Exhibit 10.21(b)


 


POWER SALE, FUEL SUPPLY 

AND SERVICES AGREEMENT


 


THIS  POWER SALE, FUEL SUPPLY AND SERVICES AGREEMENT (this “Agreement”),
dated as of January 1, 2004 (the “Effective Date”), is by and between MIRANT AMERICAS ENERGY MARKETING, LP, a Delaware limited
partnership (“MAEM”), and MIRANT PEAKER, LLC, a Delaware limited liability company
(the “Project Company”).


 


RECITALS


 


WHEREAS, Project Company owns and operates certain of
the electric generating units at the Chalk Point Generating Station as set
forth on Exhibit A hereto (such units referred to here as the “Generating
Station”);


 


WHEREAS, Project Company desires to contract herein to
sell capacity, electricity and/or ancillary services to MAEM, and MAEM desires
to purchase such capacity, electricity and/or ancillary services on the terms
and conditions set forth herein; and


 


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


 


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


 


ARTICLE 1.


DEFINITIONS


 


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


 


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


 


“Bankruptcy Court” means the United States
Bankruptcy Court, Northern District of Texas, Fort Worth Division.


 


“Chapter 11 Proceeding” means the jointly
administered bankruptcy cases under Chapter 11 of the United States Bankruptcy
Code, 11 U.S.C., of Mirant Corporation and its affiliated debtors, Case No.
03-46590 (DML)11 in the Bankruptcy Court.


 





















 


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


 


“Delivery Point” means either (i) the high side
of the generation step-up transformer located at the Generation Facility, where
it connects to the Transmission Provider’s transmission system; or (ii) such
other point on the Transmission Provider’s transmission system as MAEM and the
Project Company may determine (for all Products delivered from sources other
than the Generating Station).


 


“Effective Date” has the meaning set forth in
the Preamble.


 


“Emission Allowances” means authorizations
under state or federal (as applicable) air quality regulations to emit either
one ton of nitrogen oxides (“NOx”) or sulfur dioxide (“SO2”).


 


“Event of Default” has the meaning set forth in
Section 9.1.


 


“Expenses” has the meaning set forth in Section
8.2.


 


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


 


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


 


“Fuel” means fuel oil or natural gas, as
dictated by context.


 


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


 


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


 


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


 


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


 


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


 


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


 


“Offer” or “Offering” means the
nomination or offering to sell the output of the Generating Station.


 


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


 


“PJM” means the market of PJM Interconnection,
LLC, or its successor.


 


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


 


“Scheduling” or “Schedule” means the
acts of MAEM and/or its designated representatives of notifying, requesting and
confirming to its counterparties and their designated representatives
(including, but not limited to, PJM or any applicable power pool, independent
system operator, Transmission Provider or Transportation Provider) the quantity
and type of Products and/or Fuel to be delivered on any given day or days
during the period of delivery at a specified Delivery Point or the Generating
Station, as applicable.


 


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“Transition Power Agreements” means (i) that
certain Transition Power Agreement for the District of Columbia by and between
MAEM and Potomac Electric Power Company, dated December 19, 2000, as amended by
Amendment No. 1 to Transition Power Agreement dated October, 2001, and by
Amendment No. 2 to Transition Power Agreement dated October 24, 2003, (ii) that
certain Transition Power Agreement for Maryland by and between MAEM and Potomac
Electric Power Company, dated December 19, 2000, as amended by Amendment No. 1
to Transition Power Agreement dated October, 2001, and by Amendment No. 2 to
Transition Power Agreement dated October 24, 2003, and (iii) agreements between
MAEM and third parties to serve load which has migrated from Potomac Electric
Power Company and would otherwise have been supplied under the foregoing
Transition Power Agreements.


 


“Transmission Providers” means the entity or
entities transmitting Products on behalf of Project Company or MAEM to or from
the Delivery Point (including, but not limited to, an independent system
operator or regional transmission organization).


 


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


 


ARTICLE 2.


