Exhibit
      10.9

    
      	
              CONFIDENTIAL
                TREATMENT

            
	
               REQUESTED
                PURSUANT TO RULE 24b-2

            
	
               

            
	
              Certain
                portions of this exhibit have been omitted pursuant to a request
                for
                confidential treatment under Rule 24b-2 of the Securities Exchange
                Act of
                1934. The omitted materials have been filed separately with the Securities
                and Exchange Commission.

            


    

    
 

    SCHEDULING
      AND ASSET OPTIMIZATION SERVICES AGREEMENT

    BETWEEN

     

    PPM
      ENERGY, INC.

     

    on
      the
      one hand

     

    AND

     

    MMC
      ENERGY NORTH AMERICA LLC

    MMC
      CHULA
      VISTA LLC

    MMC
      ESCONDIDO LLC

     

    on
      the
      other hand

     

    Dated
      June 7, 2006

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SCHEDULING
      AND ASSET OPTIMIZATION SERVICES AGREEMENT

     

    THIS
      SCHEDULING AND ASSET OPTIMIZATION SERVICES AGREEMENT (this “Agreement”), entered
      into this 7th day of June, 2006, is between PPM Energy, Inc., an Oregon
      corporation (“PPM”) on the one hand, and MMC Energy North America LLC, a
      Delaware limited liability company (“MMCN”), MMC Chula Vista LLC, a Delaware
      limited liability company (“MMCC”), and MMC Escondido LLC, a Delaware limited
      liability company (“MMCE”; each and all of MMCN, MMCC and MMCE intending to be
      fully and independently, and jointly and severally, liable for each and all
      of
      the obligations of each and all of MMCN, MMCC and MMCE, and collectively herein
      referred to as “MMC”; each reference to MMC means and includes any one or more
      of MMCN, MMCC, or MMCE as applicable) on the other hand. MMC and PPM are
      sometimes hereinafter referred to collectively as the “Parties” and individually
      as a “Party.”

     

    WHEREAS,
      PPM is in the business of energy and gas marketing, and provides services to
      optimize the fuel use and dispatch of electric generating facilities;
      and

     

    WHEREAS,
      MMC wishes to hire PPM to perform scheduling and asset optimization services
      for
      the Chula Vista Facility and Escondido Facility;

     

    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements set forth
      below and for other good and valuable consideration, the receipt and sufficiency
      of which are hereby acknowledged, the Parties mutually agree as
      follows:

     

    SECTION
      1

    DEFINITIONS;
      RULES OF INTERPRETATION

     

    1.1 Defined
      Terms.
      Unless
      otherwise required by the context in which any term appears, initially
      capitalized terms used herein shall have the following meanings:

     

    “AAA”
is
      defined in Section 21.2.

     

    “Affiliate”
      means, with respect to any entity, each entity that directly or indirectly
      controls, is controlled by, or is under common control with, such designated
      entity. For purposes of this definition, “control” (including, with correlative
      meanings, the terms “controlled by” and “under common control with”), as used
      with respect to any entity, shall mean the possession, directly or indirectly,
      of the power to direct or cause the direction of the management and policies
      of
      such entity, whether through the ownership of voting securities or by contract
      or otherwise.

     

    “Applicable
      Pricing Date” is defined in Section 10.1.

     

    “Budgeted
      Expectations” is defined in Section 6.1.

     

    “Budgets”
      is defined in Section 6.1.

     

    “CAISO”
      means the California Independent System Operator Corporation.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    “CAISO
      Protocols” means all present and future protocols as in effect from time to time
      under the authority of the CAISO.

     

    “CAISO
      Tariff” means all present and future protocols as in effect from time to time
      under the authority of the CAISO.

     

    “CEC”
      means the California Energy Commission.

     

    “Chula
      Vista Facility” is an approximately 35 MW gas-fired electric generating facility
      owned by MMCC located in Chula Vista, California.

     

    “Commercial
      Operation” means for each Facility that the Facility is fully operational and
      reliable and is fully interconnected, fully integrated, and synchronized with,
      and lawfully permitted to deliver wholesale energy to, the System. MMC and
      PPM
      shall agree as to when MMC believes that the Facility has achieved Commercial
      Operation, anticipated to be June 1, 2006. In order to meet the requirements
      for
      Commercial Operation, all of the following events shall have occurred and remain
      true and accurate: (1) Start-Up Testing of the Facility shall have been
      completed; (2) MMC has obtained or entered into all Required Facility Documents
      except where the failure to obtain or enter into a Required Facility Document
      would not result in a Material Adverse Effect and provided PPM copies of any
      or
      all of the Material Facility Documents to the extent reasonably requested by
      PPM; and (3) the Facility is staffed 24 hours a day, seven days a week, or
      with
      remote start capability and otherwise able to dispatch instantaneously to
      precision Net Output and dispatch schedules as provided herein.

     

    “Commercial
      Operation Date” means the date that Commercial Operation is
      achieved.

     

    “Confidential
      Business Information” is defined in Section 20.1.

     

    “Contract
      Interest Rate” means the lesser of the highest rate permitted under applicable
      law or 200 basis points per annum plus the rate per annum equal to the publicly
      announced prime rate or reference rate for commercial loans to large businesses
      in effect from time to time quoted by Citibank, N.A as its “prime rate”. If a
      Citibank, N.A. prime rate is not available, the applicable prime rate shall
      be
      the announced prime rate or reference rate for commercial loans in effect from
      time to time quoted by a bank with $10 billion or more in assets in New York
      City, N.Y., selected by the Party to whom interest is being paid.

     

    “CPUC”
      means the California Public Utilities Commission

     

    “Delivery
      Point” means for the Chula Vista Facility, Otay Substation Radial Tie Line
      TL6929 and for the Escondido Facility, Radial Tie Line 6933.

     

    “Derating”
      means a reduction in Facility capacity or generating capability for any cause,
      including ambient air temperature, relative humidity, Btu heat content of fuel,
      gas pipeline pressure, shaft or other component vibration, excessive bearing
      temperatures, or combustion tuning..

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “EEI
      Agreement” means those certain Edison Electric Institute Master Agreements for
      the Purchase & Sale of Energy, with credit support and gas annexes, entered
      into by and between PPM on the one hand and MMCC and MMCE on the other hand,
      dated May 8, 2006.

     

    “Effective
      Date” is defined in Section 2.1.

     

    “Electric
      System Authority” means each of NERC, CAISO, WECC, a regional or sub-regional
      reliability council, and any other similar council, organization or body of
      recognized standing with respect to the operations of the electric system in
      the
      WECC region or part thereof.

     

    “Energy
      Costs” is defined in Section 6.1. “Energy Revenue” is defined in Section
      6.4.

     

    “Escondido
      Facility” is an approximately 35 MW gas-fired electric generating facility owned
      by MMCE located in Escondido, CA.

     

    “EWG”
      means an “exempt wholesale generator” as defined under PUHCA.

     

    “Facility”
      means the Chula Vista Facility or the Escondido Facility, or both, as
      applicable.

     

    “FERC”
      means the Federal Energy Regulatory Commission.

     

    “FERC
      203
      Application” means an application to FERC of MMC under Section 203 of the
      Federal Power Act for Authorization to Dispose of Jurisdictional
      Facilities.

     

    “FERC
      205
      Notice” means a “Notice of Change in Status” to be filed at FERC by PPM and its
      subsidiaries with market-rate authorization under Section 205 of the Federal
      Power Act referencing PPM’s entering into this Agreement.

     

    “FIN
      46”
is defined in Section 12.11.

     

    “Force
      Majeure” means an event of Force Majeure as defined and described in Section
      18.1.

     

    “Forced
      Outage” means NERC Event Types U1, U2 and U3, as set forth in attached Exhibit
      N, and specifically excludes any Maintenance Outage or Planned
      Outage.

     

    “Fuel
      Price” means the price of gas as calculated pursuant to Section
      10.1.

     

    “Gas
      Day”
means a period of 24 consecutive hours, coextensive with a “day” as defined by
      the SoCalGas or SDG&E, as applicable.

     

    “Gas
      Daily Midpoint Price” is defined in Section 10.1.

     

    “General
      Order 167” means CPUC General Order No. 167 for the Enforcement of Maintenance
      and Operation Standards for Electric Generating Facilities effective September
      2, 2005, as the same may be in effect from time to time.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    “Generation
      Interconnection Agreement” means the agreement entered into between MMC and
      Interconnection Provider for each Facility regarding the Interconnection
      Facilities.

     

    “GMC”
is
      defined in Section 8.1.1.

     

    “Governmental
      Authority” means any supranational, federal, state or other political
      subdivision thereof, having jurisdiction over MMC, PPM or this Agreement,
      including any municipality, township or county, and any quasi-municipal agency
      or district or other entity or body exercising executive, legislative, judicial,
      regulatory or administrative functions of or pertaining to government, including
      any corporation or other entity owned or controlled by any of the
      foregoing.

     

    “Interconnection
      Facilities” means the facilities installed, or to be installed, for the purpose
      of interconnecting the Facility to the System, including electrical transmission
      lines, upgrades, transformers and associated equipment, substations, relay
      and
      switching equipment, and safety equipment.

     

    “Interconnection
      Provider” means SDG&E for the Chula Vista Facility, and SDG&E for the
      Escondido Facility.

     

    “Letter
      of Credit” means an irrevocable standby letter of credit in a form reasonably
      acceptable to PPM, naming PPM as the party entitled to demand payment and
      present draw requests thereunder, which letter(s) of credit: (1) is issued
      by a
      Qualifying Institution; (2) by its terms, permits PPM to draw up to the face
      amount thereof for the purpose of paying any and all amounts owing by MMC
      hereunder; (3) if issued by a foreign bank with a U.S. branch, permits PPM
      to
      draw upon the U.S. branch; (4) permits PPM to draw the entire amount available
      thereunder if such letter of credit is not renewed or replaced at least 30
      business days prior to its stated expiration date; and (5) permits PPM to draw
      the entire amount available thereunder if such letter(s) of credit are not
      increased, replaced or replenished as and when required herein.

     

    “Liquidated
      Damages” is defined in Section 9.1.

     

    “Local
      Transportation Shrinkage” means the Pipeline Shrinkage applicable to the
      SoCalGas or the SDG&E gas pipeline system, as applicable, used to deliver
      gas from the SoCal Border to the applicable Facility, expressed in
      MMBtu.

     

    “Maintenance
      Outage” means NERC Event Type MO, as set forth in attached Exhibit N, and
      includes any Outage that is not a Forced Outage or a Planned
      Outage.

     

    “Market-Place
      Dispatchable” means for each Facility the period of time during which it is
      operated and operational for market-driven dispatch, rather than operational
      dispatch, and shall exclude periods during which a Facility is not in Commercial
      Operation, is being tested or fine-tuned, has an Outage, or is otherwise
      unavailable or only available for operationally driven dispatch, rather than
      market-driven dispatch.

     

    “Material
      Adverse Effect” means any event or condition that (A) actually has, or is
      reasonably likely to have, a significant adverse effect on (i) MMC’s ability to
      own, control or operate a Facility, (ii) PPM’s rights to dispatch the Facility,
      (iii) a Party’s required rights from third parties, or other necessary abilities
      to perform its obligations hereunder, (iv) a Facility’s ability to operate,
      generate and deliver Power Products to the Point of Delivery for transmission
      away from the Point of Delivery, (v) a Facility’s rights to transmit Power
      Products to or through the CAISO, (vi) the business, operations, properties
      assets, prospects or condition (financial or otherwise) of a Party, (B)
***.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    “Material
      Facility Document” means those documents, permits, and authorizations specified
      on Exhibit M.

     

    “Mediation
      Notice” is defined in Section 21.2(a).

     

    “Mediation
      Procedures” is defined in Section 21.2.

     

    “MMC”
is
      defined in the Recitals. 

     

    “MMCC”
is
      defined in the Recitals. 

     

    “MMCE”
is
      defined in the Recitals. 

     

    “MMCN”
is
      defined in the Recitals. 

     

    “Monthly
      Fee” means $***
      per
      month. 

     

    “MW”
      means megawatt.

     

    “MWh”
      means megawatt hour.

     

    “NERC”
      means the North American Electric Reliability Council.

     

    “Net
      Energy Revenue” is defined in Section 6.4.

     

    “Net
      Output” means all Output delivered at the Delivery Point.

     

    “Operational
      Flow Order/Emergency Flow Order Day” or “OFO/EFO” means the Gas Day(s) declared
      by SoCal and or SDG&E as an OFO/EFO Gas Day pursuant to the respective
      tariff.

     

    “Outage”
      means a Forced Outage, Maintenance Outage or Planned Outage. 

     

    “Output”
      means all energy and electricity produced by a Facility.

