ASSET PURCHASE AGREEMENT

Exhibit 10.1

ASSET PURCHASE AGREEMENT

by and among

CALCASIEU POWER, LLC,

DYNEGY HOLDINGS INC.,

and

ENTERGY GULF STATES, INC.

Dated as of January 31, 2007

TABLE OF CONTENTS

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TABLE OF CONTENTS

(continued)

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TABLE OF CONTENTS

(continued)

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EXHIBITS AND SCHEDULES

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT, dated as of January 31, 2007, is made and entered into by and among CALCASIEU POWER, LLC, a limited liability company organized and existing under the laws of the State of Delaware (" Seller "), and DYNEGY HOLDINGS INC., a corporation organized and existing under the laws of the State of Delaware (" Dynegy "), on the one hand, and ENTERGY GULF STATES, INC., a corporation organized and existing under the laws of the State of Texas (" Purchaser "), on the other hand.

RECITALS

A. Seller owns the Project (as defined in Article 1).

B. Seller desires to sell, transfer and assign to Purchaser, and Purchaser desires to purchase from Seller, all of Seller’s right, title and interest in and to the Project and certain properties and assets associated therewith or ancillary thereto, on the terms and subject to the conditions hereinafter set forth.

C. Dynegy owns, directly or indirectly, all of the equity interests in Seller.

D. Seller, Dynegy, and Purchaser are entering into this Agreement to evidence their respective duties, obligations and responsibilities in respect of the purchase and sale and related transactions contemplated by this Agreement and the Ancillary Agreements as defined in Article 1 (the " Transactions ").

NOW, THEREFORE, in consideration of the foregoing recitals and the agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.1 Certain Defined Terms . The following terms when used in this Agreement (or in the Schedules and Exhibits to this Agreement) with initial letters capitalized have the meanings set forth below:

" Acquisition Proposal " shall have the meaning set forth in Section 6.14.

" Affiliate " has the meaning set forth in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended and, with respect to Seller, shall also include any ERISA Affiliate.

" After-Tax Basis " means, with respect to any Indemnitee, a basis that will make the Indemnitee economically whole after taking into account the combined Taxes that the Indemnitee must pay on account of (i) incurring the loss giving rise to an indemnity payment and

(ii) receiving such indemnity payment. In case of an indemnity payment subject to Income Tax, the highest Statutory Rate will be used to determine the After-Tax Basis.

" Agreement " means this Asset Purchase Agreement, together with the Schedules and Exhibits hereto.

" Air Permits " means the modified or reissued Louisiana Department of Environmental Quality permits number 0520-00219-V1 (Part 70 Permit and state preconstruction permit) and number 0520-00219-IV0 (Acid Rain Permit).

" Ancillary Agreements " means (i) the Bill of Sale, (ii) the Deed, (iii) the Assignment and Assumption Agreements, and (iv) any additional agreements and instruments of sale, transfer, conveyance, assignment and assumption that may be executed and delivered by any Party or any Affiliate thereof at or in connection with the Closing, if any.

" Assignment and Assumption Agreements " means the Assignment and Assumption Agreements, substantially in the form of Exhibit A, to be executed and delivered by Seller and Purchaser at the Closing.

" Assumed Liabilities " has the meaning set forth in Section 2.3.

" Bankrupt " means, with respect to any entity, such entity (i) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar law, or has any such petition filed or commenced against it, (ii) has a petition filed or commenced against it for a proceeding or cause of action under any bankruptcy, insolvency, reorganization, or similar law and such petition is not dismissed within 30 days of its filing, (iii) makes an assignment or any general arrangement for the benefit of creditors, (iv) otherwise becomes bankrupt or insolvent (however evidenced), (v) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (vi) is generally unable to pay its debts as they fall due.

" Bankruptcy Code " means Title 11 of the United States Code.

" Base Purchase Price " has the meaning set forth in Section 3.2.

" Bill of Sale " means a Bill of Sale, substantially in the form of Exhibit B, to be executed and delivered by Seller at the Closing.

" Business " means the business of operating the Project and generating and delivering electric energy and capacity and Other Associated Electric Products from the Project to its interconnection point with the Transmission System. The Business does not include the marketing and sale of electric energy and capacity or Other Associated Electric Products or the procurement of Fuel for the Project.

" Business Day " means any day on which Federal Reserve member banks in New York, New York are open for business; and a Business Day shall commence at 8:00 a.m. and close at

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5:00 p.m., local time, at the location of the applicable Party’s principal place of business, or at such other location as the context may require.

" C-Ring Repair " means the work performed on the Purchased Assets in accordance with Schedule 4.12.

" Casualty Event " has the meaning set forth in Section 6.7(b).

" Closing " has the meaning set forth in Section 3.1.

" Closing Date " has the meaning set forth in Section 3.1.

" Closing Inventory Report " means an Inventory Report dated as of the Closing Date.

" COBRA " means the Consolidated Omnibus Budget Reconciliation Act of 1986.

" Code " means the Internal Revenue Code of 1986.

" Commercially Reasonable Efforts " means efforts which are reasonably within or should have been reasonably within the contemplation of the Parties on the Effective Date and which do not require the performing Party to expend funds or incur obligations other than expenditures and obligations which are customary and reasonable in transactions of the kind and nature contemplated by this Agreement.

" Competitive Information " has the meaning set forth in Section 6.10(c).

" Confidentiality Agreement " means that certain Confidentiality Agreement, dated as of July 13, 2006 between Entergy Services, Inc. and Seller’s Affiliate, Dynegy Power Corp.

" Consents " means consents, authorizations, approvals, releases, waivers, estoppel certificates, and any similar agreements or approvals.

" Consumables " means any and all of the following items of Inventory intended to be consumed at the Project in the ordinary course of the conduct of the Business: lubricants, chemicals, fluids, lubricating oils, filters, fittings, connectors, seals, gaskets, hardware, wire and other similar materials; maintenance, shop and office supplies; and all other materials, supplies and other items consumed at the Project in the ordinary course of the conduct of the Business.

" Contract " means any contract, agreement, arrangement, license, lease, commitment, sale and purchase order, and other instrument or understanding of any kind, whether written or oral, express or implied.

" Damaged Portion " has the meaning set forth in Section 6.7(c).

" Deed " means one or more Deeds, substantially in the form of Exhibit C, conveying each of the Owned Real Properties included in the Purchased Assets, free and clear of all Encumbrances other than Permitted Encumbrances, with legal descriptions suitable for conveyance of such Owned Real Properties of record, to be executed and delivered by Seller at the Closing.

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" Dynegy " has the meaning set forth in the introductory paragraph of this Agreement.

" DYPM " means Dynegy Power Marketing, Inc.

" Easements " shall have the meaning set forth in Section 2.1(b).

" Effective Date " means the date on which this Agreement has been executed and delivered by Seller, Dynegy, and Purchaser, as specified in the introductory paragraph of this Agreement.

" Electric Interconnection Facilities " means all structures, facilities, equipment, substations, auxiliary equipment, devices and apparatus directly or indirectly required or installed to interconnect and deliver electric energy from the Project to its interconnection point with the Transmission System (such interconnection point being the 230 kV disconnect switches of the Seller-owned generator-step-up transformer(s)), including electric transmission and/or distribution lines, transformation, switching, electric metering equipment, any other metering equipment, communications equipment, and safety equipment, including equipment required to protect (i) the electrical system to which the Project is connected and its customers from faults occurring at the Project and (ii) the Project from faults occurring on the electrical system to which the Project is connected or on other electrical systems to which such electrical system is directly or indirectly connected, provided that all structures, facilities, equipment, substations, auxiliary equipment, devices and apparatus and other similar property that is to be transferred to Purchaser pursuant to the Interconnection Transfer Agreement shall not be included in "Electric Interconnection Facilities".

" Emission Allowances " means all authorizations to emit specified units of Hazardous Substances or any other regulated pollutants from the Project or the Project Site, which units are established by a Governmental Authority with jurisdiction over the Project or the Project Site under Environmental Law, including under (i) an air pollution control and emission reduction program, (ii) a program designed to mitigate impairment of water resources, including coastal and inland waters, navigable waters, surface waters, watersheds, well water or groundwater, or (iii) any other pollution reduction program, in each case regardless of whether the Governmental Authority establishing such authorizations designates such authorizations by a name other than "allowances."

" Employee " means any employee, including an individual deemed to be an employee by Law, of Seller or any of its Affiliates who is employed in a position at or, if employed at another location, who performs all or substantially all his or her work in support of, the Project. References to " former Employees " or " future Employees " mean former or future employees, including individuals deemed to be employees by Law, of Seller or any of its Affiliates or any Predecessors-in-Interest related to the Project, who, during the period of his or her employment with Seller, its Affiliate, or any Predecessors-in-Interest related to the Project, was or is employed in a position at or, if employed at another location, who performed or performs substantially all of his or her work in support of, the Project.

