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EXHIBIT 10
(p)




PURCHASE AND SALE AGREEMENT




by and between




Broadway Gen Funding, LLC




as Seller,




and




Consumers Energy Company




as Buyer




dated as of May 24, 2007




TABLE OF CONTENTS




	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 
	ARTICLE I DEFINITIONS AND CONSTRUCTION	 	 
	 
	 	 	 	 
	Section 1.1

	 	Definitions	 	 
	Section 1.2

	 	Rules of Construction	 	 
	 
	 	 	 	 
	ARTICLE II PURCHASE AND SALE AND CLOSING	 	 
	 
	 	 	 	 
	Section 2.1

	 	Purchase and Sale	 	 
	Section 2.2

	 	Purchase Price.	 	 
	Section 2.3

	 	Closing	 	 
	Section 2.4

	 	Closing Deliveries by Seller to Buyer	 	 
	Section 2.5

	 	Closing Deliveries by Buyer to Seller	 	 
	Section 2.6

	 	Post-Closing Adjustment	 	 
	Section 2.7

	 	Allocation of Purchase Price	 	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING SELLER	 	 
	 
	 	 	 	 
	Section 3.1

	 	Organization	 	 
	Section 3.2

	 	Authority; Enforceability	 	 
	Section 3.3

	 	No Conflicts; Consents and Approvals	 	 
	Section 3.4

	 	Legal Proceedings	 	 
	Section 3.5

	 	Brokers	 	 
	Section 3.6

	 	Capitalization	 	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING THE PROJECT COMPANY	 	 






 









 






	 	 	 	 	 
	 	 	 	 	Page
	Section 4.1

	 	Organization	 	 
	Section 4.2

	 	No Conflicts; Consents and Approvals	 	 
	Section 4.3

	 	Capitalization	 	 
	Section 4.4

	 	Business	 	 
	Section 4.5

	 	Bank Accounts	 	 
	Section 4.6

	 	Subsidiaries	 	 
	Section 4.7

	 	Legal Proceedings	 	 
	Section 4.8

	 	Compliance with Laws and Orders	 	 
	Section 4.9

	 	Balance Sheets; No Undisclosed Liabilities	 	 
	Section 4.10

	 	Absence of Certain Changes	 	 
	Section 4.11

	 	Taxes	 	 
	Section 4.12

	 	Regulatory Status	 	 
	Section 4.13

	 	Contracts	 	 
	Section 4.14

	 	Real Property	 	 
	Section 4.15

	 	Permits	 	 
	Section 4.16

	 	Environmental Matters	 	 
	Section 4.17

	 	Intellectual Property	 	 
	Section 4.18

	 	Brokers	 	 
	Section 4.19

	 	Employees and Labor Matters	 	 
	Section 4.20

	 	Employee Benefits	 	 
	 
	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER	 	 
	 
	 	 	 	 
	Section 5.1

	 	Organization	 	 
	Section 5.2

	 	Authority; Enforceability	 	 
	Section 5.3

	 	No Conflicts	 	 
	Section 5.4

	 	Legal Proceedings	 	 
	Section 5.5

	 	Compliance with Laws and Orders	 	 
	Section 5.6

	 	Brokers	 	 
	Section 5.7

	 	No Knowledge of Seller’s Breach	 	 
	Section 5.8

	 	Financial Resources	 	 
	Section 5.9

	 	No Conflicting Contracts	 	 
	Section 5.10

	 	Opportunity for Independent
Investigation; No Other Representations	 	 
	 
	 	 	 	 
	ARTICLE VI COVENANTS	 	 
	 
	 	 	 	 
	Section 6.1

	 	Regulatory and Other Approvals	 	 
	Section 6.2

	 	Access of Buyer and Seller	 	 
	Section 6.3

	 	Certain Restrictions	 	 
	Section 6.4

	 	Use of Certain Names	 	 
	Section 6.5

	 	Termination of Certain Services and Contracts	 	 
	Section 6.6

	 	Employee and Benefit Matters	 	 
	Section 6.7

	 	Indebtedness	 	 
	Section 6.8

	 	Insurance	 	 
	Section 6.9

	 	Transfer Taxes	 	 
	Section 6.10

	 	Books and Records	 	 






 









 






	 	 	 	 	 
	 	 	 	 	Page
	Section 6.11

	 	Tax Matters	 	 
	Section 6.12

	 	Schedule Update	 	 
	Section 6.13

	 	Casualty	 	 
	Section 6.14

	 	Condemnation	 	 
	Section 6.15

	 	Confidentiality	 	 
	Section 6.16

	 	Public Announcements	 	 
	Section 6.17

	 	Release of Guaranties, etc.	 	 
	Section 6.18

	 	Distributions	 	 
	Section 6.19

	 	Further Assurances	 	 
	Section 6.20

	 	Monthly Operating Report	 	 
	Section 6.21

	 	Creditworthiness of Seller	 	 
	Section 6.22

	 	Balance Sheet	 	 
	 
	 	 	 	 
	ARTICLE VII BUYER’S CONDITIONS TO CLOSING	 	 
	 
	 	 	 	 
	Section 7.1

	 	Representations and Warranties	 	 
	Section 7.2

	 	Performance	 	 
	Section 7.3

	 	Officer’s Certificate	 	 
	Section 7.4

	 	Orders and Laws	 	 
	Section 7.5

	 	Consents and Approvals	 	 
	Section 7.6

	 	Resignation of Members, Managers, Officers and Directors
	 	 
	Section 7.7

	 	Release of Indebtedness; Release of Liens	 	 
	 
	 	 	 	 
	ARTICLE VIII SELLER’S CONDITIONS TO CLOSING	 	 
	 
	 	 	 	 
	Section 8.1

	 	Representations and Warranties	 	 
	Section 8.2

	 	Performance	 	 
	Section 8.3

	 	Officer’s Certificate	 	 
	Section 8.4

	 	Orders and Laws	 	 
	Section 8.5

	 	Consents and Approvals	 	 
	 
	 	 	 	 
	ARTICLE IX TERMINATION	 	 
	 
	 	 	 	 
	Section 9.1

	 	Termination	 	 
	Section 9.2

	 	Effect of Termination	 	 
	Section 9.3

	 	Specific Performance and Other Remedies	 	 
	 
	 	 	 	 
	ARTICLE X INDEMNIFICATION, LIMITATIONS OF LIABILITY AND WAIVERS	 	 
	 
	 	 	 	 
	Section 10.1

	 	Indemnification	 	 
	Section 10.2

	 	Limitations of Liability	 	 
	Section 10.3

	 	Indirect Claims	 	 
	Section 10.4

	 	Waiver of Other Representations.	 	 
	Section 10.5

	 	Waiver of Remedies	 	 
	Section 10.6

	 	Procedure with Respect to Third-Party Claims	 	 
	 
	 	 	 	 
	ARTICLE XI MISCELLANEOUS	 	 
	 
	 	 	 	 
	Section 11.1

	 	Notices	 	 
	Section 11.2

	 	Entire Agreement	 	 






 









 






	 	 	 	 	 
	 	 	 	 	Page
	Section 11.3

	 	Expenses	 	 
	Section 11.4

	 	Disclosure	 	 
	Section 11.5

	 	Waiver	 	 
	Section 11.6

	 	Amendment	 	 
	Section 11.7

	 	No Third Party Beneficiary	 	 
	Section 11.8

	 	Assignment; Binding Effect	 	 
	Section 11.9

	 	Headings	 	 
	Section 11.10

	 	Invalid Provisions	 	 
	Section 11.11

	 	Counterparts; Facsimile	 	 
	Section 11.12

	 	Governing Law; Venue; and Jurisdiction	 	 
	Section 11.13

	 	Parcel Three Option	 	 
	 
	 	 	 	 
	EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	Exhibit 2.4

	 	Form of Company Assignment Agreement	 	 
	 
	 	 	 	 
	SCHEDULES
	 	 	 	 
	 
	 	 	 	 
	1.1—A

	 	Net Working Capital Calculation	 	 
	1.1—B

	 	Budget	 	 
	1.1—K

	 	Knowledge	 	 
	1.1—PL

	 	Permitted Liens	 	 
	1.1 — PT

	 	Parcel Three	 	 
	3.3(c)

	 	Seller Approvals	 	 
	4.2

	 	Company Consents	 	 
	4.3

	 	Capitalization	 	 
	4.4

	 	Operation of Business	 	 
	4.5

	 	Bank Accounts	 	 
	4.7

	 	Legal Proceedings	 	 
	4.8

	 	Compliance with Laws	 	 
	4.9

	 	Financial Statements; Undisclosed Liabilities	 	 
	4.10

	 	Absence of Certain Changes	 	 
	4.11

	 	Taxes	 	 
	4.12

	 	Regulatory Status	 	 
	4.13

	 	Material Contracts	 	 
	4.14

	 	Real Property	 	 
	4.15(a)

	 	Permits	 	 
	4.16(c)

	 	Emissions Credits and Allowances	 	 
	4.19

	 	Labor Matters	 	 
	4.19(b)

	 	Employees	 	 
	4.19(c)

	 	Third Party Vendor Employees	 	 






 









 






	 	 	 	 	 
	4.20

	 	Employee Benefits	 	 
	5.3

	 	Buyer Approvals	 	 
	5.9

	 	Conflicts	 	 
	6.3

	 	Exceptions to Conduct of Business	 	 
	6.5

	 	Terminated Contracts	 	 
	6.10

	 	Books and Records	 	 
	6.17

	 	Support Obligations	 	 
	11.13

	 	Quitclaim Deed for Parcel Three	 	 






PURCHASE AND SALE AGREEMENT




     This Purchase and Sale Agreement, dated as of May 24, 2007 (this “Agreement”), is made and
entered into by and between Broadway Gen Funding, LLC, a Delaware limited liability company
(“Seller”) and Consumers Energy Company, a Michigan corporation (“Buyer”).



WITNESSETH:




     WHEREAS, pursuant to the Purchase and Sale Agreement, dated as of January 15, 2007 (as the
same may be amended from time to time, the “Mirant PSA”), by and between Mirant Americas Inc., a
Delaware corporation (“Mirant”), and LS Power Acquisition Co I, LLC, a Delaware limited liability
company which has since changed its name to Broadway Generating Company, LLC, an indirect
subsidiary of Seller purchased 100% of the Project Company Interests (as defined below);



     WHEREAS, Seller currently owns 100% of the Project Company Interests;



     WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, the
Project Company Interests on the Closing Date (as defined below) on the terms and subject to the
conditions set forth in this Agreement; and



     WHEREAS, in connection with this Agreement, Buyer and the Project Company have entered into a
Master Power Purchase and Sale Agreement of even date herewith.



     NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties,
covenants and agreements in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:



ARTICLE I




DEFINITIONS AND CONSTRUCTION




     Section 1.1 Definitions. As used in this Agreement, the following capitalized terms
have the meanings set forth below:



     “Acceptable Order” means (i) affirmation that the acquisition of the Project by Buyer is
reasonable and prudent; (ii) approval for Buyer to include the Base Purchase Price of the Project



 









 







in its rate base, (iii) recognition of the fuel costs associated with operation of the Project, and
approval of the rate adjustments necessary to allow full recovery by Buyer of the non-fuel costs of
operating and maintaining the Project (provided that such operating and maintenance costs will be
determined by Buyer in a manner consistent with how such costs have been determined by Buyer at its
other owned generating plants and previously approved by the MPSC), other than a de minimis
reduction (provided that if such reduction (A) is more than 1% of the annual non-fuel operating and
maintenance costs of the Project, the Parties shall confer to determine the effects of such
reduction and the appropriate response thereto and (B) is more than 5% of the annual non-fuel
operating and maintenance costs of the Project, Buyer may at its option on 10 days’ prior notice to
Seller terminate this Agreement; and in the case of each of the approvals set forth in clauses (ii)
and (iii), without the imposition of other conditions that taken in the aggregate would have the
effect of reducing such recovery (other than any de minimis reduction).



     “Adjustment Estimate” has the meaning given to it in Section 2.5(a).



     “Affiliate” means, with respect to any Person, any other Person that directly or indirectly
through one or more intermediaries, controls, is controlled by or is under common control with such
Person. For purposes of this definition, “control” of a Person means the power, direct or indirect,
to direct or cause the direction of the management and policies of such Person whether through
ownership of voting securities or ownership interests, by Contract or otherwise, and specifically
with respect to a corporation, partnership or limited liability company, means direct or indirect
ownership of more than 50% of the voting securities in such corporation or of the voting interest
in a partnership or limited liability company.



     “Agreed Capital Expenditures” has the meaning given to it in Section 2.2(b).



     “Agreement” has the meaning given to it in the introduction to this Agreement.



     “Ancillary Agreements” means the Company Assignment Agreement, the Closing Certificates and
the other documents and agreements to be delivered pursuant to this Agreement.



     “Assets” of any Person means all assets and properties of every kind, nature, character and
description (whether real, personal or mixed, whether tangible or intangible and wherever
situated), including the related goodwill, which assets and properties are operated, owned or
leased by such Person.



     “Balance Sheets” has the meaning given to it in Section 4.9.



     “Bankruptcy Order” means that certain Order Confirming the Amended and Restated Second Amended
Joint Chapter 11 Plan of Reorganization for Mirant Corporation and its Affiliated debtors.



     “Base Purchase Price” has the meaning given to it in Section 2.2(a).



     “Benefit Plan” means (a) each material “employee benefit plan,” as such term is defined in
Section 3(3) of ERISA, of Seller or any of its Affiliates that covers the Employees, (b) each



 









 







stock
bonus, stock ownership, stock option, stock purchase, stock appreciation right, phantom stock, or
other stock plan (whether qualified or nonqualified) that covers the Employees, and (c) each bonus
or incentive compensation plan that covers the Employees. Benefit Plans do not include any
Multiemployer Plans.



     “Budget” means the major maintenance and capital expenditures budget estimates for the Project
Company for the period from the date hereof until December 31, 2008, as set forth in Schedule
1.1-B.



     “Business” means the ownership and operation of the Project as currently conducted, including
the generation and sale of electricity and capacity and electric-related products by the Project
Company at or from the Project as currently conducted, the receipt by the Project Company of fuel
and the conduct of other activities by the Project Company related or incidental to the foregoing
all as currently conducted.



     “Business Day” means a day other than Saturday, Sunday or any day on which banks located in
the State of New York are authorized or obligated to close.



     “Buyer” has the meaning given to it in the introduction to this Agreement.



     “Buyer Approvals” has the meaning given to it in Section 5.3(c).



     “Buyer Indemnified Parties” has the meaning given to it in Section 10.1(a).



     “Buyer’s Advisors” has the meaning given to it in Section 6.2.



     “Buyer’s Determination” has the meaning given to it in Section 2.6(a).



     “Buyer’s Proposal” has the meaning given to it in Section 2.2(b).



     “Capital Expenditures Adjustment” has the meaning set forth in Section 2.2(a).



     “Casualty Loss” has the meaning given to it in Section 6.13.



     “CBA” has the meaning given to it in Section 6.6(b).



     “CBA Employees” has the meaning given to it in Section 4.19(d).



     “Claim” means any demand, claim, action, investigation, legal proceeding (whether at law or in
equity) or arbitration.



     “Claiming Party” has the meaning given to it in Section 10.6(a).



     “Closing” means the closing of the transactions contemplated by this Agreement, as provided
for in Section 2.3.



     “Closing Certificates” means the officer’s certificates referenced in Section 7.3 and Section
8.3.



     “Closing Date” means the date on which Closing occurs.




 











 





     “Closing Date Net Working Capital” means the aggregate Net Working Capital of the Project
Company as of the Closing Date.



     “COBRA Continuation Coverage” has the meaning given to it in Section 6.6(h).



     “Code” means the Internal Revenue Code of 1986.



     “Company Assignment Agreement” has the meaning given to it in Section 2.4(a).



     “Company Consents” has the meaning given to it in Section 4.2(b).



     “Condemnation Value” has the meaning given to it in Section 6.14.



     “Confidentiality Agreement” means the Confidentiality Agreement between Buyer and LS Power
Equity Advisors, LLC dated March 13, 2007.



     “Contract” means any legally binding contract, lease, license, evidence of Indebtedness,
mortgage, indenture, purchase order, binding bid, letter of credit, security agreement or other
legally binding arrangement but shall exclude Permits.



     “Controlled Group Liability” means any and all liabilities under (i) Title IV of ERISA, (ii)
Section 302 of ERISA, (iii) Sections 412 and 4971 of the Code, or (iv) the continuation coverage
requirements of Section 601 et seq. of ERISA and Section 4980B of the Code.



     “Credit Rating” means, with respect to any Person, the rating given to such Person’s long-term
unsecured debt obligations by S&P or Moody’s, as applicable, and any successors thereto.



     “Deductible Amount” has the meaning given to it in Section 10.2(c).



     “Employees” has the meaning given to it in Section 4.19(b).



     “Environmental Claim” means any Claim or Loss arising out of or related to any violation of
Environmental Law.



     “Environmental Law” means the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. § 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et
seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42
U.S.C. § 7401 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629; the Oil
Pollution Act, 33 U.S.C. § 2701 et seq.; the Emergency Planning and Community Right-to-Know Act, 42
U.S.C. § 11001 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j; and all
similar Laws (including implementing regulations) of any Governmental Authority having jurisdiction
over the assets in question addressing pollution control or protection of the environment.



     “Equity Interests” means capital stock, partnership or membership interests or units (whether
general or limited), and any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distribution of assets of, the issuing entity.



 









 





     “Equity Securities” means (i) Equity Interests, (ii) subscriptions, calls, warrants, options
or commitments of any kind or character relating to, or entitling any Person to acquire, any Equity
Interests and (iii) securities convertible into or exercisable or exchangeable for shares of Equity
Interests.



     “ERISA” means the Employee Retirement Income Security Act of 1974.



     “ERISA Affiliate” means any entity, trade or business that is a member of a group described in
Section 414(b) or (c) of the Code or Section 400l(b)(l) of ERISA that includes Seller, or that is a
member of the same “controlled group” as Seller pursuant to Section 4001(a)(14) of ERISA; provided,
however, that the Project Company shall not be considered to be an ERISA Affiliate from and after
the Closing Date.



     “Excluded Liabilities” means all Claims and Losses of or relating to Seller, the Project
Company, Mirant or its Affiliates arising out of: (i) any Benefit Plan liabilities relating to
periods prior to the Mirant Closing, (ii) fees payable to any broker, finder, financial advisor or
agent with respect to the transactions contemplated by this Agreement, (iii) the Southern Company
and Other Claims, (iv) Terminated Contracts or (v) Section 8.4(iii) of the O&M Agreement, but only
if Buyer shall have terminated the O&M Agreement within five (5) Business Days of the Closing Date
and then only to the extent that such Claims or Losses were not a result of any action of Buyer
other than the act of terminating the O&M Agreement.



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



     “Final Adjustment” has the meaning given to it in Section 2.6(c).



     “FPA” means the Federal Power Act.



     “GAAP” means generally accepted accounting principles in the United States of America.



     “Governmental Authority” means any court, tribunal, arbitrator, authority, agency, commission,
official or other instrumentality of the United States or any state, county, city or other
political subdivision or similar governing entity, and including any governmental,
quasi-governmental or non-governmental body administering, regulating or having general oversight
over natural gas, electricity, power or other markets.



     “Hazardous Material” means each substance designated as a hazardous waste, hazardous
substance, hazardous material, pollutant, contaminant or toxic substance under any Environmental
Law and any petroleum or petroleum products that have been released into the environment.



     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.



     “Indebtedness” means any of the following: (a) any indebtedness for borrowed money; (b) any
obligations evidenced by bonds, debentures, notes or other similar instruments; (c) any obligations
to pay the deferred purchase price of property or services, except trade accounts payable and other
current liabilities arising in the ordinary course of business consistent with past



 









 







practices; (d) any obligations as lessee under capitalized leases; (e) any obligations,
contingent or otherwise, under acceptance, letters of credit or similar facilities; and (f) any
guaranty of any of the foregoing.



     “Indemnified Parties” has the meaning given to it in Section 10.1(b).



     “Indemnifying Party” means a Person required to indemnify a Seller Indemnified Party or a
Buyer Indemnified Party, as the case may be, pursuant to the terms of this Agreement.



     “Independent Accountants” has the meaning given to it in Section 2.6(b).



     “Independent Engineering Firm” shall mean Black & Veatch or such other engineering firm
reasonably acceptable to Buyer and Seller.



     “Intellectual Property” means the following intellectual property rights, both statutory and
common law rights, if applicable: (a) copyrights, registrations and applications for registration
thereof, (b) trademarks, service marks, trade names, slogans, domain names, logos, trade dress, and
registrations and applications for registrations thereof, (c) patents, as well as any reissued and
reexamined patents and extensions corresponding to the patents, and any patent applications, as
well as any related continuation, continuation in part and divisional applications and patents
issuing therefrom and (d) trade secrets and confidential information, including ideas, designs,
concepts, compilations of information, methods, techniques, procedures, processes and other
know-how, whether or not patentable.



     “Interim Period” has the meaning given to it in Section 6.1.



     “Knowledge,” when used in a particular representation in this Agreement with respect to
Seller, means the actual knowledge, after reasonable inquiry, of the individuals listed on Schedule
1.1-K.



     “Laws” means all laws, statutes, rules, regulations, ordinances, orders, decrees, court
decisions, and other pronouncements having the effect of law of any Governmental Authority.



     “Lien” means any mortgage, pledge, deed of trust, assessment, security interest, charge, lien,
option, warranty, purchase right or other encumbrance.



     “Loss” means any and all judgments, losses, liabilities, amounts paid in settlement, damages,
fines, penalties, deficiencies, costs, charges, Taxes, obligations, demands, fees, interest, losses
and expenses (including court costs and reasonable fees of attorneys, accountants and other experts
in connection with any Claim made by a third party). For all purposes in this Agreement the term
“Losses” does not include any Non-reimbursable Damages.



     “Material Adverse Effect” means a material adverse effect on the business, financial condition
or results of operations of the Project Company; provided, however, that the following shall not be
considered when determining whether a Material Adverse Effect has occurred: any change, event,
effect or occurrence (or changes, events, effects or occurrences taken together) resulting from (a)
any change generally affecting the international, national or regional electric generating,
transmission or distribution industry; (b) any change generally affecting the



 









 







international, national or regional wholesale or retail markets for electric power; (c) any
change generally affecting the international, national or regional wholesale or retail markets for
the natural gas industry; (d) any change in markets for commodities or supplies, including electric
power, natural gas or fuel and water, as applicable, used in connection with the Project Company;
(e) any change in market design and pricing; (f) any change in general regulatory or political
conditions, including any engagements of hostilities, acts of war or terrorist activities or
changes imposed by a Governmental Authority associated with additional security; (g) any change in
the international, national or regional electric transmission or distribution systems or operations
thereof; (h) any continuation of an adverse trend or condition; (i) any change in any Laws
(including Environmental Laws) or industry standards; (j) the failure of Seller or any of its
Affiliates to effect the assignment of any Contract or Permit to Buyer, the Project Company, or any
Affiliate of Buyer; (k) any change in the financial condition or results of operation of the
Project Company caused by the sale of the Project Company to Buyer from Seller, including changes
due to the Credit Rating of Buyer; (l) any change in the financial, banking, or securities markets
(including any suspension of trading in, or limitation on prices for, securities on the New York
Stock Exchange, American Stock Exchange, or Nasdaq Stock Market) or any change in the general
national or regional economic or financial conditions; (m) any actions to be taken pursuant to or
in accordance with this Agreement; or (n) the announcement or pendency of the transactions
contemplated hereby.



