**Exhibit 10.6**

 

**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 among**MIRANT AMERICAS ENERGY MARKETING, LP**, aDelaware limited partnership (“MAEM”),**MIRANT BOWLINE, LLC**(“MirantBowline”), **MIRANT LOVETT, LLC**(“Mirant Lovett”),and **MIRANT NY-GEN, LLC** (“Mirant NY-Gen”),all Delaware limited liability companies (Mirant Bowline, Mirant Lovett andMirant NY-Gen are referred to individually as “Project Company” andcollectively as the “Project Companies”).

 

**RECITALS**

 

WHEREAS, ProjectCompanies own and operate certain electric generating stations as set forth on Exhibit Ahereto (collectively, the “Generating Stations”);

 

WHEREAS, Project Companiesmay enter into contracts with third parties to sell capacity, electricity,ancillary services and/or other related products generated by, or availablefrom, the Generating Stations;

 

WHEREAS, in the absenceof such third party contracts, Project Companies desire to contract herein tosell all or a portion of the capacity, electricity, ancillary services and/orother related products generated by, or available from, the Generating Stationsto MAEM, and MAEM desires to purchase such capacity, electricity, ancillaryservices and/or other related products on the terms and conditions set forthherein; and

 

WHEREAS, ProjectCompanies desire that MAEM perform certain services related to the managementand operation of their Generating Stations, and MAEM desires to perform suchservices.

 

NOW, THEREFORE, inconsideration of the foregoing and the mutual covenants contained herein, andother good and valuable consideration, the receipt and sufficiency of which arehereby acknowledged by the Parties, the Parties hereby agree as follows:

 

**ARTICLE 1.**

**DEFINITIONS**

 

The following capitalizedterms, whether used in the singular or plural, shall be defined as provided inthis Article 1.

 

“Agreement” hasthe meaning set forth in the first paragraph hereof.

 

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

 

“Asset Book” hasthe meaning set forth in Section 5.1.

 

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“Asset Companies”means any affiliates of MAEM either directly or indirectly owned by MirantCorporation, other than Mirant Bowline, Mirant Lovett or Mirant NY-Gen, whichown electric generating stations in the United States.

 

“Bankruptcy Court”means the United States Bankruptcy Court for the Northern District of Texas,Fort Worth Division.

 

“Bowline Station”means the Generating Station owned by Mirant Bowline.

 

“Bowline Unit 1”means unit 1 at Bowline Station.

 

“Bowline Unit 2”means unit 2 at Bowline Station.

 

“Chapter 11 Cases”means the cases commenced under chapter 11 of the United States Bankruptcy Codepending before the Bankruptcy Court with respect to Mirant Corporation and itsaffiliated debtors, styled as *In re Mirant Corporation,et al*., Chapter 11 Case No. 03-46590 (DML), JointlyAdministered.

 

“Claims” means allclaims or actions, threatened or filed, whether groundless, false orfraudulent, that directly or indirectly relate to the subject matter of anindemnity, and the resulting losses, damages, expenses, attorneys’ fees andcourt costs, whether incurred by settlement or otherwise, and whether suchclaims or actions are threatened or filed prior to or after the termination ofthis Agreement.

 

“Coal Delivery Point”means the physical location at Lovett Station where MAEM shall deliver coal toMirant Lovett.

 

“CollateralCosts” means an amount determined on a monthly basis by MAEM, in goodfaith, as the cost incurred by MAEM or Mirant North America, LLC to postcollateral in the form of cash and/or letters of credit to third parties asrequired under the terms of the transactions attributed to the Asset Book basedon the weighted average of the borrowing rates under the senior creditfacilities, senior notes and other indebtedness for borrowed money of MirantNorth America, LLC.

 

“Confirmation Date”means December 9, 2005 which is the date on which the clerk of theBankruptcy Court entered the Confirmation Order on the docket of the BankruptcyCourt.

 

“Confirmation Order”means, with respect to the Chapter 11 Cases, the Order Confirming the Amendedand Restated Second Amended Joint Chapter 11 Plan of Reorganization for MirantCorporation and its Affiliated Debtors.

 

“Day Tanks” meansthe day tank for Bowline Unit 1 and the day tank for Bowline Unit 2.

 

“Delivery Point”means, with respect to Products generated by, or available from, the GeneratingStation, the high side of the generation step-up transformer located at theGenerating

 

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Station, where itconnects to the Transmission Provider’s transmission system; and, with respectto Products generated by, or available from, sources other than the GeneratingStation, such other point on the Transmission Provider’s transmission system asMAEM and Project Company may determine.

 

“Direct Contracts”has the meaning set forth in Section 4.1.

 

“Emissions Allowances”means authorizations under state or federal (as applicable) air qualityregulations to emit either one ton of nitrogen oxides (“NOx”) or sulfur dioxide(“SO2”) at any time during any applicable calendar year.

 

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

 

“Expenses” has themeaning set forth in Section 8.2.

 

“FERC” means theFederal Energy Regulatory Commission, or its successor.

 

“Force Majeure”means an event or circumstance whichprevents a Party from performing its obligations, which event or circumstancewas not anticipated as of the date the transaction was agreed to, which is notwithin the reasonable control of, or the result of the negligence of, theclaiming Party, and which, by the exercise of due diligence, the claiming Partyis unable to overcome or avoid or cause to be avoided.  Force Majeure shall not be based on (i) theloss of MAEM’s markets; (ii) MAEM’s inability economically to use orresell the Product purchased hereunder; (iii) the loss or failure ofProject Company’s supply; or (iv) Project Company’s ability to sell theProduct at a price greater than the purchase price set forth in thisAgreement.  Neither Party may raise aclaim of Force Majeure based in whole or in part on curtailment by aTransmission Provider unless (i) such Party has contracted for firmtransmission with a Transmission Provider for the Product to be delivered to orreceived 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 coal,Fuel Oil and/or natural gas, as applicable.

 

“Fuel DeliveryPoint(s)” means the Coal Delivery Point, Fuel Oil Delivery Point and/orNatural Gas Delivery Point, as applicable.

 

“Fuel Oil” means No. 6fuel oil, No. 2 fuel oil and/or jet fuel, as applicable.

 

“Fuel Oil DeliveryPoint” means the physical location at Bowline Station where MAEM shalldeliver Fuel Oil to Mirant Bowline.

