Case BLS Doc Filed 03/06/14 Page 1 of 46 EXHIBIT B. [Blackline]

Transcription

1 Case BLS Doc Filed 03/06/14 Page 1 of 46 EXHIBIT B [Blackline]

2 Case BLS Doc Filed 03/06/14 Page 2 of 46 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE X : In re : : Optim Energy, LLC, et al., 1 : : Debtors. : : : X Chapter 11 Case No (BLS) Jointly Administered RE: D.I. 16, 36, 111, 116, 117, 118 and 128 FINAL ORDER (I) AUTHORIZING DEBTORS TO (A) OBTAIN POST- PETITION FINANCING PURSUANT TO 11 U.S.C. 105, 361, 362, 364(c)(1), 364(c)(2), 364(c)(3), 364(d)(1) AND 364(e) AND (B) UTILIZE CASH COLLATERAL OF PRE-PETITION SECURED PARTIES PURSUANT TO 11 U.S.C. 363; (II) GRANTING ADEQUATE PROTECTION TO PRE-PETITION SECURED PARTIES PURSUANT TO 11 U.S.C. 361, 362, 363 AND 364; AND (III) GRANTING RELATED RELIEF Upon the motion (the Motion ), dated February 12, 2014, of Optim Energy, LLC (the Borrower ) and its affiliated debtors, each as debtor and debtor-in-possession (collectively, the Debtors ), in the above-captioned chapter 11 cases (the Cases ) for entry of an interim order (as entered by this Court on February 12, 2014, the Interim Order ) and a final order (this Final Order ), pursuant to sections 105, 361, 362, 363(c)(2), 364(c)(1), 364(c)(2), 364(c)(3), 364(d)(1) and 364(e) of title 11 of the United States Code, 11 U.S.C. 101, et seq. (as amended, the Bankruptcy Code ), Rules 2002, 4001, 6004 and 9014 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ) and Rules , and (m) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the Local Rules ), seeking, among other things: 1 The Debtors in these chapter 11 cases are: Optim Energy, LLC (5215); OEM 1, LLC (5215); Optim Energy Cedar Bayou 4, LLC (5215); Optim Energy Altura Cogen, LLC (5215); Optim Energy Marketing, LLC (5215); Optim Energy Generation, LLC (5215); Optim Energy Twin Oaks GP, LLC (5215); and Optim Energy Twin Oaks, LP

3 Case BLS Doc Filed 03/06/14 Page 3 of 46 (1) authorization for the Borrower to obtain, and be obligated in respect of, post-petition financing (the DIP Facility ), and for all of the other Debtors (the Guarantors ) to guarantee and be jointly and severally obligated to pay, the Borrower s obligations in connection with the DIP Facility, up to the aggregate principal amount of $115,000,000 (the actual available principal amount at any time being subject to those terms and conditions set forth in this Final Order and the DIP Credit Documents (as defined below)), from Cascade Investment, L.L.C. ( Cascade ) and other financial institutions, if any, to be determined by Cascade (collectively, the DIP Lenders ) for which Wells Fargo Bank, N.A. ( Wells Fargo ) shall act as administrative agent (in such capacity, the Administrative Agent ) and as the issuing bank for the letters of credit issued under the DIP Facility (in such capacity, the L/C Issuer ), pursuant to the terms of this Final Order and that certain Senior Secured Debtor in Possession Credit, Security and Guaranty Agreement dated as of February 12, 2014, by and among the Borrower, the Guarantors, the DIP Lenders, the Administrative Agent and the L/C Issuer, attached hereto as Exhibit A (as may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the Interim Order and this Final Order, the DIP Credit Agreement ), 2 and any related documents (including, without limitation, any letter of credit applications and related documents) required to be executed or delivered by or in connection with the DIP Credit Agreement (as may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the Interim Order and this Final Order, collectively, the DIP Credit Documents ); (5215). The Debtors main corporate and mailing address for purposes of these chapter 11 cases is: c/o Competitive Power Ventures, Inc., 8403 Colesville Road, Suite 915, Silver Spring, MD Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Motion or the DIP Credit Agreement, as applicable. 2

4 Case BLS Doc Filed 03/06/14 Page 4 of 46 (2) authorization for the Debtors to execute and deliver the DIP Credit Documents and to perform such other and further acts as may be required in connection with the DIP Credit Documents; (3) the granting of adequate protection of the liens and security interests granted in favor of Cascade, as collateral agent, on behalf of and for the benefit of Cascade and ECJV Holdings, LLC ( ECJV, and together with Cascade, the Pre-Petition Secured Parties ) under the Security Documents (as defined below), which Pre-Petition Collateral (as defined below), other than the NRG Lien (as defined below), is being primed by the liens securing the repayment of the DIP Facility, in accordance with this Final Order; (4) authorization for the Debtors use of cash collateral (as such term is defined in section 363(a) of the Bankruptcy Code) constituting Pre-Petition Collateral (including, without limitation, all cash and other amounts from time to time on deposit or maintained by the Debtors in any account or accounts held at Wells Fargo and controlled by Cascade and any cash proceeds of the disposition of any Pre-Petition Collateral, the Cash Collateral ) on the terms and conditions set forth in this Final Order and in the DIP Credit Agreement and in accordance with the Budget (as defined below), and the granting of adequate protection to the Pre-Petition Secured Parties with respect to such use of Cash Collateral; (5) approval of certain stipulations by the Debtors as set forth in this Final Order with respect to the Pre-Petition Indebtedness Documents and the Pre-Petition Facility (each as defined below) and the liens and security interests arising therefrom; (6) authorization for the Debtors to grant security interests, liens and superpriority claims (including superpriority claims pursuant to section 364(c)(1) of the Bankruptcy Code, liens pursuant to sections 364(c)(2) and 364(c)(3) of the Bankruptcy Code and priming liens pursuant to 3

