Exhibit 2.1
by and between
ENTERGY CORPORATION
and
Dated as of ___, 2008
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND INTERPRETATION |
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Section 1.1.
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General
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Section 1.2.
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References; Interpretation
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Section 1.3.
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Effective Time
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Section 1.4.
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Tax Sharing
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Section 1.5.
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Employee Matters
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Section 1.6.
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Joint Venture Agreements
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Section 1.7.
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Shared Services Agreements
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Section 1.8.
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Operating Agreements
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ARTICLE II THE SEPARATION |
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Section 2.1.
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General
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Section 2.2.
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Transfer of Assets
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Section 2.3.
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Assumption and Satisfaction of Liabilities
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Section 2.4.
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Intercompany Accounts
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Section 2.5.
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Bank Accounts; Cash Balances
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Section 2.6.
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Limitation of Liability
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Section 2.7.
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Transfers Not Effected On or Prior
to the Effective Time; Transfers
Deemed Effective as of the Effective Time
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Section 2.8.
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Conveyancing and Assumption Instruments
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Section 2.9.
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Further Assurances
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Section 2.10.
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Novation of Liabilities; Consents; Assumption of Liabilities
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Section 2.11.
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Guarantees
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Section 2.12.
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Disclaimer of Representations and Warranties
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ARTICLE III CERTAIN ACTIONS PRIOR TO THE DISTRIBUTION |
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Section 3.1.
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Entergy Reorganization
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Section 3.2.
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Certificate of Incorporation; Bylaws
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Section 3.3.
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Directors
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Section 3.4.
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Resignations
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Section 3.5.
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Enexus Financings
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Section 3.6.
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Ancillary Agreements
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ARTICLE IV THE DISTRIBUTION |
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Section 4.1.
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Stock Dividend to Entergy; Distribution
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- 36 - |
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Section 4.2.
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Fractional Shares
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Section 4.3.
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Actions in Connection with the Distribution
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Section 4.4.
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Sole Discretion of Entergy
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Section 4.5.
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Conditions to Distribution
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ARTICLE V CERTAIN COVENANTS |
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Section 5.1.
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Legal Names and Other Parties’ Trademark
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Section 5.2.
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Auditors and Audits; Annual and Quarterly Financial
Statements and Accounting
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Section 5.3.
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No Restrictions on Post-Closing Competitive
Activities; Corporate Opportunities
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ARTICLE VI CONTINGENT GAINS AND LIABILITIES AND UNALLOCATED ASSETS AND LIABILITIES |
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Section 6.1.
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Unallocated Assets and Contingent Gains
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Section 6.2.
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Unallocated Liabilities and Contingent Liabilities
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Section 6.3.
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Payments
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Section 6.4.
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Procedures to Determine Status of Liability or Asset
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Section 6.5.
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Certain Case Allocation Matters
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Section 6.6.
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Cooperation in Defense and Settlement
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ARTICLE VII RELEASES AND INDEMNIFICATION |
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Section 7.1.
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Release of Pre-Distribution Claims
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Section 7.2.
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Indemnification by Entergy
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Section 7.3.
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Indemnification by Enexus
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Section 7.4.
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Procedures for Indemnification
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Section 7.5.
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Indemnification Payments
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Section 7.6.
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Contribution
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Section 7.7.
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Indemnification Obligations Net of Insurance
Proceeds and Other Amounts on a Net-Tax Basis
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- 57 - |
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Section 7.8.
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Additional Matters; Survival of Indemnities
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ARTICLE VIII CONFIDENTIALITY; ACCESS TO INFORMATION |
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Section 8.1.
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Provision of Information
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- 58 - |
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Section 8.2.
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Access to Personnel and Property
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Section 8.3.
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Witness Services
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Section 8.4.
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Confidentiality
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Section 8.5.
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Privileged Matters
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Section 8.6.
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Ownership of Information
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Section 8.7.
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Other Agreements
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ARTICLE IX DISPUTE RESOLUTION |
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Section 9.1.
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Negotiation
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Section 9.2.
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Arbitration
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Section 9.3.
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Selection of Arbitrator(s)
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Section 9.4.
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Arbitration Procedures
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Section 9.5.
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Discovery
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Section 9.6.
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Confidentiality of Proceedings
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Section 9.7.
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Pre-Hearing Procedure and Disposition
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Section 9.8.
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Continuity of Service and Performance
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Section 9.9.
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Awards
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Section 9.10.
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Costs
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Section 9.11.
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Adherence to Time Limits
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- 66 - |
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Section 9.12.
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Limitation on Actions
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ARTICLE X INSURANCE |
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Section 10.1.
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Policies and Allocation of Related Rights
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- 67 - |
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Section 10.2.
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Shared Policies
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Section 10.3.
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Administration of Shared Policies; Other Matters
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- 67 - |
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Section 10.4.
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Agreement for Waiver of Conflict and Shared Defense
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Section 10.5.
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Cooperation
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- 69 - |
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Section 10.6.
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Miscellaneous
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- 69 - |
ii
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ARTICLE XI MISCELLANEOUS |
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Section 11.1.
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Complete Agreement; Construction
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Section 11.2.
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Ancillary Agreements
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Section 11.3.
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Counterparts
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Section 11.4.
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Survival of Agreements
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Section 11.5.
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Expenses
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Section 11.6.
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Notices
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Section 11.7.
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Waivers
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Section 11.8.
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Amendments
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Section 11.9.
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Assignment
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Section 11.10.
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Successors and Assigns
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Section 11.11.
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Termination, Etc
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Section 11.12.
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Payment Terms
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- 72 - |
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Section 11.13.
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No Circumvention
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- 72 - |
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Section 11.14.
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Subsidiaries
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- 72 - |
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Section 11.15.
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Third Party Beneficiaries
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Section 11.16.
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Title and Headings
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Section 11.17.
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Exhibits and Schedules
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- 73 - |
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Section 11.18.
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Closing
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Section 11.19.
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Governing Law
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- 73 - |
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Section 11.20.
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Consent to Jurisdiction
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- 73 - |
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Section 11.21.
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Specific Performance
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- 73 - |
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Section 11.22.
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Waiver of Jury Trial
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- 73 - |
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Section 11.23.
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Severability
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- 74 - |
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Section 11.24.
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Force Majeure
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- 74 - |
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Section 11.25.
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Construction
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- 74 - |
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Section 11.26.
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Authorization
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Schedules
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Schedule 1.1(41)
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Enexus Group Entities |
Schedule 1.1(49)
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Entergy Group Entities |
Schedule 1.1(54)
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Exclusive Entergy Contingent Gains |
Schedule 1.1(57)
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Exclusive Entergy Contingent Liabilities |
Schedule 1.1(54)
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Exclusive Enexus Contingent Gains |
Schedule 1.1(55)
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Exclusive Enexus Contingent Liabilities |
Schedule 1.1(64)
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Exclusive EquaGen Contingent Gains |
Schedule 1.1(65)
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Exclusive EquaGen Contingent Liabilities |
Schedule 1.1(83)
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Joint Venture Group Entities |
Schedule 1.1(90)(vi)
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Additional Enexus Assets |
Schedule 1.1(90)(ix)(A)
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Assets Not Considered Non-Utility Nuclear Assets |
Schedule 1.1(92)(vi)
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Non-Utility Nuclear Contracts |
Schedule 1.1(93)(i)
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Non-Utility Nuclear Liabilities |
Schedule 1.1(93)(v)
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Non-Utility Nuclear Liabilities Relating to Indebtedness |
Schedule 1.1(93)(vii)
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Non-Utility Nuclear Guarantees |
iii
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Schedule 1.1(93)(viii)
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Non-Utility Nuclear Actions |
Schedule 1.1(93)(ix)(A)
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Liabilities Not Considered Non-Utility Nuclear Liabilities |
Schedule 1.1(110)(vii)
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Additional Entergy Assets |
Schedule 1.1(110)(ix)(A)
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Assets Not Considered Retained Business Assets |
Schedule 1.1(111)(vi)
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Retained Business Contracts |
Schedule 1.1(112)(i)
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Retained Business Liabilities |
Schedule 1.1(112)(v)
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Retained Business Liabilities Relating to Indebtedness |
Schedule 1.1(112)(vi)
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Retained Business Actions |
Schedule 1.1(112)(viii)
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Retained Business Guarantees |
Schedule 1.1(112)(ix)(A)
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Liabilities Not Considered Retained Business Liabilities |
Schedule 1.1(133)(iii)
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Unallocated Liabilities |
Schedule 2.4(b)
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Intercompany Accounts to Remain Outstanding |
Schedule 2.5(a)
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Certain Enexus Bank and Brokerage Accounts |
Schedule 2.5(b)
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Certain Entergy Bank and Brokerage Accounts |
Schedule 2.6(b)
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Non-Terminated Intercompany Contracts |
Schedule 2.11(a)
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Enexus Guaranty Releases |
Schedule 2.11(b)
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Entergy Guaranty Releases |
Schedule 3.1
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Reorganization |
Schedule 3.5(a)
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Enexus Financings |
Schedule 4.5(e)
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Regulatory Approvals |
Schedule 11.5(b)
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Advisors Whose Fees are to be paid by Entergy |
Exhibits
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Exhibit A
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Form of Employee Matters Agreement |
Exhibit B
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Form of Joint Venture Formation Agreement |
Exhibit C
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Form of Amended and Restated Limited Liability Company Agreement of EquaGen |
Exhibit D
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Form of Amended and Restated Operating Agreement |
Exhibit E
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Form of Relicensing Agreement |
Exhibit F
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Form of Shared Services Agreement (Nuclear) (Entergy) |
Exhibit G
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Form of Shared Services Agreement (Nuclear) (JV) |
Exhibit H
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Form of Shared Services Agreement (Corporate) |
Exhibit I
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Form of Tax Sharing Agreement |
Exhibit J
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Form of Transition Services Agreement |
iv
R E C I T A L S:
WHEREAS, Entergy, acting through its direct and indirect Subsidiaries, currently conducts a
number of businesses, including (i) the Non-Utility Nuclear Business, and (ii) the Retained
Business;
WHEREAS, the Board of Directors of Entergy has determined that it is appropriate, desirable
and in the best interests of Entergy and its stockholders to separate Entergy into two separate,
independent and publicly traded companies: (i) one comprising the Non-Utility Nuclear Business,
which shall be owned and conducted, directly or indirectly, by Enexus, and (ii) one comprising the
Retained Business which shall continue to be owned and conducted, directly or indirectly, by
Entergy;
WHEREAS, in order to effect such separation, the Board of Directors of Entergy has determined
that it is appropriate, desirable and in the best interests of Entergy and its stockholders: (i) to
enter into a series of transactions whereby certain assets of Entergy and its Affiliates will be
reorganized such that (A) Entergy and/or one or more other members of the Entergy Group will,
collectively, own all of the Retained Business Assets and assume (or retain) all of the Retained
Business Liabilities, and (B) Enexus and/or one or more other members of the Enexus Group will,
collectively, own all of the Non-Utility Nuclear Assets and assume (or retain) all of the
Non-Utility Nuclear Liabilities; and thereafter (ii) for Entergy to distribute to the holders of
Entergy Common Stock on such record date as may be established by the Board of Directors of Entergy
on a pro rata basis (in each case without consideration being paid by such stockholders) all of the
issued and outstanding shares of common stock, par value $0.01 per share, of Enexus (the
“Enexus Common Stock”) (such transactions, as may be amended or modified in accordance with
the terms and subject to the conditions of this Agreement from time to time, the
“Separation”);
WHEREAS, Entergy and Enexus have determined that it is necessary and desirable, on or prior to
the Effective Time, to allocate, transfer, retain or assign to the Enexus Group the Non-Utility
Nuclear Assets and Non-Utility Nuclear Liabilities, and to allocate, transfer, retain or assign to
the Entergy Group the Retained Business Assets and Retained Business Liabilities;
WHEREAS, this Agreement sets forth the plans of reorganization and the process by which the
Retained Business and Non-Utility Nuclear Business will be reorganized and separated and,
thereafter, all of the issued and outstanding shares of Enexus Common Stock will be distributed to
the holders of Entergy Common Stock; and
WHEREAS, each of Entergy and Enexus has determined that it is necessary and desirable to set
forth the principal corporate transactions required to effect the reorganization, the Separation
and the Distribution and to provide for other agreements that will govern certain other matters
following the Effective Time.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, provisions and
covenants contained in this Agreement, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. General.
As used in this Agreement, the following capitalized terms shall have the following meanings:
(1) “Action” shall mean any demand, action, claim, charge, suit, countersuit,
arbitration, inquiry, subpoena, proceeding or investigation by or before any Governmental Entity or
any arbitration or mediation tribunal.
(2) “Affiliate” shall mean, when used with respect to a specified Person, a Person
that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is
under common control with such specified Person. For the purposes of this definition and
Section 1.1(124), “control,” when used with respect to any specified Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities or other interests,
by Contract or otherwise. It is expressly agreed that no Party or member of any Group shall be
deemed to be an Affiliate of another Party or member of such other Party’s Group by reason of
having one or more directors in common. For the avoidance of doubt, and solely for purposes of
this Agreement, for as long as a Party owns, directly or indirectly, at least fifty percent (50%)
of the outstanding membership interests of EquaGen, EquaGen and any member of the Joint Venture
Group shall be considered an Affiliate of such Party.
(3) “Agent” shall mean BNY Mellon Investor Services.
(4) “Agreement” shall have the meaning set forth in the preamble hereof.
(5) “Agreement Disputes” shall have the meaning set forth in Section 9.1(a).
(6) “Allocated Percentage” means the Entergy Percentage or the Enexus Percentage, as
the case may be.
(7) “Amended Financial Reports” shall have the meaning set forth in Section
5.2(b).
(8) “Ancillary Agreements” shall mean all of the written Contracts, instruments,
assignments or other arrangements (other than this Agreement) entered into in connection with the
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transactions contemplated hereby, including the Conveyancing and Assumption Instruments, the
Tax Sharing Agreement, the Transition Services Agreement, the Employee Matters Agreement, the
Joint Venture Agreements, any Common Interest Agreement, each of the Operating Agreements, the
Relicensing Agreement and each of the Shared Services Agreements.
(9) “Assets” shall mean assets, properties, claims and rights (including goodwill),
wherever located (including in the possession of vendors or other third parties or elsewhere), of
every kind, character and description, whether real, personal or mixed, tangible, intangible or
contingent, in each case whether or not recorded or reflected or required to be recorded or
reflected on the Records or financial statements of any Person, including (but not limited to) the
following:
(i) all accounting and other legal and business books, records, ledgers and files
whether printed, electronic or written;
(ii) all apparatuses, computers and other electronic data processing and communications
equipment, fixtures, machinery, rolling stock, equipment, furniture, office equipment,
automobiles, trucks, aircraft and other transportation equipment, special and general tools,
test devices, prototypes and models and other tangible personal property;
(iii) all inventories of products, goods, materials, parts, raw materials and supplies;
(iv) all interests in and rights with respect to real property of whatever nature,
including easements, whether as owner, mortgagee or holder of a Security Interest in real
property, lessor, sublessor, lessee, sublessee or otherwise;
(v) all interests in and rights with respect to any capital stock or other equity
interests of any Subsidiary or any other Person, all bonds, notes, debentures or other
securities issued by any Subsidiary or any other Person, all loans, advances or other
extensions of credit or capital contributions to any Subsidiary or any other Person and all
other investments in securities of any Person;
(vi) all licenses, Contracts, leases of personal property, open purchase orders for raw
materials, supplies, parts or services, unfilled orders for the manufacture and sale of
products and other Contracts or commitments;
(vii) all deposits, letters of credit and performance and surety bonds;
(viii) all written (including in electronic form) technical information, data,
specifications, research and development information, engineering drawings and
specifications, operating and maintenance manuals, and materials and analyses prepared by
consultants and other third parties;
(ix) all Intellectual Property;
(x) all Software;
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(xi) all cost information, sales and pricing data, customer prospect lists, supplier
records, customer and supplier lists, customer and vendor data, correspondence and lists,
product data and literature, artwork, design, development and business process files and
data, vendor and customer drawings, specifications, quality records and reports and other
books, records, studies, surveys, reports, plans and documents;
(xii) all prepaid expenses, trade accounts and other accounts and notes receivables;
(xiii) all rights under Contracts, all claims or rights against any Person, choses in
action or similar rights whether sounding in tort, contract or otherwise, whether accrued or
contingent;
(xiv) all rights under insurance policies and all rights in the nature of insurance,
indemnification or contribution;
(xv) all licenses, permits, applications, approvals (pending or definitive) and
authorizations which have been issued by any Governmental Entity;
(xvi) all cash or cash equivalents, bank accounts, brokerage accounts, lock boxes and
other deposit arrangements; and
(xvii) all interest rate, currency, commodity or other swap, collar, cap or other
hedging or similar Contracts or arrangements.
(10) “Audited Party” shall have the meaning set forth in Section 5.2(a)(ii).
(11) “Benefit Arrangement” shall have the meaning set forth in the Employee Matters
Agreement.
(12) “Business” shall mean the Non-Utility Nuclear Business or the Retained Business,
as applicable.
(13) “Business Day” means any day that is not a Saturday, a Sunday or any other day on
which banks are required or authorized by Law to be closed in the City of New York, New York.
(14) “Business Entity” shall mean any corporation, partnership, limited liability
company, joint venture, unincorporated association, trust for business purposes or other entity
which may legally hold title to Assets.
(15) “Claims Administration” shall mean the administration of claims made under the
Shared Policies, including the reporting of claims to the insurance carriers that issued the Shared
Policies, management and defense of such claims, negotiating the resolution of such claims, and
providing for appropriate releases upon settlement of such claims.
(16) “Code” shall mean the Internal Revenue Code of 1986, as amended.
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(17) “Commission” shall mean the United States Securities and Exchange Commission or
any successor agency thereto.
(18) “Common Interest Agreement” shall mean any Common Interest Agreement by and among
Enexus, EquaGen and Entergy (or a combination thereof), to be entered into prior to the Separation,
in a form reasonably satisfactory to the parties thereto, related to certain litigation matters.
(19) “Confidential Business Information” shall mean all Information, data or material
other than Confidential Operational Information, including (i) earnings reports and forecasts, (ii)
macro-economic reports and forecasts, (iii) business and strategic plans, (iv) general market
evaluations and surveys, (v) litigation presentations and risk assessments, (vi) budgets, and (vii)
financing and credit-related information.
(20) “Confidential Information” shall mean Confidential Business Information and
Confidential Operational Information concerning a Party and/or its Subsidiaries which, prior to or
following the Effective Time, has been disclosed by a Party or its Subsidiaries to the other Party
or its Subsidiaries, in written, oral (including by recording), electronic, or visual form, or
otherwise has come into the possession of the other Party, including pursuant to the access
provisions of Section 8.1 or Section 8.2 or any other provision of this Agreement
or any Ancillary Agreement (except to the extent that such information can be shown to have been
(i) in the public domain through no action of such Party or its Subsidiaries; (ii) lawfully
acquired from other sources by such Party or its Subsidiaries to which it was furnished; or (iii)
is independently developed by a Party or its Subsidiaries after the date hereof without reference
to the Confidential Business Information or Confidential Operational Information of the other Party
or its Subsidiaries; provided, however, in the case of clause (ii) that, to the
furnished Party’s knowledge, such sources did not provide such information in breach of any
confidentiality obligations).
(21) “Confidential Operational Information” shall mean all operational Information,
data or material including (i) specifications, ideas and concepts for products, services and
operations, (ii) quality assurance policies, procedures and specifications, (iii) customer
information, (iv) Software, (v) training materials and information, and (vi) all other know-how,
methodologies, procedures, techniques and trade secrets related to design, development and
operational processes.
(22) “Consents” shall mean any consents, waivers or approvals from, or notification
requirements to, any Person other than a Governmental Entity.
(23) “Contingent Claim Committee” means a committee that shall be established in
accordance with Section 6.4.
(24) “Contingent Gain” means any claim or other right, other than claims or rights
related to Taxes (which are governed by the Tax Sharing Agreement) or Benefit Arrangements (which
are governed by the Employee Matters Agreement), of Entergy, Enexus or any of their respective
Affiliates, whenever arising, against any Person other than Entergy or Enexus, or any of their
respective Affiliates, if and to the extent that:
- 5 -
(i) such claim or other right has accrued as of the Effective Time (based on then
existing Law); and
(ii) the existence or scope of the obligation of such other Person as of the Effective
Time with respect to such claim or other right was not acknowledged, fixed or determined due
to a dispute or other uncertainty as of the Effective Time or as a result of the failure of
such claim or other right to have been discovered or asserted as of the Effective Time (it
being understood that the existence of any pending, threatened or contemplated Action (or
any contingent asset reflected in the consolidated financial statements in accordance with
generally accepted accounting principles as applied in the United States) as of the
Effective Time with respect to any claim or other right shall not be sufficient for such
claim or other right to be considered acknowledged, fixed or determined).
For purposes of this definition and Section 1.1(25), “accrued” shall mean that all of
the elements necessary for the assertion of a claim with respect to such matter shall have occurred
on or prior to the Effective Time, such that the claim, had it been asserted in an Action on or
prior to the Effective Time, would not be dismissed by a court for lack of ripeness or similar
grounds.
The Parties agree that no claim or other right relating to, arising out of or resulting from
any obligation of any Person to perform the executory portion of any Contract existing as of the
Effective Time shall be deemed to be a Contingent Gain.
Notwithstanding the foregoing, none of
(A) any Insurance Proceeds, or
(B) any reversal of any litigation or other reserve for accounting purposes
shall be deemed to be a Contingent Gain.
(25) “Contingent Liability” means any Liability, other than Liabilities for Taxes
(which are governed by the Tax Sharing Agreement) or Liabilities for any Benefit Arrangement (which
are governed by the Employee Matters Agreement), of Entergy, Enexus or any of their respective
Affiliates, whenever arising, to any Person other than Entergy, Enexus, or any of their respective
Affiliates, if and to the extent that:
(i) such Liability has accrued as of the Effective Time (based on then existing Law);
and
(ii) the existence or scope of the obligation of Entergy, Enexus, or any of their
respective Affiliates as of the Effective Time with respect to such Liability was not
acknowledged, fixed or determined due to a dispute or other uncertainty as of the Effective
Time or as a result of the failure of such Liability to have been discovered or asserted as
of the Effective Time (it being understood that the existence of any Action pending,
threatened or contemplated or other reserve for accounting purposes as of the
- 6 -
Effective Time with respect to any Liability shall not be sufficient for such Liability
to be considered acknowledged, fixed or determined).
The Parties agree that no Liability relating to, arising out of or resulting from any
obligation of any Person:
(A) to perform the executory portion of any Contract existing as of the
Effective Time, or
(B) to satisfy any obligation under any Benefit Arrangement as of the Effective
Time,
shall be deemed to be a Contingent Liability.
(26) “Contract” shall mean any agreement, contract, obligation, indenture, instrument,
lease, license, promise, arrangement, release, warranty, commitment or undertaking (whether written
or oral and whether express or implied).
(27) “Conveyancing and Assumption Instruments” shall mean, collectively, the various
Contracts and other documents entered into and to be entered into to effect the transfer of Assets
and the assumption of Liabilities in the manner contemplated by this Agreement or otherwise
relating to, arising out of or resulting from the transactions contemplated by this Agreement
(other than the Tax Sharing Agreement, the Transition Services Agreement, the Employee Matters
Agreement, the Joint Venture Agreements, the Shared Services Agreements, and the Operating
Agreements), each of which shall be in such form and dated as of such date as the applicable
parties thereto shall reasonably agree.
(28) “CPR” shall have the meaning set forth in Section 9.3.
(29) “
Delaware Courts” shall have the meaning set forth in
Section 11.20.
(30) “Disclosure Documents” shall mean any registration statement (including any
registration statement on Form 10) filed with the Commission prior to the Effective Time by or on
behalf of any Party or any of its Subsidiaries, and also includes any information statement,
prospectus, offering memorandum, offering circular or similar disclosure document (including any
offering memorandum delivered in connection with the financing transactions described in Section
3.5), whether or not filed with the Commission or any other Governmental Entity, which offers for
sale or registers the transfer, exchange or distribution of any security of such Party or any of
its Subsidiaries in connection with the Separation.
(31) “Dispute Notice” shall have the meaning set forth in Section 9.1.