 

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“Fuel Oil Index Price”is the mean published price (in $/barrel) for 0.3% sulfur high pour residualoil (No. 6 Fuel Oil) for New York Harbor cargo delivery as published inPlatt’s Oilgram plus $0.50.

 

“Fuel OilSpecifications” has the meaning given in Section 3.4(c).

 

“Generating Stations”has the meaning provided in the recitals.

 

“Good UtilityPractices” mean any of the practices, methods or acts engaged in or approvedby a significant portion of the electric energy industry with respect tosimilar facilities during the relevant time period which in each case, in theexercise of reasonable judgment in light of the facts known or that should havebeen known at the time a decision was made, could have been expected toaccomplish the desired result at reasonable cost consistent with good businesspractices, reliability, safety, law, regulation, environmental protection andexpedition.  Good Utility Practices arenot intended to be limited to the optimum practices, methods or acts to theexclusion of all others, but rather to delineate the acceptable practices,methods or acts generally accepted in such industry.

 

“Gross Revenues”has the meaning set forth in Section 8.2.

 

“Implementation Order”means, with respect to the Chapter 11 Cases, the Implementing Order RegardingTransfer of Letters of Credit, Guarantees and Certain Collateral SecuringTrading Obligations Transferred Pursuant to the Plan, dated December 9,2005.

 

“Interest Rate”means, for any date, two percent (2%) over the per annum rate of interest equalto the prime lending rate as may from time to time be published in the WallStreet Journal under “Money Rates”; provided that the Interest Rate shall neverexceed the maximum interest rate permitted by applicable law.

 

“ISO” means theNew York Independent System Operator, Inc., a not-for-profit corporationestablished pursuant to the Independent System Operator Agreement.

 

“ISO FERC Tariff”means the ISO Market Administration and Control Area Services Tariff, asamended from time to time, as on file with and approved by the FERC.

 

“Locational MarginalPrice” means the locational marginal price established in the day aheadand/or real time energy markets administered by the ISO.

 

“Lovett Station”means the Generating Station owned by Mirant Lovett.

 

“MAEM” has themeaning set forth in the first paragraph of this Agreement.

 

“Massey Coal Agreement”means the Restated Coal Purchase and Sale Agreement between Mirant Lovett andMassey Coal Sales Company, Inc. effective July 1, 1998, as amendedfrom time to time.

 

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“MET” has themeaning set forth in Section 11.1(b).

 

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

 

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

 

“Mirant NY-Gen”has the meaning set forth in the first paragraph of this Agreement.

 

“Natural Gas DeliveryPoint” means the meter at the Generating Station where MAEM shall delivernatural gas to Project Company.

 

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

 

“Offer” has themeaning set forth in Section 2.2(a).

 

“Party” means anyof MAEM or the Project Companies.  In thecontext where MAEM is referenced as a “Party,” a reference to the “other Party”shall mean the Project Companies.  In thecontext where the Project Companies are referenced as a “Party,” a reference tothe “other Party” shall mean MAEM. References to “either Party” or the “Parties” shall have comparablemeanings.

 

“Plan” means, withrespect to the Chapter 11 Cases, the Amended and Restated Second Amended JointChapter 11 Plan of Reorganization for Mirant Corporation and its AffiliatedDebtors dated September 30, 2005.

 

“Products” meanselectric capacity, energy, ancillary services and/or any other related productswhich are or may become commercially recognized in the ISO markets during theterm of this Agreement.

 

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

 

“Purchased Power”has the meaning set forth in Section 4.2.

 

“Scheduling” or “Schedule”means the acts of MAEM and/or its designated representatives of notifying,requesting and confirming to its counterparties and their designatedrepresentatives (including, but not limited to, the ISO or any TransmissionProvider) the quantity and type of Products to be delivered on any given day ordays during the period of delivery at a specified Delivery Point.

 

“Service Fee” hasthe meaning set forth in Section 8.1.

 

“Storage Tank”means a storage tank at Bowline Station dedicated to the storage of Fuel Oil.

 

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

 

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“TransmissionProviders” means the entity or entities transmitting Products on behalf ofProject Company or MAEM to or from the Delivery Point (including, but notlimited to, the ISO or a regional transmission organization).

 

“TransportationProviders” means the entity or entities transporting Fuel on behalf ofProject Company or MAEM to or from the Generating Station.

 

**ARTICLE 2.**

**PRODUCTSALES**

 

2.1                                 IntercompanyProduct Sales.

 

(a)                                  Transactions.  With the exception of any Direct Contracts asdescribed in Section 4.1, Project Company shall sell and deliver, and MAEMshall purchase and receive, or cause to be received, at the Delivery Point, allProducts generated by, and/or available from, the Generating Stations.  MAEM shall resell such Products as describedin Section 2.2.  MAEM shall pay NetMarket Revenues to Project Company, on a monthly basis, for all Productspurchased by MAEM hereunder.  In sellingProducts generated by, or available from, the Generating Stations, MAEM shallattempt to maximize Net Market Revenues for Project Companies.

 

(b)                                 Transmissionand Scheduling.  Project Companyshall be responsible for delivery of Products to the Delivery Point.  MAEM shall arrange and be responsible fortransmission service at and from the Delivery Point.  MAEM shall serve as Scheduling agent onbehalf of Project Company to Schedule and deliver Products with respect toall transactions involving the Generating Station.

 

(c)                                  Title,Risk of Loss and Indemnity. The following provision shall apply to all transactionsinvolving the Generating Station except for Direct Contracts as described in Section 4.1.  As between the Parties, Project Company shallbe deemed 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 Company warrants that it will deliverto MAEM all Products free and clear of all liens, claims and encumbrancesarising prior to delivery thereof at the Delivery Point.  Title to and risk of loss related todelivered Products shall transfer from Project Company to MAEM at the DeliveryPoint.  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 Companies by submittingoffers to sell such Products in the day-ahead and/or real-time marketsadministered by the ISO (“Offers”).

