Confidential Disclosure Agreement - Southern Co. and Southern Energy Inc.
CONFIDENTIAL DISCLOSURE AGREEMENT
THE SOUTHERN COMPANY
SOUTHERN ENERGY, INC.
CONFIDENTIAL DISCLOSURE AGREEMENT
This Confidential Disclosure Agreement (the "Agreement") is effective
as of September 1, 2000 (the "Effective Date"), between The Southern Company, a
Delaware corporation ("Southern"), having an office at 270 Peachtree Street,
N.W., Atlanta, Georgia 30303 and Southern Energy, Inc., a Delaware corporation
("Southern Energy"), having an office at 900 Ashwood Parkway, Suite 500,
Atlanta, Georgia 30338.
WHEREAS, the Board of Directors of Southern has determined that it is
in the best interest of Southern and its stockholders to separate Southern's
existing businesses into two independent businesses;
WHEREAS, as part of the foregoing, Southern and Southern Energy have
entered into a Master Separation Agreement (as defined below), which provides,
among other things, for the separation of Southern and Southern Energy, the
transfer between Southern and Southern Energy of certain assets and liabilities,
the initial public offering of Southern Energy stock, the distribution of such
stock and the execution and delivery of certain other agreements in order to
facilitate and provide for the foregoing; and
WHEREAS, also as part of the foregoing, the parties further desire to
enter into this Agreement to provide for the protection of their Confidential
Information (as defined below).
NOW, THEREFORE, in consideration of the mutual promises of the parties,
and of good and valuable consideration, it is agreed by and between the parties
For the purpose of this Agreement the following capitalized terms are
defined in this Article I and shall have the meanings specified herein.
Capitalized terms used herein and not otherwise defined shall have the meanings
for such terms set forth in the Master Separation Agreement.
1.1 Ancillary Agreements. "Ancillary Agreements" means the items
and agreements listed in Section 2.1 of the Master Separation Agreement and all
agreements and documents contemplated by such agreements.
1.2 Confidential Information.
(a) "Confidential Information" means any and all documents,
materials, data, and other information (whether oral, written, electronic or
otherwise) relating to a Disclosing Party that a Receiving Party knows of as of
the Separation Date, that is directly or
indirectly disclosed to the Receiving Party by or on behalf of such Disclosing
Party in connection with any Transaction Agreement, or that the Receiving Party
otherwise comes to know pursuant to its parent/subsidiary relationship with the
(b) Confidential Information of Third Parties that is known to, in
the possession of or acquired by a Receiving Party pursuant to a relationship
with the Disclosing Party shall be deemed the Disclosing Party's Confidential
Information for purposes herein.
(c) Notwithstanding the foregoing provisions of this Section 1.2,
Confidential Information shall exclude information that: (i) was in the
Receiving Party's possession before receipt from the Disclosing Party and
obtained from a source other than the Disclosing Party and other than through
the prior relationship of the Disclosing Party and the Receiving Party before
the Separation Date; (ii) is or becomes a matter of public knowledge through no
fault of the Receiving Party or its Representatives; (iii) is rightfully
received by the Receiving Party from a Third Party without a duty of
confidentiality; (iv) is independently developed by the Receiving Party; or (v)
is disclosed by the Receiving Party with the Disclosing Party's prior written
1.3 Confidentiality Period. "Confidentiality Period" means, with
respect to Confidential Information, three (3) years after either (A) the
Separation Date with respect to Confidential Information of the Disclosing Party
that is known to or in the possession of the Receiving Party as of the
Separation Date or (B) the date of disclosure with respect to Confidential
Information that is disclosed by the Disclosing Party to the Receiving Party
after the Separation Date.
1.4 Disclosing Party. "Disclosing Party" means the party owning or
disclosing the relevant Confidential Information, being either (a) a member of
the Southern Group, or (b) a member of the Southern Energy Group, as applicable.
1.5 Distribution Date. "Distribution Date" has the meaning set
forth in the Master Separation Agreement.
1.6 Master Separation Agreement. "Master Separation Agreement"
means the Master Separation and Distribution Agreement between the parties.
1.7 Receiving Party. "Receiving Party" means the non-owning party
or recipient of the relevant Confidential Information, being either (a) a member
of the Southern Group, or (b) a member of the Southern Energy Group, as
1.8 Representative. "Representative" has the meaning set forth in
1.9 Separation Date. "Separation Date" means as of 12:01 a.m.,
Eastern Standard Time, September 1, 2000 or such other date as may be determined
1.10 Third Party. "Third Party" means a Person other than Southern
and its Subsidiaries and Affiliated Companies and Southern Energy and its
Subsidiaries and Affiliated Companies.
