Exhibit 10.1

EXECUTION VERSION

SETTLEMENT AGREEMENT

This SETTLEMENT AGREEMENT (this “Agreement”) is made and entered into as of
February 18, 2014 (the “Execution Date”), by and among: (a) Edison Mission
Energy (the “Company” or “EME”) on behalf of itself and its direct and indirect
subsidiaries (such subsidiaries, including each of the Debtors (as defined
herein), collectively, the “Company Subsidiaries”); (b) Edison International
(“EIX”) on behalf of itself and its subsidiary Edison Mission Group Inc. (“EMG”)
and EMG’s direct and indirect subsidiaries other than the Company and the
Company Subsidiaries (EMG and such subsidiaries, collectively, the “EMG
Subsidiaries”); and (c) certain holders of the Senior Notes (as defined herein)
that are party hereto (each a “Consenting Noteholder” and collectively, the
“Consenting Noteholders”). The parties above are each sometimes referred to
herein as a “Party,” and collectively, as the “Parties.” Capitalized terms not
otherwise defined in this Agreement shall have the meanings ascribed to them in
Section 1 hereof.

RECITALS

WHEREAS, EIX is the common parent of the affiliated group of corporations which
duly elects to file a Consolidated Return (the “Consolidated Group”);

WHEREAS, the Company directly or indirectly owns and holds equity interests in
each Company Subsidiary (including each Debtor);

WHEREAS, the Company issued the Senior Notes in the original principal amount of
$3,700,000,000 pursuant to the Indentures;

WHEREAS, following the commencement of the Chapter 11 Cases, the Debtors and the
Official Committee of Unsecured Creditors conducted an extensive investigation
on behalf of the Debtors’ bankruptcy estates into causes of action and Claims
that the estates and their creditors potentially could assert against EIX, its
subsidiaries, and directors and officers of EIX, its subsidiaries, and EME and,
as a result of this investigation and discussions among the Parties, the Debtors
have determined, in their reasonable judgment and with the approval of the
Consenting Noteholders that are party to this Agreement, that the settlement
transaction contemplated by this Agreement is in the best interests of the
Debtors, their estates, and their respective creditors and other stakeholders;

WHEREAS, the Plan of Reorganization shall be amended on the terms set forth in
the amended Plan of Reorganization attached as Exhibit A to implement the terms
of this Agreement and effect the settlement and release of EIX, its
subsidiaries, and the directors and officers of EIX, its subsidiaries, and EME
by the Debtors, their estates, their respective creditors and other
stakeholders, and the Company Subsidiaries and their creditors, on the terms set
forth in this Agreement and the amended Plan of Reorganization attached as
Exhibit A; and

WHEREAS, the Parties have negotiated, and now seek to effectuate, the Settlement
Transaction through the Parties’ entry into this Agreement and consummation of
the transactions contemplated thereby.

 

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NOW, THEREFORE, in consideration of the promises and mutual covenants and
agreements set forth herein, and for other valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, each Party, intending to be
legally bound hereby, agrees as follows.

AGREEMENT

 

1. Definitions.

 

  a. “2012 California EIX Group Apportionment Factor” means 74%.

 

  b. “2013 California EIX Group Apportionment Factor” means 67%.

 

  c. “2013 Tax Attributes” means a good faith estimate of the tax effected
federal and net California taxable losses (income) and credits of the Company
and the Company Consolidated Subsidiaries in 2013, consistent with past EME
practice and filed tax returns, less $11,233,000 of tax sharing payments made
under the Tax Sharing Agreements, as determined pursuant to the provisions of
Section 3 of this Agreement. The 2013 Tax Attributes shall be determined by
using the 2013 California EIX Group Apportionment Factor for purposes of
determining the tax effected net California losses (income) of the Company and
Company Consolidated Subsidiaries.

 

  d. “2014 Tax Attributes” means a good faith estimate of the tax effected
federal and net California taxable losses (income) and credits of the Company
and the Company Consolidated Subsidiaries from January 1, 2014 through the
Effective Date, consistent with past EME practice and filed tax returns,
including Tax Effected Federal NRG Transaction Gain/Loss and Tax Effected
California NRG Transaction Gain/Loss, and income arising from discharge of
interest on the Senior Notes accrued from December 17, 2012, through
December 31, 2013, but excluding any reduction due to cancellation of
indebtedness income, as determined pursuant to the provisions of Section 3 of
this Agreement.

 

  e. “2014 California EIX Group Apportionment Factor” means 87.66%.

 

  f. “2015 Note Amount” means one-half of the Adjustment Amount plus an amount
equal to 5.0 percent per annum of one-half of the Adjustment Amount compounded
semiannually from the Effective Date through September 30, 2015, subject to the
terms and conditions of the EIX 2015 Note.

 

  g. “2016 Note Amount” means one-half of the Adjustment Amount plus an amount
equal to 5.0 percent per annum of one-half of the Adjustment Amount compounded
semiannually from the Effective Date through September 30, 2016, subject to the
terms and conditions of the EIX 2016 Note.

 

  h.

“Adjusted NRG Proceeds Amount” means (i) the sum of the Cash Purchase Price (as
defined in the NRG Agreement) and the fair market value of the Stock Purchase

 

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  Price (as defined in the NRG Agreement) on the Effective Date; minus (ii) the
Waterfall Payment Amount.

 

  i. “Adjustment Amount” means the product of (i) 50% and (ii) the amount of
(A) Total Company Tax Attributes in excess of (B) four hundred fifty million
U.S. dollars ($450,000,000).

 

  j. “Agreement” has the meaning ascribed to it in the preamble.

 

  k. “Amended Plan of Reorganization” means the Plan of Reorganization as
modified as set forth on Exhibit A attached hereto, as may be further amended or
modified from time to time in a manner not inconsistent with this Agreement (and
with respect to terms implementing this Agreement, by agreement of EME, EIX, and
the Required Consenting Noteholders).

 

  l. “APA Notice of Disagreement” means the “Notice of Disagreement” as defined
in the NRG Agreement.

 

  m. “Approval Order” means an order of the Bankruptcy Court approving this
Agreement and the Settlement Transaction, which order shall be acceptable to the
Debtors, the Consenting Noteholders, and EIX. The Approval Order may be the
Confirmation Order, provided that the Confirmation Order must be acceptable to
EIX solely with respect to terms that affect the rights of EIX under this
Agreement.

 

  n. “Asserted Claims” means all Claims against the entities and individuals
named as defendants in the draft complaint attached to the Motion of Official
Committee of Unsecured Creditors of Edison Mission Energy, et al., Pursuant to
11 U.S.C. §§ 105(a), 1103(c) and 1109(b), for Entry of an Order (A) Granting
Leave, Standing and Authority to Prosecute, and Sole Authority to Settle,
Certain Claims on Behalf of the Debtors’ Estates and (B) Authorizing the
Committee to Direct and Control Certain Accounting Professionals [Docket
No. 1054].

 

  o.

“Assumed Liabilities” means, collectively, any liability, whether or not
contingent, on account of any of the following: (i) any United States federal or
any state income taxes of the Consolidated Group, the Company, or any Company
Subsidiary, including any interest or penalties and any taxes or charges on
account of any audit related to Edison Mission Energy Taupo Ltd.; and (ii) any
and all obligations or liabilities of the Company or the Company Subsidiaries
(or any affiliate for purposes of the Employee Retirement Income Security Act of
1974) in respect of current and/or former employees of the Company or the
Company Subsidiaries (and their respective beneficiaries) or otherwise
(including with respect to any operational or documentary defects, prohibited
transactions, or fiduciary breaches), whether direct to participants or to any
plan, trust (including any multi-employer fund), the Pension Benefit Guaranty
Corporation, or otherwise, under or in respect of any qualified pension plan,
any non-qualified executive pension plan, other executive retirement plan, or
deferred compensation plan administered, sponsored, or maintained, or required
to be contributed to by EIX or

 

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  SCE (or their affiliates other than the Company and/or the Company
subsidiaries), for which the Company or the Company Subsidiaries could have
liability; provided that, for the avoidance of doubt, (1) such plans shall
include those plans listed on Schedule 4 and (2) the “Assumed Liabilities” shall
not include the Retained Liabilities specified in clauses (i)–(iii) of
Section 1.yyy hereof.

 

  p. “Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C.
§§ 101–1532, as may be amended from time to time.

 

  q. “Bankruptcy Court” means the United States Bankruptcy Court for the
Northern District of Illinois having jurisdiction over the Chapter 11 Cases,
and, to the extent of the withdrawal of any reference under 28 U.S.C. § 157,
such other court having jurisdiction over all or any portion of the Chapter 11
Cases.

 

  r. “Bankruptcy Expenses Adjustment Amount” means the portion of the
$22,440,269 of bankruptcy expenses of the Company and Company Subsidiaries that
were deducted on the 2012 Consolidated Return of the Consolidated Group which
should have been capitalized.

 

  s. “Business Days” has the meaning ascribed to it in the Amended Plan of
Reorganization.

 

  t. “Capistrano” means Capistrano Wind Holdings, Inc.

 

  u. “Chapter 11 Cases” means the jointly administered chapter 11 cases
commenced by the Debtors in the Bankruptcy Court and styled In re Edison Mission
Energy, et al., No. 12-49219 (JPC).

 

  v. “Claim” means all legal and equitable claims, causes of action and/or
rights to relief, including any claims encompassed within the definition of
Claim in section 101(5) of the Bankruptcy Code, including, but not limited to,
Asserted Claims.

 

  w. “Commercial Relationship Claims” mean any Claims deriving from contractual
or commercial arrangements among SCE and certain of the Company Subsidiaries as
set forth on Schedule 3 to this Agreement.

 

  x. “Committee” has the meaning ascribed to it in the Amended Plan of
Reorganization.

 

  y. “Company” has the meaning ascribed to it in the preamble.

 

  z. “Company Consolidated Subsidiaries” means those corporations, the majority
of whose voting stock or other controlling ownership interest is owned, directly
or indirectly, by the Company and which are included in a Consolidated Return
filed by the Consolidated Group.

 

  aa. “Company Subsidiaries” has the meaning ascribed to it in the preamble.

 

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  bb. “Conditions Precedent” means (i) the delivery to EIX of an opinion from
Kirkland & Ellis LLP, substantially in the form previously agreed to by the
Parties; (ii) execution of the Escrow Agreement by the Reorganization Trust and
the Escrow Agent and funding of the Escrow Account, (iii) execution of the NRG
Side Letter and compliance by the Company with the obligations under Sections 1
and 2 of the NRG Side Letter prior to the closing of the NRG Transactions;
(iv) the Approval Order has been entered in the Chapter 11 Cases, and (v) the
Confirmation Order has been entered in the Chapter 11 Cases.

 

  cc. “Confirmation Order” means the order of the Bankruptcy Court, which order
shall be acceptable to the Debtors, the Consenting Noteholders, and (solely with
respect to terms that affect the rights of EIX under this Agreement) EIX,
confirming the Amended Plan of Reorganization under section 1129 of the
Bankruptcy Code.

 

  dd. “Consenting Noteholder” has the meaning ascribed to it in the preamble.
For the avoidance of doubt, each Consenting Noteholder shall also be a party to
the Plan Sponsor Agreement.

 

  ee. “Consolidated Group” has the meaning ascribed to it in the preamble.

 

  ff. “Consolidated Return” means a federal income tax return filed with respect
to the Consolidated Group pursuant to Section 1551 of the Tax Code and/or a
California franchise or income tax return or report filed with respect to the
Consolidated Group pursuant to applicable sections of the California tax code.

 

  gg. “Debtors” collectively refers to the Company; Camino Energy Company;
Chestnut Ridge Energy Company; Edison Mission Energy Fuel Services, LLC; Edison
Mission Fuel Resources, Inc.; Edison Mission Finance Co.; Edison Mission Fuel
Transportation, Inc.; Edison Mission Holdings Co.; Edison Mission Midwest
Holdings Co.; EME Homer City Generation L.P.; Homer City Property Holdings,
Inc.; Midwest Finance Corp.; Midwest Generation EME, LLC; Midwest Generation,
LLC; Midwest Generation Procurement Services, LLC; Midwest Peaker Holdings,
Inc.; Mission Energy Westside, Inc.; San Joaquin Energy Company; Southern Sierra
Energy Company; and Western Sierra Energy Company.

 

  hh. “Disagreement Notice Date” has the meaning ascribed to it in Section 3.c
of this Agreement.

 

  ii. “Disputed Claim” has the meaning ascribed to it in the Amended Plan of
Reorganization.

 

  jj. “Disputed Claims Reserve Amount” has the meaning ascribed to it in the
Amended Plan of Reorganization.

 

  kk. “Effective Date” has the meaning ascribed to it in the Amended Plan of
Reorganization.

 

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  ll. “Effective Date Cash Amount” means two hundred twenty-five million U.S.
dollars ($225,000,000) in immediately available funds.

 

  mm. “EIX” has the meaning ascribed to it in the preamble.

 

  nn. “EIX 2015 Note” means a zero-coupon note issued by EIX in favor of the
Reorganization Trust in the amount of the 2015 Note Amount, which note shall be
divisible in accordance with Section 2.c of this Agreement. For the avoidance of
doubt, the principal amount of the EIX 2015 Note shall be equal to the 2015 Note
Amount.

 

  oo. “EIX 2016 Note” means a zero-coupon note issued by EIX in favor of the
Reorganization Trust in the amount of the 2016 Note Amount, which note shall be
divisible in accordance with Section 2.c of this Agreement. For the avoidance of
doubt, the principal amount of the EIX 2016 Note shall be equal to the 2016 Note
Amount.

 

  pp. “EIX Notes” means, collectively, the EIX 2015 Note and the EIX 2016 Note,
the form of which is attached hereto as Exhibit B.

 

  qq. “EIX Released Parties” means EIX, the EMG Subsidiaries,
Post-Reorganization EME, SCE, their respective subsidiaries (other than the
Company and the Company Subsidiaries), and their respective current and former
officers, directors, principals, members, employees, agents, financial advisors,
attorneys, accountants, investment bankers, trustees, managers, consultants,
insurers (but only if the insurer has given the EME Released Parties a release
on substantially the same terms set forth in Section 2.g of this Agreement),
representatives, and other professionals, in each case in their capacity as
such, and/or in any such capacity on behalf of the Company, including, but not
limited to, all entities and individuals named as proposed defendants with
respect to Asserted Claims.

 

  rr. “EIX Releasing Parties” means EIX, the EMG Subsidiaries,
Post-Reorganization EME, their respective subsidiaries (other than the Company,
the Company Subsidiaries, and SCE and its subsidiaries), and their respective
current and former respective officers, directors, principals, members,
employees, agents, financial advisors, attorneys, accountants, investment
bankers, trustees, managers, consultants, insurers (but only if the insurer has
given the EME Released Parties a release on substantially the same terms set
forth in Section 2.g of this Agreement), representatives, and other
professionals, in each case in their capacity as such.

 

  ss. “EME Released Parties” means the Company, the Company Subsidiaries, the
Reorganization Trust and their respective current and former respective
officers, directors, principals, members, employees, agents, financial advisors,
attorneys, accountants, investment bankers, trustees, managers, consultants,
representatives, and other professionals, in each case in their capacity as
such.

 

  tt.

“EME Releasing Parties” means the Company, the Company Subsidiaries, the
Reorganization Trust and their respective current and former respective
officers,

 

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  directors, principals, members, employees, agents, financial advisors,
attorneys, accountants, investment bankers, trustees, managers, consultants,
representatives, and other professionals, in each case in their capacity as
such.

 

  uu. “EMG Subsidiaries” has the meaning ascribed to it in the preamble.

 

  vv. “Escrow Account” has the meaning ascribed to it in Section 8.d of this
Agreement.

 

  ww. “Escrow Agent” means the third-party escrow agent under the Escrow
Agreement.

 

  xx. “Escrow Agreement” means the agreement between EIX, the Reorganization
Trust, and the Escrow Agent, which agreement shall be consistent with the terms
set forth in Exhibit C hereof.

 

  yy. “Execution Date” has the meaning set forth in the preamble.

 

  zz. “Final Cash Purchase Price” has the meaning ascribed to it in the NRG
Agreement.

 

  aaa. “Final Schedule” has the meaning ascribed to it in Section 3.b of this
Agreement.

 

  bbb. “Indentures” means: (i) that certain Indenture, dated as of June 6, 2006,
as the same has been amended, modified, waived, or supplemented through the date
hereof, by and among the Company and Wells Fargo Bank, N.A., as trustee,
providing for the issuance of 7.50 percent Senior Notes due 2013 and 7.75
percent Senior Notes due 2016; and (ii) that certain Indenture, dated as of
May 7, 2007, as the same has been amended, modified, waived, or supplemented
through the date hereof, by and among the Company and Wells Fargo Bank, N.A., as
trustee, providing for the issuance of 7.00 percent Senior Notes due 2017, 7.20
percent Senior Notes due 2019, and 7.625 percent Senior Notes due 2027.

 

  ccc. “Initial Escrow Amount” means $50,000,000 in cash or an equivalent face
amount of EIX Notes.

 

  ddd. “KPMG Spreadsheet” means that certain spreadsheet entitled Estimated EME
Attributes 2 14 14_v5 KPMG.xlsx forwarded to EIX by email at 10:42 AM CST,
February 14, 2014.

 

  eee. “Noteholders” means the holders of the Senior Notes.

 

  fff. “Notice of Disagreement” has the meaning ascribed to it in Section 3.c of
this Agreement.

 

  ggg. “NRG” means NRG Energy, Inc.

 

  hhh. “NRG Agreement” means that certain Asset Purchase Agreement dated
October 18, 2013, by and among EME, NRG and NRG Energy Holdings, Inc., a
Delaware corporation, as amended.

 

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  iii. “NRG Bankruptcy Expenses Adjustment Amount” means the portion of the
Bankruptcy Expenses Adjustment Amount which should have been capitalized into
the basis of EME assets being sold to NRG.

 

  jjj. “NRG Side Letter” means that certain letter agreement, dated as of the
date hereof, among EIX, EME, and NRG related to Capistrano, Mission Funding
Alpha, LLC, and certain other matters.

 

  kkk. “NRG Transaction” means the asset sale and related transactions
contemplated by the NRG Agreement and the Plan Sponsor Agreement.

 

  lll. “Party” has the meaning ascribed to it in the preamble.

 

  mmm. “Plan of Reorganization” means the Debtors’ Second Amended Joint Chapter
11 Plan of Reorganization, dated December 19, 2013 [Docket No. 1720], as
amended, modified, or supplemented from time to time.

 

  nnn. “Plan Sponsor Agreement” means that certain Plan Sponsor Agreement, dated
as of October 17, 2013, among the Debtors, the Committee, the holders of the
Senior Notes party thereto, and NRG, as approved by the Bankruptcy Court
pursuant to the Order Granting Motion to Approve (I) Entry into Plan Sponsor
Agreement, (II) Sponsor Protections, and (III) Related Relief, dated October 24,
2013 [Docket No. 1424].

 

  ooo. “Plan Supplement” has the meaning ascribed to it in the Amended Plan of
Reorganization.

 

  ppp. “Post-Reorganization EME” means Edison Mission Energy as retained by
Mission Energy Holding Company following the Effective Date of the Amended Plan
of Reorganization.

 

  qqq. “Pre-2013 Tax Attributes” means the sum of (i) Pre-2013 Tax Effected
Federal Attributes, and (ii) Pre-2013 Tax Effected California NOLs.

 

  rrr. “Pre-2013 Tax Effected Federal Attributes” means $1,112,904,916 minus the
product of (i) 35% and (ii) the Bankruptcy Expenses Adjustment Amount.

 

  sss. “Pre-2013 Tax Effected California NOLs” means $73,684,715 minus the
product of (i) 5.746%, (ii) the Bankruptcy Expenses Adjustment Amount, and
(iii) the 2012 California EIX Group Apportionment Factor.

 

  ttt.

“Qualified Marketmaker” means an entity that (i) holds itself out to the market
as standing ready in the ordinary course of its business to purchase from
customers and sell to customers Claims against the Company and its affiliates
(including debt securities, the Senior Notes or other debt) or enter with
customers into long and short positions in Claims against the Company and its
affiliates (including debt securities, the Senior Notes or other debt), in its
capacity as a dealer or market maker in such Claims against the Company and its
affiliates and (ii) is in fact

 

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  regularly in the business of making a market in claims against issuers or
borrowers (including debt securities or other debt).

 

  uuu. “Release of EIX Released Parties” means the release by each EME Releasing
Party in favor of each EIX Released Party pursuant to Section 2.f of this
Agreement.

 

  vvv. “Release of EME Released Parties” means the release by each EIX Releasing
Party in favor of each EME Released Party pursuant to Section 2.g of this
Agreement.

 

  www. “Reorganization Trust” means the trust or other entity to be established
on the Effective Date in accordance with, and to implement, the Amended Plan of
Reorganization, which, among other things, is a successor to the Company with
respect to certain rights and obligations as set forth in Section 27 of this
Agreement.

 

  xxx. “Required Consenting Noteholders” means the Noteholders representing at
least 75 percent of the outstanding principal amount of Senior Notes held by all
Consenting Noteholders.

 

  yyy. “Retained Liability” means, collectively: (i) any Retiree Benefits;
(ii) any liabilities of the Company to NRG in connection with the NRG
Transaction; (iii) any liabilities of the Reorganization Trust under Section 6.b
of this Agreement; and (iv) any other liabilities of the Company and the Company
Subsidiaries that are not Assumed Liabilities, including liabilities for taxes
other than United States federal or state income taxes.

 

  zzz. “Retiree Benefits” means the retiree benefits (as such term is defined
under section 1114(a) of the Bankruptcy Code) and any retiree employee
assistance benefits that are or have been maintained, sponsored, or funded by
the Company or Company Subsidiaries under the Edison International Welfare
Benefit Plan prior to the Effective Date.

 

  aaaa. “Review Period” has the meaning ascribed to it in Section 3.c of this
Agreement.

 

  bbbb. “SCE” means Southern California Edison.

 

  cccc. “Schedule Submission Date” has the meaning ascribed to it in Section 3.d
of this Agreement.

 

  dddd. “Senior Notes” means the notes issued pursuant to the Indentures.

 

  eeee. “Settlement Ancillary Documents” means the EIX Notes, the NRG Side
Letter, and any other agreements, instruments, or other documents executed by
any Party in connection with this Agreement.

 

  ffff. “Settlement Transaction” means the transactions contemplated by this
Agreement, including confirmation of the Amended Plan of Reorganization.

 

  gggg. “Tax Code” means the Internal Revenue Code of 1986, as amended.

 

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  hhhh. “Tax Attribute Reduction Amount” means $29,000,000.

 

  iiii. “Tax Effected California CODI” means $1,519,012.

 

  jjjj. “Tax Effected California NRG Transaction Gain/Loss” means the product of
(i) 5.746%, (ii) the 2014 California EIX Group Apportionment Factor, and
(iii) subject to adjustment in accordance with Schedule 2, (A) an estimate of
the Cash Purchase Price (as defined in the NRG Agreement), plus (B) an estimate
of the fair market value of the Stock Purchase Price (as defined in the NRG
Agreement) as of the Effective Date, plus (C) an estimate of the amount treated
as realized by the Company for California income tax purposes as a result of the
assumption of liabilities in connection with the NRG Transaction determined in
accordance with Section 1001 of the Tax Code and other applicable law,
minus (D) an estimate of the adjusted California tax basis of assets of the
Company and the Company Subsidiaries as of the Effective Date, which assets are
to be transferred to NRG pursuant to the NRG Agreement. If the amount computed
pursuant to the preceding sentence is positive, such amount shall constitute a
Tax Effected California NRG Transaction Gain and if the amount computed pursuant
to the preceding sentence is negative, such amount shall constitute a Tax
Effected California NRG Transaction Loss.

 

  kkkk. “Tax Effected Federal CODI” means the product of (i) 35% and (ii) the
excess of (A) the sum of (x) $3,853,993,752 of principal and accrued interest on
the Senior Notes as of December 17, 2012 and (y) a good faith estimate of any
other accrued liabilities of EME being discharged pursuant to the Amended Plan
of Reorganization to the extent that payment of such liabilities would not have
given rise to a deduction for federal income tax purposes over (B) subject to
adjustment in accordance with Schedule 2, the sum of (1) the Adjusted NRG
Proceeds Amount, (2) the Effective Date Cash Amount, (3) the 2015 Note Amount,
and (4) the 2016 Note Amount, as determined pursuant to the provisions of
Section 3 of this Agreement.

 

  llll. “Tax Effected Federal NRG Transaction Gain/Loss” means the product of
(i) 35% and (ii) subject to adjustment in accordance with Schedule 2, (A) an
estimate of the Cash Purchase Price (as defined in the NRG Agreement), plus
(B) an estimate of the fair market value of the Stock Purchase Price (as defined
in the NRG Agreement) as of the Effective Date, plus (C) an estimate of the
amount treated as realized by the Company for federal income tax purposes as a
result of the assumption of liabilities in connection with the NRG Transaction
determined in accordance with Section 1001 of the Tax Code and other applicable
law, minus (D) an estimate of the adjusted federal tax basis of assets of the
Company and the Company Subsidiaries as of the Effective Date, which assets are
to be transferred to NRG pursuant to the NRG Agreement. If the amount computed
pursuant to the preceding sentence is positive, such amount shall constitute a
Tax Effected Federal NRG Transaction Gain and if the amount computed pursuant to
the preceding sentence is negative, such amount shall constitute a Tax Effected
Federal NRG Transaction Loss.

 

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  mmmm. “Tax Sharing Agreements” means that certain Mission Energy Holding
Company Amended and Restated Tax Allocation Agreement, dated as of February 13,
2012, among Mission Energy Holding Company (“MEHC”), EME, and Capistrano Wind
Holdings, Inc. and that certain “Administrative Agreement Re Tax Allocation
Payments,” dated July 2, 2001, by and among EIX, SCE, EMG, Edison Capital, MEHC,
EME, Edison O&M Services, Edison Enterprises, and Mission Land Company.

 

  nnnn. “Total Company Tax Attributes” means the sum of (i) Pre-2013 Tax
Attributes, (ii) 2013 Tax Attributes, and (iii) 2014 Tax Attributes, less
(x) Tax Effected Federal CODI, (y) Tax Effected California CODI, and (z) the Tax
Attribute Reduction Amount.

 

  oooo. “Transfer” has the meaning ascribed to it in Section 14.e of this
Agreement.

 

  pppp. “True-Up Statement” has the meaning set forth in the NRG Agreement.

 

  qqqq.

“Waterfall Payment Amount” means, to the extent not assumed by EIX under this
Agreement or NRG under the NRG Agreement, the sum of the following without
duplication (as such terms are defined in the Amended Plan of Reorganization,
but in each case solely as such terms apply to Debtors (other than the Homer
City Debtors, except to the extent that amounts are paid from proceeds
referenced in clause (i) of the definition of Adjusted NRG Proceeds Amount) and
Non-Debtor Subsidiaries): (a) Allowed Secured Claims; (b) Allowed Administrative
Claims (including, without limitation, Accrued Professional Compensation Claims
and the Professional Fee Escrow Amount (and any estimates thereof under Article
III.C.3 of the Amended Plan of Reorganization); (c) Allowed Priority Tax Claims;
(d) Allowed Other Priority Claims; (e) Allowed General Unsecured Claims against
Debtor Subsidiaries; (f) the Agreed PoJo Cure Amount; (g) the Compensation and
Benefits Fund Escrow; (h) amounts necessary under the Exit Plan; (i) the
Supporting Noteholder Fees, (j) the PoJo Restructuring Fees, (k) the EME Senior
Notes Indenture Trustee Fees; (l) the Disputed Claims Reserve Amount (including
amounts reserved to pay the “PBOP” claims (referenced in cell D65 of the 2014
tab of the KPMG Spreadsheet), portions of the “State tax matters” (referenced in
cell D66 of the 2014 tab of the KPMG Spreadsheet), and Class B3 Unsecured Claims
(referenced in cell D68 of the 2014 tab of the KPMG Spreadsheet)); (m) any
additional amount reserved by the Reorganization Trust to pay Retained
Liabilities that do not constitute Disputed Claims (other than the Initial
Escrow Amount) (including amounts reserved to pay liabilities of Non-Debtor
Subsidiaries including the remainder of the “State tax matters” (referenced in
cell D66 of the 2014 tab of the KPMG Spreadsheet); provided, however, that, for
purposes of determining the Waterfall Payment Amount, the sum of (l) and
(m) shall not exceed $182,000,000; and (n) any other amounts paid under the
Amended Plan of Reorganization or the Confirmation Order (other than the Initial
Escrow Amount) from proceeds referenced in clause (i) of the definition of
Adjusted NRG Proceeds Amount other than (1) amounts paid to the Noteholders or
for liabilities described in clause (ii)(A)(y) of the definition of “Tax
Effected Federal CODI,” (or to the

 

11

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Reorganization Trust for the benefit of the Noteholders or holders of Claims for
such liabilities), (2) the Wind Down Budget for future expenditures of the
Reorganization Trust, or (3) other expenses incurred by the Reorganization Trust
for the benefit of the Noteholders or holders of Claims for liabilities
described in clause (ii)(A)(y) of the definition of “Tax Effected Federal CODI.”

 

2. Settlement Transaction.

 

  a. Effectiveness of Agreement. Following the execution of this Agreement by
the Company (on behalf of itself and the Company Subsidiaries), EIX (on behalf
of itself and the EMG Subsidiaries), and Consenting Noteholders holding at least
a majority of the outstanding principal amount of the Senior Notes, the
obligation of the Parties to perform under this Agreement shall become effective
and binding upon each of the Parties (except with respect to the Company and the
Company Subsidiaries, whose obligations hereunder shall become effective and
binding upon entry of the Approval Order by the Bankruptcy Court).

 

  b. Settlement Consideration. In full and final satisfaction, compromise,
settlement, release, and discharge of and in exchange for each Claim by the EME
Releasing Parties against the EIX Released Parties, including EIX, its officers
and directors, and those pre-petition officers and directors of EME against whom
the Company and its creditors have asserted Claims, and other consideration set
forth herein, EIX, on behalf of itself and the other EIX Released Parties,
including its officers and directors and those pre-petition officers and
directors of EME against whom the Company and its creditors have asserted
Claims, shall pay to the Reorganization Trust (or, with respect to the EIX
Notes, the permitted assignees thereof), an amount equal to the sum of (x) the
Effective Date Cash Amount plus (y) the Adjustment Amount plus (z) interest on
the Adjustment Amount as set forth in the calculation of the 2015 Note Amount
and the 2016 Note Amount, and shall assume the Assumed Liabilities.

 

  (i) Effective Date Payment. On the Effective Date, EIX shall pay the Effective
Date Cash Amount to the Reorganization Trust by wire transfer of immediately
available funds.

 

  (ii) Adjustment Amount and Interest. EIX shall pay the 2015 Note Amount on or
before September 30, 2015 and the 2016 Note Amount on or before September 30,
2016, in each case to the Reorganization Trust or the permitted assignees of the
EIX Notes pursuant to the terms and conditions of the applicable EIX Notes.

 

  c. EIX Notes. EIX’s obligation to pay the Adjustment Amount shall be evidenced
by the EIX Notes. The EIX Notes shall be zero-coupon notes, transferable in
whole or in part (and, if in part, in face amounts of not less than
$10 million), and shall have no other restrictions on assignment, participation,
or other disposition thereof. The obligations of EIX under the EIX Notes shall
be absolute and not subject to offset, defense, or counterclaim of any kind. EIX
shall be entitled to prepay the EIX Notes

 

12

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  (provided that for the avoidance of doubt any prepayment of the principal of
the EIX Notes includes interest pursuant to the definition of such EIX Notes
herein). The Reorganization Trust or its designee shall act as paying agent with
respect to the EIX Notes and will register all transfers by any holders of the
EIX Notes. At the Reorganization Trust’s expense, the Parties shall cooperate in
good faith regarding the establishment of a third-party paying and/or transfer
agent with respect to the EIX Notes. EIX shall issue, execute, and deliver to
the Reorganization Trust the EIX Notes (in such number and denominations as
requested by the Reorganization Trust but in no event shall any EIX Note be in a
face amount less than $10 million) at the following times and in the following
amounts:

 

  (i) Subject to subparagraph (iii) below, if EIX does not provide a Notice of
Disagreement on or before the Disagreement Notice Date, then on the date that is
five Business Days after the Disagreement Notice Date, EIX shall issue, execute
and deliver to the Reorganization Trust (A) EIX 2015 Notes in an aggregate
principal amount equal to the 2015 Note Amount and (B) EIX 2016 Notes in an
aggregate principal amount equal to the 2016 Note Amount.

 

  (ii) Subject to subparagraph (iii) below, if EIX provides a Notice of
Disagreement by the Disagreement Notice Date, then: (x) on the date that is five
Business Days after Schedule Submission Date, EIX shall, issue, execute and
deliver to the Reorganization Trust (A) EIX 2015 Notes in an aggregate principal
amount equal to the 2015 Note Amount and (B) EIX 2016 Notes in an aggregate
principal amount equal to the 2016 Note Amount, in the case of each of (A) and
(B), calculated as if the Adjustment Amount were determined on the basis of
EIX’s Final Schedule, and (y) if Ernst & Young1 chooses the Reorganization
Trust’s Final Schedule, on the date that is five Business Days after such
determination, EIX shall issue, execute and deliver to the Reorganization Trust
(X) EIX 2015 Notes in an aggregate principal amount equal to the difference
between the 2015 Note Amount calculated on the basis of the Reorganization
Trust’s Final Schedule minus the 2015 Note Amount calculated pursuant to clause
(A) above and (Y) EIX 2016 Notes in an aggregate principal amount equal to the
difference between the 2016 Note Amount calculated on the basis of the
Reorganization Trust’s Final Schedule minus the 2016 Note Amount calculated
pursuant to clause (B) above.

 

  (iii) If the Final Cash Purchase Price has not been determined pursuant to
Section 1.3(b) of the NRG Agreement on or prior to the date that is five
(5) Business Days before EIX is otherwise required to deliver EIX 2015 Notes or
EIX 2016 Notes pursuant to subparagraphs (i) or (ii) above, then (x) the 2015
Note Amount and the 2016 Note Amount shall, for purposes of

 

 

1 

As used herein, “Ernst & Young” means Ernst & Young or, if Ernst & Young
declines the assignment, another accounting firm to be named.

 

13

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  subparagraph (i) or (ii), be calculated as if the Adjustment Amount were
determined on the basis of the Cash Purchase Price set forth in the True-Up
Statement or the APA Notice of Disagreement which results in the lower
Adjustment Amount, and (y) on the date that is five Business Days after the
Final Cash Purchase Price has been determined pursuant to Section 1.3(b) of the
NRG Agreement, EIX shall issue, execute and deliver to the Reorganization Trust
(A) EIX 2015 Notes in an aggregate principal amount equal to the difference
between the 2015 Note Amount calculated on the basis of the Final Cash Purchase
Price minus the 2015 Note Amount calculated pursuant to clause (x) above and
(B) EIX 2016 Notes in an aggregate principal amount equal to the difference
between the 2016 Note Amount calculated on the basis of the Final Cash Purchase
Price minus the 2016 Note Amount calculated pursuant to clause (y) above.

 

  d. Assumed Liabilities Settlement Consideration. EIX shall, effective as of
the Effective Date, irrevocably assume and shall faithfully pay, perform,
discharge, and fulfill, and if applicable, comply with, in each case when due or
required, all of the Assumed Liabilities. EIX shall indemnify and hold harmless
the Reorganization Trust, and the Company Subsidiaries, as applicable, from any
obligation to satisfy, pay, perform, discharge, or otherwise fulfill, the
Assumed Liabilities under the Amended Plan of Reorganization or otherwise. EIX,
on behalf of itself and each of the EMG Subsidiaries, waives all rights of
contribution, reimbursement, subrogation, or other rights against the Company
Subsidiaries, the Reorganization Trust, or NRG, as applicable, with respect to
the Assumed Liabilities.

 

  e. Retained Liabilities. The Company and the Company Subsidiaries hereby
(i) agree, on behalf of themselves and the EME Released Parties, that no EIX
Released Party has any obligation under, or liability for, any Retained
Liabilities, and (ii) waive all rights of contribution, reimbursement,
subrogation, or other rights against the EIX Released Parties with respect to
the Retained Liabilities. The Company and the Company Subsidiaries shall
indemnify and hold harmless, the EIX Released Parties from any obligation to
satisfy, pay, perform, discharge, or otherwise fulfill, Claims on account of
Retained Liabilities provided that such indemnity shall be payable and satisfied
solely from the Escrow Account pursuant to Section 8 of this Agreement. Nothing
in this Section 2.e shall be deemed or construed as a commitment to pay or an
allowance of any Claim arising under or relating to the Retained Liabilities.
All Parties’ rights to object to such Claims are expressly preserved and any
allowed Claims arising under or relating to Retained Liabilities shall be
satisfied, compromised, settled, released and discharged in accordance with the
provisions of the Amended Plan of Reorganization.

 

  f.

Release of EIX Released Parties. Effective on and after the Effective Date, each
EME Releasing Party hereby releases each EIX Released Party from any and all
Claims, obligations, rights, suits, damages, causes of action, remedies, and
liabilities whatsoever, including any derivative or representative claims,
whether known or unknown, foreseen or unforeseen, existing or hereinafter
arising, in law,

 

14

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  equity, or otherwise, whether for tort, contract, violations of federal or
state securities laws, or otherwise, that the EME Releasing Parties would have
been legally entitled to assert in their own right (whether individually or
collectively) or on behalf of the holder of any Claim or interest or other
entity, based on or relating to, or in any manner arising from, in whole or in
part, the Chapter 11 Cases, the subject matter of, or the transactions or events
giving rise to, any Claim or interest that is treated in this Agreement or the
Amended Plan of Reorganization, the business or contractual arrangements between
any EME Releasing Party and any EIX Released Party, the restructuring of Claims
and interests before or in the Chapter 11 Cases, the negotiation, formulation,
or preparation of this Agreement or the Settlement Ancillary Documents, or upon
any other act or omission, transaction, agreement, event, or other occurrence
taking place on or before the Effective Date, including, but not limited to, for
the avoidance of doubt, the Asserted Claims; provided that, nothing in this
paragraph shall release any (i) claims against any Party arising under this
Agreement or the Settlement Ancillary Documents, (ii) Commercial Relationship
Claims between SCE and any Company Subsidiary, or (iii) Claims of an EME
Releasing Party in its capacity as an insured against any insurer in its
capacity as an EIX Released Party.

 

  g. Release of EME Released Parties. Effective on and after the Effective Date,
each EIX Releasing Party hereby releases each EME Released Party from any and
all Claims, obligations, rights, suits, damages, causes of action, remedies, and
liabilities whatsoever, including any derivative or representative claims,
whether known or unknown, foreseen or unforeseen, existing or hereinafter
arising, in law, equity, or otherwise, whether for tort, contract, violations of
federal or state securities laws, or otherwise, that the EIX Releasing Parties
would have been legally entitled to assert in their own right (whether
individually or collectively) or on behalf of the holder of any Claim or
interest or other entity, based on or relating to, or in any manner arising
from, in whole or in part, the Chapter 11 Cases, the subject matter of, or the
transactions or events giving rise to, any Claim or interest that is treated in
this Agreement or the Amended Plan of Reorganization, the business or
contractual arrangements between any EIX Releasing Party and any EME Released
Party, the restructuring of Claims and interests before or in the Chapter 11
Cases, the negotiation, formulation, or preparation of the this Agreement, the
Settlement Ancillary Documents, or related agreements, instruments, or other
documents, or upon any other act or omission, transaction, agreement, event, or
other occurrence taking place on or before the Effective Date; provided that
nothing in this paragraph shall release any (i) claims against any Party arising
under this Agreement or the Settlement Ancillary Documents, (ii) Commercial
Relationship Claims between SCE and any Company Subsidiary, or (iii) any Claims
of the EIX Releasing Parties that are Assumed Liabilities (as defined under the
NRG Agreement), which shall be paid and treated in accordance with the Amended
Plan of Reorganization and the NRG Agreement.

 

  h.

Withdrawal of Claims. Upon the Effective Date, EIX, SCE, each EMG Subsidiary,
and each other EIX Releasing Party shall be deemed to have withdrawn with
prejudice all Proofs of Claim (as defined in the Amended Plan of Reorganization)

 

15

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  asserted against any Debtor in the Chapter 11 Cases, other than Proofs of
Claim asserting Claims that are Assumed Liabilities (as defined under the NRG
Agreement), which shall be paid and treated in accordance with the Amended Plan
of Reorganization and the NRG Agreement. The Approval Order shall authorize and
direct the claims agent to designate the foregoing claims as expunged from the
claims register as of the Effective Date.

 

  i. EME Releasing Parties’ Covenant Not to Sue. Effective on and after the
Effective Date, each EME Releasing Party, hereby absolutely, unconditionally,
and irrevocably covenants and agrees that it will not sue (at law, in equity, in
any regulatory proceeding, directly, derivatively, or in a representative
capacity, or otherwise) any EIX Released Party on the basis of any claim or
matter encompassed in whole or in part within the Release of EIX Released
Parties, and will not induce, assist or encourage any other person to assert or
pursue any such claims.

 

  j. EIX Releasing Parties’ Covenant Not to Sue. Effective on and after the
Effective Date, each EIX Releasing Party, hereby absolutely, unconditionally,
and irrevocably covenants and agrees that it will not sue (at law, in equity, in
any regulatory proceeding, directly, derivatively, or in a representative
capacity, or otherwise) any EME Released Party on the basis of any claim or
matter encompassed in whole or in part within the Release of EME Released
Parties, and will not induce, assist or encourage any other person to assert or
pursue any such claims.

 

  k. Third Party Releases.

 

  (i) The EIX Released Parties shall be included in the third-party release,
exculpation and injunction provisions of the Amended Plan of Reorganization as
“Released Parties” and “Exculpated Parties” (each as defined therein). EIX
hereby agrees on behalf of itself and the EMG Subsidiaries to be bound by the
third-party release, exculpation, and injunction provisions of the Amended Plan
of Reorganization with respect to all Released Parties (as defined therein),
including the Consenting Noteholders. Each Consenting Noteholder hereby agrees
on behalf of itself to be bound by the third-party release, exculpation, and
injunction provisions of the Amended Plan of Reorganization with respect to all
Released Parties (as defined in the Amended Plan of Reorganization), including
the EIX Released Parties.

 

  (ii)

Article VIII.G of the Plan of Reorganization shall be amended by deleting it in
its entirety and replacing it with the following in the Amended Plan of
Reorganization: “In addition to the injunction set forth under Article VIII.F
hereof, on the Confirmation Date and effective as of the Effective Date, all
Claims or other Causes of Action that may otherwise be asserted against the EIX
Released Parties or their respective property (other than (1) Claims or other
liabilities against the EIX Released Parties arising under the EIX

 

16

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  Settlement Agreement and the EIX Settlement Ancillary Documents, (2) the
Commercial Relationship Claims (as defined in the EIX Settlement Agreement), and
(3) the Settlement Assumed Liabilities) shall be permanently released and
enjoined pursuant to the Plan, and any such Claims or Causes of Action shall be
paid or treated pursuant to the terms of the Plan.”

 

  l. Modifications to the Plan of Reorganization.

 

  (i) The Amended Plan of Reorganization and Plan Supplement shall be consistent
with this Agreement and shall provide, among other things, that (A) Mission
Energy Holding Company shall retain 100% of the equity interests of the Company,
(B) the Tax Sharing Agreements shall be deemed to have terminated pursuant to
their terms on December 31, 2013, with respect to the Company, and shall not be
assumed by the Company or assigned to NRG, (C) each EIX Released Party shall be
identified as a “Released Party” and an “Exculpated Party;” (D) each EIX
Released Party shall be afforded the protections under the injunction and
exculpation provisions under Article VIII of the Amended Plan of Reorganization;
(E) the Reorganization Trust is the successor in interest of the Company and
Company Subsidiaries for purposes of performing the obligations under,
enforcing, and obtaining the benefits of, the terms of this Agreement; (F) the
Reorganization Trust shall assume all rights and obligations of the Company and
the Company Subsidiaries under the Amended Plan of Reorganization and this
Agreement; (G) the Debtors’ Motion to Establish Notification and Hearing
Procedures For Transfers of, or Claims of Worthlessness with Respect to, Certain
Equity Securities and for Related Relief [Docket No. 16] and any interim or
final orders granting that motion shall cease to be of any further force and
effect on and after the Effective Date; (H) the examination under rule 2004
commenced by the Debtors and the official committee of unsecured creditors and
all related orders or subpoenas authorizing or issued pursuant to the rule 2004
examination shall be deemed terminated and cease to be of any further force or
effect on and after the Effective Date; and (I) the Company will retain certain
assets after the Effective Date pursuant to Section 4.c. Further, to the extent
not already so provided, the Conditions Precedent shall be added to Article X of
the Amended Plan of Reorganization as conditions precedent to consummation of
the Amended Plan of Reorganization and shall be conditions to the consummation
of the Settlement Transaction, which conditions shall be deemed irrevocably
satisfied or waived upon consummation of the Amended Plan of Reorganization.

 

  (ii)

Notwithstanding anything to the contrary in the Order Approving (A) the Adequacy
of the Disclosure Statement, (B) Solicitation and Notice Procedures with Respect
to Confirmation of the Debtors’ Joint Chapter 11 Plan of Reorganization, (C) the
Form of Ballots and Notices in Connection Therewith, and (D) the Scheduling of
Certain Dates with Respect Thereto

 

17

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  [Docket No. 1718], the Debtors shall provide notice to Holders of Impaired
Claims and Impaired Interests (as such terms are defined under the Amended Plan
of Reorganization) of the Amended Plan of Reorganization and provide such
Holders an opportunity of not less than ten (10) Business Days to change their
votes to accept or reject the Amended Plan of Reorganization, or to object to
confirmation of the Amended Plan of Reorganization.

 

  m. Books and Records Access. From and after the Execution Date through the
Effective Date: (i) the Company will reasonably cooperate (subject to customary
nondisclosure or nonuse agreements) with EIX in (A) making the Company’s records
relating to the Company’s business prior to the Effective Date available to EIX
and its representatives, attorneys and accountants on an ongoing basis,
(B) allowing EIX to make and retain non-privileged copies of such records
(including, but not limited to, SAP records) as may reasonably be related to any
Assumed Liabilities or otherwise required to implement the terms of this
Agreement, and (C) making available its personnel and legal and accounting
advisors during regular business hours for that purpose; and (ii) EIX will
reasonably cooperate (subject to customary nondisclosure or nonuse agreements)
with the Company in (A) making EIX records relating to the Company’s business
prior to the Effective Date available to the Company and its representatives,
attorneys and accountants on an ongoing basis and (B) making available its
personnel and legal and accounting advisors during regular business hours for
that purpose. The Reorganization Trust shall retain or maintain access to all
non-privileged books and records (or copies thereof) of the Company and the
Company Subsidiaries (not including books and records maintained by the Company
for the EMG Subsidiaries under services agreements) related to any Assumed
Liabilities or otherwise required to implement the terms of this Agreement and
shall make such books and records reasonably available to EIX and its
representatives, attorneys and accountants; provided that the Parties
acknowledge that the obligations of NRG with respect to access to books and
records by the Reorganization Trust are limited to those set forth in the NRG
Agreement and that the Reorganization Trust will have no obligation to maintain
access to such books and records not provided for in the NRG Agreement.
Notwithstanding the foregoing, at any time after the Effective Date, the
Reorganization Trust may destroy any books and records in its sole discretion,
provided that, the Reorganization Trust shall have given EIX no less than
60-days’ prior written notice of its intent to destroy any such books and
records, and EIX shall have been provided reasonable opportunity to make copies
of or take possession of such books and records at EIX’s sole cost.

 

3. Adjustment Amount.

 

  a.

The Parties acknowledge and agree that Schedule 1 sets forth (x) the Pre-2013
Tax Attributes, Tax Effected California CODI and the Tax Attribute Reduction
Amount, and (y) a good faith estimate based on best available information as of
the Execution Date of (i) the 2013 Tax Attributes, (ii) the 2014 Tax Attributes,
(iii) the

 

18

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  Tax Effected Federal CODI, and (iv) the Total Company Tax Attributes. The
parties agree that Schedule 1 and the calculations associated with the defined
terms referenced therein are based on the KPMG Spreadsheet.

 

  b. Within five (5) Business Days after the later of (a) 30 calendar days after
the last day of the month that includes the Effective Date, and (b) the
Reorganization Trust having delivered to EIX a certificate setting forth its
good faith estimate of the Waterfall Payment Amount and any liabilities
described in clause (ii)(A)(y) of the definition of “Tax Effected Federal CODI”,
the Reorganization Trust shall cause KPMG to deliver to EIX, on behalf of the
Reorganization Trust (x) a schedule setting forth (1) revised estimates of the
amounts set forth in clauses (i) through (iii) of Section 3.a(y) of this
Agreement computed in accordance with the methodology set forth in Schedule 2,
(2) the amounts set forth in Section 3.a(x) (adjusted to to take into account
any changes in the Bankruptcy Expenses Adjustment Amount computed in accordance
with Schedule 2), and (3) the Total Company Tax Attributes calculated on the
basis of the amounts set forth in the immediately preceding clauses (1) and
(2) (the “Final Schedule”) and (y) a written summary setting forth in reasonable
detail the reasons for any changes in excess of $1,000,000 between Total Company
Tax Attributes shown on Schedule 1 and the proposed Final Schedule. The Company
shall provide EIX with copies of all notices and documents delivered by the
Company or NRG pursuant to Sections 1.3(a) and 1.3(b) of the NRG Agreement,
including the True-Up Statement and any Notice of Disagreement. As part of
KPMG’s development of the Final Schedule of Total Company Tax Attributes, KPMG
shall include in their scope of work a review of the amount of assumed
liabilities for purposes of determining EME’s “amount realized” for U.S. federal
and California income tax purposes for purposes of calculating Tax Effected
California NRG Transaction Gain/Loss and Tax Effected Federal NRG Transaction
Gain/Loss, KPMG shall affirm in writing that, based on their review and in their
professional judgment, the amount of liabilities included in “amount realized”
is the appropriate amount to be utilized in determining EME’s Tax Effected
California NRG Transaction Gain/Loss and Tax Effected Federal NRG Transaction
Gain/Loss and shall describe any changes in the amount of such liabilities
included from the amount of liabilities assumed included in preparation of
Schedule 1 to this Agreement.

 

  c.

During the thirty (30) Business Days immediately following delivery of the
proposed Final Schedule (the “Review Period”), EIX shall have the right to
review the proposed Final Schedule. The Reorganization Trust shall make KPMG’s
and its relevant personnel, if any, and books and records in its possession
(including pertinent accounting work papers) reasonably available to EIX and its
representatives, attorneys and accountants (subject to signing customary “hold
harmless” letters as may be reasonably required by KPMG) for purposes of EIX’s
review of the proposed Final Schedule, and shall make reasonable efforts to
enable and facilitate access to the relevant personnel and books and records of
NRG; provided that the Parties acknowledge that the obligations of NRG with
respect to such access are limited to those set forth in the NRG Agreement and
that the Reorganization Trust will have no obligation to obtain or ensure access
not

 

19

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  provided for in the NRG Agreement. EIX will be deemed to have agreed to the
proposed Final Schedule, unless it provides a notice of disagreement (a “Notice
of Disagreement”) no later than five (5) business days after the close of the
Review Period (the “Disagreement Notice Date”). The Notice of Disagreement shall
include EIX’s proposed revisions to the proposed Final Schedule and an
explanation of its disagreement, specifying the impact based on revised
information for items set forth in clauses (y)(i) through (y)(iv) of Section 3.a
of this Agreement or the Bankruptcy Expenses Adjustment Amount. A Notice of
Disagreement may only be based upon calculation errors or changed, updated
and/or additional information since the Execution Date for items set forth in
clauses (y)(i) through (y)(iv) of Section 3.a of this Agreement or the
Bankruptcy Expenses Adjustment Amount.

 

  d. If a Notice of Disagreement is provided, then the Reorganization Trust will
have twenty (20) Business Days immediately following the delivery of such notice
to review such notice, and EIX shall make its relevant personnel and books and
records reasonably available to the Reorganization Trust. If EIX and the
Reorganization Trust do not resolve their differences regarding the Final
Schedule within such period, then, within five (5) Business Days after the end
of such period (the last date of such period, the “Schedule Submission Date”),
the Reorganization Trust and EIX shall each prepare a proposed Final Schedule
and submit it to Ernst & Young. Ernst & Young shall choose either the Final
Schedule proposed by the Reorganization Trust or the Final Schedule proposed by
EIX as the more accurate calculation of the items set forth in clauses (y)(i)
through (y)(iv) of Section 3.a of this Agreement computed in accordance with the
methodology set forth in Schedule 2 (it being agreed that for purposes of
calculation, a Party cannot submit a range). The determination by Ernst & Young
shall be based on its assessment of which of the alternative Final Schedules
more accurately incorporates revised, updated, or changed information since the
Execution Date for items set forth in clauses (y)(i) through (y)(iv) of
Section 3.a of this Agreement or the Bankruptcy Expenses Adjustment Amount. The
determination by Ernst & Young shall be final and binding, in writing, and made
within sixty (60) days of submission, and each Party will cooperate with Ernst &
Young to provide it with such information as Ernst & Young reasonably requests.
Expenses of Ernst & Young for its work under this Section 3.d of this Agreement
will be paid by the losing party, i.e., EIX or the Reorganization Trust, as the
case may be, except if Ernst & Young is not called upon to determine the Final
Schedule, then its expenses will be shared equally by EIX and the Reorganization
Trust.

 

  e. The Final Schedule that results from the process described in Section 3.d
of this Agreement shall be deemed the Final Schedule of the Total Company Tax
Attributes and shall be attached to this Agreement in substitution for Schedule
1. The Adjustment Amount shall be computed based on the Total Company Tax
Attributes set forth in such Final Schedule.

 

20

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4. Tax Matters.

 

  a. Neither the Company (before the Effective Date) nor the Reorganization
Trust (after the Effective Date) shall take any actions outside the ordinary
course that would reasonably be expected to increase the income tax liabilities
of the Company and Company Consolidated Subsidiaries assumed by EIX pursuant to
this Agreement. None of the Reorganization Trust, the Company (prior to
determination of the Final Schedule) or EIX (prior to determination of the Final
Schedule) shall take any actions outside the ordinary course that would
reasonably be expected to impede the use of or negatively impact Total Company
Tax Attributes of the Company and the Company Consolidated Subsidiaries, other
than the NRG Transaction and the confirmation of, and performance in accordance
with, the Amended Plan of Reorganization and the orders of the Bankruptcy Court.

 

  b. EIX and the Reorganization Trust shall cooperate fully, and the
Reorganization Trust shall use its commercially reasonable efforts to facilitate
NRG’s cooperation, as and to the extent reasonably requested by the other Party,
in connection with any audit, litigation or other proceeding with respect to
income taxes; provided that the parties acknowledge that the obligations of NRG
with respect to such cooperation are limited to those previously set forth in
the NRG Agreement and that the Reorganization Trust will have no obligation to
obtain access not provided for in the NRG Agreement, and provided, further, that
the Reorganization Trust shall not have any obligation to provide such
cooperation from and after September 30, 2016.

 

  c. The Company and the Reorganization Trust shall comply with the terms of the
NRG Side Letter; provided that such actions do not adversely affect any Party
(and the computation of Total Company Tax Attributes shall be determined without
taking into account any of the actions taken pursuant to this Section 4.c).

 

5. Temporary Tolling of Litigation. From and after the Execution Date through
and including the Effective Date, the Parties agree to suspend any litigation
between them, including, without limitation, the Debtors’ investigation under
rule 2004 of the Federal Rules of Bankruptcy Procedure of EIX, the Renewed Joint
Motion of the Debtors and the Official Committee of Unsecured Creditors to
Compel Production of Documents and Information Withheld on Privilege Grounds
[Docket No. 1727] and any related depositions to the rule 2004 investigation or
the motion to compel, the Debtors’ Sixth Omnibus Objection to Certain Proofs of
Claim (No Liability Claims) [Docket No. 1748], the Debtors’ Motion to Estimate
Disputed Claims [Docket No. 1747], and the Motion to Withdraw the Reference with
Respect to Provision of the Debtors’ Second Amended Joint Chapter 11 Plan
[Docket No. 1853]. The Parties further agree to toll the statute of limitations
for the filing of any Claim released or compromised pursuant to the terms of
this Agreement. The period of time that such statutes are so tolled shall be
added to the time for bringing an action for each Claimant’s respective Claim,
pursuant to applicable law, if this Agreement terminates under Section 15 of
this Agreement.

 

21

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6. Shared Services and Other Matters.

