Stock Purchase Agreement - Enron Asset Holdings LLC, Mirant EcoElectrica Investments I Ltd., Mirant EcoElectric Finance Ltd. and Mirant Corp.


                            Stock Purchase Agreement



                                  by and among



                           Enron Asset Holdings, LLC,



                     Mirant EcoElectrica Investments I, Ltd.



                        Mirant EcoElectrica Finance, Ltd.



                                       and



                               Mirant Corporation







                            Dated as of July 25, 2001











Schedules

Schedule 1                 The Facility
Schedule 2                 Disclosure Schedules
Schedule 2.2               The Holding Subsidiaries
Schedule 2.3               Pledge of Partnership Interests
Schedule 2.5               Miscellaneous Contracts
Schedule 2.6               Financial Statements
Schedule 2.7               No Conflict or Violation
Schedule 2.8               Governmental and Third Party Consents
Schedule 2.9               Litigation
Schedule 2.10              Material Contracts
Schedule 2.13              Environmental Matters
Schedule 2.16              Distributions
Schedule 3.4               Governmental Consents
Schedule 4.2               Restructuring Activities
Schedule 4.3               Guaranteed Indebtedness
Schedule 4.4               Insurance Obligations
Schedule 5.7               Partnership Effect Determination
Schedule 8.1               Other Assets







                            STOCK PURCHASE AGREEMENT

         THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of July 25,
2001 by and among  Enron  Asset  Holdings,  LLC,  a Delaware  limited  liability
company  (the  "Stockholder");   Mirant  Corporation,   a  Delaware  corporation
("Mirant");  Mirant  EcoElectrica  Investments I, Ltd., a British Virgin Islands
limited  liability  company  ("Buyer") and wholly-owned  indirect  subsidiary of
Mirant; and Mirant EcoElectrica Finance,  Ltd., a British Virgin Islands limited
liability company ("Note Buyer") and wholly-owned indirect subsidiary of Mirant.
Capitalized terms used in this Agreement not otherwise defined have the meanings
ascribed to them in Section 8.1 hereof.
                    -----------

     A. Enron LNG Power  (Atlantic)  Ltd., a Cayman  Islands  limited  liability
company (the "Company"), owns an indirect equity interest in EcoElectrica, LP, a
Bermuda limited  partnership  (the  "Partnership"),  and the Partnership  owns a
power  plant  located in Puerto  Rico,  as set forth on  Schedule 1 hereto  (the
"Facility").                                              ----------

     B. The Stockholder  directly owns all of the issued and outstanding  shares
of  Capital  Stock of the  Company,  as  described  in Section  2.3 hereof  (the
"Company Shares").

     C. The Stockholder  desires to sell to Buyer and Note Buyer,  and Buyer and
Note Buyer desire to purchase from the  Stockholder,  all of the Company  Shares
and certain other assets, respectively, on the terms and conditions set forth in
this Agreement.

     NOW,  THEREFORE,  in consideration of the foregoing premises and the mutual
representations,  warranties and agreements set forth herein, and for other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged, the parties hereto agree as follows:

                                    ARTICLE 1
                                SALE AND PURCHASE

     1.1  Agreement  to Sell and  Purchase.  On and subject to the terms of this
          --------------------------------
Agreement,  at the closing of the  transactions  contemplated  by this Agreement
(the "Closing"), (A) the Stockholder shall (i) sell the Company Shares and cause
its  Affiliates  to sell the Other Assets to Buyer,  (ii) cause its Affiliate to
assign the OMFM Agreement to Buyer,  and (iii) cause its Affiliate to assign the
Subordinated  Note to Note Buyer;  (B) Buyer shall, and Mirant shall cause Buyer
to, (i) purchase from the  Stockholder,  the Company Shares,  (ii) purchase from
the  Stockholder's  Affiliates  the  Other  Assets,  and (iii)  assume  from the
Stockholder's  Affiliate,  the OMFM  Agreement;  and (C) Note Buyer  shall,  and
Mirant shall cause Note Buyer to, purchase from the Stockholder's  Affiliate the
Subordinated Note.

     1.2  Purchase  Price.  The  purchase  price  for the  Company  Shares,  the
          ---------------
Subordinated Note, the Other Assets and the OMFM Agreement shall be an aggregate
of (i) two hundred and sixty six million U.S. dollars  ($266,000,000),  less the
aggregate amount of the  Distributions,  plus (ii) 50% of the amount of interest



that  accrues on the  Subordinated  Note after May 31, 2001  through the Closing
Date (provided  that such 50% of such interest  accrual shall not exceed $90,000
per month), plus (iii)----------------------------------------------------------
(the "Purchase Price"), in immediately available funds.

     1.3 Closing.  Subject to Section 1.4 hereof, the Closing will take place at
         -------
the offices of Gibson,  Dunn & Crutcher  LLP, 200 Park Avenue,  New York,  NY on
such date that is three (3)  business  days  after the  conditions  set forth in
Sections  6.1,  6.2(a) and 6.3(a) have either been  satisfied or, in the case of
conditions not satisfied, waived in writing by the party entitled to the benefit
of such conditions (the "Closing Date").

     1.4  Payment  and  Delivery.  At  the  Closing,  provided  that  all of the
          ----------------------
conditions  set forth in Article 6 hereof have either been  satisfied or, in the
case of conditions not satisfied, waived in writing by the party entitled to the
benefit of such conditions:

                  (a)  the  Stockholder  shall  (i)  deliver  to  Buyer  or  its
designees  stock  certificates,  duly endorsed in blank (or  accompanied by duly
executed stock powers),  representing the Company Shares,  (ii) deliver to Buyer
or its designees an executed  Assignment  and Assumption  Agreement  pursuant to
Section 4.5 hereof, and (iii) deliver to Note Buyer the Subordinated Note.

                  (b) Buyer and Note Buyer  shall,  and Mirant shall cause Buyer
and Note Buyer to, in accordance  with the  Stockholder's  duly  authorized wire
transfer or other payment instructions,  (i) pay to the Stockholder the Purchase
Price, and (ii) deliver to the Stockholder an executed Assignment and Assumption
Agreement  pursuant to Section 4.5 hereof. The Purchase Price shall be allocated
among the Company Shares,  the OMFM  Agreement,  the  Subordinated  Note and the
Other Assets in accordance with Section 4.9 hereof.



                                    ARTICLE 2
                REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER

     Each  representation  and warranty contained in this Article 2 is qualified
by the disclosures made in the Disclosure  Schedules  attached hereto as part of
Schedule 2. This Article 2 and the Disclosure  Schedules  shall be read together
as an integrated provision. Except as set forth on the Disclosure Schedules, the
Stockholder  hereby makes the  representations  and  warranties  to Buyer as set
forth below.

     2.1 Organization and Good Standing.  The Stockholder is a limited liability
         ------------------------------
company duly organized,  validly existing and in good standing under the laws of
the State of Delaware. The Company is an entity duly organized, validly existing
and in good standing under the laws of the Cayman  Islands,  with full corporate
power and authority to carry on its business as such business is now  conducted,
and to own, lease or operate its assets and properties.  To the knowledge of the
Stockholder,  the  Partnership is duly formed,  validly  existing and is in good
standing under the laws of the jurisdiction of Bermuda.  The Company and, to the
knowledge of the Stockholder,  the Partnership are duly qualified to do business
and in good  standing  in every  jurisdiction  in  which  the  character  of the
properties owned or leased by them or the nature of the businesses  conducted by
them makes such qualification necessary, except where failure to be so qualified
would not have a Material  Adverse  Effect.  Complete and accurate copies of the
                                       2


charter  documents  and  bylaws  of  the  Company  and  the   organizational  or
partnership  documents of the  Partnership,  with all amendments  thereto to the
date hereof, have been furnished to Buyer or its representatives.

     2.2 Identification of the Holding Subsidiaries.
         ------------------------------------------

The Holding  Subsidiaries  are  identified  and defined on Schedule 2.2 attached
hereto.  The Company  directly or indirectly  owns those  outstanding  shares of
Capital  Stock  of the  Holding  Subsidiaries,  Eco  Holdings  and Eco  Ltd.  as
described  in Section 2.3 below.  Eco  Holdings  and Eco Ltd.  directly  own the
Partnership Interests in the Partnership as described in Section 2.3 below.

     2.3  Capitalization  of,  and  Ownership  in,  the  Company,   the  Holding
          ----------------------------------------------------------------------
Subsidiaries, Eco Holdings, Eco Limited and the Partnership.
-----------------------------------------------------------

                  (a) The Company.  The authorized  capital stock of the Company
                      ----------- 
consists of 50,000 Ordinary shares,  par value $1.00 per share,  10,900 of which
are issued and outstanding (the "Company Shares").  The Stockholder has good and
valid title to, and sole record and beneficial ownership of, the Company Shares.

                  (b) The Holding Subsidiaries. (i) The authorized capital stock
                      ------------------------ 
of LNGP VI consists of 2,000 shares Class A1 (Voting) Ordinary shares, par value
$1.00 per share, all of which are issued and outstanding.  The shares of LNGP VI
referenced  above are  collectively  referred to herein as the "LNGP VI Shares".
The  Company  has good and  valid  title  to,  and sole  record  and  beneficial
ownership of, the LNGP VI Shares.

The  authorized  capital  stock of LNGP VI also  consists of (X) 1,500 shares of
Class B2 (Non-Voting)  Ordinary shares,  par value $1.00 per share, all of which
are issued and  outstanding,  (Y) 35,000 shares of Preference  shares,  par vale
$1.00 per share, all of which are issued and outstanding,  and (Z) 500 shares of
Class A2 (Voting)  Ordinary shares,  par value $1.00 per share, all of which are
issued and outstanding.

                  (ii) The  authorized  capital stock of LNGP IV consists of (A)
4,400,000  Ordinary  shares,  par value  $.01 per  share,  of which one share is
issued and outstanding, and (B) 2,200,000 shares of Preference shares, par value
$.01 per share,  of which zero  shares  are issued and  outstanding.  The shares
referenced in clause (A) above are collectively  referred to herein as the "LNGP
IV  Shares").  The  Company  has good and valid  title to,  and sole  record and
beneficial ownership of, the LNGP IV Shares.

                  (iii) The authorized capital stock of LNGP I consists of Class
A membership interests and Class B membership interests, all of which are issued
and  outstanding.  The  Company has good and valid title to, and sole record and
beneficial ownership of, the Class A membership interests (the "LNGP I Shares"),
representing  .01% of the total issued and outstanding  membership  interests of
LNGP I. LNGP II has good and valid  title to,  and sole  record  and  beneficial
ownership of, the Class B membership interests,  representing 99.9% of the total
issued  and  outstanding  membership  interests  of LNGP I.  LNGP II is also the
managing member of LNGP I.
                                       3


                  (iv) The  authorized  capital  stock of LNGP III  consists  of
Class A membership interests and Class B membership interests,  all of which are
issued and outstanding  (collectively,  the "LNGP III Shares"). LNGP VI has good
and valid title to, and sole  record and  beneficial  ownership  of, the Class A
membership  interests,  representing  25% of the total  issued  and  outstanding
membership  interests of LNGP III.  LNGP VI is also the managing  member of LNGP
III.  LNGP I has  good and  valid  title  to,  and sole  record  and  beneficial
ownership of, the Class B membership  interests,  representing  75% of the total
issued and outstanding membership interests of LNGP III.

                  (v) The authorized capital stock of LNGP II consists of 30,000
Ordinary  units  and  105,000  Preference  units,  all of which are  issued  and
outstanding. LNGP IV has good and valid title to, and sole record and beneficial
ownership of, the 30,000 outstanding Ordinary units (the "LNGP II Shares").

                  (vi)  The  authorized   capital  stock  of  BGPL  consists  of
1,000,000  Ordinary  shares,  par value  $1.00 per  share,  100,100 of which are
issued and outstanding  (the "BGPL  Shares").  LNGP III has good and valid title
to, and sole record and beneficial ownership of, the BGPL Shares.

Collectively,  the LNGP VI Shares,  the LNGP IV Shares,  the LNGP I Shares,  the
LNGP  III  Shares,  the LNGP II  Shares,  and the BGPL  Shares  are  hereinafter
referred to as the "Holding Subsidiary Shares".

                  (c) Eco  Holdings  and Eco Ltd..  (i) The  authorized  capital
                      ---------------------------
stock of Eco  Holdings  consists of (A)  500,000,000  shares of Class A Ordinary
shares,  par value $.01 per share, 100 of which are issued and outstanding,  and
(B) 500,000,000 shares of Class B Ordinary shares, par value $.01 per share, 100
of which are issued and outstanding.  The shares  referenced in clause (A) above
are collectively  referred to herein as the "Eco Holdings Shares". BGPL has good
and valid  title to,  and sole  record  and  beneficial  ownership  of,  the Eco
Holdings Shares.

                  (ii) The  authorized  capital stock of  Eco Ltd.  consists  of
500,000,000  Ordinary  shares,  par value $.01 per share,  one share of which is
issued  and  outstanding  (the  "Eco  Ltd.  Shares").  To  the  knowledge of the
Stockholder,  Eco  Holdings  has  good and  valid  title to, and sole record and
beneficial  ownership of, the Eco Ltd. Shares.

