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Exhibit 10.23.1    
  

Execution Copy  

 
 

AMENDED AND RESTATED INTERCOMPANY LOAN SUBORDINATION AGREEMENT    
  

        AMENDED
AND RESTATED INTERCOMPANY LOAN SUBORDINATION AGREEMENT (this "Agreement"), dated as of December 7, 2001, among
(i) EDISON MISSION HOLDINGS CO., a California corporation ("EME Holdings"), (ii) EDISON MISSION FINANCE CO., a California corporation
("Edison Mission Finance"), (iii) HOMER CITY PROPERTY HOLDINGS, INC., a California corporation ("Homer City
Holdings"), (iv) CHESTNUT RIDGE ENERGY CO., a California corporation ("Chestnut Ridge"), (v) MISSION ENERGY
WESTSIDE, INC., a California corporation ("MEW"), (vi) EME HOMER CITY GENERATION L.P., a Pennsylvania limited partnership
("Homer City" or the "Facility Lessee" and, together with EME Holdings, Edison Mission Finance, Homer
City Holdings, Chestnut Ridge and MEW, the "Loan Parties"), and (vii) THE BANK OF NEW YORK, as successor to UNITED STATES TRUST COMPANY OF NEW
YORK, as collateral agent for the holders of the Initial Lessor Notes (as such term is defined in the Participation Agreement) (in such capacity, the "Collateral
Agent"). 

 
 

RECITALS    
  

        WHEREAS, contemporaneously herewith Homer City, a wholly owned subsidiary of Edison Mission Midwest Holdings Co.
("Holdings"), will enter into a transaction pursuant to the eight Participation Agreements, in each case, by and among Homer City, the Owner Lessor (as
defined therein), Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Owner Manager, the Owner Participant (as defined therein), Homer City Funding LLC, as
Lender and the
Collateral Agent, as Indenture Trustee, Bondholder Trustee and Security Agent (as amended, modified and supplemented and in effect from time to time, each a "Participation
Agreement") whereby Homer City shall sell certain of its generating assets to the Owner Lessors and the Owner Lessors shall lease such generating assets to Homer City under
each Facility Lease; 

        WHEREAS,
the holders of the Initial Lessor Notes (as such term is defined in the Participation Agreement) have purchased the Initial Lessor Notes from the Owner Lessor and have been
granted a security interest in the Facility Lease as collateral for the Initial Lessor Notes; 

        WHEREAS,
Edison Mission Finance has entered into a Subordinated Loan Agreement, dated as of March 18, 1999 (the "Holdings Loan
Agreement"), with EME Holdings, pursuant to which EME Holdings has agreed to make loans ("Holdings Loans") to Edison Mission
Finance from time to time with the proceeds of the Holdings Loans on the terms and subject to the conditions contained in the Holdings Loan Agreement. 

        WHEREAS,
EME Homer City has entered into the Subordinated Loan Agreement, dated as of March 18, 1999 (the "Finance Loan
Agreement"), with Edison Mission Finance, pursuant to which Edison Mission Finance has agreed to make loans ("Finance Loans") to
EME Homer City from time to time with the proceeds of the Holdings Loans on the terms and subject to the conditions contained in the Finance Loan Agreement. 

        WHEREAS,
EME Homer City has entered into the Subordinated Revolving Loan Agreement, dated as of March 18, 1999 (the "Revolving Loan
Agreement"), with Edison Mission Finance, pursuant to which Edison Mission Finance has agreed to make loans ("Revolving Loans")
to EME Homer City from time to time on the terms and subject to the conditions contained in the Revolving Loan Agreement. 

        WHEREAS,
in connection with the transactions contemplated by the Participation Agreements, the parties hereto will agree to subordinate certain claims against Homer City under the
Holdings 

 

Loans, Finance Loans and Revolving Loans to the rights of holders of the Obligations (as defined herein); and 

        WHEREAS,
the execution and delivery of this Agreement is a condition precedent to each of the Participation Agreements. 

        NOW,
THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, each of the parties hereto hereby
agrees to amend and restate the Intercompany Loan Subordination Agreement between the Loan Parties and the Collateral Agent, dated as of March 18, 1999 (the
"Intercompany Loan Subordination Agreement") in its entirety as follows: 

ARTICLE I

DEFINITIONS; PRINCIPLES OF CONSTRUCTION  

        Section 1.1    Definitions.    (a) Unless otherwise expressly provided herein, capitalized terms used
but not defined in this Agreement, including in the Preamble and the Recitals, shall have the meanings given to such terms in each Participation Agreement. 

        (b)    Other Defined Terms.    The following terms, when used herein, shall have the following meanings: 

        "Intercompany
Borrower" shall mean any Loan Party in its capacity as borrower under any Intercompany Loan Agreement. 