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" Employee Pension Benefit Plan " has the meaning set forth in ERISA §3(2).

" Employee Welfare Benefit Plan " has the meaning set forth in ERISA §3(1).

" Employee Plan " means and includes each Employee Pension Benefit Plan, each Employee Welfare Benefit Plan, and each other plan, contract, agreement, arrangement or policy, whether written or oral, qualified or non-qualified, providing for (i) severance benefits, bonuses, profit-sharing or other forms of incentive compensation; (ii) vacation, holiday, sickness or other time-off; (iii) health, medical, dental, disability, life, accidental death and dismemberment, employee assistance, educational assistance, relocation or fringe benefits or perquisites, including post-employment benefits; and (iv) deferred compensation, defined benefit or defined contribution, retirement or pension benefits, or equity grants that covers any Employee, or that is maintained, administered or with respect to which contributions are made by Seller or any ERISA Affiliate of Seller in respect of Employees or their beneficiaries.

" Encumbrances " means any and all mortgages, pledges, claims, liens, security interests, options, warrants, purchase rights, conditional and installment sales agreements, easements, activity and use restrictions and limitations, exceptions, rights-of-way, deed restrictions, defects or imperfections of title, encumbrances and charges of any kind.

" Entergy " means Entergy Corporation, a Delaware corporation.

" Environment " means the environment, including any of the following media and any living organism or systems supported by any such media: (a) land, including surface land, sub-surface strata, sea bed and riverbed under water (as described in clause (b) hereof) and any natural or man-made structures; (b) water, including coastal and inland waters, navigable waters, surface waters, ground waters, drinking water supplies and waters in drains and sewers, surface and sub-surface strata; and (c) air, including indoor and outdoor air and air within buildings and other man-made or natural structure above or below ground.

" Environmental Assessment " means an environmental site assessment with respect to the Project and the Project Site, dated not more than ninety (90) days prior to the Closing Date, prepared by the Environmental Consultant and performed in compliance with standard ASTM E1527-05 or any such other measures as required by Environmental Protection Agency regulations (including 40 C.F.R. pt. 312) to meet the "all appropriate inquiry" standard of CERCLA § 101, in form and substance satisfactory to Purchaser, in Purchaser’s sole discretion.

" Environmental Claim " means any pending or threatened written or oral notice, claim, demand or other communication by any Person alleging or asserting a Party’s or any other Person’s actual or potential liability for investigation, response, investigation costs, cleanup or Remediation costs, compliance costs, enforcement costs, response costs, suits (whether in law or in equity), defense costs, capital expenditures (whether incurred to construct, alter, replace or modify any of the Purchased Assets as necessary for a Party to perform its obligations under this Agreement or otherwise) or the funding necessary therefor, actual damages, consequential damages, punitive damages, claims for contribution or indemnity, damages to natural resources or other property, personal injuries (including those arising from or related to toxic torts), fines or penalties, based on or resulting from, in whole or in part: (a) the presence or Release of any

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Hazardous Substance at any location, whether or not on property owned by such Person; (b) circumstances forming the basis of any violation or alleged violation of or legal obligation or liability pursuant to any Environmental Law; or (c) claims for Remediation or costs associated with Remediation.

" Environmental Condition " means (a) the presence or Release of a Hazardous Substance in the Environment with respect to the Project or the Project Site (wherever migrating) for which there is, or would reasonably be expected to be, an obligation under Environmental Law to engage in any monitoring, investigation, assessment, treatment, cleanup, containment, removal, mitigation, reporting, response or restorative work, or concerning which a Governmental Authority with jurisdiction over such matter has required or may require the foregoing activities under Environmental Laws, or (b) a violation of Environmental Law, whether discovered or not.

" Environmental Consultant " means Providence Engineering & Environmental Group LLC, or such other recognized environmental consulting firm as shall be acceptable to Purchaser and retained by Purchaser at its cost.

" Environmental Laws " means all Laws relating to pollution or protection of the Environment, natural resources or human health and safety, as the same may be amended or adopted, including Laws relating to Releases of Hazardous Substances or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, transport, disposal or handling of Hazardous Substances, including: the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629; the Oil Pollution Act, 33 U.S.C. § 2701 et seq.; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j; the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.; the Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. § 1201 et seq.; any similar Laws of the State of Louisiana or of any other Governmental Authority having jurisdiction over the Project or the Project Site.

" Environmental Liability " means any Loss that (i) arises under or relates to any Environmental Condition or Environmental Claim, or (ii) is attributable to actions occurring or conditions existing on or prior to the Closing Date in violation of any Environmental Laws.

" Environmental Permits " means any Permit required, issued, or administratively continued under or in connection with any Environmental Law relating to the Project or the Project Site, and includes any and all orders, consent orders or binding agreements issued or entered into by a Governmental Authority under any applicable Environmental Law relating to the Project or the Project Site.

" Environmental Reports " means any environmental audit, environmental risk assessment, environmental site assessment or other investigation of Environmental Conditions at or related to the Project or the Project Site, that is in the possession or control of Seller, Dynegy, or their Affiliates, whether prepared by or on behalf of Seller, Dynegy, or any other Person.

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" ERISA " means the Employee Retirement Income Security Act of 1974.

" ERISA Affiliate " means any trade or business (whether or not incorporated) which is or ever has been under common control, or which is or ever has been treated as, or deemed to be, a single employer, with Seller under Section 4001(b)(1) of ERISA or Section 414 of the Code.

" Excluded Assets " has the meaning set forth in Section 2.2.

" Excluded Liabilities " has the meaning set forth in Section 2.4.

" Excluded Project Contracts " has the meaning set forth in Section 2.2(c).

" Expiration Date " means March 31, 2008, subject to extension pursuant to Section 6.5(h).

" Extension Premium " means $3,000,000.

" Fair Value " means the amount at which the assets, in their entirety, of Seller or Dynegy, as applicable, would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act.

" Federal Power Act " means the Federal Power Act of 1935, 42 U.S.C. § 792 et seq.

" FERC " means the Federal Energy Regulatory Commission.

" Fiduciary " has the meaning set forth in ERISA §3(21).

" Final Allocation " has the meaning set forth in Section 3.5.

" Fuel " means natural gas of sufficient quality to meet all technical specifications of the Project.

" GAAP " means United States generally accepted accounting principles as in effect from time to time, applied on a consistent basis.

" Gas Interconnection Facilities " means all structures, pipelines, facilities, equipment, auxiliary equipment, devices and apparatus directly or indirectly required or installed to interconnect and deliver natural gas from the applicable delivery points for natural gas from Sabine Pipeline LLC’s pipeline or Gulf South Pipeline, L.P.’s pipeline to the Project’s electric generation units.

" Good Utility Practices " means those practices, methods and acts engaged in or approved by a significant portion of the electric utility and power generation industry during the relevant time period, or any of the practices, methods and acts which, in the exercise of reasonable judgment by a prudent electric utility in light of the facts known at the time a decision is made, could have been expected to accomplish a desired result at reasonable cost consistent with good business practices, reliability, safety and expedition and in compliance with Law. Good Utility

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Practices are not intended to be limited to the optimum practices, methods or acts to the exclusion of others, but rather to those practices, methods and acts generally accepted or approved by a significant portion of the electric utility industry in the relevant region, during the relevant time period, as described in the immediately preceding sentence.

" Governmental Authority " means any federal, state, local, foreign or other governmental subdivision, regulatory or administrative agency, commission, body, court, tribunal, arbitral panel, or other authority exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or Tax authority or power over the matters specified or, if such matters are not specified, over Seller, Dynegy, Purchaser, the Project, the Project Site, the Transactions or any related matter.

" Hazardous Substances " means (a) any petrochemical or petroleum products, oil or coal ash, radioactive materials, radon gas, asbestos or asbestos-containing material, polychlorinated biphenyls or transformers or other equipment that contains polychlorinated biphenyls, lead-based paint or urea formaldehyde foam insulation, (b) any chemicals, materials, substances or wastes which are defined or regulated as " hazardous substances ," " hazardous materials ," " hazardous constituents ," " restricted hazardous materials ," " extremely hazardous substances ," " hazardous wastes ," " extremely hazardous wastes " " restricted hazardous wastes ," " toxic substances ," " toxic pollutants ," " toxic air pollutants ," " pollutants ," " contaminants " or words of similar meaning and regulatory effect, including as the foregoing may be defined under any Environmental Law and (c) any other chemicals, materials, wastes or substances, the exposure to or treatment, storage, transportation, use, disposal or Release of which is prohibited, limited or regulated by any Environmental Law.

" HSR Act " means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

" Identified Contingent Liabilities " means the maximum estimated amount of liabilities reasonably likely to result from pending litigation, asserted claims and assessments, guaranties, uninsured risks and other contingent liabilities of Seller or Dynegy, as applicable, after giving effect to the Transactions (including all fees and expenses related thereto but exclusive of such contingent liabilities to the extent reflected in Stated Liabilities), as identified as such and disclosed to Purchaser in terms of their nature and estimated magnitude by responsible officers of Seller or Dynegy, as applicable.