     

    “Pacific
      Prevailing Time” or “PPT” means Pacific Standard Time or Pacific Daylight Time,
      as applicable on the day in question.

     

    “Party”
      and “Parties” are defined in the Recitals. 

     

    “PPM”
is
      defined in the Recitals.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    “Permits”
      means all of the permits, licenses, approvals, certificates, entitlements and
      other authorizations issued by, and notices and registrations submitted to,
      Governmental Authorities required for the ownership and operation of the
      Facility and occupancy of the Premises, including those specified in Exhibit
      3.2.9, and all amendments, modifications, supplements, general conditions and
      addenda thereto.

     

    “Pipeline
      Shrinkage” means the quantity of gas that SoCalGas or SDG&E, pursuant to
      their applicable tariffs, recover in-kind from their customers/shippers to
      offset gas used in their system operations.

     

    “Pipeline
      Fixed Cost” means any fixed costs, fees, taxes or penalties specified in
      SoCalGas or SDG&E tariffs applicable to the delivery of gas to a
      Facility.

     

    “Pipeline
      Variable Cost” means any variable costs, fees, taxes or penalties specified in
      SoCalGas or SDG&E tariffs applicable to the delivery of gas to a Facility,
      including Pipeline Shrinkage.

     

    “Planned
      Outage” means NERC Event Type PO, as set forth in attached Exhibit N, and
      specifically excludes any Maintenance Outage or Forced Outage.

     

    “Power
      Products” ***.

     

    “Premises”
      means the real property on which the Facility is or will be located.


     

    “Protocols”
      are set forth in Exhibit P.

     

    “Prudent
      Electrical Practices” means any of the practices, methods and acts engaged in or
      approved by a significant portion of the electrical utility industry or any
      of
      the practices, methods or acts, which, in the exercise of reasonable judgment
      in
      the light of the facts known at the time a decision is made, could have been
      expected to accomplish the desired result at the lowest reasonable cost
      consistent with reliability, safety and expedition. Prudent Electrical Practices
      is not intended to be limited to the optimum practice, method or act to the
      exclusion of all others, but rather to be a spectrum of possible practices,
      methods or acts.

     

    “PUHCA”
      means the Public Utility Holding Company Act of 1935, as amended from time
      to
      time and, in the case of full or partial repeal, successor laws and regulations,
      including those governing generation or transmission of
      electricity.

     

    “Qualifying
      Institution” means a commercial bank or trust company organized under the laws
      of the United States or a political subdivision thereof, or a United States
      branch of a foreign bank, with a net worth of at least $500,000,000 and a credit
      rating on its long-term senior unsecured debt of at least “A” by Standard &
Poor’s Ratings Services or “A2” by Moody’s Investors Service, Inc.

     

    “Resource
      Adequacy Requirements” means requirements applicable to California generating
      facilities generally pursuant to those California laws and regulations
      promulgated with the stated intent to ensure that adequate physical generating
      capacity dedicated to serving all load requirements to meet peak demand and
      planning and operating reserves, at or deliverable to locations and at times
      as
      may be necessary to ensure loan area reliability and system reliability, at
      just
      and reasonable rates.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    “Required
      Facility Documents” means all Permits and any other authorizations, rights,
      CAISO certifications and agreements now or hereafter necessary for the operation
      and maintenance of the Facility and the Premises and the generation and
      transmission for energy and receipt of gas, including those set forth in Exhibit
      3.2.9. Nothing set forth in Exhibit 3.2.9 limits the obligations of MMC to
      obtain the Permits required hereunder.

     

    “Requirements
      of Law” means any applicable federal, state and local law, statute, executive
      order, regulation, rule, code or ordinance enacted, adopted, issued or
      promulgated by any federal, state, local or other Governmental Authority or
      regulatory body (including those pertaining to electrical, building, zoning,
      environmental and occupational safety and health requirements).

     

    “SDG&E”
      means San Diego Gas & Electric. 

     

    “Services”
      is defined in Section 4.1.

     

    “SoCalGas”
      means the Southern California Gas Company.

     

    “Standard
      Packages” means full-Gas Day physical deliveries of gas. Any group of contiguous
      Gas Days which are traded as one package shall be deemed a Standard Package
      and
      the quantity of gas delivered on each Gas Day included in such a Standard
      Package shall be the same. Contiguous Gas Days shall be treated as a Standard
      Package if the Parties reasonably expect such Gas Days to be listed next to
      the
      label “Flow date(s):” under the heading “Daily price survey ($/MMBtu)” in the
      applicable Platts Gas Daily publication or its successors. Examples of
      contiguous Gas Days, which are usually traded as one package, are Saturdays,
      Sundays, and Mondays.

     

    “Start
      Costs” is defined in Section 6.2.

     

    “Start-Up
      Testing” means the start-up tests for the Facility.

     

    “System”
      means the electric transmission substation and transmission and/or distribution
      facilities owned, operated or maintained by Transmission Provider, which
      includes the circuit reinforcements, extensions, and associated terminal
      facility reinforcements or additions required to interconnect the Facility,
      all
      as set forth in the Generation Interconnection Agreement.

     

    “Term”
is
      defined in Section 2.1.

     

    “Test
      Energy” means any Output during periods prior to the Commercial Operation
      Date.

     

    “Transmission
      Provider” means CAISO for the Chula Vista Facility, and CAISO for the Escondido
      Facility.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    “Transmission
      Service” means, if applicable, the transmission services pursuant to which the
      Transmission Provider transmits Output from the Delivery Point, as
      applicable.

     

    “Unwind
      Fee” ***.

     

    “WECC”
      means the Western Electricity Coordinating Council.

     

    1.2 Rules
      of Interpretation.

     

    1.2.1. General.
      Unless
      otherwise required by the context in which any term appears, (a) the singular
      includes the plural and vice versa; (b) references to “Articles,” “Sections,”
“Schedules,” “Annexes,” “Appendices” or “Exhibits” (if any) are to articles,
      sections, schedules, annexes, appendices or exhibits hereof, (c) all references
      to a particular entity or an electricity or gas market price index include
      a
      reference to such entity’s or index’s successors and (if applicable) permitted
      assigns; (d) the words “herein,” “hereof” and “hereunder” refer to this
      Agreement as a whole and not to any particular Section or subsection hereof;
      (e)
      all accounting terms not specifically defined herein are to be construed in
      accordance with generally accepted accounting principles in the United States
      of
      America, consistently applied; (f) references to this Agreement include a
      reference to all appendices, annexes, schedules and exhibits hereto, as the
      same
      may be amended, modified, supplemented or replaced from time to time; (g) the
      masculine includes the feminine and neuter and vice versa; (h) “including” means
“including, without limitation” or “including, but not limited to”; and (i) the
      word “or” is not necessarily exclusive.

     

    1.2.2. Terms
      Not to be Construed For or Against Either Party.
      Each
      term hereof shall be construed simply according to its fair meaning and not
      strictly for or against either Party. The Parties have jointly prepared this
      Agreement, and no term hereof shall be construed against a Party on the ground
      that the Party is the author of that provision.

     

    1.2.3. Headings.
      The
      headings used for the sections and articles hereof are for convenience and
      reference purposes only and shall in no way affect the meaning or interpretation
      of the provisions hereof.

     

    1.2.4. Examples.
      Example
      calculations and other examples set forth herein are for purposes of
      illustration only and are not intended to constitute a representation, warranty
      or covenant concerning the example itself or the matters assumed for purposes
      of
      such example. If there is a conflict between an example and the text hereof,
      the
      text shall control.

     

    1.2.5. Joint
      Obligations of MMC.
      Any
      obligation, covenant, waiver, indemnity or representation of or by “MMC” in this
      Agreement, an EEI Agreement, or any document or instrument ancillary hereto
      or
      thereto is without limitation, and an independently enforceable, mutually
      guarantied, joint and several obligation, covenant, waiver, indemnity and
      representation of each and all of MMCC, MMCE and MMCN.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    SECTION
      2

    TERM

     

    2.1 Term.
      This
      Agreement shall become effective on the date hereof (“Effective Date”) and,
      unless earlier terminated as provided herein, shall remain in effect until
      six
      months from the Commercial Operation Date and shall automatically renew
      month-to-month thereafter, until terminated on prior written notice given by
      either Party at least 60 days before the last day of the month in which
      termination is desired to be effective (the “Term”). In the event of a
      termination, any outstanding delivery and/or payment obligations, including
      those committed to by PPM with third parties respecting the Facilities in
      accordance with the Services, shall continue until fully performed or
      discharged. If MMC terminates prior to July 31, 2006, in addition to all other
      amounts due hereunder, MMC shall pay the Unwind Fee.

     

    SECTION
      3

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1 PPM’s
      Representations and Warranties.
      PPM
      represents, covenants, and warrants to MMC that:

     

    3.1.1. Organization.
      PPM is
      duly organized and validly existing under the laws of the State of
      Oregon.

     

    3.1.2. Authority.
      PPM has
      the requisite corporate, legal, and regulatory power and authority to enter
      hereinto and to perform according to the terms hereof.

     

    3.1.3. Corporate
      Actions.
      PPM has
      taken all actions required to be taken by it to authorize the execution,
      delivery and performance hereof and the consummation of the transactions
      contemplated hereby.

     

    3.1.4. No
      Contravention.
      The
      execution and delivery hereof do not contravene any provision of, or constitute
      a default under, any indenture, mortgage, security instrument or undertaking,
      or
      other material agreement to which PPM is a party or by which it is bound, or
      any
      valid order of any court, or any regulatory agency or other body having
      authority to which PPM is subject.

     

    3.1.5. Valid
      and Enforceable Agreement.
      This
      Agreement is a valid and legally binding obligation of PPM, enforceable against
      PPM in accordance with its terms (except as the enforceability hereof may be
      limited by general principles of equity or bankruptcy, insolvency, bank
      moratorium or similar laws affecting credit-ors’ rights generally and laws
      restricting the availability of equitable remedies).

     

    3.2 MMC’s
      Representations and Warranties.
      MMC
      represents, covenants, and warrants to PPM that:

     

    3.2.1. Organization.
      MMCN,
      MMCC, and MMCE are each limited liability companies duly organized and validly
      existing under the laws of Delaware.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    3.2.2. Authority.

     

    (a) MMCC
      (i)
      leases the Chula Vista Facility pursuant to a lease with at least five years’
term remaining from the date hereof; (ii) is not a load-serving entity; (iii)
      has the requisite corporate, legal and regulatory power and authority to enter
      hereinto and to perform according to the terms hereof, including all required
      regulatory authority to make wholesale sales from the Facility; (iv) has the
      power and authority to own and operate its businesses and properties, to own
      or
      lease the Premises and to conduct the business in which it currently engaged;
      and (v) is duly qualified and in good standing under the laws of each
      jurisdiction where its ownership, lease or operation of property or the conduct
      of its business requires such qualification, except in each case in clauses
      (iii), (iv), and (v) where the failure would not result in a Material Adverse
      Effect.

     

    (b) MMCE
      (i)
      owns the Escondido Facility; (ii) is not a load-serving entity; (iii) has the
      requisite corporate, legal and regulatory power and authority to enter hereinto
      and to perform according to the terms hereof, including all required regulatory
      authority to make wholesale sales from the Facility; (iv) has the power and
      authority to own and operate its businesses and properties, to own or lease
      the
      Premises and to conduct the business in which it currently engaged; and (v)
      is
      duly qualified and in good standing under the laws of each jurisdiction where
      its ownership, lease or operation of property or the conduct of its business
      requires such qualification, except in each case in clauses (iii), (iv), and
      (v)
      where the failure would not result in a Material Adverse Effect.

     

    (c) MMCN
      (i)
      owns 100% of the equity interests in MMCC and MMCE; (ii) is not a load-serving
      entity; (iii) has the requisite corporate, legal and regulatory power and
      authority to enter hereinto and to perform according to the terms hereof,
      including all required regulatory authority to make wholesale sales from the
      Facility; (iv) has the power and authority to own and operate its businesses
      and
      properties, to own or lease the property it occupies and to conduct the business
      in which it currently engaged; and (v) is duly qualified and in good standing
      under the laws of each jurisdiction where its ownership, lease or operation
      of
      property or the conduct of its business requires such qualification, except
      in
      each case in clauses (iii), (iv), and (v) where the failure would not result
      in
      a Material Adverse Effect.

     

    3.2.3. Actions.
      MMCC,
      MMCE, and MMCN have each taken all actions required to authorize the execution,
      delivery and performance hereof and the consummation of the transactions
      contemplated hereby.

     

    3.2.4. Familiarity
      with Requirements of Law.
      MMC is
      familiar with the requirements of and can comply with all Requirements of Law,
      including General Order 167.