     “Material Contracts” has the meaning given to it in Section 4.13(a).



     “May Balance Sheet” has the meaning given to it in Section 4.21.



     “Michigan Code” means the Michigan Code in effect as of the date hereof.



     “Mirant” has the meaning given to it in the recitals to this Agreement.



     “Mirant Closing” means the closing of the transactions contemplated by the Mirant PSA, which
occurred on May 1, 2007.



     “Mirant PSA” has the meaning given to it in the recitals to this Agreement.



     “Moody’s” means Moody’s Investors Services, Inc.



     “MPSC” means the Michigan Public Service Commission or its successor Governmental Authority.



     “Multiemployer Plan” means any “multiemployer plan” within the meaning of Section 4001(a)(3)
of ERISA covering the CBA Employees.



     “Net Working Capital” means (without duplication), with respect to the Project Company, the
amount (expressed as a positive or negative number) calculated in accordance with the formula and
methodology described on, and used in the preparation of, Schedule 1.1-A, and otherwise in
accordance with GAAP.



     “Non-CBA Employees” means all Employees other than CBA Employees.



 









 





     “Non-reimbursable Damages” has the meaning given to it in Section 10.5(b).



     “O&M Agreement” means Operation and Maintenance Agreement for the Zeeland Electric Facility by
and between LS Power Acquisition Co I, LLC and Wood Group Power Operations (West), Inc., dated as
of February 12, 2007, as subsequently assigned to the Project Company.



     “Organizational Documents” means, with respect to any Person, the articles or certificate of
incorporation or organization and by-laws, the limited partnership agreement, the partnership
agreement or the limited liability company agreement, or such other organizational documents of
such Person, including those that are required to be registered or kept in the place of
incorporation, organization or formation of such Person and which establish the legal personality
of such Person.



     “Parcel Three” means the real property described in Schedule 1.1-PT.



     “Parties” means collectively, Buyer and Seller.



     “Permits” means all licenses, permits, certificates of authority, authorizations, approvals,
registrations, franchises and similar consents and orders issued or granted by a Governmental
Authority.



     “Permitted Lien” means (a) any Lien for Taxes not yet due or delinquent or being contested in
good faith by appropriate proceedings; (b) any Lien arising in the ordinary course of business
consistent with past practices by operation of Law with respect to a liability that is not yet due
or delinquent or that is being contested in good faith by Mirant, Seller or the Project Company;
(c) any Lien reflected in the Balance Sheets; (d) purchase money Liens arising in the ordinary
course of business consistent with past practices; (e) all matters that are disclosed (whether or
not subsequently deleted or endorsed over) on any survey, in the title policies insuring the
Property (including the Title Policy) or any commitments therefor, or in any title reports, to the
extent such surveys, title policies, commitments or title reports are listed on Schedule 1.1-PL;
(f) imperfections or irregularities of title and other Liens that would not, in the aggregate,
reasonably be expected to materially detract from the value of the affected property or materially
impair the use of the Property in the Business; (g) zoning, planning, and other similar limitations
and restrictions, and all rights of any Governmental Authority to regulate the Property; (h) all
matters of record, that would not, in the aggregate, reasonably be expected to materially detract
from the value of the affected property; (i) the terms and conditions of the Material Contracts,
the Permits listed on Schedule 4.15(a) or the Contracts listed on Schedule 4.13; (j) pledges and
deposits made in the ordinary course of business in compliance with workers’ compensation,
unemployment insurance and other social security Laws; (k) any Lien that is released on or prior to
Closing; and (l) the matters identified on Schedule 1.1-PL (except, at Closing, those items marked
with an asterisk on such Schedule).



     “Person” means any natural person, corporation, general partnership, limited partnership,
limited liability company, proprietorship, other business organization, trust, union, association
or Governmental Authority.



     “Pre-Closing Taxable Period” has the meaning given to it in Section 6.11(a).



 









 





     “Prior Electrical Practice” means the practices, methods and standards, in general, that have
been used in the operations and maintenance of the Project since January 1, 2004.



     “Project” means the project located at the Property.



     “Project Company” means Zeeland Power Company, LLC, a Delaware limited liability company,
formerly known as Mirant Zeeland, LLC.



     “Project Company Interests” means 100% of the Equity Interests of the Project Company.



     “Property” means the real property on which the Project is located, as further described in
Schedule 4.14, including any improvements thereon and easements and rights-of-way appertaining
thereto.



     “Property Taxes” has the meaning given to it in Section 6.11(b).



     “PUHCA of 2005” means the Public Utility Holding Company Act of 2005.



     “Purchase Price” has the meaning given to it in Section 2.2(a).



     “Purchase Price Allocation Schedule” has the meaning given to it in Section 2.7(a).



     “Reasonable Best Efforts” means efforts which are designed to enable a Party, directly or
indirectly, to expeditiously satisfy a condition to, or otherwise assist in the consummation of,
the transactions contemplated by this Agreement and which do not require the performing Party to
expend any funds or assume liabilities other than expenditures and liability assumptions which are
reasonable in the context of the transactions contemplated by this Agreement.



     “Release” means any release, spill, emission, migration, leaking, pumping, injection, deposit,
disposal or discharge of any Hazardous Materials into the environment.



     “Representatives” means, as to any Person, its officers, directors, partners, members, and
employees.



     “Responding Party” has the meaning given to it in Section 10.6(a).



     “Restoration Cost” has the meaning given to it in Section 6.13.



     “S&P” means Standard & Poor’s Ratings Group.



     “Schedule Update” has the meaning given to it in Section 6.12.



     “Schedules” means the disclosure schedules prepared by Seller and attached to this Agreement.



     “Seller” has the meaning given to it in the introduction to this Agreement.



     “Seller Approvals” has the meaning given to it in Section 3.3(c).



 









 





     “Seller Credit Agreement” means the First Lien Credit Agreement, dated May 1, 2007, among
Broadway Gen Funding, LLC as Borrower, the Lenders, J.P. Morgan Securities, Barclays Capital,
Credit Suisse Securities (USA) LLC and Lehman Brothers Inc. as joint lead arrangers and joint
bookrunners, and JPMorgan Chase Bank, N.A., as administrative agent.



     “Seller Indemnified Parties” has the meaning given to it in Section 10.1(b).



     “Seller Marks” has the meaning given to it in Section 6.4(a).



     “Seller’s Net Worth” has the meaning set forth in Section 6.21.



     “Seller’s Proposal” has the meaning given to it in Section 2.2(b).



     “Southern Company and Other Claims” means (i) any liability of the Project Company associated
with the following proofs of claim filed by The Southern Company in Jointly Administered Chapter 11
Case No. 03-46590-DML, United States Bankruptcy Court, Northern District of Texas, Fort Worth
Division, of MC 2005 LLC (f/k/a Mirant Corporation prior to January 3, 2006 and MC 2005 Corporation
prior to February 23, 2006) (the “Bankruptcy Case”), as such claims may be amended: claims numbered
6327, 6379, 8139 and 8271 against the Project Company; and (ii) any liability of the Project
Company associated with the following proofs of claim filed by Lehman Commercial Paper, Inc. and/or
Wells Fargo Bank, N.A. in the Bankruptcy Case: claims numbered 6101 and 6967 against the Project
Company.



     “Straddle Taxable Period” has the meaning given to it in Section 6.11(a).



     “Support Obligations” has the meaning given to it in Section 6.17.



     “Tax” or “Taxes” means (a) any federal, state, local or foreign income, gross receipts, ad
valorem, sales and use, employment, social security, disability, occupation, industrial facilities,
property, severance, value added, transfer, capital stock, excise, withholding, premium, occupation
or other taxes, levies or other like assessments, customs, duties, imposts, charges surcharges or
fees imposed by or on behalf of any Governmental Authority, including any interest, penalty or
addition thereto and (b) any liability for amounts described in clause (a), (i) as a result of
transferee liability, (ii) by Contract or (iii) otherwise.



     “Taxing Authority” means, with respect to any Tax, the governmental entity or political
subdivision thereof that imposes such Tax, and the agency (if any) charged with the collection of
such Tax for such entity or subdivision.



     “Terminated Contracts” has the meaning given to it in Section 6.5.



     “Title and Authority Representations” has the meaning given to it in Section 10.2(a).



     “Title Policy” means that certain ALTA Owner’s Policy dated May 1, 2007, issued by Stewart
Title Guaranty Company in accordance with that certain Pro Forma Owner’s Title Insurance Policy
File No. 508240.



 









 





     “Transfer Taxes” means all transfer, sales, use, goods and services, value added, documentary,
stamp duty, gross receipts, excise, transfer and conveyance Taxes and other similar Taxes, duties,
fees or charges.



     “Transferred Employees” has the meaning given to it in Section 6.6(c).



     “Wastewater Permit” means the City of Zeeland Wastewater Discharge Permit, issued December 29,
2004 in relation to the Project.



     “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan as those terms are defined in Part I of Subtitle E
of Title IV of ERISA.



     Section 1.2 Rules of Construction.



     (a) All article, section, subsection, schedule and exhibit references used in this Agreement
are to articles, sections, subsections, schedules and exhibits to this Agreement unless otherwise
specified. The exhibits and schedules attached to this Agreement constitute a part of this
Agreement and are incorporated in this Agreement for all purposes.



     (b) If a term is defined as one part of speech (such as a noun), it shall have a corresponding
meaning when used as another part of speech (such as a verb). Unless the context of this Agreement
clearly requires otherwise words importing the masculine gender shall include the feminine and
neutral genders and vice versa. The words “includes” or “including” shall mean “including without
limitation,” the words “hereof,” “hereby,” “herein,” “hereunder” and similar terms in this
Agreement shall refer to this Agreement as a whole and not any particular section or article in
which such words appear. Any reference to a Law shall include any amendment thereof or any
successor thereto and any rules and regulations promulgated thereunder. Currency amounts referenced
in this Agreement are in U.S. Dollars.



     (c) Whenever this Agreement refers to a number of days, such number shall refer to calendar
days unless Business Days are specified. Whenever any action must be taken hereunder on or by a day
that is not a Business Day, then such action may be validly taken on or by the next day that is a
Business Day.



     (d) Each Party acknowledges that it and its attorneys have been given an equal opportunity to
negotiate the terms and conditions of this Agreement and that any rule of construction to the
effect that ambiguities are to be resolved against the drafting Party or any similar rule operating
against the drafter of an agreement shall not be applicable to the construction or interpretation
of this Agreement.



     (e) All accounting terms used herein and not expressly defined herein shall have the
respective meanings given such terms under GAAP.



 









 





ARTICLE II




PURCHASE AND SALE AND CLOSING




     Section 2.1 Purchase and Sale. On the terms and subject to the conditions set forth in
this Agreement, at the Closing. Buyer agrees to purchase from Seller, and Seller agrees to sell to
Buyer, all of the Equity Interests in the Project Company.



     Section 2.2 Purchase Price.



     (a) The purchase price (the “Purchase Price”) for the purchase and sale described in Section
2.1 is equal to the sum of (1) $517,000,000 (the “Base Purchase Price”), plus (2) the
Closing Date Net Working Capital, plus (3) an amount equal to the sum of (i) capital
expenditures and major maintenance expenditures of the Project Company up to the amounts set forth
on the Budget, (ii) capital expenditures and major maintenance expenditures of the Project Company
in excess of the amounts set forth on the Budget but only up to $1,000,000 in the aggregate
(subject to the succeeding clause (iii)) and (iii) any Agreed Capital Expenditures, in each case as
such capital expenditures or major maintenance expenditure have been reflected in Net Working
Capital or paid by Seller or the Project Company, during the Interim Period (the “Capital
Expenditures Adjustment”), minus (4) $225,000 (in consideration of costs arising from the
termination by Buyer of the O&M Agreement, other than the costs set forth in clause (v) of the
definition of Excluded Liabilities).



     (b) “Agreed Capital Expenditures” shall mean capital expenditures or major maintenance
expenditures that have (i) been agreed by the Parties or (ii) been determined to be expenditures
made in accordance with prudent industry standards as follows: Following notice by Seller of a
proposed capital expenditure or major maintenance expenditures, if Buyer shall not have agreed to
Seller’s proposed capital expenditure or major maintenance expenditures pursuant to the foregoing
clause (i) within 10 Business Days of such notice, Seller may submit to the Independent Engineering
Firm a description of the proposed capital expenditure or major maintenance expenditures along with
necessary supporting documentation as the Independent Engineer may deem appropriate (the “Seller’s
Proposal”). Buyer may, at its election, submit to the Independent Engineering Firm an alternative
good faith proposal to address Seller’s capital expenditure or major maintenance expenditures along
with the necessary supporting documentation as the Independent Engineer may deem appropriate
(including a proposal to make no such expenditures) (the “Buyer’s Proposal”). The Independent
Engineering Firm shall, within 30 Business Days, issue a decision selecting the proposal that it
deems most closely followed or would follow prudent industry practice. The proposal for capital
expenditures or major maintenance expenditures (or a proposal to make no such expenditures)
selected by the Independent Engineering Firm shall constitute “Agreed Capital Expenditures”. For
the avoidance of doubt, Agreed Capital Expenditures shall in any event include any capital
expenditures or major maintenance expenditures the failure of which to make by Seller or the
Project Company would constitute a breach under a Material Contract. For the avoidance of doubt,
nothing in this Section 2.2 shall obligate Seller or the Project Company to postpone making such
capital expenditures or major maintenance expenditures pending the notice to Buyer or the
pronouncement by the Independent Engineering Firm of its decision hereunder. The Party whose
proposal is not selected shall pay the fees and expenses of the Independent Engineering Firm.



     Section 2.3 Closing. The Closing shall take place at the offices of Latham & Watkins
LLP, 885 Third Avenue, New York, NY 10022 at 10:00 A.M. local time, on (a) the later of (i) the



 









 







third Business Day after the conditions to Closing set forth in Articles VII and VIII (other
than actions to be taken or items to be delivered at Closing) have been satisfied or waived or (ii)
if mutually agreed, on the last Business Day of the month in which the conditions to Closing set
forth in Articles VII and VIII (other than actions to be taken or items to be delivered at Closing)
have been satisfied or waived or (b) such other date and at such other time and place as Buyer and
Seller mutually agree in writing; provided, however, that the Closing shall not occur on any date
from and after January 29, 2008 through and including May 3, 2008 without the prior written consent
of Seller in its sole discretion. All actions listed in Section 2.4 or 2.5 that occur on the
Closing Date shall be deemed to occur simultaneously at the Closing.



     Section 2.4 Closing Deliveries by Seller to Buyer. At the Closing, Seller shall
deliver, or shall cause to be delivered, to Buyer (a) an executed counterpart by Seller of an
assignment of the Project Company Interests (the “Company Assignment Agreement”) in the form
attached hereto as Exhibit 2.4 evidencing the assignment and transfer to Buyer of the
Project Company Interests owned by Seller, (b) a certification of non-foreign status in the form
prescribed by Treasury Regulation Section 1.1445-2(c) with respect to Seller, and the owner of such
entity that is treated as a disregarded entity for federal income tax purposes, and (c) an executed
counterpart by Seller of each other Ancillary Agreement to which Seller is a party.



     Section 2.5 Closing Deliveries by Buyer to Seller. At the Closing, Buyer shall deliver
to Seller the following:



     (a) a wire transfer of immediately available funds (to such account or accounts as Seller
shall have notified Buyer of at least 2 Business Days prior to the Closing Date) in an amount equal
to (i) the Base Purchase Price plus (ii) Seller’s good faith estimate (the “Adjustment
Estimate”) of (A) the Closing Date Net Working Capital and (B) the Capital Expenditures Adjustment,
which Seller shall deliver in writing to Buyer at least 3 Business Days prior to the Closing Date,
including the calculation thereof in reasonable detail minus (iii) $225,000; and



     (b) an executed counterpart by Buyer of (i) the Company Assignment Agreement, and (ii) each
other Ancillary Agreement to which Buyer is a party.



     Section 2.6 Post-Closing Adjustment.



     (a) After the Closing Date, Seller and Buyer shall cooperate and provide each other access to
their respective books, records and employees (and those of the Project Company) as are reasonably
requested in connection with the matters addressed in this Section 2.6. Within 60 days after the
Closing Date, Buyer shall determine the Closing Date Net Working Capital and the Capital
Expenditures Adjustment and shall provide Seller with written notice of such determination, along
with reasonable supporting information and calculations (the “Buyer’s Determination”).



     (b) If Seller object to Buyer’s Determination, then it shall provide Buyer written notice
thereof within 30 days after receiving Buyer’s Determination; provided, that Seller and
Buyer shall be deemed to have agreed upon all items and amounts that are not disputed by Seller in
such written notice. If the Parties are unable to agree on the Closing Date Net Working Capital,
within 120 days after the Closing Date, the Parties shall refer such dispute to a firm of
nationally



 









 







recognized independent public accountants mutually acceptable to Buyer and Seller (the
“Independent Accountants”), which firm shall make a final and binding determination as to only
those matters in dispute with respect to this Section 2.6(b) on a timely basis and promptly shall
notify the Parties in writing of its resolution. The Independent Accountants shall not have the
power to modify or amend any term or provision of this Agreement. Each Party shall bear and pay
one-half of the fees and other costs charged by the Independent Accountants. If Seller does not
object to Buyer’s Determination within the time period and in the manner set forth in the first
sentence of this Section 2.6(b) or if Seller accept Buyer’s Determination, the Closing Date Net
Working Capital and the Capital Expenditures Adjustment as set forth in Buyer’s Determination shall
become final and binding upon the Parties for all purposes hereunder.



     (c) If the Closing Date Net Working Capital and the Capital Expenditures Adjustment (as agreed
between the Parties or as determined by the Independent Accountants or otherwise) (the “Final
Adjustment”) is greater than the amounts related to such adjustments in the Adjustment Estimate,
then Buyer shall pay Seller, within 5 Business Days after such amounts are agreed or determined
pursuant to Section 2.6(b), by wire transfer of immediately available funds to an account
designated by Seller, the difference between the Final Adjustment and the amounts related to such
adjustments in the Adjustment Estimate and if the Final Adjustment is less than the amounts related
to such adjustments in the Adjustment Estimate, then Seller shall pay Buyer, within 5 Business Days
after such amounts are agreed or determined pursuant to Section 2.6(b), by wire transfer of
immediately available funds to an account designated by Buyer, the difference between the Final
Adjustment and the amounts related to such adjustments in the Adjustment Estimate.



     Section 2.7 Allocation of Purchase Price.



     (a) Within 120 days after the determination of the Final Adjustment, Seller shall provide to
Buyer a schedule setting forth a proposal for an allocation of the Purchase Price among the Assets
of the Project Company, grouped by the seven asset classes referred to in Treasury Regulations
Section 1.1060-1(c) (the “Purchase Price Allocation Schedule”). Within 30 Business Days after its
receipt of Seller’s proposed Purchase Price Allocation Schedule, Buyer shall propose to Seller any
changes thereto or otherwise shall be deemed to have agreed thereto. If Buyer proposes changes to
Seller’s proposed Purchase Price Allocation Schedule within the 30 Business Day period described
above, Buyer and Seller shall cooperate in good faith to mutually agree upon a Purchase Price
Allocation Schedule as soon as practicable. Notwithstanding the foregoing, Seller and Buyer agree
and acknowledge that neither Seller nor Buyer shall, absent mutual written agreement, challenge or
dispute the allocations set forth in the Purchase Price Allocation Schedule.



     (b) Seller and Buyer each shall prepare an IRS Form 8594, “Asset Acquisition Statement Under
Section 1060,” incorporating the allocations set forth in the Purchase Price Allocation Schedule
mutually agreed upon pursuant to Section 2.7(a), which the Parties shall use to report the
transactions contemplated by this Agreement to the applicable Taxing Authorities. Each of Seller
and Buyer agrees to provide the other promptly with any other information required to complete Form
8594. The Purchase Price Allocation Schedule shall be revised to take into account subsequent
adjustments to the Purchase Price, including any indemnification payments



 









 







(which shall be treated for Tax purposes as adjustments to the Purchase Price), as mutually
agreed upon by the Parties and in accordance with the provisions of Section 1060 of the Code and
the Treasury Regulations thereunder.



     (c) If the Parties are unable to agree on the Purchase Price Allocation Schedule pursuant to
Section 2.7(a) or any subsequent adjustment to the Purchase Price Allocation Schedule pursuant to
Section 2.7(b), the Parties shall refer such dispute to the Independent Accountants, which firm
shall make a final and binding determination as to all matters in dispute with respect to this
Section 2.7 (and only such matters) on a timely basis and promptly shall notify the Parties in
writing of its resolution. The Independent Accountants shall not have the power to modify or amend
any term or provision of this Agreement. Each Party shall bear and pay one-half of the fees and
other costs charged by the Independent Accountants.



ARTICLE III




REPRESENTATIONS AND WARRANTIES REGARDING SELLER




     Seller hereby represents and warrants to Buyer as of the date hereof that except as disclosed
in the Schedules:



     Section 3.1 Organization. Seller is a limited liability company duly formed, validly
existing and in good standing under the Laws of its jurisdiction of formation. Seller is duly
qualified or licensed to do business in each other jurisdiction where the actions to be performed
by it hereunder makes such qualification or licensing necessary, except in those jurisdictions
where the failure to be so qualified or licensed would not reasonably be expected to result in a
material adverse effect on Seller’s ability to perform such actions under this Agreement or the
Ancillary Agreements to which Seller is party.



     Section 3.2 Authority; Enforceability. Seller has all requisite limited liability
company power and authority to execute and deliver this Agreement and the Ancillary Agreements to
which Seller is a party, to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by Seller of this
Agreement and the Ancillary Agreements to which Seller is a party, and the performance by Seller of
its obligations hereunder and thereunder, have been duly and validly authorized by all necessary
limited liability company action. This Agreement has been duly and validly executed and delivered
by Seller and constitutes, and each Ancillary Agreement to which Seller is a party when executed
and delivered on the Closing Date will constitute, the legal, valid and binding obligation of
Seller enforceable against Seller in accordance with its terms, except as the same may be limited
by bankruptcy, insolvency, reorganization, fraudulent conveyance, arrangement, moratorium or other
similar Laws relating to or affecting the rights of creditors generally, or by general equitable
principles.



