**Exhibit 10.1**

**EXECUTION COPY**

**MEMBERSHIP INTEREST PURCHASE AND SALE AGREEMENT**

**Dated**

**January 31, 2007**

**between**

**Alliance Energy Renewables, LLC**

**and**

**Mirant New York, Inc.**

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**TABLE OF CONTENTS**
|                                                          | ** ** | ** **                                                                  | ** ** | **Page** |
|----------------------------------------------------------|------------|-----------------------------------------------------------------------------|------------|----------|
| ARTICLE I                                                |       |                                                                        |       | 2        |
| 1.A                                                      |       | Defined Terms                                                               |       | 2        |
| 1.B.                                                     |       | Interpretation                                                              |       | 10       |
|                                                     |       |                                                                        |       |     |
| ARTICLE II SALE AND PURCHASE OF THE MEMBERSHIP  INTEREST |       | 11                                                                          |
| 2.01                                                     |       | Membership Interest to be Sold                                              |       | 11       |
| 2.02                                                     |       | Purchase Price and Payment                                                  |       | 11       |
| 2.03                                                     |       | Adjustments to the Purchase Price                                           |       | 11       |
| 2.04                                                     |       | Allocation of Purchase Price                                                |       | 14       |
|                                                     |       |                                                                        |       |     |
| ARTICLE III THE CLOSING                                  |       | 15                                                                          |
| 3.01                                                     |       | Time and Place; Effective Time of Transfer                                  |       | 15       |
| 3.02                                                     |       | Deliveries by Seller                                                        |       | 15       |
| 3.03                                                     |       | Deliveries by Purchaser                                                     |       | 16       |
|                                                     |       |                                                                        |       |     |
| ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER      |       | 16                                                                          |
| 4.01                                                     |       | Power to Sell the Membership Interest                                       |       | 16       |
| 4.02                                                     |       | Corporate Organization                                                      |       | 16       |
| 4.03                                                     |       | Due Authorization and Execution; Valid and Binding  Agreement; No Violation |       | 17       |
| 4.04                                                     |       | Capitalization                                                              |       | 17       |
| 4.05                                                     |       | Licenses and Permits; Consents and Approvals of  Governmental Authority     |       | 18       |
| 4.06                                                     |       | Financial Statements                                                        |       | 18       |
| 4.07                                                     |       | No Undisclosed Liabilities                                                  |       | 18       |
| 4.08                                                     |       | Absence of Certain Changes                                                  |       | 18       |
| 4.09                                                     |       | Real Property Leases, Easements and Licenses                                |       | 19       |
| 4.10                                                     |       | Litigation                                                                  |       | 19       |
| 4.11                                                     |       | Subsidiaries                                                                |       | 19       |
| 4.12                                                     |       | Taxes                                                                       |       | 19       |
| 4.13                                                     |       | NYISO                                                                       |       | 19       |
| 4.14                                                     |       | Bank Accounts                                                               |       | 19       |
| 4.15                                                     |       | Compliance with Law                                                         |       | 20       |
| 4.16                                                     |       | Material Contracts; Contracts with Affiliates                               |       | 20       |
| 4.17                                                     |       | Consents                                                                    |       | 20       |
| 4.18                                                     |       | Title to Assets                                                             |       | 20       |
| 4.19                                                     |       | No Other Representations or Warranties; Disclaimer                          |       | 21       |
|                                                     |       |                                                                        |       |     |
| ARTICLE V REPRESENTATIONS AND WARRANTIES OF  PURCHASER   |       | 22                                                                          |
| 5.01                                                     |       | Corporate Organization                                                      |       | 22       |
| 5.02                                                     |       | Authorization                                                               |       | 22       |
| 5.03                                                     |       | No Violation                                                                |       | 22       |
| 5.04                                                     |       | Consents and Approvals of Governmental Authoritiess                         |       | 22       |
| 5.05                                                     |       | Litigation                                                                  |       | 23       |

 

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| 5.06                                               |   | Brokers                                                                                   |   | 23     |
|----------------------------------------------------|--------|-------------------------------------------------------------------------------------------|--------|--------|
| 5.07                                               |   | “AS IS” SALE                                                                    |   | 23     |
| 5.08                                               |   | Due Diligence Inspections and Reviews                                                     |   | 23     |
|                                               |   |                                                                                      |   |   |
| ARTICLE VI CONDUCT OF BUSINESS PENDING THE CLOSING |   | 23                                                                                        |
| 6.01                                               |   | Regular Course of Business                                                                |   | 23     |
| 6.02                                               |   | Amendments                                                                                |   | 23     |
| 6.03                                               |   | Capital Changes                                                                           |   | 24     |
| 6.04                                               |   | Environmental Remediation; Requirements of  Governmental Authorities                      |   | 24     |
|                                               |   |                                                                                      |   |   |
| ARTICLE VII COVENANTS OF THE PARTIES               |   | 24                                                                                        |
| 7.01                                               |   | Reasonable Access                                                                         |   | 24     |
| 7.02                                               |   | Confidentiality                                                                           |   | 24     |
| 7.03                                               |   | Hart-Scott-Rodino Act                                                                     |   | 25     |
| 7.04                                               |   | Access to Records;                                                                        |   | 25     |
| 7.05                                               |   | Regulatory and Other Authorizations and Consents                                          |   | 25     |
| 7.06                                               |   | Employee Matters                                                                          |   | 26     |
| 7.07                                               |   | No Public Announcement                                                                    |   | 26     |
| 7.08                                               |   | Certain Amounts Owed To Seller and Its Affiliates                                         |   | 26     |
| 7.09                                               |   | Provisions Relating to Treatment of Assets and  Liabilities of the Company Under the Plan |   | 26     |
| 7.10                                               |   | Break-Up Fee                                                                              |   | 27     |
| 7.11                                               |   | Further Assurances                                                                        |   | 27     |
| 7.12                                               |   | Supplements to Schedules                                                                  |   | 27     |
| 7.13                                               |   | Tax Matters                                                                               |   | 27     |
| 7.14                                               |   | Required Consents                                                                         |   | 28     |
| 7.15                                               |   | Bankruptcy Court Orders and Related Matters                                               |   | 29     |
| 7.16                                               |   | Purchaser Contact with Vendors and Employees                                              |   | 32     |
| 7.17                                               |   | Taxes, Prorations and Closing Costs                                                       |   | 32     |
| 7.18                                               |   | Acknowledgement by Purchaser                                                              |   | 33     |
| 7.19                                               |   | No Recourse                                                                               |   | 33     |
| 7.20                                               |   | Advice of Changes                                                                         |   | 33     |
| 7.21                                               |   | Casualty Loss                                                                             |   | 33     |
| 7.22                                               |   | Post Closing — Information and Records                                               |   | 35     |
| 7.23                                               |   | Insurance                                                                                 |   | 35     |
| 7.24                                               |   | Use of Certain Names                                                                      |   | 35     |
| 7.25                                               |   | Settlement Agreement                                                                      |   | 36     |
| 7.26                                               |   | Registration of Company with NYISO                                                        |   | 36     |
| 7.27                                               |   | Gas Transportation and Balancing Services Agreement                                       |   | 36     |
| 7.28                                               |   | Air Title V Permits (Hillburn and Shoemaker  Facilities)                                  |   | 37     |
| 7.29                                               |   | Assignment of Certain Purchase Orders                                                     |   | 37     |
|                                               |   |                                                                                      |   |   |
| ARTICLE VIII MUTUAL CONDITIONS                     |   | 37                                                                                        |
| 8.01                                               |   | HSR Act                                                                                   |   | 37     |
| 8.02                                               |   | Regulatory and Other Authorizations and Consents                                          |   | 37     |
| 8.03                                               |   | Orders                                                                                    |   | 37     |

 

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| ARTICLE IX CONDITIONS TO PURCHASER’S OBLIGATIONS |   | 38                                                                                                          |
|-------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------|
| 9.01                                                  |   | Representations and Warranties True                                                                         |   | 38 |
| 9.02                                                  |   | Performance                                                                                                 |   | 38 |
| 9.03                                                  |   | Certificates; Evidence of Compliance                                                                        |   | 38 |
| 9.04                                                  |   | Board Resolutions                                                                                           |   | 38 |
| 9.05                                                  |   | Bankruptcy Court Orders                                                                                     |   | 38 |
|                                                  |   |                                                                                                        |   |   |
| ARTICLE X CONDITIONS TO SELLER’S OBLIGATIONS     |   | 38                                                                                                          |
| 10.01                                                 |   | Representations and Warranties True                                                                         |   | 38 |
| 10.02                                                 |   | Performance                                                                                                 |   | 39 |
| 10.03                                                 |   | Certificates                                                                                                |   | 39 |
| 10.04                                                 |   | Board Resolutions                                                                                           |   | 39 |
| 10.05                                                 |   | Pending Insurance Claims                                                                                    |   | 39 |
| 10.06                                                 |   | Bankruptcy Court Orders                                                                                     |   | 39 |
| 10.07                                                 |   | Termination of Gas Transportation Agreement                                                                 |   | 39 |
| 10.08                                                 |   | Modification of Title V Permits                                                                             |   | 39 |
|                                                  |   |                                                                                                        |   |   |
| ARTICLE XI SURVIVAL AND INDEMNIFICATION               |   | 39                                                                                                          |
| 11.01                                                 |   | Survival                                                                                                    |   | 39 |
| 11.02                                                 |   | Indemnification                                                                                             |   | 40 |
| 11.03                                                 |   | Limitations on Indemnification                                                                              |   | 42 |
| 11.04                                                 |   | Purchaser’s Release of Seller                                                                          |   | 42 |
| 11.05                                                 |   | Mitigation and Limitation on Claims. Notwithstanding  anything to the contrary contained in this Agreement: |   | 43 |
|                                                  |   |                                                                                                        |   |   |
| ARTICLE XII TERMINATION AND REMEDIES                  |   | 43                                                                                                          |
| 12.01                                                 |   | Rights To Terminate                                                                                         |   | 43 |
| 12.02                                                 |   | Specific Performance                                                                                        |   | 44 |
| 12.03                                                 |   | Purchaser’s Remedies                                                                                   |   | 45 |
| 12.04                                                 |   | Seller’s Remedies                                                                                      |   | 45 |
| 12.05                                                 |   | Effect of Termination                                                                                       |   | 45 |
|                                                  |   |                                                                                                        |   |   |
| ARTICLE XIII MISCELLANEOUS PROVISIONS                 |   | 46                                                                                                          |
| 13.01                                                 |   | Commissions and Finders’ Fees                                                                          |   | 46 |
| 13.02                                                 |   | Amendment and Modification                                                                                  |   | 46 |
| 13.03                                                 |   | Waiver of Compliance                                                                                        |   | 46 |
| 13.04                                                 |   | Expenses                                                                                                    |   | 46 |
| 13.05                                                 |   | Notices                                                                                                     |   | 46 |
| 13.06                                                 |   | Assignment                                                                                                  |   | 47 |
| 13.07                                                 |   | Governing Law                                                                                               |   | 47 |
| 13.08                                                 |   | Jurisdiction of Bankruptcy Court                                                                            |   | 48 |
| 13.09                                                 |   | Effect of Closing Over Known Unsatisfied Conditions  or Breached Representations, Warranties or Covenants   |   | 48 |
| 13.10                                                 |   | Dispute Resolution                                                                                          |   | 48 |
| 13.11                                                 |   | Delays or Omissions                                                                                         |   | 49 |
| 13.12                                                 |   | Conflicts                                                                                                   |   | 50 |
| 13.13                                                 |   | Counterparts                                                                                                |   | 50 |

 

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| 13.14 |   | Effectiveness; Binding Effect |   | 50 |
|-------|--------|-------------------------------|--------|----|
| 13.15 |   | Headings                      |   | 50 |
| 13.16 |   | Entire Agreement              |   | 50 |
| 13.17 |   | No Recourse Against Others    |   | 50 |
| 13.18 |   | Third Parties                 |   | 50 |
| 13.19 |   | Mutual Agreement              |   | 51 |
| 13.20 |   | Severability                  |   | 51 |

 

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**SCHEDULES**
|           |   |                                                            |
|-----------|--------|-----------------------------------------------------------------|
| 1.1       |   | Seller’s Representatives                                   |
| 1.2       |   | Purchaser’s Representatives                                |
| 1.41      |   | Escrow Agreement                                                |
| 1.45      |   | Hydroelectric and Gas Turbine Generating Stations               |
| 2.03(c)   |   | Pre-Approved Capital Expenditures                               |
| 3.02      |   | Form of Assignment for Membership Interest Transfer             |
| 3.02(d-1) |   | Assignment of Insurance Claims                                  |
| 3.02(d-2) |   | Assignment of Claims Against Third Parties                      |
| 3.03(a)   |   | Wire Transfer                                                   |
| 4.03      |   | Agreements Requiring Consent, Notification, Etc.  (Seller)      |
| 4.05      |   | Consents and Approvals of Governmental Authorities  (Seller)    |
| 4.07      |   | Certain Liabilities                                             |
| 4.08      |   | Certain Changes                                                 |
| 4.09      |   | Real Property Leases, Easements and Licenses                    |
| 4.10      |   | Litigation                                                      |
| 4.12      |   | Taxes                                                           |
| 4.14      |   | Bank Accounts                                                   |
| 4.15      |   | Compliance with Law                                             |
| 4.16      |   | Material Contracts                                              |
| 4.17      |   | Consents                                                        |
| 4.18      |   | Title to Assets                                                 |
| 5.04      |   | Consents and Approvals of Governmental Authorities  (Purchaser) |
| 5.05      |   | Litigation (Purchaser)                                          |
| 7.15(b)   |   | Sale Procedures Order                                           |
| 7.15(c)   |   | Sale Order                                                      |
| 7.25      |   | Cross-Indemnity Agreement                                       |

 

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This **MEMBERSHIP INTEREST PURCHASE AND SALE AGREEMENT** (this “Agreement”)is made, as of the 31st day of January, 2007, by and between Mirant New York,Inc., a corporation organized under the laws of the State of Delaware (“**Seller**”), and Alliance Energy Renewables, LLC, a limitedliability company organized under the laws of the State of New York (“**Purchaser**”).

**BACKGROUND**

A.            Sellerowns a 100% membership interest (the **“Membership Interest”**)in Mirant NY-Gen, LLC, a limited liability company organized under the laws ofthe State of Delaware (the **“Company”**or **“Mirant NY-Gen”**) constituting all of the outstandingmembership interests of the Company. This Agreement sets forth the terms andconditions upon which Purchaser will purchase the Membership Interest from Seller.

B.            Subjectto the entry of the Bankruptcy Court Orders (as hereinafter defined) and on theterms and conditions set forth herein, Seller desires to sell to Purchaser theMembership Interest and Purchaser desires to purchase the Membership Interest fromSeller.

C.            Sellerhas offered the Membership Interest pursuant to a competitive bidding processduring which Purchaser viewed information concerning the Membership Interestand completed its Due Diligence Inspections and Reviews (as defined herein).  The Parties recognize that the Assets (asdefined herein) in these transactions are being sold on an “as is” basis andfree and clear of all liens, claims, encumbrances and interests in accordancewith the terms and conditions herein and that the liabilities of the Companynow existing and hereafter arising through the Plan Effective Date (as definedherein) shall be satisfied and discharged pursuant to the Plan (as definedherein), at or prior to the Closing Date.

D.            OnJuly 14, 2003, Seller and certain of its Affiliates, including Mirant NY-Gen,filed voluntary petitions for relief under Chapter 11 of Title 11 of the UnitedStates Code (11 U.S.C. §§ 101, et seq.) (the “**BankruptcyCode**”), commencing cases in the United States Bankruptcy Court forthe Northern District of Texas, Fort Worth Division (the “**BankruptcyCourt**”), and continue to operate their respective businesses asdebtors and debtors-in-possession.

E.             TheParties recognize that it is in the best interest of Seller and its Affiliatesto pursue the transactions contemplated herein.

F.             Sellerand Purchaser are entering into this Agreement to evidence their respectiveduties, obligations and responsibilities.

**NOW,THEREFORE,**in consideration of the respectiverepresentations, warranties, covenants and agreements contained in thisAgreement, each of Seller and Purchaser agrees as follows:

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# ARTICLE I

CERTAINDEFINITIONS

## **1.A****          Defined Terms**.** **Asused in this Agreement each of the following terms shall have the followingmeaning:

**1.01****        “Action”** has themeaning set forth in Section 11.02(a).

**1.02**        “**Affiliate**”****of a Person means any other Person that (a) directly orindirectly controls the specified Person; (b) is controlled by or is underdirect or indirect common control with the specified Person; or (c) is an officer,director, employee, representative or agent or subsidiary of the Person. Forthe purposes of this definition, “**control**,”****when used with respect to any specified Person, means thepower to direct the management or policies of the specified Person, directly orindirectly, whether through the ownership of voting securities, partnership orlimited liability company interests, by contract or otherwise.

**1.03****       **“**Agreement**”means this Membership Interest Purchase and Sale Agreement, together with theSchedules and Exhibits hereto.

**1.04****        “Air Permits”** has themeaning set forth in Section 7.28.

**1.05****       **“**Assets”**means all of the Company’s tangible and intangible assets underlying thepresentation of such assets on the Company’s Interim Balance Sheet, as added toor removed during the period from such date to the Closing Date including, butnot limited to, and the Company’s generating plant to the extent not reflectedon said Interim Balance Sheet as a result of being fully written off or anyother similarly situated properties of the Company.

**1.06****       **“**Assignments”**means, collectively, each of the assignments in the form annexed hereto as Schedule3.02,Schedule 3.02(d)(1) and Schedule 3.02(d)(2) to beentered into pursuant to Section 2.01 and Section 2.03(f).

**1.07****        “Assumed Contracts”**means the executory leases, contracts and other agreements assumed by theCompany under the Plan, which agreements shall include, but not be limited to,any interconnection agreements to which the Company is a party prior to thePlan Effective Date, all such agreements to be included in a Schedule to bemutually agreed between the Parties and approved by the Bankruptcy Court.

**1.08****        “Auction”**has themeaning set forth in Section 7.15(g).

**1.09****       **“**BankruptcyCase**” means the voluntary petitions filed by Seller and Affiliatesof Seller, under Chapter 11 of Title 11 of the United States Code, as amendedand the resulting proceeding in the Bankruptcy Court.

**1.10****       **“**BankruptcyCode**” means the United States Bankruptcy Code, as the same may beamended from time to time, in each case as of the relevant date or dates.

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**1.11****       **“**BankruptcyCourt**” has the meaning set forth in paragraph D of the Recitalshereto.

**1.12****       **“**BankruptcyCourt Orders**” has the meaning set forth in Section 7.15(a).

**1.13****        “Break-Up Fee”**has themeaning set forth in Section 7.15(b).

**1.14****       **“**Business Day**”means a day other than Saturday, Sunday or a day on which banks are legallyrequired or permitted to be closed for business in the State of New York.

**1.15****       **“**CapitalExpenditure**”****means anyadditions or changes to or replacements of property, plant and equipment andany other expenditures or repairs (including capitalized maintenance costs)that would be capitalized on Seller’s balance sheet in accordance with Seller’scapitalization policy.

**1.16****       **“**Closing**”has the meaning set forth in Section 2.01.

**1.17****       **“**Closing Date**”has the meaning set forth in Section 3.01.

**1.18****       **“**Code**”has the meaning set forth in Section 2.04.

**1.19****       **“**CommerciallyReasonable Efforts**” means those efforts (i) which are reasonablyforeseeable by the Parties at the time of executing this Agreement, (ii) whicha Party would reasonably expect the other Party to take under the circumstancesin order to satisfy its obligations hereunder, and (iii) which a Party wouldundertake for its own benefit under similar circumstances in order to achievethe results contemplated by this Agreement; provided, however, that any effortsset forth in clauses (i)-(iii) will not require or include any expense orconduct not ordinarily incurred or engaged in by Persons seeking to implementtransactions of the type contemplated by this Agreement.

**1.20****       **“**Company**”has the meaning set forth in the Background section (A) of this Agreement.

**1.21****        “ConEd”** has themeaning set forth in Section 7.27.

**1.22****       **“**ConfidentialInformation**”****has themeaning assigned to such term in the Confidentiality Agreement.

**1.23****       **“**ConfidentialityAgreement**” means that certain Confidentiality Agreement datedSeptember 29, 2006 between Seller and Purchaser.

**1.24****        “Confirmation Order”**means the order of the Bankruptcy Court confirming the Plan and approving thetransactions contemplated therein.

**1.25****       **“**ConsentOrder**” means the Consent Order dated July 22, 2005, between theCompany and the New York Department of Environmental Conservation relating tocertain 

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environmental remediation at the Hillburn Facility**,**assuch Consent Order may be revised, amended or supplemented from time to time.

**1.26****       **“**CPR**”means the Center For Public Resources, Inc.

**1.27****        “Cross Indemnity Agreement”**has the meaning set forth in Section 7.24.

**1.28****       **“**Damages**”has the meaning set forth in Section 11.02(a).

**1.29****        “DEC”** means the NewYork State Department of Environmental Conservation.

**1.30****         “Disclosure Statement”**has the meaning set forth in Section 7.15(a).

**1.31****        “Disclosure StatementOrder”** has the meaning set forth in Section 7.15(a).

**1.32****       **“**Dispute**”has the meaning set forth in Section 13.07.

**1.33****        “Disputed Claims”** hasthe meaning set forth in Section 7.09.

**1.34****       **“**Down Payment**”has the meaning set forth in Section 2.02.

**1.35****       **“**DueDiligence Inspections and Reviews**” means any due diligence,inspection or review related to the Membership Interest and Assets anddescribed in or conducted pursuant to the terms and conditions of theConfidentiality Agreement.

**1.36****        “Effective Date”** meansthe date on which this Agreement is executed by the Parties.

**1.37****        “Encumbrances”** meansany mortgages, pledges, liens, security interests, conditional and installmentsale agreements, activity and use limitations, conservation easements, deedrestrictions, easements, encumbrances and charges of any kind.

**1.38****       **“**EnvironmentalLaws**” means any Governmental Rule relating to air emissions, storageand use of hazardous or toxic substances, generation, treatment, storage, anddisposal of hazardous wastes, waste water discharges and similar environmentalmatters, including the Comprehensive Environmental Response, Compensation, andLiability Act (42 U.S.C. § 9601 etseq.), the Hazardous MaterialsTransportation Act (49 U.S.C. § 1801 etseq.), the ResourceConservation and**Recovery Act (42 U.S.C. § 6901 etseq.), the Federal Water Pollution Control Act (33 U.S. C. § 1251 etseq.), the Clean Air Act (42 U.S.C. § 7401 etseq.), theToxic Substances Control Act (15 U.S.C. § 2601 etseq.), the OilPollution Act (33 U.S.C. § 2701 etseq.) and the EmergencyPlanning and Community Right-to-Know Act (42 U.S.C. § 11001 etseq.).

**1.39****        “Escrow Agent**” meansHiscock & Barclay, LLP.

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**1.40****       **“**EscrowAgreement**” means the escrow agreement among Seller, Purchaser andEscrow Agent dated as of the date hereof substantially in the form of Schedule1.41 hereto.

**1.41****       **“**Event ofLoss**” has the meaning set forth in Section 7.21(a).

**1.42****        “Final Order(s)**” meansan order of the Bankruptcy Court (i) that is not the subject of a pendingappeal, petition for certiorari, motion for reconsideration or otherproceedings for review, rehearing or reargument; (ii) that has not beenreversed, vacated, modified or amended, is not stayed and remains in full forceand effect; and (iii) respecting which the time to appeal, to petition forcertiorari, to move for reconsideration or to seek review, rehearing orreargument shall have expired, as a result of which such order shall havebecome final in accordance with Bankruptcy Rule 8002; provided, however, thatno order shall fail to be a Final Order solely because of the possibility thata motion pursuant to Rule 60 of the Federal Rules of Civil Procedure orBankruptcy Rule 9024 may be filed with respect to such order.

**1.43****       **“**FinancialStatements**” has the meaning set forth in Section 4.06.

**1.44****        “GAAP**” shall meangenerally accepted accounting principles for financial reporting in the UnitedStates.

**1.45****        “Gas TransportationAgreement”** has the meaning set forth in Section 7.27.

**1.46****       **“**GovernmentalApproval**” means any authorization, consent, approval, waiver,exception, variance, order, franchise, permit, license or exemption issued by,and any registration or filing with, any Governmental Authority.

**1.47****       **“**GovernmentalAuthority**”****means anyfederal, state, local or other governmental, regulatory or administrativeagency, governmental commission, department, board, subdivision, court,tribunal, or other governmental arbitrator, arbitral body or other authorityhaving jurisdiction over the matter or Person in question.

**1.48****       **“**GovernmentalRule**” means, with respect to any Person, any applicable law(including, but not limited to, common law), statute, treaty, rule, regulation,ordinance, order, code, judgment, decree, directive, injunction, writ orsimilar binding action or decision duly implementing any of the foregoing byany Governmental Authority, but does not include Governmental Approvals.

**1.49**        **“GrahamsvilleGenerating Facility”** means the approximately 18 MW hydroelectricelectric generating station located on Route 55A, Grahamsville, New York, andformerly owned by Orange and Rockland Utilities Inc. and previously leased toCompany, which lease expired on October 31, 2006.

**1.50****       **“**HazardousSubstances**” means any chemical, material or substance that is listedor regulated under applicable Environmental Laws as a “hazardous” or “toxic”substance or waste, or as a “contaminant,” or is otherwise listed or regulatedunder applicable Environmental Laws because it poses a hazard to human healthor the environment.

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**1.51****        “Hillburn Air Permit”**has the meaning set forth in Section 7.28.

**1.52****        “Hillburn Facility”**has the meaning set forth in item 1 on Schedule 1.45.

**1.53****       **“**HSR Act**”****has the meaning set forth in Section 7.03.

**1.54****        “Hydroelectric and GasTurbine Generating Stations”** means those stations listed on Schedule1.45.

**1.55****       **“**IndemnifyingParty**” has the meaning set forth in Section 11.02(a).

**1.56****       **“**Indemnitee**”has the meaning set forth in Section 11.02(a).

**1.57****        INTENTIONALLY OMITTED**

**1.58****        “Intercompany Claims”**meansall claims and causes of action existing****as of theClosing Date  that  theCompany has or could have asserted against Seller or any Affiliate ofSeller, including without limitation: (i) all “claims”, as defined in Section101(5) of the Bankruptcy Code against Seller or any Affiliate of Seller, andall causes of action against Seller or any Affiliate of Seller arising undersections 542, 544, 545, 547, 548, 549, 550, 552(b) and 553 of the BankruptcyCode or any comparable state law affecting creditors rights generally, andwhich constitute property of  the Company’s chapter 11 estateand (ii) any claims arising with respect to any accounts receivable due to theCompany from Seller or any Affiliate of Seller that have been assigned toSeller or its designee as further described in Sections 2.03(a)(i) and 2.03(f)of this Agreement.

**1.59**        “**InterimBalance Sheet**” has the meaning set forth in Section 4.06 (ii).

**1.60****       **“**Knowledge**”****or similar phrases in this Agreement means: (i) in thecase of Seller, the actual, current knowledge of Seller’s representatives orthe Company’s representatives listed in Schedule 1.1 at the date of thisAgreement (or, with respect to any certificate delivered pursuant to Section 9.03,the date of delivery of such certificate), provided that, with respect to anythird party claims against the Company, actual, current knowledge of therepresentatives listed on Schedule 1.1 shall be deemed to includeactual, current knowledge of any actual claims or any contingent or potentialclaims against the Company; and (ii) in the case of Purchaser, the actual,current knowledge of Purchaser’s representatives listed in Schedule 1.2at the date of this Agreement (or, with respect to the certificate deliveredpursuant to Section 10.03, the date of delivery of suchcertificate).

**1.61****       **“**Major Loss**”has the meaning set forth in Section 7.21(a).

**1.62****       **“**MaterialAdverse Effect**” means a material adverse effect upon (a) thebusiness, operations, assets, liabilities, condition (financial or otherwise)or results of operations of the Company, or (b) the ability of Seller toconsummate the transactions contemplated by this Agreement.

**1.63****       **“**MaterialContract**” has the meaning set forth in Section 4.16.

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**1.64****       **“**MembershipInterest**” has the meaning set forth in the Background section at thebeginning of this Agreement.

**1.65****        “MET”** has the meaningset forth in Section 4.16.

**1.66****       **“**Minor Loss**”****means an Event of Loss that is not a Major Loss.

**1.67****        “Mirant Energy Marketing”**has the meaning set forth in Section 4.16.

**1.68****        “Mirant MarketingAgreement”** has the meaning set forth in Section 4.16.

**1.69****        “Mirant NY-Gen”** hasthe meaning set forth in the Recitals hereto.

**1.70****        “Mirant Services”** hasthe meaning set forth in Section 4.16.

**1.71****       **“**NecessaryCapital Expenditure**”****means anyCapital Expenditure other than a Pre-Approved Capital Expenditure or aRemediation Expenditure that, in the exercise of Prudent Utility Practices, isreasonably necessary for the continued operation or maintenance of theHydroelectric and Gas Turbine Generating Stations or that is required byapplicable law. Necessary Capital Expenditure does not include any CapitalExpenditure undertaken primarily to expand or re-power the Hydroelectric andGas Turbine Generating Stations.

**1.72****        “NO****x Bubble”** has the meaning set forth in Section7.28.

**1.73****        “NYISO”** has the meaningset forth in Section 7.26.

**1.74****        “O&R SettlementAgreement”** has the meaning set forth in Section 7.25.

**1.75****       **“**Party**”****means either Seller or Purchaser, as the context requiresand “**Parties**” means, collectively, “Sellerand Purchaser”.

**1.76****       **“**Person**”means an individual, partnership, joint venture, corporation, limited liabilitycompany, trust, association or unincorporated organization, or any GovernmentalAuthority.

**1.77****        “Plan”** means theChapter 11 plan for Mirant NY-Gen providing, inter alia, for (a) the dischargeto the fullest extent permitted by the Bankruptcy Code of (i) all claimsagainst Mirant NY-Gen existing on the Plan Effective Date with the exception ofthe Southern Company Claims, and (ii) all liens, claims, encumbrances andinterests in any of the Assets existing on the Plan Effective Date, (b) theassumption of the Assumed Contracts, and (c) the retention by Seller of theMembership Interest, as the same may be amended, supplemented, or otherwisemodified from time to time, together with the exhibits and schedules thereto,as the same may be in effect at the time such Chapter 11 plan is confirmed bythe Bankruptcy Court.

**1.78****        “Plan Effective Date”**means the effective date of the Plan as defined in the Plan, which shall in noevent be sooner than the Closing Date.

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**1.79****       **“**Pre-ApprovedCapital Expenditures**” has the meaning set forth in Section 2.03(c).

**1.80****        “Prevailing Bidder”**has the meaning set forth in Section 7.15(g).

**1.81****       **“**PrudentUtility Practices**” means any of the practices, methods and actsengaged in or approved by a significant portion of the competitive electricgeneration industry for facilities similar to the Hydroelectric and Gas TurbineGenerating Stations during the relevant time period or any of the practices,methods or acts which, in the exercise of reasonable judgment in light of thefacts known at the time the decision was made, could have been expected toaccomplish the desired result at a reasonable cost consistent with goodbusiness practices, reliability, safety, law, regulation, environmentalprotection and expedition. Prudent Utility Practices are not intended to belimited to the optimum practices, methods or acts to the exclusion of allothers, but rather, to be acceptable practices, methods or acts generallyaccepted in the industry.

**1.82****       **“**PurchasePrice**” means the consideration to be paid for the MembershipInterest as set forth in Section 2.02.

**1.83****       **“**Purchaser**”****has the meaning set forth in the introductory paragraph ofthis Agreement.

**1.84****       **“**PurchaserIndemnified Parties”** has the meaning set forth in Section11.02(e).

**1.85****       **“**PurchaserRequired Consents**”****has themeaning set forth in Section 7.14(a).

**1.86****       **“**Records**”has the meaning set forth in Section 7.04.

**1.87**        **“RegulatoryApprovals”** means any regulatory approvals required from the FederalEnergy Regulatory Commission and the New York Public Service Commission.

**1.88****       **“**RelatedAgreements**” means the Confidentiality Agreement, the Assignments,and the Cross Indemnity Agreement (to the extent applicable).

**1.89****        “Remediation Expenditures”**means expenditures made and to be made by the Company for remediation workconducted pursuant to (i) the Consent Order and (ii) the Swinging BridgeRemediation Plan.

**1.90****       **“**Review Firm**”has the meaning set forth in Section 2.03(a).

**1.91****        “Sale Motion”** has themeaning set forth in Section 7.15(a).

**1.92****        “Sale Order”** has themeaning set forth in Section 7.15(c).

**1.93****        “Sale Procedures Order”**has the meaning set forth in Section 7.15(b).

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**1.94****       **“**Schedules**”means the schedules to this Agreement.

**1.95****       **“**Section**”means a numbered section of this Agreement included within the Article thatbegins with the same number as that section.

**1.96****       **“**Seller**”has the meaning set forth in the introductory paragraph of this Agreement.

**1.97****        “Seller Marks”** has themeaning set forth in Section 7.24.

**1.98****        “Seller Required Consents”**has the meaning set forth in Section 7.14(b).

**1.99****        “Seller Taxes”** has themeaning set forth in Section 7.15(c).

**1.100****     **“**Seller’sEstimate**”****has themeaning set forth in Section 7. 21(a).

**1.101****      “Shoemaker Air Permit”**has the meaning set forth in Section 7.28.

**1.102****     **“**SouthernCompany Claims**” has the meaning set forth in Section 11.02(e).

**1.103****     **“**Station**”has the meaning set forth in Section 7.21(a).

**1.104****      “Swinging Bridge Facility”**hasthe meaning set forth in item 5 on Schedule 1.45.

**1.105****      “Swinging Bridge BasicRemediation”** means the remediation work under the Swinging BridgeRemediation Plan other than the Unit 1 Fill-In.

**1.106****      “Swinging Bridge RemediationPlan”** means the remediation plan for the Swinging Bridge Facility approvedby the Federal Energy Regulatory Commission in its letter dated June 14, 2006,as such remediation plan may be revised, amended or supplemented from time totime.  For purposes of this Agreement,the remediation work under the Swinging Bridge Remediation Plan shall consistof the Swinging Bridge Basic Remediation and the Unit 1 Fill-In.

**1.107****     **“**Tax**”means any federal, state, local or foreign income, gross receipts, license,payroll, employment, excise, severance, stamp, occupation, premium, windfallprofits, environmental (including taxes under Section 59A of the InternalRevenue Code of 1986, as amended), customs duties, capital stock, franchise,profits, withholding, social security (or similar), unemployment, disability,real property (including assessments, fees or other charges based on the use orownership of real property), personal property, sales, use, transfer,registration, value added, alternative or add-on minimum, estimated tax, orother tax of any kind whatsoever, including any interest, penalty or additionthereto, whether disputed or not, including without limitation, any item forwhich a Person’s liability arises as a transferee or successor-in-interest.

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**1.108****     **“**Third PartyClaim**”****means a claim by a Person otherthan Seller or a Person related to Seller as described in Section 11.03or Purchaser or related to Purchaser as described in Section 11.02.

**1.109****     **“**Third PartySale**” has the meaning set forth in Section 7.15(g).

**1.110****      “Unit 1 Fill-In”** meansthat part of the Swinging Bridge Remediation Plan consisting of the volumetric “fill-in”of the penstock and tunnel of Unit 1 at the Swinging Bridge Facility.

**1.111****      “Unit 1 Fill-In Contract”**has the meaning set forth in Section 2.03(d)(ii).

## **1.B.****      Interpretation**.  In this Agreement, unless a clear contraryintention appears:

#### (i)            the singular numberincludes the plural number and vice versa;

#### (ii)           reference to any Personincludes such Person’s successors and assigns but, if applicable, only if suchsuccessors and assigns are permitted by this Agreement, and reference to aPerson in a particular capacity excludes such Person in any other capacity;

#### (iii)          reference to any genderincludes each other gender;

#### (iv)          reference to anyagreement (including this Agreement), document or instrument means suchagreement, document or instrument as amended or modified and in effect fromtime to time in accordance with the terms thereof and, if applicable, the termshereof;

#### (v)           reference to anyArticle, Section, Schedule or Exhibit means such Article, Section, Schedule orExhibit to this Agreement, and references in any Article, Section, Schedule,Exhibit or definition to any clause means such clause of such Article, Section,Schedule, Exhibit or definition;

#### (vi)          “hereunder,” “hereof,” “hereto”and words of similar import are references to this Agreement as a whole and notto any particular Section or other provision hereof or thereof;

#### (vii)         “including” (and withcorrelative meaning “include”) means including without limiting the generalityof any description preceding such term;

#### (viii)        relative to thedetermination of any period of time, “from” means “from and including,” “to”means “to but excluding,” and “through” means “through and including”;

#### (ix)           the word “will” shallbe construed to have the same meaning and effect as the word “shall”; and

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#### (x)            reference to any law(including statutes and ordinances) means such law as amended, modifiedcodified or reenacted, in whole or in part, and in effect from time to time,including rules and regulations promulgated thereunder.

