has the meaning ascribed to it in the Preamble.

 

“Alternative Plan” has the meaning ascribed to it in Section 3.c.

 

“Ballot” means the ballot distributed with the Disclosure Statement for voting
on the Conforming Plan.

 

“Bankruptcy Code” has the meaning ascribed to it in the Recitals.

 

“Bankruptcy Court” has the meaning ascribed to it in the Recitals.

 

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure.

 

3

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

 

“Business Day” means any day other than Saturday, Sunday and any day that is a
legal holiday or a day on which banking institutions in New York, New York are
required or authorized by law or governmental action to close.

 

“Chapter 11 Cases” has the meaning ascribed to it in the Recitals.

 

“Claim” or “Claims”, as applicable, has the meaning set forth in section
101(5) of the Bankruptcy Code (and, for the avoidance of doubt, shall not
include any Equity Interests).

 

“Claren Road” has the meaning ascribed to it in the Preamble.

 

“Combination” has the meaning ascribed to it in Section 2.a.

 

“Combination Documentation” has the meaning ascribed to it in Section 2.a.

 

“Confirmation Order” has the meaning ascribed to it in Section 5.

 

“Conforming Plan” has the meaning ascribed to it in Section 2.a.

 

“Consenting Lease Certificate Holders” has the meaning ascribed in the Preamble.

 

“Consenting Senior Noteholders” has the meaning ascribed to it in the Preamble.

 

“Consenting Sub Debt Holders” has the meaning ascribed to it in the Preamble.

 

“Controlled Affiliate” means, with respect to any Creditor Party, any Person
that is directly, or indirectly through one or more intermediates, controlled by
such Creditor Party, which control relationship may arise through ownership of
securities, by management agreement or other contract, through a general
partner, limited partner or trustee relationship or otherwise; provided that the
term “Controlled Affiliate” shall exclude any of the foregoing Persons
(including any department, unit, group, desk, subsidiary, joint venture,
partnership or other entity) in which the Creditor Party or any department,
unit, group or subsidiary of the Creditor Party holds any interest, in each case
only if and to the extent the Person (department, unit, group, desk, subsidiary,
joint venture, partnership or other entity) does not engage in communications
with any Creditor Party regarding this Agreement, the Settlement Agreement, the
Chapter 11 Cases or matters directly related to any of the foregoing and the
investment or trading decisions of such Person (department, unit, group, desk,
subsidiary, joint venture, partnership or other entity) are not controlled or
directed by any Creditor Party; provided, that the proprietary trading
department (or any unit, group, desk, subsidiary, joint venture, partnership or
other entity that performs proprietary trading functions) of any Creditor Party
shall be a Controlled Affiliate.

 

“CQS” has the meaning ascribed to it in the Preamble.

 

“Creditor Parties” has the meaning ascribed to it in the Preamble.

 

“Creditor Professional Fee Claim” has the meaning ascribed to it in Section 2.a.

 

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“Creditors’ Committee” means the Official Committee of Creditors Holding
Unsecured Claims appointed in the Chapter 11 Cases.

 

“Danskammer/Roseton OL Independent Manager” has the meaning ascribed to it in
Section 33.

 

“Danskammer Lease Documents” means (a) the Participation Agreement, dated as of
May 1, 2001 (the “Danskammer Participation Agreement”), among Dynegy Danskammer,
Danskammer OL LLC, Wilmington Trust Company, not in its individual capacity
except as expressly provided therein but solely as Lessor Manager, Danskammer OP
LLC, The Chase Manhattan Bank, not in its individual capacity but solely as
Lease Indenture Trustee, and The Chase Manhattan Bank, not in its individual
capacity but solely as Pass Through Trustee, (b) the Facility Lease Agreement,
dated as of May 8, 2001, between Danskammer OL LLC, as Owner Lessor, and Dynegy
Danskammer, as Facility Lessee, pertaining to Units 3 and 4 of the Danskammer
Power Station in Newburgh, New York, and (c) the other “Operative Documents” as
defined in Appendix A to the Danskammer Participation Agreement.

 

“Danskammer Participation Agreement” has the meaning ascribed to it in the
definition of “Danskammer Lease Documents.”

 

“Debtors” has the meaning ascribed to it in the Preamble.

 

“Definitive Documents” has the meaning ascribed to it in Section 5.

 

“DGIN” has the meaning ascribed to it in the Preamble.

 

“DH” has the meaning ascribed to it in the Preamble.

 

“Disclosure Certificate” has the meaning ascribed to it in Section 11.a.

 

“Disclosure Statement” has the meaning ascribed to it in Section 5.

 

“Disclosure Statement Order” has the meaning ascribed to it in Section 5.

 

“DNE” has the meaning ascribed to it in the Preamble.

 

“Dynegy” has the meaning ascribed to it in the Preamble.

 

“Dynegy Administrative Claim” has the meaning ascribed to it in the Settlement
Agreement.

 

“Dynegy Danskammer” has the meaning ascribed to it in the Preamble.

 

“Dynegy Coal Holdco” has the meaning ascribed to it in the Preamble.

 

“Dynegy Roseton” has the meaning ascribed to it in the Preamble.

 

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“Equity Interests” means all shares of capital stock, beneficial, partnership or
membership interests, participations or other equivalents of a corporation,
partnership, limited liability company or equivalent entity, whether voting or
non-voting, and including all warrants, options, securities or other instruments
convertible into or exchangeable for any of the foregoing, or other rights to
purchase any of the foregoing.

 

“Examiner” has the meaning ascribed to it in the Recitals.

 

“Examiner Order” has the meaning ascribed to it in the Recitals.

 

“Examiner Report” has the meaning ascribed to it in the Recitals.

 

“Existing Plan” has the meaning ascribed to it in the Recitals.

 

“Guaranty Claim” has the meaning ascribed to it in the Settlement Agreement.

 

“Hudson” has the meaning ascribed to it in the Preamble.

 

“Lease Certificate Holders” means the holders of the Lease Certificates.

 

“Lease Certificates” means those certain pass-through trust certificates
evidencing fractional undivided interests in the pass through trust established
pursuant to the Pass Through Trust Agreement and which, among other things,
holds the outstanding notes issued by Roseton OL LLC and Danskammer OL LLC, as
owner lessors, under the Lease Indentures.

 

“Lease Documents” means the Danskammer Lease Documents and the Roseton Lease
Documents.

 

“Lease Indentures” means the Indenture of Trust, Mortgage, Assignment of Leases
and Rents and Security Agreement related to Roseton Units 1 and 2, dated as of
May 8, 2001, and the Indenture of Trust, Mortgage, Assignment of Leases and
Rents and Security Agreement related to Danskammer Units 3 and 4, dated as of
May 8, 2001.

 

“Lease Trustee” means U.S. Bank National Association, not in its individual
capacity but solely as successor indenture trustee under the Lease Indentures
and successor pass through trustee under the Pass Through Trust Agreement.

 

“Loomis” has the meaning ascribed to it in the Preamble.

 

“Majority of the Consenting Lease Certificate Holders” means the Consenting
Lease Certificate Holders holding a majority of the aggregate principal amount
of Lease Certificates held by all Consenting Lease Certificate Holders,
exclusive of any Consenting Lease Certificate Holder that has terminated its
obligations under this Agreement pursuant to Section 14 hereof.

 

“Majority of the Consenting Senior Noteholders” means the Consenting Senior
Noteholders (i) holding a majority of the aggregate principal amount of Senior
Notes held by all Consenting Senior

 

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Noteholders and (ii) constituting not less than two of the Consenting Senior
Noteholders, exclusive of any Consenting Senior Noteholder that has terminated
its obligations under this Agreement pursuant to Section 14 hereof.

 

“Majority of the Consenting Sub Debt Holders” means the Consenting Sub Debt
Holders (i) holding a majority of the aggregate principal amount of Subordinated
Notes Claims held by all Consenting Sub Debt Holders and (ii) constituting at
least two of the Consenting Sub Debt Holders, exclusive of any Consenting Sub
Debt Holder that has terminated or otherwise breached its obligations under this
Agreement.

 

“May 1 Plan Support Agreement” has the meaning ascribed to it in the Recitals.

 

“May 1 Settlement Agreement” means that certain Settlement Agreement dated as of
May 1, 2012, entered into by and among Dynegy, DGIN, Dynegy Coal Holdco, the
Debtors, the Consenting Senior Noteholders, the PSEG Entities, and the Lease
Trustee.

 

“NGC Trust” means the NGC Corporation Capital Trust I created under the Delaware
Business Trust Act pursuant to the NGC Trust Declaration for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the trust and investing the proceeds thereof in the
Subordinated Notes, and engaging in only those other activities necessary,
advisable or incidental thereto.

 

“NGC Trust Capital Income Securities” means those certain Series B 8.316%
Subordinated Capital Income Securities due 2027 in the initial aggregate
principal amount of $200,000,000, issued by the NGC Trust pursuant to the NGC
Trust Declaration.

 

“NGC Trust Capital Income Securities Guarantee” means that certain Capital
Securities Guarantee Agreement between DH (f/k/a NGC Corporation) and First
National Bank of Chicago, as Capital Securities Guarantee Trustee (as amended,
restated and supplemented through the Petition Date) for the benefit of the
holders of the NGC Trust Capital Income Securities.

 

“NGC Trust Common Securities” means those certain 8.316% Common Securities due
2027 in the initial principal amount of $6,200,000, issued by the NGC Trust
pursuant to the NGC Trust Declaration.

 

“NGC Trust Declaration” means the Declaration of Trust dated as of May 20, 1997,
which created the NGC Trust (as such Declaration of Trust was amended and
restated on May 28, 1997, and as thereafter amended, restated and supplemented
through the Petition Date).

 

“Noteholder RSA” means that certain Restructuring Support Agreement, dated
November 7, 2011, among Dynegy, DH and the Consenting Noteholders (as defined
therein), as amended from time to time thereto, and as amended and restated by
that certain Amended and Restated Restructuring Support Agreement, dated
December 26, 2011, among Dynegy, DH and the Consenting Noteholders (as defined
therein).

 

“Party” or “Parties” have the meanings ascribed to them in the Preamble.

 

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“Pass Through Trust Agreement” means the Roseton-Danskammer 2001-Series B Pass
Through Trust Agreement, dated as of May 1, 2001.

 

“Petition Date” has the meaning ascribed to it in the Recitals.

 

“Plan Effective Date” means the date on which all conditions to consummation of
the Conforming Plan have been satisfied (or waived, to the extent such
conditions can be waived pursuant to the terms of the Conforming Plan) and the
Conforming Plan becomes effective.

 

“Plan Proponents” has the meaning ascribed to it in Section 2.

 

“PSEG Entities” has the meaning ascribed to it in the Preamble.

 

“Qualified Marketmaker” means an entity that holds itself out to the public or
the applicable private markets as standing ready in the ordinary course of
business to purchase from customers and sell to customers Claims of the Debtors
(or enter with customers into long and short positions in Claims against the
Debtors), in its capacity as a deal or market maker in Claims against the
Debtors.

 

“Roseton Lease Documents” means, collectively, (a) the Participation Agreement,
dated as of May 1, 2001 (the “Roseton Participation Agreement”), among Dynegy
Roseton, Roseton OL LLC, Wilmington Trust Company, not in its individual
capacity except as expressly provided therein but solely as Lessor Manager,
Roseton OP LLC, The Chase Manhattan Bank, not in its individual capacity but
solely as Lease Indenture Trustee and The Chase Manhattan Bank, not in its
individual capacity but solely as Pass Through Trustee, (b) the Facility Lease
Agreement, dated as of May 8, 2001, between Roseton OL LLC, as Owner Lessor, and
Dynegy Roseton, L.L.C., as Facility Lessee, pertaining to Units 1 and 2 of the
Roseton Power Station in Newburgh, New York, and (c) the other “Operative
Documents” as defined in Appendix A to the Roseton Participation Agreement.

 

“Roseton Participation Agreement” has the meaning ascribed to it in the
definition of “Roseton Lease Documents.”

 

“Senior Notes” means the 8.750% Senior Notes due 2012, the 7.50% Senior
Unsecured Notes due 2015, the 8.375% Senior Unsecured Notes due 2016, the 7.125%
Senior Debentures due 2018, the 7.75% Senior Unsecured Notes due 2019, and the
7.625% Senior Debentures due 2026, in each case issued by DH under the Senior
Notes Indenture.

 

“Senior Notes Indenture” means that certain Indenture, dated as of September 26,
1996, restated as of March 23, 1998, and amended and restated as of March 14,
2001, between DH (f/k/a Dynegy Holdings Inc.) and Bank One Trust Company,
National Association, as Trustee (as amended, restated and supplemented through
the Petition Date).

 

“Senior Notes Indenture Trustee” means Wilmington Trust, National Association,
as indenture trustee under the Senior Notes Indenture.

 

“Settlement Agreement” has the meaning ascribed to it in the Recitals.

 

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“Settlement Effective Date” has the meaning ascribed to it in the Settlement
Agreement.

 

“Solicitation Materials” means the Disclosure Statement and other solicitation
materials in respect of the Conforming Plan as approved by the Bankruptcy Court
pursuant to Section 1125(b) of the Bankruptcy Code.

 

“Subordinated Notes” means those certain Series B 8.316% Subordinated Deferrable
Interest Debentures due 2027 in the initial aggregate principal amount of
$206,200,000, issued by DH under the Subordinated Notes Indenture.

 

“Subordinated Notes Claims” means all Claims against DH (and the Surviving
Entity, as applicable) arising under or based upon the Subordinated Notes
Indenture, Subordinated Notes, NGC Trust Capital Income Securities, NGC Trust
Common Securities or NGC Trust Capital Income Securities Guarantee,

 

“Subordinated Notes Indenture” means that certain Subordinated Debenture
Indenture between DH (f/k/a NGC Corporation) and First National Bank of Chicago,
as Debenture Trustee, dated as of May 28, 1997 (as amended, restated and
supplemented through the Petition Date).

 

“Subordinated Notes Indenture Trustee” means Wells Fargo, as successor indenture
trustee under the Subordinated Notes Indenture.

 

“Surviving Entity” has the meaning ascribed to it in Section 2.a.

 

“Transfer” has the meaning ascribed to it in Section 7.

 

“Warrant Agreement” means that certain Warrant Agreement, to be dated as of the
Plan Effective Date, governing the Warrants, which shall be in form and
substance reasonably acceptable to Dynegy, DH, the Creditors’ Committee, a
Majority of the Consenting Senior Noteholders and the Lease Trustee.

 

“Warrants” means the warrants to be issued pursuant to the Warrant Agreement
entitling holders thereof to purchase an aggregate of 13.5% of the fully-diluted
common shares of the Surviving Entity to be outstanding immediately following
the Plan Effective Date (subject to dilution by any options, restricted stock or
other equity interests issued as equity compensation to officers, employees or
directors of the Surviving Entity or its affiliates), for an exercise price
determined based on a net equity value of the Surviving Entity of $4 billion
(assuming that the Conforming Plan provides for a cash payment to unsecured
creditors of DH of not less than $200 million), and containing customary
anti-dilution adjustments.

 

“Wells Fargo” means Wells Fargo Bank, N.A.

 

2.                                      Agreement of Plan Proponents. Subject to
the terms and conditions of this Agreement, Dynegy and DH (the “Plan
Proponents”) each agrees to:

 

a.                                      amend the Existing Plan to effectuate
the following terms (such amended plan, in form and substance reasonably
acceptable to Dynegy, DH, the Creditors’

 

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Committee, a Majority of the Consenting Senior Noteholders and the Lease
Trustee, the “Conforming Plan”):

 

i.                  Combination of DH and Dynegy.  On or prior to the Plan
Effective Date, DH and Dynegy shall be merged or combined (the “Combination”),
(the entity surviving such combination being the “Surviving Entity”) pursuant to
documentation that is in form and substance reasonably acceptable to Dynegy, DH,
the Creditors’ Committee, a Majority of the Consenting Senior Noteholders, and
the Lease Trustee (the “Combination Documentation”).  By virtue of the
Combination, all DH equity interests issued and outstanding immediately prior to
the effective time of the Combination will be cancelled.

 

ii.               Board of Directors of Surviving Entity.  The Board of
Directors of the Surviving Entity will be selected by the holders of Allowed
General Unsecured Claims against DH who are not insiders of DH pursuant to a
process that shall be specified in the Conforming Plan; provided, that the
Conforming Plan will indicate that the current directors of Dynegy and DH shall
be eligible to be, but there shall be no obligation that they be, selected for
the Board of Directors of the Surviving Entity pursuant to sections
1123(a)(7) and 1129(a)(5) of the Bankruptcy Code.

 

iii.            Treatment of General Unsecured Claims.  The treatment of Allowed
General Unsecured Claims against DH (which shall include Subordinated Notes
Claims as set forth in subclause ix. below) under the Existing Plan shall be
amended to eliminate the issuance of the Plan Secured Notes, the Plan Cash
Payment and the Plan Preferred Stock, and provide that such holders of Allowed
General Unsecured Claims against DH will receive a Pro Rata Share of
(a) ninety-nine percent (99%) of the fully-diluted common shares of the
Surviving Entity to be outstanding immediately following the Plan Effective Date
(subject to dilution by any options, restricted stock or other Equity Interests
issued as equity compensation to officers, employees or directors of the
Surviving Entity or its affiliates and the Warrants), (b) any amounts to which
they may be entitled as a result of the sale of the Roseton and Danskammer
facilities contemplated by the Settlement Agreement, and (c) a cash payment of
not less than $200 million to be allocated and/or distributed to general
unsecured creditors as determined by Dynegy, DH, the Creditors’ Committee, a
Majority of the Consenting Senior Noteholders and the Lease Trustee.

 

iv.           Treatment of Equity Interests.  The holders of Equity Interests in
Dynegy, DH or the Surviving Entity shall not receive any distribution or retain
any interest or property under the Conforming Plan on account of such holder’s
Equity Interests.

 

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v.              Treatment of Dynegy Administrative Claim.  The Dynegy
Administrative Claim shall be treated as provided in Section II.a(ii) of the
Settlement Agreement.

 

vi.           Releases.  The Conforming Plan will include a full release of all
Parties and the Lease Trustee, including, among others, their respective
directors, officers, managers, agents, attorneys, advisors, accountants and
consultants, to the extent permitted by applicable law, which in the case of any
third-party releases shall be subject to customary carve-outs.

