OFFERING CIRCULAR

THE EXCHANGE OFFERS AND SOLICITATION OF ACCEPTANCES OF THE PREPACKAGED PLAN OF

We are offering (the “Exchange Offers”) (i) to exchange (the “Convertible Debentures Exchange Offer”) $1,000 principal amount of our 7.5% Senior Secured Notes due 2008 (the “New Secured Notes”) for each $1,000 principal amount of our outstanding 2.5% Convertible Debentures due 2021 (the “Convertible Debentures”) and (ii) to exchange (the “Senior Notes Exchange Offer”) $1,000 principal amount of our New Secured Notes for each $1,000 principal amount of our outstanding 7.4% Senior Notes due 2004 (the “Senior Notes” and, together with the Convertible Debentures, the “Exchange Offer Securities”). The New Secured Notes will be secured on a first-priority basis by a lien on substantially all of the tangible and intangible assets of our subsidiaries listed on Annex B hereto (the “Grantor Subsidiaries”) including certain real property and, subject to certain limitations, a pledge of 100% of the equity interests in certain indirect U.S. subsidiaries of Mirant Corporation (“Mirant”) and 65% of the equity interests in certain indirect foreign subsidiaries of Mirant, in each case owned directly by such Grantor Subsidiaries, as more fully described herein. The first priority liens are expected to be shared equally and ratably with our lenders under the Mirant Secured Credit Facility, lenders under the Mirant Americas Generation, LLC (“MAG”) Secured Credit Facility (as defined herein), the trustee under the indenture governing up to $500 million of the New MAG Notes (as defined herein) (for the benefit of the holders of the New MAG Notes) and holders of certain future indebtedness that Mirant or MAG may enter into from time to time, each as defined and described herein.

Subject to the terms and conditions of the Exchange Offers and the Plan of Reorganization (as defined herein), we will issue New Secured Notes in exchange for all outstanding Exchange Offer Securities that are properly tendered and not withdrawn prior to the expiration of the Exchange Offers. The Convertible Debentures Exchange Offer and the Senior Notes Exchange Offer are independent of each other. The Exchange Offers, however, are conditioned upon the exchange of at least 85% of the outstanding aggregate principal amount of the Senior Notes and the Convertible Debentures subject to the Exchange Offers (the “Minimum Tender Condition”). These Exchange Offers are open to all holders of Exchange Offer Securities (“Noteholders”), and are conditioned upon, among other things, our concurrent entry into the Mirant Secured Credit Facility, which will refinance our existing credit facilities (as more fully described herein) and the concurrent entry by MAG into the MAG Secured Credit Facility which will refinance MAG’s existing credit facilities. The exchange of the Exchange Offer Securities for New Secured Notes and the refinancing of our existing credit facilities with the Mirant Secured Credit Facility are collectively referred to herein as the “Restructuring Transactions.” Subject to applicable securities laws and the terms set forth in this Offering Circular and Disclosure Statement and Solicitation of Acceptances of a Prepackaged Plan of Reorganization (“Offering Circular and Disclosure Statement”), we reserve the right to waive any and all conditions to the Exchange Offers, to extend or terminate the Exchange Offers in our sole and absolute discretion, which may be for any or no reason, and otherwise to amend the Exchange Offers in any respect.

If the Minimum Tender Condition is not satisfied or waived by the Expiration Date, or we are not able to negotiate a new Mirant Secured Credit Facility with substantially all of the lenders under our existing credit facilities, but the Restructuring Transactions are supported by a significant percentage of our creditors, we may seek to consummate the Restructuring Transactions by means of a “prepackaged” plan of reorganization under Chapter 11 of the United States Bankruptcy Code. Therefore, in this Offering Circular and Disclosure Statement we are also soliciting acceptances of a prepackaged plan of reorganization (the “Plan of Reorganization”). Through the Plan of Reorganization all Noteholders would receive the same New Secured Notes being offered in the Exchange Offers provided that sufficient holders (i.e., holders representing at least 66 2/3% in principal amount and more than 50% in number of those Noteholders who actually vote) vote in favor of the Plan of Reorganization and the other conditions to the Plan of Reorganization are satisfied. Only those Noteholders who actually vote are counted for these purposes and therefore it is important that you execute and return the enclosed Ballot (as defined herein). Your acceptance of the Exchange Offers does not constitute a vote in favor of the Plan of Reorganization, so you must execute and return the Ballot.

THE BOARD OF DIRECTORS OF MIRANT CORPORATION RECOMMENDS THAT NOTEHOLDERS ACCEPT THE EXCHANGE OFFERS AND VOTE IN FAVOR OF THE PLAN OF REORGANIZATION.

THE BOARD OF DIRECTORS OF MIRANT CORPORATION HAS NOT AT THIS TIME TAKEN ANY CORPORATE ACTION APPROVING A BANKRUPTCY FILING.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS OFFERING CIRCULAR AND DISCLOSURE STATEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

See “Risk Factors” beginning on page 20 for a discussion of risks you should consider before tendering your Exchange Offer Securities or voting on the Plan of Reorganization.

This solicitation of acceptances of the Plan of Reorganization is being conducted to obtain sufficient acceptances of the Plan of Reorganization prior to the filing of a voluntary case under Chapter 11 of the United States Bankruptcy Code. Because no Chapter 11 case has yet been commenced, this Offering Circular and Disclosure Statement has not been approved by the Bankruptcy Court as containing adequate information within the meaning of section 1125(a) of the Bankruptcy Code. Mirant has not at this time taken any action approving a bankruptcy filing.

This Offering Circular and Disclosure Statement constitutes neither an offer to exchange nor a solicitation of consents or acceptances in any jurisdiction in which, or from any person to or from whom, it is unlawful to make such offer or solicitation under applicable federal securities or state securities laws. The delivery of this Offering Circular and Disclosure Statement shall not under any circumstances create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that there has been no change in the information set forth herein or any attachments hereto or in the affairs of Mirant or any of its subsidiaries since the date hereof.

Prior to tendering Exchange Offer Securities, or voting on the Plan of Reorganization, Noteholders are encouraged to read and consider carefully this entire Offering Circular and Disclosure Statement, including the Plan of Reorganization annexed hereto as Appendix I and the matters described in this Offering Circular and Disclosure Statement, the Letter of Transmittal (defined herein) and the Ballot.

In making a decision in connection with the Exchange Offers or the Plan of Reorganization, Noteholders must rely on their own examination of Mirant and the terms of the Exchange Offers, the Restructuring Transactions and the Plan of Reorganization, including the merits and risks involved. Noteholders should not construe the contents of this Offering Circular and Disclosure Statement as providing any legal, business, financial or tax advice. Each Noteholder should consult with its own legal, business, financial and tax advisors with respect to any such matters concerning this Offering Circular and Disclosure Statement, the Exchange Offers, the Plan of Reorganization and the Restructuring Transactions contemplated thereby.

Mirant is relying on section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”) to exempt the Exchange Offers from the registration requirements of the Securities Act with respect to the exchange of the Exchange Offer Securities for the New Secured Notes. Mirant is also relying on section 18(b)(4)(C) of the Securities Act to exempt the Exchange Offers and the solicitation of acceptances of the Plan of Reorganization from state securities law requirements.

Neither the fact that a registration statement or an application for a license has been filed under chapter 421-b of the New Hampshire revised statutes with the State of New Hampshire nor the fact that a security is effectively registered or a person is licensed in the State of New Hampshire constitutes a finding by the Secretary of State that any document filed under chapter 421-b is true, complete and not misleading. Neither any such fact nor the fact that an exemption or exception is available for a security or a transaction means that the Secretary of State has passed in any way upon the merits or qualifications of, or recommended or given approval to, any person, security or transaction. It is unlawful to make, or cause to be made, to any prospective purchaser, customer or client any representation inconsistent with the provisions of this paragraph.

The information presented in this Offering Circular and Disclosure Statement includes forward-looking statements in addition to historical information. These statements involve known and unknown risks and relate to future events, our future financial performance or our projected business results. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “targets,” “potential” or “continue” or the negative of these terms or other comparable terminology. Forward-looking statements are only predictions. Actual events or results may differ materially from any forward-looking statement as a result of various factors, including those contained in the section entitled “Risk Factors” and other sections of this Offering Circular and Disclosure Statement, including the documents incorporated by reference herein. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, events, levels of activity, performance or achievements. We expressly disclaim a duty to update any of the forward-looking statements.

We are subject to the informational requirements of the Securities Exchange Act of 1934. Accordingly, we file annual, quarterly and current reports, proxy statements and other information with the SEC. We also furnish to our stockholders annual reports, which include financial statements audited by our independent certified public accountants, and other reports which the law requires us to send to our stockholders. The public may read and copy any reports, proxy statements, or other information that Mirant files at the SEC’s public reference room at Judiciary Plaza, 450 Fifth Street N.W., Washington, D.C. 20549. The public may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available at the web site maintained by the SEC at “http://www.sec.gov.”

Our Common Stock is listed on the New York Stock Exchange under the symbol “MIR.” You can inspect and copy reports, proxy statements and other information about us at the NYSE’s offices at 20 Broad Street, New York, New York 10005.

We have appointed Innisfree M&A Incorporated as the Information Agent for the Exchange Offers and as the Voting Agent for the solicitation of acceptances of the Plan of Reorganization. All inquiries relating to the Exchange Offers or the Plan of Reorganization should be directed to the Information Agent at the telephone numbers and address set forth below or on the back cover of this Offering Circular and Disclosure Statement.

The Information Agent for the Exchange Offers and the Voting Agent for the solicitation of

All completed Ballots should be sent to the Voting Agent at the address set forth above or on the back cover of this Offering Circular and Disclosure Statement.

We have appointed Deutsche Bank Trust Company Americas as the Exchange Agent for the Exchange Offers (the “Exchange Agent”). All completed Letters of Transmittal and Agent’s Messages should be directed to the Exchange Agent at one of the addresses set forth below or on the back cover of this Offering Circular and Disclosure Statement. All questions regarding the procedures for tendering in the Exchange Offers and requests for assistance in tendering your Exchange Offer Securities should also be directed to the Exchange Agent at one of the telephone numbers and addresses set forth below or on the back cover of this Offering Circular and Disclosure Statement.

Delivery To: Deutsche Bank Trust Company Americas, Exchange Agent for the Exchange Offers

Delivery of a Letter of Transmittal or Agent’s Message to an address other than the address listed above or on the back cover of this Offering Circular and Disclosure Statement or transmission of instructions by facsimile other than as set forth above is not valid delivery of the Letter of Transmittal or Agent’s Message.

Requests for additional copies of this Offering Circular and Disclosure Statement, any of the documents incorporated by reference herein, the enclosed Letter of Transmittal or the enclosed Notice of Guaranteed Delivery may be directed either to the Exchange Agent or the Information Agent at the respective telephone numbers and addresses listed above or on the back cover of this Offering Circular and Disclosure Statement.

Certain information that we have filed with the SEC is “incorporated by reference” herein, which means that we are disclosing important information to you by referring you to the documents in which the information appears. The information incorporated by reference is an important part of this Offering Circular and Disclosure Statement, and information that we may file later with the SEC will automatically update and supersede the information in this Offering Circular and Disclosure Statement.

The following documents previously filed with the SEC are incorporated in this Offering Circular and Disclosure Statement by reference:


	1. Mirant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 (our “2002 Annual Report on Form 10-K”);

	2. Mirant’s Proxy Statement on Schedule 14A relating to the 2002 Annual Meeting of Stockholders of Mirant (our “2002 Annual Meeting Proxy Statement”); and

	3. Mirant’s Current Reports on Form 8-K dated February 12, 2003 and June 2, 2003.

We are providing herewith copies of our 2002 Annual Report on Form 10-K and our 2002 Annual Meeting Proxy Statement.

In addition to the foregoing, all reports and other documents filed by Mirant pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Offering Circular and Disclosure Statement and prior to the Expiration Date shall be deemed to be incorporated herein by reference and to be a part hereof from the dates of filing of such reports and documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Offering Circular and Disclosure Statement to the extent that a statement contained herein, or in any other subsequently filed document which also is incorporated or deemed to be incorporated by reference herein, modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Offering Circular and Disclosure Statement.

Mirant is a holding company with approximately $8.9 billion of consolidated public and private indebtedness as of December 31, 2002. One of its indirect wholly-owned subsidiaries, MAG, currently has outstanding approximately $2.8 billion of public and private indebtedness for borrowed money. Virtually all of Mirant’s tangible assets are owned by direct and indirect subsidiaries of Mirant and MAG.

Mirant and MAG face significant debt maturities over the next three years. Normally, Mirant and MAG would expect to refinance this debt as it matures in the ordinary course in a manner that would not jeopardize their ability to conduct their businesses prudently or put into question their ability to repay all creditors in full and enhance value for stockholders.

For a variety of reasons described in greater detail in this Offering Circular and Disclosure Statement, including reductions in our credit rating, losses associated with our operational restructuring and factors affecting our industry generally, Mirant is not currently able to refinance, on an unsecured basis, the $1.125 billion of unsecured bank debt that matures on July 15, 2003. Mirant’s Board of Directors (the “Board”) believes it would be imprudent and subject the rights of its and MAG’s creditors to unacceptable risks to pledge substantially all of its available collateral to achieve a refinancing solely of its shortest maturing indebtedness. The Board does believe, however, that over a five-year period both the business of Mirant and economic conditions will recover so as to permit Mirant to repay all of its and MAG’s creditors in full. The basis for this belief is summarized in Mirant’s Five-Year Projections, described in this Offering Circular and Disclosure Statement and set forth in Annex C to this Offering Circular and Disclosure Statement (the “Five-Year Projections”).

To achieve the Five-Year Projections, Mirant and MAG are requesting their private and public creditors whose funded indebtedness matures on or before May 1, 2006 to extend their maturity dates to July 15, 2008. Mirant has been negotiating with a consortium of lenders, described in Annex A to this Offering Circular and Disclosure Statement (the “Mirant Bank Lenders”), who, as of December 31, 2002, have committed a total of approximately $2.7 billion to Mirant under various credit facilities (the “Mirant Bank Debt”), and are owed approximately $237 million under the Turbine Facility, as defined herein, (the “Turbine Debt”) and $211 million under the Commodity Prepay Facility (the “Commodity Prepay Debt”) and MAG has been negotiating with a consortium of lenders described in Annex A to this Offering Circular and Disclosure Statement (the “MAG Bank Lenders” and, together with the Mirant Bank Lenders, the “Bank Lenders”) who are owed approximately a total of $300 million by MAG under two credit facilities (the “MAG Bank Debt” and together with the Mirant Bank Debt, the Turbine Debt and the Commodity Prepay Debt, (the “Bank Debt”) to extend the maturities of the Bank Debt on mutually acceptable terms.

The terms Mirant is offering to the Bank Lenders are described in this Offering Circular and Disclosure Statement; however, no agreement has been reached with these lenders. On May 30, 2003, the two agents for the Mirant Bank Debt and the Turbine Facility, Citibank, N.A. and Credit Suisse First Boston (together, the “Mirant Bank Agents”), sent a letter to the Board in which they stated that they “will not support and will recommend to [their] respective syndicates that they not support, any out-of-court restructuring that would provide for the sharing of first liens between bank lenders and bondholders.” While Mirant expects that negotiations will continue, in light of the Mirant Bank Agents’ position, no assurance can be given that any agreement will be reached with the lenders under the Mirant Bank Debt prior to July 15, 2003.

Although Mirant and MAG have been discussing these Exchange Offers and the MAG Exchange Offer with representatives of ad hoc committees of Mirant and MAG bondholders, neither of the ad hoc committees has endorsed or approved their respective exchange offer in any way and the ad hoc committee of MAG bondholders has communicated its view that the Restructuring Transactions improperly favor Mirant creditors to the detriment of the MAG creditors.

It is Mirant’s hope that the terms of the Mirant Secured Credit Facility and the MAG Secured Credit Facility (see “Description of Certain Other Indebtedness — Restructured Credit Facilities” and Annex A to

this Offering Circular and Disclosure Statement), as they may be further modified, will be acceptable to all Bank Lenders, and that the terms proposed in these Exchange Offers, as they may be further modified, will be acceptable to enough holders of Exchange Offer Securities to satisfy the Minimum Tender Condition. Accomplishing the Restructuring Transactions in this manner is referred to as the “Out-of-Court Alternative.” If this does not occur, Mirant may seek to accomplish the Restructuring Transactions by means of the prepackaged Plan of Reorganization pursuant to Chapter 11 of the United States Bankruptcy Code (the “In-Court Alternative”). If the proposed terms of the Restructuring Transactions are acceptable to a sufficient number of Mirant Bank Lenders but not to Noteholders, or alternatively such terms are acceptable to sufficient Noteholders but not Mirant Bank Lenders, Mirant may seek to accomplish the Restructuring Transactions by utilizing the “cramdown” provisions of section 1129(b) of the Bankruptcy Code. Mirant currently anticipates that if it is unable to accomplish the Restructuring Transactions as described above, it will seek to reorganize its capital structure under the protection of Chapter 11 of the Bankruptcy Code.

The following are some of the questions that you may have as a Noteholder and answers to those questions.


	•	exchange each $1,000 principal amount of their outstanding Exchange Offer Securities for $1,000 principal amount of New Secured Notes, as described in this Offering Circular and Disclosure Statement; AND

	•	vote in favor of the Plan of Reorganization that is intended to provide substantially the same consideration to Noteholders as they would otherwise receive in the Exchange Offers.

The Exchange Offers are being made by Mirant. Mirant is an international energy company that produces and sells electricity in the United States, the Philippines and the Caribbean. As of December 31, 2002, Mirant owned or controlled more than 21,800 MW of electric generating capacity around the world and expects to complete construction of approximately 990 MW of generating capacity by December 2003. In North America, Mirant also controlled access to approximately 3.1 billion cubic feet per day of natural gas production, more than 2.1 billion cubic feet per day of natural gas transportation and almost 13.4 billion cubic feet of natural gas storage as of December 31, 2002. In addition, in North America Mirant uses derivative financial instruments primarily to hedge and optimize its assets and it may also take proprietary commodity positions. In the Philippines, most of Mirant’s generation output is sold under long-term contracts. Mirant’s operations in the Caribbean include fully integrated electric utilities, which generate power sold to residential, commercial and industrial customers.

Mirant is a Delaware corporation. Mirant’s principal executive offices are located at 1155 Perimeter Center West, Suite 100, Atlanta, Georgia 30338. Our main phone number is (678) 579-5000. For further information concerning Mirant, please see the section of this Offering Circular and Disclosure Statement captioned “Where You Can Find More Information.”

We are offering to acquire (i) all of our currently outstanding 2.5% Convertible Debentures due 2021 and (ii) all of our currently outstanding 7.4% Senior Notes due 2004, in exchange for New Secured Notes due 2008. The Exchange Offers are subject to our right to extend, terminate or amend either or both Exchange Offers in our sole and absolute discretion. As of the date of this Offering Circular and Disclosure Statement, $750 million aggregate principal amount of Convertible Debentures was outstanding and $200 million aggregate principal amount of Senior Notes was outstanding. Approximately $400 million of the Convertible Debentures are held as the underlying trust assets of the TIERS Fixed Rate Certificates Trust Series 2001-14, described more fully in the section of this Offering Circular and Disclosure Statement captioned “The

What securities is Mirant offering to issue in exchange for the Exchange Offer Securities?

We are offering to issue $1,000 principal amount of New Secured Notes in exchange for each $1,000 principal amount of (i) Convertible Debentures and (ii) Senior Notes that are properly tendered and not withdrawn in the Exchange Offers. If 100% of the outstanding Exchange Offer Securities are exchanged in the Exchange Offers, Mirant will issue $867 million aggregate principal amount of New Secured Notes reflecting its ownership of $83 million of TIERS.

We will issue the New Secured Notes under an indenture (the “New Secured Notes Indenture”) between a trustee to be appointed by Mirant (the “New Secured Notes Trustee”). For more information regarding the New Secured Notes we propose to give you, please see the section of this Offering Circular and Disclosure Statement captioned “Description of New Secured Notes.”

The New Secured Notes will be secured on a first-priority basis by a lien on substantially all of the tangible and intangible assets of the Grantor Subsidiaries, including certain real property and, subject to certain limitations, a pledge of 100% of the equity interests in certain indirect U.S. subsidiaries of Mirant and 65% of the equity interests in certain indirect foreign subsidiaries of Mirant, in each case owned directly by Grantor Subsidiaries. For more information regarding the Collateral (as defined herein), please see the section of this Offering Circular and Disclosure Statement captioned “—Summary of the Restructuring Transactions—Summary Description of Collateral.”

Beginning in 2001, a number of external forces began to affect our financial condition and results of operations, including the global recession, excess generation capacity, mild weather, low commodity prices and low price volatility in North America, the collapse of Enron, which significantly decreased investor confidence in the competitive energy sector, and the sudden and unexpected downgrade of our credit rating on December 19, 2001 by Moody’s, which increased our cost of capital and the amount of collateral required to support our trading business. In response, we have developed a strategic plan that we believe will enable us to manage the current downturn in the wholesale power industry, improve our liquidity position and strengthen our long-term viability. Over the course of the last year, we implemented steps to improve our results of operations and enhance our liquidity, including engaging in sales of non-core assets, reducing planned capital spending, cutting overall operating expenses and reducing physical gas volumes and associated working capital.

At April 25, 2003, we had approximately $1.4 billion of cash and available credit; however, we face approximately $4.5 billion of near-term debt repayment. Based upon our projected cash flow, existing liquidity and scheduled debt maturities, we are unlikely to be able to meet our ongoing debt repayment obligations as currently scheduled without pledging substantially all of our unencumbered assets. To address these timing issues, we are undertaking the Restructuring Transactions, including the Exchange Offers. The Restructuring Transactions are intended to benefit us by allowing for adequate liquidity and extending the maturity of that portion of our debt that would otherwise mature on or prior to May 1, 2006.

What will Noteholders who elect not to tender their Exchange Offer Securities be entitled to upon consummation of the Exchange Offers?

Non-tendering Noteholders will be entitled to regularly scheduled payments of principal and interest on their Exchange Offer Securities, but they will not be entitled to receive any consideration in the form of the

New Secured Notes being delivered to the Noteholders who participate in the Exchange Offers or have the benefit of the Collateral being provided to secure the New Secured Notes. We expect that the trading market for the Exchange Offer Securities will be illiquid (for example, the Convertible Debentures are currently held of record by fewer than 60 holders) and unless the Minimum Tender Condition is waived, at least 85% of the aggregate principal amount of the Exchange Offer Securities will have been exchanged in order for the Exchange Offers to have occurred. In addition, if the Minimum Tender Condition is not satisfied or waived by the Expiration Date, and our Board determines to consummate the Restructuring Transactions through the In-Court Alternative, we will seek to confirm the Plan of Reorganization. Confirmation of the Plan of Reorganization, in its current form, will bind all holders of Exchange Offer Securities to their treatment thereunder, including the cancellation of the Exchange Offer Securities and receipt of their pro rata share of the New Secured Notes. For more information regarding these alternatives, please see the section of this Offering Circular and Disclosure Statement captioned “What Are the Differences Between the Exchange Offers and the Plan of Reorganization?”

Our Board recommends that Noteholders accept the Exchange Offers and vote in favor of the Plan of Reorganization. In making this recommendation, the Board carefully considered, among other things, the alternatives available to refinance our short-term indebtedness, the risks that various alternatives would pose to our ability to repay our creditors in full and the disruption to our business and related loss of value that could result from a bankruptcy filing other than the pre-packaged Plan of Reorganization. After reviewing and testing the Five-Year Projections prepared by our management, the Board concluded that the Five-Year Projections were both reasonable and achievable and that, therefore, the Restructuring Transactions, including the Exchange Offers, represented the best alternative available to satisfy all of Mirant’s and its subsidiaries’ obligations in full. For more information regarding our Board’s recommendation of the Exchange Offers, please see the section of this Offering Circular and Disclosure Statement captioned “The Exchange Offers — Recommendation of the Board of Directors.”

What risks should I consider in deciding whether or not to tender my Exchange Offer Securities?

In deciding whether to exchange your Exchange Offer Securities for New Secured Notes, you should consider carefully the discussion of risks and uncertainties affecting our business described in the section of this Offering Circular and Disclosure Statement captioned “Risk Factors” and the section of our 2002 Annual Report on Form 10-K captioned “Factors That Could Affect Future Performance,” which is incorporated herein by reference. A copy of our 2002 Annual Report on Form 10-K is enclosed with this Offering Circular and Disclosure Statement.

Yes. By tendering your Exchange Offer Securities in the Exchange Offers, you will be deemed to have released and waived any and all claims you, your successors and your assigns have or may have had against:


	•	Mirant, its subsidiaries, its affiliates and its stockholders, and

	•	the directors, officers, employees, attorneys, accountants, advisors, agents and representatives, in each case whether current or former, of Mirant, its subsidiaries, its affiliates and its stockholders, arising from, related to, or in connection with, your acquisition or ownership of the Exchange Offer Securities, whether those claims arise under federal or state securities laws or otherwise. For more information regarding the release of these legal claims, please see the section of this Offering Circular and Disclosure Statement captioned “The Exchange Offers — Release of Legal Claims by Tendering Holders of Exchange Offer Securities.”

The Exchange Offers are being extended to you in reliance on the exemption from registration provided by section 3(a)(9) of the Securities Act. As a result, the New Secured Notes we issue to you in exchange for

The New Secured Notes are not listed for trading on any national securities exchange or authorized to be quoted in any inter-dealer quotation system of any national securities association and we do not intend to apply for either listing or quotation. For more information regarding the trading markets for the New Secured Notes we propose to give you, please see the section of this Offering Circular and Disclosure Statement captioned “Risk Factors — Risks to Holders of the New Secured Notes — You may not be able to sell the New Secured Notes when you want and, if you do, you may not be able to receive the price you want.”

What will be the U.S. Federal Income Tax consequences to me of the Exchange Offers?

Certain United States federal income tax consequences to you of the Exchange Offers are described in this Summary Overview and Q&A under the caption “Certain U.S. Federal Income Tax Considerations” and in the section of this Offering Circular and Disclosure Statement captioned “Certain United States Federal Income Tax Consequences.”

Exchanging holders are strongly urged to consult their own tax advisor regarding the United States federal, state, local and any foreign tax consequences of the exchange.

The Exchange Offers are subject to customary conditions, which we may assert or waive. The Exchange Offers are conditioned upon the exchange of at least 85% of the outstanding aggregate principal amount of the Exchange Offer Securities. The Exchange Offers are also subject to our concurrent entry into the Mirant Secured Credit Facilities, which will refinance our existing credit facilities and the entry by MAG into the MAG Secured Credit Facility which will refinance MAG’s existing credit facilities. If any of these conditions is not satisfied, we will not be obligated to accept any properly tendered Exchange Offer Securities for exchange. In addition, we may decide to terminate the Exchange Offers for any reason or no reason and not accept for exchange any tendered Exchange Offer Securities. For more information regarding the conditions to the Exchange Offers, please see the section of this Offering Circular and Disclosure Statement captioned “The Exchange Offers — Conditions to the Completion of the Exchange Offers.” Approximately $400 million of the Convertible Debentures are subject to a trust which has issued certificates of beneficial interest. See “— Summary of the Restructuring Transactions — TIERS Trust Structure Summary.” We currently own approximately $83 million of such certificates (the “Owned TIERS”). We will credit the Owned TIERS, as well as any additional certificates we may acquire, toward the Minimum Tender Condition.

You will have until 12:00 midnight, New York City time, on June 27, 2003 to decide whether to tender your Exchange Offer Securities in the Exchange Offers. If you cannot deliver the certificates for the Exchange Offer Securities and other documents required to make a valid tender by that time, you may be able to use a guaranteed delivery procedure, which is described later in this Offering Circular and Disclosure Statement. For more information regarding the time period for tendering your Exchange Offer Securities, please see the section of this Offering Circular and Disclosure Statement captioned “The Exchange Offers — Procedures for Tendering Exchange Offer Securities in the Exchange Offers.”

Can the Exchange Offers be extended or amended and under what circumstances?

We can elect to extend either or both of the Exchange Offers in our sole and absolute discretion, and we expressly reserve the right to do so. We may extend the Convertible Debentures Exchange Offer without extending the Senior Notes Exchange Offer, and vice versa. During any extension of the Exchange Offers, all Exchange Offer Securities previously tendered and not withdrawn will remain subject to the Exchange Offers and we may accept them for exchange. In addition, we expressly reserve the right to amend either or both Exchange Offers, and not accept any Exchange Offer Securities, for any of the reasons described in the section of this Offering Circular and Disclosure Statement captioned “The Exchange Offers — Conditions to the Completion of the Exchange Offers” or for any or no reason within our sole and absolute discretion. For more information regarding our right to extend the Exchange Offers, please see the section of this Offering Circular and Disclosure Statement captioned “The Exchange Offers — Expiration Date; Extensions; Amendments.”

If we extend either or both Exchange Offers, we will issue a press release or another form of public announcement no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration of the Exchange Offers.

How do I tender my Exchange Offer Securities and vote on the Plan of Reorganization?

To tender your Exchange Offer Securities, you must deliver the certificates representing your Exchange Offer Securities, together with a completed Letter of Transmittal and any other documents required by the Letter of Transmittal, to the Exchange Agent, not later than the time the Exchange Offers expire. If your Exchange Offer Securities are held in street name — that is, through a broker, dealer or other nominee — the Exchange Offer Securities can be tendered by your nominee through The Depository Trust Company (“DTC”). If you cannot provide the Exchange Agent with all required documents prior to the expiration of the Exchange Offers, you may obtain additional time to do so by submitting a Notice of Guaranteed Delivery to the Exchange Agent, which must be certified by a broker, bank or other fiduciary that is a member of the Securities Transfer Agent Medallion Program or another eligible institution guarantee. You must also guarantee that these items will be received by the Exchange Agent within three New York Stock Exchange trading days. For your tender to be valid, however, the Exchange Agent must receive the missing items within that three trading-day period. For more information regarding the procedures for tendering your Exchange Offer Securities, please see the section of this Offering Circular and Disclosure Statement captioned “The Exchange Offers — Procedures for Tendering Exchange Offer Securities in the Exchange Offers.”

In addition, you should vote on the Plan of Reorganization by submitting the enclosed ballot (the “Ballot”) to the Voting Agent in accordance with the delivery instructions set forth on the back page of this Offering Circular and Disclosure Statement and the voting instructions included in the Ballot.

You can withdraw previously tendered Exchange Offer Securities at any time until the Exchange Offers have expired and, if we have not agreed to accept your Exchange Offer Securities for exchange by the Expiration Date, you can withdraw them at any time after that date until we do accept your Exchange Offer Securities for exchange.

How do I withdraw previously tendered Exchange Offer Securities or change my vote on the Plan of Reorganization?

To withdraw previously tendered Exchange Offer Securities, you must deliver a written notice of withdrawal, or a facsimile of one, to the Exchange Agent, with all information required by the notice of withdrawal completed, while you still have the right to withdraw the Exchange Offer Securities. For more information regarding the procedures for withdrawing tendered Exchange Offer Securities, please see the section of this Offering Circular and Disclosure Statement captioned “The Exchange Offers — Withdrawal of Tenders.” To change your vote on the Plan of Reorganization, you must request another Ballot from the

Voting Agent and deliver a new superceding Ballot to the Voting Agent according to the procedures set forth on the back cover of this Offering Circular and Disclosure Statement. To revoke your vote on the Plan of Reorganization, you must submit a written request for withdrawal to the Voting Agent at the address on the back cover of this Offering Circular and Disclosure Statement before the voting deadline set forth herein.

When will I receive the New Secured Notes in exchange for my Exchange Offer Securities?

Subject to the satisfaction or waiver of all conditions to the Exchange Offers, and assuming we have not previously elected to terminate the Exchange Offers for any reason or no reason, in our sole and absolute discretion, we will accept for exchange all Exchange Offer Securities that are properly tendered and not withdrawn prior to the Expiration Date. Promptly following this date, New Secured Notes will be delivered in exchange for all Exchange Offer Securities that are properly tendered and not withdrawn. For more information regarding our obligation to issue New Secured Notes in exchange for tendered Exchange Offer Securities, please see the section of this Offering Circular and Disclosure Statement captioned “The Exchange Offers — Acceptance of Exchange Offer Securities for Exchange; Delivery of New Secured Notes.”

If we decide for any reason not to accept any Exchange Offer Securities for exchange, we will return the Exchange Offer Securities to the registered holder thereof at our expense promptly after the expiration or termination of the Exchange Offers. In the case of Exchange Offer Securities tendered by book-entry transfer into the Exchange Agent’s account at DTC, as described above, DTC will credit any withdrawn or unaccepted Exchange Offer Securities to the tendering holder’s account at DTC. For more information regarding the withdrawal of tendered Exchange Offer Securities, please see the sections of this Offering Circular and Disclosure Statement captioned “The Exchange Offers — Procedures for Tendering Exchange Offer Securities in the Exchange Offer” and “The Exchange Offers — Withdrawal of Tenders.”

Why is Mirant asking Noteholders to vote in favor of the Plan of Reorganization in addition to tendering their outstanding Exchange Offer Securities in the Exchange Offers?

We have prepared the Plan of Reorganization as an alternate means to restructure our outstanding debt on terms that would result in substantially the same consideration to Noteholders as in the Exchange Offers. If the Minimum Tender Condition has not been satisfied or waived by the Expiration Date, we are not able to negotiate the Mirant Secured Credit Facility or we conclude that it would be more advantageous or expeditious to us, we may file a “prepackaged” bankruptcy case under Chapter 11 of the Bankruptcy Code. No decision has been made at this time to commence a bankruptcy case, however, and we reserve our right to pursue this and other strategic alternatives in the event the Exchange Offers are not consummated.

What are the differences between the Exchange Offers and the Plan of Reorganization?

Noteholders will receive substantially the same consideration through the Plan of Reorganization as they would receive under the Exchange Offers. If the Exchange Offers are consummated, all holders of Exchange Offer Securities who do not tender their securities will retain their Exchange Offer Securities and will be entitled to all interest and principal payments thereunder pursuant to their terms. If the Minimum Tender Condition is not satisfied by the Expiration Date or otherwise waived by Mirant, and the Board decides to commence a Chapter 11 case, Mirant will seek confirmation of the Plan of Reorganization. If the Plan of Reorganization is confirmed, all holders of claims in a class will receive the same treatment and will be bound by the terms of the Plan of Reorganization. A class is deemed to accept their treatment under a plan if 66 2/3% in principal amount and more than 50% in number of such claims vote to accept the plan. Because votes in favor of the Plan of Reorganization were solicited prior to the filing of the bankruptcy case and none of Mirant’s creditors other than Noteholders and Mirant Bank Lenders are impaired or adversely affected by the Plan of Reorganization, if accepted by both classes of impaired creditors, a prepackaged bankruptcy case can be concluded very quickly — typically within sixty days. In the event that one impaired class has voted to accept the Plan of Reorganization but one or more classes have rejected the Plan of Reorganization, Mirant intends to seek confirmation under the “cramdown” provisions of section 1129(b) of the Bankruptcy Code.

If Mirant files for protection under Chapter 11 of the Bankruptcy Code, how will that affect its business?

We are comprised of a large group of affiliated companies. If we commence a pre-packaged Chapter 11 case, we expect that several of our subsidiaries, not including MAG, would file petitions for relief under the Bankruptcy Code. Because our business is conducted primarily through our operating subsidiaries, the entities that would file Chapter 11 cases do not have any material ongoing business other than our commodity trading operations. Although our business operations should generally not be affected by a bankruptcy filing by Mirant or certain subsidiaries, there is a risk that the Chapter 11 filing could have a material adverse effect on our commodity trading operations, which are important both to our revenues and our overall operations. In turn, we may record material non-cash goodwill and other asset impairment charges relating to our North American business. Additionally, a bankruptcy filing could have other effects on our business, for example, our trading counterparties may cancel certain existing in-the-money contracts and hamper our ability to collect receivables as well as refuse to engage in future trading with us. For more information regarding this, please see “Risk Factors — Risks Related to our Business — The commencement of a Chapter 11 case of Mirant and/or Mirant Americas Energy Marketing, L.P. (“MAEM”) for the purpose of implementing a prepackaged plan of reorganization may result in a number of adverse consequences.” It would be our intention to seek bankruptcy court approval to continue to operate the business of all of our operating subsidiaries in the ordinary course of business, including paying employees, trade creditors and certain other creditors according to normal terms. In addition, it would be our intention to seek bankruptcy court approval, to the extent required, to continue our cash management system to be able to continue to move money between the filed and non-filed entities so that the businesses are not affected by the bankruptcy filing of the parent company.

The Plan of Reorganization requires separate approval by each of the following classes:


	•	the holders of the institutional claims, which consist of the Mirant Bank Lenders, as a single class; and

	•	the Noteholders as a single class.

The Plan of Reorganization must be approved by holders of at least 66 2/3% in principal amount and more than 50% in number of each class of persons who vote on the Plan of Reorganization, voting together as a single class. Only votes that are actually cast are counted in determining whether these thresholds are met.

If not every impaired class has voted to accept the Plan of Reorganization but one class has accepted, we would seek confirmation under the “cramdown” provisions of section 1129(b) of the Bankruptcy Code.

Whom can I talk to if I have questions about the Exchange Offers or voting on the Plan of Reorganization?

If you have questions regarding the information in this Offering Circular and Disclosure Statement, the Exchange Offers generally, or voting on the Plan of Reorganization, please contact the Information Agent. If you have questions regarding the procedures for tendering in the Exchange Offers or require assistance in tendering your Exchange Offer Securities, please contact the Exchange Agent. If you would like additional copies of this Offering Circular and Disclosure Statement, our 2002 Annual Report on Form 10-K or our 2002 Annual Meeting Proxy Statement, copies of which are enclosed with this Offering Circular and Disclosure Statement, please contact either the Information Agent or the Exchange Agent.

If you would like more general information about Mirant, please visit our website at http://www.mirant.com. The information on our web site is not a part of this Offering Circular and Disclosure Statement. In addition, please see the section of this Offering Circular and Disclosure Statement captioned “Where You Can Find More Information.”

The following summary highlights selected information from this Offering Circular and Disclosure Statement and may not contain all the information that you will need to make a decision regarding whether or not to tender your Exchange Offer Securities in the Exchange Offers and accept the New Secured Notes that we propose to give you. This Offering Circular and Disclosure Statement includes specific terms of the Exchange Offers, including descriptions of the New Secured Notes, as well as information regarding our business and some financial data. We encourage you to read this Offering Circular and Disclosure Statement and the documents to which we refer you carefully, including the discussion of risks and uncertainties affecting our business included in the section of this Offering Circular and Disclosure Statement captioned “Risk Factors.”

The proposed Restructuring Transactions include: (i) these Exchange Offers and (ii) the entry into the Mirant Secured Credit Facility, which may be consummated via the Out-of-Court Alternative or through the Plan of Reorganization. In addition, MAG has commenced an offer to holders of MAG’s 7.625% Senior Notes due 2006 simultaneously herewith (the “MAG Exchange Offer”) and MAG contemplates concurrently entering into the MAG Secured Credit Facility.

In the Exchange Offers, we are offering to exchange $1,000 principal amount of our New Secured Notes for each $1,000 principal amount of our Exchange Offer Securities. The New Secured Notes will be secured by first priority liens on the Collateral (as defined below). The first priority liens will be shared equally and ratably with the holders of the New MAG Notes, our lenders under the Mirant Secured Credit Facility, lenders under the MAG Secured Credit Facility and holders of certain future indebtedness that Mirant or MAG may enter into from time to time. The Exchange Offers are subject to our concurrent consummation of the other Restructuring Transactions, the entry by MAG into the MAG Secured Credit Facility and our right to extend, terminate or amend the Exchange Offers in our sole and absolute discretion. As of the date of this Offering Circular and Disclosure Statement, $750 million aggregate principal amount of Convertible Debentures was outstanding and $200 million aggregate principal amount of Senior Notes was outstanding. For more information regarding the terms of the Exchange Offers, please see the section of this Offering Circular and Disclosure Statement captioned “The Exchange Offers.”

The Exchange Offers are being made concurrently with an exchange offer by our indirect, wholly-owned subsidiary, MAG, in which MAG is offering to acquire all of its currently outstanding 7.625% Senior Notes due 2006 (the “Existing MAG Notes”) in exchange for its new 7.5% Senior Secured Notes due 2008 (the “New MAG Notes”). The New MAG Notes will also be secured by first priority liens on the Collateral. The MAG Exchange Offer is subject to our consummation of the other Restructuring Transactions, the entry by MAG into the MAG Secured Credit Facility and MAG’s right to extend, terminate or amend the MAG

These Exchange Offers are also subject to our concurrent entry into a new senior secured revolving and term loan credit facility (the “Mirant Secured Credit Facility”) and MAG’s concurrent entry into a new senior secured term loan credit facility (the “MAG Secured Credit Facility”) with all or substantially all of the Bank Lenders, which will refinance Mirant and MAG’s existing credit facilities, the Turbine Facility and the Commodity Prepay Facility. The Mirant Secured Credit Facility and the MAG Secured Credit Facility are referred to collectively as the “Restructured Credit Facilities.” The lenders under the Restructured Credit Facilities, together with the Trustee, the MAG Note Trustee and holders of certain future indebtedness that Mirant or MAG may enter into from time to time will be secured by first priority liens on the Collateral. Proceeds from any disposition of the Collateral following an exercise of remedies will be paid first to the lenders under the MAG Secured Credit Facility and second shared equally and ratably by the other Secured Parties (as defined below). Although Mirant and MAG are currently negotiating with the Bank Lenders with respect to the terms of the Restructured Credit Facilities, neither Mirant nor MAG has obtained commitments from the Bank Lenders to provide the Restructured Credit Facilities and, in light of the Mirant Bank Agents’ position that they will not support a restructuring which would provide for the sharing of first liens between Bank Lenders, on one hand, and the holders of the New Secured Notes and the New MAG Notes, on the other, no assurance can be given that either Mirant or MAG will be able to obtain the Restructured Credit Facilities on terms described herein or on other terms acceptable to Mirant or MAG. The availability of the Restructured Credit Facilities is subject to negotiation and execution of definitive loan documentation and satisfaction of the conditions specified therein. For a more complete description of the proposed Restructured Credit Facilities, see the section in this Offering Circular and Disclosure Statement captioned “Description of Certain Other Indebtedness — Restructured Credit Facilities.”

Approximately $400 million aggregate principal amount of our Convertible Debentures are held as the underlying trust assets of the TIERS Fixed Rate Certificates Trust Series 2001-14 (the “TIERS Trust”). On June 18, 2001, Structured Products Corp., as depositor under the agreement forming the TIERS Trust, issued TIERS which represent beneficial interests in the underlying trust assets.

The Convertible Debentures Exchange Offer is not being made directly to TIERS holders because, since the TIERS are not securities of Mirant, the exemption from registration provided by section 3(a)(9) of the Securities Act is not available. Without the consent of 100% of the TIERS holders, the Operative TIERS Documents (as defined herein) do not permit the TIERS Trustee (as defined herein) to accept any securities offered in exchange for the Convertible Debentures held as underlying trust assets or to vote the Convertible Debentures on any plan of reorganization.

Mirant has proposed to the Trustee, Structured Products Corp. and Citibank that amendments be made to the Series Supplement and the Call Right Agreement (each as defined herein) to permit any TIERS holder who wishes to do so to exchange his or her TIERS for his or her pro rata share of the Convertible Debentures constituting trust assets, plus the amount of the “make-whole” payment as of the date of the exchange. Holders of TIERS may wish to contact the Trustee, Structured Products Corp. or Citibank directly for more information regarding the proposed amendments, whether they plan to adopt such amendments, and how failure to do so will affect you as a TIERS holder. For more information regarding the TIERS, please see the section of this Offering Circular and Disclosure Statement captioned “The Restructuring Transactions — TIERS Trust Structure.”

The Collateral will consist of the following (the “Collateral”) (i) all equity interests and indebtedness owned directly by any of the Grantor Subsidiaries (which pledge, in the case of voting equity interests issued

by any first tier foreign subsidiary, will be limited to 65% of such voting equity interests) and (ii) substantially all other tangible and certain intangible assets of such Grantor Subsidiaries, including, without limitation, all real property rights (including leaseholds), accounts receivable, inventory, contract rights, equipment, intellectual property, general intangibles, investment property, cash and bank accounts and all proceeds and products of the foregoing unless, in case of any Grantor Subsidiary, the creation or enforcement of such lien would (x) violate or cause a default under any applicable law or any contractual restriction or (y) require the consent of any third party. In addition, neither account control agreements nor foreign intellectual property filings will be required. Each Grantor Subsidiary will use commercially reasonable efforts to pledge 65% of voting equity interests issued by any first tier foreign subsidiary of such Grantor Subsidiary prior to the Closing Date (as defined in Annex A). For more information regarding the Collateral, please see the section of this Offering Circular and Disclosure Statement captioned “Description of the Collateral and Intercreditor Arrangements — Collateral.”

The New Secured Notes differ from the Exchange Offer Securities in the following material ways:


	•	the New Secured Notes will mature on July 15, 2008, compared to 2004 for the Senior Notes and 2021 for the Convertible Debentures, the latter of which have an initial put right on June 15, 2004;

	•	interest on the New Secured Notes will accrue at the annual rate of 7.5% and will be payable semiannually on June 15 and December 15 of each year, beginning December 15, 2003;

	•	our obligations under the New Secured Notes will be secured by first priority liens on the Collateral, which will be shared equally and ratably with our lenders under the Mirant Secured Credit Facility, lenders under the MAG Secured Credit Facility the holders of the New MAG Notes and holders of certain indebtedness that Mirant or MAG may enter into from time to time;

	•	the indenture governing the New Secured Notes contains certain covenants relating to the Collateral and the security agreements that the Senior Notes and the Convertible Debentures do not contain;

	•	unlike the Convertible Debentures, the New Secured Notes will not be convertible; and

	•	unlike the Convertible Debentures, holders of New Secured Notes will not have the right to put the New Secured Notes to the Company on specified dates or at all.


		Exchange Offers have been fulfilled. If we decide for any reason not to accept Exchange Offer Securities you have tendered for exchange, those Exchange Offer Securities will be returned to you without cost promptly after the expiration or termination of the Exchange Offers. In the case of Exchange Offer Securities tendered by book entry transfer into the Exchange Agent’s account at DTC, as described below, any unaccepted Exchange Offer Securities will be credited to the tendering holder’s account at DTC. See “The Exchange Offers — Procedures for Tendering Exchange Offer Securities in the Exchange Offers” for a more complete description of the tender procedures.

Withdrawal Rights and Revocation		Noteholders may withdraw tenders at any time until the Expiration Date.

		As provided for herein, votes with respect to the Plan of Reorganization may be changed only by a properly completed and timely submitted Ballot that supercedes a prior properly completed and timely submitted Ballot. For additional information, see “The Exchange Offers — Withdrawal of Tenders.”

Conditions to the Exchange Offers		The Exchange Offers are subject to customary conditions, which we may assert or waive. These conditions include requirements that at least 85% of the outstanding aggregate principal amount of Exchange Offer Securities are validly tendered, accepted and not withdrawn. We currently own approximately $83 million of Owned TIERS. We will credit the Owned TIERS, as well as any additional certificates we may acquire, toward the Minimum Tender Condition. The Exchange Offers are also subject to our concurrent entry into the Mirant Secured Credit Facility, which will refinance our existing credit facilities and MAG’s entry into the MAG Secured Credit Facility, which will refinance MAG’s existing credit facilities. See the discussion below under the heading “The Exchange Offers — Conditions to the Completion of the Exchange Offers.”

Special Procedures for Beneficial Owners		If you are a beneficial owner whose Exchange Offer Securities are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your Exchange Offer Securities in the Exchange Offers, you should promptly contact the person in whose name the Exchange Offer Securities are registered and instruct that person to tender on your behalf. If you wish to tender the Exchange Offer Securities on your own behalf, prior to completing and executing the Letter of Transmittal and delivering your Exchange Offer Securities, you must either make appropriate arrangements to register ownership of the Exchange Offer Securities in your name or obtain a properly completed bond power from the person in whose name the Exchange Offer Securities are registered.

Consequences to Holders Not Tendering in the Exchange Offers		In the event that the Exchange Offers are completed you may be significantly disadvantaged if you have not exchanged your Exchange Offer Securities for New Secured Notes. See the discussion


		under the headings “Risk Factors — Consequences of Failure to Exchange” for more information regarding the consequences of not exchanging your Exchange Offer Securities.

		The tax consequences to you of the Exchange Offers will depend on your individual situation. You should consult your tax advisor for a full understanding of these tax consequences.

Exchange Agent; Information Agent		Deutsche Bank Trust Company Americas is the Exchange Agent for the Exchange Offers. Innisfree M&A Incorporated is the Information Agent for the Exchange Offers. You can find the respective addresses and telephone numbers of the Exchange Agent and the Information Agent set forth on the back cover of this Offering Circular and Disclosure Statement.

Fees and Expenses		We will bear all expenses related to the Exchange Offers and the Restructuring Transactions. As a result, you are not required to pay any brokerage commissions or any other fees or expenses to the Exchange Agent or the Information Agent.

Certain Consequences of Failure to Consummate the Exchange Offers		If the Minimum Tender Condition is not satisfied or waived by the Expiration Date, we and certain of our subsidiaries may implement the In-Court Alternative and commence Chapter 11 reorganization cases. Although in the event of a Chapter 11 filing we and certain of our subsidiaries would seek to pay vendors in the ordinary course, a bankruptcy case could threaten the trade vendor credit support to us and/or our subsidiaries and could cause us and/or our subsidiaries to lose customers or revenue because of concerns about our operations. No decision has been made by the boards of directors of us or any of our subsidiaries to file petitions for relief under Chapter 11 of the Bankruptcy Code.

Termination		We reserve the right to terminate the Exchange Offers at any time and for any reason, or no reason, without accepting any Exchange Offer Securities.

Additional Information		You may obtain additional copies of the Offering Circular and Disclosure Statement by contacting the Information Agent at the phone number and address set forth on the back cover of this Offering Circular and Disclosure Statement.

If we consummate the Exchange Offers, and successfully negotiate the Restructured Credit Facilities, we intend to implement the Restructuring Transactions via the Out-of-Court Alternative. If the Minimum Tender Condition is not satisfied or waived by the Expiration Date, we are not able to negotiate acceptable Restructured Credit Facilities or if we for any reason determine that it would be more advantageous or expeditious, however, we will consider effectuating the Restructuring Transactions by filing one or more voluntary petitions for relief under Chapter 11 of the Bankruptcy Code and seeking Bankruptcy Court approval of the Restructuring Transactions through confirmation of the Plan of Reorganization.

To facilitate court approval of the In-Court Alternative, we are soliciting acceptances of the Plan of Reorganization, a copy of which is attached hereto as Appendix I. In the event a Chapter 11 case is commenced and we determine that it is appropriate, we would use the acceptances of the Plan of Reorganization secured through the solicitation of acceptances to obtain Bankruptcy Court approval of the Plan of Reorganization and effectuate the Restructuring Transactions. The Plan of Reorganization, if approved, would result in Noteholders receiving substantially the same consideration as they would receive through the Out-of-Court Alternative.

WE HAVE NOT MADE ANY DECISION AT THIS TIME TO COMMENCE ANY CHAPTER 11 CASE, AND RESERVE ALL OF OUR RIGHTS TO PURSUE ANY AND ALL OF OUR STRATEGIC ALTERNATIVES IN THE EVENT THE OUT-OF-COURT ALTERNATIVE IS NOT CONSUMMATED.


		zation of the principal impaired claims against us (each as defined and described in the Plan of Reorganization).

Mirant Class 3 (Mirant Bank Claims) Estimated Amount: Undetermined, but not less than $1,500,000,000		Impaired — Mirant Class 3 would be impaired by the Plan of Reorganization. Each holder of an Allowed Class 3 Mirant Bank Claim would be entitled to vote on the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, in complete satisfaction of the Allowed Mirant Bank Claims, each holder of an Allowed Mirant Bank Claim would become a New Mirant Lender under the New Mirant Credit Facility with its interest therein being in an amount equal to such holder’s Allowed Mirant Bank Claim, provided that holders of the Allowed Equipment Warehouse Facility Guaranty Claims and the Allowed Commodity Prepay Facility Guaranty Claims would only be lenders under the term facility and provided further that participation in the revolving facility would be limited to the unfunded obligation of each holder of a Mirant Bank Claim (as of the Petition Date) under the CSFB 4-year Revolver.

		Estimated Recovery: 100%

Mirant Class 4 (Mirant Impaired Note Claims) Estimated Amount: $950,000,000		Impaired — Mirant Class 4 would be impaired by the Plan of Reorganization. Each holder of an Allowed Class 4 Mirant Impaired Note Claim would be entitled to vote on the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, in complete satisfaction of the Allowed Mirant Impaired Note Claims, each holder of an Allowed Mirant Impaired Note Claim would receive New Mirant 7.5% Senior Notes in an amount equal to such holder’s Allowed Mirant Impaired Note Claim.

		Estimated Recovery: 100%

MAEM Class 3 (Commodity Prepay Facility Claims) Estimated Amount: $225,000,000		Impaired — MAEM Class 3 would be impaired by the Plan of Reorganization. Each holder of an Allowed MAEM Class 3 Commodity Prepay Facility Claim would be entitled to vote on the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, in complete satisfaction of the Allowed Commodity Prepay Facility Claims, each holder of an Allowed Commodity Prepay Facility Claim would become a New Mirant Lender under the term loan facility of the New Mirant Credit Facility with its interest therein being in an amount equal to such holder’s Allowed Commodity Prepay Facility Claim.

		Estimated recovery: 100%

MADCI Class 3 (Equipment Warehouse Facility Claims): Estimated Amount: $221,000,000		Impaired — MADCI Class 3 would be impaired by the Plan of Reorganization. Each holder of an Allowed MADCI Class 3


		Equipment Warehouse Facility Claim would be entitled to vote on the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, in complete satisfaction of the Allowed Equipment Warehouse Facility Claims, each holder of an Allowed Equipment Warehouse Facility Claim would become a New Mirant Lender under the term loan facility of the New Mirant Credit Facility with its interest therein being in an amount equal to such holder’s Allowed Equipment Warehouse Facility Claim.

		Estimated recovery: 100%

		For a more detailed discussion of treatment under the Plan of Reorganization, see “The Plan of Reorganization — Summary of the Plan of Reorganization — Certain Matters Regarding Classification and Treatment of Claims and Interests.”

Voting on the Plan of Reorganization		The “Voting Record Date” for purposes of determining Noteholders that are eligible to vote on the Plan of Reorganization is May 30, 2003. To be counted, Ballots must be duly completed, executed, and actually received no later than the Expiration Date. Noteholders electing to vote on the Plan of Reorganization should complete and sign the Beneficial Owner Ballot and check the box entitled “Accepts” the Plan of Reorganization or “Rejects” the Plan of Reorganization, as appropriate. In all cases, the duly completed Beneficial Owner Ballot must be mailed or delivered as specified in the Beneficial Owner Ballot.

		Any beneficial holder whose Exchange Offer Securities are registered or held of record in the name of his broker, dealer, commercial bank, trust company or other nominee and who wishes to vote on the Plan of Reorganization should complete a Beneficial Owner Ballot and return such ballot to such nominee or directly to the Voting Agent, as instructed by such nominee. Nominees in turn must use the information contained in such Beneficial Owner Ballots to complete Master Ballots, and must return all such Master Ballots to the Voting Agent.

		Noteholders who purchase Exchange Offer Securities after the Voting Record Date, and who wish to vote on the Plan of Reorganization, must arrange with their seller to receive a Beneficial Owner Ballot from the Noteholder of record.

		The “Voting Deadline” is 12:00 midnight, prevailing Eastern time, on June 27, 2003, unless extended. All Ballots tendered by the Voting Deadline may be utilized by us in connection with determining acceptances and rejections of the Plan of Reorganization at any time. Thus, all votes represented by such Ballots shall be deemed continuously effective until such time.

		Under the Bankruptcy Code, for purposes of determining whether the requisite acceptances of the Plan of Reorganization have been received, only holders who vote will be counted. Noteholders who do not send a duly completed and signed Ballot will not be counted for purposes of determining whether the Plan of Reorganization has been accepted by the requisite number and amount of votes. Any Ballot which is executed by a Noteholder but does not indicate an acceptance or rejection of the Plan of Reorganization


		will not be counted. In addition, any Ballot which is executed by a Noteholder and which indicates both acceptance and rejection of the Plan of Reorganization will not be counted.


		terms of the New Secured Notes, see the discussion under “Description of the New Secured Notes — Covenants.”

