Exhibit 10(d)

                     

POWER PURCHASE AGREEMENT

dated as of

January 1, 2004

By and Between

NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP

and

FPL ENERGY POWER MARKETING, INC.

 

 

POWER PURCHASE AGREEMENT

THIS POWER PURCHASE AGREEMENT (the "Agreement") is entered into as of January 1,
2004, by and between North Jersey Energy Associates, A Limited Partnership, a
New Jersey limited partnership ("NJEA"), and FPL Energy Power Marketing, Inc, a
Florida corporation ("PMI"). NJEA and PMI are individually referred to herein as
a "Party" and are collectively referred to herein as the "Parties".

RECITALS

WHEREAS, NJEA owns a nominal 300 MW natural gas-fired electricity and steam
generating plant located in the borough of Sayreville, New Jersey (the
"Facility").

WHEREAS

, Jersey Central Power & Light Company ("JCP&L") and NJEA are parties to a Power
Purchase Agreement dated as of October 22, 1987, as amended to date (the
"Existing PPA"), pursuant to which JCP&L purchases from NJEA contract capacity
of not less than 250 MW and the associated electricity of the Facility.

WHEREAS

, NJEA and JCP&L have entered into an Amended and Restated Power Purchase
Agreement dated May 16, 2003, as amended to date (collectively, the "Amended
PPA") that amends and restates the Existing PPA and provides NJEA with the
option of supplying Contract Energy from sources other than the Facility.

WHEREAS

, in connection with the effectiveness of the Amended PPA, NJEA and PMI desire
to enter into this Agreement in order to provide NJEA with the right to purchase
from PMI fifty percent (50%) of NJEA's remaining delivery obligations to JCP&L
during Off-Peak Hours under the Amended PPA after accounting for Facility
dispatch, up to the Maximum Nomination Quantity.

WHEREAS

, in connection with the effectiveness of the Amended PPA and this Agreement,
NJEA and Tractebel Energy Marketing, Inc. ("TEMI") are entering into an
agreement (the "TEMI PPA") on substantially similar terms and conditions as this
Agreement in order to provide NJEA with the right to purchase from TEMI the
other fifty percent (50%) of NJEA's remaining delivery obligations to JCP&L
during Off-Peak Hours under the Amended PPA after accounting for Facility
dispatch, up to the Maximum Nomination Quantity.

NOW, THEREFORE,

in consideration of the premises and of the mutual agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereby agree as follows:

1. DEFINITIONS

1.1 Defined Terms.

Capitalized terms used in this Agreement that are not defined herein shall have
the respective meanings given in Amended PPA. In addition to terms defined
elsewhere in this Agreement, the following terms are defined as follows:

"Alternate Delivery Point" means (i) any nodal point included within the JCP&L
Zone, (ii) the JCP&L Zone or (iii) any other delivery point mutually agreed to
by the Parties. In the event PJM or its successor no longer recognizes a nodal
point that was part of the JCP&L Zone on the date of execution of this
Agreement, such nodal point shall be an Alternate Delivery Point for purpose of
this Agreement notwithstanding its subsequent exclusion from the nodal points
included in the JCP&L Zone by PJM.

"Ancillary Termination Damages" shall mean penalties assessed by PJM against the
terminating Party (and/or JCP&L, in the case of NJEA as the Terminating Party)
and all reasonable fees and expenses incurred by the terminating Party in
connection with the termination of this Agreement pursuant to Section 5.2
hereof.

"Contract Rate" means $28.00/MWh.

"Energy" means firm electricity having the characteristics described in
Section 3.2 of the Amended PPA.

"Nomination Quantity" means the quantity of Energy specified in the Call Notice,
which amount shall equal fifty percent (50%) of (i) the maximum amount of Energy
(in MWs per hour expressed as a whole number) that NJEA is permitted to deliver
to JCP&L under the Amended PPA during Off-Peak Hours occurring during such day
less (ii) the amount of electricity (in MWs per hour expressed as a whole
number) that the Facility is expected to generate for sale to JCP&L under the
Amended PPA during Off-Peak Hours occurring during such day.

"Maximum Nomination Quantity" means (i) 125 MWs per Off-Peak Hour for the months
of December through March and June through September and (ii) 100 MWs per
Off-Peak Hour for the months of April, May, October and November.

"Replacement Period" shall mean the period beginning on the date this Agreement
is terminated pursuant to Section 5.2 hereof and ending at 11:59 p.m. August 13,
2011.

"Replacement Power" means electricity purchased by NJEA as replacement for any
Delivery Shortfall. Replacement Power shall not include Energy delivered to NJEA
on behalf of PMI pursuant to Section 3.1(a).

"Replacement Price" means the lesser of (A) the price at which NJEA (or any
other Person acting on its behalf), acting in a commercially reasonable manner,
purchases Replacement Power, plus (i) transaction and other administrative costs
reasonably incurred by NJEA (or any other Person acting on its behalf) in
purchasing such Replacement Power and (ii) additional transmission charges, if
any, reasonably incurred by NJEA (or any other Person acting on its behalf) to
transmit Replacement Power to the Delivery Point, or (B) the LMP at the Delivery
Point for such Replacement Power; provided, however, that in no event shall such
price include any penalties, ratcheted demand or similar charges, nor shall NJEA
be required to utilize or change its utilization of its owned or controlled
assets or market positions to minimize PMI's liability.

"Resale Price" shall mean, without duplication, (i) the price at which PMI,
acting in a commercially reasonable manner, sells or is paid for Rejected Power,
plus (ii) transaction and other administrative costs reasonably incurred by PMI
in re-selling such Rejected Power; provided, however, that in no event shall PMI
be required to utilize or change its utilization of its other assets or market
positions in order to minimize NJEA's liability for Rejected Power.

1.2 Rules of Interpretation.

In this Agreement, unless a clear contrary intention appears:

(i) the singular number includes the plural number and vice versa;

(ii) reference to any Person includes such Person's successors and assigns but,
if applicable, only if such successors and assigns are permitted by this
Agreement, and reference to a Person in a particular capacity excludes such
Person in any other capacity or individually;

(iii) reference to any gender includes the other gender;

(iv) reference to any agreement, document or instrument means such agreement,
document or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof; and

(v) in connection with capitalized terms hereunder that are defined in the
Amended PPA, where appropriate, references to JCP&L as the purchaser of Contract
Energy under the Amended PPA shall mean NJEA as the purchaser of Energy under
this Agreement and references to NJEA as the Seller of Contract Energy under the
Amended PPA shall mean PMI as the Seller of Energy under this Agreement.

2. TERM; TERMINATION

2.1 Term.

This Agreement shall become effective on the "Partial Termination Date" under
the Partial Termination Agreement dated as of July 11, 2003, between NJEA and
ProGas Limited (the "Effective Date") and shall continue in full force and
effect until the date and time of the termination of the Amended PPA, unless
this Agreement is terminated sooner pursuant to Section 2.2. The period during
which this Agreement is in effect is herein referred to as the "Term".