        "Intercompany
Loans" shall mean any indebtedness by any Loan Party relating to an Intercompany Loan Agreement. 

        "Intercompany
Loan Agreement" shall mean the Holdings Loan Agreement, the Finance Loan Agreement, the Revolving Loan Agreement and any other loan agreement to be entered into from time
to time by an Intercompany Borrower and a Subordinated Party. 

        "Obligations"
shall mean (i) all obligations of Homer City owed now or hereafter under each of the Participation Agreements, and related Operative Documents, including without
limitation Basic Lease Rent, Termination Value, any Supplemental Rent (whether for indemnities, costs, expenses or otherwise) now or hereafter owed by Homer City to the Owner Lessor, the Security
Agent, the Lease Indenture Trustee, the Lender or the Bondholder Trustee under the Operative Documents and (ii) obligations owed now or hereafter by Homer City with respect to or on account of
Permitted Indebtedness. 

        "Proceeding"
shall have the meaning given to such term in Section 3.2. 

        "Secured
Party" shall mean any party to whom Homer City owes an Obligation. 

        "Senior
Claims" shall have the meaning given to such term in Section 2.1(a). 

        "Subordinated
Claims" shall have the meaning given to such term in Section 2.1(a). 

        "Subordinated
Notes" shall have the meaning given to such term in Section 2.1(c). 

        "Subordinated
Party" shall mean any Loan Party in its capacity as lender under an Intercompany Loan Agreement. 

        Section 1.2    Principles of Construction.    Unless otherwise expressly provided herein, the principles of
construction set forth in the Participation Agreement shall apply to this Agreement. 

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ARTICLE II

SUBORDINATION PROVISIONS  

        Section 2.1    Subordination of Intercompany Loans.    Until all Obligations shall have been indefeasibly paid
in full and the Facility Lease, the other Operative Documents and any agreement relating to Permitted Indebtedness have terminated in accordance with their terms: 

        (a)  (i) all
principal of, premium, if any, interest and any other amounts owing on any Intercompany Loan made by any Loan Party, whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred or created ("Subordinated Claims") shall be subordinate to the prior payment
of and junior in right of payment to all principal of, premium, if any, and interest (including
default interest and interest accruing after the initiation of any Proceeding whether or not allowed as a claim in such a Proceeding) owing in respect of all other Obligations owed by Homer City under
the Operative Documents and under any Permitted Indebtedness (collectively, "Senior Claims") 

        (b)  no
Loan Party shall, directly or indirectly, make any payment of principal or interest on account of, or transfer any collateral for any part of, any Subordinated
Claims; provided, however, that the Loan Parties may make regularly scheduled payments of interest and principal on account of Subordinated Claims so long as at such time Restricted Payments are
permitted to be made pursuant to the terms of the Amended and Restated Security Deposit Agreement; 

        (c)  the
Subordinated Parties shall not demand, sue for or accept any payment or collateral in respect of any Subordinated Claims, or take any other action to enforce their
rights or exercise any remedies in respect of any Subordinated Claims (whether upon the occurrence or during the continuation of an event of default under the related Intercompany Loan Agreement or an
event of default under any promissory notes evidencing Subordinated Claims (collectively, "Subordinated Notes" or otherwise), or cancel, set off or
otherwise discharge any part of any Subordinated Claims; and 

        (d)  no
Intercompany Borrower or Subordinated Party shall otherwise take any action prejudicial to or inconsistent with the priority position of the Secured Parties over the
Subordinated Parties created by this Section 2.1. 

        Section 2.2    Reliance.    All Senior Claims shall conclusively be deemed to have been created, contracted or
incurred in reliance on the subordination provisions contained in this Agreement and all dealings between the Loan Parties and each of the holders of Senior Claims shall be deemed to have been
consummated in reliance upon the subordination provisions contained herein. 

        Section 2.3    Other Holders.    The subordination provisions set forth in this Agreement shall be binding upon
transferees or assignees of the Subordinated Parties and upon each other holder of Subordinated Claims and shall inure to the benefit of transferees or assignees of the holders of the Initial Lessor
Notes and every other holder of Senior Claims. 

ARTICLE III

WRONGFUL COLLECTIONS  

        Section 3.1    Turnover.    Should any payment on account of, or any collateral for any part of, any
Subordinated Claims be received by the Subordinated Parties in violation of this Agreement, such payment or collateral shall be delivered forthwith to the Collateral Agent for application in
accordance
with the Amended and Restated Security Deposit Agreement and the other Security Documents. The Collateral Agent is irrevocably authorized to supply any required endorsement or assignment which may
have been omitted. Until so delivered, any such payment or collateral shall be held by the Subordinated Parties in trust for the Secured Parties and shall not be commingled with other funds or
property of the Subordinated Parties. 