POWER
SALES


 


2.1           Purchase and Sale of Products.  Project Company shall sell and deliver and
MAEM shall purchase, pay for and receive, or cause to be received, at the
Delivery Point, all Products produced by the Generating Station.  The purchase price payable to Project Company
for any Product purchased or sold hereunder shall be the amount actually
received by MAEM from a third party for such Product.  For purposes of the foregoing sentence, MAEM
shall be deemed to supply the Transition Power Agreements from the PJM market
and shall not be deemed to supply Transition Power Agreements from Project
Company’s Generating Station.  In selling
Products produced by the Generating Station, MAEM shall attempt to maximize Net
Market Revenues for Project Company.


 


2.2           Scheduling
and Offering into PJM.  MAEM shall be
responsible for the Scheduling of the output of the Generating Station.  MAEM may Offer the output of the Generating
Station to any customer (including, but not limited to, PJM or any applicable
control area operator, power pool, independent system operator or Transmission
Provider), and shall be responsible for any such Offering.  Without limitation, all such Scheduling and
Offering strategies shall in each case at all times be consistent with:


 


(a)                                  the
operating parameters and limitations of the Generating Station, as provided by
Project Company to MAEM;


 


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


 


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(c)                                  Project
Company’s scheduled maintenance plans;


 


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


 


(e)                                  PJM
rules and procedures in effect from time to time;


 


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


 


(g)           Fuel
availability;


 


(h)           Good
Utility Practices; and


 


(i)            Operating
protocols agreed to from time to time by the Parties.


 


2.3           Transmission and Scheduling.  Project Company shall be responsible for
delivery of Products to the Delivery Point. 
MAEM shall arrange and be responsible for transmission service at and
from the Delivery Point and shall Schedule or arrange for Scheduling services
with its Transmission Providers to receive all Products at the Delivery Point.


 


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


 


2.5           Regulatory Reports.  MAEM will make all quarterly filings to the
Federal Energy Regulatory Commission required for Products produced by the
Generating Station.


 


ARTICLE 3.


FUEL SERVICES


 


3.1           All
Requirements Fuel Supply and Delivery. 
MAEM shall procure and supply to Project Company on an exclusive basis
all Fuel required by the Generating Station in accordance with Good Utility
Practices and the terms and conditions of this Agreement.


 


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3.2           Reimbursement
for Fuel.  Project Company shall
reimburse MAEM for all Fuel delivered to the Generating Station as follows:


 


(a)           Fuel
consisting of natural gas shall be reimbursed at the market price of such gas,
including transportation charges, on the delivery date.


 


(b)           Fuel
consisting of fuel oil shall be reimbursed at MAEM’s cost plus transportation
charges incurred by MAEM.


 


3.3           Transportation
and Scheduling.  Except as otherwise
provided in the Other Fuel Agreements, MAEM shall arrange and be responsible
for transportation service to deliver Fuel to the Generating Station and shall
Schedule or arrange for Scheduling services with its Transportation Providers
to deliver Fuel to the Generating Station.


 


ARTICLE 4.


ADDITIONAL SERVICES


 


4.1           Emissions
Planning and Related Responsibilities. 
Upon Project Company’s request, MAEM shall provide Project Company
emissions planning, in consultation with Project Company, to assist in the
compliance of the Generating Station at all times and on an ongoing basis with
all currently effective emissions requirements, permits and regulations.  Upon Project Company’s request, MAEM will
procure Emission Allowances necessary for the operation of the Generating
Station, and dispose of excess Emission Allowances, which are not needed for
the operation of the Generating Station. 
MAEM will charge Project Company MAEM’s actual cost of acquiring the
Emission Allowances and remit the actual proceeds of any Emission Allowances
sales to Project Company, as adjusted for any gains or losses on emission
hedges and trading activities.


 


4.2           Insurance.  Upon Project Company’s request, MAEM will
procure or assist Project Company in procuring business interruption insurance
and forced outage insurance covering the Generating Station.  The costs of such insurance will be charged
to Project Company.


 


ARTICLE 5


ASSET BOOK


 


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


 


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The Parties may agree to
establish one or more separate asset management books to track and measure the
financial performance of hedges and other transactions for each of Project
Company and Mirant Potomac River, LLC.