                  (d) The  Partnership.  The  authorized  capital  stock  of the
                      ----------------
Partnership  consists of limited  partnership  interests and general partnership
interests,  all  of  which  are  issued  and  outstanding   (collectively,   the
"Partnership  Interests").  Eco  Holdings  has good and valid title to, and sole
record  and  beneficial   ownership  of,  the  limited  partnership   interests,
representing  99% of the total issued and outstanding  Partnership  Interests of
the  Partnership.  Eco Ltd.  has good and valid  title to,  and sole  record and
beneficial  ownership of, the general partnership  interest,  representing 1% of
the total issued and outstanding Partnership Interests of the Partnership.

                  (e) Except as set forth on Schedule 2.3 attached  hereto,  all
                                             ------------ 
of the Company Shares the Holding  Subsidiary  Shares,  the Eco Holdings Shares,
and,  to the  knowledge  of the  Stockholders,  the  Eco  Ltd.  Shares  and  the
Partnership Interests (i) are held free and clear of any claims, liens, pledges,
                                       4


options, security interests,  trusts,  encumbrances of any person or entity, and
(ii) are validly issued,  fully paid and  nonassessable.  Except as set forth on
Schedule 2.7 attached  hereto,  neither the  Stockholder,  the Company,  nor the
Holding Subsidiaries have granted, issued, or agreed to grant or issue any other
equity  interests in the Company,  the Holding  Subsidiaries  or the Partnership
other  than  those  referenced  above,  and  there are no  outstanding  options,
warrants,   subscription  rights,   securities  that  are  convertible  into  or
exchangeable for any equity interests of the Company, the Holding  Subsidiaries,
or to the knowledge the  Stockholder,  the  Partnership.  Except for the Holding
Subsidiary  Shares,  the Eco  Holdings  Shares,  the  Eco  Ltd.  Shares  and the
Partnership Interests,  the Company, does not directly or indirectly own, either
of record or beneficially, any equity interest in any other entity.

         2.4  Authorization  of  Agreement.  The  Stockholder  has all requisite
              ----------------------------
corporate  power and  authority to enter into this  Agreement and to perform its
obligations  hereunder.  This Agreement and the other Transaction Documents have
(except for Transaction  Documents to be executed and delivered solely by Mirant
and Buyer)  been duly and  validly  approved  by the board of  directors  of the
Stockholder  and no  other  proceedings  on the  part  of  the  Stockholder  are
necessary to approve this  Agreement  and to authorize  the  performance  by the
Stockholder of its obligations hereunder and thereunder.  This Agreement and the
other  Transaction  Documents to be delivered by the Stockholder:  (a) have been
(or  upon  execution  will  have  been)  duly  executed  and  delivered  by  the
Stockholder, and (b) constitute (or upon execution will constitute) legal, valid
and binding obligations of the Stockholder,  enforceable against the Stockholder
in accordance with their respective terms,  except as such enforceability may be
limited by the Bankruptcy Exception.

         2.5 Assets and Permits.  Other than the contracts set forth on Schedule
             ------------------                                         --------
2.5, the Company and the Holding Subsidiaries are holding companies that conduct
---  
no material business except for the ownership of various interests  described in
Section 2.3 hereof.  On the Closing Date,  other than the contracts set forth on
Schedule 2.5, (a) the Company and the Holding  Subsidiaries  will not be a party
------------
to, or have any  material  obligations  under,  any material  contract;  (b) the
property of the Company and the Holding  Subsidiaries will not be subject to, or
be bound by,  any  material  contract,  other than this  Agreement;  and (c) the
Company and the Holding  Subsidiaries will not have any material  liabilities or
obligations (whether accrued, absolute, contingent or otherwise) or any material
assets other than its  respective  Capital  Stock  interests  referenced in this
Agreement.  There are no outstanding  agreements,  options or commitments of any
nature  obligating the Company or the  Stockholder to transfer any of the assets
of the Company or rights or interests  therein to any party. The Company and the
Partnership  currently  own, lease or otherwise have the right to use all of the
property  necessary for the conduct of their respective  businesses as currently
conducted,  except  where the  absence of such  right  would not have a Material
Adverse  Effect.  Except as set forth on  Schedule  2.13,  the  Company  and the
                                          --------------          
Partnership  have all  Licenses  necessary  for the conduct of their  respective
businesses as currently  conducted,  except where the failure to obtain the same
would not have a Material Adverse Effect.

         2.6      Financial Statements.
                  --------------------

                  (a)  Attached  as  Schedule  2.6 hereto  are (i) an  unaudited
                                     -------------
balance sheet of the Company and an audited  balance sheet of the Partnership at
                                       5


December 31, 1999 and 2000,  and related  unaudited  consolidated  statements of
income and cash flows of the  Company  and audited  consolidated  statements  of
income and cash flows of the Partnership  for the years then ended;  and (ii) an
unaudited  balance sheet of the Company and the  Partnership at May 31, 2001 and
related consolidated  statements of income and cash flows of the Company and the
Partnership for the five-month  period then ended (such statements  specified in
clauses (i) and (ii), together with the related notes thereto, collectively, the
"Financial  Statements").   The  Financial  Statements  have  been  prepared  in
accordance with generally accepted accounting  principles  consistently applied,
and fairly  present in all  material  respects  the  financial  condition of the
Company  and the  Partnership,  respectively,  as of the dates  thereof  and the
results of their operations for the periods covered thereby except,  in the case
of Financial  Statements of the Company and the  Partnership at and for the five
months  ended May 31,  2001,  for the  absence of notes and as  otherwise  noted
therein  and  subject to normal  recurring  year-end  adjustments.  Neither  the
Company nor the  Partnership has any liability or obligation  (whether  accrued,
absolute,  contingent or otherwise)  which,  individually  or in the  aggregate,
would have a Material Adverse Effect, other than (w) liabilities  reflected (but
only  to  the  extent  so  reflected)  or  reserved  against  in  the  Financial
Statements,  (x) liabilities or obligations  that have arisen since May 31, 2001
in the  ordinary  course  of  business,  none of which,  individually  or in the
aggregate,  would have a Material Adverse Effect, (y) liabilities or obligations
disclosed  herein or in any schedule  hereto,  or (z) liabilities or obligations
incurred in accordance with the terms of this Agreement or any Contract.

                  (b)  Since  May 31,  2001,  there  has  not  been  any  event,
circumstance,  condition,  development  or occurrence  causing,  resulting in or
having a Material Adverse Effect.

         2.7 No Conflict or  Violation.  Except as set forth on Schedule 2.5 and
             ------------------------- 
Schedule 2.7 attached  hereto,  the execution,  delivery and  performance by the
Stockholder  of  this  Agreement  and  the  other  Transaction  Documents  to be
delivered by the  Stockholder  and the  performance  by the  Stockholder  of its
obligations  hereunder  and  thereunder  do not and will  not:  (a)  violate  or
conflict with any provision of the operating  agreement of the Stockholder,  the
charter documents or bylaws of the Company, or the partnership  agreement of the
Partnership;  (b) violate any provision or requirement of any federal,  state or
local law, statute,  judgment, order, writ, injunction,  decree, award, rule, or
regulation of any Governmental Entity applicable to the Stockholder, the Company
or, to the knowledge of the Stockholder, the Partnership,  except for violations
that would not have a  Material  Adverse  Effect;  (c)  violate in any  material
respect, result in a material breach of, constitute (with due notice or lapse of
time or both) a material  default  or cause any  material  obligation,  penalty,
premium or right of  termination  to arise or accrue under,  any  Contract;  (d)
result in the creation or imposition of any material lien, charge or encumbrance
of any kind whatsoever upon any of the properties or assets of the  Stockholder,
the Company or, to the knowledge of the  Stockholder,  the  Partnership,  except
where the creation of any such liens would not have a Material  Adverse  Effect;
or (e) result in the cancellation, modification, revocation or suspension of any
License,  except  where  the loss of such  Licenses  would  not have a  Material
Adverse Effect.

         2.8 Governmental and Third-Party Consents. Except for filings, permits,
             -------------------------------------
authorizations,  consents  and  approvals  as may be required  under,  and other
applicable  requirements  of, the HSR Act,  no filing  with or notice to, and no
permit, authorization,  consent or approval of, any Governmental Entity or third
party is necessary  for the execution  and delivery by the  Stockholder  of this
                                       6


Agreement and the other  Transaction  Documents  required to be delivered by the
Stockholder  or the  consummation  of the  transactions  contemplated  hereby or
thereby,  except to the extent specified on Schedule 2.8 or where the failure to
obtain  such  permits,  authorizations,  consents or  approvals  or to make such
filings or give such notices would not, individually or in the aggregate, have a
Material Adverse Effect.

         2.9 Litigation. Except with respect to Tax matters (which are addressed
             ---------- 
in Section 2.12), Schedule 2.9 of the Disclosure Schedule lists (a) each action,
suit,  claim or  proceeding  (including,  but not  limited  to, any  arbitration
proceeding) pending or, to the knowledge of the Stockholder, threatened, and (b)
each  investigation  which, to the knowledge of the  Stockholder,  is pending or
threatened,  against the  Company or the  Partnership,  at law or in equity,  or
before or by any  Governmental  Entity  which,  if  determined  adversely to the
Company or the Partnership,  would have a Material Adverse Effect.  For purposes
of the preceding  sentence,  no  representation  is made with respect to (i) any
proceeding  before  any  Governmental  Entity  initiated  by the  Company or the
Partnership  in which the Company or the  Partnership  is an  applicant  for any
License,  to the extent the matters considered in such proceeding are limited to
the approval or authority  requested in such  application,  or (ii)  proceedings
initiated  by a third  party in  which  the  Company  or the  Partnership  is an
intervener,   and  the  subject  matter  of  such  intervention  is  of  general
applicability  to  similarly-situated  parties.  Neither  the  Company  nor  the
Partnership is in default with respect to any order, writ,  injunction or decree
known to or served  upon such  entity of any  Governmental  Entity,  except  for
defaults which would not have a Material Adverse Effect.

         2.10 Contracts.  Schedule 2.10 of the Disclosure  Schedule lists all of
              ---------   -------------
the  material  contracts  and  agreements  to which the  Partnership  is a party
relating to or affecting  the  operation  of the  Facility and which  require an
annual payment in excess of One Million Dollars  ($1,000,000) (the "Contracts").
To the knowledge of the Stockholder:  (a) each Contract is valid, binding and in
full force and effect,  and is enforceable by the Partnership in accordance with
its terms,  except as enforceability may be limited by the Bankruptcy  Exception
and except as would not have a Material Adverse Effect,  (b) the Partnership has
performed in all material  respects the obligations  required to be performed by
it to date under each  Contract,  except for such failure or failures to perform
which would not have a Material Adverse Effect,  and (c) the Partnership has not
received any notice of default under any Contract to which it is a party, except
as would not have a Material Adverse Effect.

         2.11 Compliance with Applicable Law. Except with respect to Tax matters
              ------------------------------
(which  are  addressed  in  Section  2.12) and  Environmental  Laws  (which  are
addressed in Section 2.13), the operations of the Company,  and to the knowledge
of the  Stockholder,  the  Partnership  are,  and have  been,  conducted  in all
material  respects in accordance with all applicable laws,  regulations,  orders
and other requirements of all Governmental Entities having jurisdiction over the
Company  and  the  Partnership  or  their  respective   assets,   properties  or
operations,  except in any case where the failure to so conduct their operations
would not have a Material  Adverse  Effect.  Except with  respect to Tax matters
(which are  addressed  in Section  2.12) and  environmental  matters  (which are
addressed  in  Section  2.13),   the  Company  and,  to  the  knowledge  of  the
Stockholder,  the  Partnership  have not  received  any  notice of any  material
violation of any such law, regulation, order or other legal requirement, and are
not in  material  default  with  respect to any order,  writ,  judgment,  award,
                                       7


injunction or decree of any  Governmental  Entity,  applicable to the Company or
the Partnership or any of their respective assets, properties or operations.

         2.12     Tax Matters.
                  -----------

                  (a) The Company, the Holding Subsidiaries,  Eco Holdings,  Eco
Ltd. and the  Partnership  (each, a "Taxpayer")  has filed on a timely basis all
Tax returns  required to be filed by a Taxpayer on or prior to the date  hereof,
except where such instance of  non-compliance  would not have a Material Adverse
Effect. As of the time of filing, the foregoing Tax returns of the Company,  and
the Partnership were true and complete in all material respects.

                  (b) With respect to all Taxes  imposed on each Taxpayer in any
taxable  period or portion  of a period  ending on or before  the  Closing  Date
(other than Taxes with respect to activities, events and elections of the Buyer,
the Holding  Subsidiaries,  Eco Holdings,  Eco Ltd., the  Partnership  and their
Affiliates  on or after the  Closing),  all such  Taxes  required  to be paid to
taxing  authorities  reflected on such returns on or before the date hereof have
been paid,  except such Taxes,  if any,  as are being  contested  in good faith,
Taxes  which are not yet due and  payable  or are  assumed  by Buyer  under this
Agreement.  The  Taxpayers  have  complied  with  all Tax  laws in all  material
respects.

                  (c) No  adjustments  to the Tax liability of any Taxpayer have
been proposed in writing (and are currently  pending) by any taxing authority in
connection  with any tax return of any  Taxpayer,  except for  adjustments  that
would  not  have  a  Material  Adverse  Effect.  All  deficiencies  asserted  or
assessments made as a result of any examinations of any Taxpayer have been fully
paid,  are fully  reflected as a liability in the  financial  statements  of the
applicable Taxpayer, or are being contested in good faith.

                  (d) There are no liens for Taxes (other than for Taxes not yet
 due and  payable) on any of the assets of any Taxpayer.