 

  a. Nothing in this Agreement, the Amended Plan of Reorganization, or the
Confirmation Order shall limit or impair the obligations of the Company and the
Company Subsidiaries under the Order Authorizing Extension of Intercompany and
Shared Services Arrangements and Other Benefit Plans dated November 6, 2013
[Docket No. 1563]. After the Effective Date, EIX shall continue (and shall cause
the EMG Subsidiaries and SCE to continue) to provide mutually agreed-upon
services to NRG through July 31, 2014, on terms acceptable to EIX and NRG. At
and to the extent of the Reorganization Trust’s request, EIX shall continue to
administer Retiree Benefits (as they may be modified) for the Reorganization
Trust and otherwise cooperate in connection therewith, at the Reorganization
Trust’s cost and expense, and on other terms acceptable to EIX and the
Reorganization Trust for up to twelve months after the Effective Date. (For
clarity, the Reorganization Trust’s obligations for such costs and expenses
shall not be subject to the limitations on indemnification under Section 8 of
this Agreement). EIX and the Company shall cooperate to enter into a buyout of
certain workers compensation insurance with American International Group which
shall discharge EIX of any liability for such claims.

 

  b. As of the Effective Date, Post-Reorganization EME shall have no employees,
and all liabilities, if any, to former EME employees for severance or other
benefits in connection with the termination of their employment with EME shall
be Retained Liabilities. Nothing in this Section 6.b shall limit, amend, or
waive any rights of the Company or the Company Subsidiaries (or, after the
Effective Date, the Reorganization Trust) or the obligations of NRG under the
NRG Agreement.

 

  c. Subject to EIX’s compliance with Section 13.f of this Agreement, EME shall,
as promptly as practicable and in any event before the Effective Date, (i) file
with the Securities and Exchange Commission (the “SEC”) its Annual Report on
Form 10-K for the fiscal year ended December 31, 2013, and (ii) promptly
thereafter, but in any event before the Effective Date, file with the SEC a
certification on Form 15 to terminate the registration of EME’s securities under
section 12(g) of the Securities Exchange Act of 1934 (the “1934 Act”), and to
suspend EME’s duty under section 15(d) of the 1934 Act to file reports required
by section 13(a) of the 1934 Act.  

 

7. No Effect on Plan Sponsor Agreement.

 

  a. Except as expressly provided in this Agreement or the NRG Agreement, no
term or provision of this Agreement or the Amended Plan of Reorganization shall
modify the Plan Sponsor Agreement or modify, limit, or otherwise affect the
obligations of any party thereunder.

 

  b.

EIX acknowledges and agrees that neither the existence of the Plan Sponsor
Agreement, nor the performance by the Company, the Company Subsidiaries or the
Consenting Noteholders of their respective obligations thereunder, shall
constitute

 

22

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  a breach of this Agreement and, further, that EIX does not intend to induce a
breach by any Party under the Plan Sponsor Agreement through such Party’s entry
into or performance under this Agreement.

 

8. Indemnities and Escrow Account.

 

  a. EIX shall defend, indemnify, and hold harmless the EME Released Parties
from any claims, liabilities, or damages arising from (i) Assumed Liabilities,
(ii) Claims released by the EIX Releasing Parties under Section 2.f of this
Agreement or subject to Subject 2.j of this Agreement and (iii) actual damages
arising from EIX’s breach of its obligations under this Agreement, provided that
nothing in this clause (iii) shall be deemed or construed as an obligation of
EIX to pay the legal fees of the Reorganization Trust in any dispute arising
from an alleged breach of this Agreement. EIX’s obligations to indemnify the EME
Released Parties pursuant to this Agreement are subject to the Reorganization
Trust’s obligation to provide EIX with prompt notice of any actual or potential
claim, but in no event more than 30 days following, the Reorganization Trust
receiving notice of the claim against a released party. If the Reorganization
Trust provides EIX with notice of any claim pursuant to this provision, the
Reorganization Trust shall provide EIX with a description of the claim in
reasonable detail, and shall provide copies of all documents (including court
papers) related to the claim. EIX shall assume control of the defense of the
matter at its expense and select counsel to represent the EME Released Party in
the matter, unless the EME Released Party advises EIX in writing that such claim
involves a conflict of interest (other than one of a monetary nature) that would
make it inappropriate for the same counsel to represent both EIX and the EME
Released Party, in which case the EME Released Party shall be entitled to retain
its own counsel at EIX’s cost and expense (except that EIX will only be liable
for the legal fees and expenses of one law firm for all EME Released Parties in
the matter). All EME Released Parties shall cooperate with EIX and its chosen
counsel in the defense of any such matter. The EME Released Party shall not
settle or compromise such claim so long as EIX is defending it. If EIX elects
not to defend a third party claim, the EME Released Party may undertake its
defense, and EIX will be bound by the result obtained by the EME Released Party,
and the EME Released Party’s defense costs shall be included as damages subject
to this indemnity. EIX shall not admit liability or consent to the entry of any
order or judgment with respect to any claim for which indemnification is sought
without the prior written consent of the EME Released Party unless such
settlement or compromise includes an unconditional release of the EME Released
Party from all liability arising out of such claim.

 

  b.

Subject to the conditions and limitations in Section 8.c–8.f of this Agreement,
the Reorganization Trust shall defend, indemnify, and hold harmless the EIX
Released Parties from any claims, liabilities, or damages arising from
(i) Retained Liabilities, (ii) Claims released by the EME Releasing Parties
under Section 2.e of this Agreement or subject to Subject 2.i of this Agreement,
and (iii) actual damages arising from the Reorganization Trust’s breach of its
obligations under this Agreement provided, that nothing in this clause
(iii) shall be deemed or construed

 

23

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  as an obligation of the Reorganization Trust to pay the legal fees of EIX in
any dispute arising from an alleged breach of this Agreement. No claim for
indemnity, liability or damages shall be recoverable by any EIX Released Party
from funds other than those in the Escrow Account, if any. For the avoidance of
doubt, no distributions or payments under the Amended Plan of Reorganization
need be suspended or otherwise delayed while claims for potential actual damages
by EIX Released Parties are asserted or pending against the Escrow Account, and
neither the Reorganization Trust, nor any person acting on its behalf, shall
incur any liability for continuing to make distributions under the Amended Plan
of Reorganization while such claims for potential actual damages by EIX Released
Parties are pending.

 

  c. The Reorganization Trust’s obligations to indemnify the EIX Released
Parties pursuant to this Agreement are subject to EIX’s obligation to provide
the Reorganization Trust with prompt notice of any actual or potential claim,
but in no event more than 30 days following, EIX receiving notice of the claim
against the EIX Released Party. If EIX provides the Reorganization Trust with
notice of any claim, EIX shall provide to the Reorganization Trust a description
of the claim in reasonable detail, and shall provide copies of all documents
(including court papers) related to the claim. The Reorganization Trust shall
assume control of the defense of the matter at its expense and select counsel to
represent the EIX Released Party in the matter, unless the EIX Released Party
advises the Reorganization Trust in writing that such claim involves a conflict
of interest (other than one of a monetary nature) that would make it
inappropriate for the same counsel to represent both the Reorganization Trust
and the EIX Released Party, in which case the EIX Released Party shall be
entitled to retain its own counsel at the Reorganization Trust’s cost and
expense (except that the Reorganization Trust will only be liable for the legal
fees and expenses of one law firm for all EIX Released Parties in the matter).
All EIX Released Parties shall cooperate with the Reorganization Trust and its
chosen counsel in the defense of any such matter. The EIX Released Party shall
not settle or compromise such claim so long as the Reorganization Trust is
defending it. If the Reorganization Trust elects not to defend a third party
claim, the EIX Released Party may undertake its defense, and the Reorganization
Trust will be bound by the result obtained by the EIX Released Party, and the
EIX Released Party’s defense costs shall be included as damages subject this
indemnity. The Reorganization Trust shall not admit liability or consent to the
entry of any order or judgment with respect to any claim for which
indemnification is sought without the prior written consent of the EIX Released
Party unless such settlement or compromise includes an unconditional release of
the EIX Released Party from all liability arising out of such claim.

 

  d.

On the Effective Date, the Reorganization Trust shall establish, and transfer
the Initial Escrow Amount to, an escrow account with a third-party escrow agent
as a reserve for potential or actual damages incurred by any EIX Released Party
arising from a breach by the Reorganization Trust of its obligations under this
Agreement (the “Escrow Account”). Recourse to the Escrow Account shall be EIX’s
and/or any other EIX Released Party’s sole and exclusive remedy for any
indemnity claim

 

24

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  pursuant to this Agreement or for damages for any other breaches of this
Agreement by the Reorganization Trust. If there are no funds remaining in the
Escrow Account. EIX and/or other EIX Released Parties shall have no right to
indemnification pursuant to this Agreement. Nothing contained in this Section 8
will limit a Party’s remedy of specific performance with respect to any breach
of this Agreement.

 

  e. On December 31, 2014, the Escrow Agent shall release cash or EIX Notes, as
applicable, from the Escrow Account to the Reorganization Trust such that the
remaining amount then held in the Escrow Account is the greater of
(i) $25,000,000 and (ii) the aggregate amount of all unresolved disputes
relating to any Claim Notice delivered prior to such date based on a third-party
claim.

 

  f. On September 30, 2015, the Escrow Agent shall release cash or EIX Notes, as
applicable, from the Escrow Account to the Reorganization Trust such that the
remaining amount then held in the Escrow Account is the greater of
(i) $15,000,000 and (ii) the aggregate amount of all unresolved disputes
relating to any Claim Notice delivered prior to such date based on a third-party
claim.

 

  g. On the later of September 30, 2016, and the resolution of any Claim Notice
(as defined in Exhibit C attached hereto) outstanding as of September 30, 2016
based on a third-party claim, any unused funds in the Escrow Account shall be
paid to the Reorganization Trust for distribution pursuant to terms of the
Amended Plan of Reorganization, and, following such distribution, the Escrow
Agreement shall automatically terminate.

 

  h. At any time, at the option of the Reorganization Trust, it may deposit into
the Escrow Account an equivalent face amount of the EIX Notes in lieu of a
corresponding amount of cash, or it may deposit cash in exchange for a
corresponding face amount of EIX Notes. If the Reorganization Trust shall elect
to deposit EIX Notes into the Escrow Account in lieu of cash, then such EIX
Notes (but, for the avoidance of doubt, none of the other EIX Notes) may be
reduced by actual damages arising from breach of the Reorganization Trust’s
obligations under Section 8.b of this Agreement in an amount agreed upon by the
Reorganization Trust and EIX or by a final, non-appealable order of the
Bankruptcy Court. Other than the foregoing right of reduction, the deposit of
any EIX Notes into the Escrow Account shall not affect any terms or conditions
of such EIX Notes, including, without limitation, the accrual of interest or the
entitlement to payment of interest upon any prepayment of such EIX Notes.

 

9. Representations and Warranties of the Company. The Company (on behalf of
itself and the Company Subsidiaries) represents and warrants to the other
Parties that, as of the date of this Agreement:

 

  a.

Power and Authority; Non-Contravention. It has all requisite power and authority
to enter into this Agreement and to carry out the transactions contemplated by,
and perform its obligations under, this Agreement, and the execution, delivery,
and

 

25

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  performance by it of this Agreement will not contravene any applicable
provision of any law, statute, rule, or regulation, or any order writ,
injunction, or decree of any court or governmental instrumentality or violate
any provision of its organizational documents or those of the Company
Subsidiaries.

 

  b. Authorization. The execution and delivery of this Agreement and the
performance of its obligations hereunder have been duly authorized by all
necessary action on its part.

 

  c. Binding Obligation. Subject to approval by the Bankruptcy Court, this
Agreement is the legally valid and binding obligation of the Company and the
Company Subsidiaries and is enforceable against the Company and the Company
Subsidiaries, as applicable, in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium, or other
similar laws relating to or limiting creditors’ rights generally or by equitable
principles relating to enforceability.

 

  d. Governmental Consents. Except as expressly provided in this Agreement, the
execution, delivery, and performance by it of this Agreement do not and shall
not require any registration or filing with, consent or approval of, or notice
to, or other action to, with or by, any federal, state, or other governmental
authority or regulatory body other than, solely with respect to its performance
hereunder, the Bankruptcy Court and the Securities and Exchange Commission, as
applicable.

 

  e. No Solicitation. (i) It has not solicited offers for, or offered or sold,
and will not solicit offers for, or offer or sell, the EIX Notes by means of any
form of general solicitation or general advertising within the meaning of Rule
502(c) of Regulation D or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act of 1933 (the “1933 Act”); (ii) it
has not solicited offers for, or offered or sold, and will not solicit offers
for, or offer or sell, the EIX Notes except: (A) within the United States to
persons whom it reasonably believes to be a qualified institutional buyer within
the meaning of Rule 144A under the 1933 Act (“Rule 144A”) in transactions
pursuant to Rule 144A and in connection with each such sale, it has taken or
will take reasonable steps to ensure that the purchaser of the EIX Notes is
aware that such sale is being made in reliance on Rule 144A; or (B) outside of
the United States only in accordance with Regulation S under the 1933 Act or
Rule 144A or any other available exemption from registration under the 1933 Act,
and (iii) EIX will issue the EIX Notes in reliance upon the representations,
warranties, and agreements of EME set forth in this Section 9.e.

 

10. Representations and Warranties of EIX. EIX (on behalf of itself and the EMG
Subsidiaries) represents and warrants to the other Parties that, as of the date
of this Agreement:

 

  a.

Power and Authority; Non-Contravention. It has all requisite power and authority
to enter into this Agreement and the EIX Notes and to carry out the transactions

 

26

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  contemplated by, and perform its obligations under, this Agreement and the EIX
Notes, and the execution, delivery, and performance by it of this Agreement
(including, without limitation, the issuance and performance under the EIX
Notes) will not contravene any applicable provision of any law, statute, rule,
or regulation, or any order writ, injunction, or decree of any court or
governmental instrumentality or violate any provision of its organizational
documents or those of the EMG Subsidiaries and will not conflict with any
agreement or other contractual obligation of EIX.

 

  b. Authorization. The execution and delivery of this Agreement and the
performance of its obligations hereunder have been duly authorized by all
necessary action on its part.

 

  c. Binding Obligation. This Agreement is the legally valid and binding
obligation of EIX and is enforceable against EIX in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, or other similar laws relating to or limiting creditors’ rights
generally or by equitable principles relating to enforceability.

 

  d. Governmental Consents. Except as expressly provided in this Agreement, the
execution, delivery, and performance by it of this Agreement do not and shall
not require any registration or filing with, consent or approval of, or notice
to, or other action to, with or by, any federal, state, or other governmental
authority or regulatory body other than, solely with respect to its performance
hereunder, the Securities and Exchange Commission.

 

11. Representations and Warranties of Consenting Noteholders. Each Consenting
Noteholder (solely on its own behalf and not on behalf of any other Noteholder)
represents and warrants on a several (but not joint) basis to the Company and
EIX that, as of the date of this Agreement:

 

  a. such Consenting Noteholder (i) either (A) is the sole beneficial owner of
the principal amount of Senior Notes set forth in the letter to the Company and
EIX delivered by counsel to the Consenting Noteholders simultaneously with this
Agreement, or (B) has sole investment or voting discretion with respect to the
principal amount of the Senior Notes Claims set forth in such letter and has the
power and authority to bind the beneficial owner(s) of such Senior Notes Claims
to the terms of this Agreement and (ii) has full power and authority to act on
behalf of, vote, and consent to matters concerning such Senior Notes Claims and
to dispose of, exchange, assign, and transfer such Senior Notes Claims,
including the power and authority to execute and deliver this Agreement and to
perform its obligations hereunder;

 

  b.

such Consenting Noteholder has made no assignment, sale, participation, grant,
conveyance, pledge, or other transfer of, and has not entered into any other
agreement to assign, sell, use, participate, grant, convey, pledge, or otherwise
transfer, in whole or in part, any portion of its right, title, or interests in
any Senior

 

27

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  Notes Claims that are subject to this Agreement that conflict with the
representations and warranties of such Consenting Noteholder herein or would
render such Consenting Noteholder otherwise unable to comply with this Agreement
and perform its obligations hereunder;

 

  c. such Consenting Noteholder (i) has the requisite knowledge and experience
in financial and business matters of this type such that it is capable of
evaluating the merits and risks of entering into this Agreement and of making an
informed investment decision and has conducted an independent review and
analysis of the business and affairs of the Company and its subsidiaries that it
considers sufficient and reasonable for purposes of entering into this Agreement
and (ii) is an “accredited investor” (as defined by Rule 501 of the Securities
Act of 1933, as amended);

 

  d. this Agreement constitutes the legally valid and binding obligation of each
such Consenting Noteholder party thereto, as applicable, enforceable against it
in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other similar laws
relating to or limiting creditors’ rights generally or by equitable principles
relating to enforceability; and

 

  e. such Consenting Noteholder does not have actual knowledge of the occurrence
of any event that, due to any fiduciary or similar duty to any other person,
would prevent it from taking any action required of it under this Agreement.

 

12. Covenants of the Company. Subject to the terms and conditions of this
Agreement and for so long as this Agreement has not been terminated in
accordance with its terms, the Company (on behalf of itself and the Company
Subsidiaries) agrees that it shall:

 

  a. use its commercially reasonable efforts to (i) support, complete, and
satisfy the conditions to the consummation of the Settlement Transaction, and
(ii) obtain any and all required regulatory or third-party approvals for the
Settlement Transaction;

 

  b. timely file a formal objection to any motion filed with the Bankruptcy
Court by a third party seeking the entry of an order (i) directing the
appointment of an examiner with expanded powers or a trustee, (ii) converting
the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code, or
(iii) dismissing the Chapter 11 Cases;

 

  c. timely file a formal objection to any motion filed with the Bankruptcy
Court by a third party seeking the entry of an order modifying or terminating
the Company’s exclusive right to file or solicit acceptances of a chapter 11
plan;

 

  d. not take any action that is (i) inconsistent with the satisfaction of the
conditions precedent set forth in this Agreement, (ii) inconsistent in any
material respect with this Agreement, or (iii) inconsistent with, or is intended
[or is likely] to interfere with the consummation of the Settlement Transaction;

 

28

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  e. within two Business Days of the execution and delivery of this Agreement,
file (and not withdraw) the Amended Plan of Reorganization with the Bankruptcy
Court, and use reasonable best efforts to obtain an order of the Bankruptcy
Court confirming same;

 

  f. except as required by law (as determined by outside counsel to the Company)
and with reasonable prior written notice to the Consenting Noteholders, not and
cause the Company Subsidiaries before the Effective Date not to (a) use the name
of the Indenture Trustee or any specific Consenting Noteholder in any press
release without such person’s prior written consent or (b) disclose to any
person other than the legal and financial advisors to the Company the principal
amount or percentage of any Senior Notes or any other securities of the Company
or its subsidiaries held by any Consenting Noteholder; provided that the Debtors
shall be permitted to disclose at any time the aggregate principal amount of and
aggregate percentage of the Senior Notes held by the Consenting Noteholders;

 

  g. comply with all of its obligations under this Agreement unless compliance
is waived in writing by the Parties hereto; and

 

  h. comply with the provisions of Section 9.e with respect to offers and sales
of the EIX Notes.

 

13. Covenants of EIX. Subject to the terms and conditions of this Agreement and
for so long as this Agreement has not been terminated in accordance with its
terms, EIX (on behalf of itself and the EMG Subsidiaries) agrees that it shall:

 

  a. not directly or indirectly: (i) seek, solicit, support, encourage, or vote
its Claims or interests (including, for the avoidance of doubt, any Claims or
interests on behalf of any equity interests in any of the Debtors) for, consent
to, encourage, or participate in any discussions regarding the negotiation or
formulation of, any chapter 11 plan, proposal, offer, dissolution, winding up,
liquidation, reorganization, merger, consolidation, business combination, joint
venture, partnership, sale of assets, or restructuring for any of the Debtors
other than the Amended Plan of Reorganization; (ii) take any other action that
is inconsistent with, intended to, or likely to interfere with or obstruct the
Settlement Transaction, or the proposal, solicitation, confirmation, or
consummation of the Amended Plan of Reorganization; (iii) otherwise support any
plan or sale process proposed by any entity other than the Debtors following the
entry of an order in the Chapter 11 Cases terminating the Debtors’ exclusive
right to file a chapter 11 plan pursuant to section 1121 of the Bankruptcy Code
that is inconsistent with this Agreement; or (iv) take any other action that is
inconsistent with this Agreement, including taking any action inconsistent with
the satisfaction of the conditions precedent set forth in this Agreement, or
supporting any chapter 11 plan that does not incorporate the terms and
conditions set forth in this Agreement;

 

  b. support confirmation of the Amended Plan of Reorganization;

 

29

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  c. comply with all of its obligations under this Agreement unless compliance
is waived in writing by the Parties hereto;

 

  d. except as required by law (as determined by outside counsel to EIX) and
with reasonable prior written notice to the Consenting Noteholders, not and
cause its subsidiaries not to (a) use the name of the Indenture Trustee or any
specific Consenting Noteholder in any press release without such person’s prior
written consent or (b) disclose to any person other than the legal and financial
advisors to EIX the principal amount or percentage of any Senior Notes or any
other securities of the Company or its subsidiaries held by any Consenting
Noteholder; provided that EIX shall be permitted to disclose at any time the
aggregate principal amount of and aggregate percentage of the Senior Notes held
by the Consenting Noteholders;

 

  e. not opt out of or object to any of the release provisions contained in
Article VIII of the Amended Plan of Reorganization with respect to all Released
Parties (as defined therein), including, without limitation, the Consenting
Noteholders;

 

  f. reasonably cooperate and provide any necessary or appropriate information
in connection with the Company’s filings with the SEC, including those filings
set forth in Section 6.c of this Agreement; and

 

  g. concurrent with each original issuance of EIX Notes as provided for herein,
deliver a legal opinion in form and substance reasonably acceptable to the
Reorganization Trust covering the due authorization, validity, and
enforceability of the EIX Notes (such opinion to be addressed to and relied upon
only by the Reorganization Trust);

provided that, except as otherwise expressly set forth in this Agreement, the
foregoing provisions will not limit the rights of EIX to appear and participate
as a party in interest in any matter to be adjudicated in any case under the
Bankruptcy Code (or otherwise) concerning the Debtors, so long as such
appearance and the positions advocated in connection therewith are not
inconsistent with this Agreement or the Settlement Transaction.

 

14. Covenants of the Consenting Noteholders. Subject to the terms and conditions
of this Agreement and for so long as this Agreement has not been terminated in
accordance with its terms, each Consenting Noteholder (solely on its own behalf
and not on behalf of any other Noteholder) hereto agrees, severally and not
jointly, that it shall:

 

  a.

not directly or indirectly: (i) seek, solicit, support, encourage, or vote its
Senior Notes Claims or other Claims or interests (including, for the avoidance
of doubt, any Claims or interests on behalf of any equity interests in any of
the Debtors) for, consent to, encourage, or participate in any discussions
regarding the negotiation or formulation of, any chapter 11 plan, proposal,
offer, dissolution, winding up, liquidation, reorganization, merger,
consolidation, business combination, joint venture, partnership, sale of assets,
or restructuring for any of the Debtors that is inconsistent with this
Agreement; (ii) take any other action that is inconsistent with,

 

30

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  intended to, or likely to interfere with the Settlement Transaction, or the
proposal, solicitation, confirmation, or consummation of the Amended Plan of
Reorganization; (iii) otherwise support any plan or sale process proposed by any
entity other than the Debtors following the entry of an order in the Chapter 11
Cases terminating the Debtors’ exclusive right to file a chapter 11 plan
pursuant to section 1121 of the Bankruptcy Code that is inconsistent with this
Agreement; or (iv) take any action that is inconsistent with this Agreement,
including taking any action inconsistent with the satisfaction of the conditions
precedent set forth in this Agreement, or supporting any chapter 11 plan that
does not incorporate the terms and conditions set forth in this Agreement;

 

  b. comply with all of its obligations under this Agreement unless compliance
is waived in writing by the Parties hereto;

 

  c. support confirmation of the Amended Plan of Reorganization and not change
its vote with respect to the Plan of Reorganization;

 

  d. not opt out of or object to any of the release provisions contained in
Article VIII of the Amended Plan of Reorganization with respect to all Released
Parties (as defined therein), including, without limitation, the EIX Released
Parties; and

 

  e. not (i) grant any proxies to any person in connection with its Senior Note
Claims, or other Claims against or interests in any Debtor, to vote on the
Amended Plan of Reorganization or (ii) sell, loan, issue, pledge, hypothecate,
assign, transfer, or otherwise dispose of (including by participation) (the
“Transfer”), directly or indirectly, in whole or in part, any Senior Notes
Claim, or any option thereon or any right or interest therein, unless (x) the
transferee is a Party to this Agreement or (y) if the transferee is not to a
Party to this Agreement prior to the effectiveness of the Transfer, such
transferee delivers to the Company, at or prior to the time of the proposed
Transfer, an executed copy of a transfer agreement, in which event the
transferee shall be deemed to be a Consenting Noteholder hereunder and 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. Each Consenting Noteholder agrees that any Transfer or purported
Transfer that does not comply with this Agreement shall be deemed void ab
initio. For the avoidance of doubt, this Agreement shall in no way be construed
to preclude any holder of Senior Notes Claims from acquiring additional Senior
Notes or any other interests in any of the Debtors; provided that any such
additional Senior Notes or other interests in such Debtor shall, upon
acquisition, automatically be deemed to be subject to all the terms of this
Agreement. For the avoidance of doubt, the Parties agree that credit default
swaps shall not be deemed or construed to be Claims or interests in the Debtors;

provided that, except as otherwise expressly set forth in this Agreement, the
foregoing provisions will not limit the rights of any Party under the Indentures
or applicable law to appear and participate as a party in interest in any matter
to be adjudicated in any case under the Bankruptcy Code (or otherwise)
concerning the Debtors, so long as such

 

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appearance and the positions advocated in connection therewith are not
inconsistent with this Agreement, or the Settlement Transaction.

Notwithstanding anything in this Agreement to the contrary (i) a Consenting
Noteholder may Transfer or participate any right, title or interest in Senior
Note Claims to an entity that is acting in its capacity as a Qualified
Marketmaker without the requirement that the Qualified Marketmaker be or become
a Consenting Noteholder only if such Qualified Marketmaker has purchased such
Senior Note Claims with a view to immediate resale of such Senior Note Claims to
a transferee that has executed and delivered a Transfer Agreement, and (ii) to
the extent that a Consenting Noteholder is acting in its capacity as a Qualified
Marketmaker, it may Transfer or participate any right, title, or interest in any
Senior Notes that the Qualified Marketmaker acquires from a holder of the Senior
Notes who is not a Consenting Noteholder without the requirement that the
transferee be or become a Consenting Noteholder. For avoidance of doubt, a
Qualified Marketmaker may purchase, transfer or participate any Claims against
or interests in the Debtors other than Senior Note Claims without any
requirement that the transferee be or become subject to this Agreement.

 

15. Termination. This Agreement shall terminate, and (except as expressly
provided herein) all obligations of the Parties shall terminate and be of no
further force and effect, upon the earliest of: (a) the written agreement signed
by the following Parties prior to the Effective Date: (i) the Company (on behalf
of itself and the Company Subsidiaries); (ii) EIX (on behalf of itself and the
EMG Subsidiaries); and (iii) the Required Consenting Noteholders; (b) if the NRG
Agreement terminates by its terms; provided that the Company has complied with
its obligation under Section 12.a of this Agreement by March 31, 2014; and
(c) the Bankruptcy Court’s refusal to confirm the Amended Plan of Reorganization
with the Settlement Transaction included therein, subject to the Company’s
compliance with its obligations under Section 12 of this Agreement and the
Consenting Noteholders’ compliance with their obligations under Section 14 of
this Agreement. Notwithstanding any termination of this Agreement pursuant to
the foregoing clause (b), EIX agrees that the Company may, on at least 14 days’
notice to EIX (during which time period EIX shall be entitled to file its
objection to confirmation and take appropriate discovery), pursue confirmation
of the Amended Plan of Reorganization with the Settlement Transaction severed
therefrom, except that if such Amended Plan of Reorganization includes the
NRG Transaction (whether under the NRG Agreement or a new agreement with NRG),
such termination shall be of no force and effect and the Settlement Transaction
shall be included in the Amended Plan of Reorganization, unless the Bankruptcy
Court refuses to confirm the Amended Plan of Reorganization that includes the
Settlement Transaction, subject to the Company’s compliance with its obligations
under Section 12 of this Agreement and the Consenting Noteholders’ compliance
with their obligations under Section 14 of this Agreement. Subject to the
foregoing, for the avoidance of doubt, the Company reserves the right to
proceed, on at least 14-days’ notice to EIX (during which time period EIX shall
be entitled to file its objection to confirmation and take appropriate
discovery), with the NRG Transaction with the Settlement Transaction severed
therefrom if the Bankruptcy Court has refused to confirm the Amended Plan of
Reorganization with the Settlement Transaction included therein.

 

32

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16. No Admission of Liability. Neither the execution nor delivery of this
Agreement by any Party or any of the related agreements to which such Party is a
party nor the payment of any consideration by any entity (as defined in the
Bankruptcy Code) incident to the Release of EME Released Parties or the Release
of EIX Released Parties is an admission of any wrongdoing whatsoever on the part
of any Party or other entity (as defined in the Bankruptcy Code).

 

17. Further Assurances. Subject to the other terms of this Agreement, the
Parties agree to execute and deliver such other instruments and perform such
other acts, in addition to the matters herein specified, as may be reasonably
appropriate or necessary, from time to time, to effectuate this Agreement, the
Settlement Ancillary Documents, or the Settlement Transaction, as applicable.

 

18. Amendments and Waivers. Except as otherwise provided in this Agreement, no
amendment, modification, waiver, or termination of any provision of this
Agreement shall in any event be effective unless the same shall be in writing
and signed by (i) EME, (ii) EIX, and (iii) the Required Consenting Noteholders.
The waiver by any Party of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any preceding or succeeding breach and no
failure by any Party to exercise any right or privilege hereunder shall be
deemed a waiver of such Party’s rights or privileges hereunder or shall be
deemed a waiver of such Party’s rights to exercise the same at any subsequent
time or times hereafter. No claim of waiver, modification, consent, or
acquiescence with respect to any provision of this Agreement shall be made
against any Party, except on the basis of a written instrument executed by or on
behalf of such Party.

 

19. Survival. The representations and warranties of EIX set forth in this
Agreement shall survive the Effective Date. The representations and warranties
of the Company set forth in Section 9.e this Agreement shall survive the
Effective Date. The other representations and warranties of the Company, and the
representations and warranties of the Consenting Noteholders, shall terminate as
of immediately prior to the Effective Date such that no claim for breach of any
such representation or warranty, detrimental reliance or other right or remedy
may be brought after the Effective Date. Each covenant and agreement of any
Party to the extent contemplating or requiring performance prior to the
Effective Date shall terminate effective immediately as of the Effective Date
such that not claim for breach or non-performance of any such covenant or
agreement, detrimental reliance or any other right or remedy may be brought
after the Effective Date. Each covenant or agreement of any Party to the extent
contemplating or requiring performance after the Effective Date shall survive in
accordance with the terms hereof.

 

20. Headings. The headings of all sections of this Agreement are inserted solely
for the convenience of reference and are not a part of and are not intended to
govern, limit or aid in the construction or interpretation of any term or
provision of this Agreement.

 

21.

Governing Law. All issues and questions concerning the construction, validity,
enforcement, and interpretation of this Agreement shall be governed by, and
construed in accordance with, the law of the State of New York, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of New York or any other

 

33

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  jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York. In furtherance of the foregoing, the internal
law of the State of New York shall control the interpretation and construction
of this Agreement, even though under that jurisdiction’s choice of law or
conflict of law analysis, the substantive law of some other jurisdiction would
ordinarily apply.

 

22. Defaults. After the Effective Date, any alleged breach, default, or claim
under this Agreement shall be deemed waived if no notice of such breach or
default by the non-breaching party is delivered within 60 calendar days of the
later of its alleged occurrence and the date the non-breaching party becomes
aware thereof. Any notice of breach shall include a reasonably detailed
description of the alleged breach and the specific performance to cure such
breach or, in the case of a breach of Section 8.b, a specified amount of damages
sought from the Escrow Account. On September 30, 2016, the Reorganization Trust
shall be relieved of all further obligations under this Agreement and shall have
no further liability to EIX of any kind, except to the extent of any unresolved
dispute relating to a notice of breach delivered prior to such date.

 

23. Submission to Jurisdiction; Selection of Forum; Waiver of Trial by Jury.

 

  a. Each of the Parties hereby irrevocably acknowledges and consents that any
legal action or proceeding brought with respect to any of the obligations
arising under or relating to this Agreement, other than any dispute regarding
the Final Schedule subject to resolution under Section 3.d of this Agreement,
shall be brought in the Bankruptcy Court, and each of the Parties hereby
irrevocably submits to and accepts with regard to any such action or proceeding,
for itself and in respect of its property, generally and unconditionally, the
jurisdiction of the Bankruptcy Court. Each Party hereby further irrevocably
waives any Claim that the Bankruptcy Court lacks jurisdiction over such Party,
and agrees not to plead or claim, in any legal action or proceeding with respect
to this Agreement brought in any of the Bankruptcy Court, that any such court
lacks jurisdiction over such Party, in each case with respect to any of the
obligations arising under or relating to this Agreement, other than any dispute
subject to resolution under Section 3.d of this Agreement. Notwithstanding the
foregoing, any EIX Released Party or EME Released Party may assert the releases
and/or covenants not to sue set forth in Section 2.e, Section 2.f, Section 2.i,
and Section 2.j of this Agreement as defenses and/or counterclaims in any action
or proceeding that is barred by or in violation of those provisions.
Notwithstanding the foregoing, the Parties agree that any action to enforce the
EIX Notes may be brought in a federal or state court sitting in the Borough of
Manhattan in the city of New York.

 

  b. To the fullest extent permitted by applicable law, each of the Parties
hereby irrevocably waives the objection which it may now or hereafter have to
the laying of the venue of any suit, action, or proceeding arising out of or
relating to this Agreement in the Bankruptcy Court and hereby further
irrevocably waives and agrees not to plead or claim that the Bankruptcy Court is
not a convenient forum for any such suit, action, or proceeding.

 

34

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

  c. The Parties agree that any judgment obtained by any Party or its successors
or assigns in any action, suit, or proceeding referred to above may, in the
discretion of such Party (or its successors or assigns), be enforced in any
jurisdiction to the extent permitted by applicable law.

 

  d. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY SUIT, ACTION, OR PROCEEDING REFERRED TO ABOVE. EACH OF THE
PARTIES HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUIT,
ACTION, OR PROCEEDING REFERRED TO ABOVE ANY SPECIAL, EXEMPLARY, PUNITIVE, OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES.

 

24. Section 1542 Disclosure. IT IS UNDERSTOOD BY THE PARTIES THAT THERE IS A
RISK THAT, SUBSEQUENT TO THE EXECUTION OF THIS RELEASE, THE CLAIMS OF ANY PARTY
WITH RESPECT TO THE SUBJECT MATTER HEREOF MAY BE DISCOVERED TO BE GREATER OR
LESS THAN ANY PARTY NOW EXPECTS OR ANTICIPATES. EACH PARTY ASSUMES THIS RISK AND
AGREES THAT THAT THE FOREGOING RELEASES SHALL BE EFFECTIVE AS A BAR TO ANY AND
ALL CLAIMS OF WHATSOEVER CHARACTER, NATURE AND KIND, KNOWN OR UNKNOWN, SUSPECTED
OR UNSUSPECTED, DISCOVERED OR UNDISCOVERED. TO THE EXTENT SECTION 1542 OF THE
CALIFORNIA CIVIL CODE OR SIMILAR PROVISIONS OF APPLICABLE LAW ARE APPLICABLE TO
THE FOREGOING RELEASES, THE PARTIES EXPRESSLY WAIVE ANY AND ALL RIGHTS AND
BENEFITS CONFERRED UPON THEM BY SECTION 1542 OF THE CALIFORNIA CIVIL CODE OR
SIMILAR PROVISIONS OF APPLICABLE LAW. EACH PARTY HAS READ AND UNDERSTANDS THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 AND EXPRESSLY ACKNOWLEDGES AND
AGREES THAT, ALTHOUGH IT MAY HEREAFTER DISCOVER FACTS OTHER THAN OR DIFFERENT
FROM THOSE THAT IT KNOWS OR BELIEVES TO BE TRUE WITH RESPECT TO THE CLAIMS
RELEASED PURSUANT TO THE PROVISIONS OF THIS RELEASE, FOR THE PURPOSE OF
IMPLEMENTING A FULL AND COMPLETE RELEASE AND DISCHARGE OF THE PARTIES THIS
RELEASE IS INTENDED TO INCLUDE IN ITS EFFECT WITHOUT LIMITATION ALL OF THE
CLAIMS, CAUSES OF ACTION AND LIABILITIES WHICH THE PARTIES, AND EACH OF THEM DO
NOT KNOW OR SUSPECT TO EXIST IN THEIR FAVOR AT THE TIME OF EXECUTION OF THIS
RELEASE, AND THIS RELEASE CONTEMPLATES EXTINGUISHMENT OF ALL SUCH CLAIMS, CAUSES
OF ACTION AND LIABILITIES. THE PARTIES ACKNOWLEDGE THAT THE FOREGOING WAIVER OF
THE PROVISIONS OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE WAS BARGAINED FOR
SEPARATELY.

 

35

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25. Execution of Agreement. This Agreement may be executed and delivered (by
facsimile, electronic mail, or otherwise) in any number of counterparts, each of
which, when executed and delivered, shall be deemed an original, and all of
which together shall constitute the same agreement. Except as expressly provided
in this Agreement, each individual executing this Agreement on behalf of a Party
has been duly authorized and empowered to execute and deliver this Agreement on
behalf of said Party.

 

26. Waiver. Any Party shall have the right at its option to waive in writing any
conditions of this Agreement that are included for its benefit, and to proceed
hereunder without regard to any non-performance or non-satisfaction thereof.

 

27. Successors and Assigns, No Third Party Beneficiaries.

 

  a. Neither this Agreement nor any of the rights, interests or obligations
under it may be assigned by any of the Parties (whether by operation of law or
otherwise) without the prior written consent of the other Parties. This
Agreement shall inure to the benefit of and be binding upon the Parties and
their respective successors and permitted assigns. For the avoidance of doubt,
(a) the rights and obligations of the Company under this Agreement that survive
the Effective Date shall become the rights and obligations of the Reorganization
Trust on and after the Effective Date, and neither the Company nor
Post-Reorganization EME shall be subject to such rights and obligations on or
after the Effective Date (including with respect to Section 2.m of this
Agreement) and (b) any permitted assignee of the EIX Notes shall succeed to and
may assert the rights of a holder of such EIX Notes with respect to its EIX
Notes. Other than as expressly provided for in Section 27.b of this Agreement,
no other entity (as defined in the Bankruptcy Code) shall have or be entitled to
assert rights or benefits hereunder.

 

  b. All parties agree that the EIX Released Parties and EME Released Parties
shall be, and are hereby, named as express third-party beneficiaries of the
provisions of Sections 8 of this Agreement, with full rights under such section.

 

28. Notices. All notices hereunder shall be deemed given if in writing and
delivered, if sent by facsimile, courier, or by registered or certified mail
(return receipt requested) to the following addresses and facsimile numbers (or
at such other addresses or facsimile numbers as shall be specified by like
notice):

 

36

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If to the Company, to counsel at the following address:

Kirkland & Ellis LLP

300 North LaSalle Street

Chicago, Illinois 60654

Attn: David R. Seligman, P.C. and Brad Weiland

Fax: (312) 862-2200

-and-

Kirkland & Ellis LLP

601 Lexington Avenue

New York, New York 10022

Attn.: Joshua A. Sussberg

Fax: (212) 446-4900

If to any Consenting Noteholder, the address set forth in the separate letter to
the Company and EIX delivered by counsel to the Consenting Noteholders
simultaneously with this Agreement.

If to counsel to the ad hoc committee of Noteholders, to:

Ropes & Gray LLP

1211 Avenue of the Americas

New York, New York 10036

Attn.: Keith H. Wofford and Brian Rooder

Fax: (212) 596-9090

-and-

Ropes & Gray LLP

800 Boylston Street

Boston, Massachusetts 02199

Attn.: Stephen Moeller-Sally

Fax: (617) 951-7050

If to EIX, to counsel at the following address:

Munger Tolles & Olson LLP

355 South Grand Ave.

Attn.: Thomas B. Walper and Seth Goldman

Los Angeles, California 90071

Fax: (213) 687-3702

 

37

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29. Non-Severability. The terms, provisions, agreements, covenants, and
restrictions of this Agreement are non-severable and, unless otherwise agreed to
by the Parties, this Agreement shall terminate if any term, provision,
agreement, covenant, or restriction in this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void, or otherwise
unenforceable.

 

30. Construction. Each Party hereto acknowledges that each of them has had the
opportunity to retain legal counsel of its own choice and has been afforded an
opportunity to review this Agreement with its legal counsel. The Parties have
participated jointly in the negotiation and drafting of this Agreement and the
related documents. In the event an ambiguity or question of intent or
interpretation arises under any provision of this Agreement or any of the
related documents, this Agreement and the related documents shall be construed
as if drafted jointly by the Parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of authorship of
any of the provisions of this Agreement or any related documents.

 

31. Specific Performance. It is understood and agreed by the Parties that money
damages would not be a sufficient remedy for any breach of this Agreement by any
Party and each non-breaching Party shall be entitled to specific performance and
injunctive or other equitable relief, including attorneys’ fees and costs, as a
remedy of any such breach, and each Party agrees to waive any requirement for
the securing or posting of a bond in connection with such remedy, in addition to
any other remedy to which such non-breaching Party may be entitled, at law or in
equity.

 

38

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and
delivered by their respective duly authorized officers or other agents, solely
in their respective capacity as officers or other agents of the undersigned and
not in any other capacity, as of the date first set forth above.

 

EDISON INTERNATIONAL on behalf of itself and the EMG Subsidiaries By:  

/s/ William Scilacci

Name:   William Scilacci Title:   Executive Vice President, Chief Financial  
Officer and Treasurer EDISON MISSION ENERGY on behalf of itself and the Company
Subsidiaries By:  

/s/ Maria Rigatti

Name:   Maria Rigatti Title:   Senior Vice President and Chief Financial  
Officer

[Signature pages continued on following page.]

 

39

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CONSENTING NOTEHOLDER

 

Arrowgrass Capital Partners (US) LP By:  

/s/ Stephen C. Ellwood

Name:   Stephen C. Ellwood Title:   Chief Compliance Officer

[Signature Page to EME-EIX Settlement Agreement]

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

CONSENTING NOTEHOLDER

Avenue Investments, L.P.

By: Avenue Partners, LLC, its General Partner By:  

/s/ Sonia Gardner

Name:   Sonia Gardner Title:   Member

[Signature Page to EME-EIX Settlement Agreement]

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

CONSENTING NOTEHOLDER

OZ MASTER FUND, LTD.

By: OZ Management LP, its investment manager

By: Och-Ziff Holding Corporation, its General Partner

 

By:  

/s/ Joel Frank

Name:   Joel Frank Title:   Chief Financial Officer

GOLDMAN SACHS PROFIT SHARING MASTER TRUST

By: OZ Management II LP, its investment manager

By: Och-Ziff Holding II LLC, its General Partner

By: OZ Management LP, its Member

By: Och-Ziff Holding Corporation, its General Partner

 

By:  

/s/ Joel Frank

Name:   Joel Frank Title:   Chief Financial Officer

GORDEL CAPITAL LIMITED

By: OZ Management LP, its investment manager

By: Och-Ziff Holding Corporation, its General Partner

 

By:  

/s/ Joel Frank

Name:   Joel Frank Title:   Chief Financial Officer

[Signature Page to EME-EIX Settlement Agreement]

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

OZ ENHANCED MASTER FUND, LTD.

By: OZ Management LP, its investment manager

By: Och-Ziff Holding Corporation, its General Partner

 

By:  

/s/ Joel Frank

Name:   Joel Frank Title:   Chief Financial Officer

OZ EUREKA FUND, L.P.

By: OZ Eureka Fund GP, L.P., its General Partner

By: OZ Eureka Fund GP, LLC, its General Partner

By: OZ Advisors LP, its Member

By: Och-Ziff Holding Corporation, its General Partner

 

By:  

/s/ Joel Frank

Name:   Joel Frank Title:   Chief Financial Officer

OZSC II, L.P.

By: OZSC GP, L.P., its General Partner

By: OZSC GP, LLC, its General Partner

By: OZ Advisors LP, its sole Member

By: Och-Ziff Holding Corporation, its General Partner

 

By:  

/s/ Joel Frank

Name:   Joel Frank Title:   Chief Financial Officer

 

[Signature Page to EME-EIX Settlement Agreement]

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

OZ CREDIT OPPORTUNITIES MASTER FUND, LTD.

By: OZ Management LP, its investment manager

By: Och-Ziff Holding Corporation, its General Partner

 

By:  

/s/ Joel Frank

Name:   Joel Frank Title:   Chief Financial Officer

OZ GC OPPORTUNITIES MASTER FUND, LTD.

By: OZ Management LP, its investment manager

By: Och-Ziff Holding Corporation, its General Partner

 

By:  

/s/ Joel M. Frank

Name:   Joel M. Frank Title:   Chief Financial Officer

 

[Signature Page to EME-EIX Settlement Agreement]

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

CONSENTING NOTEHOLDER

P. Shoenfeld Asset Management LP, as investment adviser for certain funds and
accounts

 

By:  

/s/ Peter Shoenfeld

Name:   Peter Shoenfeld Title:   CEO & CIO

 

[Signature Page to EME-EIX Settlement Agreement]

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

CONSENTING NOTEHOLDER

York Capital Management Global Advisors, LLC, on behalf of the funds and
accounts managed or advised by it or its affiliates

 

By:  

/s/ Richard P. Swanson

Name:   Richard P. Swanson Title:   General Counsel

 

[Signature Page to EME-EIX Settlement Agreement]

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

Schedule 1

Estimate of Total Company Tax Attributes

 

Pre-2013 Tax Attributes

   $ 1,184,387,565   

2013 Tax Attributes*, plus 2014 Tax Attributes*, minus Tax Effected Federal
CODI*, minus Tax Effected California CODI, minus Tax Attribute Reduction Amount

   $ 6,948,108   

Total Company Tax Attributes*

   $ 1,191,335,673   

Total Company Tax Attributes In Excess Of $450 MM*

   $ 741,335,673   

Adjustment Amount*

   $ 370,667,837   

Effective Date Cash Amount

   $ 225,000,000   

2015 Note Amount*

   $ 199,615,775   

2016 Note Amount*

   $ 209,749,348   

Total EIX Payments*

   $ 634,365,123   

 

* Designates estimated amounts.

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

Schedule 2

Methodology for Computing the Total Company Tax Attributes

The applicable estimated amounts, which estimated amounts reflect the
methodology set forth below, shall be updated as follows for purposes of
computing amounts described in clauses (i) through (iv) of Section 3.a(y) to be
included in the Final Schedule:

 

  a. The amount described in (x) clause (ii)(A) of the Tax Effected Federal NRG
Transaction Gain/Loss, and (y) clause (ii)(A) of the Tax Effected California NRG
Transaction Gain/Loss, shall be computed based on the Final Cash Purchase Price
(as defined in the NRG Agreement); provided that, if the Final Cash Purchase
Purchase Price has not been determined pursuant to Section 1.3(b) of the NRG
Agreement by the date when the proposed Final Schedule is due to be delivered to
EIX pursuant to Section 3.b, the Final Schedule shall be delivered using the
Cash Purchase Price as computed in the True-Up Statement or the APA Notice of
Disagreement, whichever results in lower Total Company Tax Attributes. Upon the
determination of the Final Cash Purchase Price pursuant to Section 1.3(b) of the
NRG Agreement, the Final Schedule shall be, and shall be immediately deemed,
modified to incorporate such Final Cash Purchase Price.

 

  b. The amount described in (x) clause (ii)(B) of the Tax Effected Federal NRG
Transaction Gain/Loss and (y) clause (ii)(B) of the Tax Effected California NRG
Transaction Gain/Loss shall equal the fair market value of the Stock Purchase
Price (as defined in the NRG Agreement) on the Effective Date adjusted as
provided in Section 1.2(a)(v) of the NRG Agreement.

 

  c. The amount described in (x) clause (ii)(C) of the Tax Effected Federal NRG
Transaction Gain/Loss and (y) clause (iii)(C) of the Tax Effected California NRG
Transaction Gain/Loss shall be computed based on the sum of (A) the Closing Debt
(as defined in the NRG Agreement) as included in the Final Cash Purchase Price;
provided that, if the Final Cash Purchase Price has not been determined pursuant
to Section 1.3(b) of the NRG Agreement by the date when the proposed Final
Schedule is due to be delivered to EIX pursuant to Section 3.b, the Final
Schedule shall be delivered using the Closing Debt set forth in the True-Up
Statement or the APA Notice of Disagreement, which results in lower Total
Company Tax Attributes, and shall be adjusted for the Closing Debt as included
in the Final Cash Purchase Price pursuant to
Section 2.c(iii), and (B) other liabilities (as determined for federal income
tax purposes) assumed by NRG pursuant to the NRG Transaction.

 

  d. The amount in clause (ii)(D) of the Tax Effected Federal NRG Transaction
Gain/Loss shall be computed based on the adjusted federal income tax basis of
the assets of the Company and the Company Subsidiaries as of the Effective Date,
calculated consistent with the Consolidated Group’s Consolidated Returns for tax
years prior to 2013 as currently filed but increased by the NRG Bankruptcy
Expenses Adjustment Amount.

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

  e. The amount in clause (iii)(D) of the Tax Effected California NRG
Transaction Gain/Loss shall be computed based on the adjusted California tax
basis of the assets of the Company and the Company Subsidiaries as of the
Effective Date, calculated consistent with the Consolidated Group’s Consolidated
Returns for tax years prior to 2013 as currently filed but increased by the NRG
Bankruptcy Expenses Adjustment Amount.

 

  f. The amount of 2013 Tax Attributes shall be adjusted based on updated
estimates of the tax effected federal and net California taxable losses and
credits of the Company and the Company Consolidated Subsidiaries, consistent
with past EME practice and filed tax returns, less $11,233,000 of tax sharing
payments made under the Tax Sharing Agreements.

 

  g. The amount of 2014 Tax Attributes shall be adjusted based on updated
estimates of the tax effected federal and net California taxable losses and
credits of the Company and Company Consolidated Subsidiaries from January 1,
2014, through the Effective Date, consistent with past EME practice and filed
tax returns, including adjustments from (a)–(e) above, Tax Effected Federal NRG
Gain/Loss, Tax Effected California NRG Gain/Loss, and income arising from
discharge of interest on the Senior Notes accrued from December 17, 2012 to
December 31, 2013, but excluding any reduction due to cancellation of
indebtedness income.

 

  h. The amount of Tax Effected Federal CODI shall be adjusted based on the
Adjusted NRG Proceeds Amount, and updated estimates of liabilities described in
clause (ii)(A)(y) of the definition of “Tax Effected Federal CODI” pursuant to
the Amended Plan of Reorganization.

 

  i. For purposes of calculating Tax Effected Federal CODI and 2014 Tax
Attributes, (x) the Initial Escrow Amount shall be treated as distributed to the
Reorganization Trust for the benefit of the holders of the Senior Notes, (y) the
Disputed Claims Reserve Amount shall be treated as distributed to the
Reorganization Trust in payment of the Disputed Claims for which it is reserved,
and (z) any additional amount reserved by the Reorganization Trust to pay
Retained Liabilities included in clause (m) of the Waterfall Payment Amount that
do not constitute Disputed Claims (other than the Initial Escrow Amount) shall
be treated as distributed to the Reorganization Trust in payment of such
liabilities (provided, however, that, for purposes of calculating Tax Effected
Federal CODI and 2014 Tax Attributes, the sum of (y) and (z) shall not exceed
$182,000,000); and amounts described in (y) and (z) shall (A) be included as
deductions in calculating the 2014 Tax Attributes to the extent not already
deducted in prior periods, and (B) as result of their inclusion in items (l) and
(m) of the definition of Waterfall Payment Amount shall reduce Adjusted NRG
Proceeds and increase Tax Effected Federal CODI.

 

  j. The amount of Pre-2013 Tax Effected Federal Attributes and Pre-2013 Tax
Effected California NOLs shall be adjusted to account for any changes in the
Bankruptcy Expenses Adjustment Amount.

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

Schedule 3

Commercial Relationships

Agreements relating to the purchase of electricity by SCE, and the delivery of
electricity by the Company and Company Subsidiaries (and any generator
interconnection and other related agreements between SCE and such entities),
including but not limited to the following:

 

Agreement

  

Parties

Power Purchase Tolling Agreement

   SCE and Walnut Creek Energy, LLC

Generation Tie Line Facilities Agreement

   SCE and Walnut Creek Energy, LLC

First Amended Large Generator Interconnection Agreement

   SCE and Walnut Creek Energy, LLC

Power Purchase and Sale Agreement

   SCE and Kern River Cogeneration Co.

Power Purchase and Sale Agreement

   SCE and Watson Cogeneration Co.

Power Purchase and Sale Agreement

   SCE and Sycamore Generation Company

EEI Master Power Purchase and Sale Agreement

   SCE and Sycamore Generation Company

Master Power Purchase and Sale Agreement Confirmation Letter (2012 CHP Resource
Adequacy Capacity)

   SCE and Sycamore Generation Company

Master Power Purchase and Sale Agreement Confirmation Letter (2012 CHP Energy
Only Unit Contingent Toll)

   SCE and Sycamore Generation Company

Amended and Restated Power Purchase Contract

   SCE and Midway Sunset Cogeneration Company

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

Schedule 4

Assumed Liabilities

 

Plan Name

Edison International Retirement Plan for Bargaining Unit Employees of Midwest
Generation, LLC

Edison International Retirement Plan for Bargaining Unit Employees of EME Homer
City Generation LP

Southern California Edison Company Retirement Plan

Southern California Edison Company Executive Retirement Plan

Edison International 2008 Executive Retirement Plan

Edison International Executive Deferred Compensation Plan

Edison International 2008 Executive Deferred Compensation Plan

Edison International Affiliate Option Deferred Compensation Plan

Southern California Edison Company 1985 Deferred Compensation Plan

Southern California Edison Company Executive Supplemental Benefit Program

Edison International 2008 Executive Survivor Benefit Plan

Edison International 2008 Executive Disability Plan1

Edison International 2007 Performance Incentive Plan

Edison International Equity Compensation Plan

Edison International 2000 Equity Plan

 

 

1  Applies only to current executives.

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

Exhibit A

Amended Plan of Reorganization

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

EXECUTION AND FILING VERSION

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

 

 

  )    In re:   )    Chapter 11   )    EDISON MISSION ENERGY, et al.,1   )   
Case No. 12-49219 (JPC)   )    Debtors.   )    Jointly Administered

 

  )   

DEBTORS’ THIRD AMENDED JOINT CHAPTER 11 PLAN OF REORGANIZATION

 

James H.M. Sprayregen, P.C.    David A. Agay David R. Seligman, P.C.    Joshua
Gadharf Sarah H. Seewer    McDONALD HOPKINS LLC Brad Weiland    300 North
LaSalle KIRKLAND & ELLIS LLP    Suite 2100 300 North LaSalle    Chicago,
Illinois 60654 Chicago, Illinois 60654    Telephone:         (312) 280-0111
Telephone:         (312) 862-2000    Facsimile:          (312) 280-8232
Facsimile:          (312) 862-2200    - and -       Counsel to Debtor Camino
Energy Company Joshua A. Sussberg (admitted pro hac vice)    and Conflicts
Counsel to the other Debtors KIRKLAND & ELLIS LLP    and Debtors in Possession
601 Lexington Avenue    New York, New York 10022    Telephone:         (212)
446-4800    Facsimile:          (212) 446-4900   

Counsel to the Debtors and Debtors in Possession

other than Camino Energy Company

   Dated: February 18, 2014   

 

NOTHING CONTAINED HEREIN SHALL CONSTITUTE AN OFFER, ACCEPTANCE, OR A LEGALLY
BINDING OBLIGATION OF THE DEBTORS OR ANY OTHER PARTY IN INTEREST. THIS PLAN IS
SUBJECT TO APPROVAL OF THE BANKRUPTCY COURT AND OTHER CUSTOMARY CONDITIONS. THIS
PLAN IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES. YOU SHOULD NOT RELY ON THE
INFORMATION CONTAINED IN, OR THE TERMS OF, THIS PLAN FOR ANY PURPOSE (INCLUDING
IN CONNECTION WITH THE PURCHASE OR SALE OF THE DEBTORS’ SECURITIES) BEFORE THE
CONFIRMATION OF THIS PLAN BY THE BANKRUPTCY COURT.

 

 

1  The Debtors in these chapter 11 cases, along with the last four digits of
each Debtor’s federal tax identification number, include: Edison Mission Energy
(1807); Camino Energy Company (2601); Chestnut Ridge Energy Company (6590);
Edison Mission Finance Co. (9202); Edison Mission Energy Fuel Services, LLC
(4630); Edison Mission Fuel Resources, Inc. (3014); Edison Mission Fuel
Transportation, Inc. (3012); Edison Mission Holdings Co. (6940); Edison Mission
Midwest Holdings Co. (6553); EME Homer City Generation L.P. (6938); Homer City
Property Holdings, Inc. (1685); Midwest Finance Corp. (9350); Midwest Generation
EME, LLC (1760); Midwest Generation, LLC (8558); Midwest Generation Procurement
Services, LLC (2634); Midwest Peaker Holdings, Inc. (5282); Mission Energy
Westside, Inc. (0657); San Joaquin Energy Company (1346); Southern Sierra Energy
Company (6754); and Western Sierra Energy Company (1447). The location of parent
Debtor Edison Mission Energy’s corporate headquarters and the Debtors’ service
address is: 3 MacArthur Place, Suite 100, Santa Ana, California 92707.