5 Case BLS Doc Filed 03/06/14 Page 5 of 46 section 364(d) of the Bankruptcy Code) to the Secured Parties (as defined below), payable from, and having recourse to, all pre-petition property, including, but not limited to, all Pre-Petition Collateral (except with respect to the NRG Lien and the Non-Primed Liens (as defined below in paragraph 5)), and post-petition property of the Debtors estates and all proceeds thereof (except that the DIP Liens (as defined below) shall not include a lien on Avoidance Actions and Avoidance Proceeds (each as defined below)), subject only to the Carve-Out (as defined below) and the NRG Lien and any other Non-Primed Lien; (7) authorization for (x) the Administrative Agent, at the direction of the Majority Lenders of the DIP Lenders, to terminate the DIP Credit Agreement, and (y) the Administrative Agent, the DIP Lenders and the Pre-Petition Secured Parties to terminate the Debtors use of Cash Collateral, each upon the occurrence and continuance of an Event of Default (as defined in the DIP Credit Agreement) on terms specified herein and in the DIP Credit Agreement; (8) subject only to and effective upon entry of this Final Order, authorization of the limitation of the Debtors right to assert claims to surcharge against the DIP Collateral (as defined below) pursuant to section 506(c) of the Bankruptcy Code to the extent set forth in paragraph 7 below; (9) modification of the automatic stay imposed under section 362 of the Bankruptcy Code to the extent necessary to permit the Debtors, the Administrative Agent, the L/C Issuer, the DIP Lenders and the Pre-Petition Secured Parties to implement and effectuate the terms and provisions of the DIP Credit Documents and this Final Order; (10) the scheduling of a final hearing (the Final Hearing ) to consider entry of this Final Order granting the relief requested in the Motion on a final basis, authorizing the balance of 4

6 Case BLS Doc Filed 03/06/14 Page 6 of 46 the borrowings under the DIP Credit Documents on a final basis as set forth in the Motion and the DIP Credit Documents, and approving the Debtors notice procedures with respect thereto; and (11) waiver of any applicable stay (including under Rule 6004 of the Bankruptcy Rules) and the provision of immediate effectiveness of this Final Order. The interim hearing on the Motion having been held by this Court on February 12, 2014 (the Interim Hearing ) and the Interim Order having been entered by this Court on February 12, 2014; and the Final Hearing having been held by this Court on March 6, 2014; and based upon all of the pleadings filed with this Court, the evidence presented at the Interim Hearing and the Final Hearing, and the entire record herein; and this Court having heard and resolved or overruled any objections to the final relief requested in the Motion; and the Court having noted the appearances of all parties in interest; and it appearing that the relief requested in the Motion is in the best interests of the Debtors, their estates, and creditors; and the Debtors having provided notice of the Motion as set forth in the Motion, and of the Final Hearing as directed by the Court at the Interim Hearing; and it appearing that no other or further notice of the Motion or the Final Hearing is necessary; and after due deliberation and consideration, and sufficient cause appearing therefor; and all objections to the entry of the Final Order, if any, having been withdrawn, resolved or overruled as provided in this Final Order or on the record of the Final Hearing: IT IS HEREBY FOUND AND DETERMINED THAT: 3 A. Background. On February 12, 2014 (the Petition Date ), the Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code with the Court. The Debtors have continued to operate their businesses as debtors-in-possession under sections 1107 and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in the Cases. The 3 Findings of fact shall be construed as conclusions of law and conclusions of law shall be construed as findings of fact to the fullest extent of the law. See Fed. R. Bankr. P

7 Case BLS Doc Filed 03/06/14 Page 7 of 46 Cases are being jointly administered for procedural purposes only under Case No (BLS). As of the date of the Final Hearing, the Office of the United States Trustee for the District of Delaware (the U.S. Trustee ) had not appointed an official committee of unsecured creditors in the Cases. If the U.S. Trustee appoints an official committee of unsecured creditors in these Cases in the future, such official committee of unsecured creditors shall be defined as the Committee hereunder. B. Jurisdiction. This Court has jurisdiction over the Motion pursuant to 28 U.S.C. 157 and Venue of these Cases and the Motion in this district is proper under 28 U.S.C and 1409 and this matter is a core proceeding pursuant to 28 U.S.C. 157(b)(2). The statutory predicates for the relief sought herein are sections 105, 361, 362, 363, 364 and 507 of the Bankruptcy Code and Bankruptcy Rules 2002, 4001, 6004 and 9014 and the applicable Local Rules. C. Notice. The Debtors have provided notice of the Motion and the Final Hearing via electronic transmission, first class mail, hand delivery or overnight mail to [(i) the U.S. Trustee, (ii) the Internal Revenue Service, (iii) the Delaware Attorney General, (iv) the Securities and Exchange Commission, (v) the Debtors thirty largest unsecured creditors on a consolidated basis, (vi) counsel for Cascade and ECJV, (vii) counsel for Wells Fargo, (viii) other parties who filed a request for notice in the Cases and (iv) the other persons listed on Exhibit A to the Affidavit of Service dated February 17, 2014 [Docket No. 67]]. Under the circumstances, the notice given by the Debtors of the Motion, the relief requested therein, the Interim Hearing, the Interim Order, the Final Hearing and the relief requested at the Final Hearing constitutes appropriate, due and sufficient notice thereof and complies with Bankruptcy Rules 2002 and 4001 and the Local Rules, and no further notice of any of the foregoing is necessary or required. 6