Events of Default		The events of default under the New Secured Notes will be substantially similar to the events of default under the Senior Notes. For further information regarding events of default under the New Secured Notes, see the discussion under the caption “Description of the New Secured Notes — Events of Default.”

Listing		The New Secured Notes will not be listed for trading on any national securities exchange or for quotation on any automated quotation system.

Book-Entry; Delivery and Form		The New Secured Notes will initially be held through DTC. For additional information, see the discussion in the section captioned “Description of the New Secured Notes — Book-Entry, Delivery and Form.”

Certain U.S. Federal Income Tax Considerations		An exchanging holder of an Exchange Offer Security should generally recognize gain or loss as a result of the exchange, if either the Exchange Offer Security or the New Secured Note is not treated as a “security” for United States federal income tax purposes. The amount of any such gain or loss should generally equal the difference between the issue price of the New Secured Note and the adjusted tax basis of the Exchange Offer Security. The issue price of the New Secured Notes, for United States federal income tax purposes, should generally equal their face amount, unless either the New Secured Notes or the Exchange Offer Securities are “publicly traded,” in which case the issue price should generally be equal to their fair market value on the date of the exchange. For additional information, see the discussion in the section titled “Certain United States Federal Income Tax Consequences.”

		Exchanging holders are strongly urged to consult their own tax advisor regarding the United States federal, state, local and any foreign tax consequences of the exchange.

The following table presents our summary consolidated financial information. The information set forth below should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical consolidated financial statements and the notes thereto included in our 2002 Annual Report on Form 10-K, which is incorporated by reference herein.


(1)	The $950 million of preferred securities were issued by special purpose financing subsidiaries owned by Capital Funding, our capital funding subsidiary. The proceeds were loaned to Southern (as defined herein) in exchange for subordinated notes from Southern. Southern paid interest on the subordinated notes issued in favor of the financing subsidiaries, which payments were used to pay dividends on the preferred securities. Southern guaranteed payments due under the terms of the preferred securities. In connection with our separation from Southern, Capital Funding was transferred to Southern on March 5, 2001.

(2)	This debt is non-recourse to us but is recourse to the applicable subsidiaries and their assets.

The Restructuring Transactions (whether effectuated under the Out-of-Court Alternative or In-Court Alternative) involve a high degree of risk and uncertainty. You should carefully consider the risks and uncertainties described below as well as the other information appearing elsewhere in this Offering Circular and Disclosure Statement before making a decision whether to participate in the Exchange Offers and/or vote to accept the Plan of Reorganization. The risks and uncertainties described below are intended to highlight risks and uncertainties that are specific to us but are not the only risks and uncertainties that we face. Additional risks and uncertainties, including those generally affecting the industry in which we operate, risks and uncertainties that we currently deem immaterial or risks and uncertainties generally applicable to companies that have recently undertaken transactions such as the Restructuring Transactions may also impair our business, the value of your investment and our ability to pay interest on, and repay or refinance, the New Secured Notes.

The information in this Offering Circular and Disclosure Statement includes forward-looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous factors, including those described in this section and elsewhere in this Offering Circular and Disclosure Statement. See “Forward-Looking Statements” on page ii. For risk factors related solely to the In-Court Alternative, see “Plan of Reorganization — Risk Factors Related to Plan of Reorganization.”

The Exchange Offer Securities effectively will be junior to the New Secured Notes, all other senior secured debt of Mirant, and all other indebtedness and liabilities of our subsidiaries.

The Exchange Offer Securities currently are unsecured obligations of Mirant which are pari passu with approximately $3.6 billion of bank and public indebtedness. If the Restructuring Transactions are consummated, the Exchange Offer Securities not tendered in the Exchange Offers effectively will be junior to the New Secured Notes and all other senior secured debt of Mirant, including all indebtedness under the Mirant Secured Credit Facility, to the extent of the value of the Collateral securing such indebtedness. In addition, the Exchange Offer Securities will continue to be effectively junior to all indebtedness and other liabilities of our subsidiaries. On a pro forma basis, as of December 31, 2002, after giving effect to the Restructuring Transactions (and assuming that 85% of the outstanding aggregate principal amount of the Exchange Offer Securities are validly tendered and accepted in the Exchange Offers), we would have had approximately $2.7 billion of secured indebtedness outstanding that effectively ranked senior to the Exchange Offer Securities and our subsidiaries would have had approximately $5.9 billion of indebtedness and other liabilities that effectively ranked senior to the Exchange Offer Securities. Therefore, by failing to tender your Exchange Offer Securities in the Exchange Offers, even though Mirant expects to repay your indebtedness in full, you may be exposed to a greater risk of nonpayment because your claims will be effectively subordinated to those of the holders of the New Secured Notes, to those of our other secured creditors, and to those of the creditors of our subsidiaries. This increased risk may be reflected in the trading value of your Exchange Offer Securities.

If not enough holders tender their Exchange Offer Securities and, as a result, we do not successfully consummate the Restructuring Transactions, we may not be able to pay the amounts due on our outstanding debts as they mature, and our financial condition would be negatively affected.

Under our current highly-leveraged capital structure, we may not be able to pay the amounts due on certain of our outstanding debts as they mature, including specifically the $1.125 billion of debt due July 15, 2003 to the Bank Lenders and our failure to make such payments would constitute a default under the terms of the applicable agreements and indentures governing our indebtedness. A default under the terms of these agreements and indentures would trigger cross-default provisions in other agreements and accelerate our payment obligations under our outstanding debt. The Restructuring Transactions, among other things, extend the maturity of our debt that is scheduled to mature in the near future. There are certain conditions to the

consummation of the Restructuring Transactions under the Out-of-Court Alternative, including the completion of the Exchange Offers. The completion of the Exchange Offers is subject to certain conditions, any of which we may waive, including the condition that at least 85% of the outstanding aggregate principal amount of the Exchange Offer Securities are validly tendered, accepted and not withdrawn, the other Restructuring Transactions are consummated and the entry by MAG into the MAG Secured Credit Facility. If we do not consummate the Restructuring Transactions, we may be forced to seek protection under Chapter 11 of the Bankruptcy Code. The expenses of any such case would reduce the assets available for payment or distribution to our creditors, including holders of the Exchange Offer Securities. In addition, we believe that the filing by us or against us of a bankruptcy petition would not increase the amount of any payment or distribution that holders of the Exchange Offer Securities would receive, could reduce such amount, and in any event would delay receipt of any payment or distribution by such holders.

A long and protracted restructuring could adversely affect Mirant’s business.

If not enough holders tender their Exchange Offer Securities and, as a result, we do not successfully consummate the Restructuring Transactions, we will be required to pursue other restructuring alternatives, including possibly seeking protection under Chapter 11 of the Bankruptcy Code. Any such alternatives may take substantially longer to consummate than the Restructuring Transactions. A protracted restructuring could disrupt Mirant’s business and could divert the attention of Mirant’s management from operation of its business and implementation of its business plan. The uncertainty surrounding a prolonged restructuring could also have other adverse effects on Mirant. For example, it could adversely affect:


	•	Mirant’s ability to raise additional capital,

	•	Mirant’s ability to capitalize on business opportunities and react to competitive pressures,

	•	Mirant’s ability to attract and retain key employees,

	•	Mirant’s liquidity,

	•	Mirant’s relationships with its key suppliers,

	•	Mirant’s ability to enter into long-term contracts with its customers,

	•	how Mirant is viewed by regulators, investors, lenders or credit rating agencies,

	•	the amount of collateral required in the transaction of Mirant’s business, and

	•	Mirant’s enterprise value.

If Mirant determines that it is or will be unable to, or, that it is more advantageous or expeditious not to, complete the Restructuring Transactions, Mirant will consider all financial alternatives available to it at such time, which may include implementing an alternative restructuring arrangement outside of bankruptcy. Any reorganization that may result could be on terms less favorable to the Noteholders than the terms of the Out-of-Court Alternative or the In-Court Alternative. If a protracted and non-orderly reorganization were to occur, there is a risk that the ability of the Noteholders to recover their investments would be substantially delayed and more impaired than under the proposed Restructuring Transactions.

The liquidity of any trading market that currently exists for the Exchange Offer Securities may be adversely affected by the Exchange Offers and holders of Exchange Offer Securities who fail to exchange their Exchange Offer Securities in the Exchange Offers may find it more difficult to sell their Exchange Offer Securities.

There is currently a limited trading market for the Exchange Offer Securities. To the extent that Exchange Offer Securities are tendered and accepted for exchange in the Exchange Offers, the trading market for the remaining Exchange Offer Securities will be even more limited or may cease altogether. Specifically, we expect that the trading market for the Exchange Offer Securities will become illiquid because, for example, the Convertible Debentures are currently held of record by fewer than 60 holders and unless the Minimum Tender Condition is waived, at least 85% of the aggregate principal amount of the Exchange Offer Securities

will have been exchanged in order for the Exchange Offers to have occurred. A debt security with a smaller outstanding aggregate principal amount or “float” may command a lower price than would a comparable debt security with a larger float. Therefore, the market price for the unexchanged Exchange Offer Securities may be adversely affected to the extent that the principal amount of Exchange Offer Securities exchanged in the Exchange Offers reduces the float. The reduced float may also tend to make the trading prices of the Exchange Offer Securities more volatile.

If any of the Exchange Offer Securities remain outstanding after the Exchange Offers, we may not be able to meet our repurchase/ redemption obligations under the Exchange Offer Securities when they accrue, which could trigger defaults under our Mirant Secured Credit Facility that would likely prevent us from making payments on the Exchange Offer Securities.

The terms of the Convertible Debentures require us to purchase, at the option of the holder, any outstanding Convertible Debentures on June 15, 2004, June 15, 2006, June 15, 2011, and June 15, 2016. In addition, if a change in control occurs, as described in the indentures under which the Exchange Offer Securities were issued, you will have the right to require us to redeem your Exchange Offer Securities for cash. We cannot assure you that we will have sufficient funds to redeem the Exchange Offer Securities. The terms of our Mirant Secured Credit Facility will restrict our ability to repurchase or redeem Exchange Offer Securities for cash.

If you require us to repurchase your Convertible Debentures on June 15, 2004, June 15, 2006, June 15, 2011, or June 15, 2016, as described above, we have the option of paying you in shares of our Common Stock. Depending on the number of shares we would have to issue, however, NYSE rules may require us to obtain stockholder approval to do so, and we cannot assure you that our stockholders would give the necessary approval.

Our failure to repurchase or redeem the Exchange Offer Securities when required to do so would result in our defaulting on the Exchange Offer Securities and would likely constitute a default under our Mirant Secured Credit Facility. It may also constitute a default under our other indebtedness outstanding at the time.

As a holding company, we depend on dividends from our subsidiaries and our subsidiaries are subject to restrictions on their ability to pay dividends.

We conduct our operations primarily through our subsidiaries, including MAG and its subsidiary Mirant Mid-Atlantic, LLC (“MIRMA”), and depend primarily on earnings and cash flows of, and dividends, distributions and other transfers from, these and other of our subsidiaries to pay our obligations, including principal and interest on our indebtedness. A significant number of our subsidiaries, including MAG and MIRMA, have substantial indebtedness or lease obligations. These subsidiaries are restricted under the terms of their indebtedness or lease obligations in their ability to pay dividends. These limitations usually require that debt service payments be current, debt service coverage and leverage ratios be met and that there be no default or event of default existing under the respective agreements governing this indebtedness. In addition, certain laws restrict the ability of our subsidiaries to pay us dividends or distributions or make loans and advances to us. In the event that such subsidiaries, including MAG and MIRMA, were unable to make dividends and distributions to Mirant, we would not be able to use the earnings and cash flow of those subsidiaries to make payments on the New Secured Notes.

You may not receive payment in full by foreclosing on the Collateral in the event of a default on the New Secured Notes and your rights with respect to the Collateral are subject to the provisions of the Intercreditor Agreement.

The New Secured Notes will be secured on a first-priority basis by a pledge of the Collateral. Proceeds from any disposition of the Collateral following an exercise of remedies will be paid first to the lenders under the MAG Secured Credit Facility and then shared equally and ratably by the lenders under the Mirant

Secured Credit Facility, the trustee under the New Secured Notes Indenture (for the benefit of the holders of the New Secured Notes), the trustee under the indenture governing the New MAG Notes (for the benefit of the holders of the New MAGI Notes) and holders of certain future indebtedness that Mirant or MAG may enter into from time to time. The ability of the holders of the New Secured Notes to realize upon the Collateral is subject to certain limitations and to practical problems associated with the realization of the collateral agent’s security interests in the Collateral. In addition, the value of the Collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. We cannot assure you that the proceeds from the sale or sales of all of such Collateral would be sufficient to satisfy the amounts due on the New Secured Notes in the event of a default. If such proceeds were not sufficient to repay amounts due on the New Secured Notes, then holders of the New Secured Notes (to the extent not repaid from the proceeds of the sale of the Collateral) would only have an unsecured claim against our remaining assets.

The right of the collateral agent to foreclose upon and sell the Collateral upon the occurrence of a default will also be subject to limitations under applicable bankruptcy laws if a bankruptcy case were commenced against us or our subsidiaries.

The rights of the holders of the New Senior Secured Notes with respect to the Collateral securing the New Senior Secured Notes will also be limited pursuant to the terms of the Intercreditor Agreement. For example, under the terms of the Intercreditor Agreement, the proceeds from any disposition of the Collateral will first be applied to repay outstanding borrowings under the MAG Secured Credit Facility before any amounts will be available to repay any of the New Senior Secured Notes. As a result, the amount of the Collateral securing the New Senior Secured Notes may be reduced without any reduction in the aggregate principal amount of outstanding New Senior Secured Notes.

You may not be able to sell the New Secured Notes when you want and, if you do, you may not be able to receive the price you want.

As the Exchange Offers will be the first issuance of the New Secured Notes, there has previously been no trading market for the New Secured Notes you will receive in the Exchange Offers. The New Secured Notes will not be listed for trading on any national securities exchange or authorized to be quoted in any inter-dealer quotation system of any national securities association and we do not intend to apply for either listing or quotation. We do not know the extent to which investor interest will lead to the development of a trading market for the New Secured Notes or how liquid any such market might be. Moreover, the liquidity of any market for the New Secured Notes will also depend upon the number of holders of the New Secured Notes, our financial performance, the market for similar securities and the interest of securities dealers in making a market in the New Secured Notes. We cannot assure you that an active trading market for the New Secured Notes will develop or, if it does, at what prices the New Secured Notes may trade. Therefore, you may not be able to sell the New Secured Notes when you want and, if you do, you may not be able to receive the price you want.

If you have claims against Mirant resulting from your acquisition or ownership of Exchange Offer Securities, you will give up those claims if you exchange your Exchange Offer Securities.

By tendering your Exchange Offer Securities in the Exchange Offers, you will be deemed to have released and waived any and all claims you, your successors and your assigns have or may have had against


	•	Mirant, its subsidiaries, its affiliates and its stockholders, and

	•	the directors, officers, employees, attorneys, accountants, advisors, agents and representatives, in each case whether current or former, of Mirant, its subsidiaries, its affiliates and its stockholders,

arising from, related to, or in connection with, your acquisition or ownership of the Exchange Offer Securities, whether those claims arise under federal or state securities laws or otherwise. Because it is not possible to estimate the likelihood of your success in pursuing these legal claims or the magnitude of any recovery to which you ultimately might be entitled, it is possible that the consideration you receive in the Exchange Offers

If the Restructuring Transactions are consummated through the Out-of-Court Alternative, the granting of liens to secure the New Secured Notes may allow courts, under specific circumstances, to order the avoidance of the liens securing the New Secured Notes.

The creditors of our Grantor Subsidiaries could challenge the liens securing the New Secured Notes as fraudulent transfers or on other grounds. The grant of the first-priority liens securing the New Secured Notes could be found to be a fraudulent transfer and avoided if a court determined that: the Grantor Subsidiary granted the lien with the intent to hinder, delay or defraud its existing or future creditors or the Grantor Subsidiary did not receive reasonably equivalent value or fair consideration for granting the lien and, at the time of such grant, either (i) the sum of the Grantor Subsidiary’s liabilities exceeded its assets, at a fair valuation, (ii) the present fair saleable value of the Grantor Subsidiary’s assets was less than the amount required to pay its probable liabilities on its existing debts as they became absolute and matured, (iii) the Grantor Subsidiary had unreasonably small capital with which to conduct its business, or (iv) the Grantor Subsidiary intended or believed that it would be unable to pay its debts as they came due. If a court avoids these liens, any claim you may make against us for amounts payable on the New Secured Notes would be unsecured and subordinated to the debt of our subsidiaries.

If the Restructuring Transactions are consummated through the Out-of-Court Alternative, consideration paid to Noteholders in the Exchange Offers could be subject to avoidance as a preferential transfer.

If Mirant were to become a debtor in a case under the Bankruptcy Code within 90 days after the consummation of the Exchange Offers (or, with respect to any insiders specified in the Bankruptcy Code, within one year after consummation of the Exchange Offers) and certain other conditions are met, the consideration paid to Noteholders in the Exchange Offers, absent one of the Bankruptcy Code defenses to avoidance, could be subject to avoidance as a preferential transfer and, to the extent avoided, the value of such consideration could be recovered from such Noteholder and possibly from subsequent transferees.

We have incurred substantial indebtedness on a consolidated basis to finance our business. As of December 31, 2002, our total consolidated indebtedness was $8.9 billion (approximately $4.3 billion of which was recourse to Mirant corporation). We do not expect that over the next five years our cash flows from operations will cover all of our capital expenditures, interest payments and debts as they become due and payable pursuant to their scheduled maturities.

The purpose of the Restructuring Transactions is to enable us to repay in full all of our obligations with interest, including unsecured long-term indebtedness that is not so extended. We expect to accomplish this by refinancing all or a portion of our indebtedness, including debt issued in the Restructuring Transactions, prior to its maturities when our business has recovered and capital markets are made available to us. We note that there can be no assurances either with respect to the accomplishment of the contemplated financial restructuring or with respect to the values that may ultimately be available for creditors and stockholders. In the event that we are unable to successfully restructure our debt we would likely be required to seek bankruptcy court or other protection from our creditors.

Our activities are restricted by substantial indebtedness. This indebtedness may be accelerated if we are unable to service it. Acceleration of some of our debt may cause other lenders to accelerate other debt obligations.


	•	limiting our ability to refinance existing indebtedness as it comes due and to borrow additional amounts for working capital, capital expenditures, debt service requirements, execution of our business plan or other purposes,

	•	limiting our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to service our debt,

	•	increasing our vulnerability to general adverse economic and industry conditions, and

	•	limiting our ability to capitalize on business opportunities and to react to competitive pressures and adverse changes in government regulation.

If we consummate the Restructuring Transactions, we will be able to borrow up to an additional $1.1 billion under the revolving letter of credit and working capital facility portion of the Mirant Secured Credit Facility. If we incur more debt, the risks associated with our current levels of debt would therefore also increase. Borrowings under the Mirant Secured Credit Facility will bear interest at floating rates based on LIBOR. If LIBOR rises, the interest rates on this indebtedness will also rise, which would increase our interest payment obligations under these loans.

The commencement of a Chapter 11 case of Mirant and/or Mirant Americas Energy Marketing, L.P. (“MAEM”) for the purpose of implementing a prepackaged plan of reorganization may result in a number of adverse consequences.

We have pursued an integrated business model whereby MAEM engages in, among other activities, asset management and optimization with respect to the operation of the core generation business. As asset manager, MAEM is responsible for, among other things, procuring and scheduling deliveries of fuel consumed by our domestic power generating assets, bidding and scheduling the plants into local market areas, selling energy, capacity and related products produced by the plants, and hedging gross margin expectations to reduce the risks associated with market volatility. Furthermore, MAEM currently holds many of the regulatory approvals necessary for us to continue operating within the gas and power market environments.

Our business plan contemplates MAEM engaging in asset management activities consistent with prior practice. There can be no assurances that MAEM will be able to engage in asset management activities consistent with prior practice in the Chapter 11 environment.

Historically, MAEM has also engaged in proprietary trading activities for its own account, from which we have derived substantial value.

Our business plan contemplates the continued derivation of substantial revenue from MAEM’s prospective proprietary trading activities as well as the recognition of value from MAEM’s existing trading positions. There can be no assurances that MAEM will be able to engage in prospective trading activity consistent with historical performance or that MAEM will be able to recognize the value of its existing trading positions in the Chapter 11 environment.

MAEM conducts a substantial portion of its business through the use of derivative contracts that may fall within the “safe-harbor” protections set forth in sections 556 and 560 as well as other sections of the Bankruptcy Code. The safe harbor provisions permit non-debtor parties to, among other things, exercise certain contractual rights and remedies notwithstanding the commencement of a Chapter 11 case. Although case law surrounding the scope of the Bankruptcy Code’s safe harbor provisions remains unsettled, we believe that a substantial number of MAEM’s contracts, although not all of MAEM’s contracts, would qualify for safe harbor protection, permitting, upon a Chapter 11 filing of MAEM, MAEM’s counterparties to terminate such contracts and in certain circumstances causing automatic termination of such contracts in accordance with the contractual terms.

In addition, a substantial number of MAEM’s contracts have been guaranteed by us. Accordingly, a Chapter 11 filing of Mirant in the absence of a Chapter 11 filing of MAEM would create defaults in the underlying MAEM obligations. Such defaults may permit counterparties to exercise rights and remedies including the right to terminate the underlying contract. In addition, such defaults may cause direct or indirect defaults of other MAEM contracts not otherwise guaranteed by us, including contracts necessary for MAEM to fulfill its asset management obligations.

Pursuant to the general terms of MAEM’s derivative trading contracts, upon early termination, settlement payments are determined by the non-defaulting counterparty using mark-to-market valuation methodologies. Given the inherent uncertainties in mark-to-market valuation, we may not be able to realize the net current value of any existing derivative trading contracts that have been terminated early as a result of a Chapter 11 filing or other event of default due to a potential increase in mark-to-market liabilities and a potential decrease in mark-to-market assets upon settlement. Although we cannot accurately predict whether a substantial number of counterparties will exercise early termination rights, early termination by a substantial number of counterparties may result in a significant loss of value.

In addition, although the terms of most of MAEM’s derivative contracts do not relieve the non-defaulting party of the obligation to pay settlement amounts owing, many of MAEM’s counterparties owing settlement payments may refuse to make such payments absent litigation, further reducing the value of MAEM’s existing trading positions due to delays in collections and cost of litigation. Furthermore, early termination of contracts will result in an acceleration of settlement payments required to be paid by MAEM, which payments, absent consent of the counterparty or to the extent not fully secured by cash or letters of credit, will need to be satisfied in full upon emergence from Chapter 11. Although we cannot accurately predict the number of counterparties that may exercise early termination rights, in the event that a substantial number of parties exercise early termination rights, we anticipate additional unsecured claims in the form of accelerated termination payments.

A substantial portion of MAEM’s obligations are secured with cash or letters of credit issued by us. Upon a Chapter 11 filing of MAEM or other event of default, including a Chapter 11 filing of Mirant as credit support provider, approximately up to $600 million of letters of credit may be drawn (including $300 million of letters of credit relating to Mirant Canada (as defined herein)), resulting in a concomitant increase in funded debt of Mirant and extinguishment of future letter of credit capacity. Our Five-Year Projections do not contemplate the immediate draw of current outstanding letters of credit and the extinguishment of existing letter of credit capacity. In the event that such letters of credit are drawn, we will be required to include the satisfaction of such incremental liability in our Plan of Reorganization, including increased interest costs, and replace the extinguished letter of credit capacity. There can be no assurances that we will be able to meet such requirements.

We anticipate obtaining a debtor in possession financing facility (the “DIP Facility”) in the event we choose to pursue the Restructuring Transactions through the In-Court Alternative. In the event that existing letters of credit are drawn or otherwise terminate by their terms while we are in Chapter 11, we may need to access borrowing capacity provided by the DIP Facility to meet future letter of credit demands and other working capital needs. There can be no assurances that we will have sufficient excess liquidity within our Plan of Reorganization to satisfy obligations owing under the DIP Facility upon emergence.

Although we intend to continue our asset management, hedging and proprietary trading activities in the normal course through MAEM, there can be no assurances that counterparties will continue to conduct business with MAEM while MAEM is in Chapter 11. In the event that counterparties refuse to conduct business with MAEM while MAEM is in Chapter 11, we anticipate that we can, over-time, re-engage in asset management, hedging and proprietary trading activities consistent with historical performance after emergence from Chapter 11. Although we cannot accurately predict the amount of time that may be necessary to re-engage these activities fully, we anticipate that MAEM may re-engage asset management, hedging and proprietary trading activities consistent with historical performance within six months following the Petition Date (as defined herein). We estimate that failure to engage in asset management and hedging activities will result in a loss of a significant fraction of the MAEM gross margin projections over the six-month period

Given our anticipated credit rating upon emergence from Chapter 11, re-engaging in asset management and proprietary trading activities after emergence from Chapter 11 may require substantial liquidity in the form of cash collateral or letter of credit capacity consistent with our current collateral requirements, which range from $600 million to $1 billion. There can be no assurances that we will have sufficient liquidity after emergence to re-engage in asset management and proprietary trading consistent with historical levels.

Furthermore, we hold cash collateral posted by counter-parties to secure the counter-parties’ net mark-to-market exposure to us. Although we are currently permitted to re-hypothecate such cash collateral, under certain circumstances, counterparties may demand that we segregate cash collateral, terminating our ability to re-hypothecate such cash collateral. We estimate that approximately $60 million of currently re-hypothecated cash collateral is subject to demands of segregation. In the event that a counterparty demands segregation of its cash collateral upon emergence from Chapter 11, our liquidity will be reduced by the amount of cash collateral required to be segregated.

The commencement of a Chapter 11 case of Mirant for the purpose of implementing a prepackaged plan of reorganization may result in a number of adverse consequences affecting our Canadian business.

Our Canadian business is conducted through Mirant Canada Energy Marketing, Ltd. and Mirant Canada Gas Marketing, Ltd. (collectively, “Mirant Canada”). A substantial number of Mirant Canada’s contracts have been guaranteed by Mirant. Accordingly, a Chapter 11 filing of Mirant would create defaults in the underlying obligations. Such defaults may permit counterparties to exercise rights and remedies including the right to terminate the underlying contract. In addition, such defaults may cause direct or indirect defaults of other Mirant Canada contracts not otherwise guaranteed by Mirant.

In addition, Mirant Canada conducts a substantial portion of its business through the use of derivative contracts that may fall within the “eligible financial contracts” definitions set forth in section 11.1 of the Companies’ Creditors Arrangement Act (“CCAA”). The eligible financial contract provisions permit non-debtor parties to, among other things, exercise certain contractual rights and remedies notwithstanding the commencement of a CCAA filing. Although case law surrounding the scope of these provisions remains unsettled, we believe that a number of Mirant Canada’s contracts, although not all of Mirant Canada’s contracts, would constitute eligible financial contracts permitting Mirant Canada’s counterparties to terminate such contracts and in certain circumstances cause automatic termination of such contracts in accordance with the contractual terms, notwithstanding a commencement of a CCAA filing by Mirant Canada.

In addition, Mirant Canada has entered into a number of transactions that will dispose of certain “eligible financial contracts” and other contracts. A substantial number of these contracts are secured with letters of credit issued by Mirant. The largest of these transactions is scheduled to close prior to expiration of the Exchange Offers; however, if there is a delay in closing, there is a risk that a Chapter 11 filing of Mirant will cause the purchaser to refuse to close. Furthermore, in the event of a Chapter 11 filing of Mirant, as credit support provider, prior to the closing of such transaction, approximately up to $300 million of letters of credit may be drawn, resulting in an accompanying increase in funded debt of Mirant and extinguishment of future letter of credit capacity. Mirant’s business plan does not contemplate the immediate draw of current outstanding letters of credit and the extinguishment of existing letter of credit capacity. In the event that such letters of credit are drawn, we will be required to include the satisfaction of such incremental liability in our Plan of Reorganization, including increased interest costs, and the replacement of the extinguished letter of credit capacity. We note that there can be no assurances that we will be able to meet such requirements.

Restrictions and covenants in our debt agreements limit our ability to take certain actions, and our failure to comply with these restrictions and covenants can have adverse consequences on us.

Some of our debt agreements, including the Mirant Secured Credit Facility, and the debt agreements of our subsidiaries, including the MAG Secured Credit Facility, contain or are expected to contain restrictive covenants which, among other things, can limit or prohibit our ability to:


	•	incur additional debt,

	•	prepay, redeem or repurchase indebtedness,

	•	pay dividends or repurchase shares of capital stock,

	•	make loans or investments,

	•	create liens,

	•	sell assets,

	•	acquire facilities or other businesses,

	•	enter into sale and lease back transactions,

	•	enter into mergers and consolidations,

	•	change the nature of our business,

	•	amend organizational documents, debt documents and other material agreements, and

	•	enter into certain speculative transactions relating to our trading business.

In addition, the Mirant Secured Credit Facility will require us to maintain certain financial ratios and meet certain tests, including minimum leverage and interest coverage ratios, and restricts our ability and the ability of our significant subsidiaries to make capital expenditures. These covenants may have important consequences on our operations, including, but not necessarily limited to restricting our ability to obtain additional financing and potentially limiting our ability to adjust to rapidly changing market conditions.

Events beyond our control, such as prevailing economic conditions, changes in commodity prices and changes in the competitive environment, could impair our operating performance, which could affect our ability and that of our subsidiaries to comply with the terms of our debt instruments. We cannot assure you that we and our subsidiaries will be able to comply with the provisions of our respective debt instruments, including the financial covenants in the Mirant Secured Credit Facility. Breaching any of these covenants or restrictions or the failure to comply with our obligations after the lapse of any applicable grace periods could result in a default under the applicable debt instruments, including the New Secured Notes Indenture and the Restructured Credit Facilities. If there were an event of default, holders of such defaulted debt could cause all amounts borrowed under these instruments to be due and payable immediately. We cannot assure you that our assets or cash flow or that of our subsidiaries would be sufficient to fully repay borrowings under the outstanding debt instruments, either upon maturity or if accelerated upon an event of default that we would be able to refinance or restructure the payments on such debt. In addition, any event of default or declaration of acceleration under one debt instrument could also result in an event of default under one or more of our or our subsidiaries’ other debt instruments. See “— Our activities are restricted by substantial indebtedness. This indebtedness may be accelerated if we are unable to service it. Acceleration of some of our debt may cause other lenders to accelerate other debt obligations.”

Changes in commodity prices may affect financial results, either favorably or unfavorably.

Our generation and distribution businesses are subject to changes in power prices and fuel costs, which may affect their financial results and financial position by increasing the cost of producing power and decreasing the amounts they receive from the sale of power. In addition, actual power prices and fuel costs may differ from those assumed in our financial models.

Many factors influence the level of commodity prices, including weather, illiquid markets, transmission or transportation inefficiencies, availability of competitively priced alternative energy sources, demand for energy commodities, natural gas, crude oil and coal production, natural disasters, wars, embargoes and other catastrophic events, and federal, state and foreign energy and environmental regulation and legislation.

Additionally, we may, at times, have an open position in the market, within established guidelines, resulting from the management of our portfolio. To the extent open positions exist, fluctuating commodity prices can impact financial results and financial position, either favorably or unfavorably. Furthermore, the risk management procedures we have in place may not always be followed or may not always work as planned. As a result of these and other factors, we cannot predict with precision the impact that risk management decisions may have on our businesses, operating results or financial position. Although management devotes a considerable amount of attention to these issues, their outcome is uncertain.

Our liquidity and profitability may decline if we are not able to execute our hedging strategy or if our hedging strategies do not work as planned.

To lower our financial exposure related to commodity price fluctuations, our commodity trading operations routinely enter into contracts to hedge purchase and sale commitments, weather conditions, fuel requirements and inventories of natural gas, coal, electricity, crude oil and other commodities. As part of this strategy, we routinely utilize fixed-price forward physical purchase and sales contracts, futures, financial swaps and option contracts traded in the over-the-counter markets or on exchanges. We do not expect to cover the entire exposure from market price volatility of our assets, however, and the coverage will vary over time. In addition, as a result of marketplace illiquidity and other factors, our commodity trading operations may, at times, be unable to fully hedge our portfolios for market risks. This inability to hedge against changes in commodity prices may cause our profitability to decline.

Our projects located outside of the United States expose us to risks related to laws of other countries, taxes, economic conditions, fluctuations in currency rates, labor supply and relations, political conditions and policies of foreign governments. These risks may delay or reduce our realization of value from our international projects.

We have substantial operations outside the United States. In 2002, we derived approximately 16% of our net income from foreign operations. The financing and operation of projects outside the United States entail significant political and financial risks, which vary by country, including:


	•	changes in laws or regulations,

	•	changes in foreign tax laws and regulations, including unexpected tax liabilities,

	•	changes in United States laws, including tax laws, related to foreign operations,

	•	compliance with United States foreign corrupt practices laws,

	•	changes in government policies or personnel,

	•	changes in general economic conditions affecting each country,

	•	difficulty in converting earnings to United States dollars or moving funds out of the country in which the funds were earned,

	•	fluctuations in currency exchange rates,

	•	changes in labor relations in operations outside the United States,

	•	political instability and civil unrest, and

	•	expropriation and confiscation of assets and facilities.

Despite contractual protections we have against many of these risks for our operations in the Philippines and some other countries in which Mirant operates or may invest in the future, our actual results may be affected by the occurrence of any of these events.

Risk from fluctuations in currency exchange rates can arise when our foreign subsidiaries borrow funds in one type of currency but receive revenue in another. In such cases, an adverse change in exchange rates can reduce our ability to meet debt service obligations. Foreign currency risk can also arise when the revenues received by our foreign subsidiaries are not in United States dollars. In such cases, a strengthening of the United States dollar could reduce the amount of cash and income we receive from these foreign subsidiaries.

Although we believe we have hedges and contracts in place to mitigate our most significant foreign currency exchange risks, we have some exposure that is not hedged.

Some of our facilities depend on only one or a few customers or suppliers. These parties, as well as other parties with whom we have contracts, may fail to perform their obligations, or may terminate their existing agreements, which may result in a default on project debt or a loss in revenues and may require us to institute legal proceedings to enforce our agreements.

Several of our power production facilities rely on a single customer or a few customers to purchase most or all of the facility’s output or on a single supplier or a few suppliers to provide fuel, water and other services required for the operation of the facility. Our sale and procurement agreements for these facilities may also provide support for any project debt used to finance the related facilities. The financial performance of these facilities is dependent on the continued performance by customers and suppliers of their obligations under their long-term agreements.

In addition, our commodity trading operations are exposed to the risk that counterparties that owe us money or energy as a result of market transactions will not perform their obligations. We are currently owed significant past due revenues from the California Power Exchange and the California Independent System Operator.

Finally, revenue under some of our power sales agreements may be reduced significantly upon their expiration or termination. Much of the electricity we generate from our existing portfolio is sold under long-term power sales agreements that expire at various times. When the terms of each of these power sales agreements expire, it is possible that the price paid to us for the generation of electricity may be reduced significantly, which would substantially reduce our revenue under such agreements.

Failures of companies within our sector could have a materially adverse effect on us.

The failure of companies within our sector could have a materially negative effect on our business. As a result of intra-industry company failures and other factors, we have experienced such adverse effects as increased negative sentiment and reactions from our customers, investors, lenders and credit rating agencies, increased requirements for collateral in the transaction of our businesses, increased pressure on our liquidity and reduced access to additional capital. Additional failures within our sector could heighten these reactions or cause additional negative impacts on our business which could impair our ability to achieve our business plan.

Our credit ratings have been reduced by Moody’s, Fitch and S&P to non-investment grade; further reductions could increase our collateral requirements and could materially adversely affect our financial condition.

As of April 25, 2003, our senior unsecured debt is rated “Caa2” with Negative Outlook by Moody’s. As of the same date, S&P has assigned a rating to our senior unsecured debt of “B” on CreditWatch with negative implications, and Fitch has assigned a rating to our senior unsecured debt of “B+” with a Rating Watch Negative. Also as of April 25, 2003, MAG’s senior unsecured debt is rated “B3” with Negative Outlook by Moody’s, “B” on CreditWatch with negative implications by S&P and “B+” with a Rating Watch Negative by Fitch. Each of these ratings has a negative outlook. Although the foregoing indicates the ratings from the various rating agencies, we note that these ratings are not a recommendation to buy, sell or hold our

Although we have removed ratings triggers from our various contracts, it is possible that significant additional downgrades by the various credit ratings agencies could materially negatively impact our business. For example, significant additional downgrades could further increase requirements for collateral in the transaction of our businesses, increase negative sentiment and reactions from our customers, regulators, investors, lenders or other credit rating agencies, increase pressure on our liquidity and reduce our ability to raise capital. These reactions, and others, could impair our ability to achieve our business plan.

Our costs of compliance with environmental laws are significant and the cost of compliance with new and existing environmental laws could adversely affect our profitability.

Our operations are subject to extensive federal, state, local and foreign statutes, rules and regulations relating to environmental protection. To comply with these legal requirements, we must spend significant sums on environmental monitoring, pollution control equipment and emission fees. We may be exposed to compliance risks from new projects, as well as from plants we have acquired.

Our failure to comply with environmental laws may result in the assessment of penalties and fines against us by regulatory authorities. With the trend toward stricter standards, greater regulation, more extensive permitting requirements and an increase in the number and types of assets operated by us subject to environmental regulation, we expect our environmental expenditures to be substantial in the future. As is true in many countries of the world, the governments of the United States, the Philippines and Trinidad and Tobago have proposed increased environmental regulation of many industrial activities, including increased regulation of air quality, water quality and solid waste management.

Unless our contracts with customers expressly permit us to pass through increased costs attributable to new statutes, rules and regulations, we may not be able to recover capital costs of complying with new environmental regulations, which may adversely affect our profitability. Most of our contracts with customers do not permit us to recover capital costs incurred to comply with new environmental regulations.

Our business in the United States is subject to complex government regulations and changes in these regulations or in their implementation may affect the costs of operating our facilities or our ability to operate our facilities, which may negatively impact our results of operations.

The majority of our generation operations in the United States are exempt wholesale generators that sell electricity exclusively into the wholesale market. Generally, our exempt wholesale generators are subject to regulation by the Federal Energy Regulatory Commission, or the FERC, regarding rate matters and state public utility commissions regarding non-rate matters. The majority of our generation from exempt wholesale generators is sold at market prices under market rate authority exercised by the FERC, although the FERC has the authority to impose “cost of service” rate regulation or other market power mitigation measures if it determines that market pricing is not in the public interest. A loss of our market-based rate authority would prohibit electricity sales at market rates and would require all sales to be cost-based. A loss of our market-based rate authority could severely impair our execution of our business plan and could have a materially negative impact on our business.

To conduct our business, we must obtain licenses, permits and approvals for our plants. We cannot assure you that we will be able to obtain and comply with all necessary licenses, permits and approvals for our plants. If we cannot comply with all applicable regulations, our business, results of operations and financial condition could be adversely affected.

The United States Congress is considering legislation that would repeal the Public Utility Regulatory Policies Act of 1978, as amended, commonly referred to as PURPA, entirely, or at least eliminate the future obligation of utilities to purchase power from qualifying facilities, and also repeal the Public Utility Holding Company Act of 1935, as amended, commonly referred to as PUHCA. In the event of a PUHCA repeal,

Repeal of PURPA or PUHCA may or may not be part of comprehensive legislation to restructure the electric utility industry, allow retail competition and deregulate most electric rates. We cannot predict the effect of this type of legislation, although we anticipate that any legislation would result in increased competition. If we were unable to compete in an increasingly competitive environment, our business and results of operation may suffer.

We cannot predict whether the federal government, state legislatures or foreign governments will adopt legislation relating to the deregulation of the energy industry. We cannot assure you that the introduction of new laws or other future regulatory developments will not have a material adverse effect on our business, results of operations or financial condition.

Our facilities may not operate as planned, which may lead to poor financial performance and the acceleration of debt of the affected project.

Our operation of power plants involves many risks, including the breakdown or failure of generation equipment or other equipment or processes, labor disputes, fuel interruption and operating performance below expected levels. In addition, weather related incidents and other natural disasters can disrupt both generation and transmission delivery systems. Operation of our power plants below expected capacity levels may result in lost revenues or increased expenses, including higher maintenance costs and penalties. In addition, we may not be able to repay the project debt for an under-performing facility, which could trigger default provisions in a subsidiary’s or affiliate’s project financing agreements and might allow the affected lenders to accelerate that debt.

Our operations depend substantially on the performance of our subsidiaries and affiliates, some of which we do not control and some of which are subject to restrictions and taxation on dividends and distributions.

Two of our affiliates, Birchwood Power Partners, L.P., which owns the Birchwood power plant in Fredericksburg, Virginia, and The Power Generation Company of Trinidad and Tobago, are not subject to our control of management and policies to the same extent as our consolidated subsidiaries. We do exercise significant influence over the operations of these affiliates, however, and we account for these investments using the equity method of accounting. These affiliates contributed approximately 1% of our income from continuing operations in 2002.

The debt agreements of some of our subsidiaries and affiliates restrict their ability to pay dividends, make distributions or otherwise transfer funds to us prior to the payment of other obligations, including operating expenses, debt service and reserves. Further, if we elect to receive distributions of earnings from our foreign operations, we may incur United States taxes on such amounts. Dividend payments from our international projects to us are, in some countries, also subject to withholding taxes.

Our business development activities may not be successful and, as such, projects may be cancelled or otherwise may not commence operation as scheduled despite the expenditure of significant amounts of capital.

Our business involves numerous risks relating to the acquisition, development and construction of large power plants. During the past year, we have terminated many of our previously planned development projects and deferred other such projects. The termination of these projects has resulted in the write-off of significant amounts of expenses, including termination expense payments in connection with turbine acquisition agreements. Future terminations of projects would most likely result in additional write-offs which could be material.

Our future success in developing a particular project may be contingent upon, among other things, negotiation of satisfactory engineering, construction, fuel supply and power sales contracts, receipt of required

governmental permits and timely implementation and satisfactory completion of construction. We may be unsuccessful in accomplishing any of these matters or in doing so on a timely basis. Although we may attempt to minimize the financial risks in the development of a project by securing a favorable power sales agreement, obtaining all required governmental permits and approvals and arranging adequate financing prior to the commencement of construction, the development of a power project may require us to expend significant sums for preliminary engineering, permitting, legal, equipment fabrication and other expenses before we can determine whether a project is feasible, economically attractive or capable of being financed.

Currently, we have power plants under development or construction. Our completion of these facilities without delays or cost overruns is subject to substantial risks, including changes in market prices; shortages and inconsistent qualities of equipment, material and labor; work stoppages; permitting and other regulatory matters; adverse weather conditions; unforeseen engineering problems; environmental and geological conditions; unanticipated cost increases; and our attention to other projects, any of which could give rise to delays, cost overruns or the termination of the plant expansion, construction or development.

If we were unable to complete the development of a facility, we would generally not be able to recover our investment in the project. The process for obtaining initial environmental, siting and other governmental permits and approvals is complicated, expensive and lengthy, often taking more than one year, and is subject to significant uncertainties. In addition, construction delays and contractor performance shortfalls can result in the loss of revenues and may, in turn, adversely affect our results of operations. The failure to complete construction according to specifications can also result in liabilities, reduced plant efficiency, higher operating costs and reduced earnings.

The IRS has completed its audit of Mirant for all tax years through 1999. For years subsequent to 1999, the IRS may raise issues that could have a material effect on our cash flows.

The IRS has completed its audit of Mirant for all tax years through 1999. The tax liability resulting from this audit has already been reflected in the financial statements for 2002. For years subsequent to 1999, the IRS may raise issues that may have a material effect on our cash flows. Additionally, audits of certain of our foreign operations and audits by certain state tax authorities are currently underway. We believe that we have adequately provided for any potential exposures related to such open tax years.

Our historical financial results from when we were a subsidiary of Southern may not be representative of our results as a separate company.

The historical financial information as reflected in our financial statements incorporated by reference herein does not necessarily reflect what our financial position, results of operations and cash flows would have been had we been a separate, stand-alone entity during the periods presented. Our costs and expenses reflect charges from Southern for centralized corporate services and infrastructure costs, including engineering, legal, accounting, information technology, investor relations and stockholder services, insurance and risk management, tax, environmental, human resources and payroll and external affairs, including marketing and public relations.

These allocations have been determined based on regulatory limitations and other bases that we and Southern considered to be reasonable reflections of the utilization of services provided to us for the benefits received by it. This historical financial information is not necessarily indicative of what our results of operations, financial position and cash flows will be in the future. We experienced significant changes in our cost structure, funding and operations as a result of our separation from Southern, including increased marketing expenses related to building a company brand identity separate from Southern and increased costs associated with being a publicly traded, stand-alone company.

Terrorist attacks, future war or risk of war may adversely impact our results of operations, our ability to raise capital or our future growth.

Uncertainty surrounding terrorist acts, retaliatory military strikes or a sustained military campaign may impact our operations in unpredictable ways, including changes in insurance markets, disruptions of fuel

supplies and markets, particularly oil, and the possibility that infrastructure facilities, including electric generation, transmission and distribution facilities, could be direct targets of, or indirect casualties of, an act of terror. War or risk of war may also have an adverse effect on the economy. The terrorist attacks on September 11, 2001 and the changes in the insurance markets attributable to the terrorist attacks have made it difficult for us to obtain certain types of insurance coverage. As a result, we have chosen to self-insure some of our plants and facilities for acts of terrorism. A lower level of economic activity could also result in a decline in energy consumption, which could adversely affect our revenues or restrict our future growth. Instability in the financial markets as a result of terrorism or war could also affect our ability to raise capital.

Continuation of current capital market conditions could adversely affect our prospects.

Current conditions in our industry and in the capital markets have resulted in the need for additional liquidity. Continuation of these conditions could adversely affect our results of operations and growth prospects. We have taken many actions to respond to these conditions, including issuing additional equity, reducing our planned capital expenditures by deferring or canceling certain construction and acquisition projects, reducing corporate overhead expenses and undertaking the sale of several of our domestic and international assets. There can be no assurance that conditions in the energy equity markets will not continue to adversely affect our ability to efficiently conduct our marketing operations and affect our results of operations.

We are currently involved in significant litigation that, if decided adversely to us, could materially adversely affect our financial condition, cash flows and results of operations.

We are currently involved in a number of lawsuits concerning our activities in the western power markets. These include a number of lawsuits by the California Attorney General and ratepayers alleging, among other things, that certain owners of electric generation facilities in California, and energy marketing, engaged in various unlawful and fraudulent business acts that served to manipulate wholesale markets and allegedly inflated wholesale electricity prices in California. Additionally, a class action is pending against us and four of our officers alleging, among other things, that defendants made material misrepresentations and omissions to the investing public regarding our business operations and future prospects during the period from January 19, 2001 through May 6, 2002. In addition, we are involved in various other litigation matters, all of which are described in more detail in our 2002 Annual Report on Form 10-K, which is incorporated herein by reference. We intend to vigorously defend against these claims, which we are unable to settle, but the results of this litigation cannot be determined. Adverse outcomes for us in this litigation could require significant expenditures by us and could have a material adverse effect on our financial condition, cash flows and results of operations.

We may be unable to retain personnel capable of successfully executing our business plan given the uncertain business climate for our sector and our company.

If our financial position does not improve or if our financial restructuring is unsuccessful, there is a risk that personnel who are integral to the success of our business model will leave the company, disrupting our ability to complete our short-and long-term goals successfully. To reduce this risk, we have in place an equity-based compensation plan and have also put in place retention agreements with key employees. These measures are designed to provide incentives to these key employees to remain with Mirant throughout this critical period. There can be no assurance that these measures will be effective.

We may not be able to meet our repurchase obligations if and when they accrue with respect to approximately $400 million aggregate principal amount of Convertible Debentures held as the underlying assets of a trust, which could trigger defaults under our Mirant Secured Credit Facility and the MAG Secured Credit Facility.

Approximately $400 million aggregate principal amount of Convertible Debentures are held as the underlying trust assets of the TIERS Trust formed pursuant to the Base Trust Agreement, dated as of December 15, 2000, between Structured Products Corp., an indirect wholly-owned subsidiary and affiliate of

Salomon Smith Barney Inc., as depositor, and U.S. Bank Trust National Association, as trustee, as supplemented by the Series MIR 2001-14 Supplement, dated as of June 18, 2001. We have no relationship with Structured Products Corp. On June 18, 2001, Structured Products Corp. issued TIERS Fixed Rate Certificates, which represent beneficial interests in the underlying trust assets. The TIERS mature on June 15, 2004. As of the date of this Offering Circular and Disclosure Statement, Mirant has purchased $83 million of TIERS.

Pursuant to the terms of the Call Right Agreement, dated as of June 18, 2001, between U.S. Bank Trust National Association and Citibank N.A., Citibank was granted the right to purchase the $400 million aggregate principal amount of Convertible Debentures from the trustee at any time up to and including the maturity date. If Citibank does not exercise its purchase right at least two business days prior to June 15, 2004, the trustee is obligated to tender the $400 million aggregate principal amount of Convertible Debentures to Mirant and Mirant is obligated to purchase all of the Convertible Debentures tendered in accordance with the terms of the indenture governing the Convertible Debentures. We cannot assure you that we will have sufficient funds to repurchase the $400 million aggregate principal amount of Convertible Debentures if we are forced to do so.

Even though we have the option of repurchasing the $400 million aggregate principal amount of Convertible Debentures entirely with shares of our Common Stock, depending on the number of shares we would have to issue, NYSE rules may require us to obtain stockholder approval to do so, and we cannot assure you that our stockholders would give the necessary approval.

Our failure to repurchase $400 million aggregate principal amount of Convertible Debentures if and when required to do so would result in our defaulting on the Convertible Debentures and would likely constitute a default under the Restructured Credit Facilities. It may also constitute a default under our other indebtedness outstanding at the time. If defaults under the Restructured Credit Facilities and other indebtedness are triggered we may be forced to refinance the Restructured Credit Facilities as well as our other indebtedness which would likely prevent us from making payments to the holders of the Exchange Offer Securities, as well as payments to the holders of the New Secured Notes.

Mirant Corporation (formerly Southern Energy, Inc.) was incorporated in Delaware in 1993. We are an international energy company that produces and sells electricity in the United States, the Philippines and the Caribbean. In addition, in North America we use derivative financial instruments primarily to hedge and optimize our assets and we may also take proprietary commodity positions. In the Philippines, most of our generation output is sold under long-term contracts. Our operations in the Caribbean include fully integrated electric utilities, which generate power sold to residential, commercial and industrial customers.

As of December 31, 2002, we owned or controlled more than 21,800 MW of electric generating capacity around the world and expect to complete construction of approximately 990 MW of generating capacity by December 2003. In North America, we also controlled access to approximately 3.1 billion cubic feet per day of natural gas production, more than 2.1 billion cubic feet per day of natural gas transportation and almost 13.4 billion cubic feet of natural gas storage as of December 31, 2002.

We manage our business through two segments. Our North America segment consists of generation capacity and commodity trading operations managed as a combined business and our International segment includes generation businesses in the Philippines, Curacao and Trinidad and integrated utilities in the Bahamas and Jamaica. In 2002, we closed our European trading operations and sold our distribution and generation assets in Europe and China. Prior to the sale of these assets, they are reflected in the International segment.

Our principal executive offices are located at 1155 Perimeter Center West, Suite 100, Atlanta, Georgia 30338, and our telephone number is (678) 579-5000.


	•	our actual capitalization as of December 31, 2002; and

	•	our capitalization as of December 31, 2002, as adjusted to give effect to the Restructuring Transactions, including the Exchange Offers, and the MAG Exchange Offer and the MAG Secured Credit Facility, as if such transactions had occurred on December 31, 2002, but excluding any gain on the early extinguishment of the securities underlying the TIERS owned by us (assuming, first, that 85% of the aggregate principal amount of the Exchange Offer Securities and the New MAG Notes are validly tendered, accepted and not withdrawn in the Exchange Offers, and second, that all of the Exchange Offer Securities and the new MAG Notes are exchanged through the Plan of Reorganization).

These tables have been included to provide additional information regarding the anticipated impact of the Restructuring Transactions (including the Exchange Offers), the MAG Exchange Offer, the MAG Secured Credit Facility, and the Plan of Reorganization on our capitalization. The information presented below should be read in conjunction with “Summary Selected Consolidated Financial Information” included elsewhere in this Offering Circular and Disclosure Statement and our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2002 Annual Report on Form 10-K incorporated herein by reference.

We currently have approximately $8.9 billion of debt outstanding and significant amounts of this debt are scheduled to become due and payable within the next three years, including the Exchange Offer Securities that are the subject of these Exchange Offers. We are undertaking the Restructuring Transactions, including the Exchange Offers, to defer the maturity of our debt that matures prior to 2006 until 2008. The purpose of the Restructuring Transactions is to permit us to repay in full all of our obligations with interest, including approximately $870 million of our unsecured long term indebtedness that matures after 2006. The restructuring of our debt is part of a broader effort to refocus and restructure our business. Our restructuring activities executed thus far include:


	•	The sale of our interests in Bewag, WPD and our Chinese businesses, the proceeds of which were used to reduce debt by $847 million. We will now focus our activities in North America, the Caribbean and the Philippines.

	•	The sale, cancellation or abandonment of 70 turbines and suspended construction on four facilities to reduce future capital requirements and conserve liquidity. These actions increased our 2002 net loss by $549 million and, as of April 22, 2003, will require $160 million in cash to execute. The long-term result of these actions released future cash obligations of $1.9 billion between 2003 and 2005.

	•	The reduction of our workforce by 655 positions to staff for our revised strategy resulting in $51 million in severance cost in 2002. We will continue to reduce employee count as we sell additional businesses.

	•	Reduced commodity trading activity in an effort to lower collateral requirements and return previously posted collateral to us.

The proposed Restructuring Transactions include: (i) these Exchange Offers and (ii) the entry into the new Mirant Secured Credit Facility, all to be effectuated either through the Out-of-Court Alternative or the In-Court Alternative. Set forth below is a summary of the terms of the MAG Exchange Offer which is being commenced simultaneously with this Exchange Offer and a summary of the TIERS trust structure. For a description of the terms of the Exchange Offers, please see the section of this Offering Circular and Disclosure Statement captioned “The Exchange Offers.” For a description of the new Restructured Credit Facilities, please see the section of this Offering Circular and Disclosure Statement captioned “Description Of Certain Other Indebtedness — Restructured Credit Facilities.”

Following Mirant’s inability to refinance its 364 day Credit Facility in July 2002 and the subsequent conversion of such facility to a term loan, Mirant began to evaluate its alternatives to refinance its short-term and medium-term debt maturities. In October 2002, Mirant engaged Blackstone as its financial advisor to help evaluate its financial situation and formulate a financial restructuring plan. During the months of November through February, Mirant’s management developed and refined a five year business plan summarized in the Five-Year Projections.

Beginning in February 2003, Mirant and its advisors held preliminary meetings with the Mirant Bank Agents to encourage them to retain advisors and commence due diligence at Mirant with a view to jointly formulating a refinancing or restructuring proposal. Confidentiality agreements were executed, and the Mirant Bank Consultants were engaged and began due diligence in late February. The Mirant Bank Agents also requested that Mirant retain them as global restructuring advisors to advise Mirant with respect to its restructuring. In early April, Mirant became aware, in connection with the preparation of its audited financial statements, that, depending on their magnitude, the recognition of non-cash impairment charges and the elimination for accounting purposes of a substantial tax credit could cause Mirant to be in breach of a covenant in the Mirant Bank Debt and the Turbine Facility. Accordingly, to avoid a prospective default under the Mirant Bank Debt and the Turbine Facility and to permit discussions regarding the restructuring to proceed, Mirant entered into a Waiver and Amendment Agreement (the “Waiver”), dated as of April 18, 2003, by and among Mirant, Mirant Americas Development Capital LLC and the agent for the Turbine Facility and the Mirant Bank Agents. As consideration for the Mirant Bank Agents’ agreement to provide

During March 2003, Mirant was approached by representatives of an ad hoc committee of Noteholders and other Mirant bondholders who purported to represent approximately 43% of the outstanding capital markets indebtedness of Mirant. The ad hoc committee had retained Chanin and Andrews & Kurth L.L.P. as their advisors who negotiated confidentiality agreements with Mirant and, subsequently, agreements pursuant to which Mirant agreed to pay the fees of such advisors under certain circumstances. Thereafter, Mirant engaged in discussions with such advisors and provided them with confidential information with a view to reaching agreement on consensual Exchange Offers. Although Mirant has engaged in negotiations with the ad hoc committee and expects such negotiations to continue following commencement of the Exchange Offers, neither the ad hoc committee nor its advisors have endorsed or approved the terms of the Exchange Offer, have recommended that any Noteholders tender Exchange Offer Securities or have indicated that they intend to accept the Exchange Offers.

