Document:

exv10w5

Exhibit 10.5

FORM OF LIMITED LIABILITY COMPANY AGREEMENT

of

EQUAGEN LLC

Dated as of                     

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	I. DEFINED TERMS
	 	 	3	 
	1.01 Defined Terms
	 	 	3	 
	1.02 Other Defined Terms and References
	 	 	3	 
	II. ORGANIZATION
	 	 	4	 
	2.01 Formation
	 	 	4	 
	2.02 Name of Company
	 	 	4	 
	2.03 Principal Place of Business
	 	 	4	 
	2.04 Term
	 	 	4	 
	2.05 Registered Agent and Registered Office
	 	 	4	 
	2.06 Purpose 
	 	 	4	 
	2.07 Organizational Matters
	 	 	5	 
	2.08 Third Party Business
	 	 	5	 
	2.09 ENOI LLC Labor Matters
	 	 	6	 
	III. MEMBERS
	 	 	6	 
	3.01 Admission of Members 
	 	 	6	 
	3.02 Membership Interests
	 	 	7	 
	3.03 Limitation of Liability 
	 	 	7	 
	3.04 Term
	 	 	7	 
	IV. CAPITAL
	 	 	8	 
	4.01 Capital Contributions
	 	 	8	 
	4.02 Failure to Make Capital Contributions 
	 	 	8	 
	4.03 Negative Capital Account Balance
	 	 	9	 
	V. INTERESTS IN THE COMPANY
	 	 	10	 
	5.01 Member Percentages
	 	 	10	 
	5.02 Return of Capital
	 	 	10	 
	5.03 Ownership
	 	 	10	 
	5.04 Waiver of Partition
	 	 	10	 
	VI. ALLOCATIONS AND DISTRIBUTIONS
	 	 	11	 
	6.01 Allocations
	 	 	11	 
	6.02 Distributions 
	 	 	11	 
	6.03 Distributions in Liquidation
	 	 	12	 
	6.04 Restrictions on Distributions
	 	 	12	 
	6.05 Deemed Distributions
	 	 	12	 
	VII. MANAGEMENT
	 	 	12	 
	7.01 Management 
	 	 	12	 
	7.02 Members of the Board 
	 	 	13	 
	7.03 Significant Matters
	 	 	17	 
	7.04 Member Matters
	 	 	18	 
	7.05 Duties and Conflicts 
	 	 	18	 
	7.06 Competition
	 	 	19	 
	7.07 Company Expenses
	 	 	20	 

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	 	 	Page	 
	7.08 Contracts with Affiliates
	 	 	20	 
	7.09 Business Development Services Contracts
	 	 	20	 
	7.10 Deadlock Matters 
	 	 	21	 
	VIII. BOOKS AND RECORDS
	 	 	22	 
	8.01 Books and Records
	 	 	22	 
	8.02 Accounting and Fiscal Year
	 	 	23	 
	8.03 Reports
	 	 	23	 
	8.04 Tax Returns and Reports
	 	 	24	 
	8.05 State and Local Tax
	 	 	25	 
	8.06 Accounting Policies and Company Accountant
	 	 	25	 
	8.07 The Budget and Business Plan
	 	 	25	 
	IX. TRANSFER OF INTERESTS
	 	 	26	 
	9.01 No Transfer 
	 	 	26	 
	9.02 Transfer to Member Group Members 
	 	 	26	 
	9.03 Transferees 
	 	 	27	 
	9.04 Admission of Additional Members 
	 	 	28	 
	9.05 Change in Control
	 	 	28	 
	9.06 Put Rights upon an Exercise Event 
	 	 	29	 
	X. EXCULPATION AND INDEMNIFICATION
	 	 	32	 
	10.01 Exculpation
	 	 	32	 
	10.02 Indemnification 
	 	 	32	 
	XI. DISSOLUTION AND TERMINATION
	 	 	34	 
	11.01 Dissolution
	 	 	34	 
	11.02 Termination
	 	 	35	 
	11.03 Member’s Operations
	 	 	36	 
	11.04 Liquidating Member
	 	 	36	 
	XII. MISCELLANEOUS
	 	 	36	 
	12.01 Covenants, Representations and Warranties of the Members
	 	 	36	 
	12.02 Further Assurances
	 	 	37	 
	12.03 Notices
	 	 	37	 
	12.04 Governing Law
	 	 	38	 
	12.05 Attorney Fees
	 	 	38	 
	12.06 Titles and Headings
	 	 	39	 
	12.07 Exhibits and Schedules
	 	 	39	 
	12.08 Successors and Assigns
	 	 	39	 
	12.09 Extension Not a Waiver
	 	 	39	 
	12.10 Creditors Not Benefited
	 	 	39	 
	12.11 Recalculation of Interest
	 	 	39	 
	12.12 Severability
	 	 	40	 
	12.13 Complete Agreement
	 	 	40	 
	12.14 Amendments and Consents
	 	 	40	 
	12.15 Confidentiality 
	 	 	40	 
	12.16 Venue
	 	 	42	 
	12.17 WAIVER OF JURY TRIAL
	 	 	42	 
	12.18 Member Group Actions; Joint Liability
	 	 	43	 

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	 	 	Page	 
	12.19 Extension for Non-Business Days
	 	 	43	 
	12.20 Limitation on Damages
	 	 	43	 
	12.21 Counterparts
	 	 	43	 
	12.22 Effectiveness
	 	 	43	 
	12.23 No Third Party Beneficiaries
	 	 	43	 
	12.24 Specific Performance
	 	 	44	 
	12.25 Enforceability of Power of Attorney
	 	 	44	 

iv

 

LIMITED LIABILITY COMPANY AGREEMENT

OF

EQUAGEN LLC

     This LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of EquaGen LLC (the
“Company”), a Delaware limited liability company, is made and entered into as of
                                        , by and among (i) Entergy Corporation, a Delaware corporation (“ETR”),
(ii) Enexus Energy Corporation (“Enexus”), a Delaware limited liability company (“Enexus”),
as Members of the Company (“Members”) and (iii) the Company.

R E C I T A L S

     WHEREAS, in connection with the contemplated separation and distribution transactions set
forth in the Separation and Distribution Agreement (the “Separation Agreement”) dated
                                         by and among ETR and Enexus pursuant to which ETR will be separated into
two separate, independent and publicly traded companies, with Enexus operating the Non-Utility
Nuclear Business and ETR operating the Retained Business (the “Separation and
Distribution”), the Board of Directors of ETR and the Board of Directors of Enexus have
determined to establish and operate the Joint Venture through the Company;

     WHEREAS, in connection with the establishment of the Joint Venture and the Separation and
Distribution, an internal corporate re-organization occurred, as set forth in the Separation
Agreement;

     WHEREAS, in connection with the internal corporate re-organization: (a) the Company was
incorporated as a Delaware limited liability company pursuant to the Delaware Act (as hereinafter
defined) pursuant to a certificate of formation
(“Certificate of Formation”) filed with the
Delaware Secretary of State on June 27, 2008, (b) Entergy Nuclear Holding Company #2, a wholly
owned subsidiary of ETR, entered into a Limited Liability Company Agreement for the Company (the
“Original LLC Agreement”) dated as of June 27, 2008, (c) Entergy Nuclear, Inc.
(“ENI”), a Delaware corporation, merged with and into the Company pursuant to the Delaware
Act, with the Company being the surviving entity, evidenced by the certificate of merger
(“Certificate of Merger”) filed with the Delaware Secretary of State on                                         ,
(d) Entergy Nuclear Holding Company #2 contributed all of its membership interests in the Company
to ETR, and (e) upon the formation of the Company, the merger of ENI with and into the Company, the
Company becoming a direct wholly owned subsidiary of ETR and other reorganization transactions
contemplated by the Separation Agreement, ETR contributed fifty per cent (50%) of the Interest
owned by it in the Company to Enexus, such that ETR and Enexus each owned a fifty per cent (50%)
Interest in the Company;

     WHEREAS, ETR, Enexus and the Company have entered into a Formation Agreement dated as of
                                         (the “Formation Agreement”) under which,

 

 

subject to the satisfaction or waiver of certain terms and conditions and upon consummation of
the transactions contemplated therein, each Member will own a fifty per cent (50%) Interest in the
Company; and

     WHEREAS, upon consummation of the transactions contemplated by the Formation Agreement, the
parties to the Formation Agreement desire to repeal the Original LLC Agreement in its entirety and
replace it with this Agreement which provides for the admission of each of ETR and Enexus as a
Member to the Company and certain other matters set forth herein.

     NOW, THEREFOR, the parties hereto hereby agree as follows:

I. DEFINED TERMS

     1.01 Defined Terms. Capitalized terms used in this Agreement without definition will have the meanings set forth on
Appendix A to this Agreement. In addition, certain tax terms used in this Agreement are
defined on Appendix B to this Agreement. All capitalized terms used in this Agreement
which are not defined on Appendix A or Appendix B shall have the meaning given to
them elsewhere in this Agreement. The use of any term defined in this Agreement in its
uncapitalized form indicates that the word has its normal and general meaning.

     1.02 Other Defined Terms and References. 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. Unless the context otherwise
requires: (i) references in this Agreement to Articles, Sections, Appendices, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and Appendices, Exhibits and
Schedules to, this Agreement; (ii) each accounting term has the meaning assigned to it in
accordance with United States generally accepted accounting principles (“GAAP”), (iii) all
Exhibits, Schedules, Appendices and other attachments to this Agreement are specifically
incorporated into and made a part of this Agreement by any reference thereto in this Agreement, as
fully as if the terms and provisions thereof had been included in this Agreement in their entirety,
(iv) the words “include,” “includes” and “including” when used in this Agreement shall be deemed to
be followed by the phrase “without limitation”, (v) the terms “and/or” are to be construed to mean
that both cases apply or, either the first or the second case applies, as the circumstances may
require, (vi) the term “third party” means a Person that is not a party to this Agreement or an
Affiliate of such a party and (vii) 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.

2

 

II. ORGANIZATION

     2.01 Formation. The Members agree to continue the Company as a limited liability company pursuant to the
Delaware Act, upon the terms and subject to the conditions set forth in this Agreement. The
Members hereby ratify the filing of the Certificate of Formation for the Company on
                                        
 and the Certificate of Merger on                             
             with the Secretary of State of
Delaware by
                                        
 as “authorized person” within the meaning of the Delaware Act.

     2.02 Name of Company. The name of the Company is set forth on the cover page to this Agreement. The Board may from
time to time change the name of the Company or adopt one or more fictitious or trade names for use
by the Company as the Board may from time to time determine. Unless otherwise determined by the
Board, all business of the Company must be conducted under the name of the Company or the name of a
Subsidiary, and title to all Company Property must be held in such name or the name of a
Subsidiary.

     2.03 Principal Place of Business. The initial principal place of business and office of the Company is located at Jackson,
Mississippi.

     2.04 Term. The term of the Company as a Delaware limited liability company commenced on the date of the
filing of the Certificate of Formation pursuant to the Delaware Act and will have a perpetual
existence unless sooner terminated pursuant to the provisions of this Agreement. The existence of
the Company as a separate legal entity shall continue until cancellation of the Certificate of
Formation as provided in the Delaware Act.

     2.05 Registered Agent and Registered Office. The Company shall maintain a registered office in Delaware at, and the name and address of the
Company’s initial registered agent for service of process in Delaware is, The Corporation Trust
Company, and the address of the Company’s initial registered agent and the address of the Company’s
initial registered office in the State of Delaware is 1209 Orange Street, Wilmington, Delaware
(County of New Castle), 19801. Such agent and office may be changed from time to time by the
Board.

     2.06 Purpose.

     (a) The principal purposes and business of the Company are directly or indirectly, through its
Subsidiaries: (i) to provide services in connection with the maintenance, operation, management and
decommissioning of nuclear power plant facilities, including maintenance and operation services for
the nuclear power plant facilities owned by Enexus (or its Subsidiaries) and other Persons and such
other activities and businesses as may be determined advisable or appropriate by the Members;
(ii) to conduct all activities reasonably necessary or desirable to accomplish any of the
foregoing, and to do anything necessary or incidental to any of the foregoing; and (iii) to

3

 

carry
on any other lawful business, purpose or activity as may be permitted under the Delaware Act.

     (b) The Company may form or acquire, directly, or indirectly through a Subsidiary, additional
Subsidiaries to own and conduct a portion of the Company’s business; provided,
however, (i) ENOI LLC (d/b/a EquaGen Nuclear) will be managed exclusively by the Company,
its sole member and (ii) each other Subsidiary will either be managed exclusively by the Company as
its sole member, or the terms of the organizational documents relating to each other Subsidiary
must contain such provisions as will together with the provisions of this Agreement have
substantially the same effect as would be the case if all such business activities were conducted
by the Company pursuant to the terms of this Agreement, provided, that where a
Subsidiary is managed exclusively by the Company, any action by that Subsidiary which would be a
Significant Matter or Member Matter under this Agreement cannot be taken by the Subsidiary unless
the matter is approved by a Supermajority Vote of the Board of the Company.

     (c) The Company may enter into and perform, and may cause its Subsidiaries to enter into and
perform, the Key Contracts to which the Company or a Subsidiary of the Company is a party and all
documents, agreements, and certificates contemplated thereby or related thereto, all without
further act, vote or approval of any Person, notwithstanding any other provision of this Agreement.
The authorization set forth in the preceding sentence shall not be deemed a restriction on the
power and authority of the Board to enter into other agreements or documents on behalf of the
Company or the JV Group in accordance with the terms of this Agreement. The Company is hereby
directed by the Board to enter into the Key Contracts and to cause each applicable Subsidiary to
enter into the Key Contracts to which it is a party in such final forms as the Members may agree.

     2.07 Organizational Matters. The Officers shall, from time to time, register the Company as a foreign limited liability
company and file such fictitious or trade name statements or certificates in such jurisdictions and
offices as they consider necessary or appropriate. The Officers will take any and all other
actions as may be reasonably necessary to perfect and maintain the status of the Company as a
limited liability company or similar type of entity under the laws of any state or jurisdiction
other than Delaware in which the Company engages in business and continue the Company as a limited
liability company, to protect the limited
liability of the Members as contemplated by the Delaware Act, and to accomplish the purposes of the
Company.

     2.08 Third Party Business.

     (a) The Members shall cause the Company to conduct all Third Party Business through a
Subsidiary of the Company that does not carry on any other business activities (“Third Party
Business Subsidiary”).

4

 

     (b) The Company shall ensure that the organizational documents of each Third Party Business
Subsidiary contain provisions limiting the scope of permitted activities of the Third Party
Business Subsidiary solely to Third Party Business.

     (c) The Company shall ensure that no Third Party Business Subsidiary is the employer of any
Officer or any other individual filling a position designated by the Board, from time to time, as a
position that shall not be held in a Third Party Business Subsidiary.

     2.09 ENOI LLC Labor Matters. Subject to Section 2.06(b):

     (a) ENOI LLC shall have full and exclusive control over all labor relations matters involving
its union-represented and non-union represented employees. Specifically, but without limitation,
ENOI LLC shall have full and exclusive authority to make decisions, commit financial and other
resources, set policies and negotiate and enter into binding agreements concerning all labor
relations matters involving its employees, resolve all grievance-arbitration, administrative and
court litigation matters involving union-represented ENOI LLC employees, make binding decisions and
representations regarding union organizing campaigns involving ENOI LLC employees, and address all
other issues involving union representation of ENOI LLC employees. Further, ENOI LLC shall have
full and exclusive authority to make decisions and set guidelines regarding the labor relations of
its contractors;

     (b) ENOI LLC shall assume any and all existing collective bargaining agreements to which
Entergy Nuclear Operations, Inc. was a party prior to the merger of Entergy Nuclear Operations,
Inc. into a Delaware limited liability company named “ENOI LLC” (d/b/a “EquaGen Nuclear”).
Further, to the extent required by a collective bargaining agreement, ENOI LLC will require any
successor-in-interest of ENOI LLC to assume that collective bargaining agreement; and

     (c) ENOI LLC will be solely responsible for directing and supervising ENOI LLC’s bargaining
unit employees and for fulfilling all obligations under the collective bargaining agreements to
which ENOI LLC is a party and shall have no authority to direct or supervise the bargaining unit
employees of any other employer.

III. MEMBERS

     3.01 Admission of Members.

     (a) Each of Enexus and ETR is hereby admitted as a Member of the Company and shall be shown as
such on the books and records of the Company as of the Effective Date.

     (b) Except as expressly permitted by this Agreement, no other Person may be admitted as a
Member of the Company, and no additional Interests or different class of Interest may be issued,
without the approval of all of the Members.

5

 

     3.02 Membership Interests. The Interests shall not be certificated unless otherwise determined by the Board in its sole
discretion.

     3.03 Limitation of Liability.

     (a) Except as otherwise expressly provided in the Delaware Act, the debts, obligations and
liabilities of the Company, whether arising in contract, tort or otherwise, are solely the debts,
obligations and liabilities of the Company, and no Member is obligated personally for any such
debt, obligation or liability of the Company solely by reason of being a Member of the Company.
Except as otherwise expressly provided in the Delaware Act, but subject to the provisions of
Section 3.03(b), the liability of each Member shall be limited to the amount of capital
contributions (if any) that the Members agree shall be made by each Member pursuant to Section
4.01(b), but only when and to the extent the same shall become due and payable. Further, no
Manager, general or limited partner of any Member, shareholder, member or other holder of an equity
interest in any Member, or any officer, director, agent or employee of any of the foregoing or any
of their Affiliates is obligated personally for any debt, obligation or other liability of the
Company solely by reason of their being a Manager, general or limited partner of any Member,
shareholder, member or other holder of an equity interest in any Member, or officer, director,
agent or employee of any of the foregoing or any of their Affiliates. Further, failure of the
Company to observe any corporate or company governance or other formalities or requirements
relating to the exercise of its powers or the management of its business or affairs under this
Agreement or the Delaware Act will not be grounds for any Member, Manager, general or limited
partner of any Member, shareholder, member or other holder of an equity interest in any Member, or
any officer, director or employee of any of the foregoing or any of their Affiliates to be held
liable or obligated for any debt, obligation or other liability of the Company.

     (b) Notwithstanding any other provision of this Agreement to the contrary, the Members agree
that, as between the Members, but not for the benefit of any third party or creditor: (i) recourse
with respect to each Member’s liability under this Agreement is explicitly limited to its Interest
in the Company and any proceeds thereof, and (ii) neither
the Company nor any Member shall have any recourse against any other assets of a Member, or
any past, present or future incorporators, representatives, officers, agents, directors or any
direct or indirect principals, shareholders, general or limited partners, members or other equity
or beneficial owners of such Member or any of the assets or property of any of the foregoing, for
the payment or collection of any amount, judgment, judicial process, arbitration award, fees or
costs or for any other obligation or claim arising out of or based upon this Agreement.

     (c) The provisions of this Section 3.03 will survive the termination or expiration of
this Agreement and the dissolution, liquidation and winding up of the Company.

     3.04 Term.

6

 

     (a) Subject to Section 3.04(b), this Agreement will cease to apply to a Member that
has transferred all of its Interest as permitted by this Agreement.

     (b) The occurrence of an event described in Section 3.04(a) will not affect:

     (i) any accrued rights and obligations of the parties in respect of any breach of this
Agreement prior to the occurrence of that event; or

     (ii) any provision of this Agreement which is expressed to come into effect on, or
survive, the occurrence of that event.

IV. CAPITAL

     4.01 Capital Contributions.

     (a) The Members acknowledge and agree that as of the Effective Date, the Capital Account
balances and Percentage Interests of the Members are as set forth on Exhibit A.

     (b) Except with the unanimous approval of all Members, no Member is or will be required or
entitled to make any Capital Contribution to the Company, nor is or will any Member be required or
entitled to loan any funds to the Company.

     (c) Upon the unanimous approval of the Members of a request for any other Capital
Contribution, each Member shall, within thirty (30) calendar days thereafter (or such shorter
period as is approved by the Board), contribute its pro rata share (in proportion to the relative
Percentage Interest of the Members at the time of such request) of the Capital Contribution so
requested.

     (d) Any Capital Contributions provided for in this Section 4.01 shall be made by wire
transfer of funds to the Company account designated by the Board, and any reimbursements or
distributions to any Member provided for in this Agreement shall be made by wire transfer of funds
to such account as designated by such Member.

     4.02 Failure to Make Capital Contributions.

     (a) Remedies. If any Member (the “Non-Contributing Member”) fails to timely
make any Capital Contribution (or any portion thereof) agreed to by the Members pursuant to
Section 4.01 (and if the Non-Contributing Member is part of a Member Group, the other
Members of the same Member Group have not made such contribution in place of the Non-Contributing
Member), and all other Members (each, a “Contributing Member”) have made their pro rata
share of such Capital Contribution, then a Contributing Member may (but is not required to)
contribute the portion of such requested Capital Contribution the Non-Contributing Member failed to
contribute (if there is more than one Contributing Member, then in proportion to the relative
Percentage Interests of such Contributing Member unless they otherwise agree). In the case of any

7

 

failure to timely make any Capital Contributions (or any portion thereof) agreed to by the Members
pursuant to Section 4.01, then the Contributing Member will elect, by notice in writing to
the Company, that all of the Capital Contributions made by the Contributing Member, including both
the Contributing Member’s and, if applicable, the Non-Contributing Member’s pro rata portion
thereof (collectively, the “Emergency Advance”) will be treated as:

     (i) a loan from such Contributing Member to the Company (“Emergency Loan”); or

     (ii) a subscription for additional Interests in the Company, on the terms set out
below (“Class A Capital Contribution”).

     (b) Emergency Loan. If a Contributing Member elects to make an Emergency Advance
pursuant to Section 4.02(a)(i), the Company must repay to the Contributing Member the
amount of the Emergency Advance plus an additional amount in the nature of “interest” thereon at
the Prime Rate plus 2% per annum from the date of the Emergency Advance to the date of repayment of
the Emergency Advance in full, by bullet repayment upon ninety (90) days notice.

     (c) Class A Capital Contributions. If a Contributing Member elects to make an
Emergency Advance pursuant to Section 4.02(a)(ii), the amount the Contributing Member Group
has contributed (including both the Contributing Member Group’s and the Non-Contributing Member
Group’s portion thereof) will be designated as Class A Capital Contributions (which class of
contributions confers the same rights as if it were contributed as a Capital Contribution except
that no voting rights attach to the additional Interest issued to the Member on account of its
Class A Capital Contributions). An Emergency Advance that is made as a Class A Capital
Contribution by Contributing Members will result in the Gross Asset Values of the Company Property
being adjusted
as provided in clause (ii) of the definition of “Gross Asset Value” set forth in Appendix
B and an adjustment to the Percentage Interest of each Member as a result thereof;
provided that the adjustment to the Percentage Interests of the Members shall not
(1) affect the voting rights of the Members, such that the voting rights of the Members after the
Emergency Advance made pursuant to Section 4.02(a)(ii) are the same voting rights each
Member had prior to such Emergency Advance.

     (d) Remedies Exclusive. The remedies set forth in this Section 4.02 shall
constitute the sole and exclusive remedies of each Member for the failure of any other Member to
make Capital Contributions at any time; and except as set forth in this Section 4.02, no
Member shall have any recourse of any kind to any Member or its Interest or other assets in respect
of any such failure.

     4.03 Negative Capital Account Balance. A negative or deficit balance in any Member’s Capital Account is not, and will not be deemed to
be, an asset of the Company, and no Member with a negative or deficit balance in its Capital
Account has or will have any obligation to the Company, any other Member or any third party or
creditor to restore

8

 

said negative or deficit balance in its Capital Account upon liquidation or
dissolution of the Company (and for purposes of this Section 4.03, the references to
Capital Account shall be deemed to also include the capital account of any Member for financial or
book purposes or as set forth in the Delaware Act or under common law).

V. INTERESTS IN THE COMPANY

     5.01 Member Percentages. The Percentage Interests of the Members may be adjusted only as set forth in this Agreement.

     5.02 Return of Capital. No Member is or will be liable for the return of the Capital Contributions or Capital Account
(or any portion thereof) of any other Member, it being expressly understood and agreed that any
such return shall be made solely from the income and assets of the Company and its Subsidiaries and
only in accordance with the provisions of this Agreement. No Member is or will be entitled to
withdraw or receive a return of any part of its Capital Contributions or Capital Account, to
receive interest on its Capital Contributions or Capital Account or to receive any distributions
from the Company, except as expressly provided for in this Agreement or under applicable law (and
for purposes of this Section 5.02, the references to Capital Account shall be deemed to
also include the capital account of any Member for financial or book purposes or as set forth in
the Delaware Act or under common law). No Member is or will be entitled to demand or receive
property other than cash in return for its Capital Contributions to the Company, its Capital
Account or its Interest in the Company.

     5.03 Ownership. All assets of any kind (tangible or intangible) of the Company shall be owned by the Company or
its Subsidiaries, subject to the terms and provisions of this Agreement and the Formation
Agreement. No Member shall have any interest in any specific Company Property. The interests of
all Members in the Company are personal property.

     5.04 Waiver of Partition. Except as otherwise expressly provided for in this Agreement, each of the Members hereby
irrevocably waives, to the fullest extent permitted by law, any right or power that such Member
might have:

     (a) to cause the Company, any Subsidiary of the Company or any of its or their assets to be
partitioned;

     (b) to cause the appointment of a receiver for all or any portion of the assets of the Company
or any Subsidiary of the Company;

     (c) to compel any sale of all or any portion of the assets of the Company or any Subsidiary of
the Company pursuant to any applicable law; or

     (d) to file a complaint, or to institute any proceeding at law or in equity, to cause the
termination, dissolution or liquidation of the Company or any Subsidiary.

9

 

Each of the Members has been induced to enter into this Agreement in reliance upon the waivers set
forth in this Section 5.04, and without such waivers no Member would have entered into this
Agreement.

VI. ALLOCATIONS AND DISTRIBUTIONS

     6.01 Allocations. Profits, Losses and other items of the Company’s income, gain, loss or deduction will be
allocated to the Members in accordance with, and the Members and the Company will be subject to the
other provisions provided for in, Appendix B.

     6.02 Distributions.

     (a) Except as provided in Section 6.03 and subject to (i) the provisions of
Section 6.02(b) and (ii) any contractual restrictions binding on the Company or any
Subsidiary of the Company (including any debt documents), the Board shall have the sole authority
to approve the making of distributions to the Members, in accordance with Section 7.03.
Except to the extent provided otherwise in this Agreement (including in
Section 6.02(b) and Section 9.06(g)), all distributions made in accordance
with the terms of this Section 6.02 shall be made to Members in proportion to their
Percentage Interests as of the record date specified for such distribution, provided
that, the Board shall adjust the amount of distributions made to the Members pursuant to
this Section 6.02(a) to the extent necessary to account for any variation in the relative
Percentage Interests of the Members occurring before the record date.

     (b) Whenever the Company (or its Subsidiary) receives an amount due to it (or its Subsidiary)
under the express terms of a Key Contract (“Contract Fee”), which amount was paid in
connection with the early termination of such agreement (for any reason whatsoever, including
expiration of a license, failure to renew a license or termination with or without cause by any
party to such agreement), the Members shall be entitled to receive a distribution of the Contract
Fee in proportion to their Percentage Interests as of the date the Contract Fee is payable to the
Company (or its Subsidiary). The amount of the Contract Fee to which the Members shall be entitled
(“Distributable Contract Fee Amount”) will be the balance following utilization thereof for
any costs incurred directly as a result of such termination and which are the responsibility of the
Company (or its Subsidiary), including internal de-mobilization or incremental, unplanned severance
costs. The Distributable Contract Fee Amount must be distributed to the Members as soon as
practicable after the Contract Fee has been received and the Distributable Contract Fee Amount
determined by the Board, in accordance with Section 7.03. The Members and the Company
shall take all steps necessary to distribute the Distributable Contract Fee Amount as soon as
practicable after the Contract Fee has been received by the Company. For avoidance of doubt, a
Person who is a Member at the time a Contract Fee becomes
payable to the Company (or its
Subsidiary) shall be entitled to receive a distribution equal to that proportion of the
Distributable Contract Fee Amount represented by such Person’s Percentage Interest as of the time
the Contract Fee becomes

10

 

payable to the Company (or its Subsidiary), whether or not such Person is
a Member of the Company at the time the Company makes the distribution of the Distributable
Contract Fee Amount.

     6.03 Distributions in Liquidation. Upon the dissolution and winding-up of the Company, the proceeds of sale and other assets of the
Company distributable to the Members under Section 11.02(c)(ii) shall be distributed, not
later than the latest time specified for such distributions pursuant to Treasury Regulation Section
1.704-1(b)(2)(ii)(b)(2) to the Members in accordance with the positive balance in their Capital
Accounts, after giving effect to the allocation of all Profits, Losses, and other items of the
Company’s income, gain, loss or deduction pursuant to Appendix B. With the approval of the
Board, a pro rata portion of any net liquidation proceeds or distributions that would otherwise be
made to the Members under this Section 6.03 may be distributed by the Company to a trust
established by the Board (for the benefit of the Members) for the purposes of liquidating Company
and its Subsidiaries’ assets, collecting amounts owed to the Company or any Subsidiary, and paying
any contingent or unforeseen liabilities or obligations of the Company and any
Subsidiary of the Company arising out of or in connection with the Company or any Subsidiary of the
Company. The assets of any trust established under this Section 6.03 will be distributed
to the Members (from time to time by the trustee of the trust) upon approval of the Board in the
same proportions as the amount distributed to the trust by the Company would otherwise have been
distributed to the Members under this Agreement.

     6.04 Restrictions on Distributions. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not
be required to make a distribution to the Members on account of their Interest in the Company if
such distribution would violate Section 18-607 of the Delaware Act or any other applicable law.

     6.05 Deemed Distributions. In the event a governmental authority makes an adjustment described in Section 5(c) of
Appendix B that results in a Member being deemed to have paid an amount to the Company, the
amount will be deemed to have been distributed 100% to that Member if necessary to cause the
relative Capital Accounts of the Members to be in accordance with their relative Percentage
Interests.

