Document:

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
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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
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        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
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        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
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        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
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        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
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        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.

    

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    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.

    

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

     

    (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.

    

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

    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.Exhibit
      10.13

     

    
      	
              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.

            

    

    

    EXECUTION COPY

     

    ENERGY
      MANAGEMENT AGREEMENT

     

    Dated
      November 21, 2006

     

    by
      and between 

     

    MMC
      ENERGY NORTH AMERICA, LLC,

    MMC
      CHULA VISTA LLC, and
      MMC ESCONDIDO LLC 

     

    and
      

     

    BEAR
      ENERGY LP

     

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

    

    
      
        
          
          

        

        
          
          

          
            

          

        

         

      

    

     

    
      EXECUTION COPY

    

     

    TABLE
      OF CONTENTS

    

      
        	 	 	 	
                Page

              
	
                ARTICLE
                  I.

              	 	
                DEFINITIONS

              	 
	
                Section
                  1.1

              	 	
                Rules
                  of Interpretation and Construction

              	
                1

              
	
                Section
                  1.2

              	 	
                Defined
                  Terms

              	
                2

              
	 	 	 	 
	
                ARTICLE
                  II.

              	 	
                TERM;
                  ADDITIONAL UNDERTAKINGS

              	 
	
                Section
                  2.1

              	 	
                Initial
                  Term

              	
                8

              
	
                Section
                  2.2

              	 	
                Renewal
                  Term

              	
                8

              
	
                Section
                  2.3

              	 	
                Termination

              	
                9

              
	
                Section
                  2.4

              	 	
                Additional
                  Undertakings

              	
                9

              
	 	 	 	 
	
                ARTICLE
                  III.

              	 	
                RELATIONSHIP
                  OF THE PARTIES

              	 
	
                Section
                  3.1

              	 	
                Appointment
                  of Energy Manager

              	
                9

              
	
                Section
                  3.2

              	 	
                Independent
                  Contractor

              	
                9

              
	 	 	 	 
	
                ARTICLE
                  IV.

              	 	
                OBLIGATIONS
                  OF ENERGY MANAGER

              	 
	
                Section
                  4.1

              	 	
                Standards
                  of Performance

              	
                9

              
	
                Section
                  4.2

              	 	
                Limitations
                  on Energy Manager’s Authority

              	
                10

              
	
                Section
                  4.3

              	 	
                Maintenance
                  of Regulatory Approvals

              	
                10

              
	
                Section
                  4.4

              	 	
                Additional
                  Provisions

              	
                10

              
	 	 	 	 
	
                ARTICLE
                  V.

              	 	
                SERVICES

              	 
	
                Section
                  5.1

              	 	
                Power
                  Management Services

              	
                10

              
	
                Section
                  5.2

              	 	
                Gas
                  Management Services

              	
                11

              
	
                Section
                  5.3

              	 	
                MMC
                  Communications

              	
                12

              
	
                Section
                  5.4

              	 	
                No
                  Implied Duties

              	
                
                  12

                

              
	 	 	 	 
	
                ARTICLE
                  VI.

              	 	
                REPORTS,
                  RECORDS, MEETINGS, AUDITS AND AVAILABILITY

              	 
	
                Section
                  6.1

              	 	
                Reports

              	
                
                  12

                

              
	
                Section
                  6.2

              	 	
                Books
                  and Records

              	
                
                  12

                

              
	
                Section
                  6.3

              	 	
                Meetings

              	
                
                  12

                

              
	
                Section
                  6.4

              	 	
                Audits

              	
                
                  12

                

              
	
                Section
                  6.5

              	 	
                Availability
                  of Parties

              	
                13

              
	
                Section
                  6.6

              	 	
                Notice

              	
                
                  13

                

              

      

     

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

    

     

    
      
        
          
          

        

        
          i

          
            

          

        

         

      

    

    

    
      EXECUTION COPY

    

    
       

      
        
          	
                  ARTICLE
                    VII.

                	 	
                  MMC
                    RIGHTS AND RESPONSIBILITIES

                	 
	
                  Section
                    7.1

                	 	
                  Regulatory
                    Approvals

                	
                  
                    13

                  

                
	
                  Section
                    7.2

                	
                   

                	
                  Determinations
                    of Capacity

                	
                  
                    13

                  

                
	
                  Section
                    7.3

                	 	
                  Specification
                    of Gas Characteristics

                	
                  
                    13

                  

                
	
                  Section
                    7.4

                	 	
                  Nominating,
                    Scheduling and Balancing Information

                	
                  
                    13

                  

                
	
                  Section
                    7.5

                	 	
                  Communications
                    with CAISO

                	
                  
                    13

                  

                
	
                  Section
                    7.6

                	 	
                  Bilateral
                    Transactions

                	
                  
                    13

                  

                
	
                  Section
                    7.7

                	 	
                  Operation
                    and Maintenance

                	
                  14

                
	 	 	 	
                   

                
	
                  ARTICLE
                    VIII.

                	 	
                  FEES;
                    SETTLEMENT

                	
                   

                
	
                  Section
                    8.1

                	 	
                  Monthly
                    Management Fee

                	
                  
                    14

                  

                
	
                  Section
                    8.2

                	 	
                  Settlement
                    Fees

                	
                  
                    14

                  

                
	
                  Section
                    8.3

                	 	
                  Monthly
                    Settlement Statement

                	
                  
                    14

                  

                
	
                  Section
                    8.4

                	 	
                  Adjustment
                    of Monthly Settlement Statement

                	
                  
                    14

                  

                
	
                  Section
                    8.5

                	 	
                  Payment
                    of Amounts Owed

                	
                  
                    14

                  

                
	
                  Section
                    8.6

                	 	
                  Payment
                    Netting

                	
                  
                    14

                  

                
	
                  Section
                    8.7

                	 	
                  Payment
                    of a Termination Settlement Statement

                	
                  
                    
                      15

                    

                  

                
	
                  Section
                    8.8

                	 	
                  MMC
                    Energy North America LLC as Billing, Payment and Collection
                    Agent

                	
                  15

                
	 	 	 	
                   

                
	
                  ARTICLE
                    IX.

                	 	
                  FORCE
                    MAJEURE

                	
                   

                
	
                  Section
                    9.1

                	 	
                  Applicable
                    Definition and Procedures of Force Majeure

                	
                  
                    15

                  

                
	
                  Section
                    9.2

                	 	
                  Procedure
                    For Calling Force Majeure

                	
                  16

                
	
                  Section
                    9.3

                	 	
                  Performance
                    Suspended

                	
                  17

                
	
                  Section
                    9.4

                	 	
                  End
                    of Force Majeure Event

                	
                  
                    17

                  

                
	 	 	 	
                   

                
	
                  ARTICLE
                    X.

                	 	
                  EVENTS
                    OF DEFAULT; TERMINATION

                	
                   

                
	
                  Section
                    10.1

                	 	
                  Energy
                    Manager Events of Default

                	
                  
                    17

                  

                
	
                  Section
                    10.2

                	 	
                  MMC
                    Events of Default

                	
                  18

                
	
                  Section
                    10.3

                	 	
                  Rights
                    of Non-Defaulting Party

                	
                  
                    18

                  

                
	 	 	 	
                   

                
	
                  ARTICLE
                    XI.

                	 	
                  INDEMNIFICATION

                	
                   

                
	
                  Section
                    11.1

                	 	
                  Indemnification
                    by Energy Manager

                	
                  19

                
	
                  Section
                    11.2

                	 	
                  Indemnification
                    By MMC

                	
                  
                    19

                  

                
	
                  Section
                    11.3

                	 	
                  Cooperation
                    Regarding Claims

                	
                  
                    19

                  

                
	
                  Section
                    11.4

                	 	
                  Defense
                    of Third-Party Claims

                	
                  
                    19

                  

                
	 	 	 	
                   

                
	
                  ARTICLE
                    XII.

                	 	
                  LIMITATION
                    OF LIABILITY

                	 
	
                  Section
                    12.1

                	 	
                  General
                    Limitations of Liability

                	
                  20

                
	
                  Section
                    12.2

                	 	
                  Limitation
                    of MMC’s Liability

                	
                  
                    20

                  

                
	
                  Section
                    12.3

                	 	
                  Limitation
                    of Energy Manager’s Liability

                	
                  21

                

        

      

      
         

      

    

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

    

     

    
      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

    

     

    EXECUTION COPY

     

    
      
        	
                ARTICLE
                  XIII.

              	 	
                CONFIDENTIALITY

              	 
	
                Section
                  13.1

              	 	
                Non-Disclosure

              	
                
                  21

                

              
	
                Section
                  13.2

              	 	
                Permitted
                  Disclosure

              	
                
                  21

                

              
	 	 	 	 
	
                ARTICLE
                  XIV.

              	 	
                REPRESENTATIONS
                  AND WARRANTIES

              	 
	
                Section
                  14.1

              	 	
                Energy
                  Manager Representations and Warranties

              	
                22

              
	
                Section
                  14.2

              	 	
                MMC
                  Representations and Warranties

              	
                23

              
	 	 	 	 
	
                ARTICLE
                  XV.

              	 	
                FINANCIAL
                  PERFORMANCE 

              	 
	 	 	 	 
	
                ARTICLE
                  XVI.

              	 	
                MISCELLANEOUS

              	 
	
                Section
                  16.1

              	 	
                Severability

              	
                24

              
	
                Section
                  16.2

              	 	
                Entire
                  Agreement

              	
                
                  24

                

              
	
                Section
                  16.3

              	 	
                Amendment

              	
                
                  24

                

              
	
                Section
                  16.4

              	 	
                Assignment;
                  Obligation of Energy Manager to Cooperate

              	
                
                  24

                

              
	
                Section
                  16.5

              	 	
                Notices

              	
                25

              
	
                Section
                  16.6

              	 	
                Additional
                  Documents and Actions

              	
                
                  25

                

              
	
                Section
                  16.7

              	 	
                Waiver

              	
                
                  25

                

              
	
                Section
                  16.8

              	 	
                Headings

              	
                
                  25

                

              
	
                Section
                  16.9

              	 	
                No
                  Third Party Beneficiary

              	
                
                  25

                

              
	
                Section
                  16.10

              	 	
                Counterparts

              	
                26

              
	
                Section
                  16.11

              	 	
                Governing
                  Law and Venue

              	
                
                  26

                

              
	
                Section
                  16.12

              	 	
                Continued
                  Performance

              	
                
                  26

                

              
	
                Section
                  16.13

              	 	
                MMC
                  Control

              	
                
                  26

                

              
	
                Section
                  16.14

              	 	
                Survival

              	
                
                  26

                

              

      

    

     

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

    

     

    
      
        
          
          

        

        
          iii

          
            

          

        

         

      

    

    
       

      EXECUTION COPY

       

    

    EXHIBITS

    

    Exhibit
      A    Protocols

     

    Exhibit
      B    Fuel
      Supply Pricing Schedule

     

    Exhibit
      C    Facility
      Budget

     

    Exhibit
      D    Contacts
      

     

    Exhibit
      E    Form
      of
      Guaranty 

     

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

    

     

    
      
        
          
          

        

        
          iv

          
            

          

        

         

      

    

    

    EXECUTION COPY

    

    ENERGY
      MANAGEMENT AGREEMENT

     

    This
      Energy Management Agreement (this “Agreement”),
      effective as of January 1, 2007, is between Bear Energy LP, a limited
      partnership organized and existing under the laws of the State of Delaware
      (“Energy
      Manager”),
      MMC
      Energy North America, LLC, MMC Energy Chula Vista, LLC and MMC Escondido, LLC,
      each a limited liability company organized and existing under the laws of the
      State of Delaware (collectively “MMC”).
      MMC
      and Energy Manager may be referred to each individually as a “Party”
and
      collectively as the “Parties.”
      

     

    PRELIMINARY
      STATEMENT

     

    WHEREAS,
      MMC owns and operates, directly or indirectly MMC Escondido and MMC Chula Vista
      power generation facilities (each a “Facility” and collectively “the
      Facilities”); and

     

    WHEREAS,
      Energy Manager is a marketer of wholesale power in North America and trades
      wholesale natural gas, power and other energy-related products, and provides
      energy management services; and

     

    WHEREAS,
      MMC desires to engage Energy Manager to provide Services (as defined below)
      in
      respect of each Facility. 

     

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

     

    ARTICLE
      I.