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TABLE OF CONTENTS

 

     Page  

ARTICLE I. DEFINED TERMS, RULES OF INTERPRETATION, COMPUTATION OF TIME, AND
GOVERNING LAW

     1   

A.     Defined Terms

     1   

B.     Rules of Interpretation

     18   

C.     Computation of Time

     19   

D.     Governing Law

     19   

E.     Reference to Monetary Figures

     19   

ARTICLE II. ADMINISTRATIVE CLAIMS AND PRIORITY TAX CLAIMS

     19   

A.     Administrative Claims

     19   

B.     Priority Tax Claims

     20   

C.     Accrued Professional Compensation Claims

     20   

D.     U.S. Trustee Statutory Fees

     21   

E.     Treatment of Certain Claims

     21   

ARTICLE III. CLASSIFICATION AND TREATMENt oF CLAIMS AND INTERESTS

     21   

A.     Summary of Classification

     21   

B.     Treatment of Claims Against and Interests in EME

     23   

C.     Treatment of Claims against and Interests in Debtor Subsidiaries

     26   

D.     Treatment of Claims against and Interests in Homer City Debtors

     28   

E.     Special Provision Governing Unimpaired Claims

     29   

F.      Elimination of Vacant Classes

     29   

G.     Voting Classes; Presumed Acceptance by Non-Voting Classes

     30   

H.     Confirmation Pursuant to Sections 1129(a)(10) and 1129(b) of the
Bankruptcy Code

     30   

I.       Subordinated Claims

     30   

J.      Controversy Concerning Impairment

     30   

ARTICLE IV. MEANS FOR IMPLEMENTATION OF THE PLAN

     30   

A.     Restructuring Transactions

     30   

B.     Sale Transaction

     31   

C.     EIX Settlement

     31   

D.     Sources of Plan Consideration

     31   

E.     Reorganization Trust; Post-Effective-Date Reorganization Trust Matters

     32   

F.      Plan Administrator

     33   

G.     Disputed Claims Reserve

     33   

H.     Compensation and Benefits Programs

     33   

I.       New Governance Documents

     34   

J.      Preservation of Capistrano Note and Capistrano Pledge Agreement;
Preservation of Viento II Pledge

     34   

K.     General Settlement of Claims

     34   

L.     Section 1145 Exemption

     34   

M.    Release of Liens

     34   

N.     Cancellation of Securities and Agreements

     35   

O.     Corporate Action

     36   

P.      Effectuating Documents; Further Transactions

     36   

Q.     Exemption from Certain Taxes and Fees

     36   

R.     Corporate Existence

     37   

S.      Substantive Consolidation

     37   

T.     Vesting of Assets

     38   

U.     Indemnification of Certain Directors, Managers, Officers, and Employees

     38   

V.     Assumption of Certain D&O Liability Insurance Policies

     38   

 

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TABLE OF CONTENTS (CONT’D)

 

         PAGE  

W.

 

Reorganization Trust Oversight Board

     39   

X.

 

Payment of Certain Fees and Expenses

     39   

Y.

 

Homer City Wind Down

     39   

Z.

 

Release of Avoidance Actions

     39   

AA.

 

Retention of Retained Causes of Actions

     40   

ARTICLE V. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

     40   

A.

 

Assumption of Executory Contracts and Unexpired Leases

     40   

B.

 

Rejection of Executory Contracts and Unexpired Leases

     40   

C.

 

Effect of Confirmation Order

     40   

D.

 

Cure of Defaults for Assumed Executory Contracts and Unexpired Leases

     41   

E.

 

Claims Based on Rejection of Executory Contracts and Unexpired Leases

     41   

F.

 

Preexisting Obligations to the Debtors Under Executory Contracts and Unexpired
Leases

     42   

G.

 

PoJo Modifications and Assumption of PoJo Leases and Documents

     42   

H.

 

IBEW Local 15 Collective Bargaining Agreement

     42   

I.

 

Modifications, Amendments, Supplements, Restatements, or Other Agreements

     42   

J.

 

Reservation of Rights

     43   

K.

 

Nonoccurrence of Effective Date

     43   

ARTICLE VI. PROVISIONS GOVERNING DISTRIBUTIONS

     43   

A.

 

Timing and Calculation of Amounts to Be Distributed

     43   

B.

 

Distribution of Net Sale Proceeds

     44   

C.

 

Distributions on Account of Obligations of Multiple Debtors

     44   

D.

 

Distributions Generally

     44   

E.

 

Rights and Powers of Disbursing Agent

     44   

F.

 

Distributions on Account of Claims Allowed After the Effective Date

     45   

G.

 

Delivery of Distributions and Undeliverable or Unclaimed Distributions

     45   

H.

 

Compliance with Tax Requirements/Allocations

     47   

I.

 

Claims Paid or Payable by Third Parties

     47   

ARTICLE VII. PROCEDURES FOR RESOLVING CONTINGENT UNLIQUIDATED, AND DISPUTED
CLAIMS

     48   

A.

 

Resolution of Disputed Claims

     48   

B.

 

Disallowance of Claims

     48   

C.

 

Amendments to Claims

     49   

ARTICLE VIII. SETTLEMENT, RELEASE, INJUNCTION, AND RELATED PROVISIONS

     49   

A.

 

Discharge of Claims and Termination of Interests; Compromise and Settlement of
Claims, Interests, and Controversies

     49   

B.

 

Subordinated Claims

     49   

C.

 

Debtor Release

     50   

D.

 

Release by Holders of Claims and Interests

     50   

E.

 

Exculpation

     51   

F.

 

Injunction

     51   

G.

 

Purchaser and EIX Released Parties Injunctions

     52   

H.

 

Waiver of Statutory Limitations on Releases

     52   

I.

 

Setoffs

     52   

J.

 

Withdrawal of EIX Proofs of Claim

     52   

K.

 

Special Provision Governing Accrued Professional Compensation Claims and Final
Fee Applications

     53   

ARTICLE IX. EFFECT OF CONFIRMATION OF THE PLAN

     53   

A.

 

Jurisdiction and Venue

     53   

B.

 

Order Approving the Disclosure Statement

     54   

C.

 

Publication of Confirmation Hearing Notice

     54   

 

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TABLE OF CONTENTS (CONT’D)

         PAGE  

D.

 

Voting Report

     54   

E.

 

Judicial Notice

     54   

F.

 

Transmittal and Mailing of Materials; Notice

     54   

G.

 

Solicitation

     54   

H.

 

Modifications to the Plan

     55   

I.

 

Burden of Proof

     55   

J.

 

Bankruptcy Rule 3016(a) Compliance

     55   

K.

 

Compliance with the Requirements of Section 1129 of the Bankruptcy Code

     55   

L.

 

Substantive Consolidation

     61   

M.

 

Securities Under the Plan

     61   

N.

 

Releases and Discharges

     61   

O.

 

Cure of Lessor Notes

     61   

P.

 

Release and Retention of Causes of Action

     61   

Q.

 

Approval of Purchase Agreement and Other Documents and Agreements

     61   

R.

 

Confirmation Hearing Exhibits

     62   

S.

 

Objections to Confirmation of the Plan

     62   

T.

 

Exemption from Transfer Taxes with Respect to the Sale Transaction

     62   

U.

 

Good Faith Purchaser Status

     62   

V.

 

Sale Free and Clear

     62   

W.

 

Retention of Jurisdiction

     62   

X.

 

Plan Supplement

     62   

ARTICLE X. CONDITIONS PRECEDENT TO CONSUMMATION OF THE PLAN

     62   

A.

 

Conditions Precedent to the Effective Date

     62   

B.

 

Waiver of Conditions

     64   

C.

 

Substantial Consummation of the Plan

     64   

D.

 

Effect of Nonoccurrence of Conditions to the Effective Date

     64   

ARTICLE XI. MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN

     64   

A.

 

Modification and Amendments

     64   

B.

 

Effect of Confirmation on Modifications

     65   

C.

 

Revocation or Withdrawal of the Plan

     65   

ARTICLE XII. RETENTION OF JURISDICTION

     65   

ARTICLE XIII. MISCELLANEOUS PROVISIONS

     65   

A.

 

Immediate Binding Effect

     67   

B.

 

Additional Documents

     67   

C.

 

Payment of Statutory Fees

     67   

D.

 

Dissolution of the Committee

     67   

E.

 

Certain Environmental Matters

     68   

F.

 

Treatment of Certain Claims of the PBGC and Pension Plans

     68   

G.

 

Reservation of Rights

     69   

H.

 

Successors and Assigns

     69   

I.

 

Service of Documents

     69   

J.

 

Term of Injunctions or Stays

     73   

K.

 

Entire Agreement

     73   

L.

 

Nonseverability of Plan Provisions

     73   

M.

 

Deadline to File Objections to Certain Claims

     74   

 

iii

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Edison Mission Energy and the other Debtors in the above-captioned Chapter 11
Cases respectfully propose the following joint plan of reorganization pursuant
to chapter 11 of the Bankruptcy Code. Capitalized terms used and not otherwise
defined shall have the meanings ascribed to such terms in Article I.A of the
Plan. The Chapter 11 Cases have been consolidated for procedural purposes only
and are being jointly administered pursuant to an order of the Bankruptcy Court.
Reference is made to the Disclosure Statement for a discussion of the Debtors’
history, businesses, results of operations, historical financial information,
projections, and future operations, as well as a summary and analysis of the
Plan and certain related matters, including the Sale Transaction and
distributions to be made under the Plan. Each Debtor is a proponent of the Plan
contained herein within the meaning of section 1129 of the Bankruptcy Code.

ARTICLE I.

DEFINED TERMS, RULES OF INTERPRETATION,

COMPUTATION OF TIME, AND GOVERNING LAW

 

A. Defined Terms

As used in the Plan, capitalized terms have the meanings set forth below.

1. “2006 EME Senior Notes Indenture” means that certain Indenture, dated as of
June 6, 2006, between EME and the EME Senior Notes Indenture Trustee (as
amended, modified, waived, and/or supplemented from time to time), providing for
the issuance of 7.50% Senior Notes due 2013 and 7.75% Senior Notes due 2016.

2. “2007 EME Senior Notes Indenture” means that certain Indenture, dated as of
May 7, 2007, between EME and the EME Senior Notes Indenture Trustee (as amended,
modified, waived, and/or supplemented from time to time), providing for the
issuance of 7.00% Senior Notes due 2017, 7.20% Senior Notes due 2019, and 7.625%
Senior Notes due 2027.

3. “Accrued Professional Compensation Claims” means all Claims for reasonable
and documented accrued fees and expenses (including transaction or sale fees)
for services rendered by a Professional through and including the Confirmation
Date, to the extent such fees and expenses have not been paid pursuant to the
Interim Compensation Order or any other order of the Bankruptcy Court and
regardless of whether a monthly fee statement or interim fee application has
been Filed for such fees and expenses. To the extent the Bankruptcy Court denies
or reduces by a Final Order any amount of a Professional’s fees or expenses,
then the amount by which such fees or expenses are reduced or denied shall
reduce the applicable Accrued Professional Compensation Claim. For the avoidance
of doubt, the PoJo Restructuring Fees, the Supporting Noteholder Fees, and the
EME Senior Notes Indenture Trustee Fees shall not constitute Accrued
Professional Compensation Claims.

4. “Acquired Companies” has the meaning given in the Purchase Agreement. The
Acquired Companies are identified on Schedule 1 attached hereto.

5. “Administrative Claim” means a Claim, other than an Assumed Liability, for
costs and expenses of administration of the Debtors’ Estates pursuant to
sections 503(b) or 507(a)(2) of the Bankruptcy Code, including, without
limitation: (a) the actual and necessary costs and expenses incurred after the
Petition Date and through the Effective Date of preserving the Estates and
operating the businesses of the Debtors unless a claim for such costs and/or
expenses is Disputed or has been time-barred or otherwise disallowed by the Plan
or a Final Order; (b) Accrued Professional Compensation Claims (to the extent
Allowed by the Bankruptcy Court); (c) all fees and charges assessed against the
Estates pursuant to chapter 123 of the Judicial Code, including but not limited
to the U.S. Trustee Fees; (d) all Allowed requests for compensation or expense
reimbursement for making a substantial contribution in the Chapter 11 Cases
pursuant to sections 503(b)(3), (4), and (5) of the Bankruptcy Code; (e) the
Supporting Noteholder Fees; (f) the PoJo Restructuring Fees; and (g) the EME
Senior Notes Indenture Trustee Fees.

6. “Administrative Claims Bar Date” means the first Business Day that is 30 days
following the Effective Date, subject to any exceptions specifically set forth
in the Plan or a Final Order.

 

1

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7. “Affidavits of Publication” means, collectively, the: (a) Affidavit of
Service, filed by the Notice, Claims, and Solicitation Agent on February 6, 2014
[Docket No. 2013]; and (b) [Affidavit of Service], filed by the Notice, Claims,
and Solicitation Agent on [—], 2014.

8. “Affiliate” shall have the meaning set forth in section 101(2) of the
Bankruptcy Code.

9. “Agreed PoJo Cure Amount” means (a) the sum of all amounts due under the
Facility Leases, including, without limitation, all accrued and unpaid (i) Basic
Lease Rent due and payable on any Rent Payment Date occurring prior to the
Effective Date (including interest on any overdue principal and overdue interest
at the Overdue Rate) and (ii) Supplemental Lease Rent minus (b) the sum of all
payments made in respect of Rent pursuant to any forbearance, extension, or
other agreement with any of the PoJo Parties including the “Initial Payment”
made under the Forbearance Agreement by and among the PoJo Parties dated
December 16, 2012. The Agreed PoJo Cure Amount shall be consistent with the
schedule attached as Exhibit F of the Purchase Agreement, which schedule shall
be included in the Plan Supplement. Capitalized terms used in this definition
but not otherwise defined herein shall have the meanings set forth in the PoJo
Leases and Documents.

10. “Allowed” means with respect to Claims: (a) any Claim, proof of which is
timely Filed by the applicable Claims Bar Date (or for which Claim under the
Plan, the Bankruptcy Code, or a Final Order of the Bankruptcy Court, a Proof of
Claim is not or shall not be required to be Filed); (b) any Claim that is listed
in the Schedules as not contingent, not unliquidated, and not disputed, and for
which no Proof of Claim has been timely Filed; or (c) any Claim allowed pursuant
to the Plan or a Final Order of the Bankruptcy Court; provided that, with
respect to any Claim described in clauses (a) and (b) above, such Claim shall be
considered Allowed only if and to the extent that with respect to such Claim no
objection to the allowance thereof has been interposed at any time prior to or
after the Effective Date within the applicable period of time, if any, fixed by
the Bankruptcy Code, the Bankruptcy Rules, or the Bankruptcy Court, or such an
objection is so interposed and the Claim shall have been Allowed by a Final
Order. Other than as may be provided in Article III for Unimpaired Claims that
are not Assumed Liabilities or in Article V.G of the Plan with respect to the
PoJo Leases and Documents, in no event shall the Allowed amount of any Claim
exceed 100 percent of the principal amount of such Claim or otherwise include
any amount for interest accruing after the Petition Date. Any Claim that (x) has
been or is hereafter listed in the Schedules as contingent, unliquidated, or
disputed, and for which no Proof of Claim is or has been timely Filed, or (y) is
enjoined or released pursuant to the Plan, is not considered Allowed and shall
be expunged without further action by the Debtors and without further notice to
any party or action, approval, or order of the Bankruptcy Court. Notwithstanding
anything to the contrary herein, no Claim of any Entity subject to section
502(d) of the Bankruptcy Code shall be deemed Allowed unless and until such
Entity pays in full the amount that it owes such Debtor or the Reorganization
Trust, as applicable. For the avoidance of doubt, a Proof of Claim filed after
the applicable Claims Bar Date shall not be Allowed for any purposes whatsoever
absent entry of a Final Order allowing such late-filed Claim. “Allow” and
“Allowing” shall have correlative meanings.

11. “Assumed Liabilities” means the liability of any of the Debtors assumed by
the Purchaser or any Post-Effective-Date Debtor Subsidiary pursuant to the
Purchase Agreement.

12. “Avoidance Actions” means any and all actual or potential claims and causes
of action to avoid a transfer of property or an obligation incurred by the
Debtors pursuant to any applicable section of the Bankruptcy Code, including
sections 502, 510, 542, 544, 545, 547–553, and 724(a) of the Bankruptcy Code or
under similar or related state or federal statutes and common law, including
fraudulent transfer laws.

13. “Ballot” means the form approved by the Bankruptcy Court and distributed to
Holders of Impaired Claims entitled to vote on the Plan on which is to be
indicated the acceptance or rejection of the Plan.

14. “Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§
101–1532, as may be amended from time to time.

15. “Bankruptcy Court” means the United States Bankruptcy Court for the Northern
District of Illinois having jurisdiction over the Chapter 11 Cases, and, to the
extent of the withdrawal of any reference under 28 U.S.C. § 157.

 

2

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16. “Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure, as
applicable to the Chapter 11 Cases, promulgated under section 2075 of the
Judicial Code and the general, local, and chambers rules of the Bankruptcy
Court.

17. “Bluescape Letter Agreement” means, collectively, (a) that certain
engagement letter, dated as of November 13, 2013, entered into by and among
Ropes & Gray LLP, as counsel to the Noteholder Group, Bluescape Advisors LLC,
and EME; (b) a term sheet, dated as of November 13, 2013, signed by Bluescape
Advisors LLC, EME, and Ropes & Gray LLP as counsel to the Noteholder Group; and
(c) that certain Indemnification Agreement, dated as of November 13, signed by
EME in favor of Bluescape Advisors LLC.

18. “Business Day” means any day, other than a Saturday, Sunday, or any other
date on which banks located in Chicago, Illinois are closed for business as a
result of federal, state, or local holiday.

19. “Capistrano Note” means that certain Secured Promissory Note, dated as of
February 13, 2012, between Capistrano Wind Holdings, Inc. and Edison Mission
Wind, Inc.

20. “Capistrano Pledge Agreement” means that certain Security and Pledge
Agreement, dated as of February 13, 2012, between Capistrano Wind II, LLC and
Edison Mission Wind, Inc.

21. “Cash” means the legal tender of the United States of America or the
equivalent thereof, including bank deposits and checks.

22. “Causes of Action” means any Claim, cause of action (including Avoidance
Actions), controversy, right of setoff, cross claim, counterclaim, or recoupment
and any claim on contracts or for breaches of duties imposed by law or in
equity, demand, right, action, Lien, indemnity, guaranty, suit, obligation,
liability, damage, judgment, account, defense, power, privilege, license, and
franchise of any kind or character whatsoever, known, unknown, fixed or
contingent, matured or unmatured, suspected or unsuspected, liquidated or
unliquidated, disputed or undisputed, secured or unsecured, assertable directly
or derivatively, whether arising before, on, or after the Petition Date, in
contract or in tort, in law or in equity, or pursuant to any other theory of
law.

23. “Chapter 11 Cases” means the jointly administered chapter 11 cases commenced
by the Debtors in the Bankruptcy Court and styled In re Edison Mission Energy,
et al., No. 12-49219 (JPC).

 

24. “Claim” shall have the meaning set forth in section 101(5) of the Bankruptcy
Code.

25. “Claims Bar Date” means the date by which a Proof of Claim must be or must
have been Filed, as established by (a) the Order (A) Setting Bar Dates for
Filing Proofs of Claim, Including 503(b)(9) Proofs of Claim and (B) Approving
the Form and Manner of Notice Thereof, entered April 11, 2013 [Docket No. 669],
(b) the Order (A) Setting Bar Dates for Filing Proofs of Claim, Including
Section 503(b)(9) Proofs of Claim, Against EME Homer City Generation L.P.,
Edison Mission Finance Co., and Homer City Property Holdings, Inc., and
(B) Approving the Form and Manner of Notice Thereof, entered August 22, 2013
[Docket No. 1137], or (c) any other Final Order of the Bankruptcy Court, as
applicable.

 

26. “Claims Register” means the official register of Claims maintained by the
Notice, Claims, and Solicitation Agent.

27. “Class” means a category of Holders of Claims or Interests as set forth in
Article III of the Plan in accordance with section 1122(a) of the Bankruptcy
Code.

28. “Committee” means the official committee of unsecured creditors appointed in
the Chapter 11 Cases pursuant to section 1102(a) of the Bankruptcy Code on
January 7, 2013 [Docket No. 202], as amended on January 18, 2013 [Docket
No. 308].

29. “Committee Members” means each of the following, in each case solely in its
capacity as a member of the Committee: (a) Wells Fargo Bank, National
Association, solely in its capacity as EME Senior Notes

 

3

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Indenture Trustee; (b) Exelon Corp., as successor in interest to Commonwealth
Edison Company; (c) Clennon Electric; (d) The Bank of New York Mellon, as
successor pass through trustee and successor lease indenture trustee;
(e) International Brotherhood of Boilermakers Local One; (f) Nesbitt Asset
Recovery, LLC; (g) Peabody Coalsales, LLC; (h) Geo. J. Beemsterboer, Inc.; and
(i) Rowell Chemical Corp.

30. “Compensation and Benefits Programs” means all employment and severance
policies, all compensation, and any other employee benefit plans, policies, and
programs and other arrangements (and all amendments and modifications thereto),
in each case in place as of the Petition Date, applicable to the Debtors’ and
Non-Debtor Subsidiaries’ respective employees, former employees, retirees, and
non-employee directors and employees, former employees, and retirees of their
subsidiaries, including, without limitations, all savings plans, retirement
plans (whether or not such plans are intended to be qualified), health and/or
welfare plans, disability plans, severance benefit plans, incentive plans and
life, accidental death, and dismemberment insurance plans, or other similar
plans.

31. “Compensation and Benefits Programs Escrow” means an interest-bearing
account to hold and maintain an amount of Cash equal to the obligations under
the Exit Plan and the Compensation and Benefits Programs funded by the
Reorganization Trust on the Effective Date solely for the purpose of making
payments under the Exit Plan and the Compensation and Benefits Programs in
accordance with Article IV.H of the Plan.

 

32. “Compensation Committee” means the Compensation Committee of the Board of
Directors of EME.

33. “Confirmation” means the entry of the Confirmation Order on the docket of
the Bankruptcy Court in the Chapter 11 Cases.

34. “Confirmation Date” means the date upon which the Bankruptcy Court enters
the Confirmation Order on its docket in the Chapter 11 Cases, within the meaning
of Bankruptcy Rules 5003 and 9021.

35. “Confirmation Hearing” means the hearing held by the Bankruptcy Court to
consider Confirmation of the Plan pursuant to section 1129 of the Bankruptcy
Code.

36. “Confirmation Order” means the order of the Bankruptcy Court confirming the
Plan pursuant to section 1129 of the Bankruptcy Code.

 

37. “Consenting Noteholders” means those Supporting Noteholders that have signed
the EIX Settlement Agreement.

 

38. “Consummation” means the occurrence of the Effective Date.

39. “Cure Cost” means all amounts (or such lesser amount as may be agreed upon
by the parties under an Executory Contract or Unexpired Lease) payable by the
Purchaser required to cure any defaults under any Executory Contract or
Unexpired Lease that is to be assumed and/or assumed and assigned by the Debtors
pursuant to sections 365 or 1123 of the Bankruptcy Code; provided, however, the
amount required to cure any default under the PoJo Leases and Documents shall be
satisfied by the payment in Cash of the Agreed PoJo Cure Amount and the PoJo
Restructuring Fees on the Effective Date by the Reorganization Trust.

40. “Debtors” means, collectively: Camino Energy Company, Chestnut Ridge Energy
Company, EME, Edison Mission Finance Co., Edison Mission Energy Fuel Services,
LLC, Edison Mission Fuel Resources, Inc., Edison Mission Fuel Transportation,
Inc., Edison Mission Holdings Co., Edison Mission Midwest Holdings Co.,

EMEHC, Homer City Property Holdings, Inc., Midwest Finance Corp., Midwest
Generation EME, LLC, MWG, Midwest Generation Procurement Services, LLC, Midwest
Peaker Holdings, Inc., Mission Energy Westside, Inc., San Joaquin Energy
Company, Southern Sierra Energy Company, and Western Sierra Energy Company.

 

41. “Debtor Subsidiaries” means, collectively, each Debtor other than: (a) EME;
and (b) the Homer City Debtors.

 

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42. “Disbursing Agent” means, on the Effective Date, the Plan Administrator, its
agent, the Notice, Claims, and Solicitation Agent, or any other Entity or
Entities designated by the Plan Administrator to make or facilitate
distributions that are to be made on or after the Effective Date pursuant to the
Plan.

43. “Disclosure Statement” means the disclosure statement for this Plan,
including all exhibits and schedules thereto and references therein that relate
to the Plan, that is or has been (as the case may be) prepared, approved, and
distributed in accordance with the Bankruptcy Code, the Bankruptcy Rules, and
any other applicable law.

44. “Disclosure Statement Order” means the Order Approving (A) the Adequacy of
the Disclosure Statement, (B) Solicitation and Notice Procedures with Respect to
Confirmation of the Debtors’ Joint Chapter 11 Plan of Reorganization, (C) the
Form of Ballots and Notices in Connection Therewith, and (D) the Scheduling of
Certain Dates with Respect Thereto, entered by the Bankruptcy Court on
December 19, 2013 [Docket No. 1718].

45. “Disputed” means, with respect to any Claim or Interest, any Claim or
Interest that is not yet Allowed. For the avoidance of doubt, a Disputed Claim
or Interest shall not include any Claim or Interest that has been disallowed
under the Plan or by Final Order.

46. “Disputed Claims Reserve” means an appropriate reserve, to be determined by
EME, the Committee, and the Supporting Noteholders, unless otherwise ordered by
the Bankruptcy Court, for distributions on account of Disputed Claims that are
neither Assumed Liabilities nor Settlement Assumed Liabilities and that are
subsequently Allowed after the Effective Date.

47. “Disputed Claims Reserve Amount” means the amount of assets determined by
EME, the Committee, and the Supporting Noteholders that would likely have been
distributed to the Holders of all applicable Disputed Claims against EME as if
such Disputed Claims against EME had been Allowed Claims against EME on the
Effective Date, with the amount of such Allowed Claims to be determined, solely
for the purposes of establishing reserves and for maximum distribution purposes,
to be (a) the lesser of (i) the asserted amount of each Disputed Claim against
EME as scheduled by EME or, if and solely to the extent a non-duplicative Proof
of Claim was filed in an asserted amount greater than the scheduled amount, the
asserted amount filed with the Bankruptcy Court as set forth in such
non-duplicative Proof of Claim or as provided by the parties to EME as further
information with respect to the Proof of Claim, and (ii) the amount, if any,
estimated by the Bankruptcy Court pursuant to section 502(c) of the Bankruptcy
Code or ordered by other order of the Bankruptcy Court, or (b) the amount
otherwise agreed to by EME, the Committee, the Supporting Noteholders, and the
Holder of such Disputed or unliquidated Claim for reserve purposes.

48. “Distribution Record Date” means the date for determining which Holders of
Allowed Claims are eligible to receive distributions hereunder, which shall be
(a) the Effective Date or (b) such other date as designated in a Bankruptcy
Court order.

49. “D&O Liability Insurance Policies” means all insurance policies of any of
the Debtors for directors’, managers’, and officers’ liability.

50. “DTC” means Depository Trust Company.

51. “Effective Date” means the date agreed to by the Debtors and the Purchaser
Parties, in consultation with the Committee and the Supporting Noteholders, that
is one (1) Business Day after the Confirmation Date on which: (a) no stay of the
Confirmation Order is in effect; and (b) all conditions precedent specified in
Article X.A of the Plan have been satisfied or waived (in accordance with
Article X.B of the Plan).

52. “EIX” means Edison International, a California corporation.

53. “EIX Escrow Account” means the Escrow Account (as defined in the EIX
Settlement Agreement).

 

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54. “EIX Litigation Claims” means all Claims and Causes of Action made, or which
could be made, on behalf of the Debtors and the Non-Debtor Subsidiaries against
the EIX Released Parties, including all Claims against the entities and
individuals named as proposed defendants in the draft complaint attached to the
Motion of Official Committee of Unsecured Creditors of Edison Mission Energy, et
al., Pursuant to 11 U.S.C. §§ 105(a), 1103(c) and 1109(b), for Entry of an Order
(A) Granting Leave, Standing and Authority to Prosecute, and Sole Authority to
Settle, Certain Claims on Behalf of the Debtors’ Estates and (B) Authorizing the
Committee to Direct and Control Certain Accounting Professionals [Docket
No. 1054].

55. “EIX Note Sale” means the purchase and sale of the EIX Notes.

56. “EIX Notes” means the zero-coupon notes to be issued by EIX pursuant to the
EIX Settlement Agreement.

57. “EIX Proofs of Claim” means any and all Proofs of Claim filed by the EIX
Released Parties against any of the Debtors in the Chapter 11 Cases, including,
without limitation, as set forth in the Debtors’ Sixth Omnibus Objection to
Certain Proofs of Claim (No Liability Claims) [Docket No. 1748].

58. “EIX Released Parties” means EIX, the EMG Subsidiaries, Post-Reorganization
EME, SCE, their respective subsidiaries (other than the Debtors and the
Non-Debtor Subsidiaries), and their respective current and former officers,
directors, principals, members, employees, agents, financial advisors,
attorneys, accountants, investment bankers, consultants, insurers (but only if
the insurer has given the EME Released Parties a release substantially on the
terms set forth in Section 2.g of the EIX Settlement Agreement),
representatives, and other professionals, in each case in their capacity as
such, and/or in any such capacity on behalf of EME, including but not limited to
all Entities and individuals named as proposed defendants with respect to the
EIX Litigation Claims.

59. “EIX Releasing Parties” means EIX, the EMG Subsidiaries, Post-Reorganization
EME, their respective subsidiaries (other than the Debtors, the Non-Debtor
Subsidiaries, SCE, and SCE’s subsidiaries), and their respective current and
former respective officers, directors, principals, members, employees, agents,
financial advisors, attorneys, accountants, investment bankers, consultants,
insurers (but only if the insurer has given the EME Released Parties a release
substantially on the terms set forth in Section 2.g of the EIX Settlement
Agreement), representatives, and other professionals, in each case in their
capacity as such.

60. “EIX Settlement” means the settlement among EME, EIX, and the Consenting
Noteholders on the terms set forth in the EIX Settlement Agreement.

61. “EIX Settlement Agreement” means that certain Settlement Agreement, dated as
of February 18, 2014, by and among EME (on behalf of itself and its
subsidiaries), EIX (on behalf of itself and the EMG Subsidiaries), and the
Consenting Noteholders, a copy of which shall be included in the Plan
Supplement, together with all exhibits, schedules, and attachments thereto,
including the EIX Settlement Ancillary Documents, as the same may be amended,
supplemented, or modified.

62. “EIX Settlement Ancillary Documents” means the EIX Notes, the NRG Side
Letter (as defined in the EIX Settlement Agreement), and any other agreements,
instruments, or other documents executed by any party to the EIX Settlement
Agreement in connection with the EIX Settlement Agreement.

63. “EIX Settlement Conditions” means the Conditions Precedent as defined in the
EIX Settlement Agreement.

64. “EIX Settlement Proceeds” means the Cash in the aggregate amount of the
Effective Date Cash Amount (as defined in the EIX Settlement Agreement) and the
proceeds of the EIX Notes, including, without limitation, the Cash proceeds of
any EIX Note Sale.

65. “ELPC Lawsuit” means that certain lawsuit entitled Sierra Club, et al. v.
Midwest Generation, LLC, pending in the Illinois Pollution Control Board [IPCB
Case No. 2013-015].

 

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66. “EME” means Edison Mission Energy, a Delaware corporation and a Debtor in
the Chapter 11 Cases.

67. “EMEHC” means EME Homer City Generation L.P., a Pennsylvania limited
partnership and a Debtor in the Chapter 11 Cases.

68. “EME Interests” means Interests in EME.

69. “EME Retained Causes of Action” means those Avoidance Actions of the Debtors
that are identified in an exhibit to the Plan Supplement, which exhibit shall be
in form and substance reasonably acceptable to the Committee and Supporting
Noteholders. The EME Retained Causes of Action shall vest in the Reorganization
Trust on the Effective Date. The EME Retained Causes of Action shall not include
the EIX Litigation Claims.

70. “EME Senior Notes” means, collectively, the: (a) 7.50% Senior Notes due
2013, issued in the original principal amount of $500,000,000 pursuant to the
2006 EME Senior Notes Indenture; (b) 7.75% Senior Notes due 2016, issued in the
original principal amount of $500,000,000 pursuant to the 2006 EME Senior Notes
Indenture; (c) 7.00% Senior Notes due 2017, issued in the original principal
amount of $1,200,000,000 pursuant to the 2007 EME Senior Notes Indenture;
(d) 7.20% Senior Notes due 2019, issued in the original principal amount of
$800,000,000 pursuant to the 2007 EME Senior Notes Indenture; and (e) 7.625%
Senior Notes due 2027, issued in the original principal amount of $700,000,000
pursuant to the 2007 EME Senior Notes Indenture.

71. “EME Senior Notes Claim” means any Claim against EME arising from or based
upon the EME Senior Notes or the EME Senior Notes Indentures, which Claim shall
be Allowed against EME in an amount equal to $[—].

72. “EME Senior Notes Indentures” means the 2006 EME Senior Notes Indenture and
2007 EME Senior Notes Indenture.

73. “EME Senior Notes Indenture Trustee” means Wells Fargo Bank, National
Association, solely in its capacity as indenture trustee under the EME Senior
Notes Indentures.

74. “EME Senior Notes Indenture Trustee Charging Lien” means any liens for
payment of EME Senior Notes Indenture Trustee fees, costs, expenses and
indemnification, including the fees, costs and expenses of the EME Senior Notes
Indenture Trustee’s professionals, as set forth in the EME Senior Notes
Indentures.

75. “EME Senior Notes Indenture Trustee Fees” means the unpaid fees, costs, and
expenses of the EME Senior Notes Indenture Trustee, including fees, costs, and
expenses of the EME Senior Notes Indenture Trustee’s attorneys, payable pursuant
to the EME Senior Notes Indentures.

76. “EME Severance Plan” means that certain severance plan approved for certain
EME Employees pursuant to the Shared Services Extension Order.

77. “EMG” means Edison Mission Group, Inc., a Delaware corporation.

78. “EMG Subsidiaries” means EMG and its direct and indirect subsidiaries other
than the Debtors and the Non-Debtor Subsidiaries.

79. “Employees” means, as of the Effective Date, the employees of the Debtors
and the Non-Debtor Subsidiaries.

80. “Entity” shall have the meaning set forth in section 101(15) of the
Bankruptcy Code.

81. “Environmental Law” means all federal, state and local statutes,
regulations, laws, ordinances, rules licenses, permits, and similar provisions
having the force or effect of law, all judicial and administrative orders,

 

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agreements, and determinations and all common law concerning pollution or
protection of the environment, or

environmental impacts on human health and safety, including, without limitation,
the Comprehensive Environmental Response, Compensation, and Liability Act; the
Clean Water Act; the Clean Air Act; the Emergency Planning and Community
Right-to-Know Act; the Federal Insecticide, Fungicide, and Rodenticide Act; the
Resource Conservation and Recovery Act; the Safe Drinking Water Act; the Surface
Mining Control and Reclamation Act; the Toxic Substances Control Act; and any
state or local equivalents.

82. “Environmental Actions” means the court proceeding captioned United States,
et al., v. Midwest Generation, et al.,
No. 09-cv-5277 (N.D. Ill.) and the related appeals pending before the United
States Court of Appeals for the Seventh Circuit,
Nos. 12-1026, 12-1051, the court proceeding captioned United States, et al., v.
EME Homer City Generation LP, et al.,
Nos. 2-11-cv-00019 (W.D. Penn.) and the related appeals pending before the
United States Court of Appeals for the Third Circuit, Nos. 11-4407 and 11-4408,
the Sierra Club Lawsuit, and the ELPC Lawsuit.

83. “Estate” means, as to each Debtor, the estate created for the Debtor on the
Petition Date pursuant to section 541 of the Bankruptcy Code.

84. “Exchange Act” means the Securities Exchange Act of 1934, 15 U.S.C. §§
78a–78oo, as now in effect and hereafter amended, the rules and regulations
promulgated thereunder, and any similar federal, state, or local law.

85. “Excluded Assets” means any asset of the Debtors that is not (a) acquired by
the Purchaser or (b) retained by the Post-Effective-Date Debtor Subsidiaries
pursuant to the Purchase Agreement.

86. “Excluded Liabilities” means any liability of the Debtors or Non-Debtor
Subsidiaries that is defined as an Excluded Liability under the Purchase
Agreement, including, for the avoidance of doubt, liabilities asserted by the
PBGC and liabilities asserted by Taxing Authorities that arose prior to the
Effective Date, and rejection damage claims on account of any Executory Contract
or Unexpired Lease rejected by the Debtors (a) before the date of the Plan
Sponsor Agreement or (b) on or after the date of the Plan Sponsor Agreement
without the prior written consent of the Purchaser.

87. “Exculpated Parties” means, collectively: (a) the Purchaser Parties and the
Acquired Companies; (b) the present and former members of the Noteholder Group,
generally, and the Supporting Noteholders and the Consenting Noteholders, at any
time, in such capacity; (c) the EME Senior Notes Indenture Trustee; (d) the
Committee and the Committee Members; (e) the PoJo Parties; (f) the Debtors;
(g) the Reorganization Trust; (h) the Plan Administrator; (i) the
Post-Effective-Date Debtor Subsidiaries; (i) the Post-Effective-Date Homer City
Debtors; (j) the EIX Released Parties; and (k) with respect to the foregoing
entities in clauses (a) through (j), their respective current and former
affiliates, subsidiaries, officers, directors, principals, members, employees,
agents, financial advisors, attorneys, accountants, investment bankers,
consultants, representatives, and other professionals and, solely with respect
to the Purchaser Parties and the Acquired Companies and Supporting Noteholders,
their permitted assigns; and (g) the officers, directors, principals, members,
employees, agents, financial advisors, attorneys, accountants, investment
bankers, consultants, representatives, and other professionals of the Debtors
and Non-Debtor Subsidiaries that served in such capacities during the Chapter 11
Cases.

88. “Exculpation” means the exculpation set forth in Article VIII.E of the Plan.

89. “Executory Contract” means a contract to which one or more of the Debtors is
a party that is subject to assumption or rejection under sections 365 or 1123 of
the Bankruptcy Code.

90. “Exit Plan” means the payments made during the Chapter 11 Cases or after the
Effective Date pursuant to the Order Approving Exit Plan, entered by the
Bankruptcy Court on November 7, 2013 [Docket No. 1561].

91. “FERC” means the Federal Energy Regulatory Commission.

 

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92. “File,” “Filed,” or “Filing” means file, filed, or filing with the
Bankruptcy Court in the Chapter 11 Cases or, with respect to the filing of a
Proof of Claim or proof of Interest, the Notice, Claims, and Solicitation Agent.

93. “Final Order” means, as applicable, an order or judgment of the Bankruptcy
Court or other court of competent jurisdiction with respect to the relevant
subject matter which has not been reversed, stayed, modified, or amended, as to
which the time to appeal, petition for certiorari or move for reargument,
reconsideration, or rehearing has expired and no appeal, petition for certiorari
or motion for reargument, reconsideration, or rehearing has been timely filed,
or as to which any appeal, petition for certiorari or motion for reargument,
reconsideration or rehearing that has been or may be filed has been resolved by
the highest court to which the order or judgment was appealed or from which
certiorari, reargument, reconsideration, or rehearing was sought; provided that
the possibility that a motion under Rule 60 of the Federal Rules of Civil
Procedure, or any analogous rule under the Bankruptcy Rules or the Local
Bankruptcy Rules of the Bankruptcy Court, may be filed relating to such order
shall not prevent such order from being a Final Order; provided, further, that,
subject to the terms of the Purchase Agreement, the Debtors reserve the right to
waive any appeal period in consultation with the Purchaser Parties, the
Committee, the Supporting Noteholders, EIX (with respect to any order that
affects the rights of EIX under the EIX Settlement Agreement), and (solely with
respect to any order that affects the rights of the PoJo Parties) the PoJo
Parties.

94. “Final Insider Incentive Plan Order” means the Final Order Authorizing
Compensation of Insider Senior Executives Under Employee Incentive Programs,
entered by the Bankruptcy Court on March 20, 2013 [Docket No. 627].

95. “Final Non-Insider Incentive Plan Order” means the Final Order Authorizing
the Debtors to Implement Incentive Plans for Non-Insider Employees, entered by
the Bankruptcy Court on March 20, 2013 [Docket No. 626].

96. “Final Wages Order” means the Amended Final Order Approving the Debtors’
(A) Payment of Certain Prepetition Compensation and Reimbursable Employee
Expenses, (B) Continued Employee Medical and Other Benefits, and (C) Continued
Employee Compensation and Benefits Programs, entered by the Bankruptcy Court on
February 5, 2013 [Docket No. 401].

97. “General Unsecured Claims” means any Claim that is not Secured and is not:
(a) an Administrative Claim; (b) a Priority Tax Claim; (c) an Other Priority
Claim; (d) a Subordinated Claim; or (e) an Intercompany Claim.

98. “Governmental Unit” shall have the meaning set forth in section 101(27) of
the Bankruptcy Code.

99. “Holder” means any Entity holding a Claim or an Interest.

100. “Homer City Debtors” means, collectively: (a) Chestnut Ridge Energy
Company; (b) Edison Mission Finance Co.; (c) EMEHC; (d) Homer City Property
Holdings, Inc.; (e) Mission Energy Westside Inc.; (f) Edison Mission Holdings
Co.; and (g) Edison Mission Energy Services, Inc.

101. “Homer City Petition Date” means May 2, 2013, the date on which Edison
Mission Finance Co., EMEHC, and Homer City Property Holdings, Inc. commenced
their respective Chapter 11 Cases in the Bankruptcy Court.

102. “Homer City Waterfall” means, with respect to any amount of Homer City Wind
Down Proceeds held by a Homer City Debtor, distributions in the following order
of priority (in each case except as otherwise provided by the Plan): first, to
Holders of Allowed Secured Claims against the applicable Homer City Debtor,
solely with respect to the collateral securing such Allowed Secured Claims;
second, to Holders of Allowed Administrative Claims against the applicable Homer
City Debtor; third, to Holders of Allowed Priority Tax Claims and Allowed Other
Priority Claims against the applicable Homer City Debtor; fourth, to Holders of
Allowed General Unsecured Claims and Allowed Intercompany Claims against the
applicable Homer City Debtor; and fifth,

 

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to EME on account of Allowed Intercompany Interests in the applicable Homer City
Debtor the balance, if any, of such amount.

103. “Homer City Wind Down” means the process commencing on the Effective Date
to dissolve the Homer City Debtors, including any actions that the Plan
Administrator determines in its sole discretion are necessary or appropriate to
liquidate, settle, compromise, or resolve any Claims against, or assets held by,
the Homer City Debtors.

104. “Homer City Wind Down Proceeds” means any proceeds of the Homer City Wind
Down.

105. “IBEW CBA” means that certain Collective Bargaining Agreement, dated as of
March 6, 2006, between MWG and the International Brotherhood of Electrical
Workers, Local No. 15, as amended, extended, modified, or supplemented from time
to time, including in accordance with Order Approving Entry into Extension of
Collective Bargaining Agreement and Granting Related Relief [Docket No. 1562],
entered by the Bankruptcy Court on November 7, 2013.

106. “Impaired” means, with respect to a Class of Claims or Interests, a Class
of Claims or Interests that is not Unimpaired.

107. “Intercompany Claim” means any Claim held by a Debtor or any non-Debtor
Affiliate against any Debtor, including: (a) the Intercompany Note Claims; and
(b) the MWG Bridge Loan; provided that the Intercompany Claims shall not include
Claims of the EIX Released Parties against the Debtors arising under the
Settlement Agreement (including under Section 6 of the Settlement Agreement
regarding shared services) or the Shared Services Extension Order.

108. “Intercompany Interests” means Interests in any Debtor Subsidiary held by a
Debtor.

109. “Intercompany Notes” means, collectively: (a) that certain Promissory Note,
dated as of August 24, 2000, by EME, as borrower, in favor of MWG, as lender, in
the original principal amount of $211,738,800, due July 2, 2014; (b) that
certain Promissory Note, dated as of August 24, 2000, by EME, as borrower, in
favor of MWG, as lender, in the original principal amount of $285,849,200, due
January 2, 2015; (c) that certain Promissory Note, dated as of August 24, 2000,
by EME, as borrower, in favor of MWG, as lender, in the original principal
amount of $369,961,200, due July 2, 2014; and (d) that certain Promissory Note,
dated as of August 24, 2000, by EME, as borrower, in favor of MWG, as lender, in
the original principal amount of $499,450,800, due January 2, 2016, each of
which shall be terminated and extinguished and of no further force and effect as
of the Effective Date pursuant to this Plan.

110. “Intercompany Note Claim” means any Claim of MWG against EME on account of
the Intercompany Notes.

111. “Interests” means the common stock, limited liability company interests,
partnership interests and any other equity, ownership, or profits interests in
and of any Debtor and options, warrants, rights, or other securities or
agreements to acquire the common stock, limited liability company interests,
partnership interests or other equity, ownership, or profits interests of any
Debtor (whether or not arising under or in connection with any employment
agreement), including any Claim against the Debtors subject to subordination
pursuant to section 510(b) of the Bankruptcy Code arising from or related to any
of the foregoing.

112. “Interim Compensation Order” means the Order Approving Procedures for
Interim Compensation and Reimbursement of Expenses for Professionals and
Official Committee Members, entered January 18, 2013 [Docket No. 331], as the
same may be modified by a Court order approving the retention of a specific
Professional or otherwise.

113. “Judicial Code” means title 28 of the United States Code, 28 U.S.C. §§
1–4001.

114. “Lien” shall have the meaning set forth in section 101(37) of the
Bankruptcy Code.

 

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115. “Long-Term Incentive Plan” means the long-term incentive plan approved for
certain executive Employees pursuant to the Final Insider Incentive Plan Order
and Final Non-Insider Incentive Plan Order. For

purposes of the Long-Term Incentive Plan, the Plan shall have an EME Adjusted
Enterprise Value (as defined in the Long-Term Incentive Plan) in the amount set
forth in that certain notice, dated as of [—], 2014, by the Debtors to the
advisors to the Committee and the Supporting Noteholders.

116. “MWG” means Midwest Generation, LLC, a Delaware limited liability company
and a Debtor in the Chapter 11 Cases.

117. “MWG Bridge Loan” means that certain intercompany loan made by EME, as
lender, to MWG, as borrower, pursuant to the Order (A) Authorizing Midwest
Generation, LLC to Grant First Priority Liens on Unencumbered Assets and Second
Priority Liens on Encumbered Assets, in Connection with the MWG Bridge Loan, and
(B) Granting Related Relief [Docket No. 1573], entered by the Bankruptcy Court
on November 12, 2013.

118. “Net Sale Proceeds” means the Sale Proceeds less Cash in an amount equal to
the aggregate amount of any of the following to the extent they do not
constitute Assumed Liabilities pursuant to the Purchase Agreement: (a) Allowed
Secured Claims; (b) Allowed Administrative Claims (including, without
limitation, Accrued Professional Compensation Claims (and any estimates thereof
under Article III.C.3)); (c) Allowed Priority Tax Claims; (d) Allowed Other
Priority Claims; (e) Allowed General Unsecured Claims against Debtor
Subsidiaries; and (f) any other Cash to be paid or reserved for payments
pursuant to and in accordance with the Plan and the Purchase Agreement,
including, without limitation, the Disputed Claims Reserve, the Wind Down
Budget, the Exit Plan, the Compensation and Benefits Programs, the Supporting
Noteholder Fees, the PoJo Restructuring Fees, and the EME Senior Notes Indenture
Trustee Fees.

119. “Net Settlement Proceeds” means the EIX Settlement Proceeds less Cash in an
amount equal to the amount of Cash in the EIX Escrow Account (as such amount may
be reduced from time to time in accordance with the EIX Settlement Agreement).

120. “New Governance Documents” means the Reorganization Trust Agreement and any
other organizational or governance documents of the Reorganization Trust. The
New Governance Documents shall be in form and substance acceptable to the
Debtors, Committee, and Supporting Noteholders.

121. “New Interests” means the common stock, limited liability company
interests, or other equity interests or economic interest, as the case may be,
in the Reorganization Trust.

122. “Non-Debtor Subsidiaries” means all direct and indirect subsidiaries of any
Debtor that is not a Debtor in the Chapter 11 Cases.

123. “Noteholder Group” refers to certain Holders of the EME Senior Notes Claims
(including the Supporting Noteholders, in such capacity) represented by Ropes &
Gray LLP and Houlihan Lokey Capital, Inc.

124. “Notice, Claims, and Solicitation Agent” means GCG, Inc., in its capacity
as notice, claims, and solicitation agent for the Debtors.

125. “Original Petition Date” means December 17, 2012, the date on which each
Debtor other than Edison Mission Finance Co., EMEHC, and Homer City Property
Holdings, Inc. commenced their respective Chapter 11 Cases in the Bankruptcy
Court.

126. “Other Priority Claim” means any Claim against any of the Debtors described
in section 507(a) of the Bankruptcy Code to the extent such Claim has not
already been paid during the Chapter 11 Cases, other than: (a) an Administrative
Claim; (b) a Priority Tax Claim; or (c) an Assumed Liability.

127. “Parent” means NRG Energy, Inc.

 

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128. “Parent Common Stock Effective Date Market Value” means, with respect t the
common stock of the Parent, the mean daily per-share volume-weighted average
price over the period of the five (5) Business Days prior to the Effective Date,
as displayed under the heading “Bloomberg VWAP” on Bloomberg page: [—] in
respect of the

period from the scheduled open of trading on the principal trading market for
the common stock of the Parent to the scheduled close of trading on such market
on such Business Day (or if such volume-weighted average price is unavailable,
the market value of one share of common stock of the Parent on such Business Day
as the Reorganization Trust Oversight Board determines in good faith using a
volume-weighted method).

129. “PBGC” means the Pension Benefit Guaranty Corporation.

130. “Person” shall have the meaning set forth in section 101(41) of the
Bankruptcy Code.

131. “Petition Date” means the Original Petition Date or the Homer City Petition
Date, as applicable.

132. “Plan” means this Debtors’ Third Amended Joint Chapter 11 Plan of
Reorganization, as the same may be amended, supplemented, or modified from time
to time with the reasonable consent of the Purchaser Parties, the Committee, the
Supporting Noteholders, EIX (solely with respect to terms inconsistent with, or
implementing, the EIX Settlement Agreement), and (solely with respect to any
terms thereof that affect the rights of the PoJo Parties) the PoJo Parties,
including the Plan Supplement, which is incorporated herein by reference and
made part of the Plan as if set forth herein.

133. “Plan Administrator” means the Reorganization Trust.

134. “Plan Modifications” shall have the meaning set forth in Article IX.H of
the Plan.

135. “Plan Modification Notice Period” shall have the meaning set forth in
Article IX.H of the Plan.

136. “Plan Sponsor Agreement” means that certain Plan Sponsor Agreement, dated
as of October 18, 2013, between the Purchaser Parties, EME, the Debtor
Subsidiaries, the PoJo Parties, the Committee, and the Supporting Noteholders.

137. “Plan Supplement” means the compilation of documents and forms of
documents, schedules, and exhibits to the Plan, to be Filed not later than ten
days prior to the Voting Deadline, as amended, supplemented, or modified from
time to time in accordance with the terms of the Plan, the Purchase Agreement,
the Plan Support Agreement, the EIX Settlement Agreement, the Bankruptcy Code,
and the Bankruptcy Rules, including: (a) to the extent known, the identity of
the members of the board of directors of Post-Reorganization EME and the
Reorganization Trust Oversight Board and the nature and compensation for any
member of the Board of Post-Reorganization EME or the Reorganization Trust
Oversight Board who is an “insider” under section 101(31) of the Bankruptcy
Code; (b) the Schedule of Assumed Executory Contracts and Unexpired Leases;
(c) the Schedule of Rejected Executory Contracts and Unexpired Leases; (d) the
applicable New Governance Documents; (e) the Purchase Agreement; (f) a schedule
identifying the EME Retained Causes of Action; (g) a schedule identifying the
Purchaser Retained Causes of Action; (h) the Schedule of Eligible Employees;
(i) the amount of the Disputed Claims Reserve Amount; (j) the calculation of the
Agreed PoJo Cure Amount; (k) a summary of the Wind Down Budget, subject to
appropriate confidentiality protections; (l) any identification and tax
information that will be requested of recipients of New Interests under Article
VI.G.2 of the Plan; and (m) the EIX Settlement Agreement. Except as specifically
provided otherwise in the Plan, each document, schedule, and exhibit included in
the Plan Supplement shall be reasonably acceptable to the Purchaser Parties, the
Committee, the Supporting Noteholders, (solely with respect to terms
inconsistent with, or implementing, the EIX Settlement Agreement) EIX, and
(solely with respect to any document, schedule, or exhibit that affects the
rights of the PoJo Parties) the PoJo Parties.

138. “PoJo EME Guarantee” means, collectively: (a) that certain guaranty
agreement dated August 17, 2000, between EME and Nesbitt Asset Recovery Series
P-1 (f/k/a Powerton Trust I); (b) that certain guaranty agreement dated
August 17, 2000, between EME and Powerton Trust II; (c) that certain guaranty
agreement dated August 17, 2000, between EME and Nesbitt Asset Recovery Series
J-1 (f/k/a Joliet Trust I); and (d) that certain guaranty agreement dated
August 17, 2000, between EME and Joliet Trust II.

 

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139. “PoJo EME Guarantees” means (a) each PoJo EME Guarantee, (b) the PoJo EME
Reimbursement Agreement, and (c) each PoJo EME OP Guarantee, which shall each be
released, extinguished, and of no further force and effect on the Effective Date
pursuant to the Plan.

140. “PoJo EME OP Guarantee” means, collectively, (a) that certain guaranty
agreement dated as of August 17, 2000 between EME, Nesbitt Asset Recovery LLC,
Series P-1 (f/k/a Powerton Generation I, LLC) and Nesbit Asset Recovery (f/k/a
PSEGR Midwest, LLC); (b) that certain guaranty agreement dated as of August 17,
2000 between EME, Powerton Generation II, LLC and Associates Capital Investment,
L.L.C.; (c) that certain guaranty agreement dated as of August 17, 2000 between
EME, Nesbitt Asset Recovery LLC, Series J-1 (f/k/a Joliet Generation I, LLC) and
Nesbit Asset Recovery (f/k/a PSEGR Midwest, LLC); and (d) that certain guaranty
agreement dated as of August 17, 2000 between EME, Joliet Generation II, LLC and
Associates Capital Investment, L.L.C.

141. “PoJo EME Reimbursement Agreement” means, collectively, (a) that certain
reimbursement agreement dated August 17, 2000 between EME and MWG; and (b) that
certain reimbursement agreement dated October 26, 2001 between EME and MWG.

142. “PoJo Equity Investors” means each of the following, in each case in its
capacity as an equity investor under the PoJo Leases and Documents: (a) Nesbitt
Asset Recovery, LLC; and (b) Associates Capital Investments, L.L.C.

143. “PoJo Leases and Documents” means the “Operative Documents,” as defined
under each of: (a) that certain Participation Agreement (T1), dated as of
August 17, 2000, between MWG, Nesbitt Asset Recovery Series P-1 (f/k/a Powerton
Trust I) (as owner lessor), U.S. Bank Trust, National Association (as successor
owner trustee), Nesbitt Asset Recovery, LLC Series P-1 (f/k/a Powerton
Generation I, LLC) (as owner participant), EME, and The Bank of New York Mellon
(as successor pass-through trustee and successor lease indenture trustee);
(b) that certain Participation Agreement (T1), dated as of August 17, 2000,
between MWG, Nesbitt Asset Recovery Series J-1 (f/k/a Joliet Trust I) (as owner
lessor), U.S. Bank Trust, National Association (as owner trustee), Nesbitt Asset
Recovery, LLC Series J-1 (f/k/a Joliet Generation I, LLC) (as owner
participant), EME, and The Bank of New York Mellon (as successor pass-through
trustee and successor lease indenture trustee); (c) that certain Participation
Agreement (T2), dated as of August 17, 2000, between MWG, Powerton Trust II (as
owner lessor), Wilmington Trust Company (as owner trustee), Powerton Generation
II, LLC (as owner participant), EME, and The Bank of New York Mellon (as
successor pass-through trustee and successor lease indenture trustee); and
(d) that certain Participation Agreement (T2), dated as of August 17, 2000,
between MWG, Joliet Trust II (as owner lessor), Wilmington Trust Company (as
owner trustee), Joliet Generation II, LLC (as owner participant), EME, and The
Bank of New York Mellon (as successor pass-through trustee and successor lease
indenture trustee).