         2.13     Environmental Matters.  Subject  to the  matters set  forth on
                  ---------------------
Schedule 2.13 attached hereto:
-------------

                  (a) The Company and, to the knowledge of the Stockholder,  the
Partnership comply in all material respects with all Environmental Laws and have
obtained and maintained in effect all Environmental  Permits and are in material
compliance with all such Environmental Permits.

                  (b)  Neither  the  Company  nor,  to  the   knowledge  of  the
Stockholder,  the Partnership  has performed,  failed to perform or suffered any
act which will give rise to, or has otherwise  incurred,  material  liability to
any person (governmental or not) under the Comprehensive Environmental Response,
Compensation  and  Liability  Act,  42  U.S.C.  ss.  9601 et seq.,  or any other
Environmental  Laws,  nor has it received  notice of any such  liability  or any
claim therefor.

                  (c)  There  are  no  pending  or,  to  the  knowledge  of  the
Stockholder, threatened administrative,  judicial or regulatory proceedings, or,
to the knowledge of the Stockholder,  any threatened  actions or claims,  or any
                                       8


consent  decrees or other  agreements  in effect  that  relate to  environmental
conditions in, on, under,  about or related to the Company,  the  Partnership or
their respective operations or the real properties leased or owned by them.

         2.14  Insurance.  Each of the  Company  and,  to the  knowledge  of the
               ---------
Stockholder,  the  Partnership  holds  (either  directly or  indirectly  through
affiliated  entities)  valid  policies  of  insurance  of such types and in such
amounts as is customary for companies similarly situated.

         2.15  Brokers.  Except for Credit Suisse First Boston  Corporation,  no
               -------
broker, finder, investment banker, or other person is entitled to any brokerage,
finder's  or  other  fee or  commission  in  connection  with  the  transactions
contemplated by this Agreement,  based on contractual arrangements made by or on
behalf of the Stockholder.

         2.16  Distributions.  Neither the  Stockholder,  the  Companies nor the
               -------------
Holding  Subsidiaries  has  received a cash  distribution  from the  Partnership
pursuant  to the  Partnership  Agreement  after  January  1, 2001 other than the
distributions,  if any, listed on Schedule 2.16 (the "Distributions").  The term
"Distributions" does not include,  among other matters,  payments or obligations
arising independently under any other contract or agreement.



                                    ARTICLE 3
         REPRESENTATIONS AND WARRANTIES OF MIRANT, BUYER AND NOTE BUYER

         Mirant,  Buyer and Note Buyer  represent and warrant to the Stockholder
that:

         3.1 Organization and Corporate Authority. Mirant is a corporation,  and
             ------------------------------------
Buyer  and Note  Buyer  are  limited  liability  companies,  in each  case  duly
organized,  validly  existing  and in good  standing  under  the  laws of  their
respective  jurisdictions or organization and have all requisite corporate power
and authority to enter into this Agreement and the other  Transaction  Documents
and to perform  their  respective  obligations  hereunder and  thereunder.  This
Agreement  and the other  Transaction  Documents to be executed and delivered by
Mirant,  Buyer and Note Buyer:  (a) have been (or upon execution will have been)
duly  executed  and  delivered  by Mirant,  Buyer and Note Buyer;  (b) have been
effectively authorized by all necessary action,  corporate or otherwise,  and no
other  proceedings  on the part of Mirant,  Buyer or Note Buyer are necessary to
authorize  the  performance  of  their  respective   obligations  hereunder  and
thereunder;  and (c) constitute (or upon execution will constitute) legal, valid
and binding  obligations  of Mirant,  Buyer and Note Buyer  enforceable  against
Mirant,  Buyer and Note Buyer in accordance with their respective terms,  except
as such enforceability may be limited by the Bankruptcy Exception.

         3.2 No Conflict or Violation.  The execution,  delivery and performance
             ------------------------
by Mirant,  Buyer and Note  Buyer of this  Agreement  and the other  Transaction
Documents to be executed and  delivered by Mirant,  Buyer and Note Buyer and the
performance  by  Mirant,  Buyer and Note Buyer of their  respective  obligations
hereunder and thereunder,  do not and will not: (a) violate or conflict with any
provision of the charter documents or bylaws of Mirant,  Buyer or Note Buyer; or
(b) violate any  provision or  requirement  of any federal,  state or local law,
statute,  judgment, order, writ, injunction,  decree, award, rule, or regulation
of any Governmental Entity applicable to Mirant, Buyer or Note Buyer.
                                       9


         3.3  Litigation.  There are no  material  claims,  actions,  suits,  or
              ----------
proceedings  (including,  but not limited to, any arbitration proceeding) of any
nature,  at law or in equity,  pending or, to the knowledge of Mirant,  Buyer or
Note Buyer,  threatened by or against Mirant,  Buyer, Note Buyer, the directors,
officers,  employees,  agents of Mirant,  Buyer or Note  Buyer,  or any of their
respective  Affiliates  involving,  affecting  or relating  to the  transactions
contemplated by this Agreement or the performance of the respective  obligations
of Mirant, Buyer and Note Buyer hereunder.  Neither Mirant, Buyer nor Note Buyer
is subject to any order,  writ,  judgment,  award,  injunction  or decree of any
Governmental  Entity  involving,  affecting  or  relating  to  the  transactions
contemplated by this Agreement or the performance of the respective  obligations
of Mirant, Buyer and Note Buyer hereunder.

         3.4 Governmental Consents. Except for filings, permits, authorizations,
             ---------------------
consents  and  approvals  as  may  be  required  under,   and  other  applicable
requirements  of,  the HSR Act,  no filing  with or notice  to,  and no  permit,
authorization,  consent or approval of, any Governmental Entity is necessary for
the execution and delivery by Mirant,  Buyer or Note Buyer of this Agreement and
the other  Transaction  Documents  required to be delivered by Mirant,  Buyer or
Note Buyer or the performance of the respective obligations of Mirant, Buyer and
Note Buyer hereunder and thereunder.

         3.5 Availability of Funds. On the Closing Date, Mirant,  Buyer and Note
             ---------------------
Buyer will have,  sufficient  funds  available to enable Mirant,  Buyer and Note
Buyer to consummate the transactions  contemplated  hereby and to permit Mirant,
Buyer and Note Buyer to timely perform all of their respective obligations under
this Agreement.

         3.6  Qualified  Buyer.  Mirant,  Buyer and Note Buyer are  qualified to
              ----------------
obtain any permits,  licenses or  authorizations  necessary for Buyer to own the
Company and the  Partnership and to operate the Facility as contemplated by this
Agreement,  the OMFM  Agreement that is being assigned to, and assumed by, Buyer
in accordance with Section 4.5, and the LNG Tolling Agreement.

         3.7      Securities Matters.
                  ------------------

                  (a)  The  Company  Shares  to be  received  by  Buyer  will be
acquired  for  investment  for  Buyer's  own  account,  not  with a view  to the
distribution of any part thereof, and Buyer has no present intention of selling,
granting any  participation  in, or  otherwise  distributing  the same.  Neither
Mirant,  Buyer  nor Note  Buyer  has any  contract,  undertaking,  agreement  or
arrangement with any person to sell,  transfer or grant  participations  to such
person or to any third person, with respect to any of the Company Shares.

                  (b) Mirant,  Buyer and Note Buyer  understand that the Company
Shares are  characterized  as  "restricted  securities"  under the U.S.  federal
securities  laws inasmuch as such securities are being acquired in a transaction
not  involving  a  public  offering  and that  under  such  laws and  applicable
regulations  such  securities  may not be resold in the absence of an  effective
registration  statement  covering  the  Company  Shares  or  an  exemption  from
registration under the Securities Act.
                                       10


         3.8 Brokers. No broker,  finder,  investment banker, or other person is
             -------
entitled to any  brokerage,  finder's or other fee or  commission  in connection
with the transactions  contemplated by this Agreement,  based upon  arrangements
made by or on behalf of Mirant, Buyer or Note Buyer.

         3.9  Status  Under  PURPA.  Neither  Mirant,  Buyer  nor Note  Buyer is
              --------------------
"primarily  engaged in the  generation or sale of electric  power" under Section
201 of the Public Utility  Regulatory  Policies Act of 1978 (as  incorporated in
Section  3(17)  and  3(18)  of  the  Federal  Power  Act),  FERC's  implementing
regulations, and FERC's precedent thereunder.



                                    ARTICLE 4
                               CERTAIN AGREEMENTS

         4.1      Access and Confidentiality.
                  --------------------------

                  (a) Upon the  reasonable  request  of Buyer,  the  Stockholder
shall use  commercially  reasonable  efforts  to  afford  to Buyer  and  Buyer's
accountants,  counsel and  representatives  full access,  during normal business
hours throughout the period prior to the Closing (or the earlier  termination of
this Agreement),  to all of the properties,  books, records and contracts of the
Company and the Partnership  (including,  without limitation,  the Partnership's
accounting   records,   the  work  papers  of  the   Partnership's   independent
accountants,  and all  environmental  studies,  reports and other  environmental
records of the  Partnership),  to the extent such  disclosure  does not conflict
with any  confidentiality  obligations  of the  Stockholder,  the  Company,  any
Holding Subsidiary or the Partnership.

                  (b)  Neither  Mirant,  Buyer,  Note  Buyer  nor  any of  their
respective  directors,  officers,  employees,  agents  or  representatives  may,
directly or indirectly, disclose to any person or entity or use any Confidential
Information   for  any  purpose  other  than  to  evaluate  and  consummate  the
transactions contemplated by this Agreement and the other Transaction Documents.
If Mirant,  Buyer or Note Buyer is requested  or required  (by oral  question or
request for  information  or documents in any legal  proceeding,  interrogatory,
subpoena,  civil  investigative,  demand,  or similar  process) to disclose  any
Confidential Information, Mirant, Buyer and Note Buyer shall promptly notify the
Stockholder so that the Stockholder may seek an appropriate  protective order or
waive compliance with the provisions of this Section 4.1(b).  If, in the absence
of a protective  order or the receipt of a waiver  hereunder,  Mirant,  Buyer or
Note Buyer is, on the advice of counsel,  compelled to disclose any Confidential
Information to any tribunal,  Mirant,  Buyer or Note Buyer,  as applicable,  may
disclose the Confidential Information to the tribunal;  provided,  however, that
Mirant,  Buyer and Note Buyer shall use all commercially  reasonable  efforts to
obtain an order or other assurance that confidential  treatment will be accorded
to such portion of the Confidential Information required to be disclosed.

         4.2 Certain Changes and Conduct of Business. From and after the date of
             ---------------------------------------
this  Agreement  and until  the  Closing  (or the  earlier  termination  of this
Agreement),  the  Stockholder  shall cause the Company to conduct the  Company's
business solely in the ordinary course  consistent with past practices.  Without
                                       11


limiting  the  generality  of the  preceding  sentence,  except as  required  or
permitted  pursuant to the terms hereof,  the  Stockholder  shall not permit the
Company to do any of the following  without  obtaining the consent of the Buyer,
which consent shall not be unreasonably withheld:

                  (a)  make any change in the charter documents or bylaws of the
Company;

                  (b) issue any  additional  shares of  capital  stock or equity
securities or grant any option, warrant or right to acquire any capital stock or
equity securities or issue any security convertible into or exchangeable for the
capital  stock  of the  Company,  alter  any  term  of  any  of the  outstanding
securities  of the  Company,  or make any  change in the  outstanding  shares of
capital stock or other ownership interests or in the capitalization,  whether by
reason of a  reclassification,  recapitalization,  stock  split or  combination,
exchange or readjustment of shares, stock dividend or otherwise;

                  (c) (i) issue any notes, bonds,  debentures or other corporate
securities  or  grant  any  option,  warrant  or right  to  purchase  any of the
foregoing,  (ii)  issue any  securities  convertible  or  exchangeable  for debt
securities of the Company, or (iii) issue any options or other rights to acquire
directly  or  indirectly  any debt  securities  of the  Company or any  security
convertible into or exchangeable for such debt securities; or

                  (d)  commit itself to do any of the foregoing.

Notwithstanding  the  foregoing,  the  Stockholder,  the  Company,  the  Holding
Subsidiaries,   their  respective  Affiliates,  and  the  Partnership  shall  be
permitted to undertake  such actions as are  necessary or  appropriate  in their
discretion to carry out the restructuring activities set forth on Schedule 4.2.
                                                                  ------------ 
         4.3 Stockholder  Guarantees.  The Stockholder and/or its Affiliates are
             -----------------------
guarantors  with respect to certain  indebtedness  or otherwise  provide certain
forms  of  credit  support,  in each  case as  listed  on  Schedule  4.3-A  (the
                                                           ---------------
"Guaranteed  Indebtedness").  Prior to the Closing, Mirant, Buyer and Note Buyer
shall cause the Stockholder and its Affiliates to be replaced by an Affiliate of
Mirant as  guarantor  or other  applicable  status  with  respect  to all of the
Guaranteed Indebtedness as listed on Schedule 4.3-B.
                                     --------------

         4.4 Insurance  Matters.  The Stockholder  and/or its Affilates maintain
             ------------------
insurance  for the Company,  the Holding  Subsidiaries  and the  Partnership  as
listed on Schedule  4.4 (the  "Insurance  Obligations").  Prior to the  Closing,
          -------------
Mirant, Buyer and Note Buyer shall replace all of the Insurance Obligations with
insurance  that conforms with the  requirements  (i)  established by each of the
Company, the Holding  Subsidiaries,  and the Partnership and (ii) if applicable,
is acceptable to each of the lenders for such entities.  Such insurance shall be
placed  with  financially  secured  insurers  and be of such  types  and in such
amounts  as is  customary  in the  case of  similar  business  but no less  than
required by the applicable entity.

