Exhibit 10.10


 


POWER
SALE, FUEL SUPPLY 


AND
SERVICES AGREEMENT


 


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


 


RECITALS


 


WHEREAS, Project Company owns and operates a certain
electric generating facility as set forth on Exhibit A hereto (the “Generating
Station”);


 


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


 


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


 


WHEREAS, Project Company desires that MAEM perform
certain services related to the management and operation of the Generating
Station, and MAEM desires to perform such services.


 


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


 


ARTICLE 1.


DEFINITIONS


 


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


 


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


 


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


 

















 


“Asset Companies” means any Affiliates of MAEM
either directly or indirectly owned by Mirant Corporation, other than Mirant
Potomac River, LLC, which own electric generating facilities in the United
States.


 


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


 


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


 


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


 


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


 


“Emission Allowances” means authorizations under
state or federal (as applicable) air quality regulations 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 the meaning set forth in Section 8.2.


 


“Facility Lease Event of Default” shall have
the meaning ascribed to such term in the Participation Agreements dated as of December 18,
2000 among Mirant Mid-Atlantic, LLC and the owners of the leased assets at the
Dickerson and Morgantown generating stations, Wilmington Trust Company and
State Street Bank and Trust Company of Connecticut, National Association.


 


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


 


“Force Majeure” means an event or circumstance which prevents one Party from performing its
obligations, which event or circumstance was not anticipated as of the date the
transaction was agreed to, which is not within the reasonable control of, or
the result of the


 


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negligence
of, the claiming Party, and which, by the exercise of due diligence, the
claiming Party is unable to overcome or avoid or cause to be avoided.  Force Majeure shall not be based on (i) the
loss of MAEM’s markets; (ii) MAEM’s inability economically to use or
resell the Product purchased hereunder; (iii) the loss or failure of
Project Company’s supply; or (iv) Project Company’s ability to sell the
Product at a price greater than the purchase price set forth in this
Agreement.  Neither Party may raise a
claim of Force Majeure based in whole or in part on curtailment by a
Transmission Provider unless (i) such Party has contracted for firm
transmission with a transmission provider for the Product to be delivered to or
received at the Delivery Point and (ii) such curtailment is due to “force
majeure” or “uncontrollable force” or a similar term as defined under the
Transmission Provider’s tariff; provided, however, that existence of the
foregoing factors shall not be sufficient to conclusively or presumptively
prove the existence of a Force Majeure absent a showing of other facts and
circumstances which in the aggregate with such factors establish that a Force
Majeure as defined in the first sentence hereof has occurred.


 


“Fuel” means coal.


 


“Fuel Delivery Point” means the physical
location at the Generating Station where MAEM shall deliver coal to Project
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 a significant portion of
the electric energy industry with respect to similar facilities during the
relevant time period which in each case, in the exercise of reasonable judgment
in light of the facts known or that should have been known at the time a
decision was made, could have been expected to accomplish the desired result at
reasonable cost consistent with good business practices, reliability, safety,
law, regulation, environmental protection and expedition.  Good Utility Practices are not intended to be
limited to the optimum practices, methods or acts to the exclusion of all
others, but rather to delineate the acceptable practices, methods or acts
generally accepted in such industry.


 


“Gross Revenues” has the meaning provided in Section 8.2.


 


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


 


“ISO” means PJM Interconnection, LLC, or its
successor.


 


“ISO FERC Tariff” means the Open Access
Transmission and Energy Markets Tariff for the Midwest Independent Transmission
System Operator, Inc., as amended from time to time, as on file with and
approved by the FERC.


 


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


 


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


 


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


 


“Non-MIRMA Asset Book” has the meaning set
forth in Section 5.1.


 


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


 


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


 


“Products” means electric capacity, energy,
ancillary services and/or any other related products which are or may become
commercially recognized in the ISO markets during the term of this Agreement.


 


“Project Company” 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 designated representatives
(including, but not limited to, the ISO or any Transmission Provider) the
quantity and type of Products to be delivered on any given day or days during the
period of delivery at a specified Delivery Point.


 


“Service Fee” has the meaning set forth in Section 8.1.


 


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


 


“Transmission Providers” means the entity or
entities transmitting Products on behalf of Project Company or MAEM to or from
the Delivery Point including, but not limited to, the ISO or a regional
transmission organization.