 

vii.        Creditor Professional Fee Claims.  Pursuant to the Conforming Plan,
all unpaid fees and expenses incurred pursuant to engagement letters disclosed
to DH, Dynegy and the Creditors’ Committee and, if no engagement letter is in
effect, all reasonable and documented unpaid fees and expenses of (x) the Lease
Trustee, its professionals and advisors and the professionals and advisors to
the Consenting Lease Certificate Holders, (y) the professionals and advisors of
the Ad Hoc Senior Noteholder Committee and each of the Consenting Senior
Noteholders and their advisors, and (z) the professionals and advisors to the
PSEG Entities, in each case, from and after the Settlement Effective Date
through the Plan Effective Date, to the extent not paid by Dynegy in accordance
with the Settlement Agreement, shall be treated as allowed administrative
expenses under the Conforming Plan and shall be paid in full, in cash, on the
Plan Effective Date (each, a “Creditor Professional Fee Claim”); provided, that
such fees and expenses incurred (other than pursuant to an engagement letter
described above) shall be submitted to the Debtors and the Creditors’ Committee
in the form of customary summary invoices of the relevant law firms and
institutions not less than fifteen (15) Business Days prior to the Plan
Effective Date (including a good faith estimate for fees and expenses
anticipated to be incurred through the Plan Effective Date) for review as to
reasonableness, and in the event of any dispute as to the reasonableness of such
submitted costs and expenses, the undisputed portion shall be paid by DH on the
Plan Effective Date, and the disputed portion shall not be paid but shall be
reserved pending resolution of such dispute, either by mutual agreement or by
order of the Bankruptcy Court in the event such dispute cannot be resolved by
agreement; provided, further that fees and expenses incurred pursuant to an
engagement letter described above shall be subject to the standard of review and
conditions set forth in the applicable engagement letter.  To the extent the
above provision of the Conforming Plan is not approved, each Party agrees to
support the application by the parties listed in clauses (x) through (z) above
for payment of such fees and expenses under section 503(b)(3)(D) of the
Bankruptcy Code or otherwise.  The Conforming Plan shall also provide for
payment to the Lease Trustee, the Senior Notes Indenture Trustee and the
Subordinated Notes Indenture Trustee of reasonable compensation and
reimbursement

 

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                        of reasonable out-of-pocket expenses, without further
court approval, for services provided by the Lease Trustee, Senior Notes
Indenture Trustee and the Subordinated Notes Indenture Trustee after the Plan
Effective Date in connection with making plan distributions or otherwise
effectuating the Conforming Plan or as provided under the Lease Indentures, the
Senior Notes Indenture or the Subordinated Notes Indenture.  For the avoidance
of doubt, nothing in this Section 2.a.vii. constitutes a waiver or modification
of any Party’s right to payment under Section II.e of the Settlement Agreement. 
The Parties agree that the Conforming Plan shall provide for the same relevant
provisions as the Existing Plan permitting payment by the Debtors of reasonable
fees and expenses of the Subordinated Notes Indenture Trustee and its advisors
and such provision shall not be amended without prior consent of the
Subordinated Notes Indenture Trustee.  Nothing herein shall be deemed to impair,
waive, discharge or negatively affect the Indenture Trustee Charging Lien (as
defined in the Existing Plan).

 

viii.     Registration Rights.  The Conforming Plan will provide for a
registration rights agreement, including a customary shelf registration, for the
benefit of any holder of Allowed General Unsecured Claims who would be,
immediately following the Plan Effective Date, a holder of 10% or more of the
common shares of the Surviving Entity, the terms of which shall be in form and
substance satisfactory to Dynegy, DH, a Majority of the Consenting Senior
Noteholders, a Majority of the Consenting Lease Certificate Holders and the
Creditors’ Committee.

 

ix.           Treatment of Subordinated Notes Claims.  The treatment of Allowed
Subordinated Notes Claims under the Existing Plan shall be changed to reflect
that the Conforming Plan will (i) provide Wells Fargo, as Subordinated Notes
Indenture Trustee, solely on behalf of the holders of the Subordinated Notes
Claims with an Allowed General Unsecured Claim in the amount of $55,000,000
(which Claim shall receive the treatment described in subclause iii. above)
against DH in exchange for and in full satisfaction of any and all Subordinated
Notes Claims, and (ii) provide for a full waiver of the right of subordination
that any claim holder might have with respect to such claim.  The Parties shall
include appropriate language in any proposed form of order confirming such plan
to reflect such waiver, including language providing that DH (or, as applicable,
the Surviving Entity) shall fully indemnify the Senior Notes Indenture Trustee,
to the extent required under the Senior Notes Indenture, for any liability and
shall reimburse, to the extent required under the Senior Notes Indenture, the
Senior Notes Indenture Trustee’s fees and expenses (including the fees and
expenses of its legal counsel) arising from or related to any claim asserted by
a holder of Senior Notes (that is not a Consenting Senior Noteholder) related to
the foregoing treatment.

 

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b.                                      file with the Bankruptcy Court the
Conforming Plan, the Disclosure Statement, and a motion seeking the Disclosure
Statement Order, and use commercially reasonable efforts to obtain approval of
the Disclosure Statement and entry of the Disclosure Statement Order by the
Bankruptcy Court, and confirmation and consummation of the Conforming Plan;

 

c.                                       not object to, or otherwise commence,
join with or support in any manner any proceeding to oppose, the Conforming Plan
or take any action to implement or otherwise support any other plan or proposal
that is inconsistent with the Conforming Plan or the terms of this Agreement, or
that would prevent, interfere with or unreasonably delay the consummation of the
Conforming Plan;

 

d.                                      support allowance of any Creditor
Professional Fee Claim (subject to the invoice review and dispute resolution
procedures set forth in Section 2.a.vii. of this Agreement);

 

e.                                       not withdraw the Conforming Plan or
amend or modify the Conforming Plan in any material manner except as permitted
under this Agreement and except as ordered by the Bankruptcy Court; and

 

f.                                        except as ordered by the Bankruptcy
Court, take no actions that are inconsistent with this Agreement or the
confirmation and consummation of the Conforming Plan; provided, that
notwithstanding anything to the contrary herein, nothing in this Agreement or
the Settlement Agreement shall require DH or any director, manager or officer of
DH, in such person’s capacity as a director, manager or officer of DH, to take
any action, or to refrain from taking any action, which is inconsistent with
such director’s, manager’s or officer’s fiduciary obligations under applicable
law.

 

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3.                                      Agreement of Creditor Parties.  Subject
to the terms and conditions of this Agreement, each Creditor Party (severally
and not jointly) agrees on its behalf and on behalf of its Controlled Affiliates
to (and, to the extent applicable, in the case of (x) each of the Consenting
Lease Certificate Holders, also agrees to direct the Lease Trustee and (y) each
of the Consenting Sub Debt Holders, also agrees to direct the Subordinated Notes
Indenture Trustee), do the following:

 

a.                                      (i) so long as its vote has been
properly solicited pursuant to sections 1125 and 1126 of the Bankruptcy Code,
timely vote all Claims, now or hereafter beneficially owned by such Creditor
Party or for which it now or hereafter serves as the nominee, investment
manager, trustee or advisor for beneficial holders thereof, to accept the
Conforming Plan in accordance with the applicable procedures set forth in the
Solicitation Materials, and timely return a duly executed Ballot in connection
therewith; (ii) support approval and confirmation of the Conforming Plan,
including the releases, exculpations and injunctions contained in the Conforming
Plan and any provision that provides for the cancellation of contractual
subordination provisions with respect to the Subordinated Notes in accordance
with Section 2.a.ix; and (iii) not make an election, if applicable, to “opt-out”
of any third party releases contained in the Conforming Plan;

 

b.                                      not withdraw or revoke its tender,
consent or vote with respect to the Conforming Plan and any Definitive
Documents, except as otherwise expressly permitted pursuant to this Agreement;
and

 

c.                                       not (i) oppose or object to the
Conforming Plan, the Disclosure Statement or other Definitive Documents, the
Settlement Agreement, any Creditor Professional Fee Claim, or the solicitation
or consummation of the Conforming Plan and the transactions contemplated by the
Definitive Documents or the Settlement Agreement, whether directly or
indirectly, (ii) join in or support any objection to the Conforming Plan,
Disclosure Statement or other Definitive Documents, to the Settlement Agreement,
to any Creditor Professional Fee Claim, or to the solicitation of the Conforming
Plan, (iii) initiate any legal proceedings that are inconsistent with or that
would delay, prevent, frustrate or impede the approval, confirmation or
consummation of the Disclosure Statement, the Conforming Plan or other
Definitive Documents, the Settlement Agreement or the transactions outlined
therein or in this Agreement, or otherwise commence any proceedings to oppose
the Conforming Plan, the Disclosure Statement or any of the other Definitive
Documents, or the Settlement Agreement, or take any other action that is barred
by this Agreement, including, but not limited to, any motion to appoint a
trustee in the Chapter 11 Cases; (iv) pursue any right or remedy under or
relating to the Senior Notes Indenture, the Senior Notes, the Lease Indentures,
the Lease Certificates, any of the Lease Documents, the Subordinated Notes
Claims, the Subordinated Notes Indenture, the Subordinated Notes, the NGC Trust
Declaration, the NGC Trust Capital Income Securities or the NGC Trust Capital
Income Securities Guarantee to the extent inconsistent with this Agreement, the
Settlement Agreement, the Conforming Plan or the other Definitive Documents;
(v) initiate, or have initiated on its behalf, any litigation or proceeding of
any kind with respect to the Senior Notes Indenture, the Senior Notes, the Lease
Indentures, the Lease Certificates, the

 

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Subordinated Notes Claims, any of the Lease Documents, the Subordinated Notes
Indenture, the Subordinated Notes, the NGC Trust Declaration, the NGC Trust
Capital Income Securities or the NGC Trust Capital Income Securities Guarantee,
to the extent inconsistent with this Agreement or the Settlement Agreement;
(vi) vote for, consent to, support or participate in the formulation of any
other restructuring or settlement of the Debtors’ claims, any other transaction
involving the Debtors or Dynegy, any of their affiliates or their respective
assets, any of their respective stock, or any plan of reorganization (with the
exception of the Conforming Plan) or liquidation under applicable bankruptcy or
insolvency laws, whether domestic or foreign, in respect of the Debtors or
Dynegy or their respective affiliates, except as otherwise expressly
contemplated pursuant to this Agreement or the Settlement Agreement;
(vii) directly or indirectly seek, solicit, support, formulate, entertain or
encourage discussions, or enter into any agreements relating to, any
restructuring, plan of reorganization, proposal or offer of dissolution, winding
up, liquidation, reorganization, merger, transaction, sale, disposition or
restructuring of the Debtors or Dynegy or their respective affiliates (or any of
their assets or stock) other than the Conforming Plan, the Settlement Agreement
or as otherwise set forth in this Agreement (any such plan or other action as
described in clauses (vi) and (vii) immediately above, an “Alternative Plan”);
(viii) engage in or otherwise participate in any negotiations regarding any
Alternative Plan, enter into any letter of intent, memorandum of understanding,
agreement in principle or other agreement relating to any Alternative Plan;
(ix) solicit, encourage, or direct any Person, including, without limitation the
Lease Trustee, the Senior Notes Indenture Trustee or the Subordinated Notes
Indenture Trustee or the trustee of the NGC Trust, to undertake any action set
forth in clauses (i) through (viii) of this subsection (c); or (x) permit any of
its, or its Controlled Affiliates, officers, directors, managers, employees,
partners, representatives and agents to undertake any action set forth in
clauses (i) through (ix) of this subsection (c).

 

Notwithstanding anything to the contrary in this Section 3, the Consenting Sub
Debt Holders shall not be required to pay any out-of-pocket fees and expenses
related to their obligations in this Section 3 and shall not be required to
provide any indemnity to the Subordinated Notes Indenture Trustee in connection
herewith.

 

4.                                      Appearance in Chapter 11 Cases.  Nothing
in this Agreement shall be construed to prohibit any Party, or its officers or
representatives, from appearing as a party-in-interest in any matter to be
adjudicated in the Chapter 11 Cases if such appearance and the positions
advocated in connection therewith are (i) consistent with this Agreement and the
Settlement Agreement or (ii) for the purposes of contesting whether any matter,
fact or thing, is a breach of, or inconsistent with, this Agreement and the
Settlement Agreement, and are not for the purpose of, and could not reasonably
be expected to have the effect of, hindering, delaying or preventing the
consummation of the transactions contemplated in this Agreement and the
Settlement Agreement.  This Agreement shall not, and shall not be deemed to,
impair, prohibit, limit or restrict any Party, its officers, directors,
advisors, agents, attorneys or other representatives from engaging in
discussions (or asserting any position of any kind or character in such
discussions) with any person; provided, that such discussions do not otherwise
breach the terms of the Conforming Plan, the Settlement Agreement or this
Agreement.

 

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5.                                      Definitive Documents.  Each of the
Parties agrees to negotiate in good faith the form of the following documents
(collectively, the “Definitive Documents”): (a) the Conforming Plan, and any
appendices, amendments, modifications, supplements, exhibits and schedules
relating thereto; (b) the disclosure statement in connection with the Conforming
Plan, and any appendices, amendments, modifications, supplements, exhibits and
schedules relating thereto (the “Disclosure Statement”); (c) the order to be
entered by the Bankruptcy Court (i) approving the Disclosure Statement as
containing adequate information required under section 1125 of the Bankruptcy
Code, and (ii) authorizing the use of the Disclosure Statement for soliciting
votes on the Conforming Plan (the “Disclosure Statement Order”); (d) the order
of the Bankruptcy Court confirming the Conforming Plan (the “Confirmation
Order”); (e) the Combination Documentation; and (f) the Warrant Agreement, each
of which shall be consistent with this Agreement in all material respects and
shall otherwise be in form and substance reasonably acceptable to Dynegy, DH,
the Creditors’ Committee, a Majority of the Consenting Senior Noteholders and
the Lease Trustee.

 

6.                                      Acknowledgements.  Each Party
acknowledges that (a) no securities of either Dynegy or DH are being offered or
sold hereby and this Agreement neither constitutes an offer to sell nor a
solicitation of an offer to buy any securities of Dynegy, DH or any of their
affiliates, and (b) this Agreement is not, and shall not be deemed to be, a
solicitation of a vote for the acceptance of the Conforming Plan pursuant to
section 1125 of the Bankruptcy Code.

 

7.                                      Limitations on Transfers of Claims. 
Each Creditor Party agrees that, prior to the termination of this Agreement, it
shall not (a) sell, transfer, assign, pledge, convey, hypothecate, grant a
participation interest in, or otherwise dispose of, directly or indirectly, its
right, title, or interest in respect of any of such Creditor Party’s interest in
its applicable Claim(s) in whole or in part (including any voting rights
associated with such Claims), or (b) grant any proxies, deposit any of such
Creditor Party’s interests in the applicable Claim(s) into a voting trust, or
enter into a voting agreement with respect to any such interest (collectively,
the actions described in clauses (a) and (b), a “Transfer”), unless such
Transfer is to another Creditor Party that is party to this Agreement or any
other entity that first agrees in an enforceable writing to be bound by the
terms of this Agreement by executing and delivering to the Plan Proponents and
the Creditors’ Committee a joinder to this Agreement substantially in the form
attached hereto as Exhibit A or such alternative form agreed to by Dynegy and DH
(each such transferee becoming upon the Transfer a Creditor Party hereunder). 
With respect to Claims held by the relevant transferee upon consummation of a
Transfer, such transferee is deemed to make all of the representations and
warranties of a Creditor Party set forth in Section 11.a. of this Agreement. 
Upon compliance with the foregoing, the transferor shall be deemed to relinquish
its rights (and be released from its obligations) under this Agreement to the
extent of such transferred rights and obligations.  Any Transfer made in
violation of this Agreement shall be deemed null and void and of no force or
effect, regardless of any prior notice provided to the Plan Proponents, and
shall not create any obligation or liability of the Plan Proponents to the
purported transferee (it being understood that the putative transferor shall
continue to be bound by the terms and conditions set forth in this Agreement). 
In no event shall this Agreement impose on the Creditor Parties an obligation to
disclose the price for which any Creditor Party has disposed of any Claim. 
Notwithstanding the foregoing, a Qualified Marketmaker that acquires any of the
Claims subject to this Agreement with the purpose and intent of acting as a
Qualified Marketmaker for

 

16

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such Claims shall not be required to execute a joinder to this Agreement or
otherwise agree to be bound by the terms and conditions set forth herein if such
Qualified Marketmaker sells or assigns such Claims within ten (10) Business Days
of its acquisition and the purchaser or assignee of such Claims from the
Qualified Marketmaker is a Creditor Party that is party to this Agreement or any
other entity that first agrees in an enforceable writing to be bound by the
terms of this Agreement by executing and delivering to the Plan Proponents a
joinder to this Agreement substantially in the form attached hereto as Exhibit A
or such alternative form agreed to by Dynegy and DH, but shall agree to be so
bound (and shall be deemed to have so agreed) if such conditions are not
satisfied.

 

8.                                      Further Acquisition of Claims.  This
Agreement shall in no way be construed to preclude any Creditor Party or any of
its affiliates from acquiring additional Claims.  Any such additional Claims
shall automatically be subject to the terms of this Agreement.  If at any time
requested by the Plan Proponents, each Creditor Party shall promptly (and, in no
event later than two (2) Business Days after such request) inform the Plan
Proponents and the Creditors’ Committee of the aggregate principal amount of
Claims for which, as of the date of such request, it is the legal owner,
beneficial owner and/or investment advisor or manager for the legal or
beneficial owner.  In no event shall this Agreement impose on any Creditor Party
an obligation to disclose the price paid for any Claims.

 

9.                                      Cooperation and Support.  The Parties
shall cooperate with each other in good faith and shall coordinate their
activities (to the extent possible and subject to the terms of this Agreement)
in respect of the consummation of the transactions contemplated by this
Agreement.  Furthermore, subject to the terms of this Agreement, each of the
Parties shall use its commercially reasonable efforts to (a) support and
complete all transactions contemplated hereby, including, without limitation,
taking all steps necessary and desirable to (1) file the Conforming Plan and
Disclosure Statement with the Bankruptcy Court on or prior to June 8, 2012,
(2) have the Bankruptcy Court enter the Disclosure Statement Order on or prior
to July 20, 2012, (3) have the Bankruptcy Court enter the Confirmation Order on
or prior to September 10, 2012, (4) have the Plan Effective Date occur on or
prior to October 1, 2012, and (5) have the Bankruptcy Court enter the order
approving the Settlement Agreement and cause all other conditions precedent to
the Settlement Effective Date to be satisfied or waived prior June 29, 2012;
(b) take any and all necessary and appropriate actions in furtherance of the
transactions contemplated hereby, including (1) obtaining any and all required
governmental and regulatory approvals, including, without limitation, obtaining
any required approvals pursuant to Section 203 of the Federal Power Act, as
amended, codified at 16 U.S.C. § 824 et. seq. and the implementing regulations
thereunder, and any similar state law, and (2) making and filing any and all
required regulatory filings; and (c) refrain from taking any action inconsistent
with this Agreement or the Settlement Agreement.  Counsel to each of the Plan
Proponents and each of the Creditor Parties shall consult in good faith to
ensure that all Definitive Documents are consistent in all material respects
with this Agreement and the Settlement Agreement.  Notwithstanding the
requirements of this Section 9, the Consenting Sub Debt Holders shall not be
required to pay any out-of-pocket fees and expenses related to their obligations
herein, and shall not be required to provide any indemnity to the Subordinated
Notes Indenture Trustee in connection herewith.