(32) “Distribution” shall mean the distribution by Entergy of all of the issued and
outstanding shares of Enexus Common Stock to holders of record of shares of Entergy Common Stock as
of the Record Date on the basis of share of Enexus Common Stock for each issued and
outstanding share of Entergy Common Stock.
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(33) “Distribution Date” shall mean , 2008, or such later date as shall be
determined by the Board of Directors of Entergy to be the date on which the Distribution shall
occur.
(34) “Effective Time” shall mean , New York City, New York time, on ,
2008.
(35) “Employee Matters Agreement” shall mean the Employee Matters Agreement by and
between Entergy and Enexus, dated as of the date hereof and substantially in the form attached as
Exhibit A hereto.
(36) “Enexus” shall have the meaning set forth in the preamble hereto.
(37) “Enexus Accounts” shall have the meaning set forth in Section 2.5(a).
(38) “Enexus Common Stock” shall have the meaning set forth in the recitals hereto.
(39) “Enexus Disclosure” shall mean any form, statement, schedule or other material
(other than the Disclosure Documents) filed with or furnished to:
(i) the Commission,
(ii) any other Governmental Entity, or
(iii) holders of any securities of any member of the Enexus Group,
on or after the Effective Time by or on behalf of any member of the Enexus Group in connection with
the registration, sale, or distribution of securities or disclosure related thereto (including
periodic disclosure obligations).
(40) “Enexus Employee” shall have the meaning set forth in the Employee Matters
Agreement.
(41) “Enexus Group” shall mean Enexus and each Person identified on Schedule
1.1(41), and each Person that is or becomes a Subsidiary of Enexus at or after the Effective
Time.
(42) “Enexus Indemnitees” shall mean each member of the Enexus Group, their respective
Affiliates and each of their respective directors, officers, employees and agents and each of the
heirs, executors, successors and assigns of any of the foregoing.
(43) “Enexus Percentage” shall mean 50% or, with respect to those matters listed or
described on Schedule 1.1(133)(iii), the percentage allocated to Enexus therein with
respect to each specific item (if so allocated).
(44) “Entergy” shall have the meaning set forth in the preamble hereof.
(45) “Entergy Accounts” shall have the meaning set forth in Section 2.5(a).
- 8 -
(46) “Entergy Common Stock” shall mean the issued and outstanding shares of common
stock, par value $0.01 per share, of Entergy.
(47) “Entergy Disclosure” shall mean any form, statement, schedule or other material
(other than the Disclosure Documents) filed with or furnished to
(i) the Commission,
(ii) any other Governmental Entity, or
(iii) holders of any securities of any member of the Entergy Group,
on or after the Effective Time by or on behalf of any member of the Entergy Group in connection
with the registration, sale, or distribution of securities or disclosure related thereto (including
periodic disclosure obligations).
(48) “Entergy Employee” shall have the meaning set forth in the Employee Matters
Agreement.
(49) “Entergy Group” shall mean Entergy and each Person identified on Schedule
1.1(49), and each Person that is or becomes a Subsidiary of Entergy at or after the Effective
Time.
(50) “Entergy Indemnitees” shall mean each member of the Entergy Group, and each of
their respective directors, officers, employees and agents and each of the heirs, executors,
successors and assigns of any of the foregoing.
(51) “Entergy Percentage” means 50% or, with respect to those matters listed or
described on Schedule 1.1(133)(iii), the percentage allocated to Entergy therein with
respect to each specific item (if so allocated).
(52) “
EquaGen” shall mean EquaGen LLC, a
Delaware limited liability company.
(53) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder, all as the same shall be in effect at the
time that reference is made thereto.
(54) “Exclusive Enexus Contingent Gain” means any Contingent Gain if such Contingent
Gain primarily relates to the Non-Utility Nuclear Business, including the matters listed or
described on Schedule 1.1(54), or if such Contingent Gain is expressly assigned to Enexus
pursuant to this Agreement or any Ancillary Agreement.
(55) “Exclusive Enexus Contingent Liability” means any Contingent Liability if such
Contingent Liability primarily relates to the Non-Utility Nuclear Business, including the matters
listed or described on Schedule 1.1(55), or if such Contingent Liability is expressly
assigned to Enexus pursuant to this Agreement or any Ancillary Agreement.
(56) “Exclusive Entergy Contingent Gain” means any Contingent Gain if such Contingent
Gain primarily relates to the Retained Business, including the matters listed or
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described on Schedule 1.1(56), or if such Contingent Gain is expressly assigned to
Entergy pursuant to this Agreement or any Ancillary Agreement.
(57) “Exclusive Entergy Contingent Liability” means any Contingent Liability if such
Contingent Liability primarily relates to the Retained Business, including the matters listed or
described on Schedule 1.1(57), or if such Contingent Liability is expressly assigned to
Entergy pursuant to any Ancillary Agreement.
(58) “Exclusive EquaGen Contingent Gain” means any Contingent Gain if such Contingent
Gain exclusively relates to the Joint Venture Business, including the matters listed or described
on Schedule 1.1(58), or if such Contingent Gain is expressly assigned to EquaGen pursuant
to any Ancillary Agreement.
(59) “Exclusive EquaGen Contingent Liability” means any Contingent Liability if such
Contingent Liability primarily relates to the Joint Venture Business, including the matters listed
or described on Schedule 1.1(59), or if such Contingent Liability is expressly assigned to
EquaGen pursuant to this Agreement or any Ancillary Agreement.
(60) “Force Majeure” shall mean, with respect to a Party, an event beyond the
reasonable control of such Party (or any Person acting on its behalf), which by its nature could
not have been foreseen by such Party (or such Person), or, if it could have been foreseen, was
unavoidable, and includes acts of God, storms, floods, earthquakes, hurricanes, riots, pandemics,
fires, sabotage, strikes, lockouts, civil commotion or civil unrest, interference by civil or
military authorities, acts of war (declared or undeclared) or armed hostilities or other national
or international calamity or one or more acts of terrorism.
(61) “Form 10” shall mean the registration statement on Form 10 filed by Enexus with
the Commission in connection with the Distribution and all amendments thereto.
(62) “Former Enexus Employee” shall have the meaning set forth in the Employee Matters
Agreement.
(63) “Former Entergy Employee” shall have the meaning set forth in the Employee
Matters Agreement.
(64) “Governmental Approvals” shall mean any notices or reports to be submitted to, or
other filings to be made with, or any consents, registrations, approvals, permits or authorizations
to be obtained from, any Governmental Entity, including from the NRC, the Federal Energy Regulatory
Commission, and state regulatory agencies.
(65) “Governmental Entity” shall mean any nation or government, any state,
municipality or other political subdivision thereof and any entity, body, agency, commission,
department, board, bureau or court, whether domestic, foreign or multinational, exercising
executive, legislative, judicial, regulatory or administrative functions of or pertaining to
government and any official thereof.
(66) “Group” shall mean any of the Enexus Group, the Entergy Group or the Joint
Venture Group, as the case may be.
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(67) “Guaranty Release” shall have the meaning set forth in Section 2.11(b).
(68) “Indebtedness” shall mean (i) any indebtedness for borrowed money or the deferred
purchase price of property as evidenced by a note, bonds or other instruments, (ii) obligations as
lessee under capital leases, (iii) obligations secured by any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind existing on any asset owned or held by any Person, whether
or not such Person has assumed or become liable for the obligations secured thereby, (iv) any
obligation under any interest rate swap agreement, (v) accounts payable, (vi) reimbursement
obligations with respect to surety and performance bonds or letters of credit, and (vii)
obligations under direct or indirect guarantees of (including obligations, contingent or otherwise,
to assure a creditor against loss in respect of) indebtedness or obligations of the kinds referred
to in clauses (i), (ii), (iii), (iv), (v) and (vi) above.
(69) “Indemnifiable Loss” and “Indemnifiable Losses” shall mean any and all
damages, losses, deficiencies, Liabilities, obligations, penalties, judgments, settlements, claims,
payments, fines, interest, costs and expenses (including internal costs provided for in Section
11.5(c) and the costs and expenses of any and all Actions and demands, assessments, judgments,
settlements and compromises relating thereto and the reasonable costs and expenses of attorneys’,
accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation
or defense thereof or the enforcement of rights hereunder), excluding special, consequential,
indirect or punitive damages (other than special, consequential, indirect or punitive damages
awarded to any third party against an indemnified party).
(70) “Indemnifying Party” shall have the meaning set forth in Section 7.4(b).
(71) “Indemnitee” shall have the meaning set forth in Section 7.4(b).
(72) “Indemnity Payment” shall have the meaning set forth in Section 7.7(a).
(73) “Information” shall mean information, whether or not patentable or copyrightable,
in written, oral, electronic or other tangible or intangible forms, stored in any medium, including
studies, reports, records, notes, books, Contracts, instruments, surveys, discoveries, ideas,
concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs
or other software, marketing plans, customer names, communications by or to attorneys (including
attorney-client privileged communications), memos and other materials prepared by attorneys or
under their direction (including attorney work product), communications and materials otherwise
related to or made or prepared in connection with or in preparation for any legal proceeding, and
other technical, financial, employee or business information or data.
(74) “Information Statement” shall mean the Information Statement initially attached
as an exhibit to the Form 10 sent to the holders of shares of Entergy Common Stock in connection
with the Distribution, including any amendment or supplement thereto.
(75) “Insurance Administration” shall mean, with respect to each Shared Policy: (i)
the accounting for premiums, retrospectively-rated premiums, defense costs, indemnity payments,
deductibles and retentions, as appropriate, under the terms and conditions of such Shared Policy;
(ii) the reporting to the relevant insurer that issues such Shared Policy of any losses or claims
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which may be covered by such Shared Policy; and (iii) the distribution of Insurance Proceeds
related to such Shared Policy, subject to the terms of ARTICLE X.
(76) “Insurance Proceeds” shall mean those monies (i) received by an insured from an
insurer under any Shared Policy, or (ii) paid by such insurer on behalf of an insured under any
Shared Policy, in either case net of any applicable premium adjustment, retrospectively-rated
premium, deductible, retention, or cost of reserve paid or held by or for the benefit of such
insured.
(77) “Insured Claims” shall mean those Liabilities that, individually or in the
aggregate, are covered within the terms and conditions of any of the Shared Policies, whether or
not subject to deductibles, co-insurance, uncollectibility or retrospectively-rated premium
adjustments.
(78) “Intellectual Property” shall mean all intellectual property and industrial
property rights of any kind or nature, including all United States, foreign and multinational (i)
patents, patent applications, patent disclosures, and all related continuations,
continuations-in-part, divisionals, reissues, renewals, substitutions and extensions thereof, (ii)
Trademarks, (iii) copyrights, whether statutory or common law, registered or unregistered and
published or unpublished, (iv) rights of publicity, (v) moral rights and rights of attribution and
integrity, (vi) rights in Software, (vii) trade secrets and all other confidential information,
know-how, inventions, improvements, proprietary processes, formulae, models and methodologies,
(viii) rights to personal information, (ix) telephone numbers and internet protocol addresses, (x)
rights, priorities and privileges arising under applicable law in the foregoing and in other
similar intangible assets, (xi) applications and registrations for the foregoing, and (xii) rights
and remedies against past, present, and future infringement, misappropriation, or other violation
of the foregoing.
(79) “Intercompany Accounts” shall mean any receivable, payable or loan between any
member of the Entergy Group, on the one hand, and any member of the Enexus Group, on the other
hand, that exists prior to the Effective Time and is reflected in the Records of the relevant
members of the Entergy Group and the Enexus Group, except for any such receivable, payable or loan
that arise pursuant to this Agreement or any other Ancillary Agreement.
(80) “Joint Venture Agreements” shall mean, collectively, the Joint Venture Formation
Agreement and the Joint Venture Operating Agreement.
(81) “Joint Venture Assets” shall have the meaning set forth in the Joint Venture
Formation Agreement.
(82) “Joint Venture Business” shall have the meaning set forth in the Joint Venture
Formation Agreement.
(83) “Joint Venture Formation Agreement” shall mean the Joint Venture Formation
Agreement by and among Enexus, Entergy, Entergy EquaGen, Inc., Enexus EquaGen, LLC, and EquaGen,
dated the date hereof, substantially in the form attached as Exhibit B hereto
(84) “Joint Venture Group” shall mean EquaGen and each Person identified on
Schedule 1.1(83), and each Person that is or becomes a Subsidiary of EquaGen at or after
the Effective Time.
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(85) “Joint Venture Liabilities” shall have the meaning set forth in the Joint Venture
Formation Agreement.
(86) “Joint Venture Operating Agreement” shall mean the Amended and Restated Limited
Liability Company Agreement of EquaGen, by and among EquaGen, Entergy EquaGen, Inc. and Enexus
EquaGen, LLC dated the date hereof, and substantially in the form attached as Exhibit C hereto.
(87) “Law” shall mean any United States or non-United States federal, national,
supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code,
order, requirement or rule of law (including common law and equity).
(88) “Liabilities” shall mean any and all debts, liabilities, costs, expenses,
interest, and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured,
reserved or unreserved, or determined or determinable of any kind or nature whatsoever, including
those arising under any Law or Action, whether asserted or unasserted, or order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any Governmental Entity,
and those arising under or resulting from any Contract or any fines, damages or equitable relief
which may be imposed in connection with any of the foregoing and including all costs and expenses
related thereto.
(89) “Liable Party” shall have the meaning set forth in Section 2.10(b).
(90) “Non-Utility Nuclear Assets” shall mean:
(i) the ownership interests (to the extent held by Entergy, Enexus or any of their
respective Affiliates immediately prior to the Effective Time) in each member of the Enexus
Group (other than shares of capital stock to be distributed in the Distribution);
(ii) the 50% ownership interest in EquaGen (but not the underlying Assets owned by
EquaGen or any member of the Joint Venture Group);
(iii) all Non-Utility Nuclear Contracts, any rights or claims of Entergy, Enexus, or
any of their respective Affiliates, arising thereunder, and any other rights or claims or
contingent rights or claims of Entergy, Enexus, or any of their respective Affiliates,
primarily relating to or arising from any other Non-Utility Nuclear Asset or the Non-Utility
Nuclear Business;
(iv) all Assets owned, leased or held by Entergy, Enexus, or any of their respective
Affiliates immediately prior to the Effective Time that are used primarily in the
Non-Utility Nuclear Business, including facilities, equipment, and nuclear fuel (unexpended
or expended);
(v) subject to ARTICLE X, any rights of any member of the Enexus Group under
any Non-Utility Nuclear Policies, and any Shared Policies to the extent related to the
Non-Utility Nuclear Business;
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(vi) the Assets listed or described on Schedule 1.1(90)(vi) and any and all
Assets that are expressly contemplated by this Agreement or any Ancillary Agreement as
Assets to be retained by, or assigned or transferred to, any member of the Enexus Group;
(vii) any Exclusive Enexus Contingent Gain;
(viii) all Enexus Accounts, and, subject to the provisions of Section 2.5, all
cash, cash equivalents, and securities on deposit in such accounts immediately prior to the
Effective Time; and
(ix) any collateral securing any Non-Utility Liability immediately prior to the
Effective Time.
Notwithstanding the foregoing, the Non-Utility Nuclear Assets shall not in any event include:
(A) the Assets listed or described on Schedule 1.1(90)(ix)(A); or
(B) any Assets that are expressly contemplated by this Agreement or any
Ancillary Agreement as Assets to be retained by, transferred, exchanged or assigned
to, any member of the Entergy Group or the Joint Venture Group, including any
Exclusive Entergy Contingent Gain or any Exclusive EquaGen Contingent Gain.
(91) “Non-Utility Nuclear Business” shall mean:
(i) the non-utility nuclear business unit of Entergy which includes the following
operating nuclear power plants:
(A) Pilgrim Nuclear Station in Plymouth, Massachusetts
(B) Xxxxx X. Xxxxxxxxxxx near Oswego, New York
(C) Indian Point Xxxxx 0 & 0 xx Xxxxxxxxxxx Xxxxxx, Xxx Xxxx
(X) Vermont Yankee in Vernon, Vermont
(E) Palisades Nuclear Energy Plant in South Haven, Michigan
(ii) the following nuclear power plants in various stages of decommissioning:
(A) Indian Point Units 1 in Westchester County, New York
(B) Big Rock in Charlevoix, Michigan
- 14 -
(iii) any business or operations, where such business or operations were conducted
primarily through the use of the Non-Utility Nuclear Assets prior to the Effective Time;
(iv) the power marketing business unit of Entergy; and
(v) the businesses and operations of Business Entities acquired or established by or
for any member of the Enexus Group after the Effective Time;
provided, however, the Non-Utility Nuclear Business shall not in any event include,
as of the Effective Time, the businesses of any member of the Entergy Group or the Joint Venture
Group.
(92) “Non-Utility Nuclear Contracts” shall mean the following Contracts to which
Entergy or any of its Affiliates is a party or by which it or any of its Affiliates or any of their
respective Assets is bound, except for any such Contract or part thereof (i) that is expressly
contemplated not to be transferred or assigned by any member of the Entergy Group to Enexus, or
(ii) that is expressly contemplated to be transferred or assigned to (or remain with) any member of
the Entergy Group or the Joint Venture Group, in each case, pursuant to any provision of this
Agreement or any Ancillary Agreement:
(i) any Contract entered into in the name of, or expressly on behalf of, any division,
business unit or member of the Enexus Group;
(ii) any Contract that relates primarily to the Non-Utility Nuclear Business;
(iii) any Contract representing capital or operating equipment lease obligations of
facilities or equipment primarily used by any member of the Enexus Group;
(iv) any Contract or part thereof that is otherwise expressly contemplated pursuant to
this Agreement or any of the Ancillary Agreements to be retained by, transferred or assigned
to, any member of the Enexus Group;
(v) any guarantee, indemnity, representation or warranty of any member of the Enexus
Group; and
(vi) the Contracts listed or described on Schedule 1.1(92)(vi).
(93) “Non-Utility Nuclear Liabilities” shall mean:
(i) the Liabilities listed or described on Schedule 1.1(93)(i) and any and all
Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement as
Liabilities to be retained, assumed or retired by any member of the Enexus Group;
(ii) any and all Liabilities of Entergy, Enexus, or any of their respective Affiliates,
primarily relating to, arising out of or resulting from:
- 15 -
(A) the operation or conduct of the Non-Utility Nuclear Business, as conducted
at any time prior to, on or after the Effective Time (including any Liability
primarily relating to, arising out of or resulting from any act or failure to act by
any director, officer, employee, agent or representative of Entergy, Enexus, or any
of their respective Affiliates (whether or not such act or failure to act is or was
within such Person’s authority));
(B) the operation or conduct of any business conducted by any member of the
Enexus Group at any time after the Effective Time (including any Liability primarily
relating to, arising out of or resulting from any act or failure to act by any
director, officer, employee, agent or representative of Enexus, or any of its
Affiliates after the Effective Time (whether or not such act or failure to act is or
was within such Person’s authority)); or
(C) the Non-Utility Nuclear Business or any Non-Utility Nuclear Assets, whether
arising before, on or after the Effective Time;
(iii) any and all Liabilities to the extent primarily relating to, arising out of or
resulting from any terminated, discontinued or divested Business Entity, business, real
property, Asset or operation formerly and primarily owned or managed by, or associated with,
any member of the Enexus Group or the Non-Utility Nuclear Business;
(iv) any and all Liabilities (including under applicable federal and state securities
Laws) relating to, arising out of or resulting from:
(A) the Disclosure Documents (the Form 10 and the Information Statement),
except to the extent specifically enumerated as a Retained Business Liability in
Section 1.1(112)(iv)(A);
(B) any Pre-Separation Disclosure, but only to the extent such Liabilities
primarily arise out of or result from matters related to businesses, operations,
assets or liabilities allocated to Enexus in the Separation pursuant to this
Agreement; and
(C) any Enexus Disclosure;
(v) any and all Liabilities, including those Liabilities listed on Schedule
1.1(93)(v), relating to, arising out of or resulting from any Indebtedness (including
debt securities and asset-backed debt) of any member of the Enexus Group (whether incurred
prior to, on or after the Effective Time);
(vi) any Exclusive Enexus Contingent Liability;
(vii) any and all Liabilities of the guarantor under the guarantees listed or described
on Schedule 1.1(93)(vii);
(viii) any and all Liabilities relating to, resulting from, or arising out of any
Action listed or described on Schedule 1.1(93)(viii); and
- 16 -
(ix) any and all obligations of an insured Person under each Non-Utility Nuclear Policy
and each Shared Policy to the extent related to or arising out of the Non-Utility Nuclear
Business.
Notwithstanding the foregoing, the Non-Utility Nuclear Liabilities shall in any event not
include:
(A) any Liabilities that are expressly contemplated by this Agreement or any
Ancillary Agreement as Liabilities to be retained or assumed by any member of the
Entergy Group or the Joint Venture Group, including any Liabilities set forth on
Schedule 1.1(93)(ix)(A); and
(B) any Liabilities related or attributable to, or arising in connection with,
the employment, service, termination of employment or termination of service of
Enexus Employees, which shall be exclusively governed by the Employee Matters
Agreement;
(C) any Liabilities related or attributable to, or arising in connection with,
Taxes or Tax Returns, which shall be exclusively governed by the Tax Sharing
Agreement; and
(D) any Liabilities of the guarantor under the guarantees listed or described
on Schedule 1.1(112)(viii).
FOR THE AVOIDANCE OF DOUBT, NO LIABILITY SHALL BE A NON-UTILITY NUCLEAR LIABILITY SOLELY AS A
RESULT OF ENEXUS OR ANY OTHER MEMBER OF THE ENEXUS GROUP BEING NAMED AS PARTY TO, OR IN, ANY
ACTION.
(94) “Non-Utility Nuclear Policies” shall mean all Policies, whether or not in force
on the Effective Time, issued by insurers to Entergy, Enexus, or any of their respective
Affiliates, that cover risks that relate exclusively to the Non-Utility Nuclear Business.
(95) “NRC” shall mean the Nuclear Regulatory Commission or any successor entity
thereto.
(96) “NYSE” shall mean the New York Stock Exchange.
(97) “
Operating Agreements” shall mean each of the Amended and Restated Operating
Agreement between EquaGen Nuclear LLC, a
Delaware limited liability company and wholly-owned
subsidiary of EquaGen, and each Subsidiary of Enexus that directly owns Enexus’ operating nuclear
plants, dated the date hereof and substantially in the form attached as Exhibit D hereto.
(98) “Other Party’s Auditors” shall have the meaning set forth in Section
5.2(a)(ii).
(99) “Other Party” shall have the meaning set forth in Section 2.10(a).
(100) “Other Party Marks” shall have the meaning set forth in Section 5.1(a).
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(101) “Party” or “Parties” shall have the meaning set forth in the preamble
hereof.
(102) “Person” shall mean any natural person, firm, individual, corporation, business
trust, joint venture, association, company, limited liability company, partnership or other
organization or entity, whether incorporated or unincorporated, or any Governmental Entity.
(103) “Policies” shall mean insurance policies and insurance Contracts of any kind
(other than life and benefits policies or Contracts), including primary, excess and umbrella
policies, comprehensive general liability policies, director and officer liability, fiduciary
liability, automobile, aircraft, property and casualty, business interruption, workers’
compensation and employee dishonesty insurance policies, bonds and self-insurance, together with
the rights, benefits and privileges thereunder.
(104) “Pre-Separation Disclosure” shall mean any form, statement, schedule or other
material (other than the Disclosure Documents) filed with or furnished to:
(i) the Commission,
(ii) any other Governmental Entity, or
(iii) holders of any securities of Entergy or any of its Affiliates,
prior to the Effective Time by Entergy, Enexus, or any of their respective Affiliates, in
connection with the registration, sale, or distribution of securities or disclosure related thereto
(including periodic disclosure obligations).
(105) “Prime Rate” shall mean the prime rate of interest (the base rate on corporate
loans) as published under “Money Rates” in The Wall Street Journal.
(106) “Record Date” shall mean the date to be determined by the Board of Directors of
Entergy as the record date for the Distribution.
(107) “Records” shall mean any Contracts, documents, books, records or files.
(108) “Relicensing Agreement” shall mean the Relicensing Agreement between Entergy and
Enexus, dated the date hereof and substantially in the form attached as Exhibit E hereto.
(109) “Retained Business” shall mean:
(i) any business or operations where such business or operations were conducted
primarily through the use of the Retained Business Assets prior to the Effective Time; and
(ii) the businesses and operations of Business Entities acquired or established by or
for any member of the Entergy Group after the Effective Time;
provided, however, the Retained Business shall not include, as of the
Effective Time, the businesses of any member of the Enexus Group or the Joint Venture Group.