     Section 3.3 No Conflicts; Consents and Approvals. The execution and delivery by Seller
of this Agreement and the Ancillary Agreements to which Seller is a party do not, and the
performance by Seller of its obligations under this Agreement and the Ancillary Agreements to which
Seller is a party will not:



 









 





     (a) conflict with or result in a violation or breach of any of the terms, conditions or
provisions of the Organizational Documents of Seller;



     (b) assuming all of the Company Consents have been obtained, be in violation of or result in a
breach of or default (or give rise to any right of termination, cancellation or acceleration) under
(with or without the giving of notice, the lapse of time, or both) any material Contract to which
Seller is a party, except for any such violations or defaults (or rights of termination,
cancellation or acceleration) which would not, in the aggregate, reasonably be expected to result
in a material adverse effect on Seller’s ability to perform its obligations hereunder; and



     (c) assuming all required filings, waivers, approvals, consents, authorizations and notices
set forth on Schedule 3.3(c) (collectively, the “Seller Approvals”), Company Consents and other
notifications provided in the ordinary course of business have been made, obtained or given, (i)
conflict with, violate or breach any term or provision of any Law applicable to Seller, except as
would not reasonably be expected to result in a material adverse effect on Seller’s ability to
perform its obligations hereunder or (ii) require any consent or approval of any Governmental
Authority, or notice to, or declaration, filing or registration with, any Governmental Authority,
under any applicable Law, other than such consents, approvals, notices, declarations, filings or
registrations which, if not made or obtained, would not reasonably be expected to result in a
material adverse effect on Seller’s ability to perform its obligations hereunder.



     Section 3.4 Legal Proceedings. Seller has not been served with notice of any Claim, no
Claim is pending and to Seller’s Knowledge none is threatened against Seller, which seeks a writ,
judgment, order, injunction or decree restraining, enjoining or otherwise prohibiting or making
illegal any of the transactions contemplated by this Agreement.



     Section 3.5 Brokers. Seller has no liability or obligation to pay fees or commissions
to any broker, finder or agent with respect to the transactions contemplated by this Agreement for
which Buyer could become liable or obligated.



     Section 3.6 Capitalization. On the Closing Date, Seller will be the direct owner,
beneficially and of record, of all of the Project Company Interests, free and clear of all Liens.
There are not any options, warrants, calls, rights, commitments, rights of first refusal,
securities or agreements of any character to which Seller is bound obligating it or the Project
Company to issue, deliver, or sell, or cause to be issued, delivered or sold, additional Equity
Interests in the Project Company or obligating Seller or the Project Company to grant, extend or
enter into any such option, warrant, call, right, commitment, right of first refusal or agreement.
The Project Company Interests are duly authorized, validly issued, fully paid and non-assessable
and constitute all of the outstanding Equity Interests of the Project Company.



 









 





ARTICLE IV




REPRESENTATIONS AND WARRANTIES REGARDING




THE PROJECT COMPANY




     Seller hereby represents and warrants to Buyer as of the date hereof that except as disclosed
in the Schedules:



     Section 4.1 Organization. The Project Company is a limited liability company duly
formed, validly existing and in good standing under the Laws of its jurisdiction of formation, and
has all requisite limited liability company power and authority to conduct its business as it is
now being conducted and to own, lease and operate its Assets. The Project Company is duly qualified
or licensed to do business in each jurisdiction in which the ownership or operation of its Assets
make such qualification or licensing necessary, except in those jurisdictions where the failure to
be so duly qualified or licensed would not reasonably be expected to result in a Material Adverse
Effect.



     Section 4.2 No Conflicts; Consents and Approvals. The execution and delivery by Seller
of this Agreement and the Ancillary Agreements to which Seller is a party do not, the performance
by Seller of its obligations hereunder and thereunder do not and the consummation of the
transactions contemplated hereby and thereby and the taking of any action contemplated to be taken
by the Project Company hereunder or thereunder will not:



     (a) conflict with or result in a violation or breach of any of the terms, conditions or
provisions of the Organizational Documents of the Project Company;



     (b) assuming all of the consents set forth on Schedule 4.2 (the “Company Consents”) have been
obtained, be in material violation of or result in a material breach of or default (or give rise to
any material right of termination, cancellation or acceleration) under any Material Contract;



     (c) assuming the Seller Approvals, the Company Consents and other notifications provided in
the ordinary course of business have been made, obtained or given, (i) conflict with or result in a
violation or breach of any term or provision of any Law applicable to the Project Company or any of
its material Assets which would reasonably be expected to result in a Material Adverse Effect or
(ii) require the consent or approval of any Governmental Authority, or notice to, or declaration,
filing or registration with, any Governmental Authority, under any applicable Law, other than such
consents, approvals, notices, declarations, filings or registrations which, if not made or
obtained, would not reasonably be expected to result in a Material Adverse Effect; or



     (d) result in the imposition or creation of any Lien on any material Asset of the Project
Company, other than Permitted Liens, or on the Project Company Interests.



     Section 4.3 Capitalization. Schedule 4.3 accurately sets forth the ownership structure
of the Project Company as of the date hereof. As of the date hereof, Seller is the direct or
indirect owner, holder of record, and beneficial owner of the Project Company Interests free and
clear of all Liens, restrictions on transfer or other encumbrances other than (a) Permitted Liens,
(b) those arising pursuant to or described in this Agreement, the Organizational Documents of the
Project Company, or applicable securities Laws or (c) for Taxes not yet due or delinquent and,
without limiting the generality of the foregoing, none of the Project Company Interests are subject
to any voting trust, member or partnership agreement or voting agreement or other agreement, right,
instrument or understanding with respect to any purchase, sale, issuance, transfer, repurchase,
redemption or voting of any Equity Securities of the Project Company, other than the limited



 









 







liability company agreement of the Project Company. The Project Company Interests are duly
authorized, validly issued, fully paid and nonassessable and constitute all of the outstanding
equity interests of the Project Company. Except as set forth on Schedule 4.3, there are no
outstanding Equity Securities of the Project Company. Except as set forth on Schedule 4.3 or as
described in Section 6.21, the Project Company has not granted to any Person any agreement or
option, or any right or privilege capable of becoming an agreement or option, for the purchase,
subscription, allotment or issue of any unissued interests, units or other securities (including
convertible securities, warrants or convertible obligations of any nature) of the Project Company.



     Section 4.4 Business. Except as disclosed in Schedule 4.4 and except for the
Terminated Contracts, (a) the Business of the Project Company is the only business operation
currently carried on by the Project Company and (b) the Assets owned, leased, licensed or
contracted by the Project Company constitute the tangible Assets that are sufficient to operate the
Project as currently operated, except for matters that would not, in the aggregate, reasonably be
expected to result in a Material Adverse Effect.



     Section 4.5 Bank Accounts. Schedule 4.5 sets forth an accurate and complete list of
the names and locations of banks, trust companies and other financial institutions at which the
Project Company maintains accounts of any nature or safe deposit boxes and the names of all persons
authorized to draw thereon, make withdrawals therefrom or have access thereto.



     Section 4.6 Subsidiaries. The Project Company has no subsidiaries and does not own
Equity Securities in any Person.



     Section 4.7 Legal Proceedings. Except as set forth on Schedule 4.7, no Claim is
pending against, and to Seller’s Knowledge, none has been threatened against the Project Company
that (a) affects the Project Company or the Assets of the Project Company and would, in the
aggregate, reasonably be expected to result in a Material Adverse Effect or (b) seeks a writ,
judgment, order, injunction or decree restraining, enjoining or otherwise prohibiting or making
illegal any of the transactions contemplated by this Agreement.



     Section 4.8 Compliance with Laws and Orders. Except as set forth on Schedule 4.8, the
Project Company is in compliance with all Laws and orders applicable to it and its operations or
Assets except where any such failure to comply would not, in the aggregate, reasonably be expected
to result in a Material Adverse Effect.



     Section 4.9 Balance Sheets; No Undisclosed Liabilities. Seller has previously
delivered to Buyer an unaudited balance sheet of the Project Company as at December 31, 2005,
December 31, 2006 and March 31, 2007 (collectively, the “Balance Sheets”). Except as set forth on
Schedule 4.9, the Balance Sheets have been prepared in accordance with GAAP. The Balance Sheets may
not include all footnotes and disclosures required by GAAP. Except for (a) current liabilities
reflected in the Closing Date Net Working Capital, (b) liabilities which will not be payable by the
Project Company after the Closing, (c) liabilities in an aggregate amount up to 10% of the Base
Purchase Price with respect to which Seller, in its sole discretion, has indemnified Buyer, in form
and substance reasonably satisfactory to Buyer, without any effect on Buyer’s rights under Article
X, and (d) liabilities disclosed in Schedule 4.9, the Project



 









 







Company has no liability that would be required to be reflected on the Balance Sheet prepared
in accordance with GAAP which (x) are not reflected or reserved against in the Balance Sheet and
(y) is in excess of $500,000 individually or $5,000,000 in the aggregate. Notwithstanding anything
to the contrary contained herein, Buyer acknowledges and agrees that the consummation of the
transactions contemplated by the Mirant PSA may impact or result in changes to the Balance Sheets
and that Seller is not making any representations or warranties in this Agreement regarding any
such impacts or changes.



     Section 4.10 Absence of Certain Changes. Except as set forth on Schedule 4.10, from
March 31, 2007 to the date of this Agreement, the Project Company has operated in all material
respects in the ordinary course of business, consistent with past practices. From March 31, 2007 to
the date of this Agreement, there has not been any (a) Material Adverse Effect or (b) event or
condition that would reasonably be expected to prevent or delay Seller from consummating the
transactions contemplated by this Agreement.



     Section 4.11 Taxes. Except as set forth on Schedule 4.11, (a) all Tax returns that are
required to be filed on or before the Closing Date by the Project Company have been or will be duly
and timely filed, taking into account all permitted extensions, (b) all material Taxes of the
Project Company that are due and payable have been paid in full, (c) all material withholding Tax
requirements imposed on the Project Company have been satisfied in full, except for amounts that
are being contested in good faith, (d) the Project Company does not have in force any waiver of any
statute of limitations in respect of Taxes or any extension of time with respect to a Tax
assessment or deficiency, (e) there are no pending or active audits or legal proceedings involving
Tax matters or, to Seller’s Knowledge, threatened audits or proposed deficiencies or other claims
for material unpaid Taxes of the Project Company, (f) the Project Company is classified as an
entity disregarded as separate from its owner for federal income tax purposes and has been since
inception, (g) all deficiencies asserted or assessments made as a result of any examination of Tax
returns of the Project Company have been paid in full or are being timely and properly contested in
good faith, and (h) there are no Liens for Taxes (other than Permitted Liens) on any of the Assets
of the Project Company.



     Section 4.12 Regulatory Status. Except as set forth on Schedule 4.12, the Project
Company (i) is an “Exempt Wholesale Generator” within the meaning of the PUHCA of 2005; (ii) is
subject to regulation under the FPA as a “public utility”; (iii) has been authorized by FERC to
make sales of energy and capacity at market-based rates pursuant to Section 205 of the FPA; and
(iv) has been granted blanket authorization by FERC to issue securities and assume liabilities
pursuant to Section 204 of the FPA.



     Section 4.13 Contracts.



     (a) Excluding Contracts for which neither the Project Company nor any of the Assets of the
Project Company will be bound or have liability after Closing and Contracts which can be terminated
upon 30 days’ (or less) notice without material liability and without any material obligations
arising during such 30-day period, Schedule 4.13 sets forth a list as of the date of this Agreement
of the following Contracts to which the Project Company is a party or by which the



 









 







Assets of the Project Company may be bound (the Contracts listed on Schedule 4.13 that meet
the descriptions in this Section 4.13 being collectively, the “Material Contracts”):




     (i) Contracts for the future purchase, exchange or sale of natural gas, other than in
each case Contracts with a nominal value of less than $250,000 individually or $1,750,000 in
the aggregate;




     (ii) Contracts for the future purchase, exchange, transmission or sale of electric power
in any form, including energy, capacity or any ancillary services other than in each case
Contracts with a nominal value of less than $250,000 individually or $1,750,000 in the
aggregate;




     (iii) Contracts for the future transportation of natural gas other than Contracts with a
nominal value of less than $250,000 individually or $1,750,000 in the aggregate;




     (iv) interconnection Contracts;




     (v) other than Contracts of the nature addressed by Section 4.13(a)(i)-(iii), Contracts
(A) for the purchase or sale of any Asset or that grant a right or option to purchase or sell
any Asset, other than in each case Contracts relating to Assets or services with a nominal
value of less than $250,000 individually or $1,750,000 in the aggregate and (B) for the
provision or receipt of any services or that grant a right or option to provide or receive any
services, other than in each case Contracts relating to services with a nominal value of less
than $250,000 individually or $1,750,000 in the aggregate;




     (vi) Contracts under which it has created, incurred, assumed or guaranteed any
outstanding Indebtedness, or under which it has imposed a security interest on any of its
Assets, tangible or intangible, which security interest secures outstanding Indebtedness;




     (vii) outstanding agreements of guaranty, indemnity, surety or similar obligation, direct
or indirect, by the Project Company;




     (viii) other than Contracts of the nature addressed by Section 4.13(a)(i) — (iii),
Contracts with Seller or any of its Affiliates relating to the future provision of goods or
services;




     (ix) any collective bargaining Contracts or other employment Contracts;




     (x) outstanding futures, swap, collar, put, call, floor, cap, option or other Contracts
that are intended to benefit from or reduce or eliminate the risk of fluctuations in interest
rates or the price of commodities, including electric power, in any form, including energy,
capacity or any ancillary services, natural gas or securities, other than in each case
Contracts with a nominal value of less than $250,000 individually or $1,750,000 in the
aggregate;




     (xi) Contracts that limit the Project Company’s freedom to compete in any line of
business or in any geographic area;




     (xii) partnership, joint venture, or limited liability company agreements;



 









 






     (xiii) real property leases and any ground leases relating to the Property;




     (xiv) Contracts relating to any Equity Securities or other securities of the Project
Company or rights in connection therewith;




     (xv) Contracts with Governmental Authorities regarding Taxes or tax abatement and water
services; and




     (xvi) any other Contracts reasonably necessary for the Project Company to conduct its
Business with a total nominal value of greater than $250,000 individually or $1,750,000 in the
aggregate.



     (b) Seller has provided Buyer with, or access to, copies of all Material Contracts.



     (c) Each of the Material Contracts (other than any Material Contract which will terminate or
expire by its terms prior to Closing) is in full force and effect in all material respects and
constitutes a legal, valid and binding obligation of the Project Company party thereto and, to
Seller’s Knowledge, of the other parties thereto except in each case where the failure to be in
full force and effect or constitute a binding obligation would not reasonably be expected to result
in a Material Adverse Effect.



     (d) The Project Company is not in material breach or material default under any Material
Contract and to Seller’s Knowledge, no other party to any of the Material Contracts is in material
breach or material default thereunder.



     Section 4.14 Real Property. The Project Company owns or leases (and with respect to
each such (a) owned Property that is material to the Project Company, has good, valid and
marketable fee simple title to, or (b) lease that is material to the Project Company, has good and
valid leasehold title to) all material Property described in Schedule 4.14 as being owned or leased
by the Project Company, in each case, free and clear of all Liens (except for Permitted Liens). The
title insurance premium on the Title Policy has been paid and the Title Policy is in effect. The
Property and the Business comply with all applicable zoning, subdivision and land use Laws and
special use Permits, except where any such failure to comply would not, in the aggregate,
reasonably be expected to result in a Material Adverse Effect.



     Section 4.15 Permits.



     (a) Schedule 4.15(a) sets forth all Permits held by the Project Company that are required for
the ownership and operation of the Project by the Project Company in the manner in which they are
currently owned and operated, except where the absence of such Permit would not, in the aggregate,
reasonably be expected to result in a Material Adverse Effect. All Permits set forth on Schedule
4.15(a) are in full force and effect.



     (b) The Project Company is in compliance with all Permits set forth on Schedule 4.15(a),
except where any such failure to comply would not, in the aggregate, reasonably be expected to
result in a Material Adverse Effect, and the Project Company has not received any written
notification from any Governmental Authority alleging that it is in violation of any such Permits,



 









 







except where any such violations would not, in the aggregate, reasonably be expected to result
in a Material Adverse Effect.



     Section 4.16 Environmental Matters.



     (a) Seller has made available to Buyer copies of all material environmental site assessment
reports in the possession of Seller or the Project Company that are not subject to a claim of legal
privilege by Seller, Mirant, any Affiliate of Mirant or the Project Company and that relate to
environmental matters in connection with operation of the Project.



     (b) Except as would not reasonably be expected to have a Material Adverse Effect:




     (i) the Project Company has operated, since January 3, 2006, in compliance with all
applicable Environmental Laws;




     (ii) the Project Company has not been served with notice of any Environmental Claims,
actions, proceedings or investigations that are currently outstanding, and no Environmental
Claims are pending or, to Seller’s Knowledge, threatened, against the Project Company by any
Governmental Authority under any Environmental Laws;




     (iii) there is no site to which the Project Company has transported or arranged for the
transport of Hazardous Materials associated with the Project Company which, to Seller’s
Knowledge, is the subject of any environmental action that would result in an Environmental
Claim;




     (iv) there has been no Release of any Hazardous Material at or from the Project in
connection with construction of the Project or the Project Company’s operations at the Project
that would result in an Environmental Claim; and




     (v) Since May 1, 2007, the Project Company has not filed a notice with any Government
Authority of any Release of any Hazardous Material to the environment, other than those
Release notifications which are subject to and would be filed pursuant to any Permits held by
the Project Company.



     (c) Schedule 4.16(c) sets forth all emission reduction credits and emissions allowances that
have been allocated to the Project Company as of the date of this Agreement.



     Section 4.17 Intellectual Property.



     (a) The Project Company owns, or has the licenses or rights to use for its Business, all
material Intellectual Property currently used in its Business.



     (b) To Seller’s Knowledge, as of the date of this Agreement, the Project Company had not
received from any third party a claim in writing that the Project Company is infringing in any
material respect the Intellectual Property of such third party.



 









 





     Section 4.18 Brokers. The Project Company has no liability or obligation to pay fees
or commissions to any broker, finder or agent with respect to the transactions contemplated by this
Agreement.



     Section 4.19 Employees and Labor Matters. Except as described on Schedule 4.19:



     (a) the Project Company does not have, and on the Closing Date will not have, any employees;



     (b) the persons identified on Schedule 4.19(b) provide full-time on site services to the
Project Company and are employed by a third party vendor pursuant to an agreement with an Affiliate
of Seller (the “Employees”);



     (c) Schedule 4.19(c) lists each Contract between a third-party vendor and the Project Company,
Seller or any Affiliate of Seller pursuant to which employees of a third-party vendor provide
material on site employee services principally dedicated to the Project Company;



     (d) the persons identified with an asterisk by their name on Schedule 4.19(b) are represented
by a union or other collective bargaining entity (the “CBA Employees”);



     (e) there has not occurred, nor, to Seller’s Knowledge has there been threatened, a labor
strike, request for representation, organizing campaign, work stoppage, slowdown, or lockout or
other labor dispute by or involving any of the Employees with respect to the Project Company in the
past two years, except, with respect to any such events or occurrences arising after the date
hereof but on or prior to the Closing Date, as would not reasonably be expected to result in a
Material Adverse Effect;



     (f) To the Knowledge of Seller, neither Seller nor any of its Affiliates has received written
notice of any unfair labor practice charge against the Project Company or against Seller or any of
its Affiliates regarding practices/acts at the Project Company pending before the National Labor
Relations Board and neither Seller nor any of its Affiliates has received notice that any petition
respecting any Employees or former employees of Seller or its Affiliates who were principally
dedicated to the Project Company has been filed with the National Labor Relations Board, except for
such matters as, in each case, would not reasonably be expected to result in a Material Adverse
Effect;



     (g) neither Seller nor any of its Affiliates have received any notice with respect to the
Employees and former employees of Seller or its Affiliates who were principally dedicated to the
Project Company of any charges before any Governmental Authority responsible for the prevention of
unlawful employment practices and Seller and its Affiliates are in compliance with all applicable
Laws respecting employment practices, occupational health and safety, labor relations, terms and
conditions of employment and similar Laws with respect to the Employees and former employees of
Seller or its Affiliates who were principally dedicated to the Project Company, except, in each
case, where such notice or failure to comply would not reasonably be expected to result in a
Material Adverse Effect; and



 









 





     (h) neither Seller nor any of its Affiliates have received notice of any investigation related
to the Employees and former employees of Seller or its Affiliates who were principally dedicated to
the Project Company by a Governmental Authority responsible for the enforcement of labor or
employment Laws and regulations and, to Seller’s Knowledge, no such investigation is threatened,
except, with respect to any such notices received or investigation threatened after the date hereof
but on or prior to the Closing Date, as would not reasonably be expected to result in a Material
Adverse Effect.



     Section 4.20 Employee Benefits.



     (a) Schedule 4.20 contains a complete list of all Benefit Plans. Copies of all Benefit Plan
summary plan descriptions have been made available to Buyer for review. To the Knowledge of Seller,
each Benefit Plan has been administered in accordance with its terms and the Project Company has
met its obligations with respect to such Benefit Plan and has made all required contributions
thereto. To the Knowledge of Seller, the Project Company and all Benefit Plans are in compliance in
all material respects with the currently applicable provisions of ERISA and the Code.



     (b) The Project Company does not have, and on the Closing Date will not have, any liability
with respect to any “employee benefit plans” (as defined in Section 3(3) of ERISA).



     (c) All the Benefit Plans that are intended to be qualified under Section 401(a) of the Code
have received determination or opinion letters from the Internal Revenue Service to the effect that
such Benefit Plans are qualified and the plans and the trusts related thereto are exempt from
federal income taxes under Sections 401(a) and 501(a), respectively, of the Code; no such
determination or opinion letter has been revoked; and, to the Knowledge of Seller, (i) such
revocation has not been threatened and (ii) no act or omission has occurred, that would adversely
affect a Benefit Plan’s qualification.



     (d) Except as set forth in Schedule 4.20, there does not now exist, nor do any circumstances
exist that would result in, any Controlled Group Liability that would be a liability of Buyer
following the Closing. Without limiting the generality of the foregoing, neither Seller, nor the
Project Company nor any ERISA Affiliate has engaged in any transaction described in Section 4069 or
Section 4204 of ERISA.



     (e) To the Knowledge of Seller, no act or omission has occurred and no condition exists with
respect to any Benefit Plan that would subject the Project Company to any fine, penalty, tax or
liability of any kind imposed under ERISA or the Code, the imposition of which would reasonably be
expected to result in a Material Adverse Effect.



     (f) Except as set forth on Schedule 4.20, with respect to each Multiemployer Plan contributed
to by the Project Company or the ERISA Affiliates of the Project Company: (i) neither the Project
Company nor the ERISA Affiliates of the Project Company have incurred any Withdrawal Liability that
has not been satisfied in full; and (ii) neither of the Project Company nor ERISA Affiliates of the
Project Company has received any notification, nor has any reason to believe, that any such plan is
in reorganization, has been terminated, or may be reasonably expected to be in reorganization or to
be terminated.



 









 





     Section 4.21 May Balance Sheet. The unaudited balance sheet of the Project Company as
of May 1, 2007 (the “May Balance Sheet”) to be delivered by Seller to Buyer pursuant to Section
6.22 shall be prepared from the books and records of the Project Company and present fairly, in all
material respects, the financial condition of the Project Company as of the date thereof. The May
Balance Sheet shall be prepared in accordance with GAAP, subject to the absence of footnotes, cash
flow statements, income statements, changes in position and other presentation items required by
GAAP, and normal year-end adjustments.