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        Section 3.2    Survival of Obligation.    The obligation of the Subordinated Parties to deliver to the
Collateral Agent any payment or collateral received in connection with any Subordinated Claims, set forth in Section 3.1, shall survive and shall not be in any way affected by the result of any
(a) insolvency, bankruptcy, receivership, liquidation, reorganization, readjustment, composition or other similar proceeding relating to any Intercompany Borrower, its property or its creditors
as such, (b) proceeding for any liquidation, dissolution or other winding-up of any Intercompany Borrower, voluntary or involuntary, whether or not involving insolvency or
bankruptcy proceedings, (c) assignment for the benefit of creditors, (d) other marshalling of the assets of any Intercompany Borrower or (e) general meeting of creditors of any
Intercompany Borrower, in each case, under the laws of the United States or any other jurisdiction (any such event, a "Proceeding"). 

ARTICLE IV

PROCEEDINGS  

        Section 4.1    Commencement of Proceedings.    No Subordinated Party shall commence, or join with any other
creditor or creditors of any Intercompany Borrower in commencing, any Proceeding against such Intercompany Borrower. 

        Section 4.2    Payments and Distributions.    In the event of any Proceeding, until all Obligations shall have
been indefeasibly paid in full, any payment or distribution of any kind or character, whether in cash, property or securities, which, but for the subordination provisions of this Agreement would
otherwise be payable or deliverable upon or in respect of Subordinated Claims, shall instead be paid over or delivered to the Collateral Agent in accordance with Article III and no holder of
Subordinated Claims shall receive any such payment or distribution or any benefit therefrom. 

        Section 4.3    Enforcement of Subordinated Claims.    (a) Enforcement by the Secured Parties. At any
Proceeding, until all Obligations shall have been indefeasibly paid in full, the Secured Parties (or the Collateral Agent on behalf of the Secured Parties) are hereby irrevocably authorized (but not
required) to: 

          (i)  enforce
claims comprising Subordinated Claims in the name of the Subordinated Parties by proof of debt, proof of claim, suit or otherwise; 

        (ii)  collect
any assets of any Intercompany Borrower distributed, divided or applied by way of dividend or payment, and any securities issued, in each case, on account of
Subordinated Claims and apply the same, or the proceeds of any realization upon the same that the Secured Parties in their discretion elect to effect, to Senior Claims until all Obligations shall have
been indefeasibly paid in full, provided, however, that the Secured Parties shall render any surplus to the Subordinated Parties or their Affiliates, as
their interests appear, or interplead such surplus with a court of competent jurisdiction; 

        (iii)  vote
claims comprising Subordinated Claims to accept or reject any plan of partial or complete liquidation, reorganization, arrangement, composition or extension; and 

        (iv)  take
generally any action in connection with any such Proceeding which the Subordinated Parties might otherwise take. 

        (b)    Cooperation.    The Subordinated Parties shall cooperate fully with the Secured Parties and perform all acts
requested by the Secured Parties to enable the Secured Parties to enforce any Subordinated Claims pursuant to clause (a) above, including, without limitation, filing appropriate proofs of claim
and executing and delivering all necessary powers of attorney, assignments or other instruments. 

        (c)    Enforcement by the Subordinated Parties.    After the commencement of any Proceeding, the Subordinated Parties
may inquire in writing of the Secured Parties whether the Secured Parties 

4

 

intend to exercise their rights set forth in clause (a) above with respect to any Subordinated Claims. Should the Secured Parties fail, within a reasonable time after receipt of such inquiry,
either to file a proof of claim with respect to any Subordinated Claims and to furnish a copy thereof to the Subordinated Parties, or to inform the Subordinated Parties in writing that the
Secured Parties intend to exercise their rights to assert such Subordinated Claims in the manner provided in clause (a) above, the Subordinated Parties may (but shall not be required to)
proceed to file a proof of claim with respect to such Subordinated Claims and take such further steps with respect thereto, not inconsistent with this Agreement, as the Subordinated Parties may
deem proper. 

        (d)    Subrogation.    The Subordinated Parties shall not have any subrogation or other rights as holders of Senior
Claims, and each Subordinated Party hereby irrevocably waives all such rights of subrogation and all rights of reimbursement or indemnity whatsoever and all rights of recourse to any security for any
Senior Claims, until such time as all Obligations shall have been indefeasibly paid in full. Subject to and from and after the indefeasible payment in full of all Obligations, the Subordinated Parties
shall be subrogated to any rights of the Secured Parties to receive payments or distributions of cash, property or
securities of any Intercompany Borrower applicable to any Subordinated Claims until all amounts owing on such Subordinated Claims shall be paid in full. 

