**Exhibit 10.13**

 

**POWER SALE, FUEL SUPPLY AND SERVICES AGREEMENT**

 

**THIS****POWER SALE, FUEL SUPPLY AND SERVICES AGREEMENT**(this “Agreement”),dated as of January 3, 2006 (the “Agreement Date”), is by and between **MIRANT AMERICAS ENERGY MARKETING, LP**, a Delaware limitedpartnership (“MAEM”),****and**MIRANT ZEELAND, LLC**, a Delaware limited liability company(the “Project Company”).

 

**RECITALS**

 

WHEREAS, Project Company owns and operates a certainelectric generating facility as set forth on Exhibit A hereto (the “GeneratingStation”); and

 

WHEREAS, Project Company may enter into contracts withthird parties to sell capacity, electricity, ancillary services and/or otherrelated products generated by, or available from, the Generating Station;

 

WHEREAS, in the absence of such third party contracts,Project Company desires to contract herein to sell all or a portion of thecapacity, electricity, ancillary services and/or other related productsgenerated by, or available from, the Generating Station to MAEM, and MAEMdesires to purchase such capacity, electricity, ancillary services and/or otherrelated products on the terms and conditions set forth herein; and

 

WHEREAS, Project Company desires that MAEM performcertain services related to the management and operation of the GeneratingStation, and MAEM desires to perform such services.

 

NOW, THEREFORE, in consideration of the foregoing andthe mutual covenants contained herein, and other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged bythe Parties, the Parties hereby agree as follows:

 

**ARTICLE 1.**

**DEFINITIONS**

 

The following capitalized terms, whether used in thesingular or plural, shall be defined as provided in this Article 1.

 

“Agreement” has the meaning set forth in thefirst paragraph hereof.

 

“AgreementDate” has the meaning set forth in the first paragraph of this Agreement.

 

“Asset Book” has the meaning set forth inSection 5.1

 

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“Asset Companies” means any affiliates of MAEMeither directly or indirectly owned by Mirant Corporation, other than MirantZeeland, LLC, which own electric generating stations in the United States.

 

“Claims” means all claims or actions,threatened or filed, whether groundless, false or fraudulent, that directly orindirectly relate to the subject matter of an indemnity, and the resultinglosses, damages, expenses, attorneys’ fees and court costs, whether incurred bysettlement or otherwise, and whether such claims or actions are threatened orfiled prior to or after the termination of this Agreement.

 

“Collateral Costs” meansan amount determined on a monthly basis by MAEM, in good faith, as the costincurred by MAEM or Mirant North America, LLC to post collateral in the form ofcash and/or letters of credit to third parties as required under the terms ofthe transactions attributed to the Asset Book based on the weighted average ofthe borrowing rates under the senior credit facilities, senior notes and otherindebtedness for borrowed money of Mirant North America, LLC.

 

“Delivery Point” means, with respect toProducts generated by, or available from, the Generating Station, the high sideof the generation step-up transformer located at the Generating Station, whereit connects to the Transmission Provider’s transmission system; and, withrespect to Products generated by, or available from, sources other than theGenerating Station, such other point on the Transmission Provider’stransmission system as MAEM and the Project Company may determine.

 

“Direct Contracts” has the meaning set forth inSection 4.1.

 

“DTEET Tolling Agreement” means the TollingAgreement dated March 3, 2005, with respect to Zeeland Phase 2, between MAEMand DTE Energy Trading, Inc.

 

“Duke Tolling Agreement” means the TollingAgreement dated May 3, 2000, with respect to Zeeland Phase 1, between MAEM andDuke Energy Marketing America, LLC.

 

“Emissions Allowances” means authorizationsunder state or federal (as applicable) air quality regulations to emit eitherone ton of nitrogen oxides (“NOx”) or sulfur dioxide (“SO2”), in theformer case between May 1 through September 30 of any given year, and in thelatter case at any time during any applicable calendar year.

 

“Event of Default” has the meaning set forth inSection 9.1.

 

“Expenses” has the meaning set forth in Section8.2.

 

“FERC” means the Federal Energy RegulatoryCommission, or its successor.

 

“Force Majeure” means an event or circumstance which prevents one Party from performing itsobligations, which event or circumstance was not anticipated as of the date the

 

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transactionwas agreed to, which is not within the reasonable control of, or the result ofthe negligence of, the claiming Party, and which, by the exercise of due diligence,the claiming Party is unable to overcome or avoid or cause to be avoided. ForceMajeure shall not be based on (i) the loss of MAEM’s markets; (ii) MAEM’sinability economically to use or resell the Product purchased hereunder; (iii)the loss or failure of Project Company’s supply; or (iv) Project Company’sability to sell the Product at a price greater than the Contract Price. NeitherParty may raise a claim of Force Majeure based in whole or in part oncurtailment by a Transmission Provider unless (i) such Party has contracted forfirm transmission with a transmission provider for the Product to be deliveredto or received at the Delivery Point and (ii) such curtailment is due to “forcemajeure” or “uncontrollable force” or a similar term as defined under theTransmission Provider’s tariff; provided, however, that existence of theforegoing factors shall not be sufficient to conclusively or presumptivelyprove the existence of a Force Majeure absent a showing of other facts andcircumstances which in the aggregate with such factors establish that a ForceMajeure as defined in the first sentence hereof has occurred.