8 Case BLS Doc Filed 03/06/14 Page 8 of 46 D. Debtors Stipulations. Without prejudice to the rights of the Committee or any other party in interest (but which rights are subject to the limitations thereon contained in paragraphs 14 and 15 hereof), the Debtors admit, stipulate and agree that: (i) Pursuant to that certain Credit Agreement dated as of June 1, 2007, between the Borrower and Wells Fargo (as amended, restated, supplemented or otherwise modified as of the date hereof, the Pre-Petition Credit Agreement ), Wells Fargo (in its capacity as the pre-petition lender under the Pre-Petition Credit Agreement, the Pre-Petition Lender ) agreed to extend a revolving credit facility to, and issue letters of credit for, the Borrower from time to time in an aggregate principal amount of up to $1,000,000,000 (the Pre-Petition Facility ). (ii) Pursuant to the Continuing Guaranty issued by Cascade and the Continuing Guaranty issued by ECJV, respectively, each dated as of June 1, 2007, and each in favor of the Pre-Petition Lender (as each may be amended, restated, supplemented or otherwise modified from time to time, the Guarantees ), Cascade and ECJV irrevocably and unconditionally guaranteed and promised to pay and perform the Borrower s obligations under and pursuant to the Pre-Petition Credit Agreement. 7

9 Case BLS Doc Filed 03/06/14 Page 9 of 46 (iii) Pursuant to that certain Guaranty Reimbursement Agreement dated as of June 1, 2007, in favor of Cascade and ECJV (as amended, restated, supplemented or otherwise modified as of the date hereof, the Reimbursement Agreement ), the Borrower and certain of its Debtor affiliates agreed, jointly and severally, to reimburse Cascade and ECJV for any and all payments made and liabilities incurred under or pursuant to the Guarantees, including interest and all reasonable and out-of-pocket charges and expenses (including reasonable attorneys fees) incurred in connection with the Guarantees or the Guarantor Documents (as defined below) (collectively, the Reimbursement Liabilities ). (iv) Pursuant to (a) that certain Pledge & Security Agreement dated as of June 1, 2007, by and among the Borrower, Cascade, as collateral agent for the benefit of itself and ECJV, and each other party signatory thereto (as amended, restated, supplemented or otherwise modified as of the date hereof, the Security Agreement, and together with the Reimbursement Agreement, the Guarantor Documents ), (b) that certain Deed of Trust, Assignment of Rents and Security Agreement dated as of June 1, 2007 by Altura Power L.P. 4 (as amended, restated, supplemented or otherwise modified as of the date hereof, the Mortgage ), and (c) all other mortgages, security agreements, control agreements and other instruments or documents delivered by any Debtor to create or grant to the Pre-Petition Secured Parties any lien on any property as security for the Reimbursement Liabilities or to perfect, assure or preserve any lien or any rights or remedies created thereby (clauses (a), (b) and (c), collectively, the Security Documents, and together with the Pre-Petition Credit Agreement, the Guarantees, and the Reimbursement Agreement, the Pre-Petition Indebtedness Documents ) each Debtor granted to the Pre-Petition Secured Parties, to secure the Reimbursement Liabilities and all other obligations under the Reimbursement 4 Altura Power L.P. is the predecessor in interest of Debtor Optim Energy Twin Oaks, LP. 8

10 Case BLS Doc Filed 03/06/14 Page 10 of 46 Agreement, a lien on and first priority security interest in all right, title and interest in the Collateral (as defined in the Security Agreement) and the Trust Estate (as defined in the Mortgage), including, but not limited to, all of such Debtors accounts, deposit accounts, instruments, documents, chattel paper, goods (including inventory, equipment, fixtures and motor vehicles), payment intangibles, software, general intangibles, letter-of-credit rights, securities accounts, investment property, financial assets, intellectual property, commercial tort claims, easements, rights-of-way, the shares of common stock and preferred stock of, or partnership, limited liability company and other ownership interests in each of its subsidiaries, leasehold interests, buildings, structures, fixtures, other improvements, machinery, equipment, fittings, boilers, turbines, other articles of personal property, raw materials, permits and other rights, powers, privileges and benefits obtained from governmental authorities, lands, interests in lands, tenements and herediments, all other property and all proceeds, products, accessions, rents, income, benefits, remainders, reversions, revenues, issues, royalties and profits of or in respect of any of the foregoing, in each case whether now existing or thereafter acquired, but excluding the Excepted Property (as defined in the Security Agreement) (collectively, the Pre-Petition Reimbursement Collateral ). (v) Optim Energy Altura Cogen, LLC ( Altura Cogen ) pledged a first priority lien on and security interest in certain rotor equipment in favor of NRG Energy Services LLC ( NRG ) to secure obligations under the Rotor Life Management Agreement, dated as of August 12, 2013, between Altura Cogen and NRG (the NRG Lien ), which rotor equipment the Pre-Petition Secured Parties have a perfected second priority lien and security interest (the NRG Lien together with the Pre-Petition Reimbursement Collateral, the Pre-Petition Collateral ). 9