    DEFINITIONS

     

    Section
      1.1 Rules
      of
      Interpretation and Construction.
      Except
      as otherwise expressly provided in this Agreement, the rules of interpretation
      and construction set forth below shall apply to this Agreement:

     

    (a)  All
      capitalized terms used in this Agreement that are not otherwise defined have
      the
      respective meanings set forth or referred to in Section 1.1. Defined terms
      in
      this Agreement include in the singular number the plural and in the plural
      number the singular. Whenever the context may require, any pronoun includes
      the
      corresponding masculine, feminine and neuter forms. 

     

    (b)  Any
      reference in this Agreement to “Section,” “Article,” or “Annex” is a reference
      to this Agreement. Unless the context requires otherwise, any reference in
      this
      Agreement to any document or instrument is a reference to that document or
      instrument and all schedules, exhibits, and attachments thereto as amended
      and
      in effect from time to time. Unless otherwise stated, any reference in this
      Agreement to any person includes its permitted successors and assigns and,
      in
      the case of any governmental authority, any person succeeding to its functions
      and capacities. The words “hereof,” “herein,” “hereto” and “hereunder” and words
      of similar import when used in this Agreement, unless otherwise expressly
      specified, refer to this Agreement as a whole and not to any particular
      provision of this Agreement. Whenever the term “including” is used in connection
      with a listing of items included within a prior reference, such listing is
      to be
      interpreted as illustrative only, and is not to be interpreted as a limitation
      on or an exclusive listing of the items included within the prior reference.
      In
      the event that any index or publication referenced in this Agreement ceases
      to
      be published, each such reference is deemed to be a reference to a successor
      or
      alternate index or publication reasonably agreed to by the Parties.

     

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

    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

         

      

    

    
       

      EXECUTION COPY

       

    

    (c)  In
      the
      event of a conflict between the text of this Agreement and any annex or exhibit,
      the terms of this Agreement shall prevail. 

     

    Section
      1.2  
      Defined Terms.

     

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

     

    “Affected
      Party”
has
      the
      meaning set forth in Section 9.2.

     

    “Affiliate”
means,
      with respect to any Person, any other Person that, directly or indirectly,
      (a)
      controls or owns the first Person, (b) is controlled or owned by the first
      Person or (c) is under common control or ownership with the first Person,
      where “own”
      (including, with correlative meanings, the terms “owned by” and “under common
      ownership with”) means ownership of fifty percent (50%) or more of the equity
      interests or rights to distributions on account of equity of the Person, and
      “control”
      (including, with correlative meanings, the terms “controlled by” and “under
      common control with”) means the power to direct or cause the direction of the
      management or policies of the Person, whether through the ownership of voting
      securities, by contract or otherwise.

     

    “Agreement”
has
      the
      meaning assigned to such term in the first paragraph of this
      Agreement.

     

    “Ancillary
      Services”
means
      those services defined by CAISO in its FERC Electric Tariff.

     

    “Applicable
      Law”
means
      any federal, state or local laws (including common law and criminal law), codes,
      statutes, directives, ordinances, by-laws, regulations, rules, judgments,
      consent orders and agreements with Governmental Authorities, proclamations
      or
      delegated or subordinated legislation of any Governmental Authority that are
      applicable to this Agreement, the Parties hereto, each Facility, the Services
      or
      the Transactions. 

     

    “Bankruptcy
      Code”
means
      the United States Bankruptcy Code, as amended.

     

    “Bankruptcy”
means,
      with respect to any Person, that such Person (i) files a petition or otherwise
      commences, authorizes or acquiesces in the commencement of a proceeding or
      cause
      of action under any Bankruptcy, insolvency, reorganization or similar law,
      or
      has any such petition filed or commenced against it, (ii) has a liquidator,
      administrator, receiver, trustee, conservator or similar official appointed
      with
      respect to it or any substantial portion of its property or assets, (iii) takes
      any action for its winding up or liquidation or (vi) is generally unable to
      pay
      its debts as they fall due.

     

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

    

     

    
      
        
          
          

        

        
          2

          
            

          

        

         

      

    

    
       

      EXECUTION COPY

       

    

    “Billing
      Period”
means
      a
      month; provided,
      that in
      the event that this Agreement terminates or is terminated on a day other than
      the last day of a month, the last Billing Period shall run from the first day
      of
      the month in which such termination occurs through the date of such
      termination.

     

    “Business
      Day”
means
      any day on which Federal Reserve member banks in New York City are open for
      business.

     

    “CAISO”
means
      the California Independent System Operator, or any successor thereto.

     

    “Capacity”
means
      the capability of a Facility to produce Power, expressed in MW, and including
      regulatory capacity.

     

    “Collateral
      Annex”
means
      the EEI Collateral Annex attached to the Master Netting Agreement.

     

    “Confidential
      Information”
has
      the
      meaning set forth in Section 13.1.

     

    “Contract
      Price”
means
      the price of Power or Gas purchased or sold in a Power Transaction or Gas
      Transaction. 

     

    “Contract
      Quantity”
means
      that quantity of Power or Gas purchased or sold in a Power Transaction or Gas
      Transaction.

     

    “Corresponding
      Third Party Transaction”
means
      a
      transaction or series of transactions between Energy Manager and a Third Party
      that correspond(s) to a Transaction or any part of a Transaction between Energy
      Manager and MMC. 

     

    “Costs”
means,
      with respect to any day, all actual costs incurred by or on behalf of MMC
      associated with the generation, sale or transmission of Power generated by
      each
      Facility, including, but not limited to and without duplication all
      (i) costs related to Third Party Transactions or to CAISO (including all
      costs associated with participation in markets administered by CAISO), (ii)
      transmission costs and transmission losses, (iii) costs related to Ancillary
      Services, (iv) costs related to the start-up and shut down of a Facility, (v)
      costs related to the purchase of Replacement Power,
      (vi) Gas
costs,
      (vii) Gas transportation and storage costs and losses,
      and
      (viii) broker, clearing house and exchange costs, provided,
      that
      Costs do not include fixed costs that Energy Manager would incur in the absence
      of a particular Gas Transaction or Power Transaction (including those Power
      Transactions related
      to Ancillary Services) related to the Facilities.
      

     

    “Day-Ahead”
has
      the
      meaning provided in the Western Electricity Coordinating Council Preschedule
      Calendar.

     

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

    

     

    
      
        
          
          

        

        
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    “Defaulting
      Party”
means
      MMC in respect of MMC Events of Default, and Energy Manager, in respect of
      Energy Manager Events of Default.

     

    “Default
      Termination Date”
means
      the date that this Agreement terminates, pursuant to a Termination (Default)
      Notice.

     

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

     

    “Disclosing
      Party”
has
      the
      meaning assigned to such term in Section 13.2.

     

    “EEI
      Master Agreement”
means
      the Edison Electric Institute Master Power Purchase and Sale Agreement,
      including the Gas Annex, executed between Energy Manager and MMC Energy Chula
      Vista, LLC and/or MMC Escondido, LLC, pursuant to Section 2.4.

     

    “Effective
      Date”
means
      the day beginning at 00:00:01 EPT on January 1, 2007. 

     

    “Energy
      Manager”
has
      the
      meaning provided in the introductory paragraph hereof. 

     

    “Energy
      Manager Contacts”
shall
      consist of those persons who may be designated by Energy Manager to communicate
      with MMC and with CAISO under the Service terms provided hereunder.

     

    “Energy
      Manager Event of Default”
has
      the
      meaning assigned to such term in Section 10.1.

     

    “EPT”
means
      Eastern Prevailing Time.

     

    “Event
      of Default”
means
      an MMC Event of Default or an Energy Manager Event of Default.

     

    “Facility”
has
      the
      meaning provided in the Preliminary Statement.

     

    “Facility
      Budget”
has
      the
      meaning provided in Exhibit C. 

     

    “FERC”
means
      the Federal Energy Regulatory Commission.

     

    “Force
      Majeure”
has
      the
      meaning assigned to such term in Article 9.1.

     

    “Forced
      Outage”
means
      any outage or derating at a Facility caused by equipment failure, maintenance
      or
      repair (using commercially reasonable industry standards) that is not a Planned
      Outage. 

     

    “FPA”
means
      the Federal Power Act, 16 U.S.C. §791a, et
      seq.

     

    “Gas”
means
      natural gas. 

     

    “Gas
      Management Services”
has
      the
      meaning assigned to such term in Section 5.2.

     

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

    

     

    
      
        
          
          

        

        
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    “Gas
      Payments”
means,
      for each Gas Transaction, an amount equal to the Contract Price multiplied
      by
      Contract Quantity pursuant to such Gas Transaction.

     

    “Gas
      Revenues”
means,
      with respect to any day, the actual revenues received by Energy Manager in
      connection with any Gas Payments. 

     

    “Gas
      Transaction”
means
      a
      purchase or sale of Gas between MMC and Energy Manager. 

     

    “Gas
      Transportation Agreement”
means
      any agreement between Energy Manager and any Transporter for the transportation
      of Gas to such Facility.

     

    “Governmental
      Authority”
means
      any federal, state, local or municipal government, governmental department,
      commission, board, bureau, agency or instrumentality, or any judicial,
      regulatory, administrative or quasi-governmental body, having or asserting
      jurisdiction over the matter in question.

     

    “Heat
      Rate”
means
      the fuel efficiency of a Facility expressed in Btu’s per net kWh
      (HHV).

     

    “Indemnified
      Party”
means,
      with respect to an indemnification by Energy Manager, MMC and with respect
      to an
      indemnification by MMC, Energy Manager.

     

    “Indemnifying
      Party”
means
      the Party providing an indemnification under Sections 11.1 or 11.2.

     

    “Initial
      Term”
has
      the
      meaning assigned to such term in Section 2.1.

     

    “Interest
      Rate”
means
      for any date, the per annum prime rate of interest as reported in the “Money
      Rates” column of The
      Wall Street Journal
      on the
      last business day of the preceding month, as the same may change from time
      to
      time, plus two percent (2%).

     

    “Losses”
means
      suits, actions, liabilities, legal proceedings, claims, demands of any Third
      Party for any and all penalties, fines, losses, costs and/or expenses of any
      kind or character including reasonable attorneys’ fees and expenses.

     

    “Master
      Netting Agreement”
means
      the Master Netting Agreement executed between Energy Manager and MMC pursuant
      to
      Section 2.4.

     

    “MMC”
      has
      the
      meaning assigned to such term in the first paragraph of this
      Agreement.
      

     

    “MMC
      Bilateral Transaction”
has
      the
      meaning assigned to such term in Section 7.6(c). 

     

    “MMC
      Credit Support”
has
      the
      meaning assigned to such term in Article 15. 

     

    “MMC
      Event of Default”
has
      the
      meaning assigned to such term in Section 10.2.

     

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

    

     

    
      
        
          
          

        

        
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    “MMC
      Guarantor”
means
      MMC Energy, Inc. 

     

    “Monthly
      Management Fee”
means
      the amount payable to Energy Manager as set forth in Section 8.1.

     

    “Monthly
      Settlement Statement”
has
      the
      meaning assigned to such term in Section 8.3.

     

    “MW”
means
      megawatt.

     

    “MWh”
means
      megawatt-hour.

     

    “NERC-GADS
      Standards”
means
      the Generating Availability Database standards developed by the North American
      Electric Reliability Council.

     

    “Net
      Output”
means
      all Power produced by a Facility and delivered to a Delivery Point.

     

    “Non-Defaulting
      Party”
means
      MMC, in respect of any Energy Manager Event of Default, and Energy Manager,
      in
      respect of MMC Event of Default.

     

    “Non-Disclosing
      Party”
has
      the
      meaning set forth in Section 13.2.

     

    “Other
      Services”
means
      all Services other than Power Management Services and Gas Management Services
      which Energy Manager may agree to provide to MMC from time-to-time under the
      terms and conditions separately agreed upon between the Parties. 

     

    “Party”
has
      the
      meaning assigned to such term in the first paragraph of this
      Agreement.

     

    “Person”
means
      any individual, partnership, corporation, association, business, trust, limited
      liability company, Governmental Authority or other legal entity.

     

    “Planned
      Outage”
means
      an outage scheduled in advance. 

     

    “Power”
means
      electric energy as measured in MWh, and/or any other electricity related
      products or services available for sale from a Facility, including Ancillary
      Services, but does not include Resource Adequacy Capacity. 

     

    “Power
      Management Services”
has
      the
      meaning assigned to such term in Section 5.1.

     

    “Power
      Payment”
means,
      for each Power Transaction, an amount equal to the Contract Price multiplied
      by
      the Contract Quantity pursuant to such Power Transaction.