144. “PoJo Lease Modifications” means the modifications to the PoJo Leases and
Documents pursuant to which MWG shall assume the PoJo Leases and Documents on
the Effective Date, as further described in Section 9.4(b) of the Purchase
Agreement and acceptable to the PoJo Parties.

145. “PoJo Owner Lessors” means each of the following, in each case in its
capacity as an owner lessor under the PoJo Leases and Documents: (a) Nesbitt
Asset Recovery Series P-1 (f/k/a Powerton Trust I); (b) Nesbitt Asset Recovery
Series J-1 (f/k/a Joliet Trust I); (c) Powerton Trust II; and (d) Joliet Trust
II.

146. “PoJo Owner Participants” means each of the following, in each case in its
capacity as an owner participant under the PoJo Leases and Documents:
(a) Nesbitt Asset Recovery, LLC Series P-1 (f/k/a Powerton Generation I, LLC);
(b) Nesbitt Asset Recovery, LLC Series J-1 (f/k/a Joliet Generation I, LLC);
(c) Powerton Generation II, LLC; and (d) Joliet Generation II, LLC.

147. “PoJo Parties” means each of the following: (a) the PoJo Owner Lessors;
(b) the PoJo Owner Participants; (c) the PoJo Equity Investors; (d) U.S. Bank
Trust, National Association (as successor owner trustee); (e) Wilmington Trust
Company (as owner Trustee); and (f) The Bank of New York Mellon (as successor
pass-through trustee and successor lease indenture trustee).

 

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148. “PoJo Pass Through Certificates” means those certain 8.56% Series B Pass
Through Certificates, issued in the original principal amount of $813,500,000
pursuant to the Pass Through Trust Agreement.

149. “PoJo Pass Through Trust Agreement” means that certain Pass Through Trust
Agreement B, dated as of August 17, 2000, between MWG and The Bank of New York
Mellon (as successor pass-through trustee).

150. “PoJo Restructuring Fees” means, as of the Effective Date, any then unpaid
fees and out-of-pocket expenses of the attorneys and any then unpaid fees,
transaction fees, and reasonable and documented out-of-pocket expenses of the
financial advisors to the PoJo Parties.

151. “PoJo Tax Indemnity Agreements” means (a) that certain Tax Indemnity
Agreement, dated as of August 17, 2000, between Nesbitt Asset Recovery, LLC
Series P-1 (f/k/a Powerton Generation I, LLC) and EME; (b) that certain Tax
Indemnity Agreement, dated as of August 17, 2000, between Nesbitt Asset
Recovery, LLC Series J-1 (f/k/a Joliet Generation I, LLC) and EME; (c) that
certain Tax Indemnity Agreement, dated as of August 17, 2000, between Powerton
Generation II, LLC and EME; and (d) that certain Tax Indemnity Agreement, dated
as of August 17, 2000, between Joliet Generation II, LLC and EME.

152. “Post-Effective-Date Debtor Subsidiaries” means the Debtor Subsidiaries,
each as reorganized pursuant to and under the Plan, each of which is an Acquired
Company, or any successor thereto, by merger, consolidation, or otherwise.

153. “Post-Reorganization EME” means EME as retained by Mission Energy Holding
Company following the Effective Date.

154. “Post-Effective-Date Reorganization Trust Matters” means the process
commencing on the Effective Date to (a) liquidate, settle, compromise, or
resolve all Excluded Assets, each of which shall vest in the Reorganization
Trust on the Effective Date unless otherwise provided by the Plan, the Purchase
Agreement, or the EIX Settlement Agreement; (b) to liquidate, compromise, settle
or resolve Excluded Liabilities of the Debtors or Settlement Retained
Liabilities of the Debtors that are not compromised, settled, resolved,
released, discharged, or enjoined pursuant to the Plan or the EIX Settlement
Agreement; (c) liquidate, settle, compromise, or resolve any Claims against or
assets held by the Homer City Debtors; (d) assume and perform the obligations of
the Debtors and the Non-Debtor Subsidiaries under the Plan or the EIX Settlement
Agreement on and after the Effective Date; (e) conduct the EIX Note Sale as set
forth in the Plan; (f) take any action, as determined by the Reorganization
Trust Oversight Board to be necessary or appropriate, to conduct the EIX Note
Sale and (g) take any other or further action, as determined by the
Reorganization Trust Oversight Board to be necessary or appropriate.

155. “Post-Effective-Date Homer City Debtors” means the Homer City Debtors, each
as reorganized pursuant to and under the Plan, or any successor thereto, by
merger, consolidation, or otherwise.

156. “Priority Tax Claim” means any Claim of a Governmental Unit of the kind
specified in section 507(a)(8) of the Bankruptcy Code other than an Assumed
Liability.

157. “Pro Rata” means the proportion that the amount of an Allowed Claim in a
particular Class bears to the aggregate amount of Allowed Claims in that Class,
or the proportion to the aggregate amount that Allowed Claims in a particular
Class bear to the aggregate amount of Allowed Claims in a particular Class and
other Classes entitled to share in the same recovery as such Allowed Claim under
the Plan.

158. “Professional” means an Entity: (a) retained in the Chapter 11 Cases
pursuant to a Final Order in accordance with sections 327, 363, or 1103 of the
Bankruptcy Code and to be compensated for services rendered pursuant to sections
327, 328, 329, 330, 331, and 363 of the Bankruptcy Code; or (b) awarded
compensation and reimbursement by the Bankruptcy Court pursuant to
section 503(b)(4) of the Bankruptcy Code.

159. “Professional Fee Escrow” means an interest-bearing account, which shall be
funded exclusively from the Sale Proceeds, to hold and maintain an amount of
Cash equal to the Professional Fee Escrow Amount

 

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funded by the Debtors on the Effective Date solely for the purpose of paying all
Allowed and unpaid Accrued Professional Compensation Claims.

160. “Professional Fee Escrow Amount” means the amount of Cash transferred by
the Debtors, with the consent of the Committee and Supporting Noteholders, to
the Professional Fee Escrow to pay Accrued Professional Compensation Claims.

161. “Proof of Claim” means a proof of Claim Filed against any of the Debtors in
the Chapter 11 Cases.

162. “Purchase Agreement” means that certain Asset Purchase Agreement, dated as
of October 18, 2013, between the Purchaser Parties and EME, together with all
exhibits, schedules, and attachments thereto, as the same may be amended,
supplemented, or modified.

163. “Purchaser” means NRG Energy Holdings Inc.

164. “Purchaser Parties” means the Purchaser and the Parent.

165. “Purchaser Retained Causes of Action” means all Causes of Action other than
(a) the EIX Litigation Claims and (b) any Avoidance Actions, which Purchaser
Retained Causes of Action shall vest in Purchaser or the applicable
Post-Effective-Date Debtor Subsidiary, as applicable, and shall be identified in
the Plan Supplement.

166. “R&G Agreement” has the meaning ascribed to it in the Order Authorizing
Debtors to Pay Fees and Expenses of Counsel to the Informal Committee of Edison
Mission Energy Unsecured Noteholders, entered on January 18, 2013 [Docket
No. 317].

167. “Reinstated” means: (a) leaving unaltered the legal, equitable, and
contractual rights to which a Claim or Interest entitles the Holder of such
Claim or Interest so as to leave such Claim or Interest not Impaired or
(b) notwithstanding any contractual provision or applicable law that entitles
the Holder of a Claim or Interest to demand or receive accelerated payment of
such Claim or Interest after the occurrence of a default: (i) curing any such
default that occurred before or after the Petition Date, other than a default of
a kind specified in section 365(b)(2) of the Bankruptcy Code or of a kind that
section 365(b)(2) expressly does not require to be cured; (ii) reinstating the
maturity (to the extent such maturity has not otherwise accrued by the passage
of time) of such Claim or Interest as such maturity existed before such default;
(iii) compensating the Holder of such Claim or Interest for any damages incurred
as a result of any reasonable reliance by such Holder on such contractual
provision or such applicable law; (iv) if such Claim or Interest arises from a
failure to perform a nonmonetary obligation other than a default arising from
failure to operate a nonresidential real property lease subject to section
365(b)(1)(A), compensating the Holder of such Claim or Interest (other than the
Debtor or an insider) for any actual pecuniary loss incurred by such Holder as a
result of such failure; and (v) not otherwise altering the legal, equitable or
contractual rights to which such Claim or Interest entitles the Holder.

168. “Released Party” means, collectively: (a) the Purchaser Parties and the
Acquired Companies; (b) the present and former members of the Noteholder Group,
generally, and the Supporting Noteholders and the Consenting Noteholders, at any
time, in such capacity; (c) the EME Senior Notes Indenture Trustee; (d) the
Committee and the Committee Members; (e) the Reorganization Trust; (f) the PoJo
Parties; (g) the EIX Released Parties; and (h) with respect to the foregoing
entities in clauses (a) through (g), their respective current and former
affiliates, subsidiaries, officers, directors, principals, members, employees,
agents, financial advisors, attorneys, accountants, investment bankers,
consultants, representatives, and other professionals and, solely with respect
to the Purchaser Parties, the Acquired Companies, and the Supporting
Noteholders, their permitted assigns; and (i) the Debtors’ and Non-Debtors
Subsidiaries’ respective current officers, directors, principals, members,
employees, agents, financial advisors, attorneys, accountants, investment
bankers, consultants, representatives, and other professionals of the Debtors
and Non-Debtor Subsidiaries that served in such capacities during the Chapter 11
Cases.

 

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169. “Releasing Parties” means, collectively: (a) the EME Senior Notes Indenture
Trustee; (b) the Supporting Noteholders; (c) the Committee and the Committee
Members; (d) the PoJo Parties; (e) the EIX Releasing Parties; and (f) without
limiting the foregoing clauses (a), (b), (c), (d), and (e), each Holder of a
Claim against or Interest in the Debtors who does not opt out of the Plan’s
release provisions with respect to the Released Parties pursuant to an election
contained on the relevant Ballot.

170. “Reorganization Trust” means the trust or other legal Entity established on
the Effective Date as a successor in interest to EME to, among other things:
(a) directly or indirectly acquire substantially all of the assets of the
Debtors that are not acquired by the Purchaser, retained by the Acquired
Companies in the Sale Transaction, or retained by Post-Reorganization EME as
Settlement Retained Assets; (b) issue the New Interests to be distributed
pursuant to the Plan; (c) make distributions in accordance with the Plan; and
(d) effectuate the Post-Effective-Date Reorganization Trust Matters.

171. “Reorganization Trust Agreement” means the agreement governing, among other
things, the retention and duties of the Plan Administrator, the form of which
shall be acceptable to the Debtors, the Committee, and the Supporting
Noteholders.

172. “Reorganization Trust Oversight Board” means the governing body of the
Reorganization Trust, as initially comprised as set forth in the Plan and as
comprised thereafter in accordance with the terms of the applicable New
Governance Documents. The Reorganization Trust Oversight Board, the members of
which shall be identified in the Plan Supplement, will consist of five
(5) members: three (3) members shall be appointed by the Supporting Noteholders
and the Committee; the other two (2) members shall be EME’s existing independent
directors; provided that, prior to the Effective Date, the Supporting
Noteholders and the Committee may determine to appoint fewer than three (3)
members in consultation with EME, in which case the number of members comprising
the Reorganization Trust Oversight Board shall be reduced accordingly.

173. “Restructuring Transactions” means one or more transactions pursuant to
section 1123(a)(5)(D) of the Bankruptcy Code to occur on or before the Effective
Date or as soon as reasonably practicable thereafter, that may be necessary or
appropriate to effect any transaction described in, approved by, contemplated
by, or necessary to effectuate the Plan, the Purchase Agreement, and the EIX
Settlement Agreement, including (a) the execution and delivery of appropriate
agreements or other documents of merger, sale, consolidation, equity issuance,
certificates of incorporation, operating agreements, bylaws, or other documents
containing terms that are consistent with or reasonably necessary to implement
the terms of the Plan and that satisfy the requirements of applicable law;
(b) the execution and delivery of appropriate instruments of sale, equity
issuance, transfer, assignment, assumption, or delegation of any property,
right, liability, duty, or obligation on terms consistent with the terms of the
Plan; and (c) if implemented pursuant to the Plan, all transactions necessary to
provide for the purchase of substantially all of the assets or Interests of any
of the Debtors, which purchase may be structured as a taxable transaction for
United States federal income tax purposes; and (d) all other actions that the
Debtors determine are necessary or appropriate.

174. “Rule 2004 Order” means the Order Authorizing Debtors and Official
Committee of Unsecured Creditors (A) to Conduct Examination and (B) to Issue
Subpoenas for Attendance for Examination and Production of Documents Pursuant to
Federal Rule of Bankruptcy Procedure 2004, dated as of January 23, 2013 [Docket
No. 339].

175. “Sale Proceeds” means the Cash and stock proceeds of the Sale Transaction
payable to EME by the Purchaser upon the closing under the Purchase Agreement
and Plan.

176. “Sale Transaction” means that certain transaction between EME and the
Purchaser Parties as set forth in the Purchase Agreement.

177. “SCE” means Southern California Edison Company, a California corporation,
and all of its direct and indirect subsidiaries.

178. “Schedule of Assumed Executory Contracts and Unexpired Leases” means the
schedule of certain Executory Contracts and Unexpired Leases to be assumed by
the Debtors pursuant to the Plan, including any Cure

 

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Costs related thereto, in the form filed as part of the Plan Supplement, as the
same may be amended, modified, or supplemented from time to time.

179. “Schedule of Eligible Employees” means the updated schedule of Eligible
Employees (as defined under the Purchase Agreement) to be provided to the
Purchaser, which schedule shall be filed with the Plan Supplement.

180. “Schedule of Rejected Executory Contracts and Unexpired Leases” means the
schedule of certain Executory Contracts and Unexpired Leases to be rejected by
the Debtors pursuant to the Plan in the form filed as part of the Plan
Supplement, as the same may be amended, modified, or supplemented from time to
time.

181. “Schedules” means, collectively, the schedules of assets and liabilities,
schedules of Executory Contracts and Unexpired Leases, and statements of
financial affairs Filed by the Debtors pursuant to section 521 of the Bankruptcy
Code and in substantial accordance with the Official Bankruptcy Forms, as the
same may have been amended, modified, or supplemented from time to time.

182. “Secured” means when referring to a Claim: (a) secured by a Lien on
property in which the applicable Estate has an interest, which Lien is valid,
perfected, and enforceable pursuant to applicable law or by reason of a
Bankruptcy Court order, or that is subject to setoff pursuant to section 553 of
the Bankruptcy Code, to the extent of the value of the creditor’s interest in
such Estate’s interest in such property or to the extent of the amount subject
to setoff, as applicable, as determined pursuant to section 506(a) of the
Bankruptcy Code; or (b) otherwise Allowed pursuant to the Plan as a Secured
Claim.

183. “Securities Act” means the Securities Act of 1933, 15 U.S.C. §§ 77a–77aa,
as amended, or any similar federal, state, or local law.

184. “Settlement Assumed Liabilities” means the liability of any of the Debtors
or the Non-Debtor Subsidiaries assumed by EIX pursuant to the EIX Settlement
Agreement and defined as “Assumed Liabilities” in the EIX Settlement Agreement,
including any liability on account of any United States federal or California
state income taxes of the affiliated group of which EIX is the common parent.

185. “Settlement Retained Liabilities” means the liability of any of the Debtors
or the Non-Debtor Subsidiaries that is not assumed by EIX pursuant to the EIX
Settlement Agreement and defined as a “Retained Liability” in the EIX Settlement
Agreement.

186. “Settlement Retained Assets” means the assets retained by
Post-Reorganization EME in accordance with the EIX Settlement Agreement.

187. “Shared Services Extension Order” means the Order Authorizing Extension of
Intercompany and Shared Services Arrangements and Other Benefit Plans [Docket
No. 1563], entered by the Bankruptcy Court on November 7, 2013, authorizing the
Debtors to, among other things, implement the EME Severance Plan and continue
performing obligations related to certain shared services provided by EIX.

188. “Sierra Club Lawsuit” means that certain lawsuit entitled Sierra Club v.
Midwest Generation, LLC, pending in the Illinois Pollution Control Board [IPCB
Case No. 2013-027].

189. “Subordinated Claim” means any Claim that is subject to contractual, legal,
and/or equitable subordination, whether arising under general principles of
equitable subordination, section 510(b) of the Bankruptcy Code, or otherwise.

190. “Supporting Noteholders” means the Holders of EME Senior Notes Claims that
have signed the Plan Sponsor Agreement or otherwise agreed to be bound by its
terms by the Voting Record Date.

191. “Supporting Noteholder Fees” means, as of the Effective Date, (a) all
accrued and unpaid reasonable, actual, and documented fees and expenses of
Ropes & Gray LLP and Schiff Hardin LLP payable

 

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pursuant to the R&G Agreement; (b) all accrued and unpaid fees and expenses of
Houlihan Lokey Capital, Inc., including, without limitation, any applicable
transaction or completion fees due Houlihan Lokey Capital, Inc. pursuant to the
terms of that certain letter agreement, dated as of May 7, 2012, between EME,
Houlihan Lokey Capital, Inc., and Ropes & Gray LLP; and (c) all accrued and
unpaid fees and expenses under the Bluescape Engagement Letter.

192. “Tax Sharing Agreements” means that certain Mission Energy Holding Company
Amended and Restated Tax Allocation Agreement, dated as of February 13, 2012,
among Mission Energy Holding Company, EME, and Capistrano Wind Holdings, Inc.
and that certain Administrative Agreement Re Tax Allocation Payments, dated
July 2, 2001, by and among EIX, SCE, EMG, Edison Capital, Mission Energy Holding
Company, EME, Edison O&M Services, Edison Enterprises, and Mission Land Company.

193. “Taxing Authority” means any governmental authority exercising any
authority to impose, regulate, levy, asses, or administer the imposition of any
tax.

194. “Transaction Support Agreement” means that certain Transaction Support
Agreement, dated as of December 16, 2012, by and among EME, EIX, and certain
Noteholders.

195. “Unexpired Lease” means an unexpired lease to which one or more of the
Debtors is a party that is subject to assumption or rejection under sections 365
or 1123 of the Bankruptcy Code.

196. “Unimpaired” means, with respect to a Class of Claims or Interests, a Claim
or an Interest that is unimpaired within the meaning of section 1124 of the
Bankruptcy Code.

197. “U.S. Trustee” means the United States Trustee for the Northern District of
Illinois.

198. “U.S. Trustee Fees” means fees arising under section 1930(a)(6) of the
Judicial Code and, to the extent applicable, accrued interest thereon arising
under 31 U.S.C. § 3717.

199. “Wind Down Budget” means the budget, which shall be satisfactory in form
and substance to the Debtors, the Committee, and the Supporting Noteholders, to
fund the Post-Effective-Date Reorganization Trust Matters. The Wind Down Budget
shall be subject to appropriate confidentiality protections.

200. “Viento II Pledge Agreement” means EME’s pledge of equity interests in
Non-Debtor Subsidiary Viento Funding II, Inc. to support certain borrowings of
Non-Debtor Subsidiary Viento II Funding, Inc.

201. “Voting Deadline” means 5:00 p.m., prevailing Central Time, on January 29,
2014.

202. “Voting Record Date” means 10:00 a.m., prevailing Central Time, on
December 16, 2013.

203. “Voting Report” means the [—], filed by the Notice, Claims, and
Solicitation Agent on [—], 2014 [Docket No. —].

B. Rules of Interpretation

For purposes herein: (a) in the appropriate context, each term, whether stated
in the singular or the plural, shall include both the singular and the plural,
and pronouns stated in the masculine, feminine, or neuter gender shall include
the masculine, feminine, and the neuter gender; (b) except as otherwise
provided, any reference herein to a contract, lease, instrument, release,
indenture, or other agreement or document being in a particular form or on
particular terms and conditions means that the referenced document shall be
substantially in that form or substantially on those terms and conditions;
(c) except as otherwise provided, any reference herein to an existing document
or exhibit having been Filed or to be Filed shall mean that document or exhibit,
as it may thereafter be amended, restated, supplemented, or otherwise modified
in accordance with the terms of the Plan; (d) unless otherwise specified, all
references herein to “Articles” are references to Articles of the Plan or
hereto; (e) unless otherwise stated, the words “herein,” “hereof,” and
‘‘hereto’’ refer to the Plan in its entirety rather than to a

 

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particular portion of the Plan; (f) captions and headings to Articles are
inserted for convenience of reference only and are not intended to be a part of
or to affect the interpretation hereof; (g) the words “include” and “including,”
and variations thereof, shall not be deemed to be terms of limitation, and shall
be deemed to be followed by the words “without limitation;” (h) the rules

of construction set forth in section 102 of the Bankruptcy Code shall apply;
(i) any term used in capitalized form herein that is not otherwise defined but
that is used in the Bankruptcy Code or the Bankruptcy Rules shall have the
meaning assigned to that term in the Bankruptcy Code or the Bankruptcy Rules, as
the case may be; (j) any docket number references in the Plan shall refer to the
docket number of any document Filed with the Bankruptcy Court in the Chapter 11
Cases; (k) any effectuating provisions may be interpreted by the Plan
Administrator in such a manner that is consistent with the overall purpose and
intent of the Plan all without further notice to or action, order, or approval
of the Bankruptcy Court or any other Entity, and such interpretation shall
control; and (l) except as otherwise provided, any references to the Effective
Date shall mean the Effective Date or as soon as reasonably practicable
thereafter.

C. Computation of Time

The provisions of Bankruptcy Rule 9006(a) shall apply in computing any period of
time prescribed or allowed herein.

D. Governing Law

Unless a rule of law or procedure is supplied by federal law (including the
Bankruptcy Code and Bankruptcy Rules) or unless otherwise specifically stated
herein, the laws of the State of New York, without giving effect to the
principles of conflict of laws, shall govern the rights, obligations,
construction, and implementation of the Plan and any agreements, documents,
instruments, or contracts executed or entered into in connection with the Plan
(except as otherwise set forth in those agreements, in which case the governing
law of such agreement shall control); provided that corporate or limited
liability company governance matters shall be governed by the laws of the state
of incorporation or formation, of the applicable Entity. To the extent a rule of
law or procedure is supplied by federal bankruptcy law, the Bankruptcy Code, the
Bankruptcy Rules, and the decisions and standards of the United States Supreme
Court, the United States Court of Appeals for the Seventh Circuit, the United
States District Court for the Northern District of Illinois, and the Bankruptcy
Court, as applicable, shall govern and control.

E. Reference to Monetary Figures

All references in the Plan to monetary figures shall refer to currency of the
United States of America, unless otherwise expressly provided herein.

ARTICLE II.

ADMINISTRATIVE CLAIMS AND PRIORITY TAX CLAIMS

A. Administrative Claims

Unless otherwise agreed to by the Holder of an Allowed Administrative Claim,
each Holder of an Allowed Administrative Claim will receive in exchange for full
and final satisfaction, compromise, settlement, release, and discharge of its
Administrative Claim, the following applicable treatment:

 

  1. for Administrative Claims that are Assumed Liabilities, payment from the
Purchaser pursuant to the terms of the Purchase Agreement of an amount of Cash
equal to the amount of such Allowed Administrative Claim (a) on the Effective
Date, (b) if the Administrative Claim is not Allowed as of the Effective Date,
no later than 30 days after the date on which an order Allowing such
Administrative Claim becomes a Final Order, or as soon as reasonably practicable
thereafter, or (c) if the Allowed Administrative Claim is based on liabilities
incurred by the Debtors in the ordinary course of their business after the
Petition Date, pursuant to the terms and conditions of the particular
transaction giving rise to such Allowed Administrative Claims, without any
further action by the Holders of such Allowed Administrative Claims and without
any further notice to or action, order, or approval of the Bankruptcy Court; or

 

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  2. for Administrative Claims that are not Assumed Liabilities, payment of an
amount of Cash equal to the amount of such Allowed Administrative Claim (a) on
the Effective Date, (b) if the Administrative Claim is not Allowed as of the
Effective Date, no later than 30 days after the date on

which an order Allowing such Administrative Claim becomes a Final Order, or as
soon as reasonably practicable thereafter, or (c) if the Allowed Administrative
Claim is based on liabilities incurred by the Debtors in the ordinary course of
their business after the Petition Date, pursuant to the terms and conditions of
the particular transaction giving rise to such Allowed Administrative Claims,
without any further action by the Holders of such Allowed Administrative Claims
and without any further notice to or action, order, or approval of the
Bankruptcy Court.

Unless previously Filed, requests for payment of Administrative Claims
(including Accrued Professional Compensation Claims) must be Filed and served on
the Debtors no later than the Administrative Claims Bar Date. Holders of
Administrative Claims that are required to File and serve a request for payment
of such Administrative Claims by the Administrative Bar Date that do not File
and serve such a request by the Administrative Claims Bar Date shall be forever
barred, estopped, and enjoined from asserting such Administrative Claims against
the Reorganization Trust, the Post-Effective-Date Debtor Subsidiaries, the
Post-Effective-Date Homer City Debtors, or their respective property and such
Administrative Claims shall be deemed discharged as of the Effective Date.

B. Priority Tax Claims

Except to the extent that a Holder of an Allowed Priority Tax Claim agrees to a
less favorable treatment, in full and final satisfaction, compromise,
settlement, release, and discharge of and in exchange for each Allowed Priority
Tax Claim, each Holder of such Allowed Priority Tax Claim shall be treated in
accordance with the terms set forth in section 1129(a)(9)(C) of the Bankruptcy
Code. Any Claims on account of any liability for United States federal or state
income taxes (including, without limitation, any Claims asserted by the IRS or
any other applicable Taxing Authority) shall be paid in full by EIX when due and
payable under applicable law and subject to all rights and defenses under
applicable law. Nothing in the Plan shall compromise, reduce, or otherwise
affect EIX’s liability with respect to any such Claims.

C. Accrued Professional Compensation Claims

 

  1. Professional Fee Escrow

As soon as reasonably practicable after the Confirmation Date and no later than
the Effective Date, the Debtors shall establish the Professional Fee Escrow. The
Debtors shall fund the Professional Fee Escrow, exclusively from the Sale
Proceeds, with Cash equal to the Professional Fee Escrow Amount. The
Professional Fee Escrow shall be funded no later than the Effective Date and
maintained in trust for the Professionals and shall not be considered property
of the Debtors’ Estates; provided, however, that the Reorganization Trust shall
have a reversionary interest in the excess, if any, of the amount of the
Professional Fee Escrow over the aggregate Allowed Accrued Professional
Compensation Claims to be paid from the Professional Fee Escrow.

 

  2. Final Fee Applications and Payment of Accrued Professional Compensation
Claims

All final requests for payment of Accrued Professional Compensation Claims
incurred during the period from the Petition Date through the Confirmation Date,
shall be Filed no later than 30 days after the Effective Date. After notice and
a hearing in accordance with the procedures established by the Bankruptcy Code,
Bankruptcy Rules and prior Bankruptcy Court orders, the Allowed amounts of such
Accrued Professional Compensation Claims shall be determined by the Bankruptcy
Court. The amount of Accrued Professional Compensation Claims owing to the
Professionals shall be paid in Cash to such Professionals from funds held in the
Professional Fee Escrow when such Claims are Allowed by a Final Order. To the
extent that funds held in the Professional Fee Escrow are unable to satisfy the
amount of Accrued Professional Compensation Claims owing to the Professionals,
such Professionals shall have an Allowed Administrative Claim for any such
deficiency, which shall be satisfied in accordance with Article II.A of the
Plan. After all Accrued Professional Compensation Claims have been paid in full,
the Final Order allowing such Accrued Professional Compensation Claims shall
direct the escrow agent to return any excess amounts to the Reorganization
Trust.

 

20

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  3. Estimation of Fees and Expenses

To receive payment for unbilled fees and expenses incurred through the
Confirmation Date, the Professionals shall estimate their Accrued Professional
Compensation Claims before and as of the Confirmation Date and shall deliver
such estimate to the Debtors, the Committee, and the Supporting Noteholders no
later than ten days prior to the Effective Date; provided, however, that such
estimate shall not be considered an admission with respect to the fees and
expenses of such Professional and such Professionals are not bound to any extent
by the estimates. If a Professional does not provide an estimate, the Debtors
may estimate the unbilled fees and expenses of such Professional. The total
amount so estimated shall be utilized by the Debtors, the Committee, and the
Supporting Noteholders to determine the Professional Fee Escrow Amount.

 

  4. Post-Confirmation Fees and Expenses

Except as otherwise specifically provided in the Plan, from and after the
Confirmation Date, the Debtors shall, in the ordinary course of business and
without any further notice to or action, order, or approval of the Bankruptcy
Court, pay in Cash the reasonable legal, professional, or other fees and
expenses incurred by the Debtors or the Committee. Upon the Confirmation Date,
any requirement that Professionals comply with sections 327 through 331 and 1103
of the Bankruptcy Code or the Interim Compensation Order in seeking retention or
compensation for services rendered after such date shall terminate, and the
Debtors, in consultation with the Committee and Supporting Noteholders, may
employ and pay any Professional or Ordinary Course Professional in the ordinary
course of business without any further notice to or action, order, or approval
of the Bankruptcy Court.

D. U.S. Trustee Statutory Fees

Each Debtor shall pay all of its respective U.S. Trustee Fees for each quarter
(including any fraction thereof) until such Debtor’s Chapter 11 Cases are
converted, dismissed, or closed, whichever occurs first.

E. Treatment of Certain Claims

Notwithstanding anything to the contrary herein, the failure to object to
Confirmation of this Plan by a Holder of an Allowed Administrative Expense Claim
(other than the Holder of an Allowed Accrued Professional Compensation Claim),
Allowed Priority Tax Claim, or Allowed Other Priority Claim against any Homer
City Debtor shall be deemed to be such Holder’s agreement to receive treatment
for such Claim that is different from that set forth in section 1129(a)(9) of
the Bankruptcy Code.

ARTICLE III.

CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS

In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative
Claims and Priority Tax Claims have not been classified and, thus, are excluded
from the Classes of Claims and Interests set forth in this Article III of the
Plan.

A. Summary of Classification

A Claim or Interest is classified in a particular Class pursuant to sections
1122 and 1123(a)(1) of the Bankruptcy Code only to the extent that the Claim or
Interest qualifies within the description of that Class and is classified in
other Classes to the extent that any portion of the Claim or Interest qualifies
within the description of such other Classes. Except as provided below, the Plan
shall apply as a separate Plan for each of the Debtors. A Claim or Interest is
also classified in a particular Class for the purpose of receiving distributions
pursuant to the Plan only to the extent that such Claim or Interest is an
Allowed Claim or Allowed Interest in that Class and has not been paid, released,
or otherwise satisfied before the Effective Date. If substantive consolidation
is ordered pursuant to Article IV.S of the Plan, each Class with respect to the
Debtor Subsidiaries and Homer City Debtors shall vote as set forth in Article
III of the Plan. If substantive consolidation is not ordered, each Class of
Claims against or Interests in the Debtor Subsidiaries or the Homer City Debtors
shall be deemed to constitute separate sub-Classes of Claims against and
Interests in each of the Debtor Subsidiaries or the Homer City Debtors, as
applicable, and each such sub-

 

21

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Class shall vote as a single separate Class for each of the Debtor Subsidiaries
or the Homer City Debtors, as applicable, and the confirmation requirements of
section 1129 of the Bankruptcy Code must be satisfied separately with respect to
each of the Debtor Subsidiaries or the Homer City Debtors. The Debtors reserve
the right to withdraw the Plan, after consultation with the Committee, the
Supporting Noteholders, the Purchaser, and the PoJo Parties, with respect to one
or more Debtors while seeking Confirmation or approval of the Plan with respect
to all other Debtors; provided that the Debtors may not withdraw the Plan with
respect to MWG while seeking Confirmation or approval of the Plan with respect
to EME.

 

  1. Summary of Classification for EME

The classification of Claims against and Interests in EME pursuant to the Plan
is set forth below. The classification of Claims and Interests set forth herein
shall apply only to Claims against and Interests in EME.

 

Class

  

Claims and Interests

  

Status

  

Voting Rights

A1   

Other Priority

Claims against EME

   Unimpaired   

Not Entitled to Vote

(Presumed to Accept)

A2   

Secured Claims

against EME

   Unimpaired   

Not Entitled to Vote

(Presumed to Accept)

A3   

General Unsecured Claims

against EME (Assumed Liabilities)

   Impaired    Entitled to Vote A4   

General Unsecured Claims

against EME (Not Assumed Liabilities)

   Impaired    Entitled to Vote A5   

Joint-Liability General Unsecured

Claims against EME

   Impaired    Entitled to Vote A6   

Intercompany Claims

against EME

   Impaired   

Not Entitled to Vote

(Deemed to Reject)

A7   

Subordinated Claims

against EME

   Impaired   

Not Entitled to Vote

(Deemed to Reject)

A8    EME Interests    Unimpaired   

Not Entitled to Vote

(Presumed to Accept)

 

  2. Summary of Classification for Debtor Subsidiaries

The classification of Claims against and Interests in the Debtor Subsidiaries
pursuant to the Plan is set forth below. The classification of Claims and
Interests set forth herein shall apply only to Claims against and Interests in
the Debtor Subsidiaries.

 

Class

  

Claims and Interests

  

Status

  

Voting Rights

B1   

Other Priority Claims

against Debtor Subsidiaries

   Unimpaired   

Not Entitled to Vote

(Presumed to Accept)

B2   

Secured Claims

against Debtor Subsidiaries

   Unimpaired   

Not Entitled to Vote

(Presumed to Accept)

 

22

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Class

  

Claims and Interests

  

Status

  

Voting Rights

B3   

General Unsecured Claims

against Debtor Subsidiaries

   Impaired    Entitled to Vote B4   

Intercompany Claims

against Debtor Subsidiaries

   Impaired   

Not Entitled to Vote

(Deemed to Reject)

B5   

Subordinated Claims

against Debtor Subsidiaries

   Impaired   

Not Entitled to Vote

(Deemed to Reject)

B6   

Intercompany Interests

in Debtor Subsidiaries

   Unimpaired   

Not Entitled to Vote

(Presumed to Accept)

 

  3. Summary of Classification for Homer City Debtors

The classification of Claims against and Interests in the Homer City Debtors
pursuant to the Plan is set forth below. The classification of Claims and
Interests set forth herein shall apply only to Claims against and Interests in
the Homer City Debtors.

 

Class

  

Claims and Interests

  

Status

  

Voting Rights

C1   

Other Priority Claims

against Homer City Debtors

   Unimpaired   

Not Entitled to Vote

(Presumed to Accept)

C2   

Secured Claims

against Homer City Debtors

   Unimpaired   

Not Entitled to Vote

(Presumed to Accept)

C3   

General Unsecured Claims

against Homer City Debtors

   Impaired    Entitled to Vote C4   

Intercompany Claims

against Homer City Debtors

   Impaired    Entitled to Vote C5   

Subordinated Claims

against Homer City Debtors

   Impaired   

Not Entitled to Vote

(Deemed to Reject)

C6   

Intercompany Interests

in Homer City Debtors

   Impaired    Entitled to Vote

 

B. Treatment of Claims Against and Interests in EME

 

  1. Class A1—Other Priority Claims against EME

 

  (a) Classification: Class A1 consists of all Other Priority Claims against
EME.

 

  (b) Treatment: Except to the extent that a Holder of an Allowed Class A1 Claim
agrees to a less favorable treatment, in full and final satisfaction,
compromise, settlement, release, and discharge of and in exchange for each Class
A1 Claim, each such Holder shall receive payment in full in Cash on the later of
the Effective Date and the date such Class A1 Claim becomes an Allowed Class A1
Claim or as soon as reasonably practicable thereafter.

 

23

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  (c) Voting: Class A1 is Unimpaired. Holders of Claims in Class A1 are deemed
to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code
and, therefore, are not entitled to vote to accept or reject the Plan.

 

  2. Class A2—Secured Claims against EME

 

  (a) Classification: Class A2 consists of all Secured Claims against EME.

 

  (b) Treatment: Except to the extent that a Holder of an Allowed Class A2 Claim
agrees to a less favorable treatment, in full and final satisfaction,
compromise, settlement, release, and discharge of and in exchange for each Class
A2 Claim, each such Holder shall receive on the latest of the Effective Date,
the date such Class A2 Claim becomes an Allowed Class A2 Claim, and the date or
dates on which such Allowed Class A2 Claim becomes due and payable in the
ordinary course in accordance with contractual terms without regard to
acceleration, or as soon as reasonably practicable thereafter:

 

  (i) for Class A2 Claims that are Assumed Liabilities, payment in full in Cash
from the Purchaser pursuant to the terms of the Purchase Agreement; or

 

  (ii) for Class A2 Claims that are not Assumed Liabilities, (A) payment in full
in Cash, including the payment of any interest required to be paid under section
506(b) of the Bankruptcy Code or, if payment is not then due on the Effective
Date, in accordance with the payment terms of any applicable agreement, or
(B) other treatment that is not inconsistent with the Purchase Agreement.

 

  (c) Voting: Class A2 is Unimpaired. Holders of Claims in Class A2 are deemed
to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code
and, therefore, are not entitled to vote to accept or reject the Plan.

 

  3. Class A3—General Unsecured Claims against EME (Assumed Liabilities)

 

  (a) Classification: Class A3 consists of all General Unsecured Claims against
EME that are Assumed Liabilities.

 

  (b) Treatment: Except to the extent that a Holder of an Allowed Class A3 Claim
agrees to a less favorable treatment, in full and final satisfaction,
compromise, settlement, release, and discharge of and in exchange for each Class
A3 Claim, each such Holder shall receive on the latest of the Effective Date,
the date such Class A3 Claim becomes an Allowed Class A3 Claim, and the date or
dates on which such Allowed Class A3 Claim becomes due and payable in the
ordinary course in accordance with contractual terms without regard to
acceleration, or as soon as reasonably practicable thereafter, payment in full
in Cash from the Purchaser pursuant to the terms of the Purchase Agreement.

 

  (c) Voting: Class A3 is Impaired. Holders of Claims in Class A3 as of the
Voting Record Date are entitled to vote to accept or reject the Plan.

 

  4. Class A4—General Unsecured Claims against EME (Not Assumed Liabilities)

 

  (a) Classification: Class A4 consists of all General Unsecured Claims against
EME that are not Assumed Liabilities.

 

  (b)

Treatment: Except to the extent that a Holder of an Allowed Class A4 Claim
agrees to a less favorable treatment, in full and final satisfaction,
compromise, settlement, release, and discharge of and in exchange for each Class
A4 Claim, each such Holder shall receive on the latest of the Effective Date,
the date such Class A4 Claim becomes an

 

24

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  Allowed Class A4 Claim, and the date or dates on which such Allowed Class A4
Claim becomes due and payable in the ordinary course in accordance with
contractual terms without regard to acceleration, or as soon as reasonably
practicable thereafter:

 

  (i) a Pro Rata distribution of the Net Sale Proceeds;

 

  (ii) a Pro Rata distribution of the Net Settlement Proceeds; and

 

  (iii) a Pro Rata distribution of the New Interests.

 

  (c) Voting: Class A4 is Impaired. Holders of Claims in Class A4 as of the
Voting Record Date are entitled to vote to accept or reject the Plan.

 

  5. Class A5—Joint-Liability General Unsecured Claims against EME

 

  (a) Classification: Class A5 consists of all General Unsecured Claims against
a Debtor Subsidiary that is an Excluded Liability for which EME is also liable
under any theory (including, without limitation, joint and several liability,
joint liability, agency, control liability, and other similar theories).

 

  (b) Allowance: Class A5 Claims shall not be Allowed against, or receive any
distribution on account of such Class A5 Claim from, any applicable Debtor
Subsidiary, but instead shall only receive a distribution on account of such
Class A5 Claim against EME, if and only to the extent such Class A5 Claim has
been Allowed against EME.

 

  (c) Treatment: Except to the extent that a Holder of an Allowed Class A5 Claim
agrees to a less favorable treatment, in full and final satisfaction,
compromise, settlement, release, and discharge of and in exchange for each Class
A5 Claim, each such Holder shall receive the following treatment on the later of
the Effective Date and the date such Class A5 Claim becomes an Allowed Class A5
Claim or as soon as reasonably practicable thereafter:

 

  (i) a Pro Rata distribution of the Net Sale Proceeds;

 

  (ii) a Pro Rata distribution of the Net Settlement Proceeds; and

 

  (iii) a Pro Rata distribution of the New Interests;

 

  (d) Voting: Class A5 is Impaired. Holders of Claims in Class A5 as of the
Voting Record Date are entitled to vote to accept or reject the Plan.

 

  6. Class A6—Intercompany Claims against EME

 

  (a) Classification: Class A6 consists of all Intercompany Claims against EME.

 

  (b) Treatment: Allowed Class A6 Claims will be discharged, canceled, released,
and extinguished as of the Effective Date, and will be of no further force or
effect, and Holders of Allowed Class A6 Claims will not receive any distribution
on account of such Allowed Class A6 Claims.

 

  (c) Voting: Class A6 is Impaired. Holders of Claims in Class A6 are deemed to
have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and,
therefore, are not entitled to vote to accept or reject the Plan.

 

25

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  7. Class A7—Subordinated Claims against EME

 

  (a) Classification: Class A7 consists of all Subordinated Claims against EME.

 

  (b) Treatment: Class A7 Claims will be discharged, canceled, released, and
extinguished as of the Effective Date, and will be of no further force or
effect, and Holders of Class A7 Claims will not receive any distribution on
account of such Claims.

 

  (c) Voting: Class A7 is Impaired. Holders of Claims in Class A7 are deemed to
have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and,
therefore, are not entitled to vote to accept or reject the Plan.

 

  8. Class A8—EME Interests

 

  (a) Classification: Class A8 consists of all EME Interests.

 

  (b) Treatment: EME Interests will be Reinstated on the Effective Date.

 

  (c) Voting: Class A8 is Unimpaired. Pursuant to the EIX Settlement Agreement,
Holders of Interests in Class A8 are deemed to have accepted the Plan pursuant
to section 1126(f) of the Bankruptcy Code and, therefore, are not entitled to
vote to accept or reject the Plan.

C. Treatment of Claims against and Interests in Debtor Subsidiaries

 

  1. Class B1—Other Priority Claims against Debtor Subsidiaries

 

  (a) Classification: Class B1 consists of all Other Priority Claims against
Debtor Subsidiaries.

 

  (b) Treatment: Except to the extent that a Holder of an Allowed Class B1 Claim
agrees to a less favorable treatment, in full and final satisfaction,
compromise, settlement, release, and discharge of and in exchange for each Class
B1 Claim, each such Holder shall receive payment in full in Cash on the later of
the Effective Date and the date such Class B1 Claim becomes an Allowed Class B1
Claim or as soon as reasonably practicable thereafter.

 

  (c) Voting: Class B1 is Unimpaired. Holders of Claims in Class B1 are deemed
to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code
and, therefore, are not entitled to vote to accept or reject the Plan.

 

  2. Class B2—Secured Claims against Debtor Subsidiaries

 

  (a) Classification: Class B2 consists of all Secured Claims against Debtor
Subsidiaries.

 

  (b) Treatment: Except to the extent that a Holder of an Allowed Class B2 Claim
agrees to a less favorable treatment, in full and final satisfaction,
compromise, settlement, release, and discharge of and in exchange for each Class
B2 Claim, each such Holder shall receive on the latest of the Effective Date,
the date such Class B2 Claim becomes an Allowed Class B2 Claim, and the date or
dates on which such Allowed Class B2 Claim becomes due and payable in the
ordinary course in accordance with contractual terms without regard to
acceleration, or as soon as practicable thereafter:

 

  (i) for Class B2 Claims that are Assumed Liabilities, payment in full in Cash
from the Purchaser pursuant to the terms of the Purchase Agreement; or

 

26

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  (ii) for Class B2 Claims that are not Assumed Liabilities, (A) payment in full
in Cash, including the payment of any interest required to be paid under section
506(b) of the Bankruptcy Code or, if payment is not then due on the Effective
Date, in accordance with the payment terms of any applicable agreement; or
(B) other treatment such that the Allowed Class B2 Claim shall be rendered
Unimpaired; provided that such treatment is not inconsistent with the Purchase
Agreement.

 

  (c) Voting: Class B2 is Unimpaired. Holders of Claims in Class B2 are deemed
to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code
and, therefore, are not entitled to vote to accept or reject the Plan.

 

  3. Class B3—General Unsecured Claims against Debtor Subsidiaries

 

  (a) Classification: Class B3 consists of all General Unsecured Claims against
Debtor Subsidiaries.

 

  (b) Treatment: Except to the extent that a Holder of an Allowed Class B3 Claim
agrees to a less favorable treatment, in full and final satisfaction,
compromise, settlement, release, and discharge of and in exchange for each Class
B3 Claim, each such Holder shall receive on the latest of the Effective Date,
the date such Class B3 Claim becomes an Allowed Class B3 Claim, and the date or
dates on which such Allowed Class B3 Claim becomes due and payable in the
ordinary course in accordance with contractual terms without regard to
acceleration, or as soon as reasonably practicable thereafter:

 

  (i) for Class B3 Claims that are Assumed Liabilities, payment in full in Cash
from the Purchaser pursuant to the terms of the Purchase Agreement; or

 

  (ii) for Class B3 Claims that are not Assumed Liabilities, payment of
principal in full in Cash.

 

  (c) Voting: Class B3 is Impaired. Holders of Claims in Class B3 as of the
Voting Record Date are entitled to vote to accept or reject the Plan.

 

  4. Class B4—Intercompany Claims against Debtor Subsidiaries

 

  (a) Classification: Class B4 consists of all Intercompany Claims against
Debtor Subsidiaries.

 

  (b) Treatment: Except as otherwise agreed by the applicable Debtor Subsidiary
and the Purchaser, Allowed Class B4 Claims will be discharged, canceled,
released, and extinguished as of the Effective Date, and will be of no further
force or effect, and Holders of Allowed Class B4 Claims will not receive any
distribution on account of such Allowed Class B4 Claims.

 

  (c) Voting: Class B4 is Impaired. Holders of Claims in Class B4 are deemed to
have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and,
therefore, are not entitled to vote to accept or reject the Plan.

 

  5. Class B5—Subordinated Claims against Debtor Subsidiaries

 

  (a) Classification: Class B5 consists of all Subordinated Claims against
Debtor Subsidiaries.

 

27

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  (b) Treatment: Class B5 Claims will be discharged, canceled, released, and
extinguished as of the Effective Date, and will be of no further force or
effect, and Holders of Class B5 Claims will not receive any distribution on
account of such Claims.

 

  (c) Voting: Class B5 is Impaired. Holders of Claims in Class B5 are deemed to
have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and,
therefore, are not entitled to vote to accept or reject the Plan.

 

  6. Class B6—Intercompany Interests in Debtor Subsidiaries

 

  (a) Classification: Class B6 consists of all Intercompany Interests in Debtor
Subsidiaries.

 

  (b) Treatment: Intercompany Interests in Debtor Subsidiaries will be
Reinstated as of the Effective Date.

 

  (c) Voting: Class B6 is Unimpaired. Holders of Interests in Class B6 are
presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy
Code and, therefore, are not entitled to vote to accept or reject the Plan.

D. Treatment of Claims against and Interests in Homer City Debtors

 

  1. Class C1—Other Priority Claims against Homer City Debtors

 

  (a) Classification: Class C1 consists of all Other Priority Claims against
Homer City Debtors.

 

  (b) Treatment: Except to the extent that a Holder of an Allowed Class C1 Claim
agrees to a less favorable treatment, in full and final satisfaction,
compromise, settlement, release, and discharge of and in exchange for each Class
C1 Claim, each such Holder shall receive payment in full in Cash on the later of
the Effective Date and the date such Class C3 Claim becomes an Allowed Class C1
Claim or as soon as reasonably practicable thereafter.

 

  (c) Voting: Class C1 is Unimpaired. Holders of Claims in Class C1 are presumed
to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code
and, therefore, are not entitled to vote to accept or reject the Plan.

 

  2. Class C2—Secured Claims against Homer City Debtors

 

  (a) Classification: Class C2 consists of all Secured Claims against Homer City
Debtors.

 

  (b) Treatment: Except to the extent that a Holder of an Allowed Class C2 Claim
agrees to a less favorable treatment, in full and final satisfaction,
compromise, settlement, release, and discharge of and in exchange for each Class
C2 Claim, each such Holder shall receive the following treatment on the later of
the Effective Date and the date such Class C2 Claim becomes an Allowed Class C2
Claim or as soon as reasonably practicable thereafter:

 

  (i) payment in full in Cash, including the payment of any interest required to
be paid under section 506(b) of the Bankruptcy Code or, if payment is not then
due on the Effective Date, in accordance with the payment terms of any
applicable agreement; or

 

  (ii) other treatment such that the Allowed Class C2 Claim shall be rendered
Unimpaired.

 

28

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  (c) Voting: Class C2 is Unimpaired. Holders of Claims in Class C2 are presumed
to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code
and, therefore, are not entitled to vote to accept or reject the Plan.

 

  3. Class C3—General Unsecured Claims against Homer City Debtors

 

  (a) Classification: Class C3 consists of all General Unsecured Claims against
Homer City Debtors.

 

  (b) Treatment: Except to the extent that a Holder of an Allowed Class C3 Claim
agrees to a less favorable treatment, in full and final satisfaction,
compromise, settlement, release, and discharge of and in exchange for each Class
C3 Claim, each such Holder shall receive a Pro Rata distribution of the Homer
City Wind Down Proceeds for the applicable Homer City Debtor, subject to the
Homer City Waterfall, on the later of the Effective Date and the date such Class
C3 Claim becomes an Allowed Class C3 Claim.

 

  (c) Voting: Class C3 is Impaired. Holders of Claims in Class C3 as of the
Voting Record Date are entitled to vote to accept or reject the Plan.

 

  4. Class C4—Intercompany Claims against Homer City Debtors

 

  (a) Classification: Class C4 consists of all Intercompany Claims of EME or any
of the Homer City Debtors against any of the Homer City Debtors.

 

  (b) Treatment: Except to the extent that a Holder of an Allowed Class C4 Claim
agrees to a less favorable treatment, in full and final satisfaction,
compromise, settlement, release, and discharge of and in exchange for each Class
C4 Claim, each such Holder shall receive a Pro Rata distribution of the Homer
City Wind Down Proceeds for the applicable Homer City Debtor, subject to the
Homer City Waterfall, on the later of the Effective Date and the date such Class
C4 Claim becomes an Allowed Class C4 Claim.

 

  (c) Voting: Class C4 is Impaired. Holders of Claims in Class C4 as of the
Voting Record Date are entitled to vote to accept or reject the Plan.

 

  5. Class C5—Subordinated Claims against Homer City Debtors

 

  (a) Classification: Class C5 consists of all Subordinated Claims against Homer
City Debtors.

 

  (b) Treatment: Class C5 Claims will be discharged, canceled, released, and
extinguished as of the Effective Date, and will be of no further force or
effect, and Holders of Class C5 Claims will not receive any distribution on
account of such Claims.

 

  (c) Voting: Class C5 is Impaired. Holders of Claims in Class C5 are deemed to
have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and,
therefore, are not entitled to vote to accept or reject the Plan.

 

  6. Class C6—Intercompany Interests in the Homer City Debtors

 

  (a) Classification: Class C6 consists of all Intercompany Interests in the
Homer City Debtors.

 

  (b) Treatment: Class C6 Interests will be discharged, canceled, released, and
extinguished as of the Effective Date, and will be of no further force or
effect, and EME will receive a distribution (if at all) on account of such
Interests subject to the Homer City Waterfall.

 

29

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  (c) Voting: Class C6 is Impaired. Holders of Interests in Class C6 as of the
Voting Record Date are entitled to vote to accept or reject the Plan.

E. Special Provision Governing Unimpaired Claims

Except as otherwise provided in the Plan, nothing under the Plan shall affect
the rights of the Debtors in respect of any Unimpaired Claims, including all
rights in respect of legal and equitable defenses to or setoffs or recoupments
against any such Unimpaired Claims. Unless otherwise Allowed, Unimpaired Claims
shall remain Disputed Claims under the Plan.

F. Elimination of Vacant Classes

Any Class of Claims or Interests that does not have a Holder of an Allowed Claim
or Allowed Interest or a Claim or Interest temporarily Allowed by the Bankruptcy
Court as of the date of the Confirmation Hearing shall be deemed eliminated from
the Plan for purposes of voting to accept or reject the Plan and for purposes of
determining acceptance or rejection of the Plan by such Class pursuant to
section 1129(a)(8) of the Bankruptcy Code.

G. Voting Classes; Presumed Acceptance by Non-Voting Classes

If a Class contains Claims eligible to vote and no Holders of Claims eligible to
vote in such Class vote to accept or reject the Plan, the Plan shall be presumed
accepted by the Holders of such Claims in such Class.

H. Confirmation Pursuant to Sections 1129(a)(10) and 1129(b) of the Bankruptcy
Code

The Debtors reserve the right, in consultation with the Purchaser, the
Committee, the Supporting Noteholders, and the PoJo Parties, to seek
Confirmation for the applicable Debtors pursuant to section 1129(b) of the
Bankruptcy Code with respect to any rejecting Class of Claims or Interests.

I. Subordinated Claims

The allowance, classification, and treatment of all Allowed Claims and Allowed
Interests and the respective distributions and treatments under the Plan take
into account and conform to the relative priority and rights of the Claims and
Interests in each Class in connection with any contractual, legal, and equitable
subordination rights relating thereto, whether arising under general principles
of equitable subordination, section 510(b) of the Bankruptcy Code, or otherwise.
Pursuant to section 510 of the Bankruptcy Code, the Debtors reserve the right to
re-classify any Allowed Claim or Allowed Interest in accordance with any
contractual, legal, or equitable subordination relating thereto.

J. Controversy Concerning Impairment

If a controversy arises as to whether any Claims or Interests, or any Class of
Claims or Interests, are Impaired, the Bankruptcy Court shall, after notice and
a hearing, determine such controversy on or before the Confirmation Date.

ARTICLE IV.

MEANS FOR IMPLEMENTATION OF THE PLAN

A. Restructuring Transactions

On or before the Effective Date or as soon as reasonably practicable thereafter,
the Plan Administrator, the Post-Effective-Date Debtor Subsidiaries, the
Post-Effective-Date Homer City Debtors, the Non-Debtor Subsidiaries, the
Purchaser Parties, and EIX may take all actions as may be necessary or
appropriate to effect any transaction described in, approved by, contemplated
by, or necessary to effectuate the Restructuring Transactions under and in
connection with the Plan, the Purchase Agreement, and the EIX Settlement
Agreement, including, without limitation: (1) the execution and delivery of all
appropriate agreements or other documents of merger,

 

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consolidation, restructuring, conversion, disposition, transfer, dissolution, or
liquidation containing terms that are consistent with the terms of the Plan, and
that satisfy the requirements of applicable law and any other terms to which the
applicable Entities may agree; (2) the execution and delivery of appropriate
instruments of transfer, assignment, assumption, or delegation of any asset,
property, right, liability, debt, or obligation on terms consistent with the
terms of the Plan and having other terms for which the applicable parties agree;
(3) rejection or assumption, as applicable, of Executory Contracts and Unexpired
Leases; (4) the filing of appropriate certificates or articles of incorporation,
reincorporation, merger, consolidation, conversion, or dissolution pursuant to
applicable state law; (5) the consummation of the transactions contemplated by
the Purchase Agreement; (6) the issuance of the New Interests and the execution
of all documents related thereto; (7) the consummation of the
Post-Effective-Date Reorganization Trust Matters; (8) MWG’s assumption of the
PoJo Leases and Documents, subject to the PoJo Lease Modifications; (9) the
payment by the Reorganization Trust of the Agreed PoJo Cure Amount and PoJo
Restructuring Fees; and (10) the consummation of the transactions set forth in
the EIX Settlement Agreement. The Debtors shall consult with the Committee and
the Supporting Noteholders regarding any material Restructuring Transaction
other than those specifically described or provided for in the Plan.

B. Sale Transaction

On the Effective Date, the Debtors, the Non-Debtor Subsidiaries, and the
Purchaser Parties shall be authorized to consummate the Sale Transaction
pursuant to the terms of the Purchase Agreement and Confirmation Order. On and
after the Effective Date, except as otherwise provided in the Plan, the
Reorganization Trust, the Post-Effective-Date Debtor Subsidiaries, the
Non-Debtor Subsidiaries, and the Purchaser Parties, as applicable, may operate
their businesses and may use, acquire, or dispose of property and compromise or
settle any Claims, Interests, EME Retained Causes of Action, or Purchaser
Retained Causes of Action without supervision or approval by the Bankruptcy
Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules;
provided that any Claims against the Debtors as of the Effective Date shall be
settled, compromised, withdrawn, or litigated to judgment as set forth in
Article VII of the Plan.

C. EIX Settlement

The Plan constitutes a motion by the Debtors pursuant to Bankruptcy Rule 9019 to
approve the EIX Settlement and, if approved, the EIX Settlement shall be deemed
incorporated herein by reference as an integral part of the Plan. Entry of the
Confirmation Order shall constitute the Bankruptcy Court’s approval of the EIX
Settlement. On the Effective Date, the Debtors and the Non-Debtor Subsidiaries
shall be authorized to consummate the EIX Settlement in accordance with the
terms of the EIX Settlement Agreement.