 

(b)                                 ThirdParty Contracts.  In addition tosubmitting Offers, MAEM may resell the Products purchased from ProjectCompanies by entering into bilateral contracts, forward sales, financialtransactions (including, but not limited to, hedges, swaps, contracts fordifferences and options), tolling agreements, power purchase agreements andother 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 all Scheduling activities shall be consistent with:

 

(i)                                     theoperating parameters and limitations of the Generating Station, as provided byProject 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 totime;

 

 (vi)                           applicable requirements ofany 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                              All Requirements FuelSupply.  With the exception of anyDirect Contracts as described in Section 4.1, MAEM shall procure andsupply to Project Companies, on an exclusive basis, all Fuel required by theGenerating Stations in accordance with Good Utility Practices and the terms andconditions of this Agreement.  TheProject Companies shall reimburse MAEM for such Fuel at MAEM’s actual cost withthe exception of Fuel Oil delivered to Bowline Station as described in Section 3.4below.  MAEM has entered into or willenter into Fuel hedges and trading activities (including, but not limited to,physical and financial hedges, swaps and options) in connection with MAEM’sFuel supply obligations pursuant to this Section 3.1.  The costs and revenues associated with suchFuel hedging and trading activities will be attributed to the Asset Book andcharged to, or paid to, Project Company as such costs and revenues are actuallyincurred or received by MAEM, as further described in the calculation of NetMarket Revenues pursuant to Section 8.2.

 

3.2                                 Transportationand Scheduling.  MAEM shall schedule orarrange for scheduling services with its Transportation Providers to deliverFuel to the Fuel Delivery Point.  MAEMshall manage Fuel imbalances on behalf of Project Companies 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 exclusive possessionand control (and be responsible for any damages or injury caused thereby) ofthe Fuel at and after delivery thereof at the Fuel Delivery Point.  MAEM warrants that it will deliver to ProjectCompany all Fuel free and clear of all liens, claims and encumbrances arisingprior to delivery thereof at the Fuel Delivery Point.  Title to and risk of loss related todelivered Fuel shall transfer from MAEM to Project Company at the Fuel DeliveryPoint. Each Party shall indemnify, defend and hold harmless each other Partyfrom any Claims arising from any act or incident occurring during the periodwhen possession, control and title to Products is vested or deemed to be vestedin the indemnifying Party, except to the extent such Claims arise from suchother Party’s breach of this Agreement or its gross negligence or willfulmisconduct.

 

3.4                                 FuelOil Supply to Bowline Station.

 

(a)                                  DailyFuel Oil Requirements.  MAEM shallsupply and deliver Fuel Oil to the Fuel Oil Delivery Point as required byBowline Station.  Mirant Bowline shallpurchase Fuel Oil from MAEM at the Fuel Oil Index Price as such Fuel Oil istransferred from the Storage Tanks to the Day Tanks.  For Fuel Oil transferred on Saturday, theapplicable purchase price shall be the Fuel Oil Index Price for the precedingFriday.  For Fuel Oil transferred onSunday, the applicable purchase price shall be the Fuel Oil Index Price for thefollowing Monday.  For Fuel Oiltransferred on any holiday, the applicable price shall be the Fuel Oil IndexPrice on the business

 

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day preceding suchholiday.  The quantity of Fuel Oildelivered to the Day Tanks shall be recorded by Mirant Bowline daily andreported to MAEM.

 

(b)                                 Transferof Title to Fuel Oil at Termination.  Upon any termination of this Agreementpursuant to Section 6.2 or Section 9.3(a), MAEM shall transfer andsell to Mirant Bowline and Mirant Bowline shall purchase, take title to and payMAEM for Fuel Oil inventories at Bowline Station, as measured at midnight onthe date of transfer.  The purchase priceowed by Mirant Bowline to MAEM for the on-hand Fuel Oil inventories shall bebased on the Fuel Oil Index Price on the date of transfer and shall be payablewithin three (3) Business Days after such date of transfer.  Mirant Bowline shall also pay the Fuel OilIndex Price as of the transfer date for any Fuel scheduled for delivery inaccordance with the terms and provisions of this Agreement prior to the date oftermination and delivered after the date of termination.

 

(c)                                  FuelOil Specifications and Testing.

 

(i)                                     FuelOil supplied by MAEM to the Fuel Oil Delivery Point shall be of a qualitymeeting or better than the specifications for Fuel Oil provided by MirantBowline from time to time (“Fuel Oil Specifications”).  Mirant Bowline and MAEM shall each notify oneanother of any material failure of Fuel Oil to comply with the Fuel OilSpecifications as soon as any Party becomes aware of same.

 

(ii)                                  MAEM,at its own expense, shall arrange for testing of Fuel Oil on the water andtesting associated with any blending activities initiated by MAEM.  Mirant Bowline shall be responsible forroutine tests performed prior to transferring Fuel Oil between tanks and priorto burning Fuel Oil.

 

(d)                                 Failureof Fuel Oil to Materially Conform to Fuel Oil Specifications.

 

(i)                                     IfFuel Oil tendered for delivery under this Agreement to the Fuel Oil DeliveryPoint fails for any reason to materially conform to the Fuel OilSpecifications, Mirant Bowline may refuse all or any part of such Fuel Oil(giving MAEM the reasons for such refusal as soon as practical).

 

(ii)                                  Tothe extent Fuel Oil is delivered to the Fuel Oil Delivery Point and is not incompliance with the Fuel Oil Specifications, and such non-compliance is notapproved by Mirant Bowline, Mirant Bowline may instruct MAEM to arrange at nocost to Mirant Bowline for the reasonably expeditious removal of any suchnon-compliant Fuel Oil from the Storage Tanks.

 

(e)                                  FuelOil Loading, Unloading, Storage and Handling Facilities.

 

(i)                                     MirantBowline shall, as soon as practical under the circumstances, provide MAEM withnotice of any applicable operating constraints affecting their StorageTanks.  Mirant Bowline shall provide MAEMwith a daily inventory, Storage Tank farm analysis report, and the volume ofFuel Oil delivered to the Fuel Oil Delivery Point.  Further, Mirant Bowline,

 

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after each delivery ofFuel Oil to the Storage Tanks, shall provide MAEM with a terminal portlog/discharge report and the current delivery analysis report.