 

“Fuel” means fuel oil or natural gas, asapplicable.

 

“Fuel Delivery Point(s)” means the Fuel OilDelivery Point and/or Natural Gas Delivery Point, as applicable.

 

“Fuel Oil Delivery Point” means the physicallocation at the Generating Station where MAEM shall fuel oil to ProjectCompany.

 

“Generating Station” has the meaning providedin the recitals.

 

“Good Utility Practices” mean any of thepractices, methods or acts engaged in or approved by a significant portion ofthe electric energy industry with respect to similar facilities during therelevant time period which in each case, in the exercise of reasonable judgmentin light of the facts known or that should have been known at the time adecision was made, could have been expected to accomplish the desired result atreasonable cost consistent with good business practices, reliability, safety,law, regulation, environmental protection and expedition. Good UtilityPractices are not intended to be limited to the optimum practices, methods oracts to the exclusion of all others, but rather to delineate the acceptablepractices, methods or acts generally accepted in such industry.

 

“Gross Revenues” has the meaning set forth inSection 8.2.

 

“Implementation Order” means the ImplementingOrder Regarding Transfer of Letters of Credit, Guarantees and CertainCollateral Securing Trading Obligations Transferred Pursuant to the Plan, datedDecember 9, 2005, issued by the United States Bankruptcy Court for the NorthernDistrict of Texas, Forth Worth Division in the chapter 11 cases of MirantCorporation and its affiliated debtors, styled as *In reMirant Corporation, et al.*, Chapter 11 Case No. 03-46590 (DML)Jointly Administered.

 

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“Interest Rate” means, for any date, twopercent (2%) over the per annum rate of interest equal to the prime lendingrate as may from time to time be published in the Wall Street Journal under “MoneyRates”; provided that the Interest Rate shall never exceed the maximum interestrate permitted by applicable law.

 

“ISO” means the Midwest IndependentTransmission System Operator, Inc., or its successor.

 

“ISO FERC Tariff” means the Open AccessTransmission and Energy Markets Tariff for the Midwest Independent TransmissionSystem Operator, Inc., as amended from time to time, as on file with andapproved by the FERC.

 

“MAEM” has the meaning set forth in the firstparagraph of this Agreement.

 

“MET” has the meaning set forth in Section11.1(b).

 

“Natural Gas Delivery Point” means the meter atthe Generating Station where MAEM shall deliver natural gas to Project Company.

 

“Net Market Revenues” has the meaning set forthin Section 8.2.

 

“Offer” has the meaning set forth in Section2.2(a).

 

“Party” means any of MAEM or Project Company. Inthe context where MAEM is referenced as a “Party,” a reference to the “otherParty” shall mean Project Company. In the context where Project Company is referencedas a “Party,” a reference to the “other Party” shall mean MAEM. References to “eitherParty” or the “Parties” shall have comparable meanings.

 

“Plan” means the Amended and Restated SecondAmended Joint Chapter 11 Plan of Reorganization for Mirant Corporation and itsAffiliated Debtors, dated September 30, 2005, confirmed by the United StatesBankruptcy Court for the Northern District of Texas, Forth Worth Division, onDecember 9, 2005, in the chapter 11 cases of Mirant Corporation and its affiliateddebtors, styled as *In re Mirant Corporation,et al.*, Chapter 11 Case No. 03-46590 (DML) Jointly Administered.

 

“Products” or “Product” means electriccapacity, energy, ancillary services and/or any other related products, whichare or may become commercially recognized in the ISO markets during the term ofthis Agreement.

 

“Purchased Power” has the meaning set forth inSection 4.2.

 

“Scheduling” or “Schedule” means theacts of MAEM and/or its designated representatives of notifying, requesting andconfirming to its counterparties and their designated representatives(including, but not limited to, the ISO) the quantity and type of Products tobe delivered on any given day or days during the period of delivery at aspecified Delivery Point.

 

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“Service Fee” has the meaning set forth inSection 8.1.

 

“Third Party Contracts” has the meaning setforth in Section 2.2(b).

 

“Transmission Providers” means the entity orentities transmitting or transporting Products on behalf of Project Company orMAEM to or from the Delivery Point including, but not limited to, the ISO or aregional transmission organization.

 

“Transportation Providers” means the entity orentities transporting Fuel on behalf of Project Company or MAEM to or from theGenerating Station.

 

**ARTICLE 2.**

**PRODUCTSALES**

 

2.1           IntercompanyProduct Sales.

 

(a)           Transactions.With the exception of any Direct Contracts as described in Section 4.1, ProjectCompany shall sell and deliver, and MAEM shall purchase and receive, or causeto be received, at the Delivery Point, all Products generated by, and/oravailable from, the Generating Station. MAEM shall resell such Products asdescribed in Section 2.2. MAEM shall pay Net Market Revenues to ProjectCompany, on a monthly basis, for all Products purchased by MAEM hereunder. Inselling Products generated by, or available from, the Generating Station, MAEMshall attempt to maximize Net Market Revenues for Project Company.

 

(b)           Transmissionand Scheduling. Project Company shall be responsible for delivery ofProducts to the Delivery Point. MAEM shall arrange and be responsible fortransmission service at and from the Delivery Point. MAEM shall serve asScheduling agent on behalf of Project Company to Schedule and deliver Productswith respect to all transaction involving the Generating Station.