1.11 Transaction Agreements. "Transaction Agreements" means the
Master Separation Agreement and the Ancillary Agreements.
2.1 Confidentiality Obligations. During the Confidentiality
Period, the Receiving Party shall (i) protect the Confidential Information of
the Disclosing Party by using the same degree of care, but no less than a
reasonable degree of care, to prevent the unauthorized use, dissemination, or
publication of the Confidential Information as Receiving Party uses to protect
its own confidential information of a like nature, and (ii) not disclose such
Confidential Information to any Third Party, except as expressly permitted under
this Agreement, in the Transaction Agreements or in any other agreements entered
into between the parties in writing, without prior written consent of the
2.2 Disclosure To Representatives; Sublicensees. Notwithstanding
the provisions of Section 2.1, the Receiving Party may disclose the Confidential
Information to its Subsidiaries and Affiliated Companies, and its and their
directors, officers, employees, partners, affiliates, agents, financing sources,
rating agencies, advisors and representatives ("Representatives"), to the extent
such Representatives need to know such Confidential Information, and may
disclose to its sublicensees permitted under a Transaction Agreement portions of
Confidential Information as reasonably necessary in the exercise of the
Receiving Party's sublicense rights under such Transaction Agreement; provided,
however, that the Receiving Party shall inform each such Representative or
sublicensee of the confidential nature of the Confidential Information, shall
require such Representative or sublicensee to be bound to the terms of this
Agreement to the same extent as if such Representative or sublicensee was a
party hereto, and that the Receiving Party shall be responsible for any breach
of this Agreement by its Representatives and sublicensees.
2.3 Compelled Disclosure. Notwithstanding anything to the contrary
set forth herein, it is understood that the Receiving Party may be legally
compelled or otherwise legally obligated to disclose Confidential Information
(or portions thereof) (i) pursuant to subpoena or other court process; (ii) at
the express direction of any other authorized government agency with
jurisdiction over Receiving Party, or (iii) as otherwise required by law. If
Receiving Party becomes so compelled or obligated to disclose any of the
Confidential Information, Receiving Party will provide the Disclosing Party with
prompt written notice so that the Disclosing Party may seek a protective order
or other appropriate remedy. If such protective order or other remedy is not
Party will furnish only that portion of the Confidential Information which, in
the opinion of Receiving Party's legal counsel, is legally required, and
Receiving Party will reasonably cooperate, at the Disclosing Party's expense and
request, with the Disclosing Party's counsel to enable the Disclosing Party to
obtain a protective order or other reliable assurance that confidential
treatment will be accorded the Confidential Information.
2.4 No Restriction On Disclosing Party. Nothing in this Agreement
shall restrict the Disclosing Party from using, disclosing, or disseminating its
own Confidential Information in any way.
2.5 No Restriction On Reassignment. This Agreement shall not
restrict reassignment of the Receiving Party's employees.
2.6 Third Party Restrictions. Nothing in the Agreement supersedes
any restriction imposed by Third Parties on their Confidential Information, and
there is no obligation on the Disclosing Party to conform Third Party agreements
to the terms of this Agreement.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ALL CONFIDENTIAL INFORMATION IS
PROVIDED ON AN "AS IS, WHERE IS" BASIS AND THAT NEITHER PARTY NOR ANY OF ITS
SUBSIDIARIES OR AFFILIATED COMPANIES HAS MADE OR WILL MAKE ANY WARRANTY
WHATSOEVER, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE,
ENFORCEABILITY OR NON-INFRINGEMENT.