11 Case BLS Doc Filed 03/06/14 Page 11 of 46 (vi) As of the filing of the Petitions in these Cases, the aggregate amount of the outstanding Obligations (as defined in the Pre-Petition Credit Agreement) due and payable by the Borrower to the Pre-Petition Lender under the Pre-Petition Credit Agreement, and which constitute Guaranteed Obligations (as defined in the Guarantees) of Cascade and ECJV under the Guarantees, equaled $712,974,677.95, consisting of: (a) $712,000,000 in respect of the outstanding principal amount of the Obligations; (b) $476, in respect of accrued and unpaid interest on such unpaid principal amount; (c) $28, in respect of the accrued and unpaid unused commitment fee due under Section 3.2(a) of the Pre-Petition Credit Agreement; (d) $26, in respect of the accrued and unpaid letter of credit fees under Section 3.2(b) of the Pre-Petition Credit Agreement; (e) $53, in respect of Eurodollar Rate Loan (as defined in the Pre-Petition Credit Agreement) estimated breakage costs due under Section 3.4(e) of the Pre-Petition Credit Agreement; and (f) $389, in respect of fees, reasonable costs and expenses incurred or estimated to be incurred by the Pre-Petition Lender, through the time of the hearing on the First-Day Motions in connection with these Cases (collectively, the Outstanding Pre-Petition Facility Indebtedness ). (vii) As a result of Cascade s payment in full of such Outstanding Pre-Petition Facility Indebtedness, including delivery of cash collateral in respect of outstanding letters of credit under the Pre-Petition Facility, to the Pre-Petition Lender in accordance with the Guarantee, on the Petition Date and immediately after the commencement of these Cases, the Reimbursement Liabilities for which the Borrower and certain of its affiliates are indebted and jointly and severally liable to the Pre-Petition Secured Parties, without defense, counterclaim, recoupment or offset of any kind, is in the aggregate principal amount of $712,974, in respect of payments made on the Outstanding Pre-Petition Facility Indebtedness and $41,000,000 in respect of cash collateral 10

12 Case BLS Doc Filed 03/06/14 Page 12 of 46 delivered to the Pre-Petition Lender for the issued and outstanding letters of credit, in each case, incurred pursuant to, and in accordance with, the terms of the Guarantees (collectively, the Pre-Petition Indebtedness ). (viii) Prior to the payments made on the Outstanding Pre-Petition Facility Indebtedness and the cash collateralization of the issued and outstanding letters of credit by Cascade, as described in clause (vii) above, the Outstanding Pre-Petition Facility Indebtedness constituted the legal, valid and binding obligations of the Debtors, enforceable against them in accordance with the terms of the Pre-Petition Indebtedness Documents (other than in respect of the stay of enforcement arising from section 362 of the Bankruptcy Code). (ix) The Pre-Petition Indebtedness constitutes the legal, valid and binding obligations of the Debtors, enforceable against them in accordance with the terms of the Pre-Petition Indebtedness Documents (other than in respect of the stay of enforcement arising from section 362 of the Bankruptcy Code). (x) No portion of the Pre-Petition Facility, the Pre-Petition Indebtedness or any payment on account thereof is subject to avoidance, recharacterization, recovery, reduction, subordination, disallowance, impairment or any other challenges pursuant to the Bankruptcy Code or applicable nonbankruptcy law and the Debtors do not have, hereby forever release, and are forever barred from bringing any claims (as such term is defined in the Bankruptcy Code), counterclaims, cross claims, causes of action, defenses, recoupment or setoff rights, whether arising under the Bankruptcy Code or otherwise, against the Pre-Petition Lender and the Pre-Petition Secured Parties, solely in their capacities as the Pre-Petition Lender or Pre-Petition Secured Parties, respectively, and not in any other capacity or in respect to any other relationship the Pre-Petition Lender or the Pre-Petition Secured Parties may have, or have had, with or in 11

13 Case BLS Doc Filed 03/06/14 Page 13 of 46 respect to the Debtors, whether arising at law or in equity, including, without limitation, any recharacterization, subordination, avoidance or other claim arising under the Bankruptcy Code or otherwise. (xi) The liens and security interests granted to, or for the benefit of, the Pre-Petition Secured Parties, including with respect to the Cash Collateral, pursuant to the Security Documents and in connection with the Pre-Petition Indebtedness constitute legal, valid, binding, enforceable (other than in respect of the stay of enforcement arising from section 362 of the Bankruptcy Code) and perfected first priority liens on and security interests in the Pre-Petition Collateral and are not subject to defense, counterclaim, avoidance, recharacterization, recovery, disallowance or subordination pursuant to the Bankruptcy Code or applicable nonbankruptcy law or regulation by any person or entity, except insofar as such liens and security interests are subject to the DIP Liens (as defined below), the NRG Lien and the Carve-Out. E. Findings Regarding the DIP Facility and Use of Cash Collateral. (i) (ii) Good cause has been shown for the entry of this Final Order. The Debtors need to obtain the balance of the post-petition financing under the DIP Facility and to use Cash Collateral in order to, among other things, permit the orderly continuation of the operation of their businesses, maintain business relationships with managers, vendors and suppliers, make capital expenditures, satisfy other working capital and operational needs, and fund the administration and prosecution of the Cases. The access of the Debtors to sufficient working capital and liquidity through the use of Cash Collateral, incurrence of post-petition financing under the DIP Facility and other financial accommodations is vital to the preservation and maintenance of the going concern value of the Debtors estates and to a successful reorganization of the Debtors. 12

14 Case BLS Doc Filed 03/06/14 Page 14 of 46 (iii) The Debtors are unable to obtain sufficient financing on more favorable terms from sources other than the DIP Lenders under the DIP Credit Documents and are unable to obtain adequate unsecured credit allowable under section 503(b)(1) of the Bankruptcy Code as an administrative expense. The Debtors are also unable to obtain secured credit allowable under sections 364(c)(1), 364(c)(2) and 364(c)(3) of the Bankruptcy Code without the Debtors (i) granting to the Secured Parties, subject to the NRG Lien, the Non-Primed Liens and the Carve-Out as provided for herein, the DIP Liens and the Superpriority Claims (as defined below) under the terms and conditions set forth in this Final Order and in the DIP Credit Documents. The only available source of secured credit available to the Debtors, other than the use of Cash Collateral, is the DIP Facility. The Debtors require both additional financing under the DIP Facility and the continued use of Cash Collateral under the terms of this Final Order in order to satisfy their post-petition liquidity needs. (iv) The Administrative Agent, the L/C Issuer and the DIP Lenders are willing to provide the DIP Facility and the Pre-Petition Secured Parties are willing to consent to the use of their Cash Collateral, subject to the terms and conditions set forth in the DIP Credit Documents and the provisions of this Final Order, as applicable, and provided that the DIP Liens, the Superpriority Claims, the Adequate Protection Obligations (as defined below) and other protections granted by this Final Order and the DIP Credit Documents will not be affected by any subsequent reversal or modification of this Final Order or any other order, as provided in section 364(e) of the Bankruptcy Code, which is applicable to the DIP Facility and the Cash Collateral use approved by this Final Order. The Administrative Agent, the L/C Issuer and the DIP Lenders have acted in good faith in agreeing to provide the DIP Facility approved by this Final Order and as further evidenced by the DIP Credit Documents, and the Pre-Petition Secured Parties have acted in 13