VII. MANAGEMENT

     7.01 Management.

     (a) Subject to such matters which are expressly reserved hereunder to the Members for
decision, the business and affairs of the Company shall be managed by a Board of Managers (the
“Board”) which shall be responsible for policy setting and approval of the overall
direction of the Company.

     (b) The Company will have employees or agents who are denominated as officers as the Board may
designate from time to time (“Officers”). Each Officer will

11

 

hold office until the term of
his or her written appointment expires, his or her death, or until he or she resigns or has been
removed by the Board (whichever first occurs), having such duties and responsibilities and on
appointment terms approved by the Board.

     (c) Subject to the provisions of this Agreement and to the directives and policies of the
Board, an Officer shall have the power, acting individually or jointly, to represent and bind the
Company in all matters, solely within the scope of their respective duties.

     (d) Managers and Members may engage and consult with legal counsel, accountants or any other
advisors or consultants in carrying out their duties under this Agreement, and any act or omission
by a Manager or the Members in good faith reliance upon the recommendations, reports and advice
given them by any such advisors or consultants shall be full justification for the act or omission.

     (e) The Company and each Subsidiary of the Company will conduct their respective businesses in
accordance with all applicable requirements of any governmental authorities having jurisdiction
over the Company and the Subsidiary and their respective businesses and assets. Notwithstanding
any other provision of this Agreement to the contrary, neither the Board nor any other Member has
any authority to authorize or approve any loan or other financing or refinancing on behalf of the
Company or any Subsidiary of the Company, the effect of which would be to cause any personal
liability on the part of any Member or any of its Affiliates, without the advance written consent
of such Member.

     (f) The Board may establish one or more committees of the Board, each committee to consist of
at least two (2) Managers. The Board shall designate an equal number of each Member’s Managers to
serve on a committee. Any committee of the Board will have all the powers and authority of the
Board, subject to any restrictions set forth in the Board’s resolution establishing such committee.

     (g) In addition, each Member shall have the right to consult with and advise the Company, the
other Members and the Board on a regular basis with respect to the business and operations of the
Company, and each such Member shall at all times have the right, from time to time, to meet (or
confer by telephone) on a regular basis with the Officers, the other Members and the Board upon
reasonable notice for the purpose of (i) consulting with and rendering advice with respect to any
matter, including the management or business of the Company and its Subsidiaries, (ii) reviewing
and discussing the day-to-day affairs of the Company and its Subsidiaries and their compliance with
the then-current Annual Budget, (iii) discussing strategic operational matters relating to the
Company or any Subsidiary of the Company, including with respect to the Business Plan, and
(iv) obtaining information regarding their respective activities and prospects and expressing their
views thereon.

     7.02 Members of the Board.

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     (a) The Board will initially consist of six (6) individuals (each a “Manager”), three
(3) of whom will be appointed by ETR, three (3) of whom will be appointed by Enexus. One or more
alternative Managers may be appointed by or on behalf of each Member to act in the absence of any
one of its Managers. If an alternate Manager is appointed, he or she:

     (i) may, but need not, be a Manager;

     (ii) may attend and vote in place of the relevant Manager at any Board meeting at
which the relevant Manager is not present;

     (iii) is entitled to a separate vote for each relevant Manager the alternate Manager
represents in addition to any vote the alternate Manager may have as a Manager in his or
her own right;

     (iv) is entitled to notice of meetings of the Board in the same way that Managers are
entitled to receive notice of such meetings under Section 7.02(i);

     (v) is to be counted as a Manager for each relevant Manager the alternate Manager is
attending the meeting on behalf of (in addition to being counted as a Manager in his or her
own right, if applicable) in determining whether a quorum is present; and

     (vi) shall cease to be an alternate Manager immediately and automatically upon (1) the
relevant Manager ceasing to be a Manager or (2) the appointor providing notice to the
Company revoking the appointment.

     (b) In connection with the determination of any and all matters presented to the Board for
action, the Members agree and acknowledge that each Manager will be acting as the representative of
the Member he or she represents, and each such Manager shall be free to represent the views and
positions of such Member and to act in the manner that the Manager believes is in the best
interests of the Member that he or she represents, without regard to the interests of any other
Member, the Company or any of its Subsidiaries. To the fullest extent permitted by law, including
Section 18-1101(c) of the Delaware Act:

     (i) no Manager will have any fiduciary duty, duty of care or any other duty to any
other Manager or to the Company, any of its Subsidiaries or any Member of the Company who
did not appoint him or her; and

     (ii) no Member will have any fiduciary duty, duty of care or any other duty to any
other Member or to the Company or any of its Subsidiaries.

          The Company and each Member therefor waive, to the fullest extent permitted by law, any claim
against any Member, its Affiliates, or any Nominee Manager appointed by such Member asserting
breach of fiduciary duty, duty of care or any other

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duty in connection with the determination of
matters presented to the Board or to the Members for action.

     (c) A Member may, by written notice to the other Members, remove any Manager or any alternate
Manager such Member appointed and appoint a substitute therefor.

     (d) The Chairman of the Board (the “Chairman”) will be designated alternately by each
Member for two (2) year periods, beginning with Enexus on and from the Effective Date. The
Chairman will not have a deciding vote at meetings of the Board.

     (e) A Member may, by written notice to the other Members, remove any Chairman such Member
appointed and appoint a substitute therefor.

     (f) The initial Managers appointed by each of ETR and Enexus and the initial Chairman
appointed by Enexus will be the individuals specified in Exhibit D to this Agreement.

     (g) The number of Managers may be increased or decreased from time to time by consent of all
the Members; provided, however, that at all times, except as provided in the next
sentence, ETR and Enexus will have the right to appoint an equal number of Managers.
Notwithstanding any other provision of this Agreement to the contrary, if any Member Transfers a
percentage of its Interest such that its Interest (or the aggregate Interests of its Member Group,
if applicable) is reduced to less than twenty percent (20%) of the total outstanding Interests
(such reduction, a “Reduction Event”), then the number of Managers appointed by the Member
(or the Member Group, if applicable) suffering such Reduction Event will be immediately reduced to
only one (1) Manager, and the number of Managers appointed by any other Member or Member Group
(which has not suffered a Reduction Event) will be immediately increased by one (1), so that such
Members (the “Majority Members”) will, together, thereafter be entitled to appoint a
majority of the Managers appointed by all the Members.

     (h) Meetings of the Board will be held at the offices of the Company or at such other places
and with such frequency as shall be determined by the Board. Meetings of the Board may be called
by or at the request of any Manager for any reasonable purpose. The Chairman or the Secretary
shall provide written notice to the Managers of all meetings of the Board as directed by the Board
or any Manager in accordance with the terms of this Agreement, and shall provide a written agenda
for such meetings as well as any related materials deemed necessary or appropriate or as directed
by any Manager for review by the Managers in connection with such meetings. Without limiting the
foregoing, any Manager may also provide notice of a meeting of the Board in accordance with the
terms of this Agreement.

     (i) Notice of any special meeting of the Board must be given to each Manager no fewer than two
(2) Business Days prior to the date of such special meeting, and notice of any other meeting of the
Board must be given to each Manager no fewer than five (5)

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Business Days prior to the date of such
meeting. Notices of meetings shall be delivered in the same manner set forth in Section
12.03 (other than notices of special meetings, which may also be delivered via the internet or
other electronic mail). The attendance of a Manager at a meeting of the Board shall constitute a
waiver of notice of such meeting, except where a Manager attends a meeting for the express purpose
of objecting to the transaction of any business because the meeting is not properly called or
convened.

     (j) A majority (in number) of the Managers will constitute a quorum for transaction of
business at any meeting of the Board, provided, however, that such majority
includes at least one Manager appointed by each Member, unless a Reduction Event shall have
occurred, in which case such majority need only include Managers appointed by the Majority Members;
and provided further, if less than a quorum of such Managers are present at a
meeting, a majority of the Managers present at that meeting may adjourn the meeting to a date not
earlier than two (2) days after the first meeting,
upon notice being given in accordance with Section 7.02(i). If a quorum is not
present at the next meeting (following the meeting that was adjourned), any two (2) Managers will
constitute a quorum.

     (k) Each Manager has one (1) vote, provided that, at any meeting of the Board
at which less than all the Managers (or their respective alternate Managers) appointed by a Member
(“Nominee Managers”) are present, each Nominee Manager (or his or her alternate Manager)
who is present can exercise a number of votes equal to the number of votes that would have been
exercisable by all of that Member’s Nominee Managers, if all of them (themselves or through their
respective alternate Managers) were present, divided by the number actually present. Fractional
votes will be counted.

     (l) Any action required or permitted to be taken at a meeting of the Board may be taken
without a meeting if a consent in writing, setting forth the actions so taken, shall be signed by
all of the Managers entitled to vote with respect to the subject matter, unless a Reduction Event
shall have occurred, in which case the majority signing such consent must include, with respect to
all matters, at least one Nominee Manager of each of the Majority Members.

     (m) The Managers may participate in and act at all meetings of the Board through the use of a
conference telephone or other communications equipment by means of which all persons participating
in the meeting can hear each other. Participation in such meetings shall constitute attendance in
person at the meeting of the person or persons so participating.

     (n) The Board shall establish, from time to time, the amount of any remuneration a Manager
shall be entitled to receive from the Company or any Subsidiary of the Company for his or her
services as a Manager. Each Manager shall be entitled to reimbursement for reasonable expenses
incurred in serving as a Manager, subject to any applicable policies established by the Board from
time to time.

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     7.03 Significant Matters. The act or affirmative vote of a simple majority at which a quorum is present will be the act of
the Board and will be binding upon the Company and each of the Members, unless the act of a greater
or lesser number is required or permitted by this Agreement; provided, however,
that the following actions (each a “Significant Matter”) cannot be taken by the Company or
a Subsidiary without the approval of two thirds of the votes (“Supermajority Vote”) cast by
all the Managers at a meeting where a quorum is present (including the affirmative vote of at least
one (1) Manager appointed by ETR and one (1) Manager appointed by Enexus, unless a Reduction Event
shall have occurred, in which case, the applicable majority requires the affirmative vote of at
least one of the Managers appointed by each of the Majority Members):

     (a) approval of the business plan or Annual Budget and any material departure from the
Business Plan or Annual Budget;

     (b) variation or termination of material contracts, including but not limited to the Key
Contracts, provided none of the Member Nominees of Enexus may be present or vote on any decision by
the Company to exercise the Company’s express termination rights under an Amended and Restated
Operating Agreement except as contemplated by Section 9.06(a)(i);

     (c) single expenditures above $15 million;

     (d) Indebtedness in excess of $1 million;

     (e) except as provided in sub-paragraph (f) below, contracts for goods or services in excess
of $5 million, other than in accordance with the approved Business Plan and Annual Budget, or
employment agreements or severance contracts in excess of $200,000;

     (f) subject to Section 9.06(a)(i), any Contract between the Company (or its
Subsidiaries) and a Member or an Affiliate of such Member;

     (g) placing or permitting any liens to exist on the assets of the Company;

     (h) commencement of litigation by the Company or the Company as a claimant or settling or
compromising any claim or litigation in excess of $1 million, except with respect to
litigation, claims or settlements to which a Member or its Affiliates (excluding, for avoidance of
doubt, the Company and its Subsidiaries) is a party (other than as a joint defendant or joint
plaintiff together with the Company or a Subsidiary of the Company), which shall require approval
by the affirmative vote of a simple majority of the Board without regard for the vote of the
Nominee Managers of such Member;

     (i) major regulatory filings made by ENOI LLC;

16

 

     (j) material amendments to any employee benefit plan, subject to the satisfaction of any
ENOI LLC collective bargaining obligations;

     (k) subject to Section 6.02(b), making any distribution to Members;

     (l) decisions regarding redemptions of Interests in the Company;

     (m) policies regarding financial securities (swaps, options, derivatives, commodity collateral
products, etc.);

     (n) selection of and changes in the Company’s accountants and auditors; and

     (o) the appointment or termination of the appointment of any Officer of the Company, or any
variation in his or her remuneration or terms of employment.

     7.04 Member Matters. Except as provided in Section 9.06, the following actions (each a “Member
Matter”) cannot be taken by the Company or a Subsidiary without the unanimous approval of the
Members:

     (a) issue of any securities of the Company;

     (b) variation of any rights attached to any securities of the Company, or any redemption,
buy-back or cancellation of any issued securities;

     (c) a decision to make a call for Capital Contributions;

     (d) the admission of any additional Member to the Company, other than in accordance with the
transfer provisions of this Agreement;

     (e) mergers, acquisitions, joint ventures, and partnerships;

     (f) a sale or other disposition of all or substantially all of the assets of the Company in
one or a series of related transactions;

     (g) changing the purpose and objectives of the Company, either directly or indirectly, through
investment in any other entity;

     (h) any amendment to this Agreement;

     (i) providing or ceasing to provide pension benefits and other employment benefits, subject to
the satisfaction of any ENOI LLC collective bargaining obligations; and

     (j) a decision to file for bankruptcy, wind up, dissolve or liquidate the Company.

     7.05 Duties and Conflicts.

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     (a) The Members and their respective officers, employees, Affiliates and Nominee Managers
shall devote such time to the business of the Company as they deem to be necessary or desirable in
connection with their respective duties and responsibilities hereunder.

     (b) Each of the Members recognizes that each of the other Members and its members, partners,
shareholders, officers, directors, employees, agents, representatives, Nominee Managers and
Affiliates, have or may have in the future other business interests, activities and investments,
some of which may be in conflict or competition with the business of the Company and/or one or more
of its Subsidiaries, and each of the other Members and its members, partners, shareholders,
officers, directors, employees, agents, representatives, Nominee Managers and Affiliates are
entitled to carry on such other business interests, activities and investments, subject to the
terms of any employment, non-compete or other similar agreements with the Company or any Subsidiary
of the
Company to which any such Person may be a party. Subject as aforesaid, to the fullest extent
permitted by law, none of the Company, any of its Subsidiaries or the other Members will have any
right, by virtue of this Agreement, in or to such activities, or the income or profits derived
therefrom, and the pursuit of such activities, even if competitive with the business of the Company
or any of its Subsidiaries, will not be deemed wrongful or improper.

     7.06 Competition.

     (a) Member Non-Solicit. Subject to Section 7.06(c), each Member may not, and
shall cause its Affiliates (excluding the Company and its Subsidiaries) not to, from the Effective
Date through and including the two year anniversary of the Effective Date, without the prior
written consent of the Company, either directly or indirectly, on their own behalf or in the
service or on behalf of others, solicit, aid, induce or encourage any individual who is a Senior
Employee of the Company or an entity that is part of the JV Group to leave his or her employment;
provided, however, that nothing in this Section 7.06(a) shall be deemed to
prohibit any general solicitation for employment through advertisements and search firms not
specifically directed at employees of the Company or a Subsidiary of the Company; provided
further, that the applicable Member or its Affiliate has not encouraged or advised such
firm to approach any such employee.

     (b) Company Non-Solicit. The Company may not, and shall cause its Subsidiaries not
to, from the Effective Date through and including the two year anniversary of the Effective Date,
without the prior written consent of the applicable Member, either directly or indirectly, on their
own behalf or in the service or on behalf of others, solicit, aid, induce or encourage any
individual who is a Senior Employee of an entity that is part of a Member’s Corporate Group to
leave his or her employment; provided, however, that nothing in this Section
7.06(b) shall be deemed to prohibit any general solicitation for employment through
advertisements and search firms not specifically directed at employees of a Member or a Subsidiary
of a Member; provided further, that the Company or its Subsidiary has not
encouraged or advised such firm to approach any such employee.

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     (c) Exception to Member Non-Solicit. The restriction on Members and their Affiliates
as set forth in this Section 7.06 shall not apply to ETR or its Affiliates in a sale of the
whole (but not part) of ETR’s (or its Permitted Transferee’s) Interest in the Company. In
addition, ETR and its Affiliates shall be entitled to make offers of employment to any officer or
employee of the JV Group who ETR, in its sole discretion, identifies in a written notice to the
Company and Enexus, prior to closing of such sale, are reasonably required by ETR or its Affiliates
in order to satisfy regulatory requirements. Any offers of employment made by ETR or its
Affiliates pursuant to this Section 7.06(c) shall be made prior to closing of such sale and
(if accepted), effective on and from the date on which the sale is consummated.

     7.07 Company Expenses. Except as otherwise provided in this Agreement, the Company or its Subsidiaries (as applicable)
shall be responsible for paying, and will pay, all direct costs and expenses related to the
Business, including all costs of financing, fees and disbursements of attorneys, financial
advisors, accountants, surveyors or valuers or valuation consultants, appraisers, brokers and
engineers, and any and all other fees, costs and expenses directly attributable to the Business of
the Company and its Subsidiaries. If any such costs and expenses are or have been paid by any
Member, such Member shall be entitled to be reimbursed for such payment so long as such payment is
reasonably necessary for the Business of the Company and its Subsidiaries and has been specifically
approved by the Board.

     7.08 Contracts with Affiliates. Subject to Section 2.06(c), the Members and their respective Affiliates will be
permitted to enter into contracts with the Company or any of its Subsidiaries if the terms to the
Company or its Subsidiary are not materially less favorable than could reasonably be expected to
have been obtained with an unaffiliated third party on an arm’s-length basis and has been
specifically approved by a Supermajority Vote of the Board.

     7.09 Business Development Services Contracts. Notwithstanding the definition of
“Significant Matters” set forth in Section 7.03 and “Member Matters” set forth in
Section 7.04, the Members and their respective Affiliates will be permitted to enter into
Business Development Services Contracts without the prior approval of the Board or the Members,
subject to the following limitations:

     (a) a Business Development Services Contract shall not be subject to prior approval by the
Board if:

     (i) the dollar value of the direct and indirect costs of the services to be provided
under such Business Development Services Contract does not exceed $200,000; and

     (ii) the dollar value of the direct and indirect costs of the services to be provided
under such Business Development Services Contract, and the direct and indirect costs of the
services provided (or to be provided) under all other Business

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Development Services
Contracts executed in the same fiscal year as the Business Development Services Contract in
7.09(a)(i), does not exceed $200,000;

     (b) any Business Development Services Contract that does not meet the requirements of Section
7.09(a) shall be subject to prior approval by either 2/3 of the Board (if a Significant Matter) or
all of the Members (if a Member Matter).

     7.10 Deadlock Matters.

     (a) Declaration. If the Board fails to approve a Significant Matter at any two (2)
consecutive Board meetings at which a quorum is present (“Deadlock Matter”), the Member
whose Nominee Managers voted in favor of the Deadlock Matter may describe in writing, in reasonable
detail, the Deadlock Matter (“Deadlock Notice”) within five (5) days after the second
meeting and deliver the Deadlock Notice to the Board.

     (b) CEOs. The Board shall deliver any Deadlock Notice received pursuant to
Section 7.10(a) to the chief executive officer of the Parent of each Member, or the Member
if it has no Parent, and the chief executive officers shall have thirty (30) days to meet and seek
to resolve the Deadlock Matter.

     (c) Mediation. If the Deadlock Matter is not resolved by the chief executive officers
of each Member within thirty (30) days of the Deadlock Matter being referred to them by the Board,
the Deadlock Matter shall be referred to mediation by the Board. Unless the Members have agreed on
a mediator within five (5) days of the end of the period in which the chief executive officers were
to resolve the Deadlock Matter, the mediator will be appointed in accordance with the Arbitration
Rules and Mediation Procedures of the American Arbitration Association (“AAA”). The
mediation will be carried out in accordance with the Arbitration Rules and Mediation Procedures of
the AAA, unless the Members agree otherwise in writing.

     (d) Arbitration. If the Deadlock Matter is not resolved by mediation within sixty
(60) days of the Deadlock Matter being referred to a mediator (“Mediation Period”), the
Deadlock Matter will be referred to binding arbitration in accordance with the Commercial
Arbitration Rules of the AAA (“Rules”), as modified by the following procedure:

     (i) the Members shall mutually agree upon an arbitrator within fourteen (14) days of
the date on which the Mediation Period expires without the Deadlock Matter being resolved
and, in the absence of such agreement, such arbitrator shall be appointed by the AAA in
accordance with the listing, striking and ranking procedure in the Rules;

     (ii) the place of arbitration shall be Jackson, Mississippi, or such other location as
mutually agreed by the Members in writing;

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     (iii) the arbitrator shall be empowered to resolve the Deadlock Matter by selecting
either of the positions set forth by the Members, provided that the arbitrator is not
empowered to amend the provisions of ARTICLES IV or VII of this Agreement
or otherwise amend this Agreement where such amendment would, in any way whatsoever, change
or be likely to change the effect of the provisions set forth in ARTICLE VII of
this Agreement, any other fundamental governance provisions of this Agreement specified by
the Members in writing, or require a Member to make a Capital Contribution to which it has
not given its prior consent;

     (iv) any arbitration proceedings or decision rendered hereunder and the validity,
effect and interpretation of this Section 7.10(d) shall be governed by the Federal
Arbitration Act, 9 U.S.C. § 1 et seq.; and

     (v) the decision of the arbitrator shall be final and binding on the parties and shall
be the sole and exclusive remedy between the parties regarding the Deadlock Matter
presented to the arbitrator.

VIII. BOOKS AND RECORDS

     8.01
Books and Records.

      The Company (and the Officers on behalf of the Company) shall maintain, or cause to be
maintained, at the expense of the Company, in a manner customary and consistent with good
accounting principles, practices and procedures and, for so long as the Company (or its Subsidiary)
is subject to the jurisdiction of FERC, otherwise in accordance with the FERC Uniform System of
Accounts (as may be amended from time to time), a comprehensive system of office records, books and
accounts for the Company and each of Subsidiary (which records, books and accounts shall be and
remain the property of the Company) in which shall be entered fully and accurately each and every
financial transaction with respect to the operations of the Company and its Subsidiaries. Bills,
receipts and vouchers must be maintained on file by the Company. The Company shall maintain said
books and accounts in a safe manner and separate from any records not having to do directly with
the Company or any Company Property. The Company shall, at the Company’s expense, cause audits to
be performed and audited statements and income tax returns to be prepared as required by
Section 8.03. Such books and records of account shall be prepared and maintained by the
Company at the principal place of business of the Company or such other place or places as may from
time to time be determined by the Board. Each Member and each Member’s representatives, agents and
designees shall at all reasonable times have access to, and have the right, at such Member’s
expense, to inspect and copy and conduct an audit of all books and records
of the Company and its
Subsidiaries (including all documents, correspondence, etc.), at the location where books and
records are normally kept. A reasonable charge for copying books and records may be charged by the
Company. Upon request of any Member, the Company shall promptly provide such Member with a list of
the locations at which any of the books and records of account, other business records, documents,
correspondence, etc. of the Company and its Subsidiaries are maintained, along with a detailed list
of the books and records

21

 

maintained at each such location. The Officers of the Company shall be
charged with the responsibility of carrying out the provisions of this Section 8.01 and the
other provisions of this ARTICLE VIII.

     8.02 Accounting and Fiscal Year. The financial statements of the Company and its Subsidiaries will be prepared in accordance with
GAAP and the Company and its Subsidiaries shall report their
operations for tax purposes on the accrual method. The fiscal year of the Company shall end on
December 31 of each year.

     8.03 Reports. The Company shall prepare or cause to be prepared at the expense of the Company and furnish to
each of the Members:

     (a) no later than the third Business Day following the end of each calendar month, for the
prior month, and the year-to-date period ended in that month, an unaudited balance sheet of the
Company (and its Subsidiaries) dated as of the end of the prior month of the Company, an unaudited
statement of income and expense, an unaudited statement of cash flow of the Company and its
Subsidiaries (each consolidated, if appropriate), and an unaudited statement of changes in Members’
capital also dated as of the prior month, and all of which shall be prepared in accordance with
GAAP consistently applied (except as otherwise noted therein);

     (b) no later than the fifth Business Day following the end of each calendar month, for the
prior calendar month, explanations of material budget variances;

     (c) no later than the tenth Business Day following the end of each month for the prior
calendar month of the Company, an update of the unaudited financial statements delivered pursuant
to Section 8.03(a) incorporating any comments received from any Member and which shall
include a certification by the appropriate Officer that such financial statements have been
prepared in accordance with GAAP, consistently applied (except as otherwise noted therein) and that
such financial statements present fairly in all material respects the financial condition, results
of operations and cash flows of the Company (and its Subsidiaries) as of the end of and for such
month of the Company; and

     (d) no later than January 31 of each year (or the first Business Day thereafter) for the prior
fiscal year of the Company, the audited financial statements referred to in
Section 8.03(a), certified by the Company Accountant.

     (e) Notwithstanding the above provisions of this Section 8.03, the Company, shall
advise the Members of any financial accounting and reporting issues that arise at any time and
relate to a previously reported quarterly or annual period that the Company determines to be
significant but, at a minimum, issues that would exceed a $5 million impact to the Company’s net
income and which affect previously reported net income of the Company, that require adjustment to
the Company’s financial statements.

     (f) The Company shall deliver to each Member, copies of all financial statements and reports
delivered to any lender by the Company or its Subsidiaries and

22

 

any notices received from any lender
to the Company or its Subsidiaries. In addition, the Company shall prepare at the expense of the
Company and furnish to each Member such additional financial reports and provide such additional
information as any Member may reasonably request.

     (g) Notwithstanding the above provisions of this Section 8.03, if any Member in its
reasonable discretion determines that its own reporting and disclosure requirements (or those of
any of its Affiliates) and/or applicable law or regulations (including the rules of any recognized
stock exchange on which its stock, or the stock of its Parent is listed) require that additional
financial reports, procedures, reviews or internal controls be prepared, conducted or completed or
that any additional information be obtained in respect of the Company or its assets, liabilities or
operations (including without limitation compliance with the Sarbanes-Oxley Act of 2002 or similar
laws, rules or regulations of any applicable jurisdiction), then the other Members will use
commercially reasonable efforts to cooperate with such Member to cause the Company and/or the
Company Accountant to prepare such additional reports, conduct such procedures, cooperate in such
reviews, implement such controls or provide such information (including access to personnel,
systems and books and records); provided, however, the cost to the Company in
connection therewith shall be the sole responsibility of the Member which requires the additional
reports, procedures, reviews, controls or information without any reimbursement or credit to its
Capital Account.

     8.04 Tax Returns and Reports. No later than ninety (90) days prior to the extended due dates thereof of each year for the
prior tax year, the Company shall prepare (or cause to be prepared by the Tax Partner or an
independent accounting firm approved by the Board, which firm may or may not be the same as the
Company Accountant), at Company expense, and submit in draft form to the Tax representative of each
Member for its review and approval, the federal, state and local income tax returns required by
applicable law to be filed by the Company. After all agreed corrections have been made, but no
later than August 15th of each year, the Company shall provide the final tax returns to
the Board and shall thereafter file such tax returns on behalf of the Company promptly after
receiving the approval of the Board. In addition, the Company shall prepare or furnish to the
Members the following information relating to tax matters on or before the dates indicated below:

     (a) no later than June 30th of each year (or the first Business Day thereafter), a
tax statement of the Company’s taxable income covering the prior taxable year, a state allocation
schedule of the Company’s taxable income, a state apportionment factors schedule, and all other
information as will enable each Member to timely prepare its own federal, state and local income
tax returns;

     (b) no later than May 1st of each year (or the first Business Day thereafter), a
report of estimated taxable income for the first three month period ending June 30 and projected
for the December 31 year end; and

23

 

     (c) no later than August 1st of each year (or the first Business Day thereafter), a
report of estimated taxable income for the nine month period ending September 30 and projected for
the December 31 year end, and a list of states in which the Company is doing business.

     (d) no later than November 1st of each year (or the first Business Day thereafter),
a report of estimated taxable income for the first nine month period ending September 30 and
projected for the December 31 year end; and a list of states in which the Company is doing
business.

     (e) no later than January 31st of each year (or the first Business Day thereafter)
for the twelve month period ending December 31 of the previous year: a report of estimated taxable
income; an estimate of payroll by state; an estimate of revenue by state (or legal entity); and an
estimate of the tangible property owned on December 31 by state.

     8.05 State and Local Tax.

     (a) Notwithstanding Section 8.04 (or Appendix B (Tax Provisions)) the Company
shall prepare or cause to be prepared (through the ESI Services Agreement or by a nationally
recognized accounting firm) and pay or cause to be paid, at the Company’s expense, all applicable
sales, use, gross receipts, excise, ad valorem, and property tax returns and any similar taxes
required by applicable law to be filed or paid by the Company and/or Subsidiary of the Company,
(including any state or local income, franchise or other such taxes imposed directly on the Company
or its Subsidiaries). The Company shall have responsibility for all matters for such taxes,
including audit defense, extension of statute of limitations, and settlement of any dispute with
any state or local taxing authority.

     (b) Any state and local tax liabilities, including associated penalties, interest and costs to
defend, of the Company or its Subsidiaries relating to periods prior to the Effective Date shall be
treated as liabilities of the Company and shall be treated in the same manner as specified in this
Section 8.05.

     8.06 Accounting Policies and Company Accountant. All decisions as to accounting principles and tax reporting will be made by the Board (provided,
any Member having the right to appoint Managers may make proposals with regard thereto), in each
case, subject to the other provisions of this Agreement. The Company shall retain as the regular
accountant and auditor of the Company and its Subsidiaries (the “Company Accountant”) a
nationally-recognized accounting firm designated by the Board. The fees and expenses of the
Company Accountant will be a Company expense. The initial Company Accountant will be Deloitte &
Touche LLP and thereafter shall be determined by the Board; provided, that, the
Board shall be reasonably satisfied that there is no conflict between the Company Accountant and
any of the Members.

     8.07 The Budget and Business Plan. The Officers shall prepare and submit to the Board in draft form, for its approval, a proposed
annual operating budget (as

24

 

approved by the Board, the “Annual Budget”) and a proposed
rolling five (5) year strategic business and operating plan (as approved by the Board, the
“Business Plan”), in each case, for the Company and each of its Subsidiaries for each
fiscal year of the Company (consolidated, if appropriate). The Company shall ensure that each
Officer involved in the preparation, revision or update of the Annual Budget and Business Plan
agrees in writing, prior to his or her receipt of any confidential information of the Company, is
subject to confidentiality obligations which are at least as protective of the Company as the
confidentiality provisions set forth in this Agreement. Attached as Exhibit B is the initial
Annual Budget and Business Plan (and deemed approved by the Board). No later than September 30 (or
the first Business Day thereafter) of each year, the proposed Annual Budget and an updated proposed
Business Plan for the subsequent fiscal year of the Company shall be prepared by the Officers and
delivered to the Board for approval. The Annual Budget will need to be monthly and the Business
Plan for subsequent four (4) years can be annual amounts. These plans will need to be updated on a
monthly basis and submitted by the eighth (8th) Business Day of the month.