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(110) “Retained Business Assets” shall mean:
(i) the ownership interests (to the extent held by Entergy, Enexus or any of their
respective Affiliates immediately prior to the Effective Time) in each member of the Entergy
Group;
(ii) the 50% ownership interest in EquaGen (but not the underlying assets);
(iii) all Retained Business Contracts, any rights or claims of Entergy, Enexus, or any
of their respective Affiliates, arising thereunder, and any other rights or claims or
contingent rights or claims of Entergy, Enexus, or any of their respective Affiliates,
primarily relating to or arising from any other Retained Business Asset or the Retained
Business;
(iv) all Assets owned, leased or held by Entergy, Enexus, or any of their respective
Affiliates immediately prior to the Effective Time that are used primarily in the Retained
Business, including facilities, equipment, and nuclear fuel (unexpended or expended);
(v) subject to ARTICLE X, any rights of any member of the Entergy Group under
any Retained Business Policies and any Shared Policies, to the extent related to the
Retained Business;
(vi) any Exclusive Entergy Contingent Gain;
(vii) the Assets listed or described on Schedule 1.1(110)(vii) and any and all
Assets that are expressly contemplated by this Agreement or any Ancillary Agreement as
Assets to be retained by, or assigned or transferred to, any member of the Entergy Group;
(viii) all Entergy Accounts, and, subject to the provisions of Section 2.5, all
cash, cash equivalents, and securities on deposit in such accounts immediately prior to the
Effective Time; and
(ix) any collateral securing any Retained Business Liability immediately prior to the
Effective Time.
Notwithstanding the foregoing, the Retained Business Assets shall not in any event include:
(A) the Assets listed or described on Schedule 1.1(110)(ix)(A); or
(B) any Assets that are expressly contemplated by this Agreement or any
Ancillary Agreement as Assets to be retained by, or assigned or transferred to, any
member of the Enexus Group or the Joint Venture Group,
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including any Exclusive Enexus Contingent Gain or Exclusive EquaGen Contingent
Gain.
(111) “Retained Business Contracts” shall mean the following Contracts to which
Entergy or any of its Affiliates is a party or by which it or any of its Affiliates or any of their
respective Assets is bound, except for any such Contract or part thereof that is expressly
contemplated to be transferred or assigned to (or remain with) any member of the Enexus Group
pursuant to any provision of this Agreement or any Ancillary Agreement:
(i) any Contract entered into in the name of, or expressly on behalf of, any division,
business unit or member of the Entergy Group;
(ii) any Contract that relates primarily to the Retained Business;
(iii) any Contract representing capital or operating equipment lease obligations of
facilities or equipment primarily used by any member of the Entergy Group;
(iv) any Contract or part thereof that is otherwise expressly contemplated pursuant to
this Agreement or any of the Ancillary Agreements to be retained by, or assigned or
transferred to, any member of the Entergy Group;
(v) any guarantee, indemnity, representation or warranty of any member of the Entergy
Group; and
(vi) the Contracts listed or described on Schedule 1.1(111)(vi).
(112) “Retained Business Liabilities” shall mean:
(i) the Liabilities listed or described on Schedule 1.1(112)(i) and any and all
Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement as
Liabilities to be retained, assumed or retired by any member of the Entergy Group;
(ii) any and all Liabilities of Entergy, Enexus, or any of their respective Affiliates,
primarily relating to, arising out of or resulting from:
(A) the operation or conduct of the Retained Business, as conducted at any time
prior to, on or after the Effective Time (including any Liability primarily relating
to, arising out of or resulting from any act or failure to act by any director,
officer, employee, agent, or representative of Entergy, Enexus, or any of their
respective Affiliates (whether or not such act or failure to act is or was within
such Person’s authority));
(B) the operation or conduct of any business conducted by any member of the
Entergy Group at any time after the Effective Time (including any Liability
primarily relating to, arising out of or resulting from any act or failure to act by
any director, officer, employee, agent or representative of Entergy or any of
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its Affiliates after the Effective Time (whether or not such act or failure to
act is or was within such Person’s authority)); or
(C) the Retained Business or any Retained Business Assets, whether arising
before, on or after the Effective Time;
(iii) any and all Liabilities to the extent primarily relating to, arising out of or
resulting from any terminated, discontinued or divested Business Entity, business, real
property, Asset or operation formerly and primarily owned or managed by, or associated with,
any member of the Entergy Group or the Retained Business;
(iv) any and all Liabilities (including under applicable federal and state securities
Laws) relating to, arising out of or resulting from:
(A) the Disclosure Documents (including the Form 10, the Information Statement,
and any offering memorandum or similar document in connection with the financing
transactions described in Section 3.5(a)), but only to the extent such
Liability derives from a misstatement or omission contained in the sections of such
documents entitled “Letter to Entergy Shareholders,” “The Separation” and “Certain
Relationships and Related Party Transactions – Agreements with Entergy” and the
section entitled “Summary,” to the extent such section summarizes the other sections
set forth in this paragraph;
(B) any Pre-Separation Disclosure, but only to the extent such Liabilities
arise out of, or result from, matters related to businesses, operations, assets or
liabilities allocated to Entergy in the Separation pursuant to this Agreement; and
(C) any Entergy Disclosure;
(v) any and all Liabilities, including those Liabilities listed on Schedule
1.1(112)(v), relating to, arising out of or resulting from any Indebtedness (including
debt securities and asset-backed debt) of any member of the Entergy Group (whether incurred
prior to, on or after the Effective Time);
(vi) any and all Liabilities relating to, arising out of or resulting from any Action
listed or described on Schedule 1.1(112)(vi);
(vii) any Exclusive Entergy Contingent Liability;
(viii) any and all Liabilities of the guarantor under the guarantees listed or
described on Schedule 1.1(112)(viii); and
(ix) any and all obligations of an insured Person under each Retained Business Policy
and each Shared Policy to the extent related to or arising out of the Retained Business.
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Notwithstanding the foregoing, the Retained Business Liabilities shall not in any event
include:
(A) any Liabilities that are expressly contemplated by this Agreement or any
Ancillary Agreement as Liabilities to be retained or assumed by any member of the
Enexus Group or the Joint Venture Group, including any Liabilities set forth on
Schedule 1.1(112)(ix)(A);
(B) any Liabilities related or attributable to, or arising in connection with,
the employment, service, termination of employment or termination of service of
Entergy Employees, which shall be exclusively governed by the Employee Matters
Agreement;
(C) any Liabilities related or attributable to, or arising in connection with,
Taxes or Tax Returns, which shall be exclusively governed by the Tax Sharing
Agreement; and
(D) any Liabilities of the guarantor under the guarantees listed or described
on Schedule 1.1(93)(vii).
FOR THE AVOIDANCE OF DOUBT, NO LIABILITY SHALL BE A RETAINED BUSINESS LIABILITY SOLELY AS A RESULT
OF ENTERGY OR ANY OTHER MEMBER OF THE ENTERGY GROUP BEING NAMED AS PARTY TO, OR IN, ANY ACTION.
(113) “Retained Business Policies” shall mean all Policies, whether or not in force on
the Effective Time, issued insurers to Entergy, Enexus, or any of their respective Affiliates, that
cover risks that relate exclusively to the Retained Business.
(114) “Rules” shall have the meaning set forth in Section 9.2.
(115) “Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder, all as the same shall be in effect at the time
that reference is made thereto.
(116) “Security Interest” shall mean any mortgage, security interest, pledge, lien,
charge, claim, option, right to acquire, voting or other restriction, right-of-way, condition,
easement, encroachment, restriction on transfer, or other encumbrance of any nature whatsoever,
excluding restrictions on transfer under securities Laws.
(117) “Separation” shall have the meaning set forth in the recitals hereto.
(118) “Shared Policies” shall mean all Policies, whether or not in force on the
Effective Time, issued by insurers to Entergy, Enexus, or any of their respective Affiliates, which
cover risks that relate to both the Retained Business and the Non-Utility Nuclear Business. For
the avoidance of doubt, Shared Policies shall not include any Non-Utility Nuclear Policies or
Retained Business Policies.
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(119) “Shared Services Agreements” shall mean, collectively, the Shared Services
Agreement (Nuclear)(Entergy), Shared Services Agreement (Nuclear)(JV) and the Shared Services
Agreement (Corporate).
(120) “Shared Services Agreement (Nuclear)(Entergy)” shall mean the Shared Services
Agreement, by and between Entergy Operations, Inc. and EquaGen, dated the date hereof and
substantially in the form attached as Exhibit F hereto.
(121) “Shared Services Agreement (Nuclear)(JV)” shall mean the Shared Services
Agreement, by and between Entergy Services, Inc. and EquaGen, dated the date hereof and
substantially in the form attached as Exhibit G hereto.
(122) “Shared Services Agreement (Corporate)” shall mean the Corporate Services
Agreement by and between Entergy Services, Inc. and EquaGen, dated the date hereof and
substantially in the form attached as Exhibit H hereto.
(123) “Software” shall mean all computer programs (whether in source code, object
code, or other form), algorithms, databases, compilations and data, and technology supporting the
foregoing, and all documentation, including flowcharts and other logic and design diagrams,
technical, functional and other specifications, and user and training materials related to any of
the foregoing.
(124) “Subsidiary” shall mean with respect to any Person (i) a corporation, at least a
majority of the voting capital stock of which is, as of the time in question, directly or
indirectly owned by such Person and (ii) any other limited liability company, partnership, joint
venture, association, joint stock company, trust, unincorporated organization or other entity in
which such Person, directly or indirectly, owns at least a majority of the equity economic interest
thereof or has the power to elect or direct the election of at least a majority of the members of
the governing body of such entity or otherwise has control over such entity (e.g., as the managing
partner of a partnership). For the avoidance of doubt, for long as a Party owns, directly or
indirectly, no more than fifty percent (50%) of the outstanding membership interests of EquaGen, no
member of the Joint Venture Group shall constitute a Subsidiary of such Party for purposes of this
Agreement.
(125) “Tax” shall have the meaning set forth in the Tax Sharing Agreement.
(126) “Tax Sharing Agreement” shall mean the Tax Sharing Agreement by and between
Entergy, Enexus, and certain members of the Enexus Group, dated as of the date hereof, and
substantially in the form attached as Exhibit I hereto.
(127) “Tax Return” shall have the meaning set forth in the Tax Sharing Agreement.
(128) “Third Party Claim” shall have the meaning set forth in Section 7.4(b).
(129) “Third Party Proceeds” shall have the meaning set forth in Section 7.7(a).
(130) “Trademarks” shall mean all United States and foreign trademarks, service marks,
corporate names, trade names, domain names, logos, slogans, designs, trade dress and other
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similar identifiers of source or origin, whether registered or unregistered, together with the
goodwill connected with the use of and symbolized by any of the foregoing.
(131) “Transition Services Agreement” shall mean the Transition Services Agreement by
and between Entergy and Enexus, dated as of the date hereof, and substantially in the form attached
as Exhibit J hereto.
(132) “Unallocated Asset” shall mean, without duplication:
(i) any Asset that accrues prior to the Distribution that is not a Non-Utility Nuclear
Asset or a Retained Business Asset; or
(ii) with respect to Contingent Gains, any Contingent Gain that is not an Exclusive
Entergy Contingent Gain or an Exclusive Enexus Contingent Gain.
(133) “Unallocated Liability” shall mean, without duplication:
(i) any and all Liabilities of Entergy, Enexus, or any of their respective Affiliates
that accrue prior to the Effective Time that are neither a Non-Utility Nuclear Liability nor
a Retained Business Liability;
(ii) any and all Contingent Liabilities that are neither an Exclusive Entergy
Contingent Liability nor an Exclusive Enexus Contingent Liability; or
(iii) any and all Liabilities of Entergy, Enexus, or any of their respective
Affiliates, relating to, arising out of, or resulting from, the matters listed or described
on Schedule 1.1(133)(iii).
Section 1.2. References; Interpretation.
References in this Agreement to any gender include references to all genders, and references
to the singular include references to the plural and vice versa. Any action to be taken by the
Board of Directors of a Party may be taken by a committee of the Board of Directors of such Party
if properly delegated by the Board of Directors of a Party to such committee. Unless the context
otherwise requires:
(a) the words “include,” “includes” and “including” when used in this Agreement shall be
deemed to be followed by the phrase “without limitation”;
(b) references in this Agreement to Articles, Sections, Annexes, Exhibits and Schedules shall
be deemed references to Articles and Sections of, and Annexes, Exhibits and Schedules to, this
Agreement;
(c) the words “hereof,” “hereby” and “herein” and words of similar meaning when used in this
Agreement refer to this Agreement in its entirety and not to any particular Article, Section or
provision of this Agreement; and
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(d) references in this Agreement to any time shall be to the then prevailing New York City,
New York time unless otherwise expressly provided herein.
Section 1.3. Effective Time.
This Agreement shall be effective as of the Effective Time.
Section 1.4. Tax Sharing.
The Tax Sharing Agreement will govern Entergy’s and Enexus’s respective (and their respective
Groups’) rights, responsibilities and obligations after the Distribution with respect to Taxes,
including ordinary course of business Taxes and Taxes, if any, incurred as a result of any failure
of the Distribution to qualify as a tax-free distribution for U.S. federal income tax purposes.
The Tax Sharing Agreement sets forth the respective obligations of Entergy and Enexus with respect
to the filing of Tax returns, the administration of Tax contests, cooperation and other matters,
and imposes certain restrictions on Entergy’s and Enexus’s ability to engage in certain actions
following the distribution. Except as expressly set forth in this Agreement or any Ancillary
Agreement, all matters relating to Taxes in connection with the transactions contemplated by this
Agreement shall be governed exclusively by the Tax Sharing Agreement.
Section 1.5. Employee Matters.
The Employee Matters Agreement will govern Entergy’s, EquaGen’s and Enexus’s respective (and
their respective Groups’) rights, responsibilities and obligations after the Distribution relating
to, arising out of, or resulting from the employment, service, termination of employment or
termination of service of Enexus Employees, EquaGen Employees and Entergy Employees. Except as
expressly set forth in this Agreement or any Ancillary Agreement, all matters relating to the above
in connection with the transactions contemplated by this Agreement shall be governed exclusively by
the Employee Matters Agreement.
Section 1.6. Joint Venture Agreements.
The Joint Venture Agreements will govern the formation, conduct, operation, governance, and
management of EquaGen, a joint venture comprised of the Joint Venture Group, established between
Subsidiaries of Entergy and Enexus. Except as expressly set forth in this Agreement or any other
Ancillary Agreement, all matters relating to the above in connection with the transactions
contemplated by this Agreement shall be governed exclusively by the Joint Venture Agreements.
Section 1.7. Shared Services Agreements.
The Shared Services Agreements will govern Entergy’s, EquaGen’s, and Enexus’s respective (and
their respective Groups’) rights, responsibilities and obligations after the Distribution relating
to, arising out of, or resulting from the provision of services and the other contractual
obligations contained in each Shared Service Agreement. Except as expressly set forth in this
Agreement or any other Ancillary Agreement, all matters relating to the above in connection with
the transactions contemplated by this Agreement shall be governed exclusively by the respective
Shared Services Agreement.
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Section 1.8. Operating Agreements.
The Operating Agreements will govern EquaGen’s and Enexus’s (and their respective Groups’)
respective rights, responsibilities and obligations after the Distribution relating to, arising out
of, or resulting from the operation, management or other contractual obligations contained in each
Operating Agreement. Except as expressly set forth in this Agreement or any other Ancillary
Agreement, all matters relating to the above in connection with the transactions contemplated by
this Agreement shall be governed exclusively by the respective Operating Agreement.
ARTICLE II
THE SEPARATION
Section 2.1. General.
Subject to the terms and conditions of this Agreement, including Section 4.4, the
Parties shall use, and shall cause their respective Affiliates to use, their respective
commercially reasonable efforts to consummate the transactions contemplated hereby, a portion of
which have already been implemented prior to the date hereof. It is the intent of the Parties
that, prior to consummation of the Distribution, Entergy, Enexus and each of their respective
Affiliates, shall be reorganized, to the extent necessary, such that immediately following the
consummation of such reorganization, subject to Section 2.7, (i) all of Entergy’s and its
Subsidiaries’ right, title and interest in and to the Non-Utility Nuclear Assets will be owned or
held by a member of the Enexus Group, the Non-Utility Nuclear Business will be conducted by the
members of the Enexus Group and the Non-Utility Nuclear Liabilities will be assumed directly or
indirectly by (or retained by) a member of the Enexus Group; (ii) all of Entergy’s and its
Subsidiaries’ right, title and interest in and to the Retained Business Assets will be owned or
held by a member of the Entergy Group, the Retained Business will be conducted by the members of
the Entergy Group and the Retained Business Liabilities will be assumed directly or indirectly by
(or retained by) a member of the Entergy Group.
Section 2.2. Transfer of Assets.
(a) On or prior to the Effective Time and to the extent not already completed:
(i) Entergy shall, on behalf of itself and the other members of the Entergy Group, as
applicable, transfer, contribute, assign, distribute, and convey, or cause to be
transferred, contributed, assigned, distributed and conveyed, to Enexus or another member of
the Enexus Group all of Entergy’s and the other Entergy Group members’ right, title and
interest in and to the Non-Utility Nuclear Assets; and
(ii) Enexus shall, on behalf of itself and the other members of the Enexus Group, as
applicable, transfer, contribute, assign, distribute, and convey, or cause to be
transferred, contributed, assigned, distributed and conveyed, to Entergy or another member
of the Entergy Group all of Enexus’s and the other Enexus Group members’ right, title and
interest in and to the Retained Business Assets; and
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(b) Unless otherwise agreed to by the Parties, each of Entergy and Enexus, as applicable,
shall be entitled to designate the Business Entity within such Party’s respective Group to which
any Assets are to be transferred pursuant to this Section 2.2 or Section 2.7.
Section 2.3. Assumption and Satisfaction of Liabilities.
Except as otherwise specifically set forth in any Ancillary Agreement, from and after the
Effective Time, (a) Entergy shall, or shall cause another member of the Entergy Group to, accept,
assume (or, as applicable, retain) and perform, discharge and fulfill, in accordance with their
respective terms, all of the Retained Business Liabilities and the Entergy percentage of any
Unallocated Liability and (b) Enexus shall, or shall cause another member of the Enexus Group to,
accept and assume (or, as applicable, retain) and perform, discharge and fulfill, in accordance
with their respective terms, all the Non-Utility Nuclear Liabilities and the Enexus percentage of
any Unallocated Liability, in each case regardless of (i) when or where such liabilities arose or
arise, (ii) where or against whom such Liabilities are asserted or determined and (iii) regardless
of whether arising from or alleged to arise from negligence, gross negligence, recklessness,
violation of Law, willful misconduct, bad faith, fraud or misrepresentation by any member of the
Entergy Group or the Enexus Group, as the case may be, or any of their past or present respective
directors, officers, employees, or agents, and (iv) regardless of which entity is named in any
action associated with any Liability.
Section 2.4. Intercompany Accounts.
(a) Each Intercompany Account outstanding immediately prior to the Effective Time, in any
general ledger account of Entergy, Enexus or any of their respective Affiliates, other than those
set forth on Schedule 2.4(b), shall be satisfied and/or settled by the relevant members of
the Entergy Group and the Enexus Group no later than the Effective Time by (i) forgiveness by the
relevant obligor, (ii) one or a related series of distributions of and/or contributions to capital,
or (iii) cash payment by the relevant obligor to the relevant obligee, in each case as agreed to by
the Parties.
(b) Each Intercompany Account outstanding immediately prior to the Effective Time under any of
the general ledger accounts of Entergy, Enexus or any of their respective Affiliates set forth on
Schedule 2.4(b) shall continue to be outstanding after the Effective Time (unless
previously satisfied in accordance with its terms) and thereafter (i) shall be an obligation of the
relevant Party (or the relevant member of such Party’s Group), each responsible for fulfilling its
(or a member of such Party’s Group’s) obligations in accordance with the terms and conditions
applicable to such obligation, and (ii) shall be for each relevant Party (or the relevant member of
such Party’s Group) an obligation to a third-party and shall no longer be an Intercompany Account.
Section 2.5. Bank Accounts; Cash Balances.
(a) The Parties agree to take, or cause the respective members of their respective Groups to
take, at the Effective Time (or such earlier time as the Parties may agree), all actions necessary
to amend all Contracts governing each bank and brokerage account owned by Enexus or any other
member of the Enexus Group (the “Enexus Accounts”), including all
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Enexus Accounts listed or described on Schedule 2.5(a), so that such Enexus Accounts,
if currently linked (whether by automatic withdrawal, automatic deposit, or any other authorization
to transfer funds from or to, hereinafter “linked”) to any bank or brokerage account owned
by Entergy or any other member of the Entergy Group (the “Entergy Accounts”) are de-linked
from the Entergy Accounts. From and after the Effective Time, no Entergy Employee or Former
Entergy Employee shall have any authority to access or control any Enexus Account, except as
provided for through the Transition Services Agreement or any Shared Services Agreement.
(b) The Parties agree to take, or cause the respective members of their respective Groups to
take, at the Effective Time (or such earlier time as the Parties may agree), all actions necessary
to amend all Contracts governing the Entergy Accounts so that such Entergy Accounts, if currently
linked to a Enexus Account, are de-linked from the Enexus Accounts. From and after the Effective
Time, no Enexus Employee or Former Enexus Employee shall have any authority to access or control
any Entergy Account.
(c) It is intended that, following consummation of the actions contemplated by sections (a)
and (b) above, there will continue to be in place a centralized cash management system pursuant to
which the Enexus Accounts will be managed centrally and funds collected will be transferred into
one or more centralized accounts maintained by Enexus.
(d) It is intended that, following consummation of the actions contemplated by sections (a)
and (b) above, there will continue to be in place a centralized cash management system pursuant to
which the Entergy Accounts will be managed centrally and funds collected will be transferred into
one or more centralized accounts maintained by Entergy.
(e) The Parties shall, and shall cause the respective members of their Groups to, cooperate
and use commercially reasonable efforts to have the Enexus Accounts contain an aggregate amount in
cash and cash equivalents at the Effective Time equal to $___.
(f) With respect to any outstanding checks issued by Entergy, Enexus, or any of their
respective Subsidiaries prior to the Effective Time, such outstanding checks shall be honored
following the Effective Time by the entity or Group owning the account on which the check is drawn.
(g) As between the two Parties (and the members of their respective Groups) all payments and
reimbursements received after the Effective Time by any Party (or member of its Group) that relate
to a Business, Asset or Liability of another Party (or member of its Group) shall be held by such
Party in trust for the use and benefit of the Party entitled thereto (at the expense of the Party
entitled thereto) and, promptly upon receipt by such Party of any such payment or reimbursement,
such Party shall pay over, or shall cause the applicable member of its Group to pay over to the
other Party, the amount of such payment or reimbursement without right of set-off.
Section 2.6. Limitation of Liability.
(a) Except as otherwise expressly provided in this Agreement or in the case of any knowing
violation of Law, fraud or misrepresentation, no Party or any Affiliate of such Party shall have
any Liability to any other Party or any other Affiliate of such other Party in the event
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that any Information exchanged or provided pursuant to this Agreement (but excluding any such
Information included in a Disclosure Document) which is an estimate or forecast, or that is based
on an estimate or forecast, is found to be inaccurate.
(b) Except as provided in Section 2.4, Section 2.11 or as set forth in
subsection (c) below, no Party or any member of such Party’s Group shall have any Liability to any
other Party or any member of such other Party’s Group based upon, arising out of or resulting from
any Contract, arrangement, course of dealing or understanding existing on or prior to the Effective
Time (other than this Agreement or any Ancillary Agreement or any Contract entered into in
connection herewith or in order to consummate the transactions contemplated hereby or thereby), and
each Party hereby terminates, and shall cause all members in its Group to terminate, any and all
Contracts, arrangements, course of dealings or understandings between it or any members in its
Group and the other Party, or any members of its Group, effective as of the Effective Time (other
than this Agreement or any Ancillary Agreement or any Contract entered into in connection herewith
or in order to consummate the transactions contemplated hereby or thereby), unless such Contract,
arrangement, course of dealing or understanding is set forth in any Ancillary Agreement or on
Schedule 2.6(b), and any such Liability, whether or not in writing, that is not reflected
in any Ancillary Agreement or on such Schedule, is hereby irrevocably cancelled, released and
waived effective as of the Effective Time. No such terminated Contract, arrangement, course of
dealing or understanding (including any provision thereof which purports to survive termination)
shall be of any further force or effect after the Effective Time.