 

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10.                               Effectiveness of this Agreement.  This
Agreement shall become effective immediately upon execution and delivery of this
Agreement by all Parties hereto.

 

11.                               Representations of the Parties.

 

a.                                      The Creditor Parties’ Representations
and Warranties.  To induce each other Party to enter into and perform its
obligations under this Agreement, each Creditor Party, severally but not
jointly, represents, warrants and acknowledges as follows:

 

i.                  Authority. (A) The Creditor Party is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, and has all the requisite corporate, partnership or other power
and authority to execute and deliver this Agreement and the other documents and
instruments contemplated hereby to which such Creditor Party is contemplated to
be a party and perform its obligations under this Agreement and the other
documents and instruments contemplated hereby to which it is contemplated to be
a party, and to consummate the transactions contemplated herein and therein;
(B) the execution, delivery and performance by the Creditor Party of this
Agreement and the other documents and instruments contemplated hereby to which
such Creditor Party is contemplated to be a party and the consummation of the
transactions contemplated herein and therein have been duly authorized by all
necessary action (corporate, partnership, limited liability company or
otherwise) on the part of the Creditor Party and no other action or proceedings
on the part of the Creditor Parties are necessary to authorize and approve this
Agreement or the other documents and instruments contemplated hereby to which
such Creditor Party is contemplated to be a party or any of the transactions
contemplated herein or therein; and (C) solely with respect to the Consenting
Lease Certificate Holders, such Consenting Lease Certificate Holders (i) hold,
in the aggregate, a majority of the fractional undivided interests evidenced by
the Lease Certificates, and (ii) have directed the Lease Trustee to execute and
deliver the Settlement Agreement and the other documents and instruments
contemplated thereby, and to thereby bind all of the Lease Certificate Holders,
including the Consenting Lease Certificate Holders, to the terms of the
Settlement Agreement.

 

ii.               Ownership.  Each Creditor Party is the legal owner, beneficial
owner and/or the investment advisor or manager for the legal or beneficial owner
of a Claim arising out of or relating to the Senior Notes, the Lease
Certificates, the Lease Documents, the Subordinated Notes, the NGC Trust Capital
Income Securities, the NGC Trust Capital Income Securities Guarantee and/or
other debt obligations owed by the Debtors.

 

iii.            Validity.  This Agreement has been duly executed and delivered
by the Creditor Party and constitutes the legal, valid and binding agreement of

 

18

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the Creditor Party, enforceable against the Creditor Party in accordance with
its terms.

 

iv.           No Conflict.  The execution, delivery and performance by the
Creditor Party (when such performance is due) of this Agreement does not and
shall not (A) subject to the actions, consents and filings referred to in clause
v below, violate any provision of law, rule or regulation applicable to it or,
in the case of an entity, any of its subsidiaries or its or their certificates
of incorporation or bylaws or other organizational documents, or (B) 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, where
applicable, any of its subsidiaries is a party.

 

v.              Authorization of Governmental Authorities and Creditors.  No
action by (including any authorization, consent or approval), in respect of, or
filing with, any governmental authority or regulatory body, except such filing
as may be necessary and/or required for disclosure by the Securities and
Exchange Commission or pursuant to state securities or “blue sky” laws, is
required for, or in connection with, the valid and lawful authorization,
execution, delivery and performance by the Creditor Party pursuant to this
Agreement; provided, that implementation and consummation of the transactions
contemplated herein may be subject to receipt of regulatory approvals pursuant
to the Federal Power Act or similar state law.

 

vi.           No Reliance.  The Creditor Party (A) is a sophisticated party with
respect to the subject matter of this Agreement, (B) has been represented and
advised by legal counsel in connection with this Agreement, (C) has adequate
information concerning the matters that are the subject of this Agreement, and
(D) has independently and without reliance upon any other Party hereto or any of
their affiliates, or any officer, employee, agent or representative thereof, and
based on such information as the Creditor Party has deemed appropriate, made its
own analysis and decision to enter into this Agreement, except that the Creditor
Party has relied upon each other Party’s express representations, warranties and
covenants in this Agreement, and the Creditor Party acknowledges that it has
entered into this Agreement voluntarily and of its own choice and not under
coercion or duress.

 

vii.        Title.  As of the date hereof, the Creditor Party is the legal
owner, beneficial owner and/or the investment advisor or manager for the legal
or beneficial owner of the Claims in the aggregate principal amount set forth in
the disclosure certificate which shall be provided to DH and Dynegy within three
(3) Business Days of the execution of the Settlement Agreement (the “Disclosure
Certificate”) (and in the case of a nominee, it has due and proper authorization
to act on behalf of, and to

 

19

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bind, the beneficial owner of such Claims); provided, that the information
contained in the Disclosure Certificate shall be maintained as confidential by
DH, Dynegy and their financial advisors and legal counsel, except to the extent
otherwise required by law or any rule or regulation of any exchange or
regulatory authority; and provided further that, subject to Section 26 of this
Agreement, DH and Dynegy may disclose the aggregate of all Claims held by the
Creditor Parties.  The Creditor Party’s interest in the Claim is free and clear
of any pledge, lien, security interest, charge, claim, equity, option, warrant,
proxy, voting restriction, right of first refusal or other limitation on
disposition or encumbrances of any kind, that would adversely affect in any way
the Creditor Party’s performance of its obligations contained in the Settlement
Agreement at the time such obligations are required to be performed.  Any
Creditor Party that provided a Disclosure Certificate in connection with the
May 1 Settlement Agreement and does not provide another Disclosure Certificate
in connection herewith, will be deemed to represent the continued accuracy as of
the date hereof of such previous Disclosure Certificate.

 

b.                                      Debtors’ Representations and
Warranties.  To induce each other Party to enter into and perform its
obligations under this Agreement, each Debtor hereby represents, warrants and
acknowledges as follows:

 

i.                  Authority.  Subject to any Bankruptcy Court approval that
may be required, (A) each of the Debtors is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization and has
all the requisite corporate, partnership and limited liability company or other
the power and authority to execute and deliver this Agreement and the other
documents and instruments contemplated hereby to which the Debtors are
contemplated to be parties and perform their obligations under this Agreement
and the other documents and instruments contemplated hereby to which they are
contemplated to be parties, and to consummate the transactions contemplated
herein and therein, and (B) the execution, delivery and performance by such
Debtors under this Agreement and the other documents and instruments
contemplated hereby to which each such Debtor is contemplated to be a party and
the consummation of the transactions contemplated herein and therein, have been
duly authorized by all necessary action on the part of such Debtor, and no other
actions or proceedings on the part of such Debtor are necessary to authorize and
approve this Agreement.

 

ii.               Validity.  Subject to any Bankruptcy Court approval that may
be required, this Agreement has been duly executed and delivered by the Debtors
and constitutes the legal, valid and binding agreement of the Debtors,
enforceable against the Debtors in accordance with its terms.

 

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iii.            No Conflict.  Subject to any Bankruptcy Court approval that may
be required, the execution, delivery and performance by the Debtors (when such
performance is due) of this Agreement does not and shall not (A) subject to the
actions, consents and filings referred to in clause iv below, violate any
provision of law, rule or regulation applicable to the Debtors or any of their
subsidiaries or the Debtors’ or their subsidiaries’ certificates of
incorporation or bylaws or other organizational documents, or (B conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under any material contractual obligations to which it or any of its
subsidiaries is a party.

 

iv.           Authorization of Governmental Authorities.  No action by
(including any authorization, consent or approval), in respect of, or filing
with, any governmental authority or regulatory body, except such filing as may
be necessary and/or required for disclosure by the Securities and Exchange
Commission or pursuant to state securities or “blue sky” laws, and any
Bankruptcy Court approval that may be required for the Debtors’ authority to
enter into and implement this Agreement, is required for, or in connection with,
the valid and lawful authorization, execution, delivery and performance by the
Debtors of this Agreement; provided that, implementation and consummation of the
transactions contemplated herein may be subject to receipt of regulatory
approvals pursuant to the Federal Power Act or similar state law.

 

v.              No Reliance.  Each of the Debtors (A) is a sophisticated party
with respect to the matters that are the subject of this Agreement, (B) has had
the opportunity to be represented and advised by legal counsel in connection
with this Agreement, (C) has adequate information concerning the matters that
are the subject of this Agreement, and (D) has independently and without
reliance upon any other Party hereto, or any of their affiliates, or any
officer, employee, agent or representative thereof, and based on such
information as such Debtor has deemed appropriate, made its own analysis and
decision to enter into this Agreement, except that the Debtors have relied upon
each other Party’s express representations, warranties and covenants in this
Agreement, which each of the Debtors enters, or as to which each Debtor
acknowledges and agrees, voluntarily and of its own choice and not under
coercion or duress.

 

c.                                       Representations and Warranties of
Dynegy, DGIN and Dynegy Coal Holdco.  To induce each other Party to enter into
and perform its obligations under this Agreement, each of Dynegy, DGIN and
Dynegy Coal Holdco hereby represents, warrants and acknowledges as follows:

 

i.                  Authority.  (A) each of Dynegy, DGIN and Dynegy Coal Holdco
is duly organized, validly existing and in good standing under the laws of the

 

21

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jurisdiction of its organization, and has all the requisite corporate,
partnership, limited liability company or other power and authority to execute
and deliver this Agreement and the other documents and instruments contemplated
hereby to which it is contemplated to be a party and perform its obligations
under this Agreement and the other documents and instruments contemplated hereby
to which it is contemplated to be a party, and to consummate the transactions
contemplated herein and therein, and (B) the execution, delivery and performance
by Dynegy, DGIN and Dynegy Coal Holdco under this Agreement and the other
documents and instruments contemplated hereby to which each of Dynegy, DGIN and
Dynegy Coal Holdco is contemplated to be a party, and the consummation of the
transactions contemplated herein and therein have been duly authorized by all
necessary action (corporate, partnership, limited liability company or
otherwise) on the party of Dynegy, DGIN and Dynegy Coal Holdco, and no other
action or proceedings on the part of Dynegy, DGIN and Dynegy Coal Holdco are
necessary to authorize and approve this Agreement or the other documents and
instruments contemplated hereby to which Dynegy, DGIN and Dynegy Coal Holdco are
contemplated to be parties or any of the transactions contemplated herein or
therein.

 

ii.               Validity.  This Agreement has been duly executed and delivered
by each of Dynegy, DGIN and Dynegy Coal Holdco and constitutes the legal, valid
and binding agreement of each of Dynegy, DGIN and Dynegy Coal Holdco,
enforceable against Dynegy, DGIN and Dynegy Coal Holdco in accordance with its
terms.

 

iii.            No Conflict.  The execution, delivery and performance by Dynegy,
DGIN and Dynegy Coal Holdco (when such performance is due) of this Agreement
does not and shall not (A) subject to the actions, consents and filings referred
to in clause iv below, violate any provision of law, rule or regulation
applicable to it or any of its subsidiaries or its or their certificates of
incorporation or bylaws or other organizational documents, or (B) conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under any material contractual obligations to which it or any of its
subsidiaries is a party.

 

iv.           Authorization of Governmental Authorities.  No action by
(including any authorization, consent or approval), in respect of, or filing
with, any governmental authority or regulatory body, except such filing as may
be necessary and/or required for disclosure by the Securities and Exchange
Commission or pursuant to state securities or “blue sky” laws, is required for,
or in connection with, the valid and lawful authorization, execution, delivery
and performance by Dynegy, DGIN and Dynegy Coal Holdco of this Agreement.

 

22

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v.              No Reliance.  Each of Dynegy, DGIN and Dynegy Coal Holdco A) is
a sophisticated party with respect to the subject matter of this Agreement,
(B) has been represented and advised by legal counsel in connection with this
Agreement, (C) has adequate information concerning the matters that are the
subject of this Agreement, and (D) has independently and without reliance upon
any other Party hereto or any of their affiliates, or any officer, employee,
agent or representative thereof, and based on such information as it has deemed
appropriate, made its own analysis and decision to enter into this Agreement,
except that each of Dynegy, DGIN and Dynegy Coal Holdco has relied upon each
other Party’s express representations, warranties and covenants in this
Agreement, which it enters, and each of Dynegy, DGIN and Dynegy Coal Holdco
acknowledges that it has entered into this Agreement voluntarily and of its own
choice and not under coercion or duress.

 

12.                               Termination.  This Agreement and the
obligations of the Parties hereunder shall terminate on the Plan Effective Date
or the effective date of any other bankruptcy plan for DH, if not previously
terminated pursuant to this Section 12.  This Agreement and the obligations of
the Parties hereunder may be terminated (a) as to all parties and all
obligations by mutual written agreement of each of Dynegy, DH, a Majority of the
Consenting Senior Noteholders, a Majority of the Consenting Lease Certificate
Holders, a Majority of the Consenting Sub Debt Holders, and RCM, or (b) by any
of (i) Dynegy, (ii) DH, (iii) a Majority of the Consenting Senior Noteholders,
(iv) a Majority of the Consenting Lease Certificate Holders, or (v) prior to the
date that the Approval Order has been entered, a Majority of the Consenting Sub
Debt Holders, upon the occurrence of any of the following events; provided,
further, that with respect to subparagraph 12.i. below, the obligations of the
Parties under this Agreement may not be terminated by the breaching Party:

 

a.              termination of the Settlement Agreement;

 

b.              the Conforming Plan and Disclosure Statement shall not have been
filed with the Bankruptcy Court on or prior to June 8, 2012;

 

c.               the Settlement Effective Date shall not have occurred prior to
June 29, 2012;

 

d.              the Bankruptcy Court shall have failed to enter the Disclosure
Statement Order on or prior July 20, 2012;

 

e.               the Bankruptcy Court shall have failed to enter the
Confirmation Order on or prior to September 10, 2012;

 

f.                the Plan Effective Date shall not have occurred by October 1,
2012;

 

g.               any court of competent jurisdiction or other competent
governmental or regulatory authority shall have issued an order making it
illegal or otherwise restricting, preventing or prohibiting the transactions
contemplated by the

 

23

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Conforming Plan in a manner that cannot reasonably be remedied by Dynegy, the
Debtors or the Creditor Parties;

 

h.              the appointment of a trustee, receiver, examiner with expanded
powers, responsible person or responsible officer in any bankruptcy case of
Dynegy; or

 

i.                  the occurrence of a material breach of this Agreement by any
of the Parties of any of its obligations under this Agreement, and any such
breach is either unable to be cured or is not cured within five (5) Business
Days after receipt of written notice from any non-breaching Party delivered to
all other Parties.

 

13.                               Effect of Termination.  Upon termination of
this Agreement in accordance with Section 12 hereof, all obligations of the
Parties under this Agreement shall terminate and shall be of no further force
and effect except as otherwise provided herein; provided, that any claim for
breach of this Agreement shall survive termination and all rights and remedies
with respect to such claim shall be neither waived nor prejudiced in any way by
termination of this Agreement.  For the avoidance of doubt, a termination of
this Agreement, in and of itself, shall not affect the Settlement Agreement.

 

14.                               Individual Withdrawal Rights.  In addition to
the termination rights set forth in Section 12, in the event that (i) the
Conforming Plan and Disclosure Statement shall not have been filed with the
Bankruptcy Court on or prior to June 8, 2012, (ii) the Settlement Effective Date
shall not have occurred prior to June 29, 2012, (iii) the Bankruptcy Court shall
have failed to enter the Disclosure Statement Order on or prior July 20, 2012,
(iv) the Bankruptcy Court shall have failed to enter the Confirmation Order on
or prior to September 10, 2012, or (v) the Plan Effective Date shall not have
occurred by October 1, 2012, any Consenting Senior Noteholder or Consenting
Lease Certificate Holder or, prior to entry of the Approval Order, a Consenting
Sub Debt Holder may, in its individual capacity, terminate its obligations under
this Agreement upon two (2) Business Days’ prior notice to DH, Dynegy, the
Creditors’ Committee and the other Creditor Parties; provided, however, that any
withdrawal by any such Consenting Senior Noteholder, Consenting Lease
Certificate Holder or Consenting Sub Debt Holder pursuant to this Section 14
shall not affect the obligations of any other Party under this Agreement unless
this Agreement is terminated pursuant to Section 12.

 

15.                               Termination of Noteholder RSA.  The Noteholder
RSA has been terminated as of May 1, 2012 and the parties thereto have no
further obligations thereunder.

 

16.                               Fiduciary Duties of Creditors’ Committee
Members.  Notwithstanding anything to the contrary herein, if any Creditor Party
serves on the Creditors’ Committee, then the terms of this Agreement shall not
be construed to limit such Creditor Party’s exercise of fiduciary duties in its
role as a member of the Creditors’ Committee, and any exercise of such fiduciary
duties shall not be deemed to constitute a breach of this Agreement; provided,
that service as a member of the Creditors’ Committee shall not relieve such
Creditor Party in its non-committee capacity of its obligations under this
Agreement

 

17.                               Fiduciary Duties of Debtors.  The Debtors are
not seeking Bankruptcy Court approval of the terms of this Agreement; provided,
that this Agreement shall only be binding on

 

24

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the Debtors to the extent permissible in the absence of Bankruptcy Court
approval.  The enforceability of this Agreement with respect to the Debtors
shall have no effect on the enforceability of this Agreement against all other
Parties hereto.

 

18.                               Governing Law; Jurisdiction.

 

a.                                      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.

 

b.                                      By its execution and delivery of this
Agreement, each of the Parties hereto 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, shall be brought in the Bankruptcy Court.  By execution and delivery
of this Agreement, each of the Parties irrevocably accepts and submits itself to
the exclusive jurisdiction of the Bankruptcy 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.

 

c.                                       In the event the Bankruptcy Court does
not have or refuses to exercise jurisdiction with respect to this Agreement and
any disputes arising therefrom, any legal action, suit, or proceeding against
the Parties (or any of them) 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 or courts of
the State of New York located in the Borough of Manhattan, City of New York, and
by execution and delivery of this Agreement, each Party irrevocably accepts and
submits itself to the exclusive jurisdiction of the Bankruptcy Court and those
courts.