# ARTICLE II

# SALE AND PURCHASE OF THEMEMBERSHIP INTEREST

## **2.01****     Membership Interest to beSold**.  Subject to the terms andconditions of this Agreement, at the Closing provided for in Section 3.01hereof (the “**Closing**”), Sellershall sell, transfer and deliver the Membership Interest to Purchaser, andPurchaser shall purchase the Membership Interest from Seller, pursuant toSection 363 of the Bankruptcy Code and the Sale Order.

## **2.02****     Purchase Price and Payment.**  Subject to the terms and conditions of thisAgreement, as consideration for the Membership Interest, Purchaser will pay toSeller in cash an aggregate of Three Million U.S. Dollars ($3,000,000) (the “**Purchase Price**”).  Purchaser shall pay ten percent (10%) of suchamount as a down payment (the “**Down Payment**”)to Escrow Agent within ten (10) Business Days of the Effective Date inaccordance with the terms and provisions of the Escrow Agreement.  The balance of the Purchase Price shall bepayable by Purchaser at the Closing. Both payments shall be made by wire transfer in U.S. Dollars inimmediately available funds to such account(s) as Seller will designate.

## **2.03****     Adjustments to thePurchase Price**.  The PurchasePrice is subject to adjustment in accordance with the following:

### (a)           Working Capital.

#### (i)            Within ninety (90)days after the Closing, Seller shall calculate the amount of net workingcapital at the Company as of the Closing Date and provide written notice ofsuch amount to Purchaser.  To the extentthat the amount of the net working capital is greater than zero, Purchasershall pay Seller an adjustment within fifteen (15) days of receiving the noticefrom Seller; and to the extent that the amount of the net working capital isless than zero, Seller shall pay Purchaser an adjustment within fifteen (15)days of issuing such notice.  Forpurposes hereof, “net working capital” shall mean cash and cash equivalents,accounts receivable (excluding accounts receivable due from its Affiliates thathave been assigned to Seller or its designee pursuant to Section 2.03(f)),prepayments (including prepaid real estate Taxes covering the period after theClosing Date) and fuel inventory (at the higher of cost or market) lesstrade accounts payable and accruals (excluding trade accounts and accruals dueto its Affiliates).  Accounts receivableshall also exclude: Tax refunds that are subject to the terms of Section2.03(b) below; and amounts related to insurance and other claims that aresubject to the terms of Section 2.03(e) below. Trade accounts payable and accruals shall also exclude: the remediationwork at the Swinging Bridge Facility****thatis subject to the terms of Section 2.03(d) below; amounts recorded forremediation and monitoring work at the Hillburn Facility; and asset retirement 

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#### obligations for all of the Company’sgenerating facilities.  The market valueof fuel inventory shall be determined by reference to the price listed inPlatts US Marketscan, Atlantic Coast, Low Sulfur Jet, Barge Quote, published onthe Closing Date, plus all applicable Taxes. If no price is published on theClosing Date, then the price shall be the average of (i) the price for thefirst day for which a price (as determined using the preceding methodology) ispublished that precedes the Closing Date and (ii) the price for the first dayfor which a price (as determined using the preceding methodology) is publishedthat next follows the Closing Date. If Platts US Marketscan, or the relevantlocation or fuel type ceases to be published, the Parties shall agree on theappropriate index to be used.

#### (ii)           In the event of adispute with respect to Seller’s calculation of the amount of net workingcapital and any adjustment to be paid by Purchaser or Seller pursuant hereto,Purchaser and Seller shall attempt to reconcile their differences.  If Purchaser and Seller are unable to do sowithin sixty (60) days of receipt by Purchaser of Seller’s written notice ofthe amount of its calculation, Purchaser and Seller shall submit the disputeditems for resolution to Deloitte & Touche, LLP (Atlanta Office) (the “**Review Firm**”) which, within ninety (90)days from such submission, shall determine and report to the Parties upon suchdisputed items, and such report shall be final, binding and conclusive on theParties hereto.  In acting pursuant tothis Section 2.03(a), the Review Firm shall have the rights, privilegesand immunities of an arbitrator, and its fees shall be paid one half byPurchaser and one half by Seller.

### (b)           Tax Refunds.  All refunds of Taxes relating to the Companywith respect to Tax periods ending on or before the Closing Date will be forthe account of Seller.  To the extent theCompany receives any such refund after the Closing Date, Purchaser shall paythe amount of such refund to Seller within five (5) Business Days of receipt.

### (c)           Pre-Approved CapitalExpenditures and Necessary Capital Expenditures.  From the Effective Date through the PlanEffective Date, the Company may (without Purchaser’s consent) make:  (i) the Capital Expenditures described on Schedule2.03(c) (the “**Pre-Approved CapitalExpenditures”**); and (ii) Necessary Capital Expenditures. Subject tothe provisions of Section 7.21(a), Purchaser will pay to Seller atClosing, as an addition to the Purchase Price, the amount of capitalcontributed by Seller to the Company during such period and expended by theCompany on account of all Pre-Approved Capital Expenditures and NecessaryCapital Expenditures made between the Effective Date and the Closing and nottheretofore paid by Purchaser.

### (d)           RemediationExpenditures.  From the EffectiveDate through the Closing, the Company may (without Purchaser’s consent) makethe Remediation Expenditures; subject to the following:

#### (i)            Purchaser shall not beliable to reimburse Seller for the Remediation Expenditures;

#### (ii)           the Unit 1 Fill-Inshall be done in accordance with a fixed price, lump sum contract for same tobe entered into by the Company prior to Closing 

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#### (the “**Unit1 Fill-In Contract**”), the requirements of the Federal EnergyRegulatory Commission, and other applicable legal requirements.  A copy of the proposed Unit I Fill-InContract shall be provided to Purchaser for Purchaser’s comments within areasonable time before it is to be finalized and it shall be attached to and,subject to any required approval of the Bankruptcy Court, become a part of thisAgreement in accordance with Section 7.12(a) and Schedule 2.03(d)(ii).  The Purchase Price shall be reduced by anamount equal to the difference between the amount stated in the Unit 1 Fill-InContract for completion of the work described therein and the unpaid portion ofthat amount on the Closing Date.  If theCompany does not enter into the Unit 1 Fill-In Contract on or before theClosing, the Purchase Price shall be reduced by the estimated amount agreed toby Purchaser and Seller at or before the Closing as the cost for completion ofthe Unit 1 Fill-In. In the event the Parties cannot agree on the estimatedamount as aforementioned, then the amount proposed by Seller shall prevail forpurposes of the Closing; provided, however, that Purchaser shall be entitled toinvoke the dispute resolution provisions contained in Section 13.10 hereof withrespect to such estimated amount; and, provided further, that the PurchasePrice shall be reduced by only such portion of the reduction determinedpursuant to this Section 2.03(d)(ii) which, when aggregated with the PurchasePrice reduction determined pursuant to Sections 2.03(d)(iii) and 2.03(e) andSeller’s liability under Section 11.03(b)(iii) hereof, does not exceed thePurchase Price.

#### (iii)          Seller shall make a goodfaith effort to cause Company to complete the Swinging Bridge Basic Remediationon or before the Closing Date.  If theSwinging Bridge Basic Remediation is not expected to be completed by theClosing Date, the Purchase Price shall be reduced in accordance with Section2.03(e) below; and

#### (iv)          **INTENTIONALLY OMITTED**

#### (v)           **INTENTIONALLY OMITTED**

#### (vi)          upon Closing and theadjustment of the Purchase Price in accordance with Sections 2.03(d) and2.03(e), if any, the Company shall be responsible for completing theremediation in accordance with the applicable Consent Order, Swinging BridgeRemediation Plan, and applicable law and, following Closing and, except asprovided in Section 2.03(e) below, Seller shall have no liability or obligationto Purchaser or Company for the costs of such completion.

### (e)           RemediationShortfall.  If the Company is notreasonably expected to complete the Swinging Bridge Basic Remediation on orbefore the Closing Date, then Seller shall notify Purchaser, within fifteen(15) days prior to the Closing, of Seller’s option to:

#### (i)            reduce the PurchasePrice for Seller’s good faith written estimate of amounts required to beexpended to complete the applicable remediation, or

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#### (ii)            cause the Company tocontract with a third party reasonably acceptable to Purchaser to complete theapplicable remediation, in which case the Purchase Price shall be reduced bythe amount payable to such third party under such contract;

#### provided,however, that in the case of either option specified in (i) or (ii)aforementioned, Seller’s liability shall be limited to an amount which, whenaggregated with Seller’s liability under Section 2.03(d) hereof and Section11.03(b)(iii) hereof, does not exceed the Purchase Price.

### (f)            Insurance Proceedsand Affirmative Claims Against Third Parties.  Prior to the Closing Date, the Companywill  (i) assign to Seller (or suchAffiliate of Seller as Seller may direct pursuant to the Plan) all of theCompany’s pending insurance claims filed with respect to and related to itsRemediation Expenditures at both the Swinging Bridge Facility and the HillburnFacility, which may include, but shall not be limited to, claims in respect ofproperty, business interruption, and environmental losses.  To the extent an insurance carrier paysamounts related to such claims to the Company after Closing, the Company shallhold such amounts in trust for Seller (or Seller’s Affiliate, as the case maybe) and Purchaser shall cause the Company to pay Seller or its Affiliate suchamounts within five (5) Business Days of receipt, (ii) assign to Seller (orsuch Affiliate of Seller as Seller may direct pursuant to the Plan)  the Company’s affirmative claims against anythird parties (including, but not limited to, claims originally filed in theBankruptcy Case against Orange and Rockland Utilities Inc. and ConsolidatedEdison, Inc. and/or any of their respective Affiliates) for actions orinactions arising prior to the Closing Date, and (iii) assign to Seller (orsuch Affiliate of Seller as Seller may direct pursuant to the Plan) allIntercompany Claims.  If requested bySeller, Purchaser shall cause re-organized Mirant NY-Gen to cooperate withSeller (or Seller’s designated Affiliate) in the prosecution of such insuranceand affirmative claims, including making personnel, records, and access to theAssets reasonably available as needed by Seller; provided, however, that thecosts of prosecuting any such claims shall be borne by, and be for the accountof, Seller.  It is expressly understoodthat nothing herein shall affect any claims that theCompany may or could have asserted against any Affiliatethat is party to the O&R Settlement Agreement for setoff, contribution,reimbursement or indemnity under the O&R Settlement Agreement, or any claimor cause of action that Purchaser or the Company may assert againstSeller or any other Affiliate of Seller arising under or related to thisAgreement or any agreement entered into pursuant to or in connection withthis Agreement.

## **2.04****     Allocation of PurchasePrice**.  Company is a disregardedentity under Section 7701 of the Internal Revenue Code, of 1986 as amended (the“**Code**”).  This purchase constitutes an assetacquisition under Code Section 1060.  ThePurchaser and the Seller shall allocate the Purchase Price to the Assets of theCompany within ninety (90) days after the Closing Date in a manner consistentwith Section 1060 of the Code and the Treasury Regulations thereunder.  Purchaser shall provide the initial draft ofthe allocation.  Each of the Purchaserand the Seller agrees to file Internal Revenue Service Form 8594, and allfederal, state, local and foreign Tax returns, in accordance with suchallocation.  Each of the Purchaser andthe Seller shall report the transaction contemplated by this Agreement forfederal income Tax and all other Tax purposes in a manner consistent with theallocation determined pursuant to this Section 2.04; provided, however, that ifthe Parties should fail to agree upon the allocation as herein described, thenthe matter shall be submitted to a nationally recognized valuation firm whosedecision regarding the allocation will 

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## be bindingupon the Parties.  Each of the Purchaserand the Seller agrees to provide the other promptly with any other informationrequired to complete Form 8594.  Each ofthe Purchaser and the Seller shall notify and provide the other with reasonableassistance in the event of an examination, audit or other proceeding regardingthe agreed upon allocation of the Purchase Price.

# ARTICLE III

# THE CLOSING

## **3.01****     Time and Place; EffectiveTime of Transfer**.

## (a)           Exceptas provided by the Bankruptcy Code, Federal Rules of Bankruptcy Procedure, orany order by the Bankruptcy Court in the Bankruptcy Case, the Closing of thetransactions contemplated by this Agreement will take place at the offices ofHiscock & Barclay, LLP, 50 Beaver Street, Albany, New York  12207-2830 at 10:00 A.M. local time, on theClosing Date (as hereinafter defined). Subject to Section 11.01 hereof, the Closing shall occur as soonas practicable after the conditions set forth in Articles VII, VIII, IX and Xhave been satisfied or waived, on a date specified in a written notice fromSeller to Purchaser, given at least five days prior to such date (the “**Closing Date**”), provided, however, thatsuch date shall not be sooner than the Plan Effective Date.

(b)           For all purposes, the transfer of the MembershipInterest by Seller to Purchaser pursuant to this Agreement shall be effectiveat 11:59 P.M. on the date of Closing.

## **3.02****     Deliveries by Seller**.  At the Closing, Seller shall deliver thefollowing to Purchaser:

### (a)           Assignment in the formof Schedule 3.02 hereto duly executed by Seller transferring theMembership Interest to Purchaser;

### (b)           a good standingcertificate for the Company from the Secretary of State of the State ofDelaware and from the Secretary of State of each jurisdiction in which theCompany is authorized to do business as a foreign limited liability company****bearing a date within fifteen (15) days ofthe Closing Date;

### (c)           resignations of theCompany’s managers and officers, effective on the Closing Date;

### (d)           a copy of theassignments referred to in Section 2.03(f) in the forms attached asSchedules 3.02(d-1) and 3.02(d-2) hereto;

### (e)           the variouscertificates, documents and instruments referred to in Article IX hereof;

### (f)            the Cross IndemnityAgreement  referred to in Section 7.25hereof (to the extent applicable) in the form attached as Schedule 7.25 hereto;and

### (g)           such other items as Purchaser deems reasonably necessary to effectuatethe transactions described in this Agreement; provided, however, that if anyrequired action with respect 

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### to the Gas TransportationAgreement as specified in Section 7.27 hereunder has not been completed, thenthe Company, Seller, Purchaser and the parties thereto shall enter into anarrangement to continue the Gas Transportation Agreement with respect to theCompany under the same provisions as existed prior to the Closing until suchtime as the replacement agreement specified in Section 7.27 hereunder has beenimplemented, and provided, further that, if Seller should be required to pay aconsideration to effectuate the obligations as provided in this clause (g),then Purchaser shall bear any costs other than nominal costs associated withthe same.

### (h)           all documents deliveredby Seller at Closing shall be effective as of 11:59 P.M. on the Closing Date.

## **3.03****     Deliveries by Purchaser**.  At the Closing, Purchaser shall deliver thefollowing to Seller:

### (a)           the amount of thePurchase Price to be paid at the Closing in accordance with Section 2.02,by wire transfer to the account(s) indicated on Schedule 3.03(a):

### (b)           a good standingcertificate for Purchaser from the Secretary of State of the State of New York,bearing a date within fifteen (15) days of the Closing Date; and

### (c)           the variouscertificates, documents and instruments referred to in Article X hereof; and

### (d)           such other items asSeller deems reasonably necessary to effectuate the transactions described inthis Agreement; provided, however, that if Purchaser is required to pay aconsideration to obtain or otherwise provide any such other item, then Sellershall bear any costs other than nominal costs associated with the same.

### (e)           all documents deliveredby Purchaser at Closing shall be effective as of 11:59 P.M. on the ClosingDate.

# ARTICLE IV

# REPRESENTATIONS ANDWARRANTIES OF SELLER

Sellerrepresents and warrants to Purchaser as follows:

## **4.01****     Power to Sell theMembership Interest**.  Subject toprior approval by the Bankruptcy Court, Seller has the power to sell, assign,transfer and deliver to Purchaser good title to the Membership Interest, freeand clear of all security interests, liens, pledges, assessments, options andencumbrances, and with no restriction on the voting rights and other incidentsof record ownership pertaining thereto.

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## **4.02     Corporate Organization**.

### (a)           Seller is a corporationvalidly existing and in good standing under the laws of the State of Delawareand has all requisite corporate power and corporate authority to enter intothis Agreement and to perform its obligations hereunder.

### (b)           The Company is a limitedliability company validly existing and in good standing under the laws of theState of Delaware and has all requisite corporate power and corporate authorityto carry on its business as it is now being conducted and to own the propertiesand assets it now owns; and is duly qualified or licensed to do business as aforeign limited liability company in good standing in all jurisdictions inwhich the ownership of property or the conduct of its business requires such qualification,except where the failure to so qualify would not have a Material AdverseEffect.

## **4.03     Due Authorization and Execution; Validand Binding Agreement; No Violation**.

### (a)           Subject to prior approval bythe Bankruptcy Court, the execution, delivery and performance by Seller of thisAgreement have been duly authorized by all necessary corporate action requiredby law or by Seller’s and the Company’s organizational documents.  This Agreement has been duly executed anddelivered by Seller and, assuming due authorization, including prior approvalof the Bankruptcy Court, and execution and delivery by Purchaser, constitutes avalid and binding agreement of Seller, enforceable in accordance with itsterms, except to the extent that the enforceability thereof may be limited byapplicable bankruptcy, insolvency, reorganization, moratorium or similar lawsaffecting generally the enforcement of creditors’ rights and rules of lawgoverning specific performance, injunctive relief or other equitable remedies.

### (b)           Except as set forth on Schedule4.05 and, assuming receipt of all consents and approvals required from (i)Governmental Authorities as disclosed in Schedule 4.03 and (ii) thirdparties other than Governmental Authorities as disclosed in Schedule 4.17,neither the execution and delivery of this Agreement by Seller nor theconsummation of the transactions contemplated hereby will violate any provisionof the organizational documents of Seller or the Company or, to the Knowledgeof Seller, violate, or be in conflict with, or constitute a default under, orcause the amendment, modification or acceleration of, or give any party theright to amend, modify or refuse to perform, or modify the time within whichduties are to be performed or rights or benefits are to be received under, orcause the acceleration of the maturity of any debt or obligation pursuant to,or result in the creation or imposition of any security interest, lien or otherencumbrance upon any property or asset of Seller or the Company under any lease,agreement, understanding, restriction or commitment or any judgment, decree, ororder of any court or Governmental Authority to which Seller or the Company isa party or by which Seller or the Company is bound, or to which the property ofSeller or the Company is subject, except for violations, conflicts or defaultswhich would not have a Material Adverse Effect.

## **4.04     Capitalization**.  As of the date of this Agreement, the numberof issued and outstanding membership interests of the Company consists of the MembershipInterest.  The Membership Interest isvalidly issued, fully paid and non-assessable; and the Membership Interest isowned of record by Seller.  As of thedate of this Agreement, there are no outstanding (a) securities convertibleinto, exchangeable for or evidencing the right to purchase any capital of theCompany; (b) options, warrants, calls or other rights to purchase or subscribeto the Company’s 

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## membershipinterests or securities convertible into, exchangeable for or evidencing theright to purchase any membership interests of the Company; or (c) contracts,commitments, agreements, understandings or arrangements of any kind relating tothe issuance of any membership interests of the Company, any such convertibleor exchangeable securities or any such other securities evidencing the right topurchase any such options, warrants or rights.

## **4.05     Licenses and Permits; Consents andApprovals of Governmental Authority. **

### (a)           To the Knowledge of Seller,Section A of Schedule 4.05 is a list of all licenses and permits issuedby a Governmental Authority to the Company relating to the operation of theCompany’s business (“Existing Licenses and Permits”).  Seller has no Knowledge that any license orpermit from a Governmental Authority is required for such operation otherthan:  (i) the Existing Licenses andPermits, and (ii) licenses and permits not presently held by the Company, ifany, but with respect to which such failure does not have a Material AdverseEffect.

### (b)           To the Knowledge of Seller,the consent or approval of a Governmental Authority is required in connectionwith the execution, delivery and performance of this Agreement by Seller or theconsummation by Seller of the transactions contemplated hereby with respect to:  (i) those Existing Licenses and Permitslisted in Section B of Schedule 4.05 including, but not limited to, anorder by the Federal Energy Regulatory Commission (“FERC”) under Section 203 ofthe Federal Power Act (16 USC §824b, as amended) authorizing Purchaser’sacquisition of the Membership Interests, (ii) those Consent Orders andagreements with Governmental Authority listed in Section C of Schedule 4.05,and (iii) the Bankruptcy Case.  Sellerdisclaims any representation or warranty regarding the requirement for theapproval or consent of a Governmental Authority in connection with theexecution, delivery and performance of this Agreement by Seller or theconsummation by Seller of the transactions contemplated hereby except to theextent set forth in this subparagraph (b) and as set forth on Schedule 4.05.

## **4.06     Financial Statements**.  Seller has heretofore delivered to Purchaserthe following (collectively, the “**FinancialStatements**”):  (a) unauditedbalance sheets of the Company as at December 31, 2004 and December 31, 2005 andunaudited statements of operations, cash flow and members’ equity for each ofthe fiscal years then ended; and (ii) an unaudited balance sheet of the Companyas at September 30, 2006 (the “**InterimBalance****Sheet**”) andunaudited statements of operations, cash flow and stockholders’ equity for thenine (9) month period then ended.  Suchfinancial statements of the Company are all in accordance with GAAP.

## **4.07     No Undisclosed Liabilities**.  Except as disclosed in the FinancialStatements, Schedule 4.07, or otherwise in this Agreement and theSchedules hereto, and except for liabilities and obligations incurred since thedate of the Interim Balance Sheet in the ordinary course of business, to theKnowledge of Seller, the Company has no liabilities of the type required to bereflected in financial statements in accordance with GAAP which would have aMaterial Adverse Effect which are not reflected or reserved against in theInterim Balance Sheet.

## **4.08     Absence of Certain Changes**.  To the Knowledge of Seller, except asdisclosed on Schedule 4.08 or as may be required by the BankruptcyCourt, since the date of the Interim Balance Sheet, (a) there has not been anyMaterial Adverse Effect, provided that, Seller makes no representations withrespect to (i) business or economic conditions which are generally applicable 

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## to companiesin the Company’s industry, (ii) changes in general business or economicconditions; (iii) any change resulting from the announcement or pendency of anyof the transactions contemplated by this Agreement; or (iv) any changeresulting from compliance by the Seller with the terms of, or the taking of anyaction required by, this Agreement, and (b) the Company has not suffered anymaterial damage or destruction to any of its Assets, which damage or destructionis not covered by insurance.

## **4.09     Real Property Leases, Easements andLicenses**.  Schedule4.09 lists all:  (a) leases pursuantto which the Company leases real property from or to other parties, and (b)easements and licenses pursuant to which the Company receives the right to usereal property or grants the right to others to use real property, but does notlist leases, easements or licenses the absence of which would not have aMaterial Adverse Effect .  Copies of suchleases and easements have been made available for review by Purchaser.  Except as set forth on Schedule 4.09,to the Knowledge of Seller, there are no existing defaults by the Companythereunder and no event of default has occurred which (whether with or withoutnotice, lapse of time or the happening or occurrence of any other event) wouldconstitute a default thereunder by the Company, except such defaults, events ofdefault or other events that would not have a Material Adverse Effect.

## **4.10     Litigation**.  Except as disclosed on Schedule 4.10,there is no action, suit, arbitration or proceeding pending or, to theKnowledge of Seller, threatened against the Company which, if adverselydetermined against the Company, would have a Material Adverse Effect.

## **4.11     Subsidiaries**.  The Company does not have any subsidiaries orown or have the contractual right to vote or to acquire equity interests or anyoption, right, warrant or other right or instrument convertible into orexchangeable or exercisable for any such equity interest of any entity,corporate or otherwise.

## **4.12     Taxes**.  The Company has filed all federal, state andlocal Tax returns required to be filed by it, all such Tax returns are correctand complete in all material respects and, except as disclosed on Schedule4.12, the Company has duly paid all Taxes shown to be due on such Taxreturns and there are no claims or Encumbrances against the Company or any ofits Assets due to any unpaid Taxes.  Theprovisions for Taxes reflected in the Interim Balance Sheet arereasonable.  There are no pending actionsor proceedings for the assessment or collection of Taxes from the Company and,except as disclosed on Schedule 4.12, there is currently no active orongoing Tax audit.

## **4.13     NYISO**.  The Assets participate in the energy andcapacity markets and certain ancillary services markets of the NYISO throughSeller’s Affiliate, Mirant Energy Trading, LLC. The Assets currently are not eligible to participate in certainancillary service markets of the NYISO, including voltage support, regulation,and black start services.

## **4.14     Bank Accounts**.  Schedule 4.14 sets forth the names ofall banks, trust companies, savings and loan associations, brokerage houses andother financial institutions at which the Company maintains accounts of anynature, and the names of all individuals authorized to draw thereon or makewithdrawals therefrom.

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## **4.15     Compliance with Law**.  Except as set forth on Schedule 4.15or otherwise in this Agreement and the Schedules hereto, to the Knowledge ofSeller,****the Company is in compliancein all material respects with all laws, ordinances, regulations, and ordersapplicable to them, the failure with which to comply would have a MaterialAdverse Effect.  Except as set forth on Schedule4.15, to the Knowledge of Seller, all licenses, franchises, permits andother Governmental Approvals held by the Company are valid and sufficient topermit the operations thereof except where the failure to hold such licenses,franchises, permits and other Governmental Approvals would not have a MaterialAdverse Effect.

## **4.16     Material Contracts; Contracts withAffiliates**. Schedule 4.16 lists each material, written contract or agreementof the Company that cannot be terminated on notice of thirty (30) days or less(each of which is herein referred to as a “**MaterialContract**”) other than real property leases, easements and licensesreferred to in Section 4.09, but does not list contracts or agreementsthe absence of which would not have a Material Adverse Affect.  Except as set forth on Schedules 4.09and 4.16 and except with respect to defaults based upon the filing ofthe Bankruptcy Case, to the Knowledge of Seller, with respect to the MaterialContracts, there is no existing default or event of default by the Company orany event which, with or without due notice or lapse of time or both, wouldconstitute a default or event of default by the Company, except such defaults,events of default and other events which, either individually or collectively,would not have a Material Adverse Effect. Except as set forth on Schedules4.09, 4.16 and 4.17, each of the Material Contracts is capable of beingassumed by the Company. Effective no later than the Closing Date, all contractsand agreements between or among the Company and any Affiliate of the Companyand/or Seller shall terminate, including without limitation: (i) that certainPower Sale, Fuel Supply and Services Agreement dated January 3, 2006, by andamong the Company, Mirant Energy Trading, LLC (“**MET**”), as the transferee from Mirant Americas EnergyMarketing, LP (“**Mirant Energy Marketing**”)and others (the “**Mirant MarketingAgreement**”) providing for, among other things, the sale by theCompany to MET of all or a portion of the capacity, electricity, ancillaryservices and/or other related products generated by, or available from, theCompany’s generating facilities, and (ii) that certain Administrative ServicesAgreement dated January 3, 2006, by and between the Company and MirantServices, LLC (“**Mirant Services**”)providing for the procurement by the Company from Mirant Services of certainadministrative, accounting and other similar services.

## **4.17     Consents**.  Except for approval by the Bankruptcy Courtand as otherwise listed on Schedule 4.17, to the Knowledge of Seller, noconsent of any third party (other then consents of Governmental Authoritieslisted on Schedule 4.03) is necessary to the consummation of thetransactions contemplated hereby, except consents whose failure to obtain wouldnot have a Material Adverse Effect.

## **4.18     Title to Assets**.  Except as set forth on Schedule 4.18,****the Company has good and valid title tothe Assets reflected in the Interim Balance Sheet, except Assets disposed of inthe ordinary course of business or related to the transfer of the GrahamsvilleGenerating Facility pursuant to the termination of the sublease for thatfacility, since the date of the Interim Balance Sheet. To Seller’s Knowledge,none of such Assets are subject to any encumbrance except (a) liens reflectedon the Interim Balance Sheet; (b) liens of landlords and liens imposed by law,such as carriers’, warehousemen’s, mechanics’, materialmen’s and vendors’ liensincurred in the ordinary course of business consistent with past practice; (c)purchase money liens arising or created in the 

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## ordinarycourse of business consistent with past practices; (d) minor imperfections oftitle, if any, none of which would, either individually or collectively, have aMaterial Adverse Effect; (e) liens for Taxes not yet due; and (f) leases,easements and licenses set forth on Schedule 4.09 or such othereasements, leases and licenses that would not, either individually orcollectively, have a Material Adverse Effect.

## **4.19     No Other Representations or Warranties;Disclaimer**.

### (a)           Except for the representationsand warranties contained in this Article IV, none of the Seller, the Company,nor any other Person acting on behalf thereof (including any of theirrespective Affiliates, officers, directors, employees, agents orrepresentatives) makes any representation or warranty, express, implied,statutory or arising by operation of law, and Seller hereby disclaims any suchrepresentations or warranties other than those contained in this Article IV,whether by Seller, the Company, or any of their respective Affiliates,officers, directors, employees, agents or representatives or any other Person,notwithstanding the delivery or disclosure to Purchaser or any of itsAffiliates, officers, directors, employees, agents or representatives or anyother Person of any documentation or other information by Seller, the Company,or any of their respective Affiliates, officers, directors, employees, agentsor representatives or any other Person. In connection with Purchaser’s investigation of the Company, Purchaserhas received from Seller and the Company certain financial information.  Purchaser agrees and acknowledges thatPurchaser is taking full responsibility for making its own evaluation of theadequacy and accuracy of all financial information so furnished to it, and thatPurchaser shall have no claim against Seller or any other Person with respectthereto, except as otherwise provided in this Agreement.  Accordingly, except as expressly provided inthis Article IV, Seller makes no representation or warranty with respect tosuch financial information.

### (b)           EXCEPT AS EXPRESSLY PROVIDEDIN THIS ARTICLE IV, PURCHASER IS ACQUIRING THE MEMBERSHIP INTEREST AND THECOMPANY “AS IS”, “WHERE IS” AND “WITH ALL FAULTS”, AND SELLER EXPRESSLYDISCLAIMS ALL OTHER REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORYOR ARISING BY OPERATION OF LAW. SPECIFICALLY, WITH RESPECT TO COMPANY’S ASSETS,EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, SELLER EXPRESSLYDISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS ORIMPLIED, AS TO THE CONDITION, VALUE OR QUALITY OF THE ASSETS OR AS TO THEPROSPECTS (FINANCIAL AND OTHERWISE) OR RISKS INCIDENTAL TO THE ASSETS. SELLERSPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY,USAGE, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THEASSETS OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE OFANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, OR AS TO COMPLIANCE WITHENVIRONMENTAL LAWS, OR AS TO THE CONDITION OF, OR COMPANY’S RIGHTS IN, OR ITSTITLE TO,  THE ASSETS, OR ANY PARTTHEREOF, OR WHETHER COMPANY POSSESSES SUFFICIENT REAL PROPERTY AND PERSONALPROPERTY INTERESTS TO OWN OR OPERATE THE ASSETS OR TO CONVEY THE ASSETS. EXCEPTAS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT.  SELLER FURTHER SPECIFICALLY DISCLAIMS ANYREPRESENTATION OR WARRANTY REGARDING THE ABSENCE OF HAZARDOUS 

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### SUBSTANCES ORLIABILITY OR POTENTIAL LIABILITY ARISING UNDER ENVIRONMENTAL LAWS. WITHOUTLIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS OTHERWISE EXPRESSLYPROVIDED IN THIS AGREEMENT, SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATION ORWARRANTY OF ANY KIND REGARDING THE CONDITION OF THE ASSETS OR THE SUITABILITYOF THE HYDROELECTRIC AND GAS TURBINE GENERATING STATIONS FOR OPERATION AS POWERPLANTS AND NO SCHEDULE OR EXHIBIT TO THIS AGREEMENT, NOR ANY OTHER MATERIAL ORINFORMATION PROVIDED BY OR COMMUNICATIONS MADE BY SELLER, WILL CAUSE OR CREATEANY WARRANTY, EXPRESS OR IMPLIED, AS TO THE CONDITION, VALUE OR QUALITY OF THEASSETS.

# ARTICLE V

# REPRESENTATIONS ANDWARRANTIES OF PURCHASER

Purchaserhereby represents and warrants to Seller as follows:

## **5.01     Corporate Organization**.  Purchaser is a limited liability companyvalidly existing and in good standing under the laws of its jurisdiction offormation and has full corporate power and corporate authority to carry on itsbusiness as it is now being conducted and to own the properties and assets itnow owns and to enter into this Agreement and to perform its obligationshereunder.

## **5.02     Authorization**.  Purchaser has taken all corporate actionrequired by law or its organizational documents to authorize the execution anddelivery of this Agreement and the consummation of the transactionscontemplated hereby and this Agreement, assuming due authorization, execution anddelivery by Seller, constitutes a valid and binding agreement of Purchaserenforceable in accordance with its terms, except to the extent that theenforceability thereof may be limited by applicable bankruptcy, insolvency,reorganization, moratorium or similar laws affecting generally the enforcementof creditors’ rights and rules of law governing specific performance,injunctive relief or other equitable remedies.

## **5.03     No Violation**.  Neither the execution and delivery of thisAgreement by Purchaser nor the consummation of the transactions contemplatedhereby will violate any provision of the organizational documents of Purchaser,or violate, or be in conflict with, or constitute a default under, or cause theamendment, modification or acceleration of, or give any Party the right toamend, modify or refuse to perform, or modify the time within which duties areto be performed or rights or benefits are to be received hereunder, or causethe acceleration of the maturity of any debt or obligation pursuant to, orresult in the creation or imposition of any security interest, lien or otherencumbrance upon any property or asset of Purchaser under, any lease,agreement, understanding, restriction or commitment or any judgment, decree, ororder of any court or governmental or regulatory authority or agency to whichPurchaser is a party or by which Purchaser is bound or to which the property ofPurchaser is subject.

## **5.04     Consents and Approvals of GovernmentalAuthoritiess**. Except for the Bankruptcy Court and as provided on Schedule 5.04,no consent, approval or authorization of, or declaration, filing orregistration with, any Governmental Authority is required in connection with 

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## the execution,delivery and performance by Purchaser of this Agreement or the consummation byPurchaser of the transactions contemplated hereby.

## **5.05     Litigation. **There is no pendingor, to Purchaser’s Knowledge, threatened action, investigation or request forinformation by any Governmental Authority or third person which could result,or has resulted, in (a) the institution of legal proceedings to prohibit orrestrain the performance of this Agreement or the consummation of thetransactions contemplated hereby or thereby, or (b) a claim for damages as aresult of this Agreement or the consummation of the transactions contemplatedhereby or thereby.  Except as set forthon Schedule 5.05, Purchaser has no Knowledge of any pending orthreatened litigation, claim, investigation or proceeding, private orgovernmental, which directly and specifically relates to the MembershipInterest.

## **5.06     Brokers**.  All negotiations relating to this Agreementand the transactions contemplated hereby have been carried on by Purchaserwithout the intervention of any other Person and in such a manner as not togive rise to any valid claim against Seller (by reason of Purchaser’s actions)for a brokerage commission, finder’s fee or other like payment to any Person.

## **5.07     “AS IS” SALE.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED INTHIS AGREEMENT, PURCHASER UNDERSTANDS AND AGREES THAT THE MEMBERSHIP INTERESTAND THE COMPANY’S ASSETS ARE BEING ACQUIRED “AS IS, WHERE IS” ON THE CLOSINGDATE, AND IN THEIR CONDITION ON THE CLOSING DATE AND THAT PURCHASER IS RELYINGON ITS OWN EXAMINATION OF THE COMPANY AND ITS ASSETS.**

## **5.08     Due Diligence Inspections and Reviews**.  Subject to any intentional misrepresentation,gross negligence or willful misconduct with respect to any information providedby Seller or its representatives, Purchaser acknowledges and agrees that ithas, prior to its execution of this Agreement, fully completed to itssatisfaction all of its due diligence inspections and reviews.  Subject to the provisions of Section 12.02hereof, Purchaser will bear all of its own costs, expenses and charges incurredin connection with its Due Diligence Inspections and Reviews.

# ARTICLE VI

# CONDUCT OF BUSINESSPENDING THE CLOSING

Pending theClosing, and except as otherwise consented to or approved by Purchaser inwriting, Seller agrees to cause the Company to do the following:

## **6.01     Regular Course of Business**.  Except as otherwise provided in Sections6.04, 7.27 and 7.28 below, the Company shall carry on its business diligentlyand substantially in the same manner as heretofore conducted, and the Companyshall not institute any new methods of purchase, sale, lease, management,accounting or operation or engage in any transaction or activity, enter intoany agreement or make any commitment, except in the ordinary course of businessconsistent with past practices or as required by the Bankruptcy Court.

## **6.02     Amendments**.  No change or amendment shall be made in theorganizational documents of the Company.

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## **6.03     Capital Changes**.  The Company will not issue or sell anymembership interests or other securities, acquire directly or indirectly, byredemption or otherwise, any such membership interests, reclassify or split-upany such membership interests, declare or pay any distributions thereon or makeany other distribution with respect thereto, or grant or enter into anyoptions, warrants, calls or commitments of any kind with respect thereto.