(c) The provisions of Section 2.6(b) shall not apply to any of the following
Contracts, course of dealings or understandings (or to any of the provisions thereof):
(i) any Contracts to which any Person other than the Parties and their respective
Affiliates is a Party (it being understood that to the extent that the rights and
obligations of the Parties and the members of their respective Groups under any such
Contracts constitute Retained Business Assets or Non-Utility Nuclear Assets, Retained
Business Liabilities or Non-Utility Nuclear Liabilities, such Contracts shall be assigned or
retained pursuant to this ARTICLE II); and
(ii) any Contract or understanding to which any non-wholly-owned Subsidiary or
non-wholly-owned Affiliate of Entergy or Enexus is a Party.
Section 2.7. Transfers Not Effected On or Prior to the Effective Time; Transfers Deemed
Effective as of the Effective Time.
(a) To the extent that any transfers contemplated by this ARTICLE II shall not have
been consummated on or prior to the Effective Time, the Parties shall cooperate to effect such
transfers as promptly following the Effective Time as shall be practicable. Nothing herein shall
be deemed to require the transfer of any Assets or the assumption of any Liabilities that by their
terms or operation of Law cannot be transferred; provided, however, that the
Parties shall, and shall cause the respective members of their Groups to, cooperate and use
commercially reasonable efforts to seek to obtain any necessary Consents or Governmental Approvals
for the transfer of all Assets and Liabilities contemplated to be transferred or assumed pursuant
to this ARTICLE II. In the event that any such transfer or assumption of Assets or
Liabilities has not
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been consummated from and after the Effective Time (i) the Party (or relevant member in its
Group) retaining such Asset shall thereafter hold (or shall cause such member in its Group to hold)
such Asset for the use and benefit of the Party (or relevant member in its Group) entitled thereto
(at the expense of the Person entitled thereto) and (ii) the Party intended to assume such
Liability shall, or shall cause the applicable member of its Group to, pay or reimburse the Party
(or the relevant member of its Group) retaining such Liability for all amounts paid or incurred in
connection with the retention of such Liability. In addition, the Party (or relevant member of its
Group) retaining such Asset or Liability shall (or shall cause such member in its Group to) treat,
insofar as reasonably possible and to the extent permitted by applicable Law, such Asset or
Liability in the ordinary course of business in accordance with past practice and take such other
actions as may be reasonably requested by the Party to which such Asset or Liability is to be
transferred or assumed in order to place such Party, insofar as reasonably possible, in the same
position as if such Asset or Liability had been transferred or assumed as contemplated hereby and
so that all the benefits and burdens relating to such Asset or Liability, including possession,
use, risk of loss, potential for gain, and dominion, control and command over such Asset or
Liability, are to inure from and after the Effective Time to the relevant member of the Entergy
Group or the Enexus Group, as the case may be, entitled to the receipt of such Asset or Liability.
(b) If and when the Consents, Governmental Approvals and/or conditions, the absence or
non-satisfaction of which caused the deferral of transfer of any Asset or assumption of any
Liability pursuant to Section 2.7(a), are obtained or satisfied, the transfer, assignment
or novation of the applicable Asset or Liability shall be effected in accordance with and subject
to the terms of this Agreement and/or the applicable Ancillary Agreement as promptly as practical
after the receipt of such Consents, Governmental Approvals and/or absence or satisfaction of
conditions.
(c) The Party (or relevant member of its Group) retaining any Asset or Liability due to the
deferral of the transfer or assignment of such Asset or the deferral of the assumption of such
Liability pursuant to Section 2.7(a) shall not be obligated, in connection with the
foregoing, to expend any money unless the necessary funds are advanced, or agreed in advance to be
reimbursed by the Party (or relevant member of its Group) entitled to such Asset or Liability,
other than reasonable attorneys’ fees and recording or similar fees, all of which shall be promptly
reimbursed by the Party (or relevant member of its Group) entitled to such Asset or Liability.
(d) On and prior to the twenty-four (24) month anniversary of the Effective Time, as
applicable, if any Party (or any member of its Group) determines that it owns any Asset or retains
any Liability that was allocated by the terms of this Agreement to the other Party or that is
agreed by such Party and the other Party in their good faith judgment to be an Asset or Liability
that more properly belongs to the other Party (other than (for the avoidance of doubt), as between
the Parties, for any Asset acquired from an unaffiliated third party by a Party or member of such
Party’s Group following the Effective Time), then the Party owning such Asset or retaining such
Liability shall transfer, contribute, assign, distribute, and convey, or shall cause any such Asset
or Liability to be transferred, contributed, assigned, distributed and conveyed, to the Party (or
relevant member of its Group) identified as the appropriate transferee and following such transfer,
contribution, assignment, distribution or conveyance, such Asset shall be a Non-Utility Nuclear
Asset or Retained Business Asset or such Liability shall be a Non-Utility Nuclear
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Liability or Retained Business Liability, as the case may be. In connection with such
transfer, contribution, assignment, distribution or conveyance, the receiving Party shall assume
all Liabilities related to any such Asset. Following the twenty-four (24) month anniversary of the
Effective Time, no Party (or relevant member of its Group) shall be obligated to transfer any newly
recognized Asset that would, had such Asset been recognized at the Effective Time, have been
transferred to the other Party (or relevant member of its Group) and, subject to Section
2.11(e), no Party shall be required to assume any newly recognized Liability that would, had
such Liability been recognized at the Effective Time, have been transferred to the other Party (or
relevant member of its Group).
(e) After the Effective Time, each Party (or any member of its Group) may receive mail, email,
telegrams, packages and other communications properly belonging to the other Party (or any member
of its Group). Accordingly, at all times after the Effective Time, each Party authorizes the other
Party (or any member of its Group) to receive and open all mail, telegrams, email, packages and
other communications received by such Party (or any member of its Group) and not unambiguously
intended for such first Party, any member of such first Party’s Group or any of their respective
officers, directors, employees or other agents, and, to the extent that they do not relate to the
business of the receiving Party, the receiving party shall promptly deliver such mail, email,
telegrams, packages or other communications (or, in case the same relate to both businesses, copies
thereof) to the other Party as provided for in Section 11.6. The provisions of this
Section 2.7(e) are not intended to, and shall not be deemed to, constitute an authorization
by any Party (or any member of its Group) to permit the other to accept service of process on its
(or its members’) behalf and no Party (or any member of its Group) is or shall be deemed to be the
agent of the other Party (or any member of its Group) for service of process purposes.
Section 2.8. Conveyancing and Assumption Instruments. In connection with, and in
furtherance of, the assignments, distributions, transfers and conveyances of Assets and the
acceptance and assumptions of Liabilities contemplated by this Agreement, the Parties shall execute
or cause to be executed, on or prior to the Effective Time, by the appropriate entities, the
Conveyancing and Assumption Instruments necessary to evidence the valid and effective assumption by
the applicable Party (or any member of its Group) of its assumed Liabilities, and the valid
transfer, contribution, assignment, distribution and conveyance to the applicable Party (or member
of such Party’s Group) of all right, title and interest in and to its accepted Assets, including
the transfer of real property with quit claim deeds, as may be appropriate.
Section 2.9. Further Assurances.
(a) In addition to and without limiting the actions specifically provided for elsewhere in
this Agreement, including Section 2.7, each of the Parties shall cooperate with each other
and use (and will cause the relevant member of its Group to use) commercially reasonable efforts,
prior to, on and after the Effective Time, to take, or to cause to be taken, all actions, and to
do, or to cause to be done, all things reasonably necessary on its part under applicable Law or
contractual obligations to consummate and make effective the transactions contemplated by this
Agreement and the Ancillary Agreements.
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(b) Without limiting the foregoing, each Party shall cooperate with the other Party, from and
after the Effective Time without any further consideration, to execute and deliver, or use
commercially reasonable efforts to cause to be executed and delivered, all instruments, including
instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain all
Consents and/or Governmental Approvals, any permit, Contract, indenture or other instrument
(including any Consents or Governmental Approvals), and to take all such other actions as such
Party may reasonably be requested to take by the other Party from time to time, consistent with the
terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and
purposes of this Agreement and the Ancillary Agreements and the conveyances, assignments and
transfers of the applicable Assets and the assignment and assumption of the applicable Liabilities
and the other transactions contemplated hereby and thereby. Without limiting the foregoing, each
Party will, at the reasonable request of the other Party, take such other actions as may be
reasonably necessary to vest in such other Party such title possessed by the transferring Party to
the Assets allocated to such Party under this Agreement or any of the Ancillary Agreements, free
and clear of any Security Interest, if and to the extent it is practicable to do so.
Section 2.10. Novation of Liabilities; Consents; Assumption of Liabilities.
(a) Each Party, at the request of the other Party, shall use commercially reasonable efforts
to obtain, or to cause to be obtained, any Consent, release, substitution or amendment required to
novate or assign all obligations under Contracts, licenses and other obligations or Liabilities for
which a member of such Party’s Group and a member of the other Party’s Group are jointly or
severally liable and that do not constitute Liabilities of such other Party as provided in this
Agreement (such other Party, the “Other Party”), or to obtain in writing the unconditional
release of all parties to such arrangements (other than any member of the Group who assumed or
retained such Liability as set forth in this Agreement), so that, in any such case, the members of
the applicable Group will be solely responsible for such Liabilities; provided,
however, that no Party shall be obligated to pay any consideration therefor to any third
party from whom any such Consent, substitution or amendment is requested (unless such Party is
fully reimbursed by the requesting Party).
(b) If the Parties are unable to obtain, or to cause to be obtained, any such required
Consent, release, substitution or amendment, the Other Party or a member of such Other Party’s
Group shall continue to be bound by such Contract, license or other obligation that does not
constitute a Liability of such Other Party and, unless not permitted by Law or the terms thereof,
as agent or subcontractor for such other Party, the Party or member of such Party’s Group who
assumed or retained such Liability as set forth in this Agreement (the “Liable Party”)
shall, or shall cause a member of its Group to, pay, perform and discharge fully all the
obligations or other Liabilities of such Other Party or member of such Other Party’s Group
thereunder from and after the Effective Time; provided, however, that the Other
Party shall not be obligated to extend, renew or otherwise cause such Contract, license or other
obligation to remain in effect beyond the term in effect as of the Effective Time. The Liable
Party shall indemnify the Other Party and the members of such Other Party’s Group and hold each of
them harmless against any and all Liabilities arising in connection therewith; provided,
that the Liable Party shall have no obligation to indemnify the Other Party or any member of such
Other Party’s Group with respect to any matter to the extent that such Other Party has engaged in
any knowing
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violation of Law, fraud or misrepresentation in connection therewith. The Other Party shall,
without further consideration, promptly pay and remit, or cause to be promptly paid or remitted, to
the Liable Party or to another member of the Liable Party’s Group, all money, rights and other
consideration received by it or any member of its Group in respect of such performance by the
Liable Party (unless any such consideration is an Asset of such Other Party pursuant to this
Agreement). If and when any such Consent, release, substitution or amendment shall be obtained or
such agreement, lease, license or other rights or obligations shall otherwise become assignable or
able to be novated, the Other Party shall promptly assign, or cause to be assigned, all rights,
obligations and other Liabilities thereunder of any member of such Other Party’s Group to the
Liable Party or to another member of the Liable Party’s Group without payment of any further
consideration and the Liable Party, or another member of such Liable Party’s Group, without the
payment of any further consideration, shall assume such rights and Liabilities.
(c) Except as provided in Section 2.11 with respect to guarantees, each Party shall at
the request of the other Party use commercially reasonable efforts to novate or assign assumed
Liabilities, but no Party is required to pay consideration unless reimbursed by the Party
requesting novation or assignment. If the Parties cannot obtain novation or assignment, the Liable
Party shall act as agents or subcontractors of the Other Party that remains liable, and shall
indemnify that Party against Liabilities arising in connection therewith, except with respect to
matters involving knowing violation of the Law, fraud or misrepresentation by the Other Party or
any members of its Group.
Section 2.11. Guarantees.
(a) Enexus shall (with the reasonable cooperation of Entergy and the other members of
Entergy’s Group) use its best efforts, if so requested by Entergy, to have any member of Entergy’s
Group removed as guarantor of, or obligor for, any Non-Utility Nuclear Liability, including in
respect of those guarantees listed or described on Schedule 2.11(a).
(b) Entergy shall (with the reasonable cooperation of Enexus and the other members of Enexus’s
Group) use its best efforts, if so requested by Enexus, to have any member of Enexus’s Group
removed as guarantor of, or obligor for, any Retained Business Liability, including in respect of
those guarantees listed or described on Schedule 2.11(b) (each of the releases referred to
in clauses Section 2.11(a) and (b) of this Section 2.11, a “Guaranty
Release”).
(c) Until Entergy or Enexus is able to obtain, or to cause to be obtained, any such required
removal as set forth in clauses (a) and (b) of this Section 2.11, each of Entergy and
Enexus agrees to use its best efforts to not renew or extend the term of, increase its obligations
under, or transfer to a third party, any loan, guarantee, lease, or other Contract or obligation
for which the other Party is or may be liable unless (i) all obligations of such other Party and
the other members of such Party’s Group with respect thereto are thereupon terminated by
documentation reasonably satisfactory in form and substance to such other Party or (ii) in the
event a Guaranty Release is not obtained and such first Party wishes to extend the term of such
guaranteed loan, guarantee, lease or other Contract or obligation then such first Party shall have
the option of extending the term if it provides such security as is reasonably satisfactory to the
guarantor under such guarantee.
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(d) For the avoidance of doubt, each of the items listed or described on Schedule
2.11(a) are Non-Utility Nuclear Liabilities and, notwithstanding whether the guarantees are
removed pursuant to Section 2.11(a), such guarantees shall continue to be Non-Utility
Nuclear Liabilities and Enexus shall indemnify and hold harmless all Entergy Indemnitees against
any Indemnifiable Loss arising from or relating thereto in accordance with the provisions of
ARTICLE VII.
(e) For the avoidance of doubt, each of the items listed or described on Section
2.11(b) are Retained Business Liabilities and, notwithstanding whether the guarantees are
removed pursuant to Section 2.11(b), such guarantees shall continue to be Retained Business
Liabilities and Entergy shall indemnify and hold harmless all Enexus Indemnitees against any
Indemnifiable Loss arising from or relating thereto in accordance with the provisions of
ARTICLE VII.
(f) Notwithstanding that any guarantee is not listed on Section 2.11(a) or
Schedule 1.1(93)(vii), whether such guarantee is identified before or after the Effective
Time, any guarantee that is primarily related to the Non-Utility Nuclear Business shall constitute
a Non-Utility Nuclear Liability for purposes of this Agreement, including this Section
2.11.
(g) Each of the Parties shall, and shall cause the other members of their respective Groups
to, use their commercially reasonable efforts to evaluate or to assist the other Party in
evaluating any guarantee required to be so evaluated by FASB Interpretation No. 45.
Section 2.12. Disclaimer of Representations and Warranties. EACH OF ENTERGY (ON
BEHALF OF ITSELF AND EACH OTHER MEMBER OF THE ENTERGY GROUP), AND ENEXUS (ON BEHALF OF ITSELF AND
EACH OTHER MEMBER OF THE ENEXUS GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH
HEREIN OR IN ANY ANCILLARY AGREEMENT, NO PARTY TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY
OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR OTHERWISE,
IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS, BUSINESSES OR LIABILITIES CONTRIBUTED,
TRANSFERRED, DISTRIBUTED, OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS OR
GOVERNMENTAL APPROVALS REQUIRED IN CONNECTION HEREWITH OR THEREWITH, AS TO THE VALUE OR FREEDOM
FROM ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS TO
THE ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY
ACTION OR OTHER ASSET, INCLUDING ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY
OF ANY CONTRIBUTION, DISTRIBUTION, ASSIGNMENT, DOCUMENT, CERTIFICATE OR INSTRUMENT DELIVERED
HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING
HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, ALL
ASSETS ARE BEING TRANSFERRED ON AN “AS IS,” “WHERE IS” BASIS (AND, IN THE CASE OF ANY REAL
PROPERTY, BY MEANS OF A DEED OR CONVEYANCE WITHOUT WARRANTY) AND THE RESPECTIVE TRANSFEREES SHALL
BEAR THE ECONOMIC
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AND LEGAL RISKS THAT (I) ANY CONVEYANCE SHALL PROVE TO BE INSUFFICIENT TO VEST IN THE
TRANSFEREE GOOD TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST, AND (II) ANY NECESSARY CONSENTS OR
GOVERNMENTAL APPROVALS ARE NOT OBTAINED OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT
COMPLIED WITH.
ARTICLE III
CERTAIN ACTIONS PRIOR TO THE DISTRIBUTION
Section 3.1. Entergy Reorganization.
The Parties agree to take, or cause the members of their respective Groups to take, prior to
the Distribution, all actions necessary, subject to the terms of this Agreement, to effectuate the
reorganization of Entergy, Enexus and their respective Affiliates, in order to separate the
Non-Utility Nuclear Business and the Retained Business, including the following actions as set
forth on Schedule 3.1.
Notwithstanding anything to the contrary herein, in no event shall either Party transfer or
cause to be transferred any Assets regulated by a Governmental Entity such that the transactions
contemplated by this Agreement would require approval by or consent of a Governmental Entity, other
than the Governmental Approvals listed or described in Schedule 4.5(e).
Section 3.2. Certificate of Incorporation; Bylaws.
On or prior to the Effective Time, all necessary actions shall be taken to adopt the form of
amended and restated certificate of incorporation and the form of amended and restated by-laws
filed by Enexus with the Commission as exhibits to the Form 10.
Section 3.3. Directors.
On or prior to the Effective Time, Entergy shall take all necessary action to cause the Board
of Directors of Enexus to consist of the individuals identified in the Form 10 at the time declared
effective as directors of Enexus.
Section 3.4. Resignations.
(a) Subject to Section 3.4(b), on or prior to the Effective Time, (i) Entergy shall
cause all its employees and any employees of its Affiliates who do not become Enexus Employees or
Joint Venture Employees immediately prior to the Effective Time to resign, effective as of the
Effective Time, from all positions as officers or directors of any member of the Enexus Group or
the Joint Venture Group in which they serve, and (ii) Enexus shall cause, or shall cause all its
employees and any employees of its Affiliates who do not become Entergy Employees to resign,
effective as of the Effective Time, from all positions as officers or directors of any member of
the Entergy Group in which they serve.
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(b) No Person shall be required by either Party to resign from any position or office with
another Party if such Person is disclosed in the Information Statement as the Person who is to hold
such position or office following the Distribution.
Section 3.5. Enexus Financings.
(a) Schedule 3.5(a) sets forth the financing arrangements, debt issuances and related
Contracts to be entered into by Entergy and Enexus in connection with the Separation.
(b) Subject to Schedule 3.5(a), on or prior to the Effective Time,
(i) Enexus shall issue and deliver Enexus senior notes, in form and substance
acceptable to Entergy and Enexus, in an aggregate initial stated principal amount of ___
to be exchanged for outstanding Entergy senior notes.
(ii) Enexus shall issue to the market Enexus senior notes, in form and substance
acceptable to Entergy and Enexus, up to an aggregate stated principal amount of ___, the
net proceeds of which will be for working capital and other general purposes.
Section 3.6. Ancillary Agreements. On or prior to the Effective Time, Entergy and
Enexus shall enter into, and/or (where applicable) shall cause their respective Affiliates to enter
into, the Ancillary Agreements and any other Contracts in respect of the Distribution reasonably
necessary or appropriate in connection with the transactions contemplated hereby and thereby.
ARTICLE IV
THE DISTRIBUTION
Section 4.1. Stock Dividend to Entergy; Distribution.
On or prior to the Distribution Date, Enexus shall issue to Entergy as a stock dividend such
number of shares of Enexus Common Stock (or Entergy and Enexus shall take or cause to be taken such
other appropriate actions to ensure that Entergy has the requisite number of shares of Enexus
Common Stock) as will be required so that the total number of shares of Enexus Common Stock held by
Entergy immediately prior to the Distribution is equal to the total number of shares distributable
in the Distribution and Entergy shall cause the Agent to distribute all of the outstanding shares
of Enexus Common Stock then owned by Entergy to record holders of Entergy Common Stock on the
Record Date, and to credit the appropriate class and number of shares of Enexus Common Stock to
book entry accounts for each such record holder. Each record holder of Enexus Common Stock on the
Record Date will be entitled to receive in the Distribution ___ share of Enexus Common Stock for
every ___ share of by Entergy Common Stock held by such stockholder. For stockholders of Entergy
who own Entergy Common Stock through a broker or other nominee, their shares of Enexus Common Stock
will be credited to their respective accounts by such broker or nominee. No action by any such
stockholder shall be necessary for such stockholder (or such stockholder’s designated transferee or
transferees) to receive the applicable number of shares of (and, if applicable, cash in lieu of any
fractional shares of) Enexus Common Stock such stockholder is entitled to in the Distribution.
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Section 4.2. Fractional Shares. Entergy stockholders who, after aggregating the
number of shares of Enexus Common Stock (or fractions thereof) to which such stockholder would be
entitled on the Record Date, would be entitled to receive a fraction of a share of Enexus Common
Stock in the Distribution will receive cash in lieu of fractional shares. Fractional shares of
Enexus Common Stock will not be distributed in the Distribution nor credited to book-entry
accounts. The Agent shall, as soon as practicable after the Distribution Date (a) determine the
number of whole shares and fractional shares of Enexus Common Stock allocable to each holder of
record or beneficial owner of Entergy Common Stock as of the close of business on the Record Date,
(b) aggregate all such fractional shares into whole shares and sell the whole shares obtained
thereby in open market transactions at then prevailing trading prices on behalf of holders who
would otherwise be entitled to fractional share interests, and (c) distribute to each such holder,
or for the benefit of each such beneficial owner, such holder’s or owner’s ratable share of the net
proceeds of such sale, based upon the average gross selling price per share of Enexus Common Stock
after making appropriate deductions for any amount required to be withheld for United States
federal income tax purposes. Enexus shall bear the cost of brokerage fees and transfer taxes
incurred in connection with these sales of fractional shares, which such sales shall occur as soon
after the Distribution Date as practicable and as determined by the Agent. None of Entergy, Enexus
or the applicable Agent will guarantee any minimum sale price for the fractional shares of Enexus
Common Stock. Neither Entergy nor Enexus (not the Agent) will pay any interest on the proceeds
from the sale of fractional shares. The Agent will have the sole discretion to select the
broker-dealers through which to sell the aggregated fractional shares and to determine when, how
and at what price to sell such shares. Neither the Agent nor the selected broker-dealers will be
Affiliates of Entergy or Enexus.
Section 4.3. Actions in Connection with the Distribution.
(a) Enexus shall file such amendments and supplements to the Form 10 as Entergy may
reasonably request, and such amendments as may be necessary in order to cause the same to become
and remain effective as required by Law, including filing such amendments and supplements to the
Form 10 and Information Statement as may be required by the Commission or federal, state or foreign
securities Laws. Entergy shall mail to the holders of Entergy Common Stock, at such time on or
prior to the Distribution Date as Entergy shall determine, the Information Statement included in
the Form 10 and Information Statement, as well as any other information concerning Enexus, Enexus’s
business, operations and management, the Separation and such other matters as Entergy shall
reasonably determine are necessary and appropriate and as may be required by Law.
(b) Enexus shall also prepare, file with the Commission and cause to become effective any
registration statements or amendments thereof required to effect the establishment of, or
amendments to, any employee benefit and other plans necessary or appropriate in connection with the
transactions contemplated by this Agreement or any of the Ancillary Agreements, including any
transactions related to financings or other credit facilities. Promptly after receiving a request
from Entergy, to the extent requested, Enexus shall prepare and, in accordance with applicable Law,
file with the Commission any such documentation that Entergy determines is necessary or desirable
to effectuate the Distribution, and Entergy and Enexus shall each use commercially reasonable
efforts to obtain all necessary approvals from the Commission with respect thereto as soon as
practicable.
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(c) Promptly after receiving a request from Entergy, Enexus shall prepare and file, and shall
use commercially reasonable efforts to have approved and made effective, an application for the
original listing on the NYSE of the Enexus Common Stock to be distributed in the Distribution,
subject to official notice of distribution.
(d) Nothing in this Section 4.3 shall be deemed, by itself, to create a Liability of
Entergy for any portion of the Form 10.