15 Case BLS Doc Filed 03/06/14 Page 15 of 46 good faith in consenting to the Debtors use of their Cash Collateral pursuant to the terms of this Final Order, and their reliance on the assurances referred to above is in good faith. (v) The DIP Credit Documents and the DIP Facility provided for thereunder, and the use of Cash Collateral, each as authorized hereunder, have been negotiated in good faith and at arm s length among the Debtors, the DIP Lenders, the Administrative Agent, the L/C Issuer and the Pre-Petition Secured Parties, respectively, and the terms of the DIP Facility and the use of Cash Collateral, respectively, are fair and reasonable under the circumstances, reflect the Debtors exercise of prudent business judgment consistent with their fiduciary duties and are supported by reasonably equivalent value and fair consideration. All of the Debtors obligations and indebtedness arising under, in respect of, or in connection with the DIP Facility and the DIP Credit Documents and the rights granted in the Interim Order and this Final Order, including without limitation, all loans made to, guarantees issued by and all letters of credit issued for the account of, the Debtors pursuant to the DIP Credit Documents, including credit extended in respect of depository, treasury, and cash management services and other clearing services provided by the Administrative Agent, the L/C Issuer or their affiliates (all of the foregoing collectively, the DIP Obligations ), and the Adequate Protection Obligations, are being extended or received, as appropriate, by the Administrative Agent, the L/C Issuer, the DIP Lenders and the Pre-Petition Secured Parties and their affiliates (and the successors and assigns of each of the foregoing) in good faith, as that term is used in section 364(e) of the Bankruptcy Code, and in express reliance upon the protections offered by section 364(e) of the Bankruptcy Code, and shall be entitled to the full protection of section 364(e) of the Bankruptcy Code in the event that this Final Order or any provision hereof is vacated, reversed or modified, on appeal or otherwise. 14

16 Case BLS Doc Filed 03/06/14 Page 16 of 46 (vi) The Debtors have requested entry of this Final Order pursuant to Bankruptcy Rules 4001(b)(2) and 4001(c)(2). The authorization granted herein on a final basis to use Cash Collateral and to enter into the DIP Credit Documents and to borrow up to an aggregate amount of $115,000,000 (including, for the avoidance of doubt, any part of the $75,000,000 authorized to be borrowed under the Interim Order on or after the date of the entry of the Interim Order but before the date of the entry of the Final Order (the Interim Period )), is necessary to preserve the going concern value of the Debtors and their estates. Absent granting the relief set forth in this Final Order, the Debtors estates will be immediately and irreparably harmed. Consummation of the DIP Facility and the use of Cash Collateral in accordance with the Interim Order, this Final Order and the DIP Credit Documents, as applicable, are therefore in the best interests of the Debtors and their estates and creditors. NOW, THEREFORE, on the Motion of the Debtors and the record before this Court with respect to the Motion, including the record made during the Interim Hearing and the Final Hearing, and good and sufficient cause appearing therefor, IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT: 1. Approval of Motion. The Motion is granted on a final basis in accordance with the terms of this Final Order. Any objections to the Motion with respect to the entry of this Final Order that have not been withdrawn, waived or settled, and all reservations of rights included therein, are hereby denied and overruled. 2. Authorization of the DIP Facility and the DIP Credit Documents. (a) Each of the Debtors were, by the Interim Order, and hereby are, authorized to execute, issue, deliver, enter into and adopt, as the case may be, the DIP Credit Documents, including the DIP Credit Agreement, and the DIP Credit Documents are hereby approved. 15

17 Case BLS Doc Filed 03/06/14 Page 17 of 46 (b) The Borrower was, by the Interim Order, and is hereby authorized to borrow money and obtain letters of credit pursuant to the DIP Credit Documents, and the Guarantors are hereby authorized to guarantee such borrowings and letters of credit and the Borrower s obligations with respect to such borrowings and letters of credit up to an aggregate principal or face amount of $115,000,000 (which amount is inclusive of the $75,000,000 authorized to be borrowed under the Interim Order during the Interim Period), plus interest, fees and other expenses and amounts provided for in the DIP Credit Documents, in accordance with the terms of the Interim Order, this Final Order and the DIP Credit Documents, which borrowings and letters of credit shall be used for all purposes permitted under the DIP Credit Documents, including, without limitation, to provide working capital for the Debtors, for other general corporate purposes, certain hedging obligations relating to energy trading contracts, replacement of existing letters of credit and to pay restructuring expenses and professional fees pursuant to the Budget (as defined below) (but which rights are subject to the limitations thereon contained in paragraph 15 hereof). (c) In furtherance of the foregoing and without further approval of this Court, each Debtor was, by the Interim Order, and hereby is authorized and directed to perform all acts, to make, execute and deliver all instruments and documents (including, without limitation, the execution or recordation of security agreements, mortgages and financing statements), and, without further application to the Court, to promptly pay all fees, that may be reasonably required or necessary for the Debtors performance of their obligations under the DIP Credit Documents, including, without limitation: (i) the execution, delivery and performance of the DIP Credit Documents and any exhibits attached thereto, including, without limitation, the DIP Credit 16