     

    “Power
      Revenues”
means,
      with respect to any day, the actual revenues received by Energy Manager in
      connection with any Power Payments, which for the avoidance of doubt, do not
      include revenues from the sale of Resource Adequacy Capacity. 

     

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

    

     

    
      
        
          
          

        

        
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    “Power
      Transaction”
means
      a
      specifically agreed to purchase or sale of Power between MMC and Energy Manager
      pursuant to CAISO tariff or Third Party agreement.

     

    “PPT”
means
      Pacific Prevailing Time.

     

    “Proprietary
      Transaction”
has
      the
      meaning assigned to such term in Section 7.6(d).

     

    “Prudent
      Utility Practice”
means
      the practices, methods, techniques, standards and acts that, at the time of
      the
      performance of the Parties’ obligations under this Agreement, are then commonly
      used by Persons performing similar tasks and services for natural gas-fired
      power plants in the United States, and that, at a particular time, in the
      exercise of reasonable judgment in light of the facts known at the time a
      decision was made, would have reasonably been expected to accomplish the desired
      results. Prudent Utility Practices are not intended to be limited to the optimum
      practices to the exclusion of all others, but rather reflect the practices
      then
      generally accepted, having due regard for, among other things, contractual
      obligations, costs, requirements of Governmental Authorities, operating rules
      or
      procedures of transmission operators, reliability councils or other market
      conditions. 

     

    “Real-Time”
has
      the
      meaning provided in the Western Electricity Coordinating Council Preschedule
      Calendar. 

     

    “Renewal
      Term”
has
      the
      meaning assigned to such term in Section 2.2.

     

    “Resource
      Adequacy Capacity”
means
      the quantity of capacity in MWs from a resource listed in a resource adequacy
      plan approved pursuant to Section 40 of the CAISO FERC Electric
      Tariff.

     

    “Regulatory
      Approval”
means
      all permits, licenses, consents, approvals, certifications and similar items
      issued by any Governmental Authority required in respect of or in relation
      to
      each Facility or performance of the Services. 

     

    “Replacement
      Power”
means,
      in the event that a Forced Outage, interruption of Gas delivery or curtailment
      of Power transmission occurs, the amount of Power purchased or financially
      settled by Energy Manager that shall be equal to the positive difference
      obtained by subtracting the amount of Power actually delivered from each
      Facility from the amount of Power MMC has committed to sell Energy Manager
      in a
      particular Power Transaction. 

     

    “Required
      Gas Quantity”
means
      the amount of Gas required, as determined by reference to the Heat Rate, to
      generate Power up to the Capacity of each Facility.

     

    “Revenues”
means,
      with respect to any day, the actual revenues received by or for MMC, including
      revenues from any (a) sales of Power (including those related to Ancillary
      Services), and (b) sales of Capacity.

     

    “Services”
means,
      collectively, the Power Management Services (including those related to
      Ancillary Services) and Gas Management Services that Energy Manager has agreed
      to provide hereunder, all as more specifically described in Article V, and
      Other
      Services that Energy Manager may agree to provide from time to time.

     

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

    

     

    
      
        
          
          

        

        
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    “Settlement
      Date”
has
      the
      meaning assigned to such term in Section 8.5.

     

    “Settlement
      Fees”
has
      the
      meaning assigned to such term in Section 8.2.

     

    “Termination
      Date”
means
      the date that this Agreement terminates, pursuant to a Termination
      Notice.

     

    “Termination
      (Default) Notice”
means
      a
      written notice of termination delivered by the Non-Defaulting Party pursuant
      to
      Section 10.3 of this Agreement.

     

    “Termination
      Notice”
means
      a
      written notice of termination delivered by one Party to the other Party,
      pursuant to Section 2.3 of this Agreement.

     

    “Termination
      Settlement Statement”
means
      a
      statement identifying the payment due from Energy Manager to MMC or from MMC
      to
      Energy Manager when this Agreement is terminated, calculated pursuant to
      Sections 8.1 and 8.3.

     

    “Third
      Party”
means
      any Person other than MMC or Energy Manager.

     

    “Third
      Party Transaction”
means
      any Power Transaction or Gas Transaction between Energy Manager and a Third
      Party. 

     

    “Total
      Gross Margin”
means,
      with respect to MMC for any day and without duplication, (a) the sum of each
      Facility’s (i) Power Revenues plus
      (ii) Gas
      Revenues, less
      (b) the
      sum of the Facility’s (i) Power Costs plus
      (ii) Gas
      Costs.

     

    “Transaction”
means
      any Power Transaction or Gas Transaction between Energy Manager and
      MMC.

     

    “Transporter”
means
      any Person obligated to transport Gas pursuant to any Gas Transportation
      Agreement.

     

    ARTICLE
      II.

    TERM;
      ADDITIONAL UNDERTAKINGS

     

    Section
      2.1
      Initial Term.
      This
      Agreement shall commence upon the Effective Date and, unless terminated earlier
      in accordance with the terms hereof, its initial term shall expire one (1)
      year
      from the Effective Date (such period, the “Initial
      Term”);
      provided,
      however,
      that
      Energy Manager’s authority to submit bids and offers to the CAISO on behalf of
      each Facility for the delivery of Ancillary Services on January 1, 2007 shall
      commence at 00:00:01 EPT on December 31, 2006. 

     

    Section
      2.2
      Renewal Term.
      This
      Agreement will automatically extend by successive sixty (60) day periods (each
      period a “Renewal
      Term”)
      unless
      terminated pursuant to Section 2.3. 

     

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

    

     

    
      
        
          
          

        

        
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      EXECUTION COPY

       

    

    Section
      2.3
      Termination.
      This
      Agreement shall terminate in the event that: (i) either Party terminates this
      Agreement upon giving sixty (60) days prior written notice to the other Party
      (a
“Termination
      Notice”),
      with
      such sixtieth (60th)
      day
      constituting the Termination Date; or (ii) an Event of Default has occurred
      and
      is continuing and the Non-Defaulting Party exercises its right to terminate
      under Article X. Certain provisions of this Agreement shall continue in effect
      after the Termination Date or Default Termination Date, in accordance with
      the
      provisions of Section 16.14. 

     

    Section
      2.4
      Additional Undertakings.
      Promptly following the execution of this Agreement, the Parties shall use their
      best efforts to negotiate and execute enabling EEI Master Agreements governing
      the terms of applicable Power Transactions and Gas Transactions as well as
      a
      Master Netting Agreement and the Collateral Annex attached thereto.
      Notwithstanding any provision in this Agreement: (i) Energy Manager shall have
      no obligation to procure and deliver Gas or to purchase Power from or for MMC
      unless the Parties execute the applicable EEI Master Agreements, the Master
      Netting Agreement and the Collateral Annex thereto, and such applicable EEI
      Master Agreements remain in effect during the term of this Agreement and MMC
      provides associated credit support in a form acceptable to Energy Manager
      hereunder, under the Master Netting Agreement and under the Collateral Annex;
      and (ii) EEI Master Agreements shall govern the terms of applicable Power
      Transactions and Gas Transactions entered into pursuant to this
      Agreement.

     

    ARTICLE
      III.

    RELATIONSHIP
      OF THE PARTIES

     

    Section
      3.1
      Appointment of Energy Manager.
      Subject
      to the terms of this Agreement, MMC appoints Energy Manager, and Energy Manager
      accepts the appointment, to be the exclusive provider of Services commencing
      as
      of the Effective Date. 

     

    Section
      3.2
      Independent Contractor.
      The
      relationship of Energy Manager to MMC as set forth in this Agreement is that
      of
      an independent contractor. Other than as expressly provided by Articles V,
      VI,
      VII, and VIII this Agreement shall not make any Party an agent, partner, a
      fiduciary or financial or investment advisor, joint venturer, or legal
      representative of any other Party for any purpose whatsoever. Neither Party
      is
      authorized to assume or create any obligation, liability or responsibility
      on
      behalf of or in the name of any other Party or to bind any other Party to any
      Third Party except as expressly provided for under this Agreement. 

     

    ARTICLE
      IV.

    OBLIGATIONS
      OF ENERGY MANAGER

     

    Section
      4.1
      Standards of Performance.
      Energy
      Manager shall:

     

    (a)  perform
      the Services and enter into Transactions, the authority for which have been
      expressly delegated to Energy Manager pursuant to Sections V and VI, and Article
      7.6, in a good, workmanlike and commercially reasonable manner and in accordance
      with (i) Prudent Utility Practices, (ii) Applicable Law and Regulatory
      Approvals, (iii) NERC/GADS Standards, and (iv) the applicable CAISO rules and
      procedures;

     

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

    

     

    
      
        
          
          

        

        
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      EXECUTION COPY

       

    

    (b)  exercise
      all commercially reasonable efforts to provide the Services to MMC with the
      goal
      of maximizing Total Gross Margin while complying with this Agreement;
      and

     

    (c)  maintain,
      through itself or one
      or
      more service providers, sufficient
      infrastructure and related support in order to perform the Services.

     

    Section
      4.2
      Limitations on Energy Manager’s Authority.
      In
      performing the Services under this Agreement, Energy Manager shall not, unless
      otherwise expressly authorized under this Agreement or by MMC:

     

    [***]

     

    MMC
      shall
      not have any liability with respect to any Transaction undertaken by Energy
      Manager in breach of subsections (a) through (e) above, and, in addition to
      any
      other indemnity obligations in this Agreement, Energy Manager shall indemnify
      and hold harmless MMC from any claims arising in connection with such
      Transactions pursuant to the procedures in Article XI; provided,
      however,
      that
      Energy Manager’s liability under these subsections (a) through (e) above shall
      be subject to limitations stated in Section 11.2.

     

    Section
      4.3
      Maintenance of Regulatory Approvals.
      Energy
      Manager shall have and maintain such Regulatory Approvals as may be necessary
      or
      required to provide the Services, including but not limited to obtaining and
      maintaining (a) CAISO membership, and (b) any applicable FERC authorization
      to
      enter into market-based wholesale Power Transactions or Gas Transactions.

     

    Section
      4.4
      Additional Provisions.
      

    
      

      (a)  Notwithstanding
        anything in this Agreement to the contrary, Energy Manager does not represent
        or
        warrant that it will be able to enter into any particular Transaction
        contemplated herein or enter into any contract with any particular Third
        Party.
        MMC acknowledges that the markets for the purchase and sale of Power and
        Gas are
        often volatile and fluctuating, that the Contract Price for Power or Gas
        may be
        at a level that is either above or below the then-existing market prices
        for
        such Power or Gas and that Energy Manager has no obligation to purchase Power
        or
        Gas at the lowest existing market price or to sell Power or Gas at the highest
        existing market price. 

       

        (b)     
          [***]

       

      ARTICLE
        V.

    

    SERVICES

     

    Section
      5.1
      Power
      Management Services.
      Subject
      to the terms of this Agreement and starting on the Effective Date, Energy
      Manager shall provide the following Power management services (“Power
      Management Services”)
      to
      MMC:

     

    (a)  submit
      Facility operational characteristics to CAISO in a manner consistent with CAISO
      tariff requirements [***]; 

     

    (b)  submit
      to
      CAISO daily and hourly Ancillary Services bids of a Facility, including
      submitting Capacity bids for spinning reserves, into the CAISO Ancillary
      Services markets, up to the Capacity associated with such Facility, provided,
      that
      CAISO has authorized the Facility to submit bids for the specific Ancillary
      Service [***]; 

     

    (c)  maintain
      a 24-hour trading desk with Energy Manager Contacts for each Facility available
      twenty-four hours a day, seven days a week during the Agreement term to serve
      as
      a primary point of contact for communications from Facility staff and CAISO
      regarding: (i) Facility operations and dispatch; (ii) ring-down requirements;
      (iii) operating emergencies, (iv) out-of-merit calls; (v) CAISO congestion
      management instructions; (vi) communicate Forced Outages and Planned Outages
      to
      CAISO;

     

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

    

     

    
      
        
          
          

        

        
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      EXECUTION COPY

       

    

    (d)  submit
      to
      CAISO daily and hourly schedules for MMC Bilateral Transactions from each
      Facility [***]; 

     

    (e)  coordinate
      the dispatch of Power with any designated representative of a Facility,
      purchasers of Power and CAISO, and adjust such dispatch characteristics or
      constraints for such designated Facility, upon instruction from MMC,
provided,
      that
      dispatch information is provided by MMC or any representative of MMC on a timely
      basis; 

     

    (f)  submit
      Power and Capacity bids and offers for each Facility to CAISO; 

     

    (g)  upon
      the
      request of MMC, market available Power from any designated Facility to Third
      Parties;
       

    

    (h)  notify
      MMC of any Facility scheduling and Power production changes; 

     

    (i)  use
      commercially reasonable efforts to manage Power imbalances for the Facility
      with
      the intent of reducing the adverse economic impact of such Power imbalances
      [***];

     

    (j)  assist
      the Facility with the development of commercial strategies with respect to
      the
      sale of Power from the Facility; 

     

    (k)  receive
      and validate CAISO invoices; and

     

    (l)  provide
      Other Services as may be agreed to in writing by the Parties from time to time.
      