Section 4.4. Sole Discretion of Entergy. Entergy shall, in its sole and absolute
discretion, determine the Distribution Date and all terms of the Distribution, including the form,
structure and terms of any transactions and/or offerings to effect the Distribution and the timing
of and conditions to the consummation thereof. In addition, Entergy may, in accordance with
Section 11.11, at any time prior to the Distribution Date and from time to time until the
completion of the Distribution decide to abandon the Distribution or modify or change the terms of
the Distribution, including by accelerating or delaying the timing of the consummation of all or
part of the Distribution. None of Enexus, any other member of the Enexus Group, any Enexus
Employee or any third party shall have any right or claim to require the consummation of the
Separation or the Distribution, each of which shall be effected at the sole discretion of the Board
of Directors of Entergy.
Section 4.5. Conditions to Distribution. Subject to Section 4.4, the
following are conditions to the consummation of the Distribution. The conditions are for the sole
benefit of Entergy. The fulfillment of the conditions does not create any obligation on Entergy’s
part to effect the Distribution, and the Board of Directors of Entergy has reserved the right, in
its sole discretion, to waive any or all of the conditions, and to amend, modify, or abandon the
transaction prior to the Distribution Date.
(a) The Form 10 shall have been declared effective by the Commission, with no stop order in
effect with respect thereto, and the Information Statement shall have been mailed to the holders of
Entergy Common Stock as of the Record Date;
(b) With respect to the Distribution, the Enexus Common Stock to be delivered in the
Distribution shall have been approved for listing on the NYSE, subject to official notice of
distribution;
(c) Prior to the Distribution, Entergy shall have obtained a private letter ruling from the
Internal Revenue Service in form and substance satisfactory to Entergy (in its sole discretion),
and such ruling shall remain in effect as of the Distribution Date, to the effect, among other
things, that the Distribution, together with certain other related transactions, qualifies as a
reorganization for United States Federal income tax purposes under Sections 355 and 368(a)(1)(D) of
the Code;
(d) Prior to the Distribution, Entergy shall have obtained an opinion from Xxxxxx Godward
Kronish LLP, its tax counsel, in form and substance satisfactory to Entergy (in its sole
discretion), substantially to the effect that the Distribution, together with certain other related
transactions, will qualify as reorganization for United States Federal income tax purposes under
Sections 355 and 368(a)(1)(D) of the Code;
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(e) Any material Governmental Approvals and other Consents necessary to consummate the
Distribution or any portion thereof (including the reorganization described in Section 3.1
and the debt financing transactions preceding the Distribution as described in Section 3.5)
shall have been obtained and be in full force and effect, including the regulatory approvals listed
or described on Schedule 4.5(e);
(f) No order, injunction or decree issued by any Governmental Entity of competent jurisdiction
or other legal restraint or prohibition preventing the consummation of all or any portion of the
Distribution, including the reorganization described in Section 3.1 and the debt financing
transactions preceding the Distribution as described in Section 3.5, and all transfers of
Assets and Liabilities contemplated in this Agreement or in the Joint Venture Agreements, shall be
in effect, and no other event outside the control of Entergy shall have occurred or failed to occur
that prevents the consummation of all or any portion of the Distribution;
(g) All permits, registrations, and consents required under the securities or blue sky laws of
states or other political subdivisions of the United States or other foreign jurisdictions in
connection with the distribution shall have been received;
(h) The reorganization listed or described in Section 3.1 shall have been completed;
and
(i) The Board of Directors of Entergy shall have approved the Distribution, which approval may
be given or withheld at its absolute and sole discretion.
ARTICLE V
CERTAIN COVENANTS
Section 5.1. Legal Names and Other Parties’ Trademark.
(a) Except as otherwise specifically provided in any Ancillary Agreement, as soon as
reasonably practicable after the Distribution Date, but in any event within three (3) months
thereafter, each Party shall cease (and shall cause all of the other members of its Group to
cease): (i) making any use of any Trademarks that include (A) any of the Trademarks of the other
Party or such other Party’s Subsidiaries or Affiliates (including, in the case of Enexus, “Entergy”
or “Entergy Corporation” or any other Trademark containing the word “Entergy”) and (B) any
Trademarks related thereto, including any Trademark derivative of or similar thereto (with respect
to each Party, such Trademarks of the other Party or any of such other Party’s Subsidiaries or
Affiliates, the “Other Party Marks”), and (ii) holding themselves out as having any
affiliation with the other Party or such other Party’s Subsidiaries or Affiliates;
provided, however, that the foregoing shall not prohibit any Party or any member of
a Party’s Group from (1) stating in any advertising or any other communication that it is formerly
an affiliate or otherwise describing it historical relationship with the other Party or (2) making
use of any Other Party Xxxx in a manner that would constitute “fair use” under applicable Law if
any unaffiliated third party made such use or would otherwise be legally permissible for any
unaffiliated third party without the consent of the Party owning such Other Party Xxxx. In
furtherance of the
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foregoing, as soon as practicable after the Distribution Date, but in no event later than
three (3) months thereafter, each Party shall (and cause all of the other members of its Group to),
at its own expense, remove (or, if necessary, on an interim basis, cover up), strike over or
otherwise obliterate all Other Party Marks from all of such Party’s and its Subsidiaries’ and
Affiliates’ assets and other materials, including any exterior signs and other identifiers located
on any property or premises, vehicles, products, supplies and documents (including, but not limited
to, purchase orders, forms, labels, packaging and shipping materials, catalogues, stationery, sales
brochures, business cards, schedules, operating manuals, instructional manuals, advertising
materials and similar material), websites, email, computer software and other materials and
systems; provided, however, that Enexus shall promptly after the Distribution Date
post a disclaimer on the xxx.xxxxxxxxxxxx.xxx website informing its customers that as of the
Effective Time and thereafter Enexus, and not Entergy, is responsible for the operation of the
Non-Utility Nuclear Business, including such website and any applicable services.
(b) Notwithstanding the foregoing requirements of Section 5.1(a), if any Party or any
member of such Party’s Group exercised good faith efforts to comply with Section 5.1(a) but
is unable, due to regulatory or other circumstance beyond its control, to effect a legal name
change in compliance with applicable Law such that an Other Party Xxxx remains in such Party’s or
its Group member’s legal name later than three (3) months after the Distribution Date, then such
Party or its relevant Group member will not be deemed to be in breach hereof as long as it
continues to exercise good faith efforts to effectuate such name change and does effectuate such
name change within nine (9) months after the Distribution Date, and, in such circumstances, such
Party or Group member may continue to include in its Assets and other materials references to the
Other Party Xxxx that is in such Party’s or Group member’s legal name which includes references to
“Enexus” or “Entergy” as applicable, but only to the extent necessary to identify such Party or
Group member and only until such Party’s or Group member’s legal name can be changed to remove and
eliminate such references.
(c) Notwithstanding the foregoing requirements of Section 5.1(a), Enexus shall not be
required to change any name including the word “Entergy” in any third-party Contract or license, or
in property records with respect to real or personal property, if an effort to change the name is
commercially unreasonable; provided, however, that (i) Enexus on a prospective
basis from and after the Distribution Date shall change the name in any new or amended third-party
Contract or license or property record; (ii) Enexus shall not advertise or make public any
continued use of the “Entergy” name permitted by this Section 5.1(c); and (iii) Enexus
shall be obligated, to the extent applicable, to provide prompt notice of the Separation and
updated contact information in connection with any such third-party Contract or license.
(d) With respect to any use by any Party or any of such Party’s Subsidiaries or Affiliates of
any of the Other Party Marks as permitted in this Section 5.1, (i) such use shall be at its
sole risk, on an “AS IS, WHERE IS” basis, without any representation or warranty whatsoever, (ii)
such use shall be subject to their compliance with all quality control and related requirements and
guidelines in effect for the Other Party Marks as of the Effective Time; and (iii) such Party or
such Party’s Subsidiaries or Affiliates is hereby granted a limited, non-exclusive license by the
other Party or its Subsidiaries or Affiliates, as applicable, to such Other Party Marks solely for
transitional purposes as permitted in this Section 5.1.
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Section 5.2. Auditors and Audits; Annual and Quarterly Financial Statements and
Accounting.
(a) Each Party agrees that during the period ending one hundred and eighty (180) days
following the Distribution Date and in any event solely with respect to the preparation and audit
of each of the Party’s financial statements for any of the fiscal years ended December 31, 2008,
2007, 2006, 2005 and 2004, the printing, filing and public dissemination of such financial
statements, the audit of each Party’s internal control over financial reporting and such Party’s
management’s assessment thereof, and each Party’s management’s assessment of such Party’s
disclosure controls and procedures:
(i) Annual Financial Statements. Each Party shall provide to the other Party
on a timely basis all information reasonably required to meet its schedule for the
preparation, printing, filing, and public dissemination of its annual financial statements
and for management’s assessment of the effectiveness of its disclosure controls and
procedures and its internal control over financial reporting in accordance with Items 307
and 308, respectively, of Regulation S-K promulgated by the Commission and, to the extent
applicable to such Party, its auditor’s audit of its internal control over financial
reporting and management’s assessment thereof in accordance with Section 404 of the
Xxxxxxxx-Xxxxx Act of 2002 and the Commission’s and Public Company Accounting Oversight
Board’s rules and auditing standards thereunder (such assessments and audit being referred
to as the “2008 Internal Control Audit and Management Assessments”). Without
limiting the generality of the foregoing, each Party will provide all required financial and
other Information with respect to itself and its Subsidiaries to its auditors in a
sufficient and reasonable time and in sufficient detail to permit its auditors to take all
steps and perform all reviews necessary to provide sufficient assistance to the other
Party’s auditors with respect to information to be included or contained in such other
Party’s annual financial statements and to permit such other Party’s auditors and management
to complete the 2008 Internal Control Audit and Management Assessments.
(ii) Access to Personnel and Records. Each audited Party shall authorize, and
use its commercially reasonable efforts to cause, its respective auditors to make available
to the other Party’s auditors (each such other Party’s auditors, collectively, the
“Other Party’s Auditors”) both the personnel who performed or are performing the
annual audits of such audited Party (each such Party with respect to its own audit, the
“Audited Party”) and work papers related to the annual audits of such Audited Party,
in all cases within a reasonable time prior to such Audited Party’s auditors’ opinion date,
so that the Other Party’s Auditors are able to perform the procedures they consider
necessary to take responsibility for the work of the Audited Party’s auditors as it relates
to their auditors’ report on such other Party’s financial statements, all within sufficient
time to enable such other Party to meet its timetable for the printing, filing and public
dissemination of its annual financial statements. Each Party shall make available to the
Other Party’s Auditors and management its personnel and Records in a reasonable time prior
to the Other Party’s Auditors’ opinion date and other Party’s management’s assessment date
so that the Other Party’s Auditors and other Party’s management are able to perform the
procedures they consider necessary to conduct the 2008 Internal Control Audit and Management
Assessments.
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(b) Amended Financial Reports. In the event a Party restates any of its financial
statements that includes such Party’s audited or unaudited financial statements with respect to any
balance sheet date or period of operation as of the end of and for the fiscal years 2008, 2007, and
2006, such Party will deliver to the other Party a substantially final draft, as soon as the same
is prepared, of any report to be filed by such first Party with the Commission that includes such
restated audited or unaudited financial statements (the “Amended Financial Report”);
provided, however, that such first Party may continue to revise its Amended
Financial Report prior to its filing thereof with the Commission, which changes will be delivered
to the other Party as soon as reasonably practicable; provided, further,
however, that such first Party’s financial personnel will actively consult with the other
Party’s financial personnel regarding any changes which such first Party may consider making to its
Amended Financial Report and related disclosures prior to the anticipated filing of such report
with the Commission, with particular focus on any changes which would have an effect upon the other
Party’s financial statements or related disclosures. Each Party will reasonably cooperate with,
and permit and make any necessary employees available to, the other Party, in connection with the
other Party’s preparation of any Amended Financial Reports.
(c) Financials; Outside Auditors. If any Party or member of its respective Group is
required, pursuant to Rule 3-09 of Regulation S-X promulgated by the Commission or otherwise, to
include in its Exchange Act filings audited financial statements or other information of the other
Party or member of the other Party’s Group, the other Party shall use its commercially reasonable
efforts (i) to provide such audited financial statements or other information, and (ii) to cause
its outside auditors to consent to the inclusion of such audited financial statements or other
information in the Party’s Exchange Act filings.
(d) Third Party Agreements. Nothing in this Section 5.2 shall require any
Party to violate any agreement with any third party regarding the confidentiality of confidential
and proprietary information relating to that third party or its business; provided,
however, that in the event that a Party is required under this Section 5.2 to
disclose any such information, such Party shall use commercially reasonable efforts to seek to
obtain such third party’s consent to the disclosure of such information.
Section 5.3. No Restrictions on Post-Closing Competitive Activities; Corporate
Opportunities.
(a) Each of the Parties agrees that this Agreement shall not include any non-competition or
other similar restrictive arrangements with respect to the range of business activities that may be
conducted by the Parties. Accordingly, each of the Parties acknowledges and agrees that nothing
set forth in this Agreement shall be construed to create any explicit or implied restriction or
other limitation on (i) the ability of any Party hereto to engage in any business or other activity
that competes with the business of any other Party, or (ii) the ability of any Party to engage in
any specific line of business or engage in any business activity in any specific geographic area.
Except as expressly provided in Section 5.3, hereof or in the Ancillary Agreements, each
Party and each Party’s Group shall have the right to, and shall have no duty not to, (i) engage in
the same or similar business activities or lines of business as the other Party and the other
Party’s Group, (ii) do business with any client or customer of the other Party and the other
Party’s Group, and (iii) employ or otherwise engage any officer or employee of the
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other Party and the other Party’s Group, and neither the Party nor the Party’s Group nor any
officer or director thereof shall be liable to the other Party and the other Party’s Group or its
stockholders for breach of any fiduciary duty by reason of any such activities of such Party or
such Party’s Group or of such person’s participation therein.
(b) Except as otherwise provided in the Ancillary Agreements, in the event that Entergy or any
other member of the Entergy Group acquires knowledge of a potential transaction or matter that may
be a corporate opportunity for both Entergy or any other member of the Entergy Group and Enexus or
any other member of the Enexus Group, neither Entergy nor any other member of the Entergy Group nor
any agent or advisor thereof shall have any duty to communicate or present such corporate
opportunity to Enexus or any other member of the Enexus Group and shall not be liable to Enexus or
any other member of the Enexus Group or to Enexus’s stockholders for breach of any fiduciary duty
as a stockholder of Enexus by reason of the fact that Entergy or any other member of the Entergy
Group pursues or acquires such corporate opportunity for itself, directs such corporate opportunity
to another Person, or does not present such corporate opportunity to Enexus or any other member of
the Enexus Group.
(c) In the event that Enexus or any other member of the Enexus Group acquires knowledge of a
potential transaction or matter that may be a corporate opportunity for both Entergy or any other
member of the Entergy Group and Enexus or any other member of the Enexus Group, neither Enexus nor
any other member of the Enexus Group nor any agent or advisor thereof shall have any duty to
communicate or present such corporate opportunity to Entergy or any other member of the Entergy
Group and shall not be liable to Entergy or any other member of the Entergy Group or to Entergy’s
stockholders for breach of any fiduciary duty as a stockholder of Entergy by reason of the fact
that Enexus or any other member of the Enexus Group pursues or acquires such corporate opportunity
for itself, directs such corporate opportunity to another Person, or does not present such
corporate opportunity to Entergy or any other member of the Entergy Group.
(d) For the purposes of this Section 5.3, “corporate opportunities” of Enexus
or any other member of the Enexus Group shall include business opportunities that Enexus or any
other member of the Enexus Group are financially able to undertake that are, by their nature, in a
line of business of Enexus or any other member of the Enexus Group, including the Non-Utility
Nuclear Business, are of practical advantage to them and are ones in which Enexus or any other
member of the Enexus Group have an interest or a reasonable expectancy, and in which, by embracing
the opportunities, the self-interest of Entergy or any other member of the Entergy Group or any of
their officers or directors will be brought into conflict with that of Enexus or any other member
of the Enexus Group, and “corporate opportunities” of Entergy or any other member of the Entergy
Group shall include, but not be limited to, business opportunities that Entergy or any other member
of the Entergy Group are financially able to undertake that are, by their nature, in a line of
business of Entergy or any other member of the Entergy Group, including the Retained Business, are
of practical advantage to them and are ones in which Entergy or any other member of the Entergy
Group have an interest or a reasonable expectancy, and in which, by embracing the opportunities,
the self-interest of Enexus or any other member of the Enexus Group or any of their officers or
directors will be brought into conflict with that of Entergy or any other member of the Entergy
Group.
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ARTICLE VI
CONTINGENT GAINS AND LIABILITIES AND UNALLOCATED ASSETS AND LIABILITIES
Section 6.1. Unallocated Assets and Contingent Gains.
(a) As of the Effective Time, the Parties have identified no Unallocated Assets. There shall
be a presumption that any Asset not explicitly addressed in this Agreement or the Joint Venture
Formation Agreement or set forth in any Schedules to this Agreement or the Joint Venture Formation
Agreement, is intended to be either a Joint Venture Asset, a Retained Business Asset, or a
Non-Utility Nuclear Asset. Such presumption may only be overcome by clear and convincing evidence
to the contrary. Any dispute as to the proper characterization of an Asset as being a Non-Utility
Nuclear Asset or Retained Business Asset and not specifically addressed by this Agreement shall be
resolved under Section 6.4. Any dispute as to the proper characterization of an Asset
being a Joint Venture Asset shall be resolved under the terms of the Joint Venture Formation
Agreement.
(b) To the extent any benefit is received from any Unallocated Asset, that benefit (net of
costs to realize the benefit) shall be shared among Entergy and Enexus in proportion to the Entergy
Percentage and the Enexus Percentage, respectively, and shall be paid in accordance with
Section 6.3. The Parties agree that no portion of an Unallocated Asset will be shared with
or allocated to EquaGen or any member of the EquaGen Group.
(c) Contingent Gains not known as of the Effective Time shall be referred to the Contingent
Claim Committee for determination pursuant to the provisions of Section 6.4 of whether the
Contingent Gain is an Exclusive Entergy Contingent Gain, an Exclusive Enexus Contingent Gain or an
Unallocated Asset.
(d) As of the Effective Time, all known Contingent Gains are identified in Schedules
1.1(54) 1.1(56)1.1(54), and 1.1(58) and such Contingent Gains are either Joint
Venture Assets, Non-Utility Nuclear Assets or Retained Business Assets, as provided in Section
1.1(81), Section 1.1(90)(vii) and Section 1.1(110)(vi), respectively. There
shall be a presumption that any Contingent Gain not explicitly addressed in this Agreement or set
forth in the Schedules hereto is, nevertheless, intended to be either a Joint Venture Asset, a
Retained Business Asset or a Non-Utility Nuclear Asset. Such presumption may only be overcome by
clear and convincing evidence to the contrary.
(e) Any Contingent Gain that is an Exclusive EquaGen Contingent Gain shall be a Joint Venture
Asset and shall be administered by EquaGen in accordance with the Joint Venture Agreement and
EquaGen shall have the sole right to any benefit therefrom.
(f) Any Contingent Gain determined by the Contingent Claim Committee pursuant to Section
6.4 to be an Exclusive Entergy Contingent Gain shall be a Retained Business Asset as provided
in Section 1.1(110)(vi), and shall be administered by Entergy and Entergy shall have the
sole right to any benefit therefrom.
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(g) Any Contingent Gain determined by the Contingent Claim Committee pursuant to Section
6.4 to be an Exclusive Enexus Contingent Gain shall be a Non-Utility Nuclear Asset as provided
in Section 1.1(90)(vii), and shall be administered by Enexus and Enexus shall have the sole
right to any benefit therefrom.
(h) Any Asset or Contingent Gain determined by the Contingent Claim Committee pursuant to
Section 6.4 to be an Unallocated Asset shall be administered by Entergy. Entergy shall
have sole and exclusive authority to commence, assign, prosecute, settle, manage, control, conduct,
waive, forgo, release, discharge, forgive and otherwise determine all matters whatsoever with
respect to any Unallocated Asset, it being understood that it is the present intent of the Parties
that as soon as commercially practicable any Unallocated Asset shall be monetized and the proceeds
distributed in accordance with Section 6.1(b). Enexus shall not take, or permit any Enexus
Affiliate to take, any action (including commencing any claim) that would interfere with such
rights and powers of any member of the Entergy Group.
(i) Entergy shall notify Enexus in the event that it commences an Action with respect to an
Unallocated Asset; provided that the failure to provide such notice shall not give rise to any
rights on the part of Enexus or against Entergy or affect any other provision of this Section
6.1. Enexus acknowledges (i) that Entergy may elect not to pursue any Action regarding any
Unallocated Asset for any reason whatsoever (including a different assessment of the merits of any
Action or right than Enexus might have or any business reasons that are in the best interests of
Entergy or a member of the Entergy Group, without regard to the best interests of any member of the
Enexus Group or any Enexus Affiliate), and (ii) that no member of the Entergy Group shall have any
liability to any Person (including Enexus and any Enexus Affiliate) as a result of any such
determination.
Section 6.2. Unallocated Liabilities and Contingent Liabilities.
(a) As of the Effective Time, Schedule 1.1(133)(iii) sets forth all Liabilities known
to the Parties that they intend to be Unallocated Liabilities. There shall be a presumption that
any Liability not explicitly addressed in this Agreement or the Joint Venture Agreements or set
forth in each of the Schedules thereto is intended to be either a Joint Venture Liability, a
Retained Business Liability or a Non-Utility Nuclear Liability. Such presumption may only be
overcome by clear and convincing evidence to the contrary. Any dispute as to the proper
characterization of a Liability as being a Non-Utility Nuclear Liability or a Retained Business
Liability and not specifically addressed by this Agreement shall be resolved under Section
6.4. Any dispute as to the proper characterization of a Liability being a Joint Venture
Liability shall be resolved under the terms of the Joint Venture Formation Agreement.
(b) Each of Entergy and Enexus shall be responsible for its Allocated Percentage of any
Unallocated Liability. It shall not be a defense to any obligation by any Party to pay any amount
in respect of any Unallocated Liability that such party was not consulted in the defense thereof,
that such Party’s views or opinions as to the conduct of such defense were not accepted or adopted,
that such Party does not approve of the quality or manner of the defense thereof or that such
Unallocated Liability was incurred by reason of a settlement rather than by a judgment or other
determination of liability; provided, however, that neither Party shall settle an
Unallocated Liability in a manner that would restrict or limit the future conduct of the other
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Party’s business or operations without such other Party’s consent. The Parties agree that no
portion of an Unallocated Liability will be allocated to EquaGen or any member of the EquaGen
Group.
(c) As of the Effective Time, all known Contingent Liabilities are identified in Schedules
1.1(55), 1.1(57) and 1.1(65) and such Contingent Liabilities are
either Joint Venture Liabilities, Retained Business Liabilities or Non-Utility Nuclear Liabilities
pursuant to , Section 1.1(92), Section 1.1(93)(vi), and Section
1.1(112)(vii). The respective Party assigned a Contingent Liability as an Exclusive Entergy
Contingent Liability or an Exclusive Enexus Contingent Liability shall be solely responsible for
managing the defense of the claim, including, without limitation, whether to settle, and shall have
sole responsibility, as between the Enexus Group and the Entergy Group, for the costs, expenses,
liabilities and judgments associated with the Action, notwithstanding that any member of the Enexus
Group or the EquaGen Group (with respect to an Exclusive Entergy Contingent Liability) or any
member of the Entergy Group or the EquaGen Group (with respect to an Exclusive Enexus Contingent
Liability) may have been named or remained a party to the Action. Any Contingent Liability that is
an Exclusive EquaGen Contingent Liability shall be a Joint Venture Liability and shall be governed
solely in accordance with the Joint Venture Agreements including any decisions regarding managing
the defense of the claim, including, without limitation, whether to settle, and EquaGen, in
accordance with the Joint Venture Agreements, shall have sole responsibility for the costs,
expenses, liabilities and judgments associated with the Action, notwithstanding that any member of
the Enexus Group or any member of the Entergy Group may have been named or remained a party to the
Action. There shall be a presumption that any Contingent Liability not explicitly addressed in this
Agreement or the Joint Venture Agreements or set forth in each of the Schedules thereto is intended
to be either a Joint Venture Liability, a Retained Business Liability or a Non-Utility Nuclear
Liability. Such presumption may only be overcome by clear and convincing evidence to the contrary.