 

(c)           Title,Risk of Loss and Indemnity. The following provision shall apply to alltransactions involving the Generating Station except for Direct Contracts asdescribed in Section 4.1. As between the Parties, Project Company shall bedeemed to be in exclusive possession and control (and be responsible for anydamages or injury caused thereby) of the Products prior to delivery thereof atthe Delivery Point, and MAEM shall be deemed to be in exclusive possession andcontrol (and be responsible for any damages or injury caused thereby) of theProducts at and after delivery thereof at the Delivery Point. Project Companywarrants that it will deliver to MAEM all Products free and clear of all liens,claims and encumbrances arising prior to delivery thereof at the Delivery Point.Title to and risk of loss related to delivered Products shall transfer fromProject Company to MAEM at the Delivery Point. Each Party shall indemnify,defend and hold harmless each other Party from any Claims arising from any actor incident occurring during the period when possession, control and title toProducts is vested or deemed to be vested in the indemnifying Party, except tothe extent such Claims arise from such other Party’s breach of this Agreementor its gross negligence or willful misconduct.

 

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2.2           Resaleof Products by MAEM.

 

(a)           Offers.MAEM may resell the Products purchased from Project Company by submittingoffers to sell such Products in the day-ahead and/or real-time marketsadministered by the ISO (“Offers”).

 

(b)           ThirdParty Contracts. In addition to submitting Offers, MAEM may resell theProducts purchased from Project Company by entering into bilateral contracts,forward sales, financial transactions (including, but not limited to, hedges,swaps, contracts for differences and options), tolling agreements, powerpurchase agreements and other transactions (“Third Party Contracts”).

 

(c)           Costsand Revenues. All costs and revenues associated with Offers and Third PartyContracts will be charged, or paid, to Project Company as such costs andrevenues are actually incurred or received by MAEM, as further described in thecalculation of Net Market Revenues pursuant to Section 8.2.

 

(d)           Strategies.MAEM’s strategies with respect to all Offers, Third Party Contracts and allScheduling activities shall be consistent with:

 

(i)            theoperating parameters and limitations of the Generating Station, as provided bythe Project Company to MAEM;

 

(ii)           thelimitations imposed by any transmission service reservations for the purpose oftransmitting Products from the Generating Station;

 

(iii)          ProjectCompany’s scheduled maintenance plans with respect to the Generating Station,as agreed to between the Parties;

 

(iv)          theavailability of the Generating Station (including Fuel handling and storagefacilities), as communicated by Project Company to MAEM;

 

(v)           theISO FERC Tariff and other ISO rules and procedures in effect from time to time;

 

(vi)          applicablerequirements of any Transmission Provider and/or Transportation Provider;

 

(vii)         Fuelavailability;

 

(viii)        GoodUtility Practices;

 

(ix)           anyenvironmental limitations applicable to the Generating Station; and

 

(x)            operatingprotocols agreed to from time to time by the Parties.

 

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**ARTICLE 3.**

**FUEL SERVICES**

 

3.1           AllRequirements Fuel Supply. With the exception of any Direct Contracts asdescribed in Section 4.1, MAEM shall procure and supply to Project Company, onan exclusive basis, all Fuel required by the Generating Station in accordancewith Good Utility Practices and the terms and conditions of this Agreement. ProjectCompany shall reimburse MAEM for such Fuel at MAEM’s actual cost. MAEM hasentered into or will enter into Fuel hedges and trading activities (including,but not limited to, physical and financial hedges, swaps and options) inconnection with MAEM’s Fuel supply obligations pursuant to this Section 3.1. Thecosts and revenues associated with such Fuel hedging and trading activitieswill be attributed to the Asset Book and charged to, or paid to, ProjectCompany as such costs and revenues are actually incurred or received by MAEM,as further described in the calculation of Net Market Revenues pursuant toSection 8.2.

 

3.2           Transportationand Scheduling. MAEM shall schedule or arrange for scheduling services withits Transportation Providers to deliver Fuel to the Fuel Delivery Point. MAEMshall manage Fuel imbalances on behalf of Project Company and all costs andrevenues associated with Fuel imbalances will be attributed to the Asset Bookand charged to, or paid to, Project Company as such costs and revenues areactually incurred or received by MAEM.

 

3.3           Title,Risk of Loss and Indemnity. As between the Parties, MAEM shall be deemed tobe in exclusive possession and control (and be responsible for any damages orinjury caused thereby) of the Fuel prior to delivery thereof at the FuelDelivery Point, and Project Company shall be deemed to be in exclusivepossession and control (and be responsible for any damages or injury causedthereby) of the Fuel at and after delivery thereof at the Fuel Delivery Point. MAEMwarrants that it will deliver to Project Company all Fuel free and clear of allliens, claims and encumbrances arising prior to delivery thereof at the FuelDelivery Point. Title to and risk of loss related to delivered Fuel shalltransfer from MAEM to Project Company at the Fuel Delivery Point. Each Partyshall indemnify, defend and hold harmless each other Party from any Claimsarising from any act or incident occurring during the period when possession,control and title to Products is vested or deemed to be vested in theindemnifying Party, except to the extent such Claims arise from such otherParty’s breach of this Agreement or its gross negligence or willful misconduct.

