UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: Boston Generating, LLC, et al., 1 Debtors. Chapter 11 Case No. 10-14419 (SCC) Jointly Administered Related Docket No. 26 ORDER PROVIDING CERTAIN PROTECTIONS IN CONNECTION WITH, AND AUTHORIZING THE ASSUMPTION OF, EXECUTORY CONTRACTS WITH SEQUENT ENERGY MANAGEMENT, L.P. Upon consideration of the motion (the Motion ) 2 of the Debtors for entry of an order authorizing the Debtors to provide certain protections to Sequent Energy Management, L.P. ( Sequent ) in connection with the Sequent Contracts, to assume the Sequent Contracts, to pay all Cure Amounts relating thereto, and to maintain the Sequent Collateral for the benefit of Sequent; and it appearing that the relief requested is in the best interest of the Debtors estates, their creditors, and other parties-in-interest; and upon consideration of the First Day Declaration; and it appearing that this Court has jurisdiction over the matters raised in the Motion pursuant to 28 U.S.C. 157 and 1334; and it appearing that this Motion is a core proceeding pursuant to 28 U.S.C. 157(b)(2); and adequate notice of the Motion and opportunity for objection having been given; and it appearing that no other notice need be given; and after due deliberation and sufficient cause therefor, it is hereby ORDERED that: 1. The Motion is granted as set forth herein. 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, include: Boston Generating, LLC (0631); EBG Holdings LLC (3635); Fore River Development, LLC (7933); Mystic I, LLC (0640); Mystic Development, LLC (7940); BG New England Power Services, Inc. (0476); and BG Boston Services, LLC (6921). 2 Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Motion.
2. The Debtors are authorized to, assume, and hereby do assume, each of the Sequent Contracts listed on Schedule 1 hereto in their entirety. 3. The assumption of the Sequent Contracts shall be effective as of the date of this Order. 4. The Debtors are authorized to pay and shall pay all Cure Amounts listed on Schedule 1 hereto. 5. The continued provision of Sequent Collateral and the other protections provided pursuant to this Order shall be deemed sufficient adequate assurance of future performance for purposes of assumption under Section 365(b) of the Bankruptcy Code. 6. The Debtors are authorized to make and shall make all payments (other than termination payments) required by the Sequent Contracts, including without limitation, payments due for prepetition deliveries, postpetition deliveries on prepetition contracts, monthly settlement payments, or contract damages for failure to perform under the Sequent Contracts. 7. The Debtors are authorized to pay and shall pay any postpetition obligations due and owing under any of the Sequent Contracts at the prices and pursuant to the terms specified therein, and all such payments shall be free and clear of any prior liens, claims or encumbrances. 8. The Debtors are authorized to maintain and shall maintain collateral for the benefit of Sequent in accordance with the Sequent Contracts, and such collateral shall not be subject to any prior liens, claims or encumbrances. 9. If the Debtors fail to honor the credit support obligations as provided in any of the Sequent Contracts, Sequent may, at its option, and notwithstanding any notice requirements in the Sequent Contracts and any provisions to the contrary contained herein, and in addition to any other rights and remedies which it may have under the Sequent Contract, at law or in equity,
elect to withhold and/or suspend deliveries under the Sequent Contract and/or terminate and liquidate the Sequent Contract and any and all transactions provided under such Sequent Contract. This option may be exercised immediately, without prior notice, but notice must promptly follow. 10. Notwithstanding anything in the Sequent Contracts to the contrary and regardless of any provision in the Bankruptcy Code or under applicable law, the Debtors shall be entitled to assign any Sequent Contract and all transactions thereunder to an Affiliate (as that term is defined in Section 101(2) of the Bankruptcy Code) or a third party; provided, however, that (i) any defaults by the Debtors under the Sequent Contracts are cured and (ii) adequate assurance of future performance is provided to Sequent. 11. During the period that the Debtors Chapter 11 Cases are pending, Sequent will not draw on any letter of credit issued as collateral in support of any of the Sequent Contracts unless the Debtors fail to make any payments required by the Sequent Contracts, including without limitation payments due for prepetition deliveries, postpetition deliveries on prepetition contracts, monthly settlement payments, or contract damages for failure to perform under the Sequent Contracts; provided however, that the Debtors shall have three (3) business days after written receipt from Sequent that it has failed to make any of the aforementioned payments to cure any default thereunder before Sequent can draw on any letter of credit. Cash proceeds received by Sequent from drawing on a letter of credit that may be in excess of the Debtors payment obligation shall be held as collateral just as though the Debtors had originally posted cash to support their margin obligations. Notwithstanding the foregoing, nothing herein shall be construed to restrict any rights or remedies that Sequent has under the Sequent Contracts for nonpayment, including without limitation, the right to withhold and/or suspend deliveries.
12. All rights and remedies available to Sequent under the terms of the Sequent Contracts, any other agreements, or at law or in equity, other than those necessarily modified by this Order, are unaffected. 13. The Debtors are authorized to recognize, enforce, and allow any offset, netting or cross-netting provisions in any of the Sequent Contracts. 14. Notwithstanding Section 362(a) of the Bankruptcy Code, and except as provided in this Order, Sequent shall have the right to exercise any and all contractual remedies upon prospective defaults or terminations under the Sequent Contracts, except for its right to enforce any contractual right to liquidate, terminate, or accelerate any Sequent Contract solely on the basis of a condition of the kind specified under Section 365(e)(l) of the Bankruptcy Code. 15. Upon entry of this Order, Sequent shall be deemed to have permanently waived, relinquished, and discharged its rights to enforce any contractual right to liquidate, terminate, or accelerate any Sequent Contract solely on the basis of a condition of the kind specified under Section 365(e)(l) of the Bankruptcy Code, during the period that the Debtors Chapter 11 Cases are pending. 16. Notwithstanding anything to the contrary contained herein, any payment to be made, or authorization contained hereunder, shall be subject to the requirements imposed on the Debtors under any approved debtor-in-possession financing facility, or any order regarding the use of cash collateral.
17. This Court retains jurisdiction with respect to all matters arising from or related to the implementation of this Order. Dated: September 23, 2010 New York, New York /S/ Shelley C. Chapman Honorable Shelley C. Chapman United States Bankruptcy Judge
Schedule 1 Sequent Contracts Name of Contract Date of Contract Estimated Cure Amount as of and Including September 22, 2010 Fuel Management Agreement by and between April 1, 2008 $4,043,155 Boston Generating, LLC and Sequent Energy Management, L.P. NAESB Base Contract between Sequent March 1, 2008 $0 Energy Management, L.P. and Boston Generating, LLC Transaction Confirmation For Natural Gas n/a $0 (Mystic 7 Facility) Transaction Confirmation For Natural Gas (Fore River Facility) n/a $0 517260 000002 HOUSTON 705017.2