2.2 Termination.

NJEA may terminate this Agreement without cause and for convenience upon five
(5) Business Days' notice to PMI, if NJEA determines (in its sole discretion)
that it is in its own best interests to so terminate the Agreement. NJEA shall
incur no additional liability to PMI as a result of its termination of this
Agreement pursuant to this Section 2.2; provided, however, that unless NJEA is
exercising its termination right pursuant to this Section 2.2 as a result of
performance deficiencies by PMI, NJEA shall not exercise its termination right
pursuant to this Section 2.2 unless it simultaneously exercises its right to
terminate the TEMI PPA pursuant to Section 2.2 of the TEMI PPA.

2.3 Effect of Termination.

Upon the expiration of this Agreement in accordance with its terms, the Parties
shall no longer be bound by the terms and provisions hereof, except (i) to the
extent necessary to provide invoices and make payments with respect to
deliveries and purchases hereunder prior to such termination or expiration,
(ii) to the extent necessary to enforce the rights and the obligations of the
Parties arising under this Agreement before such termination or expiration and
(iii) the obligations of the Parties hereunder with respect to confidentiality
and indemnification, which shall survive the expiration or termination of this
Agreement and shall continue for a period of two (2) calendar years following
such expiration or termination.

3. RIGHTS AND OBLIGATIONS OF PARTIES

3.1 Obligation to Purchase and Sell Energy.

(a) PMI shall deliver and sell, and NJEA shall receive and purchase, the
Nomination Quantity for such day specified in the Call Notice, as adjusted
pursuant to Section 3.3(c), but in no event more than the Maximum Nomination
Quantity, all in accordance with the terms of this Agreement. Notwithstanding
the foregoing, PMI shall deliver and sell and NJEA shall receive and purchase
the Maximum Nomination Quantity on the Effective Date without delivery of a Call
Notice to PMI. Energy delivered to NJEA hereunder by PMI or on behalf of PMI by
PMI's suppliers, designees or any other Person (including, without limitation,
PJM) shall be deemed delivered by PMI hereunder and PMI shall be solely
responsible for any costs payable to its suppliers for such delivery.

(b) In order to satisfy NJEA's delivery obligations to JCP&L during Off-Peak
Hours under the Amended PPA, NJEA shall first purchase NJEA's electricity
requirements ratably from (i) PMI pursuant to this Agreement and (ii) TEMI
pursuant to the TEMI PPA. NJEA may also purchase electricity from third parties
during Off-Peak Hours (1) to obtain Replacement Power, (2) to the extent that
NJEA's requirements for electricity exceed the Maximum Nomination Quantity and
(3) to the extent that PMI or TEMI, as applicable, is unable to increase its
deliveries to NJEA in connection with an intra-day amendment delivered pursuant
to Section 3.3(c) below or Section 3.3(c) of the TEMI PPA, respectively.

(c) If deliveries of electricity from NJEA, or on behalf of NJEA under the
Amended PPA, are curtailed for any reason, NJEA shall have the right to curtail
deliveries of Energy hereunder, provided that deliveries of Energy hereunder and
deliveries of "Energy" from TEMI under the TEMI PPA shall be curtailed ratably,
and such curtailment (hereunder and under the TEMI PPA) shall not occur until
all other deliveries of electricity (except for deliveries from the Facility) to
NJEA have been curtailed.

(d) NJEA will not treat PMI less favorably hereunder than it does TEMI under the
TEMI PPA. NJEA shall not deliver an intra-day amendment pursuant to
Section 3.3(c) that (i) increases the Nomination Quantity provided in the Call
Notice for such day unless it also delivers an intra-day amendment to TEMI
pursuant to Section 3.3(c) of the TEMI PPA that increases the Nomination
Quantity provided in the Call Notice to TEMI for such day by an equal amount or
(ii) decreases the Nomination Quantity provided in the Call Notice for such day
unless it also delivers an intra-day amendment to TEMI pursuant to
Section 3.3(c) of the TEMI PPA that decreases the Nomination Quantity provided
in the Call Notice to TEMI for such day by an equal amount. If TEMI is unable to
increase its deliveries of Energy by the amount requested in an intra-day
amendment delivered pursuant to Section 3.3(c) of the TEMI PPA despite its
commercially reasonable efforts, then NJEA may increase its Nomination Quantity
to PMI for such day pursuant to Section 3.3(c) by an amount equal to the
requested increase in the intra-day amendment provided to TEMI that TEMI is
unable to deliver. Notwithstanding any provision contained herein to the
contrary, in order to accommodate the need to express Energy amounts in whole
numbers, the Nomination Quantity provided to PMI hereunder for any day and the
Nomination Quantity provided to TEMI under the TEMI PPA for such day may vary by
1 MW. To the extent any such variations occur, NJEA shall use good faith efforts
to provide equal Nomination Quantities from each of PMI and TEMI for each month
during the Term.

3.2 Delivery Parameters.

(a) Subject to Section 3.2(b), all Energy sold or delivered under this Agreement
by PMI to NJEA will be delivered to the Facility Bus.

(b) If PMI is unable to deliver Energy to the Facility Bus in accordance with
Section 3.2(a) due to the unavailability of transmission service or transmission
service interruptions or due to an event of force majeure that prevents its
supplier from delivering electricity to the Facility Bus, then NJEA shall use
reasonable efforts to cause JCP&L to accept delivery of Energy at an Alternate
Delivery Point provided that NJEA shall not be in default hereunder or incur any
liability to PMI if JCP&L does not accept or agree to the use of any proposed
delivery location as an Alternate Delivery Point. Provided that JCP&L consent
has been obtained pursuant to this Section 3.2(b), PMI may deliver Energy to one
or more Alternate Delivery Points for so long as one or more of the conditions
described above in this Section 3.2(b) continues and for so long as JCP&L's
consent to the use of the Alternate Delivery Point remains in effect; provided
that PMI shall reimburse NJEA all costs and expenses (including any costs and
expenses owed by NJEA to JCP&L under the Amended PPA) arising in connection with
the use of such Alternate Delivery Point. PMI shall use commercially reasonable
efforts to provide NJEA with reasonable prior and/or contemporaneous notice of
the expected duration of the conditions described above.

(c) PMI shall be responsible for all transmission charges, including, if any,
applicable ancillary service charges, line losses, congestion charges and other
PJM or applicable system costs or charges associated with transmission incurred,
in each case, in connection with the delivery of Energy to the Facility Bus or
to any Alternate Delivery Point.

(d) PMI shall not be responsible for any transmission charges, ancillary
services charges, line losses, congestion charges and other PJM or applicable
system costs or charges associated with transmission, incurred, in each case, in
connection with the transmission of Energy delivered under this Agreement by or
on behalf of PMI to JCP&L on behalf of NJEA from and after the delivery of such
Energy to the Facility Bus or an Alternate Delivery Point (as the case may be)
and the acceptance thereof by JCP&L, to any other location.

(e) Deliveries of Energy by PMI hereunder on any delivery day shall be at a
constant hourly rate during Off-Peak Hours occurring during such day.

3.3 Schedules; Bidding; Metering; Operations and Interconnection.

(a) (i) PMI shall schedule and bid deliveries of Energy delivered hereunder with
PJM in accordance with all PJM requirements applicable thereto. NJEA or its
agent shall cooperate with PMI in connection with any such scheduling and
bidding and shall promptly provide telemetering data and other information
reasonably requested by PMI for the purpose of assisting PMI with its scheduling
and bidding obligations hereunder. In accordance with current PJM scheduling
requirements, PMI shall submit all final schedules for Energy via the PJM
eSchedule system and NJEA or its agent shall confirm all such schedules, in each
case, before the PJM deadline applicable thereto.