     

    3.2.5. No
      Contravention.
      The
      execution, delivery, performance and observance by MMCC, MMCE, and MMCN of
      their
      obligations hereunder do not and will not:

     

    (a) contravene,
      conflict with or violate any provision of any material Requirements of Law
      presently in effect having applicability to MMC or any of MMC’s
      members;

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    (b) require
      the consent or approval of or material filing or registration with any
      Governmental Authority or other person other than such consents and approvals
      which are (i) set forth in Exhibit 3.2.9 or (ii) required in connection with
      the
      operation or ownership of the Facility, described in Exhibit 3.2.9 and expected
      to be obtained in due course;

     

    (c) Except
      to
      the extent it would not result in a Material Adverse Effect, result in a breach
      of or constitute a default under any material agreement, instrument or
      undertaking to which MMC is a party or by which the Premises or MMC is
      bound.

     

    3.2.6. Valid
      and Enforceable Agreement.
      This
      Agreement is a valid and legally binding obligation, enforceable in accordance
      with its terms (except as the enforceability hereof may be limited by general
      principles of equity or bankruptcy, insolvency, bank moratorium or similar
      laws
      affecting creditors’ rights generally and laws restricting the availability of
      equitable remedies).

     

    3.2.7. Litigation.
      No
      litigation, arbitration, investigation or other proceeding is pending or, to
      the
      best of MMC’s knowledge, threatened against any of MMCN, MMCC or MMCE, or
      against any of their members or managers with respect hereto or the transactions
      contemplated hereunder.

     

    3.2.8. Accuracy
      of Information.
      No
      exhibit, contract, report or document furnished by MMC to PPM in connection
      with
      this Agreement, or the negotiation or execution hereof, contains any material
      misstatement of fact or omits to state a material fact or any fact necessary
      to
      make the statements contained therein not misleading.

     

    3.2.9. Required
      Facility Documents.
      All
      Required Facility Documents are listed on Exhibit 3.2.9, are held by MMC and
      are
      valid and in full force and effect with any applicable appeal periods having
      expired. Pursuant to the Required Facility Documents, MMC holds as of the
      Effective Date, or will hold by the Commercial Operation Date, and covenants
      that it will hold during the Term, all rights and entitlements necessary to
      own
      and operate the Facility and to perform its duties under and deliver Net Output
      to PPM in accordance with this Agreement. No unusual or burdensome conditions
      are expected by MMC to be placed upon, or created by, any of the Required
      Facility Documents and the anticipated operation of the Facility complies with
      all applicable restrictive covenants affecting the Premises and all Requirements
      of Law.

     

    3.3 No
      Other Representations or Warranties.
      Each
      Party acknowledges that it has entered hereinto in reliance upon only the
      representations and warranties set forth in this Agreement, and that no other
      representations or warranties have been made by the other Party with respect
      to
      the subject matter hereof.

     

    3.4 Continuing
      Nature of Representations and Warranties; Notice.
      The
      representations and warranties set forth in this Section are made as of the
      Effective Date and deemed made continually throughout the Term. If at any time
      during the Term, any Party obtains actual knowledge of any event or information
      which causes any of the representations and warranties in this Section 3 to
      be
      materially untrue or misleading, such Party shall provide the other Party with
      written notice of the event or information, the representations and warranties
      affected, and the action, if any, which such Party intends to take to make
      the
      representations and warranties true and correct. The notice required pursuant
      to
      this Section shall be given as soon as practicable after the occurrence of
      each
      such event.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    SECTION
      4

    SERVICES

     

    4.1 Services.
      PPM
      will provide, and MMC hereby grants PPM the authority to perform and provide,
      the following scheduling and asset optimization services to MMC for each
      Facility from and after the Commercial Operation Date for such facility (the
      “Services”): PPM will manage the daily and intraday interface of the Facilities
      with the fuel and electricity marketplaces, including with the CAISO, bilateral
      electricity and natural gas markets and the pipelines serving the Facilities.
      The Services shall include:

     

    4.1.1. Facility
      Dispatch. Subject
      to the parameters specified by MMC and the availability of each respective
      Facility on a day ahead basis (as day ahead is defined in the WECC preschedule
      calendar), as determined in MMC’s sole discretion in conformity with the terms
      hereof, PPM will submit energy and capacity bids and offers for the Facilities
      to the CAISO, serve as each Facility’s (or MMC’s, as applicable) Scheduling
      Coordinator, schedule the dispatch of the Facilities with the CAISO, communicate
      Outages and Deratings to the CAISO, and coordinate any dispatch with each
      Facility’s manager, receiving and validating the CAISO invoices.

     

    4.1.2. Gas
      Scheduling.
      PPM
      will schedule and ship gas for each Facility, and manage any imbalances and
      pooling on natural gas pipelines created by each Facility.

     

    4.1.3. Energy
      Purchases.
      PPM
      will purchase from MMC (and MMC will sell to PPM), act as MMC’s agent with
      respect to (which agency MMC grants and PPM accepts), transact in its own or
      MMC’s name as permitted under applicable law, and otherwise manage the
      Facilities’ Power Products. As determined appropriate by PPM, such transactions,
      including those under Section 6.7.2, will be documented as transactions under
      the EEI Agreements. PPM may at any time determine that any one or more, or
      all,
      transactions respecting energy or capacity generated by the Facility shall
      be
      sold to PPM as transactions pursuant to the EEI Agreements.

     

    4.1.4. Gas
      Purchases and Control.
      PPM
      will control all gas usage by the Facilities, sell to MMC, act as MMC’s agent
      and/or contract marketer with respect to, acquire and transact in its own or
      MMC’s name as permitted under applicable law, and/or otherwise manage the
      Facilities’ gas requirements, and have all rights of MMC with respect to
      imbalances, pooling and otherwise on natural gas pipelines, and may acquire
      gas
      in MMC’s name, or transport in PPM’s name, so shipper will have title and all
      applicable law is otherwise complied with. PPM may at any time determine, in
      compliance with the foregoing, that any one or more, or all, transactions
      respecting gas or gas transportation relating to the Facility shall be sold
      to
      PPM as transactions pursuant to the EEI Agreement.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    4.1.5. CAISO
      and Bilateral Transactions.
      PPM may
      from time to time locate CAISO transactions or bilateral transactions with
      third
      parties having terms longer than day-ahead (as that term is used in the WECC
      Preschedule Calendar); in such event, PPM may request from MMC authority to
      execute such transactions if PPM reasonably expects that the Net Energy Revenues
      therefrom exceed the proportionate Budgeted Expectations for the time period,
      the transaction is of a term of less than five days, as provided in the
      Protocols. PPM acknowledges and agrees that, subject to the provisions of this
      Section 4.1.5 and the Protocols, final approval for the entering into any
      bilateral transaction rests solely with MMC in its sole discretion.

     

    4.2 Direct
      Payment.
      All
      transactions relating to all of the foregoing services shall be structured
      to
      provide that any third party involved pays PPM directly, unless PPM determines
      otherwise.

     

    4.3 Exclusivity.
      PPM
      shall be the exclusive provider of any services within the definition of
      Services to MMC during the Term. PPM shall have the exclusive right to obtain
      Power Products from, and manage the gas supply of, the Facilities for the Term;
      provided, however, that the Parties may mutually agree to specific transactions
      that cover a longer term. During the Term, MMC shall not sell any Power Products
      from the Facility to any party other than PPM. Until the Commercial Operation
      Date for each Facility, the Parties shall continue to perform under that certain
      Confirmation for Energy Management Services during Test Fire Period entered
      into
      May 5, 2006, under the EEI Agreements, without the need for further extending
      amendments of such Confirmation.

     

    4.4 Ultimate
      Control.
      PPM
      shall file a FERC 205 Notice. As MMC shall have ultimate control regarding
      the
      dispatching of the Facilities for the generation of electric energy as provided
      in the Protocols and Sections 2.1 and 5.3, no FERC 203 Application shall be
      filed. If FERC determines that a FERC 203 Application is required, the Parties
      shall either (i) terminate this Agreement (with all payments and performance
      due
      on early termination remaining due to the maximum extent permitted under
      applicable law), (ii) modify or amend this Agreement so as to address any
      concerns of FERC to the extent such amendments or modifications are commercially
      reasonable and comply with Requirements of Law, or (iii) MMC shall file as
      quickly, and the Parties shall pursue successful acceptance of, as commercially
      reasonable, a FERC 203 Application as required by FERC.

     

    SECTION
      5

    FUTHER
      COVENANTS RESPECTING SERVICES AND FACILITIES

     

    5.1 Protocols.
      The
      Parties shall agree upon day ahead and intraday protocols for provision of
      the
      Services. These protocols shall include and not be limited to the
      Protocols.

     

    5.2 Maintenance
      of Authorities.
      MMC
      agrees that it will, and maintain such personnel and authorities, Required
      Facility Documents, rights and authorizations as are necessary to enable it
      to,
      follow any instructions issued to it by PPM in connection with the foregoing,
      including the dispatch instantaneously to precision Net Output and the dispatch
      of schedules.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    5.3 MMC
      Operational Control.
      MMC
      will remain in charge of and responsible for the operations of the Facilities
      and the maintenance of the Premises, and will be responsible to maintain all
      contracts, rights, Required Facility Documents, Requirements of Law, and tariffs
      with third parties and Governmental Authorities as necessary for the operation
      of the Facilities, sale and transportation of natural gas and transmission
      of
      electricity.

     

    5.4 EWG.
      MMC
      covenants that during the Term MMC shall, to the extent required to prevent
      MMC
      or any Facility from being regulated as a “Public Utility” pursuant to PUHCA or
      otherwise, cause MMC, as applicable, to be an EWG. During the Term, MMC shall
      maintain its EWG status (to the extent it is required by law to do so) and
      its
      authority to perform its obligations hereunder.

     

    SECTION
      6

    PRICING
      OF SERVICES

     

    6.1 Energy
      Costs.
      The
      monthly budgets for each Facility for the next eleven months from the Effective
      Date (the “Budgets”) are set forth on Exhibit 6.1 hereto. The Budgets set forth
      certain net revenue expectations agreed to by all Parties (“Budgeted
      Expectations”) and include certain operating costs for said Facility (the costs
      being “Energy Costs”). Budgeted Expectations do not include any revenue derived
      from or attributable to any matter respecting Resource Adequacy Requirements.
      MMC will update Budgets and Budgeted Expectations for each following
      twelve-month period two months before the commencement of such twelve-month
      period. PPM may in its discretion determine at any time before the commencement
      of the applicable twelve-month period that PPM does not wish to provide the
      Services with such a Budget, and terminate this Agreement as of the end of
      the
      then-applicable Budget’s twelve-month period, with MMC owing PPM the Unwind Fee
      and any other amounts due hereunder.

     

    6.2 Inclusions.
      Energy
      Costs at a minimum shall include (but shall not double count any
      component):

     

    6.2.1. the
      Fuel
      Price,

     

    6.2.2. a
      “Variable O&M Charge”***,

     

    6.2.3. “Start
      Costs” ***,

     

    6.2.4. flow
      order penalties attributable to Facility Operations, and

     

    6.2.5. any
      CAISO
      fees or charges incurred as a result of managing and dispatching the Facilities,
      and any other agreed to costs incurred to generate Power Products (excluding
      Liquidated Damages).

     

    6.3 Exclusions.
      Energy
      Costs shall exclude (and so neither Budgeted Expectations nor Energy Costs
      once
      in the Budget may be adjusted on account of) without limitation any and all
      of
      the following:

     

    6.3.1. all
      costs
      of emissions credits, 

    


      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    6.3.2. the
      Monthly Fee,

     

    6.3.3. Liquidated
      Damages,

     

    6.3.4. Pipeline
      Fixed Fees,

     

    6.3.5. any
      other
      costs required to operate the Facilities or comply with applicable law,
      or

     

    6.3.6. any
      other
      item that is not specifically set forth as a liquidated amount in the Energy
      Costs.

     

    6.4 Energy
      Revenue.
      At the
      end of each month, the revenue received by PPM from Power Products, including
      revenue paid by PPM to MMC pursuant to Sections 6.7.2 and 9.1, shall be
      calculated as the “Energy Revenue” for each Facility (but shall not double count
      any component). Energy Revenue less Energy Costs is “Net Energy Revenue” for
      each Facility. Energy Revenue shall include all energy and/or capacity payments
      and other payments from the CAISO and bilateral electricity markets for
      ancillary services or energy (which, among other things, shall include
      congestion charges or related payments otherwise payable to MMC). Amounts
      received by PPM respecting a Facility that are on account of anything other
      than
      firing or committing the firing of the Facility shall be for PPM’s sole account
      and not be included in calculation of Energy Revenue. All other amounts received
      by PPM, including interest on collateral posted by counterparties, shall be
      for
      the account of PPM and excluded from the calculation of Energy Revenue. Costs
      and expenses deducted from amounts received when calculating Net Energy Revenue
      shall include all Energy Costs as defined above.