## **6.04     Environmental Remediation; Requirementsof Governmental Authorities**.  The Company shall operate in compliance withorders from and other requirements of Governmental Authorities, including theConsent Order dated July 22, 2005, with the New York Department ofEnvironmental Conservation relating to certain environmental remediation at theHillburn Facility and the remediation plan for the Swinging Bridge Facilityapproved by the Federal Energy Regulatory Commission in its letter dated June14, 2006 (as such Consent Order and remediation plan may be revised, amended orsupplemented from time to time).

# ARTICLE VII

# COVENANTS OF THE PARTIES

Seller herebycovenants and agrees with Purchaser, and Purchaser hereby covenants and agreeswith Seller that:

## **7.01     ReasonableAccess**. Seller shall cause the Company to afford Purchaser and authorizedrepresentatives of Purchaser reasonable access to the books and records of theCompany and to the employees working for the Company (all at reasonable timesduring regular business hours, upon prior notice to the Plant Manager of theCompany listed on Schedule 1.1 hereto and in a manner so as not to interferewith the normal business operations of the Company) in order that Purchaser mayhave an opportunity to make such investigations as it shall desire into theCompany and its business.

## **7.02     Confidentiality**.

### (a)           **General.**  Any Confidential Information furnished bySeller to Purchaser on and after the Effective Date shall be subject to theConfidentiality Agreement.  In the eventof any conflict between this Agreement and the Confidentiality Agreement, theprovisions of the Confidentiality Agreement shall prevail.

### (b)           **Regulatory Authorities****and Court of Competent Jurisdiction****.** Either Party may disclose ConfidentialInformation to any Governmental Authority or court of competent jurisdictionwhere such disclosure is necessary to comply with Section 7.13hereof.  To the extent permitted byapplicable Governmental Rules, the disclosing Party shall seek confidentialtreatment for the Confidential Information provided to any GovernmentalAuthority and the disclosing Party shall notify the other Party as far inadvance as is practicable of its intention to release Confidential Information toany Governmental Authority to enable the other Party to seek injunctive relief.

### (c)           **Disclaimer Regarding Tax Treatment.**  Notwithstanding anything in this Agreement orin any other written or oral understanding or agreement to which the Partieshereto may be bound, each Party may (i) consult any Tax advisor regarding theTax treatment and Tax structure of the transactions contemplated by thisAgreement, and (ii) at any time disclose to any 

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### Person,insofar as required to comply with Treasury Regulations Section 1.6011-4(b)(3),the Tax treatment and Tax structure of such transactions and all materials ofany kind (including opinions or other Tax analyses) that are provided relatingto such Tax treatment or Tax structure. The preceding sentence is intended to satisfy the requirements for thetransactions contemplated herein to avoid classification as a “confidentialtransaction” for purposes of Treasury Regulations Section 1.6011-4(b)(3) andshall be interpreted consistent with such intent.  This authorization is not intended to permitdisclosure of any information that is unrelated to the Tax treatment or Taxstructure of any transactions contemplated hereby, including (i) the identitiesof participants or potential participants in any such transactions, (ii) theexistence or status of any negotiations, and (iii) any pricing or financialinformation, except in each case to the extent such information is related tothe Tax treatment or Tax structure of any such transactions.  In addition, each Party acknowledges that ithas no proprietary or exclusive rights to the federal Tax structure of suchtransactions or any federal Tax matter or federal Tax idea related to suchtransactions.

### (d)           **Survival**.  The obligations of the Parties in this Section 7.02will survive the termination of this Agreement, the discharge of all otherobligations owed by the Parties to each other, any transfer of title to theMembership Interest, and the Closing of the transactions contemplated in thisAgreement.

## **7.03     Hart-Scott-RodinoAct**.  Ifrequired, each Party shall promptly file any Notification and Report Form andrelated material that it may be required to file with the Federal TradeCommission and the Antitrust Division of the United States Department ofJustice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSRAct”) and shall, subject to Section 7.06, use its best efforts to obtainan early termination of the applicable waiting period and make any furtherfilings or information submissions pursuant thereto that may be reasonablynecessary, proper or advisable.

## **7.04     Accessto Records;**.

### (a)           Prior to andfollowing the Closing, Seller shall provide Purchaser, its counsel, accountantsand other representatives with access to the books and records of the Companyfor periods ending on or before the Closing Date (collectively, the “**Records**”), upon reasonable notice duringnormal business hours.  Seller shall notdispose of any Records for a period of seven (7) years after the ClosingDate.  Thereafter, Seller shall not disposeof any Records until it has given reasonable notice to Purchaser of itsintention to do so and given Purchaser a reasonable opportunity to takepossession of the Records to be disposed of.

### (b)           Following theClosing, Purchaser shall provide Seller, its counsel, accountants and otherrepresentatives with access to the books and records of the Company for periodsending on or before the Closing Date (collectively, the “**Records**”), upon reasonable notice duringnormal business hours.  Purchaser shallnot dispose of any Records for a period of seven (7) years after the ClosingDate.  Thereafter, Purchaser shall notdispose of any Records until it has given reasonable notice to Seller of itsintention to do so and given Seller a reasonable opportunity to take possessionof the Records to be disposed of.

## **7.05     Regulatoryand Other Authorizations and Consents**.  Each Party will use its best efforts toobtain the authorizations, consents and approvals of federal, state or localregulatory 

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## bodies orother Persons as the same may be necessary for that Party to comply with itsobligations under this Agreement and to consummate the transactionscontemplated hereby and will cooperate fully with the other Party in promptlyseeking to obtain the authorizations, consents and approvals that are or maybecome necessary for such Party; provided, however, that neither Purchaser, onthe one hand, nor Seller or the Company, on the other hand, shall be obligatedto:  (a) undertake any additionalfinancial obligation, dispose of any property or surrender any material right;(b) otherwise consent to any arrangement or undertake any obligation thatwould, in its sole and reasonable judgment, materially adversely affect itsbusiness or properties; or (c) consent to the extension of the Closing Date ofthis Agreement beyond that provided in Section 12.01(a)(vi) of thisAgreement.  Without limiting thepreceding portion of this Section 7.05, Purchaser shall be responsible forobtaining the approval of the New York State Public Service Commission and theFederal Energy Regulatory Commission for the transaction contemplated by thisAgreement and agrees to file applications for such approvals within fifteen(15) days of the date of this Agreement. Seller agrees to join in such applications, and shall cause the Companyto do the same, provided however, that Purchaser shall be solely responsiblefor pursuing and obtaining such approvals and for the cost thereof.  The Parties hereto will not take any actionthat will or could have the effect of delaying, impairing or impeding thereceipt of any required authorizations, consents or approvals.

## **7.06     EmployeeMatters**. Nothing in this Agreement shall confer upon any employee of Seller or ofSeller’s affiliates, subsidiaries and/or third party administrators (“Seller’sEmployees”) the right to employment with Purchaser after the date ofClosing.  Further, Purchaser shall haveno rights, liabilities or obligations with respect to Seller’s Employees orindependent contractors for any period prior to Closing, nor will Purchaserhave any rights, liabilities or obligations with respect to any agreementsrelated to Seller’s Employees or independent contractors prior to Closing.

## **7.07     NoPublic Announcement**.  Neither Party shall issue any press releaseor make any other public announcement concerning this Agreement or thetransactions contemplated hereby without the prior approval of the other Party,which approval shall not be unreasonably withheld.  This Section 7.07 shall not apply to filingswith the Bankruptcy Court in connection with the transactions contemplated bythis Agreement.

## **7.08        CertainAmounts Owed To Seller and Its Affiliates**.  Subject to any requirements of the BankruptcyCourt or the Plan, at or prior to Closing, Seller shall cause the Company tofully repay or otherwise provide for the deemed resolution of any indebtednessowed by the Company to Seller or any other Affiliate of Seller, including butnot limited to, indebtedness owed under the Debtor-In-Possession CreditAgreement dated as of February 28, 2006, between Mirant Americas, Inc. and theCompany.

## **7.09        ProvisionsRelating to Treatment of Assets and Liabilities of the Company Under the Plan.** The Plan shallprovide for the discharge to the fullest extent permitted by the BankruptcyCode of all claims (as defined in Section 101(5) of the Bankruptcy Code)against the Company existing on the Plan Effective Date, including, but notlimited to, all pre- and post-petition secured, priority and unsecured claimsof every kind and nature.  The Plan shallprovide that on the Plan Effective Date, all of the Assets of the Company shallbe free and clear of all liens, claims, encumbrances, and interests existing onthe Plan Effective Date, as if such Assets had been sold pursuant to Section363 of the Bankruptcy Code.  All paymentsand distributions provided for under 

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## the Plan in respect to all allowed claims against the Company and allcosts and expenses incurred in connection with the discharge of all liens,claims, encumbrances and interests in the Assets existing on the Plan EffectiveDate shall be paid or otherwise resolved in accordance with the Plan.  To the extent that there are any disputedclaims against the Company on the Plan Effective Date (the “**Disputed Claims**”), neither the reorganizedCompany nor Purchaser shall have any obligation under the Plan or for theDisputed Claims.

## **7.10     Break-UpFee**.  Inconnection with the approval of the Sale Procedures Order, the Break-Up Feeshall be payable at the times provided in the Agreement.

## **7.11     FurtherAssurances**. Each Party shall execute and deliver such instruments and take suchother actions as the other Party may reasonably require in order to carry outthe intent of this Agreement.

## **7.12     Supplementsto Schedules**.

### (a)           From time totime prior to the Closing, each Party shall promptly supplement or amend itsSchedules hereto with respect to any matter hereafter arising which, ifexisting or occurring as at the Effective Date, would have been set forth ordescribed in such Schedules.

### (b)           For purposesof determining the satisfaction of the conditions set forth in Sections 9.01and 10.01, respectively, and the accuracy of the representations andwarranties of each Party contained in this Agreement, the Schedules shall bedeemed to include the information contained therein on the Closing Date, assuch Schedules may be supplemented or amended in accordance with Section7.12(a) above.

## **7.13     TaxMatters**.

### (a)           The Partiesagree that after the Closing Date, Seller shall have the right to review draftsof and approve (which approval shall not be unreasonably withheld) all Taxreturns of the Company relating to taxable periods ending (i) on or before theClosing Date and (ii) after the Closing Date, which encompass periods prior tothe Closing Date.  Copies of each draftTax return shall be delivered to Seller at least twenty (20) days prior to theproposed filing date thereof.  If Sellerdoes not give Purchaser notice of any objection to such draft within five (5)days of receipt of the draft, Seller shall be deemed to have approved suchdraft.  Purchaser shall, and shall causethe Company to, cooperate with Seller in the review of all such Tax returns andin connection therewith provide Seller and its accountants, attorneys and otherrepresentatives reasonable access to any and all books, records and data withrespect to the Company relevant to such Tax returns, including, withoutlimitation, financial statements, management accounts and work papers of theCompany’s accounting department and the Company’s independent accountants.

### (b)           In the eventof a dispute with respect to any such Tax return, Purchaser and Seller shallattempt to reconcile their differences. If Purchaser and Seller are unable to do so within ten (10) days,Purchaser and Seller shall submit the disputed items for resolution to theReview Firm, which, within fifteen (15) days from such submission, shalldetermine and report to the Parties upon such disputed items, and such reportshall be final, binding and conclusive on the Parties hereto and such Taxreturn shall be filed on a basis which reflects such report.  In acting pursuant to 

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### this Section 7.13(b), the Review Firm shall have the rights,privileges and immunities of an arbitrator, and its fees shall be paid one-halfby Purchaser and one-half by Seller.

### (c)           Theprovisions of clauses (a) and (b) of this Section 7.13 or any approvalof any Tax return by Seller notwithstanding, Seller shall have no liabilitypursuant to Article XI or otherwise arising from or relating to any Taxelection or amended return filed by Purchaser****or the Company****or anychange in the Company’s Tax accounting principles or policies after the ClosingDate which recharacterizes, restates or otherwise affects any item for anytaxable period ending on or prior to the Closing Date.

### (d)           Each Partywill promptly notify the other in writing upon receipt by such Party of noticeof any pending or threatened Tax audit or proceeding relating to Taxes of theCompany for any (i) Tax period ending on or before the Closing Date or (ii) Taxperiod ending after the Closing Date but which includes the Closing Date.  Seller will have the sole right to representthe interests of the Company in any audit or Tax proceeding related to Taxesfor Tax periods ending on or prior to the Closing Date and to employ counsel ofits choice at its expense, and Purchaser and Seller agree to cooperate in thedefense of any claim in such audit or proceeding.  Seller will have the right to participate atits expense in representing the interests of the Company in any audit orproceeding related to Taxes for any Tax period ending after the Closing Date,if and to the extent that such period includes any Tax period before theClosing Date, and to employ counsel of its choice at its expense.  Seller and Purchaser agree to cooperate inthe defense of any claim in such audit or proceeding.

## **7.14     RequiredConsents**.

### (a)           Except asprovided in Sections 4.05, 7.05 and 7.15, Purchaseris responsible for obtaining the following (collectively, the “**Purchaser Required Consents**”):  all authorizations, consents, licenses,permits and approvals of Governmental Authorities and third Persons required byapplicable law or required by any such third Persons in connection with theconsummation of the transactions contemplated by this Agreement (including theapprovals of the New York State Public Service Commission and the FederalEnergy Regulatory Commission as provided in Section 7.05 and those consentslisted on Schedule 5.04) and any related agreements and with Purchaser’soperation of the Hydroelectric and Gas Turbine Generating Stations.

### (b)           Seller isresponsible for obtaining all authorizations, consents, licenses, permits andapprovals referenced in Section 4.05 hereof to the extent Seller isrequired by law or under this Agreement to obtain same (collectively, the **“Seller Required Consents”**).

### (c)           In connectionwith obtaining any Purchaser Required Consents or Seller Required Consents fromthird Persons, each Party will:

#### (i)            promptly commenceand use Commercially Reasonable Efforts to obtain all Purchaser RequiredConsents or Seller Required Consents, as the case may be;

#### (ii)           provide the otherParty with the opportunity to comment on drafts of all submissions to suchthird Persons sufficiently in advance of the submission thereof insofar aspracticable;

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#### (iii)          consider anycomments received from the other Party in good faith;

#### (iv)          invite the otherParty or its representative to attend all meetings with such third Persons;

#### (v)           provide copies ofall correspondence from such third Persons promptly after receipt thereof; and

#### (vi)          promptly followingany request from the other Party, provide a detailed report as to the status ofeach Purchaser Required Consent or Seller Required Consent (as the case may be)and its efforts to obtain the same.

### (d)           After theClosing, Purchaser will notify promptly all relevant Governmental Authoritiesand all other third Persons of the change in ownership of the MembershipInterest resulting from the transactions contemplated herein to the extentrequired by applicable law or the specific underlying agreements.

## **7.15     BankruptcyCourt Orders and Related Matters**.  The Parties acknowledge and agree as follows:

### (a)           promptlyafter the execution of this Agreement, (i) Seller shall, in accordance with allapplicable requirements of, and procedures under, the Bankruptcy Code, filewith the Bankruptcy Court a motion (the “**SaleMotion**”) seeking approval of the (A) Sale Procedures Order (asdefined below), and (B) Sale Order (as defined below) and (ii) the Companyshall, in accordance with all applicable requirements of and procedures under,the Bankruptcy Code, file with the Bankruptcy Court a motion or motionsseeking, among other things, an order (the **“DisclosureStatement Order”**), approving the disclosure statement (the “**Disclosure Statement**”) with respect to thePlan (which shall be developed through meaningful and timely consultationbetween the parties, but with final submission to the Bankruptcy Court in thesole discretion of Seller), establishing procedures for solicitation ofacceptances to the Plan and setting a hearing on confirmation of the Plan andseeking entry of the Confirmation Order (the Sale Procedures Order, the SaleOrder, the Disclosure Statement Order and the Confirmation Order, hereincollectively referred to as the **“BankruptcyCourt Orders”**).  Seller andthe Company, as applicable, will use Commercially Reasonable Efforts to (1)cause such Sale Procedures Order, Sale Order, Disclosure Statement Order andConfirmation Order to be issued, entered and become Final Orders in, asapplicable, Seller’s and the Company’s Bankruptcy Cases, and (2) timely servecopies of the notices setting forth the hearing date on the Sale ProceduresOrder, the Sale Order, Disclosure Statement Order and the Confirmation Orderupon any and all parties in interest entitled or required to receive noticeunder all applicable laws, rules and regulations and orders of the BankruptcyCourt prior to the hearing on such motions (all such motions and actionsrelating to the Sales Procedures Order, the Sale Order, the DisclosureStatement Order and the Confirmation Order will be in form and substancereasonably acceptable to Purchaser and Seller and their respectivecounsel).  Seller further agrees that itshall not take any action in the Bankruptcy Case which would be contrary to orinconsistent with this Agreement or any of the terms hereof, and any plan ofreorganization of Seller or order confirming such plan shall in no wayadversely affect the rights of Purchaser under this Agreement.

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### (b)           Seller shalluse its Commercially Reasonable Efforts so that the Bankruptcy Court enters a “**Sale Procedures Order**”, substantially inthe form attached hereto as Schedule 7.15(b) (and which, as entered by theBankruptcy Court, is in a form reasonably acceptable to Purchaser, Seller, andtheir respective counsel) that, among other things: (i) names Purchaser as the “stalkinghorse” with respect to the Membership Interest, (ii) if there is an overbid asprovided herein, requires the payment of Two Hundred Fifty Thousand Dollars($250,000) as a break up fee (the **“Break-UpFee”**) under the circumstances and in accordance with the terms ofthis Agreement, (iii) requires an initial overbid at least Five HundredThousand Dollars ($500,000) in cash greater than the Purchase Price, (iv)requires all overbids be accompanied by a down payment equal to ten percent(10%) of the purchase price offered by the overbidder, (v) requires that eachbidder provide (A) written evidence satisfactory to Seller demonstrating thatsuch bidder (1) has the financial ability to consummate the purchase of theMembership Interest and its obligations to perform under the definitivepurchase and sale agreement described in 7.15(b)(vi) herein no later than ten(10) days following the hearing on the Sale Order; (2) is not affiliated withPurchaser or Seller (and such Person is not a creditor of Seller or Seller’sAffiliate) and (B) evidence to Seller and the Bankruptcy Court that it is a bonafide purchaser and is willing and able to cover its own legal counselfees and other costs associated with the sale of the Membership Interest, (vi)requires the delivery to Seller of an executed copy of a definitive purchaseand sale agreement having the same terms and conditions as those set forth inthis Agreement (except for  the purchaseprice, the terms of (i) through (ix) of this Subsection (b), and the reasonableextension of the dates set forth in Sub-Sections 12.01(a) (iii), (iv), and(vii) necessary or appropriate in light of such overbid) for a price thatexceeds the purchase price by at least $500,000, no later than five (5) daysprior to the hearing on the Sale Order, (vii) requires subsequent biddingincrements of at least Two Hundred and Fifty Thousand Dollars ($250,000.00),(viii) requires that any qualified bid, other than Purchaser’s bid pursuant tothis Agreement, be delivered to Seller and Purchaser on or before the deadlineestablished by the Bankruptcy Court, and (ix) if Purchaser submits thesuccessful overbid, permits Purchaser to credit the amount of the Break-Up Feeagainst such overbid.

### (c)           Seller shalluse its Commercially Reasonable Efforts so that the Bankruptcy Court approvesthe Sale Order, substantially in the form attached hereto as Schedule 7.15(c)(and which, as entered by the Bankruptcy Court, is in a form reasonablyacceptable to Purchaser and Seller and their respective counsel), which shallcontain provisions, among other things, (i) approving the sale of theMembership Interest to Purchaser on the terms and conditions set forth in thisAgreement, (ii) stating that any objections timely filed with respect to thesale of the Membership Interest, which have not been withdrawn, are overruledor the interests of such objections have been otherwise satisfied or adequatelyprovided for by the Bankruptcy Court, (iii) finding that Purchaser is a goodfaith purchaser of the Membership Interest under Section 363(m) of theBankruptcy Code and that the sale is not subject to avoidance under Section363(n) of the Bankruptcy Code, (iv) providing that the sale of the MembershipInterest to Purchaser shall be free and clear of any and all liens, claims,encumbrances and interests of any kind or nature whatsoever under Section 363of the Bankruptcy Code and any other applicable sections of the BankruptcyCode, (v) providing that the Bankruptcy Court shall retain jurisdiction for thepurpose of enforcing the provisions of the Sale Order including, withoutlimitation, compelling delivery of the Membership Interest to Purchaser andproviding that any liens, claims, encumbrances and interests shall attachsolely to the Purchase Price, (vi) providing that any liens, claimsencumbrances and interests of any kind or nature whatsoever asserted underlaws, rules, regulations or governmental or court orders imposing a stamp Tax,transfer Tax or similar Tax arising from the transfer of the 

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### Membership Interest to Purchaser or any sales Tax and any other Taxesof Seller relating to a pre-Closing period (collectively, **“Seller Taxes”**) shall be filed against Seller’sestate and shall not be asserted against Purchaser, (vii) providing, ifPurchaser consents, that the Parties hereto shall be authorized to close thistransaction immediately upon execution of the Sale Order and the ConfirmationOrder pursuant to Rule 6004(g) of the Federal Rules of Bankruptcy Procedure,(viii) authorizing and directing Seller to execute, deliver, perform under,consummate and implement this Agreement, together with all additionalinstruments and documents that may be reasonably necessary or desirable toimplement the foregoing, and (ix) determining that Purchaser is not a successorto Seller or otherwise liable for any of the Liabilities of Seller andpermanently enjoining all persons and entities from commencing, continuing orotherwise pursuing or enforcing any remedy, claim, cause of action or lien orEncumbrance against Purchaser or the Membership Interest to Purchaser (the **“Sale Order” **).

### (d)           TheDisclosure Statement Order and the Confirmation Order shall be in form andsubstance reasonably acceptable to Purchaser, Seller and their respectivecounsel.  Seller and the Company shalluse Commercially Reasonable Efforts to obtain entry of the Confirmation Orderno later than seventy-five (75) days after execution of this Agreement by theParties hereto.  The Confirmation Ordershall, among other things, approve the assumption of all Assumed Contracts anddeclare that all Assumed Contracts are valid and binding and in full force andeffect, confirm the Plan pursuant to Section 1129 of the Bankruptcy Code,approve all documents and actions necessary to implementation of the Plan underSection 1123(a) of the Bankruptcy Code and provide that the transfer of theMembership Interest to Purchaser is exempt from Tax pursuant to Section 1146 (c)of the Bankruptcy Code.

### (e)           In the eventan appeal is taken, or a stay pending appeal is requested or reconsideration issought, from either the Sale Procedures Order, the Sale Order, the DisclosureStatement Order or the Confirmation Order, Seller will immediately notifyPurchaser of such appeal or stay request and will provide to Purchaser withintwo (2) Business Days a copy of the related notice of appeal or order of stayor application for reconsideration. Seller will also provide Purchaser with written notice and copies of anyother or further notice of appeal, motion or application filed in connectionwith any appeal from or application for reconsideration of, any of such ordersand any related briefs.

### (f)            Seller willnotify, as is required by the Bankruptcy Code and as may reasonably berequested by Purchaser, all parties entitled to notice of all motions, noticesand orders required to consummate the transactions contemplated by thisAgreement, including, without limitation, the Sale Procedures Order, the SaleOrder, the Disclosure Statement Order and/or the Confirmation Order, asmodified by orders in respect of notice which may be issued at any time andfrom time to time by the Bankruptcy Court.

### (g)           Purchaseracknowledges that the sale of the Membership Interest as contemplated by thisAgreement is subject to Bankruptcy Court approval and to higher and bettercounteroffers and that the Membership Interest will be sold to the highest andbest bidder at an auction to be conducted by Seller in connection with thehearing on the approval of the Sale Order (the **“Auction”**).  In theevent that the highest and best offer, as determined by Seller is submitted atthe Auction by a purchaser other than Purchaser that (i) is not affiliated withPurchaser or Seller (and such Person is not a creditor of Seller or Seller’sAffiliate), (ii) submits to Seller a valid,

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###  irrevocable offer to purchasethe Membership Interest on the same terms as this Agreement (except for thepurchase price, the terms of (i) through (ix) of Subsection 7.15 (b), and thereasonable extension of the dates set forth in Sub-Sections 12.01(a) (iii),(iv), and (vii) necessary or appropriate in light of such overbid) for apurchase price that exceeds the Purchase Price by at least Five Hundred ThousandDollars ($500,000), no later than five (5) days prior to the hearing on theSale Order, (iii) executes all necessary and appropriate documents, in form andsubstance acceptable to Seller, to memorialize the sale (the **“Third Party Sale”**) and has the financialability to consummate the purchase of the Membership Interest and itsobligations to perform under the definitive purchase and sale agreementdescribed in 7.15(b)(vi) herein no later than ten (10) days following thehearing on the Sale Order, (iv) satisfies Seller and the Bankruptcy Court thatit is a bonafide purchaser, and (v) is willing and able to coverits own legal counsel fees and costs associated with the Third Party Sale,Seller shall, upon approval of the Bankruptcy Court of a Sale Order naming suchother purchaser as Purchaser and the related Confirmation Order, be entitled toclose such Third Party Sale pursuant to such other offer; provided, however,that nothing contained herein shall prevent Purchaser from contesting that suchother offer is the highest and best offer. Upon entry of the Sale Order authorizing a sale of the MembershipInterest to a purchaser other than Purchaser (the **“Prevailing Bidder”**), Seller shall direct the Escrow Agent toreturn to Purchaser the Down Payment (with all accrued interest thereon) andSeller shall pay to Purchaser the Break-Up Fee from the first cash proceeds ofthe Third Party Sale or any other sale of the Membership Interest within five(5) days after the closing of the Third Party Sale or any other disposition ofthe Membership Interest.  In the eventthat Purchaser agrees to be a back-up bidder, Seller shall direct the EscrowAgent to return the Down Payment (with all accrued interest thereon) toPurchaser upon the earlier of closing of the sale to the Prevailing Bidder or atermination of this Agreement by Purchaser according to its terms.  Upon the closing of the Third Party Sale,payment of the Break-Up Fee to Purchaser from the first cash proceeds of theThird Party Sale shall be made within five (5) days after the closing of theThird Party Sale.

## **7.16     PurchaserContact with Vendors and Employees**.  Purchaser agrees that, prior to the ClosingDate, it will not contact any vendors, suppliers, employees or othercontracting parties of Seller or Seller’s Affiliates with respect to any aspectof the Company’s business or the transactions contemplated hereby without theprior written consent of Seller.

## **7.17     Taxes,Prorations and Closing Costs**.

### (a)           **Taxes**.

#### (i)            Purchaser will payall Taxes, including sales, use, transfer and documentary transfer Taxes,arising in connection with the sale and transfer of the MembershipInterest.  Seller and Purchaser will eachpay its own income Taxes.  State andlocal real and personal property Taxes relating to the Company for the Tax yearof the Closing will be prorated between Purchaser and Seller on the followingbasis:  Seller is to be responsible forall such Taxes for the period up to the Closing; and Purchaser is to be responsiblefor all such Taxes for the period on and after the Closing.  All Taxes assessed on an annual basis will beprorated on the assumption that an equal amount of Taxes applies to each day ofthe year, regardless of how any installment payments are billed or made, exceptthat Purchaser will bear all supplemental or other state and local real andpersonal 

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#### property Taxeswhich arise out of a change in ownership of the Membership Interest.

#### (ii)           After the Closing,Purchaser will notify Seller in writing, within fifteen (15) days after itsreceipt of any correspondence, notice or other communication from a taxingauthority or any representative thereof, of any pending or threatened taxaudit, or any pending or threatened judicial or administrative proceeding thatinvolves Taxes relating to the Membership Interest for the period prior to theClosing, and will furnish Seller with copies of all correspondence receivedfrom any taxing authority in connection with any audit or information requestwith respect to any such Taxes relating to the Membership Interest for theperiod prior to the Closing.

### (b)           **Purchaser’s Closing Costs. **Purchaser will pay: (i) all costs of (1)any title policy and all endorsements thereto that Purchaser elects to obtain,(2) all filings required under the HSR Act, (3) Purchaser’s Due DiligenceInspections and Reviews, and (4) any Person (if any) that is entitled to abrokerage commission, finder’s fee or other like payment by reason of Purchaser’sactions, and (ii) one-half (1/2) of any document recordation costs, includingany applicable deed transfer Tax.

## **7.18     Acknowledgementby Purchaser**. Prior to its execution of this Agreement, Purchaser has conducted to itssatisfaction an independent investigation and verification of the Company,including without limitation its Due Diligence Inspections and Reviews. Inmaking its decision to execute this Agreement, and to purchase the MembershipInterest, Purchaser has relied and will rely upon the results of its ownindependent investigation and verification. **THE REPRESENTATIONS AND WARRANTIES SETFORTH IN ARTICLE IV OF THIS AGREEMENT CONSTITUTE THE SOLE AND EXCLUSIVEREPRESENTATIONS AND WARRANTIES OF SELLER IN CONNECTION WITH THE TRANSACTIONSCONTEMPLATED HEREBY.**  Thereare no representations, warranties, covenants, understandings or agreementsamong the Parties regarding the Membership Interest or its transfer other thanthose set forth in this Agreement. Except for the representations and warranties expressly set forth inArticle IV, Purchaser disclaims reliance on any representations, warranties orguarantees, either express or implied by Seller, its officers, directors,counsel, representatives or agents.

## **7.19     NoRecourse**. To the extent the transfer, conveyance, assignment and delivery of theMembership Interest to Purchaser as provided in this Agreement is accomplishedby deeds, assignments, sublicenses, subleases, subcontracts or otherinstruments of transfer and conveyance, whether executed at the Closing orthereafter, these instruments are made without representation or warranty by,or recourse against, Seller, except as expressly provided in this Agreement.

## **7.20     Adviceof Changes**. Prior to Closing, each Party will promptly advise the other in writingwith respect to any matter arising after execution of this Agreement of whichthat Party obtains knowledge and which, if existing or occurring at the date ofthis Agreement, would have been required to be set forth in any of theSchedules.

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## **7.21     CasualtyLoss**.

### (a)           If, at anytime following the Effective Date but prior to Closing, any of theHydroelectric or Gas Turbine Generating Stations suffers (each of such Stationsreferred to herein as a “**Station**”)a total or partial casualty loss (an “**Eventof Loss**”) that is reasonably estimated to cost in excess of OneMillion Dollars ($1,000,000) to repair or replace the damaged Station (a “**Major Loss**”), Seller will promptly informPurchaser of the Major Loss.  As soon aspracticable following the Major Loss, Seller will provide to Purchaser its goodfaith, detailed written estimate (“**Seller’s Estimate**”)****setting forth the amount required torepair or replace the damaged Station and the estimated time period forcompletion of such repair or replacement. Concurrently with the delivery of aSeller’s Estimate relating to a Major Loss, Seller will notify Purchaserwhether it will repair or replace the Station. The completion of the repair or replacement of the Station relating to aMinor Loss and, if Seller elects to repair or replace the Station relating to aMajor Loss, the completion of the work relating to a Major Loss, will be acondition to the Closing and the outside date for the Closing set forth in Section12.01(a)(vii) will be extended by the estimated time period for completionof such repair or replacement plus thirty (30) days (provided that the overallnumber of estimated days for completion of such repair or replacement shall notexceed ninety (90) days***,***failingwhich Purchaser shall have the option to terminate this Agreement), and thecosts thereof (less any insurance proceeds received by Seller in connectionwith such loss) will be deemed a Necessary Capital Expenditure, unless suchcosts shall exceed Fifty Thousand Dollars ($50,000), in which event any amountin excess of Fifty Thousand Dollars ($50,000) shall be for the account of Seller.If Seller elects not to repair or replace the Station relating to a Major Loss,the provisions of Section 7.21(b) will apply.

### (b)           **Purchaser’s Election**.

#### (i)            Within the thirty(30) day period immediately following receipt of a Seller’s Estimate relatingto a Major Loss and Seller’s election not to repair or replace the damagedStation, Purchaser will elect, by written notice to Seller, to either:

##### (1)           terminate thisAgreement pursuant to Section 12.01(a)(v); or

##### (2)           require a reductionin the Purchase Price by an amount equal to Seller’s Estimate, in which caseSeller will have no obligation to repair the Station as a result of such Eventof Loss.

#### (ii)           If Purchaser shouldfail to make the election set forth in this Section 7.21(b) withinthe thirty (30) day period immediately following receipt of Seller’s notice ofa Major Loss, Purchaser will be deemed to have made the election contained in Section 7.21(b)(i)(2).  To the extent the thirty (30) day perioddescribed in this Section 7.21(b) extends past the outside date for theClosing set forth in Section 12.01(a)(vii), the outside date for theClosing shall be extended by such time.

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## **7.22****     Post Closing — Informationand Records**.

### (a)           Purchaser agrees that,from and after the Closing Date, it will, promptly following the request ofSeller, provide such information and administrative support as will bereasonably requested by Seller to enable Seller to comply with its obligationswith respect to the issuance of Form 1099 and other Tax reports, reports andnotices relating to income Tax returns, preparation of financial statements andcompletion of Seller’s audit for the three fiscal years ended December 31stfollowing the Closing Date and other similar matters.

### (b)           **Employees**.  Purchaser will make available to Seller on areasonable basis and as requested from time to time by Seller after Closing,those employees of Purchaser with Knowledge of or relevant to the mattersdescribed in this Section 7.22 for the purpose of consultation,investigation and/or testimony in connection therewith.

## **7.23****     Insurance.**  Seller shall maintain or cause to bemaintained in full force and effect all policies of insurance applicable to theHydroelectric and Gas Turbine Generating Stations as of the EffectiveDate.  All such insurance policies shallterminate as of the Closing.

## **7.24****     Use of Certain Names. **Within thirty (30) days following theClosing, Purchaser shall cause the Company to cease using the name “Mirant,”and any word or expression similar thereto or constituting an abbreviation orextension thereof (the “**Seller Marks**”),including eliminating the Seller Marks from any Assets and disposing of anyunused stationery and literature of the Company bearing the Seller Marks.Thereafter, neither Purchaser nor any of its Affiliates shall use the SellerMarks.  Purchaser acknowledges thatneither it nor its Affiliates has any rights whatsoever to use the Seller Marksafter said thirty (30) day period. Without limiting the foregoing:

#### (i)            Within five (5)Business Days after the Closing Date, Purchaser shall cause the Company tochange its name to a name that does not contain any of the Seller Marks.

#### (ii)           Within sixty (60) daysafter the Closing Date, Purchaser shall provide evidence to Seller, in a formatthat is reasonably acceptable to Seller, that Purchaser has made allgovernmental filings required pursuant to clause (i) above and has providednotice to all applicable Governmental Authorities and all counterparties to theMaterial Contracts regarding the change of the Company’s and a new address forthe purpose of notice to the Company.

#### (iii)           NotwithstandingPurchaser’s right to use the Seller Marks for the time periods set forth inthis Section 7.24,  Purchaseracknowledges and agrees as follows:  (i)neither Purchaser nor any of its Affiliates (including the Company after theClosing Date) shall be deemed an agent, representative or joint venture partnerof Seller; (ii) Seller shall retain sole and exclusive ownership of theSeller Marks, and all goodwill and rights related thereto; (iii) Purchaserand its Affiliates (including the Company after the Closing Date) shall notengage in any conduct or take part in any activity that would be reasonablylikely to (A) impair the validity or enforceability of the Seller Marks,(B) dilute the distinctiveness of the 

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#### Seller Marks, (C) disparage the Seller Marksor (D) be considered unfair competition or an infringement or other violationof the rights of Seller or its Affiliates in the Seller Marks;(iv) Purchaser and its Affiliates (including the Company after the ClosingDate) shall not co-brand any of their goods or services (or communicationsdescribing such goods or services) using any of the Seller Marks; and(v) notwithstanding anything to the contrary contained in Article XI,and irrespective of such Article XI, Purchaser shall indemnify, defend andhold harmless Seller from, against, and in respect of, any and all Damagesincurred or suffered by Seller arising out of or relating to any use of any ofthe Seller Marks by Purchaser or any of its Affiliates (including the Companyafter the Closing Date).

## **7.25****     Settlement Agreement**.  The****Companyis a party to a certain Settlement Agreement dated as of August 31, 2001, byand among Orange and Rockland Utilities Inc. (“O&R”), Mirant Bowline, LLC (“Bowline”),Mirant Lovett, LLC (“Lovett”), Hudson Valley Gas Corporation (“Hudson Valley”)and the Company (the “**O&R Settlement Agreement**”).** **Onor before the Closing Date, unless O&R has released Company from liabilityunder the O&R Settlement Agreement, each of the Company, Bowline, andLovett shall enter into a cross indemnity agreement (the **“Cross Indemnity Agreement”**) substantiallyin the form attached as Schedule 7.25 hereto, and the same shall have beenfinally approved by the Bankruptcy Court with respect to each proceedingapplicable to each of the parties thereto.

## **7.26****     Registration of Companywith NYISO**.  Purchaser isresponsible for registering prior to Closing the Company or Purchaser asrepresentative of the Company as a market participant with the New YorkIndependent System Operators (“**NYISO”**).  Seller will cooperate with Purchaser and theCompany in effecting such registration.