(d) Contingent Liabilities not known as of the Effective Time, or otherwise not included in
Schedules 1.1(55) and 1.1(57), shall be referred to the Contingent Claim
Committee for determination pursuant to the provisions of Section 6.4 of whether the
Contingent Liability is an Exclusive Entergy Contingent Liability, an Exclusive Enexus Contingent
Liability or an Unallocated Liability.
(i) Any Contingent Liability determined by the Contingent Claim Committee pursuant to
Section 6.4 to be an Exclusive Entergy Contingent Liability shall be a Retained
Business Liability as provided in Section 1.1(112)(vii), and shall be administered
by Entergy and Entergy shall indemnify:
(A) Enexus from such Liability in accordance with ARTICLE VII; and
(B) EquaGen in accordance with ARTICLE VI of the Joint Venture
Formation Agreement.
(ii) Any Contingent Liability determined by the Contingent Claim Committee pursuant to
Section 6.4 to be an Exclusive Enexus Contingent Liability shall
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be a Enexus Liability as provided in Section 1.1(93)(vi), and shall be
administered by Enexus and Enexus shall indemnify:
(A) Entergy from such Liability in accordance with ARTICLE VII; and
(B) EquaGen from such Liability in accordance with ARTICLE VI of the
Joint Venture Formation Agreement.
(iii) Any Contingent Liability that is an Exclusive EquaGen Contingent Liability shall
be a Joint Venture Liability and shall be administered by EquaGen in accordance with the
Joint Venture Agreements and EquaGen shall indemnify Enexus and Entergy in accordance with
ARTICLE VI of the Joint Venture Formation Agreement.
(iv) Except as set forth in Schedule 1.1(133)(iii), Entergy shall assume the
defense of, and may seek to settle or compromise, any claim determined by the Contingent
Claim Committee pursuant to Section 6.4 to be an Unallocated Liability, and the
costs and expenses (including allocated costs of in-house counsel and other personnel)
thereof shall be included in the calculation of the amount of the applicable Unallocated
Liability in determining the reimbursement obligations of Enexus with respect thereto.
(e) Schedule 1.1(133)(iii) indicates, to the extent so identifiable on the date
hereof, the Party that shall be responsible for administering each item set forth therein and any
special procedures to be applied in administering or allocating the Liability associated with each
Unallocated Liability set forth therein.
Section 6.3. Payments.
(a) Any amount owed in respect of any Unallocated Liabilities (including reimbursement for the
cost or expense (including allocated costs of in-house counsel and other personnel) of defense of):
(i) any Third Party Claim that is an Unallocated Liability, or
(ii) any Unallocated Asset pursuant to this ARTICLE VI,
shall be remitted promptly after the Party entitled to such amount provides an invoice (including
reasonable supporting information with respect thereto) to the Party owing such amount.
(b) In the case of any Unallocated Liability, the Party responsible for the administration of
such Unallocated Liability shall be entitled to reimbursement from the other Party in advance of a
final determination of any Action for amounts paid in respect of costs and expenses (including
allocated costs of in-house counsel and other personnel) related thereto, from time to time as such
costs and expenses are incurred. In the case of any Unallocated Asset, Entergy shall be entitled to
retain from the amount of the Unallocated Assets otherwise payable to Enexus, Enexus’s respective
Allocated Percentage of the costs and expenses (including allocated costs of in-house counsel and
other personnel) paid or incurred by or on behalf of any member of the Entergy Group in connection
with such Unallocated Assets.
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(c) Any amounts billed and properly payable in accordance with this ARTICLE VI that
are not paid within forty-five (45) days of such xxxx shall bear interest at the lesser of (i)
Prime Rate plus 2% per annum or (ii) the maximum contractual rate permitted by Law, from the date
of invoice until paid. Adjustments to the interest rate shall be made as of the first Business Day
of each week based upon the Prime Rate at the Close of the most recent prior Business Day.
Section 6.4. Procedures to Determine Status of Liability or Asset.
(a) On the Distribution Date, Entergy and Enexus will form a Contingent Claim Committee of two
persons and comprised of the general counsel or chief legal officer of Entergy and Enexus (as
appropriate), or their respective delegates, for the purpose of resolving whether:
(i) any Contingent Liability or Unallocated Liability not identified in the schedules
to this Agreement or in the Joint Venture Formation Agreement is a Retained Business
Liability, a Non-Utility Nuclear Liability or an Unallocated Liability; or
(ii) any Contingent Gain or Unallocated Asset not identified in the schedules to this
Agreement or in the Joint Venture Agreements is a Retained Business Asset, a Non-Utility
Nuclear Asset or an Unallocated Asset.
(b) If any Party or any member of such Party’s Group shall receive notice or otherwise learn
of an Asset that may reasonably be determined to be a Contingent Gain or an Unallocated Asset, or
the assertion of a Third Party Claim which may reasonably be determined to be a Contingent
Liability or an Unallocated Liability, not identified in the schedules to this Agreement or in the
Joint Venture Formation Agreement, such Party shall give the other Party and the Contingent Claim
Committee written notice thereof promptly (and in any event within fifteen (15) days) after such
Person becomes aware of such Asset, Liability or Third Party Claim. Thereafter, the Party shall
deliver to the Contingent Claim Committee, promptly (and in any event within five (5) Business
Days) after the Party’s receipt thereof, copies of all notices and documents (including court
papers) received by the Party or the member of such Party’s Group relating to the matter.
(c) If a dispute shall arise between the Parties as to the proper characterization of any
Asset or Liability (other than one covered under Section 6.4(b)), then any Party may refer that
dispute to the Continent Claim Committee for resolution in the same manner as set forth for a Third
Party Claim or an Asset or Contingent Gain that may be an Unallocated Asset; provided,
however, that any dispute as to the proper characterization of an Asset or Liability as
being a Joint Venture Asset or Joint Venture Liability shall be resolved in accordance with the
Joint Venture Formation Agreement.
(d) The Contingent Claim Committee’s determination (which shall be made within 30 days of such
referral), if unanimous, shall be binding on the Parties and their respective successors and
assigns. In the event that the Contingent Claim Committee cannot reach a unanimous determination
as to the nature or status of any such Contingent Liabilities or
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Contingent Gains within thirty (30) days after such referral, the issue shall be submitted for
arbitration before a single arbitrator pursuant to the procedures set forth in ARTICLE IX
of this Agreement; provided, however, that no Dispute Notice or executive arbitration procedure as
set forth in Section 9.1 shall be required. The outcome of the arbitration pursuant to
ARTICLE IX shall be final and binding on the Parties and their respective successors and
assigns.
(e) In resolving, with respect to any Action not specifically addressed in this Agreement
(regardless of whether such matters are currently pending but not set forth or are asserted or
filed hereafter), whether:
(i) any Contingent Gain is an Unallocated Asset, an Exclusive Enexus Contingent Gain,
or an Exclusive Entergy Contingent Gain; or
(ii) any Contingent Liability is an Unallocated Liability, an Exclusive Enexus
Contingent Liability, or an Exclusive Entergy Contingent Liability,
the categorization of Contingent Gains and Contingent Liabilities reflected in Schedules
1.1(54), 1.1(57), 1.1(54), 1.1(55), 1.1(64) and 1.1(65)
whereby the Parties have assigned existing claims based on whether the claim or contingent
liability principally relates to the Non-Utility Nuclear Business, the Retained Business, or the
Joint Venture Business shall be considered and used as a precedential guide.
(f) Entergy may, but shall not be obligated to, commence prosecution or defense of such
matters pending decision of the Contingent Claims Committee (or decision of the arbitrator, if
applicable). In the event that Entergy commences any such prosecution or defense and, upon
resolution of the dispute, Enexus is determined hereunder to have the exclusive right or obligation
to such claim or right, Entergy shall, promptly upon the request of Enexus, discontinue the
prosecution or defense of such matter and transfer the control thereof to Enexus. In such event,
Enexus will reimburse Entergy for all costs and expenses (including allocated costs of in-house
counsel and other personnel), reasonably incurred prior to resolution of such dispute in the
prosecution or defense of such claim or right.
(g) At any time or from time to time prior to the Effective Time, the chief legal officer of
Entergy, following consultation with the designated person to be the chief legal officer of Enexus,
may amend or supplement any of Schedules 1.1(54), 1.1(57), 1.1(54),
1.1(55) and 1.1(133)(iii)).
Section 6.5. Certain Case Allocation Matters. The parties agree that if any Action
not listed or described on Schedules 1.1(54), 1.1(57), 1.1(54),
1.1(55) or 1.1(133)(iii) involves separate and distinct claims that, if not joined
in a single Action, would constitute separate Exclusive Contingent Liabilities of different
Parties, they will use their commercially reasonable efforts to segregate such separate and
distinct claims so that the Liabilities associated with each such claim (including all costs and
expenses (including allocated costs of in-house counsel and other personnel)) shall be treated as
Exclusive Contingent Liabilities of the appropriate Party and so that each Party shall have the
rights and obligations with respect to each such claim (including pursuant to ARTICLE VI
hereof) as would have been applicable had such claims been commenced as separate Actions.
Notwithstanding the foregoing provisions, (a) all costs and
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expenses associated with such claims and incurred prior to the separation of the claims shall,
unless otherwise provided in this Agreement, be shared in accordance with their Allocated
Percentages, and (b) this Section 6.5 shall not apply to any separate and distinct claim
that is de minimis or frivolous in nature.
Section 6.6. Cooperation in Defense and Settlement.
(a) Except as provided otherwise in any Common Interest Agreement, with respect to any Third
Party Claim that implicates both Parties in a material fashion due to the allocation of
Liabilities, responsibilities for management of defense and related indemnities pursuant to this
Agreement or any of the Ancillary Agreements, the Parties agree to use commercially reasonable
efforts to cooperate fully and maintain a joint defense (in a manner that will preserve for both
Parties the attorney-client privilege, joint defense or other privilege with respect thereto).
(b) Except as provided otherwise in any Common Interest Agreement, a Party that is not
responsible for the defense or liability of a particular Action shall provide to the other Party
reasonable access to documents, other materials, employees, and shall permit employees, officers
and directors to cooperate as witnesses in the defense of such Action to the extent reasonably
requested and at such other Party’s expense.
(c) Except as provided otherwise in any Common Interest Agreement, each of Entergy and Enexus
agrees that at all times from and after the Effective Time, if an Action currently exists or is
commenced by a third party with respect to which a Party (or any member of such Party’s respective
Group) is a named defendant but such Action is otherwise not a Liability allocated to such named
Party under this Agreement or any Ancillary Agreement, then the other Party shall use commercially
reasonable efforts to cause the named but not liable defendant to be removed from such Action and
such defendants shall not be required to make any payments or contribution in connection therewith
(regardless if such removal is successful or not).
(d) Except as provided otherwise in any Common Interest Agreement, if, in the case of any
Action involving a matter contemplated by Section 6.6(c), there is a conflict of interest
between the Parties, or in the event that any Third Party Claim seeks equitable relief that would
restrict or limit the future conduct of the non-responsible Party or such Party’s business or
operations, such Party shall be entitled to retain, at the responsible Party’s expense, separate
counsel as required by the applicable rules of professional conduct (which counsel shall be
reasonably acceptable to the responsible Party) and to participate in (but not control) the
defense, compromise, or settlement of that portion of the Third Party Claim that seeks equitable
relief with respect to the named Party.
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ARTICLE VII
RELEASES AND INDEMNIFICATION
Section 7.1. Release of Pre-Distribution Claims.
(a) Except (i) as provided in Section 7.1(b), (ii) as may be otherwise provided in any
Ancillary Agreement and (iii) for any matter for which any Party is entitled to indemnification or
contribution pursuant to this ARTICLE VII, each Party, for itself and each member of its
respective Group, their respective Affiliates and all Persons who at any time prior to the
Effective Time were directors, officers, agents or employees of any member of their respective
Group (in their respective capacities as such), in each case, together with their respective heirs,
executors, administrators, successors and assigns, do hereby remise, release and forever discharge
the other Party, the other members of such other Parties’ Group and each member of the Joint
Venture Group, their respective Affiliates and all Persons who at any time prior to the Effective
Time were shareholders, directors, officers, agents or employees of any member of such other
Parties (in their respective capacities as such), in each case, together with their respective
heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever,
whether at Law or in equity (including any right of contribution), whether arising under any
Contract, by operation of Law or otherwise, existing or arising from any acts or events occurring
or failing to occur or alleged to have occurred or to have failed to occur or any conditions
existing or alleged to have existed on or before the Effective Time, including in connection with
all activities to implement the Distribution and any of the other transactions contemplated
hereunder and under any of the Ancillary Agreements. Notwithstanding anything to the contrary in
the foregoing, nothing in this Agreement shall remise, release or discharge any rights or claims
that any Party may have against any shareholder, director, officer, agent or employee of any member
of such other Party’s Group or the Joint Venture Group (in their respective capacities as such) as
a result of any unlawful or fraudulent conduct by such shareholder, director, officer, agent or
employee of any member of such other Party’s Group or the Joint Venture Group.
(b) Nothing contained in Section 7.1(a) shall impair or otherwise affect any right of
any Party, and as applicable, a member of the Party’s Group or the Joint Venture Group to enforce
this Agreement, any Ancillary Agreement or any agreements, arrangements, commitments or
understandings unrelated to the Separation and explicitly contemplated in this Agreement or any
Ancillary Agreement to continue in effect after the Effective Time. In addition, nothing contained
in Section 7.1(a) shall release any Person from:
(i) any Liability assumed, transferred by, or assigned or allocated to, a Party or a
member of such Party’s Group or the Joint Venture Group pursuant to or contemplated by this
Agreement or any Ancillary Agreement including (A) with respect to Entergy, any Retained
Business Liability, (B) with respect to Enexus, any Non-Utility Nuclear Liability and (C)
with respect to the Joint Venture Group, any Joint Venture Liability;
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(ii) any Liability for the sale, lease, construction or receipt of goods, property or
services purchased, obtained or used in the ordinary course of business by a member of one
Group from a member of any other Group prior to the Effective Time;
(iii) any Liability for unpaid amounts for products or services or refunds owing on
products or services due on a cost basis for work done by a member of one Group at the
request or on behalf of a member of any other Group;
(iv) any Liability provided in or resulting from any other Contract or understanding
that is entered into after the Effective Time between any Party (and/or a member of such
Party’s Group), on the one hand, and the other Party or Parties (and/or a member of such
Party’s Group) or a member of the Joint Venture Group, on the other hand;
(v) any Liability with respect to an Unallocated Liability pursuant to ARTICLE
VI; or
(vi) any Liability that the Parties may have with respect to indemnification or
contribution pursuant to this Agreement or an Ancillary Agreement, or otherwise for claims
brought against the Parties or a Joint Venture Group member by a third party that are the
subject of an indemnity under this Agreement or an Ancillary Agreement, which Liability
shall be governed by the provisions of this ARTICLE VII and, if applicable, the
appropriate provisions of the Ancillary Agreement.
In addition, nothing contained in Section 7.1(a) shall release Entergy from indemnifying
any director, officer or employee of Enexus, any Enexus Affiliate, or any member of the Joint
Venture Group who was a director, officer or employee of Entergy or any of its Affiliates on or
prior to the Effective Time, to the extent such director, officer or employee is or becomes a named
defendant in any Action with respect to which he or she was entitled to such indemnification
pursuant to obligations existing prior to the Effective Time, it being understood that if the
underlying obligation giving rise to such Action is (A) a Non-Utility Nuclear Liability, Enexus
shall indemnify Entergy for such Liability (including Entergy’s costs to indemnify the director,
officer or employee) in accordance with the provisions set forth in this ARTICLE VII and
(B) a Joint Venture Liability, EquaGen shall indemnify Entergy for such Liability (including
Entergy’s costs to indemnify the director, officer or employee) in accordance with the provisions
set forth in Article VI of the Joint Venture Formation Agreement.
(c) Each Party shall not, and shall not permit any member of its Group or any of their
respective Affiliates, to make, any claim or demand, or commence any Action asserting any claim or
demand, including any claim of contribution or indemnification, against the other Party or any
member of the other Party’s Group, or any other Person released pursuant to Section 7.1(a),
with respect to any and all Liabilities released pursuant to Section 7.1(a).
(d) It is the intent of each Party, by virtue of the provisions of this Section 7.1,
to provide for a full and complete release and discharge of all Liabilities existing or arising
from all acts and events occurring or failing to occur or alleged to have occurred or to have
failed to occur and all conditions existing or alleged to have existed on or before the Effective
Time,
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whether known or unknown, between or among any Party (and/or a member of such Party’s Group or
any of their respective Affiliates), on the one hand, and the other Party (and/or a member of such
Party’s Group or any of their respective Affiliates) and each member of the Joint Venture Group, on
the other hand (including any contractual agreements or arrangements existing or alleged to exist
between or among any such members on or before the Effective Time), except as specifically set
forth in Section 7.1(a) and 7.1(b).
(e) If any Person associated or affiliated with a Party (including any director, officer or
employee of a Party) initiates an Action with respect to claims released by this Section
7.1, the Party with which such Person is associated or affiliated shall indemnify the other
Party against such Action in accordance with the provisions set forth in this ARTICLE VII.
(f) At any time, at the request of the other Party, each Party shall cause each member of its
respective Group and to the extent practicable each other Person on whose behalf it released
Liabilities pursuant to this Section 7.1 to execute and deliver releases reflecting the
provisions hereof.
Section 7.2. Indemnification by Entergy. Except as otherwise specifically set forth
in any provision of this Agreement or of any Ancillary Agreement, following the Effective Time,
Entergy shall indemnify, defend and hold harmless the Enexus Indemnitees from and against any and
all Indemnifiable Losses arising out of, by reason of or otherwise in connection with (i) the
Retained Business Liabilities (including, as provided in Section 1.1(112)(vii), the
Exclusive Entergy Contingent Liabilities) or the Entergy Percentage of any Unallocated Liabilities,
(ii) (A) the Retained Business Liabilities identified in Section 1.1(112)(iv) and (B) any
misstatement or alleged misstatement of a material fact contained in any document filed with the
Commission by any member of the Enexus Group pursuant to the Securities Act or the Exchange Act, or
any omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading, in each case to the extent, but only to the extent, that those Liabilities are
caused by any such misstatement or omission or alleged misstatement or omission based upon
information that is either furnished to any member of the Enexus Group by any member of the Entergy
Group or incorporated by reference by any member of the Enexus Group from any filings made by any
member of the Entergy Group with the Commission pursuant to the Securities Act or the Exchange Act,
and then only if that statement or omission was made or occurred after the Effective Time, or (iii)
any breach by any member of the Entergy Group of any provision of this Agreement or any Ancillary
Agreement, unless such Ancillary Agreement expressly provides for separate indemnification therein,
in which case any such indemnification claims shall be made thereunder.
Section 7.3. Indemnification by Enexus. Except as otherwise specifically set forth in
any provision of this Agreement or of any Ancillary Agreement, Enexus shall indemnify, defend and
hold harmless the Entergy Indemnitees from and against any and all Indemnifiable Losses arising out
of, by reason of or otherwise in connection with (i) the Non-Utility Nuclear Liabilities
(including, as provided in Section 1.1(93)(vi), the Exclusive Enexus Contingent
Liabilities) or the Enexus Percentage of any Unallocated Liabilities, (ii) (A) the Non-Utility
Nuclear Liabilities identified in Section 1.1(93)(iv) and (B) any misstatement or alleged
misstatement of a material fact contained in any document filed with the Commission by any member
of the Entergy Group,
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as applicable, pursuant to the Securities Act or the Exchange Act, or any omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that those Liabilities are caused by any such
misstatement or omission or alleged misstatement or omission based upon information that is either
furnished to any member of the Entergy Group by any member of the Enexus Group or incorporated by
reference by any member of the Entergy Group from any filings made by any member of the Enexus
Group with the Commission pursuant to the Securities Act or the Exchange Act, and then only if that
statement or omission was made or occurred after the Effective Time, or (iii) any breach by Enexus
or any member of the Enexus Group of any provision of this Agreement or any Ancillary Agreement,
unless such Ancillary Agreement expressly provides for separate indemnification therein, in which
case any such indemnification claims shall be made thereunder.
Section 7.4. Procedures for Indemnification.
(a) An Indemnitee shall give the Indemnifying Party notice of any matter that an Indemnitee
has determined has given or could give rise to a right of indemnification under this Agreement
(other than a Third Party Claim which shall be governed by Section 7.4(b)), within ten (10)
Business Days of such determination, stating the amount of the loss claimed, if known, and method
of computation thereof, and containing a reference to the provisions of this Agreement in respect
of which such right of indemnification is claimed by such Indemnitee or arises; provided,
however, that the failure to provide such notice shall not release the Indemnifying Party
from any of its obligations except and solely to the extent the Indemnifying Party shall have been
materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties
shall not be liable for any expenses incurred during the period in which the Indemnitee failed to
give such notice).
(b) Third Party Claims. If a claim or demand is made against an Entergy Indemnitee or
a Enexus Indemnitee (each, an “Indemnitee”) by any Person who is not a party to this
Agreement or an Affiliate of a Party (a “Third Party Claim”) as to which such Indemnitee is
or may be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the
Party that is or may be required pursuant to this ARTICLE VII or pursuant to any Ancillary
Agreement to make such indemnification (the “Indemnifying Party”) in writing, and in
reasonable detail, of the Third Party Claim promptly (and in any event within fifteen (15) days)
after receipt by such Indemnitee of written notice of the Third Party Claim; provided,
however, that the failure to provide notice of any such Third Party Claim pursuant to this
sentence shall not release the Indemnifying Party from any of its obligations except and solely to
the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure
(except that the Indemnifying Party or Parties shall not be liable for any expenses incurred during
the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall
deliver to the Indemnifying Party, promptly (and in any event within ten (10) Business Days) after
the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnitee relating to the Third Party Claim.
(c) Other than in the case of an Unallocated Liability (the defense of which shall be
controlled as provided for in ARTICLE VI) or any Liability being managed by a Party in
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accordance with any Ancillary Agreement, an Indemnifying Party shall be entitled (but shall
not be required) to assume, control the defense of, and settle any Third Party Claim, at such
Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which
counsel is reasonably acceptable to the applicable Indemnitees, if it gives notice of its intention
to do so to the applicable Indemnitees within thirty (30) days of the receipt of such notice from
such Indemnitees. After notice from an Indemnifying Party to an Indemnitee of its election to
assume the defense of a Third Party Claim, such Indemnitee shall have the right to employ separate
counsel and to participate in (but not control) the defense, compromise, or settlement thereof, at
its own expense and, in any event, shall cooperate with the Indemnifying Party in such defense and
make available to the Indemnifying Party all witnesses, pertinent Information, materials and
information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as
are reasonably required by the Indemnifying Party. In the event of a conflict of interest between
the Indemnifying Party and the applicable Indemnitee(s), or in the event that any Third Party Claim
seeks equitable relief that would restrict or limit the future conduct of an Indemnitee’s business
or operations, such Indemnitee(s) shall be entitled to retain, at the Indemnifying Party’s expense,
separate counsel as required by the applicable rules of professional conduct (which counsel shall
be reasonably acceptable to the Indemnifying Party) and to participate in (but not control) the
defense, compromise, or settlement of that portion of the Third Party Claim that seeks equitable
relief with respect to the Indemnitee(s).
(d) Other than in the case of an Unallocated Liability, if an Indemnifying Party elects not to
assume responsibility for defending a Third Party Claim, or fails to notify an Indemnitee of its
election as provided in Section 7.4(c), such Indemnitee may defend such Third Party Claim
at the cost and expense of the Indemnifying Party. If the Indemnitee is conducting the defense
against any such Third Party Claim, the Indemnifying Party shall cooperate with the Indemnitee in
such defense and make available to the Indemnitee all witnesses, pertinent Information, material
and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control
relating thereto as are reasonably required by the Indemnitee.
(e) Unless the Indemnifying Party has failed to assume the defense of the Third Party Claim in
accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third Party
Claim that is not an Unallocated Liability (which shall be governed by Section 6.4) without
the consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed.
If an Indemnifying Party has failed to assume the defense of the Third Party Claim, it shall not
be a defense to any obligation to pay any amount in respect of such Third Party Claim that the
Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views
or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying
Party does not approve of the quality or manner of the defense thereof or that such Third Party
Claim was incurred by reason of a settlement rather than by a judgment or other determination of
liability.