     

    6.5 Payment
      to PPM.
      Net
      Energy Revenue shall be for the account of MMC, but PPM shall be entitled to
      withhold therefrom (i) its Monthly Scheduling Services Fee, (ii) Pipeline Fixed
      Costs, including any fixed fees or charges payable under the SDG&E or SoCal
      pipeline local distribution company applicable tariff relating to a Facility,
      (iii) Liquidated Damages, plus (iv) with respect to each Facility, ***
      of the
      amount by which Net Energy Revenue exceeds Budgeted Expectations, pro-rated
      for
      the period during which that Facility was Market-Place Dispatchable less than
      ***
      for that
      month, plus (v) all other amounts which MMC has agreed to pay or reimburse
      PPM
      pursuant hereto. If there is no Net Energy Revenue for a given month, PPM shall
      bill and MMC shall pay all the foregoing amounts to PPM as provided in Section
      14. MMC shall further indemnify and hold PPM and its affiliates harmless from
      any and all claims brought by creditors of MMC against PPM or any affiliate
      of
      PPM alleging that PPM or such affiliate is holding moneys of MMC.

     

    6.6 Limitation
      on PPM Obligations and Liabilities.
      Without
      limiting the generality of the limitations on the obligations or liabilities
      of
      PPM set forth elsewhere herein:

     

    6.6.1. PPM
      shall
      not be obligated to pay MMC any money because Energy Revenue does not exceed
      Energy Costs for either Facility, except for purchased Power Products as
      provided in Section 6.7.2 below and reimbursement pursuant to Section 6.7.3
      below.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    6.6.2. Under
      no
      circumstances shall PPM be liable for negative net margins, Energy Costs, or
      a
      Facility’s Net Energy Revenue not meeting or exceeding Budgeted
      Expectations.

     

    6.6.3. PPM
      shall
      have no liability to MMC for any failure to sell Power Products, or use any
      gas,
      during the Term.

     

    6.6.4. PPM
      will
      determine the strategy for bidding Power Products in the CAISO and bilateral
      markets in consultation with MMC as provided in the Protocols, and will not
      be
      liable to MMC in the event MMC subsequently disagrees with PPM’s past
      implementation of such strategy.

     

    6.7 Further
      Terms Respecting Pricing.
      Without
      limiting the foregoing:

     

    6.7.1. In
      the
      event of a negative spark spread, PPM will not, to the best of its reasonably
      exercised commercial judgment, dispatch a Facility unless there is an
      opportunity to receive payments from the CAISO pursuant to the CAISO Tariff
      or
      otherwise cause Energy Revenue to exceed Budgeted Expectations for that Facility
      when viewed in the context of all Power Product transactions. PPM may use
      commercial judgment when dispatching a Facility in determining whether there
      is
      a positive spark spread. As the gas price on intra-day decisions will not be
      known until the index settles two days after the dispatch decision, PPM will
      make a commercially reasonable decision, but will not be held liable for
      dispatching, if subsequent to such decision, a negative spark spread is
      determined to have existed or the conditions set forth in the first sentence
      of
      this Section 6.7.1 applied.

     

    6.7.2. PPM
      may
      purchase any Power Products from MMC at ***.

     

    6.7.3. If
      at a
      given time there is no positive spark spread available in the energy market,
      and
      PPM in its discretion elects to exchange energy on a Facility by scheduling
      day
      ahead or hourly against the Facility’s generating capacity, then PPM will
      reimburse MMC for any ancillary services capacity payment that would have been
      received had the Facility’s capacity been offered in the CAISO ancillary
      services market, as long as the Facility remains available for such period,
      by
      paying the higher of the clearing price of the day ahead ancillary services
      clearing price or the hour ahead ancillary services clearing price for the
      applicable hours. ***.

     

    6.7.4. PPM
      shall
      be responsible for negligent errors or omissions made by it in dispatching
      or
      fuel balancing errors or omissions, but decisions made in good faith in
      accordance with the Protocols or economic outcomes do not constitute
      errors.

     

    6.7.5. Energy
      Revenue includes all amounts received from contracts or other third party
      agreements, as well as regulatorily ordered or legally compelled arrangements,
      for the sale of electricity or capacity from a Facility.

     

    6.7.6. Whether
      it is PPM or MMC who is responsible for the gas tariff and any charges
      associated pursuant to the applicable tariff and as acceptable to PPM’s
      requirements, all costs will be at the expense of MMC and be embedded as
      Pipeline Variable Costs and Pipeline Fixed Costs as applicable. During the
      Term,
      PPM will arrange with SDG&E with respect to PPM serving as a credit
      intermediary for the gas tariff of the Facility, with any such function to
      terminate no later than termination of this Agreement.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    6.7.7. Gas
      may
      be supplied from existing PPM inventory or rights or transactions entered into
      in the bilateral electricity or gas markets by PPM at PPM’s
      discretion.

     

    6.7.8. For
      a
      period ending two weeks after the Effective Date, MMC may amend the Budget
      once
      based upon actual performance of the Facilities, provided that in such event,
      PPM may, if in its discretion these changes are considered by PPM to be
      commercially materially negative with regard to PPM, terminate this Agreement
      effective as soon as reasonably practical for PPM, without further obligation
      on
      the part of the Parties, other than completion of contracts already binding
      the
      output of the Facilities, payment by MMC to PPM of the Unwind Fee, and the
      obligations provided in this Agreement and the EEI Agreements as surviving
      termination shall survive.

     

    6.7.9. Except
      as
      explicitly set forth herein, PPM shall not owe MMC any fees or other payments
      on
      account of this Agreement.

     

    6.8 Monthly
      Scheduling Fee.
      In
      addition to the other amounts due hereunder, MMC shall pay PPM each month the
      Monthly Fee for each month or part thereof during the Term.

     

    6.9 Rates
      Not Subject to Review.
      The
      rates for Services specified herein shall remain in effect until expiration
      of
      the Term, and shall not be subject to change for any reason, including
      regulatory review, absent agreement of the Parties. Neither Party shall petition
      FERC pursuant to the provisions of sections 205 or 206 of the Federal Power
      Act
      (16 U.S.G. § 792 et
      seq.)
      to
      amend such prices or terms, or support a petition by any other person seeking
      to
      amend such prices or terms, absent the agreement in writing of the other Party.
      Further, absent the agreement in writing by all Parties, the standard of review
      for changes hereto proposed by a Party, a non-party or the FERC acting
sua
      sponte shall
      be
      the “public interest” standard of review set forth in United
      Gas Pipe Line Co. v. Mobile Gas Service Corp.,
      350
      U.S. 332 (1956) and Federal
      Power Commission v. Sierra Pacific Power Co.,
      350
      U.S. 348 (1956).

     

    SECTION
      7

    CONDITIONS
      PRECEDENT

     

    7.1 Conditions
      Precedent.
      The
      obligations of the Parties under this Agreement are subject to the following
      conditions precedent:

     

    7.1.1. MMC’s
      proof of ownership and right to conduct itself with the Facilities and their
      interconnection and fuelling in the manner contemplated herein.

     

    7.1.2. The
      Parties meeting all Requirements of Law and having all authorities required
      by
      all applicable Electric System Authorities to perform this Agreement and the
      transactions contemplated herein.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    7.1.3. MMC
      and
      the Facilities will have all required emissions credits, CAISO certifications,
      FERC market-based rate authority, CEC and CPUC authorizations and approvals,
      interconnection agreements and authorizations and Required Facility Documents,
      in the correct name, as are required to perform this Agreement and the
      transactions contemplated hereunder. Specifically, MMC shall be responsible
      and
      confirm to PPM that is has complied with all requirements under sections 8
      and 9
      of the “California ISO Generator Interconnection Manual” located on the internet
      at: http:/lwww.caiso.comldocs/2003/06/09/200306090024421491.doc

     

    7.1.4. MMC’s
      establishment of all record-keeping and other capabil¬ities required for
      compliance with General Order 167.

     

    7.1.5. The
      Parties shall have all such control over any rights to deal with energy and
      gas
      as are required to perform this Agreement.

     

    SECTION
      8

    PPM
      AS SCHEDULING COORDINATOR AND CONTRACT MARKETER

     

    8.1 Scheduling
      Coordinator.
      PPM
      shall be the Scheduling Coordinator with the CAISO for the Facilities (or MMC,
      as applicable) during the term. MMC hereby indemnifies and agrees to hold PPM
      harmless from all liabilities associated with so serving, including any charges
      later assessed to the marketplace or certain classes of participants in the
      marketplace as a whole by CAISO, except to the extent such liabilities result
      from the gross negligence, fraud, or willful misconduct of PPM. PPM will perform
      its scheduling services hereunder as Scheduling Coordina¬tor as defined in the
      CAISO Tariff and pursuant to and consistent with the CAISO tariffs, protocols,
      operating procedures, and scheduling practices. PPM will provide these services
      in accordance with industry practice and the CAISO Protocols.

     

    8.1.1. PPM
      shall
      pass through and bill MMC as part of Energy Costs for all
      CAISO
      fees, penalties and charges attributable to the services provided by PPM to
      MMC
      as Scheduling Coordinator. Subject to the provisions of Section 8.1, MMC shall
      be responsible for all CAISO fees, penalties and charges, including Grid
      Management Charges (“GMC”) applied to deviation amounts, market transmission
      transaction charges, including minimum load cost compensation charges,
      uninstructed energy settlements, congestion charges, allocation of excess and
      intermit-tent resources net deviation allocation charge, and associated credit
      charges.

     

    8.1.2. MMC
      shall
      assume all liability and reimburse PPM for any for any fees, penalties,
      liabilities, assessments, or charges assessed by the CAISO that are part of
      Energy Costs whether billed to PPM or MMC, or that are incurred by PPM as a
      result of MMC’s negligent action failure to abide by the CAISO Tariff and CAISO
      Protocols. MMC and PPM shall cooperate to minimize imbalances and fees,
      liabilities, assessments, or similar charges assessed by the CAISO to the extent
      possible.

     

    8.2 Contract
      Marketer.
      With
      respect to all of MMC’s contracts and rights with respect to gas and gas
      transportation, PPM will be designated as “Contract Marketer” as defined by the
      appropriate tariffs as may be changed from time to time. MMC will indemnify
      and
      hold PPM harmless from all liabilities associated with so serving.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    SECTION
      9

    FURTHER
      COVENANTS RESPECTING ENERGY

     

    9.1 Liquidated
      Damages.
      In
      addition to all other amounts due hereunder, and notwithstanding any provision
      to the contrary in the EEI Agreement or any definition or product definition
      therein or transaction thereunder, MMC shall pay PPM “Liquidated Damages”
representing the cost to PPM of replacement Power Products, local distribution
      company charges or CAISO charges or penalties to cover a Forced Outage from
      a
      Facility, or any part thereof, or fees, penalties, charges, costs or losses
      otherwise incurred by PPM due to any action or inaction by MMC personnel, agents
      or contractors, or failures of MMC automatic dispatch systems, or failure of
      MMC
      internal or external communications, or default under or termination of this
      Agreement, except to the extent such action or inaction was a result of or
      in
      connection with the fraud, willful misconduct, or gross negligence of PPM.
      Without limiting the generality of the foregoing, MMC understands that Power
      Products may be remarketed by PPM in a manner that may render PPM liable to
      others for damages for such Power Products or parts thereof that are financially
      firm even if unit contingent, and that MMC is liable hereunder to reimburse
      PPM
      for any costs or losses for failure to deliver such Power Products or part
      thereof as Liquidated Damages. Liquidated Damages shall also include amounts
      due
      from MMC denominated as such pursuant to Section 10.1. MMC shall be responsible
      for Liquidated Damages for periods respecting which the Facilities are reported
      by MMC as available but do not perform as expected, and result in actual
      Liquidated Damages to PPM.

     

    9.2 Title
      and Risk of Loss of Net Output.
      MMC
      shall deliver Net Output free and clear of all liens, claims and encumbrances.
      Title to and risk of loss of all Net Output shall transfer from MMC to PPM
      upon
      its delivery to PPM at the Delivery Point. MMC shall be deemed to be in
      exclusive control of, and responsible for, any damage or injury caused by,
      all
      energy up to and at the Delivery Point. PPM shall be deemed to be in exclusive
      control of, and responsible for, any damages or injury caused by, Net Output
      from the Delivery Point.

     

    9.3 Further
      Assurances.
      At
      PPM’s request, the Parties shall execute such documents and instruments as may
      be reasonably required to effect recognition and transfer of the Power Products
      to PPM.