(ii) PMI shall schedule Energy deliveries and designate the Facility Bus as the
delivery point unless PMI has requested an Alternate Delivery Point in
accordance with Section 3.2(b).

(b) The Parties agree to use commercially reasonable efforts to comply with all
applicable PJM Practices in connection with the scheduling and delivery of
Energy hereunder.

(c) Except with respect to the delivery of the Maximum Nomination Quantity on
the Effective Date in accordance with Section 3.1(a), NJEA shall provide PMI
with a written notice (the "Call Notice") of its intent to call upon and
purchase Energy no later than 10 a.m. (Eastern Prevailing Time) on the Business
Day before delivery (or such other time as mutually agreed upon by the Parties)
and shall specify the Nomination Quantity (which amount shall not exceed the
Maximum Nomination Quantity) therein. Each Call Notice may designate deliveries
of Nomination Quantities for a period of up to seven (7) days. The Nomination
Quantities contained in each Call Notice shall equal the Nomination Quantities
contained in the Call Notice delivered to TEMI for such period under the TEMI
PPA. NJEA may alter its Nomination Quantities up until 10 a.m. (Eastern
Prevailing Time) on the day before such delivery (or such other time as mutually
agreed upon by the Parties) provided that it makes the same alterations to its
Nomination Quantities to TEMI under the TEMI PPA. Notwithstanding the delivery
of a final Call Notice pursuant to the preceding sentence, if, on any day, NJEA
is operating the Facility to generate more or less electricity than contemplated
in the Call Notice, then, subject to Section 3.1(d), NJEA may make intra-day
amendments to the Call Notice and (i) if such intra-day amendment decreases the
Nomination Quantity provided in the Call Notice, then PMI shall decrease its
deliveries accordingly and NJEA shall not be obligated to purchase Energy in
excess of the revised Nomination Quantity set forth in such intra-day amendment
and (ii) if such intra-day amendment increases the Nomination Quantity provided
in the Call Notice, then PMI shall use commercially reasonable efforts to
increase its deliveries hereunder accordingly.

3.4 Title to Energy; Sales for Resale

(a) All Energy delivered hereunder by PMI or on behalf of PMI by PMI's
suppliers, designees or any other Person (including, without limitation, PJM)
shall be deliveries to NJEA for immediate redelivery to JCP&L, which redelivery
may be made by NJEA at any Delivery Point or Alternate Delivery Point under the
Amended PPA.

(b) All Energy delivered hereunder by PMI or by any other Person on its behalf
shall be sales for resale, with NJEA immediately reselling such Energy. NJEA
shall provide PMI with any certificates reasonably requested by PMI to evidence
that the deliveries of Energy hereunder are sales for resale, including without
limitation evidence that NJEA or its agent is authorized by FERC to engage in
wholesale power sales.

3.5 Failure of PMI to Deliver Scheduled Energy; Cover Damages.

(a) In the event PMI fails to deliver Energy it is obligated to deliver
hereunder and such failure is not excused under the terms of this Agreement
(such undelivered Energy to be referred to herein as the "Delivery Shortfall"),
then PMI shall pay NJEA, on the date payment would otherwise be due in respect
of the month in which the failure occurred, an amount for such deficiency equal
to the Cover Damages. "Cover Damages" means an amount equal to (A) the positive
difference, if any, between (i) the Replacement Price ($/MWh) multiplied by the
quantity (in MWh) of the Delivery Shortfall, minus (ii) the Contract Rate
($/MWh) multiplied by the quantity (in MWh) of the Delivery Shortfall, plus
(B) any applicable penalties assessed by PJM against NJEA and/or JCP&L as a
direct result of PMI's failure to deliver such Energy. Except as otherwise
provided in Section 5.2, the damages provided in this Section 3.5 shall be the
sole and exclusive remedy of NJEA for any failure of PMI to deliver Energy that
it is obligated to deliver hereunder.

(b) All Cover Damages payable by PMI pursuant to this Section 3.5 shall be paid
by netting such amounts against amounts otherwise payable by NJEA to PMI
hereunder. Each Party reserves to itself all rights, counterclaims and, except
as provided in Sections 3.5(a) and 3.6(a), other remedies and defenses
consistent with this Agreement which such Party has or may be entitled to
arising from or out of this Agreement.

3.6 Failure to Accept Delivery of Schedule Energy; Resale Damages

If NJEA fails to accept all or part of the Energy delivered to it by PMI
pursuant to and in accordance with this Agreement, and such failure to accept is
not excused under the terms of this Agreement (such Energy is referred to herein
as "Rejected Power"), then NJEA shall pay PMI, on the date payment would
otherwise be due in respect of the month in which the failure occurred, an
amount for such deficiency equal to the Resale Damages. "Resale Damages" means
an amount equal to (i) the positive difference, if any, between (x) the Contract
Rate ($/MWh) multiplied by the quantity (in MWh) of Rejected Power, minus
(y) the Resale Price ($/MWh) multiplied by the quantity (in MWh) of Rejected
Power resold by PMI, plus (ii) any applicable penalties assessed by PJM against
PMI as a direct result of NJEA failure to accept such Energy. Except as
otherwise provided in Section 5.2, the damages provided in this Section 3.6
shall be the sole and exclusive remedy of PMI for any failure of NJEA to accept
delivery of Energy tendered to it by PMI pursuant to and in accordance with this
Agreement.

3.7 Payment for Energy.

(a) All Energy delivered by PMI pursuant to and in accordance with this
Agreement shall be purchased by NJEA at the Contract Rate. Beginning on the
Effective Date and continuing for the Term, NJEA shall pay PMI a monthly payment
for Energy delivered during such month in an amount equal to (1) the product of
the total Energy (in MWh) delivered by PMI pursuant to and in accordance with
this Agreement during such month multiplied by the per-MWh Contract Rate for
each MWh of such delivered Energy, plus (2) any applicable Resale Damages for
such month, less (3) any applicable Cover Damages for such month, plus or minus
(4) any applicable costs and expenses for deliveries to an Alternate Delivery
Point during such month pursuant to Section 3.2(b), plus or minus (5) any PJM
Reconciliation Amount for such month.

(b) For each month during the Term, NJEA shall prepare and present to PMI, on or
before the twenty fifth (25th) day of the subsequent month, a statement (in
$/kWh) for Energy delivered to NJEA during such month in accordance with
Section 3. Such statement shall indicate (1) the total MWhs of Energy delivered
or supplied by PMI pursuant to and in accordance with this Agreement during the
month and the calculation of the payment due pursuant to Section 3.7(a), (2) any
costs and expenses in connection with deliveries to an Alternate Delivery Point
during the month pursuant to Section 3.2(b) and (3) the PJM Reconciliation
Amount.

3.8 Payment and Disputes; Reconciliation with PJM.

(a) Unless otherwise agreed by the Parties, payment of amounts reflected in a
statement rendered pursuant to Section 3.7(b) hereof shall be due and payable on
or before the second Business Day after the last Business Day of the month in
which the statement is delivered to PMI. Payments shall be made by wire transfer
to an account designated by PMI in a notice delivered to NJEA, or in the case of
a payment due to NJEA, to an account designated by NJEA in the statement or in a
written notice delivered to PMI.