18 Case BLS Doc Filed 03/06/14 Page 18 of 46 Agreement and all related documents contemplated thereby, any letter of credit application and all related documents contemplated there by and any amendment or extension of an existing outstanding letter of credit under the Pre-Petition Facility; (ii) the execution, delivery and performance of one or more amendments to, modifications of, or waivers relating to the DIP Credit Documents for, among other things, the purpose of adding additional financial institutions as DIP Lenders and reallocating the commitments for the DIP Facility among the DIP Lenders, in each case in such form as the Debtors, the Administrative Agent and the DIP Lenders (or any portion thereof as provided in the DIP Credit Documents) may agree (it being understood that no further approval of the Court shall be required for non-material amendments to or waivers relating to the DIP Credit Agreement (and, subject to and effective only upon entry of this Final Order, any fees paid in connection therewith) or modifications of the Budget that do not shorten the maturity of the extensions of credit thereunder, increase the commitments thereunder or otherwise do not materially change the terms of the DIP Credit Documents in a manner adverse to the interests of the Debtors); (iii) the accrual and payment of all fees and other amounts payable under the terms of the DIP Credit Documents, including the Commitment Fee and any Undrawn Fee, Extension Fee, Agency Fee and Letter of Credit issuance fees (each as defined in the DIP Credit Agreement) and all reasonable and documented out-of-pocket costs and expenses of the Administrative Agent, the L/C Issuer, the DIP Lenders and the Pre-Petition Secured Parties in accordance with the terms of the DIP Credit Agreement (including the reasonable and documented fees, expenses and disbursements of legal counsel, financial advisors and other consultants advising the Administrative Agent and the L/C Issuer, and solely with respect to the DIP Lenders 17

19 Case BLS Doc Filed 03/06/14 Page 19 of 46 and the Pre-Petition Secured Parties, respectively, collectively, the reasonable and documented fees, expenses and disbursements of one (1) national counsel, one (1) Delaware counsel and one (1) financial advisor) promptly upon receipt of invoices therefor as provided in the DIP Credit Documents (subject in all respects to applicable privilege or work product doctrines) and without the necessity of filing motions or fee applications; and (iv) the performance of all other acts required under or in connection with the DIP Credit Documents. (d) Upon execution and delivery of the DIP Credit Documents, the DIP Credit Documents shall constitute valid and binding obligations of the Debtors, enforceable against each Debtor party thereto in accordance with the terms of the DIP Credit Documents and this Final Order. No obligation, payment, transfer or grant of security interest under the DIP Credit Documents, the Interim Order or this Final Order shall be stayed, restrained, voidable, or recoverable under the Bankruptcy Code or any applicable law (including, without limitation, under section 502(d) of the Bankruptcy Code), or be subject to any defense, reduction, setoff, recoupment or counterclaim. 3. Superpriority Claims. Pursuant to section 364(c)(1) of the Bankruptcy Code, all of the DIP Obligations shall constitute allowed senior administrative expense claims against each of the Debtors (without the need to file any proof of claim or request for payment of administrative expense) with priority over any and all other administrative expenses, adequate protection claims, diminution claims (including all Adequate Protection Obligations (as defined below)) and all other claims against the Debtors, now existing or hereafter arising, of any kind or nature whatsoever, including, without limitation, all administrative expenses of the kind specified in sections 503(b) and 507(b) of the Bankruptcy Code, and over any and all other administrative expenses or other 18

20 Case BLS Doc Filed 03/06/14 Page 20 of 46 claims arising under sections 105, 326, 328, 330, 331, 503(b), 506(c) (with any claims arising under section 506(c) only subject to the entry of this Final Order), 507(a), 507(b), 546, 726, 1113 or 1114 of the Bankruptcy Code (the Superpriority Claims ), whether or not such expenses or claims may become secured by a judgment lien or other non-consensual lien, levy or attachment, which allowed claims shall for purposes of section 1129(a)(9)(A) of the Bankruptcy Code be considered administrative expenses allowed under section 503(b) of the Bankruptcy Code, and which shall be payable from and have recourse to all pre- and post-petition property of the Debtors and their estates and all proceeds thereof, including, without limitation, all Avoidance Actions and Avoidance Proceeds (each as defined below), subject, as to priority, only to the Carve-Out. 4. Carve-Out. For purposes of this Final Order, the Carve-Out shall mean the sum of (i) any fees required to be paid to the Clerk of the Court and to the Office of the United States Trustee under section 1930 of title 28 of the United States Code, (ii) any and all allowed and unpaid claims of professionals whose retention is approved by the Court during the Cases pursuant to Sections 327 and 1103 of the Bankruptcy Code for unpaid fees and expenses incurred (A) prior to the occurrence and continuation of an Event of Default (as defined in the DIP Credit Agreement, an Event of Default ), whether allowed before or after such Event of Default, and (B) after the occurrence and during the continuance of an Event of Default, in an aggregate amount not to exceed $350,000, which amount may be used subject to and effective only upon entry of this Final Order, to pay any fees or expenses incurred by the Debtors, in an amount not exceeding $250,000, and the Committee, in an amount not exceeding $100,000, in respect of (x) allowances of compensation for services rendered or reimbursement of expenses awarded by the Court to the Debtors or the Committee s professionals and (y) the reimbursement of expenses allowed by the Court incurred by the Committee members in the performance of their duties (but excluding fees 19