IX. TRANSFER OF INTERESTS

     9.01 No Transfer.

     (a) Except as expressly permitted by this Agreement, no Member may sell, assign, give,
hypothecate, pledge, encumber or otherwise transfer (“Transfer”) all or any portion of its
Interest, whether directly or indirectly, unless:

     (i) agreed by all the Members in writing; or

     (ii) the Transfer is made to a wholly-owned Subsidiary of a Member’s Parent in
accordance with Section 9.02,

each a “Permitted Transfer” and each transferee of a Permitted Transfer a
“Permitted Transferee”.

     (b) To the fullest extent permitted by law, any Transfer in contravention of this
ARTICLE IX shall be null and void. No Member, without the prior written consent of the
Board, shall resign, retire or withdraw from the Company except (i) as a result of such Member’s
involuntary dissolution or final adjudication as a bankrupt or (ii) in connection with any Transfer
permitted under Section 9.01(a) or 9.06(f). Except as expressly provided or
contemplated in this Agreement and notwithstanding any provision of the Delaware Act to the
contrary, no Member may be removed or expelled from the Company.

     9.02 Transfer to Member Group Members.

     (a) A Member may, from time to time and in their sole discretion, without the consent of any
other Member, sell or assign its Interest in whole or in part to a transferee
that is a wholly-owned Subsidiary of that Member’s Parent (a “Group Member

25

 

Transferee”), provided that the approval of any Governmental Entity is not
required to effect the Transfer and the transfer does not cause a termination of the Company’s
federal income tax return under IRC §708.

     (b) Each Member and its Group Member Transferees shall be treated as one Member for all
purposes of this Agreement. The provisions of this Section 9.02 will not apply to or be
deemed to authorize or permit any collateral transfer of, or grant of a Security Interest in, a
Member’s Interest in the Company, or in any Company Property (which transfer or grant shall be
subject to the other provisions of this Agreement).

     (c) A Group Member Transferee that becomes a Member under this Section 9.02 must
transfer all its Interest to another wholly-owned Subsidiary of the transferor’s Parent or the
transferor’s Parent, immediately before that Member ceases to be a wholly-owned Subsidiary of the
transferor’s Parent.

     (d) Nothing in this ARTICLE IX shall prohibit or otherwise restrict any Affiliate of a
Member that holds an indirect equity interest in such Member from pledging or hypothecating any
assets or equity interest in any Person owning a direct or indirect interest in such Member (other
than the direct equity interests in the Company or in such Member) in connection with any bona fide
secured financing transaction with a third party lender, it being understood that nothing in this
Section 9.02(d) shall permit or grant a Security Interest in any Interests directly or of
the equity interests in any Member directly.

     9.03 Transferees.

     (a) Subject to Section 9.05, no Transfer of all or any part of any Interest shall be
made (i) except in compliance with all Securities Laws or (ii) if such Transfer would violate any
loan commitment or any agreement or any mortgage, deed of trust or other security instrument
encumbering all or any portion of the Business or assets of the Company or its Subsidiaries.
Further, no transferee of all or any portion of any Interest shall be admitted as a substitute
Member unless (1) such Interest is transferred in compliance with the applicable provisions of this
Agreement, (2) if applicable, such Permitted Transferee shall have furnished evidence of
satisfaction of the requirements of Sections 9.02 and 9.04 reasonably satisfactory
to the remaining Members, and (3) such Permitted Transferee shall have executed and delivered to
the Company the documentation described in Section 9.04(b). At the request of the Board or
of the remaining Members, each such Permitted Transferee shall also cause to be delivered to the
Company, at the Permitted Transferee’s sole cost and expense, a favorable opinion of legal counsel
reasonably acceptable to the Company, to the effect that (1) such Permitted Transferee has the
legal right, power and capacity to own the Interest proposed to be transferred, (2) such Transfer
does not violate any provision of any loan commitment or agreement or any mortgage, deed of trust
or other security instrument encumbering all or any portion of the Company Property, (3) such
Permitted Transfer will not cause the termination of the Company for purposes of Section 708 of the
Code or that such
termination will not materially adversely affect the Company or any Member, and (4)

26

 

such
Permitted Transfer does not violate any Securities Laws and will not cause the Company to become
subject to the Investment Company Act of 1940, as amended. As promptly as practicable after the
admission of any Person as a Member, the books and records of the Company shall be changed to
reflect such admission. All reasonable costs and expenses incurred by the Company in connection
with any Permitted Transfer of any Interest and, if applicable, the admission of any Permitted
Transferee as a Member shall be paid by such Permitted Transferee.

     (b) Any Permitted Transfer shall not relieve the transferor of any of its obligations prior to
such Permitted Transfer.

     (c) If any Member acquires all of the Interest of any other Member pursuant to this
ARTICLE IX, the purchasing Member shall (i) obtain the release of the selling Member’s
obligations under any guaranty provided to a financial institution in connection with any
indebtedness incurred by the Company or a Subsidiary or any guaranty, surety or indemnity provided
to any other Person with respect to the Company or the Business, or (ii) assume the selling
Member’s obligations under any guaranty, surety or indemnity referred to in clause (i) and
indemnify the selling Member from and against any and all losses, costs, damages, liabilities or
expenses which it may incur by reason of, or in connection with, such guaranty, surety or
indemnity.

     9.04 Admission of Additional Members.

     (a) No person may be admitted as an additional Member of the Company (in contrast with
admission as a substitute Member in connection with a Permitted Transfer) without the consent of
all of the Members.

     (b) Any additional or substitute Member admitted to the Company shall execute and deliver
documentation in a form satisfactory to the Board accepting and agreeing to be bound by this
Agreement and such other documentation as the Board shall reasonably require in order to effect
such Person’s admission as an additional or substitute Member. The admission of any Person as an
additional or substitute Member shall become effective on the date upon which the name of such
Person is recorded on the books and records of the Company following the consent of the Board to
such admission.

     9.05 Change in Control. Nothing in this Agreement shall prevent or give any Member any consent rights with respect to an
indirect Transfer resulting from a transaction whereby a Person, who did not previously do so,
acquires control of a Member, if that Member is the ultimate Parent entity of a group, or a
Member’s Parent, due to a merger, business combination or similar transaction (whether or not such
Member or Member’s Parent is the surviving entity in such a transaction). For the purposes of this
Section 9.05, “control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and
policies of a Person, whether through the ownership of voting securities or other interests, by
contract or otherwise.

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     9.06 Put Rights upon an Exercise Event.

     (a) Definition of “Exercise Event”. An “Exercise Event” occurs when:

     (i) a Trigger Event has occurred and the Board does not, within thirty (30) days after
the Trigger Event (“Grace Period”): (1) pass a unanimous resolution of all the
Managers overriding the automatic termination provisions set forth in each remaining
Amended and Restated Operating Agreement and (2) notify Enexus in writing of such decision
(“Override Notice”); or

     (ii) a party gives notice of the termination (for any reason whatsoever including
expiration of a license, failure to renew a license or termination with or without cause)
of all Amended and Restated Operating Agreements, in accordance with their express terms,
at the same time.

     For avoidance of doubt, a decision of the Board whether to issue an Override Notice is
not a Significant Matter.

     (b) Recurring Grace Period. To avoid doubt, until an Exercise Event occurs, each time
a Trigger Event occurs, a new Grace Period shall commence during which the Board may determine
whether to issue an Override Notice.

     (c) Put Rights. Upon the occurrence of an Exercise Event, ETR (or its Permitted
Transferee) shall have:

     (i) the right to direct the Company in writing to sell to Enexus (or its Permitted
Transferee) and Enexus (or its Permitted Transferee) shall have an obligation to buy, all
(but not less than all) of the Interest in each of the Company’s Third Party Business
Subsidiaries at the First Exercise Price (the “Third Party Business Put Right”); or

     (ii) the right to sell, and Enexus (or its Permitted Transferee) shall have an
obligation to buy, all (but not less than all) of ETR’s (or its Permitted Transferee’s)
Interest in the Company at the Second Exercise Price (the “JV Put Right”),

     in accordance with the provisions of this Section 9.06.

     (d) Exercise Price. The First Exercise Price or the Second Exercise Price (as the
case may be) shall be calculated in accordance with Section 9.06(e) and in accordance with
the valuation procedures set forth in Exhibit C. The First Exercise Price or the Second Exercise
Price (as the case may be) shall be payable by Enexus by wire transfer in immediately available
funds and shall not be subject to financing.

     (e) Determination of Exercise Price. At any time within ninety (90) days of the date
of the occurrence of the Exercise Event, ETR (or its Permitted Transferee) may

28

 

notify the Company
and Enexus (or its Permitted Transferee) in writing setting out the Exercise Event and stating that
it requires that the First Exercise Price or the Second Exercise Price (as the case may be) be
determined (“Appraisal Notice”), the Members agreeing that either Exercise Price is a price
reflecting fair market value. Upon issue of the Appraisal Notice:

     (i) the Members must promptly meet and seek to agree on the First Exercise Price or
the Second Exercise Price (as the case may be); and

     (ii) if, within thirty (30) days of the date on which the Appraisal Notice is issued
the Members have not agreed on the relevant exercise price (“Discussion Period”),
the Members must appoint an independent third party financial advisor (“Expert”) to
determine the First Exercise Price or the Second Exercise Price (as the case may be)
according to Exhibit C. If the Members cannot agree on the identity of the Expert within
fourteen (14) days of the expiry of the Discussion Period, the Chairman shall select an
internationally recognized accounting firm that has not provided auditing services to any
Member or the JV Group within the last twelve (12) months and is not engaged or reasonably
likely to be engaged to provide auditing services to any Member or the JV Group in the next
three (3) months, to be the Expert. The Expert shall be instructed to:

     (iii) accept submissions from each Member made within fourteen (14) days of the date
of the appointment of the Expert;

     (iv) determine the relevant Exercise Price in accordance with the valuation procedures
set forth in Exhibit C; and

     (v) issue to each Member and the Company a certificate specifying the relevant
exercise price determined by the Expert as soon as practicable and in any event within
thirty (30) days following its appointment.

     The Members agree that the decision of the Expert, as detailed in the certificate provided
under Section 9.06(e)(v), is final and binding on each of them in the absence of fraud or
manifest error. The Members shall bear the costs of the Expert equally and promptly provide all
information and assistance reasonably requested by the Expert.

     (f) Exercise of Put Right. Within sixty (60) days of the date on which the First
Exercise Price or the Second Exercise Price (as the case may be) is determined in accordance with
Section 9.06(e), ETR (or its Permitted Transferee) (the “Right Holder”) may (but is
not required to) exercise the Third Party Business Put Right or the JV Put Right (as the case may
be) by giving written notice to that effect to Enexus (or its Permitted Transferee) (the
“Purchaser”) and the Company (“Notice of Exercise”). A Notice of Exercise is
irrevocable. The sale and purchase must be completed as soon as practicable following the exercise
of the Third Party Business Put Right or the JV Put
Right and, in any event, within 10 Business Days after the receipt of any required regulatory
approvals. The Purchaser shall take whatever steps are necessary or desirable

29

 

to give effect to
the sale and purchase contemplated by the Notice of Exercise, including, among other things,
appointing the Right Holder as its attorney to do all things necessary to give effect to the sale
and purchase contemplated by the Notice of Exercise.

     (g) Distribution of First Exercise Price. In the event that the Right Holder
exercises the Third Party Business Put Right, each Member shall be entitled to receive a
distribution equal to the First Exercise Price received by the Company on completion of the sale
and purchase contemplated by the Notice of Exercise in proportion to their Percentage Interests as
of the date the First Exercise Price is received by the Company. The amount of the First Exercise
Price which the Members shall be entitled to (“Distributable First Exercise Price”) will be
the balance (if any) following utilization thereof for any costs incurred directly as a result of
the sale and purchase and which are the responsibility of the Company (or its Subsidiary),
including internal de-mobilization or incremental, unplanned severance costs and any transaction
costs. The Distributable First Exercise Price must be distributed to the Members as soon as
practicable after the First Exercise Price has been received and the Distributable First Exercise
Price determined by the Board, in accordance with Section 7.03. The Members and the
Company shall take all steps necessary to distribute the Distributable First Exercise Price as soon
as practicable after the First Exercise Price has been received by the Company.

     (h) Closing. At the closing of the sale and purchase, the Right Holder or the Company
(as the case may be) must deliver to the Purchaser:

     (i) the documentation described in Section 9.04(b); and

     (ii) if the Third Party Business Put Right is exercised, a written resignation from
each manager or director of each Third Party Business Subsidiary; or

     (iii) if the JV Put Right is exercised, a written resignation from each Nominee
Manager of the Right Holder.

     (i) Lapse of Put Rights. Only one (but not both) of the JV Put Right and the Third
Party Business Put Right may be exercised upon the occurrence of an Exercise Event. Accordingly,
if:

     (i) the Right Holder does not exercise the JV Put Right or the Third Party Business
Put Right within the time specified in Section 9.06(f), the JV Put Right and the
Third Party Business Put Right will lapse and be no longer capable of exercise; or

     (ii) the Right Holder exercises its rights in accordance with Section 9.06(f),
the JV Put Right or the Third Party Business Put Right
(whichever one is the right that is not exercised by the Right Holder) will
lapse and be no longer capable of exercise.

30

 

     (j) Member Action. Each Member agrees that if a resolution of the Company is required
under applicable law or this Agreement to give effect to (or cause the Company to give effect to)
any of the transactions contemplated by this Section 9.06, the Member shall attend any
meeting that is convened to consider any such resolution and vote in favor of such resolution.

X. EXCULPATION AND INDEMNIFICATION

     10.01 Exculpation. Neither any Member (and no Officer, Manager, general or limited partner of any member,
shareholder, member or other holder of an equity interest of any Member or officer, director, agent
or employee of any of the foregoing) nor any of their Affiliates, shall be liable to the Company,
any of its Subsidiaries or to any other Member for monetary damages for any losses, claims, damages
or liabilities arising from any act or omission performed or omitted by it and arising out of or in
connection with this Agreement or the Business, including (to the fullest extent permitted by
applicable law) any action or omission constituting a breach of any fiduciary duty;
provided, however, such act or omission was (a) within the scope of authority
granted to such Person, (b) not attributable in whole or in part to such Member’s or Person’s
criminal misconduct, fraud, bad faith, willful or intentional misconduct or gross negligence,
(c) was not attributable to a breach of any express provision of this Agreement, and (d) was taken
in good faith, and was reasonably believed to be in the best interest of the Company or the
applicable Subsidiary. THE FOREGOING EXCULPATION PROVISIONS OF THIS SECTION 10.01
SPECIFICALLY INCLUDE LOSSES, CLAIMS, DAMAGES AND LIABILITIES ARISING FROM ANY ACT OR FAILURE TO ACT
WHICH IS ATTRIBUTABLE, IN WHOLE OR IN PART, TO THE ORDINARY NEGLIGENCE OF THE EXCULPATED PERSON.
Except as provided in Section 4.01, no Member (and no Manager, general or limited partner
of any Member, shareholder, member or other holder of an equity interest in such Member or officer,
director, agent or employee of any of the foregoing) or any of their Affiliates shall be personally
liable to the Company or any other Member in connection with this Agreement or the Business
(including for the performance of any such Member’s obligations thereunder), but the foregoing
shall not relieve any partner or member of any Member from its obligations to such Member. The
provisions of this Section 10.01 are intended solely for the benefit of, and shall be
enforceable by, the respective indemnitees. The liability of the Managers to the Company or any
Member shall be governed by the provisions of Sections 7.01 and 7.02.

     10.02 Indemnification.

     (a) The Company and its Subsidiaries shall, to the fullest extent permitted by applicable law,
indemnify, defend and hold harmless each Member, each Manager (or
alternate) of the Board, the Officers and each general or limited partner of any Member, each
shareholder, member or other holder of any equity interest in such Member and any officer,
director, agent or employee of any of the foregoing (collectively, the “Indemnitees”),
against any losses, claims, damages or liabilities to which such Indemnitee may become subject in
connection with any matter arising out of or incidental

31

 

to any act performed or omitted to be
performed by any such Indemnitee in connection with this Agreement or the Business, including any
action or omission constituting a breach of any fiduciary duty; provided, however,
that such act or omission was (i) within the scope of authority granted to such Indemnitee and not
attributable in whole or in part to such Indemnitee’s criminal misconduct, fraud, bad faith,
willful or intentional misconduct or gross negligence, (ii) not attributable to a breach of any
express provision of this Agreement, and (iii) taken in good faith and reasonably believed to be in
the best interest of the Company or the applicable Subsidiary. THE FOREGOING INDEMNIFICATION
PROVISIONS OF THIS SECTION 10.02(a) SPECIFICALLY INCLUDE LOSSES, CLAIMS, DAMAGES AND
LIABILITIES TO WHICH SUCH INDEMNITEE MAY BECOME SUBJECT AS A RESULT OF ANY ACT OR FAILURE TO ACT BY
SUCH INDEMNITEE WHICH IS ATTRIBUTABLE, IN WHOLE OR IN PART, TO THE ORDINARY NEGLIGENCE OF ANY
INDEMNITEE OR ANY OF ITS AFFILIATES. If any Indemnitee becomes involved in any capacity in any
action, proceeding or investigation in connection with any matter arising out of or in connection
with this Agreement or the Business, the Company shall reimburse such Indemnitee for its reasonable
legal and other reasonable out-of-pocket expenses (including the cost of any investigation and
preparation) as they are incurred in connection therewith, provided that such Indemnitee shall
promptly repay to the Company the amount of any such reimbursed expenses paid to it if it shall
ultimately be determined that such Indemnitee was not entitled to be indemnified by the Company in
connection with such action, proceeding or investigation. If for any reason (other than criminal
misconduct, fraud, bad faith, intentional or willful misconduct or gross negligence of such
Indemnitee) the foregoing indemnification is unavailable to such Indemnitee, or insufficient to
hold it harmless, then the Company shall contribute to the amount paid or payable by such
Indemnitee as a result of such loss, claim, damage, liability or expense in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one hand and such
Indemnitee on the other hand or, if such allocation is not permitted by applicable law, to reflect
not only the relative benefits referred to above but also any other relevant equitable
considerations. Any indemnity under this Section 10.02 shall be paid solely out of and to
the extent of Company assets and shall not be a personal obligation of any Member (or Manager or
Officer) and in no event will any Member be required, or permitted without the consent of all of
the Members, to contribute additional capital under ARTICLE IV to enable the Company to
satisfy any obligation under this Section 10.02.

     (b) The provisions of this Section 10.02 shall survive for a period of four years from
the date of dissolution of the Company, provided that, (i) if at the end of such period there are
any judicial, arbitration or mediation actions or proceedings or any investigations then pending,
any Indemnitee may so notify the Company and the other
Members at such time (which notice shall include a brief description of each such action,
proceeding or investigation and the liabilities asserted therein) and the provisions of this
Section 10.02 shall survive with respect to each such action, proceeding or investigation
set forth in such notice (or any related action, proceeding or investigation based upon the same or
similar claim) until such date that such action, proceeding or investigation is

32

 

finally resolved,
and (ii) the obligations of the Company under this Section 10.02 shall be satisfied solely
out of Company assets.

     (c) Notwithstanding anything to the contrary contained in this Agreement, the obligations of
the Company under this Section 10.02 shall (i) be in addition to any liability which the
Company may otherwise have and (ii) inure to the benefit of such Indemnitee, its Affiliates and
their respective members, partners, shareholders or other beneficial owners and their directors,
officers, employees, agents and Affiliates and any successors, assigns, heirs and personal
representatives of such Persons.

     (d) Except as may otherwise be specifically provided herein or in any other agreement to the
contrary, in no event shall any Manager, general or limited partner of any Member, shareholder,
member or other holder of any equity interest in any Member or any officer, director, agent,
representative or employee of any of the foregoing be liable for any obligations of any Member.

XI. DISSOLUTION AND TERMINATION

     11.01 Dissolution. The Company shall be dissolved and the Business wound up upon the earliest to occur of any of
the following events:

     (a) the sale, condemnation or other disposition of all Company Property and the receipt of all
cash consideration therefor;

     (b) subject to Section 11.03, the written determination of the Members to dissolve the
Company;

     (c) the filing by the last remaining Member, or consenting by answer or otherwise to the
filing against such Member, of a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation (in connection with a bankruptcy or insolvency proceeding)
or to take advantage of any bankruptcy or insolvency law of any jurisdiction; the general
assignment by such Member for the benefit of such Member’s creditors, consenting to the appointment
of a custodian, receiver, trustee or other officer with similar powers of a general partner or of
any material part of such Member’s property;

     (d) the appointment by a court or governmental authority of competent jurisdiction, without
consent by the last remaining Member, of a custodian, receiver, trustee or other officer with
similar powers with respect to such Member, or if any order
for relief shall be entered in bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding up or liquidation (in connection with a bankruptcy or insolvency
proceeding) of such Member, or if any petition for such relief shall be filed against such Member,
and such petition or order shall not be dismissed within ninety (90) calendar days;

33

 

     (e) the termination of the legal existence of the last remaining Member of the Company or the
occurrence of any other event which terminates the continued membership of the last remaining
Member of the Company in the Company unless the Company is continued without dissolution in a
manner permitted by this Agreement or the Delaware Act; or

     (f) the entry of a decree of judicial dissolution under Section 18-802 of the Delaware Act.

Without limitation on, but subject to, the other provisions in this Agreement, neither the
assignment of all or any part of a Member’s Interest permitted hereunder, nor the death, insanity,
bankruptcy, insolvency, retirement, resignation or dissolution of a Member will by itself cause the
dissolution of the Company. Except as otherwise specifically provided in this Agreement, each
Member agrees that, without the consent of the other Members, no Member may, to the fullest extent
permitted by law, withdraw from or cause a voluntary dissolution of the Company or any of its
Subsidiaries. If any Member withdraws from or causes a voluntary dissolution of the Company or any
of its Subsidiaries in contravention of this Agreement, such withdrawal or the causing of a
voluntary dissolution shall not affect such Member’s liability for obligations of the Company or
any of its Subsidiaries.

     11.02 Termination. In all cases of dissolution of the Company, the Business shall be wound up and the Company
terminated as promptly as practicable thereafter, and each of the following shall be accomplished:

     (a) The Liquidating Member, in conjunction with the Company Accountant, shall cause to be
prepared a statement setting forth the assets and liabilities of the Company and all of its
Subsidiaries as of the date of dissolution, a copy of which statement shall be furnished to all of
the Members within thirty (30) days of such date of dissolution or sooner if reasonably practical.

     (b) The Company Property shall be liquidated by the Liquidating Member as promptly as
possible, but in an orderly and businesslike and commercially reasonable manner and subject to a
liquidating plan approved by the Board. The Liquidating Member may distribute Company Property in
kind, only with the consent of the Board.

     (c) The proceeds of sale and all other assets of the Company shall be applied and distributed
as follows and in the following order of priority:

     (i) To the satisfaction (whether by payment or the making of reasonable provision for
payment thereof) of (A) the debts and liabilities of the Company and all its Subsidiaries,
including debts and liabilities to third parties, and debts and liabilities to any Member
so long as such debts and liabilities were advanced or incurred in accordance with the
express terms and provisions of this Agreement, (B) the expenses of liquidation, and (C) to
the setting up of any

34

 

reserves which the Liquidating Member and the Board shall determine
to be reasonably necessary for contingent, conditional or unmatured liabilities or
obligations of the Company or any of its Subsidiaries arising out of or in connection with
the Company or any of its Subsidiaries. Such reserves may, in the discretion of the
Liquidating Member, be paid over to a national bank or national title company selected by
it and authorized to conduct business as an escrow agent to be held by such bank or title
company as escrow agent for the purposes of disbursing such reserves to satisfy the
liabilities and obligations described above, and at the expiration of such period as the
Liquidating Member may reasonably deem advisable, distributing any remaining balance as
provided in Section 11.02(c)(ii); provided, however, that, to the
extent that it shall have been necessary, by reason of applicable law or regulation, to
create any reserves prior to any and all distributions which would otherwise have been made
under this Section 11.02(c)(i) and, by reason thereof, a distribution under this
Section 11.02(c)(i) has not been made, then any balance remaining shall first be
distributed pursuant to this Section 11.02(c)(i).

     (ii) The balance, if any, to the Members in accordance with Section 6.03.

     11.03 Member’s Operations. If the Company is dissolved in accordance with Section 11.01(b), and, at the time of the
Members’ determination to dissolve the Company ETR (or its Permitted Transferee) and/or Enexus (or
its Permitted Transferee) is a Member of the Company, the Members agree prior to making such
determination, to cooperate and negotiate in good faith such other arrangements as may be necessary
to ensure that the operation by ETR and/or Enexus (or their respective Subsidiaries) of nuclear
power plant facilities owned by them (or their respective Subsidiaries) is not materially adversely
affected by the dissolution and termination of the Company.

     11.04 Liquidating Member. The Liquidating Member is hereby irrevocably appointed as the true and lawful attorney in the
name, place and stead of each of the Members, such appointment being coupled with an interest, to
make, execute, sign, acknowledge and file with respect to the Company and all of its Subsidiaries
all papers which shall be necessary or desirable to
effect the dissolution and termination of the Company and each of its Subsidiaries in accordance
with the provisions of this ARTICLE XI. Notwithstanding the foregoing, each Member, upon
the request of the Liquidating Member or the Board, shall promptly execute, acknowledge and deliver
all such documents, certificates and other instruments as the Liquidating Member or the Board shall
reasonably request to effectuate the proper dissolution and termination of the Company, including
the winding up of the business of the Company and each of its Subsidiaries.

XII. MISCELLANEOUS

     12.01 Covenants, Representations and Warranties of the Members.

35

 

     Each Member represents and warrants to each other Member as follows:

     (a) 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 Member,
that this Agreement constitutes a legal, valid and binding obligation of each such Member and that
the execution, delivery and performance of this Agreement by such Member 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 Member.

     (b) Each Member is acquiring its Interest in the Company for investment, solely for its own
account, with the intention of holding such Interest for investment and not with a view to, or for
resale in connection with, any distribution or public offering or resale of any portion of such
Interest within the meaning of the Securities Act of 1933 (the “Securities Act”) or any
other applicable federal or state securities law, rule or regulation (“Securities Law”).

     (c) Each Member acknowledges that it is aware that its Interest in the Company has not been
registered under the Securities Act or under any other Securities Law in reliance upon exemptions
contained therein. Each Member understands and acknowledges that its representations and
warranties contained herein are being relied upon by the Company, the other Members and the
constituent owners of such other Members as the basis for exemption of the issuance of Interest in
the Company from registration requirements of the Securities Act and other Securities Laws. Each
Member acknowledges that the Company will not and has no obligation to register any Interest in the
Company under the Securities Act or other Securities Laws.

     12.02 Further Assurances. Each Member agrees to execute, acknowledge, deliver, file, record and publish such further
instruments and documents, and do all such other acts and things as may be required by law, or as
may be required to carry out the intent and purposes of this Agreement; provided the same
does not subject any Member to additional liability and
the same is consistent with and does not vary the terms and conditions of this Agreement without
the consent of the affected Member.

     12.03 Notices. All notices, requests, claims, demands and other communications under this Agreement 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 12.03):

36

 

	 	 	 
	If to ETR, to:

	 	                    
	 

	 	Attn:                     
	 

	 	Facsimile No.:                     
	 
	 	 
	With a copy to:

	 	                    
	 

	 	Attn:                     
	 

	 	Facsimile No.:                     
	 
	 	 
	If to Enexus, to:

	 	                    
	 

	 	Attn:                     
	 

	 	Facsimile No.:                     
	 
	 	 
	With a copy to:

	 	                    
	 

	 	Attn:                     
	 

	 	Facsimile No.:                     
	 
	 	 
	If to the Company, to:

	 	                    
	 

	 	Attn:                     
	 

	 	Facsimile No.:                     
	 
	 	 
	With a copy to:

	 	                    
	 

	 	Attn:                     
	 

	 	Facsimile No.:                     

Any Member may designate another addressee (and/or change its address) for Notices hereunder by a
Notice given pursuant to this Section 12.03. A Notice sent in compliance with the
provisions of this Section 12.03 shall be deemed given on the date of receipt except if
delivery is refused, such Notice shall be deemed given on the date delivery is first attempted, and
except that, if delivery is not made on a Business Day during
business hours (at the place of receipt), such Notice shall be deemed given on the next Business
Day.

     12.04 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.

     12.05 Attorney Fees. If the Company or any Member obtains a judgment against any Member by reason of the breach of
this Agreement or the failure to comply with the terms hereof, it is the intent of the parties that
reasonable attorneys’ fees and costs as fixed by the court shall be included in such judgment.
Specifically, however, reasonable attorneys’ fees shall mean actual attorneys’ fees incurred, as
opposed to statutory attorneys’ fees determined or calculated as a percentage of the amount owed.

37

 

     12.06  Titles 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.

     12.07 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.

     12.08 Successors and Assigns. This Agreement shall be binding upon the parties hereto and their respective executors,
administrators, legal representatives, heirs, successors and permitted assigns, and shall inure to
the benefit of the parties hereto and, except as otherwise provided herein, their respective
executors, administrators, legal representatives, heirs, successors and assigns. This Agreement
may not be assigned by the parties hereto, except in connection with a Transfer of a Member’s
Interest in accordance with the provisions of ARTICLE IX hereof.

     12.09 Extension Not a Waiver. No delay or omission in the exercise of any power, remedy or right herein provided or otherwise
available to a Member or the Company shall impair or affect the right of such Member or the Company
thereafter to exercise the same. Any extension of time or other indulgence granted to a Member
hereunder shall not otherwise alter or affect any power,
remedy or right of any other Member or of the Company, or the obligations of the Member to whom
such extension or indulgence is granted.