On the Effective Date, in accordance with the EIX Settlement Agreement: (1) the
Tax Sharing Agreements shall be deemed to have terminated pursuant to their
terms on December 31, 2013 with respect to EME, and shall not be assumed by EME
or assigned to the Purchaser Parties; (2) the Debtors’ Motion to Establish
Notification and Hearing Procedures For Transfers of, or Claims of Worthlessness
with Respect to, Certain Equity Securities and for Related Relief [Docket
No. 16] and any interim or final orders granting that motion shall cease to be
of any further force and effect on and after the Effective Date; (3) the Rule
2004 Order and the related examination under Bankruptcy Rule 2004 commenced by
the Debtors and the Committee and all related orders or subpoenas shall be
deemed terminated and cease to be of any further force or effect on and after
the Effective Date; and (4) Post-Reorganization EME will retain the Settlement
Retained Assets after the Effective Date pursuant to Section 4(d) of the EIX
Settlement Agreement.

On and after the Effective Date, except as otherwise provided in the Plan,
Post-Reorganization EME, EIX, EMG, SCE, and the EMG Subsidiaries, as applicable,
may operate their businesses and may use, acquire, or dispose of property and
compromise or settle any Settlement Assumed Liabilities without supervision or
approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy
Code or the Bankruptcy Rules; provided that any Claims against the Debtors as of
the Effective Date shall be settled, compromised, withdrawn, or litigated to
judgment as set forth in Article VII of the Plan.

 

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D. Sources of Plan Consideration

All amounts necessary for the Debtors, the Reorganization Trust, the Purchaser,
EIX, the Post-Effective-Date Debtor Subsidiaries, the Post-Effective-Date Homer
City Debtors, or the Disbursing Agent, as applicable, to make payments or
distributions pursuant hereto shall be obtained from the Cash of the Debtors,
Sale Proceeds, EIX Settlement Proceeds, New Interests, payments made directly by
EIX on account of Settlement Assumed Liabilities, payments made directly by the
Purchaser or any Post-Effective-Date Debtor Subsidiary on account of any Assumed
Liabilities pursuant to the Purchase Agreement, and payments of Cure Costs (if
any) made by the Purchaser pursuant to section 365 of the Bankruptcy Code, and
proceeds of the Post-Effective-Date Reorganization Trust Matters.

For avoidance of doubt, all distributions on account of any Allowed Claim under
this Plan shall be paid by the Reorganization Trust from the Sale Proceeds and
the EIX Settlement Proceeds unless and to the extent such Allowed Claim is an
Assumed Liability. Unless otherwise agreed, distributions required by this Plan
on account of Allowed Claims that are Assumed Liabilities shall be the sole
responsibility of (1) the applicable Post-Effective-Date Debtor Subsidiary or
(2) the Purchaser to the extent such Allowed Claim is allowed against EME.

 

  1. Payment of Sale Proceeds by the Purchaser

On the Effective Date, the Purchaser shall pay to EME the Sale Proceeds as and
to the extent provided for in the Purchase Agreement. Thereafter, the Net Sale
Proceeds shall be distributed in accordance with Article III.B.3, Article
III.B.4, and other applicable provisions of the Plan.

 

  2. Issuance and Distribution of New Interests

Any New Interests issued and distributed pursuant to the Plan shall be duly
authorized, validly issued, and fully paid and non-assessable. Each distribution
and issuance referred to in Article VI of the Plan shall be governed by the
terms and conditions set forth herein applicable to such distribution or
issuance and by the terms and conditions of the instruments evidencing or
relating to such distribution or issuance, which terms and conditions shall bind
each Entity receiving such distribution or issuance. The offering, issuance, and
distribution of the New Interests and the EIX Notes shall be exempt from the
registration and prospectus delivery requirements of the Securities Act and any
other applicable state and federal law requiring registration and/or delivery of
a prospectus prior to the offering, issuance, distribution, or sale of
securities pursuant to section 1145 of the Bankruptcy Code, consistent with
Article IV.L of the Plan.

 

  3. Assumed Liabilities

The Purchaser and the Post-Effective-Date Debtor Subsidiaries shall make all
payments on account of any Assumed Liabilities pursuant to and in accordance
with the Purchase Agreement. Neither the Debtors, prior to the Effective Date,
nor the Reorganization Trust, the Post-Effective-Date Debtor Subsidiaries
(except in accordance with the Purchase Agreement), nor the Post-Effective-Date
Homer City Debtors, as applicable, after the Effective Date, shall have any
obligation to make any payment or other distribution on account of any Claims
that are Assumed Liabilities.

EIX shall make all payments on account of the Settlement Assumed Liabilities
pursuant to the EIX Settlement Agreement. Neither the Debtors, prior to the
Effective Date, nor the Reorganization Trust, the Post-Effective-Date Debtor
Subsidiaries, nor the Post-Effective-Date Homer City Debtors, as applicable,
after the Effective Date shall have any obligation to make any payment or other
distribution on account of any Settlement Assumed Liabilities pursuant to the
EIX Settlement Agreement.

 

  4. Payment of Cure Costs

On the Effective Date or as soon as reasonably practicable thereafter, the
Purchaser or the Post-Effective-Date-Debtor Subsidiaries shall pay all Cure
Costs, if any, pursuant to section 365 of the Bankruptcy Code and in accordance
with the Purchase Agreement. Neither the Debtors, prior to the Effective Date,
nor the Reorganization

 

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Trust, the Post-Effective-Date Debtor Subsidiaries, nor the Post-Effective-Date
Homer City Debtors, as applicable, after the Effective Date, shall have any
obligation to make any payment or other distribution on account of any Cure
Costs. Notwithstanding the foregoing, on the Effective Date, the Reorganization
Trust shall pay the Agreed PoJo Cure Amount and the PoJo Restructuring Fees in
full in Cash.

E. Reorganization Trust; Post-Effective-Date Reorganization Trust Matters

On the Effective Date, the Reorganization Trust will be established for the
primary purpose of performing all actions related to the Post-Effective-Date
Reorganization Trust Matters, with no objective to continue or engage in the
conduct of a trade or business, except to the extent reasonably necessary to,
and consistent with, the liquidating purpose of the Reorganization Trust. The
Reorganization Trust shall be the successor in interest of the Debtors and the
Non-Debtor Subsidiaries for purposes of performing the obligations under,
enforcing, and obtaining the benefits of, the terms of the EIX Settlement
Agreement, and the Reorganization Trust shall assume all obligations of the
Debtors under the Plan and the EIX Settlement Agreement, including for the
Settlement Retained Liabilities as set forth in the EIX Settlement Agreement.

Prior to the Effective Date, EME is authorized to enter into a commitment to
sell its interest in the EIX Notes without further order of the Bankruptcy Court
in consultation with the Supporting Noteholders. On and after the Effective
Date, the Reorganization Trust is authorized to sell , and shall consummate a
sale of, its interest in the EIX Notes on or before December 31, 2014, without
further order of the Bankruptcy Court. Entry of the Confirmation Order is hereby
deemed to approve any EIX Note Sale.

For all federal income tax purposes, the beneficiaries of the Reorganization
Trust will be treated as grantors and owners of their respective share of the
Reorganization Trust’s assets, and it is intended that the Reorganization Trust
be classified as a liquidating trust under Section 301.7701-4 of the Treasury
Regulations and as a grantor trust pursuant to Section 1.671-4(a) of the
Treasury Regulations. Accordingly, for federal income tax purposes, it is
intended that the beneficiaries of the Reorganization Trust be treated as if
they had received a distribution of an interest in the Reorganization Trust’s
assets in satisfaction of their claims against the Debtors and then immediately
contributed such interests to the Reorganization Trust. The Reorganization Trust
will, in an expeditious but orderly manner, liquidate and convert to Cash the
Reorganization Trust’s assets, make timely distributions to the beneficiaries of
the Reorganization Trust pursuant to the Plan and the Confirmation Order, and
not unduly prolong its duration. Upon the termination of the Reorganization
Trust, any excess funds shall be distributed to Holders of Allowed Claims in
accordance with Article III of the Plan

F. Plan Administrator

On and after the Effective Date, unless specifically set forth to the contrary
in the Plan, the Plan Administrator shall have the authority and right, without
the need for Bankruptcy Court approval, to carry out and implement all
provisions of the Plan, including liquidating, settling, compromising, or
resolving all Claims, any and all contracts, and any other obligations of, or
associated with, the Debtors.

G. Disputed Claims Reserve

On the Effective Date (or as soon thereafter as is reasonably practicable), the
Reorganization Trust shall deposit in the Disputed Claims Reserve the Disputed
Claims Reserve Amount. For the avoidance of doubt, there shall be no reserve
required for Claims against the Debtors, to the extent such Claims are Assumed
Liabilities, Settlement Assumed Liabilities, or are released, discharged, or
otherwise extinguished pursuant to the Plan, nor shall there be any reserves,
holdbacks, escrows, or indemnities arising from the Purchase Agreement or
otherwise relating to the Sale Transaction. In addition, and consistent with
Article II.B hereof, no reserve shall be required for any Claim asserted by the
IRS.

H. Compensation and Benefits Programs

On the Effective Date or as soon as reasonably practicable thereafter, the
Reorganization Trust shall fund the Compensation and Benefits Programs Escrow in
an amount of any compensation and benefit obligations under

 

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any present compensation, benefit, or incentive programs, including the Exit
Plan and any programs approved pursuant to the Final Wages Order, the Final
Non-Insider Incentive Plan Order, and Final Insider Incentive Plan Order in
accordance with the Purchase Agreement, other than any compensation, benefit,
and incentive obligations assumed by the Purchaser or any Acquired Company
pursuant to the Purchase Agreement. Immediately upon occurrence of the Effective
Date: (1) Employee participants in the programs approved pursuant to the Final
Non-Insider Incentive Plan Order and Final Insider Incentive Plan Order shall be
entitled to an award under such programs based on performance during the period
between January 1, 2014 and the Effective Date, to be paid from the Compensation
and Benefits Programs Escrow as soon as practicable following the occurrence of
the Effective Date; and (2) all Employees of the Debtors will be deemed
terminated by the Debtors for all purposes (including under the Long-Term
Incentive Plan, the EME Severance Plan, and any other applicable severance plan
or arrangement). On and after the Effective Date, the Plan Administrator shall
have the authority, in its sole discretion, to direct disbursements from the
Compensation and Benefits Programs Escrow, the awards and allocations of such
disbursements to be determined by EME’s existing independent directors (the
members of the Compensation Committee), subject to and in accordance with any
present compensation, benefit, or incentive programs, including the Exit Plan,
the other applicable Compensation and Benefits Plans, and any programs approved
pursuant to the Final Wages Order, the Final Non-Insider Incentive Plan Order,
and Final Insider Incentive Plan Order in accordance with the Purchase
Agreement, other than any compensation, benefit, and incentive obligations
assumed by the Purchaser or any Acquired Company pursuant to the Purchase
Agreement, as applicable, and shall, in its sole discretion, maintain, modify,
or terminate any benefits or other obligations to any Employees or former
Employees or any survivors or dependents thereof with respect to retiree medical
benefits and/or other post-employment health and welfare (and non-qualified
retirement) benefits. The Reorganization Trust shall have a reversionary
interest in the excess, if any, of the amount of the Compensation and Benefits
Programs Escrow over the amounts paid on behalf of the Compensation and Benefits
Programs Escrow to be paid from the Compensation and Benefits Programs Escrow,
and the Reorganization Trust shall have the right to release from escrow any
amounts held in respect of terminated benefits under any Compensation and
Benefits Programs. In accordance with the EIX Settlement Agreement, as of the
Effective Date, Post-Reorganization EME shall have no employees, and all
liabilities, if any, to former EME employees for severance or other benefits in
connection with the termination of their employment with EME shall be Settlement
Retained Liabilities.

I. New Governance Documents

On the Effective Date, the Reorganization Trust shall enter into the New
Governance Documents. The New Governance Documents shall be deemed to be valid,
binding, and enforceable in accordance with their terms, and each Holder of New
Interests shall be deemed to be bound thereby, in each case without the need for
execution by any party thereto other than the Reorganization Trust.

J. Preservation of Capistrano Note and Capistrano Pledge Agreement; Preservation
of Viento II Pledge

Notwithstanding anything to the contrary in the Plan, on the Effective Date, any
and all claims of any of the Debtors or the Non-Debtor Subsidiaries under the
Capistrano Note and the Capistrano Pledge Agreement shall be preserved and
Reinstated.

Notwithstanding anything to the contrary in the Plan, on the Effective Date, the
Viento II Pledge Agreement shall be preserved and Reinstated.

K. General Settlement of Claims

Pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019, and in
consideration for the classification, distributions, releases, and other
benefits provided under the Plan, on the Effective Date, the provisions of the
Plan shall constitute a good-faith compromise and settlement of all Claims,
Interests, Causes of Action, and controversies resolved pursuant to the Plan.

 

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L. Section 1145 Exemption

The offering, issuance, and distribution of the New Interests and the issuance
of the EIX Notes shall each be exempt from the registration and prospectus
delivery requirements of the Securities Act and any other applicable state and
federal law requiring registration and/or delivery of a prospectus prior to the
offering, issuance, distribution, or sale of securities pursuant to section 1145
of the Bankruptcy Code, consistent with this Article IV.L of the Plan.

M. Release of Liens

Except as otherwise provided herein or in any contract, instrument, release, or
other agreement or document created pursuant to the Plan, on the Effective Date
and concurrently with the applicable distributions made pursuant to the Plan
and, in the case of a Secured Claim, satisfaction, compromise, settlement,
release, and discharge in full of the portion of the Secured Claim that is
Allowed as of the Effective Date, all mortgages, deeds of trust, Liens, pledges,
or other security interests against any property of the Estates shall be fully
released, settled, discharged, and compromised and all rights, titles, and
interests of any Holder of such mortgages, deeds of trust, Liens, pledge, or
other security interests against any property of the Estates shall revert to the
Reorganization Trust, the Purchaser, the Post-Effective-Date Debtor
Subsidiaries, and the Post-Effective-Date Homer City Debtors, as applicable, and
their respective successors and assigns. The Reorganization Trust, the
Purchaser, the Post-Effective-Date Debtor Subsidiaries, and the
Post-Effective-Date Homer City Debtors, as applicable, shall be authorized to
file any necessary or desirable documents to evidence such release in the name
of such Secured Party. Notwithstanding the foregoing, this Article IV.M of the
Plan shall have no effect on the validity of the PoJo Leases and Documents (as
modified by the PoJo Lease Modifications).

N. Cancellation of Securities and Agreements

On the Effective Date, except as otherwise specifically provided for in the
Plan: (1) the obligations of EME, the Reorganization Trust, and
Post-Reorganization EME as applicable, under the EME Senior Notes Indentures and
of the Debtors under any other certificate, share, note, bond, indenture,
purchase right, or other instrument or document directly or indirectly
evidencing or creating any indebtedness or obligation of or ownership interest,
equity, or profits interest in the Debtors or any warrants, options, or other
securities exercisable or exchangeable for, or convertible into, debt, equity,
ownership, or profits interests in the Debtors giving rise to any Claim or
Interest, shall be canceled as to the Debtors or otherwise treated as set forth
in the Plan, and the Reorganization Trust, the Post-Effective-Date Debtor
Subsidiaries, Post-Reorganization EME, and the Post-Effective-Date Homer City
Debtors, as applicable, shall not have any continuing obligations thereunder;
and (2) the obligations of the Reorganization Trust, the Post-Effective-Date
Debtor Subsidiaries, Post-Reorganization EME, and the Post-Effective-Date Homer
City Debtors, as applicable, pursuant, relating, or pertaining to any
agreements, indentures, certificates of designation, bylaws, or certificate or
articles of incorporation or similar documents governing the shares,
certificates, notes, bonds, indentures, purchase rights, options, warrants, or
other instruments or documents evidencing or creating any indebtedness or
obligation of the Reorganization Trust, the Post-Effective-Date Debtor
Subsidiaries, Post-Reorganization EME, and the Post-Effective-Date Homer City
Debtors, as applicable, shall be fully released, settled, and compromised except
as expressly provided herein; provided that, notwithstanding Confirmation or the
occurrence of the Effective Date, any such agreement that governs the rights of
the Holder of a Claim or Interest shall continue in effect solely for purposes
of allowing such Holders to receive distributions under the Plan from the
Reorganization Trust or the Purchaser, as applicable, as provided herein;
provided, further, that this Article IV.N of the Plan shall have no effect on
the validity of: (a) the PoJo Leases and Documents (as modified by the PoJo
Lease Modifications); or (b) the Capistrano Note, the Capistrano Pledge
Agreement, and the Viento II Pledge Agreement.

Notwithstanding the foregoing and anything else contained in the Plan, the EME
Senior Notes Indentures will continue in effect solely for the purposes of
(a) allowing distributions, if any, to be made under the Plan pursuant to the
EME Senior Notes Indentures and for the EME Senior Notes Indenture Trustee to
perform such other necessary functions with respect thereto, if any, and to have
the benefit of all the protections and other provisions of the applicable
indentures in doing so; and (b) permitting the EME Senior Notes Indenture
Trustee to (i) maintain and assert the EME Senior Notes Indenture Trustee
Charging Lien, (ii) seek compensation and reimbursement for any reasonable and
documented fees and expenses, if any, incurred in making distributions

 

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pursuant to the Plan, and (iii) maintain and enforce any rights of the EME
Senior Notes Indenture Trustee to indemnification or contribution from EME
and/or Holders of EME Senior Notes pursuant and subject to the terms of the EME
Senior Notes Indenture, as in effect on the Effective Date, which rights, if
any, shall continue to exist regardless of whether or not a proof of claim
asserting such rights was filed by the EME Senior Notes Indenture Trustee in
these Chapter 11 Cases. On and after the Effective Date, all duties and
responsibilities of the EME Senior Notes Indenture Trustee under the applicable
indentures, including any and all obligations to Holders of the EME Senior
Notes, shall be discharged except to the extent set forth herein or required in
order to effectuate the Plan.

On the Effective Date, except to the extent otherwise provided herein, any
indenture relating to any of the foregoing, including the EME Senior Notes
Indentures, shall be deemed to be canceled and terminated, as permitted by
section 1123(a)(5)(F) of the Bankruptcy Code without further action under any
applicable agreement, law, regulation, order, or statute, and the obligations of
the Debtors thereunder shall be fully released, settled, discharged, and
compromised.

If the record holder of the EME Senior Notes is DTC or its nominee or another
securities depository or custodian thereof, and such EME Senior Notes are
represented by a global security held by or on behalf of DTC or such other
securities depository or custodian, then each such Holder of the EME Senior
Notes shall be deemed to have surrendered such Holder’s note, debenture or other
evidence of indebtedness upon surrender of such global security by DTC or such
other securities depository or custodian thereof.

O. Corporate Action

Upon the Effective Date, all actions contemplated by the Plan shall be deemed
authorized, approved, and, to the extent taken prior to the Effective Date,
ratified without any requirement for further action by Holders of Claims or
Interests, directors, managers, or officers of the Plan Administrator, the Plan
Administrator, the Post-Effective-Date Debtor Subsidiaries, the
Post-Effective-Date Homer City Debtors, or any other Entity or Person, as
applicable, including: (1) the execution and delivery of all appropriate
agreements or other documents of merger, consolidation, restructuring,
conversion, disposition, transfer, dissolution, or liquidation containing terms
that are consistent with the terms of the Plan (including, for the avoidance of
doubt, the distribution of the Net Sale Proceeds pursuant to the Plan), and that
satisfy the requirements of applicable law and any other terms to which the
applicable Entities may agree; (2) the execution and delivery of appropriate
instruments of transfer, assignment, assumption, or delegation of any asset,
property, right, liability, debt, or obligation on terms consistent with the
terms of the Plan and having other terms for which the applicable parties agree;
(3) rejection or assumption, as applicable, of Executory Contracts and Unexpired
Leases; (4) selection of the board of directors of Post-Reorganization EME, the
Reorganization Trust Oversight Board, and any employees or trustee of the
Reorganization Trust; (5) the filing of appropriate certificates or articles of
incorporation, reincorporation, merger, consolidation, conversion, or
dissolution pursuant to applicable state law; (6) the consummation of the
transactions contemplated by the Purchase Agreement; (7) the issuance of the New
Interests and the execution of all documents related thereto; (8) the
consummation of the Homer City Wind Down; (9) the consummation of the
Post-Effective-Date Reorganization Trust Matters; (10) MWG’s assumption of the
PoJo Leases and Documents, subject to the PoJo Lease Modifications; (11) the
payment by the Reorganization Trust of the Agreed PoJo Cure Amount and the PoJo
Restructuring Fees; (12) all other actions that the applicable Entities
determine to be necessary or appropriate, including making filings or recordings
that may be required by applicable law; (13) the release and extinguishment of
the PoJo EME Guarantees; (14) all authorizations and actions necessary to effect
the termination and release of the Intercompany Notes; and (15) all other
actions that the applicable Entities determine to be necessary or appropriate,
including making filings or recordings that may be required by applicable law.
All matters provided for in the Plan involving the company structure of the
Debtors, and any company action required by the Debtors in connection therewith,
shall be deemed to have occurred on, and shall be in effect as of, the Effective
Date, without any requirement of further action by the security holders,
directors, managers, authorized persons, or officers of the Debtors. The
authorizations and approvals contemplated by this Article IV.O of the Plan shall
be effective notwithstanding any requirements under nonbankruptcy law.

P. Effectuating Documents; Further Transactions

On and after the Effective Date, the Reorganization Trust, the
Post-Effective-Date Debtor Subsidiaries, the Post-Effective-Date Homer City
Debtors, and the Reorganization Trust Oversight Board, trustee, managers,
officers,

 

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authorized persons, and members of the boards of managers and directors thereof,
are authorized to and may issue, execute, deliver, file, or record such
contracts, securities, instruments, releases, and other agreements or documents
and take such actions as may be necessary or appropriate to effectuate,
implement, and further evidence the terms and conditions of the Plan, including
the New Interests and the New Governance Documents, in the name of and on behalf
of the Reorganization Trust, the Post-Effective-Date Debtor Subsidiaries, and
the Post-Effective-Date Homer City Debtors, as applicable, without the need for
any approvals, authorization, or consents except for those expressly required
pursuant to the Plan.

Q. Exemption from Certain Taxes and Fees

Pursuant to section 1146(a) of the Bankruptcy Code, any transfers of property
pursuant hereto or pursuant to the issuance of the New Interests shall not be
subject to any document recording tax, stamp tax, conveyance fee, intangibles or
similar tax, mortgage tax, real estate transfer tax, mortgage recording tax,
Uniform Commercial Code filing or recording fee, FERC filing or recording fee,
or other similar tax or governmental assessment, and the appropriate state or
local governmental officials or agents shall forego the collection of any such
tax or governmental assessment and to accept for filing and recordation any of
the foregoing instruments or other documents without the payment of any such tax
or governmental assessment. Such exemption specifically applies to (1) the
creation of any mortgage, deed of trust, Lien, or other security interest;
(2) the making or assignment of any lease or sublease; (3) any Restructuring
Transaction; (4) the issuance, distribution, and/or sale of any of the New
Interests and any other securities of the Debtors or the Reorganization Trust;
or (5) the making or delivery of any deed or other instrument of transfer under,
in furtherance of or in connection with the Plan, including: (a) any merger
agreements; (b) agreements of consolidation, restructuring, disposition,
liquidation, or dissolution; (c) deeds; (d) bills of sale; or (e) assignments
executed in connection with any Restructuring Transaction occurring under the
Plan.

R. Corporate Existence

Except as otherwise provided in the Plan, each Debtor shall continue to exist
after the Effective Date as a separate corporate Entity, limited liability
company, partnership, or other form, as the case may be, with all the powers of
a corporation, limited liability company, or other form, as the case may be,
pursuant to the applicable law in the jurisdiction in which each applicable
Debtor is incorporated or formed and pursuant to the respective certificate of
incorporation and bylaws (or other formation documents) in effect prior to the
Effective Date, except to the extent such certificate of incorporation and
bylaws (or other formation documents) are amended by the Plan or otherwise, and
to the extent such documents are amended, such documents are deemed to be
pursuant to the Plan and require no further action or approval.

S. Substantive Consolidation

The Plan shall serve as a motion by the Debtors seeking entry of an order
substantively consolidating each of the Estates of the Debtor Subsidiaries into
a single consolidated Estate and each of the Estates of the Homer City Debtors
into a single consolidated Estate, in each case solely for the limited purposes
of voting and Confirmation. For the avoidance of doubt, the Plan shall not serve
as a motion by the Debtors seeking entry of an order substantively consolidating
the Debtor Subsidiaries or the Homer City Debtors for any other purposes.
Notwithstanding anything in this Article IV.S of the Plan, all distributions
under the Plan shall be made in accordance with Article IV.C and Article VI of
the Plan.

If the Debtor Subsidiaries’ Estates and the Homer City Debtors’ Estates are
substantively consolidated in accordance with this Section, then, on and after
the Effective Date, all assets and liabilities (including Allowed Claims) of the
Debtor Subsidiaries and the Homer City Debtors, as applicable, shall be treated
as though they were merged into one Estate solely for purposes of voting and
Confirmation. The limited substantive consolidation described herein shall not
affect the legal and organizational structure of the Debtor Subsidiaries, the
Homer City Debtors, the Post-Effective-Date Debtor Subsidiaries, or the
Post-Effective-Date Homer City Debtors or their separate corporate existences or
any prepetition or postpetition guarantees, Liens, or security interests that
are required to be maintained under the Bankruptcy Code, under the Plan, or,
with respect to Executory Contracts or Unexpired Leases that were assumed or
entered into during the Chapter 11 Cases. Moreover, any alleged defaults under
any applicable agreement with the Debtors, the Post-Effective-Date Debtor
Subsidiaries, the Post-Effective-Date Homer City Debtors, Post-

 

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Reorganization EME, the Reorganization Trust, or their respective Affiliates
arising from substantive consolidation under the Plan shall be deemed cured as
of the Effective Date.

If the Debtor Subsidiaries’ Estates and the Homer City Debtors’ Estates are not
substantively consolidated in accordance with this Section, then (1) the Plan
shall be deemed to constitute a separate sub-plan for each of the Debtor
Subsidiaries and the Homer City Debtors, as applicable, and each Class of Claims
against or Interests in the Debtor Subsidiaries or the Homer City Debtors shall
be deemed to constitute separate sub-Classes of Claims against and Interests in
each of the Debtor Subsidiaries or the Homer City Debtors, as applicable,
(2) the confirmation requirements of section 1129 of the Bankruptcy Code must be
satisfied separately with respect to each sub-plan, (3) any Claim against any of
the Debtor Subsidiaries or the Homer City Debtors shall be treated as a Claim
only against the applicable Debtor Subsidiary or Homer City Debtor, as
applicable, for purposes of voting and Confirmation, (4) such Claims shall be
administered as provided in the Plan, and (5) the Debtors shall not, nor shall
they be required to, resolicit votes with respect to the Plan, nor will the
failure of the Bankruptcy Court to approve limited substantive consolidation of
the Debtor Subsidiaries or the Homer City Debtors alter the distributions set
forth in the Plan.

Notwithstanding the substantive consolidation provided for herein, nothing shall
affect the obligation of each and every Debtor to pay the U.S. Trustee Fees
until such time as a particular Chapter 11 Case is closed, dismissed, or
converted.

T. Vesting of Assets

Except as otherwise provided in the Plan or any agreement, instrument, or other
document incorporated herein, on the Effective Date, (1) all applicable Causes
of Action and all property in the EME Estate other than the Settlement Retained
Assets shall be preserved and shall vest in the Reorganization Trust, as
applicable, free and clear of all Liens, Claims, charges, or other encumbrances,
(2) all Settlement Retained Assets shall be preserved and shall vest in
Post-Reorganization EME free and clear of all Liens, Claims, Causes of Action,
charges, or other encumbrances, (3) all property in each of the Homer City
Debtors’ Estates shall vest in the applicable Post-Effective-Date Homer City
Debtors, free and clear of all Liens, Claims, charges, or other encumbrances,
(4) all property in each of the Debtor Subsidiary Estates shall be preserved and
shall vest in the applicable Post-Effective-Date Debtor Subsidiaries, free and
clear of all Liens, Claims, charges, or other encumbrances, and (5) all property
of the EME Estate to be acquired by the Purchaser in the Purchase Agreement
shall be preserved and shall vest in the Purchaser, free and clear of all Liens,
Claims, charges, and other encumbrances. On and after the Effective Date, except
as otherwise provided in the Plan, Post-Reorganization EME, the Reorganization
Trust, the Post-Effective-Date Homer City Debtors, and the Post-Effective-Date
Debtor Subsidiaries may operate their businesses and use, acquire, or dispose of
property and, as applicable, compromise or settle any Claims, Interests, or
Causes of Action without supervision or approval by the Bankruptcy Court and
free of any restrictions of the Bankruptcy Code or Bankruptcy Rules.
Notwithstanding the foregoing, this Article IV.T of the Plan shall have no
effect on the validity of the PoJo Leases and Documents (as modified by the PoJo
Lease Modifications). Except as provided to the contrary in the Plan, the
Purchase Agreement, or the EIX Settlement Agreement with respect to the
Settlement Assumed Liabilities, all obligations of the Debtors under the Plan,
including any obligation to make distributions under the Plan (including with
respect to the Settlement Retained Liabilities), shall be satisfied by the
Reorganization Trust.

U. Indemnification of Certain Directors, Managers, Officers, and Employees

The Purchaser Parties shall comply with their obligations under Section 9.7 of
the Purchase Agreement as set forth therein in favor of each person who is or
was an officer or director of the Acquired Companies.

V. Assumption of Certain D&O Liability Insurance Policies

To the extent that the D&O Liability Insurance Policies are considered to be
Executory Contracts, notwithstanding anything in the Plan to the contrary,
effective as of the Effective Date, the Reorganization Trust shall be deemed to
have assumed all unexpired D&O Liability Insurance Policies with respect to
EME’s directors, managers, officers, and employees serving as of the Petition
Date pursuant to section 365(a) of the Bankruptcy Code. Entry of the
Confirmation Order will constitute the Bankruptcy

 

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Court’s approval of the Reorganization Trust’s assumption of each of the
unexpired D&O Liability Insurance Policies. Notwithstanding anything to the
contrary contained in the Plan, Confirmation of the Plan shall not discharge,
impair, or otherwise modify any indemnity obligations assumed by the foregoing
assumption of the D&O Liability Insurance Policies, and each such indemnity
obligation will be deemed and treated as an Executory Contract that has been
assumed by the Reorganization Trust under the Plan as to which no Proof of Claim
need be filed.

W. Reorganization Trust Oversight Board

The Reorganization Trust Oversight Board shall consist of at least two (2) and
up to five (5) members, the initial members of which shall include EME’s two
(2) existing independent directors and any members appointed by the Supporting
Noteholders and the Committee. As of the Effective Date, (1) all directors and
other members of the existing board or governance body of EME shall cease to
hold office or have any authority from and after such time to the extent not
expressly included in the roster of the applicable Reorganization Trust
Oversight Board, and (2) all directors and other members of the existing boards
or governance bodies of each Debtor Subsidiary and Non-Debtor Subsidiary shall
cease to hold office or have any authority from and after such time except as
agreed to in writing by the Purchaser.

X. Payment of Certain Fees and Expenses

On the Effective Date, the Reorganization Trust shall pay in Cash in full the
PoJo Restructuring Fees, Supporting Noteholder Fees (including, for the
avoidance of doubt, any fees and expenses under the Bluescape Letter Agreement),
and any accrued and unpaid fees and expenses of (1) the EME Senior Notes
Indenture Trustee payable under the EME Senior Notes Indenture and (2) the Bank
of New York Mellon (as successor pass-through trustee and successor lease
indenture trustee). From and after the Effective Date, the Reorganization Trust
shall pay (1) all reasonable, actual, and documented fees and expenses of
Ropes & Gray LLP as counsel to the Noteholder Group in connection with the
implementation of the EIX Settlement Agreement payable pursuant to the R&G
Agreement until the last day of the month in which the final issuance of the EIX
Notes occurs pursuant to the terms of the Plan and the Settlement Agreement, as
applicable, and (2) pay all amounts required, as and when due, pursuant to the
Bluescape Letter Agreement.

On the Effective Date, the Reorganization Trust shall pay the EME Senior Notes
Indenture Trustee Fees without the need for application to, or approval by, any
court. At least ten days prior to the Effective Date, the EME Senior Notes
Indenture Trustee shall submit its invoices for EME Senior Notes Indenture
Trustee Fees through the Effective Date (including any estimated fees and
expenses) to the Debtors. Should the Debtors (or the Reorganization Trust)
dispute the reasonableness of any invoiced EME Senior Notes Indenture Trustee
Fees, the Debtors (or the Reorganization Trust) shall (1) pay the undisputed
portion of any invoices on the Effective Date, (2) place any disputed amounts in
escrow on the Effective Date, and (3) notify the EME Senior Notes Indenture
Trustee of any dispute within five (5) days after the presentation of an invoice
by the EME Senior Notes Indenture Trustee. Upon such notification, the EME
Senior Notes Indenture Trustee may assert the EME Senior Notes Indenture Trustee
Charging Lien to pay the undisputed and unpaid portion of the EME Senior Notes
Indenture Trustee Fees, and/or after the parties have attempted in good faith to
resolve any such dispute, within fifteen (15) days after the notification of the
dispute, may submit such dispute for resolution to the Bankruptcy Court;
provided that the Bankruptcy Court’s review shall be limited to a determination
under the reasonable standard in accordance with the EME Senior Notes
Indentures. Nothing herein shall be deemed to impair, waive, discharge, or
negatively affect any EME Senior Notes Indenture Trustee Charging Lien for any
fees, costs and expenses not paid pursuant to the Plan and otherwise claimed by
the EME Senior Notes Indenture Trustee pursuant to this section.

Y. Homer City Wind Down

As of the Effective Date, the existing boards of directors or boards of managers
of the Homer City Debtors shall be dissolved without any further action required
on the part of the Homer City Debtors or the Homer City Debtors’ officers,
directors, shareholders, and members and any all remaining officers, directors,
managers, or managing members of each Homer City Debtor shall be dismissed
without any further action required on the part of any such Homer City Debtor or
its respective shareholders, directors, managers, officers, or members.

 

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On and after the Effective Date, the Plan Administrator will implement any other
provision of the Plan and any applicable orders of the Bankruptcy Court, and the
Plan Administrator shall have the power and authority to take any action
necessary to accomplish the Homer City Wind Down. As soon as practicable after
the Effective Date, the Plan Administrator shall: (1) cause the
Post-Effective-Date Homer City Debtors to comply with, and abide by, the terms
of the Plan; (2) complete and file all final or otherwise required federal,
state, and local tax returns for each of the Post-Effective-Date Homer City
Debtors, and pursuant to section 505(b) of the Bankruptcy Code, request an
expedited determination of any unpaid tax liability of such Homer City Debtor or
its Estate for any tax incurred during the administration of such Homer City
Debtor’s Chapter 11 Case, as determined under applicable tax laws; and (3) take
such other actions as the Plan Administrator may determine to be necessary or
desirable to carry out the Homer City Wind Down without further action under
applicable law, regulation, order, or rule, including any action by the
stockholders, members, board of directors, or board of managers of each such
Homer City Debtor and notwithstanding anything to the contrary under applicable
nonbankruptcy law, including any requirement to file a certificate of
dissolution with respect to the Homer City Debtors.

Z. Release of Avoidance Actions

In accordance with section 1123(b) of the Bankruptcy Code, the Debtors shall
release all rights to commence and pursue, as appropriate, any and all Avoidance
Actions not identified as an EME Retained Cause of Action in the Plan
Supplement. Notwithstanding anything in this Plan, any Confirmation Order, or
the Purchase Agreement to the contrary, all Allowed Claims against any Debtor
arising under Section 502(h) of the Bankruptcy Code shall be deemed Excluded
Liabilities.

AA. Retention of Retained Causes of Actions

On the Effective Date, the Purchaser and the Post-Effective-Date Debtor
Subsidiaries will be vested with title to the Purchaser Retained Causes of
Action, regardless of whether scheduled by the Debtors, including, without
limitation, all such Causes of Action of any kind whatsoever at law or equity,
free and clear of all liens, claims, encumbrances, charges, and other interests
of creditors and equity security holders, in accordance with section 1141 of the
Bankruptcy Code.

ARTICLE V.

TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

A. Assumption of Executory Contracts and Unexpired Leases

Except as otherwise provided herein, as of the Effective Date, all Executory
Contracts and Unexpired Leases listed on the Schedule of Assumed Executory
Contracts and Unexpired Leases will be deemed: (i) assumed by the applicable
Debtor in accordance with, and subject to the provisions and requirements of
sections 365 and 1123 of the Bankruptcy Code; and (ii) if so indicated on the
Schedule of Assumed Executory Contracts and Unexpired Leases, assigned to the
other party identified as the assignee for each assumed Executory Contract and
Unexpired Lease. For the avoidance of doubt, the PoJo Leases and Documents shall
be modified and assumed in accordance with Article V.G.

B. Rejection of Executory Contracts and Unexpired Leases

Except as otherwise provided herein, or in any contract, instrument, release,
indenture, or other agreement, or in any document entered into in connection
with the Plan, as of the Effective Date, each Debtor shall be deemed to have
rejected each Executory Contract and Unexpired Lease to which it is a party,
unless such Executory Contract or Unexpired Lease: (1) was previously assumed or
rejected; (2) was previously expired or terminated pursuant to its own terms;
(3) is the subject of a motion or notice to assume filed on or before the
Confirmation Date; or (4) is designated specifically or by category as an
Executory Contract or Unexpired Lease on the Schedule of Assumed Executory
Contracts and Unexpired Leases. For the avoidance of doubt, any Executory
Contract or Unexpired Lease which does not appear on the Schedule of Rejected
Executory Contracts and Unexpired Leases and which is not subject to one of the
four conditions for assumption of Executory Contracts and Unexpired Leases
listed in this paragraph shall be deemed rejected.

 

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C. Effect of Confirmation Order

The Confirmation Order shall constitute an order of the Bankruptcy Court under
sections 365 and 1123(b) of the Bankruptcy Code approving the assumptions and
assignments or rejections described above as of the Effective Date. Unless
otherwise indicated, all assumptions and assignments or rejections of Executory
Contracts and Unexpired Leases in the Plan will be effective as of the Effective
Date. Each Executory Contract and Unexpired Lease assumed and assigned pursuant
to the Plan or by Bankruptcy Court order, shall vest in and be fully enforceable
by the applicable assignee in accordance with its terms, except as such terms
may have been modified by order of the Bankruptcy Court. To the maximum extent
permitted by law, to the extent any provision in any Executory Contract or
Unexpired Lease assumed pursuant to the Plan restricts or prevents, or purports
to restrict or prevent, or is breached or deemed breached by, the assumption of
such Executory Contract or Unexpired Lease (including any “change of control”
provision), then such provision shall be deemed modified such that the
transactions contemplated by the Plan shall not entitle the non-Debtor party
thereto to terminate such Executory Contract or Unexpired Lease or to exercise
any other default-related rights with respect thereto.

Notwithstanding the foregoing paragraph or anything contrary herein, subject to
the terms and conditions of the Purchase Agreement, the Debtors reserve the
right to alter, amend, modify, or supplement the Schedule of Assumed Executory
Contracts and Unexpired Leases and the Schedule of Rejected Executory Contracts
and Unexpired Leases until 15 days after the Effective Date.

D. Cure of Defaults for Assumed Executory Contracts and Unexpired Leases

Any defaults under each Executory Contract and Unexpired Lease to be assumed by
any Debtor Subsidiary or assumed and assigned by EME to the Purchaser pursuant
to the Plan shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy
Code, solely by payment of the Cure Cost by the Purchaser or the
Post-Effective-Date Debtor Subsidiary except as otherwise agreed by the
non-Debtor party to any such Executory Contract or Unexpired Lease on the
Effective Date or as soon as reasonably practicable thereafter or on such other
terms as the Debtors, the Purchaser, and the counterparties to each such
Executory Contract or Unexpired Lease may otherwise agree.

In the event of a dispute regarding: (1) the amount of any Cure Cost, (2) the
ability of the Debtors, the Reorganization Trust, the Post-Effective-Date Debtor
Subsidiaries, the Purchaser, or any assignee, as applicable, to provide
“adequate assurance of future performance” within the meaning of section 365(b)
of the Bankruptcy Code, if applicable, under the Executory Contract or the
Unexpired Lease to be assumed or assumed and assigned, and/or (3) any other
matter pertaining to assumption and/or assignment, then such Cure Costs shall be
paid following the entry of a Final Order resolving the dispute and approving
the assumption and assignment of such Executory Contracts or Unexpired Leases or
as may be agreed upon by the Debtors, the Reorganization Trust, the
Post-Effective-Date Debtor Subsidiaries, or the Purchaser, as applicable;
provided that, prior to the Effective Date or such other date as determined by
the Bankruptcy Court (such date to be in no event earlier than the date of the
entry of the Confirmation Order), the Debtors, with the written consent of the
Purchaser, may settle any dispute regarding the amount of any Cure Cost without
any further notice to any party or any action, order, or approval of the
Bankruptcy Court; provided, further, that notwithstanding anything to the
contrary herein, prior to or upon the entry of a Final Order resolving any
dispute and approving the assumption and assignment of such Executory Contract
or Unexpired Lease, the Debtors, in consultation with the Committee and
Supporting Noteholders, reserve the right to reject any Executory Contract or
Unexpired Lease which is subject to dispute, subject to the terms and conditions
of the Purchase Agreement.

Assumption and assignment of any Executory Contract or Unexpired Lease pursuant
to the Plan, or otherwise, shall result in the full satisfaction, compromise,
settlement, release, and discharge of any Claims or defaults, whether monetary
or nonmonetary, including defaults of provisions restricting the change in
control or ownership interest composition or other bankruptcy-related defaults,
arising under any assumed Executory Contract or Unexpired Lease at any time
prior to the effective date of assumption and/or assignment.

 

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E. Claims Based on Rejection of Executory Contracts and Unexpired Leases

Unless otherwise provided by an order of the Bankruptcy Court, any Proofs of
Claim based upon the rejection of the Debtors’ Executory Contracts or Unexpired
Leases pursuant to the Plan or otherwise, must be Filed with the Notice, Claims,
and Solicitation Agent no later than the later of (a) 30 days after the
effective date of rejection of such Executory Contract or Unexpired Lease and
(b) the Claims Bar Date established in the Chapter 11 Cases.

All Claims arising from the rejection by any Debtor of any Executory Contract or
Unexpired Lease pursuant to section 365 of the Bankruptcy Code shall be treated
as General Unsecured Claims and may be objected to in accordance with the
provisions of Article VI of the Plan and the applicable provisions of the
Bankruptcy Code and Bankruptcy Rules.

Any Holder of a Claim arising from the rejection of an Executory Contract or
Unexpired Lease for which a Proof of Claim was not timely Filed as set forth in
the paragraph above shall not (a) be treated as a Holder of a Claim hereunder,
(b) be permitted to vote to accept or reject the Plan, or (c) participate in any
distribution in the Chapter 11 Cases on account of such Claim, and such Claim
shall be deemed fully satisfied, released, settled, and compromised, and be
subject to the permanent injunction set forth in Article VIII.F of the Plan,
notwithstanding anything in the Schedules or a Proof of Claim to the contrary.

For the avoidance of doubt, the Purchaser, or an applicable Post-Effective-Date
Debtor Subsidiary, in accordance with the Purchase Agreement, shall be
responsible for any Allowed Claim for rejection damages under any Executory
Contract or Unexpired Lease rejected by the Debtors after the date of the Plan
Sponsor Agreement except for any Allowed Claim for rejection damages on account
of any Executory Contract or Unexpired Lease rejected after the date of the Plan
Sponsor Agreement without the consent of the Purchaser, which Allowed Claim
shall be a General Unsecured Claim against the applicable Debtor.

F. Preexisting Obligations to the Debtors Under Executory Contracts and
Unexpired Leases

The Debtors, the Reorganization Trust, and the Purchaser, as applicable, reserve
their right to assert that rejection of any Executory Contract or Unexpired
Lease pursuant to the Plan or otherwise shall not constitute a termination of
preexisting obligations owed to the Debtors under such contracts or leases.
Notwithstanding any nonbankruptcy law to the contrary, Post-Reorganization EME,
the Reorganization Trust, the Post-Effective-Date Debtor Subsidiaries, the
Post-Effective-Date Homer City Debtors, and the Purchaser, as applicable,
expressly reserve and do not waive any right to receive, or any continuing
obligation of a counterparty to provide, warranties or continued maintenance
obligations on goods previously purchased, or services previously received, by
the contracting Debtors from counterparties to rejected Executory Contracts or
Unexpired Leases.

G. PoJo Modifications and Assumption of PoJo Leases and Documents

Notwithstanding anything to the contrary in the Plan, on the Effective Date:
(1) the PoJo Lease Modifications shall be implemented; (2) MWG shall, subject to
the PoJo Lease Modifications, assume the PoJo Leases and Documents; (3) the
Reorganization Trust shall pay the Agreed PoJo Cure Amount and PoJo
Restructuring Fees in full in Cash; (4) following the payment of the Agreed PoJo
Cure Amount and the PoJo Restructuring Fees, the “Lessor Notes” (as defined in
the PoJo Leases and Documents) shall be deemed fully cured; (5) the PoJo EME
Guarantees shall each be terminated, released, extinguished, and of no further
force and effect (and shall be replaced as set forth herein); (6) the
Intercompany Notes shall each be terminated and extinguished and of no further
force and effect; (7) the Parent shall become the “Guarantor” under the PoJo
Leases and Documents; and (8) EME shall assign to the Parent, and the Parent
shall assume from EME all of the rights and obligations of EME under each of the
PoJo Tax Indemnity Agreements. For the avoidance of doubt, nothing in the Plan
shall relieve MWG of its operational and maintenance obligations under the PoJo
Leases and Documents, as modified.

 

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H. IBEW Local 15 Collective Bargaining Agreement

On the Effective Date, MWG shall assume the IBEW CBA. Nothing in the Plan
impairs any contractual obligations between International Brotherhood of
Electrical Workers Local 15 and the Debtors, including those in that certain
Memorandum of Understanding, dated as of January 9, 2014, among MWG, EME,
International Brotherhood of Electrical Workers Local 15, and the Purchaser
Parties.

I. Modifications, Amendments, Supplements, Restatements, or Other Agreements

Unless otherwise provided in the Plan, each assumed or assumed and assigned
Executory Contract or Unexpired Lease shall include all modifications,
amendments, supplements, restatements, or other agreements that in any manner
affect such Executory Contract or Unexpired Lease, and all Executory Contracts
and Unexpired Leases related thereto, if any, including all easements, licenses,
permits, rights, privileges, immunities, options, rights of first refusal, and
any other interests, unless any of the foregoing agreements has been previously
rejected or is rejected under the Plan.

Modifications, amendments, supplements, and restatements to prepetition
Executory Contracts and Unexpired Leases that have been executed by the Debtors
during the Chapter 11 Cases shall not be deemed to alter the prepetition nature
of the Executory Contract or Unexpired Lease, or the validity, priority, or
amount of any Claims that may arise in connection therewith.

J. Reservation of Rights

Neither the exclusion nor inclusion of any contract or lease in the Plan
Supplement, nor anything contained in the Plan, shall constitute an admission by
the Debtors that any such contract or lease is in fact an Executory Contract or
Unexpired Lease or that Post-Reorganization EME, the Reorganization Trust, the
Post-Effective-Date Debtor Subsidiaries, or the Post-Effective-Date Homer City
Debtors, as applicable, have any liability thereunder. In the event of a dispute
regarding whether a contract or lease is or was executory or unexpired at the
time of assumption or rejection, the Reorganization Trust, the
Post-Effective-Date Debtor Subsidiaries, or the Post-Effective-Date Homer City
Debtors, as applicable, shall have 90 days following entry of a Final Order
resolving such dispute to alter the treatment of such contract or lease as
otherwise provided herein.

K. Nonoccurrence of Effective Date

In the event that the Effective Date does not occur, the Bankruptcy Court shall
retain jurisdiction with respect to any consensual request to extend the
deadline for assuming or rejecting Unexpired Leases pursuant to section
365(d)(4) of the Bankruptcy Code, notwithstanding anything to the contrary in
the Plan or otherwise.

ARTICLE VI.

PROVISIONS GOVERNING DISTRIBUTIONS

A. Timing and Calculation of Amounts to Be Distributed

Except as otherwise provided in the Plan, on the Effective Date (or if a Claim
is not an Allowed Claim on the Effective Date, on the date that such a Claim
becomes an Allowed Claim, or as soon as reasonably practicable thereafter), each
Holder of an Allowed Claim against the Debtors shall receive the full amount of
the distributions that the Plan provides for Allowed Claims in the applicable
Class from the Disbursing Agent, the Purchaser, or the applicable
Post-Effective-Date Debtor Subsidiary, as applicable. In the event that any
payment or act under the Plan is required to be made or performed on a date that
is not a Business Day, then the making of such payment or the performance of
such act may be completed on the next succeeding Business Day, but shall be
deemed to have been completed as of the required date. If and to the extent that
there are Disputed Claims, distributions on account of any such Disputed Claims
shall be made pursuant to the provisions set forth in Article VII of the Plan.
Holders of Allowed Claims shall be entitled to all dividends, accruals, and any
other distributions on, and proceeds of, the distributions provided for herein,
from and after the Effective Date, regardless of whether such distributions (or
the proceeds thereof) are delivered on or at any time after the Effective Date.
Notwithstanding anything to the contrary

 

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herein, no Holder of an Allowed Claim shall, on account of such Allowed Claim,
receive a distribution in excess of the Allowed amount of such Claim plus any
postpetition interest on such Claim to the extent payable in accordance with the
Plan. The New Interests shall be deemed to be issued as of the Effective Date to
the Holders of Claims entitled to receive such securities or instruments
hereunder without the need for further action by any Disbursing Agent or the
Reorganization Trust, including the issuance and/or delivery of any certificate
evidencing any such shares, units, or interests, as applicable.

Until the first anniversary of the Effective Date, the Disbursing Agent shall
make distributions under the Plan at least once each quarter. Thereafter, the
Disbursing Agent shall make distributions at such times as determined by the
Reorganization Trust Oversight Board in its reasonable judgment.

B. Distribution of Net Sale Proceeds

On the Effective Date, or as soon as reasonably practicable thereafter, the
Disbursing Agent shall distribute all shares of the common stock of the Parent
received upon consummation of the Sale Transaction to Holders of Allowed Class
A4 Claims and Allowed Class A5 Claims as of the Effective Date. The Disbursing
Agent shall determine the Pro Rata allocation of shares of common stock of the
Parent to such Holders by assigning a Cash value to each share based on the
Parent Common Stock Effective Date Market Value.

Notwithstanding any other provision in this Plan to the contrary, no fraction of
a share of the common stock of the Parent will be issued and all issuances of
the common stock of the Parent will be rounded down to the nearest whole number
of shares of the common stock of the Parent. Any Holder of a Claim who would
otherwise be entitled to receive a fraction of a share of the common stock of
the Parent (after aggregating all fractional shares of the common stock of the
Parent issuable to such Holder) shall, in lieu of such fraction of a share, be
paid in Cash the dollar amount (rounded up to the nearest whole cent) determined
by multiplying such fraction by the the Parent Common Stock Effective Date
Market Value.

C. Distributions on Account of Obligations of Multiple Debtors

For all purposes associated with distributions under the Plan, all guarantees by
any Debtor of the obligations of any other Debtor, as well as any joint and
several liability of any Debtor with respect to any other Debtor, shall be
deemed eliminated so that any obligation that could otherwise be asserted
against more than one Debtor shall result in a single distribution under the
Plan. Any such Claims against EME and any Debtor Subsidiaries shall receive the
treatment set forth in Article III.B.4 of the Plan. Any such Claims shall be
released and discharged pursuant to Article VIII.G of the Plan and shall be
subject to all potential objections, defenses, and counterclaims, and to
estimation pursuant to section 502(c) of the Bankruptcy Code; provided that, for
the avoidance of doubt, this shall not affect the obligation of each and every
Debtor to pay U.S. Trustee Fees until such time as a particular case is closed,
dismissed, or converted.

D. Distributions Generally

All distributions under the Plan that are to be made on the Effective Date shall
be made by the Disbursing Agent, the Purchaser, or the Post-Effective-Date
Debtor Subsidiary, as applicable, unless otherwise specified herein. Neither the
Disbursing Agent nor the Purchaser nor any Post-Effective-Date Debtor Subsidiary
shall be required to give any bond or surety or other security for the
performance of its duties. Notwithstanding anything to the contrary in the Plan,
all distributions of the common stock of the Parent shall be effectuated on the
Effective Date or as soon as reasonably practicable thereafter and no common
stock of the Parent shall be reserved under the Plan.

E. Rights and Powers of Disbursing Agent

 

  1. Powers of the Disbursing Agent

The Disbursing Agent shall be empowered to, as applicable: (a) take all actions
and execute all agreements, instruments, and other documents necessary to
perform its duties under the Plan; (b) make all distributions contemplated under
the Plan; (c) employ professionals to represent it with respect to its
responsibilities;

 

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and (d) exercise such other powers as may be vested in the Disbursing Agent by
order of the Bankruptcy Court, pursuant to the Plan, or as deemed by the
Disbursing Agent to be necessary and proper to implement the provisions hereof.

The Disbursing Agents and the EME Senior Notes Trustee, to the extent it
provides services related to distributions pursuant to the Plan, shall only be
required to act and make distributions in accordance with the terms of the Plan
and shall have no (x) liability for actions taken in accordance with the Plan or
in reliance upon information provided to them in accordance with the Plan, or
(y) obligation or liability for distributions under the Plan to any party who
does not hold an Allowed Claim at the time of distribution or who does not
otherwise comply with the terms of the Plan.

 

  2. Expenses Incurred On or After the Effective Date

Except as otherwise ordered by the Bankruptcy Court, the amount of any
reasonable fees and expenses incurred by the Disbursing Agent after the
Effective Date (including taxes) and any reasonable compensation and expense
reimbursement claims (including reasonable attorney fees and expenses) made by
the Disbursing Agent shall be paid in Cash by the Reorganization Trust.

To the extent the EME Senior Notes Indenture Trustee provides services related
to distributions pursuant to the Plan, it shall be entitled to reasonable and
customary compensation from the Reorganization Trust for such services and
reimbursement for reasonable and customary expenses incurred in connection with
such services.

F. Distributions on Account of Claims Allowed After the Effective Date

 

  1. Payments and Distributions on Disputed Claims

Distributions made after the Effective Date to Holders of Disputed Claims that
are not Allowed Claims as of the Effective Date, but which later become Allowed
Claims, shall be deemed to have been made on the Effective Date.

 

  2. Special Rules for Distributions to Holders of Disputed Claims

Notwithstanding any provision otherwise in the Plan and except as may be agreed
to by the Reorganization Trust, the Post-Effective-Date Debtor Subsidiaries, or
the Post-Effective-Date Homer City Debtors, as applicable, on the one hand, and
the Holder of a Disputed Claim, on the other hand, no partial payments and no
partial distributions shall be made with respect to any Disputed Claim until the
Disputed Claim has become an Allowed Claim or has otherwise been resolved by
settlement or Final Order.

G. Delivery of Distributions and Undeliverable or Unclaimed Distributions

 

  1. Record Date for Distributions

On the Distribution Record Date, the Claims Register shall be closed and when
making distributions on or after the Effective Date, the Disbursing Agent shall
be authorized and entitled to recognize only those record Holders listed on the
Claims Register as of the close of business on the Distribution Record Date. The
Debtors, the Reorganization Trust, and the EME Senior Notes Indenture Trustee
shall have no obligation to recognize any transfer of any such Claims occurring
after the close of business on the Distribution Record Date and shall instead be
entitled to recognize and deal for all purposes under the Plan with only those
holders of record as of the close of business on the Distribution Record Date.

 

  2. Delivery of Distributions in General

Except as otherwise provided herein, the Disbursing Agent, the Purchaser, or the
Post-Effective-Date Debtor Subsidiary, as applicable, shall make distributions
to Holders of Allowed Claims at the address for each such Holder as indicated on
the Debtors’ books and records as of the date of any such distribution; provided
that, except

 

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as expressly provided in the Purchase Agreement or the Plan, the manner of such
distributions shall be determined at the discretion of the Disbursing Agent, the
Purchaser, or the Post-Effective-Date Debtor Subsidiary, as applicable; and
provided, further, that the address for each Holder of an Allowed Claim shall be
deemed to be the address set forth in any Proof of Claim Filed by that Holder.
If a Holder holds more than one Claim in any one Class, all Claims of the Holder
will be aggregated into one Claim and one distribution will be made with respect
to the aggregated Claim.