(b) In the event PMI disputes all or any part of a statement delivered to it
pursuant to Section 3.7(b), PMI shall notify NJEA of the basis for the dispute
in writing, accompanied by supporting documentation, within a twenty (20) day
period from receipt of such statement. Upon receipt of notice of the dispute and
supporting documentation, NJEA shall have thirty (30) days from receipt of such
notice to resolve any dispute with PMI. In the event the dispute is not resolved
within the thirty (30) day period, either Party may submit the matter to
arbitration for resolution in accordance with this Agreement; provided, however,
that PMI agrees that at the request of NJEA, PMI shall participate with or
reasonably assist NJEA in the conduct of dispute resolution proceedings against
JCP&L under the Amended PPA as and to the extent the same facts or occurrences
are the basis of the disputes under both this Agreement and the Amended PPA. In
the event of any dispute regarding a statement, the undisputed portion thereof
shall be paid when due as if there were no dispute, and the disputed portion
shall not be due until the dispute is resolved in favor of the Party claiming
entitlement to payment. The disputed amount of any statement shall accrue
interest at the Late Payment Rate from the date payment of such amount would
have been due absent the dispute with respect to such amount until the date
payment is made.

(c) In the event that PJM billing and reconciliation statements issued pursuant
to the PJM Agreement contain information relating to deliveries of Energy
hereunder that differ from the information for the same period contained in
statements generated by NJEA pursuant to Section 3.7(b), then the dollar amount
of such difference (the "PJM Reconciliation Amount") shall be added to or
subtracted from (as appropriate) the payment calculated pursuant to
Section 3.7(a) for the next billing month. Upon request by PMI, NJEA shall
promptly provide to PMI any PJM reconciliation statements, notices, invoices,
and other records as are reasonably necessary to provide written substantiation
of the quantities, prices, calculations and other pertinent data used by NJEA in
rendering the monthly statements pursuant to Section 3.7(b) hereof.

3.9 Interest on Late Payment.

If a payment is not received when due under this Agreement, the delinquent Party
shall pay to the other Party interest on such unpaid amount which shall accrue
from the due date until the date upon which payment in full is made at the prime
lending rate as may from time to time be published in The Wall Street Journal
under "Money Rates" on such day (or if not published on such day on the most
recent preceding day on which published), plus two percent (2%) (the "Late
Payment Rate").

4 REPRESENTATIONS AND WARRANTIES

4.1 Representations and Warranties of PMI.

PMI hereby represents and warrants to NJEA as of the Effective Date as follows:

(a) Organization and Good Standing; Power and Authority. PMI is a corporation,
validly existing and in good standing under the laws of the State of Florida and
is duly authorized to transact business as a foreign corporation and is in good
standing in each jurisdiction required in order to perform its obligations under
this Agreement. PMI has all requisite corporate power and authority to execute,
deliver, and perform its obligations under this Agreement.

(b) Due Authorization; No Conflicts. The execution and delivery by PMI of this
Agreement, and the performance by PMI of its obligations hereunder, have been
duly authorized by all necessary actions on the part of PMI and do not and,
under existing facts and law, will not: (i) contravene its articles of
incorporation or any other governing documents; (ii) conflict with, result in a
breach of, or constitute a default under any note, bond, mortgage, indenture,
deed of trust, license, contract or other agreement to which it is a party or by
which any of its properties may be bound or affected; (iii) violate any order,
writ, injunction, decree, judgment, award, statute, law, rule, regulation or
ordinance of any governmental authority or agency applicable to it or any of its
properties; or (iv) result in the creation of any lien, charge or encumbrance
upon any of its properties pursuant to any of the foregoing.

(c) Binding Agreement. This Agreement has been duly executed and delivered on
behalf of PMI and, assuming the due execution hereof and performance hereunder
by NJEA, constitutes a legal, valid and binding obligation of PMI, enforceable
against it in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and by the application of principles of
equity.

(d) No Proceedings. There are no actions, suits or other proceedings, at law or
in equity, by or before any governmental authority or agency or any other body
pending or, to the best of its knowledge, threatened against or affecting PMI or
any of its properties (including, without limitation, this Agreement) which
relate in any manner to this Agreement or any transaction contemplated hereby,
or which PMI reasonably expects to lead to a material adverse effect on (i) the
validity or enforceability of this Agreement or (ii) PMI's ability to perform
its obligations under this Agreement.

(e) Consents and Approvals. The execution, delivery and performance by PMI of
its obligations under this Agreement does not and, under existing facts and law,
will not, require any approval, consent, permit, license or other authorization
of, or filing or registration with, or any other action by, any Person which has
not been duly obtained, made or taken, and all such approvals, consents,
permits, licenses, authorizations, filings (except for informational filings
with FERC), registrations and actions are in full force and effect, final and
non-appealable.

(f) Negotiations. The terms and provisions of this Agreement are the result of
arm's length and good faith negotiations on the part of PMI.

4.2 Representations and Warranties of NJEA.

NJEA hereby represents and warrants to PMI as of the Effective Date as follows:

(a) Organization and Good Standing; Power and Authority. NJEA is a limited
partnership validly existing and in good standing under the laws of the State of
New Jersey and is duly authorized to transact business as a foreign limited
partnership in each jurisdiction required in order to perform its obligations
under this Agreement. NJEA has all requisite limited partnership power and
authority to execute, deliver and perform its obligations under this Agreement.

(b) Due Authorization; No Conflicts. The execution and delivery by NJEA of this
Agreement and the performance by NJEA of its obligations hereunder have been
duly authorized by all necessary actions on the part of NJEA and its partners
and do not and, under existing facts and law, will not: (i) contravene its
partnership agreement or any other governing documents; (ii) conflict with,
result in a breach of, or constitute a default under any note, bond, mortgage,
indenture, deed of trust, license, contract or other agreement to which it is a
party or by which any of its properties may be bound or affected; (iii) violate
any order, writ, injunction, decree, judgment, award, statute, law, rule,
regulation or ordinance of any governmental authority or agency applicable to it
or any of its properties; or (iv) result in the creation of any lien, charge or
encumbrance upon any of its properties pursuant to any of the foregoing.

(c) Binding Agreement. This Agreement has been duly executed and delivered on
behalf of NJEA and assuming the due execution hereof and performance hereunder
by PMI, constitutes a legal, valid and binding obligation of NJEA, enforceable
against it in accordance with its terms, except as such enforceability may be
limited by law or principles of equity.

(d) No Proceedings. Other than the BPU proceedings in connection with the Final
Decision, there are no actions, suits or other proceedings, at law or in equity,
by or before any governmental authority or agency or any other body pending or,
to the best of its knowledge, threatened against or affecting NJEA or this
Agreement.

(e) Consents and Approvals. The execution, delivery and performance by NJEA of
its obligations under this Agreement do not and, under existing facts and law,
will not, require any approval, consent, permit, license or other authorization
of, or filing (except for informational filings with the Federal Energy
Regulatory Commission) or registration with, or any other action by, any Person
which has not been duly obtained, made or taken, and all such approvals,
consents, permits, licenses, authorizations, filings, registrations and actions
are in full force and effect, final and non-appealable. NJEA is authorized by
FERC to engage in wholesale power sales, including the purchase and sale of all
Energy contemplated under this Agreement.

