Exhibit
10.20


 


ADMINISTRATIVE
SERVICES AGREEMENT


 


MIRANT MID-ATLANTIC, LLC


 


THIS ADMINISTRATIVE
SERVICES AGREEMENT (this
“Agreement”), dated January 3, 2006 (the “Effective Date”), is made
and entered into by and between Mirant Services, LLC, a Delaware limited
liability company (the “Service Provider”), and Mirant Mid-Atlantic, LLC, a Delaware limited liability company (the “Service
Recipient”).  Service Provider and
Service Recipient sometimes are referred to herein individually as a “Party”
and collectively as the “Parties”.


 


W I T N E S S E T H:


 


WHEREAS, Service Provider
provides such services, personnel and other resources described herein to its
affiliates; and


 


WHEREAS, Service
Recipient is an affiliate of Service Provider and desires to procure certain
administrative, accounting and other similar services from Service Provider,
and Service Provider is willing to render such services to Service Recipient in
accordance with and subject to the terms and conditions of this Agreement.


 


NOW, THEREFORE, in consideration
of the premises and of the mutual agreements herein, the Parties hereto hereby
agree as follows:


 


ARTICLE I


 


TERMS AND
CONDITIONS OF SERVICES


 


SECTION 1.01.  Provision of Services.  Subject to the limitations set forth in
Section 1.10 hereof, Service Provider hereby agrees to provide to Service
Recipient the following services if and to the extent applicable to Service
Recipient’s business (the “Services):


 


(a)                                  Executive
management services and advice;


 


(b)                                 Operations,
maintenance, engineering, and construction services relating to Service
Recipient’s power generating facilities (“Power Facilities”), and/or power
transmission or distribution assets (if any) (collectively with Power
Facilities, “Energy Assets”);


 


(c)                                  Environmental,
health and safety services and advice in connection with Service Recipient’s
Energy Assets;


 


(d)                                 Contract
administration, risk management, credit, strategic planning, investment
evaluation and, at Service Recipient’s direction, trading, marketing, and
scheduling, services and advice in connection with Service Recipient’s
business, including providing Service Recipient with advice and recommendations
regarding Service Recipient’s purchases of fuel for and sales of electricity
and related products from its Energy Assets;


 


(e)                                  Licensing
services, which may include holding certain licenses for and on behalf of
Service Recipient, including, without limitation, licenses for radio equipment
issued by the Federal Communications Commission;


 


(f)                                    Bookkeeping,
accounting and auditing services and advice, including the preparation and
analyses of financial statements and operating reports and the establishment of
accounting systems and procedures;


 


(g)                                 Finance
and treasury services and advice, including the preparation of short and long
range financial plans and budgets, the issuance of securities, the negotiation
and structuring of financing arrangements, and the banking and investment of
surplus funds;


 


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(h)                                 Tax
advice and assistance, including the preparation of federal, state and local
income and other tax returns and the preparation of protests, claims and briefs
and other matters in connection with any applicable taxes, governmental fees or
assessments;


 


(i)                                     Insurance,
bonding and risk management advice and assistance, including negotiating
contracts with insurers, trustees and actuaries and placing insurance policies;


 


(j)                                     Legal
services and advice;


 


(k)                                  Procurement
services and advice;


 


(l)                                     Information
systems services, materials and advice;


 


(m)                               Use
of office space and resources;


 


(n)                                 Human
resources services and advice;


 


(o)                                 Services
relating to communications and public relations;


 


(p)                                 Investor
relations services; and


 


(q)                                 Services
and advice regarding government and regulatory affairs.


 


SECTION 1.02.  Invoicing and Compensation.