     

    Section
      5.2
      Gas
      Management Services.
      Subject
      to the terms of this Agreement and starting on the Effective Date, Energy
      Manager shall provide the following gas management services (“Gas
      Management Services”)
      to
      MMC:

     

    (a)  if
      MMC
      elects or CAISO directs MMC to generate Power, procure and supply the Required
      Gas Quantity to the Facility, and for any Third Party Transaction for Power,
      provided,
      that
      Energy Manager shall have no obligation to procure, supply, and/or deliver
      Gas
      for a MMC Bilateral Transaction but may, in its discretion, contract with MMC
      to
      provide such Gas Management Services;
       

    

    (b)  nominate
      and schedule the delivery of Gas to the Facility and adjust the schedule to
      reflect any changes in production at such Facility [***];

     

    (c)  nominate,
      schedule and balance (including, without limitation daily and hourly) with
      suppliers and Transporters, including imbalances created in connection with
      nomination of Gas for the Facility through the use of an operational balancing
      agreement to be procured by the Facility and administered by Energy Manager
      [***]; 

     

    (d)  market
      and sell any excess Gas; and

     

    (e)  provide
      Other Services related to Gas as may be agreed to in writing by the Parties
      from
      time to time, including but not limited to, marketing excess transportation
      capacity.

     

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

    

     

    
      
        
          
          

        

        
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      EXECUTION COPY

       

    

    Section
      5.3
      MMC
      Communications.
      In the
      provision of Services, Energy Manager may rely fully upon the communications
      from or on behalf of MMC not only as to their validity and effectiveness, but
      also as to the truth and accuracy of the information which Energy Manager shall
      in good faith believe to be genuine. MMC shall maintain sole and complete
      responsibility for ensuring that all information that MMC provides to Energy
      Manager remains current and accurate.

     

    Section
      5.4
      No
      Implied Duties.
      Energy
      Manager shall have no implied duties or obligations and shall not be charged
      with knowledge or notice of any fact or circumstance not specifically set forth
      herein. Without limiting the generality of the foregoing, the duties of Energy
      Manager with respect to Services are limited to those expressly set forth in
      this Agreement. 

     

    ARTICLE
      VI.

    REPORTS,
      RECORDS, MEETINGS, AUDITS AND AVAILABILITY

     

    Section
      6.1
      Reports.
      In
      addition to the information required to be provided pursuant to the Operating
      and Dispatch Procedures, Energy Manager shall provide the following information
      to MMC: 
       

      (a)   Daily
        profit and loss reports based on preliminary data related to the Services,
        Ancillary Services prices, other Power prices and quantity generated, hourly
        Gas
        price and usage and estimated CAISO fees for sales and purchases on behalf
        of
        each Facility. Such profit and loss estimates shall be of the prior day and
        shall be summarized and presented in a form and in such detail as may be
        reasonably requested by MMC. The Parties shall cooperate with each other
        in the
        establishment of appropriate links and data access between the systems of
        each
        Facility and those of Energy Manager to facilitate reporting and communication
        to the extent practicable. 

       

      (b)   To
        the
        extent that final data on Transactions are available from CAISO and/or Third
        Parties, monthly reports reconciling: (i) final Power Transactions (including
        for Ancillary Services) data (based on CAISO settlement statements and bilateral
        checkouts) with the daily preliminary recorded sales of Power data by MMC;
        and
        (ii) final Gas Transactions data (based on pipeline statements, transportation
        invoices and plant burn records) with the daily preliminary recorded Gas
        Purchases data by MMC. 

       

      (c)   prepare,
        submit, reconcile and settle CAISO invoices, provided,
        that
        all necessary information for such reporting has been provided by MMC on
        a
        timely basis; and

       

      (d)   Anything
        herein to the contrary notwithstanding, upon obtaining knowledge thereof,
        Energy
        Manager shall submit prompt written notice to MMC of: (i) any litigation
        or
        material claims, disputes or actions, threatened or filed by any Person,
        concerning the Services or Transactions related to Gas or Power with respect
        to
        the Facility or to Energy Manager’s ability to perform its obligations under
        this Agreement; and (ii) any other event or circumstance that could materially
        affect a Facility or Energy Manager’s ability to perform the Services or engage
        in Gas or Power Transactions.

       

      (e)   Energy
        Manager shall endeavor to provide to MMC data that Energy Manager in good
        faith
        believes to be accurate, relating to the Services or the Transactions as
        may be
        necessary for MMC to submit reports prescribed by Applicable Law, including
        but
        not limited to FERC electric quarterly reports; provided
        that MMC
        shall retain the obligation to submit any such reports to the applicable
        regulatory authorities as may be prescribed by Applicable Law; and provided,
        further,
        that
        Energy Manager can not and does not guarantee the accuracy of such data but
        shall use commercially reasonable efforts to provide accurate and complete
        data.

    

     

    Section
      6.2
      Books
      and Records.
      Energy
      Manager shall maintain in good order all records relating to the Services and
      Transactions, and retain written records for a minimum period of five (5) years
      (and otherwise as required by Applicable Law and Regulatory Approvals). To
      the
      extent practical and in accordance with its then-standing internal practices,
      Energy Manager shall ensure that such books and records are kept separate from
      its own books and records. Where records relate to disputes, appeals,
      arbitration, litigation or the settlement of claims arising out of the
      performance of this Agreement, such records shall be maintained until the
      resolution of the matter giving rise to the dispute.

     

    Section
      6.3
      Meetings.
      Energy
      Manager shall meet with MMC or other representative of MMC in person or by
      conference call at such reasonable times in any month as MMC may request and
      as
      provided for in the Protocols in Exhibit A. During such meetings, Energy Manager
      shall provide MMC, as requested, with any material information concerning new
      or
      significant changes in the Gas and Power markets applicable to each Facility.
      

     

    Section
      6.4
      Audits.
      

     

    (a)  MMC
      shall
      be entitled, upon reasonable notice to Energy Manager, no more than twice per
      year and at MMC’s sole cost, to audit all books and records kept and maintained
      by Energy Manager specifically relating to the Transactions and Energy Manager’s
      obligations under this Agreement. 

     

    (b)  If
      any
      audit conducted under subsection (a) above reveals any inaccuracy in any Monthly
      Settlement Statement pertaining to the Transactions or the Monthly Settlement
      Statement calculations referenced in Section 8.3, the necessary adjustments
      in
      such Monthly Settlement Statement and the payments thereof will be promptly
      made; provided,
      however,
      that no
      adjustment of any Monthly Settlement Statement or payment will be made unless
      objection to the accuracy thereof was made by either Party within twelve (12)
      months from the submission of such Monthly Settlement Statement or payment,
      as
      applicable. Energy Manager shall preserve all records held by it for the
      duration of the referenced audit periods.

     

    
      [***]
        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
      6.5
      Availability of Parties.
      Each
      Party shall make itself available to the other Party through telephone,
      voicemail, e-mail and/or facsimile during normal business hours, and by
      telephone, instant messaging, mobile telephone and/or pager during non-business
      hours. Energy Manager shall also make itself available to MMC through its
      24-hour power trading desk. 

     

    Section
      6.6
      Notice.
      MMC
      shall
      submit prompt written notice to Energy Manager upon obtaining knowledge of:
      (i)
      any material violation of any Applicable Law regarding a Facility; or (ii)
      any
      refusal or threatened refusal to grant, renew or extend, or any action pending
      or threatened that might affect the granting, renewal or extension of any
      Regulatory Approval, including, but not limited to, the Facility’s FERC-granted
      market-based rate authorization.

     

    ARTICLE
      VII.

    MMC
      RIGHTS AND RESPONSIBILITIES

     

    Section
      7.1
      Regulatory Approvals.
      MMC
      shall maintain all Regulatory Approvals as may be necessary to procure and
      sell
      Gas and to sell Power (including Ancillary Services) as contemplated herein,
      including obtaining and maintaining any required CAISO authorizations and the
      FERC authorization to enter into market-based transactions.

     

    Section
      7.2
      Determinations of Capacity.
      MMC
      shall have sole and absolute discretion to determine the amount of Capacity
      available for sale by Energy Manager for its respective Facility, which
      discretion it may exercise using Prudent Utility Practice based on operational
      considerations of such Facility. MMC shall be responsible for communicating
      the
      operating and dispatch procedures to Energy Manager. 

     

    Section
      7.3
      Specification of Gas Characteristics.
      MMC
      shall have the sole right and responsibility to specify the characteristics
      of
      Gas to be supplied to its respective Facility and shall bear all consequences
      associated with such characteristics. 

     

    Section
      7.4
      Nominating, Scheduling and Balancing Information.
      MMC
      shall provide Energy Manager with the information necessary to enable Energy
      Manager to comply with the nominating, scheduling, balancing and other
      requirements of any supplier, Transporter, Power purchaser or transmission
      provider and to minimize scheduling, balancing, overrun and similar penalties
      and charges.

     

    Section
      7.5
      Communications with CAISO.
      MMC
      shall communicate with CAISO or any other control areas and execute the
      necessary documentation to permit communications between CAISO and Energy
      Manager.

     

    Section
      7.6
      Bilateral Transactions.
      

     

    
      (a)   Day-Ahead
        Third Party Transactions.
        MMC
        hereby delegates authority to Energy Manager to execute Day-Ahead or
        shorter-term Third Party Transactions on its behalf (including Third Party
        Transactions with CAISO), provided,
        however,
        that
        Energy Manager must obtain MMC’s prior approval before entering into a Third
        Party Transaction that could result in MMC congestion charges. Energy Manager
        shall not engage in any bilateral congestion transactions around MMC’s assets
        for its own account without prior approval from MMC. If MMC chooses to grant
        Energy Manager a right to execute a bilateral congestion transaction around
        its
        assets then appropriate compensation will be negotiated on a per transaction
        basis.

       

      (b)   Intermediate
        and Long-term Third Party Transactions.
        Energy
        Manager may from time to time submit to MMC a proposed Power or Capacity
        Transaction between Energy Manager and a Third Party (other than a Transaction
        with CAISO), having a term longer than Day-Ahead. Such a proposal shall state
        the expected term of the Third Party Transaction and shall identify whether
        the
        proposed transaction could result in MMC incurring congestion charges. Upon
        receipt, MMC shall promptly review the terms of the proposed transaction
        and may
        request additional information or suggest changes to the terms thereof. If
        MMC
        approves a proposed transaction, it shall counter-sign the Third Party
        Transaction proposal and return it to Energy Manager and Energy Manager and
        the
        Third Party shall then execute the Third Party Transaction. Energy Manager
        shall
        not execute a Third Party Transaction having a term longer than Day-Ahead
        without MMC’s prior written consent unless (i) Energy Manager anticipates that
        the term of said Third Party Transaction will be equal to or less than [***],
        and (ii) MMC does not respond within [***] of Energy Manager’s request to
        execute the transaction. 

       

      (c)   MMC
        Bilateral Transactions.
        In the
        event that MMC directly and independently enters into a bilateral Power or
        Capacity transaction between MMC and a Third Party (an “MMC
        Bilateral Transaction”),
        Energy Manager shall coordinate the dispatch of Power in connection with
        such
        bilateral transaction and may, at its discretion, elect to provide Gas
        Management Services in connection with such bilateral transaction and in
        the
        same manner and scope contemplated under this Agreement; provided,
        however,
        that
        promptly upon execution of a bilateral transaction with a Third Party, MMC
        shall
        furnish Energy Manager with: (i) copies of documentation implementing such
        bilateral transaction; and (ii) written authority for Energy Manager to act
        on
        MMC’s behalf in connection with such transaction; and provided,
        further,
        that
        the Parties have reached agreement on the fee, if any, due to Energy Manager
        for
        the provision of such additional services.