4.1 Dispute Resolution. Any dispute or claim arising out of or
related to this Agreement shall be resolved in accordance with the dispute
resolutions procedures set forth in Section 5.7 of the Master Separation
4.2 Proceedings. Notwithstanding the provisions of Section 4.1,
the parties hereto each acknowledge that any violation of this Agreement in
respect of any Confidential Information will cause the Disclosing Party and its
affiliates immediate and irreparable harm that monetary damages cannot
adequately remedy, and parties agree that, upon any actual or impending
violation of this Agreement, the Disclosing Party or any one or more
of its Affiliated Companies shall be entitled to equitable relief, including
injunctive relief and specific performance (and the Receiving Party shall not
plead in defense thereto that there would be an adequate remedy at law), without
bond or proof of damages, and in addition to any other remedies that the
Disclosing Party may have under applicable law. In the event of litigation
relating to this Agreement, if a court of competent jurisdiction determines that
Receiving Party or any of its Representatives has breached this Agreement,
Receiving Party shall be liable and pay to the Disclosing Party the reasonable
legal fees and costs incurred with such litigation, including any appeal
LIMITATION OF LIABILITY
IN NO EVENT SHALL EITHER PARTY OR ITS SUBSIDIARIES, AFFILIATED
COMPANIES, DIRECTORS, OFFICERS OR EMPLOYEES BE LIABLE TO THE OTHER PARTY OR ITS
SUBSIDIARIES OR AFFILIATED COMPANIES FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT,
INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY
OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT,
WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
6.1 Suits. Neither party shall have any obligation hereunder to
institute any action or suit against Third Parties for misappropriation of any
of its Confidential Information or to defend any action or suit brought by a
Third Party that alleges infringement of any intellectual property rights by the
Receiving Party's authorized use of the Disclosing Party's Confidential
6.2 Entire Agreement. This Agreement, the Master Separation
Agreement and the other Ancillary Agreements constitute the entire agreement
between the parties with respect to the subject matter hereof and shall
supersede all prior written and oral and all contemporaneous oral agreements and
understandings with respect to the subject matter hereof. Notwithstanding the
foregoing, the parties agree that any agreements entered into between them on or
after the Separation Date for the protection of specific Confidential
Information shall supersede the terms of this Agreement with respect to such
6.3 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Georgia as to
all matters regardless
of the laws that might otherwise govern under principles of conflicts of laws
6.4 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
6.5 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given when delivered in
person, by telecopy with answer back, by express or overnight mail delivered by
a nationally recognized air courier (delivery charges prepaid), or by registered
or certified mail (postage prepaid, return receipt requested) as follows:
if to Southern:
c/o The Southern Company
270 Peachtree Street
Atlanta, Georgia 30303
Attention: General Counsel
Telecopy: (404) 506-0564
if to Southern Energy:
c/o Southern Energy, Inc.
900 Ashwood Parkway, Suite 500
Atlanta, Georgia 30338
Attention: General Counsel
Telecopy: (770) 821-6767
or to such other address as the party to whom notice is given may have
previously furnished to the other in writing in the manner set forth above. Any
notice or communication delivered in person shall be deemed effective on
delivery. Any notice or communication sent by telecopy or by air courier shall
be deemed effective on the first Business Day following the day on which such
notice or communication was sent. Any notice or communication sent by registered
or certified mail shall be deemed effective on the third Business Day following
the day on which such notice or communication was mailed. As used in this
Section 6.5, "Business Day" means any day other than a Saturday, a Sunday or a
day on which banking institutions located in the State of Georgia are authorized
or obligated by law or executive order to close.
6.6 Nonassignability. Neither party may, directly or indirectly,
in whole or in part, whether by operation of law or otherwise, assign or
transfer this Agreement, without the other party's prior written consent, and
any attempted assignment, transfer or delegation without such prior written
consent shall be voidable at the sole option of such other party.
Notwithstanding the foregoing, each party (or its permitted successive assignees
transferees hereunder) may assign or transfer this Agreement as a whole
without consent to a Person that succeeds to all or substantially all of the
business or assets of such party. Without limiting the foregoing, this Agreement
will be binding upon and inure to the benefit of the parties and their permitted
successors and assigns.
6.7 Severability. If any term or other provision of this Agreement
is determined by a nonappealable decision of a court, administrative agency or
binding arbitrator by any court or in any binding arbitration to be invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to either party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
6.8 Failure Or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of either party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
6.9 Amendment. No change or amendment will be made to this
Agreement except by an instrument in writing signed on behalf of each of the
parties to such agreement.
6.10 Counterparts. This Agreement may be executed in two or more
counterparts, all of which, taken together, shall be considered to be one and
the same instrument.
WHEREFORE, the parties have signed this Confidential Disclosure
Agreement effective as of the date first set forth above.
THE SOUTHERN COMPANY SOUTHERN ENERGY, INC.
Name: H. Allen Franklin Name: S. Marce Fuller
Title: President and Chief Operating Title: President and Chief Executive