## **7.27****     Gas Transportation andBalancing Services Agreement**. The Company is a party to a certain Gas Transportation and BalancingServices Agreement dated December 9, 2002 by and among O&R, Bowline,Lovett, Company, Consolidated Edison Company of New York, Inc. (“**ConEd**”), and MET, as transferee of Mirant Energy Marketing,(the “**Gas Transportation Agreement**”).  On or before the Closing Date, Seller shallcause the Company to enter into a written agreement with the other parties tothe Gas Transportation Agreement terminating Company as a party theretoeffective upon Closing.  Seller shallcooperate with Purchaser so that, on or before the Closing Date, Purchaser mayenter into a written agreement effective upon Closing replacing the operationalsupply arrangements available to Company under the Gas Transportation Agreementso as to allow for the full and complete operation of the Company and itsAssets post-Closing consistent with its operations prior to Closing.  Seller and Purchaser agree that such replacementagreement will provide for, *inter alia*, atleast the same level of gas supply, capacity and transportation rights forCompany under such replacement agreement as existed under the GasTransportation Agreement prior to Closing, although the price and other termstherein may be different.  Suchreplacement agreement shall be executed by the Company and any other partiesthereto within seven (7) days prior to the Closing Date. Prior to Closing, allnew written agreements referred to in this Section 7.27 shall have been timelyfiled with the New York State Public Service Commission and shall be finallyapproved by the Bankruptcy Court with respect to each proceeding thereinapplicable to the parties to such written agreements.

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## **7.28****     Air Title V Permits (Hillburnand Shoemaker Facilities)**. Company is the holder of an Air Title V Permit issued by the New YorkState Department of Environmental Conservation (“**DEC**”) for the Hillburn Facility (Permit #3-3926-00059/00003)and the Shoemaker Facility (Permit #3-3309-00040/00004) (respectively, the “**Hillburn Air Permit**” and the “**Shoemaker Air Permit**”, collectively the “**Air Permits**” and individually each an “**Air Permit**”).  After the Effective Date, Company shall applyfor a modification of each Permit to remove the Hillburn and ShoemakerFacilities from the calculation of the system wide average of Nitrogen Oxideemissions used to determine compliance with the NOx RACT Limit (as defined in and required by eachPermit) (such calculation being referred to herein as the “**NO****x Bubble**”). Prior to filing any such application, Seller shall provide Purchaserwith a copy thereof and accept comments from Purchaser for a reasonable timethereafter.  Other than such comments toSeller, Purchaser shall take no action opposing Company’s applications for suchmodification.  If Purchaser requestsSeller to cause any such application to include a modification to a Permitwhich Purchaser determines is reasonably necessary to allow the Company tooperate in compliance with the Nitrogen Oxide emission limits in the Permitsafter the amendment removing the relevant Facility from the NOx   Bubble,Seller agrees to include such requested modification,  provided that the implementation thereofshall not cause the Company to incur costs prior to the Closing.  Seller and Purchaser shall cooperate in goodfaith to obtain modified Permits consistent with this Section 7.28 that shallbe effective on the Closing Date.

## **7.29****     Assignment of CertainPurchase Orders**.  Prior to theClosing Date, Seller shall cause Company to assign to Seller or Seller’sdesignee the following purchase orders: (a) Purchase Order No. NY-6867 between Company and Mead and Hunt, Inc.(item #9 on Schedule 4.16), and (b) Purchase Order No. NY-8296 between Companyand Burns and Roe Enterprises, Inc. (item #13 on Schedule 4.16).  Seller or Seller’s designee shall assume andperform all of Company’s obligations under said Purchase Orders for servicesperformed by the other party thereto after the Effective Date.

# ARTICLE VIII

# MUTUAL CONDITIONS

The respectiveobligations of each Party to consummate the transactions contemplated by thisAgreement are subject to the satisfaction, on or before the Closing Date, ofeach of the following conditions, unless waived in writing by each Party.

## **8.01****     HSR Act**.  All applicable waiting periods (and anyextensions thereof) under the HSR Act shall have expired or otherwise beenterminated.

## **8.02****     Regulatory and OtherAuthorizations and Consents**.  Allauthorizations, consents and approvals of Governmental Authorities, thirdparties and the Bankruptcy Court, shall have been obtained (other than SellerRequired Consents and Purchaser Required Consents).

## **8.03****     Orders**.  Other than the approval of the BankruptcyCourt, neither Party hereto shall be subject to any order or injunction of acourt of competent jurisdiction which prohibits the consummation of thetransactions contemplated by this Agreement.

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# ARTICLE IX

# CONDITIONS TO PURCHASER’SOBLIGATIONS

Each and everyobligation of Purchaser under this Agreement to be performed on or before theClosing Date shall be subject to the satisfaction, on or before the ClosingDate, of each of the following conditions, unless waived in writing byPurchaser:

## **9.01****     Representations andWarranties True**.  Therepresentations and warranties of Seller contained in Article IV hereof shallbe in all material respects true and accurate as of the date when made and atand as of the Closing Date as though such representations and warranties weremade at and as of such date (unless expressly made at and as of an earlierdate, in which case such representations and warranties shall be true in suchrespects only at and as of such earlier date), except for changes permitted orcontemplated by the terms of this Agreement.

## **9.02****     Performance**.  Seller shall have performed and complied withall agreements, obligations and conditions required by this Agreement to beperformed or complied with by it on or prior to the Closing Date.

## **9.03****     Certificates; Evidence ofCompliance**.  Seller shall havefurnished Purchaser with such certificates of Seller and/or such other evidenceas Purchaser may reasonably request to demonstrate compliance with theconditions set forth in this Article IX including, with respect to theindebtedness owed under the Debtor-In-Possession Credit Agreement dated as ofFebruary 28, 2006, between Mirant Americas, Inc. and the Company, notes marked “cancelled”and/or otherwise acknowledged by the holder(s) thereof to be discharged, proofof satisfaction of any mortgages filed against Company’s real property, anddischarge of any liens on record against any Assets.

## **9.04****     Board Resolutions.**  A certified copy of such resolutions of theBoard of Directors of Seller as may be required to authorize the transactionscontemplated by this Agreement and the Related Agreements and authorizingspecified officers of Seller to execute and deliver this Agreement, the RelatedAgreements and any other documents or instruments which they deem necessary andappropriate in connection with this Agreement.

## **9.05****     Bankruptcy Court Orders**.  The Bankruptcy Court Orders shall (a) havebeen entered by the Bankruptcy Court, with such changes as are reasonablyacceptable to Seller and Purchaser and their respective counsel, and (b) becomeFinal Orders.

# ARTICLE X

# CONDITIONS TO SELLER’SOBLIGATIONS

Each and everyobligation of Seller under this Agreement to be performed on or before theClosing Date shall be subject to the satisfaction, on or before the ClosingDate, of each of the following conditions, unless waived in writing by Seller:

## **10.01****   Representations andWarranties True**.  Therepresentations and warranties of Purchaser contained in Article V hereof shallbe in all material respects true and accurate as of the 

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## date when made and at and as ofthe Closing Date as though such representations and warranties were made at andas of such date (unless expressly made at and as of an earlier date, in whichcase such representations and warranties shall be true in such respects only atand as of such earlier date), except for changes permitted or contemplated bythe terms of this Agreement.

## **10.02****   Performance**.  Purchaser shall have performed and compliedwith all agreements, obligations and conditions required by this Agreement tobe performed or complied with by it on or prior to the Closing Date.

## **10.03****   Certificates**.  Purchaser shall have furnished Seller withsuch certificates of its officers to evidence compliance with the conditionsset forth in this Article X as may reasonably be requested by Seller.

## **10.04****   Board Resolutions.**  A certified copy of such resolutions ofPurchaser’s sole member as may be required to authorize the transactionscontemplated by this Agreement and the Related Agreements and authorizingspecified officers or representatives of Purchaser, as the case may be, toexecute and deliver this Agreement, the Related Agreements and any otherdocuments or instruments which they deem necessary and appropriate inconnection with this Agreement.

## **10.05****  ****PendingInsurance Claims**.  Writtenacknowledgment from each relevant insurance carrier or its broker or otherdesignee that the Company’s pending claims for losses at the Swinging BridgeFacility and the Hillburn Facility shall be paid to Seller or such third partyor third parties as the Seller or Company shall designate to each such carrierprior to Closing.

## **10.06****      Bankruptcy Court Orders**.  The Bankruptcy Court Order**s** shall (i) have been entered by theBankruptcy Court, with such changes as are reasonably acceptable to Seller andPurchaser and their respective counsel, and (ii) become  Final Order**s**.

## **10.07****      Termination of GasTransportation Agreement**. Company shall have entered into a written agreement effective uponClosing terminating the Gas Transportation Agreement as to Company, suchwritten agreement shall have been timely filed with the New York State PublicService Commission, and all Bankruptcy Court approvals with respect to suchagreement shall have become final and not subject to appeal, all in accordancewith Section 7.27.

## **10.08****      Modification of Title VPermits**.  The Air Permits havebeen modified in accordance with Section 7.28, effective upon Closing.

# ARTICLEXI

# SURVIVALAND INDEMNIFICATION

## **11.01****   Survival**.

### (a)           Allrepresentations and warranties made by any Party in this Agreement shallsurvive the Closing hereunder for a period of ninety (90) days following theClosing.  Anything in this Agreement tothe contrary notwithstanding, no claim based upon misrepresentation or breachof representation or warranty shall be made, no action or litigation withrespect thereto commenced, and no remedy shall be available unless writtennotice specifying with particularity the 

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### misrepresentation or breach claimed shall have been delivered on orprior to the expiration of such period.

### (b)           Allcovenants and agreements made by any Party in this Agreement shall survive theClosing hereunder until all obligations set forth therein shall have beensatisfied.

## **11.02****   Indemnification**.

### (a)           EachParty (each, a **“Indemnifying Party**”),as a material inducement to the other party to enter into this Agreement, shalldefend, indemnify, and hold harmless the other Party, such other Party’ssuccessors and assigns, and all of such other Party’s officers, directors,lenders, shareholders, beneficial owners, trustees, partners, members,affiliates, agents and employees (each, an **“Indemnitee”**,collectively, the **“Indemnitees”**)from and against any and all damages, claims, losses, judgments, awards,penalties, fines and forfeitures (each, an **“Action”**),together with reasonable attorneys’ fees and related litigation or arbitrationcosts and expenses of such Indemnitees, of whatever kind or nature, withoutlimitations being asserted against any of the Indemnitees (collectively, **“Damages”**), which in any way arise orresult from a breach of any representation, warranty, covenant or agreement ofthe Indemnifying Party under this Agreement.

### (b)           Noindemnity pursuant to this Agreement shall be paid by the Indemnifying Party:

#### (i)            onaccount of the Indemnitee’s conduct that is established in a final,non-appealable judgment by a court of competent jurisdiction as having beenknowingly fraudulent, deliberately dishonest, reckless, grossly negligent orconstituting willful misconduct;

#### (ii)           onaccount of the Indemnitee’s conduct that is established in a final,non-appealable judgment by a court of competent jurisdiction as havingconstituted a breach of the Indemnitee’s duty of loyalty to the IndemnifyingParty or as having resulted in any personal profit or advantage to theIndemnitee to which the Indemnitee was not legally entitled;

#### (iii)          forwhich payment is actually made to the Indemnitee under a valid and collectibleinsurance policy or under another valid and enforceable indemnity clause oragreement, except in respect of any deficit in payment actually received under anysuch policy of insurance, indemnity clause or agreement; or

#### (iv)          ifindemnification is unlawful or has been determined by any regulatory oradministrative body having jurisdiction over the Indemnifying Party to beagainst public policy.

### (c)           As acondition precedent to the Indemnitee’s rights of indemnification under thisAgreement, the Indemnitee shall give the Indemnifying Party written notice assoon as reasonably practicable after becoming aware of any claim made againstthe Indemnitee for which indemnification will or could be sought under thisAgreement.  In addition, the Indemniteeshall give the Indemnifying Party such information and cooperation as theIndemnifying Party may 

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### reasonably request to enable the Indemnifying Party to perform its obligationshereunder.  Failure by the Indemnitee togive such notice shall not deprive the Indemnitee of a right to indemnificationhereunder, provided that the Indemnifying Party has actual knowledge of theclaim and/or is not adversely affected in its ability to defend the claim as aresult of any such failure.

### (d)           Withrespect to the commencement of any Action of which the Indemnitee notifies theIndemnifying Party pursuant to clause (c) above:

#### (i)            theIndemnifying Party will be entitled to participate therein at its own expense;

#### (ii)           exceptas otherwise provided below, the Indemnifying Party may, at its option andjointly with any other indemnifying party similarly notified and electing toassume such defense, assume the defense thereof, with counsel reasonablysatisfactory to the Indemnitee. After written notice from the IndemnifyingParty to the Indemnitee of its election to assume the defense thereof, theIndemnifying Party will not be liable to the Indemnitee under this Agreementfor any legal or other expenses subsequently incurred by the Indemnitee inconnection with the defense thereof except for reasonable costs ofinvestigation or as otherwise provided in this clause (d). The Indemnitee shallhave the right to employ separate counsel in such Action, provided that thefees and expenses of such counsel incurred after written notice from theIndemnifying Party of its assumption of the defense thereof shall be at theexpense of the Indemnitee unless: (1) the employment of such counsel has beenauthorized by the Indemnifying Party, (2) the Indemnitee shall have reasonablyconcluded, and so notified the Indemnifying Party, that there is an actualconflict of interest between the Indemnifying Party and the Indemnitee in theconduct of the defense of such Action, in which event the Indemnifying Partyshall not be entitled to assume the defense of such Action, or (3) theIndemnifying Party shall not in fact have employed counsel to assume thedefense of such Action.

#### (iii)          theIndemnifying Party shall not be liable to indemnify the Indemnitee under thisAgreement for any amounts paid in settlement of any Action effected by theIndemnitee without the Indemnifying Party’s prior written consent, whichconsent shall not be unreasonably withheld;

#### (iv)          theIndemnifying Party shall be permitted to settle any Action, provided that itshall not settle any Action in any manner that would impose any penalty orlimitation on the Indemnitee without the Indemnitee’s prior written consent,which consent shall not be unreasonably withheld.

### (e)           Sellershall indemnify, defend and hold harmless Purchaser, Purchaser’s successors andassigns, and all of Purchaser’s officers, directors, lenders, shareholders,beneficial owners, trustees, partners, members, affiliates, agents and employees(collectively, the “**Purchaser IndemnifiedParties**”) from and against all damages, claims, losses, judgments,awards, penalties, fines and forfeitures, together with reasonable attorneys’fees and related litigation or arbitration costs and expenses of such PurchaserIndemnified Parties, of whatever kind or nature, without 

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### limitation, asserted against, incurred or suffered by any PurchaserIndemnified Party arising out of or resulting from the Southern Company Claims.For purposes hereof, **“Southern Company Claims”**means any liability of Company associated with the following proofsof claim filed by The Southern Company in the Bankruptcy Case:  proofs of claim numbered 6398, 6442, 8159,and 8313. Seller’s obligations under this Section 11.02(e) shall not be subjectto the limitations contained in Sections 11.03(b)(i), 11.03(b)(ii), 11.03(c) orany other provision of this Agreement.

### (f)            EachIndemnifying Party shall have the right to audit, inspect and copy the booksand records of the Indemnitees with respect to a claim for indemnificationunder this Section 11.02.  TheIndemnitees shall cooperate in providing such Indemnifying Party  with reasonable access to its books andrecords during normal business hours for this purpose.  If the results of audit or inspection show anoverpayment to any Indemnitee upon any such claim, then such Indemnifying Partyshall repay the amount of such overpayment within fifteen (15) days of thecompletion of such audit or inspection.

## **11.03****   Limitations onIndemnification**.

### (a)           Theremedies provided in this Article XI shall be exclusive and shall precludeassertion by either Party of any other rights or the seeking of any and allother remedies against the other for claims based on this Agreement.

### (b)           Anyclaims for indemnity under this Agreement shall be subject to the followinglimitations and adjustments:  (i) theprovisions of Section 11.02 shall be effective only when the aggregateamount of all Damages for which a Party may be liable under this Article XIexceeds two percent (2%) of the Purchase Price, in which case such Party shallbe liable for only such amounts as exceed two percent (2%) of Purchase Price;(ii) the amount of any claim by either Party for indemnification shall besubject to adjustment to reflect (A) any actual direct or indirect income Taxbenefit (taking into account the amount of any indemnification actuallyreceived) resulting therefrom to the Indemnitee, (B) any insurance coveragewith respect thereto and (C) any amounts recoverable from third parties basedon claims the Indemnitee has against such third parties which would reduce thedamages that could otherwise be sustained; (iii) subject to the provisions ofSection 11.03(c) hereof, in no event shall a Party be liable, in the aggregate,for indemnification hereunder in an amount greater than twenty percent (20%) ofPurchase Price; and (iv) neither Party hereto shall be liable to the otherParty for special, incidental, consequential or punitive damages.

(c)           Seller’s liabilityunder Section 11.03(b) shall be limited to an amount which, when aggregatedwith the Purchase Price reductions under Section 2.03(d) and (e) hereof, doesnot exceed the Purchase Price.

## **11.04****   Purchaser’s Release ofSeller**. ** EXCEPT FOR THE RIGHTS OF  PURCHASER SET FORTH IN THIS ARTICLE XI,COMMENCING ON THE CLOSING DATE, PURCHASER SHALL RELEASE, HOLD HARMLESS ANDFOREVER DISCHARGE SELLER FROM ANY AND ALL CLAIMS, DEMANDS, LIABILITIES(INCLUDING FINES AND CIVIL PENALTIES), OR CAUSES OF ACTION AT LAW OR IN EQUITY(INCLUDING ANY ACTIONS ARISING UNDER ENVIRONMENTAL LAWS), DESTRUCTION, LOSS ORDAMAGE OF ANY KIND OR CHARACTER, WHETHER KNOWN OR UNKNOWN, VISIBLE ORINVISIBLE, TO THE PERSON OR**

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## **PROPERTY OF PURCHASER RESULTING FROM ORARISING OUT OF THE PRESENCE OR RELEASE OF ANY HAZARDOUS SUBSTANCE AT, ON,UNDER, IN, ABOUT OR FROM COMPANY’S REAL PROPERTY. PURCHASER HEREBYACKNOWLEDGES, AGREES, REPRESENTS, AND WARRANTS THAT FACTUAL MATTERS NOW UNKNOWNTO IT MAY HAVE GIVEN OR MAY HEREAFTER GIVE RISE TO CLAIMS THAT ARE PRESENTLYUNKNOWN, UNANTICIPATED AND UNSUSPECTED BY EITHER PARTY, AND PURCHASER FURTHERACKNOWLEDGES, AGREES, REPRESENTS, AND WARRANTS THAT THIS RELEASE HAS BEENNEGOTIATED AND AGREED UPON IN LIGHT OF SUCH UNDERSTANDING AND PURCHASERNEVERTHELESS HEREBY INTENDS TO RELEASE THE SELLER FROM THE CLAIMS, DEMANDS, ANDLIABILITIES DESCRIBED IN THE FIRST SENTENCE OF THIS SECTION 11.04.**

## **11.05****   Mitigation and Limitation onClaims**.  Notwithstanding anythingto the contrary contained in this Agreement:

### (a)           TheIndemnitee will take all reasonable steps to mitigate all losses, damages andthe like relating to an Action, including availing itself of any defenses,limitations, rights of contribution, claims against third Persons and otherrights at law or equity, and will provide such evidence and documentation ofthe nature and extent of the Action as may be reasonably requested by theIndemnifying Party.  The Indemnitee’sreasonable steps include the reasonable expenditure of money to mitigate orotherwise reduce or eliminate any loss or expense for which indemnificationwould otherwise be due under this Article XI, and the Indemnifying Partywill reimburse the Indemnitee for the Indemnitee’s reasonable expenditures inundertaking the mitigation.

### (b)           Theamount of any indemnity in relation to any Action is limited to the amount ofactual damages sustained by the Indemnitee by reason of such breach ornonperformance, net of the dollar amount of any insurance proceeds or proceedsfrom third parties receivable by the Indemnitee or any of its Affiliates with respectto such Action.

# ARTICLEXII

# TERMINATIONAND REMEDIES

## **12.01****   Rights To Terminate. **This Agreement may, by written noticegiven on or prior to the Closing Date, in the manner provided in Section 13.05,be terminated at any time prior to the Closing Date:

### (a)           **Seller/Purchaser Termination**:

#### (i)            bySeller, if there has been a material misrepresentation or a material default ormaterial breach by Purchaser with respect to any of Purchaser’s representationsand warranties in this Agreement or in any Related Agreement or the due andtimely performance of any of Purchaser’s covenants and agreements contained inthis Agreement or in any Related Agreement, and such misrepresentation, defaultor breach is not cured by the earlier****ofthe Closing 

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#### Date or thedate thirty (30) days after receipt by Purchaser of written notice specifyingparticularly such misrepresentation, default or breach;

#### (ii)           byPurchaser, if there has been a material misrepresentation or a material defaultor breach by Seller with respect to Seller’s representations and warranties inthis Agreement or in any Related Agreement or the due and timely performanceprior to the Closing of any of Seller’s covenants and agreements contained inthis Agreement or in any Related Agreement, and such misrepresentation, defaultor breach is not cured by the earlier of the Closing Date or the date thirty(30) days after receipt by Seller of written notice specifying particularlysuch misrepresentation, default or breach;

#### (iii)          bySeller, on thirty (30) days prior written notice to Purchaser, if Seller shallnot have received all Purchaser Required Consents by September 1, 2007;

#### (iv)          byPurchaser, on thirty (30) days prior written notice to Seller if Purchasershall not have received all Seller Required Consents by September 1, 2007;

#### (v)           byPurchaser in accordance with Section 7.21(b);

#### (vi)          bymutual agreement of Seller and Purchaser;

#### (vii)         bySeller or Purchaser if (A) all of the orders referenced in clause (viii) belowshall have become Final Orders and (B) the Closing has not occurred on orbefore the earlier of September 1, 2007, or the date which is thirty (30) daysafter the date upon which the last of all required Regulatory Approvals hasbeen received, unless such time has been extended pursuant to Section 7.21(b);

#### (viii)        bySeller or Purchaser if any of the Sale Procedures Order, Sale Order, DisclosureStatement Order and Confirmation Order has not been entered or become final ina sequence such that each of the same shall be a Final Order at or prior to theClosing Date by September 1, 2007; or

#### (ix)           bySeller or Purchaser if at the time the written notice of termination is given,there is in effect a preliminary or permanent injunction enjoining consummationof the transactions contemplated hereby.

### (b)           **Bankruptcy Court Termination.**  This Agreement shall automatically terminateat any time prior to the Closing upon entry by the Bankruptcy Court of the SaleOrder that (i) approves and consummates a Third Party Sale; and(ii) becomes a Final Order.  ThisAgreement also shall automatically terminate at any time prior to the Closingif the Bankruptcy Court should not approve the transactions contemplated bythis Agreement.

## **12.02****   Specific Performance**.  Any Party desiring to proceed with theClosing despite any failure or refusal of the other Party hereto to so proceedshall have the right to pursue the remedy of specific performance or to seek aninjunction without the requirement of posting any bond.

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## **12.03****   Purchaser’s Remedies**.  If this Agreement is terminated by Purchaserpursuant to Section 12.01(a)(ii) because of Seller’s uncureddefault hereunder then, subject to the next sentence, Purchaser shall beentitled to recover the Down Payment and, subject to Bankruptcy Court approval,damages equal to Purchaser’s actual, reasonable out-of-pocket costs andexpenses incurred in connection with the transactions contemplated by thisAgreement and the costs of Purchaser’s claim against Seller, including but notlimited to, reasonable legal expenses, plus costs and expenses associated withPurchaser’s Due Diligence Inspection and Reviews, provided that Purchaser’stotal recovery in excess of the Down Payment shall not exceed One HundredThousand Dollars ($100,000.00).  Prior toPurchaser’s exercise of its remedy pursuant to the previous sentence, Purchasermay seek specific performance of Seller’s obligations which (if awarded) willbe Purchaser’s sole remedy for such default hereunder. ** **Purchaserwill have no other remedies, whether at law or in equity, for any such defaultby Seller hereunder (provided Purchaser will still be entitled to the benefitof any obligations, covenants and indemnities hereunder and under theConfidentiality Agreement and any other Related Agreements which expresslysurvive the termination of this Agreement with respect to any other defaultsthereunder by Seller).  Purchaser mayonly avail itself of the remedies in this Section 12.03 if, at thetime of Seller’s default, Seller would not be permitted (whether at such timeor as of the expiration of any applicable cure period) to terminate thisAgreement pursuant to Section 12.01(a)(i).

## **12.04****   Seller’s Remedies**.  If the purchase of the Membership Interest isnot consummated in accordance with this Agreement by the date set forth in Section 12.01(a)(vii)because of Purchaser’s default hereunder, or if Seller terminates thisAgreement in accordance with Section 12.01(a)(i), then Seller willhave the right to pursue the remedy of specific performance under Section 12.02herein which, if awarded, will be Seller’s sole remedy for such default.  If Seller does not seek the remedy ofspecific performance for such default, then Seller will, as its sole remedy,have the right to retain the Down Payment as liquidated damages,****and no other remedy, whether at law or in equity,for the failure to close by Purchaser hereunder; provided, however, that Sellerwill still be entitled to receive any costs and expenses due to Seller pursuantto this Agreement and the benefit of any obligations, covenants and indemnitieshereunder and under the Confidentiality Agreement by Purchaser which expresslysurvive the termination of this Agreement with respect to any other defaultsthereunder by Purchaser.  Seller may onlyavail itself of the remedy in this Section 12.04 if, at the time ofPurchaser’s default, Seller is not in material default hereunder.  **THE PARTIESEXPRESSLY AGREE AND ACKNOWLEDGE THAT SELLER’S ACTUAL DAMAGES WOULD BE EXTREMELYDIFFICULT OR IMPRACTICABLE TO ASCERTAIN AND THAT THE DOWN PAYMENT REPRESENTSTHE PARTIES’ REASONABLE ESTIMATE OF SUCH DAMAGES.  SUCH LIQUIDATED DAMAGES ARE NOT INTENDED AS AFORFEITURE OR PENALTY.**

## **12.05****   Effect of Termination.**  Except as set forth in Section 12.03above, any termination of this Agreement by any Party shall have the effect ofcausing this Agreement to thereupon become void and of no further force oreffect whatsoever, and thereupon no Party will have any rights, duties,liabilities or obligations of any kind or nature whatsoever against any otherParty hereto based upon either this Agreement or the transactions contemplatedhereby, except in each case the obligations of each Party for its own expensesincurred in connection with the transactions contemplated by this Agreement asprovided in Section 13.04 and the obligations of each party with respectto confidentiality set forth in Section 7.02 hereof and theConfidentiality Agreement.

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# ARTICLEXIII

# MISCELLANEOUSPROVISIONS

## **13.01****   Commissions and Finders’Fees**.  Each of the Partiesrepresents that the negotiations relative to this Agreement and thetransactions contemplated hereby have been carried on by Seller directly withPurchaser in such manner as not to give rise to any claims against any of theParties hereto for a brokerage commission, finders’ fee or other likepayment.  Insofar as any such claims aremade which are alleged to be based on an agreement or arrangements made by, oron behalf of, a Party, such Party agrees to indemnify and hold the other Partyharmless from and against all liability, loss, cost, charge or expense, includingbut not limited to, reasonable counsel fees, arising therefrom.

## **13.02****   Amendment and Modification**.  This Agreement may only be amended, modifiedand supplemented by written agreement executed by Purchaser and Seller and, ifthe Bankruptcy Court has already approved this Agreement, with the approval ofthe Bankruptcy Court.

## **13.03****   Waiver of Compliance**.  Any failure by Seller, on the one hand, orPurchaser, on the other hand, to comply with any obligation, covenant,agreement or condition herein may be expressly waived in writing by Purchaseror Seller, respectively, but such waiver or failure to insist upon strictcompliance with such obligation, covenant, agreement or condition shall notoperate as a waiver of, or estoppel with respect to, any subsequent or otherfailure.

## **13.04****   Expenses**.  Each of the Parties hereto will pay its ownexpenses incurred by it or on its behalf in connection with this Agreement orany transactions contemplated by this Agreement, whether or not suchtransactions shall be consummated. ** **In addition, Purchaser shall bearthe expense of any transfer Tax or sales Tax applicable to the transactionscontemplated hereby.

## **13.05****   Notices**.  All notices, requests, demands and othercommunications required or permitted hereunder shall be in writing and shall bedeemed to have been duly given if delivered by hand, by recognized overnightcourier service or facsimile transmission:

### (a)           If toSeller, to:

MirantNew York, Inc.

c/oMirant Corporation

1155Perimeter Center West

Atlanta,GA 30338-5416

Attention:Jeffrey Perry, President

Fax:(678) 579-3824

Email: jeffrey.perry@mirant.com

With a copy to:

MirantNew York, Inc.

c/oMirant Corporation

1155Perimeter Center West

Atlanta, GA 30338-5416

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Attention:Sonnet Edmonds, Vice President

andAssistant General Counsel

Fax:(678) 579-5890

Email:

And

Hiscock & Barclay,LLP

One Park Place

300 South State Street

Syracuse, NY 13202

Attention: George S.Deptula, Esq.

Fax: (315) 425-8545

Email: gdeptula@hiscockbarclay.com

or to such other Personor address as Seller shall furnish to Purchaser in writing.

### (b)           If toPurchaser, to:

AllianceEnergy Renewables, LLC

6941Kassonta Drive

Jamesville,NY  13078

Attn:Samuel G. Nappi, President

Fax:315-682-7089

Email:snappi@allianceenergy.us

With a copy to:

Troutman Sanders LLP405 Lexington AvenueNew York, NY 10174Attention: Howard L. Margulis, Esq.Fax: 212-704-8330Email:

or to such other Personor address as Purchaser shall furnish to Seller in writing.

## **13.06****   Assignment**.  This Agreement and all of the provisions hereofshall be binding upon and inure to the benefit of the Parties hereto and theirrespective successors and permitted assigns, but neither this Agreement nor anyof the rights, interests or obligations hereunder shall be assigned by anyParty hereto without the prior written consent of the other Party; provided,however, that Purchaser may assign this Agreement and its rights, interests andobligations hereunder to any of Purchaser’s Affiliates.  Any such assignment shall not releasePurchaser from its obligations hereunder.

## **13.07****   Governing Law**.  The validity, interpretation and effect ofthis Agreement are governed by and will be construed in accordance with thelaws of the State of New York applicable to contracts made and performed insuch state and without regard to conflicts of laws 

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## rules,provided that, while the Bankruptcy Case is pending, as to any claim or disputeinvolving Seller or its Affiliates, or arising out of or relating to thisAgreement or any Related Agreement (a “**Dispute**”),this Agreement shall be governed by and construed and enforced in accordancewith the Bankruptcy Code and, to the extent not inconsistent with theBankruptcy Code, the laws of the State of New York applicable to contracts madeand performed in such state and without regard to conflicts of laws rules.

## **13.08****   Jurisdiction of BankruptcyCourt.**  The Parties acknowledgeand agree that the Bankruptcy Court shall have exclusive jurisdiction over thisAgreement and that, while the Bankruptcy Case is pending, any Dispute shall beproperly brought only before the Bankruptcy Court. Notwithstanding theprovisions of this Section 13.08, if and to the extent (i) theBankruptcy Court refuses to accept jurisdiction over any Dispute, or(ii) the Bankruptcy Case is dismissed or closed and does not retainjurisdiction over a Dispute, the Parties consent to binding arbitration inaccordance with the provisions of Section 13.09.

## **13.09****  ****Effect ofClosing Over Known Unsatisfied Conditions or Breached Representations,Warranties or Covenants. **IfSeller or Purchaser elects to proceed with the Closing knowing of any failureto be satisfied of any condition in its favor or knowing of the breach of anyrepresentation, warranty or covenant by the other Party, the condition that isknown to be unsatisfied or the representation, warranty or covenant which isknown to be breached at the Closing Date will be deemed waived by such Party,and such Party will be deemed to fully release and forever discharge the otherParty on account of any and all claims, demands or charges, known or unknown,with respect to the same.

## **13.10****   Dispute Resolution**.

### (a)           Except as otherwise provided in this Agreement, in the event of anyDispute, the Party wishing to declare a Dispute shall deliver to the otherparty a written notice identifying the disputed issue.

### (b)           Either Party may give the other Party written notice of any Disputenot resolved in the normal course of business. Executives of both Parties shall meet at a mutually acceptable time andplace within ten (10) Business Days after delivery of such notice andthereafter as often as they reasonably deem necessary, to exchange relevantinformation and to attempt to resolve the Dispute.  In such meetings and exchanges, a party shallhave the right to designate as confidential any information that such Partyoffers.  No confidential informationexchanged in such meetings for the purpose of resolving a Dispute may be usedby a Party in litigation against the other Party; provided that, if the sameinformation is obtained by the Party seeking to use it through other lawfulmeans, such as discovery under Section 13.10(c)(iv) below, this provision shallnot bar the use of such information that is so obtained.  If the matter has not been resolved in theaforementioned manner within thirty (30) days of the disputing Party’s noticehaving been delivered, or if the Parties fail to meet within ten (10) BusinessDays as required above, either Party may initiate binding arbitration in NewYork, New York, as hereafter provided in clause (c) below.

### (c)           The Parties agree that all disputes,controversies or claims that may arise out of the transactions contemplated bythis Agreement, or the breach, termination or invalidity thereof, 

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### including any requests foremergency or equitable relief and/or specific performance, shall be submittedto, and determined by, binding arbitration in accordance with the followingprocedures:

#### (i)            EitherParty may submit a dispute, controversy or claim to arbitration by giving theother Party written notice to such effect, which notice shall describe, inreasonable detail, the facts and legal grounds forming the basis for the filingParty’s request for relief.  Thearbitration shall be held before one (1) neutral arbitrator in New York, NewYork and a decision as to any matters submitted thereto shall be made by sucharbitrator.

#### (ii)           Withinthirty (30) days after the other Party’s receipt of such demand, the Partiesshall make a good faith effort to select such arbitrator.  In the event of a failure to make such selection,and if the Parties cannot resolve their disagreements as to the same withinthirty (30) days, such arbitrator shall be selected by the American ArbitrationAssociation (“AAA”).  In any event, thearbitrator shall have a background in, and knowledge of, transactions in theenergy industry and shall otherwise be an appropriate person based on thenature of the dispute. If a person with experience in such matters is notavailable, the arbitrator shall be chosen from the retired federal judges poolmaintained by AAA.

#### (iii)          Thearbitration shall be governed by the Commercial Arbitration Rules of the AAA.

#### (iv)          Alldiscovery shall be guided by the Federal Rules of Civil Procedure.  All issues concerning discovery upon whichthe parties cannot agree shall be submitted to the arbitrator fordetermination.

#### (v)           Inrendering an award, the arbitrator shall determine the rights and obligationsof the parties according to the substantive and procedural laws of the State ofNew York.

#### (vi)          Thedecision of, and award rendered by, the arbitrator, shall be determined no morethan sixty (60) days after the submission of the case to the arbitrator andshall be final and binding on the parties and shall not be subject toappeal.  Judgment on the award may beentered in and enforced by any court of competent jurisdiction.

#### (vii)         Each Party shall bear itsown costs and expenses (including filing fees) with respect to the arbitration,including one-half of the fees and expenses of the arbitrator.

## **13.11****   Delays or Omissions**.  Except as expressly provided herein, no delayor omission to exercise any right, power or remedy accruing to any Party, uponany breach or default of the other Party to this Agreement, shall impair anysuch right, power or remedy of such Party, nor shall it be construed to be awaiver of any such breach or default, or an acquiescence therein, or of anysimilar breach or default thereafter occurring; nor shall any waiver of anysingle breach or default be deemed a waiver of any other breach or defaulttheretofore or thereafter occurring. Except as 

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## provided inSection 13.09, any waiver, permit, consent or approval of any kind or characteron the part of any party of any breach or default under this Agreement, or anywaiver on the part of any Party of any provisions or conditions of thisAgreement, must be in writing and shall be effective only to the extentspecifically set forth in such writing. All remedies, either under this agreement or by law or otherwiseafforded to any Party, shall be cumulative and not alternative.

## **13.12****   Conflicts. **In the event of any conflicts orinconsistencies between the terms of this Agreement and the terms of any of theRelated Agreements, the terms of this Agreement will govern and prevail.

## **13.13****   Counterparts**.  This Agreement may be executed simultaneouslyin two (2) or more counterparts, each of which shall be deemed an original, butall of which together shall constitute one and the same instrument.  The exchange of copies of this Agreement orother documents or agreements to be delivered pursuant to this Agreement,including executed signature pages, by electronic transmission will constituteeffective execution and delivery of this Agreement or any such agreement ordocument for all purposes. Signatures transmitted electronically willconstitute original signatures for all purposes.

## **13.14****   Effectiveness; BindingEffect**.  This Agreement shallbecome effective as to each Party hereto when and only when this Agreementshall have been executed by such Party; provided, however, that thisAgreement shall be null and void abinitio as to each Partyhereto in the event that both Parties hereto shall not have executed thisAgreement within five (5) days of the date upon which any Party hereto shallhave executed this Agreement.