ARTICLE V

LIMITATION ON ACTIONS  

        Section 5.1    Actions Prohibited.    Until all Obligations shall have been indefeasibly paid in full, the
Subordinated Parties shall not, without the prior written consent of the Secured Parties: 

        (a)  take,
obtain or hold (or permit anyone acting on its behalf to take, obtain or hold) any assets of any Intercompany Borrower, whether as a result of any administrative,
legal or equitable action, or otherwise, in violation of the subordination provisions contained in this Agreement; 

        (b)  accelerate
payment of any Subordinated Claims or otherwise require such Subordinated Claims to be paid prior to their stated or scheduled maturity date; 

        (c)  commence,
prosecute or participate in (i) any administrative, legal or equitable action against or involving any Intercompany Borrower relating to any
Subordinated Claims, including, without limitation, any Proceeding, or (ii) any administrative, legal or equitable action to (a) enforce or collect any judgment obtained in respect of
any Subordinated Claims, (b) enforce or exercise remedies arising under or pursuant to any Subordinated Claims, (c) enforce or exercise remedies under or pursuant to any lien or other
security interest securing any Subordinated Claims or (d) enforce or exercise remedies with respect to any covenant, agreement, representation or other undertaking contained in any Subordinated
Notes; or 

        (d)  exercise
any other rights or remedies to enforce any Subordinated Claims, any collateral security provided with respect to such Subordinated Claims or any covenant,
agreement, representation or other undertaking contained in any Subordinated Notes. 

        Section 5.2    Defense in Action.    If the Subordinated Parties, in violation of the provisions herein set
forth, shall commence, prosecute or participate in any suit, action, case or Proceeding referred to in Section 5.1, the related Intercompany Borrower may interpose as a defense or plea the
provisions set forth herein, and any holder of any Senior Claims may intervene and interpose such defense or plea in its own name or in the name of such Intercompany Borrower, and shall, in any event,
be entitled to restrain the enforcement of the provisions of any Subordinated Claims in its own name or in the name of such Intercompany Borrower, as the case may be, in the same suit, action, case or
Proceeding or in any independent suit, action, case or Proceeding. 

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ARTICLE VI

SUBORDINATION ABSOLUTE  

        Section 6.1    Survival of Rights.    The rights under this Agreement of the holders of Senior Claims as
against the Subordinated Parties shall remain in full force and effect without regard to, and shall not be impaired or affected by: 

        (a)  any
act or failure to act on the part of any Intercompany Borrower; 

        (b)  any
extension or indulgence in respect of any payment or prepayment of any Senior Claims or any part thereof or in respect of any other amount payable to any holder of
any Senior Claims; 

        (c)  any
amendment, modification or waiver of, or addition or supplement to, or deletion from, or compromise, release, consent or other action in respect of, any of the terms
of any Senior Claims or the Financing Documents; 

        (d)  (i) any
exercise or non-exercise by the holder of any Senior Claims of any right, power, privilege or remedy under or in respect of such Senior
Claims, the Financing Documents or the subordination provisions contained herein, (ii) any waiver by the holder of any Senior Claims of any right, power, privilege or remedy or of any default
in respect of such Senior Claims, the Financing Documents or the subordination provisions contained herein or (iii) any receipt by the holder of any Senior Claims or any failure by such holder
to perfect a security interest in, or any release by such holder of, any security for the payment of such Senior Claims; 

        (e)  any
merger or consolidation of any Intercompany Borrower or any of its subsidiaries into or with any other Person, or any sale, lease or transfer of any or all of the
assets of any Intercompany Borrower or any of its subsidiaries to any other Person; 

        (f)    any
payment or other distribution to any holder of any Senior Claims in any Proceeding; 

        (g)  absence
of any notice to, or knowledge by, the Subordinated Parties of the existence or occurrence of any of the matters or events set forth in the foregoing clauses
(a) through (f); or 

        (h)  any
other circumstance. 

        Section 6.2    Waivers.    (a) Waiver of
Defenses.    Each Subordinated Party hereby irrevocably waives, in any proceeding by the Secured Parties to enforce their rights under this Agreement, (i) any
defense based on the adequacy of a remedy at law which might be asserted as a bar to the remedy of specific performance of this Agreement and (ii) the defense that claims asserted by the
holders of the Initial Lessor Notes pursuant to this Agreement are res judicata as a result of any decision rendered in any prior Proceeding. 