 


5.2           Power and Fuel Trading, Power and
Fuel Hedges and Other Transactions. 
MAEM has entered or will enter into third party bilateral contracts,
forward sales, financial products (including but not limited to, hedges, swaps,
contracts for differences and options) and other transactions in connection
with the Products produced by the Generating Station and Fuel required to
operate the Generating Station.  The
costs of such transactions including, without limitation, purchased power
costs, transmission costs, Fuel transportation costs, third party broker costs,
transaction fees and incremental credit costs, and revenues related to such
activities will be charged to or paid to Project Company and included in the
Asset Book.  The costs and revenues associated
with the hedges and other transactions in the Asset Book will be charged to or
paid to Project Company, as such costs and revenues are actually incurred or
received by MAEM (as is further described in Section 8.2).


 


ARTICLE 6.


TERM AND TERMINATION


 


6.1           Term.  The initial term of this Agreement shall
commence on the Effective Date and shall continue, unless earlier terminated
pursuant to its terms, until December 31, 2004. The Parties shall negotiate in
good faith to extend this Agreement.


 


6.2           Early
Termination Event.


 


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


 


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


 


(c)           Either Party may terminate this
Agreement upon thirty (30) days written notice to the other Party.


 


6.3           Obligations upon Termination.


 


(a)           Upon any termination of this
Agreement pursuant to Sections 6.1 or 6.2 hereof, MAEM shall endeavor to
(i) terminate any transactions entered into by MAEM in connection with this
Agreement which extend beyond such termination including, but not limited to,
any agreements or transactions entered into pursuant to Section 5.2
hereof, (ii) assign such agreements or transactions to the new owner of the
Generating Station and/or (iii) enter into an agreement with the new owner to
allow MAEM to continue to fulfill its obligations under any


 


7





















 


existing agreements or
transactions.  Any such terminations
and/or assignments shall be consummated in such a manner as to fully release
MAEM and Project Company from any liability or obligation thereunder as of the
termination date and/or the assignment effective date of the applicable
agreements or transactions.  Any costs or
revenues associated with termination payments or settlement amounts as a result
of liquidating and terminating any agreements or transactions shall be charged
to or paid to Project Company as described under Section 5.2.


 


(b)           Upon any termination of this
Agreement pursuant to Section 9.3(a)(ii) hereof, the Parties shall
transfer any outstanding hedges or otherwise settle any transactions entered
into by MAEM in connection with this Agreement which extend beyond such
termination, including but not limited to any agreement or transactions entered
into pursuant to Sections 5.1 and 5.2 hereof.  Any such transfer or settlement shall be
consummated in such a manner as to assign or convey to Project Company the full
benefits and obligations of such agreements or transactions, and to fully
release MAEM from any liability or obligation thereunder.  To the extent that MAEM’s rights or
obligations under any such agreement or transaction may not be assigned without
the consent of a third party, and such consent has not or cannot be obtained
with the commercially reasonable efforts of the Parties, this provision shall
not constitute an agreement to assign the same if an attempted assignment would
constitute a breach thereof or be unlawful, and the Parties, to the maximum
extent permitted by law and such agreement or transaction, shall enter into
such commercially reasonable arrangements as are necessary to fulfill the
intent of this Section 6.3(b). 
The Parties further agree to take such actions, and execute and deliver
such agreements, documents, instruments and certificates, as are necessary to
consummate the transactions contemplated by this Section 6.3(b).


 


ARTICLE
7.


REPRESENTATIONS
AND WARRANTIES


 


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


 


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


 


(b)           Project
Company has full power and authority to enter this Agreement and perform its
obligations hereunder.  The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
limited liability company action and do not and will not contravene its
organizational documents or conflict with, result in a breach of, or entitle
any party (with due notice or lapse of time or both) to terminate, accelerate
or declare a default under, any agreement or instrument to which Project
Company is a party or by which Project Company is bound.  The execution, delivery and performance by
Project Company of this Agreement will not result in any violation by Project
Company of any law, rule or regulation applicable to it.  Project Company is not a


 


8





















 


party to, nor subject to
or bound by, any judgment, injunction or decree of any court or other
governmental entity which may restrict or interfere with the performance of
this Agreement by it.  This Agreement is
Project Company’s legal, valid and binding obligation, enforceable against
Project Company in accordance with its terms, except as (i) such enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors’ rights
generally, and (ii) the remedy of specific performance and injunctive relief
may be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.