 


(a)                                  As
full and complete compensation for the Services rendered pursuant to this
Agreement, Service Recipient shall pay to Service Provider, and Service
Provider shall accept, a fee (the “Fee”) equal to an arm’s length cost
to perform the Services, which shall be calculated based on an allocation
methodology to be agreed upon from time to time by the parties, such agreement
not to be unreasonably withheld by either of the Parties.  In addition, Service Recipient shall
reimburse Service Provider for all Incidental Expenses and Third Party
Expenses.  “Incidental Expenses”
mean all reasonable incidental expenses, including expenses for travel
(business class air travel), meals, lodging, required business entertainment,
telephone calls, shipping and similar items, incurred by Service Provider in
connection with its performance of the Services.  “Third Party Expenses” mean all
amounts billed to Service Provider by third parties for services, including
professional services, rendered to or on behalf of Service Recipient in
connection with the performance of the Services.


 


(b)                                 Unless
otherwise agreed by the parties, Service Provider shall submit monthly invoices
to Service Recipient setting forth the Fee, Incidental Expenses and Third Party
Expenses associated with a particular month on or before the fifteenth (15th)
day of the succeeding month.  Service
Recipient shall pay each such invoice by the end of the month in which the
invoice is received.  As a condition of
Service Recipient’s obligation to make payments with respect to each invoice,
each invoice shall set forth a reasonably detailed description of the nature of
the Services, Incidental Expenses and Third Party Expenses.


 


SECTION 1.03.  Cooperation and Access to Properties and
Records.  Service Recipient shall
cooperate with Service Provider and the members, advisors, agents, affiliates, officers, directors, employees or representatives,
including subcontractors
(the “Representatives”) of Service Provider as and when
reasonably requested in their performance and fulfillment of the Services.  Service Provider and its Representatives
shall have access to any and all real and personal property of Service
Recipient, and to any and all books and records as Service Provider or any of
its Representatives
determines necessary, advisable or appropriate for or in connection with
the provision of any or all of the Services.


 


SECTION 1.04.  Standard of Conduct.  Service Provider will use its reasonable best
efforts to perform or cause its Representatives  to perform the Services in accordance
with Good Business Practices.  “Good
Business Practices” means the practices, methods and acts, as in effect
from time to time, that are commonly used in the


 


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independent power industry to perform or fulfill the activities
comprising the Services, or any practices, methods or acts, which in the
exercise of reasonable judgment in light of the facts known at the time, that
could have been expected to accomplish the desired result at a reasonable cost
consistent with good business practices, reliability, safety and expedition, including maintaining
the confidentiality of non-public information provided by Service Recipient or
created by Service Provider in the context of providing the Services;
provided, however, that Good Business Practices is not intended to be
limited to optimum practices, methods or acts to the exclusion of all others,
but rather to be a range of possible practices, methods or acts taken or
engaged in by entities in the independent power industry.  Whether any particular practice, method or
act of Service Provider complies with Good Business Practices is to be judged
in light of the facts known at the time such particular practice, method or act
was performed or taken.


 


SECTION 1.05.  Limitations on Liability.


 


(a)                                  Service
Provider (or its Representatives)
shall have no liability to Service Recipient for any loss, damage or expense
suffered by Service Recipient arising out of or resulting from any act or
omission of Service Provider (or
its Representatives),  provided that such act or
omission conformed to the standard of conduct set forth in Section 1.04 hereof.


 


(b)                                 Notwithstanding
any other provision of this Agreement, Service Provider’s total liability to
Service Recipient and all third parties for all acts and omissions of Service Provider (or its
Representatives) in any calendar year, including liability
arising out of contract, tort (including negligence, gross negligence and
intentional misconduct), strict liability or any other cause or form of action
whatsoever, shall not exceed the total compensation paid to Service Recipient
during the previous twelve months under any provision of this Agreement for the
particular service at issue.


 


(c)                                  Pursuant
to Sections 1.05(a), (b) and (d), each party (the “Indemnifying Party”)
hereby indemnifies and holds the other Party, and such other Party’s Representatives, harmless
from and against any and all claims against such other Party for personal
injury, death or property damage which may arise due to any negligent or
willful acts or omissions of the Indemnifying Party.