       

      (d)   Scheduling
        for Energy Manager Proprietary Transactions.
        Energy
        Manager shall not submit a day-ahead transmission schedule to the CAISO which
        designates a Facility as Energy Manager’s supply source for a transaction in
        which Energy Manager, for its own account, has agreed to sell power to a
        Third
        Party at a delivery point in the CAISO service territory (a “Proprietary
        Transaction”)
        unless
        Energy Manager has received approval from MMC for such designation of a
        Facility.

       

      (e)   For
        the
        avoidance of doubt, nothing in this Section 7.6 prevents Energy Manager from
        entering into Transactions for its own account with MMC. 

       

      (f)   Absent
        the prior approval of Energy Manager, in no event shall MMC utilize Gas supplied
        by Energy Manager to MMC for any purpose other than to deliver Power under
        a
        Transaction, Third Party Transaction or a MMC Bilateral Transaction for which
        Energy Manager has agreed to provide Gas Management Services.

    

     

    
      [***]
        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
      7.7 Operation
      and Maintenance.
      MMC
      shall operate
      and
      maintain
      each
      Facility in a commercially reasonable manner so that it materially complies
      with
      Applicable Laws and Regulatory Approvals. MMC shall, at its expense, obtain
      all
      necessary Regulatory
      Approvals
      and
      allowances for the Facility’s operation and maintenance.

     

    ARTICLE
      VIII.

    FEES;
      SETTLEMENT

     

      Section
        8.1 Monthly
        Management Fee.
        MMC
        shall pay Energy Manager a fee (the “Monthly Management Fee”) with respect to
        each Billing Period during the term of this Agreement. The Monthly Management
        Fee for MMC shall consist of [***].
         

      

    Section
      8.2 [***] 

     

    Section
      8.3Monthly
      Settlement Statement.
      Not
      later than [***], Energy Manager shall render to MMC a statement (the “Monthly
      Settlement Statement”) showing the calculation of and setting forth in total for
      such Billing Period on an aggregate basis and, as applicable, (i) the Total
      Gross Margin (ii) the Monthly Management Fee, (iii) Revenues realized by or
      for
      MMC, (iv) Gas Payments due Energy Manager from MMC, and (v) any other costs
      incurred by MMC or on MMC’s behalf.

     

    Section
      8.4  Adjustment
      of Monthly Settlement Statement. In the event that the payments due to or
      from MMC for (a) actualized Power or Ancillary Service Transactions with CAISO
      (based on CAISO settlement statements and bilateral checkouts), (b) actualized
      Power Transactions with Third Parties (based on Third Party Transactions
      confirmations), or (c) actualized Gas Transactions with Energy Manager and/or
      a
      Third Party (based on pipeline statements, transportation invoices and plant
      burn records) differ from the payments amounts reported under a Monthly
      Settlement Statement, Energy Manager shall reconcile such discrepancies during
      the next Billing Period following the incorrect Monthly Settlement Statement
      and
      MMC shall render any additional payments due Energy Manager by the next
      Settlement Date following the adjustment. 

     

    Section
      8.5
      Payment of Amounts Owed.

     

    (a)  Each
      Party shall by the twentieth (20th)
      day of
      each month, or if such day is not a Business Day, the next Business Day, (the
      “Settlement
      Date”)
      render
      to the other Party by wire transfer payment in immediately available funds
      the
      positive difference due under the Monthly Settlement Statement for the Billing
      Period in which the relevant Services were rendered.  

     

    (b)  If
      a
      Party fails to pay the entire amount shown to be due on any Monthly Settlement
      Statement when this amount becomes due (other than amounts disputed in good
      faith by such Party), it shall pay a late charge on the unpaid balance that
      shall accrue on each calendar day from the due date at the Interest Rate.

     

    (c)  If
      either
      Party, in good faith, disputes any part of any Monthly Settlement Statement,
      such Party shall provide a written explanation of the basis for the dispute
      and
      pay the portion of such Monthly Settlement Statement conceded to be correct
      no
      later than the due date as calculated pursuant to this Section. If any amount
      disputed by such Party is determined to be due to the other Party either by
      agreement between the Parties or as a result of litigation, such amount shall
      be
      paid on the next payment date for a Monthly Settlement Statement or if there
      is
      no next scheduled payment date for a Monthly Settlement Statement then within
      ten (10) days of such determination, along with interest calculated at the
      Interest Rate from the original due date until the date paid. 

     

    Section
      8.6 Payment
      Netting.
      In the
      event that Energy Manager and MMC are required to pay an amount on the same
      date
      pursuant to this Agreement or any Transaction, then such amounts shall be
      aggregated and the Parties shall discharge their obligations to pay through
      netting, in which case such Party owing the greater aggregate amount shall
      pay
      to the other Party the difference between the amounts owed. 

     

    
      [***]
        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
      8.7 Payment
      of a Termination Settlement Statement.
      

     

    (a)  As
      soon
      as reasonably practicable following delivery of the Termination Notice, each
      Party shall prepare and deliver a Termination Settlement Statement to the other
      Party, showing in reasonable detail the amounts owing to the submitting Party.
      Each Party shall render to the other Party by wire transfer payment in
      immediately available funds, the amount due under the Termination Settlement
      Statement within two (2) Business Days following delivery of the Termination
      Settlement Statement by the second Party to provide the settlement statement.
       In
      no
      event shall calculation and payment of the Termination Settlement Statement
      delay the Termination Date.

     

    (b)  As
      soon
      as reasonably practicable following the Default Termination Date, the
      Non-Defaulting Party will calculate and deliver the Termination Settlement
      Statement to the Defaulting Party, reflecting the unpaid amounts owing to the
      Non-Defaulting Party and the unpaid amounts owing to the Defaulting Party.
      Unless otherwise provided in the Master Netting Agreement, the Party owing
      the
      greater aggregate amount shall pay the difference between the amounts owed
      to
      the other Party by wire transfer in immediately available funds within two
      (2)
      Business Days of delivery of the Termination Settlement Statement. 

     

    Section
      8.8 MMC
      Energy North America LLC as Billing, Payment and Collection Agent.
For
      purposes of this Article VIII, MMC Energy North America, LLC shall act as
      billing, payment and collection agent for itself or for or on behalf of MMC
      Chula Vista, LLC and MMC Escondido, LLC, and any and all amounts due to be
      paid
      to MMC from Energy Manager, and any and all amounts due to be paid to Energy
      Manager from MMC, pursuant to this Agreement and any EEI Master Agreements
      shall
      be paid to or from, as applicable, MMC Energy North America LLC; provided,
      however, that MMC Energy North America, LLC, MMC Chula Vista, LLC and MMC
      Escondido, LLC shall each be jointly and severally liable as principals for
      any
      and all payment obligations due to Energy Manager arising under this Agreement,
      all EEI Master Agreements, the Master Netting Agreement and the Collateral
      Annex. Notwithstanding the foregoing, MMC Energy North America, LLC’s actions as
      billing, payment and collection agent for MMC Chula Vista, LLC and MMC
      Escondido, LLC, hereunder does not and shall not result in MMC Energy North
      America, LLC at any time taking title to any Power or Gas, or entering into
      any
      Transaction with Energy Manager under this Agreement or any EEI Master
      Agreement. 

     

    ARTICLE
      IX.

    FORCE
      MAJEURE

     

    Section
      9.1 Applicable
      Definition and Procedures of Force Majeure.
      Force
      Majeure shall be defined as, with respect to the Party claiming Force Majeure
      under this Agreement, any event or a combination of events that such Party
      could
      not reasonably control, foresee or prevent, and the occurrence of which neither
      the claiming Party nor its respective agents or employees, have contributed
      to,
      which events materially impede a Party from performing its obligations under
      this Agreement. Such Force Majeure events shall include, without being limited
      to, the following:

     

    (a)  acts
      of a
      public enemy, war or threat of war (declared or undeclared) occurring in or
      involving the United States, revolution, riot, rebellion, insurrection, military
      or usurped power, state of siege, declaration of a state of emergency or martial
      law (or any of the events or circumstances that will or may result in the
      declaration of a state of emergency or martial law), civil commotion, act of
      terrorism, vandalism or sabotage (in each case occurring in or involving the
      United States), embargo or blockade, declaration of public calamity (or any
      of
      the events or circumstances that will or may result in the declaration of public
      calamity);

     

    (b)  politically
      motivated or otherwise widespread strikes, suspensions, interruptions, work
      slow-downs or other labor disruptions;

     

    (c)  explosions,
      chemical or radioactive contamination or ionizing radiation;

     

    
      [***]
        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)  air
      crashes, objects falling from aircraft, pressure waves caused by aircraft or
      aerial devices traveling at supersonic speed;

     

    (e)  any
      exercise of sovereign or executive prerogative or similar action by a
      Governmental Authority;

     

    (f)  any
      change in Applicable Law, or restraint or action or inaction of a Governmental
      Authority, resulting in a material change in a Regulatory Approval, or that
      has
      the effect of curtailing or otherwise materially restraining the output of
      either Facility; or

     

    (g)  epidemics,
      meteorites, fire, lightning, earthquake, cyclone, whirlwind, hurricane,
      earthquake, tempest, storm, drought, flood, or other unusual or extreme adverse
      weather or environmental condition or action of the elements; 

     

    provided,
      that
      Force Majeure shall not
      include
      (i) lack of a market or unfavorable market conditions for Gas or Power, (ii)
      economic hardship, (iii) failure to timely apply for or obtain, or comply with,
      Applicable Law or Regulatory Approval(s), (iv) the ability to sell Gas or Power
      to another Person at a higher price, or buy Gas or Power from another Person
      at
      a lower price, or on more favorable terms than those afforded by this Agreement
      or (v) the Bankruptcy of a Third Party (including CAISO) or such Third Party’s
      inability to make payments pursuant to the terms of a Power Transaction
      (including for Ancillary Services) or a Gas Transaction. 

     

    Section
      9.2
      Procedure For Calling Force Majeure.
      If one
      Party wishes to claim relief from the performance of its obligations arising
      under this Agreement on account of any event or circumstance of Force Majeure
      (hereinafter, the “Affected
      Party”),
      then
      the Affected Party shall give written notice to the other Party of such event
      or
      circumstance as soon as reasonably practicable after becoming aware of such
      event or circumstance. Each notice served by an Affected Party to the other
      Party pursuant to this Article 9 shall specify the event or circumstance of
      Force Majeure in respect of which the Affected Party is claiming relief and
      the
      steps being taken to mitigate and overcome the effects of such event or
      circumstances. Noncompliance by the Affected Party with the procedure specified
      herein shall relieve the other Party from accepting the Affected Party’s claim
      until notice is so provided. The Affected Party shall, by reason of any event
      or
      circumstance of Force Majeure in respect of which it has claimed relief under
      this Section 9.2:

     

    (a)  use
      its
      commercially reasonable efforts to mitigate the effects of such Force Majeure
      and to remedy any inability to perform its obligations hereunder due to such
      events as promptly as reasonably practicable; provided,
      that:
      (i) the Affected Party shall not be obliged to take any steps that would not
      be
      in accordance with Prudent Utility Practice or Applicable Laws or that would
      be
      beyond its control; and (ii) the Affected Party shall not be required to settle
      any strikes or other labor disputes on terms that are adverse to the Affected
      Party and not commercially reasonable;

     

    (b)  furnish
      periodic reports to the other Party regarding the progress in overcoming the
      adverse effects of such event of Force Majeure and setting forth its best,
      good
      faith estimate concerning when it will be able to resume the performance of
      its
      obligations under this Agreement; and

     

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

    

     

    
      
        
          
          

        

        
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    (c)  resume
      the performance of its obligations under this Agreement as soon as is reasonably
      practicable after the events of Force Majeure are remedied or cease to
      exist.

     

    Section
      9.3
      Performance Suspended.
      During
      the continuance of any Force Majeure, the obligations of an Affected Party
      under
      this Agreement, other than any obligation of either Party to pay money when
      due
      under the terms of this Agreement, shall be suspended to the extent such
      condition results in the Affected Party’s inability to perform its
      obligations.

     

    Section
      9.4
      End
      of Force Majeure Event.
      When
      the Affected Party is able, or would have been able if it had complied with
      its
      obligations under Section 9.2, to resume the performance of all of its
      obligations under this Agreement affected by the occurrence of an event or
      circumstance of Force Majeure, then the period of Force Majeure relating to
      such
      event or circumstance shall be deemed to have ended.

     

    ARTICLE
      X.