 


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


 


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


 


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


 


(f)            Subject to Section 9.2, no Event of
Default or event which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default with respect to Project Company has
occurred and is continuing and no such event or circumstance would occur as a
result of its entering into or performing its obligations under this Agreement
or any other document relating to this Agreement.


 


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


 


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


 


(b)           MAEM
has full power and authority to enter this Agreement and perform its
obligations hereunder.  The execution,
delivery and performance of this Agreement and the consummation of the
Transactions contemplated hereby have been duly authorized by all necessary
limited partnership action by MAEM and do not and will not contravene its
organizational documents or conflict with, result in a breach of, or entitle
any party (with due notice or lapse of time or both) to terminate, accelerate
or declare a default under, any agreement or instrument to which MAEM is a
party or by which MAEM is bound.  The
execution, delivery and performance by MAEM of this Agreement will not result
in any violation by MAEM of any


 


9





















 


law, rule or regulation
applicable to it. MAEM is not a party to, nor subject to or bound by, any
judgment, injunction or decree of any court or other governmental entity which
may restrict or interfere with the performance of this Agreement by it.  This Agreement is MAEM’s legal, valid and
binding obligation, enforceable against MAEM in accordance with its terms,
except as (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors’ rights generally and (ii) the remedy of specific
performance and injunctive relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.


 


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


 


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


 


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


 


(f)            Subject to Section 9.2, no Event of
Default or event which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default with respect to MAEM has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement.


 


ARTICLE 8.


BILLING
AND PAYMENT


 


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


 


8.2           Billing
and Payment. Each month, MAEM shall pay Project Company the positive Net
Market Revenues due for the prior month (or, if Net Market Revenues for such
month are negative, Project Company shall pay MAEM an amount equal to such
negative balance) by wire transfer to the payment address provided by the
recipient on or before the twentieth (20th) day of each month, or if
such day is not a business day, the immediately following business day.  At the time of each monthly payment, MAEM
shall render to Project Company a statement detailing the Net Market Revenues
for the prior month, and shall provide Project Company with supporting


 


10





















 


documentation for each
such monthly statement, identifying calculations underlying such Net Market
Revenues. If PJM later adjusts amounts payable by or paid to MAEM with respect
to transactions in the Asset Book, such amounts will be credited to, or paid
by, Project Company in the month in which MAEM receives notice of the
adjustment.  The preceding sentence shall
survive termination of this Agreement.


 


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


 


“Gross Revenues” means all
revenues for a given period attributed to the Asset Book, including, without
limitation, revenues from (a) sales of all Products from the Generating
Station, (b) other sales of Products, (c) Fuel sales, (d) sales or trades of
excess Emissions Allowances from the Generating Station, (e) financial products
(including, but not limited to, swaps, contracts for differences and options)
purchased for the Asset Book, and (f) forced outage insurance and business
interruption insurance proceeds (to the extent received by MAEM).


 


“Expenses” means all costs attributed to the
Asset Book for such period, including costs reimbursable to MAEM pursuant to
this Agreement for performing the services including, but not limited to, costs
for (i) Fuel, (ii) Emissions Allowances, (iii) financial products (including,
but not limited to, swaps, contracts for differences and options) purchased for
the Asset Book, (iv) broker and/or transaction fees, (v) transmission
congestion contracts for sales from the Generating Station, (vi) forced outage
insurance  costs (to the extent paid by
MAEM), (vii) incremental credit costs for transactions in the Asset Book
consistent with the Collateral Allocation Policy, (viii) transmission and/or
transportation costs for Fuel or energy deliveries; and (ix) other  costs in connection with the services
described in Articles 2, 3 and 4 hereof.