(f) Negotiations. The terms and provisions of this Agreement are the result of
arm's length and good faith negotiations on the part of NJEA.

5. BREACHES; REMEDIES

5.1 Events of Default; Cure Rights.

It shall constitute an event of default ("Event of Default") hereunder if:

(a) Representation or Warranty. Any representation or warranty set forth herein
is not accurate and complete in all material respects as of the date made,
unless such inaccuracy or incompleteness is capable of cure by the payment of
money and is cured within thirty (30) days after written notice thereof is given
by the non-defaulting Party to the breaching party, or unless such inaccuracy or
incompleteness is not capable of cure by the payment of money, but is otherwise
capable of cure, and the Party in default promptly begins and diligently and
continuously pursues such cure activity.

(b) Payment Obligations. Any payment due and payable by either Party to the
other Party hereunder is not made on the date due, and such failure continues
for more than five (5) Business Days after notice thereof is given to the
defaulting Party by the non-defaulting Party.

(c) Bankruptcy. Either party either (a) is adjudged bankrupt or files a petition
in voluntary bankruptcy under any provision of any bankruptcy law or consents to
the filing of any bankruptcy or reorganization petition against such Party under
any such law, or (without limiting the generality of the foregoing) files a
petition to reorganize such Party pursuant to 11 U.S.C. Subsection 101 or any
similar statute applicable to such Party, as now or hereinafter in effect, or
(b) makes an assignment for the benefit of creditors, or admits in writing an
inability to pay its debts generally as they become due, or consents to the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of such Party, or (c) is subject to an order of a court of competent
jurisdiction appointing a receiver or liquidator or custodian or trustee of such
Party or of a major part of its property.

(d) Other Covenants. Subject to Section 3.6, a Party fails to perform, observe
or otherwise to comply with any obligation hereunder (other than as described in
Section 5.1(b),) and such failure continues for more than thirty (30) days after
notice thereof is given by the non-defaulting Party to the defaulting Party, or
if such default is not capable of cure within thirty (30) days, the Party in
default promptly begins such cure activity within such thirty (30) day period
and diligently and continuously pursues the cure activity such that the failure
is cured within ninety (90) days after notice thereof is given by the
non-defaulting Party to the defaulting Party.

5.2 Termination; Termination Payment.

(a) If an Event of Default as described in Section 5.1(b) hereof (payment
default) pursuant to which the payment default exceeds $100,000.00 unless
disputed in good faith and in accordance with Section 7, is continuing on the
sixtieth (60th) day following the receipt by the defaulting Party of written
notice provided by the non-defaulting Party to the defaulting Party of such
Event of Default, then the non-defaulting Party may at any time after the
expiration of the sixty (60) day cure period described above during which such
Event of Default remains uncured terminate this Agreement by giving written
notice thereof to the defaulting Party; provided, however, that any such
termination by the non-defaulting Party shall not diminish nor discharge the
payment obligation of the defaulting Party which gives rise to such termination.
Upon any such termination of this Agreement, PMI shall have the right to sell or
otherwise dispose of the Energy that was otherwise to be delivered under this
Agreement to by or on behalf of PMI to JCP&L on behalf of NJEA in any manner it
sees fit, free of any NJEA interest therein. Except as provided in this
Section 5.2(a), neither Party shall be entitled to terminate this Agreement due
to an Event of Default by the other Party.

(b) If NJEA terminates this Agreement pursuant to Section 5.2(a) due to an Event
of Default by PMI, then PMI shall pay liquidated damages to NJEA (the "PMI
Termination Payment"), which shall consist of (A) the mark-to-market value, if
any, of the terminated Energy payment obligation, as determined in a
commercially reasonable manner, with the reference contract price being the
Contract Rate hereunder, reasonably adjusted to reflect changes in the expected
Facility dispatch factor caused by changes in projected market prices and the
market consisting of a reasonable estimation of the sum of the amounts that
would be payable by NJEA for electricity during the Replacement Period from a
replacement supplier in the amounts that would have been required to be
delivered to JCP&L on behalf of NJEA hereunder absent termination of this
Agreement; plus (B) the total amount of Ancillary Termination Damages payable to
NJEA due to the termination. NJEA shall provide PMI with an invoice for the
damages calculated in accordance with this Section 5.2(b) plus any additional
amount owed to NJEA in connection with such termination as described in
Section 5.2(d) hereof which invoice shall set forth the calculation and
substantiation for such amounts. PMI shall pay the undisputed amount set forth
in such invoice within thirty (30) days by wire transfer to an account
designated by NJEA in the invoice or in a written notice delivered to PMI and,
with respect to any disputed amount of such invoice, pursue dispute resolution
proceedings as described in Section 3.8(b) and Section 7 hereof. Such liquidated
damages, which the Parties agree are reasonable, shall be payable on account of
the substantial consideration received by PMI as a result of this Agreement. The
Parties agree, and shall take all necessary action to establish before any court
or arbitral tribunal, that damages suffered by NJEA as a result of an Event of
Default on the part of PMI hereunder and termination of this Agreement are
reasonable and necessary to justly compensate NJEA for its damages resulting
from such Events of Default and termination of this Agreement.

(c) If PMI terminates this Agreement pursuant to Section 5.2(a) hereof due to an
Event of Default by NJEA, then NJEA shall pay liquidated damages to PMI (the
"NJEA Termination Payment"), which shall consist of (A) the mark-to-market
value, if any, of the terminated Energy payment obligation, as determined in a
commercially reasonable manner, with the reference contract price being the
Contract Rate hereunder, reasonably adjusted to reflect changes in the expected
Facility dispatch factor caused by changes in projected market prices and the
market consisting of a reasonable estimation of the sum of the amounts that
would be payable to PMI for the sale of electricity during the Replacement
Period to a replacement purchaser in the amounts that would have been required
to be accepted by JCP&L as deliveries on behalf of NJEA tendered to it by PMI
pursuant to and in accordance with this Agreement absent termination of this
Agreement; plus (B) the total amount of Ancillary Termination Damages payable to
PMI due to the termination. PMI shall provide NJEA with an invoice for the
damages calculated in accordance with this Section 5.2(c) plus any additional
amount owed to PMI in connection with such termination as described in
Section 5.2(d) hereof which invoice shall set forth the calculation and
substantiation for such amounts. NJEA shall pay the undisputed amount set forth
in such invoice within thirty (30) days by wire transfer to an account
designated by PMI in the invoice or in a written notice delivered to NJEA and,
with respect to any disputed amount of such invoice, pursue dispute resolution
proceedings as described in Section 3.8(b) and Section 7 hereof. Such liquidated
damages, which the Parties agree are reasonable, shall be payable on account of
the substantial consideration received by NJEA as a result of this Agreement.
The Parties agree, and shall take all necessary action to establish before any
court or arbitral tribunal, that damages suffered by PMI as a result of an Event
of Default on the part of NJEA hereunder and termination of this Agreement are
reasonable and necessary to justly compensate PMI for its damages resulting from
such Event of Default and termination of this Agreement.

