UNITED STATES BANKRUPTCY COURT FOR THE WESTERN … · Reorganization dated January 14, 2015 (as revised and updated on April 13, 2015) [Dkt. No. 4547-1] (the “Plan”)2 based on

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UNITED STATES BANKRUPTCY COURTFOR THE WESTERN DISTRICT OF NORTH CAROLINA

Charlotte Division

)In Re: ) Chapter 11

)GARLOCK SEALING TECHNOLOGIES ) Case No. 10-31607LLC, et al. )

)Debtors.1 ) Jointly Administered

)

COLTEC INDUSTRIES, INC.’S RESPONSE TO THE OFFICIAL COMMITTEE OFASBESTOS PERSONAL INJURY CLAIMANTS’ MOTION FOR ENTRY OFSUMMARY JUDGMENT DENYING CONFIRMATION OF THE DEBTORS’

SECOND AMENDED PLAN OF REORGANIZATION

PARKER POE ADAMS & BERNSTEIN, LLP

Daniel G. ClodfelterThree Wells Fargo Center401 South Tryon Street, Suite 3000Charlotte, North Carolina 28202Telephone: (704) 335-9054Facsimile: (704) 335-9762

MOORE & VAN ALLEN PLLC

Mark A. NebrigHillary B. CrabtreeE. Taylor Stukes100 North Tryon Street, Suite 4700Charlotte, North Carolina 28202-4003Telephone: (704) 331-1000Facsimile: (704) 331-1059

Attorneys for Coltec Industries Inc.

Dated: December 18, 2015

1The Debtors in these jointly administered cases are Garlock Sealing Technologies LLC, Garrison Litigation

Management Group, Ltd., and The Anchor Packing Company.

Case 10-31607 Doc 5157 Filed 12/18/15 Entered 12/18/15 19:32:15 Desc Main Document Page 1 of 35

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TABLE OF CONTENTS

Page

PRELIMINARY STATEMENT ............................................................................................ 1

I. Description of the “Released Claims” - What Is and Is Not Being Resolvedby the Parent Settlement. ............................................................................................ 3

II. Only the Debtors Have Authority to Resolve the Avoidance Claims andthe Derivative Claims and Individual Claimants Have No Right toProsecute Them After the Commencement of These Chapter 11 Cases. ..................... 6

A. The Avoidance Claims. ................................................................................... 6

B. The Derivative Claims. ................................................................................. 11

III. Section 524(e) of the Code Does not Bar the Parent Settlement. ............................... 19

IV. The Parent Settlement May Properly Be Made Part of the Plan and Will,If the Plan is Confirmed, Become Binding on All Parties, IncludingClaimants Who Do Not Support the Plan. ................................................................. 21

V. Additionally, the Preclusive Effect of an Order of Confirmation and the“Single Satisfaction” Rule Will Apply Here to Extinguish AnyPost-Confirmation Re-litigation of Claims Resolved in the Plan. .............................. 24

CONCLUSION……............................................................................................................ 27


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TABLE OF AUTHORITIES

Page(s)Cases

Ahcom, Ltd. v. Smeding,623 F.3d. 1248 (9th Cir. 2010) ....................................................................................... 16.17

Alvarez v. Ward,No. 1:11 cv 03, 2011 U.S. Dist. LEXIS 151873 (W.D.N.C. Oct. 17, 2011)..........................15

Angell v. Kelly,336 F. Supp. 2d 540 (M.D.N.C. 2004).................................................................... 8,12,13,15

Baillie Lumber Co. v. Thompson, 391 F.3d 1315 (11th Cir. 2004) ............................................13

Chartschlaa v. Nationwide Mut. Ins. Co., 538 F.3d 116 (2d Cir. 2008) .......................................9

Delgado Oil Co. v. Torres, 785 F.2d 857 (10th Cir. 1986)...........................................................8

First Union Commer. Corp. v. Nelson, Mullins, Riley, & Scarborough(In re Varat Enters.),81 F.3d 1310 (4th Cir. 1996) ...............................................................................................26

Harstad v. First Am. Bank, 39 F.3d 898 (8th Cir. 1994) ............................................................24

Holcomb v. Pilot Freight Carriers, Inc.,120 B.R. 35 (M.D.N.C. 1990)............................................................................... 12,13,14,15

Huddleston v. Nelson Bunker Hunt Trust Estate,117 B.R. 231 (N.D. Tex. 1990)............................................................................................19

In re Colonial Realty Co.,980 F.2d 125 (2d Cir. 1992) ................................................................................................10

In re DBSD North America, Inc.,419 B.R. 179 (Bankr. S.D.N.Y. 2009) .................................................................................24

In re Dow Corning Corp.,255 B.R. 445 (E.D. MI. 2000) .............................................................................................24

In re Felt Mfg. Co., Inc.402 B.R. 502 (Bankr. D.N.H. 2009) ....................................................................................24

In re Mesa Air Group, Inc.,2011 Bankr. LEXIS 189 (Bankr. S.D.N.Y. 2011) ................................................................24


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In re Midstate Mills, Inc.,2015 Bankr. LEXIS 3105, No. 13-50033, slip op at pp. 17-18 (Bankr.W.D.N.C. September 15, 2015) ................................................................................... 7,12,23

In re Ozark Rest. Equip. Co.,816 F.2d 1222 (8th Cir. 1987) .............................................................................................17

In re Pacific Gas & Electric Co.,304 B.R. 395 (N.D. Cal. 2004) ....................................................................................... 19,21

In re PWS Holding Corporation,303 F.3d 308 (3d Cir. 2002) ................................................................................................18

In re Texaco, Inc.,84 B.R. 893 (Bankr. S.D.N.Y. 1988) ...................................................................................20

In re Tribune Co. Fraudulent Conveyance Litig.,499 B.R. 310 (S.D.N.Y. 2013)..................................................................................... 9,10,11

Jackson v. Corporate Gear, LLC,No. 04 Civ. 10132 (DC), 2005 U.S. Dist. LEXIS 35579 (S.D.N.Y. Dec. 21,2005)...................................................................................................................................16

Jackson v. Novak (In re Jackson), 593 F.3d 171, 176 (2d Cir. 2010) ...........................................9

Jenkins v. Ward (In re Jenkins),No. 3:12-cv-851, 2013 WL 4805731 (W.D.N.C. Sept. 6, 2013).............................................8

Kalb v. Voorhis Co. v. American Financial Corp.,8 F.3d 130 (2d Cir. 1993) ....................................................................................................15

Levin v. Province Grande Olde Liberty, LLC (In re Province Grande OldeLiberty, LLC),2014 Bankr. LEXIS 4922 (Bankr. E.D.N.C. Dec. 5, 2014) ....................................................8

Marshall v. Picard (In re Bernard L. Madoff Inv. Securs. LLC),740 F.3d 81 (2d Cir. 2014) ....................................................................................................9

Messer v. Bentley Manhattan, Inc. (In re Madison Bentley Assocs., LLC),516 B.R. 724 (S.D.N.Y. 2014).............................................................................................13

Mitchell v. Greenberg (In re Creative Entm't, Inc.),2003 Bankr. LEXIS 2468, No. 00-3114, slip op. at p. 13 (Bankr. W.D.N.C.May 27, 2003) .......................................................................................................................7

Nat'l Am. Ins. Co. v. Ruppert Landscaping Co.,187 F.3d 439 (4th Cir. 1999) .................................................................................................8


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Nat’l Heritage Found., Inc. v. Highbourne Found.,760 F.3d 344, 346 (4th Cir. 2014)........................................................................................19

Nat’l Surety Co. v. Coriell,289 U.S. 426 (1933) ............................................................................................................24

Poth v. Russey,99 F. App'x 446 (4th Cir. 2004)..........................................................................................7,8

Protective Committee for Independent Stockholders of TMT Trailer Ferry v.Anderson,390 U.S. 414 (1968) ............................................................................................................23

Ritchie Capital Mgmt., L.L.C. v. Gen. Elec. Capital Corp.,No. 14-civ-8623, 2015 U.S. Dist. LEXIS 101697 (S.D.N.Y. Aug. 4, 2015) ...........................8

Rosener v. Majestic Mgmt. (In re OODC, LLC),321 B.R. 128 (Bankr. D. Del. 2005) ............................................................................... 13,17

Shaoxing County Huayue Import & Export v. Bhaumik,191 Cal. App. 4th 1189 (Cal. App. 2d. Dist. 2011) ..............................................................16

Sigmon v. Esposito (In re Rahab Trust & Mgmt. Co.),No. 01-3182, 2002 Bankr. LEXIS 1876 (Bankr. W.D.N.C. March 4, 2002)............ 8,12,15,17

St. Paul Fire & Marine Ins. Co. v. Pepsico, Inc.884 F.2d 688 (2d Cir. 1989) ........................................................................................... 13,15

Steyr-Daimler-Puch of America Corp. v. Pappas,852 F.2d 132 (4th Cir. Va. 1988).........................................................................................12

Stoll v. Gottlieb,305 U.S. 165 (1938) .................................................................................................. 24,25,26

The Mediators v. Manney (In re Mediators),No. 91 B 12980 (PBA), Adv. No. 93 CIV. 2304 (SDH), 1996 U.S. Dist.LEXIS 7639 (S.D.N.Y. June 4, 1996)..................................................................................16

Trans-Continental Meats v. Shaw Food Servs. Co.,No. 5:94-cv-675, 1995 U.S. Dist. LEXIS 19665 (E.D.N.C. Nov. 30, 1995) .................... 12,13

Trendi Sportswear, Inc. v. Bank of Baroda (In re Indu Craft Inc.),580 F. App’x 33 (2d Cir. N.Y. 2014) ...................................................................................26

Unarco Bloomington Factory Workers v. UNR Indus.124 B.R. 268 (N.D. Ill. 1990) ......................................................................................... 19,20


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Statutes

11 U.S.C. § 105...........................................................................................................................7

11 U.S.C. § 301...........................................................................................................................7

11 U.S.C. § 302...........................................................................................................................7

11 U.S.C. § 303...........................................................................................................................7

11 U.S.C. § 329...........................................................................................................................7

11 U.S.C. § 362............................................................................................................... 10,11,15

11 U.S.C. § 363...........................................................................................................................7

11 U.S.C. § 524..................................................................................................................passim

11 U.S.C. § 541..................................................................................................................passim

11 U.S.C. § 542...........................................................................................................................3

11 U.S.C. § 543........................................................................................................................3,7

11 U.S.C. § 544..................................................................................................................passim

11 U.S.C. § 545...........................................................................................................................3

11 U.S.C. § 546.........................................................................................................................10

11 U.S.C. § 547...........................................................................................................................3

11 U.S.C. § 548................................................................................................................... 3,4,11

11 U.S.C. § 549...........................................................................................................................3

11 U.S.C. § 550................................................................................................................ 3,6,7,27

11 U.S.C. § 553........................................................................................................................3,7

11 U.S.C. § 554...........................................................................................................................6

11 U.S.C. § 1123................................................................................................................passim

11 U.S.C. § 1141................................................................................................................passim

11 U.S.C. § 1142....................................................................................................................3,22


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Other Authorities

Bankruptcy Rule 9019(a) ..................................................................................................... 22,24


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Coltec Industries, Inc. (“Coltec”), by and through its undersigned counsel, responds to the

Official Committee of Asbestos Personal Injury Claimants’ (the “Committee”) motion for entry

of summary judgment denying confirmation of the Debtors’ Second Amended Plan of

Reorganization dated January 14, 2015 (as revised and updated on April 13, 2015) [Dkt. No.

4547-1] (the “Plan”)2 based on the Plan’s failure to comply with Bankruptcy Code § 524(g) (the

“Motion”). In this response, Coltec will address those portions of the Committee’s motion that

relate to the Parent Settlement contained in the Plan. Coltec adopts and joins in the Debtors’ and

the Future Claims Representative’s responses with respect to other aspects of the Committee’s

motion.

PRELIMINARY STATEMENT

In its motion papers, objection to the Plan3 and in anticipatory arguments already voiced

before the Court, the Committee has characterized those provisions of the Plan that settle and

resolve various potential claims against Coltec and other affiliates of the Debtors (the “Parent

Settlement”) as “radical and unprecedented,”4 and unconfirmable5 outside the context of a plan

of reorganization that relies upon the supplemental injunctions allowed under 11 U.S.C.

2 As used herein, capitalized terms not otherwise defined have the meanings ascribed to them in the Plan.

3 See Objections of the Official Committee of Asbestos Personal Injury Claimants to Confirmation of the Debtors’Second Amended Plan [ Docket No. 4885] (the “Objection”)

4 See Objection, p. 6 “The Plan is deeply and pervasively flawed. Taken as a whole, it represents a radical andunprecedented effort by longtime asbestos defendants to trump the tort system through bankruptcy and cap their tortliability, while shifting the risk of inadequate Plan funding from the equity holders to the tort creditors.”

5 See Motion, p. 9, “[T]he failure of the Debtors’ Plan to abide by all the requirements for obtaining § 524(g) reliefrenders the Plan unconfirmable.”


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§524(g)(4)(A)(ii).6 Despite the passion of the Committee’s objection, there is nothing at all

novel or extraordinary about the provisions of the Plan providing for the Parent Settlement. It

follows a well-worn path in bankruptcy law, amply supported both by the explicit statutory

provisions of Title 11 and by precedent construing and applying those provisions.

The Parent Settlement resolves only potential claims whose right of pursuit and

resolution are vested solely in the Debtors, with any recoveries being had solely for the benefit of

the Debtors’ estates as provided by 11 U.S.C. §541(a)(3). The potential claims and the terms of

the resolution of those claims are set forth in the Plan, as is specifically permitted and

contemplated by 11 U.S.C. §1123(b)(3)(A). All consideration received on account of such

potential claims is obtained and used solely for the benefit of claimants against the Debtors’

estates, as is required. If the Plan is confirmed, the provisions resolving the potential claims

become binding on all parties, including all claimants against the Debtors, by virtue of the

express language of 11 U.S.C. §1141(a). The order of confirmation approving the Plan,

including the provisions relating to the Parent Settlement, become res judicata as to all of the

potential claims resolved in the Plan and as against all claimants against the Debtors, and the

6 11 U.S.C § 524(g)(4)(A)(ii) provides:

(ii) Notwithstanding the provisions of section 524(e) [11 USCS § 524(e)], such an injunction may bar anyaction directed against a third party who is identifiable from the terms of such injunction (by name or as part of anidentifiable group) and is alleged to be directly or indirectly liable for the conduct of, claims against, or demands onthe debtor to the extent such alleged liability of such third party arises by reason of—

(I) the third party's ownership of a financial interest in the debtor, a past or present affiliate of the debtor, ora predecessor in interest of the debtor;

(II) the third party's involvement in the management of the debtor or a predecessor in interest of the debtor,or service as an officer, director or employee of the debtor or a related party;

(III) the third party's provision of insurance to the debtor or a related party; or(IV) the third party's involvement in a transaction changing the corporate structure, or in a loan or other

financial transaction affecting the financial condition, of the debtor or a related party, including but not limited to--(aa) involvement in providing financing (debt or equity), or advice to an entity involved in such a

transaction; or(bb) acquiring or selling a financial interest in an entity as part of such a transaction.


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preclusive nature of the confirmation is properly buttressed and supported by injunctions

grounded in the provision of 11 U.S.C. §1142 and 105(a). None of this breaks any new ground.

I. Description of the “Released Claims” - What Is and Is Not Being Resolved bythe Parent Settlement.

The Released Claims that are the subject of the Plan’s Parent Settlement provisions are a

set of claims whose disposition is controlled by the Debtors and may be resolved by the Debtors

for the benefit of their estates. They fall into two categories: (1) potential claims to avoid pre-

petition or post-petition transfers under various provisions of chapter 5 of Title 11 and to recover

the avoided transfers or their value for the benefit of the Debtors’ estates under 11 U.S.C. §550

(hereafter, the “Avoidance Claims”), and (2) potential claims against Coltec, its parent company

EnPro Industries, Inc., and various sister and affiliated corporations of the Debtors whereby the

Debtors’ liabilities for their manufacture, use, distribution, marketing, and sale of asbestos-

containing products are asserted to be liabilities of the parent and affiliates under various

theories, most commonly theories of alter ego or piercing the corporate veil (hereafter, the

“Derivative Claims”).

The Avoidance Claims include any potential claims maintainable under one or more of

11 U.S.C. §§541, 542, or 543 (i.e., claims to declare and to recover property of the estate), or

under one or more of 11 U.S.C. §§ 544, 545, 547, 548, 549 or 553. In pre-Plan proceedings in

these cases the Committee has focused on potential claims relating to the 2005 reorganization of

certain businesses within the Coltec group of companies, involving the transfer by Debtor GST

to Stemco LP, a Texas limited partnership and indirect subsidiary of Coltec (“Stemco TX”), of

GST’s interests in Stemco Delaware LP (formerly known as Stemco, LLC) and the transfer by

GST to Coltec of GGB LLC and Coltec Industrial Products LLC. As part of this reorganization

Coltec and Stemco TX issued to GST two subordinated promissory notes having a combined


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face value of approximately $227 million.7 The two notes were modified effective January 1,

2010 to extend their original maturity dates to January 1, 2017. The Committee contends the

original 2005 transactions and the 2010 modification of the notes were fraudulent transfers,

avoidable under 11 U.S.C. §548 and/or 11 U.S.C. §544. While these claims do not exhaust the

universe of potential Avoidance Claims that are being resolved in the Plan,8 they have

commanded the overwhelming majority of the Committee’s time and attention in the course of

discovery and exploration of potential Avoidance Claims in these cases.

The Committee has described the Derivative Claims in the Objection as potential claims

“arising from EnPro’s and Coltec’s domination and control of the Debtors, particularly GST”

[Objection, p. 45] (the “Derivative Claims”). EnPro and Coltec, unsurprisingly, dispute these

claims, and they will be the subject of evidentiary presentations and legal argument at the

confirmation hearings on the Plan. The Plan defines the Derivative Claims as:

… any and all claims that are or would have been property of any Debtor’s Estate,regardless of the legal theory upon which such claim may be predicated, by which anyReleased Party is asserted to be or to have been derivatively liable for any Claim,including, without limitation, any GST Asbestos Claim, including, without limitation,any claim arising under a theory that (i) any Released Party is a successor to the Debtor,(ii) any Debtor’s separate corporate existence should be disregarded, or (iii) any ReleasedParty is an alter ego of any Debtor, and (d) any and all claims in (a) – (c) above where, inthe absence of the Debtors’ Chapter 11 Cases, such claims might, under substantive lawof any jurisdiction, have been treated as claims maintainable not only by the Debtors orthe Debtors’ Estates themselves, but by creditors of or claimants against the Debtors.

Plan, Section 1.1.109, definition “Released Claims” as amended.

7The two promissory notes were subordinated to the then-existing liens held by Coltec’s and GST’s lender, Bank ofAmerica, N.A. They were, and still are, secured by a pledge of the assets transferred by GST to Coltec and toStemco TX.

8 Other potential Avoidance Claims include, without limitation, (i) charges for intercompany services and paymentadvances both before and after the Petition Date, (ii) transfers to and from Coltec as tracked through the Grid Notes,and the pre-petition setoff of those Grid Notes, including pre-March 2010 consolidated cash management systemtransfers, and (iii) ordinary course trade transactions between Debtors and non-debtor affiliates.


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For present purposes it is worthwhile also to identify those potential claims that are not

being resolved by the Parent Settlement and are not Released Claims. This exercise is important

in light of the Committee’s contention that the releases being obtained as part of the Parent

Settlement are identical to the relief afforded under 11 U.S.C. §524(g)(4)(A)(ii). Such is not the

case. A non-exhaustive list of the types of claims that are not embraced within the Parent

Settlement and associated releases but that could be extinguished under §524(g)(4)(A)(ii)

includes:

(1) claims against parties who held financial interests in the Debtors or in the Debtors’predecessors in interest before the time Coltec acquired its ownership of Garlock in 1975or before the time Garlock acquired its ownership of Anchor in 1987, claims that couldbe enjoined if the Plan were relying on 11 U.S.C. §524(g)(4)(A)(ii)(I);

(2) claims against the Debtors’ insurers or against those insurers who provide or haveprovided insurance to Coltec and the Debtors’ other affiliates, claims that could beenjoined if the Plan were relying on 11 U.S.C. §524(g)(4)(A)(ii)(III); and

(3) claims against parties who have provided financing to the Debtors, to Coltec, or tothe Debtors’ affiliates, either in connection with the 2005 transactions or otherwise,claims that would be enjoined if the Plan were relying on 11 U.S.C.§524(g)(4)(A)(ii)(IV).

In addition the provisions governing the Parent Settlement and Released Claims will not

resolve or purport to bar the assertion of claims held by individual claimants alleging injury

purportedly caused by exposure to asbestos-containing products that were manufactured, mined,

fabricated, used as a component part, marketed, promoted, distributed, or sold by an affiliate of

the Debtors, even if such asbestos-containing products or components were originally purchased

or obtained from the Debtors themselves (hereafter, the “Affiliate Direct Claims”).9

9 Since the hearings held on October 21 and 22, 2015, Coltec counsel and the Committee’s counsel have workeddiligently to revise the definition of “Released Claims” contained in the Plan in order to make this point clear.Coltec believes that agreement in principal, subject to final client approval, has now been reached on revised Planlanguage that would do so.


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II. Only the Debtors Have Authority to Resolve the Avoidance Claims and theDerivative Claims and Individual Claimants Have No Right to ProsecuteThem After the Commencement of These Chapter 11 Cases.

A. The Avoidance Claims. In both the Fourth and Second Circuits disposition

of the Released Claims is the responsibility of the Debtors, and exclusive right is conferred on

the Debtors to pursue and resolve them.10 Unless or until the Debtors abandon the claims

pursuant to the provisions of 11 U.S.C. §554 or the Court delegates the pursuit of the claims to

some other person, only the Debtors may prosecute and resolve such claims. Moreover, the

fruits of any such resolution belong to the Debtors’ estates and to the claimants against and

interest holders in such Debtors generally, not to any individual claimant or any particular class

or subset of claimants. See 11 U.S.C. §541(a)(3)(recoveries under 11 U.S.C. §550 are property

of the estate).

Many courts hold that the causes of action whose pursuit is authorized under chapter 5 of

Title 11 are themselves property of the estate within the meaning of §544(a)(1); others hold that

the causes of action themselves may or may not be property of the estate under §541(a)(1),

particularly in the case of claims asserted under §544, where a trustee or debtor-in-possession

steps into the shoes of an individual creditor to assert a claim belonging to that creditor under

state law. Generally, see Collier on Bankruptcy P 541.12[4] (16th Edition). The theoretical

difference between these positions is, in any event, immaterial. Whether the causes of action

themselves are or are not “property of the estate,” in the strictest sense, the courts agree that

10 At the confirmation hearing choice of law issues will be more extensively briefed than present circumstanceswarrant or permit. At present the issue before the Court is not whether the Parent Settlement will be approved andthe Plan confirmed but instead whether they can be approved independently of 11 U.S.C. §524(g) and itsprerequisites. For purposes of simplifying and shortening briefing on the present issue, Coltec relies primarily onprinciples of the substantive law of North Carolina and New York and of courts sitting in the federal Fourth andSecond Circuits. North Carolina is the state under whose laws the Garlock Debtor is organized and New York is thestate where its primary operations are conducted.


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exclusive right to control the litigation and ultimate disposition of those claims belongs to the

estate representative and, by virtue of §541(a)(3), any recovery on account of such claims is

property of the estate.11

As many North Carolina courts have explained, the bankruptcy trustee [or debtor-in-

possession] of a corporate debtor has standing to assert three types of claims: (1) claims that

belong to the debtor corporation under state law; (2) avoidance actions under Chapter 5 of Title

11; and (3) avoidance actions under applicable state law pursuant to 11 U.S.C. § 544.” See

Mitchell v. Greenberg (In re Creative Entm't, Inc.), 2003 Bankr. LEXIS 2468, No. 00-3114, slip

op. at p. 13 (Bankr. W.D.N.C. May 27, 2003); see also In re Midstate Mills, Inc., 2015 Bankr.

LEXIS 3105, No. 13-50033, slip op at pp. 17-18 (Bankr. W.D.N.C. September 15, 2015)(same

language).

In the Fourth Circuit Avoidance Claims discussed herein are very often characterized as

property of the estate. In Poth v. Russey, 99 F. App'x 446, 457 (4th Cir. 2004), a former

shareholder sued officers, directors, affiliates, and other shareholders, alleging fraud and breach

of fiduciary duty claims and other state-law claims. The Eastern District of Virginia dismissed

the breach of fiduciary duty claim for lack of standing and granted defendants summary

judgment as to the fraud claims. Upon appeal, the Fourth Circuit agreed with the lower court and

held that the shareholder lacked standing to assert the breach of fiduciary duty claim because the

claim was similar in object and purpose to a potential fraudulent conveyance claim that only the

bankrupt corporation's trustee in bankruptcy could bring. The Poth Court noted that if a cause of

action is part of the estate of the bankrupt then the trustee alone has standing to bring that claim.

11 11 U.S.C. § 541(a)(3) provides: (a) The commencement of a case under section 301, 302, or 303 of this titlecreates an estate. Such estate is comprised of all the following property, wherever located and by whomeverheld….(3) Any interest in property that the trustee recovers under section 329(b), 363(n), 543, 550, 553, or 723 ofthis title.


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Poth, 99 F. App’x. at 457 (citing Nat'l Am. Ins. Co. v. Ruppert Landscaping Co., 187 F.3d 439,

441 (4th Cir. 1999).

North Carolina courts have also determined that avoidance claims are property of the

estate when analyzing North Carolina Uniform Fraudulent Transfer Act. See also Angell v.

Kelly, 336 F. Supp. 2d 540, 545-546 (M.D.N.C. 2004); (concluding that claims under the North

Carolina’s Uniform Fraudulent Transfer Act were estate property); Sigmon v. Esposito (In re

Rahab Trust & Mgmt. Co.), No. 01-3182, 2002 Bankr. LEXIS 1876, at *15 (Bankr. W.D.N.C.

March 4, 2002)("bankruptcy trustee clearly has standing under Section 544 to assert a state law

avoidance action"); Jenkins v. Ward (In re Jenkins), No. 3:12-cv-851, 2013 WL 4805731, at *5,

9 (W.D.N.C. Sept. 6, 2013) (analyzing claims under the North Carolina’s Uniform Fraudulent

Transfer Act and noting that “[Bankruptcy Code] Section 544 transfers the right to recover

fraudulent transfers from individual creditors to the bankruptcy estate”).

The bankruptcy estate includes any right of action the debtor may have to recover

damages for fraudulent transfers, preferential transfers, misconduct, mismanagement, or neglect

of duty by a corporate officer or director. Id. (citing Delgado Oil Co. v. Torres, 785 F.2d 857

(10th Cir. 1986) (holding that a state-law action to avoid a preferential transfer by a corporate

director was property of the estate of the bankrupt); see also Levin v. Province Grande Olde

Liberty, LLC (In re Province Grande Olde Liberty, LLC), 2014 Bankr. LEXIS 4922 (Bankr.

E.D.N.C. Dec. 5, 2014)(once a bankruptcy case is filed, all fraudulent transfer claims relating to

a transfer made by the debtor, and the rights to recover damages or to avoid liens in connection

with such claims, are property of the estate).

This view is echoed by a recent New York case, Ritchie Capital Mgmt., L.L.C. v. Gen.

Elec. Capital Corp., No. 14-civ-8623, 2015 U.S. Dist. LEXIS 101697 (S.D.N.Y. Aug. 4, 2015).


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In this case Ritchie was suing GECC for numerous state law grounds of fraud and other

allegations based on GECC’s failure to stop a ponzi scheme. The Second Circuit noted that all

of these state law claims were property of the estate, which includes "all legal or equitable

interests of the debtor in property as of the commencement of the case." Ritchie Capital, 2015

U.S. Dist. LEXIS 101697 at *23, 11 U.S.C. § 541(a)(1). Such interests include "causes of action

possessed by the debtor at the time of filing," Id. (citing Jackson v. Novak (In re Jackson), 593

F.3d 171, 176 (2d Cir. 2010)), as well as any interests that the trustee recovers in pursuing the

causes of action. "Every conceivable interest of the debtor, future, nonpossessory, contingent,

speculative, and derivative, is within the reach of" the bankruptcy estate. Id. (citing Chartschlaa

v. Nationwide Mut. Ins. Co., 538 F.3d 116, 122 (2d Cir. 2008)). Significant to these Chapter 11

Cases, the Second Circuit held that “to promote the orderly resolution of all claims and prevent

creditors from racing to the courthouse to achieve preferential recoveries, the bankruptcy trustee

has ‘exclusive standing’ to assert causes of action belonging to the estate.” Id. See e.g. Marshall

v. Picard (In re Bernard L. Madoff Inv. Securs. LLC), 740 F.3d 81, 90-93 (2d Cir. 2014)

(concluding that fraudulent transfer and conveyance claims under the Code and the New York

fraudulent conveyance statute were estate property and that creditors could not assert claims

“derivative or duplicative” of such claims).

The Committee argues in the Objection that creditors could potentially in the future

regain the right to file preference and fraudulent transfer actions under applicable state law and

that therefore the Avoidance Claims belong, at least in some contingent respect, to claimants

against the Debtors [Objection, p. 39]12. In support the Committee cites to In re Tribune Co.

12 See Objection, p. 38, arguing it is improper to release fraudulent transfer claims, because “these would alsoinclude claims to avoid and recover fraudulent transfers that belong to creditors under applicable nonbankruptcy(continued on next page)


10CHAR2\1747076v6

Fraudulent Conveyance Litig., 499 B.R. 310, 321-22 (S.D.N.Y. 2013) in which the court held

that a “trustee has only two years to commence avoidance actions after a debtor files for

bankruptcy, and if that prerogative expires, a creditor regains standing to pursue a state law

fraudulent conveyance action, in its own name and for its own benefit” (citation and internal

quotation marks omitted). However the Court in Tribune also made it abundantly clear that 11

U.S.C. §362(a)(1) deprives individual creditors of the right to litigate such fraudulent transfers

claims if and while the Trustee is pursuing those same claims. See In re Tribune Co., 499 B.R. at

321 (discussing In re Colonial Realty Co., 980 F.2d 125, 131-32 (2d Cir. 1992) (“[T]hird-party

action[s] to recover fraudulently transferred property [are] properly regarded as undertaken to

recover a claim against the debtor and [are] subject to the automatic stay pursuant to §

362(a)(1)”).

Here, while it is certainly true that the Committee does not approve of the manner in

which the Debtors have resolved the Avoidance Claims, it cannot take the position that the

claims have been abandoned, or that they have not been resolved by the Debtors at all, or that the

fruits of that resolution will be committed to anything other than payment of allowed claims

against the Debtors under the Plan.

The Debtors’ exclusive right to control and to resolve the Avoidance Claims, even when

outside bankruptcy individual claimants may have had the right to litigate such claims

themselves, is well illustrated by the decision of the Fourth Circuit in Nat'l Am. Ins. Co., 187

F.3d at 441. There, the trustee and an individual creditor, proceeding for itself individually,

were both seeking to avoid the same transaction, each using a different legal basis for recovery.

(continued from previous page)law, and as to which creditors would obtain the right to press against the nondebtor transferees once the two-yearlimitations period under § 546(a) for bringing estate avoidance actions has run.”


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The Fourth Circuit vetoed the individual creditor’s effort, holding that individual creditors

"lack[ed] standing to pursue these claims in district court. Until the trustee . . . abandoned his

potential fraudulent conveyance action, the [creditors could] not proceed with their claims in

district court." Id. Similarly, the Second Circuit in Tribune noted that “[u]ltimately, it is

irrelevant whether the Committee styles its claim as intentional or constructive or as one

under Section 548(a)(1)(A) or Section 544(b)(1). Section 362(a)(1) stays fraudulent conveyance

claims by creditors for as long as the trustee is exercising its avoidance powers.” In re Tribune,

499 B.R. at 323.

In these chapter 11 cases the Debtors are not failing to prosecute the Avoidance Claims

and are not abandoning them; they are instead settling them for valuable consideration. The

Tribune court could not have said it better:

Bankruptcy is intended to consolidate multiple, potentially wasteful claims in one entity— the trustee…. While the trustee acts, it cuts off the claims of creditors in order to seeka fair, orderly, and comprehensive resolution of the debtor's financial affairs so that, asmuch as it is possible, creditors are made whole.

In re Tribune, 499 B.R. at 324-325.

B. The Derivative Claims. As in the case of the Avoidance Claims, the

right to prosecute and resolve the Derivative Claims also rests exclusively with the Debtors.

Although the Committee claims that the Parent Settlement releases derivative claims that

“belong to creditors . . . against the nondebtors transferees” [Objection, p. 39], it ignores the

well-established law holding otherwise.

Two different theories have been advanced by courts to arrive at the conclusion that

claims of the character of the Derivative Claims are maintainable exclusively by a trustee or

debtor-in-possession: (a) that debtors-in-possession act as representatives of claimants in the

same sense and for the same purposes as in the case of the Avoidance Claims, and (b) that as to


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theories resting on doctrines of alter ego or veil piercing, because of the identity of interest

between a debtor and its parent or affiliated entity, a debtor-in-possession itself has an “equitable

interest” in the assets of the dominant parent entity, thereby rendering the claim “property of the

estate” within the meaning of 11 U.S.C. §541(a)(1). E.g., Steyr-Daimler-Puch of America Corp.

v. Pappas, 852 F.2d 132, 136 (4th Cir. Va. 1988) (explaining the two different theories and

concluding that under either or both, sole right to pursue and resolve such claims rests with the

debtor-in-possession); See also Trans-Continental Meats v. Shaw Food Servs. Co., No. 5:94-cv-

675, 1995 U.S. Dist. LEXIS 19665 (E.D.N.C. Nov. 30, 1995) (same holding).

Under the law of either North Carolina or New York13 potential claims to transfer the

Debtors’ liability under variations of alter ego or veil piercing are, once bankruptcy has

intervened, maintainable solely by the Debtors themselves and therefore must be prosecuted by

the Debtors for the benefit of the estate’s constituencies generally. This principle has been

repeatedly endorsed by this Court and by other bankruptcy courts in North Carolina. E.g.,

Sigmon, 2002 Bankr. LEXIS 1876, at *17 (WDNC)(Under North Carolina law, a claim of alter

ego, or breach of fiduciary duty by an officer or director, is a claim owned by the corporation,

not its creditors); Holcomb v. Pilot Freight Carriers, Inc., 120 B.R. 35, 38, 41–42 (M.D.N.C.

1990)(applying North Carolina law); Midstate Mills, Inc., 2015 Bankr. LEXIS 3105, at *20

(WDNC) (Under North Carolina law, alter ego claims belong to the bankruptcy estate and may

only be asserted by the Trustee); Angell, 336 F. Supp. 2d at 544-545 (M.D.N.C.)(when all

creditors of an insolvent or bankrupt corporation share an injury based on a common act, only a

receiver or trustee has standing to assert the creditors' collective claim against directors on behalf

13 See Footnote 9 supra with respect to the choice of law question.


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of the corporation); Trans-Continental Meats, 1995 U.S. Dist. LEXIS 19665 (the trustee has the

exclusive right to pursue the [alter ego] claims unless the trustee has abandoned the claims.)