ARTICLE V




REPRESENTATIONS AND WARRANTIES OF BUYER




     Buyer hereby represents and warrants to Seller that:



     Section 5.1 Organization. Buyer is a corporation duly formed, validly existing and in
good standing under the Laws of the State of Michigan. Buyer is duly qualified or licensed to do
business in each other jurisdiction where the actions to be performed by it hereunder makes such
qualification or licensing necessary, except in those jurisdictions where the failure to be so
qualified or licensed would not reasonably be expected to result in a material adverse effect on
its ability to perform such actions hereunder.



     Section 5.2 Authority; Enforceability. Buyer has all requisite corporate power and
authority to enter into this Agreement and the Ancillary Agreements to which Buyer is a party, to
perform its obligations hereunder and thereunder and to consummate the transactions contemplated
hereby and thereby. The execution and delivery by Buyer of this Agreement and the Ancillary
Agreements to which Buyer is a party and the performance by Buyer of its obligations under this
Agreement and the Ancillary Agreements to which Buyer is a party have been duly and validly
authorized by all necessary corporate action on behalf of Buyer. This Agreement has been duly and
validly executed and delivered by Buyer and constitutes, and each Ancillary Agreement to which the
Seller is a party when executed and delivered on the Closing Date will constitute, the legal, valid
and binding obligation of Buyer enforceable against Buyer in accordance with its terms except as
the same may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
arrangement, moratorium or other similar Laws relating to or affecting the rights of creditors
generally or by general equitable principles.



     Section 5.3 No Conflicts. The execution and delivery by Buyer of this Agreement and
the Ancillary Agreements to which Buyer is a party do not, and the performance by Buyer of its
obligations hereunder and thereunder and the consummation of the transactions contemplated hereby
and thereby will not:



     (a) conflict with or result in a violation or breach of any of the terms, conditions or
provisions of such Person’s Organizational Documents;



     (b) be in violation of or result in a breach of or default (or give rise to any right of
termination, cancellation or acceleration) under (with or without the giving of notice, lapse of
time, or both) any material Contract to which Buyer is a party, except for any such violations or
defaults (or rights of termination, cancellation or acceleration) which would not, in the
aggregate,



 









 







reasonably be expected to result in a material adverse effect on Buyer’s ability to perform
its obligations hereunder; or



     (c) assuming all required filings, waivers, approvals, consents, authorizations and notices
set forth in Schedule 5.3 (collectively, the “Buyer Approvals”) have been made, obtained or given,
(i) conflict with, violate or breach any term or provision of any Law applicable to Buyer or any of
its Assets which would reasonably be expected to result in a material adverse effect on Buyer’s
ability to perform its obligations hereunder or (ii) require any material consent or approval of
any Governmental Authority or notice to, or declaration, filing or registration with, any
Governmental Authority, under any applicable Law, other than such consents, approvals, notices,
declarations, filings or registrations which, if not made or obtained, would not reasonably be
expected to result in a material adverse effect on Buyer’s ability to perform its obligations
hereunder.



     Section 5.4 Legal Proceedings. Buyer has not been served with notice of any Claim, and
to Buyer’s knowledge, none is threatened, against Buyer which seeks a writ, judgment, order or
decree restraining, enjoining or otherwise prohibiting or making illegal any of the transactions
contemplated by this Agreement.



     Section 5.5 Compliance with Laws and Orders. Buyer is not in violation of or in
default under any Law or order applicable to Buyer or its Assets the effect of which, in the
aggregate, would reasonably be expected to hinder, prevent or delay Buyer from performing its
obligations hereunder.



     Section 5.6 Brokers. Buyer does not have any liability or obligation to pay fees or
commissions to any broker, finder or agent with respect to the transactions contemplated by this
Agreement for which Seller or the Project Company could become liable or obligated.



     Section 5.7 No Knowledge of Seller’s Breach. Neither Buyer nor any of its Affiliates
or Representatives has actual knowledge of any breach of any representation or warranty by Seller
or of any other condition or circumstance that would excuse Buyer from its timely performance of
its obligations hereunder. Buyer shall notify Seller as promptly as practicable if any such
information comes to its attention prior to Closing.



     Section 5.8 Financial Resources. Buyer has and will have available at the Closing
funds sufficient to pay the Purchase Price and the fees and expenses of Buyer related to the
transactions contemplated by this Agreement. Buyer knows of no circumstance or condition that could
be reasonably expected to prevent the availability at Closing of such cash.



     Section 5.9 No Conflicting Contracts. Except as set forth in Schedule 5.9, neither
Buyer nor any of its Affiliates is a party to any Contract to build, develop, acquire or operate
any power facility that would reasonably be expected to cause a delay in any Governmental
Authority’s granting of a Buyer Approval or a Seller Approval, and neither Buyer nor any of its
Affiliates has any plans to enter into any such Contract prior to the Closing Date.



     Section 5.10 Opportunity for Independent Investigation; No Other Representations.
Prior to its execution of this Agreement, Buyer has conducted to its satisfaction an independent



 









 







investigation and verification of the current condition and affairs of the Project Company,
the Assets of the Project Company and the Project, including the condition, the cash flow and the
prospects of the Project Company. In making its decision to execute this Agreement and to purchase
the Company Interests, Buyer has relied and will rely solely upon the results of such independent
investigation and verification and the terms and conditions of this Agreement. Buyer acknowledges
that: (a) it has had the opportunity to visit with Seller and meet with its Representatives to
discuss the Project Company and its condition, cash flows and prospects, (b) all materials and
information requested by Buyer have been provided to Buyer to Buyer’s reasonable satisfaction; and
(c) except as set forth in Article III and Article IV, none of Seller, the Project Company or any
Affiliate thereof makes any representation or warranty, express or implied, as to the Project
Company or the Assets of the Project Company.



ARTICLE VI




COVENANTS




     The Parties hereby covenant and agree as follows:



     Section 6.1 Regulatory and Other Approvals. From the date of this Agreement until
Closing (the “Interim Period”):



     (a) The Parties will, in order to consummate the transactions contemplated hereby, (i) take
all Reasonable Best Efforts necessary, and proceed diligently and in good faith and use all
Reasonable Best Efforts, as promptly as practicable to obtain the Seller Approvals, Company
Consents, the Acceptable Order and Buyer Approvals and to make all required filings required to be
made by it with, and to give all required notices to, Governmental Authorities, and (ii) provide
such other information and communications to such Governmental Authorities or other Persons as such
Governmental Authorities or other Persons may reasonably request in connection therewith.



     (b) The Parties will provide prompt notification to each other when any such approval referred
to in Section 6.1(a) is obtained, taken, made, given or denied, as applicable, and will advise each
other of any material communications with any Governmental Authority or other Person regarding any
of the transactions contemplated by this Agreement.



     (c) In furtherance of the foregoing covenants:




     (i) Each Party shall prepare, as soon as is practical following the execution of this
Agreement, all necessary filings in connection with the transactions contemplated by this
Agreement that may be required to be filed by such Party with the FERC or under the HSR Act or
any other federal, state or local Laws (excluding with respect to the MPSC filing, which is
provided for under clause (iv) below). Each Party shall submit such filings as soon as
practicable, but in no event later than (i) 45 days (subject to extension of such period upon
consent of the other party, which consent shall not be unreasonably withheld) after the
execution hereof for filings with the FERC, and (ii) 21 days after the execution hereof for
filings under the HSR Act or any FCC filings. The Parties shall promptly furnish each other
with copies of any notices, correspondence or other written communication from the



 









 







relevant Governmental Authority, shall promptly make any appropriate or necessary
subsequent or supplemental filings and shall cooperate in the preparation of such filings as
is reasonably necessary and appropriate. Each Party shall have the right to review in advance
all information related to Seller, the Project Company or Buyer, as applicable, and the
transactions contemplated by this Agreement with respect to any filing made by the other Party
in connection with the transactions contemplated by this Agreement.




     (ii) The Parties shall not, and shall cause their respective Affiliates not to, take any
action that is intended to adversely affect the approval of any Governmental Authority of any
of the filings referenced in clause (i).




     (iii) Buyer shall cooperate in good faith with all Governmental Authorities and shall
undertake Reasonable Best Efforts to complete promptly and lawfully the transactions
contemplated by this Agreement.




     (iv) Buyer shall prepare, as soon as is practical following the execution of this
Agreement, all necessary filings in connection with the transactions contemplated by this
Agreement that may be required to be filed by such Party with the MPSC. Buyer shall submit
such filings as soon as practicable, but in no event later than 45 days (subject to extension
of such period upon consent of the other party, which consent shall not be unreasonably
withheld) after the execution hereof for filings with the MPSC. Buyer shall promptly furnish
each other with copies of any notices, correspondence or other written communication from the
relevant Governmental Authority, shall promptly make any appropriate or necessary subsequent
or supplemental filings. Seller shall have the right to review in advance all information
related to Seller, the Project Company or Buyer and the transactions contemplated by this
Agreement with respect to any filing made by Buyer in connection with the transactions
contemplated by this Agreement. Buyer shall not, and shall cause its Affiliates not to, take
any action that is intended to adversely affect the approval of the MPSC of the filing
referenced in clause (iv).




     (v) Seller shall file with the appropriate Governmental Authority an application for the
transfer of the Wastewater Permit to Buyer.



     Section 6.2 Access of Buyer and Seller.



     (a) During the Interim Period, Seller will, and will cause the Project Company and its
Representatives to (i) provide Buyer and its Representatives with reasonable access, upon
reasonable prior notice and during normal business hours, to the Project Company and the officers
and employees of Seller and its Affiliates who have significant responsibility for the Project
Company, but only to the extent that such access does not unreasonably interfere with the business
of Seller or the Business and that such access is reasonably related to the requesting Party’s
obligations and rights hereunder, and subject to compliance with applicable Laws and any Contracts
or Permits to which Seller, the Project Company or any of their Affiliates is a party; provided,
however, that Seller shall have the right to (x) have a Representative present for any
communication with employees or officers of Seller or its Affiliates, (y) impose reasonable
restrictions and requirements for safety purposes and (z) restrict access to any privileged



 









 







information relating to any pending or threatened Claim, (ii) subject to the foregoing clause
(z), furnish Buyer, Buyer’s Representatives and Buyer’s prospective lenders and their
representatives (collectively, “Buyer’s Advisors”) with copies of all such contracts, books and
records, and other existing documents and data as Buyer may reasonably request, and (iii) furnish
Buyer and Buyer’s Advisors with such additional financial, operating, and other data and
information as Buyer may reasonably request.



     (b) Buyer agrees to indemnify and hold harmless Seller, its Affiliates and its Representatives
for any and all liabilities, losses, costs or expenses incurred by Seller, its Affiliates or its
Representatives to the extent arising out of the access rights under this Section 6.2, including
any Claims by any of Buyer’s Representatives for any injuries or property damage while present on
the Property.



     (c) From and after Closing, Buyer agrees to preserve and keep the books and records of the
Project Company (including all accounting records) for a period of seven (7) years from the
Closing, or for any longer periods as may be required by any Governmental Authority or ongoing
litigation. If Buyer wishes to destroy such records after such time period, it shall give 60 days’
prior written notice to Seller and Seller shall have the right at its option and expense, upon
prior written notice within such 60-day period, to take possession of the books and records within
90 days after the date of Buyer’s notice to Seller. From and after Closing, Buyer agrees, upon
reasonable prior notice from Seller, to provide to Seller and its Representatives access to or
copies of books and records of the Project Company to the extent relating to events that occurred
prior to Closing and to the extent needed for a legitimate business purpose.



     Section 6.3 Certain Restrictions.



     (a) Except as required or expressly permitted hereby, or as consented to by Buyer (which
consent shall not be unreasonably withheld, conditioned or delayed), or as otherwise set forth in
Schedule 6.3, during the Interim Period, Seller will (i) cause the Project Company to operate in
the ordinary course of business consistent with Prior Electrical Practices, (ii) use Reasonable
Best Efforts to preserve, maintain and protect in all material respects consistent with past
practices the Assets, rights, Properties and goodwill of the Project Company (including by using
Reasonable Best Efforts to maintain in all material respects the Project Company’s relationships
with customers, suppliers and Governmental Authorities), and (iii) use Reasonable Best Efforts to
maintain the Permits in accordance with past practices. Without limiting the foregoing, except (x)
as otherwise required or expressly permitted hereby or required by the terms of any Permit
identified on Schedule 4.15(a) or any Material Contract, (y) as set forth in Schedule 6.3 or (z) as
consented to by Buyer, which consent shall not be unreasonably withheld, conditioned or delayed
(except that this Section 6.3 shall not apply to Terminated Contracts or services terminated
pursuant to Section 6.6), during the Interim Period, Seller shall not, and shall cause the Project
Company not to, with respect to the Project Company or the Project:




     (i) (A) create any Lien (other than a Permitted Lien) against any of the Assets of the
Project Company, or (B) permit any Lien (other than a Permitted Lien or any Lien permitted
after the date hereof by the Project Company or any Affiliate of Seller the release



 









 







of which Seller is pursuing by commercially reasonable efforts) against any of the Assets
of the Project Company;




     (ii) except for any Contract entered into, terminated or amended in the ordinary course
of business consistent with past practices which will be fully performed prior to Closing,
including short-term hedges, (A) enter into any Material Contract or any other Contract
involving total consideration throughout its term in excess of $250,000 individually or
$1,750,000 in the aggregate for all such Contracts or (B) grant any waiver of any material
term under, or give any material consent with respect to, any Material Contract or any other
Contract which waivers involve total consideration throughout its term in excess of $250,000
individually or $1,750,000 in the aggregate for all such waivers;




     (iii) sell, transfer, remove, assign, convey, distribute or otherwise dispose of, or use,
other than in the ordinary course of business consistent with past practices, any material
Asset of the Project Company, including capital spares and other inventory;




     (iv) sell, transfer, assign or convey the emissions allowances or emission reduction
credits set forth on Schedule 4.16(c) or any emissions allowances or emission reduction
credits allocated to the Project Company after the date hereof; provided that nothing in this
clause (iv) shall restrict the use after the date hereof by the Project Company of any
emissions allowances or emission reduction credits;




     (v) other than accounts payable in the ordinary course of business, incur, create, assume
or otherwise become liable for Indebtedness or issue any debt securities or assume or
guarantee the obligations of any other Person;




     (vi) except as may be required to meet the requirements of applicable Law or GAAP, change
any accounting method or practice in a manner that is inconsistent with past practice in a way
that would materially and adversely affect the Business or the Project Company;




     (vii) fail to maintain its limited liability company existence merge or consolidate the
Project Company with any other Person or cause the Project Company to acquire all or
substantially all of the Assets of any other Person or take any other action that would cause
the Project Company to be treated as other than a disregarded entity or a partnership for
federal income tax purposes prior to the Closing;




     (viii) issue, reserve for issuance, pledge or otherwise encumber, sell or redeem or enter
into any Contract with respect to any limited liability company interests, or Equity
Securities of the Project Company;




     (ix) liquidate, dissolve, recapitalize, reorganize or otherwise wind up its business or
operations of the Project Company;




     (x) cause the Project Company to purchase any securities of any Person, except for
short-term investments made in the ordinary course of business consistent with past practices;




 












 






     (xi) amend or modify the Organizational Documents of the Project Company;




     (xii) cancel any Indebtedness or waive any claims or rights having a value in excess of
$500,000;




     (xiii) make any new, or change any existing, material election with respect to Taxes, or
settle any material Tax liability that would adversely affect Buyer or the Project Company
after the Closing;




     (xiv) incur any capital expenditure or major maintenance expenditure in excess of the
amounts set forth on the Budget, except for Agreed Capital Expenditures;




     (xv) settle any dispute or Claim or compromise or settle any material liability which
results in a material non-current liability becoming due from the Project Company after
Closing or restrictions or limitations that materially and adversely affect the Project
Company’s ability to conduct business after Closing;




     (xvi) except in the ordinary course of business consistent with past practices or as
otherwise required by the terms of any collective bargaining agreement, increase salaries or
aggregate benefits payable to the Employees;




     (xvii) fail to discharge any material liability of the Project Company or make any
material payment of the Project Company as it comes due except in connection with a good faith
dispute; or




     (xviii) agree or commit to do any of the foregoing.



     (b) Notwithstanding the foregoing, Seller may permit the Project Company to take commercially
reasonable actions with respect to emergency situations as reasonably determined by Seller so long
as Seller shall, upon receipt of notice of any such actions, promptly inform Buyer of any such
actions taken outside the ordinary course of business consistent with past practices.



     Section 6.4 Use of Certain Names.



     (a) Within 10 days following Closing, Buyer shall cause the Project Company to cease using the
name “LS Power” and any word or expression similar thereto or constituting an abbreviation or
extension thereof (the “Seller Marks”), including eliminating the Seller Marks from the Property
and Assets of the Project Company and disposing of any unused stationery and literature of the
Project Company bearing the Seller Marks, and thereafter, Buyer shall not, and shall cause the
Project Company and its Affiliates not to, use the Seller Marks or any logos, trademarks, trade
names, patents or other Intellectual Property rights belonging to Seller or any Affiliate thereof,
and Buyer acknowledges that it, its Affiliates and the Project Company have no rights whatsoever to
use such Intellectual Property. Without limiting the foregoing:




     (i) Within 3 Business Days after the Closing Date, Buyer shall cause the Project Company
whose name contains any of the Seller Marks to change its name to a name that does not contain
any of the Seller Marks.



 









 






     (ii) Within 30 days after the Closing Date, Buyer shall provide evidence to Seller, in a
format that is reasonably acceptable to Seller, that Buyer has made all filings with each
Governmental Authority to change names as required pursuant to clause (i) above and has
provided notice to all applicable Governmental Authorities and all counterparties to the
Material Contracts regarding the sale of the Project Company and the Assets of the Project
Company to Buyer and the new addresses for notice purposes.



     (b) Notwithstanding Buyer’s right to use the Seller Marks for the time periods set forth in
Section 6.4(a), Buyer acknowledges and agrees as follows: (i) neither Buyer nor any of its
Affiliates (including the Project Company after the Closing Date) shall be deemed an agent,
representative or joint venture partner of Seller; (ii) Seller shall retain sole and exclusive
ownership of the Seller Marks, and all goodwill and rights related thereto; (iii) all use of the
Seller Marks by Buyer and its Affiliates (including the Project Company after the Closing Date)
shall inure exclusively to the benefit of Seller; (iv) Buyer and its Affiliates (including the
Project Company after the Closing Date) shall take no action inconsistent with Seller’s rights, or
the rights of any of Seller’s Affiliates, with respect to the Seller Marks; (v) Buyer and its
Affiliates (including the Project Company after the Closing Date) shall maintain, or cause to be
maintained, the quality of the respective goods and services associated with the use of the Seller
Marks by Buyer or its Affiliates at substantially the same level maintained by Seller or its
respective Affiliates immediately prior to the Closing Date; (vi) Buyer and its Affiliates
(including the Project Company after the Closing Date) shall not engage in any conduct or take part
in any activity that would be reasonably likely to (A) impair the validity or enforceability of the
Seller Marks, (B) dilute the distinctiveness of the Seller Marks, (C) disparage the Seller Marks or
(D) be considered an infringement or other violation of the rights of Mirant, Seller or their
respective Affiliates in the Seller Marks; (vii) Buyer and its Affiliates (including the Project
Company after the Closing Date) shall not co-brand any of their goods or services (or
communications describing such goods or services) using any of the Seller Marks; and (viii)
notwithstanding anything to the contrary contained in Article X, and irrespective of such Article
X, Buyer shall indemnify, defend and hold harmless the Seller Indemnified Parties from, against,
and in respect of, any and all Losses incurred or suffered by Seller or Indemnified Party to the
extent arising out of or relating to any use of any of the Seller Marks by Buyer or any of its
Affiliates (including the Project Company after the Closing Date).



     Section 6.5 Termination of Certain Services and Contracts. Notwithstanding anything in
this Agreement to the contrary, at or prior to the Closing, Seller shall (a) terminate, sever, or
assign to Seller or an Affiliate thereof effective upon or before the Closing any services provided
to the Project Company by Seller or an Affiliate thereof, including the termination or severance of
insurance policies (including those policies referred to in Section 6.8), Tax services, legal
services and banking services (to include the severance of any centralized clearance accounts), (b)
terminate or assign to Seller or any Affiliate thereof each Contract listed on Schedule 6.5, and
(c) cause all Claims or obligations (contingent or otherwise) between the Project Company, on one
hand, and Seller or an Affiliate thereof, on the other, to be released effective immediately
prior to Closing (collectively such services, Contracts, claims or obligations, the
“Terminated Contracts”).



 









 





     Section 6.6 Employee and Benefit Matters



     (a) Buyer shall, within 45 days after the date hereof, offer employment on an unconditional
basis to all Non-CBA Employees on the terms described in Section 6.6(c), other than the Employees
who are on military leave or who as of the Closing have been, or are reasonably likely to be,
approved for long term disability benefits. From time to time prior to the Closing Date, Seller
shall use its commercially reasonable efforts to update Schedule 4.19(b) to (i) remove any
Employees who cease to provide full-time on site services to the Project Company specified on
Schedule 4.19(b) after the date hereof and (ii) add any person to fill a vacancy that begin
providing full-time on site services to the Project Company specified on Schedule 4.19(b) after the
date hereof.



     (b) Schedule 4.19 sets forth the collective bargaining agreement or agreements to which the
Project Company is a party or is subject (each, a “CBA” and collectively, the “CBAs”). From and
after the Closing Date, Buyer agrees to cause the Project Company to fulfill all of the Project
Company’s obligations under the CBA, including, without limitation, (i) offering employment to all
CBA Employees and (ii) treating all CBA Employees in accordance with the terms of such CBA through
the expiration date or earlier permitted termination of the CBA. Except for the obligation to make
contributions to a Multiemployer Plan in accordance with the CBA, Buyer and its Affiliates shall
not assume sponsorship of or any obligation under any Benefit Plans, but instead shall establish
their own benefit plans or otherwise contribute to appropriate benefit plans in order to comply
with the terms of the CBA.



     (c) Immediately following the Closing Date and for a period of at least two (2) years from the
Mirant Closing, each Non-CBA Employee who accepts Buyer’s offer of employment (each, a “Transferred
Employee”) shall be paid an annual rate of salary or an hourly wage and a bonus that is the same or
greater than that being paid to such Transferred Employee immediately before the Closing, shall
have the same (or better) terms and conditions of employment, including, but not limited to
vacation and paid time-off policies, as in effect on the Closing Date and shall immediately
participate in employee benefit plans of the Buyer that are equivalent in the aggregate to the
employee benefit plans covering such Transferred Employee immediately before the Closing.



     (d) Without limiting the generality of Section 6.6(a), Buyer agrees that (i) Buyer will cause
its benefit plans to recognize all previous service principally dedicated to the Project Company
for the purpose of determining eligibility for and entitlement to benefits, including vesting and
benefit accrual; (ii) Buyer will cause one or more group health plans offered to Transferred
Employees to recognize all deductibles and coinsurance payments accrued by the Transferred
Employees prior to the Closing Date and to waive any preexisting condition limitations, actively at
work exclusions and waiting periods for the Transferred Employees; (iii) for the remainder of the
calendar year in which the Mirant Closing occurs and for the two (2) succeeding years, the vacation
and paid time-off offered to the Transferred Employees shall be equal to or greater than the
vacation and paid time-off offered to such Transferred Employees on the Closing Date; (iv) Buyer
shall maintain for at least two (2) years starting on the Mirant Closing the same or better
severance arrangements applicable to the Transferred Employees that were in effect on the
Closing Date; and (v) after the second anniversary of the Mirant Closing, subject to applicable



 









 




Law, Buyer shall provide the Transferred Employees with base salary and overall benefits
(including retiree benefits) that are no less favorable, in the aggregate, than those then provided
to similarly-situated employees of Buyer.