(d) In connection with the termination of this Agreement pursuant to
Section 5.2(a) hereof each Party shall pay any amounts owed to the other Party
under this Agreement as of the date of such termination (without duplication of
the amounts set forth in the preceding paragraphs of this Section 5.2) on or
before the date required for payment of the amounts described in Sections 5.2(b)
or (c) above.

5.3 Remedies.

(a) Damages. Subject to Section 5.3(c) and to the extent not covered by
Section 3.5, Section 3.6 or Section 5.2 hereof each defaulting Party shall be
liable to the non-defaulting Party for any and all costs, expenses, damages and
losses suffered or incurred by such non-defaulting Party in connection with an
Event of Default on the part of the breaching Party.

(b) Other Remedies. In addition to the rights and remedies following an Event of
Default as set forth herein, each of the Parties shall also have available to it
all of the rights, powers and remedies available to it at law or in equity.

(c) Consequential Damages. Notwithstanding anything otherwise contained in this
Agreement to the contrary, neither NJEA nor PMI shall be liable to the other for
any indirect, consequential, incidental, punitive or exemplary damages. The
provisions of this Section 5.3(c) shall not affect or diminish the damage
amounts payable pursuant to Sections 3.5 and 3.6.

(d) Suspension of Deliveries. In the event of any payment default by NJEA
pursuant to Section 5.1(b) hereof (which by its terms includes a five (5)
Business Day cure period), then upon at least five (5) days' prior written
notice (which notice may not be delivered prior to the expiration of the five
(5) Business Day cure period described in Section 5.1(b) hereof), PMI may, but
shall not be obligated to, suspend deliveries of Energy under this Agreement
until such payment default has been cured. In the event of such suspension of
deliveries to NJEA pursuant to this Section 5.3(d), PMI shall be relieved of all
of its delivery obligations hereunder for the duration of such suspension.

6. FORCE MAJEURE

6.1 Force Majeure.

The term "Force Majeure" means an event or circumstance which prevents a Party
from performing its obligations hereunder (other than the obligation to make
payments then due or becoming due with respect to performance prior to the Force
Majeure), which event or circumstance was not anticipated and which is not
within the reasonable control of, or the result of the fault or negligence of,
the claiming Party, and which, by the exercise of due diligence (which may
include obtaining replacement power, to the extent obtainable on commercially
reasonable terms), the claiming Party is unable to overcome or avoid or cause to
be avoided on commercially reasonable terms and conditions. Notwithstanding the
foregoing, Force Majeure shall not be based on (i) the loss of NJEA's markets;
(ii) NJEA's inability economically to use or resell the Energy purchased
hereunder; (iii) the loss or failure of PMI's supply of electric energy unless
due to a failure of the transmission or distribution system which adversely
affects all or substantially all of the suppliers delivering or transmitting
Energy across such system or (iv) PMI's ability to sell Energy at a price
greater than the Contract Rate.

Subject to the satisfaction of the criteria set forth in the preceding
paragraph, Force Majeure events shall include, without limitation, action of a
court or regulatory authority, a Change in Law, catastrophic physical failures
or disruptions of the PJM transmission system; provided, however, that for
purposes of this Agreement, Force Majeure shall not include (i) any event that
results solely in an increase in PMI's or its suppliers' costs to perform
obligations to deliver Energy to PMI or on behalf of PMI hereunder or (ii) any
increase in the cost of electricity supplies or transmission or (iii) any
congestion costs.

6.2 Notice and Excuse of Performance.

(a) Following a Force Majeure event, if either Party believes that such event
will, or is reasonably likely to, adversely affect the performance of its
obligations under this Agreement, then as early as commercially practicable but
in no event later than two (2) Business Days after the initial occurrence of
such event and for contingency planning purposes, such Party shall provide
preliminary telephonic notice of the occurrence of a Force Majeure to the other
Party promptly followed by written notice on or before the tenth (10th) Business
Day after the initial occurrence of such event. Such written notice shall
specify the nature and, if known, cause of the Force Majeure, its anticipated
effect on the ability of such Party to perform obligations under this Agreement
and the estimated duration of any interruption in service or other adverse
effects resulting from such Force Majeure and shall be updated or supplemented
as necessary to keep the other Party advised of the effect and remedial measures
being undertaken to overcome the Force Majeure.

For the purposes of this Section 6.2, notification given to the schedulers for
the Parties and JCP&L shall be sufficient delivery of notice.

(b) Effect of Force Majeure on Performance of Obligations. To the extent either
Party is prevented by Force Majeure from carrying out, in whole or part, its
obligations under this Agreement and such Party (the "Claiming Party") gives
notice and details of the Force Majeure to the other Party as soon as
practicable, then the Claiming Party shall be excused from the performance of
its obligations with respect to such obligations (other than the obligation to
make payments then due or becoming due with respect to performance prior to the
Force Majeure). The Claiming Party shall remedy the Force Majeure with all
reasonable dispatch. The non-Claiming Party shall not be required to perform its
obligations to the Claiming Party corresponding to the obligations of the
Claiming Party excused by Force Majeure.

7. DISPUTE RESOLUTION

(a) Any controversy, dispute or claim between the Parties to this Agreement
which is based upon acts or occurrence that also give rise to a controversy,
dispute or claim by either NJEA or JCP&L under the Amended PPA shall be resolved
pursuant to the dispute resolution proceedings set forth in the Amended PPA;
provided, that if PMI will bear the economic consequences of any such decision
or dispute resolution under the Amended PPA then to the fullest extent possible,
NJEA shall allow PMI to participate in and/or control NJEA's conduct in such
negotiations or proceedings.

(b) Any controversy, dispute or claim between the Parties that is not described
in Section 7(a) above and which the Parties are unable to resolve by negotiation
shall be settled by arbitration in accordance with the Commercial Arbitration
Rules of the AAA, then in effect, and the provisions of this Section 7. No suit
at law that seeks to resolve any controversy, dispute or claim between the
Parties shall be instituted by either Party hereto, except where such suit is
instituted to confirm an arbitration award received pursuant to this Section 7.
However, nothing contained herein shall deprive either Party of any right to:
(i) obtain injunctive or other equitable relief in any court in the State of New
Jersey, on an interim basis pending disposition of the arbitration of any
controversy, dispute or claim if such relief is available under applicable
principles of law and equity (provided, however, that the arbitrators selected
pursuant to Section 7(e) hereof shall not regard as dispositive any such award
of injunctive or equitable relief when considering a dispute); and/or
(ii) assert any cross-claim, or third-party claim in any suit at law instituted
by a third party; and/or (iii) file and prosecute any complaint at and with the
regulatory agency having jurisdiction or make and prosecute any claim or
position in any filing made with such regulatory agency by either Party or some
third party.

(c) Any controversy, dispute or claim submitted to arbitration pursuant to
Section 7(b) shall be settled by arbitration to be conducted in New York, New
York. Any award entered pursuant to such arbitration shall be binding on both
Parties and judgment upon the award rendered or received may be entered in the
Superior Court of the State of New Jersey pursuant to N.J.S.A. 2A:24-1 et seq.

(d) Exclusive jurisdiction relative to the entry of judgment on any arbitration
award relative to any controversy or claim between the Parties resolved pursuant
to Section 7(b) shall be in any court of appropriate subject matter jurisdiction
located in New Jersey, and the Parties to this Agreement expressly subject
themselves hereby to the personal jurisdiction of said court for entry of any
such judgment and for the resolution of any dispute, action, or suit arising in
connection with the entry of such judgment.

