**Exhibit 10.11**

 

**POWERSALE, FUEL SUPPLY**

**ANDSERVICES AGREEMENT**

 

**THIS****POWER SALE, FUEL SUPPLY AND SERVICES AGREEMENT**(this“Agreement”), dated as of January 3, 2006 (the “Effective Date”), is byand between **MIRANT AMERICAS ENERGY MARKETING, LP**,a Delaware limited partnership (“MAEM”),****and**MIRANT TEXAS, LP**, a Delaware limited partnership (the “ProjectCompany”).

 

**RECITALS**

 

WHEREAS, Project Companyowns and operates a certain electric generation facility as set forth on Exhibit Ahereto (the “Generating Station”);

 

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

 

WHEREAS, in the absenceof such third party contracts, Project Company desires 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 Stationto MAEM, and MAEM desires to purchase such capacity, electricity, ancillaryservices and/or other related products on the terms and conditions set forthherein; and

 

WHEREAS, the ProjectCompany desires that MAEM perform certain services related to the managementand operation of the Generating Station, 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 Texas, LP, which own electric generatingstations in the United States.

 

“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.

 

“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.

 

“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 Station, where it connects to the Transmission Provider’s transmissionsystem; and, with respect to Products generated by, or available from, sourcesother than the Generating Station, such other point on the TransmissionProvider’s transmission system as MAEM and the 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.

 

“ERCOT” means theElectric Reliability Council of Texas, or its successor.

 

“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 one 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 

 

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Company’sability to sell the Product at a price greater than the Contract Price.  Neither Party may raise a claim of ForceMajeure based in whole or in part on curtailment by a Transmission Providerunless (i) such Party has contracted for firm transmission with atransmission provider for the Product to be delivered to or received at theDelivery Point and (ii) such curtailment is due to “force majeure” or “uncontrollableforce” or a similar term as defined under the Transmission Provider’s tariff;provided, however, that existence of the foregoing factors shall not besufficient to conclusively or presumptively prove the existence of a ForceMajeure absent a showing of other facts and circumstances which in theaggregate with such factors establish that a Force Majeure as defined in thefirst sentence hereof has occurred.

 

“Fuel” meansnatural gas.

 

“Fuel Delivery Point”means the meter at the Generating Station where MAEM shall deliver Fuel toProject Company.

 

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

 

“Good Utility Practices”mean any of the practices, methods or acts engaged in or approved by asignificant portion of the electric energy industry with respect to similarfacilities during the relevant time period which in each case, in the exerciseof reasonable judgment in light of the facts known or that should have beenknown at the time a decision was made, could have been expected to accomplishthe desired result at reasonable cost consistent with good business practices,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 the Implementing Order Regarding Transfer of Letters of Credit,Guarantees and Certain Collateral Securing Trading Obligations TransferredPursuant to the Plan, dated December 9, 2005, issued by the United StatesBankruptcy Court for the Northern District of Texas, Forth Worth Division inthe chapter 11 cases of Mirant Corporation and its affiliated debtors, styledas *In re Mirant Corporation, et al.*,Chapter 11 Case No. 03-46590 (DML) Jointly Administered.

 

“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.

 

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

 

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

 

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

 

“Plan” means theAmended and Restated Second Amended Joint Chapter 11 Plan of Reorganization forMirant Corporation and its Affiliated Debtors, dated September 30, 2005,confirmed by the United States Bankruptcy Court for the Northern District ofTexas, Forth Worth Division, on December 9, 2005, in the chapter 11 casesof Mirant Corporation and its affiliated debtors, styled as *In re Mirant Corporation, et al.*,Chapter 11 Case No. 03-46590 (DML) Jointly Administered.

 

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

 

“Project Company”has the meaning set forth in the 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, ERCOT) the quantity and type ofProducts to be delivered on any given day or days during the period of deliveryat a specified Delivery Point.