 

19.                               No Admission of Liability.  Each Party enters
into this Agreement without admitting any liability or conceding any allegations
not already expressly admitted.  This Agreement and its provisions shall not be
offered or received in evidence in any action or proceeding as an admission or
concession of liability or wrongdoing of any nature on the part of any Party
except that it may be offered and received in evidence solely to enforce this
Agreement.

 

20.                               Third-Party Beneficiaries.  Nothing in this
Agreement is intended to benefit or create any right or cause of action in or on
behalf of any person other than the Parties hereto unless expressly set forth
herein.  For the avoidance of doubt, the Lease Trustee is an intended
third-party beneficiary of Sections 2.a., 5, 21 and 23 hereof, subject to
Section 27 of this Agreement, the Creditors’ Committee is an intended
third-party beneficiary of Sections 2.a., 5, 7, 8, 21, 23, 27 and 30 hereof, and
the Subordinated Notes Indenture Trustee is an intended third-party beneficiary
of Section 2.a.ix. hereof.

 

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21.                               Notices.  All notices and other communications
in connection with this Agreement shall be in writing and shall be deemed to
have been given if delivered personally, sent by e-mail or electronic facsimile
(with confirmation), mailed by registered or certified mail (return receipt
requested) or delivered by an express courier (with confirmation) to the Parties
at the following addresses (or at such other address for a Party as shall be
specified by like notice):

 

If to Dynegy:

 

 

 

 

Dynegy Inc.
Attention: Catherine Callaway
601 Travis – 14th Floor
Houston, Texas 77002
Telephone:   (713) 767-4615
Facsimile:   (713) 767-5181
E-mail: Catherine.Callaway@dynegy.com

 

 

 

with a copy to:

 

 

 

 

White & Case LLP
Attention: Thomas E Lauria
200 South Biscayne Boulevard
Suite 4900
Miami, Florida 33131
Telephone: (305) 995-5282
Facsimile: (305) 358-5744
E-mail: tlauria@whitecase.com

If to DH:

 

 

 

 

Dynegy Holdings, LLC
Attention: Catherine Callaway
601 Travis – 14th Floor
Houston, Texas 77002
Telephone: (713) 767-4615
Facsimile: (713) 767-5181
E-mail: Catherine.Callaway@dynegy.com

 

and

 

Attention: David Hershberg
E-mail: david.hershberg@gmail.com.
c/o Young Conaway Stargatt & Taylor, LLP
Attention:  James L. Patton, Jr.
Rodney Square
1000 North King Street
Wilmington, Delaware 19801
Telephone:  (302) 571-6684
Facsimile:  (302) 576-3325
E-mail:  jpatton@ycst.com

 

26

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

 

with a copy to:

 

 

 

 

Sidley Austin LLP
Attention: James F. Conlan
One South Dearborn
Chicago, Illinois 60603
Telephone: (312) 853-6890
Facsimile: (312) 853-7036
E-mail: jconlan@sidley.com

with a copy to:

 

 

 

 

Young Conaway Stargatt & Taylor, LLP
Attention:  James L. Patton, Jr.
Rodney Square
1000 North King Street
Wilmington, Delaware 19801
Telephone:  (302) 571-6684
Facsimile:  (302) 576-3325
E-mail:  jpatton@ycst.com

If to the Ad Hoc Senior Noteholders Committee:

 

 

 

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP
Attention: Andrew N. Rosenberg and Alice Belisle Eaton
1285 Avenue of the Americas
New York, New York 10019
Telephone: (212) 373-3000
Facsimile: (212) 757-3990
E-mail: arosenberg@paulweiss.com and
aeaton@paulweiss.com

If to Franklin Advisers:

 

 

 

 

Franklin Advisers, Inc.
Attention: Ed Perks and Piret Loone
One Franklin Parkway
San Mateo, California 94403
Facsimile: (916) 463-1902
E-mail: perksed@frk.com and ploone@frk.com

with a copy to:

 

 

 

 

Milbank, Tweed, Hadley & McCloy LLP
Attention: Thomas Kreller and Brett Goldblatt
601 S. Figueroa Street
30th Floor

 

27

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

 

 

 

Los Angeles, California 90017
Telephone: (213) 892-4000
Facsimile: (213) 629-5063
E-mail: tkreller@milbank.com and bgoldblatt@milbank.com

If to Oaktree Capital Management:

 

 

 

 

Oaktree Capital Management
Attention: Kenneth Liang
333 South Grand Avenue, 28th Floor
Los Angeles, California 90071
Facsimile: (213) 830-8522
E-mail: kliang@oaktreecapital.com

If to the Consenting Lease Certificate Holders:

 

 

 

 

c/o Cadwalader, Wickersham & Taft LLP
Attention: George A. Davis & Josh Brant
One World Financial Center
New York, New York 10281
Telephone: (212) 504-6797
Facsimile: (212) 504-6666
E-mail: george.davis@cwt.com & josh.brant@cwt.com

If to the PSEG Entities:

 

 

 

 

Resources Capital Management Corporation
80 Park Plaza, T-20
Newark, New Jersey 07102
Attention: Scott S. Jennings
Telephone: (973) 430-8660
Facsimile: (973) 643-8385
E-mail: scott.jennings@pseg.com

and

 

Attention: Shawn P. Leyden
Telephone: (973) 430-7698
Facsimile: (973) 643-8385
E-mail: shawnp.leyden@pseg.com

with a copy to:

 

 

 

 

Jenner & Block LLP
353 North Clark Street
Chicago, Illinois 60654

 

28

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

 

 

 

Attention: David J. Bradford
Telephone: (312) 923-2975
Facsimile: (312) 840-7375
E-mail: dbradford@jenner.com

 

and

 

Attention: Daniel R. Murray
Telephone number: 312-923-2953
Facsimile number 312-840-7353
E-mail: dmurray@jenner.com

 

 

 

If to the Lease Trustee:

 

 

 

 

U.S. Bank National Association
Attention: Pamela J. Wieder & Wayne F. Miller
60 Livingston Avenue
St. Paul, Minnesota 55107
Telephone: (651) 495-3961
Facsimile: (651) 495-8100
E-mail: pamela.wieder@usbank.com and
wayne.miller1@usbank.com

with a copy to:

 

 

 

 

Shipman & Goodwin LLP
Attention: Ira H. Goldman & Marie C. Pollio
One Constitution Plaza
Hartford, Connecticut 06103
Telephone: (860) 251-5820
Facsimile: (860) 251-5214
E-mail: igoldman@goodwin.com and
mpollio@goodwin.com

with a copy to:

 

 

 

 

Cadwalader, Wickersham & Taft LLP
Attention: George A. Davis & Josh Brant
One World Financial Center
New York, New York 10281
Telephone: (212) 504-6797
Facsimile: (212) 504-6666
E-mail: george.davis@cwt.com & josh.brant@cwt.com

 

 

 

If to CQS:

 

 

 

 

Andrews Kurth LLP
450 Lexington Avenue, 15th Floor
New York, New York 10017

 

29

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

 

 

 

Attention: Paul N. Silverstein
Telephone: (212) 850-2800
Facsimile (212) 850-2929
Email: paulsilverstein@andrewskurth.com

 

 

 

If to Claren Road:

 

 

 

 

Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, New York 10166-0193
Attention: Matthew Williams, Esq.
Telephone: (212) 351-4000
Facsimile: (212) 351-4025
Email: MJWilliams@gibsondunn.com

If to Loomis:

 

 

 

 

Thomas H. Day
Assistant General Counsel
Loomis, Sayles & Company, L.P.
One Financial Center
Boston, MA 02111
Tel: 617-310-3697
Email: tday@loomissayles.com

If to the Creditors’ Committee:

 

 

 

 

Akin Gump Strauss Hauer & Feld LLP
Attention: Arik Preis
One Bryant Park
New York, NY 10036
Telephone: (212) 872-7418
Facsimile: (212) 872-1002
E-mail: apreis@akingump.com

 

22.                               Entire Agreement.  This Agreement, including
any exhibits, annexes and/or schedules hereto, constitutes the entire agreement
between the Parties concerning the subject matter of this Agreement and
supersedes all prior negotiations, agreements and understandings, whether
written or oral, between and among the Parties concerning the subject matter of
this Agreement.  The Parties hereto acknowledge that they are executing this
Agreement without reliance on any representations, warranties or commitments
other than those representations, warranties and commitments expressly set forth
in this Agreement.

 

23.                               Modification or Amendment.  This Agreement may
be modified or amended only by written agreement executed by Dynegy, DH, a
Majority of the Consenting Senior

 

30

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

 

Noteholders, a Majority of the Consenting Lease Certificate Holders (or, solely
in the case of any modifications or amendments adverse to the rights of the
Lease Trustee contained in Sections 2.a., 5, 21 and 23 hereof, the Lease Trustee
and not a Majority of the Consenting Lease Certificate Holders), and RCM, after
consultation with the Creditors’ Committee; provided that the consent of the
Creditors’ Committee shall also be required solely in respect of any
modification or amendment adverse to the rights of the Creditors’ Committee
contained in Sections 2.a., 5, 7, 8, 21, 23, 27 and 30 hereof; provided further
that the consent of a Majority of the Consenting Sub Debt Holders shall also be
required solely in respect of any modification or amendment to Sections 2.a.vi,
2.a.vii, 2.a.ix, 3, 4, 6-14 and 16-32 that is adverse to the rights of the
Consenting Sub Debt Holders or their proposed treatment under a Conforming Plan,
and where the adverse effect of such modification or amendment is unique to the
Consenting Sub Debt Holders.

 

24.                               Further Assurances.  From and after the date
hereof, each of the Parties agrees to use their respective commercially
reasonable efforts to execute or cause to be executed and deliver or cause to be
delivered all such agreements, instruments and documents and take or cause to be
taken all such further actions as the Parties may reasonably deem necessary from
time to time to carry out the intent and purpose of this Agreement and the
Conforming Plan, and to consummate the transactions contemplated hereby and
thereby.

 

25.                               Successors and Assigns. Except as otherwise
provided in this Agreement, this Agreement is intended to bind and inure to the
benefit of each of the Parties and each of their respective successors, assigns,
heirs, executors, administrators and representatives.

 

26.                               Public Disclosure.  Without limiting the
prohibition on disclosure of the Disclosure Certificates contained in
Section 11.a. of this Agreement (subject to the qualifications set forth in such
Section 11.a.), the Creditor Parties hereby consent to the disclosure of the
execution and contents of this Agreement by Dynegy or DH in the Conforming Plan,
the Disclosure Statement and any other related documents, and any filings by
Dynegy or DH with the Bankruptcy Court or the Securities and Exchange
Commission, or as required by law or regulation; provided, that except as
required by law or any rule or regulation of any securities exchange or any
governmental agency, none of Dynegy, DH, or any other Debtor shall use the name
of any Creditor Party or its affiliates, officers, directors, managers,
stockholders, members, employees, partners, representatives and agents in any
press release or filing with the Securities and Exchange Commission without the
prior consent of such applicable Creditor Party.  Each of Dynegy, DH, and the
other Debtors, on the one hand, and the Creditor Parties, on the other hand,
shall (a) consult with each other before issuing any press release or otherwise
making any public statement with respect to the transactions contemplated by
this Agreement, (b) provide to the other for review a copy of any such press
release or public statement and (c) not issue any such press release or make any
such public statement prior to such consultation and review and the receipt of
the prior consent of the other Parties (which shall not be unreasonably
withheld) unless required by applicable law or regulations of any applicable
stock exchange or governmental authority, in which case, the Party or Parties
required to issue the press release or make the public statement shall, prior to
issuing such press release or making such public statement, use its reasonable
best efforts to allow the other Parties reasonable time to comment on such
release or statement to the extent practicable.

 

31

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

 

27.                               Creditors’ Committee Consent Rights. 
Notwithstanding anything to the contrary in this Agreement, in any circumstance
where a provision of this Agreement requires the approval or consent of the
Creditors’ Committee, such requirement shall only be in effect and enforceable
to the extent that at the time such approval or consent is required, all then
current members of the Creditors’ Committee are eligible to vote on the subject
of such required approval or consent and, if so requested by a Party, counsel to
the Creditors’ Committee provides confirmation of such eligibility; provided,
that if at any time the approval or consent of the Creditors’ Committee is
required and (i) fewer than all of the then current members of the Creditors’
Committee are at such time eligible to vote on the subject of the required
approval or consent or (ii)  counsel to the Creditors’ Committee is requested by
a Party, but is unable, to provide confirmation of the eligibility of all then
current members to vote with respect to such subject at such time, the
Creditors’ Committee’s approval or consent rights shall, in such instance,
instead be deemed to be consultation rights only.

 

28.                               Interpretation.  This Agreement is the product
of negotiations among the Parties, and the enforcement or interpretation of this
Agreement 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 (or
its counsel) having drafted or caused to be drafted this Agreement or any
portion of this Agreement, shall not be effective in regard to the
interpretation of this Agreement.

 

29.                               Settlement Discussions.  This Agreement and
the transactions contemplated herein are part of a proposed settlement among the
Parties.  Nothing herein shall be deemed an admission of any kind.  To the
extent provided by Federal Rule of Evidence 408, all applicable mediation
privileges, and any applicable state rules of evidence, this Agreement and all
negotiations relating thereto shall not be admissible into evidence in any
proceeding other than a proceeding to enforce the terms of this Agreement.

 

30.                               Specific Performance.  It is understood and
agreed by the Parties that money damages would be an insufficient 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 for any such breach, including, without limitation, an order of the
Bankruptcy Court or other court of competent jurisdiction requiring any Party to
comply promptly with any of its obligations hereunder; provided, that each Party
agrees to waive any requirement for the securing or posting of a bond in
connection with such remedy.

 

31.                               Headings.  Titles and headings in this
Agreement are inserted for convenience of reference only and are not intended to
affect the interpretation or construction of this Agreement.

 

32.                               Execution of Agreement.  This Agreement may be
executed in counterparts, and by the different Parties hereto on separate
counterparts, each of which when executed and delivered shall constitute an
original.  Delivery of an executed counterpart by facsimile or electronic mail
shall be equally as effective as delivery of an original executed counterpart.

 

33.                               Concerning the Danskammer/Roseton OL
Independent Manager of Danskammer OL LLC and Roseton OL LLC.  Notwithstanding
anything contained herein to the contrary, this Agreement has been executed by
Wilmington Trust Company not in its individual capacity but solely in its
capacity as independent manager of each of Danskammer OL LLC and Roseton OL

 

32

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

 

LLC (in such capacities, collectively, the “Danskammer/Roseton OL Independent
Manager”), and in no event shall Wilmington Trust Company in its individual
capacity or as Danskammer/Roseton OL Independent Manager have any liability for
the representations, warranties, covenants, agreements or other obligations of
either of Danskammer OL LLC or Roseton OL LLC or any other Person hereunder or
other documents delivered pursuant hereto.  For all purposes of this Agreement,
in the performance of any duties or obligations of the Danskammer/Roseton OL
Independent Manager hereunder, the Danskammer/Roseton OL Independent Manager
shall be entitled to the benefits of the terms and provisions of the Limited
Liability Company Agreements of Danskammer OL LLC and Roseton OL LLC, as
applicable.

 

33

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

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date set forth above.

 

 

DYNEGY INC.

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

DYNEGY GAS INVESTMENTS, LLC

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

DYNEGY COAL HOLDCO, LLC

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

DYNEGY DANSKAMMER, L.L.C.

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

DYNEGY ROSETON, L.L.C.

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

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

 

 

DYNEGY NORTHEAST GENERATION, INC.

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

HUDSON POWER, L.L.C.

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

2

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

 

 

DYNEGY HOLDINGS, LLC

 

 

 

 

 

 

 

By:

/s/ David Hershberg

 

 

Name:

David Hershberg

 

 

Title:

Independent Manager

 

3

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

 

 

RESOURCES CAPITAL MANAGEMENT CORPORATION

 

 

 

 

 

 

 

 

 

By:

/s/ Scott S. Jennings

 

 

Name:

Scott S. Jennings

 

 

Title:

President

 

 

 

 

 

 

 

 

 

RESOURCES CAPITAL ASSET RECOVERY, L.L.C., SERIES DD AND SERIES DR

 

 

 

 

 

 

 

 

 

By:

/s/ Scott S. Jennings

 

 

Name:

Scott S. Jennings

 

 

Title:

Director

 

4

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

 

 

ROSETON OP LLC

 

 

 

 

 

 

 

 

 

By:

/s/ Scott S. Jennings

 

 

Name:

Scott S. Jennings

 

 

Title:

Director

 

 

 

 

 

 

 

 

 

DANSKAMMER OP LLC

 

 

 

 

 

 

 

 

 

By:

/s/ Scott S. Jennings

 

 

Name:

Scott S. Jennings

 

 

Title:

Director

 

5

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

 

 

ROSETON OL LLC

 

 

 

By: Wilmington Trust Company, not in its individual capacity, but solely as
Independent Manager

 

 

 

 

 

By:

/s/ Mark H. Brzoska

 

 

Name:

Mark H. Brzoska

 

 

Title:

Financial Services Officer

 

 

 

 

 

 

 

 

 

DANSKAMMER OL LLC

 

 

 

By: Wilmington Trust Company, not in its individual capacity, but solely as
Independent Manager

 

 

 

 

 

By:

/s/ Mark H. Brzoska

 

 

Name:

Mark H. Brzoska

 

 

Title:

Financial Services Officer

 

6

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

 

 

AEGON USA Investment Management, LLC

 

 

 

 

 

 

 

 

 

By:

/s/ James H. Rich

 

 

Name:

James H. Rich, III

 

 

Title:

Authorized Signatory

 

7

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

 

 

AVENUE INVESTMENTS, L.P.

 

 

 

 

 

 

 

 

 

By:

/s/ Sonia Gardner

 

 

Name:

Sonia Gardner

 

 

Title:

Member

 

 

 

 

 

 

 

 

 

AVENUE SPECIAL SITUATIONS FUND VI (MASTER), L.P.

 

 

 

 

 

 

 

 

 

By:

/s/ Sonia Gardner

 

 

Name:

Sonia Gardner

 

 

Title:

Member

 

 

 

 

 

 

 

 

 

AVENUE INTERNATIONAL MASTER, L.P.

 

 

 

 

 

 

 

By:

/s/ Sonia Gardner

 

 

Name:

Sonia Gardner

 

 

Title:

Director

 

 

 

 

 

 

 

 

 

AVENUE CDP-GLOBAL OPPORTUNITIES FUND, L.P.