" Imaged Document " has the meaning set forth in Section 11.3.

" Income Tax " means any Tax imposed by any Governmental Authority (i) based upon, measured by or calculated with respect to gross or net income, profits or receipts (including municipal gross receipt Taxes, capital gains Taxes and minimum Taxes) or (ii) based upon, measured by or calculated with respect to multiple bases (including corporate franchise Taxes) if one or more of such bases is described in clause (i), in each case together with any interest, penalties or additions attributable to such Tax.

" Indemnitee " has the meaning set forth in Section 7.3(b).

" Indemnitor " has the meaning set forth in Section 7.3(b).

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" Independent Accounting Firm " means such nationally recognized, independent accounting firm as is mutually appointed by Seller and Purchaser for purposes of this Agreement.

" Intellectual Property Rights " means all proprietary or other legally enforceable rights, including license and similar rights, throughout the world and provided under (a) patent law, including applications therefor pending before any relevant Governmental Authority worldwide, including any additions, continuations, continuations-in-part, divisions, reissues, renewals or extensions based thereon, (b) copyright law, (c) trademark and service mark law, (d) design patent or industrial design law, (e) semi-conductor chip or mask work law, (f) trade secret law, (g) database or Internet law, (h) common law, (i) any Contract relating to the Purchased Assets, and (j) any other Law under any jurisdiction in the world that provides protective or other intellectual property rights, and all rights to sue and recover damages for past, present and future infringement, dilution, misappropriation or other violation of such protective or intangible property rights.

" Intercompany Arrangements " has the meaning set forth in Section 2.2(l).

" Interconnection Agreement " means the Second Revised Interconnection and Operating Agreement between Seller and Purchaser.

" Interconnection Facilities " means all Electric Interconnection Facilities and Gas Interconnection Facilities.

" Interconnection Transfer Agreement " means the Substation and Power Line Transfer Agreement dated as of the Effective Date between Seller and Purchaser relating to the transfer of the assets described in such Substation and Power Line Transfer Agreement.

" Inventory " means any and all of the inventory items and equipment located at the Project Site or purchased specifically for use or consumption exclusively at the Project in the ordinary course of the conduct of the Business, including Consumables; new, repaired or refurbished equipment, components, assemblies, or sub-assemblies; spare, replacement or other parts; tools, special tools, or similar equipment; all associated materials, supplies, software, hardware, firmware, and other goods and other similar items of moveable property; and all maintenance, shop and office furnishings, materials and equipment, including computers, data processing equipment, and related material and equipment that are not Consumables.

" Inventory Report " shall mean an inventory report prepared by Seller in the form set forth in Schedule 2.1(d).

" Knowledge " with respect to a Party means: (a) in the case of Seller and Dynegy, the extent of the knowledge, as of the Effective Date (or, with respect to the certificate delivered pursuant to Section 8.6, as of the date of delivery of the certificate), of any individual who (i) is listed in Schedule 1.1A, or (ii) is serving or has at any time since January 1, 2005 served (and is still an Employee of Seller or an Affiliate of Seller) as the plant manager of the Project (or in any similar capacity) or as a manager with responsibility over material matters relating to the assets and liabilities of the Project; and (b) in the case of Purchaser, the extent of the knowledge, as of the Effective Date (or, with respect to the certificate delivered pursuant to Section 9.6, the date of

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delivery of the certificate), of any individual who is listed in Schedule 1.1B. For purposes of this definition, an individual shall be deemed to have "knowledge" of a particular fact, circumstance or other matter if (x) such individual is or at any time was actually aware of such fact, circumstance or other matter, or (y) such individual could reasonably be expected to discover or otherwise become aware of such fact, circumstance or other matter after due inquiry.

" Laws " means all statutes, rules, regulations, ordinances, Orders, and codes of any Governmental Authority, and includes the common law.

" Leased Personal Property " has the meaning set forth in Section 4.11.

" Liquidated Damages for Costs and Expenses " means a cash payment in the amount of (i) $2,000,000, if the event giving rise to the termination notice occurs prior to March 31, 2008, and (ii) $3,000,000, if the event giving rise to termination notice occurs on or after March 31, 2008; provided , however , that the amount of Liquidated Damages for Costs and Expenses payable in respect of an event giving rise to Purchaser’s right to terminate this Agreement shall be determined by reference to the earliest date on which a termination notice could have occurred based on such event, regardless of any waiver or delay in the giving of such notice; provided , further , however , that to the extent Purchaser shall at any time have the right to terminate this Agreement and receive Liquidated Damages for Costs and Expenses pursuant to more than one of the provisions of Section 10.1 and different amounts of Liquidated Damages for Costs and Expenses would be payable depending on which provision of Section 10.1 is made the basis of such Party’s termination notice, only one of the amounts shall be payable and such amount shall be the greatest of the amounts of Liquidated Damages for Costs and Expenses.

" Losses " has the meaning set forth in Section 7.1(a).

" LPSC " shall mean the Louisiana Public Service Commission.

" LTSA " shall mean that certain Long-Term Parts and Services Agreement dated October 19, 2000 by and between Dynegy Parts and Technical Services, Inc. and Siemens Westinghouse Power Corporation.

" Material Adverse Effect " with respect to Seller or Dynegy, means any occurrence set forth in clause (a) or clause (b) of this definition, and with respect to Purchaser, means any occurrence set forth in clause (a) of this definition: (a) any event, circumstance or condition materially impairing such Party’s authority, right, or ability to perform its obligations under this Agreement or any Ancillary Agreement or to consummate the Transactions; or (b) any change (or changes taken together) in, or effect on, the Project that is materially adverse to the operations or physical condition of the Project, or the operations or prospects of the Business; provided , however , that in no event shall the term Material Adverse Effect include (1) any changes in national or regional electric industry economic conditions generally affecting the national or regional electric industry as a whole, (2) any changes in the price of natural gas generally prevailing in Louisiana, (3) any change in the price of real estate generally prevailing in the Entergy service territories in the SERC Region, (4) any changes in the price of electric generating facilities generally prevailing in the Entergy service territories in the SERC Region, and (5) any occurrence that would equally apply to similarly-situated electric generation projects located in the same region as the Project.

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" Monthly Operating Report " shall mean a Monthly Management Report for the applicable period, including therein technical discussions of capacity availability, energy production, operations and maintenance and regulatory compliance of the Project, with attached reports covering such matters as have been covered in reports previously provided by Seller or are otherwise reasonably requested by Purchaser.

" Notice of Claim " has the meaning set forth in Section 7.3(b).

" Notice Period " has the meaning set forth in Section 7.4.

" Off-Site Location " means any real property related to or used in connection with the Project other than the Real Property.

" Order " means any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award of a Governmental Authority.

" Other Associated Electric Products " means all of the services and products associated with capabilities or operational attributes or regulatory treatment of a generating unit, including the capability to provide ancillary services, reserves, operational functions (e.g., black start capability), receipt or allocation or Emissions Allowances and other power generation related services and products.

" Owned Real Property " has the meaning set forth in Section 2.1(a).

" Party " means Seller, Dynegy, or Purchaser, as the context requires; " Parties " means, collectively, Seller, Dynegy, and Purchaser.

" PBGC " means the Pension Benefit Guaranty Corporation established by ERISA.

" Permits " means any permits, registrations, licenses, franchises, certificates and Consents of Governmental Authorities, including Environmental Permits, to the extent related to the Project, the Project Site, or the Business.

" Permitted Encumbrances " means (i) liens for Property Taxes and other governmental charges and assessments which are not yet due and payable or the validity of which is being contested in good faith by appropriate proceedings and disclosed in writing to Purchaser, (ii) mechanics’, materialmens’, laborers’, carriers’, workers’, repairers’ and other similar liens arising in the ordinary course of business for sums not yet due and payable, so long as the amount of any such sum in respect of which any such lien shall have arisen does not exceed $50,000, individually, and all such sums do not exceed $250,000 in the aggregate, (iii) all matters revealed on the Title Commitment to which Purchaser does not object in accordance with Section 6.16, (iv) matters affecting title to the Project Site that do not, and could not, adversely affect Purchaser’s ability to operate and maintain the Project and conduct the Business consistent with past practice, and (v) Encumbrances with respect to any of the Purchased Assets and created by or resulting from the acts or omissions of Purchaser or this Agreement.

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" Person " means any individual, partnership, joint venture, corporation, limited liability company, estate, trust, association or unincorporated organization, any Governmental Authority or any other entity.

" Predecessor-in-Interest " means any predecessor-in-interest with respect to the Project, including Dynegy Operating Company, and its Affiliates.

" Prepaid Items " has the meaning set forth in Section 2.1(j).

" Present Fair Salable Value " means the amount that could be obtained from an independent willing buyer if the assets of Seller or Dynegy, as applicable, were sold with reasonable promptness in an arm’s-length transaction under normal selling conditions for the sale of comparable business enterprises.