In Angell v. Kelly, 336 F. Supp. 2d 540 (M.D.N.C. 2004), the Court laid out the

applicable North Carolina analysis. “When all creditors of an insolvent or bankrupt corporation

share an injury based on a common act, only a receiver or trustee has standing to assert the

creditors' collective claim against directors on behalf of the corporation.” Id at 544. see also

Nat’l Am. Ins. Co., 187 F.3d at 441 (holding that individual creditor lacked standing to assert

separate cause of action apart from bankruptcy proceeding because claim was substantially

similar to those available to other creditors and "the trustee's role is to bring suits such as these

on behalf of all the creditors"); Holcomb, 120 B.R. at 42-43 (holding the trustee had exclusive

standing because “all plaintiffs’ alter ego claims allege injury to creditors in general”).

Courts in the Second Circuit also agree that when the harm suffered by an individual

claimant is no different than the harm suffered by other similarly situated creditors, the action is

maintainable by the debtor-in-possession, not by an individual claimant. St. Paul Fire & Marine

Ins. Co. v. Pepsico, Inc. 884 F.2d 688, 704 (2d Cir. 1989); accord, Rosener v. Majestic Mgmt. (In

re OODC, LLC), 321 B.R. 128, 136 (Bankr. D. Del. 2005) (stating the “majority view” that a

claim based on an alter ego theory should be the trustee’s exclusively where it is general to all

creditors and allowed by state law) (citing Baillie Lumber Co. v. Thompson, 391 F.3d 1315, 1321

(11th Cir. 2004); Messer v. Bentley Manhattan, Inc. (In re Madison Bentley Assocs., LLC), 516

B.R. 724, 729 (S.D.N.Y. 2014) (noting that the harm to the creditors was indirect and general

because the fraudulent transfers deprived the debtor of assets that would otherwise satisfy

creditor’s claims.)


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The Committee contends that by means of their dominion and control of the Debtors,

Coltec and others of the Debtors’ affiliates have directed the Debtors’ pre-petition activities with

respect to the manufacture, distribution and sale of asbestos-containing products or, alternatively,

that Coltec and other affiliates have so dominated and controlled the Debtors that the Debtors’

separate existences are mere fictions.14 The course of conduct of which Coltec and the Debtors’

affiliates stand accused is one whose effects, if any, are common to all who claim to have been

exposed to Garlock’s asbestos-containing products; it does not differ from claimant to claimant.

Under the “property of the estate” analytical variant, cases from jurisdictions in both the

Second and Fourth Circuits have held that derivative claims belong to the estate. The Fourth

Circuit, applying Virginia law, has held that an alter ego claim is property of the estate under

§541(a)(1). Thus, the trustee, who succeeds to the rights of the debtor, can bring an alter ego

claim. Pappas, 852 F.2d at 136. With the Pappas guidance, the Middle District of North

Carolina reviewed the issue under North Carolina law in Holcomb, finding “it to be entirely

consistent with the Fourth Circuit's requirement in Pappas that a corporation may be said to have

an equitable interest in the assets of an alter ego when they are one and the same.” Holcomb,

120 B.R. at 41-42. In summary, “in North Carolina, alter ego claims, which are based on factors

which establish that the controlled corporation and the alter ego have the same identity, belong

to the bankruptcy estate and must be prosecuted by the trustee.” Id. “It is well-settled, however,

that when all creditors of an insolvent or bankrupt corporation share an injury based on a

14 See Motion, p. 2 (“The Parent Settlement is the product of self-dealing insofar as it originates in a scheme struckbetween related parties—namely, the Debtors and Coltec—to extinguish claims against EnPro Industries, Inc.(“EnPro”) and Coltec Industries Inc. (“Coltec”), who control and dominate the Debtors.”), see also Objection, p. 45(“The Proposed Complaint sets forth facts showing that, in the 2004- 2005 transfers and the 2010 note revisions,Garlock was subservient to the domination of EnPro and Coltec, and that these transactions were a direct expressionof the parent companies’ pervasive control over GST’s approach to its asbestos liabilities.”).


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common act, only a receiver or trustee has standing to assert the creditors' collective claim

against directors on behalf of the corporation.” Angell, 336 F. Supp. 2d at 544-545.

This Court has agreed with Holcomb and Pappas holding “under North Carolina law, a

claim of alter ego is a claim owned by the corporation, not its creditors.” Sigmon, 2002 Bankr.

LEXIS 1876; see also Alvarez v. Ward, No. 1:11 cv 03, 2011 U.S. Dist. LEXIS 151873

(W.D.N.C. Oct. 17, 2011) (consistent with the Fourth Circuit's holding in Pappas, a corporation

has an interest in the assets of its alter ego, and, thus, an alter ego claim is the property of the

estate for purposes of Section 541(a)(1)).

Likewise in the Second Circuit, where a debtor has a right to assert an alter ego claim to

pierce its own corporate veil under applicable state law, that claim is property of the debtor's

estate and the claim may only be asserted by the trustee or debtor-in-possession. See e.g. Kalb v.

Voorhis Co. v. American Financial Corp., 8 F.3d 130, 132 (2d Cir. 1993). St. Paul Fire &

Marine Ins., 884 F.2d 688, the court held that (a) if the alter ego claim could have been asserted

by the debtor pre-petition, and (b) if the claim does not involve a distinct injury to a particular

creditor, then the bankruptcy trustee is the proper party to assert the alter ego claim and all other

creditors are stayed by section 362. See id. at 704-05. In the St. Paul case the court was faced

with the potential for conflicting lawsuits inside and outside of bankruptcy, by a bankruptcy

trustee and a creditor, respectively. Id. The court reasoned that if the claims asserted by the

creditor outside of bankruptcy were property of the debtor under state law, then the creditor's

claim was precluded by the bankruptcy trustee's right to pursue the claim on behalf of the estate.

Id. While the St. Paul case was considering the alter ego claim under Ohio law, the District

Court for the Southern District of New York subsequently found that New York law also permits

a "trustee [to] bring an alter ego cause of action on behalf of a corporate debtor in an attempt to


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collect property of the estate for the benefit of all creditors if such an action is not personal to

any particular creditor." The Mediators v. Manney (In re Mediators), No. 91 B 12980 (PBA),

Adv. No. 93 CIV. 2304 (SDH), 1996 U.S. Dist. LEXIS 7639 (S.D.N.Y. June 4, 1996). See also

Jackson v. Corporate Gear, LLC, No. 04 Civ. 10132 (DC), 2005 U.S. Dist. LEXIS 35579, 2005

WL 3527148 (S.D.N.Y. Dec. 21, 2005) ("Under New York law, a corporation may pierce its

own corporate veil.")

The Committee cites to a Ninth Circuit case and an Eighth Circuit case in support of its

claim that alter ego or veil piercing claims “belong to” individual creditors. [Objection, p. 38].15

These Committee’s cases lack authority in this jurisdiction, and, upon close examination,

actually betray the Committee’s position. In Ahcom, Ltd. v. Smeding, 623 F.3d. 1248 (9th Cir.

2010), the Ninth Circuit explained that an alter ego theory is not a claim by itself under

California law, but is rather a conduit for transferring liability for other substantive claims;

therefore, the trustee could not claim exclusive standing for “alter ego claims” because it had no

“claim” to assert. Id. at 1252. Rather than conferring “alter ego claims” upon the creditor as the

Committee asserts, Ahcom simply clarified that to have exclusive standing to pursue an alter ego

claim a trustee or debtor-in-possession must first assert an underlying substantive claim. Id.

Moreover, in relying on the Ninth Circuit’s Ahcom opnion the Committee fails to come to grips

with Shaoxing County Huayue Import & Export v. Bhaumik, 191 Cal. App. 4th 1189 (Cal. App.

2d. Dist. 2011). There, the California Court of Appeals, applying California law, specifically

stated that “[t]he trustee of a bankrupt corporation can maintain an action . . . on an alter ego

theory in order to recover property or pursue a right of action belonging to the bankrupt

15 See Objection, p. 38 (“In other words, claims and remedies belonging to creditors, and not to the Debtors’ estates,would be released and extinguished under the Plan, as part of the Parent Settlement. These would include claims forsuccessor liability or alter ego which, under certain state laws, belong to individual creditors and not to thebankruptcy estates.”)


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corporation, including an action to set aside fraudulent transfers.” Id. at 1199 (emphasis added).

Under both Ahcom and Bhaumik, the Committee is plainly wrong that under California law all

claims under an alter ego theory “belong to individual creditors and not to the bankruptcy

estates.”

The Committee’s reliance on In re. Ozark Rest. Equip. Co., 816 F.2d 1222 (8th Cir. 1987)

is similarly misplaced because the Committee misconstrues its holding as a general bar against

trustees or debtors’-in-possession right to pursue alter ego claims. [Objection, p.38] The trustee

in Ozark was denied standing to bring an alter ego claim because under Arkansas law (entirely

inapplicable here), the relevant underlying substantive claims at issue could not be brought by

the corporation. Id. The court, however, expressly acknowledged that “[i]t is possible that some

states permit the corporation or its stockholders to assert an alter ego cause of action . . . and

thus, that a bankruptcy trustee would be able to enforce the claim.” Id. at 1226. Such a situation

is directly on point here because, as discussed above, the relevant jurisdictions have repeatedly

allowed a trustee or debtor-in-possession to assert claims similar to the Released Claims.

Further, courts in many jurisdictions criticize and decline to follow Ozark. See, American

Fin. Corp., 8 F.3d at 134 (“In re Ozark Rest. Equip. Co. does not support the proposition that a

trustee lacks standing to assert veil-piercing claims . . . .”); Sigmon, 2002 Bankr. LEXIS 1876, at

*10 (noting that In re: Ozark Rest. Equip. held only that alter ego claims belong to the creditors

under Arkansas law); Rosener, 321 B.R. at 136 (“However, the Ozark decision was predicated

on Arkansas state law, which the Court found did not allow a corporation to bring an action to

pierce the corporate veil. . . . Further, the Ozark decision is by no means the majority view”). In

short, the Committee’s misguided attempt to claim ownership over the fraudulent transfer and

alter ego claims to assert against non-debtors finds no support in the Second or Fourth Circuits.


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Finally, it must be emphasized, the Committee’s fixation on to whom the Derivative

Claims “belong” is misplaced and is, in fact, irrelevant to the issue at hand. As discussed earlier

and as well-explained by the Fourth Circuit in its Pappas decision, it matters not whether such

claims are “property of the estate,” as is the case under North Carolina law, or whether instead a

trustee or debtor-in-possession is deemed to be acting as a “representative of creditors,” the

result is the same: only the Debtors may pursue the claims and only the Debtors may resolve the

claims, unless the Debtor chooses to abandon them altogether. Pappas, 852 F.2d at 136.

Instructive in driving this point home is the Third Circuit’s decision in In re PWS Holding

Corporation, 303 F.3d 308 (3d Cir. 2002). There, an individual claimant objected to a proposal

in the debtor’s plan of reorganization that would extinguish (not settle for valuable

consideration) certain fraudulent conveyance claims maintainable under state law by individual

creditors and assertable by the debtor using its powers under 11 U.S.C. §544(b). When the

creditor attempted to institute his individual fraudulent conveyance claim in state court after

confirmation, he was promptly enjoined by the district court that had confirmed the plan from

prosecuting his action. On appeal the Third Circuit upheld the district court’s injunction,

reasoning that the “ownership” of the claim was irrelevant, since under the Code the debtor had

the right to maintain the claim and to extinguish the claim completely and that plan provisions to

that effect were binding on all parties, including the objecting individual claimant.

In summary, sole control over the disposition of the Avoidance Claims and the Derivative

Claims lies with these Debtors, and the Released Claims under the Parent Settlement include no

other claims than those.

III. Section 524(e) of the Code Does not Bar the Parent Settlement.


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The Committee also argues that the Parent Settlement violates 11 U.S.C. § 524(e)

because it is an impermissible release of direct claims held by claimants against non-debtor third

parties. [Objection, pp. 32-34] Section 524(e) provides in pertinent part that the “discharge of a

debt of the debtor does not affect the liability of any other entity on . . . such debt.” 11 U.S.C. §

524(e) (emphasis added). The Committee’s argument on this point is not an obstacle to approval

of the Parent Settlement; it fails for reasons advanced in the preceding section of this Brief. The

Parent Settlement not depend or rest on any attempt to extend the Debtors’ discharge under 11

U.S.C. §524(a) to cloak the Released Parties with immunity; instead, the Parent Settlement is a

resolution and liquidation of the Released Parties’ own liabilities to the estate.

The Parent Settlement enforcement injunction is fundamentally different from a so-called

“non-debtor release,” which a bankruptcy court can in certain circumstances issue to prohibit

direct claims against third parties connected to the estate. See, e.g., Nat’l Heritage Found., Inc. v.

Highbourne Found., 760 F.3d 344, 346 (4th Cir. 2014). The very few cases that do analyze the

relationship between Section 524(e) and a proposed release of claims alleging derivative liability

hold that while enjoining a third-party’s direct claim against a non-debtor may implicate Section

524(e), the release of derivative claims or direct claims held by the estate does not do so. E.g, In

re Pacific Gas & Electric Co., 304 B.R. 395, 416, 418 n.26 (N.D. Cal. 2004) (distinguishing

authorities holding that Section 524(e) proscribes the involuntary release of a creditor’s claims

against a non-debtor because the release in the plan at issue only extinguished claims belonging

to the estate, including derivative claims); Huddleston v. Nelson Bunker Hunt Trust Estate, 117

B.R. 231, 234 (N.D. Tex. 1990) (concluding that the court need not address whether a release in

the plan violated Section 524(e) because the provision only extinguished derivative claims);

Unarco Bloomington Factory Workers v. UNR Indus., 124 B.R. 268, 277-79 (N.D. Ill.


20CHAR2\1747076v6

1990)(Reversed on other grounds) (holding that Section 524(e) did not apply to a permanent

injunction in the plan because the plan’s provision only barred lawsuits asserting derivative

claims; explaining that the court did not need to consider whether a non-debtor release of direct

claims is permissible because such a release is “broader than the one at issue here”); In re

Texaco, Inc., 84 B.R. 893, 900 (Bankr. S.D.N.Y. 1988) (“11 U.S.C. § 524(e) does not apply to

the [plan] because the proposed releases, indemnities and discontinuances of derivative actions

relate to claims belonging to the debtor only, and do not affect the claims of any creditors.”).

As the Northern District of Illinois recognized in the UNR case (which involved asbestos

claims) in the context of settlements of insurance policies owned by the estate, an injunction

enforcing an estate release “escapes any conflict with Section 524(e) and therefore does not

require us to decide whether the approach of the Fourth Circuit in A.H. Robins should be applied

here.” UNARCO Bloomington Factory Workers, 124 B.R. at 278-79. The court went on to state,

“The bankruptcy court undeniably possessed authority to settle claims involving the property of

the estate, in this case, the insurance policies. . . . Once the proceeds of the insurance litigation

became part of the estate, the bankruptcy court clearly had authority to protect that property. Id.

Although the Seventh Circuit has not directly addressed the Section 524(e) issue, it has

specifically approved of the principle that the power of the bankruptcy court under Section

105(a) includes the power to issue an injunction enjoining third parties from pursuing actions

which are the exclusive property of the debtor estate and are dismissed pursuant to a settlement

agreement.” Id. at 279).

As discussed earlier, the Parent Settlement resolves only potential claims whose right of

pursuit and resolution are vested solely in the Debtors, with any recoveries being had solely for

the benefit of the Debtors’ estates as provided by 11 U.S.C. §541(a)(3). The potential claims and


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the terms of the resolution of those claims are set forth in the Plan, as is specifically permitted

and contemplated by 11 U.S.C. §1123(b)(3)(A). This type of release is permissible. In Pacific

Gas & Electric Co., 304 B.R. at 418, the California Bankruptcy Court approved a release by the

Debtor of claims against non-debtor parties which were held by, assertable on behalf of, or

derivative of the Debtor. The confirmation order contained language acknowledging that the

plan did not release claims which may be asserted directly by third parties against non-debtors.

The Pac. Gas Court specifically held that the releases of these types of claims are permissible

when connected with a plan settlement that settles or adjusts any claim belonging to the estate

pursuant to 11 U.S.C. § 1123(b)(3)(A), which is exactly what the Plan Settlement provides.

IV. The Parent Settlement May Properly Be Made Part of the Plan and Will, If thePlan is Confirmed, Become Binding on All Parties, Including Claimants Who DoNot Support the Plan.

The merits of the Parent Settlement are not before the Court on the present motion; only

the Court’s power to approve the Parent Settlement outside the contours of a Plan which invokes

11 U.S.C. §524(g) is now at issue. The evidence that will be presented at the confirmation

hearing will demonstrate that the Parent Settlement is a bona fide settlement of the potential

Avoidance Claims and Derivative Claims. Such a resolution is expressly permitted under 11

U.S.C. §1123(b)(3)(A) of the Bankruptcy Code, which provides that “a plan may…provide

for…the settlement or adjustment of any claim or interest belonging to the debtor or to the

estate.” Nothing in Section 524(g) of the Code purports to repeal, modify, or limit the use of

Section 1123(b)(3)(A) to resolve claims belonging to a debtor’s estate. If the Plan containing the

Parent Settlement is confirmed, then the provisions pertaining to that resolution will, by virtue of

the express provisions of 11 U.S.C. §1141(a), become binding on all parties in interest, including


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claimants who opposed the Parent Settlement or objected to the Plan. That section states in

relevant part:

Except as provided in subsections (d)(2) and (d)(3) of this section, the provisionsof a confirmed plan bind…any creditor, whether or not the claim or interest ofsuch creditor…is impaired under the plan and whether or not such creditor…hasaccepted the plan.

Finally, it is routine for bankruptcy courts to buttress the binding effect of §1141(a) by entering

injunctions pursuant to either or both of 11 U.S.C. §1142 or 105(a) to enforce or to forbid

interference with the provisions of a confirmed plan.

In this Court settlements embodied in a plan have been confirmed, have been held to be

binding on creditors, and have been enforced and buttressed with injunctions included in the

ordinary course. In the Hendricks Furniture Group, LLC case, injunctions were put into place to

protect the provisions of the plan and non-debtor parties were provided exculpation.16 In

Northampton Generating Company, L.P., this Court approved the releases of third parties that

were the subject of settlements in the Northampton plan pursuant to 11 U.S.C § 1123(b)(3) using

§105(a) to enforce the settlement.17 Additionally, settlements in the J.A. Jones, Inc., et al. plan

16 See Sections 15 and 16 of the Order Confirming First Amended Joint Consolidated Plan of Reorganization ofHendricks Furniture Group, LLC and its Affiliate Debtors and Debtors-In-Possession Proposed by HendricksFurniture Group, LLC and its Affiliate Debtors dated: December 7, 2009, entered January 22, 2010 [Docket No.426].

17 See Section HH of the Findings of Fact, Conclusions of Law, and Order (i) Approving the Debtor’s DisclosureStatement and (ii) Confirming The Debtor’s Chapter 11 Plan Of Reorganization, entered January 29, 2013 [DocketNo. 308], Section HH – Releases provided:

105(a) of the Bankruptcy Code permits approval of the releases, exculpation and related Planterms set forth in Article 10 and elsewhere in the Plan and Confirmation Order, because, as hasbeen established here based upon the record in the Chapter 11 Case and the evidence presented inthe Declaration and at the Continued Combined Hearing, such provisions (i) were integral to theagreement among the various parties in interest and are essential to the formulation andimplementation of the Plan, as provided in Section 1123 of the Bankruptcy Code, (ii) confersubstantial benefits on the Debtor’s and Debtor Subsidiaries’ Estates, (iii) are fair, equitable, andreasonable, and (iv) are in the best interests of the Debtor, Debtor Subsidiaries, their Estates, andparties in interest. Pursuant to Section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule9019(a), the releases, exculpation and related Plan terms set forth in the Plan and implemented by

(continued on next page)


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pursuant to §1123(b)(3) were approved and claims against the non-debtor Zurich insurance

companies and sureties were enjoined as part of that settlement and protected under the plan

injunction provisions.18 The Parent Settlement here, and the releases and injunctions that

implement and enforce that settlement, are no different from long-standing practice in many

chapter 11 reorganization cases. The Northampton, Hendricks Furniture Group, LLC and J.A.

Jones, Inc. confirmation orders are attached to this Brief as Exhibits A, B and C, respectively.

This Court has also held that releases of third parties is appropriate when a trustee

releases such third parties from claims or causes of action pursuant to a settlement, similar to the

Parent Settlement, that a trustee has standing to pursue on behalf of a debtor or the debtor’s

estate. See e.g. Midstate Mills, Slip op. at 25 (emphasis added). In Midstate, the Trustee agreed

to settle any and all claims the bankruptcy estate had against the Georgia Defendants. As part of

their settlement, the Trustee released the Georgia Defendants from all claims the Trustee had

standing to bring against them in exchange for a payment of $75,000 and the Georgia

Defendants’ acquisition of and withdrawal of an $11 million deficiency claim filed by the

Debtor’s successor. Id. at p. 6. The Court denied creditors from pursuing avoidance claims and

other similar estate claims against the Georgia Defendants in another court because they had

been properly settled and released in a binding settlement order. Id.

Prior to the enactment of the Bankruptcy Code, the Supreme Court noted that settlements

are a normal, routine part of the reorganization process. See Protective Committee for

Independent Stockholders of TMT Trailer Ferry v. Anderson, 390 U.S. 414 (1968). Congress

(continued from previous page)this Confirmation Order are fair, equitable, reasonable, and in the best interests of the Debtor andDebtor Subsidiaries, and their Estates, Creditors, and equity holders.

18 See Sections N and O of the Order Confirming Third Amended and Restated Joint Chapter 11 Plan of Liquidationor J.A. Jones, Inc. and Certain Debtor Subsidiaries, entered August 19, 2004 [Docket No. 2858].


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codified settlements as a proper reorganization procedure in 11 U.S.C. § 9019 and permitted

debtors to include settlements in their plan in 11 U.S.C. § 1123(b)(3). In administering

reorganization proceedings in an economical and practical manner it will often be wise to

arrange the settlement of claims as to which there are substantial and reasonable doubts. At the

same time, however, it is essential that every important determination in reorganization

proceedings receive the “informed, independent judgment” of the bankruptcy court. See Nat’l

Surety Co. v. Coriell, 289 U.S. 426 (1933). Simply put, settlements of claims routinely occur in

reorganization cases. E.g., In re DBSD North America, Inc., 419 B.R. 179 (Bankr. S.D.N.Y.

2009) (finding that the release of claims owned by the Debtors, including derivative claims, are

authorized by Section 1123(b)(3)(A)), (aff’d in part and rev’d in part, in each case on other

grounds); see also In re Mesa Air Group, Inc., 2011 Bankr. LEXIS 189 (Bankr. S.D.N.Y. 2011)

at *33, 214-15 (confirming a plan of reorganization that released all causes of action “assertable

on behalf of or derivative from the debtors…”); Rifken v. Capital Source Finance, LLC (In re

Felt Mfg. Co.), 402 B.R. 502, 516 (Bankr. D.N.H. 2009) citing Harstad v. First Am. Bank, 39

F.3d 898, 902-03 (8th Cir. 1994); In re Dow Corning Corp, 255 B.R. 445, 480 (E.D. MI. 2000)

(“11 U.S.C. §§ 1141(a) [and] 1123(b)(3)…are sources of authority from which the Bankruptcy

Court can exercise its equitable powers under § 105(a) to issue permanent injunctions.”). Once

the Plan, which contains the Parent Settlement and accompanying releases, is confirmed in a

final, binding order, the injunction will be binding on all creditors as further discussed below.

See Stoll v. Gottlieb, 305 U.S. 165 (1938).

V. Additionally, the Preclusive Effect of an Order of Confirmation and the“Single Satisfaction” Rule Will Apply Here to Extinguish Any Post-Confirmation Re-litigation of Claims Resolved in the Plan.


25CHAR2\1747076v6

Buttressing the preclusive effect of 11 U.S.C. §§1123(b)(3)(A) and 1141(a) is an

important principle of non-bankruptcy law that is fully operable in bankruptcy cases. It is

sometimes called the “single satisfaction” rule, but a variant statement of the principle is the

doctrine of preclusion by merger, that is, a claim once reduced to judgment becomes merged

into the judgment and may not later be re-litigated a second time. The principle is an ancient one

and in the bankruptcy context finds expression in the Supreme Court’s seminal decision in Stoll.

In Stoll, the plan of reorganization proposed to release a guarantor from his guarantee of a

bond issued by the debtor after the guarantor contributed stock to the reorganized entity. Id. at

168. Over the objection of the creditor beneficiary of the released guarantee, who argued that the

bankruptcy court did not have the jurisdiction or power to cancel the guarantee, the plan was

confirmed and the order of confirmation became final. Id. After confirmation the creditor then

filed suit in state court to recover from the guarantor, resting again on its position that the

bankruptcy court lacked the power to extinguish the guaranty. The guarantor, in response,

contended the state court suit was barred by res judicata. Id. at 170. After back-and-forth

rulings at the trial and intermediate appellate levels, the question eventually reached the United

States Supreme Court.

The Supreme Court stated as a general principle “where the judgment or decree of the

federal court determines a right under a federal statute, that decision is ‘final until reversed in an

appellate court, or modified or set aside in a court of its rendition.’” Id. at 171. The Supreme

Court went on to explain “[a]s this plea was based upon an adjudication under the reorganization

provisions of the Bankruptcy Act, effect as res judicata is to be given the federal order, if it is

concluded it was an effective judgment in the court of its rendition.” Id. Notwithstanding the

disappointed creditor’s objection to the release of its guarantor embodied in the plan, the


26CHAR2\1747076v6

Supreme Court concluded that once the order confirming that plan had become final, collateral

attack on the order of confirmation and the provisions of the plan was forbidden and the

creditor’s state court lawsuit on the released guarantee was therefore barred. Id. at 172.

Especially noteworthy about the Stoll decision is the fact that the order of confirmation was held

to be preclusive even as to claimants who might have been litigating in jurisdictions where the

applicable substantive law would have been different than the law that had been applied by the

bankruptcy court in its ruling on plan confirmation.

The Fourth Circuit follows Stoll, holding that final confirmation orders are binding on

creditors as to matters embraced within the plan and the confirmation order. E.g., First Union

Commer. Corp. v. Nelson, Mullins, Riley, & Scarborough (In re Varat Enters.), 81 F.3d 1310,

1315 (4th Cir. 1996). The First Union Court noted that when all of the requirements for claim

preclusion are satisfied, the judgment acts as an absolute bar to the subsequent action with regard

to every claim which was actually made or and those which might have been presented. Id.

“Once a plan is confirmed, neither a debtor nor a creditor can assert rights that are inconsistent

with its provisions.” Id. This is also the rule in the Second Circuit. See Trendi Sportswear, Inc.

v. Bank of Baroda (In re Indu Craft Inc.), 580 F. App’x 33, 34 (2d Cir. N.Y. 2014), cert. denied,

135 S. Ct. 2868 (2015) (“preclusion applies in bankruptcy matters….. [a]s to both res judicata

and collateral estoppel, the preclusive effects of a final judgment are not “altered by the fact that

the judgment may have been wrong or rested on a legal principle subsequently overruled in

another case.”)

If this Court, after considering the record presented at the confirmation hearings,

determines to confirm the Plan, including the Parent Settlement provisions, then the Court’s

order of confirmation will, under Stoll, preclude any subsequent litigation of the Avoidance


27CHAR2\1747076v6

Claims or the Derivative Claims. This result would be only fair and just. The consideration paid

in exchange for the provisions of the Parent Settlement will be paid to the Debtors’ estates for

the benefit of all claimants against those estates. If individual claimants were permitted to

litigate those same claims again after confirmation, for their own individual benefit, then they

would be permitted, in effect, double recovery, violating the often applied rule that a claimant is

entitled to but a single satisfaction on account of its claim.19

CONCLUSION

Recurring to the beginning, there is nothing unusual or untoward about the legal basis for

the Parent Settlement and the associated releases and injunctions. They rest on generally

acknowledged and unremarkable principles of bankruptcy law applicable across all types of

bankruptcy cases. The Committee’s contention that the Parent Settlement is impermissible

outside the context of a plan that relies on 11 U.S.C. §524(g) is not sustainable and its motion for

partial summary judgment should be denied.

This the 18th day of December, 2015.

By: /s/ Daniel G. ClodfelterDaniel G. ClodfelterN.C. Bar ID No. [email protected] POE ADAMS & BERNSTEIN, LLPThree Wells Fargo Center401 South Tryon Street, Suite 3000Charlotte, NC 28202Telephone: 704.335.9054Facsimile: 704.335.9762

19 It is interesting that, at least as to the Avoidance Claims, the “single satisfaction” rule has been statutorilycodified in 11 U.S.C. §550(d). Although that section only bars a second recovery by the trustee or debtor- in-possession and does not, by its express language, bar a second action by another party, it nonetheless embodiesstatutory recognition of the traditional preclusion principles discussed in this section of the Brief.


28CHAR2\1747076v6

Mark A. NebrigN. C. Bar ID No. [email protected] B. CrabtreeN.C. Bar ID No. [email protected]. Taylor StukesN.C. Bar ID No. [email protected] & VAN ALLEN PLLC100 N. Tryon St., Suite 4700Charlotte, North Carolina 28202-4003Telephone: (704) 331-1000Facsimile: (704) 331-1059

Attorneys for Coltec Industries Inc.


EXHIBIT A

Case 10-31607 Doc 5157-1 Filed 12/18/15 Entered 12/18/15 19:32:15 Desc Exhibit A Page 1 of 135

1

IN THE UNITED STATES BANKRUPTCY COURTFOR THE WESTERN DISTRICT OF NORTH CAROLINA

CHARLOTTE DIVISION

In re: ) Case No. 11-33095)

NORTHAMPTON GENERATING )COMPANY, L.P., ) Chapter 11

)Debtor. )

)

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER (I) APPROVING THEDEBTOR’S DISCLOSURE STATEMENT AND (II) CONFIRMING THE DEBTOR’S

CHAPTER 11 PLAN OF REORGANIZATION

WHEREAS the above captioned debtor and debtor in possession (the “Debtor”), has

proposed and filed with the United States Bankruptcy Court for the Western District of North

Carolina (the “Court”) (i) the Debtor’s Chapter 11 Plan of Reorganization for Northampton

Generating Company, L.P. as of December 21, 2012 [Docket No. 259] (the “Plan”)1, (ii) the

Disclosure Statement for Debtor’s Chapter 11 Plan of Reorganization for Northampton

Generating Company, L.P. as of December 21, 2012 [Docket No. 258] (the “Disclosure

Statement”), (iii) the various Certificates of Service filed on or about December 21, 2012 and

December 23, 2012 regarding service of the voting and non-voting Plan solicitation packages on

holders of Claims and Interests and other parties in interests; (iv) the Plan Supplement filed on

1 All terms not otherwise defined herein are defined in the Plan.

_____________________________J. Craig Whitley

United States Bankruptcy Judge

Steven T. Salata

Clerk, U.S. Bankruptcy CourtWestern District of North Carolina

Jan 29 2013

FILED & JUDGMENT ENTERED



2

January 5, 2013 [Docket No. 276] and Amended Plan Supplement filed on January 24, 2013

(collectively, the “Plan Supplements”), (v) the Report of Voting on the Chapter 11 Plan of

Reorganization for Northampton Generating Company, L.P. as of December 21, 2012, reporting

on the ballots accepting or rejecting the Plan filed on January 24, 2013 [Docket No. 295] (the

"Ballot Report"), (vi) the Declaration of Phillip W. Preis in Support of Confirmation of Chapter

11 Plan of Northampton Generating Company, L.P. (the "Houlihan Declaration") filed on

January 25, 2013 [Docket No. 300], and (vii) the restated final version of the Plan filed to show

modifications and amendments [Docket No. 302] attached hereto as Exhibit A;

WHEREAS the Court entered the Ex Parte Order Conditionally Approving the

Disclosure Statement, Approving Solicitation Procedures and Establishing Deadlines And

Hearing Dates Relating to Plan Voting and Confirmation (the “Combined Hearing Order”)

[Docket No. 261], which, among other things, scheduled the hearing to consider approval of the

Disclosure Statement and confirmation of the Plan (the “Combined Hearing”), which was

continued pursuant to the Amended Order Conditionally Approving Disclosure Statement,

Approving Solicitation Procedures and Establishing Deadlines and Hearing Dates Relating to

Plan Voting and Confirmation entered on January 8, 2013 (the “Continued Combined Hearing”)

[Docket No. 279];

WHEREAS due notice of the Combined Hearing has been given to holders of Claims

against the Debtor and other parties in interest in compliance with title 11 of the United States

Code (the “Bankruptcy Code”), the Federal Rules of Bankruptcy Procedure (the “Bankruptcy

Rules”), the Combined Hearing Order and the solicitation procedures approved therein, as

established by the affidavits of service, mailing, and/or publication filed with the Court,

including (1) the Certificate of Service dated December 21, 2012 [Docket No. 264] and (2)



3

BNC Certificate of Mailing dated December 23, 2012 [Docket No. 265], (collectively, the

“Combined Hearing Certificates”);

WHEREAS due notice of the Continued Combined Hearing has been given to holders of

Claims as established by the Certificate of Service dated January 10, 2013 [Docket No. 283]

(the “Continued Hearing Certificate” and together with the Combined Hearing Certificates, the

“Hearing Certificates”);

WHEREAS such notice is sufficient under the circumstances and no further notice is

required;

WHEREAS, U.S. Bank National Association, not individually but as successor collateral

agent and successor senior bond trustee for the senior bonds filed a Limited Response and

Reservation of Rights on Debtor’s Plan of Reorganization and Disclosure Statement on January

23, 2013 [Docket No. 293] (the “Response”).

NOW, THEREFORE, based upon the Court’s consideration of the entire record of this

Chapter 11 Case and the Continued Combined Hearing, including (A) the Disclosure Statement,

the Plan (as amended) and the Ballot Report, (B) the Houlihan Declaration, (C) the Plan

Supplements (D) the Hearing Certificates, (E) the evidence presented at the January 29, 2013

hearing on confirmation of the Plan and (F) any and all objections to approval of the Disclosure

Statement and confirmation of the Plan having been withdrawn, resolved, or otherwise overruled

as set forth herein; and upon the arguments of counsel and the evidence adduced at the

Continued Combined Hearing; and the Court having found that the Disclosure Statement should

be approved and the Plan should be confirmed as reflected by the Court’s rulings made herein

and at the Continued Combined Hearing; and after due deliberation and sufficient cause

appearing therefor, the Court hereby FINDS, DETERMINES, AND CONCLUDES that:



4

FINDINGS OF FACT AND CONCLUSIONS OF LAW

A Findings and Conclusions. The findings and conclusions set forth herein and in

the record of the Continued Combined Hearing constitute the Court’s findings of fact and

conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure, as made

applicable herein by Bankruptcy Rules 7052 and 9014. To the extent any of the following

findings of fact constitute conclusions of law, they are adopted as such. To the extent any of the

following conclusions of law constitute findings of fact, they are adopted as such.

B. Jurisdiction, Venue, Core Proceeding (28 U.S.C. §§ 157(b)(2), 1334(a)). The

Court has jurisdiction over the Debtor’s Chapter 11 Case pursuant to 28 U.S.C. § 1334.