## **13.15****   Headings**.  The headings of the Sections and Articles ofthis Agreement are inserted for convenience only and shall not constitute apart hereof.

## **13.16****   Entire Agreement**.  This Agreement, including the Schedules andExhibits hereto, sets forth the entire agreement and understanding of theParties hereto in respect of the subject matter contained herein, andsupersedes all prior agreements, promises, covenants, arrangements,communications, representations or warranties, whether oral or written, expressor implied, by any officer, employee or representative of any party hereto,except the Confidentiality Agreement****andany other Related Agreements, which remain in full force and effect.

## **13.17****  ****NoRecourse Against Others**. This Agreement is solely and exclusively between Purchaser and Sellerand any obligations of Seller created herein shall be the obligations solely ofSeller. The directors, officers, employees, representatives and Affiliates ofSeller or the Company shall have no liability for any obligations of Sellerunder this Agreement or for any Damages based on, in respect of or by reason ofthis Agreement or Seller’s obligations hereunder or any breach thereof.  Purchaser, for itself and its affiliates(including, post-Closing, the Company), hereby waives, remises and releaseseach director, officer, employee, representative and affiliate of Seller andthe Company from all such obligations and Damages.

## **13.18****      Third Parties**.  Except as specifically set forth or referredto herein, nothing herein expressed or implied is intended or shall beconstrued to confer upon or give to any person or entity other than the Partieshereto and their successors or assigns, any rights or remedies under or byreason of this Agreement.

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## **13.19****   Mutual Agreement**.**** This Agreement embodies the arm’s lengthnegotiation and mutual agreement between the Parties hereto and shall not beconstrued against any Party as having been drafted by it.

## **13.20****   Severability**.  If in any jurisdiction, any provision of thisAgreement or its application to any Party or circumstance is restricted,prohibited or unenforceable, such provision shall, as to such jurisdiction, beineffective only to the extent of such restriction, prohibition orunenforceability without invalidating the remaining provisions hereof andwithout affecting the validity or enforceability of such provision in any otherjurisdiction or its application to the other Party or any othercircumstances.  In addition, if any oneor more of the provisions contained in this Agreement shall for any reason inany jurisdiction be held to be excessively broad as to time, duration,geographical scope, activity or subject, it shall be construed, by limiting andreducing it, so as to be enforceable to the extent compatible with theapplicable law of such jurisdiction as it shall then appear.

[The remainder of this page is intentionally left blank]

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IN WITNESSWHEREOF, the Parties hereto have executed this Agreement, each by its dulyauthorized officer, all as of the day and year first above written.
|        | ALLIANCE ENERGY RENEWABLES, LLC |
|--------|---------------------------------|
|   |                            |   |
|   |                            |   |
|   | By:                             | Samuel G. Nappi, Chairman and   President of Alliance Energy, Inc.,   the Sole and Managing Member of   Alliance Energy Renewables, LLC |
|   |                            |   |
|   |                            |   |
|   | MIRANT NEW YORK, INC.           |
|   |                            |   |
|   |                            |   |
|   | By:                             | Jeffrey R. Perry, President |

 

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**SCHEDULES**

**ALL CAPITALIZEDTERMS USED IN THESE DISCLOSURE SCHEDULES HAVE THE MEANINGS SET FORTH IN THEMEMBERSHIP INTEREST PURCHASE AND SALE AGREEMENT (THE “AGREEMENT”).  THE DISCLOSURES MADE IN THESE DISCLOSURESCHEDULES RELATE TO ANY AND ALL OF THE REPRESENTATIONS AND WARRANTIES MADE BYSELLER IN THIS AGREEMENT.  SCHEDULEREFERENCES IN THESE DISCLOSURE SCHEDULES ARE FOR CONVENIENCE ONLY, AND THEDISCLOSURE OF ANY FACT OR ITEM IN ANY DISCLOSURE SCHEDULE REFERENCED BY APARTICULAR SECTION OF THE AGREEMENT SHALL BE DEEMED TO HAVE BEEN DISCLOSED WITHRESPECT TO EVERY OTHER SECTION OF THE AGREEMENT.**

**MATTERS REFLECTEDIN THESE DISCLOSURE SCHEDULES ARE NOT NECESSARILY LIMITED TO MATTERS REQUIREDBY THE AGREEMENT TO BE REFLECTED IN THE DISCLOSURE SCHEDULES.  SUCH ADDITIONAL MATTERS ARE SET FORTH FORINFORMATIONAL PURPOSES AND DO NOT NECESSARILY INCLUDE OTHER MATTERS OF ASIMILAR NATURE.  IN NO EVENT SHALL THEINCLUSION OF ANY SUCH MATTER IN THESE DISCLOSURE SCHEDULES BE DEEMED ORINTERPRETED TO BROADEN SELLER’S REPRESENTATIONS, WARRANTIES, COVENANTS ORAGREEMENTS CONTAINED IN THE AGREEMENT. THE INCLUSION OF AN ITEM IN THEDISCLOSURE SCHEDULES SHALL NOT BE DEEMED AN ADMISSION THAT SUCH ITEM REPRESENTSA MATERIAL EXCEPTION OR FACT, EVENT OR CIRCUMSTANCE OR THAT SUCH ITEM ISREASONABLY LIKELY TO RESULT IN A MATERIAL ADVERSE EFFECT.  CAPITALIZED TERMS USED IN THESE DISCLOSURESCHEDULES AND NOT DEFINED HEREIN SHALL HAVE THE MEANING SET FORTH IN THEAGREEMENT.**

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**Schedule 1.1**

**Seller’s Representatives**

Amin M. Lakhani, Project Director,Sale of NY-Gen

Robert Dowd, ProjectDirector, Swinging Bridge Remediation

### Kevin McLeod, Plant Manager, NY-Gen

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**Schedule1.2**

**Purchaser’sRepresentatives**

Samuel J. Nappi, Chairmanand President, Alliance Energy, Inc.

JosephKlimaszewski, Regional Director, Alliance Energy, Inc.

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**Schedule1.41**

**Form ofEscrow Agreement**

**THISESCROW AGREEMENT**, dated as of                                ,2007, by and between MIRANT NEW YORK, INC., a Delaware corporation having itsprincipal place of business at 1155 Perimeter Center West, Atlanta, GA 30338 (**“Seller”**), ALLIANCE ENERGY RENEWABLES, LLC, a New Yorklimited liability company having its principal place of business at 6941Kassonta Drive, Jamesville, NY 13078 (**“Purchaser”**),and HISCOCK & BARCLAY, LLP (**“Escrow Agent”**).Each of Seller, Purchaser and Escrow Agent shall hereafter be referred to as a**“Party”**, together, the **“Parties”**.

**WHEREAS**, Purchaser and Seller have entered into thatcertain Membership Interest Purchase and Sale Agreement dated as of January___, 2007 (the “**Agreement**”), which provides forthe sale by Seller to Purchaser of one hundred percent (100%) of a MembershipInterest held by Seller in Mirant NY-Gen, LLC. Capitalized terms used herein and not otherwise defined having themeanings assigned to them in the Agreement, and

**WHEREAS**, pursuant to Section 2.02 of the Agreement,Three Hundred Thousand Dollars ($300,000.00), comprising ten percent (10%) ofthe Purchase Price, is to be paid by Purchaser to Escrow Agent as a DownPayment and held in escrow by Escrow Agent in accordance with the terms hereof.

Accordingly,the Parties hereby agree as follows:

1.             Appointment andAcceptance of Escrow Agent.

Sellerappoints Hiscock & Barclay, LLP as Escrow Agent, and Hiscock & Barclay,LLP accepts such appointment and agrees to hold and dispose of the EscrowAmount (as defined in Section 2 below) in accordance with the terms of thisEscrow Agreement.  Purchaser consents tosuch appointment with knowledge that Escrow Agent is acting as counsel forSeller in connection with the transactions described in the Agreement.  The duties and obligations of Escrow Agentare those specifically provided in this Escrow Agreement and no other, andEscrow Agent shall have no liability under, or duty to inquire into, the termsand provisions of any other agreement or instrument.

2.             Funds to beReceived by Escrow Agent.

TheEscrow Agent hereby accepts the following funds from Purchaser on behalf ofSeller:

**Three Hundred Thousand Dollars ($300,000.00)**

Uponbeing transferred to Escrow Agent, such funds shall be deposited in an interestbearing account in the name of Escrow Agent, as escrow agent, under theEmployer 

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IdentificationNumber of Purchaser.  Such funds,together with all interest accrued thereon, shall be referred to herein as the **“Escrow Amount”**.

3.             Release of EscrowAmount.

TheEscrow Agent shall deliver the Escrow Amount as follows:

### (a)           Under Section 7.15(g)of the Agreement, Purchaser has acknowledged that the sale of the MembershipInterest is subject to Bankruptcy Court approval and to higher and bettercounteroffers and that the Membership Interest will be sold to the highest andbest bidder at an Auction, as therein described.  Subject to the provisions contained in thefinal sentence of this clause (a), upon receipt of (i) written certificationfrom Seller indicating that the Bankruptcy Court has entered a Sale Orderauthorizing a sale of the Membership Interest to such Prevailing Bidder in thecircumstances described in Section 7.15(g) or, where Purchaser has beena back-up bidder, that the sale to the Prevailing Bidder has closed, togetherwith (ii) a written payment instruction (a **“PaymentInstruction”**) signed by Seller, Escrow Agent shall return the EscrowAmount to Purchaser no later than the third Business Day after Escrow Agent’sreceipt of said written certification and accompanying Payment Instruction. Acopy of such written certification and Payment Instruction shall be deliveredby Seller to Purchaser contemporaneously with delivery of the same to EscrowAgent. If Purchaser should exercise its right to terminate this Agreement asfurther described in clauses (b), (d) and (e) hereof and such right isexercised prior to the closing of the sale to the Prevailing Bidder, asreferenced herein, then Escrow Agent shall return the Escrow Amount to Purchaserupon receipt from Purchaser of the written certifications and accompanyingPayment Instructions referenced in such clauses.

### (b)           If the Agreement isterminated by Purchaser because of a material misrepresentation by Seller or amaterial default or breach by Seller with respect to Seller’s representationsand warranties in the Agreement or any Related Agreement or the failure bySeller to perform in a due and timely manner prior to the Closing of any ofSeller’s covenants and agreements contained in the Agreement or any RelatedAgreement, which misrepresentation, default or breach is not cured by theearlier of the Closing Date or the date thirty (30) days after receipt bySeller of written notice describing such misrepresentation, default or breach then,upon receipt of (i) written certification from Purchaser stating (A) the basisfor the termination and describing the facts underlying same, and (B) that, tothe best of Purchaser’s Knowledge, Seller is not entitled to terminate the Agreement due to anymisrepresentation, default or breach by Purchaser, as described in Section12.01(a)(i) of the Agreement, together with (ii) a Payment Instruction signedby Purchaser, Escrow Agent shall return the Escrow Amount to Purchaser no laterthan the third Business Day after Escrow Agent’s receipt of said writtencertification and accompanying Payment Instruction. A copy of such writtencertification and Payment Instruction shall be delivered by Purchaser to Sellercontemporaneously with delivery of the same to Escrow Agent.

### (c)           If the Agreement isterminated by Seller because of a material misrepresentation by Purchaser or amaterial default or breach by Purchaser with respect to Purchaser’srepresentations and warranties in the Agreement or any Related Agreement or thefailure by Purchaser to perform in a due and timely manner prior to the Closingof any of 

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### Purchaser’scovenants and agreements contained in the Agreement or any Related Agreement,which misrepresentation, default or breach is not cured by the earlier of theClosing Date or the date thirty (30) days after receipt by Purchaser of writtennotice describing such misrepresentation, default or breach then, upon receiptof (i) written certification from Seller stating (A) the basis for thetermination and describing the facts underlying same, and (B) that, to the bestof Seller’s Knowledge,  Purchaser is notentitled to terminate the Agreement due to any material default by Seller,together with (ii) a Payment Instruction signed by Seller, Escrow Agent shallrelease the Escrow Amount to Seller no later than the third Business Day afterEscrow Agent’s receipt of said written certification and accompanying PaymentInstruction. A copy of such written certification and Payment Instruction shallbe delivered by Seller to Purchaser contemporaneously with delivery of the sameto Escrow Agent.

### (d)           If the Agreement isterminated by Purchaser because Seller has elected not to repair or replacedamage to the Station after a Major Loss then, no later than the third BusinessDay after Escrow Agent’s receipt of written certification of such event signedby Purchaser, together with a Payment Instruction signed by Purchaser, EscrowAgent shall return the Escrow Amount to Purchaser. A copy of such writtencertification and Payment Instruction shall be delivered by Purchaser to Sellercontemporaneously with delivery of the same to Escrow Agent.

### (e)           If the Agreement isterminated by either Purchaser or Seller because: (i) all of the ordersreferenced in clause (ii) below have become Final Orders but the Closing hasnot occurred on or before the earlier of September 1, 2007, or  the date which is thirty (30) days after thedate upon which the last of all regulatory approvals has been received (whichtime has not been extended by agreement between the Parties), or (ii) any ofthe Sale Procedures Order, Sale Order, Disclosure Statement Order andConfirmation Order has not been entered or become final in a sequence such thateach of the same shall be a Final Order at or prior to the Closing Date, as thesame may have been extended as described in (i) aforementioned, or (iii) thereis in effect a preliminary or permanent injunction enjoining consummation ofthe transactions contemplated under the Agreement at the time the written noticeof termination is given then, no later than the third Business Day after EscrowAgent’s receipt of written certification from either Purchaser or Seller, asthe case may be, of any such event, together with a Payment Instruction signedby the certifying Party, Escrow Agent shall release the Escrow Amount to theother Party. A copy of such written certification and Payment Instruction shallbe delivered by the certifying Party to the other Party contemporaneously withdelivery of the same to Escrow Agent.

### (f)            If, prior to makingpayment in accordance with this Escrow Agreement, Escrow Agent receives anobjection to payment from either Purchaser or Seller, as the case may be,Escrow Agent shall not release any of the Escrow Amount pending receipt ofeither (i) a Payment Instruction signed by both Purchaser and Seller (a **“Joint Payment Instruction”**) specifying theagreement of the Parties as to the action to be taken by Escrow Agent inrespect of payment of the entire Escrow Amount or (ii) a notice from eitherPurchaser or Seller stating that the dispute over payment of the Escrow Amounthas been submitted to the AmericanArbitration Association for resolution through the dispute resolution procedureset forth in Section 13.10(c) of the Agreement, and that a final decision ofthe arbitration in such proceeding has been rendered (the “**Arbitration Decision**”), a copy of which isattached to such notice.  No laterthan the third Business Day after Escrow Agent’s receipt of such PaymentInstruction or Arbitration Decision, as applicable, Escrow Agent shall releasethe Escrow Amount in accordance therewith. A copy of the notice and 

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### ArbitrationDecision referenced in clause (ii) aforementioned shall be delivered to theother Party by the Party issuing such notice contemporaneously with delivery ofthe same to Escrow Agent.

(g)           Ifat any time, Escrow Agent shall receive a Joint Payment Instruction (includingbut not limited to, in the circumstances described in clause (f) above) thenEscrow Agent shall release the Escrow Amount in accordance with such JointPayment Instruction no later than the third Business Day after Escrow Agent’sreceipt of such Joint Payment Instruction.

(h)           IfEscrow Agent receives written certification from Seller that the Closing underthe Agreement has occurred, together with a Payment Instruction signed bySeller, Escrow Agent shall release the Escrow Amount to Seller no later thanthe third Business Day after Escrow Agent’s receipt of such writtencertification and Payment Instruction. A copy of such written certification andPayment Instruction shall be delivered by Seller to Purchaser contemporaneouslywith delivery of the same to Escrow Agent.

Uponany delivery of the Escrow Amount as provided in this Section 3, this EscrowAgreement shall terminate, and Escrow Agent shall be released and dischargedfrom any further responsibility or obligation and from all liability under thisEscrow Agreement.

4.             Concerning EscrowAgent.

(a)           Escrow Agent shall nothave any liability to any Party or to any third party arising out of itsservices as Escrow Agent under this Escrow Agreement, except for damagesdirectly resulting from Escrow Agent’s gross negligence or willful misconduct.

(b)           Escrow Agent mayconsult with, and obtain advice from legal counsel in the event of any disputeor question as to the construction of any of the provisions hereof or itsduties hereunder, and it shall incur no liability and shall be fully protectedin acting in good faith in accordance with the advice of such counsel.

(c)           Escrow Agent shall notbe bound by any modification of this Escrow Agreement unless it shall havespecifically consented thereto in writing.

(d)           Seller shall indemnifyEscrow Agent and hold it harmless against any loss, liability, damage orexpense (including reasonable attorneys’ fees) or any tax, additions to tax,interest and penalties (including for failing to file proper tax returns orinformation reporting returns) that Escrow Agent may incur as a result ofacting as escrow agent under this Escrow Agreement, except for any loss,liability, damage or expense arising from Escrow Agent’s own gross negligenceor willful misconduct.  For this purpose,if Escrow Agent is an attorney or firm of attorneys, the term “attorneys’ fees”means fees payable to any independent counsel retained by Escrow Agent inconnection with its services under this Escrow Agreement.

(e)           Escrow Agent shall beentitled to rely upon any judgment, notice, instrument or other writingdelivered to it under this Escrow Agreement without being required to determinethe authenticity of, or the correctness of any fact stated in, thatwriting.  Escrow Agent may act inreliance upon any instrument or signature believed by it to be genuine and mayassume that any 

4

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person purportingto give any notice or receipt of advice or make any statement or execute anydocument in connection with this Escrow Agreement has been duly authorized todo so.

(f)            All of Escrow Agent’srights of indemnification provided for in this Escrow Agreement shall survivethe resignation of Escrow Agent, its replacement by a successor Escrow Agent,its delivery of the Escrow Amount in accordance with this Escrow Agreement, thetermination of this Escrow Agreement and the escrow, and any other event thatoccurs after this date.

(g)           Escrow Agent shall haveno responsibility with respect to the sufficiency of the arrangementscontemplated by this Escrow Agreement to accomplish the intentions of theParties.

5.             Representations.

Eachof the Parties hereto represents and warrants to the other Parties hereto thatit has full power and authority to enter into and perform this EscrowAgreement; that the execution and delivery of this Escrow Agreement by it wasduly authorized by all necessary corporate or other action, as applicable; and thatthis Escrow Agreement is enforceable against it in accordance with its terms.

6.             Resignation;Successor Escrow Agent.

EscrowAgent (and any successor escrow agent) may at any time resign as such uponfifteen (15) days’ prior written notice to Purchaser and Seller.  Upon receipt of a notice of resignation,Seller shall select a successor escrow agent within twenty (20) days, but ifwithin that twenty-day period Escrow Agent has not received a notice signed bySeller appointing a successor escrow agent and setting forth its name andaddress, Escrow Agent may (but shall not be obligated to) select on behalf ofSeller a successor escrow agent.  Sellershall be solely responsible for the fees and charges of Escrow Agent and anysuccessor escrow agent.  A successorescrow agent selected by the resigning Escrow Agent may become Escrow Agent byconfirming in writing its acceptance of the position.  Seller shall sign such other documents as thesuccessor escrow agent reasonably requests in connection with its appointment.Escrow Agent shall deliver the Escrow Amount then held by it to the successorescrow agent selected pursuant to this provision and, upon such delivery, thesuccessor escrow agent shall become Escrow Agent for all purposes under thisEscrow Agreement and shall have all of the rights and obligations of EscrowAgent under this Escrow Agreement, and the resigning Escrow Agent shall have nofurther responsibilities or obligations and shall be released from allliability under this Escrow Agreement. Notwithstanding the foregoing, if no successor escrow agent has beendesignated within the twenty (20) day period referred to above, (a) EscrowAgent shall have the right to deposit or cause to be deposited the EscrowAmount with a court of competent jurisdiction, and the parties shall berequired to accept a successor agent appointed by such court and; (b) allobligations of Escrow Agent hereunder shall thereupon cease and terminate.

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7.             Notices.

All notices, demands,instructions, objections or other communications under this Escrow Agreementshall be in writing and shall be deemed given when sent by United Statescertified mail, return receipt requested, or by nationally recognized overnightcourier service (such as FedEx) to the respective Parties at the followingaddresses (or at such other address as a Party may specify by notice given inaccordance with this Section 7):

Ifto Seller:

MirantNew York, Inc.

c/oMirant Corporation

1155Perimeter Center West

Atlanta,GA 30338-5416

Attention:Jeffrey Perry, President

Fax:(678) 579-3824

Email: jeffrey.perry@mirant.com

With a copy to:

Hiscock & Barclay,LLP

Financial Plaza

221 South Warren Street

Post Office Box 4878

Syracuse, NY  13221-4878

Attention: George S.Deptula, Esq.

Fax: (315) 425-8545

Email:gdeptula@hiscockbarclay.com

Ifto Purchaser:

AllianceEnergy Renewables, LLC

6941Kassonta Drive

Jamesville,NY  13078

Attn:Samuel G. Nappi, President

Fax:315-682-7089

Email:snappi@allianceenergy.us

Witha copy to:

TroutmanSanders LLP405 Lexington AvenueNew York, NY 10174Attention: Howard L. Margulis, Esq.Fax: 212-704-8330Email: howard.margulis@troutmansanders.com

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Ifto Escrow Agent:

Hiscock & Barclay,LLP

Financial Plaza

221 South Warren Street

Post Office Box 4878

Syracuse, NY  13221-4878

Attention: George S.Deptula, Esq.

Fax: (315) 425-8545

Email:gdeptula@hiscockbarclay.com

8.             Miscellaneous.

(a)           Escrow Agent shall bereimbursed solely by Seller upon its request for all reasonable expenses,disbursements and advances incurred or made by it in accordance with theprovisions of this Agreement (including the reasonable compensation and theexpenses and disbursements of its agents and counsel).  Escrow Agent shall receive a fee for itsservices hereunder in an amount agreed to in writing by Escrow Agent andSeller.

(b)           If any provision ofthis Escrow Agreement is determined by any court of competent jurisdiction tobe invalid or unenforceable in any jurisdiction, the remaining provisions ofthis Escrow Agreement shall not be affected thereby, and the invalidity orunenforceability in any jurisdiction shall not invalidate or renderunenforceable that provision in any other jurisdiction.  It is understood, however, that the partiesintend each provision of this Escrow Agreement to be valid and enforceable andeach of them waives all rights to object to any provision of this EscrowAgreement.

(c)           This Escrow Agreementshall be binding upon and inure solely to the benefit of the Parties and theirrespective successors and permitted assigns. Except as expressly provided in Section 6 hereof, no Party may assignits rights or obligations under this Escrow Agreement or any interest in theEscrow Amount without the written consent of the other Parties, and any otherpurported assignment shall be void.

(d)           This Escrow Agreementshall be governed by and construed in accordance with the law of the State ofNew York without regard to its conflicts-of-law rules or principles.

(e)           The Parties hereby consent and agree that the Supreme Court of theState of New York for New York County, and the United States District Court forthe Southern District of New York (Manhattan) each shall have personaljurisdiction and proper venue with respect to any dispute between the Parties; providedthat that the foregoing consent shall not deprive any Party of the rightin its discretion to voluntarily commence or participate in any other forumhaving jurisdiction and venue or deprive any Party of the right to appeal thedecision of any such court to a proper appellate court located elsewhere.   EachParty will not raise, and each Party hereby absolutely, unconditionally,irrevocably and expressly waives forever, any objection or defense in any suchdispute to any such jurisdiction as an inconvenient forum.

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(f)            This Escrow Agreementconstitutes the entire agreement between the Parties with respect to thesubject matter hereof, supersedes all other prior agreements and undertakings,both written and oral, between the Parties with respect to the subject matterhereof, and cannot be changed or terminated orally.  Any waiver of any provision of this EscrowAgreement must be in writing.

(g)           This Escrow Agreementmay be executed in any number of counterparts, each of which shall be deemed tobe an original and all of which taken together shall constitute one and thesame instrument.

(h)           The provisions of thisEscrow Agreement shall be deemed to be for the exclusive benefit of Seller,Purchaser and Escrow Agent, and shall not be deemed to be for the benefit of,or enforceable by, any third party.

(i)            Seller, Purchaser andEscrow Agent each acknowledge that this Escrow Agreement has been mutuallydrafted by the Parties and has been the subject of negotiation among theParties.

[The remainder ofthis page is intentionally left blank]

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IN WITNESS WHEREOF, the Parties have executed this Escrow Agreement asof the date first above written.
|            | **PURCHASER**                   |                                             |
|------------|---------------------------------|--------------------------------------------------|
| ** ** |                            |                                             |
| ** ** |                            |                                             |
|       | ALLIANCE ENERGY RENEWABLES, LLC |
|       |                            |                                             |
|       |                            |                                             |
|       |                            |                                             |
|       | By:                             | Samuel G. Nappi                                  |
|       |                            | Chairman and President of Alliance Energy, Inc., |
|       |                            | Sole and Managing Member of Alliance Energy      |
|       |                            | Renewables, LLC                                  |
| ** ** |                            |                                             |
|       |                            |                                             |
|       | **SELLER**                      |
|       |                            |                                             |
|       |                            |                                             |
| ** ** | MIRANT NEW YORK, INC.           |
| ** ** |                            |
| ** ** |                            |
| ** ** |                            |                                             |
| ** ** | By:                             |
| ** ** | Title:                          |
| ** ** |                            |
| ** ** |                            |
|       | **ESCROW AGENT**                |
|       | ** **                      |
|       | ** **                      |
|       | HISCOCK & BARCLAY, LLP      |
|       | By:                             |                                             |   |
|       |                            | George S. Deptula, Esq.                          |
|            |                                 |                                                  |  |  |  |

 

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**Schedule1.45**

**Hydroelectricand Gas Turbine Generating Stations**

1.                                       HillburnGas Turbine Generating Station is the approximately 40  MW natural gas and jet fuel fired electricgenerating station located at Six 4th Street, Hillburn, New York.

2.                                       ShoemakerGas Turbine Generating Station is the approximately 40 MW natural gas and jetfuel fired electric generating station located at 71 Poison Avenue,  Middletown, New York.

3.                                       MongaupHydroelectric Generating Station is the approximately 4 MW hydroelectric electricgenerating station located at 613 Plank Road, Forestburgh, New York.  (Units 1, 2, and 3 are on outage on theEffective Date).

4.                                       RioHydroelectric Generating Station is the approximately 10 MW hydroelectricelectric generating station located at 72 Power House Road, Glen Spey, NewYork.

5.                                       SwingingBridge Hydroelectric Generating Station is the approximately 12 MWhydroelectric electric generating station located at 458 County Route 43,Forestburgh, New York.  (Unit 1 is onoutage on the Effective Date).

*All of the above references to capacity arenameplate.  Actual capacity may differdepending on operating conditions.

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**Schedule2.03(c)**

**Pre-ApprovedCapital Expenditures**

None.

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**Schedule3.02**

**Form ofAssignment for Membership Interest Transfer**

ASSIGNMENT OFMEMBERSHIP INTEREST

ThisAssignment of Membership Interest (the “Assignment”) is made and entered intoas of                           ,2007, by and between MIRANT NEW YORK, INC., a Delaware corporation (“Assignor”),and ALLIANCE ENERGY RENEWABLES, LLC, a New York limited liability company (“Assignee”).

WHEREAS,Assignor and Assignee are parties to that certain Membership Interest Purchaseand Sale Agreement dated as of January 31, 2007 (the “Purchase Agreement”),pursuant to which Assignee has agreed to purchase from Assignor and Assignorhas agreed to sell to Assignee the 100% membership interest of Assignor inMirant NY-Gen, LLC, a Delaware limited liability company (the “MembershipInterest”); and

NOW,THEREFORE, for and in consideration of the premises and the mutual covenantscontained herein, and for other good and valuable consideration, the receipt,adequacy and legal sufficiency of which are hereby acknowledged, the parties dohereby agree as follows:

1.             Capitalized Terms.  Capitalized terms used but not defined hereinshall have the meanings for such terms that are set forth in the PurchaseAgreement.

2.             Assignment of MembershipInterest.  Effective as of the dateof this Assignment, Assignor hereby assigns, sells, transfers and sets over toAssignee all of Assignor’s right, title, benefits, privileges and interest inand to the Membership Interest, including without limitation all rights arisingfrom said Membership Interest.

3.             Terms of the Purchase Agreement.  This Assignment is made pursuant and subjectto the terms of the Purchase Agreement. Assignor and Assignee agree that suchterms shall not be superseded hereby but shall remain in full force and effectto the full extent provided therein.  Inthe event of any conflict or inconsistency between the terms of the PurchaseAgreement and the terms hereof, the terms of the Purchase Agreement shallgovern.

[The remainder ofthis page is intentionally left blank]

1

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IN WITNESSWHEREOF, the parties have executed this Assignment as of the date first abovewritten.
| ASSIGNOR               |   | ASSIGNEE |
|------------------------|--------|----------|
|                   |   |     |
|                   |   |     |
| MIRANT NEW YORK,  INC. |   |     |   |
| By:                    |   |     |   | By: |   |   |
| Name:                  |   |     |   | Name: |   |   |
| Its:                   |   |     |   | Its: |   |   |
|                        |        |          |  |  |  |  |  |  |  |  |  |  |  |

 

2

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**Schedule3.02(d-1)**

**Form ofAssignment of Insurance Claims**

This Assignment ofInsurance Claims (the **“Assignment”**)is made and entered into as of                            ,2007, by and between MIRANT NY-GEN, LLC, a Delaware limited liability company (**“Assignor”**), and MIRANT NEW YORK, INC., a Delawarecorporation (**“Assignee”**). Capitalized terms used herein and nototherwise defined having the meanings assigned to them in that certainMembership Interest Purchase and Sale Agreement dated as of                                ,2007 (the **“Agreement”**), between Assignee andAlliance Energy Renewables, LLC, a New York limited liability company (**“Alliance”**).

WHEREAS, pursuantto the Agreement, Alliance has agreed to purchase from Assignee and Assigneehas agreed to sell to Alliance, one hundred percent (100%) of a Membership Interest in Assignor held byAssignee; and

WHEREAS, Section2.03(f) of the Agreement provides that, prior to the Closing Date, Assignorshall assign to Assignee all rights pertaining to insurance claims filed inrespect of losses, damages, and expenses relating to the occurrences givingrise to the Consent Order for the Hillburn Facility and the Swinging BridgeRemediation Plan.

NOW, THEREFORE,for and in consideration of the premises and the mutual covenants containedherein, and for other good and valuable consideration, the receipt, adequacyand legal sufficiency of which are hereby acknowledged, Assignor and Assigneedo hereby agree as follows:

1.             Assignment.  Effective as of the date of this Assignment,Assignor hereby assigns, sells, and transfers over to Assignee all of Assignor’sright, title, benefits, privileges and interest in and to insurance claimsfiled prior to the date hereof by or on behalf of Assignor based upon incidentsand occurrences giving rise to the Remediation Expenditures at the HillburnFacility and the Swinging Bridge Facility including, without limitation, claimsin respect of property, business interruption, and environmental losses,damages, and expenses (collectively, the “Claims”).  Without limiting the scope of the foregoingassignment, Claims shall include payments made by insurers with respect to theClaims and the right to receive such payments.

2.             Covenants.  To theextent an insurance carrier pays amounts related to the Claims to Assignor,Assignor shall hold such amounts in trust for Assignee and shall pay Assigneesuch amounts within five (5) Business Days of receipt.  If requested by Assignee, Assignor shallcooperate with Assignee in the prosecution of the Claims, including makingpersonnel, records, and access to the Assets available as needed by Assignee.

1

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3.             Application of Agreement Terms.  This Assignment is made pursuant and subjectto the terms of the Agreement. To the extent this Assignment is silent as toany provision in the Agreement that is relevant to this Assignment, Assignorand Assignee agree that each such corresponding provision applies to thisAssignment. In the event of any conflict or inconsistency between the terms ofthe Agreement and the terms hereof, the terms of the Agreement shall prevail;such terms in the Agreement shall not be superseded hereby but shall remain infull force and effect to the full extent provided therein.

IN WITNESSWHEREOF, Assignor and Assignee have executed this Assignment as of the datefirst above written.
| **ASSIGNOR**        | ** ** | ** ** | **ASSIGNEE**          |
|---------------------|------------|------------|-----------------------|
| ** **          | ** ** | ** ** | ** **            |
| ** **          | ** ** | ** ** | ** **            |
| MIRANT NY-GEN,  LLC |       |       | MIRANT NEW YORK, INC. |
|                |       |       |
|                |       |       |
| By:                 |       |       | By:                   |   |   |
|                |       |       |
| Name:               |       |       | Name:                 |   |   |
|                |       |       |
| Its:                |       |       | Its:                  |   |   |
|                     |            |            |                       |  |  |  |  |  |  |  |

 

2

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**Schedule3.02 (d-2)**

**Assignmentof Claims Against Third Parties**

This Assignment of ClaimsAgainst Third Parties (the **“Assignment”**)is made and entered into as of                             ,2007, by and between MIRANT NY-GEN, LLC, a Delaware limited liability company (**“Assignor”**), and MIRANT NEW YORK, INC., a Delawarecorporation (**“Assignee”**). Capitalized terms used herein and nototherwise defined having the meanings assigned to them in that certainMembership Interest Purchase and Sale Agreement dated as of January 31, 2007(the **“Agreement”**), between Assignee andAlliance Energy Renewables, LLC, a New York limited liability company (**“Alliance”**).

WHEREAS, pursuantto the Agreement, Alliance has agreed to purchase from Assignee and Assigneehas agreed to sell to Alliance, one hundred percent (100%) of a Membership Interest in Assignor held byAssignee; and

WHEREAS, Section2.03(f) of the Agreement provides that, prior to the Closing Date, Assignorshall assign to Assignee: (i) all rights pertaining to pending filed claimsagainst O&R and ConEd and/or any of their respective Affiliates, and (ii)all Intercompany Claims.

NOW, THEREFORE,for and in consideration of the premises and the mutual covenants containedherein, and for other good and valuable consideration, the receipt, adequacyand legal sufficiency of which are hereby acknowledged, Assignor and Assigneedo hereby agree as follows:

1.             Assignment.  Effective as of the date of this Assignment,Assignor hereby assigns, sells, and transfers over to Assignee all of Assignor’sright, title, benefits, privileges and interest in and to: (a) Assignor’srights and claims against O&R and ConEd and/or any of their respectiveAffiliates that are the subject of Adversary Case No. 06-04141 commenced in TheUnited States Bankruptcy Court for the Northern District of Texas Fort WorthDivision in Chapter 11 Case No. 03-46590 (DML) (the “Action”), includingwithout limitation the right to pursue the Action as the assignee of Company,and (b) the Intercompany Claims.

2.             Covenants.  To theextent that: (a) O&R, ConEd and/or any of their respective Affiliates payamounts related to the Action to Assignor, or (b) Assignee received payment ofany amounts with respect to the Intercompany Claims, Assignor shall hold suchamounts in trust for Assignee and shall pay Assignee such amounts within five(5) Business Days of receipt.  Ifrequested by Assignee, Assignor shall cooperate with Assignee in theprosecution of the Action and the Intercompany Claims, including makingpersonnel, records, and access to the Assets available as needed by Assignee.

1

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3.             Application of Agreement Terms.  This Assignment is made pursuant and subjectto the terms of the Agreement. To the extent this Assignment is silent as toany provision in the Agreement that is relevant to this Assignment, Assignorand Assignee agree that each such corresponding provision applies to thisAssignment. In the event of any conflict or inconsistency between the terms ofthe Agreement and the terms hereof, the terms of the Agreement shall prevail;such terms in the Agreement shall not be superseded hereby but shall remain infull force and effect to the full extent provided therein.

IN WITNESSWHEREOF, Assignor and Assignee have executed this Assignment as of the datefirst above written.
| **ASSIGNOR**        |   |   | **ASSIGNEE**          |
|---------------------|--------|--------|-----------------------|
|                |   |   |                  |
|                |   |   |                  |
| MIRANT NY-GEN,  LLC |   |   | MIRANT NEW YORK, INC. |
|                |   |   |                  |
|                |   |   |                  |
| By:                 |   |   |                  | By: |   |   |
|                |   |   |                  |   |   |   |
| Name:               |   |   |                  | Name: |   |   |
|                |   |   |                  |   |   |
| Its:                |   |   |                  | Its: |   |   |
|                     |        |        |                       |  |  |  |  |  |  |  |  |  |  |  |  |

 

2

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**Schedule3.03(a)**

**WireTransfer Instructions**

Mirant New York, Inc

Acct # 3752102211

Bank of America

ABA # 0260009593

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**Schedule 4.03**

**Governmental Authority Approvals**

Governmental AuthorityApprovals:

1.             New York Public Service Commission approval of transfer

2.                                       FederalEnergy Regulatory Commission Section 203 filing

3.                                       Notificationto Federal Energy Regulatory Commission regarding change of ownership ofCompany.