     

    SECTION
      10

    FURTHER
      COVENANTS RESPECTING NATURAL GAS,

     

    10.1 Fuel
      Price.
      PPM
      shall cause to be delivered or made available to the Facilities a quantity
      of
      gas equal to 100% of the total quantity of gas in MMbtu actually burned, vented,
      lost, unaccounted for, or otherwise used by the Facilities on such Gas Day
      plus
      Pipeline Variable Costs. PPM shall price all gas sold to the Facility based
      on
      the following parameters. ***.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    SECTION
      11

    PERFORMANCE
      OF THE FACILITY

     

    11.1 Facility
      Dispatch.
      Subject
      to Section 4.4, MMC shall cause the Facilities to perform as directed by PPM
      as
      follows:

     

    11.1.1. Dispatch
      and scheduling of Power Products as determined by PPM pursuant to the terms
      hereof.

     

    11.1.2. Facility
      turbine starts, as determined by PPM.

     

    11.1.3. Facility
      turbine ramp rates, as each Facility is technically capable of
      performing.

     

    11.2 Costs
      and Charges.
      MMC
      shall be responsible for paying or satisfying when due all costs or charges
      imposed in connection with the scheduling and delivery of Net Output up to
      and
      at the Delivery Point, including transmission costs, Transmission Service,
      and
      transmission line losses. Without limiting the generality of the foregoing,
      MMC
      shall bear all costs associated with the modifications to Interconnection
      Facilities or the System (including system upgrades).

     

    11.3 Costs
      of Ownership and Operation.
      Without
      limiting the generality of any other provision hereof, MMC shall be solely
      responsible for paying when due (a) all costs of owning and operating the
      Facility in compliance with existing and future Requirements of Law and the
      terms and conditions hereof, and (b) all taxes and charges (however
      characterized) now existing or hereinafter imposed on or with respect to the
      Facilities, its operation, or on or with respect to emissions or other
      environmental impacts of the Facilities, including any such tax or charge
      (however characterized) to the extent payable by a generator of such
      energy.

     

    11.4 Station
      Service.
      MMC
      shall be responsible for arranging and obtaining, at its sole risk and expense,
      any station service required by the Facilities.

     

    11.5 Taxes.
      MMC
      shall pay or cause to be paid when due, or reimburse PPM for, all existing
      and
      any new sales, use, excise, ad valorem, and any other similar taxes, imposed
      or
      levied by any Governmental Authority on the generation or on the sale of Power
      Products, regardless of whether such taxes are imposed on PPM or MMC under
      Requirements of Law.

     

    11.6 Standard
      of Facility Operation.

     

    11.6.1. General.
      At
      MMC’s sole cost and expense, MMC shall operate, maintain and repair the Facility
      and the Interconnection Facilities in accordance with (i) the applicable and
      mandatory standards, criteria and formal guidelines of FERC and any Electric
      System Authority; (ii) the Required Facility Documents; (iii) the Generation
      Interconnection Agreement; (iv) all Requirements of Law; (v) the requirements
      hereof, and (vi) Prudent Electrical Practice.

     

    11.6.2. CAISO
      Standards.
      PPM and
      MMC shall perform all generation, scheduling and transmission services in
      compliance with all applicable operating policies, criteria, rules, guidelines
      and tariffs of the CAISO and Prudent Electrical Practices. MMC shall comport
      and
      comply with any conditions, modifications, amendments or additions to the
      applicable CAISO Tariff and protocols.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    11.7 Fines
      and Penalties.

     

    11.7.1. MMC
      shall
      pay when due all fines, penalties, or legal costs incurred by MMC or for which
      MMC is legally responsible for noncompliance by MMC, its agents, employees,
      contractors or subcontractors, with respect to any provision hereof, any
      agreement, commitment, obligation or liability incurred in connection with
      this
      Agreement or the Facility or any Requirements of Law, except where such fines,
      penalties or legal costs are being contested in good faith by MMC, its agents
      or
      contractors through appropriate proceedings and MMC has set aside and funded
      adequate reserves or posted security to cover such fines, penalties or legal
      costs in the event of an adverse determination to the extent required under
      generally accepted accounting principles.

     

    11.7.2. If
      fines,
      penalties, or legal costs are assessed against PPM by any Governmental Authority
      due to noncompliance by MMC with any Requirements of Law, or if the performance
      of MMC is delayed or stopped by order of any Governmental Authority due to
      MMC’s
      noncompliance with any Requirements of Law, MMC shall indemnify and hold
      harmless PPM against any and all losses, liabilities, damages, and claims
      suffered or incurred by PPM as a result (except to the extent MMC’s
      non-compliance resulted from or was in connection with the gross negligence,
      fraud, or willful misconduct of PPM).

     

    11.7.3. MMC
      shall
      reimburse PPM for all fees, damages, or penalties imposed on PPM by any
      Governmental Authority, other person or to other utilities for violations to
      the
      extent caused by a default by MMC or a failure of performance by MMC hereunder
      (except to the extent MMC’s default or failure to perform was caused by or
      resulted from the gross negligence, fraud, or willful misconduct of
      PPM).

     

    11.8 Interconnection.
      MMC
      shall be responsible for the costs and expenses associated with interconnection
      of the Facility at the Delivery Point, including the costs of any System
      upgrades beyond the Delivery Point necessary to interconnect the Facility with
      System and to allow the delivery of energy to the Delivery Point. MMC agrees
      that it shall have no claims hereunder against PPM with respect to any
      requirements imposed by or damages caused by (or allegedly caused by) acts
      or
      omissions of Interconnection Provider, in connection with the Generation
      Interconnection Agreement or otherwise.

     

    11.9 Coordination
      with System.
      MMC
      shall be responsible for the coordination and synchronization of the Facility’s
      equipment with the System, and shall be solely responsible for (and shall defend
      and hold PPM harmless against) any damage that may occur as a direct result
      of
      MMC’s breach of the Generation Interconnection Agreement, except to the extent
      MMC’s breach was caused by or was a result of the gross negligence, fraud, or
      willful misconduct of PPM).

     

    11.10 Outages.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    11.10.1. Planned
      Outages.
      Except
      as otherwise provided herein, MMC shall only schedule Planned Outage during
      the
      months of March, April and May, except to the extent a Planned Outage is
      reasonably required (i) to enable a vendor to satisfy a guarantee requirement
      in
      a situation in which the vendor is not otherwise able to perform the guarantee
      work at a time other than during one of the months specified above or (ii)
      to
      comply with Prudent Electrical Practices and such work is not otherwise
      reasonably able to be performed during the above-specified months. MMC shall
      provide PPM with an annual forecast of Planned Outages for each Contract Year
      at
      least one month, but no more that three months, before the first day of that
      Contract Year, and shall promptly update such schedule, or otherwise change
      it
      only to the extent that MMC is reasonably required to change it in order to
      comply with Prudent Electrical Practices.

     

    11.10.2. Maintenance
      Outages.
      If MMC
      reasonably determines that it is necessary to schedule a Maintenance Outage,
      MMC
      shall notify PPM of the proposed Maintenance Outage as soon as practicable
      but
      in any event at least five days before the Outage begins. Upon such notice,
      the
      Parties shall plan the Maintenance Outage to mutually accommodate the reasonable
      requirements of MMC and the service obligations of PPM; provided,
      however,
      that
      MMC shall take all reasonable measures and use best efforts consistent with
      Prudent Electrical Practices to not schedule any Maintenance Outage during
      the
      months of March, April and May. Notice of a proposed Maintenance Outage shall
      include the expected start date and time of the Outage, the amount of generation
      capacity of the Facility that will not be available, and the expected completion
      date and time of the Outage. MMC shall give PPM notice of the Maintenance Outage
      within ten minutes after MMC determines that the Maintenance Outage is
      necessary. PPM shall promptly respond to such notice and may request reasonable
      modifications in the schedule for the Outage. MMC shall use all reasonable
      efforts to comply with any request to modify the schedule for a Maintenance
      Outage provided that such change has no substantial impact on MMC. MMC shall
      notify PPM of any subsequent changes in generation capacity available to PPM
      as
      a result of such Maintenance Outage or any changes in the Maintenance Outage
      completion date and time. As soon as practicable, any notifications given orally
      shall be confirmed in writing. MMC shall take all reasonable measures and
      exercise its best efforts consistent with Prudent Electrical Practices to
      minimize the frequency and duration of Maintenance Outages.

     

    11.10.3. Forced
      Outages.
      MMC
      shall within ten minutes provide to PPM an oral report, via telephone to a
      number specified by PPM, of any Forced Outage of the Facility. This report
      shall
      include the amount of the generation capacity of the Facility that will not
      be
      available because of the Forced Outage and the expected return date of such
      generation capacity. MMC shall within ten minutes update the report as necessary
      to advise PPM of changed circumstances. MMC shall take all reasonable measures
      and exercise its best efforts consistent with Prudent Electrical Practices
      to
      avoid Forced Outages and to minimize their duration.

     

    11.10.4. Notice
      of Deratings and Outages.
      Without
      limiting the foregoing, MMC will inform PPM, via telephone to a number specified
      by PPM, of any major limitations, restrictions, Deratings or Outages known
      to
      MMC affecting the Facility for the following day and will within ten minutes
      update MMC’s notice to the extent of any material changes in this
      information.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    11.11 Expansion.
      If MMC
      elects to increase, at its own expense, the ability of the Facility to deliver
      Net Output through any means, including replacement or modification of turbines
      or related infrastructure, such Facility as modified shall be subject to the
      terms hereof, provided that the Monthly Fee shall be increased by the same
      percentage by which the Net Output capability of the Facility was
      increased.

     

    SECTION
      12

    FACILITY
      INFORMATION

     

    12.1 Metering.
      Metering shall be performed at the location and in the manner specified in
      the
      Generation Interconnection Agreement. All quantities of energy purchased shall
      reflect Net Output. MMC shall bear all costs relating to all metering
      equipment.

     

    12.2 Meter
      Data.
      Upon
      written request by PPM, MMC shall promptly request the Interconnection Provider
      or Transmission Provider in writing to provide any and all meter or other data
      associated with the Facility and Net Output directly to PPM. PPM shall have
      the
      right to provide such data to any Electric System Authority.

     

    12.3 PPM’s
      Right to Monitor.
      During
      the Term, MMC shall permit PPM and its advisors and consultants to perform
      such
      examinations, inspections, and quality surveillance as, in PPM’s reasonable
      judgment, are appropriate and advisable, provided such activities take place
      during business hours and after no less than three days’ written
      notice.

     

    12.4 Exculpation.
      PPM is
      under no obligation to exercise any of these monitoring rights provided for
      herein and, having exercised any such rights, is under no obligation to
      communicate or take action with respect to any information discovered as a
      result of monitoring. Without limiting the generality of the foregoing, although
      PPM will in good faith pass on to MMC information discovered of which it becomes
      aware, PPM shall have no liability to MMC for failing to advise it or
      incorrectly advising it, of associated activities or omissions, including any
      condition, damages, circumstances, infraction, fact, act, omission or disclosure
      discovered or not discovered by PPM with respect to the Facility or any
      contractor.

     

    12.5 Electronic
      Communications.
      MMC
      shall provide such real time data to PPM on the same basis on which MMC receives
      the data (e.g., if MMC receives the data in four second intervals, PPM shall
      also receive the data in four second intervals). MMC shall install a dedicated
      direct communication circuit (which may be by common carrier telephone or
      internet connection) between PPM and the control center in the Facility’s
      control room or such other communication equipment as the Parties may agree.
      MMC
      shall maintain an electronic fault log of operations of the Facility during
      each
      hour of the Term commencing on the Commercial Operation Date. MMC shall provide
      PPM with a copy of the electronic fault log within 30 days after the end of
      the
      calendar month to which the fault log applies.

     

    12.6 Maintenance
      Information.
      MMC
      shall provide to PPM a report summarizing the results of maintenance performed
      during each Maintenance Outage, Planned Outage, and any Forced Outage, and
      upon
      request of PPM any of the technical data obtained in connection with such
      maintenance;

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    12.7 Documents
      to Governmental Authorities.
      After
      sending or filing any statement, application, and report or any document with
      any Governmental Authority or Electric System Authority relating to operation
      and maintenance of the Facility, MMC shall promptly provide to PPM a copy of
      the
      same.

     

    12.8 Notice
      of Material Adverse Events.
      MMC
      shall promptly notify PPM of receipt of written notice or actual knowledge
      by
      MMC of the occurrence of any event of default under any material agreement
      to
      which MMC is a party and of any other development, financial or otherwise,
      which
      would have a material adverse effect on MMC or a Facility.

     

    12.9 Notice
      of Litigation.
      Following its receipt of written notice or actual knowledge of the commencement
      of any action, suit, and proceeding before any court or Governmental Authority
      which would, if adversely determined, materially and adversely affect the
      ability of MMC, MMCC, or MMCE to perform its obligations under this Agreement
      or
      cause a Material Adverse Effect, MMC shall promptly give notice to PPM of the
      same.