21 Case BLS Doc Filed 03/06/14 Page 21 of 46 and expenses of third party professionals employed by such members). Prior to the occurrence of an Event of Default, the Debtors shall be permitted to pay fees incurred by Court-approved professionals employed by the Debtors or any Committee in accordance with the interim compensation procedures established by the Court, the Budget and applicable law. For the avoidance of doubt, the dollar limitation in clause 4(ii)(B) on fees and expenses shall neither be reduced nor increased by the amount of compensation or reimbursement of allowed fees and/or expenses incurred, awarded or paid prior to the occurrence of an Event of Default in respect of which the Carve-Out is invoked, and nothing herein shall be construed to impair the ability of any party to object to the fees, expenses, reimbursement or compensation described herein. Furthermore, subject to the provisions of paragraph 15 (including the provision of $125,000 for the Committee for the investigation of claims and liens during the Challenge Period (as defined below)), the Carve-Out shall not include, apply to, or be available for any fees or expenses incurred by any party, including any Debtor, any committee (including the Committee) or any professional, in connection with (1) the investigation, initiation or prosecution of any claims (including for the avoidance of liens or security interests) against the Administrative Agent, the L/C Issuer, any DIP Lender, the Pre-Petition Lender or the Pre-Petition Secured Parties, in connection with or related to the Pre-Petition Facility, the Pre-Petition Indebtedness Documents, the DIP Facility and/or the Pre-Petition Collateral, or preventing, hindering or delaying the assertion of enforcement of any lien, claim, right or security interest or realization upon any of the DIP Collateral by the Secured Parties, (2) a request to use cash collateral (as such term is defined in section 363 of the Bankruptcy Code) without the prior consent of the Majority Lenders of the DIP Lenders and the Pre-Petition Secured Parties, (3) a request, without the prior consent of the Administrative Agent and the DIP Lenders, for authorization to obtain debtor-in-possession financing or other financial 20

22 Case BLS Doc Filed 03/06/14 Page 22 of 46 accommodations pursuant to Section 364(c) or (d) of the Bankruptcy Code that does not indefeasibly repay in full in cash the DIP Obligations (including cash collateralizing any letters of credit), or (4) any act that has the effect of materially or adversely modifying or compromising the rights and remedies of the Administrative Agent, the L/C Issuer, any DIP Lender, or the Pre-Petition Secured Parties as set forth herein and in the DIP Credit Documents, or that results in the occurrence of an Event of Default, unless otherwise agreed by the Administrative Agent, the L/C Issuer, the DIP Lenders and the Pre-Petition Secured Parties; provided, that no consent of the Administrative Agent, the L/C Issuer, the DIP Lenders, or the Pre-Petition Secured Parties to any of the actions described in the foregoing clauses (2) through (4) shall be deemed a consent to the relief sought by the Debtors by the Administrative Agent, the L/C Issuer, any DIP Lender or the Pre-Petition Secured Parties or a waiver of the rights of the Administrative Agent, the L/C Issuer, any DIP Lender or the Pre-Petition Secured Parties to object to any such actions of the Debtors. 5. DIP Liens. As security for the DIP Obligations, effective and perfected as of the Petition Date and without the necessity of the execution by the Debtors (or recordation or other filing) of mortgages, security agreements, control agreements, pledge agreements, financing statements or other similar documents, or the possession or control by the Administrative Agent, the L/C Issuer or any DIP Lender of, or over, any DIP Collateral, the following security interests and liens, were by the Interim Order, and hereby are granted by the Debtors to the Administrative Agent, the L/C Issuer and each of the DIP Lenders (each a Secured Party and collectively, the Secured Parties ) (all property of the Debtors identified in clauses (a), (b) and (c) below being collectively referred to as the DIP Collateral ), subject, only in the event of the occurrence and during the continuance of an Event of Default to the Carve-Out, and the interest in the NRG Lien 21

23 Case BLS Doc Filed 03/06/14 Page 23 of 46 (all such liens on and security interests in the DIP Collateral granted to the Secured Parties, pursuant to the Interim Order, this Final Order and the DIP Credit Documents, the DIP Liens ): (a) First Lien on Cash Balances and Other Unencumbered Property. Pursuant to section 364(c)(2) of the Bankruptcy Code, a valid, binding, continuing, enforceable, fully-perfected first priority senior security interest in and lien upon all pre- and post-petition property of the Debtors, whether existing on the Petition Date or thereafter acquired, that, on or as of the Petition Date or the date acquired (if acquired after the Petition Date) is not subject to valid, perfected and non-avoidable liens, if any (collectively, Unencumbered Property ), including, without limitation, any such unencumbered cash of the Debtors (whether maintained with the Administrative Agent or otherwise) and any investment of such cash, inventory, accounts receivable, other rights to payment whether arising before or after the Petition Date, including, without limitation, contracts, properties, plants, equipment, general intangibles, documents, instruments, interests in leaseholds, real properties, patents, copyrights, trademarks, trade names, other intellectual property, equity interests, and the proceeds of all of the foregoing. The Unencumbered Property shall not include the Debtors claims and causes of action under sections 544, 545, 547, 548, 549 and 550 of the Bankruptcy Code, or any other avoidance actions under the Bankruptcy Code (collectively, Avoidance Actions ), and shall not include any proceeds or property recovered, unencumbered or otherwise, that are the subject of successful Avoidance Actions, whether by judgment, settlement or otherwise ( Avoidance Proceeds ). (b) Liens Senior to Pre-Petition Secured Parties Liens. Other than with respect to the NRG Lien, pursuant to section 364(d)(1) of the Bankruptcy Code, a valid, binding, continuing, enforceable, fully-perfected first priority senior priming security interest in and lien upon all pre- and post-petition property of the Debtors (including, without limitation, Cash 22