Distributions of the Net Sale Proceeds to Holders of EME Senior Notes Claims
shall (a) be made by the Disbursing Agent to the EME Senior Notes Indenture
Trustee for the benefit of Holders of EME Senior Notes Claims and (b) be deemed
completed when made by the Disbursing Agent to the EME Senior Notes Indenture
Trustee. The EME Senior Notes Indenture Trustee shall not be required to give
any bond, surety, or other security for the performance of its duties with
respect to such Distributions. Distributions of New Interests to Holders of EME
Senior Notes Claims hereunder, if any, shall not be made to the EME Senior Notes
Trustee, but shall be distributed as provided under the Plan directly to the
Holders of the EME Senior Notes Claims or any applicable Entity other than the
EME Senior Notes Indenture Trustee receiving such distribution on such Holders’
behalf.

Prior to the distribution of New Interests hereunder, the recipient of such New
Interests shall furnish to the transfer agent identified by the Debtors such
identification and tax information as may be required by the Debtors.

 

  3. De Minimis Distributions; Minimum Distributions

Notwithstanding any other provision in the Plan to the contrary, the Disbursing
Agent shall not be required to make partial distributions or distributions of
fractions of New Interests, and any such fractions shall be deemed to be zero.

Notwithstanding any other provision in the Plan to the contrary, no fraction of
a share of the common stock of the Parent will be issued and all issuances of
the common stock of the Parent will be rounded down to the nearest whole number
of shares of the common stock of the Parent. Any Holder of a Claim who would
otherwise be entitled to receive a fraction of a share of the common stock of
the Parent (after aggregating all fractional shares of the common stock of the
Parent issuable to such Holder) shall, in lieu of such fraction of a share, be
paid in Cash the dollar amount (rounded up to the nearest whole cent) determined
by multiplying such fraction by the the Parent Common Stock Effective Date
Market Value.

No distribution of New Interests or common stock of the Parent or Cash payment
valued at less than $250.00, in the reasonable discretion of the Disbursing
Agent, the Purchaser, or the Post-Effective-Date Debtor Subsidiary, as
applicable, shall be made to a Holder of an Allowed Claim that is not an Assumed
Liability on account of such Allowed Claim.

 

  4. Undeliverable Distributions and Unclaimed Property

In the event that any distribution to any Holder is returned as undeliverable,
no distribution to such Holder shall be made unless and until the Disbursing
Agent, the Purchaser, or the applicable Post-Effective-Date Debtor Subsidiary,
as applicable, has determined the then current address of such Holder, at which
time such distribution shall be made to such Holder without interest; provided
that such distributions shall be deemed unclaimed property under section 347(b)
of the Bankruptcy Code at the expiration of 12 months from the Effective Date.
After such date, notwithstanding any applicable federal or state escheat,
abandoned, or unclaimed property laws to the contrary, all unclaimed property or
interests in property shall revert to the Reorganization Trust, the Purchaser,
or the applicable Post-Effective-Date Debtor Subsidiary, as applicable, and the
Claim of any Holder to such property or interest in property shall be released,
settled, compromised, and forever barred.

 

  5. Manner of Payment Pursuant to the Plan

Any payment in Cash to be made pursuant to the Plan shall be made at the
election of the Disbursing Agent, the Purchaser, or the applicable
Post-Effective-Date Debtor Subsidiary, as applicable, by check or by wire
transfer.

 

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H. Compliance with Tax Requirements/Allocations

In connection with the Plan, to the extent applicable, the Disbursing Agent, the
Purchaser, or the Post-Effective-Date Debtor Subsidiary, as applicable, shall
comply with all tax withholding and reporting requirements imposed on it by any
Governmental Unit, and all distributions pursuant hereto shall be subject to
such withholding and reporting requirements. Notwithstanding any provision in
the Plan to the contrary, the Disbursing Agent, the Purchaser, or the
Post-Effective-Date Debtor Subsidiary, as applicable, shall be authorized to
take all actions necessary or appropriate to comply with such withholding and
reporting requirements, including liquidating a portion of the distribution to
be made under the Plan to generate sufficient funds to pay applicable
withholding taxes, withholding distributions pending receipt of information
necessary to facilitate such distributions, or establishing any other mechanisms
they believe are reasonable and appropriate.

Distributions in respect of Allowed Claims shall be allocated first to the
principal amount of such Claims (as determined for federal income tax purposes)
and then, to the extent the consideration exceeds the principal amount of the
Claims, to any portion of such Claims for accrued but unpaid interest.

I. Claims Paid or Payable by Third Parties

 

  1. Claims Paid by Third Parties

The Debtors and, on and after the Effective Date, the Reorganization Trust, the
Post-Effective-Date Homer City Debtors, the Post-Effective-Date Debtor
Subsidiaries, and the Purchaser, as applicable, after the Effective Date, shall
reduce in full a Claim, and such Claim shall be disallowed without a Claims
objection having to be Filed and without any further notice to or action, order,
or approval of the Bankruptcy Court, to the extent that the Holder of such Claim
receives payment in full on account of such Claim from a Person or Entity that
is not a Debtor as of the Effective Date. To the extent a Holder of a Claim
receives a distribution on account of such Claim and receives payment from a
party that is not a Debtor on account of such Claim, such Holder shall, within
two weeks of receipt thereof, repay or return the distribution to the
Reorganization Trust, the Post-Effective-Date Homer City Debtors, the
Post-Effective-Date Debtor Subsidiaries, or the Purchaser, as applicable, to the
extent the Holder’s total recovery on account of such Claim from the third-party
and under the Plan exceeds the Allowed amount of such Claim as of the date of
any such distribution under the Plan.

 

  2. Claims Payable by Third Parties

No distributions under the Plan shall be made on account of an Allowed Claim
that is payable pursuant to one of the Debtors’ insurance policies until the
Holder of such Allowed Claim has exhausted all remedies with respect to such
insurance policy. To the extent that one or more of the Debtors’ insurers agrees
to satisfy in full a Claim (if and to the extent adjudicated by a court of
competent jurisdiction), then immediately upon such insurers’ agreement, such
Claim may be expunged without a Claims objection having to be Filed and without
any further notice to or action, order, or approval of the Bankruptcy Court.

 

  3. Applicability of Insurance Policies

Except as otherwise provided in the Plan, distributions to Holders of Allowed
Claims shall be in accordance with the provisions of any applicable insurance
policy. Notwithstanding anything to the contrary contained herein (including
Article VIII of the Plan), other than as provided in the EIX Settlement
Agreement, nothing contained in the Plan shall constitute or be deemed a
release, settlement, satisfaction, compromise, or waiver of any Cause of Action
that the Debtors or any other Entity may hold against any other Entity,
including insurers, under any policies of insurance or applicable indemnity, nor
shall anything contained herein constitute or be deemed a waiver by such
insurers of any defenses, including coverage defenses, held by such insurers.

 

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ARTICLE VII.

PROCEDURES FOR RESOLVING CONTINGENT UNLIQUIDATED, AND DISPUTED CLAIMS

A. Resolution of Disputed Claims

 

  1. Allowance of Claims

On or after the Effective Date, the Reorganization Trust, the
Post-Effective-Date Homer City Debtors, the Post-Effective-Date Debtor
Subsidiaries, and the Purchaser (solely with respect to Assumed Liabilities), as
applicable, shall have and shall retain any and all rights and defenses that the
Debtors had with respect to any Claim, except with respect to any Claim Allowed
as of the Effective Date. Except as expressly provided in the Plan or in any
order entered in the Chapter 11 Cases prior to the Effective Date (including the
Confirmation Order), no Claim shall become an Allowed Claim unless and until
such Claim is deemed Allowed under the Plan or the Bankruptcy Code or the
Bankruptcy Court has entered a Final Order, including the Confirmation Order, in
the Chapter 11 Cases allowing such Claim.

 

  2. Prosecution of Objections to Claims

On and after the Effective Date, the Reorganization Trust, the
Post-Effective-Date Homer City Debtors, the Post-Effective-Date Debtor
Subsidiaries, and the Purchaser (solely with respect to Assumed Liabilities), as
applicable, shall have the exclusive authority to File objections to Claims,
settle, compromise, withdraw, or litigate to judgment objections to any and all
Claims, regardless of whether such Claims are in a Class or otherwise. From and
after the Effective Date, the Reorganization Trust, the Post-Effective-Date
Homer City Debtors, the Post-Effective-Date Debtor Subsidiaries, and the
Purchaser, as applicable, may settle or compromise any Disputed Claim without
any further notice to or action, order or approval of the Bankruptcy Court.

 

  3. Claims Estimation

The Debtors, the Committee, Supporting Noteholders, or Purchaser (solely with
respect to Assumed Liabilities), prior to the Effective Date, and the
Reorganization Trust, the Post-Effective-Date Debtor Subsidiaries, the
Post-Effective-Date Homer City Debtors, and the Purchaser, as applicable, on and
after the Effective Date, may, at any time, request that the Bankruptcy Court
estimate (a) any Disputed Claim pursuant to applicable law and (b) any
contingent or unliquidated Claim pursuant to applicable law, including section
502(c) of the Bankruptcy Code, regardless of whether the Debtors have previously
objected to such Claim or whether the Bankruptcy Court has ruled on any such
objection, and the Bankruptcy Court shall retain jurisdiction under 28 U.S.C. §§
157 and 1334 to estimate any Disputed Claim, contingent Claim, or unliquidated
Claim, including during the litigation concerning any objection to any Claim or
during the pendency of any appeal relating to any such objection.
Notwithstanding any provision otherwise in the Plan, a Claim that has been
expunged from the Claims Register but that is subject to appeal or has not been
the subject of a Final Order, shall be deemed to be estimated at zero dollars,
unless otherwise ordered by the Bankruptcy Court. In the event that the
Bankruptcy Court estimates any Disputed Claim, contingent Claim, or unliquidated
Claim, that estimated amount shall constitute the Allowed amount of such Claim.
Notwithstanding section 502(j) of the Bankruptcy Code, in no event shall any
Holder of a Claim that has been estimated pursuant to section 502(c) of the
Bankruptcy Code or otherwise be entitled to seek reconsideration of such
estimation unless such Holder has Filed a motion requesting the right to seek
such reconsideration on or before 14 days after the date on which such Claim is
estimated. All of the aforementioned Claims and objection, estimation, and
resolution procedures are cumulative and not exclusive of one another. Claims
may be estimated and subsequently compromised, settled, withdrawn, or resolved
by any mechanism approved by the Bankruptcy Court.

B. Disallowance of Claims

All Claims of any Entity from which property is sought by the Debtors under
section 542, 543, 550, or 553 of the Bankruptcy Code or that is an alleged
transferee of a transfer that is avoidable under section 522(f), 522(h), 544,
545, 547, 548, 549, or 724(a) of the Bankruptcy Code shall be disallowed until
and unless such Entity or

 

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transferee has turned over such property to the Debtors, the Reorganization
Trust, the Post-Effective-Date Debtor Subsidiaries, or the Post-Effective-Date
Homer City Debtors, as applicable.

EXCEPT AS OTHERWISE AGREED BY THE REORGANIZATION TRUST, THE POST-EFFECTIVE-DATE
DEBTOR SUBSIDIARIES, THE POST-EFFECTIVE-DATE HOMER CITY DEBTORS, OR THE
PURCHASER (SOLELY WITH RESPECT TO ASSUMED LIABILITIES), AS APPLICABLE, HOLDERS
OF CLAIMS ON ACCOUNT OF ANY AND ALL PROOFS OF CLAIM FILED AFTER THE CLAIMS BAR
DATE SHALL NOT RECEIVE ANY DISTRIBUTIONS ON ACCOUNT OF SUCH CLAIMS, UNLESS SUCH
PROOF OF CLAIM IS ALLOWED BY A FINAL ORDER OF THE BANKRUPTCY COURT.

C. Amendments to Claims

On or after the Effective Date, except as provided in Article II.A or Article
V.E of the Plan, a Claim may not be amended without the prior authorization of
the Bankruptcy Court, the Reorganization Trust, the Post-Effective-Date Debtor
Subsidiaries, the Post-Effective-Date Homer City Debtors, or the Purchaser
(solely with respect to Assumed Liabilities), as applicable, and any such
unauthorized new or amended Claim Filed shall be deemed disallowed and expunged
without any further notice to or action, order, or approval of the Bankruptcy
Court.

ARTICLE VIII.

SETTLEMENT, RELEASE, INJUNCTION, AND RELATED PROVISIONS

A. Discharge of Claims and Termination of Interests; Compromise and Settlement
of Claims, Interests, and Controversies

Pursuant to section 1141(d) of the Bankruptcy Code, and except as otherwise
specifically provided in the Plan or in any contract, instrument, or other
agreement or document created pursuant to the Plan, the distributions, rights,
and treatment that are provided in the Plan shall be in complete satisfaction,
compromise, settlement, release, and discharge, effective as of the Effective
Date, of all debt (as such term is defined in section 101 of the Bankruptcy
Code) that arose before the Effective Date, any debts of any kind specified in
sections 502(g), 502(h), or 502(i) of the Bankruptcy Code, and the rights and
Interests of any Holders of Interests whether or not: (1) a Proof of Claim based
on such debt or Interest is Filed; (2) a Claim or Interest based upon such debt
is Allowed pursuant to section 502 of the Bankruptcy Code; or (3) the Holder of
such a Claim or Interest has accepted the Plan. The Confirmation Order shall be
a judicial determination of the discharge of all Claims and Interests subject to
the Effective Date occurring, except as provided for under section 1141(d)(6) of
the Bankruptcy Code.

Pursuant to Bankruptcy Rule 9019 and in consideration for the distributions and
other benefits provided pursuant to the Plan, the provisions of the Plan shall
constitute a good faith compromise of all Claims, Interests, and controversies
relating to the contractual, legal, and subordination rights that a Holder of a
Claim or Interest may have with respect to any Allowed Claim or Interest, or any
distribution to be made on account of such Allowed Claim or Interest. The entry
of the Confirmation Order shall constitute the Bankruptcy Court’s approval of
the compromise or settlement of all such Claims, Interests, and controversies,
as well as a finding by the Bankruptcy Court that such compromise or settlement
is in the best interests of the Debtors, their Estates, and Holders of Claims
and Interests and is fair, equitable, and reasonable. In accordance with the
provisions of the Plan, pursuant to Bankruptcy Rule 9019, without any further
notice to or action, order, or approval of the Bankruptcy Court, after the
Effective Date, the Reorganization Trust, the Post-Effective-Date Debtor
Subsidiaries, the Post-Effective-Date Homer City Debtors, and the Purchaser, as
applicable, may compromise and settle Claims against the Debtors and their
Estates and Causes of Action, including, solely with respect to the
Reorganization Trust, against other Entities.

B. Subordinated Claims

The allowance, classification, and treatment of all Allowed Claims and Interests
and the respective distributions and treatments under the Plan take into account
and conform to the relative priority and rights of the Claims and Interests in
each Class in connection with any contractual, legal, and equitable
subordination rights

 

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relating thereto, whether arising under general principles of equitable
subordination, section 510(b) of the Bankruptcy Code, or otherwise. Pursuant to
section 510 of the Bankruptcy Code, the Reorganization Trust, the
Post-Effective-Date Debtor Subsidiaries, and the Post-Effective-Date Homer City
Debtors, as applicable, reserve the right to re-classify any Allowed Claim or
Interest in accordance with any contractual, legal, or equitable subordination
relating thereto.

C. Debtor Release

Notwithstanding anything contained herein to the contrary, on the Confirmation
Date and effective as of the Effective Date and to the fullest extent authorized
by applicable law, for the good and valuable consideration provided by each of
the Released Parties, the adequacy of which is hereby confirmed, the Released
Parties are deemed released and discharged by the Debtors and their estates from
any and all claims, interests, obligations, rights, suits, damages, causes of
action, remedies, and liabilities whatsoever, including any derivative claims,
asserted on behalf of any Debtor, whether known or unknown, foreseen or
unforeseen, existing or hereinafter arising, in law, equity, or otherwise, that
the Debtors, their estates, or affiliates would have been legally entitled to
assert in their own right (whether individually or collectively) or on behalf of
the holder of any claim or interest or other entity, based on or relating to, or
in any manner arising from, in whole or in part, the Debtors, the Debtors’
restructuring, the Chapter 11 Cases, the purchase, sale, or rescission of the
purchase or sale of any security of the Debtors, the subject matter of, or the
transactions or events giving rise to, any claim or interest that is treated in
the Plan, the business or contractual arrangements between any Debtor and any
Released Party, the restructuring of claims and interests prior to or during the
Chapter 11 Cases, the Transaction Support Agreement, the negotiation,
formulation, or preparation of the Plan, the Disclosure Statement, the Plan
Supplement, the Plan Sponsor Agreement, the EIX Settlement, or any related
agreements, instruments, or other documents, the subject matter of the EIX
Litigation Claims, or upon any other act or omission, transaction, agreement,
event, or other occurrence taking place on or before the Effective Date, other
than claims or liabilities arising out of or relating to any act or omission of
a Released Party that constitutes actual fraud, willful misconduct, or gross
negligence. Notwithstanding anything to the contrary in the foregoing, the
release set forth above does not release any obligations arising on or after the
Effective Date (1) of any party under the Plan or any document, instrument, or
agreement (including those set forth in the Plan Supplement) executed to
implement the Plan (2) under the PoJo Leases and Documents (as modified by the
PoJo lease Modifications), or (3) under the EIX Settlement Agreement or the EIX
Settlement Ancillary Documents.

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s
approval, pursuant to Bankruptcy Rule 9019, of this Article VIII.C of the Plan,
which includes by reference each of the related provisions and definitions
contained in the Plan and shall constitute the Bankruptcy Court’s finding that
this Article VIII.C of the Plan is: (1) in exchange for the good and valuable
consideration provided by the Released Parties; (2) a good faith settlement and
compromise of the Claims released by this Article VIII.C of the Plan; (3) in the
best interests of the Debtors, their Estates, and all Holders of Claims and
Interests; (4) fair, equitable, and reasonable; (5) given and made after due
notice and opportunity for hearing; and (6) a bar to any of the Reorganization
Trust, the Post-Effective-Date Debtor Subsidiaries, the Post-Effective-Date
Homer City Debtors, or the Debtors’ Estates asserting any Claim or Cause of
Action released pursuant to this Article VIII.C of the Plan.

D. Release by Holders of Claims and Interests

Notwithstanding anything contained herein to the contrary, on the Confirmation
Date and effective as of the Effective Date and to the fullest extent authorized
by applicable law, the Releasing Parties are deemed to have released and
discharged the Debtors and their Estates and the Released Parties from any and
all claims, interests, obligations, rights, suits, damages, causes of action,
remedies, and liabilities whatsoever, including any derivative claims, asserted
on behalf of any Debtor, whether known or unknown, foreseen or unforeseen,
existing or hereinafter arising, in law, equity, or otherwise, that such entity
would have been legally entitled to assert (whether individually or
collectively), based on or relating to, or in any manner arising from, in whole
or in part, the Debtors, the Debtors’ restructuring, the Chapter 11 Cases, the
purchase, sale, or rescission of the purchase or sale of any security of the
Debtors, the subject matter of, or the transactions or events giving rise to,
any claim or interest that is treated in the Plan, the business or

 

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contractual arrangements between any Debtor and any Released Party, the
restructuring of claims and interests prior to or in the Chapter 11 Cases, the
Transaction Support Agreement, the negotiation, formulation, or preparation of
the Plan, the Disclosure Statement, the Plan Supplement, the Plan Sponsor
Agreement, the EIX Settlement, or any related agreements, instruments, or other
documents, the subject matter of the EIX Litigation Claims, or upon any other
act or omission, transaction, agreement, event, or other occurrence taking place
on or before the Effective Date, other than claims or liabilities arising out of
or relating to any act or omission of a Released Party that constitutes actual
fraud, willful misconduct, or gross negligence. Notwithstanding anything to the
contrary in the foregoing, the release set forth above does not release any
obligations arising on or after the Effective Date (1) of any party under the
Plan or any document, instrument, or agreement (including those set forth in the
Plan Supplement) executed to implement the Plan, (2) under the PoJo Leases and
Documents (as modified by the PoJo Lease Modifications), or (3) under the EIX
Settlement Agreement or the EIX Settlement Ancillary Documents.

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s
approval, pursuant to Bankruptcy Rule 9019, of this Article VIII.D of the Plan,
which includes by reference each of the related provisions and definitions
contained in the Plan and shall constitute the Bankruptcy Court’s finding that
this Article VIII.D of the Plan is: (1) in exchange for the good and valuable
consideration provided by the Released Parties; (2) a good faith settlement and
compromise of the Claims released by this Article VIII.D of the Plan; (3) in the
best interests of the Debtors, their Estates, and all Holders of Claims and
Interests; (4) fair, equitable and reasonable; (5) given and made after due
notice and opportunity for hearing; and (6) a bar to any of the Entities subject
to this Article VIII.D of the Plan asserting any claim or cause of action
released pursuant to this Article VIII.D of the Plan.

E. Exculpation

Notwithstanding anything contained herein to the contrary, on the Confirmation
Date and effective as of the Effective Date and to the fullest extent authorized
by applicable law, none of the Exculpated Parties, shall have or incur any
liability for any claim, cause of action, or other assertion of liability for
any act taken or omitted to be taken in connection with, or arising out of, the
Chapter 11 Cases, the Transaction Support Agreement, the negotiation,
formulation, or preparation of the Plan or any contract, instrument, document,
or other agreement entered into pursuant thereto, or any distributions made
pursuant to or in accordance with the Plan, and the effectuation of the
Post-Effective-Date Reorganization Trust Matters; provided that the foregoing
shall not affect the liability of any person that otherwise would result from
any such act or omission to the extent such act or omission is determined by a
Final Order to have constituted actual fraud, willful misconduct, or gross
negligence.

F. Injunction

Notwithstanding anything contained herein to the contrary, on the Confirmation
Date and effective as of the Effective Date and to the fullest extent authorized
by applicable law, all Entities who have held, hold, or may hold Claims or
Interests that have been released pursuant to the Plan, compromised and settled
pursuant to the Plan, or are exculpated pursuant to the Plan, are permanently
enjoined, from and after the Effective Date, from taking any of the following
actions against, as applicable, the Debtors or the Released Parties or their
respective property: (1) commencing or continuing in any manner any action or
other proceeding of any kind on account of or in connection with or with respect
to any such released, compromised, settled, or exculpated claim or interest;
(2) enforcing, attaching, collecting, or recovering by any manner or means any
judgment, award, decree, or order against such entities on account of or in
connection with or with respect to any such released, compromised, settled, or
exculpated claims or interests; (3) creating, perfecting, or enforcing any
encumbrance of any kind against such entities or the property or the Estates of
such entities on account of or in connection with or with respect to any such
released, compromised, settled, or exculpated claims or interests; (4) asserting
any right of setoff, subrogation, or recoupment of any kind against any
obligation due from such entities or against the property of such entities on
account of or in connection with or with respect to any such released,
compromised, settled, or exculpated claims or interests unless such entity has
timely filed a proof of claim with the Bankruptcy Court preserving such right of
setoff, subrogation, or recoupment; and (5) commencing or continuing in any
manner any action or other proceeding of any kind on account of or in connection
with or with respect to any such released,

 

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compromised, settled, or exculpated claims or interests. Any Entity receiving a
distribution under the Plan on account of any Claim shall be deemed to have
waived any right to such Claim as against any third party and shall be enjoined
from pursuing such Claim as against any Entity other than the Reorganization
Trust (in the case of any Claim that is not an Assumed Liability or a Settlement
Assumed Liability) or the Purchaser or the applicable Post-Effective-Date Debtor
Subsidiary (in the case of any Claim that is an Assumed Liability) or EIX (in
the case of any Claim that is a Settlement Assumed Liability), as the case may
be; provided that the foregoing injunction does not enjoin any actions against
any Released Party to enforce obligations arising on or after the Effective Date
(1) of any party under the Plan or any document, instrument, or agreement
(including those set forth in the Plan Supplement) executed to implement the
Plan, (2) under the PoJo Leases and Documents (as modified by the PoJo Lease
Modifications), or (3) under the EIX Settlement Agreement or the EIX Settlement
Ancillary Documents.

G. Purchaser and EIX Released Parties Injunctions

In addition to the injunction set forth under Article VIII.F hereof, on the
Confirmation Date and effective as of the Effective Date, all Excluded
Liabilities and claims or liabilities arising from (1) information furnished to
the Purchaser Parties by EME for use in the registration statement of the common
stock of the Parent issued in connect with the Sale Transaction or any amendment
or supplement thereto or (2) the financial statements of EME contained or
incorporated by reference in such registration statement or any amendment or
supplement thereto that may otherwise be asserted against the Purchaser Parties,
any Acquired Company, or any of their respective property shall be permanently
released and enjoined pursuant to the Plan and any such Excluded Liabilities
shall be paid or treated pursuant to the terms of the Plan.

In addition to the injunction set forth under Article VIII.F hereof, on the
Confirmation Date and effective as of the Effective Date, all Claims or other
Causes of Action that may otherwise be asserted against the EIX Released Parties
or their respective property (other than (1) Claims or other liabilities against
the EIX Released Parties arising under the EIX Settlement Agreement and the EIX
Settlement Ancillary Documents, (2) the Commercial Relationship Claims (as
defined in the EIX Settlement Agreement), and (3) the Settlement Assumed
Liabilities) shall be permanently released and enjoined pursuant to the Plan,
and any such Claims or Causes of Action shall be paid or treated pursuant to the
terms of the Plan.

H. Waiver of Statutory Limitations on Releases

Each Releasing Party in each of the releases contained in the Plan (including
under Article VIII of the Plan) expressly acknowledges that although ordinarily
a general release may not extend to claims which the Releasing Party does not
know or suspect to exist in his favor, which if known by it may have materially
affected its settlement with the party released, each Releasing Party has
carefully considered and taken into account in determining to enter into the
above releases the possible existence of such unknown losses or claims. Without
limiting the generality of the foregoing, each Releasing Party expressly waives
any and all rights conferred upon it by any statute or rule of law which
provides that a release does not extend to claims which the claimant does not
know or suspect to exist in its favor at the time of executing the release,
which if known by it may have materially affected its settlement with the
released party, including the provisions of California Civil Code Section 1542.
The releases contained in Article VIII of the Plan are effective regardless of
whether those released matters are presently known, unknown, suspected or
unsuspected, foreseen or unforeseen.

I. Setoffs

Except as otherwise provided herein, the Debtors, the Reorganization Trust, the
Post-Effective-Date Debtor Subsidiaries, the Post-Effective-Date Homer City
Debtors, and the Purchaser, as applicable pursuant to the Bankruptcy Code
(including section 553 of the Bankruptcy Code), applicable nonbankruptcy law, or
as may be agreed to by the Holder of a Claim or Interest, may set off against
any Allowed Claim or Interest (which setoff shall be made against the Allowed
Claim or Interest, not against any distributions to be made under the Plan with
respect to such Allowed Claim or Interest), any Claims, rights, and Causes of
Action of any nature that any Debtor may hold against the Holder of such Allowed
Claim or Interest, to the extent such Claims, rights, or Causes of Action
against such Holder have not been otherwise compromised or settled on or prior
to the Effective Date (whether pursuant to

 

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the Plan or otherwise), and any distribution to which a Holder is entitled under
the Plan shall be made on account of the Claim or Interest, as reduced after
application of the setoff described above. In no event shall any Holder of any
Claim or Interest be entitled to set off any Claim or Interest against any
Claim, right, or Cause of Action of the Debtors unless such Holder obtains entry
of a Final Order entered by the Bankruptcy Court authorizing such setoff or
unless such setoff is otherwise agreed to in writing by the Debtors, the
Reorganization Trust, the Post-Effective-Date Debtor Subsidiaries, the
Post-Effective-Date Homer City Debtors, or the Purchaser, as applicable, and a
Holder of a Claim or Interest; provided that, where there is no written
agreement between the Debtors, the Reorganization Trust, the Post-Effective-Date
Debtor Subsidiaries, the Post-Effective-Date Homer City Debtors, or the
Purchaser, as applicable and a holder of a claim authorizing such setoff nothing
herein shall prejudice or be deemed to have prejudiced the rights of the
Debtors, the Reorganization Trust, the Post-Effective-Date Debtor Subsidiaries,
the Post-Effective-Date Homer City Debtors, or the Purchaser to assert that any
Holder’s setoff rights were required to have been asserted by motion to the
Bankruptcy Court prior to the Effective Date. For the avoidance of doubt, EIX
shall not be entitled to set off any claim against any Debtor except as provided
in the EIX Settlement unless such setoff is otherwise agreed to in writing by
the Reorganization Trust.

J. Withdrawal of EIX Proofs of Claim

The EIX Proofs of Claim shall be treated in a manner consistent with the EIX
Settlement Agreement.

K. Special Provision Governing Accrued Professional Compensation Claims and
Final Fee Applications

For the avoidance of doubt, the releases in Article VIII of the Plan shall not
waive, affect, limit, restrict, or otherwise modify the right of any party in
interest to object to any Accrued Professional Compensation Claim or final fee
application Filed by any Professional in the Chapter 11 Cases.

ARTICLE IX.

EFFECT OF CONFIRMATION OF THE PLAN

Upon entry of the Confirmation Order, the Bankruptcy Court shall be deemed to
have made and issued pursuant to Bankruptcy Rule 7052, made applicable to this
proceeding pursuant to Bankruptcy Rule 9014, the following findings of fact and
conclusions of law as though made after due deliberation and upon the record at
the Confirmation Hearing. Upon entry of the Confirmation Order, any and all
findings of fact in the Plan shall constitute findings of fact even if they are
stated as conclusions of law, and any and all conclusions of law in the Plan
shall constitute conclusions of law even if they are stated as findings of fact.

A. Jurisdiction and Venue

On the Petition Date, the Debtors commenced the Chapter 11 Cases by filing
voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. The
Debtors were and are qualified to be debtors under section 109 of the Bankruptcy
Code. Venue in the Northern District of Illinois was proper as of the Petition
Date and continues to be proper. Confirmation of the Plan is a core proceeding
under 28 U.S.C. § 157(b)(2). The Bankruptcy Court has subject matter
jurisdiction over this matter pursuant to 28 U.S.C. § 1334 and the Bankruptcy
Court has exclusive jurisdiction to determine whether the Plan complies with the
applicable provisions of the Bankruptcy Code and should be confirmed.

B. Order Approving the Disclosure Statement

On December 19, 2013, the Bankruptcy Court entered the Disclosure Statement
Order which, among other things, (a) approved the Disclosure Statement as
containing adequate information within the meaning of section 1125 of the
Bankruptcy Code and Bankruptcy Rule 3017 and (b) approved certain procedures and
documents for soliciting and tabulating votes with respect to the Plan.

 

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C. Publication of Confirmation Hearing Notice

As evidenced in the Affidavits of Publication, the Notice, Claims, and
Solicitation Agent published notice of the Confirmation Hearing in The New York
Times (National Edition) on December 30, 2013, and [—], 2014.

D. Voting Report

Prior to the Confirmation Hearing, the Debtors filed the Voting Report. All
procedures used to distribute solicitation materials to the applicable Holders
of Claims and Interests and to tabulate the Ballots were fair and conducted in
accordance with the Disclosure Statement Order, the Bankruptcy Code, the
Bankruptcy Rules, and all other applicable rules, laws, and regulations.
Pursuant to sections 1124 and 1126 of the Bankruptcy Code, at least one Impaired
Class entitled to vote on the Plan has voted to accept the Plan in accordance
with limited substantive consolidation contemplated by Article IV.S of the Plan.

E. Judicial Notice

The Bankruptcy Court takes judicial notice of the docket of the Chapter 11 Cases
maintained by the clerk of the Bankruptcy Court and/or its duly appointed agent,
including, without limitation, all pleadings and other documents Filed, all
orders entered, and all evidence and arguments made, proffered, or adduced at
the hearings held before the Bankruptcy Court during the pendency of the Chapter
11 Cases (including the Confirmation Hearing). Resolutions of any objections to
Confirmation explained on the record at the Confirmation Hearing are hereby
incorporated by reference. All entries on the docket of the Chapter 11 Cases
shall constitute the record before the Bankruptcy Court for purposes of the
Confirmation Hearing.

F. Transmittal and Mailing of Materials; Notice

Due, adequate, and sufficient notice of the Disclosure Statement, Plan, Plan
Supplement, and Confirmation Hearing, along with all deadlines for voting on or
objecting to the Plan, has been given to (1) all known Holders of Claims and
Interests; (2) parties that requested notice in accordance with Bankruptcy Rule
2002; (3) all parties to Unexpired Leases and Executory Contracts, and (4) all
taxing authorities listed on the Schedules or in the Claims Register, in
compliance with Bankruptcy Rules 2002(b), 3017, and 3020(b) and the Disclosure
Statement Order, and such transmittal and service were adequate and sufficient.
Adequate and sufficient notice of the Confirmation Hearing and other dates,
deadlines, and hearings described in the Disclosure Statement Order was given in
compliance with the Bankruptcy Rules and such order, and no other or further
notice is or shall be required.

G. Solicitation

Votes for acceptance and rejection of the Plan were solicited in good faith and
complied with sections 1125 and 1126 of the Bankruptcy Code, Bankruptcy Rules
3017 and 3018, the Disclosure Statement Order, all other applicable provisions
of the Bankruptcy Code and all other applicable rules, laws, and regulations.
The Debtors and their respective directors, managers, officers, employees,
agents, affiliates, representatives, attorneys, and advisors, as applicable,
have solicited votes on the Plan in good faith and in compliance with the
applicable provisions of the Bankruptcy Code and the Disclosure Statement Order
and are entitled to the protections afforded by section 1125(e) of the
Bankruptcy Code and the exculpation provisions set forth in Article VIII of the
Plan. The Debtors and the Released Parties solicited acceptance of the Plan in
good faith and in compliance with the applicable provisions of the Bankruptcy
Code and participated in good faith and in compliance with the applicable
provisions of the Bankruptcy Code in the offer, issuance, sale, or purchase of
the New Interests and common stock of the Parent that were offered or sold under
the Plan, and, pursuant to section 1125(e) of the Bankruptcy Code, no Released
Party is or shall be liable on account of such solicitation or participation for
violation of any applicable law, rule, or regulation governing solicitation of
acceptance of a chapter 11 plan or the offer, issuance, sale, or purchase of
such securities.

 

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H. Modifications to the Plan

On November 15, 2013, the Debtors Filed the Plan. On December 3,
2013, December 17, 2013, December 19, 2013, and [—], 2014, the Debtors Filed
certain modifications to the Plan (collectively, the “Plan Modifications”). On
[—], 2014, as authorized and approved by the Bankruptcy Court pursuant to [—]
[Docket No. [—]], the Debtors gave notice of the Plan Modifications to parties
in interest and gave a period of [—] days for creditors in Impaired Classes to
consider the most recent Plan Modifications and to change their respective votes
(the “Plan Modification Notice Period”).

Except as provided for by law, contract, or prior order of the Bankruptcy Court,
the Plan Modifications made since the commencement of solicitation either:
(a) do not adversely affect the recovery on account of any Claim or Interest
under the Plan; or (b) have been accepted by the affected Holders of Claims or
Interests in accordance with Bankruptcy Rule 3019(a). Prior notice regarding the
substance of the Plan Modifications, together with the filing with the
Bankruptcy Court of the Plan as modified by the Plan Modifications and the
disclosure of the Plan Modifications on the record at the Confirmation Hearing,
constitute due and sufficient notice thereof. Accordingly, pursuant to section
1127(a) of the Bankruptcy Code and Bankruptcy Rule 3019, and notwithstanding the
Plan Modification Notice Period, none of the Plan Modifications require
additional disclosure under section 1125 of the Bankruptcy Code or
resolicitation of votes under section 1126 of the Bankruptcy Code, nor do the
Plan Modifications require that Holders of Claims be afforded an opportunity to
change previously cast acceptances or rejections of the Plan. The Plan as
modified shall constitute the Plan submitted for Confirmation by the Bankruptcy
Court.

In accordance with section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019,
all Holders of Claims and Interests that voted to accept the Plan or who are
conclusively presumed to have accepted the Plan are deemed to have accepted the
Plan as modified by the Plan Modifications.

The Plan fully complies with sections 1122 and 1123 of the Bankruptcy Code. The
Debtor has complied with section 1125 with respect to the Disclosure Statement
and the Plan. The requirements of section 1127 of the Bankruptcy Code and
Bankruptcy Rule 3019(a) have been satisfied.

I. Burden of Proof

The Debtors, as proponents of the Plan, have satisfied their burden of proving
the elements of sections 1129(a) and 1129(b) of the Bankruptcy Code by a
preponderance of the evidence, which is the applicable evidentiary standard. The
Bankruptcy Court also finds that the Debtors have satisfied the elements of
section 1129(a) and 1129(b) of the Bankruptcy Code by clear and convincing
evidence.

J. Bankruptcy Rule 3016(a) Compliance

The Plan is dated and identifies proponents thereof, thereby satisfying
Bankruptcy Rule 3016(a).

K. Compliance with the Requirements of Section 1129 of the Bankruptcy Code

The Plan complies with all requirements of section 1129 of the Bankruptcy Code
as follows:

 

  1. Section 1129(a)(1)–Compliance of the Plan with Applicable Provisions of the
Bankruptcy Code

The Plan complies with all applicable provisions of the Bankruptcy Code as
required by section 1129(a)(1) of the Bankruptcy Code, including, without
limitation, sections 1121, 1122, 1123, and 1125 of the Bankruptcy Code.

 

  (a) Standing

Each of the Debtors has standing to file a plan and the Debtors, therefore, have
satisfied section 1121 of the Bankruptcy Code.

 

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  (b) Proper Classification

Pursuant to sections 1122(a) and 1123(a)(1) of the Bankruptcy Code, Article III
of the Plan designates Classes of Claims and Interests, other than
Administrative Claims, Accrued Professional Compensation Claims, and Priority
Tax Claims, which are not required to be classified. As required by
section 1122(a) of the Bankruptcy Code, each Class of Claims and Interests
contains only Claims or Interests that are substantially similar to the other
Claims or Interests within that Class.

 

  (c) Specification of Unimpaired Classes

Pursuant to section 1123(a)(2) of the Bankruptcy Code, Article III of the Plan
specifies all Classes of Claims and Interests that are not Impaired.

 

  (d) Specification of Treatment of Impaired Classes

Pursuant to section 1123(a)(3) of the Bankruptcy Code, Article III of the Plan
specifies the treatment of all Classes of Claims and Interests that are
Impaired.

 

  (e) No Discrimination

Pursuant to section 1123(a)(4) of the Bankruptcy Code, Article III of the Plan
provides the same treatment for each Claim or Interest within a particular
Class, as the case may be, unless the Holder of a particular Claim or Interest
has agreed to less favorable treatment with respect to such Claim or Interest,
as applicable.

 

  (f) Plan Implementation

Pursuant to section 1123(a)(5) of the Bankruptcy Code, the Plan provides
adequate and proper means for the Plan’s implementation. Immediately upon the
Effective Date, sufficient Cash and other consideration provided under the Plan
will be available to make all payments required to be made on the Effective Date
pursuant to the terms of the Plan. Moreover, Article IV and various other
provisions of the Plan specifically provide adequate means for the Plan’s
implementation.

 

  (g) Voting Power of Equity Securities; Selection of Officer, Director, or
Trustee under the Plan

The New Governance Documents comply with sections 1123(a)(6) and 1123(a)(7) of
the Bankruptcy Code.

 

  (h) Impairment/Unimpairment of Classes of Claims and Equity Interests

Pursuant to section 1123(b)(1) of the Bankruptcy Code, (A) Class A1 (Other
Priority Claims against EME), Class A2 (Secured Claims against EME), Class A8
(EME Interests), Class B1 (Other Priority Claims against Debtor Subsidiaries),
Class B2 (Secured Claims against Debtor Subsidiaries), Class B6 (Intercompany
Interests in Debtor Subsidiaries), Class C1 (Other Priority Claims against Homer
City Debtors), and Class C2 (Secured Claims against Homer City Debtors) are
Unimpaired under the Plan and (B) Class A3 (General Unsecured Claims against EME
(Assumed Liabilities)), Class A4 (General Unsecured Claims against EME (Not
Assumed Liabilities)), Class A5 (Joint-Liability General Unsecured Claims
against EME), Class A6 (Intercompany Claims against EME), Class A7 (Subordinated
Claims against EME), Class B3 (General Unsecured Claims against Debtor
Subsidiaries), Class B4 (Intercompany Claims against Debtor Subsidiaries), Class
B5 (Subordinated Claims against Debtor Subsidiaries), Class C3 (General
Unsecured Claims against Homer City Debtors), Class C4 (Intercompany Claims
against Homer City Debtors), Class C5 (Subordinated Claims against Homer City
Debtors), and Class C6 (Intercompany Interests in Homer City Debtors) are
Impaired under the Plan.

 

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  (i) Assumption and Rejection of Executory Contracts and Unexpired Leases

In accordance with section 1123(b)(2) of the Bankruptcy Code, pursuant to
Article V.A of the Plan, as of the Effective Date, all Executory Contracts and
Unexpired Leases listed on the Schedule of Assumed Executory Contracts and
Unexpired Leases will be deemed: (A) assumed by the applicable Debtor in
accordance with, and subject to the provisions and requirements of sections 365
and 1123 of the Bankruptcy Code; and (B) if so indicated on the Schedule of
Assumed Executory Contracts and Unexpired Leases, assigned to the other party
identified as the assignee for each assumed Executory Contract and Unexpired
Lease. Pursuant to Article V.B of the Plan, each Debtor shall be deemed to have
rejected each Executory Contract and Unexpired Lease to which it is a party,
unless such Executory Contract or Unexpired Lease: (A) was previously assumed or
rejected; (B) was previously expired or terminated pursuant to its own terms;
(C) is the subject of a motion or notice to assume filed on or before the
Confirmation Date; or (D) is designated specifically or by category as an
Executory Contract or Unexpired Lease on the Schedule of Assumed Executory
Contracts and Unexpired Leases. The Debtors’ assumption and assignment of the
Executory Contracts and Unexpired Leases listed on the Schedule of Assumed
Executory Contracts and Unexpired Leases pursuant to Article V of the Plan
governing assumption and rejection of executory contracts and unexpired leases
satisfies the requirements of section 365(b) of the Bankruptcy Code and,
accordingly, the requirements of section 1123(b)(2) of the Bankruptcy Code. For
the avoidance of doubt, as of the Effective Date, the PoJo Leases and Documents
shall be modified and assumed in accordance with Article V.G of the Plan.

The Debtors have exercised reasonable business judgment in determining whether
to reject, assume, or assume and assign each of their Executory Contracts and
Unexpired Leases under the terms of the Plan. Each pre- or post-Confirmation
rejection, assumption, or assumption and assignment of an Executory Contract or
Unexpired Lease pursuant to Article V of the Plan will be legal, valid and
binding upon the applicable Debtor and all other parties to such Executory
Contract or Unexpired Lease, as applicable, all to the same extent as if such
rejection, assumption, or assumption and assignment had been effectuated
pursuant to an appropriate order of the Court entered before the Confirmation
Date under section 365 of the Bankruptcy Code. Each of the Executory Contracts
and Unexpired Leases to be rejected, assumed, or assumed and assigned is deemed
to be an executory contract or an unexpired lease, as applicable.

 

  (j) Settlement of Claims and Causes of Action

All of the settlements and compromises pursuant to and in connection with the
Plan or incorporated by reference into the Plan comply with the requirements of
section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019.

Pursuant to Bankruptcy Rule 9019 and section 363 of the Bankruptcy Code and in
consideration for the distributions and other benefits provided under the Plan,
the EIX Settlement Agreement and any other compromise and settlement provisions
of the Plan constitute good-faith compromises, are in the best interests of the
Debtors, the Estates, and all Holders of Claims and Interests, and are fair,
equitable, and reasonable.

In reaching an ultimate decision on substantive fairness, the Court considered
the following factors: (a) the balance between the litigation’s possibility of
success and the settlement’s future benefits; (b) the likelihood of complex and
protracted litigation and risk and difficulty of collecting on the judgment;
(c) the proportion of creditors and parties in interest that support the
settlement; (d) the competency of counsel reviewing the settlement; (e) the
nature and breadth of releases to be obtained by officers and directors; and
(f) the extent to which the settlement is the product of arm’s-length
bargaining.

The Debtors are authorized, without further approval of this Court or any other
party to effectuate and implement the EIX Settlement and perform their
obligations thereunder.

 

  (k) Cure of Defaults

Article V of the Plan provides for the satisfaction of default claims associated
with each Executory Contract and Unexpired Lease to be assumed in accordance
with section 365(b)(1) of the Bankruptcy Code. The cure amounts identified in
the Schedule of Assumed Executory Contracts and Unexpired Leases and any

 

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amendments thereto, as applicable, represent the amount, if any, that the
Post-Effective-Date Debtor Subsidiaries or the Purchaser, as applicable, propose
to pay in full and complete satisfaction of such default claims. Any disputed
cure amounts will be determined in accordance with the procedures set forth in
Article V of the Plan, and applicable bankruptcy and nonbankruptcy law. As such,
the Plan provides that the Post-Effective-Date Debtor Subsidiaries or the
Purchaser, as applicable, will cure, or provide adequate assurance that the
Post-Effective-Date Debtor Subsidiaries or Purchaser, as applicable, will
promptly cure, defaults with Executory Contracts and Unexpired Leases in
compliance with section 365(b)(1) of the Bankruptcy Code; provided that the
Lessor Notes (as defined in the PoJo Leases and Documents) shall be deemed fully
cured on the Effective Date following the payment of the Agreed PoJo Cure Amount
and the PoJo Restructuring Fees in accordance with Article V.G of the Plan.
Thus, the Plan complies with section 1123(d) of the Bankruptcy Code.

 

  (l) Other Appropriate Provisions

The Plan’s other provisions are appropriate and consistent with the applicable
provisions of the Bankruptcy Code, including without limitation, provisions for
(i) distributions to holders of Claims and Interests, (ii) objections to Claims,
(iii) procedures for resolving disputed, contingent, and unliquidated claims,
(iv) cure amounts, (v) procedures governing Cure disputes, and
(vi) indemnification obligations.

 

  2. Section 1129(a)(2)–Compliance of Plan Proponents with Applicable Provisions
of the Bankruptcy Code

The Debtors, as proponents of the Plan, have complied with all applicable
provisions of the Bankruptcy Code as required by section 1129(a)(2) of the
Bankruptcy Code, including, without limitation, sections 1125 and 1126 of the
Bankruptcy Code and Bankruptcy Rules 3017, 3018, and 3019. In particular, the
Debtors are proper debtors under section 109 of the Bankruptcy Code and proper
proponents of the Plan under section 1121(a) of the Bankruptcy Code.
Furthermore, the solicitation of acceptances or rejections of the Plan was
(i) pursuant to the Disclosure Statement Order; (ii) in compliance with all
applicable laws, rules, and regulations governing the adequacy of disclosure in
connection with such solicitation; and (iii) solicited after disclosure to
Holders of Claims or Interests of adequate information as defined in section
1125(a) of the Bankruptcy Code. Accordingly, the Debtors and their respective
directors, officers, employees, agents, affiliates, and Professionals have acted
in “good faith” within the meaning of section 1125(e) of the Bankruptcy Code.

 

  3. Section 1129(a)(3)–Proposal of Plan in Good Faith

The Debtors have proposed the Plan in good faith and not by any means forbidden
by law. In determining that the Plan has been proposed in good faith, the Court
has examined the totality of the circumstances surrounding the filing of the
Chapter 11 Cases, the Plan itself, and the process leading to its formulation.
The Chapter 11 Cases were filed, and the Plan was proposed, with the legitimate
purpose of allowing the Debtors to reorganize.

 

  4. Section 1129(a)(4)–Bankruptcy Court Approval of Certain Payments as
Reasonable

Pursuant to section 1129(a)(4) of the Bankruptcy Code, the payments to be made
for services or for costs in connection with the Chapter 11 Cases or the Plan,
including the fees, expenses, and indemnities payable related to the New
Interests, are approved. The fees and expenses incurred by Professionals
retained by the Debtors or the Committee shall be payable according to the
orders approving such Professionals’ retentions, the Interim Compensation Order,
other applicable Bankruptcy Court orders, or as otherwise provided in the Plan.
In addition, the Supporting Noteholder Fees, PoJo Restructuring Fees, and EME
Senior Notes Indenture Trustee Fees shall be paid as provided for in the Plan.

 

  5. Section 1129(a)(5)–Disclosure of Identity of Proposed Management,
Compensation of Insiders, and Consistency of Management Proposals with the
Interests of Creditors and Public Policy

Pursuant to section 1129(a)(5) of the Bankruptcy Code, information concerning
the persons proposed to serve as the initial directors and officers of the
Reorganization Trust upon Consummation of the Plan has been fully

 

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disclosed to the extent available, and the appointment to, or continuance in,
such offices of such persons is consistent with the interests of Holders of
Claims and Interests and with public policy.

 

  6. Section 1129(a)(6)–Approval of Rate Changes

Section 1129(a)(6) of the Bankruptcy Code is not applicable because the Plan
does not provide for rate changes by any of the Debtors.

 

  7. Section 1129(a)(7)–Best Interests of Creditors and Interest Holders

The liquidation analysis included as Exhibit E of the Disclosure Statement, and
the other evidence related thereto that was proffered or adduced at or prior to,
or in affidavits in connection with, the Confirmation Hearing, is reasonable.
The methodology used and assumptions made in such liquidation analysis, as
supplemented by the evidence proffered or adduced at or prior to, or in
affidavits filed in connection with, the Confirmation Hearing, are reasonable.
With respect to each Impaired Class, each Holder of an Allowed Claim or Interest
in such Class has accepted the Plan or will receive under the Plan on account of
such Claim or Interest property of a value, as of the Effective Date, that is
not less than the amount such Holder would receive if the Debtors were
liquidated under Chapter 7 of the Bankruptcy Code.

 

  8. Section 1129(a)(8)–Conclusive Presumption of Acceptance by Unimpaired
Classes; Acceptance of the Plan by Each Impaired Class

Certain Classes of Claims and Interest are Unimpaired and are deemed
conclusively to have accepted the Plan pursuant to section 1126(f) of the
Bankruptcy Code. In addition, at least one Impaired Class that was entitled to
vote has voted to accept the Plan. Because the Plan provides that the certain
Classes of Claims and Interests will be Impaired and because no distributions
shall be made to Holders in such Classes, such Holders are deemed conclusively
to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code
and, therefore, are not entitled to vote to accept or reject the Plan.

 

  9. Section 1129(a)(9)–Treatment of Claims Entitled to Priority Pursuant to
Section 507(a) of the Bankruptcy Code

The treatment of Administrative Claims and Priority Tax Claims under Article II
of the Plan satisfies the requirements of section 1129(a)(9) of the Bankruptcy
Code.

 

  10. Section 1129(a)(10)–Acceptance by at Least One Impaired Class

At least one Impaired Class has voted to accept the Plan. Accordingly, section
1129(a)(10) of the Bankruptcy Code is satisfied.

 

  11. Section 1129(a)(11)–Feasibility of the Plan

The Plan satisfies Section 1129(a)(11) of the Bankruptcy Code. Based upon the
evidence proffered or adduced at, or prior to, or in affidavits filed in
connection with, the Confirmation Hearing, the Plan is feasible and Confirmation
of the Plan is not likely to be followed by the liquidation, or the need for
further financial reorganization, of the Debtors, the Reorganization Trust, the
Post-Effective-Date Debtor Subsidiaries, the Post-Effective-Date Homer City
Debtors, or any successor to the Debtors under the Plan. Furthermore, the
Reorganization Trust, the Post-Effective-Date Debtor Subsidiaries, and the
Post-Effective-Date Homer City Debtors will have adequate assets to satisfy
their respective obligations under the Plan.

 

  12. Section 1129(a)(12)–Payment of Bankruptcy Fees

Article XIII.C of the Plan provides for the payment of all fees payable under 28
U.S.C. § 1930(a) in accordance with section 1129(a)(12) of the Bankruptcy Code.

 

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  13. Section 1129(a)(13)–Retiree Benefits

Article IV.F of the Plan provides for the treatment of the Compensation and
Benefits Programs in accordance with section 1129(a)(13) of the Bankruptcy Code.

 

  14. Section 1129(a)(14)–Domestic Support Obligations

The Debtors are not required by a judicial or administrative order, or by
statute, to pay any domestic support obligations, and therefore, section
1129(a)(14) of the Bankruptcy Code is inapplicable in these Chapter 11 Cases.

 

  15. Section 1129(a)(15)–The Debtors Are Not Individuals

The Debtors are not individuals, and therefore, section 1129(a)(15) of the
Bankruptcy Code is inapplicable in these Chapter 11 Cases.

 

  16. Section 1129(a)(16)–No Applicable Nonbankruptcy Law Regarding Transfers

Each of the Debtors that is a corporation is a moneyed, business, or commercial
corporation or trust, and therefore, section 1129(a)(16) of the Bankruptcy Code
is inapplicable in these Chapter 11 Cases.

 

  17. Section 1129(b)–Confirmation of Plan Over Rejection of Impaired Classes

The Plan satisfies the requirements of section 1129(b) of the Bankruptcy Code
with respect to the Classes presumed to have rejected the Plan pursuant to
section 1126(g) of the Bankruptcy Code or that have actually rejected the Plan
(if any). To determine whether a plan is “fair and equitable” with respect to a
class of claims, section 1129(b)(2)(B)(ii) of the Bankruptcy Code provides in
pertinent part that “the holder of any claim or interest that is junior to the
claims of such class will not receive or retain under the plan on account of
such junior claim or interest any property.” To determine whether a plan is
“fair and equitable” with respect to a class of interests, section
1129(b)(2)(C)(ii) of the Bankruptcy Code provides that “the holder of any
interest that is junior to the interests of such class will not receive or
retain under the plan on account of such junior interest any property.” There
are no classes junior to the deemed (or actual) rejecting classes of claims or
interests that will receive any distribution under the Plan. The Plan,
therefore, satisfies the requirements of section 1129(b) of the Bankruptcy Code.

 

  18. Section 1129(c)–Confirmation of Only One Plan

The Plan is the only plan that has been filed in these Chapter 11 Cases.
Accordingly, the Plan satisfies the requirements of section 1129(c) of the
Bankruptcy Code.

 

  19. Section 1129(d)–Principal Purpose Not Avoidance of Taxes

The principal purpose of the Plan is not the avoidance of taxes or the avoidance
of the application of section 5 of the Securities Act. Accordingly, the Plan
satisfies the requirements of section 1129(d) of the Bankruptcy Code.

 

  20. Section 1129(e)–Small Business Case

Section 1129(e) is inapplicable because these Chapter 11 Cases do not qualify as
small business cases thereunder.

L. Substantive Consolidation

Except as otherwise ordered by the Bankruptcy Court, in accordance with Article
IV.S of the Plan, on the Effective Date, each of the Estates of the Debtor
Subsidiaries shall be substantively consolidated into a single

 

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consolidated Estate and each of the Estates of the Homer City Debtors into a
single consolidated Estate, in each case solely for the limited purposes of
voting and Confirmation.

M. Securities Under the Plan

Pursuant to the Plan, and without further corporate or other action, the New
Interests will be issued by the Reorganization Trust on the Effective Date
subject to the terms of the Plan.

N. Releases and Discharges

The releases and discharges of Claims and Causes of Action described in the
Plan, including releases by the Debtors and by Holders of Claims, constitute
good faith compromises and settlements of the matters covered thereby. Such
compromises and settlements are made in exchange for consideration and are in
the best interest of Holders of Claims, are fair, equitable, reasonable, and are
integral elements of the resolution of the Chapter 11 Cases in accordance with
the Plan. Each of the discharge, release, indemnification, and exculpation
provisions set forth in the Plan: (a) is within the jurisdiction of the Court
under 28 U.S.C. §§ 1334(a), 1334(b), and 1334(d); (b) is an essential means of
implementing the Plan pursuant to section 1123(a)(6) of the Bankruptcy Code;
(c) is an integral element of the transactions incorporated into the Plan;
(d) confers material benefit on, and is in the best interests of, the Debtors,
their estates, and their creditors; (e) is important to the overall objectives
of the Plan to finally resolve all Claims among or against the parties in
interest in the Chapter 11 Cases with respect to the Debtors; (f) is consistent
with sections 105, 1123, 1129, and all other applicable provisions of the
Bankruptcy Code; and (g), without limiting the foregoing, with respect to the
releases and injunctions in Article VIII.G of the Plan, are (i) essential
elements of the Sale Transaction, EIX Settlement, and Plan, (ii) terms and
conditions without which the Purchaser Parties would not have entered into the
Plan Sponsor Agreement and Purchase Agreement, and EIX, EMG, and the EMG
Subsidiaries would not have entered into the EIX Settlement Agreement,
(iii) narrowly tailored and (iv) in consideration of the substantial financial
contribution of the Purchaser Parties and EIX under the Plan. Furthermore, the
injunction set forth in Article VIII.G is an essential component of the Plan,
the fruit of long-term negotiations and achieved by the exchange of good and
valuable consideration that will enable unsecured creditors to realize
distributions in the Chapter 11 Cases.

O. Cure of Lessor Notes

On the Effective Date, following the payment of the Agreed PoJo Cure Amount and
the PoJo Restructuring Fees, the “Lessor Notes” (as defined in the PoJo Leases
and Documents) shall be deemed fully cured.

P. Release and Retention of Causes of Action

It is in the best interests of Holders of Claims and Interests that the
provisions in Article IV.Y of the Plan be approved.