Discussions with the Mirant Bank Agents continued during the months of April and May. On April 29, 2003, in satisfaction of a covenant in the Waiver, Mirant delivered a comprehensive restructuring proposal to the Mirant Bank Agents which was subsequently distributed to the Mirant Bank Lenders. A cornerstone of Mirant’s restructuring proposal, in addition to a five-year extension of maturities, was that all creditors (including, Bank Lenders, holders of the New Secured Notes and holders of the New MAG Notes) who were being requested to extend the maturity of their debt would share equally and ratably in a lien on substantially all of the unencumbered tangible and intangible assets of the Grantor Subsidiaries. The Mirant Bank Agents rejected that concept and proposed instead that the Bank Lenders receive first liens on such assets and holders of the New Secured Notes and the New MAG Notes receive second liens on such assets. Representatives of the ad hoc committee of Noteholders emphatically rejected that approach.

On May 27, 2003 Lehman Commercial Paper Inc., the agent under MAG’s existing credit facilities sent a letter to MAG in which it stated that the MAG Bank Lenders needed more time to evaluate the proposed MAG Secured Credit Facility but suggesting that the Restructuring Transactions should recognize the superior position of MAG Bank Lenders compared to creditors of Mirant. On May 29, 2003, representatives of Mirant and its advisors met with members of the ad hoc committee of MAG bondholders and their advisors in Atlanta. The MAG ad hoc committee members expressed their view that the Restructuring Transactions as currently structured were unfair to MAG creditors in that the “structural seniority” of the MAG creditors was being ignored and that Mirant creditors were being unfairly advantaged to the detriment of the MAG creditors. Representatives of the MAG committee advised Mirant and MAG that if they attempted to proceed with the Restructuring Transactions the MAG ad-hoc committee intended to institute legal action to seek to enjoin them or set them aside and to hold the responsible parties accountable for what they considered to be breaches of fiduciary duty.

On the evening of May 30, 2003, the Mirant Bank Agents delivered to the Board a letter which said that Shearman and the Mirant Bank Consultants had been performing an analysis that compared the Out-of-Court Alternative to bankruptcy. The letter then stated:


	Although the final analysis of those alternatives will not be distributed to and discussed with the broader bank group until early next week, it is now substantially complete, and after carefully considering it the undersigned have concluded that we will not support, and will recommend to our respective syndicates that they not support, any out-of-court restructuring that would provide for the sharing of first liens between bank lenders and bondholders. If, however, Mirant is willing to provide the first lien only to the bank lenders, we believe that we could work constructively with the bank group to address other aspects of Mirant’s restructuring proposal.

	In the event that Mirant has concluded that it will not consummate a restructuring other than on a shared lien basis, we suggest that, rather than Mirant launching an exchange offer containing a restructuring proposal that does not have the support of its lead agents, it would be the appropriate time to be actively preparing for the alternative to an out-of-court restructuring. If that were the case, we


	would be prepared to be supportive and work diligently with Mirant and its advisors to accomplish a pre-arranged Chapter 11 reorganization in a smooth and orderly manner so as to preserve value to the greatest extent possible for Mirant and its stakeholders.

The Board met at a special meeting on June 1, 2003 and, for the reasons described under “— Recommendation of the Board of Directors” authorized Mirant to commence these Exchange Offers.

Approximately $400 million aggregate principal amount of our Convertible Debentures are held as the underlying trust assets (the “Trust Assets”) of the TIERS Fixed Rate Certificates Trust Series 2001-14 (the “TIERS Trust”) formed pursuant to the Base Trust Agreement, dated as of December 15, 2000 (the “Base Trust Agreement”), between Structured Products Corp., an indirect wholly-owned subsidiary and affiliate of Salomon Smith Barney Inc., as depositor (“Structured Products Corp.”), and U.S. Bank Trust National Association, as trustee (the “TIERS Trustee”), as supplemented by the Series MIR 2001-14 Supplement, dated as of June 18, 2001 (the “Series Supplement”). We have no relationship with Structured Products Corp. On June 18, 2001, Structured Products Corp. issued TIERS Fixed Rate Certificates (“TIERS”), which represent beneficial interests in the underlying trust assets. As of the date of this Offering Circular and Disclosure Statement, Mirant has purchased $83 million of TIERS.

Mirant believes that pursuant to the terms of the Call Right Agreement, dated as of June 18, 2001 (the “Call Right Agreement,” and together with the Base Trust Agreement and the Series Supplement, the “Operative TIERS Documents”), between the TIERS Trustee and Citibank N.A. (“Citibank”), Citibank was granted the right to purchase the $400 million aggregate principal amount of Convertible Debentures from the trustee at any time up to and including the maturity date. If Citibank does not exercise its purchase right at least two business days prior to June 15, 2004 (the “Put Date”), the TIERS Trustee is obligated to tender the $400 million aggregate principal amount of Convertible Debentures to Mirant on the Put Date and Mirant is obligated to purchase all of the Convertible Debentures tendered, in whole or in part in cash or Mirant Common Stock, in accordance with the terms of the indenture governing the Convertible Debentures. Pursuant to the terms of the Call Right Agreement, Mirant understands that Citibank is obligated to purchase the cash and/or stock received from Mirant on the Put Date for an amount equal to the face amount of the TIERS. Pursuant to the Series Supplement, the TIERS Trustee is then obligated to distribute the cash proceeds to TIERS holders. If there is an event of default as defined in the indenture governing the Convertible Debentures (for example, the filing by Mirant of a voluntary Chapter 11 bankruptcy petition), however, Citibank is not obligated to repurchase the Convertible Debentures. Rather, Citibank is only obligated to pay to the TIERS Trustee the discounted value of the remaining “make-whole” interest payments due to the TIERS Trustee under the Call Right Agreement. In addition, if there is an event of default as defined in the indenture governing the Convertible Debentures, the TIERS Trustee may not put the Convertible Debentures to Mirant but rather, at the request of a TIERS holder, may distribute the Convertible Debentures, together with any “make-whole” payment, to the TIERS holders.

The Convertible Debentures Exchange Offer is not being made directly to TIERS holders because the TIERS are not securities of Mirant, the exemption from registration provided by section 3(a)(9) of the Securities Act is not available. Mirant has been advised that, without the consent of 100% of the TIERS holders, the Operative TIERS Documents do not permit the TIERS Trustee to accept any securities offered in exchange for the Convertible Debentures held as the underlying trust assets or to vote the Convertible Debentures on any plan of reorganization. Accordingly, in the absence of any amendment to the terms of the Series Supplement and Call Right Agreement, the Convertible Debentures held as the underlying assets of the TIERS Trust will not be tendered pursuant to the Convertible Debentures Exchange Offer and the Minimum Tender Condition will not be attained. If the Minimum Tender Condition is not attained but Mirant has received affirmative votes from 66 2/3% in principal amount and more than 50% in number of the Exchange Offer Securities who did vote on the Plan of Reorganization, Mirant currently intends seek to implement the In-Court Alternative, which will constitute an event of default under the TIERS. If the Plan of Reorganization is consummated, the Convertible Debentures that are held in the TIERS Trust will be exchanged for New Secured Notes. Citibank would no longer be obligated to repurchase the Trust Assets for par, however, and the TIERS Trustee would distribute the New Secured Notes to the TIERS holders. If the Plan of

Mirant has proposed to the TIERS Trustee, Structured Products Corp. and Citibank that amendments be made to the Series Supplement and the Call Right Agreement to permit any TIERS holder who wishes to do so to exchange his or her TIERS Certificate for his or her pro rata share of the Convertible Debentures constituting the Trust Assets, plus the amount of the “make-whole” payment as of the date of exchange. Mirant believes that these amendments would provide a TIERS holder with the same consideration that he or she would receive after an event of default, and would permit a TIERS holder to participate in the Convertible Debentures Exchange Offer if he or she wishes to do so. Mirant is not a party to these agreements, however, and has no ability to effect any such amendment. Holders of TIERS may wish to contact the TIERS Trustee, Structured Products Corp. or Citibank directly for more information regarding the proposed amendments, whether they plan to adopt such amendments, and how their failure to do so will affect you as a TIERS holder.

Alternatively, Mirant may seek to acquire TIERS in privately negotiated exchanges with several large holders of TIERS. If Mirant were to be successful in any such transactions, it would reduce the Minimum Tender Condition by the principal amount of TIERS so acquired.

Concurrently, MAG is commencing the MAG Exchange Offer, in which MAG is offering to acquire any and all of its currently outstanding $500 million Senior Notes due 2006 in exchange for its New MAG Notes. The New MAG Notes will also be secured by first priority liens on the Collateral. See “Description of the Collateral and Intercreditor Arrangements.” The MAG Exchange Offer is subject to MAG’s concurrent entry into the MAG Secured Credit Facility, our consummation of the Exchange Offers, our concurrent entry into the Mirant Secured Credit Facility, and our right to extend, terminate or amend the MAG Exchange Offer in our sole and absolute discretion. As of the date of this Offering Circular and Disclosure Statement, $500 million aggregate principal amount of Existing MAG Notes was outstanding.

Upon the terms and conditions set forth in this Offering Circular and Disclosure Statement, we are offering Noteholders the opportunity to exchange New Secured Notes for outstanding Exchange Offer Securities validly tendered and accepted as described below.

This Offering Circular and Disclosure Statement, together with the Letter of Transmittal, is being sent to all registered Noteholders as of June 2, 2003. The completion of the Exchange Offers is subject to certain conditions, any of which we may waive, including the conditions that at least 85% of the outstanding aggregate principal amount of the Exchange Offer Securities are validly tendered, accepted and not withdrawn, that the other Restructuring Transactions are consummated and the entry by MAG into the MAG Secured Credit Facility, as set forth under “— Conditions to the Completion of the Exchange Offers.”

Exchange Offer Securities will be deemed to have been accepted as validly tendered if, as and when we have given oral or written notice thereof to the Exchange Agent. The Exchange Agent will act as agent for receiving tenders from the Noteholders and delivering the New Secured Notes to such holders.

Holders of Exchange Offer Securities registered in the name of a broker, dealer, commercial bank, trust company or nominee are urged to contact such registered holder promptly and instruct such registered holder to tender on his or her behalf.

We reserve our right to purchase or make offers for any Exchange Offer Securities that remain outstanding subsequent to the Expiration Date or to redeem the Exchange Offer Securities as a whole or in part and from time to time, as permitted by the indentures governing the Exchange Offer Securities, and to the extent permitted by applicable law, to purchase Exchange Offer Securities in the open market, in privately negotiated transactions or otherwise. Following completion of the Exchange Offers, the terms of any such purchases or subsequent offers could differ from the terms of the Exchange Offers including, among other things, the terms of the collateral offered at such time.

Holders that exchange Exchange Offer Securities for New Secured Notes will not be required to pay brokerage commissions or fees or, subject to the instructions in the Letter of Transmittal, transfer taxes associated with the receipt of the New Secured Notes upon completion of the Exchange Offers. We will pay all charges and expenses, other than certain applicable taxes, in connection with the Exchange Offers. See “— Fees and Expenses” below.

We will also pay any interest that is accrued and unpaid in respect of the Exchange Offer Securities through the Effective Date of the Exchange Offers to those holders who participate in the Exchange Offers.

The Expiration Date is 12:00 midnight, New York City time on June 27, 2003, unless the period for the Exchange Offers is extended, in which case the Expiration Date will be the last date to which the Exchange Offers are extended. We may extend either or both of the Exchange Offers, in our sole discretion, for any purpose including, without limitation, to permit the satisfaction or waiver of all conditions to the Exchange Offers. If we make a material change to the terms of either or both of the Exchange Offers or if we waive a material condition of either or both of the Exchange Offers, we will extend either or both of the Exchange Offers to the extent required under the Exchange Act.

To extend the Expiration Date, we will notify the Exchange Agent of any extension by oral or written notice prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date and we will notify the Noteholders, or cause them to be notified, as promptly as practicable thereafter. Such notification may state that we are extending either or both of the Exchange Offers for a specified period of time.

We expressly reserve the right (i) to delay acceptance of any Exchange Offer Securities, to extend either or both of the Exchange Offers, or to terminate either or both of the Exchange Offers or any or all of the other

Restructuring Transactions and not accept Exchange Offer Securities not previously accepted if any of the conditions set forth under “— Conditions to the Completion of the Exchange Offers” shall have not been waived or satisfied by us prior to the Expiration Date, and (ii) to amend at any time, or from time to time, the terms of either or both of the Exchange Offers. If we exercise any such right, we will give oral or written notice thereof to the Exchange Agent as promptly as practicable. If either or both of the Exchange Offers is amended in a manner determined by us to constitute a material change, we will promptly disclose such amendment in a manner reasonably calculated to inform the Noteholders of such amendment.

The minimum period during which the Exchange Offers will remain open following material changes in the terms of such Exchange Offers or in the information concerning such Exchange Offers (other than a change in price or a change in percentage of Exchange Offer Securities sought) will depend upon the facts and circumstances of such change, including the relative materiality of the terms or information changes. With respect to any change in consideration for or percentage of Exchange Offer Securities sought, a minimum ten business day extension period will be made to allow for adequate dissemination of such change. If any of the terms of either or both of the Exchange Offers are amended in a manner we determined to constitute a material change adversely affecting any Noteholder, we will promptly disclose any such amendment in a manner reasonably calculated to inform the Noteholders of such amendment and we will extend either or both of the periods for the Exchange Offers for a time period which we, in our sole discretion, deem appropriate, depending upon the significance of the amendment and the manner of disclosure to Noteholders, if the period for the Exchange Offers would otherwise expire during such time period.

By tendering your Exchange Offer Securities in the Exchange Offers, you will be deemed to have released and waived any and all claims or causes of action of any kind whatsoever, whether known or unknown that directly or indirectly, arise out of, are based upon or are in any manner connected with your or your successors’ and assigns’ ownership or acquisition of the Exchange Offer Securities, including any related transaction, event, circumstance, action, failure to act or occurrence of any sort or type, whether known or unknown, including without limitation any approval or acceptance given or denied, which occurred, existed, was taken, permitted or begun prior to the date of such release, in each case, that you, your successors and your assigns have or may have had against (i) Mirant, its subsidiaries, its affiliates and its stockholders, and (ii) the directors, officers, employees, attorneys, accountants, advisors, agents and representatives, in each case whether current or former, of Mirant, its subsidiaries, its affiliates and its stockholders, whether those claims arise under federal or state securities laws or otherwise.

To tender your Exchange Offer Securities in the Exchange Offers, you must complete, sign and date the Letter of Transmittal, or a facsimile thereof, have the signatures thereon guaranteed if required by the Letter of Transmittal, and mail or otherwise deliver the Letter of Transmittal or a facsimile thereof, together with any other required documents, to the Exchange Agent prior to 12:00 midnight, New York City time, on the Expiration Date. By signing the Letter of Transmittal, you will be deemed to have made the representations and warranties contained therein in connection with your decision to participate in the Exchange Offers.


	•	certificates of Exchange Offer Securities must be received by the Exchange Agent along with the Letter of Transmittal, or

	•	a timely confirmation of a book-entry transfer of Exchange Offer Securities, if such procedure is available, into the Exchange Agent’s account at DTC, pursuant to the procedure for book-entry transfer described below, must be received by the Exchange Agent prior to the expiration date with the Letter of Transmittal.

The method of delivery of Exchange Offer Securities and Letter of Transmittal and all other required documents is at the election and risk of the Noteholder. If such delivery is by mail, it is recommended that

registered mail, properly insured, with return receipt requested, be used. In all cases, sufficient time should be allowed to assure timely delivery. No Exchange Offer Securities, Letters of Transmittal or other required documents should be sent to Mirant. Delivery of all Exchange Offer Securities, Letters of Transmittal and other documents must be made to the Exchange Agent at its address set forth on the back cover of this Offering Circular and Disclosure Statement. Noteholders may also request their respective brokers, dealers, commercial banks, trust companies or nominees to effect such tender for such Noteholders.

The tender by a Noteholder of Exchange Offer Securities will constitute an agreement between such Noteholder and us in accordance with the terms and subject to the conditions set forth herein and in the applicable Letter of Transmittal. Holders of Exchange Offer Securities registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wish to tender are urged to contact such registered holder promptly and instruct such registered holder to tender on his or her behalf.

Signatures on the Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Exchange Act (each, an “Eligible Institution”) unless the Exchange Offer Securities tendered pursuant thereto are tendered (i) by a registered holder of Exchange Offer Securities who has not completed the table entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the applicable Letter of Transmittal or (ii) for the account of an Eligible Institution.

If the Letter of Transmittal is signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such person should so indicate when signing, and unless waived by us, evidence satisfactory to us of their authority to so act must be submitted with such Letter of Transmittal.

All questions as to the validity, form, eligibility, time of receipt, acceptance and withdrawal of the tendered Exchange Offer Securities will be determined by us in our sole discretion, which determination will be final and binding. We reserve the absolute right to reject any and all Exchange Offer Securities not properly tendered or any Exchange Offer Securities which, if accepted, would, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any irregularities or conditions of tender as to particular Exchange Offer Securities. Our interpretation of the terms and conditions of the Exchange Offers, including the instructions in the Letter of Transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Exchange Offer Securities must be cured within such time as we shall determine. None of us, the Exchange Agent, the Information Agent or any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Exchange Offer Securities, nor shall any of them incur any liability for failure to give such notification. Tenders of Exchange Offer Securities will not be deemed to have been made until such irregularities have been cured or waived. Any Exchange Offer Securities received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned, at our expense, to such holder by the Exchange Agent, unless otherwise provided in the Letter of Transmittal, as soon as practicable following the Expiration Date.

Acceptance of Exchange Offer Securities for Exchange; Delivery of New Secured Notes

Upon satisfaction or waiver of all of the conditions to the Exchange Offers, all Exchange Offer Securities validly tendered and not withdrawn will be accepted, the New Secured Notes will be issued and the accrued interest on the Exchange Offer Securities will be paid promptly after the completion of the Exchange Offers. See “— Conditions to the Completion of the Exchange Offers.” For purposes of the Exchange Offers, Exchange Offer Securities shall be deemed to have been accepted as validly tendered for exchange when, as and if we have given oral or written notice thereof to the Exchange Agent. For each $1,000 principal amount outstanding of Exchange Offer Securities exchanged, the Noteholder will receive New Secured Notes with an aggregate principal amount of $1,000, payable in the form of New Secured Notes, to be paid only with respect

In all cases, issuances of New Secured Notes for Exchange Offer Securities that are accepted for exchange pursuant to the Exchange Offers will be made only after timely receipt by the Exchange Agent of:


	•	certificates for such notes or a timely book-entry confirmation of such notes into the Exchange Agent’s account at DTC,

	•	a properly completed and duly executed Letter of Transmittal, and

	•	all other required documents.

If any tendered Exchange Offer Securities are not accepted for any reason set forth under “— Conditions to the Completion of the Exchange Offers,” such unaccepted or such unexchanged Exchange Offer Securities will be returned without expense to the tendering holder thereof (if in certificated form) or credited to an account maintained with DTC as promptly as practicable after the expiration or termination of the Exchange Offers.

The Exchange Agent will make a request to establish an account with respect to the Exchange Offers Securities at DTC for purposes of the Exchange Offers within two business days after the date of this Offering Circular and Disclosure Statement. Any financial institution that is a participant in DTC’s systems may make book-entry delivery of Exchange Offer Securities by causing DTC to transfer such Exchange Offer Securities into the Exchange Agent’s account at DTC in accordance with DTC’s procedures for transfer. Although delivery of Exchange Offer Securities may be effected through book-entry transfer at DTC, however, the Letter of Transmittal or facsimile thereof with any required signature guarantees and any other required documents must, in any case, be transmitted to and received by the Exchange Agent at the address set forth on the back cover page of this Offering Circular and Disclosure Statement on or prior to the Expiration Date. Delivery of a Letter of Transmittal to DTC will not constitute valid delivery to the Exchange Agent, and the tender will not be valid.

The Exchange Agent and DTC have confirmed that any financial institution that is a participant in DTC may utilize DTC’s Automated Tender Offer Program (“ATOP”) procedures to tender Exchange Offer Securities.

Any participant in DTC may make book-entry delivery of Exchange Offer Securities by causing DTC to transfer such Exchange Offer Securities into the Exchange Agent’s account in accordance with DTC’s ATOP procedures for transfer. The exchange for the Exchange Offer Securities so tendered will only be made, however, after a book-entry confirmation of such book-entry transfer of such Exchange Offer Securities into the Exchange Agent’s account, and timely receipt by the Exchange Agent of an agent’s message and any other documents required by the Letter of Transmittal. The term “agent’s message” means a message, transmitted by DTC and received by the Exchange Agent and forming part of a book-entry confirmation, which states that DTC has received an express acknowledgment from a participant tendering Exchange Offer Securities that are the subject of such book-entry confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that we may enforce such agreement against such participant.

You may withdraw tenders of Exchange Offer Securities at any time prior to the Expiration Date and, unless your tendered Exchange Offer Securities have previously been accepted for exchange and you have received the New Secured Notes issuable in exchange therefor, you may also withdraw previously tendered Exchange Offer Securities at any time after July 28, 2003.

For a withdrawal to be effective, a written notice of withdrawal must be received by the Exchange Agent prior to the expiration of the Exchange Offers at one of the addresses listed on the back cover of this Offering Circular and Disclosure Statement. Any notice of withdrawal must specify the name of the person who tendered the Exchange Offer Securities to be withdrawn, identify the Exchange Offer Securities to be withdrawn, including the principal amount of the Exchange Offer Securities, and, where certificates for Exchange Offer Securities have been transmitted, specify the name in which the Exchange Offer Securities are registered, if different from that of the withdrawing holder. If certificates for the Exchange Offer Securities have been delivered or otherwise identified to the Exchange Agent, then, prior to the release of the certificates, the withdrawing holder must also submit the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an eligible guarantor institution unless the holder is an eligible guarantor institution. If Exchange Offer Securities have been tendered using the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Exchange Offer Securities and otherwise comply with the procedures of DTC. All questions as to the validity, form and eligibility — including time of receipt — of these notices will be determined by us. Our determination will be final and binding.

Any Exchange Offer Securities properly withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offers. Any Exchange Offer Securities which have been tendered for exchange but which are not exchanged for any reason will be returned to the registered holder without cost to that holder as soon as practicable after withdrawal, non-acceptance of tender or termination of the Exchange Offers. In the case of Exchange Offer Securities tendered by book-entry transfer into the Exchange Agent’s account at DTC by using the book-entry transfer procedures described above, any withdrawn or unaccepted Exchange Offer Securities will be credited to the tendering holder’s account at DTC. Properly withdrawn Exchange Offer Securities may be retendered at any time on or prior to the expiration of the Exchange Offers by following one of the procedures described above under “— Procedures for Tendering Exchange Offer Securities in the Exchange Offers.”

Notwithstanding any other provision of the Exchange Offers, or any extension of either or both of the Exchange Offers, we shall not be required to accept for exchange any Exchange Offer Securities, issue any New Secured Notes or make any payment for Exchange Offer Securities or accrued interest and we may terminate or amend either or both of the Exchange Offers or any or all of the other Restructuring Transactions if at any time prior to the consummation of the Exchange Offers, we determine, in our sole discretion, that any of the following conditions has not been satisfied, prior to or concurrently with such consummation of the Exchange Offers:


	•	the consummation of the other Restructuring Transactions,

	•	there shall not have occurred or be likely to occur any event affecting our business or financial affairs that would or might prohibit, prevent, restrict or delay consummation of the MAG Exchange Offer, the MAG Secured Credit Facility, the Mirant Secured Credit Facility or the consummation of the Restructuring Transactions as a whole, or that will, or is reasonably likely to, impair the contemplated benefits to us of the Exchange Offers, the MAG Exchange Offer, the Mirant Secured Credit Facility, the MAG Secured Credit Facility, or the Restructuring Transactions as a whole or that might be material to Noteholders in deciding whether to participate in the Exchange Offers,

	•	at least 85% percent of the outstanding aggregate principal amount of the Exchange Offer Securities has been validly tendered, accepted and not withdrawn,

	•	there shall not have been any action taken or threatened, or any statute, rule, regulation, judgment, order, stay, decree or injunction promulgated, enacted, entered, enforced or deemed applicable to the Exchange Offers or the exchange of Exchange Offer Securities pursuant to the Exchange Offers, by or before any court or governmental regulatory or administrative agency or authority, tribunal, domestic or foreign, which (i) challenges the making of the Exchange Offers or the MAG Exchange Offer, the entry into the Mirant Secured Credit Facility, the MAG Secured Credit Facility, or the consummation


		of the Restructuring Transactions as a whole or might, directly or indirectly, prohibit, prevent, restrict or delay consummation of, or might otherwise adversely affect in any material manner, any of the Restructuring Transactions or the consummation of the Restructuring Transactions as a whole or (ii) could materially adversely affect our business, condition (financial or otherwise), income, operations, properties, assets, liabilities or prospects, or materially impair the contemplated benefits of any of the Restructuring Transactions, or the consummation of the Restructuring Transactions as a whole to us or that might be material to Noteholders in deciding whether to participate in the Exchange Offers.

The foregoing conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any such condition (including any action or inaction by us) or may be waived by us, in whole or in part, at any time and from time to time, in our sole discretion. The failure by us at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time by us.

We own approximately $83 million of Owned TIERS. We will credit the Owned TIERS, as well as any additional certificates we may acquire, toward the Minimum Tender Condition.

Deutsche Bank Trust Company Americas has been appointed as Exchange Agent for the Exchange Offers. Letters of Transmittal, notices of guaranteed delivery and all correspondence in connection with the Exchange Offers should be sent or delivered by each Noteholder or a beneficial owner’s broker, dealer, commercial bank, trust company or other nominee to the Exchange Agent at the addresses set forth on the back cover of this Offering Circular and Disclosure Statement and in the Letter of Transmittal. We will pay the Exchange Agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection therewith.

Innisfree M&A Incorporated has been appointed as Information Agent for the Exchange Offers, and will receive customary compensation for its services. We will also reimburse the Information Agent for its reasonable out-of-pocket expenses. Questions concerning tender procedures and requests for additional copies of this Offering Circular and Disclosure Statement, the Letter of Transmittal or the notices of guaranteed delivery should be directed to the Information Agent at the address and telephone numbers as set forth on the back cover page of this Offering Circular and Disclosure Statement. You may also contact your broker, dealer, commercial bank or trust company for assistance concerning the Exchange Offers.

We have retained The Blackstone Group L.P. (“Blackstone”) as our financial advisor in connection with the Restructuring Transactions. Blackstone will receive customary fees and indemnification for its services. Blackstone has not, however, been retained to and is not soliciting acceptances of the Exchange Offers or making any recommendation with respect thereto.

We are paying fees to Citibank, N.A. and Credit Suisse First Boston, in their capacity as Mirant Bank Agents, as well as the fees and expenses of Shearman & Sterling (“Shearman”), the Mirant Bank Lenders’ legal counsel, FTI Consulting, Inc. (“FTI”), their financial advisor, and PA Consulting Group (“PA” and, together with FTI, the “Mirant Bank Consultants”), their energy industry consultant, in connection with the Restructuring Transactions.

We are also paying the fees and expenses of Chanin Capital Partners, which is serving as financial advisor, and Andrews & Kurth, L.L.P., which is serving as legal counsel to an ad hoc committee of

An ad hoc committee of MAG bondholders has retained, and we are also paying the fees and expenses of, Houlihan Lokey Howard & Zukin Financial Advisors, Inc. as its financial advisor and Cadwalader, Wickersham & Taft as its legal counsel with respect to the Restructuring Transactions.

We will pay the reasonable and customary fees and reasonable out-of-pocket expenses of the Exchange Agent, the New Secured Notes Trustee and the Information Agent, and legal, accounting, and related fees and expenses. We may also pay brokerage houses and other custodians, nominees and fiduciaries their reasonable out-of-pocket expenses incurred in forwarding copies of this Offering Circular and Disclosure Statement and related documents to the beneficial owners of the Exchange Offer Securities and in handling or forwarding tenders for exchange. We will not, however, make any payments to brokers, dealers or other persons soliciting acceptances of the Exchange Offers.

Additionally, we will pay all transfer taxes, if any, applicable to the exchange of Exchange Offer Securities pursuant to the Exchange Offers. If, however, New Secured Notes are to be issued in the name of any person other than the registered holder of the Exchange Offer Securities exchanged therefor or if for Exchange Offer Securities that are registered in the name of any person other than the person signing the Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of Exchange Offer Securities pursuant to the Exchange Offers, then the amount of any such transfer taxes imposed on the registered holder or any other persons will be payable by the Noteholder that are exchanged. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the Letter of Transmittal, the amount of such transfer taxes will be billed directly to such holder of the Exchange Offer Securities that are exchanged.

Completion of the Exchange Offers will have certain consequences to Noteholders who do not exchange their Exchange Offer Securities for New Secured Notes, including, without limitation, that the trading market for unexchanged Exchange Offer Securities could become limited or nonexistent due to the reduction in the amount of the Exchange Offer Securities outstanding after completion of the Exchange Offers, which may adversely affect the market price and price volatility of such Exchange Offer Securities. See “Risk Factors — Consequences of Failure to Exchange.”

Our Board recommends that Noteholders accept the Exchange Offers and vote in favor of the Plan of Reorganization. In making this recommendation, the Board carefully considered among other things the alternatives available to refinance our short-term indebtedness, the risks that various alternatives would pose to our ability to repay our creditors in full and the disruption to our business and related loss of value that could result from a bankruptcy filing without a pre-packaged Plan of Reorganization. After reviewing and testing the Five-Year Projections prepared by our management, the Board concluded that the Five-Year Projections were both reasonable and achievable and that therefore the Restructuring Transactions including the Exchange Offers represented the best alternative available to satisfy all of Mirant’s and its subsidiaries’ obligations in full.

The Board reached its determination to proceed with the Restructuring Transactions only after long and careful consideration of the alternatives available.

At its December 11, 2002 Board Meeting the Board ratified the engagement of financial and legal advisors and established a special committee (the “Special Advisory Committee”) consisting of Messrs. A.W. Dahlberg, A.D. Corell, and James McDonald to monitor and oversee the development of a strategic plan in connection with the restructuring process and to report to the Board. The Board believed that any restructuring should proceed only after a thorough analysis of Mirant’s current financial position and prospects

To that end, senior management of Mirant engaged in a thorough review of Mirant’s business, including operations, financial and other obligations and prospects with a view to determining whether or not Mirant would be able to satisfy its current obligations and, if so, under what circumstances. The review culminated in a five year business plan which is summarized in this Offering Circular and Disclosure Statement under “Five-Year Projections.” See Annex C to the Offering Circular and Disclosure Statement. The five year business plan was reviewed with Mirant’s advisors and at a series of meetings on January 20, February 7 and February 11, with the Special Advisory Committee and by the full Board on February 25, 2003. The Board understood that the five-year business plan contains numerous assumptions and predictions about future events and that there can be no assurance that such assumptions or predictions will prove to be true. In particular, it was noted that the five-year business plan included a significant financial contribution from Mirant’s energy trading operations (at a time when other companies in the energy sector were curtailing or abandoning such operations) and the recognition of significant proceeds from planned asset sales. Nonetheless, after review of the five-year business plan over the course of several meetings, the Special Advisory Committee and the Board concluded that the five year business plan was reasonable and provided a reasonable basis on which to make decisions about the future of Mirant. The Board reconsidered and reaffirmed this view at each of its subsequent meetings including on June 1, 2003.

While the five year business plan is a comprehensive overview which seeks to take into account myriad factors affecting the business of Mirant both positively and negatively, various members of the Board attached particular significance to several salient factors including the following:


	1.	From a financing perspective the energy sector is generally in a trough influenced by, among other things, overcapacity, fallout from the Enron bankruptcy, litigation and administrative proceedings including those arising out of the California energy crisis and Mirant expects the supply/demand aspects of the industry to recover, resulting in increased prices and margins from the current levels.

	2.	Operationally, Mirant has made significant progress during the previous twelve months and the five year business plan does not require significant additional changes to the business from an operations perspective other than its asset sale program.

	3.	Mirant’s exit from certain of its Canadian operations expected to be finalized in July 2003 will significantly reduce Mirant’s need to use its liquidity as collateral for trading positions and permit the redeployment of such liquidity to support other operations.

	4.	There will be a significant upswing in Mirant’s positive cash flow as existing “out-of-the- money” purchase obligations entered into in connection with Mirant’s acquisition of its PEPCO assets expire in years 2004 and 2005.

	5.	The importance to the plan of Mirant’s ability to maintain a stable and ongoing trading business.

Fundamental to the Board’s assessment of restructuring alternatives is a value judgment that, if reasonably possible, it is better to repay creditors in full with interest, rather than to require them to accept consideration other than that for which they bargained. Based on industry and capital market conditions and advice from Mirant’s advisors, the Board believed that under current market conditions, Mirant would not be able to refinance the $1.125 billion of bank debt which matures on July 15, 2003 on an unsecured basis. The Board did believe that it would be able to refinance that debt on a secured basis. However, based on the five year business plan and current market conditions, it was the Board’s business judgment that Mirant would not be able to meet the existing maturity schedule of its other indebtedness coming due in 2004 or 2005, if it granted a first lien on substantially all the assets of its subsidiaries to refinance the Bank Debt maturing in 2003. (As a result of the defaults that gave rise to the Waiver, the lenders under the Mirant Bank Debt would be able to accelerate indebtedness thereunder after the respective grace periods, thus increasing the amount of Mirant Bank Debt that needs to be refinanced.) In arriving at this conclusion, the Board recognized that refinancing market conditions might improve, but if they did not Mirant would be faced with debt maturities without sufficient liquidity sources to meet its obligations after having elevated the priority of some creditors to

the detriment of other similarly situated creditors. While the Board believed it would be inappropriate to advantage certain creditors under circumstances where the five year business plan indicated that remaining creditors would not, with reasonable business certainty, be repaid, the Board has concluded based on the five year business plan that a five year period would allow sufficient time for business conditions to improve and the prospects for a refinancing to improve materially. Accordingly, it concluded that the Restructuring Transactions are appropriate and would provide for remaining creditors to be repaid in full.

The Board also considered the alternative of seeking to reorganize under Chapter 11 of the Bankruptcy Code. An advantage of bankruptcy was that the difficult issues as to whether creditors were being treated fairly in accordance with their priorities would be settled by bankruptcy court order. However, the Board believed that the value of Mirant as an ongoing concern would be impaired in a bankruptcy. In particular, the Board considered the risks to Mirant’s energy trading and marketing business described under “Risk Factors — Risks Related to Our Business”. As a result of such impairment, the Board anticipated that Mirant may not be able to repay its creditors in full in cash but would instead have to convert a substantial part of its debt to equity. The Board also recognized that a bankruptcy (other than the prepackaged Plan of Reorganization) in which creditors were not paid in full would likely substantially reduce value for Mirant’s current equity holders.

For these reasons, the Board believed it was prudent to seek to accomplish the Restructuring Transactions. Creditors including Noteholders, Bank Lenders and MAG Noteholders whose instruments mature or otherwise have a cash claim on Mirant or MAG on or prior to 2006, are being asked to extend their maturities until 2008. The Board considered including $370 million of Mirant’s 5 3/4% Senior Convertible Notes due 2007 in the Exchange Offers and concluded not to do so because the $7.58 conversion price contained in such Notes made it likely, in the Board’s judgment based on the five year business plan, that such Notes would be converted to common stock at or prior to their maturity. In addition, in an effort to reach a consensus with the Mirant Bank Lenders, the Board was persuaded that it was desirable to reduce the total amount of indebtedness participating in the liens on the Collateral.

In formulating the Restructuring Transactions, the Board determined to offer consideration only to those creditors who were being asked to change the terms of their existing debt obligation. It is the Board’s premise, based on the five year business plan, that the remaining creditors of Mirant and MAG should be paid in full in accordance with the terms of their agreements including, but not limited to, cash interest at the full contract rate during the life of their respective instruments. The Board appreciates that if there is a default which results in a bankruptcy while the debt issued in the Restructuring Transactions remains outstanding, the newly secured creditors would have repayment priority over the remaining unsecured creditors not being invited to participate in the Restructuring Transactions. However, as a matter of business judgment the Board believes that there is a greater risk that such creditors would not be paid in full if Mirant and its subsidiaries were to seek protection under Chapter 11 today than if the Restructuring Transactions were to be consummated. The Board also noted that these remaining creditors at Mirant and MAG are unsecured and did not bargain for and do not have contractual provisions which restrain the Restructuring Transactions.

In considering whether to solicit acceptances of the prepackaged Plan of Reorganization, the Board was aware that under the terms of the existing credit facilities, unanimous consent of the bank lenders within a credit facility is necessary in order to extend the maturity date of such facility. Certain Mirant Bank Lenders entitled to vote on the Restructuring Transactions may be motivated by their holdings of other Mirant or MAG securities or for other institutional considerations to vote against the Restructuring Transactions even though a preponderance of Mirant Bank Lenders may be in favor of them. Similarly, to be comfortably viable, the five year business plan contemplates that the maturities of 85% of the Exchange Offer Securities are extended to 2008. Accordingly, if Mirant receives sufficient votes in favor of the prepackaged Plan of Reorganization from either the Noteholders or the Mirant Bank Lenders, but not sufficient acceptances or agreements to consummate the Restructuring Transactions pursuant to the Out-of-Court Alternative, the Board believes it would preserve greater value for all stakeholders to seek to implement the Plan of Reorganization (including if necessary by utilizing the “cramdown” provisions of section 1129(b)(2)(B)(i) of the Bankruptcy Code) rather than to pursue a traditional bankruptcy. If the Restructuring Transactions cannot be accomplished because sufficient creditors do not accept them to implement either the Out-of-Court

The Board has been advised by Blackstone, Mirant’s financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP and White & Case, Mirant’s legal counsel. Blackstone was not retained to and has not delivered any opinion relating to the fairness of the Restructuring Transactions nor the solvency of Mirant or any of its subsidiaries, nor was Blackstone retained to and is not soliciting acceptances of the Exchange Offers or making any recommendation with respect thereto.

We will issue the New Secured Notes under an Indenture (the “New Secured Notes Indenture”) between a trustee to be appointed by the Company (the “New Secured Notes Trustee”) and the Company. The terms of the New Secured Notes include, but are not limited to, those made part of the New Secured Notes Indenture by reference to the Trust Indenture Act of 1939 (the “Trust Indenture Act”). Terms used in this description that are not defined herein have the meanings ascribed thereto in the New Secured Notes Indenture. In this description, the word “Company” refers only to Mirant Corporation and not to any of its subsidiaries.

The following description is only a summary of the material provisions of the New Secured Notes Indenture. We urge you to read the New Secured Notes Indenture because they, not this description, defines your rights as holders of the New Secured Notes. You may request copies of the New Secured Notes Indenture at our address set forth under the heading “Where You Can Find More Information.”

The New Secured Notes are substantially identical to the Exchange Offer Securities, except for the following material differences:


	•	the New Secured Notes will mature on July 15, 2008, compared to 2004 for the Senior Notes and 2021 for the Convertible Debentures, the latter of which have an initial put right on June 15, 2004;

	•	interest on the New Secured Notes will accrue at the annual rate of 7.5% and will be payable semiannually in arrears on June 15 and December 15, commencing on December 15, 2003;

	•	our obligations under the New Secured Notes, subject to certain limitations, will be secured by Collateral. The Collateral will be shared equally and ratably with our lenders under the Mirant Secured Credit Facility, lenders under the MAG Secured Credit Facility, the holders of the New MAG Notes and holders of certain future indebtedness that the Company or MAG may enter into from time to time;

	•	the New Secured Notes Indenture contains certain additional covenants relating to the Collateral and the security agreements;

	•	unlike the Convertible Debentures, the New Secured Notes will not be convertible; and

	•	unlike the Convertible Debentures, holders of New Secured Notes will not have the right to put the New Secured Notes to the Company on specified dates or at all.

The Company may issue New Secured Notes with up to a maximum aggregate principal amount of $867 million. The Company will issue the New Secured Notes in denominations of $1,000 and any integral multiple of $1,000. The New Secured Notes will mature on July 15, 2008.

Interest on the New Secured Notes will accrue at the annual rate of 7.5% and will be payable semiannually in arrears on June 15 and December 15, commencing on December 15, 2003. We will make each interest payment to the holders of record of the New Secured Notes on the immediately preceding June 1 and December 1. Interest on the New Secured Notes will accrue from the date of original issuance. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

The Company may redeem, at its option, at any time or from time to time, all or a part of the New Secured Notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest on the New Secured Notes redeemed, to the applicable redemption date, if redeemed during the twelve-month period beginning on

If less than all of the New Secured Notes are to be redeemed at any time, the New Secured Notes Trustee will select New Secured Notes for redemption as follows:


	• if the New Secured Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the notes are listed; or

	• if the New Secured Notes are not listed on any national securities exchange, on a pro rata basis, by lot or by such method as the New Secured Notes Trustee deems fair and appropriate.

No New Secured Notes of $1,000 or less can be redeemed in part. Notices of redemption will be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each holder of New Secured Notes to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the New Secured Notes or a satisfaction and discharge of the New Secured Notes Indenture. Notices of redemption may not be conditional.

If any New Secured Note is to be redeemed in part only, the notice of redemption that relates to that New Secured Note will state the portion of the principal amount of that New Secured Note that is to be redeemed. A new New Secured Note in principal amount equal to the unredeemed portion of the original New Secured Note will be issued in the name of the holder of New Secured Notes upon cancellation of the original New Secured Note. New Secured Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on New Secured Notes or portions of them called for redemption.

The New Secured Notes will be senior to our existing and future subordinated indebtedness, effectively subordinated to the outstanding indebtedness and other liabilities of our Non-Grantor Subsidiaries, effectively senior, to the extent of the value of the Collateral, to our unsecured debt and the unsecured debt of our Grantor Subsidiaries and pari passu in right of payment with our other senior secured debt and the senior secured debt of our Grantor Subsidiaries. Any Exchange Offer Securities not tendered in the Exchange Offers will be effectively junior to the New Secured Notes to the extent of the value of the Collateral.

The New Secured Notes will be secured by first priority liens granted by our Grantor Subsidiaries on the Collateral. The first priority liens will be shared equally and ratably with the other Secured Parties. See “Description of the Collateral and Intercreditor Arrangements.”

Except as otherwise set forth under “— Defeasance” below, for so long as any New Secured Notes remain outstanding or any amount remains unpaid on any of the New Secured Notes, the Company will comply with the terms of the covenants set forth below.

The Company will duly and punctually pay the principal of and interest on the New Secured Notes in accordance with the terms of the New Secured Notes and the New Secured Notes Indenture.

The Company will maintain in the Borough of Manhattan, The City of New York, an office or agency of a Paying Agent where the New Secured Notes may be paid and notices and demands to or upon the Company in respect of the New Secured Notes and the New Secured Notes Indenture may be served and, if New Secured Notes in certificated form have been issued, an office or agency of a Security Registrar where New Secured Notes may be surrendered for registration of transfer and exchange. The Company will give prompt written notice to the New Secured Notes Trustee of the location, and any change in the location, of any such office or agency. If at any time the Company fails to maintain any required office or agency or shall fails to furnish the New Secured Notes Trustee with the address thereof, all presentations, surrenders, notices and demands may be served at the office of the New Secured Notes Trustee.

The Company and the New Secured Notes Trustee will execute and deliver all such documents, instruments and agreements and do all such other acts and things as may be reasonably required to enable the New Secured Notes Trustee to exercise and enforce its rights under the New Secured Notes Indenture and under the documents, instruments and agreements required under the New Secured Notes Indenture and to carry out the intent of the New Secured Notes Indenture.

Nothing contained in the New Secured Notes Indenture will prevent the Company from consolidating with or merging into another corporation or conveying, transferring or leasing its properties and assets substantially as an entirety to any person, provided that (a) the successor entity assumes the Company’s applicable obligations on the New Secured Notes and (b) immediately after giving effect to such transaction no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing.

Nothing contained in the New Secured Notes Indenture in any way restricts or prevents the Company or any subsidiary of the Company from incurring, any indebtedness; provided that the Company shall not issue, assume or guarantee any notes, bonds, debentures or other similar evidences of indebtedness, in each case for money borrowed (“Debt”), secured by a mortgage, lien, pledge, security interest or other encumbrance (“Lien”) upon any non-cash assets of the Company; provided, however, that the term Lien shall not mean any easements, rights-of-way, restrictions and other similar encumbrances and encumbrances consisting of zoning restrictions, leases, subleases, licenses, sublicenses, restrictions on the use of property or defects in the title thereto. The foregoing restriction on Liens will not, however, apply to (collectively, “Permitted Liens”):


	(a) Liens in existence on the date of original issue of the New Secured Notes;

	(b) (i) any Lien created or arising over any property which is acquired, constructed or created by the Company, but only if (A) such Lien secures only principal amounts (not exceeding the cost of such acquisition, construction or creation) raised for the purposes of such acquisition, construction or creation, together with any costs, expenses, interest and fees incurred in relation thereto or a guarantee given in respect thereof, (B) such Lien is created or arises on or before 90 days after the completion of such acquisition, construction or creation and (C) such Lien is confined solely to the property so acquired, constructed or created; or (ii) any Lien to secure indebtedness for borrowed money incurred in connection with a specifically identifiable project where the Lien relates to a property (including, without limitation, shares or other rights of ownership in the entity(ies) which own such property or project)


	involved in such project and acquired by the Company after the date of original issue of the New Secured Notes and the recourse of the creditors in respect of such indebtedness is limited to any or all of such project and property (including as aforesaid);

	(c) any Lien securing amounts not more than 90 days overdue or otherwise being contested in good faith;

	(d) (i) rights of financial institutions to offset credit balances in connection with the operation of cash management programs established for the benefit of the Company or in connection with the issuance of letters of credit for the benefit of the Company; (ii) any Lien securing indebtedness of the Company for borrowed money incurred in connection with the financing of accounts receivable; (iii) any Lien incurred or deposits made in the ordinary course of business, including, but not limited to, (A) any mechanics’, materialmen’s, carriers’, workmen’s, vendors’ or other like Liens and (B) any Liens securing amounts in connection with workers’ compensation, unemployment insurance and other types of social security; (iv) any Lien upon specific items of inventory or other goods and proceeds of the Company securing obligations of the Company in respect of bankers’ acceptances issued or created for the account of such person to facilitate the purchase, shipment or storage of such inventory or other goods; (v) any Lien incurred or deposits made securing the performance of tenders, bids, leases, trade contracts (other than for borrowed money), statutory obligations, surety bonds, appeal bonds, government contracts, performance bonds, return-of-money bonds and other obligations of like nature incurred in the ordinary course of business; (iv) any Lien created by the Company under or in connection with or arising out of any pooling and settlement agreements or pooling and settlement arrangements of the electricity industry or any transactions or arrangements entered into in connection with the hedging or management of risks relating to the electricity industry; (vii) any Lien constituted by a right of set off or right over a margin call account or any form of cash or cash collateral or any similar arrangement for obligations incurred in respect of the hedging or management of risks under transactions involving any currency or interest rate swap, cap or collar arrangements, forward exchange transaction, option, warrant, forward rate agreement, futures contract or other derivative instrument of any kind; (viii) any Lien arising out of title retention or like provisions in connection with the purchase of goods and equipment in the ordinary course of business; and (ix) any Lien securing reimbursement obligations under letters of credit, guaranties and other forms of credit enhancement given in connection with the purchase of goods and equipment in the ordinary course of business;

	(e) Liens in favor of the Company;

	(f) (i) Liens on any property or assets acquired from a corporation which is merged with or into the Company, or any Liens on the property or assets of any corporation or other entity existing at the time such corporation or other entity becomes a subsidiary of the Company and, in either such case, is not created in anticipation of any such transaction (unless such Lien was created to secure or provide for the payment of any part of the purchase price of such corporation); and (ii) any Lien on any property or assets existing at the time of acquisition thereof and which is not created in anticipation of such acquisition (unless such Lien was created to secure or provide for the payment of any part of the purchase price of such property or assets);

	(g) Liens required by any contract or statute in order to permit the Company to perform any contract or subcontract made by it with or at the request of a governmental entity or any department, agency or instrumentality thereof, or to secure partial, progress, advance or any other payments by the Company to such governmental unit pursuant to the provisions of any contract or statute; (ii) any Lien securing industrial revenue, development or similar bonds issued by or for the benefit of the Company, provided that such industrial revenue, development or similar bonds are nonrecourse to the Company; and (iii) any Lien securing taxes or assessments or other applicable governmental charges or levies;

	(h) (i) any Lien which arises pursuant to any order of attachment, distraint or similar legal process arising in connection with court proceedings and any Lien which secures the reimbursement obligation for any bond obtained in connection with an appeal taken in any court proceeding, so long as the execution or other enforcement of such Lien arising pursuant to such legal process is effectively stayed


	and the claims secured thereby are being contested in good faith and, if appropriate, by appropriate legal proceedings, or any Lien in favor of a plaintiff or defendant in any action before a court or tribunal as security for costs and/or expenses; or (ii) any Lien arising by operation of law or by order of a court or tribunal or any Lien arising by an agreement of similar effect, including, without limitation, judgment Liens; or

	(i) any extension, renewal or replacement (or successive extensions, renewals or replacements), as a whole or in part, of any Liens referred to in the foregoing clauses, for amounts not exceeding the principal amount of the Debt secured by the Lien so extended, renewed or replaced, provided that such extension, renewal or replacement Lien is limited to all or a part of the same property or assets that were covered by the Lien extended, renewed or replaced (plus improvements on such property).

Notwithstanding the foregoing, the Company may create or permit to subsist Liens over any property, shares and/or stock so long as the aggregate amount of Debt secured by all such Liens (excluding therefrom the amount of Debt secured by Liens set forth in clauses (a) through (i), inclusive, above) does not exceed 10% of the consolidated net tangible assets of the Company and its subsidiaries on a consolidated basis.

Consolidated Net Tangible Assets is defined in the New Secured Notes Indenture as the total of all assets (including revaluations thereof as a result of commercial appraisals, price level restatement or otherwise) appearing on a consolidated balance sheet of the Company, net of applicable reserves and deductions, but excluding goodwill, trade names, trademarks, patents, unamortized debt discount and all other like intangible assets (which term shall not be construed to include such revaluations), less the aggregate of the consolidated current liabilities of the Company appearing on such balance sheet.

Neither the Company nor any subsidiary of the Company is permitted to take or omit to take any action that would materially impair the security interest with respect to the Collateral for the benefit of the New Secured Notes Trustee and the holders of the New Secured Notes, and neither the Company nor any subsidiary is permitted to grant to any person other than the other Secured Parties, any interest whatsoever in any of the Collateral; provided, however, that the Company and such subsidiaries may take any such actions and grant any such interests for the benefit of the other beneficiaries to the extent permitted under the Intercreditor Agreement (as defined below).

Neither the Company nor any subsidiary of the Company is permitted to amend, waive or otherwise modify, or permit or consent to any amendment, waiver or other modification of the security agreements in any way that would be adverse to the holders of the New Secured Notes. Notwithstanding the foregoing, the security agreement may be amended, waived or otherwise modified in accordance with the terms of the Intercreditor Agreement.

An Event of Default with respect to the New Secured Notes is defined in the New Secured Notes Indenture as being:


	(a) default for 30 days in payment of any interest on the New Secured Notes;

	(b) default in payment of principal of the New Secured Notes;

	(c) material default in the performance, or material breach, of any covenant or obligation of the Company in the New Secured Notes Indenture and continuance of such material default or breach for a period of 60 days after written notice is given to the Company by the New Secured Notes Trustee or to the Company and the New Secured Notes Trustee by the holders of at least 66 2/3% in aggregate principal amount of the New Secured Notes;


	(d) default in the payment of the principal of any bond, debenture, note or other evidence of indebtedness, in each case for money borrowed, or in the payment of principal under any mortgage, indenture, fiscal agency agreement or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed, of the Company which default for payment of principal is in an aggregate principal amount exceeding $50,000,000 (or its equivalent in any other currency or currencies) when such indebtedness becomes due and payable (whether at maturity, upon redemption or acceleration or otherwise), if such default shall continue unremedied or unwaived for more than 30 Business Days and the time for payment of such amount has not been expressly extended; and

	(e) the failure of the Company generally to pay its debts as they become due, or the admission in writing of its inability to pay its debts generally, or the making of a general assignment for the benefit of its creditors, or the institution of any proceeding by or against the Company (other than any such proceeding brought against the Company that is dismissed within 180 days from the commencement thereof) seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition (in each case, other than a solvent liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition) of it or its debts under any law relating to bankruptcy, insolvency, reorganization, moratorium or relief of debtors, or seeking the entry of an order for relief or appointment of an administrator, receiver, fiscal agent, intervenor or other similar official for it or for any substantial part of its property, or the taking of any action by the Company to authorize any of the actions set forth in this subparagraph (e).

If an Event of Default with respect to the New Secured Notes shall occur and be continuing, either the New Secured Notes Trustee or the holders of at least 33 1/3% in aggregate principal amount of the New Secured Notes may declare the principal amount of the New Secured Notes, and any interest accrued thereon, to be due and payable immediately. At any time after such declaration of acceleration has been made, but before a judgment or decree for payment of money has been obtained, if all Events of Default have been cured (other than the nonpayment of principal of the New Secured Notes which has become due solely by reason of such declaration of acceleration) then such declaration of acceleration shall be automatically annulled and rescinded.

No holder of the New Secured Notes shall have any right to institute any proceeding, judicial or otherwise, with respect to the New Secured Notes Indenture, or for the appointment of a receiver or New Secured Notes Trustee, or for any other remedy thereunder, unless (i) such holder has previously given written notice to the New Secured Notes Trustee of a continuing Event of Default with respect to the New Secured Notes, (ii) the holders of not less than 33 1/3% in principal amount of the New Secured Notes shall have made written request to the New Secured Notes Trustee to institute proceedings in respect of such Event of Default in its own name as New Secured Notes Trustee, (iii) such holder or holders have offered the New Secured Notes Trustee indemnity satisfactory to the New Secured Notes Trustee against the costs, expenses and liabilities to be incurred in compliance with such request, (iv) the New Secured Notes Trustee, for 60 days after its receipt of such notice, request and offer of indemnity, has failed to institute any such proceeding and (v) no instructions inconsistent with such written request has been given to the New Secured Notes Trustee during such 60-day period by the holders of a majority in principal amount of the outstanding New Secured Notes.

The Company, at its option, (i) will be discharged from any and all obligations in respect of the New Secured Notes (except in each case for the obligations to register the transfer or exchange of such New Secured Notes, replace stolen, lost or mutilated New Secured Notes, maintain paying agencies and hold moneys for payment in trust) or (ii) need not comply with certain covenants of the New Secured Notes Indenture with respect to the New Secured Notes described under “ — Consolidation, Merger, Conveyance, Sale or Lease,” and “ — Limitation on Liens” in each case, if the Company irrevocably deposits with the New Secured Notes Trustee, in trust, (i) money or (ii) (A) U.S. Government Obligations which through the payment of interest and principal in respect thereof in accordance with their terms will provide money in an

amount, or (B) a combination thereof, in each case sufficient to pay and discharge the principal and interest on the outstanding New Secured Notes on the dates such payments are due in accordance with the terms of such New Secured Notes (or if the Company has designated a redemption date pursuant to the final sentence of this paragraph, to and including the redemption date so designated by the Company), and no Event of Default or event which with notice or lapse of time would become an Event of Default (including by reason of such deposit) with respect to the New Secured Notes shall have occurred and be continuing on the date of such deposit. To exercise any such option, the Company is required to deliver to the New Secured Notes Trustee (x) an opinion of counsel (who may be counsel to the Company) to the effect that the holders will not recognize income, gain or loss for federal income tax purposes as a result of such deposit, defeasance and discharge, which in the case of (a) must be based on a change in law or a ruling by the U.S. Internal Revenue Service, and (y) an Officers’ Certificate as to compliance with all conditions precedent provided for in the New Secured Notes Indenture relating to the satisfaction and discharge of the New Secured Notes. If the Company shall wish to deposit or cause to be deposited money or U.S. Government Obligations to pay or discharge the principal of and interest, if any, on the outstanding New Secured Notes to and including the Redemption Date on which all of the outstanding New Secured Notes are to be redeemed, such Redemption Date shall be irrevocably designated by a Board Resolution delivered to the New Secured Notes Trustee on or prior to the date of deposit of such money or U.S. Government Obligations, and such Board Resolution shall be accompanied by an irrevocable Company Request that the New Secured Notes Trustee give notice of such redemption in the name and at the expense of the Company not less than 15 nor more than 30 days prior to such Redemption Date in accordance with the New Secured Notes Indenture.