 

**ARTICLE 4.**

**DIRECT CONTRACTS**

 

4.1           DirectContracts.

 

(a)           AgencyServices. Notwithstanding anything to the contrary in Sections 2.1 or 3.1of this Agreement, Project Company may enter into contracts to (i) sell theProducts available from the Generating Station directly to a third party ratherthan selling such Products to MAEM and/or (ii) purchase Fuel required by theGenerating Station directly from a third party rather than purchasing such Fuelfrom MAEM (collectively “Direct Contracts”). Project Company hereby appoints 

 

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MAEM as its agent inadministering any Direct Contract including, but not limited to, Scheduling,billing, settlements with the ISO (if applicable) and other services requiredby Project Company pursuant to the terms of such Direct Contract. ProjectCompany shall continue to pay MAEM the Service Fee for the agency services providedby MAEM during the term of a Direct Contract. As agent, MAEM shall neitherdirectly purchase or sell, or contract for the purchase or sale, nor take titleto or possession and control of any Products or Fuel. Rather, as between MAEMand Project Company, when MAEM is acting as agent under any Direct Contract,Project Company shall be deemed to have title and exclusive possession andcontrol of all Products sold to, and all Fuel purchased from, third parties,and Project Company shall bear the risk of loss associated with such Productsand Fuel.

 

(b)           Costsand Revenues. The calculation of Net Market Revenues shall exclude anycosts or revenues associated with a Direct Contract. All such costs andrevenues shall be paid and received by Project Company. If a third partycustomer or other entity pays MAEM any amounts due Project Company under aDirect Contract, MAEM shall hold such amounts in trust for the applicableProject Company and remit such funds to Project Company on or before thetwentieth (20th) day of each month, or if such day is not a businessday, the immediately following business day.

 

4.2           Cooperation.The Parties shall cooperate to fulfill the obligations of Project Companyand/or MAEM as set forth in the Direct Contract and/or Third Party Contract, asapplicable. Notwithstanding the foregoing, all payment obligations under anyDirect Contract shall be the sole responsibility of Project Company. In aneffort to maximize Net Market Revenues, Project Company agrees that MAEM shallhave the right to purchase Products from third parties or the market, in lieuof the Generating Station producing such Products, for the purpose of meetingthe supply obligations of Project Company or MAEM under any Direct Contract orThird Party Contract (“Purchased Power”); provided, however, any such purchaseshould only occur when the Project Company’s cost to generate the Productsexceeds the prevailing market price for such Products. Project Company and MAEMshall notify the others promptly if it becomes aware of any dispute under, orany proposed amendment to, a Direct Contract or Third Party Contract. ProjectCompany and MAEM acknowledge and agree that certain provisions of thisAgreement including, without limitation, MAEM’s scheduling and fuel supplyobligations, may not be consistent with the provisions of a Direct Contract ora Third Party Contract (such as a tolling agreement for example). In the eventof such inconsistency, the provisions of the Direct Contract or Third PartyContract shall control.

 

**ARTICLE 5.**

**ASSET BOOK; ADDITIONAL SERVICES**

 

5.1           AssetBook. MAEM will maintain an asset management book (the “Asset Book”) totrack and measure the financial performance of all transactions with respect tothe Generating Station including, but not limited to, (i) the sale of Productsgenerated by, or available from, the Generating Station pursuant to any Offers,Third Party Contracts and/or Direct Contracts, (ii) Purchased Power, (iii) thepurchase of Fuel and any related Fuel hedges and trading activities, (iv) thepurchase of Emissions Allowances and any related emissions hedges and trading 

 

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activities and (v) thepurchase of transmission and/or transportation capacity. The Asset Book shallbe separate from any MAEM trading book or any other asset book maintained byMAEM for other Asset Companies.

 

5.2           EmissionsPlanning and Related Responsibilities. MAEM shall provide Project Companyemissions planning, in consultation with Project Company, to assist in thecompliance of the Generating Station at all times and on an ongoing basis withall currently effective emissions requirements, permits and regulations. UponProject Company’s request, MAEM will procure all Emission Allowances necessaryfor the operation of the Generating Station, and dispose of excess EmissionAllowances, which are not needed for the operation of the Generating Station. MAEMwill charge Project Company MAEM’s actual cost of acquiring the EmissionAllowances and remit the actual proceeds of any Emission Allowances sales toProject Company, as adjusted for any gains or losses on emission hedges andtrading activities.

 

5.3           RegulatoryReports. MAEM will make all quarterly filings to the FERC required forProducts produced by the Generating Stations.

 

**ARTICLE 6.**

**TERM AND TERMINATION**

 

6.1           Term.This Agreement shall become effective on the Agreement Date and shall continuein effect unless terminated pursuant to Section 6.2 or Section 9.2(a).

 

6.2           EarlyTermination Event.

 

(a)           Inthe event the Generating Station is no longer partially owned by an affiliateof MAEM, this Agreement shall automatically terminate, without any furtheraction required by either Party, as of the effective date of the transfer ofownership of the Generating Station.

 

(b)           EitherParty may terminate this Agreement upon thirty (30) days written notice to theother Party.