Q. Approval of Purchase Agreement and Other Documents and Agreements

All documents and agreements necessary to implement the Plan, including the
Purchase Agreement and EIX Settlement Agreement, are essential elements of the
Plan, are necessary to consummate the Plan, the Sale Transaction, and the EIX
Settlement, and entry into and consummation of the transactions contemplated by
each such document and agreement is in the best interests of the Debtors, the
Estates, and Holders of Claims and Interests. The Debtors have exercised
reasonable business judgment in determining which agreements to enter into and
have provided sufficient and adequate notice of such documents and agreements.
The terms and conditions of such documents and agreements have been negotiated
in good faith, at arm’s-length, are fair and reasonable, and are hereby
reaffirmed and approved.

R. Confirmation Hearing Exhibits

All of the exhibits presented at the Confirmation Hearing have been properly
received into evidence and are a part of the record before the Bankruptcy Court.

 

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S. Objections to Confirmation of the Plan

Any and all objections to Confirmation have been withdrawn, settled, overruled,
or otherwise resolved.

T. Exemption from Transfer Taxes with Respect to the Sale Transaction

The Sale Transaction constitutes a sale or transfer under a plan confirmed under
section 1129 of the Bankruptcy Code and, accordingly, the Sale Transaction shall
not be subject to any tax under any law imposing a stamp tax or similar tax,
including any real or personal property transfer tax, pursuant to section
1146(a) of the Bankruptcy Code.

U. Good Faith Purchaser Status

Each of the Purchaser Parties is a good faith purchaser for the purposes of
section 363(m) of the Bankruptcy Code and entitled to the benefits thereof in
relation to the Sale Transaction.

V. Sale Free and Clear

All assets and rights sold by EME pursuant to the Purchase Agreement are
transferred, conveyed, and assigned to the Purchaser free and clear of all
Liens, Claims, encumbrances, and interests pursuant to pursuant to sections
363(f) and 1123(a)(5) of the Bankruptcy Code.

W. Retention of Jurisdiction

The Bankruptcy Court may properly retain jurisdiction over the matters set forth
in Article XII of the Plan and section 1142 of the Bankruptcy Code.

X. Plan Supplement

The Debtors filed the Plan Supplement, which includes the following documents:
(1) to the extent known, the identity of the members of Post-Reorganization EME,
the Reorganization Trust Oversight Board, and the nature and compensation for
any member of the Reorganization Trust Oversight Board who is an “insider” under
section 101(31) of the Bankruptcy Code; (2) the Schedule of Assumed Executory
Contracts and Unexpired Leases; (3) the Schedule of Rejected Executory Contracts
and Unexpired Leases; (4) the applicable New Governance Documents; (5) the
Purchase Agreement; (6) a schedule identifying the EME Retained Causes of
Action; (7) a schedule identifying the Purchaser Retained Causes of Action;
(8) the Schedule of Eligible Employees; (9) the amount of the Disputed Claims
Reserve Amount; (10) the calculation of the Agreed PoJo Cure Amount; (11) a
summary of the Wind Down Budget, subject to appropriate confidentiality
protections; (12) any identification and tax information that will be requested
of recipients of New Interests under Article VI.G.2 of the Plan; and (13) the
EIX Settlement Agreement. All such documents comply with the terms of the Plan,
and the filing and notice of such documents was adequate, proper and in
accordance with the Disclosure Statement Order, the Bankruptcy Code, the
Bankruptcy Rules and the Local Rules.

ARTICLE X.

CONDITIONS PRECEDENT TO CONSUMMATION OF THE PLAN

A. Conditions Precedent to the Effective Date

It shall be a condition to Consummation of the Plan that the following
conditions shall have been satisfied or waived pursuant to the provisions of
Article X.B of the Plan:

1. the Bankruptcy Court shall have approved the Disclosure Statement, in form
and substance acceptable to the Debtors, the Committee, the Supporting
Noteholders, the Purchaser, and (solely with respect to any terms thereof that
affect the rights of the PoJo Parties) the PoJo Parties, as containing adequate
information and entered the Disclosure Statement Order in form and substance
reasonably acceptable to the Debtors, the Purchaser

 

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Parties, the Committee, and the Supporting Noteholders, and (solely with respect
to any terms thereof that affect the rights of the PoJo Parties) the PoJo
Parties;

2. the Confirmation Order, in form and substance acceptable to the Debtors, the
Committee, the Supporting Noteholders, the Purchaser, EIX (solely with respect
to terms inconsistent with, or implementing, the EIX Settlement Agreement), and
(solely with respect to any terms thereof that affect the rights of the PoJo
Parties) the PoJo Parties shall have been duly entered and shall not be subject
to a stay;

3. all closing conditions and other conditions precedent in the Purchase
Agreement shall have been satisfied or waived in accordance with the terms
thereof;

4. the EIX Settlement Conditions shall have been satisfied or waived in
accordance with the terms thereof;

5. each of the transactions described in Article V.G shall have been
implemented;

6. the New Interests shall have been issued and delivered, as applicable, and
all conditions precedent to the consummation of the transactions contemplated
therein shall have been waived or satisfied in accordance with the terms thereof
and the closing of the transactions contemplated by such agreements shall have
occurred;

7. the New Governance Documents, in form and substance acceptable to the
Debtors, the Committee, and the Supporting Noteholders, shall be deemed to be
valid, binding, and enforceable in accordance with their terms;

8. the Supporting Noteholder Fees, and subject to Article IV.X of the Plan, the
EME Senior Notes Indenture Trustee Fees, shall have been paid in full in Cash;

9. the Professional Fee Escrow shall have been established and funded in Cash in
accordance with Article II.C.1 of the Plan;

10. the Compensation and Benefits Programs Escrow shall have been established
and funded in Cash in accordance with Article IV.H of the Plan;

11. the Disputed Claims Reserve shall have been established and funded;

12. the Wind Down Budget shall have been agreed upon by the Debtors, the
Committee, and the Supporting Noteholders, and funds sufficient to satisfy the
Wind Down Budget shall have been appropriately reserved;

13. the Plan Supplement, including any amendments, modifications, or supplements
to the documents, schedules, or exhibits included therein shall be in form and
substance reasonably acceptable to the Debtors, the Purchaser, the Committee,
the Supporting Noteholders, (solely with respect to terms inconsistent with, or
implementing, the EIX Settlement Agreement) EIX, and (solely with respect to any
terms thereof that affect the rights of the PoJo Parties) the PoJo Parties and
shall have been filed with the Bankruptcy Court pursuant to the terms of the
Plan;

14. all governmental and material third-party approvals and consents, including
Bankruptcy Court and any required FERC authorization, necessary in connection
with the transactions contemplated by the Plan shall be in full force and effect
(which, in the case of an order of judgment of any Court, shall mean a Final
Order), and all applicable waiting periods shall have expired without any action
being taken or threatened by any competent authority that would restrain,
prevent or otherwise impose materially adverse conditions on such transactions;
and

15. all documents and agreements necessary to implement the Plan shall have
(a) been tendered for delivery, and (b) been effected or executed by all
Entities party thereto, or will be deemed executed and delivered by virtue of
the effectiveness

 

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of the Plan as expressly set forth herein, and all conditions precedent to the
effectiveness of such documents and agreements shall have been satisfied or
waived pursuant to the terms of such documents or agreements.

B. Waiver of Conditions

The conditions to Confirmation of the Plan and to the Effective Date set forth
in Article X of the Plan may be waived only by consent of the Debtors, in
consultation with the Purchaser Parties, the Committee, and the Supporting
Noteholders; provided that the Debtors may not waive any conditions to
Confirmation of the Plan that require the consent of any of the Purchaser, the
Committee, the Supporting Noteholders, EIX or the PoJo Parties without the
consent of the party or parties whose consent is required for such waiver. For
the avoidance of doubt, the Debtors may not waive the condition set forth in
Article X.A.5 without the consent of the PoJo Parties.

C. Substantial Consummation of the Plan

“Substantial Consummation” of the Plan, as defined in section 1101(2) of the
Bankruptcy Code, shall be deemed to occur on the Effective Date.

D. Effect of Nonoccurrence of Conditions to the Effective Date

If the Effective Date does not occur, then: (1) the Plan shall be null and void
in all respects; (2) any settlement or compromise embodied in the Plan
(including the fixing or limiting to an amount certain of any Claim or Interest
or Class of Claims or Interests), assumption or rejection of Executory Contracts
or Unexpired Leases effected by the Plan, and any document or agreement executed
pursuant to the Plan, shall be deemed null and void; and (3) nothing contained
in the Plan or the Disclosure Statement shall: (a) constitute a waiver or
release of any Claims or Interests; (b) prejudice in any manner the rights of
the Debtors or any other Person or Entity; or (c) constitute an admission,
acknowledgement, offer, or undertaking of any sort by the Debtors or any other
Person or Entity.

ARTICLE XI.

MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN

A. Modification and Amendments

Subject to the limitations contained herein, the Debtors, with the consent of
the Committee, the Supporting Noteholders, the Purchaser, (solely with respect
to any document, schedule, or exhibit that affects the rights of the PoJo
Parties) the PoJo Parties, and EIX (solely with respect to any document,
schedule, or exhibit inconsistent with, or implementing, the EIX Settlement
Agreement) reserve the right to modify the Plan as to material terms and seek
Confirmation consistent with the Bankruptcy Code and, as appropriate, not
resolicit votes on such modified Plan; provided that, subject to Article III.A
of the Plan, the Debtors reserve the right, after consultation with the
Committee, the Supporting Noteholders, and EIX to (1) withdraw the Plan with
respect to the Homer City Debtors at their sole discretion, (2) seek to dismiss
the Chapter 11 Cases of the Homer City Debtors, and/or (3) seek to convert the
Chapter 11 Cases of the Homer City Debtors to cases under chapter 7 of the
Bankruptcy Code. Subject to certain restrictions and requirements set forth in
section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019 and those
restrictions on modifications set forth in the Plan, the Debtors, subject to the
reasonable consent of the Committee, the Supporting Noteholders, the Purchaser,
and EIX (solely with respect to terms inconsistent with, or implementing, the
EIX Settlement Agreement), expressly reserve their rights to alter, amend, or
modify materially the Plan with respect to the Debtors, one or more times, after
Confirmation, and, to the extent necessary, may initiate proceedings in the
Bankruptcy Court to so alter, amend, or modify the Plan, or remedy any defect or
omission, or reconcile any inconsistencies in the Plan, the Disclosure
Statement, or the Confirmation Order, in such matters as may be necessary to
carry out the purposes and intent of the Plan. Any such modification or
supplement shall be considered a modification of the Plan and shall be made in
accordance with Article XI of the Plan.

 

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B. Effect of Confirmation on Modifications

Entry of a Confirmation Order shall mean that all modifications or amendments to
the Plan occurring after the solicitation thereof are approved pursuant to
section 1127(a) of the Bankruptcy Code and do not require additional disclosure
or resolicitation under Bankruptcy Rule 3019.

C. Revocation or Withdrawal of the Plan

The Debtors reserve the right, after consultation with the Purchaser, the
Committee, the Supporting Noteholders, EIX, and the PoJo Parties, to revoke or
withdraw the Plan prior to the Confirmation Date. If the Debtors revoke or
withdraw the Plan, or if Confirmation or Consummation does not occur, then:
(1) the Plan shall be null and void in all respects; (2) any settlement or
compromise embodied in the Plan (including the fixing or limiting to an amount
certain of any Claim or Interest or Class of Claims or Interests), assumption or
rejection of Executory Contracts or Unexpired Leases effected by the Plan, and
any document or agreement executed pursuant to the Plan, shall be deemed null
and void; and (3) nothing contained in the Plan or Disclosure Statement shall:
(a) constitute a waiver or release of any Claims or Interests; (b) prejudice in
any manner the rights of the Debtors or any other Entity; or (c) constitute an
admission, acknowledgement, offer, or undertaking of any sort by the Debtors or
any other Entity.

ARTICLE XII.

RETENTION OF JURISDICTION

Notwithstanding the entry of the Confirmation Order and the occurrence of the
Effective Date, on and after the Effective Date, to the extent legally
permissible, the Bankruptcy Court shall retain such jurisdiction over the
Chapter 11 Cases and all matters, arising out of, or related to, the Chapter 11
Cases and the Plan, including jurisdiction to:

1. allow, disallow, determine, liquidate, classify, estimate, or establish the
priority, Secured or unsecured status, or amount of any Claim or Interest,
including the resolution of any request for payment of any Administrative Claim
and the resolution of any and all objections to the Secured or unsecured status,
priority, amount, or allowance of Claims or Interests and any and all disputes
regarding Claims that are Assumed Liabilities (including any disputes as to
whether any such Claim is an Assumed Liability);

2. decide and resolve all matters related to the granting and denying, in whole
or in part, any applications for allowance of compensation or reimbursement of
expenses to Professionals authorized pursuant to the Bankruptcy Code or the
Plan;

3. resolve any matters related to: (a) the assumption and assignment or
rejection of any Executory Contract or Unexpired Lease to which a Debtor is
party or with respect to which a Debtor may be liable in any manner and to hear,
determine, and, if necessary, liquidate, any Claims arising therefrom, including
Claims related to the rejection of an Executory Contract or Unexpired Lease,
Cure Costs pursuant to section 365 of the Bankruptcy Code, or any other matter
related to such Executory Contract or Unexpired Lease, including any Executory
Contract or Unexpired Lease between any Debtor or Non-Debtor Subsidiary and
Chevron Corp. or any of its Affiliates; (b) any potential contractual obligation
under any Executory Contract or Unexpired Lease that is assumed; (c) the
Reorganization Trust, the Post-Effective-Date Debtor Subsidiaries, or the
Post-Effective-Date Homer City Debtors, as applicable, amending, modifying, or
supplementing, after the Effective Date, pursuant to Article V of the Plan, the
list of Executory Contracts and Unexpired Leases to be assumed and assigned or
rejected or otherwise; and (d) any dispute regarding whether a contract or lease
is or was executory or expired;

4. ensure that distributions to Holders of Allowed Claims and Interests are
accomplished pursuant to the provisions of the Plan;

5. adjudicate, decide, or resolve any motions, adversary proceedings, contested
or litigated matters, and any other matters, and grant or deny any applications
involving a Debtor that may be pending on the Effective Date;

 

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6. implement and enforce the EIX Settlement and adjudicate disputes with respect
thereto in accordance with the terms of the EIX Settlement Agreement;

7. enter and implement such orders as may be necessary or appropriate to
execute, implement, or consummate the provisions of the Plan and all contracts,
instruments, releases, indentures, and other agreements or documents created in
connection with the Plan, the Disclosure Statement, or the Purchase Agreement;

8. enter and enforce any order related to the Sale Transaction or otherwise in
connection with any sale of property pursuant to sections 363, 1123, or 1146(a)
of the Bankruptcy Code;

9. resolve any cases, controversies, suits, disputes, or Causes of Action that
may arise in connection with the Consummation, interpretation, or enforcement of
the Plan or any Entity’s obligations incurred in connection with the Plan;

10. issue injunctions, enter and implement other orders, or take such other
actions as may be necessary or appropriate to restrain interference by any
Entity with Consummation or enforcement of the Plan;

11. resolve any cases, controversies, suits, disputes, or Causes of Action with
respect to the settlements, compromises, releases, injunctions, Exculpations,
and other provisions contained in Article VIII of the Plan and enter such orders
as may be necessary or appropriate to implement such releases, injunctions, and
other provisions;

12. resolve any cases, controversies, suits, disputes, or Causes of Action with
respect to the repayment or return of distributions and the recovery of
additional amounts owed by the Holder of a Claim or Interest for amounts not
timely repaid pursuant to Article VI.I.1 of the Plan;

13. enter and implement such orders as are necessary or appropriate if the
Confirmation Order is for any reason modified, stayed, reversed, revoked, or
vacated;

14. determine any other matters that may arise in connection with or relate to
the Plan, the New Governance Documents, the Disclosure Statement, the
Confirmation Order, the Purchase Agreement, or any contract, instrument,
release, indenture, or other agreement or document created in connection with
the Plan or the Disclosure Statement;

15. adjudicate any and all disputes arising from or relating to distributions
under the Plan or any transactions contemplated therein;

16. consider any modifications of the Plan, to cure any defect or omission, or
to reconcile any inconsistency in any Bankruptcy Court order, including the
Confirmation Order;

17. determine requests for the payment of Claims and Interests entitled to
priority pursuant to section 507 of the Bankruptcy Code;

18. hear and determine disputes arising in connection with the interpretation,
implementation, or enforcement of the Plan, or the Confirmation Order, including
disputes arising under agreements, documents, or instruments executed in
connection with the Plan;

19. hear and determine matters concerning state, local, and federal taxes in
accordance with sections 346, 505, and 1146 of the Bankruptcy Code;

20. hear and determine all disputes involving the existence, nature, or scope of
all releases set forth herein, including any dispute relating to any liability
arising out of the termination of employment or the termination of any employee
or retiree benefit program, regardless of whether such termination occurred
prior to or after the Effective Date;

 

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21. enforce all orders previously entered by the Bankruptcy Court;

22. to resolve any disputes arising under the New Governance Documents;

23. hear any other matter not inconsistent with the Bankruptcy Code;

24. enter an order concluding or closing the Chapter 11 Cases; and

25. enforce the injunction, release, and Exculpation provisions set forth in
Article VIII of the Plan;

ARTICLE XIII.

MISCELLANEOUS PROVISIONS

A. Immediate Binding Effect

Subject to Article X.A of the Plan and notwithstanding Bankruptcy Rules 3020(e),
6004(h), or 7062 or otherwise, upon the occurrence of the Effective Date, the
terms of the Plan, the Plan Supplement, and the Confirmation Order shall be
immediately effective and enforceable and deemed binding upon the Debtors and
any and all Holders of Claims or Interests (regardless of whether such Claims or
Interests are deemed to have accepted or rejected the Plan), all Entities that
are parties to or are subject to the settlements, compromises, releases, and
injunctions described in the Plan, each Entity acquiring property under the Plan
or the Confirmation Order, and any and all non-Debtor parties to Executory
Contracts and Unexpired Leases with the Debtors. All Claims and debts shall be
as fixed, adjusted, or compromised, as applicable, pursuant to the Plan
regardless of whether any Holder of a Claim or debt has voted on the Plan.

B. Additional Documents

On or before the Effective Date, the Debtors may File with the Bankruptcy Court
such agreements and other documents as may be necessary or appropriate to
effectuate and further evidence the terms and conditions of the Plan. The
Debtors and all Holders of Claims or Interests receiving distributions pursuant
to the Plan and all other parties in interest shall, from time to time, prepare,
execute, and deliver any agreements or documents and take any other actions as
may be necessary or advisable to effectuate the provisions and intent of the
Plan.

C. Payment of Statutory Fees

All fees payable pursuant to section 1930(a) of the Judicial Code shall be paid
for each quarter (including any fraction thereof) until the Chapter 11 Cases are
converted, dismissed, or a final decree closing the Chapter 11 Cases is issued,
whichever occurs first.

D. Dissolution of the Committee

On the Effective Date, the Committee shall dissolve and all members, employees,
or agents thereof, including the Committee Members, shall be released and
discharged from all rights and duties arising from or related to the Chapter 11
Cases, except the Committee will remain intact solely with respect to (1) the
preparation, filing, review, and resolution of applications for Accrued
Professional Compensation Claims; and (2) a pending appeal, motion to
reconsider, or motion to vacate, if any, related to Confirmation (including with
respect to the Plan, the Confirmation Order, the Purchase Agreement, or the EIX
Settlement Agreement). On the Effective Date, subject to the proviso above, the
Committee Members shall be released and discharged from all rights and duties
from or related the Chapter 11 Cases. Other than with respect to those matters
identified in the proviso above, the Debtors, the Reorganization Trust, the
Post-Effective-Date Debtor Subsidiaries, the Post-Effective-Date Homer City
Debtors, and the Purchaser Parties, as applicable, shall no longer be liable or
responsible for paying any fees or expenses incurred after the Effective Date by
the Committee, the Committee Members, or any advisors to the Committee. For the
avoidance of doubt, the Reorganization Trust shall pay the reasonable and
documented fees and expenses of the Committee and the Committee’s advisors
incurred after the Effective Date for the matters set forth in the proviso
above.

 

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E. Certain Environmental Matters

Nothing in this Plan, the Purchase Agreement, or any Confirmation Order
releases, discharges, resolves, precludes, exculpates, or enjoins any of the
following liabilities to any Governmental Unit against the Post-Reorganization
EME, the Reorganization Trust, any Post-Effective-Date Debtor Subsidiary, or any
Post-Effective-Date Homer City Debtor: (1) any liability under Environmental Law
that is not a Claim; and (2) any Claim under Environmental Law arising on or
after the Effective Date.

Nothing in this Plan, the Purchase Agreement, or any Confirmation Order
releases, discharges, resolves, precludes, exculpates, or enjoins any liability
under Environmental Law to a Governmental Unit on the part of any Entity as the
owner or operator of property that such Entity owns or operates after the
Effective Date. From and after the Effective Date, Post-Reorganization EME, the
Reorganization Trust, each Post-Effective-Date Debtor Subsidiary, and each
Post-Effective-Date Homer City Debtor shall comply with all applicable
Environmental Laws; provided, however, that with respect to each
Post-Effective-Date Debtor Subsidiary, the Bankruptcy Court’s retention of
jurisdiction under Article XII of the Plan shall not include enforcement or
adjudicating compliance with all applicable Environmental Laws after the
Confirmation Date except as provided otherwise in Article XII in relation to the
allowance or disallowance of any Claim; provided, further, however, that with
respect to the Reorganization Trust and each Post-Effective-Date Homer City
Debtor, the Bankruptcy Court’s retention of jurisdiction may include the
enforcement or adjudication of Post-Reorganization EME’s, the Reorganization
Trust’s, and/or each Post-Effective-Date Homer City Debtor’s compliance with all
applicable Environmental Laws after the Confirmation Date to the extent
permitted by applicable law and subject to a Governmental Unit’s right to
contest jurisdiction.

For the avoidance of doubt, all Claims under Environmental Law shall be subject
to Article VIII of the Plan and treated in accordance with the Plan in all
respects and the Bankruptcy Court shall retain jurisdiction as provided in
Article XII of the Plan in relation to the allowance or disallowance of any
Claim under Environmental Law; provided, however, that, and without limiting the
Bankruptcy Court’s jurisdiction as set forth in the previous paragraph, nothing
in the Plan or any Confirmation Order shall divest or limit the jurisdiction of
other tribunals over the Environmental Actions, and upon the Effective Date of
the Plan, the Environmental Actions shall survive the Chapter 11 Cases and may
be adjudicated in the court in which such Environmental Action is currently
pending; provided, further, however, any judgment for a Claim in any
Environmental Action shall be treated in accordance with the Plan in all
respects.

Nothing in the Plan or any Confirmation Order authorizes the transfer or
assignment of any governmental (a) license, (b) permit, (c) registration,
(d) authorization, or (e) approval, or the discontinuation of any obligation
thereunder, without compliance with all applicable legal requirements under
Environmental Law.

Nothing in the Plan or any Confirmation Order shall release, discharge, resolve,
preclude, exculpate, or enjoin any liability to a Governmental Unit under
Environmental Law on the part of any Entity other than (a) the Reorganization
Trust, (b) any Post-Effective-Date Debtor Subsidiary, (iii) any
Post-Effective-Date Homer City Debtor, (iv) the Purchaser, or
(v) Post-Reorganization EME. For the avoidance of doubt, no Governmental Unit
shall be a Releasing Party with respect to Environmental Law under
Article VIII.D of the Plan.

F. Treatment of Certain Claims of the PBGC and Pension Plans

Consistent with the EIX Settlement Agreement, nothing in the Debtors’ bankruptcy
proceedings, the Plan, the Confirmation Order, or any other document filed in
the Debtors’ bankruptcy cases shall in any way be construed to discharge,
release, limit, or relieve any individual from any claim by the PBGC or any
pension plan for breach of any fiduciary duty under the United States Employee
Retirement Income Security Act of 1974, as amended, including prohibited
transactions, with respect to the Pension Plans or any other defined benefit
pension plan. The PBGC and any pension plans shall not be enjoined or precluded
from enforcing such fiduciary duty or related liability by any of the provisions
of the Plan, Confirmation Order, Bankruptcy Code, or other document filed in the
Debtors’ bankruptcy cases.

 

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G. Reservation of Rights

Except as expressly set forth in the Plan, the Plan shall have no force or
effect unless the Bankruptcy Court shall enter the Confirmation Order. Neither
the Plan, any statement or provision contained in the Plan, nor any action taken
or not taken by any Debtor with respect to the Plan, the Disclosure Statement,
the Confirmation Order, or the Plan Supplement shall be or shall be deemed to be
an admission or waiver of any rights of the Debtors, the Purchaser Parties, the
Committee, the Supporting Noteholders, or the PoJo Parties with respect to the
Holders of Claims or Interests prior to the Effective Date.

H. Successors and Assigns

The rights, benefits, and obligations of any Entity named or referred to in the
Plan or the Confirmation Order shall be binding on, and shall inure to the
benefit of any heir, executor, administrator, successor or assign, Affiliate,
officer, director, manager, agent, representative, attorney, beneficiaries, or
guardian, if any, of each Entity.

I. Service of Documents

All notices hereunder shall be deemed given if in writing and delivered, if sent
by facsimile, courier, or registered or certified mail (return receipt
requested) to the following addresses and facsimile numbers (or at such other
addresses or facsimile numbers as shall be specified by like notice):

If to the Debtors, to:

Kirkland & Ellis LLP

300 North LaSalle

Chicago, Illinois 60654

Attn.: James H.M. Sprayregen, P.C. and David R. Seligman, P.C.

Facsimile: (312) 862-2200

-and-

Kirkland & Ellis LLP

601 Lexington Avenue

New York, New York 10022

Attn.: Joshua A. Sussberg

Facsimile: (212) 446-4900

If to the Purchaser, to:

NRG Energy, Inc.

211 Carnegie Center

Princeton, New Jersey 08540-6213

Attn.: Brian Curci

Facsimile: (609) 524-4501

with a copy to:

Baker Botts L.L.P.

1299 Pennsylvania Avenue, NW

Washington, D.C. 20004-2400

Attn.: Elaine M. Walsh

Facsimile: (202) 585-1042

 

69

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-and-

Baker Botts L.L.P.

2001 Ross Avenue

Dallas, Texas 75201

Attn.: C. Luckey McDowell

Facsimile: (214) 661-4571

If to the Committee, to

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

Bank of America Tower

New York, New York 10036-6745

Attn.: Ira S. Dizengoff and Arik Preis

Facsimile: (212) 872-1002

-and-

Akin Gump Strauss Hauer & Feld LLP

1333 New Hampshire Avenue, N.W.

Washington, D.C. 20036-1564

Attn.: James Savin

Facsimile: (202) 877-4288

If to the counsel for the Supporting Noteholders, to:

Ropes & Gray LLP

1211 Avenue of the Americas

New York, New York 10036

Attn.: Keith Wofford

Facsimile: (212) 596-9090

-and-

Ropes & Gray LLP

800 Boylston Street

Boston, Massachusetts 02199

Attn.: Stephen Moeller-Sally

Facsimile: (617) 951-7050

If to Nesbitt Asset Recovery Series J-1 or Nesbitt Asset Recovery Series P-1,
to:

Nesbitt Asset Recovery Series J-1

Nesbitt Asset Recovery Series P-1

c/o U.S. Bank Trust National Association, as Owner Trustee

U.S. Bank Corporate Trust Services

300 Delaware Avenue, 9th Floor

Mail Code: EXDE-WDAW

Attn.: Mildred Smith

Wilmington, Delaware 19801

Telephone: (302) 576-3703

Facsimile: (312) 332-8010

 

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with a copy to:

Jenner & Block LLP

Attn.: Daniel R. Murray, Melissa Root, and Andrew J. Olejnik

353 North Clark Street

Chicago, Illinois 60654

Telephone: (312) 222-9350

Facsimile: (312) 527-0484

If to Nesbitt Asset Recovery Series LLC, J-1 or Nesbitt Asset Recovery Series
LLC, P-1, to:

Nesbitt Asset Recovery Series LLC, J-1

Nesbitt Asset Recovery Series LLC, P-1

c/o U.S. Bank Trust National Association, as Owner Trustee

U.S. Bank Corporate Trust Services

300 Delaware Avenue, 9th Floor

Mail Code: EXDE-WDAW

Attn.: Mildred Smith

Wilmington, Delaware 19801

Telephone: (302) 576-3703

Facsimile: (312) 332-8010

with a copy to:

Jenner & Block LLP

Attn.: Daniel R. Murray, Melissa Root, and Andrew J. Olejnik

353 N. Clark Street

Chicago, Illinois 60654

Telephone: (312) 222-9350

Facsimile: (312) 527-0484

If to Nesbitt Asset Recovery LLC, to:

Nesbitt Asset Recovery LLC

Attn: President, Scott Jennings

The Nemours Building

1007 Orange Street, Suite 1465

Wilmington, Delaware 19801

Telephone: (302) 472-7412

Facsimile: (302) 472-7216

with a copy to:

Jenner & Block LLP

Attn: Daniel R. Murray, Melissa Root, and Andrew J. Olejnik

353 North Clark Street

Chicago, Illinois 60654

Telephone: (312) 222-9350

Facsimile: (312) 527-0484

 

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If to Joliet Trust II or Powerton Trust II, to:

Joliet Trust II

Powerton Trust II

c/o Wilmington Trust Company, as Owner Trustee

Rodney Square North

1100 North Market Street

Attn.: Corporate Trust Administration, Robert Hines

Wilmington, Delaware 19890-0001

Telephone: (302) 636-6197

Facsimile: (302) 636-4140

with a copy to:

Michael F. Collins

Richards, Layton & Finger, P.A.

One Rodney Square

920 North King Street

Wilmington, Delaware 19801

Telephone: (302) 651-7502

Facsimile: (302) 498-7502

If to Joliet Generation II, LLC or Powerton Generation II, LLC, to:

Joliet Generation II, LLC

Powerton Generation II, LLC

c/o Associates Capital Investments, L.L.C.

c/o Citigroup Global Markets Inc.

Attn.: Sugam Mehta and Brian Whalen

388 Greenwich Street, 21st Floor

New York, New York 10013

Telephone: (212) 816-1620

Facsimile: To be advised

with a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn.: William Bice and Tyson Lomazow

1 Chase Manhattan Plaza

New York, New York 10005

Telephone: (212) 530-5000

Facsimile: (212) 530-5219

If to Associates Capital Investments, L.L.C., to:

Associates Capital Investments, L.L.C.

c/o Citigroup Global Markets Inc.

Attn.: Sugam Mehta and Brian Whalen

388 Greenwich Street, 21st Floor

New York, New York 10013

Telephone: (212) 816-1620

Facsimile: To be advised

 

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with a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn.: William Bice and Tyson Lomazow

1 Chase Manhattan Plaza

New York, New York 10005

Telephone: (212) 530-5000

Facsimile: (212) 530-5219

If to The Bank of New York Mellon as Successor Lease Indenture Trustee or as
Successor Pass Through Trustee, to:

The Bank of New York Mellon

525 William Penn Plaza, 38th Floor

Attn.: Bridget Schessler, Vice President

Pittsburgh, Pennsylvania 15259

with a copy to:

O’Melveny & Myers, LLP

7 Times Square

New York, New York 10036-6524

Attn.: George A. Davis

Telephone: (212) 326-2062

Email: gdavis@omm.com

If to EIX, to counsel at the following address:

Munger Tolles & Olson LLP

335 South Grand Avenue

Los Angeles, California 90071

Attn.: Thomas A. Walper and Seth Goldman

Email: seth.goldman@mto.com

J. Term of Injunctions or Stays

Unless otherwise provided in the Plan or in the Confirmation Order, all
injunctions or stays in effect in the Chapter 11 Cases pursuant to sections 105
or 362 of the Bankruptcy Code or any order of the Bankruptcy Court, and extant
on the Confirmation Date (excluding any injunctions or stays contained in the
Plan or the Confirmation Order) shall remain in full force and effect until the
Effective Date. All injunctions or stays contained in the Plan or the
Confirmation Order shall remain in full force and effect in accordance with
their terms.

K. Entire Agreement

Except as otherwise indicated, on the Effective Date, the Plan supersedes all
previous and contemporaneous negotiations, promises, covenants, agreements,
understandings, and representations with respect to the subject matter of the
Plan, all of which will have become merged and integrated into the Plan on the
Effective Date. To the extent the Confirmation Order is inconsistent with the
Plan, the Confirmation Order shall control for all purposes.

L. Nonseverability of Plan Provisions

If, prior to Confirmation, any term or provision of the Plan is held by the
Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court
shall have the power to alter and interpret such term or provision to make it
valid or enforceable to the maximum extent practicable, consistent with the
original purpose of the term or

 

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provision held to be invalid, void, or unenforceable, and such term or provision
shall then be applicable as altered or interpreted. Notwithstanding any such
holding, alteration, or interpretation, the remainder of the terms and
provisions of the Plan will remain in full force and effect and will in no way
be affected, impaired, or invalidated by such holding, alteration, or
interpretation. The Confirmation Order shall constitute a judicial determination
and shall provide that each term and provision of the Plan, as it may have been
altered or interpreted in accordance with the foregoing, is: (1) valid and
enforceable pursuant to its terms; (2) integral to the Plan and may not be
deleted or modified without the reasonable consent of the Debtors, the
Committee, the Supporting Noteholders, and (solely with respect to any terms
thereof that affect the rights of the PoJo Parties) the PoJo Parties, except as
otherwise provided in the Plan; and (3) nonseverable and mutually dependent.

M. Deadline to File Objections to Certain Claims

Notwithstanding anything to the contrary in the Plan, solely with respect to the
Proofs of Claim filed by IPM Eagle LLP [Claim No. 1143] and International Power
Ltd. [Claim No. 1149], any objections thereto shall be Filed no later than the
date that is 180 days after the Effective Date.

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

Respectfully submitted, as of the date first set forth above,

 

Edison Mission Energy (for itself and all Debtors) By:  

 

Name:   Pedro J. Pizarro Title:   President, Edison Mission Energy

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Schedule 1

Acquired Companies

 

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1. Aguila Energy Company

2. ALP Wind LLC

3. American Bituminous Power Partners, L.P.

4. Anacapa Energy Company

5. Aurora Starlight Wind, LLC

6. Beheer-en Beleggingsmaatschappij Plogema B.V.

7. Bendwind, LLC

8. Big Sky Wind, LLC

9. Bisson Windfarm, LLC

10. Boeve Windfarm, LLC

11. Boquillas Wind, LLC

12. Broken Bow Wind, LLC

13. Buffalo Bear, LLC

14. Camino Energy Company

15. Capistrano Wind Holdings, Inc.

16. Capistrano Wind II, LLC

17. Capistrano Wind Partners, LLC

18. Capistrano Wind, Inc.

19. Capistrano Wind, LLC

20. Caresale Services Limited

21. Carstensen Wind, LLC

22. Cedro Hill Wind LLC

23. CG Windfarm, LLC

24. Chester Energy Company

25. Citizens Power Holdings One, LLC

26. CL Power Sales Eight, L.L.C.

27. Clear View Acres Wind Farm, LLC

28. Coalinga Cogeneration Company

29. Community Wind North 1 LLC

30. Community Wind North 10 LLC

31. Community Wind North 11 LLC

32. Community Wind North 13 LLC

33. Community Wind North 15 LLC

34. Community Wind North 2 LLC

35. Community Wind North 3 LLC

36. Community Wind North 5 LLC

37. Community Wind North 6 LLC

38. Community Wind North 7 LLC

39. Community Wind North 8 LLC

40. Community Wind North 9 LLC

41. Community Wind North, LLC

42. CP Power Sales Nineteen, L.L.C.

43. CP Power Sales Seventeen, L.L.C.

44. CP Power Sales Twenty, L.L.C.

45. Crofton Bluffs Wind, LLC

46. Crosswind Transmission, LLC

47. Cy-Hawk Wind Energy, LLC

48. DanMar Transmission, LLC

49. DeGreef DP, LLC

50. DeGreeffpa, LLC

51. Del Mar Energy Company

52. Doga Enerji Uretim Sanayi ve Ticaret L.S.

53. Doga Isi Satis Hizmetleri ve Ticaret L.S.

54. Doga Isletme ve Bakim Ticaret L.S.

55. Eagle View Acres Wind Farm, LLC

56. East Ridge Transmission, LLC

 

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57. Edison First Power Holdings I

58. Edison First Power Holdings II

59. Edison First Power Limited

60. Edison Mission Arroyo Nogales, Inc.

61. Edison Mission Asset Services, Inc.

62. Edison Mission Development, Inc.

63. Edison Mission Energy Fuel

64. Edison Mission Energy Fuel Services, LLC

65. Edison Mission Energy Petroleum

66. Edison Mission Fuel Resources, Inc.

67. Edison Mission Fuel Transportation, Inc.

68. Edison Mission Huntington Beach, LLC

69. Edison Mission Marketing and Trading, Inc.

70. Edison Mission Mid-Atlantic, Inc.

71. Edison Mission Midwest Holdings Co.

72. Edison Mission Midwest II, Inc.

73. Edison Mission Midwest, Inc.

74. Edison Mission Operation & Maintenance, Inc.

75. Edison Mission Project Co.

76. Edison Mission Renewable Energy CDE, LLC

77. Edison Mission Solutions, LLC

78. Edison Mission Walnut Creek II, LLC

79. Edison Mission Walnut Creek, LLC

80. Edison Mission Wind, Inc.

81. EHI Development Fund

82. Elk Lake Wind Farm, LLC

83. Elkhorn Ridge Wind II, LLC

84. Elkhorn Ridge Wind, LLC

85. EME CP Holdings Co.

86. EME Eastern Holdings Co.

87. EME Finance UK Limited

88. EME Investments II, LLC

89. EME Investments, LLC

90. EME Service Co.

91. EME Southwest Power Corporation

92. EME UK International LLC

93. EME Western Holdings Co.

94. Fey Windfarm, LLC

95. First Hydro Renewables Limited

96. Foresight Flying M, LLC

97. Forward WindPower, LLC

98. Global Power Investors, Inc.

99. Goat Wind, LP

100. Green Prairie Energy, LLC

101. Greenback Energy, LLC

102. Greene Wind Energy, LLC

103. Groen Wind, LLC

104. Guadalupe Mountains Wind, LLC

105. Hardin Hilltop Wind, LLC

106. Hardin Wind Energy, LLC

107. High Lonesome Mesa Investments, LLC

108. High Lonesome Mesa, LLC

109. Highland Township Wind Farm, LLC

110. Hillcrest Wind, LLC

 

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111. HyperGen, LLC

112. Jeffers Wind 20, LLC

113. JMC Wind, LLC

114. K-Brink Windfarm, LLC

115. Kern River Cogeneration Company

116. Laredo Ridge Wind, LLC

117. Larswind, LLC

118. LimiEnergy, LLC

119. Lookout WindPower, LLC

120. Lucky Wind, LLC

121. Maiden Winds, LLC

122. Maine Mountain Power, LLC

123. Maplekey Holdings Limited

124. Maplekey UK Finance Limited

125. Maplekey UK Limited

126. MD & E Wind, LLC

127. MEC Esenyurt B.V.

128. MEC San Pascual B.V.

129. Mid-Set Cogeneration Company

130. Midway-Sunset Cogeneration Company

131. Midwest Finance Corp.

132. Midwest Generation EME, LLC

133. Midwest Generation Procurement Services, LLC

134. Midwest Generation, LLC

135. Midwest Peaker Holdings, Inc.

136. Mission Bingham Lake Wind, LLC

137. Mission Community Wind North, Inc.

138. Mission CWN Holdings, Inc.

139. Mission de las Estrellas LLC

140. Mission Del Cielo Inc.

141. Mission del Sol, LLC

142. Mission Energy Construction Services, Inc.

143. Mission Energy Holdings International, Inc.

144. Mission Energy Wales Company

145. Mission Funding Zeta

146. Mission Iowa Wind Company

147. Mission Kern River Holdings, Inc.

148. Mission Midway-Sunset Holdings, Inc.

149. Mission Minnesota Wind II, Inc.

150. Mission Minnesota Wind III, Inc.

151. Mission Minnesota Wind, LLC

152. Mission Mountain Wind, LLC

153. Mission Procurement, LLC

154. Mission Sycamore Holdings, Inc.

155. Mission Watson Holdings, Inc.

156. Mission Wind Aurora Starlight, Inc.

157. Mission Wind Boquillas, Inc.

158. Mission Wind Broken Bow, LLC

159. Mission Wind Cedro, LLC

160. Mission Wind Crofton Bluffs, LLC

161. Mission Wind Goat Mountain, Inc.

162. Mission Wind Laredo, Inc.

163. Mission Wind Maine, Inc.

164. Mission Wind New Mexico II, Inc.

165. Mission Wind New Mexico, Inc.

166. Mission Wind Oklahoma, Inc.

 

78

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167. Mission Wind Owaissa, Inc.

168. Mission Wind PA One, Inc.

169. Mission Wind PA Three, Inc.

170. Mission Wind PA Two, Inc.

171. Mission Wind Pennsylvania, Inc.

172. Mission Wind Pinnacle, Inc.

173. Mission Wind Southwest, Inc.

174. Mission Wind Terra Investments, LLC

175. Mission Wind Texas II, Inc.

176. Mission Wind Texas, Inc.

177. Mission Wind Utah, LLC

178. Mission Wind Wildorado, Inc.

179. Mission Wind Wyoming, LLC

180. Mountain Wind Power II, LLC

181. Mountain Wind Power, LLC

182. North Community Turbines, LLC

183. North Wind Turbines, LLC

184. Northern Lights Wind, LLC

185. Odin Wind Farm, LLC

186. Owaissa Wind, LLC

187. OWF Eight, LLC

188. OWF Five, LLC

189. OWF Four, LLC

190. OWF One, LLC

191. OWF Seven, LLC

192. OWF Six, LLC

193. OWF Three, LLC

194. OWF Two, LLC

195. Palo Alto County Wind Farm, LLC

196. Pinnacle Wind, LLC

197. Pioneer Ridge LLC

198. Pioneer Trail Wind, LLC

199. Pleasant Valley Energy Company

200. Poverty Ridge Wind, LLC

201. Power Beyond, LLC

202. Power Blades Windfarm, LLC

203. Salinas River Cogeneration Company

204. San Gabriel Energy Company

205. San Joaquin Energy Company

206. San Juan Energy Company

207. San Juan Mesa Investments, LLC

208. San Juan Mesa Wind Project, LLC

209. San Pascual Cogeneration Company (Philippines) Limited

210. San Pascual Cogeneration Company International B.V.

211. Sargent Canyon Cogeneration Company

212. Sierra Wind, LLC

213. Silver Lake Acres Wind Farm, LLC

214. Silverado Energy Company

215. Sleeping Bear, LLC

216. South Texas Wind, LLC

217. Southern Sierra Energy Company

218. Spanish Fork Wind Park 2, LLC

219. Stahl Wind Energy, LLC

220. Stony Hills Wind Farm, LLC

221. Storm Lake Power Partners I, LLC

222. Sunrise Power Company, LLC

 

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223. Sunrise View Wind Farm, LLC

224. Sunset View Wind Farm, LLC

225. Sunshine Arizona Wind Energy, LLC

226. Sutton Wind Energy, LLC

227. Sycamore Cogeneration Company

228. TAIR Windfarm, LLC

229. Taloga Wind II, LLC

230. Taloga Wind, L.L.C.

231. Tapestry Wind, LLC

232. TG Windfarm, LLC

233. Tofteland Windfarm, LLC

234. Tower of Power, LLC

235. Valle Del Sol Energy, LLC

236. Viejo Energy Company

237. Viento Funding II, Inc.

238. Viento Funding, Inc.

239. Virgin Lake Wind Farm, LLC

240. Walnut Creek Energy, LLC

241. Walnut Creek II, LLC

242. Watson Cogeneration Company

243. WCEP Holdings, LLC

244. West Pipestone Transmission, LLC

245. West Transmission One, LLC

246. Western Sierra Energy Company

247. Westridge Windfarm, LLC

248. Whispering Wind Acres, LLC

249. White Caps Windfarm, LLC

250. Wildorado Interconnect, LLC

251. Wildorado Wind, LLC

252. Wilson Creek Power Partners, LLC

253. Wind Family Turbine, LLC

254. Windcurrent Farms, LLC

255. Windom Transmission, LLC

256. Zontos Wind, LLC

 

80

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Exhibit B

Forms of EIX Notes

 

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

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS NOTE, BY
ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR
ACCOUNT FOR WHICH IT HAS PURCHASED NOTES, TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH NOTE, ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO
A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN
THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS
AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE NOTE FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
MINIMUM PRINCIPAL AMOUNT AT MATURITY OF THE NOTES OF $10,000,000, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE ISSUER’S AND HOLDERS’ PAYMENT AGENT’S RIGHTS PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM.

THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET
SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. A HOLDER MAY OBTAIN THE
ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY
FOR SUCH NOTE BY SUBMITTING A REQUEST FOR SUCH INFORMATION TO ISSUER AT THE
FOLLOWING ADDRESS: 2244 WALNUT GROVE AVENUE, ROSEMEAD, CALIFORNIA 91770,
ATTENTION: CHIEF FINANCIAL OFFICER.

 

1

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PROMISSORY NOTE

[No.                     ]

Due September 30, 2015

[            ], 2014          Stated Principal Amount at Maturity of
$[Adjustment Amount multiplied by 0.5 multiplied by the Interest Factor]

For value received, Edison International, a Delaware corporation (“Issuer”),
hereby promises to pay to the Trust (as defined herein), or its registered
assigns or transferees (as applicable), by payment to the Holders’ Payment Agent
(as defined herein), the principal amount at maturity of $[        ] on the
Maturity Date.

This Note is one of a series of Notes in an aggregate Stated Principal Amount
(as defined in Section 11 hereof) of $         million. The term “Notes”, as
used in this Note, includes each Note issued in replacement of and/or to any
transferee of any Note (or any permitted portion thereof) issued in accordance
with Sections 6(a), 8(b) and 14 of this Note, if any; provided that, if at any
time, this Note is the only “Note” issued and outstanding, then all reference
herein to “Notes” shall be deemed to refer to this Note. Capitalized terms used
in this Note and not defined elsewhere herein shall have the same meanings set
forth in Section 11 hereof.

1. Maturity. Issuer promises to pay to the Holders’ Payment Agent for the
benefit of the Holders the Stated Principal Amount on the Maturity Date.

2. Interest. No cash interest shall be paid and no cash interest will accrue on
the Notes, except as provided in this Section 2. If the Stated Principal Amount
is not paid when due, whether at maturity, upon acceleration or otherwise, then
the overdue amount shall, to the extent permitted by law, bear interest at the
rate of 7.00% per annum, compounded semiannually, which interest shall accrue
from the date such overdue amount was originally due to the date that payment of
such amount, including the interest thereon, has been made or duly provided for.
All such interest shall be payable in cash on demand.

3. Prepayments. Issuer may prepay the Notes in full but not in part at any time
prior to the Maturity Date by payment to the Holders’ Payment Agent of the
Stated Principal Amount that would be due at the stated Maturity Date of the
Notes, notwithstanding that principal will not have accreted in the full face
amount of such Note on such prepayment date.

4. No Right of Setoff. No amounts owed pursuant to this Note are subject to
setoff, counterclaim, deduction or abatement of any kind, regardless of whether
this Note is then held by the Trust or any other Holder.

5. Registrar and Holders’ Payment Agent.

(a) The Trust has notified the Issuer that it intends to maintain, at its sole
expense, on behalf of the Holders an office or agency where the Notes may be
presented for registration of transfer or for exchange (the “Registrar”) and an
office or agency where the Notes

 

2

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may be presented for payment (the “Holders’ Payment Agent”). Any register of the
Notes kept by the Registrar of their transfer and exchange, as permitted
hereunder, shall be referred to herein as the “Note Register”. The Trust and
each transferee, assignee, participant or any other Person receiving any
interest in any Note irrevocably agrees by its acceptance of this Note or any
interest herein that the Issuer has no obligation to examine the Note Register
or to determine the identity of any Holder of any Note or any interest therein.
If the Registrar maintains the Note Register, the Registrar shall, at the
request of the Issuer or at the request of any Holder, provide a list of the
registered Holders and the Stated Principal Amount of their Notes to the Issuer
or the requesting Holder, as applicable, promptly after any such request. The
Issuer’s sole responsibility with respect to payment is to pay the Holders’
Payment Agent the Stated Principal Amount when due and payable.

(b) The Trust and each Holder by accepting an assignment or transfer of, or
participation in, this Note agrees that the Trust is initially appointed by the
Holders on the Issue Date as the Registrar and Holders’ Payment Agent for the
Notes, and that a successor Registrar and/or Holders’ Payment Agent may be
appointed in accordance with the terms of this Note. The Majority Holders may
remove any Registrar or Holders’ Payment Agent upon twenty Business Days written
notice to such Registrar or Holders’ Payment Agent and the Issuer; provided,
however, that no such removal shall become effective until (a) acceptance of any
appointment by a successor as evidenced by an appropriate agreement entered into
by the Trust, with the approval of the Majority Holders, and such successor
Registrar or Holders’ Payment Agent, as the case may be, which agreement shall
state its effective date, and (b) written acknowledgement (not to be
unreasonably withheld, delayed or conditioned) by the Issuer of the appointment
of such successor Registrar or Holders’ Payment Agent as of 12:01 a.m. (New York
City time) on the stated effective date.

(c) By no later than noon (New York City time) on the date on which the Note is
due and payable, Issuer shall irrevocably deposit with the Holders’ Payment
Agent U.S. dollars in the amount of the Stated Principal Amount in immediately
available funds. The Holders of the Notes agree by their acceptance of the Notes
that each must surrender the Notes to the Holders’ Payment Agent to collect
payment on the Notes.

(d) Each Holder acknowledges and agrees by its acceptance of an assignment,
transfer of or participation in this Note that the Holders’ Payment Agent and
Registrar:

(i) shall have no duties or obligations to the Holders other than those
specifically set forth herein or as may subsequently be agreed to in writing by
the Holders’ Payment Agent and no implied duties or obligations shall be read
into this Note;

(ii) shall have no obligation to make payment unless Issuer has caused to be
provided to it the necessary immediately available funds for such payment;

(iii) shall be regarded as making no representations regarding, and as having no
responsibilities as to, the validity, sufficiency, value, or genuineness of the
Notes;

 

3

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(iv) may rely on, and shall be fully authorized and protected in acting or
failing to act upon any certificate, instrument, opinion, notice, letter,
telegram, telex, facsimile transmission or other document or security delivered
to it;

(v) shall not be liable or responsible to the Holders for any failure of Issuer
to comply with any of its obligations, including without limitation obligations
under this Note or applicable securities laws;

(vi) may rely on and shall be authorized and protected in acting or failing to
act upon the written instructions of authorized officers of any Holder;

(vii) shall be held harmless in relying on the oral or written advice or opinion
of counsel in respect of action taken, suffered or omitted by it hereunder in
good faith and in accordance with such oral or written advice or opinion of such
counsel; and

(viii) assumes no responsibility and shall not be liable for loss or damage due
to errors unless said errors are caused by the Holders’ Payment Agent’s gross
negligence, bad faith or intentional misconduct.

6. Exchanges; Transfers.

(a) Upon surrender of this Note by the Trust or the Registrar to the Issuer for
exchange, Issuer at its sole expense shall execute and deliver in exchange
therefor a new Note or Notes, as the case may be, as requested by the Trust,
which aggregate the principal amount at maturity of the Note(s) so exchanged and
in such permitted denominations as the Trust may request, and otherwise of like
tenor, issued in the name of the Trust and which may be registered in the Note
Register as the Trust may request. The issuance of new Note(s) shall be made
without charge to the Trust for any issuance tax in respect thereof or other
cost incurred by Issuer in connection with such issuance. The Notes may not be
exchanged for new Notes in an amount representing less than $10.0 million in
Stated Principal Amount without the consent of Issuer, which may be given or
withheld in its sole and absolute discretion.

(b) This Note is a registered Note. Upon delivery by a Holder to the Registrar
of a Form of Assignment in the form attached hereto as Exhibit D, together with
any required certificates or letters described in Section 6(c) below and the
information set forth on Exhibit E attached hereto, the Registrar shall record
the transfer in the Note Register. The Issuer shall not be required to reissue
any Note upon transfer, and the Holders’ Payment Agent, the Registrar and the
Issuer may deem and treat the Person in whose name a Note is registered in the
Note Register as the absolute owner of such Note for the purpose of receiving
payment thereon and for all other purposes. The Notes may not be transferred,
assigned, or otherwise disposed of, nor may any participation interest be
created therein, in an amount representing less than $10.0 million in Stated
Principal Amount without the consent of Issuer, which may be given or withheld
in its sole and absolute discretion. Each Holder by its acceptance of an
assignment, transfer of, or participation in, this Note hereby agrees to
indemnify the Issuer and the Holders’ Payment Agent and Registrar against any
loss or liability that may result from the transfer, exchange or assignment of
such Holders’ Note in violation of any provision of this Note or applicable
United States federal or state securities laws.

 

4

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(c) In connection with the transfer of a Note bearing the Restricted Note
Legend, the proposed transferor shall deliver to the Registrar and the Issuer an
appropriately completed certificate of transfer in the form attached hereto as
Exhibit A. In connection with the transfer of a Note bearing the Restricted Note
Legend made pursuant to Rule 144A or Regulation S, the proposed transferee shall
execute and deliver to the Registrar and the Issuer a letter substantially in
the form attached hereto as Exhibit B or Exhibit C, as applicable.

(d) Each Person holding a direct or beneficial right to receive amounts under
the Note, by its acceptance of such right, agrees that it shall deliver to
Registrar and Holders’ Payment Agent (i) at or before the time such Person
acquires an interest in the Note, including pursuant to a transfer or assignment
and (ii) at such times as are reasonably requested by Registrar or Holders’
Payment Agent, any documentation prescribed by law (including the applicable
properly executed Form W-8 or Form W-9), or reasonably requested by Registrar or
Holders’ Payment Agent, certifying as to any entitlement of such Person to an
exemption from, or reduction in, any withholding tax with respect to any
payments to be made to such person under the Note or otherwise required or
reasonably necessary to establish such Person’s status for withholding tax or
information reporting purposes in an applicable jurisdiction or to enable
Issuer, Registrar and Holders’ Payment Agent to comply with applicable Law. Each
such Person further agrees that it shall, whenever a lapse in time or change in
circumstances renders such documentation expired, obsolete or inaccurate in any
material respect, deliver promptly to Registrar and Holders’ Payment Agent
updated or other appropriate documentation or promptly notify Registrar and
Holders’ Payment Agent of its inability to do so.

7. Rule 144A Information. At any time when Issuer is not subject to Section 13
or 15(d) of the Exchange Act, upon the request of a Holder or any beneficial
holder of this Note, Issuer will promptly furnish or cause to be furnished Rule
144A Information (as defined below) to such Holder or any beneficial holder of
this Note, or to a prospective purchaser of any such security designated by any
such Holder or beneficial holder, as the case may be, to the extent required to
permit compliance by such Holder or beneficial holder with Rule 144A under the
Securities Act in connection with the resale of any such Note. “Rule 144A
Information” shall be such information as is specified pursuant to Rule
144A(d)(4) under the Securities Act.

8. Legend; Legend Removal.

(a) Each Note shall be imprinted with a legend in substantially the form
imprinted on the first page of this Note (the first paragraph of which is
referred to as the “Restricted Note Legend”).

(b) The Restricted Note Legend shall not be removed unless there is delivered to
the Issuer and the Registrar such satisfactory evidence, which shall include an
opinion of counsel, as may be reasonably required by the Issuer and the
Registrar, that neither the Restricted Note Legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the Securities Act or that such Notes are not “restricted” within the
meaning of Rule 144 under the Securities Act. Upon provision of such
satisfactory evidence, the Issuer shall deliver a Note that does not bear the
Restricted Note Legend in exchange for a Note that does bear the Restricted Note
Legend; provided that each such Note shall only be issued in the

 

5

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name of the Trust and shall be in a minimum $10.0 million Stated Principal
Amount, unless Issuer consents in its sole and absolute discretion to a lesser
Stated Principal Amount.

9. Events of Default.

(a) For purposes of this Note, an “Event of Default” shall be deemed to have
occurred if any one or more of the following conditions or events shall occur:

(i) Issuer defaults in payment of the Stated Principal Amount when due and
payable;

(ii) either Issuer or SCE makes an assignment for the benefit of creditors or
admits in writing its inability to pay its debts generally as they become due;
or an order, judgment or decree is entered adjudicating Issuer or SCE bankrupt
or insolvent; or any order for relief with respect to Issuer or SCE is entered
under the Bankruptcy Code; or Issuer or SCE petitions or applies to any tribunal
for the appointment of a custodian, trustee, receiver or liquidator of Issuer,
or of any substantial part of the assets of Issuer or SCE, or commences any
proceeding (other than a proceeding for the voluntary liquidation and
dissolution of any Subsidiary) relating to Issuer or SCE under any bankruptcy
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction; or any such petition or application is
filed, or any such proceeding is commenced, against Issuer or SCE and either
(A) Issuer or SCE by any act indicates its approval thereof, consent thereto or
acquiescence therein or (B) such petition, application or proceeding is not
dismissed within 60 days;

(iii) any representation or warranty made by Issuer in Section 12 to the Trust
in connection with the execution and delivery of this Note proves to have been
incorrect in any material respect on the Issue Date;

(iv) Issuer defaults in the performance of any of its covenants or agreements
contained in this Note (other than payment of the Stated Principal Amount when
due and payable) and such default shall continue unremedied for 30 days after
the Holders of at least 25% of Stated Principal Amount of all Notes then
outstanding shall have given notice thereof to Issuer through the Holders’
Payment Agent, which notice shall include a certification from the Registrar
that such Holders hold the required percentage of Notes then outstanding; or

(v) an intentional violation by Issuer of the implied covenant of good faith and
fair dealing, which violation is designed to (i) reduce the value of the Notes
or (ii) to render the Notes valueless.