Except for modifications which do not adversely affect the rights of any holder of New Secured Notes, the New Secured Notes Indenture, and the Security Agreement, the rights of the holders of New Secured Notes may be modified by the Company only with the consent of the holders of not less than a majority in aggregate principal amount of the outstanding New Secured Notes but no modification altering the terms of payment of principal or interest, changing the place or medium of payment of principal or interest, impairing the rights of holders to institute suit for payment, reducing the percentage required for modification in a manner adverse to the holders of New Secured Notes, releasing the security interest granted in favor of the holders of the New Secured Notes in the Collateral other than pursuant to the terms of the security agreements, make any change in the security agreements or any provision of the New Secured Notes Indenture relating to the Collateral that would adversely affect the holders of the New Secured Notes other than pursuant to the terms of the security agreements, or reduce the price payable upon the redemption of any New Secured Notes or change the time at which any New Secured Notes may be redeemed, as described under “— Optional Redemption,” will be effective against any holder without his, her, or its consent.

We will initially issue the New Secured Notes in the form of one or more global notes (the “Global Notes”). The Global Notes will be deposited with, or on behalf of, DTC and registered in the name of DTC or its nominee. Except as set forth below, the Global Notes may be transferred, in whole and not in part, only to DTC or a nominee of DTC. You may hold your beneficial interests in a Global Note directly through DTC if you have an account with DTC or indirectly through organizations which have accounts with DTC.

DTC has advised the Company as follows: DTC is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and “a clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities of institutions that have accounts with DTC (“participants”) and to facilitate the clearance and settlement of securities transactions among its participants in such securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. DTC’s participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Access to DTC’s book-entry system is also available to others such as banks, brokers, dealers and trust

The Company expects that pursuant to procedures established by DTC, upon the deposit of a Global Note with DTC, DTC will credit, on its book-entry registration and transfer system, the principal amount of New Secured Notes represented by such Global Note to the accounts of participants. Ownership of beneficial interests in a Global Note will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interests in a Global Note will be shown on, and the transfer of those ownership interests will be effected only through, records maintained by DTC (with respect to participants’ interests), the participants and the indirect participants (with respect to the owners of beneficial interests in the Global Note other than participants). The laws of some jurisdictions may require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and laws may impair the ability to transfer or pledge beneficial interests in a Global Note.

So long as DTC, or its nominee, is the registered holder and owner of the Global Notes, DTC or such nominee, as the case may be, will be considered the sole legal owner and holder of any related Notes evidenced by the Global Notes for all purposes of such New Secured Notes and the New Secured Notes Indenture. Except as set forth below, as an owner of a beneficial interest in a Global Note, you will not be entitled to have the New Secured Notes represented by such Global Note registered in your name, will not receive or be entitled to receive physical delivery of certificated Notes and will not be considered to be the owner or holder of any Notes under such Global Note. We understand that under existing industry practice, in the event an owner of a beneficial interest in a Global Note desires to take any action that DTC, as the holder of such Global Note, is entitled to take, DTC would authorize the participants to take such action, and the participants would authorize beneficial owners owning through such participants to take such action or would otherwise act upon the instructions of beneficial owners owning through them.

We will make payments of principal of, premium, if any, and interest on New Secured Notes represented by the Global Notes registered in the name of and held by DTC or its nominee to DTC or its nominee, as the case may be, as the registered owner and holder of the Global Notes.

We expect that DTC or its nominee, upon receipt of any payment of principal of, premium, if any, or interest on a Global Note will credit participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Note as shown on the records of DTC or its nominee. We also expect that payments by participants or indirect participants to owners of beneficial interests in a Global Note held through such participants or indirect participants will be governed by standing instructions and customary practices and will be the responsibility of such participants or indirect participants. We will not have any responsibility or liability for any aspect of the record relating to, or payments made on account of, beneficial ownership interests in the Global Notes for any New Note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests or for other aspects of the relationship between the DTC and its participants or indirect participants or the relationship between such participants or indirect participants and the owners of beneficial interests in a Global Note owning through such participants.

Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Notes among participants of DTC, it is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither the New Secured Notes Trustee nor the Company will have any responsibility or liability for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

A Global Note is exchangeable for New Secured Notes in registered certificated form if (i) DTC notifies the Company that it is unwilling or unable to continue as clearing agency for the Global Note or has ceased to be a clearing agency registered under the Exchange Act and the Company thereupon fails to appoint a successor clearing agency within 90 days, (ii) the Company in its sole discretion elects to cause the issuance of definitive certificated New Secured Notes or (iii) there has occurred and is continuing an Event of Default or

any event which after notice or lapse of time or both would be an Event of Default under the New Secured Notes. In addition, beneficial interests in a Global Note may be exchanged for certificated New Secured Notes upon request but only upon at least 20 days’ prior written notice given to the New Secured Notes Trustee by or on behalf of DTC in accordance with customary procedures. In all cases certificated New Secured Notes delivered in exchange for any Global Note or beneficial interest therein will be registered in the names, and issued in the authorized denominations requested by or on behalf of, the clearing agency (in accordance with its customary procedures).

The New Secured Notes Indenture requires us to make payments in respect of the applicable New Secured Notes (including principal, premium and interest) by wire transfer of immediately available funds to the U.S. dollar accounts with banks in the U.S. specified by the holders thereof or, if no such account is specified, by mailing a check to each such holder’s registered address.

The Company will, prior to consummation of the Exchange Offers, appoint the New Secured Notes Trustee which shall be eligible for trusteeship under section 310 of the Trust Indenture Act to act as New Secured Notes Trustee under the New Secured Notes Indenture and as initial Security Registrar and Paying Agent with regard to the New Secured Notes.

No director, officer, employee, incorporator or stockholder of the Company will have any liability for any obligations of the Company under the New Secured Notes or the New Secured Notes Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each holder of the New Secured Notes by accepting a New Secured Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the New Secured Notes. Such waiver and release may not be effective to waive liabilities under the U.S. Federal securities laws, and it is the view of the SEC that such a waiver is against public policy.

The New Secured Notes Indenture and the New Secured Notes will be governed by, and construed in accordance with, the laws of the State of New York without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby.

This Exchange Offer is subject to Mirant’s concurrent entry into the Mirant Secured Credit Facility and MAG’s concurrent entry into the MAG Secured Credit Facility. The Restructured Credit Facilities will be secured by a first priority security interest in the Collateral, which will be shared equally and ratably with the other Secured Parties as set forth in the Intercreditor Agreement. See “Description of the Collateral and Intercreditor Arrangements.”

The Mirant Secured Credit Facility is expected to consist of a $2.05 billion term loan and a $1.1 billion revolving letter of credit and working capital facility, both of which will mature on the fifth anniversary of the closing date. The MAG Secured Credit Facility will consist of a $300 million term loan. Proceeds from the term loans under the Restructured Credit Facilities will be used to repay loans outstanding under the Mirant Bank Debt, the MAG Bank Debt, MAG’s existing credit facilities, the Turbine Facility and the Commodity Prepay Facility.

Interest on the outstanding loans under the Restructured Credit Facilities is expected to accrue at a rate per annum equal to LIBOR plus 4%; provided that if on or prior to the third anniversary of the closing date the aggregate outstanding principal amount of the Restructured Credit Facilities are not repaid or reduced by $300 million, interest on the outstanding loans under the Restructured Credit Facilities is expected to accrue at a rate per annum equal to LIBOR plus 4.5%. The letter of credit fee is expected to be equal to 4%; provided that if on or prior to the third anniversary of the closing date the aggregate outstanding principal amount of the Restructured Credit Facilities are not repaid or reduced by $300 million, the letter of credit fee is expected to be equal to 4.5%. An upfront fee of 1% is expected to be paid on the closing date to each lender under the Restructured Credit Facilities on such lender’s outstanding and unused commitments under the Restructured Credit Facilities. An additional fee of 1% is expected to be paid on the third anniversary of the closing date to each lender under the Restructured Credit Facilities on such lender’s outstanding and unused commitments under the Restructured Credit Facilities on such date if on or prior to the third anniversary of the closing date the aggregate outstanding principal amount of the Restructured Credit Facilities are not repaid or reduced by $300 million. An unused commitment fee of 50 basis points per annum is expected to be paid on the unused portion of each lender’s share of Mirant’s revolving letter of credit and working capital facility.

The Restructured Credit Facilities contain representations and warranties and affirmative and negative covenants that are usual and customary for restructuring transactions of this type. These representations, warranties and covenants will be more restrictive than those pertaining to our currently outstanding debt. In particular, the Restructured Credit Facilities include, without limitation, restrictions on our ability to incur liens and debt, enter into sale/leaseback transactions, pay dividends or repurchase shares of capital stock, make loans, investments or capital expenditures, prepay, redeem or repurchase debt, enter into mergers, consolidations, acquisitions or joint ventures, sell assets, acquire facilities or other businesses, change the nature of our business, amend organizational documents, debt documents and other material agreements and enter into certain speculative transactions relating to our trading business. The Restructured Credit Facilities also include financial covenants requiring the maintenance of a minimum interest coverage ratio and a maximum leverage ratio.

The outstanding loans under the Restructured Credit Facilities will be subject to mandatory prepayments in the following amounts: (i) 100% of net cash proceeds of all asset sales or other dispositions of property of Mirant or any of its subsidiaries in excess of $561 million, (ii) 100% of net cash proceeds of insurance proceeds to the extent such insurance proceeds were not used to restore or replace the assets which suffered the casualty, (iii) 100% of net cash proceeds from issuance of any additional indebtedness by Mirant or any of its subsidiaries (other than refinancing existing indebtedness, project finance indebtedness or purchase money indebtedness) or 50% of net cash proceeds from any issuance of equity by Mirant, other than any such proceeds used to retire certain existing capital markets debt of Mirant and MAG. Proceeds from such mandatory prepayments will be applied to repay on a pro rata basis the term loans outstanding under the Restructured Credit Facilities; provided that prepayments from net cash proceeds of asset sales or other

The Restructured Credit Facilities contain events of default usual for restructuring transactions of this type, including, without limitation, payment defaults, incorrect representations and warranties, breach of covenants, payment default and cross-acceleration, bankruptcy and failure of the security documents to be in full force and effect.

For more information regarding the terms of the Restructured Credit Facilities, please see the Summary of Principal Terms and Conditions for the Senior Secured Restructured Credit Facilities of Mirant and MAG attached hereto as Annex A.

Pursuant to the Fiscal Agency Agreement, dated as of July 26, 1999 (as supplemented, the “Fiscal Agency Agreement”), between Mirant Corporation (formerly known as Southern Energy, Inc.), as issuer and Deutsche Bank Trust Company Americas (as successor in interest to Bankers Trust Company), as trustee, we issued two series of our senior notes: (i) the Senior Notes, of which $200 million in principal amount is currently outstanding, which are subject to the Senior Notes Exchange Offer; and (ii) our 7.9% Senior Notes Due 2009 (the “7.9% Notes”), of which $500 million in principal amount is currently outstanding.

The Senior Notes exchanged for the New Secured Notes pursuant to the terms of the Senior Notes Exchange Offer will not be governed by the Fiscal Agency Agreement; instead, the New Secured Notes will be governed by New Secured Notes Indenture. The 7.9% Notes will not be affected by the Senior Notes Exchange Offer and will continue to be governed by the Fiscal Agency Agreement.

Pursuant to an indenture, dated as of October 1, 2000 (as supplemented, the “October 2000 Indenture”) between Mirant Corporation (formerly known as Southern Energy, Inc.), as issuer and Deutsche Bank Trust Company Americas (as successor in interest to Bankers Trust Company), as trustee, we issued $355,670,150 aggregate principal amount of our 6 1/4% Series A Junior Convertible Subordinated Notes due 2030 (the “6 1/4% Junior Convertible Subordinated Notes”) to Mirant Trust I (formerly known as SEI Trust I), a Delaware business trust. The 6 1/4% Junior Convertible Subordinated Notes are the sole assets of Mirant Trust I (the “Trust Property”). On October 2, 2000, Mirant Trust I issued an aggregate amount of 6,900,000 preferred securities having an aggregate liquidation preference of $345 million (the “Trust Preferred Securities”), representing undivided beneficial ownership interests in the Trust Property, of which $345 million in principal amount is currently outstanding.

The 6 1/4% Junior Convertible Subordinated Notes and the Trust Preferred Securities will not be affected by the Exchange Offers and will continue to be governed by the October 2000 Indenture and the amended and restated trust agreement of Mirant Trust I, respectively.

Pursuant to an indenture dated as of May 31, 2001 (the “May 2001 Indenture”), between us, as issuer, and Deutsche Bank Trust Company Americas (as successor in interest to Bankers Trust Company), as trustee, we issued our Convertible Debentures. We currently have $750 million in principal amount of the Convertible Debentures outstanding.

Of the $750 million, approximately $400 million in principal amount of the Convertible Debentures are held as the underlying trust assets of the TIERS Fixed Rate Certificates Trust Series 2001-14 formed pursuant to the Base Trust Agreement, dated as of December 15, 2000, between Structured Products Corp., an indirect wholly-owned subsidiary and affiliate of Salomon Smith Barney Inc., as depositor, and U.S. Bank

The remaining $350 million in principal amount of the Convertible Debentures are the subject of the Convertible Debentures Exchange Offer.

The Convertible Debentures exchanged for New Secured Notes pursuant to the terms of the Convertible Debentures Exchange Offer will not be governed by the May 2001 Indenture; instead, the New Secured Notes will be governed by the New Secured Notes Indenture.

Pursuant to an indenture dated as of July 8, 2002 (the “July 2002 Indenture”) between Deutsche Bank Trust Company Americas, as trustee and us, as issuer, we issued our 5.75% Convertible Senior Notes due 2007 (the “Convertible Notes”). We currently have $370 million in principal amount of the Convertible Notes outstanding.

The Convertible Notes will not be affected by the Exchange Offers and will continue to be governed by the July 2002 Indenture.

Mirant Americas Development Capital, LLC (“MADC”) is party to a warehouse operating lease facility (the “Turbine Facility”). The Turbine Facility initially consisted of a $700 million “true-funding” tranche and a $1.1 billion “treasury-backed” tranche. Pursuant to the transaction, a trust (the “Lessor”) was established for the purpose of owning certain gas turbines, steam turbines, heat recovery generators and other equipment (the “Equipment”). The turbine facility provides that MADC may from time to time purchase the Equipment from the trust by making certain termination payments or upon completion of Equipment the lessor will lease equipment to MADC under a master triple-net lease (the “Lease”). The transaction was structured to provide that Equipment would be added to the Lease on the date of its completion and delivery, and the lease term with respect to such Equipment would commence on such date and would expire 7 1/2 years from the closing. The Lease is intended to qualify as an operating lease for MADC under SFAS No. 13, as amended (including relevant FASB Technical Bulletins and Emerging Issues Task Force Issues).

The Turbine Lease provided for the Lessor to fund the acquisition of the Equipment (i) by issuing Series A1 and A2 Notes (collectively, the “A-Notes”) and Series Bl and B2 Notes (collectively, the “B-Notes”) and (ii) by issuing Series C1 and C2 certificates (collectively, the “Certificates”) in respect of the investments in the Lessor (in an amount equal to approximately 3% of Equipment cost). The $700 million anticipated maximum draw is funded with Series A1 and B1 Notes and C1 Certificates. Series A2 Notes, Series B2 Notes and C2 Certificates were to be issued for all draws in excess of $700 million, to a maximum of $1.1 billion, and were to be collateralized by a posting of collateral in an amount of 105% of amounts outstanding thereunder in the form of cash or short-term United States treasury securities acceptable to the lessor and the holders thereof as and when drawn. The commitment to fund the “true-funding” tranche was reduced to $500 million on December 30, 2002 and further reduced to $231 million on May 29, 2003. The commitment to fund the “treasury-backed” tranche was terminated on April 18, 2003. The amounts outstanding under the Series A1 Notes, the Series B2 Notes and the Series C2 certificates were $221 million at April 18, 2003, of which approximately $198 million was recourse to us pursuant to our guaranty of certain obligations of MADC. Our covenants under such guaranty are substantially the same as the corresponding covenants under our credit facilities. In addition, the participation agreement for the lease includes events of default related to us as guarantor that are substantially the same as the corresponding events of default in our credit facilities. Our obligations under the guaranty are unsecured and exclusive obligations. The participants in the Turbine Lease participated as lenders in connection with the waiver described above.

MAEM and Scarlett Resource Merchant LLC, a Delaware limited liability company (“Scarlett”) entered into an agreement for the forward sale of natural gas. Pursuant to the agreement, MAEM received a prepayment of approximately $219 million in October 2001 in exchange for a series of cash payments based on the value of a set quantity of natural gas based on the market prices for natural gas at the time such payments are made (10% of the quantity in each of October 2002 and October 2003 and 80% for October 2004). Simultaneously with entering into the forward sale transaction, MAEM entered into a natural gas swap with HVB Risk Management Products Inc. (“HVB”) to fix the price of the natural gas on which the payments to Scarlett would be based, so that under the two transactions together, MAEM would make net payments of $25 million in each of October 2002 and October 2003 and $200 million in October 2004. The two facilities are collectively referred to as the “Commodity Prepay Facility.”

We have absolutely and unconditionally guaranteed the full and prompt payment and performance of all obligations, including indemnities, of MAEM under the transaction documents.

Pursuant to an indenture dated as of May 1, 2001 (as supplemented, the “May 2001 Indenture”), between Mirant Americas Generation, LLC (formerly known as Mirant Americas Generation, Inc), as issuer and Bankers Trust Company, as trustee, MAG provided for the issuance from time to time of senior notes in one or more series. Pursuant to the May 2001 Indenture, MAG issued five series of notes: (1) the 7.625% Senior Notes due 2006 (the “7.625% Senior Notes”) issued in principal amount of $500,000,000; (2) 8.3% Senior Notes due 2011 (the “8.3% Senior Notes”) issued in principal amount of $850,000,000; (3) 9.125% Senior Notes due 2031 (the “9.125% Senior Notes”) issued in principal amount of $400,000,000; (4) 7.2% Senior Notes due 2008 (the “7.2% Senior Notes”) issued in principal amount of $300,000,000; and (5) 8.5% Senior Notes due 2021 (the “8.5% Senior Notes”) issued in principal amount of $450,000,000.

The 7.625% Senior Notes exchanged for the New MAG Notes pursuant to the terms of the MAG Exchange Offer will no longer be governed by the May 2001 Indenture; instead, the New MAG Notes will be governed by the New MAG Notes Indenture. The 8.3% Senior Notes, the 9.125% Senior Notes, the 7.2% Senior Notes, and the 8.5% Senior Notes will not be directly affected by the MAG Exchange Offer and will continue to be governed by the May 2001 Indenture.

The following summary of Mirant and MAG’s collateral and intercreditor arrangements is subject to and qualified in its entirety by reference to the detailed provisions of the security agreement, the Intercreditor Agreement and the other agreements relating to the collateral. We urge you to read those agreements and the indenture governing the New Secured Notes because they, and not this description, define your rights as holder of New Secured Notes. Copies of such agreements are available from us upon request.

The Collateral will consist of the following (i) all equity interests and indebtedness owned directly by any of the Grantor Subsidiaries (which pledge, in the case of voting equity interests issued by any first tier foreign subsidiary, will be limited to 65% of such voting equity interests), and (ii) substantially all other tangible and certain intangible assets of each Grantor Subsidiary, including, without limitation, all real property rights (including leaseholds), accounts receivable, inventory, contract rights, equipment, intellectual property, general intangibles, investment property, cash and bank accounts and all proceeds and products of the foregoing unless, in the case of any Grantor Subsidiary, the creation or enforcement of such lien would (x) violate or cause a default under any applicable law or any contractual restriction or (y) require the consent of any third party. In addition, neither account control agreements nor foreign intellectual property filings will be required. Each Grantor Subsidiary will use commercially reasonable efforts to pledge 65% of voting equity interests issued by any first tier foreign subsidiary of such Grantor Subsidiary prior to the Closing Date. In the event any Grantor Subsidiary ceases to be a subsidiary of Mirant as a result of transactions permitted by the Mirant Secured Credit Facility and the MAG Secured Credit Facility, any security interests granted by such Grantor Subsidiary will be automatically released.

Pursuant to the security agreement to be entered into by the Grantor Subsidiaries in favor of the Collateral Agent, the Grantor Subsidiaries will grant a security interest in the Collateral (other than the real property) to secure (x) the obligations of Mirant under the New Secured Notes and the obligations of MAG under the New MAG Notes and (y) the obligations of such Grantor Subsidiaries under their respective secured guaranty of the Mirant Secured Credit Facility and the MAG Secured Credit Facility. The Collateral Agent will be permitted to take enforcement action pursuant to the security agreement only in accordance with the terms of the Intercreditor Agreement.

Pursuant to the mortgages to be entered into by certain Grantors in favor of the Collateral Agent, the Grantor Subsidiaries will grant a security interest in certain real property to secure (x) the obligations of Mirant under the New Secured Notes and the obligations of MAG under the New MAG Notes and (y) the obligations of such Grantor Subsidiaries under its respective secured guaranty of the Mirant Secured Credit Facility and the MAG Secured Credit Facility. The Collateral Agent will be permitted to take enforcement action pursuant to the Mortgages only in accordance with the terms of the Intercreditor Agreement.

The Collateral will be shared among the Secured Parties as provided in an Intercreditor Agreement to be entered into among the New Secured Notes Trustee, the trustee under the New MAG Notes (the “MAG Note Trustee”), the administrative agent under the Mirant Secured Credit Facility, the administrative agent under the MAG Secured Credit Facility, any future agent or trustee under certain future indebtedness that Mirant or MAG may enter into from time to time (the foregoing are collectively referred to as the “Secured Parties”), the Collateral Agent, Mirant and MAG. The Intercreditor Agreement will govern (i) the appointment of the collateral agent as agent for each of the Secured Parties (the Collateral Agent), (ii) the preservation and administration of the Collateral by the Collateral Agent, (iii) the disposition of Collateral and application of Collateral proceeds upon acceleration and foreclosure and (iv) the application of Collateral proceeds upon the occurrence of asset sales and casualty events.

The exercise of remedies following the occurrence of an event of default under the New Secured Notes, the New MAG Notes, the Mirant Secured Credit Facility, the MAG Secured Credit Facility and certain future debt facilities will be governed by the provisions of the Intercreditor Agreement (such event, a “Default

Event”). The Collateral Agent shall provide written notice to Mirant or MAG, as applicable, of the occurrence of a Default Event. If a Default Event shall have occurred and be continuing and Mirant or MAG, as applicable, has been notified by the Collateral Agent of the existence of such Default Event, the Collateral Agent, upon the written request of the Required Lenders, shall be authorized to take any and all actions and to exercise any and all rights, remedies and options available to it under the security documents; provided that upon the occurrence of a Default Event involving the bankruptcy or insolvency of Mirant or MAG, the Collateral Agent will automatically be authorized to take such actions and exercise such rights, remedies and options available to it under the security documents without the written request of the Required Lenders. The Required Lenders will consist of Secured Parties holding at least a majority of the combined exposure of the Secured Parties.

Upon a foreclosure or other exercise of remedies following a Default Event, the proceeds of any sale, disposition or other realization upon all or any portion of the Collateral will be distributed in the following order of priority: (i) first, to the payment of the reasonable and documented out-of-pocket costs and expenses of such sale, disposition or other realization of the Collateral incurred by the Collateral Agent in connection therewith, (ii) second, to the payment of the lenders under the MAG Secured Credit Facility in an amount equal to all unpaid amounts then due and payable under the MAG Secured Credit Facility, (iii) third, to the other Secured Parties, ratably, in an amount equal to all unpaid amounts then due and payable in respect of outstanding secured obligations, and (iv) fourth, to the applicable Grantor Subsidiary or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct, to the extent of any surplus remaining after giving effect to clauses (i) through (iii) immediately above.

We expect that net cash proceeds from asset sales in excess of $561 million shall be distributed in the following order of priority: (i) first, to the payment of the lenders under the MAG Secured Credit Facility an amount equal to all unpaid amounts then due and payable under the MAG Secured Credit Facility, (ii) second, to the payment of the lenders under the Mirant Secured Credit Facility an amount equal to all unpaid amounts then due and payable under the Mirant Secured Credit Facility, and (iii) third, to the applicable Grantor Subsidiary. We expect that net cash proceeds from a casualty event that are not applied to restore or replace the assets which suffered the casualty shall be applied to repay on a pro rata basis, the term loans outstanding under the MAG Secured Credit Facility and the Mirant Secured Credit Facility.

Certain legal matters as to the validity of the New Secured Notes to be issued in the Exchange Offers will be passed upon for us by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York.

MIRANT HAS NOT COMMENCED A CHAPTER 11 CASE, NOR HAS IT TAKEN ANY CORPORATE ACTION AUTHORIZING THE COMMENCEMENT OF SUCH A CASE. IF THE EXCHANGE OFFER CANNOT BE CONSUMMATED, HOWEVER, MIRANT MAY COMMENCE A CHAPTER 11 CASE UNDER THE BANKRUPTCY CODE TO RESTRUCTURE ITS FINANCIAL AFFAIRS. THIS OFFERING CIRCULAR AND DISCLOSURE STATEMENT SOLICITS YOUR ADVANCE ACCEPTANCE OF THE PLAN OF REORGANIZATION, A COPY OF WHICH IS ATTACHED TO THIS OFFERING CIRCULAR AND DISCLOSURE STATEMENT AS APPENDIX I, AND WHICH CONTAINS IMPORTANT INFORMATION RELEVANT TO YOUR DECISION TO ACCEPT THE PLAN OF REORGANIZATION. PLEASE READ THE PLAN OF REORGANIZATION COMPLETELY AND CAREFULLY.

To enhance the likelihood that we will succeed in our restructuring efforts, we have formulated the Plan of Reorganization for our reorganization under Chapter 11 of the Bankruptcy Code. The Plan of Reorganization covers Mirant and three of our subsidiaries: Mirant Americas Energy Marketing, LP, Mirant Americas Development Capital, LLC and MLW Development, LLC, and generally provides the same benefits to Mirant and Noteholders as would the consummation of the Exchange Offers. In the event that sufficient tenders and consents have not been received from Noteholders to permit consummation of the Out-of-Court Alternative, but sufficient Ballots signifying acceptance of the Plan of Reorganization, in the judgment of our boards of directors, are received to confirm the Plan of Reorganization, we may file voluntary petitions under Chapter 11 of the Bankruptcy Code and use such acceptances to seek confirmation of the Plan of Reorganization. If the Plan of Reorganization is confirmed and consummated, all Noteholders would receive the same consideration in exchange for their Exchange Offer Securities as they would have received in the Out-of-Court Alternative, whether or not they vote for acceptance of the Plan of Reorganization.

Set forth below is a glossary of certain terms used in the description of the Plan of Reorganization. To the extent that terms are defined differently in the Glossary and elsewhere in this Offering Circular and Disclosure Statement, for the purposes of this section only, the definitions in this Glossary are controlling. To the extent not defined in this Glossary or otherwise defined in this Offering Circular and Disclosure Statement, capitalized terms used in the description of the Plan of Reorganization have the meanings ascribed to them in Article I of the Plan of Reorganization attached hereto as Appendix I.


		effect or hereafter amended, and as applicable to the Chapter 11 Cases.

*Bar Date*		means the date, if any, set by the Bankruptcy Court as the deadline for filing proofs of claim or interest in the Chapter 11 Cases.

*Blackstone*		means The Blackstone Group, L.P.

*Business Day*		means any day, excluding Saturdays, Sundays or “legal holidays” (as defined in Bankruptcy Rule 9006(a)), on which commercial banks are open for business in New York, New York.

*Cash*		means legal tender of the United States of America or readily marketable direct obligations of, or obligations guaranteed by, the United States of America.

*Causes of Action*		means all claims, rights, actions, causes of action, liabilities, obligations, suits, debts, remedies, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages or judgments, whether known or unknown and whether asserted or unasserted.

*Chapter 11 Cases*		means the cases under Chapter 11 of the Bankruptcy Code commenced by the Debtors.

*Citibank “C” Facility*		means that certain credit facility, dated April 1, 1999, in the aggregate principal amount of $450,000,000, between Southern Energy, Inc. n/k/a Mirant, as borrower, and Citibank N.A., as initial lender and agent, with a maturity date of April 1, 2004, and all related documents, instruments and agreements as they have been or may be amended or supplemented from time to time.

*Citibank “C” Facility Claim*		means a Claim arising under the Citibank “C” Facility.

*Claim*		means (i) any right to payment from a Debtor, whether or not such right is known or unknown, reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, (ii) any right to an equitable remedy for breach of performance if such breach gives rise to a right of payment from a Debtor, whether or not such right to an equitable remedy is known or unknown, reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured or (iii) any right under section 502(h) of the Bankruptcy Code.

*Claims Agent*		means the entity designated by order of the Bankruptcy Court to process proofs of claim.

*Class*		means a category of holders of Claims or Equity Interests, as described in Article II of the Plan of Reorganization.

*Collateral*		means the Assets and the interests of the Subsidiaries in property that will be pledged to and for the benefit of the Secured Parties to secure payment of the obligations under the New Mirant Secured Credit Facility, the New MAG Secured Credit Facility, the New Mirant Indenture, the New MAG Indenture, the New Mirant 7.5% Senior Secured Notes, and the New MAG 7.5% Senior Secured Notes, as such Assets and property interests are identified and as set forth in the Security Documents.


		prior to the Petition Date of their votes with respect to the Plan of Reorganization.

*Distribution Date*		means, with respect to any Claim, (i) the Effective Date, if such Claim is then an Allowed Claim, or (ii) a date that is as soon as reasonably practicable after the date such Claim becomes Allowed, if not Allowed on the Effective Date.

*Effective Date*		means a date selected by the Debtors which shall be a Business Day that is no later than thirty business days after all of the conditions specified in Section 10.2 of the Plan of Reorganization have been satisfied or waived (to the extent waivable).

*Equipment Warehouse Facility*		means (i) the Participation Agreement, dated October 22, 2001, among MADCI, as contract agent and lessee, the MC Equipment Revolver Statutory Trust, State Street Bank and Trust Company of Connecticut, National Association, as trustee, the persons named therein as Note Holders and Certificate Holders and Citibank, N.A. as agent and (ii) the Lease Agreement, dated October 22, 2001, among MC Equipment Revolver Statutory Trust, as lessor, and MADCI, as lessee, and all related documents, instruments and agreements, as they have been or may be amended or supplemented from time to time, which are collectively defined in the first part of this Offering Circular and Disclosure Statement as the “Turbine Facility.”

*Equipment Warehouse Facility Claim*		means a Claim arising under the Equipment Warehouse Facility.

*Equipment Warehouse Facility Guaranty*		means the Guaranty in respect of the Equipment Warehouse Facility, dated October 22, 2001, among Mirant and MC Equipment Revolver Statutory Trust, and all related documents, instruments and agreements, as they have been or may be amended or supplemented from time to time.

*Equipment Warehouse Facility Guaranty Claim*		means a Claim arising under the Equipment Warehouse Facility Guaranty.

*Equity Interest*		means any outstanding ownership interest in any of the Debtors, including without limitation, interests evidenced by common or preferred stock, membership interests and options or other rights to purchase any ownership interest in any of the Debtors.

*Estate*		means the estate of any Debtor created by section 541 of the Bankruptcy Code upon the commencement of the Chapter 11 Cases.

*Exchange Act*		means the Securities Exchange Act of 1934, as amended from time to time, and any successor statutes.

*Fee Application*		means an application for allowance and payment of a Fee Claim (including any Claim for “substantial contribution” pursuant to section 503(b) of the Bankruptcy Code).

*Fee Claim*		means a Claim of a Professional Person.

*Final Order*		means (i) an order or judgment of the Bankruptcy Court or any other court or adjudicative body as to which the time to appeal, petition for certiorari, or move for reargument or rehearing has expired and as to which no appeal, petition for certiorari, or other proceedings for


		reargument or rehearing shall then be pending, or (ii) in the event that an appeal, writ of certiorari, reargument, or rehearing thereof has been sought, such order of the Bankruptcy Court or any other court or adjudicative body shall have been affirmed by the highest court to which such order was appealed, or certiorari has been denied, or from which reargument or rehearing was sought, and the time to take any further appeal, petition for certiorari or move for reargument or rehearing shall have expired; provided, that no order shall fail to be a Final Order solely because of the possibility that a motion pursuant to Rule 60 of the Federal Rules of Civil Procedure or Bankruptcy Rule 9024 may be filed with respect to such order.

*General Unsecured Claims*		means Unsecured Claims, other than Mirant Bank Claims, Mirant Impaired Note Claims, Commodity Prepay Facility Claims, Equipment Warehouse Facility Claims and Securities Litigation Claims.

*Impaired Note Indentures*		means the indentures and agreements pursuant to which the 2.5% Convertible Senior Debentures and 7.4% Senior Notes were issued, to the extent they relate to such securities.

*Intercreditor Agreement*		means that certain intercreditor agreement to be entered into by, among others, Mirant, MAG, certain subsidiaries of Mirant, the Collateral Agent, the New Indenture Trustees and the New Mirant Agents and the New MAG Agent, governing the rights, claims and priority of the Secured Parties with respect to the Collateral.

*Internal Revenue Code*		means the Internal Revenue Code of 1986, as amended, and any applicable rulings, regulations (including temporary and proposed regulations) promulgated thereunder, judicial decisions, notices, announcements, and other releases of the United States Treasury Department or the IRS.

*IRS*		means the United States Internal Revenue Service.

*MADCI*		means Mirant Americas Development Capital, LLC, a Delaware limited liability company, one of the Debtors and Debtors in Possession.

*MAEM*		means Mirant Americas Energy Marketing, LP, a Delaware limited partnership, one of the Debtors and Debtors in Possession.

*MAG*		means Mirant Americas Generation, LLC, a Delaware limited liability company, formerly known as Mirant Americas Generation, Inc., a Delaware corporation.

*Mirant*		means Mirant Corporation, a Delaware corporation, formerly known as Southern Energy, Inc., a Delaware corporation, one of the Debtors and Debtors in Possession.

*Mirant Bank Claims*		means the CSFB 364-day Revolver Claims, the Citibank “C” Facility Claims, the CSFB 4-year Revolver Claims, the Commodity Prepay Facility Guaranty Claims and the Equipment Warehouse Facility Guaranty Claims.

*Mirant Fiscal Agency Agreement*		means the Fiscal Agency Agreement, dated July 26, 1999, between Southern Energy, Inc. n/k/a Mirant, as issuer, and Bankers Trust Company, as Fiscal Agent, transfer agent, registrar and paying agent, as such agreement has been or may be amended or supplemented


		from time to time, which is defined in the first part of this Offering Circular and Disclosure Statement as the “Fiscal Agency Agreement.”

*Mirant Impaired Note Claims*		means the 2.5% Convertible Senior Note Claims and the 7.4% Senior Note Claims.

*Mirant Impaired Notes*		means the 2.5% Convertible Senior Debentures and the 7.4% Senior Notes, which are defined in the first part of this Offering Circular and Disclosure Statement as the “Exchange Offer Securities.”

*MLW*		means MLW Development, LLC, a Delaware limited liability company, one of the Debtors and Debtors in Possession.

*New Constituent Documents*		means the by-laws, certificates of incorporation, partnership agreements, or limited liability company membership agreements, as applicable, for each of the Debtors, as amended and restated as of the Effective Date, among other things, to (i) prohibit the issuance of non-voting equity securities by such Debtor as required by section 1123(a)(6) of the Bankruptcy Code and (ii) otherwise give effect to the provisions of this Plan of Reorganization. The New Constituent Documents will be filed with the Bankruptcy Court as Plan Documents.

*New Indenture Trustees*		means the Person or Persons appointed to act as the indenture trustees under the New Mirant Indenture and the New MAG Indenture.

*New MAG 7.5% Senior Secured Notes*		means those 7.625% senior secured notes due July 15, 2008, to be issued by MAG pursuant to the New MAG Indenture.

*New MAG Agent*		means the Person or Persons appointed to act as administrative agent under the New MAG Secured Credit Facility.

*New MAG Indenture*		means that certain indenture to be entered into between MAG, as issuer, and the relevant New Indenture Trustee, as trustee, pursuant to which MAG will issue the New MAG 7.625% Senior Secured Notes.

*New MAG Secured Lender*		means each lender under the New MAG Secured Credit Facility.

*New MAG Secured Credit Facility*		means the new secured credit agreement to be dated as of the Effective Date in the aggregate principal amount of $300 million.

*New Mirant 7.5% Senior Secured Notes*		means those 7.5% senior secured notes due July 15, 2008, to be issued by Mirant pursuant to the New Mirant Indenture on or about the Effective Date pursuant to which the 2.5% Convertible Senior Debenture Claims and the 7.4% Senior Note Claims will be satisfied through the Plan of Reorganization.

*New Mirant Agents*		means the Person or Persons appointed to act as administrative agents under the New Mirant Secured Credit Facility.

*New Mirant Indenture*		means that certain indenture to be entered into between Mirant, as issuer, and the relevant New Indenture Trustee, as trustee, pursuant to which Mirant will issue the New Mirant 7.5% Senior Secured Notes, as contemplated by the Plan of Reorganization. The New Mirant Indenture will be filed with the Bankruptcy Court as a Plan Document.

The solicitation is being conducted at this time to obtain (prior to the filing of any voluntary petition for reorganization of the Debtor under Chapter 11 of the Bankruptcy Code) the requisite acceptances of the Plan of Reorganization. We anticipate that by conducting the acceptance solicitation in advance of commencing any Chapter 11 Case, if a Chapter 11 Case were commenced, the duration of the Chapter 11 Cases will be significantly shortened, and the administration of the cases, which otherwise could be lengthy, complex, and extremely expensive, will be greatly simplified and much less costly. The Bankruptcy Code defines “acceptance” of a plan by a class of claims as acceptance by creditors in that class that hold at least two-thirds in dollar amount and more than one-half in number of the claims that cast ballots for acceptance or rejection of the Plan of Reorganization. Acceptance of a plan by a class of interests requires acceptance by at least two-thirds of the amount of interests of such class that cast ballots for acceptance or rejection of the Plan of Reorganization.

We may commence a bankruptcy case for any reason. If we choose to do so, from and after the Petition Date, we would continue to operate our businesses and manage our properties as debtors-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code.

We do not expect the Chapter 11 Cases to be protracted. To expedite our emergence from Chapter 11, we would seek, among other things, the relief detailed below from the Bankruptcy Court on the Petition Date. If granted, this relief would facilitate the administration of the Chapter 11 Cases. There can be no assurance, however, that the Bankruptcy Court would grant the requested relief.

Mirant would seek retention of certain professionals, who were intimately involved with the negotiation and development of the Restructuring Transactions and the Plan of Reorganization, to represent it and assist it in connection with the Chapter 11 Cases. These professionals include, among others: (i) White & Case LLP, as bankruptcy counsel for Mirant; and (ii) Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates, as special corporate counsel for Mirant. Mirant also would seek authority to retain certain professionals to assist with the operation of Mirant’s business in the ordinary course; these so-called “ordinary course professionals” would not be involved in the administration of the Chapter 11 Cases.

Mirant would seek a combined Confirmation Hearing and hearing on the adequacy of this Offering Circular and Disclosure Statement on the earliest date which is convenient for the Bankruptcy Court. At the hearing, Mirant would seek approval of this Offering Circular and Disclosure Statement and confirmation of the Plan of Reorganization pursuant to sections 1125, 1128 and 1129 of the Bankruptcy Code. At that time,

Pursuant to the Bankruptcy Rules, Mirant would be required to provide notice of the hearing to approve this Offering Circular and Disclosure Statement and confirmation of the Plan of Reorganization to creditors and equity holders. Because several classes of Claims are unimpaired under the Plan and would pass through the Chapter 11 Cases unaffected, Mirant would request that it be authorized to provide only publication notice of the events set forth above in several newspapers of national circulation to holders.

Because Mirant expects the Chapter 11 Cases to be pending for fewer than two months, and because of the administrative hardship that any operating changes would impose, Mirant would seek authority to continue using its existing cash management system, bank accounts and business forms and to follow its internal investment and deposit guidelines. Absent the Bankruptcy Court’s authorization of the continued use of the cash management system, cash flow among Mirant and its subsidiaries would be impeded to the detriment of Mirant’s Estate and its creditors.

Continued use of its existing cash management system would facilitate the Debtors’ smooth and orderly transition into the Chapter 11 cases, minimize the disruption of their business while in Chapter 11, and expedite their emergence from Chapter 11. As a result of set-up time and expenses, requiring Mirant to adopt and implement a new cash management system would likely increase the costs of the Chapter 11 Cases. For the same reasons, requiring the Debtors to cancel their existing bank accounts and establish new accounts or requiring the Debtors to create new business forms would only frustrate the Debtors’ efforts to reorganize expeditiously.

Substantially all of the Debtors’ employees are employed through non-debtor affiliates. Accordingly, it is not anticipated that the Debtors will require relief from the Bankruptcy Court to pay employee compensation and benefits in the ordinary course, including wages and benefits that are accrued but unpaid as of the Petition Date. Nevertheless, because any delay in paying employee compensation and benefits would irreparably harm employee morale at a time when the dedication, confidence and cooperation of employees is most critical, to the extent that it is otherwise determined that Bankruptcy Court approval is necessary to honor some or all employee compensation and benefits, the Debtors intend to seek such relief.

We expect that Mirant (the “DIP Borrower”) intends to enter into the DIP Facility Agreement with the DIP Lenders in connection with the Restructuring. We further expect that the DIP Facility Agreement would provide additional working capital to Mirant secured by liens on all unencumbered property of Mirant and its subsidiaries including, without limitation, all stock of most direct and indirect subsidiaries of Mirant (including 65% of stock of foreign subsidiaries), and all other property and interests, real and personal, tangible and intangible, whether owned as of or acquired after the Petition Date. The DIP Facility Agreement would be required to be approved by the Bankruptcy Court in the event that Mirant pursues confirmation of the Plan of Reorganization. Mirant expects that the DIP Facility Agreement would authorize borrowings of up to $500 million. As of the date of this Offering Circular and Disclosure Statement, Mirant does not have a firm commitment for the DIP Facility Agreement. Mirant has been in active negotiations with major financial institutions regarding a commitment for such financing, however, and would expect to receive such a commitment prior to filing any Chapter 11 case.

An important aspect of the Debtors’ Chapter 11 Cases would be the Debtors’ ability to effectively procure fuel consumed and sell power generated by their core power generation business along with prudently

managing their businesses against market volatility. The Debtors have one of the largest and most active risk management floors in the United States, which enables the Debtors to use derivative contracts to manage and optimize their power generation assets. Although the Debtors believe that entering into derivative contracts postpetition would be within the ordinary course of their businesses, many counterparties might be reluctant to conduct business with the Debtors through the use of derivative contracts absent explicit Bankruptcy Court authority to do so. Thus, out of an abundance of caution, the Debtors would intend to seek authority to continue derivative contracts trading activity. Additionally, the Debtors would intend to seek authority to perform all actions necessary or appropriate to implement, execute and perform such transactions, including, but not limited to, posting letters of credit, entering into escrow agreements, opening and funding escrow accounts, posting collateral or margin, prepayment and delivery of settlement on account of derivative contracts.

In the ordinary course of their businesses, the Debtors collect “trust fund” taxes on behalf of various taxing authorities. The most common examples of trust fund taxes include income tax withholdings and sales and use taxes. The Debtors would seek authority to pay prepetition “trust fund” taxes in the ordinary course of business.

In connection with the operation of their businesses and management of their properties, the Debtors obtain electricity, telephone and similar services from many different utility companies. Historically, the Debtors have paid these utilities timely. The Bankruptcy Code permits utilities to alter or refuse service to a debtor after the first twenty days of the Chapter 11 case unless the debtor provides adequate assurance of payment during such 20-day period. The Debtors would seek an order from the Bankruptcy Court determining that, based upon the Debtors’ liquidity, all utilities would be adequately assured of payment and that all utilities should be enjoined from altering the Debtors’ service without prior Bankruptcy Court approval.

The Debtors utilize certain critical vendors that provide either transportation, storage, packaging, oversight, inspection and related services or “single source” goods or other goods and services that are essential to the Debtors’ operations and that cannot be obtained elsewhere or cannot be replaced except at exorbitant costs. The Debtors’ ability to continue their operations in the aftermath of their bankruptcy filings would in part depend upon the continued provision of goods and services by these critical vendors. To ensure that the Debtors’ business operations would be minimally affected during the Chapter 11 Cases, the Debtors would file a motion seeking to authorize (but not require) the payment of all or a portion of prepetition claims owed to certain critical vendors.

Assuming that the Bankruptcy Court approves the Debtors’ scheduled motion with respect to the Offering Circular and Disclosure Statement and Confirmation Hearing, the Debtors anticipate that the Offering Circular and Disclosure Statement and Confirmation Hearing would occur within approximately two months of the Petition Date. There can be no assurance, however, that the Bankruptcy Court’s orders that would be entered on the Petition Date would permit the Chapter 11 Cases to proceed as expeditiously as anticipated.

Chapter 11 is the principal business reorganization Chapter of the Bankruptcy Code. Under Chapter 11 of the Bankruptcy Code, a debtor is authorized to reorganize its business for the benefit of itself, its creditors and interest holders. Another goal of Chapter 11 is to promote equality of treatment for similarly situated

creditors and similarly situated interest holders with respect to the distribution of a debtor’s assets. The commencement of a Chapter 11 case creates an estate that is comprised of all of the legal and equitable interests of the debtor as of the filing date. The Bankruptcy Code provides that the debtor may continue to operate its business and remain in possession of its property as a “debtor in possession.”

The consummation of a plan of reorganization is the principal objective of a Chapter 11 case. A plan of reorganization sets forth the means for satisfying claims against and interests in a debtor. Confirmation of a plan of reorganization by the Bankruptcy Court makes the plan of reorganization binding upon the debtor, any issuer of securities under the plan of reorganization, any person or entity acquiring property under the plan of reorganization and any creditor of or equity security holder in the debtor, whether or not such creditor or equity security holder (i) is impaired under or has accepted the plan of reorganization or (ii) receives or retains any property under the plan of reorganization. Subject to certain limited exceptions and other than as provided in the plan of reorganization itself or the confirmation order, the confirmation order discharges the debtor from any debt that arose prior to the date of confirmation of the plan of reorganization and substitutes therefor the obligations specified under the confirmed plan of reorganization, and terminates all rights and interests of equity security holders.

THE REMAINDER OF THIS SECTION PROVIDES A SUMMARY OF THE STRUCTURE AND MEANS FOR IMPLEMENTATION OF THE PLAN OF REORGANIZATION, AND OF THE CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY INTERESTS UNDER THE PLAN OF REORGANIZATION, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE PLAN OF REORGANIZATION (AS WELL AS THE EXHIBITS THERETO AND DEFINITIONS THEREIN), WHICH IS ANNEXED TO THIS OFFERING CIRCULAR AND DISCLOSURE STATEMENT AS APPENDIX I.

THE STATEMENTS CONTAINED IN THIS OFFERING CIRCULAR AND DISCLOSURE STATEMENT INCLUDE SUMMARIES OF THE PROVISIONS CONTAINED IN THE PLAN OF REORGANIZATION AND IN DOCUMENTS REFERRED TO THEREIN. THE STATEMENTS CONTAINED IN THIS OFFERING CIRCULAR AND DISCLOSURE STATEMENT DO NOT PURPORT TO BE PRECISE OR COMPLETE STATEMENTS OF ALL THE TERMS AND PROVISIONS OF THE PLAN OF REORGANIZATION OR DOCUMENTS REFERRED TO THEREIN, AND REFERENCE IS MADE TO THE PLAN OF REORGANIZATION AND TO SUCH DOCUMENTS FOR THE FULL AND COMPLETE STATEMENTS OF SUCH TERMS AND PROVISIONS.

THE PLAN OF REORGANIZATION ITSELF AND THE DOCUMENTS REFERRED TO THEREIN CONTROL THE ACTUAL TREATMENT OF CLAIMS AGAINST AND EQUITY INTERESTS IN MIRANT AND THE OTHER FILING ENTITIES UNDER THE PLAN OF REORGANIZATION AND WILL, UPON OCCURRENCE OF THE EFFECTIVE DATE, BE BINDING UPON ALL HOLDERS OF CLAIMS AGAINST AND EQUITY INTERESTS IN MIRANT AND THE OTHER FILING ENTITIES, THE ESTATES, REORGANIZED MIRANT, ALL PARTIES RECEIVING PROPERTY UNDER THE PLAN, AND OTHER PARTIES IN INTEREST. IN THE EVENT OF ANY CONFLICT BETWEEN THIS OFFERING CIRCULAR AND DISCLOSURE STATEMENT, ON THE ONE HAND, AND THE PLAN OF REORGANIZATION OR ANY OTHER OPERATIVE DOCUMENT, ON THE OTHER HAND, THE TERMS OF THE PLAN OF REORGANIZATION OR SUCH OTHER OPERATIVE DOCUMENT WILL CONTROL.

As more fully described below, the Plan of Reorganization designates separate classes of Claims against and Equity Interests in the Debtors (other than DIP Claims, Administrative Claims, and Tax Claims). Only the holders of Mirant Class 3-Mirant Bank Claims, Mirant Class 4-Mirant Impaired Note Claims, MAEM Class 3-Commodity Prepay Facility Claims and MADCI Class 3-Equipment Warehouse Facility Claims would be impaired under the Plan of Reorganization, and votes on the Plan of Reorganization are being solicited only from the holders of such claims. In addition to holders of DIP Claims, Administrative Claims

Bankruptcy Rule 3018(b) prescribes the conditions that must be satisfied to count the ballots solicited with respect to a plan of reorganization prior to the commencement of a Chapter 11 case. Bankruptcy Rule 3018(b) requires that (i) the Chapter 11 plan of reorganization must have been disseminated to substantially all impaired creditors and equity security holders in the class(es) entitled to vote, (ii) the time prescribed for voting on the plan of reorganization must be sufficient and (iii) the solicitation must have been conducted in accordance with section 1126(b) of the Bankruptcy Code, which requires compliance with all applicable non-bankruptcy laws, rules, or regulations or, if there are no such applicable laws, rules or regulations, that the disclosure with respect to the plan of reorganization contains “adequate information” as defined in section 1125(a) of the Bankruptcy Code. Section 1125(a)(1) defines “adequate information” as information of a kind and in sufficient detail as far as is reasonably practicable in light of the nature and history of a company and the condition of such company’s books and records, as would enable a hypothetical reasonable investor typical of holders of claims or equity interests of the relevant class to make an informed judgment about the plan of reorganization.

We believe that all of the requirements of Bankruptcy Rule 3018(b) would be satisfied in the event that we sought confirmation of the Plan of Reorganization. This Offering Circular and Disclosure Statement and the Plan of Reorganization, together with all of the accompanying materials, are being transmitted to holders of Mirant Class 3-Mirant Bank Claims, Mirant Class 4-Mirant Impaired Note Claims, MAEM Class 3-Commodity Prepay Facility Claims and MADCI Class 3-Equipment Warehouse Facility Claims. We believe that this Offering Circular and Disclosure Statement contains adequate information (within the meaning of section 1125(a)(1) of the Bankruptcy Code) for all holders of such Claims.

Section 1123 of the Bankruptcy Code provides that a plan of reorganization must classify the claims and interests of a debtor’s creditors and equity interest holders. In accordance with section 1123, the Plan of Reorganization divides Claims and Equity Interests into Classes and sets forth the treatment for each Class (other than DIP Claims, Administrative Claims and Tax Claims which, pursuant to section 1123(a)(1), need not be and have not been classified). The Debtors are required, under section 1122 of the Bankruptcy Code, to classify Claims against and Equity Interests in the Debtors into Classes, each of which contain Claims and Equity Interests that are substantially similar to the other Claims and Equity Interests in such Class. We believe that the Plan of Reorganization has classified all Claims and Equity Interests in compliance with the provisions of section 1122, but if Chapter 11 Cases were to be commenced, it is possible that a holder of a Claim or Equity Interest may challenge our classification of Claims and Equity Interests and that the Bankruptcy Court may find that a different classification is required for the Plan of Reorganization to be confirmed. In that event, we would intend, to the extent permitted by the Bankruptcy Code, the Plan of Reorganization and the Bankruptcy Court, to make such reasonable modifications of the classifications through the Plan of Reorganization to permit confirmation and to use the acceptances of the Plan of Reorganization that are marked on the Ballots received in this Solicitation Package for purpose of obtaining the approval of the reconstituted Class or Classes of which each accepting holder ultimately would be deemed to be a member. Any such reclassification could adversely affect the Class in which such holder initially was a member, or any other Class in the Plan of Reorganization, by changing the composition of such Class and the vote required of that Class for approval of the Plan of Reorganization. Furthermore, a reclassification of a Claim or Interest after approval of the Plan of Reorganization could necessitate a resolicitation of acceptances of the Plan of Reorganization.

The classification of Claims and Equity Interests and the nature of distributions to members of each Class are summarized below. We believe that the consideration, if any, that would be provided through the Plan of Reorganization to holders of Claims and Equity Interests would reflect an appropriate resolution of their Claims and Interests, and would take into account the differing nature and priority (including applicable

contractual subordination) of such Claims and Equity Interests. The Bankruptcy Court would be required to find, however, that a number of statutory tests are met before it could confirm the Plan of Reorganization. Many of these tests are designed to protect the interests of holders of Claims or Equity Interests who would not be entitled to vote on the Plan of Reorganization, or would not vote to accept the Plan of Reorganization, but who would be bound by the provisions of the Plan of Reorganization if it were confirmed by the Bankruptcy Court. The “cramdown” provisions of section 1129(b) of the Bankruptcy Code, for example, permit confirmation of a Chapter 11 plan in certain circumstances even if the Plan of Reorganization had not been accepted by all impaired classes of Claims and Equity Interests. Although we believe that the Plan of Reorganization could be confirmed under section 1129(b), there can be no assurance that the requirements of such section would be satisfied.

Administrative Claims are Claims incurred by a Debtor (or its Estate) on or after the Petition Date and before the Effective Date for costs and expenses of administration of the Chapter 11 Cases allowed under section 503(b) of the Bankruptcy Code and entitled to priority pursuant to section 507(a)(1) of the Bankruptcy Code. Such Claims include (i) any actual and necessary costs and expenses incurred after the Petition Date of preserving the Debtors’ Estates and operating the businesses of the Debtors (such as wages, salaries, commissions for services and payments for inventories, leased equipment and premises), and Claims of governmental units for taxes (including tax audit Claims related to tax years commencing after the Petition Date, but excluding Claims relating to tax periods, or portions thereof, ending on or before the Petition Date), (ii) all fees and charges assessed against the Debtors’ Estates under section 1930, Chapter 123 of Title 28, United States Code, (iii) DIP Claims and (iv) Fee Claims.

An Administrative Claim (other than a Fee Claim and DIP Claims) with respect to which notice has been properly filed and served, would become an Allowed Administrative Claim if no objection was filed within 30 days after the Effective Date or such later date as may be approved by the Bankruptcy Court. If an objection were to be filed within such 30-day period (or any extension thereof), the Administrative Claim would be an Allowed Administrative Claim only to the extent allowed by Final Order.

Each Administrative Claim other than a DIP Claim would be paid by the Debtors (i) in the amount of each holder’s Allowed Administrative Claim, in one Cash payment, or (ii) in such other manner as may be agreed upon in writing by the Debtors and such holder, provided that an Administrative Claim representing a liability incurred in the ordinary course of business of the Debtors may be paid at the Debtors’ election in the ordinary course of business.

Fee Claims are Administrative Claims under sections 327, 328, 329, 330(a), 331, 503(b) or 1103 of the Bankruptcy Code for compensation of Professional Persons for professional services rendered or expenses incurred in the Chapter 11 Cases on or after the Petition Date and on or prior to the Effective Date. Each Professional Person who holds or asserts a Fee Claim would be required to file with the Bankruptcy Court, and serve on all parties required to receive notice, a Fee Application within 45 days after the Effective Date. A Fee Claim in respect of which a Fee Application has been properly filed would become an Allowed Administrative Claim only to the extent allowed by Final Order and would be paid in the manner described above in respect of Allowed Administrative Claims.