" Project " means the 322 MW (nominal rating) natural gas-fueled electrical generation plant located in or near Sulphur, Louisiana, consisting of two Siemens turbines (Class 501 FC and Class 501 FD2 units) and all related assets and properties, real, personal and mixed, and interests therein (to the extent of Seller’s interest), including ancillary equipment, Interconnection Facilities and Protective Apparatus and any additions thereto or replacements thereof.

" Project Contract " means any Contract to which Seller is a party, by which Seller or any of the Purchased Assets is bound, or to which an Affiliate of Seller is a party that relates to the Project or the Business.

" Project Insurance Policies " means all insurance policies carried by or for the benefit of Seller or any Affiliate thereof with respect to the ownership, operation or maintenance of the Project, the Project Site or the Business, including all liability, workers compensation, executive risk, fiduciary liability (or any other ERISA plan of protection) property damage, self insurance arrangements, retrospective assessments and business interruption and/or outage policies in respect thereof.

" Project Site " means (a) the approximately 20.37 acre parcel of land upon which the Project is located, near Sulphur, Louisiana; and (b) the Easements.

" Property Tax " means any Tax resulting from and relating to the assessment of real or personal property by any Governmental Authority.

" Protective Apparatus " means such equipment and apparatus, including protective relays, circuit breakers and the like, necessary or appropriate to isolate the Project from the electrical system to which they are connected consistent with Good Utility Practices.

" Purchase Price " has the meaning set forth in Section 3.3.

" Purchased Assets " has the meaning set forth in Section 2.1.

" Purchased Inventory " has the meaning set forth in Section 2.1(d).

" Purchased Permits " has the meaning set forth in Section 2.1(f).

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" Purchased Project Contracts " has the meaning set forth in Section 2.1(e).

" Purchaser " has the meaning set forth in the introductory paragraph of this Agreement.

" Purchaser Claims " has the meaning set forth in Section 7.1(a).

" Purchaser Group " has the meaning set forth in Section 7.1(a).

" Purchaser’s Notice " has the meaning set forth in Section 6.16(c).

" Purchaser’s Required Consents " means the notices to or the Consents of any Person other than a Governmental Authority required by Purchaser to be made or obtained by or on behalf of Purchaser prior to consummation of the Transactions, including the notices and Consents specified in Schedule 1.1C.

" Purchaser’s Required Regulatory Approvals " means the notices to, applications or other filings with or approvals, statements, waivers, authorizations or other Consents of or from any Governmental Authority of competent jurisdiction over any of the Parties (including Purchaser’s retail operations), any other Affiliates of Purchaser, the Project, or the Transactions that are required (a) for Purchaser to consummate the Transactions and to receive authority from the Governmental Authority having jurisdiction over Purchaser’s retail rates to amend its certification and to recover all costs associated with the Transactions in a manner acceptable to Purchaser in its sole discretion (through base rates, fuel adjustment charges, and/or such other rates or charges as may be applied pursuant to a rider or otherwise) pursuant to a finding that the consummation of the Transactions by Purchaser is prudent and in the public interest or such other regulatory treatment as is deemed acceptable to Purchaser in the exercise of its sole and absolute discretion, including those specified in Schedule 1.1D, or (b) to be made or obtained by or on behalf of Purchaser prior to the Closing, including those specified in Schedule 1.1D.

" Real Property " means the Owned Real Property and the Easements.

" Recorded Documents " has the meaning set forth in Section 6.16(a)(ii)(ii).

" Release " shall have the meaning set forth in Environmental Laws, but also shall include any actual or threatened releasing, spilling, leaking, discharging, abandoning, disposing, pumping, pouring, emitting, emptying, injecting, leaching, dumping, depositing, dispersing, allowing to escape or migrate into or through the Environment or the Project Site of any Hazardous Substance, including the abandonment or discarding of any Hazardous Substance in barrels, drums, or other containers, into or within the Environment, including the migration of any Hazardous Substance into, under, on, through, or in the air, soil, subsurface strata, surface water, groundwater, drinking water supply, any sediments associated with any water bodies, or any other environmental medium, regardless of where such migration originates. The term " Released " shall have a corresponding meaning.

" Remediation " means any action of any kind to address an Environmental Condition or the Release or the presence of Hazardous Substances into or in the Environment at the Project Site or any Off-Site Location, including the following: (i) monitoring, investigation, assessment, treatment, clean-up, containment, remediation, removal, mitigation, response or restoration

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work; (ii) obtaining any Permits necessary to conduct any such work; (iii) preparing and implementing any plans or studies for such work; (iv) obtaining a written notice from a Governmental Authority with jurisdiction under applicable Environmental Laws that no material additional work is required by such Governmental Authority; (v) any response to, or preparation for, any inquiry, order, hearing or other proceeding by or before any Governmental Authority with respect to any such Environmental Condition, Release or presence of Hazardous Substances; and (vi) any other activities that are appropriate or required under Environmental Laws to address an Environmental Condition, or the presence or Release of Hazardous Substances in or into the Environment at the Project Site or any other Off-Site Location.

" Reportable Event " has the meaning set forth in ERISA §4043.

" Seller " has the meaning set forth in the introductory paragraph of this Agreement.

" Seller Claims " has the meaning set forth in Section 7.2(a).

" Seller Group " has the meaning set forth in Section 7.2(a).

" Seller Litigation " has the meaning set forth in Section 4.7.

" Seller’s Required Consents " means the notices to or the Consents of any Person other than a Governmental Authority that are required by Seller to be made or obtained by or on behalf of Seller prior to the consummation of the Transactions, including the notices and Consents specified in Part I of Schedule 4.23.

" Seller’s Required Regulatory Approvals " means the notices to, applications or other filings with or Consents of or from any Governmental Authority that are required (i) for Seller and Dynegy to consummate the Transactions, including those specified in Part II of Schedule 4.23 and (ii) by Seller or Dynegy to be made or obtained by or on behalf of Seller prior to the Closing, including those specified in Part II of Schedule 4.23.

" SERC Region " means the North American Electric Reliability Council region served by the members of the Southeastern Electric Reliability Council.

" Stated Liabilities " means the recorded liabilities (including contingent liabilities that would be recorded in accordance with GAAP) of Seller or Dynegy, as applicable, after giving effect to the Transactions, determined in accordance with GAAP.

" Statutory Rate " means the combined federal and state Income Tax rate that would be applied to taxable income taking into account, where applicable, the deductibility of either the federal or state Income Tax to compute the Tax liability for either federal or state purposes.

" Survey " has the meaning set forth in Section 6.16(a)(iii)(iii).

" Tangible Personal Property " has the meaning set forth in Section 2.1(c).

" Tax " or " Taxes " means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits,

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carbon, Btu, fuel, environmental, customs duties, tariff, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property (including assessments, fees or other charges based on the use or ownership of real property, all Property Tax, and ad valorem tax), personal property, transactional, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated or other tax of any kind whatsoever, including any interest, penalty or addition thereto, whether disputed or not, including any item for which liability arises as a transferee or secondary liability in respect to any tax (whether imposed by Law, contractual agreement or otherwise) and any liability in respect of any tax as a result of being a member of any affiliated, consolidated, combined, unitary or similar group.

" Tax Return " means any return, report, information return, declaration, claim for refund or other document, together with all amendments and supplements thereto (including all related or supporting information), required to be supplied to any Governmental Authority responsible for the administration of Laws governing Taxes, including information returns or reports with respect to backup withholding and other payments to third parties.

" Termination Date " has the meaning set forth in Section 10.1.

" Third Party Claim " means a suit, action, proceeding or claim made or threatened by any Person, other than one made or threatened by a member of the Seller Group or the Purchaser Group (i) for the enforcement of its rights under or relating to this Agreement or (ii) for which a specific remedy is provided under this Agreement. "Third Party Claim" shall include any claim for the costs of conducting Remediation or seeking an Order or demanding that a Person undertake Remediation.

" Title Commitment " has the meaning set forth in Section 6.16(a)(i).

" Title Insurer " has the meaning set forth in Section 8.7.

" Title Objection " has the meaning set forth in Section 6.16(c).

" Title Policy " has the meaning set forth in Section 8.7.

" Tolling Agreement " means the Master Power Purchase and Sale Agreement Confirmation dated as of the Effective Date between Entergy Services, Inc. as agent for the Entergy Operating Companies specified therein and DYPM.

" Transactions " has the meaning set forth in the Recitals.

" Transmission System " means the transmission system of Purchaser, or of any Person succeeding to the ownership or control thereof, including the substation to which the Project is interconnected.

" Transfer Tax " means any sales Tax, transfer Tax, transaction Tax, conveyance fee, use Tax, real property transfer Tax, stamp Tax, stock transfer Tax or other similar Tax, including any related penalties, interest and additions thereto.

" Uninsured Loss Amount " has the meaning set forth in Section 6.7(d).