     

    12.10 Additional
      Information.
      MMC
      shall provide to PPM such other information respecting the condition or
      operations of MMCC, MMCE or the Facilities as PPM may, from time to time,
      reasonably request.

     

    12.11 Financial
      and Accounting Information.
      If PPM
      or one of its Affiliates determines that, under the Financial Accounting
      Standards Board’s revised Interpretation No. 46, Consolidation of Variable
      Interest Entities (“FIN 46”), it may hold a variable interest in MMC, but it
      lacks the information necessary to make a definitive conclusion, MMC hereby
      agrees to provide sufficient financial and ownership information so that PPM
      or
      its Affiliate may confirm whether a variable interest does exist under FIN
      46.
      If PPM or its Affiliate determines that, under FIN 46, it holds a variable
      interest in MMC, MMC hereby agrees to provide sufficient financial and other
      information to PPM or its Affiliate so that PPM may properly consolidate the
      entity in which it holds the variable interest and/or present the disclosures
      required by FIN 46. PPM shall reimburse MMC for MMC’s reasonable costs and
      expenses, if any, incurred in connection with PPM’s requests for information
      under this Section. Notwithstanding the foregoing, MMC and PPM acknowledge
      and
      agree that, in the event of such a determination, they shall endeavor to make
      such commercially reasonable amendments or modifications to this Agreement
      so as
      to avoid such treatment under FIN 46.

     

    12.12 Access
      Rights.
      Upon
      reasonable prior notice and subject to the prudent safety requirements of MMC,
      MMC shall provide PPM and its authorized agents, employees and inspectors with
      reasonable access during business hours to the Facilities for all
      purposes.

     

    SECTION
      13

    CREDIT

     

    13.1 Default
      Security.
      Within
      five days of the Effective Date, and continuing at all times until 98 days
      following the end of the Term, MMC shall post and maintain in favor of PPM
      a
      Letter of Credit in the amount of $***.
      If MMC
      fails to pay any amount due to PPM within the time provided for payment
      hereunder, PPM shall be entitled to and shall draw upon the Letter of Credit
      from time to time an amount equal to the amount unpaid, and MMC shall be
      required to replenish or reinstate the Letter of Credit up to the amount
      specified in this Section. Without limiting its other remedies hereunder,
      subject to the provisions set forth herein, PPM shall also be entitled to draw
      upon the Letter of Credit for damages arising if this Agreement is terminated
      because of MMC’s default.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    13.2 Annual
      and Quarterly Financial Statements.
      If
      requested by PPM from time to time, MMC shall provide PPM with copies of its
      most recent annual and quarterly financial statements prepared in accordance
      with generally accepted accounting principles; provided, however, to the extent
      such financial statements are, or will be, otherwise publicly available, PPM
      shall obtain the financial statement through such publicly available
      sources.

     

    13.3 Security
      is Not a Limit on MMC’s Liability.
      The
      security contemplated by this Section: (a) constitutes security for, but is
      not
      a limitation of, MMC’s obligations hereunder, and (b) shall not be PPM’s
      exclusive remedy for MMC’s failure to perform in accordance with this
      Agreement.

     

    SECTION
      14

    BILLINGS,
      COMPUTATIONS AND PAYMENTS

     

    14.1 Payment
      Settlement.
      Settlement of all payments shall occur by the 25th
      day of
      the month following the month in which performance was rendered and if such
      25th
      day is
      not a business day then on the next business day occurring after such
      25th
      day;
      provided, however, that all such settlements shall be subject to adjustment
      when
      the true costs are received from the CAISO, generally 90 days from the end
      of a
      month, but in no event shall an adjustment be made more than one year after
      the
      end of the applicable month.

     

    14.2 Offsets.
      PPM may
      offset any payment due hereunder against amounts owing from MMC to PPM pursuant
      hereto or any other agreement between the Parties.

     

    14.3 Interest
      on Late Payments.
      Any
      amounts that are not paid when due hereunder shall bear interest at the Contract
      Interest Rate from the date due until paid.

     

    14.4 Disputed
      Amounts.
      If
      either Party, in good faith, disputes any amount due pursuant to an invoice
      rendered hereunder, such Party shall notify the other Party of the specific
      basis for the dispute and, if the invoice shows an amount due, shall pay that
      portion of the statement that is undisputed, on or before the due date. Any
      such
      notice shall be provided within one year of the date of the invoice in which
      the
      error first occurred. If any amount disputed by such Party is determined to
      be
      due the other Party, or if the Parties resolve the payment dispute, the amount
      due shall be paid within five days after such determination or resolution,
      along
      with interest at the Contract Interest Rate from the date due until the date
      paid.

     

    14.5 Audit
      Rights.
      Each
      Party, through its authorized representatives, shall have the right, at its
      sole
      expense upon reasonable notice and during normal business hours, to examine
      and
      copy the records of the other Party to the extent reasonably necessary to verify
      the accuracy of any statement, charge or computation made hereunder or to verify
      the other Party’s performance of its obligations hereunder. Upon request, each
      Party shall provide to the other Party statements evidencing the quantities
      of
      energy delivered at the Delivery Point. If any statement is found to be
      inaccurate, a corrected statement shall be issued and any amount due thereunder
      will be promptly paid and shall bear interest at the Contract Interest Rate
      from
      the date of the overpayment or underpayment to the date of receipt of the
      reconciling payment. Notwithstanding the foregoing, no adjustment shall be
      made
      with respect to any statement or payment hereunder unless a Party questions
      the
      accuracy of such payment or statement within two years after the date of such
      statement or payment.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    SECTION
      15

    DEFAULTS
      AND REMEDIES

     

    15.1 Defaults
      by Either Party.
      The
      occurrence of any of the following constitutes an event of default by that
      Party:

     

    15.1.1. A
      Party’s
      failure to make a payment when due hereunder if the failure is not cured within
      ten days after such payment is due.

     

    15.1.2. A
      Party
      (i) makes an assignment for the benefit of its creditors; (ii) files a petition
      or otherwise commences, authorizes or acquiesces in the commencement of a
      proceeding or cause of action under any bankruptcy or similar law for the
      protection of creditors, or has such a petition filed against it and such
      petition is not withdrawn or dismissed within 60 days after such filing; (iii)
      becomes insolvent; or (iv) is unable to pay its debts when due.

     

    15.1.3. A
      Party’s
      breach of a representation or warranty made by that Party herein if the breach
      is not cured within 30 days after the non-defaulting Party gives the defaulting
      Party a notice of the default.

     

    15.1.4. An
      Event
      of Default under an EEl Agreement.

     

    15.1.5. A
      Party
      otherwise fails to perform any material obligation imposed upon that Party
      by
      this Agreement if the failure is not cured within 30 days after the
      non-defaulting Party gives the defaulting Party notice of the default; provided,
      however, that, upon written notice from the defaulting Party, this 30 day period
      shall be extended by an additional 60 days if (a) the failure cannot reasonably
      be cured within the 30 day period despite diligent efforts, (b) the default
      is
      capable of being cured within the additional 60 day period, and (c) the
      defaulting Party commences the cure within the original 30 day period and is
      at
      all times thereafter diligently and continuously proceeding to cure the
      failure.

     

    15.2 Defaults
      by MMC.
      The
      occurrence of any of the following constitutes an event of default by
      MMC:

     

    15.2.1. MMC’s
      failure to post, increase, maintain or replenish the Letter of
      Credit.

     

    15.2.2. MMC’s
      default under any agreement with third parties relating to the ownership,
      interconnection, operation, transmission from, maintenance or repair of the
      Facility, and failure to cure such default within the time required under such
      agreement, after the expiration of applicable notice, cure and waiver periods,
      if such default results in a Material Adverse Effect.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    15.2.3. MMC’s
      receipt of notice of foreclosure of the Facility or any part thereof by a
      lender, mechanic or materialman, or any other holder of an unpaid lien or other
      charge or encumbrance if the same results in a Material Adverse
      Effect.

     

    15.2.4. MMC
      otherwise causes a Material Adverse Effect on PPM.

     

    15.2.5. Violation
      of General Order 167.

     

    15.2.6. MMC’s
      sale of any Power Products from a Facility to a party other than
      PPM.

     

    15.2.7. MMC’s
      failure to maintain any Material Facility Document, after the expiration of
      applicable notice, cure and waiver periods.

     

    15.3 Termination
      and Remedies.
      Upon
      the occurrence of, and during the continuation of, an event of default
      hereunder, the non-defaulting Party shall be entitled to all remedies available
      hereunder and at law or in equity, and may terminate this Agreement by notice
      to
      the other Party designating the date of termination and delivered to the
      defaulting Party no less than ten days before such termination date. Further,
      during the continuation of default by MMC, and until it has recovered all
      damages incurred on account of such default by MMC, without exercising its
      termination right, PPM may offset its damages against any payment due MMC.
      The
      rights contemplated by this Agreement are cumulative and not exclusive such
      that
      the exercise of one or more rights shall not constitute a waiver of any other
      rights. In the event of a termination hereof, each Party shall pay or turn
      over
      to the other all amounts due the other hereunder for all periods prior to
      termination, subject to offset by the non-defaulting Party against damages
      incurred by such Party. The provisions of Sections 1, 6.5, 6.7, 8, 9, 11.7,
      11.9, 12.11, 13.1, 14, 15.3, 16, 20, 21 and 25 shall survive the termination
      hereof.

     

    SECTION
      16

    INDEMNIFICATION
      AND LIMITS ON LIABILITY

     

    16.1 Indemnities.

     

    16.1.1. Indemnity
      by MMC.
      MMC
      shall release, indemnify and hold harmless PPM, its directors, officers, agents,
      and representatives against and from the claims of any third party for any
      and
      all loss, fines, penalties, claims, actions or suits, including costs and
      attorney’s fees, both at trial and on appeal, whether or not suit is brought,
      resulting from, or arising out of or in any way connected with (i) the
      performance by MMC of its obligations hereunder, (ii) any violation of General
      Order 167, and (iii) the existence, discovery, release or discharge of any
      environmental contamination on or under the Premises, including any loss, claim,
      action or suit, for or on account of injury, bodily or otherwise, to, or death
      of, persons, or for damage to, or destruction or economic loss of property,
      excepting only to the extent such loss, claim, action or suit as may be caused
      by the fault, fraud, or gross negligence of PPM, its directors, officers,
      employees, agents or representatives.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    16.1.2. Indemnity
      by PPM.
      PPM
      shall release, indemnify and hold harmless MMC, its directors, officers, agents,
      and representatives against and from the claims of any third party for any
      and
      all loss, fines, penalties, claims, actions or suits, including costs and
      attorney’s fees, both at trial and on appeal, whether or not suit is brought,
      resulting from, or arising out of or in any way connected with the performance
      by PPM of its obligations hereunder, including any loss, claim, action or suit,
      for or on account of injury, bodily or otherwise, to, or death of, persons,
      or
      for damage to, or destruction or economic loss of property, excepting only
      to
      the extent such loss, claim, action or suit as may be caused by the fault,
      fraud, or gross negligence of MMC, its directors, officers, employees, agents
      or
      representatives.

     

    16.2 Limitation
      on Damages.
      IN
      NO
      EVENT SHALL THE LIABILITY OF PPM FOR ANY AND ALL BREACHES OR DEFAULTS BY IT
      HEREUNDER OR UNDER AN EEI AGREEMENT, OR UNDER ANY DOCUMENT, INSTRUMENT OR
      TRANSACTION ENTERED INTO IN CONNECTION HEREWITH OR THEREWITH, EXCEED
      $***
      IN THE
      AGGREGATE. EXCEPT TO THE EXTENT SUCH DAMAGES ARE INCLUDED IN ANY LIQUIDATED
      DAMAGES, INDEMNIFICATION FOR THIRD PARTY DAMAGES, OR OTHER SPECIFIED MEASURE
      OF
      DAMAGES EXPRESSLY PROVIDED FOR HEREIN, NEITHER PARTY SHALL BE LIABLE TO THE
      OTHER PARTY FOR SPECIAL, PUNITIVE, INDIRECT, LOST PROFITS OR OTHER BUSINESS
      INTERRUPTION DAMAGES, OR EXEMPLARY OR CONSEQUENTIAL DAMAGES, WHETHER SUCH
      DAMAGES ARE ALLOWED OR PROVIDED BY CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT
      LIABILITY, STATUTE OR OTHERWISE. THERE
      IS
      NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY
      AND
      ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS
      REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE
      ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS
      REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF
      DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE
      LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT
      LAW
      OR IN EQUITY ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY
      PROVIDED HEREIN OR IN A TRANSACTION, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO
      DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND
      EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE
      WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED, IT IS THE INTENT OF THE PARTIES THAT
      THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT
      REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF
      ANY
      PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR
      PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED,
      THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO
      DETERMINE, OR OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE
      DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM
      OR LOSS. NOTHING IN THIS SECTION RESTRICTS OR LIMITS THE OBLIGATIONS OF MMC
      ARISING PURSUANT TO SECTIONS 8 OR 9.1 HEREOF.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

    SECTION
      17

    INSURANCE

     

    17.1 Required
      Policies and Coverages.
      Without
      limiting any liabilities or any other obligations of MMC hereunder, MMC shall
      secure and continuously carry with an insurance company or companies rated
      not
      lower than “A-” by the A.M. Best Company the insurance coverage specified on
      Exhibit 17 during the periods specified on Exhibit 17.