 


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


 


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ARTICLE 2.


PRODUCT
SALES


 


2.1                                 Intercompany
Product Sales.


 


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


 


(b)                                 Transmission
and Scheduling.  Project Company
shall be responsible for delivery of Products to the Delivery Point.  MAEM shall arrange and be responsible for
transmission service at and from the Delivery Point.  MAEM shall serve as Scheduling agent on
behalf of Project Company to Schedule and deliver Products with respect to
all transaction involving the Generating Station.


 


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


 


2.2                                 Resale
of Products by MAEM.


 


(a)                                  Offers.  MAEM may re-sell the Products purchased from
Project Company by submitting offers to sell the Products in the day-ahead
and/or real-time markets administered by the ISO (“Offers”).


 


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


 


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(c)                                  Costs
and Revenues.  All costs and revenues
associated with Offers and Third Party Contracts will be charged, or paid, to
Project Company as such costs and revenues are actually incurred or received by
MAEM, as further described in the calculation 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)                                     the
operating parameters and limitations of the Generating Station, as provided by
Project Company to MAEM;


 


(ii)                                  the
limitations imposed by any transmission service reservations for the purpose of
transmitting Power from the Generating Station;


 


(iii)                               Project
Company’s scheduled maintenance plans, as agreed to between the Parties;


 


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


 


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


 


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


 


(vii)                           Fuel
availability;


 


(viii)                        Good
Utility Practices;


 


(ix)                                any
environmental limitations applicable to the Generating Station; and


 


(x)                                   operating
protocols agreed to from time to time by the Parties.


 


ARTICLE 3.


FUEL
SERVICES


 


3.1                                 All
Requirements Fuel Supply.  With the
exception of any Direct Contracts as described in Section 4.1, MAEM shall
procure and supply to Project Company, on an exclusive basis, all Fuel required
by the Generating Station in accordance with Good Utility Practices and the
terms and conditions of this Agreement. 
Project Company shall reimburse MAEM for such Fuel at MAEM’s actual
cost.  MAEM has entered into or will
enter into Fuel hedges and trading activities (including, but not limited to,
physical and financial hedges, swaps and options) in connection with MAEM’s
Fuel supply obligations pursuant to this Section 3.1.  The costs and revenues associated with such
Fuel hedging and trading activities will be attributed to the Asset


 


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Book and charged to, or
paid to, Project Company as such costs and revenues are actually incurred or
received by MAEM, as further described in the calculation of Net Market
Revenues pursuant to Section 8.2.


 


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3.2                                 Transportation
and Scheduling.  MAEM shall schedule or
arrange for scheduling services with its Transportation Providers to deliver
Fuel to the Fuel Delivery Point.  MAEM
shall manage Fuel imbalances on behalf of Project Company and all costs and
revenues associated with Fuel imbalances 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 by MAEM.


 


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


 


ARTICLE 4.


DIRECT
CONTRACTS


 


4.1                                 Direct
Contracts.


 


(a)                                  Agency
Services.  Notwithstanding anything
to the contrary in Sections 2.1 or 3.1 of this Agreement, Project Company may
enter into contracts to (i) sell the Products available from the
Generating Station directly to a third party rather than selling such Products
to MAEM and/or (ii) purchase Fuel required by the Generating Station
directly from a third party rather than purchasing such Fuel from MAEM
(collectively “Direct Contracts”). 
Project Company hereby appoints MAEM as its agent in administering any
Direct Contract including, but not limited to, Scheduling, billing, settlements
with the ISO (if applicable) and other services required by Project Company
pursuant to the terms of such Direct Contract. 
Project Company shall continue to pay MAEM the Service Fee for the
agency services provided by MAEM during the term of a Direct Contract.  As agent, MAEM shall neither directly
purchase or sell, or contract for the purchase or sale, 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 shall be deemed to have title
and exclusive possession and control of all Products sold to, and all Fuel
purchased from, third parties, and Project Company shall bear the risk of loss
associated with such Products and Fuel.