Approval of the Disclosure Statement and confirmation of the Plan are core proceedings

pursuant to 28 U.S.C. § 157(b) and this Court has jurisdiction to enter a final order with respect

thereto. The Debtor is eligible to be a debtor under Section 109 of the Bankruptcy Code. Venue

is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409. The Debtor is the plan

proponent in accordance with Section 1121(a) of the Bankruptcy Code.

C. Chapter 11 Petition. On December 5, 2011 (the “Petition Date”), the Debtor

commenced with this Court a voluntary case under chapter 11 of the Bankruptcy Code (the

“Chapter 11 Case”). The Debtor is authorized to continue to operate its business as debtor in

possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or

examiner has been appointed pursuant to Section 1104 of the Bankruptcy Code.

D. Judicial Notice. The Court takes judicial notice of the docket of the Chapter 11

Case maintained by the Clerk of the Court, including all pleadings and other documents filed, all

orders entered, and all evidence and arguments made, proffered, or adduced at the hearings held

before the Court during the pendency of the Chapter 11 Case.



5

E. Disclosure Statement. The Disclosure Statement contains adequate information

within the meaning of Bankruptcy Code Section 1125.

F. Combined Hearing Order Compliance. The Debtor has complied with the

Combined Hearing Order in all respects.

G. Burden of Proof. The Debtor has the burden of proving the elements of

Sections 1129(a) and (b) of the Bankruptcy Code by a preponderance of the evidence. The

Debtor has met such burden.

H. Voting. As evidenced by the Ballot Report, votes to accept or reject the

Plan have been solicited and tabulated fairly, in good faith, and in a manner consistent with the

Bankruptcy Code, the Bankruptcy Rules, and the Local Rules of Bankruptcy Practice and

Procedure of the United States Bankruptcy Court for the Western District of North Carolina (the

“Local Rules”) and applicable nonbankruptcy law.

I. Solicitation. The Plan, the Disclosure Statement, the ballots, and notice of

the Combined Hearing, were transmitted and served in compliance with the Bankruptcy Rules,

including Bankruptcy Rules 3017 and 3018, the Local Rules, and the Combined Hearing Order.

The forms of the ballots adequately addressed the particular needs of this Chapter 11 Case and

were appropriate for holders of Claims in the following Classes (the “Voting Classes”) who are

impaired under the Plan, may receive a distribution under the Plan, and, therefore, had their votes

solicited: Senior Bond Claims (Class 3), Junior Bond Claims (Class 4), Horwith Claim (Class 5),

Convenience Class Claim (Class 6) and Affiliate Service Claims and Affiliate Administrative

Claims (Class 10).

1. The period during which the Debtor solicited acceptances to the

Plan was reasonable in the circumstances of this Chapter 11 Case and enabled holders to



6

make an informed decision to accept or reject the Plan. The Debtor was not required to

solicit votes from the holders of Claims in the following Classes (the “Deemed Accepting

Classes”) as each such Class is unimpaired under the Plan and the Plan and conclusively

presumed to have accepted the Plan: Allowed Priority Claims (Class 1), Secured Tax

Claims (Class 2), Debtor Subsidiary Claims (Class 8) and Interests in Debtor Subsidiaries

(Class 12).

2. The Debtor also were not required to solicit votes from the holders of

Claims in the following Classes as such Classes receive no recovery under the Plan or the

Plan and are deemed to reject the Plan: General Unsecured Claims (Class 7),

Intercompany Claims (Class 9) and Partnership Interests (Class 11). Class 7 would have

been Impaired. However, no such creditors were identified by the Debtor and no Claims

were filed on behalf of such creditor. As a result, voting in Class 7 is moot. In addition,

the Holders of Class 9 Claims are the Debtor and the Debtor Subsidiaries which are Plan

proponents and are deemed to have voted for the Plan.

3. As described in and as evidenced by the Ballot Report and the

Hearing Certificates, the transmittal and service of the Plan, the Disclosure Statement, the

ballots and the notice of the Combined Hearing and Continued Combined Hearing (all of

the foregoing, the “Solicitation”) was timely, adequate, and sufficient under the

circumstances. The Solicitation of votes on the Plan complied with the Solicitation

Procedures, was appropriate and satisfactory based upon the circumstances of the Chapter

11 Case, and was in compliance with the provisions of the Bankruptcy Code, the

Bankruptcy Rules, and the Local Rules, and any other applicable rules, laws, and

regulations. In connection therewith, each Debtor Subsidiary, the Debtor in Possession,



7

the Reorganized Companies, the Northampton Partners, Northampton Holdco, EIF

Calypso, Cogentrix, the Collateral Agent, the Senior Bond Trustee, the Junior Bond

Trustee, the Bondholders, their respective financial advisors, attorneys and accountants

and other professionals, if any, and all past, present and future officers, directors,

managing directors, servants, shareholders, and, to the extent they are natural persons, all

members, managers, partners, employees, agents, representatives and consultants thereof

are entitled to the protection of Section 1125(e) of the Bankruptcy Code.

J. Good Faith. The Debtor, and its respective agents, representatives, attorneys, and

advisors have solicited votes on the Plan in good faith and in compliance with the applicable

provisions of the Code and the Disclosure Statement Order and are entitled to the protections

afforded by section 1125(e) of the Code and the exculpation and limitation of liability provision

set forth in the Plan.

K. Notice. As is evidenced by the Ballot Report and the Hearing Certificates, the

transmittal and service of the Plan, the Disclosure Statement, and the ballots were adequate and

sufficient under the circumstances, and all parties required to be given notice of the Combined

Hearing and Continued Combined Hearing (including the deadline for filing and serving

objections to confirmation of the Plan) have been given due, proper, timely, and adequate notice

in accordance with the Combined Hearing Order and in compliance with the Bankruptcy Code,

the Bankruptcy Rules, the Local Rules, and applicable nonbankruptcy law, and such parties have

had an opportunity to appear and be heard with respect thereto. No other or further notice is

required.

Compliance with the Requirements of Section 1129 of the Bankruptcy Code

L. Plan Compliance with the Bankruptcy Code (11 U.S.C. § 1129(a)(1)). The Plan



8

complies with the applicable provisions of the Bankruptcy Code and, as required by Bankruptcy

Rule 3016, the Plan is dated and identifies the Debtor as a proponent, thereby satisfying Section

1129(a)(1) of the Bankruptcy Code.

1. Proper Classification (11 U.S.C. §§ 1122, 1123(a)(1)). In addition to

Administrative Expense Claims and Priority Tax Claims, which need not be classified,

Article 4 of the Plan classifies twelve Classes of Claims and Interests for the Debtor. The

Claims and Interests placed in each Class are substantially similar to other Claims and

Interests, as the case may be, in each such Class. Valid business, factual, and legal

reasons exist for separately classifying the various Classes of Claims and Interests created

under the Plan, and such Classes do not unfairly discriminate between holders of Claims

and Interests. The Plan therefore satisfies Sections 1122 and 1123(a)(1) of the

Bankruptcy Code.

2. Specified Unimpaired Classes (11 U.S.C. § 1123(a)(2)). Pursuant to

Article 4 of the Plan, the following Classes are identified as unimpaired under the Plan

within the meaning of Section 1124 of the Bankruptcy Code, thereby satisfying Section

1123(a)(2) of the Bankruptcy Code: Allowed Priority Claims (Class 1), Secured Tax

Claims (Class 2), Debtor Subsidiary Claims (Class 8) and Interests in Debtor Subsidiaries

(Class 12).

3. Specified Treatment of Impaired Classes (11 U.S.C. § 1123(a)(3)).

Article 4 of the Plan designates the following Classes as impaired within the meaning of

Section 1124 of the Bankruptcy Code and specifies the treatment of the Claims and

Interests in those Classes, thereby satisfying Section 1123(a)(3) of the Bankruptcy Code:

Senior Bond Claims (Class 3), Junior Bond Claims (Class 4), Horwith Claim (Class 5),



9

Convenience Class Claim (Class 6) and Affiliate Service Claims and Affiliate

Administrative Claims (Class 10).

4. Same Treatment for Each Claim or Interest of Each Particular Class (11

U.S.C. § 1123(a)(4)). The Plan provides for the same treatment by the Debtor and

Debtor Subsidiaries for each Claim or Interest in each respective Class unless the holder

of a particular Claim or Interest has agreed to a less favorable treatment of such Claim or

Interest, thereby satisfying Section 1123(a)(4) of the Bankruptcy Code.

5. Implementation of the Plan (11 U.S.C. § 1123(a)(5)). The Plan provides

adequate and proper means for the implementation of the Plan, thereby satisfying Section

1123(a)(5) of the Bankruptcy Code, including the (i) authorization and issuance of all

plan-related securities and documents, (ii) cancellation of certain securities and certain

agreements of the Debtor and Debtor Subsidiaries, (iii) employment of officers and

directors by the Reorganized Companies, (iv) specification of the obligations of any

successor to the Debtor under the Plan and (v) the engagement in other transactions in

furtherance of the Plan.

6. Non-Voting Equity Securities/Allocation of Voting Power (11 U.S.C.

§ 1123(a)(6)). The Plan does not provide for the issuance of nonvoting equity securities,

therefore Section 1123(a)(6) of the Bankruptcy Code is not applicable.

7. Designation of Directors and Officers (11 U.S.C. § 1123(a)(7)). Article 8

of the Plan contains provisions with respect to the manner of selection of the officers and

directors by the Reorganized Companies that are consistent with the interests of creditors

and equity security holders and public policy in accordance with Section 1123(a)(7).

8 Impairment/Unimpairment of Classes of Claims and Interests (11 U.S.C. §



10

1123(b)(1)). As permitted by Section 1123(b)(1) of the Bankruptcy Code, Article 4 of the

Plan designates all Impaired and Unimpaired Classes, as modified by this Order.

9 Assumption and Rejection (11 U.S.C. § 1123(b)(2)). Article 6 of the Plan

governs the assumption and rejection of executory contracts and unexpired leases, unless

otherwise provided in the Plan, and meets the requirements of Section 365(b) of the

Bankruptcy Code.

10. Additional Plan Provisions (11 U.S.C. § 1123(b)(6)). The Plan's

provisions are appropriate and consistent with the applicable provisions of the Code,

including, without limitation, provisions for (a) distributions to holders of Allowed

Claims, (b) the disposition of executory contracts and unexpired leases, (c) allowance or

disallowance of Claims, (d) exculpation of various persons as set forth in the Plan and (e)

the various injunctions set forth in the Plan.

11. Cure of Defaults (11 U.S.C. § 1123(d)). Article 6 of the Plan provides for

the satisfaction of default claims, if any, associated with each executory contract and

unexpired lease to be assumed pursuant to the Plan in accordance with Section 365(b)(1)

of the Bankruptcy Code, unless specifically treated elsewhere in the Plan. Thus, the Plan

complies with Section 1123(d) of the Bankruptcy Code.

M. The Debtor’s Compliance with the Bankruptcy Code (11 U.S.C. § 1129(a)(2)).

The Debtor and Debtor Subsidiaries have complied with the applicable provisions

of the Bankruptcy Code. Specifically:

1. The Debtor is an eligible debtor under Section 109 of the

Bankruptcy Code;

2. The Debtor and Debtor Subsidiaries have complied with applicable



11

provisions of the Bankruptcy Code, except as otherwise provided or permitted by orders

of the Bankruptcy Court; and

3. The Debtor and Debtor Subsidiaries have complied with the applicable

provisions of the Bankruptcy Code, including Sections 1125 and 1126(b), the Bankruptcy

Rules, the Local Rules, applicable nonbankruptcy law, the Combined Hearing Order, and

all other applicable law, in transmitting the Plan, the Disclosure Statement, the ballots,

and related documents and notices and in soliciting and tabulating the votes on the Plan.

N. Plan Proposed in Good Faith (11 U.S.C. § 1129(a)(3)). The Plan (including all

documents necessary to effectuate the Plan) has been proposed in good faith and not by any

means forbidden by law, thereby satisfying Section 1129(a)(3) of the Bankruptcy Code. Such

good faith is evident from the facts and record of the Chapter 11 Case, the Disclosure Statement,

the Houlihan Declaration, and the record of the Continued Combined Hearing and other

proceedings held in the Chapter 11 Case. The Plan, which was developed after many months of

analysis and negotiations involving numerous parties, was proposed with the legitimate and

honest purpose of effectuating a successful reorganization of the Debtor and the Debtor

Subsidiaries. The Plan (including all documents necessary to effectuate the Plan) was developed

and negotiated in good faith and at arms’-length among representatives of the Debtor and Debtor

Subsidiaries, the Bondholders, the Collateral Agent, the Applicable Trustee, Horwith, the

Consenting Holders, the Reinvesting Beneficial Owner and the Partners. Further, the Plan’s

classification, indemnification, exculpation, release, and injunction provisions have been

negotiated in good faith and at arms’- length, are consistent with Sections 105, 1122, 1123(b)(6),

1123(b)(3)(A), 1129, and 1142 of the Bankruptcy Code and applicable case law in the Fourth

Circuit, and are each necessary for the Debtor’s successful reorganization.



12

O. Payment for Services or Costs and Expenses (11 U.S.C. § 1129(a)(4)). Any

payment made or to be made by the Debtor and Debtor Subsidiaries for services or for costs and

expenses of the Debtor’s and Debtor Subsidiaries’ professionals in connection with the Chapter

11 Case, or in connection with the Plan and incident to the Chapter 11 Case, have been approved

by this Court as reasonable, or are subject to the approval of, the Court as reasonable, and all

adequate protection payments made or to be made pursuant to the cash collateral orders have

been approved by this Court as part of the cash collateral orders, thereby satisfying Section


P. Directors, Officers, and Insiders (11 U.S.C. § 1129(a)(5)). The Debtor and

Debtor Subsidiaries have complied with Section 1129(a)(5) of the Bankruptcy Code (the identity

and affiliations of the individuals who will be employed as officers and directors of the

Reorganized Companies after confirmation of the Plan have been fully disclosed in Section 8.9

of the Plan and the appointment of such individuals is consistent with the interests of holders of

Claims against and Interests in the Reorganized Companies and with public policy).

Q. Governmental Approvals (11 U.S.C. § 1129(a)(6)). During the Chapter 11 Case,

the Debtor obtained the regulatory authority necessary to become a merchant plant. As a result,

no rate change requiring governmental approval will be required for confirmation. Thus, Section

1129(a)(6) of the Bankruptcy Code is not applicable.

R. Best Interest of Creditors (11 U.S.C. § 1129(a)(7)). The Plan satisfies Section

1129(a)(7) of the Bankruptcy Code. The liquidation analysis provided in the Disclosure

Statement, and the other evidence proffered or adduced at the Continued Combined Hearing (i)

are persuasive and credible, (ii) have not been controverted by other evidence, and (iii) establish

that each holder of an Impaired Claim or Interest either has accepted the Plan or will receive or



13

retain 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 that such holder would receive or retain if the Debtor and

Debtor Subsidiaries were liquidated under chapter 7 of the Bankruptcy Code on such date.

S. Acceptance by Certain Classes (11 U.S.C. § 1129(a)(8)). The Deemed Rejecting

Classes are Impaired by the Plan and are not entitled to receive or retain any property under the

Plan and, therefore, are deemed to have rejected the Plan pursuant to Section 1126(g) of the

Bankruptcy Code. As found and determined in paragraph BB below, pursuant to Section

1129(b)(1) of the Bankruptcy Code, the Plan may be confirmed notwithstanding the fact that the

Deemed Rejecting Classes are impaired and are deemed to have rejected the Plan. The

remaining Classes accepted the Plan or are Deemed Accepting Classes.

T. Treatment of Administrative Expense Claims and Priority Tax Claims and Other

Priority Claims (11 U.S.C. § 1129(a)(9)). The treatment of Allowed Administrative Expense

Claims under Article 3 of the Plan satisfies the requirements of Section 1129(a)(9)(A) of the

Bankruptcy Code. The treatment of Other Priority Claims pursuant to Section 4.1 of the Plan

satisfies the requirements of Section 1129(a)(9)(B) of the Bankruptcy Code. The treatment of

Secured Tax Claims pursuant to Section 4.2 of the Plan satisfies the requirements of Section

1129(a)(9)(C) of the Bankruptcy Code.

U. Acceptance by Impaired Class (11 U.S.C. § 1129(a)(10)). Holders of Claims in

all of the Voting Classes voted to accept the Plan, determined without including any acceptance

of the Plan by any insider, thereby satisfying the requirements of Section 1129(a)(10) of the

Bankruptcy Code.

V. Feasibility (11 U.S.C. § 1129(a)(11)). The Houlihan Declaration, the Plan

Supplements and the other evidence proffered or adduced at the Continued Combined Hearing



14

(i) are persuasive and credible, (ii) have not been controverted by other evidence, and (iii)

establish that the Plan is feasible and is not likely to be followed by a liquidation or further

financial reorganization of the Debtor and the Debtor Subsidiaries, thereby satisfying the

requirements of Section 1129(a)(11) of the Bankruptcy Code.

W. Payment of Fees (11 U.S.C. § 1129(a)(12)). The Plan provides that on the

Effective Date, and thereafter as may be required, the Reorganized Companies shall pay all fees

payable pursuant to Section 1930 of title 28 of the United States Code, thereby satisfying Section


X. Continuation of Retiree Benefits (11 U.S.C. § 1129(a)(13). The Debtor and

Debtor Subsidiaries do not maintain retirement plans or other benefits obligations as they have

no employees. Accordingly, Section 1129(a)(13) of the Bankruptcy Code is not applicable to the

Plan.

Y. No Domestic Support Obligations (11 U.S.C. § 1129(a)(14)). The Debtor and

Debtor Subsidiaries are not required by a judicial or administrative order, or by statute, to pay a

domestic support obligation. Accordingly, Section 1129(a)(14) of the Bankruptcy Code is

inapplicable to the Chapter 11 Case.

Z. Debtor and Debtor Subsidiaries Are Not Individuals (11 U.S.C. § 1129(a)(15)).

The Debtor and Debtor Subsidiaries are not individuals, and accordingly, Section 1129(a)(15) of

the Bankruptcy Code is inapplicable to the Chapter 11 Case.

AA. No Applicable Nonbankruptcy Law Regarding Transfers (11 U.S.C. §

1129(a)(16)). Debtor and Debtor Subsidiaries are each a moneyed, business, or commercial

corporation, and accordingly, Section 1129(a)(16) of the Bankruptcy Code is inapplicable to its

Chapter 11 Case.



15

BB. Fair and Equitable; No Unfair Discrimination (11 U.S.C. § 1129(b)). Holders of

Claims in the Deemed Rejecting Classes are deemed to have rejected the Plan. Based upon the

evidence proffered, adduced, and presented by the Debtor and Debtor Subsidiaries in the

Declaration and at the Continued Combined Hearing, the Plan does not discriminate unfairly and

is fair and equitable with respect to the aforementioned Classes, as required by Sections

1129(b)(1) and (b)(2) of the Bankruptcy Code. Thus, the Plan may be confirmed

notwithstanding the rejection of the Plan by the Deemed Rejecting Classes.

CC. Only One Plan (11 U.S.C. § 1129(c)). The Plan is the only plan filed in these

cases and accordingly, Section 1129(c) of the Bankruptcy Code is inapplicable in the Chapter 11

Case.

DD. Principal Purpose of the Plan (11 U.S.C. § 1129(d)). 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, and no governmental entity has objected to the confirmation of the Plan on any

such grounds. Therefore, the Plan satisfies the requirements of Section 1129(d) of the

Bankruptcy Code.

EE. Modifications to the Plan. The modifications to the Plan pursuant to all Plan

Supplements filed by the Debtor through the date hereof constitute changes that do not materially

and adversely change the treatment of any other Claims or Interests. Although the modifications

made to the Debtor’s Plan that are reflected in the Plan and certain Plan Supplements change the

treatment to Classes 2, 3, 5 and 10 such modifications are an improvement to, and do not

adversely change, such treatment. Each of these creditors has voted to approve the Plan.

Accordingly, pursuant to Bankruptcy Rule 3019(a), these modifications do not require additional

disclosure under Section 1125 of the Bankruptcy Code, nor do they require additional solicitation



16

of the Plan.

FF. Good Faith Solicitation (11 U.S.C. § 1125(e)). Based on the record before the

Court, the Declaration and the record of the Chapter 11 Case, each Debtor Subsidiary, the

Debtor in Possession, the Reorganized Companies, the Northampton Partners, Northampton

Holdco, EIF Calypso, Cogentrix, the Collateral Agent, the Senior Bond Trustee, the Junior Bond

Trustee, the Bondholders, their respective financial advisors, attorneys and accountants and other

professionals, if any, and all past, present and future officers, directors, managing directors,

servants, shareholders, and, to the extent they are natural persons, all members, managers,

partners, employees, agents, representatives and consultants thereof have acted in “good faith”

within the meaning of Section 1125(e) of the Bankruptcy Code in compliance with the

applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules and any

applicable non-bankruptcy law, rule, or regulation governing the adequacy of disclosure in

connection with all their respective activities relating to the solicitation of acceptances to the

Plan and their participation in the activities described in Section 1125 of the Bankruptcy Code

and (ii) shall be deemed to have participated in good faith and in compliance with the applicable

provisions of the Bankruptcy Code in the offer and issuance of any securities under the Plan,

and therefore are not, and on account of such offer, issuance and solicitation will not be, liable

at any time for the violation of any applicable law, rule, or regulation governing the solicitation

of acceptances or rejections of the Plan or the offer and issuance of the securities under the

Plan, and are entitled to the protections afforded by Section 1125(e) of the Bankruptcy Code

and, to the extent such parties are listed therein, the release, exculpation and related Plan

provisions set forth in Sections 8.2, 8.3, 8.4 and 8.6 of the Plan.

GG. Implementation. All documents necessary to implement the Plan, including the



17

Amended Bond Documents, those contained in the Plan Supplements, and all other relevant

and necessary documents have been developed and negotiated in good faith and at arms’-

length and shall, upon completion of documentation and execution, and subject to the

occurrence of the Effective Date, be valid, binding, and enforceable agreements and not be in

conflict with any federal or state law. Between the Confirmation Hearing and the Effective

Date, the parties may modify and amend the Plan Documents and Amended Bond Documents.

However, final versions of the Plan Documents and Amended Bond Documents will be posted

prior to the Effective Date. Any such modifications shall be consistent with the intent of the

Plan as proposed and shall be effective only if consented to by the parties affected thereby.

Nothing in this Section GG shall affect, modify or impair rights of the Debtor, Debtor

Subsidiaries, Collateral Agent or Reinvesting Beneficial Owner under Article 11 of the Plan.

HH. Releases. The Court has jurisdiction under Sections 1334(a) and (b) of title 28

of the United States Code to approve the releases, exculpation and related Plan terms set forth

in Article 10 and elsewhere in the Plan and Confirmation Order. Section 105(a) of the

Bankruptcy Code permits approval of the releases, exculpation and related Plan terms set forth

in Article 10 and elsewhere in the Plan and Confirmation Order, because, as has been

established here based upon the record in the Chapter 11 Case and the evidence presented in

the Declaration and at the Continued Combined Hearing, such provisions (i) were integral to

the agreement among the various parties in interest and are essential to the formulation and

implementation of the Plan, as provided in Section 1123 of the Bankruptcy Code, (ii) confer

substantial benefits on the Debtor’s and Debtor Subsidiaries’ Estates, (iii) are fair, equitable,

and reasonable, and (iv) are in the best interests of the Debtor, Debtor Subsidiaries, their

Estates, and parties in interest.



18

Pursuant to Section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019(a),

the releases, exculpation and related Plan terms set forth in the Plan and implemented by this

Confirmation Order are fair, equitable, reasonable, and in the best interests of the Debtor and

Debtor Subsidiaries, and their Estates, Creditors, and equity holders. The releases and

exculpation of non-Debtors under the Plan are fair to holders of Claims and are necessary to the

proposed reorganization. Such releases, exculpation and related Plan terms are given in

exchange for and are supported by fair, sufficient, and adequate consideration provided by each

and all of the parties providing such releases. The Houlihan Declaration and the record of the

Continued Combined Hearing and this Chapter 11 Case are sufficient to support the releases,

exculpation and related Plan terms provided for in Article 10 of the Plan. Accordingly, based

upon the record of the Chapter 11 Case, the representations of the parties, and/or the evidence

proffered, adduced, and/or presented in the Declaration and at the Continued Combined

Hearing, this Court finds that the releases, exculpation and related Plan terms set forth in Article

10 of the Plan are consistent with the Bankruptcy Code and applicable law. The failure to

implement the release provisions of the Plan would seriously impair the Debtor’s ability to

confirm the Plan.

JJ. Conclusion. Based on the foregoing, the Plan satisfies the requirements for

confirmation set forth in Section 1129 of the Bankruptcy Code.

ORDER

NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREEDTHAT:

1. Findings of Fact and Conclusions of Law. The above-referenced findings of fact

and conclusions of law are hereby incorporated by reference as though fully set forth herein.



19

2. Notice of the Combined Hearing and Continued Hearing. Notice of the

Combined Hearing and Continued Hearing complied with the terms of the Combined Hearing

Order, was appropriate and satisfactory based upon the circumstances of the Chapter 11 Case,

and was in compliance with the provisions of the Bankruptcy Code, the Bankruptcy Rules, and

the Local Rules.

3. Disclosure Statement. The Disclosure Statement is approved as containing

adequate information within the meaning of Section 1125 of the Bankruptcy Code, and any

objections to the adequacy of the information contained in the Disclosure Statement not

otherwise consensually resolved are overruled.

4. Confirmation. The Plan, as amended or modified, including all exhibits and

attachments to the Plan and the Plan Supplements filed by the Debtor is approved and the Plan is

hereby confirmed under section 1129 of the Bankruptcy Code. The Plan, including all terms, all

exhibits and attachments to the Plan and the Plan Supplements, as amended or modified, are

incorporated by reference into and are an integral part of this Confirmation Order. The failure to

include or specifically reference any particular provision of the Plan in this Confirmation Order

shall not diminish or impair the effectiveness of such provision.

5. Amendments to Plan. The modifications and amendments to the Plan through the

date hereof, including modifications made pursuant to this Confirmation Order, meet the

requirements of Sections 1127(a) and (c) of the Bankruptcy Code. Such modifications do not

materially and adversely affect the treatment of the Claim of any Creditor or Interest holder

within the meaning of Bankruptcy Rule 3019(a) and no further solicitation or voting is required.

6. Severability. Each term and provision of the Plan is valid and enforceable

pursuant to its terms.



20

7. Objections Resolved or Overruled. Except as provided herein, all objections,

responses, statements and comments, if any, in opposition to the Plan, other than those

withdrawn with prejudice, waived, or settled by the terms of this Order, or prior to, or on the

record at, the Continued Hearing, shall be, and hereby are, overruled in their entirety. With

respect to the Response, all parties reserve rights with respect to modifications to implementing

documents as specifically set forth in Section 53 herein. As such, the requests in the Response

have been satisfied.

8. Solicitation. The solicitation of votes on the Plan complied with the solicitation

procedures set forth in the Combined Hearing Order, was appropriate and satisfactory based

upon the circumstances of the Chapter 11 Case, and was in compliance with the provisions of the

Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and applicable nonbankruptcy law.

9. Ballots. The forms of ballots are in compliance with Bankruptcy Rule 3018(c), as

modified, conform to Official Form Number 14, and are approved in all respects.

10. Considerations Regarding Voting Amounts and Classifications. The classification

and allowance of Claims and Interests for purposes of the distributions to be made under the Plan

shall be governed solely by the terms of the Plan. The classifications and amounts of Claims set

forth on the ballots for voting purposes do not constitute an allowance of any Claim for purposes

of distribution under the Plan. Except with respect to Claims that are expressly Allowed under

the Plan or herein, the Debtor retains all rights to contest the amount, classification or validity of

any Claim for purposes of allowance and/or distribution under the Plan, as provided in the Plan

and this Confirmation Order.

11. Effects of Confirmation; Immediate Effectiveness; Successors and Assigns. The

Court authorizes the Debtor and Debtor Subsidiaries to consummate the Plan after entry of this



21

Confirmation Order. Subject to the occurrence of the Effective Date as provided in Article 11 of

the Plan, and notwithstanding any otherwise applicable law, immediately upon the entry of this

Confirmation Order, the terms of the Plan, as amended or modified (including all exhibits and

attachments thereto, and all documents and agreements executed pursuant to the Plan) and this

Confirmation Order shall be binding on (a) the Debtor, Debtor Subsidiaries and Reorganized

Companies (b) all holders of Claims against and Interests in the Debtor, whether or not Impaired

under the Plan and whether or not, if Impaired, such holders accepted the Plan, (c) each Person

acquiring property or an Interest under the Plan, (d) any other party-in-interest, (e) any Person

making an appearance in this Chapter 11 Case, (f) any Person receiving notice of this Chapter 11

Case or the Plan, and (g) each of the foregoing's respective heirs, successors, assigns, trustees,

executors, administrators, affiliates, officers, directors, agents, representatives, attorneys,

beneficiaries, or guardians. Upon the making of the distributions to be made on the Effective

Date or soon thereafter, the Plan shall be deemed substantially consummated under sections 1101

and 1127(b) of the Code.

12. Substantive Consolidation. The substantive consolidation provisions of the Plan,

including, without limitation, Article 2 of the Plan, are approved. As set forth in the Plan, the

Debtor and Debtor Subsidiaries are deemed consolidated for Plan purposes only, and on and

after the Effective Date, each of the Reorganized Companies shall remain a separate entity and

shall retain all assets that revest in such Entity in accordance with the Plan.

13. General Authorizations. The Plan was approved by the Board of Control of

Debtor, the Board of Control of the Debtor Subsidiaries, the Board of Directors of the general

partner, CGX/Northampton, LLC and the Board of Directors of Northampton Holdco. Pursuant

to the appropriate provisions of the corporate or business organizations law of the applicable



22

state of organization of the Debtor and each Debtor Subsidiary, and Section 1142(b) of the

Bankruptcy Code, no additional action of the respective directors, partners or equity holders of

the Debtor or Debtor Subsidiaries shall be required to authorize the Debtor and Debtor

Subsidiaries to enter into, execute, deliver, file, adopt, amend, restate, consummate, or effectuate,

as the case may be, the Plan and any contract, instrument, or other document to be executed,

delivered, adopted or amended in connection with the implementation of the Plan.

14. Additional Documents. The Debtor and each Debtor Subsidiary has the authority

to take any and all actions and execute (and perform) any agreements and documents as it deems

necessary or appropriate in its reasonable discretion to effectuate and further evidence the terms

and conditions of the Plan.

15. Treatment of Certain Funds. On the Effective Date, the Reorganized Debtor shall

set aside a reserve to pay for (i) the estimated Fee Claims, which shall be paid when approved by

the Court, (ii) the estimated costs and expenses of preparation of the final tax return of

Northampton Holdco (on behalf of the Debtor and the Debtor Subsidiaries), and (iii) the

estimated costs and expenses of winding up any defunct corporate entities related to the Debtor.

16. Vesting of Assets. As of the Effective Date, pursuant to Section 1141(b) of the

Bankruptcy Code, all Assets of the Debtor, each Debtor Subsidiary and the Estate shall vest in

the Reorganized Companies free and clear of any and all Claims, Liens, Interests, and other

interests, charges and encumbrances, except as otherwise expressly provided in the Plan or in the

Confirmation Order. From and after the Effective Date, the Reorganized Companies may

operate their businesses and may own, use, acquire and dispose of Assets free of any restrictions

of the Bankruptcy Code or the Bankruptcy Rules and in all respects as if the Chapter 11 Case had

never been filed. Effective upon the occurrence of the Effective Date, the Debtor waives any



23

Avoidance Claims for affirmative recoveries, provided, however, the Debtor reserves all such

Avoidance Claims for defensive purposes and may assert Avoidance Claims as defenses or

setoffs against other Claims filed against the Debtor.

17. Causes of Action and Avoidance Actions. Except as expressly provided for in the

Plan, any and all Causes of Action of any kind or nature whatsoever against parties arising

before the Effective Date, whether known or unknown, asserted or unasserted, matured or

unmatured and regardless of whether the existence of same has been disclosed, shall survive the

Effective Date of the Plan and shall be preserved for the benefit of the Debtor, the Debtor

Subsidiaries and their Creditors, and shall be enforceable by the parties set forth in the Plan in

the name of the Debtor, the Debtor Subsidiaries or otherwise. All Causes of Action are reserved

and preserved to the extent set forth in the Plan, including, without limitation, this Confirmation

Order and Section 10.12 of the Plan. Confirmation of the Plan shall not be deemed res judicata

or waiver or the basis for estoppel or create any defense as to the prosecution to judgment on the

merits of any and all claims of the Debtor, Causes of Action by the Debtor, whether an action to

prosecute such claims of the Debtor or Debtor Subsidiaries or Causes of Action are filed prior to

or after confirmation of the Plan. Notwithstanding any provision of the Plan or this Order, upon

entry of this Confirmation Order and the occurrence of the Effective Date, the Debtor (i) shall

not pursue Avoidance Claims that may or may not exist and (ii) shall not use the possible

existence of an Avoidance Claim to object to any Claim. Nothing shall prevent the Debtor, the

Debtor Subsidiaries or any other party in interest from pursuing all other objections to Claims or

from asserting any facts or claims, relating in any manner to any Avoidance Claim as a defense,

affirmative defense or counterclaim to any Cause of Action that may be commenced against or in

reference to the Debtor, the Debtor Subsidiaries or the Reorganized Companies.



24

Except as otherwise specifically provided in the Plan or this Confirmation Order, and

pursuant to Section 1123(b) of the Bankruptcy Code, the Reorganized Companies shall retain all

rights and are authorized to commence and pursue, as the Reorganized Companies deem

appropriate, any and all claims and Causes of Action, whether arising before or after the Petition

Date, in any court or other tribunal including, without limitation, in an adversary proceeding

filed in the Chapter 11 Case, and including but not limited to, the claims and Causes of Action

specified in the Plan or any Plan exhibit. Notwithstanding the foregoing, the Reorganized

Companies shall not pursue any claims or Causes of Action against Released Parties. Due to the

size and scope of the business operations of the Debtor and each Debtor Subsidiary and the

multitude of business transactions therein, there may be numerous other claims and Causes of

Action that currently exist or may subsequently arise, in addition to the claims and Causes of

Action identified in the Plan Supplements, all of which other claims and Causes of Action shall

revest in the Reorganized Companies. Pursuant to the Plan and this Confirmation Order, the

Reorganized Companies retain all rights to pursue any and all claims and Causes of Action to the

extent the Reorganized Companies deem appropriate (under any theory of law or equity,

including, without limitation, the Bankruptcy Code and any applicable local, state, or federal

law, in any court or other tribunal, including, without limitation, in an adversary proceeding filed

in the Chapter 11 Case) except as otherwise specifically provided in the Plan or this

Confirmation Order.