    EVENTS
      OF DEFAULT; TERMINATION

     

    Section
      10.1
      Energy Manager Events of Default.
      The
      occurrence of any one or more of the following events shall constitute an Energy
      Manager Event of Default (“Energy
      Manager Event of Default”)
      under
      this Agreement:

     

    (a)  the
      failure by Energy Manager to make, when due, any payment required under this
      Agreement if such failure is not remedied within three (3) Business Days after
      written notice of such failure is received by Energy Manager; or 

     

    (b)  the
      failure by Energy Manager to perform any material covenant or agreement set
      forth in this Agreement (other than as described in Sections 10.1(c) or 10.1(d))
      and such failure is not cured within three (3) Business Days after written
      notice is received by Energy Manager; or 

     

    (c)  Energy
      Manager’s Bankruptcy; or 

     

    (d)  Energy
      Manager shall either: (i) fail to maintain in full force and effect any
      Regulatory Approval necessary for the performance of the Services hereunder
      or
      for the purchase and sale of Gas or Power (including but not limited to
      Ancillary Services); or (ii) become subject to an order by any Governmental
      Authority whereby such Governmental Authority revokes or suspends any Regulatory
      Approval necessary for the performance of the Services hereunder or for the
      purchase and sale of Gas or Power (including but not limited to Ancillary
      Services); or

     

    (e)  any
      representation or warranty of Energy Manager proves to have been incorrect
      in
      any material respect as of the Effective Date. 

     

    
      [***]
        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
        10.2
        MMC
        Events of Default.
        The
        occurrence of any one or more of the following events shall constitute a
        MMC
        Event of Default (“MMC
        Event of Default”)
        under
        this Agreement:

    

     

    (a)  the
      failure by MMC to make, when due, any payment required under this Agreement
      if
      such failure is not remedied within three (3) Business Days after written notice
      of such failure is received by MMC; or 

     

    (b)  the
      failure by MMC to perform any material covenant or agreement set forth in this
      Agreement (other than as described in Sections 10.2(c), 10.2(d), 10.2(f), or
      10.2(g)) and such failure is not cured within three (3) Business Days after
      written notice is received by MMC or the Facility; or 

     

    (c)  MMC’s
      or
      MMC Guarantor’s Bankruptcy; or

     

    (d)  MMC
      shall
      either (i) fail to maintain in full force and effect any material Regulatory
      Approval necessary to operate each Facility, or (ii) become subject to an order
      by any Governmental Authority whereby such Governmental Authority revokes or
      suspends any Regulatory Approval necessary for the operation of each Facility;
      or

     

    (e)  MMC
      shall
      either: (i) fail to maintain in full force and effect any Regulatory Approval
      necessary for the purchase and sale of Gas or Power (including, but not limited
      to Ancillary Services); or (ii) become subject to an order by any Governmental
      Authority whereby such Governmental Authority revokes or suspends any Regulatory
      Approval necessary for the purchase and sale of Gas or Power (including, but
      not
      limited to Ancillary Services); or

     

    (f)  any
      representation or warranty of MMC proves to have been incorrect in any material
      respect as of the Effective Date; or

     

    (g)  MMC
      or
      MMC Guarantor fails to provide, maintain in full force and effect, or comply
      with the MMC Credit Support obligations provided in Article 15. 

     

    Section
      10.3
      Rights of Non-Defaulting Party.
      

     

    (a)  When
      an
      Event of Default exists, the Non-Defaulting Party shall have the right to:
      (i)
      cause termination, liquidation, or acceleration of this Agreement, in whole
      or
      with respect to MMC, effective five (5) Business Days after receipt by the
      Defaulting Party of a Termination (Default) Notice by the Non-Defaulting Party
      (the “Default Termination Date”); (ii) suspend performance under this Agreement;
      (iii) withhold any payments due to the Defaulting Party under this Agreement;
      (iv) net, setoff, or recoup termination values, payment amounts or other
      transfer obligations arising under or in connection with this Agreement,
      including with respect to any Transaction; and/or (v) pursue any other remedy
      at
      law, in equity, or as provided under this Agreement. The Termination (Default)
      Notice shall specify in reasonable detail the circumstances giving rise to
      the
      Termination (Default) Notice.

     

    (b)  Notwithstanding
      the foregoing: (i) MMC has the right to terminate this Agreement, in whole
      or
      with respect either Facility, immediately in the case of the default under
      Section 10.1(c) or 10.1(d), pursuant to a Termination (Default) Notice; and
      (ii)
      Energy Manager has the right to terminate this Agreement, in whole or with
      respect to MMC, immediately in the case of default under Section 10.1(c) or
      10.1(d) pursuant to a Termination (Default) Notice. Such Termination (Default)
      Notice shall not delay the Default Termination Date. 

     

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

    

     

    
      
        
          
          

        

        
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    ARTICLE
      XI.

    INDEMNIFICATION

     

    Section
      11.1
      Indemnification by Energy Manager.
      Energy
      Manager shall indemnify, defend and hold harmless MMC from and against any
      and
      all Losses to the extent directly caused by: (a) the breach of any
      representation or warranty made by Energy Manager under this Agreement; (b)
      any
      breach by, or failure of, Energy Manager to perform any of its obligations
      under
      this Agreement; or (c) the gross
      negligence or willful misconduct of Energy Manager, its subcontractors or their
      respective agents or employees.

     

    Section
      11.2
      Indemnification By MMC.
      MMC
      shall indemnify, defend and hold harmless Energy Manager from and against any
      and all Losses arising out of or resulting from: (a) the Services provided
      by
      Energy Manager under this Agreement; (b) the breach of any representation or
      warranty made by MMC under this Agreement; (c) any failure of MMC to perform
      its
      obligations under this Agreement; or (d) any negligent or tortious acts or
      omissions by MMC, its subcontractors (other than Energy Manager and its
      subcontractors or their respective agents or employees) or their respective
      agents or employees. 

     

    Section
      11.3 Cooperation
      Regarding Claims.
      If
      either Party receives notice or has knowledge of any claim that may result
      in a
      claim for indemnification of Energy Manager by MMC or indemnification of MMC
      by
      Energy Manager pursuant to this Agreement, the Party in receipt of such notice
      shall, as promptly as possible, give the other Party notice of such claim,
      including a reasonably detailed description of the facts and circumstances
      relating to such claim, and a complete copy of all notices, pleadings and other
      papers related thereto.

     

    Section
      11.4
      Defense of Third-Party Claims.

     

    (a)  An
      Indemnified Party shall promptly provide the Indemnifying Party reasonably
      detailed written notification of any claims for Losses that might reasonably
      be
      expected to be subject to indemnification under this Agreement; provided,
      however,
      that
      failure to provide such prompt notice shall not relieve the Indemnifying Party
      of its obligations hereunder except to the extent such Indemnifying Party is
      prejudiced by such delay.

     

    (b)  An
      Indemnifying Party shall be entitled at its option and at its expense and with
      counsel of its selection, to assume and control the defense of any claims for
      Losses.

     

    (c)  An
      Indemnifying Party shall not settle or compromise any claim without the prior
      written consent of the Indemnified Party; provided,
      however,
      that an
      Indemnifying Party may settle or compromise such claim against an Indemnified
      Party without the consent of such Indemnified Party so long as such claim is
      solely for monetary damages that are paid in full by the Indemnifying Party
      and
      such Indemnified Party is fully released from liability by the
      claimant.

     

    (d)  Each
      Indemnified Party shall cooperate with its Indemnifying Party in connection
      with
      its defense or settlement of any claim of Losses.

     

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

    

     

    
      
        
          
          

        

        
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    ARTICLE
      XII.

    LIMITATION
      OF LIABILITY

     

    Section
      12.1
      General Limitations of Liability.

     

    (a) 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, 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.

     

    (b) NEITHER
      PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR
      INDIRECT DAMAGES, OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT
      OR
      CONTRACT, OR OTHERWISE.
      The
      Parties further agree that the waivers and disclaimers of liability,
      indemnities, releases from liability, and limitations on liability expressed
      in
      this Agreement shall survive termination of this Agreement, and shall apply
      at
      all times, whether in contract, equity, tort or otherwise.

     

    (c) 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.

     

    (d) NOTWITHSTANDING
      ANY PROVISION OF
      THIS
      AGREEMENT, THE TOTAL LIABILITY OF ENERGY MANAGER UNDER THIS AGREEMENT SHALL
      NOT
      EXCEED [***].
      

     

    Section
      12.2
      Limitation of MMC’s Liability.
      Energy
      Manager understands and agrees that, notwithstanding anything to the contrary
      herein: (a) no claim shall be made against any employee, shareholder, partner,
      member, representative, officer or director, whether past, present or future,
      of
      MMC in connection with this Agreement; (b) there shall be absolutely no personal
      liability or recourse for the payment of any amounts due hereunder, or the
      performance of any obligations hereunder against any employee, shareholder,
      partner, member, representative, officer or director, whether past, present
      or
      future, of MMC, irrespective of any failure to comply with the provisions of
      this Agreement; (d) Energy Manager shall have no right to any claim against
      MMC
      for any capital contributions from any employee, shareholder, partner, member,
      representative, officer or director, whether past, present or future, of MMC;
      and (e) the provisions of (a) through (d) are made expressly for the benefit
      of
      employees, shareholders, partners, members, representatives, officers and
      directors, whether past, present or future, of MMC.

     

    
      [***]
        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
      12.3
      Limitation of Energy Manager’s Liability.
      MMC
      understands and agrees that, notwithstanding anything to the contrary herein:
      (a) no claim shall be made against any employee, shareholder, partner, member,
      representative, officer or director, whether past, present or future, of Energy
      Manager in connection with this Agreement; (b) there shall be absolutely no
      personal liability or recourse for the payment of any amounts due hereunder,
      or
      the performance of any obligations hereunder against any employee, shareholder,
      partner, member, representative, officer or director, whether past, present
      or
      future, of Energy Manager, irrespective of any failure to comply with the
      provisions of this Agreement; (c) MMC shall have no right to any claim against
      Energy Manager for any capital contributions from any employee, shareholder,
      partner, member, representative, officer or director, whether past, present
      or
      future, of Energy Manager; and (d) the provisions of (a) through (c) are made
      expressly for the benefit of employees, shareholders, partners, members,
      representatives, officers and directors, whether past, present or future, of
      Energy Manager.

     

    ARTICLE
      XIII.

    CONFIDENTIALITY

     

    Section
      13.1
      Non-Disclosure.
      Except
      as provided in Section 13.2, each Party agrees to hold in confidence any
      information imparted to it by the other Party which pertains to MMC’s or Energy
      Manager’s, as the case may be, business activity in any manner, and which is not
      the subject of general public knowledge, including, without limitation,
      proprietary processes (including analytics, models and frameworks), technical
      information and know-how, information concerning MMC management policies,
      economic policies, financial and other data (“Confidential
      Information”).
      Confidential Information shall not include: (a) information in the public
      domain, or (b) information obtained by a Party from a Third Party not under
      an
      obligation of nondisclosure to MMC or Energy Manager, as the case may be. This
      obligation shall continue to remain in full force and effect for two (2) years
      after the date of termination of this Agreement.

     

    Section
      13.2
      Permitted Disclosure.
      

     

    (a)  Either
      Party shall have the right to: (i) disclose Confidential Information (the
“Disclosing
      Party”)
      to any
      Governmental Authority only to the extent that such Confidential Information
      is
      necessary to comply with such Governmental Authority to avoid legal sanctions
      or
      penalties, including findings of criminal or civil contempt; and (ii) disclose
      Confidential Information with respect to any litigation arising in connection
      with this Agreement only to the extent that such Confidential Information is
      required by law, rule, regulation, procedure, subpoena, court order or court
      requirement, or is material to the issues involved in or determinative to the
      outcome of such litigation; provided,
      however,
      that
      the Disclosing Party shall first (A) give the other Party (the “Non-Disclosing
      Party”)
      as
      much prior notice of disclosure as is reasonably practicable, or if prior notice
      is not reasonably practicable, then as expeditiously as possible, to permit
      the
      Non-Disclosing Party to seek any protective order or other confidentiality
      protection as the Non-Disclosing Party, in its sole discretion and at its sole
      expense, may elect to seek; and (B) reasonably cooperate with the Non-Disclosing
      Party in protecting the Confidential Information that is to be disclosed, with
      such duty of cooperation not requiring the Disclosing Party to initiate or
      participate in any litigation or incur more than de
      minimis
      costs or
      expenses. 