         4.5  Assignment of Assumption of OMFM  Agreement.  At the Closing,  the
              -------------------------------------------
Stockholder  shall cause its  Affiliate  to assign to Buyer or an  Affiliate  of
Buyer,  and Mirant or Buyer  shall,  or shall  cause an  Affiliate  of Buyer to,
assume from the Affiliate of the Stockholder the OMFM Agreement. Such assignment
                                       12


and  assumption  shall  include a  novation  by the  Partnership  releasing  the
assignor  and be  pursuant  to  the  terms  of a  mutually  acceptable  executed
Assignment and Assumption Agreement.

         4.6      Regulatory Approvals.
                  --------------------

                  (a) Antitrust Notification.  Mirant, Buyer, Note Buyer and the
                      ----------------------
Stockholder  shall, as promptly as practicable but in no event later than twenty
(20) days following the execution and delivery of this Agreement, each file with
the FTC and the DOJ the  Notification and Report Form under the HSR Act, if any,
required in connection with the transactions contemplated hereby and as promptly
as  practicable  supply  any  additional  information,   if  any,  requested  in
connection  herewith  pursuant to the HSR Act. Any such  Notification and Report
Form and additional  information,  if any, submitted to the FTC or the DOJ shall
be in  substantial  compliance  with the  requirements  of the HSR Act.  Each of
Mirant,  Buyer,  Note Buyer and the Stockholder shall furnish to the others such
information  and assistance as the others may  reasonably  request in connection
with their preparation of any filing or submission, which is necessary under the
HSR Act. Each of Mirant,  Buyer,  Note Buyer and the Stockholder  shall keep the
others  apprised  in a  prompt  manner  of  the  status  and  substance  of  any
communications with, and inquiries or requests for additional  information from,
the FTC and the DOJ and shall comply  promptly with any such inquiry or request.
Each of Mirant,  Buyer,  Note Buyer and the Stockholder  shall use  commercially
reasonable  efforts to obtain the  termination  or expiration of any  applicable
waiting  period  required  under  the  HSR  Act  for  the  consummation  of  the
transactions  contemplated  hereby.  Mirant,  Buyer and Note Buyer shall pay all
filing  fees  payable  under  the HSR Act in  connection  with the  transactions
contemplated  hereby, and each of Mirant,  Buyer, Note Buyer and the Stockholder
shall pay its own  respective  costs  incurred in preparation of all reports and
notifications required under the HSR Act.

                  (b) Regulatory Approval Process. Mirant, Buyer, Note Buyer and
                      ---------------------------
the  Stockholder  shall,  as promptly as practicable  but in no event later than
thirty days  following the execution and delivery of this  Agreement,  submit to
the appropriate  agencies or third parties all consent  requests,  declarations,
filings and registrations  listed on Schedules 2.7, 2.8 and 3.4. With respect to
                                     --------------------------
any filings that may be required to be submitted to FERC,  Mirant,  Buyer,  Note
Buyer and the  Stockholder  shall  cooperate  to share and  develop  information
necessary  for such  filings  and drafts of such  filings  within  fifteen  days
following  execution and delivery of this  Agreement,  and shall give each other
reasonable  opportunity to comment on such draft filings before such filings are
submitted to FERC.

         4.7  Efforts.  Upon the terms and  subject  to the  conditions  of this
              -------
Agreement,  each of the parties hereto shall use all its commercially reasonable
efforts to take,  or cause to be taken,  all actions,  and to do, or cause to be
done, all things necessary,  proper or advisable  consistent with applicable law
to cause the  fulfillment  of the  conditions to Closing set forth herein and to
consummate and make effective in the most  expeditious  manner  practicable  the
transactions contemplated hereby.

         4.8 Notice of Changes.  Prior to the Closing, each party shall promptly
             -----------------
advise the other in writing with respect to any matter  arising after  execution
of this Agreement of which that party obtains  knowledge and which,  if existing
or occurring at the date of this  Agreement,  would have been required to be set
                                       13


forth in this Agreement,  including any of the schedules hereto. If, as a result
of such development, Buyer has the right to terminate this Agreement pursuant to
Section 7.1 and Buyer fails to exercise that right within the period of ten (10)
days after such right  accrues,  then the written  notice  delivered  to Mirant,
Buyer or Note Buyer  pursuant to this Section 4.8 will be deemed to have amended
this Agreement, including any appropriate schedule hereto, to have qualified the
representations  and warranties  contained in Article 2 above, and to have cured
any  misrepresentation  or breach of warranty that otherwise  might have existed
hereunder by reason of the development.

         4.9      Certain Tax Matters.
                  -------------------

                  (a) Tax  Returns.  After the Closing,  Mirant,  Buyer and Note
                      ------------
Buyer shall cause the Company, the Holding Subsidiaries,  Eco Holdings, Eco Ltd.
and the  Partnership to furnish tax information to the Stockholder for inclusion
in the Stockholder's or its Affiliates' Tax returns and reports,  including Form
5471 and  supporting  schedules for taxable years or periods ending on or before
or including the Closing Date,  prepared in accordance  with the Company's,  the
Holding  Subsidiaries',  Eco Holdings',  Eco Ltd.'s and the  Partnership's  past
practices. Such information shall be furnished to the Stockholder within 90 days
after  the  close  of the  calendar  year  of the  sale  of the  Company  Shares
hereunder.

                  (b) Authority. After the Closing, Mirant, Buyer and Note Buyer
                      ---------
shall, and shall cause the Company, the Holding Subsidiaries,  Eco Holdings, Eco
Ltd., the  Partnership  and their  Affiliates to provide the Stockholder and its
Affiliates  with  such  powers  of  attorney  or  other  authorizations  as  are
reasonably  necessary  to empower them to execute and file Tax returns for which
they are  responsible,  file refund and similar  claims for Taxes for which they
are  responsible  or entitled,  and  contest,  settle and resolve any audits and
disputes over which they have control under this Agreement (including any refund
claims which evolve into audits or disputes).

                  (c)  Cooperation.  After the Closing,  Mirant,  Buyer and Note
                       ----------- 
Buyer, on the one hand, and the  Stockholder,  on the other hand,  shall provide
prompt  written  notice to the other of any  pending  or  threatened  tax audit,
assessment or  proceeding of which it becomes aware related to the Company,  the
Holding  Subsidiaries,  Eco Holdings,  Eco Ltd. or the  Partnership for whole or
partial periods for which the other is responsible hereunder.  Such notice shall
contain  known  factual  information   describing  any  potential  liability  in
reasonable  detail and be  accompanied by copies of any notice or other document
received from or sent to any tax authority in respect of such matters. After the
Closing, Mirant, Buyer and Note Buyer, on the one hand, and the Stockholder,  on
the other hand, shall cooperate fully, and to the extent reasonably requested by
the other party,  in connection  with the filing of all tax returns  pursuant to
this Agreement and any audit,  litigation,  or other proceeding  related to such
tax returns.  Such  cooperation  shall  include the  retention  and provision of
records and information  relevant to any such tax filing,  audit,  litigation or
other matter and making employees available on a reasonable basis.

                  (d)  Audits.  The  Stockholder  shall  control  all audits and
                       ------
contests relating to any Taxes for the Company,  the Holding  Subsidiaries,  Eco
Holdings, Eco Ltd. and the Partnership for all tax periods ending on or prior to
                                       14


the Closing Date. Buyer shall control all audits and contests  relating to Taxes
of the  Company,  the  Holding  Subsidiaries,  Eco  Holdings,  Eco Ltd.  and the
Partnership for all tax periods beginning after the Closing Date.

                  (e) Tax Sharing Agreements.  Any tax sharing agreement between
                      ----------------------
the Stockholder and the Company, the Holding  Subsidiaries,  Eco Holdings or Eco
Ltd. shall terminate as of the Closing Date,  immediately  prior to the Closing,
and will have no further  effect for any taxable year (whether the current year,
a future year, or a past year).

                  (f)  Transfer  Taxes.  All  stamp,   documentary,   recording,
                       ---------------
transfer,  sales and use and  similar  Taxes  incurred in  connection  with this
Agreement  and the  transactions  contemplated  hereby shall be borne by Mirant,
Buyer and Note Buyer.  Mirant,  Buyer and Note Buyer at their own expense  shall
file, to the extent  required by  applicable  law, all necessary Tax returns and
other  documentation  with  respect to all such stamp,  documentary,  recording,
transfer, sales and use and similar Taxes.

                  (g) Section 338(g) Election.  After the Closing, Mirant, Buyer
                      -----------------------
and Note Buyer shall cause a timely and effective  election under Section 338(g)
of the Code to be made with respect to the purchase of the Company (the "Section
338  Election").  Buyer  shall,  and Mirant  shall cause Buyer to,  execute such
election,  timely and properly file the same, and upon so doing provide  written
assurance to the Stockholder it has done so (including providing the Stockholder
with IRS date stamped  copies of such  election).  Mirant,  Buyer and Note Buyer
shall not, and Mirant, Buyer and Note Buyer shall cause their Affiliates to not,
take any action to modify or change the Section 338 Election.

                  (h)  Indemnification.  Mirant, Buyer and Note Buyer shall, and
                       ---------------
shall cause their  Affiliates  to,  indemnify and hold the  Stockholder  and its
Affiliates  harmless  from  and  against  any  Taxes  arising  from  operations,
activities,  elections  (other than the Section 338 Election and the Section 754
election made by Buyer with respect to its purchase from the  Stockholder of the
Company, the Holding Subsidiaries,  Eco Holdings,  Eco Ltd. and the Partnership)
and transactions  occurring on or after the Closing with respect to the Company,
the Holding  Subsidiaries,  Eco  Holdings,  Eco Ltd.  and the  Partnership.  The
indemnification  obligations  under Section 4.9 hereof shall continue until such
time as the applicable  statute of  limitations  has expired on the right of the
applicable Governmental Authority to legally impose the Tax liability upon which
the Stockholder Indemnitee's Loss is based.

                  (i) FIRPTA  Certificate.  On the Closing Date, the Stockholder
                      -------------------
shall provide Buyer with a certificate  certifying that the Stockholder is not a
"foreign person" within the meaning of Treasury Regulation 1.1445-2(b).

                  (j) Treatment of Payments. All indemnification  payments  made
                      --------------------- 
under this Agreement shall be  treated  as  Purchase  Price adjustments  for tax
purposes.

                  (k) Allocation. The Stockholder, Buyer and Note Buyer agree to
                      ----------
endeavor to allocate the Purchase  Price among the Company  Shares and the other
assets to be acquired by the Buyer (or its Affiliates)  hereunder not later than
five days before the Closing Date. The agreed  allocation  shall be made by side
letter  agreement and shall be used to file all returns and reports with respect
to  Taxes.  If  Buyer,  Note  Buyer and  Stockholder  are  unable to agree on an
                                       15


allocation  within  150 days  after the  Closing  Date,  Buyer,  Note  Buyer and
Stockholder  shall each be free to make any  allocation  they desire.  If Buyer,
Note Buyer and Stockholder fail to agree on such allocation,  Mirant,  Buyer and
Note Buyer shall allow Stockholder and its authorized agents and representatives
access to the Company, the Holding Subsidiaries,  Eco Holdings, Eco Ltd. and the
Partnership  and such other assets,  rights,  books and records  related thereto
and/or  purchased  hereunder to allow  Stockholder  to make an appraisal of such
entities and assets and an allocation.  Should Buyer or its  Affiliates,  on the
one  hand,  or  Stockholder  or its  Affiliates,  on the  other  hand,  hire  an
independent  accounting  or appraisal  firm to appraise the value of the Company
Shares, the Company, the Holding Subsidiaries, Eco Holdings, Eco Ltd. and/or the
Partnership or any of the other assets acquired pursuant to this Agreement,  the
other shall be provided with a true copy of the written appraisal report made by
such firm.

                  (l) Coordination. Mirant, Buyer and Note Buyer shall not take,
                      ------------
and shall cause their respective Affiliates, and after the Closing, the Company,
any Holding Subsidiary,  Eco Holdings, Eco Ltd. and the Partnership not to take,
any action  inconsistent  with, contest any position with respect to, attempt to
recharacterize  and/or  voluntarily make any disclosure of any kind to any third
party, including any Governmental Entity, with respect to any action,  election,
position, transaction, and/or characterization made or taken by the Stockholder,
the Company, any Holding Subsidiary,  Eco Holdings, Eco Ltd. or the Partnership,
in respect of (i) any restructuring  activity required,  permitted or associated
with the completion of the transactions  contemplated by this Agreement (whether
or not set forth on Schedule 4.2 hereto), or (ii) in respect of any Taxes or Tax
matter  related to whole or partial  taxable  periods or activities on or before
the  Closing.  The  provisions  of this  Section  4.9(l)  shall not prohibit any
disclosure  required  by law,  provided  that no such  disclosure  shall be made
without first promptly notifying  Stockholder and authorizing the Stockholder to
review and challenge the same.