     (e) Buyer shall take the necessary action to cause Buyer’s defined contribution plan or plans
to accept the rollovers of any “eligible rollover distributions” (as defined in the Code) of
Transferred Employees from any qualified plans in which Transferred Employees are participating
immediately prior to Closing.



     (f) Buyer assumes no liability with respect to, and receives no right or interest in, any
Benefit Plan. At the close of business on the Closing Date, all Employees shall cease participation
in all Benefit Plans, except with respect to benefits accrued as of, or claims incurred on or prior
to, the Closing Date, and except that each Employee who is on long-term disability leave
immediately prior to the Closing shall continue to be covered by the long-term disability plan
maintained for the benefit of such Employee as of the Closing Date for such covered disability.



     (g) All Employees shall become vested in their benefits accrued in any Benefit Plan as of the
Closing Date in accordance with the terms of such Benefit Plan.



     (h) Buyer shall be a “successor employer” (as described in the regulations under Section 4980B
of the Code) for purposes of providing continuation group health plan coverage as required under
Section 4980B of the Code (“COBRA Continuation Coverage”) and shall provide COBRA Continuation
Coverage for the Employees and their “qualified beneficiaries” (as defined in Section 4980B of the
Code) with respect to “qualifying events” (as defined in Section 4980B of the Code) that occur on,
prior to, or after the Closing Date.



     (i) Within a reasonable time prior to Closing, Seller shall provide Buyer with such pertinent
data or information as Buyer shall reasonably require to determine each Employee’s service,
compensation or any other information related to benefits necessary to implement the requirements
of this Section 6.6 on the Closing Date. To the extent the consent of an Employee is required in
order for Seller to deliver any such pertinent data, records or information to Buyer, Seller agrees
to use its commercially reasonable efforts to secure such consent.



     (j) Buyer shall have the right to use a third party vendor to hire Employees and to perform
certain actions on behalf of Buyer under this Section 6.6, but no such use or designation shall
release Buyer from its obligations hereunder.



     Section 6.7 Indebtedness. Notwithstanding anything in this Agreement to the contrary,
prior to or at the Closing, Seller shall cause any and all Indebtedness of the Project Company to
be paid in full and any and all Liens (other than (i) Permitted Liens, except for those Permitted
Liens securing any Indebtedness existing prior to Closing, and (ii) Liens created by or at the
behest of Buyer) securing any such Indebtedness to be released such that Buyer shall acquire the
Project Company free of any such Indebtedness or any such Liens.



     Section 6.8 Insurance. Seller shall maintain or cause to be maintained in full force
and effect the material insurance policies covering the Assets of the Project Company until the



 









 







Closing or shall replace them with reasonably comparable policies. All such insurance coverage
shall be terminated as of the Closing. Buyer shall be solely responsible for providing insurance to
the Project Company for any event or occurrence that occurs after the Closing. Without limiting the
rights of Buyer set forth elsewhere in this Agreement, for a period of two years after the Closing
Date, if any claims may reasonably be made, or Losses occur prior to the Closing Date, that relate
to the Project Company, the Assets of the Project Company, the Project or the Business, and such
claims, or the claims associated with such Losses, may be made against third-party insurance
policies retained by Seller or its Affiliates (and specifically not any self-insurance), then
Seller (on behalf of itself and its Affiliates) shall, at Buyer’s request and at Buyer’s sole cost
and expense (which costs and expenses shall be reimbursed to Seller, as incurred), use its
commercially reasonable efforts in an effort to permit after the Closing Date Buyer in cooperation
with Seller to file, notice and otherwise continue to pursue such claims and recover proceeds under
the terms of such policies (but only to the extent the terms and conditions of such policies
reasonably would provide coverage for such claims, or the claims associated with such Losses and it
would not materially interfere with or materially prejudice Seller’s or its Affiliates’
relationships with their insurance carriers), and, subject to all of the foregoing, Seller (on
behalf of itself and its Affiliates) agrees (at Buyer’s sole cost and expense) to otherwise
reasonably cooperate with Buyer or its Affiliates to make the benefits of any such third-party
insurance policies available to Buyer or its Affiliates.



     Section 6.9 Transfer Taxes. Notwithstanding anything in this Agreement to the
contrary, subject to Section 11.3, Buyer and Seller each shall pay 50% of any Transfer Taxes
imposed on Buyer, Seller or the Project Company by Law as a result of the sale of the Company
Interests. Accordingly, if either Buyer or Seller (or their respective Affiliates) is required at
Law to pay more than its share of any such Transfer Taxes, the other such Party shall promptly
reimburse such first Party for such amounts. Seller and Buyer shall timely file their own Transfer
Tax returns as required by Law and shall notify the other Party when such filings have been made.
Seller and Buyer shall cooperate and consult with each other prior to filing such Transfer Tax
returns to ensure that all such returns are filed in a consistent manner. Notwithstanding the
foregoing, Buyer shall be solely responsible for any Transfer Taxes arising from any action to
dissolve, terminate or restructure the Project Company or to convey, distribute or transfer any
assets, properties or other rights by deed, bill of sale or otherwise to or from the Project
Company in each case after the Closing.



     Section 6.10 Books and Records. Seller shall deliver the books and records of the
Project Company in Seller’s possession (including those set forth on Schedule 6.10) to Buyer as
promptly as practicable following the Closing Date if such books and records are not present at the
Project Company on the Closing Date (it being agreed that Seller may retain a copy thereof).



     Section 6.11 Tax Matters. Except as provided in Section 6.9 relating to Transfer
Taxes:



     (a) With respect to any Tax return covering a taxable period ending on or before the Closing
Date (a “Pre-Closing Taxable Period”) that is required to be filed after the Closing Date with
respect to the Project Company, (i) Seller shall cause such Tax return to be prepared in a manner
consistent with practices followed in prior taxable periods and in compliance with applicable
Law except as required by change in Law or fact and shall deliver such Tax return as so prepared



 









 







to Buyer not later than 15 days prior to the due date (including extensions) for filing such
Tax return for Buyer’s review and comments, (ii) Seller shall cooperate and consult with Buyer to
finalize such Tax return, and (iii) thereafter, subject to Seller’s payment to Buyer of such Tax in
compliance with Section 6.11(b), Buyer shall cause such Tax return to be executed and duly and
timely filed with the appropriate Taxing Authority and shall pay all Taxes shown as due and payable
on such Tax return. With respect to any Tax return covering a taxable period beginning on or before
the Closing Date and ending after the Closing Date (a “Straddle Taxable Period”) that is required
to be filed after the Closing Date with respect to the Project Company, (x) Buyer shall cause such
Tax return to be prepared (in a manner consistent with practices followed in prior taxable periods
except as required by Law or fact) and shall deliver a draft of such Tax return to Seller for
Seller’s review and approval at least 15 days prior to the due date (including extensions) for
filing such Tax return, (y) Seller and Buyer shall cooperate and consult with each other in order
to finalize such Tax return, and (z) thereafter, subject to Seller’s payment to Buyer of any
portion of such Tax in compliance with Section 6.11(b), Buyer shall cause such Tax return to be
executed and duly and timely filed with the appropriate Taxing Authority and shall pay all Taxes
shown as due and payable on such Tax return.



     (b) Seller shall be responsible for and indemnify the Buyer Indemnified Parties against, and
Seller shall be entitled to all refunds or credits of, any Tax with respect to the Project Company
that is attributable to a Pre-Closing Taxable Period or to that portion of a Straddle Taxable
Period that ends on the Closing Date. Within 5 days prior to the due date for the payment of any
such Tax, Seller shall pay to Buyer the amount of such Taxes, less any prepaid Taxes. With respect
to a Straddle Taxable Period, Seller and Buyer shall determine the Tax attributable to the portion
of the Straddle Taxable Period that ends on the Closing Date by an interim closing of the books of
the Project Company as of the Closing Date, except for ad valorem, industrial facilities or
property Taxes (“Property Taxes”) and franchise Taxes based solely on capital which shall be
prorated on a daily basis to the Closing Date. For this purpose, any franchise Tax paid or payable
with respect to the Project Company shall be allocated to the taxable period for which payment of
the Tax provides the right to engage in business, regardless of the taxable period during which the
income, operations, assets or capital comprising the base of such Tax is measured. In determining
whether a Property Tax is attributable to a Pre-Closing Taxable Period or a Straddle Taxable
Period, any Property Tax that is based on the assessed value of any assets, property or other
rights as of any lien date or other specified valuation date shall be deemed a Property Tax
attributable to the taxable period (whether a fiscal year or other tax year) specified on the
relevant Property Tax bill that is issued with respect to that lien date or other valuation date.



     (c) Buyer shall be responsible for and indemnify Seller against, and Buyer shall be entitled
to all refunds and credits of, all Taxes of the Project Company that are attributable to a taxable
period (or portion thereof) beginning after the Closing Date.



     (d) With respect to any Tax for which Seller is responsible, Seller shall have the right, at
its sole cost and expense, to control (in the case of a Pre-Closing Taxable Period) or participate
in (in the case of a Straddle Taxable Period) the prosecution, settlement or compromise of any
proceeding involving such Tax, including the determination of the value of property for
purposes of real and personal property ad valorem Taxes. Buyer shall (and shall cause the Project



 









 







Company to) take such action in connection with any such proceeding as Seller shall reasonably
request from time to time to implement the preceding sentence, including the selection of counsel
and experts and the execution of powers of attorney. Notwithstanding the foregoing, Buyer shall be
entitled to participate in any proceeding involving a Pre-Closing Taxable Period, and Seller shall
not settle any proceeding with respect to any issue that could materially and adversely affect
Buyer or the Project Company in a taxable period (or portion thereof) beginning after the Closing
Date without Buyer’s prior written consent, not to be unreasonably withheld. Buyer shall (and shall
cause the Project Company to) give written notice to Seller of its receipt of any notice of any
audit, examination, claim or assessment for any Tax for which Seller is responsible within 20 days
after its receipt of such notice; failure to give any such written notice within such 20-day period
shall limit Seller’s indemnification obligation pursuant to this Agreement to the extent Seller is
actually prejudiced by such failure.



     (e) Seller shall grant to Buyer (or its designees) access at all reasonable times to all of
the information, books and records relating to the Project Company within the possession of Seller
(including workpapers and correspondence with Taxing Authorities), and shall afford Buyer (or its
designees) the right (at Buyer’s expense) to take extracts therefrom and to make copies thereof, to
the extent reasonably necessary to permit Buyer (or its designees) to prepare Tax returns, respond
to Tax audits and investigations, prosecute Tax protests, appeals and refund claims and to conduct
negotiations with Taxing Authorities. Buyer shall grant or cause the Project Company to grant to
Seller (or its designees) access at all reasonable times to all of the information, books and
records relating to the Project Company for Pre-Closing Taxable Periods or Straddle Taxable Periods
within the possession of Buyer (including workpapers and correspondence with Taxing Authorities)
and to any employees of the Project Company, and shall afford Seller (or its designees) the right
(at Seller’s expense) to take extracts therefrom and to make copies thereof, in each case to the
extent reasonably necessary to permit Seller (or its designees) to prepare Tax returns, respond to
Tax audits and investigations, prosecute Tax protests, appeals and refund claims and to conduct
negotiations with Taxing Authorities. After the Closing Date, Seller and Buyer will preserve all
information, records or documents in their respective possessions relating to liabilities for Taxes
of the Project Company for Pre-Closing Taxable Periods or Straddle Taxable Periods until the later
of (i) seven years or (ii) six months after the expiration of any applicable statute of limitations
(including extensions thereof) with respect to the assessment of such Taxes; provided, that neither
Party shall dispose of any of the foregoing items without first offering such items to the other
Party.



     (f) If after the Closing Buyer or the Project Company receives a refund or utilizes a credit
of any Tax of the Project Company attributable to a Pre-Closing Taxable Period or that portion of a
Straddle Taxable Period ending on the Closing Date, Buyer shall pay to Seller within 10 Business
Days after such receipt or utilization an amount equal to such refund received or credit utilized,
together with any interest received or credited thereon net of any costs associated therewith.
Buyer shall, and shall cause the Project Company to, use commercially reasonable efforts to obtain
a refund or credit of any Tax of the Project Company attributable to a Pre-Closing Taxable Period
or that portion of a Straddle Taxable Period ending on the Closing Date or to mitigate, reduce or
eliminate any such Tax that could be imposed for a Pre-Closing Taxable



 









 







Period or that portion of a Straddle Taxable Period ending on the Closing Date (including with
respect to the transactions contemplated hereby).



     (g) To the extent that the provisions of Article X are inconsistent with or conflict with the
provisions of this Section 6.11, the provisions of this Section 6.11 shall control, unless such
provision in Article X expressly refers to Section 6.11, in which case such provision in Article X
shall apply.



     Section 6.12 Schedule Update. From time to time prior to the Closing Date, Seller may
at its option supplement or amend and deliver updates to the Schedules (each a “Schedule Update”)
that are necessary to complete or correct any information in such Schedules or in any
representation or warranty of Seller that has been rendered inaccurate since the date of this
Agreement. If (a) Buyer has the right to terminate the Agreement pursuant to Section 9.1(c) and
does not exercise such right as a result of such Schedule Update within 10 days and (b) the
Schedule Update pursuant to this Section 6.12 relates to events occurring or conditions arising
after the date of this Agreement, then such Schedule Update shall be deemed to have amended the
appropriate Schedule or Schedules as of the date of this Agreement, to have qualified the
representations and warranties contained in Article III and IV as of the date of this Agreement,
and to have cured any misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of the existence of such matter. If Seller delivers a Schedule Update that
discloses matters that result in a breach of a representation or warranty of Seller in this
Agreement that materially and adversely affects the business, financial condition or results of
operations of the Project Company, then such Schedule Update shall be deemed to have amended the
appropriate Schedule or Schedules as of the date of this Agreement, to have qualified the
representations and warranties contained in Article III and IV as of the date of this Agreement,
and to have cured any misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of the existence of such matter; provided, however, that such
Schedule Update shall not be deemed to have amended the appropriate Schedule or Schedules as of the
date of this Agreement for the purposes Article X and Seller shall indemnify Buyer for Losses
arising from such breach without application of the limitations set forth on Section 10.2(c). For
the avoidance of doubt, if Seller delivers a Schedule Update that discloses matters that do not
result in a breach of a representation or warranty of Seller in this Agreement that materially and
adversely affects the business, financial condition or results of operations of the Project
Company, then such Schedule Update shall be deemed to have amended the appropriate Schedule or
Schedules as of the date of this Agreement, to have qualified the representations and warranties
contained in Article III and IV as of the date of this Agreement, and to have cured any
misrepresentation or breach of warranty that otherwise might have existed hereunder by reason of
the existence of such matter. Any Schedule Updates delivered pursuant to this Section 6.12 that
relate to events occurring or conditions existing on or prior to the date of this Agreement shall
not qualify the representations and warranties, or cure any misrepresentation or breach of warranty
hereunder.



     Section 6.13 Casualty. If any Asset of the Project Company is damaged or destroyed by
casualty loss after the date hereof and prior to the Closing (a “Casualty Loss”), and (a) the cost
of restoring such damaged or destroyed Asset to a condition reasonably comparable to its prior



 









 







condition and (b) the amount of any lost profits reasonably expected to accrue after Closing
as a result of such Casualty Loss to such Asset (net of and after giving effect to any insurance
proceeds available to the Project Company for such restoration and lost profits and any tax
benefits related thereto) (such costs and lost profits with respect to any Asset of the Project
Company, the “Restoration Cost”) is greater than $2,500,000 but does not exceed 10% of the Base
Purchase Price, Seller may elect to reduce the amount of the Purchase Price by the estimated
Restoration Cost (as estimated by a qualified firm reasonably acceptable to Buyer and Seller and
selected by Buyer and Seller in good faith and promptly after the date of the event giving rise to
the Casualty Loss), by notice to Buyer, and such Casualty Loss shall not affect the Closing. If
Seller does not make any such election within 60 days after the date of such Casualty Loss, Buyer
may elect to terminate this Agreement within 10 Business Days after the end of such 60 day period
by written notice to Seller. If the Restoration Cost is in excess of 10% of the Base Purchase
Price, Seller may, by notice to Buyer within 60 days after the date of such Casualty Loss, elect to
(m) reduce the Purchase Price by the estimated Restoration Cost (as estimated by a qualified firm
reasonably acceptable to Buyer and Seller and selected by Buyer and Seller in good faith and
promptly after the date of the event giving rise to the Casualty Loss), or (n) terminate this
Agreement, in each case by providing written notice to Buyer. If Seller does not make any such
election within 60 days after the date of such Casualty Loss, Buyer may elect to terminate this
Agreement within 10 Business Days after the end of such 60 day period by written notice to Seller.
If the Restoration Cost is $2,500,000 or less, (x) neither Buyer nor Seller shall have the right or
option to terminate this Agreement and (y) there shall be no reduction in the amount of the
Purchase Price. To the extent Seller elects to reduce the amount of the Purchase Price by the
estimated Restoration Cost pursuant to this Section 6.13, Buyer will, at Seller’s election, (i)
assign to Seller any rights to any contribution available under any long term service agreement and
any rights to insurance claims or recoveries available under insurance policies covering the
Project or the Project Company or its properties or assets, or (ii) at Seller’s sole cost and
expense, use commercially reasonable efforts to pursue such available contribution on Seller’s
behalf for the benefit of Seller.



     Section 6.14 Condemnation. If any Asset of the Project Company is taken by
condemnation after the date hereof and prior to the Closing and such Asset has the sum of (a) a
condemnation value and (b) to the extent not included in preceding clause (a), the amount of any
lost profits reasonably expected to accrue after Closing as a result of such condemnation of such
Asset (net of and after giving effect to any condemnation award any tax benefits related thereto)
(such sum with respect to any such Asset, the “Condemnation Value”) is greater than $2,500,000 but
does not have a Condemnation Value (as determined by a qualified firm reasonably acceptable to
Buyer and Seller and selected by Buyer and Seller in good faith and promptly after the date of the
event giving rise to the Casualty Loss) in excess of 10% of the Base Purchase Price, Seller may
elect to reduce the Purchase Price by such Condemnation Value (less the amount of any condemnation
award and tax benefits related thereto) by notice to Buyer, and such condemnation shall not affect
the Closing. If Seller does not make such an election within 60 days after the date of such
condemnation, Buyer may elect to terminate this Agreement within 10 Business Days after such 60-day
period by written notice to Seller. If the Condemnation Value is in excess of 10% of the Base
Purchase Price, Seller may, by notice to Buyer within 60 days after the award of condemnation
proceeds, elect to (m) reduce the Purchase Price by such Condemnation Value



 









 




(after giving effect to any condemnation award available and tax benefits related thereto) or
(n) terminate this Agreement, in each case by providing written notice to Buyer; provided, however,
that if Seller does not make such an election, then Buyer may, by written notice to Seller,
terminate this Agreement within 10 Business Days of receipt by Buyer of Seller’s notice regarding
its election. If the Condemnation Value is $2,500,000 or less, (x) neither Buyer nor Seller shall
have the right or option to terminate this Agreement and (y) the Purchase Price shall be reduced by
the amount of any condemnation award received by Seller, net of any taxes paid thereon.




     Section 6.15 Confidentiality.



     (a) Any information or materials furnished by Seller to Buyer on and after the date of this
Agreement shall be subject to the Confidentiality Agreement; provided that Buyer shall not have any
obligation to maintain the confidentiality of information with respect to the Project Company from
and after the Closing. In the event of any conflict between this Agreement and the Confidentiality
Agreement, the Confidentiality Agreement shall prevail.



     (b) Upon the other Party’s prior written approval (which shall not be unreasonably withheld),
Buyer may provide confidential information to any Governmental Authority with jurisdiction as
necessary to comply with Section 6.1. To the extent permitted by Law, the Buyer shall seek
confidential treatment for such confidential information provided to any Governmental Authority and
Buyer shall notify Seller as far in advance as is practicable of its intention to release to any
Governmental Authority any such confidential information.



     (c) The obligations of the Buyer in this Section 6.15 will survive the termination of this
Agreement, the discharge of all other obligations owed by the Parties to each other, any transfer
of the Company Interests and the Closing of the transactions contemplated in this Agreement.



     Section 6.16 Public Announcements. Subject to a Party’s reasonable judgment that it is
otherwise required by Law or by the rules of a national securities exchange to make such
disclosure, such Party shall, and shall cause its Affiliates (as applicable), to (a) consult with
the other Party regarding the timing and content of all announcements regarding this Agreement, the
Closing and the other transactions contemplated by this Agreement to the financial community, any
Governmental Authority, customers, suppliers or the general public and (b) use its reasonable best
efforts to agree upon the text of any such announcement with the other Party prior to its release.



     Section 6.17 Release of Guaranties, etc. With respect to each guaranty, letter of
credit, indemnity, performance or surety bond or similar credit support arrangement issued by or
for the account of Seller or any of its respective Affiliates in relation to the Business shown on
Schedule 6.17 and any other such guaranty, letter of credit, indemnity, performance or surety bond
or similar credit support arrangement involving obligations of Seller or any of its respective
Affiliates in the aggregate of not more than $1 million (collectively, the “Support Obligations”),
Buyer shall obtain, prior to the Closing, substitute credit support arrangements in replacement for
the Support Obligations, and shall procure that Seller and its Affiliates, and, where applicable,
its sureties or letter of credit issuers, be fully released from its respective obligations under
the



 









 







Support Obligations, in form and substance reasonably satisfactory to Seller. Seller will
cooperate reasonably with Buyer with respect to the foregoing.



     Section 6.18 Distributions. Notwithstanding anything herein to the contrary, the
parties agree that Seller shall have the right, at or prior to the Closing, to cause the Project
Company to distribute all of the cash and accounts receivable held by the Project Company to Seller
or its Affiliates. No adjustment shall be made to the Base Purchase Price as a result of any such
distributions.



     Section 6.19 Further Assurances. Subject to the terms and conditions of this
Agreement, at any time or from time to time after the Closing, at any Party’s request and without
further consideration, the other Party shall execute and deliver to such Party such other
instruments of sale, transfer, conveyance, assignment and confirmation, provide such materials and
information and take such other actions as such Party may reasonably request in order to consummate
the transactions contemplated by this Agreement.



     Section 6.20 Monthly Operating Report. During the Interim Period, Seller will,
promptly after its preparation, cause the Project Company to provide Buyer with the monthly
operating report with respect to the Project Company prepared in the ordinary course of business.



     Section 6.21 Creditworthiness of Seller.