     12.10 Creditors Not Benefited. Notwithstanding any other provision of this Agreement to the contrary, nothing contained in this
Agreement will, or is intended or will be deemed to, benefit any creditor of the Company, of any of
its Subsidiaries or of any Member, and no creditor of the Company, of any of its Subsidiaries or of
any Member will have any rights, interests or claims hereunder, be entitled to any benefits
hereunder or be entitled to require the Company, the Board, any of its Subsidiaries or any Members
to solicit or accept, or the Members to make, any loan, advance or additional capital contribution
to or for the benefit of the Company or any of its Subsidiaries or to enforce any right which the
Company, any of its Subsidiaries or any Member may have against any other Member, or which any
Member may have against the Company or any of its Subsidiaries, under this Agreement or otherwise.

     12.11 Recalculation of Interest. If any applicable law is ever judicially interpreted so as to deem any distribution,
contribution, payment or other amount received by any Member or the Company under this Agreement as
interest and so as to render any such amount in excess of the maximum rate or amount of interest
permitted by applicable law, then it is the express intent of the Members and the Company that all
amounts in excess of the highest lawful rate or amount theretofore collected be credited against
any other distributions, contributions, payments or other amounts to be paid by the recipient of
the excess amount or refunded to the appropriate Person, and the provisions of this Agreement
immediately be deemed reformed, without the necessity of the execution of any new document, so as
to comply with the applicable law, but so as to

38

 

permit the payment of the fullest amount otherwise
required hereunder. All sums paid or agreed to be paid that are judicially determined to be
interest shall, to the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the term of such obligation so that the rate or amount of interest on account of
such obligation does not exceed the maximum rate or amount of interest permitted under applicable
law.

     12.12 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;
provided, however, that the limitation of liability and exculpation provisions of
this Agreement are an integral part hereof.

     12.13 Complete Agreement. This Agreement, including the Exhibits and Appendices 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 Appendix, the terms and conditions of such Appendix shall control.

     12.14 Amendments and Consents. This Agreement may be amended, and any provision hereof may be waived, by written instrument
executed by all of the Members.

     12.15 Confidentiality.

     (a) The identity of any person with whom the Company may be holding discussions with respect
to any investment, acquisition, disposition or other material transaction, and all other business,
financial or other information relating directly to the conduct of the Business and affairs of the
Company or the relative or absolute rights or interests of any of the Members the disclosure of
which could reasonably be expected to have a material adverse effect on the Company, any of its
Subsidiaries, the Members or their respective members or shareholders (collectively, the
“Confidential Information”) that has not been publicly disclosed pursuant to authorization
by the Board (or is not, at the relevant time, in the public domain by or pursuant to disclosures
which are themselves a violation of the provisions of this Section 12.15) is confidential
and proprietary information of the Company, the disclosure of which would cause irreparable harm to
the Company and the Members. Accordingly, except as permitted in this Section 12.15, each
Member agrees that it will not and will direct its partners, members, shareholders, partners,
managers, directors, officers, agents, advisors and Affiliates not to, disclose to any Person any
Confidential Information or confirm any statement made by third Persons regarding Confidential
Information until the Company has publicly disclosed the Confidential Information pursuant to
authorization by the Board and has notified each Member that it has done so, or such information is
otherwise then in the public domain (by means of or through disclosures which themselves are not a
violation of this Section 12.15); provided, however, that any Member (or
its Affiliates) may disclose such Confidential Information (i) if required by law, the requirement
of any Governmental Entity having jurisdiction over the Business of the Company or its

39

 

Subsidiaries, or rule of any stock exchange (it being specifically understood and agreed that
anything set forth in a registration statement or any other document filed pursuant to law will be
deemed required by law and provided that before making any disclosure of confidential information
required by law, the requirement of any Governmental Entity or rule of any stock exchange, the
disclosing Member will, to the extent practicable, notify the other Members and provide them with a
copy of the proposed disclosure and an opportunity to comment thereon before the disclosure is
made), (ii) in connection with any proposed or actual Transfer of Interest or sale of any Company
Property permitted hereunder; provided, that the transferee or acquirer is bound by confidentiality
provisions that are no less restrictive than this Section 12.15, (iii) in connection with
any proposed
or actual Transfer of any interest of the direct or indirect beneficial owners of any Members
permitted hereunder; provided, that the transferee or acquirer is bound by confidentiality
provisions that are no less restrictive than this Section 12.15, (iv) to the extent
reasonably necessary in connection with any other transaction authorized pursuant to the terms of
this Agreement; provided, that the counterparty to such transaction is bound by
confidentiality provisions that are no less restrictive than this Section 12.15, (v) to its
managers, directors, officers and employees, including the directors, officers and employees of any
partner, member, shareholder or other beneficial owner of any Member and who is informed of the
obligations under this Section 12.15, (vi) to its accountants, attorneys or other advisors
who have a need to know such Confidential Information in connection with the Member’s ownership of
its Interest and who is informed of the obligations under this Section 12.15, (vii) in
connection with required or routine reporting to its potential or current investors, members,
partners and lenders or other financial or capital sources, (viii) in connection with any proposed
merger, sale of assets, business combination, financing, or other similar transaction in which any
Member or any of its Affiliates may become a party; provided, that the counterparties to
such transaction or potential transaction are bound by confidentiality provisions that are no less
restrictive than this Section 12.15, or (ix) reasonably necessary for it (or its
Affiliates) to perform any of its (or any of its Affiliate’s) duties or obligations hereunder, the
Separation Agreement or any agreement contemplated by this Agreement or the Separation Agreement.

     (b) Subject to the provisions of Section 12.15(a), each Member agrees not to disclose
any Confidential Information to any Person (other than a Person agreeing to maintain all
Confidential Information in strict confidence or a judge, magistrate or referee in any action, suit
or proceeding relating to or arising out of this Agreement or otherwise), and to keep confidential
all documents (including responses to discovery requests) containing any Confidential Information.
Each Member hereby consents in advance to any motion for any protective order brought by any other
Member represented as being intended by the movant to implement the purposes of this Section
12.15, provided that, if a Member receives a request to disclose any Confidential Information
under the terms of a valid and effective order issued by a court or governmental agency and the
order was not sought by or on behalf of or consented to by such Member, then such Member may
disclose the Confidential Information to the extent required if the Member as promptly as
practicable (i) notifies each of the other Members of the existence, terms and

40

 

circumstances of the
order, (ii) consults in good faith with each of the other Members on the advisability of taking
legally available steps to resist or to narrow the order, and (iii) if disclosure of the
Confidential Information is required, exercises commercially reasonable efforts to obtain a
protective order or other reliable assurance that confidential treatment will be accorded to the
portion of the disclosed Confidential Information that any other Member designates. The cost
(including attorneys’ fees and expenses) of obtaining a protective order covering Confidential
Information designated by such other Member will be borne by the Company.

     (c) The covenants contained in this Section 12.15 will survive the Transfer of the
Interest of any Member and the termination of the Company.

     12.16 Venue. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with this Agreement or the transactions contemplated hereby or
thereby shall be brought in any court in New Castle County, Delaware and each Member hereby
consents to the exclusive jurisdiction of any court in New Castle County, Delaware (and of the
appropriate appellate courts there from) in any suit, action or proceeding, and irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an inconvenient forum.
Each Member hereby waives the right to commence an action, suit or proceeding seeking to enforce
any provisions of, or based on any matter arising out of or in connection with this Agreement or
the transactions contemplated hereby or thereby in any court outside of New Castle County,
Delaware. Any judgment in any such suit, action or proceeding rendered by such court sitting in
New Castle County, Delaware, may be entered, filed, registered and enforced by suit upon such
judgment in any court of competent jurisdiction (within or outside of New Castle County, Delaware)
or as otherwise permitted by applicable law. Process in any suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the jurisdiction of any court.
Without limiting the foregoing, each party agrees that service of process on such party as
provided in Section 12.03 shall be deemed effective service of process on such party.

     12.17 WAIVER OF JURY TRIAL. SUBJECT TO SECTION 12.24, EACH OF THE MEMBERS 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 MEMBERS HEREBY (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS 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

41

 

CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.17.

     12.18 Member Group Actions; Joint Liability. Except as otherwise specifically provided in this Agreement, any consent, approval or any other
action to be given or taken by a Member Group or any two Member Groups together, pursuant to any
provision of this Agreement, may be given or taken by a Majority-in-Interest of the Members of such
Member Group or Member Groups, and the consent, approval or other action of such
Majority-in-Interest shall be binding upon all the Members of the applicable Member Group or Member
Groups, and to the extent any item or matter is required to or may be allocated among the Members
of any Member Group or Member Groups, unless otherwise specifically provided herein to the
contrary, such item or matter shall, subject to the provisions of Section 3.03(b), be
allocated among the Members of such Member Group or Member Groups as they shall unanimously agree,
and should they fail to unanimously agree, then in accordance with their relative Percentage
Interests. The obligations of the Members of each Member Group under this Agreement shall be joint
and several.

     12.19 Extension for Non-Business Days. Notwithstanding anything herein to the contrary, if the date for performance of any obligation
under this Agreement falls on a Saturday, Sunday or federal holiday, performance shall be deemed to
be required on the first day thereafter which is not a Saturday, Sunday or federal holiday.

     12.20 Limitation on Damages. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NO MEMBERS SHALL BE LIABLE FOR
SPECIAL, PUNITIVE, EXEMPLARY, INCIDENTAL, CONSEQUENTIAL, OR INDIRECT DAMAGES OR LOST PROFITS,
WHETHER BASED ON CONTRACT, TORT, STRICT LIABILITY, OR OTHER LAW OR OTHERWISE AND WHETHER OR NOT
ARISING FROM ANY OTHER MEMBER’S SOLE, JOINT, OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, OR OTHER
FAULT.

     12.21 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 12.22,
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.

     12.22 Effectiveness. This Agreement shall become effective on and from the Effective Date and prior thereto shall be
of no force or effect.

     12.23 No Third Party Beneficiaries. Without limiting the operation and effect of Section 12.10, except where an indemnity,
promise or obligation is expressly stated to be for the benefit of a third party, this Agreement is
solely for the benefit of the Parties and

42

 

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.

     12.24 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, (ii) provisional or temporary injunctive relief in
accordance therewith in any court in New Castle County, Delaware (“Delaware Court”), and
(iii) enforcement of any such award of 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.

     12.25 Enforceability of Power of Attorney. If it is subsequently determined that any power of attorney provision in this Agreement is
unenforceable, the Parties hereto agree to execute, acknowledge, deliver, file, record and publish
such other instruments and documents (including separate powers of attorney), and do all such other
acts and things as may be required by law, or as may be required to carry out the intent and
purposes of such power of attorney provisions.

[Signature Page Follows]

43

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth
in the introductory paragraph hereof.

	 	 	 	 	 	 	 
	 	 	Entergy Corporation, a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	 	By:  	 	 	 
	 

	 	 	Name:  
	 

	 	 
	 

	 	 	Title:  
	 

	 	 

	 

	 	 
	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	Enexus Energy Corporation, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	 	By:  	 	 	 
	 

	 	 	Name:  
	 

	 	 
	 

	 	 	Title:  
	 

	 	 

	 

	 	 
	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	EquaGen LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	 	By:  	 	 	 
	 

	 	 	Name:  
	 

	 	 
	 

	 	 	Title:  
	 

	 	 

	 

	 	 
	 	 

	 	 

44

 

Appendix A

Defined Terms

     As used in this Agreement, the following terms (including the singular and plural thereof)
have the meanings set forth below:

     (1) “AAA” has the meaning given to it in Section 7.10(c).

     (2) “Affiliate” means an “Affiliate” of, or a Person
“Affiliated” with a specific Person is a Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under common
control with, the Person specified. For the purposes of this definition, “control,”
(including the terms “controlling”, “controlled by” and “under common control with”) means
the possession, direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting securities or
other interests, by contract or otherwise.

     (3) “Agreement” means this Limited Liability Company Agreement, including
any exhibits or schedules attached hereto, as amended and in effect from time to time
pursuant to the terms of this Limited Liability Company Agreement.

     (4) “Amended and Restated Operating Agreement” has the meaning given to it
in the Formation Agreement.

     (5) “Annual Budget” has the meaning given to it in Section 8.07.

     (6) “Appraisal Notice” has the meaning given to it in Section
9.06(e).

     (7) “Board” has the meaning given to it in Section 7.01(a).

     (8) “Business” means the business of the Company and its Subsidiaries, from
time to time.

     (9) “Business Days” means any day during a calendar year which is not a
Saturday, Sunday or a day on which federal banks are required or permitted to be closed in
the United States.

     (10) “Business Development Services” means services provided by the Company
to assist the Members in the identification, research, analysis, and development of
nuclear-related businesses and products, including potential acquisitions, the development
of new nuclear projects and other

1

 

activities, but Business Development Services shall not include advisory services
relating to (i) the ongoing and ordinary course of business operations of each Member,
(ii) services provided by the Company to a Member under any existing service or operating
contract, and (iii) legal, accounting and financial advisory services.

     (11) “Business Development Services Contract” means any contract for Business
Development Services.

     (12) “Business Plan” has the meaning given to it in Section 8.07.

     (13) “Capital Account” has the meaning given to it in Appendix B.

     (14) “Capital Contributions” means, with respect to any Member, any
contribution to the capital of the Company made by such Member pursuant to
Section 4.01, including those specifically designated as Class A Capital
Contributions pursuant to Section 4.02).

     (15) “Certificate of Formation” has the meaning given to it in the Recitals
to this Agreement.

     (16) “Certificate of Merger” has the meaning given to it in the Recitals to
this Agreement.

     (17) “Chairman” has the meaning given to it in Section 7.02(d).

     (18) “Class A Capital Contribution” means, with respect to any Member, any
Capital Contribution made by such Member pursuant to Section 4.02 and treated as a
Class A Capital Contribution pursuant to Section 4.02(c), including both the
Non-Contributing Member’s share of such Capital Contribution.

     (19) “Code” means the Internal Revenue Code of 1986, as amended. Any
reference herein to any specific section or sections of the Code shall be deemed to
include a reference to any corresponding provision of future laws.

     (20) “Company” means the Delaware limited liability company formed pursuant
to the Certificate of Formation and operated pursuant to the terms of this Agreement.

     (21) “Company Accountant” has the meaning given to it in
Section 8.06.

2

 

     (22) “Company Property” means any and all assets of the Company and any
Subsidiary of the Company owned in whole or in part by the Company.

     (23) “Confidential Information” has the meaning given to it in
Section 12.15(a).

     (24) “Contract” means any agreement whether oral or in writing to which the
Company or its Subsidiary is a party.

     (25) “Contract Fee” has the meaning given to it in Section 6.02(b).

     (26) “Contributing Member” has the meaning given to it in
Section 4.02(a).

     (27) “Corporate Group” means a group of related entities comprised of a
Parent and its Subsidiaries.

     (28) “Deadlock Matter” has the meaning given to it in
Section 7.10(a).

     (29) “Deadlock Notice” has the meaning given to it in
Section 7.10(a).

     (30) “Delaware Act” means the Delaware Limited Liability Company Act, as
amended from time to time, and any successor to such statute.

     (31) “Discussion Period” has the meaning given to it in Section
9.06(e).

     (32) “Distributable First Exercise Price” has the meaning given to it in
Section 9.06(g).

     (33) “Distributable Contract Fee Amount” has the meaning given to it in
Section 6.02(b).

     (34) “Effective Date” means the Closing Date, as that term is defined in the
Formation Agreement.

     (35) “Emergency Advance” has the meaning given to it in Section
4.02(a).

     (36) “Emergency Loan” has the meaning given to it in Section
4.02(a).

     (37) “ENI” has the meaning given to it in the Recitals.

3

 

     (38) “ESI Services Agreement” has the meaning given to it in the Formation
Agreement.

     (39) “ETR” has the meaning given to it in the Recitals.

     (40) “ETR Services Agreements” has the meaning given to it in the Formation
Agreement.

     (41) “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time.

     (42) “Exercise Event” has the meaning given to it in Section
9.06(a).

     (43) “Expert” has the meaning given to it in Section 9.06(e).

     (44) “FERC” means the Federal Energy Regulatory Commission.

     (45) “First Exercise Price” means the price agreed by the Members in
accordance with Section 9.06(e)(i), or in the absence of such agreement, the price
determined by the Expert in accordance with Item 1 of Exhibit C.

     (46) “Formation Agreement” means that certain Joint Venture Formation
Agreement by and among ETR, Enexus and the Company, as amended from time-to-time as
provided for therein.

     (47) “GAAP” has the meaning given to it in Section 1.02(ii) of this
Agreement.

     (48) “Governmental Entity” means 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.

     (49) “Grace Period” has the meaning given to it in Section 9.06(a).

     (50) “Gross Asset Value” has the meaning given to it in Appendix B.

     (51) “Group Member Transferee” has the meaning given to it in Section
9.02(a).

4

 

     (52) “Indebtedness” means any indebtedness of the Company or a JV Group
member, including (a) borrowed money of the Company or a JV Group member, (b) any
obligations evidenced by bonds, debentures, notes or other similar instruments, (c) any
obligations to pay the deferred purchase price of property or services, or (d) any
guaranty of any of the foregoing; other than, in each case, trade accounts payable and
other current Liabilities (other than Liabilities for borrowed money) arising in the
ordinary course of business.

     (53) “Indemnitees” has the meaning given to it in Section 10.02(a).

     (54) “Interest” means, with respect to any Member at any time, the common
membership interest of such Member in the Company at such time, including the right of
such Member to any and all of the benefits to which such Member may be entitled as
provided in this Agreement, together with the obligations of such Member to comply with
all of the terms and provisions of this Agreement.

     (55) “Joint Venture” has the meaning given to it in the Formation Agreement.

     (56) “JV Group” means the Company and its Subsidiaries.

     (57) “JV Put Right” has the meaning given to it in Section 9.06(c).

     (58) “Key Contract” means each of the ETR Services Agreements and each of
the Amended and Restated Operating Agreements..

     (59) “Liability” has the meaning given to it in the Formation Agreement.

     (60) “Liquidating Member” means the Member designated as such by the Board
from time to time; provided, however, that any Member that causes the
dissolution of the Company under Section 11.01, (d), (e) or
(f) shall not serve as the Liquidating Member.

     (61) “Loss” has the meaning given to it in Appendix B.

     (62) “Majority-in-Interest” means, as to the class or group of Members
referred to, required or to be determined, such of those Members of that class or group
having more than 50% of the Percentage Interest of the Members of that class or group.

     (63) “Majority Member” has the meaning given to it in Section
7.02(g).

5

 

     (64) “Manager” has the meaning given to it in Section 7.02(a).

     (65) “Mediation Period” has the meaning given to it in Section
7.10(d).

     (66) “Member” or “Members” means one or more (as the case may be) of
the Members and any other Person who is admitted as a member of the Company in accordance
with this Agreement and applicable law, each in such Person’s capacity as a member of the
Company, so long as such Person continues as a member of the Company.

     (67) “Member Group” means a Member and any other Member who is a part of the
first-mentioned Member’s Corporate Group.

     (68) “Member Matter” has the meaning given to it in Section 7.04.

     (69) “Nominee Manager” has the meaning given to it in Section
7.02(k).

     (70) “Non-Contributing Member” has the meaning given to it in Section
4.02(a).

     (71) “Non-Utility Nuclear Business” has the meaning given to it in the
Separation Agreement.

     (72) “Notice of Exercise” has the meaning given to it in Section
9.06(f).

     (73) “Notices” has the meaning given to it in Section 12.03.

     (74) “Enexus” has the meaning given to it in the Recitals.

     (75) “Officer” means any individual appointed as an officer of the Company
in accordance with the provisions of Section 7.01(b), so long as such person
continues to serve as an officer of the Company in accordance with the terms of this
Agreement.

     (76) “Original LLC Agreement” has the meaning given to it in the Recitals to
this Agreement.

     (77) “Override Notice” has the meaning given to it in Section
9.06(a).

     (78) “Parent” of a specified Person means an Affiliate controlling such
Person directly or indirectly through one or more intermediaries. For the purposes of
this definition, “controlling” means the possession, direct or

6

 

indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities or other
interests, by contract or otherwise.

     (79) “Percentage Interest” means, with respect to each Member as of any date
of determination, the ratio (expressed as a percentage) of the balance in such Member’s
Capital Account to the aggregate balances in the Capital Accounts of all Members. The
initial Percentage Interests of the Members are set forth on Exhibit A.

     (80) “Person” means 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.

     (81) “Permitted Transfer” has the meaning given to it in Section
9.01.

     (82) “Permitted Transferee” has the meaning given to it in Section
9.01.

     (83) “Prime Rate” means shall mean the prime rate of interest (the base rate
on corporate loans) as published under “Money Rates” in The Wall Street Journal.

     (84) “Profits” and “Losses” has the meaning given to it in
Appendix B.

     (85) “Purchaser” has the meaning given to it in Section 9.06(f).

     (86) “Reduction Event” has the meaning given to it in Section
7.02(g).

     (87) “Retained Business” has the meaning given to it in the Separation
Agreement.

     (88) “Right Holder” has the meaning given to it in Section 9.06(f).

     (89) “Rules” has the meaning given to it in Section 7.10(d).

     (90) “Second Exercise Price” means the price agreed by the Members in
accordance with Section 9.06(e)(i), or in the absence of such agreement, the price
determined by the Expert in accordance with Item 2 of Exhibit C.

7

 

     (91) “Securities Act” has the meaning given to it in Section
12.01(b).

     (92) “Secretary” means the Secretary of the Company.

     (93) “Securities Law” has the meaning given to it in Section
12.01(b).

     (94) “Security Interest” means 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.

     (95) “Senior Employee” means an employee holding a position that is
equivalent in seniority to the position of: (a) “Director” or (b) any position senior to
the position of “Director” within ETR prior to the Effective Date.

     (96) “Separation and Distribution” has the meaning given to it in the
Recitals.

     (97) “Separation Agreement” has the meaning given to it in the Recitals.

     (98) “Significant Matter” has the meaning given to it in Section
7.03.

     (99) “Subsidiary” means with respect to any Person (a) 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 (b) 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).

     (100) “Supermajority Vote” has the meaning given to it in Section
7.03.

     (101) “Tax” or “Taxes” means any and all taxes, including any
interest, penalties, or other additions to tax that may become payable in respect thereof,
imposed by any federal, state, local, or foreign government or any agency or political
subdivision of any such government, which taxes shall include, without limiting the
generality of the foregoing, all income taxes, profits taxes,

8

 

taxes on gains, alternative minimum taxes, estimated taxes, payroll and employee
withholding taxes, unemployment insurance taxes, social security taxes, welfare taxes,
disability taxes, severance taxes, license charges, taxes on stock, sales and use taxes,
ad valorem taxes, value added taxes, excise taxes, franchise taxes, gross receipts taxes,
business license taxes, occupation taxes, real or personal property taxes, stamp taxes,
environmental taxes, transfer taxes, workers’ compensation taxes, and other taxes, fees,
duties, levies, customs, tariffs, imposts, assessments, obligations and charges of the
same or of a similar nature to any of the foregoing.

     (102) “Third Party Business” means business activities of the Company or a
Subsidiary other than those business activities directly in connection with (a) the
operation of Enexus’s nuclear plants pursuant to an Amended and Restated Operating
Agreement or (b) the provision of services to or the receipt of services from Enexus or
Entergy pursuant to a shared services agreement).

     (103) “Third Party Business Put Right” has the meaning given to it in
Section 9.06(c).

     (104) “Third Party Business Subsidiary” has the meaning given to it in
Section 2.08.

     (105) “Transfer” has the meaning given to it in Section 9.01(a).

     (106) “Treasury Regulation” or “Regulation” has the meaning given to
it in Appendix B.

     (107) “Trigger Event” occurs each time that the Company (or its
Subsidiaries) operates four (4) or fewer nuclear power plant facilities on behalf of
Enexus (or its Subsidiaries) due to the termination (for any reason whatsoever, including
but not limited to expiration of a license, failure to renew a license or termination with
or without cause), of one or more Amended and Restated Operating Agreements.

[End of Definitions]

9exv10w6

Exhibit 10.6

AMENDED AND RESTATED OPERATING AGREEMENT

BETWEEN

 

Owner,

AND

ENOI LLC

Operator

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS; RULES OF INTERPRETATION
	 	 	2	 
	1.1 Certain Definitions
	 	 	2	 
	1.2 Rules of Interpretation
	 	 	10	 
	ARTICLE II OPERATOR’S AUTHORITY AND RESPONSIBILITY WITH RESPECT TO OPERATION OF THE PLANT
	 	 	11	 
	2.1 Operator’s Authority 
	 	 	11	 
	2.2 Limitations on Operator’s Authority
	 	 	14	 
	2.3 Operator’s Obligations as NRC Operating Licensee
	 	 	16	 
	2.4 Owner Consent
	 	 	16	 
	ARTICLE III OWNER RESPONSIBILITIES AND OBLIGATIONS
	 	 	16	 
	3.1 Payment
	 	 	16	 
	3.2 Plant Access and Control
	 	 	17	 
	3.3 Owner Cooperation
	 	 	17	 
	3.4 No Changes to Facilities; Procedures or Practices
	 	 	17	 
	3.5 Offsite Power Supply
	 	 	17	 
	3.6 External Communications
	 	 	17	 
	3.7 Owner Access to Employees
	 	 	17	 
	3.8 Decision to Run/Retire
	 	 	18	 
	3.9 Uprates
	 	 	18	 
	3.10 Environmental Liabilities
	 	 	18	 
	3.11 Spent Nuclear Fuel
	 	 	18	 
	3.12 Decommissioning
	 	 	19	 
	3.13 Enforcement of Rights
	 	 	19	 
	3.14 Tax Matters
	 	 	20	 
	ARTICLE IV OWNERSHIP OF CAPACITY AND ENERGY
	 	 	20	 
	4.1 Ownership of Capacity and Energy
	 	 	20	 
	4.2 Determination of Output
	 	 	20	 
	ARTICLE V COMPENSATION AND PAYMENT
	 	 	20	 
	5.1 Fees
	 	 	20	 
	5.2 Costs of Operation
	 	 	21	 
	5.3 Costs of Capital Improvements
	 	 	22	 
	5.4 Payment and Billing 
	 	 	24	 
	5.5 Bank Accounts
	 	 	25	 
	5.6 Books and Records; Audit and Inspection Rights
	 	 	25	 
	5.7 Pension Plan Costs
	 	 	25	 
	ARTICLE VI LIMITATION OF LIABILITY
	 	 	26	 
	6.1 Consequential Damages Waiver
	 	 	26	 
	6.2 Limit on Liability
	 	 	26	 
	6.3 Property Damage Waiver
	 	 	26	 
	ARTICLE VII INSURANCE
	 	 	27	 
	7.1 Insurance and Financial Protection to be Maintained by Owner
	 	 	27	 
	7.2 Insurance to be Maintained by Operator
	 	 	27	 

i

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE VIII TERM AND TERMINATION
	 	 	28	 
	8.1 Term
	 	 	28	 
	8.2 Termination
	 	 	28	 
	8.3 Termination for Cause 
	 	 	29	 
	8.4 Termination Due to Governmental or Judicial Act
	 	 	29	 
	8.5 Termination for Convenience
	 	 	30	 
	8.6 Cross Termination
	 	 	30	 
	8.7 Transition Period
	 	 	30	 
	8.8 Termination Payments
	 	 	31	 
	ARTICLE IX INFORMATION PROVIDED TO OWNER
	 	 	32	 
	9.1 Reports to Owner
	 	 	32	 
	9.2 Site Access
	 	 	32	 
	ARTICLE X CERTAIN OPERATIONAL ISSUES; BUDGETS
	 	 	33	 
	10.1 Inventory
	 	 	33	 
	10.2 Planned and Unplanned Outages
	 	 	33	 
	10.3 Annual Budget; Budget Forecasts
	 	 	36	 
	10.4 Nuclear Fuel 
	 	 	39	 
	ARTICLE XI WARRANTIES AND REMEDIES
	 	 	41	 
	11.1 Warranty
	 	 	41	 
	11.2 Remedy
	 	 	41	 
	11.3 DISCLAIMER
	 	 	41	 
	ARTICLE XII INDEMNITY
	 	 	42	 
	12.1 Owner 
	 	 	42	 
	12.2 Operator
	 	 	42	 
	ARTICLE XIII DISPUTE RESOLUTION
	 	 	43	 
	13.1 General Provisions 
	 	 	43	 
	13.2 Continued Performance
	 	 	45	 
	ARTICLE XIV FORCE MAJEURE
	 	 	45	 
	14.1 Force Majeure
	 	 	45	 
	ARTICLE XV MISCELLANEOUS
	 	 	45	 
	15.1 Confidentiality
	 	 	45	 
	15.2 Compliance With Law, Regulations and Site Requirements
	 	 	46	 
	15.3 Amendments
	 	 	48	 
	15.4 Relationship of the Parties
	 	 	48	 
	15.5 No Waivers
	 	 	48	 
	15.6 Assignment and Successors; Delegation
	 	 	48	 
	15.7 Invalidity of Terms
	 	 	48	 
	15.8 Counterparts
	 	 	49	 
	15.9 Responsibility for Payment of Taxes
	 	 	49	 
	15.10 Employee Security, Access and Exit Control
	 	 	49	 
	15.11 Governing Law
	 	 	49	 
	15.12 Entire Agreement
	 	 	49	 
	15.13 Third Party Beneficiaries
	 	 	49	 
	15.14 Joint Effort
	 	 	49	 
	15.15 Representations
	 	 	50	 
	15.16 Notices
	 	 	51	 

ii

 

Attachments

Attachment A  –  Cost Allocation

Attachment B  –   Fees

Attachment C  –   Forecasted Capital Improvements

Attachment D  –   Demobilization Costs

Attachment E  –   Termination Fees

Attachment F  –   Delegated Contracts

Attachment G  –   Operator Policies and Procedures

Attachment H  –   Budget and Fee Sample Calculations

iii

 

AMENDED AND RESTATED OPERATING AGREEMENT

     This AMENDED AND RESTATED OPERATING AGREEMENT (the “Agreement”), dated                      ___,
2008, by and between                     , a Delaware limited liability company (“Owner”), and
ENOI LLC, a Delaware limited liability company (d/b/a Equagen Nuclear, “Operator”). Owner
and Operator are referred to individually as a “Party,” and together as the
“Parties.”