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" WARN Act " means the Worker Adjustment and Retraining Notification Act of 1988.

" Warranties " has the meaning set forth in Section 2.1(h).

Section 1.2 Certain Interpretive Matters . In this Agreement, unless the context otherwise requires:

• (a) the singular number includes the plural number and vice versa;

  (b) reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity;

  (c) reference to any gender includes each other gender;

  (d) reference to any agreement (including this Agreement), document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof;

  (e) reference to any Article, Section, Schedule or Exhibit means such Article, Section, Schedule or Exhibit of or to this Agreement, and references in any Article, Section, Schedule, Exhibit or definition to any clause means such clause of such Article, Section, Schedule, Exhibit or definition unless otherwise specified;

  (f) any accounting term used and not otherwise defined in this Agreement or any Ancillary Agreement has the meaning assigned to such term in accordance with GAAP;

  (g) "hereunder," "hereof," "hereto" and words of similar import are references to this Agreement as a whole and not to any particular Section or other provision hereof or thereof;

  (h) "including" (and with correlative meaning "include") means including without limiting the generality of any description preceding such term;

  (i) relative to the determination of any period of time, "from" means "from and including," "to" means "to but excluding" and "through" means "through and including;"

  (j) reference to any Law (including statutes and ordinances) means such Law as amended, modified codified or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder;

  (k) any agreement, instrument, insurance policy, statute, regulation, rule or order defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument, insurance policy, statute, regulation, rule or order as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by Consent and (in the case of statutes, regulations, rules or orders) by succession of comparable successor statutes, regulations, rules or orders and references to all attachments thereto and instruments incorporated therein;

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• (l) all calculations and computations pursuant to this Agreement shall be carried and rounded to the nearest two (2) decimal places;

  (m) reference to any "day," "month" or "year" shall be to a calendar day, month or year;

  (n) this Agreement and any documents or instruments delivered pursuant hereto shall be construed without regard to the identity of the Person who drafted the various provisions of the same and any rule of construction that a document is to be construed against the drafting party shall not be applicable either to this Agreement or such other documents and instruments;

  (o) the captions of the various Articles, Sections, Exhibits and Schedules of this Agreement have been inserted only for convenience of reference and do not modify, explain, enlarge or restrict any of the provisions of this Agreement; and

  (p) in the event of any conflict that cannot be reasonably reconciled between the provisions of this Agreement and those of any Exhibit or Schedule, the provisions of this Agreement shall control and prevail.

ARTICLE 2

PURCHASE AND SALE

Section 2.1 Purchased Assets . Upon the terms and subject to the conditions contained in this Agreement, at the Closing, Seller shall (or, if applicable, shall cause its Affiliates to) sell, convey, assign, transfer and deliver to Purchaser, and Purchaser shall purchase and acquire from Seller, all of the assets, properties and rights of every kind, nature, character and description, relating to, used, or held for use in the Business or for or at the Project (directly or indirectly, in whole or in part), whether real, personal, or mixed, whether tangible or intangible, whether accrued, contingent, or otherwise, in existence on the Effective Date and any additions thereto on or before the Closing Date, whether or not carried on the books and records of Seller, and wherever located, including all of Seller’s right, title and interest in and to the assets relating to, used, or held for use in the Business or for or at the Project described below, but in each case excluding all Excluded Assets (collectively, the " Purchased Assets "):

• (a) All real property owned by Seller, including fee interests, water rights, mineral rights and other owned interests in real property, including the parcels of real property, water rights and other real property rights described in Schedule 2.1(a), and all appurtenances thereto, together with all buildings, fixtures, component parts, other constructions and other improvements thereon and thereto, including all construction work in progress (the " Owned Real Property ");

  (b) All privileges, licenses, rights-of-way, and easements in gross or appurtenant to the Owned Real Property held by Seller or its Affiliates as well as the right, by way of license, right-of-way, easement or the like, to permit access to the Project or locate or operate the Business, including those described in Schedule 2.1(b) (the " Easements ");

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• (c) All machinery, mobile or otherwise, equipment, vehicles, pumps, fittings, tools, furniture and furnishings, meter equipment, Leased Personal Property, and other tangible movable property located at the Project Site or purchased by Seller or its Affiliates specifically for use or consumption exclusively at the Project that are not Inventory, including assets temporarily off-site for repair or other purposes or being shipped to Seller or the Project Site and including the property listed or described in Schedule 2.1(c) (collectively, the " Tangible Personal Property ");

  (d) All Inventory, including the Inventory listed or described in Schedule 2.1(d) (the " Purchased Inventory ");

  (e) The Project Contracts listed or described in Schedule 2.1(e) (the " Purchased Project Contracts ") other than those Project Contracts subject to Section 2.2(m);

  (f) All Permits, including those listed or described in Schedule 2.1(f) (the " Purchased Permits "), to the extent legally transferable by sale;

  (g) All books, records, documents, drawings, reports, data, and safety, instruction and/or maintenance manuals relating to the Purchased Assets, the Project, the Project Site, or the Business, including (i) Environmental logs, data sheets, studies, reports, and records, including correspondence received by or sent to Governmental Authorities; (ii) Permit records and files; emergency, accident, incident, safety and inspection reports and records that are not covered by the attorney-client privilege; (iii) operating, maintenance, and repair logs, data sheets, reports and records; (iv) vendor lists and vendor purchase orders and records; (v) engineering design and construction drawings and plans, including as-built drawings; (vi) blueprints; (vii) specifications; (viii) records, plans, reports, and drawings relating to the Real Property; (ix) any existing drawings in AutoCAD or similar programs, existing OEM manuals, and other existing information and data (in electronic form where applicable) necessary to enable parallel migration to Purchaser’s information systems; and (x) the items listed or described in Schedule 2.1(g) (provided that Seller may make and keep additional copies of any of the foregoing, subject to the requirements of Section 6.10(c));

  (h) All unexpired warranties, indemnities, and guarantees from manufacturers, contractors, architects, engineers, consultants, suppliers and other third parties, including the warranties and guarantees listed or described in Schedule 2.1(h) (the " Warranties ");

  (i) All claims or causes of action against any third parties, including indemnification claims, contribution claims, warranty claims, and claims for refunds, prepayments, offsets, recoupment, insurance proceeds, condemnation awards, judgments and the like, other than the claims or causes of action relating to pre-Closing Date periods that are listed or described in Schedule 2.1(i);

  (j) All advance payments, prepayments, prepaid expenses, deposits or the like that are listed or described in Schedule 2.1(j) (collectively, the " Prepaid Items ");

  (k) All accounts, rights, or allowances involving Emissions Allowances, if any, that have been or will be granted or allocated to, or otherwise associated with, the Project;

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• (l) All right, title, and interest of Seller or its Affiliates in and to the Interconnection Facilities;

  (m) All right, title, and interest of Seller and its Affiliates, if any, in and to the names "Calcasieu Generation Station," "Calcasieu Generation Facility," "Calcasieu Power Facility," "Calcasieu Power Plant," "Calcasieu Power Station," and "Calcasieu Plant," it being understood that Purchaser shall not acquire any right to use the name of Seller or any related or similar trade names, trademarks, service marks, corporate names, corporate logos or any part, derivative or combination thereof;

  (n) Subject to Section 2.1(m), patents and patent rights, trademarks and trademark rights, inventions, copyrights and copyright rights, computer programs and other software, know-how, domain names, websites, source and object codes, and all data used by Seller or its Affiliates with respect to the Business or the Project; and

  (o) Except for the Excluded Assets, all other assets, properties, rights and interests of Seller of every kind, nature, and description, whether tangible or intangible, real, personal, or mixed, accrued, contingent or otherwise, and wherever situated, relating to, used, or held for use in the Business or for or at the Project, directly or indirectly, in whole or in part, in existence on the Effective Date and, subject to the other terms hereof, any additions thereto on or before the Closing Date, whether or not carried on the books and records of Seller, in each case to the extent now or hereafter located at the Project or owned by Seller.