 

6.3           Obligationsupon Termination.

 

(a)           Uponany termination of this Agreement pursuant to Section 6.2 hereof, MAEM shallendeavor to (i) terminate any transactions entered into by MAEM in connectionwith this Agreement which extend beyond such termination including, but notlimited to, Third Party Contracts entered into pursuant to Section 2.2(b), (ii)assign such transactions to the new owner of the Generating Station(s) and/or(iii) enter into an agreement with the new owner to allow MAEM to continue tofulfill its obligations under any existing transactions. Any such terminationsand/or assignments shall be consummated in such a manner as to fully releaseMAEM and Project Company from any liability or obligation thereunder as of thetermination date and/or the assignment effective date of the applicabletransactions. Any costs or revenues associated with termination payments orsettlement amounts as a result of liquidating and terminating any transactionsshall be charged to or paid to Project Company as described under

 

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Section 2.2(c).

 

(b)           Uponany termination of this Agreement pursuant to Section 9.2(a) hereof, theParties shall transfer or settle any outstanding transactions entered into byMAEM in connection with this Agreement which extend beyond such terminationincluding, but not limited to, Third Party Contracts entered into pursuant toSection 2.2(b). Any such transfer or settlement shall be consummated in such amanner as to assign or convey to Project Company the full benefits andobligations of such transactions, and to fully release MAEM from any liabilityor obligation thereunder. To the extent that MAEM’s rights or obligations underany such transaction may not be assigned without the consent of a third party,and such consent has not or cannot be obtained with the commercially reasonableefforts of the Parties, this provision shall not constitute an agreement toassign the same if an attempted assignment would constitute a breach thereof orbe unlawful, and the Parties, to the maximum extent permitted by law and theapplicable transaction, shall enter into such commercially reasonablearrangements as are necessary to fulfill the intent of this Section 6.3(b). TheParties further agree to take such actions, and execute and deliver suchagreements, documents, instruments and certificates, as are necessary toconsummate the transactions contemplated by this Section 6.3(b).

 

**ARTICLE7.**

**REPRESENTATIONSAND WARRANTIES**

 

7.1           ProjectCompany’s Representations and Warranties. Project Company makes thefollowing representations and warranties as a basis for its undertakingscontained herein:

 

(a)           ProjectCompany is a limited liability company duly organized and validly existingunder the laws of the State of Delaware, is qualified to do business in eachforeign jurisdiction in which it transacts business, and is in good standingunder its certificate of formation and the laws of the State of Delaware, hasthe requisite power and authority to own its properties, and to carry on itsbusiness as now being conducted.

 

(b)           ProjectCompany has full power and authority to enter this Agreement and perform itsobligations hereunder. The execution, delivery and performance of thisAgreement and the consummation of the transactions contemplated hereby havebeen duly authorized by all necessary limited liability company action and donot and will not contravene its organizational documents or conflict with,result in a breach of, or entitle any party (with due notice or lapse of timeor both) to terminate, accelerate or declare a default under, any agreement orinstrument to which Project Company is a party or by which Project Company isbound. The execution, delivery and performance by Project Company of thisAgreement will not result in any violation by Project Company of any law, ruleor regulation applicable to it. Project Company is not a party to, nor subjectto or bound by, any judgment, injunction or decree of any court or othergovernmental entity which may restrict or interfere with the performance ofthis Agreement by it. This Agreement is Project Company’s legal, valid andbinding obligation, enforceable against Project Company in accordance with itsterms, except as (i) such enforcement may be subject to bankruptcy, insolvency,reorganization, moratorium or other similar laws now or hereafter in effectrelating to creditors’ rights generally, and (ii) the remedy of specificperformance and 

 

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injunctive relief may besubject to equitable defenses and to the discretion of the court before whichany proceeding therefor may be brought.

 

(c)           Noconsent, waiver, order, approval, authorization, permit or order of, orregistration, qualification or filing with, any court or other governmentalagency or authority is required for the execution, delivery and performance byProject Company of this Agreement and the consummation by Project Company ofthe transactions contemplated hereby.

 

(d)           ProjectCompany has obtained all necessary governmental authorizations, approvals,consents, waivers, exceptions, licenses, filings, registrations, rulings,permits, tariffs, certifications and exemptions to perform its obligationsunder this Agreement.

 

(e)           There isnot pending or, to its knowledge, threatened against it, any legal proceedingsthat could materially adversely affect its ability to perform its obligationsunder this Agreement.

 

(f)            NoEvent of Default or event which, with the giving of notice or lapse of time, orboth, would constitute an Event of Default with respect to Project Company hasoccurred and is continuing and no such event or circumstance would occur as aresult of its entering into or performing its obligations under this Agreementor any other document relating to this Agreement.

 

7.2           MAEM’sRepresentations and Warranties. MAEM makes the following representationsand warranties as a basis for its undertakings contained herein:

 

(a)           MAEM is alimited partnership duly organized and validly existing under the laws of theState of Delaware, is in good standing under its certificate of limitedpartnership and the laws of the State of Delaware, is qualified to do businessin each foreign jurisdiction in which it transacts business, has the requisitepower and authority to own its properties, and to carry on its business as nowbeing conducted.