     (a) Seller’s Net Worth shall be at least (i) $250 million during the two-year period ended on
the second anniversary of the Closing and (ii) $150 million during the three-year period ended on
the fifth anniversary of the Closing. Until the fifth anniversary of the Closing, Seller will
provide to Buyer and its Representatives the same financial information (in terms of timing and
content) that it provides to its lenders pursuant to Section 7.1 of the Seller Credit Agreement as
in effect on the date hereof (or substantially similar information pursuant to any successor
financing arrangements of Seller and its Affiliates). Seller shall further deliver a certificate of
an officer of Seller certifying that Seller’s Net Worth is in compliance with the terms of this
Agreement (i) no later than five (5) Business Days following delivery of year-end financial
statements that Seller provides to its lenders pursuant to Section 7.1 of the Seller Credit
Agreement as in effect on the date hereof (or substantially similar information pursuant to any
successor financing arrangements of Seller and its Affiliates) and (ii) promptly following (A) the
consummation of any transaction involving the disposition of assets of Seller for consideration in
excess of $30 million, (B) the execution of any successor credit agreement in connection with the
refinancing of amounts owed under the Seller Credit Agreement, (C) the consummation of any
transaction involving the disposition of more than 50% of the voting securities or ownership
interests of Seller, by Contract or otherwise, to any Person, including any Affiliate of Seller and
(D) any event in the business of the Seller that in the aggregate negatively impacts Seller’s Net
Worth by more than $30 million.



     (b) “Seller’s Net Worth” shall mean, as of any given date, the sum of (i) the greater of (A)
the sum of Seller’s net book equity value plus accumulated depreciation (in each case on a
consolidated basis in accordance with GAAP) and (B) 80% of the difference between the appraised
value of Seller’s assets as determined by an appraisal or investment banking firm of



 









 







national standing minus the net outstanding debt of Seller, plus (ii) the sum of (A) the face
amount of any guarantees in favor of Buyer provided by LS Power Equity Partners, L.P. or LS Power
Equity Partners II, L.P. guaranteeing the obligations of Seller hereunder, (B) the face amount of
any guarantees in favor of Buyer provided by entities with outstanding debt with a credit rating of
B+ or B1 or better guaranteeing the obligations of Seller hereunder, (C) the amount of cash held in
escrow guaranteeing the obligations of Seller hereunder, (D) the face values of any letters of
credit issued in favor of Buyer to secure the obligations of Seller hereunder and (E) other
guarantees or credit support amounts as reasonably agreed to by Buyer and Seller.



     Section 6.22 Balance Sheet; Financial Statements. Seller shall use its Reasonable Best
Efforts to deliver to Buyer the May Balance Sheet by December 31, 2007, but in any event no later
than five (5) Business Days following delivery of the May Balance Sheet to the lenders pursuant to
the Seller Credit Agreement or any successor financing arrangements of Seller and its Affiliates.
During the Interim Period, Sellers shall deliver to Buyer true and correct copies of financial
statements of the Project Company no later than five (5) Business Days following delivery of
financial statements to the lenders pursuant to the Seller Credit Agreement or any successor
financing arrangements of Seller and its Affiliates.



ARTICLE VII




BUYER’S CONDITIONS TO CLOSING




     The obligation of Buyer to consummate the Closing is subject to the fulfillment of each of the
following conditions (except to the extent waived in writing by Buyer):



     Section 7.1 Representations and Warranties.



     (a) The representations and warranties (other than the Title and Authority Representations)
made by Seller in Articles III and IV (without giving effect to any materiality or Material Adverse
Effect qualifiers contained therein) shall be true and accurate on and as of the Closing Date as
though made on and as of the Closing Date, except for (i) changes permitted or contemplated hereby;
(ii) representations and warranties which are as of a specific date, which shall be true and
accurate as of such date, subject to the immediately following clause (iii); or (iii) where the
failure to be true and accurate would not in the aggregate have a Material Adverse Effect or have a
material adverse effect on the ability of Seller to consummate the transactions contemplated
hereby.



     (b) The Title and Authority Representations made by Seller shall be true and accurate in all
material respects on and as of the Closing Date as though made on and as of the Closing Date,
except for (i) changes permitted or contemplated hereby, or (ii) representations and warranties
which are as of a specific date, which shall be true and accurate in all material respects as of
such date.



     (c) Seller shall have delivered the May Balance Sheet to Buyer no later than 30 Business Days
prior to the Closing.



 









 





     (d) Since the date of the May Balance Sheet, there has not been any Material Adverse Effect.



     Section 7.2 Performance. Seller shall have performed and complied, in all material
respects, with all agreements, covenants and obligations required by this Agreement to be performed
or complied with by Seller at or before the Closing.



     Section 7.3 Officer’s Certificate. Seller shall have delivered to Buyer at the Closing
a certificate of an officer of Seller, dated as of the Closing Date, as to the matters set forth in
Sections 7.1 and 7.2.



     Section 7.4 Orders and Laws. There shall be no effective injunction, writ or
preliminary restraining order or any order of any nature issued by a Governmental Authority of
competent jurisdiction to the effect that the purchase and sale of the Company Interests pursuant
to this Agreement may not be consummated as provided in this Agreement and no proceeding or lawsuit
shall have been commenced by any Governmental Authority which is reasonably likely to result in any
such injunction, writ or preliminary restraining order or to otherwise prohibit or make illegal the
consummation of the transactions contemplated by this Agreement.



     Section 7.5 Consents and Approvals. The Buyer Approvals and the Acceptable Order by
the MPSC shall have been duly obtained, made or given and shall be in full force and effect, and
all terminations or expirations of waiting periods imposed by any Governmental Authority shall have
occurred; provided, however, that the absence of any appeals and the expiration of any appeal
period with respect to any of the foregoing shall not constitute a condition to Closing hereunder.



     Section 7.6 Resignation of Members, Managers, Officers and Directors. Seller shall
have caused the resignation or removal of all members, managers, partners, officers and directors,
as applicable, nominated or appointed by Seller or its Affiliates to any board or operating,
management or other committee relating to the Project or established under the Project Company’s
Organizational Documents, and shall have delivered to Buyer at the Closing evidence of such
resignations or removals.



     Section 7.7 Release of Indebtedness; Release of Liens. Seller shall have delivered to
Buyer evidence of (a) cancellation of all Indebtedness, including any intercompany Indebtedness
between the Project Company, on the one hand, and Seller or any Affiliate thereof, on the other
hand; and (b) release of the Liens, if any, on the Assets of the Project Company (other than (i)
Permitted Liens, except for those Permitted Liens securing any Indebtedness existing prior to the
Closing, and (ii) Liens created by or at the behest of Buyer) and the Project Company Interests
(other than Liens created by or at the behest of Buyer).



 









 





ARTICLE VIII




SELLER’S CONDITIONS TO CLOSING




     The obligation of Seller to consummate the Closing is subject to the fulfillment of each of
the following conditions (except to the extent waived in writing by Seller):



     Section 8.1 Representations and Warranties. The representations and warranties made by
Buyer in Article V shall be true and accurate on and as of the Closing Date as though made on and
as of the Closing Date, except for (i) changes permitted or contemplated hereby; (ii)
representations and warranties which are as of a specific date, in which event they shall be true
and accurate as of such date, subject to the immediately following clause (iii); or (iii) where the
failure to be true and accurate would not in the aggregate have a material adverse effect on the
ability of Buyer to consummate the transactions contemplated hereby.



     Section 8.2 Performance. Buyer shall have performed and complied, in all material
respects, with all agreements, covenants and obligations required by this Agreement to be so
performed or complied with by Buyer at or before the Closing.



     Section 8.3 Officer’s Certificate. Buyer shall have delivered to Seller at the Closing
a certificate of an officer of Buyer, dated as of the Closing Date, as to the matters set forth in
Sections 8.1 and 8.2.



     Section 8.4 Orders and Laws. There shall be no effective injunction, writ or
preliminary restraining order or any order of any nature issued by a Governmental Authority of
competent jurisdiction to the effect that the purchase and sale of the Project Company Interests
pursuant to this Agreement may not be consummated as provided in this Agreement and no proceeding
or lawsuit shall have been commenced by any Governmental Authority which is reasonably likely to
result in any such injunction, writ or preliminary restraining order or to otherwise prohibit or
make illegal the consummation of the transactions contemplated by this Agreement.



     Section 8.5 Consents and Approvals. The Seller Approvals shall have been duly
obtained, made or given and shall be in full force and effect, and all terminations or expirations
of waiting periods imposed by any Governmental Authority shall have occurred; provided, however,
that the absence of any appeals and the expiration of any appeal period with respect to any of the
foregoing shall not constitute a condition to Closing hereunder.



ARTICLE IX




TERMINATION




     Section 9.1 Termination. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned, at any time before the Closing as follows:



     (a) by Seller or Buyer, by written notice to the other, if any Law or final order restrains,
enjoins or otherwise prohibits or makes illegal the transactions contemplated pursuant to this
Agreement;



     (b) by Seller, by written notice to Buyer, if Buyer has (i) breached its obligation to pay the
Purchase Price pursuant to Sections 2.2 and 2.5, or (ii) breached in any material respect any other
representation, warranty, covenant, agreement or obligation in this Agreement and such breach, in
the case of this clause (ii), has not been cured within 20 days following written notification
thereof; provided, however, that with respect to clause (ii), if, at the end of such 20 day period,



 









 







Buyer is endeavoring in good faith, and proceeding diligently, to cure such breach, Buyer
shall have an additional 20 days in which to effect such cure;



     (c) by Buyer, by written notice to Seller, if Seller has breached any representation,
warranty, covenant, agreement or obligation in this Agreement and (i) such breach has not been
cured within 20 days following written notification thereof; provided, however, that if, at the end
of such 20 day period, Seller is endeavoring in good faith, and proceeding diligently, to cure such
breach, Seller shall have an additional 20 days in which to effect such cure and (ii) such breach
(to the extent not cured) would result in a Material Adverse Effect or have a material adverse
effect on Seller’s ability to perform its obligations hereunder;



     (d) by Buyer or Seller, by notice to the other, on or after June 30, 2008 or such later date
as the Buyer and Seller may agree in writing; provided, that Buyer cannot terminate under this
provision if the failure of the Closing to occur is the result of the failure on the part of Buyer
to perform any of its obligations hereunder and Seller cannot terminate this Agreement under this
provision if the failure of the Closing to occur is the result of the failure on the part of Seller
to perform any of its obligations hereunder;



     (e) by Buyer, as provided in the definition of Acceptable Order;



     (f) by Seller, if Buyer has the right to terminate this Agreement as provided in the
definition of Acceptable Order;



     (g) by Buyer or Seller, in accordance with Section 6.13 or Section 6.14; and



     (h) by mutual written consent of Buyer and Seller.



     Section 9.2 Effect of Termination.



     (a) If this Agreement is validly terminated pursuant to Section 9.1, there will be no
liability or obligation on the part of Seller or Buyer (or any of their respective Representatives
or Affiliates), except as provided in this Section 9.2 and Section 9.3.



     (b) If this Agreement is terminated pursuant to Sections 9.1(b) or Section 9.1(d) (in the case
of Section 9.1(d), if the right to terminate applies due to a failure by Buyer to comply with
Section 2.2, 2.5, 6.1(c)(ii) or 6.1(c)(iv)), then, in lieu of all other Claims and remedies that
might otherwise be available with respect thereto, including elsewhere hereunder and
notwithstanding any other provision of this Agreement, Buyer hereby agrees to pay immediately to
Seller, as liquidated damages in connection with any other such termination, an amount in
immediately available funds equal $25,000,000. The provisions for payment of liquidated damages in
this Section 9.2(b) have been included because, in the event of termination of this Agreement
pursuant to Section 9.1(b) or Section 9.1(d), the actual damages to be incurred by Seller are
reasonably expected to approximate the amount of liquidated damages set forth in this Section
9.2(b) and because the actual amount of such damages would be difficult if not impossible to
measure precisely.



 









 





     (c) Regardless of the reason for termination, Sections 6.2(b), 6.15, 6.16, 9.2, 9.3, 10.5(a),
and 10.5(b) and Article XI will survive any termination of this Agreement, and each Party shall
continue to be liable for any willful breach of this Agreement by it occurring prior to such
termination.



     (d) Upon termination of this Agreement by either Party for any reason, each Party shall return
or destroy all documents and other materials of any other Party relating to the Project Company,
the Assets of the Project Company, or this Agreement and the transactions contemplated hereby,
including any information relating to the Parties to this Agreement, whether obtained before or
after the execution of this Agreement and all information received by Buyer with respect to the
Project Company, the Assets of the Project Company or Seller shall remain subject to this
Agreement.



     Section 9.3 Specific Performance and Other Remedies. Each Party hereby acknowledges
that the rights of each Party to consummate the transactions contemplated hereby are special,
unique and of extraordinary character and that, if any Party violates or fails or refuses to
perform any covenant or agreement made by it herein, the non-breaching Party may be without an
adequate remedy at law. If any Party violates or fails or refuses to perform any covenant or
agreement made by such Party herein, the non-breaching Party or Parties may, subject to the terms
hereof and in addition to any remedy at law for damages or other relief, institute and prosecute an
action in any court of competent jurisdiction to enforce specific performance of such covenant or
agreement or seek any other equitable relief.



ARTICLE X




INDEMNIFICATION, LIMITATIONS OF LIABILITY AND WAIVERS




     Section 10.1 Indemnification.



     (a) Subject to Section 10.2, from and after the Closing, Seller shall defend and hold harmless
Buyer, the Project Company, and their respective stockholders, partners, members, officers,
employees, Affiliates and Representatives (collectively, the “Buyer Indemnified Parties”) from and
against all Losses incurred or suffered by any Buyer Indemnified Party resulting from:




     (i) any breach or inaccuracy as of the Closing Date (as though made on and as of the
Closing Date except to the extent otherwise provided in this Agreement) of any representation
or warranty of Seller contained in this Agreement, any Ancillary Agreement or any certificates
delivered in connection herewith or therewith;




     (ii) any breach of any covenant or agreement of Seller contained in this Agreement, any
Ancillary Agreement or any certificates delivered in connection herewith or therewith; and




     (iii) the Excluded Liabilities.



 









 





     (b) Subject to Section 10.2, from and after Closing, Buyer shall indemnify, defend and hold
Seller and its stockholders, partners, members, officers, employees, Affiliates and Representatives
(collectively, the “Seller Indemnified Parties” and, together with Buyer Indemnified Parties, the
“Indemnified Parties”) harmless from and against all Losses incurred or suffered by any Seller
Indemnified Party resulting from:




     (i) any breach or inaccuracy as of the Closing Date (as though made on and as of the
Closing Date except to the extent otherwise provided in this Agreement) of any representation
or warranty of Buyer contained in this Agreement, any Ancillary Agreement or any certificates
delivered in connection herewith or therewith; and




     (ii) any breach of any covenant or agreement of Buyer contained in this Agreement, any
Ancillary Agreement or any certificates delivered in connection herewith or therewith.



     Section 10.2 Limitations of Liability. Notwithstanding anything in this Agreement to
the contrary:



     (a) the representations, warranties, covenants, agreements and obligations in this Agreement
or any Ancillary Agreement shall survive the Closing; provided, however, that no Party may make or
bring a Claim for liability (i) with respect to any representations or warranties (or in any
certificate relating thereto) contained in Articles III, IV or V (other than those representations
and warranties contained in Section 3.2 (Authority), Section 3.6 (Capitalization), Section 4.1
(Organization), Section 4.3 (Capitalization), Section 4.6 (Subsidiaries) and Section 5.2
(Authority) (collectively, the “Title and Authority Representations”) or Section 4.16
(Environmental Matters) or Section 4.11 (Tax Matters)) after twelve months following the Closing
Date, (ii) with respect to the Title and Authority Representations, after the five-year anniversary
of the Closing Date, (iii) with respect to the representations and warranties contained in Section
4.16 (Environmental Matters), after the three-year anniversary of the Closing Date, and (iv) with
respect to the representations and warranties contained in Section 4.11 (Taxes), after 60 days
following the expiration of the applicable statute of limitations;



     (b) any breach of this Agreement or any certificate relating hereto in connection with any
single item or group of related items that results in Losses of less than $150,000 shall be deemed,
for all purposes of this Agreement, not to be a breach of this Agreement or any certificate
relating hereto;



     (c) Seller shall have no liability for a breach of this Agreement (other than any Excluded
Liabilities, any breach of the Title and Authority Representations, a breach of a representation or
warranty contained in Section 4.11 (Taxes) or a matter covered by Section 6.11 (Tax Matters)) until
the aggregate amount of all Losses incurred by Buyer equals or exceeds $5,000,000 (the “Deductible
Amount”), in which event Seller shall be liable for Losses only to the extent they are in excess of
the Deductible Amount (except as otherwise set forth in this Section 10.2 or Section 6.12);



     (d) in no event shall Seller’s aggregate liability (i) arising out of or relating to Losses
under Section 10.1(a)(i) exceed $75,000,000, except as set forth in clause (ii) below; and (ii)
arising out of or relating to any breach of a Title and Authority Representation, a breach of a
representation



 









 







or warranty contained in Section 4.11 (Taxes) or a matter covered by Section 6.11 (Tax
Matters) exceed 100% of the Base Purchase Price;



     (e) Seller shall have no liability for any breach of this Agreement or any certificate
relating hereto by Seller if Buyer had actual knowledge of such breach or inaccuracy as of the date
hereof;



     (f) other than with respect to the Southern Company and Other Claims, Seller shall have no
liability under this Article X or Section 6.11 to indemnify any Indemnified Party with respect to a
Loss to the extent that such Loss arose from or was related to any liability of Mirant, the Project
Company or any Affiliate of Mirant prior to the “effective date” of the chapter 11 plan confirmed
by the Bankruptcy Order, other than Losses directly arising as a result of the failure of Mirant
Corporation and/or its Affiliates to provide the treatment afforded to such pre-effective date
liabilities in the manner set forth in such chapter 11 plan;



     (g) no Indemnifying Party shall have any liability under this Article X to indemnify any
Indemnified Party with respect to a Loss to the extent that the Loss arose from or was exacerbated
by any action taken directly or indirectly by any Indemnified Party on or after the Closing Date;



     (h) any Indemnified Party that becomes aware of a Loss for which it seeks indemnification
under this Article X or Section 6.11 shall be required to use commercially reasonable efforts to
mitigate the Loss including taking any actions reasonably requested by the Indemnifying Party and
an Indemnifying Party shall not be liable for any Loss to the extent that it is attributable to the
Indemnified Party’s failure to mitigate;



     (i) no Indemnifying Party shall have any liability for any Loss which would not have arisen
but for any alteration or repeal or enactment of any Law after the Closing Date;



     (j) Seller shall have no liability for any Losses that represent the cost of repairs,
replacements or improvements which enhance the value of the repaired, replaced or improved asset
above its value on the Closing Date or which represent the reasonable cost of repair or
replacement;



     (k) the Losses suffered by any Indemnified Party shall be calculated after giving effect to
any amounts covered by third parties, including insurance proceeds, in each case net of the
reasonable third party out of pocket costs and expenses associated with such recoveries, and net of
any associated tax benefits to Buyer or the Project Company (it being understood and agreed that
the Indemnified Parties shall use their commercially reasonable efforts to seek insurance
recoveries in respect of Losses to be indemnified hereunder). If any insurance proceeds or other
recoveries from third parties are actually realized (in each case calculated net of the reasonable
third party out of pocket costs and expenses associated with such recoveries) by an Indemnified
Party subsequent to the receipt by such Indemnified Party of an indemnification payment hereunder
in respect of the claims to which such insurance proceedings or third party recoveries relate,
appropriate refunds shall be made promptly to the Indemnifying Party regarding the amount of such
indemnification payment; and



 









 





     (l) upon and after the Closing, the Project Company shall not have any liability or obligation
to indemnify, save or hold harmless or otherwise pay, reimburse or make any Seller Indemnified
Party whole for or on account of any indemnification claim made by Seller or any of its Affiliates
or Representatives for any breach of any representation, warranty, covenant or agreement of Seller,
and Seller shall have no right of contribution against the Project Company with respect to such
matters.



     Section 10.3 Indirect Claims. From and after the Closing, Buyer agrees to release,
indemnify and hold harmless Seller, its Affiliates, the Employees and the officers and managers of
the Project Company (acting in their capacity as such) from and against any Claims by Buyer or any
of its Affiliates for controlling stockholder liability or breach of any fiduciary duty relating to
any pre-Closing actions or failures to act by Seller or any of its Affiliates in connection with
the business of the Project Company prior to the Closing.



     Section 10.4 Waiver of Other Representations.




EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE III AND IV OR IN ANY
CERTIFICATE DELIVERED HEREUNDER, THE ASSETS OF THE PROJECT COMPANY ARE “AS IS, WHERE IS,” AND
SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR
IMPLIED, AS TO LIABILITIES, OPERATIONS OF THE FACILITY, TITLE, CONDITION, VALUE OR QUALITY OF
THE ASSETS OF THE PROJECT COMPANY OR THE PROSPECTS (FINANCIAL AND OTHERWISE), RISKS AND OTHER
INCIDENTS OF THE ASSETS OF THE PROJECT COMPANY, INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO
THE ACTUAL OR RATED GENERATING CAPABILITY OF THE PROJECT OR THE ABILITY OF THE PROJECT COMPANY
TO SELL FROM THE PROJECT ELECTRIC ENERGY, CAPACITY OR OTHER PRODUCTS FROM TIME TO TIME, AND
SELLER SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE, OR
SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE ASSETS OF THE PROJECT
COMPANY, OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS
THEREIN, WHETHER LATENT OR PATENT, OR COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS, OR AS TO THE
CONDITION OF THE ASSETS OF THE PROJECT COMPANY, OR ANY PART THEREOF, INCLUDING, WITHOUT
LIMITATION, WHETHER THE PROJECT COMPANY POSSESSES SUFFICIENT REAL PROPERTY OR PERSONAL
PROPERTY TO OPERATE THE PROJECT, IN EACH CASE EXCEPT AS SET FORTH HEREIN OR IN ANY CERTIFICATE
DELIVERED HEREUNDER. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN OR IN ANY CERTIFICATE
DELIVERED HEREUNDER, SELLER FURTHER SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY
REGARDING THE ABSENCE OF HAZARDOUS MATERIALS OR LIABILITY OR POTENTIAL LIABILITY ARISING UNDER
ENVIRONMENTAL



 









 







LAWS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS EXPRESSLY PROVIDED HEREIN OR
IN ANY CERTIFICATE DELIVERED HEREUNDER, SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATION OR
WARRANTY OF ANY KIND REGARDING THE CONDITION OF THE ASSETS OF THE PROJECT COMPANY OR THE
SUITABILITY OF THE PROJECT FOR OPERATION AS A POWER PLANT OR AS SITES FOR THE DEVELOPMENT OF
ADDITIONAL OR REPLACEMENT GENERATION CAPACITY AND NO MATERIAL OR INFORMATION PROVIDED BY OR
COMMUNICATIONS MADE BY SELLER, OR BY ANY BROKER OR INVESTMENT BANKER, INCLUDING WITHOUT
LIMITATION ANY INFORMATION OR MATERIAL CONTAINED IN THE DESCRIPTIVE MEMORANDUM RECEIVED BY
BUYER OR ITS AFFILIATES (INCLUDING ANY SUPPLEMENTS), INFORMATION PROVIDED DURING DUE
DILIGENCE, INCLUDING BUT NOT LIMITED TO INFORMATION IN THE DATA ROOM, AND ANY ORAL, WRITTEN OR
ELECTRONIC RESPONSE TO ANY INFORMATION REQUEST PROVIDED TO BUYER, WILL CAUSE OR CREATE ANY
WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, CONDITION, VALUE OR QUALITY OF THE PURCHASED
ASSETS THAT IS NOT SET FORTH HEREIN.