Section 2.2 Excluded Assets . Nothing in this Agreement shall constitute or be construed as conferring on Purchaser, and Purchaser shall not be entitled or required to purchase or acquire, any right, title or interest in, to or under the following assets, interests, properties, rights, licenses or contracts (the " Excluded Assets "):

• (a) Any Tangible Personal Property, Inventory or Prepaid Items to the extent consumed or disposed of prior to the Closing, in each case in the ordinary course of the conduct of the Business consistent with past practice and the provisions of this Agreement, including Section 6.4;

  (b) Any of the assets, properties, rights or interests, owned, used, occupied or held by or for the benefit of Seller that are listed or described in Schedule 2.2(b);

  (c) All of the rights and interests, and all of the liabilities and obligations, of Seller in, to, under or pursuant to any Project Contract listed or described in Schedule 2.2(c) (collectively, the " Excluded Project Contracts ");

  (d) The rights of Seller under, and any funds and property held in trust or any other funding vehicle pursuant to, (i) any Employee Pension Benefit Plan or Employee Welfare Benefit Plan or other Employee or benefit records, (ii) any other severance pay, stay pay, salary continuation, bonus, incentive, stock option or other equity-based, retirement or early retirement, pension, profit sharing, deferred compensation, welfare, vacation/holiday plans, contracts, programs, funds or similar arrangements, and (iii) all other employee fringe or other benefit plans, contracts, programs, funds or similar arrangements, whether written or oral, qualified or nonqualified, funded or unfunded, foreign or domestic adopted, maintained, sponsored,

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• contributed to or made available for the benefit of Employees or former Employees and/or with respect to which Seller or any Affiliate of Seller or any Predecessor-in-Interest has any ongoing obligation or actual or potential ongoing liability whatsoever (all of the above being hereinafter referred to individually as an " Employee Plan " and collectively as the " Employee Plans "), and in particular, but without limitation, neither Purchaser nor any of its Affiliates shall be deemed to have assumed any Employee Plan by reason of any provision of this Agreement;

  (e) Except to the extent they constitute Purchased Assets under Section 2.1(g) or otherwise hereunder, books and records of Seller, including Seller’s minute books, limited liability company interest books, ledger and company seal;

  (f) Cash, cash equivalents, bank deposits, accounts and notes receivable, trade or otherwise, including any posted collateral, advance payments, prepayments, prepaid expenses, deposits or the like, other than the Prepaid Items;

  (g) Rights of Seller arising under this Agreement or any instrument or document executed and delivered pursuant to the terms hereof;

  (h) The right to receive mail and other communications relating to any of the Excluded Assets or Excluded Liabilities, all of which mail and other communications shall be promptly forwarded by Purchaser to Seller to the extent received by Purchaser within one year of the Closing;

  (i) All refunds or credits, if any, of Taxes due to or from Seller to the extent provided hereunder;

  (j) All rights, title, and interest in any transmission credits or claims in respect thereof arising under the Interconnection Agreement or as a result of the sale, conveyance or transfer of the Interconnection Facilities to Purchaser, including Seller’s rights, if any, under Section 206 of the Federal Power Act and pursuant to FERC’s rules, policies, and regulations promulgated thereunder with respect to the classification of upgrades and any associated recovery of transmission credits pursuant to the Interconnection Agreement;

  (k) The Third-Party Claims relating to pre-Closing Date periods that are listed or described in Schedule 2.1(i);

  (l) Any contract, agreement, arrangement or commitment of any nature in respect of any intercompany transaction between Seller, on the one hand, and any Affiliate of Seller, on the other hand, whether or not such transaction relates to any contribution to capital, loan, the provision of goods or services, tax sharing arrangements, payment arrangements, intercompany advances, charges or balances, or the like (collectively, the " Intercompany Arrangements "); and

  (m) Any Project Contracts listed or described in Parts B, C, or D of Schedule 2.1(e) that Purchaser, in a writing or writings delivered to Seller at least sixty (60) days prior to the Closing Date, identifies as not desired by Purchaser to be included within, or to constitute a part of, the Purchased Assets. No designation by Purchaser of any asset as an Excluded Asset pursuant to subsections (b), (c), or (m) of this Section 2.2 shall serve to reduce the Purchase Price.

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Section 2.3 Assumption of Liabilities . Upon the Closing, Purchaser shall assume, and shall thereafter pay, perform and discharge as and when due, (i) all liabilities and obligations under the Purchased Project Contracts (other than obligations or liabilities prorated to Seller under Section 3.4), solely to the extent allocable to any period after the Closing Date and not resulting from any breach, default, waiver, or extension by Seller or its Affiliates, and (ii) all obligations and liabilities prorated to Purchaser under Section 3.4 (collectively, the " Assumed Liabilities ").

Section 2.4 Excluded Liabilities . Except for Assumed Liabilities, Seller shall retain, and Purchaser shall not assume or be obligated to pay, perform or otherwise discharge or be responsible or liable with respect to, any liabilities or obligations of Seller, any Affiliate of Seller or any of their respective present or former owners or operators, whether or not of, associated with, or arising from, any of the Purchased Assets, and whether fixed, contingent or otherwise, known or unknown (collectively, the " Excluded Liabilities "), including the following:

• (a) Any liabilities or obligations relating to, based in whole or in part on events, circumstances or conditions, including Environmental Conditions, Environmental Liabilities, or Environmental Claims, occurring or existing in connection with, or arising out of, the Business as operated on or prior to the Closing Date, or the development, design, engineering, procurement, construction, installation, ownership, possession, use, operation, repair or maintenance of the Project or any of the Purchased Assets, including the Project Site, on or before the Closing Date, or the sale or other disposition on or prior to the Closing Date of any capacity of or energy from the Project or any of the Purchased Assets (or any other assets, properties, rights or interests associated, at any time on or prior to the Closing Date, with the Business);

  (b) Any liabilities or obligations of Seller to the extent relating to any Excluded Assets or other assets which are not Purchased Assets and the ownership, operation and conduct of any business in connection therewith or therefrom, including any amounts due from Seller under or arising from (i) any Project Contracts other than the Purchased Project Contracts, (ii) any Intercompany Arrangements, (iii) any liability or obligation of Seller as a guarantor of or provider of credit support with respect to a liability or obligation of another or as an indemnitor under a Contract in which Seller or an Affiliate of Seller has sold or otherwise conveyed rights or assets to another Person prior to the Closing, or (iv) Seller’s obligations under this Agreement, any Ancillary Agreement or any document or instrument executed in connection herewith or therewith;

  (c) Any liabilities or obligations of Seller in respect of costs determined to be the responsibility of Seller under Section 3.4, any Taxes for which Seller is liable under Section 6.6 and any Taxes attributable to the purchase, sale, ownership, operation or use of any of the Purchased Assets on or prior to the Closing Date (or any other assets, properties, rights or interests associated, at any time on or prior to the Closing Date, with the Business), except for Taxes for which Purchaser is liable pursuant to Section 3.4 or Section 6.6;

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• (d) Any liabilities or obligations arising on or prior to the Closing Date from the breach by Seller of, default by Seller under or waiver or extension given by or to Seller with respect to the performance of any term, covenant or provision of any of the Purchased Project Contracts that would have been, but for such breach, default, waiver or extension, paid, performed or otherwise discharged on or prior to the Closing Date or to the extent the same arise out of any such breach, default, waiver or extension;

  (e) Any liabilities or obligations, including fines, penalties or costs imposed by a Governmental Authority and the costs of any associated defense or response, with respect to any of the Purchased Assets or any Employee or former Employee resulting from (i) an investigation, claim, action, proceeding, request for information or inspection before or by a Governmental Authority, whether pending or commencing on, prior to or after the Closing Date (and including Environmental Claims), to the extent based on events or conditions occurring or existing in connection with, or arising out of, or otherwise relating to, the Business as operated by Seller or any of its Affiliates or any Predecessor-in-Interest, or the design, engineering, construction, procurement, installation, ownership, possession, use, operation, repair, maintenance, sale or other disposition on or prior to the Closing Date of any of the Purchased Assets (or any other assets, properties, rights or interests associated, at any time on or prior to the Closing Date, with the Business), or actions taken or omissions to act made on or prior to the Closing Date, or (ii) violations of applicable Law, including Environmental Law, or illegal acts of Seller or any of Seller’s Affiliates;

  (f) Any liabilities or obligations of Seller or any of its Affiliates, or their respective directors, officers, members, shareholders, agents or representatives, arising out of, or relating to, this Agreement, any of the Ancillary Agreements or any of the Transactions, whether incurred prior to, on or after the Closing Date, including any and all finder’s or broker’s fees and expenses, and any and all fees and expenses of any attorneys, accountants or other professionals or advisors retained by or on behalf of Seller or any of its Affiliates;

  (g) Any liabilities or obligations relating to any Employee, former Employee or other Person, or to any spouse, children, other dependents or beneficiaries of any such Person or any successor-in-interest to any such Person, with respect to incidents, events, exposures or circumstances occurring at any time during, or otherwise accruing with respect to, the period or periods prior to the Closing or the period or periods of such Person’s employment by Seller or any of its Affiliates or any Predecessor-in-Interest, in each case whenever any claims arising therefrom or relating thereto mature or are asserted, including all liabilities and obligations arising (i) under or related to any Employee Plan, (ii) under or arising from any claim by any Employees or former Employees for compensation, severance benefits, any other benefit claims under any Employee Plans or applicable Laws, vacation pay, continuation coverage, expenses or any similar type claims arising from employment prior to the Closing or as a result of the consummation of the Transactions, (iii) under any employment, wage and hour restriction, equal employment opportunity, affirmative action, discrimination, retaliation, tort, plant closing/mass lay off, or immigration and naturalization Law or any Law relating to employee benefits, employment discrimination, leave, accommodation, severance, labor relations, hiring or retention, safety, any employment contracts or agreements, unemployment, privacy, medical privacy, wages and hours of employees or any other terms or conditions of employment or any other employment-related matter or workplace issue, including COBRA, (iv) under any