W I T N E S S E T H:

     WHEREAS, Entergy Corporation (“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 to effect this separation (“Separation”) the Parties entered into that certain
Separation and Distribution Agreement, dated as of the
___ day of                      2008 (“Separation
Agreement”);

     WHEREAS, as a part of the Separation (i) Operator shall become owned indirectly fifty percent
(50%) by Entergy and fifty-percent (50%) by Enexus and (ii) Owner will be owned indirectly
one-hundred percent (100%) by Enexus;

     WHEREAS, Owner (i) owns the                      located                      and certain other facilities and
other assets associated therewith and ancillary thereto (the “Plant”) and (ii) the Plant is
owned and operated as part of the Non-Utility Nuclear Business;

     WHEREAS, Operator is currently, and following the Separation will remain, the employer of all
Plant operating personnel employed at the Site;

     WHEREAS, following the Separation, Enexus will employ directly, or through wholly-owned
subsidiaries, certain corporate function and the power marketing personnel related to the
Non-Utility Nuclear Business;

     WHEREAS, Operator is the holder of the Operating License for the Plant and operates the Plant
pursuant to that certain Operating Agreement, between Operator and                      dated as of                     
(the “Existing Agreement”);

 

 

     WHEREAS, following the Separation, Owner desires to continue to delegate to the Operator
certain operating responsibility for – but not ownership of – the Plant and the Parties desire that
Operator continue to operate the Plant as the NRC licensed operator;

     WHEREAS, as a part of the Separation, the Parties desire to amend and restate the Existing
Agreement to insert additional commercial terms to reflect that post-Separation, Operator and Owner
will no longer be wholly-owned subsidiaries of Entergy;

     WHEREAS, a condition to the closing of the Separation is the approval by the NRC;

     WHEREAS, Owner desires that such operating responsibility be consistent with Owner’s
obligations and responsibilities under all pertinent state and federal law; and

     WHEREAS, Owner desires to continue to contract with Operator so as to enable Operator to
possess, use and operate the Plant as Owner’s agent, and Operator desires to undertake such
responsibility, all subject to and in accordance with the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties,
covenants and agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally
bound hereby, agree as follows:

ARTICLE I

DEFINITIONS; RULES OF INTERPRETATION

     1.1 Certain Definitions . As used herein:

     “AAA” has the meaning set forth in Section 13.1(b).

     “Affiliated Plant” has the meaning set forth in Section 8.6.

     “Agreement” has the meaning set forth in the preamble.

     “ANI” means the American Nuclear Insurers.

     “Annual Budget” has the meaning set forth in Section 10.3(a).

     “Annual Cap” has the meaning set forth in Section 10.3(e).

     “Asset Management Fee” has the meaning set forth in Attachment B.

     “Atomic Energy Act” means the Atomic Energy Act of 1954, as amended.

2

 

     “Balancing Authority” means the responsible entity, such as a regional transmission
organization or an independent system operator or power pool, that integrates resource plans ahead
of time, maintains load-interchange-generation balance within a Balancing Authority Area, and
supports interconnection frequency in real time.

     “Balancing Authority Area” means the collection of generation, transmission and loads
within the metered boundaries of the Balancing Authority. The Balancing Authority maintains
load-resource balance within this area.

     “Business Day” means any day other than Saturday, Sunday or any other day on which
commercial banks in New York, New York are required to be closed.

     “Budget Overrun” has the meaning set forth in Section 10.3(e).

     “Byproduct Material” means any radioactive material (other than Special Nuclear
Material) yielded in, or made radioactive by, exposure to the radiation incident to the process of
producing or utilizing Special Nuclear Material.

     “Capability Factor Performance Fee” has the meaning set forth in Attachment B.

     “Capital Improvements” means improvements, additions, modifications or replacements of
property at the Plant that are properly capitalized and recorded on Owner’s books of account as
assets in accordance with generally accepted accounting principles, and that are in accordance with
applicable rules and regulations of any Governmental Authority having jurisdiction in the matter.

     “CNO” has the meaning set forth in Section 2.3.

     “Costs of Capital Improvements” means all costs of Capital Improvements and any
related fees, charges or Taxes incurred or accrued with respect to such Capital Improvements. Such
costs shall be calculated and allocated consistent with the principles and methodology set forth in
Attachment A.

     “Costs of Operation” means all costs related to the Operation of the Plant and any
related fees, charges or Taxes incurred or accrued under or with respect to this Agreement and
attributable or allocable to the Plant and properly recordable in expense accounts in accordance
with generally accepted accounting principles and applicable rules or regulations of any
Governmental Authority having jurisdiction in the matter. Such costs shall include costs:

               (i) related to Operator’s performance of its obligations under this Agreement and may
include (A) costs of the salaries and benefits of Operator employees, (B) the direct cost
of contractors retained by Operator to perform operation, maintenance and repair work on or
for the Plant (except as such contractor cost may be included in Costs of Capital
Improvements), (C) costs of fuel, including Nuclear Fuel, consumables, spare parts and
other supplies, and (D) administrative and overhead costs,

3

 

including the cost of insurance required to be maintained by Operator pursuant to
Section 7.2;

               (ii) calculated and allocated consistent with the principles and methodology set forth
in Attachment A; and

               (iii) otherwise made in accordance with applicable Law.

     Costs of Operation shall not include such costs that may otherwise fall within this definition
but which have been paid directly by Owner or which are attributable to funding contributions to
any Pension Plan.

     “Decommissioning Trust Funds” means the qualified and non-qualified decommissioning
reserve funds maintained by Owner under the Amended and Restated Decommissioning Trust Agreement,
dated
                     by and between Owner and                     , a ___ corporation, as Trustee.

     “Delegated Contracts” has the meaning set forth in Section 2.1(e).

     “Department of Energy Claim” has the meaning set forth in the                     .

     “Department of Energy Potential Claim” has the meaning set forth in the                     .

     “Dispute” means any controversy, claim or dispute of whatsoever nature, arising out of
or relating to this Agreement or the making, validity, execution, performance, discharge,
termination, or breach hereof.

     “Dispute Notice” has the meaning set forth in Section 13.1(a).

     “Effective Date” means the effective date of this Agreement which shall be the date
upon which the Separation occurs pursuant to the Separation Agreement.

     “Eligible Budget Savings” has the meaning set forth in Section 10.3(f).

     “Emergency Preparedness Agreements” means                     .

     “Energy Reorganization Act” means the Energy Reorganization Act of 1974, as amended.

     “Entergy” has the meaning set forth in the preamble.

     “Enexus” has the meaning set forth in the Separation Agreement.

     “Exclusion Area” means the “Exclusion Area” as defined at 10 C.F.R. 50.2 and as
described in the Final Safety Analysis Report for the Plant, as may be updated and amended from
time to time, in accordance with 10 C.F.R. 50.71(e).

     “Existing Agreement” has the meaning set forth in the recitals.

4

 

     “Extraordinary Capital Expenditures” means those capital expenditures that are
required by a change in applicable Law, including applicable Nuclear Laws, NRC rules, NRC orders,
NRC regulations and NRC policies.

     “Fees” means the Fixed Fee, Variable Fees and Incentive Fees.

     “Fixed Fee” means the Operating Management Fee.

     “Five Year Forecast” has the meaning set forth in Section 10.3(b).

     “Force Majeure” means any event, circumstance or occurrence that is beyond the
reasonable control of and without the fault or negligence of the Party claiming that its
performance under this Agreement was delayed or prevented, including Acts of God, inability to
obtain necessary approvals from a Governmental Authority, and acts of any Governmental Authority
mandating the termination or delay of performance under the Agreement.

     “Good Utility Practice” means any of the practices, methods and acts engaged in or
approved by a significant proportion of the nuclear power plant industry at the time of the
reference, or any of the practices, methods and acts which, in the exercise of reasonable judgment
in light of the facts known at the time the decision was made, could have been expected to
accomplish the desired result at a reasonable cost consistent with reliability, safety and
expedition. Good Utility Practice shall apply not only to functional parts of the Plant, but also
to structures, landscaping, signs, lighting and other facilities that are located at the Site to
the extent that they relate to, or a part of, the Plant’s utility operations. Good Utility
Practice is not intended to be limited to the optimum practice, method or act to the exclusion of
all others, but rather to be a spectrum of prudent and acceptable practices, methods or acts.

     “Grace Period” has the meaning set forth in Section 8.6.

     “Greater Than Class C Waste” means radioactive waste that contains a radionuclide
whose concentration exceeds the value in Table 1 or Table 2 of 10 C.F.R. § 61.55, and therefore, is
currently not generally acceptable for disposal at existing (near surface) low level radioactive
waste disposal facilities.

     “Gross Negligence and/or Willful Misconduct” means any act or omission that is,
authorized, undertaken or omitted with an intention that such act or omission will result in, or
that is authorized, undertaken or omitted consciously with prior actual knowledge that such act or
omission is likely to result in, or that is authorized, undertaken or omitted with reckless
disregard of facts indicating that such act or omission is likely to result in, actionable damages,
or other actionable equitable or legal remedies or injury to any person or property, or violation
or failure to fulfill the requirements of any applicable Laws, applicable Required Permits,
applicable Operator Policies and Procedures, or any Owner contract, including this Agreement.

     The Parties agree that any acts or omissions of Operator that were authorized, directed or
controlled by Owner in a situation where Owner has actual knowledge of the likelihood of injury,
damage, or violation of such applicable Laws, applicable Required Permits, applicable Operator
Policies and Procedures, or Owner contract resulting from such acts or omissions will not be

5

 

asserted by Owner as constituting Gross Negligence and/or Willful Misconduct of Operator.
Likewise, authorizations or acts or omissions by Owner taken in reliance on advice provided by
Operator or Operator personnel will not be asserted by Operator as constituting Gross Negligence
and/or Willful Misconduct of Owner.

     “Governmental Authority” means any United States federal, state or local government,
or governmental, regulatory or administrative authority, agency or commission or any court,
tribunal, or judicial or arbitral body.

     “High Level Waste” means (i) irradiated Nuclear Fuel, (ii) Spent Nuclear Fuel, liquid
wastes resulting from the operation of the first cycle solvent extraction system, or its
equivalent, and the concentrated wastes from subsequent extraction cycles, or their equivalent, in
a facility for reprocessing Spent Nuclear Fuel, (iii) solids into which such liquid wastes have
been converted, or (iv) any other material containing radioactive nuclides in concentrations or
quantities that exceed NRC requirements for classification as Low Level Waste.

     “Incentive Fees” means the Safety and Regulatory Performance Fee and the Capability
Factor Performance Fee.

     “INPO” means the Institute of Nuclear Power Operations.

     “ISFSI” has the meaning set forth in Section 3.11(c).

     “Interconnection Agreement” means                     .

     “Law” means all laws, rules, regulations, codes, statutes, ordinances, treaties,
and/or any order, writ, judgment, injunction, decree, stipulation, determination or award entered
by or with any Governmental Authority.

     “Low Level Waste” means radioactive material that is neither Spent Nuclear Fuel nor
Byproduct Material which the NRC has, consistent with existing Law, classified as low-level
radioactive waste.

     “Material Adverse Findings” means those NRC or INPO findings and determinations that
call into question Operator’s fundamental competence or ability to continue as Operator.

     “Mediation Referral Date” has the meaning set forth in Section 13.1(b).

     “Multi-Party Contracts” has the meaning set forth in Section 2.1(f).

     “NEIL” means Nuclear Electric Insurance Limited.

     “Net Positive Output” has the meaning set forth in Section 4.2.

     “New Operator Contracts” has the meaning set forth in Section 2.2(e).

     “Non-Utility Nuclear Business” has the meaning set forth in the Separation Agreement.

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     “NRC” means the United States Nuclear Regulatory Commission.

     “Nuclear Fuel” means any Source Material, Special Nuclear Material or Byproduct
Material, including any ores, mined or un-mined, uranium concentrates, natural or enriched uranium
hexafluoride, or any other material in process containing uranium, and any fuel assemblies or parts
thereof, any of which are required for the generation of electricity at the Plant.

     “Nuclear Fuel and Fuel Services Purchase Agreement” has the meaning set forth in
Section 10.4(a)(i).

     “Nuclear Laws” means all Laws relating to the regulation of: nuclear power plants;
Nuclear Materials; the transportation and storage of Nuclear Materials; Nuclear Fuel; the
transportation and storage of Nuclear Fuel; Safeguards Information; the enrichment of uranium; and
the disposal of Nuclear Material. “Nuclear Laws” include the Atomic Energy Act, the Price-Anderson
Act, the Energy Reorganization Act, the Convention on Physical Protection of Nuclear Material
Implementation Act of 1982, the Foreign Assistance Act of 1961, the Nuclear Non-Proliferation Act
of 1978; the Nuclear Waste Policy Act of 1982, the Low-Level Radioactive Waste Policy Amendments
Act of 1985, the Energy Policy Act of 1992, and the Energy Policy Act of 2005, and in each case any
implementing regulations promulgated with respect thereto.

     “Nuclear Materials” means Source Material, Special Nuclear Material, Low Level Waste,
Greater than Class C Waste, High Level Waste, Byproduct Material and Spent Nuclear Material.

     “Official Schedule” has the meaning set forth in Section 10.2(a)(i).

     “Official Schedule Maintenance Activity” has the meaning set forth in Section
10.2(a)(i).

     “Official Schedule Maintenance Period Threshold” has the meaning set forth in
Section 10.2(a)(i).

     “Operate” and its derivatives (e.g., Operations, Operating) means to possess, use,
manage, control, maintain, repair, operate and decommission.

     “Operating License” means                     .

     “Operating Management Fee” has the meaning set forth in Attachment B.

     “Operator Parent Board” has the meaning set forth in Section 8.6.

     “Operator Policies and Procedures” has the meaning set forth in Section
2.1(g)(i).

     “Operator’s Representative” has the meaning set forth in Section 9.1(a).

     “Original Owner” means                     .

     “Override Notice” has the meaning set forth in Section 8.6.

     “Owner” has the meaning set forth in the preamble.

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     “Owner’s Inventory” has the meaning set forth in Section 10.1.

     “Owner’s Parent” has the meaning set forth in Section 8.6.

     “Owner’s Representative” has the meaning set forth in Section 9.1(a).

     “Party” has the meaning set forth in the preamble.

     “Pension Plan” means a defined benefit pension plan that is maintained by the Operator
or a Subsidiary and that is subject to Title IV of the Employee Retirement Income Security Act of
1974, as amended, and Section 412 of the Internal Revenue Code of 1986, as amended.

     “Pension Plan Contribution” means an amount equal to the amount of any contribution
that Operator or a Subsidiary is required to make to any Pension Plan to satisfy the requirements
of Section 412 of the Internal Revenue Code of 1986, as amended, to the extent that the amount of
such contribution is attributable to the Owner under this Agreement (as calculated and allocated
consistent with the principles and methodology set forth in Attachment A.).

     “Person” means any legal or natural person, including any individual, corporation,
partnership, limited liability company, joint stock company, association, joint venture, trust,
Governmental Authority or international body or agency, or other entity.

     “Plant” has the meaning set forth in the recitals.

     “Points of Interconnection” has the meaning set forth in the Interconnection
Agreement.

     “Power Scheduling Damages” has the meaning set forth in Section 12.2(c).

     “Prevailing Time” means, with respect to a particular time in question, Standard Time
or Daylight Time in effect at such time.

     “Price-Anderson Act” means Section 170 of the Atomic Energy Act and related provision.
of Section 11 of the Atomic Energy Act.

     “Purchase and Sale Agreement” means                     .

     “Required Permits” means all licenses, permits, approvals, exemptions, orders or
authorizations of, and all filings, registrations, or qualifications with, any Governmental
Authority having jurisdiction over, or application to, either of the Parties, the Plant, or the
ownership, operation, maintenance or repair of the Plant, or any acts or transactions contemplated,
undertaken or performed in connection with any aspect of this Agreement. The term Required Permits
includes the Operating License.

     “Required Regulatory Approvals” means those regulatory approvals that are required
before the Operator can assume the responsibility of operating the Plant, which include the
approval of (i) the NRC, including all necessary amendments to the Operating Licenses, (ii)                     
and (iii)                     .

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     “Request for Mediation” has the meaning set forth in Section 13.1(b).

     “Restricted Data” has the meaning set forth in Atomic Energy Act (codified at 42
U.S.C. § 2014(y)).

     “Retained Business” has the meaning set forth in the Separation Agreement.

     “Rules” has the meaning set forth in Section 13.1(d).

     “Safeguards Information” means information that is required to be protected under the
terms of 10 C.F.R. § 73.21.

     “Safety and Regulatory Performance Fee” has the meaning set forth in Attachment
B.

     “Separation Agreement” has the meaning set forth in the recitals.

     “Separation” has the meaning set forth in the recitals.

     “S&P” means Standard & Poor’s Ratings Group (a division of The McGraw-Hill Companies).

     “Senior Executives” has the meaning set forth in Section 13.1(a).

     “Shared Services Agreement” has the meaning set forth in Section 2.1(e)(ii).

     “Shared Services Fee” has the meaning set forth in Attachment B.

     “Short-Term Maintenance Activity” has the meaning set forth in Section
10.2(b)(ii).

     “Site” means the land upon which the Plant is located.

     “Source Material” means: (i) uranium, thorium, or any combination thereof, in any
physical or chemical form or (ii) ores which contain by weight one-twentieth of one-percent (0.05%)
or more of uranium, thorium or any combination thereof. Source Material does not include Special
Nuclear Material.

     “Spent Nuclear Fuel” means Nuclear Fuel that has been permanently withdrawn from a
nuclear reactor following irradiation, and has not been chemically separated into its constituent
elements by reprocessing. Spent Nuclear Fuel includes the Special Nuclear Material, Byproduct
Material, Source Nuclear Material, Greater Than Class C Waste and other radioactive materials
associated with the Nuclear Fuel assemblies.

     “Special Nuclear Material” means plutonium, uranium-233, uranium enriched in
isotope-233 or in isotope-235, any other material that the NRC determines to be “Special Nuclear
Material” and any material artificially enriched by any of the above-listed materials or isotopes.
Special Nuclear Material does not include Source Material.

     “Standard Spent Fuel Disposal Contract” means                    .

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     “Subsidiary” has the meaning set forth in the Separation Agreement.

     “Taxes” means any or all federal, state and/or local municipal, ad valorem, property,
occupation, severance, generation, first use, conversion, BTU or power, transmission, utility,
gross receipts, privilege, sales, use, consumption, excise, lease, transaction, and other taxes,
governmental charges, license fees, permit fees, assessments, including in each case any or all
increases in, interest on, penalties relating to, or costs to defend any of the foregoing, now
existing or otherwise applicable at any time during the Term; provided that Taxes shall not include
taxes (i) based on net income or net worth, including Texas Margins (Franchise) Tax and all
components of the Michigan Business Tax or (ii) any item for which an exemption or exclusion from
Taxes may apply.

     “Term” has the meaning set forth in Section 8.1.

     “Transition Period” has the meaning set forth in Section 8.7(b).

     “Trigger Event” has the meaning set forth in Section 8.6.

     “Unplanned Outage Event” has the meaning set forth in Section 10.2(c).

     “Uprate” means an increase in the maximum thermal power level at which the Plant may
operate under its Operating License as such license may be amended after the date hereof.

     “Variable Fees” means the Asset Management Fee and the Shared Services Fee.

     1.2 Rules of Interpretation. In this Agreement and in any attachments, appendices,
exhibits or schedules that may be attached hereto, except to the extent that the context requires
otherwise:

          (a) the Table of Contents and the headings of the Articles and Sections herein have been
inserted as a matter of convenience for reference only and shall not control or affect the meaning
or construction of any of the terms or provisions hereof;

          (b) the singular includes the plural and the masculine includes the feminine and neuter unless
the context requires otherwise;

          (c) references to any document, agreement or Law, including this Agreement, any NRC or INPO
requirements and guidelines, any Operator Policies and Procedures and any Required Permits, shall
be deemed to include references to (i) all attachments, appendices, exhibits, and schedules
attached thereto and (ii) such document, agreement or Law as amended, modified, supplemented,
replaced or restated from time to time in accordance with its terms (if applicable) and (where
applicable) subject to compliance with the requirements set forth therein;

          (d) all attachments, appendices, exhibits, and schedules, if any, that may be attached hereto
are incorporated herein by this reference and are intended to be a part of this

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Agreement; provided, however, that in the event of a conflict between the terms of an
attachment, appendix, exhibit, and schedule attached hereto and the terms of the remainder of this
Agreement, the terms of the remainder of the Agreement shall take precedence;

          (e) unless the express reference otherwise provides, references to “Articles,” “Sections,”
clauses, “Paragraphs,” “Attachments,” “Appendices,” “Exhibits,” or “Schedules,” or like terms are
to articles, sections, clauses, paragraphs, appendices, exhibits or schedules of this Agreement;

          (f) all references to a particular Person shall include a reference to such Person’s
successors and permitted assigns;

          (g) the words “herein,” “hereof” and “hereunder” shall refer to this Agreement as a whole and
not to any particular section or subsection of this Agreement; the words “include,” “includes” or
“including” shall mean “including, but not limited to;”

          (h) the term “day” shall mean a calendar day commencing at 12:00 a.m. Prevailing Time and
whenever an event is to be performed or a payment is to be made by a particular date and the date
in question falls on a day that is not a Business Day, the event shall be performed or the payment
shall be made on the next succeeding Business Day; the term “week” shall mean a seven consecutive
day period; the term “month” shall mean a calendar month; provided, that when a period measured in
months commences on a date other than the first day of a month, the period shall run from the date
on which it starts to the corresponding date in the next month and, as appropriate, to succeeding
months thereafter; and the term “year” shall mean a calendar year; and

          (i) all monetary references contained herein refer to U.S. dollars.

ARTICLE II

OPERATOR’S AUTHORITY AND RESPONSIBILITY WITH RESPECT TO OPERATION OF THE PLANT

     2.1 Operator’s Authority.

          (a) Generally. Operator shall operate and maintain the Plant, and make
Capital Improvements to the Plant, in each case to include the interconnection equipment
and facilities up to the Points of Interconnection and in accordance with (i) Good Utility
Practice, (ii) applicable Laws, (iii) the Operating License, (iv) the Annual Budgets
approved by Owner pursuant to Section 10.3, (v) Operator’s Policies and Procedures,
as amended from time to time, and (vi) any other applicable requirements as may be set
forth in this Agreement.

          (b) Owner’s Agent. Operator shall operate the Plant as Owner’s agent in performing the
services enumerated in this Agreement and shall act at all times in this capacity

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in the best
interests of Owner. In furtherance thereof and otherwise subject to the terms of this Agreement,
including Section 2.2 and Section 2.4, Owner hereby grants Operator the authority
to:

               (i) take any and all action, in Owner’s name and on Owner’s behalf, necessary to
obtain and/or maintain the Required Permits and Required Regulatory Approvals and necessary
to comply with all applicable Law, including the regulations of the NRC and other
Governmental Authorities having jurisdiction over any aspect of the Cost of Operation, Cost
of Capital Improvements, making of Capital Improvements and/or Operation of the Plant; and

               (ii) exercise in accordance with applicable Laws, the rights of Owner under, and
execute, modify, amend or terminate, any contracts, including leases, easements,
agreements, purchase orders, licenses, permits and privileges relating to the Operation of,
and making of Capital Improvements to, the Plant, as agent for Owner. Operator may perform
its duties hereunder through its employees, affiliated persons or non-affiliated persons.
Except as provided in Section 5.4(f) hereof, the duties of Owner and Operator
hereunder shall be subject in all events to receipt of any further necessary consents or
regulatory approvals.

          (c) Required Permits; Approvals. Subject to the limitations placed on Operator’s authority
in Section 2.2 and the responsibilities and obligations reserved to Owner in ARTICLE
3, including those contained in Section 2.2(h) and Section 3.6, respectively,
Operator shall obtain, maintain and comply with all the Required Permits, the Required Regulatory
Approvals and other approvals necessary for Operator to operate, maintain, and make Capital
Improvements to the Plant and otherwise perform its obligations under this Agreement.

          (d) Emergency Planning. Operator shall coordinate all emergency planning regarding the
Plant with Owner (including the development of all emergency planning templates and procedures);
provided that if time permits and subject to its obligations under the Operating License and the
emergency plan communication requirements for the Plant, Operator is to seek Owner’s prior consent
(i) for emergency response actions it proposes to take, and (ii) before submitting required
incident reports to the applicable Governmental Authority. In any event, Operator is to
immediately notify Owner of any emergency response actions that Operator takes or of any incident
reports that Operator submits.

          (e) Contract Administration.

               (i) Generally; Delegated Contracts. Unless otherwise expressly provided for pursuant to this Agreement, including Section
10.3, Operator shall administer all contracts related to the operation and maintenance of the
Plant by Operator that (i) were executed by Owner (and not by Operator as Agent on behalf of
Owner), (ii) have not expired or been terminated and (iii) are either assigned by Owner to Operator
or retained by Owner and delegated to Operator (“Delegated Contracts”). The Delegated
Contracts related to the Operation of the Plant as of the Effective Date are set forth on
Attachment F. Operator shall

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update and maintain Attachment F as appropriate over
the Term and such updated schedule shall be available for inspection by Owner pursuant to
Section 5.6.

               (ii) Assignment of Contracts. If the Agreement is terminated early for any reason,
including pursuant to ARTICLE VIII, Owner shall have the right, but not the obligation, to
require Operator to assign to Owner or a successor operator any agreements entered into by Operator
in connection with its performance of its obligations under this Agreement; provided that the
assignability of (i) that certain shared services agreement between Entergy Services, Inc. and
Equagen LLC of even date herewith (as amended and supplemented by the parties thereto (the
“Shared Services Agreement”) or (ii) any collective bargaining agreements relating to the
Plant to which Operator is a party, in each case shall be governed under the terms of each such
agreement and Operator shall not be required to assign the Shared Services Agreement or any such
collective bargaining agreement under the terms of this Agreement; provided, further, that nothing
in this subsection is intended to relieve Operator of its obligations under Section 8.7 to
cooperate with Owner during the Transition Period in facilitating the transfer of all Plant work
force personnel to Owner or a successor operator designated by Owner.

          (f)
Multi-Party Contracts; Disclosures in Third-Party Contracts. If a contract subject to
this Section 2.1 relates to both the Plant and one or more Affiliated Plants, such
contracts (“Multi-Plant Contracts”) shall be executed by Owner at Operator’s request, on
reasonable grounds, or by Operator, on reasonable grounds, on behalf of Owner, and the owners of
the applicable Affiliated Plants. Operator further agrees that with respect to Multi-Plant
Contracts, Operator will not enter into such Multi-Plant Contracts without the prior written
consent of Owner unless such contract contains a provision for several but not joint liability of
the owners of the plants under such Multi-Plant Contracts in proportion to the costs allocated to
the various power plants under such contracts. In order to induce parties to contract with
Operator with regard to the performance of Operator’s obligations under this Agreement, Owner
hereby expressly agrees to be bound by the terms of all contracts executed by Operator in
accordance with its agency authority as described herein (including, any provisions that limit or
protect against a third party’s liability, provisions granting indemnity to third parties and
limitations or exclusions of warranties) to the same extent as if Owner were an original signatory
to such contract. In addition, if Owner’s signature is deemed by Operator to be necessary to
induce a third party to contract with Operator, Owner agrees not to unreasonably refuse to execute
such third-party contracts as Operator may request from time to time. It is further agreed that
the Treasurer or Chief Financial Officer of Owner shall designate and notify Operator in writing of
any contracts or types of contracts related to the Plant that are to be executed by Operator, in
its capacity as Owner’s agent, that Owner desires to review and monitor so that
Owner may evaluate the potential impact on Owner of such contracts and to advise Operator of such
impact in order that Operator may take all steps to protect Owner’s interests. Accordingly,
Operator agrees to provide Owner copies of such designated contracts within a reasonable time prior
to Operator’s proposed execution, amendment or termination thereof.

               (g) Operator Policies and Procedures.

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               (i) Generally. When Operator enters into contracts and performs its
obligations hereunder with respect to the Plant as Owner’s agent, Operator shall do so in
accordance with the applicable management level policies used by Operator as of the
Effective Date in the Operation of the Plant until such time those policies are amended or
replaced at the mutual agreement of the Parties (each an “Operator Policies and
Procedures”). In addition, Owner will have rights to review and propose changes to
procedures put in place by Operator to implement Operator Policies and Procedures. The
Operator Policies and Procedures related to the Operation of the Plant as of the Effective
Date are set forth on Attachment G. Owner shall have the right to review and
approve proposed changes to existing Operator Policies and Procedures and proposed new
Operator Policies and Procedures. Except as may otherwise be expressly provided for in
this Agreement, Owner shall have fifteen (15) days from the date of a written submittal to
review and approve a proposed change to an existing Operator Policies and Procedures or a
new Operator Policies and Procedures and the failure by Owner to respond during such time
shall be deemed approval by the Owner. Owner shall have the right to propose reasonable
changes to any such proposals and Operator shall make commercially reasonable efforts to
incorporate such requested changes provided that such requests are consistent with Good
Utility Practice, the Operating License or applicable Law. Disputes shall be resolved in
accordance with ARTICLE XIII. Operator shall update and maintain Attachment
G as appropriate over the Term and such updated schedule shall be available for
inspection by Owner pursuant to Section 5.6.

               (ii) Approval Authority and Execution Policy. To ensure that expenditures are made in a
prudent manner consistent with an approved Annual Budget, the Operator Policies and Procedures
shall include an “Approval Authority and Execution Policy” governing the authority of Operator’s
employees and agents to enter into expense transactions, capital funding transactions, procurement
and sales contracts and other transactions that may have an impact on an approved Annual Budget for
the Plant. In addition to any review rights Owner may have pursuant to Section 2.1(g)(i),
Operator shall, upon request (A) provide Owner with a copy of such policy and (B) periodically meet
with the Owner to discuss necessary or desired changes in the policy.