 

 

 

 

 

 

 

 

 

By:

/s/ Sonia Gardner

 

 

Name:

Sonia Gardner

 

 

Title:

Member

 

8

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

 

 

OAKTREE HUNTINGTON INVESTMENT FUND, L.P.

 

 

 

 

By:

Oaktree Huntington Investment Fund GP, L.P.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Huntington Investment Fund GP Ltd.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Capital Management, L.P.

 

Its:

Director

 

 

 

 

By:

/s/ Kenneth Liang

 

Name:

Kenneth Liang

 

Title:

Managing Director

 

 

 

 

By:

/s/ Mark Rochelli

 

Name:

Mark Rochelli

 

Title:

Senior Vice President

 

 

 

OAKTREE OPPORTUNITIES FUND VIII, L.P.

 

 

 

 

By:

Oaktree Opportunities Fund VIII GP, L.P.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Opportunities Fund VIII GP Ltd.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Capital Management, L.P.

 

Its:

Director

 

 

 

 

By:

/s/ Kenneth Liang

 

Name:

Kenneth Liang

 

Title:

Managing Director

 

 

 

 

By:

/s/ Mark Rochelli

 

Name:

Mark Rochelli

 

Title:

Senior Vice President

 

9

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

 

 

OAKTREE OPPORTUNITIES FUND VIII (PARALLEL), L.P.

 

 

 

 

By:

Oaktree Opportunities Fund VIII GP, L.P.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Opportunities Fund VIII GP Ltd.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Capital Management, L.P.

 

Its:

Director

 

 

 

 

By:

/s/ Kenneth Liang

 

Name:

Kenneth Liang

 

Title:

Managing Director

 

 

 

 

By:

/s/ Mark Rochelli

 

Name:

Mark Rochelli

 

Title:

Senior Vice President

 

 

 

 

 

 

 

OAKTREE OPPORTUNITIES FUND VIII (PARALLEL 2), L.P.

 

 

 

 

By:

Oaktree Opportunities Fund VIII GP, L.P.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Opportunities Fund VIII GP Ltd.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Capital Management, L.P.

 

Its:

Director

 

 

 

 

By:

/s/ Kenneth Liang

 

Name:

Kenneth Liang

 

Title:

Managing Director

 

 

 

 

By:

/s/ Mark Rochelli

 

Name:

Mark Rochelli

 

Title:

Senior Vice President

 

10

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

 

 

OAKTREE VALUE OPPORTUNITIES FUND, L.P.

 

 

 

 

By:

Oaktree Value Opportunities Fund GP, L.P.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Value Opportunities Fund GP Ltd.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Capital Management, L.P.

 

Its:

Director

 

 

 

 

By:

/s/ Kenneth Liang

 

Name:

Kenneth Liang

 

Title:

Managing Director

 

 

 

 

By:

/s/ Mark Rochelli

 

Name:

Mark Rochelli

 

Title:

Senior Vice President

 

11

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

 

 

OAKTREE SENIOR LOAN FUND, L.P.

 

 

 

 

By:

Oaktree Senior Loan Fund GP, LP.

 

Its:

General Partner

 

 

 

 

By:

Oaktree Fund GP II, L.P.

 

Its:

General Partner

 

 

 

 

By:

/s/ Regan Scott

 

Name:

Regan Scott

 

Title:

Authorized Signatory

 

 

 

 

By:

/s/ Desmund Shirazi

 

Name:

Desmund Shirazi

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

OAKTREE CAPITAL MANAGEMENT, L.P., solely as agent and on behalf of certain funds
and accounts it manages

 

 

 

 

By:

/s/ Regan Scott

 

Name:

Regan Scott

 

Title:

Authorized Signatory

 

 

 

 

By:

/s/ Desmund Shirazi

 

Name:

Desmund Shirazi

 

Title:

Authorized Signatory

 

12

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

 

 

MARINER LDC

 

 

 

 

 

By:

/s/ Adele Kittredge Murray

 

 

Name:

Adele Kittredge Murray

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

CASPIAN CAPITAL PARTNERS, L.P.

 

 

 

 

 

 

 

By:

/s/ Adele Kittredge Murray

 

 

Name:

Adele Kittredge Murray

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

CASPIAN SELECT CREDIT MASTER FUND, LTD.

 

 

 

 

 

 

 

By:

/s/ Adele Kittredge Murray

 

 

Name:

Adele Kittredge Murray

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

CASPIAN ALPHA LONG CREDIT FUND, L.P.

 

 

 

 

 

 

 

By:

/s/ Adele Kittredge Murray

 

 

Name:

Adele Kittredge Murray

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

CASPIAN SOLITUDE MASTER FUND, L.P.

 

 

 

 

 

 

 

By:

/s/ Adele Kittredge Murray

 

 

Name:

Adele Kittredge Murray

 

 

Title:

Authorized Signatory

 

13

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

 

 

CASPIAN HLSC1, LLC

 

 

 

 

 

 

 

By:

/s/ Adele Kittredge Murray

 

 

Name:

Adele Kittredge Murray

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

SUPER CASPIAN CAYMAN FUND LIMITED

 

 

 

 

 

 

 

By:

/s/ Adele Kittredge Murray

 

 

Name:

Adele Kittredge Murray

 

 

Title:

Authorized Signatory

 

14

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

 

 

VENOR CAPITAL MASTER FUND LTD.

 

 

 

By:

Venor Capital Management LP

 

Its:

Investment Manager

 

 

 

 

By:

/s/ Michael J. Wartell

 

 

Name:

Michael J. Wartell

 

 

Title:

Co-Chief Investment Officer

 

15

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

 

 

FRANKLIN ADVISERS, INC.

 

 

 

 

 

By:

/s/ Edward Perks

 

 

Name:

Edward D. Perks

 

 

Title:

SVP-Portfolio Manager; Dir. Core/Hybrid Portfolio Management

 

16

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

 

 

J.P. MORGAN INVESTMENT MANAGEMENT INC., as INVESTMENT MANAGER and AGENT for
certain LEASE CERTIFICATE HOLDERS,

 

 

 

 

By:

/s/ James P. Shanahan

 

 

Name:

James P. Shanahan

 

 

Title:

Managing Director

 

17

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

 

 

JPMORGAN CHASE BANK N.A., as TRUSTEE to certain COMMINGLED PENSION TRUST FUNDS
that are LEASE CERTIFICATE HOLDERS,

 

 

 

 

By:

/s/ James P. Shanahan

 

 

Name:

James P. Shanahan

 

 

Title:

Managing Director

 

18

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

 

 

Arrowgrass Master Fund Ltd.

 

as a CERTIFICATEHOLDER

 

 

 

 

By:

/s/ Stephen C. Ellwood

 

Name:

Stephen C. Ellwood

 

Title:

Chief Compliance Officer

 

 

 

 

 

 

 

Arrowgrass Distressed Opportunities Fund Limited
as a CERTIFICATEHOLDER

 

 

 

 

 

 

 

By:

/s/ Stephen C. Ellwood

 

Name:

Stephen C. Ellwood

 

Title:

Chief Compliance Officer

 

19

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

 

 

TCW Investment Management Company solely on behalf of the following accounts or
funds for which it is the investment adviser: TCW High Yield Bond Fund and TCW
Strategic Income Fund, each a CERTIFICATEHOLDER

 

 

 

 

 

 

 

By:

/s/ David B. Lippman

 

Name:

David B. Lippman

 

Title:

Group Managing Director

 

 

 

 

 

 

 

By:

/s/ Stephen Kane

 

Name:

Stephen M. Kane

 

Title:

Group Managing Director

 

20

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

 

 

TCW Asset Management Company solely on behalf of the following account for which
it is the investment adviser: TCW High Yield II, L.P., a CERTIFICATEHOLDER

 

 

 

 

 

 

 

By:

/s/ David B. Lippman

 

Name:

David B. Lippman

 

Title:

Group Managing Director

 

 

 

 

 

 

 

By:

/s/ Stephen Kane

 

Name:

Stephen M. Kane

 

Title:

Group Managing Director

 

21

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

 

 

Metropolitan West Asset Management, LLC solely on behalf of the following
accounts and funds for which it is the investment adviser: Steelworkers Pension
Trust, Oklahoma Employees Retirement System (OPERS); Oklahoma Employees
Retirement System (URSJJ); MetWest Total Return Bond Fund; MetWest High Yield
Bond Fund; MetWest Strategic Income Fund; Absolute Strategies Fund (Total
Return); Absolute Strategies Fund (Opportunistic); Absolute Strategies Fund
(Opportunistic/Distressed); and Pictet Fund (LUX) — US High Yield, each a
CERTIFICATEHOLDER

 

 

 

 

 

 

 

By:

/s/ David B. Lippman

 

Name:

David B. Lippman

 

Title:

Chief Executive Officer

 

22

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

 

 

BLUE MOUNTAIN CREDIT ALTERNATIVES MASTER FUND L.P.

 

 

 

 

By: BLUEMOUNTAIN CAPITAL MANAGEMENT, LLC, Investment Advisor

 

 

 

 

 

 

 

 

By:

/s/ Paul A. Friedman

 

 

Name:

Paul A. Friedman

 

 

Title:

VP/Deputy General Counsel

 

 

 

 

 

BLUEMOUNTAIN LONG/SHORT CREDIT MASTER FUND L.P.

 

 

 

 

 

By: BLUEMOUNTAIN CAPITAL MANAGEMENT, LLC, Investment Advisor

 

 

 

 

 

 

By:

/s/ Paul A. Friedman

 

 

Name:

Paul A. Friedman

 

 

Title:

VP/Deputy General Counsel

 

 

 

 

 

BLUEMOUNTAIN DISTRESSED MASTER FUND L.P.

 

 

 

 

By: BLUEMOUNTAIN CAPITAL MANAGEMENT, LLC, Investment Advisor

 

 

 

 

 

 

 

 

By:

/s/ Paul A. Friedman

 

 

Name:

Paul A. Friedman

 

 

Title:

VP/Deputy General Counsel

 

 

 

 

 

 

 

 

 

BLUEMOUNTAIN TIMBERLINE, LTD.

 

 

 

 

By: BLUEMOUNTAIN CAPITAL MANAGEMENT, LLC, Investment Advisor

 

 

 

 

 

 

 

 

By:

/s/ Paul A. Friedman

 

 

Name:

Paul A. Friedman

 

 

Title:

VP/Deputy General Counsel

 

23

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

 

 

BLUEMOUNTAIN STRATEGIC CREDIT MASTER FUND L.P.

 

 

 

 

By: BLUEMOUNTAIN CAPITAL MANAGEMENT, LLC, Investment Advisor

 

 

 

 

 

 

 

 

 

By:

/s/ Paul A. Friedman

 

 

 

Name:

Paul A. Friedman

 

 

 

Title:

VP/Deputy General Counsel

 

 

 

 

 

 

 

 

 

 

 

HUMPHREYS PEAK, LLC

 

 

 

 

By: BLUEMOUNTAIN CAPITAL MANAGEMENT, LLC, Investment Advisor

 

 

 

 

 

 

 

 

 

By:

/s/ Paul A. Friedman

 

 

 

Name:

Paul A. Friedman

 

 

 

Title:

VP/Deputy General Counsel

 

 

 

 

 

 

BLUEMOUNTAIN LONG/SHORT CREDIT AND DISTRESSED REFLECTION FUND, as a sub-fund of
AAI BLUEMOUNTAIN FUND, PLC

 

 

 

 

By: BLUEMOUNTAIN CAPITAL MANAGEMENT, LLC, Investment Advisor

 

 

 

 

 

 

 

 

 

By:

/s/ Paul A. Friedman

 

 

 

Name:

Paul A. Friedman

 

 

 

Title:

VP/Deputy General Counsel

 

24

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

 

 

 

AGREED AND ACKNOWLEDGED

 

 

(as to Sections 2(a)(i), 2(a)(iii) and 5):

 

 

 

 

 

 

U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, but solely as
successor indenture trustee under the Lease Indentures and successor pass
through trustee under the Pass Through Trust Agreement

 

 

 

 

 

 

 

By:

/s/ Wayne Miller

 

 

Name:

Wayne Miller

 

 

Title:

AVP

 

 

25

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

 

 

CLAREN ROAD CREDIT MASTER FUND, LTD.

 

 

 

By:

/s/ Albert Marino

 

 

Name:

Albert Marino

 

 

Title:

Director

 

26

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

 

 

DO S1 LIMITED

 

 

 

 

 

 

 

 

 

By:

/s/ Kevin Jones

 

 

Name:

Kevin Jones

 

 

Title:

Authorised Signatory

 

27

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

 

 

LOOMIS, SAYLES & COMPANY, L.P., as investment manager for each of one or more
discretionary accounts solely in its capacity as a holder of NGC Trust Capital
Income Securities,

 

By: Loomis, Sayles & Company, Incorporated,

 

Its General Partner

 

 

 

 

 

 

 

 

 

By:

/s/ Thomas H. Day

 

 

Name:

Thomas H. Day

 

 

Title:

Assistant General Counsel

 

 

 

 

 

 

 

 

 

Amended and Restated Plan Support Agreement with respect to Dynegy Holdings,
LLC, et al.

 

28

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

 

EXHIBIT A

 

FORM OF JOINDER TO PLAN SUPPORT AGREEMENT

 

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

 

JOINDER TO PLAN SUPPORT AGREEMENT

 

This Joinder to the Amended and Restated Plan Support Agreement (the “PSA”),
dated as of May 30, 2012, by and among Dynegy Inc., Dynegy Gas Investments, LLC,
Dynegy Coal Holdco, LLC, the Debtors(1) and the Creditor Parties (collectively,
the “Parties”), is executed and delivered by
                                         (the “Joining Party”) as of
                     ,         .

 

1.             Agreement to be Bound.  The Joining Party hereby agrees to
assume, be bound by and timely perform all of the terms and provisions of the
PSA attached to this Joinder as Annex 1 (as the same may be hereafter amended,
restated or otherwise modified from time to time), as though such Joining Party
were a “[Consenting Senior Noteholder/Consenting Lease Certificate
Holder/Consenting Sub Debt Holder]” for all purposes under the PSA, and shall
hereafter be deemed to have all of the rights and obligations of, and to be, a
“[Consenting Senior Noteholder/Consenting Lease Certificate Holder/ Consenting
Sub Debt Holder]” and a “Party” for all purposes under the PSA.

 

2.             Representations and Warranties.  With respect to all Claims held
by the Joining Party (which the Joining Party has listed in full on Annex 2
hereto), all related rights and causes of action arising out of or in connection
with or otherwise relating to such Claims, the Joining Party hereby makes all of
the representations and warranties of the Creditor Parties set forth in the PSA
to each other Party to the PSA, including, without limitation, the
representations and warranties set forth in Section 11.a. of the PSA.

 

3.             Governing Law.  This Joinder shall be governed by and construed
in accordance with the laws of the State of New York, without regard to such
state’s choice of law provisions which would require the application of the law
of any other jurisdiction.  By its execution and delivery of this Joinder, the
Joining Party irrevocably and unconditionally agrees for itself that the
Bankruptcy Court shall have exclusive jurisdiction of all matters arising out of
or in connection with this Joinder, and irrevocably accepts and submits itself
to the exclusive jurisdiction of such court, generally and unconditionally, with
respect to such matters.

 

 

 

[NAME OF JOINING PARTY]

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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

(1)  Capitalized terms used and not defined herein shall have the meanings
ascribed to such terms in the PSA.

 

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

 

ANNEX B

 

DYNEGY ENTITY JOINDER

 

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

 

DYNEGY ENTITY JOINDER

 

Joinder (this “Joinder”) to the Amended and Restated Settlement Agreement, dated
as of May 30, 2012 (the “Settlement Agreement”), by and among (i) Dynegy Inc.
(“Dynegy”), (ii) Dynegy Gas Investments, LLC (“DGIN”), (iii) Dynegy Coal Holdco,
LLC (“Dynegy Coal Holdco”), (iv) Dynegy Holdings, LLC (“DH”), (v) Dynegy
Danskammer, L.L.C. (“Dynegy Danskammer”), (vi) Dynegy Roseton, L.L.C. (“Dynegy
Roseton”), (vii) Dynegy Northeast Generation, Inc. (“DNE”), (viii) Hudson Power,
LLC (“Hudson”; each of DH, Dynegy Danskammer, Dynegy Roseton, DNE and Hudson are
debtors and debtors in possession in the jointly administered chapter 11 cases
styled as In re Dynegy Holdings, LLC et al., Case No. 11-38111 (CGM), and are
collectively referred to herein as the “Debtors”), (ix) the beneficial owners
(or advisors, nominees or investment managers for the beneficial owner(s)) of a
portion of the outstanding Senior Notes issued by DH who are parties thereto,
solely in their capacities as holders of such Senior Notes and not in any other
capacity (the “Consenting Senior Noteholders”), (x) Resources Capital Management
Corporation (“RCM”), Resources Capital Asset Recovery, L.L.C., Series DD and
Series DR, Roseton OL LLC, Danskammer OL LLC, Roseton OP LLC and Danskammer OP
LLC (collectively, the “PSEG Entities”), (xi)  U.S. Bank National Association,
not in its individual capacity but solely as successor indenture trustee under
the Lease Indentures and successor pass through trustee under the Pass Through
Trust Agreement, as directed by a majority of, and on behalf of all, the Lease
Certificate Holders, (the “Lease Trustee”), (xii) Wells Fargo Bank, N.A. (“Wells
Fargo”), as Subordinated Notes Indenture Trustee (solely with respect to
Sections II.e.(i)(6), II.e.(ii)(ix), II.e.(iv), II.l.(iii) and III.n of the
Settlement Agreement); (xiii) DO S1 Limited (“CQS”), (xiv) Loomis, Sayles &
Company, L.P. (“Loomis”) and (xv) Claren Road Credit Master Fund Ltd. (“Claren
Road”) (each of the entities in (i)-(xv) above, a “Party” and collectively, the
“Parties”).  Each capitalized term used herein but not otherwise defined shall
have the meaning set forth in the Settlement Agreement.