        (b)    Other Waivers.    Each Subordinated Party hereby irrevocably waives (i) notice of any of the matters
referred to in Section 6.1, (ii) all notices which may be required, whether by statute, rule of law or otherwise, to preserve intact any rights of any holder of any Senior Claims against
any Intercompany Borrower, including, without limitation, any demand, presentment and protest, or any proof of notice of nonpayment under any document evidencing such Senior Claims or under the
Financing Documents, (iii) notice of the acceptance of or reliance on this Agreement by the Secured Parties, (iv) notice of any renewal, extension or accrual of any Senior Claims, or any
loans made or other action taken in reliance on this Agreement, (v) any right to the enforcement, assertion or exercise by any holder of any Senior Claims of any right, power, privilege or
remedy conferred in any document evidencing such Senior Claims or in the Financing Documents, or otherwise, (vi) any requirement of diligence on the part of any holder of any Senior Claims,
(vii) any requirement on the part of any holder of any Senior Claims to mitigate damages resulting from any default under any documents evidencing such Senior Claims or under the Financing 

6

 

Documents and (viii) any notice of any sale, transfer or other disposition of any Senior Claims by any holder thereof. 

        Section 6.3    Assent.    Each Subordinated Party hereby irrevocably assents to (a) any renewal,
extension or postponement of the time of payment of any Senior Claims or any other indulgence with respect thereto, (b) any increase in the amount of any Senior Claims, (c) any
substitution, exchange or release of collateral for any Senior Claims, (d) the addition or release of any Person primarily or secondarily liable for any Senior Claims and (e) the
provisions of any instrument, security or other writing evidencing any Senior Claims. 

ARTICLE VII

INTERCOMPANY BORROWER OBLIGATIONS  

        The provisions of this Agreement are intended solely for the purpose of defining the relative rights and obligations of the Subordinated Parties and the Secured
Parties. Nothing contained herein (a) is intended to or shall impair, as among any Intercompany Borrower, its creditors and the related Subordinated Party, the obligation of such Intercompany
Borrower, which is absolute and unconditional, to pay to such Subordinated Party, as and when the same shall become due and payable in accordance with its terms, all amounts payable in respect of any
Subordinated Claims, or (b) is intended to affect the relative rights of such Subordinated Party and creditors of such Intercompany Borrower other than the Secured Parties. 

ARTICLE VIII

MISCELLANEOUS PROVISIONS  

        Section 8.1    Waivers, Amendments.    (a) The provisions of this Agreement may from time to time be
amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by each of the parties hereto, the holders of the Initial Lessor Notes, each of the Owner Lessors
and each of the Owner Participants. 

        (b)  No
failure or delay in exercising any power or right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power
or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or demand on any party in any case shall entitle it to any notice or demand in similar
or other circumstances. No waiver or approval under this Agreement shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions. No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder. 

        Section 8.2    Notices.    Except as otherwise specifically provided herein, all notices, consents, directions,
approvals, instructions, requests and other communications required or permitted by the terms hereof to be given to any Person shall be in writing and shall be deemed to have been duly given or made
when delivered if delivered by hand or courier or when received if sent by mail or telecopy, in each case addressed to the party to which such notice is required or permitted to be given or made
hereunder set forth below its signature hereto, or such other address as may be specified from time to time by such party in a notice to the other parties hereto. 

        Section 8.3    Severability.    Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. 

7

 

        Section 8.4    Headings.    The various headings of this Agreement are inserted for convenience only and shall
not affect the meaning or interpretation of this Agreement or any provisions hereof or thereof. 

        Section 8.5    Execution in Counterparts, Effectiveness.    This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. 

        Section 8.6    Governing Law; Entire Agreement.    THIS AGREEMENT SHALL IN ALL RESPECTS
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. This Agreement constitutes the entire understanding among the parties hereto with respect to
the subject matter hereof and supersede any prior agreements, written or oral, with respect thereto. 

        Section 8.7    Successors and Assigns.    (a) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns. 

        (b)  Notwithstanding
the foregoing, in order to secure the Lessor Notes of each Owner Lessor, such Owner Lessor will assign and grant a first priority security interest in
favor of its applicable Lease Indenture Trustee in and to all of such Owner Lessor's right, title and interest in, to and under this Agreement (other than to the extent relating to Excepted Payments
and the rights to enforce and collect the same). Each of the parties hereto hereby consents to such assignment and to the creation of such Lien and security interest and acknowledges receipt of copies
of the Lease Indenture, it being understood that such consent shall not affect any requirement or the absence of any requirement for any consent of such party under any other circumstances. Unless and
until the Collateral Agent shall have received written notice from the Lease Indenture Trustee that the Lien of the applicable Lease Indenture has been fully discharged, the applicable Security Agent
shall have the right (i) to directly receive for application in accordance with the terms of the applicable Lease Indenture all amounts payable or otherwise distributable under this Agreement
to the applicable Owner Lessor (other than in respect of the Excepted Payments) and (ii) to exercise the rights of such Owner Lessor under this Agreement (other than with respect to Excepted
Payments and the rights to enforce and collect the same) to the extent set forth in and subject to the exceptions set forth in the applicable Lease Indenture. 