(f) In the case of a Third Party Claim (except for any Third Party Claim that is an
Unallocated Liability which, with respect to the subject matter of this Section 7.4(f),
shall be governed by Section 6.4), no Indemnifying Party shall consent to entry of any
judgment or enter into any settlement of the Third Party Claim without the consent (not to be
unreasonably withheld) of the Indemnitee if the effect thereof is to permit any injunction,
declaratory judgment,
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other order or other nonmonetary relief to be entered, directly or indirectly, against any
Indemnitee; it being understood that in the case of a Third Party Claim that is an Unallocated
Liability, such matters are addressed in ARTICLE VI.
(g) Except as otherwise provided in Section 11.21, absent fraud or willful misconduct
by an Indemnifying Party, the indemnification provisions of this ARTICLE VII shall be the
sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or losses
resulting from any breach of this Agreement (including with respect to monetary or compensatory
damages or losses arising out of or relating to, as the case may be, any Non-Utility Nuclear
Liability or Retained Business Liability), and each Indemnitee expressly waives and relinquishes
any and all rights, claims or remedies such Person may have with respect to the foregoing other
than under this ARTICLE VII against any Indemnifying Party.
Section 7.5. Indemnification Payments. Indemnification required by this ARTICLE
VII shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or an Indemnifiable Loss or Liability
incurred.
Section 7.6. Contribution.
(a) If the indemnification provided for in Section 7.2(ii) and Section 7.3(ii)
is unavailable to, or insufficient to hold harmless, an Indemnitee under this Agreement or any
Ancillary Agreement in respect of any Liabilities referred to herein or therein, then each
Indemnifying Party shall contribute to the amount paid or payable by such Indemnitee as a result of
such Liabilities in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and the Indemnitee in connection with the actions or omissions that resulted in
Liabilities as well as any other relevant equitable considerations. With respect to the foregoing,
the relative fault of such Indemnifying Party and Indemnitee shall be determined by reference to,
among other things, whether the misstatement or alleged misstatement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by such Indemnifying
Party or Indemnified Party, and the Parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(b) The Parties agree that it would not be just and equitable if contribution pursuant to this
Section 7.6 were determined by a pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in Section 7.6(a).
The amount paid or payable by an Indemnitee as a result of the Liabilities referred to in
Section 7.6(a) shall be deemed to include, subject to the limitations set forth above, any
legal or other fees or expenses reasonably incurred by such Indemnitee in connection with
investigating any claim or defending any Action. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
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Section 7.7. Indemnification Obligations Net of Insurance Proceeds and Other Amounts on a
Net-Tax Basis.
(a) Any Liability subject to indemnification or contribution pursuant to this ARTICLE
VII, including in respect of any Unallocated Liability, will (i) be net of Insurance Proceeds
that actually reduce the amount of the Liability, (ii) be net of any proceeds received by the
Indemnitee from any third party for indemnification for such Liability that actually reduce the
amount of the Liability (“Third Party Proceeds”) and (iii) will be determined on a Net-Tax
Basis. Accordingly, the amount which any Indemnifying Party is required to pay pursuant to this
ARTICLE VII to any Indemnitee pursuant to this ARTICLE VII will be reduced by any
Insurance Proceeds or Third Party Proceeds theretofore actually recovered by or on behalf of the
Indemnitee in respect of the related Liability. If an Indemnitee receives a payment required by
this Agreement from an Indemnifying Party in respect of any Liability (an “Indemnity
Payment”) and subsequently receives Insurance Proceeds or Third Party Proceeds, then the
Indemnitee will pay to the Indemnifying Party an amount equal to the excess of the Indemnity
Payment received over the amount of the Indemnity Payment that would have been due if the Insurance
Proceeds or Third Party Proceeds had been received, realized or recovered before the Indemnity
Payment was made.
(b) An insurer who would otherwise be obligated to pay any claim shall not be relieved of the
responsibility with respect thereto or, solely by virtue of the indemnification and contributions
provisions hereof, have any subrogation rights with respect thereto. The Indemnitee shall use
commercially reasonable efforts to seek to collect or recover any third-party Insurance Proceeds
and any Third Party Proceeds to which the Indemnified Party is entitled in connection with any
Liability for which the Indemnified Party seeks contribution or indemnification pursuant to this
ARTICLE VII; provided, that the Indemnitee’s inability to collect or recover any
such Insurance Proceeds or Third Party Proceeds shall not limit the Indemnifying Party’s
obligations hereunder.
(c) The term “Net-Tax Basis” as used in this ARTICLE VII means that, in determining
the amount of the payment necessary to indemnify any Indemnitee against, or reimburse any
Indemnitee for, Liabilities, the amount of such Liabilities will be determined net of any
theoretical reduction in Tax realizable (assuming a hypothetical effective tax rate of 40%) by the
Indemnitee as the result of sustaining or paying such Liabilities after taking into account any Tax
incurred on the receipt of Insurance Proceeds, and the amount of such Indemnity Payment will be
increased (i.e., “grossed up”) by the amount necessary to satisfy any income or franchise Tax
Liabilities that will be incurred by the Indemnitee as a result of its receipt of, or right to
receive, such Indemnity Payment (as so increased), so that the Indemnitee is put in the same net
after-Tax economic position as if it had not incurred such Liabilities, in each case without taking
into account any impact on the Tax basis that an Indemnitee has in its assets.
Section 7.8. Additional Matters; Survival of Indemnities.
(a) The indemnity and contribution agreements contained in this ARTICLE VII shall
remain operative and in full force and effect, regardless of (i) any investigation made by or on
behalf of any Indemnitee; and (ii) the knowledge by the Indemnitee of Liabilities for which it
might be entitled to indemnification or contribution hereunder.
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(b) The rights and obligations of each Party and their respective Indemnitees under this
ARTICLE VII shall survive the sale or other transfer by any Party or its respective
Subsidiaries of any Assets or businesses or the assignment by it of any and all Liabilities. All
covenants and agreements of the parties survive the Distribution Date and remain in full force and
effect in accordance with their terms.
ARTICLE VIII
CONFIDENTIALITY; ACCESS TO INFORMATION
Section 8.1. Provision of Information. Subject to the restrictions for classified,
privileged or Confidential Information set forth in this Agreement:
(a) From and after the Effective Time, upon the reasonable prior written request by Enexus for
specific and identified Information which relates to (x) Enexus or the conduct of the Non-Utility
Nuclear Business, as the case may be, up to the Effective Time, or (y) subject to Section
8.7, any Ancillary Agreement to which Entergy and Enexus are parties, Entergy shall provide, as
soon as reasonably practicable following the receipt of such request, appropriate copies of such
Information (or the original copies thereof if the Party making the request has a reasonable need
for such originals) in the possession or control of Entergy or any of its Affiliates or
Subsidiaries, but only to the extent such items so relate and are not already in the possession or
control of the requesting Party.
(b) From and after the Effective Time, upon the reasonable prior written request by Entergy
for specific and identified Information which relates to (x) Entergy or the conduct of the Retained
Business up to the Effective Time, or (y) subject to Section 8.7, any Ancillary Agreement
to which Enexus and Entergy are parties, Enexus shall provide, as soon as reasonably practicable
following the receipt of such request, appropriate copies of such Information (or the originals
thereof if the Party making the request has a reasonable need for such originals) in the possession
or control of Enexus or any of its Subsidiaries, but only to the extent such items so relate and
are not already in the possession or control of the requesting Party.
Section 8.2. Access to Personnel and Property. From and after the Effective Time,
each of Entergy and Enexus shall afford to the other and its authorized accountants, counsel and
other designated representatives reasonable access during normal business hours, subject to the
restrictions for classified, privileged or Confidential Information set forth in this Agreement and
to the requirements of any applicable state and/or federal regulation such as a Code of Conduct or
Standard of Conduct, to the personnel, properties, and, in connection with access to such personnel
and properties, Information of such Party and its Subsidiaries insofar as such access is reasonably
required by the other Party, upon the reasonable prior written request by such Party for access to
specific and identified personnel, properties and Information, and only for the duration such
access is required, and relates to (x) such other Party or the conduct of its business prior to the
Effective Time or (y) subject to Section 8.7, any Ancillary Agreement to which each of the
Party requesting such access and the Party requested to grant such access are Parties. Nothing in
this Section 8.2 shall require any Party to violate any agreement with any third party
regarding the confidentiality of confidential and proprietary information relating to that third
party or its business; provided, however, that in the event that it is necessary
for a Party to
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disclose any such third party information, such Party shall obtain such third party’s Consent
prior to the disclosure of such information. Each of Entergy and Enexus shall inform their
respective officers, employees, agents, consultants, advisors, authorized accountants, counsel and
other designated representatives who have or have access to the other Party’s Confidential
Information of their obligation to hold such information confidential to the same extent as is
applicable to the Parties and shall be responsible for any failure by such Persons to comply with
such obligations; provided, however, that the Party providing access to Information
may require that such officers, employees, agents, consultants, advisors, authorized accountants
and other designated representatives execute a confidential non-disclosure agreement agreeing to be
bound by the provisions of this Section 8.2, unless such individual is already subject to a
non-disclosure agreement containing substantially the same terms and conditions as this Section
8.2.
Section 8.3. Witness Services. At all times from and after the Effective Time, each
of Entergy and Enexus shall use its commercially reasonable efforts to make available to the other,
upon reasonable written request, its and its Subsidiaries’ directors, officers, employees and
agents as witnesses to the extent that (i) such Persons may reasonably be required to testify in
connection with the prosecution or defense of any Action in which the requesting Party may from
time to time be involved (except for claims, demands or Actions between members of each Group) and
(ii) there is no conflict in the Action between the requesting Party and the other Party except for
the time and effort required in connection with the services of the officers, directors and
employees and agents of the other Party.
Section 8.4. Confidentiality.
(a) Notwithstanding any termination of this Agreement prior to the Effective Time, for a
period of five (5) years from the Effective Time the Parties shall hold, and shall cause each of
their respective Affiliates to hold, and shall each cause their respective directors, officers,
employees, agents, consultants and advisors to hold, in strict confidence, and not to disclose or
release or use, for any purpose other than as expressly permitted pursuant to this Agreement or the
other Ancillary Agreements, without the prior written consent of the other Party, any and all
Confidential Information concerning the other party and the members of such Party’s Group;
provided, that the Parties may disclose, or may permit disclosure of, Confidential
Information (i) to their respective auditors, attorneys, financial advisors, bankers and other
appropriate consultants and advisors who have a need to know such information for auditing and
other non-commercial purposes and are informed of their obligation to hold such information
confidential to the same extent as is applicable to the Parties and in respect of whose failure to
comply with such obligations, the applicable Party will be responsible, (ii) if the Parties or any
of their respective Affiliates are required or compelled to disclose any such Confidential
Information by judicial or administrative process or by other requirements of Law or stock exchange
rule, (iii) as required in connection with any legal or other proceeding by one Party against any
other Party, or (iv) as necessary in order to permit a Party to prepare and disclose its financial
statements, or other required disclosures; provided, further, that each Party (and
any of their respective Subsidiaries as necessary) may use, or may permit use of, Confidential
Information of the other Party in connection with and solely to the extent necessary for such first
Party performing its obligations, or exercising its rights, under this Agreement or any Ancillary
Agreement. Notwithstanding the foregoing, in the event that any demand or request for disclosure
of Confidential Information is made pursuant to clause (ii) above, each Party, as
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applicable, shall promptly notify the other of the existence of such request or demand and
shall provide the other Party thirty (30) days to seek an appropriate protective order or other
remedy, which such Parties will cooperate in obtaining. In the event that such appropriate
protective order or other remedy is not obtained, the Party whose Confidential Information is
required to be disclosed shall or shall cause the other applicable Party or Parties to furnish, or
cause to be furnished, only that portion of the Confidential Information that is legally required
to be disclosed and shall take commercially reasonable steps to ensure that confidential treatment
is accorded such information.
(b) Notwithstanding anything to the contrary set forth herein, (i) the Parties shall be deemed
to have satisfied their obligations hereunder with respect to Confidential Information if they
exercise the same degree of care (but no less than a reasonable degree of care) as they take to
preserve confidentiality for their own similar information and (ii) confidentiality obligations
provided for in any agreement between each Party or its Subsidiaries and their respective employees
shall remain in full force and effect.
(c) Each Party acknowledges that it and the other members of its Group may have in their
possession confidential or proprietary information of third parties that was received under
confidentiality or non-disclosure agreements or agreements containing confidentiality or
non-disclosure provisions that the other Party or a member of its Group entered into with a third
party prior to the Effective Time. Such Party will hold, and will cause the other members of its
Group and their respective representatives to hold, in strict confidence the confidential and
proprietary information of third parties to which they or any other member of their respective
Groups has had access, in accordance with the terms of such agreements entered into prior to the
Effective Time.
(d) Upon the written request of a Party, the other Party shall promptly, (i) deliver to such
requesting Party all original copies of Confidential Information (whether written or electronic)
concerning such requesting Party and/or its Subsidiaries that is in the possession of the other
Party and is neither required by nor relates to the business or affairs of such other Party, and
(ii) if specifically requested by such requesting Party, destroy any copies of such Confidential
Information (including any extracts there from), unless such delivery or destruction would violate
any Law. Upon the written request of such requesting Party, the other Party shall cause one of its
duly authorized officers to certify in writing to such requesting Party that the requirements of
the preceding sentence have been satisfied in full.
Section 8.5. Privileged Matters.
(a) Pre-Separation Services. The Parties recognize that legal and other professional
services that have been and will be provided prior to the Effective Time have been and will be
rendered for the collective benefit of each of the members of the Entergy Group and the Enexus
Group, and that each of the members of the Entergy Group and the Enexus Group should be deemed to
be the client with respect to such pre-separation services for the purposes of asserting all
privileges which may be asserted under applicable Law.
(b) Post-Separation Services. The Parties recognize that legal and other professional
services will be provided following the Effective Time which will be rendered
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solely for the benefit of Entergy or Enexus, as the case may be. With respect to such
post-separation services, the Parties agrees as follows:
(i) Entergy shall be entitled, in perpetuity, to control the assertion or waiver of all
privileges in connection with privileged information which relates solely to the Retained
Business, whether or not the privileged information is in the possession of or under the
control of Entergy or Enexus. Entergy shall also be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged information that relates
solely to the subject matter of any claims constituting Retained Business Liabilities, now
pending or which may be asserted in the future, in any lawsuits or other proceedings
initiated against or by Entergy, whether or not the privileged information is in the
possession of or under the control of Entergy or Enexus; and
(ii) Enexus shall be entitled, in perpetuity, to control the assertion or waiver of all
privileges in connection with privileged information which relates solely to the Non-Utility
Nuclear Business, whether or not the privileged information is in the possession of or under
the control of Entergy or Enexus. Enexus shall also be entitled, in perpetuity, to control
the assertion or waiver of all privileges in connection with privileged information that
relates solely to the subject matter of any claims constituting Non-Utility Nuclear
Liabilities, now pending or which may be asserted in the future, in any lawsuits or other
proceedings initiated against or by Enexus, whether or not the privileged information is in
the possession of or under the control of Entergy or Enexus.
(c) The Parties agree that they shall have a shared privilege, with equal right to assert or
waive, subject to the restrictions in this Section 8.5, with respect to all privileges not
allocated pursuant to the terms of Section 8.5(b). All privileges relating to any claims,
proceedings, litigation, disputes, or other matters which involve both Entergy and Enexus in
respect of which both Parties retain any responsibility or Liability under this Agreement, shall be
subject to a shared privilege among them.
(d) No Party may waive any privilege which could be asserted under any applicable Law, and in
which any other Party has a shared privilege, without the consent of the other Party, which shall
not be unreasonably withheld or delayed or as provided in subsections (e) or (f) below. Consent
shall be in writing, or shall be deemed to be granted unless written objection is made within
twenty (20) days after notice upon the other Party requesting such consent.
(e) In the event of any litigation or dispute between or among any of the Parties, or any
members of their respective Groups, either such Party may waive a privilege in which the other
Party or member of such Group has a shared privilege, without obtaining the consent of the other
Party; provided, that such waiver of a shared privilege shall be effective only as to the
use of information with respect to the litigation or dispute between the relevant Parties and/or
the applicable members of their respective Group’s, and shall not operate as a waiver of the shared
privilege with respect to third parties.
(f) If a dispute arises between or among the Parties or their respective Subsidiaries
regarding whether a privilege should be waived to protect or advance the interest of
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any Party, each Party agrees that it shall negotiate in good faith, shall endeavor to minimize
any prejudice to the rights of the other Parties, and shall not unreasonably withhold consent to
any request for waiver by another Party. Each Party specifically agrees that it will not withhold
consent to waiver for any purpose except to protect its own legitimate interests.
(g) Upon receipt by any Party or by any Subsidiary thereof of any subpoena, discovery or other
request which arguably calls for the production or disclosure of information subject to a shared
privilege or as to which another Party has the sole right hereunder to assert a privilege, or if
any Party obtains knowledge that any of its or any of its Subsidiaries’ current or former
directors, officers, agents or employees have received any subpoena, discovery or other requests
which arguably calls for the production or disclosure of such privileged information, such Party
shall promptly notify the other Party or Parties of the existence of the request and shall provide
the other Party or Parties a reasonable opportunity to review the information and to assert any
rights it or they may have under this Section 8.5 or otherwise to prevent the production or
disclosure of such privileged information.
(h) The transfer of all Information pursuant to this Agreement is made in reliance on the
agreement of Entergy and Enexus as set forth in Section 8.4 and Section 8.5, to
maintain the confidentiality of privileged information and to assert and maintain all applicable
privileges. The access to information being granted pursuant to Section 6.6, Section
8.1 and Section 8.2 hereof, the agreement to provide witnesses and individuals pursuant
to Section 6.6 and Section 8.3 hereof, the furnishing of notices and documents and
other cooperative efforts contemplated by Section 6.6 and Section 8.5 hereof, and
the transfer of privileged information between and among the Parties and their respective
Subsidiaries pursuant to this Agreement shall not be deemed a waiver of any privilege that has been
or may be asserted under this Agreement or otherwise.
Section 8.6. Ownership of Information. Any Information owned by one Party or any of
its Subsidiaries that is provided to a requesting Party pursuant to this ARTICLE VIII shall
be deemed to remain the property of the providing Party. All such Information provided pursuant to
this ARTICLE VIII is provided on an “AS IS, WHERE IS” basis, without any representation or
warranty whatsoever (including without any representation or warranty as to accuracy, completeness,
noninfringement, merchantability or fitness for any particular purpose). Unless specifically set
forth herein, nothing contained in this Agreement shall be construed as granting or conferring
rights of license or otherwise in any such Information.
Section 8.7. Other Agreements. The rights and obligations granted under this
ARTICLE VIII are subject to any specific limitations, qualifications or additional
provisions on the sharing, exchange or confidential treatment of Information set forth in any
Ancillary Agreement and in any applicable Contracts with third parties, as well as any restrictions
and obligations imposed by Law (including with respect to information privacy rights of
individuals).
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ARTICLE IX
DISPUTE RESOLUTION
Section 9.1. Negotiation.
(a) Except as specifically provided in Section 6.4, in the event of a controversy,
dispute or claim arising out of, in connection with, or in relation to the interpretation,
performance, nonperformance, validity, termination or breach of this Agreement or otherwise arising
out of, or in any way related to this Agreement or the transactions contemplated hereby, including
any claim based on contract, tort, regulation, statute or constitution (but excluding any
controversy, dispute or claim arising out of any Contract relating to the use or lease of real
property if any third party is a necessary party to such controversy, dispute or claim)
(collectively, “Agreement Disputes”), the general counsel or chief legal officer (as
appropriate) of the relevant Parties (or such other executive officer designated by the relevant
Party) shall negotiate for a reasonable period of time to settle such Agreement Dispute;
provided, that (i) such reasonable period shall not, unless otherwise agreed by the
relevant Parties in writing, exceed fifteen (15) days from the time of receipt by a Party of
written notice of such Agreement Dispute (“Dispute Notice”) and (ii) the relevant employees
from both Parties with knowledge and interest in the dispute shall first have tried to resolve the
differences between the Parties. Within twenty-three (23) days of receipt of the Dispute Notice,
the receiving Party shall submit to the other Party a written response. The Dispute Notice and the
response shall each include a statement of the Party’s position, a general summary of the arguments
supporting that position, the name and title of the executive who will represent the party and any
other person(s) who will attend settlement meetings. If the aggregate amount in controversy,
dispute or claim (or any series of related controversies, disputes or claims), as set forth in the
Dispute Notice and the applicable response, is less than $1,000,000, the Parties agree that such
controversy, dispute or claim shall not be submitted to Arbitration pursuant to Section 9.2
and that the Party who shall have submitted the Dispute Notice shall have no further recourse under
this ARTICLE IX or under any applicable Law.
(b) In the event of any Agreement Dispute with respect to which a Dispute Notice has been
delivered in accordance with this Section 9.1, and if arbitration proceedings are initiated
pursuant to Section 9.2 within one-hundred eighty (180) days following receipt of the
Dispute Notice, (i) the relevant Parties shall not assert the defenses of statute of limitations
and laches with respect to the period beginning after the date of receipt of the Dispute Notice,
and (ii) any contractual time period or deadline under this Agreement or any Ancillary Agreement to
which such Agreement Dispute relates occurring after the Dispute Notice is received shall not be
deemed to have passed until such Agreement Dispute has been resolved. Nothing said or disclosed,
nor any document produced, in the course of any negotiations, conferences and discussions in
connection with efforts to settle an Agreement Dispute that is not otherwise independently
discoverable shall be offered or received as evidence or used for impeachment or for any other
purpose in any arbitration, but shall be considered as to have been disclosed for settlement
purposes.
Section 9.2. Arbitration. If the Agreement Dispute has not been resolved for any
reason after fifteen (15) days have elapsed from the receipt by a Party of a Dispute Notice, such
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Agreement Dispute shall be exclusively and finally determined, at the request of any relevant
Party, by arbitration conducted where the Parties agree it would be most convenient, and in the
absence of agreement in Jackson, Mississippi, before and in accordance with the International
Institute for Conflict Prevention & Resolution (“CPR”) Rules for Non-Administered
Arbitration then currently in effect, except as modified herein (the “Rules”).
Section 9.3. Selection of Arbitrator(s). In the event that any Party’s claim or
counterclaims equals or exceed $3 million (except for any claim or counterclaims pursuant to
Section 6.4), exclusive of interest or attorneys’ fees, the Agreement Dispute shall be
heard and determined by three (3) arbitrators; otherwise, the Agreement Dispute shall be heard and
determined by one (1) arbitrator. In the event that one arbitrator shall hear the Agreement
Dispute, the Parties shall attempt to agree upon a qualified individual to serve as arbitrator. If
the Parties are unable to agree on an arbitrator within thirty (30) days of the receipt by
respondent of a copy of the demand for arbitration, then the arbitrator shall be selected and
appointed by the CPR in accordance with the listing and ranking method in the Rules, and in any
such procedure, each party shall be given a limited number of strikes, excluding strikes for cause.
In the event that three arbitrators shall hear the Agreement Dispute, and if there are only two
Parties to the arbitration, each Party shall appoint its arbitrator within twenty (20) days of
receipt by respondent of a copy of the demand for arbitration. The two party-appointed arbitrators
shall have twenty (20) days from the appointment of the second arbitrator to agree on a third
arbitrator who shall chair the arbitral tribunal. Any arbitrator not timely appointed by the
Parties shall be appointed by the CPR in accordance with the listing and ranking method in the
Rules, and in any such procedure, each party shall be given a limited number of strikes, excluding
strikes for cause. If any appointed arbitrator declines, resigns, becomes incapacitated, or
otherwise refuses or fails to serve or to continue to serve as an arbitrator, the Party or
arbitrators entitled to appoint such arbitrator shall promptly appoint a successor. In the event
that an arbitrator is objected to, CPR shall decide whether such objection is valid and whether the
challenged arbitrator shall be removed. Any controversy concerning the jurisdiction of the
arbitrator(s), whether an Agreement Dispute is arbitrable, whether arbitration has been waived,
whether an assignee of this Agreement is bound to arbitrate, or as to the interpretation of
enforceability of this ARTICLE IX shall be determined by the arbitrator(s).