     

    17.2 Certificates
      and Certified Copies of Policies.
      MMC
      shall provide PPM with a certified “true and correct” copy of the insurance
      policies, provisions and endorsements contemplated by Exhibit 17 within ten
      days
      after the date by which such policies are required to be obtained (as set forth
      in Exhibit 17). The certificate (a) shall not include the legend “certificate is
      not evidence of coverage” or any statement with similar effect, (b) the insurer
      shall have a firm obligation to provide PPM with 30 days’ prior written notice
      of coverage modifications (not merely an obligation to “endeavor” or words of
      similar effect), and (c) shall be endorsed by a person who has authority to
      bind
      the insurer. Within 30 days after the date by which such policies are required
      to be obtained, MMC shall provide PPM with a certified “true and correct” copy
      of the insurance policies, provisions and endorsements contemplated by Exhibit
      17. If any coverage is written on a “claims-made” basis, the certification
      accompanying the policy shall conspicuously state that the policy is “claims
      made.”

     

    SECTION
      18

    FORCE
      MAJEURE

     

    18.1 Definition
      of Force Majeure.
“Force
      Majeure” or “an event of Force Majeure” means an event that (a) is not
      reasonably anticipated as of the date hereof, (b) is not within the reasonable
      control of the Party affected by the event, (c) is not the result of such
      Party’s negligence or failure to act, and (d) could not be overcome by the
      affected Party’s use of due diligence in the circumstances. Force Majeure
      includes, but is not restricted to, events of the following types (but only
      to
      the extent that such an event, in consideration of the circumstances, satisfies
      the tests set forth in the preceding sentence): acts of God; fire; explosion;
      civil disturbance; sabotage; action or restraint by court order or Governmental
      Authority not arising out of failure to obtain a Required Facility Document
      (as
      long as the affected Party has not applied for or assisted in the application
      for, and has opposed to the extent reasonable, such court or government action).
      Notwithstanding the foregoing, none of the following constitute Force Majeure:
      (i) Fuel Cost or availability of fuel to operate the Facility; (ii) economic
      hardship, including lack of money; (iii) for an MMC claim of Force Majeure,
      delay or failure of MMC to obtain any Required Facility Document; (iv) MMC’s
      ability to sell the Power Products at a price greater than the price set forth
      in this Agreement; or (v) a Forced Outage not caused by a Force Majeure
      event.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

     

    18.2 Force
      Majeure Does Not Affect Other Obligations.
      No
      obligations of either Party that arose before the Force Majeure causing the
      suspension of performance or that arise after the cessation of the Force Majeure
      shall be excused by the Force Majeure. The Monthly Fee shall continue to be
      due
      and payable during the pendency of a Force Majeure. In no event shall a Force
      Majeure or a Forced Outage excuse MMC from paying Liquidated Damages or the
      Unwind Fee whenever applicable.

     

    SECTION
      19

    NOTICES

     

    19.1 Addresses
      and Delivery Methods.
      All
      notices, requests, statements or payments shall be made to the addresses set
      out
      below. Notices required to be in writing shall be delivered by letter, facsimile
      or other documentary form. Notice by facsimile or hand delivery shall be deemed
      to have been given when received or hand delivered. Notice by overnight mail
      or
      courier shall be deemed to have been given on the date and time evidenced by
      the
      delivery receipt.

     

    
      	
              To
                MMC

            	
              Denis
                Gagnon

              Chief
                Financial Officer

              MMC
                Energy, Inc.

              26
                Broadway, Suite 907

              New
                York, NY 10004

              Telefacsimile:
                (212) 785-7640 fax

            
	 	 
	
              with
                a copy to: 

            	
              Dean
                M. Colucci, Esq.

              DLA
                Piper Rudnick Gray Cary US LLP

              1251
                Avenue of the Americas

              New
                York, New York 10020

              Telefacsimile:
                (212) 884-8494

            
	 	 
	
              To
                PPM:

            	
              PPM
                Energy, Inc.

              1125
                NW Couch Street

              Suite
                700

              Portland,
                OR 97209

              Attention:
                Contract Administration 

              Telefacsimile:
                (503) 796-6937

            
	 	 
	
              with
                a copy to:

            	
              PPM
                Energy, Inc.

              1125
                NW Couch Street

              Suite
                700

              Portland,
                OR 97209

              Legal
                Department

              Attention:
                Christian Yoder, Esq.

              and
                Jeremy D. Weinstein, Esq.

              Telefacsimile:
                (503) 796-6907 and (925) 943-3105

            


    

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

     

    19.2 Changes
      of Address.
      The
      Parties may change any of the persons to whom such notices are addressed, or
      their addresses, by providing written notices thereof in accordance with this
      Section.

     

    SECTION
      20

    CONFIDENTIALITY

     

    20.1 Confidential
      Business Information.
      The
      following constitutes “Confidential Business Information,” whether oral or
      written: (a) the Parties’ proposals and negotiations concerning this Agreement,
      made or conducted prior to the date hereof, (b) this Agreement and the terms
      hereof, (c) information provided hereunder, (d) the matters learned by MMC
      in
      connection with performance of the Protocols, (e) the matters learned by PPM
      in
      connection with the Facilities’ operations, and (f) any information ever
      delivered by PPM to MMC relating to the market prices of energy and
      methodologies for their determination or estimation. MMC and PPM each agree
      to
      hold such Confidential Business Information wholly confidential. Such
      Confidential Business Information may only be used by the Parties for purposes
      related to the approval, administration or enforcement hereof and for no other
      purpose.

     

    20.2 Duty
      to Maintain Confidentiality.
      Each
      Party agrees not to disclose Confidential Business Information to any other
      person (other than its Affiliates, counsel, consultants, lenders, prospective
      lenders, purchasers, prospective purchasers, contractors providing services
      to
      the Facility, employees, officers and directors who agree to be bound by the
      provisions of this Section), without the prior written consent of the other
      Party, provided that either Party may disclose Confidential Business
      Information, if and to the extent such disclosure is required: (i) by
      Requirements of Law, (ii) pursuant to an order of a court or regulatory agency,
      or (iii) in order to enforce this Agreement or to seek approval hereof. In
      the
      event a Party is required by law or by a court or regulatory agency to disclose
      Confidential Business Information, such Party shall to the extent possible
      notify the other Party at least three Business Days in advance of such
      disclosure.

     

    20.3 Proprietary
      Trade Secrets.
      MMC
      understands that this Agreement and the structure of the provision of the
      Services hereunder constitutes a proprietary trade secret and know-how of PPM,
      and that disclosure thereof in any manner other than in the course of the
      performance of its terms would damage if not destroy the value thereof to
      PPM.

     

    20.4 Press
      Releases.
      Each
      Party agrees not to issue any press release or other public announcement of
      the
      relationship of the Parties or the terms hereof without the express prior
      written consent of the other Party.

     

    20.5 Irreparable
      Injury; Remedies.
      Each
      Party agrees that violation of the terms of this Section constitutes irreparable
      harm to the other, and that the harmed Party may seek any and all remedies
      available to it at law or in equity, including injunctive relief.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    SECTION
      21

    DISAGREEMENTS

     

    21.1 Negotiations.
      The
      Parties shall attempt in good faith to resolve all disputes arising out of,
      related to or in connection with this Agreement promptly by negotiation, as
      follows. Any Party may give the other Party written notice of any dispute not
      resolved in the normal course of business. Executives of the Parties at levels
      one level above the personnel who have previously been involved in the dispute
      shall meet at a mutually acceptable time and place within ten days after
      delivery of such notice, and thereafter as often as they reasonably deem
      necessary, to exchange relevant information and to attempt to resolve the
      dispute. If the matter has not been resolved within 30 days after the referral
      of the dispute to such senior executives, or if no meeting of such senior
      executives has taken place within 15 days after such referral, either Party
      may
      initiate litigation as provided hereinafter if neither Party has requested
      that
      the dispute be mediated in accordance with Section 21.2 below. All negotiations
      pursuant to this Section are confidential.

     

    21.2 Mediation.
      If the
      dispute is not resolved within 30 days after the referral of the dispute to
      senior executives, or if no meeting of senior executives has taken place within
      15 days after such referral, either Party may request that the matter be
      submitted to nonbinding mediation. If the other Party agrees, the mediation
      will
      be conducted in accordance with the Construction Industry Arbitration Rules
      and
      Mediation Procedures (Including Procedures for Large, Complex Construction
      Disputes) of the American Arbitration Association (the “AAA”), as amended and
      effective on July 1, 2003 (the “Mediation Procedures”), notwithstanding any
      Dollar amounts or Dollar limitations contained therein.

     

    (a) The
      Party
      requesting the mediation may commence the mediation process with AAA by
      notifying AAA and the other Party in writing (“Mediation Notice”) of such
      Party’s desire that the dispute be resolved through mediation, including
      therewith a copy of the Dispute Notice and the response thereto, if any, and
      a
      copy of the other Party’s written agreement to such mediation.

     

    (b) The
      mediation shall be conducted through, by and at the office of AAA located in
      Portland, Oregon.

     

    (c) The
      mediation shall be conducted by a single mediator. The Parties may select any
      mutually acceptable mediator. If the Parties cannot agree on a mediator within
      five days after the date of the Mediation Notice, then the AAA’s Arbitration
      Administrator shall send a list and resumes of three available mediators to
      the
      Parties, each of whom shall strike one name, and the remaining person shall
      be
      appointed as the mediator. If more than one name remains, either because one
      or
      the other Parties have failed to respond to the AAA’s Arbitration Administrator
      within five days after receiving the list or because one or the other Parties
      have failed to strike a name from the list or because all Parties strike the
      same name, the AAA’s Arbitration Administrator will choose the mediator from the
      remaining names. If the designated mediator shall die, become incapable or,
      unwilling to, or unable to serve or proceed with the mediation, a substitute
      mediator shall be appointed in accordance with the selection procedure described
      above in this Section 21.2(c), and such substitute mediator shall have all
      such
      powers as if he or she has been originally appointed herein.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    (d) The
      mediation shall consist of one or more informal, nonbinding meetings between
      the
      Parties and the mediator, jointly and in separate caucuses, out of which the
      mediator will seek to guide the Parties to a resolution of the dispute. The
      mediation process shall continue until the resolution of the dispute, or the
      termination of the mediation process pursuant to Section 21.2(f). The costs
      of
      the mediation, including fees and expenses, shall be borne equally by the
      Parties.

     

    (e) All
      verbal and written communications between the Parties and issued or prepared
      in
      connection with this Section 21.2 shall be deemed prepared and communicated
      in
      furtherance, and in the context, of dispute settlement, and shall be exempt
      from
      discovery and production, and shall not be admissible in evidence (whether
      as
      admission or otherwise) in any litigation or other proceedings for the
      resolution of the dispute.

     

    (f) The
      initial mediation meeting between the Parties and the mediator shall be held
      within 20 days after the Mediation Notice. Either Party may terminate the
      mediation process upon or after the earlier to occur of (A) the failure of
      the
      initial mediation meeting to occur within 20 days after the date of the
      Mediation Notice, (B) the passage of 30 days after the date of the Mediation
      Notice without the dispute having been resolved, or (C) such time as the
      mediator makes a finding that there is no possibility of resolution through
      mediation.

     

    (g) All
      deadlines specified in this Section 21.2 may be extended by mutual
      agreement.