18. Preservation of All Causes of Action Not Expressly Settled or Released. For the

avoidance of doubt, and without limiting or restricting any other provisions of the Plan, including

but not limited to Section 10.1 “Vesting of Assets and Retained Causes of Action,” unless a

claim or Cause of Action against a Creditor or other Entity is expressly and specifically waived,



25

relinquished, released, compromised or settled in the Plan or any Final Order, the Reorganized

Companies expressly reserve such claim or Cause of Action for adjudication or pursuit by the

Reorganized Companies after the Effective Date, and, therefore, no preclusion doctrine,

including, without limitation, the doctrines of res judicata, collateral estoppel, issue preclusion,

claim preclusion, waiver, estoppel (judicial, equitable or otherwise) or laches shall apply to such

claims or Causes of Action upon or after the Confirmation Date or Effective Date of the Plan

based on the Disclosure Statement, the Plan, this Confirmation Order or otherwise. The

Reorganized Companies expressly reserve the right to pursue or adopt any claims (and any

defenses) or Causes of Action of the Debtor, each Debtor Subsidiary or the Debtor in Possession,

as trustee for or on behalf of the Creditors, not specifically and expressly waived, relinquished,

released, compromised or settled in the Plan or any Final Order against any Entity, including,

without limitation, the plaintiffs or codefendants in any lawsuits. The Reorganized Companies

shall be the representatives of the Estate appointed for the purposes of pursuing any and all such

claims and Causes of Action (including but not limited to those set forth the Plan Supplements)

under Section 1123(b)(3)(B) of the Bankruptcy Code.

Any Entity to whom the Debtor or a Debtor Subsidiary has incurred an obligation

(whether on account of services, purchase or sale of goods, tort, breach of contract or otherwise),

or who has received services from the Debtor or a Debtor Subsidiary or a transfer of money or

property of the Debtor or a Debtor Subsidiary, or who has transacted business with the Debtor or

a Debtor Subsidiary, or leased equipment or property from the Debtor or a Debtor Subsidiary,

should assume that such obligation, transfer, or transaction may be reviewed by the Reorganized

Companies subsequent to the Effective Date and may, to the extent not theretofore specifically

waived, relinquished, released, compromised or settled in the Plan or any Final Order, be the



26

subject of an action or claim or demand after the Effective Date, whether or not (a) such Entity

has filed a proof of claim against the Debtor in the Chapter 11 Case, (b) such Entity’s proof of

claim has been objected to, (c) such Entity’s Claim was included in the Debtor’s Schedules, or

(d) such Entity’s scheduled Claim has been objected to by the Debtor or has been identified by

the Debtor as disputed, contingent, or unliquidated.

19. Implementation of the Plan. The Debtor, Debtor Subsidiaries or Reorganized

Companies, as applicable, shall be authorized to execute, deliver, file, or record such documents,

contracts, instruments, releases, and other agreements, including those contained in the Plan

Supplements, and take such other actions as may be necessary to effectuate, implement, and

further evidence the terms and conditions of the Plan, including all such actions delineated in

Article 8 and Section 11.1 of the Plan. As of the Effective Date, the Reorganized Companies are

authorized and empowered to issue, execute, file, and deliver or record such documents,

contracts, instruments, releases and other agreements, including those contained in the Plan

Supplements or contemplated by the Plan.

20. Solicitation/Offer of Securities. The Plan contemplates that the Successor Bond

Issuer will issue the Amended Bonds. The Plan further contemplates that the Reorganized

Debtor will issue Limited Partnership Interests to the Limited Partnership Interests Holder and

General Partnership Interests to the General Partnership Interest Holder. Such issuances by the

Successor Bond Issuer and the Reorganized Debtor are exempt from the registration

requirements of the Securities Act of 1933 (as now in effect or hereafter amended) pursuant to

Section 3(a)(2) thereof and are exempt from qualification under the state securities or “blue sky”

laws of every state. Section 3(a)(2) exempts from registration under the Securities Act “any



27

security issued . . . by any State of the United States . . . or by any public instrumentality of one

or more States or territories. . .” 15 U.S.C. § 77(c).

21. Cancellation of Existing Securities and Agreements. Except (i) for purposes of

evidencing a right to distributions under the Plan, (ii) with respect to executory contracts or

unexpired leases that have been assumed by the Debtor or Debtor Subsidiaries, or (iii) as

otherwise provided under the Plan, on the Effective Date, all the agreements and other

documents evidencing the Claims or rights of any holder of a Claim against the Debtor or Debtor

Subsidiaries, all lending and security agreements and encumbrances evidencing such Claims

shall be cancelled with respect to the Debtor and Debtor Subsidiaries, but shall continue to

govern the rights and obligations by and among third parties.

At the option of the Reorganized Companies, as a condition to receiving any distribution

under the Plan, each holder of an Allowed Claim evidenced by a certificated instrument must,

except as otherwise provided in the Plan including, without limitation, provisions of Sections 4.4

and 4.3 herein, either (a) surrender such instrument to the Reorganized Companies, or (b) submit

evidence satisfactory to the Reorganized Companies of the loss, theft, mutilation, or destruction of

such instrument. If any holder of an Allowed Claim fails to do either (a) or (b) before the one year

anniversary of the Effective Date, such holder shall be deemed to have forfeited its Claim and all

rights appurtenant thereto, including the right to receive any distributions hereunder. After the first

anniversary of the Effective Date, all payments not distributed pursuant to this Section 7.8 shall be

deemed unclaimed property pursuant to Section 347(b) of the Bankruptcy Code and shall become

vested in the Reorganized Companies. For the avoidance of doubt, the Collateral Agent and

Applicable Trustees shall cooperate with the Reorganized Debtor, Debtor Subsidiaries and

Successor Collateral Agent in preparation by the Reorganized Debtor and Debtor Subsidiaries of (i)



28

documentation to evidence the release of liens securing the Junior Bonds and Junior Loan

Agreement and (ii) the release any liens securing the guaranty of the Junior Bonds and Junior Loan

Agreement by a Debtor Subsidiary; provided, however, that the Reorganized Debtor shall reimburse

the Collateral Agent and Applicable Trustees for reasonable costs associated with such activity.

Notwithstanding the foregoing, on the Effective Date, the Junior Bonds, the Junior Bond Indenture

and the Junior Bond Loan Agreement shall be deemed extinguished, cancelled and discharged and

all security interests granted for the benefit of the Junior Bondholders pursuant to the Junior Bond

Loan Agreement or otherwise against any of the Reorganized Companies shall be deemed

cancelled. The Junior Bond Indenture shall continue in effect solely for the purposes of: (1)

allowing Bondholders of the Junior Bonds to receive distributions under this Plan; and (2) allowing

and preserving the rights of the Junior Bond Trustee (a) to make distributions in satisfaction of the

Allowed Class 4 Claims, and (b) to be reimbursed for its reasonable fees and expenses, including

through the exercise of rights against any reserved funds. Upon completion of all such distributions,

the Junior Bond Indenture shall terminate completely. From and after the Effective Date, the Junior

Bond Trustee shall have no duties or obligations under the Junior Bond Indenture other than to

make distributions. Promptly following the Effective Date, the Junior Bond Trustee may require

that the Junior Bonds shall be surrendered to the Junior Bond Trustee in accordance with the terms

of the Junior Bond Indenture and related documents. All surrendered and cancelled Junior Bonds

held by the Junior Bond Trustee shall be disposed of in accordance with the applicable terms and

conditions of the Junior Bond Indenture and related documents

22. Exchange of Senior Bonds and Cancellation of Junior Bonds, Issuance of

Amended Bonds and Execution of Amended Bond Documents. On the Effective Date, each

Bondholder that is a holder of Senior Bonds as of the Distribution Record Date shall be deemed



29

to surrender and exchange its Senior Bonds for Amended Bonds pro rata, subject to rounding

based on the minimum denomination of the Amended Bonds as set forth in the Plan

Supplements. Upon the Effective Date, the Senior Bonds and the Senior Bond Loan Agreement

shall be amended as reflected in the Amended Bonds and the Amended Bond Loan Agreement.

The Debtor shall grant to the Successor Collateral Agent pursuant to the Amended Bond

Documents a continuing first priority security interest in all its assets, including, without

limitation, a continuing first priority security interest on assets previously encumbered in favor of

or pledged to the Collateral Agent pursuant to the Senior Bond Loan Agreement. The Debtor

Subsidiaries shall guarantee the obligations of the Amended Bonds and pledge interests and

provide security in all assets, including, without limitation, continuing security interests in the

same manner and form as existed prior to the Petition Date. All security interests in favor of or

pledged to the Collateral Agent or Senior Bond Trustee pursuant to the Senior Bond Loan

Agreement, guarantees thereof or any other prepetition document evidencing or securing the

Senior Bonds or Senior Bond Loan Agreement shall, without further action, secure the

obligations of the Amended Bonds and Amended Bond Loan Agreement. The Reorganized

Companies, the Successor Bond Issuer, the Successor Bond Trustee and the Successor Collateral

Agent shall execute and deliver the Amended Bond Documents and such other transaction

documents as are necessary in the judgment of the Debtor and Debtor Subsidiaries. This

Confirmation Order shall constitute approval of all such documents without any further action or

formality. The Amended Bond Documents and other documents executed by the Reorganized

Companies, the Successor Bond Issuer, the Successor Bond Trustee and the Successor Collateral

Agent shall, from and after the Effective Date, be binding and enforceable against the

Reorganized Companies (and any successors thereto).



30

On the Effective Date, each Bondholder that is a holder of Junior Bonds as of the

Distribution Record Date will receive its pro rata share (after payment or reserve for the

expenses and costs, including reasonable professional fees, of the Junior Bond Trustee) of all

reserve funds held for their benefit by the Junior Bond Trustee in full satisfaction of their liens

and obligations, including, without limitation, any guaranteed obligations of a Debtor Subsidiary.

On the Effective Date, the Junior Bonds and the Junior Bond Loan Agreement shall be cancelled

and all security interests granted for the benefit of the Junior Bondholders pursuant to the Junior

Bond Loan Agreement or otherwise against any of the Reorganized Companies shall be

promptly cancelled by the Collateral Agent or Junior Bond Trustee, as applicable.

23. Subordination. Except as otherwise expressly provided in the Plan, this

Confirmation Order, or a separate order of this Court, the classification and manner of satisfying

all Claims and Interests under the Plan takes into consideration all subordination rights, whether

arising by contract or under general principles of equitable subordination, Section 510 of the

Bankruptcy Code, or otherwise.

24. Compromise of Controversies. In consideration for the distributions and other

benefits, including releases, provided under the Plan, the provisions of the Plan constitute a good

faith compromise and settlement of all Claims and controversies resolved under the Plan.

Consideration for all such compromises, settlements and releases is adequate and the entry of

this Confirmation Order constitutes approval of such compromise and settlement under

Bankruptcy Rule 9019, subject to the provisions of the Plan.

25. Assumption or Rejection of Executory Contracts and Unexpired Leases. Except

for the Horwith Lease (as discussed in paragraph 27) and the MSA, the O&M Agreement and the

Northampton Fuel Management Agreement (as discussed in paragraph 29), pursuant



31

to Article 6 of the Plan, except as otherwise provided in the Plan, or in any contract, instrument,

release, indenture or other agreement or document entered into in connection with the Plan, each

executory contract or unexpired lease of the Debtor and each Debtor Subsidiary that has not

expired by its own terms before the Effective Date or previously been assumed by the Debtor in

Possession pursuant to an order of the Bankruptcy Court, shall be assumed as of the Effective

Date pursuant to Sections 365 and 1123 of the Bankruptcy Code, except for any executory

contract or unexpired lease (i) that is listed on a “Schedule of Executory Contracts and

Unexpired Leases to be Rejected” (Filed as part of the Plan Supplements), (ii) that has been

previously rejected by the Debtor in Possession pursuant to an order of the Court, (iii) as to

which a motion for rejection of such executory contract or unexpired lease is Filed prior to the

Effective Date, or (iv) added to the “Schedule of Executory Contracts and Unexpired Leases to

be Rejected” prior to the Effective Date.

The Debtor and each Debtor Subsidiary shall have the right at any time before the

Effective Date to amend the “Schedule of Executory Contracts and Unexpired Leases to be

Rejected” to: (a) delete any executory contract or unexpired lease listed on the “Schedule of

Executory Contracts and Unexpired Leases to be Rejected”, thus providing for its assumption

under the Plan, or (b) add any executory contract or unexpired lease to the “Schedule of

Executory Contracts and Unexpired Leases to be Rejected”, thus providing for its rejection under

the Plan. The Debtor and each Debtor Subsidiary shall provide notice of any such amendment of

the “Schedule of Executory Contracts and Unexpired Leases to be Rejected” to the party to the

affected executory contract and unexpired lease, to the Collateral Agent and its counsel, and to

the Bankruptcy Administrator.



32

26. Cure Amounts. Unless otherwise noted Article 6 of the Plan, the Cure Payment

pursuant to section 365(b)(1) of the Bankruptcy Code for each assumed executory contract or

unexpired lease is $0.00.

27. Assumption of Horwith Lease. Debtor shall assume the Horwith Lease on or

before the Effective Date. As of the Effective Date, there shall be no defaults of the Debtor other

than those that are to be cured pursuant to Section 4.5.2 of the Plan. The Reorganized Debtor

shall pay (i) 50 percent of the Horwith Arrearage in full, in Cash, on the Effective Date, (ii) the

balance shall be paid in 36 monthly installments as an increase in rentals due under the Horwith

Lease commencing on the first day of the first month following the Effective Date, and (iii) the

Horwith Consent shall be amended to, inter alia, provide for a moratorium on subordination for

a period of three years from the Effective Date and shall be for the benefit of the Successor Bond

Trustee and the Successor Collateral Agent on behalf of the Amended Bonds.

28. Rejection Damages Claims. If the rejection of any Executory Contract or

Unexpired Lease under the Plan gives rise to a Claim, such Claim arising from such rejection

shall be forever barred and shall not be enforceable against the Debtor or Reorganized Debtor,

the Estates or its Assets, their successors or properties, unless a proof of such Claim is filed and

served on the Debtors and the Claims Agent within 30 days after the Effective Date, or with

respect to any executory contracts or unexpired leases which are rejected after the Effective Date

by amendment to the “Schedule of Executory Contracts and Unexpired Leases to be Rejected,”

no later than 30 days after the date of such amendment. Failure to comply with this deadline

shall forever bar the holder of such a Claim from seeking payment thereof.

29. Management Agreements. Subject to the occurrence of the Effective Date and

effective thereon, the MSA, O&M Agreement and Northampton Fuel Management Agreements



33

shall be rejected pursuant to Section 365 of the Bankruptcy Code. Entry of this Confirmation

Order by the clerk of the Bankruptcy Court shall constitute the approval, pursuant to Sections

365(a) and 1123(b)(2) of the Bankruptcy Code, of the rejection of the agreements on the

Effective Date, as described in Section 6.8 of the Plan. All Claims of PSC and USOSC,

including, without limitation, damages claims arising from the rejection of these contracts, shall

be treated as set forth in Section 4.10 of the Plan.

30. Cash Collateral Adequate Protection Payments. To the extent any adequate

protection payments that were otherwise due and owing under the Cash Collateral Orders were

deferred without objection and remain unpaid as of the Effective Date, those deferred adequate

protection payments shall not be due and owing by the Debtor or any Debtor Subsidiary and any

payments arising therefrom are deemed waived by the Collateral Agent, Senior Bond Trustee,

and Junior Bond Trustee, as the case may be; provided however, such waiver shall not affect the

right of the Collateral Agent, Senior Bond Trustee and Junior Bond Trustee to payment of their

professionals from any reserves in the manner set forth in the Cash Collateral Orders and in

Section 12.9 of the Plan.

31. Affiliate Administrative Claims and Intercompany Post-Petition Claims. Affiliate

Administrative Claims are be Allowed and shall be paid in part as provided in Section 4.10 of the

Plan and not paid as an Allowed Administrative Expense Claim as set forth in Section 3.1.1 of

the Plan. Intercompany Post-Petition Claims shall not be deemed to be Administrative Claims

but shall be treated as set forth in Section 4.9 of the Plan.

32. Bar Date for Certain Administrative Expense Claims. With respect to

Administrative Expense Claims, except any Administrative Expense Claims for which a different

deadline is established by or different procedures are expressly provided for in Article 3 of the



34

Plan, a holder of such Administrative Expense Claim and which Claims the Debtor or the

Reorganized Debtor are not paying in the ordinary course of business must file with the

Bankruptcy Court and serve on the Reorganized Debtor a request for payment of such Claim so

as to be received on the date that is the first Business Day after the date that is 30 days after the

Effective Date, unless otherwise agreed to by the Debtor or Reorganized Debtor, without further

approval by the Bankruptcy Court. Failure to comply with these deadlines shall forever bar the

holder of such Administrative Expense Claim from seeking payment thereof.

33. Professional Compensation. All Professionals, other than the Professionals

retained by or providing professional services for the Collateral Agent, Senior Bond Trustee,

Junior Bond Trustee, Bondholders, Debtor Subsidiaries or Ordinary Course Professionals (who

will not be required to File final applications for allowance of compensation), who are seeking

Fee Claims or who have been compensated from the Estate of the Debtor during the Chapter 11

Case, or who are seeking Fee Claims from the Estate of the Debtor or from the Reorganized

Debtor for services rendered or reimbursement of expenses incurred from the Petition Date

through and including the Effective Date, pursuant to Sections 327, 328, 330, 503(b), 506 or

1103 of the Bankruptcy Code, shall (a) File final applications for allowance of compensation for

services and reimbursement of expenses incurred from the Petition Date through the Effective

Date by no later than the date that is 45 days after the Effective Date, and (b) if granted such an

award by the Bankruptcy Court, be paid in full by the Reorganized Debtor or as otherwise

provided in the Plan in such amounts as are Allowed by Final Order of the Bankruptcy Court (i)

on the date such Administrative Expense Claim becomes an Allowed Administrative Expense

Claim, or as soon thereafter as is practicable, or (ii) when mutually agreed upon by such holder

of an Administrative Expense Claim and the Reorganized Debtor. Professionals retained by or



35

providing professional services for the Collateral Agent, Senior Bond Trustee, Junior Bond

Trustee and Bondholders shall have any unpaid fees and expense reimbursements paid by the

Debtor pursuant to the Cash Collateral Orders entered by the Bankruptcy Court in the ordinary

course of its business and as set forth in Section 3.1.4 of the Plan. Professionals retained by the

Debtor Subsidiaries shall be paid in the ordinary course by the Debtor Subsidiaries. Ordinary

Course Professionals shall have their unpaid fees and expenses paid by the Debtor or the

Reorganized Debtor pursuant to the Ordinary Course Professional Order. Any holder of a Fee

Claim that does not assert such Claim in accordance with the Fee Order and Section 3.1.2 of the

Plan shall have its Claim deemed Disallowed under the Plan and be forever barred from asserting

such Claim against any of the Debtor, the Estate, the Reorganized Companies, and the Assets.

Any such Claim and the holder thereof shall be enjoined from commencing or continuing any

action, employment of process or act to collect, offset, recoup or recover such Claim.

34. Post-Effective Date Professionals. Upon the Effective Date, any requirement that

Professionals comply with Sections 327 through 331 and 1103 of the Bankruptcy Code in

seeking retention or compensation for services rendered after such date shall terminate, and the

Reorganized Companies may employ and pay any professional for services rendered or expenses

incurred after the Effective Date in the ordinary course of business without any further notice to

any party or action, order or approval of the Bankruptcy Court.

35. Releases by Holders of Claims. As of the Effective Date and except as set forth

in the Plan, the Plan Supplements or this Confirmation Order, each holder of a Claim or Interest

shall be deemed to have conclusively, absolutely, unconditionally, irrevocably and forever,

released and discharged the Released Parties from any and all Claims, Interests, obligations,

rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, including any



36

derivative Claims assertable on behalf of the Debtor or the Debtor Subsidiaries, whether known or

unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, that

such Person 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 Debtor, the Senior

Bonds, the Junior Bonds, the Debtor’s Chapter 11 Case, the purchase, sale or rescission of the

purchase or sale of any security of the Debtor, the Reorganized Debtor or the Issuer, the subject

matter of, or the transactions or events giving rise to, any Claim that is treated in the Plan, the

business or contractual arrangements between the Debtor and any Released Party, the

restructuring of Claims and Interests before or during the Chapter 11 Case, the negotiation,

formulation or preparation of the Plan, the Disclosure Statement, any Plan Supplements or related

agreements, instruments or other documents (collectively, “Released Claims”), other than (i) with

respect to the Reorganized Companies, Claims which are or become Allowed Claims and are to

be paid as provided pursuant to the Plan, and (ii) Released Claims against the Debtor, the

Reorganized Debtor, or a Released Party arising out of or relating to any act or omission of that

party constituting willful misconduct or gross negligence.

36. Releases by the Debtor. Pursuant to Section 1123(b) of the Bankruptcy Code and

except as otherwise specifically provided in the Plan, the Plan Supplements or this Confirmation

Order, as of the Effective Date, and subject to its occurrence, for the good and valuable

consideration provided by each of the Released Parties, any and all Causes of Action of the

Debtor, a Debtor Subsidiary and Debtor in Possession against any of the Released Parties based

in whole or in part upon any act or omission, transaction, agreement, event or other occurrence

taking place on or before the Effective Date shall be forever released and discharged. The

foregoing releases, however, shall not (1) operate as a waiver or release for any borrowed money



37

owed to the Debtor or a Debtor Subsidiary by any officer, director or employee, (2) release or

limit any claims or Causes of Action set forth in the Plan Supplements (except that the Debtor

and the Reorganized Companies release any claims and Causes of Action against the

Bondholders, Authority, Issuer, Senior Bond Trustee, Junior Bond Trustee, Collateral Agent,

Northampton Partners, Northampton Holdco, EIF Calypso, Cogentrix, or their respective past,

present and future officers, directors, managing directors, servants, shareholders, partners,

employees, agents, representatives, consultants and professionals), or (3) waive any defenses to

any Claims asserted against the Debtor or a Debtor Subsidiary by any Released Parties except to

the extent such Claims have been specifically Allowed in the Plan or by a Final Order of the

Bankruptcy Court, or (4) release any claims or Causes of Action based on gross negligence or

reckless, willful or wanton misconduct of any Released Party.

37. Exculpation. Except as otherwise specifically provided in the Plan, the Plan

Supplement or this Confirmation Order, none of (i) the Debtor, the Debtor Subsidiaries and their

member or members, (ii) the Reorganized Companies and their member or members, (iii) the

Senior Bond Issuer, (iv) the Junior Bond Issuer, (v) the Senior Bond Trustee, (vi) the Junior

Bond Trustee (vii) the Reinvesting Beneficial Owner, and (xi) the current and former officers,

directors, members, managers, employees, attorneys and advisors, each in their respective

capacities as such, of each of the foregoing (the “Exculpated Parties”) shall have or incur, and

each Exculpated Party is hereby released and exculpated from, any exculpated claim, obligation,

cause of action or liability for any exculpated claim, except for gross negligence or willful

misconduct (to the extent such duty is imposed by applicable non-bankruptcy law), but in all

respects such Persons shall be entitled to reasonably rely upon the advice of counsel with respect

to their duties and responsibilities pursuant to the Plan. The Debtor, the Debtor Subsidiaries and



38

the Reorganized Companies (and each of their respective affiliates, agents, directors, members,

officers, employees, advisors and attorneys) have, and upon confirmation of the Plan shall be

deemed to have participated in good faith and in compliance with the applicable provisions of

the Bankruptcy Code and applicable non-bankruptcy law with regard to the solicitation and

distribution of securities pursuant to the Plan, and, therefore, are not, and on account of such

distributions shall not be, liable at any time for the violation of any applicable law, rule or

regulation governing the solicitation of acceptances or rejections of the Plan or such distributions

made pursuant to the Plan.

38. Binding Release Provision. All release provisions embodied in the Plan,

including but not limited to those contained in Article 10 of the Plan, are approved and shall be

effective and binding on all persons and entities, to the extent provided therein.

39. Injunction. The injunction provisions set forth in the Plan, including, without

limitation, Section 10.4 of the Plan are hereby approved in their entirety. Except as otherwise

provided in the Plan or this Confirmation Order, from and after the Effective Date, all Persons

are permanently enjoined from commencing or continuing in any manner, any cause of action

released or to be released pursuant to the Plan or this Confirmation Order.

From and after the Effective Date, to the extent of the releases and exculpation granted in

the Plan and this Confirmation Order, the Releasing Parties shall be permanently enjoined from

commencing or continuing in any manner against the Released Parties and the exculpated parties

and their assets and properties, as the case may be, any suit, action or other proceeding, on

account of or respecting any claim, demand, liability, obligation, debt, right, cause of action,

interest or remedy released or to be released pursuant to the Plan.



39

Except as otherwise expressly provided in the Plan or in this Confirmation Order, the

Plan Supplements or the Plan Documents or related documents, or for obligations under the Plan,

all persons who have held, hold or may hold claims or interests that have been released,

discharged, or are subject to exculpation, are permanently enjoined, from and after the Effective

Date, from taking any of the following actions: (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 claims or interests; (2) enforcing, attaching, collecting or recovering by any manner or

means any judgment, award, decree or order against such persons on account of or in connection

with or with respect to any such claims or interests; (3) creating, perfecting or enforcing any

encumbrance of any kind against such persons or the property or estate of such persons on

account of or in connection with or with respect to any such claims or interests; and (4)

commencing or continuing any manner or action or other proceeding of any kind on account of

or in connection with or with respect to any such claims or interests released, settled or

discharged pursuant to the Plan.

The rights afforded in the Plan and the treatment of all Claims and Interests therein shall

be in exchange for and in complete satisfaction of all claims and interests of any nature

whatsoever, including any interest accrued on Claims from and after the Petition Date, against

the Debtor, the Debtor Subsidiaries or any of their Assets, property or Estate.

Except as otherwise provided for in the Plan or this Confirmation Order or in obligations

entered into under the Plan, from and after the Effective Date, all Claims against the

Northampton Parties shall be fully released and discharged and the Northampton Parties’ liability

with respect thereto shall be extinguished completely, including any liability of the kind

specified under Section 502(g) of the Bankruptcy Code. All persons shall be precluded from



40

asserting against the Northampton Parties, the Estate, the Reorganized Companies, each of their

respective successors and assigns, and each of their assets and properties, any other claims or

interests based upon any documents, instruments or any act or omission, transaction or other

activity of any kind or nature that occurred before the Effective Date.

40. Term of Injunctions or Stays. Pursuant to Section 10.5 of the Plan, unless

otherwise provided in the Plan or in this Confirmation Order, all injunctions or stays in effect in

the Chapter 11 Case 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. In addition, on and after the

Confirmation Date, the Debtor and each Debtor Subsidiary may seek such further orders as they

may deem necessary or appropriate to preserve the status quo during the time between the

Confirmation Date and the Effective Date.

41. Indemnification Obligations. Subject to the occurrence of the Effective Date, the

obligations of the Debtor or a Debtor Subsidiary to indemnify, reimburse or limit liability of any

person who is serving or has served as one of their directors, members of its Board of Control,

officers, employees or agents by reason of such person’s prior or current service in such capacity

as provided in the applicable articles of organization, operating agreements, partnership

agreements, or bylaws, by statutory law or by written agreement, policies or procedures of or

with the Debtor or Debtor Subsidiary, or the partners of the Debtor, shall be deemed to be and

treated as executory contracts that are assumed and assigned to the Reorganized Companies

pursuant to the Plan and Section 365 of the Bankruptcy Code and shall not be affected by or



41

discharged by the Plan. Nothing in the Plan shall be deemed to affect any rights of any director,

partner, member, officer or any other person against any insurer with respect to any directors or

officers liability insurance policies.

42. Protection Against Discriminatory Treatment. Consistent with Section 525 of the

Bankruptcy Code and the Supremacy Clause of the U.S. Constitution, all persons, including

governmental units, shall not discriminate against the Reorganized Companies or deny, revoke,

suspend or refuse to renew a license, permit, charter, franchise or other similar grant to,

condition such a grant to, discriminate with respect to such a grant against, the Reorganized

Companies or another person with whom the Reorganized Companies has or have been

associated, solely because the Debtor or Debtor Subsidiary has been a debtor under chapter 11,

has been insolvent before the commencement of the Chapter 11 Case (or during the Chapter 11

Case but before the Debtor is granted or denied a discharge) or has not paid a debt that is

dischargeable in the Chapter 11 Case. From and after entry of the Confirmation Order, all

persons, including governmental units shall accept any documents or instruments presented by

the Debtor or Reorganized Companies which are necessary or appropriate to consummate the

transactions contemplated by the Plan, shall not revoke, terminate or fail or refuse to maintain,

transfer, issue or renew any license, permit or authorization based on the transactions

contemplated by the Plan or implementation thereof.

43. No Successor Liability. Except as otherwise specifically provided in the Plan or

this Confirmation Order, neither the Debtor, any Debtor Subsidiary nor the Reorganized

Companies will have any responsibilities, pursuant to the Plan or otherwise, for any liabilities or

obligations of the Debtor or any of the Debtor Subsidiaries, past or present, relating to or arising

out of the operations of or assets of the Debtor or any of the Debtor Subsidiaries, whether arising



42

prior to, or resulting from actions, events, or circumstances occurring or existing at any time

prior to the Effective Date. The Reorganized Companies shall have no successor or transferee

liability of any kind or character, for any Claims; provided, however, that the Reorganized

Companies shall have the obligations for the payments specifically and expressly provided, and

solely in the manner stated, in the Plan.

44. Discharge. The discharge provisions set forth in the Plan, including, without

limitation, Section 10.3 of the Plan are hereby approved in their entirety. Except as otherwise

provided in the Plan or this Confirmation Order, as of the Effective Date, the rights afforded in

the Plan and the treatment of the Claims and Interests herein shall be in exchange for and in

complete satisfaction, discharge, and release of all Claims against and Interests in the Debtor,

each Debtor Subsidiary, the Debtor in Possession, the Reorganized Companies or the Assets,

properties, or Interests in, or property of the Debtor, each Debtor Subsidiary, the Debtor in

Possession or the Reorganized Companies of any nature whatsoever, including any interest

accrued on any Claim from and after the Petition Date. Except as expressly otherwise provided

in the Plan or in this Confirmation Order, on the Effective Date, all Claims arising before the

Effective Date (including those arising under Sections 502(g), 502(h) or 502(i) of the Bankruptcy

Code) against the Debtor, any Debtor Subsidiary and the Debtor in Possession (including any

based on acts or omissions that constituted or may have constituted ordinary or gross negligence

or reckless, willful, or wanton misconduct of any of the Debtor or a Debtor Subsidiary, or any

conduct for which the Debtor or a Debtor Subsidiary may be deemed to have strict liability under

any applicable law), together with all Interests in the Debtor, shall be irrevocably satisfied,

discharged, cancelled and released in full.



43

For the avoidance of doubt, the Reorganized Companies shall be responsible only for (a)

those payments and distributions expressly provided for or due under the Plan and (b) Claims

and Interests that are not canceled and discharged pursuant to specific and express provisions of

the Plan, and then only to the extent and in the manner specifically and expressly provided in the

Plan. All Entities are precluded and forever barred from asserting against the Debtor, any Debtor

Subsidiary, the Debtor in Possession or the Reorganized Companies, or the Assets, properties, or

Interests in or property of the Debtor, any Debtor Subsidiary, the Debtor in Possession or the

Reorganized Companies of any nature whatsoever any Claims or Interests based upon any act or

omission, transaction, or other activity, event, or occurrence of any kind or nature that occurred

prior to the Effective Date, whether or not the facts of or legal bases therefor were known or

existed prior to the Effective Date, except for (a) those payments and distributions expressly due

under the Plan and (b) Claims and Interests, if any, that are not canceled and discharged under

the Plan, but instead survive pursuant to specific and express provisions of the Plan, and then

only to the extent and in a manner specifically and expressly provided for in the Plan.

With respect to any debts discharged by operation of law under Section 1141 of the

Bankruptcy Code, the discharge of the Debtor operates as an injunction against the

commencement or continuation of an action, the employment of process, or an act, to collect,

recover, or offset any such debt as a liability of the Debtor or any Debtor Subsidiary, whether or

not the discharge of such debt is waived; provided, however, that the obligations of the

Reorganized Companies under the Plan are not so discharged.

45. Conditions to Effective Date. The Plan shall not become effective unless and

until the conditions set forth in Section 11.1 of the Plan and in this Confirmation Order have

been satisfied or waived pursuant to Section 11.1 of the Plan. In the event that one or more of



44

the conditions specified in Section 11.1 of the Plan have not been satisfied or waived in

accordance with Section 11.1 of the Plan, (i) the Confirmation Order shall be vacated, (ii) no

distributions under the Plan shall be made, (iii) the Debtor, the Debtor Subsidiaries and all

holders of Claims and Interests shall be restored to the status quo ante as of the day immediately

preceding the Confirmation Date as though the Confirmation Date never occurred, and (iv) all of

the Debtor’s and Debtor Subsidiaries’ obligations with respect to Claims and Interests shall

remain unchanged and nothing contained in the Plan or in the Confirmation Order shall

constitute or be deemed a waiver or release of any Claims or Interests by or against the Debtor,

the Debtor Subsidiaries or any other person or to prejudice in any manner the rights of the

Debtor, the Debtor Subsidiaries or any person in any further proceedings involving the Debtor,

the Debtor Subsidiaries or otherwise.

46. Insurance Policies. Notwithstanding anything to the contrary in the Plan, any

insurance policy in effect as of the date of the Effective Date that provides insurance coverage to

the Debtor or its officers, directors and employees shall remain in effect through its

expiration in accordance with the terms and conditions of such policy. To the extent that any

such policies are deemed to be an executory contract, the assumption of such policies is

hereby approved and the Cure Payment with respect thereto is $0.00.

47. Payment of Statutory Fees. All fees payable pursuant to Section 1930 of title 28

of the United States Code shall be paid on the Effective Date and thereafter as may be required.

48. Reversal/Stay/Modification/Vacatur of Confirmation Order. Except as otherwise

provided in this Confirmation Order, if any or all of the provisions of this Confirmation Order

are hereafter reversed, modified, vacated, or stayed by subsequent order of this Court or any

other court, such reversal, stay, modification, or vacatur shall not affect the validity or



45

enforceability of any act, obligation, indebtedness, liability, priority, or lien incurred or

undertaken by the Debtor, the Debtor Subsidiaries or the Reorganized Companies, as applicable,

pursuant to the Plan and the Confirmation Order prior to the effective date of such reversal, stay,

modification, or vacatur. Notwithstanding any such reversal, stay, modification, or vacatur of

this Confirmation Order, any such act or obligation incurred or undertaken pursuant to, or in

reliance on, this Confirmation Order prior to the effective date of such reversal, stay,

modification, or vacatur shall be governed in all respects by the provisions of this Confirmation

Order and the Plan or any amendments or modifications thereto. The Debtor, the Debtor

Subsidiaries or the Reorganized Companies, as applicable, at any time may request that the

Bankruptcy Court estimate any Contingent Claim or Disputed Claim pursuant to Section

502(c) of the Bankruptcy Code, regardless of whether an objection was previously filed with

the Bankruptcy Court with respect to such Claim, or whether the Bankruptcy Court has ruled

on any such objection, and the Bankruptcy Court will retain jurisdiction to estimate any Claim

at any time during litigation concerning any objection to any Claim, including, without

limitation, during the pendency of any appeal relating to such objection. Notwithstanding the

foregoing, all Allowed Claims under the Plan shall be deemed Allowed and not subject to

further challenge.

49. Retention of Jurisdiction. Notwithstanding the entry of this Confirmation Order

or the occurrence of the Effective Date, pursuant to Article 13 of the Plan and Sections 105 and

1142 of the Bankruptcy Code, this Court shall retain exclusive jurisdiction over all matters

arising in, arising under, and related to the Chapter 11 Case to the fullest extent as is legally

permissible.