     

    
      [***]
        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)  Either
      Party shall have the right to disclose Confidential Information: (i) with the
      written consent of the other Parties; or (ii) to (a) its agents, advisors,
      auditors, legal counsel and insurers; (b) its Affiliates; (c) Lenders, potential
      Lenders, investors, potential investors, rating agencies and other members
      of
      the public in connection with the financing of the development, construction
      and
      operation of either Facility, including in connection with the listing of any
      shares, stocks, securities, bonds or any other similar financial instrument,
      but
      in each case only to the extent required in connection with obtaining such
      financing and (d) potential purchasers of an interest in MMC or any Facility;
      provided,
      however,
      any
      such party receiving any Confidential Information agrees to maintain the
      confidentiality of such Confidential Information in accordance with the terms
      hereof. Lenders shall be entitled to disclose Confidential Information to any
      Governmental Authority or in connection with litigation to the extent and
      subject to the conditions under which a Disclosing Party may disclose
      Confidential Information as provided in Section 13.2(a). Notwithstanding the
      foregoing, it shall not be deemed a breach of this Section 13.2(b) if a Party
      discloses the terms or conditions of a Transaction (other than the name and
      any
      other identifying information relating to the other Party), provided
      that the
      name or any other identifying information relating to the other Party may be
      disclosed only to an entity that aggregates and reports to the public price
      data
      on an aggregate basis.

     

    ARTICLE
      XIV.

    REPRESENTATIONS
      AND WARRANTIES

     

    Section
      14.1
      Energy Manager Representations and Warranties.
      Energy
      Manager represents and warrants to MMC as of the Effective Date, and to MMC
      as
      of the Effective Date, that:

     

    (a)  Organization
      and Good Standing.
      Energy
      Manager is a limited partnership duly formed, validly existing and in good
      standing under the laws of the State of Delaware.

     

    (b)  Enforceability.
      This
      Agreement constitutes the legal, valid and binding obligation of Energy Manager,
      except as enforceability may be limited by (i) applicable Bankruptcy,
      insolvency, reorganization, moratorium or similar laws affecting the rights
      of
      creditors generally, and (ii) general principles of equity.

     

    (c)  Due
      Authorization.
      The
      execution, delivery and performance of this Agreement by Energy Manager has
      been
      duly authorized by all requisite partnership action and does not and will not
      (i) conflict with any provisions of its organizational documents or any
      Applicable Law, or (ii) breach any provision of, or give any Person the right
      to
      declare or exercise any remedy under, or to accelerate the maturity, payment
      or
      performance of, or to cancel or terminate, any agreement or instrument to which
      it is a party or by which it, its property or assets may be bound or affected,
      except for those that would not materially adversely affect Energy Manager’s
      ability to perform its obligations hereunder.

     

    
      [***]
        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)  Regulatory
      Approvals.
      Neither
      the execution and delivery by Energy Manager of this Agreement, nor the
      consummation by Energy Manager of any of the Transactions contemplated hereby,
      requires the consent or approval of, the registration with, the recording or
      filing of any document with, or the taking of any other action in respect of
      any
      Governmental Authority, except those which have been duly obtained and are
      in
      full force and effect, except for those that would not materially adversely
      affect Energy Manager’s ability to perform its obligations hereunder;
provided,
      however,
      that
      Energy Manager may file with the FERC such notices, if any, that it determines
      are necessary. 

     

    (e)  Litigation.
      Energy
      Manager is not a party to any legal, administrative, arbitral, investigatorial
      or other proceeding or controversy pending, or to its knowledge, threatened,
      that could materially adversely affect its ability to perform its obligations
      hereunder.

     

    (f)  Forward
      Contract Merchant, Swap Participant and Master Netting Agreement.
      Energy
      Manager is a “forward contract merchant” and / or a “swap participant” and this
      Agreement is a “master netting agreement” within the meaning of the Bankruptcy
      Code. 

     

    (g)  Contracted
      Marketer.
      Energy
      Manager shall use commercially reasonable efforts to maintain its status as
      a
“gas service provider and contracted marketer” as defined by San Diego Gas &
Electric Co.

     

    Section
      14.2
      MMC
      Representations and Warranties.
      MMC
      represents and warrants to Energy Manager, as of the Effective Date,
      that:

     

    (a)  Organization
      and Good Standing.
      MMC
      Energy North America, MMC Energy Chula Vista, LLC and MMC Escondido LLC are
      each
      a limited liability company duly formed, validly existing and in good standing
      under the laws of the State of Delaware. 

     

    (b)  Enforceability.
      This
      Agreement constitutes the legal, valid and binding obligation of MMC, except
      as
      enforceability may be limited by (i) applicable Bankruptcy, insolvency,
      reorganization, moratorium or similar laws affecting the rights of creditors
      generally and (ii) general principles of equity.

     

    (c)  Due
      Authorization.
      The
      execution, delivery and performance of this Agreement by MMC has been duly
      authorized by all requisite corporate action and does not and will not (i)
      conflict with any provisions of its organizational documents or any Applicable
      Law, or (ii) breach any provision of, or give any Person the right to declare
      or
      exercise any remedy under, or to accelerate the maturity, payment or performance
      of, or to cancel or terminate, any agreement or instrument to which it is a
      party or by which it, its property or assets may be bound or affected, except
      for those that would not materially adversely affect MMC’s ability to perform
      its obligations hereunder.

     

    
      [***]
        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)  Regulatory
      Approvals.
      Neither
      the execution and delivery by MMC of this Agreement, nor the consummation by
      MMC
      of any of the Transactions contemplated hereby, requires the consent or approval
      of, the giving of notice of to, the registration with, the recording or filing
      of any document with, or the taking of any other action in respect of any
      Governmental Authority, except those which have been duly obtained and are
      in
      full force and effect, except for those that would not materially adversely
      affect MMC’s ability to perform its obligations hereunder; provided,
      however,
      that
      MMC may file with the FERC such notices, if any, that it determines are
      necessary. 

     

    (e)  Litigation.
      MMC is
      not a party to any legal, administrative, arbitral, investigatorial or other
      proceeding or controversy pending or, to its knowledge, threatened, that could
      materially adversely affect its ability to perform its obligations hereunder.
      

     

    (f)  Forward
      Contract Merchant, Swap Participant and Master Netting Agreement.
      MMC is
      a “forward contract merchant” and/or a “swap participant” and this Agreement is
      a “master netting agreement” within the meaning of the Bankruptcy
      Code.

     

    ARTICLE
      XV.

    FINANCIAL
      PERFORMANCE 

     

     MMC
      Credit Support.
      By
      December 15, 2006, MMC shall cause to be provided and maintained for the benefit
      of Energy Manager, collateral (the “MMC
      Credit Support”),
      in
      the form of a guaranty agreement provided by the MMC Guarantor in the form
      of
      Exhibit E attached hereto, or in any other form acceptable to Energy
      Manager.

     

    ARTICLE
      XVI.

    MISCELLANEOUS

     

    Section
      16.1
      Severability.
      If any
      provision in this Agreement is determined to be invalid, void or unenforceable
      by any court having jurisdiction, such determination shall not invalidate,
      void,
      or make unenforceable any other provision, agreement or covenant of this
      Agreement.

     

    Section
      16.2
      Entire Agreement.
      This
      Agreement, together with the Exhibits, the EEI Master Agreements, Collateral
      Annex and the Master Netting Agreement, contain the complete agreement between
      the Parties with respect to the provision of Services as contained herein and
      supersedes all other agreements, whether written or oral, with respect to the
      matters contained herein.
      In the
      event of a conflict between this Agreement, the EEI Master Agreements, the
      Collateral Annex or the Master Netting Agreement, first, the Master Netting
      Agreement shall prevail, and, second, if the conflict between the agreements
      cannot be resolved under the Master Netting Agreement, this Agreement shall
      prevail.

     

    Section
      16.3
      Amendment.
      Unless
      otherwise provided herein, no modification, amendment, or other change to this
      Agreement or the Exhibits will be binding on any Party unless consented to
      in
      writing by both Parties; provided,
      that
      MMC may revise the Operating and Dispatch Procedures as described herein.

     

    Section
      16.4
      Assignment; Obligation of Energy Manager to Cooperate.
      This
      Agreement shall be binding upon the successors and assigns of the respective
      Parties hereto, and the covenants, conditions, rights and obligations of this
      Agreement shall run until the Agreement is terminated. No assignment of this
      Agreement, in whole or in part, shall be made without the prior written consent
      of the non-assigning Party, which consent shall not be unreasonably withheld,
      conditioned or delayed. 

     

    
      [***]
        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
      16.5
      Notices.
      All
      notices or other communications required or permitted to be given hereunder
      shall be in writing and shall be effective (a) on the day of delivery when
      delivered in person; (b) on the day (if a Business Day and, if not, on the
      next following Business Day) on which it is transmitted if transmitted before
      four o’clock (4:00) p.m., recipient’s time (on any day), and if transmitted
      after that time, on the next following Business Day, when sent by telecopy
      or
      other electronic means and electronic confirmation of error free receipt is
      received; or (c) one (1) Business Day after the day when sent by overnight
      delivery by a recognized commercial courier service. Either Party may change
      its
      address[es] for notices by giving notice to the other Party in the manner set
      forth above.

     

    (a)  Notices
      or other communications to MMC
      shall
      be directed to the representatives listed below.

    
       

      
        	
                Notices
                  & Correspondence

              	
                Scheduling
                  & Operations

              	
                Payments

              
	
                Dennis
                  Gagnon

                Chief
                  Financial Officer

                MMC
                  Energy, Inc.

                26
                  Broadway, Suite 907

                New
                  York, NY 10004

                Telephone:
                  1-212-977-0900

                Telefacsimile:
                  1-212-785-7640

                 

                With
                  a copy to:

                Dean
                  M. Colucci, Esq.

                DLA
                  Piper US LLP

                1251
                  Avenue of the Americas

                New
                  York, NY 10020

                Telephone:
                  1-212-335-4794

              	
                Marty
                  Quinn

                Alex
                  Sokoletsky

                MMC
                  Energy Inc.

                26
                  Broadway, Suite 907

                New
                  York, NY 10004

                Telephone:
                  1-212-785-5279

                Telefacsimile:
                  1-212-785-7640

              	
                Simba
                  Dutt-Mazumdar

                MMC
                  Energy Inc.

                26
                  Broadway, Suite 907

                New
                  York, NY 10004

                Telephone:
                  1-212-785-5279

                Telefacsimile:1-212-785-7640

              

      

       

    

    (b)  Notices
      or other communications to Energy
      Manager shall be directed to the representatives listed below.

    
       

        
          	
                  Notices
                    & Correspondence

                	
                  Scheduling
                    & Operations

                	
                  Payments

                
	
                  Bear
                    Energy LP

                  c/o
                    General Counsel

                  700
                    Louisiana Street, Suite 1000

                  Houston,
                    Texas 77002

                  (713)
                    236-3047

                	
                  Day-Ahead
                    Desk: 

                  (713)
                    236-3035

                   

                  Real-Time
                    Desk: 

                  (713)
                    830-8730

                	
                  [***]

                

        

       

    

    Section
      16.6
      Additional Documents and Actions.
      Each
      Party agrees to execute and deliver from time to time such additional documents,
      and take such additional actions, as may be reasonably required by the other
      to
      give effect to the purposes and intent of this Agreement.

     

    Section
      16.7
      Waiver.
      Any
      failure of any Party to enforce any of the provisions of this Agreement or
      to
      require compliance with any of its provisions at any time during the pendency
      of
      this Agreement shall in no way affect the validity of this Agreement, or any
      part hereof, and shall not be deemed a waiver of the right of any Party
      thereafter to enforce any and each such provision. None of the provisions of
      this Agreement shall be considered waived by a Party (by course of dealing
      or
      otherwise) unless such waiver is in writing and signed by such Party. No waiver
      shall be construed as a modification of any of the provisions of this Agreement
      or as a waiver of any default (present or future) hereunder or breach hereof,
      except as expressly stated in such waiver.

     

    Section
      16.8
      Headings.
      The
      headings and captions contained in this Agreement are for convenience and
      reference only and in no way define, describe, extend or limit the scope or
      intent of this Agreement or the intent of any provision contained herein.

     

    Section
      16.9
      No
      Third Party Beneficiary.
      This
      Agreement is for the sole and exclusive benefit of the Parties hereto and the
      Indemnified Parties and shall not create a contractual relationship with, or
      cause of action in favor of, any Third Party.