(e) The controversy or claim to be arbitrated pursuant to Section 7(b) shall be
referred to three (3) arbitrators, one to be selected by each Party and the
third to be selected by the AAA. The selections to be made by the Parties shall
be made from the list of the National Panel of Arbitrators maintained by the
AAA. The arbitrator to be selected by the AAA shall be qualified to pass on any
technical or engineering matters and shall be independent of both PMI and NJEA.
All decisions and awards shall be made by a majority of the arbitrators, except
for decisions relating to discovery as set forth herein.

(f) In the event any arbitrator dies, or refuses to act, or becomes incapable,
incompetent or unfit to act before hearings have been completed and/or before an
award has been rendered, a successor arbitrator may be selected by the Party who
originally made the selection. The selection of the successor arbitrator shall
be made consistent with the selection procedure set forth in the preceding
paragraph.

(g) The arbitrators selected pursuant to this Agreement shall be governed by and
apply the laws of the State of New Jersey and federal law, as applicable, in
conducting any arbitration proceeding and/or in making any award.

(h) Notice of a demand for arbitration of any controversy or dispute between the
Parties shall be filed in writing with the AAA by the Party seeking arbitration
and a copy of same shall be served contemporaneously with such filing on the
other Party. The notice shall state, with specificity, the nature of the dispute
and the remedy sought. After such notice has been filed, the Parties may make
discovery of any matter relevant to such dispute before the hearing, to the
extent and in the manner provided by the Rules Governing Civil Practice in the
Superior Court contained in the Rules Governing the Courts of the State of New
Jersey. Any question that may arise with respect to the obligations of the
Parties relative to discovery and/or relative to the protection of the discovery
materials shall be referred solely to the arbitrator selected by the AAA. His
determination shall be final and conclusive. Discovery shall be completed not
later than ninety (90) days after filing of the notice of arbitration unless
such period for discovery is extended by the arbitrator selected by the AAA,
upon a showing of good cause by the Party requesting the extension.

(i) The arbitrators may consider any material that is relevant to the subject
matter of any such controversy even if such material might also be relevant to
an issue or issues not subject to arbitration hereunder. A stenographic record
shall be made of any arbitration hearing.

(j) Any costs associated with any arbitration under this Section 7, including
but not limited to attorney fees and witness expenses, shall be paid by the
Party against whom an award is entered unless the arbitrators by their award
otherwise provide.

(k) Arbitration may not be utilized and the arbitrators selected in accordance
with Section 7(b) through (k) shall not possess the authority or power to alter,
amend or modify any of the terms or conditions or charges set forth in this
Agreement, and further, the arbitrators may not enter any award which alters,
amends or modifies such terms, conditions or charges in any form or manner.

8. CONFIDENTIALITY

(a) PMI and NJEA each agree not to disclose to any Person and to keep
confidential, and to cause and instruct its Affiliates, officers, directors,
employees, partners and representatives not to disclose to any Person and to
keep confidential, any and all of the following information: (i) the terms and
provisions of this Agreement, (ii) any financial, pricing or supply quantity
information relating to the Energy to be supplied by PMI hereunder, the Facility
or NJEA and (iii) any information that is clearly marked or identified as
"Confidential". Notwithstanding the foregoing, any such information may be
disclosed: (A) to the extent required by applicable laws and regulations or by
any subpoena or similar legal process of any court or agency of federal, state
or local government so long as the receiving Party gives the non-disclosing
Party written notice at least three (3) Business Days prior to such disclosure,
if practicable, (B) to lenders and potential lenders to PMI or to lenders to
NJEA or other Person(s) in connection with the implementation of the
Restructuring and to financial advisors, rating agencies, and any other Persons
involved in the acquisition, marketing or sale or placement of such debt, (C) to
agents, trustees, advisors and accountants of the Parties or their Affiliates
involved in the financings described in clause (B) above, (D) to potential
assignees of PMI or NJEA or other Persons in connection with such proposed
assignment and to financial advisors, rating agencies, and any other Persons
involved in the marketing, placement or rating of such assignment, (E) to
agents, trustees, advisors and accountants of the Parties or their Affiliates or
agents, trustees, advisors and accountants of Persons involved in the potential
assignment described in clause (D) above or (F) to the extent the non-disclosing
Party shall have consented in writing prior to any such disclosure. With respect
to the Restructuring, this Section 8 shall supersede any prior confidentiality
agreement between NJEA and PMI or its Affiliates. Information (1) of a
confidential nature which has become public other than as a result of a breach
of this Section 8, (2) which was known to the disclosing Party prior to the
execution of this Agreement, or (3) which was received by the disclosing Party
from another source who in turn disclosed the information without violating
legal restrictions, will not be subject to the confidentiality obligations set
forth herein with respect to such information. Nothing in this Section 8(a)
shall limit or otherwise restrict the disclosure of information regarding the
Restructuring to the BPU or other governmental or regulatory entity or other
party thereto in connection with the satisfaction of requirements for regulatory
approvals required in connection with the transactions contemplated hereby or in
connection with any other NJEA proceeding before the BPU; provided, however,
that the Parties shall use their best efforts to cause all such submitted
information to be treated on a confidential basis by such government or
regulatory entities or other party and to prohibit, to the extent possible, the
public distribution of such information.

(b) No public statement, press release or other voluntary publication regarding
this Agreement or the Restructuring or any of the transactions contemplated
hereby shall be made or issued without the prior consent of the other Party,
which consent shall not be unreasonably withheld.

(c) Notwithstanding anything to the contrary, each Party (and each employee,
representative, or other agent of each Party for so long as they remain an
employee, representative or agent) may disclose to any and all Persons, without
limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by this Agreement and all materials of any kind (including opinions
or other tax analyses) that are provided to each Party relating to such tax
treatment and tax structure. The preceding sentence shall be effective
immediately upon commencement of discussions between the Parties (whether such
discussions commenced verbally, in writing, or otherwise) that are related to
the terms of this Agreement.

9. INDEMNIFICATION AND INDEMNIFICATION PROCEDURES

9.1 Indemnification.

Each Party ("Indemnifying Party") shall indemnify, defend and hold the other
Party ("Indemnified Party") and its partners, shareholders, partners, directors,
officers, employees and agents (including, but not limited to, Affiliates and
contractors and their employees), harmless from and against all liabilities,
damages, losses, penalties, claims, demands, suits and proceedings of any nature
whatsoever suffered or incurred by such Indemnified Party arising out of
the Indemnifying Party's gross negligence or willful misconduct (including,
without limitation, any breach of this Agreement resulting from gross negligence
or willful misconduct). In the event injury or damage results from the joint or
concurrent grossly negligent or willful misconduct of the Parties, each Party
shall be liable under this indemnification in proportion to its relative degree
of fault. Such duty to indemnify shall not apply to any claims which arise or
are first asserted more than two (2) years after the termination of this
Agreement. Such indemnity shall not include or compensate for indirect,
punitive, exemplary, incidental or consequential damages incurred by either
Party.