4.                                       NewYork State Department of Environmental Conservation (“NYSDEC”) filing relatedto the modification to the Air Permits regarding the NOx Bubble.

5.                                       Theitems listed on Schedules 4.05 (Section B) and all items listed on Schedule4.17.

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**Schedule 4.05**

**Licenses and Permits**

Section A(Licenses and Permits for Operation of Company’s Business):

1.                                       FederalEnergy Regulatory Commission Operating License dated April 14, 1992 for ProjectNo. 10481 (Mongaup).

2.                                       FederalEnergy Regulatory Commission Operating License dated April 14, 1992 for ProjectNo. 9690 (Rio).

3.                                       FederalEnergy Regulatory Commission Operating License dated April 14, 1992 for ProjectNo. 10482 (Swinging Bridge), as amended. (additional amendment may be required by law for the Unit 1 Fill-In)

4.                                       NYSDECPetroleum Bulk Storage Certificate PBS Number 3-412694 issued on November 29,2005 (Mongaup).

5.                                       NYSDECPetroleum Bulk Storage Certificate PBS Number 3-412643 issued on November 29,2005 (Shoemaker).

6.                                       NYSDECPetroleum Bulk Storage Registration Certificate No. 3-990437 issued on January6, 2006 (Hillburn).

7.                                       Applicationfor NYSDEC SPDES Permit for Discharge, No. NY-026 5055 (Swinging Bridge Station#1); application submitted on March 8, 2002.

8.                                       Applicationfor NYSDEC SPDES Permit for Discharge, No. NY-026 5063 (Swinging Bridge Station#2); application submitted on March 8, 2002.

9.                                       Applicationfor NYSDEC SPDES Permit for Discharge, No. NY-026 5047 (Rio); applicationsubmitted on January 9, 2003.

10.                                 NYSDECAir Permit ID 3-3926-00039/00003 (Hillburn)

11.                                 NYSDECAir Permit ID3-3309-00040/00004 (Shoemaker)

12.                                 Section401 Water Quality Certification - Swinging Bridge Project - FERC No. 10482issued by NYSDEC on September 11, 1989.

13.           Section 401 Water QualityCertification - Mongaup Falls Project - FERC 10481

issued by NYSDEC on September 11, 1989.

14.                                 Section401 Water Quality Certification - Rio Project – FERC 9690 issued by NYSDEC onSeptember 11, 1989.

1

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Section B (Licenses and Permits requiring GovernmentalApproval to Transfer):

1.                                       Approvalby NYSDEC of transfer of Petroleum Bulk Storage Certificates.

2.                                       Notificationto NYSDEC regarding change of ownership of Company for SPDES Permits, AirPermits and Section 401 Water Quality Certifications.

3.                                       Notificationto Delaware River Basin Commission regarding change of ownership of Company.

4.                                       Notificationto NYSDEC regarding change in notice provisions and contact information underthe Consent Orders listed under Section C of this Schedule 4.05.

5.                                       Anorder of the Federal Energy Regulatory Commission issued under Section 203 ofthe Federal Power Act (16 U.S.C. 824b as amended) authorizing Purchaser’sacquisition of the Membership Interest.

Section C (ConsentOrders and Agreements with Governmental Authorities):

1.                                       ConsentOrder (as defined in the Agreement)

2.                                       ConsentOrder dated (DEC Index No. CO3-20050519-8-A, dated  September 15, 2005 between the Company andthe NYSDEC (Reimbursement and Environmental Audit).

3.                                       DissolvedOxygen Consent Order (as defined in Schedule 4.15)

2

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**Schedule4.07**

**Certain Liabilities**

None.

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**Schedule 4.08**

**CertainChanges**

Transfer of the Grahamsville Hydroelectric GeneratingFacility on October 31, 2006 to Orange & Rockland Utilities, Inc.

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**Schedule 4.09**

**Real Property Leases,Easements and Licenses**

1.                       Easementfor electric transmission lines and distribution system dated April 30, 1941and recorded May 19, 1946 in Liber 347 cp 23.

2.                       Grant ofEasement dated March 11, 1982 and recorded March 12, 1982 in Liber 1034 cp 84.

3.                       Grant ofEasement dated July 22, 1986 and recorded July 25, 1986 in Liber 1231 cp 230.

4.                       Grant ofEasement dated July 22, 1986 and recorded July 25, 1986 in Liber 1231 cp 242.

5.                       Grant ofEasement dated October 19, 1990 and recorded October 24, 1990 in Liber 1490 cp117.

6.                       Grant ofEasement dated September 14, 1990 and recorded December 3, 1990 in Liber 1497cp 111.

7.                       Access andPatrol Easement and Restrictions dated October 31, 1990 and recorded December3, 1990 in Liber 1497 cp 120.

8.                       Access andPatrol Easement and Restrictions dated September 14, 1990 and recorded December3, 1990 in Liber 1497 cp 140.

9.                       Access andPatrol Easement and Restrictions dated October 4, 1990 and recordedApril 5, 1991 in Liber 1515 cp 609.

10.                 Access and PatrolEasement and Restrictions dated October 4, 1990 and recorded April 5, 1991 inLiber 1515 cp 629.

11.                 Agreementrecorded in Liber 1851 cp 25.

12.                 Easement datedApril 30, 1941 and recorded May 19, 1946 in Liber 347 cp 23.

13.                 Agreement datedApril 10, 1951 and recorded April 30, 1951 in Liber 450 cp 293.

14.                 Easement datedDecember 17, 1971 and recorded December 21, 1971 in Liber 761 cp 847 asassigned by Assignment of Easements dated June 30, 1994 and recorded in Liber1757 cp 668.

15.                 Easement grantedto People of State of New York dated October 24, 1990 and recorded October 24,1990 in Liber 1490 cp 469.

16.                 Grant of Right ofWay dated February 4, 1999 and recorded February 4, 1999 in Liber 2083 cp 514.

17.                 Indenture datedDecember 31, 1971 and recorded in Liber 765 cp 114 and Liber 1902 cp 106(Orange County).

18.                 Easements in theDeed dated October 24, 1990 and recorded October 24, 1990 in Liber 1490 cp 398and rights reserved in Deed at cp 404 and 405.

19.                 Right of Wayrecorded February 22, 1881 in Liber 80 cp 239, in Liber 80 cp 290 and November18, 1889 in Liber 97 cp 326.

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20.                 UnrecordedEasement as disclosed by Town of Forestburgh, Sullivan County Tax Map SectionNo. 37 dated September 23, 1965 last revised September 1, 1994.

21.                 Easement datedApril 30, 1941 and recorded May 19, 1946 in Liber 347 cp 23.

22.                 Easement datedOctober 19, 1990 and recorded October 24, 1990 in Liber 3364 cp 118 OrangeCounty.

23.                 Easement datedOctober 24, 1990 and recorded October 24, 1990 in Liber 1490 cp 597.

24.                 Easement recordedin Liber 3365 cp 1, Orange County.

25.                 Easement datedOctober 19, 1990 and recorded October 24, 1990 in Liber 3364 cp 235, OrangeCounty.

26.                 Easement recordedin Liber 1624 cp 035, Liber 1667 cp 001 and Liber 1801 cp 152.

27.                 Deed datedFebruary 16, 1999 and recorded March 24, 1999 in Liber 2093 cp 370.

28.                 License recordedApril 21, 1999 in Liber 2100 cp 536 as assigned by Assignment dated June 30,1999 recorded July 1, 1999 in Liber 2117 cp 448 Sullivan County.

29.                 Right of Waydated February 4, 1999 and recorded February 11, 1999 in Liber 2083 cp 514.

30.                 Recreational AreaOption Agreement dated October 24, 1990 in Liber 1490 cp 644.

31.                 Provisions in theunrecorded (1) FERC Hydro License issued April 14, 1992 for Swinging BridgeReservoir (License No. 10482); (2) Memorandum of Understanding between Orangeand Rockland Utilities, Inc. and the New York State Department of EnvironmentalConservation transmitted by cover letter dated July 16, 1990; and (3) Section401 Water Quality Certification for Swinging Bridge Reservoir dated September11, 1989.

32.                 Deed in Liber 765cp 114.

33.                 Easement in Liber1490 cp 81.

34.                 Easement in Liber1490 cp 99.

35.                 Easement datedOctober 2, 1990 recorded in Liber 1490 cp 539 as amended in Liber 1851 cp 420and confirmed in Liber 2216 cp 435.

36.                 Easements inLiber 1490 cp 398.

37.                 Right of ways inDeed in Liber 765 cp 114.

38.                 Mines and mineralrights reserved in deeds of record to Orange and Rockland Utilities, Inc.

39.                 Deeds recorded inLiber 239 cp 278, Liber 240 cp 21, Liber 240 cp 23, Liber 240 cp 145,Liber 240 cp 146, Liber 241 cp 330, and Liber 243 cp 641.

40.                 Easement recordedin Liber 250 cp 534.

41.                 Recreationalrights recorded in Liber 240 cp 210 and Court Order recorded in Liber 2489 cp46.

42.                 Deed recorded inLiber 765 cp 114.

43.                 Easement as moreparticularly shown on Sheet 13 of Map of Lands Reserved by Orange and RocklandUtilities, Inc. which Maps are attached to Deed dated December 31, 1971,

2

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recorded Apri1 12,1972 at Book 765 of Deeds, Page 114 of the Sullivan County Clerk’s Office.

44.                 Easements datedJune 30, 1999 recorded in Liber 2117, cp 498, Sullivan County.

45.                 Assignment andAssumption of Lease dated as of June 30, 1999 and recorded July 1, 1999 inLiber 2117 cp 453 (Sullivan County).

46.                 Unrecordedrights, if any, in favor of any electric light or telephone company to maintainguy wires extending from the described premises to poles located on the roadson which the described premises abut.

47.                 Undergroundencroachments and easements, if any, including pipes and drains, and suchrights as may exist for entry upon said premises to maintain and repair thesame.

48.                 License Agreementbetween Mirant New York-Gen, LLC and Russ A. Heyman dated March 23, 2005.

49.                 License Agreementbetween Mirant New York-Gen, LLC and Sylvia and Charles Broffman dated February18, 2005.

50.                 License Agreementbetween Mirant New York-Gen, LLC and Allen K. Glass and Judy Glass dated March23, 2005.

51.                 License Agreementbetween Mirant New York-Gen, LLC and Harvey Elgart dated March 23, 2005.

52.                 License Agreementbetween Mirant New York-Gen, LLC and R. Scott Clouston dated March 23, 2005.

53.                 License Agreementbetween Mirant New York-Gen, LLC and John Williams d/b/a Poppa John’s WeinerWagon dated June 6, 2006.

54.                 License Agreementdated June 30, 1999 between Southern Energy NY-GEN, L.L.C. and Orange andRockland Utilities, Inc.

55.                 Assignment andAssumption of License dated June 30, 1999, and recorded in Book 2117 at page448.

56.                 License dated April8, 1999 and recorded in Book 2100 at page 536.

57.                 LicenseAgreements between Mirant New York-Gen, LLC and Woodstone Toronto Development,LLC dated October, 2003.

58.                 Right of Entryand Agreement of Indemnity dated May 12, 2005, by and between the Company andUnited Water New York, Inc., as extended by letter dated April 19, 2006.

59.                 Right of Entryand Agreement of Indemnity dated June 29, 2005, by and between the Company andthe Village of Hillburn, New York, as extended by letter dated May 22, 2006.

60.                 License Agreementbetween the Company and Thomas Damiani dated November 13, 2006.

61.                 License Agreementbetween the Company and Julie Racenstein dated October 13, 2006.

62.                 License Agreementbetween the Company and Ernest F. Thiesing dated October 30, 2006.

63.                 License Agreementbetween the Company and Terry M. Geller dated October 13, 2006.

3

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64.                 Various licenseagreements between the Company and landowners authorizing the erection oftemporary structures on the Swinging Bridge Reservoir.

4

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**Schedule4.10**

**Litigation**

1.                                       Barrettv. Watkins, Allen, Woodstone Lakes Development, LLC, Woodstone TorontoDevelopment, LLC, Woodstone Crestwood Development, LLC, Mirant NY-Gen, LLC, andDubrovsky, Case No. 948-06, Sullivan County Supreme Court.  The Company’s FERC license requires theCompany to provide certain public access to the Toronto reservoir.  On or about March 1, 2006, FERC notified theCompany in writing that the Company is not in compliance with its FERC licenseas a result of the Woodstone Companies having physically blocked certain publicaccess to the reservoir.  On or aboutMarch 31, 2006, Robert and June Barrett filed suit in the New York SupremeCourt for Sullivan County relating to disputes arising out the WoodstoneCompanies’ efforts to restrict access to the Toronto reservoir behind theSwinging Bridge hydro-electric facility across a road, Pine Grove Road, overwhich the Company holds an easement for the purpose of allowing public accessto the reservoir.  On or about June 20,2006, the Company cross-claimed against Woodstone Lakes Development, LLC,Woodstone Toronto Development, LLC,  andWoodstone Crestwood Development, LLC seeking injunctive and declaratoryrelief.  The Woodstone Companies answeredthe cross-claims of Company on September 27, 2006.  On or about August 24, 2006, Dr. Goldfarb andMs. Burke, private citizens, sought to intervene into the Barrett Suit (asadditional plaintiffs), by filling an order to show cause.  The Woodstone Companies opposed the order toshow cause and cross-moved to dismiss the proposed complaint of Dr. Goldfarband Ms. Burke.  Company filed papers inresponse to the Woodstone Companies’ cross-motion in order to protect itsrights and set forth its position with respect to this case.  On October 26, 2006, a hearing for order toshow cause to intervene was held in Monticello, New York, before JusticeSackett.  Company  participated in the hearing.  Justice Sackett entertained arguments fromall parties about the merits of the case. A decision from the judge on the merits of the motion to intervene ispending.

2.                                       Proofs of claim filed by The Southern Company inthe Bankruptcy Case.

3.                                       Various pre-petition claims and administrativeclaims filed against the Company as part of the Chapter 11 bankruptcy case willbe addressed in the Company’s plan of reorganization.

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**Schedule 4.12**

**Taxes**

1.             Nothingto disclose for the Company.

2.                                       Seller is currently under a New York State Income Tax audit, for incomeTax purposes, for years 2002, 2003 & 2004.  Seller is the taxpayer and is the legal entity responsible for incomeTaxes.  The Company is disregarded forincome Tax purposes, and is therefore not obligated for Tax liabilities underthe audit.

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**Schedule4.14**

**BankAccounts**

1.                                       Mirant NY Gen, LLC

Acct# 3752102224

Bankof America – Dallas

Authorized Signers: J. William Holden, III; Greg Weber

2.                                       Mirant NY Gen, LLC

Acct# 4572828

FederalInvestors, Money Market Fund Account

Authorized Traders: Greg Weber; Mark Crompton; Rex Croff

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**Schedule 4.15**

**Compliance With Law**

1.             FERC

OnMarch 1, 2006, FERC issued a letter denying the Company’s request for anextension of time to provide FERC with documentation that the Company hasrights to provide public access to the Toronto Dam boat launch on the TorontoReservoir via a newly constructed bypass road. FERC found that the Company is “in non-compliance with [the Company’s]license and will continue to be in non-compliance until such time that [theCompany] demonstrate[s] the area is available to the public.”  The Company subsequently filed across-complaint in Barrett v. Woodstone *et al.*,(see description in Schedule 4.10), in order to secure its easement rights tothe Toronto Dam boat launch.  Thecross-complaint is currently pending in New York State Supreme Court.

2.             Environmental

#### (a)           DissolvedOxygen:

#### (i)            The hydroelectric generating unitshave not had sufficient levels of dissolved oxygen.

#### (ii)           On March 7, 2006, the Company enteredinto a Consent Order with the NYSDEC with respect to dissolved oxygen at thehydroelectric facilities (the “Dissolved Oxygen Consent Order.”) The Companycommitted to install certain turbine venting equipment at the hydroelectricgenerating units to improve dissolved oxygen conditions.  The equipment has been installed at the unitsat Rio and Mongaup, but it has not been installed at Swinging Bridge Units 1 or2.  By the terms of the Dissolved OxygenConsent Order, the equipment at Unit 2 should have been installed within thirtydays of the effective date of such order. It has not been installed at Unit 2 because the equipment is notfeasible for installation at the facility. The Dissolved Oxygen Consent Order does not require equipment to beinstalled at Unit 1 unless and until the unit again becomes operational.

(iii)          TheNYSDEC has orally alleged that there may be a violation of the water qualitystandards related to temperature levels at the reservoirs for the hydroelectricfacilities.

(b)           Kerosene Spill:

A kerosene spill occurred at the Hillburn generating facility.  The spill is the subject of the ConsentOrder.

(c)           Swinging BridgeRemediation:

1

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A sinkhole occurred at the Swinging Bridge dam.  Repairs related to the sinkhole occurrenceare the subject of the Swinging Bridge Remediation Plan.

3.             License Amendment and Notification

An amendment to the Federal Energy Regulatory Commission OperatingLicense and a notification to the New York State Public Service Commission maybe required by law to reflect the penstock remediation on Swinging Bridge Unit#1.

2

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**Schedule4.16Material Contracts**

1.                                       ContinuingSite/Interconnection Agreement between the Company and Orange and RocklandUtilities, Inc. dated November 24, 1998, as amended (the “InterconnectionAgreement”).

2.                                       SettlementAgreement between the Company, Mirant Lovett, LLC, Mirant Bowline, LLC, HudsonValley Gas Corporation, and Orange and Rockland Utilities, Inc. dated August15, 2001 (may be terminated as to Company or, in the alternative, may besubject to the Cross Indemnity Agreement, as provided in Section 7.25).

3.                                       PowerSale, Fuel Supply and Services Agreement dated January 3, 2006 by and among theCompany, Mirant Energy Trading, LLC (“MET”) (as transferee of Mirant AmericasEnergy Marketing, LP) and others (to be terminated on or before Closing).

4.                                       Administrative Services Agreement dated January3, 2006 by and between the Company and Mirant Services, LLC (to be terminatedon or before Closing).

5.                                       Environmental Services Agreement dated December20, 2006, by and between the Company and Lightship Engineering, LLC (“Lightship”),and Purchase Order No. NY- 18884 between the Company and Lightship.

6.                                       Gas Transportation and Balancing ServicesAgreement for the Mirant Generating Facilities dated December 9, 2002 (the “GasTransportation and Balancing Agreement”) (Company to be removed as a party onor before Closing).

7.                                       Purchase Order No. NY-6106 between Company andAdvance Construction Techniques, Ltd. (may be supplemented by or replaced withthe Unit 1 Fill-In Contract as provided in Section 2.03(d)(ii)).

8.                                       Purchase Order Nos. NY-7557, NY-8089,  NY-6478 between Company and Devine Tarbelland Associates, Inc.

9.                                       Purchase Order No. NY-6867 between Company andMead and Hunt, Inc.  (To be assignedpursuant to Section 7.29).

10.                                 PurchaseOrder Nos. NY-8904, NY-7138 and NY-7139 between Company and Megrant Properties,Inc.

11.           Purchase Order No.NY-20204 between Company and Baker Technical Land Services.

12.           Purchase Order No.  NY-5677 between Company and All BrightElectric.

13.                                 PurchaseOrder No. NY-8296 between Company and Burns and Roe Enterprises, Inc.  (To be assigned pursuant to Section 7.29).

1

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14.           Purchase Order No.NY-6467 between Company and Conetec, Inc.

15.           Purchase Order No. 8320between Company and Devine Tarbell and Associates, Inc.

16.           Purchase Order No. 5530between Company and Miller Environmental Group, Inc.

17.           Purchase Order No. 7806between Company and Dominion Engineering, Inc.

18.           Purchase Order No. 7810between Company and OCS Industries, Inc.

19.           Purchase Order No. 7552between Company and Deerpark Oil and Heat Company.

20.           Purchase Order No. 6490between Company and All Bright Electric.

21.           Purchase Order No. 7697between Company and Henningson Durham and Richardson.

22.           Purchase Order No.20266 with Geosystems, LP (to be assigned to Company on or before Closing).

23.           Purchase Order No.20272 with Paul C. Rizzo Associates, Inc. (to be assigned to Company on orbefore Closing).

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**Schedule4.17**

**Consents**

1.             The consent required under the InterconnectionAgreement.

2.                                       Theconsent required to remove the Company from the Gas Transportation andBalancing Agreement.

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**Schedule4.18**

**Title to Assets**

None.

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**Schedule5.04**

**Consentsand Approvals of Governmental Authorities**

1.             An order of the Federal Energy Regulatory Commissionissued under Section 203 of the Federal Power Act (16 U.S.C. 824b as amended)authorizing Purchaser’s acquisition of the Membership Interest.

2.             New York Public Service Commission approval of transfer.

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**Schedule5.05**

**Litigation**

None, other than theBankruptcy Case, insofar as applicable to the Membership Interest.

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**Schedule7.15(b)**

**SaleProcedures Order**

**IN THEUNITED STATES BANKRUPTCY COURT**

**FOR THENORTHERN DISTRICT OF TEXAS**

**FORTWORTH DIVISION**
|        | )                          |   |                    |
|--------|----------------------------|--------|-------------------------|
|   | In re                      | )      | Chapter 11 Case         |
|   |                       | )      |                    |
|   | MIRANT CORPORATION, etal., | )      | Case No. 03-46590 (DML) |
|   |                       | )      | Chapter 11              |
|   |                       | )      | Jointly Administered    |
|   | Debtors.                   | )      |                    |
|   | ** **                 | )      |                    |
|        |                            |        |                         |  |  |  |

 

**ORDER(A) APPROVING THE SALE PROCEDURES IN CONNECTION WITH THE PROPOSED SALE OFMIRANT NEW YORK, INC.’S MEMBERSHIP INTEREST IN MIRANT NY-GEN, LLC; (B)APPROVING PAYMENT OF A BREAKUP FEE IN ACCORDANCE WITH THE TERMS OF THEMEMBERSHIP INTEREST PURCHASE AND SALE AGREEMENT; (C) SCHEDULING A SALEHEARING AND AN AUCTION; AND (D) APPROVING THE FORM AND MANNER OF NOTICE OFTHE SALE PROCEDURES AND THE SALE HEARING**

Upon the motion, dated February 1, 2007 (the “SaleProcedures Motion”), of Mirant New York, Inc. (“Mirant New York” orthe “Seller”), as debtor and debtor in possession, for an order (the “SaleProcedures Order”) (a) approving the Sale Procedures(1) in connection withthe proposed sale, pursuant to sections 105(a), 363(b), (f), (m), and (n), and1146(c) of title 11 of the United States Code (the “Bankruptcy Code”),of the Seller’s Membership Interest (the “Membership Interest Sale”) inMirant NY-Gen, LLC (“Mirant NY-Gen” and, collectively with Mirant NewYork, the “Debtors”) to Alliance

(1) Unless otherwise defined in this Sale ProceduresOrder, capitalized terms used herein shall have the same meanings ascribed tosuch terms in the Sale Procedures Motion.

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Energy Renewables, LLC (“Alliance Energy” orthe “Purchaser”) pursuant to that certain Membership Interest Purchaseand Sale Agreement between Mirant New York and Alliance Energy, dated as ofJanuary 31, 2007 (the “Agreement”); (b) approving the payment of aBreakup Fee (defined below) in accordance with the terms of the Agreement; (c)scheduling a hearing (the “Sale Hearing”) to consider approval of theMembership Interest Sale and an Auction (as defined below); and (d) approvingthe form and manner of notice of the Sale Procedures and the Sale Hearing; andno previous motion for similar relief having been made to this Court; and afterdue deliberation thereon; and sufficient cause appearing therefor,

IT IS HEREBY FOUND AND DETERMINED THAT:

1.             ThisCourt has jurisdiction to hear and determine this matter pursuant to28 U.S.C. §§ 157(b) and 1334(b). This matter is a core proceeding within the meaning of 28 U.S.C. §§157(b)(2).  Venue of this matter isproper in this Court pursuant to 28 U.S.C. §§ 1408 and 1409(a).

2.             ThisOrder constitutes a final and appealable order within the meaning of28 U.S.C. § 158(a).

3.             Dueand proper notice of the Sale Procedures Motion has been given and no furthernotice is required.

4.             TheSale Procedures, in the form set forth in *Exhibit1* annexed hereto, shall govern the Auction of the MembershipInterest to obtain the highest and best offer for the Membership Interest.

5.             TheSale Procedures and the Breakup Fee provided for in the Agreement are withinthe reasonable business judgment of Mirant New York, are in the best interests

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of Mirant New York and its chapter 11 estate, and arefair, reasonable, and appropriate in the circumstances.

6.             TheNotice of Auction and Sale Hearing as set forth in *Exhibit 2* is reasonably calculated to provide adequatenotice and opportunity for a hearing on any objections to the Sale Motion.

7.             Theterms and conditions of the payment to the Purchaser of the Breakup Fee as setforth in the Agreement are:

a.             the product of arm’s length, goodfaith negotiations, between the Seller and the Purchaser;

b.             a material component of, inducementfor, and condition to, the Purchaser’s willingness to be a stalking horsebidder under the Agreement; and

c.             within the reasonable businessjudgment of Mirant New York, is in the best interests of Mirant New York and itschapter 11 estate, and is fair, reasonable and appropriate in the circumstancesto establish certainty on the existence and terms of a minimum bid subject to areasonable competitive bidding process; and

d.             not likely to adversely affect theAuction’s competitive bidding process.

ACCORDINGLY, IT IS HEREBY

ORDERED that the Sale Procedures as set forth in *Exhibit 1*annexed hereto are herebyapproved in all respects; and it is further

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ORDERED that in the event of a competing bid for theMembership Interest, Alliance Energy will be entitled to credit bid the amountof $250,000.00 to any overbids in accordance with the terms of the SaleProcedures and the Sale Motion; and it is further

ORDERED that, in accordance with Section 7.15 of theAgreement, as a result of Seller entering into an agreement for a Third PartySale pursuant to the Auction, Seller shall, upon entry of the Sale Orderauthorizing such Third Party Sale, return to Purchaser the Down Payment (asdefined in the Agreement) with all interest accrued thereon and, within five(5) days of such Third Party Sale or any other sale of the Membership Interest,pay to the Purchaser the Breakup Fee of Two Hundred Fifty Thousand Dollars($250,000.00) as an administrative expense of the Seller, from the first cashproceeds of any Third Party Sale or other sale of the Membership Interest.

ORDERED that Mirant New York shall serve within three(3) business days after entry of this Sale Procedures Order, the Notice ofAuction and Sale Hearing upon (a) all parties entitled to receive notice as ofthe date hereof pursuant to the Order Clarifying Order Granting Complex Chapter11 Bankruptcy Case Treatment, dated August 25, 2004, (b) all parties knownto Mirant New York to have an interest in acquiring the Membership Interest andthe Sale Assets, (c) all entities listed on the schedules of Mirant New Yorkand Mirant NY-Gen, LLC as holding secured claims and all entities who recordedor filed proof(s) of claim as secured against Mirant NY-Gen or Mirant New York,(d) all entities who have recorded in the public record any lien, claim,encumbrance, or interest in or upon the Membership Interest or any of theassets of Mirant NY-Gen, (e) the Federal Energy Regulatory Commission, (f) theDelaware River Basin Commission, (g) the New York Public Service Commission,(h) the State of New

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York Department of Environmental Conservation, (i) theNew York City Department of Environmental Protection, (j) the Securities andExchange Commission, (k) the United States Environmental Protection Agency, (l)the Office of the United States Attorney, (m) the United States Department ofJustice, (n) the Internal Revenue Service, (o) all parties granting permits orlicenses to Mirant NY-Gen, (p) the applicable state and local taxingauthorities**,**and (q) all partiesto Mirant NY-Gen’s executory contracts and unexpired leases, and it is further

ORDERED that the Sale Hearing shall be held on            , March    , 2007 at       a.m.(Prevailing Central Time), or as soon thereafter as counsel may be heard,before the Honorable D. Michael Lynn, United States Bankruptcy Judge, in theUnited States Bankruptcy Court for the Northern District of Texas, Eldon B.Mahon U.S. Courthouse, 501 West Tenth Street, Fort Worth, TX 76102-3643; and itis further

ORDERED that the Sale Hearing may be adjourned fromtime to time without further notice other than an announcement by Mirant NewYork in the Court of such adjournment on the date scheduled for the SaleHearing; and it is further

ORDERED that such notice as set forth in the precedingdecretal paragraphs to the Notice Parties shall constitute good and sufficientnotice of the Sale Motion as it relates to Mirant New York’s request for entryof the Sale Order, the Auction, and the Sale Hearing, and no other or furthernotice of the Sale Motion, the Auction, and the Sale Hearing shall be necessaryor required; and it is further

ORDERED that responses or objections, if any, to theentry of the Sale Order granting the relief requested in the Sale Motion shallbe filed with this Court and served, so as to be actually received no laterthan             ,February    , 2007, at 4:00 p.m.

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(Prevailing Central Time) on:  (a) Hiscock & Barclay, LLP, One ParkPlace, Syracuse, New York 13215, Attn: George S. Deptula, Email:  gdeptula@hiscockbarclay.com; (b) Forshey& Prostok LLP, 777 Main Street, Suite 1290, Fort Worth, Texas 76102, Attn:Jeff P. Prostok, Email: jprostok@forsheyprostok.com; (c) Mirant New York, Inc., c/o Mirant Corporation,1155 Perimeter Center West, Atlanta, Georgia 30338, Attn:  Sonnet Edmonds, Vice President and AssistantGeneral Counsel, Email: sonnet.edmonds@mirant.com; (d) Hill Gilstrap, P.C., 1400 West AbramStreet, Arlington, TX 76013, Attn:  FrankHill, Email:  fhill@hillgilstrap.com, (e)Troutman Sanders LLP, 405 Lexington Avenue, New York, NY 10174, Attn:  Hollace T. Cohen, Email:  Hollace.Cohen@troutmansanders.com.

ORDERED that the Seller is authorized and empowered totake such steps, incur and pay such costs and expenses, and take such action asmay be reasonably necessary to implement this Sale Procedures Order; and it isfurther

ORDERED that any objections to the entry of this SaleProcedures Order that have not been withdrawn, waived or settled, and allreservations of rights regarding the same, shall be and hereby are OVERRULED onthe merits; and it is further

ORDERED that this Court shall retain jurisdiction overany matter or dispute arising from or relating to the Sale Procedures and theimplementation of this Sale Procedures Order.
| Dated:                ,  2007 |   |                          |                           |   |
|-----------------------------------------------------------------------------------------------------|--------|-------------------------------|--------------------------------|--------|
|                                                                                                |   | The Honorable D. Michael Lynn |                           |
|                                                                                                |   |                          | United States Bankruptcy Judge |
|                                                                                                     |        |                               |                                |        |  |  |  |

 

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**EXHIBIT“1”**

SALE PROCEDURES

The following procedures(the “**Sale Procedures**”) shallgovern the auction (the “**Auction**”)of the Membership Interest held by Mirant New York, Inc. (the “**Seller**” or “**Mirant New York**”), as sole member of Mirant NY-Gen, LLC (“**Company**” or “**Mirant NY-Gen**” and, with Mirant New York, the “**Debtors**”). These Sale Procedures have been approved and authorized by order dated              ,2007 (the “**Sale Procedures Order**”)of the United States Bankruptcy Court for the Northern District of Texas (the “**Bankruptcy Court**”) in the chapter 11 caseof Mirant New York (Case No. 03-46641-DML-11).

The Seller has taken allreasonable steps to obtain the highest and best price for the MembershipInterest.  However, under title 11 of theUnited States Code (the “**Bankruptcy Code**”),the Seller must demonstrate that it has obtained the highest and best price forthe Membership Interest; such a showing may include giving notice thereof tothe creditors of the Company and other interested parties, providinginformation about the Membership Interest to prospective bidders (subject toappropriate confidentiality agreements), entertaining higher and better offersfrom such prospective bidders, and, if necessary, conducting an Auction.

1.             Property to Be Sold.  The Company’s assets include threehydroelectric power stations and two gas turbine generating facilities locatedin southeastern New York and certain real property, easements, permits, andcontracts relating thereto as identified in the Agreement (the “**Sale Assets**”).  As provided in the Sale Procedures Order, thesale of the Membership Interest (the “**MembershipInterest Sale**”) is subject to a determination of which entity hassubmitted the highest or otherwise best bid pursuant to the procedures setforth herein (the “**Prevailing Bidder**”)(as defined in Section 8 below). Alliance Energy Renewables, LLC (the “**ProposedPurchaser**”) and Mirant New York have entered into the MembershipInterest Purchase and Sale Agreement, dated as of January 31, 2007 (the “**Agreement**”).  The Proposed Purchaser****shall be treated as a Qualified Bidder (asdefined in Section 3 below), and the executed Agreement shall be treated as aQualified Bid (as defined in Section 5 below), for all purposes under the SaleProcedures.

2.             Due Diligence. Upon receipt by Hiscock & Barclay, LLP (“**Hiscock & Barclay**”) or Forshey & Prostok LLP (“**Forshey & Prostok**”) of (i) an executedconfidentiality agreement in form and substance satisfactory to the Seller inits sole discretion and (ii) financial disclosure acceptable to, and asrequested by, the Seller, in its sole discretion, which information shalldemonstrate the financial ability of the potential bidder to consummate thepurchase of the Membership Interest and its obligations to perform under theAgreement, including but not limited to immediately available cash, or abinding commitment for financing, adequate to pay a price that exceeds theamount in the Marked Agreement (as defined in Section 5(a) below) by at least$500,000 in cash, a potential bidder shall be provided with additionalinformation regarding the Membership

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Interest and related Sale Assets, and be afforded theopportunity to inspect the Sale Assets. In addition, all reasonable efforts will be made to provide a potentialbidder, who has satisfied the conditions of this Section 2, with suchinformation as such potential bidder may determine is necessary or relevant tothe formulation of its bid.

**NEITHERHISCOCK & BARCLAY, FORSHEY & PROSTOK, NOR ANY OF THEIR RESPECTIVEPARTNERS, MEMBERS, COUNSEL, OR ATTORNEYS (COLLECTIVELY, THE “DEBTORS’ATTORNEYS”) HAS PREPARED ANY OF THE INFORMATION REGARDING MIRANT NEW YORK ORMIRANT NY-GEN, OR ANY OF THEIR OPERATIONS, SCHEDULED ASSETS, OR FINANCIALCONDITION TO BE PROVIDED TO A POTENTIAL BIDDER IN CONNECTION WITH THE SALEPROCEDURES SET FORTH HEREIN. CONSEQUENTLY, NO REPRESENTATION IS MADE BY ANY OFTHE DEBTORS’ ATTORNEYS REGARDING THE ACCURACY, RELIABILITY, VERACITY, ADEQUACY,OR COMPLETENESS OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE SALEPROCEDURES, AND ALL POTENTIAL BIDDERS ARE ENCOURAGED TO CONSULT WITH THEIR OWNADVISORS REGARDING ANY SUCH INFORMATION.**

3.             Qualified Bidders.

(a)           A potential bidder that satisfies thefollowing requirements, and that the Seller determines, in its sole discretion,is reasonably likely to be able to consummate a purchase of the MembershipInterest (including all Purchaser Required Consents set forth in Section 7.14of the Agreement) shall be considered a “**QualifiedBidder**.”  Within three (3)business days of each potential bidder’s delivery of all of the materialrequired in subsections (b)(i) through (b)(v) below, the Seller shall notifysuch potential bidder in writing as to whether such potential bidder shall beconsidered a Qualified Bidder.

(b)           Unless otherwise ordered by theBankruptcy Court for cause shown, no bid for the Membership Interest will beconsidered unless prior to or in conjunction with making such bid, the bidderdelivers the following items to:  Hiscock& Barclay, LLP, 50 Beaver Street, Albany, New York  12207, Attn: George S. Deptula.

(i)            ifthe potential overbidder has not already entered into a confidentialityagreement with the Seller, an executed confidentiality agreement (to beprovided upon request) in form and substance satisfactory to Mirant New York inits sole discretion;

(ii)           financialdisclosure in writing acceptable to, and as requested by, Mirant New York, inits sole discretion, which information shall demonstrate that the potentialbidder has the financial ability to consummate the purchase of the MembershipInterest and its obligations to perform under the Membership Interest Purchaseand Sale Agreement no later than ten (10) days

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followingthe hearing on the Sale Order including, but not limited to, immediatelyavailable cash or a binding commitment for financing and the willingness andability to cover all of the potential bidder’s legal counsel fees and other costsassociated with the sale of the Membership Interest;

(iii)          writtenevidence demonstrating that such potential bidder is not affiliated with theProposed Purchaser or Mirant New York (and such potential bidder is not acreditor of Mirant New York or Mirant NY-Gen);

(iv)          writtenevidence that the potential bidder has the internal authorizations andapprovals necessary to engage in the transaction without the consent of anyentity that has not already been obtained and that the potential bidder is a bonafide purchaser; and

(v)            acashier’s check made payable to Mirant New York, or cash, or an irrevocableletter of credit for ten percent (10 %) (the “**Deposit**”)of the amount of the Proposed Consideration (as defined in Section 5(b)below).  If the bidder delivers a letterof credit to the Seller, such letter of credit must (1) have an expiration dateof not earlier than October 1, 2007, or fifteen (15) days after such other dateproposed in Section 12.01(vii) of the Marked Agreement, and (2) be drawableupon presentment of an officer’s certificate from Mirant New York stating onlythat Mirant New York is entitled to draw on the letter of credit.  The bidder shall forfeit the Deposit and, tothe extent applicable, the Seller may draw on the letter of credit if (1) thebidder is determined to be a Qualified Bidder and withdraws or modifies its bidor any subsequent Increased Bid (as defined in Section 7 below), without theSeller’s consent other than as provided herein before the selection of thePrevailing Bidder, and/or (2) the bidder is determined to be the PrevailingBidder and (A) modifies or withdraws the bid or any subsequent Increased Bidwithout the Seller’s consent before the consummation of the sale contemplatedby the Marked Agreement (as defined in Section 5(a) below) or (B) breaches theMarked Agreement.  The Deposit shall bereturned to the bidder (1) if the bidder is determined not to be a QualifiedBidder or (2) under the circumstances contemplated by Section 12 hereof.