In addition, section 503(b) of the Bankruptcy Code provides for payment of compensation to (i) creditors, indenture trustees and other entities making a “substantial contribution” to a Chapter 11 case and (ii) attorneys for and other professional advisors to such entities. The amounts, if any, which would be sought by entities for such compensation cannot be predicted by the Debtors at this time. Requests for compensation must be in accordance with the procedures set forth for Fee Claims in the preceding paragraph.

Tax Claims are Claims for taxes entitled to priority in payment under sections 502(i) and 507(a)(8) of the Bankruptcy Code. The legal and equitable rights of the holders of Tax Claims would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, at the election of the Debtors, each holder of an Allowed Tax Claim would receive in full satisfaction of such holder’s Allowed Tax Claim, (i) the amount of such holder’s allowed Tax Claim, with post-confirmation interest thereon, in equal annual Cash payments on each anniversary of the Effective Date, until the sixth anniversary of the date of assessment of such Tax Claim (provided that the Disbursing Agent may prepay the balance of any such Allowed Tax Claim at any time without penalty), (ii) a lesser amount in one Cash payment as may be agreed upon in writing by such holder, or (iii) such other treatment as may be agreed upon in writing by such holder.

A Mirant Class 1 Priority Claim is a Claim against Mirant, to the extent such Claim is entitled to priority in right of payment under section 507(a) of the Bankruptcy Code, other than Secured Claims, Administrative Claims and Tax Claims. The legal, equitable and contractual rights of holders of a Priority Claim would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim would be fully reinstated and retained and such Allowed Priority Claims would be paid in full in accordance with such reinstated rights.

A Mirant Class 2 Secured Claim is a Claim of a holder of Secured Claims against property of Mirant. The legal, equitable and contractual rights of holders of Secured Claims against Mirant would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim would be fully reinstated and retained and such Allowed Secured Claims would be paid in full in accordance with such reinstated rights.

Mirant Class 3 Mirant Bank Claims are the CSFB 364-day Revolver Claims, the Citibank “C” Facility Claims, the CSFB 4-year Revolver Claims, the Commodity Prepay Facility Guaranty Claims and the Equipment Warehouse Facility Guaranty Claims. Mirant Bank Claims would be impaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, in complete satisfaction of the Allowed Mirant Bank Claims, each holder of an Allowed Mirant Bank Claim would become a New Mirant Secured Lender under the term loan facility of the New Mirant Secured Credit Facility with its interest therein being in an amount equal to such holder’s Allowed Mirant Bank Claim.

Mirant Class 4 Mirant Impaired Note Claims are the 2.5% Convertible Senior Debenture Claims and the 7.4% Senior Note Claims. Mirant Impaired Note Claims would be impaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, in complete satisfaction of the Allowed Mirant Impaired Note Claims, each holder of an Allowed Mirant Impaired Note Claim would receive New Mirant 7.5% Senior Secured Notes in an amount equal to such holder’s Allowed Mirant Impaired Note Claim.

A Mirant Class 5 General Unsecured Claim is an Unsecured Claim against Mirant, other than the Mirant Bank Claims and Mirant Impaired Note Claims. The legal, equitable and contractual rights of holders of General Unsecured Claims against Mirant would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all legal, equitable and contractual rights to which

A Mirant Class 6 Securities Litigation Claim is a Claim against Mirant arising under the Securities Litigation or any Claim subject to section 510(b) of the Bankruptcy Code. The legal, equitable and contractual rights of holders of Securities Litigation Claims against Mirant would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim would be fully reinstated and retained and such Allowed Securities Litigation Claims would be paid in full (i) in Cash, (ii) by the issuance of Equity Interests in Mirant or (iii) by such other consideration as may be permitted by applicable law, in any case at the option of the Debtors.

Certain lawsuits have been commenced against Mirant and certain of its officers alleging, among other things, violation by the defendants of sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10-b 5 promulgated thereunder, by reason of material misrepresentations and omissions to the investing public regarding Mirant’s business operations and future prospects during the period from January 19, 2001 through May 6, 2002. The complainants seek unspecified damages including compensatory damages and the recovery of reasonable attorney’s fees and costs. There can be no assurance that Mirant will succeed in defending these litigation claims.

Section 510(b) of the Bankruptcy Code provides that claims for damages arising from the purchase or sale of a security in a debtor shall be subordinated to all claims and interests that are senior to or equal to the claim or interest represented by such security. Any such claims which are treated in the manner provided by the Bankruptcy Code would be deemed to be unimpaired. The Plan of Reorganization preserves Mirant’s rights to settle such claims (to the extent they constitute Allowed Securities Litigation Claims) (i) in Cash, (ii) by the issuance of Equity Interests in Mirant or (iii) such other consideration as may be permitted under applicable law, solely at the option of Mirant.

A Mirant Class 7 Equity Interest is an Equity Interest, individually and collectively, as the case may be, with respect to the Common Stock. The legal, equitable, and contractual rights to which such Equity Interests entitle its holders would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all of the legal, equitable and contractual rights to which such Equity Interests entitle such holders in respect of such Equity Interests would be fully reinstated and retained.

A MAEM Class 1 Priority Claim is a Claim against MAEM, to the extent such Claim is entitled to priority in right of payment under section 507(a) of the Bankruptcy Code, other than Secured Claims, Administrative Claims and Tax Claims. The legal, equitable and contractual rights of holders of Priority Claims against MAEM would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim would be fully reinstated and retained and such Allowed Priority Claims would be paid in full in accordance with such reinstated rights.

A MAEM Class 2 Secured Claim is a Claim of a holder of Secured Claims against property of MAEM. The legal, equitable and contractual rights of holders of Secured Claims against MAEM would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim would be fully reinstated and retained and such Allowed Secured Claims would be paid in full in accordance with such reinstated rights.

A MAEM Class 3 Commodity Prepay Facility Claim is a Claim against MAEM under the Commodity Prepay Facility. Commodity Prepay Facility Claims would be impaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, in complete satisfaction of the Allowed Commodity Prepay Facility Claims, each holder of an Allowed Commodity Prepay Facility Claim would become a New Mirant Secured Lender under the term loan facility of the New Mirant Credit Facility with its interest therein being in an amount equal to such holder’s Allowed Commodity Prepay Facility Claim.

A MAEM Class 4 General Unsecured Claim is an Unsecured Claim against MAEM. The legal, equitable and contractual rights of holders of General Unsecured Claims against MAEM would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim would be fully Reinstated and retained and such Allowed General Unsecured Claims would be paid in full in accordance with such reinstated rights.

A MAEM Class 5 Equity Interest is an Equity Interest, individually and collectively, as the case may be, with respect to the equity of MAEM. The legal, equitable, and contractual rights to which such Equity Interests entitle its holders would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all of the legal, equitable and contractual rights to which such Equity Interests entitle such holders in respect of such Equity Interests would be fully reinstated and retained.

A MADCI Class 1 Priority Claim is a Claim against MADCI, to the extent such Claim is entitled to priority in right of payment under section 507(a) of the Bankruptcy Code, other than Secured Claims, Administrative Claims and Tax Claims. The legal, equitable and contractual rights of holders of Priority Claims against MADCI would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim would be fully reinstated and retained and such Allowed Priority Claims would be paid in full in accordance with such reinstated rights.

A MADCI Class 2 Secured Claim is a Claim of holders of Secured Claims against property of MADCI. The legal, equitable and contractual rights of holders of Secured Claims against MADCI would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim would be fully reinstated and retained and such Allowed Secured Claims would be paid in full in accordance with such reinstated rights.

A MADCI Class 3 Commodity Prepay Facility Claim is a Claim against MADCI under the Equipment Warehouse Facility. Equipment Warehouse Facility Claims would be impaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, in complete satisfaction of the Allowed Equipment Warehouse Facility Claims, each holder of an Allowed Equipment Warehouse Facility Claim would become a New Mirant Secured Lender under the term loan facility of the New Mirant Credit Facility with its interest therein being in an amount equal to such holder’s Allowed Equipment Warehouse Facility Claim.

A MADCI Class 4 General Unsecured Claim is an Unsecured Claims against MADCI. The legal, equitable and contractual rights of holders of General Unsecured Claims against MADCI would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim would be fully reinstated and retained and such Allowed General Unsecured Claims would be paid in full in accordance with such reinstated rights.

A MADCI Class 5 Equity Interest is an Equity Interest, individually and collectively, as the case may be, with respect to the equity of MADCI. The legal, equitable and contractual rights to which such Equity Interest entitles its holders would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all of the legal, equitable and contractual rights to which such Equity Interest entitles such holder in respect of such Equity Interest would be fully reinstated and retained.

A MLW Class 1 Priority Claim is a Claim, to the extent such Claim is entitled to priority in right of payment under section 507(a) of the Bankruptcy Code, other than Secured Claims, Administrative Claims and Tax Claims. The legal, equitable and contractual rights of holders of Priority Claims against MLW would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim would be fully reinstated and retained and such Allowed Priority Claims would be paid in full in accordance with such reinstated rights.

A MLW Class 2 Secured Claim is a Claim of holders of Secured Claims against property of MLW. The legal, equitable and contractual rights of holders of Secured Claims against MLW would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim would be fully reinstated and retained and such Allowed Secured Claims would be paid in full in accordance with such reinstated rights.

A MLW Class 3 General Unsecured Claim is an Unsecured Claim against MLW. The legal, equitable and contractual rights of holders of General Unsecured Claims against MLW would be unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim would be fully reinstated and retained and such Allowed General Unsecured Claims would be paid in full in accordance with such reinstated rights.

A MLW Class 4 Equity Interest is an Equity Interest, individually and collectively, as the case may be, with respect to the equity of MLW. The legal, equitable, and contractual rights to which such Equity Interest entitles its holders would be Unimpaired by the Plan of Reorganization. On or as soon as reasonably practicable after the Distribution Date, all of the legal, equitable and contractual rights to which such Equity Interest entitles such holder in respect of such Equity Interest would be fully reinstated and retained.

Except as otherwise provided in the Plan of Reorganization, nothing would affect the Debtors’ or Reorganized Debtors’ rights and defenses, both legal and equitable, with respect to any unimpaired Claims,

Except as otherwise provided in the Plan of Reorganization or the Confirmation Order, all Cash necessary for Reorganized Mirant to make payments pursuant to the Plan of Reorganization would be obtained from existing Cash balances.

Except as otherwise provided in the Plan of Reorganization or as ordered by the Bankruptcy Court, distributions to be made on account of Claims or Equity Interests that are Allowed as of the Effective Date would be made on the Effective Date or as soon thereafter as is practicable. Any distribution to be made on account of Claims or Equity Interests that are not Allowed on the Effective Date, would be made as soon as practicable after such Claim or Equity Interest becomes Allowed. Any payment or distribution required to be made through the Plan of Reorganization on a day other than a Business Day would be made on the next succeeding Business Day.

Postpetition interest would accrue and be paid on Claims only to the extent specifically provided for in the Plan of Reorganization, the Confirmation Order or required by applicable law.

Mirant, in its capacity as the Disbursing Agent, would make all distributions required to be distributed through the Plan of Reorganization. Distributions on account of Allowed Mirant Impaired Note Claims would be made to the trustees under the applicable Indentures or Fiscal Agency Agreement, as the case may be.

Delivery of Distributions in General. Distributions to holders of Allowed Claims and Allowed Equity Interests would be made at the addresses set forth in (i) in the Schedules, (ii) on the proof of Claim filed by such holder, (iii) in any notice of assignment filed with the Court with respect to such Claim pursuant to the Bankruptcy Rule 3001(e), (iv) in any notice served by such holder giving details of a change of address or (v) in the case of the holders of the Mirant Impaired Notes, to the applicable indenture trustee for distribution to the holders of such securities.

Holding and Investment of Undeliverable and Unclaimed Distributions. If the distribution to any holder of an Allowed Claim or Equity Interest is returned to the Disbursing Agent as undeliverable or is otherwise unclaimed, no further distributions would be made to such holder unless and until the Disbursing Agent was notified in writing of such holder’s then current address within three months after such distribution was returned.

Failure to Claim Undeliverable Distributions. Any holder of an Allowed Claim or Equity Interest that does not assert a claim pursuant to the Plan of Reorganization for an undeliverable or unclaimed distribution within three months after such distribution has been returned to the Debtors would be deemed to have forfeited its claim for such undeliverable or unclaimed distribution and would be forever barred and enjoined from asserting any such claim for an undeliverable or unclaimed distribution against the Debtors or their respective Estates. Checks issued in respect of Allowed Claims would be null and void if not negotiated within 180 days after the issuance thereof. Requests for the reissuance of voided checks would have to be made directly to the Disbursing Agent. Any Claims in respect of voided checks would have to be made on or before

the first anniversary of the date on which the distribution was made or 180 days after the issuance of the voided check (whichever is later). If no Claim were made in respect of a voided check as aforesaid, such Claims would be discharged and forever barred. Any undelivered or unclaimed distributions and any distributions in respect of voided checks which were not thereafter claimed in the aforesaid manner would revert to the Debtors. Nothing contained in the Plan of Reorganization would require the Disbursing Agent to attempt to locate any holder of an Allowed Claim or Equity Interest.

To the extent that any Allowed Claim entitled to a distribution under the Plan of Reorganization is comprised of indebtedness and accrued but unpaid interest thereon, such distribution would, for federal income tax purposes, be allocated to the principal amount of the Claim first and then, to the extent the consideration exceeds the principal amount of the Claim, to the portion of such Claim representing accrued but unpaid interest.

Payments of Cash made pursuant to the Plan of Reorganization would be in U.S. dollars and would be made, at the option and in the sole discretion of the Disbursing Agent, by (i) checks drawn on or (ii) wire transfers from a domestic bank selected by the Disbursing Agent. Cash payments to foreign creditors could be made, at the option of the Disbursing Agent, in such funds and by such means as are necessary or customary in a particular foreign jurisdiction.

In connection with the Plan of Reorganization and all distributions thereunder, the Debtors and the Disbursing Agent would comply with all withholding and reporting requirements imposed by any federal, state, local or foreign taxing authority, and all distributions under the Plan of Reorganization would be subject to any such withholding and reporting requirements. Notwithstanding any other provision of the Plan of Reorganization, (i) each holder of an Allowed Claim or Equity Interest that was to receive a distribution pursuant to the Plan of Reorganization would have sole and exclusive responsibility for the satisfaction and payment of any tax obligations imposed by any governmental unit, including income, withholding and other tax obligations, on account of such distribution, and (ii) the Disbursing Agent would have the right, but not the obligation, to withhold any distribution to a holder unless and until such holder had made arrangements satisfactory to the Disbursing Agent for the payment and satisfaction of such tax obligations.

Any Debtor or Reorganized Debtor could, pursuant to section 553 of the Bankruptcy Code or applicable nonbankruptcy law, but would not be required to, set off against any Claim and the payments or other distributions to be made pursuant to the Plan in respect of such Claim, claims of any nature whatsoever that such Debtor or Reorganized Debtor might have against the holder of such Claim; provided, however, that neither the failure to do so nor the allowance of any Claim under the Plan of Reorganization would constitute a waiver or release by any Debtor or Reorganized Debtor of any such claim that such Debtor or Reorganized Debtor might have against such holder.

As a condition precedent to receiving any distribution pursuant to the Plan of Reorganization on account of a Mirant Impaired Note Claim each holder of an Allowed Mirant Impaired Note Claim would tender all certificates or instruments relating to its Allowed Mirant Impaired Notes relating to such Claim to the applicable trustee or their agents, as applicable, and would execute such other documents as might be necessary to effectuate the Plan of Reorganization. All surrendered Mirant Impaired Notes would be marked as cancelled.

Any holder of Mirant Impaired Notes that failed to surrender the applicable Mirant Impaired Notes required to be tendered under the Plan of Reorganization or who failed to deliver an affidavit of loss or such other documents as might be required by the relevant indenture trustee or agent together with an indemnity in the customary form within two years after the Effective Date would have its Claim and its distribution pursuant to the Plan of Reorganization on account of such Mirant Impaired Notes forfeited and would not participate in any distribution under the Plan of Reorganization. Any property in respect of such forfeited Claims would revert to the Reorganized Debtors.

No later than 180 days after the Effective Date (unless extended by an order of the Bankruptcy Court), objections to Claims could be filed with the Bankruptcy Court and served upon the holders of each of the Claims to which objections were made. The Debtors and Reorganized Debtors would be authorized to, and would, resolve all Contested Claims by withdrawing or settling such objections thereto, or by litigating to Final Order in the Bankruptcy Court or such other court having jurisdiction the validity, nature and/or amount thereof in accordance with the provisions set forth in the Plan of Reorganization.

Notwithstanding any other provision of the Plan of Reorganization, no payments or distributions would be made with respect to all or any portion of a Contested Claim unless and until such Contested Claim became an Allowed Claim, subject to the Debtors’ or Reorganized Debtors’ rights of setoff under the Plan of Reorganization.

The Disbursing Agent could request that the Bankruptcy Court estimate any Contested Claim regardless of whether the Disbursing Agent has previously contested such Claim or whether the Bankruptcy Court has ruled on any such objection and the Bankruptcy Court would retain jurisdiction to estimate any Claim at any time during the litigation concerning the objection to such Claim. Any estimated amount would constitute either the allowed amount of such Claim or a maximum limitation on such Claim as determined by the Bankruptcy Court.

After the Effective Date, each of the Reorganized Debtors would continue to exist in accordance with the law in the jurisdiction in which it is incorporated and pursuant to its certificate or articles of incorporation and by-laws in effect prior to the Effective Date, except to the extent such certificate or articles of incorporation and by-laws are amended under the Plan of Reorganization. Except as otherwise provided in the Plan of Reorganization, on and after the Effective Date, all property of the Estates of the Reorganized Debtors, including all claims, rights and causes of action and any property acquired by each of the Reorganized Debtors under or in connection with the Plan of Reorganization, would vest in the Reorganized Debtors free and clear of all Claims, liens, charges, other encumbrances and Equity Interests except as expressly provided under the Plan of Reorganization. On and after the Effective Date, the Reorganized Debtors could operate their businesses and could use, acquire and dispose of property and compromise or settle any Claims without supervision of or approval by the Bankruptcy Court and free and clear of any restrictions of the Bankruptcy Code or the Bankruptcy Rules other than restrictions expressly imposed by the Plan of Reorganization or the Confirmation Order. Without limiting the foregoing, the Reorganized Debtors could pay the charges that they incur on or after the Effective Date for Professional Persons’ fees, disbursements, expenses or related support services without application to the Bankruptcy Court.

a. Certificates of Incorporation and By-laws. The certificate or articles of incorporation and by-laws of each of the Reorganized Debtors would be amended as necessary to satisfy the provisions of the Plan of Reorganization and the Bankruptcy Code, and would include, among other things, pursuant to section 1123(a)(6) of the Bankruptcy Code, a provision prohibiting the issuance of non-voting equity securities, but only to the extent required by section 1123(a)(6) of the Bankruptcy Code. After the Effective Date, each of the Reorganized Debtors could amend and restate the Amended Certificates of Incorporation and Bylaws as permitted by applicable law.

b. Directors and Officers of the Debtors. Subject to any requirement of Bankruptcy Court approval pursuant to section 1129(a)(5) of the Bankruptcy Code, as of the Effective Date, the initial directors and officers of each of the Debtors would be the directors and officers of each of the Reorganized Debtors immediately prior to the Effective Date. From and after the Effective Date, the Board of Directors of each of the Reorganized Debtors would be selected and determined in accordance with the provisions of their respective Certificates of Incorporation and Bylaws, as they may be amended from time to time. Each such director and officer would serve from and after the Effective Date pursuant to the terms of the relevant Certificates of Incorporation and Bylaws, the other constituent documents of each of the Reorganized Debtors, and applicable law.

c. Corporate Action. The entry of the Confirmation Order would constitute authorization of the adoption of any contemplated amendments to the applicable Certificates of Incorporation or similar constituent documents, the selection of directors and officers for each of the Reorganized Debtors, and all other actions contemplated by the Plan of Reorganization. All matters provided for in the Plan of Reorganization involving the corporate structure of each of the Reorganized Debtors, and any corporate action required by each of the Debtors in connection with the Plan of Reorganization, would be deemed to have occurred and would be in effect without any requirement of further action by the security holders or directors of each of the Reorganized Debtors. On the Effective Date, the appropriate officers of each of the Reorganized Debtors and members of the board of directors of each of the Reorganized Debtors would be authorized and directed to issue, execute and deliver, the agreements, documents, securities and instruments contemplated by the Plan of Reorganization in the name of and on behalf of each of the Reorganized Debtors.

On or as soon as reasonably practicable after the Effective Date, Reorganized Mirant would, in accordance with the terms of the Plan, issue and exchange, as necessary, for the benefit of holders of Mirant Impaired Note Claims, such New Mirant 7.5% Senior Secured Notes as were required by the Plan of Reorganization. The issuance of the New Mirant 7.5% Senior Secured Notes would be authorized without the need for any further corporate action.

On the Effective Date, Mirant would be authorized and directed to execute and deliver the New Mirant Secured Credit Agreement to govern the New Mirant Secured Credit Facility. As of the date of this Offering Circular and Disclosure Statement, Mirant does not have a commitment for the revolving loan portion of the New Mirant Secured Credit Facility. Mirant anticipates obtaining such a commitment on or before the Effective Date, however.

Any executory contracts or unexpired leases of the Debtors which had not been previously assumed or rejected or were not subject to a motion to reject on or before the Effective Date would be deemed to have been assumed by the Reorganized Debtors on the Effective Date. Subject to the occurrence of the Effective Date, entry of the Confirmation Order would constitute approval of such assumptions and findings by the

Bankruptcy Court that the Reorganized Debtors had properly provided for the cure of any defaults that might have existed, that each assumption was in the best interest of the Reorganized Debtors, their Estates, and all parties in interest in the Chapter 11 Cases and that the requirements for assumption of any executory contract or unexpired lease to be assumed had been satisfied. Except as otherwise provided in the following sentence, all cure payments under any executory contract or unexpired lease which would be assumed under the Plan of Reorganization would be made by the Reorganized Debtors on the Effective Date or as soon as practicable thereafter.

Any executory contracts or unexpired leases of the Debtors identified for rejection by the Debtors on or before the Confirmation Date would be deemed to have been rejected on the Effective Date or as otherwise set forth in an order of the Bankruptcy Court authorizing and approving such rejection. The Debtors would have no liability in respect of a rejected executory contract or unexpired lease except as is specifically provided in the Plan of Reorganization. Entry of the Confirmation Order would constitute approval of such rejections and a finding by the Bankruptcy Court that each such rejected executory contract or unexpired lease was burdensome and that the rejection thereof was in the best interest of the Reorganized Debtors, their Estates, and all parties in interest in these Chapter 11 Cases. Claims created by the rejection of executory contracts or unexpired leases or the expiration or termination of any executory contract or unexpired lease prior to the Confirmation Date would have to be filed with the Bankruptcy Court and served on the Debtors in the manner provided under the Plan of Reorganization. Any such Claims for which a proof of Claim is not filed and served within such time would be forever barred from assertion and would not be enforceable against the Debtors, the Reorganized Debtors, their Estates, Assets, properties, interests in property, or against the property of a third party that receives payment of such Claim. Unless otherwise ordered by the Bankruptcy Court, all such Claims that are timely filed as provided under the Plan of Reorganization would be treated as General Unsecured Claims subject to objection by the Reorganized Debtors.

The obligations of the Debtors to indemnify any of its directors, officers or employees by reason of such person’s or entity’s service in such capacity, to the extent provided in such Debtors’ constituent documents, contract, law or equity would be deemed and treated as executory contracts that are assumed by each of the Reorganized Debtors pursuant to the Plan of Reorganization and section 365 of the Bankruptcy Code as of the Effective Date. Accordingly, such indemnification obligations would be treated as General Unsecured Claims and would survive unimpaired and unaffected by entry of the Confirmation Order, irrespective of whether such indemnification is owed for an act or event occurring before or after the Petition Date.

Except as otherwise expressly provided under the Plan of Reorganization, all employment and severance policies, and all compensation and benefit plans, policies, and programs of the Debtors applicable to their employees, retirees and non-employee directors and the employees and retirees of their subsidiaries, including, without limitation, all savings plans, retirement plans, healthcare plans, disability plans, severance benefit plans, incentive plans, and life, accidental death and dismemberment insurance plans would be treated as executory contracts under the Plan of Reorganization and on the Effective Date would be assumed pursuant to the provisions of sections 365 and 1123 of the Bankruptcy Code. All employment contracts assumed pursuant to Section 12.1 of the Plan of Reorganization would be deemed modified such that the transactions contemplated by the Plan of Reorganization would not be a “change of control” as defined in the relevant employment contracts.

The following are conditions precedent to the confirmation of the Plan of Reorganization:


	(i) The Clerk of the Bankruptcy Court must have entered the Confirmation Order, approving the Offering Circular and Disclosure Statement as containing “adequate information” pursuant to section 1125 of the Bankruptcy Code, approving the prepetition solicitation of votes with respect to the Plan of Reorganization and determining that all such votes are binding and were properly tabulated with acceptances or rejection of the Plan of Reorganization, confirming the Plan of Reorganization and determining that all applicable tests, standards and burdens in connection therewith were duly satisfied and met by the Debtors and the Plan of Reorganization approving the Plan Documents, authorizing the Debtors to execute, enter into, and deliver the Plan Documents and to execute, implement, and to take all actions otherwise necessary or appropriate to give effect to, the transactions contemplated by the Plan of Reorganization and the Plan Documents.

	(ii) The Confirmation Order, the Plan Documents and the Plan of Reorganization must be, in form and substance, acceptable to the Debtors. The Bankruptcy Court may not enter the Confirmation Order unless and until the Confirmation Order is acceptable in form and substance to the Debtors.


	(i) The Confirmation Order must have been entered by the Clerk of the Bankruptcy Court, be in full force and effect and not be subject to any stay or injunction.

	(ii) All necessary consents, authorizations and approvals must have been given for the transfers of property and the payments provided for or contemplated by the Plan of Reorganization, including, without limitation, satisfaction or waiver of all conditions to the obligations of the Debtors under the Plan of Reorganization and the Plan Documents.

	(iii) The New Mirant Secured Credit Facility, New MAG Secured Credit Facility, the New Mirant Indenture and the New MAG Indenture must have become effective and all conditions to the effectiveness thereof must have been satisfied or waived.

	(iv) Reorganized Mirant must have credit availability under the New Revolving Credit Facility in an amount acceptable to Reorganized Mirant.

Each of the conditions set forth in the Plan of Reorganization could be waived in whole or in part by the Debtors (other than any condition relating to the entry of the Confirmation Order by the Clerk of the Bankruptcy Court), without any other notice to parties in interest or the Bankruptcy Court and without a hearing. The failure to satisfy or waive a condition to the Effective Date could be asserted by any of the Debtors regardless of the circumstances giving rise to the failure of such condition to be satisfied (including any action or inaction by any of the Debtors). The failure of any of the Debtors to exercise any of the foregoing rights would not be deemed a waiver of any other rights, and each right would be deemed an ongoing right that could be asserted at any time.

If the Effective Date did not occur notwithstanding any waiver of the conditions thereto, the Plan of Reorganization would be null and void and nothing contained in the Plan of Reorganization would: (i) constitute a waiver or release of any Claims against or Equity Interests in a Debtor, (ii) prejudice in any manner the rights of the Debtors, or (iii) constitute an admission, acknowledgement, offer or undertaking by the Debtors.

a. Except as provided in the Confirmation Order, pursuant to section 1141(d) of the Bankruptcy Code, the rights afforded under the Plan of Reorganization and the treatment of Claims and Equity Interests under the Plan of Reorganization would be in exchange for and in complete satisfaction, discharge and release of all Claims and Equity Interests, including any interest accrued on Claims from the Petition Date. Except as provided in the Confirmation Order or the Plan of Reorganization, Confirmation would discharge the Debtors from all Claims and other debts that arose before the Confirmation Date and all debts of the kind specified in section 502(g), 502(h) or 502(i) of the Bankruptcy Code, would be satisfied, discharged and released in full.

b. As of the Effective Date, except as provided in the Plan of Reorganization, or the Confirmation Order, all entities will be precluded and forever barred from asserting against any of the Debtors, the Reorganized Debtors, their successors or their property, any other or further claims, debts, rights, causes of action, liabilities or equity interests based upon any act, omission, transaction or other activity of any nature that occurred prior to the Effective Date.

On the Effective Date and except as otherwise provided in the Plan of Reorganization, all Persons who have been, are, or may be holders of Claims against or Equity Interests in the Debtors would be enjoined from taking any of the following actions against or affecting the Debtors, the Reorganized Debtors, the Estates, the Assets or the Disbursing Agent, or (to the extent such Persons will have provided an express release as provided by Section 7.17 of the Plan) any of their respective officers, directors, employees, agents, representatives, advisors, attorneys, successors and assigns or their respective assets and property with respect to such Claims or Equity Interests (other than actions brought to enforce any rights or obligations under the Plan of Reorganization and the contracts, instruments, releases, indentures and other agreements or documents delivered hereunder):


	(i) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind (including, without limitation, all suits, actions, and proceedings that are pending as of the Effective Date, which must be withdrawn or dismissed with prejudice);

	(ii) enforcing, levying, attaching, collecting or otherwise recovering by any manner or means, whether directly or indirectly, any judgment, award, decree or order;

	(iii) creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any encumbrance; and

	(iv) asserting any setoff, right of subrogation or recoupment of any kind; provided, that any defenses, offsets or counterclaims which the Debtors or Reorganized Debtors may have or assert in respect of the above referenced Claims are fully preserved in accordance with the provisions of the Plan of Reorganization.

a. Releases by Mirant. Except as expressly provided below, as of the Effective Date, for good and valuable consideration, each of the Debtors and the Reorganized Debtors in their individual capacities and as debtors-in-possession, would be deemed to forever release, waive, and/or discharge any Cause of Action (other than the rights of the Debtors or the Reorganized Debtors to enforce the Plan of Reorganization and the contracts, instruments, releases, indentures and other agreements or documents delivered thereunder), whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the Reorganized Debtors, the parties released pursuant to Section 7.17 of the Plan of Reorganization, the Chapter 11 Cases, or the Plan of Reorganization or this

Offering Circular and Disclosure Statement, and that could have been asserted by or on behalf of the Debtors or their Estates or Reorganized Debtors against (i) their respective current and former directors, officers, employees (other than for money borrowed from or owed to the Debtors or their subsidiaries by any such directors, officers or employees as set forth in the Debtors’ books and records), agents, members, shareholders and professionals and (ii) the DIP Lenders and DIP Agent and their respective affiliates, current and former directors, officers, employees, agents, members, shareholders and professionals, provided that any Cause of Action which could be brought derivatively against any of the foregoing Persons, by any current or former holder of an Equity Interest in, or any holder of any Claim against, any of the Debtors for the benefit of any Debtor would be expressly preserved and retained.

The Debtors do not believe that they have any claims against any of the entities to be released under the Plan of Reorganization. Moreover, the Debtors believe that the releases are warranted under the circumstances. The Debtors’ officers, directors, and employees all share an identity of interest with the Debtors such that a suit against them would be, in essence, a suit against the Debtors and/or would deplete assets of the Debtors. The releases have made substantial contributions to the reorganization by designing and implementing the Restructuring Transactions. The releases are an integral part of the Restructuring Transactions and the Plan of Reorganization, and hence are necessary to the continued success of the Reorganized Debtors. The distributions under the Plan of Reorganization would not be available in a liquidation and also might not be available under the Out-Of-Court Alternative. Thus, absent the support of the releasees, the Debtors may have to pursue other alternatives that may not provide commensurate value to all constituencies.

b. Releases by Holders of Claims and Interests. Each holder of any Claim against, or Equity Interest in, any of the Debtors that expressly indicates its agreement, in any ballot demonstrating its acceptance or rejection of the Plan of Reorganization, to be bound by the provisions of Section 7.17 of the Plan of Reorganization, would be deemed to have forever released, waived and/or discharged any Cause of Action, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act or omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the Chapter 11 Cases, the Plan of Reorganization or the Offering Circular and Disclosure Statement, against any of the Debtors’ current and former directors, officers, employees, agents, members, shareholders and professionals (other than Claims or Interests unrelated to the Debtors) and the Debtors’ agent and professionals.

None of the Debtors or Reorganized Debtors nor any of their respective current or former members, officers, directors, employees, advisors, attorneys, agents, representatives, successors or assigns acting in such capacity, would have or incur any liability to, or be subject to any Causes of Action by, any holder of a Claim or an Equity Interest, or any other party in interest, or any of their respective agents, shareholders, employees, representatives, financial advisors, attorneys or affiliates, or any of their successors or assigns, for any act or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, the pursuit of confirmation of the Plan of Reorganization, the consummation of the Plan of Reorganization, or the administration of the Plan of Reorganization or the property to be distributed under the Plan of Reorganization, except for their willful misconduct or gross negligence, and in all respects will be entitled to rely reasonably upon the advice of counsel with respect to their duties and responsibilities under the Plan of Reorganization.

The Confirmation Order would permanently enjoin the commencement or prosecution by any entity, whether directly, derivatively or otherwise, of any claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action or liabilities released pursuant to the Plan of Reorganization, including but not limited to the claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action or liabilities released in the Plan of Reorganization.]

Except as otherwise provided in the Plan of Reorganization, all Causes of Action assertable by any of the Debtors, including but not limited to Avoidance Actions, would, upon the occurrence of the Effective Date, be retained by, and be vested in, the Debtors or Reorganized Debtors, in accordance with the Plan of Reorganization. Except as otherwise provided in the Plan of Reorganization, the Debtors’ and the Reorganized Debtors’ rights to commence such Causes of Action (including Avoidance Actions) would be preserved notwithstanding consummation of the Plan of Reorganization. Without prejudice to the generality of the foregoing, all Causes of Action of the Debtors or Reorganized Debtors against their respective current or former directors, officers and employees, which may be asserted by the Debtors directly for their own benefit or derivatively for the benefit of any Person, would be preserved, notwithstanding consummation of the Plan of Reorganization. From and after the Effective Date, all Causes of Action could be compromised and settled by the Debtors or Reorganized Debtors in accordance with the procedures set out in the Plan of Reorganization.

Parties in interest, including without limitation creditors, may not rely on the absence of a specific reference in the Plan of Reorganization or Offering Circular and Disclosure Statement to any Cause of Action against them as any indication that the Debtors or Reorganized Debtors will not pursue any and all available Causes of Action against them. The Debtors, the Reorganized Debtors and the Estates expressly reserve all rights to prosecute any and all Causes of Action against any Person, except as otherwise provided in the Plan of Reorganization.

The following paragraphs summarize certain other significant provisions of the Plan of Reorganization. The Plan should be referred to for the complete text of these and other provisions of the Plan of Reorganization.

Pursuant to section 1146(c) of the Bankruptcy Code, (i) the issuance, transfer or exchange of notes or equity securities under the Plan of Reorganization, (ii) the creation of any mortgage, deed of trust, lien, pledge or other security interest, (iii) the making or assignment of any lease or sublease, or (iv) the making or delivery of any deed or other instrument of transfer under, in furtherance of, or in connection with, the Plan of Reorganization, including, without limitation, any merger agreements, agreements of consolidation, restructuring, disposition, liquidation or dissolution, deeds, bills of sale, and transfers of tangible property, would not be subject to any stamp tax, recording tax, real estate transfer tax or other similar tax. Any transfers from Mirant to Reorganized Mirant or otherwise pursuant to the Plan of Reorganization would not be subject to any such taxes, and the Confirmation Order would direct the appropriate state or local governmental officials or agents to forgo the collection of any such tax or governmental assessment and to accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment. Unless the Bankruptcy Court orders otherwise, any of the foregoing transactions taken on or prior to the Effective Date would be deemed to have been in furtherance of, or in connection with, the Plan of Reorganization.

Upon the occurrence of the Effective Date, the Mirant Impaired Notes would be cancelled and annulled. Immediately upon the completion of all Plan of Reorganization Distributions to the holders of Mirant Impaired Notes, the Impaired Note Indentures (to the extent they apply to the Mirant Impaired Notes) would be cancelled and the indenture trustees under the Mirant Impaired Notes Indentures would be authorized to take such action as necessary or appropriate to terminate and extinguish the Debtors’ obligations under the Mirant Impaired Notes Indentures (to the extent they apply to the Mirant Impaired Notes), without further approval, act or other determination under applicable law, regulation, order or rule. The indenture trustees under the Mirant Impaired Notes Indentures and their agents, successors and assigns would facilitate the making of Plan of Reorganization Distributions to the holders of Mirant Impaired Notes, and

The Debtors reserve the right to revoke or withdraw the Plan of Reorganization prior to the Confirmation Date with respect to any one or more of the Debtors. If the Debtors were to revoke or withdraw the Plan of Reorganization with respect to any one or more Debtors, then (i) the Plan of Reorganization and any settlement or compromise embodied in the Plan of Reorganization would be deemed null and void and (ii) nothing contained in the Plan of Reorganization, and no acts taken in preparation for consummation of the Plan of Reorganization, would (a) constitute a waiver or release of any Claims by or against, or any Equity Interests in, any of the Debtors or any other person or (b) prejudice in any manner the rights of any Debtor, Mirant or any other person in any proceedings involving such Debtor.

Subject to section 1127 of the Bankruptcy Code and, to the extent applicable, sections 1122, 1123 and 1125 of the Bankruptcy Code, the Debtors reserve the right to alter, amend or modify the Plan of Reorganization at any time prior to or after the Confirmation Date but prior to the substantial consummation of the Plan of Reorganization. A holder of a Claim or Equity Interest that has accepted the Plan of Reorganization would be deemed to have accepted such Plan of Reorganization, as altered, amended or modified, if the proposed alteration, amendment or modification does not materially and adversely change the treatment of the Claim or Equity Interest of such holder.

The Plan Documents and certain exhibits, lists, schedules, or documents to be executed in connection with the Plan of Reorganization, would be filed with the Bankruptcy Court not later than ten days prior to the Confirmation Hearing. Upon their filing, the Plan Documents and the other documents so filed could be inspected in the office of the Clerk of the Bankruptcy Court or its designee during normal business hours. The Plan Documents would be approved by the Bankruptcy Court pursuant to the Confirmation Order. Holders of Claims and Equity Interests may obtain a copy of the Plan Documents upon written request to: White & Case LLP, Wachovia Financial Center, Suite 4900, 200 South Biscayne Boulevard, Miami, Florida 33131, Attention: Mark B. Fuhr, Telephone: 305-371-2700, Facsimile: 305-358-5744.

The Bankruptcy Court could confirm the Plan of Reorganization only if it determines that the Plan of Reorganization complies with the technical requirements of Chapter 11, including, among other things, that (i) the Plan of Reorganization has properly classified Claims and Interests, (ii) the Plan of Reorganization complies with applicable provisions of the Bankruptcy Code, (iii) the Debtors have complied with applicable provisions of the Bankruptcy Code, (iv) the Debtors have proposed the Plan in good faith and not by any means forbidden by law, (v) disclosure of “adequate information” as required by section 1125 of the Bankruptcy Code has been made, (vi) the Plan of Reorganization has been accepted by the requisite votes of all classes of Holders of Claims and Interests (except to the extent that “cramdown” is available under section 1129(b) of the Bankruptcy Code), (vii) the Plan of Reorganization is in the “best interests” of all holders of Claims or Equity Interests in an Impaired Class, and (viii) all fees and expenses payable under 28 U.S.C. § 1930, as determined by the Bankruptcy Court at the Confirmation Hearing, have been paid or the Plan provides for the payment of such fees on the Effective Date. Under the Bankruptcy Code, the following steps must be taken to confirm the Plan of Reorganization.

The Bankruptcy Court would schedule a hearing on the confirmation of the Plan of Reorganization. At that hearing the Bankruptcy Court would consider whether the Plan of Reorganization satisfies the various requirements of the Bankruptcy Code, including whether the Plan of Reorganization is feasible and whether the Plan of Reorganization is in the best interests of the Holders of Claims and Equity Interests in the Debtors. At that time, the Debtors would submit a report to the Bankruptcy Court concerning the votes for acceptance or rejection of the Plan of Reorganization by the parties entitled to vote thereon.

Section 1128(b) of the Bankruptcy Code provides that any party in interest may object to confirmation of the Plan of Reorganization. Any objection to confirmation of the Plan of Reorganization would have to be made in writing and filed with the Bankruptcy Court and served on all required parties by the objection deadlines set by the Bankruptcy Court. Unless an objection to confirmation is timely served and filed, it may not be considered by the Bankruptcy Court.

At the Confirmation Hearing, the Bankruptcy Court could confirm the Plan of Reorganization only if all of the requirements of section 1129 of the Bankruptcy Code are met. Among the requirements for confirmation of a plan are that the plan is (i) accepted by all impaired classes of claims and equity interests or, if rejected by an impaired class, that the plan “does not discriminate unfairly” and is “fair and equitable” as to such class, (ii) feasible and (iii) in the “best interests” of creditors and interest holders that are impaired under the Plan of Reorganization.

The Debtors may request confirmation of the Plan of Reorganization, as it may be modified from time to time, under section 1129(b) of the Bankruptcy Code, and the Debtors reserve the right to modify the Plan of Reorganization to the extent, if any, that confirmation in accordance with section 1129(b) of the Bankruptcy Code requires modification.

Under section 1129(b) of the Bankruptcy Code, the Court may confirm a plan over the objection of a rejecting class, if, among other things, (i) at least one impaired Class of Claims has accepted the plan (not counting the votes of any “insiders” as defined in the Bankruptcy Code) and (ii) if the plan “does not discriminate unfairly” against and is “fair and equitable” to each rejecting class.

A plan does not discriminate unfairly within the meaning of the Bankruptcy Code if a rejecting impaired class is treated equally with respect to other classes of equal rank. A plan is fair and equitable as to a class of secured claims that rejects the plan if, among other things, the plan provides (i) (a) that the holders of claims in the rejecting class retain the liens securing those claims (whether the property subject to those liens is retained by the debtor or transferred to another entity) to the extent of the allowed amount of such claims and (b) that each holder of a claim of such class receives on account of that claim deferred cash payments totaling at least the allowed amount of that claim, of a value, as of the effective date of the plan, of at least the value of the holder’s interest in the estate’s interest in such property, (ii) for the sale, subject to section 363(k) of the Bankruptcy Code, of any property that is subject to the liens securing the claims included in the rejecting class, free and clear of the liens, with the liens to attach to the proceeds of the sale, and the treatment of the liens on proceeds under clause (i) or (iii) of this paragraph, or (iii) for the realization by such holders of the indubitable equivalent of such claims.

A plan is fair and equitable as to a class of unsecured claims that rejects the plan, if, among other things, the plan provides that (i) each holder of a claim in the rejecting class will receive or retain on account of its claim property that has a value, as of the effective date of the plan, equal to the allowed amount of the claim or (ii) no holder of a claim or interest that is junior to the claims of the rejecting class will receive or retain under the plan any property on account of such junior claim or interest.

A plan is fair and equitable as to a class of interests that rejects the plan if the plan provides, among other things, that (i) each holder of an interest of such class receive or retain on account of such interest property of

a value, as of the effective date of the plan, equal to the greatest of the allowed amount of any fixed liquidation preference to which such holder is entitled, any fixed redemption price to which such holder is entitled, or the value of such interest, or (ii) that no holder of an interest that is junior to the interests of such class will receive or retain under the plan any property on account of such junior interest.

As described above, holders of Mirant Bank Claims, Mirant Impaired Note Claims, Commodity Prepay Claims and Equipment Warehouse Facility Claims are impaired under the Plan of Reorganization. If one of these Classes does not vote as a Class to accept the Plan of Reorganization, we would request confirmation of the Plan of Reorganization under section 1129(b) of the Bankruptcy Code notwithstanding the deemed rejection of the Plan of Reorganization by such Class and would reserve the right to seek confirmation of the Plan of Reorganization under section 1129(b) of the Bankruptcy Code notwithstanding the rejection of the Plan of Reorganization by other Classes of Claims or Equity Interests.

With respect to each impaired Class of Claims and Equity Interests, confirmation of the Plan of Reorganization requires that each holder of a Claim or Equity Interest either (i) accept the Plan of Reorganization or (ii) receive or retain under the Plan of Reorganization property of a value, as of the Effective Date, that is not less than the value such holder would receive or retain if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code. To calculate the probable distribution to holders of each impaired Class of Claims and Equity Interests if the Debtors were liquidated under Chapter 7, a bankruptcy court must first determine the aggregate dollar amount that would be generated from the Debtors’ assets if its Chapter 11 case were converted to a Chapter 7 case under the Bankruptcy Code. This “liquidation value” would consist primarily of the proceeds from a forced sale of our assets by a Chapter 7 trustee.

The amount of liquidation value available to unsecured creditors would be reduced by, first, the claims of secured creditors to the extent of the value of their collateral, and, second, by the costs and expenses of liquidation, as well as by other administrative expenses and costs of both the Chapter 7 case and the Chapter 11 case. Costs of liquidation under Chapter 7 of the Bankruptcy Code would include the compensation of a trustee, as well as of counsel and other professionals retained by the trustee, asset disposition expenses, all unpaid expenses incurred by the Debtors in its Chapter 11 case (such as compensation of attorneys, financial advisors and accountants) that are allowed in the Chapter 7 case, litigation costs, and claims arising from the operations of Debtors during the pendency of the Chapter 11 case. The liquidation itself would trigger certain priority claims that otherwise would be due in the ordinary course of business. Those priority claims would be paid in full from the liquidation proceeds before the balance would be made available to pay general claims or to make any distribution in respect of equity interests. The liquidation would also prompt the rejection of a large number of executory contracts and unexpired leases and thereby create a significantly higher number of unsecured creditors.

The Debtors believe that the Plan of Reorganization meets the “best interests of creditors” test of section 1129(a)(7) of the Bankruptcy Code. We believe that the members of each impaired Class would receive greater value under the Plan of Reorganization than they would in a liquidation. See the Liquidation Analysis, a copy of which is attached hereto as Annex D.

In contrast, under the Plan of Reorganization, holders of Mirant Bank Claims, Mirant Impaired Note Claims, Commodity Prepay Facility Claims and Equipment Warehouse Facility Claims would receive a 100% recovery. Therefore, holders of such Claims and such Equity Interests would receive substantially more under the Plan of Reorganization than in a liquidation. Although the Debtors believe that the Plan of Reorganization meets the “best interests test” of section 1129(a)(7) of the Bankruptcy Code, there can be no assurance that the Bankruptcy Court will determine that the Plan of Reorganization meets this test. THESE ESTIMATES OF VALUE ARE SUBJECT TO A NUMBER OF ASSUMPTIONS AND SIGNIFICANT QUALIFYING CONDITIONS. ACTUAL VALUES AND RECOVERIES COULD VARY MATERIALLY FROM THE ESTIMATES SET FORTH HEREIN.

The Bankruptcy Code requires that the Bankruptcy Court determine that confirmation of a Plan of Reorganization is not likely to be followed by liquidation or the need for further financial reorganization of the Debtors. For purposes of showing that the Plan of Reorganization meets this feasibility standard, the Debtors and Blackstone have analyzed the ability of Reorganized Debtors to meet its obligations under the Plan of Reorganization and retain sufficient liquidity and capital resources to conduct its business.

The Debtors believe that with an adjustment of the maturities for the Mirant Impaired Notes and the Mirant Secured Credit Facility, its business would be able to return to viability. To further support its belief in the feasibility of the Plan of Reorganization, the Debtors have relied upon Pro Forma Financial Projections for Fiscal Years 2003 through 2008 contained in the Five-Year Projections, attached as Annex C hereto. The Five-Year Projections indicate that the Reorganized Debtors should have sufficient cash flow to pay and service its debt obligations. Accordingly, the Debtors believe that the Plan of Reorganization complies with the financial feasibility standard of section 1129(a)(11) of the Bankruptcy Code.

Holders of Claims against and Equity Interests in the Debtors are advised, however, that the Five-Year Projections were not prepared with a view toward compliance with the published guidelines of the American Institute of Certified Public Accountants or any other regulatory or professional agency or body or generally accepted accounting principles. Furthermore, Mirant’s independent certified public accountants have not compiled or examined the Projections and accordingly do not express any opinion or any other form of assurance with respect thereto and assume no responsibility for the Five-Year Projections.

The Five-Year Projections also assume that (i) the Plan of Reorganization would be confirmed and consummated in accordance with its terms, (ii) there would be no material change in legislation or regulations, or the administration thereof, including energy legislation or regulations, that will have an unexpected effect on the operations of Reorganized Debtors, (iii) there would be no change in United States generally accepted accounting principles that would have a material effect on the reported financial results of the Reorganized Debtors and (iv) there would be no material contingent or unliquidated litigation or indemnity claims applicable to the Reorganized Debtors. To the extent that the assumptions inherent in the Five-Year Projections are based upon future business decisions and objectives, they are subject to change. In addition, although they are presented with numerical specificity and considered reasonable by the Debtors when taken as a whole, the assumptions and estimates underlying the Five-Year Projections are subject to significant business, economic and competitive uncertainties and contingencies, many of which will be beyond the control of the Reorganized Debtors.

Accordingly, the Five-Year Projections are only estimates that are necessarily speculative in nature. It can be expected that some or all of the assumptions in the Five-Year Projections would not be realized and that actual results would vary from the Five-Year Projections, which variations could be material and are likely to increase over time. The Five-Year Projections should therefore not be regarded as a representation by the Debtors or any other person that the results set forth in the Five-Year Projections will be achieved. In light of the foregoing, readers are cautioned not to place undue reliance on the Five-Year Projections. The Five-Year Projections should be read together with the information in this Offering Circular and Disclosure Statement entitled “Risk Factors,” which sets forth important factors that could cause actual results to differ from those in the Five-Year Projections.

The Debtors are also subject to the informational requirements of the Exchange Act, as amended, and in accordance therewith files periodic reports and other information with the SEC relating to its business, financial statements and other matters. Such filings will not include projected financial information. The Debtors do not intend to update or otherwise revise the Five-Year Projections, including any revisions to reflect events or circumstances existing or arising after the date of this Offering Circular and Disclosure Statement or to reflect the occurrence of unanticipated events, even if any or all of the underlying assumptions do not come to fruition. Furthermore, the Debtors do not intend to update or revise the Five-Year Projections to reflect changes in general economic or industry conditions.

Mirant has not filed a registration statement under the Securities Act or any other federal or state securities laws with respect to the New 7.5% Mirant Senior Secured Notes (as referred to herein for purposes of the Plan of Reorganization as the “New 7.5% Mirant Senior Secured Notes”) that may be deemed to be offered by virtue of this solicitation. Mirant is relying on section 3(a)(9) and/or any other applicable section of the Securities Act and similar state law provisions to exempt Mirant from registering the offer of any securities that may be deemed to be made pursuant to this solicitation.

Generally, the Securities Act prohibits the offer of securities to the public unless a registration statement has been filed with the SEC and the sale of securities until such registration statement has been declared effective by the SEC, unless an exemption from registration is available. The Exchange Offers constitute an “offer” of securities under the Securities Act. Mirant is availing itself of section 3(a)(9) of the Securities Act, which provides an exemption from registration for exchanges of securities by the issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange. Accordingly, no registration statement is being filed with the SEC with respect to the Exchange Offers. The Company has filed a Statement on Form TO and a T-3 with the SEC.

Holders of securities who are deemed to be “underwriters” within the meaning of section 1145(b)(1) of the Bankruptcy Code or who may otherwise be deemed to be “underwriters” of, or to exercise “control” over, Mirant within the meaning of Rule 405 of Regulation C under the Securities Act may, under certain circumstances, be able to sell their securities pursuant to the more limited safe harbor resale provisions of Rule 144 under the Securities Act. Generally, Rule 144 provides that, if certain conditions are met (e.g., one year holding period with respect to “restricted securities,” volume limitations, manner of sale, availability of current information about the issuer, etc.), (i) any person who resells “restricted securities” and (ii) any “affiliate” of the issuer of the securities sought to be resold will not be deemed to be an “underwriter” as defined in section 2(11) of the Securities Act. Under paragraph (k) of Rule 144, the aforementioned conditions to resale will no longer apply to restricted securities sold for the account of a holder who is not an affiliate of Mirant at the time of such resale and who has not been such during the three-month period next preceding such resale, so long as a period of at least two years has elapsed since the later of (a) the Effective Date and (b) the date on which such holder acquired his or its securities.

Commencement of a Chapter 11 Case, even if only to confirm the Plan of Reorganization, could adversely affect the relationship between Mirant or its operating subsidiaries and their respective employees, customers and suppliers. If such relationships are adversely affected, Mirant’s working capital position and operating results could deteriorate materially. Such deterioration could adversely affect Mirant’s ability to consummate the Plan of Reorganization.

There can be no assurance that the Bankruptcy Court would decide that this Offering Circular and Disclosure Statement meets the disclosure requirements of the Bankruptcy Code or that the acceptances were effective for the purpose of approving the Plan of Reorganization. Section 1126(b) of the Bankruptcy Code provides that the holder of a claim against, or interest in, a debtor who accepts or rejects a plan of reorganization before the commencement of a Chapter 11 case is deemed to have accepted or rejected such plan of reorganization under the Bankruptcy Code so long as the solicitation of such acceptance was made in

accordance with applicable non-bankruptcy law governing the adequacy of disclosure in connection with such solicitation, or, if such laws do not exist, such acceptance was solicited after disclosure of “adequate information,” as defined in section 1125 of the Bankruptcy Code. In addition, Bankruptcy Rule 3018(b) provides that a holder of a claim or interest who has accepted or rejected a plan before the commencement of the case under the Bankruptcy Code shall not be deemed to have accepted or rejected the plan if the court finds after notice and a hearing that the plan of reorganization was not transmitted in accordance with reasonable solicitation procedures.

This Offering Circular and Disclosure Statement is being presented to satisfy the foregoing requirements. Mirant believes that its solicitation of votes to accept or reject the Plan of Reorganization is proper under applicable nonbankruptcy law, rules and regulations. Mirant cannot be certain, however, that its solicitation of acceptances or rejections would be approved by the Bankruptcy Court. If such approval were not obtained, then Mirant would potentially have to solicit votes to accept or reject the Plan of Reorganization from one or more classes of claims or interests that were not previously solicited. Mirant also would potentially have to seek to resolicit acceptances, and, in such event, confirmation of the Plan of Reorganization could be delayed and possibly jeopardized.

Section 1122 of the Bankruptcy Code requires that a plan classify claims against, and interests in, a debtor. The Bankruptcy Code also provides that, except for certain claims classified for administrative convenience, a plan may place a claim or interest in a particular class only if such claim or interest is substantially similar to the other claims or interests of such class. Mirant believes that all claims and interests have been appropriately classified in the Plan of Reorganization.

To the extent that the Bankruptcy Court would find that a different classification is required for the Plan of Reorganization to be confirmed, Mirant currently anticipates that it would seek (i) to modify the Plan of Reorganization to provide for whatever classification might be required for confirmation and (ii) to use the acceptances received from any creditor or shareholder pursuant to this solicitation for the purpose of obtaining the approval of the class or classes of which such creditor or shareholder ultimately is deemed to be a member. Any such reclassification of creditors or shareholders, although subject to the notice and hearing requirements of the Bankruptcy Code, could adversely affect the class in which such creditor or shareholder was initially a member, or any other class under the Plan of Reorganization, by changing the composition of such class and the vote required for approval of the Plan of Reorganization.

There can be no assurance that the Bankruptcy Court, after finding that a classification was inappropriate and requiring a reclassification, would approve the Plan of Reorganization based upon such reclassification. Except to the extent that modification of classification in the Plan of Reorganization requires resolicitation, Mirant would, in accordance with the Bankruptcy Code and the Bankruptcy Rules, seek a determination by the Bankruptcy Court that acceptance of the Plan of Reorganization by any holder pursuant to this solicitation will constitute a consent to the Plan of Reorganization’s treatment of such holder regardless of the class as to which such holder is ultimately deemed to be a member. Mirant believes that under the Bankruptcy Rules, Mirant would be required to resolicit votes for or against the Plan of Reorganization only when a modification adversely affects the treatment of the claim of any creditor or equity holder.