 

(b)           MAEM hasfull power and authority to enter this Agreement and perform its obligationshereunder. The execution, delivery and performance of this Agreement and theconsummation of the Transactions contemplated hereby have been duly authorizedby all necessary limited partnership action by MAEM and do not and will notcontravene its organizational documents or conflict with, result in a breachof, or entitle any party (with due notice or lapse of time or both) toterminate, accelerate or declare a default under, any agreement or instrumentto which MAEM is a party or by which MAEM is bound. The execution, delivery andperformance by MAEM of this Agreement will not result in any violation by MAEMof any law, rule or regulation applicable to it. MAEM is not a party to, norsubject to or bound by, any judgment, injunction or decree of any court orother governmental entity which may restrict or interfere with the performanceof this Agreement by it. This Agreement is MAEM’s legal, valid and bindingobligation, enforceable against MAEM in accordance with its terms, except as(i) such enforcement may be subject to bankruptcy, insolvency, reorganization,moratorium or other similar laws now or hereafter in effect relating tocreditors’ rights generally and (ii) the remedy of specific performance andinjunctive relief may be subject to equitable defenses and to the 

 

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discretion of the courtbefore which any proceeding therefor may be brought.

 

(c)           Noconsent, waiver, order, approval, authorization, permit or order of, orregistration, qualification or filing with, any court or other governmentalagency or authority is required for the execution, delivery and performance byMAEM of this Agreement and the consummation by MAEM of the transactionscontemplated hereby.

 

(d)           MAEM hasobtained all necessary governmental authorizations, approvals, consents,waivers, exceptions, licenses, filings, registrations, rulings, permits,tariffs, certifications and exemptions to perform its obligations under thisAgreement.

 

(e)           There isnot pending or, to its knowledge, threatened against it, any legal proceedingsthat could materially adversely affect its ability to perform its obligationsunder this Agreement.

 

(f)            NoEvent of Default or event which, with the giving of notice or lapse of time, orboth, would constitute an Event of Default with respect to MAEM has occurredand is continuing and no such event or circumstance would occur as a result ofits entering into or performing its obligations under this Agreement.

 

**ARTICLE 8.**

#### **BILLINGAND PAYMENT**

#### ** **

8.1           CostAllocation. For services rendered by MAEM to Project Company under thisAgreement and/or any Direct Contracts, Project Company shall pay MAEM itsmonthly share of allocated costs for fulfilling its responsibilities to theProject Company under this Agreement and/or any Direct Contract, including, butnot limited to, personnel costs (“Service Fee”). For purposes of determiningthe Project Company’s share of allocated costs, MAEM shall apply an industrystandard methodology which is applied uniformly across the Asset Companies. Eachof MAEM and the Project Company acknowledges that the monthly allocations maybe adjusted from time to time.

 

8.2           Billingand Payment. MAEM shall pay Project Company the Net Market Revenues due forthe prior month (or, if Net Market Revenues for such month are negative,Project Company shall pay MAEM an amount equal to such negative balance) bywire transfer to the payment address provided by the recipient on or before thetwentieth (20th) day of each month, or if such day is not a businessday, the immediately following business day. At the time of each monthlypayment, MAEM shall render to Project Company a statement detailing the NetMarket Revenues for the prior month, and shall provide Project Company withsupporting documentation for each such monthly statement, identifyingcalculations underlying such Net Market Revenues. If any person later adjustsamounts payable by or paid to MAEM with respect to transactions in the AssetBook, such amounts will be credited to, or paid by, Project Company in themonth in which MAEM receives notice of the adjustment. The preceding sentenceshall survive termination of this Agreement. If a third party fails to pay MAEMany amount due for Products sold to such party, MAEM shall only be required topay the Asset Company the amount 

 

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received by MAEM fromsuch third party. In other words, MAEM shall not be responsible for non-paymentby a third party customer, and any Gross Revenues shall not be adjusted upwardto account for any such non-payment.

 

“Net Market Revenues” means Gross Revenues minusExpenses. Net Market Revenues shall be calculated in accordance with GAAP.

 

**“Gross Revenues” means allrevenues attributed to the Asset Book for a certain month including, withoutlimitation, the actual revenues received by MAEM from (a) sales of all Productsgenerated by, or available from, the Generating Station, (b) sales of PurchasedPower, (c) excess Fuel sales, (d) sales or trades of excess Emissions Allowancesfrom the Generating Station and (e) gains associated with physical and/orfinancial products (including, but not limited to, swaps, contracts fordifferences and options) purchased for the Asset Book related to hedges andtrading activities.**

** **

“Expenses” means all costs attributed to theAsset Book for a certain month, including costs reimbursed to MAEM for actualcosts in performing the services including, but not limited to, costs for (a)purchases of Fuel, (b) purchases of Emissions Allowances, (c) losses associatedwith physical and/or financial products (including, but not limited to, swaps,contracts for differences and options) purchased for the Asset Book related tohedges and trading activities, (d) broker and/or transaction fees, (e)transmission congestion contracts for sales from the Generating Station, (f)Collateral Costs, (g) transmission and/or transportation costs related todelivery of the Products and/or Fuel, (h) Purchased Power and (i) other actualcosts in connection with the services described in Articles 2, 3 and 4 hereof.

 

8.3           MonthlyStatements. Project Company and MAEM will cooperate to provide monthlystatements in reasonable detail showing the calculation of the Net MarketRevenues, to enable Project Company to track Net Market Revenues. ProjectCompany shall have the right, upon reasonable notice, to examine and/or auditthe Asset Book from time to time.