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• collective bargaining agreement, collective bargaining or labor relations Law, or Contract with a labor organization or employee representative, (v) under any Contract concerning or relating to Employees, former Employees or other Persons performing work or services for the direct or indirect benefit of the Project or the Business, or (vi) in connection with any workers’ compensation or any other employee health, accident, disability or safety claims; but excluding , however , all such liabilities and obligations arising from the actions of Purchaser Group with respect to Employees contacted by Purchaser Group for hiring before Closing or arising after Closing with respect to Employees hired by Purchaser;

  (h) Any liabilities or obligations relating to any action (including any actions taken in connection with the consummation of the Transactions) which could be construed as a "plant closing" or "mass layoff," as those terms are defined in the WARN Act, occurring on or prior to the Closing Date, which any Employee or former Employee with respect to the Project may suffer or may be deemed to suffer;

  (i) Any liabilities or obligations incurred by any member of the Seller Group after the Closing Date;

  (j) Any liabilities or obligations of Seller representing indebtedness for money borrowed (and any refinancing thereof);

  (k) Any liabilities or obligations of Seller incurred in connection with its obtaining any Consent relating to the sale, conveyance, assignment, transfer or delivery of the Purchased Assets to Purchaser or the consummation of the Transactions hereunder;

  (l) Any liabilities or obligations in respect of the claims set forth in the pending lawsuits or other proceedings set forth (or that should have been set forth) in Schedule 4.7;

  (m) Without limiting the generality of the Excluded Liabilities, any liabilities or obligations of Seller for Third Party Claims arising out of events, circumstances, or conditions occurring prior to the Closing, unless and except to the extent they are expressly designated as Assumed Liabilities;

  (n) Any liabilities relating to Permitted Encumbrances (including any cost or expense relating to the removal of the same) relating to any pre-Closing period, other than Permitted Encumbrances arising under subsection (iv) of the definition thereof; and

  (o) Any liabilities or obligations which would be Assumed Liabilities but for other express provisions of this Agreement providing for their retention by Seller and such other liabilities and obligations, if any, which would otherwise be Assumed Liabilities but which are identified on Schedule 2.4(o).

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ARTICLE 3

CLOSING; PURCHASE PRICE

Section 3.1 Closing . Subject to the terms and conditions hereof, the consummation of the Transactions (the " Closing ") shall take place at the Houston office of Locke Liddell & Sapp LLP, at 10:00 a.m. local time, on a mutually acceptable date within ten (10) Business Days following the date on which the conditions set forth in Article 8 and Article 9, other than those conditions that by their nature are to be satisfied at the Closing, have been either satisfied or waived by the Party for whose benefit such conditions exist, or at such other time and place as the Parties may mutually agree. The date on which the Closing occurs is referred to herein as the " Closing Date ." The Closing shall be effective for all purposes immediately upon receipt of the Purchase Price by the Seller on the Closing Date. At the Closing, and subject to the terms and conditions hereof, the following shall occur:

• (a) Seller shall execute and deliver, or cause to be executed and delivered, to Purchaser the following:

  • • (i) instruments of transfer and conveyance, properly executed and acknowledged by Seller in such customary form as is reasonably acceptable to both Seller and Purchaser, that are necessary to transfer to and vest in Purchaser all of Seller’s right, title and interest in and to the Purchased Assets or which may otherwise be required by the Title Insurer, including:

      • (A) the Bill of Sale;

        (B) the Assignment and Assumption Agreements; and

        (C) the Deed;

      (ii) Seller’s affidavit and gap indemnity agreement in the form of those attached hereto as Exhibit D , properly executed by Seller; ¹

      (iii) a certificate and affidavit of non-foreign status of Seller pursuant to Section 1445 of the Code, properly executed by Seller (or Seller’s tax parent Affiliate, as applicable);

      (iv) those documents required to be delivered to Purchaser by Seller pursuant to Article 8 or in accordance with the provisions of any Ancillary Agreement;

      (v) all Consents obtained by Seller with respect to the sale and purchase of the Purchased Assets, including those with respect to the transfer of any Purchased Project Contract or Purchased Permit or the consummation of the Transactions;

      (vi) evidence, in form and substance reasonably satisfactory to Purchaser, demonstrating that Seller has obtained Seller’s Required Regulatory Approvals and Seller’s Required Consents; and

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• • • (vii) any other documents or instruments reasonably required by Purchaser to consummate the Transactions and reasonably requested of Seller prior to the Closing Date.

  (b) Purchaser shall execute, or cause to be executed, to the extent required, and deliver, or cause to be delivered, to Seller the following:

  • • (i) the Purchase Price by wire transfer of immediately available funds to an account or accounts designated by Seller in writing prior to the Closing Date;

      (ii) the Assignment and Assumption Agreement;

      (iii) those documents required to be delivered to Seller by Purchaser pursuant to Article 9 or in accordance with the provisions of any Ancillary Agreement;

      (iv) evidence, in form and substance reasonably satisfactory to Seller, demonstrating that Purchaser has obtained Purchaser’s Required Regulatory Approvals and Purchaser’s Required Consents; and

      (v) any other documents or instruments reasonably required by Seller to consummate the Transactions and reasonably requested of Purchaser prior to the Closing Date.

  (c) Subject to the occurrence of and contemporaneously with the Closing, each Party shall execute and deliver, or cause to be executed and delivered, such of the Ancillary Agreements which such Party is required to execute and deliver, or cause to be executed and delivered, as applicable, at or upon the Closing and which such Party has not previously executed and delivered, or caused to be executed and delivered, as applicable.

Section 3.2 Base Purchase Price . The base purchase price for the Purchased Assets being sold shall be $56,500,000 (such price on the Closing Date being referred to as the " Base Purchase Price ").

Section 3.3 Adjustments to Base Purchase Price . The Base Purchase Price shall be subject to such adjustments as are specified in this Section 3.3 (the Base Purchase Price as so adjusted is herein referred to as the " Purchase Price ").

• (a) The Base Purchase Price shall be adjusted to account for the items prorated as of the Closing Date pursuant to Section 3.4.

  (b) At Purchaser’s sole option, the Base Purchase Price shall be decreased by an amount equal to one hundred percent (100%) of the estimated cost (as determined pursuant to the following sentence) for Purchaser to undertake and complete, in accordance with all Environmental Laws and in a manner reasonably satisfactory to Purchaser, any Remediation as and to the extent required to be undertaken or initiated wholly or in part by Seller pursuant to Section 6.5(f), including any additional work required by Environmental Laws and arising during the performance of any such Remediation, to the extent such Remediation shall not have been undertaken or completed in compliance with all Environmental Laws and paid for by Seller prior

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• to the Closing. The estimated costs of any such Remediation shall be reasonably determined by a qualified professional consultant selected by Purchaser, but reasonably acceptable to Seller; provided , however , that the costs for any such Remediation undertaken by Purchaser and for which Purchaser receives the Base Purchase Price reduction herein shall not be subject to the indemnification provided for by Section 7.1(a) to the extent of such Base Purchase Price reduction that Purchaser receives.

Section 3.4 Prorations .

• (a) Purchaser and Seller agree that, except as otherwise specifically provided in this Agreement, all of the prepaid items (excluding all Taxes other than Property Taxes) incurred by Seller prior to the Closing Date but on account of periods both prior to and following the Closing Date, that were incurred in the ordinary course of the conduct of the Business and operation of the Project consistent with past practice and the provisions of this Agreement, shall be prorated and charged as of the Closing Date, without any duplication of payment under the Project Contracts or this Agreement, with Seller liable to the extent such items relate to any time periods (Tax year periods for Property Tax) ending on or prior to the Closing Date, and Purchaser liable to the extent such items relate to periods (Tax year periods for Property Tax) after the Closing (measured in the same units used to compute the item in question and otherwise measured by calendar days), provided that, notwithstanding anything to the contrary herein, Purchaser shall not pay any amount under this Section 3.4 that constitutes an Excluded Liability.

  (b) In connection with the prorations referred to in Section 3.4(a), in the event that actual figures are not available at the Closing Date, the proration shall be based upon the applicable amounts accrued through the Closing Date or paid for the most recent year or other appropriate period for which such amounts paid are available. All prorated amounts shall be recalculated and paid to the appropriate Party within thirty (30) days after the date that the previously unavailable actual figures become available. Seller and Purchaser shall furnish each other with such documents and other records as may be reasonably requested in order to confirm all proration calculations made pursuant to this Section 3.4.