 


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


 


4.2                                 Cooperation.
The Parties shall cooperate to fulfill the obligations of Project Company
and/or MAEM as set forth in the Direct Contract and/or Third Party Contract, as
applicable.  Notwithstanding the
foregoing, all payment obligations under any Direct Contract shall be the sole
responsibility of Project Company. In an effort to maximize Net Market
Revenues, Project Company agrees that MAEM shall have the right to purchase
Products from third parties or the market, in lieu of the Generating Station
producing such Products, for the purpose of meeting the supply obligations of Project
Company or MAEM under any Direct Contract or Third Party Contract (“Purchased
Power”); provided, however, any such purchase should only occur when the
Project Company’s cost to generate the Products exceeds the prevailing market
price for such Products.  Project Company
and MAEM shall notify the others promptly if it becomes aware of any dispute
under, or any proposed amendment to, a Direct Contract or Third Party
Contract.  Project Company and MAEM
acknowledge and agree that certain provisions of this Agreement including,
without limitation, MAEM’s scheduling and fuel supply obligations, may not be
consistent 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
Contract or Third Party Contract shall control.


 


ARTICLE 5.


ASSET
BOOK; ADDITIONAL SERVICES


 


5.1                                 Asset
Book.  MAEM will maintain an asset
management book for Project Company and Mirant Peaker, LLC (the “Non-MIRMA
Asset Book”) to track and measure the financial performance of all hedges and
other transactions entered into with respect to the Generating Station, the
generating station owned by Mirant Peaker, LLC, and, unless otherwise agreed by
the Parties, transactions entered into related to the Makewhole Reimbursement
Agreement dated September 1, 2001 between Mirant Americas, Inc. and
MAEM.  The Non-MIRMA Asset Book shall be
separate from any MAEM trading book or any other asset book maintained by MAEM
for power resources managed by MAEM. 
Unless otherwise designated in writing by Project Company and Mirant
Peaker, LLC, transactions in the Non-MIRMA Asset Book will be allocated solely
to Mirant Americas, Inc.


 


5.2                                 Emissions
Planning and Related Responsibilities. 
MAEM shall provide Project Company emissions planning, in consultation
with Project Company, to assist in the compliance of the Generating Station at
all times and on an ongoing basis with all currently effective emissions
requirements, permits and regulations. 
Upon Project Company’s request, MAEM will procure Emission Allowances
necessary for the operation of the Generating Station, and dispose of excess
Emission Allowances, which are not needed for the operation of the Generating


 


9

















 


Station.  MAEM will charge Project Company MAEM’s
actual cost of acquiring the Emission Allowances and remit the actual proceeds
of any Emission Allowances sales to Project Company, as adjusted for any gains
or losses on emission hedges and trading activities.


 


5.3                                 Regulatory
Reports.  MAEM will make all
quarterly filings to the FERC required for Products produced by the Generating
Stations.


 


ARTICLE 6.


TERM AND
TERMINATION


 


6.1                                 Term.  The initial term of this Agreement shall
commence on the Agreement Date and shall continue in effect unless terminated
pursuant to Section 6.2 or Section 9.2(a).


 


6.2                                 Early
Termination Event.


 


(a)                                  In
the event the Generating Station is no longer owned or leased by an affiliate
of MAEM, this Agreement shall automatically terminate, without penalty and
without any further action required by either Party, as of the effective date
of the transfer of ownership or termination of the lease of the Generating
Station.


 


(b)                                 In
the event lenders or lessors exercise remedies following a Facility Lease Event
of Default, Project Company may terminate this Agreement, without penalty, upon
written notice to MAEM.


 


(c)                                  Either
Party may terminate this Agreement upon sixty (60) days written notice to the
other Party.


 


6.3                                 Obligations
upon Termination.


 


(a)                                  Upon
any termination of this Agreement pursuant to Section 6.2 hereof, MAEM
shall endeavor to (i) terminate any transactions entered into by MAEM in
connection 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 Generating
Station(s) and/or (iii) enter into an agreement with the new owner to
allow MAEM to continue to fulfill its obligations under any existing
transactions.  Any such terminations
and/or assignments shall be consummated in such a manner as to fully release
MAEM and Project Company from any liability or obligation thereunder as of the
termination date and/or the assignment effective date of the applicable
transactions.  Any costs or revenues
associated with termination payments or settlement amounts as a result of
liquidating and terminating any transactions shall be charged to or paid to
Project Company as described under Section 2.2(c).