 

(ii)                                  MirantBowline, at its own expense, and in accordance with Good Utility Practices,will maintain, operate and restore to operable condition, or contract withthird parties for such maintenance, operation and restoration of, the Fuel Oilterminals, loading, unloading, storage****and handlingfacilities at the Bowline Station. Mirant Bowline shall maintain in effect allpermits necessary for such operation. Mirant Bowline shall pay loading, unloading, storage****andhandling expenses for Fuel Oil delivered to the Bowline Station.  Mirant Bowline and MAEM shall work togetherto coordinate in advance all vessel****deliveries tothe Fuel Oil Delivery Point with the objective of minimizing the expense ofsuch deliveries. All operations at the Fuel Oil terminal, including, withoutlimitation, Fuel Oil loading, unloading, storage and handling operations, shallbe performed in accordance with the operating procedures mutually agreed uponby Mirant Bowline and MAEM.

 

(f)                                    FuelOil Inventory Levels.  MAEM shall usecommercially reasonable efforts to maintain Fuel Oil inventory levels meetingthe Fuel Oil Specifications at the Bowline Station for the operation of theBowline Station in accordance with Good Utility Practices.

 

(g)                                 Failureto Deliver Fuel Oil to Day Tanks.  IfMAEM fails to provide Fuel Oil meeting the Fuel Oil Specifications to the DayTanks such that Bowline Unit 1 or Bowline Unit 2 is not able to operate ineconomic dispatch, MAEM shall pay Mirant Bowline’s lost opportunity costs.  Such lost opportunity costs shall becalculated, on an hourly basis, as the (i) positive difference, if any,obtained by subtracting Mirant Bowline’s marginal cost of generation (using theFuel Oil Index Price for the cost of Fuel Oil in such calculation) from theLocational Marginal Price multiplied by (ii) the quantity of energy notgenerated by Bowline Station.  The totallost opportunity costs payable to Mirant Bowline shall be the summation of thehourly calculation set forth above for each hour Bowline Station is notavailable to operate due to MAEM’s failure to deliver Fuel Oil.

 

(h)                                 FuelOil Loading, Unloading, Storage and Handling Procedures.  Mirant Bowline may maintain and provide toMAEM, from time to time, Fuel operations, safety and handling standards andprocedures to be followed by Mirant Bowline, MAEM and their contractors,agents, employees and suppliers to the Bowline Station.  MAEM shall provide such standards to theircontractors, agents and suppliers.

 

(i)                                     Metering.Mirant Bowline shall be responsible for reading the Fuel Oil supply meters atthe Bowline Station in accordance with Good Utility****Practices.  Mirant Bowline shall provide the data fromsuch daily Fuel Oil supply meter readings to MAEM on a daily basis.  Either Party shall have the right, at its ownexpense and upon reasonable notice to the other Party, to have a meter proverperform the test and, if necessary, recalibrate the Fuel Oil meters at theBowline Station.  Not less than once permonth, Mirant Bowline will manually sound the Storage Tanks and compare theresults to prior meter readings.  MirantBowline shall arrange for a third party to manually sound the Storage Tanks onat least a quarterly basis. Differences between actual tank levels and reportedmeter indications will be settled between MAEM and Mirant Bowline at the

 

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average Fuel Oil IndexPrice for the calendar month immediately preceding the manual determination oftank levels.

 

3.4                                 FuelOil Supply to Lovett Station. Although Lovett Station has the capability to operate on Fuel Oil, itcurrently operates solely on natural gas and/or coal.  If Mirant Lovett desires to recommence FuelOil deliveries to Lovett Station, MAEM and Mirant Lovett agree to negotiate ingood faith to amend this Agreement as necessary to describe Fuel Oil supply toLovett Station including, but not limited to, inventory storage, transfer andpricing.

 

**ARTICLE 4.**

**DIRECTCONTRACTS**

 

4.1                                 DirectContracts.

 

(a)                                  AgencyServices.  Notwithstanding anythingto the contrary in Sections 2.1 or 3.1 of this Agreement, Project Company mayenter into contracts to (i) sell the Products available from theGenerating Station directly to a third party rather than selling such Products toMAEM and/or (ii) purchase Fuel required by the Generating Station directlyfrom a third party rather than purchasing such Fuel from MAEM (collectively “DirectContracts”).  Project Company herebyappoints MAEM as its agent in administering any Direct Contract including, butnot limited to, Scheduling, billing, settlements with the ISO (if applicable)and other services required by Project Company pursuant to the terms of suchDirect Contract.  Project Company shallcontinue to pay MAEM the Service Fee for the agency services provided by MAEMduring the term of a Direct Contract.  Asagent, MAEM shall neither directly purchase or sell, or contract for thepurchase or sale, nor take title to or possession and control of any Productsor Fuel.  Rather, as between MAEM andProject 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)                                 ExistingDirect Contracts.  As of theAgreement Date hereof, Direct Contracts include the Massey Coal Agreement, andMirant Lovett shall have the right to continue to purchase coal pursuant tosuch Direct Contract.

 

(c)                                  Costsand Revenues.  The calculation of NetMarket Revenues shall exclude any costs or revenues associated with a DirectContract.  All such costs and revenuesshall be paid and received by Project Company. If a third party customer or other entity pays MAEM any amounts dueProject Company under a Direct Contract, MAEM shall hold such amounts in trustfor the applicable Project Company and remit such funds to Project Company onor before the twentieth (20th) day of each month, or if such day isnot a business day, 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 any Direct Contract and/or Third Party Contract, asapplicable.  Notwithstanding theforegoing, all payment obligations under any Direct Contract shall

 

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be the soleresponsibility of Project Company. In an effort to maximize Net MarketRevenues, Project Company agrees that MAEM shall have the right to purchaseProducts from third parties or the market, in lieu of the Generating Stationproducing such Products, for the purpose of meeting the supply obligations ofProject Company or MAEM under any Direct Contract or Third Party Contract (“PurchasedPower”); provided, however, any such purchase should only occur when theProject Company’s cost to generate the Products exceeds the prevailing marketprice for such Products.  Project Companyand MAEM shall notify each other promptly if it becomes aware of any disputeunder, or any proposed amendment to, a Direct Contract or Third PartyContract.  Project Company and MAEMacknowledge and agree that certain provisions of this Agreement including,without limitation, MAEM’s Scheduling and Fuel supply obligations, may not beconsistent with the provisions of a Direct Contract or a Third Party Contract(such as a tolling agreement for example). In the event of such inconsistency, the provisions of the Direct Contractor Third Party Contract shall control.