Section 9.4. Arbitration Procedures. The arbitrator(s) shall attempt to resolve the
disputed based on pleadings, sworn statements and other written materials without the need for live
hearings. In the event the arbitrator(s) determine that oral argument is beneficial to the
arbitrator(s) understanding of the issues, oral argument may be conducted. In the event the
arbitrator(s) determine that live hearings are necessary for the proper resolution of the dispute,
a hearing shall be conducted. Any oral argument to be conducted shall be held no later than
one-hundred fifty (150) days following appointment of the arbitrator(s). Any hearing to be
conducted shall be held no later than one-hundred eighty (180) days following appointment of the
arbitrator(s).
Section 9.5. Discovery. The arbitrator(s), consistent with the expedited nature of
arbitration, shall permit discovery only if there is clear and convincing evidence that discovery
is necessary. If the arbitrator(s) so determine, they may permit limited document discovery and no
more than three depositions per party of no more than 8 hours each. Notwithstanding the
foregoing, each Party will, upon the written request of the other Party, promptly provide the
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other with copies of documents on which the producing Party may rely in support of a claim or
defense or which are relevant to the issues raised in the Agreement Dispute. All discovery, if
any, shall be completed within ninety (90) days following the appointment of the arbitrator(s).
Adherence to formal rules of evidence shall not be required and the arbitrator(s) shall consider
any evidence and testimony that the arbitrator(s) determine to be relevant, in accordance with the
Rules and procedures that the arbitrator(s) determine to be appropriate. In resolving any
Agreement Dispute, the Parties intend that the arbitrator(s) shall apply the substantive Laws of
the State of
Delaware, without regard to any choice of law principles thereof that would mandate
the application of the laws of another jurisdiction. The Parties intend that the provisions to
arbitrate set forth herein be valid, enforceable and irrevocable, and any award rendered by the
arbitrator(s) shall be final and binding on the Parties. The Parties agree to comply and cause the
members of their applicable Group to comply with any award made in any such arbitration proceedings
and agree to enforcement of or entry of judgment upon such award, in any court of competent
jurisdiction.
Section 9.6. Confidentiality of Proceedings. Without limiting the provisions of the
Rules, unless otherwise agreed in writing by or among the relevant Parties or permitted by this
Agreement, the relevant Parties shall keep, and shall cause the members of their applicable Group
to keep, confidential all matters relating to the arbitration or the award. All negotiations,
conferences and discussions pursuant to this ARTICLE IX shall be treated as compromise and
settlement negotiations; provided, that such matters may be disclosed (i) to the extent reasonably
necessary in any proceeding brought to enforce this agreement to arbitrate or any arbitral award or
for entry of a judgment upon the award and (ii) to the extent otherwise required by Law or
regulatory authority.
Section 9.7. Pre-Hearing Procedure and Disposition. Nothing contained herein is
intended to or shall be construed to prevent any Party, from applying to any court of competent
jurisdiction for interim measures or other provisional relief in connection with the subject matter
of any Agreement Disputes, including to compel a party to arbitrate any Agreement Dispute or to
require witnesses to obey subpoenas issued by the arbitrator(s). Without prejudice to such
provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal
shall have full authority to grant provisional remedies and to direct the parties to request that
any court modify or vacate any temporary or preliminary relief issued by such court, and to award
damages for the failure of any party to respect the arbitral tribunal’s orders to that effect. The
Parties agree to accept and honor any orders relating to interim or provisional remedies that are
issued by the arbitrator(s) and agree that any such interim order or remedy may be enforced, as
necessary, in any court of competent jurisdiction.
Section 9.8. Continuity of Service and Performance. During the course of dispute
resolution pursuant to the provisions of this ARTICLE IX, the Parties will continue to
provide all other services and honor all other commitments under this Agreement and each Ancillary
Agreement with respect to all matters not subject to such dispute resolution.
Section 9.9. Awards. The arbitrator(s) shall make an award and issue a reasoned
opinion in writing setting forth the basis for such award within thirty (30) days following the
submission of all written materials in support of and in opposition to any claim, or if there is a
hearing, within thirty (30) days of such hearing. The arbitrator(s) shall be entitled, if
appropriate,
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to award any remedy in such proceedings that is permitted under this Agreement and applicable
law, including monetary damages, specific performance and other forms of legal and equitable
relief. The Parties hereby waive any claim to exemplary, punitive, multiple or similar damages in
excess of compensatory damages, attorneys’ fees, costs and expenses of arbitration, except as may
be expressly required by statute or as necessary to indemnify a Party for a Third Party Claim and
the arbitrator(s) are not empowered to and shall not award such damages. Any final award must
provide that the party against whom an award is issued shall comply with the order within a
specified period of time, not to exceed thirty (30)days.
Section 9.10. Costs. If any Party attempts, unsuccessfully, to prevent an Arbitration
Dispute from being arbitrated such Party shall reimburse the prevailing party for all costs
incurred in compelling arbitration. Except as otherwise may be provided in this Agreement or in
any Ancillary Agreement, the arbitrator(s) may apportion the costs of arbitration between or among
the Parties in such a manner as the arbitrator deem reasonable, taking into account the facts and
circumstances of the case.
Section 9.11. Adherence to Time Limits. In accepting appointment, an arbitrator shall
commit that his or her schedule permits him or her to devote the reasonably necessary time and
attention to the arbitration proceedings and to resolving the Agreement Dispute within the time
periods set by this Agreement and by the Rules. Any time limits set out in this ARTICLE IX
or in the Rules may be modified upon written agreement of the parties and the arbitrator(s) or by
order of the arbitrator(s) for good cause shown. Any failure of the arbitrator(s) to comply with
such time limits or to render a final award within the time specified shall not impair the validity
of the award or cause the award to be void or voidable, nor shall it be a basis for challenge of
the validity or enforceability of the award or of the arbitration proceedings.
Section 9.12. Limitation on Actions. Notwithstanding anything to the contrary in this
Agreement, (a) no Action shall be commenced (including the dispute resolution procedures set forth
in this ARTICLE IX) by an Indemnitee against an Indemnifying Party or any of their respective
Affiliates more than 12 months after the Indemnitee acquires, or reasonably should have acquired,
knowledge of the facts giving rise to its right to indemnification under ARTICLE VII (it
being understood that if no such Action is commenced within such 12-month period, the Indemnifying
Party shall be discharged from liability for such claim); and (b) no Action shall be commenced
(including the dispute resolution procedures set forth in this ARTICLE IX) by a Party
against the other Party asserting any claim arising from breach of any obligation of such other
Party under this Agreement more than 12 months after such first Party acquires, or reasonably
should have acquired, knowledge of such breach, provided, however, regardless of such first Party’s
knowledge of the facts giving rise to its claim based on a breach of this Agreement, no Action
shall be commenced by such first Party against the other Party more than 36 months after the
occurrence of the initial event giving rise to such claim for such breach (it being understood that
if no such Action is commenced within such 12-month or 36-month periods, as applicable, the
breaching Party shall be discharged from liability for such breach).
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ARTICLE X
INSURANCE
Policies and Allocation of Related Rights.
(a) The Non-Utility Nuclear Assets shall include any and all rights of an insured Person under
each Non-Utility Nuclear Policy and each Shared Policy to the extent related to the Non-Utility
Nuclear Business.
(b) The Retained Business Assets shall include any and all rights of an insured Person under
each Retained Business Policy and each Shared Policy to the extent related to the Retained
Business.
Section 10.1. Shared Policies.
(a) If an occurrence for which coverage is available under a Shared Policy happens prior to
the Effective Time, and a claim arising therefrom has been or is eventually asserted against Enexus
or any other member of the Enexus Group and such claim is reported by Enexus to Entergy prior to
the Effective Time, then Entergy will, or will cause the applicable insurance company or members of
the Entergy Group that are insured thereunder to (i) continue to provide Enexus and any other
member of the Enexus Group with access to and coverage under the applicable Shared Policies, and
(ii) reasonably cooperate with Enexus and take commercially reasonable actions as may be necessary
or advisable to assist Enexus in submitting such claims under the applicable Shared Policy,
provided that Enexus shall be responsible for its portion of any deductibles or co-payments
legally due and owing relating to such claims.
Section 10.2. Administration of Shared Policies; Other Matters.
(a) From and after the Effective Time, (i) Enexus or a member of the Enexus Group shall be
responsible for the administration of all Non-Utility Nuclear Policies, and (ii) Entergy or a
member of the Entergy Group shall be responsible for the administration of all Retained Business
Policies.
(b) With respect to all Shared Policies, from and after the Effective Time, Entergy or a
member of the Entergy Group shall be responsible for the Insurance Administration and Claims
Administration of such Shared Policies, provided that the retention of such administrative
responsibilities by Entergy or a member of the Entergy Group shall not relieve the Person
submitting any Insured Claim of the primary responsibility for reporting such Insured Claim
accurately. At its discretion, and in accordance with the terms of the Shared Policies, Entergy
may discharge its administrative responsibilities with respect to such Shared Policies by
contracting for the provision of administrative services to any Person. Enexus shall reimburse
Entergy for any costs incurred by Entergy related to such Insurance Administration and Claims
Administration to the extent such costs (which include defense, out-of-pocket expenses, and direct
and indirect costs of employees or agents of Entergy providing the administrative services) are (i)
not covered under the Shared Policies and (ii) related to Non-Utility Nuclear Liabilities or
Enexus’s proportionate share of the Unallocated Liabilities. Entergy or any member of the Entergy
Group shall not settle any Insured Claim of Enexus or any member of Enexus Group
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under the Shared Policies without first obtaining the approval of Enexus or such member of
Enexus Group. Such approval shall not be unreasonably withheld, delayed or conditioned.
(c) Exceeding Policy Limits. Where Non-Utility Nuclear Liabilities are covered under
a Shared Policy for periods prior to the Effective Time, or where such Shared Policy covers claims
made after the Effective Time with respect to an occurrence prior to the Effective Time, then from
and after the Effective Time, Enexus may claim coverage and receive Insurance Proceeds for Insured
Claims under such Shared Policy as and to the extent that such insurance is available up to the
full extent of the applicable limits of liability of such Shared Policy.
(d) Claims Not Reimbursed. Entergy and Enexus shall not be liable to one another (nor
shall any member of the Entergy Group be liable to any member of the Enexus Group) for claims, or
portions of claims, not reimbursed by insurers under any Shared Policy for any reason not within
the control of Entergy or Enexus.
(e) Allocation of Insurance Proceeds. Insurance Proceeds received with respect to
claims, costs and expenses under the Shared Policies shall be paid to Entergy, which shall
administer the Shared Policies by retaining the Insurance Proceeds with respect to Retained
Business Liabilities and giving to Enexus any Insurance Proceeds with respect to Non-Utility
Nuclear Liabilities. In the event that the aggregate limits on any Shared Policies are exceeded by
the aggregate of outstanding Insured Claims by the Parties or members of their respective Groups,
the Parties agree to allocate the Insurance Proceeds received thereunder based upon their
respective percentage of the total of their bona fide claims which were covered under such Shared
Policy, and any Party who has received Insurance Proceeds in excess of such Party’s respective
percentage of Insurance Proceeds shall pay to the other Party the appropriate amount so that each
Party will have received its respective percentage of Insurance Proceeds pursuant hereto. Each of
the Parties agrees to use commercially reasonable efforts to maximize available coverage under
those Shared Policies applicable to it, and to take commercially reasonable steps to recover from
all other responsible parties in respect of an Insured Claim to the extent coverage limits under a
Shared Policy have been exceeded or would be exceeded as a result of such Insured Claim.
(f) Allocation of Deductibles. In the event that the Parties or members of their
respective Groups have bona fide claims under any Shared Policy arising from the same occurrence
and for which a deductible is payable, the Parties agree that the aggregate amount of the
deductible paid shall be borne by the Parties in the same proportion which the Insurance Proceeds
received by each such Party bears to the total Insurance Proceeds received under the applicable
Shared Policy.
Section 10.3. Agreement for Waiver of Conflict and Shared Defense. In the event that
Insured Claims of more than one of the Parties exist relating to the same occurrence, the Parties
shall jointly defend and waive any conflict of interest necessary to the conduct of the joint
defense. Nothing in this ARTICLE X shall be construed to limit or otherwise alter in any
way the obligations of the Parties, including those created by this Agreement, by operation of Law
or otherwise.
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Section 10.4. Cooperation. The Parties agree to use (and cause the members in their
respective Groups to use) their commercially reasonable efforts to cooperate with respect to the
various insurance matters contemplated by this ARTICLE X.
Section 10.5. Miscellaneous.
From and after the Effective Time, Enexus and Entergy shall be responsible for obtaining and
maintaining their respective insurance programs for their respective risks of loss and such
insurance arrangements shall be separate programs apart from each other; and Enexus and Entergy
will be responsible for their own respective premiums, deductibles, retentions and assessments for
such insurance programs.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Complete Agreement; Construction. This Agreement, including the
Exhibits and Schedules, and the Ancillary Agreements shall constitute the entire agreement between
the Parties with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter. In the event of any
conflict between the terms and conditions of the body of this Agreement and the terms and
conditions of any Schedule, the terms and conditions of such Schedule shall control. In the event
of any conflict between the terms and conditions of this Agreement and the terms and conditions of
any Ancillary Agreement, the terms and conditions of such Ancillary Agreement shall control.
Section 11.2. Ancillary Agreements. This Agreement is not intended to address, and
should not be interpreted to address, the matters specifically and expressly covered by the
Ancillary Agreements.
Section 11.3. Counterparts. This Agreement may be executed in more than one
counterparts, all of which shall be considered one and the same agreement, and, except as otherwise
expressly provided in Section 1.3, shall become effective when one or more such
counterparts have been signed by each of the Parties and delivered to the other Parties. Execution
of this Agreement or any other documents pursuant to this Agreement by facsimile or other
electronic copy of a signature shall be deemed to be, and shall have the same effect as, executed
by an original signature.
Section 11.4. Survival of Agreements. Except as otherwise contemplated by this
Agreement or any Ancillary Agreement, all covenants and agreements of the Parties contained in this
Agreement and each Ancillary Agreement shall survive the Effective Time and remain in full force
and effect in accordance with their applicable terms.
Section 11.5. Expenses.
(a) Except as otherwise expressly provided (i) in this Agreement (including paragraphs (b),
(c), and (d) of this Section 11.5) or (ii) the Ancillary Agreements, the Parties agree that
all out-of-pocket fees and expenses (including the costs to obtain or economic effect of any
Consents) incurred and directly related to the transactions contemplated hereby, including
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any Liability incurred following the Separation as a result of the consummation of the
Separation, shall be borne and paid by the Person incurring such cost or Liability.
(b) Each of Entergy and Enexus shall be responsible for payment of their respective outside
advisors for all work performed, whether in connection with the Separation or otherwise, prior to,
on or after the Effective Time, provided, however, that Entergy shall pay all fees
earned, and all costs and expenses incurred, prior to the Effective Time directly related to the
Separation by the entities listed or described on Schedule 11.5(b) and payable to such
entities.
(c) With respect to any expenses incurred pursuant to a request for further assurances granted
under Section 2.9, the Parties agree that such expenses incurred prior to and up to the
date the date that is six (6) months after the Effective Time shall be borne and paid by the Party
incurring such expense in complying with such request; it being understood that no Party shall be
obliged to incur any third-party accounting, consulting, advisor, banking or legal fees, costs or
expenses, and the requesting Party shall not be obligated to pay such fees, costs or expenses,
unless such fee, cost or expense shall have had the prior written approval of the requesting Party.
Notwithstanding the foregoing, following the six (6) month anniversary of the Effective Time, the
requesting Party shall be responsible for the other Party’s internal fees, costs and expenses
(e.g., salaries of personnel) incurred.
(d) With respect to the financing transactions described in Section 3.5, Enexus shall
be responsible for payment of all fees earned, and all costs and expenses incurred, including
outside advisors, in connection therewith.
Section 11.6. Notices. All notices, requests, claims, demands and other
communications under this Agreement and, to the extent applicable and unless otherwise provided
therein, under each of the Ancillary Agreements, as between the Parties, shall be in writing and
shall be given or made (and shall be deemed to have been duly given or made upon receipt unless the
day of receipt is not a Business Day, in which case it shall be deemed to have been duly given or
made on the next Business Day) by delivery in person, by overnight courier service, by facsimile
with receipt confirmed (followed by delivery of an original via overnight courier service) or by
registered or certified mail (postage prepaid, return receipt requested) to the respective Parties
at the following addresses (or at such other address for a Party as shall be specified in a notice
given in accordance with this Section 11.6):
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To Entergy:
Entergy Corporation
Attn: Chief Legal Officer
Facsimile:
To Enexus:
Attn: General Counsel
Facsimile:
Section 11.7. Waivers. The failure of any Party to require strict performance by any
other Party of any provision in this Agreement will not waive or diminish that Party’s right to
demand strict performance thereafter of that or any other provision hereof.
Section 11.8. Amendments. Subject to the terms of Section 11.11, this
Agreement may not be modified or amended except by an agreement in writing signed by each of the
Parties.
Section 11.9. Assignment. Except as otherwise expressly provided for in this
Agreement, this Agreement shall not be assignable, in whole or in part, by any Party without the
prior written consent of the other Party, and any attempt to assign any rights or obligations
arising under this Agreement without such consent shall be null and void; provided, that a
Party may assign this Agreement in connection with a merger transaction in which such Party is not
the surviving entity or the sale by such Party of all or substantially all of its Assets, and upon
the effectiveness of such assignment the assigning Party shall be released from all of its
obligations under this Agreement if the surviving entity of such merger or the transferee of such
Assets shall agree in writing, in form and substance reasonably satisfactory to the other Party, to
be bound by the terms of this Agreement as if named as a “Party” hereto.
Section 11.10. Successors and Assigns. Subject to Section 11.9, the
provisions of this Agreement and the obligations and rights hereunder shall be binding upon, inure
to the benefit of and be enforceable by (and against) the Parties and their respective successors
and permitted transferees and assigns.
Section 11.11. Termination, Etc. Notwithstanding anything to the contrary herein,
this Agreement (including ARTICLE VII (Indemnification) hereof) may be terminated and
abandoned at any time prior to the Effective Time by and in the sole discretion of Entergy without
the approval of Enexus or the stockholders of Entergy. In the event of such termination, no Party
shall have any Liability to any other Party or any other Person. After the Effective Time, this
Agreement may not be terminated except by an agreement in writing signed by each of the Parties.
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Section 11.12. Payment Terms.
(a) Except as expressly provided to the contrary in this Agreement or in any Ancillary
Agreement, any amount to be paid or reimbursed by any Party (and/or a member of such Party’s
Group), on the one hand, to any other Party (and/or a member of such Party’s Group), on the other
hand, under this Agreement shall be paid or reimbursed hereunder within forty-five (45) days after
presentation of an invoice or a written demand therefor and setting forth, or accompanied by,
reasonable documentation or other reasonable explanation supporting such amount.
(b) Except as expressly provided to the contrary in this Agreement or in any Ancillary
Agreement, any amount not paid when due pursuant to this Agreement shall bear interest at a rate
per annum equal to the then effective Prime Rate plus 2% (or the maximum legal rate, whichever is
lower), calculated for the actual number of days elapsed, accrued from the date on which such
payment was due up to the date of the actual receipt of payment.
Section 11.13. No Circumvention. The Parties agree not to directly or indirectly take
any actions, act in concert with any Person who takes an action, or cause or allow any member of
any such Party’s Group to take any actions (including the failure to take a reasonable action) such
that the resulting effect is to materially undermine the effectiveness of any of the provisions of
this Agreement or any Ancillary Agreement (including adversely affecting the rights or ability of
any Party to successfully pursue indemnification, contribution or payment pursuant to ARTICLE
VI and ARTICLE VII).
Section 11.14. Subsidiaries. Each of the Parties shall cause to be performed all
actions, agreements and obligations set forth herein to be performed by any Subsidiary or Affiliate
of such Party or by any entity that becomes a Subsidiary or Affiliate of such Party on and after
the Effective Time. The Parties acknowledge that certain actions, agreements and obligations that
certain of their Affiliates and Subsidiaries may be required to perform in connection with the
performance of the Parties obligations under this Agreement or any Ancillary Agreement may require
Governmental Approval by Governmental Entities under applicable Law, and therefore agree that
performance of such actions, agreements and obligations is subject to the receipt of all such
necessary Governmental Approvals, which approvals each Party shall, and shall cause the members of
its respective Group to, use its commercially reasonable efforts to obtain.
Section 11.15. Third Party Beneficiaries. Except as provided in ARTICLE VII
relating to Indemnitees and for the release under Section 7.1 of any Person provided
therein and except as specifically provided in any Ancillary Agreement, this Agreement is solely
for the benefit of the Parties and should not be deemed to confer upon third parties any remedy,
claim, liability, reimbursement, cause of action or other right in excess of those existing without
reference to this Agreement.
Section 11.16. Title and Headings. Titles and headings to Sections and Articles are
inserted for the convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
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Section 11.17. Exhibits and Schedules. The Exhibits and Schedules attached hereto are
incorporated herein by reference and shall be construed with and as an integral part of this
Agreement to the same extent as if the same had been set forth verbatim herein.
Section 11.18. Closing. The closing and consummation of the transactions contemplated
by this Agreement to occur prior to or at the Distribution shall take place at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 0000 Xxx Xxxx Xxxxxx XX, Xxxxxxxxxx, XX.
Section 11.19.
Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of
Delaware, without giving effect to any conflict or choice
of law provision that would result in the imposition of another jurisdiction’s Law.
Section 11.20.
Consent to Jurisdiction. Subject to the provisions of
ARTICLE
IX, each of the Parties irrevocably submits to the exclusive jurisdiction of any federal court
sitting in New Castle County,
Delaware (and of the appropriate appellate courts there from) (the
“
Delaware Courts”), for the purposes of any suit, action or other proceeding to compel
arbitration or for provisional relief in aid of arbitration in accordance with
ARTICLE IX
or for provisional relief to prevent irreparable harm, and to the non-exclusive jurisdiction of the
Delaware Courts for the enforcement of any award issued thereunder. Each of the Parties further
agrees that service of any process, summons, notice or document by United States registered mail to
such Party’s respective address set forth in
Section 11.6 shall be effective service of
process for any action, suit or proceeding in the Delaware Courts with respect to any matters to
which it has submitted to jurisdiction in this
Section 11.20. Each of the Parties
irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or
proceeding arising out of this Agreement or the transactions contemplated hereby in the Delaware
Courts, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such court has been
brought in an inconvenient forum.
Section 11.21. Specific Performance. The Parties agree that irreparable damage would
occur in the event that the provisions of this Agreement were not performed in accordance with
their specific terms. Accordingly, it is hereby agreed that the Parties shall be entitled to (i)
an injunction or injunctions to enforce specifically the terms and provisions hereof in any
arbitration in accordance with ARTICLE IX, (ii) provisional or temporary injunctive relief
in accordance therewith in any Delaware Court, and (iii) enforcement of any such award of an
arbitral tribunal or a Delaware Court in any court of the United States, or any other any court or
tribunal sitting in any state of the United States or in any foreign country that has jurisdiction,
this being in addition to any other remedy or relief to which they may be entitled.
Section 11.22. Waiver of Jury Trial. SUBJECT TO ARTICLE IX AND SECTIONS
11.20 AND 11.21 HEREIN, EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY COURT
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF AND PERMITTED UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HEREBY (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS
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REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.22.
Section 11.23. Severability. In the event any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall not in any way be
affected or impaired thereby, and the Parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of
which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
Section 11.24. Force Majeure. No Party (or any Person acting on its behalf) shall
have any liability or responsibility for failure to fulfill any obligation (other than a payment
obligation) under this Agreement or, unless otherwise expressly provided therein, any Ancillary
Agreement, so long as and to the extent to which the fulfillment of such obligation is prevented,
frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. A Party
claiming the benefit of this provision shall, as soon as reasonably practicable after the
occurrence of any such event: (a) notify the other Party of the nature and extent of any such Force
Majeure condition, and (b) use due diligence to remove any such causes and resume performance under
this Agreement as soon as reasonably practicable.
Section 11.25. Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party drafting or causing
any instrument to be drafted.
Section 11.26. Authorization. Each of the Parties hereby represents and warrants that
it has the power and authority to execute, deliver and perform this Agreement, that this Agreement
has been duly authorized by all necessary corporate action on the part of such Party, that this
Agreement constitutes a legal, valid and binding obligation of each such Party and that the
execution, delivery and performance of this Agreement by such Party does not contravene or conflict
with any provision of law or of its charter or bylaws or any material agreement, instrument or
order binding on such Party.
[Signature Page Follows]
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