                                    ARTICLE 5
                                 INDEMNIFICATION

         5.1  Indemnification  by  Stockholder.  For a  period  of one (1)  year
              --------------------------------
following  the Closing  Date and subject to the limits set forth in this Article
5, the  Stockholder  and its  successors  and assigns shall  indemnify,  defend,
reimburse and hold harmless the Buyer Indemnitees,  from and against any and all
claims, losses, damages, liabilities,  obligations,  assessments,  penalties and
interest,   demands,  actions  and  expenses  (including,   without  limitation,
settlement costs and any legal,  accounting and other expenses for investigating
or  defending  any  actions)   ("Losses")   reasonably  incurred  by  any  Buyer
Indemnitee, arising out of (i) the breach of any representation or warranty made
by the  Stockholder  in Article 2 of this  Agreement;  or (ii) the breach of any
covenant, agreement or obligation of the Stockholder contained in this Agreement
or any other Transaction Document.  Notwithstanding the one-year time limitation
set forth  above,  the  Stockholder's  indemnification  obligations  under  this
Section 5.1 arising from the breach of any  representation  or warranty  made by
the  Stockholder (x) in Section 2.12 of this Agreement shall continue until such
time as the applicable  statute of  limitations  has expired on the right of the
applicable Governmental Authority to legally impose the Tax liability upon which
the Buyer  Indemnitee's  claimed Loss is based;  and (y) in Section 2.13 of this
Agreement  shall continue for a period of two years  following the Closing Date.
                                       16


Furthermore, notwithstanding the foregoing or anything else in this Agreement to
the contrary, in the event that any Buyer Indemnitee reasonably incurs Losses in
connection with the breach of any  representation or warranty of the Stockholder
regarding Eco Holdings,  Eco Ltd. and the Partnership made by the Stockholder in
Article 2 of this Agreement,  the  Stockholder's  obligations under this Section
5.1 shall apply to only fifty percent (50%) of such Losses.

         5.2  Indemnification  by Mirant,  Buyer and Note Buyer. For a period of
              -------------------------------------------------
one (1) year  following  the Closing Date and subject to the limits set forth in
this Article 5, Mirant,  Buyer,  Note Buyer and their respective  successors and
assigns shall  indemnify,  defend,  reimburse and hold harmless the  Stockholder
Indemnitees  from and  against  any and all Losses  reasonably  incurred  by any
Stockholder  Indemnitee  arising out of (i) the breach of any  representation or
warranty  made by Mirant,  Buyer and Note Buyer in Article 3 of this  Agreement;
(ii) the breach of any covenant,  agreement or  obligation  of Mirant,  Buyer or
Note Buyer  contained in this Agreement or any other  Transaction  Document;  or
(iii) the ownership or operation of the Company, the Holding  Subsidiaries,  Eco
Holding, Eco Ltd., and the Partnership after the Closing.

         5.3      Indemnification Procedure.
                  -------------------------

                  (a)   Whenever   any  claim  (a   "Claim")   shall  arise  for
indemnification  under this Article 5, the Indemnitee shall promptly (but in any
                            ---------
event  within ten (10) days of  Indemnitee  becoming  aware of the  Claim)  give
written notice to the Indemnitor  with respect to the Claim,  which notice shall
include reliable  information of the facts constituting the basis for the Claim.
Notwithstanding the foregoing,  the failure to timely give such notice shall not
relieve the Indemnitor from any obligation  under this Agreement,  except to the
extent,  if any, that the Indemnitor is materially  prejudiced  thereby.  In the
event of any  Claim  resulting  from or in  connection  with any  claim or legal
proceedings  by a third  party  (a  "Third  Party  Claim"),  the  notice  to the
Indemnitor  shall specify,  if known, the amount or an estimate of the amount of
liability arising  therefrom.  The Indemnitee shall not settle or compromise any
claim by any third party for which it is entitled to indemnification  hereunder,
without the prior written consent of the Indemnitor  unless suit shall have been
instituted  against it and the  Indemnitor  shall not have taken control of such
suit after notification thereof as provided in Section 5.3(c) hereof.
                                               ------------- 

                  (b) Upon receipt of written  notice from the  Indemnitee  of a
Third Party Claim, the Indemnitor shall provide counsel (such counsel subject to
the reasonable  approval of the Indemnitee) to defend the Indemnitee against the
matter from which the Third Party Claim arose,  at the  Indemnitor's  sole cost,
risk and expense. The Indemnitee shall cooperate in all reasonable respects,  at
the  Indemnitor's  sole  cost,  risk and  expense,  with the  Indemnitor  in the
investigation,  trial, defense and any appeal arising from the matter from which
the Third Party Claim arose.  The Indemnitee shall be entitled to participate in
(but not  control)  the  defense  of any such  action,  with  counsel at its own
expense.  The  Indemnitor  shall have the right to elect to settle any claim for
monetary  damages  without  the  Indemnitee's  consent  only  if the  settlement
includes  a complete  release  of the  Indemnitee.  If the  settlement  does not
include  such a release,  it will be subject to the  consent of the  Indemnitee,
which will not be unreasonably  withheld;  provided,  however, if the Indemnitee
                                           ------------------ 
fails to give such consent within twenty (20) days of being  requested to do so,
the  Indemnitee  shall,  at its expense,  assume the defense of such Third Party
                                       17


Claim and regardless of the outcome of such matter,  the Indemnitor's  liability
hereunder  shall be  limited  to the  amount  of the  proposed  settlement.  The
Indemnitor  may not admit any  liability of the  Indemnitee  or waive any of the
Indemnitee's  rights without the Indemnitee's prior written consent,  which will
not be unreasonably withheld. If the subject of any Third Party Claim results in
a judgment or  settlement,  the  Indemnitor  shall promptly pay such judgment or
settlement.

                  (c) If the  Indemnitor  (i) fails to assume the defense of the
subject of any Third Party Claim in accordance with the terms of Section 5.3(b),
                                                                 -------------- 
(ii)  fails  diligently  to  prosecute  such  defense,  or  (iii)  has,  in  the
Indemnitee's  reasonable  good faith  judgment,  a  conflict  of  interest,  the
Indemnitee may defend against the subject of the Claim, at the Indemnitor's sole
cost, risk and expense, in such manner and on such terms as the Indemnitee deems
appropriate,  including, without limitation,  settling the subject of the Claim;
provided,  however,  that any  compromise or settlement  shall be subject to the
Indemnitor's  consent,  which consent will not be unreasonably  withheld. If the
Indemnitee  defends  the  subject  of a Claim in  accordance  with this  Section
                                                                         -------
5.3(c),  the Indemnitor shall cooperate with the Indemnitee and its counsel,  at
------ 
the Indemnitor's sole cost, risk and expense,  in all reasonable  respects,  and
shall deliver to the Indemnitee or its counsel copies of all pleadings and other
information within the Indemnitor's knowledge or possession reasonably requested
by the Indemnitee or its counsel that are relevant to the defense of the subject
of any such Claim and that will not prejudice the Indemnitor's position,  claims
or defenses.  The Indemnitee shall maintain  confidentiality with respect to all
such information consistent with the conduct of a defense hereunder.

         5.4  Payment.  All  payments  owing  under this  Article 5 will be made
              -------                                     ---------
promptly as  indemnifiable  Losses are incurred.  If the Indemnitee  defends the
subject  matter of any Claim in  accordance  with Section  5.3(c),  the expenses
                                                  ---------------
(including  reasonable  attorneys'  fees and costs)  incurred by the  Indemnitee
shall be paid by the  Indemnitor  in  advance of the final  disposition  of such
matter as incurred by the Indemnitee; provided that the Indemnitee undertakes in
                                      --------
writing to repay any such advances in the event that it is ultimately determined
that the Indemnitee is not entitled to  indemnification  under the terms of this
Agreement or applicable law.

         5.5      Limitations.
                  -----------

                  (a)  Notwithstanding  any  provision of this  Agreement to the
contrary,  the  Stockholder  shall have no  obligation  to  indemnify  any Buyer
Indemnitee  under this  Article 5 or to pay  damages in respect of  contract  or
other claims  arising  under this  Agreement or any other  Transaction  Document
unless the Buyer Indemnitees have suffered  indemnifiable Losses hereunder in an
aggregate  amount  attributable  to all  Claims in excess  of One  Million  Five
Hundred  Thousand Dollars  ($1,500,000)  (the  "Threshold").  Once the aggregate
amount of  indemnifiable  Losses  hereunder  exceeds  the  Threshold,  the Buyer
Indemnitees  shall be  entitled to recover the full amount of all such Losses in
excess of the Threshold.

                  (b)  Notwithstanding  any  provision of this  Agreement to the
contrary,  the  maximum  aggregate  liability  of the  Stockholder  to the Buyer
Indemnitees   for  all  claims  arising  under  this  Agreement  and  the  other
Transaction Documents equals ten percent (10%) of the Purchase Price.

                  (c)  Notwithstanding  any  provision of this  Agreement to the
contrary,  neither  Mirant,  Buyer nor Note Buyer shall have any  obligation  to
                                       18


indemnify any Stockholder  Indemnitee  under this Article 5 or to pay damages in
respect of contract or other claims  arising  under this  Agreement or any other
Transaction   Document   unless  the  Stockholder   Indemnitees   have  suffered
indemnifiable  Losses  hereunder in the  aggregate  amount  attributable  to all
Claims in excess of the Threshold; provided, however, that Mirant's, Buyer's and
Note Buyer's obligations to indemnify any Stockholder  Indemnitee for any Losses
arising from for any breach of this Agreement by Mirant,  Buyer or Note Buyer of
their  obligation to pay, or directly or indirectly  resulting in the failure of
Mirant,  Buyer and Note Buyer to pay, the Purchase  Price under this  Agreement,
shall not be subject to the Threshold.  Subject to the foregoing  proviso,  once
the  aggregate   amount  of  Losses  exceeds  the  Threshold,   the  Stockholder
Indemnitees  shall be entitled to recover the full amount of Losses in excess of
the Threshold.

                  (d)  Notwithstanding  any  provision of this  Agreement to the
contrary, the maximum aggregate liability of Mirant, Buyer and Note Buyer to the
Stockholder  Indemnitees  for all claims  arising  under this  Agreement and the
other  Transaction  Documents  equals ten percent  (10%) of the Purchase  Price;
provided,  however,  that Mirant's,  Buyer's and Note Buyer's  liability for any
breach of this Agreement by Mirant,  Buyer or Note Buyer of their  obligation to
pay, or directly or  indirectly  resulting in the failure of both Mirant,  Buyer
and  Note  Buyer  to pay,  the  Purchase  Price  shall  not be  subject  to such
limitation.

                  (e) No Indemnitee shall be entitled to  indemnification  under
this  Article 5 for Losses (i)  directly  or  indirectly  caused by a willful or
negligent  act  of  such  Indemnitee  or a  breach  by  such  Indemnitee  of any
representation,  warranty,  covenant  or  other  agreement  set  forth  in  this
Agreement or any duty to the  potential  Indemnitor or (ii) covered by insurance
proceeds from insurance  owned and paid for by the  Stockholder,  the Companies,
the Holding Subsidiaries,  the Partnership or any of their respective Affiliates
prior to the Closing, to the extent that the Buyer Indemnitees  actually receive
such insurance proceeds to cover such Losses.

         5.6 Survival. The representations and warranties made in this Agreement
             --------
or in any exhibit,  schedule,  or any other Transaction  Document or certificate
shall survive any investigation  made by any party hereto and the Closing of the
transactions  contemplated  hereby  until the first  anniversary  of the Closing
Date;  provided,  however,  that the  representations and warranties made by the
Stockholder  (x) in Section 2.12 of this Agreement shall survive until such time
as the  applicable  statute  of  limitations  has  expired  on the  right of the
applicable Governmental Authority to legally impose the Tax liability upon which
the Buyer  Indemnitee's  claimed Loss is based;  and (y) in Section 2.13 of this
Agreement shall survive for a period of two years following the Closing Date. No
party will be liable to another under any warranty or  representation  after the
applicable  expiration of such warranty or  representation;  provided,  however,
that if a claim or notice is given  under  this  Article 5 with  respect  to any
representation  or warranty prior to the applicable  expiration date, such claim
may be pursued to resolution notwithstanding expiration of the representation or
warranty under which the claim was brought.

         5.7      -----------------------------------------.

                  (a)-----------------------------------------------------------
--------------------------------------------------------------------------------
                                       19


                   (b)----------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                  (c)-----------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                  (d)-----------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                  (e)-----------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                  (f)-----------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

(ii) zero in the event that such PREPA Resolution Amount exceeds $35,000,000, as
applicable.

                  (g)-----------------------------------------------------------
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------.

         5.8 Exclusivity of Indemnification.  The indemnification  provisions of
             ------------------------------
this  Article 5 are  intended to provide the  exclusive  remedy as to all Losses
that any party hereunder may incur arising from or relating to the  transactions
contemplated by this Agreement.  Each party hereby waives, to the extent that it
may do so, any other  rights or  remedies  that may arise  under any  applicable
statute, rule or regulation;  provided, however, that the foregoing shall not be
interpreted to limit the types of remedies,  including  specific  performance or
other  equitable  remedies,  which may be sought by an  Indemnitee in connection
with a breach of any covenant or agreement  contained herein and shall not limit
any available remedy for a willful misrepresentation or breach by another party.

         5.9 Consequential  Damages and Remedies. No party will be liable to any
             -----------------------------------  
other  party in  connection  with  this  Agreement,  or any of the  transactions
contemplated  hereby,  for any  consequential,  punitive,  special  or  indirect
damages.  Each  party  hereby  expressly  releases  the  other  parties,   their
respective   Affiliates,    directors,    officers,    employees,   agents   and
representatives from any such liability.