 

**ARTICLE 5.**

**ASSETBOOK; ADDITIONAL SERVICES**

 

5.1                                 AssetBook.                              MAEMwill maintain an asset management book for the New York region (the “Asset Book”)to track and measure the financial performance of all transactions with respectto the Generating Stations including, but not limited to, (i) the sale ofProducts, generated by the Generating Stations, pursuant to any Offers, ThirdParty 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 tradingactivities and (v) the purchase of transmission and/or transportationcapacity.  The Asset Book shall beseparate from any MAEM trading book or any other asset book maintained by MAEMfor other Asset Companies.  Transactionsin the Asset Book shall be allocated to individual books that are establishedfor each Project Company.  Unlessotherwise designated in writing by Project Companies, transactions in the AssetBook will be allocated proportionately to each Project Company based on theactual dispatch of the Generating Stations, as provided by Project Companies toMAEM (with the exception of sales of capacity, which shall be allocatedproportionately based on the actual capacity of the generating units).

 

5.2                                 EmissionsPlanning and Related Responsibilities. MAEM shall provide Project Company emissions planning, in consultationwith Project Company, to assist in the compliance of the Generating Station atall times and on an ongoing basis with all currently effective emissionsrequirements, permits and regulations. Upon Project Company’s request, MAEM will procure all EmissionsAllowances necessary for the operation of the Generating Station, and disposeof excess Emissions Allowances, which are not needed for the operation of theGenerating Station.  MAEM will chargeProject Companies the actual cost of acquiring the Emissions Allowances andremit the actual proceeds of any Emissions Allowances sales to Project Company,as adjusted for any gains or losses on emission hedges and trading activities.

 

5.3                                 RegulatoryReports.  MAEM will make allquarterly filings to the FERC required for Products generated by, or availablefrom, the Generating Stations.

 

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**ARTICLE 6.**

**TERM ANDTERMINATION**

 

6.1                                 Term.  This Agreement shall become effective on theAgreement Date and shall continue in effect unless terminated pursuant to Section 6.2or Section 9.3(a).

 

6.2                                 EarlyTermination Event.

 

(a)                                  Inthe event a Generating Station is no longer partially owned by an affiliate ofMAEM, this Agreement shall automatically terminate with respect to suchGenerating Station, without any further action required by any Party, as of theeffective date of the transfer of ownership of the Generating Station.

 

(b)                                 AnyParty may terminate this Agreement as it relates to such Party upon sixty (60)days written notice to the other Parties.

 

6.3                                 Obligationsupon Termination.

 

(a)                                  Uponany termination of this Agreement pursuant to Section 6.2 hereof, MAEMshall endeavor to (i) terminate any transactions entered into by MAEM inconnection with this Agreement which extend beyond such termination including,but not limited to, Third Party Contracts entered into pursuant to Section 2.2(b),(ii) assign such transactions to the new owner of the GeneratingStation(s) and/or (iii) enter into an agreement with the new owner toallow MAEM to continue to fulfill its obligations under any existingtransactions.  Any such terminationsand/or assignments shall be consummated in such a manner as to fully releaseMAEM and Project Companies from any liability or obligation thereunder as ofthe termination date and/or the assignment effective date of the applicabletransactions.  Any costs or revenuesassociated with termination payments or settlement amounts as a result ofliquidating and terminating any transactions shall be charged to or paid toProject Company as described under Section 2.2(c).

 

(b)                                 Uponany termination of this Agreement pursuant to Section 9.3(a) hereof,the Parties shall transfer or settle any outstanding transactions entered intoby MAEM in connection with this Agreement which extend beyond such terminationincluding, but not limited to, Third Party Contracts entered into pursuant to Section 2.2(b).  Any such transfer or settlement shall beconsummated in such a manner as to assign or convey to Project Companies thefull benefits and obligations of such transactions, and to fully release MAEMfrom any liability or obligation thereunder. To the extent that MAEM’s rights or obligations under any suchtransaction may not be assigned without the consent of a third party, and suchconsent has not or cannot be obtained with the commercially reasonable effortsof the Parties, this provision shall not constitute an agreement to assign thesame if an attempted assignment would constitute a breach thereof or beunlawful, 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).  The Parties further agree to take suchactions, and execute and

 

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deliver such agreements,documents, instruments and certificates, as are necessary to consummate thetransactions contemplated by this Section 6.3(b).

 

**ARTICLE 7.**

**REPRESENTATIONSAND WARRANTIES**

 

7.1                                 ProjectCompany’s Representations and Warranties. Each Project Company makes the following representations and warrantiesas a basis for its undertakings contained 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 this Agreement and the consummation of the transactionscontemplated hereby have been duly authorized by all necessary limitedliability company action and do not and will not contravene its organizationaldocuments or conflict with, result in a breach of, or entitle any party (withdue notice or lapse of time or both) to terminate, accelerate or declare adefault under, any agreement or instrument to which Project Company is a partyor by which Project Company is bound. The execution, delivery and performance by Project Company of thisAgreement will not result in any violation by Project Company of any law, rule orregulation applicable to it.  ProjectCompany is not a party to, nor subject to or bound by, any judgment, injunctionor decree of any court or other governmental entity which may restrict orinterfere with the performance of this Agreement by it.  This Agreement is Project Company’s legal,valid and binding obligation, enforceable against Project Company in accordancewith its terms, except as (i) such enforcement may be subject to bankruptcy,insolvency, reorganization, moratorium or other similar laws now or hereafterin effect relating to creditors’ rights generally, and (ii) the remedy ofspecific performance and injunctive relief may be subject to equitable defensesand to the discretion of the court before which any proceeding therefor may bebrought.

 

(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)                                  Thereis not pending or, to its knowledge, threatened against it, any legalproceedings that could materially adversely affect its ability to perform itsobligations under this

 

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Agreement.

 

(f)                                    Subjectto Section 9.2(c), no Event of Default or event which, with the giving ofnotice or lapse of time, or both, would constitute an Event of Default withrespect to Project Company has occurred and is continuing and no such event orcircumstance would occur as a result of its entering into or performing itsobligations under this Agreement or any other document relating to thisAgreement.