24 Case BLS Doc Filed 03/06/14 Page 24 of 46 Collateral), whether now existing or hereafter acquired, of the same nature, scope and type as the Pre-Petition Collateral. Such security interests and liens shall be senior in all respects to the interests in such property of the Pre-Petition Secured Parties arising from current and future liens of the Pre-Petition Secured Parties (including, without limitation, adequate protection liens granted hereunder), but shall not be senior to the NRG Lien, any valid, perfected and unavoidable interests of any other parties arising out of liens, if any, on such property existing immediately prior to the Petition Date that were senior in priority to the liens of the Pre-Petition Secured Parties, or to any valid, perfected and unavoidable interests in such property arising out of liens arising subsequent to the Petition Date as permitted by section 546(b) of the Bankruptcy Code that are senior in priority to the liens of the Pre-Petition Secured Parties (the Non-Primed Liens ). (c) Liens Junior to Certain Other Liens. Other than with respect to the NRG Lien, pursuant to section 364(c)(3) of the Bankruptcy Code, a valid, binding, continuing, enforceable, fully-perfected security interest in and lien upon all pre- and post-petition property of the Debtors (other than the property described in clauses (a) or (b) of this paragraph 5, as to which the liens and security interests in favor of the Secured Parties, will be as described in such clauses), whether now existing or hereafter acquired, that is (i) subject to valid, perfected and unavoidable liens in existence immediately prior to the Petition Date or (ii) to valid and unavoidable liens in existence immediately prior to the Petition Date that are perfected subsequent to the Petition Date as permitted by section 546(b) of the Bankruptcy Code, which security interests and liens in favor of the Secured Parties, are junior to such valid, perfected and unavoidable liens. (d) Liens Senior to Certain Other Liens. The DIP Liens shall not be subject or subordinate to (i) any lien or security interest that is avoided and preserved for the benefit of the Debtors and their estates under section 551 of the Bankruptcy Code or (ii) any liens arising after 23

25 Case BLS Doc Filed 03/06/14 Page 25 of 46 the Petition Date including, without limitation, any liens or security interests granted in favor of any federal, state, municipal or other governmental unit, commission, board or court for any liability of the Debtors. 6. Protection of Secured Parties Rights. (a) So long as there are any borrowings or letters of credit or other amounts or DIP Obligations outstanding (other than contingent indemnity obligations as to which no claim has been asserted when all other DIP Obligations have been paid in full and no letters of credit are outstanding), or the DIP Lenders have any outstanding Commitments under the DIP Credit Agreement, the Pre-Petition Secured Parties shall (i) have no right to and shall take no action to foreclose upon or recover in connection with the liens granted thereto pursuant to the Pre-Petition Indebtedness Documents, the Interim Order or this Final Order, or otherwise exercise or seek to exercise any enforcement rights or remedies against any DIP Collateral, except to the extent consented to by the DIP Lenders or authorized by a further order of this Court entered after the date hereof and (ii) be deemed to have consented to any release of DIP Collateral authorized under the DIP Credit Documents. (b) The automatic stay provisions of section 362 of the Bankruptcy Code are vacated and modified to the extent necessary to permit the Administrative Agent, the L/C Issuer and the DIP Lenders to exercise, (i) immediately upon the occurrence and during the continuance of an Event of Default, all rights and remedies under, and in accordance with, the DIP Credit Documents other than those rights and remedies against the DIP Collateral, as provided in the following clause (ii); and (ii) upon the occurrence and during the continuance of such an Event of Default, and after the giving of five (5) Business Days prior written notice (the Default Notice Period ) to the U.S. Trustee and, the Debtors and the Committee through their respective counsel, 24

26 Case BLS Doc Filed 03/06/14 Page 26 of 46 Walnut Creek Mining Company ( Walnut Creek ) at ken.ziman@skadden.com, anthony.clark@skadden.com, sarah.pierce@skadden.com, and mary.carnazzo@kiewit.com, and Lyondell Chemical Company ( Lyondell ) at mfinkelstein@smfadlaw.com, kathy.young@lyondellbasell.com and brian.finnegan@lyondellbasell.com, all rights and remedies against the DIP Collateral provided for in the DIP Credit Documents, the Interim Order and this Final Order (including, without limitation, the right to setoff monies of the Debtors in accounts maintained with any Administrative Agent or any DIP Lender). Subject to and effective only upon the entry of this Final Order, in any hearing regarding any exercise of rights or remedies (which hearing must take place within the Default Notice Period), the only issue that may be raised by any party in opposition thereto shall be whether, in fact, an Event of Default has occurred and is continuing, and the Debtors, any Committee and all other parties in interest shall not be entitled to seek relief, including, without limitation, under section 105 of the Bankruptcy Code, to the extent such relief would in any way impair or restrict the rights and remedies of the Administrative Agent, the L/C Issuer or the DIP Lenders set forth in the Interim Order, this Final Order or the DIP Credit Documents, as applicable. In no event shall the Administrative Agent, the L/C Issuer, the DIP Lenders, or the Pre-Petition Secured Parties be subject to the equitable doctrine of marshaling or any similar doctrine with respect to their respective liens and security interests upon and in the DIP Collateral or the Pre-Petition Collateral, as applicable. The Administrative Agent s, L/C Issuer s or any DIP Lender s delay or failure to exercise rights and remedies under the DIP Credit Documents, the Interim Order or this Final Order shall not constitute a waiver of the Administrative Agent s, the L/C Issuer s or any DIP Lender s rights hereunder, thereunder or otherwise, unless any such waiver is pursuant to a written instrument executed in accordance with the terms of the DIP Credit Agreement. Further, subject only to and effective upon entry of this 25