 


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(b)                                 Upon
any termination of this Agreement pursuant to Section 9.2(a) hereof,
the Parties shall transfer or settle any outstanding transactions entered into
by MAEM in connection with this Agreement which extend beyond such termination
including, but not limited to, Third Party Contracts entered into pursuant to Section 2.2(b).  Any such transfer or settlement shall be
consummated in such a manner as to assign or convey to Project Company the full
benefits and obligations of such transactions, and to fully release MAEM from
any liability or obligation thereunder. 
To the extent that MAEM’s rights or obligations under any such
transaction may not be assigned without the consent of a third party, and such
consent has not or cannot be obtained with the commercially reasonable efforts
of the Parties, this provision shall not constitute an agreement to assign the
same if an attempted assignment would constitute a breach thereof or be unlawful,
and the Parties, to the maximum extent permitted by law and the applicable
transaction, shall enter into such commercially reasonable arrangements as are
necessary to fulfill the intent of this Section 6.3(b).  The Parties further agree to take such actions,
and execute and deliver such agreements, documents, instruments and
certificates, as are necessary to consummate the transactions contemplated by
this Section 6.3(b).


 


ARTICLE 7.


REPRESENTATIONS
AND WARRANTIES


 


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


 


(a)                                  Project
Company is a limited liability company duly organized and validly existing
under the laws of the State of Delaware, is qualified to do business in each
foreign jurisdiction in which it transacts business, and is in good standing
under its certificate of formation and the laws of the State of Delaware, has
the requisite power and authority to own its properties, and to carry on its
business as now being conducted.


 


(b)                                 Project
Company has full power and authority to enter this Agreement and perform its
obligations hereunder.  The execution,
delivery and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary limited
liability company action and do not and will not contravene its organizational
documents or conflict with, result in a breach of, or entitle any party (with
due notice or lapse of time or both) to terminate, accelerate or declare a
default under, any agreement or instrument to which Project Company is a party
or by which Project Company is bound. 
The execution, delivery and performance by Project Company of this
Agreement will not result in any violation by Project Company of any law, rule or
regulation applicable to it.  Project
Company is not a party to, nor subject to or bound by, any judgment, injunction
or decree of any court or other governmental entity which may restrict or
interfere with the performance of this Agreement by it.  This Agreement is Project Company’s legal,
valid and binding obligation, enforceable against Project Company in accordance
with its terms, except as (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors’ rights generally, and (ii) the remedy of
specific performance and injunctive relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding therefor may be
brought.


 


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(c)                                  No
consent, waiver, order, approval, authorization, permit or order of, or
registration, qualification or filing with, any court or other governmental
agency or authority is required for the execution, delivery and performance by
Project Company of this Agreement and the consummation by Project Company of
the transactions contemplated hereby.


 


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


 


(e)                                  There
is not pending or, to its knowledge, threatened against it, any legal
proceedings that could materially adversely affect its ability to perform its
obligations under this Agreement.


 


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


 


7.2                                 MAEM’s
Representations and Warranties.  MAEM
makes the following representations and warranties as a basis for its
undertakings contained herein:


 


(a)                                  MAEM
is a limited partnership duly organized and validly existing under the laws of
the State of Delaware, is in good standing under its certificate of limited
partnership and the laws of the State of Delaware, is qualified to do business
in each foreign jurisdiction in which it transacts business, has the requisite
power and authority to own its properties, and to carry on its business as now
being conducted.


 


(b)                                 MAEM
has full power and authority to enter this Agreement and perform its
obligations hereunder.  The execution,
delivery and performance of this Agreement and the consummation of the
Transactions contemplated hereby have been duly authorized by all necessary
limited partnership action by MAEM and do not and will not contravene its
organizational documents or conflict with, result in a breach of, or entitle
any party (with due notice or lapse of time or both) to terminate, accelerate
or declare a default under, any agreement or instrument to which MAEM is a
party or by which MAEM is bound.  The
execution, delivery and performance by MAEM of this Agreement will not result
in 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 or
decree of any court or other governmental entity which may restrict or
interfere with the performance of this Agreement by it.  This Agreement is MAEM’s legal, valid and
binding 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 effect
relating to creditors’ rights generally and (ii) the remedy of specific
performance and injunctive relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.