 

8.4           Interestand Disputed Amounts. If either Party fails to make any payment on orbefore the applicable payment due date, such overdue amounts shall accrueinterest at the Interest Rate from, and including, the applicable payment duedate to, but excluding, the date of payment. Any disputed invoiced amounts,except amounts which are manifestly inaccurate, shall be paid in full on theapplicable payment due date, subject to later return together with interestaccrued at the Interest Rate depending on the resolution of the dispute. Overpaymentsor underpayments identified by the Parties shall be returned or credited,together with interest accrued at the Interest Rate, to their rightful ownersin the first following month.

 

8.5           FERCRefunds. In the event MAEM is ordered by FERC to refund any paymentsreceived by MAEM from third parties related to any transactions in the AssetBook, Project Company agrees to pay, or reimburse MAEM if MAEM has paid, therefund amount to FERC or a third party. The Project Company’s obligation to payFERC or a third party, or reimburse MAEM, any refund amount shall be withoutregard to the cause or causes related thereto 

 

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including, withoutlimitation, the negligence of MAEM. Any such payment to FERC or a third partyshall be made within the time period ordered by FERC.

 

**ARTICLE 9.**

**DEFAULTS AND REMEDIES**

 

9.1           Eventsof Default. Any one or more of the following shall constitute an “Event ofDefault” hereunder with respect to a Party:

 

(a)           defaultshall occur in the payment of any amounts due from such Party hereunder whichshall continue for more than ten (10) days after written notice from the otherParty;

 

(b)           other thanas provided in Section 9.1(a) above, default shall occur in the performance ofany covenant or condition to be performed by such Party under this Agreementand such default shall continue unremedied for a period of thirty (30) daysafter written notice from the other Party specifying the nature of suchdefault; or

 

(c)           arepresentation or warranty made by such Party herein shall have been false ormisleading in any material respect when made; provided, however, if suchrepresentation or warranty is capable of being corrected, no Event of Defaultshall have occurred if such Party is diligently pursuing such correction andsuch representation or warranty is corrected within thirty (30) days of suchParty obtaining knowledge of the false and misleading nature of the statement.

 

9.2           Remedies.The Parties shall have the following remedies available to them hereunder:

 

(a)           Uponthe occurrence of an Event of Default by either Party hereunder, the non-defaultingParty shall have the right (i) to collect all amounts then or thereafter due toit from the defaulting Party hereunder, and (ii) upon written notice to theother Party, to terminate this Agreement at any time during the continuation ofsuch Event of Default. The terminating Party shall have all rights and remediesavailable to it under applicable law, subject to the limitations set forth inSection 11.8.

 

(b)           Withoutlimiting the foregoing, any unexcused breach of this Agreement or failure ofeither Party to perform its obligations hereunder shall subject such Party tothe payment of actual damages to the other Party, regardless of any cureperiod.

 

**ARTICLE 10.**

**FORCE MAJEURE**

 

10.1         Force Majeure. Ifeither Party is rendered wholly or partly unable to perform its obligationsunder this Agreement because of a Force Majeure event, that Party will beexcused from whatever performance is affected by the Force Majeure event to theextent so affected, provided that (a) the non-performing Party, as soon aspractical after knowing of the occurrence of the Force Majeure event, gives theother Party written notice describing the particulars of the 

 

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occurrence; (b) the suspension of performance is of nogreater scope and of no longer duration than is reasonably required by theForce Majeure event; (c) the non-performing Party uses commercially reasonableefforts to overcome or mitigate the effects of such occurrence, provided,however, that this provision shall not require Project Company to deliver, orMAEM to receive, any Products at points other than the Delivery Point; and (d)when the non-performing Party is able to resume performance of its obligationshereunder, that Party shall give the other Party written notice to that effectand shall promptly resume such performance.

 

**ARTICLE 11.**

**MISCELLANEOUS PROVISIONS**

 

11.1         Assignment; Successorsand Assigns.

 

(a)           No assignment ordelegation by either Party (or any successor or assignee thereof) of thisAgreement, in whole or in part, shall be made or become effective without theprior written consent of the other Party in each case obtained, which consentmay not be unreasonably withheld. Any assignments or delegations by eitherParty shall be in such form as to assure that such Party’s obligations underthis Agreement will be honored fully and timely by any succeeding party.

 

(b)           Notwithstanding Section11.1(a), this Agreement shall be assigned from MAEM to Mirant Energy Trading,LLC (“MET”) without any action required by the Parties pursuant to the terms ofthe Plan and the Implementation Order. The assignment shall occur on theMAEM/MET Effective Date (as such term is defined in the Plan) and thereafter,all references to MAEM in this Agreement shall be references to MET. As of theMAEM/MET Effective Date, Section 7.2(a) shall be amended to delete “limitedpartnership” and replace it with “limited liability company”.