 

1.             Agreement to be Bound.  Each of the undersigned (the “Joining
Parties,” and each a “Joining Party”) hereby agrees to join and be bound by the
terms of the Settlement Agreement, but solely to the extent that:  (a) it agrees
to be bound by the releases set forth in (x) Section II.h. of the Settlement
Agreement, a copy of which is attached to this Joinder as Exhibit A (as the same
has been or may hereafter be amended, restated or otherwise modified from time
to time in accordance with the provisions thereof), as a “DH Releasing Party,”
(y) Section II.j. of the Settlement Agreement, as a “Dynegy and Debtor Releasing
Party,” and (z) Section II.k of the Settlement Agreement, as a “Dynegy Releasing
Party,” in each case subject to the terms and conditions of, and solely to the
extent provided under, the Settlement Agreement; and (b) it shall be entitled to
the benefits of the releases set forth in Section II.i. of the Settlement
Agreement, as a “Dynegy Released Party” and/or a “DH Released Party,” and II.k
of the Settlement Agreement, as a “DH Releasing Party,” subject to the terms and
conditions of, and solely to the extent provided under, the Settlement
Agreement.

 

2.             Representations.  Each Joining Party makes the representations
and warranties set forth in Section III.c.(iii) of the Settlement Agreement to
each Party.

 

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

 

3.             Governing Law.  This Joinder 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 provisions which would require the application of the law
of any other jurisdiction.

 

4.             Notice.  All notices and other communications given or made
pursuant to the Settlement Agreement shall be sent to:

 

If to Dynegy:

 

 

 

 

 

Dynegy Inc.

 

 

Attention: Catherine Callaway

 

 

601 Travis — 14th Floor

 

 

Houston, Texas 77002

 

 

Telephone:    (713) 767-4615

 

 

Facsimile:     (713) 767-5181

 

 

E-mail: Catherine.Callaway@dynegy.com

 

 

 

 

with a copy to:

 

 

 

 

 

White & Case LLP

 

 

Attention: Thomas E Lauria

 

 

200 South Biscayne Boulevard

 

 

Suite 4900

 

 

Miami, Florida 33131

 

 

Telephone:    (305) 995-5282

 

 

Facsimile:     (305) 358-5744

 

 

E-mail: tlauria@whitecase.com

 

 

 

 

If to DH:

 

 

 

 

 

Dynegy Holdings, LLC

 

 

Attention: Catherine Callaway

 

 

601 Travis — 14th Floor

 

 

Houston, Texas 77002

 

 

Telephone:    (713) 767-4615

 

 

Facsimile:     (713) 767-5181

 

 

E-mail: Catherine.Callaway@dynegy.com

 

 

 

 

 

and

 

 

 

 

 

Attention: David Hershberg

 

 

E-mail: david.hershberg@gmail.com.

 

 

c/o Young Conaway Stargatt & Taylor, LLP

 

 

Attention:  James L. Patton, Jr.

 

 

Rodney Square

 

 

1000 North King Street

 

2

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

 

 

 

Wilmington, Delaware 19801

 

 

Telephone:  (302) 571-6684

 

 

Facsimile:    (302) 576-3325

 

 

E-mail:  jpatton@ycst.com

 

 

 

 

with a copy to:

 

 

 

 

 

Sidley Austin LLP

 

 

Attention: James F. Conlan

 

 

One South Dearborn

 

 

Chicago, Illinois 60603

 

 

Telephone: (312) 853-6890

 

 

Facsimile:  (312) 853-7036

 

 

E-mail: jconlan@sidley.com

 

 

 

 

with a copy to:

 

 

 

 

 

Young Conaway Stargatt & Taylor, LLP

 

 

Attention:  James L. Patton, Jr.

 

 

Rodney Square

 

 

1000 North King Street

 

 

Wilmington, Delaware 19801

 

 

Telephone:  (302) 571-6684

 

 

Facsimile:   (302) 576-3325

 

 

E-mail:  jpatton@ycst.com

 

 

 

If to the Ad Hoc Senior Noteholders Committee:

 

 

 

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP

 

 

Attention: Andrew N. Rosenberg and Alice Belisle Eaton

 

 

1285 Avenue of the Americas

 

 

New York, New York 10019

 

 

Telephone: (212) 373-3000

 

 

Facsimile:  (212) 757-3990

 

 

E-mail: arosenberg@paulweiss.com and
aeaton@paulweiss.com

 

 

 

 

 

 

 

If to Franklin Advisers:

 

 

 

 

 

Franklin Advisers, Inc.

 

 

Attention: Ed Perks and Piret Loone

 

 

One Franklin Parkway

 

 

San Mateo, California 94403

 

 

Facsimile: (916) 463-1902

 

 

E-mail: perksed@frk.com and ploone@frk.com

 

3

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

 

with a copy to:

 

 

 

 

Milbank, Tweed, Hadley & McCloy LLP

 

 

Attention: Thomas Kreller and Brett Goldblatt

 

 

601 S. Figueroa Street

 

 

30th Floor

 

 

Los Angeles, California 90017

 

 

Telephone: (213) 892-4000

 

 

Facsimile:  (213) 629-5063

 

 

E-mail: tkreller@milbank.com and bgoldblatt@milbank.com

 

 

 

If to Oaktree Capital Management:

 

 

 

 

Oaktree Capital Management

 

 

Attention: Kenneth Liang

 

 

333 South Grand Avenue, 28th Floor

 

 

Los Angeles, California 90071

 

 

Facsimile: (213) 830-8522

 

 

E-mail: kliang@oaktreecapital.com

 

 

 

If to the Lease Trustee:

 

 

 

 

U.S. Bank National Association

 

 

Attention: Pamela J. Wieder & Wayne F. Miller

 

 

60 Livingston Avenue

 

 

St. Paul, Minnesota 55107

 

 

Telephone: (651) 495-3961

 

 

Facsimile:  (651) 495-8100

 

 

E-mail: pamela.wieder@usbank.com and
wayne.miller1@usbank.com

 

 

 

with a copy to:

 

 

 

 

Shipman & Goodwin LLP

 

 

Attention: Ira H. Goldman & Marie C. Pollio

 

 

One Constitution Plaza

 

 

Hartford, Connecticut 06103

 

 

Telephone: (860) 251-5820

 

 

Facsimile:  (860) 251-5214

 

 

E-mail: igoldman@goodwin.com and
mpollio@goodwin.com

 

 

 

with a copy to:

 

 

 

 

Cadwalader, Wickersham & Taft LLP

 

 

Attention: George A. Davis & Josh Brant

 

 

One World Financial Center

 

 

New York, New York 10281

 

4

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

 

 

 

Telephone: (212) 504-6797

 

 

Facsimile:  (212) 504-6666

 

 

E-mail: george.davis@cwt.com & josh.brant@cwt.com

 

 

 

If to the PSEG Entities:

 

 

 

 

Resources Capital Management Corporation

 

 

80 Park Plaza, T-20

 

 

Newark, New Jersey 07102

 

 

Attention: Scott S. Jennings

 

 

Telephone: (973) 430-8660

 

 

Facsimile: (973) 643-8385

 

 

E-mail: scott.jennings@pseg.com

 

 

 

 

 

and

 

 

 

 

 

Attention:  Shawn P. Leyden

 

 

Telephone: (973) 430-7698

 

 

Facsimile: (973) 643-8385

 

 

E-mail: shawnp.leyden@pseg.com

 

 

 

with a copy to:

 

 

 

 

Jenner & Block LLP

 

 

353 North Clark Street

 

 

Chicago, Illinois 60654

 

 

Attention: David J. Bradford

 

 

Telephone: (312) 923-2975

 

 

Facsimile: (312) 840-7375

 

 

E-mail: dbradford@jenner.com

 

 

 

 

 

and

 

 

 

 

 

Attention: Daniel R. Murray

 

 

Telephone number: 312-923-2953

 

 

Facsimile number 312-840-7353

 

 

E-mail: dmurray@jenner.com

 

 

 

If to CQS:

 

 

 

 

Andrews Kurth LLP

 

 

450 Lexington Avenue, 15th Floor

 

 

New York, New York 10017

 

 

Attention: Paul N. Silverstein

 

 

Telephone: (212) 850-2800

 

 

Facsimile (212) 850-2929

 

 

Email: paulsilverstein@andrewskurth.com

 

5

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

 

If to Claren Road:

 

 

 

 

Gibson, Dunn & Crutcher LLP

 

 

200 Park Avenue

 

 

New York, New York 10166-0193

 

 

Attention: Matthew Williams, Esq.

 

 

Telephone: (212) 351-4000

 

 

Facsimile: (212) 351-4025

 

 

Email: MJWilliams@gibsondunn.com

 

 

 

If to Loomis:

 

Thomas H. Day

 

 

Assistant General Counsel

 

 

Loomis, Sayles & Company, L.P.

 

 

One Financial Center

 

 

Boston, MA 02111

 

 

Tel: 617-310-3697

 

 

Email: tday@loomissayles.com

 

 

 

If to Wells Fargo:

 

 

 

 

Wells Fargo Bank, N.A.

 

 

40 West 57th Street

 

 

New York, New York 10019

 

 

Attention: James R. Lewis, Vice President

 

 

 

with a copy to:

 

 

 

 

Arent Fox LLP

 

 

1675 Broadway

 

 

New York, New York 10019

 

 

Attention: Andrew Silfen, Esq.

 

 

Telephone: (212) 484-3903

 

 

Facsimile: (212) 484-3990

 

 

Email: Silfen.Andrew@arentfox.com

 

 

 

If to the Creditors’ Committee:

 

 

 

 

Akin Gump Strauss Hauer & Feld LLP

 

 

Attention: Arik Preis

 

 

One Bryant Park

 

 

New York, NY 10036

 

 

Telephone: (212) 872-7418

 

 

Facsimile: (212) 872-1002

 

 

E-mail: apreis@akingump.com

 

6

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

 

 

IN WITNESS WHEREOF, the Joining Parties have executed this Joinder as of the
date set forth above.

 

 

 

ILLINOVA CORPORATION, as Joining Party

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

DYNEGY GAS IMPORTS, LLC, as Joining Party

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

DYNEGY GLOBAL LIQUIDS, INC., as Joining Party

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

DYNEGY GASCO HOLDINGS, LLC, as Joining Party

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

7

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

 

 

DYNEGY ADMINISTRATIVE SERVICES COMPANY, as Joining Party

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

DYNEGY OPERATING COMPANY, as Joining Party

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

DYNEGY GAS HOLDCO, LLC, as Joining Party

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

DYNEGY POWER MARKETING, LLC, as Joining Party

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

DYNEGY MARKETING AND TRADE, LLC, as Joining Party

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

 

 

 

8

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

 

 

DYNEGY COAL TRADING & TRANSPORTATION, L.L.C., as Joining Party

 

 

 

 

 

 

 

By:

/s/ Robert C. Flexon

 

 

Robert C. Flexon

 

 

President and Chief Executive Officer

 

9

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

 

ANNEX C

 

SETTLEMENT APPROVAL MOTION

 

AS PREVIOUSLY FILED ON MAY 2, 2012 AS ANNEX C

TO EXHIBIT 10.1 TO THE CURRENT

REPORT ON FORM 8-K OF DYNEGY INC.

AND DYNEGY HOLDINGS, LLC

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

 

ANNEX D

 

FORM OF APPROVAL ORDER

 

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

 

UNITED STATES BANKRUPTCY COURT

 

 

SOUTHERN DISTRICT OF NEW YORK

 

 

 

 

 

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

  x

 

 

  :

 

In re:

  :

Chapter 11

 

  :

 

DYNEGY HOLDINGS, LLC, et al.,(1)

  :

Case No. 11-38111 (CGM)

 

  :

 

 

  :

Jointly Administered

Debtors.

  :

 

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

  x

 

 

ORDER PURSUANT TO FED. R. BANKR. P. 9019(a) APPROVING SETTLEMENT

BETWEEN THE DEBTORS AND THE SETTLEMENT PARTIES

 

This matter came on for hearing before the undersigned United States Bankruptcy
Judge on June 1, 2012 on the motion (the “Motion”) of the above-captioned
Debtors for entry of an order approving the Settlement Agreement (as amended and
restated, the “Settlement Agreement”) between and among (i) DH and each of the
other Debtors in the above-captioned jointly administered chapter 11 cases (the
“Chapter 11 Cases”); (ii) Dynegy Coal Holdco, LLC (“Dynegy Coal Holdco”),
(iii) Dynegy Inc. (“Dynegy”); (iv) Dynegy Gas Investments, LLC (“DGIN”), a
wholly-owned non-debtor subsidiary of DH; (v) U.S. Bank National Association,
not in its individual capacity but solely in its capacity as successor indenture
trustee under the Lease Indentures (as defined in the Settlement Agreement) and
successor pass through trustee under the Pass Through Trust Agreement (as
defined in the Settlement Agreement), as directed by a majority of, and on
behalf of all, the Lease Certificate Holders (as defined in the Settlement
Agreement) (the “Lease Trustee”); (vi) Resources Capital Management Corporation,
Resources

 

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(1)  The Debtors, together with the last four digits of each Debtor’s federal
tax identification number, are Dynegy Holdings, LLC (8415); Dynegy Northeast
Generation, Inc. (6760); Hudson Power, L.L.C. (NONE); Dynegy Danskammer, L.L.C.
(9301); and Dynegy Roseton, L.L.C. (9299).  The location of the Debtors’
corporate headquarters and the service address for Dynegy Holdings, LLC, Dynegy
Northeast Generation, Inc. and Hudson Power, L.L.C. is 1000 Louisiana Street,
Suite 5800, Houston, Texas 77002.  The location of the service address for
Dynegy Roseton, L.L.C. is 992 River Road, Newburgh, New York 12550.  The
location of the service address for Dynegy Danskammer, L.L.C. is 994 River Road,
Newburgh, New York 12550.

 

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Capital Asset Recovery, L.L.C., Series DD and Series DR, Danskammer OL LLC,
Roseton OL LLC, Danskammer OP LLC, and Roseton OP LLC (collectively, the “PSEG
Entities”); (vii) a group of beneficial owners (or advisors, nominees or
investment managers for the beneficial owner(s)) of a portion of the outstanding
Senior Notes issued by DH, solely in their capacities as holders of such Senior
Notes and not in any other capacity (the “Consenting Senior Noteholders”);
(viii) the Consenting Sub Debt Holders (as defined in the Settlement Agreement);
and (ix) solely with respect to those sections of the Settlement Agreement
enumerated in the preamble thereof, the Subordinated Notes Indenture Trustee (as
defined in the Settlement Agreement) (each a “Settlement Party” and, together,
the “Settlement Parties”) pursuant to Rule 9019(a) of the Federal Rules of
Bankruptcy Procedure (the “Bankruptcy Rules”); the Court having (i) considered
the Motion and having reviewed and given due consideration to the affidavits and
testimony in support thereof, as well as all joinders and other pleadings filed
in support of the Motion, (ii) reviewed the record of the Adversary Proceeding
(as defined in the Settlement Agreement), (iii) reviewed and considered the
findings and conclusions of the Examiner as set forth in the Examiner Report, as
well as Dynegy’s preliminary response thereto, and (iv) reviewed and considered
all objections to the Motion, to the extent not otherwise withdrawn; and upon
the record at the hearing held before the Court on June 1, 2012 (the “Hearing”),
and all of the evidence adduced at the Hearing in support of the Motion and the
findings contained in this Order, the Court hereby overrules any remaining
objections to the Motion and grants the relief requested in the Motion.(2) 
Accordingly,

 

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(2)  Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Motion or Settlement Agreement, as applicable.

 

2

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THE COURT HEREBY MAKES THE FOLLOWING FINDINGS OF FACT AND CONCLUSIONS OF LAW
PURSUANT TO RULE 52 OF THE FEDERAL RULES OF CIVIL PROCEDURE, AS MADE APPLICABLE
HEREIN BY FED. R. BANKR. P. 9014(c) AND 7052, IN ADDITION TO ALL FINDINGS OF
FACT AND CONCLUSIONS OF LAW AS STATED ON THE RECORD OF THE HEARING ON THE
MOTION:(3)

 

 

A.            The Court has jurisdiction to consider the Motion and the relief
requested therein pursuant to 28 U.S.C. §§ 157 and 1334.

 

B.            The Motion presents a core proceeding pursuant to 28 U.S.C. §
157(b).

 

C.            Venue is proper before the Court pursuant to 28 U.S.C. §§1408 and
1409.

 

D.            Notice of the Motion, the Settlement Agreement, the hearing on the
Motion, and the form of this Order was adequate and appropriate in all respects
and constitutes due, sufficient and timely notice of the Motion, the
transactions contemplated thereby and the relief requested therein to all
persons entitled thereto in accordance with the requirements of the Bankruptcy
Code, the Federal Rules of Bankruptcy Procedure, the Local Rules of this Court,
and of due process.  No other or further notice of the Motion, the Settlement
Agreement, the hearing on the Motion, or this Order is necessary.

 

E.             As reflected in the Affidavits of Service filed on behalf of by
the Debtors on May 4, 2012 [ECF No. 659] and [         ], 2012 and the Affidavit
of Service filed on behalf of the Lease Trustee on May 8, 2012 [ECF No. 669],
the notice of the Motion and the transactions and settlements effected thereby,
including the notice given by the Debtors to all parties in interest, and the
notice of the Motion and form of Settlement Agreement attached as Exhibit A to
the

 

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(3)  To the extent that any findings of fact are conclusions of law they shall
be treated as such.  To the extent any conclusions of law are findings of fact
they shall be treated as such.

 

3

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Motion and filed with the Court on May 1, 2012, given by the Lease Trustee to
each of the Lease Certificate Holders that have identified themselves to the
Lease Trustee and to Cede & Co., as nominee of the Depository Trust Company, as
registered holder of the Lease Certificates, was sufficient and effective to put
all parties in interest (including all of the Lease Certificate Holders) on
notice of the Motion and the relief requested therein, and of the Settlement
Agreement and the transactions contemplated thereby.