4.             Time for Submission of Bids.  Any Qualified Bidder that desires toparticipate in the Auction shall deliver a copy of its bid so it is received bySeller not later than 4:00 p.m. (Prevailing Central Time) on Wednesday,February 28, 2007 (the “**Initial Bid Deadline**”).Seller shall provide Purchaser with a copy of all Qualified Bids accompanied bynotice of the Seller’s determination of the Opening Bid (as defined below) noless than four (4) days prior to the Auction. If there are no Qualified Bids, the Purchaser shall be deemed to be thePrevailing Bidder at the Auction.

5.             Form and Contents of Bids.  To constitute a “**Qualified Bid**,” a bid must satisfy the following requirements:

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(a)           the bid must include an executedirrevocable Membership Interest purchase and sale agreement made upon the sameterms and conditions as those contained in the Agreement (excepting thepurchase price and terms and conditions related to the bankruptcy proceduresand deadlines for satisfying conditions precedent to the closing of thetransaction in Section 7.15(b) of the Agreement, and the reasonable extensionof certain dates set forth in Sections 12.01(iii), (iv), and (vii) of theAgreement necessary or appropriate in light of such overbid which shall be noless favorable to the Seller than the terms of the Agreement, and shall setforth any amendments and modifications to the Agreement, including price,terms, and any change in the list of agreements to be assumed by Mirant NY-Gen,which such bidder would propose if it were selected as the Prevailing Bidder(the “Marked Agreement”).  Allmodifications or amendments to the Agreement that are contained in the MarkedAgreement must be “redlined” in order for the Seller to consider the MarkedAgreement;

(b)           the Marked Agreement must provide fortotal net cash consideration to the Seller’s chapter 11 estate of not less than$500,000.00 greater than the purchase price of the Agreement (the “ProposedConsideration”);

(c)           the Marked Agreement must not beconditioned upon the ability of the bidder to obtain financing or the outcomeof unperformed due diligence by the bidder. In the event that the Marked Agreement contains any additionalconditions to the closing of the Membership Interest Sale (the “Closing”),none of such conditions shall be materially more burdensome or unfavorable tothe Seller than those set forth in the Agreement;

(d)           the Marked Agreement must beaccompanied by a letter affirmatively (i) setting forth the identity of thebidder and the contact information for such bidder, (ii) stating that the bidderoffers to purchase the Membership Interest upon the terms and conditions setforth in the Marked Agreement, (iii) summarizing the Proposed Consideration thebidder proposes to pay under the Marked Agreement, (iv) identifying any changein the contracts that the bidder proposes Mirant NY-Gen assume and anyadditional cure amount therefor, (v) stating the aggregate value of theconsideration the bidder proposes to pay under the Marked Agreement (whichstatement of value shall not be binding on the Seller, the Purchaser, or theCourt), and (vi) stating the form of the Deposit (*i.e.,* letter of credit, cashier’s check, or cash) made bythe bidder; and

(e)           the foregoing materials must bereceived by Seller on or before Wednesday, February 28, 2007 at 4:00 p.m.(Prevailing Central Time) (the “Initial Bid Deadline”).  The Purchaser will receive from the Seller acopy of all Qualified Bids accompanied by notice of the Seller’s determinationof the Opening Bid (as defined below) no less than four (4) days prior to theAuction.

6.             Notification of Opening Bid.  At the commencement of the Auction, theSeller will identify the opening bid (the “Opening Bid”), which will bethe highest or otherwise best Qualified Bid, as determined by the Seller in itssole discretion.  If no

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timely Qualified Bid is submitted as determined by theSeller, or if the Purchaser is the Prevailing Bidder (as defined herein), theSeller shall request at the Sale Hearing that the Bankruptcy Court approve thesale of the Membership Interest to the Purchaser.

7.             The Auction.

(a)           The Auction shall commence at         a.m. (Prevailing Central Time)on         ,        , 2007 at the United StatesBankruptcy Court, Eldon B. Mahon U.S. Courthouse, 501 West Tenth Street, FortWorth, Texas 76102.  Qualified Biddersmust attend the Auction in person or through an authorized representative oragent with actual authority to participate in the Auction and bind suchQualified Bidder.  During the Auction,any Qualified Bidder may increase its qualified Bid by another Qualified Bidthat:

i.              providesfor cash consideration that exceeds by not less than $250,000.00 the cashconsideration to be paid pursuant to the then highest Qualified Bid orIncreased Bid, if any;

ii.             identifiesspecifically any other changes made to the Qualified Bid; and

iii.                                    satisfiesthe requirements of Sections 3(b) and 5 above.

Any bid received from a Qualified Bidder during theAuction that satisfies the requirements set forth in subsections (a)(i) through(a)(iii) above, shall constitute an “**IncreasedBid**.”  If the ProposedPurchaser submits the successful overbid, the Purchaser shall be entitled tocredit the amount of $250,000.00 against such overbid.

(b)           The Seller shall adopt such rules forbidding at the Auction as it deems appropriate in its sole discretion that willbetter promote the goals of the bidding process, allow all Qualified Biddersreasonable notice and opportunity to submit Increased Bids, and are nototherwise inconsistent with any order of the Bankruptcy Court or the Agreement.

8.             Selection of Prevailing Bidder.   At the Auction, the Seller shall review andconsider each, if any, of the Qualified Bids and the Increased Bids.  Seller shall determine in its sole discretionwhich of the Qualified Bids or Increased Bids constitute the highest andotherwise best bid for the Membership Interest, provided however, that nothingcontained herein shall prevent the Purchaser from contesting that the bidselected by the Seller of the Prevailing Bidder is the highest and best offer.  The bidder making the bid that is selected asthe highest or otherwise best bid by the Seller shall be considered the “**Prevailing Bidder**.”  At the conclusion of the Auction and aftersuch review, the Seller shall inform each of the Qualified Bidders of thedecision regarding who is the Prevailing Bidder and who made the second highestor otherwise best bid (the “Backup Bidder”).

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9.             Release of Down Payment.  Upon entry of the Sale Order authorizing asale of the Membership Interest to a purchaser other than Purchaser, Sellershall direct Escrow Agent to return to Purchaser the Down Payment (as definedin the Agreement) with all accrued interest thereon; provided that, ifPurchaser agrees to be the Backup Bidder, Seller shall direct the Escrow Agentto return the Down Payment (with all accrued interest thereon) to Purchaserupon the earlier of the closing of the Membership Interest Sale to thePrevailing Bidder or termination of the Agreement by Purchaser according to theterms of the Agreement.

10.           Failure to Consummate Purchase.  If for any reason the Prevailing Bidder failsto consummate the Membership Interest Sale, the Seller reserves the right toconsummate the Membership Interest Sale with the Backup Bidder.  If such failure to consummate the purchase isthe result of a breach of the Agreement by the Proposed Purchaser or the MarkedAgreement by the Prevailing Bidder, the Down Payment (as defined in theAgreement) of the Proposed Purchaser or the Deposit of such Prevailing Bidderas the case may be shall be forfeited to the Seller.  The Seller specifically reserves the right toseek all available damages from the defaulting bidder; provided that in thecase of the Proposed Purchaser, the damages shall be limited as provided inSection 12.04 of the Agreement.

11.           Bankruptcy Court Approval of thePrevailing Bidder.   An evidentiaryhearing on all of the relief requested in the Seller’s Motion (the “**Sale Motion**”) to approve the MembershipInterest Sale and to conduct the Auction (the “**Sale Hearing**”) shall be held before the Bankruptcy Court on          ,              ,2007 at          .m. (PrevailingCentral Time).

12.           Return of Deposits.  Within five (5) business days after theclosing of the Membership Interest Sale, the Deposit submitted by eachQualified Bidder shall be returned, except for those submitted by (a) thePrevailing Bidder and (b) any bidders that forfeited their Deposit underSection 3(b)(v) above.  Except asotherwise provided for herein, in the event the Seller cancels the proposedsale or withdraws its motion to approve the sale of the Membership Interest,the Deposit submitted by all of the Qualified Bidders shall be immediatelyreturned.

13.           Business Judgment of the Seller.  The Seller reserves the right (a) todetermine in its sole discretion whether the amendments and changes containedin each Marked Agreement are acceptable as terms and conditions to the sale;(b) to determine, in its sole discretion, which Qualified Bid, if any, is thehighest or otherwise best offer for the Membership Interest; (c) to reject atany time prior to entry of an order of the Bankruptcy Court approving the saleto the Prevailing Bidder, any bid which the Seller, in its sole discretion,deems to be (i) inadequate or insufficient, or (ii) not in conformity with therequirements of the Bankruptcy Code or the Sale Procedures; and/or (d) tomodify these Sale Procedures in any manner in its sole discretion which is nototherwise inconsistent with any order of the Bankruptcy Court or the Agreement.

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**EXHIBIT“2”**

**IN THEUNITED STATES BANKRUPTCY COURT**

**FOR THENORTHERN DISTRICT OF TEXAS**

**FORTWORTH DIVISION**
|   | )                          |   |                    |
|--------|----------------------------|--------|-------------------------|
|   | In re                      | )      | Chapter 11 Case         |
|   |                       | )      |                    |
|   | MIRANT CORPORATION, etal., | )      | Case No. 03-46590 (DML) |
|   |                       | )      | Chapter 11              |
|   |                       | )      | Jointly Administered    |
|   | Debtors.                   | )      |                    |
|   | ** **                 | )      | Hearing Set:            |
|        |                            |        |                         |  |  |  |

 

**NOTICE OF AUCTION AND SALE HEARINGREGARDING**

**MOTIONOF EXCLUDED DEBTORS FOR ENTRY OF AN**

**ORDER(I) AUTHORIZING AND APPROVING THE SALE OF ALL**

**MEMBERSHIPINTERESTS IN MIRANT NY-GEN, LLC, BY MIRANT NEW**

**YORK,INC. TO ALLIANCE ENERGY RENEWABLES, LLC, OR**

**ALTERNATIVELYTO PREVAILING OVERBIDDER, FREE AND CLEAR OF**

**ALLLIENS, CLAIMS, ENCUMBRANCES, AND INTERESTS, (II) APPROVING**

**THEMEMBERSHIP INTEREST PURCHASE AND SALE AGREEMENT**

**BETWEENMIRANT NEW YORK, INC., AS SELLER, AND ALLIANCE**

**ENERGYRENEWABLES, LLC, AS PROPOSED PURCHASER, AND**

**AUTHORIZINGTHE DEBTORS TO PERFORM THE TERMS THEREOF, AND**

**(III)AUTHORIZING CERTAIN EXCLUDED DEBTORS TO ENTER INTO,**

**MODIFYOR TERMINATE CONTRACTS AND LEASES PURSUANT TO THEMEMBERSHIP INTEREST PURCHASE AND SALE AGREEMENT**

**TO ALL INTERESTED PARTIES:**

**PLEASE TAKE NOTICE**thaton February 1, 2007, Mirant New York, Inc. (“Seller” or “Mirant NewYork”), Mirant NY-Gen, LLC (“NY-Gen”), Mirant Bowline, LLC, MirantLovett, LLC, and Hudson Valley Gas Corporation (collectively, the “ExcludedDebtors”), as debtors and debtors in possession, filed a motion (the “SaleMotion”) with the United States Bankruptcy Court for the Northern Districtof Texas, Fort Worth Division (the “Bankruptcy Court”), requesting entryof an order (the “Sale Order”), pursuant to sections 105(a), 363, and1146(c) of the Bankruptcy Code and Bankruptcy Rules 2002, 6004, 9006, 9007,9008, 9013, 9014, and 9036 (a) authorizing and approving the sale by Mirant NewYork of the Membership Interest(1) to Alliance Energy Renewables, LLC (“AllianceEnergy” or the “Purchaser”), or alternatively to

(1) Except as otherwise defined herein, allcapitalized terms shall have the same meanings ascribed to such terms in theSale Motion.

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prevailing overbidder, free and clear of all liens,claims, encumbrances and interests pursuant to the terms of the Agreement; (b)authorizing and approving the Membership Interest Purchase and Sale Agreement(including all related instruments, documents, exhibits, schedules, lists, andagreements thereto) between Seller and Purchaser dated January 31, 2007 (the “Agreement”),which provides for the (i) sale, conveyance, assignment, transfer, and deliveryof the Membership Interest in Mirant NY-Gen to the Purchaser free and clear ofall liens, claims, encumbrances, and interests, and (ii) performance of relatedtransactions as set forth in the Agreement; and (c) authorizing the ExcludedDebtors to enter into, terminate or modify certain contracts and leases inconnection with the performance and closing of the Agreement.  Concurrently, a motion for approval ofcertain sale procedures (“Sales Procedures Motion”) was filed with theSale Motion.

**PLEASE TAKE FURTHER NOTICE:**

A.            Pursuantto an order, dated           , 2007,granting certain of the relief related to, among other things, the SaleProcedures requested in the Sale Procedures Motion (the “Sale ProceduresOrder”), Mirant New York will conduct an auction (the “Auction”)before the Honorable D. Michael Lynn in the United States Bankruptcy Court forthe Northern District of Texas, Eldon B. Mahon U.S. Courthouse, 501 West TenthStreet, Fort Worth, Texas 76102-3643 on           , 2007 at       (Prevailing Central Time), for the sale ofthe Membership Interest.  Parties wishingto participate in the Auction must become a Qualified Bidder and submit a “QualifiedBid” so it is received by Seller not later than 4:00 p.m. (PrevailingCentral Time) on Wednesday, February 28, 2007 (the “Initial Bid Deadline”),to the party specified in the Sale Procedures Order and provide for total considerationto Mirant New York of not less than $500,000 in cash in excess of the PurchasePrice.  The Sale Procedures Order alsosets forth, among other things, the specific requirements for a bidder to be aQualified Bidder and a bid to be a Qualified Bid.

B.            Ahearing (the “Sale Hearing”) will be held on           , 2007, at           .m.(Prevailing Central Time), or as soon thereafter as counsel can be heard,before the Honorable D. Michael Lynn in the United States Bankruptcy Court forthe Northern District of Texas, Eldon B. Mahon U.S. Courthouse, 501 West TenthStreet, Fort Worth, Texas 76102-3643, at which time Mirant New York will seekentry of an order granting the remaining relief requested in the Sale Motion inaccordance with the Sale Procedures Order and the Agreement.

C.            MirantNew York has selected Alliance Energy as the stalking horse bidder pursuant tothe terms of the Agreement, which Agreement provides, among other things, forthe sale of the Membership Interest to Alliance Energy free and clear of liens,claims, encumbrances, and interests.

D.            Anyentity that wishes to submit a bid for the purchase of the Membership Interestmust comply in all respects with the terms and conditions established by theSale Procedures Order.  Copies of theSale Motion, the Sale Procedures Order, and the

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Agreement are available upon request by contactingGeorge S. Deptula, Hiscock & Barclay, LLP, One Park Place, 300 South StateStreet, Syracuse, New York 13202 or Jeff P. Prostok, Forshey & Prostok LLP,777 Main Street, Suite 1290, Fort Worth, Texas 76102.

**PLEASE TAKE FURTHER NOTICE**thatobjections, if any, to entry of an order granting the remaining reliefrequested in the Sale Motion, must be made in writing, filed with theBankruptcy Court, and served in accordance with the terms and conditionsestablished by the Sale Procedures Order so as to be actually received by theparties specified in the Sale Procedures Order by **4:00 p.m. (Prevailing Eastern Time) on**           **, 2007.**

**PLEASE TAKE FURTHER NOTICE**thatin the absence of any timely objection, Mirant New York will submit to theBankruptcy Court a form of order setting forth, among other things, that (i)the notice procedures of the Sale Motion have been satisfied, (ii) no objectionto the Sale Motion was timely made or such objection has been resolved, and(iii) Mirant New York may proceed with the remaining relief requested in theSale Motion.  The form of order will alsoprovide that to the extent any person or entity has any lien, claim,encumbrance, or other interest (“Interest”) in the Membership Interest,pursuant to the Sale Motion, such Interest will attach to the proceeds derivedby Mirant New York from the sale of the Membership Interest in order of theirpriority and with the same validity, force, and effect that such Interest hasnow against the Membership Interest, if any, subject to all rights and defensesthat Mirant New York may have.

**IF YOU FAIL TO RESPOND IN ACCORDANCEWITH THIS NOTICE, THE BANKRUPTCY COURT MAY GRANT THE REMAINING RELIEF REQUESTEDIN THE SALE MOTION WITHOUT FURTHER NOTICE TO YOU OR THE OPPORTUNITY TO OBJECT.**

Dated:    FortWorth Texas

February    , 2007
| Jeff P. Prostok | George S.  Deptula                                                                                          |                                                                                                        |   |
|-----------------|-------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------|--------|
|            | J. Robert Forshey                                                                                           | Hiscock & Barclay, LLP                                                                                  |   |
|            | Forshey & Prostok LLP                                                                                   | One Park Place                                                                                              |   |
|            | 777 Main Street, Suite 1290                                                                                 | 300 South State Street                                                                                      |   |
|            | Fort Worth, Texas 76102                                                                                     | Syracuse, New York 13202                                                                                    |   |
|            | Telephone:            817/877-8855                   | Telephone:            315/425-2725                   |   |
|            | Facsimile:               817/877-4151 | Facsimile:               315/425-8545 |   |
|                 |                                                                                                             |                                                                                                             |        |  |  |  |

 

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**Schedule7.15(c)**

**SaleOrder**

**IN THEUNITED STATES BANKRUPTCY COURT**

**FOR THENORTHERN DISTRICT OF TEXAS**

**FORTWORTH DIVISION**
|                            | ) |                    |
|----------------------------|---|-------------------------|
| In re                      | ) | Chapter 11 Case         |
|                       | ) |                    |
| MIRANT CORPORATION, etal., | ) | Case No. 03-46590 (DML) |
|                       | ) | Chapter 11              |
| Debtors.                   | ) | Jointly Administered    |
| ** **                 | ) |                    |

 

**ORDER(I) AUTHORIZING AND APPROVING SALE OF MEMBERSHIP INTEREST IN MIRANT NY-GEN,LLC, BY MIRANT NEW YORK, INC. TO ALLIANCE ENERGY RENEWABLES, LLC, FREE ANDCLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND INTERESTS, (II) AUTHORIZING ANDAPPROVING MEMBERSHIP INTEREST PURCHASE AND SALE AGREEMENT AND THE PERFORMANCEBY THE DEBTORS OF THE TERMS THEREOF, AND (III) AUTHORIZING DEBTORS TO ENTERINTO, MODIFY OR TERMINATE CONTRACTS AND LEASES PURSUANT TO THE MEMBERSHIPINTEREST PURCHASE AND SALE AGREEMENT**

Upon the motion dated February 1, 2007 (the “SaleMotion”)(3) of Mirant New York, Inc. (“Mirant New York” or the “Seller”),Mirant NY-Gen, LLC (“NY-Gen” or “Company”), Mirant Bowline, LLC(“Mirant Bowline”), Mirant Lovett, LLC (“Mirant Lovett”), andHudson Valley Gas Corporation (“Hudson Valley”) (collectively, the “ExcludedDebtors” or “Debtors”), as debtors and debtors in possession, forentry of an order pursuant to sections 105(a), 363, and 1146(c) of title 11 ofthe United States Code (the “Bankruptcy Code”) and Rules 2002, 6004,9006, 9007, 9008, 9013, 9014, and 9036 of the Federal Rules of BankruptcyProcedure (the 

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(3) Terms used herein and not otherwise defined shall have the meaningsascribed to them in the Sale Motion or the Membership Interest Purchase andSale Agreement between Mirant New York, Inc. and Alliance Energy Renewables,LLC, dated January 31, 2007 (the “Agreement”).

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“Bankruptcy Rules”) (a) authorizing andapproving the sale by Mirant New York of the Membership Interest in MirantNY-Gen to Alliance Energy Renewables, LLC (“Alliance Energy” or the “Purchaser”),or alternatively to prevailing overbidder, free and clear of all liens, claims,encumbrances and interests pursuant to the terms of the Agreement; (b) authorizingand approving the Agreement (including all related instruments, documents,exhibits, schedules, lists, and agreements thereto) which provides for the (i)sale, conveyance, assignment, transfer, and delivery of the Membership Interestin Mirant NY-Gen to the Purchaser free and clear of all liens, claims,encumbrances, and interests, and (ii) performance of related Transactions asset forth in the Agreement; and (c) authorizing the Excluded Debtors to enterinto, terminate or modify certain contracts and leases in connection with theperformance and Closing of the Agreement; and adequate and sufficient notice ofthe Sale Motion, the Auction, the hearing on the Sale Motion (the “SaleHearing”), all Transactions contemplated thereunder, and this Order havingbeen given; and all parties in interest having been heard, or having had theopportunity to be heard, regarding the matters raised by the Sale Motion andrelief related thereto; and the Court having reviewed and considered (i) theSale Motion and any objections thereto (the “Objections”), and (ii) thearguments of counsel, and the evidence proffered or adduced at the SaleHearing; and it appearing from the affidavits of service heretofore filed withthe Court that due and sufficient notice of the Sale Motion, the Auction, theSale Hearing, and the relief sought in connection therewith have been providedto all parties in interest; and it further appearing that no other or furthernotice hereof is required; and it appearing that the relief requested in theSale Motion is in the best interests of the Debtors, their chapter 11 estates,their creditors, and other parties in interest; and upon the record of the SaleHearing, including the decision of the Court to approve the Sale Motion asreflected on the record thereof; and after due deliberation and good 

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and sufficient cause appearing therefore, this Courthereby makes the following Findings of Fact and Conclusions of Law:(4)

**FINDINGSOF FACT**

IT IS HEREBY FOUND AND DETERMINED THAT:

**Jurisdiction,Final Order, and Statutory Predicates**

A.            TheCourt has jurisdiction to hear and determine the Sale Motion and to grant therelief requested therein, pursuant to 28 U.S.C. §§ 157(b) and 1334.  This matter is a core proceeding within themeaning of 28 U.S.C. §§ 157(b)(2)(A), (K), (N), and (O).  Venue of the chapter 11 cases and the SaleMotion is proper in this district under 28 U.S.C. §§ 1408 and 1409(a).

B.            ThisCourt entered the Sale Procedures Order on           ,2007, under which, among other things, this Court approved certain SaleProcedures.  The Sale Procedures Orderhas become a final and non-appealable order and remains in full force andeffect.

C.            ThisSale Order constitutes a final and appealable order within the meaning of 28U.S.C. § 158(a).

D.            Thestatutory predicates for the relief sought in the Sale Motion are sections105(a), 363(b), (f), (m), and (n), and 1146(c) of the Bankruptcy Code, ascomplemented by Bankruptcy Rules 2002(a)(2), (c)(1), (g), (j), (k), (l), (m),and (n), 6004(a), (b), (c), (e), (f), and (g), 9006, 9007, 9008, 9013, 9014,and 9036.

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(4) Findings of fact shall be construed as conclusions of law, andconclusions of law shall be construed as findings of fact whenappropriate.  *See*Fed. R. Bankr. P. 7052.  Any statementsof the Court at the hearing on the Sale Motion shall constitute additionalfindings of fact and conclusions of law as appropriate and are expresslyincorporated by reference into this Order.

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**TheMirant Plan and the Excluded Debtors**

E.             Inan order dated December 9, 2005, the Bankruptcy Court confirmed the *Debtors’ Amended and Restated Second Amended JointChapter 11 Plan of Reorganization for Mirant Corporation and its AffiliatedDebtors Dated December 9, 2005* (the “Mirant Plan”)**with respect to all of the Mirant Debtors(collectively, the “New Mirant Entities”), except the Excluded Debtors.

F.             OnJanuary 3, 2006, the New Mirant Entities emerged from Chapter 11. The ExcludedDebtors continue to manage and operate their businesses asdebtors-in-possession pursuant to sections 1107 and 1108 of the BankruptcyCode.

**Retentionof Jurisdiction**

G.            Itis necessary and appropriate for the Court to retain jurisdiction as providedin the Agreement to, among other things, interpret and enforce the terms andprovisions of this Order and the Agreement, and to adjudicate, if necessary,any and all disputes involving the Debtors concerning or relating in any wayto, or affecting, the Membership Interest Sale including, but not limited to,the Sale Motion, the Auction, and the Sale Hearing.

**CorporateAuthority; Consents and Approvals**

H.            TheSeller has full corporate power and authority to execute and deliver theAgreement and all other documents contemplated thereby and to consummate theMembership Interest Sale.  The MembershipInterest Sale has been duly and validly authorized by all necessary corporateactions of the Seller.  No additionalconsents or approvals other than the authorization and approval of this Courtand certain Governmental Approvals (as defined in the Agreement) are requiredfor the Seller to consummate the Membership Interest Sale.  Each of the Excluded Debtors has fullcorporate power and authority to execute and deliver all documents andagreements to which they are a party required or contemplated by the Agreement.

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**Noticeof the Sale Motion**

I.              Asevidenced by the affidavits of service previously filed with this Court (the “NoticeAffidavits”) and based upon representations of counsel at the SaleHearing:  (i) due, proper, timely,adequate, and sufficient notice of the Sale Motion, the Auction, and the SaleHearing has been provided in accordance with sections 105, 363, and 1146 of theBankruptcy Code and Bankruptcy Rules 2002, 6004, 9006, 9007, 9008, 9013, 9014,and 9036, and in compliance with the Sale Procedures Order, (ii) such noticewas good and sufficient, and appropriate under the circumstances, and (iii) noother or further notice of the Sale Motion, the Auction, the Sale Hearing, orthe relief sought with respect thereto shall be required.

J.             Areasonable opportunity to object or to be heard with respect to the SaleMotion, the Auction, and the Sale Hearing has been afforded to all interestedpersons and entities, including:  (a) allparties entitled to receive notice as of the date hereof pursuant to the OrderClarifying Order Granting Complex Chapter 11 Bankruptcy Case Treatment, datedAugust 25, 2004, (b) all parties known to Mirant New York to have an interestin acquiring the Membership Interest and the Sale Assets, (c) all entitieslisted on the schedules of Mirant New York and Mirant NY-Gen, LLC as holdingsecured claims and all entities who recorded or filed proof(s) of claim assecured against Mirant NY-Gen or Mirant New York, (d) all entities who haverecorded in the public record any lien, claim, encumbrance, or interest in orupon the Membership Interest or any of the assets of Mirant NY-Gen, (e) theFederal Energy Regulatory Commission, (f) the Delaware River Basin Commission,(g) the New York Public Service Commission, (h) the State of New York Departmentof Environmental Conservation, (i) the New York City Department ofEnvironmental Protection, (j) the Securities and Exchange Commission, (k) theUnited 

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States Environmental Protection Agency, (l) the Officeof the United States Attorney, (m) the United States Department of Justice, (n)the Internal Revenue Service, (o) all parties granting permits or licenses toMirant NY-Gen, (p) the applicable state and local taxing authorities**,**and (q) all parties to Mirant NY-Gen’sexecutory contracts and unexpired leases.

**SoundBusiness Purpose for the Sale of the Membership Interest**

K.            Goodand sufficient reasons for approval of the Agreement and the MembershipInterest Sale have been articulated.  Therelief requested in the Sale Motion is within the reasonable business judgmentof the Seller and is in the best interests of the Debtors, their respectivechapter 11 estates and their creditors, and other parties in interest.

L.             TheSeller has demonstrated both (i) good, sufficient, and sound business purposeand justification and (ii) sufficient circumstances for the entry into theAgreement and the consummation of the Membership Interest Sale pursuant tosection 363(b) of the Bankruptcy Code, in that, among other things, theconsummation of the Membership Interest Sale to the Purchaser is necessary andappropriate to maximize the value to the estates of Mirant New York and MirantNY-Gen and the Membership Interest Sale will facilitate confirmation of MirantNY-Gen’s Plan.

**Auction**

M.           On           , 2007, inconnection with the Sale Hearing, the Bankruptcy Court conducted an Auction, inaccordance with the Sale Procedures Order entered by the Court.  At the conclusion of the Auction, the Sellerdetermined that the Purchaser was the Prevailing Bidder (as defined in theAgreement) for the Membership Interest pursuant to the terms of theAgreement.  The Court approved theresults of the Auction at the Sale Hearing on            ,2007.

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**GoodFaith of the Purchaser**

N.            Theterms and conditions set forth in the Agreement are fair and reasonable.  The Seller and the Purchaser extensivelynegotiated the terms and conditions of the Agreement in good faith and at arm’slength, and the Purchaser is entering into the Agreement in good faith and is agood faith purchaser within the meaning of section 363(m) of the BankruptcyCode, and is therefore entitled to the protections afforded thereby.

O.            ThePurchaser is not an “insider” (as that term is defined in section 101 of theBankruptcy Code) of Mirant New York or Mirant NY-Gen.  Mirant New York and the Purchaser have notengaged in any conduct that would cause or permit the Agreement to be avoidedunder section 363(n) of the Bankruptcy Code.

**Highestand Best Offer**

P.             TheAgreement constitutes the highest and best offer for the Membership Interest.

Q.            TheSeller’s determination that the Agreement constitutes the highest and bestoffer for the Membership Interest constitutes a valid and sound exercise of theSeller’s business judgment.  TheAgreement represents a fair and reasonable offer to purchase the MembershipInterest.  No other entity has submitteda qualified bid providing greater economic value for the Membership Interestthan the Purchaser.

**Validityof the Transfer of the Membership Interest**

R.            The transfer of theMembership Interest to the Purchaser pursuant to the Agreement is a legal,valid, and effective transfer of good and marketable title of the MembershipInterest and vests or will vest the Purchaser with all of the Seller’s rights,title, and interest in the Membership Interest as of the Closing Date free andclear of all liens, claims, encumbrances, and interests against the MembershipInterest, and pursuant to section 363(f) of 

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the Bankruptcy Code.

S.             ThePurchaser is purchasing Mirant New York’s Membership Interest and is notpurchasing any of Mirant New York’s other assets.  Additionally, the Agreement providesthat  prior to the Closing Date, MirantNY-Gen will assign to Mirant New York (or such Affiliate of Mirant New York asMirant New York may direct pursuant to the Mirant NY-Gen Plan) all of MirantNY-Gen’s pending insurance claims for losses with respect to the SwingingBridge Facility and the Hillburn Facility (which may include, but shall not belimited to, property, business interruption, and environmental losses),intercompany receivables and intercompany claims as of the Closing Date, claimsagainst third parties for actions or inactions arising prior to the ClosingDate (including, but not limited to, claims filed against Orange & RocklandUtilities, Inc. and Consolidated Edison, Inc. and/or any of their respectiveAffiliates), and certain purchase orders, which such assignments are herebyspecifically authorized.

**Section363(f) of the Bankruptcy Code is Satisfied**

T.            Thetransfer of the Membership Interest pursuant to the Agreement is authorizedpursuant to one or more of the standards set forth in section 363(f)(1) through(f)(5) of the Bankruptcy Code and, accordingly, the Seller may sell theMembership Interest to Purchaser free and clear of all liens, claims,encumbrances, and interests against the Membership Interest, Mirant New York,and its chapter 11 estate.  The holdersof such liens, claims, encumbrances, and interests against Mirant New York, itschapter 11 estate, or the Membership Interest, and non-Debtor parties to anyrelated agreements who did not object, or who withdrew their Objections, to theSale Motion, are deemed to have consented pursuant to section 363(f)(2) of theBankruptcy Code.  Holders of  liens, claims, encumbrances, or interests andwho asserted an Objection at the Sale Hearing, if any, fall within one or moreof the other subsections of section 

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363(f) and are adequately protected by having theirliens, claims, encumbrances, and interests, if any, against Mirant New York,its chapter 11 estate, or the Membership Interest, attach to the cash proceedsto be received by the Seller under the Agreement, subject to the same priorityand validity (and defenses and objections of the Seller and other parties ininterest, if any, with respect thereto) as are presently existing against theMembership Interest in which they allege such a lien, claim, encumbrance, orinterest.

**TransferTaxes**

U.            Thetransfer of the Membership Interest by Mirant New York to the Purchaser, and tothe extent that the Membership Interest Sale is considered a transfer of theSale Assets by Mirant NY-Gen, is and shall constitute a transfer pursuant tosection 1146(c) of the Bankruptcy Code and, accordingly, shall not be taxedunder any law imposing a stamp tax or a sales, use, transfer, duty, valueadded, or any other similar tax, including without limitation, any bulk salestax under New York law.

**Assignmentof the Membership Interest**

V.            TheSeller has demonstrated that assignment of the Membership Interest in connectionwith the Membership Interest Sale is an exercise of its sound businessjudgment, and that such assignment is in the best interests of the chapter 11estates of Mirant New York and Mirant NY-Gen.

**Authorizationto Enter Into, Modify**

**orTerminate Ancillary Contracts and Leases**

W.           TheDebtors have demonstrated that the execution, modification or termination ofcertain Ancillary Agreements pursuant to the terms of the Agreement are in thebest interest of their respective bankruptcy estates and should be authorized,as applicable, pursuant to Section 363 of the Bankruptcy Code.

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X.            Tothe extent any Findings of Fact set forth above constitute a Conclusion of Law,the Court so concludes.

**CONCLUSIONSOF LAW**

Based upon the foregoing Findings of Fact, IT IS HEREBYORDERED, ADJUDGED AND DECREED AS FOLLOWS:

1.             Tothe extent any Conclusion of Law set forth below herein constitutes a Findingof Fact, this Court so finds.

**GeneralProvisions**

2.             Exceptto the extent that relief was previously granted in the Sale Procedures Order,the relief requested in the Sale Motion is granted and approved in allrespects.  The sale of the MembershipInterest to Purchaser on the terms and conditions set forth in the Agreement isapproved.

3.             Forthe reasons set forth on the record at the Sale Hearing, any Objections to theSale Motion, and the relief requested therein that have not been withdrawn,waived, or settled, (a) are denied and overruled on the merits with prejudiceor (b) the interests of such parties filing Objections have otherwise beensatisfied or adequately provided for under the terms of this Order.

4.             Theterms and provisions of this Order shall be binding in all respects upon, tothe extent applicable, the Debtors, their chapter 11 estates, creditors,members, managers, shareholders, officers, and directors, and upon allinterested parties, and their respective successors and assigns, including, butnot limited to, all non-Debtor parties asserting any liens, claims,encumbrances and/or interests in the Membership Interest.

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**Approvalof the Agreement**

5.             Pursuantto sections 363(b) and (f) of the Bankruptcy Code and the Agreement, theDebtors are authorized and empowered to (i) take any and all actions necessaryor appropriate to effect, consummate, and close (a) the assignment, transfer,and conveyance of the Membership Interest to the Purchaser, (b) the MembershipInterest Sale, and (c) this Order, and (ii) execute and deliver, perform under,consummate, implement, and close fully the Agreement and the Ancillary Agreements(as defined in the Sale Motion), together with all additional instruments anddocuments that may be reasonably necessary or desirable to implement theMembership Interest Sale.

6.             Pursuantto sections 105(a) and 363(f) of the Bankruptcy Code and on the terms set forthin the Agreement, upon the Closing provided in the Agreement, the MembershipInterest shall be and hereby is deemed transferred and assigned to thePurchaser effective as of 11:59 p.m. (Prevailing Central Time) on the ClosingDate, free and clear of all liens, claims, encumbrances, and interests arisingor relating to the period prior to the Closing.

7.             Allpersons and entities holding liens, claims, encumbrances, and interests of anykind and nature accruing, arising or relating to a period on or prior to theClosing Date with respect to the Membership Interest will be barred, estopped,and permanently enjoined as of Closing from asserting such liens, claims,encumbrances, and interests against the Membership Interest or against thePurchaser and any of its affiliates, stockholders, members, managers, partners,parent entities, successors, assigns, officers, directors or employees, agents,representatives, and attorneys, and the Purchaser shall have no liability orresponsibility for any lien, claim, encumbrance, or interest arising, accruing,or relating to the Membership Interest for a period on or prior to Closing.

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8.             Thetransfer of the Membership Interest to the Purchaser pursuant to the Agreementconstitutes a legal, valid, and effective transfer of good and marketable titleof the Membership Interest, and vests or will vest the Purchaser with allright, title, and interest in and to the Membership Interest, free and clear ofall liens, claims, encumbrances, and interests. Each non-Debtor party to any agreements with Mirant NY-Gen that are notassumed by Mirant NY-Gen pursuant to the Mirant NY-Gen Plan will, as ofClosing, be barred, estopped, and permanently enjoined from asserting againstthe Purchaser or Mirant NY-Gen any default, claim, or liability existing, accrued, arising, or relating to any suchagreements.