     Section 10.5 Waiver of Remedies.



     (a) The Parties hereby agree that, except with respect to Claims for fraud (but not
constructive fraud), no Party shall have any liability, and no Party shall make any Claim, for any
Loss or other matter under, relating to or arising out of this Agreement, the Company Assignment
Agreements or the Closing Certificates, whether based on contract, tort, strict liability, other
Laws or otherwise, except as provided in Section 6.11, Articles IX and X.



     (b) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, EXCEPT AS SET FORTH IN SECTION
6.13 AND SECTION 6.14, NO PARTY SHALL BE LIABLE FOR SPECIAL, PUNITIVE, EXEMPLARY, INCIDENTAL,
CONSEQUENTIAL OR INDIRECT DAMAGES OR LOST PROFITS, WHETHER BASED ON CONTRACT, TORT, STRICT
LIABILITY, OTHER LAW OR OTHERWISE AND WHETHER OR NOT ARISING FROM THE OTHER PARTY’S SOLE, JOINT OR
CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT (“NON-REIMBURSABLE DAMAGES”), PROVIDED THAT
ANY AMOUNTS PAYABLE TO THIRD PARTIES PURSUANT A THIRD-PARTY CLAIM (OTHER THAN A CLAIM FOR
CONSEQUENTIAL DAMAGES ARISING UNDER A CONTRACT PROVISION AGREED TO BY THE INDEMNIFIED PARTY THAT
DOES NOT NEGATE CONSEQUENTIAL DAMAGES) SHALL NOT BE DEEMED NON-REIMBURSABLE DAMAGES.



     (c) Notwithstanding anything in this Agreement to the contrary, no Representative or Affiliate
of a Party shall have any personal liability to the other Party or any other Person as a result of
the breach of any representation, warranty, covenant, agreement or obligation of such Party in this
Agreement.



 









 





     Section 10.6 Procedure with Respect to Third-Party Claims.



     (a) If any Party (or as to Buyer after Closing, the Project Company) becomes subject to a
pending or threatened Claim of a third party and such Party (the “Claiming Party”) believes it has
a claim against the other Party (the “Responding Party”) as a result, then the Claiming Party shall
promptly notify the Responding Party in writing of the basis for such Claim setting forth the
nature of the Claim in reasonable detail. The failure of the Claiming Party to so notify the
Responding Party shall not relieve the Responding Party of liability hereunder except to the extent
that the defense of such Claim is materially prejudiced by the failure to give such notice.



     (b) If any proceeding is brought by a third party against a Claiming Party and the Claiming
Party gives notice to the Responding Party pursuant to this Section 10.6, the Responding Party
shall be entitled to participate in such proceeding and, to the extent that it wishes, to assume
the defense of such proceeding, if (i) the Responding Party provides written notice to the Claiming
Party that the Responding Party intends to undertake such defense, (ii) the Responding Party
conducts the defense of the third-party Claim actively and diligently with counsel reasonably
satisfactory to the Claiming Party and (iii) if the Responding Party is a party to the proceeding,
the Responding Party or the Claiming Party has not determined in good faith that joint
representation would be inappropriate because of a conflict in interest. The Claiming Party, in its
sole discretion, shall have the right to employ separate counsel (who may be selected by the
Claiming Party in its sole discretion) in any such action and to participate in the defense
thereof, and the fees and expenses of such counsel shall be paid by such Claiming Party. The
Claiming Party and the Responding Party shall fully cooperate with each other and their respective
counsel in the defense or compromise of such Claim. If the Responding Party assumes the defense of
a proceeding, no compromise or settlement of such Claims may be effected by the Responding Party
without the Claiming Party’s consent unless (x) there is no finding or admission of any violation
of Law or any violation of the rights of any Person and no adverse effect on any other Claims that
may be made against the Claiming Party and (y) the sole relief provided is monetary damages that
are paid in full by the Responding Party.



     (c) If (i) notice is given to the Responding Party of the commencement of any third-party
legal proceeding and the Responding Party does not, within 30 days after the Claiming Party’s
notice is given, give notice to the Claiming Party of its election to assume the defense of such
legal proceeding, (ii) any of the conditions set forth in clauses (i) through (iii) of Section
10.6(b) above become unsatisfied or (iii) a Claiming Party determines in good faith that there is a
reasonable probability that a legal proceeding may adversely affect it other than as a result of
monetary damages for which it would be entitled to indemnification from the Responding Party under
this Agreement, then the Claiming Party shall (upon notice to the Responding Party) have the right
to undertake the defense, compromise or settlement of such claim; provided, however, that the
Responding Party shall reimburse the Claiming Party for the costs of defending against such
third-party claim (including reasonable attorneys’ fees and expenses) and shall remain otherwise
responsible for any liability with respect to amounts arising from or related to such third-party
claim, to the extent it is ultimately determined that such Responding Party is liable with respect
to such third-party claim for a breach under this Agreement. The Responding Party
may elect to participate in such legal proceedings, negotiations or defense at any time at its
own expense.



 









 





ARTICLE XI




MISCELLANEOUS




     Section 11.1 Notices.



     (a) Unless this Agreement specifically requires otherwise, any notice, demand or request
provided for in this Agreement, or served, given or made in connection with it, shall be in writing
and shall be deemed properly served, given or made if delivered in person or sent by facsimile or
sent by registered or certified mail, postage prepaid, or by a nationally recognized overnight
courier service that provides a receipt of delivery, in each case, to the Parties at the addresses
specified below:


If to Buyer, to:



Consumers Energy Company

One Energy Plaza

Jackson, MI 49201

Facsimile No.: (517) 788-1671

Attn: President



With copies to:



Consumers Energy Company

One Energy Plaza

Jackson, MI 49201

Facsimile No.: (517) 788-0953

Attn: General Counsel



If to Seller, to:



c/o LS Power Development, LLC

Two Tower Center, 11th Floor

East Brunswick, NJ 08816

Facsimile No.: 732-249-7290

Attn: Senior Counsel



With copies to:



Latham & Watkins LLP

53rd at Third

885 Third Avenue

New York, NY 10022-4834

Facsimile No.: 212-751-4864

Attn: David Gordon



David Kurzweil




 









 








     (b) Notice given by personal delivery, mail or overnight courier pursuant to this Section 11.1
shall be effective upon physical receipt. Notice given by facsimile pursuant to this Section 11.1
shall be effective as of the date of confirmed delivery if delivered before 5:00 p.m. Eastern Time
on any Business Day or the next succeeding Business Day if confirmed delivery is after 5:00 p.m.
Eastern Time on any Business Day or during any non-Business Day.



     Section 11.2 Entire Agreement. This Agreement supersedes all prior discussions and
agreements between the Parties with respect to the subject matter hereof, and this Agreement, the
Ancillary Agreements and the other documents delivered pursuant to this Agreement contain the sole
and entire agreement between the Parties hereto with respect to the subject matter hereof.



     Section 11.3 Expenses. Except as otherwise expressly provided in this Agreement,
whether or not the transactions contemplated hereby are consummated, each Party will pay its own
costs and expenses incurred in anticipation of, relating to and in connection with the negotiation
and execution of this Agreement and the transactions contemplated hereby. Notwithstanding the
foregoing, Buyer will pay: all costs of (a) any title policy and all endorsements thereto that
Buyer elects to obtain, (b) all filings required under the HSR Act, (c) all filings required to be
made by Buyer with FERC or any state or local Governmental Authority and (d) all document
recordation costs, including any applicable deed Transfer Taxes.



     Section 11.4 Disclosure. Seller may, at its option, include in the Schedules items
that are not material in order to avoid any misunderstanding, and any such inclusion, or any
references to dollar amounts, shall not be deemed to be an acknowledgment or representation that
such items are material, to establish any standard of materiality or to define further the meaning
of such terms for purposes of this Agreement. Information disclosed in any Schedule shall
constitute a disclosure for purposes of all other Schedules notwithstanding the lack of specific
cross-reference thereto, but only to the extent the applicability of such disclosure to such other
Schedule is reasonably apparent. In no event shall the inclusion of any matter in the Schedules be
deemed or interpreted to broaden Seller’s representations, warranties, covenants or agreements
contained in this Agreement. The mere inclusion of an item in the Schedules shall not be deemed an
admission by Seller that such item represents a material exception or fact, event, or circumstance
or that such item is reasonably likely to result in a Material Adverse Effect. The Parties shall
promptly notify each other of (a) the occurrence, or failure to occur, of any event, which
occurrence or failure has caused any representation or warranty of such Party contained in this
Agreement or in any exhibit, schedule, certificate, document or written instrument attached hereto
to be untrue or inaccurate, (b) any failure of such Party to comply with, perform or satisfy, in
any respect, any covenant, condition or agreement to be complied with, performed by or satisfied by
it under this Agreement or any exhibit, schedule, certificate, document or written instrument
attached hereto and (c) any notice or other communication from any Governmental Authority in
connection with this Agreement, the Company Assignment Agreement or the transactions contemplated
herein and therein; provided that such disclosure, except as set forth in Section 10.2(e) and
Section 6.12, shall not be deemed to cure, or to relieve any Party of any liability or obligation
with respect to, any breach of or failure to satisfy any representation,
warranty, covenant or agreement or any condition hereunder, and, except as set forth in



 









 




Section 10.2(e) and Section 6.12, shall not affect any Party’s right with respect to
indemnification hereunder.




     Section 11.5 Waiver. Any term or condition of this Agreement may be waived at any time
by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the Party waiving such term or
condition. No waiver by any Party of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under this Agreement or by
Law or otherwise afforded, will be cumulative and not alternative.



     Section 11.6 Amendment. This Agreement may be amended, supplemented or modified only
by a written instrument duly executed by or on behalf of each Party.



     Section 11.7 No Third Party Beneficiary. Except for the provisions of Sections 6.2(b),
10.1(a) and (b) and 10.3 (which are intended for the benefit of the Persons identified therein),
the terms and provisions of this Agreement are intended solely for the benefit of the Parties and
their respective successors or permitted assigns, and it is not the intention of the Parties to
confer third-party beneficiary rights upon any other Person, including, without limitation, any
employee, any beneficiary or dependents thereof, or any collective bargaining representative
thereof.



     Section 11.8 Assignment; Binding Effect. Buyer may assign its rights and obligations
hereunder to any Affiliate or Affiliates, or to Buyer’s lenders for collateral security purposes,
but such assignment shall not release Buyer from its obligations hereunder. Except as provided in
the preceding sentence, neither this Agreement nor any right, interest or obligation hereunder may
be assigned by any Party without the prior written consent of the other Party, and any attempt to
do so will be void, except for assignments and transfers by operation of Law. Subject to this
Section 11.8, this Agreement is binding upon, inures to the benefit of and is enforceable by the
Parties and their respective successors and permitted assigns.



     Section 11.9 Headings. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.



     Section 11.10 Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future Law, and if the rights or obligations
of any Party under this Agreement will not be materially and adversely affected thereby, such
provision will be fully severable, this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof, the remaining
provisions of this Agreement will remain in full force and effect and will not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom and in lieu of such
illegal, invalid or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.



     Section 11.11 Counterparts; Facsimile. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which together will constitute



 









 




one and the same instrument. Any facsimile copies hereof or signature hereon shall, for all
purposes, be deemed originals.




     Section 11.12 Governing Law; Venue; and Jurisdiction.



     (a) This Agreement shall be governed by and construed in accordance with the Laws of the State
of New York, without giving effect to any conflict or choice of law provision that would result in
the imposition of another state’s Law.



     (b) THE PARTIES HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT IN NEW YORK, NEW YORK AND EACH PARTY HEREBY CONSENTS TO THE JURISDICTION OF SUCH
COURTS (AND OF THE APPROPRIATE APPELLATE COURTS THEREFROM) IN ANY SUCH SUIT, ACTION OR PROCEEDING
AND IRREVOCABLE WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY SUCH COURT
OR THAT THEY ANY SUCH SUIT, ACTION OR PROCEEDING THAT IS BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM. DURING THE PERIOD A LEGAL DISPUTE THAT IS FILED IN ACCORDANCE WITH THIS
SECTION 11.12 IS PENDING BEFORE A COURT, ALL ACTIONS, SUITS OR PROCEEDINGS WITH RESPECT TO SUCH
LEGAL DISPUTE OR ANY OTHER LEGAL DISPUTE, INCLUDING ANY COUNTERCLAIM, CROSS-CLAIM OR INTERPLEADER,
SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION OF SUCH COURT. EACH PARTY HEREBY WAIVES, AND SHALL
NOT ASSERT AS A DEFENSE IN ANY LEGAL DISPUTE, THAT (A) SUCH PARTY IS NOT SUBJECT THERETO, (B) SUCH
ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SUCH COURT, (C) SUCH
PARTY’S PROPERTY IS EXEMPT OR IMMUNE FROM EXECUTION, (D) SUCH ACTION, SUIT OR PROCEEDING IS BROUGHT
IN AN INCONVENIENT FORUM OR (E) THE VENUE OF SUCH ACTION, SUIT OR PROCEEDING IS IMPROPER. A FINAL
JUDGMENT IN ANY ACTION, SUIT OR PROCEEDING DESCRIBED IN THIS SECTION 11.12 FOLLOWING THE EXPIRATION
OF ANY PERIOD PERMITTED FOR APPEAL AND SUBJECT TO ANY STAY DURING APPEAL SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
APPLICABLE LAWS.



     (c) EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY.



     Section 11.13 Parcel Three Option. Seller hereby grants Buyer the option to acquire
all of the Seller’s right, title and interest in and to Parcel Three, which right, title and
interest shall be conveyed by Seller by a quitclaim deed in the form attached hereto as Schedule
11.13, in exchange for $10, upon consummation of Closing, but in no event after the date which is
the first
Business Day following the Closing Date. Seller shall undertake Reasonable Best Efforts to
cause to be removed from the title all Liens on Parcel Three prior to Closing.



 









 





[signature pages follow]




     IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized
officer of each Party as of the date first above written.



	 	 	 	 	 
	 	SELLER:



BROADWAY GEN FUNDING, LLC

 	 
	 	By:  	/s/ Jim Bartlett
 	 
	 	 	Name:  	Jim Bartlett 	 
	 	 	Title  	President 	 
	 
	 	BUYER:



CONSUMERS ENERGY COMPANY

 	 
	 	By:  	/s/ John Russell
 	 
	 	 	Name:  	John Russell 	 
	 	 	Title:  	President and Chief Operating Officer 	 
	 




 











 





ASSIGNMENT AGREEMENT




          This
ASSIGNMENT AGREEMENT (this “Assignment”) is entered into as of the ___ day of
                    , 2007 by and between Broadway Gen Funding LLC, a Delaware limited liability company
(“Assignor”), and Consumers Energy Company, a Michigan corporation (“Assignee”) (each a
“Party,” and collectively, the “Parties”). Capitalized terms used but not otherwise defined
herein shall have the respective meanings set forth in that certain Purchase and Sale
Agreement dated as of May 24, 2007 by and between Assignor and Assignee (the “PSA”).




          WHEREAS, Assignor and Assignee have entered into the PSA pursuant to which, at the
Closing, Assignor will sell to Assignee, and Assignee will purchase from Assignors, the
Project Company Interests, for the consideration and on the terms set forth in the PSA; and




          WHEREAS, pursuant to Section 2.4 of the PSA, Assignor and Assignee are entering into this
Assignment.




          NOW THEREFORE, for and in consideration of the premises contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by
the Parties, the Parties, intending to be legally bound, do hereby agree as follows:




     l. Transfer of Interests to Assignee. Effective on and from the Closing, Assignor does
hereby sell, transfer, assign and convey to Assignee all of Assignor’s right, title and
interest in, to and under all of Assignor’s Equity Interests in the Project Company.
Assignors represents and warrants to Assignee that as a result of the sale, transfer,
assignment and conveyance set forth in this Section 1 and the PSA, Assignee shall own,
directly or indirectly, 100% of the Equity Interests in the Project Company.



     2. Acceptance of Assignment. Effective on and from the Closing, Assignee, by execution
hereof, accepts the foregoing transfer and assignment and assumes and agrees to perform all
of the obligations of ownership of the Equity Interests in the Project Company arising under
the Amended and Restated Limited Liability Company Agreement of the Project Company dated as
of January 3, 2006 and the other governing documents of the Project Company and applicable
law after the date hereof.



     3. Conflicting Terms. No terms or provisions of this Assignment .are intended or shall
be deemed to amend the terms or provisions of the PSA. To the extent the terms of this
Assignment and the PSA conflict, the terms of the PSA shall be deemed to supersede the
conflicting: terms of this, Assignment. Assignor makes no representations or warranties with
respect to the Equity Interests of the Project Company or the Project Company, except as set
forth in, and subject to the limitations and qualifications set forth in, Section 1 above
and in the PSA.



 









 





     4. Miscellaneous.



     (a) No Third-Party Beneficiaries. This Assignment shall not confer any rights or
remedies -upon any Person other than the Parties and their respective successors
and permitted assigns.



     (b) Entire Agreement, Binding Effect. This Assignment (including the PSA and the
documents referred to herein and therein) constitutes the entire agreement between the
Parties with respect to the subject matter hereof and supersedes any prior understandings,
agreements, or representations by or between the Parties, written or oral, to the extent
they related thereto. This Assignment-shall be binding upon, inure for the benefit of and
be enforceable by the Parties and their respective successors and assigns.



     (c) Counterparts. This Assignment may be executed in one or more counterparts
(including by facsimile, electronic mail, or similar electronic transmission device
pursuant to which the signature of or on behalf of such Party can be seen), each of which
shall be deemed an original but all of which together will constitute one and the same
instrument.



     (d) Headings. The section or paragraph headings contained in this Assignment are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Assignment.



     (e) Governing Law. This Assignment shall be governed by and construed in accordance
with the Laws of the State of New York, without giving effect to any conflict or choice
of law provision that would result in the imposition of another state’s Law.



[Signature Page Follows]




     IN WITNESS WHEREOF, the Parties hereto have executed this Assignment as of the date first
above written.



	 	 	 	 	 
	 	BROADWAY GEN FUNDING, LLC

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	CONSUMERS ENERGY COMPANY

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



EXECUTION COPY




DISCLOSURE SCHEDULE





     This disclosure schedule (this “Disclosure Schedule”) has been prepared and delivered in
accordance with the Purchase and Sale Agreement, dated May 24,2007 (the “Agreement”), by
and between Broadway Gen Funding, LLC and Consumers Energy Company, a Michigan
corporation (“Buyer”). Unless the context otherwise requires, all capitalized terms used in this
Disclosure Schedule have the respective meanings ascribed to such terms in the Agreement. The
headings contained in this Disclosure Schedule are for convenience of reference only and shall
not be deemed to modify or influence the interpretation of the Agreement or the information
contained in this Disclosure Schedule.



     Schedule references in this Disclosure Schedule are for convenience only, and the
disclosure of any fact or item in any Disclosure Schedule referenced by a particular section of the
Agreement shall be deemed to have been disclosed with respect to every other section in the
Disclosure Schedule to the extent the applicability of such other disclosure to such other sections
is reasonably apparent.



     Matters reflected in this Disclosure Schedule are not necessarily limited to matters
required by the Agreement to be reflected in this Disclosure Schedule. Such additional matters
are set forth for informational purposes and do not necessarily include other matters of a similar
nature. In no event shall the inclusion of any such matter in this Disclosure Schedule be deemed
or interpreted to broaden Seller’s representations, warranties, covenants or agreements contained
in the Agreement. The mere inclusion of an item in this Disclosure Schedule shall not be
deemed an admission by Seller that such item represents a material exception or fact, event, or
circumstance or that such item is reasonably likely to result in a Material Adverse Effect.



     The attachments to this Disclosure Schedule form an integral part of this Disclosure
Schedule and are incorporated by reference for all purposes as if set forth fully herein. This
Disclosure Schedule supersedes and replaces any other Disclosure Schedule previously provided
to Buyer. This Disclosure Schedule may be supplemented or amended by Seller from time to
time prior to the Closing pursuant to the terms and conditions of the Agreement.



Ny\1285210.2




 









 








SCHEDULE 1.1 — A

Net Working Capital Calculation



Net Working Capital is equal to:

(l) the sum of (A) all third-party accounts receivable, net of any applicable reserves, (B) any
collateral deposits posted and interest earned thereon, (C) any earned but not received payments
under tolling agreements, (D) spare parts inventory at book value, (E) Emissions allowances at
market value, and (F) prepaid expenses,



minus

(2) the sum of (A) third-party accounts payable, accrued expenses related to the Business and other
current liabilities in accordance with GAAP and (B) any liabilities (whether or not current
liabilities) to the extent of any collateral deposits and interest thereon included under clause
(l)(B) above.



Net Working Capital shall not include any tax assets or liabilities.



All calculations of Net Working Capital will be made as of the Closing Date in accordance with the
Project Company’s historical accounting practices.