 

Findings Relating to the Adversary Proceeding

 

F.             On November 11, 2011, the Lease Trustee commenced an adversary
proceeding against Dynegy Danskammer, Dynegy Roseton and DH, Adversary
Proceeding No. 11-09083 (the “Adversary Proceeding”), seeking a declaratory
judgment that the claims asserted by the Lease Trustee against those Debtors
were not subject to a cap on lease rejection damages pursuant to section
502(b)(6) of the Bankruptcy Code (the “502(b)(6) Cap”).  On January 6, 2012, the
Lease Trustee filed an amended complaint in the Adversary Proceeding (the
“Amended Complaint”) [Adv. Dkt. No. 6] in which it added a Fifth Claim for
Relief seeking a judicial determination of the allowed amount of the Lease
Trustee’s prepetition and postpetition claims against Dynegy Danskammer, Dynegy
Roseton and DH.  In the Amended Complaint, the Lease Trustee asserts that it is
entitled to allowed prepetition claims for (a) $917,766,720.25 in respect of
“Termination Value” under the Lease Documents and under the Lease Guarantees
(subject to reduction in an amount equal to the present fair value of the Leased
Facilities, which the Lease Trustee stated it could not quantify),
(b) post-filing interest against DH under the Lease Guarantees in an unspecified
amount, (c) legal and other enforcement expenses against DH under the Lease
Guarantees in the amount of not less than $1,416,139.48 as of the Petition Date,
(d) additional unspecified amounts against Dynegy Danskammer, Dynegy Roseton and
DH

 

4

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related to environmental, maintenance and other issues related to the
Facilities, (e) certain additional unspecified amounts for alleged
indemnification obligations to the Lease Trustee under the Participation
Agreements, (f) not less than $212,393.02 in fees and expenses incurred by the
Lease Trustee under the Lease Indentures and under the Pass Through Trust
Agreement dated as of May 1, 2001, plus an additional $207,599.19 in fees and
expenses alleged to be owed to the predecessor-in-interest to the Lease Trustee
under the Lease Indentures and the Pass Through Trust Agreement, and
(g) additional unspecified amounts alleged to be owed by DH and its
co-defendants in the New York state court action initiated by the Lease Trustee
on September 27, 2011, encaptioned The Successor Lease Indenture Trustee, et al.
v. Dynegy Inc., et al., Index No. 652642/2011 (New York County, filed Sept. 27,
2011).  In addition, the Lease Trustee asserts that it is owed additional
amounts by Dynegy Danskammer and Dynegy Roseton as post-petition administrative
claims on account of the period from the Petition Date through the date of
turnover of possession and control of the Facilities, in the amounts of
(x) $436,634.03 per day for the period from November 7-8, 2011, plus $286,829.81
per day for the period from November 9, 2011 through May 8, 2012, plus
$247,909.69 per day for the period from May 9, 2012 through November 8, 2012 in
respect of the Roseton Facility, and (y) $21,603.97 per day for the period from
November 7-8, 2011, plus $21,603.97 per day for the period from November 9, 2011
through May 8, 2012, plus $436,526.90 per day for the period from May 9, 2012
through November 8, 2012 in respect of the Danskammer Facility.

 

G.            On January 25, 2012, Dynegy Danskammer, Dynegy Roseton and DH
filed their Answer and Counterclaims to the Amended Complaint of the Lease
Indenture Trustee [Adv. ECF No. 18].

 

5

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H.            On February 21, 2012, the Lease Trustee filed an answer to the
counterclaims filed by Dynegy Danskammer, Dynegy Roseton and DH [Adv. Dkt.
No. 27].

 

I.              On February 27, 2012, the Lease Trustee filed a motion for
judgment on the pleadings [Adv. Dkt. No. 28] seeking a ruling that the Lease
Trustee’s claims are not subject to the 502(b)(6) Cap based upon the Lease
Trustee’s contention that the Facility Leases concern personal, rather than
real, property.  On February 29, 2012, Dynegy Danskammer, Dynegy Roseton and DH
filed their own motion for judgment on the pleadings [Adv. Dkt. No. 31].

 

J.             On March 9, 2012, (i) Dynegy Danskammer, Dynegy Roseton and DH
filed their opposition [Adv. Dkt. No. 34] to the Lease Trustee’s motion for
judgment on the pleadings, (ii) the Lease Trustee filed its opposition [Adv.
Dkt. No. 36] to the motion for judgment on the pleadings filed by Dynegy
Danskammer, Dynegy Roseton and DH, and (iii) Dynegy, as intervenor, filed its
omnibus response [Adv. Dkt. No. 35] to the parties’ motions for judgment on the
pleadings.  On March 13, 2012, the Creditors’ Committee, as intervenor, filed
its response [Adv. Dkt. No. 41] in opposition to the Lease Trustee’s motion for
judgment on the pleadings, supporting Defendants’ position that the Facility
Leases are leases of real property rather than personal property (but otherwise
not taking a position on the matters raised in Defendants’ motion for judgment
on the pleadings).

 

K.            On March 21, 2012, the Bankruptcy Court heard argument on the
parties’ motions for judgment on the pleadings in the Adversary Proceeding, and,
at the conclusion of that hearing, the Bankruptcy Court took under submission
the issue of whether the Facility Leases are leases of real property.(4)

 

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(4)  At the request of the Examiner in his capacity as mediator, and in aid of
the ongoing mediation efforts, the parties to the Adversary Proceeding
subsequently agreed to an informal

 

6

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

 

Findings Related to the Appointment of the Examiner and the Mediation

 

L.             On November 11, 2011, the Lease Trustee filed a motion with the
Bankruptcy Court seeking the appointment of an examiner pursuant to section
1104(c) of the Bankruptcy Code  [Dkt. No. 48].

 

M.           On December 29, 2011, the Bankruptcy Court entered an agreed order
(the “Examiner Order”) [Dkt. No. 276] for the appointment of an examiner.  On
January 11, 2012, the United States Trustee for Region 2 appointed Susheel
Kirpalani (the “Examiner”) to serve as examiner [Dkt. No. 308], and on
January 12, 2012, the Bankruptcy Court entered an order [Dkt. No. 318] approving
Mr. Kirpalani’s appointment as Examiner.

 

N.            On March 9, 2012, the Examiner issued his report setting forth his
assessment of various potential claims and causes of action arising from certain
prepetition transactions involving the Debtors and certain of their affiliates,
including the September 1, 2011 transfer of Dynegy Coal Holdco (the “Examiner
Report”) [Dkt. No. 490].

 

O.            Following the release of the Examiner Report, at a status
conference held on March 12, 2012 at which the Debtors and Dynegy (as plan
proponent) adjourned the hearing to consider approval of the Disclosure
Statement, the Bankruptcy Court ordered the Debtors to participate in mediation
with certain of their creditor constituencies and other parties in interest
under the auspices of the Examiner, in his capacity as mediator under the
Examiner Order.

 

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

stay of the Adversary Proceeding pending further mediation efforts, including a
request that the Bankruptcy Court not rule on the submitted matter with respect
to whether the Facilities are real or personal property, as well as a stay of
any further reply briefing with respect to the matters not yet fully submitted.

7

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

 

P.             On March 20, 2012, Dynegy filed a preliminary response [Dkt.
No. 539] to the Examiner Report, in which it responded to and contested many of
the findings and conclusions set forth in the Examiner Report.

 

Q.            After the Examiner issued the Examiner Report, the Settlement
Parties, as well as the Creditors’ Committee, engaged in numerous formal
negotiation sessions mediated by the Examiner, as well as several informal
discussions with the Examiner in his capacity as mediator, over a period of
approximately six weeks.

 

R.            As a result of extensive arm’s-length negotiations through the
mediation process, the Settlement Parties, with the support of the Creditors’
Committee, have entered into the Settlement Agreement to settle all disputes,
claims and causes of action (i) between DH, on the one hand, and Dynegy, on the
other hand, including, among other things, any arising with respect to the
transfer of Dynegy Coal Holdco to Dynegy, as well as any and all other claims
and causes of action described in the Examiner Report, and (ii) between and
among the Settlement Parties, relating, among other things, to the facts alleged
and the claims and counterclaims asserted, in (a) the Prepetition Litigation,
(b) the Adversary Proceeding, (c) the Consenting Sub Debt Holders’ and
Subordinated Notes Indenture Trustee’s objections to the Settlement, the Trustee
Motions and the Claren Road Notice of Appeal, as applicable, and (d) any
additional litigation that could be commenced between and among the Settlement
Parties with respect to clauses (a) through (c) hereof.

 

S.             The Debtors, the other Settlement Parties and the Creditors’
Committee participated in the mediation sessions in good faith and negotiated at
arm’s-length and in good faith to reach agreement by and among the Settlement
Parties on the matters resolved through the Settlement Agreement.

 

8

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

 

Findings Relating to the Settlement Agreement

 

T.            The Debtors are direct or indirect wholly owned and controlled
subsidiaries of Dynegy within the meaning of such terms under Section 271 of the
Delaware General Corporation Law.

 

U.            The Independent Manager of DH was appointed on March 27, 2012. 
Pursuant to the Amended and Restated Limited Liability Company Operating
Agreement of DH (the “Amended LLC Agreement”), the Independent Manager has the
exclusive power and authority over, and the separate and sole vote and approval
to act on behalf of DH with respect to, inter alia, the following actions (with
capitalized terms not otherwise separately defined herein as they are defined in
the Amended LLC Agreement):

 

a.               Determining the appropriateness of, authorizing or filing with
the United States Bankruptcy Court for the Southern District of New York or with
any other court of competent jurisdiction, or otherwise approving or consenting
to, any amendment to the Initial Plan, including determining the appropriateness
of and consenting to or authorizing any settlements of any adversary or similar
legal proceedings involving DH or any of its Subsidiaries in connection with the
Initial Plan as so amended;

 

b.              Determining the appropriateness of, authorizing or filing with
any court of competent jurisdiction, or otherwise consenting to, any plan of
reorganization (such plan, an “Alternative Plan”) for the Company or its
Subsidiaries other than the Amended DH Plan, proposed by any Person or any
amendments to such Alternative Plan, including determining the appropriateness
of and consenting to or authorizing any settlements of any adversary or similar
legal proceedings involving DH or any of its Subsidiaries in connection with
such an Alternative Plan;

 

c.               Determining the appropriateness of and consenting to or
authorizing any settlements of any actual or potential adversary or similar
legal proceedings involving DH or any of its Subsidiaries in connection with
claims against any Affiliates of DH, including any claims or causes of action
identified in the Examiner Report,

 

9

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

 

whether pursuant to Bankruptcy Rule 9019 or otherwise;

 

d.              Directly or indirectly amending, restating, supplementing or
otherwise modifying Sections 9.01, 9.02 or 9.03 of the Amended LLC Agreement;

 

e.               Following the execution of the Amended LLC Agreement, except to
the extent provided for in, or contemplated or required by, any agreement,
contract or other arrangement existing as of the date of the Amended LLC
Agreement or that is subsequently approved by the Independent Manager in
accordance with the terms of the Amended LLC Agreement, directly or indirectly,
making any payment to or selling, leasing, transferring or otherwise disposing
of any of DH’s properties or assets to, or purchasing or otherwise acquiring any
property or assets from, or entering into or making or amending any transaction
or series of related transactions, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, Dynegy or any of its
Subsidiaries other than wholly-owned Subsidiaries of DH in transactions not
specified in Sections 9.02(a) or (b) of the Amended LLC Agreement, including
settling, resolving, modifying or waiving any intercompany rights or obligations
(including accounts payable and accounts receivable) between DH or any of its
wholly-owned Subsidiaries, on the one hand, and Dynegy or any of its
Subsidiaries (other than wholly-owned Subsidiaries of DH), on the other hand;
provided, that the approval of the Independent Manager shall not be required in
connection with any of the foregoing actions (and such actions shall not
constitute Independent Approval Matters) to the extent any such action is taken
in the ordinary course of DH’s business in connection with the day to day
operation of DH’s business; and

 

f.                Taking any action, including entering into any agreement or
arrangement, in furtherance of any of the above listed “Independent Approval
Matters,” as set forth in clauses a. through e. above.

 

V.                                    The Independent Manager of DH has
undertaken a thorough, independent review of the settlements and compromises
contained in the Settlement Agreement, including, but not limited to, the
settlements and compromises between DH and Dynegy, the settlements and
compromises between the Debtors and the Lease Trustee, on behalf of the Lease
Certificate

 

10

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Holders, and the settlements and compromises between DH and the Consenting Sub
Debt Holders, and has determined, in the valid exercise of his business
judgment, that entry into the Settlement Agreement is in the best interest of
the Debtors’ estates and their creditors.  In exercising these responsibilities,
the Independent Manager has been represented by separate independent counsel
(the law firm of Young Conaway Stargatt & Taylor LLP).  In accordance with the
Amended LLC Agreement, none of the current members of the DH Board of Managers
other than the Independent Manager participated in this determination or
decision by DH.

 

W.                                 On May 22, 2012, each of CQS, Claren Road and
Wells Fargo filed an objection to the Motion (collectively, the “Settlement
Objections”).

 

X.                                    On May 30, 2012, the Debtors filed their
Notice of Filing Amended Exhibit A (Settlement Agreement) to the Motion to
Approve Settlement Agreement Between the Debtors and the Settlement Parties
Pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure [ECF
No.       ] (“Notice of Revised Settlement Agreement”), advising that (i) the
Settlement Objections had been resolved, and (ii) an amended and restated
Settlement Agreement had been entered into by and among the original Settlement
Parties that executed the May 1, 2012 Settlement Agreement attached as Exhibit A
to the Motion, as well as by each of CQS, Claren Road and Wells Fargo (among
other signatories thereto).  A true and correct copy of the amended and restated
Settlement Agreement is attached as Exhibit A to the Notice of Revised
Settlement Agreement.  Good and sufficient notice of the Notice of Revised
Settlement Agreement has been provided as reflected in the Affidavit of Service
filed on behalf of the Debtors on May     , 2012 [ECF No.       ].

 

Y.                                    In connection with the Settlement Parties’
entry into, and pursuant to the terms of, the Settlement Agreement, each of the
Settlement Objections (as well as all related discovery

 

11

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requests) were withdrawn without prejudice (with such withdrawals to be deemed
with prejudice upon entry of this Order).

 

Z.                                     On May 25, 2012, an equity security
holder of Dynegy, Cleo A. Zahariades, untimely filed the “Partial Joinder of
Equity Securities Holder Cleo A. Zahariades to Objection of Claren Road Asset
Management, LLC to Debtors Motion for Approval of Settlement Between the Debtors
and the Settlement Parties Pursuant to Rule 9019 of the Federal Rules of
Bankruptcy Procedure” [ECF No. 737] (the “Zahariades Joinder”).  On May [  ],
2012, the Debtors filed a response and objection to the Zahariades Joinder [ECF
No.       ].

 

AA.                           Given the facts and circumstances of these cases,
the nature of the claims that have been asserted in the Adversary Proceeding and
the Prepetition Litigation, and the nature of the claims and causes of action
that may be asserted by or on behalf of DH and its estate against Dynegy, the
compromises contained in the Settlement Agreement are fair, reasonable and
adequate, in the best interests of the Debtors’ estates and their creditors, and
represent a valid and proper exercise of the business judgment of the Debtors
and the Independent Manager.  In light of the facts and circumstances of the
cases, the consideration received by Dynegy under the Settlement Agreement
represents reasonably equivalent value for the assets it is transferring, the
claims it is releasing, and all other consideration it is giving.

 

BB.                           The Settlement Agreement confers substantial
benefits upon the Debtors’ estates, by, among other things, providing for: 
(i) the resolution of the Adversary Proceeding, the Prepetition Litigation, and
the putative claims and causes of action DH and its estate may have against
Dynegy, on a negotiated basis, and on terms negotiated at arm’s length among the
majority of constituencies in these Chapter 11 Cases pursuant to a Court-ordered
mediation process presided over by the Examiner; (ii) the immediate transfer of
the DCH Membership

 

12

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Interests to DH (either directly or indirectly by transfer to its wholly-owned
subsidiary, DGIN), thereby effectively reversing the CoalCo Transaction
investigated by the Examiner in the Examiner Report, in exchange for granting to
Dynegy the Dynegy Administrative Claim on the terms set forth in the Settlement
Agreement; (iii) the elimination of the substantial expense, delay (including by
virtue of potential multiple appeals from any ruling in the Adversary
Proceeding, or from any judgment that might be obtained if the claims and causes
of action identified in the Examiner Report and the Prepetition Litigation were
pursued) and risk of loss associated with litigation of the foregoing matters;
and (iv) the elimination of the expense, delay and other risks associated with
the Settlement Objections, Trustee Motions and Notice of Appeal brought by the
Consenting Sub Debt Holders and the Subordinated Notes Indenture Trustee.

 

CC.                           The compromise and settlement of claims set forth
in the Settlement Agreement substantially exceeds the lowest point in the range
of reasonableness.  The benefits and consideration that Dynegy is to provide
under the Settlement Agreement are fair, equitable and adequate consideration
for the releases and other consideration Dynegy is to receive under the
Settlement Agreement and constitute reasonably equivalent value therefor, and
the transfers contemplated by the Settlement Agreement are not subject to
avoidance under any applicable law or in equity.

 

DD.                           The benefits and consideration that Dynegy is
receiving under the Settlement Agreement in exchange for the receipt by DH or
DGIN, as applicable, of 100% of the DCH Membership Interests described therein
and other consideration provided to the Debtors and the other Settlement Parties
as described in the Settlement Agreement is fair, equitable and adequate and
constitute reasonably equivalent value therefor, and accordingly the benefits
and consideration that Dynegy is to provide to the Debtors and the other
Settlement Parties under the

 

13

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Settlement Agreement (and the transactions contemplated thereby), as well as the
consideration that Dynegy is to receive under the Settlement Agreement (and the
transactions contemplated thereby) are in each case not subject to avoidance
under any applicable law or in equity.

 

EE.                             The settlement and compromises described in the
Motion, as set forth in the Settlement Agreement, are fair and reasonable and
supported by sound business reasons and there is no bona fide basis for any
claims or actions against the Debtors, the Independent Manager, the Lease
Trustee (in its capacity as trustee or in its individual capacity), the
Creditors’ Committee, the Consenting Senior Noteholders, the Consenting Sub Debt
Holders, the Subordinated Notes Indenture Trustee, Dynegy, or any other
Settlement Party or any Consenting Lease Certificate Holder, arising out of
their participation in the negotiation and implementation of the relief
requested in the Motion.

 

FF.                               The settlement and compromises set forth in
the Settlement Agreement are fair and reasonable to, and are in the best
interests of, the Debtors and their estates, the other Settlement Parties, and
the Debtors’ other unsecured creditors, and in entering into the Settlement
Agreement, the Settlement Parties have exercised their respective rights and
powers, and used the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances.

 

GG.                           The settlement and compromises set forth in the
Settlement Agreement are the product of arm’s-length negotiations between
sophisticated parties, represented by counsel and other advisors.

 

HH.                         The discovery and access to information and
documents provided by the Settlement Parties in connection with the Motion and
the Settlement Agreement has been

 

14

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sufficient and adequate for the purposes of Bankruptcy Rule 9019(a) under the
facts and circumstances of this case.