     2.2 Limitations on Operator’s Authority. Notwithstanding Section 2.1, except for
actions taken pursuant to Section 2.3, without the prior written consent of Owner, Operator
shall have no authority under this Agreement or as Owner’s agent with respect to the following:

          (a) Plant Life. Defining the economic life of the Plant, or retiring or reducing the
generating capacity of the Plant for economic reasons, or amending the Operating License to extend
the life of the Plant.

          (b) NRC Operating License. Amending the Operating License without providing prior notice
of the amendment to Owner and allowing the Owner the opportunity to review a draft of the
amendment.

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          (c) Thermal Output. Except as otherwise approved by Owner and included in a budget
approved by Owner in accordance with Section 10.3, making Capital Improvements to increase
the NRC licensed thermal output of the Plant’s reactor, or entering into contracts to do so.

          (d) Compliance with Budgets. Except as otherwise expressly permitted under this Agreement,
(i) incurring costs for Costs of Operation that are in excess of one-hundred and five percent
(105%) of the applicable Annual Budget or (ii) incurring costs for Costs of Capital Improvements
that are materially different from, or in excess of one-hundred and five percent (105%) of, the
applicable Annual Budget.

          (e) New Operator Contracts. Entering into any new contract with respect to the Plant,
except for certain contracts (each a “New Operator Contract”) that (i) have been executed
consistent with an Annual Budget approved by the Owner pursuant to Section 10.3 and (ii)
have a value per contract of (A) generally, $15,000,000 or less over the term of such contract or
(B) with respect to contracts for the purchase of Nuclear Fuel or related Nuclear Fuel enrichment,
conversion or fabrication services, $50,000,000 or less over the term of such contract; provided
that any New Operator Contract entered into by Operator pursuant to this Section 2.2(e)
shall be executed by Operator, as agent for Owner, and shall be subject to the requirements of
Section 2.1(e)(ii) and Section 2.1(f); provided, further, that Owner shall have the
right upon notice to Operator to review and approve any New Operator Contract prior to its
execution.

For the avoidance of doubt (i) collective bargaining agreements, as well as any other negotiated
agreements between Operator and a union representing Operator’s employees, shall not be considered
New Operator Contracts subject to the provisions of this subsection, and (ii) the decision by
Operator to enter into a collective bargaining agreement or such other agreement between Operator
and a union representing Operator’s employees will be solely the Operator’s decision and will not
require Owner’s consent; provided that Operator shall provide (i) notice to Owner of its entering
into negotiations with respect to such collective bargaining agreements and such other agreements
between Operator and unions representing Operator’s employees and (ii) an opportunity for Owner to
provide comments to Operator regarding the impact of such agreements on costs being passed through
to Owner under this Agreement.

          (f) Disposition of Plant Assets. Except as permitted pursuant to Section 10.1,
selling, encumbering or disposing of any real property or any equipment, materials or other
personal property comprising the Plant; provided that Operator may in the ordinary course of
business, sell, encumber or dispose of surplus non-capital equipment, materials or other personal
property used in the operation, maintenance and repair of the Plant.

          (g) Release of Claims; Waiver of Rights. Releasing any material claims of Owner or waiving
or otherwise impairing any material contractual or other legal rights benefiting Owner.

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          (h) Legal Proceedings. Except as otherwise provided under Section 3.13(a) ,
initiating or resolving any material legal or administrative proceedings on behalf of Owner.

          (i) Breach. Knowingly taking any action or failing to take any action that would create a
breach or default under any agreement relating to the operation of the Plant or Law to which Owner
is a party or by which it or any of its assets is bound.

          (j) Plant Capacity and Energy. Entering into any agreement or engaging in any activity
relating to the brokering, marketing, dispatch, sale or pricing of capacity or energy of the Plant.

          (k) License Transfer. Engaging in any activity that could reasonably be expected
to require the transfer of the Operating License to a third party.

     2.3 Operator’s Obligations as NRC Operating Licensee. Notwithstanding the limitations on
Operator’s authority set forth in Section 2.2, the Operator, acting in the sole discretion
of its Chief Nuclear Officer (“CNO”), shall have the authority at all times to take any
action(s) necessary to carry out its responsibilities as the Operator under the Operating License,
including any action and/or expenditure of funds necessary to protect the public health and safety,
to maintain safe operating or shutdown conditions at the Plant, and to comply with the requirements
of any Nuclear Law, NRC regulation, NRC order or other NRC requirement; provided that CNO shall
exercise such authority within the limitations set forth above, to the extent CNO reasonably can do
so consistent with carrying out Operator’s responsibilities under the Operating License, and the
CNO shall act in good faith to coordinate with Owner when exercising such authority, if time and
circumstances permit. Except to the extent that they arise from Owner’s disapproval of an Operator
spending request, Operator shall
pay all fines and penalties assessed by the NRC resulting from its failure to comply with the
Operating License, applicable Law or perform its obligations under this Agreement.

     2.4 Owner Consent. Except otherwise expressly provided herein, if Owner and Operator
cannot reach agreement on any issue under this Agreement as to which Owner has the right of consent
or approval, following written notice from either Party, they shall seek to resolve the
disagreement pursuant to ARTICLE XIII.

ARTICLE III

OWNER RESPONSIBILITIES AND OBLIGATIONS

     3.1 Payment. In consideration of the services rendered by Operator hereunder, and subject
to the provisions of this Operating Agreement, Owner hereby agrees to pay the Fees, Costs of
Operation, Costs of Capital Improvements and Pension Plan Contributions incurred by Operator, in
each case pursuant to ARTICLE V hereof.

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     3.2 Plant Access and Control. For the purpose of allowing Operator to operate the Plant in
accordance with the Operating License, the Required Permits and other applicable regulatory
requirements and this Agreement, to the extent permitted by Law Owner grants Operator unrestricted
access, and the exclusive right to use and control the use of the property constituting the Plant,
including the real property constituting the Site and the Exclusion Area and the switchyard (or
substation), facilities, equipment and personal property located on the Site and the Exclusion
Area.

     3.3 Owner Cooperation. Owner shall cooperate with Operator so that Operator may exercise
its authority and fulfill its responsibilities pursuant to this Agreement. In this connection,
Owner agrees to delegate to Operator, as agent for Owner, rights and obligations of Owner as
necessary for Operator to fulfill its obligations hereunder, including, Owner’s rights and
obligations under the following agreements: (i) the Interconnection Agreement and (ii) the
Emergency Preparedness Agreements.

     3.4 No Changes to Facilities; Procedures or Practices. So that Operator will be capable of
Operating the Plant in accordance with the Operating License and applicable Law, including NRC
regulations, requirements or commitments, Owner agrees that it will not, without the prior written
consent of Operator which shall not be unreasonably withheld, make any changes or authorize others
to make changes to (i) the Plant, Site or Exclusion Area, or (ii) procedures or practices under
Owner’s control relating to the Plant, Site or Exclusion Area, in each case such that Operator’s
ability to comply with the Operating
License, applicable Law, including NRC regulations, requirements or commitments, would be
materially affected.

     3.5 Offsite Power Supply. Owner shall be responsible for procuring and paying for any
off-site power supply for the Plant; provided that for the avoidance of doubt, Owner may use
third-party agents, including Operator, to assist Owner in procuring such power.

     3.6 External Communications. Subject to Operator’s obligations under the Operating License
and except as otherwise required by applicable Law, Owner shall have control over all non-emergency
external communications relating to the Plant; provided that Operator shall manage routine
communications with the NRC and other agencies exercising regulatory authority over the Plant,
subject to appropriate coordination and consultation with Owner; provided, further, that in the
event that Operator is obligated under the Operating License, or is otherwise required by Law, to
make an external communication relating to the Plant (e.g., emergency plan communications, notices
to a regional transmission organization, independent system operator, etc.), Operator shall provide
reasonable notice to Owner of such communication and, to the extent reasonable and practicable,
coordinate with Owner in the preparation and execution of such communication. For the avoidance of
doubt, this Section 3.6 does not apply to Operator’s external communications relating
solely to its own employees.

     3.7 Owner Access to Employees. Operator shall make appropriate Operator personnel
reasonably available upon Owner’s request to assist Owner in its activities with respect to the
Plant, including providing timely information for regulatory requirements and in support of
litigation, including any litigation that Owner is involved in with respect to the Spent Nuclear
Fuel, the Department of Energy Claim and any Department of Energy Potential Claim.

17

 

     3.8 Decision to Run/Retire. Owner shall have exclusive authority to determine the economic
life of the Plant and in its sole discretion as a result of such determination may decide, subject
to Section 2.3, as an economic matter to (i) retire and decommission the Plant, (ii)
operate the Plant at a reduced generating capacity, (iii) place the Plant in a safe shutdown
condition, and/or (iv) amend the Operating License to extend the licensed life of the Plant.

     3.9 Uprates. Owner retains exclusive authority to be exercised in its sole discretion with
regard to any Uprate of the Plant. If Owner elects to Uprate the Plant, Operator shall cooperate
and coordinate with Owner and any third-party contractors performing work in connection with such
Uprate. With respect to additional services that may be required in connection with an Uprate to
the Plant that are not otherwise covered under this Agreement, Owner shall offer Operator the
opportunity
to enter into negotiations for the provision under a separate agreement of such services prior to
entering into a contract for such work with a third-party provider.

     3.10 Environmental Liabilities. Owner shall remain responsible for all environmental
liabilities related to the Plant; provided that Operator shall be liable for, and shall indemnify
Owner against, all claims, liabilities and damages as may arise as a result of Operator’s failure
to comply with the requirements of this Agreement.

     3.11 Spent Nuclear Fuel.

          (a) Title. Owner shall retain (i) title to all Spent Nuclear Fuel associated with the
Plant, (ii) all responsibility for removing, transporting and the disposal of Spent Nuclear Fuel
off of the Site, and (iii) all liabilities associated with such activities described in the
preceding subsections (i) and (ii); provided that Operator shall be responsible for such
liabilities arising from Operator’s failure to comply with the terms of the Agreement.

          (b) Handling. Operator shall be responsible for the handling of Spent Nuclear Fuel on
the Site.

          (c) ISFSI Operations; Spent Nuclear Fuel Handling. Operator shall handle Spent
Nuclear Fuel and operate the Independent Spent Fuel Storage Installation (“ISFSI”), as
applicable, in accordance with Good Utility Practice, and in compliance with applicable Laws, the
Operating License, Annual Budgets approved by Owner pursuant to Section 10.3 and other
applicable requirements as may be set forth in this Agreement. Without the prior written agreement
of the Parties, neither the Owner nor the Operator shall use the Site for the storage of any Spent
Nuclear Fuel or other nuclear waste other than Spent Nuclear Fuel or other nuclear waste generated
by the Plant. Operator shall maintain appropriate records for the ISFSI, as applicable, and Owner
shall have the right to review and audit those records at any time following reasonable notice.
Owner shall approve any changes to Spent Nuclear Fuel storage and, as applicable, handling
technology to be utilized at the ISFSI.

          (d) DOE Disposal Contract. Owner shall retain the Standard Spent Fuel Disposal Contract.

18

 

     3.12 Decommissioning.

          (a) Owner Retains Obligation to Decommission. Owner shall retain all obligations and
costs related to the decommissioning of the Plant. During the Term, Operator shall (i) assist the
Owner in complying with these obligations, including the maintenance of applicable books and
records and (ii) in consultation with Owner, file with the NRC and any other applicable
Governmental Authority any and all reports relating to the decommissioning of
the Plant and Spent Nuclear Fuel management that are required to be filed under the Operating
License and other applicable Law by the Owner or Operator.

          (b) Decommissioning Funding. Subject to Operator’s obligations to assist the Owner in
complying with applicable decommissioning requirements as specified in Section 3.12(a),
Owner shall retain responsibility for funding decommissioning trust fund reserves and complying
with NRC decommissioning funding requirements for the Plant.

     3.13 Enforcement of Rights.

          (a) Generally. Except with respect to certain liabilities regarding the Plant
retained by the Original Owner under the Purchase and Sale Agreement for which Original Owner
retains control over litigation, Owner shall have control over litigation related to the Facility,
including the Department of Energy Claim and any Department of Energy Potential Claim; provided
that Operator shall have control over legal proceedings relating to (i) its Required Permits
(including the Operating License) and other approvals necessary for it to operate the Facility,
(ii) fines and penalties assessed by the NRC against Operator resulting from its failure to comply
with the Operating License, and (iii) its own employees, including alleged violations of any
collective bargaining agreements to which Operator is a party, labor arbitrations, unfair labor
practice proceedings, and allegations of improper or unlawful conduct against Operator by one or
more employees; provided, further, that with respect to proceedings covered under subsections (i)
and (ii) above, Operator shall provide Owner notice of such proceedings and permit Owner a
reasonable opportunity to participate in such proceedings.

          (b) Original Owner Litigation. With respect to litigation relating to the Plant which
(i) Original Owner may have liability and may assume control over the litigation pursuant to the
Purchase and Sale Agreement and (ii) reasonably could be expected to affect Operator’s rights and
obligations under this Agreement, Owner shall keep Operator advised as to whether Original Owner or
Owner is handling the defense or prosecution of such litigation; provided that Owner’s obligations
under this subsection to provide such information to Operator shall be subject to any applicable
confidentiality provisions which may prohibit or limit the scope of what Owner may communicate to
Operator.

          (c) Operator Costs. Except as to matters for which indemnification of Operator is
not applicable pursuant to ARTICLE XII, to the extent Operator incurs any liability to a
third party in performing its duties under this Agreement, amounts paid by Operator because of
liability incurred by it with respect to such disputes with third parties and Operator’s expenses
in defending such disputes shall be considered Costs of Operation.

19

 

     3.14 Tax Matters. Owner shall be responsible for all Tax planning and/or developing Tax
strategies, related to the Plant as well as all Tax determinations related to the procurement, by
Operator, of items needed
for the operation of the Plant, including equipment, materials, inventory and Nuclear Fuel.
Operator shall cooperate with Owner and use best efforts to pursue any exemption or exclusion
asserted by Owner, at Owner’s sole discretion, from any sales, use, gross receipts or similar
taxes. Owner shall provide Operator with appropriate exemption certificates, direct pay permits or
other applicable documentation to substantiate any such Tax position. Owner shall indemnify,
defend and hold Operator harmless from taxes, penalties, interest and costs of defense, resulting
from any such Tax strategy or determination

ARTICLE IV

OWNERSHIP OF CAPACITY AND ENERGY

     4.1 Ownership of Capacity and Energy.

          (a) Title. Owner shall be entitled to one-hundred percent (100%) of the capacity, energy,
ancillary services and other attributes produced by the Plant during the Term.

          (b) Dispatch Rights; Scheduling. Subject to applicable Law, the Operating License, other
applicable NRC requirements, and other applicable requirements of a Governmental Authority or
Balancing Authority having jurisdiction over dispatching activities, Owner shall have the exclusive
authority to dispatch the Plant.

     4.2 Determination of Output. Owner shall, in coordination with and the assistance of
Operator and subject to Operator’s obligations under ARTICLE II, at all times determine the
electric output from the Plant (the “Net Positive Output”). The Net Positive Output of the
Plant shall be the gross electric power generation of the Plant, less the Plant’s station service
requirements, and less adjustments for losses experienced. In the event the Net Positive Output is
negative (i.e., station service and losses exceed the gross generation), Owner shall be responsible
for providing necessary power at the Plant during such period in accordance with Good Utility
Practice and Section 3.5.

ARTICLE V

COMPENSATION AND PAYMENT

     5.1 Fees. In consideration for performing the services under this Agreement, Owner shall
pay Operator pursuant to Section 5.4(a) the Fees as follows:

          (a) the Operating Management Fee, on a monthly basis and in an amount and as otherwise set
forth in Attachment B.

20

 

          (b) the Asset Management Fee, on an annual basis and in an amount and as otherwise set forth
in Attachment B.

          (c) the Shared Services Fee, on an annual basis and in an amount and as otherwise set forth in
Attachment B.

          (d) the Safety and Regulatory Performance Fee on an annual basis and in an amount and as
otherwise set forth in Attachment B.

          (e) the Capability Factor Performance Fee on an annual basis and in an amount and as otherwise
set forth in Attachment B.

     5.2 Costs of Operation.

          (a) Budgeted Activities. Subject to Section 5.2(b) and Section 5.2(c),
Owner shall pursuant to Section 5.4(b) reimburse Operator for:

               (i) one-hundred percent (100%) of the costs incurred by Operator for Costs of
Operation that are incurred pursuant to an approved Annual Budget up to an amount that is
five percent (5%) above the total budgeted amount for such Costs of Operation;

               (ii) sixty-seven percent (67%) of the costs incurred by Operator for Costs of
Operation that are incurred pursuant to an approved Annual Budget to the extent such costs
are in excess of five percent (5%) above the total budgeted amount for such Costs of
Operation, provided that Operator’s liability to share in thirty-three percent (33%) of the
Costs of Operation pursuant to this Section 5.2(a)(ii) when added to any liability
incurred by Operator to share in Costs of Capital Improvements under Section
5.3(a)(ii), Operator’s liability for Power Scheduling Costs and any liability which
Operator may have incurred with respect to the Capability Factor Performance Fee for that
year shall not exceed an amount equal to the Annual Cap; and

               (iii) one-hundred percent (100%) of the costs incurred by Operator for Costs of
Operation that are incurred pursuant to an approved Annual Budget to the extent (A) such
Costs of Operation are in excess of an amount equal to five percent (5%) above the total
budgeted amount for such Costs of Operation and (B) Operator’s liability for sharing in
Costs of Operation under Section 5.2(a)(ii) when added to Operator’s liability for
sharing in Costs of Capital Improvements under Section 5.3(a)(ii) , Operator’s
liability for Power Scheduling Costs and any liability which Operator may have incurred
with respect to the Capability Factor Performance Fee for that year exceed an amount equal
to the Annual Cap.

A sample calculation illustrating how the mechanics of this provision are expected to work
is attached at Attachment H.

21

 

          (b) Budget Overruns. With respect to any year during the Term, Owner shall have the right
to direct Operator to limit the Costs of Operation for the Plant so as not to exceed five percent
(5%) above the total budgeted amount in the Annual Budget for that year. Operator shall use
commercially reasonable efforts to do so (i) subject to Section 2.3 and (ii) consistent
with Plant safety and the timing of such direction from Owner, in a manner that has the least
effect on the Net Positive Output of the Plant.

          (c) Non-Budgeted Activities.

               (i) Owner shall have the right to mandate and fund any additional Costs of Operation
not in the approved Annual Budget by direct payment for such Costs of Operation or by
reimbursement of Operator for such Costs of Operation pursuant to Section 5.4(b);
provided that such mandated costs shall not be included in the calculation of any payments
that may be (i) due from Operator with respect to a Budget Overrun or (ii) due to Operator
with respect to Eligible Budget Savings.

               (ii) Owner shall not be required to fund and reimburse Operator for Costs of Operation
to be incurred by Operator for operating and maintenance activities that are related to the
Plant that are (A) otherwise required to be paid by Operator pursuant to Section
5.2(a)(ii), (B) materially different from the Costs of Operation included in the
approved Annual Budget, or (C) not included in the approved Annual Budget for that year,
unless Owner has exercised its rights under Section 5.2(c)(i).

     5.3 Costs of Capital Improvements.

          (a) Budgeted Activities. Subject to Section 5.3(b) and Section 5.3(c),
Owner shall pursuant to Section 5.4(b) reimburse Operator for:

               (i) one-hundred percent (100%) of the costs incurred by Operator for Costs of Capital
Improvements that are incurred pursuant to an approved Annual Budget up to an amount that
is five percent (5%) above the total budgeted amount for such Costs of Capital
Improvements;

               (ii) sixty-seven percent (67%) of the costs incurred by Operator for Cost of Capital
Improvements that are incurred pursuant to an approved Annual Budget to the extent such
costs are in excess of five percent (5%) above the total budgeted amount for such Costs of
Capital Improvements, provided that Operator’s liability to share in thirty-three percent
(33%) of the Costs of Capital Improvements
pursuant to this Section 5.3(a)(ii) when added to any liability incurred by
Operator to share in Costs of Operation under Section 5.2(a)(ii), Operator’s
liability for Power Scheduling Costs and any liability which Operator may have incurred
with respect to the Capability Factor Performance Fee for that year shall not exceed an
amount equal to the Annual Cap; and

22

 

               (iii) one-hundred percent (100%) of the costs incurred by Operator for Costs of
Capital Improvements that are incurred pursuant to an approved Annual Budget to the extent
(A) such Costs of Capital Improvements are in excess of an amount equal to five percent
(5%) above the total budgeted amount for such Costs of Capital Improvements and (B)
Operator’s liability for sharing in Costs of Capital Improvements under Section
5.3(a)(ii) when added to Operator’s liability for sharing in Costs of Operations under
Section 5.2(a)(ii), Operator’s liability for Power Scheduling Costs and any
liability which Operator may have incurred with respect to the Capability Factor
Performance Fee for that year exceed an amount equal to the Annual Cap.

A sample calculation illustrating how the mechanics of this provision are expected to work
is attached at Attachment H.

          (b) Budget Overruns. With respect to any year during the Term, Owner shall have the right
to direct Operator to limit the Costs of Capital Improvements for the Plant so as not to exceed
five percent (5%) above the total budgeted amount in the Annual Budget for that year. Operator
shall use commercially reasonable efforts to do so (i) subject to Section 2.3 and (ii)
consistent with Plant safety and the timing of such direction from Owner, in a manner that has the
least effect on the Net Positive Output of the Plant.

          (c) Non-Budgeted Activities.

               (i) Owner shall have the right to mandate and fund any additional Capital Improvements
at the Plant not in the approved Annual Budget by direct payment for such Costs of Capital
Improvements or by reimbursement of Operator for such Costs of Capital Improvements
pursuant to Section 5.4(b); provided that such mandated costs shall not be included
in the calculation of any payments that may be (i) due from Operator with respect to a
Budget Overrun or (ii) due to Operator with respect to Eligible Budget Savings.

               (ii) Except with respect to Extraordinary Capital Expenditures which shall be
reimbursed pursuant to Section 5.3(d), Owner shall not be required to fund and
reimburse Operator for Costs of Capital Improvements to be incurred by Operator for Capital
Improvement activities that are related to the Plant that are (A) otherwise required to be
paid by Operator pursuant to Section 5.3(a)(ii), (B) materially different from the
Costs of Capital Improvements included in the approved
Annual Budget, or (C) not included in the approved Annual Budget for that year, unless
Owner has exercised its rights under Section 5.3(c)(i).

          (d) Extraordinary Capital Expenditures. Subject to Section 2.3, Owner must
review and approve all Extraordinary Capital Expenditures in advance. Owner shall reimburse
Operator pursuant to Section 5.4(b) for all approved Extraordinary Capital Expenditures.

23

 

          (e) Forecasted Capital Improvements. Capital Improvements forecasted as of the
Effective Date to be begun and/or completed during first five years of the Term are specified in
Attachment C.

     5.4 Payment and Billing.

     (a) Fees. Owner is to pay to Operator through a deposit into a segregated bank
account specified by Operator the Fees as follows:

               (i) Fixed Fees. The Operating Management Fee shall be paid monthly in arrears on the first
(1st) Business Day of each month of the Term.

               (ii) Variable Fees. Each of the Asset Management Fee and the Shared Services
Fee shall be paid annually in arrears on a calendar year basis on the first
(1st) Business Day of March during each year of the Term.

               (iii) Incentive Fees. Each of the Safety and Regulatory Performance Fee and
the Capability Factor Performance Fee shall be paid annually in arrears on a calendar year
basis on the first (1st) Business Day of each of March during each year of the
Term.

          (b) Costs of Operation; Costs of Capital Improvements. On the second
(2nd) Business Day of each month of the Term, or on or before the first day of
the Term, as applicable, Operator shall provide to Owner an invoice for all Costs of
Operations and Costs of Capital Improvements incurred by Operator in the previous month.
On the fifteenth (15th) day of each Month of the Term (or on the next Business
Day thereafter if such day does not fall on a Business Day), Owner shall deposit the full
amount of such invoice provided by Operator into a segregated bank account established
pursuant to Section 5.5 solely for the purpose of accepting, holding and disbursing
funds reimbursed to Operator by Owner under this Agreement.

          (c) Adjustments. The Parties acknowledge that the Costs of Operation and Costs of Capital
Improvements ultimately funded and reimbursed by Owner to Operator under this Agreement are to be
based on
the actual Costs of Operation, Costs of Capital Improvements and Pension Fund Contributions
actually incurred by Operator. In the event that (i) Operator subsequently receives recoveries
from third parties with respect to such costs or (ii) such funded and reimbursed costs are found
pursuant to a subsequent audit to have been overpaid or underpaid, then Operator shall credit Owner
for the amount of such third party recovery, and shall credit or charge, as applicable, any such
overpayments or underpayments.

          (d) Payment; No Waiver. No payment of Costs of Operation or Costs of Capital Improvements
made by Owner under this Agreement shall constitute a waiver of any right by Owner to question or
contest the correctness of such payments; provided that Owner must initiate any such contest within
five (5) years of the date of payment by Owner of the disputed Costs of Operation or Costs of
Capital Improvements; provided, further, that in the event such dispute involves recoveries
received by Operator from third parties that have the

24

 

effect of reducing the actual Costs of
Operation or Costs of Capital Improvements incurred by Operator, Owner shall have one (1) year from
receiving notice that Operator has not as required by Section 5.4(c) credited Owner for
such third-party recovery to initiate a contest.

          (e) Netting of Payments. The Parties may discharge mutual debts and payment obligations
owing to each other under this Agreement on the same date through netting, in which case all
amounts owed by each Party hereunder during a monthly billing period shall be netted so that only
the excess amount remaining shall be paid by the Party who owes it.

          (f) No Delay in Payments. No disagreement or dispute of any kind between the Parties
concerning any matter, including the amount of any payment due from Owner to Operator or from
Operator to Owner, as the case may be, or the correctness of any charge made to Owner or Operator,
or any reason, excuse or circumstances, including Force Majeure, shall permit either Party to delay
or withhold payment due and owing under this Agreement, except that Owner shall have the right to
make any payments required of it under protest and to reserve its rights to conduct audits in
accordance with Section 5.6.

     5.5 Bank Accounts. The Parties agree that one or more special bank accounts may be
established and maintained in one or more banks of Operator’s choice, in a manner that will
indicate the custodial nature of the accounts, for the deposit by Owner and disbursement by
Operator of Costs of Capital Improvements and Costs of Operation.

     5.6 Books and Records; Audit and Inspection Rights.

          (a) Books and Records. Operator shall maintain complete books and records of (i) all Costs of Operation and Costs of
Capital Improvements incurred by Operator in connection with its performance of this Agreement,
(ii) all Pension Fund Contributions charged to Owner and (iii) such other activities related to the
performance its obligations under this Agreement as may be specified herein. Such books and
records shall be maintained in accordance with generally accepted accounting methods and practices,
the Operating License and applicable Law. Operator shall notify Owner in writing prior to
implementing any significant change to such accounting methods and recordkeeping practices.

          (b) Audit and Inspection Rights. Upon reasonable notice, Operator shall make available to
Owner all relevant accounting and financial books and records as may be requested by Owner that are
related to all Costs of Operation, Costs of Capital Improvements and Pension Fund Contributions
claimed by Operator under this Agreement. Operator shall be solely responsible to take
commercially reasonable efforts to obtain from any of its subcontractors or suppliers such similar
supporting documentation as Owner may request. Owner shall have the right, at Owner’s expense, to
conduct, or have conducted by an independent accounting firm, audits of such books and records.
Such audits shall be conducted at times reasonably requested by Owner.

     5.7 Pension Plan Costs. Owner shall pay to Operator from time to time additional amounts
equal to the Pension Plan Contribution. Owner shall make such payment to Operator

25

 

not later than
the Business most nearly preceding the date such Pension Plan Contribution is due by depositing the
amount into a bank account established pursuant to Section 5.5.

ARTICLE VI

LIMITATION OF LIABILITY

     6.1 Consequential Damages Waiver. Neither Party nor any of their employees, officers, or
directors shall be liable to the other Party for any special, indirect, incidental or consequential
damages in connection with this Agreement or the performance thereof, whether arising in contract,
tort or otherwise (including strict liability), including the loss of use of the Plant or equipment
therein, increased costs of electrical production or fuel, cost of replacement power or energy or
claims of customers; provided, however, that to the extent either Party is required to pay any
indirect, special, punitive, incidental or consequential damages to a third party in connection
with a claim that falls within the scope of an indemnity given to such Party by the other Party
pursuant to ARTICLE XII, such damages shall not be subject to this limitation on liability;
provided, further, that the obligation of a Party under this Agreement to make certain payments (i)
in the nature of liquidated damages (including the termination payments specified Section
8.8 and the Power Scheduling Damages payments specified in Section 10.2(i), (ii)
regarding the sharing of budget overruns and budget savings as specified in Section 10.3(e) and
10.3(f), or any other undertaking or obligation of
either Party expressly set forth in this Agreement for the payment of money, in each case shall not
be considered indirect, special, punitive, incidental or consequential damages and shall not be
subject to this limitation of liability provision.

     6.2 Limit on Liability. Operator’s aggregate liability (excluding amounts covered by
insurance or assumed as a self-insured retention or deductible) to Owner, arising out of the
Agreement or the performance thereof, whether arising in contract, tort or otherwise (including
strict liability), shall not exceed:

          (a) for any calendar year, one times (i) the sum of the Operating Management Fee, Asset
Management Fee and Incentive Fees actually paid to Operator during such calendar year or, if
greater, (ii) all Fees payable to Operator during such calendar year; and

          (b) in the aggregate over the Term, an amount not to exceed the total of all Fees paid to
Operator over the three (3) calendar years preceding the calendar year in which the event giving
rise to indemnification occurred.

     6.3 Property Damage Waiver. Owner shall waive, and to the maximum extent
permitted will require its insurers to waive all rights of recovery against Operator and
its employees, officers, and directors for damage to or destruction of property, real or
personal, at Plant or Site, whether such property is owned by Owner or by any other Person;
provided, however, that with respect to damage to or destruction of property or personal
injuries not occasioned by or as a result of a “nuclear incident,” as that term is

26

 

defined
in the Atomic Energy Act and the NRC’s implementing regulations, and subject Section
6.2, Operator shall be liable for damage to or destruction of property resulting from
the Gross Negligence and/or Willful Misconduct by Operator or its employees, officers, or
directors, to the extent engaged in the provision of services under this Agreement.