9.2 Indemnification Procedures.

Each Indemnified Party shall promptly notify the Indemnifying Party of any claim
in respect of which the Indemnified Party is entitled to be indemnified under
this Section 9. Such notice shall be given as soon as is reasonably practicable
after the Indemnified Party becomes aware of each claim; provided, however, that
failure to give prompt notice shall not adversely affect any claim for
indemnification hereunder except to the extent the Indemnifying Party's ability
to contest any claim by any third party is materially adversely affected. The
Indemnifying Party shall have the right, but not the obligation, at its expense,
to contest, defend, litigate and settle, and to control the contest, defense,
litigation and/or settlement of, any claim by any third party alleged or
asserted against any Indemnified Party arising out of any matter in respect of
which such Indemnified Party is entitled to be indemnified hereunder. The
Indemnifying Party shall promptly notify such Indemnified Party of its intention
to exercise such right set forth in the immediately preceding sentence and shall
reimburse the Indemnified Party for the reasonable costs and expenses paid or
incurred by it prior to the assumption of such contest, defense or litigation by
the Indemnifying Party. The Indemnifying Party shall have the right to select
legal counsel to defend a claim for which the Indemnified Party is seeking
indemnification pursuant to this Section 9.2, subject to the consent of the
Indemnified Party, which shall not be unreasonably delayed or withheld. If the
Indemnifying Party exercises such right in accordance with the provisions of
this Section 9 and any Indemnified Party notifies the Indemnifying Party that it
desires to retain separate counsel in order to participate in or proceed
independently with such contest, defense or litigation, such Indemnified Party
may do so at its own expense. If the Indemnifying Party fails to exercise it
rights set forth in the third sentence of this Section 9.2, then the
Indemnifying Party will reimburse the Indemnified Party for its reasonable costs
and expenses incurred in connection with the contest, defense or litigation of
such claim. No Indemnified Party shall settle or compromise any claim in respect
of which the Indemnified Party is entitled to be indemnified under this
Section 9 without the prior written consent of the Indemnifying Party; provided,
however, that such consent shall not be unreasonably withheld by the
Indemnifying Party

10. ASSIGNMENT

10.1 Prohibition on Assignment.

Except as provided in Section 10.2 hereof, this Agreement may not be assigned by
either Party without the prior written consent of the other Party, which may not
be unreasonably withheld. Any attempted or purported assignment of this
Agreement that is not expressly permitted pursuant to Section 10.2 hereof, shall
be null and void and shall have no effect on or with respect to the rights and
obligations of the Parties hereunder.

10.2 Permitted Assignment.

(a) In addition to its rights set forth in Section 10.2(b) hereof, either Party
shall have the right to assign all or any portion of its rights or obligations
under this Agreement without the consent of the other Party, for collateral
security purposes, to existing and any future lenders, including existing and
any future lenders of partners or affiliates. In connection with the exercise of
remedies under the security documents relating to such financing(s), the
lender(s) or trustee(s) shall be entitled to assign this Agreement to any
third-party transferee designated by such lender(s) or trustee(s).

(b) If either Party assigns this Agreement as provided in this Section 10.2,
then such Party shall cause to be delivered to the other Party an assumption
agreement (in form and substance reasonably satisfactory to the non-assigning
Party) of all of the obligations of the assigning Party hereunder by such
assignee.

(c) An assignment of this Agreement pursuant to this Section 10.2 shall not
release or discharge the assignor from its obligations hereunder unless the
assignee executes a written assumption agreement in accordance with
Section 10.2(b) hereof.

11. NOTICES

Any notice or communication given pursuant hereto shall be in writing and
(1) delivered personally (personally delivered notices shall be deemed given
upon written acknowledgment of receipt after delivery to the address specified
or upon refusal of receipt); (2) mailed by registered or certified mail, postage
prepaid (mailed notices shall be deemed given on the actual date of delivery, as
set forth in the return receipt, or upon refusal of receipt); (3) delivered by
facsimile (notices by facsimile shall be deemed given at the time it is
confirmed as delivered, but in any event no later than one (1) Business Day
after dispatch) or (4) delivered in full by telecopy (telecopied notices shall
be deemed given upon actual receipt), in either case addressed or telecopied as
follows or to such other addresses or telecopy numbers as may hereafter be
designed by either Party to the other in writing:

If to PMI:

FPL Energy Power Marketing, Inc.
700 Universe Blvd.
P.O. Box 14000
Juno Beach, FL 33408
Attention: Business Manager
Telephone: 561-304-5107
Facsimile: 561-304-5161

If to NJEA:

North Jersey Energy Associates, A Limited Partnership
c/o Northeast Energy, LP
c/o ESI Northeast Energy GP, Inc.
Its General Partner
700 Universe Blvd.
P.O. Box 14000
Juno Beach, FL 33408
Attention: Business Manager
Phone: 561-304-5107
Facsimile: 561-304-5161

12. WAIVER AND MODIFICATION

12.1 Modification or Waiver.

This Agreement may be amended and its provisions and the effects thereof waived
only by a writing executed by the Parties, and no subsequent conduct of any
Party or course of dealings between the Parties shall effect or be deemed to
effect any such amendment or waiver. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided. The failure of either Party to
enforce any provision of this Agreement shall not be construed as a waiver of or
an acquiescence in or to such provision.

13. INTERPRETATION

13.1 Choice of Law.

Interpretation and performance of this Agreement shall be in accordance with,
and shall be controlled by, the laws of the State of New Jersey (without regard
to its principles of conflicts of law).

13.2 Headings.

Article and Section headings are for convenience only and shall not affect the
interpretation of this Agreement. References to articles, sections and
appendices, and schedules are, unless the context otherwise requires, references
to articles, sections, appendices, and schedules of this Agreement. The words
"hereof" and "hereunder" shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.

14. COUNTERPARTS

Any number of counterparts of this Agreement may be executed, and each shall
have the same force and effect as an original.

15. NO DUTY TO THIRD PARTIES

Except as provided in any consent to assignment as specified in the other
provisions of this Agreement, nothing in this Agreement nor any action taken
hereunder shall be construed to create any duty, liability or standard of care
to any Person not a Party to this Agreement.

16. SEVERABILITY

If any term or provision of this Agreement or the interpretation or application
of any term or provision to any prior circumstance is held to be unenforceable,
illegal or invalid by a court or agency of competent jurisdiction, the remainder
of this Agreement and the interpretation or application of all other terms or
provisions to Persons or circumstances other than those which are unenforceable,
illegal or invalid shall not be affected thereby, and each term and provision
shall be valid and be enforced to the fullest extent permitted by law.

17. ENTIRE AGREEMENT

Upon the Effective Date, this Agreement, together with the agreements executed
or delivered on the Effective Date in connection herewith, shall constitute the
entire agreement and understanding between the Parties hereto and shall
supersede all prior agreements and understandings relating to the subject matter
hereof.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

 

IN WITNESS WHEREOF, each of PMI and NJEA has caused this Agreement to be duly
executed on its behalf as of the date first above written.

 

NORTH JERSEY ENERGY ASSOCIATES,
A LIMITED PARTNERSHIP

 

By:

Northeast Energy, LP, its general partner

 

By:

ESI Northeast Energy GP, Inc., its administrative general partner

 

By:

NATHAN E. HANSON

   

Nathan E. Hanson
Director

       

FPL ENERGY POWER MARKETING, INC.

 

By:

MARK MAISTO

   

Mark Maisto
President