Mirant might seek to modify or amend the Plan of Reorganization at any time prior to the confirmation date in the manner provided for in section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019 or as otherwise permitted by law without additional disclosure pursuant to section 1125 of the Bankruptcy Code, except as the Bankruptcy Court might otherwise require. The potential impact of any such amendment or modification on the holders of claims and interests cannot be foreseen, but might include a change in the economic impact of the Plan of Reorganization on some or all of the classes or a change in the relative rights of such classes. If any of the terms of the Plan of Reorganization were amended in a manner determined by Mirant or the Bankruptcy Court, as appropriate, to constitute a material adverse change to the treatment of the claim of any creditor or the interest of any equity security holder, Mirant would promptly disclose any such

Mirant, prior to confirmation of the Plan of Reorganization, or prior to substantial consummation thereof, subject to the provisions of section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019, reserves the right to amend the terms of the Plan of Reorganization or waive any conditions thereto if and to the extent that Mirant determined that such amendments or waivers were necessary or desirable to consummate the plan. Mirant would give all holders of Claims and Equity Interests notice of any such amendments or waivers as might be required by applicable law and the Bankruptcy Court. If, after receiving sufficient acceptances but prior to confirmation of the Plan of Reorganization, Mirant were to modify the Plan of Reorganization, Mirant could use such previously solicited acceptances only if (i) all classes of adversely affected creditors and interest holders accepted the modification in writing or (ii) the Bankruptcy Court determined, after notice to designated parties, that such modification was de minimis or purely technical or otherwise did not adversely change the treatment of holders of accepting Claims and Interests. Mirant reserves the right to use acceptances of the Plan of Reorganization received in this solicitation to seek confirmation of the Plan of Reorganization under any case commenced under Chapter 11 of the Bankruptcy Code, whether such case is commenced by the filing of a voluntary or involuntary petition, subject to approval of the Bankruptcy Court.

If a Chapter 11 petition is filed by or against Mirant, Mirant reserves the right not to file the Plan of Reorganization, or, if it files the Plan, to revoke and withdraw such Plan of Reorganization or to revoke or withdraw the Plan of Reorganization with respect to one or more of the Debtors at any time prior to confirmation. If the Plan of Reorganization is revoked or withdrawn, the Plan of Reorganization and the ballots will be deemed to be null and void. In such event, nothing contained in the Plan of Reorganization would be deemed to constitute a waiver or release of any claims by or against Mirant, or interests of or in Mirant, or any other person or to prejudice in any manner the rights of Mirant or any other person.

If the requisite acceptances are not received or if the Plan of Reorganization is not confirmed, the Debtors may file their Chapter 11 petitions and attempt to formulate and propose a different plan or plans of reorganization. Such a plan or plans might involve either a reorganization and continuation of Mirant’s businesses or an orderly liquidation of assets. Mirant’s business could suffer from increased costs, erosion of customer confidence, and liquidity difficulties if it remained a debtor in possession during a lengthy Chapter 11 process while trying to negotiate a plan of reorganization. Mirant therefore believes that the Plan of Reorganization would enable Holders of Claims and Equity Interests to realize the greatest value under the circumstances and that, compared to any later alternative plan of reorganization, the Plan of Reorganization has the greatest chance to be confirmed and consummated.

If an out-of-court restructuring were not achieved through the Exchange Offers, Mirant believes that the Plan of Reorganization affords Holders of Claims and Equity Interests the potential for the greatest recovery and, therefore, would be in the best interests of such holders. If, however, the requisite acceptances of the Plan of Reorganization are not received, or the Plan of Reorganization is not confirmed and consummated, the theoretical alternatives would include: (i) formulation of an alternative plan of reorganization or (ii) liquidation of Mirant under Chapter 7 or 11 of the Bankruptcy Code.

As stated above, Mirant may file a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code and seek, as promptly as practicable thereafter, confirmation of the Plan of Reorganization or any other restructuring in its sole discretion. Mirant believes that the length of any bankruptcy proceedings that it commences, including one seeking confirmation of the Plan of Reorganization, would be subject to considerable uncertainty and that the completion of such proceedings could be delayed for reasons beyond the control of Mirant, including the need to solicit additional acceptances of the Plan of Reorganization after

commencement of a case. Even if the Plan of Reorganization were uncontested, it is estimated that the Plan of Reorganization would take approximately two months to confirm and could take longer if postpetition solicitations are required. Furthermore, even if all classes of impaired creditors and equity holders accept the Plan of Reorganization, the Plan of Reorganization may not be confirmed by the Bankruptcy Court. The Bankruptcy Court, which sits as a court of equity, may exercise substantial discretion in its rulings. Section 1129 of the Bankruptcy Code sets forth the requirements for confirmation and requires a finding, among other things, that the confirmation of a plan is not likely to be followed by the need for further financial reorganization and that the value of distributions to dissenting creditors and shareholders not be less than the value of distributions such creditors and shareholders would receive if Mirant were liquidated under Chapter 7 of the Bankruptcy Code. Although Mirant believes that the Plan of Reorganization meets such tests, there can be no assurance that the Bankruptcy Court would reach the same conclusion.

If no plan is confirmed and Mirant commences a bankruptcy case, Mirant may be forced to liquidate under Chapter 7 of the Bankruptcy Code, under which a trustee would be elected or appointed to liquidate Mirant’s assets for distribution to creditors in accordance with the priorities established by the Bankruptcy Code. It is impossible to predict precisely how the proceeds of the liquidation would be distributed to the respective holders of Claims against or Equity Interests in Mirant.

As described above, however, Mirant believes that in a liquidation under Chapter 7, additional administrative expenses involved in the appointment of a trustee or trustees and attorneys, accountants and other professionals to assist such trustees would cause a substantial diminution in the value of Mirant’s Estate. The assets available for distribution to creditors would be reduced by such additional expenses and by claims, some of which would be entitled to priority, which would arise by reason of the liquidation and from the rejection of leases and other executory contracts in connection with the cessation of operations and the failure to realize the greater going concern value of Mirant’s assets.

Mirant also could be liquidated pursuant to the provisions of a Chapter 11 plan of reorganization. In a liquidation under Chapter 11, Mirant’s assets could be sold in an orderly fashion over a more extended period of time than in a liquidation under Chapter 7. Thus, a Chapter 11 liquidation might result in larger recoveries than in a Chapter 7 liquidation, but the delay in distributions could result in lower present values received and higher administrative costs. Because a trustee is not required in a Chapter 11 case, expenses for professional fees could be lower than in a Chapter 7 case. Any distribution to the holders of Claims under a Chapter 11 liquidation plan, however, would probably be delayed substantially.


	MIRANT BELIEVES THAT THE PLAN OF REORGANIZATION AFFORDS SUBSTANTIALLY GREATER BENEFITS TO CREDITORS AND EQUITY INTEREST HOLDERS THAN WOULD A LIQUIDATION UNDER CHAPTER 7 OR CHAPTER 11 OF THE BANKRUPTCY CODE.

The Liquidation Analysis, prepared by Mirant with the assistance of Blackstone, is premised upon a liquidation in a Chapter 7 case. In the Liquidation Analysis, attached as Annex D hereto, Mirant has taken into account the nature, status, and underlying value of its assets, the ultimate realizable value of such assets, and the extent to which the assets are subject to Liens and security interests.

The likely form of any liquidation would be the sale of individual assets. Based on this analysis, it is likely that a liquidation of Mirant’s assets would produce less value for distribution to creditors than that recoverable in each instance under the Plan of Reorganization. In Mirant’s opinion, the recoveries projected to be available in liquidation are not likely to afford holders of Claims as great as a realization potential as does the Plan of Reorganization.

Although preferable to a Chapter 7 liquidation, Mirant believes that any alternative liquidation under Chapter 11 is a much less attractive alternative to creditors than the Plan of Reorganization because of the greater return Mirant anticipates is provided by the Plan of Reorganization.

Before voting to accept or reject the Plan of Reorganization, each holder of a Mirant Bank Claim, Mirant Impaired Note Claim, Commodity Prepay Facility Claim and Equipment Warehouse Facility Claim should carefully review the Plan of Reorganization attached as Appendix I and described herein under “The Plan of Reorganization.” All descriptions of the Plan of Reorganization set forth in this Offering Circular and Disclosure Statement are subject to the terms and conditions of the Plan of Reorganization. Instructions for voting on the Plan of Reorganization are set forth in the instructions contained in the enclosed beneficial owner ballots (and, in the case of nominees, master ballots which will be received at a later date).

The period during which beneficial owner ballots (the “Beneficial Owner Ballots”) and master ballots (the “Master Ballots”) will be accepted will terminate at 12:00 midnight, New York City time on June 27, 2003, unless and until Mirant, in its sole discretion, extends the date until which Beneficial Owner Ballots and Master Ballots will be accepted, in which case the voting Deadline will terminate at 12:00 midnight, New York City time on such extended date (the “Voting Deadline”). Except to the extent Mirant so determines or as permitted by the Bankruptcy Court, Beneficial Owner Ballots or Master Ballots that are received after the Voting Deadline will not be counted or otherwise used by Mirant in connection with Mirant’s request for confirmation of the Plan of Reorganization (or any permitted modification thereof).

Mirant reserves the absolute right, at any time or from time to time, to extend, by oral or written notice to the Voting Agent, the period of time (on a daily basis, if necessary) during which Beneficial Owner Ballots and Master Ballots will be accepted for any reason including, but not limited to, determining whether or not requisite acceptances of the Plan of Reorganization have been received, by making a public announcement of such extension no later than 9:00 a.m. (New York City time) on the first business day next succeeding the previously announced Voting Deadline. Without limiting the manner in which Mirant may choose to make any public announcement, Mirant will not have any obligation to publish, advertise, or otherwise communicate any such public announcement, other than by issuing a news release through the Business Wire. There can be no assurance that Mirant will exercise its right to extend the Voting Deadline. In the event that Mirant commences a Chapter 11 Case prior to the Voting Deadline, Mirant may use acceptances received prior to the Voting Deadline to obtain consummation of the Plan of Reorganization.

Mirant is providing copies of this Offering Circular and Disclosure Statement (including all exhibits and appendices) and related materials and, where appropriate, Beneficial Owner Ballots and Master Ballots (in either case, a “Solicitation Package”), to Registered Holders of Mirant Impaired Notes. Registered Holders of Mirant Impaired Notes, may include brokerage firms, commercial banks, trust companies, or other nominees. If such entities do not hold Mirant Impaired Notes for their own account, they must provide copies of the Solicitation Package (including the Beneficial Owner Ballots) to their customers and to beneficial owners of Mirant Impaired Notes. Any beneficial owner of Mirant Impaired Notes who has not received a Beneficial Owner Ballot should contact his, her or its nominee, or the Voting Agent.

Registered Holders of Mirant Impaired Notes should provide all of the information requested by the Ballots. Registered Holders of Mirant Impaired Notes should complete and return all Ballots received in the enclosed, self-addressed, postage paid envelope provided with each such Ballot.

The Voting Record Date for determining which Registered Holders of Mirant Impaired Notes are entitled to vote on the Plan of Reorganization is May 30, 2003. The respective trustees for each of the Mirant Impaired Notes will not vote on behalf of the Registered Holders of Mirant Impaired Notes. Holders of Mirant Impaired Notes must submit their own Ballots.

A beneficial owner holding Mirant Impaired Notes as record holder in its own name should vote on the Plan of Reorganization by completing and signing a Beneficial Owner Ballot and returning it directly to the Voting Agent on or before the Voting Deadline using the enclosed self-addressed, postage paid envelope.

A beneficial owner holding Mirant Impaired Notes in “street name” through a nominee may vote on the Plan of Reorganization by one of the following two methods (as selected by such beneficial owner’s nominee):


	(i) Complete and sign the enclosed Beneficial Owner Ballot. Return the Ballot to your nominee as promptly as possible and in sufficient time to allow such nominee to process the Ballot and return it to the Voting Agent by the Voting Deadline. If no self-addressed, postage paid envelope was enclosed for this purpose, contact the Voting Agent for instructions; or

	(ii) Complete and sign the pre-validated Beneficial Owner Ballot (as described below) provided to you by your nominee. Return the pre-validated Ballot to the Voting Agent by the Voting Deadline using the return envelope provided in the Solicitation Package.

Any Beneficial Owner Ballot returned to a nominee by a beneficial owner will not be counted for purposes of acceptance or rejection of the Plan of Reorganization until such nominee properly completes and delivers to the Voting Agent that Ballot or a Master Ballot that reflects the vote of such beneficial owner.

If any beneficial owner owns Mirant Impaired Notes through more than one nominee, such beneficial owner may receive multiple mailings containing the Beneficial Owner Ballots. The beneficial owner should execute a separate Beneficial Owner Ballot for each block of Mirant Impaired Notes that it holds through any particular nominee and return each Ballot to the respective nominee in the return envelope provided therewith. Beneficial owners who execute multiple Beneficial Owner Ballots with respect to Mirant Impaired Notes held through more than one nominee must indicate on each Beneficial Owner Ballot the names of ALL such other nominees and the additional amounts of such Mirant Impaired Notes so held and voted. If a beneficial owner holds a portion of the Mirant Impaired Notes through a nominee and another portion as a record holder, the beneficial owner should follow the procedures described in subparagraph (1)(a) above to vote the portion held of record and the procedures described in subparagraph (1)(b) above to vote the portion held through a nominee or nominees.

A nominee that on the Voting Record Date is the registered holder of Mirant Impaired Notes for one or more beneficial owners can obtain the votes of the beneficial owners of such Mirant Impaired Notes, consistent with customary practices for obtaining the votes of securities held in “street name,” in one of the following two ways:

The nominee may “prevalidate” a Beneficial Owner Ballot by (i) signing the Ballot, (ii) indicating on the Ballot the name of the registered holder, the amount of Mirant Impaired Notes held by the nominee for the beneficial owner, and the account numbers for the accounts in which such Mirant Impaired Notes are held by the nominee, and (iii) forwarding such Beneficial Owner Ballot, together with the Offering Circular and Disclosure Statement, a pre-addressed, postage-paid return envelope addressed to, and provided by, the Voting Agent, and other materials requested to be forwarded, to the beneficial owner for voting. The beneficial owner must then complete the information requested on the Beneficial Owner Ballot, review the certifications contained on the Ballot, and return the Ballot directly to the Voting Agent in the pre-addressed, postage-paid return envelope so that it is RECEIVED by the Voting Agent before the Voting Deadline. A list of the beneficial owners to whom “pre-validated” Ballots were delivered should be maintained by nominees for inspection for at least one year from the Voting Deadline.

If the nominee elects not to prevalidate Ballots, the nominee may obtain the votes of beneficial owners by forwarding the unsigned Beneficial Owner Ballots, together with the Offering Circular and Disclosure Statement, a pre-addressed, postage-paid return envelope provided by, and addressed to, the nominee, and other materials requested to be forwarded, to the beneficial owners. Each such beneficial owner must then indicate his, her or its vote on the Beneficial Owner Ballot, complete the information requested on the Ballot, review the certifications contained on the Ballot, execute the Ballot, and return the Ballot to the nominee. After collecting the Beneficial Owner Ballots, the nominee should, in turn, complete a Master Ballot compiling the votes and other information from the Beneficial Owner Ballots, execute the Master Ballot, and deliver the Master Ballot to the Voting Agent so that it is RECEIVED by the Voting Agent before the Voting Deadline. All Beneficial Owner Ballots returned by beneficial owners should either be forwarded to the Voting Agent (along with the Master Ballot) or retained by nominees for inspection for at least one year from the Voting Deadline. EACH NOMINEE SHOULD ADVISE ITS BENEFICIAL OWNERS TO RETURN THEIR BALLOTS TO THE NOMINEE BY A DATE CALCULATED BY THE NOMINEE TO ALLOW IT TO PREPARE AND RETURN THE MASTER BALLOT TO THE VOTING AGENT SO THAT IT IS RECEIVED BY THE VOTING AGENT BEFORE THE VOTING DEADLINE.

Mirant expects that DTC, as a nominee holder of Mirant Impaired Notes, will arrange for its participants to vote by executing an omnibus proxy in favor of such participants. As a result of the omnibus proxy, such participants will be authorized to vote their Voting Record Date positions held in the name of such securities clearing agencies.

In the case of a vote on the Plan of Reorganization, all Ballots must be signed by the holder of Mirant Impaired Notes of record or any person who has obtained a properly completed Ballot proxy from the record holder of Mirant Impaired Notes on such date. For purposes of voting to accept or reject the Plan of Reorganization, the beneficial owners of Mirant Impaired Notes will be deemed to be the “holders” of the Claims represented by such Mirant Impaired Notes. Unless otherwise ordered by the Bankruptcy Court, Beneficial Owner Ballots or Master Ballots that are signed, dated and timely received, but on which a vote to accept or reject the Plan of Reorganization has not been indicated, will not be counted. Mirant, in its sole discretion, may request that the Voting Agent attempt to contact such voters to cure any such defects in the Beneficial Owner Ballots or Master Ballots.

Under the Bankruptcy Code, for purposes of determining whether the requisite acceptances have been received from holders of Mirant Impaired Notes, only holders of Mirant Impaired Notes who actually vote will be counted. The failure of a holder of Mirant Impaired Notes to deliver a duly executed Ballot will be deemed to constitute an abstention by such holder of Mirant Impaired Notes with respect to voting on the Plan of Reorganization and such abstentions will not be counted as votes for or against the Plan of Reorganization.

Except as provided below, unless the Beneficial Owner Ballot or Master Ballot is timely submitted to the Voting Agent before the Voting Deadline together with any other documents required by such Beneficial Owner Ballot or Master Ballot, Mirant may, in its sole discretion, reject such Beneficial Owner Ballot or Master Ballot as invalid, and therefore decline to utilize it in connection with seeking confirmation of the Plan of Reorganization.

If a Beneficial Owner Ballot is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or another acting in a fiduciary or representative capacity, such person should indicate such capacity when signing and, unless otherwise determined by Mirant, must submit proper evidence

UNLESS THE BENEFICIAL OWNER BALLOT BEING FURNISHED IS TIMELY SUBMITTED TO THE VOTING AGENT ON A MASTER BALLOT OR PREVALIDATED BALLOT ON OR PRIOR TO THE VOTING DEADLINE, SUCH BALLOT WILL BE REJECTED AS INVALID AND WILL NOT BE COUNTED AS AN ACCEPTANCE OR REJECTION OF THE PLAN OF REORGANIZATION; PROVIDED, HOWEVER, THAT MIRANT RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO REQUEST OF THE BANKRUPTCY COURT THAT ANY SUCH BALLOT BE COUNTED.

Under the Bankruptcy Code, only holders of claims or interests in “impaired” classes are entitled to vote on a plan. Under section 1124 of the Bankruptcy Code, a class of claims or interests is deemed to be “impaired” under a plan unless (i) the plan of reorganization leaves unaltered the legal, equitable, and contractual rights to which such claim or interest entitles the holder thereof or (ii) notwithstanding any legal right to an accelerated payment of such claim or interest, the plan cures all existing defaults (other than defaults resulting from the occurrence of events of bankruptcy) and reinstates the maturity of such claim or interest as it existed before the default.

If, however, the holder of an impaired claim or interest will not receive or retain any distribution under the plan of reorganization on account of such claim or interest, the Bankruptcy Code deems such holder to have rejected the plan of reorganization, and, accordingly, holders of such claims and interests do not actually vote on the plan of reorganization. If a claim or interest is not impaired by the plan of reorganization, the Bankruptcy Code deems the holder of such claim or interest to have accepted the plan and, accordingly, holders of such claims and interests are not entitled to vote on the plan of reorganization.

Also, a holder of a claim or interest may vote to accept or to reject a plan of reorganization only if the claim or interest is “allowed,” which means generally that no party in interest has objected to such claim or interest. In the event of a dispute with respect to any Mirant Impaired Note Claim, any vote to accept or reject the Plan of Reorganization cast with respect to such claim will not be counted for purposes of determining whether the Plan of Reorganization has been accepted or rejected unless the Bankruptcy Court orders otherwise.

A vote may be disregarded if the Bankruptcy Court determines, pursuant to section 1126(e) of the Bankruptcy Code, that it was not solicited or procured in good faith or in accordance with the provisions of the Bankruptcy Code.

The Bankruptcy Code defines “acceptance” of a plan by a class of claims as acceptance by creditors in that class that hold at least two-thirds in dollar amount and more than one-half in number of the claims that cast ballots for acceptance or rejection of the plan of reorganization. Acceptance of a plan of reorganization by a class of interests requires acceptance by at least two-thirds of the amount of interests of such class that cast ballots for acceptance or rejection of the plan of reorganization.

The delivery of an accepting Beneficial Owner Ballot or Master Ballot pursuant to one of the procedures set forth above will constitute the agreement of the holder of Mirant Impaired Notes with respect to such Ballot to accept (i) all of the terms of, and conditions to, this acceptance solicitation and (ii) the terms of the Plan of Reorganization; provided, however, that all parties in interest retain their right to object to confirmation of the Plan of Reorganization pursuant to section 1128 of the Bankruptcy Code.

Any party who has previously submitted to the Voting Agent prior to the Voting Deadline a properly completed Beneficial Owner Ballot or Master Ballot may revoke such Ballot and change its vote by submitting

A withdrawal of Mirant Impaired Notes tendered for exchange will not have any effect on a vote for acceptance of the Plan of Reorganization with respect to such Mirant Impaired Notes. A change of vote for acceptance of the Plan of Reorganization will not have any effect on the tender, or consent, of or with respect to the Mirant Impaired Notes as to which a vote on the Plan of Reorganization is changed.

Unless otherwise directed by the Bankruptcy Court, all questions as to the validity, form, eligibility (including time of receipt), acceptance, and revocation or withdrawals of Ballots will be determined by the Voting Agent and Mirant in their sole discretion, which determination will be final and binding. Mirant reserves the right to reject any and all Ballots not in proper form, the acceptance of which would, in the opinion of Mirant or its counsel, be unlawful. Mirant further reserves the right to waive any defects or irregularities or conditions of delivery as to any particular Ballot. The interpretation (including the Ballot and the respective instructions thereto) by Mirant, unless otherwise directed by the Bankruptcy Court, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with deliveries of Ballots must be cured within such time as Mirant (or the Bankruptcy Court) determines. Neither Mirant nor any other person will be under any duty to provide notification of defects or irregularities with respect to deliveries of Ballots nor will any of them incur any liabilities for failure to provide such notification. Unless otherwise directed by the Bankruptcy Court, delivery of such Ballots will not be deemed to have been made until such irregularities have been cured or waived. Ballots previously furnished (and as to which any irregularities have not theretofore been cured or waived) will be invalidated.

If you have any questions or require further information about the voting procedures for voting your Mirant Impaired Notes or about the packet of material you received, or if you wish to obtain an additional copy of the Plan of Reorganization, this Offering Circular and Disclosure Statement, or any exhibits to such documents, please contact the Voting Agent.

Innisfree M&A Incorporated has been appointed as Voting Agent for the acceptance solicitation. Questions and requests for assistance with respect to Ballots may be directed to the Voting Agent at one of its addresses and telephone numbers set forth on the back cover of this Offering Circular and Disclosure Statement.

Mirant is not aware of any jurisdiction in which the solicitation for votes on the Plan of Reorganization is not in compliance with applicable law. If Mirant becomes aware of any jurisdiction in which the solicitation would not be in compliance with applicable law, Mirant will make a good faith effort to comply with any such law. If, after such good faith effort, Mirant cannot comply with any such law, the solicitation will not be made to the holder of Mirant Impaired Notes residing in such jurisdiction.

The following is a summary of certain United States federal income tax consequences of the Exchange Offers. This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations, administrative rulings and court decisions, all as in effect on the date hereof and all of which are subject to change or differing interpretations (possibly with retroactive effect). This summary is not a complete description of all of the consequences of the Exchange Offers and, in particular, does not address United States federal income tax considerations applicable to the holders of Exchange Offer Securities that are subject to special treatment under United States federal income tax law (including, for example, financial institutions, dealers in securities, insurance companies, tax-exempt entities (including private foundations), holders whose functional currency is not the United States dollar, holders that hold Exchange Offer Securities as part of a hedge, straddle or conversion transaction, or holders that are, or hold Exchange Offer Securities through, partnerships or other pass-through entities). No opinion of counsel or ruling of the Internal Revenue Service (the “IRS”) has been sought regarding any matter discussed herein. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax aspects set forth below. In addition, no information is provided in this discussion regarding the consequences of the Exchange Offers with respect to foreign, state or local taxes or federal taxes other than income taxes. This discussion applies only to holders of Exchange Offer Securities that hold such Exchange Offer Securities as capital assets within the meaning of section 1221 of the Code. HOLDERS OF EXCHANGE OFFER SECURITIES ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISOR REGARDING THE UNITED STATES FEDERAL, STATE, LOCAL AND ANY FOREIGN TAX CONSEQUENCES OF THE EXCHANGE OFFERS.

For purposes of this summary, a “U.S. holder” means a beneficial owner of an Exchange Offer Security that is, for United States federal income tax purposes, (i) a citizen or individual resident of the United States, (ii) a corporation created or organized in the United States or under the laws of the United States or any state (or the District of Columbia), (iii) an estate the income of which is subject to United States federal income taxation regardless of its source, or (iv) a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States fiduciaries have the authority to control all substantial decisions of the trust or (B) the trust was in existence on August 20, 1996 and properly elected to be treated as a United States person. A “non-U.S. holder” means any beneficial owner, other than an entity or arrangement classified as a partnership for United States federal income tax purposes, that is not a “U.S. holder.”

The Exchange. An exchange of Exchange Offer Securities for New Secured Notes will generally be treated as a “recapitalization” that qualifies as a “reorganization” within the meaning of Section 368(a)(1)(E) of the Code, if both the Exchange Offer Security surrendered and the New Secured Note received are treated as “securities” for United States federal income tax purposes. The determination of whether a debt instrument is treated as a security depends upon an evaluation of the term and nature of the debt instrument. Generally, corporate debt instruments with maturities of less than five years when issued are not considered securities, while corporate debt instruments with maturities of ten years or more when issued are considered securities. It is not clear whether the New Secured Notes or Senior Notes are “securities” for United States federal income tax purposes. Consequently, it is not clear whether the Exchange Offers will be treated as a recapitalization qualifying as a reorganization.

If the exchange of an Exchange Offer Security for a New Secured Note is not treated as a recapitalization qualifying as a reorganization, a U.S. holder should generally recognize gain or loss in an amount equal to the difference between the aggregate issue price of the New Secured Notes received in the exchange (which should not include amounts received with respect to accrued but previously unpaid interest) and the U.S. holder’s adjusted tax basis in the Exchange Offer Securities surrendered. Subject to the discussion of “market discount” below, any such gain or loss recognized upon the surrender of Senior Notes should generally be capital gain or loss and should be long term capital gain or loss if the U.S. holder’s holding period for the Senior Notes surrendered is more than one year at the time of the exchange. For U.S. holders of

Convertible Debentures, gain recognized upon the exchange of such debentures should generally be treated as ordinary interest income; any loss recognized should generally be treated as an ordinary loss to the extent of interest previously included in income with respect to such debenture, and thereafter, as a capital loss (which should be long-term capital loss if the U.S. holder’s holding period for the debenture is more than one year at the time of the exchange). The deductibility of capital losses is subject to limitations. The U.S. holder’s aggregate tax basis in the New Secured Notes received should generally be equal to their aggregate issue price. The U.S. holder’s holding period for the New Secured Notes received should generally begin on the day after the exchange.

If the exchange of an Exchange Offer Security for a New Secured Note is treated as a recapitalization qualifying as a reorganization, a U.S. holder should generally not recognize gain or loss as a result of the Exchange Offers. In such case, a U.S. holder’s adjusted tax basis in the New Secured Notes should equal the U.S. holder’s adjusted tax basis in the Exchange Offer Securities surrendered, and the holding period in the New Secured Notes will include the U.S. holder’s holding period in the Exchange Offer Securities surrendered.

Issue Price. The issue price of the New Secured Notes will depend upon whether either the Exchange Offer Securities or the New Secured Notes are “publicly traded” within the meaning of the Treasury regulations. If the Exchange Offer Securities are not, and the New Secured Notes will not be, “publicly traded,” the issue price of the New Secured Notes should generally equal their stated principal amount (i.e., their face amount). If the Exchange Offer Securities or the New Secured Notes are treated as “publicly traded,” the issue price of the New Secured Notes should generally be equal to their fair market value on the date of the exchange which could, among other things, require the U.S. holder to include original issue discount in income, as discussed below.

Accrued But Unpaid Interest. If there is accrued but previously unpaid interest on the Exchange Offer Securities surrendered in the exchange and the U.S. holder has not already taken that interest into income, then the payment of that interest in connection with the exchange will not be considered part of the amount realized in the exchange, but will instead be taxable to the U.S. holder as ordinary interest income in the taxable year of the exchange.

Market Discount. A U.S. holder who acquired an Exchange Offer Security after its original issuance at a market discount (generally defined as the amount, if any, by which a holder’s basis in a debt obligation immediately after its acquisition is exceeded by the adjusted issue price of the debt obligation at such time, subject to a de minimis exception) should generally be required to treat any gain recognized pursuant to the exchange as ordinary income to the extent of the market discount accrued during the U.S. holder’s period of ownership, unless the U.S. holder elected to include the market discount in income as it accrued. If an exchange is treated as recapitalization qualifying as a reorganization, the amount of any remaining accrued market discount not recognized in the exchange should generally be treated as ordinary income upon a disposition of New Secured Notes received pursuant to the exchange. However, if the New Secured Notes are treated as issued with “original issue discount,” within the meaning of the Code (“OID”), an exchange of Exchange Offer Securities with market discount (which exchange is treated as a recapitalization qualifying as a reorganization) may cause some or all of that market discount to effectively convert into OID under the rules discussed above. If a U.S. holder acquired its Exchange Offer Securities with market discount and did not elect to include market discount in income as it accrued, interest that the U.S. holder was required to defer on debt incurred or maintained to purchase or carry its Exchange Offer Securities under the market discount provisions should become deductible at the time of the exchange, up to the amount of gain the U.S. holder recognizes in the exchange. The market discount rules are complex. Any U.S. holder whose Exchange Offer Securities have or may have market discount is especially urged to consult its own tax advisor as to the effects of these rules on such U.S. holder.

Interest on New Secured Notes. A U.S. holder will be required to include stated interest on the New Secured Notes in income in accordance with the U.S. holder’s regular method of accounting. In addition, subject to a de minimis exception, a U.S. holder should generally be required to include any OID, in income over the period that such U.S. holder holds New Secured Notes, in accordance with a constant yield-to-

maturity method, regardless of whether the U.S. holder is a cash or accrual method taxpayer, and regardless of whether and when the U.S. holder receives payments of interest on the New Secured Notes. Accordingly, a U.S. holder could be treated as receiving original issue discount income without a corresponding receipt of cash. A debt instrument generally has OID if its stated redemption price at maturity (which excludes certain interest including the stated interest on the New Secured Notes) exceeds its issue price by more than a de minimis amount. The New Secured Notes should generally not be treated as issued with OID, if neither the Exchange Offer Securities nor the New Secured Notes are “publicly traded” within the meaning of the Treasury regulations. However, if either the Exchange Offer Securities or the New Secured Notes are “publicly traded” within the meaning of the Treasury regulations the New Secured Notes should generally be treated as issued with OID to the extent that the stated redemption price at maturity of the New Secured Notes exceeds their Issue Price (as long as such excess is greater than a de minimis amount). Any such OID that a U.S. holder includes in income will increase the adjusted tax basis of the U.S. holder in its New Secured Notes.

Amortizable Bond Premium. New Secured Notes should generally be treated as having “amortizable bond premium” if a U.S. holder’s aggregate adjusted tax basis in its New Secured Notes exceeds the sum of all amounts payable under such New Secured Notes after the exchange (excluding stated interest). If a U.S. holder so elects, this excess may generally be amortized as deductions over the term of the New Secured Notes, but the U.S. holder must reduce its adjusted tax basis in its New Secured Notes by the amount of the premium deducted in each taxable year. An election to amortize bond premium applies to all taxable debt obligations that the U.S. holder then owns or thereafter acquires, and may be revoked only with the consent of the IRS. The rules regarding amortizable bond premium are complex. Any U.S. holder whose New Secured Notes have or may have amortizable bond premium is especially urged to consult its own tax advisor as to the effects of these rules on such U.S. holder.

Acquisition Premium. Assuming that the exchange is treated as a recapitalization qualifying as a reorganization under the Code, a U.S. holder should generally be treated as having “acquisition premium” with respect to the New Secured Notes if the tax basis in the U.S. holder’s New Secured Notes (determined in the manner described above) is greater than the issue price of the New Secured Notes immediately after the exchange, but is less than or equal to the stated principal amount of the New Secured Notes. In this case, the amount of any OID includible in the U.S. holder’s gross income in any taxable year will be reduced by an allocable portion of the acquisition premium (generally determined by multiplying the annual OID accrual by a fraction, the numerator of which is the amount of the acquisition premium, and the denominator of which is the total OID on the New Secured Notes).

Sale or Exchange of the New Secured Notes. Except as discussed below with respect to market discount, any gain or loss recognized by a U.S. holder on a sale, exchange, or other disposition of its New Secured Notes should generally be capital gain or loss in an amount equal to the difference, if any, between the amount realized and its adjusted tax basis in the New Secured Notes immediately before the sale, exchange or other disposition. Any such gain or loss should generally be long term if the U.S. holder’s holding period for its New Secured Notes is more than one year at that time. The deductibility of capital losses is subject to limitations. Any market discount accrued prior to the time of the sale, exchange or other disposition and not already included in income should generally be recognized as ordinary interest income at that time. Different rules may apply to the treatment of accrued market discount in tax-free exchanges. Any U.S. holder whose New Secured Notes have or may have amortizable bond premium is especially urged to consult its own tax advisor as to the effects of these rules on such U.S. holder.

Treatment of Nontendering Holders of Exchange Offer Securities. There will be no United States federal income tax consequences from the Exchange Offers to holders of Exchange Offer Securities that do not tender their notes pursuant to the Exchange Offers.

The Offer and Subsequent Dispositions. Non-U.S. holders should generally not be subject to United States federal income tax on any gain or loss recognized in the exchange or in a subsequent disposition of New Secured Notes received in the exchange, unless


	•	the gain or loss is effectively connected with the conduct of a United States trade or business (and, in some circumstances, the gain is attributable to a United States permanent establishment under an applicable income tax treaty), or

	•	the non-U.S. holder is an individual and is present in the United States for 183 days or more during the taxable year (or otherwise has a “tax home” in the United States) and certain other conditions are met.

Payments of Interest and Accrual of Original Issue Discount. Subject to the discussions of withholding and backup withholding below, under the “portfolio interest exemption,” a non-U.S. holder should generally not be subject to United States federal income tax on payments of interest or on any accrual of OID on the Exchange Offer Securities surrendered in the exchange (including amounts received in respect of accrued but previously unpaid interest) or on the New Secured Notes, provided that


	•	the non-U.S. holder does not actually or constructively own 10% or more of the total combined voting power of all classes of Mirant stock entitled to vote,

	•	the non-U.S. holder is not, and is not treated as, a bank receiving interest on an extension of credit pursuant to a loan agreement entered into in the ordinary course of its trade or business,

	•	the non-U.S. holder is not a controlled foreign corporation that is related to Mirant (directly or indirectly) through stock ownership,

	•	the non-U.S. holder’s receipt of interest and any accrual of original issue discount on the New Secured Notes is not effectively connected with the conduct of a United States trade or business, and

	•	certain certification requirements are met.

If the interest or OID is not “portfolio interest,” it should generally be subject to federal income and withholding tax at a rate of 30%, unless that tax is reduced or eliminated pursuant to an applicable income tax treaty or that interest or OID is effectively connected with the conduct of a United States trade or business and, in either case, the appropriate statement has been provided.

If interest, OID, gain or income on an Exchange Offer Security surrendered in the exchange (including amounts received in respect of accrued but previously unpaid interest) or on the New Secured Notes held by a non-U.S. holder is effectively connected with the conduct of a trade or business in the United States by the non-U.S. holder, the non-United States holder should generally be subject to United States federal income tax on the interest, OID, gain or income at standard United States federal income tax rates. In addition, if the non-U.S. holder is a foreign corporation, it may be subject to a branch profits tax equal to 30% of its “effectively connected earnings and profits” within the meaning of the Code for the taxable year, as adjusted for certain items, unless it qualifies for a lower rate under an applicable income tax treaty.

Cancellation of a portion of Mirant’s outstanding indebtedness for United States federal income tax purposes should generally result from an exchange pursuant to the Exchange Offers only if either the New Secured Notes or the Exchange Offer Securities are treated as “publicly traded,” and then the amount of cancellation of indebtedness income (“CODI”) realized by Mirant should generally equal the excess, if any, of the adjusted issue price of the Exchange Offer Securities over the fair market value, on the date of the exchange, of the New Secured Notes or the fair market value, on the date of the exchange, of the Exchange Offer Securities if they are publicly traded and the New Secured Notes are not. If Mirant recognizes CODI, net operating losses and net operating loss carryovers may generally offset all or a portion of such CODI (although some liability for federal alternative minimum tax and state income tax may remain). Whether

Mirant will have sufficient NOLs to fully offset any CODI actually recognized will depend upon a number of factors, including the amount of CODI and the amount of operating losses created by operations during the current taxable year of Mirant. If the exchange occurs pursuant to the Plan of Reorganization, Mirant should generally not recognize any CODI realized from the exchange. Instead, Mirant should generally be required to reduce certain of its tax attributes, including net operating losses, by the amounts of CODI not recognized. The required attribute reduction is generally applied to reduce NOLs, to the extent of such NOLs, and certain other tax attributes of Mirant and its property.

In certain circumstances, a holder of Exchange Offer Securities that exchanges such securities for New Secured Notes and recognizes significant losses in excess of certain threshold amounts either upon such exchange or the later disposition of the New Secured Notes may be obligated to disclose its participation in such transaction in accordance with recently issued Treasury regulations governing so-called “tax shelters” and other potentially tax-motivated transactions. Holders of Exchange Offer Securities should consult their tax advisors concerning any possible disclosure obligation under such Treasury regulations with respect to the exchange of their Exchange Offer Securities or the disposition of New Secured Notes received in such exchange.

Payments of principal and interest, accruals of OID, and payments of proceeds from the sale, retirement or other disposition of a New Secured Note may be subject to “backup withholding” tax under Section 3406 of the Code if a recipient of those payments fails to furnish to the payor certain identifying information. Any amounts deducted and withheld should generally be allowed as a credit against that recipient’s United States federal income tax, provided that appropriate proof is provided under rules established by the IRS. Furthermore, certain penalties may be imposed by the IRS on a recipient of payments that is required to supply information but that does not do so in the proper manner. Backup withholding should generally not apply with respect to payments made to certain exempt recipients, such as corporations and financial institutions. Information may also be required to be provided to the IRS concerning payments, unless an exemption applies. United States holders should consult their tax advisors regarding their qualification for exemption from backup withholding and information reporting and the procedures for obtaining such an exemption.

For all of the reasons set forth in this Offering Circular and Disclosure Statement, Mirant believes that (i) exchange of the Exchange Offer Securities for the New Secured Notes at the exchange rates set forth herein and (ii) the exchange of the Mirant Bank Claims for the Mirant Secured Credit Facility is preferable to all other alternatives. If Mirant determines it is more advantageous and expeditious, Mirant may commence a Chapter 11 case. In such event, Mirant believes that the confirmation and consummation of the Plan of Reorganization will be preferable to other alternatives. Consequently, Mirant urges (i) all holders of Exchange Offer Securities to tender such Exchange Offer Securities for exchange, (ii) all eligible holders of Exchange Offer Securities to vote to ACCEPT the Plan of Reorganization, and to complete and return their Letters of Transmittal and Consent and/or Notice of Guaranteed Delivery and Consent and the ballots so that they will be RECEIVED by the Depositary and the Voting Agent on or before 5:00 p.m., New York City Time, on June 27, 2003, and (iii) all holders of Institutional Claims to vote to ACCEPT the Plan of Reorganization and return the ballots so that they will be RECEIVED by the Voting Agent on or before 5:00 p.m., New York City time on June 27, 2003.


	By:	/s/ J. WILLIAM HOLDEN, III



	Name: J. William Holden, III


	Title:	Senior Vice President and Treasurer

Mirant has appointed Innisfree M&A Incorporated as (i) the Information Agent for the Exchange Offers and (ii) the Voting Agent for acceptances of the Plan of Reorganization. All inquiries relating to this Offering Circular and Disclosure Statement and the transactions contemplated hereby should be directed to the Information Agent at the telephone numbers and address set forth below. All Ballots to vote on the Plan of Reorganization should be sent to the Voting Agent at the address below so as to be received prior to the Voting Deadline.

The Information Agent for the Exchange Offers and the Voting Agent for or acceptances of the Plan of Reorganization is:

Mirant has appointed Deutsche Bank Trust Company Americas as the Exchange Agent for the Exchange Offers. All completed Letters of Transmittal and agent’s messages should be directed to the Exchange Agent at one of the addresses set forth below. All questions regarding the procedures for tendering in the Exchange Offers and requests for assistance in tendering your Exchange Offer Securities should also be directed to the Exchange Agent at one of the following telephone numbers and addresses:

Delivery To: Deutsche Bank Trust Company Americas, Exchange Agent for the Exchange Offers

Delivery of a Letter of Transmittal and consent or agent’s message to an address other than the address listed above or transmission of instructions by facsimile other than as set forth above is not valid delivery of the Letter of Transmittal and consent or agent’s message.

Requests for additional copies of this Offering Circular and Disclosure Statement, Mirant’s 2002 Annual Report on Form 10-K, the enclosed Letter of Transmittal and Consent, the enclosed Notice of Guaranteed Delivery and Consent or any enclosed Ballot may be directed to either the Exchange Agent or the Information Agent at the respective telephone numbers and addresses listed above.

This term sheet (the “Term Sheet”) sets forth the material terms for a restructuring of certain credit facilities of Mirant Corporation (“Mirant”) and Mirant Americas Generation, LLC (“MAG”) as described below. This Term Sheet is not in any respect a commitment with respect to any transaction by any person, including, without limitation, any current or proposed lender, agent or issuer. No commitment or obligation shall arise or exist under or in connection with this Term Sheet or any negotiations, discussions, drafts of other communications pursuant to, or in connection with, this Term Sheet unless, until, and subject to, the execution and delivery by the affected lender, agent or issuer of written, definitive loan and credit agreement(s) with the relevant Borrowers (as hereinafter defined).


		assets of each Guarantor, except the Guarantors that are listed on Part II of Schedule A (the *“Pledgors”); provided* that debt secured by Chalk Point and Potomac River shall be limited to $50 million each in aggregate principal amount, including, without limitation (the *“Collateral”*): (a) all equity interests and indebtedness owned directly by any of the Pledgors (which pledge, in the case of voting equity interests issued by any first tier foreign subsidiary, will be limited to 65% of such voting equity interests), and (b) substantially all other tangible and certain intangible assets of each Pledgor, including, without limitation, all real property rights (including leaseholds), accounts receivable, inventory, contract rights, equipment, intellectual property, general intangibles, investment property, cash and bank accounts and all proceeds and products of the foregoing; unless, in case of any Pledgor, the creation or enforcement of such lien would (x) violate or cause a default under any applicable law or any contractual restriction or (y) require the consent of any third party. In addition, neither account control agreements nor foreign intellectual property filings will be required. In the event any Pledgor or Guarantor ceases to be a subsidiary as a result of transactions permitted by the Restructured Credit Facilities, any guaranty given by such Guarantor or any security interests granted by such Pledgor will be automatically released. Each Pledgor will use commercially reasonable efforts to pledge 65% of the voting equity interests issued by any first tier foreign subsidiary of such Pledgor prior to the Closing Date.

		Pursuant to the terms of a security and hypothecation agreement (the *“Security Agreement”) and an intercreditor agreement (the “Intercreditor Agreement”), all of the Collateral will be shared by the Lenders on a first priority basis pari passu* with (x) the holders (the *“New Noteholders”) of the new secured notes (the “New Notes”) issued in exchange for, or to refinance prior to their respective maturity, Mirant’s $750 million 2.5% Convertible Senior Debentures due 2021, Mirant’s $200 million 7.4% Senior Notes due 2004 and MAG’s $500 million 7.625% Senior Notes due 2006 (collectively, the “Existing Public Debt”); provided* such New Notes have maturities on or after the Maturity Date and no amortization or mandatory prepayments prior thereto, and (y) holders of debt issued in exchange for, or to refinance prior to their respective maturity, the Restructured Credit Facilities or the New Notes.

Intercreditor Agreement		Pursuant to the terms of the Intercreditor Agreement to be entered into among the Lenders and the New Noteholders, the Lenders and the New Noteholders shall agree among themselves that the proceeds from any disposition of the Collateral following an exercise of remedies shall be applied as follows:


	the proceeds from any of the Collateral shall be applied first to repay the outstanding Borrowings under the Restructured MAG Credit Facility, and second after all amounts outstanding under the Restructured MAG Credit Facility shall have been repaid in full, to ratably repay the New Notes and to repay all amounts outstanding under the Restructured Mirant Credit Facility.


		third anniversary of the Closing Date to each Lender on such Lender’s outstanding and unused commitments under the Restructured Credit Facilities at such time if on or prior to the third anniversary of the Closing Date, the aggregate outstanding principal amount of, and unused commitments under, the Restructured Credit Facilities are not repaid or reduced by $300 million since the Closing Date.

		An unused commitment fee of 50 basis points per annum shall be payable on the unused portion of each Lender’s share of the Mirant Revolving Facility, such fee to be payable monthly and on the date of termination or expiration of the commitments.

Optional Commitment Reduction		The Borrower may, upon at least five business day’s notice, terminate or cancel, in whole or in part, the unused portion of the Mirant Revolving Facility; provided, however, that each partial reduction shall be in an amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof.

Optional Prepayments		The Borrower may, upon at least five business days’ notice, prepay, in full or in part, amounts outstanding under the Restructured Credit Facilities; provided, however, that each partial prepayment shall be in an amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof.

Mandatory Prepayments and Commitment Reductions		Net cash proceeds from the following sources (such prepayments, *“Mandatory Prepayments”*) shall be applied toward amounts outstanding under the Restructured Credit Facilities:

		• 100% of the net cash proceeds of all asset sales or other dispositions of property of Mirant or any of its subsidiaries above $561 million,

		• 100% of the net cash proceeds of insurance proceeds to the extent such insurance proceeds were not used to restore or replace the assets which suffered the casualty in accordance with the terms of the Restructured Credit Facilities,

		• 100% of the net cash proceeds from any issuance of any additional debt by Mirant or any of its subsidiaries (other than refinancing existing indebtedness, project finance indebtedness or purchase money indebtedness) or 50% of the net cash proceeds from any issuance of equity by Mirant permitted under the Restructured Credit Facilities, other than any such proceeds used to retire any of the Existing Public Debt within six months of the issuance of such additional debt or equity, and

		• 50% of Excess Cash Flow (to be defined in the Restructured Credit Facilities).

Application of Prepayments		All prepayment (mandatory or optional) amounts shall be applied pro rata to repay the outstanding Borrowings under the Restructured MAG Credit Facility and the Restructured Mirant Credit Facility; provided that prepayments from net cash proceeds of asset sales or other dispositions of property of Mirant or any of its

subsidiaries in excess of $561 million shall be applied, first to repay the outstanding Borrowings under the Restructured MAG Credit Facility and, second after all amounts outstanding under the Restructured MAG Credit Facility shall have been repaid in full, to repay the outstanding Borrowings under the Restructured Mirant Credit Facility. With respect to the Restructured Mirant Credit Facility all such prepayment amounts shall be applied, first to repay on a ratable basis all amounts outstanding under the Mirant Term A Facility, second, after all amounts outstanding under the Mirant Term A Facility shall have been repaid in full, to repay on a ratable basis amounts outstanding under the Mirant Term B Facility and third, after all amounts outstanding under the Mirant Term B Facility shall have been repaid in full, to repay the Revolving Loans or cash collateralize the Letters of Credit.


1.	Entities marked by an * may be dissolved as a result of organizational simplification.

2.	Entities marked in italics are permitted to pledge their assets, but they are prohibited under the Existing MAG Credit Facilities from becoming guarantors.

3.	Entities marked in bold are only permitted to enter into subordinated guarantees.

4.	Entities marked in *bold and italics*, i.e., Mirant Potomac River, LLC and Mirant Chalk Point, LLC, will provide guaranties and secure debt in an amount not exceeding $50 million each.

5.	The ownership interests of the following entities are not permitted to be pledged: West Georgia Generating Company; Wrightsville Development Funding, LLC; Mirant Caribe, Inc.; Mirant Caribbean, Inc.; Mirant Americas Retail Energy Marketing, LP; Wellcom, LLC; CEMIG Investments, LLC.; Coyote Springs 2, LLC and Mirant Americas Energy Capital Assets, LLC.


1.	Entities marked by an * may be dissolved as a result of organizational simplification.

2.	Entities marked in *bold and italics*, i.e., Mirant Potomac River, LLC and Mirant Chalk Point, LLC, will secure debt in an amount not exceeding $50 million each.

3.	The ownership interests of the following entities are not permitted to be pledged: West Georgia Generating Company; Wrightsville Development Funding LLC; Mirant Caribe, Inc.; Mirant Caribbean, Inc.; Mirant Americas Retail Energy Marketing, LP; Wellcom, LLC; CEMIG Investments, LLC; Coyote Springs 2, LLC and Mirant Americas Energy Capital Assets, LLC.

The following projections (the “Five-Year Projections”) were prepared by Mirant based upon, among other things, the anticipated future financial condition and results of operations of Mirant.

Although the forecasts represent the best estimates of Mirant, as of the date hereof of, the projected results of operations and financial position of Mirant after giving effect to the entry by MAG into the MAG Secured Credit Facility and the consummation of the MAG Exchange Offer collectively, the “Global Restructuring Transactions”, they are only estimates, and actual results may vary considerably from forecasts. Consequently, the inclusion of the forecast information herein should not be regarded as a representation by Mirant, Mirant’s advisors or any other person that the forecast results will be achieved.

Mirant does not generally publish its business plans and strategies or make external projections of its anticipated financial position or results of operations. Accordingly, after the Effective Date (as defined below), Mirant does not intend to update or otherwise revise the Five-Year Projections to reflect circumstances existing since their preparation or to reflect the occurrence of unanticipated event. Furthermore, Mirant does not intend to update or revise the Five-Year Projections to reflect changes in general economic or industry conditions.

The Five-Year Projections were not prepared with a view toward general use, but rather for the limited purpose of providing information in conjunction with the Global Restructuring Transactions. Accordingly, the Five-Year Projections were not intended to be presented in accordance with the published guidelines of the American Institute of Certified Public Accountants regarding financial projections, nor have they been presented in lieu of pro forma historical financial information, and accordingly, are not intended to comply with Rule 11-03 of Regulation S-X of the SEC. In addition Mirant’s independent auditors have neither examined nor compiled the Five-Year Projections and accordingly assume no responsibility for them. Reference should be made to this Offering Circular and Disclosure Statement. See “Risk Factors — Risks Related to Our Business” for a discussion of the risks related to the Five-Year Projections.

The Five-Year Projections assume that the Global Restructuring Transactions are completed on July 31, 2003 (the “Effective Date”). Mirant believes that the projections will not change materially even if the Effective Date does not occur on the assumed Effective Date. Projected unaudited consolidated financial statements for Mirant are included for the five months ended December 31, 2003 and each twelve-month period ending December 31, 2004, 2005, 2006, 2007 and 2008.

Additional information relating to the principal assumptions used in preparing the Five-Year Projections is set forth below.

The Five-Year Projections assume that the Global Restructuring Transactions will be consummated in accordance with its terms, and that all transactions contemplated by the Global Restructuring Transactions will be consummated by the assumed Effective Date.

The generating plants owned or controlled by us are under two categories: those with market-dependent gross margins and those with contractually fixed gross margins. For the Five-Year Projections we have relied on financial models of the contracts for the latter category, while market models were used for the former. In general, we use both short-term and long-term market models. The projections do not incorporate impacts which may result from our accounting for commodity financial instruments at fair value through earnings, rather than as cash flow hedges. See Note 3 of Notes to Consolidated Financial Statements in our 2002 Annual Report on Form 10-K.

The short-term model assumes a relationship among electricity demand, weather, a generation supply curve, certain market conditions, distributions of fuel prices observed by the supply curve, transmission constraints, and other operating constraints of our units. This model produces a distribution of power prices which, in combination with underlying fuel prices used by our units and operating characteristics of our units, is used to project expected cash flows and recommend forward power and fuel hedges for each generating asset.

The long-term model is a production cost-based model that incorporates the fundamentals of power supply and demand through a simulation of weather, business cycles, hydro supply, unit failures, and fuel prices. Using these sets of demand and supply curves, we project hourly market prices and calculate the gross margins and other operating characteristics for different generating units.

In the short to medium term, regions across the United States are either over-built or under-built. In the long-term, once an equilibrium reserve margin is reached (assumed to be 12% to 15%, depending on the region), power prices are expected to provide a return sufficient to solicit market entry of new units, but to not be so high as to attract too many units. The Five-Year Projections assume supply-demand equilibrium is achieved between 2007 and 2011, depending on the region.

With regard to plant-level operating costs, we estimate annual costs based on historic levels, anticipated run profiles, and a forward view of inflation and prices. These costs include maintenance expenditures under Long-term Services Agreements (“LTSA”) where applicable.

The tables below reflect market assumptions underlying the projected gross margin and revenue assumptions in the financial forecast.

Power prices are rounded to the nearest $1.00, and gas prices are rounded to the nearest $0.10.

Gas prices are for regional trading hubs and do not include LDC charges and taxes.

2003 and 2004 numbers are based on forward-market prices. 2005 to 2008 are based on fundamental modeling.

Curve date for New York, New England, and California is October 31, 2002. Henry Hub price assumption shown here was for that date.

Curve date for Mid-Atlantic is November 15, 2002. Henry Hub gas price assumption used for Pennsylvania, New Jersey and Maryland was $3.9 in 2003 and $3.8 in 2004 (rest unchanged).

The strategy going forward will focus on improving the capital efficiency of commercial operations, while reducing collateral requirements. Power and gas operations will focus on regions with a critical mass of assets. Staff and cost reductions will be made in line with the refocused scope of the business.

The Five-Year Projections assume that contributions from marketing and asset optimization and discretionary trading increase over the 2003 to 2008 period. Multilateral clearing functions are expected to allow us to realize further efficiencies in collateral required to support its commercial activities. New entrants are expected to continue to enter into the business, providing additional liquidity.

Gross margins from marketing, asset optimization and trading activities are expected to grow by an average of 12% per year based on specific opportunities in each of our target markets. We expect continued market evolution to give us access to increased opportunity every year as new sections of the value chain open, creating additional sources of revenue. We intend to remain in markets that are evolving towards fair competition for all participants.

We launched two phases of cost cutting in 2002 that are expected to result in annualized 2004 cost reductions of $275 million compared to 2001 levels, split 40% internationally and 60% domestically. Cost savings include headcount reductions, elimination of vacancies, consolidation of overhead functions, office closings and greater efficiency. Labor costs are anticipated to decline as well through a combination of asset sales, lay offs, office closings and attrition. These measures are consistent with our revised plan to become stronger, more flexible and more focused in our target markets.

The capital expenditures in the Five-Year Projections relate primarily to safety, reliability, environmental compliance and contract obligations. Expenditures include completion of certain construction programs, required environmental investments, maintenance costs through LTSAs and limited funding for preservation of suspended project opportunities.

The figures in the tables below reflect the capital expenditure budget for 2003.

In Asia, our operations are characterized primarily by long-term contracts with the Philippine government-owned National Power Corporation.

In the Caribbean, we have ownership in electric utilities, power plants and transmission facilities in four countries. In Jamaica, electricity demand growth is expected to be approximately 4.5%. In Trinidad and Tobago, this rate is 3%. In Grand Bahama, we expect 3% per year increases from the Port Authority, based on historical experience. In Curacao, the majority of revenue is derived from capacity payments and is not affected by growth of energy consumption.

We anticipate approximately $825 million of net proceeds from additional asset sales in 2003 and 2004 of which $275 million has already been achieved. These divestitures could include assets in the southeast United States and Texas, as well as smaller, ancillary investments.

The Five-Year Projections incorporate U.S. federal, foreign, state and local taxes as applicable. The existing and projected U.S. federal net operative losses have resulted in no U.S. federal income taxes being provided in this model. Deferred taxes have not been provided in this model. Deferred taxes have not been included as part of these projections. The assumptions in the projections do not consider utilization of available net operating loss.

The Five-Year Projections assume that we implement the Restructuring Transactions on July 31, 2003, in accordance with the terms described in this Offering Circular and Disclosure Statement and that debt instruments affected by the Global Restructuring Transactions receive the indicated consideration. The Five-Year Projections assume that 100% of our existing credit facilities and 85% of the Exchange Offer Securities are refinanced and exchanged, respectively. For illustrative purposes, all unrestricted cash is used to reduce the Corporate Bank Debt.