     

    21.3 Place
      of Contract Formation; Choice of Forum.
      MMC and
      PPM acknowledge and agree that this Agreement has been made and entered into
      as
      of the date first set forth above in the City of Portland, Oregon. Each Party
      irrevocably consents and agrees that any legal action or proceeding arising
      out
      of this Agreement or the actions of the Parties leading up to the Agreement
      shall be brought exclusively in the United States District Court for the
      District of Oregon, Portland Division, or if such court does not have
      jurisdiction, in the Circuit Court for Multnomah County, Oregon. By execution
      and delivery hereof, each Party (a) accepts the exclusive jurisdiction of such
      court and waives any objection that it may now or hereafter have to the exercise
      of personal jurisdiction by such court over each Party, (b) irrevocably agrees
      to be bound by any final judgment (after any and all appeals) of any such court
      arising out of such documents or actions, (c) irrevocably waives, to the fullest
      extent permitted by law, any objection that it may now or hereafter have to
      the
      laying of venue of any suit, action or proceedings arising out of such documents
      brought in such court (including any claim that any such suit, action or
      proceeding has been brought in an inconvenient forum), (d) agrees that service
      of process in any such action may be effected by mailing a copy thereof by
      registered or certified mail, postage prepaid, to such Party at its address
      as
      set forth herein, and (e) agrees that nothing herein shall affect the right
      to
      effect service of process in any other manner permitted by law.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
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    21.4 Settlement
      Discussions.
      The
      Parties agree that no statements of position or offers of settlement made in
      the
      course of the dispute process described in this Section will be offered into
      evidence for any purpose in any litigation between the Parties, nor will any
      such statements or offers of settlement shall constitute an admission or waiver
      of rights by either Party in connection with any such litigation. At the request
      of either Party, any such statements and offers of settlement, and all copies
      thereof, shall be promptly returned to the Party providing the
      same.

     

    21.5 Waiver
      of Jury Trial.
      EACH
      PARTY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES THE RIGHT
      TO
      A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS AGREEMENT, OR ARISING
      OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT EXECUTED
      OR
      CONTEMPLATED TO BE EXECUTED IN CONJUNCTION WITH THIS AGREEMENT, OR ANY COURSE
      OF
      CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
      OF
      ANY PARTY HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO EACH OF THE PARTIES
      FOR ENTERING HEREINTO. EACH PARTY HEREBY WAIVES ANY RIGHT TO CONSOLIDATE ANY
      ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS
      AGREEMENT OR ANY OTHER AGREEMENT EXECUTED OR CONTEMPLATED TO BE EXECUTED IN
      CONJUNCTION WITH THIS AGREEMENT, OR ANY MATTER ARISING HEREUNDER OR THEREUNDER,
      IN WHICH A JURY TRIAL HAS NOT OR CANNOT BE WAIVED.

     

    SECTION
      22

    GENERAL

     

    22.1 Parties
      not Joint Venturers.
      Nothing
      contained herein creates an association, trust, partnership or joint venture
      or
      imposes a trust, partnership or fiduciary duty, obligation or liability on
      or
      between the Parties.

     

    22.2 Non-Reliance.
      The
      Parties acknowledge and understand that PPM is not acting as a financial,
      investment or commodity trading advisor for MMC and has not given MMC directly
      or indirectly any assurance, guaranty or representation whatsoever as to the
      merits of this Agreement or any transaction or expected performance of any
      transaction. MMC acknowledges and understands that the Services and arrangements
      set forth herein are not exclusive to MMC and that PPM may transact in a manner
      similar as set forth herein with any other third party. MMC is not relying
      upon
      any advice or representations, whether written or oral, of PPM other than the
      representations expressly set forth in an EEl Agreement or this Agreement.
      MMC
      has made and will make its own decisions, including decisions regarding the
      suitability of this Agreement, based upon its own judgment and upon the advice
      from such professional advisors as it deems necessary to consult. In the event
      that any Services or obligation set forth in this Agreement jeopardize PPM’s
      FERC market-based rate tariff, PPM shall be permitted to terminate this
      Agreement immediately without fault or penalty.

     

    22.3 Choice
      of Law.
      This
      Agreement shall be interpreted and enforced in accordance with the laws of
      the
      state of Oregon, excluding any choice of law rules that may direct the
      application of the laws of another jurisdiction.

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

     

    22.4 Legal
      Compliance.
      The
      Parties do not intend to violate any laws governing the subject matter hereof.
      If any of the terms hereof are determined to be invalid, illegal or void as
      being contrary to any applicable law or public policy, all other terms of this
      Agreement shall remain in effect. The Parties shall use best efforts to amend
      this Agreement to reform or replace any terms determined to be invalid, illegal
      or void, such that the amended terms (a) comply with and are enforceable under
      applicable law, (b) give effect to the intent of the Parties in entering
      hereinto, and (c) preserve the balance of the economics and equities
      contemplated by this Agreement in all material respects.

     

    22.5 Further
      Assurances.
      The
      Parties shall execute and deliver such further documents and instruments and
      take such further action as may reasonably be required to fulfill the essential
      intent and purposes hereof, and to comply with its terms.

     

    22.6 Waivers.
      No
      waiver of any provision hereof shall be effective unless the waiver is set
      forth
      in a writing that (a) expressly identifies the provision being waived, and
      (b)
      is signed by the Party waiving the provision. A Party’s waiver of one or more
      failures by the other Party in the performance of any of the provisions hereof
      shall not be construed as a waiver of any other failure or failures, whether
      of
      a like kind or different nature.

     

    22.7 Restriction
      on Assignments.
      Except
      as expressly provided in this Section 22, neither Party may assign this
      Agreement or any of its rights or obligations hereunder without the prior
      written consent of the other Party.

     

    22.8 Integration
      Clause.
      This
      Agreement and the EEI Agreements represent the entire agreement between the
      Parties and it supersedes all prior agreements, proposals, representations,
      negotiations, discussions or letters, whether oral or in writing, regarding
      the
      subject matter hereof. In the event of a conflict between this Agreement and
      the
      EEI Agreement, this Agreement will prevail. No modification hereof shall be
      effective unless it is in writing and signed by all Parties.

     

    IN
      WITNESS WHEREOF, the Parties have caused this Agreement to be executed in their
      respective names as of the date first above written.

     

    
      
        	
                MMC
                  ENERGY NORTH AMERICA LLC

              	
                PPM
                  ENERGY, INC.

              
	
                a
                  Delaware limited liability company

              	
                an
                  Oregon corporation

              
	 	 
	 	 
	
                By:     /s/
                  Karl W.
                  Miller                                      
                  

              	
                By:    /s/
                  Trevor
                  Mihalik                              
                  

              
	
                Karl
                  W. Miller

              	
                Trevor
                  Mihilik

              
	
                Chief
                  Executive Officer

              	
                Vice
                  President, Controller

              


      

       

      

        ***Confidential
          Information has been omitted and filed separately with the Securities and
          Exchange Commission pursuant to a confidential treatment request.


      

      
        
           

        

        
          35

          
            

          

        

        
           

        

      

       

      
        	 	 
	
                MMC
                  CHULA VISTA LLC

              	
                MMC
                  ESCONDIDO LLC

              
	
                a
                  Delaware limited liability company 

              	
                a
                  Delaware limited liability company

              
	 	 
	 	 
	
                By:   /s/
                  Karl W.
                  Miller                   
                  

              	
                By:  
                  /s/
                  Karl W.
                  Miller                         
                  

              
	
                Karl
                  W. Miller

              	
                Karl
                  W. Miller

              
	
                Chief
                  Executive Officer

              	
                Chief
                  Executive Officer

              


      

    

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

     

    EXHIBIT
      M

     

    LIST
      OF
      MATERIAL FACILITY DOCUMENTS

     

    Interconnection
      Agreements:

     

    
      	 	
              ·

            	
              Dispersed
                Generating Company, LLC’s (assignor & successor-in-interest of RAMCO)
                release of assignment of SDG&E Interconnection Agreement &
                Expedited Interconnection Facilities Agreement to MMC Chula Vista,
                LLC.
                & MMC Escondido, LLC. Dated
                4/14/2001.

            


    

     

    
      	 	
              ·

            	
              Historical
                notice to FERC - Expedited Interconnection Facilities Agreement between
                SDG&E and RAMCO, Inc.. Covers RAMCO Escondido facility. Dated
                4/26/2001.

            


    

     

    
      	 	
              ·

            	
              Historical
                notice to FERC - Expedited Interconnection Facilities Agreement between
                SDG&E and RAMCO, Inc.. Covers RAMCO Chula Vista facility. Dated
                4/26/2001.

            


    

     

    Air
      Permits:

     

    
      	 	
              ·

            	
              County
                of San Diego, Air Pollution Control District “Permit to Operate”. Permit
                #976039 covers MMC Chula Vista, LLC, and expires February
                2007.

            


    

     

    
      	 	
              ·

            	
              County
                of San Diego, Air Pollution Control District “Permit to Operate”. Permit
                #976038 covers MMC Escondido, LLC, and expires February
                2007.

            


    

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      N

     

    NERC
      EVENT TYPES

     

    
      	
              Event
                

              Type

            	
              Description
                of Outages

            
	
              U11 

            	
              Unplanned
                (Forced) Outage-Immediate
                -
                An outage that requires immediate removal of a unit from service,
                another
                outage state or a Reserve Shutdown state. This type of outage results
                from
                immediate mechanical/electrical/hydraulic control systems trips and
                operator initiated trips in response to unit alarms.

            
	
              U21

            	
              Unplanned
                (Forced) Outage-Delayed
                -
                An outage that does not require immediate removal of a unit from
                the
                in-service state but requires removal within six (6) hours. This
                type of
                outage can only occur while the unit is in service.

            
	
              U31

            	
              Unplanned
                (Forced) Outage-Postponed
                -
                An outage that can be postponed beyond six hours but requires that
                a unit
                be removed from the in-service state before the end of the next weekend.
                This type of outage can only occur while the unit is in
                service.

            
	
              SF

            	
              Startup
                Failure
                -
                An outage that results from the inability to synchronize a unit within
                a
                specified startup time period following an outage or Reserve Shutdown.
                A
                startup period begins with the command to start and ends when the
                unit is
                synchronized. An SF begins when the problem preventing the unit from
                synchronizing occurs. The SF ends when the unit is synchronized or
                another
                SF occurs.

            
	
              MO

            	
              Maintenance
                Outage
                -
                An outage that can be deferred beyond the end of the next weekend,
                but
                requires that the unit be removed from service before the next planned
                outage. (Characteristically, a MO can occur any time during the year,
                has
                a flexible start date, may or may not have a predetermined duration
                and is
                usually much shorter than a PO.)

            
	
              ME

            	
              Maintenance
                Outage Extension
                -
                An extension of a maintenance outage (MO) beyond its estimated completion
                date. This is typically used where the original scope of work requires
                more time to complete than originally scheduled. Do not use this
                where
                unexpected problems or delays render the unit out of service beyond
                the
                estimated end date of the MO.

            
	
              PO

            	
              Planned
                Outage
                -
                An outage that is scheduled well in advance and is of a predetermined
                duration, lasts for several weeks and occurs only once or twice a
                year.
                (Boiler overhauls, turbine overhauls or inspections are typical planned
                outages.)

            
	
              PE

            	
              Planned
                Outage Extension
                -
                An extension of a planned outage (PO) beyond its estimated completion
                date. This is typically used where the original scope of work requires
                more time to complete than originally scheduled. Do not use this
                where
                unexpected problems or delays render the unit out of service beyond
                the
                estimated end date of the PO

            


    

     

    _________________________

    
      
        1
          These
          event types are all contributors to the FOR & EFOR calculations in the
          reports section.

      

    

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
      P: Protocols

     

    
      	 	
              ·

            	
              ***

            


    

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
      3.2.9

     

    LIST
      OF
      REQUIRED FACILITY DOCUMENTS 

     

    Interconnection
      Agreements:

     

    
      	 	
              ·

            	
              Dispersed
                Generating Company, LLC’s (assignor & successor-in-interest of RAMCO)
                release of assignment of SDG&E Interconnection Agreement &
                Expedited Interconnection Facilities Agreement to MMC Chula Vista,
                LLC.
                & MMC Escondido, LLC. Dated
                4/14/2001.

            


    

     

    
      	 	
              ·

            	
              Historical
                notice to FERC - Expedited Interconnection Facilities Agreement between
                SDG&E and RAMCO, Inc.. Covers RAMCO Escondido facility. Dated
                4/26/2001.

            


    

     

    
      	 	
              ·

            	
              Historical
                notice to FERC - Expedited Interconnection Facilities Agreement between
                SDG&E and RAMCO, Inc.. Covers RAMCO Chula Vista facility. Dated
                4/26/2001.

            


    

     

    Air
      Permits:

     

    
      	 	
              ·

            	
              County
                of San Diego, Air Pollution Control District “Permit to Operate”. Permit
                #976039 covers MMC Chula Vista, LLC, and expires February
                2007.

            


    

     

    
      	 	
              ·

            	
              County
                of San Diego, Air Pollution Control District “Permit to Operate”. Permit
                #976038 covers MMC Escondido, LLC, and expires February
                2007.

            


    

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
      6.1

     

    ***


    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
      17

     

    REQUIRED
      INSURANCE

     

    
      	 	
              ·

            	
              ***

            


    

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.


    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     




    Contact
      List Exhibit

     

    ***

     

    

      ***Confidential
        Information has been omitted and filed separately with the Securities and
        Exchange Commission pursuant to a confidential treatment request.