ARTICLE VII

INSURANCE

     7.1 Insurance and Financial Protection to be Maintained by Owner. At no cost to Operator,
Owner shall maintain or cause to be maintained nuclear liability financial protection, nuclear
decontamination and property damage insurance and government indemnification of nuclear liability
arising from the operation and maintenance of the Plant, in forms and amounts required under the
Price-Anderson Act and by the NRC or other Governmental Authorities having jurisdiction over the
matter. Operator shall be a named insured or its equivalent as is the case with Nuclear Electric
Insurance LTD (the nuclear property carrier) on such insurance and indemnification unless such
insurance or indemnification provides
coverage to all Persons held legally liable. Owner shall furnish Operator, upon request, with duly
executed certificates of insurance certifying that such insurance has been provided and that the
insurance companies will give Operator thirty (30) days prior written notice of any material change
in, or cancellation of, such insurance coverage and such certificates shall also specify the dates
when such insurance commences and expires. Owner shall require its insurers to waive all right of
subrogation against Operator and its subcontractors, regardless of fault, for all claims,
including, decontamination of, physical damage to, or loss or destruction of any property at the
location of the Plant as defined in the decontamination and property damage insurance policy for
the Plant and if Owner obtains and maintains insurance for the cost of replacement power, for all
costs of replacement power. Owner further hereby waives rights of recovery from Operator,
including any right to which another may be subrogated, for decontamination of, physical damage to,
or loss or destruction of any property at the location of the Plant as is or may be insured under
its decontamination and property damage insurance policies arising directly or indirectly out of
the performance by the Operator of its obligations under this Agreement.

     7.2 Insurance to be Maintained by Operator. At all times during performance of this
Agreement by Operator, Operator shall maintain or cause to be maintained in full force and effect
the following policies of insurance:

          (a) Workers’ Compensation insurance, and such insurance shall be in accordance with all
applicable state, federal, and maritime laws, including Employer’s Liability Insurance in the
amount of $1,000,000 each accident, $1,000,000 disease policy limit and $1,000,000 disease each
employee;

          (b) Commercial General Liability Insurance including Contractual Liability Coverage covering
liability assumed under this Agreement, Products/Completed

27

 

Operations Coverage, Broad Form Property
Liability Coverage, and Personal Injury Coverage in the amount of $1,000,000 per occurrence /
$2,000,000 general aggregate for Bodily Injury and Property Damage. Coverage to include the
Underground Collapse and Explosion Hazards if applicable;

          (c) Commercial Automobile Liability insurance or qualified self insurance, including all
owned, hired, leased, and/or non-owned vehicles, with a combined single limit of $1,000,000 per
accident;

          (d) If services hereunder are professional in nature, Errors and Omissions Liability Insurance
as may be appropriate and available in an amount not less than $3,000,000 per claim, covering
claims or damages because of injury or damages arising out of any act, error or omission of
Operator in the rendering of professional services; and

          (e) Excess Liability Coverage to provide excess of Sections 7.2(a),(b),(c) and (d)
above, in the amount of $20,000,000 per occurrence.

Operator waives all rights against Owner and its agents, officers, directors and employees for
recovery of damages to the extent these damages are covered by any of the insurance (including
self-insurance) required above. With respect to the insurance provided pursuant to Sections
7.2(b), (c) and (d), Owner shall be included as an additional insured. Operator shall furnish
Owner with duly executed certificates of insurance certifying that such insurance has been provided
and that the insurance companies will give Owner thirty (30) days prior written notice of any
material change in, or cancellation of, such insurance coverage and such certificates shall also
specify the dates when such insurance commences and expires.

ARTICLE VIII

TERM AND TERMINATION

     8.1 Term. The term of the Agreement (“Term”) shall commence upon Effective Date,
and shall, unless earlier terminated in accordance with this ARTICLE VIII, expire on the
date that the Operating License permitting operation of the Plant expires; provided that in the
event that the Operating License for the Plant is granted an initial twenty (20) year extension,
the Term shall automatically be extended for the duration of such extended Operating License term;
provided, further, that (i) Owner shall have the option exercisable no later than twelve (12)
months prior to the expiration of the Operating License term to extend this Agreement through the
completion of decommissioning of the Plant and (ii) in the event that Owner does not exercise this
option, Operator will be offered the opportunity to enter into negotiations for the provision under
a separate agreement of any decommissioning services as Owner may request.

     8.2 Termination. Except as otherwise provided in this ARTICLE VIII, this Agreement
shall terminate at the end of the Term. Upon any termination of this Agreement, the Parties shall:

28

 

          (a) work in good faith to provide for the smooth and orderly (i) transfer of Operator
Personnel responsible for operating the Plant and Site to a new operator and (ii) transition of
responsibility and work in progress, in each case as provided in Section 8.7;

          (b) make such termination payments specified in Section 8.8 as may be applicable given
the circumstances of the termination; and

          (c) transfer the Required Permits held by Operator to the new operator and obtain all required
regulatory approvals, in each case as applicable.

     8.3 Termination for Cause.

          (a) By Either Party. Without limiting other remedies as may be available under this
Agreement, either Party may, upon written notice and expiration of the Transition Period, terminate
the Agreement for cause for the following reasons:

               (i) commencement of voluntary or involuntary bankruptcy, insolvency or similar
proceedings affecting the other Party;

               (ii) failure by the other Party to make a payment that is due and payable after
written demand and subsequent ten (10) day cure period;

               (iii) breach by a Party of any nonpayment obligations under the Agreement in any
material respect after written demand and subsequent thirty (30) day cure period; or

               (iv) breach by the other Party of its representations or warranties in any material
respect.

          (b) By Owner. Owner may, upon written notice and expiration of the Transition Period,
terminate the Agreement for cause if the Operator receives Material Adverse Findings with respect
to Operator’s performance under this Agreement and/or compliance with the Operating License.

     8.4 Termination Due to Governmental or Judicial Act. If a Governmental Authority with
jurisdiction over the Plant or the Parties declares all or part of the Agreement invalid or
unenforceable or substantially impairs either Party’s ability to perform its material obligations
under this Agreement then either Party may terminate the Agreement by providing written notice to
the other Party, such notice to state the circumstance(s) giving rise to the right of termination;
provided, that a Party becoming aware of a circumstance that would permit termination in accordance
with this Section 8.4 shall provide notice of termination within sixty (60) days after
first becoming aware of such circumstance or thereafter shall be barred from exercising a right of
termination in accordance with this Section 8.4 based upon such circumstance(s); provided,
further, that termination in accordance with this Section 8.4 shall be effective one
hundred eighty (180) days after the non-terminating Party receives the notice of termination;
provided, however, that during the period from the provision of the notice of termination, pursuant
to this Section 8.4,

29

 

to the date of termination, the Parties shall negotiate in good faith
to cure the adverse effect that has caused the terminating Party to provide notice of termination
and, if such negotiations are unsuccessful, the Parties shall work in good faith to provide for the
smooth and orderly replacement of Operator personnel and transition of responsibility and work in
progress as provided in Section 8.7 and this Agreement shall not terminate until expiration
of the Transition Period established therein.

     8.5 Termination for Convenience. Owner may terminate this Agreement for convenience by
providing written notice to Operator; provided that the Agreement shall not terminate until after
the completion of the Transition Period.

     8.6 Cross Termination. If, for any reason whatsoever, including expiration of an NRC operating license, failure to renew
an NRC operating License, or termination of an operating agreement with or without cause, Operator
will operate four (4) nuclear power generating units or fewer owned by Owner or an affiliate of
Owner (each an “Affiliated Plant”), then the Parties hereto acknowledge and agree that this
Agreement will automatically terminate without the need of further action by the Parties, unless
the board of Operator’s parent – Equagen LLC – (“Operator’s Parent Board”) notifies the
ultimate parent company of Owner and each such affiliate of Owner (“Owner’s Parent”) in
writing of its decision to override such termination (“Override Notice”) within thirty (30)
days of the date upon which Operator ceased operating five (5) or more Affiliated Plants (the
“Grace Period”). Subject to Section 8.7, automatic termination of this Agreement,
and of each of the operating agreements for each Affiliated Plant then still being operated by
Operator, will become effective on and from the day after the Grace Period expires if no Override
Notice has been delivered by the Operator’s Parent Board to Parent during the Grace Period
(“Trigger Event”). Further, termination of this Agreement a result of the occurrence of a
Trigger Event shall be treated as a termination for convenience by Owner and Owner shall be liable
for the payment of any applicable termination fee specified in Section 8.8.

     8.7 Transition Period. In the event a notice of termination is given pursuant Sections
8.2, 8.3, 8.4, 8.5 or 8.6 then during the Transition Period:

          (a) Approvals. The Parties shall work in good faith to transfer responsibilities,
contracts and Required Permits (including the Operating Licenses) and obtain all required approvals
from Governmental Authorities having jurisdiction over such transfer. Owner shall cooperate with
Operator in an effort to conclude the Transition Period in an expeditious and efficient manner. No
transfer shall occur prior to the receipt of all such required regulatory approvals for the
termination and transfer of operating responsibility over the Plant, including the prior written
consent of the NRC.

          (b) Continued Performance. Operator and Owner shall continue to exercise their
responsibilities under this Agreement and the Operating License during the period of time
(“Transition Period”) until: (i) NRC consent has been obtained for the transfer of
operating responsibility to a new qualified operator and (ii) operating responsibilities have been
transferred to such new operator approved by NRC. Upon completion of the Transition Period,

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Operator shall return the Plant to Owner with a full inventory of spare parts and equipment
comparable to that maintained at similar plants with comparable expected lives.

          (c) Employee Matters. During the Transition Period, Operator shall fully cooperate with
Owner in, and take no action to hinder (such as the solicitation of affected personnel), the
transfer of all Operator work force personnel located at the Plant and Site to Owner or a successor
operator designated by Owner,
together with, as applicable, all funds reserved for their pensions and other post-retirement
employee benefits.

     8.8 Termination Payments.

          (a) Costs of Operation; Costs of Capital Improvements. In any termination under this
ARTICLE VIII, Owner shall pay to Operator (i) the accrued Fees (including the pro rata
portion thereof if the termination date does not fall on the last day of the relevant payment
period) and (ii) Costs of Operation and Costs of Capital Improvements incurred by Operator, in each
case provided or incurred in compliance with the Agreement and prior to expiration of the
Transition Period.

          (b) Regular Termination Expense Payments. In the event of any termination by either Party,
except as otherwise set forth in Sections 8.8(c) and (d), including a termination by Owner
for convenience pursuant to Section 8.5 or by Operator properly for cause pursuant to
Section 8.3, then Owner shall also reimburse Operator for all reasonable demobilization
costs actually incurred by Operator as a result of such termination. Operator shall use all
reasonable efforts to minimize the incurrence of such demobilization costs. For the avoidance of
doubt, reasonable demobilization costs shall include those types of costs specified on
Attachment D. 

          (c) Termination by Owner for Cause; Judicial Act. In the event that Owner terminates for
cause pursuant to Section 8.3 or if there is a termination due to a governmental or
judicial act pursuant to Section 8.4, then Owner shall have:

               (i) no liability to Operator upon termination, except for the payments set forth in
Section 8.8(a); and

               (ii) the right to recover damages for any breach of the Agreement or for any
unperformed balance, subject to the limitations on liability set forth in ARTICLE
VII.

          (d) Termination for Convenience. In the event that this Agreement is terminated for
convenience pursuant to Section 8.5 or as a result of a cross termination pursuant to
Section 8.6, then Owner shall pay a termination fee to Operator calculated pursuant to
Attachment E.

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          (e) Adjustments for Inventory. Any termination payment made pursuant to this Section
8.8 shall be subject to adjustment to reflect Operator’s additions to, or subtractions from,
Owners Inventory, as applicable, as of date of the completion of the Transition Period resulting
from such termination.

ARTICLE IX

INFORMATION PROVIDED TO OWNER

     9.1 Reports to Owner.

          (a) Regular Meetings. Owner shall appoint Chief Operating Officer to be its
representative (“Owner’s Representative”). Operator shall appoint a Chief Operating
Officer to be its representative (“Operator’s Representative”). Each Party may from time
to time change its respective representative by notice to the other Party given in accordance with
Section 15.16. Owner’s Representative and Operator’s Representative shall meet regularly
as needed, at the reasonable request of either Party, but no less than once a calendar quarter, to
review Plant operating performance and the performance of the Operator under this Agreement and to
perform such other tasks as may be required by this Agreement or as mutually agreed to by the
Parties.

          (b) Owner’s Oversight Rights. Owner, including Owner’s Representative, is to have
access to all information Owner may need to enforce its rights and perform its obligations under
this Agreement. In furtherance of this right and subject to Section 15.1, Owner, its
agents, employees, independent contractors, members of its Board of Directors, subcommittees or
special committees of its Board of Directors shall have:

               (i) access to and copies of any reports or evaluations specifically concerning the
operation of the Plant and Site prepared by or for Operator, including reports or
evaluations prepared by or for the NRC, INPO, ANI, or NEIL; and

               (ii) the right to participate in all material (x) management meetings and (y)
meetings, inspections, exit interviews and other interactions between Operator and
regulatory or other entities, including those with the NRC, INPO, ANI or NEIL; in each case
regarding the Plant and Site. Notwithstanding the foregoing, Owner shall not have the
right of access to information maintained by Operator solely in connection with Operator’s
activities as employer with respect to Operator’s own union-represented employees.

     9.2 Site Access. To the extent permitted by applicable Law, including the Operating
License and applicable NRC regulations and requirements, Owner shall have full rights of
unrestricted access to the Site and Plant, including access to all Plant operating information
systems, and Plant operating records, in each case access to which will be provided to Owner upon
request.

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ARTICLE X

CERTAIN OPERATIONAL ISSUES; BUDGETS

     10.1 Inventory. Prior to the Effective Date, Operator shall provide Owner with a list of
inventories of materials, spare parts and equipment (including fuel) either owned by Owner or in
which Owner has the right to use, that are available to operate the Plant (“Owner’s
Inventory”). Operator shall be permitted to utilize Owner’s Inventory for Plant operations.
During the Term, Operator shall procure and maintain supplies (e.g., fuel, spare parts,
consumables, equipment, etc.) as agent for Owner so as to maintain Owner’s Inventory consistent
with Good Utility Practices. Operator may use spare parts and equipment inventory maintained at
other plants operated by Operator for an affiliate of Owner, provided (i) such use is consistent
with applicable regulatory requirements and commitments and (ii) such use does not result in any
degradation of the performance of the Plant. Operator shall replace used Owner’s Inventory at
Owner’s expense, as needed, with materials or equipment of equal quality and serviceability and
track and record the costs and depreciation of such used Owner’s Inventory. Operator shall make
such records available to Owner upon Owner’s request in accordance with Section 5.6.

     10.2 Planned and Unplanned Outages.

          (a) Official Schedule.

               (i) Scope. Refueling outages and all planned outages, de-rates and planned
power reductions of greater than a certain length (to be specified in the applicable
Operator Policies and Procedures, the “Official Schedule Maintenance Period
Threshold”) (each an “Official Schedule Maintenance Activity”), shall in each
case be performed on the Plant in accordance with a schedule established pursuant to this
Section 10.2 (the “Official Schedule”). The Official Schedule may include
planned outages, de-rates and planned power reductions with an expected duration of less
than the Official Schedule Maintenance Period Threshold, and such planned outages, de-rates
and planned power reductions included on the Official Schedule shall in each case be
considered an Official Schedule Maintenance Activity. The Official Schedule shall include
Official Schedule Maintenance Activities for the current calendar year and for each of the
next five (5) calendar years.

               (ii) Development; Content. Operator shall develop the Official Schedule in
accordance with the applicable Operator Policies and Procedures in place as of the
Effective Date until such time such policies and procedures are amended or replaced at the
mutual agreement of the Parties and such policies and procedures shall be included in
Attachment G. The Official Schedule shall specify at a minimum for each Official
Schedule Maintenance Activity the following: the purpose and nature of the
activity; start and end dates, expected cycle energies measured in “effective full
power days” and expected cycle operating load factors. In addition, to the extent required
under the applicable Operator Policies and Procedures, Operator shall include with respect
to each Official Schedule Maintenance Activity the amount of net megawatts, if any,

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expected to be available from the Plant during such Official Schedule Maintenance Activity.

               (iii) Timing. The Official Schedule shall be developed in support of the
Annual Budget and Five Year Forecast for the corresponding calendar years of the Term. The
Official Schedule shall be submitted to Owner for Owner’s approval at the same time as
provided in Section 10.3 for the submittal by Operator to Owner of the Annual
Budget and Five Year Forecast; provided that within thirty (30) days following the
Effective Date, Operator shall submit to Owner for information an initial Official Schedule
covering the remainder of the calendar year in which the Effective Date occurs and for the
following five (5) calendar years. Such initial Official Schedule shall be consistent with
the corresponding Annual Budget and Five Year Forecast pursuant to which Operator is
operating the Plant as of the Effective Date.

               (iv) Owner Approval. Upon receipt of a proposed Official Schedule, Owner
shall have thirty (30) days to review and approve or disapprove the proposed Official
Schedule. Failure by Owner to act within this thirty (30) day period shall be deemed an
approval by Owner of the proffered Official Schedule. During this review period, Owner may
request reasonable modifications to the Official Schedule to the extent the requested
modifications are not contrary to Good Utility Practice, the Operating License or
applicable Law. Owner and Operator shall work together to finalize the Official Schedule
to meet their mutual requirements and the requirements of the Balancing Authority Area, it
being understood that Owner may request changes to the proposed Official Schedule to
accommodate, among other things, its energy delivery and related contractual commitments,
and Operator shall make commercially reasonable efforts to accommodate such requests.

               (v) Peak Period. Unless otherwise approved by the Owner in writing in
advance, Operator shall not schedule any refueling outages for the months of June through
August or the months of January through February.

               (vi) Changes. Operator may from time to time propose changes to an approved
Official Schedule to reflect changes, for example, in start date, end date and load factor
assumptions, in each case as they are identified by Operator with respect to a particular
Official Schedule Maintenance Activity. Owner shall have thirty (30) days from the day of
submittal to act on such proposed changes as provided in Section 10.2(a)(iv).

               (vii) Notification. No earlier than ninety-six (96) hours and not later than
forty-eight (48) hours in advance of a Official Schedule Maintenance Activity, Operator
shall provide a notice to Owner confirming that the
Official Schedule Maintenance Activity will occur pursuant to the then existing
Official Schedule.

     (b) Dispatch Scheduling; Short Term Maintenance Activities(i)
Dispatch Scheduling. Operator shall provide Owner with prior notice of
certain

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information needed by Owner for the purpose of scheduling the dispatch of
the Plant. Such information shall be specified in the Operator Policies and
Procedures and shall include at a minimum, scheduled power reductions or increases
of 10 MW or more, the expected generation output of the Plant available for dispatch
for each day and related power profiles and such notice shall otherwise be in
accordance with the applicable Operator Policies and Procedures in place as of the
Effective Date until such time such policies and procedures are amended or replaced
at the mutual agreement of the Parties and such policies and procedures shall be
included in Attachment G. Owner may request changes to such Operator
Policies and Procedures to reflect changes in applicable Balancing Authority
requirements and such requests shall not be unreasonably denied.

          (ii) Short Term Maintenance Activities. Operator may perform certain
outages, de-rates and power reductions on the Plant that are expected to be less
than Official Schedule Maintenance Threshold and are not on the Official Schedule
(each a “Short-Term Maintenance Activity”) in each case consistent with (x)
Good Utility Practice, the Operating License or applicable Law and (y) as
applicable, Balancing Authority requirements regarding the scheduling of such
maintenance activities. Operator shall schedule Short-Term Maintenance Activities
in accordance with the applicable Operator Policies and Procedures in place as of
the Effective Date until such time such policies and procedures are amended or
replaced at the mutual agreement of the Parties and such policies and procedures
shall be included in Attachment G. Unless otherwise required by applicable
Law or applicable Balancing Authority requirements, Operator shall notify Owner of
its intent to perform a Short-Term Maintenance Activity no later than forty-eight
(48) hours prior to the start of such activity, provided that if such forty-eight
(48) hour prior notice is not otherwise required by applicable Law or applicable
Balancing Authority requirements and is not reasonably possible, then Operator will
notify Owner as soon as is practical. In all cases, Operator shall notify the Owner
prior to any public notification of Operator’s intent to perform a Short-Term
Maintenance Activity at the Plant. Owner may request reasonable modifications to
the proposed schedule and scope of a Short-Term Maintenance Activity to the extent
the requested modifications are not contrary to Good Utility Practice, the Operating
License or applicable Law.

          (c) Unplanned (Forced) Outages, De-rates and Power Reductions. Unplanned manual or automatic shutdowns, de-rates or reductions in power generation of the Plant
(each an “Unplanned Outage Event”), in each case performed in accordance with Operator’s
Policies and Procedures, applicable Balancing Authority Area requirements, the Operating License,
Good Utility Practice or applicable Law, do not require prior notification to the Owner if such
coordination is not reasonably possible. Operator shall notify Owner within one (1) hour after the
initiation of an Unplanned Outage Event; provided that if the nature of such Unplanned Outage Event
and the actions necessary for Operator to address the resulting Plant conditions renders Operator
unable to provide such notification within one (1) hour, Operator is to notify Owner as soon as
Plant operating conditions reasonably allow, and in any

35

 

event, prior to Operator making any public
notifications regarding such outage or power reduction.

          (d) Changes; Updates. Operator shall provide Owner with prior notice of changes or updates
to any details of a notification provided in accordance with Sections 10.2(a), 10.2(b) and
10.2(c) above. Operator shall provide such notice of changes or updates in accordance with the
applicable Operator Policies and Procedures in place as of the Effective Date until such time such
policies and procedures are amended or replaced at the mutual agreement of the Parties and such
policies and procedures shall be included in Attachment G.

          (e) Compliance with Operating License, Applicable Law and Good Utility Practice. The
notification requirements of this Section 10.2 are subject to, and to be performed
consistent with, the requirements of the Operating License, applicable Law and Good Utility
Practice. For the avoidance of doubt, in the event that Operator’s performance of its notification
obligations under this Section 10.2 would cause Operator to be acting (i) in violation of
the Operating License or applicable Law or (ii) contrary to Good Utility Practice so as to imperil
the public health and safety or the material condition of the Plant, then Sections 10.2(f) and
12.2(c) shall be inoperative and Operator shall not be liable to Owner for any related Power
Scheduling Damages incurred by Owner.

          (f) Remedies for Failure to Perform. Subject to Section 12.2(c), Operator shall
reimburse Owner for Power Scheduling Damages incurred by Owner as a result of Operator’s for
failure to comply with the notification requirements of this Section 10.2; provided that
Owner shall take commercially reasonable efforts to mitigate such Power Scheduling Damages. With
respect to each occurrence of Owner incurring Power Scheduling Damages as a result of Operator
failing to perform its notification obligations under this Section 10.2, Owner shall
provide Operator notice of Power Scheduling Damages as soon as is practical after all costs are
known but not later than twelve (12) months following the date of Operator’s failed performance
causing such Power Scheduling Damages.

          (g) Dispute Resolution. Disputes regarding any requirements of this Section 10.2 and each of the Parties
compliance therewith, shall be resolved pursuant to the dispute resolution procedures of
ARTICLE XIII.

     10.3 Annual Budget; Budget Forecasts.

          (a) Annual Budget. For each calendar year of the Term, Operator shall submit to Owner for
review and approval as provided in Section 10.3(c), an annual budget (the “Annual
Budget”) which shall set forth on a monthly basis all underlying assumptions and implementation
plans in connection with the operation and maintenance of, and Capital Improvements to be made to,
the Plant. The Annual Budget shall be (i) itemized on a monthly basis in accordance with generally
accepted accounting practices and shall incorporate in separate sections all Costs of Operation
(excluding Operator’s Fees), anticipated Pension Fund Contributions and Costs of Capital
Improvements to be incurred during the applicable calendar

36

 

year, including costs related to Nuclear
Fuel and planned refueling outages and (ii) otherwise consistent with applicable Law, the Operating
License and Good Utility Practice. Further, the section of the Annual Budget dealing with Capital
Improvements shall cover both (i) discretionary Costs of Capital Improvements for standard Plant
improvements and repairs and (ii) specific project Costs of Capital Improvements for exceptional
Plant improvements and repairs.

          (b) Five Year Forecasts. Operator shall submit to Owner for review and approval when it
submits the Annual Budget to Owner for approval, an update to the five (5) year forecast (updated
on a rolling basis but not less than annually) of Costs of Operation, anticipated Pension Fund
Contributions and Costs of Capital Improvements which shall set forth in accordance with generally
accepted accounting practices all material assumptions and implementation plans in connection with
the operation and maintenance of the Plant (“Five Year Forecast”). In addition to the
Annual Budget listed above, the Five Year Forecast will include a monthly financial forecast for
the second and third year Costs of Operations and Costs of Capital Improvements and an annual
financial forecast for the fourth and fifth year Costs of Operations and Costs of Capital
Improvements.

          (c) Annual Budget Approval Process. On or before August 31st of each year
of the Term, Operator shall submit to Owner for review and approval the Annual Budget for the
following year and the corresponding Five Year Forecast. Owner shall have until September
30th to review, approve and reach agreement with Operator on such submittals. The Board
of Managers for the Operator shall have until October fifteenth (15th) to approve in
writing the Annual Budget for the following Year and the corresponding Five Year Forecast. In the
event that the Board of Managers of the Operator and the Owner cannot reach agreement on the Annual
Budget by November fifteenth (15th) then such disputes shall be resolved in accordance
with ARTICLE XIII and pending resolution and agreement on such disputes, portions of the
Annual Budget may be approved by budget category (e.g., approve all Costs of Operation but
dispute Certain Costs of Capital Improvements). For disputed amounts the second year of the
latest agreed upon latest agreed upon Five Year Forecast shall be used to govern the following
calendar year; provided that such existing Annual Budget shall be increased as necessary to
complete Capital Improvements in progress at the beginning of such year (subject to cancellation of
the project by Owner), the costs of the actual Pension Fund Contributions and the cost of any
Capital Improvements which Operator certifies are otherwise required for the safe operation of the
Plant in accordance with the Operating License and consistent with Good Utility Practice; provided,
however, that, with respect to Costs of Operation or Costs of Capital Improvements, no such
increase in the second year of the last agreed upon Five-Year Forecast shall occur if Owner has
notified the Operator that the Plant is to be permanently shut down prior to, or during, such
budget year.

          (d) Adjustments

          (i) Generally. Adjustments may be made to an approved Annual Budget
from time to time by mutual agreement of the Parties in writing; provided, however,
the consent of the Owner shall not be (A) required for adjustments made to reflect
changes to budgeted anticipated Pension Fund

37

 

Contributions and (B) unreasonably
withheld with respect to changes in the Annual Budget necessary to reflect (1) the
impact from unexpected emergency-related amounts or safety related amounts incurred
by Operator consistent with Section 2.3, (2) expenditures required by the
NRC under the Operating License or otherwise required to be made under applicable
Law, or (3) the impact of Force Majeure, unforeseen circumstances or other events.
Any such adjusted Annual Budget must be in writing and executed by the Owner and
Operator.

          (ii) True-Up Adjustments. Cost categories which merit an automatic
true-up will be identified by the Operator and submitted to the Owner for review and
approval as part of the Annual Budget process. The Operator will notify the Owner
of the actual costs when know or incurred. True-up adjustments may be include,
regulatory or governmental rate increases and utility rate increases.

          (e) Budget Overruns. Operator shall be responsible for thirty-three percent (33%) of the
costs incurred in excess of one-hundred five percent (105%) of an approved Annual Budget without
Owner’s written approval (the “Budget Overrun”); provided that (i) Pension Fund
Contribution related amounts shall not be subject to this Section 10.3(e) and Owner shall
be responsible for one-hundred percent (100%) of all actual Pension Fund Contributions, (ii)
unexpected emergency-related amounts, approved adjustments and true-up adjustments made pursuant to
Section 5.2 (d)(i) and (ii), respectively, shall not be borne by Operator unless such
expenses are the result of Operator’s Gross Negligence and/or Willful Misconduct, (iii) Operator’s
liability with respect to the Budget Overrun shall be capped on an annual basis at an amount equal
to the sum of the Operating Management Fee, the Asset Management Fee and the Incentive Fees earned
in such year with
respect to the Facility (the “Annual Cap”) and (iv) the amount of Operator’s liability for
the Budget Overrun, when added to any amounts for which Operator may be liable to Owner with
respect to the Capability Factor Performance Fee and Power Scheduling Damages for such year, shall
not exceed the Annual Cap.

          (f) Eligible Budget Savings. Operator shall be entitled to thirty-three percent (33%) of
the costs savings realized with respect to such savings that are less than ninety-five percent
(95%) of an approved Annual Budget (the “Eligible Budget Savings”); provided that (i)
Pension Fund Contribution related amounts shall not be subject to this Section 10.3(f) and
Owner shall receive the benefit of any savings realized in the amount of the actual Pension Fund
Contributions incurred when compared to related budgeted amounts of anticipated Pension Fund
Contributions and (ii) Operator’s entitlement with respect to Eligible Budget Savings shall be
capped on an annual basis at an amount equal to the Annual Cap.

          (g) Budgets Are Plant Specific. Each of Owner and Operator acknowledge and agree that (i)
the amounts authorized under an Annual Budget are Plant-specific and (ii) amounts authorized under
an Annual Budget with respect to one Plant may not be redirected to Affiliated Plants or other
nuclear power plants operated by Operator without the prior written consent of the Owner.

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          (h) Reports. For each month during the Term, Operator shall provide to Owner the following
by the:

               (i) tenth (10th) Business Day, a financial report of actual Costs of
Operation and Costs of Capital Improvements charged or allocated directly to Owner in the
preceding month; and

               (ii) fifteenth (15th) Business Day, a financial comparison of such Costs of
Operation and Costs of Capital Improvements to the applicable month in the Annual Budget.