 

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

 

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

 

“TransmissionProviders” means the entity or entities transmitting Products on behalf ofProject Company or MAEM to or from the Delivery Point including, but notlimited to, ERCOT 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.

 

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**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 Station.  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 Station, MAEM shallattempt to maximize Net Market Revenues for Project Company.

 

(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 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.  Asbetween the Parties, Project Company shall be deemed to be in exclusivepossession and control (and be responsible for any damages or injury causedthereby) of the Products prior to delivery thereof at the Delivery Point, andMAEM shall be deemed to be in exclusive possession and control (and beresponsible for any damages or injury caused thereby) of the Products at andafter delivery thereof at the Delivery Point. Project Company warrants that it will deliver to MAEM all Products freeand clear of all liens, claims and encumbrances arising prior to deliverythereof at the Delivery Point.  Title toand risk of loss related to delivered Products shall transfer from ProjectCompany to MAEM at the Delivery Point. 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.

 

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 tosubmitting Offers, MAEM may resell the Products purchased from Project Companyby entering into bilateral contracts, forward sales, financial transactions(including, but not limited to, hedges, swaps, contracts for differences andoptions), tolling agreements, power purchase 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 and revenuesare actually incurred or received by MAEM, as further described in thecalculation of Net Market Revenues pursuant to Section 8.2.

 

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(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 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)                                 theERCOT 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.

 

**ARTICLE 3.**

**FUELSERVICES**

 

3.1                                 AllRequirements Fuel Supply.  With theexception of any Direct Contracts as described in Section 4.1, MAEM shallprocure and supply to Project Company, on an exclusive basis, all Fuel requiredby the Generating Station in accordance with Good Utility Practices and theterms and conditions of this Agreement. Project Company shall reimburse MAEM for such Fuel at MAEM’s actualcost.  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

 

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manage Fuel imbalances onbehalf of Project Company and all costs and revenues associated with Fuelimbalances will be attributed to the Asset Book and charged to, or paid to,Project Company as such costs and revenues are actually incurred or received byMAEM.

 

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 DeliveryPoint.  MAEM warrants that it willdeliver to Project Company all Fuel free and clear of all liens, claims andencumbrances arising prior 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 willful misconduct.

 

**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 the GeneratingStation directly to a third party rather than selling such Products to MAEMand/or (ii) purchase Fuel required by the Generating Station directly froma 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 such DirectContract.  Project Company shall continueto pay MAEM the Service Fee for the agency services provided by MAEM during theterm of a Direct Contract.  As agent,MAEM shall neither directly purchase or sell, or contract for the purchase orsale, nor take title to or possession and control of any Products or Fuel.  Rather, as between MAEM and Project Company,when MAEM is acting as agent under any Direct Contract, Project Company shallbe deemed to have title and exclusive possession and control of all Productssold to, and all Fuel purchased from, third parties, and Project Company shallbear the risk of loss associated with such Products and Fuel.

 

(b)                                 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

 

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twentieth (20th)day of each month, or if such day is not a business day, the immediatelyfollowing 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 theforegoing, all payment obligations under any Direct Contract shall 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 the others 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 DirectContract or Third Party Contract shall control.

 

**ARTICLE 5.**

**ASSETBOOK; ADDITIONAL SERVICES**

 

5.1                                 AssetBook.  MAEM will maintain an assetmanagement book for the Texas region (the “Asset Book”) to track and measurethe financial performance of all transactions with respect to the GeneratingStation including, but not limited to, (i) the sale of Products generatedby, or available from, the Generating Station 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. Unless otherwise designated in writing by theProject Company, transactions in the Asset Book will be allocatedproportionately based on the actual dispatch of the Generating Station, asprovided by the Project Company to MAEM (with the exception of sales ofcapacity, which will be allocated proportionately based on the actual capacityof the generating units).