                                    ARTICLE 6
                              CONDITIONS TO CLOSING

         6.1  Conditions to Obligations  of Each Party.  The  obligations of the
              ----------------------------------------
Stockholder,  on the one hand,  and Mirant,  Buyer and Note Buyer,  on the other
hand,  to consummate  the  transactions  contemplated  hereby are subject to the
fulfillment to the reasonable  satisfaction of the party entitled to the benefit
of the conditions in this Section 6.1, on or before the Closing Date, any one or
                                       20


more of which may be  jointly  waived in writing  by the  Stockholder  and Buyer
acting together.

                  (a) No Action  or  Proceeding.  No  preliminary  or  permanent
                      -------------------------
injunction or other order issued by any  Governmental  Entity that declares this
Agreement  invalid in any  material  respect or prevents or would be violated by
the consummation of the transactions  contemplated hereby, or which would have a
Material  Adverse  Effect,  is in  effect.  No  action  or  proceeding  has been
instituted or threatened by any  Governmental  Entity,  other person,  or entity
which  seeks  to  prevent  or  delay  the   consummation  of  the   transactions
contemplated   by  this   Agreement   or  which   challenges   the  validity  or
enforceability  of this  Agreement,  the  result  of which  could  constitute  a
Material Adverse Effect.

                  (b)   Consents,   Approvals   and   Filings.   All   consents,
                        -------------------------------------
authorizations   and  approvals   from,  and  all   declarations,   filings  and
registrations  with,  governmental  agencies or third parties that are listed on
Schedules 2.7, 2.8 and 3.4 shall have been obtained or made, as appropriate. All
waiting  periods  under  the  HSR  Act  shall  have  expired  or  been  properly
terminated.

         6.2  Conditions to  Obligations  of Buyer.  The  obligations of Mirant,
              ------------------------------------
Buyer and Note Buyer to  consummate  the  transactions  contemplated  hereby are
subject to the fulfillment, on or before the Closing Date, of the conditions set
forth in this  Section  6.2, any one or more of which may be waived by Mirant or
Buyer in writing in its discretion.

                  (a)   Representations   and   Warranties;    Covenants.    The
                        ------------------------------------------------
representations  and warranties of the  Stockholder  contained in this Agreement
(as revised,  modified or updated pursuant to Section 4.10 hereof) shall be true
and correct in all material  respects on the Closing  Date;  provided,  however,
that if any portion of any such  representation or warranty is already qualified
by  materiality,  for purposes of  determining  whether this  condition has been
satisfied with respect to such portion of such representation or warranty,  such
portion of such  representation  or  warranty as so  qualified  must be true and
correct in all respects  The  Stockholder  shall have  performed in all material
respects all obligations  required to be performed by it under this Agreement on
or before the Closing Date. At the Closing, the Stockholder shall have delivered
to Buyer a certificate  dated as of the Closing Date to such effect signed by an
authorized representative of the Stockholder.

                  (b)     LNG Term Out under Credit Agreement. The  Term-Out  of
                           -----------------------------------  
all Construction  Loans into Term Loans shall have been  completed  pursuant  to
Section  2.01(b) of the Credit  Agreement  referenced  on Schedule 2.10.
                                                          -------------

                  (c)     Restructuring Activities. The restructuring activities
                          ------------------------  
set forth on Schedule 4.2 shall have been completed.
             ------------

                  (d)      Stock Books.  The  Stockholder  shall have  delivered
                           -----------
minute  books   and   any  corporate  seals  of  the  Company  and  the  Holding
Subsidiaries.

                  (e)      Resignation of Directors.  Buyer shall have  received
                           --------------------------
written  resignations of theany stock books,  stock  ledgers, directors  of  the
Company  and  the  Holding Subsidiaries.
                                       21


                  (f) Satisfaction of Other Closing  Conditions.  All conditions
                      ----------------------------------------- 
to the  obligations  of Mirant,  Buyer and Note  Buyer to close the  transaction
contemplated  under that certain  Stock  Purchase  Agreement by and among Edison
Mission Energy,  EME del Caribe,  Mirant,  Buyer and Note Buyer, dated as of the
date hereof, shall have been satisfied or waived.

         6.3 Conditions to Obligations of the  Stockholder.  The  obligations of
             ---------------------------------------------
the Stockholder to consummate the transactions  contemplated  hereby are subject
to the  fulfillment,  on or before the Closing Date, of the conditions set forth
in this Section  6.3, any one or more of which may be waived by the  Stockholder
in writing in its discretion.

                  (a)   Representations   and   Warranties;    Covenants.    The
                        ------------------------------------------------  
representations  and warranties of Mirant and Buyer  contained in this Agreement
shall be true and correct in all material  respects as of the date hereof and on
the  Closing  Date;  provided,   however,  that  if  any  portion  of  any  such
representation or warranty is already qualified by materiality,  for purposes of
determining  whether  this  condition  has been  satisfied  with respect to such
portion of such representation or warranty,  such portion of such representation
or warranty as so qualified must be true and correct in all respects. Mirant and
Buyer shall have performed in all material respects all obligations  required to
be performed by them under this  Agreement on or before the Closing Date. At the
Closing,  both  Mirant  and Buyer  shall have  delivered  to the  Stockholder  a
certificate  dated as of the Closing Date to such effect signed by the Secretary
of Buyer.

                  (b)      Removal as  Guarantor.  Buyer shall  have caused  the
                           ---------------------
Stockholder  and its  Affiliates to be removed  as a guarantor of the Guaranteed
Indebtedness in accordance with Section 4.3.

                  (c)      Replacement of Insurance  Obligations.   Buyer  shall
                           -------------------------------------
have  replaced  the  Stockholder's  or its  Affiliates' Insurance Obligations in
accordance with Section 4.4.

                  (d)      Assignment  and  Assumption  Agreement.  Buyer or its
                           ---------------------------------------
Affiliate   shall  have  assumed, pursuant  to  the  Assignment  and  Assumption
Agreement referenced in Section 4.5 hereof, all of the  rights  and  obligations
under the OMFM Agreement.



                                    ARTICLE 7
                           TERMINATION AND ABANDONMENT

         7.1      Termination. This Agreement and the transactions  contemplated
                  -----------
hereby may be terminated at anytime prior to the Closing:

                  (a) by Mirant or Buyer, if (i) the Stockholder fails to comply
in any  material  respect  with any of its  covenants  or  agreements  contained
herein, or (ii) any of the representations and warranties of the Stockholder set
forth in Article 2 hereof (as revised,  modified or updated  pursuant to Section
4.8 hereof) is breached or is inaccurate in any material  respect,  or (iii) any
event has occurred or circumstances  exist which have a Material Adverse Effect;
provided,  however,  that neither  Mirant nor Buyer may terminate this Agreement
------------------
pursuant to this Section 7.1(a) if (x) the  Stockholder  has cured such material
noncompliance, breach, inaccuracy or Material Adverse Effect within fifteen (15)
                                       22


business days after the receipt of written  notice thereof by Mirant or Buyer or
(y)  Mirant  or  Buyer  has  breached  in  any  material   respect  any  of  its
representations, warranties or obligations under this Agreement;

                  (b) by the  Stockholder,  if (i)  Mirant,  Buyer or Note Buyer
fails to comply in any material  respect with any of its covenants or agreements
contained herein, or (ii) any of the  representations  and warranties of Mirant,
Buyer or Note Buyer set forth in Section 3 hereof is breached  or is  inaccurate
in any  material  respect;  provided,  however,  that  the  Stockholder  may not
                            ------------------
terminate  this Agreement  pursuant to this Section 7.1(b) if (x) Mirant,  Buyer
and Note Buyer has cured such noncompliance, breach or inaccuracy within fifteen
(15)  business  days  after  the  receipt  of  written  notice  thereof  by  the
Stockholder or (y) the Stockholder  has breached in any material  respect any of
its representations, warranties or obligations under this Agreement; or

                  (c) by the Stockholder,  on the one hand, or Mirant,  Buyer or
Note  Buyer,  on the other  hand,  if (i) a  Governmental  Entity  has  issued a
non-appealable  order,  decree or ruling or taken any other action (which order,
decree or ruling the parties hereto have used all their commercially  reasonable
efforts to lift), which permanently  restrains,  enjoins or otherwise  prohibits
the  transactions  contemplated  by this  Agreement;  or (ii) a condition to the
terminating party's performance hereunder has not been satisfied or waived prior
to December 31, 2001;  provided,  however,  that a party may not terminate  this
                       ------------------
Agreement pursuant to this Section 7.1(c) if such party's failure to fulfill any
of its  obligations  under this  Agreement is the reason for the  occurrence  of
either of the foregoing clauses (i) or (ii) hereof.

         7.2  Notice  of  Termination.  In the  event  of  termination  of  this
              -----------------------
Agreement  pursuant  to  Section  7.1  hereof,  written  notice  shall  be given
                         ------------ 
forthwith by the terminating  party to the other parties and this Agreement will
terminate  and  the  transactions  contemplated  hereby  will  be  abandoned  in
accordance  with the terms of this  Article  7,  without  further  action by any
party.

         7.3 Effect of Termination.  If this Agreement is terminated as provided
             ---------------------
in this Article 7, no party to this Agreement will have any liability or further
        --------- 
obligation to any other party to this Agreement,  except as provided in Sections
4.1(b), 8.10, 8.11, 8.13, and 8.14 and except that termination of this Agreement
will not affect  any  liability  of any party for any  breach of this  Agreement
prior  to  termination,  or any  breach  at any  time of the  provisions  hereof
surviving termination.



                                    ARTICLE 8
                                  MISCELLANEOUS

         8.1      Definitions.
                  -----------

                  (a)   "Action"   means   any   action,   suit,   counterclaim,
cross-claim,  appeal,  arbitration  or mediation for any relief  against a party
hereunder  or any of its  Affiliates,  successors  or  assigns,  declaratory  or
otherwise,  to enforce the terms of this  Agreement  or to declare  rights under
this Agreement.

                  (b)     "Affiliate" has the meaning ascribed to it in Rule 405
under the Securities Act.
                                       23


                  (c)   "Bankruptcy   Exception"   means  the   limitations   on
enforceability   imposed  by  general   principles  of  equity  and  bankruptcy,
insolvency,  reorganization  and  moratorium  and other similar laws relating to
creditors' rights.

                  (d)   "Buyer" has the meaning  ascribed to it in the preamble
to this Agreement.

                  (e)   "Buyer Indemnitees"  means  Buyer  and  its   directors,
officers and employees.

                  (f)  "Capital  Stock"  means common  stock,  preferred  stock,
partnership  interests,  limited  liability company interests or other ownership
interests of the issuer thereof.

                  (g)   "Claim" has the meaning ascribed to it in Section 5.3(a)
                                                                  --------------
hereof.
                         
                  (h)   "Closing" has the meaning ascribed to it in Section 1.1 
                                                                     ----------
hereof.

                  (i)   "Closing Date" has the meaning ascribed to it in Section
                                                                         -------
1.2 hereof.
----

                  (j)   "Company" has the meaning  ascribed  to  it in Recital A
hereof.

                  (k)   "Company Shares" has  the  meaning  ascribed  to  it  in
Section 2.3 hereof.
-----------

                  (l)  "Confidential  Information"  means any information not in
the public domain,  in any form,  whether acquired prior to or after the Closing
Date,  received  from the  Stockholder,  the  Company  or any of their  advisors
relating to the business and  operations of the  Stockholder,  the Company,  the
Holding   Subsidiaries,   the  Partnership  and  their  respective   Affiliates,
including,  without limitation,  information regarding vendors, suppliers, trade
secrets,   training  programs,   technical  information,   contracts,   systems,
procedures, know-how, trade names, improvements, price lists, financial or other
data,  business plans,  computer programs,  software systems,  internal reports,
personnel files or any other  compilation of information,  written or unwritten,
which  is or was used in the  business  of the  Stockholder,  the  Company,  the
Holding Subsidiaries, the Partnership or their respective Affiliates, except for
information  (i) that was or becomes  generally  available to the public,  other
than as a result of disclosure  by Mirant or Buyer;  or (ii) that is received by
Mirant or Buyer or any of their  Affiliates on a  non-confidential  basis from a
third  party  that  is  not  prohibited  from  disclosing  such  information  by
obligation to the  Stockholder,  the Company,  the Holding  Subsidiaries  or the
Partnership.

                  (m)   "Contracts"   has  the  meaning   ascribed   to   it  in
Section 2.10 hereof.
------------

                  (n)   "Decision"  means  any   judgment,   order,  ruling,  or
award  granted  with respect to an Action.

                  (o)   "Disclosure  Schedule" means  the disclosure schedule of
the Stockholder attached  hereto  as  Schedule  2  and  the  Schedules  included
                                      -----------
therein.  
             
                  (p)   "Distributions"  has  the  meaning  ascribed  to  it  in
Section 2.16 hereof.
------------

                  (q)   "DOJ" means the United States Department of Justice.
                                       24


                  (r)   "Eco Holdings"  means  EcoElectrica  Holdings,  Ltd., an
entity  organized under the laws of the Cayman Islands.

                  (s)   "Eco Ltd." means EcoElectrica Ltd., an entity  organized
under the laws of the Cayman Islands.

                  (t)   "Environmental   Laws"   means  all   applicable   laws,
regulations  and other  requirements  of  Governmental  Entities or duties under
common  law  (other  than the  same  relating  to  Taxes)  relating  to toxic or
hazardous substances,  wastes,  pollution or to the protection of health, safety
or the environment.