 

11.2         Notices.All notices, requests and other communications hereunder (herein collectively a“notice” or “notices”) shall be deemed to have been duly delivered, given ormade to or upon any Party hereto if in writing and delivered by hand againstreceipt, or by certified or registered mail, postage pre-paid, return receiptrequested, or to a courier who guarantees next business day delivery or sent bytelecopy (with confirmation) to such Party at its address set forth below or tosuch other address as such Party may at any time, or from time to time, directby notice given in accordance with this Section 10.2.

 
| **IF TO PROJECT** |   |                                 |
|-------------------|--------|--------------------------------------|
| **COMPANY:**      |   | Mirant Zeeland, LLC                  |
|              |   | 1155 Perimeter Center West           |
|              |   | Atlanta, Georgia 30338               |
|              |   | Attention: President                 |
|              |   |                                 |
| **IF TO MAEM:**   |   | Mirant Americas Energy Marketing, LP |
|              |   | 1155 Perimeter Center West           |
|              |   | Atlanta, Georgia 30338               |

 

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|           |   | Attention: Legal Department |
|----------------|--------|-----------------------------|
|           |   |                        |
| **IF TO MET:** |   | Mirant Energy Trading, LLC  |
|           |   | 1155 Perimeter Center West  |
|           |   | Atlanta, Georgia 30338      |
|           |   | Attention: Legal Department |

 

The date of delivery of any such notice, request or other communicationshall be the earlier of (i) the date of actual receipt or (ii) three (3)business days after such notice, request or other communication is sent bycertified or registered mail, (iii) if sent by courier who guarantees next businessday delivery, the business day next following the day of such notice, requestor other communication is actually delivered to the courier or (iv) the dayactually telecopied.

 

11.3         GOVERNINGLAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OFTHE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWTHAT WOULD OTHERWISE CAUSE THE LAW OF ANY STATE OTHER THAN NEW YORK TO APPLY.

 

11.4         ComplianceWith Laws. At all times during the term of this Agreement, the Partiesshall comply with all laws, rules, regulations, and codes of all governmentalauthorities having jurisdiction over each of their respective businesses whichare now applicable, or may be applicable hereafter, including withoutlimitation, all special laws, policies, ordinances, or regulations now inforce, as amended or hereafter enacted. The Parties hereto shall maintain alllicenses, permits and other consents from all governmental authorities havingjurisdiction for the necessary use and operation of their respective business. Nothingherein shall be deemed a waiver of the Parties’ right to challenge the validityof any such law, rule or regulation.

 

11.5         EntireAgreement. This Agreement sets forth the entire agreement of the Partieswith respect to the subject matter herein and takes precedence over all priorunderstandings. This Agreement supersedes and terminates all previouslyexecuted agreements between Project Company and MAEM.

 

11.6         Amendments.This Agreement may not be amended except by a writing signed by the Parties.

 

11.7         Severability.The invalidity or unenforceability of any provisions of this Agreement shallnot affect the other provisions hereof. If any provision of this Agreement isheld to be invalid, such provisions shall not be severed from this Agreement;instead, the scope of the rights and duties created thereby shall be reduced bythe smallest extent necessary to conform such provision to the applicable law,preserving to the greatest extent the intent of the Parties to create such rightsand duties as set out herein. If necessary to preserve the intent of theParties hereto, the Parties shall negotiate in good faith to amend thisAgreement, adopting a substitute provision for the one deemed invalid orunenforceable that is legally binding and enforceable and which restores to thetwo Parties to the greatest extent possible the benefit of their respectivebargains on the Agreement Date.

 

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11.8         Limitationon Damages. NEITHER PARTY SHALL BE ENTITLED TO RECOVER SPECIAL, INDIRECT,INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES HEREUNDER.

 

11.9         RiskManagement Policy. The Parties acknowledge and agree that this Agreement issubject to the Risk Management Policy approved by the Parties’ Board ofDirectors. In the event of a conflict between the provisions of this Agreementand the terms of the Risk Management Policy, the terms of the Risk ManagementPolicy shall govern and control.

 

[SIGNATURES APPEAR ON THEFOLLOWING PAGE]

 

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IN WITNESS WHEREOF, and intending to be legally boundhereby, the Parties hereto have caused this Agreement to be duly executed as aninstrument under seal by their respective duly authorized officers as of thedate and year first above written.

 

 
| Mirant Americas Energy  Marketing, LP |
|---------------------------------------|
| By:                                   | Mirant Americas  Development, LLC |
|                                  | Its General Partner |

 
| By:  | New MAEM Holdco, LLC |
|------|----------------------|
| Its: | Sole Member          |

 
| By:    | /s/ J. William Holden  III             |   |
|--------|----------------------------------------|--------|
| Name:  | J. William Holden III                  |
| Title: | Senior Vice President  & Treasurer |

 
| Mirant Zeeland, LLC |
|---------------------|
|                |
| By:                 | /s/ J. William Holden  III |   |
| Name:               | J. William Holden III |
| Title:              | Senior Vice President  & Treasurer |

 
| As of the MAEM/MET  Effective Date: |
|-------------------------------------|
|                                |
| Mirant Energy Trading,  LLC         |
|                                |
| By:                                 | /s/ J. William Holden  III |   |
| Name:                               | J. William Holden III |
| Title:                              | Senior Vice President,  Chief Financial Officer & Treasurer |

 

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**EXHIBIT A**

 

| **Unit**  | ** ** | **Location**      | ** ** | **Nameplate  Capacity** | ** ** | **Commercial Operation  Date** |
|-----------|------------|-------------------|------------|-------------------------|------------|--------------------------------|
| Zeeland 1 |       | Zeeland, Michigan |       | 298 MW                  |       | June 2001                      |
| Zeeland 2 |       | Zeeland, Michigan |       | 540 MW                  |       | June 2002                      |

 

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