46

50. Compliance with Tax Requirements. In connection with the Plan, the Debtor,

each Debtor Subsidiary and the Reorganized Companies shall comply with all applicable

withholding and reporting requirements imposed by federal, state, and local taxing authorities,

and all distributions hereunder shall be subject to such withholding and reporting requirements.

51. Exemption from Certain Taxes. Pursuant to Section 1146(a) of the Bankruptcy

Code, any transfers of property in contemplation of, in connection with, or pursuant to the Plan

shall not be subject to any stamp tax or other similar tax or governmental assessment in the

United States, and this Confirmation Order directs the appropriate state or local governmental

officials or agents to forgo the collection of any such tax or governmental assessment and to

accept for filing and recordation instruments or other documents pursuant to such transfers of

property without the payment of any such tax or governmental assessment.

52. Indenture Held Funds. Pursuant to the Cash Collateral Order, the Collateral

Agent, Senior Bond Trustee and Junior Bond Trustee were authorized to apply, allocate and

make payments from all cash, cash equivalents, securities and funds held pursuant to the Senior

Bond Indenture, Junior Bond Indenture or any other document(s) evidencing, securing or

otherwise relating to the Bonds in any manner permitted by those documents. No provision of

the Plan or this Confirmation Order shall impair or affect the foregoing rights of the Collateral

Agent, Senior Bond Trustee or Junior Bond Trustee or otherwise impair any rights or interests of

the Collateral Agent, Senior Bond Trustee, Junior Bond Trustee or Bondholders therein.

53. Modifications. Subject to certain restrictions and requirements set forth in

Section 1127 of the Bankruptcy Code, the Reorganized Companies may after the Confirmation

Date and prior to the Effective Date, alter, amend, or modify the Plan Documents and may

continue to finalize the Amended Bond Documents, provided, such modifications and contined



47

drafting are consistent with the intent of the Plan and each affected party, the Reorganized

Companies, the Collateral Agent and the Reinvesting Beneficial Owner consent to the

modification or final terms, as applicable. All modifications to the Plan, Plan Documents and

copies of the Amended Bond Documents will be filed on or prior to the Effective Date. If the

parties do not consent, the parties may seek a hearing on the modifications pursuant to Section

1127(b) of the Bankruptcy Code. From and after the Effective Date, the authority to amend,

modify, or supplement the Plan Documents shall be as provided in the Plan, the Plan

Supplements or such documents.

54. Filing of Notice of Effective Date. Within three Business Days of the occurrence

of the Effective Date, the Reorganized Companies shall file a notice of occurrence of the

Effective Date signed by the counsel for the Debtor in Possession and, if different, counsel to the

Reorganized Companies in the record of the Bankruptcy Court reflecting (a) that the conditions

to the occurrence of the Effective Date stated in Section 11.1 of the Plan have been satisfied or

waived by the Debtor and any other person whose consent or waiver is required, (b) the date of

the Effective Date, and (c) acknowledging that the Effective Date has occurred on and as of such

date.

55. Provisions of Plan and Confirmation Order Nonseverable and Mutually

Dependent. The provisions of the Plan and this Confirmation Order, including the findings of

fact and conclusions of law set forth herein, are nonseverable and mutually dependent.

56. Further Authorizations. The Debtor, each Debtor Subsidiary, and after the

Effective Date, the Reorganized Companies, may seek such orders, judgments, injunctions, and

rulings they deem necessary or useful to carry out the intention and purpose of, and to give full

effect to, the provisions of the Plan or this Confirmation Order. For the avoidance of doubt, the



48

Collateral Agent, Senior Bond Trustee and Junior Bond Trustee may each, in its sole discretion,

condition the taking or refraining from taking of any action described in or contemplated by the

Plan on its receipt of direction from holders of the obligations for which it is representative that

complies with the terms of the applicable Bonds and related documents.

57. Governing Law. Unless a rule of law or procedure is supplied by federal law

(including the Bankruptcy Code and the Bankruptcy Rules) or unless otherwise specifically

stated, the laws of the State of New York, without giving effect to the principles of conflicts of

laws, shall govern the rights, obligations, construction, and implementation of the Plan and the

restructuring transactions consummated or to be consummated in connection therewith.

58. Applicable Nonbankruptcy Law. Pursuant to Section 1123(a) and 1142(a) of the

Bankruptcy Code, the provisions of this Confirmation Order, the Plan and related documents or

any amendments or modifications thereto shall apply and be enforceable notwithstanding any

otherwise applicable nonbankruptcy law.

59. Documents and Instruments. Each federal, state, commonwealth, local, foreign,

or other governmental agency is hereby authorized to accept any and all documents and

instruments necessary or appropriate to effectuate, implement or consummate the transactions

contemplated by the Plan and this Confirmation Order.

60. Governmental Approvals Not Required. Except as provided below with respect

to the approval of the Federal Energy Regulatory Commission (“FERC”), this Confirmation

Order shall constitute all approvals and consents required, if any, by the laws, rules, or

regulations of any state or other governmental authority with respect to the implementation or

consummation of the Plan and Disclosure Statement, any documents, instruments, or

agreements, and any amendments or modifications thereto, and any other acts referred to in, or



49

contemplated by, the Plan and the Disclosure Statement. Approval will be obtained by FERC of

the change in ownership of the Debtor pursuant to Section 203(a)(2) of the Federal Power Act

and Section 33.1(a)(1) of FERC’s regulations governing dispositions.

61. Notice of Confirmation Order and Occurrence of Effective Date. In accordance

with Bankruptcy Rules 2002 and 3020(c), within 10 days after the Effective Date, the Debtor

shall serve notice of the entry of this Confirmation Order and the occurrence of the Effective

Date, substantially in the form annexed hereto as Exhibit B, to all parties who hold a Claim or

Interest in these cases, including the Bankruptcy Administrator. Such notice is hereby approved

in all respects and shall be deemed good and sufficient notice of entry of this Confirmation Order

and the occurrence of the Effective Date.

62. Substantial Consummation. On the Effective Date and upon completion of the

distributions contemplated under the Plan thereon, the Plan shall be deemed to be substantially

consummated under Sections 1101 and 1127 of the Bankruptcy Code.

63. Waiver of Stay. The stay of this Confirmation Order provided by any

Bankruptcy Rule (including, without limitation, Bankruptcy Rules 3020(e), 6004(h), and

6006(d)), whether for fourteen (14) days or otherwise, is hereby waived, and this Confirmation

Order shall be effective and enforceable immediately upon its entry by the Court.

64. Inconsistency. To the extent of any inconsistency between this Confirmation

Order and the Plan, this Confirmation Order shall govern.

65. No Waiver. The failure to specifically include any particular provision of the

Plan in this Confirmation Order shall not diminish the effectiveness of such provision nor

constitute a waiver thereof, it being the intent of this Court that the Plan is confirmed in its

entirety and incorporated herein by this reference.



50

66. Binding Effect. Notwithstanding Bankruptcy Rules 3020(e), 6004(h) or 7062 or

any other Bankruptcy Rule, upon the occurrence of the Effective Date, the terms of the Plan,

Plan Supplements and the Plan Documents shall be immediately effective and enforceable and

deemed binding upon the Debtor, each Debtor Subsidiary, the Reorganized Companies and any

and all holders of Claims or Interests (irrespective of whether such Claims or Interests are

deemed to have accepted the Plan), all persons that are parties to or are subject to the settlements,

compromises, releases, discharges and injunctions described in the Plan, each person acquiring

property under the Plan, and any and all non-Debtor parties to executory contracts and unexpired

leases with the Debtor or Debtor Subsidiaries.

67. Filing and Recording. This Confirmation Order (a) is and shall be effective as a

determination that, on the Effective Date, all Claims and Interests existing prior to such date

have been released, satisfied and terminated to the extent provided herein or in the Plan, and (b)

is and shall be binding upon and shall govern the acts of all entities including, without limitation,

all filing agents, filing officers, title agents, title companies, recorders of mortgages, recorders of

deeds, registrars of deeds, administrative agencies, governmental departments, secretaries of

state, federal, state and local officials, and all other persons and entities who may be required, by

operation of law, the duties of their office, or contract, to accept, file, register or otherwise

record, or release any document or instruments. Each and every federal, state, and local

government agency is hereby directed to accept any and all documents and instruments

necessary, useful, or appropriate (including Uniform Commercial Code financing statements) to

effectuate, implement, and consummate the transactions contemplated by the Plan and this

Confirmation Order and to the extent appropriate, without payment of any recording tax, stamp

tax, transfer tax, or similar tax imposed by state or local law.



51

68. Final Order. Notwithstanding Bankruptcy Rules 3020(e) and 6004(h) and any

other Bankruptcy Rule, to the extent applicable, the Court finds that there is no reason for delay

in the implementation of this Confirmation Order, and thus this Confirmation Order shall be

effective and enforceable immediately upon the entry hereof.

This Order has been signed electronically. United States Bankruptcy CourtThe judge’s signature and court’s seal appearAt the top of the Order.



52

EXHIBIT A

Plan, as amended or modified



CHAR2\1462268v9


CHARLOTTE DIVISION

In re: ) Case No. 11-33095)


)Debtor. )

)

CHAPTER 11 PLAN OF REORGANIZATION FORNORTHAMPTON GENERATING COMPANY, L.P. AS OF DECEMBER 21, 2012

MOORE & VAN ALLEN PLLCBen Hawfield (NC Bar No. 5154)

Hillary B. Crabtree (NC Bar No. 26500)100 North Tryon Street, Suite 4700

Charlotte, NC 28202Telephone: (704) 331-1000Facsimile: (704) 339-5968

Counsel for Debtor and Debtor in Possession

Date: December 21, 2012



iCHAR2\1462268v9

Table of Contents

ARTICLE 1 DEFINITIONS AND CONSTRUCTION OF TERMS..............................................2

ARTICLE 2 CONSOLIDATION OF DEBTOR AND DEBTOR SUBSIDIARIES ....................26

ARTICLE 3 PROVISIONS FOR PAYMENT OF ADMINISTRATIVE EXPENSES................26

3.1 Payment of Allowed Administrative Expense Claims..........................................26

ARTICLE 4 CLASSIFICATION AND TREATMENT OF CLAIMS ANDINTERESTS ......................................................................................................................30

4.1 Class 1. Priority Claims. .......................................................................................304.2 Class 2. Secured Tax Claims. ...............................................................................304.3 Class 3. Senior Bond Claims. ...............................................................................314.4 Class 4. Junior Bond Claims. ...............................................................................324.5 Class 5. Horwith Claim.........................................................................................334.6 Class 6. Convenience Class Claims......................................................................344.7 Class 7. General Unsecured Claims. ....................................................................354.8 Class 8. Debtor Subsidiary Claims. ......................................................................354.9 Class 9. Intercompany Claims. .............................................................................364.10 Class 10. Affiliate Service Claims and Affiliate Administrative Claims. ............364.11 Class 11. Partnership Interests. ............................................................................374.12 Class 12. Interests of Debtor Subsidiaries............................................................38

ARTICLE 5 ACCEPTANCE OR REJECTION OF THE PLAN .................................................38

5.1 Impaired Classes Vote...........................................................................................385.2 Presumed Acceptance of the Plan. .......................................................................385.3 Presumed Rejection of the Plan. ..........................................................................385.4 Voting Class...........................................................................................................395.5 Nonconsensual Confirmation...............................................................................39

ARTICLE 6 EXECUTORY CONTRACTS AND UNEXPIRED LEASES.................................39

6.1 Assumption. ...........................................................................................................396.2 Cure Payments, Compensation for Pecuniary Loss, and Adequate

Assurance. .............................................................................................................416.3 Effect of Confirmation Order on Executory Contracts and Unexpired

Leases. ...................................................................................................................426.4 Bar Date for Filing Proofs of Claim Relating to Executory Contracts

and Unexpired Leases Rejected Pursuant to the Plan.........................................436.5 Modifications, Amendments, Supplements, Restatements or Other

Agreements. ...........................................................................................................446.6 Reservation of Rights. ...........................................................................................446.7 Plan Contracts and Leases Entered Into After the Petition Date. ......................456.8 Management Agreements. ....................................................................................45

ARTICLE 7 DISTRIBUTIONS UNDER THE PLAN .................................................................45

7.1 Distributions under the Plan. ...............................................................................457.2 Record Date for Voting on Plan. ..........................................................................46



iiCHAR2\1462268v9

7.3 Delivery of Distributions. ......................................................................................467.4 Third-Party Agreements. ......................................................................................477.5 Manner of Payment Under the Plan. ...................................................................487.6 No Fractional Distributions. ................................................................................487.7 Withholding and Reporting. .................................................................................487.8 Surrender of Instruments. ....................................................................................48

ARTICLE 8 MEANS FOR EXECUTION AND IMPLEMENTATION OF THE PLAN ...........49

8.1 Generally. ..............................................................................................................508.3 Equity Contribution. .............................................................................................508.4 New Partnership Interests. ...................................................................................508.5 Entity Action..........................................................................................................518.6 Status of Existing Liens of Secured Tax Claims, Senior Bond Claims

and Other Secured Claims....................................................................................518.7 Plan Documents. ...................................................................................................518.8 Effectuating Documents and Further Transactions. ..........................................528.9 Reorganized Companies Governance ..................................................................52

ARTICLE 9 RESOLUTION OF DISPUTED CLAIMS AND INTERESTS ...............................53

9.1 Objections to Claims and Interests; Prosecution of Disputed Claimsand Interests. .........................................................................................................53

9.2 Estimation of Disputed Claims and Interests.......................................................539.3 No Distribution on Account of Disputed Claims and Interests...........................54

ARTICLE 10 EFFECT OF CONFIRMATION OF PLAN...........................................................54

10.1 Vesting of Assets and Retained Causes of Action................................................5410.2 Binding Effect. ......................................................................................................5510.3 Discharge...............................................................................................................5610.4 Injunction. .............................................................................................................5710.5 Term of Injunctions or Stays. ...............................................................................5910.6 Indemnification Obligations.................................................................................6010.7 Protection against Discriminatory Treatment. ....................................................6010.8 No Successor Liability. .........................................................................................6110.9 Release of Claims of Debtor and Debtor Subsidiaries.........................................6110.10 Release by Holders of Claims. ..............................................................................6210.11 Exculpation. 6310.12 Preservation of All Causes of Action Not Expressly Settled or Released. ..........63

ARTICLE 11 THE EFFECTIVE DATE OF THE PLAN.............................................................65

11.1 Conditions to Occurrence of Effective Date of Plan. ..........................................6511.2 Filing of Notice of Effective Date.........................................................................6711.3 Withdrawal of Plan. ..............................................................................................67

ARTICLE 12 MISCELLANEOUS PROVISIONS.......................................................................68

12.1 Payment of Statutory Fees. ...................................................................................6812.2 Notice. ....................................................................................................................6812.3 Headings................................................................................................................69



iiiCHAR2\1462268v9

12.4 Governing Law. .....................................................................................................6912.5 Additional Documents...........................................................................................6912.7 Compliance with Tax Requirements. ...................................................................7012.8 Exemption from Transfer Taxes. .........................................................................7012.9 Indenture Held Funds. .........................................................................................7012.10 Further Authorizations. ........................................................................................7012.11 Successors and Assigns.........................................................................................7112.12 Modification and Amendment of the Plan...........................................................7112.13 Exemption From Securities Laws. .......................................................................71

ARTICLE 13 RETENTION OF JURISDICTION........................................................................72

13.1 Executory Contracts and Unexpired Leases. .......................................................7213.2 Causes of Action....................................................................................................7213.3 Disputed Claims, Contingent Claims and Unliquidated Claims

Allowance/Disallowance. ......................................................................................7213.4 Enforcement/Modification of Plan. .....................................................................7313.5 Compensation of Professionals. ...........................................................................7413.6 Settlements.............................................................................................................7413.7 Taxes......................................................................................................................7413.8 506(b) Claims. .......................................................................................................7413.9 Specific Purposes. .................................................................................................7413.10 Final Decrees. .......................................................................................................74



CHAR2\1462268v9

Northampton Generating Company, L.P., as Debtor and Debtor in Possession (the

“Debtor”), proposes the following Chapter 11 Plan of Reorganization with respect to its Chapter

11 Case pursuant to the provisions of chapter 11 of title 11 of the United States Code. Reference

is made to the Disclosure Statement distributed contemporaneously herewith for, among other

things, a discussion of the history, businesses, properties, results of operations, projections for

future operations of the Debtor, and risks associated with this Plan.

THE PLAN DOCUMENTS

The Plan Documents, once Filed, shall also be available for review:

(a) in the office of the clerk of the Bankruptcy Court during normal hours of

operation of the Bankruptcy Court; and

(b) on Business Days from 9:00 a.m. through 5:00 p.m. (prevailing Eastern

Time) at the following addresses:

Moore & Van Allen PLLC100 North Tryon StreetSuite 4700Charlotte, NC 28202Telephone: (704) 331-3571Attn: Hillary B. Crabtree

Holders of Claims may also obtain a copy of the Plan Documents following their Filing

with the clerk of the Bankruptcy Court by contacting counsel for the Debtor by a written request

sent to the above address.

ANCILLARY DOCUMENTS

Each of the Plan Documents is an integral part of this Plan and is hereby incorporated by

reference and made a part of this Plan.



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ARTICLE 1

DEFINITIONS AND CONSTRUCTION OF TERMS

Unless the context requires otherwise, each term stated in either the singular or

the plural will include the singular and the plural, and pronouns stated in the masculine, feminine

or neuter gender will include the masculine, the feminine and the neuter. Unless the context

requires otherwise, the following words and phrases will have the meanings set forth below

when used in the initially-capitalized form in this Plan: An initially capitalized term used herein

that is not defined herein shall have the meaning ascribed to such term, if any, in the Bankruptcy

Code, unless the context shall otherwise require. The words “in this Plan”, “this Plan”, “hereto”,

“hereof,” “herein,” or “hereunder” and other words of similar import, unless specifically stated

otherwise, refer to the entirety of the Plan, and not to a particular section of the Plan. The words

“article,” “section,” “subsection,” “clause” or “sentence” refer to particular provisions of the

Plan and not to the entirety thereof. The word “including” (and with correlative meaning, the

word “include”) means including, without limiting or restricting the generality of any description

preceding the word “including” or “include,” and shall mean “including, but not limited to.” The

use of the word “any” shall mean “any and all,” and the use of the word “all” shall also mean

“any and all.” The use of the words “and” and “or” shall, as the context requires, mean “and/or.”

The words “shall” and “will” are used interchangeably and have the same meaning. Unless the

context requires otherwise, the following words and phrases shall have the meanings set forth

below when used in initially capitalized form in this Plan:

1.1 “Administrative Expense Claim” shall mean a Claim for any cost or expense of

administration of the Chapter 11 Case, other than an Affiliate Administrative Claim, that is

otherwise entitled to priority in accordance with the provisions of Sections 503(b), 507(a)(2),

507(b) or 1114(e)(2) of the Bankruptcy Code, including, without limitation, (a) actual and



3

CHAR2\1462268v9

necessary expenses of preserving the Estate and operating the Debtor’s businesses (including,

without limitation, the cure costs with respect to executory contracts and unexpired leases

assumed by the Debtor pursuant to Section 365 of the Bankruptcy Code), (b) fees and expenses

of Professionals to the extent allowed by a Final Order under Sections 328, 330 and 503 of the

Bankruptcy Code, and (c) fees and charges properly assessed against the Debtor in Possession

under Section 1930 of title 28 of the United States Code.

1.2 “Affiliate Administrative Claim” shall mean any claim of PSC, USOSC or any

other affiliate allegedly entitled to priority in accordance with the provisions of Section 503(b),

507(b) or 1114(c)(12) of the Bankruptcy Code.

1.3 “Affiliate Services Claim” shall mean any Claim of PSC, USOSC or any other

affiliate against the Debtor or a Debtor Subsidiary arising or accruing prior to or after the Petition

Date that is not an Allowed Affiliate Administrative Claim, including, without limitation, (i) any

Claim arising or accruing under the MSA, O&M Agreement, Northampton Fuel Management

Agreements or any other management or operations agreements, and (ii) any Claim arising from

the rejection of the MSA, O&M Agreement or the Northampton Fuel Management Agreements.

1.4 “Allowed” shall mean with respect to any Claim against or Interest in the Debtor,

a Claim or Interest (a) proof of which is timely Filed (or by order of the Bankruptcy Court or as

otherwise provided herein is not required to be Filed), (b) that is listed in the Schedules as

liquidated in amount, non-disputed and non-contingent and for which no proof of claim has been

Filed, or (c) expressly allowed pursuant to this Plan; and, in each case with respect to (a) and (b)

above, either (i) no objection (or an amendment of the Schedules with respect thereto) to its

allowance, amount, or classification has been interposed within the applicable period for filing

same fixed by this Plan, the Bankruptcy Code, the Bankruptcy Rules or the Bankruptcy Court, or



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CHAR2\1462268v9

(ii) such objection (or an amendment of the Schedules with respect thereto), if so interposed, has

been determined and fixed by a Final Order (but only to the extent so determined and fixed and

not where fixed and allowed solely for purposes of voting to accept or reject the Plan). Allowed

shall mean with respect to any Claim against or Interest in a Debtor Subsidiary a Claim or

Interest with respect to which (i) no intention to object to its allowance, amount, or classification

is identified in this Plan, or (ii) such objection, if so interposed, has been determined and fixed by

a Final Order (but only to the extent so determined and fixed and not where fixed and allowed

solely for purposes of voting to accept or reject the Plan). Claims that are not Allowed or are

disallowed by Final Order or otherwise, including those disallowed under Section 502(d) of the

Bankruptcy Code, shall not be Allowed Claims.

1.5 “Allowed Amount” shall mean, with respect to each Allowed Claim:

(a) the dollar amount of an Allowed Claim as determined by a Final Order or as setforth in this Plan;

(b) in the event that no such determination of the Allowed Amount of an AllowedClaim is made pursuant to subsection (a) but the Claim is otherwise listed by the Debtorin its Schedules as liquidated in amount, non-disputed and non-contingent and for whichno proof of claim has been Filed, the dollar amount of the Allowed Claim so listed;

(c) in the event that no Allowed Amount is determined pursuant to clause (a) orclause (b) above, the amount estimated by a Final Order of the Bankruptcy Court forpurposes of distribution pursuant to Section 502 of the Bankruptcy Code; or

(d) in the event that an Allowed Amount is not determined pursuant to clauses (a), (b)or (c) above, the dollar amount of a Claim for which a proof of claim has been Filed andas to which no objection to the allowance, amount or classification thereof has beeninterposed within the applicable period fixed by this Plan, the Bankruptcy Code, theBankruptcy Rules, or the Bankruptcy Court.

From and after the Effective Date, “Allowed Amount” shall also mean, with respect to each

Allowed Claim in the event that no Allowed Amount is determined pursuant to clauses (a), (b),

(c) or (d) above, the dollar amount of an Allowed Claim as agreed to by the Reorganized

Companies, with, in instances where the Allowed Amount would exceed $100,000, prior written



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consent of the Collateral Agent but otherwise as determined by the Reorganized Companies

without further consent or approval by the Bankruptcy Court or other Entity. Unless otherwise

specified herein or in a Final Order, the Allowed Amount of any Claim shall not include interest

accruing on such Claim from and after the Petition Date.

1.6 “Allowed Claim” shall mean a Claim to the extent that it has been Allowed.

1.7 “Amended Bond Documents” shall mean the Amended Bond Loan Agreement,

the Amended Bond Indenture, the amendment to the Project Coordination Agreement and certain

other amendments, supplements and restatements to the Senior Bond Indenture, Senior Bond

Loan Agreement and certain other documents and guarantees evidencing, securing or otherwise

relating to the Amended Bonds, to implement the terms of this Plan, all substantially in the forms

attached to the Plan Supplement (in the case of those Amended Bond Documents included in that

document), to be entered into and effective on or after the Effective Date.

1.8 “Amended Bond Indenture” shall mean the trust indenture dated as of the

Effective Date among the Successor Bond Issuer and the Successor Bond Trustee.

1.9 “Amended Bond Loan Agreement” shall mean that certain loan agreement dated

as of the Effective Date between the Reorganized Debtor and the Successor Authority.

1.10 “Amended Bonds” shall mean the Resource Recovery Revenue Bonds

(Northampton Generating Project) Senior Tax-Exempt Series 2013 A Bonds in the principal

amount of $50,000,000.00 issued pursuant to the Amended Bond Indenture.

1.11 “Applicable Trustee” shall mean the Senior Bond Trustee or the Junior Bond

Trustee, as the context requires.

1.12 “Assets” shall mean all property of the Debtor or a Debtor Subsidiary as defined

in Section 541(a) of the Bankruptcy Code, including but not limited to, all of the Debtor’s rights,



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title and interests in and to all immovable and real property and appurtenances thereto,

improvements thereon, cash, deposits, telephone numbers, trade names, trade secrets,

trademarks, copyrights, business “know how,” goodwill, bank accounts of any and all types of

any kind, tangible personal property, furniture, fixtures, equipment, machinery, inventory,

general intangibles, general accounts, accounts receivable, intellectual property of all types and

kinds, contract rights, licenses and permits, contracts and agreements, privileges of any and all

kinds, and any and all other property and rights of the Debtor and the Estate, including any and

all Avoidance Claims and Causes of Action and any and all defenses, which could be exercised

by or on behalf of a chapter 11 trustee or a debtor in possession.

1.13 “Authority” shall mean the Pennsylvania Economic Development Financing

Authority.

1.14 “Avoidance Claim” shall mean all rights, claims, causes of action, avoiding

powers, suits and proceedings of or brought by or which may be asserted by a debtor in

possession or a person under chapter 5 of the Bankruptcy Code, including by way of illustration

and not limitation, under Sections 510, 541, 544, 547, 548, 549, 550, 553 and 554 of the

Bankruptcy Code, together with any claims, rights, remedies or demands that may be asserted by

a creditor or representative of creditors under similar applicable state or other laws, and claims in

the nature of substantive consolidation, successor liability, veil piercing, or alter-ego.

1.15 “Bankruptcy Administrator” shall mean the office of the United States

Bankruptcy Administrator for the Western District of North Carolina.

1.16 “Bankruptcy Code” shall mean title 11 of the United States Code, as amended

from time to time.



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1.17 “Bankruptcy Court” shall mean the United States Bankruptcy Court for the

Western District of North Carolina, Charlotte Division; having jurisdiction over the Chapter 11

Case, or if such court ceases to exercise jurisdiction over the Chapter 11 Case, such other court

having jurisdiction under title 28 of the United States Code over the Chapter 11 Case.

1.18 “Bankruptcy Rules” shall mean the Federal Rules of Bankruptcy Procedure, the

Federal Rules of Civil Procedure, and the Local Rules of the Bankruptcy Court, in each case as

amended from time to time during the Chapter 11 Case.

1.19 “Board of Control” shall mean the board of directors, the equivalent thereof, or

the person(s) serving in a substantially equivalent capacity of the Debtor, a Debtor Subsidiary or

a Reorganized Company, as the case may be, as it may exist from time to time.

1.20 “Bond Issuer” shall mean the Authority in its capacities as Senior Bond Issuer

and Junior Bond Issuer.

1.21 “Bondholders” shall mean the Senior Bondholders and the Junior Bondholders.

1.22 “Bonds” shall mean the Senior Bonds and the Junior Bonds.

1.23 “Business Day” shall mean any day that is not a Saturday, Sunday or “legal

holiday” as defined in Bankruptcy Rule 9006(a).

1.24 “Cash” shall mean legal tender of the United States of America, cash equivalents,

and readily marketable securities or instruments, including but not limited to, bank deposits,

accounts, certified or cashier’s checks, timed certificates of deposit issued by any bank,

commercial paper, and readily marketable direct obligations of the United States of America or

agencies or instrumentalities thereof.

1.25 “Cash Collateral Order” shall mean that certain Final Order Regarding Use of

Cash Collateral and Adequate Protection, entered by the Bankruptcy Court in the Chapter 11



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Case as Docket No. 81, as the same may be amended, supplemented, restated or modified from

time to time.

1.26 “Causes of Action” shall mean, without limitation, any and all of the Debtor’s,

Debtor in Possession’s, each Debtor Subsidiary’s and the Estate’s actions, causes of action,

rights, suits, claims, accounts, debts, sums of money, damages, judgments, claims and demands,

actions, defenses, offsets, powers (including all police, regulatory, and enforcement powers and

actions that may be taken), privileges, licenses, controversies, agreements, promises, rights to

legal remedies, rights to equitable remedies, rights to payment and claims, whatsoever, whether

known or unknown, suspected or unsuspected, whether arising prior to, on or after the Petition

Date, in contract or tort, in law, equity or otherwise, whether or not reduced to judgment,

liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, secured,

unsecured and whether asserted or assertable, accruing to and in favor of the Debtor, a Debtor

Subsidiary or Debtor in Possession pursuant to the Bankruptcy Code or any applicable statute or

law or legal theory. For avoidance of doubt, Causes of Action include, but are in no way limited

to (a) rights of setoff, counterclaim or recoupment, and claims on contracts or for breaches of

duties imposed by law, (b) claims pursuant to Section 362 of the Bankruptcy Code, (c) such

claims and defenses as fraud, mistake, duress, and usury, (d) all Avoidance Claims, (e) all claims

and rights of action described or listed or set forth in the Plan Supplement, entitled “Retained

Claims and Causes of Action”; and (f) all Causes of Action that are assertable by or may be

directly or derivatively asserted by the Debtor, a Debtor Subsidiary, the Estate, the Reorganized

Companies, or a representative of the Estate on behalf of Creditors of the Debtor, a Debtor

Subsidiary or the Estate.



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CHAR2\1462268v9

1.27 “Chapter 11 Case” shall mean the chapter 11 case of the Debtor pending before

the Bankruptcy Court assigned Case No. 11-33095.

1.28 “Claim” shall mean a claim (as defined in Section 101(5) of the Bankruptcy

Code) against the Debtor, its Assets, a Debtor Subsidiary or its Assets, including any right to: (i)

payment from the Debtor, whether or not such right is reduced to judgment, liquidated,

unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,

secured or unsecured; or (ii) an equitable remedy for breach of performance if such breach gives

rise to a right to payment from the Debtor, whether or not such right to an equitable remedy is

reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,

undisputed, legal, equitable, secured or unsecured.

1.29 “Claimant” or “Creditor” shall mean the holder of a Claim, together with any

predecessor or successor in interest with respect to such Claim.

1.30 “Class” shall mean any group of Claims or Interests classified together by this

Plan pursuant to Section 1122 of the Bankruptcy Code.

1.31 “Cogentrix” shall mean Cogentrix Energy, LLC, a North Carolina limited liability

company.

1.32 “Collateral Agent” shall mean U.S. Bank National Association, not individually

but as successor collateral agent, its successors and assigns.

1.33 “Confirmation Date” shall mean the date of entry on the docket of the Bankruptcy

Court of the Confirmation Order.

1.34 “Confirmation Hearing” shall mean the hearing before the Bankruptcy Court

regarding confirmation of this Plan and related matters under Section 1128 of the Bankruptcy

Code.



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CHAR2\1462268v9

1.35 “Confirmation Order” shall mean the order signed by the Bankruptcy Court

confirming this Plan.

1.36 “Convenience Class Claim” shall mean each Allowed General Unsecured Claim

with an Allowed Amount less than $15,000.00

1.37 “Cramdown” shall mean the confirmation of this Plan pursuant to Section

1129(b) of the Bankruptcy Code notwithstanding any rejection by an Impaired Class or Classes

of holders of Claims or Interests of this Plan.

1.38 “Cure Payment” shall mean a payment of Cash by the Debtor or a Reorganized

Company as necessary to cure a monetary default in accordance with the terms on an executory

contract or unexpired lease or otherwise permit the Debtor or a Reorganized Company to assume

such executory contract or unexpired lease under Section 365 of the Bankruptcy Code.

Notwithstanding the above, the Horwith Arrearage is not a Cure Payment for purposes hereunder

and shall be treated as described in Class 5 of the Plan.

1.39 “Debtor” shall mean Northampton Generating Company, L.P., a Delaware limited

partnership.

1.40 “Debtor in Possession” shall mean the Debtor between the Petition Date and the

Effective Date.

1.41 “Debtor Subsidiary” shall mean, individually, Northampton Fuel and

Northampton Water.

1.42 “Debtor Subsidiary Claim” shall mean a Claim against a Debtor Subsidiary that

is not otherwise specifically assigned to another Class in this Plan.

1.43 “Disallowed” shall mean a Claim or Interest that is either (a) disallowed in its

entirety in this Plan or by a Final Order of the Bankruptcy Court or another court of competent



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jurisdiction or (b) scheduled at zero or as contingent, disputed or unliquidated and as to which no

Proof of Claim has been timely filed or deemed timely filed with the Bankruptcy Court pursuant

to either the Bankruptcy Code or any order of the Bankruptcy Court; or (c) not scheduled by the

Debtor in the Schedules and as to which no proof of claim or request for payment has been

timely filed, or is not deemed timely filed with the Bankruptcy Court pursuant to either the

Bankruptcy Code or any order of the Bankruptcy Court, or (d) a Fee Claim for which no request

for payment has been timely filed by the applicable deadline pursuant to the Plan or deemed

timely filed with the Bankruptcy Court pursuant to either the Bankruptcy Code or any order of

the Bankruptcy Court.

1.44 “Disclosure Statement” means the Disclosure Statement Filed in connection with

the Plan, as modified or amended.

1.45 “Disputed Claim” shall mean any Claim that is not an Allowed Claim. In the

event that any portion of a Claim is not an Allowed Claim, such Claim in its entirety shall be

deemed to constitute a Disputed Claim for purposes of distribution under this Plan until entry of

a Final Order fixing and determining the Allowed Amount thereof. Without limiting any of the

foregoing, a Claim that is the subject of or part of a pending objection, motion, complaint,

counterclaim, setoff, recoupment, Avoidance Claim, litigation claim or defense, or any other

proceeding seeking to disallow, subordinate or estimate such Claim, shall be deemed a Disputed

Claim, unless the Plan or the Confirmation Order expressly provides otherwise.

1.46 “Distribution Date” shall mean (a) when used with respect to an Allowed Claim

(other than a Senior Bond Claim), the date which is either (i) the Effective Date, or as soon as

practicable thereafter, or (ii) the next Quarterly Payment Date after the date upon which the

Claim becomes Allowed, unless the Claim becomes Allowed within 15 Business Days before the



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next Quarterly Payment Date, in which case the Distribution Date shall be the next succeeding

Quarterly Payment Date, or (b) with respect to a Senior Bond Claim, the Effective Date.

1.47 “Distribution Record Date” shall mean the Confirmation Date, unless a different

date is designated by the Confirmation Order or other order of the Bankruptcy Court.

1.48 “Effective Date” shall mean a Business Day on which (i) all of the conditions

precedent to the effectiveness of the Plan specified in the Plan have been satisfied or waived in

accordance with the Plan, (ii) the distributions contemplated under the Plan for Allowed Claims

as of that date have been made, and which is specified by the Debtor as the “Effective Date” in

the notice of occurrence of the Effective Date Filed in the record of the Bankruptcy Court

pursuant to Section 11.2 of the Plan. Subject to the entry of the Confirmation Order, the Debtor

shall, in consultation with the Collateral Agent, use commercially reasonable efforts to cause the

occurrence of the Effective Date as soon as is practicable.