 

7.2                                 MAEM’sRepresentations and Warranties.  MAEMmakes the following representations and warranties as a basis for itsundertakings contained herein:

 

(a)                                  MAEMis a limited partnership duly organized and validly existing under the laws ofthe State 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)                                 MAEMhas full power and authority to enter this Agreement and perform itsobligations hereunder.  The execution,delivery and performance of this Agreement and the consummation of theTransactions contemplated hereby have been duly authorized by all necessarylimited partnership action by MAEM and do not and will not contravene itsorganizational documents or conflict with, result in a breach of, or entitleany party (with due notice or lapse of time or both) to terminate, accelerateor declare a default under, any agreement or instrument to which MAEM is aparty or by which MAEM is bound.  Theexecution, delivery and performance by MAEM of this Agreement will not resultin any violation by MAEM of any law, rule or regulation applicable to it.MAEM is not a party to, nor subject to or bound by, any judgment, injunction ordecree of any court or other governmental entity which may restrict orinterfere with the performance of this Agreement by it.  This Agreement is MAEM’s legal, valid andbinding obligation, 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 effectrelating to creditors’ rights generally and (ii) the remedy of specificperformance and injunctive relief may be subject to equitable defenses and tothe discretion of the court before which any proceeding therefor may bebrought.

 

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

 

(e)                                  Thereis not pending or, to its knowledge, threatened against it, any legalproceedings that could materially adversely affect its ability to perform itsobligations under this

 

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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 or anyother document relating to this Agreement.

 

**ARTICLE 8.**

#### **BILLING AND PAYMENT**

#### ** **

8.1                                 CostAllocation.  For services rendered byMAEM to Project Companies under this Agreement and/or any Direct Contract, eachProject Company shall pay MAEM, on a monthly basis, its share of allocatedcosts including, but not limited to, personnel costs (the “Service Fee”).  For purposes of determining Project Company’sshare of allocated costs, MAEM shall apply an industry standard methodologywhich is applied uniformly across the Asset Companies.  Each of MAEM and Project Company acknowledgesthat the monthly allocations may be adjusted from time to time.

 

8.2                                 Billingand Payment.  MAEM shall pay ProjectCompany the positive Net Market Revenues due for the prior month (or, if NetMarket Revenues for such month are negative, Project Company shall pay MAEM anamount equal to such negative balance) by wire transfer to the payment addressprovided by the recipient on or before the twentieth (20th) day ofeach month, or if such day is not a business day, the immediately followingbusiness day.  At the time of eachmonthly payment, MAEM shall render to Project Company a statement detailing theNet Market Revenues for the prior month, and shall provide Project Company withsupporting documentation for each such monthly statement, identifyingcalculations underlying such Net Market Revenues.  If the ISO later adjusts amounts payable byor paid to MAEM with respect to transactions in the Asset Book, such amountswill be credited to, or paid by, Project Companies in the month in which MAEMreceives notice of the adjustment.  Thepreceding sentence shall survive termination of this Agreement.  If a third party fails to pay MAEM any amountdue for Products sold to such party, MAEM shall only be required to pay theAsset Company the amount received by MAEM from the third party.  In other words, MAEM shall not be responsiblefor non-payment by a third party customer, and any Gross Revenues shall not beadjusted upward to account for any such non-payment.

 

“Net Market Revenues”means Gross Revenues minus Expenses. Net Market Revenues shall becalculated in accordance with GAAP.

 

**“GrossRevenues” means all revenues attributed to the Asset Book for a certainmonth including, without limitation, the actual revenues received by MAEM from (a) salesof all Products generated by, or available from, the Generating Station, (b) salesof Purchased Power, (c) excess Fuel sales, (d) sales or trades ofexcess Emissions Allowances from the Generating Station and (e) gainsassociated with physical and/or financial products (including, but not limitedto, swaps, contracts for differences and options) purchased for the Asset Bookrelated to hedges and trading activities.**

 

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“Expenses” meansall costs attributed to the Asset Book for a certain month, including (a) costsreimbursed to MAEM for actual costs in performing the services including, butnot limited to, costs for (i) purchases of Fuel, (ii) purchases ofEmissions Allowances, (iii) losses 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, (iv) broker and/or transaction fees, (v) transmissioncongestion contracts for sales from the Generating Station, (vi) CollateralCosts, (vii) transmission and/or transportation costs related to deliveryof the Products and/or Fuel, (viii) Purchased Power and (ix) otheractual costs in connection with the services described in Articles 2, 3 and 4hereof, and (b) costs reimbursed to MAEM by Mirant Bowline at the Fuel OilIndex Price for Fuel Oil consumed by Bowline Station in accordance with Section 3.4.

 

8.3                                 MonthlyStatements.  Project Company and MAEMwill cooperate to provide monthly statements in reasonable detail showing thecalculation of the Net Market Revenues, to enable Project Company to track NetMarket Revenues.  Project Company shallhave the right, upon reasonable notice, to examine and/or audit the Asset Bookfrom time to time.

 

8.4                                 Interestand Disputed Amounts.  If eitherParty fails to make any payment on or before the applicable payment due date,such overdue amounts shall accrue interest at the Interest Rate from, andincluding, the applicable payment due date to, but excluding, the date ofpayment.  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.  Overpayments or underpayments identified bythe Parties shall be returned or credited, together with interest accrued atthe Interest Rate, to their rightful owners in the first following month.

 

8.5                                 FERCRefunds.  In the event MAEM isordered by FERC to refund any payments received by MAEM from third partiesrelated to any transactions in the Asset Book, Project Company agrees to pay,or reimburse MAEM if MAEM has paid, the refund amount to FERC or a thirdparty.  The Project Company’s obligationto pay FERC or a third party, or reimburse MAEM, any refund amount shall bewithout regard to the cause or causes related thereto including, withoutlimitation, the negligence of MAEM.  Anysuch payment to FERC or a third party shall be made within the time periodordered by FERC.

 

**ARTICLE 9.**

**DEFAULTSAND REMEDIES**

 

9.1                                 Eventsof Default.  Any one or more of thefollowing shall constitute an “Event of Default” hereunder with respect to aParty:

 

(a)                                  defaultshall occur if the payment of any amounts due from such Party hereunder shallcontinue unpaid for more than ten (10) days after written notice from theother Party;

 

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(b)                                 otherthan as provided in Section 9.1(a) above, default shall occur in theperformance of any covenant or condition to be performed by such Party underthis Agreement and such default shall continue unremedied for a period ofthirty (30) days after written notice from the other Party specifying thenature of such default; 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                                 ConfirmationDate.