9.             Onthe Closing Date, this Order shall be construed and shall constitute for anyand all purposes a full and complete general assignment, conveyance, andtransfer of the Membership Interest or a bill of sale that transferred good andmarketable title of the Membership Interest to the Purchaser.  Each and every federal, state, and localgovernmental agency or department is hereby directed to accept any and alldocuments and instruments presented by the Seller or Purchaser which arenecessary or appropriate to consummate the Membership Interest Sale.

10.           Pursuantto sections 105(a) and 363 of the Bankruptcy Code, and on the terms set forthin the Agreement, the Debtors are authorized to enter into, modify or terminatethe Ancillary Agreements.

**AdditionalProvisions**

11.           ThisOrder is and shall be binding upon and shall govern the acts of all entitiesincluding, without limitation, all filing agents, filing officers, titleagents, title companies, recorders of mortgages, recorders of deeds,administrative agencies, governmental units, secretaries of state, federal,state, and local officials, and all other persons and entities who may 

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be required by operation of law, the duties of theiroffice, or contract, to accept, file, register, or otherwise record or releaseany documents or instruments, or who may be required to report or insure anytitle or state of title in or to the Membership Interest.  All liens, claims, encumbrances, andinterests against the Membership Interest as of the date of this Order shallforthwith, upon the occurrence of the Closing on the Closing Date with respectto the Membership Interest, be removed and stricken as against such MembershipInterest, without further order of the Court or act of any party.  All liens, claims, encumbrances, andinterests against the Membership Interest as of the date of this Order shallattach solely to the proceeds of the sale with the same validity (and subjectto the same defenses), priority, force and effect that such liens, claims,encumbrances and interests had in and to the Membership Interest immediatelyprior to Closing.  Upon the Closing Date,the entities listed above in this paragraph are authorized and specifically directedto strike all such recorded liens or claims against the Membership Interest asprovided for herein from their records, official and otherwise (including thoseasserted by a secured lender).

12.           Eachand every federal, state, and local governmental agency, unit or department ishereby directed to accept this Order as sole and sufficient evidence of thetransfer of title of the Membership Interest and such agency or department mayrely upon this Order in connection with the Membership Interest Sale.

13.           Afterthe Closing Date, no person or entity, including without limitation, anyfederal, state or local taxing authority, may (a) attach or perfect a lien orsecurity interest against the Membership Interest on account of, or (b) collector attempt to collect from the Purchaser or any of its affiliates, any tax orother amount alleged to be owing by Mirant New York on behalf of Mirant NY-Genor Mirant Services, LLC on behalf of Mirant NY-Gen (i) for any period 

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commencing before and concluding prior to or after theClosing, or (ii) assessed prior to and payable after the Closing Date, exceptas otherwise specifically provided in the Agreement.

14.           ThePurchaser is not a successor to Mirant New York or otherwise liable for any ofthe liens, claims, encumbrances, interests, or other liabilities against MirantNew York and all persons and entities are permanently enjoined from commencing,continuing, or otherwise pursuing or enforcing any remedy, claim, cause ofaction, lien, or encumbrance against Purchaser, the Membership Interest, orMirant New York.

15.           Thetransfer of the Membership Interest by Mirant New York to the Purchaser, and tothe extent that the Membership Interest Sale is considered a transfer by MirantNY-Gen of the Sale Assets, is a transfer pursuant to section 1146(c) of theBankruptcy Code and, accordingly, shall not be taxed under any law imposing astamp tax or a sales, use, transfer, duty, value added, or any other similartax, including without limitation any bulk sales tax under the state law of NewYork or other applicable laws.

16.           ThisCourt retains jurisdiction to, among other things:

i.              interpret,implement, and enforce the terms and provisions of this Order and the terms ofthe Agreement and any Ancillary Agreements, all amendments thereto and anywaivers and consents thereunder and of each of the agreements executed inconnection therewith;

ii.             enter orders in aidor furtherance of the Membership Interest Sale;

iii.            resolve any disputesarising under or related to the Agreement or the Membership Interest Sale andto ensure peaceful use and enjoyment of the Membership Interest;

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iv.            adjudicate any and allissues and/or disputes, if any, relating to the Purchaser’s or the Seller’sright, title, or interest in, to and under the Agreement and relatedagreements, and the Purchaser’s or other Debtors’ right, title or interest in,to and under the Ancillary Agreements to which they are a party;

v.             adjudicate all issuesconcerning prorations under the Agreement (including taxes) consistent with theterms of the Agreement;

vi.            hear and resolve anyapplication (or disputes or issues relating thereto) to construe the Agreement;

vii.           adjudicate any and allissues and/or disputes relating to the Seller’s right, title, or interest inthe Membership Interest and the proceeds thereof, the Sale Motion and/or theAgreement;

viii.          adjudicate any and allissues and/or disputes relating to the enforcement of this Sale Order includingthose terms, without limitation, which compel delivery of the Membership Interestto Purchaser and provide that any liens, claims, encumbrances, and interestsshall attach solely to the proceeds of the Membership Interest Sale; and

ix.            re-open the Debtors’chapter 11 cases to enforce the provisions of this Order.

17.           Theconsideration provided by the Purchaser for the Membership Interest under theAgreement is fair and reasonable and may not be avoided under section 363(n) ofthe Bankruptcy Code.  Each and everyperson or entity is hereby barred, estopped, and permanently enjoined fromcommencing or continuing an action seeking relief under section 363(n) of theBankruptcy Code.

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18.           TheSeller has undertaken the Membership Interest Sale in good faith (as that termis used in section 363(m) of the Bankruptcy Code), and the Purchaser is andshall continue to be in good faith (as that term is used in section 363(m) ofthe Bankruptcy Code) by proceeding to close the Membership Interest Sale.  Accordingly, the reversal or modification onappeal of the authorization to consummate the Membership Interest Sale approvedhereby shall not affect the validity and enforceability of such MembershipInterest Sale, unless such authorization is duly stayed pending suchappeal.  The Purchaser is a good faith purchaserof the Membership Interest and entitled to all of the protections afforded bysection 363(m) of the Bankruptcy Code.

19.           Thesale of the Membership Interest to Purchaser under the Agreement willconstitute a transfer for reasonably equivalent value and fair considerationunder the Bankruptcy Code and the laws of all applicable jurisdictions.

20.           Thefailure specifically to include any particular provision of the Agreement inthis Order shall not diminish or impair the efficacy of such provision, itbeing the intent of this Court that the Agreement and each and every provision,term, and condition thereof be authorized and approved in its entirety.

21.           NotwithstandingBankruptcy Rules 6004(g) and 7062, to the extent applicable, the Seller and thePurchaser may consummate the Agreement at any time after entry of the Order bywaiving any and all closing conditions set forth in the Agreement that have notbeen satisfied and by proceeding to close the Membership Interest Sale withoutany notice to the Court, any prepetition or postpetition creditor of Mirant NewYork or Mirant NY-Gen, and/or any other party in interest.

22.           TheAgreement and any related agreements, documents, or other instruments may bemodified, amended, or supplemented by the parties thereto, in a writing signedby such parties 

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in accordance with the terms thereof, without furtherorder of the Court, provided that any such modification, amendment, orsupplement is not material.

23.           Theprovisions of this Order are non-severable and mutually dependent.
| Dated:    Fort  Worth, Texas                                                                         |                           |
|---------------------------------------------------------------------------------------------------------------------|--------------------------------|
|                   ,  2007 |                           |   |
|                                                                                                                     | The Honorable D. Michael Lynn  |
|                                                                                                                | United States Bankruptcy Judge |

 

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**Schedule 7.25**

**Form ofCross-Indemnity Agreement**

**CROSS-INDEMNIFICATION AGREEMENT**

**THISCROSS-INDEMNIFICATION AGREEMENT**(the **“Agreement”**),is entered into this       day of               ,2007, is by and among **MIRANT BOWLINE, LLC** (“**Bowline**”),**MIRANTNY-GEN, LLC** (“**N.Y. Gen**”), **MIRANT LOVETT, LLC** (“**Lovett**”)(Bowline, N.Y. Gen and Lovett each a “**Party**” and collectively, the “**Parties**”).

**WHEREAS,**the Parties are signatories to a certain settlement agreement datedAugust 31, 2001, with Orange and Rockland Utilities, Inc. (“**O&R**”)(the “**O&RSettlement Agreement**”);

**WHEREAS,**each Party or all of the Parties may face liability under the O&RSettlement Agreement; and

**WHEREAS**,the Parties wish to enter into an agreement providing that any liability underthe O&R Settlement Agreement will be borne solely by the Party or Partieswhose failure to perform its or their obligations under the O&R SettlementAgreement gave rise to the liability   (each such responsible Party being hereafter referred to as an **“Indemnitor”**,****collectively,the **“Indemnitors”**).

**NOW, THEREFORE,**the Parties agree as follows:

1.                                       Definitions.  As used in this Agreement, capitalized termsand non-capitalized words and phrases shall have the meaningsrespectively assigned to them in Schedule I hereto.

2.                                       Exculpationand Indemnification.

(a)                                  EachIndemnitor agrees (i) to perform its obligations under this Agreement and theO&R Settlement Agreement (subject to the right of any Party to reject theO&R Settlement Agreement under the United States Bankruptcy Code); and (ii)to indemnify the other Parties in accordance with the provisions of thisAgreement for any Losses that the other Parties may incur due to the Indemnitor’sfailure to perform its obligations as described in clause (i) aforementioned;provided, however, that the Indemnitor’s indemnification obligations as hereindescribed shall only apply to the extent that the Losses incurred by the Partywho makes a indemnification claim against the Indemnitor are disproportionateto those for which such Party would otherwise be liable under the terms of theO&R Settlement Agreement.

(b)                                 Subjectto the provisions of Section 2(a) hereof, each Party, its Affiliates and eachof their respective Representatives who incurs any liability for any acts oromissions of an Indemnitor which constitute a failure by such Indemnitor tocomply with its obligation under Section 2(a) hereof (each such Party being 

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individually referred to as an **“Indemnitee”**,collectively, the **“Indemnitees”**)shall be indemnified, reimbursed and held harmless by each Indemnitor (on ajoint and several basis if there is more than one Indemnitor) upon demand, anddefend at the expense of the Indemnitor (on a joint and several basis if thereis more than one Indemnitor) with counsel selected by the Indemnitor, from andagainst any and all claims, liabilities, expenses (including, withoutlimitation, the disbursements, expenses and reasonable attorneys’ fees) andother Losses that may be imposed upon, incurred by or asserted against anyIndemnitee resulting from, arising out of or directly or indirectly related to:(i) any Indemnity Obligation; (ii) any inaccuracy in or omission from anyrepresentation, warranty or other information contained in the O&RSettlement Agreement signed or accepted by any Indemnitee or any of itsRepresentatives or in any certificate, report, statement, schedule or otherdocument delivered by or on behalf of any Indemnitee pursuant to the O&RSettlement Agreement, (iii) any default (whether in whole or in part) in thedue or timely observance, performance or satisfaction of any covenant or otherterm or provision of this Agreement or the O&R Settlement Agreement by theIndemnitor in each case whether or not disclosed or known to the Indemnitee andwhether or not the Indemnitee relied thereon or had knowledge thereof; and eachIndemnitor hereby absolutely, unconditionally, irrevocably and expressly waivesand releases forever any and all related claims and actions against each suchIndemnitee to the extent such claims or actions arise out of the acts oromissions of the Indemnitor.

(c)                                  TheParties understand and agree that this Section is not intended, and shall notbe deemed or construed, to in any way (i) impose any Indemnity Obligation ofany Indemnitor on any Indemnitee for any purpose whatsoever, (ii) entitleanyone other than an Indemnitee to any indemnity, reimbursement or otherrecovery or benefit under this Section or any other applicable provision ofthis Agreement or the O&R Settlement Agreement, or (iii) apply to any Lossesarising under subsections (b)(ii) or (b)(iii) of this Section to the extentoccasioned by any acts or omissions of any Indemnitee amounting to bad faith,gross negligence or willful misconduct as finally determined pursuant toApplicable Law by an Authority having jurisdiction.  The preceding exception for bad faith, grossnegligence or willful misconduct is limited to this Section and is not intended(and shall not be deemed or construed) to in any way qualify, condition,diminish, restrict, limit or otherwise affect any other exculpation,indemnification, release, waiver, consent, acknowledgment, authorization orother term or provision of this Agreement or the O&R Settlement Agreement.

(d)                                 Anypayment due to an Indemnitor from any Indemnitee (including any payment fromany escrow) shall be subject to offset and reduction for any suchindemnification, reimbursement and/or defense and any related Loss owed to theIndemnitee (on behalf of itself and/or any of its Affiliates).

(e)                                  EachIndemnitee shall endeavor to give the Indemnitor prompt notice of any action,suit, proceeding or investigation against or involving either the Indemnitee orthe Indemnitor or any of their respective assets or properties that would be 

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reasonably likely to give rise to such an indemnification,reimbursement or defense (each a “**Proceeding**”); provided,however, that the failure to give such notice shall not in any waydiminish, reduce or otherwise affect the indemnification, defense orreimbursement obligations of any Indemnitee with respect thereto under thisAgreement, the O&R Settlement Agreement, or Applicable Law. Each Indemniteeshall have the right to employ separate counsel of its choice in any Proceedingand to participate in the defense and settlement thereof.  The Indemnitor shall not be required  to pay the fees and expenses of counselselected by any Indemnitee unless any of the following shall occur: (i) theIndemnitor has given written authorization permitting the Indemnitee to selectand retain counsel to represent the Indemnitee and agreeing that the fees andexpenses of such counsel will be paid by the Indemnitor; (ii) the named partiesto any Proceeding (including impleaded parties) include or are reasonablylikely to include the Indemnitee or any of its Affiliates or Representatives,and the Indemnitee notifies the Indemnitor that counsel to the Indemnitee (orcounsel to any other Indemnitee) has advised that, in the professional judgmentof such counsel, (x) one or more legal defenses or counterclaims may be availableto such Indemnitee that may be inconsistent with, different from, or additionalto those available to the Indemnitor or any other Indemnitee or (y) use ofcounsel selected by the Indemnitor could reasonably be expected to give rise toa conflict of interest; or (iii) within five (5) Business Days after anyrequest therefor by the Indemnitee (which notice may be made with or at anytime after the notice required in the first sentence of this subsection isgiven), the Indemnitor shall have failed to deliver to the Indemnitee (onbehalf of such Indemnitee and each other Indemnitee) the written agreement ofthe Indemnitor to assume at its expense the defense of any Proceeding,specifying the counsel proposed to be retained. If the counsel so proposed by the Indemnitor is not acceptable to theIndemnitee in its reasonable discretion, then the Indemnitee shall so notifythe Indemnitor within five (5) Business Days and, thereafter, the Indemniteeshall promptly propose other suitable counsel. When counsel acceptable to theIndemnitee has been selected, such counsel shall promptly deliver to theIndemnitee (on behalf of such Indemnitee and all other Indemnitees) writtenconfirmation that it is representing the Indemnitee and each other Indemniteeand their interests in such defense, all at the expense of the Indemnitor,which confirmation shall disclose any other parties such counsel may representin such defense or any related matter. In no event shall the Indemnitor berequired under this Section (absent its consent) to pay the fees and expensesof more than one counsel separate from the counsel selected by the Indemnitorto represent all Indemnitees in any Proceeding.

(f)                                    Neitherthe Indemnitor nor any of its Representatives on its behalf may settle anyProceeding, or offer or agree to do so, without the prior written consent ofthe Indemnitee, which consent will not be unreasonably withheld.  Likewise, neither the Indemnitee nor any ofits Representatives on its behalf may settle any Proceeding, or offer or agreeto do so, without the prior written consent of the Indemnitor, which consentwill not be unreasonably withheld, in each case unless (i) such settlement iswithout any further cost, liability or obligation to the 

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Indemnitor, or (ii) the Indemnitor is then in defaultwith respect to any of its obligations under this Agreement.

(g)                                 NoParty referenced in clause (f) above shall, without the prior written consentof the other Party referenced therein: (i) settle or compromise any Proceeding or consent to the entry of anyjudgment or order that does not include (as an unconditional term thereof) thedelivery by the plaintiff or other claimant to such other Party of a full andcomplete written release of such other Party (in form, scope and substancesatisfactory to the other Party in its reasonable discretion) from any and allobligations and liabilities in respect of such Proceeding and a dismissal withprejudice of such Proceeding, or (ii) settle or compromise any Proceeding inany manner that may adversely affect such other Party or obligate such otherParty to pay any sum or perform any obligation whatsoever, each as determinedby such other Party in its reasonable discretion.

(h)                                 AllLosses shall be immediately reimbursable to the Indemnitee(s) when and as incurredand, in the event of any Proceeding, without the requirement of awaiting theultimate outcome of such Proceeding.  TheIndemnitor shall pay to the Indemnitee(s) any and all Losses within ten (10)days after written notice from the Indemnitee(s) itemizing the amounts thereofincurred to the date of such notice.  Inaddition to any other remedy available for the failure of the Indemnitor toperiodically pay such Losses, such Losses, if not paid within said ten (10) dayperiod, shall bear interest at the annual rate of eighteen (18) percent perannum until paid in full.

3.                                       FurtherAssurances.  Each Party agrees to dosuch further acts and things and to execute and deliver such statements,assignments, agreements, instruments and other documents as the other Partyfrom time to time reasonably may request (a) in order to evidence or confirmthe priorities, subordinations, reservations of right and other agreements madehereunder, or (b) in order to effectuate the purpose and the terms andprovisions of this Agreement, each in such form and substance consistent withthis Agreement as may be reasonably acceptable to the Parties and each at thesole cost and expense of the requesting Party.

4.                                       AgreementAbsolute, Survival of Representations, Etc. Except as otherwise expressly provided in this Agreement, each of thecovenants and other agreements and obligations of each Party contained in thisAgreement: (a) are and shall be absolute, irrevocable and unconditional, andshall survive and remain and continue in full force and effect in accordancewith their respective terms and provisions, in each case without regard to(among other things) any invalidity, illegality, non-binding effect orunenforceability (in whole or in part) for any reason whatsoever of any of theother terms and provisions of this Agreement or the O&R SettlementAgreement, including (without limitation) by reason of the absence (in whole orin part) of any required authentication, authority, capacity, consent,consideration, disclosure, equivalent value, filing, notice, recordation,signature, writing or other action, or the presence (in whole or in part) ofany contractual conflict, defense, illegality, misconduct, misrepresentation,mistake, prohibition, restriction or right of reimbursement, recoupment orsetoff; (b) are and shall be absolute, 

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irrevocable and unconditional with regard to, andshall survive and remain and continue in full force and effect in accordancewith their respective terms and provisions following and without regard to,each of the following (among other things): (i) any extension, stay, moratoriumor statute of limitations or similar time constraint under any Applicable Law,(ii) any sale, conveyance, assignment, participation or other transfer by anyParty (in whole or in part) to any other Person of any one or more of thisAgreement, the O&R Settlement Agreement, or any one or more of the rights,powers, privileges, remedies or interests of any Party herein or therein, otherthan as expressly prohibited by this Agreement, or (iii) any act or omission onthe part of any Party or any other Person or any other event that otherwisemight constitute a legal or equitable defense or counterclaim; in each case insuch manner and order, upon such terms and provisions and subject to suchconditions as any Party may deem necessary or desirable in its sole andabsolute discretion, without notice to or further assent from any other Party(except for such notices and actions as may be expressly required under thisAgreement or by Applicable Law), and without affecting any of the rights,powers, privileges, remedies and other interests of any Party under thisAgreement, the O&R Settlement Agreement, and Applicable Law; (c) shall notbe subject to any defense, counterclaim, set-off, right of recoupment,abatement, reduction or other claim or determination that any Party may haveagainst any other Party or any other Person; (d) shall not be diminished orqualified by the dissolution, reorganization, insolvency, bankruptcy,custodianship or receivership of any other Party or the inability of any ofthem to pay their respective debts or perform or otherwise satisfy theirrespective obligations as they become due for any reason whatsoever; and (e)shall remain and continue in full force and effect without regard to any of theforegoing events until all obligations under this Agreement and the O&RSettlement Agreement, as the case may be, have been fully paid and satisfied.

5.                                       Termination.  Notwithstanding the terms inSection 4 hereof or in any other provision in this Agreement, this Agreementshall terminate upon the termination of the O&R Settlement Agreement or therelease of N.Y. Gen from its rights and obligations under the O&RSettlement Agreement, except as to matters arising prior to such termination orrelease.

6.                                       Waiversof Notice, Etc.  Except for noticesto a Party expressly required to be given by the other Party under thisAgreement (and without in any way waiving or affecting any notice or otheraction described in this Section and required to or from any other Person underthe O&R Settlement Agreement or Applicable Law), each Party herebyabsolutely, unconditionally, irrevocably and expressly waives forever each andall of the following from the other Party: (a) acceptance and notice of anyacceptance of this Agreement or the O&R Settlement Agreement; (b) notice ofany action taken or omitted in reliance hereon; (c) presentment and noticeof any presentment; (d) demand for payment and notice of any such demand;(e) dishonor and notice of any dishonor; (f) protest and notice of any protest;(h) notice of any material and adverse effect, whether individually or in theaggregate, or other information respecting (i) the assets, business, cash flow,expenses, income, liabilities, operations, properties, prospects, reputation orcondition (financial or otherwise) of any Person, and (ii) the ability of anyPerson to pay or otherwise satisfy (as and when due) any of their respectiveobligations; and (g) any other proof, notice or demand of any kind whatsoeverwith respect to any or all of the 

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Indemnity Obligations. No act or omission of any kindin connection with any of the foregoing shall in any way impair or otherwiseaffect the legality, validity, binding effect or enforceability of any term orprovision of this Agreement, the O&R Settlement Agreement, or any of theIndemnity Obligations.

7.                                       Enforcement,Etc.  Each Party, in its solediscretion, may proceed to exercise or enforce any right, power, privilege,remedy or interest that it may have under this Agreement, the O&RSettlement Agreement, or Applicable Law: (a) at law, in equity or in any otherforum available under Applicable Law; (b) without notice except as otherwiseexpressly provided herein; (c) without pursuing, exhausting or otherwiseexercising or enforcing any other right, power, privilege, remedy or interestthat it may have against or in respect of any Person or thing; and (d) in suchorder and at such times as a Party may elect in its sole and absolutediscretion.

8.                                       Consentto New York Jurisdiction and Venue, Etc. The Parties hereby consent and agree that the Supreme Court of the Stateof New York for New York County, and the United States District Court for theSouthern District of New York (Manhattan) each shall have personal jurisdictionand proper venue with respect to any dispute between the Parties; providedthat that the foregoing consent shall not deprive any Party of the rightin its discretion to voluntarily commence or participate in any other forumhaving jurisdiction and venue or deprive any Party of the right to appeal thedecision of any such court to a proper appellate court located elsewhere.   Each Party will not raise, and each Partyhereby absolutely, unconditionally, irrevocably and expressly waives forever,any objection or defense in any such dispute to any such jurisdiction as aninconvenient forum.  The precedingconsents to jurisdiction and venue in New York State’s Supreme Court have beenmade by the Parties in reliance (at least in part) on Section 5-1402 of theGeneral Obligations Law of the State of New York, as amended (as and to theextent applicable), and other Applicable Law. Each Party acknowledges and agrees that a final judgment in any action,suit, or proceeding between the Parties shall be conclusive and binding uponthe Parties and may be enforced against the applicable Party in any otherappropriate jurisdiction by an action, suit or proceeding in such otherjurisdiction.  To the extent that a Partymay be entitled to immunity (whether by reason of sovereignty or otherwise)from suit in any jurisdiction, from the jurisdiction of any court or from anyother legal process, each Party hereby absolutely, unconditionally, irrevocablyand expressly waives forever such immunity.

9.                                       NoFiduciary Relationship, Etc.  EachParty represents and warrants to and acknowledges and agrees with the otherParty that: (a) the Parties’ sole relationship with each other under thisAgreement is that of arm’s-length counter-party; (b) no term or provisionof this Agreement is intended, nor deemed or construed, to (i) impose on anyParty any trust (other than as expressly provided herein), fiduciary,franchise, agency, advisory or similar duty to or relationship with any otherParty or any of its Representatives, or (ii) make any Party a partner, jointventurer, Affiliate, agent or other Representative of any other Party, and eachsuch duty, relationship, status, benefit or right that would otherwise beimposed by Applicable Law with respect to this Agreement is hereby absolutely,irrevocably, unconditionally, expressly and forever waived by each Party exceptas otherwise expressly provided herein; and (c) each Party has received andindependently 

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and fully reviewed and evaluated this Agreement, theobligations and transactions contemplated hereunder and the potential effectsof such obligations and transactions on its own business attributes.

10.                                 Reliance.  Each Party shall be entitled to rely upon anynotice, consent, certificate, affidavit, statement, paper, document, writing orother communication (which to the extent permitted hereunder may be by telecopyor telephone) reasonably believed by such Party to be genuine and to have beensigned, sent or made by the proper Person or Persons, and upon opinions and adviceof legal counsel, independent public accountants and other experts selected byany Party.

11.                                 Notice.  Any notice, request, demand or othercommunication permitted or required to be given to a Party under this Agreementor the O&R Settlement Agreement shall be in writing and shall be sent tothe addressee at the address set forth in Schedule II attached hereto (or atsuch other address as shall be designated by notice to the other Party andPersons receiving copies), effective upon actual receipt (or refusal to acceptdelivery) by the addressee on any Business Day, or the first Business Dayfollowing receipt after the close of normal business hours or on anynon-Business Day, by (a) FedEx (or other equivalent national or internationalovernight courier) or United States Express Mail, (b) certified,registered, priority or express United States mail, return receipt requested,(c) telecopy or (d) messenger, by hand or any other means of actualdelivery.

12.                                 Expenses.  Except as otherwise expressly provided inthis Agreement or the O&R Settlement Agreement, all costs, fees andexpenses incurred in connection with, or in anticipation, administration orenforcement of, this Agreement shall be paid by the Party incurring suchexpenses.  However, this Section is notintended, and shall not be deemed or construed, to in any way modify or limitany obligation or liability of any other Person for any such costs, fees or expenses under any instrument, agreement ordocument in favor of any Indemnitee or Indemnitor.

13.                                 Interpretation,Severability, Etc.  The Partiesacknowledge and agree that the terms and provisions of this Agreement have beennegotiated, shall be construed fairly as to all Parties hereto, and shall notbe construed in favor of or against any Party. In the event that any term or provision of this Agreement shall bedetermined to be superseded, invalid, illegal or otherwise unenforceablepursuant to Applicable Law by an Authority having jurisdiction and venue: (a)that determination shall not impair or otherwise affect the validity, legalityor enforceability by or before that Authority of the remaining terms andprovisions of this Agreement; (b) if that determination was due to the scope orduration of any such term or provision, the Parties agree that such Authorityshall have the power (and is hereby requested by the Parties) to limit thescope or duration of such term or provision to the maximum permissible underApplicable Law so that said provision shall be enforceable in such limitedform; and (c) this Agreement shall be enforced as if the unenforceableprovision were so deleted or limited to the greatest extent permitted byApplicable Law; in each case except to the extent the deletion or limitationthereof could reasonably be expected to impair the practical realization of theprincipal rights and benefits hereunder of any Party.  No such determination shall impair orotherwise affect the validity, legality or enforceability of any term orprovision of this 

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Agreement by or before any other Authority.

14.                                 Successorsand Assigns; Assignment; Intended Beneficiaries.  Whenever in this Agreement reference is madeto any Person, such reference shall be deemed to include the successors,permitted assigns, heirs and legal representatives of such Person and, withoutlimiting the generality of the foregoing, all representations, warranties,covenants and other agreements made by or on behalf of each Party in thisAgreement shall inure to the benefit of the successors, permitted assigns(including, without limitation, participants and any Person for whom such Party may be acting as Agent,as applicable) and legal representatives of the other Party; provided, however,that nothing herein shall be deemed to authorize or permit any Party to assignany of its obligations under this Agreement, and no party shall make any suchassignment.  The terms and provisions ofthis Agreement are for the exclusive benefit of the Parties hereto, and noother Person (including, without limitation, creditors of any Party hereto)shall have any right or claim against any Party by reason of any of those termsand provisions or be entitled to enforce any of those terms and provisionsagainst any Party.

15.                                 NoWaiver by Action, Cumulative Rights, Etc. Any waiver or consent respecting this Agreement shall be effective onlyif in writing and signed by each applicable Party against whom enforcement maybe sought and then only in the specific instance and for the specific purposefor which given.  No waiver or consentshall be deemed (regardless of frequency given) to be a further or continuingwaiver or consent.  The failure or delay(in whole or in part) of any Party to require performance of, or to exercise orotherwise enforce any of the rights or remedies of such Party with respect to,any term or provision of this Agreement shall in no way affect the right of anyParty at a later time to exercise or otherwise enforce any such term orprovision.  No notice to or demand on anyParty or other Person in any case shall entitle such Party or Person to anyother or further notice or demand.  Allrepresentations, warranties, covenants, agreements and obligations of eachParty (whether individual, joint, several or otherwise) in this Agreement andall rights, powers, privileges, remedies and other interests of each Partyunder this Agreement or Applicable Law are cumulative and not alternatives.

16.                                 GoverningLaw.  This Agreement****shall be governed by and construed in accordance with theapplicable federal law of the United States of America, and to the extent notpreempted by such federal law, by the applicable law of the State of New York(other than those conflict of law rules that would defer to the substantivelaws of another jurisdiction).  This governinglaw election has been made by the parties in reliance (at least in part) onSection 5-1401 of the General Obligations Law of the State of New York, asamended (as and to the extent applicable), and other applicable law.

17.                                 Counterparts,Amendments, Etc. This Agreement or any supplement, modification, amendment,restatement or waiver respecting this Agreement may be executed in two  (2) or more counterpart copies of the entiredocument or of signature pages to the document, each of which may have beenexecuted by one or more of the signatories hereto or thereto and delivered bymail, courier, telecopy, pdf file or other electronic means, but all of which,when taken together, shall constitute a single instrument or agreement bindingupon all of the signatories hereto or thereto, as the case may be.  Each and every 

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supplement, modification or amendment to orrestatement of this Agreement shall be in writing and signed by all of theParties hereto, as applicable, and each and every waiver of, or consent to anydeparture from, any term or provision of this Agreement shall be in writing andsigned by each Party against whom enforcement thereof may be sought.

**IN WITNESS WHEREOF**, the undersigned have signed this Agreementor caused it to be signed by their duly authorized signatories effective as ofthe date first written above.
|            | **MIRANT  BOWLINE, LLC** |
|------------|--------------------------|
| ** ** | ** **               |
| ** ** | ** **               |
|       | By:                      |   |   |
|       |                     | Its: |   |   |
| ** ** | ** **               |
| ** ** | ** **               |
| ** ** | **MIRANT  NY-GEN, LLC**  |
| ** ** | ** **               |
| ** ** | ** **               |
|       | By:                      |   |   |
|       |                     | Its: |   |   |
| ** ** | ** **               |
| ** ** | ** **               |
| ** ** | **MIRANT  LOVETT, LLC**  |
| ** ** | ** **               |
| ** ** | ** **               |
|       | By:                      |   |   |
|       |                     | Its: |   |   |

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**SCHEDULE I**

**Definitions and Interpretation**

1.             DefinedTerms.

“Affiliate” of a referenced Person shall mean(a) another Person controlling, controlled by or under common control with suchreferenced Person, (b) any other Person beneficially owning or controlling tenpercent (10%) or more of the outstanding voting securities, rights or interestsin the capital, distributions or profits of the referenced Person or (c) anyofficer or director of or partner in the referenced Person.  The terms “control”, “controlling”,“controlled” and the like shall mean the direct or indirect possessionof the power to direct or cause the direction of the management or policies ofa Person or the disposition of its assets or properties, whether throughownership, by contract, arrangement or understanding, or otherwise. None of theParties shall be deemed to be Affiliates of each other.

“Agreement” means the Cross-IndemnificationAgreement among Mirant Bowline LLC, Mirant NY-Gen, LLC, and Mirant Lovett, LLCdated the      day of                 ,2007.

“Applicable Law” shall mean any applicable law,including (without limitation) any applicable: (a) federal, state, provincial, territorial, county, municipal, local orother governmental or quasi-governmental law, statute, ordinance, rule,regulation, requirement, policy or use or disposal classification orrestriction or interpretation thereof; (b) judicial, administrative or othergovernmental or quasi-governmental order, injunction, writ, judgment,decree, ruling, interpretation, guideline, finding or other directive; (c) commonlaw or other legal or quasi-legal precedent; (d) arbitrator’s, mediator’sor referee’s decision, finding, award or recommendation; or (e) charter, rule,regulation or other organizational or governance document of any nationalsecurities exchange or market or other self-regulatory or governing body ororganization; in each case (i) whether domestic or foreign, (ii) whether atlaw, in equity or otherwise, and (iii) as the same may be adopted,supplemented, modified, amended, restated or replaced from time to time or anycorresponding or succeeding provisions thereof.

“Authority” shall mean any governmental, quasi-governmentalor industry authority, including (without limitation) any federal, state,provincial, territorial, county, municipal, local or other government orgovernmental or quasi-governmental agency, board, branch, bureau,commission, court, department or other instrumentality or political unit orsubdivision, whether domestic or foreign, any national securities exchange ormarket, or any accreditation, self-regulatory or governing body, center,commission or similar organization.

“Business Day” means a day other than Saturday,Sunday or a day on which banks are legally required or permitted to be closedfor business in the State of New York.

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“Indemnitee(s)” has the meaning attributedthereto in Section 2(b) of the Agreement.

“Indemnitor(s)” has the meaning attributedthereto in the recitals to the Agreement.

“Indemnity Obligation(s)” shall mean anIndemnitor’s obligations to indemnify and reimburse any Indemnitees for any andall of their respective Losses under this Agreement.

“Loss” shall mean any loss, damage, injury,harm, detriment, decline in value, lost opportunity, liability, exposure,claim, demand, action, suit, proceeding, arbitration, mediation, investigation,audit, review, payment, settlement, judgment, award, fine, penalty, tax, fee,charge, cost or expense (including, without limitation, any liability payment,any disbursement, expense or fee or other amount paid to any attorney or otherprofessional advisor, and any costs of investigation or remediation).

“O&R” has the meaning attributed thereto inthe recitals to the Agreement.

“O&R Settlement Agreement” has the meaningattributed thereto in the recitals to the Agreement.

“Party” and “Parties” shall have themeanings respectively assigned to them in the opening paragraph of theAgreement.

“Person” shall include (without limitation) anymanner of association, business trust, company, corporation, estate,governmental or other Authority, group (including one under Section 13(d)(3) ofthe Securities Exchange Act),  jointventure, limited liability company, natural person, partnership, syndicate,trust or other entity.

“Proceeding” has the meaning attributed theretoin Section 2(e) of the Agreement.

“Representative” of a referenced Person shallmean any subsidiary or other Affiliate of the referenced Person or anyequity-holder, partner, equity holder, member, director, officer, manager,employee, subcontractor or consultant, agent, attorney, accountant, financialor other advisor or representative of the referenced Person or of any of itssubsidiaries or other Affiliates.

2.             Rules ofInterpretation.

In the Agreement, the meaning of each capitalized termor other word or phrase defined in singular form also shall apply to the pluralform of such term, word or phrase, and vice versa; each singular pronoun shallbe deemed to include the plural variation thereof, and vice versa; and eachgender specific pronoun shall be deemed to include the neuter, masculine andfeminine, in each case as the context may permit or required.  Any table of contents or caption, section orother heading is for reference purposes only and shall not affect the meaningor interpretation of such document; and each reference to any Section,subsection, and the like shall mean those of or attached to such documentunless otherwise expressly provided.  Theword “event” shall include (without limitation) any 

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event, occurrence, circumstance, condition or state offacts; the words “hereof”, “herein” and “hereunder” andwords of similar import shall refer to such document as a whole and not to anyparticular provision of such document; the words “include”, “includes”and “including” shall be deemed to be followed by the phrase “(withoutlimitation)”, whether or not so stated, and in any event shall not in any way(i) limit the generality of the provision preceding such word, (ii) precludeany other applicable item encompassed by the provision preceding such word, or(iii) be deemed or construed to do so; and unless the context clearly requiresotherwise, the word “or” shall have both the inclusive and alternativemeaning represented by the phrase “and/or”.  Reference to any Applicable Law, whethergenerically or specifically, shall mean such Applicable Law as adopted,supplemented, modified, amended, restated, codified, replaced or reenacted, inwhole or in part, and then in effect; and each reference to any instrument,Agreement or other document (including any defined term) in this agreementshall mean such instrument, lease, agreement or other document as the same mayhave been and hereafter may be executed, amended, restated, replaced,supplemented or otherwise modified.

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**SCHEDULEII**

**Addressesof the Parties**

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