1.49 “EIF Calypsyo” shall mean EIF Calypso, LLC, a Delaware limited liability

company.

1.50 “Entity” shall mean an individual, corporation, limited liability company,

partnership, association, joint stock company, joint venture, estate, trust, unincorporated

organization, government, governmental unit (as defined in the Bankruptcy Code) or any

political subdivision thereof, or other person including the Bankruptcy Administrator.

1.51 “Equity Contribution” shall mean the Cash consideration funded by the

Reinvesting Beneficial Owner in an amount of approximately $10,000,000.00 which amount

shall be sufficient to fund the costs and expenses of this Plan and shall provide the Reorganized

Companies Cash on hand, after accounting for payments made or reserved on the Effective Date



13

CHAR2\1462268v9

in an amount of not less than the sum of (i) $3,500,000.00 plus, (ii) the Horwith Deferral

Amount.

1.52 “Estate” shall mean the estate of the Debtor, as defined in Section 541 of the

Bankruptcy Code.

1.53 “Facility” shall mean the 112 megawatt electric generation facility located on

approximately 35 acres of leased land in the Borough of Northampton and Allen Township,

County of Northampton, Pennsylvania.

1.54 “Fee Claim” shall mean all claims subject to Bankruptcy Court approval under

Section 1129(a)(4) of the Bankruptcy Code, including claims of Professionals, whether or not

Administrative Expense Claims, for the payment of fees and expenses incurred since the Petition

Date in connection with the Estate or Assets.

1.55 “Fee Order” shall mean the Bankruptcy Court’s Administrative Order, Pursuant

To Sections 331 and 1005 of the Bankruptcy Code, Establishing Procedures for Interim

Compensation and Reimbursement of Expenses of Professionals entered January 11, 2012

[Docket No. 75], in the Chapter 11 Case as the same may have been amended or supplemented

from time to time.

1.56 “File” or “Filed” means properly filed with the clerk of court of the Bankruptcy

Court in the Chapter 11 Case, as reflected on the official docket of the clerk of court of the

Bankruptcy Court for the Chapter 11 Case.

1.57 “Final Order” means an order or judgment of the Bankruptcy Court or other court

of competent jurisdiction (a) which has become final for purposes of 28 U.S.C. § 158 or such

analogous law or rule in the case of an order of a state court and (b)(i) as to which the time to

appeal, petition for certiorari, or move for reargument or rehearing has expired and as to which



14

CHAR2\1462268v9

no appeal, petition for certiorari, or other proceedings for reargument or rehearing shall then be

pending or as to which any right to appeal, petition for certiorari, reargue, or rehear shall have

been waived in writing in form and substance satisfactory to the Debtor (or, if after the Effective

Date, by the Reorganized Debtor) or, (ii) in the event that an appeal, writ of certiorari, or

reargument or rehearing thereof has been sought, (x) such order or judgment of the Bankruptcy

Court or other applicable court shall have been affirmed by the highest court to which such order

or judgment was appealed with no modifications thereof, or (y) certiorari, reargument or

rehearing has been denied, and (z) the time to take any further appeal, petition for certiorari or

move for reargument or rehearing shall have expired with no such further appeal, petition for

certiorari or motion for reargument or rehearing having been sought or pending; provided,

however, that the possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure,

or Bankruptcy Rule 9024 or other analogous rules of state courts governing procedures in cases

before other courts may be filed with respect to such order or judgment shall not render such

order or judgment not to be a Final Order.

1.58 “Fuel Service Agreement” shall mean that certain Fuel Services Agreement dated

as of January 1, 1996 by and between USOSC and Northampton Fuel (as may be amended from

time to time).

1.59 “General Partnership Interests” shall mean the general partnership interests in

the Reorganized Debtor, which shall comprise 50 percent of the total partnership interests in the

Reorganized Debtor, to be issued to the General Partnership Interests Holder on the Effective

Date.

1.60 “General Partnership Interests Holder” shall mean EIF Northampton GP, LLC, a

Delaware limited liability company and a wholly owned subsidiary of the Reinvesting Beneficial



15

CHAR2\1462268v9

Owner, which shall receive the General Partnership Interests in the Reorganized Debtor on the

Effective Date.

1.61 “General Unsecured Claim” shall mean any Claim that is not an Administrative

Expense Claim, Affiliate Administrative Claim, Affiliate Services Claim, Fee Claim, Priority

Claim, Secured Claim, Senior Bond Claim, Junior Bond Claim, Horwith Claim, Debtor

Subsidiary Claim, Intercompany Claim or a Claim otherwise specifically classified in another

class in this Plan, and, for the avoidance of doubt, shall include any unsecured deficiency claim

of the holder of a Secured Claim determined pursuant to Section 506(a) of the Bankruptcy Code

or otherwise.

1.62 “Horwith” shall mean Horwith Leasing Co., Inc., and Frank and Geraldine

Horwith, and their successors and assigns with respect to the Horwith Lease, if any.

1.63 “Horwith Arrearage” shall mean collectively, (i) the unpaid, subordinated

prepetition rent arrearage on the Horwith Lease, plus; (ii) the unpaid, subordinated postpetition

rent accrued from the Petition Date through and including the Effective Date.

1.64 “Horwith Claim” shall mean any Allowed Claim of Horwith arising under or

pursuant to the Horwith Lease or otherwise whether arising prior to or after the Petition Date.

1.65 “Horwith Consent” shall mean that certain Lessor Consent and Estoppel

Certificate executed by Horwith with respect to the Horwith Lease and dated as of January 21,

1994.

1.66 “Horwith Deferral Amount” shall mean the portion of the Horwith Arrearage that

is not paid on the Effective Date, which in any event, shall be no less than $700,000.00.

1.67 “Horwith Lease” shall mean that certain Ground Lease dated September 15,

1993, by and between Debtor and Horwith (as amended from time to time).



16

CHAR2\1462268v9

1.68 “Impaired” shall mean, with respect to any Class, that such Class is “impaired”

under the Plan within the meaning of Section 1124 of the Bankruptcy Code.

1.69 “Intercompany Claim” shall mean any Claim against a Northampton Party by any

other Northampton Party, including any Intercompany Post Petition Claim.

1.70 “Intercompany Post-Petition Claim” shall mean any Claim against a Northampton

Party by any other Northampton Party arising or accruing on or after the Petition Date.

1.71 “Intercreditor Agreements” shall mean that certain Senior Intercreditor

Agreement, Junior Intercreditor Agreement and Issuer Intercreditor Agreement.

1.72 “Interests” shall mean, collectively, any and all general partnership interests and

“equity securities” (as defined in Section 101(16) of the Bankruptcy Code) in the Debtor or a

Debtor Subsidiary.

1.73 “IRC” shall mean the Internal Revenue Code of 1986, as amended, and any

applicable regulations (including temporary and proposed regulations) promulgated thereunder

by the United States Treasury Department.

1.74 “IRS” shall mean the United States Internal Revenue Service.

1.75 “Issuer Intercreditor Agreement” shall mean that certain Issuer Intercreditor

Agreement dated as of January 1, 1994, among, inter alia, the Bond Issuer, the Collateral Agent,

the Senior Bond Trustee and the Junior Bond Trustee.

1.76 “Junior Bond Claim” shall mean any Claim against the Debtor or a Debtor

Subsidiary based on the Junior Bonds, Junior Bond Indenture, Junior Bond Loan Agreement or

any other documents evidencing or securing the Junior Bonds or related obligations.



17

CHAR2\1462268v9

1.77 “Junior Bond Indenture” shall mean that certain Trust Indenture dated as of

January 1, 1994 (as amended from time to time), among the Junior Bond Issuer and the Junior

Bond Trustee for the benefit of the holders of the Junior Bonds.

1.78 “Junior Bond Issuer” means the Authority, in its capacity as issuer under the

Junior Bond Loan Agreement.

1.79 “Junior Bond Loan Agreement” shall mean that certain Loan Agreement dated

January 1, 1994, between Debtor and the Authority as Junior Bond Issuer.

1.80 “Junior Bond Trustee” shall mean Law Debenture Trust Company of New York,

not individually but as successor bond trustee pursuant to the Junior Bond Indenture, its

successors and assigns.

1.81 “Junior Bondholders” shall mean the holders of the Junior Bonds.

1.82 “Junior Bonds” shall mean the Resource Recovery Revenue Bonds (Northampton

Generating Project) Subordinated Tax-Exempt Series 1994 C in the original principal amount of

$27 million (together with such instruments into which such bonds are convertible) issued

pursuant to the Junior Bond Loan Agreement.

1.83 “Junior Intercreditor Agreement” shall mean that certain Junior Intercreditor

Agreement, dated as of January 1, 1994, among, inter alia, the Collateral Agent, the Senior Bond

Trustee, the Junior Bond Trustee.

1.84 “Lien” shall have the meaning set forth in Section 101(37) of the Bankruptcy

Code.

1.85 “Limited Partnership Interests” shall mean the limited partnership interests in the

Reorganized Debtor, which shall comprise 50 percent of the total partnership interests of the



18

CHAR2\1462268v9

Reorganized Debtor, to be issued to the Limited Partnership Interests Holder on the Effective

Date.

1.86 “Limited Partnership Interests Holder” shall mean EIF Northampton LP, LLC, a

Delaware limited liability company and a wholly owned subsidiary of the Reinvesting Beneficial

Owner, which shall receive the Limited Partnership Interests in the Reorganized Debtor on the

Effective Date.

1.87 “Met-Ed Allowed Administrative Claim” shall mean the Administrative Claim in

the amount of approximately $889,383.03 arising out of the Met-Ed Settlement Agreement.

1.88 “Met-Ed Settlement Agreement” shall mean that certain Settlement Agreement

entered into by Debtor and Metropolitan Edison Company on March 6, 2012, and approved

pursuant to the Met-Ed Settlement Order.

1.89 “Met-Ed Settlement Order” shall mean that certain Order Pursuant to Section 105

of the Bankruptcy Code and Rule 9019 of the Federal Rules of Bankruptcy Procedure Approving

Settlement Agreement Between Debtor and Metropolitan Edison Company entered on March 29,

2012 by the Bankruptcy Court [Docket No. 127].

1.90 “MSA” shall mean that certain Management Services Agreement dated December

15, 1993, by and between the Debtor and Power Service Company, LLC (f/k/a U.S. Generating

Company) (as amended from time to time).

1.91 “Northampton Fuel” shall mean Northampton Fuel Supply Company, Inc., a

Delaware Corporation.

1.92 “Northampton Fuel Management Agreements” shall mean (i) that certain

Technical Services Agreement dated as of December 28, 1995, by and between USOSC and

Northampton Fuel (as may be amended from time to time), (ii) that certain Fuel Services



19

CHAR2\1462268v9

Agreement dated as of January 1, 1996, by and between USOSC and Northampton Fuel (as may

be amended from time to time) (iii) all management agreements between PSC and any Debtor

Subsidiary, and (iv) all management agreements between USOSC and any Debtor Subsidiary.

1.93 “Northampton Fuel Note” shall mean that certain promissory note dated January

1, 1994 in the original amount of $33 million executed by Northampton Fuel for the benefit of

Debtor.

1.94 “Northampton Holdco” shall mean Northampton Holdco, LLC, a Delaware

limited liability company and owner of 100 percent of the membership interests of both of the

Northampton Partners.

1.95 “Northampton Parties” shall mean the Debtor and each Debtor Subsidiary. The

correlative term “Northampton Party” shall mean the Debtor or any Debtor Subsidiary.

1.96 “Northampton Partners” shall mean Cogentrix/Northampton, LLC, a Delaware

limited liability company, the 50 percent general partner of the Debtor, and Jaeger II LLC, a

Delaware limited liability company, the 50 percent limited partner of the Debtor.

1.97 “Northampton Water” shall mean Northampton Water Supply, Inc., a Delaware

Corporation.

1.98 “O&M Agreement” shall mean that certain Amended and Restated Operation and

Maintenance Agreement dated as of December 15, 1993, by and between the Debtor and U.S.

Operating Services Company, LLC. (as amended from time to time).

1.99 “Ordinary Course Professional Order” shall mean that certain Order Authorizing

Debtor to Retain, Employ and Compensate Certain Professionals Utilized by Debtor in the

Ordinary Course of Business entered on January 11, 2012 [Docket No. 74], in the Chapter 11

Case, as may have been amended of supplemented from time to time.



20

CHAR2\1462268v9

1.100 “Ordinary Course Professionals” shall mean the attorneys, consultants,

accountants and other professional retained by Debtor pursuant to the Ordinary Course

Professional Order.

1.101 “Other Secured Claim” shall mean a Secured Claim against the Debtor or a

Debtor Subsidiary, other than Secured Tax Claims, Senior Bond Claims and Junior Bond Claims.

1.102 “Petition Date” shall mean December 5, 2011.

1.103 “Plan” shall mean this Chapter 11 Plan of Reorganization in its present form or as

it may, from time to time, be modified, amended or supplemented in accordance with the terms

hereof, together with any exhibits and schedules thereto.

1.104 “Plan Documents” shall mean the Plan, the Plan Supplement, the Disclosure

Statement and all exhibits and schedules attached thereto, either in their present form or as each

may be amended, supplemented, or otherwise modified from time to time.

1.105 “Plan Supplement” means (i) the compilation of documents and forms of

documents, schedules, and exhibits to this Plan to be filed not less than ten days prior to the date

on which the Confirmation Hearing is commenced, including: a description of Retained Claims,

a schedule of executory contracts and unexpired leases to be rejected, the forms of new

management agreements to be effective on the Effective Date, the sources and uses associated

with the Plan, the forms of certain of the principal Amended Bond Documents and certain related

documents necessary to implement the terms of this Plan, and (ii) and amendments to these

documents filed before the Confirmation Hearing.

1.106 “PPA” shall mean that certain Power Purchase Agreement dated October 27,

1989, by and between Wheelabrator Northampton Energy Company Inc. and Metropolitan

Edison Company, as clarified by letter agreement dated November 7, 1989 (as amended from



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CHAR2\1462268v9

time to time), as assigned to the Debtor by an Agreement and Assignment of Power Purchase

Agreement dated May 29, 1991.

1.107 “PPL” shall mean PPL Electric Utilities Corporation, a Pennsylvania corporation.

1.108 “PPL Allowed Administrative Claim” shall mean the Allowed Administrative

Claim of PPL arising under the PPL Settlement Agreement, remaining outstanding and due as of

the Effective Date. To the extent any payment due under the PPL Settlement Agreement is not

yet due under the PPL Settlement Agreement as of the Effective Date, it shall be paid as and

when due.

1.109 “PPL Secured Claim” shall mean the Claim for the security deposit in the amount

of $94,600.00 held by PPL as of the Petition Date pursuant to the interconnection agreements.

1.110 “PPL Settlement Agreement” shall mean that certain Settlement Agreement

entered into by Debtor and PPL on March 28, 2012, and approved pursuant to the PPL

Settlement Order.

1.111 “PPL Settlement Order” shall mean that certain Order (i) Approving Settlement

Agreement Between Debtor and PPL Electric Utilities Corporation and (ii) Authorizing Entry

Into a New Interconnection Agreement entered on April 23, 2012 by the Bankruptcy Court

[Docket No. 145].

1.112 “Priority Claim” shall mean any Claim entitled to priority pursuant to

Section 507(a)(1), (a)(4), (a)(5), (a)(6) or (a)(7) of the Bankruptcy Code, other than Priority Tax

Claims.

1.113 “Priority Tax Claim” shall mean any Claim entitled to priority pursuant to

Section 507(a)(8) of the Bankruptcy Code.



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CHAR2\1462268v9

1.114 “Project Coordination Agreement” shall mean that certain Project Coordination

and Master Funding Agreement dated as of January 1, 1994, by and between the Debtor, the

Senior Bond Trustee, the Junior Bond Trustee, the Collateral Agent and others.

1.115 “Professional” shall mean any professional (a) retained by the Debtor in the

Chapter 11 Case or (b) to be compensated pursuant to Sections 327, 328, 330, 503(b), 506 or

1103 of the Bankruptcy Code, but specifically excluding the professionals retained by or

providing professional services for the Collateral Agent, the Senior Bond Trustee, the Junior

Bond Trustee or the Bondholders.

1.116 “PSC” shall mean Power Service Company, LLC, a Delaware limited liability

company.

1.117 “Quarterly Payment Date” shall mean the last day of each March, June,

September and December following the Effective Date (but if such date is not a Business Day,

then on the next Business Day).

1.118 “Reinvesting Beneficial Owner” shall mean EIF Northampton, LLC, a Delaware

limited liability company and affiliate of EIF Calypso.

1.119 “Released Parties” shall mean the Debtor, each Debtor Subsidiary, the Debtor in

Possession, the Reorganized Companies, the Northampton Partners, Northampton Holdco, EIF

Calypso, Cogentrix, the Collateral Agent, the Senior Bond Trustee, the Junior Bond Trustee, the

Bondholders, their respective financial advisors, attorneys and accountants and other

professionals, if any, and all past, present and future officers, directors, managing directors,

servants, shareholders, and, to the extent they are natural persons, all members, managers,

partners, employees, agents, representatives and consultants thereof.



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CHAR2\1462268v9

1.120 “Reorganized Companies” shall mean, collectively, the Debtor and each Debtor

Subsidiary upon the occurrence of and from and after the Effective Date. The correlative term

“Reorganized Company” shall mean the Debtor or a Debtor Subsidiary upon the occurrence of

and from and after the Effective Date.

1.121 “Reorganized Debtor” shall mean the Debtor upon the occurrence of and from

and after the Effective Date.

1.122 “Retained Claims” shall mean all claims and rights of action described or listed or

set forth in the Plan Supplement.

1.123 “Schedules” shall mean the schedules of assets and liabilities and the statement of

financial affairs filed by the Debtor as required by Section 521 of the Bankruptcy Code and

Bankruptcy Rule 1007, as amended or supplemented through the Confirmation Date.

1.124 “Secured Claim” shall mean any Allowed Claim of any Claimant (i) secured by a

Lien on the Debtor’s or a Debtor Subsidiary’s interest in any Assets as set forth in the Plan, or

(ii) entitled to setoff under Section 553 of the Bankruptcy Code, to the extent of (A) the value of

the Claimant’s interest in the Debtor’s or a Debtor Subsidiary’s interest in such property or (B)

the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the

Bankruptcy Code.

1.125 “Secured Tax Claim” shall mean any Claim in favor of a federal, state, parish,

county, local, or special governmental taxing authority, whether or not entitled to priority

pursuant to Section 507(a)(8) of the Bankruptcy Code, that is secured by a lien or other security

interest on any Assets of the Debtor or a Debtor Subsidiary.



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CHAR2\1462268v9

1.126 “Senior Bond Claim” shall mean any Claim against the Debtor or a Debtor

Subsidiary based on the Senior Bonds, Senior Bond Indenture, Senior Bond Loan Agreement or

any other document evidencing or securing the Senior Bonds or related obligations.

1.127 “Senior Bond Indenture” shall mean that certain Trust Indenture dated as of

January 1, 1994 (as amended from time to time), among the Senior Bond Issuer and the Senior

Bond Trustee for the benefit of the holders of the Senior Bonds.

1.128 “Senior Bond Issuer” means the Authority, in its capacity as issuer under the

Senior Bond Loan Agreement.

1.129 “Senior Bond Loan Agreement” shall mean that certain Loan Agreement dated

January 1, 1994, between Debtor and the Authority as bond issuer.

1.130 “Senior Bond Trustee” shall mean U.S. Bank National Association, not

individually but as successor bond trustee pursuant to the Senior Bond Indenture, its successors

and assigns.

1.131 “Senior Bondholders” shall mean the holders of the Senior Bonds.

1.132 “Senior Bonds” shall mean the Series A Bonds and the Series B Bonds.

1.133 “Senior Intercreditor Agreement” shall mean that certain Senior Intercreditor

Agreement, dated as of January 1, 1994, among, inter alia, the Senior Bond Trustee, the

Collateral Agent and the Junior Bond Trustee.

1.134 “Series A Bonds” shall mean the Senior Bond Issuer’s Resource Recovery

Revenue Bonds (Northampton Generating Project) Senior-Tax Exempt Series 1994 A Bonds in

the original principal amount of $153 million (together with such instruments into which such

bonds are convertible) issued pursuant to the Senior Bond Loan Agreement.



25

CHAR2\1462268v9

1.135 “Series B Bonds” shall mean the Senior Bond Issuer’s Resource Recovery

Revenue Bonds (Northampton Generating Project) Senior Taxable Convertible Series 1994 B in

the original principal amount of $25 million (together with such instruments into which such

bonds are convertible) issued pursuant to the Senior Bond Loan Agreement.

1.136 “Successor Authority” shall mean the Northampton County Industrial

Development Authority or such other authority as shall be selected by the Debtor and the

Collateral Agent for the reissuance of the Amended Bonds.

1.137 “Successor Bond Issuer” shall mean the Successor Authority, in its capacity as

successor issuer under the Amended Bond Indenture and the Amended Bond Loan Agreement.

1.138 “Successor Bond Trustee” shall mean U.S. Bank National Association, not

individually but as bond trustee pursuant to the Amended Bond Indenture.

1.139 “Successor Bondholders” shall mean the holders of the Senior Bonds that shall

exchange the Senior Bonds pro rata for the Amended Bonds.

1.140 “Successor Collateral Agent” shall mean U.S. Bank National Association, not

individually but as collateral agent appointed pursuant to the Amended Bond Loan Agreement.

1.141 “TSA” shall mean collectively that certain Transmission Service Agreement dated

January 28, 1992, by and between Debtor and PPL Electric Utilities Corporation (as amended

from time to time) providing interconnection service for 110 MW and a certain Supplemental

Output Interconnection Agreement dated April 30, 2001 (as amended from time to time).

1.142 “Unimpaired” shall mean, with respect to any Class, that such Class is not

Impaired.

1.143 “Unliquidated Claim” shall mean: (i) any Claim, the amount of liability for

which has not been fixed, whether pursuant to agreement, applicable law, or otherwise, as of the



26

CHAR2\1462268v9

date on which such Claim is sought to be fixed, or (ii) any Claim for which no Allowed Claim

has been determined.

1.144 “USOSC” shall mean U.S. Operating Services Company, a Delaware corporation.

ARTICLE 2

CONSOLIDATION OF DEBTOR AND DEBTOR SUBSIDIARIES

Subject to the occurrence of the Effective Date and effective on the Effective Date, the

Debtor and each Debtor Subsidiary shall be substantively consolidated for all of those purposes

and actions associated with confirmation and consummation of the Plan. On and after the

Effective Date, (a) all assets and liabilities of the Debtor and each Debtor Subsidiary shall be

treated as though they were merged into the Estate solely for purposes of the Plan, (b) no

distributions shall be made under the Plan on account of Intercompany Claims or Interests, (c)

for all purposes associated with confirmation, the estates of the Debtor and each Debtor

Subsidiary shall be deemed to be one consolidated estate for the Debtor, and (d) except as

otherwise provided in the Plan, each and every Claim filed, to be filed in the Chapter 11 Case or

otherwise asserted against the Debtor or any Debtor Subsidiary shall be deemed filed against the

Debtor, and shall be Claims against and obligations of the Debtor. Substantive consolidation

shall not affect: (a) the legal and organizational structure of the Debtor and each Debtor

Subsidiary; or (b) distributions from any insurance policies or proceeds of such policies.

ARTICLE 3

PROVISIONS FOR PAYMENT OF ADMINISTRATIVE EXPENSES

3.1 Payment of Allowed Administrative Expense Claims.

3.1.1 Allowed Administrative Expense Claims.

Subject to Sections 3.1.2, 3.1.4 and 3.1.5 below, each Allowed Administrative

Expense Claim shall be paid in full, in Cash, by the Reorganized Companies on the Effective



27

CHAR2\1462268v9

Date or upon such other terms as may be agreed upon by the holder of such Allowed

Administrative Expense Claim and the Reorganized Companies or otherwise established

pursuant to an order of the Bankruptcy Court; provided, however, that Administrative Expense

Claims representing liabilities incurred in the ordinary course of business by the Debtor or a

Debtor Subsidiary on or after the Petition Date shall be paid by the Reorganized Companies in

accordance with the terms and conditions of the particular transactions, the applicable non-

bankruptcy law, and any agreements relating thereto or any order of the Bankruptcy Court. For

the avoidance of doubt, the Met-Ed Allowed Administrative Claim and PPL Allowed

Administrative Claim are Allowed Administrative Expense Claims. For the further avoidance of

doubt, Horwith Claims or claims by any affiliate, including Affiliate Administrative Expense

Claims and Affiliate Service Claims are assigned to the Classes described in and treated as

provided in Sections 4.5, 4.9 and 4.10, respectively

3.1.2 Compensation of Professionals.

All Professionals, other than the Professionals retained by or providing

professional services for the Collateral Agent, Senior Bond Trustee, Junior Bond Trustee,

Bondholders, Debtor Subsidiaries or Ordinary Course Professionals (who will not be required to

File final applications for allowance of compensation), who are seeking Fee Claims or who have

been compensated from the Estate of the Debtor during the Chapter 11 Case, or who are seeking

Fee Claims from the Estate of the Debtor or from the Reorganized Debtor for services rendered

or reimbursement of expenses incurred from the Petition Date through and including the

Effective Date, pursuant to Sections 327, 328, 330, 503(b), 506 or 1103 of the Bankruptcy Code,

shall (a) File final applications for allowance of compensation for services and reimbursement of

expenses incurred from the Petition Date through the Effective Date by no later than the date that



28

CHAR2\1462268v9

is 45 days after the Effective Date, and (b) if granted such an award by the Bankruptcy Court, be

paid in full by the Reorganized Debtor or as otherwise provided in this Plan in such amounts as

are Allowed by Final Order of the Bankruptcy Court (i) on the date such Administrative Expense

Claim becomes an Allowed Administrative Expense Claim, or as soon thereafter as is

practicable, or (ii) when mutually agreed upon by such holder of an Administrative Expense

Claim and the Reorganized Debtor. Professionals retained by or providing professional services

for the Collateral Agent, Senior Bond Trustee, Junior Bond Trustee and Bondholders shall have

any unpaid fees and expense reimbursements paid by the Debtor pursuant to the Cash Collateral

Orders entered by the Bankruptcy Court in the ordinary course of its business and as set forth in

Section 3.1.4 herein. Professionals retained by the Debtor Subsidiaries shall be paid in the

ordinary course by the Debtor Subsidiaries. Ordinary Course Professionals shall have their

unpaid fees and expenses paid by the Debtor or the Reorganized Debtor pursuant to the Ordinary

Course Professional Order. Any holder of a Fee Claim that does not assert such Claim in

accordance with the Fee Order and this Section shall have its Claim deemed Disallowed

under this Plan and be forever barred from asserting such Claim against any of the Debtor,

the Estate, the Reorganized Companies, and the Assets. Any such Claim and the holder

thereof shall be enjoined from commencing or continuing any action, employment of

process or act to collect, offset, recoup or recover such Claim.

3.1.3 Bar Date for Filing Administrative Expense Claims. Except with respect

to any Administrative Expense Claims for which a different deadline is established by or different

procedures are expressly provided in this Article 3, any Administrative Expense Claims must be

Filed no later than 30 days after the Effective Date or any such Administrative Expense Claim

is and shall be deemed to be forever barred and unenforceable against the Debtor,



29

CHAR2\1462268v9

Reorganized Companies, the Estate, and the Assets, and the holders of any such Claims are

barred from recovering any distributions under the Plan on account thereof.

3.1.4 Cash Collateral Adequate Protection Payments. Pursuant to the Cash

Collateral Orders, the Collateral Agent, Senior Bond Trustee and Junior Bond Trustee were

entitled to be paid certain adequate protection payments by the Debtor. In addition, the Collateral

Agent, the Senior Bond Trustee and the Junior Bond Trustee were deemed to be entitled to pay

their professionals from various cash reserves existing as of the Petition Date. Due to cash

constraints, the Debtor deferred certain adequate protection payments without objection. To the

extent those payments were actually paid by or on behalf of the Debtor or from said reserves,

such payments are ratified as proper in all respects. In addition, the Collateral Agent, Senior

Bond Trustee and Junior Bond Trustee may pay their professionals from reserves in the manner

set forth in the Cash Collateral Orders and as provided in Section 12.9 herein. Notwithstanding

the above, to the extent any adequate protection payments that were otherwise due and owing

under the Cash Collateral Orders were deferred without objection and remain unpaid as of the

Effective Date, those deferred adequate protection payments shall not be due and owing by the

Debtor or any Debtor Subsidiary and any payments arising therefrom shall be deemed waived by

the Collateral Agent, Senior Bond Trustee, and Junior Bond Trustee, as the case may be; provided

however, such waiver shall not affect the right of the Collateral Agent, Senior Bond Trustee and

Junior Bond Trustee to payment of their professionals from any reserves in the manner set forth in

the Cash Collateral Orders and in Section 12.9 herein.

3.1.5 Affiliate Administrative Claims and Intercompany Post-Petition Claims.

Affiliate Administrative Claims shall be Allowed and paid in part as provided in Section 4.10

herein and not paid as an Allowed Administrative Expense Claim as set forth in Section 3.1.1.



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CHAR2\1462268v9

Notwithstanding anything set forth above, Intercompany Post-Petition Claims shall not be

deemed to be Administrative Claims but shall be treated as set forth in Section 4.9 herein.

ARTICLE 4

CLASSIFICATION AND TREATMENTOF CLAIMS AND INTERESTS

4.1 Class 1. Priority Claims.

4.1.1 Classification.

Class 1 consists of all Priority Claims.

4.1.2 Treatment.

Each holder of a Priority Claim, if any, shall be paid the Allowed Amount of its

Allowed Priority Claim either (i) in full, in Cash, on the Distribution Date, or (ii) upon such other

less favorable terms as may be mutually agreed upon between the holder of an Allowed Priority

Claim and the Reorganized Debtor.

4.1.3 Impairment and Voting.

Class 1 is Unimpaired. The holders of the Allowed Priority Claims in Class 1 are

deemed to have voted to accept this Plan and, accordingly, their separate vote will not be

solicited.

4.2 Class 2. Secured Tax Claims.


Class 2 consists of all Allowed Secured Tax Claims.

4.2.2 Treatment.

Except to the extent that a holder of an Allowed Secured Tax Claim agrees to a

different treatment, each holder of an Allowed Secured Tax Claim, if any, shall be paid the



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CHAR2\1462268v9

unpaid amount of such Allowed Secured Tax Claim in full in Cash by the Debtor or Reorganized

Debtor on the Distribution Date.


Class 2 is Unimpaired. The holders of the Allowed Secured Claims in Class 2 are

deemed to have voted to accept this Plan and, accordingly, their separate vote will not be

solicited.

4.3 Class 3. Senior Bond Claims.


Class 3 consists of all Senior Bond Claims.

4.3.2 Treatment of Class 3 Senior Bond Claims

The Senior Bond Claims are Allowed Claims pursuant to the Cash Collateral

Order in the Allowed Amount of $73,441,496.67 and are Allowed as Allowed Claims in that

Allowed Amount for all purposes of this Plan. On the Effective Date, each Bondholder that is a

holder of Senior Bonds as of the Distribution Record Date shall be deemed to surrender and

exchange its Senior Bond for Amended Bonds pro rata, subject to rounding based on the

minimum denomination of the Amended Bonds as set forth in the Plan Supplement. Upon the

Effective Date, the Senior Bonds and the Senior Bond Loan Agreement shall be amended as

reflected in the Amended Bonds and the Amended Bond Loan Agreement. The Debtor shall

grant to the Successor Collateral Agent pursuant to the Amended Bond Documents a continuing

first priority security interest in all its assets, including, without limitation, a continuing first

priority security interest on assets previously encumbered in favor of or pledged to the

Collateral Agent pursuant to the Senior Bond Loan Agreement. The Debtor Subsidiaries shall

guarantee the obligations of the Amended Bonds and pledge interests and provide security in all



32

CHAR2\1462268v9

assets, including, without limitation, continuing security interests in the same manner and form

as existed prior to the Petition Date. All security interests in favor of or pledged to the

Collateral Agent or Senior Bond Trustee pursuant to the Senior Bond Loan Agreement,

guarantees thereof or any other prepetition document evidencing or securing the Senior Bonds

or Senior Bond Loan Agreement shall, without further action, secure the obligations of the

Amended Bonds and Amended Bond Loan Agreement. The Reorganized Companies, the

Successor Bond Issuer, the Successor Bond Trustee and the Successor Collateral Agent shall

execute and deliver the Amended Bond Documents and such other transaction documents as are

necessary in the judgment of the Debtor and Debtor Subsidiaries. The Confirmation Order shall

constitute approval of all such documents without any further action or formality. The

Amended Bond Documents and other documents executed by the Reorganized Companies, the

Successor Bond Issuer, the Successor Bond Trustee and the Successor Collateral Agent shall,

from and after the Effective Date, be binding and enforceable against the Reorganized

Companies (and any successors thereto). The Successor Bond Trustee and Successor Collateral

Agent will join in the Horwith Consent, as amended in accordance with Section 4.5.2.


Class 3 is Impaired by the Plan. The holders of Class 3 Claims are entitled to vote

to accept or reject the Plan.

4.4 Class 4. Junior Bond Claims.


Class 4 consists of all Junior Bond Claims.

4.4.2 Treatment.



33

CHAR2\1462268v9

The Junior Bond Claims are Allowed Claims pursuant to the Cash Collateral Order in the

Allowed Amount of $21,788,749.46 and are Allowed as Allowed Claims in that Allowed

Amount for all purposes of this Plan. On the Effective Date, each Bondholder that is a holder of

Junior Bonds as of the Distribution Record Date will receive its pro rata share (after payment or

reserve for the expenses and costs, including reasonable professional fees, of the Junior Bond

Trustee) of all reserve funds held for their benefit by the Junior Bond Trustee in full satisfaction

of their liens and obligations, including, without limitation, any guaranteed obligations of a

Debtor Subsidiary. On the Effective Date, the Junior Bonds, Junior Bond Indenture and the

Junior Bond Loan Agreement shall be extinguished, cancelled and discharged except as

otherwise provided in Section 7.8 of the Plan and all security interests granted for the benefit of

the Junior Bondholders pursuant to the Junior Bond Loan Agreement or otherwise against any of

the Reorganized Companies shall be promptly cancelled by the Collateral Agent or Junior Bond

Trustee, as applicable.


Class 4 is Impaired by the Plan. The holders of Class 4 Claims are entitled to vote

to accept or reject the Plan.

4.5 Class 5. Horwith Claim.


Class 5 consists of the Horwith Claim.

4.5.2 Treatment. Debtor shall assume the Horwith Lease on or before the

Effective Date. Any order approving assumption of the Horwith Lease shall provide for

customary provisions, conclusions and findings of fact under Section 365 of the Bankruptcy

Code, including, without limitation, that (i) as of the Effective Date, that there are no defaults of



34

CHAR2\1462268v9

the Debtor other than those that are to be cured pursuant to this Section 4.5.2 and (ii) the assumed

Horwith Lease constitutes legal, valid, binding and enforceable lease in accordance with the terms

thereof. Notwithstanding the above, the parties agree that with respect to the Horwith Arrearage,

the Reorganized Debtor shall pay (i) 50 percent of the Horwith Arrearage in full, in Cash, on the

Effective Date, (ii) the balance shall be paid in 36 monthly installments as an increase in rentals

due under the Horwith Lease commencing on the first day of the month following the Effective

Date, and (iii) the Horwith Consent shall be amended to, inter alia, provide for a moratorium on

subordination for a period of three years from the Effective Date and shall be for the benefit of the

Successor Bond Trustee and the Successor Collateral Agent on behalf of the Amended Bonds.