        Section 8.8    Forum Selection and Consent to Jurisdiction.    ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY HERETO SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.
EACH PARTY HERETO HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR
THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. EACH PARTY HERETO FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY PARTY 

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HERETO HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT. 

        Section 8.9    Waiver of Jury Trial.    EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. EACH PARTY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE OTHER PARTIES ENTERING INTO THIS AGREEMENT. 

9

 

        IN
WITNESS WHEREOF, the parties hereto have each caused this Agreement to be duly executed by their duly authorized officers, all as of the day and year first above written. 

	 	 	EDISON MISSION HOLDINGS CO.
	

 	
 	

By:	
 	

/s/  JOHN P. FINNERAN      

	 	 	 	 	Name:	 	John P. Finneran
	 	 	 	 	Title:	 	Vice President
	

 	
 	

Address for Notices:
	

 	
 	

18101 Von Karman Avenue

Suite 1700

Irvine, California 92612-1046
	

 	
 	

EDISON MISSION FINANCE CO.
	

 	
 	

By:	
 	

/s/  JOHN P. FINNERAN      

	 	 	 	 	Name:	 	John P. Finneran
	 	 	 	 	Title:	 	Vice President
	

 	
 	

Address for Notices:
	

 	
 	

18101 Von Karman Avenue

Suite 1700

Irvine, California 92612-1046
	

 	
 	

HOMER CITY PROPERTY HOLDINGS, INC.
	

 	
 	

By:	
 	

/s/  STEVEN D. EISENBERG      

	 	 	 	 	Name:	 	Steven D. Eisenberg
	 	 	 	 	Title:	 	Vice President
	

 	
 	

Address for Notices:
	

 	
 	

18101 Von Karman Avenue

Suite 1700

Irvine, California 92612-1046

10

 

	

 	
 	

CHESTNUT RIDGE ENERGY CO.
	

 	
 	

By:	
 	

/s/  JOHN P. FINNERAN      

	 	 	 	 	Name:	 	John P. Finneran
	 	 	 	 	Title:	 	Vice President
	

 	
 	

Address for Notices:
	

 	
 	

18101 Von Karman Avenue

Suite 1700

Irvine, California 92612-1046
	

 	
 	

MISSION ENERGY WESTSIDE, INC.
	

 	
 	

By:	
 	

/s/  JOHN P. FINNERAN      

	 	 	 	 	Name:	 	John P. Finneran
	 	 	 	 	Title:	 	Vice President
	

 	
 	

Address for Notices:
	

 	
 	

18101 Von Karman Avenue

Suite 1700

Irvine, California 92612-1046
	

 	
 	

EME HOMER CITY GENERATION L.P.
	

 	
 	

By:	
 	

Mission Energy Westside, Inc.,

    its General Partner
	

 	
 	

By:	
 	

/s/  STEVEN D. EISENBERG      

	 	 	 	 	Name:	 	Steven D. Eisenberg
	 	 	 	 	Title:	 	Vice President
	

 	
 	

Address for Notices:
	

 	
 	

18101 Von Karman Avenue

Suite 1700

Irvine, California 92612-1046
	

 	
 	

UNITED STATES TRUST COMPANY

    OF NEW YORK, as Collateral Agent
	

 	
 	

By:	
 	

/s/  CHRISTOPHER J. GRELL      

	 	 	 	 	Name:	 	Christopher J. Grell
	 	 	 	 	Title:	 	Authorized Signer
	

 	
 	

Address for Notices:
	

 	
 	

114 West 47th Street

25th Floor

New York, New York 10036

11

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Exhibit 10.23.1

AMENDED AND RESTATED INTERCOMPANY LOAN SUBORDINATION AGREEMENT

RECITALSQuickLinks
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Exhibit 10.27    
  

Execution Copy  

 
 

DESIGNATED ACCOUNT REPRESENTATIVE AGREEMENT
  Relating to the NOx Allowance Program    
  

        This DESIGNATED ACCOUNT REPRESENTATIVE AGREEMENT ("Agreement") is entered into as of December 7, 2001, by and between EME HOMER CITY GENERATION L.P., a
Pennsylvania limited partnership ("EMEHC"), and Homer City OL1 LLC, a Delaware limited liability company, Homer City OL2 LLC, a Delaware limited liability company, Homer City OL3 LLC, a Delaware
limited liability company, Homer City OL4 LLC, a Delaware limited liability company, Homer City OL5 LLC, a Delaware limited liability company, Homer City OL6 LLC, a Delaware limited liability company,
Homer City OL7 LLC, a Delaware limited liability company, and Homer City OL8 LLC, a Delaware limited liability company (together, the "Owner Lessors"). 