                  (u)   "Environmental  Permits"  means  all  licenses,  permits
and other authorizations or registrations required under all Environmental Laws.

                  (v)   "Facility" has  the meaning ascribed to it in Recital  A
                                                                      ----------
hereof.
                         
                  (w)   "FERC" means the Federal Energy Regulatory Commission.

                  (x)   "Financial Statements" has the meaning ascribed to it in
Section 2.6(a).
--------------

                  (y)   "FTC" means the United States Federal Trade Commission.

                  (z)  "Governmental   Entity"  means  any  court,   arbitrator,
federal,   state  or  local  government   agency,   regulatory  body,  or  other
governmental authority.

                  (aa)  "Guaranteed Indebtedness" has the meaning ascribed to it
in Section 4.3. hereof.
   -----------

                  (bb)  "Holding   Subsidiaries"  means  all  of   the  entities
identified as Holding  Subsidiaries on Schedule 2.2 to the Agreement.
                                       ------------

                  (cc)  "Holding Subsidiary Shares" has  the meaning ascribed to
it in Section 2.3 hereof.

                  (dd)  "HSR  Act"   means   the    Hart-Scott-Rodino  Antitrust
Improvements Act of 1976, as amended.

                  (ee)  "Indemnitee" means the party entitled to indemnification
under Article 5 hereof.
      ---------

                  (ff)  "Indemnitor"  means  the  party  obligated   to  provide
indemnity under Article 5 hereof.
                ---------

                  (gg)  "Insurance Obligations" has  the  meaning ascribed to it
in Section 4.4 hereof.
   -----------

                  (hh)  "knowledge"  or  "known"  means,  with  respect  to  any
individual,  the  actual  knowledge  of such  individual  or, in the case of the
Stockholder,  the actual knowledge,  without independent investigation,  of Greg
Curran and Rick Sierra.
                                       25


                  (ii)  "License"  means   any   permit,    license   or   other
governmental authorization.

                  (jj) "LNG Tolling  Agreement"  means the LNG Tolling  Services
Agreement between the Partnership and the Stockholder dated October 31, 1997.

                  (kk)  "Losses" has the meaning ascribed to  it in  Section 5.1
                                                                     -----------
hereof.
                      
                  (ll)  "Material  Adverse  Effect" means an effect or series of
effects that, either individually or in the aggregate,  is materially adverse to
the  business,  assets,  financial  condition  or results of  operations  of the
Partnership,  taken as a whole;  provided,  however,  that  any such  effect  or
effects  arising from any  circumstances  not disclosed in this Agreement or the
schedules  hereto  that  result,  or are  reasonably  likely  to  result,  in an
uninsured loss to the Partnership in excess of $30,000,000 shall be conclusively
presumed to constitute a Material  Adverse  Effect;  and provided  further that,
notwithstanding   the   foregoing,   none  of  the  following  will  be  deemed,
individually  or together,  to constitute a "Material  Adverse  Effect:" (x) any
changes,  circumstances  or effects  resulting  from or  relating  to changes or
developments  in  the  economy,  financial  markets,  commodity  markets,  laws,
regulations  or rules  in the  applicable  electric  power  markets  (including,
without limitation, changes in laws or regulations affecting owners or providers
of electric  generation,  transmission  or  distribution  as a group and not the
Partnership  exclusively)  or in  the  political  climate  generally  or in  any
specific  region;  (y) any  changes  in  conditions  or  developments  generally
applicable to the industries in which the  Partnership is involved;  and (z) any
changes,  circumstances or effects  attributable to the announcement or pendency
of the transactions  contemplated by this Agreement (including any cancellations
of or delays in customer agreements,  any reductions in sales, any disruption in
supplier,  distributor,   partner  or  similar  relationships  or  any  loss  of
employees),  or resulting  from or relating to compliance  with the terms of, or
the taking of any action required by, this Agreement.

                  (mm)  "OMFM  Agreement" means the Operations,  Maintenance and
Fuels   Management  Agreement   between  the  Partnership  and  EI  Puerto  Rico
Operations, Inc. dated October 31, 1997.

                  (nn)  "Other  Assets"  means  those   items   set   forth   on
Schedule 8.1.
------------

                  (oo)  "Partnership  Interests"  means   the  interests  in the
Partnership,  as  described  in Section 2.3 hereof.
                                -----------

                  (pp)  "Partnership" means  EcoElectrica, LP, a Bermuda limited
partnership.

                  (qq)  "Partnership Agreement" means the Partnership  Agreement
dated December 10, 1997 between EcoElectrica Holdings, Ltd. and EcoElectrica Ltd
relating to the Partnership.

                  (rr)  "PREPA" means the Puerto Rico Electric Power Authority.

                  (ss) "PPOA" means the Power  Purchase and Operating  Agreement
dated March 10, 1995, as amended, between PREPA and the Partnership.

                  (tt)  "Prevailing Party" has  the  meaning  ascribed  to it in
Section 8.14.
------------
                                       26


                  (uu)  "Purchase Price" has  the  meaning  ascribed  to  it  in
Section 1.3 hereof.
-----------

                  (vv)  "Securities Act"  means  the  Securities Act of 1933, as
amended.

                  (ww)  Stockholder" means Enron Asset Holdings, LLC, a Delaware
limited liability company.

                  (xx)  "Stockholder  Indemnitees" means the Stockholder and its
Affiliates,  and the directors, officers and employees of any of them.

                  (yy) "Subordinated Note" means the EDC Subordinated Promissory
         Note   representing  a  loan  from  Enron   Development  Corp.  to  the
         Partnership  in the  principal  amount  of  $12,064,185  (plus  accrued
         interest  through  5/31/01 of $6,100,329  and interest  accruing  after
         5/31/01 in accordance with the terms of the Note).

                  (zz)  "Tax or  Taxes"  means  all  taxes,  imposts,  duties or
         assessments of any kind or nature whatsoever,  and howsoever  described
         or denominated,  including income,  gross receipts,  license,  payroll,
         employment,  excise,  severance,  stamp, occupation,  premium, windfall
         profits, environmental,  property, ad valorem, customs duties, capital,
         wealth, capital stock, franchise, profits, withholding, social security
         (or  similar),  sales,  use,  transfer,   registration,   value  added,
         alternative or add-on minimum, estimated, or other tax or charge of any
         kind whatsoever,  including any interest, penalty, or addition thereto,
         whether  disputed  or  not,  imposed  by  any  governmental  or  taxing
         authority.

                  (aaa) "Taxpayer"  has   the  meaning   ascribed   to   it   in
Section 2.12(a) hereof.
---------------

                  (bbb) "Threshold"  has   the   meaning   ascribed   to  it  in
Section 5.5(a) hereof.
--------------

                  (ccc)  "Transaction  Documents"  means  this  Agreement,   the
Assignment and Assumption  Agreement  referenced in Section 4.5 hereof,  and all
necessary  stock  powers  required  to  be  delivered  in  connection  with  the
consummation of the transaction contemplated by this Agreement.

         8.2 Notices.  All notices,  requests,  demands and other communications
             -------
hereunder  shall be in writing and shall be deemed given upon personal  delivery
or three (3) days after being mailed by certified or  registered  mail,  postage
prepaid,  return receipt requested, or one (1) business day after being sent via
a nationally  recognized  overnight courier service if overnight courier service
is  requested  from  such  service  or  upon  receipt  of  electronic  or  other
confirmation  of  transmission  if sent via  facsimile,  to the  parties,  their
successors  in  interest  or their  assignees  at the  following  addresses  and
telephone  numbers,  or at such  other  addresses  or  telephone  numbers as the
parties may designate by written notice in accordance with this Section 8.2:
                                                                -----------

                  If to Mirant, Buyer or Note Buyer:

                                         Mirant EcoElectrica Investments I, Ltd.
                                         1155 Perimeter Center West
                                         Atlanta, Georgia 30338
                                       27



                                         Attn: J.R. Harris

                                         Telephone No.: (678) 579-7115
                                         Facsimile No.: (678) 579-7979

                  With a copy to:        Troutman Sanders LLP
                                         401 9th Street, NW, Suite 1000
                                         Washington, DC 20004-2134
                                         Attn: Ronald R. Ross, Esq.

                                         Telephone No.: (202) 274-2963
                                         Facsimile No.: (202) 654-5625

                  If to the Stockholder: Enron Global Assets & Services
                                         333 Clay, Suite 2100
                                         Houston, TX 77002
                                         Attn: General Counsel

                                         Facsimile No.: (713) 345-5538

                  With a copy to:        Enron Corp.
                                         1400 Smith Street
                                         Houston, TX 77002
                                         Attn: General Counsel
                                         Attn: Kate Cole

                                         Facsimile No.: (713) 853-3920


         8.3  Assignability  and Parties in  Interest.  This  Agreement  and the
              --------------------------------------- 
rights,  interests or  obligations  hereunder  may not be assigned by any of the
parties  hereto without the prior written  consent of the other parties  hereto;
provided, however, that this Agreement may be assigned to an Affiliate, but that
no such assignment shall relieve Mirant, Buyer or Note Buyer of their respective
obligations  hereunder.  This  Agreement  shall  inure to the  benefit of and be
binding upon Mirant,  Buyer,  Note Buyer, the Stockholder,  and their respective
permitted successors and assigns. Nothing in this Agreement will confer upon any
person or entity not a party to this Agreement,  or the legal representatives of
such person or entity,  any rights or remedies of any nature or kind  whatsoever
under or by reason of this Agreement.

         8.4  Publicity.  No press  release  or  other  public  announcement  or
              ---------
disclosure  related to this Agreement or the  transactions  contemplated  herein
(including but not limited to the terms and conditions of this Agreement)  shall
be issued or made without the prior approval of Buyer,  on the one hand, and the
Stockholder,  on the other hand. The foregoing shall not prohibit any disclosure
required  by law;  provided  that such  disclosure  is made  pursuant to Section
                   --------
4.1(b) hereof and that the  disclosing  party consults with the other parties at
least one (1)  business  day in  advance  of such  disclosure.  To the  extent a
disclosure is required by law, the  disclosing  party shall  cooperate  with the
other parties hereto to prepare an appropriate  confidential  treatment  request
                                       28


with the applicable  Governmental  Entity in order to prevent  disclosure of any
sensitive  matters as to which the disclosing party believes there exists a good
faith argument for confidential treatment.

         8.5 Complete  Agreement.  This  Agreement,  the exhibits and  schedules
             -------------------       
hereto and the other  Transaction  Documents  contain or will contain the entire
agreement   between  the  parties  hereto  with  respect  to  the   transactions
contemplated  herein and  therein  and shall  supersede  all  previous  oral and
written   and  all   contemporaneous   oral   negotiations,   commitments,   and
understandings including,  without limitation,  all letters,  memoranda or other
documents or communications,  whether oral, written or electronic,  submitted or
made  by  (a)  Mirant,   Buyer  Note  Buyer  or  their   respective   agents  or
representatives  to the Stockholder,  Credit Suisse First Boston  Corporation or
any of their  respective  agents  or  representatives,  or (b) the  Stockholder,
Credit  Suisse  First  Boston   Corporation  or  their   respective   agents  or
representatives  to Mirant,  Buyer, Note Buyer or any of their respective agents
or representatives,  in connection with the bidding process which occurred prior
to the  execution  of  this  Agreement  or  otherwise  in  connection  with  the
negotiation and execution of this Agreement.  No  communications by or on behalf
of the Stockholder,  including responses to any questions or inquiries,  whether
orally, in writing or  electronically,  and no information  provided in any data
room or any copies of any  information  from any data room  provided  to Mirant,
Buyer or Note Buyer or any other information shall be deemed to (x) constitute a
representation,  warranty or an agreement of the Stockholder,  or (y) be part of
this Agreement.

         8.6 Acknowledgment;  Independent Due Diligence.  Mirant, Buyer and Note
             ------------------------------------------
Buyer  acknowledge  that the  Stockholder  has not made  any  representation  or
warranty,  expressed  or  implied,  as to the  accuracy or  completeness  of any
information  regarding  the  Stockholder,  the  Company  or any  of the  Holding
Subsidiaries,  Eco  Holdings,  Eco Ltd.,  the  Partnership  or the  Facility not
included in this  Agreement  and the  schedules  hereto.  Without  limiting  the
generality of the foregoing,  no representation or warranty is made with respect
to any information in the Confidential Information Memorandum, dated April 2001,
or  any  supplement  or  amendment  thereto  provided  in  connection  with  the
solicitation  of proposals to enter into the  transactions  contemplated by this
Agreement,  such information having been provided for the convenience of Mirant,
Buyer and Note Buyer in order to assist Mirant,  Buyer and Note Buyer in framing
its due diligence  efforts.  Mirant,  Buyer and Note Buyer  further  acknowledge
that:  (a) Mirant,  Buyer and Note  Buyer,  either  alone or  together  with any
individuals  or entities  Mirant,  Buyer or Note Buyer has retained to advise it
with  respect  to the  transactions  contemplated  hereby,  have  knowledge  and
experience in transactions of this type and in the business of the  Stockholder,
the  Company,  the  Holding  Subsidiaries,   Eco  Holdings,  Eco  Ltd.  and  the
Partnership  and is  therefore  capable  of  evaluating  the risks and merits of
acquiring  the  Company  Shares;  (b)  it has  relied  on  its  own  independent
investigation,  and  has  not  relied  on  any  information  or  representations
furnished by the Stockholder or any  representative  or agent thereof (except as
specifically set forth herein), in determining to enter into this Agreement; (c)
neither the  Stockholder nor any  representative  or agent thereof has given any
investment,  legal or other  advice or  rendered  any  opinion as to whether the
purchase of the Company Shares is prudent,  and Mirant, Buyer and Note Buyer are
not  relying  on  any  representation  or  warranty  by the  Stockholder  or any
representative  or agent  thereof  except  as set forth in this  Agreement;  (d)
Mirant, Buyer and Note Buyer have conducted extensive due diligence, including a
review of the documents contained in a data room prepared by or on behalf of the
                                       29


Stockholder ; and (e) the  Stockholder  has made available to Mirant,  Buyer and
Note Buyer all  documents,  records and books  pertaining  to the  Company,  the
Holding Subsidiaries,  the Partnership and the Facility that Mirant, Buyer, Note
Buyer and their  attorneys,  accountants,  advisors have requested,  and Mirant,
Buyer,  Note Buyer and their  attorneys,  accountants  and advisors have had the
opportunity  to visit  the  Facility,  and ask  questions  and  receive  answers
concerning  the Company,  the Holding  Subsidiaries,  the  Partnership,  and the
Facility and the terms and conditions of this Agreement. All such questions have
been  answered  to  Mirant's,   Buyer's  and  Note  Buyer's  full  and  complete
satisfaction.