     

    
      [***]
        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
      16.10
      Counterparts.
      This
      Agreement may be executed in one or more counterparts each of which shall be
      deemed an original and all of which shall be deemed one and the same
      Agreement.

     

    Section
      16.11
      Governing Law and Venue.
      THIS
      AGREEMENT SHALL BE INTERPRETED AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE
      OF NEW YORK, EXCLUSIVE OF ITS CONFLICTS OF LAWS PRINCIPLES CALLING FOR
      APPLICATION OF THE LAWS OF ANOTHER STATE (OTHER THAN SECTION 5-1401 OF THE
      NEW
      YORK GENERAL OBLIGATIONS LAW). The Parties hereby irrevocably consent to
      exclusive venue and jurisdiction in the federal courts in the Southern District
      of New York. The Parties hereby irrevocably waive their right to a jury trial
      to
      the fullest extent permitted by law.

     

    Section
      16.12
      Continued Performance.
      The
      Parties shall continue to perform under this Agreement during the pendency
      of
      any dispute hereunder.

     

    Section
      16.13
      MMC
      Control.
      Notwithstanding anything in this Agreement to the contrary, MMC retains and
      shall retain ultimate decision-making authority and control with respect to
      each
      respective Facility for purposes of Part II of the FPA, including ultimate
      decision-making authority and control relating to the operation of such Facility
      and the sale of Power (including Ancillary Services) from such Facility. Without
      limiting the generality of the foregoing sentence with respect to MMC, neither
      Energy Manager nor its agent has the ability under this agreement or otherwise
      to direct the dispatch of, or sales from, each Facility with respect to Capacity
      that is subject to a tolling agreement. 

     

    Section
      16.14
      Survival.
      Notwithstanding any provisions herein to the contrary, the obligations set
      forth
      in Section 6.4(b) shall survive termination as set forth in such section, and
      the obligations of each Party in Articles VIII and XIII shall survive
      indefinitely. 

     

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    EXECUTION COPY

     

    IN
      WITNESS WHEREOF, the following Parties have executed this Agreement as of the
      21st day of November, 2006. 

    
      	 	 	 
	 	
              MMC
                ENERGY NORTH AMERICA, LLC

            
	 
 	 
 	 
 
	
            	By:  	/s/
              Alex
              Sokoletsky
	 	
              

              Name:
                Alex Sokoletsky

              Title:
                Vice-President

            

    

    
      	 	 	 
	 	
              MMC
                ENERGY CHULA VISTA, LLC

            
	 
 	 
 	 
 
	 	By:  	/s/
              Alex
              Sokoletsky
	 	
              

              Name:
                Alex Sokoletsky

              Title:
                Vice-President

            

    

    
      	 	 	 
	 	
              MMC
                ESCONDIDO, LLC

            
	 
 	 
 	 
 
	
            	By:  	/s/
              Alex
              Sokoletsky
	 	
              

              Name:
                Alex Sokoletsky

              Title:
                Vice-President

            

    

    
      	 	 	 
	 	
              BEAR
                ENERGY LP

            
	 
 	 
 	 
 
	
            	By:  	/s/ JoAnn
              P. Russell
	 	
              

              Name:
                JoAnn P. Russell

              Title:
                Managing Director

            

    

     

    
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        Securities and Exchange Commission pursuant to a confidential treatment
        request.

       

    

    
      
        
          
          

        

        
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        EXECUTION COPY

         

      

    

    Exhibit
      A

    Protocols

     

    [***]

     

    
      [***]
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        Securities and Exchange Commission pursuant to a confidential treatment
        request.

    

     

    
      
        
          
          

        

        
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      EXECUTION COPY

       

    

    Exhibit
      B

    Fuel
      Supply Pricing Schedule 

    

    [***]

     

    
      [***]
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        Securities and Exchange Commission pursuant to a confidential treatment
        request.

    

     

    
      
        
          
          

        

        
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      EXECUTION COPY

       

    

    Exhibit
      C

    Facility
      Budget

    

    [***]

     

    
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        Securities and Exchange Commission pursuant to a confidential treatment
        request.

    

    
 

    
      
        
          
          

        

        
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      EXECUTION COPY

       

    

    Exhibit
      D

    Contacts

    

    
      	
              MMC
                Energy North America, LLC. - Contact List

            
	
              Contact

            	
              Email

            	
              Phone

            	
              Mobile

            

    

    

    [***]

    

    
      	
              Bear
                Energy LP - Contact List

            
	
              Contact

            	
              Email

            	
              Phone

            	
              Mobile

            

    

    

    [***]

     

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

    

     

    
      
        
          
          

        

        
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    EXECUTION COPY

     

    Exhibit
      E

    Form
      of Guaranty

     

    GUARANTY

    

    GUARANTY,
      dated
      as of [·],
      by
MMC
      ENERGY, INC.,
      a
      Delaware corporation (the “Guarantor”),
      in
      favor of BEAR
      ENERGY LP,
      a
      limited partnership organized under the laws of the State of Delaware (the
      “Beneficiary”).

    

    
      
        	(a)	
                Guaranty.

              

      

    

    

    
      	
            	(i)	
              In
                connection with the EEI Master Power Purchase and Sale Agreement,
                dated as
                of {Master Agreement date} (the “Master
                Agreement”),
                and the Energy Management Agreement dated as of January 1, 2007 (the
                “Agreement”),
                between Beneficiary and MMC Energy North America, LLC, MMC Energy
                Chula
                Vista, LLC and MMC Escondido, LLC, each a limited liability company
                organized and existing under the laws of the State of Delaware,
                (collectively the “Counterparty”),
                subject to the terms and conditions set forth herein and effective
                from
                the date of the Agreement, the Guarantor irrevocably and unconditionally
                guarantees to the Beneficiary, its successors and permitted assigns,
                the
                prompt payment on demand, of any amount due and payable to the Beneficiary
                under the Agreement, subject to any applicable grace period thereunder
                (the “Obligations”).

            

    

    

    
      	
            	(ii)	
              The
                Guarantor hereby waives acceptance of this Guaranty, diligence,
                promptness, presentment, demand on Counterparty for payment, protest
                of
                nonpayment and all notices of any kind. In addition, the Guarantor’s
                obligations hereunder shall not be affected by the existence, validity,
                enforceability, perfection, or extent of any collateral therefor.
                The
                Beneficiary shall not be obligated to proceed against Counterparty
                before
                claiming under the Guaranty nor to file any claim relating to the
                Obligations in the event that Counterparty becomes subject to a
                bankruptcy, reorganization or similar proceeding, and the failure
                of the
                Beneficiary so to file shall not affect the Guarantor’s obligations
                hereunder. The Guarantor agrees that its obligations under this Guaranty
                constitute a guaranty of payment and not of
                collection.

            

    

    

    
      
        
          	(b)	
                  Consents,
                    Waivers and Renewals.
                    The Guarantor agrees that the Beneficiary, may at any time and
                    from time
                    to time, either before or after the maturity thereof, without
                    notice to or
                    further consent of the Guarantor, extend the time of payment
                    of, exchange
                    or surrender any collateral for, or renew any of the Obligations,
                    and may
                    also make any agreement with Counterparty or with any other party
                    to or
                    person liable on any of the Obligations, or interested therein,
                    for the
                    extension, renewal, payment, compromise, discharge or release
                    thereof, in
                    whole or in part, or for any modification of the terms thereof
                    or of any
                    agreement between the Beneficiary and Counterparty or any such
                    other party
                    or person, without in any way impairing or affecting this Guaranty.
                    The
                    Guarantor agrees that the Beneficiary may resort to the Guarantor
                    for
                    payment of any of the Obligations, whether or not the Beneficiary
                    shall
                    have resorted to any collateral security, or shall have proceeded
                    against
                    any other obligor principally or secondarily obligated with respect
                    to any
                    of the Obligations.

                

        

      

    

     

    
      [***]
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        Securities and Exchange Commission pursuant to a confidential treatment
        request.

       

    

    
      
        
          
          

        

        
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      EXECUTION COPY

       

    

    
      	(c)	
              Expenses.
                The Guarantor agrees to pay on demand all out-of-pocket expenses
                (including without limitation the reasonable fees and disbursements
                of
                Beneficiary’s counsel) incurred in the enforcement or protection of the
                rights of the Beneficiary hereunder; provided,
                that the Guarantor shall not be liable for any expenses of the Beneficiary
                if no payment under this Guaranty is
                due.

            

    

    

    
      	(d)	
              Subrogation.
                The Guarantor will not exercise any rights that it may acquire by
                way of
                subrogation until all Obligations to the Beneficiary shall have been
                paid
                in full. If any amount shall be paid to the Guarantor in violation
                of the
                preceding sentence, such amount shall be held for the benefit of
                the
                Beneficiary and shall forthwith be paid to the Beneficiary to be
                credited
                and applied to the Obligations, whether matured or unmatured. Subject
                to
                the foregoing, upon payment of all the Obligations, the Guarantor
                shall be
                subrogated to the rights of the Beneficiary against Counterparty
                and the
                Beneficiary agrees to take at the Guarantor’s expense such steps as the
                Guarantor may reasonably request to implement such
                subrogation.

            

    

    

    
      	(e)	
              Cumulative
                Rights.
                No failure on the part of the Beneficiary to exercise, and no delay
                in
                exercising, any right, remedy or power hereunder shall operate as
                a waiver
                thereof, nor shall any single or partial exercise by the Beneficiary
                of
                any right, remedy or power hereunder preclude any other or future
                exercise
                of any right, remedy or power. Each and every right, remedy and power
                hereby granted to the Beneficiary or allowed it by law or other agreement
                shall be cumulative and not exclusive of any other, and may be exercised
                by the Beneficiary from time to
                time.

            

    

    

    
      	(f)	
              Representations
                and Warranties.

            

    

    

    
      	
            	(i)	
              The
                Guarantor is a corporation duly existing under the laws of the State
                of
                [·].

            

    

    

    
      	
            	(ii)	
              The
                execution, delivery and performance of this Guaranty have been duly
                authorized by all necessary corporate action and do not conflict
                with any
                provision of law, any regulation, or the Guarantor’s charter or by-laws,
                or any agreement binding upon it.

            

    

    

    
      	
            	(iii)	
              No
                consent, approval and authorization of, registration with, or declaration
                to any governmental authority are required in connection with the
                execution, delivery and performance of this
                Guaranty.

            

    

    

    
      	
            	(iv)	
              This
                Guaranty constitutes the legal, valid and binding obligation of the
                Guarantor, enforceable against the Guarantor in accordance with its
                terms,
                subject as to enforcement to bankruptcy, insolvency, reorganization
                and
                other laws of general applicability relating to or affecting creditors’
                rights and to general equity
                principles.

            

    

    

    
      
        	(g)	
                Continuing
                  Guaranty.
                  The Guaranty shall remain in full force and effect and be binding
                  upon the
                  Guarantor and its successors and permitted assigns, and inure to
                  the
                  benefit of the Beneficiary and its successors and permitted assigns,
                  until
                  all of the Obligations have been satisfied in full. In the event
                  that any
                  payment by Counterparty in respect of any Obligations is rescinded
                  or must
                  otherwise be returned for any reason whatsoever, the Guarantor
                  shall
                  remain liable hereunder in respect of such Obligations as if such
                  payment
                  had not been made.

              

      

    

     

    
      [***]
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        Securities and Exchange Commission pursuant to a confidential treatment
        request.

       

    

    
      
        
          
          

        

        
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      EXECUTION COPY

      
        

        
          
            	(h)	
                    
                      Notices.
                        All notices in connection with this Guaranty shall be deemed
                        effective, if
                        in writing and delivered in person or by courier, on the
                        date delivered to
                        the following address (or such other address that the Guarantor
                        shall
                        notify the Beneficiary of in
                        writing):

                    

                  

          

        

         

      

    

    GUARANTOR

    [Address]

    

    Attention:
      

    With
      a
      copy to: 

    

    
      
        	(i)	
                Governing
                  Law.
                  The Guaranty shall be governed by, and construed in accordance
                  with, the
                  laws of the State of New York, without reference to choice of law
                  doctrine.

              

      

    

    

    IN
      WITNESS WHEREOF, this Guaranty has been duly executed and delivered by the
      Guarantor to the Beneficiary as of the date first above written.

     

    
      
        GUARANTOR

        
          	
                  By:

                	 	 

                  

                  Name:

                  
                    Title:

                  

                	 

        

      

    

     

    
      [***]
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        Securities and Exchange Commission pursuant to a confidential treatment
        request.

    

    

    
      
        
        

      

      
        3

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