 

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.  Upon the Project Company’s request, MAEM willprocure Emission Allowances necessary for the operation of the Generating Station,and dispose of excess Emission Allowances, which are not needed for theoperation of the Generating Station. MAEM will charge Project Company MAEM’s actual cost of acquiring theEmission Allowances and remit the actual proceeds of any Emission Allowancessales to Project Company,

 

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as adjusted for any gainsor losses on emission hedges and trading activities.

 

5.3                                 RegulatoryReports.  MAEM will make allquarterly filings to the FERC required for Products produced by the GeneratingStations.

 

**ARTICLE 6.**

**TERM ANDTERMINATION**

 

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, 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 Company from any liability or obligation thereunder as of thetermination 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 9.2(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 Company the fullbenefits and obligations of such transactions, and to fully release MAEM fromany 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 be

 

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unlawful, and theParties, to the maximum extent permitted by law and the applicable transaction,shall enter into such commercially reasonable arrangements as are necessary tofulfill the intent of this Section 6.3(b). The Parties further agree to take such actions, and execute and deliversuch agreements, documents, instruments and certificates, as are necessary toconsummate the transactions contemplated by this Section 6.3(b).

 

**ARTICLE 7.**

**REPRESENTATIONSAND WARRANTIES**

 

7.1                                 ProjectCompany’s Representations and Warranties. Project Company makes the following representations and warranties as abasis for its undertakings contained herein:

 

(a)                                  ProjectCompany is a limited partnership duly organized and validly existing under thelaws of the State of Delaware, is qualified to do business in each foreignjurisdiction in which it transacts business, and is in good standing under itscertificate of formation and the laws of the State of Delaware, has therequisite 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 thetransactions contemplated hereby have been duly authorized by all necessarylimited liability company action 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 Project Companyis a party or by which Project Company is bound.  The execution, delivery and performance byProject Company of this Agreement will not result in any violation by ProjectCompany of any law, rule or regulation applicable to it.  Project Company 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 Agreementis Project Company’s legal, valid and binding obligation, enforceable againstProject Company in accordance with its terms, except as (i) suchenforcement 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 performanceand injunctive relief may be subject to equitable defenses and to thediscretion of the court before 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 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.

 

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(e)                                  Thereis not pending or, to its knowledge, threatened against it, any legalproceedings that 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.  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 legal

 

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proceedings that couldmaterially adversely affect its ability to perform its obligations under thisAgreement.

 

(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.**

#### **BILLING AND PAYMENT**

#### ** **

8.1                                 CostAllocation.  For services rendered byMAEM to Project Company under this Agreement and/or any Direct Contract,Project Company shall pay MAEM its monthly share of allocated costs forfulfilling its responsibilities to the Project Company under this Agreementand/or any Direct Contract including, but not limited to, personnel costs (the “ServiceFee”).  For purposes of determiningProject Company’s share of allocated costs, MAEM shall apply an industrystandard methodology which is applied uniformly across the AssetCompanies.  Each of MAEM and ProjectCompany acknowledges that the monthly allocations may be adjusted from time totime.

 

8.2                                 Billingand Payment. MAEM shall pay Project Company the positive Net MarketRevenues due for the prior month (or, if Net Market Revenues for such month arenegative, Project Company shall pay MAEM an amount equal to such negativebalance) by wire transfer to the payment address provided by the recipient onor before the twentieth (20th) day of each month, or if such day isnot a business day, the immediately following business day.  At the time of each monthly payment, MAEMshall render to Project Company a statement detailing the Net Market Revenuesfor the prior month, and shall provide Project Company with supportingdocumentation for each such monthly statement, identifying calculationsunderlying such Net Market Revenues. If ERCOT 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 Company in the month in which MAEMreceives notice of the adjustment.  Thepreceding sentence shall survive termination of this Agreement. If a thirdparty fails to pay MAEM any amount due for Products sold to such party, MAEMshall only be required to pay the Asset Company the amount received by MAEMfrom the third party.  In other words,MAEM shall not be responsible for non-payment by a third party customer, andany Gross Revenues shall not be adjusted upward to account for any suchnon-payment.