 

(a)                                  TheProject Companies will remain debtors-in-possession in the Chapter 11 Casesuntil the New York Debtors Effective Date (as such term is defined in thePlan).  Until the New York DebtorsEffective Date, this Agreement and the Parties’ rights and obligationshereunder shall be subject to the jurisdiction of the Bankruptcy Court.  In the event this Agreement and/or theParties’ rights and/or obligations hereunder are deemed to be inconsistent withany determination made by the Bankruptcy Court in the Chapter 11 Cases, theBankruptcy Court’s determination shall prevail.

 

(b)                                 Notwithstanding any other provisions contained inthis Agreement, the Project Companies acknowledge and agree that they will notoppose administrative expense treatment under 11 U.S.C. § 503(b)(1)(A) forany unpaid amounts owing by Project Companies under this Agreement, providedthat such unpaid amounts become due and owing prior to the New York DebtorsEffective Date.

 

(c)                                  Notwithstandingany other provision of this Agreement, until the New York Debtors EffectiveDate, the Chapter 11 Cases shall not constitute an Event of Default under thisAgreement with respect to the Project Companies; provided, however, in theevent that (a) Project Company files a motion or request to convert itsChapter 11 Case to a Chapter 7 proceeding; or (b) the Bankruptcy Courtenters an order converting either Project Company’s case from a Chapter 11proceeding to a Chapter 7 proceeding, either such event (a) or (b) shallconstitute an Event of Default under this Agreement with respect to suchProject Company.

 

(d)                                 EachParty represents, warrants and covenants that:

 
| **(i)** | **The Parties have negotiated and  entered into this post-petition Agreement in the ordinary courses of their  respective businesses, in good faith, for fair consideration and on an arm’s  length basis;** |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)    | Neither Party shall  attempt to effect any right of set-off with respect to this such  post-petition Agreement and any pre-petition obligations;                                                                  |
| (iii)   | One of the purposes of  this Agreement is to preserve, maintain and enhance its business; and                                                                                                                     |

 

 

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| (iv) | The terms and  conditions of this Agreement are fair and reasonable and reflect its exercise  of prudent business judgment consistent with its fiduciary duties as a  debtor-in-possession and are supported by fair consideration and reasonably  equivalent value in money or money’s worth. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

9.3                                 Remedies.  The Parties shall have the following remediesavailable to them hereunder:

 

(a)                                  Uponthe occurrence of an Event of Default by a Party hereunder, the non-defaultingParty shall have the right (i) to collect all amounts then or thereafterdue to it from the defaulting Party hereunder, and (ii) upon writtennotice to the other Party, to terminate this Agreement at any time during thecontinuation of such Event of Default with respect to such Party.  The terminating Party shall have all rightsand remedies available to it under applicable law, subject to the limitationsset forth in Section 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.**

**FORCEMAJEURE**

 

10.1                           ForceMajeure.  If either Party is renderedwholly or partly unable to perform its obligations under this Agreement becauseof a Force Majeure event, that Party will be excused from whatever performanceis affected by the Force Majeure event to the extent so affected, provided that(a) the non-performing Party, as soon as practical after knowing of theoccurrence of the Force Majeure event, gives the other Party written noticedescribing the particulars of the occurrence; (b) the suspension ofperformance is of no greater scope and of no longer duration than is reasonablyrequired by the Force Majeure event; (c) the non-performing Party usescommercially reasonable efforts to overcome or mitigate the effects of suchoccurrence, provided, however, that this provision shall not require ProjectCompany to deliver, or MAEM to receive, any Products at points other than theDelivery Point; and (d) when the non-performing Party is able to resumeperformance of its obligations hereunder, that Party shall give the other Partywritten notice to that effect and shall promptly resume such performance.

 

**ARTICLE 11.**

**MISCELLANEOUS PROVISIONS**

 

11.1                           Assignment;Successors and Assigns.

 

(a)                                  Noassignment or delegation by either Party (or any successor or assignee thereof)of this Agreement, in whole or in part, shall be made or become effectivewithout the prior written consent of the other Party in each case obtained,which consent may not be unreasonably withheld. Any assignments or delegations by either Party shall be in such form asto assure that

 

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such Party’s obligations under this Agreement will behonored fully and timely by any succeeding party.

 

(b)                                 NotwithstandingSection 11.1(a), this Agreement shall be assigned from MAEM to MirantEnergy Trading, LLC (“MET”) without any action required by the Parties pursuantto the terms of the Plan and the Implementation Order.  The assignment shall occur on the MAEM/METEffective Date (as such term is defined in the Plan) and thereafter, allreferences to MAEM in this Agreement shall be references to MET.  As of the MAEM/MET Effective Date, Section 7.2(a) shallbe amended to delete “limited partnership” and replace it with “limitedliability company”.

 

11.2                           Notices.  All notices, requests and othercommunications hereunder (herein collectively a “notice” or “notices”) shall bedeemed to have been duly delivered, given or made to or upon any Party heretoif in writing and delivered by hand against receipt, or by certified orregistered mail, postage pre-paid, return receipt requested, or to a courierwho guarantees next business day delivery or sent by telecopy (withconfirmation) to such Party at its address set forth below or to such otheraddress as such Party may at any time, or from time to time, direct by noticegiven in accordance with this Section 11.2.

 
| **IF TO PROJECT** |   |                                  |
|-------------------|--------|---------------------------------------|
| **COMPANIES:**    |   | Mirant Bowline, LLC                   |
|              |   | 140 Samsondale Avenue                 |
|              |   | West Haverstraw, NY  10993            |
|              |   | Attention: President                  |
|              |   |                                  |
|              |   | Mirant Lovett, LLC                    |
|              |   | 37 Elm Street                         |
|              |   | Tomkins Cove, NY 10986                |
|              |   | Attention: President                  |
|              |   |                                  |
|              |   | Mirant NY-Gen, LLC                    |
|              |   | 613 Plank Road                        |
|              |   | Forest Burgh, NY 12777                |
|              |   | Attention: President                  |
|              |   |                                  |
| **IF TO MAEM:**   |   | Mirant Americas Energy  Marketing, LP |
|              |   | 1155 Perimeter Center  West           |
|              |   | Atlanta, Georgia 30338                |
|              |   | Attention: Legal  Department          |
|              |   |                                  |
| **IF TO MET:**    |   | Mirant Energy Trading,  LLC           |
|              |   | 1155 Perimeter Center  West           |
|              |   | Atlanta, Georgia 30338                |
|              |   | Attention: Legal  Department          |

 

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The date of delivery ofany such notice, request or other communication shall be the earlier of (i) thedate of actual receipt or (ii) three (3) business days after suchnotice, request or other communication is sent by certified or registered mail,(iii) if sent by courier who guarantees next business day delivery, thebusiness day next following the day of such notice, request or othercommunication is actually delivered to the courier or (iv) the dayactually telecopied.