         8.7 Disclaimer Regarding Assets. Except as otherwise expressly provided
             ---------------------------        
herein, the Stockholder expressly disclaims any representations or warranties of
any kind or nature, express or implied, as to the condition, value or quality of
the assets or operations of the Company, the Holding Subsidiaries, Eco Holdings,
Eco  Ltd.,  the  Partnership,  the  Facility  or the  prospects  (financial  and
otherwise),  risks and other incidents of the Company, the Holding Subsidiaries,
Eco Holdings,  Eco Ltd., the  Partnership or the Facility,  and the  Stockholder
specifically disclaims any representation or warranty of merchantability, usage,
suitability or fitness for any  particular  purpose with respect to such assets,
or any part thereof,  or as to the  workmanship  thereof,  or the absence of any
defects  therein,  whether latent or patent,  or compliance  with  environmental
requirements,  or as to the  condition  of, or the  rights of the  Company,  the
Holding  Subsidiaries,  Eco Holdings,  Eco Ltd., the Partnership or the Facility
in, or their title to, any of their assets, or any part thereof,  or whether the
Company, the Holding  Subsidiaries,  Eco Holdings,  Eco Ltd., the Partnership or
the Facility possess  sufficient real property or personal property interests to
own or operate such assets.  Except as expressly provided herein, no schedule or
exhibit to this Agreement,  nor any other material or information provided by or
communications   made   by  the   Stockholder   or  any  of   their   respective
representatives will cause or create any warranty, express or implied, as to the
condition,  value or quality of such assets.  Without limiting the generality of
the  foregoing,  no  representation  or  warranty  is made with  respect  to the
accuracy of any information provided in any site tours or on any web site, or in
any meetings  with  management  or other  personnel of the Company,  the Holding
Subsidiaries,  Eco Holdings,  Eco Ltd., the  Partnership,  the Facility or their
respective representatives, except as expressly set forth herein.

         8.8  Modifications,  Amendments  and Waivers.  At any time prior to the
              ---------------------------------------
Closing Date or termination of this Agreement, the Stockholder, on the one hand,
and  Mirant,  Buyer  and Note  Buyer,  on the  other  hand,  may (a)  waive  any
inaccuracies  in the  representations  and warranties of the other  contained in
this Agreement or in any other Transaction Document; and (b) waive compliance by
the other  party  with any of the  covenants  or  agreements  contained  in this
Agreement.  No  waiver  of any of the  provisions  of  this  Agreement  will  be
considered,  or will constitute,  a waiver of any of the rights or remedies,  at
law or equity,  of the party entitled to the benefit of such  provisions  unless
made in  writing  and  executed  by the party  entitled  to the  benefit of such
provision.

         8.9 Headings;  References. The headings contained in this Agreement and
             ---------------------
the other  Transaction  Documents are for reference  purposes only and shall not
affect in any way the meaning or  interpretation  of this Agreement.  References
herein to articles,  sections,  schedules and exhibits  refer to the  referenced
articles, sections, schedules or exhibits hereof unless otherwise specified.
                                       30


         8.10  Governing Law. This Agreement shall be governed by, and construed
               -------------
and enforced in accordance with, the internal laws of the State of Texas.

         8.11 Submission to Jurisdiction.  All actions or proceedings arising in
              --------------------------
connection with this Agreement  shall be tried and litigated  exclusively in the
state or federal  courts  located in the County of Harris,  State of Texas.  The
aforementioned  choice of venue is intended by the parties to be  mandatory  and
not  permissive in nature,  thereby  precluding  the  possibility  of litigation
between the parties  with  respect to or arising  out of this  Agreement  in any
jurisdiction  other than that  specified  in this  paragraph.  Each party hereby
waives any right it may have to assert the doctrine of forum non  conveniens  or
similar doctrine or to object to venue with respect to any proceeding brought in
accordance with this paragraph, and stipulates that the state and federal courts
located  in the  County  of  Harris,  State  of  Texas  shall  have in  personam
jurisdiction  over each of them for the purpose of litigating  any such dispute,
controversy,  or proceeding. Each party hereby authorizes and accepts service of
process  sufficient  for  personal  jurisdiction  in any  action  against  it as
contemplated  by this  Section 8.11 by  registered  or  certified  mail,  return
receipt requested,  postage prepaid, to its address for the giving of notices as
set forth in Section 8.2.  Nothing herein shall affect the right of any party to
serve process in any other manner permitted by law.

         8.12  Severability.  Any provision of this Agreement  which is invalid,
               ------------
illegal, or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity,  illegality,  or unenforceability,
without   affecting  in  any  way  the  remaining   provisions  hereof  in  such
jurisdiction or rendering that or any other provision of this Agreement invalid,
illegal, or unenforceable in any other jurisdiction.

         8.13 Expenses of Transactions. All fees, costs and expenses incurred by
              ------------------------
Mirant, Buyer and Note Buyer in connection with the transactions contemplated by
this  Agreement  shall be borne by Mirant,  Buyer and Note Buyer,  and all fees,
costs and expenses  incurred by Stockholder in connection with the  transactions
contemplated  by  this  Agreement  shall  be  borne  by  the  Stockholder.   The
Stockholder shall be liable for any fees or commissions payable to Credit Suisse
First Boston  Corporation in connection  with the  transactions  contemplated by
this   Agreement  to  the  extent  they  become  due  pursuant  to   contractual
arrangements made by or on behalf of the Stockholder.

         8.14  Attorneys'  Fees.  If Mirant,  Buyer,  Note Buyer or any of their
               ----------------
Affiliates,  successors or assigns brings any Action against the  Stockholder or
any of its  Affiliates,  successors or assigns,  or if the Stockholder or any of
its Affiliates,  successors or assigns brings any Action against Mirant,  Buyer,
Note Buyer or any of their  Affiliates,  successors or assigns,  in each case in
connection with this  Agreement,  in addition to any damages and costs which the
prevailing party otherwise would be entitled, the non-prevailing party shall pay
to the  prevailing  party  its  actual  attorneys'  fees and costs  incurred  in
bringing and  prosecuting  such Action  and/or  enforcing  any Decision  granted
therein,  all of which shall be deemed to have  accrued on the  commencement  of
such  Action and shall be paid  whether or not such  action is  prosecuted  to a
Decision. Any Decision entered in such Action shall contain a specific provision
providing  for the recovery of attorneys'  fees and costs  incurred in enforcing
such  Decision.  For the purposes of this Section  8.14,  attorneys'  fees shall
                                          -------------
include,  without limitation,  fees incurred in the following:  (a) postjudgment
motions and collection actions; (b) contempt proceedings; (c) garnishment,  levy
                                       31


and debtor and third  party  examinations;  (d)  discovery;  and (e)  bankruptcy
litigation.  For purposes of this Section 8.14, the "prevailing party" means the
party who agrees to dismiss  an action on the other  party's  payment of the sum
allegedly due or performance of the covenants allegedly breached, or who obtains
substantially  the  relief  sought  by it.  If there are  multiple  claims,  the
prevailing party shall be determined with respect to each claim separately.  The
prevailing  party  shall be the party who has  obtained  the  greater  relief in
connection with any particular  claim,  although,  with respect to any claim, it
may be determined that there is no prevailing party.

         8.15     Joint and  Several  Liability ; Waiver. (a)  Whether   or  not
                  ------------------------------------    ===
expressly  stated  in  this Agreement,  all of Buyer's and Note Buyer's  payment
obligations under this Agreement are the joint and several obligations of Buyer,
Note Buyer and Mirant.

                  (b) Without in any manner  limiting the  obligations of either
Mirant, Buyer or Note Buyer hereunder, the Stockholder may, subject to the terms
and conditions hereof, (i) accept partial payments from either Mirant,  Buyer or
Note Buyer on account of the obligations; (ii) create new indebtedness or renew,
compromise,  extend,  increase,  accelerate  and  otherwise  change the time for
payment of, or otherwise change the terms of, any of the Transaction  Documents,
or any part thereof;  (iii) release or substitute  either Mirant,  Buyer or Note
Buyer,  and  otherwise  deal  with  either  Mirant,  Buyer or Note  Buyer as the
Stockholder  may  determine in accordance  with the terms hereof and  applicable
law; (iv) settle or release,  either by agreement or by operation of law, either
Mirant,Buyer  or Note Buyer;  and (v) proceed  directly  against the property of
either  Mirant,  Buyer or Note Buyer  without  proceeding  against  the other to
collect and recover the full amount of the  obligations or any portion  thereof,
and each of  Mirant,  Buyer  and Note  Buyer  waives  any right to  require  the
Stockholder  to proceed  against  the other,  or pursue any other  remedy in the
Stockholder's power whatsoever.

                  (c) Each of  Mirant,  Buyer and Note Buyer  hereby  waives any
defense  arising by reason of any disability or other defense of the other or by
reason of the  cessation  from any action of any kind  against  the  other.  The
Stockholder  may,  at its  election,  exercise  any  right or remedy it may have
against either Mirant, Buyer or Note Buyer without affecting or impairing in any
way the liability of the other hereunder.  The  Stockholder's  rights under this
Agreement and the other Transaction Documents will be enforceable without regard
to the  validity,  regularity or  enforceability  of the  obligations  of either
Mirant, Buyer or Note Buyer or any document evidencing the same.

                  (d) Until all of the obligations  under this Agreement and the
other  Transaction  Documents  have been fully and  finally  satisfied,  neither
Mirant,  Buyer nor Note Buyer shall have any right of  subrogation to any of the
rights  of the  Stockholder  against  Mirant,  Buyer or Note  Buyer  and each of
Mirant,  Buyer and Note Buyer  waives any right to enforce any remedy  which the
Stockholder now has or may hereafter have against Mirant, Buyer or Note Buyer.

                  (e) Each of Mirant, Buyer and Note Buyer waives all rights and
defenses  arising out of an election of remedies by the Stockholder  even though
that election of remedies has destroyed Mirant's, Buyer's or Note Buyer's rights
of subrogation, reimbursement and/or contribution against the other.
                                       32


         8.16  Further  Assurances.  Upon the  reasonable  request of a party or
               -------------------
parties  hereto at any time after the Closing  Date,  the other party or parties
shall  forthwith  execute and deliver such further  instruments  of  assignment,
transfer,  conveyance,   endorsement,   direction  or  authorization  and  other
documents  as the  requesting  party  or  parties  or its or their  counsel  may
reasonably request in order to effectuate the purposes of this Agreement.

         8.17  Counterparts.  Facsimile  transmission  of  any  signed  original
               ------------
document and/or  retransmission  of any signed  facsimile  transmission  will be
deemed the same as delivery  of an  original.  At the request of any party,  the
parties  will confirm  facsimile  transmission  by signing a duplicate  original
document. This Agreement may be executed in counterparts, each of which shall be
deemed  an  original,  but all of which  shall  constitute  but one and the same
instrument.



              [The  remainder  of this page has been  intentionally  left blank;
signature page follows.]

                                       33





         IN  WITNESS  WHEREOF,  each of the  parties  hereto has  executed  this
Agreement as of the date first written above.



           BUYER:

           MIRANT ECOELECTRICA INVESTMENTS I, LTD.



           By:                                                           
                    -----------------------------------------------------

           Name:                                                         
                    -----------------------------------------------------

           Title:                                                        
                    -----------------------------------------------------



           NOTE BUYER

           MIRANT ECOELECTRICA FINANCE, LTD.



           By:                                                           
                    -----------------------------------------------------

           Name:                                        
                    -----------------------------------------------------

           Title:                                                        
                    -----------------------------------------------------



           MIRANT:

           MIRANT CORPORATION



           By:                                                           
               ----------------------------------------------------------

           Name:                                                         
                 --------------------------------------------------------

           Title:                                                        
                  -------------------------------------------------------



                                       34


           THE STOCKHOLDER:

           ENRON ASSET HOLDINGS, LLC

           By: Enron Finance Management, LLC
           Its Class A and Managing Member

                    By: Enron Corp.
                    Its Sole Member



                    By:                                                  
                          --------------------------------------------------

                    Name:                                                
                          ------------------------------------------------

                    Title:                                               
                          -----------------------------------------------
 




                                       35