 

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

 

** **“Gross Revenues” means all revenuesattributed to the Asset Book for a certain month including, without limitation,the actual revenues received by MAEM from (a) sales of all Productsgenerated by, or available from, the Generating Station, (b) sales ofPurchased Power, (c) excess Fuel sales, (d) sales or trades of excessEmissions Allowances from the Generating Station and (e) gains associatedwith physical and/or financial products

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**(including,but not limited to, swaps, contracts for differences and options) purchased forthe Asset Book related to hedges and trading activities.**

** **

“Expenses” meansall costs attributed to the Asset Book for a certain month, including costsreimbursed to MAEM for actual costs in performing the services including, butnot limited to, costs for (a) purchases of Fuel, (b) purchases ofEmissions Allowances, (c) losses associated with physical and/or financialproducts (including, but not limited to, swaps, contracts for differences andoptions) purchased for the Asset Book related to hedges and trading activities,(d) broker and/or transaction fees, (e) transmission congestioncontracts for sales from the Generating Station, (f) Collateral Costs, (g) transmissionand/or transportation costs related to delivery of the Products and/or Fuel, (h) PurchasedPower and (i) other actual costs in connection with the services describedin Articles 2, 3 and 4 hereof.

 

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 in the payment of any amounts due from such Party hereunder whichshall continue 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                                 Remedies.  The Parties shall have the following remediesavailable to them hereunder:

 

(a)                                  Uponthe occurrence of an Event of Default by either Party hereunder, thenon-defaulting Party shall have the right (i) to collect all amounts thenor thereafter due to it from the defaulting Party hereunder, and (ii) uponwritten notice to the other Party, to terminate this Agreement at any timeduring the continuation of such Event of Default.  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.

 

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**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 such Party’s obligations under this Agreement will be honoredfully 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** |   |                                  |
|-------------------|--------|---------------------------------------|
| **COMPANY:**      |   | Mirant Texas, LP                      |
|              |   | 1155 Perimeter Center  West           |
|              |   | Atlanta, Georgia 30338                |
|              |   | 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          |

 

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

 

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business day delivery,the business 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 supersedesand terminates all previously executed agreements between the Project Companyand MAEM.

 

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,the scope of the rights and duties created thereby shall be reduced by thesmallest extent necessary to conform such provision to the applicable law,preserving to the greatest extent the intent of the Parties to create suchrights and duties as set out herein.  Ifnecessary to preserve the intent of the Parties hereto, the Parties shallnegotiate in good faith to amend this Agreement, adopting a substitute provisionfor the one deemed invalid or unenforceable that is legally binding andenforceable and which restores to the two Parties to the greatest extentpossible the benefit of their respective bargains on the Effective 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 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.

 

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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 Texas, LP                      |
|                                  |   |
| By:                                   | Mirant Texas  Management, LLC |
| Its:                                  | General Partner |
|                                  |   |
| 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**

**GENERATINGSTATION**

 
| **Unit** | ** ** | **Location**         | ** ** | **Nameplate  Capacity**      | ** ** | **Commercial  Operation  Date** | ** ** |
|----------|------------|----------------------|------------|------------------------------|------------|---------------------------------|------------|
|     |       |                 |       |                         |       |                            |       |
| Bosque 1 |       | Bosque County, Texas |       |       MW |       | 2000                            |       |
|     |       |                 |       |                         |       |                            |       |
| Bosque 2 |       | Bosque County, Texas |       |       MW |       | 2000                            |       |
|     |       |                 |       |                         |       |                            |       |
| Bosque 3 |       | Bosque County, Texas |       |       MW |       | 2001                            |       |
|     |       |                 |       |                         |       |                            |       |
| Bosque 4 |       | Bosque County, Texas |       | 80 MW                        |       | 2001                            |       |

 

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