 


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


 


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


 


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ARTICLE 9.


DEFAULTS AND REMEDIES


 


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


 


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


 


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


 


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


 


9.2           BANKRUPTCY.


 


(A)          EACH
PARTY ACKNOWLEDGES AND AGREES THAT THE OTHER PARTY IS A DEBTOR IN THE CHAPTER
11 PROCEEDING.  EACH PARTY FURTHER
ACKNOWLEDGES AND AGREES THAT DURING THE PENDENCY OF SUCH PROCEEDING, THIS
AGREEMENT AND THE PARTIES RIGHTS HEREUNDER SHALL BE SUBJECT TO THE JURISDICTION
OF THE BANKRUPTCY COURT.  IN THE EVENT
THIS AGREEMENT AND/OR THE PARTIES’ RIGHTS HEREUNDER ARE DEEMED TO BE
INCONSISTENT WITH ANY DETERMINATION MADE BY THE BANKRUPTCY COURT IN THE CHAPTER
11 PROCEEDING, THE BANKRUPTCY COURT’S DETERMINATION SHALL PREVAIL.


 


(B)           NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT,
UNTIL SUCH TIME AS EACH PARTY EMERGES FROM THE CHAPTER 11 PROCEEDING THROUGH
THE CONFIRMATION OF A PLAN OF REORGANIZATION, THE CHAPTER 11 PROCEEDING SHALL
NOT CONSTITUTE AN EVENT OF DEFAULT UNDER THIS AGREEMENT; PROVIDED, HOWEVER,
THAT IN THE EVENT THAT (A) EITHER PARTY FILES A MOTION OR REQUEST TO CONVERT
ITS CHAPTER 11 CASE TO A CHAPTER 7 PROCEEDING; (B) THE BANKRUPTCY COURT ENTERS
AN ORDER CONVERTING EITHER PARTY’S CASE FROM A CHAPTER 11 PROCEEDING TO A
CHAPTER 7 PROCEEDING; OR (C) THE BANKRUPTCY COURT ENTERS AN ORDER APPOINTING A
TRUSTEE OR EXAMINER (WITH EXPANDED POWERS) IN EITHER PARTY’S BANKRUPTCY CASE,
ANY SUCH EVENT (A) THROUGH (C) SHALL CONSTITUTE AN EVENT OF DEFAULT UNDER THIS
AGREEMENT WITH RESPECT TO SUCH PARTY OR PARTIES.


 


12





















 


(c)           Each
Party represents, warrants and covenants that:


 


(i)                                     The
Parties have negotiated and entered into this post-petition Agreement in the
ordinary courses of their respective businesses, in good faith, for fair
consideration and on an arm’s length basis;


(ii)                                  Neither
Party shall attempt to effect any right of set-off with respect to this such
post-petition transaction and any pre-petition obligations;


(iii)                               One
of the purposes of this Agreement is to preserve, maintain and enhance its
business; and


(iv)                              The
terms and conditions of this Agreement are fair and reasonable and reflect its
exercise of prudent business judgment consistent with its fiduciary duties as a
debtor-in-possession and are supported by fair consideration and reasonably
equivalent value in money or money’s worth.


 


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


 


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


 


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


 


ARTICLE 10.


FORCE MAJEURE


 


10.1         Force Majeure.  If either Party is rendered wholly or partly
unable to perform its obligations under this Agreement because of a Force
Majeure event, that Party will be excused from whatever performance is affected
by the Force Majeure event to the extent so affected, provided that (a) the
non-performing Party, as soon as practical after knowing of the occurrence of
the Force Majeure event, gives the other Party written notice describing the
particulars of the occurrence; (b) the suspension of performance is of no
greater scope and of no longer duration than is reasonably required by the
Force Majeure event; (c) the non-performing Party uses commercially reasonable
efforts to overcome or mitigate the effects of such occurrence, provided,
however, that this provision shall not require Project Company to deliver, or
MAEM to receive, any Products at points other than the Delivery Point; and (d)
when the non-performing Party is able to resume performance of its obligations
hereunder, that Party shall give the other Party written notice to that effect
and shall promptly resume such performance.