The foregoing shall constitute “Events of Default” whatever the reason or cause
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body and regardless of the effects of any subordination provisions.

(b) If an Event of Default of the type described in Section 9(a)(ii) has
occurred, the stated principal amount at maturity of the Notes shall become
immediately due and

 

6

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payable without any action on the part of the Holders of the Notes, and Issuer
shall immediately pay to the Holders’ Payment Agent all amounts due and payable
with respect to the Notes. If any other Event of Default (other than an Event of
Default described in Section 9(a)(i) or 9(a)(ii)) has occurred, the Majority
Holders may declare by written notice to Issuer through the Holders’ Payment
Agent, which notice shall include a certification from the Registrar that such
Holders hold the required percentage of Notes then outstanding, the Notes to be
immediately due and payable and may demand immediate payment of the Stated
Principal Amount, which declaration of payment shall be binding on all of the
Holders. The Holders’ Payment Agent shall give also give prompt written notice
of any such demand to the other Holders.

10. Amendment and Waiver.

(a) The provisions of the Notes may be amended and Issuer may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if Issuer has obtained the written consent of the Majority Holders;
provided that, without the consent of each Holder affected, an amendment,
supplement or waiver may not (with respect to any Notes held by a non-consenting
Holder thereof):

(i) reduce the principal amount at maturity of the Notes outstanding whose
Holders must consent to an amendment;

(ii) reduce the principal amount at maturity of any Note or extend the maturity
of any Note;

(iii) make any Note payable in money other than that stated in the Note;

(iv) make any change to the amendment provisions of this Note which require each
Holder’s consent or to the waiver provisions of this Note; or

(v) subordinate, in right of payment, the Notes to any other indebtedness for
borrowed money of Issuer.

(b) The Majority Holders may on behalf of the Holders of all the Notes waive any
past default under this Note and its consequences, except a default (i) in any
payment in respect of the principal amount of or default interest on any Notes,
or (ii) in respect of a covenant or provision hereof which under this Note that
cannot be modified or amended without the consent of the Holder of each
outstanding Note affected.

(c) It shall not be necessary for the consent of the Holders under this
Section 10 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof. After an
amendment under this Section 10 becomes effective, Issuer shall mail to all
Holders a notice briefly describing such amendment. The failure to give such
notice to all Holders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section 10.

(d) In determining whether the Holders of the required aggregate principal
amount at maturity of Notes have concurred in any direction, waiver or consent,
Notes owned by the Issuer or by any Affiliate of the Issuer shall be considered
as though not outstanding

 

7

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11. Definitions. For purposes of the Notes, the following capitalized terms have
the following meaning:

“Affiliate” of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, “control” when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings that correspond to the foregoing.

“Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§
101-1532, as may be amended from time to time.

“Business Day” means any day, other than a Saturday, Sunday, or any other date
on which banks located in New York, New York are closed for business as a result
of federal, state, or local holiday.

“Holder” means a Person in whose name a Note is registered in the Note Register.

“Issue Date” means [            ], 2014.

“Majority Holders” means, at any time, the holders of at least a majority of the
Stated Principal Amount of Notes then outstanding.

“Material Adverse Effect” means (i) a change in the business, property,
operations or financial condition of Issuer and its Subsidiaries taken as a
whole that materially and adversely affects Issuer’s ability to perform its
obligations under this Note or (ii) a material adverse effect on the validity or
enforceability of this Note.

“Maturity Date” means September 30, 2015.

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.

“Regulation S” means Regulation S under the Securities Act (or any successor
provision), as it may be amended from time to time.

“Rule 144A” means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.

“SCE” means Southern California Edison Company, a California corporation which
is a majority-owned Subsidiary of Issuer.

“Stated Principal Amount” means the principal amount of this Note at maturity
hereof.

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which
(i) if a corporation, a

 

8

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majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a limited liability company,
partnership, association or other business entity, a majority of the partnership
or other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that Person
or a combination thereof. For purposes hereof, a Person or Persons shall be
deemed to have a majority ownership interest in a limited liability company,
partnership, association or other business entity if such Person or Persons
shall be allocated a majority of limited liability company, partnership,
association or other business entity gains or losses or shall be or control any
managing director or general partner of such limited liability company,
partnership, association or other business entity.

“Trust” means that certain Reorganization Trust created pursuant to the [Third
Amended Joint Chapter 11 Plan of Reorganization confirmed in In re Edison
Mission Energy, et al., Case No. 12-49219 (JPC), pending in the United States
Bankruptcy Court for the Northern District of Illinois].

12. Representations and Warranties of the Issuer. Issuer represent and warrants
as follows: (a) the execution, delivery, and performance by Issuer of the Notes
are within its corporate powers, have been duly authorized by all necessary
corporate action, and do not violate (i) any provision of law, (ii) any
agreement, indenture, note, or other instrument binding upon it or (iii) its
charter or by-laws, except to the extent that such violation in the case of
clauses (i) and (ii) would not, in the aggregate, reasonably be expected to have
a Material Adverse Effect; (b) all authorizations, approvals, and other actions
by, and notices to and filings with all governmental authorities required for
the due execution, delivery and performance of this Note have been obtained or
made and are in full force and effect, except to the extent that the failure to
obtain or make, or to have in full force and effect, such authorizations,
approvals, other actions, notices and filings would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect; and (c) each Note is a
legally valid and binding obligation of Issuer enforceable against Issuer in
accordance with its terms except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws or equitable principles
relating to or limiting creditors’ rights generally.

13. Representations and Warranties of the Trust.

(a) The Trust, by its acceptance of this Note on the Issue Date, represents,
warrants and agrees that:

(i) it is an accredited investor within the meaning of Rule 501(a) of Regulation
D under the Securities Act (“Regulation D”) by reason of paragraph (7) of Rule
501(a);

(ii) it has not solicited offers for, or offered or sold, and will not solicit
offers for, or offer or sell, the Notes by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act; and

 

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(iii) it has not solicited offers for, or offered or sold, and will not solicit
offers for, or offer or sell, the Notes except in compliance with the provisions
set forth in the Restricted Note Legend and this Note.

(b) The Issuer has issued this Note in reliance upon the representations,
warranties, and agreements of the Trust set forth in clause (a) of this Section.

14. Replacement. Upon receipt of evidence reasonably satisfactory to Issuer of
the loss, theft, destruction or mutilation of this Note, upon receipt of an
indemnity reasonably satisfactory to Issuer and, in the case of any such
mutilation, upon the surrender and cancellation of this Note, Issuer shall
execute and deliver, in lieu thereof, a new Note of like tenor and dated the
date of such lost, stolen, destroyed or mutilated Note, which new Note or Notes
shall only be issued in the name of the Trust notwithstanding the Holder of
record of such new Note will be as reflected in the Register. Any Note in lieu
of which any such new Note has been so executed and delivered by Issuer shall
not be deemed to be an outstanding Note.

15. Notices. Each of the Issuer, the Trust and any other Holder of this Note, by
its acceptance of this Note or any interest therein, agrees that (a) all notices
hereunder shall be deemed given if in writing and delivered, if sent by courier,
or by registered or certified mail (return receipt requested) to the addresses
specified in this Section 15 (or at such other addresses as shall be specified
by like notice), (b) all notices to any Holder hereunder shall be sent to such
address as provided to the Registrar, and (c) all notices to Issuer and Holders’
Payment Agent hereunder shall be sent to:

Issuer:

Edison International

2244 Walnut Grove Avenue

Rosemead, California 91770

Attn.: Chief Financial Officer

With a copy to:

Munger Tolles & Olson LLP

355 South Grand Ave.

Los Angeles, California 90071

Attn.: Thomas B. Walper

Attn.: Seth Goldman

Holders’ Payment Agent and Registrar:

[to come]

With a copy to:

[to come]

16. Business Days. If any payment is due, or any time period for giving notice
or taking action expires, on a Business Day, the payment shall be due and
payable on, and the time

 

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period shall automatically be extended to, the next Business Day, without any
adjustment for interest to such next Business Day.

17. Submission to Jurisdiction; Forum Non Conveniens. Each of the Issuer and
Trust, by its acceptance of this Note on the Issue Date, agrees, which agreement
shall be binding on each Holder, that any suit, action or proceeding arising out
of this Note will be tried exclusively in any court located in the city and
county of New York, and agrees to submit to the jurisdiction of, and to venue
in, such courts, and hereby further irrevocably waives and agrees not to plead
or claim that such court is not a convenient forum for any such suit, action or
proceeding.

18. Governing Law. All issues and questions concerning the construction,
validity, enforcement, and interpretation of the Notes shall be governed by, and
construed in accordance with, the law of the State of New York, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York. In
furtherance of the foregoing, the internal law of the State of New York shall
control the interpretation and construction of the Notes, even though under that
jurisdiction’s choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily apply.

19. Usury Laws. It is the intention of Issuer and the Holder of this Note to
conform strictly to all applicable usury laws now or hereafter in force, and any
interest payable under this Note shall be subject to reduction to the amount not
in excess of the maximum legal amount allowed under the applicable usury laws as
now or hereafter construed by the courts having jurisdiction over such matters.
If the maturity of this Note is accelerated automatically or by reason of an
election by the Holder hereof resulting from an Event of Default, voluntary
prepayment by Issuer or otherwise, then earned interest may never include more
than the maximum amount permitted by law, computed from the date hereof until
payment, and any interest in excess of the maximum amount permitted by law shall
be canceled automatically and, if theretofore paid, shall at the option of the
Holder hereof either be rebated to Issuer or credited on the principal amount of
this Note, or if this Note has been paid, then the excess shall be rebated to
Issuer. The aggregate of all interest (whether designated as interest, service
charges, points or otherwise) contracted for, chargeable, or receivable under
this Note shall under no circumstances exceed the maximum legal rate upon the
unpaid principal balance of this Note remaining unpaid from time to time. If
such interest does exceed the maximum legal rate, it shall be deemed a mistake
and such excess shall be canceled automatically and, if theretofore paid,
rebated to Issuer or credited on the principal amount of this Note, or if this
Note has been repaid, then such excess shall be rebated to Issuer.

20. Waiver of Jury Trial. Each of the Issuer, the Trust and any other Holder of
this Note, by its acceptance of this Note or any interest therein, agrees that
it hereby waives, to the fullest extent permitted by law, any right to jury
trial of any claim, demand, action, or cause of action (i) arising under this
Note or (ii) in any way connected with or related or incidental to the dealings
in respect of this Note, in each case whether now existing or hereafter arising,
and whether in contract, tort, equity, or otherwise. Issuer, Trust and any other
Holder of this Note, by its acceptance of this Note, or any interest therein,
hereby agree and consent that any such claim, demand, action, or cause of action
shall be decided by court trial without a jury and that each of the Trust, any
other Holder of this Note and Issuer may file an original counterpart or a

 

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copy of this Note with any court as written evidence of the consent of the
Trust, the Holder of this Note or Issuer to the waiver of the Trust’s, any
Holder of this Note’s, or the Issuer’s right to trial by jury.

21. No Waiver. The rights and remedies of the Holder of this Note expressly set
forth in this Note are cumulative and in addition to, and not exclusive of, all
other rights and remedies available at law, in equity or otherwise. No failure
or delay on the part of any Holder in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, power or privilege or be construed
to be a waiver of any Event of Default. No course of dealing between Issuer and
the Trust or any other Holder of this Note or any of their respective
Affiliates, agents or employees shall be effective to amend, modify or discharge
any provision of this Note or to constitute a waiver of any Event of Default. No
notice to or demand upon Issuer in any case shall entitle Issuer to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the right of the Trust on behalf of the Holder of this Note to
exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.

22. Costs. Issuer agrees to pay all costs and expenses, including reasonable
attorneys’ fees and disbursements, costs of collection and court costs, incurred
or paid by any Holder of this Note in connection with enforcement of this Note
following an Event of Default.

23. Assignment; Successors. The rights and obligations of Issuer and any Holder
of this Note shall be binding upon and benefit the successors and permitted
assigns and transferees of Issuer and any Holder of this Note, except that
Issuer may not assign or transfer its rights hereunder or any interest herein or
delegate its liabilities, obligations or duties hereunder without the prior
written consent of the Majority Holders. Notwithstanding the foregoing, Issuer
may enter into any merger, consolidation or amalgamation, or liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially all of its
property, business or assets, without the consent of the Holders; provided that
(i) if Issuer is merged or consolidated with another Person, Issuer shall be the
continuing or surviving corporation after giving effect to such merger or
consolidation or the continuing or surviving corporation shall assume Issuer’s
obligations hereunder expressly or by operation of law, and (ii) if Issuer
conveys, sells, leases, assigns, transfers or otherwise disposes of all or
substantially all of its property, business and assets to another Person, such
Person shall assume expressly Issuer’s rights and obligations hereunder.

24. Waiver of Presentment, Demand and Dishonor. Issuer hereby waives presentment
for payment, protest, demand, notice of protest, notice of nonpayment and
diligence with respect to this Note, and waives and renounces all rights to the
benefits of any statute of limitations or any moratorium, appraisement,
exemption, or homestead now provided or that hereafter may be provided by any
federal or applicable state statute, including but not limited to exemptions
provided by or allowed under the Bankruptcy Code, both as to itself and as to
all of its property, whether real or personal, against the enforcement and
collection of this Note (and any and all obligations hereunder) and any and all
extensions, renewals, and modifications hereof. In any action on this Note, the
Holder of this Note need not produce or file the original

 

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of this Note, but need only file a photocopy of this Note certified by the
Holder hereof to be a true and correct copy of this Note.

25. Usage. Whenever the words “include,” “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation.” All references to “$” and dollars shall be deemed to refer to
United States currency unless otherwise specifically provided.

* * * * *

 

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IN WITNESS WHEREOF, Issuer has executed and delivered this Note on
[                    ], 2014.

 

Edison International By:  

 

Name:   Its:  

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EXHIBIT A

TRANSFER CERTIFICATE

In connection with any transfer of any of the Notes bearing the Restricted Note
Legend, the undersigned registered owner of this Note hereby certifies with
respect to $         principal amount at maturity of the above-captioned Notes
for which registration of transfer is requested (the “Transferred Notes”), that
such transfer complies with the Restricted Note Legend set forth on the face of
the Transferred Notes for the reason checked below:

 

  ¨ A transfer of the Transferred Notes is made to Issuer or any of its
subsidiaries; or

 

  ¨ The transfer of the Transferred Notes is pursuant to an effective
registration statement under the Securities Act; or

 

  ¨ The transfer of the Transferred Notes complies with Rule 144A under the
Securities Act; or

 

  ¨ The transfer of the Transferred Notes complies with Regulation S under the
Securities Act; or

 

  ¨ The transfer of the Transferred Notes is made to an institutional
“Accredited Investor” acquiring the Transferred Notes for its own account or for
the account of an institutional “Accredited Investor”; or

 

  ¨ The transfer of the Transferred Notes is pursuant to another available
exemption from the registration requirement of the Securities Act.

and unless the box below is checked, the undersigned confirms that, to the
undersigned’s knowledge, such Notes are not being transferred to an Affiliate of
Issuer.

 

  ¨ The transferee is an Affiliate of Issuer.

Capitalized terms used in this certificate have the meanings assigned to them in
the Note.

 

DATE:  

 

   

 

      Signature(s)

(If the registered owner is a corporation, partnership or fiduciary, the title
of the Person signing on behalf of such registered owner must be stated.)

 

A-1

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EXHIBIT B

Edison International

2244 Walnut Grove Avenue

Rosemead, California 91770

Attention:  Chief Financial Officer

Registrar

 

 

 

 

 

  Re: Edison International Promissory Notes due 2015 (the “Notes”)

Ladies and Gentlemen:

In connection with our proposed sale of $         aggregate principal amount at
maturity of the Notes, we hereby certify that such transfer is being effected
pursuant to and in accordance with Rule 144A (“Rule 144A”) under the United
States Securities Act of 1933, as amended (the “Securities Act”), and,
accordingly, we hereby further certify that the Notes are being transferred to a
person that we reasonably believe is purchasing the Notes for its own account,
or for one or more accounts with respect to which such person exercises sole
investment discretion, and such person and each such account is a “qualified
institutional buyer” within the meaning of Rule 144A in a transaction meeting
the requirements of Rule 144A and such Notes are being transferred in compliance
with any applicable blue sky Notes laws of any state of the United States.

You are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.

 

        Very truly yours,         [Name of Transferor]   By:       Authorized
Signature

Signature Guarantee:  

 

(Signature must be guaranteed by a participant in a recognized signature
guarantee medallion program)

 

B-1

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EXHIBIT C

FORM OF CERTIFICATE TO BE DELIVERED

IN CONNECTION WITH TRANSFERS

PURSUANT TO REGULATION S

Edison International

2244 Walnut Grove Avenue

Rosemead, California 91770

Attention:  Chief Financial Officer

Registrar:

 

 

 

 

 

  Re: Edison International Promissory Notes due 2015 (the “Notes”)

Ladies and Gentlemen:

In connection with our proposed sale of $         aggregate principal amount at
maturity of the Notes, we confirm that such sale has been effected pursuant to
and in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the “Securities Act”), and, accordingly, we represent that:

(1) the offer of the Notes was not made to a person in the United States;

(2) either (a) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States or (b) the
transaction was executed in, on or through the facilities of a designated
off-shore Notes market and neither we nor any person acting on our behalf knows
that the transaction has been pre-arranged with a buyer in the United States;

(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S,
as applicable; and

(4) the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act.

In addition, if the sale is made during a restricted period and the provisions
of Rule 903(b) or Rule 904(b) of Regulation S are applicable thereto, we confirm
that such sale has been made in accordance with the applicable provisions of
Rule 903(b) or Rule 904(b), as the case may be.

 

C-1

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You are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.

 

  Very truly yours,  

 

      [Name of Transferor] By:     Authorized Signature

 

Signature guarantee:  

 

(Signature must be guaranteed by a participant in a recognized signature
guarantee medallion program)

 

C-2

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EXHIBIT D

ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer $         in Stated Principal Amount of Notes
represented by Certificate No.(s)              to:

 

 

 

(Insert assignee’s legal name)

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint to transfer this Note in the Note Register. The agent
may substitute another to act for him.

 

Date:  

 

 

Your Signature: (Sign exactly as your name appears in the Note Register)

 

Signature Guarantee:  

 

(Signature must be guaranteed by a participant in a recognized signature
guarantee medallion program).

 

D-1

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EXHIBIT E

INFORMATION RELATING TO REGISTERED HOLDER

 

Name and Address of Holder

  

Stated Principal

Amount of Notes*

   * Must be at least $10 million

(1) All payments by wire transfer of

immediately available funds to:

   For the account of:   

with sufficient information

to identify the source and

application of such funds.

  

(2) All notices of payments and written

confirmations of such wire transfers:

   (3) All other communications:    (4) Tax ID No.:   

 

E-1

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THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS NOTE, BY
ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR
ACCOUNT FOR WHICH IT HAS PURCHASED NOTES, TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH NOTE, ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO
A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN
THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS
AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE NOTE FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
MINIMUM PRINCIPAL AMOUNT AT MATURITY OF THE NOTES OF $10,000,000, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE ISSUER’S AND HOLDERS’ PAYMENT AGENT’S RIGHTS PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM.

THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET
SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. A HOLDER MAY OBTAIN THE
ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY
FOR SUCH NOTE BY SUBMITTING A REQUEST FOR SUCH INFORMATION TO ISSUER AT THE
FOLLOWING ADDRESS: 2244 WALNUT GROVE AVENUE, ROSEMEAD, CALIFORNIA 91770,
ATTENTION: CHIEF FINANCIAL OFFICER.

 

1

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PROMISSORY NOTE

[No.             ]

Due September 30, 2016

[                    ], 2014 Stated Principal Amount at Maturity of $[Adjustment
Amount multiplied by 0.5 multiplied by the Interest Factor]

For value received, Edison International, a Delaware corporation (“Issuer”),
hereby promises to pay to the Trust (as defined herein), or its registered
assigns or transferees (as applicable), by payment to the Holders’ Payment Agent
(as defined herein), the principal amount at maturity of $[        ] on the
Maturity Date.

This Note is one of a series of Notes in an aggregate Stated Principal Amount
(as defined in Section 11 hereof) of $         million. The term “Notes”, as
used in this Note, includes each Note issued in replacement of and/or to any
transferee of any Note (or any permitted portion thereof) issued in accordance
with Sections 6(a), 8(b) and 14 of this Note, if any; provided that, if at any
time, this Note is the only “Note” issued and outstanding, then all reference
herein to “Notes” shall be deemed to refer to this Note. Capitalized terms used
in this Note and not defined elsewhere herein shall have the same meanings set
forth in Section 11 hereof.

1. Maturity. Issuer promises to pay to the Holders’ Payment Agent for the
benefit of the Holders the Stated Principal Amount on the Maturity Date.

2. Interest. No cash interest shall be paid and no cash interest will accrue on
the Notes, except as provided in this Section 2. If the Stated Principal Amount
is not paid when due, whether at maturity, upon acceleration or otherwise, then
the overdue amount shall, to the extent permitted by law, bear interest at the
rate of 7.00% per annum, compounded semiannually, which interest shall accrue
from the date such overdue amount was originally due to the date that payment of
such amount, including the interest thereon, has been made or duly provided for.
All such interest shall be payable in cash on demand.

3. Prepayments. Issuer may prepay the Notes in full but not in part at any time
prior to the Maturity Date by payment to the Holders’ Payment Agent of the
Stated Principal Amount that would be due at the stated Maturity Date of the
Notes, notwithstanding that principal will not have accreted in the full face
amount of such Note on such prepayment date.

4. No Right of Setoff. No amounts owed pursuant to this Note are subject to
setoff, counterclaim, deduction or abatement of any kind, regardless of whether
this Note is then held by the Trust or any other Holder.

5. Registrar and Holders’ Payment Agent.

(a) The Trust has notified the Issuer that it intends to maintain, at its sole
expense, on behalf of the Holders an office or agency where the Notes may be
presented for registration of transfer or for exchange (the “Registrar”) and an
office or agency where the Notes

 

2

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may be presented for payment (the “Holders’ Payment Agent”). Any register of the
Notes kept by the Registrar of their transfer and exchange, as permitted
hereunder, shall be referred to herein as the “Note Register”. The Trust and
each transferee, assignee, participant or any other Person receiving any
interest in any Note irrevocably agrees by its acceptance of this Note or any
interest herein that the Issuer has no obligation to examine the Note Register
or to determine the identity of any Holder of any Note or any interest therein.
If the Registrar maintains the Note Register, the Registrar shall, at the
request of the Issuer or at the request of any Holder, provide a list of the
registered Holders and the Stated Principal Amount of their Notes to the Issuer
or the requesting Holder, as applicable, promptly after any such request. The
Issuer’s sole responsibility with respect to payment is to pay the Holders’
Payment Agent the Stated Principal Amount when due and payable.

(b) The Trust and each Holder by accepting an assignment or transfer of, or
participation in, this Note agrees that the Trust is initially appointed by the
Holders on the Issue Date as the Registrar and Holders’ Payment Agent for the
Notes, and that a successor Registrar and/or Holders’ Payment Agent may be
appointed in accordance with the terms of this Note. The Majority Holders may
remove any Registrar or Holders’ Payment Agent upon twenty Business Days written
notice to such Registrar or Holders’ Payment Agent and the Issuer; provided,
however, that no such removal shall become effective until (a) acceptance of any
appointment by a successor as evidenced by an appropriate agreement entered into
by the Trust, with the approval of the Majority Holders, and such successor
Registrar or Holders’ Payment Agent, as the case may be, which agreement shall
state its effective date, and (b) written acknowledgement (not to be
unreasonably withheld, delayed or conditioned) by the Issuer of the appointment
of such successor Registrar or Holders’ Payment Agent as of 12:01 a.m. (New York
City time) on the stated effective date.

(c) By no later than noon (New York City time) on the date on which the Note is
due and payable, Issuer shall irrevocably deposit with the Holders’ Payment
Agent U.S. dollars in the amount of the Stated Principal Amount in immediately
available funds. The Holders of the Notes agree by their acceptance of the Notes
that each must surrender the Notes to the Holders’ Payment Agent to collect
payment on the Notes.

(d) Each Holder acknowledges and agrees by its acceptance of an assignment,
transfer of or participation in this Note that the Holders’ Payment Agent and
Registrar:

(i) shall have no duties or obligations to the Holders other than those
specifically set forth herein or as may subsequently be agreed to in writing by
the Holders’ Payment Agent and no implied duties or obligations shall be read
into this Note;

(ii) shall have no obligation to make payment unless Issuer has caused to be
provided to it the necessary immediately available funds for such payment;

(iii) shall be regarded as making no representations regarding, and as having no
responsibilities as to, the validity, sufficiency, value, or genuineness of the
Notes;

 

3

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(iv) may rely on, and shall be fully authorized and protected in acting or
failing to act upon any certificate, instrument, opinion, notice, letter,
telegram, telex, facsimile transmission or other document or security delivered
to it;

(v) shall not be liable or responsible to the Holders for any failure of Issuer
to comply with any of its obligations, including without limitation obligations
under this Note or applicable securities laws;

(vi) may rely on and shall be authorized and protected in acting or failing to
act upon the written instructions of authorized officers of any Holder;

(vii) shall be held harmless in relying on the oral or written advice or opinion
of counsel in respect of action taken, suffered or omitted by it hereunder in
good faith and in accordance with such oral or written advice or opinion of such
counsel; and

(viii) assumes no responsibility and shall not be liable for loss or damage due
to errors unless said errors are caused by the Holders’ Payment Agent’s gross
negligence, bad faith or intentional misconduct.

6. Exchanges; Transfers.

(a) Upon surrender of this Note by the Trust or the Registrar to the Issuer for
exchange, Issuer at its sole expense shall execute and deliver in exchange
therefor a new Note or Notes, as the case may be, as requested by the Trust,
which aggregate the principal amount at maturity of the Note(s) so exchanged and
in such permitted denominations as the Trust may request, and otherwise of like
tenor, issued in the name of the Trust and which may be registered in the Note
Register as the Trust may request. The issuance of new Note(s) shall be made
without charge to the Trust for any issuance tax in respect thereof or other
cost incurred by Issuer in connection with such issuance. The Notes may not be
exchanged for new Notes in an amount representing less than $10.0 million in
Stated Principal Amount without the consent of Issuer, which may be given or
withheld in its sole and absolute discretion.

(b) This Note is a registered Note. Upon delivery by a Holder to the Registrar
of a Form of Assignment in the form attached hereto as Exhibit D, together with
any required certificates or letters described in Section 6(c) below and the
information set forth on Exhibit E attached hereto, the Registrar shall record
the transfer in the Note Register. The Issuer shall not be required to reissue
any Note upon transfer, and the Holders’ Payment Agent, the Registrar and the
Issuer may deem and treat the Person in whose name a Note is registered in the
Note Register as the absolute owner of such Note for the purpose of receiving
payment thereon and for all other purposes. The Notes may not be transferred,
assigned, or otherwise disposed of, nor may any participation interest be
created therein, in an amount representing less than $10.0 million in Stated
Principal Amount without the consent of Issuer, which may be given or withheld
in its sole and absolute discretion. Each Holder by its acceptance of an
assignment, transfer of, or participation in, this Note hereby agrees to
indemnify the Issuer and the Holders’ Payment Agent and Registrar against any
loss or liability that may result from the transfer, exchange or assignment of
such Holders’ Note in violation of any provision of this Note or applicable
United States federal or state securities laws.

 

4

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(c) In connection with the transfer of a Note bearing the Restricted Note
Legend, the proposed transferor shall deliver to the Registrar and the Issuer an
appropriately completed certificate of transfer in the form attached hereto as
Exhibit A. In connection with the transfer of a Note bearing the Restricted Note
Legend made pursuant to Rule 144A or Regulation S, the proposed transferee shall
execute and deliver to the Registrar and the Issuer a letter substantially in
the form attached hereto as Exhibit B or Exhibit C, as applicable.

(d) Each Person holding a direct or beneficial right to receive amounts under
the Note, by its acceptance of such right, agrees that it shall deliver to
Registrar and Holders’ Payment Agent (i) at or before the time such Person
acquires an interest in the Note, including pursuant to a transfer or assignment
and (ii) at such times as are reasonably requested by Registrar or Holders’
Payment Agent, any documentation prescribed by law (including the applicable
properly executed Form W-8 or Form W-9), or reasonably requested by Registrar or
Holders’ Payment Agent, certifying as to any entitlement of such Person to an
exemption from, or reduction in, any withholding tax with respect to any
payments to be made to such person under the Note or otherwise required or
reasonably necessary to establish such Person’s status for withholding tax or
information reporting purposes in an applicable jurisdiction or to enable
Issuer, Registrar and Holders’ Payment Agent to comply with applicable Law. Each
such Person further agrees that it shall, whenever a lapse in time or change in
circumstances renders such documentation expired, obsolete or inaccurate in any
material respect, deliver promptly to Registrar and Holders’ Payment Agent
updated or other appropriate documentation or promptly notify Registrar and
Holders’ Payment Agent of its inability to do so.

7. Rule 144A Information. At any time when Issuer is not subject to Section 13
or 15(d) of the Exchange Act, upon the request of a Holder or any beneficial
holder of this Note, Issuer will promptly furnish or cause to be furnished Rule
144A Information (as defined below) to such Holder or any beneficial holder of
this Note, or to a prospective purchaser of any such security designated by any
such Holder or beneficial holder, as the case may be, to the extent required to
permit compliance by such Holder or beneficial holder with Rule 144A under the
Securities Act in connection with the resale of any such Note. “Rule 144A
Information” shall be such information as is specified pursuant to Rule
144A(d)(4) under the Securities Act.

8. Legend; Legend Removal.

(a) Each Note shall be imprinted with a legend in substantially the form
imprinted on the first page of this Note (the first paragraph of which is
referred to as the “Restricted Note Legend”).

(b) The Restricted Note Legend shall not be removed unless there is delivered to
the Issuer and the Registrar such satisfactory evidence, which shall include an
opinion of counsel, as may be reasonably required by the Issuer and the
Registrar, that neither the Restricted Note Legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the Securities Act or that such Notes are not “restricted” within the
meaning of Rule 144 under the Securities Act. Upon provision of such
satisfactory evidence, the Issuer shall deliver a Note that does not bear the
Restricted Note Legend in exchange for a Note that does bear the Restricted Note
Legend; provided that each such Note shall only be issued in the

 

5

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name of the Trust and shall be in a minimum $10.0 million Stated Principal
Amount, unless Issuer consents in its sole and absolute discretion to a lesser
Stated Principal Amount.

9. Events of Default.

(a) For purposes of this Note, an “Event of Default” shall be deemed to have
occurred if any one or more of the following conditions or events shall occur:

(i) Issuer defaults in payment of the Stated Principal Amount when due and
payable;

(ii) either Issuer or SCE makes an assignment for the benefit of creditors or
admits in writing its inability to pay its debts generally as they become due;
or an order, judgment or decree is entered adjudicating Issuer or SCE bankrupt
or insolvent; or any order for relief with respect to Issuer or SCE is entered
under the Bankruptcy Code; or Issuer or SCE petitions or applies to any tribunal
for the appointment of a custodian, trustee, receiver or liquidator of Issuer,
or of any substantial part of the assets of Issuer or SCE, or commences any
proceeding (other than a proceeding for the voluntary liquidation and
dissolution of any Subsidiary) relating to Issuer or SCE under any bankruptcy
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction; or any such petition or application is
filed, or any such proceeding is commenced, against Issuer or SCE and either
(A) Issuer or SCE by any act indicates its approval thereof, consent thereto or
acquiescence therein or (B) such petition, application or proceeding is not
dismissed within 60 days;

(iii) any representation or warranty made by Issuer in Section 12 to the Trust
in connection with the execution and delivery of this Note proves to have been
incorrect in any material respect on the Issue Date;

(iv) Issuer defaults in the performance of any of its covenants or agreements
contained in this Note (other than payment of the Stated Principal Amount when
due and payable) and such default shall continue unremedied for 30 days after
the Holders of at least 25% of Stated Principal Amount of all Notes then
outstanding shall have given notice thereof to Issuer through the Holders’
Payment Agent, which notice shall include a certification from the Registrar
that such Holders hold the required percentage of Notes then outstanding; or

(v) an intentional violation by Issuer of the implied covenant of good faith and
fair dealing, which violation is designed to (i) reduce the value of the Notes
or (ii) to render the Notes valueless.

The foregoing shall constitute “Events of Default” whatever the reason or cause
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body and regardless of the effects of any subordination provisions.

(b) If an Event of Default of the type described in Section 9(a)(ii) has
occurred, the stated principal amount at maturity of the Notes shall become
immediately due and

 

6

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payable without any action on the part of the Holders of the Notes, and Issuer
shall immediately pay to the Holders’ Payment Agent all amounts due and payable
with respect to the Notes. If any other Event of Default (other than an Event of
Default described in Section 9(a)(i) or 9(a)(ii)) has occurred, the Majority
Holders may declare by written notice to Issuer through the Holders’ Payment
Agent, which notice shall include a certification from the Registrar that such
Holders hold the required percentage of Notes then outstanding, the Notes to be
immediately due and payable and may demand immediate payment of the Stated
Principal Amount, which declaration of payment shall be binding on all of the
Holders. The Holders’ Payment Agent shall give also give prompt written notice
of any such demand to the other Holders.

10. Amendment and Waiver.

(a) The provisions of the Notes may be amended and Issuer may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if Issuer has obtained the written consent of the Majority Holders;
provided that, without the consent of each Holder affected, an amendment,
supplement or waiver may not (with respect to any Notes held by a non-consenting
Holder thereof):

(i) reduce the principal amount at maturity of the Notes outstanding whose
Holders must consent to an amendment;

(ii) reduce the principal amount at maturity of any Note or extend the maturity
of any Note;

(iii) make any Note payable in money other than that stated in the Note;

(iv) make any change to the amendment provisions of this Note which require each
Holder’s consent or to the waiver provisions of this Note; or

(v) subordinate, in right of payment, the Notes to any other indebtedness for
borrowed money of Issuer.

(b) The Majority Holders may on behalf of the Holders of all the Notes waive any
past default under this Note and its consequences, except a default (i) in any
payment in respect of the principal amount of or default interest on any Notes,
or (ii) in respect of a covenant or provision hereof which under this Note that
cannot be modified or amended without the consent of the Holder of each
outstanding Note affected.

(c) It shall not be necessary for the consent of the Holders under this
Section 10 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof. After an
amendment under this Section 10 becomes effective, Issuer shall mail to all
Holders a notice briefly describing such amendment. The failure to give such
notice to all Holders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section 10.

(d) In determining whether the Holders of the required aggregate principal
amount at maturity of Notes have concurred in any direction, waiver or consent,
Notes owned by the Issuer or by any Affiliate of the Issuer shall be considered
as though not outstanding

 

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11. Definitions. For purposes of the Notes, the following capitalized terms have
the following meaning:

“Affiliate” of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, “control” when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings that correspond to the foregoing.

“Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§
101-1532, as may be amended from time to time.

“Business Day” means any day, other than a Saturday, Sunday, or any other date
on which banks located in New York, New York are closed for business as a result
of federal, state, or local holiday.

“Holder” means a Person in whose name a Note is registered in the Note Register.

“Issue Date” means [            ], 2014.

“Majority Holders” means, at any time, the holders of at least a majority of the
Stated Principal Amount of Notes then outstanding.

“Material Adverse Effect” means (i) a change in the business, property,
operations or financial condition of Issuer and its Subsidiaries taken as a
whole that materially and adversely affects Issuer’s ability to perform its
obligations under this Note or (ii) a material adverse effect on the validity or
enforceability of this Note.

“Maturity Date” means September 30, 2016.

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.

“Regulation S” means Regulation S under the Securities Act (or any successor
provision), as it may be amended from time to time.

“Rule 144A” means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.

“SCE” means Southern California Edison Company, a California corporation which
is a majority-owned Subsidiary of Issuer.

“Stated Principal Amount” means the principal amount of this Note at maturity
hereof.

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which
(i) if a corporation, a

 

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majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a limited liability company,
partnership, association or other business entity, a majority of the partnership
or other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that Person
or a combination thereof. For purposes hereof, a Person or Persons shall be
deemed to have a majority ownership interest in a limited liability company,
partnership, association or other business entity if such Person or Persons
shall be allocated a majority of limited liability company, partnership,
association or other business entity gains or losses or shall be or control any
managing director or general partner of such limited liability company,
partnership, association or other business entity.

“Trust” means that certain Reorganization Trust created pursuant to the [Third
Amended Joint Chapter 11 Plan of Reorganization confirmed in In re Edison
Mission Energy, et al., Case No. 12-49219 (JPC), pending in the United States
Bankruptcy Court for the Northern District of Illinois].

12. Representations and Warranties of the Issuer. Issuer represent and warrants
as follows: (a) the execution, delivery, and performance by Issuer of the Notes
are within its corporate powers, have been duly authorized by all necessary
corporate action, and do not violate (i) any provision of law, (ii) any
agreement, indenture, note, or other instrument binding upon it or (iii) its
charter or by-laws, except to the extent that such violation in the case of
clauses (i) and (ii) would not, in the aggregate, reasonably be expected to have
a Material Adverse Effect; (b) all authorizations, approvals, and other actions
by, and notices to and filings with all governmental authorities required for
the due execution, delivery and performance of this Note have been obtained or
made and are in full force and effect, except to the extent that the failure to
obtain or make, or to have in full force and effect, such authorizations,
approvals, other actions, notices and filings would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect; and (c) each Note is a
legally valid and binding obligation of Issuer enforceable against Issuer in
accordance with its terms except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws or equitable principles
relating to or limiting creditors’ rights generally.

13. Representations and Warranties of the Trust.

(a) The Trust, by its acceptance of this Note on the Issue Date, represents,
warrants and agrees that:

(i) it is an accredited investor within the meaning of Rule 501(a) of Regulation
D under the Securities Act (“Regulation D”) by reason of paragraph (7) of Rule
501(a);

(ii) it has not solicited offers for, or offered or sold, and will not solicit
offers for, or offer or sell, the Notes by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act; and

 

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(iii) it has not solicited offers for, or offered or sold, and will not solicit
offers for, or offer or sell, the Notes except in compliance with the provisions
set forth in the Restricted Note Legend and this Note.

(b) The Issuer has issued this Note in reliance upon the representations,
warranties, and agreements of the Trust set forth in clause (a) of this Section.

14. Replacement. Upon receipt of evidence reasonably satisfactory to Issuer of
the loss, theft, destruction or mutilation of this Note, upon receipt of an
indemnity reasonably satisfactory to Issuer and, in the case of any such
mutilation, upon the surrender and cancellation of this Note, Issuer shall
execute and deliver, in lieu thereof, a new Note of like tenor and dated the
date of such lost, stolen, destroyed or mutilated Note, which new Note or Notes
shall only be issued in the name of the Trust notwithstanding the Holder of
record of such new Note will be as reflected in the Register. Any Note in lieu
of which any such new Note has been so executed and delivered by Issuer shall
not be deemed to be an outstanding Note.

15. Notices. Each of the Issuer, the Trust and any other Holder of this Note, by
its acceptance of this Note or any interest therein, agrees that (a) all notices
hereunder shall be deemed given if in writing and delivered, if sent by courier,
or by registered or certified mail (return receipt requested) to the addresses
specified in this Section 15 (or at such other addresses as shall be specified
by like notice), (b) all notices to any Holder hereunder shall be sent to such
address as provided to the Registrar, and (c) all notices to Issuer and Holders’
Payment Agent hereunder shall be sent to:

Issuer:

Edison International

2244 Walnut Grove Avenue

Rosemead, California 91770

Attn.: Chief Financial Officer

With a copy to:

Munger Tolles & Olson LLP

355 South Grand Ave.

Los Angeles, California 90071

Attn.: Thomas B. Walper

Attn.: Seth Goldman

Holders’ Payment Agent and Registrar:

[to come]

With a copy to:

[to come]

16. Business Days. If any payment is due, or any time period for giving notice
or taking action expires, on a Business Day, the payment shall be due and
payable on, and the time

 

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period shall automatically be extended to, the next Business Day, without any
adjustment for interest to such next Business Day.

17. Submission to Jurisdiction; Forum Non Conveniens. Each of the Issuer and
Trust, by its acceptance of this Note on the Issue Date, agrees, which agreement
shall be binding on each Holder, that any suit, action or proceeding arising out
of this Note will be tried exclusively in any court located in the city and
county of New York, and agrees to submit to the jurisdiction of, and to venue
in, such courts, and hereby further irrevocably waives and agrees not to plead
or claim that such court is not a convenient forum for any such suit, action or
proceeding.

18. Governing Law. All issues and questions concerning the construction,
validity, enforcement, and interpretation of the Notes shall be governed by, and
construed in accordance with, the law of the State of New York, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York. In
furtherance of the foregoing, the internal law of the State of New York shall
control the interpretation and construction of the Notes, even though under that
jurisdiction’s choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily apply.

19. Usury Laws. It is the intention of Issuer and the Holder of this Note to
conform strictly to all applicable usury laws now or hereafter in force, and any
interest payable under this Note shall be subject to reduction to the amount not
in excess of the maximum legal amount allowed under the applicable usury laws as
now or hereafter construed by the courts having jurisdiction over such matters.
If the maturity of this Note is accelerated automatically or by reason of an
election by the Holder hereof resulting from an Event of Default, voluntary
prepayment by Issuer or otherwise, then earned interest may never include more
than the maximum amount permitted by law, computed from the date hereof until
payment, and any interest in excess of the maximum amount permitted by law shall
be canceled automatically and, if theretofore paid, shall at the option of the
Holder hereof either be rebated to Issuer or credited on the principal amount of
this Note, or if this Note has been paid, then the excess shall be rebated to
Issuer. The aggregate of all interest (whether designated as interest, service
charges, points or otherwise) contracted for, chargeable, or receivable under
this Note shall under no circumstances exceed the maximum legal rate upon the
unpaid principal balance of this Note remaining unpaid from time to time. If
such interest does exceed the maximum legal rate, it shall be deemed a mistake
and such excess shall be canceled automatically and, if theretofore paid,
rebated to Issuer or credited on the principal amount of this Note, or if this
Note has been repaid, then such excess shall be rebated to Issuer.

20. Waiver of Jury Trial. Each of the Issuer, the Trust and any other Holder of
this Note, by its acceptance of this Note or any interest therein, agrees that
it hereby waives, to the fullest extent permitted by law, any right to jury
trial of any claim, demand, action, or cause of action (i) arising under this
Note or (ii) in any way connected with or related or incidental to the dealings
in respect of this Note, in each case whether now existing or hereafter arising,
and whether in contract, tort, equity, or otherwise. Issuer, Trust and any other
Holder of this Note, by its acceptance of this Note, or any interest therein,
hereby agree and consent that any such claim, demand, action, or cause of action
shall be decided by court trial without a jury and that each of the Trust, any
other Holder of this Note and Issuer may file an original counterpart or a

 

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copy of this Note with any court as written evidence of the consent of the
Trust, the Holder of this Note or Issuer to the waiver of the Trust’s, any
Holder of this Note’s, or the Issuer’s right to trial by jury.

21. No Waiver. The rights and remedies of the Holder of this Note expressly set
forth in this Note are cumulative and in addition to, and not exclusive of, all
other rights and remedies available at law, in equity or otherwise. No failure
or delay on the part of any Holder in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, power or privilege or be construed
to be a waiver of any Event of Default. No course of dealing between Issuer and
the Trust or any other Holder of this Note or any of their respective
Affiliates, agents or employees shall be effective to amend, modify or discharge
any provision of this Note or to constitute a waiver of any Event of Default. No
notice to or demand upon Issuer in any case shall entitle Issuer to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the right of the Trust on behalf of the Holder of this Note to
exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.

22. Costs. Issuer agrees to pay all costs and expenses, including reasonable
attorneys’ fees and disbursements, costs of collection and court costs, incurred
or paid by any Holder of this Note in connection with enforcement of this Note
following an Event of Default.

23. Assignment; Successors. The rights and obligations of Issuer and any Holder
of this Note shall be binding upon and benefit the successors and permitted
assigns and transferees of Issuer and any Holder of this Note, except that
Issuer may not assign or transfer its rights hereunder or any interest herein or
delegate its liabilities, obligations or duties hereunder without the prior
written consent of the Majority Holders. Notwithstanding the foregoing, Issuer
may enter into any merger, consolidation or amalgamation, or liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially all of its
property, business or assets, without the consent of the Holders; provided that
(i) if Issuer is merged or consolidated with another Person, Issuer shall be the
continuing or surviving corporation after giving effect to such merger or
consolidation or the continuing or surviving corporation shall assume Issuer’s
obligations hereunder expressly or by operation of law, and (ii) if Issuer
conveys, sells, leases, assigns, transfers or otherwise disposes of all or
substantially all of its property, business and assets to another Person, such
Person shall assume expressly Issuer’s rights and obligations hereunder.

24. Waiver of Presentment, Demand and Dishonor. Issuer hereby waives presentment
for payment, protest, demand, notice of protest, notice of nonpayment and
diligence with respect to this Note, and waives and renounces all rights to the
benefits of any statute of limitations or any moratorium, appraisement,
exemption, or homestead now provided or that hereafter may be provided by any
federal or applicable state statute, including but not limited to exemptions
provided by or allowed under the Bankruptcy Code, both as to itself and as to
all of its property, whether real or personal, against the enforcement and
collection of this Note (and any and all obligations hereunder) and any and all
extensions, renewals, and modifications hereof. In any action on this Note, the
Holder of this Note need not produce or file the original

 

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of this Note, but need only file a photocopy of this Note certified by the
Holder hereof to be a true and correct copy of this Note.

25. Usage. Whenever the words “include,” “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation.” All references to “$” and dollars shall be deemed to refer to
United States currency unless otherwise specifically provided.

* * * * *

 

13

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IN WITNESS WHEREOF, Issuer has executed and delivered this Note on
[                    ], 2014.

 

Edison International By:  

 

Name:   Its:  

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EXHIBIT A

TRANSFER CERTIFICATE

In connection with any transfer of any of the Notes bearing the Restricted Note
Legend, the undersigned registered owner of this Note hereby certifies with
respect to $         principal amount at maturity of the above-captioned Notes
for which registration of transfer is requested (the “Transferred Notes”), that
such transfer complies with the Restricted Note Legend set forth on the face of
the Transferred Notes for the reason checked below:

 

  ¨ A transfer of the Transferred Notes is made to Issuer or any of its
subsidiaries; or

 

  ¨ The transfer of the Transferred Notes is pursuant to an effective
registration statement under the Securities Act; or

 

  ¨ The transfer of the Transferred Notes complies with Rule 144A under the
Securities Act; or

 

  ¨ The transfer of the Transferred Notes complies with Regulation S under the
Securities Act; or

 

  ¨ The transfer of the Transferred Notes is made to an institutional
“Accredited Investor” acquiring the Transferred Notes for its own account or for
the account of an institutional “Accredited Investor”; or

 

  ¨ The transfer of the Transferred Notes is pursuant to another available
exemption from the registration requirement of the Securities Act.

and unless the box below is checked, the undersigned confirms that, to the
undersigned’s knowledge, such Notes are not being transferred to an Affiliate of
Issuer.

 

  ¨ The transferee is an Affiliate of Issuer.

Capitalized terms used in this certificate have the meanings assigned to them in
the Note.

 

DATE:  

 

   

 

      Signature(s)

(If the registered owner is a corporation, partnership or fiduciary, the title
of the Person signing on behalf of such registered owner must be stated.)

 

A-1

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EXHIBIT B

Edison International

2244 Walnut Grove Avenue

Rosemead, California 91770

Attention: Chief Financial Officer

Registrar

 

 

 

 

 

  Re: Edison International Promissory Notes due 2016 (the “Notes”)

Ladies and Gentlemen:

In connection with our proposed sale of $         aggregate principal amount at
maturity of the Notes, we hereby certify that such transfer is being effected
pursuant to and in accordance with Rule 144A (“Rule 144A”) under the United
States Securities Act of 1933, as amended (the “Securities Act”), and,
accordingly, we hereby further certify that the Notes are being transferred to a
person that we reasonably believe is purchasing the Notes for its own account,
or for one or more accounts with respect to which such person exercises sole
investment discretion, and such person and each such account is a “qualified
institutional buyer” within the meaning of Rule 144A in a transaction meeting
the requirements of Rule 144A and such Notes are being transferred in compliance
with any applicable blue sky Notes laws of any state of the United States.

You are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.

 

        Very truly yours,         [Name of Transferor]   By:       Authorized
Signature

Signature Guarantee:  

 

(Signature must be guaranteed by a participant in a recognized signature
guarantee medallion program)

 

B-1

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EXHIBIT C

FORM OF CERTIFICATE TO BE DELIVERED

IN CONNECTION WITH TRANSFERS

PURSUANT TO REGULATION S

Edison International

2244 Walnut Grove Avenue

Rosemead, California 91770

Attention: Chief Financial Officer

Registrar:

 

 

 

 

 

  Re: Edison International Promissory Notes due 2016 (the “Notes”)

Ladies and Gentlemen:

In connection with our proposed sale of $         aggregate principal amount at
maturity of the Notes, we confirm that such sale has been effected pursuant to
and in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the “Securities Act”), and, accordingly, we represent that:

(1) the offer of the Notes was not made to a person in the United States;

(2) either (a) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States or (b) the
transaction was executed in, on or through the facilities of a designated
off-shore Notes market and neither we nor any person acting on our behalf knows
that the transaction has been pre-arranged with a buyer in the United States;

(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S,
as applicable; and

(4) the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act.

In addition, if the sale is made during a restricted period and the provisions
of Rule 903(b) or Rule 904(b) of Regulation S are applicable thereto, we confirm
that such sale has been made in accordance with the applicable provisions of
Rule 903(b) or Rule 904(b), as the case may be.

 

C-1

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You are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.

 

  Very truly yours,  

 

  [Name of Transferor] By:     Authorized Signature

 

Signature guarantee:  

 

(Signature must be guaranteed by a participant in a recognized signature
guarantee medallion program)

 

C-2

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EXHIBIT D

ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer $         in Stated Principal Amount of Notes
represented by Certificate No.(s)              to:

 

 

 

(Insert assignee’s legal name)

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint to transfer this Note in the Note Register. The agent
may substitute another to act for him.

 

Date:  

 

 

Your Signature: (Sign exactly as your name appears in the Note Register)

 

Signature Guarantee:  

 

(Signature must be guaranteed by a participant in a recognized signature
guarantee medallion program).

 

D-1

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EXHIBIT E

INFORMATION RELATING TO REGISTERED HOLDER

 

Name and Address of Holder

  

Stated Principal

Amount of Notes*

   * Must be at least $10 million

(1) All payments by wire transfer of

immediately available funds to:

   For the account of:   

with sufficient information

to identify the source and

application of such funds.

  

(2) All notices of payments and written

confirmations of such wire transfers:

   (3) All other communications:    (4) Tax ID No.:   

 

E-1

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Exhibit C

Escrow Agreement Term Sheet

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Escrow Agreement

Term Sheet

Capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the Settlement Agreement, dated as of February 18, 2014, by and
among Edison Mission Energy, Edison International, and the Consenting
Noteholders party thereto (the “Settlement Agreement”).

 

Parties   

The Reorganization Trust

 

Edison International

 

Escrow agent to be mutually agreed between EIX and the Reorganization Trust
(“Escrow Agent”)

Escrow Fund    The Reorganization Trust shall deposit with the Escrow Agent
$50,000,000 in cash or an equivalent face amount of EIX Notes. At any time, at
the option of the Reorganization Trust, it may deposit into the Escrow Fund an
equivalent face amount of EIX Notes in lieu of a corresponding amount of cash or
it may deposit cash in exchange for a corresponding face amount of EIX Notes.
Investments    Cash funds to be invested in cash equivalents to be agreed upon
by EIX and the Reorganization Trust. Notice of Claims    EIX may deliver a
written notice (a “Claim Notice”) to the Escrow Agent and the Reorganization
Trust at any time and from time to time prior to the distribution of all escrow
funds, stating that it is making a claim for reimbursement of potential actual
damages arising from a breach of the Reorganization Trust’s obligations under
Section 8(b) of the Settlement Agreement (a “Claim”). Each Claim Notice shall
(i) specify in reasonable detail all facts, conditions and events relevant to
such Claim; (ii) identify the specific provision(s) of the Settlement Agreement
that have been breached by the Reorganization Trust; (iii) include a statement
of the amount of potential actual damages arising from the breach (the “Claim
Amount”); and (iv) include copies of all written evidence thereof and third
party correspondence related thereto. Undisputed Claims    If the Escrow Agent
does not receive within 30 days of the Escrow Agent’s receipt of any Claim
Notice a written notice (a “Dispute Notice”) from the Reorganization Trust
objecting to the payment of all of the Claim Amount specified in such Claim
Notice, the Escrow Agent shall distribute to EIX from the cash portion of the
Escrow Fund the undisputed portion of such Claim Amount specified in such Claim
Notice. If the cash portion of the Escrow Fund is less than such undisputed
Claim Amount, the Escrow Agent shall distribute to EIX all of the cash in the
Escrow Fund and EIX shall be entitled to cancel EIX Notes deposited in the
Escrow

 

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   Fund having a face amount equal to the amount of such deficiency.
Disputed Claims    If the Escrow Agent receives a Dispute Notice with respect to
any Claim, the Escrow Agent will not distribute from the Escrow Fund the portion
of the Claim Amount that is disputed until it receives either a Joint
Instruction or a final non-appealable order of the Bankruptcy Court directing
the Escrow Agent to distribute such disputed portion of such Claim Amount. If
the cash portion of the Escrow Fund is less than the amount to be distributed,
the Escrow Agent shall distribute to EIX all of the cash in the Escrow Fund and
EIX shall be entitled to cancel EIX Notes deposited in the Escrow Fund having a
face amount equal to the amount of such deficiency. Joint Instruction    At any
time and from time to time, EIX and the Reorganization Trust may deliver to the
Escrow Agent a joint written instruction signed by both of them, and the Escrow
Agent shall distribute cash or EIX Notes from the Escrow Fund as indicated in
such joint written instruction. Automatic Releases   

On December 31, 2014, the Escrow Agent shall release cash or EIX Notes, as
applicable, from the Escrow Fund to the Reorganization Trust such that the
remaining amount then held in the Escrow Fund is the greater of (i) $25,000,000
and (ii) the aggregate amount of all unresolved disputes relating to any Claim
Notice delivered prior to such date (including any Claim Notice for which the
30-day period to deliver a Dispute Notice has not run) based on a third-party
claim.

 

On September 30, 2015, the Escrow Agent shall release cash or EIX Notes, as
applicable, from the Escrow Fund to the Reorganization Trust such that the
remaining amount then held in the Escrow Fund is the greater of (i) $15,000,000
and (ii) the aggregate amount of all unresolved disputes relating to any Claim
Notice delivered prior to such date (including any Claim Notice for which the
30-day period to deliver a Dispute Notice has not run) based on a third-party
claim.

 

On September 30, 2016, the Escrow Agent shall release all remaining cash and EIX
Notes in the Escrow Fund to the Reorganization Trust, other than to the extent
of the aggregate amount of all unresolved disputes relating to any Claim Notice
delivered prior to such date (including any Claim Notice for which the 30-day
period to deliver a Dispute Notice has not run) based on a third-party claim.

 

In no event shall the amount remaining in the Escrow Fund after any Automatic
Release be greater than $50,000,000. If EIX Notes have been deposited into the
Escrow Account, then the face amount of such EIX Notes shall be used for
determining such remaining amount.

Final Distribution    At such time on or after September 30, 2016 as there are
no outstanding

 

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   Claim Notices, the Escrow Agent shall release all cash and EIX Notes
remaining in the Escrow Fund to the Reorganization Trust for distribution
pursuant to the terms of the Amended Plan of Reorganization, and following such
distribution the Escrow Agreement shall automatically terminate. Escrow Earnings
   All taxes in respect of earnings on the Escrow Fund shall be the obligation
of the Reorganization Trust. Escrow Agent    The Escrow Agent shall have
obligations and duties and an indemnity customary for agreements of this type
and reasonably acceptable to the Escrow Agent. Each of EIX and the
Reorganization Trust shall severally be liable for one-half of the Escrow
Agent’s fees and any indemnity obligations with respect to the Escrow Agent.

 

3