Horwith will join in the Horwith Consent, as amended in accordance with this Section 4.5.2. The

form of the Horwith Consent, as amended, shall be reasonably acceptable to Horwith, Debtor, the

Collateral Agent and the Reinvesting Beneficial Owner and set forth in the Plan Supplement.


Class 5 is Impaired. The holders of the Horwith Claim are entitled to vote to

accept or reject the Plan.

4.6 Class 6. Convenience Class Claims.


Class 6 consists of all Convenience Class Claims against the Debtor.

4.6.2 Treatment.

Each holder of an Allowed Class 6 Convenience Class Claim will be paid 100

percent of its Allowed Claim in cash on the Effective date.




35

CHAR2\1462268v9

Class 6 is Impaired. The holders of Class 6 Claims are entitled to vote to accept or

reject the Plan.

4.7 Class 7. General Unsecured Claims.


Class 7 consists of all General Unsecured Claims.

4.7.2 Treatment.

All Class 7 Claims shall receive nothing and shall be discharged as of the Effective

Date.


Class 7 is Impaired. However, the holders of Class 7 Claims are not entitled to

vote to accept or reject the Plan pursuant to section 1126(g) of the Bankruptcy Code and their

votes will not be solicited. The holders of Class 7 Claims are deemed to reject the Plan.

4.8 Class 8. Debtor Subsidiary Claims.


Class 8 consists of all Claims against either Northampton Fuel or Northampton

Water except for (i) any Affiliate Administrative Claims and Affiliate Services Claims (which

shall be treated for all purposes as Claims in Class 10), (ii) any claim arising from a guaranty by

any Debtor Subsidiary of the Senior Bonds, Senior Bond Indenture or Senior Bond Loan

Agreement (which shall be treated for all purposes as Claims in Class 3) or (iii) any Claim

arising from a guaranty by any Debtor Subsidiary of the Junior Bonds, Junior Bond Indenture, or

Junior Bond Loan Agreement (which shall be treated for all purposes as Claims in Class 4).

4.8.2 Treatment.



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CHAR2\1462268v9

Each holder of a Class 8 Claim shall be paid by the Debtor Subsidiaries in the

ordinary course.


Class 8 is Unimpaired. The holders of the Claims in Class 8 are deemed to have

voted to accept this Plan and, accordingly, their separate vote will not be solicited. Further, no

notice of the Plan or Disclosure Statement shall be required to be given to the members of Class

8.

4.9 Class 9. Intercompany Claims.


Class 9 consists of all Intercompany Claims.

4.9.2 Treatment.

On the Effective Date, each Allowed Intercompany Claim held by Northampton

Fuel against the Debtor shall be offset against the Northampton Fuel Note. After the Effective

Date, the Northampton Fuel Note shall continue to be a payable by Northampton Fuel to the

Debtor in the adjusted principal amount after the offset. Any other Allowed Intercompany

Claim held by a Debtor Subsidiary against the Debtor shall receive nothing on account of such

Allowed Intercompany Claim and such Allowed Intercompany Claim shall be discharged as of

the Effective Date.


Class 9 is Impaired. However, the holders of Class 9 Claims are not entitled to

vote to accept or reject the Plan pursuant to section 1126(g) of the Bankruptcy Code and their

votes will not be solicited. The holders of Class 9 Claims are deemed to reject the Plan.

4.10 Class 10. Affiliate Service Claims and Affiliate Administrative Claims.



37

CHAR2\1462268v9


Class 10 consists of all Affiliate Service Claims and Affiliate Administrative

Claims.

4.10.2 Treatment.

On the Effective Date, the holders of Class 10 Claims shall receive the aggregate

sum of $2,880,860 in Cash in full settlement of their claims. The Cash payment shall be paid in

its entirety to PSC, for the benefit of PSC and USOSC. In consideration of the compromise of

these Claims, the Debtor agrees (i) to waive any Claims it may have against Cogentrix or EIF

Calypsyo for reimbursement of amounts paid after the Petition Date for services rendered by

PSC or USOSC or their subcontractors, and (ii) to pay as and when due to an appropriate

disbursing Entity all amounts originally owing to PSC and USOSC as pass-through charges for

employee payroll, fringe benefits and incentive compensation relating to employees of

subcontractors to PSC and USOSC who have provided labor and management services to the

Debtor and the Debtor Subsidiaries.


Class 10 is Impaired. The holders of Claim 10 Interests are entitled to vote to

accept or reject the Plan.

4.11 Class 11. Partnership Interests.


Class 11 consists of the Interests in the Debtor.

4.11.2 Treatment.

On the Effective Date, the Interests in the Debtor shall be cancelled.




38

CHAR2\1462268v9

Class 11 is Impaired. The holders of Claim 11 Interests are not entitled to vote to

accept or reject the Plan and their votes will not be solicited.

4.12 Class 12. Interests in Debtor Subsidiaries.


Class 12 consists of the Debtor’s Interests in the Debtor Subsidiaries.

4.12.2 Treatment.

The Debtor shall retain its Interests in the Debtor Subsidiaries under this Plan and

such Interests will be vested in the Reorganized Debtor pursuant to the provisions of this Plan.


Class 12 is Unimpaired. The Debtor is deemed to have voted to accept this Plan

and, accordingly, its separate vote will not be solicited.

ARTICLE 5

ACCEPTANCE OR REJECTION OF THE PLAN

5.1 Impaired Classes Vote. In accordance with Section 1126(c) of the Bankruptcy

Code and except as provided in Section 1126(e) of the Bankruptcy Code, an impaired Class of

Claims shall have accepted this Plan if this Plan is accepted by the holders of at least two-thirds

(⅔) in dollar amount and more than one-half (½) in number of the Allowed Claims of such Class

that have timely and properly voted to accept or reject this Plan.

5.2 Presumed Acceptance of the Plan. Classes 1, 2, 8, and 12 are Unimpaired under

this Plan and are, therefore, conclusively presumed to have accepted this Plan pursuant to section

1126(f) of the Bankruptcy Code.

5.3 Presumed Rejection of the Plan. Classes 7, and 11 are not entitled to receive or

retain any property under this Plan and are, therefore, conclusively presumed to have rejected

this Plan pursuant to section 1126(g) of the Bankruptcy Code.



39

CHAR2\1462268v9

5.4 Voting Class. Classes 3, 4, 5, 6 and 10 are Impaired, and the holders of Claims in

those Classes are entitled to vote on the Plan.

5.5 Nonconsensual Confirmation. With respect to any Impaired Class, including

any Class of Claims or Interests created pursuant to amendments or modifications to this Plan,

that does not accept the Plan, the Debtor will request that the Bankruptcy Court confirm this Plan

by Cramdown with respect to any such non-accepting Class or Classes at the Confirmation

Hearing, and the filing of this Plan shall constitute a motion for such relief.

ARTICLE 6

EXECUTORY CONTRACTS AND UNEXPIRED LEASES

6.1 Assumption. Unless otherwise set forth in this Plan, each executory contract or

unexpired lease of the Debtor and each Debtor Subsidiary that has not expired by its own terms

before the Effective Date or previously been assumed by the Debtor in Possession pursuant to an

order of the Bankruptcy Court, shall be assumed as of the Effective Date pursuant to Sections

365 and 1123 of the Bankruptcy Code, except for any executory contract or unexpired lease (i)

that is listed on a “Schedule of Executory Contracts and Unexpired Leases to be Rejected” (to be

Filed as part of the Plan Supplement), (ii) that has been previously rejected by the Debtor in

Possession pursuant to an order of the Bankruptcy Court, (iii) as to which a motion for rejection

of such executory contract or unexpired lease is Filed prior to the Effective Date, or (iv) added to

the “Schedule of Executory Contracts and Unexpired Leases to be Rejected” prior to the

Effective Date. Nothing in the Plan, any exhibit to the Plan, or any document executed or

delivered in connection with the Plan or any such exhibit creates any obligation or liability on the

part of the Debtor, a Debtor Subsidiary, the Reorganized Companies, or any other person or

entity that is not currently liable for such obligation, with respect to any executory contract or

unexpired lease except as may otherwise be provided in the Plan. For the avoidance of doubt,



40

CHAR2\1462268v9

the provisions of this Article 6 are, with respect to the Horwith Lease, qualified in their entirety

by specific provisions of the Plan that relate specifically to such agreement.

Except as otherwise set forth in this Plan, any executory contract or unexpired lease

assumed pursuant to the Plan shall be and hereby is assumed as of the Effective Date and shall be

fully enforceable in accordance with its terms thereof, shall remain subject to any subordination

or similar provisions set forth therein or in any related agreement and shall include all written

modifications, amendments, supplements of said executory contract or unexpired lease and, as

with respect to executory contracts or unexpired leases that relate to real property, shall include

all written agreements and leases appurtenant to the premises, including easements, licenses,

permits, rights, privileges, immunities, options, rights of first refusal, powers, uses, reciprocal

easements, and any other interests in real property or rights in rem related to such premises.

Listing a contract or lease on the “Schedule of Executory Contracts and Unexpired Leases to be

Rejected” is not deemed an admission by the Debtor, a Debtor Subsidiary or the Reorganized

Companies that such contract is an executory contract or unexpired lease or that the Debtor, a

Debtor Subsidiary or the Reorganized Companies has any liability thereunder.

The Debtor and each Debtor Subsidiary reserve the right at any time before the Effective

Date to amend the “Schedule of Executory Contracts and Unexpired Leases to be Rejected” to:

(a) delete any executory contract or unexpired lease listed on the “Schedule of Executory

Contracts and Unexpired Leases to be Rejected”, thus providing for its assumption under the

Plan, or (b) add any executory contract or unexpired lease to the “Schedule of Executory

Contracts and Unexpired Leases to be Rejected”, thus providing for its rejection under the Plan.

The Debtor and each Debtor Subsidiary shall provide notice of any such amendment of the

“Schedule of Executory Contracts and Unexpired Leases to be Rejected” to the party to the



41

CHAR2\1462268v9

affected executory contract and unexpired lease, to the Collateral Agent and its counsel, and to

the Bankruptcy Administrator.

6.2 Cure Payments, Compensation for Pecuniary Loss, and Adequate Assurance.

All Cure Payments or adequate assurance payments that are required to be paid or provided by

Section 365(b)(1)(A)-(C) of the Bankruptcy Code, unless disputed by the Debtor, shall be made

by the Reorganized Companies on the Effective Date. The Debtor and each Debtor

Subsidiary hereby give notice that there are no Cure Payments due with respect to any

executory contracts and unexpired leases to be assumed under the Plan. Any non-Debtor

party to any executory contract or unexpired lease to be assumed under the Plan that

objects to assumption of the executory contract or unexpired lease or believes that a Cure

Payment is due in connection with such assumption must file a written objection to the

assumption of such executory contract or unexpired lease with no Cure Payment and state

in the written objection the grounds for such objection and specifically set forth the amount

of any request for a Cure Payment by the deadline established by the Bankruptcy Court

for filing objections to confirmation of the Plan. Unless the non-debtor party to any executory

contract or unexpired lease to be assumed files and serves on the Debtor and its counsel an

objection to assumption of such executory contract or unexpired lease for any reason, or

asserting that a Cure Payment is required or owed in connection with such assumption, by the

deadline established by the Bankruptcy Court for filing objections to confirmation of the Plan,

then the executory contracts and unexpired leases shall be assumed, and any default then existing

in the executory contract and/or unexpired lease shall be deemed cured as of the Effective Date,

and there shall be no other cure obligation or Cure Payment due or owed by anyone, including

the Debtor and the Reorganized Companies, in connection with such assumption of the



42

CHAR2\1462268v9

executory contract or unexpired lease. Any Claims for Cure Payments not Filed as part of a

written objection to the proposed assumption within such time period will be forever barred from

assertion against the Debtor, the Estate, the Reorganized Companies, and the Assets, and the

holders of any such Claims are barred from recovering any distributions under the Plan on

account thereof. In the event of an objection to the assumption of executory contracts or

unexpired leases regarding the amount of any Cure Payment, or the ability of the Reorganized

Companies to provide adequate assurance of future performance or any other matter pertaining

to assumption, (a) the Bankruptcy Court will hear and determine such dispute at the

Confirmation Hearing and, (b) in the discretion of the Debtor or Debtor Subsidiary, as

applicable, the Debtor or Debtor Subsidiary (i) may assume such disputed executory contract or

unexpired lease by curing any default or providing adequate assurance in the manner determined

by the Bankruptcy Court, or (ii) may reject such executory contract or unexpired lease as of the

Effective Date. The Reorganized Companies shall make any Cure Payment on the later of the

Effective Date and the date such Cure Payment is due pursuant to a Final Order, provided

however that the Reorganized Companies shall have five Business Days after any order

determining the amount of a disputed Cure Payment becomes a Final Order in which to amend

the “Schedule of Executory Contracts and Unexpired Leases to be Rejected” to provide for the

rejection of such executory contract or unexpired lease and, in such an event, such executory

contract or unexpired lease shall be deemed rejected as of the Effective Date.

6.3 Effect of Confirmation Order on Executory Contracts and Unexpired Leases.

Subject to the occurrence of the Effective Date, entry of the Confirmation Order shall constitute

approval of such assumptions pursuant to Sections 365(a) and 1123(b)(2) of the Bankruptcy

Code and a finding by the Bankruptcy Court that each such assumption is in the best interest of



43

CHAR2\1462268v9

the Debtor, each Debtor Subsidiary, the Estate, and all parties in interest. In addition, the

Confirmation Order shall constitute a finding of fact and conclusion of law that (i) there are no

defaults of the Debtor or Debtor Subsidiary, as applicable, no Cure Payments owing (including

that there is no compensation due for any actual pecuniary loss), (ii) there is adequate assurance

of future performance with respect to each such assumed executory contract or unexpired lease,

(iii) such assumption is in the best interest of the Debtor, each Debtor Subsidiary and the Estate,

(iv) upon the Effective Date, the assumed executory contracts or unexpired leases constitute

legal, valid, binding and enforceable contracts in accordance with the terms thereof, and (v) the

counterparty to each assumed executory contract or unexpired lease is required to and ordered to

perform under and honor the terms of the assumed executory contract or unexpired lease. All

executory contracts and unexpired leases assumed under the Plan or during the Chapter 11 Case

constitute valid contracts and leases, as applicable, enforceable by the Debtor against the non-

Debtor counterparties regardless of any cross-default or change of control provisions in any

contracts or leases assumed or rejected under the Plan or during the Chapter 11 Case.

Subject to the occurrence of the Effective Date, the Confirmation Order shall

constitute an order of the Bankruptcy Court approving the rejection as of the Effective Date of all

executory contracts and unexpired leases that are not assumed under this Plan, with the rejection

effective as of the day before the Petition Date, as being burdensome and not in the best interest

of the Estate.

6.4 Bar Date for Filing Proofs of Claim Relating to Executory Contracts and

Unexpired Leases Rejected Pursuant to the Plan. Except as otherwise set forth in this Plan, any

Claims for damages arising from the rejection of an executory contract or unexpired lease under

this Plan must be Filed within 30 days after the Effective Date or, with respect to any executory



44

CHAR2\1462268v9

contracts or unexpired leases which are rejected after the Effective Date by amendment to the

“Schedule of Executory Contracts and Unexpired Leases to be Rejected,” no later than 30 days

after the date of such amendment, or such Claims will be forever barred and unenforceable

against the Debtor, the Reorganized Companies, and the Assets and the holders of any such

Claims will be barred from receiving any distributions under the Plan.

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

Unless otherwise provided, each Executory Contract or Unexpired Lease that is assumed 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 repudiated or is rejected or repudiated

under the Plan. Modifications, amendments, supplements and restatements to prepetition

Executory Contracts and Unexpired Leases that have been executed by the Debtor during the

Chapter 11 Case 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, unless such Executory Contract or Unexpired Lease has been previously assumed by

the Debtor.

6.6 Reservation of Rights. Nothing contained in the Plan or any Plan Document shall

constitute an admission by the Debtor or a Debtor Subsidiary that any such contract or lease is in

fact an executory contract or unexpired lease or that the Reorganized Companies has or have, as

the case may be, any liability thereunder. If there is a dispute regarding whether a contract or

lease is or was executory or unexpired at the time of assumption or rejection, the Debtor, Debtor



45

CHAR2\1462268v9

Subsidiary or the Reorganized Companies, as applicable, shall have 45 days following entry of a

Final Order resolving such dispute to alter their treatment of such contract or lease.

6.7 Plan Contracts and Leases Entered Into After the Petition Date.

Notwithstanding any other provision in the Plan, contracts and leases entered into after the

Petition Date by the Debtor or a Debtor Subsidiary, including any executory contracts and

unexpired leases assumed by such Debtor, will be performed by the Debtor or the Reorganized

Companies liable thereunder in the ordinary course of its business. Accordingly, such contracts

and leases (including any assumed executory contracts and unexpired leases) will survive and

remain unaffected by entry of the Confirmation Order.

6.8 Management Agreements. Subject to the occurrence of the Effective Date and

effective thereon, the MSA, O&M Agreement and Northampton Fuel Management Agreements

shall be rejected pursuant to Section 365 of the Bankruptcy Code. Entry of the Confirmation

Order by the clerk of the Bankruptcy Court shall constitute the approval, pursuant to Sections

365(a) and 1123(b)(2) of the Bankruptcy Code, of the rejection of the agreements described in

this Section 6.8. The Reorganized Companies shall be authorized to enter into new agreements

with other Entities for the provision of services provided under the former Management

Agreements in form and substance satisfactory to the Collateral Agent. The form of new

management agreements shall be attached in the Plan Supplement.

ARTICLE 7

DISTRIBUTIONS UNDER THE PLAN

7.1 Distributions under the Plan. Distributions under this Plan on account of

Allowed Claims shall be made solely to holders of such Claims as of the Distribution Record

Date; provided that Allowed Claims arising subsequent to the Distribution Record Date and

Administrative Expense Claims shall be Allowed and paid as provided under this Plan. All



46

CHAR2\1462268v9

distributions that are required under this Plan shall be made by the Reorganized Companies. If

any litigation now pending is resolved by Final Order or settlement, and the Debtor or a Debtor

Subsidiary is ordered to pay any sums to the successful litigant, then such party shall become a

Creditor, and shall share in distributions to the appropriate Class. Whenever any distribution to

be made under this Plan shall be due on a day other than a Business Day, such distribution shall

instead be made, without the accrual of any interest thereon, on the immediately succeeding

Business Day, but shall be deemed to have been made on the date due.

7.2 Record Date for Voting on Plan. The transfer registers for each of the Classes of

Claims and Interests as maintained by the Debtor, a Debtor Subsidiary or any third party, shall be

deemed closed on the date of entry of an order of the Bankruptcy Court approving the Disclosure

Statement (or, with respect to any Class, any later date to which the Debtor agree) for purposes

of voting on the Plan, and there shall be no further changes to reflect any new record holders of

any Claims or Interests for purposes of voting on the Plan.

7.3 Delivery of Distributions. Except as otherwise provided in this Plan, distributions

to a holder of an Allowed Claim or Allowed Interest shall be made at the address of such holder

as indicated on the Debtor’s or Debtor Subsidiary’s records or, with respect to Senior Bond

Claims and Junior Bond Claims, as directed by the Collateral Agent or Applicable Trustee. In

the event that any such distribution is returned as undeliverable, the Reorganized Companies

shall use reasonable efforts to determine the current address of the applicable holder, and no

distribution to such holder shall be made unless and until the Reorganized Companies has

determined such then current address, provided, however, that if any distribution remains

unclaimed after the first anniversary after distribution, such distribution shall be deemed

unclaimed property pursuant to Section 347(b) of the Bankruptcy Code and shall become vested



47

CHAR2\1462268v9

in the Reorganized Companies. In such event, the Claim of the holder for such distribution shall

no longer be deemed to be Allowed, and such holder shall be deemed to have waived its rights to

such distribution under this Plan pursuant to Section 1143 of the Bankruptcy Code, shall have no

further claim or right thereto, and shall not participate in any further distributions under this Plan

with respect to such Claim. Checks issued by the Reorganized Companies in respect of Allowed

Claims shall be null and void if not negotiated within 120 days after the date of issuance thereof.

7.4 Third-Party Agreements. The distributions to the various Classes of Claims or

Interests hereunder will not affect the right of any Entity to levy, garnish, attach, or employ any

other legal process with respect to such distributions by reason of any claimed subordination or

lien priority rights or otherwise. In particular, nothing in this Plan shall affect or impair any

charging lien or similar rights of the Collateral Agent, Senior Bond Trustee or Junior Bond

Trustee against parties other than the Debtor, Debtor Subsidiaries and Reorganized Companies

under any document or instrument relating in any way to the Senior Bonds and Junior Bonds.

Except as set forth herein, all subordination agreements entered into by any parties in interest

shall be enforceable to the extent permitted by applicable law. As of the Effective Date, and

without any further act by the Debtor, the Debtor Subsidiaries, the Reorganized Companies or

any other person, any reference to the Senior Bonds, obligations under the Senior Bond Loan

Agreement or any other document evidencing or securing the same in any contract, security

agreement, estoppel or consent entered into by of for the benefit of the Debtor, Debtor

Subsidiaries, Collateral Agent, the Senior Bond Trustee or the holders of Senior Bonds prior to

the Effective Date shall be deemed to refer to the Amended Bonds or the Amended Bond

Documents, as applicable, and shall except as set forth in this Section 7.4 or as otherwise

provided in the Plan, continue to be in full force and effect.



48

CHAR2\1462268v9

7.5 Manner of Payment Under the Plan. At the option of the Reorganized

Companies, any payment in Cash to be made under the Plan may be made by check or wire

transfer from a domestic bank or as otherwise required by applicable agreement.

7.6 No Fractional Distributions. No fractional dollars shall be distributed under the

Plan. For purposes of distributions, Cash distributions shall be rounded up or down, as

applicable, to the nearest whole dollar.

7.7 Withholding and Reporting. The Reorganized Companies shall comply with all

applicable withholding and reporting requirements imposed by federal, state, and local taxing

authorities, and all distributions shall be subject to such withholding and reporting requirements.

7.8 Surrender and Cancellation of Instruments. At the option of the Reorganized

Companies, as a condition to receiving any distribution under the Plan, each holder of an

Allowed Claim evidenced by a certificated instrument must, except as otherwise provided in the

Plan including, without limitation, provisions of Sections 4.4 and 4.3 herein, either (a) surrender

such instrument to the Reorganized Companies, or (b) submit evidence satisfactory to the

Reorganized Companies of the loss, theft, mutilation, or destruction of such instrument. If any

holder of an Allowed Claim fails to do either (a) or (b) before the one year anniversary of the

Effective Date, such holder shall be deemed to have forfeited its Claim and all rights appurtenant

thereto, including the right to receive any distributions hereunder. After the first anniversary of

the Effective Date, all payments not distributed pursuant to this Section 7.8 shall be deemed

unclaimed property pursuant to Section 347(b) of the Bankruptcy Code and shall become vested

in the Reorganized Companies. For the avoidance of doubt, the Collateral Agent and Applicable

Trustees shall cooperate with the Reorganized Debtor, Debtor Subsidiaries and Successor

Collateral Agent in preparation by the Reorganized Debtor and Debtor Subsidiaries of (i)



49

CHAR2\1462268v9

documentation to evidence the release of liens securing the Junior Bonds and Junior Loan

Agreement and (ii) the release any liens securing the guaranty of the Junior Bonds and Junior

Loan Agreement by a Debtor Subsidiary; provided, however, that the Reorganized Debtor shall

reimburse the Collateral Agent and Applicable Trustees for reasonable costs associated with such

activity. Notwithstanding the foregoing, on the Effective Date, the Junior Bonds, the Junior

Bond Indenture and the Junior Bond Loan Agreement shall be deemed extinguished, cancelled

and discharged and all security interests granted for the benefit of the Junior Bondholders

pursuant to the Junior Bond Loan Agreement or otherwise against any of the Reorganized

Companies shall be deemed cancelled. The Junior Bond Indenture shall continue in effect solely

for the purposes of: (1) allowing Bondholders of the Junior Bonds to receive distributions under

this Plan; and (2) allowing and preserving the rights of the Junior Bond Trustee (a) to make

distributions in satisfaction of the Allowed Class 4 Claims, and (b) to be reimbursed for its

reasonable fees and expenses, including through the exercise of rights against any reserved

funds. Upon completion of all such distributions, the Junior Bond Indenture shall terminate

completely. From and after the Effective Date, the Junior Bond Trustee shall have no duties or

obligations under the Junior Bond Indenture other than to make distributions. Promptly

following the Effective Date, the Junior Bond Trustee may require that the Junior Bonds shall be

surrendered to the Junior Bond Trustee in accordance with the terms of the Junior Bond

Indenture and related documents. All surrendered and cancelled Junior Bonds held by the Junior

Bond Trustee shall be disposed of in accordance with the applicable terms and conditions of the

Junior Bond Indenture and related documents.

ARTICLE 8

MEANS FOR EXECUTION ANDIMPLEMENTATION OF THE PLAN



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CHAR2\1462268v9

8.1 Generally. Upon confirmation of this Plan, the Debtor and each Debtor

Subsidiary shall be authorized to take all necessary steps, and perform all necessary acts, to

consummate the terms and conditions of this Plan including, without limitation, the execution

and filing of all documents required or contemplated by this Plan. In connection with the

occurrence of the Effective Date, the Reorganized Companies are authorized to execute, deliver,

or record such contracts, instruments, releases, indentures, and other agreements or documents,

and take such actions as may be necessary or appropriate to effectuate and further evidence the

terms and conditions of this Plan.

8.2 Sources of Consideration. All Cash consideration necessary for the

Reorganized Companies to make payments or distributions pursuant hereto shall be obtained

from the Cash on hand of the Reorganized Companies, including Cash derived from business

operations and to the extent necessary from the Equity Contribution.

8.3 Equity Contribution. On the Effective Date, the Reinvesting Beneficial Owner

will fund to the Debtor the Equity Contribution through investments in the General Partnership

Interest Holder and the Limited Partnership Interest Holder which shall in turn fund investments

in the Reorganized Debtor in an aggregate amount equal to the Equity Contribution.

8.4 New Partnership Interests. On the Effective Date, the Reorganized Debtor shall

issue Limited Partnership Interests and General Partnership Interests. The Limited Partnership

Interests shall be issued to the Limited Partnership Interests Holder. The General Partnership

Interests shall be issued to the General Partnership Interests Holder. Voting rights and other

attributes of the Limited Partnership Interests and General Partnership Interests may be set forth

in the Plan Supplement.



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8.5 Entity Action. Each of the officers of the Reorganized Companies shall be

authorized, in accordance with his or her authority under the resolutions of the Board of Control,

to execute, deliver, file, or record such contracts, instruments, releases, indentures, and other

agreements or documents and to take such actions as may be necessary or appropriate, for and on

behalf of the Reorganized Companies, to effectuate and further evidence the terms and

conditions of this Plan and any notes, bonds or securities issued pursuant to this Plan.

8.6 Status of Existing Liens of Secured Tax Claims, Senior Bond Claims and Other

Secured Claims. Unless otherwise provided in this Plan, on the Effective Date, all existing liens

held by the holders of Allowed Secured Tax Claims on the Assets shall retain the same validity,

priority and extent that existed on the Petition Date. This Section 8.6 and Section 552 of the

Bankruptcy Code shall not apply to limit any of the Collateral Agent’s or Senior Bond Trustee’s

liens and security interests held for the benefit of the Senior Bond Trustee and Bondholders with

respect to the Senior Bonds, which shall remain in place in the same priority as prior to the

bankruptcy case prior to the Petition Date, solely for the benefit of the Successor Bond Trustee,

Successor Collateral Agent, and Amended Bonds Documents. On the Effective Date, subject to

compliance by the Debtor and Reorganized Companies with this Plan, all other Liens and

encumbrances shall be deemed automatically canceled, terminated and of no further force or

effect without further act or action under any applicable agreement, law, regulation, order, or

rule.

8.7 Plan Documents. The Plan, the Plan Supplement, and all documents to

implement this Plan and the transactions contemplated herein shall be in form and substance

satisfactory to the Reorganized Companies to the extent set forth in the Plan.



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8.8 Effectuating Documents and Further Transactions. Each of the officers of the

Debtor, each Debtor Subsidiary and the Reorganized Companies shall be authorized, in

accordance with his or her authority under the resolutions of the Board of Control of the Debtor,

each Debtor Subsidiary and the Reorganized Companies, to execute, deliver, file, or record such

contracts, instruments, releases, indentures, and other agreements or documents and to take such

actions as may be necessary or appropriate for and on behalf of the Debtor, each Debtor

Subsidiary and the Reorganized Companies, to effectuate and further evidence the terms and

conditions of this Plan and any notes, loan documents, security instruments, bonds or securities

issued pursuant to this Plan.

8.9 Reorganized Companies Governance. The existing members of the Debtor’s

and Debtor Subsidiaries’ Board of Control shall continue to be members of the Board of Control

of each applicable Reorganized Company. Warren MacGillivray is the sole member of the

Board of Control of the Reorganized Debtor. Warren MacGillivray and Alycia Goody are the

members of the Board of Control for each of the reorganized Debtor Subsidiaries.

The existing officers of the Debtor and Debtor Subsidiaries shall continue to be officers

of the Reorganized Companies. Warren MacGillivray is the President of each of the

Reorganized Companies. Carl Lemke is the Vice President for each of the Reorganized

Companies. Carol Carr is the Assistant Secretary for each of the Reorganized Companies.

Michelle Brauner is the Vice President for the Reorganized Debtor. Cam Reese is the Vice

President for both of the reorganized Debtor Subsidiaries.

Such officers and members of the Board of Control shall serve in accordance with

applicable non-bankruptcy law.



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ARTICLE 9

RESOLUTION OF DISPUTED CLAIMS AND INTERESTS

9.1 Objections to Claims and Interests; Prosecution of Disputed Claims and

Interests. The Debtor and, after the Effective Date, the Reorganized Companies, shall have the

exclusive right to object to the allowance, amount or classification of Claims and Interests

asserted in the Chapter 11 Case or otherwise against the Debtor or a Debtor Subsidiary (provided

that no such rights shall exist to object to the allowance or classification of any Claim after it has

been Allowed or object to the amount of any Allowed Claim after the Allowed Amount has been

determined in accordance with this Plan) and such objections may be litigated to Final Order by

the Debtor or the Reorganized Companies, as applicable, or compromised and settled in

accordance with the business judgment of the Debtor or the Reorganized Companies, as

applicable, without further order of the Bankruptcy Court. Unless otherwise provided herein or

ordered by the Bankruptcy Court, all objections to Claims and Interests shall be Filed no later

than 150 days after the Effective Date, subject to any extensions granted pursuant to a further

order of the Bankruptcy Court, which extensions may be obtained by the Reorganized

Companies without notice upon ex parte motion.

9.2 Estimation of Disputed Claims and Interests. The Debtor and, after the Effective

Date, the Reorganized Companies, may at any time request that the Bankruptcy Court estimate

for all purposes, including distribution under this Plan, any disputed, contingent or unliquidated

Claim or Interest pursuant to Section 502(c) of the Bankruptcy Code whether or not the Debtor

or the Reorganized Companies have previously objected to such Claim or Interest. The

Bankruptcy Court shall retain jurisdiction to estimate any such Claim or Interest at any time,

including, without limitation, during the pendency of an appeal relating to such objection.



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9.3 No Distribution on Account of Disputed Claims and Interests. Notwithstanding

anything else contained in this Plan, no distribution shall be due or made with respect to all or

any portion of any disputed, contingent, or unliquidated Claim until the Claim becomes an

Allowed Claim by Final Order.

ARTICLE 10

EFFECT OF CONFIRMATION OF PLAN

10.1 Vesting of Assets and Retained Causes of Action. On the Effective Date,

pursuant to Section 1141(b) of the Bankruptcy Code, all Assets of the Debtor, each Debtor

Subsidiary and the Estate shall vest in the Reorganized Companies free and clear of any and all

Claims, Liens, Interests, and other interests, charges and encumbrances, except as otherwise

expressly provided in this Plan or in the Confirmation Order. From and after the Effective Date,

the Reorganized Companies may operate their businesses and may own, use, acquire and dispose

of Assets free of any restrictions of the Bankruptcy Code or the Bankruptcy Rules and in all

respects as if the Chapter 11 Case had never been filed. Effective upon the occurrence of the

Effective Date, the Debtor waives any Avoidance Claims for affirmative recoveries, provided,

however, the Debtor reserves all such Avoidance Claims for defensive purposes and may assert

Avoidance Claims as defenses or setoffs against other Claims filed against the Debtor.

Except as otherwise specifically provided in this Plan, and pursuant to Section

1123(b) of the Bankruptcy Code, the Reorganized Companies shall retain all rights and are

authorized to commence and pursue, as the Reorganized Companies deem appropriate, any and

all claims and Causes of Action, whether arising before or after the Petition Date, in any court or

other tribunal including, without limitation, in an adversary proceeding filed in the Chapter 11

Case, and including but not limited to, the claims and Causes of Action specified in the Plan or

any Plan exhibit. Notwithstanding the foregoing, the Reorganized Companies waive, and shall



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not pursue, any claims or Causes of Action against Released Parties. Due to the size and scope

of the business operations of the Debtor and each Debtor Subsidiary and the multitude of

business transactions therein, there may be numerous other claims and Causes of Action that

currently exist or may subsequently arise, in addition to the claims and Causes of Action

identified in the Plan Supplement, all of which other claims and Causes of Action shall revest in

the Reorganized Companies. The Reorganized Companies do not intend, and it should not be

assumed that, because any existing or potential claims or Causes of Action have not yet been

pursued by the Debtor or do not fall within the list identified in the Plan Supplement, any such

claims or Causes or Action have been waived or will not be pursued. Under this Plan, the

Reorganized Companies retain all rights to pursue any and all claims and Causes of Action to the

extent the Reorganized Companies deem appropriate (under any theory of law or equity,

including, without limitation, the Bankruptcy Code and any applicable local, state, or federal

law, in any court or other tribunal, including, without limitation, in an adversary proceeding filed

in the Chapter 11 Case) except as otherwise specifically provided in this Plan.

10.2 Binding Effect. Notwithstanding Bankruptcy Rules 3020(e), 6004(h) or 7062 or

any other Bankruptcy Rule, upon the occurrence of the Effective Date, the terms of this Plan,

Plan Supplement and the Plan Documents shall be immediately effective and enforceable and

deemed binding upon the Debtor, each Debtor Subsidiary, the Reorganized Companies and any

and all holders of Claims or Interests (irrespective of whether such Claims or Interests are

deemed to have accepted this Plan), all persons that are parties to or are subject to the

settlements, compromises, releases, discharges and injunctions described in this Plan, each

person acquiring property under this Plan, and any and all non-Debtor parties to executory

contracts and unexpired leases with the Debtor.