 


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(c)                                  No
consent, waiver, order, approval, authorization, permit or order of, or
registration, qualification or filing with, any court or other governmental
agency or authority is required for the execution, delivery and performance by
MAEM of this Agreement and the consummation by MAEM of the transactions
contemplated hereby.


 


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


 


(e)                                  There
is not pending or, to its knowledge, threatened against it, any legal
proceedings that could materially adversely affect its ability to perform its
obligations under this Agreement.


 


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


 


ARTICLE 8.


BILLING AND PAYMENT


 


8.1                                 Cost
Allocation.  For services rendered by
MAEM to Project Company under this Agreement and/or any Direct Contract,
Project Company shall pay MAEM its monthly share of allocated costs for
fulfilling its responsibilities to Project Company under this Agreement and/or
any Direct Contract including, but not limited to, personnel costs (“Service
Fee”).  For purposes of determining
Project Company’s share of allocated costs, MAEM shall apply an industry
standard methodology which is applied uniformly across the Asset
Companies.  Each of MAEM and Project
Company acknowledges that the monthly allocations may be adjusted from time to
time.


 


8.2                                 Billing
and Payment. Each month, MAEM shall pay Project Company the positive Net
Market Revenues due for the prior month (or, if Net Market Revenues for such
month are negative, Project Company shall pay MAEM an amount equal to such
negative balance) by wire transfer to the payment address provided by the
recipient on or before the twentieth (20th) day of each month, or if
such day is not a business day, the immediately following business day.  At the time of each monthly payment, MAEM
shall render to Project Company a statement detailing the Net Market Revenues
for the prior month, and shall provide Project Company with supporting
documentation for each such monthly statement, identifying calculations
underlying such Net Market Revenues.  If
PJM later adjusts amounts payable by or paid to MAEM with respect to
transactions in the Asset Book, such amounts will be credited to, or paid by,
Project Company in the month in which MAEM receives notice of the
adjustment.  The preceding sentence shall
survive termination of this Agreement. 
If a third party fails to pay MAEM any amount due for Products sold to
such party, MAEM shall only be required to pay the Asset Company the amount
received by MAEM from the third party. 
In other words, MAEM shall not be responsible for


 


13

















 


non-payment by a third
party customer, and any Gross Revenues shall not be adjusted upward to account
for any such non-payment.


 


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


 


“Gross
Revenues” means all revenues attributed to the Asset Book for a certain
month including, without limitation, the actual revenues received by MAEM from (a) sales
of all Products generated by, or available from, the Generating Station, (b) sales
of Purchased Power, (c) excess Fuel sales, (d) sales or trades of
excess Emissions Allowances from the Generating Station and (e) gains
associated with physical and/or financial products (including, but not limited
to, swaps, contracts for differences and options) purchased for the Asset Book
related to hedges and trading activities.


 


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


 


8.3                                 Monthly
Statements.  Project Company and MAEM
will cooperate to provide monthly statements in reasonable detail showing the
calculation of the Net Market Revenues, to enable Project Company to track Net
Market Revenues.  Project Company shall
have the right, upon reasonable notice, to examine and/or audit the Asset Book
from time to time.


 


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


 


8.5                                 FERC
Refunds.  In the event MAEM is
ordered by FERC to refund any payments received by MAEM from third parties
related 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 third
party.  The Project Company’s obligation
to pay FERC or a third party, or reimburse MAEM, any refund amount shall be
without regard to the cause or causes related thereto


 


14

















 


including, without
limitation, the negligence of MAEM.  Any
such payment to FERC or a third party shall be made within the time period
ordered by FERC.


 


ARTICLE 9.


DEFAULTS AND REMEDIES


 


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


 


(a)                                  default
shall occur in the payment of any amounts due from such Party hereunder which
shall continue for more than ten (10) days after written notice from the
other Party;


 


(b)                                 other
than as provided in Section 9.1(a) above, default shall occur in the
performance of any covenant or condition to be performed by such Party under
this Agreement and such default shall continue unremedied for a period of
thirty (30) days after written notice from the other Party specifying the
nature of such default;                                       or


 


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


 


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


 


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


 


(b)                                 Without
limiting the foregoing, any unexcused breach of this Agreement or failure of
either Party to perform its obligations hereunder shall subject such Party to the
payment of actual damages to the other Party, regardless of any cure period.