 
 

WITNESSETH    
  

        WHEREAS, as a result of EMEHC's sale of eight undivided interests in Homer City Electric Generating Station located near Indiana, Pennsylvania (the "Homer City
Station") to the Owner Lessors, Owner Lessors are the owners of eight undivided interests (totaling a 100% interest) in the Homer City Station (the "Undivided Interests").11 

        WHEREAS,
pursuant to eight facility leases between the Owner Lessors and EMEHC, dated as of the date hereof (the "Facility Leases"), EMEHC has leased back the Undivided Interests from
the Owner Lessors. 

        WHEREAS,
Boiler Nos. 1, 2 and 3 at the Homer City Station are NOx affected sources that are subject to the NOx budget and allowance trading requirements
promulgated by the Pennsylvania Department of Environmental Protection ("PaDEP") at 25 Pa. Code § 123.101 et seq. ("NOx
Allowance Program"), pursuant to the Air Pollution Control Act, as amended, 35 P.S. § 4001 et seq.

        WHEREAS,
pursuant to the NOx Allowance Program, the Owner Lessors, as the new owners of the Homer City Station, are required to designate an authorized account representative
for the NOx affected sources at the Homer City Station subject to PaDEP's NOx Allowance Program (a "NOx Designated Representative"). 

        WHEREAS,
the Owner Lessors have not purchased nor paid for emission allowances from EMEHC as part of the purchase of Undivided Interests in the Homer City Station, and wish to provide
authority to EMEHC to appoint a NOx Designated Representative for purposes of controlling disposition of such allowances at all times and for so long as the Facility Leases are in effect. 

 
 

AGREEMENT    
  

        NOW, THEREFORE, in consideration of the foregoing recitals, the parties hereto covenant and agree as follows: 

        1.    Appointment.    Each Owner Lessor hereby irrevocably grants to EMEHC the right to appoint a NOx
Designated Representative and any successors thereto for the Homer City Station, including, but not limited to Homer City Station Boiler Nos. 1, 2 and 3, as required under the NOx
Allowance Program, and EMEHC hereby accepts the right to so appoint a NOx Designated Representative unless and until the applicable Facility Lease expires or is terminated in accordance
with its terms. 

        2.    Scope of Appointment.    EMEHC and each Owner Lessor agree that EMEHC's chosen NOx Designated
Representative's duties and responsibilities as NOx Designated Representative shall be as required under the NOx Allowance Program. 

 

        3.    Termination of Appointment.    EMEHC and each Owner Lessor agree that EMEHC's right to appoint a NOx
Designated Representative under this Agreement shall be terminated upon termination of the applicable Facility Lease pursuant to an Event of Default (as defined in such Facility Lease) in accordance
with the terms of such Facility Lease, and upon submission to PaDEP of a superseding Account Certificate of Representation pursuant to 25 Pa. Code § 123.104, which superseding certificate
is sufficient if signed by the Owner Lessors, only. 

        4.    Acknowledgment of Powers of NOx Designated Representative.    EMEHC and each Owner Lessor hereby
acknowledge that (i) for the duration of its appointment, the NOx Designated Representative shall have full power and authority to sell, assign and otherwise dispose of
NOx allowances allocated to the Homer City Station on behalf of and at the direction of EMEHC, or to transfer such allowances from the account maintained for the Homer City Station to any
other account maintained by EMEHC or its affiliates (which allowances so transferred shall remain the property of EMEHC or other transferee notwithstanding the termination of this Agreement or any
other Operative Document (as defined in each of the Participation Agreements)), without compensation to the Owner Lessors, in each case in accordance with the provisions of each of the Participation
Agreements by and among Homer City, the Owner Lessor, Wells Fargo Bank Northwest, National Association, not in its individual capacity but solely as Owner Manager, General Electric Capital
Corporation, as the Owner Participant, Homer City Funding LLC, as Lender, the Lease Indenture Trustee and United States Trust Company of New York, not in its individual capacity but solely as
Bondholder Trustee (as amended, modified and supplemented and in effect from time to time) (the "Participation Agreements"); and (ii) the
termination of EMEHC's right to appoint a NOx Designated Representative Agreement as described in Section 3 hereof shall not obligate the Designated Representative, EMEHC or any
Owner Lessor to pay additional consideration to the other parties hereto to effectuate the filing and acceptance by PaDEP of a superceding Account Certificate of Representation pursuant to 25 Pa. Code
§ 123.104. 