Section 3.5 Allocation of Purchase Price . The Parties shall use reasonable efforts to jointly prepare and agree upon allocation of the Purchase Price among the Purchased Assets in accordance with Section 1060 within 90 days after the Purchase Price has been determined (" Final Allocation "). The Parties will, at their own cost, file Internal Revenue Service Form 8594 and all other Tax Returns, consistently with the allocation of the Purchase Price and the Assumed Liabilities to the Purchased Assets as provided in accordance with this Section 3.5. Each Party agrees promptly to provide the other with any additional information and reasonable assistance required to complete Form 8594, if necessary, or to compute Taxes arising in connection with (or otherwise affected by) the Transactions.

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ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller and Dynegy each represent and warrant to Purchaser, as of the Effective Date and as of the Closing Date, as follows:

Section 4.1 Organization and Existence . Seller is a limited liability company, duly formed, validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority to own, use, lease and operate its properties and to carry on its business as now being conducted. Seller is duly qualified to do business and is in good standing in Louisiana and all other jurisdictions, if any, in which Seller is conducting activities related to the Business. Dynegy is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted.

Section 4.2 Execution, Delivery and Enforceability . Seller and Dynegy have all requisite corporate power and authority to execute and deliver, and perform its obligations under, this Agreement and the Ancillary Agreements to which either of them is or becomes a party and to consummate the Transactions. The execution and delivery by Seller and Dynegy of this Agreement and of the Ancillary Agreements to which either of them is or becomes a party, the performance by Seller and Dynegy of their obligations hereunder and thereunder and the consummation by Seller and Dynegy of the Transactions, have been duly and validly authorized by all necessary corporate action required on the part of Seller and Dynegy and no other acts, approvals or corporate or limited liability company proceedings on its part or on the part of the holders of any of its equity or debt securities or any other Person are necessary to authorize the same. Assuming the due authorization, execution and delivery by Purchaser of this Agreement and the Ancillary Agreements to which Purchaser is or becomes a party, this Agreement constitutes, and the Ancillary Agreements to which Seller or Dynegy is or becomes a party when executed and delivered by it shall constitute, the valid and legally binding obligations of Seller or Dynegy, as applicable, enforceable against it in accordance with its and their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application relating to or affecting the enforcement of creditors’ rights and by general equitable principles.

Section 4.3 No Violation . Subject to Seller obtaining Seller’s Required Consents and Seller’s Required Regulatory Approvals, and except for compliance with the requirements of the HSR Act, neither the execution and delivery by Seller and Dynegy of this Agreement or any of the Ancillary Agreements to which either of them is or becomes a party, nor Seller’s or Dynegy’s performance or compliance with any provision hereof or thereof, nor Seller’s or Dynegy’s consummation of the Transactions will:

• (a) violate, or conflict with, or result in a breach of, any provisions of the organizational documents of Seller or Dynegy;

  (b) result in a default (or give rise to any right, including any right of termination, purchase, first refusal, cancellation, acceleration or guaranteed payment, or a loss of rights) under, or conflict with, or result in a breach of, any of the material terms, conditions or provisions of any Project Contract or any note, bond, mortgage, loan agreement, deed of trust, indenture, license or agreement or other instrument or obligation to which Seller or Dynegy is a party or by which Seller, Dynegy, or any of the Purchased Assets is bound;

  (c) violate, conflict with or result in a breach of any Law, Order or Permit applicable to Seller, Dynegy, or the Purchased Assets; or

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• (d) require the Consent of, the declaration, filing or registration with or notice to, or an Order from any Person.

Section 4.4 Compliance with Laws . Except as set forth in Schedule 4.4, neither Seller nor Dynegy is and neither shall be (by virtue of any past or present action, omission to act, Project Contract or any occurrence or state of facts whatsoever) in material violation of, and to Seller’s Knowledge is not under investigation or threatened to be under investigation with respect to, any Law, Permit or Order applicable to Seller, the Project, the Project Site, or the conduct of the Business.

Section 4.5 Permits . Schedule 2.1(f) and Schedule 4.15(c) set forth all Permits required by Law for the Project or the Project Site or for the ownership, lease, use and operation of the Purchased Assets, the Project and the Project Site, as currently operated by Seller, and the lawful conduct of the Business. To Seller’s Knowledge, each Purchased Permit and Environmental Permit is held by Seller and is valid and in full force and effect and, to Seller’s Knowledge, no event has occurred which permits, or with or without the giving of notice or the passage of time or both would permit, the revocation, suspension, limitation or termination of any Purchased Permit or Environmental Permit, and, to Seller’s Knowledge, there is no condition, circumstance or issue that represents any impediment to obtaining the prompt renewal, extension or transfer in connection with the Transactions of any Purchased Permit or Environmental Permit with an associated cost not in excess of standard renewal, extension or transfer fees. Seller has no planned changes to the Project or the Project Site, including any power uprate, which requires modification of any Purchased Permit or Environmental Permit that has not yet been obtained. Except as set forth in Part I of Schedule 4.5, to Seller’s Knowledge, Seller is in compliance with the Purchased Permits and all of its obligations with respect thereto. Except as set forth in Part II of Schedule 4.5, Seller to its Knowledge held at the time required all Permits required by Law (excluding Environmental Permits) necessary for the ownership, lease, operation, or use of the Project or the Project Site or the conduct of the Business, as then operated or conducted by Seller.

Section 4.6 Bankruptcy and Insolvency Matters . Neither Seller nor Dynegy is Bankrupt and there are no claims or proceedings pending or being contemplated by either of them or, to Seller’s Knowledge, threatened against either of them which could reasonably be expected to result in it being or, after giving effect to the consummation of the Transactions, becoming Bankrupt. After giving effect to the consummation of the Transactions, the Fair Value and Present Fair Salable Value of the assets of each of Seller and Dynegy exceed their respective Stated Liabilities and Identified Contingent Liabilities, and the capital of each of Seller and Dynegy shall not be impaired. Each of Seller and Dynegy, after giving effect to the consummation of the Transactions, (i) has sufficient assets and cash flow to pay its Stated Liabilities and Identified Contingent Liabilities as those liabilities mature or otherwise become payable, (ii) will not be insolvent, (iii) will not be left with unreasonably small capital, and (iv) will not have incurred debts beyond its ability to pay such debts as they mature or otherwise become payable.

Section 4.7 Litigation . Except as set forth in Schedule 4.7, there is no claim, action, proceeding or investigation pending or, to Seller’s Knowledge, threatened against or involving (i) Seller or Dynegy or any of its Affiliates before any arbitrator or Governmental Authority, or

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any Order of any arbitrator or Governmental Authority binding on Seller or any of its Affiliates (collectively, " Seller Litigation "), or (ii) any Employee Plan (or any fiduciary of any Employee Plan) before any arbitrator or Governmental Authority, or any Order of any arbitrator or Governmental Authority binding on any Employee Plan (or any fiduciary of any Employee Plan) in any way relating to the Project, the Business or the Purchased Assets (collectively, " Employee Plan Litigation ") that, individually or in the aggregate, at any time could reasonably be expected to result, or has resulted, in (a) the institution of legal proceedings to prohibit or restrain the performance by Seller of Seller’s obligations under this Agreement or any of the Ancillary Agreements to which Seller is or becomes a party, or the consummation of the Transactions, (b) a claim against Purchaser or any or its Affiliates for damages as a result of Seller entering into this Agreement or any of the Ancillary Agreements to which Seller is or becomes a party, or the consummation of the Transactions, (c) a material delay in or material impairment of Seller’s performance of its obligations under this Agreement or any of the Ancillary Agreements to which Seller is or becomes a party or a material impairment of the authority, right or ability of Seller to consummate the Transactions, (d) a Material Adverse Effect, or (e) the creation of a Purchased Asset. There is no Order enjoining Seller from engaging in or continuing any conduct or practice, or requiring Seller to take any action, in connection with the Business or the Project, and neither Seller nor any of its Affiliates is subject to any outstanding Order specifically relating to the Purchased Assets or the Employees or former Employees, other than Orders of general applicability to participants in the electric power industry.

Section 4.8 Project Contract Matters .

• (a) Except for (i) this Agreement, (ii) as of the Closing Date, any Ancillary Agreement, (iii) any Purchased Project Contracts, and (iv) the Excluded Project Contracts, there are no Project Contracts.

  (b) Except as set forth in Part I of Schedule 4.8, Seller has performed all obligations to be performed by it and has observed all terms required to be observed by it under the Purchased Project Contracts and no default, event or condition that, with notice or lapse of time or both, would constitute a default, has occurred or exists under any of the Project Contracts, except for such defaults, events or conditions as to which requisite waivers have been obtained.

  (c) Except as set forth in Part II of Schedule 4.8, no Purchased Project Contract contains any requirement with which there is a reasonable likelihood that Seller or, to the Knowledge of Seller, any other party thereto will be unable to comply.

  (d) Each Purchased Project Contract constitutes the valid and binding obligation of Seller and, to the knowledge of Seller, the other parties thereto, is in full force and effect and is enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application relating to or affecting the enforcement of creditors’ rights and by general equitable principles.

  (e) Seller has provided complete and accurate copies of all Purchased Project Contracts t