 


(d)                                 Notwithstanding
any other provision of this Agreement, neither Party shall be liable to the
other Party for any lost profits, or indirect, incidental or consequential
damages under, arising out of, due to or in connection with this Agreement.


 


SECTION 1.06. Decisions.  Service Recipient reserves the right to make
all decisions with regard to any matter upon which Service Provider has
rendered its advice and consultation, and Service Provider shall not be liable
for any such advice accepted by Service Recipient pursuant to the provisions of
this Agreement.  


 


SECTION 1.07. Authority.  In its capacity as an advisor under this
Agreement, (i) Service Provider shall have authority only to act as a
consultant and advisor to Service Recipient and (ii) Service Provider shall
have no authority to enter into any agreement or to make any representation,
commitment or warranty binding upon Service Recipient or to obtain or incur any
right, obligation or liability on behalf of Service Recipient.  Nothing contained in this Section 1.07 shall
be interpreted as restricting, modifying or waiving the rights, privileges or
obligations of Service Provider or any of its affiliates as a Representative of
Service Recipient.  


 


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SECTION 1.08.  Independent Contractor.


 


(a)                                  Service
Provider, in the performance of this Agreement, will be acting in its own
separate capacity and will not, nor will it hold itself out to be, a partner,
joint venturer, associate or agent of Service Recipient. Service Provider does
not have the authority to bind Service Recipient and no joint venture or
partnership is intended or created by this Agreement.  In performing its duties under this
Agreement, Service Provider shall provide and complete the Services required
according to its own means and methods of work, which shall be in the exclusive
charge and control of Service Provider and not subject to the control or
supervision of Service Recipient.


 


(b)                                 Service
Provider shall be solely responsible for its and its Representatives’
acts and omissions with respect to the performance of the Services.  Neither Party shall maintain, hold out,
represent, state or imply to any other individual or entity that an
employer/employee relationship exists between it and the other Party or such
other Party’s Representatives.


 


(c)                                  Neither
Service Provider nor its employees shall be eligible to participate in any
employee benefit plan sponsored by Service Recipient, including any retirement
plan, insurance program, disability plan, medical benefits plan or any other
fringe benefit program sponsored and maintained by Service Recipient for its
employees.


 


(d)                                 Service
Provider shall be solely responsible for all taxes imposed on Service Provider
as a result of the transactions contemplated by this Agreement.


 


SECTION 1.09.  Subcontractors.  Service Provider may in its sole discretion
subcontract with other persons or entities, to perform any or all of the
Services on such terms and conditions as Service Provider determines to be
necessary, advisable or appropriate under the circumstances of the subcontract.


 


SECTION 1.10. Power
Facilities; Wholesale Power Sales. Notwithstanding anything to the contrary
in this Agreement, to the extent that Service Recipient owns or operates any
Power Facilities and/or engages in wholesale sales from Power Facilities (1)
this Agreement does not confer upon the Service Provider ultimate
decision-making authority or control over the Power Facilities owned and
operated by the Service Recipient; (2) this Agreement does not provide the
Service Provider with the authority to engage in (or refrain from engaging in)
wholesale sales from the Service Recipient’s generating facilities (“Wholesale
Power Sales”), except subject to the direction and oversight of the Service
Recipient; and (3) the Service Recipient retains ultimate authority and control
over Wholesale Power Sales and the sale of related products from the Service
Recipient’s Power Facilities, the dispatch of the facilities, and the ability
of the Power Facilities to produce power. 
To the extent that employees of the Service Provider have any
responsibility for day-to-day operation of the Service Recipient’s Power
Facilities (if any), such employees (1) are acting on behalf of their employer
in its sole capacity as service provider to the Service Recipient; and (2)
remain subject to the terms of this Agreement including the limitations as
described in the preceding sentence.