 


13





















 


ARTICLE 11.


MISCELLANEOUS PROVISIONS


 


11.1         Assignment;
Successors and Assigns.  No
assignment or delegation by either Party (or any successor or assignee thereof)
of this Agreement, in whole or in part, shall be made or become effective
without the prior written consent of the other Party in each case obtained,
which consent may not be unreasonably withheld. 
Any assignments or delegations by either Party shall be in such form as
to assure that such Party’s obligations under this Agreement will be honored
fully and timely by any succeeding party.


 


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


 


	
  IF TO PROJECT COMPANY:

  	
  Mirant Peaker, LLC

  
	
   

  	
  1155 Perimeter Center West

  
	
   

  	
  Atlanta, Georgia 30338

  
	
   

  	
  Attention: President

  
	
   

  	
   

  
	
  IF TO MAEM:

  	
  Mirant Americas Energy Marketing, LP

  
	
   

  	
  1155 Perimeter Center West

  
	
   

  	
  Atlanta, Georgia 30338

  
	
   

  	
  Attention: Legal Department

  



 


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


 


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


 


11.4         Compliance
With Laws.  At all times during the
term of this Agreement, the Parties shall comply with all laws, rules,
regulations, and codes of all governmental authorities having jurisdiction over
each of their respective businesses which are now applicable, or may be
applicable hereafter, including without limitation, all special laws, policies,
ordinances, or regulations now in force, as amended or hereafter enacted.  The Parties hereto shall maintain all


 


14





















 


licenses, permits and
other consents from all governmental authorities having jurisdiction for the
necessary use and operation of their respective business.  Nothing herein shall be deemed a waiver of
the Parties’ right to challenge the validity of any such law, rule or
regulation.


 


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


 


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


 


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


 


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


 


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


 


15





















 


IN WITNESS WHEREOF, and intending to be legally bound
hereby, the Parties hereto have caused this Agreement to be duly executed as an
instrument under seal by their respective duly authorized officers as of the
date and year first above written.


 


	
  MIRANT AMERICAS ENERGY

  	
  MIRANT PEAKER, LLC

  	
   

  	
   

  
	
  MARKETING, LP

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By MIRANT AMERICAS

  	
   

  	
   

  	
   

  
	
  DEVELOPMENT, INC.,

  	
   

  	
   

  	
   

  
	
  its General Partner

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
  Name:

  	
  John L. O’Neal

  	
   

  	
  Name:
  Lisa D. Johnson

  	
   

  	
   

  
	
  Title:

  	
  Chief Commercial
  Officer

  	
   

  	
  Title:   President

  	
   

  	
   

  
	
   

  	
  and Vice President

  	
   

  	
   

  	
   

  
									



 


16





















 


EXHIBIT A


Chalk
Point Generating Station


 


	
  Unit

  	
   

  	
  Location

  	
   

  	
  Nameplate

  Capacity

  	
   

  	
  Commercial Operation

  Date

  	
   

  
	
  ECT1

  	
   

  	
  Prince Georges County, MD

  	
   

  	
  18

  	
   

  	
  1967

  	
   

  
	
  ECT2

  	
   

  	
  Prince Georges County, MD

  	
   

  	
  30

  	
   

  	
  1974

  	
   

  
	
  ECT3

  	
   

  	
  Prince Georges County, MD

  	
   

  	
  86

  	
   

  	
  1991

  	
   

  
	
  ECT4

  	
   

  	
  Prince Georges County, MD

  	
   

  	
  86

  	
   

  	
  1991

  	
   

  
	
  ECT5

  	
   

  	
  Prince Georges County, MD

  	
   

  	
  109

  	
   

  	
  1991

  	
   

  
	
  ECT6

  	
   

  	
  Prince Georges County, MD

  	
   

  	
  109

  	
   

  	
  1991

  	
   

  
	
  SMECO CT1

  	
   

  	
  Prince Georges County, MD

  	
   

  	
  84

  	
   

  	
  1990

  	
   

  



 


17