 

II.                                   Upon entry of this Order, each of the
Debtors and each of the other Settlement Parties (i) has full power and
authority to enter into and perform all of their obligations under the
Settlement Agreement and all other documents contemplated thereby, (ii) has full
power and authority to take any and all action necessary to authorize and
approve the Settlement Agreement and the transactions contemplated thereby and
has requested and obtained all necessary approvals required to do so, and
(iii) is legally authorized to enter into and perform the Settlement Agreement
and to take any and all actions necessary to authorize, approve and implement
the Settlement Agreement and the transactions contemplated thereby.  Dynegy has
received all necessary approvals to perform its obligations under the Settlement
Agreement, and the resolution of the Board of Directors of Dynegy approving the
transaction is a valid exercise of corporate authority under applicable law. 
Upon entry of this Order, the Lease Trustee has full power and authority under
the Lease Indentures and Pass Through Trust Agreement to bind all Lease
Certificate Holders to the provisions of the Settlement Agreement and this
Order.  Moreover, as no Lease Certificate Holder has filed an objection to the
Motion or to approval of the Settlement Agreement, each Lease Certificate Holder
is deemed to have consented to the terms of the Settlement Agreement and the
terms of this Order.

 

JJ.                                   The Settlement Agreement and entry of this
Order represents a global settlement of multiple litigable issues on an
integrated basis. The various settlements and compromises embodied in the
Settlement Agreement and this Order were considered by the Settlement Parties on
an integrated basis and cannot be severed from one another and considered in
isolation.

 

15

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KK.                         Based on the findings set forth above, as well as
the record before this Court, the Court hereby concludes as a matter of law that
the Settlement Agreement satisfies the legal requirements for approval of a
settlement under Bankruptcy Rule 9019(a) in this jurisdiction.

 

ACCORDINGLY, IT IS HEREBY ORDERED AS FOLLOWS:

 

1.                                      The Motion is granted in its entirety,
and any objections to the Motion not previously withdrawn, waived or settled,
and all reservation of rights included therein, are hereby overruled with
prejudice.

 

2.                                      Pursuant to Bankruptcy Rule 9019(a), the
Settlement Agreement, a true and correct copy of which is attached hereto as
Exhibit A, is hereby approved in its entirety, and all of its terms are
incorporated herein by reference (and the failure to specifically describe or
include herein any particular provision in the Settlement Agreement shall not
diminish or impair the effectiveness of any such provision) and shall be fully
binding on and effective as to each and all of the Settlement Parties.

 

3.                                      The settlement and compromises set forth
in the Settlement Agreement, and the execution and delivery of the Settlement
Agreement by the Settlement Parties, are hereby approved.

 

4.                                      The Debtors and each of the Settlement
Parties (whether or not such parties are in a chapter 11 bankruptcy proceeding
or otherwise) are authorized and directed to execute, deliver, implement, and
fully perform any and all obligations, instruments, documents, and papers and to
take any and all actions reasonably necessary or appropriate to consummate,
complete, execute, and implement the Settlement Agreement in accordance with the
terms and conditions thereof.

 

5.                                      This Order (including the Settlement
Agreement attached hereto and incorporated herein by reference), together with
all of the findings of fact and conclusions of law contained

 

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herein and as set forth on the record of the hearing on the Motion, is and shall
be final, binding and effective on all parties in interest in the Debtors’
Chapter 11 Cases (including, but not limited to, any subsequently appointed
chapter 11 or chapter 7 trustee or any representative of any of the Debtors’
estates appointed pursuant to 11 U.S.C. § 1123), as well as on each of the
Settlement Parties and each of their present and former parents, affiliates,
direct and indirect subsidiaries, directors, shareholders, officers, managers,
predecessors, successors and assigns.  In addition, this Order is final, binding
and effective on all current, former and future Lease Certificate Holders as
well as on the Lease Trustee and any predecessor or successor thereto.  To the
extent any of the Settlement Parties subsequently files for bankruptcy (or is
otherwise subject to bankruptcy proceedings), this Order shall be binding upon
them, each of their present and former parents, affiliates, direct and indirect
subsidiaries, directors, shareholders, officers, managers, predecessors,
successors and assigns, and on any trustee appointed in such bankruptcy cases
(if any), and may not be modified or amended by virtue of any actions in such
proceedings.

 

6.                                      The Lease Trustee, as indenture trustee
for the Lease Certificate Holders, is hereby granted the following allowed
claims in the Chapter 11 Cases (subject to the limitations set forth below and
in the Settlement Agreement):  (1) a senior unsecured claim equal to
$540,000,000.00 against DH on account of all claims arising under or relating to
the Lease Guarantees or otherwise under any of the other Lease Documents (the
“Guaranty Claim”); (2) an unsecured claim equal to $454,717,690 against Dynegy
Roseton on account of all claims arising under or relating to the Roseton
Facility and Roseton Lease Documents; (3) an unsecured claim equal to
$85,282,310 against Dynegy Danskammer on account of all claims arising under or
relating to the Danskammer facility and Danskammer Lease Documents (the claims
set forth in the preceding clauses (2) and (3), the “R&D Claims”); (4) an
administrative expense claim

 

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against Dynegy Roseton in the amount of $42,176,760; and (5) an administrative
expense claim against Dynegy Danskammer in the amount of $3,154,179 (the claims
set forth in the preceding clauses (4) and (5), the “Lease Administrative
Claims,” and together with the claims set forth in the preceding clauses (1),
(2) and (3), the “Lessor Claims”).  Other than any claims for trustee and
professional fees in the Chapter 11 Cases (to the extent not previously paid by
Dynegy in accordance with Section II.e. of the Settlement Agreement), under no
circumstances will the Lease Trustee or the Lease Certificate Holders be
entitled to any administrative claims against DH, and the only claims of the
Lease Trustee or the Lease Certificate Holders to be allowed as against DH shall
be the Guaranty Claim.  For the avoidance of doubt, nothing in this Order or in
the Settlement Agreement shall be deemed or construed as determining the rights
of any creditor under the subordination provisions contained in the indentures
governing the Subordinated Notes, and the rights of all parties (other than the
Settlement Parties, as set forth in the Settlement Agreement) with respect to
such subordination provisions are fully preserved.

 

7.                                      The aggregate recovery of the Lease
Trustee and the Lease Certificate Holders (exclusive of the amounts received on
account of trustee and professional fees and expenses) on the Lessor Claims
shall be capped at $571,507,840 (the “Lessor Recovery Cap”).  Whether the Lessor
Recovery Cap has been exceeded by any distributions to the Lease Trustee shall
be determined in accordance with the provisions of the Settlement Agreement.

 

8.                                      From the date of entry of this Order
through the Settlement Effective Date, prosecution of the claims asserted or
that could have been asserted in the Adversary Proceeding is hereby stayed
pending the filing, on the Settlement Effective Date, of the stipulation of
dismissal by the Lease Trustee, DH, Dynegy Roseton and Dynegy Danskammer
irrevocably and

 

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unconditionally dismissing the Adversary Proceeding with prejudice as to all
parties and all claims and without costs to any party.

 

9.                                      On the Settlement Effective Date, as
provided in the Settlement Agreement, (a) counsel to each of the Settling
Claimants who are plaintiffs and counsel to the named defendants in (i) the
Noteholder Litigation and (ii) the Lease Indenture Trustee Litigation,
respectively, shall file a stipulation of dismissal irrevocably and
unconditionally dismissing such Prepetition Litigation with prejudice as to all
parties and all claims and without costs to any parties, and (b) each of the
Settling Claimants who are plaintiffs in the PSEG Litigation shall file and
serve a notice of discontinuance irrevocably and unconditionally dismissing the
PSEG Litigation with prejudice as to all parties and all claims and without
costs to any party.

 

10.                               The mutual releases between and among Dynegy,
DGIN, Dynegy Coal Holdco, the parties to the Dynegy Entity Joinder, the Debtors,
and the Settling Claimants, contained in the Settlement Agreement are hereby
approved and shall be effective as of the Settlement Effective Date, and each
Settlement Party shall be deemed fully and forever to have released and to be
permanently enjoined from asserting, pursuing or prosecuting in any manner and
in any forum any and all claims released pursuant to the Settlement Agreement,
including, but not limited to, claims arising from the negotiation of or entry
into the Settlement Agreement.

 

11.                               As provided in the Settlement Agreement,
Dynegy shall receive, on the Settlement Effective Date, the Dynegy
Administrative Claim (as defined in the Settlement Agreement) in an unliquidated
amount against DH, subject to the provisions of the Settlement Agreement. 
Nothing contained in the Settlement Agreement or this Order shall constitute
(i) Court approval of the proposed treatment of the Dynegy Administrative Claim
under any plan of reorganization for purposes of section 1129 of the Bankruptcy
Code, which shall remain subject

 

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to further order of this Court, (ii) Court approval of the Plan Support
Agreement annexed to the Settlement Agreement, or (iii) Court approval of any
plan of reorganization or the provisions to be contained therein.

 

12.                               All Lease Certificate Holders are bound by,
and deemed to have consented to, the terms of the Settlement Agreement and the
terms of this Order.

 

13.                               As provided in the Settlement Agreement, DH
agrees to provide Wells Fargo, solely as trustee for the holders of the
Subordinated Notes Claims, with an allowed subordinated unsecured claim in the
amount of $222,513,384.51, consisting of (a) $206,200,000.00 in the principal
amount of the Subordinated Notes and (b) $16,313,384.51 in accrued but unpaid
interest at the applicable rates specified in the Subordinated Notes Indenture,
the Subordinated Notes, the NGC Trust Declaration, the NGC Trust Capital Income
Securities, the NGC Trust Capital Income Securities Guarantee, the NGC Trust
Common Securities and related and ancillary documents and instruments.  For
purposes of treatment of and distribution on the allowed subordinated unsecured
claim described in the foregoing sentence, Dynegy and DH further agree to amend
the Existing Plan to provide Wells Fargo, as Subordinated Notes Indenture
Trustee, solely on behalf of the holders of the Subordinated Notes Claims (and
not with respect to its fees and expenses incurred in its role as Subordinated
Notes Indenture Trustee, which will be treated separately under the Conforming
Plan), with solely an Allowed General Unsecured Claim in the amount of
$55,000,000 against DH in exchange for and in full satisfaction of all
Subordinated Notes Claims, which Subordinated Notes Claims shall be treated as
set forth in the Settlement Agreement and the Plan Support Agreement (which
treatment shall be the same as that received by the holders of Senior Notes) on
a pari passu basis with all other Allowed General Unsecured Claims and shall not
be subject to subordination; provided, that

 

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notwithstanding the foregoing, DH and any of its successors, assigns or
transferees shall waive any and all rights it may have to receive a distribution
on account of the $6.2 million principal amount NGC Trust Common Securities, and
such distribution shall instead be made to the holders of the NGC Trust Capital
Income Securities.

 

14.                               Each Consenting Senior Noteholder and any
successors, assigns or transferees of any Senior Notes held by a Consenting
Senior Noteholder, each Consenting Lease Certificate Holder and any successors,
assigns or transferees of any Lease Certificates held by a Consenting Lease
Certificate Holder, and each Consenting Sub Debt Holder and any successors,
assigns or transferees of Subordinated Notes held by a Consenting Sub Debt
Holder shall be deemed bound by Section II.m. of the Settlement Agreement (as
may be amended, supplemented or modified from time to time in accordance with
the terms of the Settlement Agreement).

 

15.                               On the date of entry of this Order all of the
pleadings and other motions referenced in Section II.l. of the Settlement
Agreement shall be deemed withdrawn with prejudice.

 

16.                               Each of the Settlement Parties, U.S. Bank
National Association (in its individual capacity), the Consenting Lease
Certificate Holders, Wells Fargo Bank, N.A., and the members of, and advisors
to, the Creditors’ Committee (in their capacity as such), and each of their
respective present and former parents, affiliates, subsidiaries, directors,
shareholders, lawyers, financial advisors, officers, managers, predecessors,
successors and assigns, shall have no liability whatsoever for any claims,
demands, suits, actions or causes of action arising out of their participation
in the mediation, the negotiation and implementation of the Settlement
Agreement, and the relief requested in the Motion.

 

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17.                               The Settlement Agreement and the transactions
to be consummated thereby are not subject to avoidance, as against any of the
Settlement Parties, pursuant to sections 544, 547, 548 or 549 of the Bankruptcy
Code or any applicable state or other nonbankruptcy law, or in equity.

 

18.                               To the extent of any inconsistency between
this Order and the Settlement Agreement, this Order shall govern.

 

19.                               This Order shall constitute findings of fact
and conclusions of law (in addition to such findings and conclusions as stated
on the record of the hearing on the Motion) and, notwithstanding the possible
applicability of any provision of the Federal Rules of Bankruptcy Procedure, the
terms and conditions of this Order shall be immediately effective and
enforceable upon its entry.

 

20.                               The provisions and effect of this Order, any
actions taken pursuant to this Order or the Settlement Agreement, and the
Settlement Parties’ and Creditors’ Committee’s respective rights, obligations,
remedies and protections provided for herein and in the Settlement Agreement
shall survive the conversion, dismissal or closing of these Chapter 11 Cases,
appointment of a trustee herein, confirmation of a plan or plans of
reorganization, or the consolidation (substantive or otherwise) of these Chapter
11 Cases with any other case or cases, and the terms and provision of this Order
and the Settlement Agreement shall continue in full force and effect
notwithstanding the entry of any such order.

 

21.                               The Debtors and their current and former
officers, directors, shareholders, managers, employees, agents, attorneys,
financial advisors, successors and assigns (the “Debtor Parties”), Dynegy and
its direct and indirect subsidiaries, including DGIN and Dynegy Coal Holdco, and
each of their current and former officers, directors, shareholders, managers,

 

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employees, agents, attorneys, financial advisors, successors and assigns (to the
extent not included as Debtor Parties, the “Dynegy Parties”), the Lease Trustee
and U.S. Bank National Association (in its individual capacity) and each of
their current and former officers, directors, shareholders, employees, agents,
attorneys, financial advisors, successors and assigns (the “Lease Trustee
Parties”), the Consenting Lease Certificate Holders and each of their current
and former officers, directors, shareholders, employees, agents, attorneys,
financial advisors, successors and assigns (the “Directing Lease Certificate
Holder Parties”), the Consenting Senior Noteholders and each of their current
and former officers, directors, shareholders, employees, agents, attorneys,
financial advisors, successors and assigns (the “Consenting Senior Noteholder
Parties”), the PSEG Entities and each of their current and former officers,
directors, shareholders, employees, agents, attorneys, financial advisors,
successors and assigns (the “PSEG Entities Parties”), the Consenting Sub Debt
Holders and each of their current and former officers, directors, shareholders,
employees, agents, attorneys, financial advisors, successors and assigns (the
“Consenting Sub Debt Holder Parties”), the Subordinated Notes Indenture Trustee
and each of its current and former officers, directors, shareholders, employees,
agents, attorneys, financial advisors, successors and assigns (the “Subordinated
Notes Indenture Trustee Parties”), and the members of the Creditors’ Committee
(solely in their capacity as such) and the retained professional advisors to the
Creditors’ Committee and each of its members (solely in respect of such members’
capacities as such) (collectively, the “Committee Parties”), shall be and hereby
are fully released and exculpated, and shall have no liability to the Debtors’
estates (with the exception of such liabilities and obligations existing and
arising under the Settlement Agreement) or to any Lease Certificate Holder, any
holder of Senior Notes, any holder of Subordinated Notes or other interested
parties (the “Enjoined Parties”) arising out of, relating to,

 

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or in connection with the Motion, the Settlement Agreement, the transactions
contemplated thereby, and the negotiations relating thereto; provided, however,
that the foregoing sentence shall not apply with respect to obligations and
liabilities of the Settlement Parties under the Settlement Agreement.  All
Enjoined Parties shall be, and hereby are, bound by this Order, and shall be
permanently and irrevocably enjoined from commencing or continuing in any manner
any action or proceeding against the Debtors, the Debtor Parties, the Dynegy
Parties, the Lease Trustee Parties, the Directing Lease Certificate Holder
Parties, the Consenting Senior Noteholder Parties, the PSEG Entities Parties,
the Consenting Sub Debt Holder Parties, the Subordinated Notes Indenture Trustee
Parties, or the Committee Parties (solely in their capacities as such) arising
out of, relating to, or in connection with the Motion, the Settlement Agreement
(other than an action to enforce the obligations under the Settlement Agreement
including any alleged breach thereof), the transactions contemplated thereby and
the negotiations relating thereto, and any actions taken or not taken in
connection therewith.

 

22.                               The Settlement Agreement and this Order
constitute and evidence the valid and binding obligations of the Settlement
Parties, which obligations shall be enforceable by each Settlement Party against
each other Settlement Party and by the Creditors’ Committee (solely to the
extent expressly provided for under the Settlement Agreement) in accordance with
the terms of the Settlement Agreement and this Order.

 

23.                               Notwithstanding anything in this Order or the
Settlement Agreement to the contrary, and in light of the integrated nature of
the settlements and compromises embodied in this Order and the Settlement
Agreement, in the event that (i) a court of competent jurisdiction enters a
final order ruling that this Order or any of the transactions contemplated
hereby or in the Settlement Agreement are void, invalid, illegal or
unenforceable in any material respect, (ii) any

 

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of the transactions contemplated by this Order or the Settlement Agreement are
reversed, vacated, overturned, voided or unwound in any material respect, or
(iii) this Order is reversed, vacated, overturned or amended in any material
respect, then in each case, the entirety of this Order (other than this
paragraph 23) and the Settlement Agreement (other than Section III.y. thereof)
shall be void ab initio and of no force and effect and, during any subsequent
proceeding, the Settlement Parties and the Creditors’ Committee shall not assert
claim preclusion, issue preclusion, estoppel or any similar defense in respect
of rights and claims of the Settlement Parties that were the subject of this
Order and the Settlement Agreement prior to this Order and the Settlement
Agreement being of no force or effect.

 

24.                               In furtherance of Section III.x. of the
Settlement Agreement, in the event that Dynegy files a petition for bankruptcy
protection under the Bankruptcy Code prior to the Settlement Effective Date,
Dynegy is directed to file a motion to assume the Settlement Agreement pursuant
to section 365 of the Bankruptcy Code on the first day of its bankruptcy case.

 

25.                               All applicable stays under the Bankruptcy
Code, the Bankruptcy Rules or the Local Bankruptcy Rules of the Southern
District of New York are hereby waived, and the terms and conditions of this
Order shall be immediately effective and enforceable upon its entry.

 

26.                               This Court shall retain continuing
jurisdiction with respect to all matters related to or arising from this Order
and the Settlement Agreement or their implementation, including, without
limitation, to the extent that any of the Settlement Parties subsequently files
for bankruptcy (or is otherwise subject to bankruptcy proceedings) or is
otherwise subject to proceedings in any other court.

 

Dated: [                ]

 

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Poughkeepsie, New York

 

 

 

 

THE HONORABLE CECELIA G. MORRIS

 

CHIEF UNITED STATES BANKRUPTCY JUDGE

 

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