 

11.3                           GOVERNINGLAW.  THIS AGREEMENT SHALL BEGOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK WITHOUTGIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD OTHERWISE CAUSE THELAW OF ANY STATE OTHER THAN NEW YORK TO APPLY.

 

11.4                           ComplianceWith Laws.  At all times during theterm of this Agreement, the Parties shall comply with all laws, rules,regulations, and codes of all governmental authorities having jurisdiction overeach of their respective businesses which are now applicable, or may beapplicable hereafter, including without limitation, all special laws, policies,ordinances, or regulations now in force, 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 respectivebusiness.  Nothing herein shall be deemeda waiver of the Parties’ right to challenge the validity of any such law, rule orregulation.

 

11.5                           EntireAgreement.  This Agreement sets forththe entire agreement of the Parties with respect to the subject matter hereinand takes precedence over all prior understandings.  This Agreement supersedes and terminates allpreviously executed or unexecuted agreements between Project Companies andMAEM.

 

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

 

11.7                           Severability.  The invalidity or unenforceability of anyprovisions of this Agreement shall not affect the other provisions hereof.  If any provision of this Agreement is held tobe invalid, such provisions shall not be severed from this Agreement; instead, thescope of the rights and duties created thereby shall be reduced by the smallestextent necessary to conform such provision to the applicable law, preserving tothe greatest extent the intent of the Parties to create such rights and dutiesas set out herein.  If necessary topreserve the intent of the Parties hereto, the Parties shall negotiate in goodfaith to amend this Agreement, adopting a substitute provision for the onedeemed invalid or unenforceable that is legally binding and enforceable and whichrestores to the two Parties to the greatest extent possible the benefit oftheir respective bargains on the Agreement Date.

 

11.8                           Limitationon Damages.  NEITHER PARTY SHALL BEENTITLED TO RECOVER SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVEDAMAGES HEREUNDER.

 

11.9                           RiskManagement Policy.  The Partiesacknowledge and agree that this Agreement is subject to the Risk ManagementPolicy approved by the Parties’ Board of

 

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Directors.  In the event of a conflict between theprovisions of this Agreement and the terms of the Risk Management Policy, theterms of the Risk Management Policy shall govern and control.

 

 

[SIGNATURES APPEARON THE FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, andintending to be legally bound hereby, the Parties hereto have caused thisAgreement to be duly executed as an instrument under seal by their respectiveduly authorized officers as of the date 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 Bowline, LLC                   |
|                                  |   |
| By:                                   | /s/ J. William Holden  III |   |
| Name:                                 | J. William Holden III |
| Title:                                | Senior Vice President &  Treasurer |
|                                  |   |
| Mirant Lovett, LLC                    |
|                                  |   |
| By:                                   | /s/ J. William Holden  III |   |
| Name:                                 | J. William Holden III |
| Title:                                | Senior Vice President &  Treasurer |
|                                  |   |
| Mirant NY-Gen, 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**

**GENERATINGSTATIONS**

 

**MIRANTBOWLINE, LLC**

 
| **Unit**  | ** ** | **Location**        | ** ** | **Nameplate  Capacity** | ** ** | **Commercial  Operation Date** | ** ** |
|-----------|------------|---------------------|------------|-------------------------|------------|--------------------------------|------------|
|      |       |                |       |                    |       |                           |       |
| Bowline 1 |       | West Haverstraw, NY |       | 572                     |       | 1972                           |       |
|      |       |                |       |                    |       |                           |       |
| Bowline 2 |       | West Haverstraw, NY |       | 567                     |       | 1974                           |       |

 

**MIRANT LOVETT, LLC**

 
| **Unit** | ** ** | **Location**    | ** ** | **Nameplate  Capacity** | ** ** | **Commercial  Operation Date** | ** ** |
|----------|------------|-----------------|------------|-------------------------|------------|--------------------------------|------------|
|     |       |            |       |                    |       |                           |       |
| Lovett 3 |       | Stony Point, NY |       | 63                      |       | 1955                           |       |
|     |       |            |       |                    |       |                           |       |
| Lovett 4 |       | Stony Point, NY |       | 165                     |       | 1966                           |       |
|     |       |            |       |                    |       |                           |       |
| Lovett 5 |       | Stony Point, NY |       | 183                     |       | 1968                           |       |

 

**MIRANT NY-GEN, LLC**

 
| **Unit**            | ** ** | **Location**      | ** ** | **Nameplate  Capacity** | ** ** | **Commercial  Operation Date** | ** ** |
|---------------------|------------|-------------------|------------|-------------------------|------------|--------------------------------|------------|
|                |       |              |       |                    |       |                           |       |
| Mongaup 1-4         |       | Mongaup Falls, NY |       | 4                       |       | 1923-1926                      |       |
|                |       |              |       |                    |       |                           |       |
| Swinging Bridge 1-2 |       | Mongaup Falls, NY |       | 12                      |       | 1930-1939                      |       |
|                |       |              |       |                    |       |                           |       |
| Rio 1-2             |       | Mongaup Falls, NY |       | 9                       |       | 1927                           |       |
|                |       |              |       |                    |       |                           |       |
| Grahamsville        |       | Grahamsville, NY  |       | 18                      |       | 1956                           |       |
|                |       |              |       |                    |       |                           |       |
| Shoemaker Turbine   |       | Middletown, NY    |       | 33                      |       | 1971                           |       |
|                |       |              |       |                    |       |                           |       |
| Hillburn Turbine    |       | Ramapo, NY        |       | 33                      |       | 1971                           |       |

 

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