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10.3 Discharge. Except with respect to Claims expressly reinstated by this Plan or as

otherwise specifically provided in this Plan or in the Confirmation Order, the rights afforded in

this Plan and the treatment of the Claims and Interests herein shall be in exchange for and in

complete satisfaction, discharge, and release of all Claims against and Interests in the Debtor,

each Debtor Subsidiary, the Debtor in Possession, the Reorganized Companies or the Assets,

properties, or Interests in, or property of the Debtor, each Debtor Subsidiary, the Debtor in

Possession or the Reorganized Companies of any nature whatsoever, including any interest

accrued on any Claim from and after the Petition Date. Except as expressly otherwise provided

herein or in the Confirmation Order, on the Effective Date, all Claims arising before the

Effective Date (including those arising under Sections 502(g), 502(h) or 502(i) of the Bankruptcy

Code) against the Debtor, any Debtor Subsidiary and the Debtor in Possession (including any

based on acts or omissions that constituted or may have constituted ordinary or gross negligence

or reckless, willful, or wanton misconduct of any of the Debtor or a Debtor Subsidiary, or any

conduct for which the Debtor or a Debtor Subsidiary may be deemed to have strict liability under

any applicable law), together with all Interests in the Debtor, shall be irrevocably satisfied,

discharged, cancelled and released in full.

For the avoidance of doubt, the Reorganized Companies shall be responsible only

for (a) those payments and distributions expressly provided for or due under this Plan and (b)

Claims and Interests that are not canceled and discharged pursuant to specific and express

provisions of this Plan, and then only to the extent and in the manner specifically and expressly

provided in this Plan. All Entities are precluded and forever barred from asserting against the

Debtor, any Debtor Subsidiary, the Debtor in Possession or the Reorganized Companies, or the

Assets, properties, or Interests in or property of the Debtor, any Debtor Subsidiary, the Debtor in



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Possession or the Reorganized Companies of any nature whatsoever any Claims or Interests

based upon any act or omission, transaction, or other activity, event, or occurrence of any kind or

nature that occurred prior to the Effective Date, whether or not the facts of or legal bases therefor

were known or existed prior to the Effective Date, except for (a) those payments and

distributions expressly due under this Plan and (b) Claims and Interests, if any, that are not

canceled and discharged under the Plan, but instead survive pursuant to specific and express

provisions of this Plan, and then only to the extent and in manner specifically and expressly

provided in the Plan.

With respect to any debts discharged by operation of law under Section 1141

of the Bankruptcy Code, the discharge of the Debtor operates as an injunction against the

commencement or continuation of an action, the employment of process, or an act, to

collect, recover, or offset any such debt as a liability of the Debtor or any Debtor

Subsidiary, whether or not the discharge of such debt is waived; provided, however, that the

obligations of the Reorganized Companies under this Plan are not so discharged.

10.4 Injunction. FROM AND AFTER THE EFFECTIVE DATE, ALL PERSONS

ARE PERMANENTLY ENJOINED FROM COMMENCING OR CONTINUING IN ANY

MANNER, ANY CAUSE OF ACTION RELEASED OR TO BE RELEASED PURSUANT TO

THIS PLAN OR THE CONFIRMATION ORDER.

FROM AND AFTER THE EFFECTIVE DATE, TO THE EXTENT OF THE

RELEASES AND EXCULPATION GRANTED IN THIS PLAN, SUCH RELEASING

PARTIES SHALL BE PERMANENTLY ENJOINED FROM COMMENCING OR

CONTINUING IN ANY MANNER AGAINST THE RELEASED PARTIES AND THE

EXCULPATED PARTIES AND THEIR ASSETS AND PROPERTIES, AS THE CASE MAY



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BE, ANY SUIT, ACTION OR OTHER PROCEEDING, ON ACCOUNT OF OR

RESPECTING ANY CLAIM, DEMAND, LIABILITY, OBLIGATION, DEBT, RIGHT,

CAUSE OF ACTION, INTEREST OR REMEDY RELEASED OR TO BE RELEASED

PURSUANT TO THIS PLAN.

EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS PLAN, THE

PLAN SUPPLEMENT OR THE PLAN DOCUMENTS OR RELATED DOCUMENTS, OR

FOR OBLIGATIONS UNDER THIS PLAN, ALL PERSONS WHO HAVE HELD, HOLD

OR MAY HOLD CLAIMS OR INTERESTS THAT HAVE BEEN RELEASED,

DISCHARGED, OR ARE SUBJECT TO EXCULPATION, ARE PERMANENTLY

ENJOINED, FROM AND AFTER THE EFFECTIVE DATE, FROM TAKING ANY OF

THE FOLLOWING ACTIONS: (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 CLAIMS OR INTERESTS; (2)

ENFORCING, ATTACHING, COLLECTING OR RECOVERING BY ANY MANNER OR

MEANS ANY JUDGMENT, AWARD, DECREE OR ORDER AGAINST SUCH PERSONS

ON ACCOUNT OF OR INCONNECTION WITH OR WITH RESPECT TO ANY SUCH

CLAIMS OR INTERESTS; (3) CREATING, PERFECTING OR ENFORCING ANY

ENCUMBRANCE OF ANY KIND AGAINST SUCH PERSONS OR THE PROPERTY OR

ESTATE OF SUCH PERSONS ON ACCOUNT OF OR IN CONNECTION WITH OR WITH

RESPECT TO ANY SUCH CLAIMS OR INTERESTS; AND (4) 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



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SUCH CLAIMS OR INTERESTS RELEASED, SETTLED OR DISCHARGED PURSUANT

TO THIS PLAN.

THE RIGHTS AFFORDED IN THIS PLAN AND THE TREATMENT OF

ALL CLAIMS AND INTERESTS HEREIN SHALL BE IN EXCHANGE FOR AND IN

COMPLETE SATISFACTION OF ALL CLAIMS AND INTERESTS OF ANY NATURE

WHATSOEVER, INCLUDING ANY INTEREST ACCRUED ON CLAIMS FROM AND

AFTER THE PETITION DATE, AGAINST THE DEBTOR, THE DEBTOR SUBSIDIARIES

OR ANY OF THEIR ASSETS, PROPERTY OR ESTATE.

EXCEPT AS OTHERWISE EXPRESSLY PROVIDED FOR IN THIS PLAN

OR IN OBLIGATIONS ENTERED INTO UNDER THIS PLAN, FROM AND AFTER THE

EFFECTIVE DATE, ALL CLAIMS AGAINST THE NORTHAMPTON PARTIES SHALL

BE FULLY RELEASED AND DISCHARGED AND THE NORTHAMPTON PARTIES’

LIABILITY WITH RESPECT THERETO SHALL BE EXTINGUISHED COMPLETELY,

INCLUDING ANY LIABILITY OF THE KIND SPECIFIED UNDER SECTION 502(G) OF

THE BANKRUPTCY CODE. ALL PERSONS SHALL BE PRECLUDED FROM

ASSERTING AGAINST THE NORTHAMPTON PARTIES, THE ESTATE, THE

REORGANIZED COMPANIES, EACH OF THEIR RESPECTIVE SUCCESSORS AND

ASSIGNS, AND EACH OF THEIR ASSETS AND PROPERTIES, ANY OTHER CLAIMS

OR INTERESTS BASED UPON ANY DOCUMENTS, INSTRUMENTS OR ANY ACT OR

OMISSION, TRANSACTION OR OTHER ACTIVITY OF ANY KIND OR NATURE THAT

OCCURRED BEFORE THE EFFECTIVE DATE.

10.5 Term of Injunctions or Stays. Unless otherwise provided in this Plan or in the

Confirmation Order, all injunctions or stays in effect in the Chapter 11 Case pursuant to sections



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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 this Plan or the Confirmation

Order) shall remain in full force and effect until the Effective Date. All injunctions or stays

contained in this Plan or the Confirmation Order shall remain in full force and effect in

accordance with their terms. In addition, on and after the Confirmation Date, the Debtor and each

Debtor Subsidiary may seek such further orders as they may deem necessary or appropriate to

preserve the status quo during the time between the Confirmation Date and the Effective Date

10.6 Indemnification Obligations. Subject to the occurrence of the Effective Date, the

obligations of the Debtor or a Debtor Subsidiary to indemnify, reimburse or limit liability of any

person who is serving or has served as one of their directors, members of its Board of Control,

officers, employees or agents by reason of such person’s prior or current service in such capacity

as provided in the applicable articles of organization, operating agreements, partnership

agreements, or bylaws, by statutory law or by written agreement, policies or procedures of or

with the Debtor or Debtor Subsidiary, or the partners of the Debtor, shall be deemed to be and

treated as executory contracts that are assumed and assigned to the Reorganized Companies

pursuant to the Plan and Section 365 of the Bankruptcy Code and shall not be affected by or

discharged by this Plan. Nothing in the Plan shall be deemed to affect any rights of any director,

partner, member, officer or any other person against any insurer with respect to any directors or

officers liability insurance policies.

10.7 Protection against Discriminatory Treatment. Consistent with Section 525 of

the Bankruptcy Code and the Supremacy Clause of the U.S. Constitution, all persons, including

governmental units, shall not discriminate against the Reorganized Companies or deny, revoke,

suspend or refuse to renew a license, permit, charter, franchise or other similar grant to,



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condition such a grant to, discriminate with respect to such a grant against, the Reorganized

Companies or another person with whom the Reorganized Companies has or have been

associated, solely because the Debtor has been a debtor under chapter 11, has been insolvent

before the commencement of the Chapter 11 Case (or during the Chapter 11 Case but before the

Debtor is granted or denied a discharge) or has not paid a debt that is dischargeable in the

Chapter 11 Case. From and after entry of the Confirmation Order, all persons, including

governmental units shall accept any documents or instruments presented by the Debtor or

Reorganized Companies which are necessary or appropriate to consummate the transactions

contemplated by this Plan, shall not revoke, terminate or fail or refuse to maintain, transfer, issue

or renew any license, permit or authorization based on the transactions contemplated by this Plan

or implementation thereof.

10.8 No Successor Liability. Except as otherwise specifically provided in the Plan or

the Confirmation Order, neither the Debtor, any Debtor Subsidiary nor the Reorganized

Companies will have any responsibilities, pursuant to the Plan or otherwise, for any liabilities or

obligations of the Debtor or any of the Debtor Subsidiaries, past or present, relating to or arising

out of the operations of or assets of the Debtor or any of the Debtor Subsidiaries, whether arising

prior to, or resulting from actions, events, or circumstances occurring or existing at any time

prior to the Effective Date. The Reorganized Companies shall have no successor or transferee

liability of any kind or character, for any Claims; provided, however, that the Reorganized

Companies shall have the obligations for the payments specifically and expressly provided, and

solely in the manner stated, in the Plan.

10.9 Release of Claims of Debtor and Debtor Subsidiaries. As of the Effective Date,

and subject to its occurrence, for the good and valuable consideration provided by each of the



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Released Parties, any and all Causes of Action of the Debtor, a Debtor Subsidiary and Debtor in

Possession against any of the Released Parties based in whole or in part upon any act or

omission, transaction, agreement, event or other occurrence taking place on or before the

Effective Date shall be forever released and discharged. The foregoing releases, however, shall

not (1) operate as a waiver or release for any borrowed money owed to the Debtor or a Debtor

Subsidiary by any officer, director or employee, (2) release or limit any claims or Causes of

Action set forth in the Plan Supplement (except that the Debtor and the Reorganized Companies

release any claims and Causes of Action against the Bondholders, Authority, Issuer, Senior Bond

Trustee, Junior Bond Trustee, Collateral Agent, Northampton Partners, Northampton Holdco,

EIF Calypso, Cogentrix, or their respective past, present and future officers, directors, managing

directors, servants, shareholders, partners, employees, agents, representatives, consultants and

professionals), or (3) waive any defenses to any Claims asserted against the Debtor or a Debtor

Subsidiary by any Released Parties except to the extent such Claims have been specifically

Allowed in the Plan or by a Final Order of the Bankruptcy Court, or (4) release any claims or

Causes of Action based on gross negligence or reckless, willful or wanton misconduct of any

Released Party.

10.10 Release by Holders of Claims. Except as otherwise specifically provided in the

Plan or the Confirmation Order, on and after the Effective Date, each holder of a Claim who has

voted to accept the Plan shall be deemed to have unconditionally released the Released Parties

from any and all Claims, obligations, rights, suits, damages, Causes of Action, remedies, and

liabilities, whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in

law, equity, or otherwise, that such Entity would have been legally entitled to assert (whether

individually or collectively), based in whole or in part upon any act or omission, transaction,



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agreement, event, or other occurrence taking place on or before the Effective Date on account of

any Claim, except for (i) with respect to the Reorganized Companies, Claims which are or

become Allowed Claims and are to be paid as provided pursuant to the Plan, and (ii) Claims

based on gross negligence or reckless, willful or wanton misconduct of the Released Parties.

10.11 Exculpation. Except as otherwise specifically provided for in this Plan or the

Confirmation Order, and only to the extent not inconsistent with Section 524(e) of the

Bankruptcy Code, the Released Parties, the Debtor, each Debtor Subsidiary, the Debtor in

Possession and the Reorganized Companies shall have no liability to any Entity for any act or

omission in connection with or arising out of the negotiation of the Plan, the pursuit of approval

of the Disclosure Statement, the pursuit of confirmation of this Plan, the consummation of this

Plan, the transactions contemplated and effectuated by this Plan, the administration of this Plan,

or the Assets to be distributed under such Plan or any other act or omission during the

administration of the Chapter 11 Case or the Estate, except for claims based on gross negligence

or reckless, willful or wanton misconduct. In all respects, each of the foregoing shall be entitled

to rely upon the advice of counsel with respect to its duties and responsibilities with respect to

the negotiation of the Plan, the pursuit of approval of the Disclosure Statement, the pursuit of

confirmation of this Plan, the consummation of this Plan, the transactions contemplated and

effectuated by this Plan, the administration of this Plan, or the Assets to be distributed under such

Plan or any other act or omission during the administration of the Chapter 11 Case or the Estate.

10.12 Preservation of All Causes of Action Not Expressly Settled or Released.

For the avoidance of doubt, and without limiting or restricting any other

provisions of this Plan, including but not limited to Section 10.1 “Vesting of Assets and Retained

Causes of Action,” unless a claim or Cause of Action against a Creditor or other Entity is



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expressly and specifically waived, relinquished, released, compromised or settled in this Plan or

any Final Order, the Reorganized Companies expressly reserve such claim or Cause of Action

for adjudication or pursuit by the Reorganized Companies after the Effective Date, and,

therefore, no preclusion doctrine, including, without limitation, the doctrines of res judicata,

collateral estoppel, issue preclusion, claim preclusion, waiver, estoppel (judicial, equitable or

otherwise) or laches shall apply to such claims or Causes of Action upon or after the

Confirmation Date or Effective Date of the Plan based on the Disclosure Statement, the Plan, the

Confirmation Order or otherwise. The Reorganized Companies expressly reserve the right to

pursue or adopt any claims (and any defenses) or Causes of Action of the Debtor, each Debtor

Subsidiary or the Debtor in Possession, as trustee for or on behalf of the Creditors, not

specifically and expressly waived, relinquished, released, compromised or settled in this Plan or

any Final Order against any Entity, including, without limitation, the plaintiffs or codefendants in

any lawsuits. The Reorganized Companies shall be the representatives of the Estate appointed

for the purposes of pursuing any and all such claims and Causes of Action (including but not

limited to those set forth the Plan Supplement) under Section 1123(b)(3)(B) of the Bankruptcy

Code.

Any Entity to whom the Debtor or a Debtor Subsidiary has incurred an obligation

(whether on account of services, purchase or sale of goods, tort, breach of contract or otherwise),

or who has received services from the Debtor or a Debtor Subsidiary or a transfer of money or

property of the Debtor or a Debtor Subsidiary, or who has transacted business with the Debtor or

a Debtor Subsidiary, or leased equipment or property from the Debtor or a Debtor Subsidiary,

should assume that such obligation, transfer, or transaction may be reviewed by the Reorganized

Companies subsequent to the Effective Date and may, to the extent not theretofore specifically



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waived, relinquished, released, compromised or settled in this Plan or any Final Order, be the

subject of an action or claim or demand after the Effective Date, whether or not (a) such Entity

has filed a proof of claim against the Debtor in the Chapter 11 Case, (b) such Entity’s proof of

claim has been objected to, (c) such Entity’s Claim was included in the Debtor’s Schedules, or

(d) such Entity’s scheduled Claim has been objected to by the Debtor or has been identified by

the Debtor as disputed, contingent, or unliquidated.

ARTICLE 11

THE EFFECTIVE DATE OF THE PLAN

11.1 Conditions to Occurrence of Effective Date of Plan. The “effective date of the

plan,” as used in Section 1129 of the Bankruptcy Code, shall not occur until the Effective Date.

The occurrence of the Effective Date is subject to satisfaction of the following conditions

precedent (or conditions subsequent with respect to actions that are to be taken

contemporaneously with, or immediately upon, the occurrence of the Effective Date), any of

which may be waived in writing by the Debtor, the Collateral Agent and the Reinvesting

Beneficial Owner (any of which party may withhold its consent to any waiver in its sole

discretion) and any other party whose consent to any such waiver is specifically required in

writing under the Plan, if such waiver is legally permissible with respect thereto:

11.1.1 The Confirmation Order and the Plan as confirmed pursuant to the

Confirmation Order and Filed shall be in a form and substance satisfactory to the Debtor, the

Collateral Agent and the Reinvesting Beneficial Owner.

11.1.2 The Confirmation Order shall have become a Final Order; provided,

however, that the Effective Date may occur at a point in time when the Confirmation Order is not

a Final Order at the option of the Debtor, with the consent of the Collateral Agent and



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Reinvesting Beneficial Owner, unless the effectiveness of the Confirmation Order has been stayed

or vacated.

11.1.3 The Bankruptcy Court shall have made the statutorily required findings of

fact and conclusions of law in connection with the confirmation of this Plan, each of which

findings and conclusions shall be expressly set forth in the Confirmation Order or in findings of

fact and conclusions of law entered in support of and contemporaneously with the entry of the

Confirmation Order.

11.1.4 All actions, Plan Documents, agreements and instruments, or other

documents necessary to implement the terms and provisions of the Plan or the Plan Supplement,

including, without limitation, the Amended Bond Documents, guarantees and security documents

described in or contemplated by Section 4.3.2 of this Plan shall have been executed and delivered

in form and substance satisfactory to the Debtor, the Collateral Agent and the Reinvesting

Beneficial Owner and Filed in the record of the Chapter 11 Case, and such documents shall be

binding by order of the Bankruptcy Court (which order may be included in the Confirmation

Order) on the Reorganized Companies without any further action or formality.

11.1.5 The Debtor shall have received the proceeds of the Equity Contribution.

11.1.6 Any federal, state, local and foreign governmental authorizations,

consents and regulatory approvals, including to the extent required for the consummation of each

of the transactions contemplated in the Plan shall have been obtained and shall have become final

and non-appealable and, with respect to any court proceeding relating thereto, been approved by

Final Order. In particular, approval will be obtained by the Federal Energy Regulatory

Commission (“FERC”) of the change in ownership of the Debtor pursuant to Section 203(a)(2) of

the Federal Power Act and Section 33.1(a)(1) of FERC’s regulations governing dispositions.



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11.1.7 All fees and expenses due to or incurred by Professionals for the Debtor

through the Effective Date not previously paid pursuant to interim or final orders shall have been

paid into and shall be held in escrow, free and clear of Liens, Claims and encumbrances (other

than the rights of such Professionals) until due and payable in accordance with applicable court

order.

11.1.8 All payments required to be made on the Effective Date shall have been

made.

11.1.9 Any and all documentation contemplated by this Plan to be executed by

the Debtor, the Reinvesting Beneficial Owner, and the parties to the Amended Bonds and/or any

other persons, shall have been executed and delivered.

11.1.10 The Effective Date shall occur no later than March 31, 2013, (or such

later date as may be agreed and designated in writing by each of the Debtor, the Collateral Agent

and Reinvesting Beneficial Owner each in their sole discretion).

11.2 Filing of Notice of Effective Date. Within three Business Days of the occurrence

of the Effective Date, the Reorganized Companies shall file a notice of occurrence of the

Effective Date signed by the counsel for the Debtor in Possession and, if different, counsel to the

Reorganized Companies in the record of the Bankruptcy Court reflecting (a) that the foregoing

conditions to the occurrence of the Effective Date have been satisfied or waived by the Debtor

and any other person whose consent or waiver is required, (b) the date of the Effective Date, and

(c) acknowledging that the Effective Date has occurred on and as of such date.

11.3 Withdrawal of Plan. The Debtor reserves the right, in consultation with the

Collateral Agent but otherwise in the exercise of its sole discretion, to withdraw the Plan at any

time prior to the Confirmation Date. If this Plan is withdrawn prior to the Confirmation Date,



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this Plan shall be deemed null and void. In such event, nothing contained herein, the Plan

Supplement or in any of the Plan Documents shall be deemed to constitute a waiver or release of

any claims or defenses of, or an admission or statement against interest by, the Debtor or any

other Entity or to prejudice in any manner the rights of the Debtor or any Entity in any further

proceedings involving the Debtor.

ARTICLE 12

MISCELLANEOUS PROVISIONS

12.1 Payment of Statutory Fees. All fees payable pursuant to Section 1930 of title 28

of the United States Code shall be paid after the Effective Date by the Reorganized Companies,

as, when and in the amount as required by applicable law.

12.2 Notice. Any notices, requests, and demands required or permitted to be provided

under this Plan, in order to be effective, must be in writing (including by electronic mail or

facsimile transmission), and unless otherwise expressly provided herein, shall be deemed to have

been duly given or made (a) if personally delivered or if delivered by electronic mail or courier

service, when actually received by the Entity to whom such notice is sent, or (b) if deposited

with the United States Postal Service (whether actually received or not), at the close of business

on the third Business Day following the day when placed in the mail, postage prepaid, certified

or registered with return receipt requested, addressed to the appropriate Entity or Entities, at the

address of such Entity or Entities set forth below (or at such other address as such Entity may

designate by written notice to all other Entities listed below in accordance with this Section:

If to the Debtor or ReorganizedCompanies:

Moore & Van Allen, PLLC100 North Tryon Street, Suite 4700Charlotte, NC 28202Attn: Hillary B. CrabtreeEmail: [email protected]



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With a Copy (which shall notconstitute notice pursuant to thisPlan) to:

Mintz Levin Cohn Ferris Glovsky and Popeo, P.C.One Financial CenterBoston, MA 02111Attn: William W. KannelEmail: [email protected]

If to the Collateral Agent: Mintz Levin Cohn Ferris Glovsky and Popeo, P.C.One Financial CenterBoston, MA 02111Attn: William W. KannelEmail: [email protected]

If to the Reinvesting BeneficialOwner:

Alycia L. GoodyAssistant General CounselEnergy Investors FundsThree Charles River Place63 Kendrick StreetNeedham, MA 02494Email: [email protected]

12.3 Headings. The headings used in this Plan are inserted for convenience only and

do not in any manner affect the construction of the provisions of this Plan.

12.4 Governing Law. Unless a rule of law or procedure is supplied by federal law

(including the Bankruptcy Code and Bankruptcy Rules), the laws of the State of New York,

without giving effect to any conflicts of law principles thereof that would result in the

application of the laws of any other jurisdiction, shall govern the construction of this Plan and

any agreements, documents, and instruments executed in connection with this Plan, except as

otherwise expressly provided in such instruments, agreements, or documents.

12.5 Additional Documents. The Debtor and each Debtor Subsidiary has the authority

to take any and all actions and execute (and perform) any agreements and documents as it deems

necessary or appropriate in its reasonable discretion to effectuate and further evidence the terms

and conditions of this Plan.



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12.6 Plan Supplement. Any exhibits or schedules not filed with this Plan may be

contained in the Plan Supplement, if any, and the Debtor and each Debtor Subsidiary hereby

reserves the right to file such a Plan Supplement.

12.7 Compliance with Tax Requirements. In connection with this Plan, the Debtor,

each Debtor Subsidiary and the Reorganized Companies will comply with all applicable

withholding and reporting requirements imposed by federal, state, and local taxing authorities,

and all distributions hereunder shall be subject to such withholding and reporting requirements.

12.8 Exemption from Transfer Taxes. Pursuant to Section 1146(a) of the Bankruptcy

Code, the issuance, transfer, or exchange of any securities under this Plan, the making or

delivery of any mortgage, deed of trust, other security interest, or other instrument of transfer

under, in furtherance of, or in connection with this Plan, shall be exempt from all taxes as

provided in such Section 1146(a) of the Bankruptcy Code.

12.9 Indenture Held Funds. Pursuant to the Cash Collateral Order, the Collateral

Agent, Senior Bond Trustee and Junior Bond Trustee were authorized to apply, allocate and

make payments from all cash, cash equivalents, securities and funds held pursuant to the Senior

Bond Indenture, Junior Bond Indenture or any other document(s) evidencing, securing or

otherwise relating to the Bonds in any manner permitted by those documents. No provision of

this Plan shall impair or affect the foregoing rights of the Collateral Agent, Senior Bond Trustee

or Junior Bond Trustee or otherwise impair any rights or interests of the Collateral Agent, Senior

Bond Trustee, Junior Bond Trustee or Bondholders therein.

12.10 Further Authorizations. The Debtor, each Debtor Subsidiary, and after

the Effective Date, the Reorganized Companies, may seek such orders, judgments, injunctions,

and rulings they deem necessary or useful to carry out the intention and purpose of, and to give



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full effect to, the provisions of this Plan. For the avoidance of doubt, the Collateral Agent,

Senior Bond Trustee and Junior Bond Trustee may each, in its sole discretion, condition the

taking or refraining from taking of any action described in or contemplated by this Plan on its

receipt of direction from holders of the obligations for which it is representative that complies

with the terms of the applicable Bonds and related documents.

12.11 Successors and Assigns. The rights, benefits and obligations of any Entity named

or referred to in this Plan shall be binding on, and shall inure to the benefit of, any heir, executor,

administrator, personal representative, successor or assign of such Entity.

12.12 Modification and Amendment of the Plan. The Debtor may alter, amend, or

modify this Plan, or any other Plan Document, under Section 1127(a) of the Bankruptcy Code at

any time prior to the Confirmation Date so long as such alterations, amendments, or

modifications have been consented in writing by the Collateral Agent and Reinvesting Beneficial

Owner in advance and this Plan, as modified, meets the requirements of Sections 1122 and 1123

of the Bankruptcy Code or the Court has approved such modifications to the Plan. After the

Confirmation Date, and prior to the Effective Date, the Reorganized Companies may, with the

prior written consent of the Collateral Agent, alter, amend, or modify this Plan in accordance

with Sections 1127(b) of the Bankruptcy Code. From and after the Effective Date, the authority

to amend, modify, or supplement the Plan Documents shall be as provided in this Plan, the Plan

Supplement or such documents.

12.13 Exemption From Securities Laws. The reissuance of the Amended Bonds shall

be exempt from registration under any federal, state or local law, rule or regulation pursuant to

Section 1145 of the Bankruptcy Code or other applicable law. Any person who solicits or

participates in the offer, issuance, sale or purchase of the Amended Bonds issued under, or in



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accordance with, this Plan, in good faith and in compliance with the applicable provisions of the

Bankruptcy Code, is not liable, on account of such solicitation or participation, for violation of

an applicable law, rule or regulation governing solicitation of acceptance or rejection of this Plan

or the offer, issuance, sale or purchase of securities pursuant thereto.

ARTICLE 13

RETENTION OF JURISDICTION

Pursuant to Sections 105(a) and 1142 of the Bankruptcy Code, the Bankruptcy

Court shall retain and shall have jurisdiction to the fullest extent provided by applicable law over

any matter arising under the Bankruptcy Code or arising in or related to the Chapter 11 Case or

this Plan, including, without limitation, the following:

13.1 Executory Contracts and Unexpired Leases. To hear and determine any and all

motions or applications (i) for the assumption, assumption and assignment or rejection of

executory contracts or unexpired leases to which the Debtor or a Debtor Subsidiary is a party or

with respect to which the Debtor or a Debtor Subsidiary may be liable, (ii) to review and

determine all Cure Payments under any such assumed executory contract or unexpired lease, and

(iii) to review and determine any Claims resulting from the rejection of any executory contract or

unexpired lease.

13.2 Causes of Action. To determine any and all Causes of Action, including all

adversary proceedings, applications, motions, and contested or litigated matters that may be

pending on the Effective Date or that, pursuant to this Plan, may be instituted by the Reorganized

Companies after the Effective Date.

13.3 Disputed Claims, Contingent Claims and Unliquidated Claims

Allowance/Disallowance. To hear and determine any objections to the allowance of Claims or



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Interests (other than Claims that are Allowed pursuant to the Plan), including but not limited to

any objections to the classification of any Claim, and to allow or disallow any contingent Claim,

Disputed Claim, unliquidated Claim, contingent Interest, disputed Interest in whole or in part,

and to determine any and all disputes among Creditors and holders of Interests with respect to its

Claims and Interests.

13.4 Enforcement/Modification of Plan.

13.4.1 To hear and determine any requests to modify this Plan, remedy any

defect or omission, or reconcile any inconsistency in any order of the Bankruptcy Court,

including the Confirmation Order.

13.4.2 To hear and determine all controversies, suits, and disputes that may

relate to, impact upon, or arise in connection with this Plan, the Plan Supplement or any other

Plan Documents or its interpretation, implementation, enforcement, or consummation.

13.4.3 To hear and determine such other matters that may be set forth in the Plan

and the Confirmation Order or that relate to any transaction required or contemplated by the Plan.

13.4.4 To hear and determine any other matters related hereto, including matters

related to the implementation and enforcement of the Plan, the Confirmation Order, and all orders

entered by the Bankruptcy Court in the Chapter 11 Case.

13.4.5 To hear and determine any issue relating to distributions under the Plan.

13.4.6 To enter such orders as are necessary to implement and enforce the

injunctions described herein, including orders extending the protections afforded under Section

105 of the Bankruptcy Code.

13.4.7 To issue such orders in aid of execution of this Plan to the fullest extent

authorized or contemplated by Section 1142 of the Bankruptcy Code.



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13.5 Compensation of Professionals. To hear and determine all applications for

allowances of compensation and reimbursement of expenses of Professionals, any other fees and

expenses authorized to be paid or reimbursed under this Plan, and to approve the reasonableness

of any payments made or to be made as provided in Section 1129(a)(4) of the Bankruptcy Code.

13.6 Settlements. To the extent that Bankruptcy Court approval is required, to

consider and act on any compromise and settlement of any Claim against or Cause of Action by

the Debtor or the Reorganized Companies.

13.7 Taxes. To hear and determine matters concerning state, local, and federal taxes,

fines, penalties, or additions to taxes for which Debtor, a Debtor Subsidiary or the Debtor in

Possession may be liable, directly or indirectly, in accordance with Sections 346, 505, and 1146

of the Bankruptcy Code.

13.8 506(b) Claims. To determine the amounts, if any, of the reasonable fees, costs

and other charges payable under Section 506(b) of the Bankruptcy Code.

13.9 Specific Purposes. To hear and determine such other matters as may be provided

for in the Confirmation Order or may be appropriate under applicable law.

13.10 Final Decrees. Any order entered pursuant to Section 350(a) of the Bankruptcy

Code and Bankruptcy Rule 3022 closing the Chapter 11 Case shall provide that, notwithstanding

the closure of the Chapter 11 Case: (a) the Court expressly retains jurisdiction over the matters

described in this Article 13, including without limitation, jurisdiction to (i) enforce any of its

orders issued in the Chapter 11 Case; (ii) resolve any cases, controversies, suits or disputes that

may arise in connection with the interpretation or enforcement of the Plan or any contract,

instrument, release or other agreement or document that is entered into or delivered pursuant to

the Plan or that resolves any claim objections or other disputes relating to the Debtor; (iii)



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resolve any other claim objections or other disputes relating to the Debtor; and (iv) consider any

proper requests to reopen the Chapter 11 Cases under Section 350(b) of the Bankruptcy Code;

and (b) the clerk of the Bankruptcy Court shall accept for filing on the docket of Case No. 11-

BK-33095, without the requirement that any party in interest file a request to reopen the Chapter

11 Case, any pleadings, motions, subpoenas, or other papers pursuant to which any party in

interest seeks to invoke the exclusive jurisdiction that the Bankruptcy Court retains pursuant to

Article 13 of this Plan.

[Remainder of Page Intentionally Left Blank.]





53

EXHIBIT B


CHARLOTTE DIVISION

In re: ) Case No. 11-33095)


)Debtor. )

)

NOTICE OF (I) ENTRY OF ORDER CONFIRMING THE DEBTOR’S FIRSTAMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11OF THE BANKRUPTCY CODE AND (II) EFFECTIVE DATE

PLEASE TAKE NOTICE THAT:

An order (the “Confirmation Order”) of Craig Whitley, United States Bankruptcy Judge,

approving the Debtor’s Chapter 11 Plan of Reorganization, dated as of December 21, 2012

[Docket No. 259] (including all exhibits thereto and as the same may be further amended,

modified or supplemented from time to time, the “Plan”)2 was entered on [ ], 2013 [Docket No.

__].

PLEASE TAKE FURTHER NOTICE THAT:

The Confirmation Order is available for inspection at the office of the Clerk of the

Bankruptcy Court for the Western District of North Carolina, Charlotte Division, and may be

reviewed during the regular hours of the Bankruptcy Court or online through the Bankruptcy

Court’s internet website at www.ncwb.uscourts.gov. Please note that a PACER password and

2 Unless otherwise defined herein, all capitalized terms shall have the same meaning as ascribed to them in the Planand the Confirmation Order.

.



54

login are required to access documents on the Bankruptcy Court’s website.


The Effective Date of the Plan is expected to occur on or before March 31, 2013.


The Plan and its provisions are binding on the Debtor, Reorganized Debtor, Reorganized

Companies, Senior Bond Trustee, Junior Bond Trustee, Senior Bond Issuer, Junior Bond

Issuer, Successor Bond Trustee, Successor Bond Issuer, Bond Issuer, Bondholders, Successor

Bondholders, Cogentrix, EIF Calypsyo, Debtor Subsidiaries, General Partnership Interests

Holder, Limited Partnership Interests Holder, Northampton Parties, Northampton Partners,

Reinvesting Beneficial Owner, Board of Control, the Holders of Claims and Interests of the

Debtor or Debtor Subsidiaries (irrespective of whether such Claims or Interests are Impaired

under the Plan or whether the holders of such Claims or Interests have accepted the Plan), any

and all non-Debtor parties to executory contracts and unexpired leases with any of the Debtor

or the Debtor Subsidiaries, any other party in interest in the Chapter 11 Case, and the respective

heirs, executors, administrators, successors, or assigns, if any, of any of the foregoing.

Dated: [ ], 2013.



EXHIBIT B

Case 10-31607 Doc 5157-2 Filed 12/18/15 Entered 12/18/15 19:32:15 Desc Exhibit B Page 1 of 30

_____________________________J. Craig Whitley

United States Bankruptcy Judge

David E. Weich

Clerk, U.S. Bankruptcy CourtWestern District of North Carolina

Jan 22 2010

FILED & JUDGMENT ENTERED



























































EXHIBIT C

Case 10-31607 Doc 5157-3 Filed 12/18/15 Entered 12/18/15 19:32:15 Desc Exhibit C Page 1 of 39





