 


SECTION. 1.11.  Term and Termination.


 


(a)                                  Unless
sooner terminated in accordance with the provisions of this Agreement, the term
of this Agreement shall commence as of the Effective Date and shall continue
until Service Recipient’s next fiscal year end (the “Initial Term”).  At the end of the Initial Term and each
subsequent Renewal Term (hereinafter defined), as the case may be, the term of
this Agreement shall be automatically renewed for a period of one (1) year
(each a “Renewal Term”) unless either Party delivers a written
termination notice to the other Party at least sixty (60) days prior to the end
of the Initial Term or the then current Renewal Term, as the case may be.


 


(b)                                 After sixty (60) days
prior written notice, Service Recipient may immediately terminate this
Agreement if Service Provider has failed to fulfill its obligations under
Section 1.01 hereof and failed to cure any such failure during such notice
period.  After sixty (60) days prior
written notice, Service Provider may immediately terminate this Agreement if
Service Recipient has failed to fulfill its obligations under Section 1.02
hereof and failed to cure any such failure during such notice period.


 


(c)                                  Either party may terminate
this Agreement for any reason whatsoever upon thirty (30) calendar days prior
written notice to the other party.


 


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(d)                                 Upon termination of this
agreement for any reason, Service Provider shall return to Service Recipient
all real and personal property of Service Recipient, all books and records
provided to Service Provider and all information and reports created by Service
Provider in connection with the provision of any or all of the Services.


 


ARTICLE II


 


MISCELLANEOUS


 


SECTION 2.01.  Governing Law.  This Agreement and the rights of the Parties
hereunder shall be governed by and interpreted in accordance with the law of
the State of Delaware (without giving
effect to principles of conflicts of laws which would lead to the application
of the laws of another jurisdiction).


 


SECTION 2.02.  Successors and Assignability.  Except as otherwise provided for in Section 1.09,
neither Service Provider nor Service Recipient may assign any of its rights or
delegate any of its duties under this Agreement, in whole or in part, without
the prior written consent of the other, which consent shall not be unreasonably
withheld.  This Agreement shall be
binding upon each of the Parties and their respective successors and permitted
assigns.


 


SECTION 2.03.  Severability.  If any provision of this Agreement shall be
determined by any court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Agreement, other than that portion
determined to be invalid or unenforceable, shall not be affected thereby, and
each valid provision hereof shall be enforced to the fullest extent permitted
by law.


 


SECTION 2.04.  Modifications.  No change, amendment or modification of this
Agreement shall be valid or binding upon the Parties unless such change,
amendment or modification is in writing and duly executed by both Parties.


 


SECTION 2.05.  Waivers.  No provision of this Agreement shall be
deemed waived and no breach shall be deemed excused or consented to unless such
waiver or consent is in writing and signed by the Party claimed to have waived
or consented.  No consent by either Party
to, or waiver of, a breach by the other, whether express or implied, shall
constitute a consent to, waiver of, or excuse for any different or subsequent
breach.


 


SECTION 2.06.  Entire Agreement.  This Agreement constitutes the Parties’
entire agreement as to the subject matter hereof and supersedes any and all
other prior understandings, correspondence and agreements, oral or written,
between them.


 


SECTION 2.07.  Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original hereof but all of which
together shall constitute one and the same instrument.  Delivery of execution pages hereof by facsimile
shall constitute valid delivery of this Agreement.


 


[SIGNATURES APPEAR
ON THE FOLLOWING PAGE]


 


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IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first above written.


 


	
   

  	
  Mirant Services, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elizabeth B.
  Chandler

  	
   

  
	
   

  	
  Name: Elizabeth B.
  Chandler

  
	
   

  	
  Title: Vice President
  and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Mirant
  Mid-Atlantic, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven B. Nickerson

  	
   

  
	
   

  	
  Name: Steven B. Nickerson

  
	
   

  	
  Title: Vice President

  



 


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