Each monthly report shall specifically identify any areas in which Costs of Operation or
Costs of Capital Improvements are, or are forecasted by the end of the year to be, more
than ten percent (10%) over or under the applicable Annual Budget and to identify any types
of Costs of Capital Improvements or Pension Fund Contributions which differ, or are
forecast to differ, materially from the types of expenditures in the approved Annual
Budget. The format of such reports shall be as mutually agreed upon by the Parties from
time-to-time.

     10.4 Nuclear Fuel.

          (a) Nuclear Fuel Procurement Plan.

          (i) Scope. The procurement of Nuclear Fuel and/or Nuclear Fuel
fabrication services shall be performed by Operator, as agent for Owner and Enexus
Nuclear Fuels Company, pursuant to a plan to be established pursuant to this
Section 10.4 (the “Nuclear Fuel Procurement Plan”) and as may
otherwise be provided for under that certain                      (the “Nuclear Fuel and
Fuel Services Purchase Agreement”). The Nuclear Fuel Procurement Plan shall
cover the current calendar year plus each of the next five (5) calendar years.
Operator may perform its obligations under this Section 10.4 directly or
through the use of subcontractors and agents provided that the use of such
subcontractors or agents shall not otherwise relieve Operator of its obligations to
perform hereunder.

          (ii) Development; Content. Operator shall develop the Nuclear Fuel
Procurement Plan in accordance with the applicable Policies and Procedures in Place
as of the Effective Date until such time such policies and procedures are amended or
replaced at the mutual agreement of the Parties and such policies and procedures
shall be included in Attachment G. The Nuclear Fuel Procurement Plan shall
include at a minimum the following: Operator’s analysis and projections regarding
each nuclear fuel market; the Plant’s physical supply requirements for each step of
the nuclear fuel cycle; strategic recommendations and guidance on the timing of
purchases, price hedging,

39

 

inventory management, contractual terms, diversification,
and counterparties, financial forecasts of Nuclear Fuel expense and Nuclear Fuel
cash flow requirements; and a review against the previous year’s plan.

          (iii) Timing. The Nuclear Fuel Procurement Plan shall be developed in
support of the Annual Budget and Five Year Forecast for the corresponding calendar
years of the Term. The Nuclear Fuel Procurement Plan shall be submitted to Owner
for Owner’s approval at the same time as provided in Section 10.3 for the
submittal by Operator to Owner of the Annual Budget and Five Year Forecast; provided
that within thirty (30) days following the Effective Date, Operator shall submit to
Owner for information an initial Nuclear Fuel Procurement Plan covering the
remainder of the calendar year in which the Effective Date occurs and for the
following five (5) calendar years. Such initial Nuclear Fuel Procurement Plan shall
be consistent with the corresponding Annual Budget and Five Year Forecast pursuant
to which Operator is operating the Plant as of the Effective Date.

          (iv) Owner Approval. Upon receipt of a proposed Nuclear Fuel
Procurement Plan, Owner shall have thirty (30) days to review and approve or
disapprove the proposed Nuclear Fuel Procurement Plan. Failure by
Owner to act within this thirty (30) day period shall be deemed an approval by
Owner of the proffered Nuclear Fuel Procurement Plan. During this review period,
Owner may request reasonable modifications to the proposed Nuclear Fuel Procurement
Plan to the extent the requested modifications are not contrary to Good Utility
Practice, the Operating License or applicable Law. Operator shall make commercially
reasonable efforts to accommodate such requests. Approval by Owner of the Nuclear
Fuel Procurement Plan does not constitute Owner approval of any underlying contract
for Nuclear Fuel or fabrication services needed to implement the approved plan, and
such contracts otherwise shall be subject to approval requirements of this
Agreement, including those set forth for New Operator Contracts in Section
2.2(e) and, as applicable, the Nuclear Fuel and Fuel Services Purchase
Agreement. Certain Nuclear Fuel and/or fabrication procurement contracts may be
executed directly between Owner and third parties. Such contracts shall be
Delegated Contracts and Operator shall negotiate and administer said contracts.

          (v) Changes. Operator may from time to time propose changes to an
approved Nuclear Fuel Procurement Plan. Owner shall have thirty (30) days from the
day of submittal to act on such proposed changes as provided in Section
10.2(a)(iv). For the avoidance of doubt, Operator shall not be required to seek
Owner’s approval to enter into contracts that may reflect a change in the current
Nuclear Fuel Procurement Plan to the extent that (A) such contracts do not require
Owner’s approval under Section 2.2(e) and (B) Operator is already authorized under
this Agreement to enter into such contracts.

40

 

          (b) Nuclear Fuel Costs. Nuclear Fuel costs (including uranium conversion, enrichment and
fabrication costs) will generally be directly paid by Owner, shall be included in the Annual Budget
and, to the extent directly paid by Owner, shall not be considered Costs of Operation.

          (c) Dispute Resolution. Disputes regarding any requirements of this Section 10.4
and each of the Parties compliance therewith, shall be resolved pursuant to the dispute resolution
procedures of ARTICLE XIII.

ARTICLE XI

WARRANTIES AND REMEDIES

     11.1 Warranty. Operator warrants that it shall perform all of its obligations under this
Agreement in a professional and competent manner consistent with (a) Good Utility Practices, (b)
applicable Law, including Nuclear Laws and applicable NRC orders, regulations, policies and other
requirements, (c) applicable industry codes and standards, (d) the Operating Licenses and all other
Required Permits, (e) Operator Policies and Procedures and (f) this Agreement.

     11.2 Remedy. In the event that Operator breaches the warranties set forth in Section
11.1, Owner may at its option require Operator to correct or re-perform such services at
Operator’s sole cost. Owner’s right to require such correction or re-performance, together with
Operator’s assumption of certain cost overruns and liquidated damages pursuant to Sections
10.3(e) and (f) and any liability under Operator’s indemnification obligations under
ARTICLE XII (in each case including any applicable caps on such Operator liabilities and
obligations), shall be the exclusive remedies available to Owner for deficient performance where
Owner is not enforcing its rights, if any, to terminate the Agreement, and shall be in lieu of any
claim for monetary damages available to Owner hereunder for deficient performance, regardless of
whether any claims are based on negligence, breach of warranty, breach of contract, tort, strict
liability or any other legal theory, except for Gross Negligence and/or Willful Misconduct as
provided in ARTICLE VI.

     11.3 DISCLAIMER. THE WARRANTIES AND REMEDIES SET FORTH IN THIS ARTICLE XI
CONSTITUTE THE SOLE AND EXCLUSIVE WARRANTIES AND REMEDIES MADE TO OWNER AND ARE IN LIEU OF ALL
OTHER WARRANTIES OF ANY KIND, WHETHER STATUTORY, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ALL WARRANTIES ARISING
FROM ANY COURSE OF DEALING OR USAGE OF TRADE.

THE PROVISIONS OF THIS ARTICLE XI HAVE BEEN NEGOTIATED BY THE PARTIES HERETO AFTER DUE
CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS AND
WARRANTIES, WHETHER EXPRESS OR IMPLIED OR STATUTORY OTHER THAN THOSE

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REPRESENTATIONS AND WARRANTIES
EXPRESSLY SET FORTH IN THIS AGREEMENT.

ARTICLE XII

INDEMNITY

     12.1 Owner.

          (a) Against Nuclear Liability Arising from Nuclear Incident. Owner shall indemnify
Operator and its officers, directors and employees against any and all liability that any of them
may incur as the result, or arising out, of a “nuclear incident” at or involving (i) the Plant,
(ii) the Site or (iii) Nuclear Material or Nuclear Fuel transported to or from the Plant or Site,
including the transport of Spent Nuclear Fuel from the Plant for disposal or other disposition,
except to the extent that any such liability is the result of the Gross Negligence and/or Willful
Misconduct of Operator in performing its obligations under this Agreement.

          (b) Against Personal Injury; Property Damage. Without limiting Owner’s obligations under
Section 12.1(a), Owner shall indemnify, defend and hold harmless Operator and its
employees, officers and directors against any and all liability any of them may incur in connection
with this Agreement or the performance thereof for personal injury or damage to or destruction of
property (including property of Owner) except to the extent any such liability is (i) covered by
insurance, (ii) covered by Operator’s indemnity provided in Section 12.2 or (iii) the
result of Operator’s Gross Negligence and/or Willful Misconduct in performing its obligations under
this Agreement.

     12.2 Operator. To the extent permitted by applicable Law and subject to the limitations of
liability set forth in Section 6.2 and without limiting Owner’s obligations under
Section 12.1(a), Operator shall indemnify, defend and hold harmless Owner and its
employees, officers and directors against all liability any of them may incur:

          (a) in connection with the Agreement for personal injury to Operator’s employees, officers and
directors except to the extent such liability is the result of the Gross Negligence and/or Willful
Misconduct of Owner;

          (b) arising out of the acts or omissions of Operator (including its officers, employees and
subcontractors) in its performance of its obligations under this Agreement that constitute Gross
Negligence and/or Willful Misconduct; or

          (c) arising out of the acts or omissions of Operator in the performance of its obligations to
make the notifications required under Section 10.2; provided that, to the extent that Owner
actually incurs replacement power costs and related scheduling imbalance fees or their equivalent
as a result of such failure (“Power Scheduling Damages”), Operator’s liability to Owner
under Section 10.2(i) for Power Scheduling Damages shall be (i) in any given month,

42

 

limited
to the amount of Fees due to Operator for that month and any Power Scheduling Damages then due to
Owner in excess of such amount shall be rolled over to the next month and (ii) in any given
calendar year, when added to Operator’s liability for sharing in Costs of Operation under
Section 5.2(a)(ii), Operator’s liability for sharing in Costs of Capital Improvements under
Section 5.3(a)(ii) and any liability which Operator may have incurred with respect to the
Capability Factor Performance Fee for that year, shall not exceed an amount equal to the Annual
Cap; provided, further, in the event that Operator has paid to Owner in any given calendar year
Power Scheduling Damages in an amount that, when added to Operator’s liability for sharing in Costs
of Operation under Section 5.2(a)(ii), Operator’s liability for sharing in Costs of Capital
Improvements under Section 5.3(a)(ii) and any liability which Operator may have incurred
with respect to the Capability Factor Performance Fee for that year, is in excess of the amount of
the Annual Cap for that year, then such excess amount shall be refunded to Operator on the first
(1st) Business Day of March in the next calendar Year.

ARTICLE XIII

DISPUTE RESOLUTION

     13.1 General Provisions.

          (a) In the event of a Dispute that is not resolved in the normal course of business, the
Parties shall attempt to resolve the Dispute promptly by negotiation between senior executives of
the Parties who have authority to settle the controversy (“Senior Executives”). Either
Party may give the other Party written notice of the existence of any such Dispute (a “Dispute
Notice”). All negotiations pursuant to this Section 13.1 are confidential and shall be
treated as compromise and settlement negotiations for purposes of applicable rules of evidence.

          (b) If the Dispute has not been resolved by negotiation between the Senior Executives within
thirty (30) days of receipt of the disputing Party’s notice, the disputing Party shall refer the
Dispute to non-binding mediation under the American Arbitration Association’s (“AAA”)
Commercial Mediation Procedures (the “Request for Mediation”). The place of mediation
shall be Jackson, Mississippi. The Parties shall agree upon a mediator within ten (10) days after
the date upon which the disputing Party referred the Dispute to non-binding mediation (the
“Mediation Referral Date”). If the Parties cannot agree on a mediator within such ten (10)
day period, a mediator shall be selected by AAA.

          (c) Compensation of the mediator and other mediation fees, costs and expenses assessed by AAA
shall be borne equally by the Parties. Each Party shall otherwise pay for its own costs incurred
to participate in the mediation.

          (d) If the Dispute has not been resolved by non-binding mediation within sixty (60) days of
the Mediation Referral Date, then at the request of either Party, the Dispute shall be referred to,
and finally settled by, binding arbitration in accordance with the Commercial Arbitration Rules of
the AAA (the “Rules”) before a single (1) arbitrator. The place of arbitration shall be
Jackson, Mississippi.

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          (e) In any arbitration pursuant to Section 13.1(d), the arbitrator shall be appointed
by the mutual agreement of the Parties within fourteen (14) days of receipt by respondent of a copy
of the demand for arbitration. If the Parties are unable to agree upon an arbitrator within such
fourteen (14) day period, the arbitrator shall be selected by the AAA in accordance with the
listing, ranking and striking procedures in the Rules, with each Party having a limited number of
strikes.

          (f) The hearing on the merits shall be held as expeditiously as practicable, if possible
within ninety (90) days of the appointment of the arbitrator. The award rendered by the arbitrator
shall be in writing, signed by the arbitrator and shall be rendered as soon as possible, but in no
event later than fourteen (14) days after close of the arbitration hearing, unless the arbitrator
shall extend such period for good cause shown. A reasoned award shall not be required unless by
mutual agreement of the Parties. Judgment on the award may be entered in any court having
jurisdiction over the Parties or their assets.

          (g) In no event shall the arbitrator award any punitive, exemplary, special, multiple,
indirect, incidental, economic, consequential or similar damages (including, without limitation,
replacement goods, cost of cover, loss of actual or anticipated profits, loss of business
opportunities, loss of use or equipment downtime or work stoppage, loss of goodwill, or services or
loss of or corruption to data) arising out of or related to this Agreement, regardless of the legal
theory under which such damages may be sought and even if the Parties have been advised of the
possibility of such damages or loss.

          (h) Compensation of the arbitrator and other arbitration fees, costs and expenses assessed by
the AAA shall be borne equally by the Parties. Each Party shall otherwise pay for its own costs
incurred to participate in the arbitration.

          (i) The Parties are committed to the prompt and efficient resolution of disputes.
Accordingly, if one or more disputes arise under this Agreement, such disputes may be brought in a
single arbitration. Upon the request of any Party, any arbitration proceeding instituted under
this Agreement shall be consolidated with any other arbitration proceeding instituted under this
Agreement. The new arbitration shall be so consolidated, provided that the arbitrator for the
prior (or first filed) arbitration determines that: (A) the new arbitration presents significant
issues of law or fact common with those in the pending arbitration; (B) no Party would be unduly
prejudiced by such consolidation; and (C) consolidation under such circumstances would not result
in undue delay for the prior arbitration. Any order of consolidation issued by the arbitrator
shall be final and binding upon the Parties. The arbitrator for the arbitration constituted first
in time shall serve as the arbitrator for the consolidated arbitration. The Parties waive any
right they have to appeal or to seek interpretation, revision or annulment of such order of
consolidation under the rules or in any court. The Parties agree that upon such an order of
consolidation, they will promptly dismiss any arbitration brought under this Agreement, the subject
of which has been consolidated into another arbitral proceeding.

          (j) The procedures specified in this Section 13.1 shall be the sole and exclusive
procedures for the resolution of Disputes between the Parties arising out of or in connection with
this Agreement.

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     13.2  Continued Performance. Subject to the Parties’ rights to terminate pursuant to
ARTICLE VIII, notwithstanding any Dispute between the Parties and pending the final
resolution of a Dispute, each Party shall continue to perform its respective obligations under this
Agreement.

ARTICLE XIV

FORCE MAJEURE

     14.1 Force Majeure. The Parties shall be excused from their respective performance
obligations under this Agreement, and for any delay in the progress or completion thereof, to the
extent such performance is due to an event of Force Majeure that is (i) beyond the reasonable
control of the
affected Party, (ii) not attributable to the affected Party’s own fault or negligence and (iii) not
reasonably capable of being avoided or mitigated by the affected Party; provided, however, no Force
Majeure event shall be deemed to excuse either Party’s obligation to make any payment when due and
payable to the other. The Party wishing to assert the Force Majeure event as a defense must
provide reasonable notice to the other Party that the event prevents or is delaying its performance
and shall take all commercially reasonable measures to overcome the effect of the event (except
that resolution of strikes or other labor disputes shall be solely at such Party’s discretion).
Acts of any Governmental Authority that are directed solely at the Plant or the Operator shall not
constitute Force Majeure.

ARTICLE XV

MISCELLANEOUS

     15.1 Confidentiality.

          (a) Nondisclosures; Restricted Data; Safeguards Information.

               (i) Nondisclosures. Operator shall maintain the confidentiality of all
proprietary, non-public data and information relating to the business affairs of Owner
which Operator may have access to or receive from Owner. Operator shall treat all data,
reports and other written documents developed by Operator and provided to Owner in
connection with Operator’s performance of its obligations under this Agreement as the
proprietary information of Owner. Operator shall not publish or otherwise disclose to
anyone outside of Operator except to its agents, subcontractors, attorneys or consultants
who are under obligations of confidentiality, without the prior written consent of Owner,
and Operator shall not use (other than in connection with the performance by Operator and
its subcontractors of its obligations under this Agreement) any of the proprietary,
non-public information provided to Operator by Owner or developed by Operator pursuant to
this Agreement.

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               (ii) Restricted Data. Operator shall control access to Restricted Data in
accordance with applicable Law, including the Atomic Energy Act and the NRC regulations
issued pursuant thereto.

               (iii) Safeguards Information. Notwithstanding any other provision of this
Agreement, any access to Safeguards Information, shall be subject to the limitations and
conditions of 10 C.F.R. § 73.21. Operator and Owner agree that any information provided
under this Agreement will not be used or controlled in a manner that would (A) compromise
any part of the safeguards plan for the Plant or (B) otherwise be in contravention of
applicable Laws.

               (iv) Sensitive Unclassified Non-Safeguards Information. Operator shall
control information classified as “sensitive unclassified non-safeguards information” by
the NRC consistent with applicable NRC rules, regulations and guidance, including NRC
Regulatory Issue Summary 2005-26 (Control of Sensitive Unclassified Non-Safeguards
Information Related to Nuclear Power Reactors).

          (b) Notification. The Parties further agree to notify each other of any requests by a
third party, including any Governmental Authority, for the disclosure of any information to be
treated as confidential pursuant to this Section 15.1 and to reasonably cooperate with each
other in attempting to preserve the confidentiality of such information to the greatest extent
consistent with applicable Laws.

          (c) Permitted Disclosures. Notwithstanding anything to the contrary herein, neither
Party nor the employees of either of them shall be restricted in any way from disclosing (i) safety
or other information to the NRC on matters within the NRC’s regulatory responsibilities, (ii)
information to INPO, (iii) information to a Governmental Authority to the extent required for
compliance with applicable Law, (iv) information to the Electric Utility Cost Group to the extent
necessary for participation in the Electric Utility Cost Group or (v) the terms of this Agreement
to financial institutions or insurance and bonding companies to the extent necessary to secure and
enforce the insurance protection required under ARTICLE VII.

     15.2 Compliance With Law, Regulations and Site Requirements.

          (a) Compliance. Operator shall conduct activities at the Plant in compliance with the
Required Permits and applicable Law, including the Atomic Energy Act and the NRC regulations issued
thereunder.

          (b) Notification. Work performed under this Agreement is subject to the provisions of
10 C.F.R. Part 21. If assistance in evaluating potential deviations for reportability under Part
21 is required or if Operator is to make any notification to the NRC pursuant to Part 21,
notification shall also be made contemporaneously to Owner.

          (c) Energy Reorganization Act.

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               (i) Section 211 Compliance. Without limiting the generality of Section
15.2(a), both Parties specifically agree to comply with Section 211 of the Energy
Reorganization Act, which prohibits NRC licensees and their contractors and subcontractors
from discharging or otherwise discriminating against any employee engaging in protected
activities described in the Energy Reorganization Act. If either Party’s employees,
agents, subcontractors or suppliers makes any allegations or files a complaint with the
Department of Labor pursuant to the provisions of Section 211 of the Energy Reorganization
Act and if such allegation or complaint is made either directly or indirectly in connection
with services performed pursuant to this Agreement, then the Party first obtaining
knowledge or receiving notice of such allegation or complaint shall promptly notify the
other Party of the complaint and the Parties shall keep each other
advised as to all significant developments regarding such allegation or complaint.
Both Parties further agree that neither Party will enter into any agreement affecting
compensation, terms, conditions and privileges of employment, including any agreement to
settle any claim, allegation or complaint filed by an employee with the Department of Labor
pursuant to Section 211 of the Energy Reorganization Act that contains any provisions
prohibiting or otherwise discouraging an employee from providing the NRC with information
on hazardous conditions, potential violations or any other matters within the NRC’s
regulatory responsibilities.

               (ii) Safety-Conscious Work Environment. Operator and Owner are responsible
for, and dedicated to, achieving and maintaining a work environment that is conducive to
the identification and reporting, and resolution, of conditions or concerns that may have
adverse impact on nuclear safety, and on the safety or health of workers. Operator shall
assure that its employees are continuously aware of conditions potentially adverse to
safety or public health, and its employees having access to the Plant or activities
regulated by the NRC feel free to raise safety concerns to the Plant’s management, into the
Plant’s problem identification and resolution program, to the Plant’s concerns program or
to Governmental Authorities, and to assure a work environment that encourages employees to
openly communicate and report deficiencies or conditions adverse to safety.

               (iii) Access Requirements; Fitness for Duty Standards. As a condition for
access to the Plant or for engaging in activities within the jurisdiction of the NRC
related to the Plant, employees of Operator shall, at all times comply with NRC access
authorization requirements (10 C.F.R. § 73.56) and Fitness-for-Duty standards (10 C.F.R.
Part 26) as implemented by the Plant.

               (iv) Other Employment Discrimination Claims. In addition to its obligation to
notify Owner in accordance with Section 16.3.(a) with regard to an allegation or
complaint in connection with Section 211 of the Energy Reorganization Act, Operator shall
promptly notify Owner, in writing, of any allegation or complaint of unlawful
discrimination in employment arising under any federal, state or local statute filed by an
employee of Operator (or of any subcontractor, agent or supplier) filed with a court or
with a Governmental Authority in connection with Operator’s activities at the Plant and/or
the performance of its obligations under this Agreement.

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     15.3 Amendments. Subject to applicable Law, this Agreement may not be amended, modified or
supplemented except by a written instrument signed by Owner and Operator.

     15.4 Relationship of the Parties. Operator shall at all times act as, and be, an
independent contractor to Owner. This Agreement shall not constitute an agreement of employment
with respect to any of the personnel of Operator assigned to provide services under this Agreement
and shall not be so construed. Owner shall not become the employer or co-employer of any of
Operator’s employees with respect to
Operator’s performance of its obligations under this Agreement. Operator shall bear the sole and
entire liability to all its employees for all employee benefits and workers’ compensation
obligations owed to such employees. Operator shall bear the sole and entire responsibility for the
satisfaction of any obligations imposed upon it as the result of any collective bargaining
agreements or other similar agreements between Operator and its employees or their representatives.
Nothing in this Agreement authorizes the Owner to assume any duty or obligation Operator may have
under any such collective bargaining agreement or similar agreement and such duties or obligations
shall remain at all times the responsibility of the Operator as may be required by the provisions
of such collective bargaining agreements or similar agreements.

     15.5 No Waivers. A Party’s consent to waiver, or acquiescence in prior conduct, of the
other Party that breached or otherwise did not conform to the requirements of this Agreement shall
not be a bar, or be raised as a defense, to such Party’s right to seek enforcement of this
Agreement in accordance with its terms as regards any subsequent or continuing conduct by the other
Party that breaches or otherwise does not conform to the requirements of this Agreement. The
giving of consent by a Party in one instance shall not limit or waive the necessity to obtain such
Party’s consent in any future instance.

     15.6 Assignment and Successors; Delegation. This Agreement shall not be assignable by a
Party by way of change of control or otherwise without the prior written consent of the other
Party, except that this Agreement may be assigned by Owner without the Operator’s consent in the
event of (i) a merger, consolidation or sale of all or substantially all of Owner’s assets, (ii) a
sale by Owner of all of the Plant or (ii) an assignment to an affiliate of Owner. All assignments,
including those permitted under clause (i), (ii) and (iii) above, shall be subject to the receipt
of all required regulatory approvals, including the prior consent of the NRC, as applicable. Any
attempted assignment that is not in compliance with the foregoing sentence shall be void. Subject
to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of
the Parties and their respective successors and assigns. Except as otherwise permitted under this
Agreement, the duties and obligations of Operator hereunder shall not be delegated or
subcontracted, in whole or in part, to any Person except where such delegation or subcontract is
approved in advance by Owner.

     15.7 Invalidity of Terms. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any Law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any

48

 

manner
adverse to any Party. Upon such determination that any term or other provision is invalid, illegal
or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement
so as to effect the original intent of the Parties as closely as possible in order that the
transactions contemplated hereby be consummated as originally contemplated to the greatest extent
possible.

     15.8 Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.

     15.9 Responsibility for Payment of Taxes. Each Party shall be responsible for the payment
of taxes imposed upon it by applicable Law related to the provision or receipt of services
hereunder. Further, each Party shall be responsible for the payment of all property tax payments
related to property owned in its own name.

     15.10 Employee Security, Access and Exit Control. Operator employees working under this
Agreement must comply with all requirements relating to security, access and exit control at the
Plant.

     15.11 Governing Law. This Agreement shall be governed by and construed in accordance with
the law of the State of New York (without giving effect to conflict of law principles) as to all
matters, including matters of validity, construction, effect, performance and remedies.

     15.12 Entire Agreement. This Agreement and the Attachments, Appendices, Exhibits and
Schedules hereto, which are incorporated herein by reference, constitute the entire agreement of
the Parties with respect to the subject matter hereof and supersede all prior and contemporaneous
understandings and agreements of the Parties respecting such subject matter. The Parties intend
that this Agreement should be interpreted in accordance with the plain and unambiguous meanings of
its provisions and that such interpretation should not be affected or influenced by custom of usage
of trade or any course of dealings reflected by transactions between them that preceded this
Agreement.

     15.13 Third Party Beneficiaries. The provisions of this Agreement are for the benefit of
the Parties and not for any other Person.

     15.14 Joint Effort. The Parties acknowledge and agree that the terms and conditions of
this Agreement have been freely and fairly negotiated. Each Party acknowledges that in executing
this Agreement it relies solely on its own judgment, belief and knowledge, and such advice as it
may have received from its own counsel, and it has not been influenced by any representation or
statements made by the other Party hereto or its counsel. No provision in this Agreement is to be
interpreted for or against any Party hereto because that Party or its counsel drafted such
provisions.

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     15.15 Representations.

          (a) Representations of Operator.

               (i) Formation. Operator is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Delaware.

               (ii) Authority. Operator has all requisite power and authority to own, lease
and operate its properties and to carry on its business as is now being conducted. Operator
has heretofore delivered or made available to Owner complete and correct copies of its
certificate of formation and limited liability company operating agreement as currently in
effect.

               (iii) Binding Agreement. Operator has full corporate power and authority to
execute and deliver this Agreement and to perform the duties and obligations contemplated
by this Agreement. The execution and delivery of this Agreement and the performance by
Operator of its duties contemplated hereby has been duly and validly authorized by all
necessary corporate action required on the part of Operator and no other corporate
proceedings on the part of Operator are necessary to authorize this Agreement or to perform
the duties and obligations contemplated hereby. This Agreement has been duly and validly
executed and delivered by Operator and assuming that this Agreement constitutes a valid and
binding agreement of Owner, constitutes a valid and binding agreement of Operator and is
enforceable against Operator in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium and other similar Laws affecting
creditors’ rights generally and to general principles of equity (whether considered in a
proceeding at law or in equity).

               (iv) Required Permits and Approvals. Operator has obtained all permits,
authorizations, consents and approvals from any Governmental Authority required for it to
execute and deliver this Agreement and to perform its duties and obligations under this
Agreement, including the Required Permits and Required Regulatory Approvals.

               (v) Noncontravention. The execution and delivery of this Agreement and the
performance by Operator of its obligations hereunder will not violate any contract or
agreement to which Operator is a party or any applicable Law or decree of any Governmental
Authority.

               (vi) No Litigation. There are no actions, suits or proceedings pending or
threatened against Operator before any Governmental Authority that would if decided
adversely have a material adverse effect on Operator, its business or its ability to
perform this Agreement.

          (b) Personnel Qualifications. Operator shall select and assign Operator employees
pursuant to any applicable collective bargaining agreement or similar agreement or, if

50

 

no such
agreement is applicable, for whom it has reasonable basis to believe are qualified and capable of
fulfilling the roles to which they are assigned.

          (c) Representations of Owner.

               (i) Formation. Owner is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.

               (ii) Authority. Owner has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as is now being conducted.

               (iii) Binding Agreement. Owner has full corporate power and authority to
execute and deliver this Agreement and to perform the duties and obligations contemplated
by this Agreement. The execution and delivery of this Agreement and the performance by
Owner of its duties contemplated hereby has been duly and validly authorized by all
necessary corporate action required on the part of Owner and no other corporate proceedings
on the part of Owner are necessary to authorize this Agreement or to perform the duties and
obligations contemplated hereby. This Agreement has been duly and validly executed and
delivered by Owner and, assuming that this Agreement constitutes a valid and binding
agreement of Operator, constitutes a valid and binding agreement of Owner and is
enforceable against Owner in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other similar Laws affecting creditors’ rights
generally and to general principles of equity (whether considered in a proceeding at law or
in equity).

               (iv) Required Permits and Approvals. Owner has obtained all permits,
authorizations, consents and approvals from any Governmental Authority required for Owner
to execute and deliver this Agreement and to perform its duties and obligations under this
Agreement, including the Required Permits and Required Regulatory Approvals.

               (v) Noncontravention. The execution and delivery of this Agreement and the
performance by Owner of its obligations hereunder will not violate any contract or
agreement to which Owner is a party or any applicable Law or decree of any Governmental
Authority.

               (vi) No Litigation. There are no actions, suits or proceedings pending or
threatened against Owner before any Governmental Authority that would if decided adversely
have a material adverse effect on Owner, its business or its ability to perform this
Agreement.

     15.16 Notices. Any notice, request, consent or other communication permitted or required
by this Agreement shall be in writing or made electronically or by facsimile if promptly confirmed
in writing. Written notices shall be deemed to have been given when deposited in the United States
mail, first class, postage pre-paid and, until written notice of a new address is given, shall be
addressed as follows:

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     If to Operator:

     If to Owner:

[Signature page follows]

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     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first written above.

	 	 	 	 	 
	 	ENOI LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[OWNER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:

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