 


ARTICLE 10.


FORCE
MAJEURE


 


10.1                           Force
Majeure.  If either Party is rendered
wholly or partly unable to perform its obligations under this Agreement because
of a Force Majeure event, that Party will be excused from whatever performance
is 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 the
occurrence of the Force Majeure event, gives the other Party written notice
describing the particulars of the


 


15

















 


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


 


ARTICLE 11.


MISCELLANEOUS PROVISIONS


 


11.1                           Assignment;
Successors and Assigns.


 


(a)                                  No
assignment or delegation by either Party (or any successor or assignee thereof)
of this Agreement, in whole or in part, shall be made or become effective
without 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 as
to assure that such Party’s obligations under this Agreement will be honored fully
and timely by any succeeding party.


 


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


 


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


 


	
  IF TO
  PROJECT

  	
   

  	
   

  
	
  COMPANY:

  	
   

  	
  Mirant Potomac River,
  LLC

  
	
   

  	
   

  	
  1155 Perimeter Center
  West

  
	
   

  	
   

  	
  Atlanta, Georgia 30338

  
	
   

  	
   

  	
  Attention: President

  
	
   

  	
   

  	
   

  
	
  IF TO
  MAEM:

  	
   

  	
  Mirant Americas Energy
  Marketing, LP

  
	
   

  	
   

  	
  1155 Perimeter Center
  West

  
	
   

  	
   

  	
  Atlanta, Georgia 30338

  



 


16

















 


	
   

  	
   

  	
  Attention: Legal Department

  
	
   

  	
   

  	
   

  
	
  IF TO
  MET:

  	
   

  	
  Mirant Energy Trading,
  LLC

  
	
   

  	
   

  	
  1155 Perimeter Center
  West

  
	
   

  	
   

  	
  Atlanta, Georgia 30338

  
	
   

  	
   

  	
  Attention: Legal
  Department

  



 


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


 


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


 


11.4                           Compliance
With Laws.  At all times during the
term of this Agreement, the Parties shall comply with all laws, rules,
regulations, and codes of all governmental authorities having jurisdiction over
each of their respective businesses which are now applicable, or may be
applicable hereafter, including without limitation, all special laws, policies,
ordinances, or regulations now in force, as amended or hereafter enacted.  The Parties hereto shall maintain all
licenses, permits and other consents from all governmental authorities having
jurisdiction for the necessary use and operation of their respective business.  Nothing herein shall be deemed a waiver of
the Parties’ right to challenge the validity of any such law, rule or
regulation.


 


11.5                           Entire
Agreement.  This Agreement sets forth
the entire agreement of the Parties with respect to the subject matter herein
and takes precedence over all prior understandings.


 


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


 


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


 


17

















 


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


 


11.9                           Risk
Management Policy.  The Parties
acknowledge and agree that this Agreement is subject to the Risk Management
Policy approved by the Parties’ Board of Directors.  In the event of a conflict between the
provisions of this Agreement and the terms of the Risk Management Policy, the
terms of the Risk Management Policy shall govern and control.


 


 


SIGNATURES APPEAR ON THE
FOLLOWING PAGE]


 


18

















 


IN WITNESS WHEREOF, and intending to be legally bound
hereby, the Parties hereto have caused this Agreement to be duly executed as an
instrument under seal by their respective duly 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 Potomac River,
  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

  



 


19

















 


EXHIBIT A


 


Potomac
River Generating Station


 


	
  Unit

  	
   

  	
  Location

  	
   

  	
  Nameplate

  Capacity

  	
   

  	
  Commercial

  Operation Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C1

  	
   

  	
  Alexandria, VA

  	
   

  	
  88

  	
   

  	
  1949

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C2

  	
   

  	
  Alexandria, VA

  	
   

  	
  88

  	
   

  	
  1950

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C3

  	
   

  	
  Alexandria, VA

  	
   

  	
  102

  	
   

  	
  1954

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C4

  	
   

  	
  Alexandria, VA

  	
   

  	
  102

  	
   

  	
  1956

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C5

  	
   

  	
  Alexandria, VA

  	
   

  	
  102

  	
   

  	
  1957

  	
   

  



 


20