As discussed in the Risk Factors section of this document, if we were to seek Chapter 11 relief, there could be a substantial disruption to our trading operations. We anticipate that absent an Out-of-Court Alternative, counterparties of our trading operations might be unwilling to transact with us for some period of time. The Five-Year Projections do not incorporate any of these negative impacts.

As discussed in the Risk Factors section, in addition to the negative impacts on gross margins, our assets and liabilities would be affected. Among these effects, we expect that a significant portion of our outstanding letters of credit would be drawn. We also anticipate a negative impact on our mark-to-market assets and

Each of the following tables summarizes our projections for several distinct periods including the five months ended December 31, 2003 and each of the twelve months ending December 31, 2004, 2005, 2006, 2007 and 2008. The projections include Projected Consolidated Summary Statement of Income Data, Projected Consolidated Summary Balance Sheet Data and Projected Consolidated Summary Statement of Cash Flow Data, as well as Projected Pro Forma Consolidated Balance Sheet Adjustments for July 31, 2003.

The following liquidation analysis (the “Analysis”) has been prepared by us as an estimate of the values that might be realized by all classes of creditors in the event our assets were to be liquidated in Chapter 7 proceedings under the Bankruptcy Code. A Chapter 7 liquidation consists generally of the cessation of business, the identification and assembly of assets, and the initiation of distressed or “forced” sales of our assets by a court-appointed Chapter 7 trustee, with subsequent distribution of the net proceeds of such asset dispositions to creditors in accordance with statutory priorities. Unless otherwise noted, the Analysis assumes that the liquidation occurs over a six-month period.

The proceeds from Chapter 7 asset sales and recoveries would be first applied to satisfy the claims of structurally-senior creditors and the costs and expenses of the Chapter 7 case (such as the fees of the trustee, and of counsel and other professionals including financial advisors and accountants retained by the trustee, asset disposition expenses, litigation costs, and claims arising from the wind-down of our business during the Chapter 7 case).

This Analysis has been prepared assuming that our assets, including assets of any non-debtor affiliates, and stock of subsidiaries are liquidated. As described more fully in the footnotes, in some cases the Analysis assumes a discrete sale of certain assets such as accounts receivable, while in other cases it assumes a sale of entire businesses or power plants as going concerns. Unless otherwise noted, the Analysis is based on the book values of our assets and liabilities as of December 31, 2002.

The Analysis presented below is premised on numerous estimates and assumptions which, although developed and considered reasonable by our management, are inherently subject to significant economic and competitive uncertainties and contingencies beyond the control of management, and could be subject to change during the course of an actual liquidation. In particular, there are currently numerous companies in the energy sector in which are the subject of a liquidation or financial restructuring, or which are attempting to sell assets. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE VALUES REFLECTED IN THE LIQUIDATION ANALYSIS WOULD BE REALIZED IF WE WERE, IN FACT, TO UNDERGO SUCH A LIQUIDATION, AND ACTUAL RESULTS COULD VARY MATERIALLY FROM THOSE SHOWN HERE.

A key aspect of the Analysis is the mechanism by which liquidation proceeds flow among Mirant and our various subsidiaries. Although the management reports and records of Mirant and its affiliates are maintained on a legal entity basis, certain assumptions were made to condense the Analysis to Mirant and a limited number of key subsidiaries. The Analysis is structured such that proceeds from the liquidation of a subsidiary are first used to satisfy the obligations of the given subsidiary. Then, provided that all subsidiary obligations are satisfied in full, the excess proceeds are distributed to that subsidiary’s immediate parent company. Thus, the Analysis must specifically consider our subsidiaries that contain financial debt or trade obligations. The liquidations of these subsidiaries are provided individually herein. The resulting structure of the Analysis is set forth on the following page.


(1)	Also includes certain domestic power assets not owned by Mirant Americas Generation, LLC.

(2)	Liquidation proceeds primarily based on net equity interest in Caribbean and Philippine businesses.

Estimates of the net cash proceeds that might be realized from the liquidation of Mirant and all our subsidiaries are shown in the Liquidation Summary. The actual method of liquidation may vary greatly from subsidiary to subsidiary depending on the type and location of the assets involved. The following sets forth the specific assumptions for the liquidation of our assets.

Cash and equivalents consist of (i) unrestricted cash in banks or operating accounts, (ii) specifically recoverable restricted cash, and (iii) liquid investments with maturities of three months or less. Cash and equivalents are assumed to be fully recoverable. The balances by entity reflect estimated book values of cash and cash equivalents as of June 30, 2003, based on our 13-week cash flow forecast. The Analysis assumes that during the six-month liquidation period our businesses operate at cash flow break-even, other than the wind-down costs that are incurred at Mirant and MAEM (see Note 3).

The Analysis assumes that each of our power producing assets (or equity interests in power producing assets) is sold as going concerns during a 6-month period. The estimated values realized for such assets reflect among other things, the following factors:


	•	Projected power prices by region

	•	Fuel costs, based on fuel types and heat rates for each unit


	•	Variable operating, maintenance and start-up costs

	•	Long-term supply and demand fundamentals for power

	•	Long-run marginal cost of new power generation

	•	Capital expenditure requirements, including environmental expenditures

	•	Capital costs

The values contained in the Analysis assume that in order to complete the sale of all our power-producing assets during a 6-month period, significant valuation discounts would likely be realized given the forced sale of the assets under an expedited time frame.

Trading assets primarily reflect the net book value of MAEM’s in-the-money trading and hedging contracts as of May 31, 2003. (Trading assets at entities other than MAEM are as of December 31, 2002.) For the purposes of this analysis, it is assumed that the vast majority of these contracts will be terminated upon a bankruptcy filing, and as a result several factors must be considered before estimating a recovery value on these assets. First, our trading counterparties will likely attempt to value the positions based upon their own forward curves and marks, rather than those used by us. This would likely reduce the value of the contracts. Second, many of the contracts are subject to netting agreements under which we must offset out-of-the-money trading positions against the value of our trading assets. Finally, counterparties may attempt to offset cash collateral held by us against the value of the contracts. After adjusting for these factors, the Analysis assumes that remaining value of the contracts is sold at a discount to book value.

Accounts receivable primarily consist of amounts owed to us by bilateral power customers and Independent System Operators (“ISOs”). The recovery of accounts receivable is based on management’s estimate of collection, or the sale or factoring of such receivables.

For this Analysis, net inter-company claims against Mirant and its affiliates have been treated pari-passu with third party claims. There can be no assurances that other foreign jurisdictions or local creditors would not seek to subordinate inter-company claims. To the extent that foreign jurisdictions have alternate priority rules or require the subordination of inter-company claims, the recovery percentages for unsecured creditors may be materially different.

Intangible assets consist of goodwill, miscellaneous deferred charges, and other miscellaneous assets. For this Analysis, such assets are assumed to have no recovery value.

While the liquidation of our tradename and other intangible assets may have value, no liquidation value was assumed in this Analysis due to the speculative nature of value for these assets in a liquidation scenario.

As previously described, liquidation proceeds are first applied to the lowest relevant level of the Mirant Corporation corporate hierarchy structure. This allows any excess proceeds to then flow “upward” to the next ownership level and be available for those creditors as well, to the extent available.

This Analysis assumes that only Mirant and MAEM are wound down. All other entities are assumed to operate in the normal course until the requisite asset sales are completed, upon which point the respective

Liquidator fees are calculated based on the statutory escalating scale set forth in Section 326 of the Bankruptcy Code. Liquidator fees are 25.0% of the first $5,000 of proceeds, 10.0% for the next $45,000 of proceeds, 5.0% for the next $950,000 of proceeds, and 3.0% for all proceeds in excess of $1,000,000. The Analysis also assumes that the liquidation of certain other assets would require asset disposition fees related to professionals retained to sell the going concern assets. Such fees are estimated at 1.0% of sales proceeds.

This represents the gross assets’ liquidation proceeds less the estimate of wind-down costs, liquidator fees, and asset disposition/brokerage fees.

Under the absolute priority rule, no junior creditor may receive any distribution until all senior creditors are paid in full. Thus, the Analysis allocates the net proceeds to creditors in their respective order of priority.

Superpriority claims represent the claims of lenders arising from potential borrowings under a potential Debtor in Possession (“DIP”) financing facility. The Analysis assumes, however, that we utilize existing cash balances to fund wind-down costs and any other costs arising during the liquidation process. Thus, there are no DIP financings or superpriority claims included in the Analysis.

Priority claims consist of (i) priority tax claims, which are based on the tax liabilities recorded on the December 31, 2002 balance sheets of Mirant and its subsidiaries, and (ii) Chapter 7 professionals’ fees, which also have a priority ranking compared to pre-petition creditors.

Under the normal course of business, we have historically issued cash collateral and letters of credit on behalf of trading counterparties and other constituencies. The Analysis assumes that at the outset of the liquidation period, collateralized counterparties draw on letters of credit and/or permanently take possession of cash collateral, in full or partial satisfaction of their claims against us. As a result, the balances of the trading liabilities contained in this Analysis under General Unsecured Claims (see Note 10) represent only the uncollateralized claims, which are net of L/C draws and cash collateral postings. Secured claimants are assumed to receive a full recovery on their collateralized claims.

General unsecured claims follow secured claims in right of payment. General unsecured claims come in different forms, depending on the subsidiary, but the major categories are as follows:


	•	Unsecured bank debt

	•	Unsecured capital markets debt

	•	Third-party accounts payable

	•	Trading-relating claims


	•	Contract rejection claims

	•	Intercompany claims

	•	Guaranties of obligations of affiliates

	•	Obligations under equipment lease financings

	•	Obligations under plant and property lease financings

As described in Note 9, the Analysis assumes that certain collateralized claimants draw on letters of credit at the outset of the liquidation period. Such draws on letters of credit effectively increase the total unsecured bank debt claims and decrease other unsecured claims in the amount of the drawn letters of credit.

Subordinated claims are unsecured, rank last in right of payment, and are the last obligation to be satisfied before proceeds flow “upward” to the next corporate ownership level, or in the case of Mirant, to common shareholders. The only subordinated claims included in the Analysis are Mirant’s 6.25% Trust Preferred Securities.

This item describes whether any liquidation proceeds remain at each entity level (for a distribution to a parent entity), by subtracting the aggregate distribution of net proceeds from the Net Liquidation Proceeds Available for Payment of Creditors (Note 5).

As summarized in the Liquidation Summary, we have concluded that each class of impaired Claims and Interests will receive under the Plan not less than it would receive if we were liquidated in hypothetical Chapter 7 cases on the Effective Date of the Plan.


(1)	Represents 100.0% of deficiency claims under MAEM Commodity Prepay Facility and 100.0% of deficiency claims under MADC Equipment Warehouse Lease Facility.

(2)	Represents 100.0% of deficiency claims under MAEM contract rejection claims, third-party trade claims and trading and hedging liabilities.


	WHITE & CASE LLP
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	200 South Biscayne Boulevard
	49^th Floor
	Miami, Florida 33131
	(305) 371-2700

Mirant Corporation and certain of its affiliated debtors and debtors in possession in the above-captioned jointly administered chapter 11 cases hereby collectively and jointly propose the following joint chapter 11 plan of reorganization:

The capitalized terms used herein shall have the respective meanings set forth below:


	(a) “2.5% Convertible Senior Debentures” means those certain 2.5% convertible senior debentures due 2021, issued by Mirant in the aggregate principal amount of $750,000,000 pursuant to the Indenture dated May 31, 2001, between Mirant and Bankers Trust Company, as trustee, as such indenture has been or may be amended or supplemented from time to time.

	(b) “2.5% Convertible Senior Debenture Claim” means a Claim arising under, or as a consequence of owning, the 2.5% Convertible Senior Debentures.

	(c) “7.4% Senior Notes” means those certain 7.4% senior notes due 2004, issued by Mirant in the aggregate principal amount of $200,000,000 pursuant to the Mirant Fiscal Agency Agreement.

	(d) “7.4% Senior Note Claim” means a Claim arising under, or as a consequence of owning, the 7.4% Senior Notes.

	(e) “Administrative Claim” means a Claim incurred by a Debtor (or its Estate) on or after the Petition Date and before the Effective Date for a cost or expense of administration in the Chapter 11 Cases entitled to priority under sections 503(b) and 507(a)(1) of the Bankruptcy Code, including, without limitation, Fee Claims and DIP Claims.

	(f) “Affiliate” means, with respect to any Person, all Persons that would fall within the definition assigned to such term in section 101(2) of the Bankruptcy Code, if such Person was a debtor in a case under the Bankruptcy Code.

	(g) “Allowed,” when used


	(i) with respect to any Claim, except for a Claim that is an Administrative Claim, means such Claim to the extent it is not a Contested Claim as of the Effective Date;

	(ii) with respect to an Administrative Claim, means an Administrative Claim that has become fixed in amount pursuant to the procedures set forth in Section 5.2 of this Plan; and

	(iii) with respect to Equity Interests, means the Equity Interests in any Debtor as reflected in the stock transfer register of such Debtor as of the Effective Date.


	(h) “Assets” means, with respect to any Debtor, all of such Debtors’ right, title and interest of any nature in property of any kind, wherever located, as specified in section 541 of the Bankruptcy Code.

	(i) “Avoidance Actions” means all Causes of Action of the Estates that arise under the Bankruptcy Code, including, but not limited to, all preference, fraudulent transfer, and other Causes of Action arising under chapter 5 of the Bankruptcy Code.

	(j) “Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as codified at title 11 of the United States Code and as amended from time to time as applicable to the Chapter 11 Cases.

	(k) “Bankruptcy Court” means the United States Bankruptcy Court for the Northern District of Texas, or such other court having jurisdiction over the Chapter 11 Cases.


	(l) “Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure, as prescribed by the United States Supreme Court pursuant to section 2075 of title 28 of the United States Code and as applicable to the Chapter 11 Cases.

	(m) “Bar Date” means any date set by order of the Bankruptcy Court as the deadline for filing proofs of claim in the Chapter 11 Cases.

	(n) “Bar Date Notice” means the Notice of Bar Dates for Filing Proofs of Claim Against the Debtors, as approved by Order of the Bankruptcy Court.

	(o) “Business Day” means any day on which commercial banks are open for business in New York, New York.

	(p) “Cash” means legal tender of the United States of America or readily marketable direct obligations of, or obligations guaranteed by, the United States of America.

	(q) “Causes of Action” means all claims, rights, actions, causes of action, liabilities, obligations, suits, debts, remedies, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages or judgments, whether known or unknown and whether asserted or unasserted.

	(r) “Chapter 11 Cases” means the cases under chapter 11 of the Bankruptcy Code pending before the Bankruptcy Court with respect to each of the Debtors.

	(s) “Citibank “C” Facility” means that certain credit facility, dated April 1, 1999, in the aggregate principal amount of $450,000,000, between Southern Energy, Inc. n/k/a Mirant, as borrower, and Citibank N.A., as initial lender and agent, with a maturity date of April 1, 2004, and all related documents, instruments and agreements as they have been or may be amended or supplemented from time to time.

	(t) “Citibank “C” Facility Claim” means a Claim arising under the Citibank “C” Facility.

	(u) “Claim” means (i) any right to payment from a Debtor, whether or not such right is known or unknown, reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; (ii) any right to an equitable remedy for breach of performance if such breach gives rise to a right of payment from a Debtor, whether or not such right to an equitable remedy is known or unknown, reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured; or unsecured; or (iii) any right under section 502(h) of the Bankruptcy Code.

	(v) “Claims Agent” means the entity designated by order of the Bankruptcy Court to process proofs of claim.

	(w) “Collateral” means the Assets and the interests of the Subsidiaries in property that will be pledged to and for the benefit of the Secured Parties to secure payment of the obligations under the New Mirant Secured Credit Facility, the New MAG Secured Credit Facility, the New Mirant Indenture, the New MAG Indenture, the New Mirant 7.5% Senior Secured Notes, and the New MAG 7.5% Senior Secured Notes, as such Assets and property interests are identified and as set forth in the Security Documents.

	(x) “Collateral Agent” means the Person appointed to act as collateral agent under the Security Documents.

	(y) “Commodity Prepay Facility” means (i) the ISDA Master Agreement dated October 11, 2001, between MAEM and HVB Risk Management Products Inc., and (ii) the ISDA Master Agreement dated October 11, 2001, between MAEM and Scarlett Resource Merchants LLC, and all related documents, instruments and agreements, as they have been or may be amended or supplemented from time to time.


	(z) “Commodity Prepay Facility Claim” means a Claim arising under the Commodity Prepay Facility.

	(aa) “Commodity Prepay Facility Guaranty” means the Guaranties, dated October 11, 2001, in favor of each of HVB Risk Management Products Inc. and Scarlett Resource Merchants LLC, pursuant to which Mirant guaranteed MAEM’s obligations and all related documents, instruments and agreements, as they have been or may be amended or supplemented from time to time.

	(bb) “Commodity Prepay Facility Guaranty Claim” means a Claim arising under the Commodity Prepay Facility Guaranty.

	(cc) “Confirmation Date” means the date on which the Clerk of the Bankruptcy Court enters the Confirmation Order on the docket of the Bankruptcy Court.

	(dd) “Confirmation Hearing” means the hearing held by the Bankruptcy Court, as it may be continued from time to time, on confirmation of the Plan.

	(ee) “Confirmation Order” means the order of the Bankruptcy Court confirming the Plan.

	(ff) “Contested Claim” means a Claim (i) to the extent it is listed in the Schedules as disputed, contingent, or unliquidated, in whole or in part, and as to which no proof of claim has been filed; (ii) that is listed in the Schedules as undisputed, liquidated, and not contingent and as to which a proof of claim has been filed with the Bankruptcy Court, to the extent (A) the proof of claim amount exceeds the amount indicated in the Schedules, or (B) the proof of claim priority differs from the priority set forth in the Schedules, in each case as to which an objection was filed on or before the Objection Deadline, unless and to the extent allowed in amount and/or priority by a Final Order of the Bankruptcy Court; (iii) that is not listed in the Schedules or was listed in the Schedules as disputed, contingent or unliquidated, in whole or in part, but as to which a proof of claim has been filed with the Bankruptcy Court, in each case as to which an objection was filed on or before the Objection Deadline, unless and to the extent allowed in amount and/or priority by a Final Order of the Bankruptcy Court; or (iv) as to which an objection has been filed on or before the Effective Date; provided, that a Claim that is fixed in amount and classification pursuant to the Plan or by Final Order on or before the Effective Date shall not be a Contested Claim.

	(gg) “CSFB 364-Day Revolver” means that certain credit facility dated July 17, 2001, in the aggregate principal amount of $1,125,000,000, between Mirant, as borrower, the initial lenders named therein, and Credit Suisse First Boston, as administrative agent, and having a maturity date of July 17, 2003, and all related documents, instruments and agreements, as they have been or may be amended or supplemented from time to time.

	(hh) “CSFB 364-Day Revolver Claim” means a Claim arising under the CSFB 364-day Revolver.

	(ii) “CSFB 4-Year Revolver” means that certain credit facility, dated July 17, 2001, in the aggregate principal amount of $1,125,000,000, between Mirant, as borrower, the initial lenders named therein, and Credit Suisse First Boston, as administrative agent, and having a maturity date of July 17, 2005, and all related documents, instruments and agreements, as they have been or may be amended or supplemented from time to time.

	(jj) “CSFB 4-Year Revolver Claim” means a Claim arising under the CSFB 4-year Revolver.

	(kk) “Debtor” means any of Mirant, MAEM, MADCI and MLW individually.

	(ll) “Debtor in Possession” means any Debtor, in its capacity as a debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.

	(mm) “DIP Agent” means the agent for the DIP Lenders under the DIP Credit Agreement.

	(nn) “DIP Claims” means the Claims of the DIP Lenders under the DIP Credit Agreement and the DIP Order.


	(oo) “DIP Credit Agreement” means the credit agreement to be entered into by the Debtors and certain subsidiaries, as borrowers and guarantors, the DIP Agent, and the DIP Lenders, in connection with the commencement of the Chapter 11 Cases, pursuant to which Mirant shall be permitted to make borrowings prior to the Effective Date, to the extent approved by the DIP Order, together with all documents, instruments and agreements executed or entered into in connection therewith, and any amendments thereto.

	(pp) “DIP Lenders” means the lenders under the DIP Credit Agreement.

	(qq) “DIP Order” means, collectively, the order(s) of the Bankruptcy Court approving the DIP Credit Agreement, authorizing the Debtors in Possession that are parties thereto to enter into the DIP Credit Agreement, granting certain rights, protections and liens to and for the benefit of the DIP Lenders as set forth in the DIP Order, and authorizing Mirant to make borrowings under the DIP Credit Agreement.

	(rr) “Disallowed,” when used with respect to a Claim, means a Claim, or such portion of a Claim, that has been disallowed by a Final Order.

	(ss) “Disbursing Agent” means Mirant, acting on behalf of the Debtors, who shall (i) make the Plan Distributions contemplated under the Plan, the Confirmation Order, or any other relevant Final Order, and (ii) perform any other act or task that is or may be delegated to the Disbursing Agent under the Plan.

	(tt) “Disclosure Statement” means all materials distributed to the holders of Mirant Bank Claims, Commodity Prepay Facility Claims, Equipment Warehouse Facility Claims and Mirant Impaired Note Claims in connection with the solicitation prior to the Petition Date of their votes with respect to the Plan.

	(uu) “Distribution Date” means, with respect to any Claim, (i) the Effective Date, if such Claim is then an Allowed Claim, or (ii) a date that is as soon as reasonably practicable after the date such Claim becomes Allowed, if not Allowed on the Effective Date.

	(vv) “Effective Date” means a date selected by the Debtors which shall be a Business Day that is no later than thirty (30) business days after all of the conditions specified in Section 10.2 have been satisfied or waived (to the extent waivable).

	(ww) “Equipment Warehouse Facility” means (i) the Participation Agreement, dated October 22, 2001, among MADCI, as contract agent and lessee, the MC Equipment Revolver Statutory Trust, State Street Bank and Trust Company of Connecticut, National Association, as trustee, the persons named therein as Note Holders and Certificate Holders and Citibank, N.A. as agent, and (ii) the Lease Agreement dated October 22, 2001, among MC Equipment Revolver Statutory Trust, as lessor, and MADCI, as lessee, all such documents having a maturity date of April 22, 2009, and all related documents, instruments and agreements, as they have been or may be amended or supplemented from time to time.

	(xx) “Equipment Warehouse Facility Claim” means a Claim arising under the Equipment Warehouse Facility.

	(yy) “Equipment Warehouse Facility Guaranty” means the Guaranty in respect of the Equipment Warehouse Facility, dated October 22, 2001, among Mirant and MC Equipment Revolver Statutory Trust, and all related documents, instruments and agreements, as they have been or may be amended or supplemented from time to time.

	(zz) “Equipment Warehouse Facility Guaranty Claim” means a Claim arising under the Equipment Warehouse Facility Guaranty.

	(aaa) “Equity Interest” means any outstanding ownership interest in any of the Debtors, including without limitation, interests evidenced by common or preferred stock, membership interests and options or other rights to purchase any ownership interest in any of the Debtors.


	(bbb) “Estate” means the estate of any Debtor created by section 541 of the Bankruptcy Code upon the commencement of the Chapter 11 Cases.

	(ccc) “Fee Application” means an application for allowance and payment of a Fee Claim (including Claims for “substantial contribution” pursuant to section 503(b) of the Bankruptcy Code).

	(ddd) “Fee Claim” means a Claim of a Professional Person.

	(eee) “Final Order” means (i) an order or judgment of the Bankruptcy Court or any other court or adjudicative body as to which the time to appeal, petition for certiorari, or move for reargument or rehearing has expired and as to which no appeal, petition for certiorari, or other proceedings for reargument or rehearing shall then be pending, or (ii) in the event that an appeal, writ of certiorari, reargument, or rehearing thereof has been sought, such order of the Bankruptcy Court or any other court or adjudicative body shall have been affirmed by the highest court to which such order was appealed, or certiorari has been denied, or from which reargument or rehearing was sought, and the time to take any further appeal, petition for certiorari or move for reargument or rehearing shall have expired; provided, that no order shall fail to be a Final Order solely because of the possibility that a motion pursuant to Rule 60 of the Federal Rules of Civil Procedure or Bankruptcy Rule 9024 may be filed with respect to such order.

	(fff) “General Unsecured Claims” means Unsecured Claims other than Mirant Bank Claims, Commodity Prepay Facility Claims, Equipment Warehouse Facility Claims, Mirant Impaired Note Claims and Securities Litigation Claims.

	(ggg) “Impaired Note Indentures” means the indentures and agreements pursuant to which the 2.5% Convertible Senior Debentures and 7.4% Senior Notes were issued, to the extent they relate to such notes.

	(hhh) “Intercreditor Agreement” means that certain intercreditor agreement to be entered into by, among others, Mirant, MAG, certain subsidiaries of Mirant, the Collateral Agent, the New Indenture Trustees and the New Mirant Agents and the New MAG Agent, governing the rights, claims and priority of the Secured Parties with respect to the Collateral.

	(iii) “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended, and any applicable rulings, regulations (including temporary and proposed regulations) promulgated thereunder, judicial decisions, and notices, announcements, and other releases of the United States Treasury Department or the IRS.

	(jjj) “IRS” means the United States Internal Revenue Service.

	(kkk) “MADCI” means Mirant Americas Development Capital, LLC, a Delaware limited liability company, one of the Debtors and Debtors in Possession.

	(lll) “MAEM” means Mirant Americas Energy Marketing, LP, a Delaware limited partnership, one of the Debtors and Debtors in Possession.

	(mmm) “MAG” means Mirant Americas Generation, LLC, a Delaware limited liability company, which was formerly known as Mirant Americas Generation, Inc., a Delaware corporation.

	(nnn) “Mirant” means Mirant Corporation, a Delaware corporation, which was formerly known as Southern Energy, Inc., a Delaware corporation, one of the Debtors and Debtors in Possession.

	(ooo) “Mirant Bank Claims” means the CSFB 364-Day Revolver Claims, the Citibank “C” Facility Claims, the CSFB 4-Year Revolver Claims, the Equipment Warehouse Facility Guaranty Claims and the Commodity Prepay Facility Guaranty Claims.

	(ppp) “Mirant Fiscal Agency Agreement” means the Fiscal Agency Agreement dated July 26, 1999, between Southern Energy, Inc. n/k/a Mirant, as issuer, and Bankers Trust Company, as Fiscal Agent, transfer agent, registrar and paying agent, as such agreement has been or may be amended or supplemented from time to time.


	(qqq) “Mirant Impaired Notes” means the 2.5% Convertible Senior Debentures and the 7.4% Senior Notes.

	(rrr) “Mirant Impaired Note Claims” means the 2.5% Convertible Senior Debenture Claims and the 7.4% Senior Note Claims.

	(sss) “MLW” means MLW Development, LLC, a Delaware limited liability company, one of the Debtors and Debtors in Possession.

	(ttt) “New Constituent Documents” means the by-laws, certificates of incorporation, partnership agreements, or limited liability company membership agreements, as applicable, for each of the Debtors, as amended and restated as of the Effective Date, among other things, to (i) prohibit the issuance of non-voting equity securities by such Debtor as required by section 1123(a)(6) of the Bankruptcy Code, and (ii) otherwise give effect to the provisions of this Plan. The New Constituent Documents shall be filed with the Bankruptcy Court as Plan Documents.

	(uuu) “New Indenture Trustees” means the Person or Persons appointed to act as the indenture trustees under the New Mirant Indenture and the New MAG Indenture.

	(vvv) “New MAG 7.5% Senior Secured Notes” means those 7.5% senior notes due July 15, 2008, to be issued by MAG pursuant to the New MAG Indenture.

	(www) “New MAG Agent” means the Person or Persons appointed to act, as administrative agent under the New MAG Secured Credit Facility.

	(xxx) “New MAG Secured Credit Facility” means the new secured credit agreement to be dated as of the Effective Date in the aggregate principal amount of $300 million.

	(yyy) “New MAG Indenture” means that certain indenture to be entered into between MAG, as issuer, and the relevant New Indenture Trustee, as trustee, pursuant to which MAG will issue the New MAG 7.5% Senior Secured Notes.

	(zzz) “New MAG Lender” means each lender under the New MAG Secured Credit Facility.

	(aaaa) “New Mirant 7.5% Senior Secured Notes” means those 7.5% senior secured notes due July 15, 2008, to be issued by Mirant pursuant to the New Mirant Indenture on or about the Effective Date in exchange for the 2.5% Convertible Senior Debentures and the 7.4% Senior Notes.

	(bbbb) “New Mirant Agents” means the Person or Persons appointed to act as administrative agents under the New Mirant Secured Credit Facility.

	(cccc) “New Mirant Secured Credit Facility” means the new secured credit facility to be dated as of the Effective Date in the aggregate principal amount of $3.15 billion, which shall include a term facility in the amount of $2.05 billion and a revolving Facility in the amount of $1.1 billion, pursuant to which the Mirant Bank Claims, Commodity Prepay Facility Claim and Equipment Warehouse Facility Claim shall be satisfied under the Plan. The New Mirant Secured Credit Facility shall be filed with the Bankruptcy Court as a Plan Document.

	(dddd) “New Mirant Indenture” means that certain indenture to be entered into between Mirant, as issuer, and the relevant New Indenture Trustee, as trustee, pursuant to which Mirant will issue the New Mirant 7.5% Senior Secured Notes, as contemplated by this Plan. The New Mirant Indenture shall be filed with the Bankruptcy Court as a Plan Document.

	(eeee) “New Mirant Lenders” means each lender under the New Mirant Secured Credit Facility.

	(ffff) “Notice of Confirmation” means the notice of entry of the Confirmation Order to be mailed by the Claims Agent to holders of Claims and Equity Interests.

	(gggg) “Objection Deadline” means the deadline for filing objections to Claims as set forth in Section 9.1.


	(hhhh) “Person” means an individual, corporation, partnership, limited liability company, joint venture, trust, estate, unincorporated association, unincorporated organization, governmental entity, or political subdivision thereof, or any other entity.

	(iiii) “Petition Date” means the date on which the Chapter 11 Cases were commenced.

	(jjjj) “Plan” means this chapter 11 plan, either in its present form or as it may be amended, supplemented, or otherwise modified from time to time, and the exhibits and schedules hereto, as the same may be in effect at the time such reference becomes operative.

	(kkkk) “Plan Distribution” means the payment or distribution under the Plan of Cash, Assets, or instruments evidencing an obligation of any Debtor, as applicable, to the holder of an Allowed Claim.

	(llll) “Plan Documents” means the documents that aid in effectuating the Plan as specifically identified as such herein and filed with the Bankruptcy Court as specified in Section 1.5.

	(mmmm) “Post-Confirmation Interest” means simple interest at the rate of [3.0]% per annum or such other rate as the Bankruptcy Court may determine at the Confirmation Hearing is appropriate, such interest to accrue from the Distribution Date with respect to such Claim.

	(nnnn) “Priority Claim” means any Claim to the extent such Claim is entitled to priority in right of payment under section 507(a) of the Bankruptcy Code, other than Secured Claims, Administrative Claims, and Tax Claims.

	(oooo) “Professional Person” means a Person retained or to be compensated for services rendered or costs incurred on or after the Petition Date and on or prior to the Effective Date pursuant to sections 327, 328, 329, 330, 503(b), or 1103 of the Bankruptcy Code in these Chapter 11 Cases.

	(pppp) “Schedules” means the schedules of assets and liabilities and the statements of financial affairs filed by the Debtors with the Bankruptcy Court, as required by section 521 of the Bankruptcy Code and in conformity with the Official Bankruptcy Forms of the Bankruptcy Rules, as such schedules and statements may be amended or supplemented by the Debtors in Possession from time to time in accordance with Bankruptcy Rule 1009.

	(qqqq) “Secured Claim” means (i) a Claim (other than the DIP Claims) secured by a lien on any Assets, which lien is valid, perfected, and enforceable under applicable law and is not subject to avoidance under the Bankruptcy Code or applicable non-bankruptcy law, and which is duly established in the Chapter 11 Cases, but only to the extent of the value of the holder’s interest in the collateral that secures payment of the Claim; (ii) a Claim against the Debtors that is subject to a valid right of recoupment or setoff under section 553 of the Bankruptcy Code, but only to the extent of the Allowed amount subject to recoupment or setoff as provided in section 506(a) of the Bankruptcy Code; and (iii) a Claim allowed under the Plan as a Secured Claim.

	(rrrr) “Secured Parties” means the New Mirant Agents, the New MAG Agent, the Collateral Agent, the New Indenture Trustees, the New MAG Lenders, the New Mirant Lenders and holders of the New Mirant 7.5% Senior Secured Notes and the New MAG 7.5% Senior Secured Notes, each of which shall receive the benefit of a security interest and lien in the Collateral pursuant to the Security Documents.

	(ssss) “Securities Litigation” means that certain litigation commenced against Mirant in the United States District Court for the Northern District of Georgia and the United States District Court for the Northern District of California, alleging, among other things, violation by Mirant of sections 10(b) and 20(a) of the Securities Act of 1934 and seeking unspecified damages including compensatory damages.

	(tttt) “Securities Litigation Claims” means a Claim arising, on or prior to the Petition Date, (i) under the Securities Litigation or (ii) from the rescission of a purchase or sale of a security of Mirant, for damages arising from the purchase or sale of such security or for reimbursement or contribution allowed under section 502 of the Bankruptcy Code on account of such a claim.


	(uuuu) “Security Documents” means those stock pledge agreements, security agreements and similar documents granting the Collateral Agent a lien and security interest in and to the Collateral for the benefit of the Secured Parties.

	(vvvv) “Subordinated Claim” means a Claim against any Debtor that is subject to being subordinated pursuant to section 510 of the Bankruptcy Code.

	(wwww) “Tax Claim” means a Claim against any of the Debtors that is of a kind specified in section 507(a)(8) of the Bankruptcy Code.

	(xxxx) “Unsecured Claim” means any Claim against a Debtor other than an Administrative Claim, a Priority Claim, a Tax Claim, or a Secured Claim.

Unless otherwise specified, all section, article, and exhibit references in the Plan are to the respective section in, article of, or exhibit to, the Plan, as the same may be amended, waived, or modified from time to time. Words denoting the singular number shall include the plural number and vice versa, and words denoting one gender shall include the other gender. The Offering Circular and Disclosure Statement may be referred to for purposes of interpretation to the extent any term or provision of the Plan is determined by the Bankruptcy Court to be ambiguous.

Words and terms defined in section 101 of the Bankruptcy Code shall have the same meanings when used in the Plan, unless a different definition is given in the Plan. The rules of construction contained in section 102 of the Bankruptcy Code shall apply to the construction of the Plan.

The words “herein,” “hereof,” “hereto,” “hereunder,” and others of similar import refer to the Plan as a whole and not to any particular section, subsection, or clause contained in the Plan. A term used herein that is not defined herein shall have the meaning ascribed to that term, if any, in the Bankruptcy Code.

All appendices to the Plan and the Plan Documents are incorporated into the Plan by this reference and are a part of the Plan as if set forth in full herein. All Plan Documents shall be filed with the Clerk of the Bankruptcy Court not less than ten (10) days prior to the commencement of the Confirmation Hearing. Holders of Claims and Equity Interests may obtain a copy of the Plan Documents, once filed, by a written request sent to the following address:

As provided by section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Tax Claims shall not be classified under the Plan, and shall instead be treated separately as unclassified Claims on the terms set forth in Article V of this Plan.

For the purposes of organization, voting and all confirmation matters, except as otherwise provided herein, all Claims (except as provided in Section 2.1) and all Equity Interests shall be classified as set forth in this Article II of the Plan.


2.3.	Mirant Claims and Equity Interests. The classes of Claims against and Equity Interests in Mirant shall be treated under the Plan as follows:


	Mirant Class 6 shall consist of all Securities Litigation Claims against Mirant.

2.4. MAEM Claims and Equity Interests. The classes of Claims against and Equity Interests in MAEM shall be treated under the Plan as follows:


	MAEM Class 3 shall consist of all Commodity Prepay Facility Claims against MAEM.

2.5. MADCI Claims and Equity Interests. The classes of Claims against and Equity Interests in MADCI shall be treated under the Plan as follows:


	MADCI Class 3 shall consist of all Equipment Warehouse Facility Claims against MADCI.

2.6. MLW Claims and Equity Interests. The classes of Claims against and Equity Interests in MLW shall be treated under the Plan as follows:

Mirant Class 1 — Priority Claims, Mirant Class 2 — Secured Claims, Mirant Class 5 — General Unsecured Claims, Mirant Class 6 — Securities Litigation Claims, Mirant Class 7 — Equity Interests, MAEM Class 1 — Priority Claims, MAEM Class 2 — Secured Claims, MAEM Class 4 — General Unsecured Claims, MAEM Class 5 — Equity Interests, MADCI Class 1 — Priority Claims, MADCI Class 2 — Secured Claims, MADCI Class 4 — General Unsecured Claims, MADCI Class 5 — Equity Interests, MLW Class 1 — Priority Claims, MLW Class 2 — Secured Claims, MLW Class 3 — Unsecured Claims and MLW Class 4 — Equity Interests are not impaired under the Plan.

If a controversy arises as to whether any Claim or Equity Interest, or any class of Claims or Equity Interests, is impaired under the Plan, the Bankruptcy Court shall, after notice and a hearing, determine such controversy.

4.1. Mirant Claims and Equity Interests. The classes of Claims against and Equity Interests in Mirant shall be treated under the Plan as follows:

Each holder of an Allowed Priority Claim against Mirant shall be unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim shall be fully reinstated and retained, except as provided in section 1124(2)(A)-(C) of the Bankruptcy Code, and such Allowed Priority Claims (including any amounts to which such holders are entitled pursuant to section 1124(2) of the Bankruptcy Code) shall be paid in full in accordance with such reinstated rights.

Each holder of an Allowed Secured Claim against Mirant shall be unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim shall be fully reinstated and retained, except as provided in section 1124(2)(A)-(C) of the Bankruptcy Code, and such Allowed Secured Claims (including any amounts to which such holders are entitled pursuant to section 1124(2) of the Bankruptcy Code) shall be paid in full in accordance with such reinstated rights.

On the Effective Date, in complete satisfaction of the Allowed Mirant Bank Claims, each holder of an Allowed Mirant Bank Claim shall become a New Mirant Lender under the New Mirant Secured Credit Facility with its interest therein being in an amount equal to its Allowed Mirant Bank Claim; provided, that the holders of the Allowed Equipment Warehouse Facility Guaranty Claim and the Allowed Commodity Prepay Facility Guaranty Claim shall only be lenders under the term facility; and provided further, that participation in the revolving facility shall be limited to the unfunded obligation of each holder of a Mirant Bank Claim (as of the Effective Date) under the CSFB 4-Year Revolver.


	On the Effective Date, in complete satisfaction of the Allowed Mirant Impaired Note Claims, each holder shall receive New Mirant 7.5% Senior Secured Notes in an amount equal to such holder’s Allowed Mirant Impaired Note Claim.

Each holder of an Allowed General Unsecured Claim against Mirant shall be unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim shall be fully reinstated and retained, except as provided in sections 510 and 1124(2)(A)-(C) of the Bankruptcy Code, and such Allowed General Unsecured Claims (including any amounts to which such holders are entitled pursuant to section 1124(c) of the Bankruptcy Code) shall be paid in full in accordance with such reinstated rights.

Each holder of an Allowed Securities Litigation Claim against Mirant shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles holders in respect of such Claim shall be fully reinstated and retained, except as provided in section 1124(2)(A)-(C) of the Bankruptcy Code, and such Allowed Securities Litigation Claims (including any amounts to which such holders are entitled pursuant to section 1124(2) of the Bankruptcy Code) shall be paid in full (a) in Cash, (b) by the issuance of Equity Interests in Mirant, or (c) by such other consideration as may be permitted by applicable law, in each case at the option of the Debtors.


	Each holder of an Allowed Equity Interest in Mirant shall be unimpaired under the Plan, and pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Equity Interest entitles such holder in respect of such Equity Interest shall be fully reinstated and retained.

4.2. MAEM Claims and Equity Interests. The classes of Claims against and Equity Interests in MAEM shall be treated under the Plan as follows:

Each holder of an Allowed Priority Claim against MAEM shall be unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim shall be fully reinstated and retained, except as provided in section 1124(2)(A)-(C) of the Bankruptcy Code, and such Allowed Priority Claims (including any amounts to which such holders are entitled pursuant to section 1124(2) of the Bankruptcy Code) shall be paid in full in accordance with such reinstated rights.

Each holder of an Allowed Secured Claim against MAEM shall be unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim shall be fully reinstated and retained, except as provided in section 1124(2)(A)-(C) of the Bankruptcy Code, and such Allowed Secured Claims (including any amounts to which such holders are entitled pursuant to section 1124(2) of the Bankruptcy Code) shall be paid in full in accordance with such reinstated rights.


	On the Effective Date, in complete satisfaction of the Allowed Commodity Prepay Facility Claims, each holder of an Allowed Commodity Prepay Facility Claim shall become a New Mirant Lender under the term loan facility of the New Mirant Secured Credit Facility with its interest therein being in an amount equal to its Allowed Commodity Prepay Facility Claim.

Each holder of an Allowed General Unsecured Claim against MAEM shall be unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim shall be fully reinstated and retained, except as provided in section 1124(2)(A)-(C) of the Bankruptcy Code, and such Allowed General Unsecured Claims (including any amounts to which such holders are entitled pursuant to section 1124(2) of the Bankruptcy Code) shall be paid in full in accordance with such reinstated rights.


	Each holder of an Allowed Equity Interest in MAEM shall be unimpaired under the Plan, and pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to


	which such Equity Interest entitles such holder in respect of such Equity Interest shall be fully reinstated and retained.

4.3. MADCI Claims and Equity Interests. The classes of Claims against and Equity Interests in MADCI shall be treated under the Plan as follows:

Each holder of an Allowed Priority Claim against MADCI shall be unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim shall be fully reinstated and retained, except as provided in section 1124(2)(A)-(C) of the Bankruptcy Code, and such Allowed Priority Claims (including any amounts to which such holders are entitled pursuant to section 1124(2) of the Bankruptcy Code) shall be paid in full in accordance with such reinstated rights.

Each holder of an Allowed Secured Claim against MADCI shall be unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim shall be fully reinstated and retained, except as provided in section 1124(2)(A)-(C) of the Bankruptcy Code, and such Allowed Secured Claims (including any amounts to which such holders are entitled pursuant to section 1124(2) of the Bankruptcy Code) shall be paid in full in accordance with such reinstated rights.


	On the Effective Date, in complete satisfaction of the Allowed Equipment Warehouse Facility Claims,each holder of an Allowed Equipment Warehouse Facility Claim shall become a New Mirant Lender under the term loan facility of the New Mirant Secured Credit Facility with its interest therein being in an amount equal to its Allowed Equipment Warehouse Facility Claim.

Each holder of an Allowed General Unsecured Claim against MADCI shall be unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim shall be fully reinstated and retained, except as provided in section 1124(2)(A)-(C) of the Bankruptcy Code, and such Allowed General Unsecured Claims (including any amounts to which such holders are entitled pursuant to section 1124(2) of the Bankruptcy Code) shall be paid in full in accordance with such reinstated rights.


	Each holder of an Allowed Equity Interest in MADCI shall be unimpaired under the Plan, and pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Equity Interest entitles such holder in respect of such Equity Interest shall be fully reinstated and retained.

4.4. MLW Claims and Equity Interests. The classes of Claims against and Equity Interests in MLW shall be treated under the Plan as follows:

Each holder of an Allowed Priority Claim against MLW shall be unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim shall be fully reinstated and retained, except as provided in section 1124(2)(A)-(C) of the Bankruptcy Code, and such Allowed Priority Claims (including any amounts to which such holders are entitled pursuant to section 1124(2) of the Bankruptcy Code) shall be paid in full in accordance with such reinstated rights.

Each holder of an Allowed Secured Claim against MLW shall be unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim shall be fully reinstated and retained, except as provided in section 1124(2)(A)-(C) of the Bankruptcy Code, and such Allowed Secured Claims (including any amounts to which such holders are entitled pursuant to section 1124(2) of the Bankruptcy Code) shall be paid in full in accordance with such reinstated rights.

Each holder of an Allowed Unsecured Claim against MLW shall be unimpaired under the Plan, and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Claim entitles such holder in respect of such Claim shall be fully reinstated and retained, except as provided in section 1124(2)(A)-(C) of the Bankruptcy Code, and such Allowed Unsecured Claims (including any amounts to which such holders are entitled pursuant to section 1124(2) of the Bankruptcy Code) shall be paid in full in accordance with such reinstated rights.


	Each holder of an Allowed Equity Interest in MLW shall be unimpaired under the Plan, and pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights to which such Equity Interest entitles such holder in respect of such Equity Interest shall be fully reinstated and retained.

Administrative Claims and Tax Claims are treated in accordance with sections 1129(a)(9)(A) and 1129(a)(9)(C) of the Bankruptcy Code, respectively. Such Claims are unimpaired under the Plan and in accordance with section 1123(a)(1) of the Bankruptcy Code, are not designated as classes of Claims for the purposes of this Plan or for the purposes of sections 1123, 1124, 1125, 1126 or 1129 of the Bankruptcy Code.


	(a) Time for Filing Administrative Claims. The holder of an Administrative Claim, other than (i) the DIP Claims, (ii) a Fee Claim, (iii) a liability incurred and payable in the ordinary course of business by a Debtor (and not past due), or (iv) an Administrative Claim that has been Allowed on or before the Effective Date, must file with the Bankruptcy Court and serve on the Debtors, any official committee appointed in the Chapter 11 Cases and the Office of the United States Trustee, notice of such Administrative Claim within forty (40) days after service of Notice of Confirmation. Such notice must include at a minimum (A) the name of the Debtor(s) which are purported to be liable for the Claim, (B) the name of the holder of the Claim, (C) the amount of the Claim, and (D) the basis of the Claim. Failure to file and serve such notice timely and properly shall result in the Administrative Claim being forever barred and discharged.

	(b) Time for Filing Fee Claims. Each Professional Person who holds or asserts a Fee Claim shall be required to file with the Bankruptcy Court, and serve on all parties required to receive notice, a Fee Application within forty-five (45) days after the Effective Date. The failure to file timely and serve such Fee Application shall result in the Fee Claim being forever barred and discharged.


	(c) Allowance of Administrative Claims/Fee Claims. An Administrative Claim with respect to which notice has been properly filed and served pursuant to Section 5.2(a) shall become an Allowed Administrative Claim if no objection is filed within thirty (30) days after the Effective Date, or such later date as may be approved by the Bankruptcy Court on motion of a party in interest, without notice or a hearing. If an objection is filed within such 30-day period (or any extension thereof), the Administrative Claim shall become an Allowed Administrative Claim only to the extent allowed by Final Order. A Fee Claim in respect of which a Fee Application has been properly filed and served pursuant to Section 5.2(b) shall become an Allowed Administrative Claim only to the extent allowed by Final Order.

	(d) Payment of Allowed Administrative Claims. On the Distribution Date, each holder of an Allowed Administrative Claim shall receive (i) the amount of such holder’s Allowed Claim in one Cash payment, or (ii) such other treatment as may be agreed upon in writing by the Debtors and such holder; provided, that an Administrative Claim representing a liability incurred in the ordinary course of business of the Debtors may be paid at the Debtors’ election in the ordinary course of business.

	(e) Allowance and Payment of DIP Claims. The DIP Claims shall be Allowed and paid in full on the Effective Date.

At the election of the Debtors, each holder of an Allowed Tax Claim shall receive in full satisfaction of such holder’s Allowed Tax Claim, (a) the amount of such holder’s Allowed Tax Claim, with Post-Confirmation Interest thereon, in equal annual Cash payments on each anniversary of the Effective Date, until the sixth anniversary of the date of assessment of such Tax Claim (provided that the Disbursing Agent may prepay the balance of any such Allowed Tax Claim at any time without penalty); (b) a lesser amount in one Cash payment as may be agreed upon in writing by such holder; or (c) such other treatment as may be agreed upon in writing by such holder. The Confirmation Order shall enjoin any holder of a Tax Claim from commencing or continuing any action or proceeding against any responsible person or officer or director of the Debtors that otherwise would be liable to such holder for payment of a Tax Claim so long as no default has occurred with respect to such Tax Claim under this Section 5.3.

Mirant Class 3 — Mirant Bank Claims, Mirant Class 4 — Mirant Impaired Note Claims, MAEM Class 3 — Commodity Prepay Facility Claims, and MADCI Class 3 — Equipment Warehouse Facility Claims are impaired under the Plan, and the holders of such Claims shall be entitled to vote to accept or reject the Plan. All other classes of Claims and Equity Interests are unimpaired under the Plan, are deemed to have accepted the Plan, and shall not be entitled to vote on the Plan.

A class of Claims shall have accepted the Plan if it is accepted by at least two-thirds ( 2/3) in amount and more than one-half ( 1/2) in number of the Allowed Claims in such class that have voted on the Plan.

If all applicable requirements for confirmation of the Plan are met as set forth in section 1129(a)(1) through (13) of the Bankruptcy Code except subsection (8) thereof, the Debtors intend to request that the Bankruptcy Court confirm the Plan in accordance with section 1129(b) of the Bankruptcy Code, notwithstanding the failure to satisfy the requirements of section 1129(a)(8), on the basis that the Plan is fair and

The Plan shall not be deemed to have been confirmed unless and until the Plan has been confirmed as to each of the Debtors (other than those Debtors, if any, in respect of which the Plan has been revoked or withdrawn pursuant to Section 14.15).

During the period from the Confirmation Date through and until the Effective Date, the Debtors shall continue to operate their businesses as debtors in possession, subject to the supervision of the Bankruptcy Court as provided in the Bankruptcy Code and the Bankruptcy Rules.

On or prior to the Effective Date, Mirant shall enter into the New Mirant Secured Credit Facility and the New Mirant Indenture.

The entry of the Confirmation Order shall constitute authorization for the Debtors to take or cause to be taken all corporate actions necessary or appropriate to implement all provisions of, and to consummate the Plan prior to, on and after the Effective Date and all such actions taken or caused to be taken shall be deemed to have been authorized and approved by the Bankruptcy Court without further approval, act or action under any applicable law, order, rule or regulation, including without limitation, any action required by the stockholders or directors of the Debtors and including, among other things, (a) the adoption of the New Constituent Documents, (b) the termination of the CSFB 364-Day Revolver, the CFSB 4-Year Revolver, the Citibank “C” Facility, the Commodity Prepay Facility, the Equipment Warehouse Facility, the Commodity Prepay Facility Guaranty and the Equipment Warehouse Facility Guaranty, (c) cancellation of the Exchanged Notes and the Impaired Note Indentures (to the extent they apply to the Exchanged Notes), (d) the issuance of the New Mirant 7.5% Senior Secured Notes and (e) the execution and delivery of the New Mirant Secured Credit Facility and the New Mirant Indenture. On the Effective Date, the officers of the Debtors are authorized and directed to do all things and to execute and deliver all agreements, documents, instruments, notices and certificates as are contemplated by the Plan and to take all necessary action required in connection therewith, in the name of and on behalf of the Debtors.

Upon the occurrence of the Effective Date, the Mirant Impaired Notes shall be cancelled and annulled. Immediately upon the completion of all Plan Distributions to the holders of Mirant Impaired Notes, the Impaired Note Indentures (to the extent they apply to the Mirant Impaired Notes) shall be cancelled and the indenture trustees under the Impaired Note Indentures shall be authorized to take such action as shall be necessary or appropriate to terminate and extinguish the Debtors’ obligations under the Impaired Note Indentures (to the extent they apply to the Mirant Impaired Notes), without further approval, act or other determination under applicable law, regulation, order or rule. The indenture trustees under the Impaired Note Indentures and their agents, successors and assigns shall facilitate the making of Plan Distributions to the holders of Mirant Impaired Notes, as applicable, as set forth in Section 8.9, and upon the completion thereof, shall be discharged of all their respective obligations associated with the Mirant Impaired Notes and the Impaired Note Indentures (to the extent they apply to the Mirant Impaired Notes).

On or about the Effective Date, Mirant shall issue the New Mirant 7.5% Senior Secured Notes and the New Indenture Trustee shall be authorized to take such actions as are necessary or appropriate to implement the issuance of the new notes, without further approval, act or other determination under applicable law, regulation, order or rule.

The Secured Parties shall have the benefit of a first priority security interest in and to the Collateral which shall be granted in favor of the Collateral Agent for the benefit of such Secured Parties. The Intercreditor Agreement shall govern the priority amongst the Secured Parties and shall provide, among other things, that (a) the proceeds of any enforcement of the liens in and to the Collateral will be paid first, to the New MAG Lenders, and second, equally and ratably, to the remaining Secured Parties and (b) net cash proceeds from certain assets sales shall be shared equally and ratably among the Secured Parties.

Each of the Debtors shall continue to exist after the Effective Date as separate corporate entities, with all corporate powers, in accordance with the laws of its jurisdiction and pursuant to the New Constituent Documents, which shall become effective upon the occurrence of the Effective Date. On the Effective Date or as soon as practicable thereafter, the Debtors shall file with the Secretary of State in the State of its incorporation or with such other relevant governmental or other body as may be required by applicable law, the relevant New Constituent Documents for each Debtor, required to be so filed. At any time following the Effective Date, any Debtor may amend or modify its respective New Constituent Documents in a manner consistent with this Plan and as permitted by applicable law.

Upon the occurrence of the Effective Date, title to all of the Assets of the Debtors shall vest in the Debtors free and clear of all liens, Claims, Causes of Action, interests, security interests and other encumbrances, except as expressly provided in the Plan. Except as otherwise provided in the Plan, the Debtors may operate their business and may use, acquire and dispose of their Assets free of any restrictions of the Bankruptcy Code on and after the occurrence of the Effective Date.

Upon the occurrence of the Effective Date, the management, control, and operation of each of the Debtors shall be the general responsibility of the respective management of each of the Debtors. Entry of the Confirmation Order shall ratify and approve all actions taken by the boards of directors of each of the Debtors from the Petition Date through and until the Effective Date.

The initial boards of directors of each of the Debtors shall be composed of the individuals who currently hold such positions. From and after the Effective Date, the members of the board of directors of the Debtors shall be selected and determined in accordance with the provisions of the respective New Constituent Documents.

The current officers of each of the Debtors shall continue in such positions after the Effective Date in accordance with their respective employment agreements, if any, and applicable nonbankruptcy law. Subject to any applicable employment agreements and applicable nonbankruptcy law, from and after the Effective Date, the officers of each of the Debtors shall be selected and appointed by the respective boards of directors

Except as otherwise provided in the Plan, all Causes of Action assertable by any of the Debtors, including but not limited to Avoidance Actions, shall, upon the occurrence of the Effective Date, be retained by, and be vested in, the Debtors, in accordance with the Plan. Except as otherwise provided in the Plan, the Debtors’ rights to commence such Causes of Action (including Avoidance Actions) shall be preserved notwithstanding consummation of the Plan. All obligations of the Debtors to indemnify and are hold harmless their respective current and former directors, officers and employees, whether arising under the Debtors’ constituent documents, contract, law or equity, shall be assumed by the Debtors upon the occurrence of the Effective Date with the same effect as though such obligations constituted executory contracts that are assumed under section 365 of the Bankruptcy Code, and all such obligations shall be fully enforceable on their terms from and after the Effective Date.

Parties in interest, including without limitation creditors, may not rely on the absence of a specific reference in the Plan or Disclosure Statement to any Cause of Action against them as any indication that the Debtors will not pursue any and all available Causes of Action against them. The Debtors and the Debtors’ Estates expressly reserve all rights to prosecute any and all Causes of Action against any Person, except as otherwise provided in the Plan.

Upon the occurrence of the Effective Date, Mirant shall be appointed to serve as the Disbursing Agent, and shall have all powers, rights, duties and protections afforded the Disbursing Agent under the Plan.

All Cash necessary for the Disbursing Agent to make payments and Plan Distributions pursuant to the Plan shall be obtained from the Debtors’ existing Cash balances.

The Disbursing Agent may, but shall not be required to, invest any funds held by the Disbursing Agent pending the distribution of such funds pursuant to the Plan in investments that are exempt from federal, state, and local taxes. Subject to definitive guidance from the IRS or a court of competent jurisdiction to the contrary (including the receipt by the Disbursing Agent of a private letter ruling if the Disbursing Agent so requests one, or the receipt of an adverse determination by the IRS upon audit if not contested by the Disbursing Agent), the Disbursing Agent shall (a) treat the funds and other property held by it as held in a single trust for federal income tax purposes in accordance with the trust provisions of the Internal Revenue Code (sections 641 et seq.), and (b) to the extent permitted by applicable law, report consistently with the foregoing for state and local income tax purposes.