        5.    Further Assurances.    The parties hereto agree to promptly perform or cause to be performed any and all acts
and execute or cause to be executed any and all documents (including financing statements and continuation statements) as may be necessary in order to carry out the intent and purposes of this
Agreement and the appointments contemplated hereby and to take any and all steps necessary to effectuate the intent of the foregoing and the other Operative Documents, including without limitation,
taking all actions, making all filings, or taking such other steps as may be necessary to maintain the NOx Designated Representative chosen by EMEHC in its sole discretion as the
Designated Representative unless and until any Facility Lease is terminated in accordance with its terms, and thereafter, to appoint and maintain as successor designated representative the designee of
the Owner Lessors. 

        6.    Counterparts; Effectiveness.    This Agreement may be executed in any number of counterparts each of which shall
be an original with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other hereto. 

2

 

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. 

	 	 	EME HOMER CITY GENERATION L.P.,
	

 	
 	

By:	
 	

Mission Energy Westside, Inc.,

a California Corporation, its

General Partner
	

 	
 	

By:	
 	

/s/  STEVEN D. EISENBERG      

	 	 	 	 	Name:	 	Steven D. Eisenberg
	 	 	 	 	Title:	 	Vice President
	

 	
 	
HOMER CITY OL1 LLC
	

 	
 	

By:	
 	

Wells Fargo Bank Northwest,

National Association, not in its individual

capacity but solely as Owner Manager
	

 	
 	

By:	
 	

/s/  FRANK MCDONALD      

	 	 	 	 	Name:	 	Frank McDonald
	 	 	 	 	Title:	 	Vice President
	

 	
 	
HOMER CITY OL2 LLC
	

 	
 	

By:	
 	

Wells Fargo Bank Northwest,

National Association, not in its individual

capacity but solely as Owner Manager
	

 	
 	

By:	
 	

/s/  FRANK MCDONALD      

	 	 	 	 	Name:	 	Frank McDonald
	 	 	 	 	Title:	 	Vice President
	

 	
 	
HOMER CITY OL3 LLC
	

 	
 	

By:	
 	

Wells Fargo Bank Northwest,

National Association, not in its individual

capacity but solely as Owner Manager
	

 	
 	

By:	
 	

/s/  FRANK MCDONALD      

	 	 	 	 	Name:	 	Frank McDonald
	 	 	 	 	Title:	 	Vice President
	

 	
 	
HOMER CITY OL4 LLC
	

 	
 	

By:	
 	

Wells Fargo Bank Northwest,

National Association, not in its individual

capacity but solely as Owner Manager
	

 	
 	

By:	
 	

/s/  FRANK MCDONALD      

	 	 	 	 	Name:	 	Frank McDonald
	 	 	 	 	Title:	 	Vice President

3

 

	

 	
 	
HOMER CITY OL5 LLC
	

 	
 	

By:	
 	

Wells Fargo Bank Northwest,

National Association, not in its individual

capacity but solely as Owner Manager
	

 	
 	

By:	
 	

/s/  FRANK MCDONALD      

	 	 	 	 	Name:	 	Frank McDonald
	 	 	 	 	Title:	 	Vice President
	

 	
 	
HOMER CITY OL6 LLC
	

 	
 	

By:	
 	

Wells Fargo Bank Northwest,

National Association, not in its individual

capacity but solely as Owner Manager
	

 	
 	

By:	
 	

/s/  FRANK MCDONALD      

	 	 	 	 	Name:	 	Frank McDonald
	 	 	 	 	Title:	 	Vice President
	

 	
 	
HOMER CITY OL7 LLC
	

 	
 	

By:	
 	

Wells Fargo Bank Northwest,

National Association, not in its individual

capacity but solely as Owner Manager
	

 	
 	

By:	
 	

/s/  FRANK MCDONALD      

	 	 	 	 	Name:	 	Frank McDonald
	 	 	 	 	Title:	 	Vice President
	

 	
 	
HOMER CITY OL8 LLC
	

 	
 	

By:	
 	

Wells Fargo Bank Northwest,

National Association, not in its individual

capacity but solely as Owner Manager
	

 	
 	

By:	
 	

/s/  FRANK MCDONALD      

	 	 	 	 	Name:	 	Frank McDonald
	 	 	 	 	Title:	 	Vice President

4

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Exhibit 10.27

DESIGNATED ACCOUNT REPRESENTATIVE AGREEMENT Relating to the NOx Allowance Program

WITNESSETH

AGREEMENT

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