By way of example only, the calculation of Net Working Capital using the most recent Balance Sheets
is as follows:



NET WORKING CAPITAL EXAMPLE1

Estimated as of 4/20/07 balance sheet




Zeeland




	 	 	 	 	 
	Third-party A/R:
	 	 	 	 
	A/R — Collateral Deposits including interest held thereon
	 	 	—	 
	A/R — Other than collateral
	 	 	—	 
	Emissions Inventory at market
	 	 	203,210	 
	Spare Parts Inventory
	 	 	1,315,341	 
	Milestone payments under LTSA
	 	 	—	 
	Other Prepaid Expenses
	 	 	 	 
	 
	 	 	 	 
	Less:
	 	 	 	 
	Third-party Accounts Payable
	 	 	(509,235	)
	Accrued Vacation Liability
	 	 	(80,958	)
	Accrued Floating Holiday Liability
	 	 	(5,206	)
	Accrued Sick Pay
	 	 	(120,065	)





1 Information provided primarily from Mirant and has not been verified by Sellers or their
Affiliates,




Ny\1285210.2




 









 








SCHEDULE 1.1-B




Budget




	 	 	 	 	 	 	 	 	 
	 	 	2007	 	2008
	 
	 	 	 	 	 	 	 	 
	Capital Expenditures

	 	$	375,000	 	 	$	750,000	 
	Major Maintenance

	 	$	0	 	 	$	0	 






Ny\1285210.2




 









 








SCHEDULE
1.1-K


Knowledge




1. Carolyne Wass

2. Robert Parker

3. James Pagano

4. James Bartlett




Ny\1285210.2




SCHEDULE 1.1- PL




Permitted Liens



1. All scheduled exceptions on Schedule B of the Title Policy.



2. The First Lien Credit Agreement, dated May 1, 2007, among Broadway Gen Funding, LLC
as Borrower, the Lenders, J.P. Morgan Securities, Barclays Capital, Credit Suisse Securities
(USA) LLC and Lehman Brothers Inc. as joint lead arrangers and joint bookrunners, and
JPMorgan Chase Bank, N.A., as administrative agent, and all documents and agreements
executed in connection therewith. *



3. The Second Lien Credit Agreement, dated May 1, 2007, among Broadway Gen Funding,
LLC as Borrower, the Lenders, J.P. Morgan Securities Inc., Barclays Capital, Credit Suisse
Securities (USA) LLC, and Lehman Brothers Inc. as joint lead arrangers and joint
bookrunners, and JPMorgan Chase Bank, N.A., as administrative agent, and all documents
and agreements executed in connection therewith. *



4. Intercompany Indebtedness that may be incurred by the Project Company to Seller or any of
their Affiliates. *



5. As incurred under Items 15 (relating to the Project Company), 17 and 26 of Schedule 4.13.




Ny\1285210.2




 









 








SCHEDULE 1.1 — PT




Parcel Three



PART OF E 1/2 OF NW 1/4 COM N 1/4 COR, TH N 89D 22M 17S W 1329.49 FT & S 0D
27M 33S W 1500 FT ALG W 1/8 LI TO PT OF BEG, TH S 89D 22M 17S E 1124.81 FT, N
60D 42M 54S E 122.6 FT, TH N 60D 47M 14S E 113.93 FT TO N&S 1/4 LI, TH S 0D 25M
38S W 230.11 FT ALG SD LI TO N’LY LI OF CSX RR R/W, TH S 60D 42M 54S W ALG RR
R/W TO INTERS WITH A LI COM NW SEC COR, TH S 89D 22M 17S E 664.75 FT & S 0D
28M 30S W 1690.01 FT ALG W LI OF E 1/2 OF W 112 OF NW 1/4 TO PT OF BEG SD LI, TH S 89D 22M 17S E
1860.27 FT TO PT OF ENDING SD LI ON N’LY LI CSX RR R/W, TH N 89D 22M 17S W ALG SD LI TO PT S 0D 27M
33S W OF BEG, TH N 0D 27M 33S E TO
BEG. SEC 17 T5N R14W FROM 70-17-17-101-018 1/03




Ny\1285210.2




SCHEDULE 3.3(c)




Seller Approvals




Hart-Scott-Rodino (HSR)




Federal Energy Regulatory Commission (FERC)




Michigan Public Service Commission (MPSC)




Ny\1285210.2




 









 








SCHEDULE 4.2




Company Consents



1. City of Zeeland Wastewater Discharge Permit, issued December 29, 2004.



2. MDEQ Renewable Operating Permit, issued December 29, 2004.



3. MDEQ Stormwater Permit No. MIS219000.



4. USEPA Underground Injection Control Permit, Permit No. MI-139-1I-0004.



5. USEPA Underground Injection Control Permit, Permit No. MI-139-1I-0005.



6. Zeeland Project Radio Station Authorization for Call Sign WPUV277 issued by the Federal
Communications Commission Wireless Telecommunications Bureau, effective August 12,
2004.



7. Part 55/Clean Air Act Source-Wide Permit to Install No. MI-PTI-N6521-2004




Ny\1285210.2




 









 








SCHEDULE 4.3

Capitalization




Broadway Gen Funding, LLC




100%




Zeeland Power Company, LLC




NY\1285210.2




 









 








SCHEDULE 4.4




Business



Emissions allowances (other than those emissions allowances listed on Schedule 4.16(c))



T-l Line



Software owned by Mirant and used transitionally (including TOGA)



Accounting system



EH&S Tracking Tool (owned by Wood Group)



Payroll Tool (owned by Wood Group)



Proprietary GE-owned software



Registrations pursuant to FERC Electric Tariff of Midwest Independent System Operator



Parcel Three




Ny\1285210.2





 









 








SCHEDULE 4.5




Bank Accounts




Zeeland Power Company, LLC




	 	 	 
	Bank Name:
	 	JPMorgan Chase Bank
	ABA#:
	 	021-000-021
	Account #:
	 	T&1 999-99-651
	Account Name:
	 	Zeeland Power Company LLC
	FFC Account#:
	 	Q92131004





Account Signers: Mark Brennan, Brian Roth, Blake Wheatley, Joe Myers, Jason Solimini,

Michael Obszarny, and George Keefe




Ny\1285210.2




 









 








SCHEDULE 4.7




Legal Proceedings



Chapter 11 Case No. 03-46661-DML of Zeeland Power Company, LLC filed on July 15, 2003 in
the United States Bankruptcy Court, Northern District of Texas, Forth Worth Division, and jointly
administered as Case No. 03-46590-DML



Assessment Letter from contract appraiser engaged by the City of Zeeland dated November 14,
2006



Following proofs of claim filed by The Southern Company in Jointly Administered Chapter 11
Case No. 03-46590-DML, United States Bankruptcy Court, Northern District of Texas, Fort
Worth Division, of MC 2005 LLC (f/k/a Mirant Corporation prior to January 3, 2006 and MC
2005 Corporation prior to February 23, 2006) (the “Bankruptcy Case”), as such claims may be
amended: claims numbered 6327, 6379, 8139, and 8271 against Zeeland Power Company, LLC.



Following proofs of claim filed by Lehman Commercial Paper, Inc. and/or Wells Fargo Bank,
N.A. in the Bankruptcy Case, as such claims may be amended: claims numbered 6101 and 6967
against Zeeland Power Company, LLC.




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SCHEDULE 4.8




Compliance with Laws



Fogging from plant operations occasionally necessitates local road closure.




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SCHEDULE 4.9




Liabilities



Schedules 4.7, Schedule 4.8, and Schedule 4.13 are hereby incorporated by reference.




NY\1285210.2




 









 








SCHEDULE 4.10




Absence of Certain Changes



Sale of the Project Company by Mirant to Broadway pursuant to the Mirant PSA, and any actions
undertaken or documents executed in connection with the Mirant Closing.



Incurrence of debt in connection with the acquisition of the Project Company by Broadway pursuant
to the Mirant PSA (see Items 2,3,4 and 5 of Schedule 1.1-PL).



Entry into forward MISO Designated Network Resource Capacity Sales Agreements



Quitclaim Deed for Parcel Three by the Project Company to Seller.




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SCHEDULE 4.11




Taxes



Assessment Letter from contract appraiser engaged by the City of Zeeland dated November 14,
2006.



Following proofs of claim filed by The Southern Company in the Bankruptcy Case, as such
claims may be amended: claims numbered 6327,6379, 8l39, and 8271 against Zeeland Power
Company, LLC. 1






 




			
	1 These claims are Excluded Liabilities.	 	 





NY\1285210.2




SCHEDULE
4.12

Regulatory Status



Zeeland has not been authorized by FERC to make sales of ancillary services at market-based
rates pursuant to Section 205 of the FPA.




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SCHEDULE 4.13




Material Contracts



1. Amended and Restated LLC Agreement of Mirant Zeeland, LLC, dated May 1, 2007



2. Transportation Services Contract between Zeeland Power Company, LLC (formerly SEI
Michigan, LLC) and SEMCO Energy Gas Company, dated December 17, 1999



3. Generator Interconnection and Operating Agreement between Michigan Electric
Transmission Company, LLC and Zeeland Power Company, LLC, dated December 26,
2001; amended June 14, 2002; issued August 30, 2002



4. Lateral Construction and Connection Agreement between Zeeland Power Company,
LLC (formerly SEI Michigan, LLC) and SEMCO Energy Gas Company, dated
December 17, 1999



5. Long Term Service Agreement by and between Zeeland Power Company, LLC and
General Electric International, Inc. for the Simple Cycle Facility, dated June 16, 2004
and related guaranty issued by General Electric Company



6. Long Term Service Agreement by and between Zeeland Power Company, LLC and
General Electric International, Inc., for the Combined Cycle Facility, dated June 16,
2004 and related guaranty issued by General Electric Company



7. 2001 Water Services Agreement between City of Zeeland Municipal Corp., City of
Zeeland Board of Public Works, and Zeeland Power Company, LLC (formerly SEI
Michigan, LLC), dated January 2, 2001, effective July 1, 2001



8. Donation Pledge made by Zeeland Power Company, LLC in the amount of $200,000
to the City of Zeeland, dated February 8, 2001



9. Collective Bargaining Agreement between Mirant Zeeland, LLC, Mirant Sugar Creek,
LLC and the United Steelworkers of America, AFL-CIO-CLC on behalf of Local 12502
effective January 1,2004



10. Memorandum of Understanding for Contract Extension between United Steelworkers and
Mirant Sugar Creek, LLC & Mirant Zeeland, LLC



11. Irrevocable Letter of Credit, effective May 1, 2007, in the amount of $85,000 issued
to the Michigan Department of Environmental Quality.




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12. FERC Order dated March 23, 2005 approving settlement agreement between Zeeland
Power Company, LLC, Consumers Electric Company and the Michigan Public Power
Agency



13. SEI Michigan, LLC Act 198 Contract dated May 15, 2000



14. Facilities Agreement between Consumers Energy Company and SEI Michigan, L.L.C.
dated November 1, 2000.



15. Energy Management Agreement between LS Power Acquisition Co I, LLC, Eagle
Energy Partners I, L.P. and, after the Services Implementation Date (as defined therein),
Zeeland Power Company, LLC and certain other parties named therein, dated March 14,
2007, as amended, along with the ISDA Master Agreement and related Schedule dated
May 1, 2007 (collectively the “ISDA Agreement”) and the Credit Support Annex
between LS Power Acquisition Co I, LLC, Eagle Energy Partners I, L.P., Zeeland Power
Company, LLC and certain other parties named therein, dated May 1, 2007 (the “Credit
Support Annex”)



16. Operation and Maintenance Agreement for the Zeeland Electric Facility by and between
LS Power Acquisition Co I, LLC and Wood Group Power Operations (West), Inc., dated
February 12, 2007, as subsequently assigned to the Project Company



          16.1 Wood Group Power Operation, Inc. Union Acknowledgement, dated April 20, 2007



17. Documentation of forward MISO Designated Network Resource Capacity Sales
Agreements, as completed



18. Irrevocable Letter of Credit, effective May 17, 2007, in the amount of $71,000, issued to
the Midwest Independent Transmission System Operator, Inc.



19. Master Power Purchase and Sale Agreement with Consumers Energy Company, dated
May 15, 2007 (and related agreements)



20. Indemnity Agreement between JPMorgan Chase Bank, N.A. and Broadway Gen
Funding, LLC, dated May 17, 2007



21. Service Agreements between Mirant Zeeland, LLC and Midwest ISO, dated June 1, 2007
for Transmission Service, Short Term Firm Point-to-Point and Long-Term Firm Point-to-Point
Service



22. OATI webCARES Customer Agreement between Mirant Zeeland, LLC and Open Access
Technology International, Inc. dated April 30, 2007
23. Market Participation Agreement between MISO and Mirant Zeeland, LLC, dated June 1,
2007



24. Service Agreement Order Wholesale Market Based Rate Tariff, between Zeeland Power
Company, LLC and Consumers Energy Company, dated May 10, 2007



25. Confirmation between Wabash Valley Power Association, Inc. and Zeeland Power
Company, LLC dated May 11, 2007



26. Spreadsheet of executed MISO Designated Network Resource Capacity Sales
Agreements titled “Zeeland DNR Sales 050907 v 2”



27. Quitclaim Deed for Parcel Three by the Project Company to Seller




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SCHEDULE 4.14




Real Property



Fee owner of property as described in Exhibit A to Schedule A of the Title Policy.




Ny\1285210.2




SCHEDULE 4.15(A)




Permits



l. FCC Radio Station Authorization: granted 05/08/02; effective 11/22/05; printed 01/09/06.



2. Radio Station Authorization for Call Sign WPUV277 issued by the Federal Communications
Commission Wireless Telecommunications Bureau effective November 22, 2005 and related
correspondence.



3. Exempt Wholesale Generator authorization in FERC Docket No. EG01-38-000, granted on
January 16, 2001 (Phase I).



4. Exempt Wholesale Generator authorization in FERC Docket No. EG02-31-000, granted on
December 27,2001 (Phase II).



5. Market-Based Rate authorization in FERC Docket No. ER01-562-000, granted on January 5,
200l.



6. FERC Order granting continued authorization to make sales at market-based rates in Docket
No. ER01-1263-000, issued on May 26, 2005.



7. Certificates of Boiler Inspection issued by the Michigan Department of Labor and Economic
Growth.



8. Certificate of Occupancy by the City of Zeeland, Michigan dated December 6, 2002.



9. Michigan Certificate of Authority to Transact Business, dated February 4, 2000.



10. Wastewater Discharge General Permit (No. MIS219000) Michigan Department of
Environmental Quality National Pollutant Discharge Elimination System issued on August
23, 2001 and effective on April 1, 2002.



11. Certificate of Coverage for the discharge of storm water by the Michigan Department of
Environmental Quality Water Division (NPDES) No. MI5210785 (under general permit no.
219000) issued on July 28, 2003.



12. City of Zeeland Wastewater Discharge Permit. Permit No. 2025 effective on December 16,
2002, renewed December 16, 2005.



13. USEPA Underground Injection Control Permit Class I — Non-Hazardous Permit No. MI-139-
1I-0004, M 470 Facility Name Injection Well #IW-l effective August 29, 200l.



14. USEPA Underground Injection Control Permit Class I — Non-Hazardous Permit No. MI-139-
1I-005, M 471 Facility Name Injection Well #IW-2 effective May 1, 2002.



15. MDEQ Renewable Operating Permit, issued December 29,2004.



16. Part 55/Clean Air Act Source-Wide Permit to Install No. MI-PTI-N6521-2004.



17. Acid Rain Permit (No. MI-AR-55087-2004) Michigan Department of Environmental Quality
issued on December 29, 2004.



18. NOx Budget Permit (No. MI-NOX-55087-2004) Michigan Department of Environmental
Quality issued on May 24, 2004.



19. Certificate of Occupancy by the City of Zeeland, Michigan, dated November 2, 2000.




Ny\1285210.2




 









 








SCHEDULE 4.16(c)




Air Pollution Emissions Allowances and

Emission Reduction Credits




70 NOx allowances allocated for each of 2007-2009.




Ny\1285210.2




SCHEDULE 4.19




Labor Matters



• There was a request for representation, an organizing campaign and related activity at the
Zeeland Project that resulted in the execution of the Collective Bargaining Agreement
among Zeeland Power Company, LLC, Sugar Creek, LLC and the United Steelworkers of
America, AFL-CIO-CLC on behalf of Local 12502 dated December 19, 2002 and the
Memorandum of Understanding for Contract Extension between United Steelworkers and
Sugar Creek, LLC and Zeeland Power Company, LLC, dated November 29, 2006.



• Memorandum of Understanding between Wood Group Power Operations, Inc. and United
Steel Workers, dated April 26, 2007.




Ny\1285210.2




 









 








SCHEDULE 4.19(B)




Employees




Employees of Wood Group Power Operations (West), Inc.:

Anderson, Cory Dean

*Battle, Philip

* Crum, Edward E

*Freese, Scott A

*Hendrickson, Greg J.

*Laponsie, Duane J

*Mandrick, James A.

*Maxey, Tyrone C

*Mixter, Ronald Jr.

*Moore, Keith

*Moran, Phillip R.

*Tyni, Casey Richard

*Vikstrom, Michael S

*Wilson, John R

Keefe, George

Phillips, Pamela

Roth, Brian David




One Additional EH&S Employee to be hired.




 




			
	*	 	Persons represented by a union or other collective bargaining entity under that certain
Collective Bargaining Agreement between Zeeland Power Company, LLC, Sugar Creek, LLC
and the United Steelworkers of America, AFL-CIO-CLC on behalf of local 12502 dated
December 19, 2002 and effective January 1, 2004 and the Memorandum of Understanding for
Contract Extension between United Steelworkers and Sugar Creek, LLC and Zeeland Power
Company, LLC, dated November 29, 2006.



Ny\128521O.2




 









 








SCHEDULE 4.19(c)




Third Party Vendor Employees



1. Long Term Service Agreement by and between Zeeland Power Company, LLC and
General Electric International, Inc. for the Simple Cycle Facility, dated June 16, 2004



2. Long Term Service Agreement by and between Zeeland Power Company, LLC and
General Electric International, Inc., for the Combined Cycle Facility, dated June 16, 2004



3. Operation and Maintenance Agreement for the Zeeland Electric Facility by and between
LS Power Acquisition Co I, LLC and Wood Group Power Operations (West), Inc., dated
February 12, 2007




Ny\1285210.2




SCHEDULE 4.20




Employee Benefits




Union

1. Accident and Sickness Policy

2. Accidental Death & Dismemberment Policy

3. Retiree Medical Policy

4. Life Insurance Policy

5. Long Term Disability Policy

6. Health Benefits Plan

7. Employee Savings Plan

8. Dental

9. Tax Saver

10. Vision Care




Non Union

1. Accident and Sickness Policy

2. Accidental Death & Dismemberment Policy

3. Retiree Medical Policy

4. Life Insurance Policy

5. Long Term Disability Policy

6. Health Benefits Plan

7. Employee Savings Plan

8. Dental

9. Tax Saver

10. Vision Care

11. Severance Plan

12. Vacation

13. Dependent Care Policy

14. Short Term Disability




Ny\1285210.2




 









 








SCHEDULE 5.3




Buyer Approvals




Hart-Scott-Rodino (HSR)




Federal Energy Regulatory Commission (FERC)




Acceptable Order from the Michigan Public Service Commission (MPSC)




Ny\1285210.2




SCHEDULE 5.9




Conflicts



1. The Balance Energy Initiative filed by Buyer with the MPSC on April 30, 2007 (MPSC case
number 15290).




Ny\1285210.2




 









 








SCHEDULE 6.3




Exceptions to Conduct of Business



See Schedule 4.10.



Entry into forward MISO Designated Network Resource Capacity Sales Agreements



Seller shall not, and shall cause the Project Company not to, with respect to the Project Company
or the Project without the written consent of Buyer, not to be unreasonably withheld or delayed,
enter into any renewal or extension of the CBA for a term beyond June 30, 2008.



Terminate the Energy Management Agreement (“EMA”) or Operations and Maintenance
Agreement (“O&M Agreement”)



Amend, revise or assign the EMA or O&M Agreement (provided that such amendment or
revision is on not more materially favorable terms to the respective counterparty)




Ny\1285210.2




SCHEDULE 6.5




Terminated Contracts



None.




Ny\1285210.2




 









 








SCHEDULE 6.10




Books and Records



Such books and records provided by Mirant with respect to the Project Company and the Project.



Seller shall promptly notify Buyer of any material change (in terms of timing and content) of the
financial information that it provides to its lenders pursuant to Section 7.1 of the Seller Credit
Agreement (or any successor financing arrangements).




Ny\1285210.2




SCHEDULE 6.17




Support Obligations



1. Irrevocable Letter of Credit in the amount of $85,000 issued to the Michigan Department of
Environmental Quality on behalf of Broadway Gen Funding, LLC in support of Zeeland
Power Company, LLC, Date of Expiry May 1, 2008



2. Letter of Credit or Guaranty under SEMCO Transportation Services Contract l



3. As required under Items 15 (relating to the Project Company), 17 and 26 on Schedule 4.13



4. Irrevocable Letter of Credit, effective May 17, 2007, in the amount of $71,000, issued to the
Midwest Independent Transmission System Operator, Inc.






 




			
	1 	 	Mirant Americas Inc. did not re-post this obligation. As of the date of May 24, 2007, neither
Seller nor any of its Affiliates has received a request to re-post this obligation.





Ny\1285210.2




SCHEDULES

3.1, 3.2, 3.3(A), 3.3(B), 3.4, 3.5, 3.6, 4.1,4.6, 4.15(B), 4.16(A), 4.16(B), 4.17, 4.19(A), 4.19 (D)-
(H),4.21




Ny\1285210.2




 









 








SCHEDULE 11.13




Parcel Three Quit Claim Deed



QUIT CLAIM DEED



 




The Grantor(s): Broadway Gen Funding, LLC, whose address is at c/o Broadway Generating Company, Two
Tower Center, 11th Floor, East Brunswick, New Jersey 08816 quit-claim(s) to Zeeland Power Company,
LLC whose address is c/o
                                         the following described premises situated in
Zeeland, County of Ottawa, and State of Michigan:




          See Attached Exhibit A.



for the sum of Ten Dollars ($10.00), subject to all easements and restrictions of record and the
following restriction:

If the real estate conveyed by this deed is not a lot within a platted subdivision, Grantee should
take into account that it may be located within the vicinity of farmland or a farm operation.
Generally accepted agricultural and management practices which may generate noise, dust, odors, and
other associated conditions may be used and are protected by the Michigan right to farm act. This
notice is given pursuant to Section 109 (4) of the land division act, being PA 288,1967 as amended.



Grantor grants to Grantee the right to make all permissible divisions under Section 108 of the Land
Division Act, P A 288, 1967, as amended.



Dated this
___ day of ___, 2008.




	 	 	 	 	 
	Signed in the presence of
	 	Signed by:






When Recorded Return to:

Alyssa Mayer

Latham & Watkins LLP

885 Third Avenue

New York, NY 10022

Tax Parcel #70-17-17-101-022

Ny\1285210.2

Send Subsequent Tax Bills To:

Scott Carver

Broadway Generating Company, LLC

Two Tower Center, 11th Floor

East Brunswick, New Jersey 08816

Recording Fee: $14

Drafted By:

Alyssa Mayer

Latham & Watkins LLP

885 Third Avenue




 









 





New York, NY 10022

(212) 906-1878

Transfer Tax: Exempt: MCL207505(a)

MCL207526(a)




Ny\1285210.2



STATE OF COUNTY OF )

) SS.

)



On the ___ day of ___ in the year 2008 before me, the undersigned, a Notary Public in and for said
State, personally appeared , personally known to me or proved to me on the basis of satisfactory
evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which
the individual(s) acted, executed the instrument.




Notary Public




Ny\1285210.2





 









 








EXHIBIT A



A tract of land located in Zeeland, Ottawa County, Michigan. The land referred to in is taxed under
tax parcel numbers 07-17-17-101-022, and is more specifically described as follows:



PART OF E 1/2 OF NW 1/4 COM N 1/4 COR, TH N 89D 22M 17S W 1329.49 FT & S 0D 27M 33S W 1500 FT ALG W
1/8 LI TO PT OF BEG, TH S 89D 22M 17S E 1124.81 FT, N 60D 42M 54S E 122.6 FT, TH N 60D 47M 14S E
113.93 FT TO N&S 114 LI, TH S 0D 25M 38S W 230.11 FT ALG SD LI TO N’LY LI OF CSX RR R/W, TH S 60D
42M 54S W ALG RR R/W TO INTERS WITH A LI COM NW SEC COR, TH S 89D 22M 17S E 664.75 FT & S 0D 28M
30S W 1690.01 FT ALG W LI OF E 1/2 OF W 1/2 OF NW 1/4 TO PT OF BEG SD LI, TH S 89D 22M 17S E
1860.27 FT TO PT OF ENDING SD LI ON N’L Y LI CSX RR R/W, TH N 89D 22M 17S W ALG SD LI TO PT S 0D
27M 33S W OF BEG, TH N 0D 27M 33S E TO BEG. SEC 17 T5N R14W FROM 70-17-17-101-018 1/03.



Ny\1285210.2