Except as expressly provided below, as of the Effective Date, for good and valuable consideration, each of the Debtors in their individual capacities and as Debtors in Possession, shall be deemed to have forever released, waived and discharged all Causes of Action (other than the rights of the Debtors to enforce the Plan and the contracts, instruments, releases, indentures and other agreements or documents delivered thereunder), whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the Chapter 11 Cases or the Plan and that could have been asserted by the Debtors against (i) their respective current and former directors, officers, employees (other than for money borrowed from or owed to the Debtors or their respective subsidiaries by any such directors, officers or

employees as set forth in the Debtors’ books and records), agents, members, shareholders and professionals and (ii) the DIP Lenders and the DIP Agent and their respective affiliates, current and former directors, officers, employees, agents, members, shareholders, and professionals; provided that any Cause of Action which may be brought derivatively against any of the foregoing Persons, by any current or former holder of a Claim against, or any Equity Interest in, any of the Debtors for the benefit of any Debtor, shall be expressly preserved and retained.

Each holder of any Claim against, or any Equity Interest in, any of the Debtors that has expressly indicated its agreement in any ballot demonstrating its acceptance or rejection of the Plan to be bound by the provisions of this Section 7.17 shall be deemed to have released, waived and/or discharged any Cause of Action, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the Chapter 11 Cases or the Plan against (i) any of the Debtors’ current and former directors, officers, employees, agents, members, shareholders and professionals and/or (ii) the DIP Lenders and the DIP Agent and/or their respective affiliates, current and former officers, directors, employees, agents, members, shareholders, and professionals.

The Disbursing Agent shall make all Plan Distributions in accordance with the provisions of this Plan. Whenever any Plan Distribution shall be due on a day other than a Business Day, such Plan Distribution shall instead be made, without interest, on the immediately succeeding Business Day, but shall be deemed to have been made on the date due. For federal income tax purposes, a Plan Distribution will be allocated to the principal amount of a Claim first and then, to the extent the Plan Distribution exceeds the principal amount of the Claim, to the portion of the Claim representing accrued but unpaid interest.

Except for Plan Distributions to holders of Allowed DIP Claims which pursuant to Section 5.1(e) shall be made on the Effective Date, each Plan Distribution shall be made on the relevant Distribution Date therefor and shall be deemed to have been timely made if made on such date or within ten (10) days thereafter.

Subject to Bankruptcy Rule 9010, any Plan Distribution or delivery to a holder of an Allowed Claim shall be made at the address of such holder as set forth (a) in the Schedules, (b) on the proof of Claim filed by such holder, (c) in any notice of assignment filed with the Court with respect to such Claim pursuant to Bankruptcy Rule 3001(e), (d) in any notice served by such holder giving details of a change of address or (e) in the case of the holders of Mirant Impaired Notes, to the applicable indenture trustee for distribution to the holders of such notes. If any holder’s Plan Distribution or payment is returned to the Disbursing Agent as undeliverable, no Plan Distributions or payments to such holder shall be made to such holder unless the Disbursing Agent is notified of such holder’s then current address within three months after such Plan Distribution was returned. After such date, if such notice was not provided, a holder shall have forfeited its right to such Plan Distribution, and the undeliverable Plan Distributions shall revert to the Debtors.

No Plan Distribution of less than twenty-five dollars ($25.00) shall be made by the Disbursing Agent to the holder of any Claim unless a request therefor is made in writing to the Disbursing Agent. If no request is made as provided in the preceding sentence within ninety (90) days of the Effective Date, all such Plan Distributions shall revert to the Debtors.

Checks issued in respect of Allowed Claims shall be null and void if not negotiated within one hundred and eighty (180) days after the date of issuance thereof. Requests for reissuance of any voided check shall be made directly to the Disbursing Agent by the holder of the Allowed Claim with respect to which such check originally was issued. Any Claim in respect of such a voided check shall be made on or before the later of (a) the first anniversary of the date on which such Plan Distribution or payment was made and (b) one hundred and eighty (180) days after the date of the issuance of such check. If no Claim is made as provided in the preceding sentence, all Claims in respect of void checks shall be discharged and forever barred and such unclaimed Plan Distributions shall revert to the Debtors.

Unless the Person receiving a Plan Distribution agrees otherwise, any Plan Distribution to be made in Cash under the Plan shall be made, at the election of the Disbursing Agent, by check drawn on a domestic bank or by wire transfer from a domestic bank. Cash payments to foreign creditors may be made, at the option of the Debtors, in such funds and by such means as are necessary or customary in a particular foreign jurisdiction.

Except as otherwise ordered by the Bankruptcy Court or as provided herein, the amount of any reasonable fees and expenses incurred (or to be incurred) by the Disbursing Agent on or after the Effective Date (including, but not limited to, taxes) shall be paid when due. Professional fees and expenses incurred by the Disbursing Agent from and after the Effective Date in connection with the effectuation of the Plan shall be paid in the ordinary course of business. Any dispute regarding compensation shall be resolved by agreement of the parties or if the parties are unable to agree, as determined by the Bankruptcy Court.

Notwithstanding anything to the contrary contained herein, no Cash payments of fractions of cents will be made. Fractional cents shall be rounded to the nearest whole cent (with any amount equal to or less than 0.5 cents to be rounded down).

As a condition to receiving any Plan Distribution, on or before the Distribution Date, each holder of Allowed Mirant Impaired Note Claims shall surrender all certificates or instruments representing such Claims to the indenture trustee or agent, as the case may be, with respect to such debt, and shall execute and deliver such other documents as may be necessary to effectuate the Plan. Such certificates or instruments shall thereafter be cancelled and extinguished. No Plan Distribution shall be made to or on behalf of any holder of such Claims unless and until such certificate or instruments are surrendered to the applicable indenture trustee or agent, or unless any relevant holder provides to the applicable indenture trustee or agent, an affidavit of loss or such other documents as may be required by such indenture trustee or agent together with an appropriate indemnity in the customary form. Any such holder who fails to surrender such certificate or interest or otherwise fails to deliver an affidavit of loss and indemnity prior to the second anniversary of the Effective Date, shall be deemed to have forfeited its rights and Claims under such Mirant Impaired Notes and shall not participate in any Plan Distribution hereunder. All property in respect of such forfeited Claims shall revert to the Debtors.

As soon as practicable, but in no event later than one hundred and eighty (180) days after the Effective Date (subject to being extended by the Bankruptcy Court upon motion of the Disbursing Agent without notice or a hearing), objections to Claims shall be filed with the Bankruptcy Court and served upon the holders of each of the Claims to which objections are made.

The Disbursing Agent may object to the allowance of Claims filed with the Bankruptcy Court with respect to which liability is disputed in whole or in part. All objections that are filed and prosecuted as provided herein shall be litigated to Final Order or compromised and settled in accordance with Section 9.3.

Notwithstanding any requirements that may be imposed pursuant to Bankruptcy Rule 9019, from and after the Effective Date, all Claims and Causes of Action (including Avoidance Actions) that any of the Debtors assert against other parties may be compromised and settled according to the following procedures:


	(a) Subject to subsection 9.3(b) hereof, the following settlements or compromises do not require the review or approval of the Bankruptcy Court or any other party in interest:


	(i) The settlement or compromise of a Claim pursuant to which such Claim is Allowed in an amount of $100,000 or less; and

	(ii) The settlement or compromise of a Claim where the difference between the amount of the Claim listed on the Debtors’ Schedules and the amount of the Claim proposed to be Allowed under the settlement is $100,000 or less; and


	(b) The following settlements or compromises shall be submitted to the Bankruptcy Court for approval:


	(i) Any settlement or compromise not described in subsection 9.3(a); and

	(ii) Any settlement or compromise of a Claim or a Claim asserted by one or more of the Debtors that involves an “insider,” as defined in section 101(31) of the Bankruptcy Code.

Notwithstanding any other provision of the Plan, no payment or Plan Distribution shall be made with respect to any Claim to the extent it is a Contested Claim, unless and until such Contested Claim becomes an Allowed Claim, subject to the Debtors’ setoff rights as provided in Section 14.16.

Payments and Plan Distributions to each holder of a Contested Claim, to the extent that such Claim ultimately becomes Allowed, shall be made in accordance with the provision of the Plan governing the class of Claims to which the respective holder belongs.

The Disbursing Agent may, at any time, request that the Bankruptcy Court estimate any Contested Claim pursuant to section 502(c) of the Bankruptcy Code regardless of whether the Disbursing Agent has previously objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court will retain jurisdiction to estimate any Claim at any time during litigation concerning any

objection to any Claim, including during the pendency of any appeal relating to any such objection. In the event that the Bankruptcy Court estimates any Contested Claim, that estimated amount will constitute either the allowed amount of such Claim or a maximum limitation on such Claim, as determined by the Bankruptcy Court. If the estimated amount constitutes a maximum limitation on such Claim, the Disbursing Agent may elect to pursue any supplemental proceedings to object to any ultimate payment on such Claim. All of the objection, estimation, settlement, and resolution procedures set forth in the Plan are cumulative and not necessarily exclusive of one another. Claims may be estimated and subsequently compromised, settled, withdrawn or resolved by any mechanism approved by the Bankruptcy Court.


	(a) The Clerk of the Bankruptcy Court shall have entered an order or orders, which may be the Confirmation Order, approving the Disclosure Statement as containing “adequate information” pursuant to section 1125 of the Bankruptcy Code, approving the prepetition solicitation of votes with respect to the Plan and determining that all such votes are binding and have been properly tabulated with acceptances or rejection of the Plan, confirming the Plan and determining that all applicable tests, standards and burdens in connection therewith have been duly satisfied and met by the Debtors and the Plans approving the Plan Documents, authorizing the Debtors to execute, enter into, and deliver the Plan Documents and to execute, implement, and to take all actions otherwise necessary or appropriate to give effect to, the transactions contemplated by the Plan and the Plan Documents.

	(b) The Confirmation Order, the Plan Documents and the Plan shall be, in form and substance, acceptable to the Debtors.


	(a) The Confirmation Order shall have been entered by the Clerk of the Bankruptcy Court, be in full force and effect and not be subject to any stay or injunction.

	(b) All necessary consents, authorizations and approvals shall have been given for the transfers of property and the payments provided for or contemplated by the Plan, including, without limitation, satisfaction or waiver of all conditions to the obligations of the Debtors under the Plan and the Plan Documents.

	(c) The New Mirant Secured Credit Facility, New MAG Secured Credit Facility and the New Mirant Indenture shall have become effective and all conditions to the effectiveness thereof shall have been satisfied or waived.

The Debtors may waive any one or more of the conditions set forth in Section 10.1 (other than the condition in paragraph (a) thereof) or Section 10.2 (other than the condition in paragraph (a) thereof) in a writing executed by each of them without notice or order of the Bankruptcy Court and without notice to any parties in interest.

If the Effective Date shall not occur notwithstanding Section 10.3, the Plan shall be null and void and nothing contained in the Plan shall: (a) constitute a waiver or release of any Claims against or Equity Interests in a Debtor; (b) prejudice in any manner the rights of the Debtors, including without limitation, the right to seek a further extension of the exclusivity periods under section 1121(d) of the Bankruptcy Code; or (c) constitute an admission, acknowledgement, offer or undertaking by the Debtors.

Pursuant to the terms and provisions of the Plan, the Disbursing Agent shall be empowered and directed to (a) take all steps and execute all instruments and documents necessary to make Plan Distributions to holders of Allowed Claims; (b) make distributions contemplated by the Plan; (c) comply with the Plan and the obligations thereunder; (d) employ, retain, or replace professionals to represent it with respect to its responsibilities; (e) object to Claims as specified in Article IX hereof, and prosecute such objections; (f) compromise and settle any issue or dispute regarding the amount, validity, priority, treatment, or Allowance of any Claim as provided in Article IX hereof; (g) make annual and other periodic reports regarding the status of distributions under the Plan to the holders of Allowed Claims that are outstanding at such time; such reports to be made available upon request to the holders of any Contested Claim; and (h) exercise such other powers as may be vested in the Disbursing Agent pursuant to the Plan, the Plan Documents or order of the Bankruptcy Court.

Pursuant to the terms and provisions of the Plan, the Disbursing Agent shall make the required Plan Distributions specified under the Plan on the relevant Distribution Date therefor.

Except as otherwise provided in this Section 11.3, the Disbursing Agent, together with its officers, directors, employees, agents, and representatives, are hereby exculpated by all Persons, holders of Claims and Equity Interests, and all other parties in interest, from any and all Causes of Action, and other assertions of liability (including breach of fiduciary duty) arising out of the discharge of the powers and duties conferred upon the Disbursing Agent by the Plan, any Final Order of the Bankruptcy Court entered pursuant to or in the furtherance of the Plan, or applicable law, except solely for actions or omissions arising out of the Disbursing Agent’s willful misconduct or gross negligence. No holder of a Claim or an Equity Interest, or representative thereof, shall have or pursue any Claim or Cause of Action (a) against the Disbursing Agent or its officers, directors, employees, agents, and representatives for making payments or Plan Distributions in accordance with the Plan, or (b) against any holder of a Claim for receiving or retaining payments or transfers of assets as provided for by the Plan. Nothing contained in this Section 11.3 shall preclude or impair any holder of an Allowed Claim from bringing an action in the Bankruptcy Court against the Debtor to compel the making of Plan Distributions contemplated by the Plan on account of such Claim.

Pursuant to section 365 of the Bankruptcy Code, any executory contracts or unexpired leases of the Debtors which have not been previously assumed or rejected or are not subject to a motion to reject on or

before the Effective Date shall be deemed to have been assumed by the Debtors on the Effective Date. The Plan shall constitutes a motion to assume such executory contracts and unexpired leases. Subject to the occurrence of the Effective Date, entry of the Confirmation Order by the Clerk of the Bankruptcy Court shall constitute approval of such assumptions pursuant to section 365 of the Bankruptcy Code and findings by the Bankruptcy Court that the Debtors have properly provided for the cure of any defaults that may exist, that each assumption is in the best interest of the Debtors, their Estates, and all parties in interest in the Chapter 11 Cases and that the requirements for assumption of any executory contract or unexpired lease to be assumed under section 365 of the Bankruptcy Code have been satisfied. Except as otherwise provided in the following sentence, all cure payments which may be required by section 365(b)(1) of the Bankruptcy Code under any executory contract or unexpired lease which is assumed under the Plan shall be made by the Debtors on the Effective Date or as soon as practicable thereafter. In the event of a dispute, cure payments required by section 365(b)(1) of the Bankruptcy Code shall be paid by the Debtors upon entry of a Final Order resolving such dispute.

Any executory contracts or unexpired leases of the Debtors identified for rejection by the Debtors on or before the Confirmation Date shall be deemed to have been rejected on the Effective Date or as otherwise set forth in an order of the Bankruptcy Court authorizing and approving such rejection. The Plan shall constitute a motion to reject such executory contracts and unexpired leases, and the Debtors shall have no liability thereunder except as is specifically provided in the Plan. Entry of the Confirmation Order by the Clerk of the Bankruptcy Court shall constitute approval of such rejections pursuant to section 365(a) of the Bankruptcy Code and a finding by the Bankruptcy Court that each such rejected executory contract or unexpired lease is burdensome and that the rejection thereof is in the best interest of the Debtors, their Estates, and all parties in interest in these Chapter 11 Cases.

Claims created by the rejection of executory contracts or unexpired leases or the expiration or termination of any executory contract or unexpired lease prior to the Confirmation Date must be filed with the Bankruptcy Court and served on the Debtors (a) in the case of an executory contract or unexpired lease rejected by the Debtors prior to the Confirmation Date, in accordance with the Bar Date Notice, or (b) in the case of an executory contract or unexpired lease that (i) was terminated or expired by its terms prior to the Confirmation Date, or (ii) is deemed rejected pursuant to Section 12.2, no later than thirty (30) days after the Confirmation Date. Any such Claims for which a proof of Claim is not filed and served within such time will be forever barred from assertion and shall not be enforceable against the Debtors, their Estates, Assets, properties, interests in property, or against the property of a third party that receives payment of such Claim. Unless otherwise ordered by the Bankruptcy Court, all such Claims that are timely filed as provided herein shall be treated as General Unsecured Claims under the Plan subject to objection by the Debtors.

Pursuant to sections 105(a) and 1142 of the Bankruptcy Code, the Bankruptcy Court shall retain and shall have exclusive jurisdiction over any matter (a) arising under the Bankruptcy Code, (b) arising in or related to the Chapter 11 Cases or the Plan, or (c) that relates to the following:

(i) To hear and determine any and all motions or applications pending on the Confirmation Date or thereafter brought in accordance with Article XI hereof for the assumption and/or assignment or rejection of executory contracts or unexpired leases to which any of the Debtors is a party or with respect to which any of the Debtors may be liable, and to hear and determine any and all Claims and any related disputes (including, without limitation, the exercise or enforcement of setoff or recoupment recapement rights, or rights against any third party or the property of any third party resulting therefrom or from the expiration, termination or liquidation of any executory contract or unexpired lease;


	(ii) To determine any and all adversary proceedings, applications, motions, and contested or litigated matters that may be pending on the Effective Date or that, pursuant to the Plan, may be instituted by the Disbursing Agent or the Debtors, as applicable, after the Effective Date;

	(iii) To hear and determine any objections to the allowance of Claims, whether filed, asserted, or made before or after the Effective Date, including, without express or implied limitation, to hear and determine any objections to the classification of any Claim and to allow, disallow or estimate any Contested Claim in whole or in part;

	(iv) To issue such orders in aid of execution of the Plan to the extent authorized or contemplated by section 1142 of the Bankruptcy Code;

	(v) To consider any modifications of the Plan, remedy any defect or omission, or reconcile any inconsistency in any order of the Bankruptcy Court, including, without limitation, the Confirmation Order;

	(vi) To hear and determine all Fee Applications and applications for allowances of compensation and reimbursement of any other fees and expenses authorized to be paid or reimbursed under the Plan or the Bankruptcy Code;

	(vii) To hear and determine all controversies, suits, and disputes that may relate to, impact upon, or arise in connection with the Plan, the Plan Documents or their interpretation, implementation, enforcement, or consummation;

	(viii) To hear and determine all controversies, suits, and disputes that may relate to, impact upon, or arise in connection with the Confirmation Order (and all exhibits to the Plan) or its interpretation, implementation, enforcement, or consummation;

	(ix) To the extent that Bankruptcy Court approval is required, to consider and act on the compromise and settlement of any Claim or cause of action by, on behalf of, or against the Estates;

	(x) To determine such other matters that may be set forth in the Plan, or the Confirmation Order, or that may arise in connection with the Plan, or the Confirmation Order;

	(xi) To hear and determine matters concerning state, local, and federal taxes, fines, penalties, or additions to taxes for which the Debtors, the Debtors in Possession, or the Disbursing Agent may be liable, directly or indirectly, in accordance with sections 346, 505, and 1146 of the Bankruptcy Code;

	(xii) To hear and determine all controversies, suits, and disputes that may relate to, impact upon, or arise in connection with any setoff and/or recoupment rights of the Debtors or any Person;

	(xiii) To hear and determine all controversies, suits, and disputes that may relate to, impact upon, or arise in connection with Causes of Action of the Debtors (including Avoidance Actions) commenced by the Disbursing Agent or the Debtors, as applicable, before or after the Effective Date;

	(xiv) To enter an order or final decree closing the Chapter 11 Cases;

	(xv) To issue injunctions, enter and implement other orders or take such other actions as may be necessary or appropriate to restrain interference by any Person with consummation, implementation or enforcement of the Plan or the Confirmation Order; and

	(xvi) To hear and determine any other matters related hereto and not inconsistent with chapter 11 of the Bankruptcy Code.

All fees payable pursuant to section 1930 of title 28 of the United States Code, as determined by the Bankruptcy Court at the Confirmation Hearing, shall be paid by the Debtors on or before the Effective Date.

The rights afforded in the Plan and the treatment of all Claims and Equity Interests herein shall be in exchange for and in complete satisfaction, discharge, and release of all Claims and Equity Interests of any nature whatsoever, including any interest accrued thereon from and after the Petition Date, against the Debtors and the Debtors in Possession, or any of their Estates, Assets, properties, or interests in property. Except as otherwise provided herein, on the Effective Date, all Claims against and Equity Interests in the Debtors and the Debtors in Possession shall be satisfied, discharged, and released in full. The Debtors shall not be responsible for any pre-Effective Date obligations of the Debtors or the Debtors in Possession, except those expressly assumed by any of the Debtors in the Plan. Except as otherwise provided herein, all Persons shall be precluded and forever barred from asserting against the Debtors, their respective successors or assigns, or their Estates, Assets, properties, or interests in property any other or further Claims based upon any act or omission, transaction, or other activity of any kind or nature that occurred prior to the Effective Date, whether or not the facts of or legal bases therefor were known or existed prior to the Effective Date.

The Plan Distributions to the various classes of Claims hereunder shall not affect the right of any Person to levy, garnish, attach, or employ any other legal process with respect to such Plan Distributions by reason of any claimed subordination rights or otherwise. All of such rights and any agreements relating thereto shall remain in full force and effect. Plan Distributions under the Plan shall be subject to and modified by any Final Order directing distributions other than as provided in the Plan. The right of the Debtors to seek subordination of any Claim pursuant to section 510 of the Bankruptcy Code is fully reserved, and the treatment afforded any Claim that becomes a Subordinated Claim at any time shall be modified to reflect such subordination.

None of the Debtors, or any of their respective, members, officers, directors, employees, agents, representatives, advisors, attorneys, successors and assigns shall be liable for any Cause of Action arising in connection with or out of the administration of the Chapter 11 Cases, pursuit of confirmation of the Plan, the consummation of the Plan, or the administration of the Plan or the property to be distributed under the Plan, except for gross negligence or willful misconduct as determined by Final Order of the Bankruptcy Court, and in all respects shall be entitled to rely upon the advice of counsel and all information provided by other exculpated persons herein without any duty to investigate the veracity or accuracy of such information with respect to their duties and responsibilities under the Plan.

Except as otherwise provided in the Plan, all holders of Claims and Equity Interests shall be precluded from asserting against the Debtors, the Assets, or any property dealt with under the Plan, any or other further Claim based upon any act or omission, transaction, or other activity of any kind or nature that occurred prior to the Confirmation Date.

Any notices, requests, and demands required or permitted to be provided under the Plan, in order to be effective, shall be in writing (including, without express or implied limitation, by facsimile transmission), and,


	Mirant Corporation Attention: General Counsel 1155 Perimeter Center West Suite 100 Atlanta, Georgia 30338 Telephone: (678) 579-5000 Telecopier: (678) 579-6767 and

	White & Case LLP Attention: Gerard Uzzi Wachovia Financial Center 200 South Biscayne Boulevard, 49th Floor Miami, Florida 33131 Telephone: (305) 317-2700 Telecopier: (305) 358-5744

The headings used in the Plan are inserted for convenience only, and neither constitute a portion of the Plan nor in any manner affect the construction of the provisions of the Plan.

Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and the Bankruptcy Rules), the laws of the State of New York, without giving effect to the conflicts of laws principles thereof, shall govern the construction of the Plan and any agreements, documents, and instruments executed in connection with the Plan, except as otherwise expressly provided in such instruments, agreements or documents.

The Disbursing Agent is hereby authorized to file a request for expedited determination under section 505(b) of the Bankruptcy Code for all tax returns filed with respect to the Debtors.

Pursuant to section 1146(c) of the Bankruptcy Code, the issuance, transfer, or exchange of notes or equity securities under the Plan, the creation of any mortgage, deed of trust, lien, pledge or other security interest, the making or assignment of any lease or sublease, or the making or delivery of any deed or other instrument of transfer under, in furtherance of, or in connection with the Plan, shall not be subject to any stamp, real estate transfer, mortgage recording, or other similar tax.

Pursuant to section 1129(a)(13), on and after the Effective Date, the Debtors shall continue payment of all retiree benefits, if any, as that term is defined in section 1114 of the Bankruptcy Code.

Promptly upon entry of the Confirmation Order, the Debtors shall publish as directed by the Bankruptcy Court and serve on all known parties in interest and holders of Claims and Equity Interests, notice of the entry of the Confirmation Order and all relevant deadlines and dates under the Plan, including, but not limited to,

Post-petition interest will accrue and be paid on Claims only to the extent specifically provided for in this Plan, the Confirmation Order or as otherwise required by the Bankruptcy Court or by applicable law. No award or reimbursement of attorneys fees or related expenses or disbursements shall be allowed on, or in connection with, any Claim.

As provided in section 1127 of the Bankruptcy Code, modification of the Plan may be proposed in writing by the Debtors at any time before confirmation, provided that the Plan, as modified, meets the requirements of sections 1122 and 1123 of the Bankruptcy Code, and the Debtors shall have complied with section 1125 of the Bankruptcy Code. The Debtors may modify the Plan at any time after confirmation and before substantial consummation, provided that the Plan, as modified, meets the requirements of sections 1122 and 1123 of the Bankruptcy Code and the Bankruptcy Court, after notice and a hearing, confirms the Plan as modified, under section 1129 of the Bankruptcy Code, and the circumstances warrant such modifications. A holder of a Claim that has accepted the Plan shall be deemed to have accepted such Plan as modified if the proposed alteration, amendment or modification does not materially and adversely change the treatment of the Claim or Equity Interest of such holder.

The Debtors reserve the right to revoke and withdraw the Plan with respect to any one or more of the Debtors prior to the occurrence of the Effective Date. If the Debtors revoke or withdraw the Plan with respect to any one or more of the Debtors, or if the Effective Date does not occur as to any Debtor, then, as to such Debtor, the Plan and all settlements and compromises set forth in the Plan shall be deemed null and void and nothing contained herein and no acts taken in preparation for consummation of the Plan shall be deemed to constitute a waiver or release of any Claims against or Equity Interests in such Debtor or to prejudice in any manner the rights of any of the Debtors or any other Person in any other further proceedings involving such Debtor.

In the event that any Debtor has a Claim of any nature whatsoever against the holder of a Claim against such Debtor, then such Debtor may, but is not required to, set off against the Claim (and any payments or other Plan Distributions to be made in respect of such Claim hereunder) such Debtor’s Claim against such holder, subject to the provisions of section 553 of the Bankruptcy Code. Neither the failure to set off nor the allowance of any Claim under the Plan shall constitute a waiver or release of any Claims that any Debtor may has against the holder of any Claim.

In connection with the Plan, the Debtors and the Disbursing Agent, as applicable, shall comply with all withholding and reporting requirements imposed by federal, state, local, and foreign taxing authorities and all Plan Distributions hereunder shall be subject to such withholding and reporting requirements. Notwithstanding the above, each holder of an Allowed Claim that is to receive a Plan Distribution under the Plan shall have the sole and exclusive responsibility for the satisfaction and payment of any tax obligations imposed by any government unit, including income, withholding and other tax obligations, on account of such Plan Distribution. The Disbursing Agent has the right, but not the obligation, to not make a Plan Distribution until such holder has made arrangements satisfactory to the Disbursing Agent for payment of any such tax obligations.

The classification and manner of satisfying all Claims under the Plan take into consideration (a) the existence of guaranties by the Debtors of obligations of other Persons, and (b) the fact that the Debtors may be joint obligors with other Persons with respect to an obligation. All Claims against the Debtors based upon any such guaranties or joint obligations shall be discharged in the manner provided in the Plan; provided, that no creditor shall be entitled to receive more than one recovery with respect to any of its Allowed Claims.

If notified by any governmental authority that it is in violation of any applicable law, rule, regulation, or order of such governmental authority relating to its businesses, the Debtors or the Disbursing Agent, as applicable, shall take whatever action as may be required to comply with such law, rule, regulation, or order; provided, that nothing contained herein shall require such compliance if the legality or applicability of any such requirement is being contested in good faith, and, if appropriate, an adequate reserve for such requirement has been set aside.

On the Effective Date and except as otherwise provided herein, all Persons who have been, are, or may be holders of Claims against or Equity Interests in the Debtors shall be permanently enjoined from taking any of the following actions against or affecting the Debtors, the Estates, the Assets, or the Disbursing Agent, or any of their respective directors, officers, employees, agents, members, shareholders and professionals, successors and assigns or their respective assets and property with respect to such Claims or Equity Interests (other than actions brought to enforce any rights or obligations under the Plan):


	(a) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind (including, without limitation, all suits, actions, and proceedings that are pending as of the Effective Date, which must be withdrawn or dismissed with prejudice);

	(b) enforcing, levying, attaching, collecting or otherwise recovering by any manner or means, whether directly or indirectly, any judgment, award, decree or order;

	(c) creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any encumbrance; and

	(d) asserting any setoff, right of subrogation or recoupment of any kind; provided, that any defenses, offsets or counterclaims which the Debtors may have or assert in respect of the above referenced Claims are fully preserved in accordance with Section 14.17.

The Plan shall be binding upon and inure to the benefit of the Debtors, the holders of all Claims and Equity Interests, and their respective successors and assigns. To the extent any provision of any disclosure statement delivered pursuant to section 1125 of the Bankruptcy Code or any other solicitation document may be inconsistent with the terms of the Plan, the terms of the Plan shall be binding and conclusive.

SHOULD THE BANKRUPTCY COURT DETERMINE THAT ANY PROVISION OF THE PLAN IS UNENFORCEABLE EITHER ON ITS FACE OR AS APPLIED TO ANY CLAIM OR EQUITY INTEREST OR TRANSACTION, THE DEBTORS MAY MODIFY THE PLAN IN ACCORDANCE WITH SECTION 14.15 SO THAT SUCH PROVISION SHALL NOT BE APPLICABLE TO THE HOLDER OF ANY CLAIM OR EQUITY INTEREST. SUCH A DETERMINATION OF UNENFORCEABILITY SHALL NOT (A) LIMIT OR AFFECT THE ENFORCEABILITY AND OPERATIVE


	Page

FORWARD-LOOKING STATEMENTS		ii
WHERE YOU CAN FIND MORE INFORMATION		ii
INCORPORATION OF DOCUMENTS BY REFERENCE		iii
SUMMARY OVERVIEW AND Q&A		1
RISK FACTORS		20
MIRANT CORPORATION		36
CAPITALIZATION		37
THE RESTRUCTURING TRANSACTIONS		39
THE EXCHANGE OFFERS		43
DESCRIPTION OF THE NEW SECURED NOTES		53
DESCRIPTION OF CERTAIN OTHER INDEBTEDNESS		62
DESCRIPTION OF THE COLLATERAL AND INTERCREDITOR AGREEMENTS		66
LEGAL MATTERS		67
THE PLAN OF REORGANIZATION		68
PROCEDURES FOR VOTING ON THE PLAN OF REORGANIZATION		105
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES		110
RECOMMENDATION AND CONCLUSION		115
SUMMARY OF PRINCIPAL TERMS AND CONDITIONS OF PROPOSED SENIOR SECURED RESTRUCTURED CREDIT FACILITIES		A-1
GRANTOR SUBSIDIARIES		B-1
FIVE-YEAR PROJECTIONS		C-1
LIQUIDATION ANALYSIS		D-1
PLAN OF REORGANIZATION		I-1


By Regular or Certified Mail:	By Hand:	By Overnight Mail or Courier:
DB Services Tennessee, Inc. Reorganization Unit P.O. Box 292737 Nashville, TN 37229-2737	Deutsche Bank Trust Company Americas C/ O The Depository Trust Clearing Corporation 55 Water Street, 1st Floor Jeannete Park Entrance New York, NY 10041	DB Services Tennessee, Inc. Corporate Trust & Agency Services Reorganization Unit 648 Grassmere Park Road Nashville, TN 37211 Attention: Karl Shepard
To Confirm by Telephone or for Information Call:		By Facsimile (Eligible Guarantor Institutions Only):

(800) 735-7777		(615) 835-3701


Securities Offered		Up to $867 million in principal amount of 7.5% Senior Secured Notes due 2008 (reflecting our ownership of $83 million of TIERS).

The Exchange Offers		We are offering $1,000 principal amount of our New Secured Notes for each $1,000 principal amount of our outstanding Exchange Offer Securities. You may tender your Exchange Offer Securities for exchange by following the procedures described under the heading “The Exchange Offers.”

Expiration Date; Acceptance of Tenders; Delivery of New Secured Notes		The Exchange Offers will expire at 12:00 midnight, New York City time, on June 27, 2003, unless we extend them. Subject to certain conditions described herein, we will accept Exchange Offer Securities that are validly tendered on or prior to the Expiration Date. We will issue the New Secured Notes promptly following the Expiration Date upon our determination that the conditions to the


Issuer		Mirant Corporation

Securities Offered		Up to $867 million aggregate principal amount of 7.5% Senior Secured Notes due 2008.

Maturity Date		July 15, 2008.

Interest		Interest on the New Secured Notes will accrue at the rate of 7.5% per annum and will be payable semiannually on June 15 and December 15 of each year, commencing on December 15, 2003. Interest will be paid to holders of record as of the June 1 or December 1 immediately preceding such payment date.

Security		The New Secured Notes will be secured by first priority liens on the Collateral.

		The first priority liens will be shared equally and ratably with our lenders under the Mirant Secured Credit Facility, lenders under the MAG Secured Credit Facility, the holders of the New MAG Notes and holders of certain future indebtedness that Mirant or MAG may enter into from time to time.

Ranking		The New Secured Notes will be senior to our existing and future subordinated indebtedness, effectively senior, to the extent of the value of the Collateral, to our unsecured debt and the unsecured debt of our subsidiaries that are pledging Collateral, and will be pari passu in right of payment with our other senior secured debt secured by the Collateral. The New Secured Notes will be effectively subordinated to the outstanding indebtedness and other liabilities of our subsidiaries that will not be pledging any assets or equity as Collateral (such subsidiaries, the “Non-Grantor Subsidiaries”). Any Exchange Offer Securities not tendered in the Exchange Offers will be effectively junior to the New Secured Notes to the extent of the value of the Collateral.

Optional Redemption		The New Secured Notes will be redeemable, at our option, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days’ notice, at the redemption prices described herein, plus any accrued interest to the date fixed for redemption. See “Description of the New Secured Notes — Optional Redemption.”

Covenants		The covenants in the indenture governing the New Secured Notes will be substantially similar to the covenants in fiscal agency agreement governing the Senior Notes (the “Fiscal Agency Agreement”). These covenants will restrict our ability, among other things, to engage in mergers, consolidations or similar transactions, and incur liens. These limitations are subject to a number of important qualifications and exceptions. The indenture governing the New Secured Notes will also contain certain additional covenants relating to the Collateral and the security agreements. For further information regarding the restrictions imposed on us by the



		Years Ended December 31,

		2002			2001			2000		1999		1998


		(in millions except per share data)
Statement of Operations Data:
Operating revenues		$	6,436		$	8,524		$	3,951	$	2,265	$	1,819
Income (loss) from continuing operations			(2,352	)		465			299		362		(12	)
Income (loss) from discontinued operations			(86	)		(56	)		31		10		12
Net income (loss)			(2,438	)		409			330		372		—
Earnings (loss) per diluted share:
	From continuing operations	$	(5.85	)	$	1.34		$	1.03	$	1.33	$	(0.04	)
	From discontinued operations		(0.21	)		(0.15	)		0.11		0.04		0.04

	Net income (loss)	$	(6.06	)	$	1.19		$	1.14	$	1.37		—


Summary		The Plan of Reorganization provides for, among other things, the claims represented by the Exchange Offer Securities to be satisfied in full for substantially the same consideration being offered in the Exchange Offers, as set forth above. Through the Plan of Reorganization, all claims against and interests in us that would exist on the date when we would file our voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code would be divided into classes, exclusive of certain claims, including DIP facility claims (as described herein), administrative claims, and priority tax claims, which would not be required to be classified.

		All but four classes of Claims and Equity Interests (each as defined and described in the Plan of Reorganization) would be unimpaired under the Plan of Reorganization. Administrative Claims, DIP Claims, Tax Claims, Mirant Class 1 Priority Claims, Mirant Class 2 Secured Claims, Mirant Class 5 General Unsecured Claims, Mirant Class 6 Securities Litigation Claims, Mirant Class 7 Equity Interests, MAEM Class 1 Priority Claims, MAEM Class 2 Secured Claims, MAEM Class 4 General Unsecured Claims, MAEM Class 5 Equity Interests, MADCI Class 1 Priority Claims, MADCI Class 2 Secured Claims, MADCI Class 4 General Unsecured Claims, MADCI Class 5 Equity Interests, MLW Class 1 Priority Claims, MLW Class 2 Secured Claims, MLW Class 3 General Unsecured Claims and MLW Class 4 Equity Interests all would be unimpaired by the Plan of Reorganization. Holders of these Claims and Equity Interests would be deemed to accept the Plan of Reorganization, would not be entitled to vote on the Plan of Reorganization and all of their legal, equitable and contractual rights would be fully reinstated and retained under the Plan of Reorganization. The following summarizes the classification and treatment through the Plan of Reorgani-



	As of December 31,

	2002		2001		2000		1999		1998


	(in millions)
Balance Sheet Data:
Total assets	$	19,415	$	22,043	$	22,407	$	14,013	$	12,054
Subsidiary obligated mandatorily redeemable preferred securities(1)		—		—		950		1,031		1,033
Non-recourse debt(2)		4,631		5,763		6,283		6,202		5,101
Notes payable to Southern		—		—		—		—		926
Total long-term debt (including current portion)		8,822		8,435		5,849		5,185		3,919
Total debt		8,887		8,490		7,183		7,145		6,027
Company obligated mandatorily redeemable securities of a subsidiary holding solely parent company debentures		345		345		345		—		—
Stockholders’ equity		2,955		5,258		4,165		3,153		2,642


						As
			Actual			Adjusted


			(in millions)
Short-term debt (excluding current portion of long-term debt):			$	65		$	65
Long-term debt:
Existing long-term debt:
	Bank Debt			2,299			—
	7.4% Senior Notes due 2004			200			30
	2.5% Convertible Senior Debentures due 2021			750			113
	MAG 7.625% Senior Notes due 2006			500			75
	Other existing long-term debt			5,073			5,073
New long-term debt:
	Mirant Secured Credit Facility			—			1,999
	MAG Secured Credit Facility			—			300
	7.5% Senior Secured Notes due 2008			—			724
	MAG 7.625% Senior Secured Notes due 2008			—			425
Minority Interest				305			305
Company Obligated Mandatorily Redeemable Securities of a Subsidiary Holding Solely Parent Company Debentures				345			345
Stockholders’ Equity:
Common stock, $.01 par value, per share				4			4
Additional paid-in capital				4,899			4,899
Retained earnings				(1,844	)		(1,844	)
Accumulated other comprehensive loss				(102	)		(102	)
Treasury stock, at cost				(2	)		(2	)

		Total Capitalization	$	12,492		$	12,409


			Actual			As Adjusted


			(in millions)
Short-term debt (excluding current portion of long-term debt):			$	65		$	65
Long-term debt:
Existing long-term debt:
	Bank Debt			2,299			—
	7.4% Senior Notes due 2004			200			—
	2.5% Convertible Senior Debentures due 2021			750			—
	MAG 7.625% Senior Notes due 2006			500			—
	Other existing long-term debt			5,073			5,073
New long-term debt:
	Mirant Secured Credit Facility			—			1,999
	MAG Secured Credit Facility			—			300
	7.5% Senior Secured Notes due 2008			—			867
	MAG 7.625% Senior Secured Notes due 2008			—			500
Minority Interest				305			305
Company Obligated Mandatorily Redeemable Securities of a Subsidiary Holding Solely Parent Company Debentures				345			345
Stockholders’ Equity:
Common stock, $.01 par value, per share				4			4
Additional paid-in capital				4,899			4,899
Retained earnings				(1,844	)		(1,844	)
Accumulated other comprehensive loss				(102	)		(102	)
Treasury stock, at cost				(2	)		(2	)

		Total Capitalization	$	12,492		$	12,409


Year	Percentage

2003		105.00	%
2004		104.00	%
2005		103.00	%
2006		102.00	%
2007		101.00	%
2008		100.00	%


	*Fiscal Agency Agreement, dated as of July 26, 1999, with Bankers Trust Company, as fiscal agent*


	*Indenture, dated as of October 1, 2000, with Bankers Trust Company, as trustee*


	*Indenture, dated as of May 31, 2001, with Bankers Trust Company, as trustee*


	*Indenture dated as of July 8, 2002, with Deutsche Bank Trust Company Americas, as trustee*


	*Mirant Americas Development Capital, LLC — Domestic Turbine Lease Facility*


	*Summary of the Exchange Offers*


	*Mirant Americas Energy Marketing, LP — Commodity Prepay Facility*


	*Indenture, dated as of May 1, 2001, with Bankers Trust Company, as trustee*


*2.5% Convertible Senior Debenture Claims*		means Claims of 2.5% Convertible Senior Debenture Holders arising under, or as a consequence of owning, the 2.5% Convertible Senior Debentures.

*2.5% Convertible Senior Debenture Holder*		means a holder of 2.5% Convertible Senior Debentures.



*2.5% Convertible Senior Debentures*		means those certain 2.5% convertible senior debentures due 2021, issued by Mirant in the aggregate principal amount of $750,000,000 pursuant to the Indenture dated May 31, 2001, between Mirant and Bankers Trust Company, as trustee, as such indenture has been or may be amended or supplemented from time to time.

*7.4% Senior Note Claims*		means Claims of 7.4% Senior Note Holders arising under, or as a consequence of owning, the 7.4% Senior Notes.

*7.4% Senior Note Holder*		means a holder of 7.4% Senior Notes.

*7.4% Senior Notes*		means those certain 7.4% senior notes due 2004, issued by Mirant in the aggregate principal amount of $200,000,000 pursuant to the Mirant Fiscal Agency Agreement.


*Administrative Claim*		means a Claim incurred by a Debtor (or its Estate) on or after the Petition Date and before the Effective Date for a cost or expense of administration in the Chapter 11 Cases that is entitled to priority under sections 503(b) and 507(a)(1) of the Bankruptcy Code, including, without limitation, Fee Claims and DIP Claims.

*Affiliate*		means, with respect to any Person, all Persons that would fall within the definition assigned to such term in section 101(2) of the Bankruptcy Code, if such Person were a debtor in a case under the Bankruptcy Code.

*Allowed*		means:

		(i) with respect to any Claim, except for a Claim that is an Administrative Claim, such Claim to the extent it is not a Contested Claim as of the Effective Date.

		(ii) with respect to an Administrative Claim, an Administrative Claim that has become fixed in amount pursuant to the procedures set forth in Section 5.2 of the Plan of Reorganization; and

		(iii) with respect to Equity Interests, the Equity Interests in any Debtor as reflected in the stock transfer register of such Debtor as of the Effective Date.

*Assets*		means, with respect to any Debtor, all of such Debtors’ right, title and interest of any nature in property of any kind, wherever located, as specified in section 541 of the Bankruptcy Code.

*Avoidance Actions*		means all Causes of Action of the Estates that arise under the Bankruptcy Code, including, but not limited to, all preference, fraudulent transfer, and other Causes of Action arising under Chapter 5 of the Bankruptcy Code.

*Ballot*		means each of the ballot forms distributed with the Disclosure Statement to each holder of an impaired Claim or impaired Equity Interest entitled to vote under Section 6.1 of the Plan of Reorganization in connection with the solicitation of acceptances of the Plan of Reorganization, for purposes of indicating acceptance or rejection of the Plan of Reorganization.

*Bankruptcy Code*		means the Bankruptcy Reform Act of 1978, as codified at title 11 of the United States Code and as amended from time to time as applicable to the Chapter 11 Cases.

*Bankruptcy Court*		means the United States District Court having jurisdiction over the Chapter 11 Cases and, to the extent any reference is made pursuant to section 157 of title 28 of the United States Code or the General Order of the District Court pursuant to section 151 of Title 28 of the United States Code, the bankruptcy unit of such United States District Court.

*Bankruptcy Rules*		means, collectively, the Federal Rules of Bankruptcy Procedure promulgated under section 2075 of title 28 of the United States Code and the Official Bankruptcy Forms, the Federal Rules of Civil Procedure, as applicable to the Chapter 11 Cases or proceedings therein, and the Local Rules of the Bankruptcy Court, all as now in


*Collateral Agent*		means the Person appointed to act as collateral agent under the Security Documents.

*Commodity Prepay Facility*		means (i) the ISDA Master Agreement, dated October 11, 2001, between MAEM and HVB Risk Management Products Inc. and (ii) the ISDA Master Agreement, dated October 11, 2001, between MAEM and Scarlett Resource Merchants LLC and all related documents, instruments and agreements, as they have been or may be amended or supplemented from time to time.

*Commodity Prepay Facility Claim*		means a Claim against MAEM arising under the Commodity Prepay Facility.

*Commodity Prepay Facility Guaranty*		means the Guaranties, dated October 11, 2001, in favor of each of HVB Risk Management Products Inc. and Scarlett Resource Merchants LLC, pursuant to which Mirant guaranteed MAEM’s obligations and all related documents, instruments and agreements, as they have been or may be amended or supplemented from time to time.

*Commodity Prepay Facility Guaranty Claim*		means a Claim arising under the Commodity Prepay Facility Guaranty.

*Common Stock*		means the common stock, par value $.01, issued by Mirant prior to the Petition Date.

*Confirmation*		means entry by the Bankruptcy Court of the Confirmation Order.

*Confirmation Date*		means the date on which the Clerk of the Bankruptcy Court enters the Confirmation Order on the docket of the Bankruptcy Court.

*Confirmation Hearing*		means the hearing held by the Bankruptcy Court, as it may be continued from time to time, on confirmation of the Plan of Reorganization.

*Confirmation Order*		means the order of the Bankruptcy Court confirming the Plan of Reorganization under section 1129 of the Bankruptcy Code.

*Contested Claim*		means a Claim (i) to the extent it is listed in the Schedules as disputed, contingent, or unliquidated, in whole or in part and as to which no proof of claim has been filed, (ii) that is listed in the Schedules as undisputed, liquidated, and not contingent and as to which a proof of claim has been filed with the Bankruptcy Court, to the extent (A) the proof of claim amount exceeds the amount indicated in the Schedules, or (B) the proof of claim priority differs from the priority set forth in the Schedules in each case as to which an objection was filed by the Objection Deadline, unless and to the extent allowed in amount and/or by a Final Order of the Bankruptcy Court; (iii) that is not listed in the Schedules or was listed in the Schedules as disputed, contingent or unliquidated, in whole or in part, but as to which a proof of claim has been filed with the Bankruptcy Court in each case as to which an objection was filed by the Objection Deadline, unless and to the extent allowed in amount and/or by a Final Order of the Bankruptcy Court; or (iv) as to which an objection has been filed on or before the Effective Date; provided, that a Claim that is fixed in amount and classification pursuant to the Plan of Reorganization or by Final Order on or before the Effective Date shall not be a Contested Claim.


*CSFB 364-day Revolver*		means that certain credit facility, dated July 17, 2001, in the aggregate principal amount of $1,125,000,000, between Mirant, as borrower, the initial lenders named therein, and Credit Suisse First Boston, as administrative agent, and having a maturity date of July 17, 2003, and all related documents, instruments and agreements, as they have been or may be amended or supplemented from time to time.

*CSFB 364-day Revolver Claim*		means a Claim arising under the CSFB 364-day Revolver.

*CSFB 4-year Revolver*		means that certain credit facility, dated July 17, 2001, in the aggregate principal amount of $1,125,000,000, between Mirant, as borrower, the initial lenders named therein, and Credit Suisse First Boston, as administrative agent, and having a maturity date of July 17, 2005, and all related documents, instruments and agreements, as they have been or may be amended or supplemented from time to time.

*CSFB 4-year Revolver Claim*		means a Claim arising under the CSFB 4-year Revolver.

*Debtor*		means, individually, any of Mirant, MAEM, MADCI and MLW, and collectively, Mirant, MAEM, MADCI and MLW.

*Debtor in Possession*		means any Debtor, in its capacity as a debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.

*DIP Agent*		means the agent for the DIP Lenders under the DIP Credit Agreement.

*DIP Claims*		means the Claims of the DIP Lenders under the DIP Credit Agreement and the DIP Order.

*DIP Credit Agreement*		means the credit agreement to be entered into by the Debtors and certain subsidiaries, as borrowers and guarantors, the DIP Agent, and the DIP Lenders, in connection with the commencement of the Chapter 11 Cases, pursuant to which Mirant shall be permitted to make borrowings prior to the Effective Date, to the extent approved by the DIP Order, together with all documents, instruments and agreements executed or entered into in connection therewith, and any amendments thereto.

*DIP Lenders*		means the lenders under the DIP Credit Agreement.

*DIP Order*		means, collectively, the order(s) of the Bankruptcy Court approving the DIP Credit Agreement, authorizing the Debtors in Possession that are parties thereto to enter into the DIP Credit Agreement, granting certain rights, protections and liens to and for the benefit of the DIP Lenders as set forth in the DIP Order, and authorizing Mirant to make borrowings under the DIP Credit Agreement.

*Disallowed*		means, when used with respect to a Claim, a Claim, or such portion of a Claim, that has been disallowed by a Final Order.

*Disbursing Agent*		means Mirant, acting on behalf of the Debtors, which shall (i) make the Plan Distributions contemplated through the Plan of Reorganization, the Confirmation Order, or any other relevant Final Order, and (ii) perform any other act or task that is or may be delegated to the Disbursing Agent through the Plan of Reorganization.

*Disclosure Statement*		means all materials distributed to the holders of Mirant Bank Claims and Mirant Impaired Note Claims in connection with the solicitation


*New Mirant Secured Credit Facility*		means the new secured credit facility to be dated as of the Effective Date in the aggregate principal amount of approximately $3.15 billion, which will include a term facility in the amount of $2.05 billion and a revolving Facility in the amount of $1.1 billion, pursuant to which the Mirant Bank Claims, the Commodity Prepay Facility Claims, and the Equipment Warehouse Facility Claims will be satisfied through the Plan of Reorganization, which is defined in the first part of this Offering Circular and Disclosure Statement as the “Mirant Secured Credit Facility.” The New Mirant Secured Credit Facility will be filed with the Bankruptcy Court as a Plan Document.

*New Mirant Secured Lender*		means each lender under the New Mirant Secured Credit Facility.

*Notice of Confirmation*		means the notice of entry of the Confirmation Order to be mailed by the Claims Agent to holders of Claims and Equity Interests.

*Objection Deadline*		means the deadline for filing objections to Claims as set forth in Section 9.1 of the Plan of Reorganization.

*Person*		means an individual, corporation, partnership, limited liability company, joint venture, trust, estate, unincorporated association, unincorporated organization, governmental entity, or political subdivision thereof, or any other entity.

*Petition Date*		means the date on which the Chapter 11 Cases are commenced.

*Plan Distribution*		means the payment or distribution through the Plan of Cash, Assets, or instruments evidencing an obligation of any Debtor, as applicable, to the holder of an Allowed Claim.

*Plan Documents*		means the documents that aid in effectuating the Plan of Reorganization as specifically identified as such herein and filed with the Bankruptcy Court as specified in Section 1.5 of the Plan.

*Plan of Reorganization*		means the Chapter 11 plan of reorganization of the Debtors, including the Plan Documents and all supplements, appendices and schedules thereto, either in its present form or as it may be amended, supplemented, or otherwise modified from time to time, and the exhibits and schedules hereto, as the same may be in effect at the time such reference becomes operative.

*Post-Confirmation Interest*		means simple interest at a rate as the Bankruptcy Court may determine at the Confirmation Hearing is appropriate, such interest to accrue from the Distribution Date with respect to such Claim.

*Priority Claim*		means any Claim to the extent such Claim is entitled to priority in right of payment under section 507(a) of the Bankruptcy Code, other than Secured Claims, Administrative Claims, and Tax Claims.

*Professional Person*		means a Person retained or to be compensated for services rendered or costs incurred on or after the Petition Date and on or prior to the Effective Date pursuant to sections 327, 328, 329, 330, 503(b) or 1103 of the Bankruptcy Code in these Chapter 11 Cases.

*pro rata*		means, at any time, the proportion that Face Amount of a Claim in a particular Class bears to the aggregate Face Amount of all Claims (including Disputed Claims, but excluding Disallowed Claims) in that Class, unless the Plan of Reorganization provides otherwise.


*Reorganized Debtors*		means the Debtors, on or after the Effective Date.

*Reorganized Mirant*		means Mirant, or any successors thereto by merger, consolidation, or otherwise, on or after the Effective Date.

*Schedules*		means the schedules of assets and liabilities and the statements of financial affairs filed by the Debtors with the Bankruptcy Court, if any, under section 521 of the Bankruptcy Code and in conformity with the Official Bankruptcy Forms of the Bankruptcy Rules, as such schedules and statements may be amended or supplemented by the Debtors in Possession from time to time in accordance with Bankruptcy Rule 1009.

*Secured Claim*		means (i) a Claim (other than the DIP Claims) secured by a lien on any Assets, which lien is valid, perfected, and enforceable under applicable law and is not subject to avoidance under the Bankruptcy Code or applicable non-bankruptcy law, and which is duly established in the Chapter 11 Cases, but only to the extent of the value of the holder’s interest in the collateral that secures payment of the Claim, (ii) a Claim against the Debtors that is subject to a valid right of recoupment or setoff under section 553 of the Bankruptcy Code, but only to the extent of the Allowed amount subject to recoupment or setoff as provided in section 506(a) of the Bankruptcy Code and (iii) a Claim allowed through the Plan of Reorganization as a Secured Claim.

*Secured Parties*		means the New Mirant Agent, the New MAG Agent, the Collateral Agent, the New Indenture Trustees, the New MAG Secured Lenders, the New Mirant Secured Lenders and holders of the New Mirant 7.5% Senior Secured Notes and the New MAG 7.5% Senior Secured Notes, each of which shall receive the benefit of a security interest and lien in the Collateral pursuant to the Security Documents.

*Securities Act*		means the Securities Act of 1933, 15 U.S.C. §§ 77c-77aa, as amended from time to time and any successor statutes.

*Securities Litigation*		means that certain litigation commenced against Mirant in the United States District Court for the Northern District of Georgia and the United States District Court for the Northern District of California, alleging among other things, violation by Mirant of sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and seeking unspecified damages including compensatory damages.

*Securities Litigation Claims*		means a Claim arising, on or prior to the Petition Date, (i) under the Securities Litigation or (ii) from the rescission of a purchase or sale of a security of Mirant, for damages arising from the purchase or sale of such security or for reimbursement or contribution allowed under section 502 of the Bankruptcy Code on account of such a claim.

*Security Documents*		means those stock pledge agreements and security agreements and similar documents granting the Collateral Agent a lien and security interest in and to the Collateral for the benefit of the Secured Parties.

*Subordinated Claim*		means a Claim against any Debtor that is subject to being subordinated pursuant to section 510 of the Bankruptcy Code.

*Solicitation Agent*		means Innisfree M&A Incorporated, in its capacity as information and voting agent for the Debtor.


*Solicitation Package*		means a copy of this Offering Circular and Disclosure Statement (including all Exhibits) and related materials and, where appropriate, Ballots.

*Statement*		means the statement of financial affairs, if any, prepared and Filed by the Debtors under section 521 of the Bankruptcy Code and Rule 1007 of the Federal Rules of Bankruptcy Procedure.

*Tax Claim*		means a Claim against any of the Debtors that is of a kind specified in section 507(a)(8) of the Bankruptcy Code.

*Unsecured Claim*		means a Claim against the Debtor, other than an Administrative Claim, a Priority Claim, a Tax Claim or a Secured Claim.

*Voting Deadline*		means June 27, 2003.

*Voting Record Date*		means May 30, 2003.


	*Applications for Retention of Mirant’s Professionals*


	*Motion to Approve Combined Offering Circular and Disclosure Statement and Confirmation Hearing*


	*Motion to Continue Using Existing Cash Management Systems*


	*Motion for Authority to Pay Prepetition Employee Compensation and Associated Benefits*


	*Motion for Authority to Enter into Derivative Contracts and Provide Credit Support Related to such Derivative Contracts*


	*Creditors and Equity Interest Holders Entitled to Vote on the Plan of Reorganization*


	*Certain Matters Regarding Classification and Treatment of Claims and Interests*


	*Method of Distribution through the Plan of Reorganization*


	Distributions for Claims or Equity Interests Allowed as of the Effective Date


	Delivery of Distributions and Undeliverable or Unclaimed Distributions


	Allocation of Plan of Reorganization Distributions between Principal and Interest